Paper No.
`
` Filed: September 23, 2016
`
`
`
`
`
`
`
`
`
`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.
`
`Petitioners
`v.
` TRADING TECHNOLOGIES INTERNATIONAL, INC.
`
`Patent Owner
`_________________
`Case CBM2015-00182
`U.S. Patent 6,772,132
`
`
`
`
`
`
`
`
`
`
`PATENT OWNER’S MOTION TO EXCLUDE
`UNDER 37 C.F.R. 42.64(C)
`
`
`
`
`
`
`
`
`
` Filed: September 23, 2016
`
`
`
`
`
`
`
`
`
`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.
`
`Petitioners
`v.
` TRADING TECHNOLOGIES INTERNATIONAL, INC.
`
`Patent Owner
`_________________
`Case CBM2015-00182
`U.S. Patent 6,772,132
`
`
`
`
`
`
`
`
`
`
`PATENT OWNER’S MOTION TO EXCLUDE
`UNDER 37 C.F.R. 42.64(C)
`
`
`
`
`
`
`
`
`
`
`
`
`
`TABLE OF CONTENTS
`
`CBM2015-00182
`U.S. Patent 6,772,132
`
`I. Preliminary Statement ....................................................................................... 1
`II. Standard ............................................................................................................... 1
`III. TSE (Ex. 1016) Should Be Excluded ............................................................... 1
`A. TT Timely Objected to TSE, Which Was Relied Upon in
`Petitioners’ Petition .......................................................................................... 1
`B. TSE Has Not Been Authenticated under FRE 901 .......................... 2
`i. The 2005 Kawashima Deposition Testimony is Hearsay ............. 2
`ii. The residual hearsay exception of FRE 807 applies to both the
`2005 Kawashima deposition and Patent Owner’s evidence from district
`court litigation .............................................................................................. 3
`iii. Even if the 2005 Kawashima Deposition Testimony was
`admissible, the deposition testimony raises more doubt than it resolves. ... 6
`IV. Certain Deposition Testimony of TT’s Experts Dan Olsen (Ex. 1051) and
`Christopher Thomas (Ex. 1052) Should be Excluded .......................................... 8
`A. TT Timely Objected to the Deposition Testimony, Which Was
`Relied Upon in Petitioners’ Reply .................................................................. 9
`B. The Probative Value of the Testimony at Pages 57 and 58 of the
`Olsen Transcript is Outweighed by a Danger of Prejudice and Confusing
`the Issues under FRE 403 ................................................................................ 9
`C. The Probative Value of the Testimony at Pages 393-397 of the
`Thomas Transcript is Outweighed by a Danger of Prejudice and
`Confusing the Issues under FRE 403 ...........................................................10
`
`
`
`
`
`ii
`
`
`
`
`Preliminary Statement
`
`I.
`
`CBM2015-00182
`U.S. Patent 6,772,132
`
`Pursuant to 37 C.F.R. §§ 42.64(c) and 42.61(a) and the Federal Rules of
`
`Evidence, Patent Owner Trading Technologies International, Inc. (“TT”), moves to
`
`exclude TSE (Ex. 1016), because Petitioners have failed to meet the authentication
`
`requirements of FRE 901 and because the only purportedly authenticating evidence
`
`(Ex. 1019, the transcript of a 2005 deposition of Atshushi Kawashima) is hearsay
`
`under FRE 801.
`
`In addition, TT moves to exclude certain deposition testimony of TT’s
`
`experts Dan Olsen (Ex. 1051) and Christopher Thomas (Ex. 1052) under FRE 403
`
`because its probative value is substantially outweighed by a danger of unfair
`
`prejudice and confusing the issues as the result of vague questioning.
`
`II.
`
`Standard
`
`A Motion to Exclude must (a) identify where in the record the objection was
`
`made, (b) identify where in the record the evidence sought to be excluded was
`
`relied upon by an opponent, (c) address objections to exhibits in numerical order,
`
`and (d) explain the objection. Trial Practice Guide, 77 Fed. Reg. 48,756, 48,767
`
`(Aug. 14, 2012).
