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`Paper No. ____
` Filed: September 23, 2016
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`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 CBM2015-00181
`U.S. Patent 7,676,411
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`PATENT OWNER’S MOTION TO EXCLUDE
`UNDER 37 C.F.R. 42.64(C)
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`IBG 1069
`IBG v. TT
`CBM2016-00087
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`
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`TABLE OF CONTENTS
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`CBM2015-00181
`U.S. Patent 7,676,411
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`I. Preliminary Statement ....................................................................................... 1
`II. Standard ............................................................................................................... 1
`III. .................................................................. TSE (Ex. 1006) Should Be Excluded
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`1
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`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
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`
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`
`ii
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`Preliminary Statement
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`I.
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`CBM2015-00181
`U.S. Patent 7,676,411
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`Pursuant to 37 C.F.R. §§ 42.64(c) and 42.61(a) and the Federal Rules of
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`Evidence, Patent Owner Trading Technologies International, Inc. (“TT”), moves to
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`exclude TSE (Ex. 1006), because Petitioners have failed to meet the authentication
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`requirements of FRE 901 and because the only purportedly authenticating evidence
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`(Ex. 1010, the transcript of a 2005 deposition of Atshushi Kawashima) is hearsay
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`under FRE 801.
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`In addition, TT moves to exclude certain deposition testimony of TT’s
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`experts Dan Olsen (Ex. 1051) and Christopher Thomas (Ex. 1052) under FRE 403
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`because its probative value is substantially outweighed by a danger of unfair
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`prejudice and confusing the issues as the result of vague questioning.
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`II.
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`Standard
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`A Motion to Exclude must (a) identify where in the record the objection was
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`made, (b) identify where in the record the evidence sought to be excluded was
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`relied upon by an opponent, (c) address objections to exhibits in numerical order,
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`and (d) explain the objection. Trial Practice Guide, 77 Fed. Reg. 48,756, 48,767
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`(Aug. 14, 2012).
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`III. TSE (Ex. 1006) Should Be Excluded
`A. TT Timely Objected to TSE, Which Was Relied Upon in
`Petitioners’ Petition
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`TT timely objected to Exhibit 1006 in objections filed March 21, 2016.
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`1
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`
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`Paper 30 at 2-3. Petitioners rely upon TSE (Ex. 1006) in their Petition for their 35
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`CBM2015-00181
`U.S. Patent 7,676,411
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`U.S.C. § 101 grounds and all instituted prior art grounds. E.g., Petition, Paper 7 at
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`21-22 and 60-80.
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`TSE Has Not Been Authenticated under FRE 901
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`B.
`To satisfy the requirement of authenticating or identifying an item of
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`evidence, the proponent must produce evidence sufficient to support a finding that
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`the item is what the proponent claims it is. FRE 901(a). Petitioners have produced
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`no such evidence to support a finding that TSE is authentic, relying solely on
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`Exhibit 1010, the transcript of a 2005 deposition of Atshushi Kawashima, which is
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`insufficient in multiple respects.
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`i.
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`The 2005 Kawashima Deposition Testimony is
`Hearsay
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`The only evidence that even attempts to authenticate TSE is Exhibit 1010,
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`the transcript of the 2005 Kawashima deposition. See Ex. 1010, pp. 97-99. The
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`2005 Kawashima deposition was conducted in a district court case, not any of the
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`CBM proceedings. Ex. 1010 at 1. As a result, the 2005 Kawashima deposition is,
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`by definition, hearsay.
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`FRE 801 defines hearsay as “a statement that: (1) the declarant does not
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`make while testifying at the current trial or hearing; and (2) a party offers in
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`evidence to prove the truth of the matter asserted in the statement.” Since
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`2
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`testimony by Mr. Kawashima in the district court case was not made “while
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`CBM2015-00181
`U.S. Patent 7,676,411
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`testifying at the current trial or hearing,” to the extent such testimony is used to
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`prove the authenticity of TSE, it must be considered hearsay.
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`ii.
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`The residual hearsay exception of FRE 807 applies to
`both the 2005 Kawashima deposition and Patent
`Owner’s evidence from district court litigation
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`However, just like Patent Owner’s evidence from district court litigation
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`(e.g., Ex. 2223 (trader declarations), etc.), the 2005 Kawashima deposition
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`transcript should not be excluded as hearsay. “Hearsay is generally inadmissible
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`because ‘the statement is inherently untrustworthy: the declarant may not have
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`been under oath at the time of the statement, his or her credibility cannot be
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`evaluated at trial, and he or she cannot be cross-examined.’” United States v.
