`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`RPX CORPORATION
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`Petitioner
`
`V.
`
`MACROSOLVE, INC.
`Patent Owner
`
`Case IPR2014-00140
`
`Patent 7,822,816
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`PATENT OWNER’S PRELIMINARY RESPONSE TO PETITION FOR INTER PAR TES
`
`REVIEW OF US. PATENT NO. 7,822,816
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`
`
`PATENT OWNER’S PRELIMINARY RESPONSE TO PETITION FOR INTER PARTES
`
`REVIEW OF U.S. PATENT NO. 7,822,816
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`I.
`
`Introduction
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`Macrosolve, Inc. ("Patent Owner", hereinafter), the owner of the entire interest in U.S.
`
`Patent No. 7,822,816 (the "'816 Patent" hereinafter, Ex. 1) hereby tenders its Preliminary
`
`Response to a “Petition for Inter Fortes Review of U.S. Patent NO. 7,822,816” (Case PR20 14-
`
`00 140,
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`the “Petition”, hereinafter) which was filed by RPX Corporation (hereinafter,
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`“Requestor” or “Petitioner”) and mailed on or about November 11, 2013. As is explained in
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`detail below, the “816 patent is currently being enforced in the Eastern District of Texas.
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`It is
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`believed that one or more parties that would be prohibited by statute from instituting the instant
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`Inter Partes Review (“IPR”) if it were brought in their own names are operating through RPX to
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`circumvent
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`the statute. As such,
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`the instant Petition should be dismissed or stayed until
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`discovery can be obtained from RPX with respect to the real party or parties in interest in this
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`case. Further, in the alternative, Patent Owner demonstrates below that there is no reasonable
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`likelihood that Petitioner would prevail in establishing anticipation or obviousness of any of the
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`challenged claims.
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`II.
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`Background of the Case
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`Litigation Involving the Subject Patent
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`The Patent Owner is currently enforcing its patent in the U.S. District Court for the
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`Eastern District of Texas. The lead case is Macrosolve, Inc, vs. Antenna Software, Inc, et al,
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`NO. 6:11-cv-287 MHS—KNM. Additionally, the following cases are currently pending:
`
`MacroSolve, Inc. v. Carlson Hotels, Inc. (6-13-cv—00666, 9/ 12/2013); MacroSolve, Inc. v. Five
`
`
`
`Guys Enterprises, LLC (6-13—cv—0067l, 9/ 12/2013);MacroSolve, Inc. v. Meetup, Inc. (6-13-cv~
`
`00674,9/12/2013); MacroSolve, Inc. v. Chipotle Mexican Grill, Inc. (6—13-cv—00667,9/ 12/2013);
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`MacroSolve, Inc. v. Discover Financial Services, Inc. (6-13—CV—00669, 9/12/2013); MacroSolve,
`
`Inc. v. Home Box Office, Inc. (6-13-CV~00672, 9/12/2013); MacroSolve, Inc. v. Box, Inc. (6—13-
`
`CV~00665, 9/12/2013); MacroSolve, Inc. v. Dropbox, Inc. (6—l3~cv- 00670,9/12/2013);
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`MacroSolve, Inc. v. MediaFire, LLC (6~l3-cv—00673, 9/12/2013); MacroSolve, Inc. v. GEICO
`
`Insurance Agency, Inc. (6-12-cv—00074,2/ 17/2012); MacroSolve, Inc. v. newegg (6-12—cv—
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`00046,1/30/2012); MacroSolve, Inc. v. American Airlines, Inc. (6—1 l~ CV—00685,l2/21/2011);
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`MacroSolve, Inc. v. Antenna Software, Inc. (6-1 l-cv-00287,6/6/201 l).
`
`The following cases have been litigated and have all been dismissed for one reason or
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`another21’l/IacroSolve, Inc. v. Comcast Corp. (6-13-CV—00668, 9/12/2013); MacroSolve, Inc. v.
`
`Wyndham Hotel Group, LLC (6—13—cv-00675, 9/12/2013); MacroSolve, Inc. v. RueLaLa, Inc. (6~
`
`l3-cv-00206,2/26/2013); MacroSolve, Inc. v. Nora/strain, Inc. (6—l3—cv—00204,2/26/2013);
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`MacroSolve, Inc. v. Pandora Media, Inc. (6-l3~cv-00205,2/26/2013); MacroSolve, Inc. v.
