Paper No.
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`__________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`___________________
`
`CISCO SYSTEMS, INC. AND QUANTUM CORPORATION,
`Petitioners,
`
`v.
`
`CROSSROADS SYSTEMS, INC.,
`Patent Owner
`_____________________
`
`Case IPR2014-01544
`Patent No. 7,051,147
`
`__________________
`
`PETITIONERS’ OPPOSITION TO PATENT OWNER’S
`MOTION TO SEAL
`
`i
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`__________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`___________________
`
`CISCO SYSTEMS, INC. AND QUANTUM CORPORATION,
`Petitioners,
`
`v.
`
`CROSSROADS SYSTEMS, INC.,
`Patent Owner
`_____________________
`
`Case IPR2014-01544
`Patent No. 7,051,147
`
`__________________
`
`PETITIONERS’ OPPOSITION TO PATENT OWNER’S
`MOTION TO SEAL
`
`i
`
`
`
`TABLE OF CONTENTS
`
`I.
`
`Introduction ..................................................................................................... 1
`
`II. Relief Requested.............................................................................................. 1
`
`III. Applicable Legal Principles for Sealing Confidential Information................... 1
`
`IV. Good Cause Does Not Exist for Sealing the Exhibits....................................... 2
`
`A.
`
`B.
`
`The Exhibits are Substantive to a Patentability Issue and Therefore
`Cannot Be Sealed............................................................................... 2
`
`Patent Owner’s Response Highlights the Harm to the Public That
`Would Be Caused by Sealing the Exhibits ......................................... 5
`
`V. Conclusion....................................................................................................... 8
`
`ii
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`
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`IPR2014-01544
`Petitioners’ Opposition to Patent Owner’s Motion to Seal U.S. Pat. No. 7,051,147
`I.
`Introduction
`Petitioners Cisco Systems, Inc. and Quantum Corporation oppose Patent
`
`Owner’s Motion to Seal, in which Patent Owner broadly requests that Exhibits
`
`2040, 2042, 2044 and 2045 (over 800 pages of material) be sealed as containing
`
`“confidential commercial information.” Motion to Seal at 1.
`
`Patent Owner’s Motion to Seal fails at its core—it seeks to seal information
`
`that cannot be sealed—and, thus, should be denied.
`
`II.
`
`Relief Requested
`Petitioners ask that the Board deny Patent Owner’s Motion to Seal.
`
`III. Applicable Legal Principles for Sealing Confidential Information
`
`As the moving party, Patent Owner bears the burden of proof to establish
`
`that it is entitled to the requested relief—that is, to have Exhibits 2040, 2042, 2044
`
`and 2045 sealed from the public. 37 C.F.R. § 42.20(c). The standard for the Board
`
`to grant Patent Owner’s request is “good cause.” 37 C.F.R. § 42.54. The good
`
`cause standard requires taking into account the strong public policy for making all
`
`information filed in inter partes review proceedings open to the public. Garmin
`
`Int’l v. Cuozzo Speed Technologies, LLC, IPR2012-00001, Paper 37 at 3 (PTAB
`
`April 5, 2013). Thus, Patent Owner can only meet its burden to show good cause
`
`by showing that Patent Owner’s interest in “confidentiality outweighs the strong
`
`public interest in having an open record.” Smith & Nephew, Inc. v. Convatec
`
`Technologies, Inc., IPR2013-00102, Paper 86 at 2 (PTAB May 19, 2014); Office
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`1
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`
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`IPR2014-01544
`Petitioners’ Opposition to Patent Owner’s Motion to Seal U.S. Pat. No. 7,051,147
`Patent Trial Practice Guide, 77 Fed. Reg. 48756, 48760 (Aug. 14, 2012).
`
`IV. Good Cause Does Not Exist for Sealing the Exhibits
`A.
