UNITED STATES PATENT AND TRADEMARK OFFICE
`_______________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`________________________
`
`Cyanotech Corporation
`Petitioner
`
`v.
`
`The Board of Trustees of the University of Illinois
`Patent Owner
`
`_______________________
`
`IPR2013-00401
`Case:
`Patent No.: 5,527,533
`_______________________
`
`
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`
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`
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`PATENT OWNER’S RESPONSE TO PETITIONER’S OBJECTIONS
`TO EVIDENCE PURSUANT TO 37 C.F.R. §42.64
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`
`Pursuant to 37 C.F.R. § 42.64(2), Patent Owner provides this memorandum
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`
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`and supplemental evidence in response to Petitioner’s Objections to Evidence
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`dated March 28, 2014.
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`A. Objections to Foundation
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`Petitioner’s object to Patent Owner exhibits (“POX”) 2016-2020, 2022,
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`2024, 2025 and 2027 because “they have not been authenticated as required by
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`Federal Rule of Evidence (FRE) 901.” A party authenticates a document by
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`presenting evidence sufficient to support a finding that the document is what the
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`
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`1
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`_______________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`________________________
`
`Cyanotech Corporation
`Petitioner
`
`v.
`
`The Board of Trustees of the University of Illinois
`Patent Owner
`
`_______________________
`
`IPR2013-00401
`Case:
`Patent No.: 5,527,533
`_______________________
`
`
`
`
`
`
`
`
`PATENT OWNER’S RESPONSE TO PETITIONER’S OBJECTIONS
`TO EVIDENCE PURSUANT TO 37 C.F.R. §42.64
`
`
`Pursuant to 37 C.F.R. § 42.64(2), Patent Owner provides this memorandum
`
`
`
`
`
`and supplemental evidence in response to Petitioner’s Objections to Evidence
`
`dated March 28, 2014.
`
`A. Objections to Foundation
`
`Petitioner’s object to Patent Owner exhibits (“POX”) 2016-2020, 2022,
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`2024, 2025 and 2027 because “they have not been authenticated as required by
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`Federal Rule of Evidence (FRE) 901.” A party authenticates a document by
`
`presenting evidence sufficient to support a finding that the document is what the
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`
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`1
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`
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`party claims it to be. See FRE 901(a). The party must show that it has a rational
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`basis for its claim, which it may show through circumstantial evidence. United
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`States v. Wadena, 152 F.3d 831, 854 (8th Cir. Minn. 1998); see also, Anwar v.
`
`Fairfield Greenwich Ltd.,742 F.Supp.2d 367, 372 n.3 (S.D.N.Y. 2010) (rejecting
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`plaintiff’s argument that copies of agreements had not been properly authenticated
`
`where affiant stated that she had “review[ed]” the same). Documents that bear the
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`parties company logo, among other identifiers, are indicative of authenticity. See,
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`e.g., In re Japanese Elec. Prods. Antitrust Litig., 723 F.2d 238, 293 (3d Cir. 1983);
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`FTC v. Hughes, 710 F. Supp. 1520, 1522 (N.D. Tex. 1989). The fact that
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`documents are located in the adverse party’s production (and thus its possession) is
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`enough to authenticate them. See, e.g., United States v. Black, 767 F.2d 1334,
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`1342 (9th Cir.), cert. denied, 474 U.S. 1022 (1985).
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`The following discussion and supplemental evidence eliminates any alleged
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`doubts as to the authenticity of POX 2016-2020, 2022, 2024, 2025 and 2027-2031.
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`POX 2016
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`POX 2016 is a webpage published by the Macular Degeneration Association
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`providing general information about macular degeneration that remains available
`
`on the internet. (http://macularhope.org/about-md/, last visited April 11,
`
`2014.) This webpage describes what macular degeneration is and whom it
`
`typically affects.
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`
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`2
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`POX 2017
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`POX 2017 is an informational article about age-related macular degeneration
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`published by Bayer that remains available on the
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`internet. (http://press.healthcare.bayer.com/html/pdf/presse/en/electronic_press_ki
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`ts/vegf_trap-eye/AMD_Backgrounder_final.pdf, last visited April 11, 2014.) This
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`article describes what ARMD is, who it typically affects, and how it can be
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`treated.
