`
` UNITED STATES PATENT AND TRADEMARK OFFICE
` BEFORE THE PATENT TRIAL AND APPEAL BOARD
` ----------------------------------x
` SAMSUNG ELECTRONICS AMERICA, INC.
` and SAMSUNG ELECTRONICS CO., LTD.,
` Petitioner,
` vs.
` SMARTFLASH LLC,
` Patent Owner.
` ----------------------------------x
` CASES: CBM2014-00194, CBM2014-00199
` (Patent 8,118,221 B2)
` CBM2014-00190
` (Patent 7,334,720 B2)
` CBM2014-00192
` (Patent 8,033,458 B2)
` CBM2014-00193
` (Patent 8,061,598 B2)
`
` TELEPHONIC CONFERENCE
` Tuesday, May 5, 2015
` 2:00 p.m.
`
`Reported by:
`Maureen Ratto, RPR, CCR
`Job No: 39073
`
`
`
`
`
`2
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` B E F O R E:
` HON. JENNIFER S. BISK,
` HON. RAMA G. ELLURU,
` HON. JEREMY M. PLENZLER,
` HON. MATTHEW R. CLEMENTS,
` Administrative Patent Judges
`
` A P P E A R A N C E S:
` For the Petitioner:
` FISH & RICHARDSON, LLP
` 1425 K Street, NW, 11th Floor
` Washington DC 20005
` BY: W. KARL RENNER, ESQ.
` renner@fr.com
` THOMAS ROZYLOWICZ, ESQ.
` rozylowicz@fr.com
`
` For the Patent Owner:
` DAVIDSON BERQUIST JACKSON & GOWDEY, LLP
` 8300 Greensboro Drive, Suite 500
` McLean, VA 22102
` (571) 765-7700
` BY: MICHAEL R. CASEY, ESQ.
` mcasey@dbjg.com
`
`DAVID FELDMAN WORLDWIDE, INC.
`450 Seventh Avenue - Ste 500, New York, NY 10123 1.800.642.1099
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` JUDGE ELLURU: This is Rama
` Elluru, and I have Judges Bisk,
` Clements and Plenzler on the line with
` me. This is the initial conference call
` for CBM2014 00190, -192, -193 and -194
` and -199, Samsung against Smartflash.
` Can we have counsel for
` Petitioner identify themself, please?
` MR. RENNER: Yes. This is Carl
` Renner from Fish & Richardson, and I'm
` joined by Tom Rozylowicz and Andrew
` Patrick.
` JUDGE BISK: Thank you, Mr.
` Renner. Do you expect anyone else
` today?
` MR. RENNER: No, we don't.
` Thank you.
` JUDGE BISK: Is there a court
` reporter at your request on this line?
` MR. RENNER: There is not.
` MR. ROZYLOWICZ: There is a
` court reporter, I believe at the
` request of Patent Owner.
` JUDGE BISK: And can Patent
` Owner please identify counsel?
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`DAVID FELDMAN WORLDWIDE, INC.
`450 Seventh Avenue - Ste 500, New York, NY 10123 1.800.642.1099
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` MR. CASEY: Yes, your Honor.
` Michael Casey of Davidson Berquist
` Jackson & Gowdey, and yes, we did
` arrange for a court reporter.
` JUDGE BISK: And we would like
` that the transcript of today's
` teleconference be filed as an exhibit
` in this case. Thank you.
` So we received a list of
` proposed motions by Patent Owner but
` not Petitioner, is that correct,
` Mr. Renner?
` MR. RENNER: That is correct,
` your Honor.
` JUDGE ELLURU: So Mr. Casey,
` let's go through your list of motions
` starting with the first one, which is
` titled "Motion For Routine Discovery".
` MR. CASEY: Yes, your Honor.
` JUDGE ELLURU: Are you requesting
` authorization for -- to file a motion
` for discovery at this point?