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`Staples, Inc. (6-13-CV~00207, 2/26/2013); MacroSolve, Inc. v. The Kroger Co. (6-13—cv-00203,
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`2/25/2013); MacroSolve, Inc. v. Gilt Groupe Holdings, Inc. (6-13-0V—00201,2/25/2013);
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`MacroSolve, Inc. v. GameStop Corp. (6—13-CV—00200, 2/25/2013); MacroSolve, Inc. v. Kohl’s
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`Department Stores, Inc. (6-13—cv—00202, 2/25/2013); MacroSolve, Inc. v. Fandango, Inc. (6-13—
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`cv—00199,2/25/2013); MacroSolve, Inc. v. Costco Wholesale Corp. (6-13—CV—00198,2/25/2013);
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`MacroSolve, Inc. v. Super Shuttle International Corp. (6-12—cv-00978, 12/21/2012); MacroSolve,
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`Inc. v. Walgreen Co. (6-12—cv—00975,l2/21/2012); MacroSolve, Inc. v. Home Depot USA, Inc.
`
`(6-12—cv-00976, 12/21/2012); MacroSolve, Inc. v. CVS Pharmacy, Inc. (6—12—cv-
`
`00980,12/21/2012); MacroSolve, Inc. v. Sig/mall, Inc. (6-12—CV-00977, 12/21/2012); MacroSolve,
`
`
`
`Inc. v. Dollar Thrifly Automotive Group, Inc. (6-12-cv-00979,12/21/2012); MacroSolve, Inc. v
`
`.Sears Holdings Management Corp. (6-12-CV-00916, 12/4/2012); MacroSolve, Inc. v. Bed Bath &
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`Beyond, Inc. (6-12-cv~00915, 12/4/2012); MacroSolve, Inc. v. Starwood Hotels& Resorts
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`Worldwide, Inc. (6~12- CV—00917,12/4/2012); MacroSolve, Inc. v. Redbox Automated Retail, LLC
`
`(6~12-cv—00744,10/5/2012); MacroSolve, Inc. v. American Express Co. (6—12-cv—00743,
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`10/5/2012); MacroSolve, Inc. v. Fareportal, Inc. (6-12—CV—00416,6/26/2012);MacroSolve, Inc. v.
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`Target Corp. (6—12—cv—0041 8, 6/26/2012); MacroSolve, Inc. v. LQ Management LLC (6—12-cv—
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`00417,6/26/2012); MacroSo/ve, Inc. v. Kayak Software Corp. (6—12-cv-00388, 6/19/2012);
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`MacroSolve, Inc. v. Cumulus Media, Inc. (6-12—cv-00389,6/ 19/2012); MacroSolve, Inc. v. Jet
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`Blue Airways Corp. (6-12- cv~00387, 6/19/2012); MacroSolve, Inc. v. JP Morgan Chase & C0.
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`(6-12—cv-00384,6/ 18/2012); MacroSolve, Inc. v. LinkedIn Corp. (6-12-cv—00385, 6/18/2012);
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`MacroSolve, Inc. v. MovieTickets.com, Inc. (6—12-cv—00194, 3/23/2012); MacroSolve, Inc. v.
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`Bank ofArnerica Corp. (6—12-cv-00193, 3/23/2012); MacroSolve, Inc. v. AOL Inc. (6—12—CV-
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`00091,2/27/2012); MacroSolve, Inc. v. Inter-Continental Hotels Corp. (6—12-CV—00092,
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`2/27/2012); MacroSolve, Inc. v .Marriott' International, Inc. (6-12-CV-00076,2/ 17/2012);
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`MacroSolve, Inc. v. Wal—Mart Stores, Inc. (6-12—cv-00047, 1/30/2012); MacroSolve, Inc. v.
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`Facebook, Inc. (6—12-cv—00044,1/30/2012);MacroSolve, Inc. v. Hyatt Corp. (6-12-cv—00045,
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`1/30/2012); MacroSolve, Inc. v. YELP! INC. (6-12—cv-00048, 1/30/2012); MacroSolve, Inc. v.
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`Hotels. com, LP. (6-11—cv-00690, 12/21/2011); MacroSo/ve, Inc. v. Priceline. com Inc. (6-11-CV—
`
`00691, 12/21/2011);MacroSolve, Inc. v. Hipmunk, Inc. (6-11-cv-00689; 12/21/2011);
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`MacroSolve, Inc. v. United Air Lines, Inc. (6-11-cv—00694, 12/21/2011); MacroSolve,‘Inc. v.
