UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`
`
`
`
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`IBG LLC, INTERACTIVE BROKERS LLC,
`TRADESTATION GROUP, INC., TRADESTATION SECURITIES, INC.,
`TRADESTATION TECHNOLOGIES, INC., and IBFX, INC.,
`Petitioner
`
`v.
`
`TRADING TECHNOLOGIES INTERNATIONAL, INC.
`Patent Owner
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Case CBM2015-00181
`Patent No. 7,676,411
`
`
`
`
`
`
`
`
`
`
`
`
`PETITIONERS’ REQUEST FOR REHEARING
`
`
`
`
`
`
`
`
`
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`IBG LLC, INTERACTIVE BROKERS LLC,
`TRADESTATION GROUP, INC., TRADESTATION SECURITIES, INC.,
`TRADESTATION TECHNOLOGIES, INC., and IBFX, INC.,
`Petitioner
`
`v.
`
`TRADING TECHNOLOGIES INTERNATIONAL, INC.
`Patent Owner
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Case CBM2015-00181
`Patent No. 7,676,411
`
`
`
`
`
`
`
`
`
`
`
`
`PETITIONERS’ REQUEST FOR REHEARING
`
`
`
`CBM2015-00181
`Patent No. 7,676,411
`
`I.
`
`Statement of Relief Requested
`
`Petitioners request rehearing of the Board’s April 15, 2016 Order (Paper 34)
`
`(“Order”) authorizing cross examination of Mr. Atsushi Kawashima. Prior
`
`authorization is not required to file this Request for Rehearing. 37 C.F.R. §
`
`42.71(d). “The request must specifically identify all matters the party believes the
`
`Board misapprehended or overlooked, and the place where each matter was
`
`previously addressed in a motion, an opposition, or a reply.” Id.
`
`II.
`
`Introduction
`
`The Order sets out that “the parties disagree as to whether cross examination
`
`of Petitioner’s witness, Mr. Atsushi Kawashima, falls under the routine discovery
`
`rule or under the additional discovery rule.” (Order, at 1-2.) Then, without
`
`resolving this disagreement, and without hearing from Petitioners, the Order
`
`concludes that “Patent Owner is authorized to cross examine Mr. Atsushi
`
`Kawashima.” (Order, at 3.) This arbitrary and capricious conclusion should be
`
`reversed for at least two reasons.
`
`First, to the extent that the basis for authorizing the cross-examination of Mr.
`
`Kawashima is “routine discovery,” the Order overlooks the Board’s consistent
`
`interpretation of the Rule for routine discovery. Numerous decisions from the
`
`Board stand for the proposition that routine discovery does not apply to preexisting
`
`evidence not prepared for the instant proceeding. Petitioners have no relationship
`1
`
`
`
`
`
`CBM2015-00181
`Patent No. 7,676,411
`with or control over Mr. Kawashima. The only testimony of Mr. Kawashima relied
`
`upon by Petitioners is recorded testimony from a deposition taken on November
`
`21, 2005, in a prior litigation involving Patent Owner involving events that
`
`occurred in 1998. Unlike Patent Owner, Petitioners were not involved in this prior
`
`litigation and did not participate in this deposition.
`
`Second, to the extent that the basis for authorizing the cross-examination of
`
`Mr. Kawashima is “additional discovery,” the Order overlooks the requirements
`
`for granting additional discovery in CBM proceedings. Patent Owner must show
`
`“good cause” for the additional cross-examination of Mr. Kawashima under the
`
`modified Garmin factors outlined in Bloomberg Inc. v. Markets-Alert Pty Ltd.,
`
`CBM2013-00005, Paper 32 (May 29, 2013). No such showing has been made here,
`
`and the Order makes no reference to “good cause” or the Garmin factors.
