UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`TARGET CORPORATION,
`
`Petitioner
`
`v.
`
`DESTINATION MATERNITY CORPORATION,
`
`Patent Owner
`
`
`
`Case IPR2013-00530, Patent RE43,563 E
`
`Case IPR2013-00531, Patent RE43,563 E
`
`Case IPR2013-00532, Patent RE43,531 E
`
`Case IPR2013-00533, Patent RE43,531 E
`
`
`
`DECLARATION OF
`
`VINCENT A. THOMAS, CPA, CVA, CFF, ABV
`
`REGARDING COMMERCIAL SUCCESS
`
`Submitted July 25, 2014
`
`
`
`CONFIDENTIAL - PURSUANT TO PROTECTIVE ORDER
`
`Target Corporation Exhibit 1116
`
`Target vv DMC
`IPR2013-00530, 531, 532, 533
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`TARGET CORPORATION,
`
`Petitioner
`
`v.
`
`DESTINATION MATERNITY CORPORATION,
`
`Patent Owner
`
`
`
`Case IPR2013-00530, Patent RE43,563 E
`
`Case IPR2013-00531, Patent RE43,563 E
`
`Case IPR2013-00532, Patent RE43,531 E
`
`Case IPR2013-00533, Patent RE43,531 E
`
`
`
`DECLARATION OF
`
`VINCENT A. THOMAS, CPA, CVA, CFF, ABV
`
`REGARDING COMMERCIAL SUCCESS
`
`Submitted July 25, 2014
`
`
`
`CONFIDENTIAL - PURSUANT TO PROTECTIVE ORDER
`
`Target Corporation Exhibit 1116
`
`Target vv DMC
`IPR2013-00530, 531, 532, 533
`
`
`
`TABLE OF CONTENTS
`
`I.
`
`EXPERIENCE AND CREDENTIALS ................................................................... 1
`
`II.
`
`SCOPE OF ASSIGNMENT ............................................................................... 2
`
`III.
`
`INFORMATION RELIED UPON ....................................................................... 5
`
`IV. SUMMARY OF OPINIONS ............................................................................. 5
`
`V.
`
`BACKGROUND ............................................................................................. 7
`
`A. The ’531 And ’563 Patents ................................................................. 7
`
`B.
`
`DMC and Secret Fit Belly Bottoms .................................................... 11
`
`C.
`
`Legal Framework ............................................................................. 14
`
`VI. MR. GREEN FAILS TO ASSESS THE COMMERCIAL SUCCESS OF THE CLAIMS
`
`SUBJECT TO OBVIOUSNESS ........................................................................ 16
`
`VII. ANALYSIS OF MR. GREEN'S OPINIONS REGARDING COMMERCIAL SUCCESS
`
`.................................................................................................................. 20
`
`A. Overview ......................................................................................... 20
`
`B. Mr. Green’s Basis For Commercial Success Opinion is Deficient ....... 22
`
`C.
`
`Factors Unrelated to Asserted Claims of the Patents-In-Suit ............ 28
`
`CONFIDENTIAL
`PURSUANT TO PROTECTIVE ORDER
`
`i
`
`
`
`U. 5. Patent and Trademark Office, Before the Patent Trial and Appeal Board
`
`Target Corporation v. Destination Maternity Corporation
`
`Cases IPR2013—00530, —00531, ~00532, -00533
`
`EXPERIENCE AND CREDENTIALS
`
`1.
`
`I am a Senior Managing Director
`
`in the Forensic & Litigation
`
`Consulting ("FLC") practice of FTI Consulting,
`
`Inc.
`
`("FTI"), a multidisciplinary
`
`international financial advisory and consulting firm.
`
`I am a member of the FLC
`
`National Leadership Team, serve as market and administrative leader for the
`
`Chicago and Indianapolis offices and also. co—lead FTI’s National
`
`Intellectual
`
`Property Practice. Before joining FTI,
`
`I was a partner with the international
`
`professional services firm, KPMG, LLP.
`
`2.
`
`I have significant experience assisting companies and clients with
`
`complex accounting, corporate finance and litigation issues.
`
`I focus on the
`
`preparation of sophisticated economic analyses and the assessment of damages
`
`in various types of commercial disputes; and over the course of my career, I have
`
`analyzed economic and financial issues in more than one hundred commercial
`
`disputes, many of which involved patent, copyright, trade secret, and trademark
`
`infringement. Many of those assignments have also involved complex studies of
`
`damages and sophisticated valuation analysis
`
`in matters involving various
`
`biotechnology and pharmaceutical products, and drug technologies.
`
`3.
`
`In addition to preparing damages studies in commercial litigation,
`
`I
`
`also have
`
`significant
`
`experience
`
`in
`
`corporate,
`
`financial,
`
`and accounting
`
`management positions, including Analyst and Director as well as Chief Financial
`
`Officer for a high—tech company, where I was responsible for managing its
`
`intellectual property portfolio.
