`571-272-7822
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` Paper 30
`Entered: April 19, 2013
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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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`MOTOROLA MOBILITY LLC
`Petitioner,
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`v.
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`MICHAEL ARNOUSE
`Patent Owner.
`____________
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`Case IPR2013-00010
`Patent 7,516,484
`____________
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`
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`Before MICHAEL P. TIERNEY, JONI Y. CHANG, THOMAS L. GIANNETTI,
`and JENNIFER S. BISK, Administrative Patent Judges.
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`GIANNETTI, Administrative Patent Judge.
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`DECISION
`RENEWED MOTION TO WITHDRAW
`37 C.F.R. § 42.10(e)
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`Attorneys Thomas D. Kohler and Lawrence H. Meier, of the law firm
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`Downs Rachlin Martin PLLC (“Downs Rachlin”), have renewed their motion to
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`withdraw from this proceeding. Paper 29 (“Mot.”). For the following reasons the
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`motion is granted.
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`Case IPR2013-00010
`Patent 7,516,484
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`FINDINGS OF FACT
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`Based upon the evidence of record in this proceeding the Board makes the
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`following findings of fact:
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`1. The Petition in this proceeding was filed by Motorola Mobility LLC on
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`October 3, 2012. Paper 2 (“Pet.”). The patent for which inter partes review is
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`sought is U.S. Patent 7,516,484 (the “ʼ484 Patent”). Pet. 1.
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`2. The Petition identifies a Vermont district court action in which the ʼ484
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`patent is being asserted against the Petitioner: Arnouse Digital Devices Corp. v.
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`Motorola Mobility, Inc., No. 5:11-cv-00155-cr (D.Vt.). Pet. 2.
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`3. A copy of an Amended Complaint in that Vermont action was filed by
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`Petitioner as Exhibit 1007 in this proceeding. According to the Amended
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`Complaint, the plaintiff in that proceeding is Arnouse Digital Devices Corp.
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`(“ADD”), a Delaware corporation. Ex. 1007, ¶2.
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`4. The Amended Complaint further avers that Michael Arnouse, the “sole
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`owner” of the ʼ484 patent, has “exclusively licensed ADD under the ʼ484 Patent.”
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`Id. ¶ 10. Further according to the Amended Complaint, “ADD’s exclusive license
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`runs for the full term of the ʼ484 patent and includes all substantial rights in such
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`patent, including the explicit right to sue and recover damages for infringement of
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`the ʼ484 patent and to otherwise seek enforcement of the rights it owns under the
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`ʼ484 patent.” Id. ¶ 11.
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`5. The Amended Complaint is signed by the law firm Downs Rachlin,
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`specifically, by R. Bradford Fawley and Lawrence H. Meier, as attorneys for
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`plaintiff ADD. The complaint is dated October 3, 2011 and was filed two days
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`later, on October 5th.
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`6. On October 26, 2012, a document titled Arnouse Power of Attorney was
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`filed in this proceeding Paper 9. The paper, signed by Michael Arnouse, grants
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`Case IPR2013-00010
`Patent 7,516,484
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`power of attorney in this proceeding to attorneys Lawrence H. Meier and Thomas
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`D. Kohler, and directs that all correspondence and communications be sent to Mr.
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`Meier at Downs Rachlin.
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`7. In the Power of Attorney, Mr. Arnouse states: “As an individual, I hereby
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`certify that to the best of my knowledge and belief I am owner of the entire right,
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`title and interest in and to U.S. Patent 7,516,484, and represent that I am authorized
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`and empowered to sign as patent owner.” The Power of Attorney makes no
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`mention of ADD or the exclusive license to ADD referred to in the Amended
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`Complaint.
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`8. Also on October 26, 2012, a document titled Patent Owner Mandatory
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`Notice Information was filed in this proceeding. Paper 10. The document, signed
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`by attorney Lawrence H. Meier, of Downs Rachlin, identifies Mr. Meier as lead
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`counsel and Mr. Kohler as back-up counsel. The document identifies Mr. Arnouse
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`as the real party-in-interest as “sole owner” of the ʼ484 patent. The document also
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`identifies the district court proceeding in Vermont involving ADD as a related
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`proceeding. There is no other mention of ADD or any mention of the exclusive
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`license to ADD.
