Trials@uspto.gov
`571-272-7822
`
`
`
`
`
`Paper 32
`Date: March 8, 2013
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`_____________
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________
`
`MICROSOFT CORPORATION
`Petitioner
`
`v.
`
`PROXYCONN, INC.
`Patent Owner
`____________
`
`Case IPR2012-00026 (TLG)
`Case IPR2013-00109 (TLG)
`Patent 6,757,717 B1
`____________
`
`
`
`
`
`Before SALLY C. MEDLEY, SCOTT R. BOALICK, and THOMAS L.
`GIANNETTI, Administrative Patent Judges.
`
`
`GIANNETTI, Administrative Patent Judge.
`
`
`
`DECISION
`Motion For Additional Discovery
`37 C.F.R. 42.51
`
`
`
`
`
`
`
`571-272-7822
`
`
`
`
`
`Paper 32
`Date: March 8, 2013
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`_____________
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________
`
`MICROSOFT CORPORATION
`Petitioner
`
`v.
`
`PROXYCONN, INC.
`Patent Owner
`____________
`
`Case IPR2012-00026 (TLG)
`Case IPR2013-00109 (TLG)
`Patent 6,757,717 B1
`____________
`
`
`
`
`
`Before SALLY C. MEDLEY, SCOTT R. BOALICK, and THOMAS L.
`GIANNETTI, Administrative Patent Judges.
`
`
`GIANNETTI, Administrative Patent Judge.
`
`
`
`DECISION
`Motion For Additional Discovery
`37 C.F.R. 42.51
`
`
`
`
`
`
`
`
`IPR2012-00026
`IPR2013-00109
`Patent 6,757,717
`
`
`
`
`
`
`
`
`INTRODUCTION
`
`Patent Owner, Proxyconn, Inc., moves for additional discovery relating to
`
`
`
`
`
`
`the alleged commercial success of the invention claimed in Proxyconn’s U.S.
`
`Patent 6,757,717. Paper 26. Proxyconn contends in its separate supporting brief
`
`that such discovery is necessary to obtain evidence of “secondary considerations of
`
`non-obviousness.” Paper 27 (“Motion”) at 1. Petitioner, Microsoft Corporation,
`
`opposes. Paper 30 (“Opp.”). For the reasons that follow, the motion is denied.
`
`
`
`The applicable standard for this motion is set forth in 37 C.F.R.
`
`§ 42.51(b)(2)(i) as follows:
`
`Additional Discovery. The parties may agree to additional discovery
`between themselves. Where the parties fail to agree, a party may
`move for additional discovery. The moving party must show that
`such additional discovery is in the interests of justice . . . .
`
`
`
`
`BACKGROUND
`
`
`
`This trial results from the joinder of two inter partes review proceedings,
`
`
`
`
`
`
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`IPR2012-00026 and IPR2013-00109. In each, Petitioner challenges the
`
`patentability of various ʼ717 patent claims as obvious under 35 U.S.C. § 103(a).
`
`
`
`On February 8, 2013, during a conference call, Patent Owner advised the
`
`Board that discussions with Petitioner Microsoft regarding voluntary production of
`
`certain Microsoft sales data and related information requested by Patent Owner had
`
`not borne fruit. Patent Owner asserted that the information was necessary because
`
`2
`
`
`
`
`IPR2012-00026
`IPR2013-00109
`
`Patent 6,757,717
`
`
`it would show that a Microsoft product (Windows Server) having a feature
`
`
`
`
`(Remote Differential Compression or “RDC”) accused of infringing the ʼ717
`
`patent claims was commercially successful. As this information was not within the
`
`scope of routine discovery under 37 C.F.R. § 42.51(b)(1), and because Microsoft
`
`would not agree to produce it voluntarily, Patent Owner sought the Board’s
`
`authorization to file a motion seeking additional discovery. See id. § 42.51(b)(2).
`
`
`
`Petitioner responded during the conference call that the discovery requests
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`were improper for several reasons. Petitioner asserted that Windows Server does
`
`not use the patented feature. Petitioner further asserted that there were many other
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`reasons to purchase Windows Server besides the RDC feature accused of
`
`infringing the patent. The Board expressed concern that a nexus between the ʼ717
`
`patent and the information sought through discovery was lacking. Therefore, in its
`
`order dated February 11, 2013 (Paper 23), the Board authorized the motion, but
`
`with the following express instruction to Patent Owner: “Patent Owner’s motion
`
`will specifically identify the information sought and address the relevance of that
`
`information, including the nexus between the information sought and the allegation
`
`of commercial success.” (Emphasis added.)
`
`
`
`Patent Owner filed its motion (Papers 26 & 27) on February 18, 2013, and
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`Petitioner filed an opposition (Paper 30) on February 25, 2013.