`
`In that capacity, as well as during my consulting
`
`CONFIDENTIAL— PURSUANT TO PROTECTIVE ORDER
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`PAGE 1
`
`
`
`U. S. Patent and Trademark Office, Before the Patent Trial and Appeal Board
`
`Target Corporation v. Destination Maternity Corporation
`
`Cases IPR2013-00530, ~00531, -00532, —00533
`
`career, I have been involved in license negotiations, performing royalty analysis,
`
`valuing intellectual property and reviewing and analyzing license agreements.
`
`4.
`
`I graduated cum laude from DePauw University with a Bachelor of
`
`Arts degree in Economics and subSequently received a Masters of Business
`
`Administration degree from Indiana University.
`
`I am a Certified Public
`
`Accountant, Certified Valuation Analyst, and am Certified in Financial Forensics
`
`and Accredited in Business Valuation.
`
`I am also a member of the American
`
`Institute of Certified Public Accountants and National Association of Certified
`
`Valuation Analysts.
`
`Exhibit 1111 contains
`
`a
`
`summary of my education,
`
`experiences, prior testimony, and publications/seminars that I have authored.
`
`II.
`
`SCOPE OF ASSIGNMENT
`
`5.
`
`V Target Corporation (”Target” or ”Petitioner”) filed four petitions for
`
`inter partes review (”IPR”) of various claims of U.S. Patent RE43,531 E ("’531
`
`patent”),
`
`titled ”Belly Covering Garment,” and US. Patent RE43,563 E (”’563
`
`patent”), also titled ”Belly Covering Garment.
`
`II 1,2
`
`The patents-in-suit are owned
`
`by Destination Maternity Corporation (”DMC”) and relate to bottomsthat are
`
`1 Jointly referred to as ”patents-in-suit”.
`
`2 Exhibit 1027 (Institution Decision |PR2013-00530), Exhibit 1029 (Institution
`
`Decision IPR2013-00531), Exhibit 1031 (Institution Decision |PR2013-00532),
`
`Exhibit 1033 (Institution Decision |PR2013-00533).
`
`CONFIDENTIAL — PURSUANT TO PROTECTIVE ORDER
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`PAGE 2
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`
`
`U. 5. Patent and Trademark Office, Before the Patent Trial and Appeal Board
`
`Target Corporation v. Destination Maternity Corporation
`
`Cases IPR2013—00530, -00531, -00532, -00533
`
`worn during different stages of pregnancy, different stages of post-partum body
`
`changes, and different stages of torso weight gains and losses. Generally,
`
`I
`
`understand the bottoms are trousers or skirts with an attached belly panel. DMC
`
`sells bottoms under its trademark ”Secret—Fit Belly” that DMC represents are
`
`covered by the patents-in—suit.
`
`6.
`
`On February 14, 2014 and February 19, 2014, the Patent Trial and
`
`Appeal Board (”PTAB”) issued decisions related to the ’563 patent3 and ’531
`
`patent,4 respectively.
`
`I understand that the PTAB Institution Decisions related to
`
`the ’563 patent found that there is a reasonable likelihood that the Petitioner
`
`would prevail in showing anticipation of claims 1—3, 6—8, 10, 11, 16, and 20,5 and
`
`that claims 3, 4, and 12-14 will likely be shown to be obvious.6 I understand that
`
`3 Exhibit 1027 (Institution Decision IPR2013—00530); Exhibit 1029 (Institution
`
`Decision |PR2013-00531).
`
`4 Exhibit 1031 (Institution Decision |PR2013—00532), Exhibit 1033 (Institution
`
`Decision |PR2013—00533).
`
`5 Exhibit 1027 (Institution Decision lPR2013—00530), p. 22; Exhibit 1029
`
`(Institution Decision lPR2013-00531), p. 29.
`
`6 Exhibit 1027 (Institution Decision IPR2013-00530), p. 22; Exhibit 1029
`
`(Institution Decision |PR2013-00531), p. 29.
`
`CON FIDENTIAL— PURSUANT TO PROTECTIVE ORDER
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`PAGE 3
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`
`
`U. 5. Patent and Trademark Office, Before the Patent Trial and Appeal Board
`
`Target Corporation v. Destination Maternity Corporation
`
`Cases IPR2013—00530, -00531, -00532, -00533
`
`the PTAB Institution Decisions related to the ’531 patent found that there is
`
`reasonable likelihood that the Petitioner would prevail in showing anticipation of
`
`claims 1, 2, 5, 10, 17, 24-26, 28, and 29,7 and that claims 6, 11, 15, 16, 26, and 27
`
`will likely be shown to be obvious.8
`
`_0 I have been retained by the Petitioner
`
`through its Counsel, Faegre Baker Daniels LLP (”Counsel”), to review and respond
`
`to Mr. Green’s analysis and opinions.
