`____________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________________________
`
`HUGHES NETWORK SYSTEMS, LLC and
`HUGHES COMMUNICATIONS, INC.,
`
`Petitioners,
`
`v.
`
`CALIFORNIA INSTITUTE OF TECHNOLOGY,
`
`Patent Owner.
`____________________________
`
`IPR2015-00059 (Patent 7,916,781)
`____________________________
`
`PETITIONERS’ RESPONSE IN OPPOSITION TO PATENT OWNER’S
`MOTION FOR ROUTINE AND ADDITIONAL DISCOVERY
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`
`
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`
`
`
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`I.
`
`INTRODUCTION
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`Patent Owner’s assertion that non-parties DISH Network Corporation, DISH
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`Network L.L.C., and dishNET Satellite Broadband L.L.C. (collectively, “DISH”)
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`are unnamed real parties-in-interest (“RPII”) is based on speculation, application of
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`an incorrect legal test, and improper reliance on factors that the Board has
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`previously held are insufficient to create RPII status. As a result, Caltech’s motion
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`for additional discovery fundamentally fails because it does not, and cannot,
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`demonstrate beyond speculation how any of its requests would be substantively
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`useful to its allegations that DISH is a RPII. Caltech admits that it does not know
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`what it will find, and even admits that it does not know if requested documents
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`exist. Such speculative discovery is not allowed in an IPR proceeding and should
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`be denied.
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`Caltech’s additional discovery requests are also improperly invasive of the
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`attorney-client privilege. Many of the requests seek privileged information, such
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`as communications between members of a joint defense group, or billing records.
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`Caltech also improperly uses its motion as an unauthorized reply to
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`Hughes’s additional briefing on RPII issues. Seeking to reargue the issues again,
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`Caltech mischaracterizes the statements of Hughes and Timothy Jezek concerning
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`the RPII issue. Petitioners’ brief on the RPII issue is clear. DISH did not fund,
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`direct, or control these IPRs, nor did it have the ability to do so. To the extent
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`1
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`
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`Caltech argues or responds to Petitioners’ brief on this issue, Hughes respectfully
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`requests the Board disregard Caltech’s unauthorized arguments.
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`II. CALTECH FAILS TO SHOW HOW THE REQUESTS FOR
`ADDITIONAL DISCOVERY ARE NECESSARY
`IN THE
`INTERESTS OF JUSTICE
`
`The moving party seeking discovery has the burden of demonstrating that
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`the additional discovery is necessary “in the interest of justice.” 37 C.F.R. §
`
`42.51(b)(2); TPG, at 48,761; Garmin Int’l, Inc. v. Cuozzo Speed Tech., LLC, Case
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`IPR2012-00001, Paper 26, at 6 (PTAB Mar. 5, 2013). The Board in Garmin has
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`identified five factors important in determining whether a discovery request meets
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`this “interest of justice” requirement. Id., at 6–7.
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`An important factor when evaluating a request for additional discovery is
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`whether the party seeking additional discovery has shown that there is more than a
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`“mere possibility of finding something useful, and mere allegation that something
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`useful will be found.” Apple Inc. v. Achates Reference Publishing, Inc., IPR2013-
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`00080, Paper 17, at 5 (PTAB Apr. 3, 2013). Instead, “the requester of information
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`should already be in possession of a threshold amount of evidence or reasoning
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`tending to show beyond speculation that something useful will be uncovered.”
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`Garmin, at 7. In this context, the concept of “‘useful’ means favorable in
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`substantive value to a contention of the party moving for discovery.” Id.
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`Therefore, the party moving for discovery must show more than mere relevance,
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`2
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`
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`but must show beyond speculation, that in fact something useful to a contention of
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`the moving party will be uncovered. See Garmin, at 6–7.
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`Caltech argues that additional discovery is required into whether DISH is an
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`unnamed RPII. In an IPR proceeding, “the ‘real party-in-interest’ may be the
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`petitioner itself, and/or it may be the party or parties at whose behest the petition
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`has been filed.” TPG, at 48,759 (emphasis added). The question is whether an
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`unnamed party “funds and directs and controls an IPR” petition or whether that
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`other party is “litigating through a proxy.” TPG at 48,760; Aruze Gaming Macau,
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`Ltd. v. MGT Gaming, Inc., IPR2014-01288, Paper 13, at 12 (PTAB Feb. 20, 2015).
