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`____________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`
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`____________
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`ORACLE CORPORATION,
`NETAPP, INC. and
`HUAWEI TECHNOLOGIES CO., LTD.
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`Petitioners,
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`v.
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`CROSSROADS SYSTEMS, INC.
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`Patent Owner.
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`____________
`
`Case IPR2014-01207
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`U.S. Patent No. 7,051,147
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`____________
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`PETITIONERS’ MOTION TO EXCLUDE
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`I.
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`RELIEF REQUESTED
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`Pursuant to 37 C.F.R. § 42.64(c), Petitioners move to exclude all of Exs.
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`2300-2304, 2306-2311, 2312-2323, 2035-36, 2043¶6, 2044-45, and 2050.
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`Petitioners timely objected to these same exhibits on June 2, 2015. See Ex. 1236.
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`II.
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`STATEMENT OF REASONS FOR THE RELIEF REQUESTED
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`This motion is directed to (A) a chronology of events associated with the
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`alleged prior invention (Ex. 2311), (B) the laboratory notebooks and related
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`development documents referenced therein (Ex. 2300-2304, 2306-2310 and 2312-
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`2323), (C) the table purporting to summarize patent licenses (Ex. 2050), (D) the
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`documents relating to sales of routers and bridges (Ex. 2044-45) together with Mr.
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`Bianchi’s associated opinion (Ex. 2043 ¶6), and (E) the alleged industry awards
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`(Exs. 2035-36). Each of the requests to exclude and the basis for doing so is
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`addressed below.
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`A. Exhibit 2311 (Chronology Table)
`According to Patent Owner’s counsel, “Exhibit 2311 is a chronology that
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`Crossroads' lawyers have put together based on the documents referenced in
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`Exhibit -- or Paragraph 2 of [Bianchi’s] declaration [Ex. 2324].” Ex. 1221 at 262.
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`Patent Owner does not offer any declaration of its counsel to identify who prepared
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`the chronology or can attest to its accuracy. Nor does Patent Owner point to any
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`testimony from which the accuracy of the chronology could be determined. The
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`only way to confirm the accuracy of the chronology is to review the individual
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`1
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`documents referenced therein. Because each of the documents referenced in the
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`chronology is inadmissible (see discussion infra Section B), the chronology
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`likewise is inadmissible.
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`Exhibit 2311 also contains hearsay not within any recognized exception.
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`The statements in the “Event” column of the table improperly characterize the
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`evidence. For example, Exhibits 2300 to 2302 purport to demonstrate “conception
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`of access controls and virtual local storage.” Ex. 2311 at 1. The statements set
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`forth in the table, however, are unsworn hearsay statements and do not fall within
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`any recognized exception to the hearsay rule.
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`Further, Exhibit 2311 constitutes an improper attempt to incorporate by
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`reference the arguments set forth therein. The Patent Owner’s Response brief
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`spans the entirety of the allotted sixty pages. Paper 29. The chronology set forth
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`at Exhibit. 2311 consists of an additional seven pages and includes arguments in
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`the form of characterizing “Events” as being proven by “Evidence” identified in
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`the table. Patent Owner’s Response also fails to reference any specific page
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`citations to Exhibits 2312-2313, 2316- 2320; rather, those citations are provided
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`only in Ex. 2311. For this additional reason Exhibit 2311 constitutes an improper
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`attempt to incorporate by reference arguments into the Patent Owner’s response.
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`See 37 C.F.R. § 42.6(a)(3).
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`2
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`B.
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`Exhibits 2300-2304, 2306-2310 and 2312-2323
`(Documents Offered to Show Prior Invention)
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`Patent Owner has the burden of establishing that the exhibits fall within the
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`Rule 803(6) exception to the hearsay rule. Wojciak v. Nishiyama, 61 USPQ 2d
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`1576, 1582 (BPAI 2001). Patent Owner “must establish each of the eight elements
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`necessary to invoke the Rule 803(6) exception”:
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`A [1] *** report *** or data compilation, in any form, of
`[2] acts, events, conditions, opinions, or diagnoses,
`[3] made at or near the time by, or
`[4] from information transmitted by, a person with knowledge, if
`[5] kept in the course of a regularly conducted business activity,
`and
`[6] if it was the regular practice of that business activity to make
`the report *** or data compilation,
`[7] all as shown by the testimony of the custodian or other
`qualified witness, unless
`[8] the source of information or the method or circumstances of
`preparation indicate lack of trustworthiness.
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`Id.
