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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`_____________________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`_____________________
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`WAVEMARKET, INC. D/B/A LOCATION LABS
`Petitioner
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`v.
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`CALLWAVE COMMUNICATIONS, LLC
`Patent Owner
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`
`_____________________
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`Case IPR2014-00199
`Patent 6,771,970
`_____________________
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`Petitioner’s Opposition to Patent Owner's Motion for Additional Discovery
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`I. BACKGROUND ............................................................................................ - 1 -
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`II. MATERIAL FACTS IN DISPUTE ............................................................... - 2 -
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`III. PATENT OWNER SEEKS DISCOVERY FOR AN ISSUE THAT
`HAS ALREADY BEEN DECIDED – PATENT OWNER'S LACK
`OF DILIGENCE .......................................................................................... - 2 -
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`IV. THE MOTION AND THE REQUESTED DISCOVERY EXCEEDS
`THE SCOPE OF WHAT WAS AUTHORIZED BY THE BOARD ......... - 4 -
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`V. THE PATENT OWNER BEARS THE BURDEN OF ESTABLISHING
`THAT THE REQUESTED DISCOVERY IS "NECESSARY IN THE
`INTEREST OF JUSTICE" ............................................................................. - 6 -
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`VI. THE GARMIN FACTORS STRONGLY WEIGH AGAINST A
`FINDING THAT ADDITIONAL DISCOVERY IS IN THE
`INTEREST OF JUSTICE ............................................................................... - 7 -
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`A. The Patent Owner Offers Nothing More Than Speculation That
`Something Useful Will be Found ................................................................ - 7 -
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`B. The Patent Owner Has The Ability to Obtain the Information by
`Other Means................................................................................................. - 9 -
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`C. The Requested Discovery Is Overly Burdensome .................................... - 11 -
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`VII. CONCLUSION ......................................................................................... - 15 -
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`APPENDIX I ......................................................................................................... A-1
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`The Patent Owner chose to make the argument in its Preliminary Response
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`that the Petition was defective for failure to identify the real party-in-interest.
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`Instead of seeking discovery on the issue in a timely fashion, prior to the filing of
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`its Preliminary Response, the Patent Owner chose to roll the dice and based its
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`argument on nothing more than mere speculation. The Board correctly recognized
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`the deficiencies of the Patent Owner's argument, and rejected it. Ignoring the
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`guidance offered by the Office regarding the timing of such discovery and the
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`limitations and guidance provided by the Board in its Order authorizing the Motion
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`(i.e., authorizing a Motion for discovery only on the issue of real party-in-interest),
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`the Patent Owner now attempts to resurrect its failed position after-the-fact by
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`seeking untimely, overly broad and excessively burdensome discovery. The Board
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`should reject the Patent Owner’s Motion.
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`I.
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`
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`BACKGROUND
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`On December 12, 2012 the Patent Owner filed multiple lawsuits in the
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`District Court alleging infringement of US 6,771,970 ("the '970 patent). The
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`pending litigation names, inter alia, AT&T, T-Mobile and Sprint as defendants
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`("the Defendants")1. To date, the Petitioner (Location Labs, Inc.) has not been
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`named as a defendant or served with a complaint for patent infringement in
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`1 See, Petition for Inter Partes Review, IPR2014-00199, Paper No. 1, Section I.B.
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`(Related Matters): hereafter "District Court Actions."
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`- 1 -
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`connection with the '970 patent. On November 27, 2013, less than one year from
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`the date that the Defendants were served with a complaint for infringement of
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`the '970 patent, Petitioner filed a Petition for Inter Partes Review of the '970
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`patent, and by its Decision of May 9, 2014, the Patent Trial and Appeal Board
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`("Board") instituted the current proceedings. The Petition identifies the real party-
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`in interest, Location Labs, Inc., and affirmatively states on the record that "no
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`party exercised control or could exercise control over Location Labs' participation
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`in this proceeding, the filing of this petition, or the conduct of any ensuing trial."
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`II.
