CBM2014-00106
`Patent 8,033,458 B2
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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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`APPLE INC.,
`Petitioner
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`v.
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`SMARTFLASH LLC,
`Patent Owner
`______________________
`
`Case CBM2014-001061
`Patent 8,033,458 B2
`______________________
`
`Before the Honorable JENNIFER S. BISK, RAMA G. ELLURU, JEREMY M.
`PLENZLER, and MATTHEW R. CLEMENTS, Administrative Patent Judges.
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`PETITIONER APPLE INC.’S
`MOTION TO EXCLUDE UNDER 37 C.F.R. §§ 42.62 AND 42.64
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`1 Case CBM2014-00107 has been consolidated with the instant proceeding.
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`Patent 8,033,458 B2
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`______________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`______________________
`
`APPLE INC.,
`Petitioner
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner
`______________________
`
`Case CBM2014-001061
`Patent 8,033,458 B2
`______________________
`
`Before the Honorable JENNIFER S. BISK, RAMA G. ELLURU, JEREMY M.
`PLENZLER, and MATTHEW R. CLEMENTS, Administrative Patent Judges.
`
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`PETITIONER APPLE INC.’S
`MOTION TO EXCLUDE UNDER 37 C.F.R. §§ 42.62 AND 42.64
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`
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`1 Case CBM2014-00107 has been consolidated with the instant proceeding.
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`CBM2014-00106
`Patent 8,033,458 B2
`Petitioner, Apple Inc. (“Petitioner”), respectfully submits this Motion to Ex-
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`clude pursuant to 37 C.F.R. §§ 42.62 and 42.64, and the Revised Scheduling Order
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`(Paper 15 at 6). As an initial matter, Petitioner respectfully submits that the Board,
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`sitting as a non-jury tribunal with administrative expertise, is well-positioned to de-
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`termine and assign the appropriate weight to be accorded to the evidence presented
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`by both Petitioner and Patent Owner Smartflash LLC (“Patent Owner”) in this pa-
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`tentability trial without the need for formal exclusion. See, e.g., S.E.C. v. Guenth-
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`ner, 395 F. Supp. 2d 835, 842 n.3 (D. Neb. 2005) (admitting expert testimony over
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`objections; “Trial courts should be more reluctant to exclude evidence in a bench
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`trial than a jury trial. . . . [E]vidence should be admitted and then sifted [and] the
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`trial court is presumed to consider only the competent evidence and to disregard all
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`evidence that is incompetent”; “‘the better course’ is to ‘hear the testimony, and
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`continue to sustain objections when appropriate’”; “[T]he court has admitted the
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`testimony . . . and has accorded it appropriate weight.” (citations omitted)); Build-
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`ers Steel Co. v. Comm’r of Internal Revenue, 179 F.2d 377, 379 (8th Cir. 1950)
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`(vacating Tax Court decision for exclusion of competent and material evidence;
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`“In the trial of a nonjury case, it is virtually impossible for a trial judge to commit
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`reversible error by receiving incompetent evidence . . . . On the other hand, a trial
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`judge who, in the trial of a nonjury case, attempts to make strict rulings on the ad-
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`missibility of evidence, can easily get his decision reversed by excluding evidence
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`CBM2014-00106
`Patent 8,033,458 B2
`which is objected to, but which, on review, the appellate court believes should
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`have been admitted.”). Petitioner accordingly submits that it is, as a general mat-
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`ter, better for the Board to have before it a complete record of the evidence submit-
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`ted by the parties than to exclude particular pieces of it and thereby risk improper
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`exclusion that could later be assigned as error. See, e.g., Builders Steel, 179 F.2d
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`at 379; Donnelly Garment Co. v. Nat’l Labor Relations Bd. (“NLRB”), 123 F.2d
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`215, 224 (8th Cir. 1942) (finding NLRB’s refusal to receive testimonial evidence
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`amounted to a denial of due process; “One who is capable of ruling accurately up-
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`on the admissibility of evidence is equally capable of sifting it accurately after it
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`has been received, and, since he will base his findings upon the evidence which he
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`regards as competent, material and convincing, he cannot be injured by the pres-
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`ence in the record of testimony which he does not consider competent or material. .
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`. . [I]f evidence was excluded which [the reviewing] court regards as having been
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`admissible, a new trial or rehearing cannot be avoided.”). See also, e.g., Samuel H.
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`Moss, Inc. v. F.T.C., 148 F.2d 378, 380 (2d Cir. 1945), cert. denied, 326 U.S. 734
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`(1945) (observing that, “if the case was to be tried with strictness, the examiner
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`was right . . . [but w]hy [the examiner] or the Commission’s attorney should have
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`thought it desirable to be so formal about the admission of evidence, we cannot
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`understand. Even in criminal trials to a jury it is better, nine times out of ten, to
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`admit, than to exclude, evidence . . . [W]e take this occasion to point out the danger
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`CBM2014-00106
`Patent 8,033,458 B2
`always involved in conducting such a proceeding in such a spirit, and the absence
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`of any advantage in depriving either the Commission or ourselves of all evi-
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`dence”).