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`Therefore,
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`to satisfy
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`its burden, Caltech must demonstrate beyond
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`speculation that something substantively useful will be uncovered regarding its
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`contention that the IPR petitions were filed “at the behest of” DISH. Caltech fails
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`to satisfy this heavy burden.
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`A. Caltech’s Requests Rely on the Wrong Legal Test
`Caltech ignores the discovery standard in IPR proceedings and instead
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`attempts to seek discovery under the more liberal relevance standard available in
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`district court. In support of each discovery request, Caltech merely argues that the
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`requested information is “relevant.” But, the requesting party’s burden to show the
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`information will be “useful” in the context of an additional discovery request “does
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`not mean merely ‘relevant’ and/or ‘admissible.’” Garmin, at 7.
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`
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`3
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`
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`Specifically, Caltech alleges that RFP No. 1 and Interrogatory No. 3 seek
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`“relevant documents” and that production of no documents in response “would be
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`highly relevant.” Paper 17, at 7. Caltech also argues that RFP No. 2 seeks
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`“documents [that] are relevant to specific positions advanced by Hughes. . . .”
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`Paper 17, at 8 (emphasis added). In support of RFP Nos. 3–5 Caltech states that
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`the requests are “in the interest of justice, as they are directed to information that is
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`highly relevant.” Paper 17, at 9, 11 (emphasis added). Interrogatory Nos. 1–2 also
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`merely argue that the information sought is “relevant” to the RPII issue. Paper 17,
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`at 12, 15.
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`Patent Owner cites a previous CBM decision as granting additional
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`discovery before cross-examination. Paper 17, at 7. However, CBM proceedings
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`have a “more liberal ‘good cause’ standard” as compared to the “interests of
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`justice” standard for discovery in an IPR. TPG, at 48,761; Bloomberg Inc. v.
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`Markets-Alert Pty. Ltd., CBM2013-00005, Paper No. 32, at 2 (PTAB May 29,
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`2013) (“While an interests of justice standard is employed in granting additional
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`discovery in inter partes reviews, a good cause standard is applied in post-grant
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`reviews and covered business method patent reviews.”). Therefore, Caltech’s
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`requests should be denied as relying on the incorrect legal standard.
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`
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`4
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`
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`B. Caltech Fails to Show Beyond Speculation that Something Useful
`will be Found
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`The party requesting discovery in an IPR must do more than merely allege
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`the possibility of finding something useful. Garmin, at 6. Instead, the party
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`moving for discovery “should already be in possession of evidence tending to
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`show beyond speculation that in fact something useful will be uncovered.” Id.
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`(emphasis added). Because Caltech’s requests are based on speculation, they
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`should be denied.
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`Caltech’s Requests Are Entirely Speculative
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`1.
`As evidenced by its arguments in support of discovery, Caltech’s requests
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`are largely a shot in the dark. First, Caltech admits that it does not know if many
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`of the requested documents even exist. For example, in support of RFP Nos. 1 and
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`5, and Interrogatory Nos. 2–3, Caltech argues that the non-existence of the
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`requested documents would be “relevant.” Paper 17, at 7, 12. In addition, in
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`support of RFP No. 5 and Interrogatory No. 2, Caltech argues that if “no
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`documents are produced it will contribute to the totality of the circumstances”
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`related to the issue of RPII. Paper 17, at 12. Caltech cannot satisfy its burden of
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`showing the requests are in the interest of justice and that something useful will be
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`found when it does not know if anything responsive even exists.
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`Moreover, it is entirely unclear what Caltech expects to find as a result of
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`RFP No. 1. Caltech merely speculates that “Mr. Jezek presumably needed to
`
`
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`5
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`
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`review relevant documents” to support his declaration. Paper 17, at 7 (emphasis
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`added). But, Caltech does not explain why Mr. Jezek would need to review
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`specific documents, or what documents he would have necessarily reviewed and
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`how they would be useful to support its contentions. Any documents referenced in
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`Mr. Jezek’s declaration were disclosed concurrently with the declaration,
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`consistent with § 42.51(b)(1)(i). See Jezek Decl., Paper 1070, at ¶ 11.
