`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_____________
`
`IBG LLC, INTERACTIVE BROKERS LLC,
`TRADESTATION GROUP, INC., and
`TRADESTATION SECURITIES, INC.
`Petitioners
`
`v.
`
`TRADING TECHNOLOGIES INTERNATIONAL, INC.
`Patent Owner
`_____________
`
`CBM2016-00087
`Patent 7,412,416 B2
`_____________
`
`
`PETITIONERS’ OPPOSITION TO
`PATENT OWNER’S MOTION TO EXCLUDE
`
`
`
`
`
`
`Mail Stop “PATENT BOARD”
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313–1450
`
`
`
`
`

`

`TABLE OF CONTENTS
`
`CBM2016-00087
`Patent 7,412,416 B2
`
`I.
`
`Introduction ......................................................................................................... 1
`
`II. TSE is relevant and has been properly authenticated. ........................................ 2
`
`A.
`
`TSE is relevant for at least resolving the factual issues undergirding the
`§ 101 and CBM-eligibility analyses............................................................. 2
`
`B.
`
`TSE has been properly authenticated. .......................................................... 3
`
`1.
`2.
`3.
`4.
`
`TSE has been authenticated under FRE 901(b)(1). .................................. 4
`TSE is self-authenticated under FRE 902(11). ......................................... 4
`TSE is authenticated under FRE 901(b)(4). ............................................. 5
`Patent Owner deposed Mr. Kawashima twice and still has no basis to
`dispute his testimony or the authenticity of Exhibit 1015. ....................... 7
`III. The 2005 Kawashima deposition transcript is not impermissible hearsay. ........ 9
`
`IV. Mr. Thomas’s testimony is highly probative and admissible. ..........................11
`
`V. Conclusion .........................................................................................................13
`
`
`
`
`
`
`
`

`

`UPDATED EXHIBIT LIST
`
`CBM2016-00087
`Patent 7,412,416 B2
`
`1003
`1004
`1005
`
`1006
`
`1007
`
`1008
`
`1009
`
`1010
`
`1011
`
`1012
`1013
`1014
`
`1015
`
`1016
`
`1017
`
`1018
`
`Ex. No. Description
`1001
`U.S. Patent No. 7,412,416 B2 to Friesen et al. (“ʼ416 patent”)
`1002
`File History of Application Ser. No. 11/417,522, which became the
`’416 patent, as filed and obtained from PAIR (“’416 File History”)
`U.S. Patent No. 7,533,056 to Friesen et al. (“ʼ056 patent”)
`INTENTIONALLY SKIPPED
`TD Ameritrade Holding Corp. v. Trading Techs. Int’l, Inc.,
`CBM2014-00131, Paper 19 (“’131 Ins. Dec.”)
`TD Ameritrade Holding Corp. v. Trading Techs. Int’l, Inc.,
`CBM2014-00131, Paper 24 (“’131 Reh’g Dec.”)
`TD Ameritrade Holding Corp. v. Trading Techs. Int’l, Inc.,
`CBM2014-00131, Paper 38 (“’131 POR”)
`IBG LLC v. Trading Techs. Int’l, Inc., CBM2015-00179, Paper 21
`(“’179 POPR”)
`Trading Techs. Int’l. v. CQG, No. 05-cv-4811, Slip. Op. (N.D. Ill.
`Feb. 24, 2015) (“TT v. CQG Slip. Op.”)
`Transcript of the Deposition of Christopher Thomas, April 28, 2015
`(“Thomas Tr.”)
`Redacted Second Corrected Expert Report of Christopher Thomas,
`Trading Technologies International, Inc. v. CQG, Inc., Case No.
`1:05-CV-04811 (N.D. Ill. Dec. 12, 2013) (“Thomas Report”)
`Expert Declaration of Kendyl A. Román (“Román Decl.”)
`Curriculum Vitae of Kendyl A. Román (“Román CV”)
`List of Materials Considered by Kendyl A. Román (“Román List of
`Materials”)
`“Futures/Option Purchasing System Trading Terminal Operation
`Guidelines,” Tokyo Stock Exchange (“TSE JP”)
`Certified Translation of “System for Buying and Selling Futures and
`Options Transaction Terminal Operational Guidelines” (“TSE”)
`Certificate of Translation for “System for Buying and Selling
`Futures and Options Transaction Terminal Operational Guidelines”
`(“TSE Certificate”)
`Deposition Transcript of Atsushi Kawashima, Trading Technologies
`International, Inc., v. eSPEED, Inc., Case No. 04-cv-5312, United
`States District Court, Northern District of Illinois, Eastern Division,
`dated November 21, 2005 (“Kawashima Dep. Tr.”)
`U.S. Patent No. 5,619,631 to Schott (“Schott”)
`
`1019
`
`
`
`- i -
`
`

