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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`_______________
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`BUNGIE, INC.,
`Petitioner
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`v.
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`WORLDS INC.,
`Patent Owner
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`_______________
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`Case IPR2015-01319
`Patent 8,082,501
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`_______________
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`PATENT OWNER‘S MOTION TO EXCLUDE
`PETITIONER’S EVIDENCE UNDER 37 C.F.R. § 42.64(c)
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`Under 35 U.S.C. § 311(b), the scope of an inter partes reivew entitles a
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`petitioner to challenge patent claims “only on a ground that could be raised under
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`section 102 or 103 and only on the basis of prior art consisting of patents or printed
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`publications.” Despite these restrictions, Petitioner here has embarked on what can
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`only be referred to as a litigation-style “smear campaign,” with character attacks
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`designed to tanish the reputations of Patent Owner Worlds Inc., its CEO Thom
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`Kidrin, and its technical expert Mark Pesce before the Board. Of the five exhibits
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`subject to this motion to exclude, four are directed to character “evidence” that
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`falls outside the scope of any inter partes review and has no bearing on the
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`question of whether Patent Owner’s claims are patentable “only on a ground that
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`could be raised under section 102 or 103 and only on the basis of prior art
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`consisting of patents or printed publications.” 35 U.S.C. § 311(b).
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`The Office Patent Trial Practice Guide explains that “the Office’s goal is to
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`conduct the proceedings in a timely, fair, and efficient manner.” Office Patent
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`Trial Practice Guide, 77 Fed. Reg. 48756 (Aug. 14, 2012) (emphasis added). The
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`Board has consistently embraced this goal of fairness, not only in procedures
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`designed to ensure fair outcomes but also in the manner in which cases are carried
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`out. But here, Bungie infects the proceedings with exhibits having no bearing on
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`the facts of this proceeding, or any other proceeding for that matter. The fair and
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`1
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`legally correct action with respect to these exhibits is for the Board to exclude
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`them from the record.
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`Accordingly, Patent Owner timely moves to exclude the following five of
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`Petitioner’s Exhibits as set forth below:
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`Exhibit 1033 – Business Wire Article
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`1. Identity of the exhibit and portion thereof sought to be excluded: Website
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`article: “Worlds.com Sues NCSoft for Infringing Key Virtual Worlds
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`Patent,” published on Business Wire, December 31, 2008,
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`http://www.businesswire.com/news/home/20081231005197/en/Worlds.c
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`om-Sues-NCSoft-Infringing-Key-Virtual-Worlds#.VczjsWfjDTs; Patent
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`Owner moves for exclusion of the full exhibit.
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`2. Objection: Fed. R. Evid. 402/403.
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`3. Timely objection was made in Patent Owner’s Objections filed
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`December 14, 2015. (Paper 16 at 5).
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`4. In Petitioner’s Opposition to Patent Owner’s Motion for Routine or
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`Additional Discovery (Paper 10 at 2), Petitioner relies upon Ex. 1033 for
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`its unsupported allegation that Patent Owner is a “notorious patent
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`assertion entity, known in the videogame industry for aggressively
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`threatening and asserting through litigation the patents at issue in the
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`current IPRs.” Id. Namely, Petitioner is attacking the character of the
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`Patent Owner through this evidence and argument. Neither is relevant to
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`the proceeding.
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`5. Exhibit 1033 has no probative weight on any “fact that is of consequence
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`to the determination” in this proceeding. See Fed. R. Evid. 401.
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`Specifically, Ex. 1033 is not relevant to content of the claims being
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`challenged, to the content of the prior art, or to any other issue to be
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`decided by the Board. Petitioner’s only use of this evidence is in support
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`of its attack of Patent Owner’s character, which is not relevant to the
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`outcome or to any underlying issue in this proceeding. The existence of a
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`prior lawsuit brought by Patent Owner on a valid U.S. Patent has no
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`bearing on whether claim 1 of the ‘856 patent is patentable. Irrelevant
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`evidence is inadmissible. Fed. R. Evid. 402. Exhibit 1033’s irrelevance
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`is further supported by Fed. R. Evid. 405. In that rule, specific instances
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`of conduct are only admissible where character of a person “is an
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`essential element of a charge, claim, or defense … .” The character of
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`Patent Owner as an entity (or the character of its CEO) is not an essential
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`element to this proceeding, and indeed has no bearing on the outcome.