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`MATERIAL FACTS IN DISPUTE
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`The Patent Owner's Motion of July 16, 2014 (Paper No. 31; "Motion")
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`contains no unambiguous assertions of material facts. To the extent that the
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`statements made by the Patent Owner in section II. ("Factual Background") could
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`be construed as assertions of "material fact," Petitioner denies the statements made
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`therein, for at least the reasons to be explained below.
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`III.
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`PATENT OWNER SEEKS DISCOVERY FOR AN ISSUE THAT HAS
`ALREADY BEEN DECIDED – PATENT OWNER'S LACK OF
`DILIGENCE
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`
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`The Patent Owner argued in its Preliminary Response filed March 17, 2014
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`(Paper No. 12) that the petition should be rejected pursuant to 37 C.F.R. §
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`42.8(b)(1) "because Petitioner has failed to identify each of the real parties in
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`interest." Preliminary Response, pp. 1-4. In its Decision instituting inter partes
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`- 2 -
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`review dated May 9, 2014 (Paper No. 18; "Decision"), the Board expressly
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`considered this argument, and rejected it. Decision, pp.27-29. The Patent Owner
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`did not file a timely request for rehearing challenging the Board's Decision in this
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`regard. Thus, the issue of the Petition's compliance with the identification of the
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`real party-in-interest requirement has already been decided as part of the process of
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`the decision to institute trial. 35 U.S.C. § 314(d); 37 C.F.R. § 42.71. The
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`"evidence" cited in the Motion merely alleges the existence of documents that the
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`Patent Owner hopes may bolster their position, but is no more persuasive that the
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`reasons offered in the Preliminary Response. Therefore, the Board should deny the
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`Motion. See, IPR2013-00028, Paper No. 31, p. 3 (Exhibit 1014).
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`The Patent Owner should have sought this discovery before its Preliminary
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`Response. 77 Fed. Reg. 48680, 48695 (8/14/2012) ("The Office agrees with the
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`comments that such a [identification of the real-party-in-interest] challenge should
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`be brought before or with the filing of the patent owner preliminary response.
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`During that period, the patent owner may seek authorization to take pertinent
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`discovery. After the patent owner preliminary response, the likelihood of granting
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`an authorization for additional discovery related to the challenge before institution
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`will decrease because the Board is required to determine whether to institute a
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`review within three months from the filing of the patent owner preliminary
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`response"; emphasis added).
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`- 3 -
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`The Patent Owner's lack of diligence in pursuing the requested discovery
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`further weighs against granting the Motion. The Patent Owner waited until the
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`initial conference call (June 13, 2014) to request authorization to file its Motion.
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`Three days later the Board granted authorization. The Patent Owner then waited
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`an additional month (i.e., one-third of its allotted time for the preparation of a
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`patent owner response) before filing its Motion on July 16, 2014. The Patent
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`Owner’s response is due August 11, 2014. Thus, even if the Board is able to
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`render a decision granting the Motion prior to the Patent Owner response deadline,
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`it would be impossible for the Petitioner to respond to far-ranging discovery
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`requested by the Patent Owner in time for it to be used in its August 11, 2014
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`response. Thus, no practical purpose can be served by granting the Motion and
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`doing so would prejudice the Petitioner.
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`IV.
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`THE MOTION AND THE REQUESTED DISCOVERY EXCEEDS
`THE SCOPE OF WHAT WAS AUTHORIZED BY THE BOARD
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`The only reason that could possibly justify the requested discovery is a
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`defense based upon failure to name the real party-in-interest in the Petition. 35
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`U.S.C. § 312(a)(2). The issue of "privity" is of no consequence at this juncture.
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`The Petition was filed less than one year after the service of a complaint for
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`infringement of the '970 patent by the Defendants in the District Court Actions.
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`Therefore, there is no issue of a bar under 35 U.S.C. §315 that could be based on a
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`finding of privity between the Petitioner and the Defendants. Perhaps recognizing
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`- 4 -
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`this, the Board explicitly limited its Order of June 16, 2014 ("Order") authorizing
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`the Motion for additional discovery directed solely to the issue of real party-in-
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`interest:
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`In view of the facts disclosed during the conference call, and the
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`potential significance of a real party in interest not yet identified,
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`Patent Owner is authorized to file a motion for additional discovery
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`related to this relationship. However, this authorization does not
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`mean that any such a motion will be granted.