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`Reilly, 33 F.3d 1396, 1409 (3d Cir. 1994); see also Queen v Hepburn, 11 U.S. 290
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`(1813). These concerns are not present with respect to the 2005 Kawashima
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`deposition transcript.
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`Although no exception under FRE 803 or FRE 804 applies, the residual
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`hearsay exception of FRE 807 applies to both Patent Owner’s evidence from
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`district court litigation and the 2005 Kawashima deposition transcript because the
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`parties in this proceeding had the opportunity to cross examine the witnesses from
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`the district court litigation.
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`FRE 807 requires:
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`3
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`a. the statement has equivalent circumstantial guarantees of
`trustworthiness;
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`CBM2015-00181
`U.S. Patent 7,676,411
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`b. it is offered as evidence of a material fact;
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`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
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`d. admitting it will best serve the purposes of these rules and the
`interests of justice.
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`Just like Patent Owner’s evidence from district court litigation, Mr. Kawashima’s
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`2005 deposition transcript satisfies each of these requirements.
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`This is similar to the circumstances in the recently decided Apple v. VirnetX.,
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`IPR2015-00811, Paper No. 44. In that case, the Board denied a motion to exclude
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`declaration testimony from another proceeding as hearsay. Id. at 68-70.
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`Specifically, the Board noted that “[t]he vast majority of testimony in inter partes
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`reviews is admitted in paper form, as a declaration, instead of as live witness
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`testimony. Thus, whether or not testimony is specifically created for a specific IPR
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`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
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`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. At
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`4
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`69.
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`CBM2015-00181
`U.S. Patent 7,676,411
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`Likewise, here, both Patent Owner’s evidence from district court litigation
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`and the Kawashima 2005 deposition transcript are sworn testimony regarding
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`material facts. Indeed, both are from district court litigation, where they were
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`subject to the Federal Rules of Evidence, just like in this proceeding, and thus have
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`equivalent circumstantial guarantees of trustworthiness.
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`Patent Owner’s evidence from district court litigation differs from the
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`Kawashima 2005 deposition transcript only in that Patent Owner exerted greater
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`efforts to obtain better evidence than Petitioners. Patent Owner attempted to bring
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`in alternative evidence through depositions in this proceeding but such efforts were
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`opposed by Petitioner and denied by the Board. See Paper No. 47 at 2-4. Admitting
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`Patent Owner’s evidence from district court litigation thus serves the interests of
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`justice and does not undermine the rule on hearsay, because Patent Owner was
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`precluded from accessing other evidence after exerting reasonable efforts and
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`Petitioners were not prejudiced because they could have deposed Patent Owner’s
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`witnesses here if they wanted to.
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`In contrast, Petitioners did not make reasonable efforts to obtain new
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`nonhearsay evidence authenticating TSE. Instead, Petitioners fought against Patent
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`Owner’s efforts to obtain new nonhearsay evidence by opposing Patent Owner’s
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`request to depose Mr. Kawashima in these proceedings. See Paper No. 34 (Board
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`5
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`deciding it is Petitioner’s responsibility to secure availability of Kawashima).
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`CBM2015-00181
`U.S. Patent 7,676,411
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`Although Patent Owner was eventually able to depose Mr. Kawashima in
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`these proceedings, that does not differentiate the Kawashima 2005 deposition
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`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.
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`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
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`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
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`deposition transcript.1
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`iii.
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`Even if the 2005 Kawashima Deposition Testimony
`was admissible, the deposition testimony raises more
`doubt than it resolves.
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`Rather than supporting a finding under FRE 901(a) that TSE is what
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`Petitioners claim it is, the 2005 Kawashima deposition transcript ultimately raises
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`1 TT timely objected to Exhibit 1010, the 2005 Kawashima deposition
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`transcript, in objections filed March 21, 2016. Paper 30 at 3-4. Petitioners rely
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`upon the 2005 Kawashima deposition transcript in their Petition to establish that
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`TSE is prior art. E.g., Petition, Paper 7 at 11.
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`6
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`additional doubts as to the authenticity of the document.
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`CBM2015-00181
`U.S. Patent 7,676,411
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`For example, in the deposition, Mr. Kawashima draws a conclusion about
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`the authenticity of TSE, a document of hundreds of pages, based on the perceived
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`absence of a mark in “looking briefly through” the document. Specifically, he
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`testified:
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`Q Is this entire document, this document identified as Defendant’s
`Exhibit 179, from August 24 of 1998?