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`2.
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`Caltech Fails to Demonstrate Beyond Speculation that
`Something Useful Will be Found
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`Even where Caltech actually knows the requested documents exist, it does
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`not satisfy its burden of showing beyond speculation that something useful to its
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`RPII contentions will be found as a result of any request.
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`First, in support of RFP Nos. 1–5 and Interrogatory Nos. 1–3 and throughout
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`its motion, Caltech generally alleges that each request would allow Caltech and the
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`Board to evaluate the credibility or weight of Mr. Jezek’s declaration. Paper 17, at
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`6–11, 13–14. Caltech does not support this bare allegation by stating what it
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`expects to find. Nor does it explain how uncovered documents will be favorable to
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`its RPII contentions. RFP No. 1 and Interrogatory No. 3 are entirely based on this
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`generalized speculation that the information will allow it to “properly evaluate
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`whether the testimony should be accorded any weight.” Paper 17, at 6–7. Because
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`Caltech makes no attempt to show that it will uncover something useful to support
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`its RPII contentions, these requests should be denied.
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`
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`6
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`
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`RFP No. 4 is also an entirely speculative attempt to discover documents for
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`general “credibility” purposes. Mr. Jezek stated that “DISH did not direct, control,
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`or suggest the filing of these Petitions. DISH did not provide any input into the
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`content of the Petitions. DISH did not participate in the preparation or filing of the
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`petitions.” Exhibit 1070, at ¶ 5. Caltech’s request for documents contrary to this
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`statement are based entirely on speculation. Moreover, Caltech does not even
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`allege that there are any communications between DISH and Hughes regarding the
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`IPR petitions. Thus, this request is merely a blind fishing expedition. Caltech
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`plainly does not know what it will find as a result of the requests. Nor has it shown
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`that the uncovered information will be useful to support its contentions. Therefore,
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`this request should be denied.
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`RFP Nos. 2 and 3 generally seek facts that are insufficient to make a non-
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`party a RPII. With regard to RFP No. 2, the only information Caltech seems to
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`allege will be uncovered is that both DISH and Hughes participated in preparing
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`the invalidity contentions filed in district court litigation. But, Caltech does not
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`explain how that information would be useful in support of its contentions that the
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`IPR was filed at the behest of DISH. Preparation of joint invalidity contentions is
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`an entirely routine aspect of a joint defense group, which does not make a non-
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`party an RPII of the petition, or even a privy of the petitioner. See TPG, at 48,760.
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`Further, Hughes’s use of the previously filed invalidity contentions to inform its
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`IPR petitions would be entirely consistent with its independent decision to file the
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`7
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`
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`IPR. It would have been impractical, irrational, and a waste of resources to ignore
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`the prior art already found in district court litigation. Caltech does not explain why
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`the reuse of prior art is useful to its contentions.
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`In support of RFP No. 3, Caltech alleges only that it will uncover an
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`indemnity agreement between DISH and EchoStar that would cover “damages
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`arising from intellectual property claims.” Paper 17, at 10. However, despite
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`Caltech’s indication to the contrary, indemnification “is not one of the ‘substantive
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`legal relationships’ cited in Taylor (e.g., assignee-assignor), and is significantly
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`different from those relationships, which involve successive interests in property.”
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`Achates, at 5 (finding an indemnify agreement insufficient to make a non-party an
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`RPII, even when coupled with participation in a joint defense group). As a result,
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`indemnification obligations are insufficient to “demonstrate beyond speculation”
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`that a non-party is a RPII. Wavemarket Inc. v. Locationet Systems Ltd., IPR2014-
`
`00199, Paper 34, (August 11, 2014).
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`Furthermore, Caltech argues that the existence of documents sought by RFP
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`Nos. 2–3 are not “mere speculation.” Paper 17, at 8, 10. But merely showing that
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`documents are likely to “exist” is not sufficient to satisfy the burden of showing
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`the requests will be substantively useful to a contention. Accordingly, Caltech
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`fails to show beyond speculation that something useful will be found through RFP
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`Nos. 2–3.
