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`Paper No. __
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_____________
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`RPX CORPORATION,
`Petitioner,
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`v.
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`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
`_____________
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`PETITIONER’S OPENING BRIEF
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`1 The word-for-word identical paper is filed in each proceeding identified in the
`heading.
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`I.
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`TABLE OF CONTENTS
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`INTRODUCTION ............................................................................................. 1
`A. AIT Requires Probing Whether RPX Is Representing Salesforce’s
`Interest in these IPRs ................................................................................... 1
`B. The Federal Circuit Ordered Further Evidentiary Analysis ........................ 3
`C. Salesforce Is Not an RPI or RPX’s Privy .................................................... 6
`II. THE EVIDENCE ESTABLISHES SALESFORCE IS NOT AN RPI
`OR RPX’S PRIVY IN THESE IPRS ................................................................ 8
`A. RPX’s Business Model ................................................................................ 8
`1. RPX’s Core Service Is Defensive Patent Aggregation ......................... 8
`a. Gathering and Sharing Market Intelligence Is an Important
`Aspect of the Defensive Patent Aggregation Service ................... 9
`b. RPX Clears Liability for Members Via Its Defensive
`Patent Aggregation Service ......................................................... 10
`c. RPX Files IPRs on Its Own To Benefit RPX’s Core
`Business ....................................................................................... 10
`2. Additional Services Not Provided to Salesforce ................................. 11
`a. RPX Never Insured Salesforce ................................................... 12
`b. Facilitation of Validity Challenges Does Not Refer to
`Challenges Filed by RPX ............................................................ 12
`c. When RPX Files a Validity Challenge for a Client’s
`Benefit, the Client Is Named an RPI ........................................... 13
`3. RPX’s Best Practices Ensure Compliance with the Law .................... 13
`4. RPX Does Not Shield Clients from Being Named RPIs .................... 17
`5. The Federal Circuit Was Misled by AIT’s Arguments
`Mischaracterizing RPX’s Business Model.......................................... 17
`a. AIT Conflated Statements About RPX’s Core Patent
`Aggregation Service with Others About RPX Facilitating
`Clients’ Own Validity Challenges .............................................. 17
`(1) Reasons RPX Files IPRs ..................................................... 18
`(2) Reasons Clients Join RPX .................................................. 18
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`(3) Facilitating a Client’s Validity Challenge .......................... 19
`b. RPX Extricates Members from Lawsuits by Acquiring
`Assets, Not by Filing Validity Challenges .................................. 19
`c. “Extension of the Client’s In-House Legal Team” Refers
`to Sharing Market Intelligence—Not Filing IPRs ...................... 20
`d. RPX’s Public Materials Do Not Represent That RPX Has
`Authority To File IPRs for Clients .............................................. 22
`B. Salesforce’s Relationship with RPX ......................................................... 23
`1. Salesforce Contracts for RPX’s Core Patent Aggregation
`Service ................................................................................................. 23
`2. Salesforce Contracted for
` ................................... 24
`3. Salesforce Never Contracted for a Validity Challenge ....................... 24
`4. Salesforce’s Payments Are Unrelated to these IPRs ........................... 25
`5. RPX Is a Salesforce Customer ............................................................ 26
`6. RPX Has Never Insured Salesforce .................................................... 27
`7. RPX Has No Relationship to the AIT-Salesforce Litigation or
`Salesforce CBMs ................................................................................. 27
`8. RPX’s Communications with Salesforce Regarding the AIT-
`Salesforce Litigation Did Not Relate to a Validity Challenge ............ 27
`a. January 2014 Communication .................................................... 28
`b. February and June 2014 Communications .................................. 28
`c. August 2014 Communication ..................................................... 29
`d. March 2015 Communication ...................................................... 30
`e. April/May 2015 Communication ................................................ 30
`f. These Communications Did Not Involve RPX Working To
`Ascertain Whether Salesforce Wanted RPX To File an
