UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`HYDRITE CHEMICAL CO.,
`Petitioner,
`
`v.
`
`SOLENIS TECHNOLOGIES, L.P.,
`Patent Owner.
`
`
`Case IPR2015-01592
`Patent 8,962,059
`
`
`
`PATENT OWNER’S MOTION TO EXCLUDE
`PURSUANT TO 37 C.F.R. § 42.64(C)
`
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`HYDRITE CHEMICAL CO.,
`Petitioner,
`
`v.
`
`SOLENIS TECHNOLOGIES, L.P.,
`Patent Owner.
`
`
`Case IPR2015-01592
`Patent 8,962,059
`
`
`
`PATENT OWNER’S MOTION TO EXCLUDE
`PURSUANT TO 37 C.F.R. § 42.64(C)
`
`
`
`
`
`
`
`
`
`
`
`Case IPR2015-01592
`U.S. Patent No. 8,962,059
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`TABLE OF CONTENTS
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`
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`I.
`
`Paper 21 and Ex. 1025 Should Be Excluded Because They Contain New
`Evidence and Arguments That Exceed the Scope of a Proper Reply ............. 1
`
`A.
`
`Paper No. 21 (“Petitioner’s Reply”) ...................................................... 2
`
`1.
`
`2.
`
`Simultaneous Invention .............................................................. 3
`
`Deposition Testimony Presenting New Rationale ...................... 4
`
`B.
`
`Ex. 1025 (“Supplemental Declaration of Dr. Rockstraw”) ................... 6
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`II.
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`Exhibits 1022 and 1029 Should Be Excluded For Failing to Comply with
`the Rules of Evidence ...................................................................................... 8
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`A.
`
`B.
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`Ex. 1022 (“CVEC slides”) .................................................................... 8
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`Ex. 1029 (“Jacobson”) ......................................................................... 10
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`III. Conclusion ..................................................................................................... 11
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`
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`
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`- i -
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`Pursuant to 37 CFR § 42.64(c), Patent Owner, Solenis Technologies, L.P.
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`Case IPR2015-01592
`U.S. Patent No. 8,962,059
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`
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`(“Solenis”), moves to exclude the following evidence and related testimony
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`submitted by Petitioner, Hydrite Chemical Co. (“Hydrite”).
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`I.
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`Paper 21 and Ex. 1025 Should Be Excluded Because They Contain New
`Evidence and Arguments That Exceed the Scope of a Proper Reply
`
`Solenis objected to Paper 21 (“Petitioner’s Reply”) and Ex. 1025
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`(“Supplemental Declaration of Dr. Rockstraw”) because they contain
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`impermissible new evidence and arguments supporting Hydrite’s prima facie case
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`for unpatentability that could have been presented in a prior filing. See Paper 22,
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`citing 37 CFR § 42.23(b) and Office Patent Trial Practice Guide, 77 Fed. Reg.
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`48,756, 48,767 (Aug. 14, 2012).
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`Under Rule 42.23(b), a “reply may only respond to arguments raised in the
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`corresponding…patent owner response.” “‘Respond’ in the context of 37 C.F.R. §
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`42.23(b), does not mean embark in a new direction with a new approach as
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`compared to the position originally taken in the Petition.” Apple Inc., ZTE
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`Corporation and ZTE (USA) Inc. v. e-Watch, Inc., IPR2015-00412, Paper 50 at 44
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`(PTAB May 6, 2016). “A Reply affords the Petitioner an opportunity to refute
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`arguments and evidence advanced by the Patent Owner, not an opportunity to cure
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`deficiencies in its Petition.” Toyota Motor Corp. v. Am. Vehicular Scis. LLC,
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`IPR2013-00424, Paper 50 at 21 (PTAB Jan. 12, 2015).
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`- 1 -
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`Examples of new issues raised on reply “include new evidence necessary to
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`Case IPR2015-01592
`U.S. Patent No. 8,962,059
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`
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`make out a prima facie case for the patentability or unpatentability of an original or
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`proposed substitute claim, and new evidence that could have been presented in a
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`prior filing.” 77 Fed. Reg. 48,756, 48,767 (Aug. 14, 2012). “[A] reply that raises a
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`new issue or belatedly presents evidence will not be considered and may be
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`returned. The Board will not attempt to sort proper from improper portions of the
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`reply.” Id. The Petition must include all affirmative evidence of alleged
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`obviousness. 37 C.F.R. § 42.22(a)(2).
