Paper No. ____
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` Filed: June 15, 2016
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`__________________
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`__________________
`TRADESTATION GROUP, INC.,
`TRADESTATION SECURITIES, INC., IBG LLC, and
`INTERACTIVE BROKERS LLC.
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`Petitioner
`v.
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` TRADING TECHNOLOGIES INTERNATIONAL, INC.
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`Patent Owner
`_________________
`Case CBM2015-00179
`U.S. Patent No. 7,533,056
`_________________
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`Patent Owner’s Motion for Additional Discovery
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` Filed: June 15, 2016
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`__________________
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`__________________
`TRADESTATION GROUP, INC.,
`TRADESTATION SECURITIES, INC., IBG LLC, and
`INTERACTIVE BROKERS LLC.
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`Petitioner
`v.
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` TRADING TECHNOLOGIES INTERNATIONAL, INC.
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`Patent Owner
`_________________
`Case CBM2015-00179
`U.S. Patent No. 7,533,056
`_________________
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`Patent Owner’s Motion for Additional Discovery
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`Case CBM2015-00179
`U.S. Patent No. 7,533,056
`Patent Owner (“TT”) submits this motion under 37 C.F.R. § 42.51(b)(2),1 as
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`authorized by the Board. Ex. 2140. TT seeks discovery of the documents listed in
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`Exhibit 21522, and the databases listed in Exhibit 2153.3
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`I.
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`INTRODUCTION
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`Petitioners refuse to produce highly relevant evidence in their possession
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`and already produced to TT in the litigation, and which clearly contradicts
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`positions being taken before the Board. The evidence sought is the most relevant
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`with respect to certain issues, speaking directly to the legal and factual issues of
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`these proceedings. Petitioners claim that the information is irrelevant, and object to
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`TT’s use of the documents based on the district court protective order.
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`The district court judge in the co-pending litigation ordered limited
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`additional discovery notwithstanding the stay explaining: “I believe the discovery
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`1 TT notes that it submits identical motions in CBM2015-000161, -172, -179, -181,
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`and -182. Although certain of these proceedings do not include instituted prior art
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`grounds, the evidence discussed herein is equally applicable to all proceedings,
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`given the Board’s embedding of obviousness-type analysis within CBM and/or
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`§ 101 analysis.
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`2 The relevance of each document is listed in Exhibit 2155.
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`3 TT maintains that this is Routine discovery as it is facially contrary to Petitioners’
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`positions.
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`1
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`U.S. Patent No. 7,533,056
`materials will be beneficial, both when the case resumes and also before the
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`PTAB.” Ex. 2142 (emphasis added). The trial judge thus took the extraordinary
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`step of re-opening discovery in a stayed matter to bring forward highly relevant
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`evidence for the benefit of the Board. Id. This evidence is crucial to the Boards’
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`meaningful consideration of patentability under §§ 101 and 103, as well as CBM
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`arguments, and is at a minimum, appropriate for production onto this record as
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`Additional Discovery. Without access to this discovery that is of no burden for
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`Petitioners to provide and which is most pertinent for discrediting Petitioners’
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`assertions, TT will be materially prejudiced. The production ordered by the district
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`court, despite the stay and over objections, was scheduled to be completed June 10,
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`with depositions on June 8, 9, and 13. Noting the trial court’s schedule, the Board
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`moved dates for TT’s responses to June 17. See CBM2016-00182, Paper 38, at 6-7
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`But Petitioners have refused production here.
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`The documents relate to for example, non-obviousness, including secondary
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`considerations of non-obviousness, the state-of-mind of a skilled artisan at the time
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`of the invention through the development of Matrix (see, e.g., Ex. 2144
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`, the development history of the claimed
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`features at TS (including evidence tending to show copying by TradeStation) and
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`the importance of the claimed features to IB (see, e.g., Ex. 2156
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`U.S. Patent No. 7,533,056
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`. The parties have agreed to the default protective
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`order for only a handful of the documents for the purposes of this Motion, and so
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`TT has only summarized each documents relevance in Ex. 2155.
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`Such evidence supports the inventive concept analysis under § 101, as well
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`as CBM analysis. Other evidence shows that TS and IB view their products as
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`implementing the claimed features as “technological” and as an “order entry tool”,
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`contradicting Petitioners § 101 and CBM arguments. (e.g., Ex. 2143
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`; Ex. 2145
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`; Ex. 2157
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`. Further, IB’s head of software development has stated that
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`Ex. 2158. This is contrary to the position taken by the Petitioner’s
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`expert, Mr. Román, who opined that electronic trading screens are purely aesthetic.