`IPR ............................................................................................... 31
`C. RPX Board Member .................................................................................. 34
`1. Mr. Robertson’s Role on RPX’s Board Does Not Reflect
`Salesforce Controlling RPX ................................................................ 35
`2. Mr. Robertson Had No Influence on, or Role in, these IPRs .............. 36
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`D. RPX Filed these IPRs for Its Own Interests .............................................. 36
`1. Extensive Evidence Corroborates Messrs. Chuang’s and
`Chiang’s Sworn Testimony That RPX Filed the AIT IPRs To
`Pursue RPX’s Interests Rather Than Salesforce’s .............................. 38
`a. Astonishingly Broad Patents RPX Could Invalidate .................. 38
`b. Software Industry in the Crosshairs So AIT IPRs Might
`Prevent Future Lawsuits .............................................................. 39
`c. RPX Files IPRs Against Patents Not Asserted Against
`Any Member ............................................................................... 41
`2. “Reputational Benefits” Means Showing Willingness To
`Invalidate Low-Quality Patents - Not Protecting a Client’s
`Interests................................................................................................ 41
`3. If RPX Wanted To Protect Salesforce’s Interests, RPX Would
`Have Attempted To Acquire Rights in the AIT Patents ..................... 42
`4. The Existence of a Single Time-Barred Defendant Weighed in
`Favor of Filing the AIT IPRs, but That Defendant Being an
`RPX Client Weighed Against ............................................................. 43
`a. Existence of Single Time-Barred Defendant Weighed in
`Favor ........................................................................................... 43
`b. Defendant Being RPX Client Weighed Against Filing .............. 44
`5. RPX Overcame Concerns About the Defendant Being an RPX
`Client ................................................................................................... 46
`6. RPX Was Not Representing Salesforce’s Interests ............................. 47
`E. Conclusion - Salesforce Was Entirely Uninvolved in these IPRs ............. 48
`III. SALESFORCE IS NOT AN RPI UNDER THE LAW................................... 48
`A. None of the Facts That Can Make an Unnamed Party an RPI Are
`Present ....................................................................................................... 48
`B. AIT Could Not Have Established a “Benefits-Plus-Relationship”
`Test Running Afoul of Binding Supreme Court Precedent ...................... 50
`C. RPX Did Not Represent Salesforce’s Interests ......................................... 52
`1. Representation Requires Appointment - Absent Here ........................ 53
`2. Agency Requires Control and Assent - Both Absent Here ................. 54
`3. AIT’s Attorney-in-Fact/Agent Argument Fails .................................. 55
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`4. AIT’s Apparent Authority Argument Fails ......................................... 55
`D. RPI Conclusion .......................................................................................... 57
`IV. SALESFORCE IS NOT RPX’S PRIVY IN THESE IPRS ............................. 58
`A. AIT Waived This Argument ...................................................................... 58
`B. Privity Is a Limited Exception to the Rule Against Nonparty
`Preclusion .................................................................................................. 58
`C. No Exception to the Rule Barring Nonparty Preclusion Applies ............. 59
`1. RPX Is Not Salesforce’s Proxy ........................................................... 60
`2. Salesforce’s Contractual Relationship with RPX Does Not
`Make Salesforce a Privy in These IPRs .............................................. 61
`3. No Other Taylor Exception Applies ................................................... 63
`V. CONCLUSION ................................................................................................ 63
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`TABLE OF AUTHORITIES
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`CASES
`Applications in Internet Time, LLC v. RPX Corp.,
`897 F.3d 1336 (Fed. Cir. 2018) .................................................................... passim
`Cisco v. Hewlett Packard,
`IPR2017-01933, Paper 9 ...................................................................................... 35
`Global-Tech Appliances, Inc. v. SEB S.A.,
`563 U.S. 754 (2011) ............................................................................................. 33
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`Google LLC v. Seven Networks,
`IPR2018-01051, Paper 28, 14-15 ......................................................................... 52
`O’Neill v. Dep’t of Hous. & Urban Dev.,
`220 F.3d 1354 (Fed. Cir. 2000) ............................................................................ 54
`Pac. Gas & Elec. Co. v. United States,
`838 F.3d 1341 (Fed. Cir. 2016) ............................................................................ 55