`The Exhibits are Substantive to a Patentability Issue and
`Therefore Cannot Be Sealed
`Patent Owner argues for the patentability of its claims by asserting that
`
`Exhibits 2040, 2042, 2044 and 2045 show “[c]ommercial success [that] supports a
`
`finding of nonobviousness.” See Patent Owner’s Response, Paper 20 at 52. In fact,
`
`Patent Owner presents Exhibits 2040, 2042, 2044 and 2045 as evidence that may
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`“be the most probative and cogent evidence in the record.” Id. at 50. Nevertheless,
`
`Patent Owner seeks to keep this evidence a secret from the public.
`
`The “public has an interest in knowing what information [Patent Owner]
`
`believes is important in determining a substantive issue in the case.” Garmin Int’l,
`
`Paper 37 at 10. In this case, the public has a strong interest in knowing the “most
`
`probative and cogent evidence” regarding the issue of patentability. Rather than
`
`addressing the public’s strong interest, Patent Owner merely argues that a motion
`
`to seal should be “non-controversial.” Motion to Seal at 2 (relying upon HBPSI-
`
`Hong Kong).
`
`Patent Owner’s reliance upon the HBPSI-Hong Kong case is misplaced. In
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`HBPSI-Hong Kong, the Board sealed a “Settlement and License Agreement” that
`
`pertained to whether the petitioner was a “successor-in-interest” to the agreement
`
`and therefore prohibited from seeking inter partes review. HBPSI-Hong Kong Ltd.
`
`2
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`
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`IPR2014-01544
`Petitioners’ Opposition to Patent Owner’s Motion to Seal U.S. Pat. No. 7,051,147
`v. SRAM, LLC, IPR2013-00174, Paper 14 at 5-7 (PTAB June 7, 2013); HBPSI-
`
`Hong Kong, Paper 19 (PTAB June 11, 2013). However, unlike HBPSI-Hong Kong,
`
`Patent Owner in the present case is not seeking to seal documents related to a
`
`tangential issue, but rather seeking to seal documents directly pertaining to
`
`patentability.
`
`When seeking to seal documents pertaining to patentability, the Board set
`
`forth the appropriate standard in Garmin Int’l. In Garmin Int’l, the Board denied a
`
`renewed motion to seal with respect to “exhibits [that] were submitted on [patent
`
`owner’s] own initiative to support [patent owner’s] contention that its claims are
`
`patentable over the cited prior art.” Garmin Int’l, Paper 37 at 9-10. The patent
`
`owner argued that the exhibits were protected by attorney client privilege, which
`
`the Board determined was insufficient reason to seal the exhibits:
`
`“In support of a substantive argument, [patent owner] on its own
`volition filed Exhibits I and J, thus waiving-attorney client privilege
`and the confidentiality associated with such privilege. The public has
`an interest in knowing what information [patent owner] believes is
`important in determining a substantive issue in the case…The Board
`should not undermine the public’s interest in having open access to
`pertinent information, simply for the purpose of making [patent
`owner’s] litigation strategy of choice less costly to [patent owner].”
`Id. at 10.
`Garmin Int’l has repeatedly been applied to other cases to deny motions to
`
`3
`
`
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`IPR2014-01544
`Petitioners’ Opposition to Patent Owner’s Motion to Seal U.S. Pat. No. 7,051,147
`seal information relied upon for substantive issues. See, e.g., St. Jude Medical. St.
`
`Jude Medical v. Volcano, IPR2013-00258, Paper 28 (PTAB August 12, 2013);
`
`Microsoft Corporation v. Enfish, LLC, Paper 28 (PTAB June 17, 2014). For
`
`example, in St. Jude Medical, the petitioner attempted to seal evidence presented
`
`“in support of its substantive contentions on unpatentability.” St. Jude Medical, at
`
`6. The Board correspondingly held that the petitioner “failed to show ‘good
`
`cause,’” stating that “[i]t is fundamentally unsupportable that a Petitioner should be
`
`allowed to attack the claims of an issued patent based on evidence that it refuses to
`
`reveal to the public.” Id. at 6-7 (emphasis added). The Board also emphasized in
`
`St. Jude Medical that the evidence was presented of the petitioner’s own volition.