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`Continental Airlines, Inc. (6-11-cv—00687,12/21/2011);MacroSolve, Inc. v. Avis Rent A Car
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`System, LLC (6~1 1~cv-00686,12/21/2011);MacroSolve, Inc. v. Travelocity. com LP (6—11-cv-
`
`
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`00693, 12/21/2011); MacroSolve, Inc. v. SouthwestAir/incs Co. (6-11—cv-00692, 12/21/2011);
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`MacroSo/ve, Inc. v. The Hertz Corp. (6-11-cv-00688, 12/21/2011); MacroSolve, Inc. v. Whoop,
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`Inc, (6-11-0V—00523, 10/3/2011); MacroSo/ve, Inc. v. AT&TInc. (6-11—cv-00490, 9/15/2011);
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`MacroSolve, Inc. v. Canvas Solutions, Inc. (6—11-cv-00194,4/18/2011);and MacroSolve, Inc. v.
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`Brazos Technology Corp. (6—11—cv-00101,3/4/201 1).
`
`Ex Parte Reexamination
`
`The ’8 16 Patent is also the subject of Ex Parte Reexamination No. 90/012,829 filed April
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`3, 2013 by GEICO (“Reexamination”). A non-final Office action rejecting all claims was mailed
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`in the reexamination on September 13, 2013. A response was filed by Patent Owner on or about
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`November 13, 2013.
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`Pending Patent Application
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`A continuation application of the instant patent is currently pending in the US. Patent
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`Office, to wit, App. No. 12/910,706. Currently, all claims in this application stand as rejected.
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`A final rejection was mailed to Patent Owner/Applicant on or about April 9, 2013. A notice of
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`appeal was filed on October 9, 2013.
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`III.
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`Summary of Arguments and Action Requested
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`The instant [PR should be dismissed pending receipt of discovery in the Eastern District
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`of Texas, which discovery is intended to determine the real parties of interest associated with the
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`filing of the instant Petition. The ‘816 patent has been in litigation with numerous parties for
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`over one year and there is concern that one or more of the parties in that litigation are using the
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`Requestor as a surrogate to bring an IPR that they would be prohibited by statute (35 U.S.C. §
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`
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`315(b)) from bringing on their own behalf Discovery aimed at uncovering the membership of
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`the Requestor has been served (and resisted, Ex. 2) in the Texas litigation. This IPR should be
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`’ dismissed for failure to identify the real party or parties in interest.
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`In the alternative, the instant IPR should be stayed until discovery is obtained from the
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`Requester with regards to the real party of parties in interest.
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`In the further alternative,
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`if a stay is not granted,
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`it
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`is believed that flaws in the
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`Requestor’s expert’s declaration and conclusions in the Petition that rely on those arguments are
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`sufficient to call into question the validity of the request and, thus, the Requestor has failed to
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`demonstrate a reasonable likelihood that at least one claim is unpatentable.
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`In the further alternative that the flaws in the Requestor’s analysis are ignored,
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`it is
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`believed that none of the art of record, alone or in combination, reasonably renders any claim of
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`the ‘816 patent as unpatentable.
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`IV.
`
`Patent Owner challenges Petitioner’s identification of the real parties-in—interest
`and submits that this IPR should be dismissed for failure to identify the real parties-
`in-interest, or, in the alternative, stayed until the real parties-in-interest can be
`determined via discovery.
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`As required by 37 C.F.R. § 42.8(b)(l), Petitioner must file with the Board an
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`identification of “each real party—iminterest” for the petition. Patent Owner submits that this
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`requirement is significant because final written decisions in lPRs act to estop the real parties-in-
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`interest, as well as the privies of the Petitioner, from asserting claims the petitioner raised or
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`reasonably could have raised during that inter partes review. With regard to proceedings before
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`the Office, 35 U.S.C. § 315 (e)(l) provides: “The petitioner in an inter partes review of a claim
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`in a patent under this chapter that results in a final written decision under section 318(a), or the
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`real party in interest or privy of the petitioner, may not request or maintain a proceeding before
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`
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`the Office with respect to that claim on any ground that the petitioner raised or reasonably could
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`have raised during that inter partes review”; see also 37 CPR. § 42.73(d).