`
`7 Exhibit 1031 (Institution'Decision |PR2013f00532), p. 23; Exhibit 1033
`
`(Institution Decision |PR2013-00533), p. 25.
`
`8 Exhibit 1031 (Institution Decision |PR2013—00532), p. 23; Exhibit 1033
`
`(Institution Decision IPR2013—00533), p. 25.
`
`9 Exhibit 2022 (Declaration of Philip Green Regarding Commercial Success), 1] 1.
`
`10 Exhibit 2022 (Declaration of Philip Green Regarding Commercial SUCCESS), 1i 9.
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`CONFIDENTIAL — PURSUANT TO PROTECTIVE ORDER
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`PAGE 4
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`
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`U. 5. Patent and Trademark Office, Before the Patent Trial and Appeal Board
`
`Target Corporation v. Destination Maternity Corporation
`
`Cases IPR2013—00530, ~00531, ~00532, ~00533
`
`III.
`
`INFORMATION RELIED UPON
`
`8.
`
`During the course of my work in this matter,
`
`I have examined
`
`documents provided to me by Counsel and other information I obtained from
`
`public sources. This declaration and the opinions and conclusions reached herein
`
`are based on my review of these documents as well as my knowledge, education,
`
`experience, and training. A listing of the specific documents I considered and
`
`reviewed is contained in the attached Exhibit 1112.
`
`9.
`
`My opinions contained herein are the results of my investigations to
`
`date. They are to be used for the specific purposes of these proceedings and are
`
`not to be used for any other purpose without the express written consent of FTI.
`
`I
`
`reserve the right
`to supplement, amend or alter these opinions based on
`information that hereafter becomes I available,
`including information that
`
`becomes available prior to and during the time of trial.
`
`IV.
`
`SUMMARY OF OPINIONS
`
`.10.
`
`In my opinion, Mr. Green’s analysis and opinions are not a relevant
`
`or reliable assessment of whether the claims at issue in this matter impacted the
`
`sales and/or the financial results for the Secret Fit Belly bottoms.
`
`11.
`
`In particular, Mr. Green failed to appropriately assess the commercial
`
`success of certain dependent claims subject to obviousness challenges in this
`
`matter. Rather, Mr. Green assessed the commercial success of the overall
`
`product
`
`that DMC alleges is covered by the patents—in-suit, which includes
`
`CONFIDENTIAL— PURSUANT TO PROTECTIVE ORDER
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`PAGE 5
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`
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`U. S. Patent and Trademark Office, Before the Patent Trial and Appeal Board
`
`Target Corporation v. Destination Maternity Corporation
`
`Cases IPR2013—00530, —00531, ~00532, ~00533
`
`features of both the independent and dependent claims of the patents-in-suit.
`
`It
`
`is my understanding that
`
`independent claims in this matter are subject to
`
`anticipatory challenges such that secondary considerations of obviousness are
`
`inapplicable. Thus, since Mr. Green failed to assess the impact on the Secret Fit
`
`Belly bottoms’ commercial success resulting from the dependent claims at issue,
`
`his analyses and opinions regarding commercial success are not relevant to the
`
`issue at hand.
`
`12.
`
`Notwithstanding Mr. Green’s failure to address commercial success
`
`as it relates to the dependent claims subject to obviousness challenges in this
`
`matter, Mr. Green’s analysis fails to establish a prima facie showing of a nexus
`
`between the claims at issue in these proceedings and the commercial success of
`
`the Secret Fit Belly bottoms. That is, the evidence that Mr. Green relied upon is
`
`insufficient to establish that the commercial success of the Secret Fit Belly
`
`bottoms as compared to the non—Secret Fit Belly bottoms is related to the claims
`
`at issue.
`
`In fact, Mr. Green fails to demonstrate that there are not other factors
`
`that could be influencing the sales of Secret Fit Belly bottoms, such as differences
`in styles, colors, in—stock availabilities, sales and marketing efforts, promotions or
`
`incentives, in—store placements, quality of materials, and a myriad of other items
`
`unrelated to the claims at issue that could explain why the Secret Fit Belly
`
`bottoms are outperforming the non—Secret Fit Belly bottoms.
`
`CON FIDENTIAL— PURSUANT TO PROTECTIVE ORDER
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`PAGE 6
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`
`
`U. 5. Patent and Trademark Office, Before the Patent Trial and Appeal Board
`
`Target Corporation v. Destination Maternity Corporation
`
`Cases IPR2013—00530, —00531, -00532, —00533
`
`V.
`
`BACKGROUND
`
`A.
`
`The '531 And ’563 Patents
`
`13.
`
`I understand claim 1 of the ’531 generally calls for a garment with an
`
`upper portion that includes a belly panel that expands to cover and fit over a
`
`growing abdomen during different stages of pregnancy.11 The lower portion of
`
`the garment has a first torso encircling circumference that recedes downward for
`
`expansion of the belly panel.12 The upper portion of the garment also has a
`
`second torso encircling circumference that encircles the torso just beneath the
`
`wearer’s breast area to hold the garment up and in place in a location of
`
`11 Exhibit 1031 (Institution Decision |PR2013-00532), pp. 5-6; Exhibit 1033
`
`(Institution Decision |PR2013—00533), pp. 5—6; Exhibit 1018 (U.S. Patent
`
`RE43,531 E), claim 1.