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` A Yes.
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`Q How do you know?
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`
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` A
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` 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.
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` Ex. 1010, pp. 97-98.
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`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:
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`7
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`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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`CBM2015-00181
`U.S. Patent 7,676,411
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`A If you were to compare this with the distributed manual you would
`be able to tell.
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`Ex. 1010, p. 99.
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`Finally Mr. Kawashima’s testimony cannot be relied upon as to
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`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
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`the same family as the ’411 patent. Paper No. 71 at 66. Moreover, at his deposition
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`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
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`support a finding that TSE is what Petitioners claim it is. TSE should thus be
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`excluded.
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`IV. Certain Deposition Testimony of TT’s Experts Dan Olsen (Ex. 1051)
`and Christopher Thomas (Ex. 1052) Should be Excluded
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`8
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`A. TT Timely Objected to the Deposition Testimony, Which Was
`Relied Upon in Petitioners’ Reply
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`CBM2015-00181
`U.S. Patent 7,676,411
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`TT timely objected to Exhibit 1051 during the deposition. Ex. 1051 at 57-58.
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`TT also timely objected to Exhibit 1052 during the deposition. Ex. 1052 at 393-
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`397. Petitioners rely upon pages 57 and 58 of the Olsen deposition transcript (Ex.
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`1051) and pages 393-397 of the Thomas deposition transcript (Ex. 1052) in their
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`Reply for their 35 U.S.C. § 101 grounds. Reply, Paper 105 at 3-4.
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`B.
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`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
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`The answers at page 57 and 58 were in response to vague and ambiguous
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`questions yielding irrelevant testimony that Petitioners are using in a confusing and
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`misleading manner to imply that the claimed inventions do not improve computers.
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`18 Q. Okay. Does the GUI in Figure 3 make
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`19 the computer run faster?
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`20 A. That's not the improvement claimed.
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`21 Q. I'm asking. That's the question I'm
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`22 asking.
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`1 A. It does not.
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`2 Q. Does it allow the computer to use less
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`3 energy?
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`9
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`CBM2015-00181
`U.S. Patent 7,676,411
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`4 MS. KURCZ: Objection, form.
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`5 BY MR. SOKOHL:
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`6 Q. Does the GUI in Figure 3 allow the
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`7 computer to use less energy?
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`8 A. That is not one of the claimed
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`9 improvements, no.
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`10 Q. Does the GUI in Figure 3 make the
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`11 computer more efficient relative to the network?
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`12 A. That's not one of the claimed
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`13 improvements, no.
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`Ex. 1051 at 57:18-58:13. Rather than admitting the claimed inventions do not
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`improve computers, Mr. Olsen was simply stating what was not explicitly recited
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`by the claims. The probative value of this testimony is thus substantially
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`outweighed by a danger of unfair prejudice and confusing the issues as the result of
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`vague questioning. Accordingly, it should be excluded under FRE 403.
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`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
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`The answers at page 393-397 were in response to vague and ambiguous
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`questions yielding irrelevant testimony that Petitioners are using in a confusing and
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`misleading manner to imply that the claimed inventions do not improve computers.
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`10
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`CBM2015-00181
`U.S. Patent 7,676,411
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`16 Q. Does the GUI of Claim 1 of the '411
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`17 Patent cause the recited computing device to
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`18 process data faster than a Figure 2 type GUI?
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`19 MR. GANNON: Object to the form.
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`20 THE WITNESS: Now you're making -- I
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`21 mean that's a very general statement. I can't
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`22 make that statement. You have to look at the
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`1 claims as a whole. So the claim is not directed
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`2 at what you said.
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`3 BY MR. SOKOHL:
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`4 Q. So it's not directed at processing
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`5 data faster?
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`6 A. There's nothing in Claim 1 about
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`7 processing data, processing data faster.
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`8 Q. Is there anything in Claim 1 about the
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`9 computing device processing data more efficiently?
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`10 MR. GANNON: Object to the form.
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`11 THE WITNESS: There's nothing in Claim
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`12 1 about processing data more efficiently. Again,
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`13 you're making a very general statement and you're
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`11
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`14 divorcing the claim from -- I mean you've got to
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`15 look at the invention as a whole, which is all the
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`16 claims.