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`POX 2018
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`
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`POX 2018 is a press release dated January 24, 2013, from Nutrex-Hawaii,
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`Inc. (“Nutrex”), a wholly-owned subsidiary of Petitioner, Cyanotech Corporation,
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`published in the Digital Journal. When asked about POX 2018, Brent Bailey, the
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`Chief Executive Office of both Nutrex and Cyanotech, testified that he had no
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`reason to think that the press release (POX 2018) was not from Nutrex-Hawaii.
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`(Bailey March 26, 2014 Depo. Tr. at 175:4-177:10.) The press release ends with
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`the following statement: “About Nutrex-Hawaii Founded with the goal of
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`harnessing the benefits of microalgae to alleviate malnutrition and promote health,
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`Nutrex-Hawaii is a global leader in microalgae products. Learn more at Nutrex-
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`Hawaii.com”. The press release also states that Asthaxanthin is sold online at
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`Nutrex-Hawaii.com and that members of the press can receive a free version of a
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`book “by emailing traci(at)nutrex-hawaii(dot)com.” There are numerous indicia
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`3
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`
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`confirming that this document was a press-release from Nutrex-Hawaii, a wholly-
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`owned subsidiary of Petitioner Cyanotech.
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`POX 2019
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`POX 2019 is the transcript of an interview of Dr. Gerald Cysewski (Chief
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`Scientific Officer at Cyanotech) by Dr. Mercola. Dr. Cysewski testified that he
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`was not sure on the exact date but that he definitively recalled Dr. Mercola
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`interviewing him about the health benefits of natural asthaxanthin. (Cysewski
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`March 7, 2014 Depo. Tr. at 43:11-44:7.) Dr. Cysweski testified that the time spent
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`at the interview, including travel expenses, was spent as part of his job as Chief
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`Scientific Officer at Cyanotech. (Cysewski March 7, 2014 Depo. Tr. 44:8-45:6.)
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`Dr. Cysewski testified about the location, purpose, and substance, of the interview.
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`(Cysewski March 7, 2014 Depo. Tr. at 43:11-50:12.) When asked about specific
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`answer provided in POX 2019, Dr. Cysewski testified that he made the statements.
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`(Cysewski March 7, 2014 Depo. Tr. 45:7-50:12.) The interview to which this
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`transcript corresponds is still available via YouTube at
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`http://www.youtube.com/watch?v=eM_R6qlnUZI (the statement for which Patent
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`Owner’s cite POX 2019 appears at 7:43) and an abbreviated version of the video is
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`available at http://articles.mercola.com/videos.aspx (the statement for which Patent
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`Owner’s cite POX 2019 appears at 15:08).
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`4
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`POX 2020
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`POX 2020 is a printout from the website of Nutrex-Hawaii dated May 14th,
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`2011. The first page displays the Nutrex-Hawaii logo and the subsequent pages
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`include “Nutrex Hawaii News”. United States v. Black, 767 F.2d at 1342.
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`Indeed, Petitioner produced a document bearing the identical text as POX
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`2020 bearing a production number ascribed to Petitioner Cyanotech pursuant to
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`Patent Owner’s Requests for the Production of Document and Things. (Cf. POX
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`2020 with RA-00234287-293 (the text of both documents, including the date and
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`authors, Bob Capelli and Dr. Gerald Cysewski, are identical).) RA-00234287-293
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`is a confidential document and has not been included as an exhibit hereto. Should
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`Petitioner’s object to the characterizations made about RA-00234287-293, Patent
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`Owner reserves the right to supplement its response. Additionally, Dr. Cysewski
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`identified POX 2020 as “a printout of the Nutrex-Hawaii website or a couple pages
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`from the Nutrex-Hawaii website” and that it was an article posted on the Nutrex
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`website. (Cysewski March 7, 2014 Depo. Tr. at 51:1-20; 86:4-6.)