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`With regard to civil actions and other proceedings, 35 U.S.C. § 315(c)(2) provides: “The
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`petitioner in an inter partes review of a claim in a patent under this chapter that results in a final
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`written decision under section 318(a), or the real party in interest or privy of the petitioner, may
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`not assert either in a civil action arising in whole or in part under section 1338 of title 28 or in a
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`proceeding before the International Trade Commission under section 337 of the Tariff Act of
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`1930 that the claim is invalid on any ground that the petitioner raised or reasonably could have
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`raised during that inter partes review.” Thus, the real parties—in-interest in the present IPR
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`would be estopped from asserting that the claims of the ‘816 Patent are invalid, with respect to
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`the claims raised, or which reasonably could have been raised in the present IPR, both in
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`proceedings before the USPTO and in civil actions.
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`Moreover, and particularly significant to the present IPR, a trial cannot be initiated if the
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`Petitioner cannot comply with the statutory time limits imposed by 35 U.S.C. § 315(b) and 37
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`C.F.R. § 42.101(b). Title 35 U.S.C. § 315(b) requires that “[a]n interpartes review may not be
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`instituted if the petition requesting the proceeding is filed more than 1 year after the date on
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`which the petitioner, real party-in-interest. or privy of the petitioner is served with a complaint
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`alleging infringement of the patent.” (Emphasis added)
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`“The core functions of the “‘real party-in-interest’” and “‘privies’”
`requirement [are] to assist members of the Board in identifying
`potential conflicts, and to assure proper application of the statutory
`estoppel provisions. The statutory estoppels provisions seek to
`protect patent owners from harassment via successive petitions by
`the same or related parties,
`to prevent parties from having a
`539
`“‘second bite at the apple,
`and to protect the integrity of both the
`USPTO and Federal Courts by assuring that all issues are promptly
`raised and vetted.” Office Patent Trial Practice Guide, 77 Fed.
`Reg. 48759.
`
`
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`Petitioner RPX, headquartered in San Francisco, CA, identifies itself on its web site, as
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`“the leading provider of patent risk solutions, offering defensive buying, acquisition syndication,
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`patent intelligence, insurance services, and advisory services.” (Ex. 3) Petitioner’s business
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`model relies on a network of companies who apparently pay a fee to become a “member.” RPX
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`boasts a current membership network of 168 client companies ranging from early-stage firms to
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`Fortzme 100 industry leaders. (Ex. 4) Although Petitioner RPX apparently does not publish its
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`complete membership list, approximately 49 “select clients” are identified on its web site.
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`(Ex.
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`5) Additional membership information is available on the Internet (Ex. 6).
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`Based on the limited information available, Patent Owner has sought to obtain the actual
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`membership list of RPX through judicial means. However, such has not been successful to date.
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`Indeed, in resisting discovery from Patent Owner, RPX has indicated that this is the proper
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`forum for Patent Owner to seek this information. See, Non-Party RPX Corporation’s Objection
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`and Responses to Subpoena Duces Tecum”, Response 1, page 2, in Ex. 2:
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`l. RPX objects to the Document Subpoena and the Request on the grounds that they
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`have been brought in an improper forum. The inter part‘es review ("IPR") process
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`before the US. Patent and Trademark Office ("USPTO") provides a means for
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`Requesting Party to seek discovery, and it is to that forum that Requesting Party
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`should seek relief.
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`In 2011, Patent Owner, Macrosolve, Inc., began filing patent
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`infringement
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`lawsuits
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`asserting the “816 Patent. A listing of the cases filed since that time can be found in the
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`Background Section above. A listing of all of the defendants and respective dates of service can
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`be found in Ex 14.
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`Patent Owner served a third party subpoena seeking discovery from Petitioner relating to
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`Petitioner’s Membership in an effort to determine whether one or more defendant(s) to the ED.
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`8
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`
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`Texas litigation is a Member of Petitioner, and if so, whether, and to what extent, in an ultimate
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`effort to determine whether one or more of the defendant(s) to the ED. Texas litigation is a real
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`party-in-interest in the present IPR. If so, Petitioner may lack standing to request the present IPR
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`pursuant to 35 U.S.C. § 315(b). Additionally, if the present IPR proceeds to trial and a final
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`written decision results, the estoppels which apply under 35 U.S.C. § 315 set forth above may
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`apply to one of more of these defendants. As such, determination of the real party in interest is
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`critical.
