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`Filed: March 18, 2015
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`—————————————————
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`—————————————————
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`HUGHES NETWORK SYSTEMS, LLC
`and HUGHES COMMUNICATIONS, INC.,
`Petitioner,
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`v.
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`CALIFORNIA INSTITUTE OF TECHNOLOGY,
`Patent Owner.
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`—————————————————
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`Case IPR2015-00060
`Patent 7,421,032
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`—————————————————
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`
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`PATENT OWNER’S ADDITIONAL BRIEFING
`REGARDING REAL PARTIES-IN-INTEREST
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`
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`Case IPR2015-00060
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`Patent 7,421,032
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`I.
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`REQUEST FOR RELIEF
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`The patent owner, Caltech, responds to the Board’s authorization for
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`additional briefing “directed to the question of whether either of the Dish entities
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`should have been named as a real party in interest in the petitions.” Ex. 2015. The
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`Board should find that DISH Network Corporation, DISH Network L.L.C., and
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`dishNET Satellite Broadband L.L.C. (collectively, “DISH”), as well as EchoStar
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`Corporation, are real parties-in-interest (“RPI”) of the petitioner, Hughes.
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`II. REASONS FOR GRANTING RELIEF
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`Caltech explained in its preliminary response the numerous reasons why
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`EchoStar and DISH should have been named as RPIs. Hughes has not rebutted
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`Caltech’s arguments with any evidence; hence, Caltech cannot yet reply to any
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`concurrent briefing by Hughes but instead expands on its original arguments in
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`light of the Board’s questions asked during the telephone hearing on Feb. 25, 2015.
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`Hughes has now effectively conceded that EchoStar is an RPI (Ex. 2016,
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`18:22-23 (“I don’t intend to dispute that EchoStar is a real party in interest.”)), and
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`the Board did not authorize further briefing on the issue. However, the fact that
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`EchoStar (as well as Hughes) is an RPI to this IPR underscores that DISH must
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`also be recognized as an RPI. Public documents describe EchoStar as calling the
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`legal shots for its subsidiaries, including Hughes. EchoStar and DISH describe
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`themselves in public documents as under “common control.” As commonly
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`controlled entities, DISH has similar ability to exercise control in this review
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`compared to EchoStar (in addition to other factors). While Hughes’ initial refusal
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`to unambiguously identify EchoStar as an RPI may have been an attempt to avoid
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`Case IPR2015-00060
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`Patent 7,421,032
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`calling attention to the blurred lines between the companies, this is exactly the type
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`of gamesmanship that 35 U.S.C. § 312(a)(2) seeks to prevent. Hughes, EchoStar,
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`and DISH are so closely intertwined, in terms of both corporate relationships and
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`involvement in the underlying patent dispute with Caltech, that it is inconceivable
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`that the ability to control the IPRs is isolated to just one of them.
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`A. Hughes now has the burden to show DISH is not an RPI
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`Caltech presented ample evidence in its preliminary response demonstrating
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`that DISH should have been named an RPI, including, inter alia, the following:
`• EchoStar wholly owns Hughes and manages its legal affairs (see Prelim. Resp.
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`pp. 5-7; Ex.2005 ¶4; Ex.1021 ¶4; Ex. 2006; Ex. 2007; Ex. 2008);
`• Charles W. Ergen possesses over 80% of the total voting power of both
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`EchoStar and DISH, acts as chairman of both, and controls all matters requiring
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`shareholder approval at both companies (see Prelim. Resp. pp. 7-8; Ex. 2006
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`p. 8, 42-43; Ex. 2009 p. 47);
`• SEC documents describe EchoStar and DISH as currently under “common
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`control” (see Prelim. Resp. p. 8; Ex. 2010 p. 15; Ex. 2006 p. 7);
`• DISH’s General Counsel, R. Stanton Dodge, is also an EchoStar director (see
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`Prelim. Resp. p. 9; Ex. 2009 p. 30);
`• EchoStar and DISH Executive Vice President, Roger J. Lynch, is responsible
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`for the development and implementation of advanced technologies important to
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`both EchoStar and DISH (see Prelim. Resp. p. 8; Ex. 2006 pp. 43, 198);
`• Hughes and DISH are represented by the same counsel in the district court
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`litigation, have acted in concert throughout the litigation, and share common
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`Case IPR2015-00060
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`Patent 7,421,032
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`litigation/IPR counsel (see Prelim. Resp. pp. 11-13; Ex. 2011 p. 1; Ex. 2005 pp.