`
`
`
`
`
`
`
`DISCUSSION
`
`An important Congressional objective in passing the Leahy-Smith America
`
`Invents Act was to provide a quick and cost effective alternative to federal district
`
`court patent litigation. See H. Rep. No. 112-98, at 45-48 (2011). With that goal in
`
`3
`
`
`
`
`IPR2012-00026
`IPR2013-00109
`
`Patent 6,757,717
`
`
`mind, the statute passed by Congress and the rules implementing the statute
`
`
`
`
`provide for limited discovery. See 35 U.S.C. § 316(a)(5)(A); 37 C.F.R. § 42.51(b).
`
`Additional discovery is available, but in inter partes review, only what is necessary
`
`in the interest of justice. See 35 U.S.C. § 316(a)(5)(B); 37 C.F.R. § 42.51(b)(2).
`
`The legislative history makes it clear that the interest of justice should be limited to
`
`minor discovery and special circumstances. 154 CONG. REC. S9988-89 (daily ed.
`
`Sept. 27, 2008) (statement of Sen. Kyl). In light of this, and given the time
`
`deadlines imposed by Congress on these proceedings, the Board will be
`
`conservative in granting leave for additional discovery. Id.
`
`
`
`1. Nexus Requirement
`
`As Patent Owner recognizes, the nexus requirement for proving commercial
`
`success is well-established by the case law and is strictly observed. Thus, as the
`
`Federal Circuit held in Ormco Corp. v. Align Tech., Inc., 463 F.3d 1299, 1311-12
`
`(Fed. Cir. 2006), “[e]vidence of commercial success, or other secondary
`
`considerations, is only significant if there is a nexus between the claimed invention
`
`and the commercial success.” Id. (evidence did not show that the commercial
`
`success was the result of claimed and novel features). In order to establish a
`
`proper nexus, the patent owner must offer “proof that the sales were a direct result
`
`of the unique characteristics of the claimed invention -- as opposed to other
`
`economic and commercial factors unrelated to the quality of the patented subject
`
`matter.” In re Huang, 100 F.3d 135, 140 (Fed. Cir. 1996) (citation omitted)
`
`(concluding that the patentee failed to establish nexus). In In re DBC, 545 F.3d
`
`1373 (Fed. Cir. 2008), the Federal Circuit observed that “[Patentee] has done little
`
`more than submit evidence of sales,” concluding that “[h]owever substantial those
`
`4
`
`
`
`
`IPR2012-00026
`IPR2013-00109
`
`Patent 6,757,717
`
`
`sales, that evidence does not reveal in any way that the driving force behind those
`
`
`
`
`sales was the claimed [invention].” Id. at 1384 (emphasis added).
`
`Where, as here, the patent is said to cover a feature or component of a
`
`product, the patent owner has the additional burden of showing that the
`
`commercial success derives from the feature. Tokai Corp. v. Easton Enters., 632
`
`F.3d 1358, 1369 (Fed. Cir. 2011). Further, especially where the feature is found in
`
`the product of another, there must be proof that it falls within the claims. E.g.,
`
`Demaco Corp. v. F. Von Langsdorff Licensing Ltd., 851 F.2d 1387, 1392
`
`(infringer’s counsel stated at trial that the patent had been copied); Hughes Tool
`
`Co. v. Dresser Industries, Inc., 816 F.2d 1549, 1552 (Fed. Cir. 1987) (patented
`
`O-ring seal copied by defendant).
`
`Despite being directed by the Board to “address the relevance” of the
`
`information sought, “including the nexus between the information sought and the
`
`allegation of commercial success,” Patent Owner failed to provide a sufficient
`
`showing that might establish the relevance of the additional discovery requested,
`
`much less demonstrating that the interest of justice standard has been met. Instead,
`
`Patent Owner argues that such a showing would be “premature” at this stage.
`
`Motion 6-7. We disagree.
`
`
`
`The interest of justice standard for granting additional discovery and its
`
`legislative history require that a showing of relevance be made by the party seeking
`
`additional discovery before the request is granted. See supra. While we agree that
`
`a conclusive showing of nexus is not necessary at this stage, some showing of
`
`relevance is necessary. This is particularly so here, where RDC is itself not a
`
`product but one feature of a complex software product. See Opp. 5-6. Patent
`
`Owner will ultimately have to show that the RDC feature drives demand for the
`
`5
`
`
`
`
`IPR2012-00026
`IPR2013-00109
`
`Patent 6,757,717
`
`
`Windows Server product. As the cases surveyed demonstrate, this puts a heavy
`
`
`
`
`burden on Patent Owner. The Board will not allow Patent Owner additional
`
`discovery with no indication that the information sought will be relevant.1
`
`
`
`2. Patent Owner’s Contentions
`
`Patent Owner contends (without directing us to supporting evidence) that the
`
`discovery requested is directed to “non-public information.” Motion 2. We
`
`disagree. Many of the requests call for information that should be available to
`
`Patent Owner. For example, pricing information (Request 5), product reviews
`
`(Request 10), marketing, advertising and promotional materials (Request 11),
`
`public comments (Request 12), and awards (Request 13) all seem to be within the
`
`scope of information publicly available on the Internet or elsewhere. The Board is
`
`not persuaded of any need for additional discovery from Petitioner of this
`
`information.