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`The requested documents are easily identifiable and accessible: (1) 95
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`3
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`U.S. Patent No. 7,533,056
`documents, identified by Bates number or other identifier understandable by
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`litigation counsel (Ex. 2152); (2) transcripts of TS and IB depositions held on
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`June 8, 9, and 13, 2016, as ordered by the district court (id); and (3) documents
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`improperly withheld by Petitioners because they allegedly include identifying
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`information of customers (Ex. 2153).
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`II. LEGAL FOUNDATION
`Secondary considerations, when present, must be considered in determining
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`obviousness. Nike Inc. v. Adidas AG, 812 F.3d 1326, 1339 (Fed. Cir. 2016). “In
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`fact, we have expressly stated that when secondary considerations are present . . . it
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`is error not to consider them.” Id. (quoting omitted) (remanding to PTAB for
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`consideration of objective indicia). When “considerable record evidence on
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`objective indicia, including unexpected results, expert skepticism, copying,
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`commercial success, praise by others (even from the accused infringer []), failure
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`by others, and long-felt need” is available, as here, it should be addressed. Mintz v.
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`Dietz & Watson Inc., 679 F.3d 1372, 1379 (Fed. Cir. 2012). A tribunal’s obligation
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`under Graham’s fourth factor is not waived “by some procedural requirement that
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`ducks consideration of evidence presented . . . .” Id. at 1378.
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`A patent is a significant property right to which due process protections
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`apply, and CBMR provides a means by which petitioners seek to invalidate that
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`grant. U.S. Const. amend. V.; 35 U.S.C. § 261; Festo Corp. v. Shoketsu Kinzoku
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`Kogyo Kabushiki Co., 535 U.S. 722, 730 (2002) (“The [patent] monopoly is a
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`property right.”). Patent owners must, therefore, be “given a meaningful
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`opportunity to present their case.” Mathews v. Eldridge, 424 U.S. 319, 349 (1976).
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`Because consideration of objective indicia “can be the most probative evidence of
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`non-obviousness in the record, and enable the court to avert the trap of hind-sight,”
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`Crocs, Inc. v. ITC, 598 F.3d 1294, 1310 (Fed. Cir. 2010); Nike, Inc., 812 F.3d at
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`1339, the risk of error in deciding patentability would be severe if such evidence
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`was not discoverable here. Mathews, 424 U.S. at 335.
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`Additional discovery may be ordered if the party moving for the discovery
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`shows good cause in a CBM proceeding. See 35 U.S.C. § 316(a)(5); § 326(a)(5);
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`37 C.F.R. § 42.51(b)(2); § 42.224(a). The Board has allowed additional discovery
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`on similar facts. See Chevron N. America v. Milwaukee Electric Tool, IPR2015-
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`00595, Paper 31 (Oct. 30, 2015) (granting additional discovery of documents
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`litigation counsel deemed relevant to secondary considerations under the higher
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`“interests of justice” standard for IPRs).
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`III. REQUESTED DOCUMENTS ARE APPROPRIATE AS
`ADDITIONAL DISCOVERY
`“[D]iscovery before the Board is focused on what the parties reasonably
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`need to respond to the grounds raised by an opponent.” 77 77 Fed. Reg. 157,
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`48,761, 48,761 (emphasis added). As the Federal Circuit reaffirmed, e.g., Nike Inc.,
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`812 F.3d at 1339, secondary considerations evidence is “reasonably need[ed]” to
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`U.S. Patent No. 7,533,056
`respond to the grounds raised in this matter—obviousness under § 103. The same
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`evidence is relevant to whether an inventive concept exists in the claimed
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`invention under § 101. And below, TT shows “good cause” as to why the
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`discovery sought should be produced as Additional Discovery.
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`TT’s litigation counsel has now identified specific documents and obtained
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`witness testimony validating predictions of relevance. This discovery would have
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`been used before the trial court to support TT’s secondary considerations positions
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`and to refute allegations under § 101. As the Illinois case is stayed pending the
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`outcome of these CBMs, however, this is the only forum in which TT can present
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`this highly relevant evidence. Failure to obtain this discovery here would be highly
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`prejudicial to TT, denying the full and fair opportunity to defend its patents before
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`the Board. Petitioners should not be permitted to withhold production.
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`A. Bloomberg Factors
`In Bloomberg, the Board applied various factors as guideposts to help
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`determine if the Additional Discovery request is for “good cause” in a CBM
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`proceeding. Bloomberg Inc. v. Markets-Alert Pty Ltd., No. CBM2013-00005
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`(JYC), (PTAB May 29, 2013) (decision wherein the board modified the Garmin
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`factors for CBM’s lower “good cause” standard); see also Garmin Int’l, Inc. v.
