UNITED STATES PATENT AND TRADEMARK OFFICE
`____________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________________________
`
`HUGHES NETWORK SYSTEMS, LLC and
`HUGHES COMMUNICATIONS, INC.,
`
`Petitioners,
`
`v.
`
`CALIFORNIA INSTITUTE OF TECHNOLOGY,
`
`Patent Owner.
`____________________________
`
`IPR2015-00060
`Patent 7,421,032
`____________________________
`
`PETITIONERS’ REPLY BRIEF REGARDING IDENTIFICATION OF
`REAL PARTIES-IN-INTEREST
`
`
`
`
`
`
`
`
`____________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________________________
`
`HUGHES NETWORK SYSTEMS, LLC and
`HUGHES COMMUNICATIONS, INC.,
`
`Petitioners,
`
`v.
`
`CALIFORNIA INSTITUTE OF TECHNOLOGY,
`
`Patent Owner.
`____________________________
`
`IPR2015-00060
`Patent 7,421,032
`____________________________
`
`PETITIONERS’ REPLY BRIEF REGARDING IDENTIFICATION OF
`REAL PARTIES-IN-INTEREST
`
`
`
`
`
`
`
`
`
`I.
`
`INTRODUCTION
`
`Patent Owner’s assertion that non-parties DISH Network Corporation, DISH
`
`Network L.L.C., and dishNET Satellite Broadband L.L.C. (collectively, “DISH”)
`
`are unnamed real parties-in-interest (“RPII”) is based on speculation, application of
`
`an incorrect legal test, and improper reliance on factors that the Board has
`
`previously held are insufficient to create RPII status. Patent Owner fails to show
`
`that these petitions were filed at the behest of DISH, as required to find that DISH
`
`is an RPII. Inexplicably, Patent Owner makes these arguments despite failing to
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`present any evidence of infringement by any DISH product in the district court
`
`litigation pending at the time these petitions were filed. Ex. 1070 ¶ 11; Ex. 1071.
`
`The above facts establish that only Petitioners have an interest in these trials.
`
`At most, Patent Owner alleges privity between DISH and EchoStar (each
`
`publicly traded companies), and then to Petitioners. However, even if Patent
`
`Owner could show privity (and it cannot), neither the statute nor the rules require
`
`that the petition identify all entities in privity with the petitioner. Cf. 35 U.S.C. §
`
`312(a)(2); 37 C.F.R. § 42.8(b)(1). Such a requirement was eliminated from the
`
`final version of the AIA. See Joe Matal, A Guide to the Legislative History of the
`
`America Invents Act: Part II of II, 21 Fed. Cir. Bar J. 539, 607 n.424 (2012) (Ex.
`
`1072) (“The final public law, however, only requires identification of ‘all real
`
`parties in interest.’”). Accordingly, the petitions have identified the RPII.
`
`
`
`1
`
`
`
`II.
`
`PATENT OWNER HAS FAILED TO SHOW DISH IS A REAL
`PARTY-IN-INTEREST
`A. Real Party-In-Interest Requires Direction and Control of The
`Filing of The IPR Petition
`
`The key to the RPII inquiry is “the relationship between a party and a
`
`[PTAB trial] proceeding; RPI does not describe the relationship between parties.”
`
`Aruze Gaming Macau, Ltd. v. MGT Gaming, Inc., IPR2014-01288, Paper 13, at 11
`
`(PTAB Feb. 20, 2015) (emphasis in original). Thus, “the ‘real party-in-interest’
`
`may be the petitioner itself, and/or it may be the party or parties at whose behest
`
`the petition has been filed.” Office Patent Trial Practice Guide, 77 Fed. Reg.
`
`48,756, 48,759 (Aug. 14, 2012) (“TPG”) (emphasis added). The question is
`
`whether an unnamed party “funds and directs and controls an IPR” petition or
`
`whether that other party is “litigating through a proxy.” TPG at 48,760 (emphasis
`
`supplied); Aruze Gaming at 12. See also RPX Corporation v. Virnetx Inc.,
`
`IPR2014-00171, Paper 48, at 7 (PTAB June 5, 2014) (stating that petitioner “may
`
`not receive a suggestion [to challenge the patent] from another party … and be
`
`compensated by that party for the filing … .” (quoting In Re Guan et al. Inter
`
`Partes Reexam., 95/001,045; 2008 WL 10682851 (May 26, 2008))).
`
`B. Real Party-In-Interest Is Not Established By Arguments Directed
`Merely To Elements of Privity
`
`Critically, RPII and privity “describe distinct concepts with differing effects
`
`under the statute . . . .” Aruze Gaming, at 7. The legislative history of the AIA
`
`confirms that “[p]rivity is essentially a shorthand statement that collateral estoppel
`
`2
`
`
`
`is to be applied in a given case.” See TPG, at 48,759. The factors for determining
`
`whether collateral estoppel should be applied (and therefore establish privity) are
`
`recited in Taylor v. Sturgell, 553 U.S. 880 (2008). Those factors are not sufficient
`
`to show RPII status. This is so because “[t]he notion of ‘privity’ is more
`
`expansive, encompassing parties that do not necessarily need to be identified in the
`
`petition as ‘a real party-in-interest.’” TPG, at 48,759. Accordingly, Patent
`
`Owner’s argument directed to mere privity under the Taylor factors is insufficient
`
`to show RPII status. See Wavemarket Inc., IPR2014-00199, Paper 34, at 5 (PTAB
`
`Aug. 11, 2014) (“[S]ince the notion of privity is more expansive than real party-in-
`
`interest, Patent Owner’s evidence is not sufficient . . . .”).