` MR. CASEY: Yes, your Honor. And
` Owner wishes to file a motion for
` routine discovery to obtain documents
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`450 Seventh Avenue - Ste 500, New York, NY 10123 1.800.642.1099
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` that relate to non-infringing
` alternatives and arguments of
` non-infringement in the District Court
` litigation identified in the list of
` proposed motions, as I believe, it is
` proper under the routine discovery
` requirements.
` JUDGE ELLURU: You have the
` evidence that Petitioner has allegedly
` taken in his deposition by saying that
` the claims result in preemption here
` and saying they don't infringe in the
` District Court.
` What other evidence are you
` looking for that is relevant to the
` issues in this trial?
` MR. CASEY: I'm sorry, your
` Honor. I didn't understand your
` question. Would you mind repeating it?
` JUDGE ELLURU: Sure. You clearly
` have evidence that Petitioner allegedly
` took an inconsistent position in a
` District Court by saying that they
` don't infringe and then saying here
` that the claims result in preemption,
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`450 Seventh Avenue - Ste 500, New York, NY 10123 1.800.642.1099
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` correct?
` MR. CASEY: Correct, yes. But
` Patent Owner does not have the actual
` documents that are at issue because
` they're all filed under seal in the
` District Court litigation.
` So Patent Owner believes it
` would be proper to have received them
` in this context and they are usable in
` this context. There are
` non-infringement -- it's my
` understanding that there are at least a
` non-infringement argument or a report
` and reports, one or more reports on
` non-infringing alternatives.
` JUDGE ELLURU: But my question
` is, do you have the evidence that
` they've allegedly took an inconsistent
` position, according to you? What other
` evidence is relevant to the issues and
` how is that -- how is evidence of the
` non-infringing products -- what
` authority do we have to grant that
` under even your routine discovery rule
` that you cite?
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` MR. CASEY: So, your Honor, the
` question of non-infringing alternatives
` turns on how many non-infringing -- may
` turn on how many non-infringing
` alternatives there are. It is not
` sufficient to simply say that they have
` alleged they're not infringing
` alternatives. The actual information
` about what those alternatives are and
` proof that they actually meet the
` various fields being used or being
` alleged to be granted is core to the
` issue of whether or not preemption
` exists.
` JUDGE ELLURU: And also, aren't
` there two different standards at play
` with respect to the -- looks like the
` preemption here under the broadest
` reasonable interpretation, and the
` broadest reasonable interpretation that
` is being applied in the District Court?
` MR. CASEY: So, your Honor, if
` they are saying that the difference
` between broadest reasonable
` interpretation and plain and ordinary
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` meaning is appropriate, then they
` certainly haven't made that argument in
` terms of what's being preempted. There
` is no broadest reasonable
` interpretation for the field that is
` being preempted. It is the broadest
` reasonable interpretation for the
` elements of the claims.
` So in terms of preemption, I
` believe that the -- that the issues are
` the same in both the litigation and the
` current PTAB proceeding.
` JUDGE ELLURU: Mr. Renner, would
` you like to respond?
` MR. RENNER: Yes, your Honor.
` Thank you.
` I guess I begin with the notion
` that I don't believe that -- we don't
` believe that routine discovery is
` actually proper for this kind of a
` request. As we've seen from, for
` instance, Garmin V. Cuozzo 2012 0001
` February 26, at 384, we see that
` routine discovery is narrowly directed
` to specific information known to the
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` responding party to be inconsistent.
` It is a narrowly cast type of
` discovery.
` We also see that from Blackberry
` and EyeChart 2013 00126, it's seen that
` the self-executing and self-enforcing
` rule that is at play here, that the
` routine discovery here with the notion
` of known positions that are
` inconsistent is a self-enforcing and
` self-regulating qualifier, and
` certainly, we say that the notion of it
` being a known inconsistency of our
` position is there is no known
` inconsistency at all.
` I think you're rightly pointed
` out there are claim construction
` differences here that if they're on the
` scope of the right that is in question,
` and it's a different question in the
` District Court or with a different
` standard of claim construction over in
` the District Court that it is here, as
` well as the fact that when we think of
` what constitutes a non-infringing
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` position, we know that two things
` really are at play; first, is that an
` abstract idea is only informed, if
` ever, by notions that are within the
` context of that abstract and there is
` really no proofs, no evidence, no
` findings, no exploration as to whether
` or not any non-infringement positions
` taken by Samsung have ever even
` wandered into the abstract that they've
` claimed at this point in the District
` Court; and moreover, as a legal basis,
` we know that we that preemption is
` relative.