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`6. Even if the Board believes that Ex. 1033 is relevant to any issue in this
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`proceeding (which Patent Owner denies), Ex. 1033 should be excluded
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`under Fed. R. Evid. 403 since the risk of unfair prejudice due to Ex. 1033
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`substantially outweighs any probative value. Patent Owner’s decision to
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`file suit against NCSoft on a valid and issued U.S. Patent No. 7,181,690
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`in 2008 does not justify Petitioner’s hyperbole in characterizing Patent
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`Owner as “notorious” and “aggressively threatening.” The unfair
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`prejudice that may spring from these unfounded characterizations—
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`namely, the unfair prejudice that the Board would conclude that Patent
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`Owner or its CEO is a “bad actor” as a result of its prior lawsuit to
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`enforce a patent—substantially outweighs any probative value of Ex.
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`1033.
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`7. Accordingly, Ex. 1033 should be excluded under Fed. R. Evid. 402, or at
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`minimum under Fed. R. Evid. 403.
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`Exhibit 1034 – Business Insider
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`1. Identity of the exhibit and portion thereof sought to be excluded: Website
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`article by Krangel, Eric, published on Business Insider, December 31,
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`2008, http://www.businessinsider.com/worldscom-ceo-were-absolutely-
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`going-to-sue-second-life-and-world-of-warcraft-2009-3; Patent Owner
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`moves for exclusion of the full exhibit.
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`2. Objection: Fed. R. Evid. 402, 403, 801.
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`4
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`3. Timely objections were made in Patent Owner’s Objections filed
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`December 14, 2015. (Paper 16 at 5).
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`4. Like Ex. 1033, Petitioner relies upon Ex. 1034 to attack the character of
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`Patent Owner, and more specifically Patent Owner’s CEO through this
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`evidence and argument. This evidence is irrelevant to the proceeding.
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`Further, the only word in the entire Ex. 1034 that is allegedly attributed
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`to Patent Owner’s CEO is “absolutely.” The rest of the article originates
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`from the keyboard of Eric Krangel, who is not a witness in this case and
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`(at least based on the content of the article) possesses no knowledge on
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`whether the challenged claims are actually patentable.
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`5. Exhibit 1034 also has no probative weight on any “fact that is of
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`consequence to the determination” in this proceeding. See Fed. R. Evid.
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`401. Specifically, like Ex. 1033, Ex. 1034 is not relevant to content of
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`the claims being challenged in this proceeding, to the content of the prior
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`art, or to any other issue to be decided. Irrelevant evidence is
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`inadmissible. Fed. R. Evid. 402.
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`6. Even if the Board believes that Ex. 1034 is relevant to any issue in this
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`proceeding (which Patent Owner denies), Ex. 1034 should be excluded
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`under Fed. R. Evid. 403. Exhibit 1034 is an opinion piece at best, casting
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`aspersions on Patent Owner without any underlying basis. For example,
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`Ex. 1034 postulates, “we can’t imagine the potential targets of any patent
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`infringement action will interpret the demand for licensing fees as
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`anything less than a legal shakedown.” Ex. 1034 at 2. But Krangle
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`writes this without setting forth any knowledge about the identification or
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`content of the patent claims, the nature of the prior art, the workings of
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`the virtual worlds industry, or the merits of any infringement allegations
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`(see Fed. R. Evid. 602). This Ex. 1034 is designed specifically to create
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`unfair prejudice against Patent Owner.
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`7. Exhibit 1034 also contains inadmissible hearsay and should be excluded
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`under Fed. R. Evid. 801. The article of Exhibit 1034 was written by Eric
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`Krangel, who is not a witness in this case and appears to have no stated
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`firsthand knowledge of any facts reported in the article. Further, Krangel
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`allegedly quotes Patent Owner’s CEO, Thom Kidrin, but the sole word
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`allegedly attributable to Kidrin is “absolutely.” See Ex. 1034. There is
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`no evidence in Ex. 1034 that any other statements were actually
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`attributed to Kidrin. Further confirming the inadmissibility and
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`irrelevance of Ex. 1034, Petitioner took the deposition of Mr. Kidrin in
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`this proceeding but never asked about Ex. 1034 or the statements
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`allegedly attributed to Mr. Kidrin. See Ex. 1047. These out-of-court
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`statements by Krangel are inadmissible as hearsay.
