UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_____________
`
`RPX CORPORATION,
`Petitioner,
`
`v.
`
`APPLICATIONS IN INTERNET TIME, LLC,
`Patent Owner.
`_____________
`
`Case IPR2015-01750
`Patent No. 8,484,111 B2
`
`Case IPR2015-01751
`Case IPR2015-017521
`Patent 7,356,482 B2
`_____________
`
`DECLARATION OF JEFFREY M. LIPSHAW
`
`1 The word-for-word identical paper is served in each proceeding identified in the
`heading.
`RPX Exhibit 1066
`RPX v. AIT
`IPR2015-01751
`
`1
`
`
`_____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_____________
`
`RPX CORPORATION,
`Petitioner,
`
`v.
`
`APPLICATIONS IN INTERNET TIME, LLC,
`Patent Owner.
`_____________
`
`Case IPR2015-01750
`Patent No. 8,484,111 B2
`
`Case IPR2015-01751
`Case IPR2015-017521
`Patent 7,356,482 B2
`_____________
`
`DECLARATION OF JEFFREY M. LIPSHAW
`
`1 The word-for-word identical paper is served in each proceeding identified in the
`heading.
`RPX Exhibit 1066
`RPX v. AIT
`IPR2015-01751
`
`1
`
`
`
`
`
`I, Jeffrey M. Lipshaw, declare:
`
`1.(cid:1)
`
`I have been retained by RPX Corporation (“RPX”) to render an expert
`
`opinion in the above-captioned matters on the legal and practical import, if any, of
`
`an individual sitting as a director on the boards of directors of two or more
`
`otherwise independent companies with no corporate relationship. I am being
`
`compensated for my time at a rate of $800 per hour, plus actual expenses. My
`
`compensation is not dependent in any way upon the outcome of RPX’s petitions or
`
`any related matters.
`
`I.(cid:1)
`
`BACKGROUND AND QUALIFICATIONS
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`2.(cid:1) My qualifications for forming the opinions set forth in this declaration
`
`are summarized in the following paragraphs and explained in more detail in my
`
`curriculum vitae, which is attached as Exhibit 1065. Exhibit 1065 also includes a
`
`list of my publications.
`
`3.(cid:1)
`
`I received a Bachelor of Arts degree in history from the University of
`
`Michigan in 1975, graduating with High Distinction. I received a Juris Doctor
`
`degree from Stanford University in 1979.
`
`4.(cid:1)
`
`I am presently employed as a Professor of Law at the Suffolk
`
`University Law School in Boston, Massachusetts. I have been a member of the
`
`faculty since 2007 and tenured since 2013.
`
`
`
`2
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`
`
`
`
`5.(cid:1)
`
`Before joining the faculty, I spent twenty-six years as a lawyer and
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`business executive, most recently serving as Senior Vice-President, General
`
`Counsel and Secretary for Great Lakes Chemical Corporation, a Fortune 850
`
`company based in Indianapolis, Indiana, and listed on the New York Stock
`
`Exchange. There, I counseled the company’s Board of Directors in its compliance
`
`with its corporate duties, Sarbanes-Oxley and New York Stock Exchange
`
`governance requirements, led the company’s efforts in significant acquisitions and
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`dispositions, and managed a law department with an internal and external annual
`
`budget of over $10 million.
`
`6.(cid:1)
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`At Suffolk, I have taught basic and advanced courses in the business
`
`law curriculum, including LLCs and Partnerships, Corporations, Business Entity
`
`Fundamentals, Securities Regulation, and Entrepreneurship, Venture Capital, and
`
`the Law. I am the author of a casebook on unincorporated business entities and I
`
`have written extensively on, among other things, corporate and business law
`
`issues.