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`1, 3; Ex. 2012 pp. 47-62; Ex. 2013 0034:22-0035:5; 2014 pp. 4-6). 1
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`These facts, among others, are supported by evidence submitted with Caltech’s
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`preliminary response, and Hughes conceded many of these facts during the
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`hearing. Ex. 2016, 6:22-7:13, 16:17-17:5, 17:22-25.
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`In view of this extensive evidence, the burden is now on Hughes to show
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`that DISH is not an RPI, and that DISH somehow was not in a position to control
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`the IPRs. While the Board may presume that Hughes named its RPI correctly,
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`these presumptions evaporate in the face of evidence. Panduit Corp. v. All States
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`Plastic Mfg. Co., 744 F.2d 1564, 1579 (Fed. Cir. 1984). To date, Hughes has
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`provided no evidence that it properly named all RPIs in its petition, as its only
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`response came in the form of unsupported attorney argument during the hearing.
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`The only evidence in the record at present shows ongoing corporate blurring
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`among DISH, EchoStar and Hughes such that all three are substantially owned,
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`commonly controlled and even led by the same individual, remain integrated in the
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`products and services they provide, and share board members and employees. Cf.
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`Atlanta Gas Light Co. v. Bennett Regulator Guards, Inc., IPR2013-00453, Paper
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`1 While Mr. Guy, back-up counsel in these IPR’s, has now moved to withdraw
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`as district court counsel for the Hughes and DISH entities, the court has not
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`granted the motion.
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`Case IPR2015-00060
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`Patent 7,421,032
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`88 at 6, 11 (PTAB Jan. 6, 2015) (corporate blurring dispositive).
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`Caltech provided more than enough evidence to shift the burden back to
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`Hughes with respect to the RPI issue. As such, additional discovery to further
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`support Caltech’s argument is premature at this stage.2 However, Caltech should
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`be entitled to test any additional assertions by Hughes through discovery.
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`B.
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`The second district court complaint is irrelevant
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`During the hearing, Hughes gave significance to a second district court
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`infringement complaint Caltech recently filed. Ex. 2016, 11:11-24. This second
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`complaint, and any corresponding modifications to the original complaint (which
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`DISH has aggressively litigated in district court), have no relevance to the RPI
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`issue. DISH was accused of infringing Caltech’s patent well before the IPR
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`petition was filed and at the time the petition was filed. DISH actively litigated the
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`district court case together with Hughes/EchoStar, and remains accused today. The
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`second complaint was filed as a procedural matter because the district court
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`deemed it too late to add additional accused products to the first case. The facts
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`remain that DISH was an RPI at petition filing, and thereafter, at least by virtue of
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`2 While additional discovery (e.g., IPR invoices, relevant communications,
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`deposition of G. Hopkins Guy among others, etc.) is expected to further confirm
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`actual control by DISH, the present record demonstrates DISH, at a minimum, had
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`the ability to control the IPRs.
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`-4-
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`Case IPR2015-00060
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`Patent 7,421,032
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`its strong interest in invalidating Caltech’s patent and the various means of
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`common control between Hughes, EchoStar, and DISH.
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`C. DISH would also trigger recusal
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`Beyond the extensive evidence Caltech has provided of the common control
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`between Hughes, EchoStar, and DISH—and of DISH/EchoStar ability to call the
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`shots in this IPR, consideration of this Board’s recusal requirements provides
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`additional support that EchoStar and DISH should have been named RPIs. The
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`Practice Guide lists as the first of the “core functions of the ‘real party-in-interest’
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`and ‘privies’ requirement” the need “to assist members of the Board in identifying
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`potential conflicts.” 77 Fed. Reg. 48756, 48759 (2012). An administrative patent
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`judge with, for example, a financial interest in a DISH entity would unquestionably
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`be barred from participating in this proceeding because review could affect the
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`judge’s financial interest. See, e.g., 18 U.S.C. § 208; cf. Ex. 2009, 43 (DISH
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`identifying litigation over this patent as a risk against which it will vigorously
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`defend itself). Given the serious administrative and criminal sanctions that attach
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`to such conflicts, the Board cannot afford anything short of clarity on this issue,
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`particularly in view of the intertwining between Hughes, EchoStar and DISH.