`

`CBM2016-00087
`Patent 7,412,416 B2
`
`1026
`1027
`1028
`1029
`
`1030
`
`1031
`1032
`1033
`
`1034
`1035
`
`Ex. No. Description
`1020
`U.S. Patent No. 5,646,992 to Subler et al. (“Subler”)
`1021
`INTENTIONALLY SKIPPED
`1022
`U.S. Patent No. 5,136,501 to Silverman et al. (“Silverman”)
`1023
`U.S. Patent No. 5,297,031 to Gutterman et al. (“Gutterman”)
`1024
`WO 90/11571 to Belden
`1025
`Mark J. Powers, “Starting Out in Futures Trading,” Sixth Edition,
`2001 (“Powers”)
`History of the American and NASDAQ Stock Exchanges
`David M. Weiss, “After the Trade is Made,” 1993 (“Weiss”)
`INTENTIONALLY LEFT BLANK
`Alan Cooper, “About Face: The Essentials of User Interface
`Design,” First Edition, 1995. (“Cooper”)
`Ben Shneiderman, “Designing the User Interface: Strategies for
`Effective Human-Computer Interaction,” Third Edition, 1998
`(“Shneiderman”)
`INTENTIONALLY SKIPPED
`INTENTIONALLY SKIPPED
`Richard W. Arms Jr., “Profits in Volume - Equivolume Charting,”
`1971 (“Arms”)
`INTENTIONALLY SKIPPED
`Inside Macintosh, Promotional Edition, Apple Computer, Inc., 1985
`(“Inside Macintosh”)
`Valerie Illingworth, and I. C. Pyle, Dictionary of Computing, 4th
`Ed, Oxford University Press, 1996 (“Oxford Dictionary”)
`U.S. Patent No. 1,760,287 to Schippers (“Schippers”)
`INTENTIONALLY SKIPPED
`INTENTIONALLY SKIPPED
`Merriam-Webster’s Collegiate Dictionary, Tenth Edition, 1998.
`TradeStation Gr’p, Inc. v. Trading Techs. Int’l, Inc., CBM2015-
`00161, Paper 29 (“’161 Ins. Dec.”)
`U.S. Patent No. 5,347,452 to Bay, Jr. (“Bay”)
`Transcript of the Deposition of Atushi Kawashima, IBG, LLC et al.
`v. Trading Techs. Int’l, Inc., CBM2015-00179, -00181, and -00182,
`June 17, 2016
`Declaration of Robert E. Sokohl.
`SERVED (NOT FILED)
`
`1036
`
`1037
`1038
`1039
`1040
`1041
`
`1042
`1043
`
`1044
`1045
`
`
`
`- ii -
`
`

