UNITED STATES PATENT AND TRADEMARK OFFICE
`___________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`________________________________________________________________
`
`ZHONGSHAN BROAD OCEAN MOTOR CO., LTD.;
`BROAD OCEAN MOTOR LLC; and
`BROAD OCEAN TECHNOLOGIES, LLC
`
`Petitioners
`
`v.
`
`NIDEC MOTOR CORPORATION
`
`Patent Owner
`
`U.S. Patent No. 7,626,349
`Case No. IPR2014-01121
`
`PETITIONERS’ RESPONSE TO PATENT OWNER’S MOTION FOR
`OBSERVATION REGARDING CROSS-EXAMINATION OF REPLY
`WITNESS GE HU
`
`HOU 1810624v.2
`
`
`___________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`________________________________________________________________
`
`ZHONGSHAN BROAD OCEAN MOTOR CO., LTD.;
`BROAD OCEAN MOTOR LLC; and
`BROAD OCEAN TECHNOLOGIES, LLC
`
`Petitioners
`
`v.
`
`NIDEC MOTOR CORPORATION
`
`Patent Owner
`
`U.S. Patent No. 7,626,349
`Case No. IPR2014-01121
`
`PETITIONERS’ RESPONSE TO PATENT OWNER’S MOTION FOR
`OBSERVATION REGARDING CROSS-EXAMINATION OF REPLY
`WITNESS GE HU
`
`HOU 1810624v.2
`
`
`
`Pursuant to the Board’s January 21, 2015 Scheduling Order (Paper 21),
`
`Petitioners Zhongshan Broad Ocean Motor Co., Ltd. Broad Ocean Motor LLC, and
`
`Broad Ocean Technologies, LLC (collectively, “Broad Ocean” or “Petitioners”)
`
`provide the following Response to Patent Owner’s Motion for Observation
`
`Regarding Cross-Examination of Reply Witness Ge Hu.
`
`As the Board stated in this action, the purpose of observations is to “draw
`
`the Board’s attention to relevant cross-examination testimony of a reply witness,
`
`since no further substantive paper is permitted after the reply.” Paper 21 at 6.
`
`Patent Owner, however,
`
`improperly uses the observations as a vehicle to
`
`supplement the arguments in its Patent Owner Response. Broad Ocean objects to
`
`this misuse of the observations. See PTAB Trial Practice Guide, 77 Fed. Reg.
`
`48756, 48768 (“An observation (or response) is not an opportunity to raise new
`
`issues, re-argue issues, or pursue objections.”)
`
`Further, as discussed in the individual responses below, Patent Owner’s
`
`observations either are redundant in view of Mr. Hu’s Declaration and others, or
`
`reach unwarranted inferences from the cited testimony of Ge Hu in view of other
`
`testimony of Mr. Hu herein that has either been omitted or ignored by Patent
`
`Owner.
`
`1.
`
`Response to Observations 1 and 2 – The testimony cited by Patent
`
`Owner is redundant of testimony in Hu’s Declaration. See Ex. 1020, para. 1.
`
`1
`
`
`
`2.
`
`Response to Observations 3-4 -- Patent Owner incorrectly asserts that
`
`this testimony demonstrates that PSC motors and ECM motors operate in separate
`
`submarkets, and that ECM have advantages over the PSC motors “they replaced.”
`
`First, just because a PSC motor lacks certain features of an ECM motor does not
`
`necessarily mean that these motors do not compete. Both Mr. Hu and other
`
`witnesses have clearly and unequivocally testified that
`
`the motors compete.
`
`Significantly, Patent Owner failed to ask Hu whether these motors do, in fact,
`
`operate in separate submarkets.
`
`Instead, Patent Owner now wants the Board to
`
`infer “evidence” that it failed to elicit from the witness when it had the opportunity.
`
`Moreover, Patent Owner’s observation takes Mr. Hu’s testimony out of context by
`
`cherry picking excerpts from the transcript. For example, Mr. Hu was describing
`
`his work on a four wire motor project known as ComfortNet while he was at
`
`Goodman that would allow Goodman to compete with others selling a high
`
`efficiency system:
`
`Q. Now, the next sentence in your declaration says, the
`purpose of this project was to develop a four wire
`communicating EC, electronically commutated, motor in
`order to be able to offer a product similar to what
`Goodman's competitors were offering at the time.
`Q. Do you see that?
`A. Yes.
`
`2
`
`
`
`the project was known as
`Q. And then you say,
`ComfortNet.
`Was your
`total
`involvement with
`ComfortNet related to the development of the controller
`boards for the product?
`A. My involvement was not limited to the control
`boards, but also the qualification of an EC motor for
`those control boards and -- yes, that's -- yes, that's what I
`meant, more than the control boards.
`Q. And when you say qualification for EC motor, what
`do you mean?
`A.
`I had to run a series of tests in order to make sure the
`new motor met the specifications. And once it did, it was
`qualified to be used in production.
`Ex. 2030, page 14, line 3-page 15, line 23.
`
`Then Mr. Hu explained that Goodman had considered using a PSC motor in this
`
`system but then decided to use an ECM motor.