`Taylor v. Sturgell,
`553 U.S. 880 (2008) ......................................... 2-3, 7, 48, 50-51, 53-54, 59-61, 63
`Unified Patents v. Barkan Wireless Holdings,
`IPR2018-01186, Paper 24, 7 ......................................................................... 26, 52
`Unified Patents v. Realtime Adaptive Streaming,
`IPR2018-00883, Paper 29, 13-15 ......................................................................... 52
`Ventex Co. v. Columbia Sportswear North America,
`IPR2017-00651, Paper 148, 10 ............................................................................ 52
`
`WesternGeco LLC v. ION Geophysical Corp.,
`889 F.3d 1308 (Fed. Cir. 2018) ....................................................... 7, 58-59, 61-63
`Wi-Fi One, LLC v. Broadcom Corporation,
`887 F.3d 1329 (Fed. Cir. 2018) .................................................... 49, 51, 57, 61-62
`STATUTES
`35 U.S.C. § 315(b) ............................................................................. 1, 51, 58, 61-63
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`OTHER AUTHORITIES
`77 Fed. Reg. 48,756 ............................................................................... 48-51, 58, 60
`Restatement (Third) Of Agency (2006) ............................................................. 54-56
`Wright & Miller,
`Federal Practice & Procedure, § 1552 (3d ed. 2018) ..................................... 56-57
`Wright, Miller & Cooper,
`Federal Practice & Procedure, § 4456 (3d ed. 2018) ........................................... 56
`Wright, Miller, & Cooper,
`Federal Practice & Procedure, § 4454 (2d ed. 2018) ........................................... 53
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`I.
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`INTRODUCTION
`These cases (“the AIT IPRs”) return on remand to determine whether
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`Salesforce is a real party-in-interest (RPI) under 35 U.S.C. § 315(b). Applications
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`in Internet Time, LLC v. RPX Corp., 897 F.3d 1336, 1358 (Fed. Cir. 2018) (“AIT”).
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`The Federal Circuit did not order the Board to consider whether Salesforce is
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`RPX’s privy under § 315(b) given that AIT did not timely raise that argument, but
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`indicated the Board “may” do so. Id., 1358, 1344 n.1.
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`The evidence is overwhelming that Salesforce is neither an RPI nor RPX’s
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`privy in these IPRs. RPX had no involvement in the AIT-Salesforce Litigation or
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`CBMs that would justify precluding RPX from pursuing these IPRs. Salesforce
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`did not fund, direct, control, suggest, or have any involvement whatsoever in these
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`IPRs. RPX has no corporate relationship with Salesforce, and RPX’s relationship
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`with Salesforce is entirely unrelated to these IPRs. RPX filed the IPRs to pursue
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`its own interests, not as Salesforce’s proxy. Salesforce did not appoint RPX to
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`represent Salesforce’s interests in these IPRs, RPX never agreed to do so, and RPX
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`has in fact not done so. None of the facts that could make Salesforce an RPI or
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`RPX’s privy in these IPRs under § 315(b) are present.
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`A. AIT Requires Probing Whether RPX Is Representing
`Salesforce’s Interest in these IPRs
`The Federal Circuit noted it previously had “little occasion to grapple with
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`the meaning of the term ‘real party in interest’ in the context of § 315(b)” and that
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`the primary issue on appeal was whether the Board applied an erroneous
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`understanding of RPI. Id., 1344. AIT concluded the Board applied an unduly
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`narrow test and should probe “the extent to which Salesforce … has an interest in
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`and will benefit from RPX’s actions, and inquire whether RPX can be said to be
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`representing that interest after examining its relationship with Salesforce.” Id.,
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`13532; see also § III.B below citing Board decisions rejecting arguments that AIT
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`established a broader “benefits-plus-relationship” test, because AIT focuses on
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`whether RPX could be said to be representing Salesforce’s interests in these IPRs.
