`Issued: August 10, 2010
`Filed: October 4, 2004
`Inventors: Nguyen, et al.
`Title: System and Method for Managing Transfer of Rights Using Shared State
`Variables
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`Inter Partes Review No. IPR2015-00354
`__________________________________________________________________
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`PETITIONER’S REQUEST FOR REHEARING
`UNDER 37 C.F.R. §42.71
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`
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`Paper No. 13
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`
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`___________________
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`
`
`
`
`APPLE INC.
`Petitioner,
`
`v.
`
`CONTENTGUARD HOLDINGS, INC.,
`Patent Owner
`
`
`
`IPR2015-00354 – Petitioner’s Request for Rehearing
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`I.
`
`
`INTRODUCTION
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`On July 1, 2015, the Board issued a Decision under 35 U.S.C. § 312(a)(4),
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`denying institution of inter partes review of claims 1–5, 8, 11–16, 19, 22, 24–28,
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`31, and 34 of U.S. Patent No. 7,774,280 (“the ’280 patent”). Pursuant to 37
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`C.F.R. §42.71(d), Petitioner Apple Inc. (“Apple”) requests rehearing.
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`
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`Rehearing is warranted because the Board misapprehended and/or
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`overlooked arguments clearly presented in the Petition (as well as supporting
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`evidence) which explained that it would have been obvious to modify the Ginter
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`DRM system to employ digital certificates when installing software on the devices
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`used in Ginter’s scheme. Pet. at 47-49. Doing so would cause the Ginter devices
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`to possess behavioral integrity under the Board’s construction of “repository.”
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`The Board appeared to have overlooked this explanation and evidence, as it is
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`nowhere referenced or discussed in the Decision. Because the “repository”
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`limitation was the sole basis identified by the Board as to why it did not institute
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`trial on the grounds based on Ginter, rehearing is warranted.
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`II. RELIEF REQUESTED
`Apple requests that the Board withdraw the Decision and institute inter
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`partes review of claim 1 of the ’280 patent as being unpatentable under 35 U.S.C.
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`§103(a) over U.S. Patent No. 5,892,900 to Ginter et al. (“Ginter”) (Ex. 1007).
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`Petitioner requests rehearing of only claim 1 and only on the basis of Ginter.
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`1
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`IPR2015-00354 – Petitioner’s Request for Rehearing
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`Claim 1 is the only claim still being asserted in the district court. As the second
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`ground advanced in the Petition (i.e., Ginter in combination with Wiggins) does
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`not concern this claim, Petitioner is not seeking review of the institution decision
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`on that ground. Petitioner’s decision to not seek review of these ground(s) and/or
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`other claims does not imply a belief that the denial of those grounds was proper.
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`III. LEGAL STANDARDS
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`“When rehearing a decision on petition, a panel will review the decision for
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`an abuse of discretion.” (emphasis added) 37 C.F.R. § 42.71(c). The abuse of
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`discretion standard of review is the same heightened standard federal appeals
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`courts use to review district court factual findings. See, e.g., PNY Techs. Inc. v.
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`Phison Elecs. Corp., IPR2013-00472, Paper 16 at 2 (Apr. 23, 2014) (citing Star
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`Fruits S.N.C. v. United States, 393 F.3d 1277, 1281 (Fed. Cir. 2005)); Advanced
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`Software Design Corp. v. Fiserv, Inc., 641 F.3d 1368, 1380 (Fed. Cir. 2011) (“An
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`abuse of discretion occurs where the district court fails to consider an important
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`factor, gives significant weight to an irrelevant or improper factor, or commits a
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`clear error of judgment in weighing those factors.”)(citing Gen. Motors Corp. v.
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`Harry Brown’s, LLC, 563 F.3d 312, 316 (8th Cir.2009)).
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`IV. MATTERS MISAPPREHENDED OR OVERLOOKED
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`In accordance with 37 C.F.R. §42.71(d), Apple identifies the following
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`matters which the Board misapprehended and/or overlooked in its Decision and the
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`IPR2015-00354 – Petitioner’s Request for Rehearing
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`place in the Petition and evidence where each matter was addressed.