`
`12 Exhibit 1031 (Institution Decision IPR2013-00532), pp. 5-6; Exhibit 1033
`
`(Institution Decision |PR2013—00533), pp. 5—6; Exhibit 1018 (U.S. Patent
`
`RE43,531 E), Claim 1.
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`CONFIDENTIAL— PURSUANT TO PROTECTIVE ORDER
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`PAGE 7
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`U. 5. Patent and Trademark Office, Before the Patent Trial and Appeal Board
`
`Target Corporation v. Destination Maternity Corporation
`Cases IPR2013—00530, ~00531, -00532, -00533
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`maximum girth of the abdomen, such that the wearer’s entire pregnant abdomen
`
`is substantially covered during all stages of pregnancy.13
`
`14.
`
`The ’563 patent is a continuation of the ’531 patent.
`
`I understand
`
`claim 1 of the ’563 patent generally calls for an expansible belly panel that
`
`substantially covers a wearer’s entire belly region, which region covers an area
`
`from just beneath the wearer’s breast area to beneath the wearer’s belly.14 The
`
`belly panel has an upper edge portion with a first encircling circumference in the
`
`wearer’s upper abdomen region and a lower edge portion with a second
`5
`
`encircling circumference in the wearer’s lower abdomen region.1
`
`The lower
`
`portion of the garment has a torso encircling circumference that
`
`recedes
`
`13 Exhibit 1031 (Institution Decision |PR2013-00532), pp. 5—6; Exhibit 1033
`
`(Institution Decision IPR2013-00533), pp. 5—6; Exhibit 1018 (U5. Patent
`
`RE43,531 E), claim 1.
`
`14 Exhibit 1027 (Institution Decision |PR2013—00530), pp. 5-6; Exhibit 1029
`
`(Institution Decision |PR2013-00531), pp. 5-6; Exhibit 1001 (US. Patent
`
`RE43,563 E), claim 1.
`
`15 Exhibit 1027 (Institution Decision |PR2013-00530), pp. 5-6; Exhibit 1029
`
`(Institution Decision |PR2013-00531), pp. 5-6; Exhibit 1001 (U.S. Patent
`
`RE43,563 E), claim 1.
`
`CON FIDENTIAL— PURSUANT TO PROTECTIVE ORDER
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`PAGE 8
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`U. 5. Patent and Trademark Office, Before the Patent Trial and Appeal Board
`
`Target Corporation v. Destination Maternity Corporation
`
`Cases IPR2013-00530, -00531, —00532, -00533
`
`downward to allow for expansion of the belly pane
`
`16
`
`|.
`
`I understand claim 1 of the
`
`’563 patent does not mention pregnancy.17
`
`15.
`
`As discussed above,
`
`the PTAB instituted IPR proceedings on the
`
`grounds of obviousness for several dependent claims of the patents—in—suit:
`
`o For the ’531 patent, claims 6, 11, 15, 16, 26, and 27 are the relevant
`dependent claims for obviousness considerations.18 In dependent
`claims 6 and 11, the garment lower portion has a partial waistband
`
`extending from the side seams of the garment
`
`lower portion 1)
`
`extending across a back side of the garment lower portion where the
`
`partial waistband widens above a wearer’s pelvis, or 2) tapering
`
`toward the side seams and widening above a wearer’s pelvis across a
`back side of
`the garment
`lower portion,
`respectively.19
`For
`dependent claims 15 and 16, an edge margin of the garment upper
`
`portion is folded over and knitted (both claims) or sewn (claim 16) to
`
`15 Exhibit 1027 (Institution Decision |PR2013—00530), pp. 5—6; Exhibit 1029
`
`(Institution Decision IPR2013—00531), pp. 5—6; Exhibit 1001 (U.S. Patent
`
`RE43,563 E), claim 1.
`
`17 Exhibit 1001(u.s. Patent RE43,563 E), claim 1.
`
`18 Exhibit 1031 (Institution Decision |PR2013-00532), p. 23; Exhibit 1033
`
`(Institution Decision IPR2013—00533), p. 25.
`
`19 Exhibit 1018 (U.S. Patent RE43,531 E), claims 6, 11.
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`CON FIDENTIAL— PURSUANT TO PROTECTIVE ORDER
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`PAGE 9
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`
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`U. 5. Patent and Trademark Office, Before the Patent Trial and Appeal Board
`
`Target Corporation v. Destination Maternity Corporation
`
`Cases lPR2013—00530, —00531, -00532, —00533
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`an inside of the fabric to provide a perimeter hem stitch.20
`
`In
`
`dependent claims 26 and 27, the garment lower portion is comprised
`
`of denim jeans and a zipperless fly, respectively.
