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`Paper No. _____
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`Filed on behalf of: Telefonaktiebolaget L. M. Ericsson
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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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`BROADCOM CORPORATION
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`Petitioner
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`v.
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`TELEFONAKTIEBOLAGET L.M. ERICSSON
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`Patent Owner
`____________________
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`Case IPR2013-00601
`U.S. Patent Nos. 6,772,215
`____________________
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`PATENT OWNER’S MOTION FOR ADDITIONAL DISCOVERY UNDER 37
`C.F.R. § 42.51(b)
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`IPR2013-00601
`Patent 6,772,215
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`Patent Owner Ericsson (“Ericsson”) respectfully submits this motion to take
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`additional discovery of Petitioner Broadcom, Inc. (“Broadcom”). Ericsson submits
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`seven narrowly tailored Requests for Production relevant to whether Broadcom’s
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`petitions are barred under 35 U.S.C. §315(b). (Ex. 2001).
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`These Petitions for IPR were filed shortly after Ericsson obtained a judgment
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`for infringement of the subject patents against several of Broadcom’s customers in
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`Ericsson v. D-Link, el al (“D-Link Lawsuit”). (Exs. 2002, 2003, 2004). Broadcom
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`clearly had a substantial interest in that case because its “BCM4313 and BCM4321”
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`chips formed the basis for some of the infringement allegations, (Petition at 2), and as
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`Broadcom admits in its SEC filings, it is not uncommon for Broadcom to be
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`“required to indemnify some customers and strategic partners under our agreements if
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`a third party alleges or if a court finds that our products or activities have infringed
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`upon, misappropriated or misused another party’s proprietary rights.” (Ex. 2005 at
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`46). To protect these interests, Broadcom “engage[s] in litigation to . . . determine the
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`validity and scope of the proprietary rights of others, including [its] customers.” Id.
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`These IPRs are one example of Broadcom filing litigation on behalf of its customers
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`pursuant to its indemnity obligations.1
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`For years, Broadcom has been working behind the scenes to help defeat
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`Ericsson’s infringement claims against its customers. Indeed, as far back as July
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`2010, Broadcom assisted Acer, Inc., a D-Link Lawsuit defendant, (Ex. 2002), in
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`analyzing the very patents that are now the subject of Broadcom’s petitions. When
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`1
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` Another chip supplier, Intel, actually intervened in the case, stating it had a direct
`and substantial interest because of its indemnity agreements. (Ex. 2006 at 3).
`1
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`IPR2013-00601
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`discussing an upcoming meeting, Acer noted, “Main purpose is to discuss comments
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`from Acer’s vendors, including Intel, Broadcom and Atheros.” (Ex. 2007). More
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`recently, Ericsson provided notice to Acer that it was seeking relief from the
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`Protective Order in the D-Link Lawsuit to obtain the requested information by all
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`other means. (Ex. 2008). In response, Acer admitted that such information was
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`“privileged and [was] inadvertently produced.” Id. This admission proves that a
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`privilege exists that protects communications between Acer and Broadcom.
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`When its covert efforts failed to limit its indemnity obligations, Broadcom
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`became more aggressive. On July 16, 2012, fourteen months before the filing of its
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`petitions, Broadcom filed a Complaint in the European Commission, arguing that
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`Ericsson’s assertion of its patents against Broadcom’s customers was anticompetitive.
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`(Exs. 2009, 2010) (“E.C. Complaint”). In its E.C. Complaint, Broadcom specifically
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`references the D-Link Lawsuit, (Ex. 2009 at ¶ 9 and n. 6), and makes clear that it is
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`acting as the defendants’ proxy – “Ericsson’s efforts to hold-up Broadcom’s
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`customers are tantamount to holding up Broadcom itself . . .”, (Id. ¶¶ 9, 101).
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`Broadcom now attacks Ericsson by petitioning for review of the same claims
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`found to have been infringed by Broadcom’s customers’ use of its chips. Broadcom
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`admits that it supplied the “Wi-Fi compliant products, such as the BCM4313 and
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`BCM4321” to the defendants that were found to infringe. (Petition at 2). As
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`Broadcom is now forced to indemnify its customers for damages and an ongoing
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`activity, the timing and coordination of Broadcom’s attacks is no coincidence. To be
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`sure, Broadcom’s petitions rely heavily on” (1) Ericsson’s expert report on validity
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`from the D-Link Lawsuit, a report that Broadcom could only have received from one
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`2
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`of the defendants, (Pet. Ex. 1010); and (2) a majority of the same references that the
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`defendants relied upon for their invalidity claims in the D-Link Lawsuit. This level of
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`coordination raises serious questions about whether Broadcom is in privity with the
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`defendants and is likewise time barred from filing these petitions by §315(b).