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`A. The Board Overlooked the Explanations in the Petition that Using
`Digital Certificates to Install Software on the Ginter Devices
`Would Have Been Obvious to A Person of Ordinary Skill
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`
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`The Board overlooked and/or misapprehended arguments presented in the
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`Petition at pages 47-49, which explained that modifying the Ginter devices to
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`possess “behavioral” integrity would have been an obvious variation of the Ginter
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`DRM scheme to a person of ordinary skill. As the Petition stated:
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`A person of ordinary skill in the field of digital rights management
`systems would recognize the examples of “trusted systems” in Ginter
`could be modified to possess additional capabilities, including those
`that would confer greater security or control over the electronic
`appliances used in its scheme. For example, a person of ordinary skill
`would have recognized the electronic appliances in Ginter
`(“repositories”) could be readily modified to include “new hardware
`such as a secure processor, secure storage and securing rendering
`devices” and that security of the devices could be improved by
`requiring all software applications used on the device to be
`“certified to be trusted” (e.g., by requiring a digital certificate to
`install or execute the software). See Ex. 1003 at ¶¶ 388-393; Ex. 1001
`at 1:60-64. Indeed, the ’280 patent acknowledges doing so was
`known in the prior art. Ex. 1001 at 1:43-44, 1:58-2:21. Adapting the
`Ginter schemes to use additional well known techniques to increase
`the security and integrity of the electronic appliances used in its
`scheme would have been obvious to a person of ordinary skill. See Ex.
`1003 at ¶¶ 388-393.
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`3
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`IPR2015-00354 – Petitioner’s Request for Rehearing
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`Pet. at 48-49 (emphasis added). The Petition also explained that Ginter expressly
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`teaches that a key benefit of its disclosed DRM system is that it is highly
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`configurable and can be implemented in a wide variety of ways, with citations
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`directly to Ginter for support. See Pet. at 28 (“VDE components together comprise
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`a configurable, consistent, secure and ‘trusted’ architecture for distributed,
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`asynchronous control of electronic content and/or appliance usage.”)[citing Ex.
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`1007 at 13:20-23]; Id. at 45 (“Indeed, Ginter teaches that is [sic] scheme is highly
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`configurable, due to its modular, ‘atomic’ architecture, and its identification of a
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`wide variety of design options and available technologies that can be used to
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`implement it.”); Id. at 35.
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`
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`The Petition likewise identified and explained passages within Ginter that
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`explain that its scheme is designed to be a highly secure and “trusted” scheme for
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`distributing content. See, e.g., Pet. at 35 (quoting Ginter at Abstract) (“Electronic
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`appliances such as computers employed in accordance with the present invention
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`help to ensure that information is accessed and used only in authorized ways, and
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`maintain the integrity, availability, and/or confidentiality of the information.
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`Secure subsystems used with such electronic appliances . . . enforce a secure chain
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`of handling and control”) (emphasis added).
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`
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`The Petition also presented a detailed explanation of the secure devices used
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`in the Ginter DRM scheme, and explained that Ginter teaches that these devices
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`IPR2015-00354 – Petitioner’s Request for Rehearing
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`were “trusted” and physically secure devices, which communicate with other
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`“trusted” VDE devices in a secure manner. Pet. at 28-29. As the Petition
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`explained, Ginter teaches: (i) “VDE components [that] together comprise a
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`configurable, consistent, secure and ‘trusted’ architecture for distributed,
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`asynchronous control of electronic content and/or appliance usage” [Pet. at 28]; (ii)
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`that electronic devices used in the Ginter scheme typically include a secure
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`processing unit that “processes information in a secure processing environment and
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`stores information securely” [Pet. at 28-29], and (iii) that these devices have a
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`“rights operating system” that enforces the rights to digital content using a “trusted
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`environment of generating decrypting keys … [and] managing the secure
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`communication of keys and other information between electronic appliances.” [Pet.
