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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`____________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`____________
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`TRADESTATION GROUP INC.,
`TRADESTATION SECURITIES, INC., IBG LLC, and
`INTERACTIVE BROKERS LLC,
`Petitioners,
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`v.
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`TRADING TECHNOLOGIES INTERNATIONAL, INC.,
`Patent Owner.
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`____________
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`Case CBM2015-001611
`Patent No. 6,766,304
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`___________
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`
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`PETITIONERS’ REPLY TO PATENT OWNER’S OPPOSITION TO
`PETITIONER’S MOTION TO EXCLUDE EVIDENCE
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`1 Case CBM2016-00035 has been joined with this proceeding.
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`Case CBM2015-00161
`Attorney Docket No. 41919-0005CP1
`TABLE OF CONTENTS
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` Exhibits 2211, 2216, 2218-2222, 2223, 2224, 2225, 2227-2229, 2232, 2239,
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`2247, 2251, 2273-2276, 2286-2288, and 2292-2296 are inadmissible. .................... 1
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`A.
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`The eSpeed/CQG Transcripts and the 32 Traders’ Declarations are not
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`admissible under FRE 807. ..................................................................................... 1
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`B.
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`TT’s attempt to horse trade on evidentiary issues is improper. .................... 3
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` Paragraphs 75, 83-86, 89-92, 94-97, 102-104, 106-111, 126-128, 131, 133,
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`134, 136-138, 140, 141, 151-153, 172 of Exhibit 2169 should be excluded. ........... 3
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` Exhibits 2210, 2223 (pages 13-14), 2240-2246, 2250, 2252-2272, 2277, 2212,
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`2213, 2214) are inadmissible. .................................................................................... 4
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` Exhibits 2030, 2032, and 2278 are inadmissible. ............................................... 5
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`Case CBM2015-00161
`Attorney Docket No. 41919-0005CP1
`The Board should exclude TT’s inadmissible evidence identified in Petition-
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`ers’ Motion to Exclude (Paper 111, “Mot.”). TT’s opposition (Paper 112, “Opp.”)
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`does nothing to cure its evidentiary shortcomings.
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`Exhibits 2211, 2216, 2218-2222, 2223, 2224, 2225, 2227-2229, 2232,
`2239, 2247, 2251, 2273-2276, 2286-2288, and 2292-2296 are inadmissible.
`TT knows its testimonial evidence is inadmissible. (See Ex. 2107 at 14:18-
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`19:22; 24:14-25; 27:16-25 (asking Board to waive the FRE 802 and 901).) Its op-
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`position asserts admissibility under FRE 807 and attempts to horse trade on evi-
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`dentiary issues. Both arguments fail.
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`A. The eSpeed/CQG Transcripts and the 32 Traders’ Declarations
`are not admissible under FRE 807.
`The eSpeed/CQG Transcripts and the 32 Traders’ Declarations—which are
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`indisputably hearsay—are not admissible under FRE 807. TT asserts that the “re-
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`sidual exception” applies to this evidence because it has “the same circumstantial
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`guarantees of trustworthiness” as the testimony at issue in Apple v. VirnetX and
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`declarations created for these proceedings. (Opp. at 5 (citing, IPR2015-00811, Pa-
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`per 44).) This interpretation of Rule 807 eviscerates the rule against hearsay, which
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`provides only limited exceptions for testimony in prior proceedings. See FRE
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`804(b)(1). FRE 807 does not confer “a broad license” on judges “to admit hearsay
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`statements that do not fall within one of the other exceptions” Neste Oil OYJ v.
