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`UNITED STATES PATENT AND TRADEMARK OFFICE
`________________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`________________
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`APPLE INC.,
`VISA INC., and VISA U.S.A. INC.,
`Petitioners,
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`v.
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`UNIVERSAL SECURE REGISTRY LLC
`Patent Owner
`________________
`
`Case CBM2018-000241
`U.S. Patent No. 8,577,813
`________________
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`PATENT OWNER’S REPLY TO PETITIONER’S OPPOSITION TO
`PATENT OWNER’S MOTION TO STRIKE
`IMPROPER REPLY EVIDENCE
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`1 Visa Inc. and Visa U.S.A., Inc., which filed a petition in CBM2019-00025,
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`have been joined as a party to this proceeding.
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`
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`Case No. CBM2018-00024
`U.S. Patent No. 8,577,813
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`In its Petition, Apple Inc. (“Petitioner”) argues that International Patent
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`Application Publication No. WO 2004/051585 A2 (“Jakobsson”) (Ex-1214)
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`discloses several limitations of U.S. Patent No. 8,577,813 (“the ’813 patent). See
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`Petition at 25, 27-91. Petitioner supports these arguments with expert testimony
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`from Dr. Victor Shoup. See Ex-1202. Patent Owner explained in its Patent Owner
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`Response how such allegations are wrong. In addition to further testimony by Dr.
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`Shoup, Petitioner’s reply also proffered a brand new expert witness, Dr. Ari Juels
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`(Ex-1226), which Patent Owner has moved to strike.
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`In opposition to Patent Owner’s motion, Petitioner contends that it is
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`proffering Dr. Juels not only as an expert, but as a fact witness as well. See, e.g.,
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`Opp. at 1 (“Dr. Juels and Dr. Jakobsson are co-inventors”). As explained in the
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`opening motion, this new evidence is untimely because it was not presented in the
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`original Petition, and Petitioner’s newly minted theory that Dr. Juels is also a
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`necessary fact witness because he is an inventor of the asserted prior art reference,
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`compounds that tardiness. Indeed, as an inventor of the art Petitioner relies upon
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`in the Petition, Petitioner could have presented Dr. Juels’ testimony with the
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`Petition. Petitioner chose not to. Moreover, because the Board has denied
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`allowing Patent Owner to rebut this last minute factual and expert evidence, failure
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`to strike Dr. Juels’ declaration is highly prejudicial.
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`1
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`Case No. CBM2018-00024
`U.S. Patent No. 8,577,813
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`I.
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`DR. JUELS’ DECLARATION IS IMPROPER UNTIMELY NEW
`EVIDENCE THAT IS HIGHLY PREJUDICIAL
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`As explained in the opening motion, the governing statute requires a petition
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`to identify “with particularity . . . the evidence that supports the grounds for the
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`challenge to each claim, including . . . affidavits or declarations of supporting
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`evidence and opinions, if the petitioner relies on expert opinions.” 35 U.S.C.
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`§312(a)(3)(B) (emphasis added). The Trial Practice Guide’s Aug. 2018 update
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`(“TPG”) confirms the importance of this requirement: “Petitioner may not submit
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`new evidence or argument in reply that it could have presented earlier . . .” TPG
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`at 14. See SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348, 1356 (2018) (“the petitioner's
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`petition, not the Director’s discretion, is supposed to guide the life of the
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`litigation.”) (emphasis added); cf. Dexcom, Inc. v. Waveform Techs., Inc.,
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`IPR2016-01680 (Paper 46) at 30 (PTAB Feb. 28, 2018) (excluding evidence raised
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`for first time in a reply brief), aff’d Dexcom, Inc. v. Waveform Technologies, Inc.,
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`760 Fed. Appx. 1023 (Fed. Cir. Apr. 3, 2019) (per curiam).
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`While Petitioner argues that Dr. Juels’ testimony is permissible because it
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`responds to Dr. Jakobsson’s testimony regarding the Jakobsson prior art reference,
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`and that it could not have anticipated such testimony, Petitioner’s contentions are
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`incorrect as a matter of law and fact. See Opp. at 2-6.
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`2
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`Case No. CBM2018-00024
`U.S. Patent No. 8,577,813
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`Petitioner primarily relies upon Belden Inc. v. Berk-Tek LLC, 805 F.3d 1064
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`(Fed. Cir. 2015) to argue that reply declarations that respond to patent owner
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`arguments are permissible. Opp. 2-6. However, Belden is clearly distinguishable.
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`To begin with, Belden’s reply declaration solely presented expert testimony--not
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`factual as well as expert testimony, as the instant proceeding concerns. And, the
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`Federal Circuit noted the patent owner in that case failed to even file a sur-reply
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`addressing the issue; unlike here, where the Board has denied allowing Patent
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`Owner to file rebuttal testimony.
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`Petitioner’s other cited cases are inapposite. For example, the Board has
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`distinguished Anacor Pharm., Inc. v. Iancu, 889 F.3d 1372 (Fed. Cir. 2015) on the
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`grounds that the patent owner in that case had prior notice of the supposed new
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`evidence; Petitioner has not even alleged Patent Owner had prior notice of Dr.
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`Juels’ testimony. See Aisin Seiki Co., Ltd. v. Intellectual Ventures II LLC,
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`IPR2017-01538, 2018 WL 6584583, at *27 (PTAB Dec. 12, 2018) (“patent owner
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`had previously discussed those contentions in its own papers”). Hughes Network
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`Sys., LLC v. Calif. Inst. Tech., IPR2015-00059, 2016 Pat. App. LEXIS 1867, at
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`*52-*53 (PTAB Apr. 21, 2016) is likewise irrelevant: “Patent Owner was well
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`aware of Petitioner’s position, which it had the opportunity to address as part of its
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`response.”