`
`0 For the ’563 patent, claims 3, 4, and 12 — 14 are the relevant
`dependent claims for obviousness considerations.21
`In dependent
`claims 3 and 4, the trousers are comprised of denim jeans (claim 3)
`
`and the denim jeans have one or more pockets and a sewn zipperless
`fly front (claim 4).22 For dependent claim 12, the top edge of the
`margin of the belly panel is folded over and sewn or knitted to the
`inside of the belly panel fabric.23 Dependent claim 13 calls for a belly
`panel that has a double layer tubular structure.24 Finally, dependent
`
`claim 14 comprises a partial waistband that extends across a back
`
`side of the lower edge portion and extends down into side seams of
`an article of connected clothing.25
`
`20 Exhibit 1018 (U.S. Patent RE43,531 E), claims 15, 16.
`
`21 Exhibit 1027 (Institution Decision |PR2013-00530), p. 22; Exhibit 1029
`
`(Institution Decision IPR2013—00531), p. 29.
`
`22 Exhibit 1001 (Us. Patent RE43,563 E), claims 3, 4.
`
`23 Exhibit 1001 (us. Patent RE43,563 E), claim 12.
`
`24 Exhibit 1001(u.s. Patent RE43,563 E), claim 13.
`
`25 Exhibit 1001(U.s. Patent RE43,563 E), claim 14.
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`PAGE 10
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`
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`U. S. Patent and Trademark Office, Before the Patent Trial and Appeal Board
`
`Target Corporation v. Destination Maternity Corporation
`
`Cases IPR2013-00530, —00531, -00532, -00533
`
`I understand that the Petitioner’s expert, Ms. Frances Harder, opined in her
`
`declaration submitted in these proceedings that each of the features of the
`
`dependent claims at issue were known in the prior art.26
`
`B.
`
`DMC and Secret Fit Belly Bottoms
`
`16-—
`
`g It also has two additional value price brands that
`
`are sold by outside retailers: Two Hearts (sold at Sears) and Oh Baby! (sold at
`
`26 Exhibit 1011 (Declaration of Frances Harder), 1] 19, 23—43.
`
`27 Exhibit 1094 (Deposition of Rebecca Piccone, Deposition Exhibit 107 at
`
`T
`
`DMC0098355).
`
`28 Exhibit 1094 (Deposition of Rebecca Piccone, Deposition Exhibit 107 at
`
`DMC0098355).
`
`_
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`PAGE 11
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`U. S. Patent and Trademark Office, Before the Patent Trial and Appeal Board
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`Target Corporation v. Destination Maternity Corporation
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`Cases lPR2013—00530, -00531, —00532, -00533
`
`Kow—
`
`17- _32 I
`
`understand that DMC represents that its Secret Fit Belly bottoms are covered by
`
`various claims of the patents—in-suit. DMC produced sales and gross profit
`
`information by brand and SKU for the period of 3Q 2008 through 2013 for Secret
`33
`
`Fit Belly and non—Secret Fit Belly bottoms.
`
`Exhibit 1113 provides a summary of
`
`units, sales, and gross profits by brand and by Secret Fit Belly and non-Secret Fit
`
`Beuv bottoms.—
`
`—4
`
`30 Exhibit 2042 (Destination Maternity Corporation Form 10-K for the year ended
`
`September 30, 2013), p. 3.
`
`31 Exhibit 1093 (Deposition of Rebecca Piccone), p. 123.
`
`32 Exhibit 1108 (DMC0053311).
`
`33 Exhibits 2056, 2058, 2060, 2062.
`
`34 See Exhibit 1113.
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`PAGE 12
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`U. S. Patent and Trademark Office, Before the Patent Trial and Appeal Board
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`Target Corporation v. Destination Maternity Corporation
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`Cases IPR2013—00530, -00531, -00532, -00533
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`
`
`18.
`
`35
`
`35
`
`ill
`
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`PAGE 13
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`U. S. Patent and Trademark Office, Before the Patent Trial and Appeal Board
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`Target Corporation v. Destination Maternity Corporation
`
`Cases IPR2013—00530, —00531, -00532, -00533
`
`C.
`
`Legal Framework
`
`19.
`
`I understand that patent claims may be challenged as anticipated by,
`
`or obvious in view of, prior art.
`
`It
`
`is my understanding that obviousness is a
`
`question of law based on underling factual inquiries.
`
`It also my understanding
`
`that these factual inquiries include (a) the scope and content of the prior art, (b)
`
`the differences between the claimed invention and the prior art, (c) the level of
`
`ordinary skill in the art, and (d) secondary considerations. And, I understand that
`
`obviousness, including any proffered secondary considerations, must be analyzed
`
`on a claim—by-claim basis. Further,
`
`I understand that secondary considerations
`
`are not relevant to the issue of anticipation and that courts have considered a
`
`number of
`
`factors when evaluating secondary considerations
`
`including
`
`commercial success. My declaration focuses on the issue of commercial success.
