Trials@uspto.gov
`571-272-7822
`
`
`
`
`Paper 20
`Entered: October 13, 2015
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`TRADESTATION GROUP, INC. and
`TRADESTATION SECURITIES, INC.,
`Petitioner,
`
`v.
`
`TRADING TECHNOLOGIES INTERNATIONAL, INC.,
`Patent Owner.
`
`Case CBM2015-00161
`Patent No. 6,766,304 B2
`
`
`
`
`
`
`
`
`
`Before SALLY C. MEDLEY, MEREDITH C. PETRAVICK, and
`PHILIP J. HOFFMANN, Administrative Patent Judges.
`
`PETRAVICK, Administrative Patent Judge.
`
`
`
`
`
`
`
`DECISON
`Denying Motion for Additional Discovery
`37 C.F.R. § 42.51
`
`i. Introduction
`
`Patent Owner filed a motion for additional discovery on
`
`September 16, 2015 (Paper 12, “Mot.”), and Petitioner filed an opposition to
`
`the motion on September 21, 2015 (Paper 14, “Opp.”). Patent Owner filed a
`
`reply on October 2, 2015. Paper 17, (“Reply”).
`
`
`571-272-7822
`
`
`
`
`Paper 20
`Entered: October 13, 2015
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`TRADESTATION GROUP, INC. and
`TRADESTATION SECURITIES, INC.,
`Petitioner,
`
`v.
`
`TRADING TECHNOLOGIES INTERNATIONAL, INC.,
`Patent Owner.
`
`Case CBM2015-00161
`Patent No. 6,766,304 B2
`
`
`
`
`
`
`
`
`
`Before SALLY C. MEDLEY, MEREDITH C. PETRAVICK, and
`PHILIP J. HOFFMANN, Administrative Patent Judges.
`
`PETRAVICK, Administrative Patent Judge.
`
`
`
`
`
`
`
`DECISON
`Denying Motion for Additional Discovery
`37 C.F.R. § 42.51
`
`i. Introduction
`
`Patent Owner filed a motion for additional discovery on
`
`September 16, 2015 (Paper 12, “Mot.”), and Petitioner filed an opposition to
`
`the motion on September 21, 2015 (Paper 14, “Opp.”). Patent Owner filed a
`
`reply on October 2, 2015. Paper 17, (“Reply”).
`
`
`
`CBM2015-00161
`Patent 6,766,304 B2
`
`Petitioner seeks discovery on the issue of whether CQG, Inc. and
`
`CQG, LLC (collectively, “CQG”) is an unnamed real-party-in-interest
`
`(“RPI”) in this proceeding. U.S. Patent No. 6,766,304 B2 (“the
`
`’304 patent”), the subject of this proceeding, was also the subject of covered
`
`business method patent review CBM2015-00057. Institution was denied in
`
`CBM2015-0057, pursuant to 35 U.S.C. § 325(a)(1), because CQG, the
`
`petitioner, filed a civil action challenging the validity of the patent prior to
`
`filing the petition for covered business method patent review. CQG, Inc. v.
`
`Trading Tech. Int’l, Inc., Case CBM2015-0057, slip op. at 1–9 (PTAB
`
`Jul. 10, 2015) (Paper 13).
`
`
`
`ii. Overview of Arguments
`
`Patent Owner argues that CQG is an unnamed RPI because Petitioner
`
`and CQG are coordinating, allegedly, the filing of the petition challenging
`
`the ’304 patent in this proceeding and the petitions in other proceedings, in a
`
`quid pro quo manner. See Mot. 1–3, 7–8; Reply 2 (“the division of the
`
`patents, with each party playing its ‘part’ . . . amounts to payment-in-kind”).
`
`Patent Owner argues that, if CQG is a RPI, institution should be denied
`
`under 35 U.S.C. § 325(a)(1).
`
`Patent Owner, thus, seeks additional discovery as to whether CQG is
`
`an unnamed RPI. Id. at 3. Patent Owner seeks the following discovery:
`
`All communications and agreements between TradeStation and
`CQG relating to the filing or preparation of any post-grant
`proceeding (filed or anticipated) of any TT patent, or other
`documents referencing such communications and agreements
`between TradeStation and CQG.
`
`Mot. 1.
`
`2
`
`
`
`CBM2015-00161
`Patent 6,766,304 B2
`
`
`
`Petitioner opposes Patent Owner’s request because the request is
`
`unduly broad and not limited to communications and agreements between
`
`Petitioner and CQG regarding the filing of the petition challenging the
`
`’304 patent. Opp. 1. Petitioner states: “were TT’s request only for
`
`communication and agreements between TradeStation and CQG that
`
`discussed funding or control of the instant petition . . ., the issue could be
`
`easily resolved. No such communications or agreements have ever existed,
`
`in writing or otherwise.” Id.