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`Because the certain facts as to Broadcom’s standing are not publicly available
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`and because Ericsson has exhausted all efforts to obtain them voluntarily, Ericsson
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`submits this Motion. The requests are useful and relevant to Broadcom’s standing,
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`which the PTO has expressly identified as a basis for obtaining discovery. Ericsson
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`worked diligently to obtain this evidence, and Broadcom faces no undue burden in
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`responding. As such, Ericsson meets the interests of justice standard.
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`I.
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`The Discovery Request Is Relevant to Broadcom’s Standing.
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`If Broadcom is a privy to any of the D-Link Defendants, it is barred from
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`obtaining inter partes review under 35 U.S.C. § 315(b) because Ericsson served the
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`“D-Link Defendants”2 more than one year before these petitions were filed. (Ex.
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`2004). The discovery sought goes directly to Section 315(b)’s application.
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`The PTO specifically identified standing as an issue that warrants additional
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`discovery. See 77 Fed. Reg. 48680, 48689 (Aug. 14, 2012) (“additional discovery
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`may be authorized where patent owner raises sufficient concerns regarding the
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`petitioner’s certification of standing.”). The PTO also allows the Board to “permit
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`new testimonial evidence where it addresses issues relating to the petitioner’s
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`2
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` The “D-Link Defendants” include, collectively, D-Link Corp., D-Link Systems, Inc.,
`Netgear, Inc., Acer Inc.(“Acer”), Acer America Corp. and Gateway Inc., Dell, Inc.,
`Toshiba Corp., Toshiba America, Inc., Toshiba America Information Systems, Inc.,
`Toshiba America Consumer Products, LLC, and Belkin International, Inc. (Exs. B, C)
`3
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`standing, or where . . . the evidence demonstrates that the trial may not be instituted.”
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`Trial Practice Guide, 77 Fed. Reg. 48756, 48764 (Aug. 14, 2012) (“TPG”). Thus,
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`the PTO clearly intends to allow additional discovery for standing issues, like § 315.
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`Under § 315(b), IPR should be denied because Broadcom is in privity with at
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`least one D-Link Defendant. The term “privity” describes a relationship between a
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`litigant and a nonparty that is characterized by a “mutuality of interest,” Black’s Law
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`Dictionary, 5th Ed. (1979), sufficient to justify applying principles of claim or issue
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`preclusion to the nonparty, TPG at 48759. The PTO expanded the doctrine by noting
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`its equitable and practical nature and stating it “should extend to parties to
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`transactions and other activities relating to the property in question.” TPG at 48759
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`(quoting 157 Cong. Rec. S1376 (dialed ed. Mar. 8, 2011) (statement of Sen. Kyl)).
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`Under this expanded doctrine,3 the Board must “evaluate what parties
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`constitute ‘privies’ in a manner consistent with the flexible and equitable
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`considerations established under federal caselaw.” TPG at 48759. For example, the
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`TPG cites Taylor v. Sturgell, 553 U.S. 880, 893-95 (2008), as support for its
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`interpretation. Id. In doing so, the Board must determine if the parties’ relationship is
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`“sufficiently close such that both should be bound by the trial outcome and related
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`estoppels.” Id.; see 154 Cong. Rec. S9987 (Sept. 27, 2008) (statement of Sen. Kyl).
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`“A common consideration is whether the non-party exercised or could have exercised
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`control over a party’s participation in a proceeding.” Id.
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`3
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` Section 315(b) under the AIA also expanded on former 35 U.S.C. § 317(b) by
`precluding real parties in interest in addition to privies. See former 35 U.S.C. §
`317(b) (1999), amended by 35 U.S.C. § 317, Pub. L. No. 112-29, § 6(a), 125 Stat.
`303 (2011).