`
`II.(cid:1) MATERIALS REVIEWED AND CONSIDERED
`
`7.(cid:1)
`
`In connection with providing this declaration, I have reviewed the
`
`following documents:
`
`•(cid:1)
`
`The decision of the United States Court of Appeals for the
`
`Federal Circuit in Applications in Internet Time, LLC v. RPX Corp., 897 F.3d 1336
`
`
`
`3
`
`
`
`
`
`(Fed. Cir. 2018) (hereinafter “the Federal Circuit Opinion”), specifically the
`
`discussion at page 1354 of the opinion in which the court stated that the PTAB
`
`“underestimate[ed] the relevance . . . of the fact that Salesforce and RPX had
`
`overlapping members on their respective boards of directors”;
`
`•(cid:1)
`
`The decision of the Patent Trial and Appeal Board in Cisco
`
`Systems, Inc. v. Hewlett Packard Enterprise Co., No. IPR 2017-01933 (PTAB
`
`Mar. 16, 2018) (hereinafter “the Cisco Decision”), specifically pages 14-15 of the
`
`Cisco Decision reflecting the PTAB’s discussion of Cisco’s investment in
`
`SpringPath and attainment of “board-level representation”;
`
`•(cid:1)
`
`IPR 2017-01933, No. 2003-61 Exhibit – Confirmed Cisco Did
`
`Invest in SpringPath (PTAB Dec. 21, 2017) (Exhibit 1072) (hereinafter “the Cisco
`
`Exhibit”);
`
`•(cid:1)
`
`The 2018 United States Spencer Stuart Board Index (Exhibit
`
`1067) ( hereinafter “Spencer Stuart Index”);
`
`•(cid:1)
`
`The Notice of 2018 Annual Meeting and 2018 Proxy Statement
`
`of salesforce.com, inc., (hereinafter “Salesforce”) filed with the Securities and
`
`Exchange Commission on May 2, 2018 (Exhibit 1068) (hereinafter “Salesforce
`
`Proxy Statement”); and
`
`
`
`4
`
`
`
`
`
`•(cid:1)
`
`The Notice of Annual Meeting and Proxy Statement of RPX
`
`Corporation, filed with the Securities and Exchange Commission on April 27, 2017
`
`(Exhibit 1069) (hereinafter “RPX Proxy Statement”).
`
`8.(cid:1)
`
`In addition to the above documents, for purposes of rendering the
`
`opinions contained in this declaration, I have consulted the additional sources—
`
`namely, the statutes, regulations, rules, and additional exhibits (Exhibits 1070 and
`
`1071)—referenced below.
`
`III.(cid:1) SANFORD ROBERTSON’S BOARD SERVICE AS AN
`INDEPENDENT DIRECTOR
`9.(cid:1)
`
`As I understand the matter, the sole basis for the reference in the
`
`Federal Circuit Opinion to “Salesforce and RPX [having] overlapping members on
`
`their respective boards of directors” is the fact that Sanford Robertson has served
`
`simultaneously as a director of Salesforce and as a director of RPX. It appears to
`
`be undisputed that Sanford Robertson served simultaneously as a director of
`
`Salesforce and as a director of RPX. According to the Salesforce Proxy Statement
`
`(Exhibit 1068), Sanford Robertson has served as a director of Salesforce since
`
`2003, is an independent director, and has served as the Lead Independent Director
`
`since June 2007. According to the RPX Proxy Statement (Exhibit 1069), Sanford
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`Robertson served as a director of RPX since 2011 and was an independent director.
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`Mr. Robertson’s service as a director concluded when RPX was acquired in June
`
`2018.
`
`
`
`5
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`
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`
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`10.(cid:1) The board of directors of a corporation is its governing body,
`
`generally charged with management of the business and affairs of the corporation.
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`See, e.g. Del. Gen. Corp. Law §141(a). Directors are often referred to as “inside”
`
`or “outside.” “Inside directors” are officers or employees of a corporation who
`
`also serve on their employer corporation’s board. A member of a corporation’s
`
`board of directors, merely by virtue of such position, is not an agent of the
`
`corporation. If such officers or employees who also served as inside directors were
`
`to act on behalf of the corporation, they would not be acting in the capacity of a
`
`member of the board. Rather, a board acts only as a body by way of its
`
`resolutions, and the power and authority of a member of the board is restricted
`
`solely to voting on such resolutions.
`
`11.(cid:1)
`
`In contrast, Mr. Robertson’s biography in both the Salesforce and
`
`RPX Proxy Statements (Exhibits 1068 and 1069, respectively) reveals him to be an
`
`“outside director,” i.e. someone who is not otherwise employed by the corporation.
`
`Any such outside board member purporting to act to bind the corporation solely in
`
`one’s capacity as a board member would carry no apparent authority under laws
`
`and customs in the United States. Moreover, any board member so purporting to
`
`bind the corporation without the creation of another agency capacity and actual
`
`express authority would, in my opinion, almost certainly violate that board
`
`member’s fiduciary obligations to the corporation. In short, in the absence of any
`
`
`
`6
`
`
`
`
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`other evidence to the contrary, Mr. Robertson, as an outside director, would have
`
`had no other role in the management of either of Salesforce or RPX. There would
`
`be no basis for inferring, merely by virtue of his service on the two boards, that he
`
`had the capacity or authority to create a business or corporate relationship between
`
`Salesforce and RPX.
