`
`____________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`____________
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`
`
`SAMSUNG ELECTRONICS LTD, SAMSUNG ELECTRONICS
`AMERICA, INC., and APPLE INC.,
`
`Petitioner,
`
`v.
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`SMARTFLASH LLC,
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`Patent Owner.
`
`____________
`
`Case CBM2014-001931
`
`Patent 8,061,598 B2
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`____________
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`PATENT OWNER’S MOTION TO EXCLUDE EVIDENCE
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`
`
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`1 CBM2015-00120 has been consolidated with this proceeding.
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`
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`TABLE OF CONTENTS
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`3.
`
`4.
`
`5.
`
`
`Statement of Precise Relief Requested ............................................................ 1
`I.
`Patent Owner Smartflash Timely Objected to Petitioner’s Exhibits ............... 1
`II.
`III. Argument ......................................................................................................... 1
`A.
`Exhibit 1003 Is Inadmissible ................................................................. 1
`1.
`Exhibit 1003 Lacks Foundation And Is Unreliable .................... 1
`2.
`Exhibit 1003 Paragraphs 23-112 Are Irrelevant Under FRE 401
`and Inadmissible Under FRE 402 ............................................... 5
`Exhibit 1003 Paragraphs 23-26 and 113-128 Relate to Legal
`Issues About Which Dr. Bloom Is Not An Expert ..................... 6
`Exhibit 1003 Paragraphs 129-137 Constitute Inadmissible
`Expert Testimony On United States Patent Law And Patent
`Examination ................................................................................ 6
`Exhibit 1003 Paragraphs 102-107, 122, 123, 124, 125, and 128
`Are Inadmissible ......................................................................... 7
`Exhibits 1004, 1005, And 1006 Are Not The Basis For Any Invalidity
`Grounds For Which CBM2014-00193 Was Initiated And Thus Are
`Irrelevant ............................................................................................. 10
`Exhibit 1028 Is Irrelevant Under FRE 401, Inadmissible Under FRE
`402, And Not Authenticated Under FRE 901 ..................................... 11
`Exhibit 1039 Is Irrelevant Under FRE 401, Inadmissible Under FRE
`402, And Not Authenticated Under FRE 901 ..................................... 12
`IV. Conclusion ..................................................................................................... 13
`
`
`D.
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`B.
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`C.
`
`i
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`
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`
`
`I.
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`Statement of Precise Relief Requested
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`Pursuant to 37 C.F.R. §§ 42.62 and 42.64(c), Patent Owner Smartflash LLC
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`moves to exclude Exhibits 1003, 1004, 1005, 1006, 1028, and 1039.
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`II.
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`Patent Owner Smartflash Timely Objected to Petitioner’s Exhibits
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`Patent Owner Smartflash LLC timely objected to CBM2014-00193 Exhibits
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`1003, 1004, 1005, 1006, 1028, and 1039 by serving Patent Owner’s Objections to
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`Admissibility of Evidence on April 15, 2015. Exhibit 2096.
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`III. Argument
`Pursuant to 37 C.F.R. § 42.64(c), the Federal Rules of Evidence (“FRE”)
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`apply in Covered Business Method Review proceedings.
`
`A. Exhibit 1003 Is Inadmissible
`1. Exhibit 1003 Lacks Foundation And Is Unreliable
`Petitioner relies on Exhibit 1003 on pages 5, 6, 7, 8, 10, 12, 15, 19, 20, 24,
`
`25, 26, 27, 29, 32 35, 37, 40, 43, 44, 46, 48, 49, 51, 53, 54, 56, and 57 of the
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`Petition (Paper 2) and pages 5, 9, 11, 13, 14, 15, 16, and 17 of Petitioner’s Reply
`
`(Paper 28). Patent Owner moves to exclude Exhibit 1003, Declaration of Dr.
`
`Jeffrey A. Bloom (“Bloom Declaration”), on grounds that it lacks foundation and
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`is unreliable because it fails to meet the foundation and reliability requirements of
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`37 CFR § 42.65(a) and FRE 702.