`
`Id. at 5-6.
`
`In the present case, the evidence that Patent Owner is attempting to seal was
`
`presented by Patent Owner of its own volition in support of its substantive
`
`contentions on patentability. Patent Owner “exercised its own choice” in deciding
`
`that “it was more important” to present the exhibits “than to maintain
`
`confidentiality of the information at its disposal.” St. Jude Medical at 5. It is
`
`“fundamentally unsupportable” for Patent Owner to argue for patentability based
`
`on evidence that Patent Owner refuses to reveal to the public. Id. at 6.
`
`Additionally, Patent Owner’s only identification of harm to its interest is that
`
`the “sales figures could be used … by undercutting Crossroads’ pricing, or by
`
`4
`
`
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`IPR2014-01544
`Petitioners’ Opposition to Patent Owner’s Motion to Seal U.S. Pat. No. 7,051,147
`[competitors] contrasting Crossroads’ sales figures with their own in an attempt to
`
`persuade customers to buy their products instead of Crossroads.” Motion to Seal at
`
`4. Yet, Patent Owner’s exhibits show only historical gross revenue numbers. The
`
`exhibits do not show Crossroads’ historical pricing or current pricing. The exhibits
`
`do not show the number of units sold. Patent Owner’s bald statement about a
`
`theoretical harm fails to demonstrate how disclosing gross revenue numbers dating
`
`back to the 1990’s for discontinued products causes actual harm Patent Owner.
`
`Moreover, Patent Owner’s theoretical harm in disclosing decade-old gross
`
`sales numbers fails to overcome the strong interest in the public knowing the “the
`
`most probative and cogent evidence in the record.” Patent Owner weighed the risks
`
`associated with disclosing its revenue numbers and license agreements to a public
`
`proceeding, exercised its own choice, and, of its own volition, determined that it
`
`was important enough to disclose this information in an effort to show
`
`“nonobviousness.” Patent Owner’s Response, Paper 20 at 52.
`
`Patent Owner’s purpose – finding its patent nonobvious – is a substantive
`
`issue in the case, and it is “fundamentally unsupportable” that information used for
`
`such purpose should be kept sealed from the public.
`
`Patent Owner’s Response Highlights the Harm to the Public That
`B.
`Would Be Caused by Sealing the Exhibits
`Patent Owner argues that the public’s interest in having an open record is not
`
`harmed because Patent Owner’s “publically available response contains sufficient
`
`5
`
`
`
`IPR2014-01544
`Petitioners’ Opposition to Patent Owner’s Motion to Seal U.S. Pat. No. 7,051,147
`detailed information to allow the public to access ‘a complete and understandable
`
`file history of this inter partes review.’” Motion to Seal at 3-4. In support of this
`
`argument, Patent Owner includes the following example of “sufficient detailed
`
`information,” quoted from Patent Owner’s Response:
`
`A large number of licensees have taken licenses directed specifically
`to Crossroads’ ‘972 patent family. Ex. 2040. The total license
`payments through FY2014 are over $60 million.
`Motion to Seal at 3.
`
`It is readily apparent from the above quote that the “sufficiently detailed
`
`information” in Patent Owner’s Response does not include any information
`
`regarding which, if any, licenses pertain to the patent at issue in this case (U.S. Pat.
`
`No. 7,051,147), and their amounts. Rather, Patent Owner appears to have
`
`selectively characterized the information in the exhibits in only the manner that
`
`Patent Owner believes best supports its own arguments. Sealing the exhibits would
`
`allow Patent Owner to continue “cherry picking” information from the exhibits,
`
`while suppressing all unfavorable information in the exhibits from the public.
`
`Allowing Patent Owner to selectively disclose information from the exhibits while
`
`sealing the actual details highlights the harm to the public’s ability to access a
`
`complete and understandable file history.