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`Order, p. 4; emphasis added.
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`The Patent Owner ignores the Board's restriction on the permitted scope of
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`its Motion and requested discovery.
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`Patent Owner's limited requests are narrowly tailored and seek . . .
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`materials concerning . . . the real party-in-interest/privy issues in this
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`case.
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`Motion, p. 12; emphasis added.
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`As noted in the Trial Practice Guide:
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`The notion of 'privity' is more expansive, encompassing parties that
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`do not necessarily need to be identified in the petition as a 'real
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`party-in-interest.'
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`77 Fed. Reg., 48756, 48759 (emphasis added).
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`Therefore, it is quite clear that the Patent Owner seeks discovery on an issue
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`that exceeds the authorization granted by the Board in its Order. For this reason
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`alone, the Motion should be denied.
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`- 5 -
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`V.
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`THE PATENT OWNER BEARS THE BURDEN OF ESTABLISHING
`THAT THE REQUESTED DISCOVERY IS "NECESSARY IN THE
`INTEREST OF JUSTICE"
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`
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`Congress intended Inter Partes Review to be a quick and cost effective
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`alternative to litigation. The additional discovery sought by the Patent Owner
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`should only be permitted where such discovery is “necessary in the interest of
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`justice.” 35 U.S.C. § 316(a)(5); 37 C.F.R. § 42.51(b)(2). IPR2013-00080, Paper
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`18, p. 3 (Exhibit 1015). The Board must therefore be “conservative in its grants of
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`discovery.” 154 Cong. Rec. S9988-89 (daily ed. Sept. 27, 2008)(statement of Sen.
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`Kyl). The Board has previously explained in Garmin v. Cuzzo Speed2 that the
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`following factors inform the analysis of whether the party requesting discovery has
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`satisfied its burden: (1) Whether there exists more than a possibility and mere
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`allegation of possibly finding something useful; (2) Whether the requested
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`discovery seeks the other party's litigation positions or underlying bases therefor;
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`(3) Whether the requesting party has the ability to generate equivalent information
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`by other means; (4) Whether the instructions are easily understandable; and (5)
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`Whether the requested discovery is overly burdensome. The burden of
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`establishing the above-mentioned standard justifying additional discovery rests
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`with the party requesting the discovery. Id.
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`2 Garmin Int'l, Inc. v. Cuzzo Speed Techs. LLC, Case No. IPR2012-00001, Paper
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`No. 26, pp. 6-7 (PTAB, March 5, 2013) (Exhibit 1016).
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`- 6 -
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`VI.
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`THE GARMIN FACTORS STRONGLY WEIGH AGAINST A
`FINDING THAT ADDITIONAL DISCOVERY IS IN THE INTEREST
`OF JUSTICE
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`A. The Patent Owner Offers Nothing More Than Speculation That
`Something Useful Will be Found
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`The Patent Owner has clearly failed to establish, beyond mere speculation,
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`that the requested discovery will contain any useful information. In order to
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`establish that it is entitled to the requested discovery, the Patent Owner must
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`demonstrate that it 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." IPR 2012-00001, Paper Number 26, p.6 (Exhibit 1016). It is noted
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`that the term "useful" goes beyond traditional district court litigation thresholds of
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`relevance and admissibility. Id., p.7. In particular, the Patent Owner has the
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`burden of demonstrating that the requested discovery is "favorable in substantive
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`value to a contention of the party moving for discovery." Id., p. 7.
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`The Patent Owner alleges that the requested discovery is relevant to the
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`issue of "privity," but fails to provide any explanation as to how a finding of
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`"privity" between the Petitioner and Defendants is useful with respect to
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`establishing any possible defense that could be raised in the Patent Owner's
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`Response.