`
`III. TSE (Ex. 1016) Should Be Excluded
`A. TT Timely Objected to TSE, Which Was Relied Upon in
`Petitioners’ Petition
`
`TT timely objected to Exhibit 1016 in objections filed March 17, 2016.
`
`1
`
`
`
`
`Paper 23 at 2-3. Petitioners rely upon TSE (Ex. 1016) in their Petition for their 35
`
`CBM2015-00182
`U.S. Patent 6,772,132
`
`U.S.C. § 101 grounds and all instituted prior art grounds. E.g., Petition, Paper 7 at
`
`20-25 and 61-80.
`
`TSE Has Not Been Authenticated under FRE 901
`
`B.
`To satisfy the requirement of authenticating or identifying an item of
`
`evidence, the proponent must produce evidence sufficient to support a finding that
`
`the item is what the proponent claims it is. FRE 901(a). Petitioners have produced
`
`no such evidence to support a finding that TSE is authentic, relying solely on
`
`Exhibit 1019, the transcript of a 2005 deposition of Atshushi Kawashima, which is
`
`insufficient in multiple respects.
`
`i.
`
`The 2005 Kawashima Deposition Testimony is
`Hearsay
`
`The only evidence that even attempts to authenticate TSE is Exhibit 1019,
`
`the transcript of the 2005 Kawashima deposition. See Ex. 1019, pp. 97-99. The
`
`2005 Kawashima deposition was conducted in a district court case, not any of the
`
`CBM proceedings. Ex. 1019 at 1. As a result, the 2005 Kawashima deposition is,
`
`by definition, hearsay.
`
`FRE 801 defines hearsay as “a statement that: (1) the declarant does not
`
`make while testifying at the current trial or hearing; and (2) a party offers in
`
`evidence to prove the truth of the matter asserted in the statement.” Since
`
`2
`
`
`
`
`testimony by Mr. Kawashima in the district court case was not made “while
`
`CBM2015-00182
`U.S. Patent 6,772,132
`
`testifying at the current trial or hearing,” to the extent such testimony is used to
`
`prove the authenticity of TSE, it must be considered hearsay.
`
`ii.
`
`The residual hearsay exception of FRE 807 applies to
`both the 2005 Kawashima deposition and Patent
`Owner’s evidence from district court litigation
`
`However, just like Patent Owner’s evidence from district court litigation
`
`(e.g., Ex. 2223 (trader declarations), etc.), the 2005 Kawashima deposition
`
`transcript should not be excluded as hearsay. “Hearsay is generally inadmissible
`
`because ‘the statement is inherently untrustworthy: the declarant may not have
`
`been under oath at the time of the statement, his or her credibility cannot be
`
`evaluated at trial, and he or she cannot be cross-examined.’” United States v.
`
`Reilly, 33 F.3d 1396, 1409 (3d Cir. 1994); see also Queen v Hepburn, 11 U.S. 290
`
`(1813). These concerns are not present with respect to the 2005 Kawashima
`
`deposition transcript.
`
`Although no exception under FRE 803 or FRE 804 applies, the residual
`
`hearsay exception of FRE 807 applies to both Patent Owner’s evidence from
`
`district court litigation and the 2005 Kawashima deposition transcript because the
`
`parties in this proceeding had the opportunity to cross examine the witnesses from
`
`the district court litigation.
`
`FRE 807 requires:
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`3
`
`
`
`
`a. the statement has equivalent circumstantial guarantees of
`trustworthiness;
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`CBM2015-00182
`U.S. Patent 6,772,132
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`b. it is offered as evidence of a material fact;
`
`c. it is more probative on the point for which it is offered than any
`other evidence that the proponent can obtain through reasonable
`efforts; and
`
`d. admitting it will best serve the purposes of these rules and the
`interests of justice.
