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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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`
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`IBG LLC,
`INTERACTIVE BROKERS LLC, TRADESTATION GROUP, INC., and
`TRADESTATION SECURITIES, INC.,
`Petitioners,
`
`
`v.
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`TRADING TECHNOLOGIES INTERNATIONAL, INC.,
`Patent Owner.
`
`____________
`
`
`Case CBM2016-00051
`Patent No. 7,904,374
`
`___________
`
`
`
`PETITIONERS’ MOTION TO EXCLUDE
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`
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`Case CBM2016-00051
`Attorney Docket No. 41919-0013CP1
`TABLE OF CONTENTS
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`I.
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`INTRODUCTION ............................................................................................. 1
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`II. ARGUMENT ..................................................................................................... 2
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`A. The eSpeed/CQG Transcripts: Exhibits 2211, 2220, 2222, 2287, and 2292–
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`2296 2
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`B. The 32 Electronic Trader Declarants: Exhibit 2223 .......................................... 3
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`C. Animation: Exhibit 2214 ................................................................................... 5
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`D. Confidential Declaration of Christopher Thomas: Exhibit 2169 (¶¶ 71, 79, 80,
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`83-86, 92-95, 100-102) ........................................................................................... 6
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`E. Documents from District Court Cases: Exhibits 2206, 2207, 2415, 2416,
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`2250, 2279-2282 ..................................................................................................... 9
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`III. CONCLUSION ................................................................................................ 10
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`i
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`Case CBM2016-00051
`Attorney Docket No. 41919-0013CP1
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`I.
`
`INTRODUCTION
`TT’s Patent Owner Response (“TT’s POR”) dumps into the record and
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`buries the Board with hundreds of pages of documents without regard to their
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`admissibility. But this proceeding is governed by the Federal Rules of Evidence
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`and those Rules set fair boundaries on the admissibility of evidence. TT ignores
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`those rules.
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`A significant number of the documents submitted by TT violate the
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`prohibition on hearsay. See FRE 802. Absent one of the well-established
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`exceptions to hearsay, such as the unavailability of a declarant, hearsay is
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`inadmissible. TT disregards this Rule entirely by introducing hearsay statements
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`from dozens of individuals in an effort to defend the patentability of its claims.
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`A significant number of TT’s documents also fail to meet the basic
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`requirements of authenticity required by Federal Rule of Evidence 901. Despite
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`Petitioners’ timely objection, TT offered no competent evidence that cures this
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`objection leaving the Board and Petitioners with no basis to gauge whether the
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`documents are genuine.
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`TT’s evidence also ignores the proper boundaries of expert witness
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`testimony in contravention of Federal Rule of Evidence 702. Rule 702 permits an
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`expert to offer opinions based on his specialized knowledge in the field. But
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`significant portions of Mr. Thomas’ declaration are not in fact expert opinions of
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`1
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`Case CBM2016-00051
`Attorney Docket No. 41919-0013CP1
`Mr. Thomas. Rather, Mr. Thomas purports to offer pure factual testimony that is
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`not even based on his own analysis and expertise but is instead based upon his
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`review of district court depositions and trial transcripts. That underlying evidence
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`should not be admitted in this proceeding as TT may not use Mr. Thomas “simply
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`as a conduit for introducing hearsay under the guise that the testifying expert used
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`the hearsay as the basis of his testimony.” Marvel Characters, Inc. v. Kirby, 726
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`F.3d 119, 136 (2d Cir. 2013) (citation omitted). This testimony is improper and,
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`therefore, should be excluded. See, e.g., United States v. Dukagjini, 326 F.3d 45,
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`58 (2d Cir. 2003).
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`Accordingly, Petitioners file this motion pursuant to 37 C.F.R. § 42.64(c)
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`and in accordance with the Board’s Scheduling Order. (Paper 12.)
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`II. ARGUMENT
`A. The eSpeed/CQG Transcripts: Exhibits 2211, 2220, 2222, 2287, and
`2292–2296
`The Board should exclude Exhibits 2211, 2220, 2222, 2287, and 2292-2296
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`(“eSpeed/CQG Transcripts”) because they are hearsay to which no valid exception
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`applies. Most of these exhibits are cited in TT’s POR. See Paper 18 at 25, 26, 28,
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`and 35. Petitioners timely objected to each of the eSpeed/CQG Transcripts on the
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`basis of, among other things, hearsay. See Paper 21 at 2-3.