`

`CBM2016-00087
`Patent 7,412,416 B2
`
`1047
`
`1048
`
`1049
`
`1050
`
`1051
`
`1052
`
`Ex. No. Description
`1046
`Exhibit No. 1 from the Deposition of Atushi Kawashima, IBG, LLC
`et al. v. Trading Techs. Int’l, Inc., CBM2015-00179, -00181, and -
`00182, June 17, 2016.
`Certified English Translation of Exhibit No. 1 from the Deposition
`of Atushi Kawashima, IBG, LLC et al. v. Trading Techs. Int’l, Inc.,
`CBM2015-00179, -00181, and -00182, June 17, 2016.
`Certification of Translation of Exhibit No. 1 from the Deposition of
`Atushi Kawashima, IBG, LLC et al. v. Trading Techs. Int’l, Inc.,
`CBM2015-00179, -00181, and -00182, June 17, 2016.
`Exhibit No. 2 from the Deposition of Atushi Kawashima, IBG, LLC
`et al. v. Trading Techs. Int’l, Inc., CBM2015-00179, -00181, and -
`00182, June 17, 2016
`Certified English Translation of Exhibit No. 2 from the Deposition
`of Atushi Kawashima, IBG, LLC et al. v. Trading Techs. Int’l, Inc.,
`CBM2015-00179, -00181, and -00182, June 17, 2016.
`Certification of Translation of Exhibit No. 2 from the Deposition of
`Atushi Kawashima, IBG, LLC et al. v. Trading Techs. Int’l, Inc.,
`CBM2015-00179, -00181, and -00182, June 17, 2016.
`Exhibit No. 3 from the Deposition of Atushi Kawashima, IBG, LLC
`et al. v. Trading Techs. Int’l, Inc., CBM2015-00179, -00181, and -
`00182, June 17, 2016.
`Certified English Translation of Exhibit No. 3 from the Deposition
`of Atushi Kawashima, IBG, LLC et al. v. Trading Techs. Int’l, Inc.,
`CBM2015-00179, -00181, and -00182, June 17, 2016.
`Certification of Translation of Exhibit No. 3 from the Deposition of
`Atushi Kawashima, IBG, LLC et al. v. Trading Techs. Int’l, Inc.,
`CBM2015-00179, -00181, and -00182, June 17, 2016.
`Exhibit No. 4 from the Deposition of Atushi Kawashima, IBG, LLC
`et al. v. Trading Techs. Int’l, Inc., CBM2015-00179, -00181, and -
`00182, June 17, 2016.
`Certified English Translation of Exhibit No. 4 from the Deposition
`of Atushi Kawashima, IBG, LLC et al. v. Trading Techs. Int’l, Inc.,
`CBM2015-00179, -00181, and -00182, June 17, 2016.
`Certification of Translation of Exhibit No. 4 from the Deposition of
`Atushi Kawashima, IBG, LLC et al. v. Trading Techs. Int’l, Inc.,
`CBM2015-00179, -00181, and -00182, June 17, 2016.
`Deposition Transcript of Christopher H. Thomas, IBG LLC et al. v.
`Trading Techs. Int’l, Inc., CBM2016-00087, May 8, 2017.
`
`1053
`
`1054
`
`1055
`
`1056
`
`1057
`
`1058
`
`
`
`- iii -
`
`

`

`CBM2016-00087
`Patent 7,412,416 B2
`
`1060
`
`1061
`
`1062
`
`1063
`
`1064
`
`1065
`
`1066
`1067
`1068
`1069
`
`Ex. No. Description
`1059
`Deposition Transcript of Christopher H. Thomas, IBG LLC et al. v.
`Trading Techs. Int’l, Inc., CBM2016-00032, January 27, 2017.
`Deposition Transcript of Christopher H. Thomas, IBG LLC et al. v.
`Trading Techs. Int’l, Inc., CBM2015-00179, August 17, 2016.
`Growth and Change in the Eighties, New York Stock Exchange
`Annual Report, 1983.
`Terrell, E., “History of the American and NASDAQ Stock
`Exchanges,” Business Reference Services, September 2006.
`Rustin, R., “Stock Exchange’s New Home May Feature Push-
`Button Trades Via Private Offices,” The Wall Street Journal, May
`13, 1969.
`Slip Opinion, Trading Technologies International, Inc. v. CQG,
`Inc., et al., Appeal No. 2016-1616 (Fed. Cir. Jan. 18, 2017).
`Memorandum Opinion and Order, Trading Technologies
`International, Inc. v. CQG, Inc., et al., Case No. 05-cv-4811 (N.D.
`Ill.), February 24, 2015.
`Merriam-Webster Collegiate Dictionary, Eleventh Edition, 2008
`Webster’s New World College Dictionary, Fourth Edition, 2012
`Declaration of Adam Kessel in Support of Pro Hac Vice Motion
`Patent Owner’s Motion to Exclude, IBG LLC, et al. v. Trading
`Technologies International, Inc., CBM2015-00181, September 23,
`2016.
`Transcript of Conference Call Between Board and Parties, IBG
`LLC, et al. v. Trading Technologies International, Inc., CBM2015-
`00179, CBM2015-00181, and CBM2015-00182, June 6, 2016.
`Final Written Decision, IBG LLC, et al. v. Trading Technologies
`International, Inc., CBM2015-00181, September 23, 2016.
`
`
`1070
`
`1071
`
`SERVED EXHIBITS (NOT FILED)
`
`Ex. No. Description
`1045
`Updated Certificate of Translation for “System for Buying and
`Selling Futures and Options Transaction Terminal Operational
`Guidelines”
`
`
`
`
`
`
`
`- iv -
`
`