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`29]. See also Pet. at 35-36.
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`
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`In short, the Petition not only identified numerous passages within Ginter
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`that pointed to the criticality of the Ginter devices possessing attributes
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`corresponding to the physical, communications and behavioral integrity attributes
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`of “repositories,” but also that Ginter expressly teaches that these devices can be
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`adapted to incorporate other known technologies that enhance these attributes.
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`
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`The Petition also explained that a parent of the application that issued as the
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`‘280 patent had presented claims closely analogous to the claims of the ‘280 patent
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`which had been rejected by the Office as being anticipated by Ginter’s scheme, in
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`5
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`IPR2015-00354 – Petitioner’s Request for Rehearing
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`response to which the Patent Owner abandoned the application. Pet. at 24-25. The
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`Petition then presented a detailed comparison of Ginter to the claims, explaining
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`how features of Ginter corresponded to each element of the claims. Pet. at 29-41.
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`
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`Critically, the Petition expressly acknowledged that Ginter could be read as
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`not disclosing certain aspects of the ‘280 Patent claims. Pet. at 42. One specific
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`variation the Petition identified was “(iii) system components with varying security
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`capabilities, including those capable of functioning as ‘trusted systems.’” Id. The
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`Petition explained, however, that Ginter itself suggests changing various aspects of
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`its scheme to include additional known security features and capabilities, which a
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`person of ordinary skill in the art would have recognized as suggesting a range of
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`obvious variations of the Ginter scheme. Id. The Petition also explained the ‘280
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`patent itself “acknowledges that ‘trusted systems’ were well-known in 2001,”
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`when the ‘280 patent was filed. Pet. at 47-49. In particular, the Petition explained:
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`…the ‘280 patent discusses and incorporates by reference the ‘012
`patent. Id. at 1:40-42, 2:9-21. The Board, in IPR proceedings
`addressing the ‘012 patent, found the term ‘repository’ as used therein
`to mean a ‘trusted system, which maintains physical, communications
`and behavioral integrity, and supports usage rights.’ See IPR2013-
`00133, Paper 15 (July 1, 2013) at 9-16. “Repositories” having these
`properties are also described in Ginter, and are shown as being used as
`part of a “trusted” digital rights management system. See Ex. 1003 at
`¶¶ 375-376, 381-387.
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`6
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`IPR2015-00354 – Petitioner’s Request for Rehearing
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`Pet. at 47-48. At this point, the Petition clearly explained that Ginter’s “trusted
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`devices” could be altered to possess additional capabilities, including those that
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`would confer greater security or control over the electronic appliances used in its
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`scheme. One of these was the precise modification which the Board identified as
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`the sole distinction between the Ginter DRM scheme and the ‘280 claimed
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`repositories; namely, use of a digital certificate to verify the operating system
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`software when it is installed on the Ginter devices. As the Petition stated:
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`…security of the devices could be improved by requiring all software
`applications used on the device to be “certified to be trusted” (e.g., by
`requiring a digital certificate to install or execute the software). See
`Ex. 1003 at ¶¶ 388-393; Ex. 1001 at 1:60-64. Indeed, the ’280 patent
`acknowledges doing so was known in the prior art. Ex. 1001 at 1:43-
`44, 1:58-2:21
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`Pet. at 48 (emphasis added). The petition pointed out not only that this technique
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`was admitted in the ‘280 patent to be an old and well known technique used in
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`other “repository”/ “trusted system” DRM schemes, but that “[a]dapting the Ginter
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`to use additional well-known techniques to increase the security and integrity of
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`the electronic appliances used in its scheme would have been obvious to a person
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`of ordinary skill,” citing as support for this proposition testimony from Dr. Atul
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`Prakash, an eminently qualified expert. Pet. at 48-49. Indeed the Petition pointed
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`out that the ‘280 Patent itself admits that repositories, and in particular, repositories
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`IPR2015-00354 – Petitioner’s Request for Rehearing
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`that possess behavioral integrity because software is installed on them using digital
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`certificates, were admitted to be known in the prior art to the ‘280 Patent. See Pet.