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`17 BY MR. SOKOHL:
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`18 Q. Anything in any of the claims of the
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`19 '411 that would allow the computing device to
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`20 process data faster?
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`21 MR. GANNON: Object to the form.
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`22 THE WITNESS: The invention detailed
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`1 in the patent does not relate to processing
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`2 anything -- the general concept of what you said
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`3 about processing data faster. It relates to
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`4 specifically what is detailed in the claims and
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`5 described in the specification.
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`6 BY MR. SOKOHL:
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`7 Q. Anything in any of the claims of the
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`8 '411 Patent that would allow the computing device
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`9 to process data more efficiently?
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`10 MR. GANNON: Object to the form.
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`11 THE WITNESS: And my answer is the
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`12
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`CBM2015-00181
`U.S. Patent 7,676,411
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`12 same. You're using a very general term there.
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`13 And the invention is, of the '411 Patent, is very
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`14 specific. And you've got to read all the claims,
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`15 look at the invention as a whole, and read the
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`16 specification. It's not -- you're using a general
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`17 concept of processing something more efficiently
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`18 and that's not what the invention is directed
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`19 towards.
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`20 BY MR. SOKOHL:
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`21 Q. Anything in any of the claims of the
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`22 '411 Patent that would allow the computing device
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`1 to process the data more reliably than say a
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`2 Figure 2 type GUI?
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`3 A. I mean my answer is the same. You're
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`4 using a general concept of processing something,
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`5 data reliably, and that's not what the invention
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`6 is, the GUI tool of the invention is directed to.
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`7 It's directed to specifically --
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`8 the invention is specifically what is detailed in
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`9 the claims and further described in the
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`13
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`U.S. Patent 7,676,411
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`10 specification.
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`11 Q. Anything in any of the claims of the
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`12 '411 Patent that would allow the computing device
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`13 to process data differently than a Figure 2 type
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`14 GUI?
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`15 MR. GANNON: Object to the form.
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`16 THE WITNESS: And, again, you're using
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`17 a general concept, a very general concept, of
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`18 processing data differently. And the invention of
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`19 the '411 Patent is a specific GUI tool that is
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`20 detailed in the claims and described further in
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`21 the specification.
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`1 BY MR. SOKOHL:
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`2 Q. Would your answer be any different for
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`3 the claims of the '132 Patent?
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`4 A. No.
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`5 Q. And would it be any different for the
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`6 claims of the '304 Patent?
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`7 A. No.
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`8 Q. Yeah, my question was ambiguous. And
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`14
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`9 I knew it when I said it.
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`10 I asked you a series of questions
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`11 regarding the computing device.
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`12 A. Yes.
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`13 Q. Would your answer be the same for the
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`14 claims of the '304 Patent?
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`15 A. Yes.
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`16 Q. And would your answer be the same for
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`17 all of those questions for the '132 Patent?
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`18 A. Yes.
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`Ex. 1052 at 393:16-397:18. Rather than admitting the claimed inventions do not
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`improve computers, Mr. Thomas was simply stating what was not explicitly recited
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`by the claims. The probative value of this testimony is thus substantially
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`outweighed by a danger of unfair prejudice and confusing the issues as the result of
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`vague questioning. Accordingly, it should be excluded under FRE 403.
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`Respectfully Submitted,
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`
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`Date: September 23, 2016
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`
`
`/Joshua L. Goldberg/
`By:
`Joshua L. Goldberg (Reg. No. 59,369)
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`15
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`CERTIFICATE OF SERVICE
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`CBM2015-00181
`U.S. Patent 7,676,411
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`The undersigned hereby certifies that a copy of the foregoing PATENT
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`OWNER’S MOTION TO EXCLUDE UNDER 37 C.F.R. 42.64(C) was served
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`on September 23, 2016, via email directed to counsel of record for the Petitioners
`
`at the following:
`
`Robert E. Sokohl
`rsokohl-PTAB@skgf.com
`
`Lori Gordon
`lgordon-PTAB@skgf.com
`
`Richard M. Bemben
`rbemben-PTAB@skgf.com
`
`John C. Phillips
`CBM41919-0008CP1@fr.com
`
`PTAB@skgf.com
`
`
`Dated: September 23, 2016
`
`/Valencia Daniel/
`Valencia Daniel
`Litigation Legal Assistant
`
`Finnegan, Henderson, Farabow, Garrett
`& Dunner, LLP
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`
`
`
`
`