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`Here, Paper 21 and Ex. 1025 include – for the first time – new evidence and
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`arguments to support Hydrite’s prima facie case for obviousness. Because Solenis
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`does not have an opportunity for a meaningful response (as, for example, through
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`submission of countervailing evidence) permitting Hydrite’s belated submissions
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`would be unduly prejudicial and unfair.
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`Paper No. 21 (“Petitioner’s Reply”)
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`A.
`Solenis objected to portions of Paper 21 because, among other things, it
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`contains impermissible new evidence and arguments regarding so-called
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`“simultaneous invention,” and deposition testimony presenting a new rationale for
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`how one allegedly would have arrived at the claimed inventions (see Paper 22).
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`- 2 -
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`Case IPR2015-01592
`U.S. Patent No. 8,962,059
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`Simultaneous Invention
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`1.
`Hydrite’s Reply introduces Ex. 1004 (a document from an interference
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`proceeding between U.S. Patent No. 8,841,469 (“the 469 Patent”) and U.S. Patent
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`No. 8,962,059 (“the 059 Patent”)) and Ex. 1022 (“CVEC Slides”) to advance a
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`theory of “simultaneous invention” and/or to support the proposition that one
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`would have had “guidance” and “motivation” to arrive at the 059 patent claims
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`(see Paper 21 at 1-2 & 8-9). This constitutes an entirely new argument that
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`Hydrite could have raised, and should have raised, in its Petition and to which
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`Solenis has no opportunity to meaningfully respond.
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`Hydrite did, in fact, cite Ex. 1004 in the Petition for a different purpose, i.e.,
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`to identify “related matters” (see Paper 1 at ix-x). At no time, however, did
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`Hydrite cite Ex. 1004 to support allegations of “simultaneous invention” and/or as
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`evidence of “motivation” and “guidance.”
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`Similarly, Dr. Rockstraw testified that Ex. 1022 was known to him prior to
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`completing his original declaration, but that Hydrite’s attorneys instructed him not
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`to rely upon it (Ex. 2028 at 87:18 – 89:10).
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`As explained in the Trial Practice Guide, “new evidence that could have
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`been presented in a prior filing” is improper. 77 Fed. Reg. 48767; Butamax™
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`Advanced Biofuels LLC v. Gevo, Inc., IPR2013-00539, Paper 33 at 43 n.8 (PTAB
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`- 3 -
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`March 3, 2015) (holding reply evidence untimely because “Petitioner gave no
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`Case IPR2015-01592
`U.S. Patent No. 8,962,059
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`reason why th[e] evidence could not have been submitted with the Petition”).
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`Accordingly, the Board should, at the very least, exclude those portions of
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`Petitioner’s Reply that relate to “simultaneous invention” and/or that rely upon Ex.
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`1004 and 1022.
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`Deposition Testimony Presenting New Rationale
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`2.
`In its Patent Owner Response (Paper 15, “Response”), Solenis provided a
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`detailed explanation of the deficiencies in Hydrite’s reliance on HLB alone as a
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`basis for its obviousness allegations (Paper 15 at 5-13). Solenis, for example,
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`explained that neither the Petition nor the Rockstraw Declaration explains why a
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`person of ordinary skill would have focused on surfactants having HLB greater
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`than 10, much less why they would have selected the claimed compounds:
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`Q It doesn't say anything about going for a surfactant having
`an HLB as large as possible, does it?
`A It does not in my declaration, no.
`Q Can you find me anywhere in your declaration where you
`talk about looking at surfactant having HLB greater than 10 and as
`large as possible?
`A I don't know that it's in my declaration. I'm seeing that I
`spoke about moving away from the stable HLB value for that
`particular system, but I don't see where I've given justification in
`going from one -- in one direction or the other.