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`
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`8
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`
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`RFP No. 5 and Interrogatory No. 2 are similarly speculative. These requests
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`seek information as to whether Hughes and DISH were “walled off” from each
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`other with respect to work on the IPR petitions. Caltech does not explain how
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`either a “wall” between two separate law firms, or lack thereof, would be useful.
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`Hughes is represented in district court litigation by counsel at a separate law firm
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`from IPR counsel. Hughes is represented in district court by Wilmer Hale and
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`represented in this IPR by Baker Botts. Separate firms do not typically have
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`agreements to “wall off” from one another so a lack of a wall would not be
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`informative, let alone useful. On the other hand, the existence of a wall would be
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`useful to support Petitioners’ contentions that DISH is not an RPII, not Caltech’s.
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`Therefore, Caltech has not satisfied its burden of showing beyond speculation that
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`something useful in support of its own contentions will be found.
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`As demonstrated by Caltech’s explanation, Interrogatory No. 1 is plainly
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`based on speculation and should be denied. Caltech has not identified what it
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`expects to find, or how it would be useful to its RPII contentions. Instead, Caltech
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`argues that identification of decision-makers is designed to find “who did approve
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`the filing” of the IPR, and “identify anyone who actually did perform [the]
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`functions” of directing, controlling, or suggesting the IPR filings. Paper 17, at 14
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`(emphasis original). Caltech even acknowledges that the subject of the request is
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`“speculation.” Paper 17, at 14, n.3. Critically, again, Caltech does not allege that
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`the request will find that someone at DISH controlled or approved the IPR
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`9
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`
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`petitions. Because Caltech does not explain how a list of decision-makers will be
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`useful to support its RPII contentions, Interrogatory No. 1 should be denied.
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`C. The Requests Seek Information That is Not in Petitioner’s
`Possession or Control
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`The requests seek information regarding documents and communications
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`specific to DISH. But, as Hughes has made clear, DISH is a separate entity from
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`the Petitioners. Paper 15, at 5. Hughes does not possess information specific to
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`DISH. For example, RFP No. 2 seeks legal bills issued to DISH; RFP No. 3 seeks
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`indemnification agreements between EchoStar and DISH; RFP No. 5 seeks
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`instructions or agreements
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`involving DISH or DISH
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`litigation counsel;
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`Interrogatory No. 1 asks for names of decision-makers at DISH; and Interrogatory
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`No. 2 asks for information regarding DISH’s communications. Hughes could not
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`produce this DISH specific information.
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`When limited to the information in Hughes’s control, the speculative nature
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`of the requests is apparent. For example, limited to only documents in the
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`possession or control of Hughes, RFP No. 2 would only seek legal bills associated
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`with Hughes’s own activities. Caltech has not and cannot show how this discovery
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`would be in any way useful to its RPII contentions.
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`D. The Requests are Overly Burdensome and Not Easily
`Understandable
`
`Requests for additional discovery must be “easily understandable.”
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`Requests and accompanying instructions that are unclear should be denied because
`
`
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`10
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`
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`they “are counter-productive and tend to undermine the responder’s ability to
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`answer efficiently, accurately and confidently.” Garmin, at 6–7. In addition, the
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`requests cannot be “overly burdensome to answer.” Garmin, at 7. The burden
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`presented by the requests are reviewed in light of the short timeline in an IPR, and
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`“includes financial burden, burden on human resources, and burden on meeting the
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`time schedule of this review.” Id. Even if Hughes “suspects that no document
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`meets a particular request, it is legally obligated to make a diligent search for
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`information.” Id.
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`First, the instructions and definitions make the discovery inherently overly
`
`burdensome and not easy to understand. The terms “document” and “thing” are
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`defined with reference to Federal Rules of Civil Procedure, which does not apply
`
`in the PTAB. Ex. 2018, at 2. In addition, the definition of “communications”
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`includes sending or receiving of information of “any kind through any means.”
