UNITED STATES PATENT AND TRADEMARK OFFICE
`________________________
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`________________________
`
`GOOGLE INC. and APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`________________________
`Case CBM2015-00028
`Patent 7,334,720 B21
`________________________
`
`
`
`PATENT OWNER’S MOTION TO EXCLUDE EVIDENCE
`
`
`
`
`1 CBM2015-00125 has been consolidated with this proceeding
`
`
`
`
`
`________________________
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`________________________
`
`GOOGLE INC. and APPLE INC.,
`Petitioner,
`
`v.
`
`SMARTFLASH LLC,
`Patent Owner.
`________________________
`Case CBM2015-00028
`Patent 7,334,720 B21
`________________________
`
`
`
`PATENT OWNER’S MOTION TO EXCLUDE EVIDENCE
`
`
`
`
`1 CBM2015-00125 has been consolidated with this proceeding
`
`
`
`
`
`
`
`
`TABLE OF CONTENTS
`
`B.
`
`C.
`
`
`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 1205, 1224, 1229, 1230, 1233, 1235, or 1236 are Uncited and
`thus are Irrelevant .................................................................................. 3
`Exhibits 1206, 1207, 1208, 1211, 1214, 1215, 1216, 1217, 1218,
`1225, 1226 and 1227 are Not Alleged to be Invalidating Prior Art and
`thus are Irrelevant .................................................................................. 5
`Exhibits 1203, 1204, 1212, 1213, and 1228 are not the Basis for any
`Invalidity Grounds for Which CBM2015-00028 was Instituted and
`thus are Irrelevant .................................................................................. 7
`Exhibit 1219 Lacks Foundation, is Unreliable, and Relies on
`Irrelevant Exhibits ................................................................................. 8
`IV. Conclusion ..................................................................................................... 12
`
`
`D.
`
`E.
`
`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, 1207, 1208, 1211, 1212,
`
`1213, 1214, 1215, 1216, 1217, 1218, 1219, 1224, 1225, 1226, 1227, 1228, 1229,
`
`1230, 1233, 1235, and 1236.
`
`II.
`
`Patent Owner Smartflash Timely Objected to Petitioner’s Exhibits
`
`Patent Owner Smartflash LLC timely objected to CBM2015-00028 Exhibits
`
`1202, 1203, 1204, 1205, 1206, 1207, 1208, 1211, 1212, 1213, 1214, 1215, 1216,
`
`1217, 1218, 1219, 1224, 1225, 1226, 1227, 1228, 1229, 1230, 1233, 1235, and
`
`1236 by filing Patent Owner’s Objections to Admissibility of Evidence. Paper 14.
`
`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.
`
`
`
`1
`
`
`
`
`
`Petitioner cites Exhibit 1202 for the sole purpose of showing Patent Owner’s
`
`description of the subject matter of U.S. Patent 7,334,720 (“the ‘720 Patent”) as
`
`“cover[ing] a portable data carrier for storing data and managing access to the data
`
`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
`
`payment information.” Corrected Petition, Paper 5 at 11 (citing Ex. 1202).
`
`Petitioner does not need to cite to Exhibit 1202 to show the subject matter of the
`
`‘720 Patent, however, because Exhibit 1201, the actual ‘720 Patent, is in evidence
`
`without objection. Under FRE 1004, other evidence of the content of a writing
`
`(here the ‘720 Patent) is admissible if the original is lost, cannot be obtained, has
`
`not been produced, or the writing is not closely related to a controlling issue. None
`
`of those conditions apply here, given that the ‘720 Patent is in evidence and is the
`
`subject of the trial.
`
`Patent Owner’s description of the ‘720 Patent in Exhibit 1202 is not relevant
`
`to any of the issues here. Petitioner’s expert, Anthony J. Wechselberger’s
`
`Declaration, Exhibit 1219, (“Wechselberger Declaration”) does not cite Exhibit
`
`1202. The Board’s May 28, 2015 Decision – Institution of Covered Business
`
`Method Patent Review 37 C.F.R. § 42.208 (“PTAB Decision”), Paper 11, 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
`
`
`
`2
`
`
`
`
`
`1202. As such, Exhibit 1202 does not pass the test for relevant evidence under
`
`FRE 401 and is not admissible per FRE 402.
`
`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 CBMs in the same patent family, such as CBM2014-00102,
`
`the Board declined to exclude the same exhibit because “[Patent Owner’s]
`
`characterization of the … patent in prior proceedings are (sic) relevant to the
`
`credibility of its characterization of the … patent in this proceeding.” CBM2014-
`
`00102, Paper 52 at 36. There is no credibility issue here, however, that makes
`
`Exhibit 1202 relevant. There is nothing about Patent Owner’s characterization of
`
`the ‘720 Patent in this proceeding – that claim 2 “does not recite a ‘financial
`
`product or service’” in the way Congress intended (Patent Owner’s Preliminary
`
`Response, Paper 8 at 5-10) – that is contradicted by Exhibit 1202 such that the
`
`credibility of Patent Owner’s characterization is an issue. As such Exhibit 1202 is
`
`irrelevant and inadmissible.
