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 CBM2015-000291
`Patent 7,334,720 B2
`______________________
`
`Before the Honorable JENNIFER S. BISK, RAMA G. ELLURU, GREGG I.
`ANDERSON, 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)
`
`
`
`
`
`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 CBM2015-000291
`Patent 7,334,720 B2
`______________________
`
`Before the Honorable JENNIFER S. BISK, RAMA G. ELLURU, GREGG I.
`ANDERSON, 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)
`
`
`
`
`
`1 CBM2015-00125 has been consolidated with this proceeding.
`
`
`
`
`
`Case CBM2015-00029
`Patent 7,334,720 B2
`
`TABLE OF CONTENTS
`
`
`I. THE BOARD SHOULD NOT EXCLUDE EXHIBIT 1302 ............................. 2
`II. THE BOARD SHOULD NOT EXCLUDE EXHIBITS 1324, 1328-30,
`1333, OR 1335 ................................................................................................... 3
`III. THE BOARD SHOULD NOT EXCLUDE EXHIBITS 1303-04, 1306-08,
`1311-18, OR 1325-27 ......................................................................................... 4
`IV. THE BOARD SHOULD NOT EXCLUDE EXHIBIT 1319 ............................. 6
`
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`Case CBM2015-00029
`Patent 7,334,720 B2
`
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`In response to Patent Owner’s (“PO”) Motion to Exclude (“Mot.”, Pap. 30),
`
`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
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`criminal trials to a jury it is better, nine times out of ten, to admit, than to exclude, .
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`. . 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
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`lost by idle bickering about irrelevancy or incompetence.”). But even under strict
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`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-
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`er’s evidence here is entirely proper while PO’s objections—many of which have
`1
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`Case CBM2015-00029
`Patent 7,334,720 B2
`already been rejected by the Board in prior proceedings on related patents—are
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`baseless.
`
`I.
`
`The Board Should Not Exclude Exhibit 1302
`
`Petitioner did not rely on Ex. 1302 for “evidence of the content” of the ’720
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`patent (cf. Mot. 2), but rather to show that PO’s own characterization of the sub-
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`ject matter of the ’720 patent supports Petitioner’s contention—and the Board’s
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`conclusion—that the ’720 patent relates to a financial activity or transaction and is
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`thus subject to the Board’s review as a covered business method patent. See Pap. 5
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`at 8. PO’s characterization of the ’720 patent in another proceeding is not found in
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`the patent itself; thus, Ex. 1302 is not cumulative of the ’720 patent, and FRE 1004
`
`is inapplicable. Indeed, as PO admits, the Board declined to exclude the same ex-
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`hibit in other proceedings on related patents because the Board found “[Patent
`
`Owner’s] characterization of the [related] patent in prior proceedings are relevant
`
`to the credibility of its characterization of the [] patent in this proceeding.” Mot. 3
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`(citing CBM2014-00102, Pap. 52 at 36); see also CBM2014-00106, Pap. 52 at 25;
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`CBM2014-00108, Pap. 50 at 19; CBM2014-00112, Pap. 48 at 24. Contrary to
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`PO’s claim that its characterization of the ’720 patent is not at issue (Mot. 3), PO
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`disputed the financial nature of the ’720 patent here, see Pap. 8 at 5-10, and its
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`highly relevant admission to the contrary should not be excluded.
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`
`
`2
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`Case CBM2015-00029
`Patent 7,334,720 B2
`The Board Should Not Exclude Exhibits 1324, 1328-30, 1333, Or 1335
`II.
`
`PO’s assertion that Exs. 1324, 1328-30, 1333, and 1335 are not cited in the
`
`Wechselberger Declaration (Mot. 3-4) is simply wrong: Ex. 1328 was cited in the
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`“State of the Art” section and all of the exhibits were cited as “Materials Reviewed
`
`and Relied Upon,” see Ex. 1319, ¶ 47, App. C, and properly filed with the Petition.
`
`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 also incor-
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`rectly 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. The fact that FRE 703
`
`allows experts to rely on material that may not be admissible does not render all
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`material relied on by experts irrelevant or inadmissible. Indeed, as PO admits, in
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`another proceeding on a related patent, the Board denied PO’s request to exclude
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`similar exhibits, finding that “[b]ecause Mr. Wechselberger attests that he re-
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`viewed these exhibits in reaching the opinions he expressed in this case, Patent
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`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 ex-
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`tent PO’s objection is based on imaginings that Petitioner will advance at oral hear-
`
`ing arguments about these documents not presented in previous papers, this is
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`3
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`Case CBM2015-00029
`Patent 7,334,720 B2
`baseless–Petitioner intends to comply fully with the Board’s rules (e.g., Trial Prac-
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`tice Guide, 77 Fed. Reg. 48,756, 48,768 (Aug. 14, 2012)).
