`________________________
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`________________________
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`________________________
`Case CBM2015-00015
`Patent 8,118,221 B2
`________________________
`
`PATENT OWNER’S MOTION TO EXCLUDE EVIDENCE
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`TABLE OF CONTENTS
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`B.
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`C.
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`Statement of Precise Relief Requested ............................................................ 1
`I.
`Patent Owner Smartflash Timely Objected to Petitioner’s Exhibits ............... 1
`II.
`III. Argument ......................................................................................................... 1
`A.
`Exhibit 1202 is Inadmissible Other Evidence of the Content of a
`Writing, Irrelevant, and Cumulative ..................................................... 1
`Exhibits 1203, 1204, 1227, 1228, and 1229 are Uncited and thus are
`Irrelevant ............................................................................................... 3
`Exhibits 1205, 1206, 1207, 1212, 1215, 1217, 1218, 1220, 1231,
`1232, and 1233 are Not Alleged to be Invalidating Prior Art and thus
`are Irrelevant .......................................................................................... 5
`Exhibits 1210, 1213, 1214, 1216, and 1219 are not the Basis for any
`Invalidity Grounds for Which CBM2015-00015 was Initiated and thus
`are Irrelevant .......................................................................................... 7
`Exhibit 1221 Lacks Foundation, is Unreliable, and Relies on
`Irrelevant Exhibits ................................................................................. 8
`Exhibit 1223 Lacks Authenticity......................................................... 12
`F.
`IV. Conclusion ..................................................................................................... 13
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`D.
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`E.
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`i
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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 1202, 1203, 1204, 1205, 1206, 1207, 1210, 1212, 1213,
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`1214, 1215, 1216, 1217, 1218, 1219, 1220, 1221, 1223, 1227, 1228, 1229, 1231,
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`1232, and 1233.
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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 CBM2015-00015 Exhibits
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`1202, 1203, 1204, 1205, 1206, 1207, 1210, 1212, 1213, 1214, 1215, 1216, 1217,
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`1218, 1219, 1220, 1221, 1223, 1227, 1228, 1229, 1231, 1232, and 1233 by serving
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`Patent Owner’s Objections to Admissibility of Evidence on April 24, 2015.
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`Exhibit 2099.
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`III. Argument
`Pursuant to 37 C.F.R. § 42.64(c), the Federal Rules of Evidence apply in
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`Covered Business Method Review proceedings.
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`A. Exhibit 1202 is Inadmissible Other Evidence of the Content of a
`Writing, Irrelevant, and Cumulative
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`Patent Owner moves to exclude Exhibit 1202, (Plaintiff’s First Amended
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`Complaint) on grounds that it is: inadmissible other evidence of the content of a
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`writing under FRE 1004; inadmissible under FRE 402 because it fails the test for
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`relevance set forth in FRE 401; and, even if relevant, is cumulative evidence under
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`FRE 403.
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`1
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`Petitioner cites Exhibit 1202 for the sole purpose of showing Patent Owner’s
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`description of the subject matter of U.S. Patent 8,118,221 (“the ‘221 Patent”) as
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`“cover[ing] a portable data carrier for storing data and managing access to the data
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`via payment information and/or use status rules” and “cover[ing] a computer
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`network … that serves data and manages access to data by, for example, validating
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`payment information.” Corrected Petition at 11 (citing Ex. 1202 ¶ 17). Petitioner
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`does not need to cite to Exhibit 1202 to show the subject matter of the ‘221 Patent,
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`however, because Exhibit 1201, the actual ‘221 Patent, is in evidence without
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`objection. Under FRE 1004, other evidence of the content of a writing (here the
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`‘221 Patent) is admissible if the original is lost, cannot be obtained, has not been
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`produced, or the writing is not closely related to a controlling issue. None of those
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`conditions apply here, given that the ‘221 Patent is in evidence and is the subject of
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`the trial.