`
`Just like Patent Owner’s evidence from district court litigation, Mr. Kawashima’s
`
`2005 deposition transcript satisfies each of these requirements.
`
`This is similar to the circumstances in the recently decided Apple v. VirnetX.,
`
`IPR2015-00811, Paper No. 44. In that case, the Board denied a motion to exclude
`
`declaration testimony from another proceeding as hearsay. Id. at 68-70.
`
`Specifically, the Board noted that “[t]he vast majority of testimony in inter partes
`
`reviews is admitted in paper form, as a declaration, instead of as live witness
`
`testimony. Thus, whether or not testimony is specifically created for a specific IPR
`
`or is created for another proceeding, if the declaration is sworn testimony and the
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`witness is available for cross-examination, the testimony bears the same guarantees
`
`of trustworthiness.” Id. at 69-70. With this in mind, the Board found that the
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`residual hearsay exception of FRE 807 applied to the declaration testimony. Id.
`
`4
`
`
`
`
`
`at 69.
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`CBM2015-00182
`U.S. Patent 6,772,132
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`Likewise, here, both Patent Owner’s evidence from district court litigation
`
`and the Kawashima 2005 deposition transcript are sworn testimony regarding
`
`material facts. Indeed, both are from district court litigation, where they were
`
`subject to the Federal Rules of Evidence, just like in this proceeding, and thus have
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`equivalent circumstantial guarantees of trustworthiness.
`
`Patent Owner’s evidence from district court litigation differs from the
`
`Kawashima 2005 deposition transcript only in that Patent Owner exerted greater
`
`efforts to obtain better evidence than Petitioners. Patent Owner attempted to bring
`
`in alternative evidence through depositions in this proceeding but such efforts were
`
`opposed by Petitioner and denied by the Board. See Paper No. 38 at 2-5. Admitting
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`Patent Owner’s evidence from district court litigation thus serves the interests of
`
`justice and does not undermine the rule on hearsay, because Patent Owner was
`
`precluded from accessing other evidence after exerting reasonable efforts and
`
`Petitioners were not prejudiced because they could have deposed Patent Owner’s
`
`witnesses here if they wanted to.
`
`In contrast, Petitioners did not make reasonable efforts to obtain new
`
`nonhearsay evidence authenticating TSE. Instead, Petitioners fought against Patent
`
`Owner’s efforts to obtain new nonhearsay evidence by opposing Patent Owner’s
`
`request to depose Mr. Kawashima in these proceedings. See Paper No. 25 (Board
`
`5
`
`
`
`
`deciding it is Petitioner’s responsibility to secure availability of Kawashima).
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`CBM2015-00182
`U.S. Patent 6,772,132
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`Although Patent Owner was eventually able to depose Mr. Kawashima in
`
`these proceedings, that does not differentiate the Kawashima 2005 deposition
`
`transcript from Patent Owner’s evidence from district court litigation. Petitioners
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`could have likewise deposed the witnesses on which Patent Owner relies here but
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`simply chose not to do so.
`
`Accordingly, Patent Owner’s evidence from district court litigation and the
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`2005 Kawashima deposition transcript should stand or fall together. To the extent
`
`the Board excludes any of Patent Owner’s evidence from district court litigation,
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`which it should not, the Board should likewise exclude the 2005 Kawashima
`
`deposition transcript.1
`
`iii.
`
`Even if the 2005 Kawashima Deposition Testimony
`was admissible, the deposition testimony raises more
`doubt than it resolves.
`
`Rather than supporting a finding under FRE 901(a) that TSE is what
`
`Petitioners claim it is, the 2005 Kawashima deposition transcript ultimately raises
`
`
`1 TT timely objected to Exhibit 1019, the 2005 Kawashima deposition
`
`transcript, in objections filed March 17, 2016. Paper 23 at 4. Petitioners rely upon
`
`the 2005 Kawashima deposition transcript in their Petition to establish that TSE is
`
`prior art. E.g., Petition, Paper 7 at 11.
