Trials@uspto.gov
`Tel: 571-272-7822
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`
`
`Paper 36
`Entered: December 11, 2013
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`APPLE INC.
`Petitioner
`
`v.
`
`SIGHTSOUND TECHNOLOGIES, LLC
`Patent Owner
`____________
`
`Case CBM2013-00020 (Patent 5,191,573)
`Case CBM2013-00023 (Patent 5,966,440)1
`
`
`Before MICHAEL P. TIERNEY, JUSTIN T. ARBES, and
`GEORGIANNA W. BRADEN, Administrative Patent Judges.
`
`ARBES, Administrative Patent Judge.
`
`
`
`DECISION
`SightSound’s Motion for Additional Discovery
`37 C.F.R. § 42.51(b)(2)
`
`
`1 This Decision addresses an issue pertaining to both cases. Therefore, we
`exercise our discretion to issue one Decision to be filed in each case. The
`parties are not authorized to use this style heading for any subsequent
`papers.
`
`
`
`
`Tel: 571-272-7822
`
`
`
`
`Paper 36
`Entered: December 11, 2013
`
`
`
`
`
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`APPLE INC.
`Petitioner
`
`v.
`
`SIGHTSOUND TECHNOLOGIES, LLC
`Patent Owner
`____________
`
`Case CBM2013-00020 (Patent 5,191,573)
`Case CBM2013-00023 (Patent 5,966,440)1
`
`
`Before MICHAEL P. TIERNEY, JUSTIN T. ARBES, and
`GEORGIANNA W. BRADEN, Administrative Patent Judges.
`
`ARBES, Administrative Patent Judge.
`
`
`
`DECISION
`SightSound’s Motion for Additional Discovery
`37 C.F.R. § 42.51(b)(2)
`
`
`1 This Decision addresses an issue pertaining to both cases. Therefore, we
`exercise our discretion to issue one Decision to be filed in each case. The
`parties are not authorized to use this style heading for any subsequent
`papers.
`
`
`
`
`
`Case CBM2013-00020 (Patent 5,191,573)
`Case CBM2013-00023 (Patent 5,966,440)
`
`
`
`
`Introduction
`
`Patent Owner SightSound Technologies, LLC (“SightSound”) filed a
`
`motion for additional discovery in the instant proceedings and Petitioner
`
`Apple Inc. (“Apple”) filed an opposition.2 For the reasons stated below,
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`SightSound’s motion is denied.
`
`SightSound seeks additional discovery pertaining to its potential
`
`assertion of commercial success and copying as secondary considerations of
`
`nonobviousness. Mot. 1-3. In particular, SightSound requests the following
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`discovery:
`
`1. The expert report and accompanying exhibits of J.
`Douglas Tygar concerning infringement, dated April 22, 2013
`[in the related litigation between the parties, SightSound Techs.
`LLC v. Apple Inc., W.D. Pa. Case No. 2:11-cv-01292-DWA].
`
`2. Non-public specifications, schematics, or other
`documentation sufficient to show how Apple accessed digital
`audio or video signals from memory and transferred them over
`telecommunications lines for sale to consumers via the [iTunes
`Music Store (iTMS)] at the time of the launch of the iTMS.
`
`3. Non-public specifications, schematics, or other
`documentation sufficient to show how customers purchased
`digital audio or video signals and stored such signals in
`memory via the iTMS at the time of the launch of the iTMS.
`
`4. Surveys conducted by or for Apple from 2003 to 2007
`reflecting consumers’ desire to purchase digital audio or video
`signals via telecommunications lines, including through the
`iTMS.
`
`
`2 CBM2013-00020, Papers 29 (“Mot.”), 38 (“Opp.”); CBM2013-00023,
`Papers 26, 33. While the analysis herein applies to both proceedings, we
`refer to the papers filed in Case CBM2013-00020 for convenience.
