`______________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`______________________
`
`APPLE INC.,
`Petitioner
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner
`______________________
`
`Case CBM2015-00015
`Patent 8,118,221 B2
`______________________
`
`Before the Honorable JENNIFER S. BISK, RAMA G. ELLURU, JEREMY M.
`PLENZLER, and MATTHEW R. CLEMENTS, Administrative Patent Judges.
`
`
`PETITIONER APPLE INC.’S OPPOSITION TO
`PATENT OWNER’S MOTION TO EXCLUDE UNDER 37 C.F.R. § 42.64(c)
`
`
`
`
`
`
`
`
`CBM2015-00015
`Patent 8,118,221 B2
`
`
`
`
`
`TABLE OF CONTENTS
`
`
`The Board Should Not Exclude Exhibit 1202 ................................................. 2
`I.
`The Board Should Not Exclude Exs. 1203-04 or 1227-29 .............................. 2
`II.
`III. The Board Should Not Exclude Exs. 1205-07, 1210, 1212-20,
`Or 1231-33 ....................................................................................................... 3
`IV. The Board Should Not Exclude Exhibit 1221 ................................................. 5
`V.
`The Board Should Not Exclude Exhibit 1223 ................................................. 8
`
`
`
`
`
`
`CBM2015-00015
`Patent 8,118,221 B2
`
`
`
`
`
`
`In response to Patent Owner’s (“PO”) Motion to Exclude (“Mot.”, Pap. 39),
`
`Petitioner respectfully submits that the Board, sitting as a non-jury tribunal with
`
`administrative expertise, is well-positioned to determine and assign appropriate
`
`weight to the evidence presented here, without resorting to formal exclusion that
`
`might later be held reversible error. See, e.g., S.E.C. v. Guenthner, 395 F. Supp. 2d
`
`835, 842 n.3 (D. Neb. 2005); Builders Steel Co. v. Comm’r of Internal Revenue,
`
`179 F.2d 377, 379 (8th Cir. 1950) (vacating Tax Court decision for exclusion of
`
`competent, material evidence); Donnelly Garment Co. v. Nat’l Labor Relations
`
`Bd., 123 F.2d 215, 224 (8th Cir. 1941) (NLRB’s refusal to receive testimonial evi-
`
`dence was denial of due process). See also, e.g., Samuel H. Moss, Inc. v. F.T.C.,
`
`148 F.2d 378, 380 (2d Cir. 1945), cert. denied, 326 U.S. 734 (1945) (“Even in
`
`criminal trials to a jury it is better, nine times out of ten, to admit, than to exclude, .
`
`. . and in such proceedings as these the only conceivable interest that can suffer by
`
`admitting any evidence is the time lost, which is seldom as much as that inevitably
`
`lost by idle bickering about irrelevancy or incompetence.”). But even under strict
`
`application of the Rules of Evidence, cf. 77 Fed. Reg. 48,612, 48,616 (Aug. 14,
`
`2012) (“42.5(a) and (b) permit administrative patent judges wide latitude in admin-
`
`istering the proceedings to balance the ideal of precise rules against the need for
`
`flexibility to achieve reasonably fast, inexpensive, and fair proceedings”), Petition-
`
`er’s evidence here is entirely proper while PO’s objections are baseless.
`1
`
`
`
`
`
`CBM2015-00015
`Patent 8,118,221 B2
`The Board Should Not Exclude Exhibit 1202
`I.
`
`
`
`
`
`Petitioner did not rely on Ex. 1202 for “evidence of the content” of the ’221
`
`patent (cf. Mot. 1), but rather to show PO’s own characterization of the subject
`
`matter of the ’221 patent supports Petitioner’s contention, and the Board’s conclu-
`
`sion, that the ’221 patent relates to a financial activity or transaction and is thus
`
`subject to the Board’s review as a covered business method patent. See Pap. 9 at
`
`10-11. PO’s characterization of the ’221 patent in another proceeding is not found
`
`in the patent itself; thus, Ex. 1202 is not cumulative of the ’221 patent, and FRE
`
`1004 is inapplicable. Indeed, as PO admits, the Board declined to exclude the
`
`same exhibit in another proceeding on the same patent because the Board found
`
`“[Patent Owner’s] characterization of the ’221 patent in prior proceedings are rele-
`
`vant to the credibility of its characterization of the ’221 patent in this proceeding.”