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`The Patent Owner alleges that indemnification agreements and joint
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`defense/common interest agreements exist between the Petitioner and the
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`- 7 -
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`Defendants3, yet it fails to explain how such evidence is favorable in substantive
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`value to the contention that the petition failed to name a real party-in-interest.
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`The mere existence of an indemnification provision or agreement alone is
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`insufficient to establish a more expansive concept of privity, much less the more
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`narrowly defined relationship of a real party-in-interest:
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`According to long-standing precedent, Bros, Inc. v. W.E. Grace Mfg.
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`Co., 261 F.2d 428, 429 (5th Cir. 1958), when a patent holder sues a
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`dealer, seller, or distributer of an accused product, as is the case at
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`hand, indemnity payments and minor participation in a trial are not
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`sufficient to establish privity between the non-party manufacturer of
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`the accused device and the defendant parties (also citing I.T.S. Rubber
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`Co. v. Essex Co., 272 U.S. 429 (1926); and Restatement, Judgment §
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`84, comment e (1942)).
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`IPR2013-00601, Paper Number 23, p. 7 (Exhibit 1017).
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`Likewise, the existence of, or participation in, a joint defense group does not
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`necessarily mean that the members of the group are real parties-in-interest, or for
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`that matter privies. Office Patent Trial Practice Guide, 77 Fed. Reg. 48756, 48760
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`(August 14, 2012) ("If Party A is part of a Joint Defense Group with Party B in a
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`patent infringement suit . . . Party A is not a 'real party-in-interest' . . . based solely
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`on its participation in that Group.")
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`3 See, e.g., Motion, p. 2 ("Indemnification and Joint Defense/Common Interest
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`Agreements Likely Exist between Petitioner and Its Customers, AT&T, T-Mobile,
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`and Sprint").
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`- 8 -
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`With regard to the issue of shared counsel between the Petitioner and
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`Defendants, the Patent Owner alleges that the requested discovery is justified in
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`order to support a finding of privity. Motion, p. 8. The Patent Owner provides no
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`evidence or explanation as to how the mere fact that the Petitioner shares counsel
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`with the Defendants demonstrates that the Defendants exercised control over the
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`Petitioner, funded the proceedings, etc. As explicitly stated on the record in the
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`Petition for Inter Partes Review (section I. A.) under the obligations of candor
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`imposed by the rules of practice,4 none of these defendants have exercised control
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`over or directed the Petitioner in these proceedings. Under similar circumstances,
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`the Board has found that such on-the-record assertions, coupled with a lack of
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`evidence or persuasive reasoning that the requested discovery contains useful
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`information, weighs in favor of denying a request for additional discovery.
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`IPR2013-00028, Decision, Paper No. 31, p. 5 (Exhibit 1014).
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`For at least the reasons explained above, the Patent Owner has failed to
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`satisfy its obligation of demonstrating that the requested additional discovery is in
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`the interest of justice.
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`B.
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`The Patent Owner Has The Ability to Obtain the Information by
`Other Means
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`Not only does the Patent Owner have the ability to obtain information by
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`other means, it previously chose to pursue alternative means for obtaining the same
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`4 See, e.g., 37 C.F.R. § 11.18(b).
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`- 9 -
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`discovery requested in this proceeding, by requesting the same discovery from
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`both the Defendants and Location Labs in the District Court Actions. The Patent
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`Owner has made a strategic decision to employ its subpoena power over Location
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`Labs to compel the same discovery it now seeks for a third time. See, e.g., Patent
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`Owner's Exhibit 2008; see also, Exhibit 2009, p. 5 (objecting to Patent Owners'
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`discovery requests as being redundant to discovery obtainable from the
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`Defendants).
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`Not only has the Patent Owner previously sought the same discovery
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`requested in these proceedings from the Petitioner, counsel for Petitioner in these
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`proceedings has been advised that the Patent Owner has actually received at least
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`some of its requested discovery from the Defendants. The Patent Owner represents
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`to the Board multiple times in its Motion that "Petitioner has not produced any
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`documents." Id. What the Patent Owner failed to reveal to the Board is that it has
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`already received documents containing the requested indemnification provisions
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`between Petitioner and Defendants during the course of discovery in the District
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`Court Actions. T-Mobile produced its License and Services Agreement with
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`Location Labs on March 14, 2014.5 AT&T produced its License and Services
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`Agreement with Petitioner Location Labs by e-mail two days before Patent Owner
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`5 Bates Nos. TM-CW00000074-00000113.