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`The eSpeed/CQG Transcripts purport to be excerpts of a trial or deposition
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`transcript from district court proceedings involving third parties. The eSpeed/CQG
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`2
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`Case CBM2016-00051
`Attorney Docket No. 41919-0013CP1
`Transcripts are hearsay as none of the statements therein were made by a person
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`testifying for the current proceeding, and all are being offered for the truth of the
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`matters asserted. FRE 801. None of these statements fall under any proper hearsay
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`exception. For example, TT has not even attempted to show that the witnesses are
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`unavailable. See FRE 804. Nor has TT shown that any specific exception under
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`FRE 803. Likewise, the residual exception does not apply here as TT cannot
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`credibly argue that the eSpeed/CQG Transcripts are somehow more probative
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`evidence that any other evidence it could have obtained through reasonable efforts.
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`See FRE 807.
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`Accordingly, the Board should exclude the eSpeed/CQG Transcripts.
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`B. The 32 Electronic Trader Declarants: Exhibit 2223
` The Board should exclude Exhibit 2223 that purports to contain declarations
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`from dozens of individuals in the electronic trading industry (Exhibit 22231)
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`(“Electronic Trader Declarants Exhibits”). The exhibits contain, for example,
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`statements by individuals regarding their opinions concerning TT’s alleged
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`commercial embodiments. See Ex. 2223. Petitioners objected to all of these
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`1 Exhibit 2223 includes Exhibits 2210, 2216, 2218, 2219, and 2221, which TT
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`separately submitted. The Board should exclude these separately submitted
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`declarations for the same reasons discussed above regarding Exhibit 2223.
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`3
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`Case CBM2016-00051
`Attorney Docket No. 41919-0013CP1
`declarations on the basis of, among other things, authenticity and hearsay. There is
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`no evidence of record that these exhibits are authentic and each is hearsay to which
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`no exception applies.
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`The Electronic Trader Declarants Exhibits are offered by TT as evidence of
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`the alleged success of the invention following a period of supposed skepticism in
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`the industry. POR at 35. Obviousness however is not at issue in this proceeding.
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`Thus to the extent Exhibit 2223 is offered to show skepticism, one of the objective
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`indicia that may defeat obviousness, Exhibit 2223 is irrelevant.
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`At the outset, the Board should exclude Electronic Trader Declarants
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`Exhibits for lack of authentication because TT has offered no evidence that each
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`exhibit is what it purports to be. FRE 901. In fact, at least one of the exhibits
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`contained within Exhibit 2223 is anything but a “declaration.”2 TT chose to forego
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`filing any supplemental evidence to cure Petitioners’ authenticity objections to
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`these exhibits.
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`In addition, each of these declarations is hearsay as none were made by a
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`persion testifying for the current proceeding and all are being offered for the truth
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`2 Exhibit 2210 (also contained within Exhibit 2223) purports to be a declaration of
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`Mr. Daniel Durkin. Exhibit 2210 actually appears to be an email between Inventor
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`Mr. Harris Brumfield and Mr. Durkin.
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`4
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`Case CBM2016-00051
`Attorney Docket No. 41919-0013CP1
`of the matters asserted. FRE 801. None of the declarations escape the hearsay rule,
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`for example, because they could be characterized as non-hearsay under FRE
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`801(d), i.e. a prior statement by a testifying witness or a party statement used
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`against the party. Nor has TT shown that any hearsay exception under FRE 804
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`might apply because it has proffered no evidence that any of the declarants whose
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`testimony it relies upon are unavailable. FRE 804. Nor has TT shown that any
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`specific exception under FRE 803 or the residual exception under FRE 807 applies
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`here. Indeed, TT cannot credibly argue that 2004 declaration testimony has
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`equivalent circumstantial guarantees of trustworthiness as that of testimony from
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`these same declarants if Petitioners had an opportunity for vigorous cross
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`examination. TT has not shown that this is an “exceptional case” under FRE 807.
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`See, e.g., Conoco Inc. v. Dep’t of Energy, 99 F.3d 387, 392 (Fed. Cir. 1996) (“The
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`two residual hearsay exceptions . . . were meant to be reserved for exceptional
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`cases.”). Accordingly, the Board should exclude the declarations as hearsay.
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`C. Animation: Exhibit 2214
`The Board should exclude the animation for lack of authenticity and because
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`it is hearsay to which no exception applies. Exhibits 2214 purports to be a video
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`animation of unknown provenance. TT cites to Exhibits 2214 in its POR. POR at
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`18. In addition, Mr. Thomas improperly uses animations as evidence of how TT’s
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`product actually operates. See Ex. 2169 at ¶ 82. Petitioners timely objected to
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`5
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`Case CBM2016-00051
`Attorney Docket No. 41919-0013CP1
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`Exhibit 2214.