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`AIT confirmed that the common law of RPI and privity controls, and that the
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`Board’s Trial Practice Guide (“TPG”) is a “thoughtful and useful resource” on the
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`law of RPI and privy. AIT, 1344-45 n.2. Under the common law, a nonparty can
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`be found to be an RPI or privy only in exceptional limited circumstances. In
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`Taylor v. Sturgell, 553 U.S. 880 (2008) (“Taylor”), the Supreme Court
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`unanimously rejected a “virtual representation” test under which a party could be
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`found to have represented a nonparty’s interests in an action simply because the
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`entities shared an interest in the action’s outcome and had an existing relationship.
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`Taylor makes clear that due process prevents binding a nonparty to the result of a
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`proceeding in which the nonparty did not participate, and that exceptions to this
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`2 Emphasis is added throughout unless otherwise indicated.
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`rule are limited and strictly cabined. Taylor, 884, 892-95, 898. No exceptions
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`apply here.
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`A finding that one party represents the interests of another (the principal) as
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`the principal’s representative requires that the principal validly appoint the
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`representative. See § III.C.1 below. Salesforce never appointed RPX to represent
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`Salesforce’s interests in these IPRs. See §§ II.B.3, II.D.6 below. An agency
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`relationship requires that the principal and agent both assent to form such a
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`relationship and that the principal maintain control of the agent’s actions. See
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`§ III.C.2 below. Neither Salesforce nor RPX assented to form an agency
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`relationship, and Salesforce had no control over RPX’s actions in these IPRs. See
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`§§ II.B-D below. RPX in no sense represented Salesforce’s interests, but instead
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`filed and prosecuted these IPRs solely to pursue RPX’s own interests.
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`B.
`The Federal Circuit Ordered Further Evidentiary Analysis
`Salesforce did not control, fund, suggest, or have any involvement
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`whatsoever with these IPRs. See §§ II.B-C below; Ex. 1019, ¶ 20; Ex. 1094,
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`156:2-7. The evidence establishes that RPX filed and prosecuted these IPRs solely
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`to represent its own interests, not Salesforce’s. See § II.D below; Ex. 10903, ¶ 33
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`3 Citations use the Exhibit and Paper numbers in IPR2015-01750.
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`(“RPX’s filing of the AIT IPR petitions was not undertaken on behalf of Salesforce
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`in any respect.”).
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`AIT’s argument before the Board that Salesforce was an unnamed RPI was
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`based solely on AIT’s assertion that RPX had “no interest” of its own in pursuing
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`the IPRs, so RPX must be acting as a proxy/agent for Salesforce. Paper 21
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`(“POPR”), 1 (RPX is “an agent, not a principal. RPX has no interest.”), 6 (“RPX
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`has no interest in a review of the AIT patents”), 13 (“RPX has no interest”). The
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`Board rejected AIT’s argument as based entirely on unsupported speculation and
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`mischaracterizations of the evidence. Paper 51 (Decision on Institution, “DI”), 9-
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`10 (rejecting AIT’s argument as based on “quotations out-of-context and/or
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`mischaracterizations of” RPX’s website and public filings, and because the
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`evidence was “contrary to Patent Owner’s assertions that RPX is acting as a proxy
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`for Salesforce.”), 12 (rejecting AIT’s argument that the timing of Salesforce’s
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`payments to RPX indicated “Salesforce advanced RPX the cost of the petitions,”
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`because the evidence established “these payments, and the timing thereof, were
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`based on the cost structure set forth in the membership agreement … well before
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`the [AIT] patent was asserted against Salesforce.”).