`
`III. The Board Should Not Exclude Exhibits 1303-04, 1306-08, 1311-18, Or
`1325-27
`
`Contrary to PO’s assertions, Exs. 1303, 1306-08, 1311, 1314, 1316-18, and
`
`1325-26 (“Prior Art Exhibits”) are certainly relevant to the Board’s § 101 analy-
`
`sis.2 More specifically, such evidence is relevant to Mayo’s two-step inquiry for
`
`patent eligibility to determine, for example, whether the claims contain an “in-
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`ventive concept.” 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 evidence [, such as
`
`prior art,] may be helpful in terms of understanding the state of the art . . . , and
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`whether the problem to which the patent was directed is solved using computer
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`technology in unconventional ways.”); cf. Versata Dev. Grp., Inc. v. SAP Am., Inc.,
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`793 F.3d 1306, 1334, 1336 (Fed. Cir. 2015) (affirming Board’s reliance on peti-
`
`tioner’s expert in determining claimed steps were well-known, routine, and con-
`
`ventional and Board’s finding that “claims at issue do not recite any improvement
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`2 Exs. 1305 and 1336 were not relied on here. While exclusion of Exs. 1305 and
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`1336 is unnecessary, Petitioner would not oppose it.
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`4
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`Case CBM2015-00029
`Patent 7,334,720 B2
`in computer technology”).3 Both the Petition and the Wechselberger Declaration
`
`describe Prior Art Exhibits as evidence of that knowledge. See, e.g., Pap. 5 at 4-6
`
`(Overview of Field of the Claimed Invention); Ex. 1319 ¶¶ 30-52 (State of the
`
`Art).
`
`Moreover, the Petition and Wechselberger Declaration specifically rely on
`
`the Prior Art Exhibits to show either that (1) the basic concept of controlling access
`
`based on payment and/or rules—to which the challenged claims are directed—was
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`well-known in the prior art, or (2) the elements disclosed by the challenged claims
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`were well-known, routine, and conventional. See, e.g., Pap. 5 at 27-28 (analogiz-
`
`ing challenged claims to those held ineligible in Alice (Ex. 1326)); Ex. 1319 ¶¶ 91-
`
`92 (citing “State of the Art” discussion and Ex. 1315 and 1325), ¶¶ 96-102 (citing
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`“State of the Art” discussion and Exs. 1306-07, 1311-13, 1315). The Prior Art Ex-
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`hibits are unquestionably relevant to the § 101 analysis; there is no basis to exclude
`
`them.
`
`PO’s assertion that Exs. 1304, 1312-13, 1315, and 1327 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 evidence of the state of the art.
`
`See YYZ, 2015 WL 5886176, at *8. While the Board did not institute review based
`
`on grounds calling out Exs. 1304, 1312-13, 1315, and 1327, they nonetheless es-
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`3 All emphasis herein is added unless otherwise indicated.
`
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`5
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`Case CBM2015-00029
`Patent 7,334,720 B2
`tablish the state of the art and provide context for the § 101 inquiry—and the
`
`Wechselberger Declaration specifically relies on them for this purpose. See Ex.
`
`1319 ¶¶ 36, 40, 45-46, 47, 50 (“State of the Art” discussion), ¶ 91 (citing “State of
`
`the Art” discussion in § 101 analysis), ¶¶ 99-100 (citing Exs. 1312-13 and 1315),
`
`102. Moreover, the named inventor has plainly admitted, in related proceedings
`
`that both parties have cited to the Board (Pap. 5 at 13; Pap. 6 at 3), that he did not
`
`invent claimed concepts or elements, such as use rules in connection with the
`
`online sale of content or charging different prices for online rentals and online pur-
`
`chases. See, e.g., Smartflash LLC, et al. v. Apple Inc., No. 6:13-cv-447, Dkt. 511
`
`(CBM2015-00127, Ex. 1045) at 118:6-119:14, 120:14-121:8, 122:19-125:25,
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`126:11-129:18. Nonetheless, it appears that PO intends to argue in this proceeding
`
`that these admitted prior art elements could somehow provide an inventive concept
`
`sufficient to satisfy the second step of the Mayo analysis (see, e.g., Patent Owner
`
`Response, Pap. 23 at 17 (arguing claims contain “rule[s] conditioned on the
`
`amount of payment”)—making such evidence unquestionably relevant here. There
`
`is thus no merit in PO’s assertion that “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.” Mot. 7.