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`Rule 901 requires that evidence be supported by sufficient evidence to
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`demonstrate that an item is what the proponent purport it to be. In the case of Ex.
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`2214, TT has offered no such evidence. As a consequence, this exhibits should be
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`excluded from the record on that basis.
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`Moreover, Exhibit 2214 is also hearsay for which no exception applies.
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`Exhibit 2214 purports to be computer–generated animation showing how actual
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`software products are operated. TT offers Exhibit 2214 as evidence of the alleged
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`benefits of the invention and the problems associated with the prior art. POR, at
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`17-18. TT did not respond to any of Petitioners’ timely objections, so there is no
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`evidence showing who prepared these animations or under whose direction. Thus,
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`each clip was made by unidentified animators who are not testifying in this
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`proceeding, and TT is using each clip to prove the truth of the matter asserted, i.e.
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`how a purported commercial embodiment of the claims or the prior art actually
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`functioned. Therefore, they are hearsay and should be excluded. FRE 801.
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`D. Confidential Declaration of Christopher Thomas: Exhibit 2169 (¶¶
`71, 79, 80, 83-86, 92-95, 100-102)
`Several portions of the Declaration of Christopher Thomas (Exhibit 2169),
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`TT’s expert, exceed the proper boundaries of expert testimony and should be
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`stricken from the record. TT relies on Thomas’s declaration testimony throughout
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`its POR. Petitioners timely objected to Exhibit 2169 on the basis of, among other
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`6
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`Case CBM2016-00051
`Attorney Docket No. 41919-0013CP1
`things, inadmissible hearsay and improper expert testimony in violation of at least
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`FRE 701, 702 and 703. The Board should exclude at least the portions of Exhibit
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`2169 (including paragraphs 71, 79, 80, 83-86, 92-95, 100-102) that purport to
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`provide testimony concerning the conception of the invention and the problem
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`purportedly solved by the inventor.
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`Although Mr. Thomas is offered as an “expert witness,” substantial portions
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`of his testimony are not expert opinions. Rather, Mr. Thomas merely repeats,
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`summarizes, and/or characterizes various statements made by declarants outside of
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`this proceeding. This is not testimony based on “scientific, technical, or other
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`specialized knowledge” as contemplated by Rule 702. Rather, TT is impermissibly
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`using Mr. Thomas “as a conduit for introducing hearsay under the guise that the
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`testifying expert used the hearsay as the basis of his testimony.” Marvel
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`Characters, Inc. v. Kirby, 726 F.3d 119, 136 (2d Cir. 2013) (citation omitted).
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`The Federal Rules contemplate that an expert’s testimony will be based on
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`three sources: (1) first hand observation by the expert; (2) presentation at trial; or
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`(3) the kinds of facts or data that that an expert in the field would reasonably rely
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`on in forming an opinion. FRE 703, 1972 Advisory Committee Notes. None of
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`these sources apply to the testimony set forth below. Rather, Mr. Thomas offers
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`testimony based upon evidence presented at a different trial, before a different
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`tribunal, involving different parties. Neither the Federal Rules nor the Board’s rules
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`7
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`Case CBM2016-00051
`Attorney Docket No. 41919-0013CP1
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`permit such testimony from an expert.
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`Examples of Mr. Thomas’s improper “opinion” testimony include
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`paragraphs that discuss, summarize, characterize, and/or quote from transcripts,
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`exhibits, and declarations from TT’s prior litigations. See, e.g., Ex. 2169 at ¶ 71
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`(Ex. 2210); ¶¶ 85-86 (Ex. 2211); ¶ 95 (Ex. 2223). Mr. Thomas is not offering
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`expert opinions, but is instead improperly acting as a “mouthpiece” for declarants
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`who TT has shielded from cross examination. See, e.g., Loeffel Steel Prod., Inc. v.
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`Delta Brands, Inc., 387 F. Supp. 2d 794, 808 (N.D. Ill. 2005) (“Rule 703 was
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`never intended to allow oblique evasions of the hearsay rule.”).
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`While an expert may generally rely on hearsay to form an opinion so long as
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`that opinion otherwise satisfies the admissibility rules for expert testimony, expert
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`testimony cannot be used as a vehicle to evade the hearsay requirement. See
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`Dukagjinih, 326 F.3d at 57–59. Rule 702 requires that expert testimony be “based
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`on sufficient facts or data” to be admissible. FRE 702(b). By simply repeating or
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`summarizing the hearsay testimony discussed, Thomas has crossed the line from
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`permissibly relying on hearsay to form his expert opinion to impermissibly being a
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`mere conduit for hearsay. Dukagjinih, 326 F.3d at 57–59; see also Lakah v. UBS
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`AG, 996 F. Supp. 2d 250, 259 (S.D.N.Y. 2014). The Board should therefore
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`exclude at least the rank hearsay portions of Exhibit 2169 paragraphs 70, 78, 79,
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`80, 81, 84-87, 93-96, 101-103.