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`37 CFR § 42.65(a) provides:
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`§ 42.65 Expert testimony; tests and data.
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`1
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`
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`
`
` Expert testimony that does not disclose the
`(a)
`underlying facts or data on which the opinion is based
`is entitled to little or no weight. Testimony on United
`States patent law or patent examination practice will not
`be admitted.
`
`37 CFR § 42.65(a) (emphasis added). FRE 702 provides:
`
`RULE 702. TESTIMONY BY EXPERT WITNESSES
`A witness who is qualified as an expert by knowledge,
`skill, experience, training, or education may testify in the
`form of an opinion or otherwise if:
`(a) The expert’s scientific, technical, or other specialized
`knowledge will help the trier of fact to understand the
`evidence or to determine a fact in issue;
`(b) The testimony is based on sufficient facts or data;
`(c) The testimony is the product of reliable principles and
`methods; and
`(d) The expert has reliably applied the principles and
`methods to the facts of the case.
`
`FRE 702.
`
`Patent Owner moves to exclude the Bloom Declaration because it does not
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`disclose the underlying facts or data on which the opinions contained are based as
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`required by 37 CFR § 42.65(a), given that it does not state the relative evidentiary
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`weight (e.g., substantial evidence versus preponderance of the evidence) used by
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`Dr. Bloom in arriving at his conclusions. “A finding is supported by substantial
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`evidence if a reasonable mind might accept the evidence to support the finding.” Q.
`
`I. Press Controls, B.V. v. Lee, 752 F.3d 1371, 1378-1379 (Fed. Cir. 2014)(citing
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`Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S. Ct. 206, 83 L. Ed. 126
`
`
`
`2
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`
`
`
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`(1938)). Proof by a “preponderance of the evidence” means “that it is more likely
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`than not.” See, O2 Micro Int'l Ltd. v. Beyond Innovation Tech. Co., 449 Fed.
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`Appx. 923, 928 (Fed. Cir. 2011).
`
`Petitioner has cited, and likely will cite again, Apple Inc. v. Smartflash LLC,
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`CBM2014-00102, Paper 8 at 4, and Vibrant Media v. General Electric Company,
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`IPR2013-00172, Paper 50 at 42, for the proposition that an expert need not
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`expressly set forth the evidentiary standard used in formulating opinions. See,
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`Petitioner’s Reply to Patent Owner’s Response, Paper 28, at 4-5. In particular,
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`Petitioner will likely rely on the Board’s conclusion in Vibrant Media that “it is
`
`within [the Board’s] discretion to assign the appropriate weight to be accorded to
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`evidence based on whether the expert testimony discloses the underlying facts or
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`data on which the opinion is based.” Petitioner’s Reply, Paper 28 at 5 (citing
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`Vibrant Media, Paper 50 at 42). The Board’s conclusion in Vibrant Media,
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`however, ignores that under FRE 702, the admissibility of expert testimony
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`requires a finding not only that “the testimony is based on sufficient facts or data”
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`(FRE 702(b)), but also that “the testimony is the product of reliable principles and
`
`methods” (FRE 702(c)) and that “the expert has reliably applied the principles and
`
`methods to the facts of the case” (FRE 702(d)).
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`Here, the Board cannot assess under FRE 702 whether Dr. Bloom’s opinion
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`testimony is “based on sufficient facts or data,” is “the product of reliable
`
`
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`3
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`
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`principles and methods,” or if Dr. Bloom “reliably applied the principles and
`
`methods to the facts of the case” given that Dr. Bloom did not disclose the standard
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`against which he measured the quantum of evidence in arriving at his opinions.
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`Specifically, when Dr. Bloom opines that:
`
`[T]he specification of the ‘598 Patent simply describes
`well-known concepts related to copyright and licensing.