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`Generally laboratory notebooks and related documentation of prior invention
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`do not qualify as Rule 803(6) records of regularly conducted business activity. As
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`the Board recently noted in Corning, “[a]pplicable Federal Circuit and Board
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`precedent declines to invoke a Rule 803(6) exception to laboratory notebook
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`documents . . . .” IPR2013-00043, Paper 97 at 5 (citing Alpert v. Slatin, 305 F.2d
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`3
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`891, 895-96 (CCPA 1962)). The Board explained the underlying rationale in
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`Wojciak v. Nishiyama, 61 USPQ2d 1576, 1582 (BPAI 2001):
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`[A]s applied to laboratory notebooks or information copied
`therefrom, the discussion generally should take place through
`the testimony of the individual who recorded information in the
`notebook.
`Alpert v. Slatin similarly observed that:
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`Alpert has cited no authority to show that the [business record]
`rule is properly applicable to reports of scientific research and
`tests. We know of no authority for such a position and think
`such application of the rule would be both improper and
`unrealistic.
`305 F.2d at 895-96.
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`
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`Exhibit 2307 is representative of the documents offered by Patent Owner to
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`show prior invention. Exhibit 2307 has not been authenticated by a person with
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`first hand or personal knowledge of the document’s creation. Patent Owner offers
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`only the following generalized statement in the declaration of Brian Bianchi in an
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`improper attempt to authenticate and establish it as an 803(6) business record:
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`Exhibits 2307, 2308, 2309, 2312, 2314, 2316, 2317, 2318, 2319,
`2320, and 2321 are duplicate copies of Crossroads’ business records
`which were created or modified during the course of the Verrazano
`project. I am familiar with Crossroads’ practices regarding the
`creation, modification, and keeping of such documents through my
`employment with Crossroads, both at the time of the Verrazano
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`4
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`project and today. Each of these documents is a document created by
`Crossroads personnel during the regular course of business. . . .
`Ex. 2324 ¶2.
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`Crossroads did not hire Mr. Bianchi until June 1998, six months after the
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`latest of the events in question. Ex. 2043 ¶1. Because Crossroads was a start-up
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`company at that time, there is no objective reason to believe that its operations in
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`1997 matched those that existed in June of 1998, when Mr. Bianchi began working
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`at Crossroads. Ex. 1220 at 27:17 (“Well, we were a startup company.”)
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`Mr. Bianchi acknowledges, of course, that he has no personal knowledge of
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`any of the events that preceded his arrival at Crossroads. Ex. 1221 at 243:17-20.
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`He did not create, store, or supervise the creation or storage of any of the
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`documents referenced in his declaration. Ex. 1221 at 228:18-25. Indeed, Mr.
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`Bianchi had not even seen the documents referenced in his declaration prior to
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`2015, when they were first presented to him by Patent Owner’s counsel. Id. at
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`242:14-19; 231:23-232:25.
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`
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`Thus Patent Owner offers no testimony by any person involved with – or
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`with any sort of first-hand or personal knowledge relating to – the creation or
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`storage of Exhibit 2307. Patent Owner also offers no testimony from any person
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`who had seen or was aware of the document prior to 2015. Patent Owner likewise
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`offers no testimony of any person with personal knowledge of Crossroad’s record-
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`keeping practices in 1997.
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`5
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`Accordingly, Patent Owner has not carried its burden of demonstrating that
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`Exhibit 2307 is [1] a report, [3] made at or near the time by, or [4] from
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`information transmitted by, a person with knowledge, [5] kept in the course of a
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`regularly conducted business activity. (Elements of proof numbered as they are in
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`Wojciak, 61 USPQ2d at 1582) Patent Owner also has not met its burden of
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`establishing [6] that it was the regular practice of that business to make the report
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`in 1997, during the ordinary course of business. Lastly, Patent Owner has not
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`offered [7] the testimony of the custodian at the time the records were made. For
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`these reasons Exhibit 2307 has not been demonstrated to be authentic or within any
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`exception to the hearsay rule.
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`The foregoing analysis applies with equal force to the remainder of the
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`exhibits referenced in paragraph 2 of Exhibit 2324 (Bianchi’s declaration), namely,
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`Exhibits 2303, 2307, 2308, 2309, 2312, 2314, 2316, 2317, 2318, 2319, 2320,
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`2321, and 2323. Petitioners will now turn to additional admissibility issues which
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`are unique to one or more subsets of those exhibits.
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`Exhibits 2303 and 2323 are letters from patent counsel and thus cannot be
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`said to be records of business activity regularly conducted by Crossroads.