`

`CBM2016-00087
`Patent 7,412,416 B2
`
`I.
`
`Introduction
`
`The Board should deny Patent Owner’s Motion to Exclude (Paper 29).
`
`Patent Owner seeks to exclude TSE (Exs. 1015 and 1016) because it allegedly
`
`lacks relevance and is not properly authenticated. (Paper 29 at 1-5.) Patent Owner
`
`is wrong because TSE—which, inter alia, is probative of the state of the art at the
`
`time of the alleged invention—is relevant for resolving the factual inquiries that
`
`undergird the § 101 and CBM-eligibility analyses. Mr. Kawashima, the author of
`
`TSE, twice authenticated the document: first in his 2005 deposition; then again in
`
`his 2016 deposition. Patent Owner participated in both depositions.
`
`Patent Owner also seeks to exclude the transcript of Mr. Kawashima’s 2005
`
`deposition (Ex. 1018), alleging that it is impermissible hearsay. (Paper 29 at 5-7.)
`
`Ironically, Patent Owner now argues that Exhibit 1018 does not satisfy the residual
`
`exception to hearsay. In CBM2015-00181, Patent Owner argued the exact
`
`opposite—an inconsistent position that Patent Owner neglects to disclose to the
`
`Board and Petitioners. (Ex. 1069 at 3-6.) And, Mr. Kawashima’s 2016 deposition
`
`(Ex. 1043), held at the behest of Patent Owner in these CBM proceedings, cured
`
`any and all hearsay objections to his 2005 testimony.
`
`Finally, Patent Owner seeks to exclude cross-examination testimony of its
`
`own expert that Patent Owner finds unfavorable. Patent Owner’s expert, Mr.
`
`Thomas, admitted that certain claims of a related patent do not improve computers.
`
`- 1 -
`
`

`

`CBM2016-00087
`Patent 7,412,416 B2
`(See, e.g., Ex. 1060, 248, 263-69.) His testimony is relevant to the issue of patent
`
`eligibility. Patent Owner had a full and fair opportunity to rehabilitate Mr. Thomas
`
`regarding the testimony at-issue through redirect. It chose not to.
`
`Accordingly, the Board should deny Patent Owner’s Motion to Exclude.
`
`II. TSE is relevant and has been properly authenticated.
`A. TSE is relevant for at least resolving the factual issues
`undergirding the § 101 and CBM-eligibility analyses.
`
`TT incorrectly argues that TSE (Ex. 1015 (Japanese-language original) and
`
`1016 (certified English translation)) are not relevant because “[t]he Board did not
`
`institute on any invalidity grounds involving TSE.” (Paper 29 at 2.) TSE is relevant
`
`in this proceeding for at least resolving the factual issues undergirding the § 101
`
`analysis and the CBM-eligibility analysis.
`
`Although § 101 eligibility is a question of law, it is “rife with underlying
`
`factual issues.” Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335, 1339 (Fed. Cir.
`
`2013), vacated on other grounds sub nom. WildTangent, Inc. v. Ultramercial, LLC,
`
`134 S. Ct. 2870 (2014); see also Listingbook, LLC v. Mkt. Leader, Inc., 144 F.
`
`Supp. 3d 777, 784-85 (M.D.N.C. 2015). “[P]ragmatic analysis of § 101 is
`
`facilitated by considerations analogous to those of §§ 102 and 103 as applied to the
`
`particular case.” Internet Patents Corp. v. Active Networks, Inc., 790 F.3d 1343,
`
`1347 (Fed. Cir. 2015). And in a similar vein, the “technological invention” inquiry
`
`in the CBM-eligibility test asks whether the claimed subject matter as a whole
`
`
`
`- 2 -
`
`

`

`CBM2016-00087
`Patent 7,412,416 B2
`recites a technological feature that is novel and unobvious over the prior art, and
`
`solves a technical problem using a technical solution. 37 C.F.R. § 42.301(b).
`
`TSE is relevant to these issues. It is probative of the state of the art at the
`
`time of the alleged invention, of what was conventional and well known, and of
`
`whether the claimed invention is novel and unobvious over the prior art. Indeed,
`
`the Petition relies on TSE in its § 101 analysis (Paper 3 at 34), as well as its § 103
`
`analysis (passim). Patent Owner fails to identify any unfair prejudice, confusion of
`
`issues, misleading of the fact-finder, undue delay, waste of time, or needless
`
`presentation of evidence, see FRE 403, caused by TSE.
`
`Because TSE is relevant to issues in this proceeding and Patent Owner fails
`
`to show otherwise, the Board should not exclude TSE.
`
`TSE has been properly authenticated.
`
`B.
`Petitioner has produced unequivocal and unrebutted evidence showing that
`
`Exhibit 1015 is a true and correct copy of the 1998 manual issued by the Tokyo
`
`Stock Exchange. That evidence meets the requirements for authentication under
`
`each of Fed. R. Evid. 901 and 902. Because Petitioner properly authenticated TSE
`
`in numerous ways, and Patent Owner offers no evidence suggesting that TSE is not
`
`what Petitioner purports it is, Patent Owner’s request to exclude Exhibits 1015 and
`
`1016 should be denied.
`
`
`
`- 3 -
`
`