`
`
`
`Petitioner states that public records show that there are
`
`communications between Petitioner, CQG, and other parties regarding
`
`jointly filed petitions requesting covered business method patent review of
`
`Patent Owner’s patents other than the ’304 patent, and between Petitioner,
`
`CQG, and other defendants regarding consolidated proceedings in the
`
`Northern District of Illinois and appeals to the Federal Circuit. Id. at 3.
`
`Petitioner argues, however, that “[t]he fact that defendants coordinated on a
`
`different patent does not establish any likelihood that the requested
`
`discovery will show those same parties coordinated on [the ’304 patent.]”
`
`Id. at 9 (emphases omitted).
`
`
`
`iii. Analysis
`
`In covered business method patent reviews, additional discovery may
`
`be ordered if the party moving for the discovery shows good cause as to why
`
`the additional discovery is needed. 37 C.F.R. §§ 42.51(b)(2), 42.224. As
`
`stated in the legislative history, “[g]iven the time deadlines imposed on these
`
`proceedings, it is anticipated that, regardless of the standards imposed in [35
`
`3
`
`
`
`CBM2015-00161
`Patent 6,766,304 B2
`
`U.S.C. §§ 316, 326], PTO will be conservative in its grants of discovery.”
`
`154 Cong. Rec. S9988-89 (daily ed. Sept. 27, 2008) (statement of Sen. Kyl).
`
` As the movant, Patent Owner bears the burden of establishing good
`
`cause. Id. We generally consider five factors (the “Garmin/Bloomberg
`
`factors”) in determining whether good cause exists for granting additional
`
`discovery requests. See Garmin Int’l, Inc. v. Cuozzo Speed Techs. LLC,
`
`Case IPR2012-00001, slip op. at 6–7 (PTAB Mar. 5, 2013) (Paper 26)
`
`(informative), as modified by Bloomberg, Inc. v. Market-Alerts Pty, Ltd.,
`
`Case CBM2013-00005, slip op. at 4 (PTAB May 29, 2013) (Paper 32).
`
`These factors are: (1) there must be more than a mere possibility of finding
`
`something useful; (2) a party may not seek another party’s litigation
`
`positions or the underlying basis for those positions; (3) a party should not
`
`seek information that reasonably can be generated without a discovery
`
`request; (4) instructions and questions should be easily understandable; and
`
`(5) the discovery requests must not be overly burdensome to answer.
`
`Garmin, slip op. at 6–7; Bloomberg, slip op. at 5.
`
`
`
`a. First Factor—More Than a Possibility and Mere Allegation
`
`The first Garmin/Bloomberg factor considers whether there exists
`
`more than “mere possibility” or “mere allegation that something useful [to
`
`the proceeding] will be found.” Garmin, slip op. at 6; Bloomberg, slip op.
`
`at 5. Under this factor, a party should provide a specific factual reason for
`
`reasonably expecting that discovery will be useful. Bloomberg, slip op. at 5.
`
`In this context, “useful” means favorable in substantive value to the moving
`
`party’s contention. Id. The requester of information should already be in
`
`possession of a threshold amount of evidence or reasoning tending to show
`
`4
`
`
`
`CBM2015-00161
`Patent 6,766,304 B2
`
`beyond speculation that something useful will be uncovered.” Garmin¸slip
`
`op. at 7.
`
`
`
`Patent Owner alleges that the additional discovery will produce
`
`communications between Petitioner and CQG showing an alleged
`
`cooperative scheme to file petitions challenging Patent Owner’s patents,
`
`including the ’304 patent. See Mot. 1–11; Reply 5. Patent Owner argues
`
`that this information is useful because it will establish that CQG is an RPI.
`
`Mot. 4–5. To support its argument that something useful will be uncovered,
`
`Patent Owner relies upon: 1) the fact that the petition in this proceeding is a
`
`substantial copy of CQG’s petition in CBM2015-00057, including the
`
`identical expert report, 2) the fact that Petitioner and CQG jointly filed
`
`petitions for review of patents other than the ’304 patent, and 3) statements
`
`made by the defendant in a related proceeding in the United States District
`
`Court, Northern District of Illinois. Mot. 2–7; Reply 1–2.