`(Paper 15 at 11-12, citing Ex. 2005 at 225:18 – 226:7, emphasis added).
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`- 4 -
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`In what appears to be an improper attempt to cure this deficiency, Paper 21
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`U.S. Patent No. 8,962,059
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`cites a passage from Dr. Rockstraw’s post-Petition deposition testimony (Paper 21
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`at 4-7). Although Hydrite provides little explanation for this citation, the
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`testimony appears to be relied upon to provide the “justification” for arriving at the
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`claimed compounds that Hydrite had failed to previously provide.
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`The Federal Circuit recently affirmed the Board’s refusal to consider a reply
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`that set forth a “new rationale to explain why one of skill in the art would have
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`been motivated to combine [petitioner’s asserted references].” Intelligent Bio-Sys.,
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`Inc. v. Illumina Cambridge Ltd., 821 F.3d 1359, 1370 (Fed. Cir. 2016). The
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`Federal Circuit explained that “[i]t is of the utmost importance that petitioners in
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`the IPR proceedings adhere to the requirement that the initial petition identify
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`‘with particularity’ the ‘evidence that supports the grounds for the challenge to
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`each claim.’” Id. at 1369. “Unlike district court litigation – where parties have
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`greater freedom to revise and develop their arguments over time and in response to
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`newly discovered material – the expedited nature of IPRs bring [sic] with it an
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`obligation for petitioners to make their case in their petition to institute.” Id.; see
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`also Sandisk Corporation v. Netlist, Inc., IPR2014-00970, Paper 32 at 55 (PTAB
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`Dec.14, 2015) (finding Petitioner’s reply does more than “merely address Patent
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`Owner’s argument…rather, they attempt to provide a new theory for modifying
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`[reference] that was not set forth clearly in the Petition”); Nestlé Purina Petcare
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`- 5 -
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`Company, v. Oil-Dri Corporation of America, IPR2015-00737, Paper 37 at 24-25
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`U.S. Patent No. 8,962,059
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`(PTAB June 20, 2016) (rejecting Petitioner’s attempt to provide new arguments
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`and evidence that were not set forth clearly in the Petition).
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`Accordingly, Hydrite’s attempt to adopt a new obviousness rationale at this
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`late stage should be rejected as prejudicial and improper.
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`Ex. 1025 (“Supplemental Declaration of Dr. Rockstraw”)
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`B.
`Solenis objected to Ex. 1025 because, among other things, it contains
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`impermissible new evidence and arguments regarding Ex. 1027 (Atlas) and Ex.
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`1028 (Cereal Science) (see Paper 22). Hydrite relies upon this new material in
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`Paper 21 at pages 13, 21.
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`Hydrite appears to have submitted Ex. 1025 to address the deficiencies
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`relating to Hydrite’s proposed combination of the Winsness and Alther references
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`and Alther’s limited teaching relating to the use of Polysorbate 80 to break an
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`emulsion (see Ex. 1025 at ¶¶20-21 reproducing pages 35-36 of Solenis’s
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`Response). In particular, Hydrite’s Dr. Rockstraw now attempts to rely on
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`language in Ex. 1027 (“Atlas”) allegedly establishing that surfactants used as
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`demulsifiers can have an “HLB opposing that for emulsion being treated” (see Ex.
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`1025 at ¶17). Significantly, however, Dr. Rockstraw subsequently conceded that
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`there was no reason why he could not have cited Ex. 1027 when preparing his
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`original declaration (Ex. 2028 at 26:22 – 27:2). Moreover, Hydrite failed to make
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`- 6 -
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`any attempt to qualify Ex. 1027 as supplemental information under 37 C.F.R. §
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`Case IPR2015-01592
`U.S. Patent No. 8,962,059
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`42.123 during the course of this proceeding. Still further, Dr. Rockstraw conceded
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`that the term “opposing” is used in Ex. 1027 in a different context than in Alther
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`(see Ex. 2028 at 37:8-16; 38:5-39:17; 41:12 - 42:22).
