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`Filed on behalf of: Gold Standard Instruments, LLC Paper ____
`
`By:
`
`
`
` Date filed: June 3, 2015
`
`Joseph A. Hynds, Lead Counsel
`R. Elizabeth Brenner-Leifer, Back-up Counsel
`Steven Lieberman, Back-up Counsel
`Jason M. Nolan, Backup Counsel
`ROTHWELL, FIGG, ERNST & MANBECK, P.C.
`607 14th Street, N.W., Suite 800
`Washington, DC 20005
`Phone: 202-783-6040
`Facsimile: 202-783-6031
`Emails: jhynds@rothwellfigg.com
`
` ebrenner@rothwellfigg.com
`
` slieberman@rothwellfigg.com
`
` jnolan@rothwellfigg.com
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`______________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`______________________
`
`US ENDODONTICS, LLC,
`Petitioner,
`
`v.
`
`GOLD STANDARD INSTRUMENTS, LLC,
`Patent Owner.
`______________________
`
`Case IPR2015-00632
`Patent 8,727,773 B2
`______________________
`
`PATENT OWNER’S OPPOSITION TO PETITIONER’S MOTION FOR
`LEAVE TO ADD TWO REAL PARTIES IN INTEREST
`
`
`Mail Stop PATENT BOARD
`Patent Trial and Appeal Board
`U.S. Patent & Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`
`
`
`
`Case IPR2015-00632
`Patent 8,727,773 B2
`
`Table of Contents
`
`Table of Authorities .................................................................................................. ii
`I.
`Introduction and Summary of Argument ........................................................ 1
`II.
`Undisputed evidence shows that Petitioner should have identified Edge
`Endo and Guidance as real parties in interest. ................................................. 2
`Petitioner’s motion should be denied, and its petition dismissed, because
`it has not shown good cause for its late identification of Edge Endo and
`Guidance as real parties in interest. ................................................................. 6
`IV. Conclusion ..................................................................................................... 10
`
`
`III.
`
`i
`
`
`
`Table of Authorities
`
`Case IPR2015-00632
`Patent 8,727,773 B2
`
`Cases
`
`Askeladden LLC v. McGhie,
`IPR2015-00122, slip op. (PTAB Mar. 6, 2015) (Paper 30) ........................... 3, 10
`
`Atlanta Gas Light Co. v. Bennett Regulator Guards, Inc.,
`IPR2013-00453, slip op. (PTAB Jan. 6, 2015) (Paper 88) ........................... 3, 8, 9
`
`Dealersocket, Inc. v. AutoAlert LLC,
`CBM2014-00142, slip op. (PTAB Sept. 8, 2014) (Paper 10) ................................ 7
`
`GEA Process Eng’g, Inc. v. Steuben Foods, Inc.,
`IPR2014-00041, slip op. (PTAB Dec. 23, 2014) (Paper 135) ...........................3, 8
`
`Intellectual Ventures II LLC v. JP Morgan Chase & Co.,
`781 F.3d 1372 (Fed. Cir. 2015) .............................................................................. 8
`
`Nintendo of Am. Inc. v. Motion Games, LLC,
`IPR2014-00164, slip op. (PTAB May 15, 2015) (Paper 51) ................................. 8
`
`Paramount Home Entm’t Inc. v. Nissim Corp.,
`IPR2014-00961 (PTAB Dec. 29, 2014) (Paper 11) ............................................... 3
`
`Reflectix, Inc. v. Promethean Insulation Tech. LLC,
`IPR2015-00039, slip op. (PTAB Apr. 24, 2015) (Paper 18) ........................ 6, 7, 8
`
`Smart Modular Techs. Inc. v. Netlist, Inc.,
`IPR2014-01372, slip op. (PTAB May 26, 2015) (Paper 18) ................................ 7
`
`Sony Computer Entm’t Am. LLC v. Game Controller Tech. LLC,
`IPR2013-00634, slip op. (PTAB Apr. 2, 2015) (Paper 31) .................................. 9
`
`Zerto, Inc. v. EMC Corp.,
`IPR2014-01254, slip op. (PTAB Mar. 3, 1015) (Paper 35) ................................... 3
`
`Statutes
`
`35 U.S.C. § 312(a)(2) .............................................................................................6, 8
`
`35 U.S.C. § 315(b) ............................................................................................ 2, 8, 9
`
`35 U.S.C. § 315(e) .................................................................................................2, 9
`
`ii
`
`
`
`Case IPR2015-00632
`Patent 8,727,773 B2
`
`Other Authorities
`
`37 C.F.R. § 42.104 ..................................................................................................... 6
`