`
`20.
`
`In that regard, I understand that evidence of a product’s commercial
`
`success factors into the obviousness analysis only where there is a sufficient
`
`relationship, or nexus, between the merits of the claimed invention and 'the
`
`evidence in question. And, in this context, the term ”nexus” is used to designate
`
`a
`
`legally and factually sufficient connection between the evidence of the
`
`product’s commercial success and the merits of the claimed invention such that
`
`the evidence should be considered in opposing obviousness.
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`CONFIDENTIAL — PURSUANT TO PROTECTIVE ORDER
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`PAGE 14
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`U. S. Patent and Trademark Office, Before the Patent Trial and Appeal Board
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`Target Corporation v. Destination Maternity Corporation
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`Cases IPR2013—00530, -00531, —00532, -00533
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`21.
`
`It is my understanding that a prima facie case36 of nexus is generally
`
`made out if the patent owner shows that the commercially available product in
`
`question embodies the features of the claim(s)
`
`in question, and that those
`
`features are not just components or portions of the overall product.
`
`I further
`
`understand that, if the features of the claim(s) in question are just components or
`
`portions of the overall product, then the patent owner must make a prima facie
`
`showing of a sufficient relationship between the claimed features and the product
`
`in question; that is, the patent owner must show that the claimed features were
`
`responsible for the product’s commercial success.
`
`I understand that once the
`
`patent owner demonstrates a prima facie nexus, the burden to provide evidence
`
`to the contrary, as discussed in the next paragraph, shifts to the challenger.
`
`22.
`
`I understand that the requisite nexus does not exist—and, thus, a
`
`prima facie case of nexus may be rebutted—when alleged commercial success is
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`due to:
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`(a) a feature or features of a claim or claims other than the claim(s) in
`
`question—for example, a feature or features of an underlying independent claim
`
`as opposed to a feature or features attributable to an associated dependent claim
`
`whose obviousness is
`
`in question;
`
`(b) an unclaimed feature or unclaimed
`
`36 I understand that, in the context of secondary considerations, such as
`
`commercial success, the phrase ”prima facie case” or ”prima facie showing”
`
`may be used by courts to describe the patent owner’s burden of producing
`
`enough evidence to permit the trier of fact to infer the fact at issue.
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`CONFIDENTIAL - PURSUANT TO PROTECTIVE ORDER
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`PAGE 15
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`U. 5. Patent and Trademark Office, Before the Patent Trial and Appeal Board
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`Target Corporation v. Destination Maternity Corporation
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`Cases lPR2013—00530, 00531, —00532, —00533
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`features; (c) features known in the prior art; (d) extraneous factors such as, for
`
`example, advertising or marketing activities or superior workmanship; or (e) other
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`relevant economic and commercial factors unrelated to the merits of the claim(s)
`
`in question.
`
`VI. MR. GREEN FAILS TO ASSESS THE COMMERCIAL SUCCESS OF THE CLAIMS
`SUBJECT TO OBVIOUSNESS
`
`23.
`
`I understand that only certain dependent claims in this matter are
`
`subject to obviousness challenges by the Petitioner.
`
`I also understand that
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`independent claims in this matter, such as claim 1 of each of the patents-in-suit,
`
`are subject to anticipatory challenges, and as such, secondary considerations are
`
`not relevant. However, Mr. Green’s analyses fail
`
`to assess the commercial
`
`success of the Secret Fit Belly bottoms with respect to the dependent claims.
`
`Rather, his conclusions regarding the commercial success of the Secret Fit Belly
`
`products are drawn from reviewing the overall sales and profits of Secret Fit Belly
`
`bottoms in comparison to non—Secret Fit Belly bottoms sold across the various
`
`brands 0t we._
`
`_8 i ttdttttand that pt. stocksttttt oniy
`
`examined four separate Secret Fit Belly products to assess whether they practice
`
`37 Exhibit 1079 (Deposition of Philip Green), p. 56.
`
`38 Exhibit 1079 (Deposition of Philip Green), p. 57.
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`CONFIDENTIAL— PURSUANT TO PROTECTIVE ORDER
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`PAGE 16
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`U. S. Patent and Trademark Office, Before the Patent Trial and Appeal Board
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`Target Corporation v. Destination Maternity Corporation
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`Cases IPR2013-00530, -00531, -00532, —00533
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`claims of the patents-in-suit.39
`
`39 Exhibit 2017 (Declaration of David Brookstein,Sc.D.),1l 11.
`
`40
`
`41 Exhibit 1114.
`
`Manama.—
`
`43 Exhibit 1078 (Deposition of David Brookstein), pp. 44—45, 101—102; Exhibit 1079
`
`(Deposition of Philip Green), pp. 112—114.