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`- 10 -
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`filed its Motion (July 14, 2014).6 Likewise, Sprint produced its Master Services
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`Agreement with Petitioner on July 15, 2014.7
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` Therefore, the Patent Owner's claims that it cannot obtain the requested
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`information by alternative means is unfounded.
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`C. The Requested Discovery Is Overly Burdensome
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`The Patent Owner's proposed discovery requests are not narrowly tailored,
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`are redundant to the requests for discovery already made of Petitioner Location
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`Labs in the District Court Actions, and compliance therewith would be overly
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`burdensome. As previously explained, and as admitted by the Patent Owner, the
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`requested discovery is intended to be broad enough to uncover information related
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`to the irrelevant issue of privity, which is broader than necessary and cannot be
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`justified.
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`Proposed Document Requests 1-3 asked for "[a]ll indemnification
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`agreements between Petitioner and AT&T, Sprint and T-Mobile that are "related to
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`the patent infringement claims raised in the respective District Court Action [s]. "
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`As previously explained, the Patent Owner is already in possession of documents
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`responsive to these requests. Requiring Petitioner Location Labs to produce the
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`same documents already produced by AT&T, Sprint and T-Mobile represents an
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`6 Bates Nos. ATT-CW-FM-00005261-00005336.
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`7 Bates Nos. SPT-CW_D00000446-00000567.
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`- 11 -
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`unjustified and undue burden on Petitioner. Document Requests 1-3 additionally
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`ask for "[a]ll . . . communications about indemnification by and between Petitioner
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`and [AT&T, Sprint and T mobile]." The Patent Owner has not provided any basis
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`to establish that the requested "communications about indemnification" contain
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`any useful and discoverable information. Thus, Document Requests 1-3 represent
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`nothing more than a fishing expedition and an unjustified and undue burden on the
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`Petitioner.
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`Document Request 4 asks for all joint defense and common interest
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`agreements "related to the District Court actions." Such agreements are likely
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`privileged under the common interest doctrine, and unlikely to be discoverable.
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`Moreover, the Patent Owner has not established, beyond mere speculation, that any
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`such agreements contain useful information in the event that they are discoverable.
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`This document requests also goes much further than necessary or justified by
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`expanding the scope of the request to include "[a]ll . . . communications about the
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`joint defense and/or common interest agreements." Again, the Patent Owner
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`provides no basis whatsoever to satisfy its burden of establishing that the discovery
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`of such communications will likely lead to "useful" information.
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`Document Request 5 requests communications between Petitioner and
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`AT&T, Sprint and/or T-Mobile regarding the preparation, filing, control or funding
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`of the IPR. In the proposed Instructions, "Petitioner" is defined as including its
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`- 12 -
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`attorneys. Therefore, the request is overly broad in that it seeks privileged
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`information which is not discoverable, and not reasonably calibrated to lead to the
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`discovery of "useful" information. The Patent Owner offers no evidence or
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`rationale to establish otherwise. Similarly, no basis exists in the Motion to
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`establish that the intrusion into the attorney-client relationship sought in Document
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`Request 6 is likely to yield any useful information. Thus, a response to Document
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`Requests 5 and 6 represent an unjustified and undue burden on Petitioner.
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`The proposed Interrogatory is not limited to communications concerning
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`indemnity associated with the District Court Actions. In fact, the Interrogatory is
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`not limited to communications regarding indemnity for patent infringement
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`lawsuits, but encompasses communications about indemnification for liability
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`arising from any possible source (e.g., products liability, breach of contract, etc.).
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`It is abundantly clear that the interrogatory is excessively broad and overreaching,
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`and potentially encompasses a large number of "communications" which bear no
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`relevance whatsoever to these proceedings. Moreover, the interrogatory is not
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`time-limited, but is broad enough to encompass communications about the general
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`subject of "indemnity" that could have occurred even before the application that
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`spawned the '970 patent application was filed.
