`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`____________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`____________
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`APPLE, INC.
`
`Petitioner
`
`v.
`
`SMARTFLASH LLC
`
`Patent Owner
`
`____________
`
`Case CBM2014-00108
`
`Patent 8,061,598
`
`____________
`
`PATENT OWNER’S OPPOSITION TO PETITIONER’S MOTION TO STRIKE
`PORTIONS OF THE DEPOSITION TRANSCRIPT OF ANTHONY
`WECHSELBERGER CONCERNING PETITIONER’S PRODUCTS AND FOR
`COSTS
`
`
`
`
`
`
`
`TABLE OF CONTENTS
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` RESPONSES TO STATEMENTS OF MATERIAL FACTS ........................ 1
`
`
`I.
`
`II.
`
`III. THE OBJECTED TO TESTIMONY WAS WITHIN THE SCOPE OF THE
`PROCEEDING ................................................................................................ 2
`
` STATEMENT OF MATERIAL FACTS ........................................................ 2
`
`
`IV. STRIKING OF THE TESTIMONY IS INAPPROPRIATE ........................... 6
`
`V.
`
` SANCTIONS, ESPECIALLY MONETARY SANCTIONS, ARE
`INAPPROPRIATE .......................................................................................... 8
`
`
`VI. CONCLUSION .............................................................................................. 10
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`
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`- i -
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`For at least the reasons set forth below, Patent Owner opposes Petitioner’s
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`Motion to Strike Portions of the Deposition Transcript of Anthony Wechselberger
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`Concerning Petitioner’s Products and for Costs.
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`
`
`I.
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`RESPONSES TO STATEMENTS OF MATERIAL FACTS
`
`1.
`
`2.
`
`3.
`
`4.
`
`Admitted.
`
`Admitted.
`
`Admitted.
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`The first two sentences are admitted. The last sentence is denied to
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`the extent that it is not clear if Petitioner intends that sentence to mean “Petitioner
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`requested that Patent Owner be ordered not to ask questions related to the
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`operation of Petitioner’s products because [Petitioner believes] (1) such questions
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`were clearly outside the scope of the proceedings, (2) Mr. Wechselberger had not
`
`opined on the operation of Petitioner’s products in his declaration, and (3)
`
`secondary considerations had not been placed at issue in the proceeding.”
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`5. Admitted.
`
`6.
`
`7.
`
`Admitted.
`
`Admitted.
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`- 1 -
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`
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`II.
`
`STATEMENT OF MATERIAL FACTS
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`8. Mr. Wechselberger provided his opinion on the obviousness of at least
`
`one challenged claim in the present proceeding (i.e., CBM2014-00108). See
`
`Exhibit 1021, page 00027 et seq.
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`
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`III. THE OBJECTED TO TESTIMONY WAS WITHIN THE SCOPE OF THE
`
`PROCEEDING
`
`
`
`In its Motion, Petitioner argued that “The portions of the Wechselberger
`
`transcript reflecting Patent Owner’s improper questioning concerning Petitioner’s
`
`products and related secondary considerations should be stricken from the record.”
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`Motion at 6. It further clarified that “Petitioner seeks to strike ... Wechselberger
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`Dep. 358:1-378:4. See Ex. 1030” (hereinafter “the Objected to Testimony”).
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`Motion at 2. In support of such a request, Petitioner states “The Board’s rules are
`
`clear: “For cross-examination testimony, the scope of the examination is limited to
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`the scope of the direct testimony.” Id. (citing 37 C.F.R. § 42.53(d)(5)(ii)).
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`However, Petitioner misapprehends the “scope of the direct testimony” provided
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`by Mr. Wechselberger.