`
`III. Factual Background
`On March 21, 2016, Patent Owner filed an objection to Petitioner’s Exhibit
`
`1010 as hearsay. (Paper 30, at 1, 3-4.)1 Exhibit 1010 is a transcript of a deposition
`
`
`1 Exhibit 1010 was used against Patent Owner in prior CBM proceedings
`
`and Patent Owner did not object to Exhibit 1010 on the basis of hearsay in any of
`
`those prior proceedings. See Trading Technologies Int’l, Inc. v. TD Ameritrade
`
`
`
`2
`
`
`
`CBM2015-00181
`Patent No. 7,676,411
`of Mr. Kawashima, taken on November 21, 2005, in a prior litigation involving
`
`Patent Owner. Petitioners were not parties to this prior litigation and did not
`
`participate in the deposition Mr. Kawashima. The deposition transcript is
`
`preexisting documentary evidence that was filed previously in another proceeding.
`
`The deposition transcript is referenced in the petition (Paper 7, at 11) and the
`
`institution decision (Paper 26, at 23-27). The deposition transcript is relevant to
`
`whether the TSE user manual was publicly available and thus prior art to the
`
`challenged patent. (Id.)2
`
`During a March 23, 2016 Board call held in this matter, Petitioners
`
`explained that counsel for Patent Owner attended the deposition of Mr. Kawashima
`
`and had an opportunity to cross-examine Mr. Kawashima. (Ex. 1041, Transcript of
`
`March 23, 2016 Board Call, at 4:14-21.) Petitioners also argued that they are under
`
`
`Holding Corp., CBM2014-00131, 133, 135 and 137. Patent Owner also did not
`
`request a deposition of Mr. Kawashima in those prior proceedings.
`
`2 Exhibit 1010 is former testimony of an unavailable, third party witness
`
`given in a lawful deposition where Patent Owner had an opportunity to cross-
`
`examine. Exhibit 1010 fits within the hearsay exceptions of FRE Rules 804 and
`
`807 and, as such, is admissible evidence that can be relied upon at trial in this
`
`proceeding.
`
`3
`
`
`
`CBM2015-00181
`Patent No. 7,676,411
`no obligation to make Mr. Kawashima available for cross-examination under
`
`routine discovery, as the deposition transcript was not prepared for this preceding.
`
`(Ex. 1041, at 5:3-10.) Notwithstanding, as a courtesy, Petitioners indicated that
`
`they were in the process of locating Mr. Kawashima, a resident of Japan, to assess
`
`his current availability to provide testimony in this proceeding. (Id., at 10:12-
`
`11:16.) Subsequent to this Board call, Petitioners informed Patent Owner that Mr.
`
`Kawashima, who remains an employee of the Tokyo Stock Exchange, was
`
`unwilling to come to the United States for a deposition in this proceeding. Mr.
`
`Kawashima also indicated he was unwilling to be deposed in Japan.3 Mr.
`
`Kawashima has no relationship with Petitioners and he is not under their control.
`
`In response, Patent Owner twice approached the Board by email. First, on
`
`April 5, 2016, Patent Owner sought authorization to file a motion to dismiss
`
`grounds relying on the TSE reference from this proceeding. (Ex. 1039.) The Board
`
`3 It is Petitioners’ understanding that a voluntary deposition taken in Japan must be
`
`taken at the U.S. Embassy in Tokyo and can take many months to schedule.
`
`Further, Japan is not a signatory to the Hague Convention on the Taking of
`
`Evidence Abroad in Civil or Commercial Matters (1980). Thus, it is Petitioners’
`
`understanding that neither a U.S. Court, nor the Board, can compel testimony in
`
`Japan of a Japanese citizen because it will violate Japan’s judicial sovereignty.
`
`4
`
`
`
`CBM2015-00181
`Patent No. 7,676,411
`denied this request, indicating that “Patent Owner may include such arguments in
`
`its Patent Owner Response.” (Ex. 1039.) Second, Patent Owner approached the
`
`Board on April 12, 2016, seeking the deposition of Mr. Kawashima under routine
`
`discovery, or in the alternative, leave to file a motion for additional discovery. (Ex.