`

`CBM2016-00087
`Patent 7,412,416 B2
`TSE has been authenticated under FRE 901(b)(1).
`
`1.
`Fed. R. Evid. 901(b)(1) provides that evidence may be authenticated by the
`
`“testimony of a witness with knowledge.” The 2005 deposition of Mr. Kawashima
`
`(Ex. 1018) provides such evidence of authenticity for Exhibit 1015.
`
`Mr. Kawashima’s 2005 deposition testimony establishes that: (1) Exhibit
`
`1015 is “the current futures options trading system -- trade manual” (compare Ex.
`
`1015 at 1 (marked “DX 179” with bates numbering “TSE 647-981”); with Ex.
`
`1018, 9:19-10:9); (2) the document was prepared and disseminated in 1998 by the
`
`Tokyo Stock Exchange (Ex. 1018, 10:19-24, 12:22-24); (3) Mr. Kawashima had
`
`personal knowledge of that, as he “was in charge of preparing this document” (Id.
`
`at 11:3); (4) he prepared Exhibit 1015 in the ordinary course of business, as a
`
`regular practice of the Tokyo Stock Exchange (Id. at 11:4-14); and (5) Exhibit
`
`1015 was maintained thereafter at the Tokyo Stock Exchange in the ordinary
`
`course of business. (Id. at 11:15-24.) Mr. Kawashima’s 2005 deposition testimony
`
`is more than “sufficient to support a finding that [Exhibit 1015] is what [Petitioner]
`
`claims it is.” Fed. R. Evid. 901(a). Patent Owner has offered no evidence
`
`suggesting that the TSE manual is not what Petitioner purports it is.
`
`TSE is self-authenticated under FRE 902(11).
`
`2.
`Exhibit 1015 is self-authenticated under Fed. R. Evid. 902(11) because it
`
`comes from the business records of the Tokyo Stock Exchange. Mr. Kawashima’s
`
`
`
`- 4 -
`
`

`

`CBM2016-00087
`Patent 7,412,416 B2
`testimony establishes that preparation and maintenance of manuals, such as the
`
`TSE manual, was a regularly conducted activity by the Tokyo Stock Exchange.
`
`(See, e.g., Ex. 1018, 11:4-24.) Mr. Kawashima was an employee with the requisite
`
`knowledge during the relevant timeframe to establish this. (Id. at 5:15-21.)
`
`Manuals prepared in the ordinary course of business “fall under the business record
`
`exception” and “meet the authentication standard.” Dataquill Ltd. v. Handspring,
`
`Inc., 2002 WL 31870560 at *3 (N.D. Ill. Dec. 23, 2002).
`
`Mr. Kawashima’s testimony stands unrebutted that Exhibit 1015 was
`
`prepared and maintained as a regularly conducted activity in the ordinary course of
`
`business. (Ex. 1018, 11:4-24.) Fed. R. Evid. 803(6)(B)-(D). When Mr. Kawashima
`
`testified in 2005 as to its authenticity, the document was only seven years old. (Ex.
`
`1018, 10:19-24.) Fed. R. Evid. 803(6)(A). Patent Owner has not shown, nor can it,
`
`that “the source of information or the method or circumstances of preparation
`
`indicate a lack of trustworthiness.” Fed. R. Evid. 803(6)(E). Accordingly, all of the
`
`requirements for authenticating Exhibit 1015 as a record of regularly conducted
`
`activity are satisfied in this case. Fed. R. Evid. 902(11).
`
`TSE is authenticated under FRE 901(b)(4).
`
`3.
`Although not necessary, Exhibit 1015 is also authenticated under Fed. R.
`
`Evid. 901(b)(4) which provides that “appearance, contents, substance, internal
`
`patterns, or other distinctive characteristics of the item, taken together with all the
`
`
`
`- 5 -
`
`