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`However, to the extent that the Board intends to apply the Federal Rules of
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`Evidence strictly in these proceedings, cf. 77 Fed. Reg. 48,612, 48,616 (Aug. 14,
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`2012) (“42.5(a) and (b) permit administrative patent judges wide latitude in admin-
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`istering the proceedings to balance the ideal of precise rules against the need for
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`flexibility to achieve reasonably fast, inexpensive and fair proceedings”), Petitioner
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`respectfully submits that Patent Owner’s testimonial submissions from its purport-
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`ed expert witness, Dr. Jonathan Katz, do not meet these standards and should be
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`excluded.2 For the same reasons, any reference to or reliance on Dr. Katz’s testi-
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`monial submissions in Patent Owner’s Response (Paper 23) should be excluded as
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`well. Petitioner’s objections to Dr. Katz’s opinions were previously set forth in Pe-
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`2 Petitioner also maintains its objections to pp. 364-384 of Exhibit 2025 (“Wech-
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`selberger Deposition Transcript, December 10, 2014 – December 11, 2014”) for
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`the reasons set forth in Petitioner’s Motion to Strike Portions of the Deposition
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`Transcript of Anthony Wechselberger Concerning Petitioner’s Products and For
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`Costs (Paper 20) and Petitioner’s Reply in Support of its Motion to Strike Portions
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`of the Deposition Transcript of Anthony Wechselberger Concerning Petitioner’s
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`Products and For Costs (Paper 25).
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`3
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`CBM2014-00106
`Patent 8,033,458 B2
`titioner’s Objections to Patent Owner Smartflash, LLC’s Exhibits (Ex. 1033),
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`served March 6, 2015 pursuant to 37 C.F.R. § 42.64(b)(1), and in Petitioner’s Re-
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`ply to Patent Owner’s Response (Paper 33 at 19-24), and are further explained be-
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`low pursuant to 37 C.F.R. § 42.64(c).
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`I.
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`Legal Standard
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`Under Rule 702 of Federal Rules of Evidence, which apply to this proceed-
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`ing (37 C.F.R. § 42.62), “[a] witness who is qualified as an expert by knowledge,
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`skill, experience, training, or education may testify in the form of an opinion or
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`otherwise if: (a) the expert’s scientific, technical, or other specialized knowledge
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`will help the trier of fact to understand the evidence or to determine a fact in issue;
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`(b) the testimony is based on sufficient facts or data; (c) the testimony is the prod-
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`uct of reliable principles and methods; and (d) the expert has reliably applied the
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`principles and methods to the facts of the case.” F.R.E. 702. The proponent of ex-
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`pert testimony must demonstrate admissibility by a preponderance of the evidence.
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`See Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 592 n.10 (1993).
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`II. Dr. Katz Is Not Qualified To Opine Under F.R.E. 702
`Because Dr. Katz is unable to opine on what a person of ordinary skill in the
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`art (“POSITA”) would have understood at the relevant time period, his testimo-
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`ny—submitted to address this very subject, but clearly resting on no specialized
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`CBM2014-00106
`Patent 8,033,458 B2
`knowledge of this “expert”—would not help the trier of fact under F.R.E. 702 and
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`should be excluded.
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`Dr. Katz alleges in his declaration that he is “qualified to opine on what
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`those of ordinary skill in the art would have understood at the time of the filing of
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`the patent and what he/she would or would not have been motivated to do” (Ex.
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`2029 ¶ 10) and provided conclusory, unsupported testimony that he was a POSITA
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`at the priority date of the patents when questioned by Patent Owner’s counsel (Ex.
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`1031 at 184:3-6). But neither Dr. Katz’s chemistry and mathematics degrees (Ex.
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`2029 at App’x A) nor his just over one year of classes relating to computer science
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`and a few months’ experience as a security consultant (Ex. 1031 at 183:20-185:17)
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`as of the Patent Owner’s claimed priority date of October 25, 1999 qualifies him as
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`a POSITA under either party’s definition. See Ex. 2029 ¶ 9 (Dr. Katz’s definition
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`of a POSITA); Extreme Networks, Inc. v. Enterasys Networks, Inc., 395 F. App’x
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`709, 715 (Fed. Cir. 2010) (opinion from expert who was not a POSITA was
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`properly excluded); see also Paper 33 at 19-20.
