`________________________
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`________________________
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`________________________
`Case CBM2015-00016
`Patent 8,033,458 B2
`________________________
`
`PATENT OWNER’S MOTION TO EXCLUDE EVIDENCE
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`TABLE OF CONTENTS
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`B.
`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
`Exhibit 1208 is Uncited and thus Irrelevant .......................................... 3
`Exhibits 1206, 1207, 1209, 1211, 1212, 1216, 1217, 1219, 1226, and
`1227 are Not Alleged to be Invalidating Prior Art and thus are
`Irrelevant ............................................................................................... 5
`Exhibits 1203, 1205, 1213, 1214, 1215, and 1218 are not the Basis for
`any Invalidity Grounds for Which CBM2015-00016 was Initiated and
`thus are Irrelevant .................................................................................. 6
`Exhibit 1220 Lacks Foundation, is Unreliable, and Relies on
`Irrelevant Exhibits ................................................................................. 8
`IV. Conclusion ..................................................................................................... 13
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`
`D.
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`E.
`
`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, 1205, 1206, 1207, 1208, 1209, 1211, 1212,
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`1213, 1214, 1215, 1216, 1217, 1218, 1219, 1220, 1226 and 1227.
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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 CBM2015-00016 Exhibits
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`1202, 1203, 1205, 1206, 1207, 1208, 1209, 1211, 1212, 1213, 1214, 1215, 1216,
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`1217, 1218, 1219, 1220, 1226 and 1227 by serving Patent Owner’s Objections to
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`Admissibility of Evidence on April 24, 2015. Exhibit 2100.
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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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`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 8,033,458 (“the ‘458 Patent”) as
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`1
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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 12 (citing Ex. 1202 ¶ 17). Petitioner
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`does not need to cite to Exhibit 1202 to show the subject matter of the ‘458 Patent,
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`however, because Exhibit 1201, the actual ‘458 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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`‘458 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 ‘458 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 ‘458 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 1220, (“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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`action more or less probable than it would be without Exhibit 1202. As such,
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`2
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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 CBM2014-00106, the Board declined to exclude the same
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`exhibit because “[Patent Owner’s] characterization of the ‘458 patent in prior
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`proceedings are (sic) relevant to the credibility of its characterization of the ‘458
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`patent in this proceeding.” CBM2014-00106, Paper 52 at 25. 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 ‘458 Patent in this proceeding – that
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`representative claim 1 “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. Exhibit 1208 is Uncited and thus Irrelevant
`Neither the Corrected Petition, nor the Wechselberger Declaration, nor the
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`PTAB Decision cite to Exhibit 1208 (Russell Housley and Jan Dolphin, “Metering:
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`A Pre-pay Technique,” Storage and Retrieval for Image and Video Databases V,
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`Conference Volume 3022, 527 (January 15, 1997))(“the Uncited Exhibit”). The
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`Uncited Exhibit does not appear to make a fact of consequence in determining this
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`3
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`action more or less probable than it would be without the Uncited Exhibit. As
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`such, the Uncited Exhibit does not pass the test for relevant evidence under FRE
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`401 and is not admissible per FRE 402.
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`In CBM2014-00106 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.” CBM2014-00106, Paper
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`52 at 25. The Board’s analysis is inapplicable here because Exhibit 1208 is not
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`listed among the items Mr. Wechselberger reviewed. Exhibit 1220 at p. 70-71.
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`Moreover, the Board’s conclusion in CBM2014-00106 that mere review by an
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`expert in reaching an opinion renders an exhibit relevant under FRE 401 and thus
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`admissible under FRE 402 is overly broad under the Federal Rules of Evidence.
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`Underlying facts and data need not themselves be admissible for an expert to rely
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`on them in formulating an admissible opinion. FRE 703 (“An expert may base an
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`opinion on facts or data in the case that the expert has been made aware of or
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`personally observed. If experts in the particular field would reasonably rely on
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`those kinds of facts or data in forming an opinion on the subject, they need not be
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`admissible for the opinion to be admitted”). But nothing in the Federal Rules of
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`Evidence supports that mere review of an exhibit by an expert renders the exhibit
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`relevant or admissible. The Uncited Exhibit should be excluded.
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`4
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`C. Exhibits 1206, 1207, 1209, 1211, 1212, 1216, 1217, 1219, 1226, and 1227
`are Not Alleged to be Invalidating Prior Art and thus are Irrelevant
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`Petitioner cites Exhibit 1206 (U.S. Patent No. 4,999,806)(“Chernow”)
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`(Corrected Petition at 6, 7, 15, 17, 33, and 34), Exhibit 1207 (U.S. Patent No.
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`5,675,734)(“Hair”) (Corrected Petition at 4, 15, 17, 33, and 34), Exhibit 1209 (U.S.
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`Patent No. 4,878,245)(“Bradley”) (Corrected Petition at 15, 17, 27), Exhibit 1211
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`(U.S. Patent No. 4,337,483)(“Guillou”) (Corrected Petition at 27), Exhibit 1212
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`(U.S. Patent No. 5,103,392)(“Mori”) (Corrected Petition at 7, 33, and 34), Exhibit
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`1216 (European Patent Application, Publication No. EP0809221A2)(“Poggio”)
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`(Corrected Petition at 7, 16, 33, and 34), Exhibit 1217 (PCT Application
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`Publication No. WO 99/43136)(“Rydbeck”) (Corrected Petition at 9 and 30),
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`Exhibit 1219 (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 8), and Exhibit 1226 (U.S. Patent No.