`
`6
`
`
`
`
`additional doubts as to the authenticity of the document.
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`CBM2015-00182
`U.S. Patent 6,772,132
`
`For example, in the deposition, Mr. Kawashima draws a conclusion about
`
`the authenticity of TSE, a document of hundreds of pages, based on the perceived
`
`absence of a mark in “looking briefly through” the document. Specifically, he
`
`testified:
`
`Q Is this entire document, this document identified as Defendant’s
`Exhibit 179, from August 24 of 1998?
`
` A Yes.
`
`Q How do you know?
`
`
`
` A
`
` Because when we replace sections there is a mark indicating a
`correction at the bottom of the page. And just looking briefly through
`this document, I didn’t see that mark and therefore I thought that was
`the original date.
`
` Ex. 1019, pp. 97-98.
`
`Further, when asked how one would know if a distributed manual were the
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`same as a particular copy, Mr. Kawashima merely makes the conclusory assertion
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`that a comparison would reveal whether a distributed copy were the same, without
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`any detail as to how such a comparison would be carried out how what level of
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`scrutiny might be required. Specifically, he testified:
`
`7
`
`
`
`
`Q Is there any way to tell that the manual that was distributed is the
`same as Defendant's Exhibit 179?
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`CBM2015-00182
`U.S. Patent 6,772,132
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`A If you were to compare this with the distributed manual you would
`be able to tell.
`
`Ex. 1019, p. 99.
`
`Finally Mr. Kawashima’s testimony cannot be relied upon as to
`
`authentication because he is not a disinterested witness. As noted in Patent
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`Owner’s Response, Kawashima’s employer—the Tokyo Stock Exchange—
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`challenged TT’s Japanese counterpart to U.S. Patent No. 6,766,304, which was
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`asserted in the litigation in which Kawashima previously testified, and is part of
`
`the same family as the ’132 patent. Paper No. 62 at 65. Moreover, at his deposition
`
`in the current proceeding, when Mr. Kawashima was asked if he was attending
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`voluntarily, he answered that he was present at the direction of the Tokyo Stock
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`Exchange. Exhibit 2163, p. 9. Further, he acknowledged that he “did a practice run
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`or went through anticipated questions that might come out” with Petitioners’
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`counsel Lori Gordon and Natalie Morgan. Id. at pp 11-12.
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`In view of the above, Petitioners have not produced evidence sufficient to
`
`support a finding that TSE is what Petitioners claim it is. TSE should thus be
`
`excluded.
`
`IV. Certain Deposition Testimony of TT’s Experts Dan Olsen (Ex. 1051)
`and Christopher Thomas (Ex. 1052) Should be Excluded
`
`8
`
`
`
`
`A. TT Timely Objected to the Deposition Testimony, Which Was
`Relied Upon in Petitioners’ Reply
`
`CBM2015-00182
`U.S. Patent 6,772,132
`
`TT timely objected to Exhibit 1051 during the deposition. Ex. 1051 at 57-58.
`
`TT also timely objected to Exhibit 1052 during the deposition. Ex. 1052 at 393-
`
`397. Petitioners rely upon pages 57 and 58 of the Olsen deposition transcript (Ex.
`
`1051) and pages 393-397 of the Thomas deposition transcript (Ex. 1052) in their
`
`Reply for their 35 U.S.C. § 101 grounds. Reply, Paper 96 at 3.
`
`B.
`
`The Probative Value of the Testimony at Pages 57 and 58 of the
`Olsen Transcript is Outweighed by a Danger of Prejudice and
`Confusing the Issues under FRE 403
`
`The answers at page 57 and 58 were in response to vague and ambiguous
`
`questions yielding irrelevant testimony that Petitioners are using in a confusing and
`
`misleading manner to imply that the claimed inventions do not improve computers.