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`Dr. Katz’s inability to opine on what a POSITA would have understood at
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`the priority date was apparent at his deposition, where he was repeatedly unable to
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`answer whether a POSITA would have known or understood various basic princi-
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`ples and technologies pertinent to the ’458 patent in the relevant time period. For
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`example, Dr. Katz testified he was “not sure” whether in the prior art time period a
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`CBM2014-00106
`Patent 8,033,458 B2
`POSITA would have “known how to carry out an electronic payment to sell digital
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`content” or “known how to implement an electronic sale of digital content” (Ex.
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`1031 at 21:12-16, 23:2-15), even though these concepts are plainly fundamental to
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`the ’458 patent. See, e.g., Ex. 1001 at Abstract (“Data storage and access systems
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`enable downloading and paying for data such as audio and video data, text, soft-
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`ware, games and other types of data.”).3 He also testified that he was not sure
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`whether, for example:
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` payment happens before or after receipt of content in embodiments de-
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`scribed in the ’458 patent (Ex. 1031 at 107:18-21, 109:8-22, 110:7-111:4)4;
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`the ’458 patent discloses alternative embodiments in which payment can be
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`made before or after content is received (id. at 86:4-12);
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` a POSITA would have a reason for validating payment after payment was
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`made (id. at 26:16-20);
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`in the prior art time period, digital content was bought and sold over the In-
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`ternet, or whether a POSITA would have understood that digital content
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`could be bought and sold over a network or the Internet (id. at 13:16-14:3,
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`16:2-5); and
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`3 All emphasis herein is added unless otherwise indicated.
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`4 The ’221 patent and the ’458 patent have the same specification.
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`CBM2014-00106
`Patent 8,033,458 B2
` a POSITA would have known how to implement systems where payment is
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`made before or after content is received, or what a “prepayment” was (id. at
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`33:11-15, 33:16-19, 86:16-21, 89:7-11, 89:18-21).
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`See also, e.g., id. at 21:8-11 (whether POSITA knew what activating a credit ac-
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`count was); 38:2-5 (whether “try and buy” software was known in prior art); 44:9-
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`14 (whether POSITA would have understood SIM cards could be used for billing).
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`In addition, despite acknowledging in his declaration that “the scope and
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`content of the prior art” is a relevant consideration for obviousness (Ex. 2029 ¶ 7),
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`Dr. Katz was “not sure” how a POSITA would have interpreted various passages
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`of the cited prior art, including passages explicitly addressed in his declaration.
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`For example, with respect to prior art Ginter, Dr. Katz states in his declaration that
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`“to change from post-usage tracking to pre-purchase processing would change the
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`principle upon which Ginter works, which I understand indicates nonobviousness.”
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`Ex. 2029 ¶ 27. However, at his deposition, Dr. Katz was not sure if Ginter’s dis-
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`closures fit his characterization of “pre-purchase processing” even after consulting
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`all of his declarations. See Ex. 1031 at 124:10-128:11. When questioned by his
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`own counsel, Dr. Katz testified that he did not even know what was meant by the
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`term “pre-purchase processing”—the very term that he himself uses in his declara-
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`tion. See id. at 190:14-20.
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`CBM2014-00106
`Patent 8,033,458 B2
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`Dr. Katz was similarly unable to answer questions related to his criticisms of
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`Ginter’s disclosure of “payment data” and the order of payment and content access
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`in Ginter. For example, Dr. Katz states in his declaration that “the audit infor-
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`mation [in Ginter] is for tracking post-usage information, not current purchase in-
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`formation.” Ex. 2029 ¶ 27. When questioned regarding the order of payment and
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`content access in Ginter, however, Dr. Katz was not sure whether anything in prior
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`art Ginter would preclude payment occurring before access to a VDE object is
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`granted, Ex. 1031 at 94:4-13, or whether a POSITA would have understood that
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`the “prepayments,” “credits,” “debits,” and “currency token deposit accounts” re-
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`ferred to in Ginter could be used to pay for a VDE object, id. at 119:5-21, 120:13-
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`18, 120:19-121:6, 121:22-122:9; cf. Ex. 1015 at 63:34-40.
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`Dr. Katz was also unable to defend his opinions regarding the “subscriber
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`identity module (SIM) portion” claimed in the ’458 patent. In his declaration, Dr.
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`Katz interprets this limitation as requiring a SIM card, stating that “[n]either [Stef-
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`ik] patent identifies anything that indicates that a DocuCard or a repository could
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`be a mobile or cellular phone in which such a memory card would be used,” Ex.
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`2029 ¶ 16, and that “the structure and function of the alleged memory card has not
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`been disclosed by the 00106 Petition as meeting the requirements of a repository
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`according to Stefik ‘235 and Stefik ‘980,” id. ¶ 18. Dr. Katz confirmed in his dep-
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`osition, however, that he had not considered differences between the SIM portion
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`CBM2014-00106
`Patent 8,033,458 B2
`recited in the challenged claims and the SIM card device recited in other claims.