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`at 48. (“Indeed, the ’280 patent acknowledges doing so was known in the prior art.
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`Ex. 1001 at 1:43-44, 1:58-2:21.”). Indeed, in advancing its position on the proper
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`construction of “repositories” and “behavioral integrity,” Patent Owner actually
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`relied on a description of repositories not in the ‘280 patent, but in admitted prior
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`art patents dating back to 1994 that had been incorporated by reference into the
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`‘280 patent. See PO Preliminary Response (Paper No. 10) at 15-16 (referring to
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`U.S. Patent Nos. 5,634,012 and 6,963,859 to Stefik et al.).
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`
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`The Petition also provided evidence in the form of expert testimony from Dr.
`
`Atul Prakash to support its explanation in the Petition why a person of ordinary
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`skill would have considered it obvious to modify the Ginter scheme by configuring
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`its devices to have additional, known security features, such as the admittedly old
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`technique of using digital certificates to install repository software. This
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`testimony, found at ¶¶ 388-393 of Ex. 1003, consists of approximately two pages
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`of 14 point, double spaced text. There, Dr. Prakash explained why a person of
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`ordinary skill would have found incorporating admittedly old and well known
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`security techniques into the Ginter devices to have been obvious. He explains that
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`based on that person’s skills and training, and in view of the specific guidance in
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`Ginter indicating the Ginter DRM scheme (including its devices) were highly
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`IPR2015-00354 – Petitioner’s Request for Rehearing
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`customizable and envisioned modifying or replacing these modules as needed, the
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`person would find it obvious to alter the devices used in the Ginter scheme to have
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`varying levels of flexibility and security. Id.
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`
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`Despite these explanations in the Petition, which were supported by precise
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`citations to specific portions of Ginter, the ‘280 patent and five precisely identified
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`paragraphs of Dr. Prakash’s declaration, the Board held:
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`Petitioner does not direct us to, nor can we find, a disclosure in Ginter
`that associates a digital certificate with the rights operating system and
`software that authenticates the source of the software prior to
`downloading it on the trusted architecture that is the secure electronic
`appliances. Rather, Ginter merely refers to a rights operating system
`that can “securely handle tasks” and has “rights and auditing operating
`system functions” without offering an adequate explanation as to how
`these tasks or functions involve the use of a digital certificate. See,
`e.g., Pet. 36–37.
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`Dec. at 16. Likewise, the Board held:
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`In summary, we are not persuaded that Petitioner has presented
`sufficient evidence to support a finding that Ginter’s trusted
`architecture including secure electronic appliances does not constitute
`a claimed “repository” that exhibits “behavioral integrity” because
`there is no indication Ginter’s rights operating system that securely
`handling tasks, including rights and auditing operating system
`functions, involves the use of a digital certificate.
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`Dec. at 18.
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`IPR2015-00354 – Petitioner’s Request for Rehearing
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`The Board, thus, did not appreciate that the grounds in the Petition had
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`contended it would have been obvious to modify the scheme described in Ginter,
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`not simply that Ginter in its unmodified form met the “behavioral integrity”
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`feature of “repositories.” The Decision, notably, makes no reference to pages 48-
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`49 of the Petition. That portion of the Petition, as explained above, makes clear
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`that one of the grounds being proposed in the Petition was that a person of ordinary
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`skill would have found it obvious to modify the Ginter scheme to use the
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`admittedly known and old technique of using digital certificates when installing
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`software on Ginter “trusted” devices to assure the integrity and security of those
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`devices. 1 The Petition supported this ground with both specific reasoning and
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`evidence – including specific citations to Ginter and identification of admitted
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`facts (i.e., that both repositories and the technique of providing “behavioral
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`integrity” by using digital certificates to install “repository” software were old and
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`conventional). The analysis of Ginter also was supported by focused (i.e., 2
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`1
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`Petitioner independently advanced the proposition that the Ginter devices
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`were “repositories” without further modification because they were “trusted
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`devices” with physical, communications and behavioral integrity and thus met the
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`precise functional attributes of “repositories.” Pet. at 28-29; see also 35-37.
