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 ALAN KESSLER
`
`
`___________________________
`
`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 ALAN KESSLER
`
`
`
`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 Alan Kessler.
`
`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 p. 6.
`
`Patent Owner, however,
`
`improperly uses the observations as a vehicle to
`
`supplement the arguments in its Patent Owner’s 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. Kessler’s Declaration and others,
`
`or reach unwarranted inferences from the cited testimony of Alan Kessler in view
`
`of other testimony of Mr. Kessler herein that has either been omitted or ignored by
`
`Patent Owner.
`
`1
`
`
`
`1.
`
`Response to Observations 1 through 4 – The testimony cited by Patent
`
`Owner is redundant to testimony in Kessler’s Declaration. See Ex. 1028, Kessler
`
`Decl. at ¶¶ 1-7, 12.
`
`2.
`
`Response to Observations 5-7 – Patent Owner incorrectly asserts that
`
`this testimony demonstrates that PSC motors and ECM motors operate in separate
`
`submarkets, and that ECM motors are more quiet and efficient. First, the fact that
`
`a PSC motor lacks certain features of an ECM motor does not necessarily mean
`
`that the motors do not compete in the same market. Both Mr. Kessler and other
`
`witnesses have clearly and unequivocally testified that the motors compete and
`
`should be considered when defining the proper market. See Ex. 1028, Kessler
`
`Decl. at ¶¶ 12-15, 31.
`
`Significantly, Patent Owner never asked Kessler whether these motors
`
`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.
`
`Patent Owner is improperly attempting to use this observation as a vehicle to
`
`supplement arguments it could have raised in its Patent Owner Response or could
`
`have asked the witness to provide. Broad Ocean objects to this misuse of the
`
`observation.
`
`See PTAB Trial Practice Guide, 77 Fed. Reg. 48756, 48768.
`
`Specifically, Nidec could have argued that there exists this submarket for these
`
`motors in its Response and that one should only consider ECM motors and the
`
`2
`
`
`
`reasons behind that position at that time. Patent Owner did not do so, and it is too
`
`late to do so by way of Patent Owner Observations. Thus, Nidec should not now
`
`be allowed to shore-up its Response with points it could have raised then. 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.”).
`
`3.
`
`Response to Observations 8-15 – Patent Owner claims that
`
`this
`
`testimony demonstrates that PSC motors and ECM motors operate in separate
`
`submarkets. The fact that an OEM specifically requires that an ECM motor be used
`
`does not necessarily mean that ECM motors do not compete with other motors.
`
`Both Mr. Kessler and other witnesses have clearly and unequivocally testified that
`
`ECM and PSC motors compete. See Ex. 1028, Kessler Decl. at ¶¶ 12-15, 31.
`
`Patent Owner failed to ask Kessler whether ECM motors, as opposed to other
`
`blower motors, operate in separate submarkets. Instead, Patent Owner now wants
`
`the Board to draw inferences that are nowhere supported in the record.
`
`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 a submarket for ECM motors and could have supported that position with
`
`3
`
`
`
`timely elicited evidence. Patent Owner failed to do so and it cannot now be
`
`allowed to add new arguments to its Response, especially arguments based on
`
`evidence it failed to even elicit from the witness. Because Nidec failed to ask in
`
`how many instances Rheem required an ECM motor, Patent Owner’s strained
`
`observation regarding Rheem’s testimony should be discounted.
`
`4.
`
`Response to Observations 16 and 17 – Petitioners do not dispute that
`
`Rheem and other OEMs promote that their systems are quiet. But of course, that
`
`does not equate their ECM-only systems as being the quietest systems. Nor does
`
`that fact necessitate that PSC systems are not as quiet.
`
`5.
`
`Response to Observation 18 – Kessler does not dispute that Nidec
`
`claimed it could detect a 2dB sound difference. But that is not the issue, as Kessler
`
`has pointed out in his declaration. In the context of blower motor operation, the
`
`fact is that a 2dB noise decrease is of no consequence to users of such systems. Ex.
`
`1028, Kessler Decl. at ¶ 24.
`
`6.
`
`Response to Observation 19 – This observation is an overstatement by
`
`Patent Owner.
`
`In essence, all it demonstrates is that Kessler believes that one
`
`should not apply the same rate across the board. Of course, Nidec failed to ask Mr.
`
`Kessler whether a lower rate or a higher rate should be applied, or how one would
`
`go about calculating a more precise set of numbers. Moreover, Mr. Hofmann
`
`testified that he used the most reliable independent basis for performing his
`
`4
`
`
`
`calculations, something that Nidec failed to do and which Kessler himself
`
`criticized. Ex. 1028, Kessler Decl. at ¶ 31 (“It appears that based on my knowledge
`
`that Bokhart and Nidec overstate their market share”). Moreover, Nidec failed to
`
`ask how much of an impact, if any, air conditioning only installations have on the
`
`entire HVAC market. Nor does Nidec take into account
`
`that split system
`
`installations that include both furnace and air conditioning units are on par with
`
`furnace system only installations. Patent Owner’s observations in this regard are
`
`nothing more than a red herring.
`
`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
`
`5
`
`
`
`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 ALAN KESSLER 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 ALAN KESSLER 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 1810625v.2
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