`The claims of the ‘598 Patent, moreover, cover nothing
`more than the basic financial idea of enabling limited use
`of paid for and/or licensed content using “conventional”
`computer systems and components. The recitation of
`these “conventional” systems and components does not
`meaningfully limit the coverage of that idea, which can
`be performed through human thought and pen and paper,
`entirely without the use of a computer.
`
`Exhibit 1003 at ¶ 126 (internal citation omitted), is he saying that he examined the
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`evidence and a reasonable mind would find sufficient evidence to support these
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`findings (substantial evidence); OR is he saying that he examined the evidence and
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`it is more likely than not that his findings are true (preponderance of the evidence).
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`There is no basis for the Board to know, because the Bloom Declaration is silent
`
`on the standard he used. As such, the Bloom Declaration should be excluded
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`because it fails to meet the requirements of 37 CFR § 42.65(a) and FRE 702.
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`To the extent that Exhibit 1003 is not excluded in its entirety as requested
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`above, Patent owner moves to exclude the following paragraphs for the following
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`reasons:
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`
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`4
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`
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`2. Exhibit 1003 Paragraphs 23-112 Are Irrelevant Under FRE 401
`and Inadmissible Under FRE 402
`
`Petitioner relies on Exhibit 1003 Paragraphs 23-112 on pages 5, 6, 7, 8, 10,
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`12, 15, 19, 20, 35, 37, 40, 43, 44, 46, 48, 49, 51, 53, 54, 56, and 57 of the Petition
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`(Paper 2) and pages 5, 13, 14, 15, 16, and 17 of Petitioner’s Reply (Paper 28).
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`Patent Owner moves to exclude Exhibit 1003 Paragraphs 23-112 on the grounds
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`that those paragraphs fail the test for relevance set forth in FRE 401and thus are
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`inadmissible under FRE 402.
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`Paragraphs 23-112 of the Bloom Declaration are directed to patentability
`
`under 35 U.S.C. § 103 and discussions of the Gruse, Stefik ‘235 and Stefik ‘980
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`references. The Board’s institution decision (“PTAB Decision”) did not adopt any
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`of the proposed invalidity grounds under § 103 based on Gruse, Stefik ‘235, or
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`Stefik ‘980. Compare, Samsung Electronics America, Inc. et al. v. Smartflash
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`LLC, CBM2014-00193, Decision – Institution of Covered Business Method Patent
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`Review 37 C.F.R. § 42.208 (PTAB April 2, 2015), Paper 7 at 2-3 (noting Gruse,
`
`Stefik ‘235, and Stefik ‘980 as § 103 grounds for challenging patentability of claim
`
`7 of the ‘598 Patent), with PTAB Decision at 19 (instituting covered business
`
`method patent review of claim 7 on § 101 grounds only). Review was instituted
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`only on the purely legal issue of whether claim 7 of the ‘598 Patent is directed to
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`patent eligible subject matter under § 101. Thus, the extensive discussions of the
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`Gruse, Stefik ‘235, and Stefik ‘980 references, the combination of those references,
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`
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`5
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`
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`and the ‘598 Patent application contained in Paragraphs 23-112 of the Bloom
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`Declaration do not make any fact of consequence in determining this action more
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`or less probable than it would be without Paragraphs 23-112. As such, Paragraphs
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`23-112 of the Bloom Declaration fail the test for relevance set out in FRE 401(b)
`
`and, being irrelevant, are not admissible under FRE 402.
`
`3. Exhibit 1003 Paragraphs 23-26 and 113-128 Relate to Legal Issues
`About Which Dr. Bloom Is Not An Expert
`
`Petitioner relies on Exhibit 1003 Paragraphs 23-26 on pages 5, 6, 7, 8, 10,
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`and 12 of the Petition (Paper 2), pages 14, 15, 16 and 17 of Petitioner’s Reply
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`(Paper 28), and on Paragraphs 113-128 on pages 24, 25, 26, 27, 29 and 32 of the
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`Petition (Paper 2) and pages 9, 11, 15, and 16 of Petitioner’s Reply (Paper 28).