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`
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`Mr. Wechselberger provided his opinion on the obviousness of at least one
`
`challenged claim in each of the four CBMs (CBM2014-00102, -00106, -00108 and
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`-00112) for which he was being deposed. As set forth in Graham v. John Deere
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`- 2 -
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`Co., 383 U.S. 1 (1966), obviousness is a question of law based on underlying
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`factual findings, including: (1) the scope and content of the prior art; (2) the
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`differences between the claims and the prior art; (3) the level of ordinary skill in
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`the art; and (4) objective considerations of nonobviousness. Id. at 17–18. Those
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`four factors, however, are part of a single issue -- obviousness -- and cannot be
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`separated out into individual parts such that a deponent can testify about some
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`parts and be blocked from testifying about other parts at the discretion of the
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`Petitioner.
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`The use of objective considerations, which are sometimes referred to as
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`“secondary considerations,” is discussed in In Re Cyclobenzaprine Hydrochloride
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`Extended-Release Capsule Patent Litigation, 676 F.3d 1063, 1075 (Fed. Cir.
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`2012). In that case, the Federal Circuit held that “a fact finder ... may not defer
`
`examination of the objective considerations until after the fact finder makes an
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`obviousness finding.” Id. at 1075 (citing Stratoflex, Inc. v. Aeroquip Corp. 713
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`F.2d 1530, 1538–39 (Fed. Cir. 1983) (“It is jurisprudentially inappropriate to
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`disregard any relevant evidence on any issue in any case, patent cases included.
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`Thus, evidence rising out of the so-called ‘secondary considerations’ must always
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`when present be considered en route to a determination of obviousness.”)(citations
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`omitted)). Indeed, the Federal Circuit held that “Many subsequent cases have
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`expressly followed Stratoflex’s directive that courts consider all objective evidence
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`- 3 -
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`before reaching an obviousness conclusion” and provided a lengthy analysis
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`describing more than half a dozen cases that did so. In Re Cyclobenzaprine at
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`1076. Thus, Mr. Wechselberger’s direct testimony about obviousness of any of the
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`challenged claims rendered testimony directed to objective considerations or
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`“secondary considerations” directly relevant to and within the scope of Mr.
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`Wechselberger’s direct testimony.
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`In fact, a portion of the Objected to Testimony makes clear why Mr.
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`Wechselberger did not explicitly perform a complete obviousness analysis
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`including objective considerations and why Petitioner is so interested in having his
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`testimony struck, Mr. Wechselberger admits he is not qualified to do so. In the
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`Objected to Testimony, Mr. Wechselber testified:
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`Q. ... If the App Store did embody at least one of the claims of
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`the patents challenged in the 2014 CBM proceedings, how many apps
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`would have to be sold in your opinion using the App Store to indicate
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`commercial success of the claimed invention?
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`A. I haven't considered that question before and I don't have an
`
`opinion about that today.
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`Q. Is that an issue you could have considered when preparing
`
`your declarations in the 2014 CBM proceedings?
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`MS. ROBINSON: Objection to form.
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`- 4 -
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`A. I don't think I'm the kind of expert that's qualified to opine
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`on that kind of a question.
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`Exhibit 1030, 369:19 - 370:10 (on page 00014) (Emphasis added). Such testimony
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`is clearly within the scope of whether he is an expert.
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`
`
`Petitioner further cites Ormco Corp. v. Align Tech., Inc., 463 F.3d 1299,
`
`1311-12 (Fed. Cir. 2006) for the proposition that “Evidence of commercial
`
`success, or other secondary considerations, is only significant if there is a nexus
`
`between the claimed invention and the commercial success.”). Motion at 8.
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`However, a number of Patent Owner’s questions were related to the nexus, so the
`
`Objected to Testimony was relevant for that reason as well. See Exhibit 1030,
`
`371:20 - 374:19, relating to the number of downloads and revenues. Additionally,
`
`Patent Owner’s period for discovery is not yet over, so Patent Owner also can
`
`prove nexus through other witnesses. In general, Petitioner confuses the standard
`
`for seeking or obtaining relevant information with the standard for proving
`
`nonobviousness. Under Rule 401 of the Federal Rules of Evidence, “Evidence is
`
`relevant if: (a) it has any tendency to make a fact more or less probable than it
`
`would be without the evidence; and (b) the fact is of consequence in determining
`
`the action.”