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`9. On March 19, 2013, the Board held a telephone conference call. The call
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`was initiated by Mr. Kohler to seek authorization to file a motion to withdraw as
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`counsel. Paper 24. At the hearing the Board raised the question of ADD’s role.
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`The parties were advised that if ADD were effectively the patent owner, ADD’s
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`interests would have to be considered. Furthermore, as ADD is a corporation,
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`ADD would have to be represented by counsel. After discussing the matter
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`further, the Board authorized the motion to withdraw, instructing counsel to
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`address the questions of identity of the patent owner, the basis for the withdrawal,
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`and the steps taken to avoid prejudice to the patent owner’s rights.
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`10. On March 26, 2013, a document entitled Motion to Withdraw as Counsel
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`to Patent Owner was filed. Paper 25. Along with the motion, a supporting
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`Declaration of Michael Arnouse was filed. Paper 26.
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`11. On April 5, 2013, the Board denied the motion, without prejudice, and
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`granted leave to file additional evidence and information in support of a renewed
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`motion. Paper 27 (“Decision”). The Board concluded that based upon the
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`uncontested facts of record, including the complaint in the Vermont district court
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`proceeding, that ADD is the effective patentee and therefore the real party-in-
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`interest in this proceeding. Thus the Board was not persuaded that Mr. Arnouse
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`was empowered to discharge counsel.
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`12. The Board gave Downs Rachlin ten days to submit additional evidence
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`and renew the motion.
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`13. On April 15, 2013, Downs Rachlin filed a document entitled Renewed
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`Motion for Authorization to Withdraw as Counsel (Paper 29) accompanied by
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`exhibits: two notarized letters to the Board from Mr. Arnouse (Ex. 2014, 2015).
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`14. The first letter (Ex. 2014) is signed by Mr. Arnouse in his stated capacity
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`as CEO of ADD, and after stating that Downs Rachlin was retained by him
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`personally, and confirming the existence of the exclusive license, purports on
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`behalf of ADD to discharge Downs Rachlin as counsel “to the extent it has
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`authority to do so.” The second letter signed by Mr. Arnouse (Ex. 2015) simply
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`states: “In my own right and as CEO/President of Arnouse Digital Devices Corp.,
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`[Downs Rachlin] is no longer authorized to represent nor speak on behalf of me
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`personally nor Arnouse Digital Devices Corp., in the Inter Partes Review of US
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`Patent No. 7,516,484.”
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`DISCUSSION
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`Counsel may withdraw from an inter partes review proceeding only with
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`authorization from the Board. 37 C.F.R. § 42.10(e). Under the Office’s current
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`disciplinary rules, “a practitioner shall not withdraw from employment until the
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`practitioner has taken reasonable steps to avoid foreseeable prejudice to the rights
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`of the client, including giving due notice to his or her client, [and] allowing time
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`for employment of another practitioner.” 37 C.F.R. § 10.40(a). Furthermore, in
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`deciding a motion to withdraw, the Board will consider the effect of granting such
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`a motion “on the economy, the integrity of the patent system, the efficient
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`administration of the office, and the ability of the office to timely complete
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`proceedings.” See 35 U.S.C. § 316(b). The Board will interpret its rules “to secure
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`the just, speedy, and inexpensive resolution of every proceeding.” 37 C.F.R. §
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`42.1(b).
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`Our concern here is that the Mandatory Disclosures filed by Downs Rachlin
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`did not properly identify ADD as the real party-in-interest. See Finding of Fact 8,
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`supra. We find this difficult to comprehend, as Downs Rachlin, and specifically
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`Mr. Meier, are counsel of record in the Vermont district court proceeding, where
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`ADD was identified as holder of an exclusive license under the ʼ484 patent that
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`“includes all substantial rights in such patent.” Thus, Downs Rachlin in October
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`2011 filed a district court pleading signed by Mr. Meier naming ADD as the sole
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`plaintiff. See Finding of Fact 4, supra. Presumably, they were aware of
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`Fed.R.Civ.P. 17(a): “An action must be prosecuted in the name of the real party in
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`interest.” Yet before the Board, in their October 2012 mandatory disclosures, they
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`made no mention of the exclusive license or the grant of “all substantial rights” to
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`ADD. Instead, the Board was provided with a carefully worded statement that Mr.