`37 C.F.R. § 42.106 .................................................................................................6, 8
`
`37 C.F.R. § 42.106(a) .......................................................................................... 6, 10
`
`37 C.F.R. § 42.11 ....................................................................................................... 9
`
`37 C.F.R. § 42.5 .....................................................................................................6, 8
`
`37 C.F.R. § 42.5(c)(3) ................................................................................................ 6
`
`37 C.F.R. § 42.8(a)(1) ................................................................................................ 6
`
`37 C.F.R. § 42.8(a)(3) ................................................................................................ 6
`
`Rules
`
`Changes to Implement IPR Procs., PGR Procs., and Transitional Prog. for CBM
`Pats.,
`77 Fed. Reg. 48680 (Aug. 14, 2012) ...................................................................... 9
`
`Office Patent Trial Practice Guide,
`77 Fed. Reg. 48756 (Aug. 14, 2012) ...................................................................... 3
`
`iii
`
`
`
`Case IPR2015-00632
`Patent 8,727,773 B2
`
`I.
`
`Introduction and Summary of Argument.
`
`Patent Owner respectfully requests that the Board deny Petitioner’s Motion
`
`for Leave to Add Two Real Parties in Interest (Paper 15) to its Petition for Inter
`
`Partes Review of Patent 8,727,773, and dismiss its Petition. Petitioner already has
`
`had two opportunities to file a complete petition that identifies its sister companies,
`
`Edge Endo, LLC and Guidance Endodontics, LLC, as real parties in interest.
`
`Petitioner has not shown good cause for its late action.
`
`Dentsply International Inc. and its subsidiary, Tulsa Dental Products LLC
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`(collectively “Dentsply”), have sued to enjoin Petitioner from manufacturing
`
`products that Guidance developed and Edge Endo sells to the public. Dr. Charles
`
`Goodis owns and controls all three companies. Their interests are unified.
`
`Petitioner offers nothing more than attorney argument that its sister companies
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`have no involvement in, or control over, its Petition to justify its position that they
`
`do not constitute real parties in interest. Paper 15 at 1, 3. Petitioner’s inability to
`
`proffer any explanation or evidence to show that its failure to identify Edge Endo
`
`and Guidance as real parties in interest was justified shows a lack of good cause for
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`their late identification, and also belies Petitioner’s assertion that it is conceding
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`the issue only to save time and expense. Id. at 1, 2. Moreover, that Petitioner
`
`continues to maintain that Edge Endo and Guidance do not constitute real parties in
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`interest also shows that these companies would have disputed the application of the
`
`1
`
`
`
`Case IPR2015-00632
`Patent 8,727,773 B2
`estoppel and time bar provisions, 35 U.S.C. §§ 315(b) and (e), to Edge Endo and
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`Guidance in future lawsuits and petitions had Patent Owner not brought this
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`challenge.
`
`None of Petitioner’s arguments for permitting it to add real parties in interest
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`address the issue of whether good causes exists for its late action. Petitioner
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`conflates the issue of whether it has shown good cause for its late action with the
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`issue of whether there is prejudice to Patent Owner and the issue of what date its
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`Petition should be given in the event that the Board does excuse its late action.
`
`II. Undisputed evidence shows that Petitioner should have identified Edge
`Endo and Guidance as real parties in interest.
