`____________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________________
`
`RPX CORPORATION,
`Petitioner
`
`v.
`
`APPLICATIONS IN INTERNET TIME LLC,
`Patent Owner
`____________________
`
`Case IPR2015-01750
`US Patent No. 8,484,111 B2
`
`Case IPR2015-01751
`Case IPR2015-01752
`Patent 7,356,482 B21
`____________________
`
`________________________________________________________________
`
`PATENT OWNER’S OPPOSITION TO MOTION FOR SANCTIONS
`
`
`
`
`1 The word-for-word identical paper is filed in each proceeding identified in the
`
`heading.
`
`
`
`I.
`
`II.
`
`TABLE OF CONTENTS
`Introduction ...................................................................................................... 1
`
`Petitioner’s proposed sanctions are not needed and are not
`proportionate. ................................................................................................... 2
`
`A.
`
`B.
`
`C.
`
`Petitioner’s request for additional declarations is unnecessary. ........... 2
`
`Petitioner’s request for destruction of confidential information
`comes too late, the information is not confidential, and Patent
`Owner has already taken remedial measures that are working. ............ 4
`
`Petitioner proposed a revised protective order without an
`earnest effort at compromise with Patent Owner, and the
`proposal is unworkable. ......................................................................... 6
`
`III. Petitioner suffered no harm. ............................................................................. 8
`
`IV. Patent Owner’s conduct does not warrant sanctions. ....................................... 9
`
`A.
`
`B.
`
`The alleged breaches were all through inadvertent error. ..................... 9
`
`The purported confidential information does not merit a
`confidential designation. ....................................................................... 9
`
`V. Conclusion ...................................................................................................... 11
`
`
`
`
`
`i
`
`
`
`TABLE OF AUTHORITIES
`
`Cases
`
`Corning Optical Communications RF, LLC, v. PPC Broadband, Inc., Case
`IPR2014-0044, Paper 47 ......................................................................................... 6
`Ecclesiastes 9:10-11-12, Inc. v. LMC Holding Co., 497 F.3d 1135, 1143 (10th Cir.
`2007) ....................................................................................................................... 1
`Square, Inc. v. Think Computer Corp., CBM 2014-00159, Paper 48 ....................... 1
`
`
`
`
`ii
`
`
`
`
`I.
`
`Introduction
`
`At the outset, one must wonder whether Petitioner’s motion for sanctions is
`
`premature. No protective order has been entered. No motion to seal has been
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`entered. Yet, Petitioner erroneously suggests that inadvertent disclosures rose to
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`the level of sanctionable conduct. They do not.
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`Petitioner acted hastily to request leave to file a sanctions motion. Now, with
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`a full description of the relevant facts, it is clear that no Board action is needed.
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`The facts demonstrate that there was little, if any confidential information, that
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`Patent Owner’s inadvertent disclosure was incredibly limited, that Patent Owner
`
`has already taken sufficient remedial action, and Petitioner suffered no harm. In
`
`this light, Petitioner’s proposed sanctions make no sense.
`
`The primary considerations in making a determination on a motion for
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`sanctions are “(i) whether a party has performed conduct that warrants sanctions;
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`(ii) whether the moving party has suffered harm from that conduct; and (iii)
`
`whether the sanctions requested are proportionate to the harm suffered by the
`
`moving party.” Square, Inc. v. Think Computer Corp., CBM 2014-00159, Paper 48
`
`at 2 (citing Ecclesiastes 9:10-11-12, Inc. v. LMC Holding Co., 497 F.3d 1135,
`
`1143 (10th Cir. 2007)). Petitioner’s motion fails on all three points. This brief
`
`
`
`1
`
`
`
`addresses the three Square requirements in reverse order because this highlights
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`why the motion should be denied.
`
`II.
`
`Petitioner’s proposed sanctions are not needed and are not
`
`proportionate.
`
`Here, all of Patent Owner’s conduct was inadvertent and, once discovered,
`
`was admitted and has been corrected. Because Petitioner has suffered no harm, any
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`sanction is disproportionate.
`
`A.
`
`Petitioner’s request for additional declarations is unnecessary.
