Trials@uspto.gov
`Tel: 571-272-7822
`
`Paper 34
`Entered: August 11, 2014
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`WAVEMARKET INC. d/b/a LOCATION LABS,
`Petitioner,
`
`v.
`
`LOCATIONET SYSTEMS LTD.,
`Patent Owner.
`
`
`Case IPR2014-00199
`Patent 6,771,970 B1
`
`
`
`
`Before KRISTEN L. DROESCH, GLENN J. PERRY, and
`SHERIDAN K. SNEDDEN, Administrative Patent Judges.
`
`DROESCH, Administrative Patent Judge.
`
`
`
`DECISION
`Denying Patent Owner’s Motion for Additional Discovery
`37 C.F.R. §§ 42.51(b)(2)(i), 42.71(b)
`
`
`Tel: 571-272-7822
`
`Paper 34
`Entered: August 11, 2014
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`WAVEMARKET INC. d/b/a LOCATION LABS,
`Petitioner,
`
`v.
`
`LOCATIONET SYSTEMS LTD.,
`Patent Owner.
`
`
`Case IPR2014-00199
`Patent 6,771,970 B1
`
`
`
`
`Before KRISTEN L. DROESCH, GLENN J. PERRY, and
`SHERIDAN K. SNEDDEN, Administrative Patent Judges.
`
`DROESCH, Administrative Patent Judge.
`
`
`
`DECISION
`Denying Patent Owner’s Motion for Additional Discovery
`37 C.F.R. §§ 42.51(b)(2)(i), 42.71(b)
`
`
`
`IPR2014-00199
`Patent 6,771,970 B1
`
`
`INTRODUCTION
`Pursuant to authorization from the panel, Patent Owner filed a Motion
`
`for Additional Discovery from Petitioner (Paper 31, “Motion” or “Mot.”,
`and Petitioner filed an Opposition to Patent Owner’s Motion (Paper 33,
`“Opposition” or “Opp.”). In its Motion, Patent Owner seeks production of
`certain documents, an answer to one interrogatory, and seeks authorization
`to take a deposition. Mot. 1. Patent Owner asserts that AT&T, T-Mobile,
`and Sprint are accused of infringing the patent at issue in several related
`district court litigations, and each has a direct interest in the outcome of this
`proceeding and a relationship with the Petitioner. Id. Patent Owner seeks to
`establish that these entities which are not named real parties in interest are in
`fact so and that therefore the Petition should be dismissed under 35 U.S.C.
`§ 312(a)(2) for failing to identify at least AT&T, T-Mobile, and Sprint as
`real parties in interest. Id. at 7. For the reasons stated below, Patent
`Owner’s Motion is denied.
`
`REQUEST
`Pursuant to its Motion, Patent Owner seeks the following:
`1. All indemnification agreements and communications
`about the indemnification by and between Petitioner and AT&T
`related to the patent infringement claims raised in the respective
`District Court Action involving AT&T.
`
`2. All indemnification agreements and communications about the
`indemnification by and between Petitioner and Sprint related to the
`patent infringement claims raised in the respective District Court
`Action involving Sprint.
`
`3. All indemnification agreements and communications about the
`indemnification between Petitioner and T-Mobile related to the patent
`
`2
`
`
`
`IPR2014-00199
`Patent 6,771,970 B1
`
`
`infringement claims raised in the respective District Court Action
`involving T-Mobile.
`
`4. All joint defense and/or common interest agreements and
`communications about the joint defense and/or common interest
`agreements by and between Petitioner on the one hand and AT&T,
`Sprint, and/or T-Mobile on the other hand related to the District Court
`Actions.
`
`5. Documents or things containing communications between
`Petitioner on the one hand and AT&T, Sprint, and/or T-Mobile on the
`other hand regarding preparation, filing, control, or funding of the
`IPR.
`
`6. Copies of the engagement and/or retainer agreements between
`Dentons U.S. LLP and Petitioner, AT&T, Sprint, and T-Mobile.