` So the existence of a
` non-infringing position, in general,
` that doesn't -- that's not mutually
` exclusive with preemption.
` Preemption can occur in a
` variety of abstractions, if you will,
` leaving open the question for
` non-infringing alternatives and/or
` positions.
` So even if there were -- even if
` the request itself is aimed at
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` information that even if it were given
` and even if it were exactly what I
` think is contemplated, it wouldn't
` inform the answer to the question. And
` so even under an additional discovery
` standard, which is higher than many, we
` don't think it would be an appropriate
` use.
` We're happy to talk about the
` relative nature, if it's helpful, of
` the preemption right, because I think
` that does bear on the question as well,
` but I don't want to say too much if
` it's not helpful to you or Mr. Casey.
` JUDGE ELLURU: I think we
` understand your position, Mr. Renner.
` Is there anything else you would like
` to add, Mr. Casey?
` MR. CASEY: Yes, your Honor. The
` reason that this is actually not
` limited to the issue in which
` Mr. Renner framed it is because
` Petitioner, themselves, in their
` response, for example, in the -0190
` position don't qualify that it's a
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` relative preemption versus a full
` preemption. They say literally, "In a
` similar manner, the recitation of
` basic, well known computer modules and
` terminology in Claims 13 and 14 of the
` '720 Patent, does not have anything
` meaningful that would prevent claims in
` Claims 13 and 14 from effectively
` preempting all relevant uses of the
` general idea of using a third party
` developing payment."
` So that's a very broad statement
` in terms of what they believe is being
` preempted. And so, the thrust of that
` statement is part of the reason that
` this routine discovery is applicable.
` JUDGE ELLURU: Mr. Casey, can you
` point to any of our decisions that rely
` on preemption or refer to preemption?
` MR. RENNER: The PTAB positions,
` your Honor or --
` JUDGE ELLURU: No. Any other
` cases here that we're discussing today.
` MR. CASEY: Every -- all four
` cases that are -- that had 101 issues
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` raised in them discussed preemption. I
` think I misunderstood what your
` question is.
` JUDGE ELLURU: Do any of our
` institutions discuss the decision that
` refers to preemption?
` MR. CASEY: Your Honor, that's
` one of the factors inside the 101
` discussion itself. I don't know that I
` have tried to memorize the entire
` decision. If you give me a second I
` can certainly look for you but it is a
` factor in the preemption -- preemption
` is a factor in the 101 analysis, and it
` is a factor that is relied on by
` Petitioner. Petitioner can't have the
` PTAB rewrite its brief for it.
` JUDGE ELLURU: I'll put the
` parties on hold while I confer with the
` Panel. Thank you.
` (Whereupon, a discussion is held
` off the record.)
` JUDGE ELLURU: Okay. Is counsel
` for Petitioner present?
` MR. RENNER: Yes.
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` JUDGE ELLURU: And counsel for
` Smartflash?
` MR. CASEY: Yes, your Honor.
` JUDGE ELLURU: The Panel has
` conferred and has decided that there is
` no threshold level of consistency here.
` To the extent that Petitioner has
` allegedly made an inconsistent
` statement, the Patent Owner is in
` possession of that evidence, and we are
` persuaded at this point that routine
` discovery is self-executing.
` MR. CASEY: Your Honor, this is
` Michael Casey. I'm sorry. As I
` understand it, you're saying because
` the Patent Owner has it in one form and
` it's covered by Protective Orders and
` can't be used in this proceeding that
` you are still holding that against
` Patent Owner.
` JUDGE ELLURU: Mr. Casey, what
` I'm saying is to the extent you're
` saying that there is an inconsistency,
` which we don't believe at this point,
` the inconsistency is only that
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` Petitioner has made that statement,
` that they have -- that their products
` are non-infringing and that they're a
` non-infringing alternative.