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`Ex. 2018, at 2. This overbroad definition is not easily understandable, and
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`seemingly unlimited. For example, a shrug would seemingly be responsive to
`
`Caltech’s requests. Also, the instructions incorporate “instructions in the Office
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`Patent Trial Practice Guide” without specifying which instructions are referred to
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`or how to comply with them. Ex. 2018, at 1. The definitions of Hughes, EchoStar,
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`and DISH are also overly burdensome because each definition includes an
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`employee or agent of one of the listed companies, without limitation. Such an
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`overbroad definition would require Hughes to consider the documents or
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`11
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`
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`communications of countless individuals with no limitation on when they were
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`employed or acted as an agent, or in what capacity.
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`The instructions also impose an ongoing obligation to amend the responses
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`and require producing a privilege log detailing documents withheld as privileged.
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`Ex. 2018, at 1. But, these obligations are each themselves separate discovery
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`requests that Caltech must separately support via a showing under the Garmin
`
`factors, which it has failed to do. These additional obligations or requirements are
`
`overly burdensome.
`
`The discovery requests themselves are also overly burdensome and not
`
`easily understandable. For example, RFP No. 1 asks for “[d]ocuments and things
`
`reviewed or considered.” The Board in Garmin denied a similar request as unduly
`
`burdensome that requested production of all documents and things “considered in
`
`preparing Your responses to patent owner’s Interrogatories.” Garmin, at 16 (“The
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`undue breadth of such a request is self-evident.”). Documents produced by this
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`request “need not contain anything useful or even relevant.” Id. Therefore, as in
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`Garmin, there is “no valid reason for such an all-encompassing demand.” Id.
`
`RFP No. 2 seeks certain documents “sufficient to identify the entity that
`
`remitted payment for the legal services” or IPR filing fees, “whether directly or
`
`indirectly.” It is unclear what scope of documents would be included in the
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`“indirect” payment of fees. In addition, RFP No. 3 asks for indemnity agreements
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`“relating to” the IPRs, but it is unclear what would make an agreement “relate to”
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`12
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`
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`the IPR and, therefore, be required to be produced. Similarly, Interrogatory No. 1
`
`seeks information regarding decision-making authority “with respect to” this IPR.
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`It is unclear what authority “relates to” the IPR. For example, would an in-house
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`IP attorney at DISH with the authority to generally file IPRs be included, even
`
`where that attorney in fact had no input into the filing of this IPR? There is also no
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`limit to the scope or time period of decision-making authority in the request.
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`RFP No. 4 is considerably burdensome, particularly in light of the obligation
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`to create a privilege log for each document withheld due to privilege. This request
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`includes communications concerning the prior art cited in the petitions, which was
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`also cited in invalidity contentions in district court. Hughes and DISH are co-
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`defendants and are in a joint defense group in that litigation. Any communications
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`between members of the joint defense group would be common-interest privileged
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`communications. Thus, each and every communication responsive to RFP No. 4
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`would likely be privileged. As a result, Hughes would be required to look though
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`all of its emails and its attorneys emails and provide privilege log summaries for
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`each responsive email. That undertaking would be incredibly burdensome, time-
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`consuming, expensive, and pointless.
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`Responding to RFP No. 4 would also provide no useful information. The
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`communications would be between two co-defendants discussing prior art in
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`district court, entirely irrelevant to Caltech’s contention that DISH is an RPII.
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`TPG, at 48, 760; Paramount Home Entertainment v. Nissim Corp., IPR2014-
`
`13
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`
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`00961, Paper 11 at 8 (PTAB Dec. 29, 2014) (finding a co-defendant or member of
`
`a joint defense group is not a RPII through that relationship).
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`Therefore, the Board should deny these overly burdensome and ambiguous
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`requests.
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`E. Caltech Improperly Seeks Attorney-Client or Work-Product
`Privileged Information
`
`Caltech’s discovery requests are a thinly veiled attempt to force Petitioners
`
`to disclose privileged information in defense against its baseless RPII allegations.
`
`The requests plainly seek privileged information, such as communications between
`
`members of a joint defense group (RFP No. 4), or billing records (RFP No. 2).