`
`Q. And the ComfortNet project was intended to be used
`only with an electronically commutated motor, correct?
`A. When a project was first put together considered PSC
`motor as an option, though we didn't go to production
`with it for indoor motors.
`Ex. 2030, page 16, line 23-page 17, line 3.
`
`Finally, Patent Owner is improperly attempting to use this observation as a
`
`vehicle to supplement arguments it could have raised in its Patent Owner
`
`Response. Broad Ocean objects to this misuse of the observation. See PTAB Trial
`3
`
`
`
`Practice Guide, 77 Fed. Reg. 48756, 48768. Specifically, Nidec could have argued
`
`that there exists this submarket for these motors and could have supported that
`
`position supposedly with evidence in its Response. Patent Owner failed to do so,
`
`and it is too late to do so by way of Patent Owner’s Motion for Observation. Thus,
`
`Patent Owner should not now be allowed to shore-up its Response with points it
`
`could have raised then.
`
`Id. at 48768 (“An observation (or response) is not an
`
`opportunity to raise new issues, re-argue issues, or pursue objections.”).
`
`3.
`
`Response to Observation 5 -- Patent Owner claims that this testimony
`
`demonstrates that PSC motors and ECM motors operate in separate submarkets,
`
`and that it is contrary to previous Hu testimony. Broad Ocean has explained the
`
`fallacy and impropriety of Patent Owner’s “submarket” observation with respect to
`
`Responses to Observations 3-4.
`
`With respect to any alleged inconsistency in Mr. Hu’s testimony, Patent
`
`Owner fails to point out
`
`that
`
`in Exhibits 2034 and 2035 (Goodman internal
`
`documents related to the blower motor projects) the use of a PSC motor was, in
`
`fact, considered at some point in time. See Ex. 1020, paras. 4-6.
`
`4.
`
`Response to Observation 6 -- Broad Ocean does not dispute this
`
`Observation. However, in testimony right after the quoted testimony in the
`
`Observation, Hu did describe how he obtained information as to how Goodman
`
`chose the Nidec motor:
`
`4
`
`
`
`Q. You say, I was informed that at the beginning of that
`sentence. Who told you that?
`A. You know, I work and participate in various meetings
`throughout the project. After meetings, we had, you
`know, office chit-chats for this project. Among the
`people that I heard the news, I think the main director of
`purchasing was the one who told me.
`Q. And who was the then director of purchasing?
`A. George Clowtis.
`Exhibit 2030, page 20, line 15-line 25.
`
`As to Patent Owner’s argument with respect to lack of foundation, that is
`
`incorrect, as noted in Broad Ocean’s Response to Nidec’s Motion to Exclude (in
`
`which Nidec claims this exhibit fails to meet the requirements of a business
`
`record), Hu did lay a sufficient foundation. See, Petitioner’s Response to Patent
`
`Owner’s Motion to Exclude.
`
`5.
`
`Response to Observation 8 -- As noted above, Patent Owner’s
`
`position is incorrect, for Hu did lay a sufficient foundation.
`
`6.
`
`Response to Observation 9 -- This testimony is irrelevant to the issue
`
`of how Goodman decided to use a Nidec motor.
`
`It simply describes how Hu
`
`obtained this document. In addition, Hu did lay a sufficient foundation.
`
`5
`
`
`
`7.
`
`Response to Observation 10 -- Broad Ocean does not dispute that Hu
`
`did not draft this document. But this testimony has nothing to do with Goodman’s
`
`process for purchasing Nidec motors.
`
`8.
`
`Response to Observation 11 -- Broad Ocean does not dispute that Hu
`
`cannot recall if he had any input in this document. But this testimony has nothing
`
`to do with Goodman’s process for purchasing Nidec motors.
`
`9.
`
`Response to Observations 12 and 13 -- As noted above, this testimony
`
`is irrelevant to the issue of how Goodman decided to use a Nidec motor. It simply
`
`describes how Hu obtained this document.
`
`In addition, Hu did lay a sufficient
`
`foundation.
`
`10.
`
`Response to observation 14 -- Patent Owner claims that this tesimony
`
`is relevant to Hu’s commercial success testimony but fails to point out where Hu
`
`ever takes the position that a 20 percent market share is “dominant” (Hu never took
`
`this position in either of his declaration or his testimony). In fact, Hu stated he had
`
`no opinion as to what constitutes dominant market share because as an engineer
`
`who understandably has no knowledge of this. See Ex. 2030, page 28, lines 5-12.
`
`Finally Nidec improperly tries to equate the market motor manufacturers like
`
`Nidec and Broad Ocean (which have just three competitors) to the OEM market
`
`(which has at least seven large players). This is clearly not an apples to apples
`
`comparison because a 20 percent market share could be dominate in a seven-player
`
`6
`
`
`
`market but not in a three player market. Moreover, Broad Ocean objected to this
`
`line of questioning at Hu’s deposition. That objection should be upheld.
`
`11.
`
`Response to Observation 15 -- As discussed above, Hu testified that
`
`Goodman initially considered using a PSC motor but later decided that an ECM
`
`motor would be more approriate.