`
`
`
`2
`
`
`
`Case CBM2013-00020 (Patent 5,191,573)
`Case CBM2013-00023 (Patent 5,966,440)
`
`Id. at 4. SightSound seeks item 1 and 4 above, or, in the alternative, items
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`
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`2, 3, and 4. Id.
`
`
`
`Analysis
`
`Discovery in a covered business method review is less than what is
`
`normally available in district court patent litigation, as Congress intended
`
`covered business method review to be a quick and cost effective alternative
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`to litigation. See H. Rep. No. 112-98 at 45-48 (2011). The legislative
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`history of the America Invents Act (AIA) makes clear that additional
`
`discovery should be confined to “particular limited situations, such as minor
`
`discovery that PTO finds to be routinely useful, or to discovery that is
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`justified by the special circumstances of the case.” 154 Cong. Rec.
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`S9988-89 (daily ed. Sept. 27, 2008) (statement of Sen. Kyl). In light of this,
`
`and given the statutory deadlines required by Congress for covered business
`
`method review, the Board will be conservative in authorizing additional
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`discovery. See id.
`
`In a covered business method review, a party seeking discovery
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`beyond what is permitted expressly by rule must show “good cause as to
`
`why the discovery is needed” and demonstrate that the evidence sought is
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`“directly related to factual assertions advanced by either party in the
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`proceeding.” 37 C.F.R. §§ 42.51(b)(2)(i), 42.224. SightSound, as the
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`movant, bears the burden of demonstrating that it is entitled to the additional
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`discovery sought. 37 C.F.R. § 42.20(c). Thus, to meet its burden,
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`SightSound must explain with specificity the discovery requested and why
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`each item is necessary for good cause.
`
`
`
`3
`
`
`
`Case CBM2013-00020 (Patent 5,191,573)
`Case CBM2013-00023 (Patent 5,966,440)
`
`
`
`
`The Board considers various factors in determining whether additional
`
`discovery in a covered business method review is necessary for good cause,
`
`including the following:
`
`More Than A Possibility And Mere Allegation—The
`mere possibility of finding something useful, and mere
`allegation that something useful will be found, are insufficient
`to establish a good cause showing. “Useful” means favorable
`in substantive value to a contention of the party moving for
`discovery. A good cause showing requires the moving party to
`provide a specific factual reason for expecting reasonably that
`the discovery will be “useful.”
`
`. . .
`
`Easily Understandable Instructions—Instructions and
`questions should be easily understandable. For example, ten
`pages of complex instructions for answering questions is prima
`facie unclear. Such instructions are counter-productive and
`tend to undermine the responder’s ability to answer efficiently,
`accurately, and confidently.
`
`Requests Not Overly Burdensome To Answer—Requests
`must not be overly burdensome to answer, given the expedited
`nature of a covered-business method patent review. The burden
`includes financial burden, burden on human resources, and
`burden on meeting the time schedule of the trial. Requests
`should be sensible and responsibly tailored according to a
`genuine need.
`
`CBM2013-00005, Paper 32, dated May 29, 2013, at 5 (numbering omitted);
`
`see also IPR2012-00001, Paper 26, dated March 5, 2013, at 6-7.
`
`
`
`Technical Documentation (Items 1, 2, and 3)
`
`SightSound requests the expert report of Dr. Tygar, and
`
`accompanying exhibits, from the related district court litigation between the
`
`parties. Mot. 4. According to SightSound, Dr. Tygar’s report explains how
`
`
`
`4
`
`
`
`Case CBM2013-00020 (Patent 5,191,573)
`Case CBM2013-00023 (Patent 5,966,440)
`
`the iTMS allegedly infringes the challenged claims and describes, in
`
`
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`particular, how the iTMS allegedly accesses and transfers digital content to
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`consumers and completes electronic sales, as recited in the challenged
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`claims.3 Id. at 1-2, 7-8. Alternatively, if the Board does not find good cause
`
`for producing Dr. Tygar’s report and exhibits, SightSound requests
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`information “sufficient to show” how the iTMS performs the transfer and
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`electronic sale functions. Id. at 4. According to SightSound, the technical
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`documentation it seeks from Apple would be “useful in establishing that the
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`commercial success of the iTMS is a relevant secondary consideration and
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`showing copying.” Id. at 7-8.