`
`7. Identification of any communication between Petitioner on the
`one hand and AT&T, Sprint, and/or T-Mobile on the other hand not
`reduced to a tangible form and not otherwise identified in any
`document or thing produced in response to Document Requests for
`Production Nos. 1-6, in which (i) indemnity, (ii) the preparation,
`filing, or funding of the IPR, or (iii) control or funding of the IPR was
`discussed. For any such communication, describe the topic, the
`individuals between whom the communications occurred, and the
`approximate date of the communication.
`8. Deposition of individuals in the employ or control of
`Petitioner that authored or received documents or things
`produced in response to Document Requests Nos. 1-6 or who
`were identified in response to the Interrogatory.
`
`Mot. 1; Ex. 2004, 4–5.
`
`ANALYSIS
`Patent Owner seeks discovery of certain indemnification agreements
`and joint defense/common interest agreements, communications, payments
`or payment obligations between Petitioner, AT&T, T-Mobile, and Sprint,
`
`3
`
`
`
`IPR2014-00199
`Patent 6,771,970 B1
`
`
`which Patent Owner asserts are relevant to show AT&T, T-Mobile and
`Sprint’s involvement and/or funding of this IPR. Mot. 6–7. Patent Owner
`contends that the discovery requests are “necessary in the interest of justice,”
`and meets the first of five factors set forth in Garmin v. Cuozzo because
`Patent Owner can demonstrate more than a mere possibility and a mere
`allegation that useful discovery will be found. Id. at 6 (citing 35 U.S.C.
`§ 316(a)(5); Garmin Int’l, Inc. v. Cuozzo Speed Techs. LLC, IPR2012-
`00001, Paper 26, slip op. at 6–7 (March 5, 2013). Patent Owner asserts that
`discovery is based on “the admitted existence of indemnification obligations
`. . . and joint defense/common interest agreements.” Id. at 7 (citing Ex.
`2009, 4; Ex. 2010, 12–15, 26–27); see id. at 2–5. Patent Owner further
`contends that each discovery request seeks information related to the factors
`concerning real party-in-interest/privy set forth in the Office Patent Trial
`Practice Guide, 77 Fed. Reg. 48,756-773, 48,759–60 (Aug. 14, 2012) and In
`re Guan, Control No. 95/001,045, Decision Vacating Filing Date at 8 (Aug.
`25, 2008); factors such as “sole discretion,” “control,” and funding. Id. at 7–
`8. Patent Owner further argues that the fact that Petitioner, AT&T,
`T-Mobile, and Sprint share counsel supports a finding of privity where an
`indemnification agreement and joint defense agreement are also present. Id.
`at 8 (citing Asahi Glass Co. v. Toledo Eng’g Co., 505 F.Supp. 2d 423, 436
`(N.D. Ohio 2007).
`According to the first Garmin factor, a party should already be in
`possession of evidence tending to show beyond speculation that in fact
`something useful will be uncovered. Garmin at 6–7. The discovery-seeking
`party only needs to set forth a threshold amount of evidence tending to show
`that the discovery it seeks factually supports its contention. See id. at 8-9.
`
`4
`
`
`
`IPR2014-00199
`Patent 6,771,970 B1
`
`
`Something “useful” does not mean merely “relevant”, but means something
`favorable in substantive value to a contention of the party moving for
`discovery. Id. at 7-8.
`
`We are not persuaded that Patent Owner’s evidence of shared counsel
`among Petitioner, AT&T, T-Mobile, and Sprint, and the “admitted existence
`of indemnification obligations . . . and joint defense/common interest
`agreements” demonstrates beyond speculation that something useful will be
`uncovered and will factually support its contention that the Petition fails to
`identify all real parties-in-interest, as required by 35 U.S.C. § 312(a)(2).
`Instead of discussing real parties-in-interest, as pointed out by Petitioner
`(Opp. 4–5, 7), Patent Owner’s Motion focuses on privity. As noted by
`Petitioner, “[t]he notion of ‘privity’ is more expansive, encompassing parties
`that do not necessarily need to be identified in the petition as ‘a real party-in-
`interest.’” Opp. 5 (quoting Office Patent Trial Practice Guide at 48,759).