`
`IV. The Board Should Not Exclude Exhibit 1319
`
`Despite the Board’s rejection on multiple occasions of PO’s argument that
`
`
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`6
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`Case CBM2015-00029
`Patent 7,334,720 B2
`the Wechselberger Declaration should be disregarded for not reciting the eviden-
`
`tiary standard, PO repeats it again here. Mot. 8-11; see also CBM2014-00102,
`
`Pap. 8 at 4 n.8; CBM2014-00106, Pap. 8 at 4 n.11; CBM2014-00108, Pap. 8 at 16
`
`n.5; CBM2014-00112, Pap. 7 at 4 n.9; CBM2014-00102, Pap. 52 at 39;
`
`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 in prior pro-
`
`ceedings on related patents, experts like Mr. Wechselberger are “not required to
`
`recite the ‘preponderance of the evidence’ standard expressly in order for the ex-
`
`pert 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] dis-
`
`cretion 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. The Wechselberger Decla-
`
`ration 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 specific evidence supporting
`
`each of the opinions. PO’s meritless request that the Board simply ignore this evi-
`
`dence should be rejected.
`
`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
`
`
`
`7
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`Case CBM2015-00029
`Patent 7,334,720 B2
`claim constructions, cite prior art to describe the state of the art and provide con-
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`text for his § 101 opinions, as well as “any other portion . . . that is directed to pa-
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`tentability under 35 U.S.C. §§ 102/103.” Mot. 11 (identifying paragraphs 26-83).
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`First, as detailed in § III, supra, the Wechselberger Declaration’s description of the
`
`art at the relevant time is clearly relevant to the § 101 inquiry. For the same rea-
`
`sons the Prior Art Exhibits and Exs. 1304, 1312-13, 1315 are relevant, expert anal-
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`yses 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
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`full understanding of the basic character of the claimed subject matter.” See, e.g.,
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`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; Mr. Wech-
`
`selberger’s conclusions regarding what would be considered well-known, routine,
`
`and conventional (see, e.g., Ex. 1319 ¶ 89) are entitled to weight.
`
`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. 11-12 (identifying paragraphs 84-112). But PO’s
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`argument ignores that “[p]atent eligibility under § 101 presents an issue of law . . .
`
`
`
`8
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`Case CBM2015-00029
`Patent 7,334,720 B2
`. [that] may contain underlying factual issues.” Accenture Global Servs., GmbH v.
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`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.”); YYZ, 2015 WL 5886176, at *8; cf. Versata, 793 F.3d at 1334 (affirming
`
`Board’s reliance on petitioner’s expert over patent owner’s expert in determining
`
`claimed steps were well-known, routine, and conventional). And there is no dis-
`
`pute that Mr. Wechselberger is competent to opine on the factual issues. Cf. Mot.
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`11-12. Moreover, there is no basis for PO’s objections to Mr. Wechselberger’s ex-
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`pert testimony under FRE 602, as the rule plainly states it “does not apply to a wit-
`
`ness’s expert testimony under Rule 703.” Thus, PO’s FRE 602 objection to para-
`
`graphs 84-112 of the Wechselberger Declaration should be rejected for this addi-
`
`tional, independent reason.
`
`For the foregoing reasons, PO’s most recent attempts to exclude relevant,
`
`admissible evidence should again be rejected.
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`
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`December 3, 2015
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`
`
`
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`
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`Respectfully submitted,
`By /J. Steven Baughman/
`J. Steven Baughman, Lead Counsel
`
`
`
`9
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`Case CBM2015-00029
`Patent 7,334,720 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 December 3, 2015, to the following counsel 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
`
`Raymond Nimrod
`Andrew Holmes
`QUINN EMANUEL URQUHART & SULLIVAN, LLP
`raynimrod@quinnemanuel.com
`QE-SF-PTAB-Service@quinnemanuel.com
`
`Attorneys for Petitioner Google Inc.
`
`/s/ Sharon Lee
`Sharon Lee
`
`
`
`ROPES & GRAY LLP
`
`10
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