`
`Mot. 3 (citing CBM2014-00102, Pap. 52 at 36); see also CBM2014-00106, Pap. 52
`
`at 25; CBM2014-00108, Pap. 50 at 19; CBM2014-00112, Pap. 48 at 24. Contrary
`
`to PO’s claim that its characterization of the ’221 patent is not at issue here (Mot.
`
`3), PO disputed the financial nature of the ’221 patent here, see Pap. 19 at 5-10,
`
`and its highly relevant admission to the contrary should not be excluded.
`
`II.
`
`The Board Should Not Exclude Exs. 1203-04 or 1227-29
`
`PO’s assertion that Exs. 1203-04 and 1227-29 are not cited in the Wechsel-
`
`berger Declaration (Mot. 3-4) is simply wrong: all were cited as “Materials Re-
`
`
`
`2
`
`
`
`CBM2015-00015
`Patent 8,118,221 B2
`viewed and Relied Upon,” see Ex. 1221, App. C, and properly filed with the Peti-
`
`
`
`
`
`tion. See 37 C.F.R. § 42.6(c). (Indeed, Petitioner respectfully submits PO would
`
`now be objecting if Petitioner had failed to provide these cited exhibits.) PO argues
`
`that “mere review” of an exhibit by an expert in reaching his opinions does not
`
`render an exhibit relevant or admissible because FRE 703 allows experts to rely on
`
`facts or data that may not be admissible. Mot. 4. But that FRE 703 allows experts
`
`to rely on material that may not be admissible does not render all material relied on
`
`by experts irrelevant or inadmissible. Indeed, as PO admits, in another proceeding
`
`on the same patent, the Board denied PO’s request to exclude similar exhibits find-
`
`ing that “[b]ecause Mr. Wechselberger attests that he reviewed these exhibits in
`
`reaching the opinions he expressed in this case, Patent Owner has not shown that
`
`they are irrelevant under FRE 401 and 402.” Mot. 4 (citing CBM2014-00102, Pap.
`
`52 at 37); see also CBM2014-00106, Pap. 52 at 25; CBM2014-00108, Pap. 50 at
`
`19-20; CBM2014-00112, Pap. 48 at 24. To the extent PO’s objection is based on
`
`imaginings that Petitioner will advance at oral hearing arguments about these doc-
`
`uments not presented in previous papers, this is baseless–Petitioner intends to
`
`comply fully with the Board’s rules (e.g., Trial Practice Guide, 77 Fed. Reg.
`
`48,756, 48,768 (Aug. 14, 2012)).
`
`III. The Board Should Not Exclude Exs. 1205-07, 1210, 1212-20, Or 1231-33
`
`Contrary to PO’s assertions, Exs. 1205-07, 1212, 1215, 1217-18, 1220, and
`
`
`
`3
`
`
`
`CBM2015-00015
`Patent 8,118,221 B2
`1231-33 (“Prior Art Exhibits”) are certainly relevant to the Board’s § 101 analysis.
`
`
`
`
`
`More specifically, such evidence is relevant to Mayo’s two-step inquiry for patent
`
`eligibility to determine, for example, whether the claims contain an “inventive
`
`concept” or merely recite “well-understood, routine, conventional activit[ies] pre-
`
`viously known to the industry.” Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct.
`
`2347, 2357, 2359 (2014) (internal quotations omitted); see e.g., YYZ, LLC v.
`
`Hewlett-Packard Co., No. 13-136-SLR, 2015 WL 5886176, at *8 (D. Del. Oct. 8,
`
`2015) (“Although the § 101 inquiry is focused on the claim language, extrinsic ev-
`
`idence [, such as prior art,] may be helpful in terms of understanding the state of
`
`the art . . . , and whether the problem to which the patent was directed is solved us-
`
`ing computer technology in unconventional ways.”); cf. Versata Dev. Grp., Inc. v.
`
`SAP Am., Inc., 793 F.3d 1306, 1334, 1336 (Fed. Cir. 2015) (affirming Board’s reli-
`
`ance on petitioner’s expert in determining claimed steps were well-known, routine,
`
`and conventional and Board’s finding that “claims at issue do not recite any im-
`
`provement in computer technology”).1 Both the Petition and the Wechselberger
`
`Declaration describe Prior Art Exhibits as evidence of that knowledge. See, e.g.,
`
`Pap. 9 at 4-8 (Overview of Field of the Claimed Invention); Ex. 1221 ¶¶ 27-49
`
`(State of the Art).