` Do you have that -- you clearly
` brought that to our attention, that
` statement, that Petitioner has made
` that statement in the District Court.
` MR. CASEY: Yes, your Honor.
` JUDGE ELLURU: To the extent that
` you're saying that the underlying
` evidence is inconsistent with their
` position they're taking here, we're not
` convinced of that at this point.
` MR. CASEY: But I can't give you
` the breadth of their statements because
` I'm not allowed to see the breadth of
` their statements, your Honor.
` JUDGE ELLURU: But you haven't
` convinced us of any inconsistency is
` being withheld.
` MR. CASEY: But, your Honor, I
` can't do any more than say they have --
` they have admitted that there are
` non-infringing alternatives, but I
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` can't give you what they are because
` it's being withheld even from me under
` a Protective Order. So I can't -- I'm
` in a Catch 22 position where I can't
` give you the proof that you need to
` have me draft this motion beyond that
` the statements exist. I can certainly
` read to you from transcripts, where
` they say that they're non-infringing
` alternatives but I can't tell you what
` the non-infringing alternatives are.
` MR. RENNER: Your Honor, if I
` may?
` JUDGE ELLURU: Yes, please.
` MR. RENNER: Two items I just
` want to point out. I believe this is
` consistent with what we've seen in
` Garmin, that there is a backdoor to
` discovery positions which would be wide
` open if the discovery request were
` reconsidered by your Honors and
` approved and we look to the authority
` on CBM2014 00008, 44, at page 3, where
` we -- I'll quote as follows, "As the
` Patent Owner representatives has
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` produced all routine discovery
` required, and Petitioner cites nothing
` to the contrary, Petitioner's
` speculation that the materials could
` have been inconsistent and could have
` inconsistent information is not
` sufficient."
` We believe that is the scenario
` you are faced with here, we're all
` faced with here that we have -- we have
` no evidence that would compel further
` discovery and it seems quite
` inconsistent with the nature of the
` rules that are put in place to govern
` discovery in disputes that open a door
` that will be opened, as requested.
` MR. CASEY: Your Honor, in the
` litigation the Samsung was required
` under a motion to compel to disclose
` this information.
` So this call is not -- all of
` the information, it's not all of the
` documents. It's not the motion itself.
` This is the request to file the motion.
` I guess my question is, what is
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` the harm in allowing Patent Owner to
` file the motion, if what we are forced
` to have instead is a position where the
` Petitioner gets to decide whether or
` not the statements are inconsistent.
` The reality is that Petitioner knows
` that Petitioner has made non-infringing
` alternative arguments.
` MR. RENNER: Your Honor, if I
` may.
` JUDGE ELLURU: Yes, please.
` MR. RENNER: And I think your
` Honor has admitted into -- that fact,
` if you will, that Mr. Casey has brought
` forward that apparently
` non-infringement positions have been
` tendered in a co-pending litigation. I
` think that's -- that your Honor has
` already heard that and I believe that's
` a broader scope of discovery here.
` Again, I think it would be
` inconsistent with the rules that govern
` discovery and what we're trying to
` accomplish in these proceedings. The
` harm would be the inefficiency if they
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` come into these proceedings and we open
` the door and it is a wide open door
` once this kind of argument -- I imagine
` that any time preemption is alleged
` you'd have a backdoor into
` non-infringement positions if this were
` a petition that were honored.
` JUDGE ELLURU: Mr. Casey, we
` agree. The specifics alleged in the
` non-infringing alternatives are not
` relevant to the 101 issue. Whether the
` non-infringing products are or not a
` non-infringing alternative, that we
` don't believe that is an inconsistent
` statement with patentability under 101
` and we don't -- and you haven't pointed
` us to any authority that the
` non-infringing products are relevant to
` 101.
` So we are going to move on to
` the second issue, which is the motion
` to stay the proceedings in light of the
` District Court decision. Mr. Casey,
` could you speak to that, please?
