UNITED STATES PATENT AND TRADEMARK OFFICE
`________________________
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`________________________
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`________________________
`Case CBM2015-00018
`Patent 7,942,317 B2
`________________________
`
`PATENT OWNER’S MOTION TO EXCLUDE EVIDENCE
`
`
`
`
`
`
`
`
`
`
`________________________
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`________________________
`
`APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`________________________
`Case CBM2015-00018
`Patent 7,942,317 B2
`________________________
`
`PATENT OWNER’S MOTION TO EXCLUDE EVIDENCE
`
`
`
`
`
`
`
`
`
`
`
`TABLE OF CONTENTS
`
`
`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, 1205, 1206, 1209, 1210, 1211, 1212, 1213,
`1214, 1215, 1216, 1219, and 1221 are Not Alleged to be Invalidating
`Prior Art and thus are Irrelevant ............................................................ 3
`Exhibit 1217 Lacks Foundation, is Unreliable, and Relies on
`Irrelevant Exhibits ................................................................................. 5
`IV. Conclusion ..................................................................................................... 10
`
`
`B.
`
`C.
`
`i
`
`
`
`
`
`
`I.
`
`Statement of Precise Relief Requested
`
`Pursuant to 37 C.F.R. §§ 42.62 and 42.64(c), Patent Owner Smartflash LLC
`
`moves to exclude Exhibits 1202, 1203, 1204, 1205, 1206, 1209, 1210, 1211, 1212,
`
`1213, 1214, 1215, 1216, 1217, 1219, and 1221.
`
`II.
`
`Patent Owner Smartflash Timely Objected to Petitioner’s Exhibits
`
`Patent Owner Smartflash LLC timely objected to CBM2015-00018 Exhibits
`
`1202, 1203, 1204, 1205, 1206, 1209, 1210, 1211, 1212, 1213, 1214, 1215, 1216,
`
`1217, 1219, and 1221 by serving Patent Owner’s Objections to Admissibility of
`
`Evidence on April 24, 2015. Exhibit 2102.
`
`III. Argument
`Pursuant to 37 C.F.R. § 42.64(c), the Federal Rules of Evidence apply in
`
`Covered Business Method Review proceedings.
`
`A. Exhibit 1202 is Inadmissible Other Evidence of the Content of a
`Writing, Irrelevant, and Cumulative
`
`Patent Owner moves to exclude Exhibit 1202, (Plaintiff’s First Amended
`
`Complaint) on grounds that it is: inadmissible other evidence of the content of a
`
`writing under FRE 1004; inadmissible under FRE 402 because it fails the test for
`
`relevance set forth in FRE 401; and, even if relevant, is cumulative evidence under
`
`FRE 403.
`
`Petitioner cites Exhibit 1202 for the sole purpose of showing Patent Owner’s
`
`description of the subject matter of U.S. Patent 7,942,317 (“the ‘317 Patent”) as
`
`
`
`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
`
`network … that serves data and manages access to data by, for example, validating
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`payment information.” Petition at 13 (citing Ex. 1202 ¶ 17). Petitioner does not
`
`need to cite to Exhibit 1202 to show the subject matter of the ‘317 Patent, however,
`
`because Exhibit 1201, the actual ‘317 Patent, is in evidence without objection.
`
`Under FRE 1004, other evidence of the content of a writing (here the ‘317 Patent)
`
`is admissible if the original is lost, cannot be obtained, has not been produced, or
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`the writing is not closely related to a controlling issue. None of those conditions
`
`apply here, given that the ‘317 Patent is in evidence and is the subject of the trial.
`
`Patent Owner’s description of the ‘317 Patent in Exhibit 1202 is not relevant
`
`to any of the issues here. Petitioner’s expert, Anthony J. Wechselberger’s
`
`Declaration, Exhibit 1217, (“Wechselberger Declaration”) does not cite Exhibit
`
`1202. The Board’s April 10, 2015 Decision – Institution of Covered Business
`
`Method Patent Review 37 C.F.R. § 42.208 (“PTAB Decision”), Paper 15, does not
`
`cite Exhibit 1202. Exhibit 1202 does not appear to make a fact of consequence in
`
`determining this action more or less probable than it would be without Exhibit
`
`1202. As such, Exhibit 1202 does not pass the test for relevant evidence under
`
`FRE 401 and is not admissible per FRE 402.
`
`
`
`2
`
`
`
`
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`Even if Exhibit 1202 was found to be relevant, it should also be excluded
`
`under FRE 403 as cumulative of Exhibit 1201.
`
`In the related CBM2014-00112, the Board declined to exclude the same
`
`exhibit because “[Patent Owner’s] characterization of the ‘317 patent in prior
`
`proceedings are (sic) relevant to the credibility of its characterization of the ‘317
`
`patent in this proceeding.” CBM2014-00112, Paper 48 at 24. There is no
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`credibility issue here, however, that makes Exhibit 1202 relevant. There is nothing
`
`about Patent Owner’s characterization of the ‘317 Patent in this proceeding – that
`
`representative claim 18 “does not recite a ‘financial product or service’” in the way
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`Congress intended (Patent Owner’s Preliminary Response, Paper 11 at 4-8) – 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.