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`Petitioner could have addressed and possibly removed these issues but instead chose to
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`refuse to comply with the subpoena, EX 2. As a result, unless discovery is granted in this IPR,
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`Patent Owner will be forced to file a special action in California for the sole purpose of obtaining
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`discovery regarding objective evidence that Petitioner failed to identify each real party-in-
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`interest. Patent Owner points out that the Board has granted discovery in a copending IPR in
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`which RPX is a party under very similar circumstances, See, RPX Corp. v. VirnelX Holding
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`Corp, IPR2014-00176.
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`Patent Owner has been able to identify at least seven entities which are both defendants
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`in ED. Texas litigation involving the ‘816 Patent and members of Petitioner RPX. At least four
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`of these seven would be precluded under 35 U.S.C. § 315(b) and 37 CPR. § 42.101(b) from
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`initiating the instant IPR.
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`Based on Patent Owner’s best information and belief, AOL, INC., Dell, Inc. Pandora
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`Media, Inc., Linkedin Corp, Target Stores, Inc., Walgreen Company, and Comcast Corp. are all
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`members of Petitioner RPX. Of these seven, Dell, Inc. was served on September 4, 2011, AOL,
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`Inc., was served on or before February 28, 2012; Linkedin Corp. was served on or before June 2,
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`2012; and Target Stores, Inc. was served on or before June 28, 2012. All these entities were
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`
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`served more than one year prior to the filing of the present IPR. If any one or all of the entities
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`were to be determined to be a real party-in-interest to Petitioner RPX, Petitioner would lack
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`standing to bring the present IPR.
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`A substantial number of the above parties involved in the ED. Texas litigation would be
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`barred by statute from participating in the present IPR since a party who is sued has one year in
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`which to institute an IPR. Patent Owner has been able to identify the above six (6) parties to the
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`ED. Texas litigation that are also members of RPX. Patent Owner submits that it is beyond
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`mere speculation that one or more of these parties are a real party-in-interest to Petitioner. If that
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`is the case, Petitioner lacks standing to institute the present IPR as being in contravention of
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`statute. Moreover, many additional defendants to the ED. Texas litigation may be undisclosed
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`members of RPX. There remain many “secret” members of Petitioner RPX.
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`A real party-in-interest is “the party that desires review of the patent. Thus, the ‘real
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`party-in-interest’ may be the petitioner itself, and/or, it may be the party or parties at whose
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`behest the Petition has been filed.” Office Patent Trial Practice Guide, 77 Fed. Reg. 48756,
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`48759 (Aug. 14, 2012). Whether a party is a real party-in-interest is a “highly fact—dependent
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`question.” Id. at 48759. To determine whether a party is a real party-in-interest, the USPTO
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`applies traditional common law principles with the goals of “identifying potential conflicts” and
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`assuring “proper application of the statutory estoppel provisions.” Id. at 48759.
`
`10
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`
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`Based on available information, RPX makes no products or provides services
`V.
`beyond those identified above. Therefore, RPX has no interest in challenging the ‘816
`Patent except for the benefit of its members who may be infringers.
`
`The Oflice Patent Trial Practice Guide cites In re Guan Inter Partes Reexamination
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`Proceeding, Control No. 95/001,045, Decision Vacating Filing Date at 6-9 (Aug. 25, 2008)1 in
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`which the Board of Patent Appeals and interferences (BPAI) (the predecessor to the PTAB)
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`found that an entity known as “Troll Busters,” whose primary function was “filing requests in
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`their name to maintain the anonymous nature of a party or parties,” failed to identify the party
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`that funded and controlled the petition as a real party-in—interest.
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`Id. The BPAI determined that
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`“Troll Busters cannot act as a ‘shill’ in an inter partes reexamination request to shield the
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`identity of the real party or parties in interest.” Id. Patent Owner submits that this analysis
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`equally applies to Petitioner RPX. RPX has refused , to date, to identify all of its 168 members.
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`Since RPX does not appear to be directly infringing the ‘816 patent, it must be bringing the
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`present IPR on behalf of its members, thereby attempting to avoid the time ban and estoppels
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`enumerated in 35 U.S.C. § 315.