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`Patent Owner’s description of the ‘221 Patent in Exhibit 1202 is not relevant
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`to any of the issues here. Petitioner’s expert, Anthony J. Wechselberger’s
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`Declaration, Exhibit 1221, (“Wechselberger Declaration”) does not cite Exhibit
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`1202. The Board’s April 10, 2015 Decision – Institution of Covered Business
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`Method Patent Review and Denying Motion for Joinder 37 C.F.R. § 42.208, 37
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`C.F.R. § 42.222(b) (“PTAB Decision”), Paper 23, does not cite Exhibit 1202.
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`Exhibit 1202 does not appear to make a fact of consequence in determining this
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`2
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`action more or less probable than it would be without Exhibit 1202. As such,
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`Exhibit 1202 does not pass the test for relevant evidence under FRE 401 and is not
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`admissible per FRE 402.
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`Even if Exhibit 1202 was found to be relevant, it should also be excluded
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`under FRE 403 as cumulative of Exhibit 1201.
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`In the related CBM2014-00102, the Board declined to exclude the same
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`exhibit because “[Patent Owner’s] characterization of the ‘221 patent in prior
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`proceedings are (sic) relevant to the credibility of its characterization of the ‘221
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`patent in this proceeding.” CBM2014-00102, Paper 52 at 36. There is no
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`credibility issue here, however, that makes Exhibit 1202 relevant. There is nothing
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`about Patent Owner’s characterization of the ‘221 Patent in this proceeding – that
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`representative claim 32 “does not recite a ‘financial product or service’” in the way
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`Congress intended (Patent Owner’s Preliminary Response, Paper 19 at 5-10) – that
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`is contradicted by Exhibit 1202 such that the credibility of Patent Owner’s
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`characterization is an issue. As such Exhibit 1202 is irrelevant and inadmissible.
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`B. Exhibits 1203, 1204, 1227, 1228, and 1229 are Uncited and thus are
`Irrelevant
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`Neither the Corrected Petition, nor the Wechselberger Declaration, nor the
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`PTAB Decision cite to Exhibit 1203 (File History for U.S. Patent No. 8,061,598),
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`Exhibit 1204 (File History for U.S. Patent No. 8,336,772), Exhibit 1227 (File
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`History for U.S. Patent No. 7,334,720), Exhibit 1228 (File History for U.S. Patent
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`3
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`
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`No. 7,942,317) or Exhibit 1229 (File History for U.S. Patent No. 8,033,458) (“the
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`Uncited Exhibits”). The Uncited Exhibits do not appear to make a fact of
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`consequence in determining this action more or less probable than it would be
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`without the Uncited Exhibits. As such, the Uncited Exhibits do not pass the test
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`for relevant evidence under FRE 401 and are not admissible per FRE 402.
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`In CBM2014-00102 the Board declined to exclude exhibits that were
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`uncited, finding that “[b]ecause Mr. Wechselberger attests that he reviewed these
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`exhibits in reaching the opinions he expressed in this case, Patent Owner has not
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`shown that they are irrelevant under FRE 401 and 402.” CBM2014-00102, Paper
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`52 at 37. The Board’s conclusion that mere review by an expert in reaching an
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`opinion renders an exhibit relevant under FRE 401 and thus admissible under FRE
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`402 is overly broad under the Federal Rules of Evidence. Underlying facts and
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`data need not themselves be admissible for an expert to rely on them in
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`formulating an admissible opinion. FRE 703 (“An expert may base an opinion on
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`facts or data in the case that the expert has been made aware of or personally
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`observed. If experts in the particular field would reasonably rely on those kinds of
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`facts or data in forming an opinion on the subject, they need not be admissible for
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`the opinion to be admitted”). But nothing in the Federal Rules of Evidence
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`supports that mere review of an exhibit by an expert renders the exhibit relevant or
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`admissible. The Uncited Exhibits should be excluded.
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`4
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`C. Exhibits 1205, 1206, 1207, 1212, 1215, 1217, 1218, 1220, 1231, 1232, and
`1233 are Not Alleged to be Invalidating Prior Art and thus are
`Irrelevant
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`Petitioner cites Exhibit 1205 (U.S. Patent No. 5,675,734)(“Hair”) (Corrected
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`Petition at 16), Exhibit 1206 (U.S. Patent No. 4,999,806)(“Chernow”) (Corrected
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`Petition at 4, 5, 15, and 16), Exhibit 1207 (U.S. Patent No. 4,878,245)(“Bradley”)
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`(Corrected Petition at 15 and 16), Exhibit 1212 (U.S. Patent No.