`
`Moreover, the Petition and Wechselberger Declaration specifically rely on
`
`1 All emphasis herein is added unless otherwise indicated.
`
`
`
`4
`
`
`
`CBM2015-00015
`Patent 8,118,221 B2
`Prior Art Exhibits to show either that (1) the basic concept of controlling access
`
`
`
`
`
`based on payment—to which the challenged claims are directed—was well-known
`
`in the prior art, or (2) the elements disclosed by the challenged claims were well-
`
`known, routine, and conventional. See, e.g., Pap. 9 at 30-32 (analogizing chal-
`
`lenged claims to those held ineligible in Alice); Ex. 1221 ¶¶ 87 (citing “State of the
`
`Art” discussion and Ex. 1231), 92-96 (citing Exs. 1205-06, 1212-14, 1216, 1231).
`
`The Prior Art Exhibits are unquestionably relevant to the § 101 analysis; there is
`
`no basis to exclude them.
`
`PO’s assertion that Exs. 1210, 1213-14, 1216, and 1219 are irrelevant is sim-
`
`ilarly meritless. As with the other Prior Art Exhibits, these exhibits are relevant to
`
`the Board’s § 101 analysis because they provide further evidence of the state of the
`
`art. While the Board did not institute review based on grounds calling out Exs.
`
`1210, 1213-14, 1216, and 1219, they nonetheless establish the state of the art and
`
`provide context for the § 101 inquiry, and the Wechselberger Declaration specifi-
`
`cally relies on them for this purpose. See Ex. 1221 ¶¶ 33, 41, 42, 46 (“State of the
`
`Art” discussion), 87 (citing “State of the Art” discussion in § 101 analysis).
`
`IV. The Board Should Not Exclude Exhibit 1221
`
`Despite the Board’s rejection on multiple occasions of PO’s argument that
`
`the Wechselberger Declaration should be disregarded for not reciting the eviden-
`
`tiary standard, PO reargues it again here. Mot. 9-11; CBM2014-00102, Pap. 8 at 4
`
`
`
`5
`
`
`
`CBM2015-00015
`Patent 8,118,221 B2
`n.8; CBM2014-00102, Pap. 52 at 39; see also CBM2014-00106, Pap. 8 at 4 n.11;
`
`
`
`
`
`CBM2014-00108, Pap. 8 at 16 n.5; CBM2014-00112, Pap. 7 at 4 n.9; CBM2014-
`
`00106, Pap. 52 at 27-28; CBM2014-00108, Pap. 50 at 21-22; CBM2014-00112,
`
`Pap. 48 at 26. But, as the Board properly found, experts, like Mr. Wechselberger,
`
`are “not required to recite the ‘preponderance of the evidence’ standard expressly
`
`in order for the expert testimony to be accorded weight, much less admissibility.”
`
`CBM2014-00102, Pap. 52 at 39; see also CBM2014-00106, Pap. 52 at 27;
`
`CBM2014-00108, Pap. 50 at 21-22; CBM2014-00112, Pap. 48 at 26. “Rather, it is
`
`within [the Board’s] discretion to assign the appropriate weight to be accorded to
`
`evidence based on whether the expert testimony discloses the underlying facts or
`
`data on which the opinion is based.” See IPR2013-00172, Pap. 50 at 42. Further,
`
`the Wechselberger Declaration sufficiently “disclose[s] the underlying facts or data
`
`on which the opinion is based,” as required by 37 C.F.R. § 42.65(a), and cites spe-
`
`cific evidence supporting each of the opinions.
`
`PO also seeks to exclude the portions of the Wechselberger Declaration that
`
`identify the level of skill of a POSITA, disclose Mr. Wechselberger’s assumed
`
`claim constructions, cite prior art to describe the state of the art and provide con-
`
`text for his § 101 opinions, and “any other portion . . . that is directed to patentabil-
`
`ity under 35 U.S.C. §§ 102/103.” Mot. 11-12 (identifying paragraphs 23-79).
`
`First, as detailed in § III, supra, the Wechselberger Declaration’s description of the
`
`
`
`6
`
`
`
`CBM2015-00015
`Patent 8,118,221 B2
`art at the relevant time is clearly relevant to the § 101 inquiry. For the same reasons
`
`
`
`
`
`the Prior Art Exhibits and Exs. 1210, 1213-14, 1216, and 1219 are relevant, expert
`
`analyses of those exhibits are relevant under FRE 401 and should not be excluded.