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`Where a party funds and directly controls an IPR, it is likely that the party would be found to
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`be a real party-in—interest. Office Patent Trial Practice Guide, 77 Fed. Reg. 48756, 48760. The
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`practice guide states that “a party that funds and directs and controls an IPR or PGR petition or
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`proceeding constitutes a ‘real party-in—interest,’ even if that party is not a ‘privy’ of the
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`petitioner.” Id.
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`The Director has the discretion to dismiss or stay the present IPR proceeding. Petitioner
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`will not be prejudiced by any —delay resulting from a dismissal or stay of this lPR due to the fact
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`that Petitioner’s refusal to comply with Patent Owner’s discovery requests necessitated the delay.
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`1 The Guan case relates to an inter partes reexamination and not an lPR, however, it is cited in the Ofiice Patent
`Trial Practice Guide.
`
`11
`
`
`
`If the real parties-in-interest have not been accurately identified in the Petition, the
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`Petition fails to meet the statutory requirements for instituting an inter partes review. Here, at
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`least four RPX members are time barred (and perhaps other that are currently unknown). As a
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`result, the Board has the authority to dismiss or stay the present IPR under 35 U.S.C. § 315. The
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`Board should not institute a trial based on the untimely Petition and this Petition should be
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`dismissed, which Patent Owner respectfully requests.
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`In enacting the America Invents Act (“AIA”), Congress made perfectly clear that it
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`wanted to do away with the problems and expense of allowing defendants to have “multiple bites
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`at the apple” when it comes to challenging the validity of a patent. Office Patent Trial Practice
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`Guide, 77 Fed. Reg. 48759. Patent Owner respectfully submits that this is exactly what
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`Petitioner will accomplish if the Board finds that there are no other real parties-in-interest or
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`privies who will be bound by any inter partes Review initiated in response to the Petition.
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`Allowing Petitioner to manipulate the system to create an almost certain duplication of
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`challenges to validity is the wrong result that is neither in the interests ofjustice, nor what should
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`be permitted under equity.
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`In conclusion, for at least the above reasons, the Petition should be dismissed and no inter
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`partes review should be instituted because the Petition fails to meet the requirements of 35
`
`U.S.C. § 312(a)(2) which requires the Petition to “name all real parties in interest”. In addition,
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`the Petition should be dismissed and no inter partes review should be instituted because the
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`Petition fails to meet the requirements of 35 U.S.C. § 315(b) which bars an inter partes review
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`from being instituted if it “is filed more than 1 year after the date on which the petitioner, real
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`party—in-interest, or privy of the petitioner is served with a complaint alleging infringement of the
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`patent.” In the event that a trial is instituted, Patent Owner respectfully moves for an order
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`12
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`
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`permitting discovery on this issue and reserves its rights to raise the issue of Petitioner’s standing
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`during the trial, and to seek authority from the Board to take pertinent discovery or to file a
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`motion to challenge Petitioner’s standing to initiate the present IPR.
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`This IPR should be dismissed because Petitioner is in Privity with Entities which are
`VI.
`barred by statute from instituting the present IPR
`
`As discussed above, Title 35 U.S.C. § 315(b) requires that “[a]n inter partes review may
`
`not be instituted if the petition requesting the proceeding is filed more than 1 year after the date
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`on which the petitioner, real party-in—interest, or privy of the petitioner is served with a
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`complaint alleging infringement of the patent” (emphasis added). Petitioner, RPX is in privity
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`with certain entities which were served with a complaint alleging infringement of the ‘816 Patent
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`more than one year prior to the filing of the Petition in the present IPR.
`
`The US. Supreme Court provided a list of circumstances in which a nonparty to a lawsuit
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`can be bound by a judgment in that suit in Taylor v. Slurgell , 553 US 880, 893-895 (2008) .
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`This list is illustrative but not exhaustive. Although the Taylor case is not set in the context of a
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`patent reexamination, this list and the Taylor case are cited in the Office Patent Trial Practice
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`Guide, 77 Fed. Reg. 48756, 48759 (Aug. 14, 2012). As a result, it is apparent that the Taylor
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`case has bearing on the issue of privity. The six non-exhaustive Taylor examples are:
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`1.)
`
`2.)
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`Agreement to be bound by a judgment;
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`“Substantive legal relationships” such as “preceding and succeeding owners of
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`property, bailee and bailor, and assignee and assignor”;
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`3.)