`
`Apple responds that SightSound’s requests would “lead to a trial
`
`within a trial on infringement, which would be burdensome and impractical
`
`given the one-year deadline for this trial, and would sweep in a huge volume
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`of additional documents and related discovery.” Opp. at 7-8. For example,
`
`according to Apple, Dr. Tygar’s report and accompanying exhibits are a
`
`large volume of material that would require “negotiation and implementation
`
`of complex protections” for Apple’s confidential information (e.g., source
`
`code). Id. Production of the materials also would compel Apple to present
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`voluminous evidence in response to rebut SightSound’s infringement
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`arguments. Id. Finally, Apple contends that SightSound’s requests for
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`materials “sufficient to show” certain things are unclear and would be overly
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`burdensome to answer. Id.
`
`
`3 SightSound’s counsel in this proceeding states that it has not reviewed the
`report due to limitations imposed by a protective order in the litigation.
`Mot. 7 (citing Ex. 2108).
`
`
`
`5
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`
`
`Case CBM2013-00020 (Patent 5,191,573)
`Case CBM2013-00023 (Patent 5,966,440)
`
`
`
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`On this record, we conclude that SightSound has not met its burden to
`
`demonstrate that discovery of the requested technical documentation is
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`necessary for good cause. According to Apple, Dr. Tygar’s report and
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`exhibits, as well as the other technical information SightSound seeks, relate
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`to highly confidential technical information of Apple, including its source
`
`code for the iTMS. Opp. 4, 7. A protective order was entered in the district
`
`court litigation to ensure the confidentiality of such materials. See Ex. 2108.
`
`While SightSound argues that Apple can produce the materials in these
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`proceedings—despite the protective order—because they represent Apple’s
`
`own confidential information, Mot. 7, SightSound does not provide a
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`sufficient basis for requiring Apple to do so. We agree with Apple that
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`producing the requested information would require negotiating and
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`implementing complex confidentiality protections in the instant proceedings
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`and would be unduly burdensome and prejudicial under the circumstances.
`
`In addition to the prejudice to Apple, SightSound’s requested
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`discovery would broaden the scope of the instant proceedings significantly
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`and delay the trial schedule. The discovery would result in a trial within a
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`trial on the issue of infringement, with associated evidence, arguments, and
`
`(potentially) declarants from SightSound, and then the same from Apple in
`
`response. This is contrary to the goal of covered business method review to
`
`be an efficient, streamlined alternative to litigation, completed within one
`
`year of institution. See 35 U.S.C. § 326(a)(11). SightSound does not
`
`explain sufficiently why its requested discovery, with all of its resulting
`
`burdens, can or should be done with the instant proceedings still completed
`
`within that time frame.
`
`
`
`6
`
`
`
`Case CBM2013-00020 (Patent 5,191,573)
`Case CBM2013-00023 (Patent 5,966,440)
`
`
`
`
`We also agree with Apple that SightSound’s requests for materials
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`“sufficient to show” certain things are unclear and would be overly
`
`burdensome to answer. To illustrate, SightSound requests “[n]on-public
`
`specifications, schematics, or other documentation sufficient to show how
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`customers purchased digital audio or video signals and stored such signals in
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`memory via the iTMS at the time of the launch of the iTMS.” Mot. 4.
`
`SightSound does not provide a sufficient explanation for what would be
`
`considered “sufficient” under the circumstances or confine its requests to a
`
`particular document or type of document that would be “sufficient.”
