`Patent 6,105,013
`Attorney Docket No. 131209-003USCBM
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
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`PNC BANK, N.A., JP MORGAN CHASE & CO.
`AND JP MORGAN CHASE BANK, N.A.
`Petitioner
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`v.
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`MAXIM INTEGRATED PRODUCTS, INC.
`Patent Owner
`____________
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`Case CBM2014-00040
`Patent 6,105,013
`____________
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`PATENT OWNER MAXIM INTEGRATED PRODUCTS, INC.’S
`RESPONSE TO PETITIONER’S MOTION REQUESTING ADVERSE
`JUDGMENT AGAINST PNC PURSUANT TO 37 C.F.R. § 42.73(b)(4)
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`TABLE OF CONTENTS
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`TABLE OF CONTENTS
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`BACKGROUND OF PNC’S AND JP MORGAN ’S JOINT
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`BACKGROUND OF PNC’S AND JP MORGAN’S JOINT
`PETITION .................................................................................................... 1
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`PETITION .................................................................................................. .. 1
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`I.
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`I.
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`II.
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`II.
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`“ADVERSE JUDGMENT” CANNOT CONVENIENTLY ERASE
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`THE EFFECTS OF PNC AND JP MORGAN ’S JOINT
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`“ADVERSE JUDGMENT” CANNOT CONVENIENTLY ERASE
`THE EFFECTS OF PNC AND JP MORGAN’S JOINT
`PARTICIPATION. ....................................................................................... 2
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`PARTICIPATION ...................................................................................... .. 2
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`III. CONCLUSION .............................................................................................. 5
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`III. CONCLUSION ............................................................................................ .. 5
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`i
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`TABLE OF AUTHORITIES
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`ADMINISTRATIVE DECISIONS
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`Page(s)
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`BB&T v. Maxim Integrated Products, Inc.,
`CBM2013-00059, paper 12 (Mar. 20, 2014) ........................................................ 2
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`Fandango et al. v. Ameranth Inc.,
`CBM2014-00013, paper 22 (March 24, 2014) ................................................. 4, 5
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`STATUTES AND RULES
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`35 U.S.C. § 325 .................................................................................................passim
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`
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`REGULATIONS
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`Changes to Implement Inter Partes Review Proceedings, Post-Grant Review
`Proceedings, and Transitional Program for Covered Business Method Patents;
`Final Rule, 77 Fed. Reg. 48,680 (Aug. 14, 2012) (codified at C.F.R. tit. 37, ch.
`1) ................................................................................................................................ 4
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`37 C.F.R. § 42.73 ................................................................................................... 3, 4
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`Conference Call Transcript, CBM2014-00038, -00039,
`-00040 & -00041 (P.T.A.B. Mar. 27, 2014)
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`ii
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`EXHIBIT LIST
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`Exhibit 2013
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`Patent Owner Maxim’s Preliminary Statement explained at length why the
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`identities of the Petitioner and real parties-in-interest in this CBM review case bar
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`its initiation under 35 U.S.C. § 325(a)(1). Two weeks ago, the Board affirmed in a
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`related case that this statutory bar can apply to CBM patent reviews. Now, PNC
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`and the JP Morgan entities (“Petitioner”) request “adverse judgment” against PNC
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`on special terms, in a blatant attempt to launder the original, barred Petition so that
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`JP Morgan can carry on as if PNC had never participated. Petitioner’s hope is that
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`it can magically un-declare PNC as a party and real party-in-interest and continue
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`to harass Maxim with baseless, repetitive, and expensive CBM review arguments.
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`Such an outcome is contrary to law and prejudicial to Maxim. The Board should
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`not allow PNC to take judgment on the terms PNC and JP Morgan say they prefer.
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`Maxim would not object to a truly adverse judgment, one that preserves
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`Petitioner’s admission that PNC is a real party-in-interest, and the consequences
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`that flow from PNC’s past participation and ongoing interest in this case.
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`I.
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`BACKGROUND OF PNC’S AND JP MORGAN’S JOINT PETITION.
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`PNC and JP Morgan are joined at the hip. They both participate in a joint
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`defense group in litigation with Maxim over infringement of the Patent, and have
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`both challenged the Patent in court.1 Together they also decided to challenge the
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`1 PNC’s invalidity claim was a declaratory complaint, JP Morgan’s a counterclaim.