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`Moreover, Ex. 2323 refers to two enclosures but the exhibit includes only one.
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`This demonstrates that “the source of information or the method or circumstances
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`of preparation indicate lack of trustworthiness.” Wojciak, 61 USPQ2d at 1582.
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`6
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`Exhibit 2307 and 2308 are on their face documents prepared by Brian
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`Smith, president of a company named Infinity CommStor, LLC. Patent Owner
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`identifies no evidence demonstrating the role of Infinity CommStor or its
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`relationship, if any, with Crossroads. Patent Owner similarly fails to proffer any
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`testimony from Brian Smith, or even any declaration evidence identifying Mr.
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`Smith’s role, if any, in any alleged development. These exhibits lack any indicia of
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`authenticity and are inadmissible hearsay.
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`Exhibit 2312 allegedly depicts a “bare board” but its relevance to the
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`alleged development has not been explained. Patent Owner’s Response merely
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`contains the following citation to Ex. 2312: “Ex. 2312, 2314-2321 (various
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`Crossroads documents detailing work and progress on Verrazano project from
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`March through December 1997).” Resp. at 23-24. Ex. 2312 should be excluded as
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`inadmissible hearsay and as lacking demonstrated relevance. FRE 402.
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`Exhibits 2318 and 2321 bear no author’s name and Patent Owner provides
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`no testimonial evidence to remedy this deficiency. Patent Owner therefore cannot
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`be said to have met its burden to establish the authenticity of these exhibits.
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`Patent Owner’s Response does not contain any page citations for Exhibits
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`2312 or 2316- 2320; rather, those citations are provided only in Ex. 2311. These
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`exhibits should be excluded under FRE 401-402 for the additional reason that
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`Patent Owner failed to meaningfully discuss this exhibit in its Patent Owner
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`7
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`Response and use of this exhibit would constitute an improper incorporation by
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`reference. See 37 C.F.R. § 42.6(a)(3).
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`Petitioners now turn to the documents not specifically referenced in the
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`declaration of Mr. Bianchi. This group consists of Exhibits 2300-2302, 2304,
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`2306, 2310, 2313 and 2322.
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`Exhibits 2301, 2302, 2304, 2306 and 2310 are trial and deposition
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`transcripts from the Chaparral/Pathlight litigation, district court cases to which
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`Petitioners were not parties. Under FRE 804(b)(1), former testimony can be
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`admissible only upon a showing that the witness is unavailable as set forth in
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`804(a) and the testimony is “offered against a party who had — or, in a civil case,
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`whose predecessor in interest had — an opportunity and similar motive to develop
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`it by direct, cross-, or redirect examination.”
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`Patent Owner has made neither showing. Patent Owner does not even
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`assert, much less provide evidence that, Messrs. Hoese, Russell, Peterman or
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`Middleton are unavailable. Indeed, Mr. Middleton has provided affidavit
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`testimony in this proceeding on other issues. See Ex. 2305. Nor has Patent Owner
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`established that Oracle, NetApp or Huawei are successors-in-interest to the parties
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`against whom the testimony was being offered in those earlier cases. Petitioners
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`are not, in fact, successors-in-interest to Pathlight Technology, Inc. or Chaparral
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`Network Storage, Inc.
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`8
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`Exhibits 2300, 2313 and 2322 are purported invention disclosure and
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`laboratory notebook documents of Mr. Hoese. Patent Owner offers only
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`inadmissible evidence – hearsay testimony from another proceeding – to
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`authenticate Exhibit 2300 and identifies no testimony to authenticate Exhibits 2313
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`and 2322. Patent Owner’s Response points only to a passage from Exhibit 2301
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`(previous trial testimony of Mr. Hoese) that refers to Exhibit 2300. Resp. at 21.
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`Because Exhibit 2301 is inadmissible for the reasons set forth above, Patent Owner
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`has offered no admissible evidence to authenticate Exhibit 2300. As to Exhibits
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`2313 and 2322, Patent Owner’s Response identifies no evidence which even
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`purports to authenticate those exhibits. Some testimony related to Exhibits 2313
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`and 2322 is cited in Exhibit 2311, which also is inadmissible for the reasons set
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`forth above. Even if Exhibit 2311 were to be considered, the testimony cited
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`therein is inadmissible testimony from a prior proceeding as discussed above. Ex.
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`2311 (citing Exs. 2301, 2302 and 2306, hearsay testimony from earlier litigation).
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`Exhibits 2300, 2313 and 2322 thus have not been authenticated.