`

`CBM2016-00087
`Patent 7,412,416 B2
`circumstances” is sufficient to satisfy Fed. R. Evid. 901(a). The certified English
`
`translation of Exhibit 1015 confirms that Exhibit 1015 bears the name of the
`
`“Tokyo Stock Exchange Operation System Division” and the date “August, 1998.”
`
`(Ex. 1016 at 5.) Exhibit 1015 shows a distinctive layout with a large number of
`
`unique illustrations. Exhibit 1015 also includes the bates numbering applied in
`
`connection with the related district court action, Trading Technologies
`
`International, Inc. v. eSpeed, Case No. 04-cv- 5312. (Ex. 1015, marked “DX 179”
`
`with bates numbers “TSE 647-981,” and page numbering “1-1,” etc.) This
`
`branding is distinctive and confirms Exhibit 1015 is what Petitioner claims it to be.
`
`(Compare Ex. 1015 (first page marked “DX 179”; bates numbers TSE 647-981)
`
`with Ex. 1018, 9:19-10:9.) In view of this, Petitioner has laid a sufficient
`
`foundation to establish that Exhibit 1015 is authentic under Fed. R. Evid.
`
`901(b)(4). See, e.g., Ericsson Inc. v. Intellectual Ventures I LLC, IPR2014-00527,
`
`Paper 41 at 12 (May 18, 2015) (finding collection of papers with sequential pages
`
`authenticated).
`
`Petitioner also served supplemental evidence providing additional support
`
`that Exhibit 1015 is what it purports to be. This includes Mr. Kawashima’s 2016
`
`deposition transcript and deposition exhibits (Exs. 1043, 1046-1057), and evidence
`
`that TT disclosed the same, bates-stamped version of TSE to the Office during
`
`prosecution of U.S. Patent No. 8,185,467, and that Exhibit 1015 was obtained from
`
`
`
`- 6 -
`
`

`

`CBM2016-00087
`Patent 7,412,416 B2
`the file history of the ’467 patent. (Ex. 1044, Sokohl Decl. ¶ 1.) Thus, there is no
`
`question that Exhibit 1015 is the same TSE manual referred to in the 2005
`
`Kawashima deposition, authenticated by the 2005 Kawashima deposition
`
`transcript.
`
`Furthermore, independent of Kawashima’s 2005 deposition testimony (Ex.
`
`1018), Petitioner authenticated Exhibit 1015 during Mr. Kawashima’s second
`
`deposition. (Ex. 1043, 45:7-46:3.) Thus, regardless of whether his prior testimony
`
`is considered, Exhibit 1015 has been properly authenticated.
`
`4.
`
`Patent Owner deposed Mr. Kawashima twice and still has
`no basis to dispute his testimony or the authenticity of
`Exhibit 1015.
`
`Patent Owner fails to mention in its motion that it deposed Mr. Kawashima
`
`in 2016. It first deposed Mr. Kawashima in 2005, resulting in the transcript offered
`
`as Exhibit 1018. Exhibit 1018 authenticates the TSE manual. But Petitioner made
`
`Mr. Kawashima available for cross-examination in these CBM proceedings
`
`specifically to allow Patent Owner to ask questions about the TSE manual and his
`
`alleged bias. (See Ex. 1070, 9:18-10:9 (Counsel for Patent Owner stating, “We
`
`understand that Mr. Kawashima won’t be made available again and we’ve
`
`conditionally agreed that this single deposition will be allowed admissibility in all
`
`of the proceedings, even those not yet filed, to the extent that TSE is being used in
`
`the same way.”); see also Ex. 1043, 26:22-27:25.)
`
`
`
`- 7 -
`
`