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`8. Accordingly, Ex. 1034 should be excluded under Fed. R. Evid. 402 or
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`Fed. R. Evid. 403, and also under Fed. R. Evid. 801.
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`Exhibit 1041 – Interview of Mark Pesce
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`1. Identity of the exhibit and portion thereof sought to be excluded or
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`stricken: Article: “Psychedelics and the Creation of Virtual Reality,” Ex.
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`1041. Patent Owner moves for exclusion of the full exhibit.
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`2. Objection: Fed. R. Evid. 402, 403, 404, 405, 608.
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`3. Timely objections were made in Patent Owner’s Objections, filed on
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`May 23, 2016 (Paper 29) and confirmed on July 1, 2016 (Paper 32).
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`4. Petitioner relies upon this article to allegedly cast doubt into Mark
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`Pesce’s qualifications as an expert in this case. For example, Ex. 1041 is
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`cited in the Reply paragraph that begins “It is not clear how Mr. Pesce
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`qualifies as an expert in this field.” Reply at 3. Petitioner goes on to
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`insinuate that Mr. Pesce was unable to recall “events during the period
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`relevant to the Worlds patents.” Id. But contrary to Petitioner’s
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`commentary, Mr. Pesce never testified that he was unable to recall
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`technical facts from the 1990s based on any use of psychedelic drugs,
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`and Ex. 1041 does not undermine his status as co-inventor of VRML (see
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`Ex. 1046 at 41:18-43-20; 56:8-57:10). Ex. 1041 also does not support
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`Petitioner’s unsupported allegation that Mr. Pesce was a “heavy” user of
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`psychedelic drugs.
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`5. Like Exs. 1033 and 1034, Ex. 1041 represents an instance of Bungie’s
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`intention to attack Mr. Pesce through irrelevant and improper evidence
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`directed to general character and specific instances of conduct, rather
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`than to his qualifications to testify on the knowledge and understanding
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`of a person of ordinary skill in the art. See Fed. R. Evid. 402, 404, 405,
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`608. Moreover, Bungie improperly uses Mr. Pesce’s election to invoke
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`the privilege against incriminating comments under the United States
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`Constitution (see Ex. 1046 at 50:6-24) against him. See Reply at 3 (“Mr.
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`Pesce was unwilling to address … .”).
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`6. Even if the Board believes that Ex. 1041 is relevant to any issue in this
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`proceeding (which Patent Owner denies), Ex. 1041 should be excluded
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`under Fed. R. Evid. 403 since the risk of unfair prejudice due to Ex. 1041
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`substantially outweighs any probative value. The unfair prejudice that
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`may spring from these unfounded characterizations—namely, that Mr.
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`Pesce’s entire testimony would be entitled to no weight due to any use of
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`psychedelics—substantially outweighs any probative value of Ex. 1041.
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`Exhibit 1042 – Cyber Samhain Invitation
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`1. Identity of the exhibit and portion thereof sought to be excluded or
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`stricken: Cyber Samhain Invitation, WWW-VRML 1994,
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`http://1997.webhistory.org/www.lists/wwwvrml.1994/0642.html, Ex.
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`1042. Patent Owner moves for exclusion of the full exhibit.
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`2. Objection: Fed. R. Evid. 402.
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`3. Timely objections were made in Patent Owner’s Objections, filed on
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`May 23, 2016 (Paper 29) and confirmed on July 1, 2016 (Paper 32).
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`4. Exhibit 1042 has no probative weight on any “fact that is of consequence
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`to the determination” in this proceeding. See Fed. R. Evid. 401.
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`Petitioner does not cite to it in its Reply or in any other paper filed with
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`its Reply. See Reply (Paper 31).