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`
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`The Objected to Testimony is also within the scope of his direct testimony as
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`Mr. Wechselberger alleges in paragraph 2 of his declaration (Exhibit 1021) that his
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`- 5 -
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`“areas of expertise include broadcast and broadband content distribution networks
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`and communications infrastructures (Internet ...) ... [and] Internet technologies
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`(including but not limited to delivering content via the Internet...),” such as are
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`provided by the iTunes and App store systems about which he was questioned.
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`Given that he was unable to answer questions about the operation of those systems,
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`even when public documents were put in front of him to refresh his recollection on
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`the operation of those systems, the Objected to Testimony also is proper rebuttal
`
`testimony to his direct testimony about his alleged “expertise.”
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`
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`IV. STRIKING OF THE TESTIMONY IS INAPPROPRIATE
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`Petitioner cites to the PTAB’s November 13, 2014 Order (Paper 14)
`
`(hereinafter “the first Discovery Order”) as showing that the “questioning in the
`
`Wechselberger transcript is particularly inappropriate as the Board has already
`
`explicitly denied Patent Owner’s request to file a motion for additional discovery
`
`on the very type of evidence at issue in this Motion.” (Emphasis added.) Motion at
`
`8. However, the Objected to Testimony is not additional discovery under 37
`
`C.F.R. 42.51(b)(2), but rather routine discovery under 37 C.F.R. 42.51(b)(1) for
`
`which no prior authorization is required as the Objected to Testimony is relevant
`
`and within the scope of the direct testimony. In short, the first Discovery Order
`
`related to the additional discovery of documents in Petitioner’s possession and did
`
`
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`- 6 -
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`
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`not preclude Patent Owner from seeking routine discovery (e.g., through cross-
`
`examination testimony) or from searching out and finding relevant information
`
`from public sources. Thus, Petitioner cannot show that “Patent Owner[]
`
`attempt[ed] to evade [the first Discovery O]rder” or that any of the Objected to
`
`Testimony from Mr. Wechselberger “is an abuse of the discovery process.” Id. at
`
`8. As such, the testimony should not be struck.
`
`The Petitioner has not identified within the Objected to Testimony what
`
`questions Petitioner is seeking to strike. By citing to the testimony as a whole,
`
`Petitioner has effectively pushed the burden onto Patent Owner to guess at which
`
`questions Petitioner really wants to have struck. For example, the questions at
`
`374:7-8, are not directed to Petitioner’s products but to the issue of commercial
`
`success in general, and the questions and answers at 369:19 - 370:10 are directed to
`
`whether Mr. Wechselberger is a qualified expert at all.
`
`Moreover, the Motion does not seek to strike other questions about
`
`Petitioner’s products not in the Objected To Testimony, so there is no basis for
`
`finding that similar questions in the Objected To Testimony should be struck. For
`
`example, the following questions are not the subject of the Motion to Strike
`
`334:16-17 (“Q: Are you aware of the Apple iTunes system?”), 335:10 (“Q: Do you
`
`know how it operates?”), 335:20-21 (“Q: Are you aware of how the App Store by
`
`Apple operates?”) and 336:4-5 (“Q: Are you aware of how in app purchases work
`
`
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`- 7 -
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`
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`for applications that utilize the App Store?”). By contrast, the following
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`exemplary questions are the subject of the Motion to Strike: 359:5-7 (“Q: Are you
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`aware of how built in products interact with the App Store to handle built in
`
`product delivery?”), 360:20-22 (“Q: So you don't have an understanding of how
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`built in products are delivered using the Apple App Store?”), and 366:16-21 (“Q:
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`Rather than going through this document section by section like we did for Exhibit
`
`2007, you do not have a recollection of how in app purchases worked in
`
`conjunction with the App Store from Apple either in the 2012 time frame or the
`
`2013 time frame; is that correct?”). Thus, the Motion to Strike should be denied on
`
`that basis as well.
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`
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`V.