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`
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`POX 2022
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`POX 2022 is an article authored by Siri Khalsa in Nutrition News published
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`in 2006. Mr. Capelli (Vice President of Sales and Marketing for Petitioner
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`Cyanotech) testified that he recognized POX 2022, that the author of POX 2022
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`asked him for some literature and he provided it to her, that the author sent him
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`5
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`
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`POX 2022 before it published, that at least a portion of the article is taken right
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`from a document that Capelli sent to the author, and that Cyanotech distributed the
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`article both electronically and in hard copy for about one or two years after it
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`published. (Capelli March 5, 2014 Depo. Tr. at 263:18-269:4.)
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`POX 2024
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`POX 2024 is a picture taken of a power point slide. The slide includes both
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`the Nutrex-Hawaii logo on the left-hand side and a picture of a bottle of MD
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`Formulas EyeAstin product sold by Nutrex displayed on right-hand side of the
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`slide. Petitioner produced the complete slide presentation that includes POX 2024
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`bearing a production number ascribed to Petitioner Cyanotech pursuant to Patent
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`Owner’s Requests for the Production of Document and Things. (Cf. POX 2024
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`with RA-001079-1128 at 1095.) RA-001079-1128 is a confidential document and
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`has not been included as an exhibit hereto. Should Petitioner’s object to the
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`characterizations made about RA-001079-1128, Patent Owner reserves the right to
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`supplement its response. Nutrex assisted in drafting the slides. (Rule 30(b)6
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`Deposition of Nutrex Tr. at 26:8-27:23.) Nutrex-Hawaii’s Medical Director, Dr.
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`Corish and Suzy Cohen gave the presentation at a convention called Expo West in
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`2011. (Rule 30(b)6 Deposition of Nutrex March 28, 2014 Tr. at. 26:8-27:21.)
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`POX 2024 is a picture of a slide from the Expo West presentation by Dr. Corish in
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`2011. (Rule 30(b)6 Deposition of Nutrex March 28, 2014 Tr. at 32:22-33:1.) Mr.
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`6
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`Capelli testified that he believed that POX 2024 was a slide from a presentation
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`given by Dr. Corish and testified about the slide’s substance. (Capelli March 5,
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`2014 Depo. Tr. at 157:18-158:17.) Mr. Capelli testified that Dr. Corish presented
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`on behalf of Nutrex and that he was a paid consultant. (Capelli March 5, 2014
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`Depo. Tr. at 157.) Mr. Bailey also testified that he attended the Expo West in 2011
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`and that he specifically recalled one slide that had a Nutrex bottle on it, and that
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`Dr. Corish presented the slide while discussing ARMD. (Bailey March 26, 2014
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`Depo. Tr. at 54:21-56:22.)
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`POX 2025
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`POX 2025 is a posting dated March 23, 2013 titled “Asthaxanthin –The
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`World’s Most Powerful Antioxidant”. Dr. Cysewski testified that Dr. Susan Smith
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`Jones is a paid consultant to Nutrex-Hawaii. Dr. Jones maintains a webpage
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`related to natural health supplements, and this page remains available to the public
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`on her website (http://susansmithjones.com/book-page/skinny-astaxanthin-
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`%E2%80%94-king-antioxidants). (Moerck Decl. at ¶ 12.)
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`POX 2027
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`POX 2027 is an article about asthaxanthin and eye health authored by Dr.
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`Mercola titled “Asthaxanthin: The Most Powerful Nutrient Ever Discovered for
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`Eye Health,” dated November 23, 2010, and displayed on the website
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`Mercola.com. Petitioner produced the article at POX 2027 pursuant to Patent
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`7
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`Owner’s Request for the Production of Documents and Things. (Cf. POX 2027
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`with RA-220282-288 (internal email from Bob Capelli’s Cyanotech email address,
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`dated November 23, 2011, attaching and forwarding the full article entitled “The
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`Most Powerful Nutrient Ever Discovered for Eye Health” with the byline “Posted
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`By Dr. Mercola/November 23, 2010/85,580 views”).) RA-220282-288 is a
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`confidential document and has not been included as an exhibit hereto. Should
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`Petitioner’s object to the characterizations made about RA-220282-288, Patent
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`Owner reserves the right to supplement its response. Dr. Mercola maintains a
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`website directed to osteopathic medicine, and this article remains available on that
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`website (http://articles.mercola.com/sites/articles/archive/2010/11/23/astaxanthin-
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`the-eye-antioxidant-550-times-more-powerful-than-vitamin-e.aspx). (Moerck
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`Decl. at ¶ 11.) There is no real dispute that this document is what Patent Owner
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`purports it to be.