`
`B. Exhibits 1203, 1204, 1205, 1206, 1209, 1210, 1211, 1212, 1213, 1214,
`1215, 1216, 1219, and 1221 are Not Alleged to be Invalidating Prior Art
`and thus are Irrelevant
`
`Petitioner cites Exhibit 1203 (U.S. Patent No. 5,940,805)(“Kopp”)
`
`(Wechselberger Declaration ¶ 53), Exhibit 1204 (U.S. Patent No.
`
`4,999,806)(“Chernow”) (Petition at 5, 16, and 18), Exhibit 1205 (U.S. Patent No.
`
`5,675,734)(“Hair”) (Petition at 16 and 18), Exhibit 1206 (U.S. Patent No.
`
`4,337,483)(“Guillou”) (Wechselberger Declaration ¶ 67), Exhibit 1209 (U.S.
`
`Patent No. 5,103,392)(“Mori”) (Petition at 5), Exhibit 1210 (U.S. Patent No.
`
`
`
`3
`
`
`
`
`
`5,530,235)(“Stefik ‘235”) (Petition at 6), Exhibit 1211 (U.S. Patent No.
`
`5,629,980)(“Stefik ‘980”) (Petition at 6 and 7), Exhibit 1212 (U.S. Patent No.
`
`5,915,019)(“Ginter”) (Petition at 8), Exhibit 1213 (European Patent Application,
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`Publication No. EP0809221A2)(“Poggio”) (Petition at 7, 17, and 18), Exhibit 1214
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`(PCT Application Publication No. WO 99/43136)(“Rydbeck”) (Petition at 9),
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`Exhibit 1215 (JP Publication No. H11-164058A (translation))(“Sato”) (Petition at
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`10), Exhibit 1216 (Eberhard von Faber, Robert Hammelrath, and Franz-Peter
`
`Heider, “The Secure Distribution of Digital Contents,” IEEE (1997))(“von Faber”)
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`(Petition at 7), Exhibit 1219 (U.S. Patent No. 4,878,245)(“Bradley”) (Petition at 16
`
`and 18), and Exhibit 1221 (U.S. Patent No. 5,925,127)(“Ahmad”) (Wechselberger
`
`Declaration ¶ 52). Although cited, neither the Petition nor the Wechselberger
`
`Declaration assert that Exhibit 1203 (Kopp), Exhibit 1204 (Chernow), Exhibit
`
`1205 (Hair), Exhibit 1206 (Guillou), Exhibit 1209 (Mori), Exhibit 1210 (Stefik
`
`‘235), Exhibit 1211 (Stefik ‘980), Exhibit 1212 (Ginter), Exhibit 1213 (Poggio),
`
`Exhibit 1214 (Rydbeck), Exhibit 1215 (Sato), Exhibit 1216 (von Faber), Exhibit
`
`1219 (Bradley), or Exhibit 1221 (Ahmad) (“the Unasserted Exhibits”) are
`
`potentially invalidating prior art, either alone or in combination with any other
`
`reference. The PTAB Decision did not base any of its analysis on the Unasserted
`
`Exhibits. Thus, the Unasserted Exhibits do not appear to make a fact of
`
`consequence in determining this action more or less probable than it would be
`
`
`
`4
`
`
`
`
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`without the Unasserted Exhibits. As such, the Unasserted Exhibits do not pass the
`
`test for relevant evidence under FRE 401 and are not admissible per FRE 402.
`
`In CBM2014-00112 the Board declined to exclude similarly unasserted
`
`exhibits, finding “[b]ecause these exhibits are evidence relied upon by Petitioner to
`
`support its assertions with respect to the state of the art and to knowledge of a
`
`person of ordinary skill in the art, which are relevant to obviousness, we are not
`
`persuaded that they are irrelevant under FRE 401 and 402.” CBM2014-00112,
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`Paper 48 at 25 (emphasis added). The Board’s reasoning in CBM2014-00112 is
`
`inapplicable here, where review was sought and instituted on § 101 statutory
`
`subject matter grounds only. Petitioner did not assert § 103 obviousness grounds
`
`(Petition, Paper 1 at 1), making the state of the art and the knowledge of a person
`
`of ordinary skill in the art irrelevant. As such, the Unasserted Exhibits should be
`
`excluded.
`
`C. Exhibit 1217 Lacks Foundation, is Unreliable, and Relies on
`Irrelevant Exhibits
`
`Petitioner cites Exhibit 1217 (Declaration of Anthony J. Wechselberger In
`
`Support of Apple Inc.’s Petition for Covered Business Method Patent Review
`
`(“Wechselberger Declaration”)) on pages 3, 5-9, 11, 16-18, 25, 26, 28, and 30 of
`
`the Petition. Patent Owner moves to exclude Exhibit 1217 on grounds that it lacks
`
`foundation and is unreliable because it fails to meet the foundation and reliability
`
`requirements of 37 CFR § 42.65(a) and FRE 702.
`
`
`
`5
`
`
`
`
`
`
`
`37 CFR § 42.65(a) provides:
`
`§ 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.