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`5,103,392)(“Mori”) (Corrected Petition at 5 and 56), Exhibit 1215 (U.S. Patent No.
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`5,915,019)(“Ginter”) (Corrected Petition at 7), Exhibit 1217 (PCT Application
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`Publication No. WO 99/43136)(“Rydbeck”) (Corrected Petition at 7), Exhibit 1218
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`(JP Publication No. H11-164058A (translation))(“Sato”) (Corrected Petition at 7),
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`Exhibit 1220 (Eberhard von Faber, Robert Hammelrath, and Franz-Peter Heider,
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`“The Secure Distribution of Digital Contents,” IEEE (1997))(“von Faber”)
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`(Corrected Petition at 6), Exhibit 1231 (U.S. Patent No. 4,337,483)(“Guillou”)
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`(Wechselberger Declaration ¶¶ 87, 94), Exhibit 1232 (U.S. Patent No.
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`7,725,375)(“Shepherd”) (Corrected Petition at 30), and Exhibit 1233 (U.S. Patent
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`No. 5,925,127)(“Ahmad”) (Wechselberger Declaration ¶ 43). Although cited,
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`neither the Corrected Petition nor the Wechselberger Declaration assert that
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`Exhibit 1205 (Hair), Exhibit 1206 (Chernow), Exhibit 1207 (Bradley), Exhibit
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`1212 (Mori), Exhibit 1215 (Ginter), Exhibit 1217 (Rydbeck), Exhibit 1218 (Sato),
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`Exhibit 1220 (von Faber), Exhibit 1231 (Guillou), Exhibit 1232 (Shepherd), or
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`5
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`Exhibit 1233 (Ahmad) (“the Unasserted Exhibits”) are potentially invalidating
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`prior art, either alone or in combination with any other reference. The PTAB
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`Decision did not base any of its analysis on the Unasserted Exhibits. Thus, the
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`Unasserted Exhibits do not appear to make a fact of consequence in determining
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`this action more or less probable than it would be without the Unasserted Exhibits.
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`As such, the Unasserted Exhibits do not pass the test for relevant evidence under
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`FRE 401 and are not admissible per FRE 402.
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`In CBM2014-00102 the Board declined to exclude similarly unasserted
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`exhibits, finding “[b]ecause these exhibits are evidence relied upon by Petitioner to
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`support its assertions with respect to the state of the art and to knowledge of a
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`person of ordinary skill in the art, which are relevant to obviousness, we are not
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`persuaded that they are irrelevant under FRE 401 and 402.” CBM2014-00102,
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`Paper 52 at 37 (emphasis added). The Board’s reasoning in CBM2014-00102 is
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`inapplicable here, where review was instituted on § 101 statutory subject matter
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`grounds only. The Board rejected the asserted § 103 obviousness grounds, making
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`the state of the art and the knowledge of a person of ordinary skill in the art
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`irrelevant. As such, the Unasserted Exhibits should be excluded.
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`6
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`
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`D. Exhibits 1210, 1213, 1214, 1216, and 1219 are not the Basis for any
`Invalidity Grounds for Which CBM2015-00015 was Initiated and thus
`are Irrelevant
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`Petitioner cites Exhibit 1210 (U.S. Patent No. 5,940,805)(“Kopp”), Exhibit
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`1213 (U.S. Patent No. 5,530,235)(“Stefik ‘235”), Exhibit 1214 (U.S. Patent No.
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`5,629,980)(“Stefik ‘980”), Exhibit 1216 (European Patent Application, Publication
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`No. EP0809221A2)(“Poggio”), and Exhibit 1219 (International Publication No.
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`WO 95/34857)(“Smith”) as alleged invalidating prior art. Corrected Petition at 18.