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`4
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`Also, the Supreme Court set forth six categories for determining whether a
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`nonparty to a suit is bound by its judgment in Taylor, and the PTO expressly
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`validated them as guidelines for determining privity. See TPG at 48759. One category
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`asks whether the nonparty maintains a “substantive legal relationship” with a party in
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`suit. 553 U.S. at 894. This theory “originated ‘as much from the needs of property
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`law as from the values of preclusion by judgment.’” Id. (citations omitted).
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`Indemnity relationships satisfy Taylor’s reasoning;4 numerous federal courts
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`agree and state that indemnity relationships justify third party preclusion. See, F.T.C.
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`v. Garvey, 383 F.3d 891, 898 (9th Cir. 2004) (“To deny the right of indemnification
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`would be to destroy the indemnitee’s right by the result of an action . . . It is far better
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`to preclude the third person . . . who often could have joined both adversaries in the
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`first action.”); SCAC Transp. (USA) Inc. v. S.S. Danaos, 845 F.2d 1157, 1162 (2d Cir.
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`1988) (indemnitor is precluded from disputing issues determined in the indemnitee’s
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`judgment); Jennings v. U.S., 374 F.2d 983, 985 (4th Cir. 1967) (“where an indemnitor
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`is notified and can take part in – indeed may control – the litigation, he is precluded
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`from contesting the indemnitee’s liability in the subsequent indemnity action.”).
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`Taylor relies on the Restatement (second) of Judgments, 553 at 893 n. 6, which
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`acknowledges that indemnity relationships justify privity preclusion. If an indemnitor
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`has received “reasonable notice of the action” but declines to participate in the
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`4 Broadcom relies on Apple, Inc. v. Achates Ref. Publ’g, Inc., IPR2013-00080, Paper
`No. 18 (2013). However, Achates relied solely on an unsigned, public agreement with
`no evidence of concerted action. Here, evidence of Broadcom’s past influence in
`negotiations, litigation history, corporate filings, contemporaneous attacks, and an
`indemnity agreement are evidence of control and a substantive legal relationship.
`5
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`defense, absent a conflict of interest, it is “estopped from disputing the existence and
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`extent of the indemnitee’s liability” or “relitigating issues determined in the action” if
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`the indemnitee reasonably defended the action. Restatement (Second) of Judgments
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`§ 57(1) (1982). The weight of authority strongly supports that an indemnity
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`agreement constitutes a substantive legal relationship sufficient to establish privity.
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`Here, evidence will prove that Broadcom has had the opportunity to control
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`and maintains a substantive legal relationship with the D-Link Defendants sufficient
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`to bind Broadcom to the District Court’s judgment. Broadcom’s corporate policy on
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`litigation on behalf of its customers, its influence in Acer’s discussions with Ericsson,
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`and its collateral attacks on the Ericsson patents in the E.C. and the PTO
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`contemporaneously with the D-Link Lawsuit demonstrate the nature of their
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`relationship and actions thereon. Each of these attacks is based on the same
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`BCM4313 and BCM4321 chips and the same patent claims. Rather than intervene in
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`the D-Link Lawsuit like Intel, Broadcom launched collateral attacks in various
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`venues. Broadcom has yet to deny the existence of these contracts – further
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`supporting this collusive attempt to undermine the award.
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`II. Discovery Request Should Be Granted in the Interest of Justice
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`The Board may grant additional discovery when it is “necessary in the interest
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`of justice.” See 37 C.F.R. § 42.51(b)(2). Five factors control this standard. See
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`Garmin Int’l, Inc. v. Cuozzo Speed Tech., LLC, IPR2012-00001, Notice 20 (2013).
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`Given the length restrictions, Ericsson will concentrate on two factors, as the
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`remaining factors can be proven by the Requests on their face.5
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`5 Ericsson is not seeking Broadcom’s litigation position, and the Requests’
`instructions are clear and concise. Further, each of Ericsson’s requests is sensible and
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`A. Useful information will be uncovered with additional discovery.