`
`1040.) Recognizing that Mr. Kawashima’s testimony was not provided in an
`
`affidavit prepared for this proceeding, and, therefore, Patent Owner’s discovery
`
`request was “outside of the situations specifically covered by the rules,” Patent
`
`Owner requested that the Board “otherwise order” that Mr. Kawashima be made
`
`available for cross-examination under 37 C.F.R. § 42.51(b)(1). (Id.) The Board did
`
`not conduct a conference call with the parties or permit briefing on the issue, but,
`
`instead, issued the Order of April 15, 2016, authorizing Patent Owner to cross
`
`examine Mr. Kawashima, concluding that “it is Petitioner’s responsibility to secure
`
`the availability of Mr. Kawashima.” (Order, at 3.)
`
`IV. Argument
`A. The Order Overlooks the Law on Routine Discovery
`Under the Rule for “routine discovery,” 37 C.F.R. § 42.51(b)(1)(ii),
`
`“[e]xcept as the Board may otherwise order . . . [c]ross examination of affidavit
`
`testimony is authorized within such time period as the Board may set.” The Board
`
`has consistently interpreted this Rule as not applying to preexisting testimony not
`
`5
`
`
`
`CBM2015-00181
`Patent No. 7,676,411
`prepared for the instant proceeding. In CBS Interactive Inc. v. Helferich Patent
`
`Licensing, LLC, IPR2013-00033, Paper 85 (Sept. 3, 2013), the Board explained:
`
`[I]f the [testimony relied upon] was prepared for the purposes of the
`instant inter partes review, cross-examination of the witness is
`permitted as routine discovery. In contrast, if the [testimony] was not
`prepared for purposes of the instant inter partes review—such as
`preexisting documentary evidence that was filed previously in another
`proceeding—cross-examination of the witness would not be provided
`as routine discovery under 37 C.F.R. § 42.51(b)(1)(ii). In the latter
`situation, the Board will take into consideration whether a party has
`had an opportunity to cross-examine the witness and will give the
`[testimony] appropriate weight, if any.
`
`In CBS, the pre-existing document was a declaration filed in a prior inter
`
`
`
`partes reexamination proceeding. Consequently, the declarant would not have been
`
`deposed. This is because although reexamination procedure allows for submission
`
`of evidence in affidavit form (37 C.F.R. §§ 1.131, 1.132), the rules do not provide
`
`for cross-examination of those affiants. See 37 C.F.R. §§ 1.902–1.997. Even under
`
`those circumstances, without any opportunity to cross-examine, the Board denied
`
`routine discovery in CBS. Here, counsel for Patent Owner actually attended the
`
`deposition of Mr. Kawashima and had an opportunity to cross-examine him. The
`
`Board’s reasoning in CBS has been followed by numerous panels to deny routine
`
`discovery relating to preexisting testimony not prepared for the instant proceeding.
`
`See, e.g., GEA Process Engineering, Inc. v. Steuben Foods, Inc., IPR2014-00041,
`
`Paper 41 (June 11, 2014) (denying cross-examination of declarants from a prior
`
`6
`
`
`
`CBM2015-00181
`Patent No. 7,676,411
`reexamination under routine discovery); Mexichem Amanco Holdings S.A. de C.V.
`
`v. Honeywell International, Inc., IPR2013-00576, Paper 29 (August 15, 2014)
`
`(denying cross-examination of declarants from prior reexaminations under routine
`
`discovery); Organik Kimya AS v. Rohm and Haas Company, IPR2014-00185,
`
`Paper 42 (December 18, 2014) (denying cross-examination of a declarant from a
`
`prior ITC proceeding); Praxair Distribution, Inc. v. INO Therapeutics LLC,
`
`IPR2015-00529, Paper 33 (December 22, 2015) (denying cross-examination of
`
`declarants from the prosecution of the challenged patent under routine discovery).