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`The PTAB Decision, however, did not adopt any of the proposed invalidity
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`grounds based on Exhibit 1210 (Kopp), Exhibit 1213 (Stefik ‘235), Exhibit 1214
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`(Stefik ‘980), Exhibit 1216 (Poggio), or Exhibit 1219 (Smith) (“the Alleged Prior
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`Art Exhibits”). Compare, PTAB Decision at 3 (paragraph summarizing asserted
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`grounds for challenging patentability under § 103), with PTAB Decision at 21-22
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`(instituting covered business method patent review on § 101 grounds only). Thus,
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`the Alleged Prior Art Exhibits fail the test for relevant evidence because nothing in
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`the Alleged Prior Art Exhibits makes a fact of consequence in determining this
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`action more or less probable than it would be without the Alleged Prior Art
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`Exhibits. FRE 401(b). Being irrelevant evidence, the Alleged Prior Art Exhibits
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`are not admissible. FRE 402.
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`In CBM2014-00102 the Board declined to exclude similar alleged prior art
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`that was uninstituted “[b]ecause these exhibits are evidence relied upon by
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`7
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`Petitioner to support its assertions with respect to the state of the art and to
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`knowledge of a person of ordinary skill in the art, which are relevant to
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`obviousness, we are not persuaded that they are irrelevant under FRE 401 and
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`402.” CBM2014-00102, Paper 52 at 37 (emphasis added). The Board’s prior
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`reasoning is inapplicable here, where review was instituted on § 101 statutory
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`subject matter grounds only. The Board rejected the asserted § 103 obviousness
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`grounds, making the state of the art and the knowledge of a person of ordinary skill
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`in the art irrelevant. As such, the Alleged Prior Art Exhibits should be excluded.
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`E.
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`Exhibit 1221 Lacks Foundation, is Unreliable, and Relies on
`Irrelevant Exhibits
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`Petitioner’s citations to Exhibit 1221 (Declaration of Anthony J.
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`Wechselberger In Support of Apple Inc.’s Petition for Covered Business Method
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`Patent Review (“Wechselberger Declaration”)) are too extensive to catalog
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`individually; 111 citations in its 80-page Corrected Petition. Patent Owner moves
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`to exclude Exhibit 1221 on grounds that it lacks foundation and is unreliable
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`because it fails to meet the foundation and reliability requirements of 37 CFR
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`§ 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.
` 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
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`8
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`States patent law or patent examination practice will not
`be admitted.
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`37 CFR § 42.65(a) (emphasis added). FRE 702 provides:
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`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.
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`FRE 702.
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`Patent Owner moves to exclude the Wechselberger Declaration because it
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`does not disclose the underlying facts or data on which the opinions contained are
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`based as required by 37 CFR § 42.65(a), given that it does not state the relative
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`evidentiary weight (e.g., substantial evidence versus preponderance of the
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`evidence) used by Mr. Wechselberger in arriving at his conclusions. “A finding is
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`supported by substantial evidence if a reasonable mind might accept the evidence
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`to support the finding.” Q. I. Press Controls, B.V. v. Lee, 752 F.3d 1371, 1378-
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`1379 (Fed. Cir. 2014)(citing Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.
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`Ct. 206, 83 L. Ed. 126 (1938)). Proof by a “preponderance of the evidence” means
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`
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`9
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`
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`“that it is more likely than not.” See, O2 Micro Int'l Ltd. v. Beyond Innovation
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`Tech. Co., 449 Fed. Appx. 923, 928 (Fed. Cir. 2011).
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`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 35, at 19-20. In particular,
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`Petitioner will likely rely on the Board’s conclusion in Vibrant Media that “it is
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`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 35 at 20 (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
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`methods” (FRE 702(c)) and that “the expert has reliably applied the principles and
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`methods to the facts of the case” (FRE 702(d)).
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`Here, the Board cannot assess under FRE 702 whether Mr. Wechselberger’s
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`opinion testimony is “based on sufficient facts or data,” is “the product of reliable
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`principles and methods,” or if Mr. Wechselberger “reliably applied the principles
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`10
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`and methods to the facts of the case” given that Mr. Wechselberger did not disclose
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`the standard against which he measured the quantum of evidence in arriving at his
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`opinions. Specifically, when Mr. Wechselberger opines that:
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`the challenged claims are
`In my opinion, all of
`unpatentable under 35 U.S.C. § 101 because they are
`directed to ineligible subject matter – in particular, the
`abstract idea of paying for and controlling access to
`content. The challenged claims are directed to the
`general concept of providing access to content based on
`payment or payment and rules (which the patent also
`refers to as DRM or digital rights management). This
`basic concept is not patentable and was well-known in
`the prior art.