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`1
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`Patent before this Board. They jointly prepared and filed a Petition for CBM
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`patent review with common counsel. Petition at i, 1, 74. They did so even though
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`they believed the statute “was not clear if DJ plaintiffs [like PNC] were able to file
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`CBM.” Ex. 2013 (3/27/14 Call) at 2013-005:10-14.
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`In its Preliminary Response, Maxim explained that PNC’s prior suit
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`challenging the Patent bars initiation of review under 35 U.S.C. § 325(a)(1)—and
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`what is more, Petitioner cannot evade that bar now by reducing PNC’s role. POPR
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`at 1-2, 29-34. The Board later affirmed in a related case that § 325(a)(1) applies in
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`CBM review. BB&T v. Maxim, CBM2013-00059, Paper 12 (Mar. 20, 2014).
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`Having waited to see what the Board would do in BB&T, and disliking what
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`the Board did, PNC and JP Morgan now seek to evade § 325(a)(1) by
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`reconstituting Petitioner to include only JP Morgan.2 Their request is
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`unprecedented: Maxim believes the Board has never granted “adverse judgment”
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`against less than all of a Petitioner, let alone over any party’s objection.
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`II.
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`“ADVERSE JUDGMENT” CANNOT CONVENIENTLY ERASE THE
`EFFECTS OF PNC AND JP MORGAN’S JOINT PARTICIPATION.
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`Petitioner (now calling itself “Petitioners” for the first time) seeks to
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`reconstitute itself and un-declare PNC as a real party-in-interest in an effort to
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`2
` Petitioner at first told Maxim it wished to drop PNC due to “settlement.” There is
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`no settlement, however. And Petitioner’s Motion never mentions or relies on one.
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`2
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`thwart Congress’ § 325(a)(1) bar. But if Petitioner were able to remove PNC from
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`this case without consequence, then any party barred by § 325(a)(1) would be free
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`to fund and draft a petition, persuade or pay a straw man to join in filing it, and
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`then seek a so-called “adverse” judgment removing itself from the case—so that its
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`straw man, fully persuaded, could then freely prosecute the petition and arguments
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`that the barred party has crafted and controlled. That cannot be the
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`The Motion says “PNC unconditionally seeks abandonment” and “expressly
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`abandons the CBM proceedings and will no longer participate.” Mot. at 3-4.3 It
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`then says the “precise” and only relief sought is “adverse judgment against PNC
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`per 37 C.F.R. § 42.73(b)(4).” Id. at 1. If all Petitioner wants is an unconditional,
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`“adverse judgment against PNC per 37 C.F.R. § 42.73(b)(4),” with nothing more,
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`Maxim would not oppose such a judgment. But this supposedly “precise” request
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`actually obscures strings that Petitioner—and more particularly, JP Morgan—is
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`improperly hinting should be attached to that request.
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`The Motion does not say JP Morgan consents unconditionally to PNC’s
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`request for adverse judgment. Rather, it says that “JP Morgan consents to PNC’s
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`request for adverse judgment, and once granted, JP Morgan (which was not a DJ
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`3
` PNC does not need any permission to “no longer participate.” PNC has always
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`been free to cease its control and contributions in these proceedings at any time.
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`3
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`plaintiff) will maintain all the pending CBM petitions.” Id. at 3 (emphasis added).
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`It goes on to argue that “once PNC takes adverse judgment, it is no longer a real-
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`party-in-interest [sic].” Id. at 5. Thus, it seems that what PNC and JP Morgan
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`want is a so-called “adverse” judgment, independent of settlement, that professes
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`to (i) eliminate PNC’s admitted status as real party-in-interest, and (ii) allow JP
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`Morgan to “maintain all the pending CBM petitions.” Id. at 3, 5. A judgment
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`satisfying these conditions over Maxim’s objections would be illegal and improper.
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`First, it is too late to seek to revise the Petition and its Petitioner and real
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`party-in-interest identifications to cure standing. “The Office generally will accept
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`the petitioner’s ‘real party-in-interest’ identification at the time of filing the
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`petition.” IPR/PGR/CBM Rules, 77 FR 48,680, 48,695. Maxim’s opportunity to
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`address that identification with evidence in a Preliminary Response, for “the Board
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`[to] consider in determining whether to grant the petition,” id., has come and gone.