`
`Patent Owner Gold Standard Instruments, LLC exclusively licensed the ’773
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`patent to Dentsply. Ex. 2001, 58. Dentsply sued Petitioner for infringement of the
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`’773 patent on June 24, 2014, and has sought a preliminary injunction based on
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`Petitioner’s inability to pay a damages award. Paper 2 at 1; Ex. 2019, ¶ 13.
`
`Petitioner filed this Petition for Inter Partes Review of the ’773 patent on
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`January 30, 2015. Petitioner sought leave two weeks later to amend its petition to
`
`identify as real parties in interest its two owners, Dr. Charles Goodis and Bobby
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`Bennett. See Petitioner’s Corrected Mandatory Notices (Paper 8). Petitioner still
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`did not identify as real parties in interest two sister companies also owned by Dr.
`
`Goodis: (1) Edge Endo, which purchases endodontic file shanks that Petitioner
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`heat-treats with the method accused of infringing the ’773 patent, and then sells the
`
`2
`
`
`
`Case IPR2015-00632
`Patent 8,727,773 B2
`heat-treated files to the public; and (2) Guidance—which developed the product
`
`specification. Petitioner did not seek leave to amend its petition to add Edge Endo
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`and Guidance as real parties in interest until after Patent Owner filed its
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`Preliminary Response asking that the Petition be denied, inter alia, for failure to
`
`identify all real parties in interest.
`
`Office guidance and Board precedent state that real parties in interest include
`
`parent and sister companies that have a sufficient opportunity to control the
`
`proceeding. See Patent Owner’s Preliminary Response at 53-54 (Paper 9); Office
`
`Patent Trial Practice Guide, 77 Fed. Reg. 48756, 48759 (Aug. 14, 2012); GEA
`
`Process Eng’g, Inc. v. Steuben Foods, Inc., IPR2014-00041, slip op. at 18 (PTAB
`
`Dec. 23, 2014) (Paper 135) (“GEA Process”) (parent and sister companies were
`
`real parties in interest); see also Askeladden LLC v. McGhie, IPR2015-00122, slip
`
`op. at 13-14 (PTAB Mar. 6, 2015) (Paper 30); Zerto, Inc. v. EMC Corp., IPR2014-
`
`01254, slip op. at 11 (PTAB Mar. 3, 1015) (Paper 35); Atlanta Gas Light Co. v.
`
`Bennett Regulator Guards, Inc., IPR2013-00453, slip op. at 9 (PTAB Jan. 6, 2015)
`
`(Paper 88) (“Atlanta Gas”); Paramount Home Entm’t Inc. v. Nissim Corp.,
`
`IPR2014-00961, slip op. at 8 (PTAB Dec. 29, 2014) (Paper 11).
`
`Petitioner has not denied any of the facts that Patent Owner alleged in its
`
`Preliminary Response to establish that Edge Endo and Guidance have sufficient
`
`opportunity to control the proceeding and thus constitute real parties in interest.
`
`3
`
`
`
`Case IPR2015-00632
`Patent 8,727,773 B2
`Petitioner does not deny that Dr. Goodis owns and controls Edge Endo and
`
`
`
`Guidance, or that all three companies share the same office, the same
`
`employee to do their accounting and manage their operations, and the same
`
`lawyers. See Paper 15 at 3, 4; Paper 9 at 55 (citing Ex. 2002, 173; Ex. 2007,
`
`1-3; Ex. 2008, ¶¶ 2, 14; Ex. 2009; Ex. 2010; Ex. 2011; Ex. 2013, 1; Ex.
`
`2014, 36; Paper 8).