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`7,725,375)(“Shepherd”) (Corrected Petition at 32), Exhibit 1227 (International
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`Publication No. WO 95/34857)(“Smith”) (Wechselberger Declaration ¶ 44).
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`Although cited, neither the Corrected Petition nor the Wechselberger Declaration
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`assert that 1206 (Chernow), Exhibit 1207 (Hair), Exhibit 1209 (Bradley), Exhibit
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`1211 (Guillou), Exhibit 1212 (Mori), Exhibit 1216 (Poggio), Exhibit 1217
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`(Rydbeck), Exhibit 1219 (von Faber), Exhibit 1226 (Shepherd) or Exhibit 1227
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`(Smith) (“the Unasserted Exhibits”) are potentially invalidating prior art, either
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`5
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`alone or in combination with any other reference. The PTAB Decision did not
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`base any of its analysis on the Unasserted Exhibits. Thus, the Unasserted Exhibits
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`do not appear to make a fact of consequence in determining this action more or less
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`probable than it would be without the Unasserted Exhibits. As such, the
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`Unasserted Exhibits do not pass the test for relevant evidence under FRE 401 and
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`are not admissible per FRE 402.
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`In CBM2014-00106 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.” CBM2014-00106,
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`Paper 52 at 26 (emphasis added). The Board’s reasoning in CBM2014-00106 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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`D. Exhibits 1203, 1205, 1213, 1214, 1215, and 1218 are not the Basis for any
`Invalidity Grounds for Which CBM2015-00016 was Initiated and thus
`are Irrelevant
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`Petitioner cites Exhibit 1203 (U.S. Patent No. 5,925,127)(“Ahmad”), Exhibit
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`1205 (U.S. Patent No. 5,940,805)(“Kopp”), Exhibit 1213 (U.S. Patent No.
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`6
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`5,530,235)(“Stefik ‘235”), Exhibit 1214 (U.S. Patent No. 5,629,980)(“Stefik
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`‘980”), Exhibit 1215 (U.S. Patent No. 5,915,019)(“Ginter”), and Exhibit 1218 (JP
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`Publication No. H11-164058A (translation))(“Sato”) (“the Alleged Prior Art
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`Exhibits”) as alleged invalidating prior art. Corrected Petition at 19. The PTAB
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`Decision, however, did not adopt any of the proposed invalidity grounds based on
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`Exhibit 1203 (Ahmad), Exhibit 1205 (Kopp), Exhibit 1213 (Stefik ‘235), Exhibit
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`1214 (Stefik ‘980), Exhibit 1215 (Ginter), or Exhibit 1218 (Sato) (“the Alleged
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`Prior Art Exhibits”). Compare, PTAB Decision at 3 (table summarizing asserted
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`grounds for challenging patentability under § 103), with PTAB Decision at 26
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`(instituting covered business method patent review on § 101 and § 112 ¶ 2 grounds
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`only). Thus, the Alleged Prior Art Exhibits fail the test for relevant evidence
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`because nothing in the Alleged Prior Art Exhibits makes a fact of consequence in
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`determining this action more or less probable than it would be without the Alleged
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`Prior Art Exhibits. FRE 401(b). Being irrelevant evidence, the Alleged Prior Art
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`Exhibits are not admissible. FRE 402.
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`In CBM2014-00106 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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`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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`7
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`402.” CBM2014-00106, Paper 52 at 26 (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 1220 Lacks Foundation, is Unreliable, and Relies on
`Irrelevant Exhibits
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`Petitioner’s citations to Exhibit 1220 (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; 94 citations in its 80-page Corrected Petition. Patent Owner moves to
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`exclude Exhibit 1220 on grounds that it lacks foundation and is unreliable because
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`it fails to meet the foundation and reliability requirements of 37 CFR § 42.65(a)
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`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
`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
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`8
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`FRE 702.
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`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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`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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`“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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`CBM2014-00106, Paper 8 at 4, and Vibrant Media v. General Electric Company,
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`9
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`
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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 21. 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 21 (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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`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
`10
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`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 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 1220 at ¶ 82, 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 1220 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 28-71 (and any other portion of the Wechselberger Declaration
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`that is directed to patentability under 35 U.S.C. § 103) are not relevant to the
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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 and § 112 ¶2. FRE 401. Being irrelevant evidence, those
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`paragraphs are not admissible. FRE 402.
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`11
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`Paragraphs 24-26 and 72-75 should be excluded as unreliable and lacking
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`foundation. These paragraphs deal with the issue of indefiniteness and the
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`Wechselberger Declaration does not prove that Mr. Wechselberger is an expert
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`whose testimony is relevant to the issue. While Mr. Wechselberger may opine that
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`he was “one of ordinary skill in the art,” he does not, however, state that he is an
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`expert in the types of methods and systems defined by the challenged claims nor
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`does he provide proof that he is an expert. Thus, Mr. Wechselberger has not
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`proven that his opinions are proper expert opinions upon which the PTAB can rely
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`as opposed to inadmissible lay opinions. FRE 701 and 702. Thus, those portions
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`of the Wechselberger Declaration should be excluded under FRE 602 as lacking
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`foundation.
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`Paragraphs 76-105 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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`12
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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, 1205, 1206, 1207, 1208, 1209, 1211, 1212,
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`1213, 1214, 1215, 1216, 1217, 1218, 1219, 1220, 1226 and 1227.
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`Dated: October 1, 2015
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`
`
`
`
`/ 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
`
`
`
`
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`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 2100 in CBM2015-00016 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