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`The Federal Circuit ordered the Board to further examine (1) RPX’s
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`business model, (2) “RPX’s explanation of its own interests in the IPRs,”
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`(3) Salesforce’s relationship with RPX, (4) the relevance of “the fact that
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`Salesforce and RPX had overlapping Board members,” and (5) Salesforce’s
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`interest in the IPRs and “whether RPX can be said to be representing that
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`interest.” AIT, 1351, 1353-54.
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`RPX welcomes the Board diving more deeply into these factual issues. The
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`better the Board and Federal Circuit understand RPX’s business model, the reasons
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`clients join RPX, and RPX’s reasons for filing these IPRs, the clearer it will be that
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`AIT’s speculation that RPX filed the IPRs to pursue Salesforce’s interests is
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`wrong.
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`RPX voluntarily provided additional discovery in this remand proceeding
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`that was so exhaustive AIT sought nothing further. That evidence includes sworn
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`testimony from William Chuang (Executive Vice President, Client Services) and
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`Steve Chiang (Senior Director and IP Counsel), both personally involved in RPX’s
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`decision to pursue the AIT IPRs. Messrs. Chuang and Chiang state unequivocally
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`that the IPRs were pursued solely to pursue RPX’s interests and not Salesforce’s,
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`and support that sworn testimony with detailed explanation corroborated by
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`documentary evidence.
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`AIT suggested certain pieces of evidence might “imply” RPX filed these
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`IPRs to pursue Salesforce’s interests. See, e.g., AIT, 1352. Messrs. Chuang and
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`Chiang address this evidence point-by-point, explaining how the evidence implies
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`no such thing. See § II below citing, e.g., Ex. 1073, ¶¶ 30 (“the Federal Circuit’s
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`above statements [about RPX’s business model, the reasons RPX files IPRs and
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`the reasons clients join RPX] are wrong in several respects”), 31 (“Contrary to the
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`Federal Circuit opinion’s mistaken inference, the prospect of RPX filing an IPR
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`petition in the event that a client is sued by an NPE is not a ‘key reason clients pay
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`RPX.’”); see also AIT, 1342 (referencing a “very significant payment shortly
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`before the IPR petitions at issue here were filed” despite the Board’s citation of
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`undisputed evidence that the payment amount and timing were unrelated to the
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`IPRs), 1351 (citing the same evidence from RPX’s website and public filings that
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`the Board (DI, 9) correctly noted AIT took out of context and/or mischaracterized),
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`1362 (Judge Reyna suggesting Salesforce may be insured by RPX when that has
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`never been the case), 1354 (alleging the Board underestimated the relevance of a
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`common board member, despite the Board correctly finding the board member
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`“was not involved in the decision to file the instant Petition” (DI, 13)).
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`C.
`Salesforce Is Not an RPI or RPX’s Privy
`The operative facts are the same as when the Board rejected AIT’s
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`unsubstantiated assertion that Salesforce is an RPI. RPX’s relationship with
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`Salesforce is fundamentally similar to RPX’s relationship with its other clients
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`who, like Salesforce, contract only for RPX’s core defensive patent aggregation
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`service under which RPX’s clients obtain rights to patents RPX acquires or
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`licenses from NPEs. See §§ II.A-B below. That relationship is entirely unrelated
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`to the AIT IPRs, which RPX pursued only for RPX’s own reasons. RPX filed the
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`IPRs to advance RPX’s business in numerous ways explained below. Among
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`those reasons, RPX sought to achieve reputational benefits that could help attract
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`new clients for RPX’s core patent aggregation service by refuting accusations from
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`RPX’s competitors that RPX was “too close to NPEs,” rewarded them by acquiring
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`rights to “worthless” patents, and “didn’t have the stomach” to challenge facially
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`invalid NPE patents like AIT’s. Ex. 1095, 97:4-98:12; Ex. 1019, ¶¶ 10, 41;
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`Ex. 1090, ¶¶ 23-25.