`
`
`
`Petitioner does not deny that all three companies work together to develop,
`
`manufacture, and sell endodontic files manufactured by a method that has
`
`been accused of infringing the ’773 patent. Paper 15 at 3.1
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`1 Petitioner does not deny that: (1) Edge Endo purchases nickel titanium
`
`endodontic file shanks; (2) Petitioner heat-treats the shanks with a method alleged
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`to infringe the ‘773 patent; (3) Edge Endo then sells the accused files to the public
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`under the trade name EdgeFile™ and advertises EdgeFiles™ with mechanical
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`testing performed by Petitioner; (4) Edge Endo markets the accused files as lower-
`
`cost substitutes for the nickel titanium endodontic rotary files offered by Dentsply
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`and others; (5) Edge Endo specifically markets Petitioner’s files as having
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`precisely the same advantage that the inventor, Dr. Luebke, found resulted from his
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`patented heat-treatment process—increased durability; (6) Petitioner is FDA-
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`registered as the “Owner/Operator” of Edge Endo’s EdgeFiles™; (7) Petitioner
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`performs no research or development of its own; (8) Guidance is FDA registered as
`
`4
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`
`
`Case IPR2015-00632
`Patent 8,727,773 B2
`Petitioner does not deny that its revenue for the accused products depends on
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`
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`EdgeEndo’s sales of those products to the public; that it does not generate a
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`significant amount of revenue; or that it is not capable of financing the
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`requested inter partes review alone. See Paper 9 at 56 (citing Ex. 2002, 131,
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`180-81; Ex. 2014, 221-2).
`
`
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`Petitioner does not deny that Edge Endo and Guidance fund its petition
`
`either directly or indirectly through Dr. Goodis. See id. at 56.
`
`Petitioner offers nothing more than attorney argument that Edge Endo and
`
`Guidance have had no involvement in, or control over, its Petition to justify not
`
`identifying them as real parties in interest. Paper 15 at 1, 3. Petitioner does not
`
`cite any evidence or precedent to support its position, which is contrary to the
`
`Office’s guidance and Board’s precedent. Petitioner does not deny the unified
`
`interests of the companies or that Edge Endo and Guidance have an opportunity to
`
`control the proceeding. Petitioner’s counsel also is counsel to Edge Endo and
`
`Guidance, and does not claim ignorance of the underlying facts.
`
`
`the “Specification Developer” of the accused EdgeFiles™. See Paper 9 at 55-56
`
`(citing Ex. 2001, 262; Ex. 2002, 131; Ex. 2006, ¶¶ 14-15; Ex. 2014, 60-61, 67, 71,
`
`79-80, 93, 145, 149-50, 187; Ex. 2012, 1-2; Ex. 2015; Ex. 2016; Ex. 2017, 1-2; Ex.
`
`2018; Ex. 2019, ¶¶ 8-9).
`
`5
`
`
`
`Case IPR2015-00632
`Patent 8,727,773 B2
`III. Petitioner’s motion should be denied, and its petition dismissed, because
`it has not shown good cause for its late identification of Edge Endo and
`Guidance as real parties in interest.
`
`Under Rule 42.106, an incomplete petition will not be accorded a filing date
`
`and must be dismissed. Identification of all real parties in interest is a mandatory
`
`requirement for a complete petition. 35 U.S.C. § 312(a)(2); Rules 42.106(a),
`
`42.104, 42.8(a)(1). The only provision for subsequently updating the identification
`
`of real parties in interest is within 21 days of a change in the status of a party or
`
`real party in interest. Rule 42.8(a)(3). No change in status has occurred here.
`
`Rule 42.5(c)(3) allows the Board to excuse Petitioner’s late action on a
`
`showing of good cause. It provides in pertinent part as follows:
`
`Rule 42.5 Conduct of the Proceeding.
`
`(c) Times.
`
`(3) Late action. A late action will be excused on a showing of good
`
`cause or upon a Board decision that consideration on the merits would
`
`be in the interests of justice.
