Trials@uspto.gov
`Tel: 571-272-7822
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`
`
`
`Paper 18
`Entered: April 3, 2013
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`APPLE INC.
`Petitioner
`
`v.
`
`ACHATES REFERENCE PUBLISHING, INC.
`Patent Owner
`____________
`
`Case IPR2013-00080 (Patent 6,173,403)
`Case IPR2013-00081 (Patent 5,982,889)1
`
`
`Before THOMAS L. GIANNETTI, Lead Administrative Patent Judge,
`HOWARD B. BLANKENSHIP, and JUSTIN T. ARBES,
`Administrative Patent Judges.
`
`ARBES, Administrative Patent Judge.
`
`
`
`
`
`DECISION
`Achates Motion for Additional Discovery
`37 C.F.R. § 42.51(b)(2)
`
`
`1 This decision addresses an issue that is identical in both cases. We
`therefore exercise our discretion to issue one Order to be filed in each case.
`The parties, however, are not authorized to use this style heading for any
`subsequent papers.
`
`
`Tel: 571-272-7822
`
`
`
`
`Paper 18
`Entered: April 3, 2013
`
`
`
`
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`APPLE INC.
`Petitioner
`
`v.
`
`ACHATES REFERENCE PUBLISHING, INC.
`Patent Owner
`____________
`
`Case IPR2013-00080 (Patent 6,173,403)
`Case IPR2013-00081 (Patent 5,982,889)1
`
`
`Before THOMAS L. GIANNETTI, Lead Administrative Patent Judge,
`HOWARD B. BLANKENSHIP, and JUSTIN T. ARBES,
`Administrative Patent Judges.
`
`ARBES, Administrative Patent Judge.
`
`
`
`
`
`DECISION
`Achates Motion for Additional Discovery
`37 C.F.R. § 42.51(b)(2)
`
`
`1 This decision addresses an issue that is identical in both cases. We
`therefore exercise our discretion to issue one Order to be filed in each case.
`The parties, however, are not authorized to use this style heading for any
`subsequent papers.
`
`
`
`Case IPR2013-00080 (Patent 6,173,403)
`Case IPR2013-00081 (Patent 5,982,889)
`
`
`
`
`Introduction
`
`Patent Owner Achates Reference Publishing, Inc. (“Achates”) filed a
`
`motion for additional discovery in the instant proceedings and Petitioner
`
`Apple Inc. (“Apple”) filed an opposition.2 For the reasons stated below,
`
`Achates’s motion is denied.
`
`Achates’s motion seeks the following discovery from Apple:
`
`1. Produce copies of any and all agreements related to
`rights, obligations or indemnification responsibilities for
`allegations of infringement of third party intellectual property
`rights among or between Petitioner and any Defendant in the
`Texas litigation relating to “apps” by these defendants that were
`made available on the Apple App Store between January 2010
`and July 2011.
`
`2. Produce copies of any and all joint defense agreements
`related to the Texas litigation among Petitioner and any
`Defendant in the Texas Litigation.
`
`Mot., Attach. A. Achates contends that the requested information is relevant
`
`to determining whether Apple’s co-defendants in the related litigation,
`
`Achates Reference Publishing, Inc. v. Symantec Corp., et al., E.D. Tex. Case
`
`No. 2:11-cv-00294-JRG-RSP, are real parties-in-interest or privies of Apple.
`
`Mot. at 2-4. According to Achates, while Apple was named as a defendant
`
`in the litigation less than one year before filing its petitions for inter partes
`
`review, Apple’s co-defendants were served more than one year prior. Id. at
`
`1-2. Therefore, if any of the co-defendants are real parties-in-interest or
`
`privies of Apple, an inter partes review may not be instituted under the
`
`one-year bar provision of 35 U.S.C. § 315(b) (“An inter partes review may
`
`
`2 IPR2013-00080, Papers 10 (“Mot.”), 13 (“Opp.”); IPR2013-00081, Papers
`11, 13. While the analysis herein applies to both proceedings, we refer to
`the papers filed in Case IPR2013-00080 for convenience.
`
`
`
`2
`
`
`
`Case IPR2013-00080 (Patent 6,173,403)
`Case IPR2013-00081 (Patent 5,982,889)
`
`not be instituted if the petition requesting the proceeding is filed more than 1
`
`
`
`year after the date on which the petitioner, real party in interest, or privy of
`
`the petitioner is served with a complaint alleging infringement of the
`
`patent.”). Mot. at 1-2. Similarly, if any of the co-defendants are real parties-
`
`in-interest for purposes of the instant proceedings, Apple did not correctly
`
`identify all of the real parties-in-interest in its petitions as required by 35
`
`U.S.C. § 312(a)(2). See Pet. 1 (identifying Apple as the only real party-in-
`
`interest).