`
`Permitting discovery based on SightSound’s ambiguous requests
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`undoubtedly would invite disagreement between the parties and arguments
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`about the scope of what is “sufficient to show” each proposition. Moreover,
`
`given the likely complexity of the iTMS, it is easy to see how SightSound’s
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`requests for technical information about how the iTMS works potentially
`
`could require the production of a large volume of documents.
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`
`
`Survey Evidence (Item 4)
`
`SightSound also requests “[s]urveys conducted by or for Apple from
`
`2003 to 2007 reflecting consumers’ desire to purchase digital audio or video
`
`signals via telecommunications lines, including through the iTMS.” Mot. 4.
`
`SightSound argues that “evidence of consumer preferences for digital signals
`
`will rebut any argument by Apple that non-patented features of the iTMS are
`
`responsible for its commercial success.” Id. at 2-3, 9. Apple responds that
`
`SightSound’s request is based on mere speculation that something useful
`
`will be found and is unclear and overly burdensome to answer. Opp. 8-10.
`
`
`
`7
`
`
`
`Case CBM2013-00020 (Patent 5,191,573)
`Case CBM2013-00023 (Patent 5,966,440)
`
`
`
`
`We are not persuaded that discovery of the requested survey evidence
`
`is necessary for good cause. First, SightSound’s asserted reason for
`
`requesting the surveys is to “rebut” an argument that Apple has not yet
`
`made. At this point, it is only speculation that Apple will argue during trial
`
`(in response to a specific assertion of secondary considerations by
`
`SightSound) that the alleged commercial success of the iTMS is based on a
`
`non-patented feature and, therefore, only speculation that what SightSound
`
`is asking for will prove useful. A request for additional discovery cannot be
`
`based on mere speculation. Second, even if SightSound could do more than
`
`speculate, it has not shown a sufficient relationship between the evidence
`
`sought and the argument sought to be refuted. Specifically, it is unclear how
`
`a survey directed to one alleged feature of the iTMS (“purchas[ing] digital
`
`audio or video signals via telecommunications lines,” Mot. 4), would rebut
`
`an argument that consumers preferred the iTMS because of some other
`
`feature that the survey says nothing about. Third, while SightSound
`
`indicates that its request would “implicate no more than a dozen or so
`
`documents,” Apple’s opposition—supported by a declaration from an Apple
`
`representative—indicates that the scope of the request is much broader and
`
`could require locating and producing “tens of thousands of pages of
`
`materials.” See Mot. 10; Opp. 9-10; Ex. 41554 ¶¶ 5-10. We are persuaded
`
`that the survey requests would be unduly burdensome to answer under the
`
`circumstances.
`
`
`4 The parties are reminded that exhibits must be uniquely numbered
`sequentially in the appropriate range (1001-1999 for a petitioner and
`2001-2999 for a patent owner). See 37 C.F.R. § 42.63(c).
`
`
`
`8
`
`
`
`Case CBM2013-00020 (Patent 5,191,573)
`Case CBM2013-00023 (Patent 5,966,440)
`
`
`
`
`Copying and Commercial Success
`
`We also note that, regardless of the other reasons addressed above,
`
`SightSound has not met its burden because it has not provided a threshold
`
`amount of evidence of (1) copying, or (2) an alleged nexus between the
`
`claimed inventions and the asserted commercial success of the iTMS. While
`
`a conclusive showing of either is not necessary at this stage, some evidence
`
`is needed to establish that there is more than a mere possibility that
`
`SightSound’s discovery requests would uncover something useful. See
`
`IPR2012-00001, Paper 26, dated March 5, 2013, at 6 (“The party requesting
`
`discovery should already be in possession of evidence tending to show
`
`beyond speculation that in fact something useful will be uncovered.”).
`
`As to SightSound’s assertion of copying as a secondary consideration
`
`of nonobviousness, SightSound argues that the technical documentation it
`
`seeks will prove that Apple practices the methods of the challenged claims.