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`Cuozzo Speed Techs. LLC, Case No. IPR2012-00001, Paper 26 at 6–7 (PTAB,
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`Mar. 5, 2013) (applying higher “interests of justice” standard). Here, each
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`U.S. Patent No. 7,533,056
`Bloomberg factor favors granting the request for Additional Discovery:
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`1.
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`Useful Material Has Already Been Discovered and Is More
`than Possibility or Mere Allegation
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`TT represents, based on input from its litigation counsel, that the requested
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`production of 95 documents, three deposition transcripts, and four databases
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`contains information that is highly relevant to, and inconsistent with, Petitioners’
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`arguments related to the issue of secondary considerations, § 101, and CBM.
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`In the corresponding litigation, Petitioners produced upwards of 90,000
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`documents, which counsel has culled to only the most “useful.” Under Garmin,
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`“‘useful’ means favorable in substantive value to a contention of the party moving
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`for discovery.” Garmin, Paper 26 at 7-8 (emphasis added). Secondary
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`considerations is of great “substantive value” to a nonobviousness analysis, and is
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`relevant to both the proposed obviousness grounds and the assertions that the
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`claimed technology was obvious under the CBM analysis. See, e.g., Nike Inc., 812
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`F.3d at 1339; Ashland Oil, Inc. v. Delta Resins & Refractories, Inc., 776 F.2d 281,
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`306 (Fed. Cir. 1985) (objective indicia “may be the most pertinent, probative, and
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`revealing evidence available to the decision maker in reaching a conclusion on the
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`obviousness/nonobviousness issue”).
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`As noted above, these documents will support non-obviousness, including
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`secondary considerations such as copying (see infra), commercial success (see Ex.
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`2146
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`; Ex. 2147
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`7
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`; Ex. 2148
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` and industry praise (Ex. 2144
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`; Ex. 2143
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`U.S. Patent No. 7,533,056
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`In Chevron, on nearly identical facts, the Board held that:
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`Patent Owner has made a narrow request for documents
`it asserts will have a bearing on the issue of secondary
`considerations. In this case, Patent Owner’s assertion is
`not based on mere speculation, but on direct input from
`its litigation counsel. Although Patent Owner has not
`identified at this time a definite nexus between the
`desired documents and the claims at issue, it has
`provided sufficient reasoning tending to show that the
`documents will have substantive value with respect to the
`issue of secondary considerations.
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`Chevron Op. at 3 (applying higher “interests of justice standard”).
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`Under these similar circumstances, there is no need at this stage to
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`demonstrate nexus for an order granting additional discovery. Id. Here, TT has
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`further identified such a nexus by pointing to the relevant features and tying them
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`to the claimed invention (e.g., price ladder with single-action order entry).
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`Accordingly, the relevance of the documents in this case far exceeds the
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`U.S. Patent No. 7,533,056
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`requirement of Bloomberg’s first factor.
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`The deposition transcripts likewise contain information that is relevant to,
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`and inconsistent with, Petitioner’s arguments. For example, Mr. Bartleman, TS’s
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`President and 30(b)(6) deponent, admitted that
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`(Ex. 2151, 212:3-219:7, see Ex. 2144, 57). Mr. Bartleman further admitted that
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`(Ex. 2151, 221:24-222:12). Mr. Bartleman further admitted that
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`(Ex. 2151, 330:7-22). And, contrary to Petitioner’s experts position that
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`the claims are purely aesthetic, IB’s 30(b)(6) witness and head of software
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`development, Mr. Galik, stated
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`Ex. 2154, 404:12-14).
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`Regarding the documents on Ex. 2153, although these items have not yet
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`been produced in the litigation, the existence of these documents (and their
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`relevance) is more than a mere possibility or allegation. (See Ex. 2150, 97:18-
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`98:13 (CRM Database); id., 136:10-17, 137:4-138:6; Ex. 2151, 40:14-42:7 (Beta
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`Forum); Ex. 2150, 43:24-45:19, 243:7-23 (Jira/TFS)), (Ex. 2154, 410:4-411:22,
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`414:11-416:14, 419:20-421:6 (“Jeet” Database).
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`Patent Owner Does Not Seek Petitioners’ Litigation
`Positions
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`2.
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`TT does not seek Petitioners’ litigation positions, nor will any positions be
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`revealed at least because all of the documents listed in Ex. 2152 have already been
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`produced to TT’s litigation counsel. No new information will be conveyed. See
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`Bloomberg, at 5; Chevron Op. at 3 (“we are persuaded that Patent Owner does not
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`seek Petitioner’s litigation positions because the documents sought already have
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`been produced to Patent Owner’s litigation counsel”). The evidence in Ex. 2153
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`likewise does not seek litigation positions, but rather includes information
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`representing customer feedback, requests, and praise for claimed features (Ex.