`
`Petitioners should not be forced to produce such information, particularly in light
`
`of such speculative allegations.
`
`Caltech attempts to satisfy its burden by speculatively implying that these
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`documents are assumed to be useful to its case because “if any documents
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`responsive to this request exist it seems Hughes would readily produce them.” But
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`Hughes should not have to waive the work-product protection and attorney-client
`
`privilege to respond to Caltech’s speculative and misguided RPII allegations.
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`III. PATENT OWNER WAIVED ITS REQUEST FOR ADDITIONAL
`DISCOVERY INTO REAL PARTY-IN-INTEREST
`
`Caltech declined to seek timely discovery on this issue to inform its
`
`additional briefing. As of its Preliminary Response, Caltech must have been aware
`
`of its professed need for discovery into RPII. By delaying until well after the
`
`
`
`14
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`
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`parties filed their additional briefing on RPII authorized by the Board, Caltech has
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`waived its motion for additional discovery into this issue. “A party should seek
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`relief promptly after the need for relief is identified. Delay in seeking relief may
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`justify a denial of relief sought.” 37 C.F.R. § 42.25(b).
`
`On January 29, 2015, Patent Owner filed its Preliminary Response
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`dedicating approximately twelve pages to discussing allegations that the petitions
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`do not identify all RPII. Paper 13, at 3–14. In response, on February 25, 2015, the
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`Board conducted a conference call regarding Patent Owner’s RPII allegations.
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`During that conference call, the Board indicated that it would consider “a well-
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`tailored and very focused request” for additional discovery from Patent Owner.
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`Ex. 2016, at p. 21. Immediately following that conference call, the Board
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`authorized both parties to provide additional briefing “to the question of whether
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`either of the Dish entities should have been named as a real party in interest.” Ex.
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`2015. Instead, it waited over two months after it first raised the RPII issue, and
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`well over a month after the Board authorized a motion for additional discovery.
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`Therefore, Caltech’s delay is a waiver of the requested additional discovery. See
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`37 C.F.R. § 42.25(b).
`
`IV. CONCLUSION
`For these reasons, Petitioners respectfully requests the Board deny each
`
`request proposed in Patent Owner’s Motion for Additional Discovery.
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`
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`15
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`
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`Date: May 6, 2015
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`
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`
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`Respectfully Submitted,
`
` /Eliot D. Williams/
`
`
`
`
`
`Eliot D. Williams (Reg. No. 50,822)
`G. Hopkins Guy III (Reg. No. 35,866)
`1001 Page Mill Road, Bld. 1, Suite 200
`Palo Alto, California 94304-1007
`650.739.7510
`
`Attorneys for Petitioners, Hughes Network
`Systems, L.L.C. and Hughes
`Communications, Inc.
`
`
`
`16
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`
`
`
`CERTIFICATE OF SERVICE
`In accordance with 37 C.F.R. § 42.6(e), the undersigned certifies that on the
`6th day of May, 2015, a complete and entire copy of
`the foregoing
`PETITIONERS’ REPLY BRIEF REGARDING IDENTIFICATION OF
`REAL PARTIES-IN-INTEREST, including exhibits and testimony relied upon,
`were served on the Patent Owner at the correspondence address of record in the
`proceeding:
`
`Michael T. Roseto
`WILSON SONSINI GOODRICH & ROSATI
`701 Fifth Avenue, Suite 5100
`Seattle, WA 98104-7036
`mrosato@wsgr.com
`
`Matthew A. Argenti
`WILSON SONSINI GOODRICH & ROSATI
`650 Page Mill Road
`Palo Alto, CA 94304-1050
`margenti@wsgr.com
`
`
`
`
`
`
` /Eliot D. Williams/
`Eliot D. Williams (Reg. No. 50,822)
`G. Hopkins Guy III (Reg. No. 35,866)
`1001 Page Mill Road, Bld. 1, Suite 200
`Palo Alto, California 94304-1007
`650.739.7510
`
`Attorneys for Petitioners, Hughes Network
`Systems, L.L.C. and Hughes
`Communications, Inc.
`
`
`
`
`
`Date: May 6, 2015
`
`
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`
`
`17