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`The proposed Deposition Notice proposes to depose individuals that
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`authored or received documents associated with Document Requests 1-6, or who
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`- 13 -
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`were identified in response to the proposed Interrogatory. Therefore, the proposed
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`Deposition Notice is also objectionable for these same reasons previously noted in
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`connection with the proposed document requests and interrogatories. In addition,
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`the proposed Deposition Notice is overly burdensome for at least two additional
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`reasons. First, there is no limit on the number of persons who can be deposed. It is
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`unknown how many persons "authored or received documents" or had non-tangible
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`"communications" falling under the document requests and interrogatory, but given
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`their excessive breath, it is likely that many such persons could be identified.
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`Producing large numbers of Petitioner's employees for deposition, preparing them,
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`and defending their deposition testimony would create an enormous disruption of
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`Petitioner's business, and the potential attorneys fees associated with responding to
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`the proposed bottomless Deposition Notice could be enormous. Second, the scope
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`of the subject matter to be covered by the proposed deposition is unspecified. The
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`Patent Owner does not provide a list of topics for the proposed depositions. The
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`Board has rejected similar proposed open-ended deposition requests. See,
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`IPR2013-00431, Paper No. 43, p. 3 (Rejecting a proposed deposition notice for
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`failing to specify the topics to be discussed at the deposition) (Exhibit 1018).
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`
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`For at least the reasons explained above, the proposed Deposition, and all of
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`the other proposed discovery, is excessively and unjustifiably broad and a response
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`thereto would represent an undue burden to the Petitioner.
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`- 14 -
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`VII.
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`CONCLUSION
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`
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`As explained above, granting the Patent Owner's request for additional
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`discovery under these circumstances in no way serves the interest of justice.
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` No fees are believed due in connection with this submission. However, the
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`undersigned further authorizes payment for any additional fees that might be due in
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`connection with this submission to be charged to Deposit Account No 19-3140.
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`Dated: July 28, 2014
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`
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`
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`Mark L. Hogge, Reg. No. 31,662
`Email: mark.hogge@dentons.com
`
`/Scott W. Cummings/
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`Respectfully submitted,
`Attorneys for Petitioner
`Dentons US LLP
`
`By:
`
`Scott W. Cummings, Reg. No. 41, 567
`Email: scott.cummings@dentons.com
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`- 15 -
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`APPENDIX 1 - LIST OF EXHIBITS
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`EXHIBIT NO.
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`DESCRIPTION
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`1014
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`Innolux Corp. v. Semiconductor Energy Laboratory Co., Ltd.,
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`Case No. IPR2013-00028, Paper No. 31
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`1015
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`Apple, Inc. v. Achates Reference Publ., Inc.
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`Case No. IPR2013-00080, Paper No. 18
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`1016
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`Garmin Int'l, Inc. v. Cuzzo Speed Techs. LLC,
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`Case No. IPR2012-00001, Paper No. 26
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`1017
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`Broadcom Corp. v. Telefonaktiebolaget LM Ericsson ,
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` Case No. IPR 2013-00601, Paper No. 23
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`1018
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`Cardiocom, LLC v. Robert Bosch Healthcare Systems, Inc.,
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`Case No. IPR2013-00431, Paper No. 43
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`A-1
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`CERTIFICATE OF SERVICE (37 C.F.R. § 42.6(e)
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`The undersigned hereby certifies that the foregoing Petitioner’s Opposition
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`to Patent Owner's Motion for Additional Discovery was served via Federal
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`Express Overnight Delivery Service, in its entirety, on Patent Owner's attorneys of
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`record in IPR2014-00199.
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`Thomas Engellenner, Esq.
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`Reza Mollaaghababa, Esq.
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`Pepper Hamilton LLP
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`125 High Street
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`19th Floor, High Street Tower
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`Boston, MA 02110
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`By: /Scott W. Cummings/
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`
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`Dated: July 28, 2014
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