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`2150, 97:18-98:13(CRM Database), see also Ex. 2149 (exemplary data from CRM
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`Database)), user reaction to early usage of the Matrix window (Ex. 2150, 136:10-
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`17, 137:4-138:6; Ex. 2151 40:14-42:7 (Beta Forum)), and records of bugs/revisions
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`made to TradeStation’s software as a result of customer feedback (Ex. 2150,
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`43:24-45:19, 243:7-23 (Jira/TFS)). The information sought is factual.
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`Patent Owner Cannot Generate Equivalent Information
`3.
`The Documents relate to Petitioners’ internal analysis and perceptions. See
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`Bloomberg, at 5 (holding that “good cause standard” bars requests for information
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`that can be reasonably generated without a discovery request). This information
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`can only be obtained from TS and IB, the sole parties in control of such
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`documents. TT cannot independently generate this information.
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`U.S. Patent No. 7,533,056
`The Request Has Easily Understandable Instructions
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`4.
`CBM additional discovery requests must include easily understandable
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`instructions. Id. As explained, TT requests are specifically identified materials
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`from the corresponding litigation production, and the transcripts of specific
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`deposition testimony. See Chevron Op. at 4 (finding request for specifically
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`identified documents, which have been previously produced in the related district
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`court litigation, is focused and easily understandable). The third category, the
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`documents withheld, were subject to a Motion to Compel, subject to requests for
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`the specific information withheld during the depositions, and thus readily
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`identifiable by TS and IB, as they have already considered them. The witnesses
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`testified as to the existence of relevant information within these databases. (See,
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`e.g., Ex. 2151, 40:14-42:7). TS thus can easily understand the documents TT seeks.
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`The Request Is Not Overly Burdensome to Answer
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`5.
`With respect to the documents in Ex. 2152, Petitioners can simply allow
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`TT’s litigation counsel to provide this information to its CBM counsel. Petitioners
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`need not follow any instructions or conduct a search for responsive information.
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`Accordingly, there are zero financial costs, human resources, or time constraints
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`associated with TT’s request for these documents and transcripts. As in Chevron,
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`the request for previously-produced and identified documents is not overly
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`burdensome. The documents in list are in TT’s litigation counsel’s possession—
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`U.S. Patent No. 7,533,056
`they can be easily reproduced here. The documents in Ex. 2153 has been collected
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`and reviewed by TS and/or IB in the district court; or were confirmed to exist by
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`the deponents, and either require only a password for TT to access a database or
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`require TS and/or IB to extract data from a database. As such, the burden for TS to
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`produce the documents in the PTAB is minimal.
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`Additional Factors Favor Patent Owner’s Request
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`6.
`Petitioners argue that the requested discovery would risk disclosure of
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`confidential information. Ex. 2140, 23 But, “[t]he fact that the information may be
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`confidential, . . . does not shield it from discovery.” Chevron Op. at 4. Instead, “if
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`any confidential material is made of record in these proceedings, the relevant party
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`may file a motion to seal that material along with a proposed protective order
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`pursuant to § 42.54.” Id.
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`IV. ADJUSTING SCHEDULE
`The Board previously extended the deadline for the TT Responses in
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`CBM2016-00179, -181 and -182 to accommodate potential production, but due
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`Petitioners unwillingness to produce documents here, TT has had to divert
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`resources into several meet-and-confer calls, the Board call, an emergency motion
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`in the district court, and to prepare this paper during TT’s Response period, and
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`accordingly, TT seeks an extension to the time for its Responses.
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`Dated: June 15, 2016
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`/Rachel L. Emsley/ (Reg. No. 63,558)
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`U.S. Patent No. 7,533,056
`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that a copy of the foregoing Patent
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`Owner’s Motion for Additional Discovery was served on June 15, 2016, via
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`email directed to counsel of record for the Petitioner at the following:
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`Robert Sokohl
`rsokohl-PTAB@skgf.com
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`Lori Gordon
`lgordon-PTAB@skgf.com
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`Richard Bemben
`rbemben-PTAB@skgf.com
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`John C. Phillips
`CBM41919-0007CP1@fr.com
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`PTAB@skgf.com
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`/Valencia Daniel/
`Valencia Daniel
`Litigation Legal Assistant
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`Finnegan, Henderson, Farabow, Garrett
`& Dunner, LLP
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`3
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`Dated: June 15, 2016
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