`
`18 Q. Okay. Does the GUI in Figure 3 make
`
`19 the computer run faster?
`
`20 A. That's not the improvement claimed.
`
`21 Q. I'm asking. That's the question I'm
`
`22 asking.
`
`1 A. It does not.
`
`2 Q. Does it allow the computer to use less
`
`3 energy?
`
`9
`
`
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`CBM2015-00182
`U.S. Patent 6,772,132
`
`
`4 MS. KURCZ: Objection, form.
`
`5 BY MR. SOKOHL:
`
`6 Q. Does the GUI in Figure 3 allow the
`
`7 computer to use less energy?
`
`8 A. That is not one of the claimed
`
`9 improvements, no.
`
`10 Q. Does the GUI in Figure 3 make the
`
`11 computer more efficient relative to the network?
`
`12 A. That's not one of the claimed
`
`13 improvements, no.
`
`Ex. 1051 at 57:18-58:13. Rather than admitting the claimed inventions do not
`
`improve computers, Mr. Olsen was simply stating what was not explicitly recited
`
`by the claims. The probative value of this testimony is thus substantially
`
`outweighed by a danger of unfair prejudice and confusing the issues as the result of
`
`vague questioning. Accordingly, it should be excluded under FRE 403.
`
`C. The Probative Value of the Testimony at Pages 393-397 of the
`Thomas Transcript is Outweighed by a Danger of Prejudice and
`Confusing the Issues under FRE 403
`
`The answers at page 393-397 were in response to vague and ambiguous
`
`questions yielding irrelevant testimony that Petitioners are using in a confusing and
`
`misleading manner to imply that the claimed inventions do not improve computers.
`
`10
`
`
`
`CBM2015-00182
`U.S. Patent 6,772,132
`
`
`16 Q. Does the GUI of Claim 1 of the '411
`
`17 Patent cause the recited computing device to
`
`18 process data faster than a Figure 2 type GUI?
`
`19 MR. GANNON: Object to the form.
`
`20 THE WITNESS: Now you're making -- I
`
`21 mean that's a very general statement. I can't
`
`22 make that statement. You have to look at the
`
`1 claims as a whole. So the claim is not directed
`
`2 at what you said.
`
`3 BY MR. SOKOHL:
`
`4 Q. So it's not directed at processing
`
`5 data faster?
`
`6 A. There's nothing in Claim 1 about
`
`7 processing data, processing data faster.
`
`8 Q. Is there anything in Claim 1 about the
`
`9 computing device processing data more efficiently?
`
`10 MR. GANNON: Object to the form.
`
`11 THE WITNESS: There's nothing in Claim
`
`12 1 about processing data more efficiently. Again,
`
`13 you're making a very general statement and you're
`
`11
`
`
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`CBM2015-00182
`U.S. Patent 6,772,132
`
`
`14 divorcing the claim from -- I mean you've got to
`
`15 look at the invention as a whole, which is all the
`
`16 claims.
`
`17 BY MR. SOKOHL:
`
`18 Q. Anything in any of the claims of the
`
`19 '411 that would allow the computing device to
`
`20 process data faster?
`
`21 MR. GANNON: Object to the form.
`
`22 THE WITNESS: The invention detailed
`
`1 in the patent does not relate to processing
`
`2 anything -- the general concept of what you said
`
`3 about processing data faster. It relates to
`
`4 specifically what is detailed in the claims and
`
`5 described in the specification.
`
`6 BY MR. SOKOHL:
`
`7 Q. Anything in any of the claims of the
`
`8 '411 Patent that would allow the computing device
`
`9 to process data more efficiently?
`
`10 MR. GANNON: Object to the form.
`
`11 THE WITNESS: And my answer is the
`
`12
`
`
`
`CBM2015-00182
`U.S. Patent 6,772,132
`
`
`12 same. You're using a very general term there.