`
`12.(cid:1) Both the Salesforce and RPX Proxy Statements (Exhibits 1068 and
`
`1069, respectively) make it clear that Mr. Robertson was and is an “independent”
`
`director of the companies. These designations have a significance beyond merely
`
`establishing that a director is “outside” rather than “inside.” When a corporation
`
`states in a proxy statement that a director is independent, it is saying that the
`
`director also has no other business relationships with the corporation that would be
`
`generally understood to affect the independence of that director’s judgment while
`
`serving on the board. See, e.g., 17 C.F.R. 240.10A-3 (requiring all members of
`
`public company board audit committees to be independent); New York Stock
`
`Exchange Listed Company Manual §303A.02(a) (defining an independent director
`
`as one who has no “material relationship” with the company “either directly or as a
`
`partner, shareholder or officer of an organization that has a relationship with the
`
`company”); NASDAQ IM-5605 and Equity Rule 5605(a)(2) (defining an
`
`independent director as one who is not an executive officer or employee of
`
`company, and who, in the board’s opinion, has no relationship which would
`
`
`
`7
`
`
`
`
`
`“interfere with the exercise of independent judgment” in carrying out director
`
`responsibilities).
`
`13.(cid:1) The Salesforce and RPX Proxy Statements (Exhibits 1068 and 1069,
`
`respectively) indicate the largest shareholders of each, and I see no evidence that
`
`either company has shared ownership in the other.
`
`14.(cid:1)
`
`I have not become aware, through my own review of the materials or
`
`otherwise, of any evidence contradicting the factual conclusion that Mr. Robertson
`
`was an outside, independent director of both companies, that his only role in either
`
`company was to undertake the usual activities of an outside, independent director,
`
`and that he acted in no other capacity for either company. I therefore base the
`
`following opinion on such conclusions.
`
`15.(cid:1) The Federal Circuit Opinion at 1354 stated that the PTAB
`
`“underestimate[ed] the relevance . . . of the fact that Salesforce and RPX had
`
`overlapping members on their respective boards of directors.” With all due respect
`
`to the Federal Circuit, my opinion is that the term “overlapping” with reference to
`
`Mr. Robertson’s board service at Salesforce and RPX is either meaningless or
`
`misdirected. The bases for my opinion, in addition to the facts and conclusions set
`
`forth above (¶¶ 9-14), follow.
`
`
`
`8
`
`
`
`
`
`16.(cid:1) To infer any kind of corporate relationship between two otherwise
`
`unrelated corporations2 – that there is an “overlap” between the corporations –
`
`merely because one individual sits on each of their boards of directors is, quite
`
`simply, wrong. As noted in the Spencer Stuart Index (Exhibit 1067) at page 17,
`
`62.5% of independent directors of S&P 500 companies serve on two or more
`
`public company boards of directors. For example, General Colin Powell, in
`
`addition to sitting on the Salesforce board, sits on the board of Bloom Energy
`
`Corporation, a producer of solid oxide fuel technologies. See Exhibit 1070 (also
`
`available at https://www.bloomenergy.com/company/board). When I was the
`
`
`2 When I refer to “unrelated corporations” or “unrelated companies,” I mean that
`
`such corporations would not be “affiliates” under the definitions the SEC has
`
`promulgated pursuant to the Securities Act of 1933. See 17 C.F.R. 230.405 (“An
`
`affiliate of, or person affiliated with, a specified person, is a person that directly, or
`
`indirectly through one or more intermediaries, controls or is controlled by, or is
`
`under common control with, the person specified.”). Further, “[t]he term control
`
`(including the terms controlling, controlled by and under common control with)
`
`means the possession, direct or indirect, of the power to direct or cause the
`
`direction of the management and policies of a person, whether through the
`
`ownership of voting securities, by contract, or otherwise.” See id.