`
`Under Rule 42.5(c)(3), to avoid dismissal Petitioner must establish good
`
`cause for its late identification of all real parties in interest, or the Board must
`
`decide that excusing its late action would be in the interests of justice. Reflectix,
`
`Inc. v. Promethean Insulation Tech. LLC, IPR2015-00039, slip op. at 3 (PTAB
`
`Apr. 24, 2015) (Paper 18) (“Reflectix”); Dealersocket, Inc. v. AutoAlert LLC,
`
`6
`
`
`
`Case IPR2015-00632
`Patent 8,727,773 B2
`CBM2014-00142, slip op. at 6 (PTAB Sept. 8, 2014) (Paper 10).
`
`The issue here is whether Petitioner’s “original failure to name all [real
`
`parties in interest] was reasonable and, therefore, excusable.” Reflectix, slip op. at
`
`17; see also id. at 15 (“Reflectix’s incorrect RPI determination was not objectively
`
`reasonable, and cannot support good cause justifying late action.”). A patent
`
`owner’s challenge to the petitioner’s identification of the real parties in interest, in
`
`itself, does not constitute good cause for petitioner to add real parties in interest.
`
`Smart Modular Techs. Inc. v. Netlist, Inc., IPR2014-01372, slip op. at 3 (PTAB
`
`May 26, 2015) (Paper 18).
`
`Petitioner does not proffer any evidence that it had good cause to believe
`
`that Edge Endo and Guidance do not constitute real parties in interest such that the
`
`Board should excuse their late identification. Nor does Petitioner argue that it
`
`would be in the interests of justice for the Board to excuse their late identification.
`
`Petitioner’s four arguments that good cause exists should be rejected
`
`because none of them addresses the issue of whether its failure to name Edge Endo
`
`was reasonable and therefor excusable. First, Petitioner mischaracterizes the
`
`correct identification of all real parties in interest as an “ancillary issue” when
`
`arguing that granting Petitioner’s motion would streamline the proceeding. Paper
`
`15 at 5. Correct identification of all real parties in interest is a substantive,
`
`threshold requirement for institution of a proceeding. Reflectix, slip op. at 8;
`
`7
`
`
`
`Case IPR2015-00632
`Patent 8,727,773 B2
`Atlanta Gas Light, slip op. at 7-8; GEA Process, slip op. at 23. “The AIA contains
`
`a direct sanction against petitions that do not identify all RPIs, stating
`
`unambiguously that the petitions may not be ‘considered.’ 35 U.S.C. § 312(a)(2).”
`
`Reflectix, slip op. at 17. There is no proceeding to streamline unless and until the
`
`Board grants a petition and institutes trial. Intellectual Ventures II LLC v. JP
`
`Morgan Chase & Co., 781 F.3d 1372, 1377 (Fed. Cir. 2015).
`
`Second, contrary to Petitioner’s assertion, good cause for excusing its late
`
`action does not turn on whether Petitioner is time barred under § 315(b) from filing
`
`a new petition. Section 315(b) does not provide for correction of an incomplete
`
`petition, and Petitioner’s logic defeats the statutory and regulatory requirement that
`
`all real parties in interest be identified in the petition at the outset. 35 U.S.C. §
`
`312(a)(2); Rule 42.106. If Petitioner were correct, then all late identifications of
`
`real parties in interest would be permitted unless the petitioner were time barred
`
`from filing a petition under § 315(b); and § 312(a)(2) and Rules 42.5 and 42.106
`
`would be toothless.
`
`Third, contrary to Petitioner’s assertion, good cause for its late action does
`
`not depend on finding prejudice to Patent Owner. Arguing that Patent Owner has
`
`not been prejudiced, without providing facts that show good cause for its late
`
`action, is insufficient. Nintendo of Am. Inc. v. Mot. Games, LLC, IPR2014-00164,
`
`slip op. at 26-27 (PTAB May 15, 2015) (Paper 51). In any case, the prejudice to
`
`8
`
`
`
`Case IPR2015-00632
`Patent 8,727,773 B2
`Patent Owner is the substantial time and money it has expended to fight
`
`Petitioner’s unjustified position regarding this important threshold issue with
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`important estoppel and time bar ramifications under §§ 315(b) and (e).