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`Paragraphs 23-26 and 113-128 of the Bloom Declaration relate to the strictly legal
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`issue of statutory subject matter under § 101, an issue for which Dr. Bloom is not
`
`an expert. Those paragraphs should be excluded under FRE 401 and 402 as not
`
`relevant, under FRE 602 as lacking foundation, and under FRE 701 and 702 as
`
`providing legal opinions on which the lay witness is not competent to testify.
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`4. Exhibit 1003 Paragraphs 129-137 Constitute Inadmissible Expert
`Testimony On United States Patent Law And Patent Examination
`
`Petitioner does not specifically cite Exhibit 1003 Paragraphs 129-137 in the
`
`Petition. Paragraphs 129-137 of the Bloom Declaration are titled “Legal
`
`
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`6
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`
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`Principles” and relate to patent law “legal concepts.” Exhibit 1003, ¶ 129. 37 CFR
`
`§ 42.65(a) provides:
`
`§ 42.65 Expert testimony; tests and data.
`(a)
` Expert testimony that does not disclose the
`underlying facts or data on which the opinion is based is
`entitled to little or no weight. Testimony on United
`States patent law or patent examination practice will
`not be admitted.
`
`37 CFR § 42.65(a) (emphasis added). Given that Paragraphs 129-137 of the
`
`Bloom Declaration deal exclusively with United States patent law and/or patent
`
`examination practice those paragraphs should not be admitted.
`
`5. Exhibit 1003 Paragraphs 102-107, 122, 123, 124, 125, and 128 Are
`Inadmissible
`
`Paragraphs 102-107 – Patent Owner moves to exclude Paragraphs 102-107
`
`as hearsay pursuant to FRE 801 and 802, not meeting any of the hearsay
`
`exceptions of FRE 803 or 804.
`
`Paragraph 122 – Patent Owner moves to exclude Paragraph 122 on
`
`relevance grounds because the description of the ASCAP licensing scheme for
`
`performance rights is not relevant to the technological solution for digital rights
`
`management embodied in the ‘598 Patent. Paragraph 122 fails the test for relevant
`
`evidence because nothing in Paragraph 122 makes a fact of consequence in
`
`determining this action more or less probable than it would be without Paragraph
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`122. FRE 401(b). Being irrelevant evidence, Paragraph 122 is not admissible.
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`
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`7
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`
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`FRE 402. Patent Owner further moves to exclude Paragraph 122 as hearsay
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`pursuant to FRE 801 and 802, not meeting any of the hearsay exceptions of FRE
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`803 or 804.
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`Paragraph 123 – Patent Owner moves to exclude Paragraph 123 on
`
`relevance grounds because the descriptions of the ASCAP licensing scheme for
`
`performance rights and audit logs is not relevant to the technological solution for
`
`digital rights management embodied in the ‘598 Patent. Paragraph 123 fails the
`
`test for relevant evidence because nothing in Paragraph 123 makes a fact of
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`consequence in determining this action more or less probable than it would be
`
`without Paragraph 123. FRE 401(b). Being irrelevant evidence, Paragraph 123 is
`
`not admissible. FRE 402. Patent Owner further moves to exclude Paragraph 123
`
`as hearsay pursuant to FRE 801 and 802, not meeting any of the hearsay
`
`exceptions of FRE 803 or 804.
`
`Paragraph 124 – Patent Owner moves to exclude Paragraph 124 on
`
`relevance grounds because the description of the manner in which a radio station
`
`program director plans station programming is not relevant to the technological
`
`solution for digital rights management embodied in the ‘598 Patent. Patent Owner
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`further objects on relevance grounds because the referenced article by Keith was
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`published after the effective filing date of the ‘598 Patent and thus has no bearing
`
`on the state of knowledge at the time the ‘598 Patent application was filed.
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`
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`8
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`
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`Paragraph 124 fails the test for relevant evidence because nothing in Paragraph 124
`
`makes a fact of consequence in determining this action more or less probable than
`
`it would be without Paragraph 124. FRE 401(b). Being irrelevant evidence,
`
`Paragraph 124 is not admissible. FRE 402.