`

`CBM2016-00087
`Patent 7,412,416 B2
`The second deposition took place on June 17, 2016. (Ex. 1043.) During this
`
`deposition Mr. Kawashima corroborated his prior testimony. (Id. at 45:7-61:3;
`
`43:2-21; Exs. 1046-1057.) Patent Owner conspicuously omits this testimony and
`
`cites nothing from the 2016 Kawashima deposition transcript in its motion. Having
`
`failed to support a challenge to the veracity or reliability of Mr. Kawashima’s
`
`testimony, despite the opportunity to do so, Patent Owner has no reasonable basis
`
`to question authenticity.
`
`While Patent Owner criticizes the way Mr. Kawashima verified his
`
`identification of the TSE manual (based on his personal knowledge about how it
`
`was prepared), Patent Owner does not cite any legal authority in support of the
`
`standard it asks the Board to impose on Mr. Kawashima. (Paper 29 at 2-4.) Patent
`
`Owner’s suggestion that Mr. Kawashima’s testimony is conclusory does not
`
`establish untrustworthiness. (Ibid.) And its allegation that Mr. Kawashima is biased
`
`is merely self-serving speculation. (Ibid.)
`
`Patent Owner continues to accuse Mr. Kawashima of being biased merely
`
`because he is employed by the Tokyo Stock Exchange. (Id. at 4.) This is
`
`unsubstantiated. Despite being given a full and fair opportunity to cross-examine
`
`him extensively on his prior testimony and credibility, Patent Owner has
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`repeatedly failed to discredit Mr. Kawashima or show that he is biased. Regardless
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`of what Patent Owner subjectively believes, Patent Owner has failed to support its
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`CBM2016-00087
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`allegations with facts. The fact is that Mr. Kawashima wrote the TSE manual years
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`before the Tokyo Stock exchange allegedly challenged Patent Owner’s Japanese
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`patent. (Ex. 1043, 46:12-47:1.) Mr. Kawashima testified that he was not involved
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`in the alleged challenge to the Japanese patent. (Id. at 32:9-13.)
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`Furthermore, Patent Owner’s evidentiary objections are improper, as any
`
`alleged bias goes to the weight of the testimony, and not its admissibility. Polaris
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`Wireless, Inc. v. Trueposition, Inc., IPR2013-00323, Paper 62 at 39, 42 (Nov. 3,
`
`2014) (weighing alleged bias based on the witness’s position as the “Vice President
`
`of Petitioner with significant financial interests” including stock options;
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`concluding that it was not significant).
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`In sum, despite having two full and fair opportunities to cross-examine Mr.
`
`Kawashima on the TSE manual, Patent Owner still fails to point out any
`
`inconsistency or infirmity in his prior testimony. This cuts directly against Patent
`
`Owner’s contention that “the 2005 Kawashima deposition transcript ultimately
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`raises doubts as to the authenticity of the document.” (Paper 29 at 3.) It does not.
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`Patent Owner has not met its burden to show that the TSE manual (Exhibit
`
`1015) should be excluded from the record.
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`III. The 2005 Kawashima deposition transcript is not impermissible
`hearsay.
`
`Patent Owner asserts that Petitioner failed to authenticate TSE (Exhibit
`
`1015) because the 2005 Kawashima deposition transcript (Ex. 1018)—which
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`Patent 7,412,416 B2
`authenticates the TSE manual—is allegedly hearsay. (Paper 29 at 4-7.) These
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`arguments fail for two reasons.
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`First, in CBM2015-00181, Patent Owner conceded that the 2005 Kawashima
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`deposition transcript is admissible. (Ex. 1069 at 3-6; see also Ex. 1071 at 68 (“In
`
`fact, Patent Owner appears to concede that Mr. Kawashima’s testimony is not
`
`hearsay because it falls under an exception to the hearsay rule.”).)
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`As previously conceded by Patent Owner, the 2005 Kawashima deposition
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`transcript falls under the residual hearsay exception of Fed. R. Evid. 807. Exhibit
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`1018 is a professionally prepared deposition transcript taken before a notary public
`
`pursuant to the Fed. R. Civ. P. (Ex. 1018 at 1.) There is no dispute that the
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`deposition occurred when and where it did, and that Exhibit 1018 is a true and
`
`correct copy of what transpired. Mr. Kawashima gave his statement under oath.
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`(Ex. 1018, 5:1-4.) As such, Exhibit 1018 “has equivalent circumstantial guarantees
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`of trustworthiness.” Fed. R. Evid. 807(a)(1). Exhibit 1018 is also more probative
`
`than any other evidence Petitioner can obtain through reasonable efforts because it
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`was taken close in time to when the TSE manual was prepared and disseminated.
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`Fed. R. Evid. 807(a)(2), (3). Finally, admitting Exhibit 1018 into evidence is in the
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`interests of justice because it will provide as complete a record as possible
`
`regarding the TSE manual. Fed. R. Evid. 807(a)(4).