`
`Further, the level of skill of a POSITA is relevant in determining whether claim el-
`
`ements would be considered well-known, routine, and conventional; and claim
`
`construction is relevant because “the determination of patent eligibility requires a
`
`full understanding of the basic character of the claimed subject matter.” See, e.g.,
`
`Bancorp Servs., LLC v. Sun Life Assurance Co. of Can., 687 F.3d 1266, 1273-74
`
`(Fed. Cir. 2012). PO provides no argument or support to the contrary.
`
`PO further seeks to exclude the portions of the Wechselberger Declaration
`
`that provide Mr. Wechselberger’s opinions on the patent eligibility of the chal-
`
`lenged claims, arguing that § 101 is a “strictly legal issue . . . for which Mr. Wech-
`
`selberger is not an expert.” Mot. 12 (identifying paragraphs 80-113). But PO’s ar-
`
`gument ignores that “[p]atent eligibility under § 101 presents an issue of law . . . .
`
`[that] may contain underlying factual issues.” Accenture Global Servs., GmbH v.
`
`Guidewire Software, Inc., 728 F.3d 1336, 1340-41 (Fed. Cir. 2013); see also Ar-
`
`rhythmia Research Tech., Inc. v. Corazonix Corp., 958 F.2d 1053, 1055-56 (Fed.
`
`Cir. 1992) (“[D]etermination of [statutory subject matter] may require findings of
`
`underlying facts specific to the particular subject matter and its mode of claim-
`
`ing.”); cf. Versata, 793 F.3d at 1334 (affirming Board’s reliance on petitioner’s
`
`
`
`7
`
`
`
`CBM2015-00015
`Patent 8,118,221 B2
`expert over patent owner’s expert in determining claimed steps were well-known,
`
`
`
`
`
`routine, and conventional). And, there is no dispute that Mr. Wechselberger is
`
`competent to opine on the factual issues. Cf. Mot. 12. Moreover, there is no basis
`
`for PO’s objections to Mr. Wechselberger’s expert testimony under FRE 602, as
`
`the rule plainly states it “does not apply to a witness’s expert testimony under Rule
`
`703.” Thus, PO’s FRE 602 objection to paragraphs 80-113 of the Wechselberger
`
`Declaration should be rejected for this additional, independent reason.
`
`V.
`
`The Board Should Not Exclude Exhibit 1223
`
`Although PO seeks to exclude Ex. 1223—a declaration supporting the au-
`
`thenticity of other submitted exhibits—on authenticity grounds, PO does not dis-
`
`pute the authenticity of any of the exhibits for which Ex. 1223 provides support.
`
`Instead, PO attempts to exploit an obvious typographical error. While Petitioner’s
`
`Exhibit List and docket description provide the incorrect name of Ex. 1223’s de-
`
`clarant (Mot. 12-13), it is clear from the face of Ex. 1223 that it is the Declaration
`
`of Megan F. Raymond. See Ex. 1223 at 1. Indeed, the signature block on the last
`
`page of Ex. 1223 further supports that the declarant for Ex. 1223 is Ms. Raymond.
`
`Id. at 4. PO cannot credibly argue any legitimate authenticity issue with Ex. 1223,
`
`and it should not be excluded.
`
`October 15, 2015
`
`
`
`
`
`
`
`
`
`
`Respectfully submitted,
`By /J. Steven Baughman/
`J. Steven Baughman, Lead Counsel
`
`8
`
`
`
`CBM2015-00015
`Patent 8,118,221 B2
`
`
`
`
`
`
`
`CERTIFICATE OF SERVICE
`
`The undersigned hereby certifies that a copy of the foregoing PETITIONER
`
`APPLE INC.’S OPPOSITION TO PATENT OWNER’S MOTION TO EX-
`
`CLUDE was served on October 15, 2015, to the following Counsel for Patent
`
`Owner via e-mail, pursuant to the parties’ agreement concerning service:
`
`Michael R. Casey
`J. Scott Davidson
`DAVIDSON BERQUIST JACKSON & GOWDEY LLP
`8300 Greensboro Drive, Suite 500
`McLean, VA 22102
`Telephone: (571) 765-7700
`Facsimile: (571) 765-7200
`mcasey@dbjg.com
`jsd@dbjg.com
`docket@dbjg.com
`
`Attorneys for Patent Owner Smartflash LLC
`
`/s/ Sharon Lee
`Sharon Lee
`
`
`
`ROPES & GRAY LLP
`
`9