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`Hughes cannot be permitted to offer no clear position while instead quibbling over
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`the only evidence of record. Hughes’ tactics are not consistent with its ultimate
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`burden or with the Board’s legal needs.
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`III. CONCLUSION
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`The only evidence of record shows that EchoStar/Hughes and DISH should
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`have been named RPI’s to this proceeding.
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`-5-
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`Case IPR2015-00060
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`Date: March 18, 2015
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`Patent 7,421,032
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`Respectfully submitted,
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`/Michael T. Rosato/
`Michael T. Rosato, Lead Counsel
`Reg. No. 52,182
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`Case IPR2015-00060
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`Patent 7,421,032
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`EXHIBIT LIST
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`EXHIBIT NO.
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`DESCRIPTION
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`2001
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`2002
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`2003
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`2004
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`2005
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`2006
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`2007
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`2008
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`2009
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`2010
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`2011
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`Aline Roumy et al., Design Methods for Irregular Repeat-
`Accumulate Codes, IEEE Transactions on Information Theory,
`vol. 50, Aug. 8, 2004.
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`Frank Kienle et al., A Synthesizable IP Core for DVB-S2 LDPC
`Code Decoding, IEEE, 2005.
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` Marco Gomes et al., Factorizable Modulo M Parallel
`Architecture for DVB-S2 LDPC Decoding, Proceedings of the
`6th Conference on Telecommunications, CONFTELE, 2007.
`
` Motion to Amend, California Institute of Technology v. Hughes
`Communications Inc. et al., No. 2:13-cv-07245-MRP (C.D.
`Cal. Sept. 30, 2014).
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`
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`Answer, California Institute of Technology v. Hughes
`Communications Inc. et al., No. 2:13-cv-07245-MRP (C.D.
`Cal. Feb. 10, 2014).
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`EchoStar Corporation, Annual Report (Form 10-K) (Feb. 21,
`2014).
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`EchoStar – Executive Management,
`http://www.echostar.com/Company/Executives.aspx (last
`visited Jan. 9, 2015).
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`Cleo Millender-Belmonte, https://www.linkedin.com/pub/cleo-
`millender-belmonte/9/b72/b11 (last visited Jan. 23, 2015).
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`DISH Network Corporation, Annual Report (Form 10-K) (Feb.
`21, 2014).
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`EchoStar Corporation, Annual Report (Form 10-Q) (Nov. 6,
`2014).
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`Request for Approval of Substitution or Withdrawal of Counsel,
`California Institute of Technology v. Hughes Communications
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`Case IPR2015-00060
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`Patent 7,421,032
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`EXHIBIT NO.
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`DESCRIPTION
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`2012
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`2013
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`2014
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`2015
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`2016
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`Inc. et al., No. 2:13-cv-07245-MRP (C.D. Cal. Dec. 30, 2014).
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`Defendants’ Invalidity Contentions, California Institute of
`Technology v. Hughes Communications, Inc. et al., No. 2:13-
`cv-07245-MRP-JEM (C.D. Cal. May 15, 2014).
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`Certified Copy, Reporter’s Transcript of Proceedings, California
`Institute of Technology v. Hughes Communications, Inc., et
`al., No. CV 13-07245 MRP (C.D. Cal. Apr. 7, 2014).
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`Defendants’ Preliminary Election of Asserted Prior Art,
`California Institute of Technology v. Hughes Communications
`Inc. et al., No. 2:13-cv-07245-MRP (C.D. Cal. Jul. 8, 2014).
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`Email from PTAB to E. Williams, M. Rosato, G. Guy and M.
`Argenti (Feb. 25, 2015).
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`Transcript of PTAB Board Meeting, Hughes et al. v. California
`Institute of Technology (Feb. 25, 2015).
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`Case IPR2015-00060
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`Patent 7,421,032
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`CERTIFICATE OF SERVICE
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`I certify that the foregoing Patent Owner’s Additional Briefing Regarding
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`Real Parties-in-Interest was served on this 18th day of March, 2015, on the
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`Petitioner at the correspondence address of the Petitioner as follows:
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`
`Eliot D. Williams
`G. Hopkins Guy
`BAKER BOTTS LLP
`1001 Page Mill Road
`Palo Alto, CA 94304
`eliot.williams@bakerbotts.com
`hop.guy@bakerbotts.com
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`Date: March 18, 2015
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`Respectfully submitted,
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`/Michael T. Rosato/
`Michael T. Rosato, Lead Counsel
`Reg. No. 52,182
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