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`Exhibits 2300, 2313 and 2322 are also hearsay not within any recognized
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`exception. As noted above, “[a]pplicable Federal Circuit and Board precedent
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`declines to invoke a Rule 803(6) exception to laboratory notebook documents . . . .
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`.” IPR2013-00043, Paper 97 at 5. Patent Owner has not met its burden of
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`demonstrating that Ex. 2307 is a [1] report, [3] made at or near the time by, or [4]
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`9
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`from information transmitted by, a person with knowledge, [5] kept in the course
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`of a regularly conducted business activity. Wojciak , 61 USPQ 2d at 1582. Nor
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`has Patent Owner met its burden of showing [6] that it was the regular practice of
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`that business activity to make the report in 1997. Lastly, Patent Owner has not
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`offered [7] admissible testimony of the custodian at the time the records were
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`made.
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`Patent Owner’s response does not contain any page citations to Exhibit
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`2313; rather, those citations are provided only in Ex. 2311 (the attorney-prepared
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`chronology). Ex. 2313 should be excluded under FRE 401-402 since Patent
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`Owner failed to meaningfully discuss this exhibit in its Patent Owner Response.
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`Use of this exhibit now would be improper incorporation by reference. See 37
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`C.F.R. § 42.6(a)(3).
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`C. Exhibit 2050 (Schedule of License Agreements)
`Ms. Crane testifies that Exhibit 2050 is a “spreadsheet containing a schedule
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`of certain of Crossroads’ intellectual property settlement and license agreements.”
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`Ex. 2049 ¶49. The spreadsheet includes seven columns, the last two of which are
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`“Bates Label” and “Litigation?” Ex. 2050. According to Ms. Crane, “[t]he
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`“Litigation?” column indicates whether or not, to Crossroads’ knowledge,
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`Crossroads or the licensee ever filed a lawsuit regarding patents in the ‘972 patent
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`family.” Ex. 2049 ¶3.
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`10
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`Ms. Crane testified, however, that she undertook no effort to verify the
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`accuracy of the information set forth in the last two columns:
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`*
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`*
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`*
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`Ex. 1223 at 25:11, 34:21; see also id. at 28:4. Patent Owner has not offered any
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`declaration of counsel attesting to the accuracy of the information set forth in the
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`last two columns of Exhibit 2050. Ms. Crane further acknowledged that Exhibit
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`2050 was not a document prepared in the ordinary course of business. Ex. 1223 at
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`158:25-159:4.
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`For these reasons Exhibit 2050 should be excluded because it is
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`unauthenticated and hearsay not within any recognized exception.
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`11
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`D. Exhibits 2044-45 (Sales Information) and Ex. 2043 (Bianchi
`Declaration) ¶6
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`Mr. Bianchi testifies that Exhibit 2044 (Exhibit A to his declaration, Ex.
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`2043) comprises “tables containing Crossroads’ shipment and sales information for
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`its storage bridge and storage router products.” Ex. 2043 ¶2. That table
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`purportedly reflects the cumulative results of over 50 quarterly sales reports which
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`were prepared in a manner of which Mr. Bianchi had no knowledge. Ex. 1221 at
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`160:1-162:22. None of these sales reports were produced in this proceeding. The
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`charts contained in Exhibit 2045 were produced from the data in Exhibit 2044
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`using a pivot table which likewise was not produced in this proceeding. Id. at
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`166:3-5. Mr. Bianchi admitted that neither Exhibit 2044 nor Exhibit 2045 were
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`prepared in the ordinary course of Crossroads’ business. Id. at 163:24-164:10.
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`Exhibit 2044-45 thus should be excluded because they are unauthenticated and
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`constitute hearsay not within any recognized exception.
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`Moreover, any relevance of Exhibits 2044-45 is far outweighed by their
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`potential to mislead or confuse. These exhibits are presented as evidence of a sales
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`trend which allegedly suggests that customers preferred routers (which allegedly
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`had the claimed “access controls”) to bridges (which lacked them). Ex. 2043 ¶6.
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`Mr. Bianchi testified, however, that he did not even consider the effect of
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`competitive products – or their prices – on the sales of Crossroads’ bridge and
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`router products. Ex. 1221 at 108:1-24. Mr. Bianchi instead merely looked at
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`12
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`Crossroads’ own sales figures and completely ignored any effect of price or
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`competition on Crossroads’ sales. Id.