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`RPX has had no communication with Salesforce about what, if any, benefits
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`Salesforce believes it might derive from these IPRs. Even if Salesforce, as a
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`litigation defendant accused of infringing the patents challenged in these IPRs
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`(“AIT Patents”), has its own different and independent interests in having those
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`patents declared unpatentable, the law is clear that a nonparty with an interest in an
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`action’s outcome does not become an RPI simply by having a relationship with the
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`party who brought the action. Indeed, as discussed in §§ III.B and IV.C.2 below,
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`those facts were present in Taylor (where the Supreme Court unanimously rejected
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`the assertion that a shared interest in the outcome and a relationship unrelated to
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`the action was sufficient to trigger nonparty preclusion), WesternGeco LLC v. ION
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`Geophysical Corp., 889 F.3d 1308, 1320-21 (Fed. Cir. 2018) (“WesternGeco”)
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`(rejecting the assertion that a shared interest in the outcome and a relationship
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`unrelated to the action was sufficient to establish privity), and numerous Board
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`cases rejecting the argument that AIT established a “benefits-plus-relationship”
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`test.
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`The law is clear that more than a shared interest in the outcome and a
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`relationship unrelated to these IPRs is required to make Salesforce an RPI or
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`RPX’s privy. Despite two rounds of exhaustive discovery, there is no evidence of
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`anything more—because there is nothing more. Salesforce is not an RPI or RPX’s
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`privy in these IPRs.
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`II. THE EVIDENCE ESTABLISHES SALESFORCE IS NOT AN RPI OR
`RPX’S PRIVY IN THESE IPRS
`A. RPX’s Business Model
`1.
`RPX’s Core Service Is Defensive Patent Aggregation
`RPX (Rational Patent EXchange®) acts as an intermediary between
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`operating companies and NPEs, imposing a “rational” valuation structure on NPE
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`patents. Ex. 2008, 3 (“we provide a conduit through which value can flow between
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`market participants at lower transaction costs than is typically the case when
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`patents are monetized through litigation or the threat of litigation”). RPX’s core
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`service involves RPX collecting annual membership fees based on members’
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`operating income, and using those funds to reduce the risk of NPE lawsuits by
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`acquiring rights (via purchase or license) to NPE patents and granting rights under
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`those patents to RPX’s members. Id.; Ex. 1073, ¶ 3.
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`The license rights to patent assets RPX has acquired is the primary reason
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`clients become RPX members. Ex. 1073, ¶¶ 3, 31; Ex. 2008, 3-4 (RPX’s “core”
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`solution of “defensive patent aggregation” constitutes the “benefits for which
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`clients pay membership fees”). Mr. Chuang’s testimony that clients join RPX to
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`benefit from defensive patent aggregation is corroborated by documentary
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`evidence, including RPX’s public materials that AIT mischaracterized, and RPX’s
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`Form Membership Agreement which specifies services clients receive for their
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`membership fees. Ex. 1073, ¶¶ 3-9; Ex. 1019, ¶ 8, citing Attachment B; Ex. 1074;
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`Ex. 1075.
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`a. Gathering and Sharing Market Intelligence Is an
`Important Aspect of the Defensive Patent
`Aggregation Service
`RPX gathers “extensive and valuable market intelligence” to support its core
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`defensive patent aggregation service, and shares it with its members. Ex. 1073,
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`¶ 8, citing Ex. 2008, 3; Ex. 1090, ¶ 32; Ex. 1095, 65:13-16, 116:6-117:1.
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`RPX monitors NPE lawsuits and gathers market intelligence to valuate
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`patent assets RPX might acquire to clear risk for its members from NPEs asserting
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`those assets. Ex. 1019, ¶ 35; Ex. 1073, ¶ 8; Ex. 2008, 1-4; Ex. 2007. RPX
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`regularly communicates with its clients, and the mutual sharing of NPE
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`intelligence benefits RPX and its members. Ex. 1019, ¶ 22; Ex. 1073, ¶ 8;
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`Ex. 1090, ¶ 32; Ex. 2008, 3-4.