`
`The Board already entered an Order (Paper 23) requiring declarations from
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`two individuals “regarding the specific extent of Petitioner’s confidential
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`information to which they were provided access.” The declarants unequivocally
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`confirmed that they saw only a draft of the Patent Owner’s Preliminary Response
`
`(“POPR”). (Ex. 1040, ¶¶ 4-92; Ex. 1041, ¶¶ 4-7; Ex. 2027, p. 2, ¶ 1). As directed
`
`by the Board, had either individual received access to any other confidential
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`information, one or both would have so declared (Ex. 2027, p. 1, ¶ 1). Likewise,
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`Patent Owner unequivocally confirmed to Petitioner that for all “information
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`identified by Petitioner as confidential, the same information appears in the POPR
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`as filed.” (Ex. 2027, p. 2, ¶ 2).
`
`
`2 One declarant separately confirms that he saw a .pdf “timeline”. ) Ex. 1040, ¶ 4.
`
`
`
`2
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`
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`Petitioner was not satisfied. (Ex. 2027, p. 3-4) In an effort to reach a
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`mutually-agreeable resolution with Petitioner without breach of privilege, Patent
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`Owner proposed to provide the Board with an in camera review of the early draft
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`of the POPR that was seen by the declarants so that the Board could confirm for
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`Petitioner the lack of any relevant difference between the early draft and the filed
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`POPR. (Ex. 2027, p. 2, ¶ 2). Indeed, the declarants never even saw the POPR as
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`filed (Exs. 1040, 1041). Thus, contrary to Petitioner’s suggestion, neither declarant
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`is in any position to address how the near-final and final drafts compare.
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`Rather than accept the Patent Owner’s compromise offer, Petitioner
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`indicated that it would prefer to “raise AIT’s non-compliance with the Board . . . in
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`its motion for sanctions.” (Ex. 2027, p. 1, ¶ 1). Clearly, Petitioner was more
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`interested in filing its motion than actually finding out the scope of the alleged
`
`breach or reaching any real resolution. This is all the more troubling when
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`“identifying to Petitioner and the Board the scope of the breach” is literally half of
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`the relief sought by Petitioner’s motion. (Paper 34 at 14).
`
`Because it failed to accept or even pursue a reasonable compromise,
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`Petitioner’s motion should be denied.
`
`Petitioner belatedly also now seeks a declaration from Patent Owner’s
`
`principal. (Paper at 14). Petitioner was aware of the disclosures to this individual as
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`early as November 28, 2015 (Ex. 1031, p. 1) and seemed content that he was
`
`
`
`3
`
`
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`qualified to see Petitioner’s confidential information under the proposed protective
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`order. Notably, Petitioner did not request a declaration from him during the call
`
`with the Board on December 3. Patent Owner identified this individual to
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`Petitioner as “a party” (Ex. 1033) on November 29 – a characterization that
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`Petitioner apparently accepted.
`
`B.
`
`Petitioner’s request for destruction of confidential information
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`comes too late, the information is not confidential, and Patent Owner
`
`has already taken remedial measures that are working.
`
`Petitioner repeatedly has been dilatory with respect to confidentiality issues.
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`Petitioner is yet to file a motion for protective order. Likewise, Petitioner’s failure
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`to act or act promptly regarding its alleged confidential information indicates that
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`either the information was not confidential or simply not important. Petitioner’s
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`requested sanctions demonstrate this.
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`Petitioner asks that three individuals “swear that [they have] destroyed that
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`information and any copies.” (Paper 34, p. 14). Strangely, the motion was the first
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`time Petitioner has requested that its alleged confidential information be deleted.
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`Not even third party Salesforce (which Patent Owner argues is the real party in
`
`interest), the subject of the alleged confidential information, ever asked Patent
`
`Owner or others for deletion. Rather, one of the declarants affirmatively asked
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`counsel for Salesforce if they would like the materials he received to be deleted.
`
`
`
`4
`
`
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`(Ex. 2028, p. 2), which he did when the suggestion was acknowledged. (Ex. 1040,
`
`¶ 7). December 8, 2015 – a full 11 days following the purported breach – was the
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`first time any party requested that either declarant delete any information they
`
`received. Apparently, Petitioner was more interested in the opportunity to file the
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`sanctions motion than it was in actually protecting its purported confidential
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`information. Simply asking that confidential information be deleted never occurred
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`to Petitioner. A sanction motion was the only suitable course of action.
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`Despite Petitioner’s characterizations of the disclosures, Patent Owner has
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`been incredibly forthcoming regarding the
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` and inadvertent disclosures
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`and has made repeated (and now successful) efforts to correct those issues. Patent
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`Owner’s responsiveness and consideration demonstrates that Patent Owner made
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`every effort to respond and to address the issue quickly. (See e.g., Ex. 1033).