`
`44 Exhibit 2076 (Declaration of David Brookstein, Sc.D., Exhibit 2); Exhibit 1078
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`(Deposition of David Brookstein), pp. 44—45, 101-102.
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`CON FlDENTIAL— PURSUANT TO PROTECTIVE ORDER
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`PAGE 17
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`U. 5. Patent and Trademark Office, Before the Patent Trial and Appeal Board
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`Target Corporation v. Destination Maternity Corporation
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`Cases IPR2013-00530, -00531, —00532, —00533
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`NPl|m
`
`45 Exhibit 1078 (Deposition of David Brookstein), p. 50.
`
`46 Exhibit 1079 (Deposition of Philip Green), pp. 61, 80-81.
`
`47 Exhibit 1079 (Deposition of Philip Green), pp. 56, 78—79.
`
`48 Exhibit 1079 (Deposition of Philip Green), pp. 70-71, 81-82.
`
`49 Exhibit 1079 (Deposition of Philip Green), pp. 72-74, 83.
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`CON FIDENTIAL— PURSUANT TO PROTECTIVE ORDER
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`PAGE 18
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`U. S. Patent and Trademark Office, Before the Patent Trial and Appeal Board
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`Target Corporation v. Destination Maternity Corporation
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`Cases IPR2013—00530, —00531, -00532, -00533
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`N
`
`N U'lIU1
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`50 Exhibit 1079 (Deposition of Philip Green), p. 87.
`
`51 Exhibit 1079 (Deposition of Philip Green), pp. 92-93.
`
`57- Exhibit 1079 (Deposition of Philip Green), pp. 51-52.
`
`53 Exhibit 1079 (Deposition of Philip Green), pp. 82—83.
`
`.54 Exhibit 1079 (Deposition of Philip Green), pp. 82-83.
`
`55 Exhibit 1079 (Deposition of Philip Green), pp. 88—89.
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`CONFIDENTIAL— PURSUANT TO PROTECTIVE ORDER
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`PAGE 19
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`U. S. Patent and Trademark Office, Before the Patent Trial and Appeal Board
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`Target Corporation v. Destination Maternity Corporation
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`Cases IPR2013—00530, —00531, —00532, —00533
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`26.
`
`27.
`
`As a. result, it is my opinion that Mr. Green’s analyses and opinions
`
`regarding commercial success are not relevant to the issue at hand.
`
`VII.
`
`ANALYSIS OF MR. GREEN’S OPINIONS REGARDING COMMERCIAL SUCCESS
`
`A.
`
`Overview
`
`28.
`
`Notwithstanding Mr. Green’s failure to address the commercial
`
`success as it relates to the dependent claims subject to obviousness challenges in
`
`this matter, Mr. Green’s conclusion that claimed features of the patents—in-suit
`
`56 Exhibit 2022 (Declaration of Philip Green Regarding Commercial Success), 1] 13-
`
`14, 16-17.
`
`57 Exhibit 2022 (Declaration of Philip Green Regarding Commercial SucceSS), ‘ll 24.
`
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`PAGE 20
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`U. 5. Patent and Trademark Office, Before the Patent Trial and Appeal Board
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`Target Corporation v. Destination Maternity Corporation
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`Cases lPR2013—00530, —00531, -00532, —00533
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`are responsible for the commercial success of the Secret Fit Belly bottoms is not
`
`supported by the analyses included in the Green Declaration; i.e., the analyses
`
`performed by Mr. Green fail to establish a prima facie showing that there is a
`
`nexus between the claims at issue and the commercial success of the Secret Fit
`
`Belly bottoms.
`
`In Part B
`
`below, I review and rebut Mr. Green’s analysis of the sales data produced by DMC
`
`for Secret Fit Belly and non-Secret Fit Belly bottoms and his statements regarding
`
`competitors in the maternity bottoms space.
`
`In summary,
`
`I find the evidence
`
`relied upon by Mr. Green insufficient to establish that the features of the claims
`
`at
`
`issue drove the commercial success of the Secret Fit Belly bottoms as
`
`compared to the non-Secret Fit Belly bottoms.
`
`29.
`
`58 Exhibit 2022 (Declaration of Philip Green Regarding Commercial Success), 11 9.
`
`CONFIDENTIAL — PURSUANT TO PROTECTIVE ORDER
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`PAGE 21
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`U. 5. Patent and Trademark Office, Before the Patent Trial and Appeal Board
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`Target Corporation v. Destination Maternity Corporation
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`Cases IPR2013—00530, -00531, —00532, —00533
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`_ In Part C below,
`
`I review and rebut Mr. Green’s conclusions that
`
`there are no other factors beyond the patented technology that contributed to
`
`the commercial success of the Secret Fit Belly bottoms.
`
`In summary, I find that
`
`Mr. Green failed to establish that the patented technology is responsible for the
`
`commercial success of the Secret Fit Belly bottoms.
`
`B.