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`RPX has settled over 1,200 lawsuits via transactions under which RPX has
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`acquired rights under thousands of NPE-owned patents. Ex. 1073, ¶¶ 5, 31. Thus,
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`RPX has extensive experience with NPEs and lawyers that represent them.
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`Ex. 1019, ¶ 22. RPX’s conversations with NPEs sometimes are confidential; but
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`when they are not, RPX shares valuable insight with members that can assist in
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`evaluating an NPE’s expectations for its assertion campaign. Id.; Ex. 1090, ¶¶ 17,
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`32; Ex. 1095, 41:7-11.
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`b.
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`RPX Clears Liability for Members Via Its Defensive
`Patent Aggregation Service
`If RPX seeks to clear liability for its members from NPE patents, RPX does
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`so through its core patent aggregation service by acquiring rights under the patents.
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`Ex. 1073, ¶¶ 31, 35; Ex. 2007. RPX believes that AIT sought to have RPX do just
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`that by repeatedly raising settlement with RPX (see § II.D.3 below), but RPX did
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`not engage in those discussions because RPX did not file these IPRs to clear
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`liability for Salesforce. Ex. 1073, ¶ 38; Ex. 1090, ¶ 24.
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`c.
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`RPX Files IPRs on Its Own To Benefit RPX’s Core
`Business
`RPX developed its Best Practices in 2014 to formalize a program for filing
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`IPRs to further RPX’s interests. Ex. 1019, ¶¶ 7-14; Ex. 1073, ¶ 26; Ex. 1090, ¶ 16.
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`Among multiple reasons RPX pursues IPRs to further its own interests, the
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`primary one motivating these IPRs (see § II.D below) was reputational benefits to
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`better position RPX’s core patent aggregation business by refuting accusations that
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`RPX was “too close to NPEs” and “didn’t have the stomach” to challenge facially
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`invalid NPE patents like AIT’s. Ex. 1095, 97:4-98:12; Ex. 1019, ¶¶ 10, 41;
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`Ex. 1090, ¶¶ 23-25. NPEs that assert facially invalid patents hurt RPX’s core
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`service by eroding public perception of patents’ value and making potential clients
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`question whether they should pay subscription fees to RPX. Ex. 1019, ¶ 8;
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`Ex. 1095, 97:7-98:12. Demonstrating a history of successfully invalidating patents
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`via IPR also enhances RPX’s leverage in negotiating reasonable acquisition fees
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`with NPEs. Ex. 1019, ¶ 9.
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`2.
`Additional Services Not Provided to Salesforce
`RPX offers certain other services to clients who separately contract for them.
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`AIT discussed RPX’s participation in a validity challenge for a client’s benefit, and
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`RPX’s insurance business. E.g., AIT, 1351-52.
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`These additional services are not part of RPX’s core service, are not
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`included in RPX’s Form Membership Agreement (or Salesforce’s membership
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`agreement based thereon), and are only provided to clients who specifically,
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`explicitly and separately contract for them. Ex. 1073, ¶¶ 9-10.
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`These additional services are described below, but Salesforce did not
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`contract for or receive them. Id., ¶ 16; see §§ II.B.1-3 below.
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`RPX does not provide these additional services for clients that do not
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`explicitly and separately contract for them, so a non-contracting client like
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`Salesforce would have no reasonable expectation that RPX would provide these
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`additional services for the non-contracting client. Ex. 1073, ¶ 10. Neither
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`Salesforce nor any other non-contracting client has ever expressed an expectation
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`that it should or would receive from RPX any of these additional services the client
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`did not “specifically, explicitly and separately contract for.” Id.
`
`a.
`RPX Never Insured Salesforce
`RPX provides insurance against NPE patent litigation to clients who
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`purchase policies,
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`
`
`
`
`. Ex. 1019, ¶ 7.