`
`Here, Mr. Kawashima’s testimony is from a prior litigation involving related
`
`patents4 owned by Patent Owner. Specifically, Exhibit 1010 is the transcript of the
`
`deposition of Mr. Kawashima, taken on November 21, 2005, in Trading
`
`Technologies International, Inc., v. eSPEED, Inc., Case No. 04-cv-5312, United
`
`States District Court, Northern District of Illinois, Eastern Division. The deposition
`
`transcript is preexisting documentary evidence that was filed previously in another
`
`proceeding. As such, routine discovery under 37 C.F.R. § 42.51(b)(1)(ii) does not
`
`apply to the testimony of Mr. Kawashima submitted by Petitioners as Exhibit
`
`1010.
`
`
`4 U.S. Patent Nos. 6,766,304 and 6,772,132, both currently subject to CBM.
`
`7
`
`
`
`CBM2015-00181
`Patent No. 7,676,411
`The facts of this case are not analogous to the facts of either IPR2013-00253
`
`or PGR2015-00011, where cross-examination of pre-existing affidavit testimony
`
`was authorized under routine discovery. In IPR2013-00253, cross-examination of a
`
`declarant from the prosecution of the challenged patent was granted where the pre-
`
`existing declaration was submitted in the patent owner’s response and consisted of
`
`testimony from the patent owner’s founder, also a named inventor and current
`
`executive. Ikaria, Inc. v. GeNO LLC, IPR2013-00253, Paper 20, at 2 (April 1,
`
`2014). Similarly, in PGR2015-00011, cross-examination of a declarant from the
`
`prosecution of the challenged patent was granted where the pre-existing
`
`declaration was submitted in the patent owner’s response and consisted of
`
`testimony from the patent owner’s current president and CEO, one of the co-
`
`inventors of the challenged patent. Altaire Pharmaceuticals, Inc. v. Paragon
`
`Bioteck, Inc., PRG2015-00011, Paper 29, at 1-2 (April 1, 2016). Unlike both of
`
`these cases, Petitioners have no relationship with or control over Mr. Kawashima.
`
`He is a resident of Japan and employee of the Tokyo Stock Exchange. In addition,
`
`Petitioners had no involvement in eliciting the testimony of Mr. Kawashima that is
`
`Exhibit 1010. Accordingly, unlike the findings in IPR2013-00253 or PGR2015-
`
`00011, the pre-existing testimony of Mr. Kawashima should not be considered
`
`“affidavit testimony” within the meaning of 37 C.F.R. § 42.51(b)(1)(ii).
`
`8
`
`
`
`CBM2015-00181
`Patent No. 7,676,411
`Patent Owner appears to agree that the Rule for routine discovery does not
`
`address the requested additional cross-examination of Mr. Kawashima. In its April
`
`13, 2016 email to the Board, Patent Owner recognized that “Normally, Mr.
`
`Kawashima’s direct testimony would have been provided in an affidavit prepared
`
`for this proceeding, and that testimony would be subject to routine discovery. But,
`
`in these proceedings, Mr. Kawashima’s direct testimony was submitted in the form
`
`of a deposition transcript.” (Ex. 1040.) Consequently, Patent Owner argued that
`
`“Because we are outside of the situations specifically covered by the rules, the
`
`Board’s intervention is needed to resolve the resulting discovery dispute.” (Id.)
`
`Specifically, Patent Owner requested that the Board “otherwise order” that Mr.
`
`Kawashima be made available for cross-examination under routine discovery.
`
`(Id.)5
`
`
`5 Patent Owner provides no legal basis for reading the phrase “Except as the
`
`Board may otherwise order” in 37 C.F.R. § 42.51(b)(1)(ii) to expand the scope of
`
`the rule for routine discovery. To the contrary, the Board has interpreted this
`
`phrase to be limiting. See Daifuku Co., Ltd. V. Murata Machinery, Ltd., IPR2015-
`
`00083, Paper 16, at 3 (July 2, 2015) (“Thus, such ‘routine discovery’ is subject to
`
`Board discretion to limit or prohibit cross examination . . . depending on the facts
`
`of a particular proceeding.”).