`Patent Owner’s evidence may demonstrate that something useful will be
`uncovered that factually supports a finding of privity based on the retention
`of shared counsel, and the existence of indemnification agreements, and
`joint defense agreements in accordance with Asahi Glass. However, since
`the notion of privity is more expansive than real party-in-interest, Patent
`Owner’s evidence is not sufficient with respect to the issue of real party-in-
`interest.
`Whether a party who is not a named participant constitutes a real
`party-in-interest to a proceeding is a highly fact-dependent question. Office
`Patent Trial Practice Guide, 77 Fed. Reg. at 48,759 (citing Taylor v. Sturgell,
`553 U.S. 880 (2008); 18A Charles Alan Wright, Arthur R. Miller & Edward
`H. Cooper, Federal Practice & Procedures §§ 4449, 4451 (2d ed. 2011)).
`
`5
`
`
`
`IPR2014-00199
`Patent 6,771,970 B1
`
`
`The Office Patent Trial Practice Guide provides guidance regarding factors
`to consider in determining whether a party is a real party-in-interest. Id.
`One important consideration is whether a non-party exercises, or could have
`exercised, control over a party’s participation in the proceeding. Id. An
`example justifying the real party-in-interest label is a party that funds and
`directs and controls an IPR petition or proceeding. Id. at 48,760. Patent
`Owner’s evidence of shared counsel by Petitioner, AT&T, T-Mobile, and
`Sprint, and the “admitted existence of indemnification obligations . . . and
`joint defense/common interest agreements” does not demonstrate beyond
`speculation that something useful will be uncovered regarding AT&T’s,
`T-Mobile’s, and Sprint’s funding, direction, control, or ability to exercise
`control of Petitioner’s participation in this inter partes review proceeding.
`Consideration of the first Garmin factor weighs against granting
`Patent Owner’s Motion for Additional Discovery.
`Patent Owner further asserts that the requested discovery meets the
`fifth Garmin factor because that the requested discovery is narrowly tailored
`and not overly burdensome to answer. Mot. 12. Patent Owner contends that
`any alleged financial, human resources, or time burden on Petitioner should
`be negligible based on Petitioner’s previous conditional agreement to
`produce documents. Id. at 12 (citing Ex. 2009, 4).
`According to the fifth Garmin factor, requests must not be overly
`burdensome to answer, given the expedited nature of inter partes review.
`Garmin at 7, 14. Burdens include financial, human resources, and meeting
`the time schedule of inter partes review. Id. Garmin additionally
`recommends that requests should be sensible and reasonably tailored
`according to a genuine need. Id.
`
`6
`
`
`
`IPR2014-00199
`Patent 6,771,970 B1
`
`
`Petitioner counters that Patent Owner’s Document Requests 1 through
`3 are not reasonably calibrated to lead to the discovery of useful information
`because the requested discovery covers information related to the irrelevant
`issue of privity. Opp. 11. Petitioner further argues that argues Document
`Requests 1 through 3 impose an undue burden because they additionally ask
`for “[a]ll . . . communications about indemnification by and between
`Petitioner and [AT&T, Sprint, and T-Mobile]” without providing any basis
`to establish that the requested communications contain any useful
`information. Id. at 11–12. Petitioner contends that the documents requested
`in Document Request 4 are likely privileged and not discoverable.
`Petitioner further contends that Document Request 4 is burdensome because
`it expands the scope to include “[a]ll . . . communications about the joint
`defense and/or common interest agreements,” without providing a basis to
`establish that the requested communications will lead to useful information.
`Id. at 12. Petitioner asserts that Document Request 5 is overly broad
`because it seeks privileged information which is not discoverable due to the
`proposed instructions defining Petitioner to include Petitioner’s attorneys.