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`And Dr. Rockstraw’s reliance upon Ex. 1028 (Cereal Science) in his
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`supplemental declaration not only is belated but also represents an improper
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`attempt to change his prior testimony. Dr. Rockstraw now relies upon Ex. 1028 to
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`support his allegation that phosphatides are lipophilic surfactants (Ex. 1025 at ¶23)
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`whereas he characterized them as hydrophilic surfactants in his original
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`declaration (Ex. 1005 at ¶67), i.e., the exact opposite. Again, Dr. Rockstraw
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`testified that there was no reason why he could not have cited Ex. 1028 when
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`preparing his original declaration (Ex. 2028 at 46:18-21). And Hydrite likewise
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`failed to make any attempt to qualify Ex. 1028 as supplemental information under
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`37 C.F.R. § 42.123 during this proceeding.
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`Accordingly, not only does Ex. 1025 (the supplemental Rockstraw
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`declaration) and its reference to Exs. 1027 (“Atlas”) and 1028 (“Cereal Science”)
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`reflect new evidence and arguments, but Dr. Rockstraw has confirmed that this
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`new material could have been presented earlier. Petitioner should not be permitted
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`to lie in wait for Solenis to point out critical deficiencies in Petitioner’s case-in-
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`chief and then sandbag Solenis with new reply evidence and arguments in an
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`- 7 -
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`attempt to cure those deficiencies. To permit this evidence to remain in the record
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`Case IPR2015-01592
`U.S. Patent No. 8,962,059
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`for this proceeding would be unduly prejudicial to Solenis, which has no
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`opportunity to provide rebuttal evidence and arguments. As such, Ex. 1025, 1027,
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`and 1028 should be excluded and reliance thereon in Petitioner’s Reply brief
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`should be disregarded.
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`II. Exhibits 1022 and 1029 Should Be Excluded For Failing to Comply with
`the Rules of Evidence
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`A. Ex. 1022 (“CVEC slides”)
`Solenis objects to Ex. 1022 (“CVEC slides”) on the following additional
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`grounds: FRE 402 (relevance), FRE 403 (prejudicial), and FRE 802
`
`(hearsay). Hydrite relied upon Ex. 1022 in Paper 21 at p. 1-2 and 8-9. In serving
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`supplemental evidence directed to Ex. 1022, Hydrite alleged that Solenis’s
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`objections were untimely because they were not made at a deposition at which
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`questions relating to the exhibit were posed. But Solenis raised timely objections
`
`to this exhibit in the context of the questions that Hydrite posed to the witness,
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`including objections on grounds of foundation, form, relevance, and exceeding the
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`scope of the petition (see Ex. 1023 at 50:24-56:21). Consistent with this, Solenis
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`further objected when Hydrite relied upon Ex. 1022, for the first time, in its Reply
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`(Paper 22).
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`As an initial matter, Ex. 1022 contains inadmissible hearsay. Hydrite relies
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`upon Ex. 1022 in an attempt to establish that Chippewa Valley Ethanol Company
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`- 8 -
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`added polysorbate 80/Tween 80 in a corn oil recovery process. See Paper 21 at 2
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`Case IPR2015-01592
`U.S. Patent No. 8,962,059
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`and 8. Because Hydrite relies on Ex. 1022 for the truth of the matter asserted, and
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`because the exhibit fails to meet any of the exceptions under FRE 803, it is
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`inadmissible hearsay. Accordingly, the Board should exclude Ex. 1022.
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`Further, to the extent that Hydrite relies upon Ex. 1022 to establish whether
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`or not there was any guidance or motivation for a person of ordinary skill in the art
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`to arrive at the 469 Patent claims (see Paper 21 at 1-2 and 8-9), the exhibit is
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`irrelevant under FRE 402. Hydrite fails to provide any evidence of when the
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`exhibit was first publicly available, let alone whether or not it was publicly
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`available at the time of the invention of the 059 Patent claims.