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`Ex. 1031 at 147:1-18, 150:7-151:9.
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`Dr. Katz was similarly unable to defend his criticism of the prior art disclo-
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`sures related to the claimed “SIM portion.” Dr. Katz acknowledges in his declara-
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`tion that Stefik discloses a “unique number assigned to the DocuCard upon manu-
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`facture” and that Ginter discloses a portable device with RAM containing “infor-
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`mation which can be used to uniquely identify each instance of the portable de-
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`vice,” but that there was no reason to change from those unique identifiers to some
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`other identifying information. Ex. 2029 ¶¶ 17, 25. At his deposition, however, Dr.
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`Katz was not sure whether those prior art disclosures on their own met the recited
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`“SIM portion” without requiring a change to a SIM card device. For example, Dr.
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`Katz was not sure and did not have an opinion on whether a memory address, a
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`block of memory, or a single block of memory storing only a single user identifica-
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`tion number, like those disclosed in Stefik and Ginter, could be a “SIM portion”
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`even after consulting his declarations, two Petitions, two Institution Decisions, and
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`four declarations from Petitioner’s expert, all of which were provided to him at his
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`request while the original question was pending. Ex. 1031 at 152:7-156:12,
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`158:22-159:7, 159:20-161:22.
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`Dr. Katz similarly was not able to defend his opinions regarding a POSITA’s
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`motivation to change the identifiers disclosed in the prior art to be compatible with
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`CBM2014-00106
`Patent 8,033,458 B2
`SIM cards, if such change were required. In his declaration, Dr. Katz states that
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`the Petition and Petitioner’s expert’s declaration do not show whether the unique
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`DocuCard identifier in Stefik or the portable appliance identifier in Ginter “has
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`characteristics that would make it compatible with the SIM portion of a mobile
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`phone” or whether “the number of bits required by the ‘unique number assigned to
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`the DocuCard upon manufacture’ is greater than the number of bits that a SIM por-
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`tion would utilize to identify a subscriber to a network operator.” Ex. 2029 ¶¶ 17,
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`25. At his deposition, however, Dr. Katz was unable to identify any reason a
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`POSITA would not be able to conform these identifiers—including the Stefik iden-
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`tifier explicitly addressed in his declaration—to meet the public specification of a
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`SIM card. Ex. 1031 at 163:21-164:1, 164:18-165:8.
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`As demonstrated by the foregoing examples, Dr. Katz lacks the necessary
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`“scientific, technical, or other specialized knowledge [to] help the trier of fact to
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`understand the evidence or to determine a fact in issue” both because (1) he is not
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`sufficiently knowledgeable about what a POSITA would have known or under-
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`stood in the relevant time period, and (2) in his deposition he was unable to defend
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`his conclusory declaration testimony. His testimony is fundamentally flawed and
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`unsupported, and his opinions should be excluded. F.R.E. 702.
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`CBM2014-00106
`Patent 8,033,458 B2
`Dated: May 19, 2015
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`Respectfully submitted,
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`By: /J. Steven Baughman/
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`J. Steven Baughman (lead counsel)
`Reg. No. 47,414
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`Megan F. Raymond
`Reg. No. 72,997
`Ropes & Gray LLP
`One Metro Center
`700 12th St. – Ste. 900
`Washington, D.C. 20005-3948
`P: 202-508-4606/ F: 202-383-8371
`Steven.Baughman@ropesgray.com
`Megan.Raymond@ropesgray.com
`
`Mailing address for all correspondence: ROPES & GRAY LLP, IPRM –
`Floor 43, Prudential Tower, 800 Boylston Street, Boston, MA 02199-3600
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`
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`Ching-Lee Fukuda (backup counsel)
`Reg. No. 44,334
`Ropes & Gray LLP
`1211 Avenue of the Americas
`New York, NY 10036
`P: 212-596-9336/ F:212-596-9000
`Ching-Lee.Fukuda@ropesgray.com
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`CBM2014-00106
`Patent 8,033,458 B2
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that a copy of the foregoing PETITIONER
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`APPLE INC.’S MOTION TO EXCLUDE UNDER 37 C.F.R. §§ 42.62 AND 42.64
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`was served on May 19, 2015, to the following Counsel for Patent Owner via e-
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`mail, pursuant to the parties’ agreement concerning service:
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`Michael R. Casey
`J. Scott Davidson
`DAVIDSON BERQUIST JACKSON & GOWDEY LLP
`8300 Greensboro Drive, Suite 500
`McLean, VA 22102
`Telephone: (571) 765-7700
`Facsimile: (571) 765-7200
`mcasey@dbjg.com
`jsd@dbjg.com
`docket@dbjg.com
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`Attorneys for Patent Owner Smartflash LLC
`
`/Megan Raymond/
`Megan F. Raymond
`
`ROPES & GRAY LLP
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