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`B. Hearsay Objections
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`Petitioner’s also object to POX 2018-2020, 2022, 2024, 2025, and 2027 as
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`inadmissible hearsay under FRE 801 and FRE 802-807. But the exhibits are not
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`hearsay pursuant to FRE 801(d)(2). The exhibits and statements made therein
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`satisfy either FRE 801(d)(2)(A) as Petitioner’s own statements or FRE(d)(2)(B) as
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`statements of which the Petitioner has manifested an adoption or belief in its truth
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`or both. See Chandler Dawson v. Chandler Dawson and Lyle Bowman, 710 F3d
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`8
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`
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`1347, 1355 (Fed. Cir. Mar. 25, 2013); Schering Corp. v. Pfizer Inc. et al., 189 F.3d
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`218, 238-240 (2nd. Cir. Aug. 17, 1999). Publications offered for the limited
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`purpose of showing industry practice are not hearsay. See Link v. Mercedes-Benz
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`of North America, Inc., 788 F.2d 918 (3d Cir. 1986).
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`POX 2018
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`POX 2018 is a Nutrex press release issued by Nutrex and reflects
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`Petitioner’s own statement; accordingly, it constitutes an admission by party-
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`opponent and is not hearsay. FRE 801(d)(2)(A).
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`POX 2019
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`POX 2019, the transcript of Dr. Mercola’s interview of Dr. Cysewski,
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`represents statements made by Cyanotech’s Chief Scientific Officer, Dr. Cysewski
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`in his role as the Chief Scientific Officer at Cyanotech (Cysewski March 7, 2014
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`Depo. Tr. at 43:11-50:12) and thus reflect Petitioner’s own statement; accordingly,
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`it constitutes an admission by a party-opponent and is not hearsay. FRE
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`801(d)(2)(D).
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`POX 2020
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`POX 2020 is an article included on the Nutrex-Hawaii website with the
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`Nutrex-Hawaii logo and/or “Nutrex-Hawaii-News” identified on each page and
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`thus reflects Petitioner’s own statements or statements in which it manifested an
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`9
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`adoption and belief. FRE 801(d)(2)(A), FRE 801(d)(2)(B). (Cysewski March 7,
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`2014 Depo. Tr. at 51:1-20; 86:4-6.)
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`POX 2022
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`POX 2022 is an article authored by Siri Khalsa in Nutrition News published
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`in 2006. Petitioners showed that it manifested an adoption and belief in the
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`substance of POX 2022 and/or adopted the statements therein as its own by
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`distributing the same for about two years after it published in both hard copy and
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`electronic form. (Capelli March 5, 2014 Depo. Tr. at 263:18-269:4.) Additionally,
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`Mr. Capelli testified that he provided the author of the article with at least a portion
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`of its substance. Id. Thus, this information is not hearsay under FRE 801(d)(2)(B).
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`This article is offered as evidence of industry acclaim and praise that is the
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`perception of those in the relevant arts. Thus, it is not being offered for the truth of
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`the matter asserted. For this reason as well, this article is not hearsay.
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`POX 2024
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`Petitioners contend that the statement made in this slide presented by Dr.
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`Corish noting “Macular degeneration (Univ. of Illinois patent)” and other
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`statements from the slide about macular degeneration are inadmissible hearsay.
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`Petitioner’s manifested an adoption and belief in the substance of POX 2024
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`and/or adopted the statements therein as its own because its Medical Director, a
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`paid consultant to Nutrex-Hawaii, gave the presentation on behalf of Nutrex-
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`10
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`Hawaii with a bottle of Nutrex-Hawaii’s product prominently displayed on the
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`slide along with the Nutrex-Hawaii logo. Accordingly, this slide is not hearsay
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`under FRE 801(d)(2)(D) and/or FRE 801(d)(2)(B).