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`A non-party was adequately represented in a “representative suits” such as
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`“properly conducted class actions
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`and suits brought by trustees, guardians, and
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`other fiduciaries”;
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`l3
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`4.)
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`A nonparty that “assumed control over the litigation in which that judgment was
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`rendered” even though it was not formally represented in the litigation;
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`5.)
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`“A person who did not participate in a litigation later brings suit as the designated
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`representative of a person who was a party to the prior adjudication”; and
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`6.)
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`Statutory preclusion, such as in bankruptcy or probate proceedings, as long as the
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`statute is “consistent with due process.”
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`The practice guide also notes that “the legislative history of the AIA indicates that
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`Congress included ‘privies’ within the parties subject to the statutory estoppel provisions in an
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`effort to capture ‘the doctrine’s practical and equitable nature,’ in a manner akin to collateral
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`estoppel.” Oflice Patent Trial Practice Guide, 77 Fed. Reg. 48756, 48759 (Aug. 14, 2012).
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`Whether a party who is not a named participant in a given proceeding nonetheless
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`constitutes a “real party-in-interest" or "privy” to that proceeding is a highly fact-
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`dependent question. Office Patent Trial Practice Guide, 77 Fed. Reg. 48756, 48759 (Aug. 14,
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`2012). In addition to the RPX members who are also litigants in the Eastern District of
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`Texas, there are a number oflitigants are privies to RPX through documented common
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`ownership with RPX: ownership with managerial authority within RPX.
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`Specifically, the Form 10—K (Annual Report) for RPX Corp filed March 11, 2013 for
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`the Period Ending December 31, 2012 states:
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`Our Three largest stockholders and our directors and executive
`officers, in the aggregate, own approximately 44% of our outstanding
`common stock and will be able to exercise control over all matters
`requiring stockholder approval. This concentration of ownership limits
`your ability to influence corporate matters.
`As of December 31, 2012, affiliates of Index Ventures, affiliates of
`Charles River Ventures and KPCB Holdings, Inc. each beneficially owned
`approximately 10%, 12%, and 12%, respectively, of our outstanding common
`stock, and our directors and executive officers and their affiliates, in the
`aggregate, beneficially owned approximately 10% of our outstanding
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`l4
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`
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`common stock. As a result, these stockholders will be able to exercise
`substantial control over all matters requiring stockholder approval, including
`the election of directors and approval of significant transactions, such as a
`merger or other sale of our company or its assets. This concentration of
`ownership will limit your ability to influence corporate matters and may
`have the effect of delaying or preventing a third party from acquiring control
`over us.
`In addition, each of Index Ventures, Charles River Ventures, and
`KPCB Holdings, Inc. currently has a representative on our Board of Directors.
`(Emphasis in original)
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`FORM 10-K at 18, 19. (Ex. 7) Clearly Index Ventures, Charles River Ventures, and KPCB
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`Holdings, Inc. individually and collectively exercise significant control over RPX.
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`Each of these three owners/directors also owns a stake in at least one litigant. For
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`example: Index Ventures has a current stake in Facebook (6—12-cv-00044, 1/30/2012) Ex.
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`82 and previously owned an interest in Salesforcecom (6-11-cv-490, 9/15/2011) Ex. 93;
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`KPCB Holdings, Inc. has a stake in Facebook (6-12-cv-00044, 1/30/2012) BX 104, Groupon
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`(6-12-cv~00490, 9/15/2011) EX 115, and AOL (6-12-cv—0091, 2/27/2012) BX 136; and
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`Charles River Ventures has a stake in Dropbox, Inc. (6—13—cv-00670) EX 137. RPX is also
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`listed in the portfolios of each ofthese companies.
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`Clearly these relationships extend beyond mere membership in RPX. Essentially,
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`Facebook, Groupon, AOL, and Dropbox control members ofthe board of RPX. As such, RPX
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`is clearly a privy to each ofthese companies and, as such, cannot initiate an IPR where its
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`privy is barred.
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`In addition, Patent Owner submits that RPX has violated its duty of candor pursuant
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`to Rule 42.11:
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`2 http://www.indexventures.com/portfolio#company~id_184
`3 http://www.indexventures.com/portfolio#companyid_ 152
`" http://www.kpcb.com/companies/facebook
`5 http://www. kpcb.com/companies/groupon
`6 http://www.kpcb.com/ companies/aol
`7 http://www.crv.com
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`15
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`
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`Parties and individuals involved in the proceedings have a duty of
`candor and good faith to the Office during the course of a proceeding.