`
`9
`
`
`
`CBM2015-00181
`Patent No. 7,676,411
`The Order does not provide a basis in the Rules for authorizing the cross
`
`examination of Mr. Kawashima. While the Order states that “[w]e understand that
`
`Petitioner may be of the impression that cross examination of a witness whose
`
`testimony was obtained during a prior proceeding does not fall under the routine
`
`discovery rule,” (Order, at 2-3), the Order provides no legal basis for refuting this
`
`understanding or for supporting the decision authorizing cross-examination. To the
`
`extent that the basis for authorizing the cross-examination of Mr. Kawashima is
`
`“routine discovery,” the Order should be reversed as it represents a marked
`
`departure from the existing law on routine discovery and, without explanation,
`
`arbitrarily and capriciously adopts a view different from earlier panels.
`
`B.
`
`The Order Overlooks the Requirements for Granting Additional
`Discovery in CBM Proceedings
`
`In CBM proceedings, “[r]equests for additional discovery may be granted
`
`upon a showing of good cause as to why the discovery is needed.” 37 C.F.R. §
`
`42.224(a). “Consistent with the statutory provisions and legislative intent of the
`
`AIA, there is a strong public policy to limit discovery in administrative trial
`
`proceedings, as opposed to the practice in district court patent litigations that have
`
`broad discovery.” Bloomberg Inc. v. Markets-Alert Pty Ltd., CBM2013-00005,
`
`Paper 32 at 1 (May 29, 2013). Patent Owner has the burden of proof in establishing
`
`entitlement to the additional cross-examination of Mr. Kawashima, by addressing
`
`the Garmin factors, as modified by Bloomberg Inc. v. Markets-Alert Pty Ltd.,
`10
`
`
`
`CBM2015-00181
`Patent No. 7,676,411
`CBM2013-00005, Paper 32 (May 29, 2013). No such showing has been made
`
`here, and the Order makes no reference to “good cause” or the Garmin factors.
`
`One of the Garmin factors applicable to CBM proceedings is that there be
`
`more than a possibility and mere allegation that something useful will be found.
`
`Bloomberg Inc. v. Markets-Alert Pty Ltd., CBM2013-00005, Paper 32, at 5 (May
`
`29, 2013)( “A good cause showing requires the moving party to provide a specific
`
`factual reason for expecting reasonably that the discovery will be ‘useful.’”). Here,
`
`it is not reasonable to expect that an additional cross-examination of Mr.
`
`Kawashima will be useful.
`
`Patent Owner had a full opportunity to cross-examine and did cross-examine
`
`Mr. Kawashima on the testimony relied upon by Petitioners when the original
`
`testimony was provided. Indeed, present counsel of record for Patent Owner
`
`participated actively in this prior deposition. As reflected in Exhibit 1010, present
`
`at the November 21, 2005 deposition of Mr. Kawashima were Matthew J.
`
`Sampson, Leif R. Sigmond, Jr., and Steven F. Borsand, on behalf of Patent Owner
`
`(then Plaintiff). (Ex. 1010, at 2.)6 Mr. Samson conducted the cross-examination.
`
`
`6 Matthew J. Sampson and Leif R. Sigmond, Jr. are partners in the law firm
`
`McDonnell Boehnen Hulbert & Berghoff LLP, representing Patent Owner in this
`
`
`
`11
`
`
`
`CBM2015-00181
`Patent No. 7,676,411
`(Id., at 74-119.) To date, Patent Owner has not explained what it would obtain
`
`from Mr. Kawashima through the requested additional cross-examination that it
`
`was unable to obtain in the prior cross-examination. In addition, the prior
`
`testimony provided by Mr. Kawashima, relied upon by Petitioners, concerns the
`
`public availability of the TSE user manual in 1998, nearly 20 years ago. Patent
`
`Owner has not explained how cross-examination from Mr. Kawashima today
`
`would be better evidence regarding activities in 1998 than the cross-examination
`
`taken more than 10 years ago. Certainly Mr. Kawashima’s recollection cannot be
`
`assumed to have improved with time.