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`REG Synthetic Fuels, LLC, IPR2013-00578, Paper 53, at 10 (P.T.A.B. Mar. 12,
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`1
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`Case CBM2015-00161
`Attorney Docket No. 41919-0005CP1
`2015) (citation omitted). It only applies in “exceptional cases.” Id. This case is not
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`exceptional, and TT has not shown otherwise. Thus, FRE 807 does not cure TT’s
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`hearsay evidence. The Board has excluded testimonial hearsay evidence under sim-
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`ilar circumstances in the past. See Captioncall, L.L.C. et al. v. Ultratec, Inc.,
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`IPR2015-00637, Paper 98, at 17-18 (P.T.A.B. Sept. 7, 2016). To the extent TT
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`suggests that Apple holds otherwise, that decision is easily distinguishable. First,
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`both patent owner and petitioner in Apple were parties to the underlying district
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`court litigation. See Apple, Paper 44, at 68-70. Second, the Board in Apple deter-
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`mined that the residual exception applied where the proponent analyzed each fac-
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`tor of FRE 807 “in detail.” See id. 69. Here, TT provides no actual analysis under
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`FRE 807(a)(1). Third, the Board in Apple merely adopted the petitioner’s analysis
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`without explaining why that case was “exceptional.” See id. at 68-70.
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`And TT’s hearsay evidence is not “more probative than any other evidence
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`that TT could obtain through reasonable efforts.” (Opp. at 8.) TT could have ob-
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`tained declarations. Indeed, TT represented that it had been in contact with at least
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`some of its declarants. (Ex. 2017, 25:17-26:20.) Instead, TT attempts to shift the
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`burden to Petitioners to seek to compel their depositions. This is misguided. Peti-
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`tioners’ have no obligation to “cure” TT’s hearsay evidence. And TT did not offer
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`their depositions in response to Petitioners’ objections.
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`Finally, TT’s assertion that it will be “deprived of due process” if the Board
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`2
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`Case CBM2015-00161
`Attorney Docket No. 41919-0005CP1
`excludes its evidence is meritless and does not satisfy FRE 807(a)(4). See Caption-
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`call, Paper 98, at 17. Holding TT to the same set of evidentiary rules as every other
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`party to a post-grant proceeding is not a denial of due process. Accordingly, the
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`Board should exclude the eSpeed/CQG Transcripts and the Traders’ Declarations.
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`B. TT’s attempt to horse trade on evidentiary issues is improper.
`TT blames Petitioners and the Board for its evidentiary shortcomings, (see
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`Opp. at 1-4, 8.) asserting that there is no justification for the Board to treat the
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`eSpeed/CQG Transcripts and 32 Traders’ Declarations differently from Petitioners’
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`Exhibit 1010 in the related proceeding, CBM2015-00181 (2005 Kawashima depo-
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`sition transcript). (Opp. at 3-4.) But TT waived any objection it had to the admissi-
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`bility of Exhibit 1010 because it did not move to exclude that evidence. Rather, TT
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`conceded its admissibility. (See CBM2015-00181, Paper 109 at 2-7, 3.) The un-
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`contested admissibility of Exhibit 1010 has no bearing here. Moreover, TT ques-
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`tioned the witness at the 2005 deposition of Kawashima.
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`Paragraphs 75, 83-86, 89-92, 94-97, 102-104, 106-111, 126-128,
`131, 133, 134, 136-138, 140, 141, 151-153, 172 of Exhibit 2169 should be
`excluded.
`TT provides no defense of ¶¶ 75, 97, 104, 106-111, 126-128, 131, 133, 134,
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`136-138, 140, 141, 151-153, 172. Thus, these paragraphs should be excluded out-
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`right. As for the challenged paragraphs, TT argues that “Mr. Thomas’s statements
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`Case CBM2015-00161
`Attorney Docket No. 41919-0005CP1
`are not improper expert testimony because an expert is allowed leeway to use hear-
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`say reasonably.” (Opp. at 9.) But Mr. Thomas is not “interpreting” evidence, “ex-
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`plaining the basis of his expert opinion,” or “articulating the effect the evidence
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`would have on a person of skill in the art” as TT suggests. (Opp. at 10.) As ex-
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`plained in Petitioners’ Motion, Mr. Thomas simply quotes, summarizes, and/or
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`characterizes hearsay statements made by declarants outside of this proceeding.
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`And Petitioners’ arguments do not “relate to the appropriate weight to assign the
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`evidence” because there is a threshold issue as to whether the evidence qualifies as
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`expert opinion. See United States v. Dukagjini, 326 F.3d 45, 58 (2d Cir. 2003). Ac-
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`cordingly, the Board should exclude at least the rank hearsay portions of Exhibit
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`2169 that were challenged in Petitioners’ Motion.