`
`Patent Owner also contends that its requests are “narrowly tailored.” Motion
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`2. Again, we disagree. None of the requests are time-limited. Many are imprecise
`
`and unfocused. Thus, Request 3 calls for “any upgrades” by customers. Request 4
`
`calls for sales figures for unspecified Microsoft programs including RDC “or
`
`equivalents.” Requests 5 and 6 call for information on “any [Microsoft] products
`
`that are offered with or without” RDC. Requests 7 and 8 call for documents
`
`concerning the “benefits” and “value” of RDC. Request 9 calls for documents that
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`“illustrate the demand” for RDC. We agree with Petitioner that these requests are
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`insufficiently focused, overly broad, and unduly burdensome. See Opp. 8-9.
`
`
`1 For further guidance on this issue, we refer the parties to the Board’s Decision on
`Motion for Additional Discovery in Garmin International, Inc. et al. v. Cuozzo
`Speed Technologies LLC, Case No. IPR2012-00001 (Paper 26, March 5, 2013).
`
`6
`
`
`
`
`IPR2012-00026
`IPR2013-00109
`Patent 6,757,717
`
`
`
`
`As to sales figures (Requests 1 and 2), Patent Owner contends that a
`
`
`
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`comparison between the version of Windows Server containing RDC and the
`
`previous version without RDC will provide evidence of commercial success.
`
`Motion 8. This is true, according to Patent Owner, because RDC “was one of the
`
`few – if not the only differences” between the two servers. Id. This assertion,
`
`however, is unsupported by Patent Owner and disputed by Petitioner. Petitioner
`
`points out that Microsoft’s Windows Server products have “thousands of features”
`
`(Opp. 5-6), and that many of Microsoft’s customers for Windows Server are
`
`enterprise or annuity customers, who generally upgrade to the newest Microsoft
`
`offering regardless of need or the features of the new version. Opp. 7. In the
`
`absence of any sufficient supporting evidence from Patent Owner, we are not
`
`convinced by Patent Owner’s argument for relevance of this evidence.
`
`
`
`4. Patent Owner’s Authorities
`
`We have reviewed Patent Owner’s citations to authority and find them
`
`unavailing. Most simply confirm the need for proving nexus. See cases cited at
`
`Motion. 6. Others recognize that, once commercial success and nexus are
`
`established, they must be considered. The Federal Circuit’s decision in
`
`Transocean Offshore Deepwater Drilling, Inc. v. Maersk Drilling USA, Inc., 699
`
`F.2d 1340 (Fed. Cir. 2012), is an example. See Motion 5, 6, 8. In Transocean, the
`
`patent owner presented evidence of commercial success and nexus to the patented
`
`technology that was accepted by the jury. Id. at 1350. Unlike Patent Owner here,
`
`however, Transocean relied on the commercial success of its own product: oil
`
`drilling rigs. Id. The patented technology in Transocean was a dual-activity rig
`
`involving drilling two separate well centers. Id. The case did not involve one
`
`7
`
`
`
`
`IPR2012-00026
`IPR2013-00109
`
`Patent 6,757,717
`
`
`feature embedded in a complex software product having “thousands of features.”
`
`
`
`
`See supra. Furthermore, in Transocean, there was persuasive evidence of other
`
`secondary factors such as industry praise, unexpected results, industry skepticism,
`
`copying, licensing, and long-felt need. Id. at 1351-54. We are therefore not
`
`persuaded of the relevance of Transocean or Patent Owner’s other authorities to
`
`the issues presented by this motion.
`
`
`
`CONCLUSION
`
`
`
`Patent Owner has not carried its burden of demonstrating that the additional
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`discovery requested is in the interest of justice. For the foregoing reasons
`
`Petitioner’s motion for additional discovery is denied.
`
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`
`8
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`IPR2012-00026
`IPR2013-00109
`Patent 6,757,717
`
`For Patent Owner
`
`Matthew L. Cutler
`Harness, Dickey & Pierce, PLC
`Email: mcutler@hdp.com
`
`Bryan K. Wheelock
`Harness, Dickey & Pierce, PLC
`Email: bwheelock@hdp.com
`
`For Petitioner
`
`John D. Vandenberg
`Klarquist Sparkman LLP
`john.vandenberg@klarquist.com
`
`Stephen J. Joncus
`Klarquist Sparkman LLP
`stephen.joncus@klarquist.com
`
`
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`
`9
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`
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