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`Exhibit 1037 – Alternate Version of Funkhouser ‘95
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`1. Identity of the exhibit and portion thereof sought to be excluded: Thomas
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`A. Funkhouser, RING: A Client-Server System for Multi-User Virtual
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`Environments (alternate version). Patent Owner moves for exclusion of
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`the full exhibit.
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`2. Objection: Fed. R. Evid. 402.
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`3. Timely objections were made in Patent Owner’s Objections, filed
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`February 19, 2016 (Paper 19) and confirmed on July 1, 2016 (Paper 32).
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`Patent Owner also objected to the use of Ex. 1037 on redirect
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`examination at the deposition of Dr. Zyda. Ex. 2016 at 266:6-20.
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`4. A copy of the article referred to as “Funkhouser ’95” was filed with the
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`Petition as Ex. 1005. However, Ex. 1005 lacked certain disclosures that
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`were attributed to it by Petitioner and its declarant, Dr. Zyda. The Board
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`concurred. See Inst. Dec. at 15 n.4. During the post-institution
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`deposition of Dr. Zyda, counsel for Petitioner produced a new version of
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`Funkhouser ’95, allegedly retrieved on February 11, 2016 from Professor
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`Funkhouser’s website (see Ex. 1038, ¶ 8; Ex. 2016 at 269:5-7), and this
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`new version has been marked as Ex. 1037. Id.
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`5. Exhibit 1037 has not been established to be prior art within the meaning
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`of pre-AIA 35 U.S.C. § 102 for this proceeding, has not been proven to
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`be a “printed publication” within the meaning of pre-AIA 35 U.S.C. §
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`102, and was not included with the Petition as required under 37 C.F.R. §
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`42.104(b)(5). Further, though Petitioner was aware of the defects in Ex.
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`1005 at least as of the date of Patent Owner’s Preliminary Response,
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`Petitioner did not move to introduce Ex. 1037 into the record as
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`supplemental evidence or supplemental information under 37 C.F.R. §
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`10
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`42.64(b)(2), or 37 C.F.R. § 42.123, respectively. Each of these factors
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`confirms that Ex. 1037 is not relevant to any issue in this proceeding, and
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`should not be relied upon by the Board. See Inst. Dec. at 15 n.4.
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`6. Moreover, even Dr. Zyda has agreed that Ex. 1037 is not relevant to his
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`opinions. See Reply (Paper 31) at 14; ex. 1038 at ¶¶ 16-17. Therefore,
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`Ex. 1037 should be excluded as irrelevant under Fed. R. Evid. 401 and
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`not considered by the Board.
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`Respectfully submitted,
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`By: /s/ Wayne M. Helge
`Wayne M. Helge (Reg. No. 56,905)
`Davidson Berquist Jackson & Gowdey, LLP
`8300 Greensboro Drive, Suite 500
`McLean, VA 22102
`Telephone: 571-765-7700
`Fax: 571-765-7200
`Email: whelge@dbjg.com
` Counsel for Patent Owner
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`Dated: July 18, 2016
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`CERTIFICATE OF SERVICE
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`I hereby certify that on July 18, 2016, a true and correct copy of the
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`foregoing MOTION TO EXCLUDE PETITIONERS’ EVIDENCE is being served
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`via email by consent to the Petitioners at the correspondence addresses of record as
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`follows:
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`Matthew A. Argenti
`Reg. No. 61,836
`Wilson Sonsini Goodrich & Rosati
`650 Page Mill Road
`Palo Alto, CA 94304
`Telephone: (650) 354-4154
`Facsimile: (650) 493-6811
`E-mail: margenti@wsgr.com
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`
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`Michael T. Rosato
`Reg. No. 52,182
`Andrew S. Brown
`Reg. No. 74,177
`Wilson Sonsini Goodrich & Rosati
`701 Fifth Ave.
`Suite 5100
`Seattle, WA 98104-7036
`Telephone: (206) 883-2529
`Facsimile: (206) 883-2699
`E-mail: mrosato@wsgr.com
`E-mail: asbrown@wsgr.com
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`By: /s/ Wayne M. Helge
` USPTO Reg. No. 56,905
` Counsel for Patent Owner
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