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` Exhibits 2210, 2223 (pages 13-14), 2240-2246, 2250, 2252-2272,
`2277, 2212, 2213, 2214) are inadmissible.
`Regarding Petitioners’ authenticity objections, TT argues that “most” of the
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`exhibits are authentic because they were produced in response to discovery re-
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`quests or admitted without objection in a district court proceeding. (Opp. at 12.)
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`This argument effectively nullifies the authentication requirements of FRE 901.
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`Whether an unrelated party waived its objections to the admissibility of TT’s evi-
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`dence has no bearing here. TT also argues that the Third Party Emails are authenti-
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`cated due to their “distinctive characteristics” under FRE 901(b)(4). This argument
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`fails as the emails are not self-authenticating under FRE 902, and TT has submitted
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`4
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`Case CBM2015-00161
`Attorney Docket No. 41919-0005CP1
`no extrinsic evidence to show the existence of any distinctive characteristics. See,
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`e.g., Devbrow v. Gallegos, 735 F.3d 584, 586 (7th Cir. 2013).
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`Regarding hearsay, TT argues that the Third Party Emails are not offered for
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`their truth but rather “to show secondary considerations.” (Opp. at 14.) Secondary
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`considerations are not an exception to rule against hearsay. See, e.g., Captioncall,
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`Paper 98, at 15. TT’s assertion that these exhibits are admissible regardless of
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`whether they are hearsay because Mr. Thomas relied upon them is also wrong. The
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`mere fact that an expert purports to rely on a document does not cause that docu-
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`ment to be admissible. In re James Wilson Assocs., 965 F.2d 160, 173 (7th Cir.
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`1992). Finally, TT provides no defense of the Brumfield Sketch and Animations
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`and therefore the Board should exclude Exhibits 2212, 2213, 2214.
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` Exhibits 2030, 2032, and 2278 are inadmissible.
`TT makes the incredible argument that these exhibits are offered for the pur-
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`pose of showing how a third-party and a jury reacted to the evidence in these pro-
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`ceedings. (Opp. at 15.) But as explained in Petitioners’ Motion, the third-party’s
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`and jury’s reactions to the evidence in these proceedings does nothing to make any
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`facts in this proceeding more or less probable. (See Mot. at 10-12.) Because irrele-
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`vant evidence is not admissible, the Board should exclude Exhibits 2030, 2032,
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`and 2278 under FRE 402.
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`5
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`Case CBM2015-00161
`Attorney Docket No. 41919-0005CP1
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`Respectfully submitted,
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`/John C. Phillips/
`John C. Phillips, Reg. No. 35,322
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`Dated: October 14, 2016
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`6
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`Case CBM2015-00161
`Attorney Docket No. 41919-0005CP1
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`CERTIFICATE OF SERVICE
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`Pursuant to 37 CFR §§ 42.6(e)(4) and 42.205(b), the undersigned certifies
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`that on October 14, 2016, a complete and entire copy of this Petitioner’s Reply to
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`Patent Owner’s Opposition to Petitioner’s Motion to Exclude Evidence was pro-
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`vided via email to the Patent Owner by serving the correspondence address of rec-
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`ord as follows:
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`Erika H. Arner, Joshua L. Goldberg, Kevin D. Rodkey,
`Rachel L. Emsley, and Cory C. Bell
`Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
`Email: erika.arner@finnegan.com
`joshua.goldberg@finnegan.com
`kevin.rodkey@finnegan.com
`rachel.emsley@finnegan.com
`cory.bell@finnegan.com
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`Steven F. Borsand
`Trading Technologies International, Inc.
`Email: tt-patent-cbm@tradingtechnologies.com
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`Michael D. Gannon, Leif R. Sigmond, Jr., and Jennifer M. Kurcz
`McDonnell Boehnen Hulbert & Berghoff LLP
`Email: gannon@mbhb.com
`sigmond@mbhb.com
`kurcz@mbhb.com
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`/Diana Bradley/
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`Diana Bradley
`Fish & Richardson P.C.
`60 South Sixth Street, Suite 3200
`Minneapolis, MN 55402
`(858) 678-5667
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