`
`13 And the invention is, of the '411 Patent, is very
`
`14 specific. And you've got to read all the claims,
`
`15 look at the invention as a whole, and read the
`
`16 specification. It's not -- you're using a general
`
`17 concept of processing something more efficiently
`
`18 and that's not what the invention is directed
`
`19 towards.
`
`20 BY MR. SOKOHL:
`
`21 Q. Anything in any of the claims of the
`
`22 '411 Patent that would allow the computing device
`
`1 to process the data more reliably than say a
`
`2 Figure 2 type GUI?
`
`3 A. I mean my answer is the same. You're
`
`4 using a general concept of processing something,
`
`5 data reliably, and that's not what the invention
`
`6 is, the GUI tool of the invention is directed to.
`
`7 It's directed to specifically --
`
`8 the invention is specifically what is detailed in
`
`9 the claims and further described in the
`
`13
`
`
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`CBM2015-00182
`U.S. Patent 6,772,132
`
`
`10 specification.
`
`11 Q. Anything in any of the claims of the
`
`12 '411 Patent that would allow the computing device
`
`13 to process data differently than a Figure 2 type
`
`14 GUI?
`
`15 MR. GANNON: Object to the form.
`
`16 THE WITNESS: And, again, you're using
`
`17 a general concept, a very general concept, of
`
`18 processing data differently. And the invention of
`
`19 the '411 Patent is a specific GUI tool that is
`
`20 detailed in the claims and described further in
`
`21 the specification.
`
`1 BY MR. SOKOHL:
`
`2 Q. Would your answer be any different for
`
`3 the claims of the '132 Patent?
`
`4 A. No.
`
`5 Q. And would it be any different for the
`
`6 claims of the '304 Patent?
`
`7 A. No.
`
`8 Q. Yeah, my question was ambiguous. And
`
`14
`
`
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`CBM2015-00182
`U.S. Patent 6,772,132
`
`
`9 I knew it when I said it.
`
`10 I asked you a series of questions
`
`11 regarding the computing device.
`
`12 A. Yes.
`
`13 Q. Would your answer be the same for the
`
`14 claims of the '304 Patent?
`
`15 A. Yes.
`
`16 Q. And would your answer be the same for
`
`17 all of those questions for the '132 Patent?
`
`18 A. Yes.
`
`Ex. 1052 at 393:16-397:18. Rather than admitting the claimed inventions do not
`
`improve computers, Mr. Thomas was simply stating what was not explicitly recited
`
`by the claims. The probative value of this testimony is thus substantially
`
`outweighed by a danger of unfair prejudice and confusing the issues as the result of
`
`vague questioning. Accordingly, it should be excluded under FRE 403.
`
`
`
`
`
`
`
`Respectfully Submitted,
`
`Date: September 23, 2016
`
`
`
`
`
`/Joshua L. Goldberg/
`By:
`Joshua L. Goldberg (Reg. No. 59,369)
`
`15
`
`
`
`
`
`CERTIFICATE OF SERVICE
`
`CBM2015-00182
`U.S. Patent 6,772,132
`
`The undersigned hereby certifies that a copy of the foregoing PATENT
`
`
`
`OWNER’S MOTION TO EXCLUDE UNDER 37 C.F.R. 42.64(C) were served
`
`on September 23, 2016, via email directed to counsel of record for the Petitioner at
`
`the following:
`
`Robert Sokohl
`rsokohl-PTAB@skgf.com
`
`Lori Gordon
`lgordon-PTAB@skgf.com
`
`Richard Bemben
`rbemben-PTAB@skgf.com
`
`John C. Phillips
`CBM41919-0006CP1@fr.com
`
`PTAB@skgf.com
`
`
`
`
`
`
`Dated: September 23, 2016
`
`
`
`
`
`
`
`/Valencia Daniel/
`Valencia Daniel
`Litigation Legal Assistant
`
`FINNEGAN, HENDERSON, FARABOW,
`GARRETT & DUNNER, LLP
`
`
`16
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