`
`12.
`
`Response to Observations 16 and 17 -- Patent Owner claims Hu
`
`misinterpreted section 4.16 of Exhibit 1034. That is incorrect. What Hu testified
`
`to in his declaration is that this is the range that airflow should be tested in order to
`
`determine if that met Goodman’s requirements. Ex. 1020, paras. 4-6.
`
`13.
`
`Response to Observation 18 -- Broad Ocean does not dispute the
`
`observation that Goodman required that the motor be quiet. However, Broad
`
`Ocean notes that there is no testimony that a motor need to be the quietest.
`
`14.
`
`Response to Observation 19 -- This is a redundant observation. There
`
`is no dispute that Hu was not personally involved in the decision-making process at
`
`Goodman. But as shown above, Hu explained how he gained that knowledge in
`
`the conversations with other employees in the normal course of business.
`
`15.
`
`Response to Observation 20 -- Broad Ocean does not dispute the
`
`observation that Goodman required the motor be quiet. However, Broad Ocean
`
`notes that there is no testimony that a motor be the quietest.
`
`7
`
`
`
`16.
`
`Response to Observation 21 -- As noted above, this testimony is
`
`irrelevant to the issue of how Goodman decided to use a Nidec motor. It simply
`
`describes how Hu obtained this document.
`
`In addition, Hu did lay a sufficient
`
`foundation.
`
`17.
`
`Response to Observation 22 -- As discussed above, Hu testified that
`
`initially Goodman considered using a PSC motor but later decided that an ECM
`
`motor would be more appropriate. This testimony does not demonstrate that the
`
`motors occupied separate submarkets.
`
`In addition, Patent Owner is improperly
`
`attempting to use this observation as a vehicle to supplement arguments it could
`
`have raised in its Patent Owner Response. Broad Ocean objects to this misuse of
`
`the observation. See PTAB Trial Practice Guide, 77 Fed. Reg. 48756, 48768.
`
`Nidec could have argued that there exists this submarket for these motors and
`
`could have supported that position supposedly with evidence. Patent Owner failed
`
`to do so and it is too late to make this argument in the context of a Motion for
`
`Observation. Thus, Patent Owner cannot now be allowed to shore-up its Response
`
`with points it could have raised then. Id. at 48768 (“An observation (or response) is
`
`not an opportunity to raise new issues, re-argue issues, or pursue objections.”).
`
`Finally, with respect to any alleged inconsistent testimony, Patent Owner fails to
`
`point out that in Exhibits 1034 and 1035 (Goodman internal documents related to
`
`motor projects) the use of a PSC motor was considered at some point in time.
`
`8
`
`
`
`18. Response to Observation 23, 24, 25 and 26 –Patent Owner’s
`
`observations are redundant in view of the cited testimony.
`
`Dated: September 25, 2015
`
`Respectfully submitted,
`
`/s/ Steven F. Meyer
`Steven F. Meyer (Reg. No. 35,613)
`Charles S. Baker (pro hac vice)
`LOCKE LORD LLP
`Three World Financial Center
`New York, New York 10281-2101
`
`9
`
`
`
`Certificate of Service
`
`Pursuant to 37 C.F.R. §42.6(e) and 37 C.F.R. §42.105(b), the undersigned
`hereby certifies that on September 25, 2015, a complete and entire copy of the
`foregoing PETITIONERS’ RESPONSE TO PATENT OWNER’S MOTION
`FOR OBSERVATION REGARDING CROSS-EXAMINATION OF REPLY
`WITNESS GE HU was electronically served in its entirety on the Patent Owner of
`record
`(as
`agreed
`upon
`by
`counsel)
`at
`sbrown@hoveywilliams.com,
`mwalters@hoveywilliams.com, and litigation@ hoveywilliams.com.
`
`the undersigned certifies that on September 25, 2015, a
`Additionally,
`complete and entire copy of the foregoing PETITIONERS’ RESPONSE TO
`PATENT OWNER’S MOTION FOR OBSERVATION REGARDING
`CROSS-EXAMINATION OF REPLY WITNESS GE HU was electronically
`served
`on
`the
`Patent Owner’s
`below-listed
`counsel
`of
`record
`at
`jschwent@thompsoncoburn.com,
`djinkins@thompsoncoburn.com,
`and
`litigation Nidec Motor
`the
`syoo@thompsoncoburn.com,
`in
`co-pending
`Corporation
`v. Broad Ocean Motor LLC et
`al., Civil Action No.
`4:13-CV-01895-JCH (E.D. Mo.), as agreed upon by the parties.
`
`Dated: September 25, 2015
`
`/s/ Charles S. Baker
`Steven F. Meyer (Reg. No. 35,613)
`Charles S. Baker (pro hac vice)
`LOCKE LORD LLP
`Three World Financial Center
`New York, New York 10281-2101
`
`Attorneys for Petitioners Zhongshan
`Broad Ocean Motor Co., Ltd.;
`Broad Ocean Motor LLC; and
`Broad Ocean Technologies, LLC
`
`HOU 1810624v.2
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