`
`B. Exhibits 1205, 1224, 1229, 1230, 1233, 1235, or 1236 are Uncited and
`thus are Irrelevant
`
`Neither the Corrected Petition, nor the Wechselberger Declaration, nor the
`
`PTAB Decision cite to Exhibit 1205 (Russell Housley and Jan Dolphin, “Metering:
`
`A Pre-pay Technique,” Storage and Retrieval for Image and Video Databases V,
`
`Conference Volume 3022, 527 (January 15, 1997)), Exhibit 1224 (File History for
`
`
`
`3
`
`
`
`
`
`U.S. Patent No. 8,061,598), Exhibit 1229 (File History for U.S. Patent No.
`
`7,942,317), Exhibit 1230 (File History for U.S. Patent No. 8,033,458), Exhibit
`
`1233 (File History for U.S. Patent No. 8,118,221), Exhibit 1235 (File History for
`
`U.S. Patent No. 8,336,772), or Exhibit 1236 (U.S. Patent No. 5,646,992) (“the
`
`Uncited Exhibits”). The Uncited Exhibits thus do not appear to make a fact of
`
`consequence in determining this action more or less probable than it would be
`
`without the Uncited Exhibits. As such, the Uncited Exhibits do not pass the test for
`
`relevant evidence under FRE 401 and are not admissible per FRE 402.
`
`In the related CBMs in the same patent family, such as CBM2014-00102,
`
`the Board declined to exclude exhibits that were uncited, finding 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.” CBM2014-00102, Paper 52 at 37. The Board’s
`
`conclusion that mere review by an expert in reaching an opinion renders an exhibit
`
`relevant under FRE 401 and thus admissible under FRE 402 is overly broad under
`
`the Federal Rules of Evidence. Underlying facts and data need not themselves be
`
`admissible for an expert to rely on them in formulating an admissible opinion.
`
`FRE 703 (“An expert may base an opinion on facts or data in the case that the
`
`expert has been made aware of or personally observed. If experts in the particular
`
`field would reasonably rely on those kinds of facts or data in forming an opinion
`
`
`
`4
`
`
`
`
`
`on the subject, they need not be admissible for the opinion to be admitted”). But
`
`nothing in the Federal Rules of Evidence supports that mere review of an exhibit
`
`by an expert renders the exhibit relevant or admissible. The Uncited Exhibits
`
`should be excluded.
`
`C. Exhibits 1206, 1207, 1208, 1211, 1214, 1215, 1216, 1217, 1218, 1225, 1226
`and 1227 are Not Alleged to be Invalidating Prior Art and thus are
`Irrelevant
`
`Petitioner cites Exhibits 1206 (U.S. Patent No. 4,999,806)(“Chernow”)
`
`(Corrected Petition at 6), 1207 (U.S. Patent No. 5,675,734)(“Hair”) (Corrected
`
`Petition at 15), 1208 (U.S. Patent No. 4,878,245)(“Bradley”) (Corrected Petition at
`
`15), 1211 (U.S. Patent No. 5,103,392)(“Mori”) (Corrected Petition at 7), 1214
`
`(U.S. Patent No. 5,915,019)(“Ginter”) (Corrected Petition at 8), 1215 (European
`
`Patent Application, Publication No. EP0809221A2)(“Poggio”) (Corrected Petition
`
`at 16), 1216 (PCT Application Publication No. WO 99/43136)(“Rydbeck”)
`
`(Corrected Petition at 9), 1217 (JP Publication No. H11-164058A
`
`(translation))(“Sato”) (Corrected Petition at 9), 1218 (Eberhard von Faber, Robert
`
`Hammelrath, and Franz-Peter Heider, “The Secure Distribution of Digital
`
`Contents,” IEEE (1997))(“von Faber”) (Corrected Petition at 7), 1225 (U.S. Patent
`
`No. 4,337,483)(“Guillou”) (Corrected Petition at 29), 1226 (U.S. Patent No.
`
`7,725,375)(“Shepherd”) (Corrected Petition at 34) and 1227 (International
`
`Publication No. WO 95/34857)(“Smith”)(Ex. 1219, Wechselberger Declaration at
`
`
`
`5
`
`
`
`
`
`¶ 46). Although cited, neither the Corrected Petition nor the Wechselberger
`
`Declaration assert that any of these Exhibits (“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
`
`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 the related CBMs in the same patent family, such as CBM2014-00102,
`
`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.” CBM2014-00102, Paper 52 at 37 (emphasis added).