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`Ericsson is already “in possession of a threshold amount of evidence or
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`reasoning tending to show beyond speculation that something useful will be
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`uncovered.” Garmin, supra, at 7. “‘Useful’ means favorable in substantive value to a
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`contention of the party moving for discovery.” Id. Ericsson has come forward with
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`considerable direct and circumstantial evidence that Broadcom colluded with the
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`Defendants because of its indemnity obligations. (Exs. 2005, 2007, 2008, 2009,
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`2016). Ericsson has further evidence of the existence of the nature of this relationship
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`but cannot submit this evidence because of confidentiality provisions that Broadcom
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`and others refuse to waive. (Ex. 2012). Broadcom does not deny the existence of
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`such indemnity agreements. Id. If produced, these contracts will be useful to reveal
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`the full scope of these substantive legal relationships and Broadcom’s participation in
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`the D-Link Lawsuit so that the Board can sufficiently rule on Broadcom’s standing.
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`B. Equivalent information is not obtainable by any other means.
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`Ericsson has actively pursued discovery from Broadcom and the defendants.
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`First, Ericsson made limited requests from Broadcom related to the contractual
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`relationships. (Ex. 2011). Broadcom did not, and still does not, deny the existence of
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`the contracts, but instead relies on their confidentiality to avoid a 315(b) analysis.
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`(Ex. 2012). Second, Ericsson asked the defendants to permit its IPR counsel to review
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`any contracts relating to the “BCM4312 and BCM4321” chips without being subject
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`reasonably tailored to its genuine need to determine the relationship between
`Broadcom and the D-Link Defendants. Finally, the requests will not require a
`significant expenditure of human or financial resources, as they primarily relate to
`specific contracts and communications. Garmin supra, at 6-7.
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`to the “Prosecution Bar” in the Protective Order. (Ex. 2011). Broadcom’s customers
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`refused to waive that provision without Broadcom’s consent. (Ex. 2013, 2014). Once
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`again, Broadcom stonewalled Ericsson by hiding behind the protective order. 6
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`Here, the parties to the relevant contracts and communications possess this
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`evidence and it is amenable to concealment because all actions by the parties are
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`taken behind closed doors, apparently locked by Confidentiality Agreements.
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`Considering the nature and effect of this information, Ericsson has made all possible
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`attempts to obtain it by other means. Garmin, supra, at 6. Thus, Ericsson has
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`satisfied each factor; its limited requests should be granted in the interests of justice.
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`C. Conclusion
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`If the Board denies Ericsson’s request, it is difficult to conceive of a case in
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`which discovery into standing will be permitted, despite the TPG’s indication to the
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`contrary. Patent owners will rarely if ever be in possession of indemnity agreements
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`and, if they are, they will be unable to rely upon them because of a protection order.
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`This will promote collusion among parties and thereby undermine the policy behind
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`§315(b) that encourages litigates to bring their validity challenges to the Board in a
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`timely manner. Without an order from the Board, this evidence will seldom be
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`obtainable by any patent owner. Thus, as the PTO has declared, patent owners require
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`the use of additional discovery; otherwise, § 315(b) will essentially be eviscerated.
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`6 Ericsson has concurrently filed an Emergency Motion for Relief from the Protective
`Order in the district court. (See Ex. 2015). To the extent the Board is inclined to deny
`Ericsson’s motion as “speculative” in the absence of the underlying indemnity
`agreements, despite the circumstantial evidence, Ericsson requests that the Board
`hold the present motion in abeyance until the district rules on Ericsson’ motion.
`8
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`Dated: December 11, 2013.
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`IPR2013-00601
`Patent 6,772,215
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`/Peter J. Ayers/
`PETER AYERS
`Lee & Hayes, PLLC
`13809 Research Blvd., Suite 405
`Austin, TX 78750
`Telephone: 512.505.8162
`Fax: 509.944.4693
`Attorney for Patent Owner Telefinakteibolaget
`LM Ericsson
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`CERTIFICATE OF SERVICE
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`IPR2013-00601
`Patent 6,772,215
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`The undersigned certifies that on December 11, 2013 the foregoing PATENT
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`OWNER’S MOTION FOR ADDITIONAL DISCOVERY UNDER 37 C.F.R. §
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`42.51(b) was served on Lead and Back-up Counsel for Broadcom Corporation by
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`sending the same via Federal Express to the service address provided in Broadcom’s
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`Mandatory Notices:
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`Dominic E. Massa, Lead Counsel
`Michael A. Diener, Back-up Counsel
`Wilmer Cutler Pickering Hale and Dorr, LLP
`60 State Street
`Boston, MA 02109
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`LEE & HAYES PLLC
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` /Peter J. Ayers/
`Peter J. Ayers, Reg. No. 38,374
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