`
`Patent Owner cites Gnosis S.P.A. as supporting its proposition that Patent
`
`Owner’s Response provides “sufficient general information” such that sealing the
`
`6
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`
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`IPR2014-01544
`Petitioners’ Opposition to Patent Owner’s Motion to Seal U.S. Pat. No. 7,051,147
`exhibits “would not inhibit the public’s understanding of the Patent Owner’s
`
`arguments and positions.” Motion to Seal at 4-5. In Gnosis S.P.A., the Board
`
`granted a motion to seal in order to redact isolated passages of the “Parties’ Joint
`
`Stipulation of Undisputed Facts.” Gnosis S.P.A. v. S. Alabama Medical Science
`
`Foundation, IPR2013-00118, Paper 33 at 3-4 (PTAB October 31, 2013). However,
`
`when the patent owner also sought to seal a large portion of many exhibits, which
`
`included “license agreement” exhibits and “product sales” exhibits, the Board
`
`determined “that the motion was not grantable.” Gnosis S.P.A., Paper 26 at 2
`
`(PTAB October 9, 2013); Gnosis S.P.A., Paper 23 at 4-17 (PTAB September 24,
`
`2013) (identifying that the motion sought to seal “license agreement” and “product
`
`sales” exhibits). The patent owner in Gnosis S.P.A. had argued that the “license
`
`agreement” and “product sales” exhibits should be sealed because they
`
`“contain[ed] confidential business, technical, financial, and/or product
`
`development information of one or more of the parties, [the patent owner’s]
`
`licensees, and/or third-parties.” Gnosis S.P.A., Paper 23 at 3. The Board
`
`determined that these reasons were insufficient. Gnosis S.P.A., Paper 26 at 2.
`
`Gnosis S.P.A. is instructive in the present case. Just as in Gnosis S.P.A.,
`
`Patent Owner has requested extensive redaction of the record in its attempt to have
`
`over 800 pages of information sealed solely because such information is Patent
`
`Owner’s business and financial information. Merely stating that the exhibits
`
`7
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`
`
`IPR2014-01544
`Petitioners’ Opposition to Patent Owner’s Motion to Seal U.S. Pat. No. 7,051,147
`contain confidential and business and financial information does not outweigh the
`
`strong public interest.
`
`V.
`
`Conclusion
`Patent Owner’s Motion to Seal fails at its core: it seeks to seal information
`
`that cannot be sealed. Sealing evidence from the public that Patent Owner believes
`
`to be the most probative and cogent evidence in the record is in direct conflict with
`
`the strong public policy for making all information filed in inter partes review
`
`proceedings open to the public. See Garmin Int’l, Paper 37 at 9-11.
`
`For at least the foregoing reasons, Petitioners respectfully requests that the
`
`Board deny Patent Owner’s Motion to Seal.
`
`Date:
`
`June 25, 2015
`
`Respectfully submitted,
`
`/David L. McCombs/
`By:
`David L. McCombs
`USPTO Reg. No. 32,271
`Lead Counsel for Petitioners
`
`8
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`
`
`IPR2014-01544
`Petitioners’ Opposition to Patent Owner’s Motion to Seal U.S. Pat. No. 7,051,147
`CERTIFICATE OF SERVICE
`
`The undersigned certifies, in accordance with 37 C.F.R. § 42.6(e), that
`
`service was made on Patent Owner as detailed below.
`
`Date of service June 25, 2015
`
`Manner of service Electronic Mail
`
`Documents served Petitioners’ Opposition to Patent Owner’s Motion to Seal
`
`Persons served Steven R. Sprinkle
`Russell Wong
`John L. Adair
`James Hall
`
`Sprinkle IP Law Group
`ATTN: Crossroads IPR
`1301 W. 25th Street, Suite 408
`Austin, TX 78705
`
`crossroadsipr@sprinklelaw.com
`crossroadsIPR@Counselip.com
`
`/David L. McCombs/
`David L. McCombs
`Lead Counsel for Petitioners
`USPTO Reg. No. 32,271
`
`9
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`
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