`
`Mr. Green’s Basis For Commercial Success 0 inion is Deficient
`
`30.
`
`_62 Based on my review of the data that Mr. Green relied
`
`upon, it appears that he accurately reports the sales and gross profits generated
`
`by Secret Fit Belly bottoms for DMC over the period of 3Q 2008 through 4Q 2013,
`
`59 Exhibit 2022 (Declaration of Philip Green Regarding Commercial Success), 1] 31.
`
`60 Exhibit 2022 (Declaration of Philip Green Regarding Commercial Success), 1] 33—
`
`34.
`
`61 Exhibit 2022 (Declaration of Philip Green Regarding Commercial Success), 1] 35.
`
`62 Exhibit 2022 (Declaration of Philip Green Regarding Commercial SUCCESS), 1] 37.
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`CONFIDENTIAL— PURSUANT TO PROTECTIVE ORDER
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`PAGE 22
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`U. 5. Patent and Trademark Office, Before the Patent Trial and Appeal Board
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`Target Corporation v. Destination Maternity Corporation
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`Cases IPR2013-00530, -00531, —00532, —00533
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`but Mr. Green’s other analyses related to establishing commercial success are
`
`deficient in supporting his conclusions.
`
`31.
`
`65
`
`As discussed in greater detail below, Mr. Green fails
`
`to
`
`demonstrate that there are not other factors that could be influencing the sales of
`
`Secret Fit Belly bottoms,
`
`such as differences
`
`instyles,
`
`colors,
`
`in-stock
`
`availabilities, sales and marketing efforts, promotions or incentives,
`
`in-store
`
`placements, quality of materials, and a myriad of other items unrelated to the
`
`claims at
`
`issue,
`
`that could explain why the Secret Fit Belly bottoms are
`
`outperforming the non—Secret Fit Belly bottoms.
`
`63 Exhibit 2022 (Declaration of Philip Green Regarding Commercial SUCCESS), 11 32.
`
`64 Exhibit 2022 (Declaration of Philip Green Regarding Commercial SUCCESS), ll 33.
`
`65 Exhibit 2022 (Declaration of Philip Green Regarding Commercial Success), ‘ll 34.
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`CON FlDENTlAL— PURSUANT TO PROTECTIVE ORDER
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`PAGE 23
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`
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`U. 5. Patent and Trademark Office, Before the Patent Trial and Appeal Board
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`Target Corporation v. Destination Maternity Corporation
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`Cases lPR2013—00530, -00531, -00532, 00533
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`U) N
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`66 Exhibit 2022 (Declaration of Philip Green Regarding Commercial SucceSS), ll 35—
`
`36.
`
`67 Exhibit 2022 (Declaration of Philip Green Regarding Commercial SucceSS), ll 35.
`
`68 Exhibit 2022 (Declaration of Philip Green Regarding Commercial SucceSS), 11 35.
`
`69 Exhibit 2022 (Declaration of Philip Green Regarding Commercial SucceSS), ll 36.
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`CONFIDENTIAL— PURSUANT TO PROTECTIVE ORDER
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`PAGE 24
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`
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`U. S. Patent and Trademark Office, Before the Patent Trial and Appeal Board
`
`Target Corporation v. Destination Maternity Corporation
`
`Cases IPR2013-00530, 00531, -00532, -00533
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`00 00
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`
`
`7° Exhibits 2056, 2058, 2060, 2062.
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`CONFIDENTIAL— PURSUANT TO PROTECTIVE ORDER
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`PAGE 25
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`
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`U. S. Patent and Trademark Office, Before the Patent Trial and Appeal Board
`
`Target Corporation v. Destination Maternity Corporation
`
`Cases IPR2013-00530, -00531, -00532, —00533
`
`|lUL)
`
`U.) .U‘
`
`\i
`
`72 Exhibit 1093 (Deposition of Rebecca Piccone), p. 123.
`
`73 Exhibit 1079 (Deposition of Philip Green), pp. 270-271.
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`CON FIDENTIAL— PURSUANT TO PROTECTIVE ORDER
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`PAGE 26
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`U. 5. Patent and Trademark Office, Before the Patent Trial and Appeal Board
`Target Corporation v. Destination Maternity Corporation
`
`Cases IPR2013—00530, —00531, 00532, -00533
`
`tllll
`
`74 Exhibit 1079 (Deposition of Philip Green), pp. 271-272.
`
`75 Exhibit 2022 (Declaration of Philip Green Regarding Commercial Success), 1) 36.
`
`76 Exhibit 2022 (Declaration of Philip Green Regarding Commercial Success), 1) 37.
`
`77 Exhibit 2022 (Declaration of Philip Green Regarding Commercial Success), 1] 37.
`
`78 Exhibit 1079 (Deposition of Philip Green), pp. 287-289.
`
`79 Exhibit 1079 (Deposition of Philip Green), pp. 296—297.
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`CONFlDENTIAL— PURSUAN
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