`
`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 Wechselberger Declaration because it
`
`does not disclose the underlying facts or data on which the opinions contained are
`
`based as required by 37 CFR § 42.65(a), given that it does not state the relative
`
`evidentiary weight (e.g., substantial evidence versus preponderance of the
`
`evidence) used by Mr. Wechselberger in arriving at his conclusions. “A finding is
`
`supported by substantial evidence if a reasonable mind might accept the evidence
`
`
`
`6
`
`
`
`
`
`to support the finding.” Q. I. Press Controls, B.V. v. Lee, 752 F.3d 1371, 1378-
`
`1379 (Fed. Cir. 2014)(citing Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.
`
`Ct. 206, 83 L. Ed. 126 (1938)). Proof by a “preponderance of the evidence” means
`
`“that it is more likely than not.” See, O2 Micro Int'l Ltd. v. Beyond Innovation
`
`Tech. Co., 449 Fed. Appx. 923, 928 (Fed. Cir. 2011).
`
`Petitioner has cited, and likely will cite again, Apple Inc. v. Smartflash LLC,
`
`CBM2014-00112, Paper 6 at 18, and Vibrant Media v. General Electric Company,
`
`IPR2013-00172, Paper 50 at 42, for the proposition that an expert need not
`
`expressly set forth the evidentiary standard used in formulating opinions. See,
`
`Petitioner’s Reply to Patent Owner’s Response, Paper 27, at 20. In particular,
`
`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
`
`evidence based on whether the expert testimony discloses the underlying facts or
`
`data on which the opinion is based.” Petitioner’s Reply, Paper 27 at 20 (citing
`
`Vibrant Media, Paper 50 at 42). The Board’s conclusion in Vibrant Media,
`
`however, ignores that under FRE 702, the admissibility of expert testimony
`
`requires a finding not only that “the testimony is based on sufficient facts or data”
`
`(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)).
`
`
`
`7
`
`
`
`
`
`Here, the Board cannot assess under FRE 702 whether Mr. Wechselberger’s
`
`opinion testimony is “based on sufficient facts or data,” is “the product of reliable
`
`principles and methods,” or if Mr. Wechselberger “reliably applied the principles
`
`and methods to the facts of the case” given that Mr. Wechselberger did not disclose
`
`the standard against which he measured the quantum of evidence in arriving at his
`
`opinions. Specifically, when Mr. Wechselberger opines that:
`
`In my opinion, the challenged claim is unpatentable
`under 35 U.S.C. § 101 because they are (sic) directed to
`ineligible subject matter – in particular, the abstract idea
`of paying for and controlling access to content. The
`challenged claim is directed to the general concept of
`providing access to content based on payment. This
`basic concept is not patentable and was well-known in
`the prior art.
`
`Exhibit 1217 at ¶ 66, is he saying that he examined the evidence and a reasonable
`
`mind would find sufficient evidence to support these findings (substantial
`
`evidence); OR is he saying that he examined the evidence and it is more likely than
`
`not that his findings are true (preponderance of the evidence). There is no basis for
`
`the Board to know, because the Wechselberger Declaration is silent on the standard
`
`he used. As such, the Wechselberger Declaration should be excluded because it
`
`fails to meet the requirements of 37 CFR § 42.65(a) and FRE 702.
`
`To the extent that Exhibit 1217 is not excluded in its entirety as requested
`
`above, Patent owner moves to exclude the following paragraphs for the following
`
`reasons:
`
`
`
`8
`
`
`
`
`
`Paragraphs 27-59 (and any other portion of the Wechselberger Declaration
`
`that is directed to prior art and patentability under 35 U.S.C. §§ 102/ 103) are not
`
`relevant to the instituted proceeding because the trial as instituted is limited to
`
`patentability under 35 U.S.C. § 101. FRE 401. Being irrelevant evidence, those
`
`paragraphs are not admissible. FRE 402.
`
`Paragraphs 60-89 should be excluded because they deal with the strictly
`
`legal issue of statutory subject matter for which Mr. Wechselberger is not an
`
`expert. Thus, those portions of the Wechselberger Declaration are inadmissible
`
`under FRE 401 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. Being irrelevant evidence, those paragraphs are not
`
`admissible. FRE 402.
`
`
`
`
`
`
`
`9
`
`
`
`
`
`IV. Conclusion
`For these reasons, Patent Owner Smartflash, LLC respectfully requests that
`
`the Board exclude Exhibits 1202, 1203, 1204, 1205, 1206, 1209, 1210, 1211, 1212,
`
`1213, 1214, 1215, 1216, 1217, 1219, and 1221.
`
`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
`
`
`
`
`
`10
`
`
`
`
`
`
`
`CERTIFICATE OF SERVICE
`
`The undersigned hereby certifies that this PATENT OWNER’S MOTION
`
`TO EXCLUDE EVIDENCE, PATENT OWNER’S LIST OF EXHIBITS and
`
`Exhibit 2102 in CBM2015-00018 were served today, by agreement of the parties
`
`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
`
`
`
`
`
`
`
`11
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