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`8
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`Case CBM2016-00051
`Attorney Docket No. 41919-0013CP1
`E. Documents from District Court Cases: Exhibits 2206, 2207, 2415,
`2416, 2250, 2279-2282
`The Board should exclude Exhibits 2206, 2207, 2415, 2416, 2250, 2279-
`
`2282 for lack of authenticity. The exhibits consist of documents allegedly
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`produced in district court litigation by Petitioner and third-parties. Petitioner timely
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`objected to these exhibits under FRE 901. See Paper 21 at 3. In an apparent attempt
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`to cure Petitioner’s objections, TT served an attorney declaration (Exhibit 2417) to
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`Petitioner on December 7, 2016 that explained the discovery procedures TT used
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`in district court litigations to acquire the exhibits or how the documents were used
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`in a former trial. These explanations do not cure the evidentiary issue under FRE
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`901 as they do not explain that the document is what the proponent claims it to be.
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`See FRE 901.
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`For example, at paragraph 4, the declaration merely states that Exhibit 2279
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`was shown to the jury during trial but not admitted to evidence. TT purports that
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`Exhibit 2279 is a prior art manual and relies on it in arguing that the claims do not
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`preempt the result of using a GUI in electronic trading. See POR at 32-33.
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`Moreover Mr. Thomas relies on the purported prior art manual in arguing that the
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`claims are not routine or conventional. See Exhibit 2169 at ¶98. However, TT has
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`not presented any evidence that Exhibit 2169 is an actual prior art manual. Instead,
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`TT presented evidence that Exhibit 2169 was shown to a jury trial. Likewise, TT’s
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`attempts to authenticate Exhibit 2250 fail. TT tried to cure the authenticity
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`Case CBM2016-00051
`Attorney Docket No. 41919-0013CP1
`objection to Exhibit 2250 by declaring that it was admitted as a trial exhibit in
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`district court without its authenticity being challenged. These facts do not prove
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`that Exhibit 2250 is what TT purports it to be—an email from a third-party
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`commenting on TT’s commercial product.
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`III. CONCLUSION
`For at least the reasons set forth above, Exhibits 2206, 2207, 2211, 2214,
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`2220, 2222, 2223, 2250, 2279-2283, 2287, 2292–2296, 2415, 2416 and at least
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`paragraphs 70, 78, 79, 80, 81, 84-87, 93-96, 101-103 of Exhibit 2169 should be
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`excluded from the present proceeding as inadmissible under the FRE.
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`Dated: March 29, 2017
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`Respectfully submitted,
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`/John C. Phillips/
`John C. Phillips, Reg. No. 35,322
`Fish & Richardson, P.C.
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`Attorney for Petitioners
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`10
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`Case CBM2016-00051
`Attorney Docket No. 41919-0013CP1
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`CERTIFICATE OF SERVICE
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`Pursuant to 37 CFR §§ 42.6(e)(4) and 42.6(e)(4)(iii), the undersigned certifies
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`that on March 29, 2017, a complete and entire copy of this Petitioner’s Motion to
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`Exclude was provided via email to the Patent Owner, by serving the correspondence
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`address of record as follows:
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`Leif R. Sigmond, Jr., Cole B. Richter,
`Michael D. Gannon and Jennifer M. Kurcz
`McDonnell, Boehnen, Hulbert & Berghoff LLP
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`Erika H. Arner, Joshua L. Goldberg, Kevin Rodkey,
`Rachel L. Emsley and Cory C. Bell
`Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
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`Steven F. Borsand, Jay Q. Knobloch
`Trading Technologies International, Inc.
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`Email: sigmond@mbhb.com
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` richter@mbhb.com
` gannon@mbhb.com
` kurcz@mbhb.com
` erika.arner@finnegan.com
` joshua.goldberg@finnegan.com
` kevin.rodkey@finnegan.com
` rachel.emsley@finnegan.com
` cory.bell@finnegan.com
` tt-patent-cbm@tradingtechnologies.com
` Trading-Tech-CBM@finnegan.com
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`/Christine Rogers/
`Christine Rogers
`Fish & Richardson P.C.
`60 South Sixth Street, Suite 3200
`Minneapolis, MN 55402
`(650) 839-5092
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`
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