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`Exhibit 1221 at ¶ 86, is he saying that he examined the evidence and a reasonable
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`mind would find sufficient evidence to support these findings (substantial
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`evidence); OR is he saying that he examined the evidence and it is more likely than
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`not that his findings are true (preponderance of the evidence). There is no basis for
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`the Board to know, because the Wechselberger Declaration is silent on the standard
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`he used. As such, the Wechselberger Declaration should be excluded because it
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`fails to meet the requirements of 37 CFR § 42.65(a) and FRE 702.
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`To the extent that Exhibit 1221 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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`Paragraphs 23-79 (and any other portion of the Wechselberger Declaration
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`that is directed to patentability under 35 U.S.C. §§ 102/103) are not relevant to the
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`
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`11
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`
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`instituted proceeding because the trial as instituted is limited to patentability under
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`35 U.S.C. § 101. FRE 401. Being irrelevant evidence, those paragraphs are not
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`admissible. FRE 402.
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`Paragraphs 80-113 should be excluded because they deal with the strictly
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`legal issue of statutory subject matter for which Mr. Wechselberger is not an
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`expert. Thus, those portions of the Wechselberger Declaration are inadmissible
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`under FRE 401 as not relevant, under FRE 602 as lacking foundation, and under
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`FRE 701 and 702 as providing legal opinions on which the lay witness is not
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`competent to testify. Being irrelevant evidence, those paragraphs are not
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`admissible. FRE 402.
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`Exhibit 1223 Lacks Authenticity
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`F.
`Patent Owner moves to exclude Exhibit 1223 (purported to be the
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`Declaration of Flora D. Elias-Mique In Support of Apple Inc.’s Petition for
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`Covered Business Method Patent Review) on authenticity grounds. Under Fed. R.
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`Evid. 901, “the proponent must produce evidence sufficient to support a finding
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`that the item is what the proponent claims it is.” In the Corrected Petition,
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`proponent Apple claims Exhibit 1223 is the “Declaration of Flora D. Elias-Mique
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`In Support of Apple Inc.’s Petition for Covered Business Method Patent Review”.
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`Corrected Petition at iii. In the CBM2015-00015 online docket description,
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`
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`12
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`
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`proponent Apple claims Exhibit 1223 is the “Declaration of Michael P. Duffey.”
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`On its face, Exhibit 1223 is neither of the items that proponent Apple claims it is.
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`IV. Conclusion
`For these reasons, Patent Owner Smartflash, LLC respectfully requests that
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`the Board exclude Exhibits 1202, 1203, 1204, 1205, 1206, 1207, 1210, 1212, 1213,
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`1214, 1215, 1216, 1217, 1218, 1219, 1220, 1221, 1223, 1227, 1228, 1229, 1231,
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`1232, and 1233.
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`Dated: October 1, 2015
`
`
`
`
`
`/ Michael R. Casey /
`
`Michael R. Casey
`Registration No. 40,294
`Davidson Berquist
`
`Jackson & Gowdey, LLP
`8300 Greensboro Drive
`Suite 500
`McLean, VA 22102
`Telephone: (571) 765-7705
`Fax: (571) 765-7200
`Email: mcasey@dbjg.com
`Attorney for Patent Owner
`
`
`
`
`
`13
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that this PATENT OWNER’S MOTION
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`TO EXCLUDE EVIDENCE, PATENT OWNER’S LIST OF EXHIBITS and
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`Exhibit 2099 in CBM2015-00015 were served today, by agreement of the parties
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`by emailing a copy to counsel for the Petitioner as follows:
`
`
`
`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 Drive
`Suite 500
`McLean, VA 22102
`Telephone: (571) 765-7705
`Fax: (571) 765-7200
`Email: mcasey@dbjg.com
`Attorney for Patent Owner
`
`
`
`Dated: October 1, 2015
`
`
`
`
`
`
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`14