`
`
`
`Analysis
`
`Pursuant to the America Invents Act (AIA), certain discovery is
`
`available in inter partes review proceedings. 35 U.S.C. § 316(a)(5); see 37
`
`C.F.R. §§ 42.51-53. Discovery in an inter partes review proceeding,
`
`however, is less than what is normally available in district court patent
`
`litigation, as Congress intended inter partes review to be a quick and cost
`
`effective alternative to litigation. See H. Rep. No. 112-98 at 45-48 (2011).
`
`A party seeking discovery beyond what is expressly permitted by rule must
`
`do so by motion, and “must show that such additional discovery is in the
`
`interests of justice.” 37 C.F.R. § 42.51(b)(2)(i); see 35 U.S.C. § 316(a)(5).
`
`The legislative history of the AIA makes clear that additional discovery
`
`should be confined to “particular limited situations, such as minor discovery
`
`that PTO finds to be routinely useful, or to discovery that is justified by the
`
`special circumstances of the case.” 154 Cong. Rec. S9988-89 (daily ed.
`
`Sept. 27, 2008) (statement of Sen. Kyl). In light of this, and given the
`
`statutory deadlines required by Congress for inter partes review
`
`proceedings, the Board will be conservative in authorizing additional
`
`
`
`3
`
`
`
`Case IPR2013-00080 (Patent 6,173,403)
`Case IPR2013-00081 (Patent 5,982,889)
`
`discovery. See id.
`
`
`
`An important factor in determining whether additional discovery is in
`
`the interests of justice is whether there exists more than a “mere possibility”
`
`or “mere allegation that something useful [to the proceeding] will be found.”
`
`See Order – Authorizing Motion for Additional Discovery, IPR2012-00001,
`
`Paper 20 at 2-3 (explaining a number of important factors to be taken into
`
`account in determining whether additional discovery is warranted). This
`
`requires the party seeking discovery to come forward with some factual
`
`evidence or support for its request.
`
`The only evidence cited by Achates in its motion is a publicly
`
`available software development kit (SDK) agreement that Apple allegedly
`
`enters into with iPhone application developers like the co-defendants in the
`
`related litigation. See Mot. 4-5 (citing Ex. 2006). Achates points to the
`
`indemnification clause in section 6 of the agreement, which states that the
`
`developer agrees to indemnify Apple against “any claims that [the
`
`developer’s] Applications violate or infringe any third party intellectual
`
`property or proprietary rights.” Ex. 2006 § 6. Achates contends that under
`
`California law, an indemnification relationship is indicative of the
`
`indemnitor being a real party-in-interest or privy of the indemnitee. Mot.
`
`3-5.
`
`Whether a non-party is a “real party-in-interest” or “privy” for
`
`purposes of an inter partes review proceeding is a “highly fact-dependent
`
`question” that takes into account how courts generally have used the terms
`
`to “describe relationships and considerations sufficient to justify applying
`
`conventional principles of estoppel and preclusion.” Office Patent Trial
`
`Practice Guide, 77 Fed. Reg. 48756, 48759 (Aug. 14, 2012) (“Trial Practice
`
`
`
`4
`
`
`
`Case IPR2013-00080 (Patent 6,173,403)
`Case IPR2013-00081 (Patent 5,982,889)
`
`Guide”). Whether parties are in privity, for instance, depends on whether
`
`
`
`the relationship between a party and its alleged privy is “sufficiently close
`
`such that both should be bound by the trial outcome and related estoppels.”
`
`Id. Depending on the circumstances, a number of factors may be relevant to
`
`the analysis, including whether the non-party “exercised or could have
`
`exercised control over a party’s participation in a proceeding” or whether the
`
`non-party is responsible for funding and directing the proceeding. Id. at
`
`48759-60. We also find guidance in the Supreme Court’s decision in Taylor
`
`v. Sturgell, 553 U.S. 880 (2008), which sets forth the general rule under
`
`federal common law that a person not a party to a lawsuit is not bound by a
`
`judgment in that suit, subject to certain exceptions, including the following:
`
`[N]onparty preclusion may be justified based on a variety of
`pre-existing “substantive legal relationship[s]” between the
`person to be bound and a party to the judgment. Qualifying
`relationships include, but are not limited to, preceding and
`succeeding owners of property, bailee and bailor, and assignee
`and assignor. These exceptions originated “as much from the
`needs of property law as from the values of preclusion by
`judgment.”
`
`553 U.S. at 894 (citations omitted); see Trial Practice Guide at 48759 (citing
`
`Taylor).