`
`Paragraph 125 – Patent Owner moves to exclude Paragraph 125 on
`
`relevance grounds because the description of formal requirements on programming
`
`for internet radio stations is not relevant to the technological solution for digital
`
`rights management embodied in the ‘598 Patent. Paragraph 125 fails the test for
`
`relevant evidence because nothing in Paragraph 125 makes a fact of consequence
`
`in determining this action more or less probable than it would be without
`
`Paragraph 125. FRE 401(b). Being irrelevant evidence, Paragraph 125 is not
`
`admissible. FRE 402. Patent Owner further moves to exclude Paragraph 125 as
`
`hearsay pursuant to FRE 801 and 802, not meeting any of the hearsay exceptions
`
`of FRE 803 or 804.
`
`Paragraph 128 – Patent Owner moves to exclude Paragraph 128 on
`
`relevance grounds because the description of the planned establishment of credit
`
`facilities into retail establishments is not relevant to the technological solution for
`
`digital rights management embodied in the ‘598 Patent. Paragraph 128 therefore
`
`fails the test for relevant evidence because nothing in Paragraph 128 makes a fact
`
`of consequence in determining this action more or less probable than it would be
`
`
`
`9
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`
`
`
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`without Paragraph 128. FRE 401(b). Being irrelevant evidence, Paragraph 128 is
`
`not admissible. FRE 402. Patent Owner further moves to exclude Paragraph 128
`
`as hearsay pursuant to FRE 801 and 802, not meeting any of the hearsay
`
`exceptions of FRE 803 or 804.
`
`B.
`
`Exhibits 1004, 1005, And 1006 Are Not The Basis For Any
`Invalidity Grounds For Which CBM2014-00193 Was Initiated
`And Thus Are Irrelevant
`
`Petitioner relies on Exhibit 1004 (Stefik ‘235) on pages 4, 37, 38, 40, 41, 43,
`
`44, 48, 49, 53, 54, and 57 of the Petition, relies on Exhibit 1005 (Stefik ‘980) on
`
`pages 4, 37, 38, 40, 43, 45, 48, 50, 52, 54, and 57 of the Petition, and relies on
`
`Exhibit 1006 (Gruse) on pages 3, 4, 32, 33, 34, 35, 37, 38, 39, 40, 41, 42, 43, 44,
`
`46, 47, 48, 49, 51, 52, 53, 54, 55, 56, and 57 of the Petition. The PTAB Decision
`
`did not adopt any of the proposed invalidity grounds based on Exhibit 1004 (U.S.
`
`Patent No. 5,530,235 (“Stefik ‘235”)), Exhibit 1005 (U.S. Patent No. 5,629,980
`
`(“Stefik ‘980”)), or Exhibit 1006 (PCT Publication No. WO 00/08909 (“Gruse”)).
`
`Compare, PTAB Decision, Paper 7 at 2-3 (noting Gruse, Stefik ‘235, and Stefik
`
`‘980 as § 103 grounds for challenging patentability of claim 7 of the ‘598 Patent),
`
`with PTAB Decision at 19 (instituting covered business method patent review of
`
`claim 7 on § 101 grounds only). Thus, Exhibits 1004, 1005, and 1006 fail the test
`
`for relevant evidence, because nothing in Exhibits 1004, 1005, or 1006 makes a
`
`fact of consequence in determining this action more or less probable than it would
`
`
`
`10
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`
`
`
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`be without any of those Exhibits. FRE 401(b). Being irrelevant evidence, Exhibits
`
`1004, 1005, and 1006 are not admissible. FRE 402.