`
`To the extent the basis for authorizing the cross-examination of Mr.
`
`Kawashima is additional discovery, the Order’s sua sponte action of granting
`
`additional discovery without briefing by the parties overlooks the rules and
`
`procedures for CBM proceedings, and the conclusion that cross-examination of
`
`Mr. Kawashima is authorized, without addressing any of the Garmin factors, is
`
`arbitrary and capricious.
`
`
`proceeding. Steven F. Borsand is Executive Vice President Intellectual Property
`
`for Patent Owner, designated back-up counsel in this proceeding.
`
`12
`
`
`
`CBM2015-00181
`Patent No. 7,676,411
`
`V. Conclusion
`In authorizing cross examination of Mr. Kawashima, the Order improperly
`
`overlooks the existing law on routine discovery and rules and procedures for
`
`additional discovery. For at least these reasons, the Order should be reversed.
`
`Patent Owner should be required to file a motion for additional discovery showing
`
`“good cause” for the requested additional cross-examination of Mr. Kawashima,
`
`which Petitioners should be permitted to oppose.
`
`
`
`Date: April 29, 2016
`
`1100 New York Avenue, N.W.
`Washington, D.C. 20005-3934
`(202) 371-2600
`
`
`
`STERNE, KESSLER, GOLDSTEIN & FOX P.L.L.C.
`
`
`/Richard M. Bemben #68658/
`
`
`Robert E. Sokohl (Reg. No. 36,013)
`Lori A. Gordon (Reg. No. 50,633)
`Richard M. Bemben (Reg. No. 68,658)
`Attorneys for Petitioners
`
`13
`
`
`
`CERTIFICATION OF SERVICE
`
`CBM2015-00181
`Patent No. 7,676,411
`
`The undersigned hereby certifies that on April 29, 2016, the foregoing
`
`PETITIONER’S REQUEST FOR REHEARING and any accompanying
`
`exhibit(s) were served electronically via e-mail in their entireties on the following
`
`counsel of record for the Patent Owner:
`
`Erika H. Arner (Lead Counsel)
`Joshua L. Goldberg (Back-up Counsel)
`Kevin D. Rodkey (Back-up Counsel)
`Rachel L. Emsley (Back-up Counsel)
`FINNEGAN, HENDERSON, FARABOW, GARRETT & DUNNER, LLP
`erika.arner@finnegan.com
`joshua.goldberg@finnegan.com
`kevin.rodkey@finnegan.com
`rachel.emsley@finnegan.com
`trading-tech-CBM@finnegan.com
`
`Steven F. Borsand (Back-up Counsel)
`Trading Technologies International, Inc.
`tt-patent-cbm@tradingtechnologies.com
`
`Michael D. Gannon (Back-up Counsel)
`Leif R. Sigmond, Jr. (Back-up Counsel)
`MCDONNELL, BOEHNEN, HULBERT & BERGHOFF LLP
`gannon@mbhb.com
`sigmond@mbhb.com
`
`STERNE, KESSLER, GOLDSTEIN & FOX P.L.L.C.
`
`
`/Richard M. Bemben #68658/
`
`
`Robert E. Sokohl (Reg. No. 36,013)
`Lori A. Gordon (Reg. No. 50,633)
`Richard M. Bemben (Reg. No. 68,658)
`Attorneys for Petitioners
`
`
`
`Date: April 29, 2016
`
`1100 New York Avenue, N.W.
`Washington, D.C. 20005-3934
`(202) 371-2600
`2803674_1.DOC
`
`
`
`
`
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