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`The Board should also exclude Ex. 1022 because allowing it would be
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`prejudicial to Solenis. See FRE 403 (excluding relevant evidence for
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`prejudice). Hydrite failed to include Ex. 1022 in any paper that it had earlier filed,
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`notwithstanding the fact that Hydrite had possession of the exhibit prior to the
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`filing of the Petition. Indeed, Hydrite’s expert, Dr. Rockstraw, admitted that he
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`knew about Ex. 1022 before completing his original declaration, and that his
`
`attorneys instructed him not to use it (see Ex. 2028 at 87:18 –
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`89:10). Accordingly, allowing such evidence now would severely prejudice
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`Solenis, which does not have the opportunity to respond or provide new evidence
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`in response. Hydrite should not be permitted to now sandbag Solenis by
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`- 9 -
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`introducing new evidence to support a new theory (simultaneous invention), that
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`Case IPR2015-01592
`U.S. Patent No. 8,962,059
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`Hydrite could have – and should have – included in its Petition.
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`For these reasons, the Board should exclude Ex. 1022.
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`Ex. 1029 (“Jacobson”)
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`B.
`Solenis objects to Ex. 1029, a document that Petitioner alleges is a web
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`printout entitled “Distillers Corn Oil and the Low Carbon Fuel Standard”
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`(“Jacobsen”), on the following grounds: FRE 901 (authentication) and FRE 802
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`(hearsay). Hydrite relied upon Ex. 1029 in Paper 21 at 24.
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`FRE 901 requires that the proponent of the evidence “produce evidence
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`sufficient to support a finding that the item is what the proponent claims it is.”
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`Hydrite provides no “testimony of a witness with knowledge” that Ex. 1029 is
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`what Hydrite claims it to be (FRE 901(b)(1)). In particular, Ex. 1029 appears to be
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`a web page printout, but Hydrite has failed to provide the testimony of any witness
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`with personal knowledge of the information on the website or the associated
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`printouts. Moreover, Ex. 1029 is not self-authenticating under FRE 902 because
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`none of the sub-sections of FRE 902 reasonably apply.
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`Ex. 1029 should also be excluded under FRE 802 because it contains
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`inadmissible hearsay. For example, Hydrite’s Reply relies on Ex. 1029 for the
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`truth of matter asserted, namely that there is an increasing demand for corn oil.
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`- 10 -
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`Paper 21 at 24. This is an out of court statement that Petitioner offers for the truth
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`Case IPR2015-01592
`U.S. Patent No. 8,962,059
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`of the matter asserted, yet none of the hearsay exceptions in FRE 803 apply.
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`III. Conclusion
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`For the reasons discussed above, the above-identified evidence should be
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`excluded from consideration by the Board in this proceeding.
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`
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`Respectfully submitted,
`
`/Joseph Lucci/
`Joseph Lucci
`Registration No. 33,307
`BAKER & HOSTETLER LLP
`2929 Arch Street
`Cira Centre, 12th Floor
`Philadelphia, PA 19104-2891
`Telephone: 215.568.3100
`Facsimile: 215.568.3439
`jlucci@bakerlaw.com
`
`Attorneys for Patent Owner
`SOLENIS TECHNOLOGIES, L.P.
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`- 11 -
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`Dated: August 8, 2016
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`Case IPR2015-01592
`U.S. Patent No. 8,962,059
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`CERTIFICATE OF SERVICE
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`I, David N. Farsiou, hereby certify that on this 8th day of August, 2016, the
`
`foregoing PATENT OWNER’S MOTION TO EXCLUDE PURSUANT TO 37
`
`C.F.R. § 42.64(c) was served electronically via e-mail on the following:
`
`Richard Roche
`Joel A. Austin
`Christopher J. Fahy
`QUARLES & BRADY LLP
`411 East Wisconsin Avenue
`Suite 2350
`Milwaukee, Wisconsin 53202
`richard.roche@quarles.com
`joel.austin@quarles.com
`christopher.fahy@quarles.com
`
`
`
`/David N. Farsiou/
`David N. Farsiou
`Reg. No. 44, 104
`Baker & Hostetler LLP
`2929 Arch Street
`Cira Centre, 12th Floor
`Philadelphia, PA 19104-2891
`Telephone: 215.568.3100
`Facsimile: 215.568.3439
`dfarsiou@bakerlaw.com
`
`Attorney for Patent Owner
`
`- 12 -
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