`
`Moreover, Petitioner minimizes how accepting its position would undermine
`
`the integrity of the inter partes review process. The Board has recognized that
`
`allowing a petitioner to freely add real parties in interest when challenged by the
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`patent owner may encourage concealment of real parties in interest at the time of
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`filing. Atlanta Gas Light, slip op. at 14. It essentially eliminates any negative
`
`consequence to a petitioner’s failure to comply with the real party in interest rule
`
`and with its duty of candor. Petitioner’s argument that the duty of candor is
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`sufficient to ensure compliance and protect a patent owner’s interests is disproved
`
`by Petitioner’s own citation of two other cases where petitioners played “fast and
`
`loose” in identifying the real parties in interest. See Paper 15 at 8. And
`
`Petitioner’s suggestion that Patent Owner could have waited to raise the real party
`
`in interest issue in its Patent Owner Response (when Petitioner would have been
`
`time barred) is contrary to Office guidance and Board precedent. See Changes to
`
`Implement IPR Procs., PGR Procs., and Transitional Prog. for CBM Pats., 77 Fed.
`
`Reg. 48680, 48695 (Aug. 14, 2012); Sony Comp. Entm’t Am. LLC v. Game
`
`Controller Tech. LLC, IPR2013-00634, slip op. at 3-4 (PTAB Apr. 2, 2015) (Paper
`
`31).
`
`9
`
`
`
`Case IPR2015-00632
`Patent 8,727,773 B2
`Fourth, Petitioner’s argument that good cause exists for maintaining its
`
`original filing date conflates the issue of good cause for its late action (which
`
`Petitioner has not demonstrated) with the issue of what date its Petition should be
`
`given if the Board does excuse its late action. Moreover, in the event that the
`
`Board does grant Petitioner’s motion, then, under Rule 42.106(a), the Petition and
`
`Patent Owner’s Preliminary Response both should be accorded a new filing date
`
`that is the same date that the identification is corrected. See Askeladden LLC v.
`
`McGhie, IPR 2015-00122, slip op. at 2 (PTAB Mar. 16, 2015) (Paper 34).
`
`IV. Conclusion
`Petitioner’s Motion for Leave to Add Two Real Parties In Interest should be
`
`denied, and its Petition should be dismissed, because it has failed to show good
`
`
`
`
`
`
`
`
`
`/ Joseph A. Hynds /
`Joseph A. Hynds, Reg. No. 34,627
`ROTHWELL, FIGG, ERSNT & MANBECK, P.C.
`607 14th Street, N.W., Suite 800
`Washington, D.C. 20005
`Phone: 202-783-6040
`Facsimile: 202-783-6031
`
`cause for its late action.
`
`Date: June 3, 2015
`
`By:
`
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`Respectfully submitted,
`
`Counsel for Patent Owner
`Gold Standard Instruments, LLC
`
`10
`
`
`
`Case IPR2015-00632
`Patent 8,727,773 B2
`
`CERTIFICATE OF SERVICE
`I hereby certify that on this 3rd day of June, 2015, a true and correct copy of
`
`the foregoing PATENT OWNER’S OPPOSITION TO PETITIONER’S MOTION
`
`FOR LEAVE TO ADD TWO REAL PARTIES IN INTEREST was served, via
`
`electronic mail upon the following counsel for Petitioner US Endodontics, LLC:
`
`Jeffrey S. Ginsberg, Esq.
`Matthew G. Berkowitz, Esq.
`Eric T. Schreiber, Esq.
`Kenyon & Kenyon LLP
`One Broadway
`New York, NY 10004
`Phone: 212-425-7200
`Facsimile: 212-425-5288
`Emails: jginsberg@kenyon.com
`mberkowitz@kenyon.com
`eschreiber@kenyon.com
`
`
`
`
` /
`
` Erik van Leeuwen /
`Erik van Leeuwen
`Litigation Operations Coordinator
`Rothwell, Figg, Ernst & Manbeck, P.C.
`
`
`
`
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`1
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`
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