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`Clearly, the fact that at least six litigants in related actions have common ownership
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`with RPX is material to Petitioner’s real party in interest statement. Particularly in light of
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`the fact that the entities having common ownership effectively have the controlling interest
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`in RPX, and further, have positions on the board of directors of RPX. These material
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`omissions alone warrant dismissal of the Petition. See 37 CPR. § 42.12 (a) (1), (b) (8).
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`However, if the Board determines dismissal of the Petition is not warranted, Patent Owner
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`moves for limited discovery to determine if Index Ventures, Charles River Ventures, and/or
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`KPCB Holdings exerted undue influence in the decision to initiate the instant action.
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`VII. Requestor’s expert declaration is fatally flawed and should be struck
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`As an initial matter it should be noted that throughout this document various statements
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`that are found in the Petition that will be challenged. However, failure to challenge a specific
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`statement, teaching, finding, or interpretation in this document should not be construed as a
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`concession that such is accepted by the Patent Owner. The Patent Owner specifically reserves
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`the right to contest additional statements, conclusions etc., that may be found in the Petition, in
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`its expert declaration, etc., in the future as necessary.
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`By way of summary, Patent Owner believes that there are foundational flaws, errors, and
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`omissions in Requestor’s expert declaration (Requestor’s RPX-lOO4) that make it unreliable as a
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`reference. Requester cites to this document over 100 times in support of its petition and, in View
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`of its numerous problems, this report should be rejected and/or the instant request dismissed.
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`l6
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`
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`A.
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`Foundational Errors in the Declaration of AL. Narasimha Reddy (Requestor’s RPX-
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`1004).
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`Requester relies repeatedly on the Declaration under 37 CFR §1.68 of a Dr. Reddy.
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`However, this declaration contains foundational errors and misrepresentations that call into
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`immediate question the reliability of the conclusions set out therein and, as such, should not be
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`considered.
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`For example, in 1] 19, Dr. Reddy proclaims that the ‘8 l 6 patent teaches a “computerized
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`questionnaire”. That misrepresents that clear language of the patent. The ‘816 patent teaches a
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`“tokenized questionnaire” (see, e. g., Claim 5). The phrase “computerized questionnaire” cannot
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`be found in the ‘816 patent.
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`In this same paragraph, Dr. Reddy further mischaracterizes the teachings of the ‘816
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`patent by describing it as method of transmitting answers “back to the server wirelessly.” 1d.
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`Emphasis added. That unduly limits the scope of the instant patent. Consider, for example, Col.
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`7, lines 12—34, for example, where options such as a direct RS-232 connection and docking
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`station are mentioned as specific possibilities.
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`Requestor’s expert further opines in 1] 27 that “An interpreted language (such as Java) can
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`normally run on any hardware and operating system platform.” (Emphasis added). First, Patent
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`Owner disputes that Java is an interpreted language. Java compiles to byte code and is,
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`therefore, a compiled language.8 (Ex. 15) Second, no support for this statement has been
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`provided and, more importantly, the statement appears to refer to the present day. What is not of
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`evidence here is any support for this statement as applied to the time the invention was made, the
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`earliest priority date of the invention being August 19, 2002.
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`8 http://en. wikipedia. org/wikifl'ava—bylecode
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`l 7
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`
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`Dr. Reddy opines at some length as to what the proper definition is for the term “token”
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`as it appears in the ‘816 patent. However, this opinion begins with a clear error. In 1156 and 1157
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`Dr. Reddy criticizes Patent Owner’s definition of “token” which was originated in the Microsoft
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`Computer Dictionary (5‘h ed) and which was proposed to, and accepted by, the court after a
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`Markman hearing to discuss definition of claim terms (Macrosolve v Antenna Software, Inc., et.
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`Al, No. 6:11-cv—287 MHS-KNM, Eastern District of Texas, Markman Brief, attached hereto as
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`Ex. 16). The proposed definition for this term is “any nonreducible textual element in data that
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`is being parsed.” 1156, and Requestor’s RPX-1006 at 10. Dr. Reddy concludes from this that the
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`proposed definition means the tokens must be text (printable characters, 1] 60) and, since
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`examples of tokens are given in the specification of the ‘816 patent that are not “textual” (e.g.,
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`executable instructions).
`