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`POX 2025
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`Petitioners contend that the statement in this article identifying Dr. Corish as
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`an expert in the Asthaxanthin area is inadmissible hearsay. Statements concerning
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`the reputation of someone to those of skill in the art are not hearsay, but merely
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`reflect the perception other persons in the art have about the subject individual.
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`POX 2027
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`Petitioners contend that Dr. Mercola’s statements about Dr. Tso’s discovery
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`and contributions are inadmissible hearsay. But these statements are not hearsay as
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`the statements are not being relied upon for their truth, but to show the perception
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`of those of skill in the field. Whether the statements made therein are true is
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`immaterial. This is evidence of industry acclaim, which is routinely received by
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`Courts addressing the obviousness of an invention.
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`The exhibits are not hearsay for the additional reason that they show the
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`state of mind of a person of ordinary skill in the art. Patent Owners do not offer
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`the statements to prove that they are in fact true statements; instead, Patent Owners
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`simply seek to show that people in the industry made the statements at issue.
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`Petitioner’s also assert that POX 2016 and POX 2017 are inadmissible hearsay.
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`11
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`Both POX 2016 and 2017 originate from the internet that constitute the type
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`reasonable relied on by an expert.
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`C. Objections to POX 2028-2031 and 2003
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`POX 2028-2031 (replaced with POX 2033-2036)
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`Petitioner’s object to the admissibility of POX 2028-2031 based on FRE
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`402-403, 801, 802-807, and 901. POX 2028-2031 correspond to license
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`agreements between the Patent Owners and four different third parties.1 Petitioner
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`recently deposed two individuals concerning a number of these (and similar)
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`licenses and confirmed that Valensa has numerous licenses with third parties that
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`cover the Tso patent at issue.
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`With respect to the relevance objections under FRE 402 and 403,
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`Petitioner’s argue that these documents “do not establish a sufficient nexus
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`between the subject matter of any of these documents and the challenged claims.”
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`(Petitioner’s Objections at 2.) Petitioner provides no evidence to corroborate this
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`statement. Each of these licenses expressly includes a license to the Tso patent.
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`(Moerck Decl. at ¶¶ 7-10.) It is black letter law that licenses to a patent constitute
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`objective evidence, or secondary considerations, of non-obviousness. It is black
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`1 Patent Owner inadvertently submitted only the first page of these license
`agreements when it filed its Response. Patent Owner hereby submits POX 2033
`through POX 2036, which are the complete license agreements, to replace POX
`2028 through POX 2031, respectively. Petitioner has been in possession of the
`complete licenses agreements since before Patent Owner filed its initial response.
`12
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`letter law that licenses to a patent constitute objective evidence, or secondary
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`considerations, of non-obviousness. See Stratoflex, Inc. v. Aeroquip Corp., 713
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`F.2d 1530, 1538-39 (Fed. Cir. 1983)( “It is jurisprudentially inappropriate to
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`disregard any relevant evidence on any issue in any case, patent cases included.
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`Thus evidence rising out of the so-called “secondary considerations” must always
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`when present be considered en route to a determination of obviousness.”) For this
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`reason, Courts routinely accept licenses to patents being subjected to an
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`obviousness challenge. Rambus Inc. v. Rea, 731 F.3d 1248, 1257 (Fed. Cir. 2013);
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`Star Sci., Inc. v. R.J. Reynolds Tobacco Co., 655 F.3d 1364, 1376 (Fed. Cir. 2011);
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`Hearing Components, Inc. v. Shure Inc., 600 F.3d 1357, 1374-1375 (Fed. Cir.
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`2010); Minn. Mining & Mfg. Co. v. Johnson & Johnson Orthopaedics, Inc., 976
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`F.2d 1559, 1574-75 (Fed. Cir. 1992). Dr. Moerck has submitted a declaration
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`confirming that they are true and accurate copies of licenses with four different
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`third-parties in which Valensa licensed the Tso patent. (Moerck Decl. at ¶ 3.)