`
`C. The Allegations By The Patent Owner Are Facially Insufficient
`To Show That DISH Is A Real Party-In-Interest
`
`A careful review of the preliminary response shows no evidence that DISH
`
`is an RPII. Patent Owner does not allege that DISH funded or contributed any
`
`financing to the filing of the Petition or contributed to the decision to file. Cf. RPX
`
`Corp., IPR2014-00171, Paper 49, at 7. Instead, Patent Owner relies on a number
`
`of factors that are legally insufficient to establish RPII status.
`
`First, Patent Owner relies on the existence of a common shareholder who
`
`acts as Chairman of both DISH and EchoStar (the corporate parent of Petitioners).1
`
`However, as explained in Aruze Gaming, a common shareholder’s “opportunity to
`
`
`1 Echostar owns over 90% of Hughes, but less than 100%.
`
`3
`
`
`
`control” is insufficient in the absence of a plausible allegation that the common
`
`shareholder is the RPII. Aruze Gaming at 17 (“therefore, the degree to which [the
`
`common shareholder] could control this inter partes review is not relevant.”). That
`
`EchoStar and DISH are corporations under common control is legally insufficient
`
`to show that DISH controlled this proceeding. Id. Even if DISH itself had
`
`corporate control over EchoStar (which it does not), that would still be insufficient,
`
`because it did not control these proceedings. See id. at 18; Commerce Bancshares,
`
`Inc. v. Intellectual Ventures II LLC, IPR2014-00801, Paper 7, at 5-6 (PTAB Dec.
`
`1, 2014) (finding corporate ownership does not “demonstrate sufficiently that [the
`
`parent] . . . exercised, or could have exercised, control over the filing of this
`
`Petition”). In short, corporate control is not enough to create RPII status.
`
`Second, the purported indemnity obligation to DISH is insufficient. See
`
`Wavemarket, IPR2014-00199, Paper 34, at 6; Samsung Elec. v. Black Hills Media,
`
`IPR2014-00723, Paper 7 at 5 (PTAB Nov. 4, 2014); Apple Inc. v. Achates
`
`Reference Pub., IPR2013-00080, Paper 17, at 5 (PTAB Apr. 3, 2013). Third, the
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`sharing of counsel between Hughes and DISH in the district court (and shared
`
`counsel’s reference, in the district court, to the anticipated filing of these petitions)
`
`is insufficient. See Aruze Gaming, at 19-20; Innolux Corp., IPR2013-00060, Paper
`
`12, at 6-7 (PTAB May 3, 2013); LG Display Co., Ltd. v. Innovative Display Techs.
`
`LLC, IPR2014-01096, Paper 11, at 16-17 (PTAB Jan. 13, 2015); In re Schlecht,
`
`95/001,206, Decision Dismissing Petition, at 5 (June 22, 2010) (cited by the TPG
`
`4
`
`
`
`at 48,760). Fourth, using similar prior art in the petitions and litigation is legally
`
`insufficient to show RPII status. In re Schlecht at 5.
`
`Moreover, Patent Owner has failed to submit evidence in the district court
`
`that even one DISH product infringes the patents at issue. Ex. 1070 ¶ 11; Ex.
`
`1071. Thus, DISH had no substantial interest in the patents when the petitions
`
`were filed, and is not an RPII. Patent Owner’s subsequent filing of a second
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`litigation does not manufacture such an interest retroactively.
`
`III. DISH IS NOT A REAL PARTY-IN-INTEREST
`For the avoidance of doubt, Petitioners submit the declaration of its in-house
`
`counsel (Exhibit 1070), establishing the following facts: (1) all fees and costs
`
`associated with these petitions were borne by Petitioners alone, not DISH (Ex.
`
`1070 ¶ 6); (2) the decision to file these petitions was made entirely by Petitioners’
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`in-house counsel without control, input, or suggestion from DISH (Id. ¶¶ 4, 5, 8);
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`(3) approval to file the petitions was neither sought, nor obtained from any member
`
`of the Boards of EchoStar or DISH (Id. ¶ 7); (4) no person involved in the decision
`
`to file these petitions is a DISH employee (Id. ¶ 8), (5) Petitioners have not acted
`
`as a proxy for DISH in these proceedings (Id. ¶ 9); and (6) EchoStar and DISH are
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`separate publicly traded companies with separate budgets and operations (Id. ¶ 10).
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`For the reasons set forth above, DISH is not an unnamed RPII.
`
`
`
`
`
`
`
`5
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`
`
`
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`
`
`
`
`Date: March 18, 2015
`
`
`
`
`
`
`
`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.
`
`
`
`
`
`
`
`6
`
`
`
`
`
`
`
`CERTIFICATE OF SERVICE
`In accordance with 37 C.F.R. § 42.6(e), the undersigned certifies that on the
`18th day of March, 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
`
`
`
`
`
`
`
`Date: March 18, 2015
`
`
`
`
`
`
`
`
`
`
` /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.
`
`
`
`
`
`7
`
`
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