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`IPR2015-00354 – Petitioner’s Request for Rehearing
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`pages), competent and credible expert testimony.
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`
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`In its preliminary response, the Patent Owner presented nothing to suggest
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`the arguments or evidence presented by Petitioner were in any way inaccurate.
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`Rather, Patent Owner presented a series of baseless or irrelevant assertions about
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`the Petition and evidence presented.2 Patent Owner then sought to defend the non-
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`obviousness of its claims by relying on the legally rejected premise that the prior
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`art must provide a “motivation” to make changes that were well known and
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`accepted techniques in the prior art that address identified needs in the field (e.g.,
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`enhanced security of the devices used in Ginter). See PO Preliminary Response at
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`56 (“While providing no evidence of any motivation to implement Ginter in
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`different ways…”). Likewise, Patent Owner, despite the admissions in the ‘280
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`patent, asserted “[t]he Petition provides no basis for the Board to fully evaluate
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`2
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`See, e.g., PO Preliminary Response (Paper 10) at 55 (“No citation to Ginter
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`is offered as evidence that it actually suggests any need or specific techniques for
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`providing greater security”); Id. (“Apple was required to come forward with
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`evidence and a rational explanation of it why it would have been obvious, at the
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`time of the ‘280 invention, to modify Ginter’s system to implement repositories
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`having behavioral integrity. It has not done so.”).
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`IPR2015-00354 – Petitioner’s Request for Rehearing
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`each proposed modification to Ginter, including whether the modification would
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`have been known or routine…” Id. Patent Owner also vaguely contended a
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`person of skill would find some challenge in making this one change to the Ginter
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`scheme, but did not identify any actual impediment in doing so. Id.
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`None of these assertions, if they were considered by the Board, would have
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`been sufficient to justify a decision to not institute trial on the basis of the grounds
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`and evidence presented in and with the Petition. Simply put, arguments that
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`contest admitted facts, mischaracterize the petition and the evidence, and rest on
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`legally rejected theories of non-obviousness cannot be given any weight in a
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`determination whether to institute trial or not. Doing so would be the epitome of
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`an abuse of discretion. Advanced Software Design Corp., 641 F.3d at 1380.
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`
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`Because the Petition fully satisfied the requirements of 35 U.S.C. § 311 and
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`37 CFR § 42.108 that there was a reasonable likelihood that the Petitioner would
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`prevail with respect to at least one of the claims challenged in the petition, and trial
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`should have been instituted on the basis of the grounds presented.
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`B. The Board Misapprehended the Expert Testimony and Its
`Relevance to the Grounds Presented
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`
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`As noted in § A, the Board overlooked the arguments and evidence in the
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`Petition explaining why a person of ordinary skill would have found it obvious to
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`modify Ginter’s “trusted” devices to use digital certificates when installing
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`software on those devices. The Board compounded its error by placing improper
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`IPR2015-00354 – Petitioner’s Request for Rehearing
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`reliance on Patent Owner’s contentions about the relevance and probity of the
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`opinions of Dr. Prakash. Here, the Board appeared to adopt Patent Owner’s
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`misleading assertion that Dr. Prakash’s opinions in ¶¶ 383-392 of his Declaration
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`rest on an “incorrect” interpretation of “behavioral integrity” and, thus, his
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`testimony about the teachings of Ginter and his descriptions of known security
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`techniques should, for some reason, not be entitled to any weight. See PO
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`Preliminary Response at 47-48; Dec. at 17 (“We also agree with Patent Owner
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`that, when attesting to the teachings of Ginter, Dr. Prakash applies a new definition
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`of “behavioral integrity” that is different from the Board’s previous definition, the
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`definition adopted by the district court, and the definition adopted for purposes of
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`this proceeding. See Prelim. Resp. 47–48.”)