`Id. at 12–13. Petitioner further argues that Document Requests 5 and 6
`represent an undue burden on Petitioner because Patent Owner does not
`establish a basis for intruding in the attorney client relationship and is not
`reasonably calibrated to lead to useful information. Id. at 13. Petitioner
`argues that the Interrogatory is excessively broad and overreaching because
`it encompasses a large number of communications including
`communications about indemnification for liability arising from any possible
`source, and is not time-limited. Id. Lastly, Petitioner argues that the Notice
`of Deposition is overly burdensome for the following reasons: (1) there is
`
`7
`
`
`
`IPR2014-00199
`Patent 6,771,970 B1
`
`
`no limit on the number of persons who can be deposed, and (2) producing
`large numbers of Petitioner’s employees for deposition, preparing them, and
`defending their testimony would create an enormous disruption of
`Petitioner’s business, and potentially generate enormous attorney fees; and
`(3) the scope of the subject matter to be covered by the proposed depositions
`is unspecified. Id. at 14.
`We agree with Petitioner’s arguments that the scope of Patent
`Owner’s requested discovery is overly broad and burdensome contrary to
`Patent Owner’s assertions that it is narrowly tailored and negligibly
`burdensome. Moreover, and not addressed by the parties, the requested
`discovery may place a significant burden on meeting the time schedule of
`inter partes review. See Garmin at 7; see also Changes to Implement Inter
`Partes Review Proceedings, Post-Grant Review Proceedings, and
`Transitional Program for Covered Business Methods, Fed. Reg. 48,680,
`48,719 (Aug. 14, 2012) (explaining the interest of justice standard is
`consistent with the considerations of 35 U.S.C. § 316(b) including the
`efficient administration of the Board, and the Board’s ability to complete
`timely trials). We note that proceedings in this inter partes review are no
`longer in the preliminary stage. Review was instituted nearly three months
`ago on May 9, 2014 (IPR2014-00199, Paper 18).
`Consideration of the fifth Garmin factor weighs against granting
`Patent Owner’s Motion for Additional Discovery.
`As to the remaining Garmin factors, Patent Owner makes the
`following assertions: (1) the requested discovery does not seek litigation
`positions and the underlying factual basis (Mot. 9); (2) the instructions are
`easily understandable (id. at 11) and (3) Patent Owner has no ability to
`
`8
`
`
`
`IPR2014-00199
`Patent 6,771,970 B1
`
`
`generate equivalent information by other means (id. at 10–11). Petitioner
`counters that Patent Owner has alternative means for obtaining the requested
`discovery. Opp. 9–11. We agree that Patent Owner’s requested discovery
`does not seek litigation positions and the underlying factual basis, and
`includes easily understandable instructions. However, we take no position
`regarding whether Patent Owner has the ability to generate equivalent
`information by other means, as Patent Owner’s ability appears to be
`dependent upon the ongoing proceedings in the related district court
`litigations. See Mot. 10–11; Opp. 9–11.
`Upon weighing the five Garmin factors for determining when
`additional discovery satisfies the “necessary in the interest of justice”
`standard under 35 U.S.C. § 316(a)(5), we determine that Patent Owner’s
`requested discovery set forth in its Motion is not necessary in the interest of
`justice.
`
`ORDER
`
`It is
` ORDERED that Patent Owner’s Motion for Additional Discovery is
`denied.
`
`
`
`
`
`
`
`
`
`
`
`9
`
`
`
`IPR2014-00199
`Patent 6,771,970 B1
`
`PETITIONER:
`Mark L. Hogge
`Scott W. Cummings
`DENTONS US LLP
`mark.hogge@dentons.com
`scott.cummings@dentons.com
`
`PATENT OWNER:
`Thomas Engellenner
`Reza Mollaaghababa
`Andy Chan
`PEPPER HAMILTON LLP
`engellennert@pepperlaw.com
`mollaaghababar@pepperlaw.com
`chana@pepperlaw.com
`
`
`
`
`
`
`
`
`
`
`
`
`10
`
`
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