`
`
`
`The statements made by defendants, in the related district court
`
`proceedings, are taken from documents titled “Response of Certain
`
`Defendants to Trading Technologies’ ‘Emergency’ Motion” (Ex. 2002) and
`
`“Supplemental Response of Certain Defendants to TT’s Emergency Motion”
`
`(Ex. 2003). Those statements and some additional information for context,
`
`are reproduced below.
`
`Defendants plan to request that the PTAB decide the validity of
`TT’s patents, by refiling challenges to most (if not all) of the
`patents-in-suit. . . . Given these very recent developments,
`Defendants respectfully request a short period of time to
`coordinate on these PTAB actions. Defendants expect a
`Covered Business Method Review Petition on one of the
`patents in suit to be filed by Monday, July 20 with additional
`petitions to be filed in the coming weeks.
`
`(Ex. 2002, 3) and
`
`5
`
`
`
`CBM2015-00161
`Patent 6,766,304 B2
`
`Defendants have already advised the Court that they “plan to
`request that the PTAB decide the validity of TT’s patents, by
`refiling challenges to most (if not all) of the patents-in-suit
`[including those] which were on the cusp of trial [before the
`PTAB].” For CQG’s part, it is preparing to file CBMR
`petitions on the ’411, ’374, ’768, and ’724 patents in the next
`several weeks.
`
`(Ex. 2003, 8).
`
`
`
`Petitioner argues that Patent Owner has not shown more than a mere
`
`possibility that something useful will be discovered. Opp. 1–12. First,
`
`Petitioner argues that the fact that the petition in this proceeding is a
`
`substantial copy of CQG’s petition in CBM2015-00057 does not establish
`
`that Petitioner coordinated with CQG in filing the petition in this
`
`proceeding. Id. at 3–8. Petitioner states that it copied CQG’s filings, which
`
`were public, because “it was most economical for TradeStation to simply
`
`copy the arguments from CQG’s filing and reuse its evidence,” but that
`
`CQG had no role in determining whether and what Petitioner would file. Id.
`
`at 3.
`
`
`
`Next, Petitioner argues that it is no secret that it and CQG are co-
`
`defendants in the related district court proceeding and that they have jointly
`
`filed petitions for covered business method patent review on patents other
`
`than the ’304 patent. Id. at 8–10 (referring to CBM2015-00179). Petitioner
`
`contends, however, that the fact that defendants coordinated on a different
`
`patent does not establish that they coordinated on the filing of a review of
`
`the ’304 patent and that none of the statements establish that “CQG had any
`
`direction or control over the petition for this proceeding.” Id. at 9 (emphasis
`
`omitted); see id. at 12.
`
`6
`
`
`
`CBM2015-00161
`Patent 6,766,304 B2
`
`
`
`Upon consideration of Patent Owner’s evidence and both parties’
`
`arguments, we are persuaded that Patent Owner fails to show a threshold
`
`amount of evidence or reasoning tending to show beyond speculation that
`
`something useful will be uncovered. To be useful, the communications must
`
`be favorable in substantive value to Patent Owner’s contention that CQG is
`
`an RPI in this proceeding. Patent Owner’s evidence does not establish
`
`sufficiently that discovery will produce communications between Petitioner
`
`and CQG showing an alleged cooperative scheme to file petitions
`
`challenging Patent Owner’s patents that includes the ’304 patent.
`
`We determine that the first Garmin/Bloomberg factor weighs in favor
`
`of denying the motion.
`
`
`
`b. Second Factor—Litigation Positions and Underlying Basis
`
`The second Garmin/Bloomberg factor considers whether a party is
`
`asking for the other party’s litigation positions and the underlying basis for
`
`those positions. Such a request is insufficient to demonstrate that the
`
`additional discovery is necessary for good cause. Garmin, slip op. at 6;
`
`Bloomberg, slip op. at 5.
`
`
`
`Patent Owner argues that it is not seeking litigation positions or
`
`underlying bases for those positions, but “factual communications related to
`
`how Petitioner and CQG determined who would file petitions on each of
`
`[Patent Owner’s] patents, including the ’304 patent.” Mot. 11. Patent
`
`Owner further argues that Petitioner waives any claim to privilege because
`
`Petitioner “indirectly discloses the contents of the communications between
`
`Petitioner and CQG by describing what is allegedly not included.” Reply 5.