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`Judge Reyna suggested RPX’s insurance service might establish “another
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`form of the legal relationship between RPX and Salesforce.” AIT, 1362. It does
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`not. RPX has never insured Salesforce. Ex. 1073, ¶ 16.
`
`b.
`
`Facilitation of Validity Challenges Does Not Refer to
`Challenges Filed by RPX
`Contrary to AIT’s suggestion (AIT, 1351-52), the mention in RPX’s 2013
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`Annual Report of “facilitation of challenges to patent validity” (Ex. 2008, 4) does
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`not refer to RPX filing a patent validity challenge at all, let alone to doing so for
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`
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`an unnamed client. Ex. 1073, ¶ 11. The statement “refers to RPX providing some
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`assistance [e.g., prior art] that would aid (i.e., ‘facilitate’) in some way a client’s
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`own validity challenge, where the client is a named filer of the validity
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`challenge.” Id.
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`c. When RPX Files a Validity Challenge for a Client’s
`Benefit, the Client Is Named an RPI
`Since at least 2014, when RPX established a formal Best Practices process
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`for filing IPRs, “RPX does not file validity challenges in its own name while acting
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`on behalf of an unnamed client,” and “where RPX participates as a filer of a patent
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`validity challenge for the benefit of a specific client, the client must contract
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`specifically, explicitly and separately for that service” and agree to be named an
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`RPI. Id., ¶¶ 10-11; Ex. 1095, 117:23-118:17.
`
`3.
`RPX’s Best Practices Ensure Compliance with the Law
`Mr. Chuang previously described RPX’s “Validity Challenge Identification
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`Process and Best Practices” (Ex. 2018, “Best Practices Guide”) and RPX’s
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`adherence thereto in pursuing these IPRs. See Ex. 1019, ¶¶ 14-19, 39-49. AIT
`
`noted “it is undisputed that RPX nominally adhered to its ‘best practices,’ which
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`prohibit it from discussing IPRs with clients who do not agree to be named” as
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`RPIs. AIT, 1352.
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`AIT remarked that RPX’s “‘best practices’ … do not bear on whether RPX
`
`files IPR petitions to benefit specific clients that previously have been accused of
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`patent infringement,” and “note[d] that the circumstances surrounding RPX’s
`
`creation of its Best Practices Guide—none of which the Board considered—cast
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`additional doubt on the company’s motivations.” Id., 1352 and n.4 (emphasis
`
`original). To remove any “doubt” about RPX’s motivations, Messrs. Chiang and
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`Chuang elaborate on the creation of RPX’s Best Practices Guide and explain that
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`RPX does not file IPR petitions to benefit specific clients unless those clients are
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`named co-filers. Ex. 1090, ¶¶ 12-13, 16-19; Ex. 1073, ¶¶ 10-11, 26-27, 40.
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`In June 2014, shortly after the Board’s decisions denying institution of
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`RPX’s IPRs against VirnetX, and at a time when RPX had limited IPR experience
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`(having only ever filed two sets of petitions), RPX formed a validity challenge
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`identification team, whose “first task was to create a sound and consistent process
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`and set of best practices for the team and RPX to follow in identifying patents that
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`would make for good validity challenge candidates.” Ex. 1090, ¶ 16; Ex. 1073,
`
`¶ 26.
`
`The Best Practices Guide had three purposes: (1) identify validity challenge
`
`candidates that would best serve RPX’s interests; (2) “ensure RPX is complying
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`with all contractual obligations” relating to confidential information received from
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`patent owners under non-disclosure; and (3) “ensure that RPX would accurately
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`name all [RPIs] under the evolving law on RPI for all future petitions RPX filed.”
`
`Ex. 1090, ¶ 16; Ex. 2018, 1.
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`“[T]he validity challenge identification team believed it to be paramount that
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`in future petitions where RPX was indeed the sole RPI, it was not sufficient that
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`RPX believed itself to be the sole RPI; but, additionally, best practices needed to
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`be developed and followe