`
`
`
` In response, Patent Owner
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`voluntarily replaced lead counsel on December 2, 2015. (Paper 22; Paper 25) and
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`agreed to file subsequent papers “Board and Parties Only.” No further confidential
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`information has been
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` shared and all documents in the IPRs have been
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` and filed as Board and Parties Only since December 2, 2015.
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`(Papers 37-38; Exs. 2025, 2026). In an abundance of caution, Patent Owner even
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`
`
`5
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`
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`sought and received consent from Petitioner before filing the sur-reply and new
`
`exhibits. (Ex. 2030). Petitioner has not since complained.
`
`In short, to the extent there was error, it was limited to a short period of time.
`
`This is not a case where there was repeated disregard of clear orders. Compare,
`
`Corning Optical Communications RF, LLC, v. PPC Broadband, Inc., Case
`
`IPR2014-0044, Paper 47 (April 17, 2015) (patent owner repeatedly joined in
`
`petitioner’s motion to seal despite Board caution to the contrary).
`
`C.
`
`Petitioner proposed a revised protective order without an earnest
`
`effort at compromise with Patent Owner, and the proposal is
`
`unworkable.
`
`One business day before it filed its motion, Petitioner sent Patent Owner a
`
`two-sentence email regarding the revised protective order. (Ex. 2029). Patent
`
`Owner promptly declined, primarily because of the unwieldiness of Petitioner’s
`
`proposal and its impact on the attorney work product privilege. (Ex. 2029).
`
`Petitioner never sought any sort of compromise. Patent Owner’s Revised
`
`Protective Order (Ex. 1048) seeks three primary changes. None of these changes is
`
`necessary, well-reasoned, or designed to actually address the inadvertent
`
`disclosure.
`
`First, Petitioner proposes a requirement for filing and service of protective
`
`order acknowledgements. The imposition of “filed, and served” on protective order
`
`
`
`6
`
`
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`acknowledgements is an unnecessary and unwieldly change. Patent Owner has
`
`provided every signed acknowledgement to Petitioner. Had Patent Owner’s intent
`
`have been to secretly disclose confidential information, it would not have filed the
`
`acknowledgements that it did. Hiding inadvertent disclosures is not and was never
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`the problem. Patent Owner has demonstrated its willingness to admit when alleged
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`confidential information has been disclosed. Thus, requiring filing and service of
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`the acknowledgements only serves to clutter the number of filings and to generate
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`busywork for everyone involved.
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`Second, Petitioner proposes to prohibit “parties” from access to confidential
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`information without consent or approval. This change is a non-sequitur and
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`unreasonably over-broad to protect Petitioner confidential information. The change
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`is a non-sequitur because sharing confidential information with parties was not
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`even identified as an issue in Petitioner’s motion. Further, this change is
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`unreasonable because some non-lawyer individual associated with each party must
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`be able to independently evaluate the value and relevance of all information as it
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`pertains to the issues before the Board. The elimination of parties only serves to
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`stop counsel for Patent Owner from meaningfully communicating with its client
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`regarding the merits of IPR-related strategies that may involve Petitioner’s alleged
`
`confidential information. Open client communication should not be hindered based
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`upon inadvertent disclosures to non-parties.
`
`
`
`7
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`
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`Third, Petitioner proposes that is have pre-approval authority of all Patent
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`Owner filings which including its confidential information. Pre-approval of Board
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`filings, as Petitioner now requests, is unworkable and disproportionate. First, it
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`would require the disclosure of Patent Owner’s attorney work product to the
`
`opposing party. Second, the extra process steps would eat away at the already
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`limited time afforded in this proceeding. Each time Patent Owner would seek to
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`file a paper with the Board, there would be yet another cycle of reviews,
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`discussions, and drafting of proposed revisions. Since the change in Patent
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`Owner’s lead counsel, Patent Owner has already demonstrated its ability to file
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`properly-redacted documents (papers 36 and 37), to file them, in an abundance of
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`caution, Board and Parties Only (Papers 37 and 38), to confer regarding filings
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`without disclosing privileged information (Ex. 2030) and to generally protect
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`confidential information. Petitioner has not complained. Thus, modification of the
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`protective order is demonstrably unnecessary.
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`III. Petitioner suffered no harm.
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` Petitioner does not allege any actual financial or competitive damage. Nor
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`does Petitioner allege that Salesforce suffered any harm.