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`These documents are highly relevant, and any alleged risk of prejudice, confusion,
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`or waste of time does not “substantially outweigh” the probative value of the
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`license agreements.
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`With respect to the hearsay objections under Rules 801 and 802-807, these
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`licenses are not hearsay, but are verbal acts representing an offer and an acceptance
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`to form a binding agreement and contract. See, e.g., Joe Hand Promotions, Inc. v.
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`13
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`152 Bronx, L.P., No. H-11-3406, 2014 U.S. Dist. LEXIS 42798, *27-28 (S.D. Tex.
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`Mar. 26, 2014); Kepner-Tregoe, Inc. v. Leadership Software, 12 F.3d 527, 540 (5th
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`Cir. 1994). In addition, these licenses are clear business records, subject to Rule
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`803(6). (Moerck Decl. at ¶¶ 4-6.)
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`Finally, with respect to authentication, as previously discussed, Dr.
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`Moerck’s declaration testimony confirms that POX 2033 through POX 2036
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`(corresponding to POX 2028 through POX 2031) are true and accurate copies of
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`licenses to the Tso patent. (Moerck Decl. at ¶ 3.)
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`POX 2003
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`Petitioner’s state that POX 2003 is “an incomplete copy of a deposition
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`transcript” and that the “complete transcript and exhibits should have been
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`submitted.” (Petitioner’s Objections at 2.) To be sure, POX 2003 is an excerpt of
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`the deposition transcript for Patent Owner’s deposition of Petitioner’s expert
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`declarant, Dr. Schwiegert. POX 2003 does not include the portion of the transcript
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`corresponding to Petitioner’s redirect examination of Dr. Schweigert. Petitioner’s
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`examination suffered from many infirmities, including leading questions, questions
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`exceeding the scope of cross-examination, questions exceeding the scope of the
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`original declaration, and questions that resulted in the introduction of new opinions
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`and evidence that was not included in the declaration and was disclosed to Patent
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`Owner for the first time at the deposition. See, e.g., FRE 611(b), 611(c). Patent
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`14
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`Owner only offered an excerpt of the transcript into evidence in order to avoid
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`introducing evidence it does not believe to be admissible or properly in front of the
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`Board. In the event that the Board believes an entire transcript is required;
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`however, without waiving its objections to the testimony elicited from Dr.
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`Schweigert by Petitioner, Patent Owner can provide a complete copy of the
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`deposition transcript.
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`Dated: April 11, 2014.
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`Respectfully submitted,
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`s/Mark D. Schuman
`Mark D. Schuman (Lead Counsel)
`Registration No. 31,197
`CARLSON CASPERS
`225 South Sixth Street, Suite 4200
`Minneapolis, MN 55402
`Telephone: (612) 436-9600
`Facsimile: (612) 436-9650
`mschuman@carlsoncaspers.com
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`Counsel for Patent Owner The Board of
`Trustees of the University of Illinois
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`15
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`CERTIFICATE OF SERVICE
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`Pursuant to 37 C.F.R. § 42.6(e), the undersigned certifies that on April 11,
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`
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`2014, a true and correct copy of the foregoing Patent Owner’s Response to
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`Petitioner’s Objections to Evidence Pursuant to 37 C.F.R. §42.64 was served via
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`electronic mail upon the following:
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`Joseph A. Rhoa (Lead Counsel)
`Registration No. 37,515
`NIXON & VANDERHYE P.C.
`901 North Glebe Road, 11th Floor
`Arlington, VA 22203-1808
`Telephone: (703) 816-4043
`Email: jar@nixonvan.com
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`George E. Darby (Back-up Counsel)
`PARADISE PATENT SERVICES, INC.
`95 – 1045 Alakaina St.
`Mililani, HI 96789
`Telephone: (808) 626-1300
`Email: cyan@teleport-asia.com
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`Counsel for Petitioner Cyanotech Corporation, including
`its subsidiary, Nutrex Hawaii, Inc.
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`s/Mark D. Schuman
`Mark D. Schuman (Lead Counsel)
`Registration No. 31,197
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