` MR. CASEY: Yes, your Honor. The
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` Court -- the District Court in Texas
` has already ruled on the 101 issue and
` it has -- there was a report
` recommendation by the Magistrate Judge,
` which was accepted by Judge Gilstrap
` back in February and so, Samsung is due
` to go to trial in August with
` Smartflash, and we don't believe that
` it is a proper use of the Court's --
` PTAB's resources to relitigate an issue
` that is already lost below in the
` District Court and therefore, we would
` ask that the proceeding be stayed long
` enough to allow the case to go forward
` and the final judgment to be entered at
` the District Court level.
` JUDGE ELLURU: And can you point
` us to any authority that would allow us
` to do that?
` MR. CASEY: Your Honor, it would
` be, the main issue is that of speedy
` and efficient and inexpensive judgment,
` against the proceedings in this case
` which is the main -- the main
` regulation that's involved. So this --
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` yes, I can give you. It's 3017, 42.1
` (sic) which is, partially construed, to
` secure the speedy and inexpensive
` resolution of a proceeding. If we have
` to litigate this in multiple forums,
` when the District Court has already
` ruled on this issue, it will definitely
` not be -- it will definitely not be
` inexpensive and it won't be just.
` JUDGE ELLURU: And how does that
` stump our directive to finish these
` proceedings within one year upon
` institution?
` MR. CASEY: Well, your Honor, I
` think it would create good cause, and
` I'm not sure that it will actually go
` outside of the one year. We -- if the
` trial is in August and we reached our
` proceeding this October we can still
` finish within the year.
` JUDGE ELLURU: Within a year of
` the time we institute again?
` MR. CASEY: No. Even within the
` time that you -- the initial 12 months,
` plus there is always the possibility of
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` an extension of six months for good
` cause.
` JUDGE ELLURU: Mr. Renner, would
` you like to respond?
` MR. RENNER: Yes, your Honor.
` Thank you. You know, we point out that
` the position made in District Court was
` a summary judgment decision, first of
` all, not a final decision. It's not
` been appealed, upheld or otherwise
` maintained by anyone other than the
` District Court Judge without the
` benefit of full fact finding. And your
` Honor, we also submit that is under a
` different claim construction. It's not
` in any way inconsistent with the rules
` that this is pending before the PTAB
` and your Honors, and it is very much,
` in fact, what I think it was intended
` by Congress that we could bring,
` challenge it fully and have them fully
` vetted here before an audience that is
` designed to really address
` patentability, unlike a District Court
` in many ways. And while so, we would
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` think it to be quite unusual at a first
` ever that you would have a stay of a
` proceeding here in favor of a District
` Court, not even final decision, and
` that would be pretty remarkable.
` JUDGE ELLURU: I'll put the
` parties on hold while I confer with the
` Panel. Thank you.
` (Whereupon, a discussion is held
` off the record.)
` JUDGE ELLURU: The Panel has
` conferred. Is counsel for Petitioner
` present?
` MR. CASEY: Yes, your Honor.
` JUDGE ELLURU: And counsel for
` Patent Owner?
` MR. RENNER: Yes, your Honor.
` JUDGE ELLURU: The Panel has
` decided that we don't see a
` justification for a stay given our
` statutory directive to finish these
` files within one year, given that the
` parties can't control the timing of the
` District Court files and already
` subject to an appeal, we're not
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` persuaded it could be resolved within
` the statutory deadline if we were to
` stay, and including if we were to
` extend the deadline by six months.
` And the next issue brought by
` Patent Owner is extending the schedule
` so that we may decide the CBM2014 00200
` 204 request for rehearings.
` Would you speaker to that,
` Mr. Casey.
` MR. CASEY: Yes, your Honor. I'm
` just trying to make sure we don't have
` to depose the Declarant more than once.
` The current deadline for the one is
` June 1st and if the PTAB were to go
` ahead and institute either 200 or 204,
` which Patent Owner doesn't believe
` should happen, but if that were to
` happen we want to make sure we don't
` have to -- and resources in order to
` depose the witness more than once.
` JUDGE ELLURU: Has that
` deposition been scheduled?
` MR. CASEY: Yes, your Honor.