`
`Mot. 5-6. However, “[n]ot every competing product that arguably falls
`
`within the scope of a patent is evidence of copying; otherwise, ‘every
`
`infringement suit would automatically confirm the nonobviousness of the
`
`patent.’. . . [C]opying requires evidence of efforts to replicate a specific
`
`product.” Wyers v. Master Lock Co., 616 F.3d 1231, 1246 (Fed. Cir. 2010)
`
`(citation omitted). SightSound has not pointed to any evidence of copying to
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`demonstrate more than a mere possibility that what it seeks will help show
`
`copying.
`
`As to commercial success, to establish a proper nexus between a
`
`claimed invention and the commercial success of a product, a patent owner
`
`must offer “proof that the sales [of the product] were a direct result of the
`
`unique characteristics of the claimed invention—as opposed to other
`
`
`
`9
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`
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`Case CBM2013-00020 (Patent 5,191,573)
`Case CBM2013-00023 (Patent 5,966,440)
`
`economic and commercial factors unrelated to the quality of the patented
`
`
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`subject matter.” In re Huang, 100 F.3d 135, 140 (Fed. Cir. 1996). In
`
`addition, “if the commercial success is due to an unclaimed feature of the
`
`device,” or “if the feature that creates the commercial success was known in
`
`the prior art, the success is not pertinent.” Ormco Corp. v. Align Tech., Inc.,
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`463 F.3d 1299, 1312 (Fed. Cir. 2006); see also In re Kao, 639 F.3d 1057,
`
`1070 (Fed. Cir. 2011) (requiring a determination of “whether the
`
`commercial success of the embodying product resulted from the merits of
`
`the claimed invention as opposed to the prior art or other extrinsic factors”).
`
`SightSound points to the existence of Dr. Tygar’s infringement report
`
`and Apple’s consumer surveys (both of which SightSound admittedly has
`
`not reviewed) as evidence demonstrating more than a mere possibility or
`
`allegation of something useful. Mot. 7-10. The fact that these documents
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`exist, however, is not evidence of nexus (i.e., that the alleged commercial
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`success of the iTMS was the result of claimed and novel features of the
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`challenged patents). Further, SightSound appears to take the position that
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`the alleged commercial success of the iTMS is due to “consumers’
`
`preference to electronically purchase digital signals as described by the
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`patent[s] instead of purchasing content on CD’s, tapes, or phonograph
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`records,” see id. at 2-3, but does not point to any evidence indicating that to
`
`be the case. SightSound also argues that there is a “presumption of a nexus”
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`when a product is “coextensive” with a patent claim, but does not point to
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`evidence indicating that the iTMS and the claims are, in fact, coextensive.
`
`See id. at 2, 5-6 (citing Teva Pharms. USA, Inc. v. Sandoz, Inc., 723 F.3d
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`1363, 1372 (Fed. Cir. 2013)). Indeed, Apple provides some evidence to the
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`contrary. Opp. 5 (citing Exs. 4152, 4153). Absent some evidence of nexus,
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`
`
`10
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`
`
`Case CBM2013-00020 (Patent 5,191,573)
`Case CBM2013-00023 (Patent 5,966,440)
`
`SightSound cannot demonstrate that its discovery requests are likely to
`
`
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`uncover something useful.
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`In consideration of the foregoing, it is hereby:
`
`ORDERED that SightSound’s motion for additional discovery is
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`denied.
`
`
`
`11
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`
`
`Case CBM2013-00020 (Patent 5,191,573)
`Case CBM2013-00023 (Patent 5,966,440)
`
`PETITIONER:
`
`J. Steven Baughman
`Ching-Lee Fukuda
`ROPES & GRAY LLP
`steven.baughman@ropesgray.com
`ching-lee.fukuda@ropesgray.com
`
`
`PATENT OWNER:
`
`David R. Marsh
`Kristan L. Lansbery
`ARNOLD & PORTER LLP
`david.marsh@aporter.com
`kristan.lansbery@aporter.com
`
`
`
`
`
`12
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`
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