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`CBM2016-00087
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`And again, Mr. Kawashima made himself available for cross-examination in
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`these CBM proceedings. This resolves any hearsay concern with respect to Exhibit
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`1018. Specifically, Mr. Kawashima addressed his 2005 statements “while
`
`testifying at the current trial or hearing” and sat for cross-examination. Fed. R.
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`Evid. 801(c)(1). Accordingly, Exhibit 1018 is not untrustworthy evidence and any
`
`hearsay objection has been cured. As such, TT’s motion fails.
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`IV. Mr. Thomas’s testimony is highly probative and admissible.
`Patent Owner urges the Board to exclude choice portions of Mr. Thomas’
`
`cross-examination testimony. (Paper 29 at 7-13 (citing Exhibit 1060, 248, 263-
`
`69).) Essentially, Patent Owner seeks to exclude unfavorable testimony; not
`
`irrelevant, prejudicial, confusing, or misleading testimony.
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`Fed. R. Evid. 403 provides that evidence may be excluded if its probative
`
`value is substantially outweighed by the danger of unfair prejudice, confusing the
`
`issues, misleading the fact-finder, undue delay, wasting time, and/or presenting
`
`needlessly cumulative evidence. Here, the material sought to be excluded consists
`
`of admissions explaining how certain related claims are not directed to various
`
`technological improvements. These admissions are highly probative of patent
`
`eligibility.
`
`Patent Owner appears to rely on the “unfair prejudice ” or “confusing”
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`aspects of Fed. R. Evid. 403. (Paper 29 at 13.) But there is no danger of confusing
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`CBM2016-00087
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`or misleading the Board. The Board is perfectly capable of according these
`
`admissions appropriate weight in view of all the evidence. And Patent Owner has
`
`failed to demonstrate even a remote likelihood that the statements will be
`
`misinterpreted or misunderstood. Patent Owner may disagree with the legal
`
`conclusions to be drawn from these admissions; but that is not a cognizable basis
`
`for excluding evidence.
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`And, as a general policy, it is not unfairly prejudicial to place the burden of
`
`seeking clarification on the testifying expert. In fact, this has long been the Board’s
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`practice.1 Here, counsel for Petitioner properly instructed the witness. (Exhibit
`
`
`1 Cf. U.S. PATENT & TRADEMARK OFFICE, Standing Order of January 3, 2006
`
`Governing Contested Cases Assigned to Trial Division, Board of Patent Appeals
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`and Interferences, Cross Examination Guidelines, Appendix, p. 72 (Jan. 2006),
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`available https://www.uspto.gov/web/offices/dcom/bpai/Standing-Order.pdf
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`(“Guideline [1] At the beginning of a cross examination, the party conducting the
`
`cross examination must instruct the witness on the record to ask deposing counsel,
`
`rather than the witness’s own counsel, for clarifications, definitions or explanations
`
`of any words, questions or documents presented during the cross examination. The
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`witness must follow these instructions”). See also Hall v. Clifton Precision, 150
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`F.R.D. 525 (E.D. Pa. 1993) (serving as the model for the Standing Order).
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`CBM2016-00087
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`1060, 5:21-6:4.) Having been instructed, and free to seek clarification as needed,
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`the answers provided are in accordance with the ground rules for cross-
`
`examination. Patent Owner’s attempt to erase truthful, albeit unfavorable,
`
`responses given by its expert should be denied.
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`V. Conclusion
`The Board should deny Patent Owner’s Motion to Exclude.
`
`
`
`Date: July 18, 2017
`
`1100 New York Avenue, N.W.
`Washington, D.C. 20005–3934
`(202) 371–2600
`
`
`
`
`
`
`
`Respectfully submitted,
`STERNE, KESSLER, GOLDSTEIN & FOX P.L.L.C.
`
`/Richard M. Bemben/
`Robert E. Sokohl (Reg. No. 36,013)
`Lori A. Gordon (Reg. No. 50,633)
`Richard M. Bemben (Reg. No. 68,658)
`Attorneys for Petitioners
`
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`CBM2016-00087
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`CERTIFICATE OF SERVICE (37 C.F.R. § 42.6(e))
`The undersigned hereby certifies that the foregoing PETITIONERS’
`
`OPPOSITION TO PATENT OWNER’S MOTION TO EXCLUDE and
`
`accompanying exhibits were served electronically via e–mail on July 18, 2017, in
`
`their entireties on Attorneys for Patent Owner:
`
`
`Leif R. Sigmond, Jr. (Lead Counsel) sigmond@mbhb.com
`Michael D. Gannon (Back-up Counsel) gannon@mbhb.com
`Jennifer M. Kurcz (Back-up Counsel) kurcz@mbhb.com
`Cole B. Richter (Back-up Counsel) richter@mbhb.com
`MCDONNELL, BOEHNEN, HULBERT & BERGHOFF LLP
`
`Steven F. Borsand (Back-up Counsel) tt-patent-cbm@tradingtechnologies.com
`Jay Q. Knobloch (Back-up Counsel) jay.knobloch@tradingtechnologies.com
`Trading Technologies International, Inc.
`
`Respectfully submitted,
`STERNE, KESSLER, GOLDSTEIN & FOX P.L.L.C.
`
`/Richard M. Bemben/
`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: July 18, 2017
`
`1100 New York Avenue, N.W.
`Washington, D.C. 20005–3934
`(202) 371–2600
`
`
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