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`Second, whether PNC or JP Morgan remain real parties-in-interest, or may
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`“maintain” proceedings after judgment, is determined by operation of law. They
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`seek, not a mere “termination” by consent, but an adverse “judgment”—that must
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`necessarily “dispose[] of all issues that were, or by motion reasonably could have
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`been, raised and decided.” 37 C.F.R. § 42.73(a) (emphasis added). They may not
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`narrow or avoid its legally required effect simply by declaring in advance that they
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`wish it to be so. See Fandango v. Ameranth, CBM2014-00013, Paper 22, at 6-7.
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`4
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`Third, in any event, PNC and JP Morgan, fellow financial services providers
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`and infringement defendants, remain partners with common counsel in common
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`cause against Maxim and its Patent. Settlement terms have yet to be negotiated or
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`finalized (and the requested judgment does not depend on any). And, after all,
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`what explains PNC’s gratuitous request for “adverse judgment” against itself? JP
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`Morgan and PNC presumably have a common understanding—that JP Morgan will
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`carry on, continuing the attack on the Patent, which PNC has until now participated
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`in and supported. This “adverse judgment” will not end the commonality between
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`them. Nor will it elide its past and continuing effects. See POPR at 31-34.
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`Like the parties in Fandango v. Ameranth, PNC and JP Morgan chose to join
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`together as “partners in the filing of a single petition against Patent Owner with
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`respect to [the] Patent.” CBM2014-00013, Paper 22, at 9. “[I]f [one] made a
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`mistake when choosing to position itself as a joint-filer of a single petition, it is
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`fairer and more equitable for [it] to bear the consequences of its own mistake, than
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`for the Patent Owner to bear additional burdens and costs by, effectively, allowing
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`[the constituent] to go back in time and un-do that mistake, after benefiting from
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`the information in Patent Owner’s preliminary response.” Id. at 11.
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`III. CONCLUSION
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`Petitioner cannot manufacture standing by retreating from its admissions and
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`actions to date. PNC may obtain “adverse judgment”—but not on special terms.
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`5
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`Respectfully submitted,
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`____/Kenneth J. Weatherwax/_________
`Kenneth J. Weatherwax, Reg. No. 54,528
`Goldberg, Lowenstein & Weatherwax LLP
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`Date: April 4, 2014
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`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
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`
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`Administrative Patent Judge: Sally Medley
`Atty. Docket: 131209-003USCBM
`
`In re: Covered Business Method Review of
`U.S. Patent No. 6,105,013
`Case No. CBM2014-00040
`Filed: November 22, 2013
`For: METHOD, APPARATUS, SYSTEM
`AND FIRMWARE FOR SECURE
`TRANSACTIONS
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`
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`Certificate of Service
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`Mail Stop PATENT BOARD
`Patent Trial and Appeal Board
`United States Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`April 4, 2014
`Sir:
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`Pursuant to 37 C.F.R. § 42.6(e), the undersigned, on behalf of the Patent Owner,
`hereby certifies that a copy of the following documents is being served on the Petitioner by
`Express Mail on April 4, 2014.
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`PATENT OWNER MAXIM INTEGRATED PRODUCTS, INC.’S RESPONSE
`TO PETITIONER’S MOTION REQUESTING ADVERSE JUDGMENT
`AGAINST PNC PURSUANT TO 37 C.F.R. § 42.73(b)(4), and the
`accompanying Exhibit:
`Exhibit 2013 – Conference Call Transcript, CBM2014-00038, -00039,
`-00040 & -00041 (P.T.A.B. Mar. 27, 2014)
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`The names and addresses of the parties being served are as follows:
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`Lionel M. Lavenue
`Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
`Two Freedom Square
`11955 Freedom Drive
`Reston, VA 20190-5675
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`Timothy J. May
`Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
`901 New York Avenue, NW
`Washington, DC 20001-4413
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`Very truly yours,
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`____/ Kenneth J. Weatherwax /_________
`Kenneth J. Weatherwax, Reg. No. 54,528
`Goldberg, Lowenstein & Weatherwax LLP