`
`7
`
`
`
`CBM2015-00161
`Patent 6,766,304 B2
`
`Petitioner argues that the request encompasses communications and
`
`agreements between Petitioner, CQG, and other parties regarding the
`
`challenges to patents other than the ’304 patent. Opp. 14. Petitioner argues
`
`such communications and agreements fall under attorney-client privilege,
`
`joint defense/common interest privilege, and/or work product protection,
`
`because such communications would reflect attorney advice given by
`
`counsel, including shared counsel. Id. at 14–15. Petitioner “does not assert
`
`a claim of attorney-client privilege or work product protection on
`
`communications or agreements with CQG (or any other third party)
`
`discussing funding, control, or direction of [Petitioner’s] request for CBM
`
`review of the ’304 patent, since no such communications exist.” Id. at 14.
`
`Contrary to Patent Owner’s argument, the request is not limited to
`
`“factual communications related to how Petitioner and CQG determined
`
`who would file petitions on each patent,” but more broadly includes
`
`communications and agreements between Petitioner and CQG “relating to
`
`the filing or preparation of any post-grant proceeding (filed or anticipated) of
`
`any TT patent” (Mot. 1). We are persuaded that the request encompasses
`
`communications and agreements regarding the jointly filed petition that are
`
`privileged because such communications would reflect attorney advice given
`
`by counsel, including shared counsel, regarding the jointly filed petitions.
`
`We are not persuaded by Patent Owner that Petitioner waived any claim to
`
`privilege. We determine that the second Garmin/Bloomberg factor weighs
`
`in favor of denying the motion.
`
`
`
`8
`
`
`
`CBM2015-00161
`Patent 6,766,304 B2
`
`c. Third Factor—Ability to Generate Equivalent Information by Other
`Means
`
`The third Garmin/Bloomberg factor considers whether the sought-
`
`after information could reasonably be generated without a discovery request.
`
`Garmin, slip op. at 6; Bloomberg, slip op. at 5.
`
`
`
`Patent Owner argues that the request will uncover information,
`
`beyond that which is in the public record, to support its argument that CQG
`
`is a RPI. Mot. 11; Reply. 2–3. Patent Owner argues that such information
`
`includes “how CQG and Petitioner divided efforts and what each party knew
`
`when they both said that the present petition would be filed.” Reply 3.
`
`Patent Owner asserts that it cannot obtain such information except through
`
`discovery. Id.
`
`
`
`Petitioner argues that it admits that it coordinated with CQG on the
`
`jointly filed petitions challenging patents, other than the ’304 patent.
`
`Opp. 11. According to Petitioner, this information is public record and can
`
`be verified by public filings in the district court, Federal Circuit, and from
`
`the Patent Review Processing System. Id. Petitioner, thus, asserts that
`
`“[Patent Owner] can easily generate equivalent information— that
`
`[Petitioner] coordinated with CQG in other fora and on other patents in the
`
`PTAB— by other means.” Id.
`
`We are persuaded by Patent Owner that the requested information
`
`could not reasonably be generated without a discovery request, because such
`
`information, if it exists, is beyond the public record. We determine that the
`
`third Garmin/Bloomberg factor weighs in favor of granting the Motion.
`
`
`
`
`
`9
`
`
`
`CBM2015-00161
`Patent 6,766,304 B2
`
`d. Fourth Factor—Easily Understandable Instructions
`
`The fourth Garmin/Bloomberg factor considers whether the request
`
`comprises instructions and questions that are easily understandable.
`
`Garmin, slip op. at 6–7; Bloomberg, slip op. at 5. Patent Owner argues that
`
`the request is straightforward and easily understood. Mot. 11–12. Petitioner
`
`does not address this factor.
`
`
`
`We are persuaded that the request comprises an instruction that is
`
`easily understandable and determine that the fifth Garmin/Bloomberg factor
`
`weighs in favor of granting the motion.
`
`
`
`e. Fifth Factor—Requests Not Overly Burdensome to Answer
`
`The fifth Garmin/Bloomberg factor considers whether requests are
`
`“overly burdensome to answer given the expedited nature” of the
`
`proceedings and “[r]equests [for additional discovery] should be sensible
`
`and responsibly tailored according to a genuine need.” Garmin, slip op. at 7;
`
`Bloomberg, slip op. at 5.
`
`
`
`Patent Owner argues that it’s request should not be burdensome or
`
`inconvenient because the volume of requested documents is not expected to
`
`be large or difficult to produce, as such documents are normally stored
`
`electronically. Mot. 12. Patent Owner also argues that the scope of its
`
`request is proper because a narrower scope of discovery “would allow
`
`Petitioner to subjectively withhold documents outlining the larger
`
`cooperative scheme between it and CQG and exclude items such as
`
`conversations on who would file and fund petitions on which patents.”
`
`Reply 5.