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`Petitioner’s request for monetary sanctions for its cost to prepare its motion
`
`is unprecedented. Because Petitioner’s arguments for sanctions are so weak, it also
`
`represents bad policy.
`
`
`
`8
`
`
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`IV. Patent Owner’s conduct does not warrant sanctions.
`
`A. The alleged breaches were all through inadvertent error.
`
`
`
`
`
`Simultaneously with the POPR filing (Paper 20), and although unnecessary
`
`under the rules, Patent Owner filed acknowledgements from each of the parties
`
`who had signed them. (Papers 12-16). Had Patent Owner sought to hide its
`
`disclosure, it certainly would not have filed the acknowledgments.
`
`B.
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`The purported confidential
`
`information does not merit a
`
`confidential designation.
`
`The information seen by the two declarants,
`
`, falls into three categories:
`
`
`
`9
`
`
`
`
`
`
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`confidential or does not merit protection.
`
`
`
` In each case, it is either not
`
` The Board’s order of October 20,
`
`
`
`2015 references this. This fact is not confidential. It is also apparently not worth
`
`protecting because Petitioner made no effort to remove this information from the
`
`
`
` The dates relevant to the IPRs are all public record. The mere
`
`public record.
`
`existence of
`
` does not rise to the level of sensitive confidential information that is
`
`sanctionable. Indeed, the public would probably be surprised if there were not
`
`
`
`
`
`
`
`
`
`
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`in
`
`these
`
`circumstances, since
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` is exactly what Petitioner
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`tells the public it does: Petitioner “‘serve[s] as an extension of the client’s in-house
`
`legal team,’” and “represent[s] clients who are accused of patent infringement,
`
`acting as their proxy to ‘selectively clear’ liability for infringement as part of
`
`
`
`10
`
`
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`RPX’s ‘patent risk management solutions,’” including “attacking patents that are
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`or will likely be asserted against its clients.” (Exs. 2006–2008; see also Paper 11).
`
`
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`Finally,
`
`. Because Salesforce is a public
`
`company, its relevant financial information is available in public filings with the
`
`Securities and Exchange Commission (SEC). Thus,
`
`
`
`are hardly “confidential” as claimed by Petitioner, but based upon publicly-
`
`
`
`
`
`available information.
`
`V. Conclusion
`
`As with many aspects of Board practice, many issues of first impression
`
`remain regarding confidentiality prior to a decision on the petition. In hindsight,
`
`Petitioner should have requested authorization to move for a protective order. In
`
`hindsight, Patent Owner should have not waited until the day after Thanksgiving to
`
`consider the impact of citing information in its POPRs claimed by Petitioner as
`
`confidential. In hindsight, Patent Owner should have asked Petitioner in advance
`
`about the 2(e) parties, though it was Petitioner’s burden to show why they should
`
`be excluded. In hindsight, Patent Owner should have filed the POPRs as non-
`
`
`
`11
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`
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`public, and Petitioner should have moved to seal and redact them. Had those
`
`procedures been followed, the predicate question of whether there was confidential
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`information at all would have been addressed first.
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`Even if the information was appropriately designated as confidential,
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`Petitioner has suffered no harm. Thus, any sanction is disproportionate to the harm.
`
`Petitioner’s request for monetary sanctions for the cost of filing an unnecessary
`
`motion to obtain relief it has already obtained or could have obtained by merely
`
`asking Patent Owner is unreasonable. The additional declarations, motions, and
`
`changes to the protective order are unnecessary, unreasonable and unworkable.
`
`Petitioner’s sanction request should be denied in its entirety.
`
`Date: January 13, 2016
`
`
`
`
`Respectfully submitted,
`
`
`
`By: /jonathan pearce/
`Jonathan Pearce (Reg. No. 60,972)
`Attorneys for Applications in Internet Time
`LLC
`
`
`
`12
`
`
`
`CERTIFICATE OF SERVICE
`
`The undersigned hereby certifies that a copy of this PATENT OWNER’S
`
`OPPOSITION TO MOTION FOR SANCTIONS has been served via email on
`January 13, 2016, by agreement of the parties, upon the following:
`
`Richard F. Giunta
`Elisabeth H. Hunt
`Randy J. Pritzker
`
`Rgiunta-PTAB@wolfgreenfield.com
`EHunt-PTAB@wolfgreenfield.com
`
`
`
`Dated: January 13, 2016
`
`
`
`
`
`By: /Anneliese G. Lomonaco/
`
`Anneliese G. Lomonaco
`
`
`
`13