`
`The Board’s reasoning in CBM2014-00102 is inapplicable here, where review was
`
`instituted on § 101 statutory subject matter grounds only. Here, the Board rejected
`
`the asserted § 103 obviousness grounds, 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.
`
`
`
`6
`
`
`
`
`
`D. Exhibits 1203, 1204, 1212, 1213, and 1228 are not the Basis for any
`Invalidity Grounds for Which CBM2015-00028 was Instituted and thus
`are Irrelevant
`
`Petitioner cites Exhibit 1203 (U.S. Patent No. 5,925,127)(“Ahmad”), Exhibit
`
`1204 (U.S. Patent No. 5,940,805)(“Kopp”), Exhibit 1212 (U.S. Patent No.
`
`5,530,235)(“Stefik ‘235), Exhibit 1213 (U.S. Patent No. 5,629,980)(“Stefik ‘980”),
`
`and Exhibit 1228 (JP Patent Application Publication No. H10-269289
`
`(translation))(“Maari”)(“the Alleged Prior Art Exhibits”) as alleged invalidating
`
`prior art under 35 U.S.C. § 103. Corrected Petition, Paper 5 at 19. The PTAB
`
`Decision, however, did not adopt any of the proposed invalidity grounds based on
`
`these references. Compare, PTAB Decision at 2-3 (table summarizing asserted
`
`grounds for challenging patentability under § 103), with PTAB Decision at 18
`
`(instituting covered business method patent review on § 101 grounds only). Thus,
`
`the Alleged Prior Art Exhibits fail the test for relevant evidence because nothing in
`
`the Alleged Prior Art Exhibits makes a fact of consequence in determining this
`
`action more or less probable than it would be without the Alleged Prior Art
`
`Exhibits. FRE 401(b). Being irrelevant evidence, the Alleged Prior Art Exhibits
`
`are not admissible. FRE 402.
`
`In the related CBMs in the same patent family, such as CBM2014-00102,
`
`the Board declined to exclude similar alleged prior art that was rejected as a basis
`
`for institution on § 103 grounds “[b]ecause these exhibits are evidence relied upon
`
`
`
`7
`
`
`
`
`
`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.” CBM2014-00102, Paper 52 at 37 (emphasis added). The Board’s prior
`
`reasoning is inapplicable here, where review was instituted on § 101 statutory
`
`subject matter grounds only. The Board rejected the asserted § 103 obviousness
`
`grounds, making the state of the art and the knowledge of a person of ordinary skill
`
`in the art irrelevant. As such, the Alleged Prior Art Exhibits should be excluded.
`
`E.
`
`Exhibit 1219 Lacks Foundation, is Unreliable, and Relies on
`Irrelevant Exhibits
`
`Patent Owner moves to exclude Exhibit 1219 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.
`
`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:
`
`
`
`8
`
`
`
`
`
`FRE 702.
`
`(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.
`
`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
`
`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,
`
`CBM2014-00102, Paper 52 at 6-7, and Vibrant Media v. General Electric
`
`Company, IPR2013-00172, Paper 50 at 42, for the proposition that an expert need
`
`
`
`9
`
`
`
`
`
`not expressly set forth the evidentiary standard used in formulating opinions. See,
`
`Petitioner’s Reply to Patent Owner’s Response, Paper 27, at 18. 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 18 (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)).
`
`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:
`
`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
`10
`
`
`
`
`
`
`
`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.
`
`Exhibit 1219 at ¶ 83, 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 1219 is not excluded in its entirety as requested
`
`above, Patent owner moves to exclude the following paragraphs for the following
`
`reasons:
`
`Paragraphs 26-76 (and any other portion of the Wechselberger Declaration
`
`that is directed to 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 77-104 should be excluded because they deal with the strictly
`
`legal issue of statutory subject matter for which Mr. Wechselberger is not an
`
`
`
`11
`
`
`
`
`
`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.
`
`IV. Conclusion
`For these reasons, Patent Owner Smartflash, LLC respectfully requests that
`
`the Board exclude Exhibits 1202, 1203, 1204, 1205, 1206, 1207, 1208, 1211, 1212,
`
`1213, 1214, 1215, 1216, 1217, 1218, 1219, 1224, 1225, 1226, 1227, 1228, 1229,
`
`1230, 1233, 1235, and 1236.
`
`Dated: November 19, 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
`
`
`
`
`
`
`
`
`
`12
`
`
`
`
`
`
`
`CERTIFICATE OF SERVICE
`
`The undersigned hereby certifies that this PATENT OWNER’S MOTION
`
`TO EXCLUDE EVIDENCE in CBM2015-00028 was 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
`raynimrod@ quinnemanuel.com
`QE-SF-PTAB-Service@quinnemanuel.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: November 19, 2015
`
`
`
`
`
`
`
`13
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