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`Mr. Bianchi further acknowledged that in forming his opinion he did not
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`consider any of the other factors that Crossroads believed could have impacted
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`bridge and router sales, including OEM endorsement, product reliability,
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`interoperability, customer service, technical support, brand awareness, ability to
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`meet delivery schedules, or strength of distribution channel. Ex. 1221 at 127:9-
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`129:16. Along those same lines, Mr. Bianchi did not consider the substantial
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`difference in features and functionalities (in addition to access controls) between
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`the Crossroads routers. As explained by Mr. Bianchi during his deposition, the
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`routers did not differ from the bridges only in that they included access controls;
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`rather, the routers also included various other features which “could have made the
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`router(s) more desirable than the bridge(s),” including tape recover, support for
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`hundreds of additional initiators, many more buffered tape writes, inquiry caching
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`and extended copy. Ex. 2046 at 3, Ex. 1221 at 101:24 to 102:6, see also 96:1 to
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`101:23.
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`The opinion set forth in paragraph 6 of the Bianchi declaration (i.e., “it is my
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`impression that the increase in router sales over time, and the corresponding
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`decrease in bridge sales, is due primarily to customer preference for a product
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`having access controls”) is an improper expert opinion and is premised solely upon
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`13
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`the foregoing inadmissible and unreliable evidence. Patent Owner has not even
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`attempted to qualify Mr. Bianchi as an expert competent to testify concerning
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`market demand for the products in question. See Ex. 2043. Even if Mr. Bianchi
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`had been qualified as an expert in that field, the Board has a duty to examine the
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`foundational materials used by an expert to determine whether the experts’
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`conclusions are logically supported by the materials. Sargon Enterprises, Inc. v.
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`University of Southern Cal., 55 Cal.4th 747 (2012). Here, an examination of the
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`supposed premise for Mr. Bianchi’s opinion reveals it to be unsupported
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`speculation. General Electric Co. v. Joiner, 522 U.S. 136, 140 (1997) (upholding
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`district court’s decision to grant summary judgement in part because it properly
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`excluded the deposition testimony of plaintiff's experts as “unsupported
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`speculation.”) Paragraph 6 of Mr. Bianchi’s declaration is bare conjecture that
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`lacks any analysis of the objective factors which bear on the matter and it should,
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`for that reason, be excluded.
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`Exhibits 2035-36 (Awards)
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`E.
`Exhibits 2035-36 should be excluded under FRE 401-402 since Patent
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`Owner failed to discuss or even cite these exhibits in its Patent Owner Response.
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`Use of these exhibits now would be improper incorporation by reference. See 37
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`C.F.R. § 42.6(a)(3).
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`By failing to make reference to these exhibits, Patent Owner likewise failed
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`14
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`to offer any explanation of what relevance or nexus these exhibits might have to
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`the claimed subject matter. Demaco Corp. v. F. Von Langsdorff Licensing Ltd.,
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`851 F.2d 1387 (Fed. Cir.) (in order to be of probative value, there must be a
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`factually and legally sufficient connection between the objective evidence of
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`nonobviousness and the claimed invention). A “patentee in the first instance bears
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`the burden of coming forward with evidence sufficient to constitute a prima facie
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`case of the requisite nexus.” Texas Dept. of Community Affairs v. Burdine, 450
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`U.S. 248, 254 n. 7 (1981). Patent Owner has failed to do so here and thus has not
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`established that exhibits 2035 or 2036 have any relevance whatsoever to this
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`proceeding. FRE 402. Moreover, any relevance that Exhibit2035 might have is
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`outweighed by its potential to cause confusion. FRE 403. There is no evidentiary
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`basis to connect the awards to the claimed subject matter and allowing exhibits
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`2035-36 to remain in the record creates the potential for that (erroneous) inference,
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`including during appellate review.
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`III.
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`CONCLUSION
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`For the reasons discussed above, all of the above-identified evidence should
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`be excluded from consideration by the Board in this proceeding.
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`Dated: September 22, 2015
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` /Greg H. Gardella/
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`Greg H. Gardella
`Reg. No. 46,045
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`15
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`CERTIFICATE OF SERVICE
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`Pursuant to 37 C.F.R. § 42.6(e), the undersigned certifies service of
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`PETITIONERS’ MOTION TO EXCLUDE on the counsel of record for the Patent
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`Owner by filing this document through the Patent Review Processing System as
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`well as delivering a copy via electronic mail to the following addresses:
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`crossroadsipr@sprinklelaw.com
`CrossroadsIPR@blankrome.com
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`/Greg H. Gardella/
`Greg H. Gardella (Reg. No. 46,045)
`Counsel for Petitioners
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`Dated: September 22, 2015