`
`
`
`9
`
`
`
`
`
`general counsel of Great Lakes Chemical Corporation, Louis Lataif, then the dean
`
`of the Boston University Graduate School of Management, sat on our board, as
`
`well as the boards of Intier Automotive and Bank Audi (USA), neither of which
`
`had anything to do with our company. James Crownover, another of the Great
`
`Lakes Chemical board members, sat on the board of Unocal Corporation (Union
`
`Oil of California). See Exhibit 1071 (2002 Proxy Statement of Great Lakes
`
`Chemical Corporation, also available at
`
`https://www.sec.gov/Archives/edgar/data/43362/000091205702012288/a2073489z
`
`def14a.htm.). No one could reasonably suggest that, as a result of these board
`
`memberships, Bloom Energy “overlaps” with Salesforce, or Great Lakes Chemical
`
`with any of Intier Automotive, Bank Audi (USA), or Unocal.
`
`17.(cid:1)
`
`Indeed, where one or more directorships on multiple boards reflects a
`
`meaningful “overlap,” as appears to have been the case in the Cisco Decision, it is
`
`because of a relationship of common ownership, parent-subsidiary, or significant
`
`investment (particularly by a venture capital or private equity fund). Where such
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`overlaps occur, the SEC requires (Item 401 of Regulation S-K, 17 CFR 229.407
`
`and Item 7 of Schedule 14A (Rule 14a-101)) the company to briefly describe “any
`
`arrangement or understanding” between a director or a nominee for election as a
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`director and any other person (naming such person) pursuant to which the director
`
`or nominee was or is to be selected as a director or nominee.
`
`
`
`10
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`
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`18.(cid:1)
`
`In the Cisco Decision, the facts were that Cisco had made such a $34
`
`million investment in SpringPath and thus had gained board-level representation.
`
`See Cisco Exhibit (Exhibit 1072). The RPX Proxy Statement (Exhibit 1069)
`
`reflects no such an “overlap” between Salesforce and RPX and no such “overlap”
`
`involving Mr. Robertson. I have not become aware, through my own review of the
`
`materials or otherwise, of any evidence that Salesforce had any involvement or
`
`influence in Mr. Robertson being named a director at RPX.
`
`19.(cid:1)
`
`I have personal experience in which directorship “overlaps” reflect a
`
`parent corporation’s control of a wholly or partial owned subsidiary. For a period
`
`of time, Great Lakes Chemical Corporation, of which I was the Senior Vice
`
`President, General Counsel and Secretary, owned a majority of the outstanding
`
`common stock of another corporation publicly traded on the NASDAQ exchange,
`
`OSCA, Inc. The same 2002 Great Lakes Chemical Corporation proxy statement
`
`(Exhibit 1071) referred to above indicates that four Great Lakes directors (Messrs.
`
`Bulriss, Hale, Crownover, and Nichols) also served as directors of OSCA. Those
`
`four directors also constituted a majority of the OSCA board of directors. That,
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`and not the common occurrence of someone happening to sit on the boards of two
`
`unrelated companies, is where it would be fair, reasonable, and meaningful to
`
`characterize the directorships as “overlapping.”
`
`
`
`11
`
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`
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`20.(cid:1)
`
`In conclusion, based on the materials I have reviewed, there is no
`
`basis to believe that Mr. Robertson was anything other than the typical, well-
`
`regarded business executive who served on multiple boards of otherwise unrelated
`
`companies. According to the Salesforce Proxy Statement (Exhibit 1068), Mr.
`
`Robertson also serves as a director of Pain Therapeutics, Inc. and had previously
`
`served as a director of Dolby Laboratories. In contrast to the appropriate inference
`
`of “overlapping” where there is a relationship of ownership or investment between
`
`two companies (as reflected in the Cisco Decision), it is entirely inappropriate to
`
`infer an “overlap” merely as a result of an individual’s service as an independent
`
`director of two or more otherwise unrelated public companies.
`
`21.(cid:1) Service as an independent director of two or more public companies
`
`would not, by itself, suggest any relationship (controlling or otherwise) between
`
`two unrelated public companies.
`
`
`
`
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`
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`12
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`
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`I understand and have been warned that willful false statements and the like
`
`are punishable by fine or imprisonment, or both ( 18 U.S.C. § 1001).
`
`I declare that
`
`all statements made herein of my own knowledge are true and that all statements
`
`made on information and belief are believed to be true, and further, that these
`
`statements were made with the knowledge that willful false statements and the like
`
`so made are punishable by fine or imprisonment, or both, under § 1001 of title 18
`
`of the United States Code.
`
`I declare under penalty of perjury that the foregoing is true and correct.
`
`
`
`13
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`
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