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`SANCTIONS, ESPECIALLY MONETARY SANCTIONS, ARE
`
`INAPPROPRIATE
`
`As the Objected to Testimony was properly within the scope of the direct
`
`testimony of Mr. Wechselberger, monetary sanctions for eliciting the testimony are
`
`inappropriate and should be denied.
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`Even if monetary sanctions were appropriate, the Motion does not provide
`
`an accounting such that Patent Owner can respond to whether such alleged costs
`
`are reasonable. Footnote 4 of page 9 of the Motion states that “Should the Board
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`so order, the parties can provide an accounting.” However, that accounting should
`
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`- 8 -
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`
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`have been provided as part of Petitioner’s Motion in order to ensure compliance
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`with 37 C.F.R. 42.1(2) which requires “the just, speedy, and inexpensive resolution
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`of every proceeding.” By delaying providing an accounting, Petitioner has created
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`the need for an additional round of briefing should the PTAB award sanctions.
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`Petitioner’s request for sanctions should be denied on that basis alone.
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`If the PTAB were to award sanctions, the sanctions should be limited to a
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`subportion of the deposition transcript directed to the Objected to Testimony.
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`That portion of the deposition transcript of Mr. Wechselberger is pages 358:1-
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`378:4 (Exhibit 1030), but only the period from 2:33 PM to 3:19 PM (on the second
`
`day of Mr. Wechselberger’s deposition) corresponds to the portion during which
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`Patent Owner’s counsel questioned Mr. Wechselberger. See Exhibit 1030, page
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`00009 showing the start time on the condensed version of page 356 and page
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`00016, showing the end time on the condensed version of page 375.
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`To put the issue in perspective, having filed 21 CBM Petitions at a cost of
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`approximately $600,000, Petitioner has seen fit to spend the Board’s and Patent
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`Owner’s resources to decide and oppose four overlapping Motions to recover
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`attorneys fees for at best approximately 45 minutes worth of questioning out of a
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`deposition covering 2 days. Clearly, the overarching objective of “the just, speedy,
`
`and inexpensive resolution of every proceeding” is lost on Petitioner.
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`- 9 -
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`VI. CONCLUSION
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`
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`Petitioner’s Motion should be denied as to both its request to strike the
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`Objected to Testimony and its request for sanctions.
`
` /
`
` Michael R. Casey /
`
`
`Michael R. Casey
`Registration No. 40,294
`Davidson Berquist Jackson &
`
`Gowdey, LLP
`4300 Wilson Blvd, Suite 700
`Arlington, VA 22203
`Telephone: (703) 894-6406
`Fax: (703) 894-6430
`Email: mcasey@dbjg.com
`
`
`
`
`Dated: February 12, 2015
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`
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`- 10 -
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`
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`CERTIFICATE OF SERVICE
`
`
`The undersigned hereby certifies that this PATENT OWNER’S
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`OPPOSITION TO PETITIONER’S MOTION TO STRIKE PORTIONS OF THE
`
`DEPOSITION TRANSCRIPT OF ANTHONY WECHSELBERGER
`
`CONCERNING PETITIONER’S PRODUCTS AND FOR COSTS in CBM2014-
`
`00108 was served, by agreement of the parties, February 12, 2015 by emailing
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`copies to counsel for the Petitioner as follows:
`
`Steven.Baughman@ropesgray.com
`Ching-Lee.Fukuda@ropesgray.com
`ApplePTABService-SmartFlash@ropesgray.com
`
`
`
`
`
` /
`
` Michael R. Casey /
`
`
`Michael R. Casey
`Registration No. 40,294
`Davidson Berquist Jackson &
`
`Gowdey, LLP
`4300 Wilson Blvd, Suite 700
`Arlington, VA 22203
`Telephone: (703) 894-6406
`Fax: (703) 894-6430
`Email: mcasey@dbjg.com
`Attorney for Patent Owner
`
`
`
`Dated: February 12, 2015
`
`
`
`
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`- 11 -
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