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`Arnouse is the “sole owner” of the ʼ484 patent and is the real party-in-interest.
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`Paper 10. But ownership is not the proper test for determining real-party-in
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`interest, as the Office Patent Trial Practice Guide and the relevant authorities make
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`clear. See discussion in our prior Decision denying the initial motion to withdraw.
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`Paper 27 at 3. It is important for counsel to know that sole ownership is not the
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`dispositive factor in determining real-party-in-interest.
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`While we are concerned by that the correct real party-in-interest was not
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`identified, we also are persuaded that Mr. Arnouse, in his capacity as CEO of
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`ADD, has the apparent authority and right to dismiss Downs Rachlin as counsel.
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`Accordingly, we grant them leave to withdraw. In so doing, however, we do not
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`accept, and specifically reject, Downs Rachlin’s argument that because Mr.
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`Arnouse is the “sole owner” of the ʼ484 patent, he (and not ADD) is entitled to act
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`in this matter. Paper 29, Mot. at 7. This argument ignores the undisputed fact that
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`Mr. Arnouse has effectively assigned ownership in the patent to ADD. See
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`discussion of Sicom Sys. Ltd. v. Agilent Techs, Inc., 427 F.3d 971 (Fed. Cir. 2005),
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`and other authorities cited in our prior Decision, Paper 27, at pp. 2-3. It also
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`ignores Downs Rachlins’ own actions in the Vermont district court.
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`The designation of a real party-in-interest in the proceedings before the
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`Board should be accurate and reflect careful consideration by the parties, as it has
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`important implications. One of these is to identify potential conflicts. Another is
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`to assure the proper application of statutory estoppel provisions. See Office Trial
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`Practice Guide, 77 Fed. Reg. 48756, 48759 (Aug. 14, 2012) (specifically referring
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`to Fed.R.Civ.P. 17(a)). Counsel therefore is cautioned to look beyond the chain of
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`title in designating a real party-in-interest.
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`Finally, we address Mr. Arnouse’s request to appear pro hac vice. This
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`request is denied for the following reason. The real party-in-interest in this
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`proceeding is a corporation, a juristic entity that can only appear through counsel.
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`See 37 C.F.R. § 1.31 (2012). Mr. Arnouse has chosen to license ADD exclusively
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`under the ʼ484 patent, granting the corporation (of which he is the CEO) “all
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`substantial rights” in the patent including the right to bring suit. But the
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`consequence of this decision is that now a juristic entity, ADD, is the “effective
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`patentee,” not Mr. Arnouse. See supra. While Mr. Arnouse may be the record
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`owner of the patent, the holder of “all substantial rights” is his corporation.
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`Therefore, he is not the holder of “all substantial rights” in the patent itself. Along
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`with whatever benefits Mr. Arnouse receives from this arrangement come
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`restrictions, one of which is the prohibition against a corporation representing itself
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`in the USPTO.
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`In view of the foregoing, it is therefore:
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`ORDERDED that the Renewed Motion to Withdraw (Paper 29) is granted;
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`FURTHER ORDERDED that Downs Rachlin, and attorneys Thomas D.
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`Kohler and Lawrence H. Meier, are authorized to withdraw as counsel from this
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`proceeding, 37 C.F.R. § 42.10(e);
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`FURTHER ORDERED that Michael Arnouse’s request to appear pro se in
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`this proceeding is denied; and
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`FURTHER ORDERED that any further filings on behalf of the Patent
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`Owner must be signed by a practitioner authorized to practice before the Board in
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`this proceeding, and further that the Board may decline to accept any filings that
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`are not so signed.
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`Case IPR2013-00010
`Patent 7,516,484
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`PETITIONER:
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`Ko-Fang Chang
`Steven D. Moore
`KILPATRICK TOWNSEND & STOCKTON LLP
`kchang@kilpatricktownsend.com
`smoore@kilpatricktownsend.com
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`PATENT OWNER:
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`Lawrence H. Meier
`Thomas D. Kohler
`DOWNS RACHLIN MARTIN PLLC
`lmeir@drm.com
`tkohler@drm.com
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