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`Initially, the Board, at Patent Owner’s urging, appears to employ a standard
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`that is on its face impossible to meet – that an expert must somehow know the
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`precise constructions both the Board and a district court will adopt in the future
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`when he or she authors a declaration. Dec. at 17 (“Dr. Prakash does not explain
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`why he deviated from the Board’s previous definition of “behavioral integrity”
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`(see, e.g., Ex. 1041, 13), which eventually was adopted by the district court (Ex.
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`2001, 19–21) and adopted for purposes of this proceeding (see supra Section
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`II.A.1.)”). The Board did not appear to appreciate that neither the district court nor
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`the Board had actually adopted constructions of “repositories” or “behavioral
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`IPR2015-00354 – Petitioner’s Request for Rehearing
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`integrity” in the ‘280 patent at the time Dr. Prakash authored his opinion. The
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`Board did not seem to appreciate that ‘280 Patent has never been involved in an
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`IPR proceeding, and is not directly related to any Stefik patent – it does not claim
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`benefit under § 120 to any Stefik patent. Instead, it simply incorporates by
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`reference portions of two prior art Stefik patents. Disregarding qualified,
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`competent and probative expert testimony because it does not adhere to
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`constructions the PTAB or a court may adopt after the expert’s declaration has
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`been filed cannot be defended as a reasonable agency action, and finds no support
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`anywhere in the statute or rules governing IPR proceedings.
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`More directly, this criticism is entirely irrelevant. The portions of Dr.
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`Prakash’s testimony at issue (i.e., ¶¶ 383-392) are simply describing what is being
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`taught in Ginter or known in the art, and how the skilled person would interpret
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`those teachings and known techniques. None of Dr. Prakash’s testimony turns on
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`the construction of “behavioral integrity.” Rather, in these paragraphs, Dr. Prakash
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`explained why modifications to the Ginter scheme to incorporate well-known
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`security techniques would have been obvious based on the guidance within Ginter
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`itself.” Notably, Patent Owner levies no criticism of Dr. Prakash’s actual
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`description of Ginter’s teachings, the knowledge in the prior art or the views and
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`expectations of the skilled person. See PO Preliminary Response at 47-48
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`(criticizing use of different construction of “behavioral integrity” but not otherwise
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`14
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`IPR2015-00354 – Petitioner’s Request for Rehearing
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`disputing ¶¶ 383-393 of Prakash Declaration). Patent Owner logically could not –
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`the ‘280 patent admits this particular technique was publicly known at least by
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`1994. It was thus clear legal error for the Board to not give this probative expert
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`testimony about what Ginter teaches and suggests any weight based on its
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`supposed inconsistency between Dr. Prakash’s understanding of “behavioral
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`integrity” with a construction the Board later adopted.
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`V. CONCLUSION
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`Because the Board overlooked or failed to appreciate the arguments and
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`evidence presented in the Petition, and employed a legally impermissible standard
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`for evaluating expert testimony in support of the Petition, the Decision denying
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`institution of trial represents an abuse of discretion. Petitioner thus respectfully
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`requests that the Decision be set aside, and trial instituted on claim 1 of the ‘280
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`Patent.
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`Dated: July 31, 2015
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`Respectfully Submitted,
`
`/Jeffrey P. Kushan/
`Jeffrey P. Kushan
`Registration No. 43,401
`Sidley Austin LLP
`1501 K Street NW
`Washington, DC 20005
`Attorney for Petitioner
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`IPR2015-00354 – Petitioner’s Request for Rehearing
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`CERTIFICATE OF SERVICE
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`I hereby certify that on this 31st day of July, 2015, a copy of the foregoing
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`has been served in its entirety by E-mail on the following addresses for Patent
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`Owner:
`
`Timothy P. Maloney
`Email: tpmalo@fitcheven.com
`
`Nicholas T. Peters
`Email: ntpete@fitcheven.com
`
`Robert A. Cote
`Email: rcote@mckoolsmith.com
`
`
`
`
`
`/Jeffrey P. Kushan/
`Jeffrey P. Kushan
`Reg. No. 43,401
`Attorney for Petitioner
`
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`16