`
`C. Exhibit 1028 Is Irrelevant Under FRE 401, Inadmissible Under
`FRE 402, And Not Authenticated Under FRE 901
`
`Petitioner relies on Exhibit 1028 in Paragraph 128 of the Bloom Declaration
`
`and on ¶ 128 of the Bloom Declaration on pages 25 and 32 of the Petition. Patent
`
`Owner moves to exclude Exhibit 1028 (Weinstein “MasterCard Plans Point-of-
`
`Sale Product for Merchants Leery of Bank Cards”) on relevance and authenticity
`
`grounds. The description of the planned establishment of credit facilities into retail
`
`establishments is not relevant to the technological solution for digital rights
`
`management embodied in the ‘598 Patent. Exhibit 1028 therefore fails the test for
`
`relevant evidence because nothing in Exhibit 1028 makes a fact of consequence in
`
`determining this action more or less probable than it would be without Exhibit
`
`1028. FRE 401(b). Being irrelevant evidence, Exhibit 1028 is not admissible.
`
`FRE 402.
`
`Patent Owner further moves to exclude Exhibit 1028 on authenticity grounds
`
`under FRE 901 because the proponent has produced no evidence sufficient to
`
`support a finding that Exhibit 1028 is what the proponent claims it is.
`
`
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`11
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`
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`D. Exhibit 1039 Is Irrelevant Under FRE 401, Inadmissible Under
`FRE 402, And Not Authenticated Under FRE 901
`
`Petitioner relies on Exhibit 1039 on page 24 of the Petition and page 8 of
`
`Petitioner’s Reply. Patent Owner moves to exclude Exhibit 1039 on relevance
`
`grounds because alleged publication is after the effective filing date of the ‘598
`
`Patent. Exhibit 1039 therefore fails the test for relevant evidence because nothing
`
`in Exhibit 1039 makes a fact of consequence in determining this action more or
`
`less probable than it would be without Exhibit 1039. FRE 401(b). Being
`
`irrelevant evidence, Exhibit 1039 is not admissible. FRE 402.
`
`Patent Owner further moves to exclude Exhibit 1039 on authenticity grounds
`
`under FRE 901 because the proponent has produced no evidence sufficient to
`
`support a finding that Exhibit 1039 is what the proponent claims it is.
`
`
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`12
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`
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`IV. Conclusion
`For these reasons, Patent Owner Smartflash, LLC respectfully requests that
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`the Board exclude Exhibits 1003, 1004, 1005, 1006, 1028, and 1039.
`
` /
`
` Michael R. Casey /
`
`
`Michael R. Casey
`Registration No. 40,294
`Davidson Berquist Jackson &
`
`Gowdey, LLP
`8300 Greensboro Dr., Suite 500
`McLean, VA 22102
`Telephone: (571) 765-7700
`Fax : (571) 765-7200
`Email: mcasey@dbjg.com
`Attorney for Patent Owner
`
`
`13
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`Dated: September 21, 2015
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`
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`
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`CERTIFICATE OF SERVICE
`
`The undersigned hereby certifies that this PATENT OWNER’S MOTION
`
`TO EXCLUDE EVIDENCE, PATENT OWNER’S LIST OF EXHIBITS and
`
`Exhibit 2096 in CBM2014-00193 was served, by agreement of the parties,
`
`September 21, 2015 by emailing copies to counsel for the Petitioners as follows:
`
`W. Karl Renner (renner@fr.com)
`Thomas Rozylowicz (rozylowicz@fr.com)
`CBM39843-0006CP1@fr.com
`
`J. Steven Baughman (steven.baughman@ropesgray.com)
`Ching-Lee Fukuda (ching-lee.fukuda@ropesgray.com)
`Megan Raymond (megan.raymond@ropesgray.com
`ApplePTABService-SmartFlash@ropesgray.com
`
`
` /
`
` Michael R. Casey /
`
`
`Michael R. Casey
`Registration No. 40,294
`Davidson Berquist Jackson &
`
`Gowdey, LLP
`8300 Greensboro Dr., Suite 500
`McLean, VA 22102
`Telephone: (571) 765-7700
`Fax : (571) 765-7200
`Email: mcasey@dbjg.com
`Attorney for Patent Owner
`
`14
`
`
`
`Dated: September 21, 2015