`
`10
`
`
`
`CBM2015-00161
`Patent 6,766,304 B2
`
`
`
`Petitioner argues that the request is unduly broad and that there is no
`
`legitimate reason for the discovery. See Opp. 1–15. According to
`
`Petitioner, discovery should be limited to communications and agreements
`
`between Petitioner and CQG regarding the funding, control, or direction of
`
`the challenge to the ’304 patent, and not include communications and
`
`agreements regarding filed or anticipated joint challenges to different
`
`patents, because there is no legitimate reason for such discovery. Id. at 5.
`
`
`
`We determine that Patent Owner’s request is not responsibly tailored
`
`according to a genuine need. Patent Owner requests “[a]ll communications
`
`and agreements between TradeStation and CQG relating to the filing or
`
`preparation of any post-grant proceeding (filed or anticipated) of any TT
`
`patent” and is not limited to communications or agreements concerning
`
`challenges to the ’304 patent. The scope of Patent Owner’s request is
`
`unduly broad.
`
`We determine that the fifth Garmin factor weighs in favor of denying
`
`the motion.
`
`
`
`f. RPX Corp. v. VirnetX Inc.
`
`Patent Owner argues that RPX Corp. v. VirnetX Inc., Case IPR2014–
`
`00171 is illustrative of why the motion should be granted. Mot. 7–8;
`
`Reply 4. According to Patent Owner, in RPX Corp., Petitioner was barred
`
`from filing petitions under 35 U.S.C. § 315 because evidence uncovered,
`
`through additional discovery, established that Apple was an unnamed RPI.
`
`Mot. 7–8. Patent Owner argues that:
`
`VirnetX used metadata suggesting an RPI issue to obtain
`discovery about multiple ‘RPX IPRs,’ not just one
`proceeding. . . . Here too, the RPI inquiry is based upon some
`
`11
`
`
`
`CBM2015-00161
`Patent 6,766,304 B2
`
`known evidence, involves actions across several proceedings,
`and requires discovery to provide a complete picture to
`determine whether CQG is an RPI.
`
`Reply 4.
`
`
`
`Petitioner argues that RPX Corp. is not illustrative because VirnetX’s
`
`motion for additional discovery, unlike Petitioner’s Motion, was supported
`
`by sufficient evidence of a relationship between Apple and RPX as to the
`
`subject patents of that proceeding to warrant the discovery in that case.
`
`Opp. 12–13.
`
`
`
`We determine that the facts of RPX Corp. are not sufficiently similar
`
`to the facts of this proceeding. In RPX Corp., VirnetX’s motion for
`
`additional discovery included evidence: 1) that RPX filed its petitions
`
`pursuant to a program in which Apple was RPX’s client, 2) that Apple paid
`
`RPX a fee to, among other things, file the petitions, and 3) that metadata in
`
`the RPX petitions demonstrated that Apple’s counsel was involved with the
`
`RPX’s petitions. See RPX Corp. v. VirnetX, IPR2014-00171, Paper 18 (Jan.
`
`27, 2014). Patent Owner’s evidence or reasoning in this proceeding is
`
`unlike VirnetX’s evidence and, for the reasons discussed above, Patent
`
`Owner’s evidence or reasoning is insufficient to establish good cause for
`
`additional discovery.
`
`
`
`g. Conclusion
`
`In considering the parties’ arguments and the Garmin/Bloomberg
`
`factors, we determine that Patent Owner has not met its burden in showing
`
`that there is “good cause” for additional discovery as required under 37
`
`C.F.R. § 42.224.
`
`
`
`12
`
`
`
`CBM2015-00161
`Patent 6,766,304 B2
`
`Accordingly, it is:
`
`ORDERED that Patent Owner’s motion for additional discovery is
`
`denied.
`
`
`
`
`
`PETITIONER:
`
`John C. Phillips
`Kevin Su
`FISH & RICHARDON, P.C.
`Phillips@fr.com
`CBM41919-0005CP1@fr.com
`
`
`PATENT OWNER:
`
`Erika H. Arner
`Joshua L. Goldberg
`Kevin D. Rodkey
`Rachel L. Emsley
`FINNEGAN, HENDERSON, FARABOW,
`GARRET & DUNNER, LLP
`erika.arner@finnegan.com
`joshua.goldberg@finnegan.com
`kevin.rodkey@finnegan.com
`rache.emsley@finnegan.com
`
`Steven F. Borsand
`TRADING TECHNOLOGIES INTERNATIONAL, INC.
`tt-patent-cbm@tradingtechnologies.com
`
`
`
`
`
`
`13
`
`
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