`
`Achates provides no proof that any of Apple’s co-defendants in the
`
`related litigation have signed the SDK agreement. But even assuming that
`
`the indemnification provision of the SDK agreement applies to Apple’s
`
`co-defendants in the related litigation, we are not persuaded that the
`
`provision would be indicative of the co-defendants being real parties-in-
`
`interest or privies of Apple. The agreement does not give the developer the
`
`right to intervene or control Apple’s defense to any charge of patent
`
`infringement, nor has Achates argued that to be the case for the
`
`
`
`5
`
`
`
`Case IPR2013-00080 (Patent 6,173,403)
`Case IPR2013-00081 (Patent 5,982,889)
`
`co-defendants in the related litigation. Indemnification is not one of the
`
`
`
`“substantive legal relationships” cited in Taylor (e.g., assignee-assignor),
`
`and is significantly different from those relationships, which involve
`
`successive interests in property. Further, Achates’s sole legal authority – a
`
`California Practice Guide excerpt – is inapplicable, as it relates to
`
`subrogation claims where a “person obligated to pay for a loss caused by
`
`another may, by virtue of his or her payment, become subrogated to
`
`whatever claim the payee has against the person causing the loss.” See
`
`Paper 12 § 2:28 (emphasis added). We are not persuaded by Achates’s
`
`subrogation argument. For example, with subrogation an insurance
`
`company that pays an insured for injuries caused to the insured by a third
`
`party can then stand in the shoes of the insured to sue the third party. Id. §§
`
`2:28, 30. By contrast, under the indemnification provision in the SDK
`
`agreement, an indemnifying developer would be paying Apple for patent
`
`infringement liability incurred by Apple, not paying for a loss caused by a
`
`third party and then standing in Apple’s shoes to sue the third party. Thus,
`
`Achates has not shown a sufficient basis for why the indemnification
`
`provision in the SDK agreement would justify discovery of the requested
`
`agreements between Apple and the co-defendants.
`
`Moreover, as Apple points out, Apple and its co-defendants have
`
`distinct interests in the related litigation such that, at least based on the facts
`
`available to us, it does not appear that Apple would be estopped by any
`
`judgment against one of the co-defendants. See Opp. at 2-3. Achates
`
`accuses Apple of infringing the two patents at issue based on Apple’s own
`
`actions as well as those of defendant QuickOffice, Inc. (“QuickOffice”). Ex.
`
`1037 ¶¶ 51-52. Likewise, Achates accuses QuickOffice of infringement
`
`
`
`6
`
`
`
`Case IPR2013-00080 (Patent 6,173,403)
`Case IPR2013-00081 (Patent 5,982,889)
`
`based on activities relating to the Apple App Store and other systems (e.g.,
`
`
`
`the Amazon Appstore for Android). Ex. 1038 at 84-90. Thus, even if a
`
`judgment were obtained against one or more of the co-defendants, Apple
`
`would still be exposed to an adverse judgment based on its own actions and
`
`would therefore assert its own defenses independent of Apple’s
`
`co-defendants. This further indicates that the relationship between Apple
`
`and the co-defendants is not of the type that would make the co-defendants
`
`real parties-in-interest or privies of Apple.
`
`The evidence and argument presented by Achates amount to only a
`
`mere allegation and speculation that one or more of the co-defendants are
`
`real parties-in-interest or privies of Apple, and do not convince us that the
`
`requested additional discovery is likely to uncover information useful to the
`
`instant proceedings. Achates therefore has not met its burden to demonstrate
`
`that additional discovery is in the interests of justice.
`
`Finally, Achates’s delay in requesting additional discovery weighs
`
`against granting the motion. As the plaintiff in the related litigation filed in
`
`2011, Achates was well aware of the relevant dates on which Apple and the
`
`co-defendants were served with a complaint, but waited until nearly three
`
`months after Apple’s petitions were filed and one week prior to the due date
`
`for its preliminary responses to make its request.
`
`In consideration of the foregoing, it is hereby:
`
`ORDERED that Achates’s motion for additional discovery is denied.
`
`
`
`7
`
`
`
`
`
`Case IPR2013-00080 (Patent 6,173,403)
`Case IPR2013-00081 (Patent 5,982,889)
`
`PETITIONER:
`
`Jeffrey P. Kushan
`Joseph A. Micallef
`SIDLEY AUSTIN LLP
`1501 K Street, N.W.
`Washington, DC 20005
`jkushan@sidley.com
`
`PATENT OWNER:
`
`Brad D. Pedersen
`Bradley J. Thorson
`PATTERSON THUENTE PEDERSEN, P.A.
`80 South Eighth Street, Suite 4800
`Minneapolis, MN 55402
`prps@ptslaw.com
`
`
`
`
`8
`
`
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