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`3
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`Case No. CBM2018-00024
`U.S. Patent No. 8,577,813
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`Apple started this proceeding on May 3, 2018 relying upon a declaration
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`from Dr. Victor Shoup testifying that Jakobsson invalidates the ’813 patent. Yet,
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`Petitioner waited over a year, and on the eve of trial, to introduce testimony of not
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`only a brand new expert, Dr. Ari Juels, but also proffer his testimony as a matter of
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`fact, as an inventor of the reference that is the basis of the Petition. There is no
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`reason Apple could not have presented such evidence in its Petition—Dr. Juels is
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`an inventor of Petitioner’s proffered prior art.
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`Indeed, this new factual evidence is akin to proffering new embodiments of
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`references, which the Federal Circuit has upheld the Board’s declining to consider
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`when a petitioner fails to identify or discuss in a petition. See Ariosa Diagnostics
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`v. Verinata Health, Inc., 805 F.3d 1359, 1367 (Fed. Cir. 2015) (“We see no error in
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`the Board’s rejection of Ariosa’s reliance, in its Reply submissions, on previously
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`unidentified portions of a prior-art reference to make a meaningfully distinct
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`contention.”). The rules are clear; this tardy evidence should be stricken from the
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`proceeding. Indeed, the trial practice guide states that striking is the appropriate
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`course here. See TPG at 18.
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`Further, striking this new evidence is critical here because Patent Owner
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`cannot rebut this improper new factual and expert evidence with a declaration from
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`Dr. Markus Jakobsson. Hence, failure to strike would be highly prejudicial to
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`4
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`Case No. CBM2018-00024
`U.S. Patent No. 8,577,813
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`Patent Owner. Cf. Realtime Data, LLC v. Iancu, 912 F.3d 1368, 1373 (Fed. Cir.
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`2019) (“[T]he Board may not rely on a basis for a decision unless the party
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`adversely affected by such reliance had notice of the basis and an adequate
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`opportunity to address it.”); Dexcom, Inc., IPR2016-01680 at 30 (“Under the
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`circumstances of this case, it would violate the Administrative Procedures Act
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`(‘APA’)’s requirement for notice and opportunity to respond, if we were to rely
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`upon [evidence first submitted in reply].”).
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`II.
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`CONCLUSION
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`“Unlike district court litigation – where parties have greater freedom to
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`revise and develop their arguments over time and in response to newly discovered
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`material – the expedited nature of IPRs brings with it an obligation for petitioners
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`to make their case in their petition to institute.” Intelligent Bio-Systems, Inc. v.
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`Illumina Cambridge LTD., 821 F.3d 1359, 1369 (Fed. Cir. 2016) (affirming
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`Board’s refusal of reply brief and expert declaration). Petitioner failed to comply
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`with this controlling precedent. Indeed, in its Petition, Apple chose to assert the
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`Jakobsson reference and rely upon Dr. Shoup’s expert testimony. Not until the
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`Reply did Petitioner proffer the inventor of that reference as both a factual and
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`expert witness--it could have done both in the Petition. The motion should be
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`granted.
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`5
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`Case No. CBM2018-00024
`U.S. Patent No. 8,577,813
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`Date: June 24, 2019
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` Respectfully submitted,
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`By: /s/ James M. Glass, Reg. No. 46,729
` James M. Glass (Reg. No. 46,729)
`QUINN EMANUEL URQUHART &
`SULLIVAN, LLP
`51 Madison Avenue, 22nd Floor
`New York, NY 10010
`Tel: (212) 849-7000
`Fax: (212) 849-7100
`Email: jimglass@quinnemanuel.com
`
`Lead Attorney for Patent Owner –
`Universal Secure Registry LLC
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`6
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`Case No. CBM2018-00024
`U.S. Patent No. 8,577,813
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`CERTIFICATE OF SERVICE
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`Pursuant to 37 C.F.R. § 42.6(e), the undersigned hereby certifies that
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`PATENT OWNER’S REPLY TO PETITIONER’S OPPOSITION TO PATENT
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`OWNER’S MOTION TO STRIKE IMPROPER REPLY EVIDENCE, was served
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`on June 24, 2019 by e-mailing copies to:
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`Monica Grewal (Reg. No. 40,056)
`monica.grewal@wilmerhale.com
`Ben Fernandez (Reg. No. 55,172)
`ben.fernandez@wilmerhale.com
`Wilmerhale Distribution List
`wh-apple-usr-ipr@wilmerhale.com
`WILMER CUTLER PICKERING HALE AND DORR LLP
`60 STATE STREET
`BOSTON, MA 02109
`
`Mark Selwyn
`mark.selwyn@wilmerhale.com
`WILMER CUTLER PICKERING HALE AND DORR LLP
`950 Page Mill Road
`Palo Alto, CA 94304
`
`Matthew A. Argenti (Reg. No. 61,836)
`margenti@wsgr.com
`Michael T. Rosato (Reg. No. 52,182)
`mrosato@wsgr.com
`WILSON SONSINI GOODRICH & ROSATI
`650 Page Mill Road
`Palo Alto, CA 94304-1050
`
`Date: June 24, 2019
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` Respectfully submitted,
`By: /s/ Razmig H. Messerian
` Razmig H. Messerian (Reg. No. 56,983)
`QUINN EMANUEL URQUHART &
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`Case No. CBM2018-00024
`U.S. Patent No. 8,577,813
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`SULLIVAN, LLP
`865 S. Figueroa St., 10th Floor
`razmesserian@quinnemanuel.com
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`Backup Counsel for Patent Owner –
`Universal Secure Registry LLC
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