` It's tentatively been scheduled for May
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` 19 and May 20th. So coming right up.
` JUDGE ELLURU: Mr. Renner, would
` you like to respond?
` MR. RENNER: Your Honor, if I'm
` understanding the issue before us
` correctly, it's a decision I think
` between moving the dates that are
` relating to five of the petitions,
` which end October 29th, oral argument.
` Those dates and the date of the -- one
` position 2015, which is a November 9th
` date.
` JUDGE ELLURU: No. I think we're
` actually talking about this Patent
` Owner's request at the bottom of page
` 3, to extend the schedule for due
` dates, given the request for a hearing
` in the 200, 204 case.
` MR. RENNER: Oh, my apologies.
` Thank you, your Honor. I was a little
` confused when Mr. Casey was talking.
` Thank you. Let me repivot for a moment,
` if I could.
` As to the proceedings for 200
` and 204 those relate to different
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` patents. As you may know, there are
` similar parties, where certainly the
` expert is the same, but it is a
` different patent and it's a different
` party altogether, we'd be willing to
` offer him earlier, if that's helpful,
` but I don't -- I don't think we're
` inclined to slow the proceeding down in
` order to allow everything to lag to
` those two. It doesn't seem like that
` is in the interest of speed and what
` we're trying to achieve here with the
` efficiency.
` JUDGE ELLURU: Is there anything
` else you'd like to add, Mr. Casey?
` MR. CASEY: Just, your Honor,
` that all the other cases have already
` had the deposition consolidated, and I
` think the speed and efficiency
` definitely point towards doing the
` deposition only once.
` MR. RENNER: Your Honor, if I
` may, what I'm suggesting is we just do
` it once at the earlier date, rather
` than the later date. And if --you know,
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` obviously, we don't want to see things
` split. Timing is important in this
` case and we'd like to keep the
` schedule. That is all.
` JUDGE ELLURU: Thank you. I'll
` put the parties on hold. Mr. Casey, I
` didn't mean to interrupt, do you have
` anything to add?
` MR. CASEY: Yes. I guess I'm
` trying to understand Mr. Renner's
` position. I guess he's saying that I
` have to take the deposition of
` Mr. Bloom, he would propose I take the
` deposition of Mr. Bloom on cases that
` haven't even been instituted yet, and
` that doesn't seem to make sense.
` The only way to do it earlier
` would be to -- would be to take his
` deposition before we knew if 200 and
` 204 were going to be instituted, which
` doesn't make any sense.
` MR. RENNER: If I may, your
` Honor.
` JUDGE ELLURU: Briefly, please.
` MR. RENNER: Sure. I think
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` Mr. Casey makes a good point, and I'd
` like to address it by saying the
` following: We don't know what the
` Panel is going to do with the rehearing
` request. It seems a greater concern if
` it we were stalling depositions that
` aren't currently scheduled, that are
` able to be taken in view of things we
` don't know yet to come.
` If we learn that the -- those
` cases were to institute quickly we
` would certainly be open to revisiting
` this and talking about it, but at
` present we don't have information that
` would suggest that point actually
` gaining anyone anything.
` JUDGE ELLURU: Thank you. The
` Panel has decided that we are going to
` move ahead with the schedule. We will
` strive to resolve those requests for
` rehearings by as early as possible, and
` to the extent we do end up instituting
` those cases we'll revisit the schedule
` at that time.
` The next item on Patent Owner
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` list is the coordination of other
` proceedings.
` Mr. Casey, what is your specific
` request at this time?
` MR. CASEY: Your Honor, I just
` wanted to make sure that you knew that
` these cases were both out there and
` they have very close but not
` overlapping schedules and the -- I
` wanted to make sure that it didn't come
` as a surprise that Patent Owner is
` still considering whether or not it
` wishes to try to consolidate the
` schedules of 15 to 18 and whether or
` not it needs to request that, but it's
` still within the months of those having
` been instituted.
` So I just wanted to make sure
` that the Board was aware that these
` cases exist, but they're not scheduled
` at the same time, which potentially
` m