Filed on behalf of Innovative Display Technologies LLC
`By:
`Justin B. Kimble (JKimble-IPR@bcpc-law.com)
`
`Jeffrey R. Bragalone (jbragalone@bcpc-law.com)
`
`Bragalone Conroy PC
`
`2200 Ross Ave.
`
`Suite 4500 – West
`
`Dallas, TX 75201
`
`Tel: 214.785.6670
`
`Fax: 214.786.6680
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`K.J. PRETECH CO., LTD.,
`Petitioner,
`
`v.
`
`INNOVATIVE DISPLAY TECHNOLOGIES LLC,
`Patent Owner.
`
`Case IPR2015-01868
`U.S. Patent No. 7,434,974
`
`
`
`PATENT OWNER’S FIRST MOTION FOR ADDITIONAL DISCOVERY
`ON PRIVITY FROM K.J. PRETECH
`
`
`
`Mail Stop PATENT BOARD
`Patent Trial and Appeal Board
`U.S. Patent & Trademark Office
`P.O. Box 1450
`
`
`By:
`Justin B. Kimble (JKimble-IPR@bcpc-law.com)
`
`Jeffrey R. Bragalone (jbragalone@bcpc-law.com)
`
`Bragalone Conroy PC
`
`2200 Ross Ave.
`
`Suite 4500 – West
`
`Dallas, TX 75201
`
`Tel: 214.785.6670
`
`Fax: 214.786.6680
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`K.J. PRETECH CO., LTD.,
`Petitioner,
`
`v.
`
`INNOVATIVE DISPLAY TECHNOLOGIES LLC,
`Patent Owner.
`
`Case IPR2015-01868
`U.S. Patent No. 7,434,974
`
`
`
`PATENT OWNER’S FIRST MOTION FOR ADDITIONAL DISCOVERY
`ON PRIVITY FROM K.J. PRETECH
`
`
`
`Mail Stop PATENT BOARD
`Patent Trial and Appeal Board
`U.S. Patent & Trademark Office
`P.O. Box 1450
`
`
`
`Case IPR2015-01868
`Patent 7,434,974
`I.
`INTRODUCTION
`
`The supplier arrangement and the surrounding circumstances strongly
`
`suggest that this petition for inter partes review was filed at the behest of LG
`
`Display or LG Electronics (collectively, “LG”), for which KJ Pretech Co., Ltd.
`
`(“KJ Pretech”), supplies the key backlighting units contained in the products that
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`are at issue in litigation between LG and Patent Owner, Innovative Display
`
`Technologies LLC (“IDT”). Patent Owner believes that LG, which is time-barred
`
`from filing petitions itself, has used this petition to circumvent the time bar under
`
`35 USC § 315(b). Evidence confirming LG’s control over this petition lies with KJ
`
`Pretech and its counsel (which, notably, also represents LG in both the underlying
`
`litigation and other inter partes review proceedings relating to the same patent. The
`
`common counsel used by LG and KJ Pretech is no coincidence, and further
`
`indicates the extent to which these proceedings are being conducted at the behest
`
`of LG. IDT therefore asks the Board to compel KJ Pretech to produce the
`
`information set forth in this motion for limited additional discovery. IDT further
`
`contends that communications, including emails, between LG and KJ Pretech
`
`regarding the decision to file and substance of this petition will be instrumental in
`
`showing the nature of the relationship between KJ Pretech and LG. Such written
`
`communications are part of and complete the intercompany agreements. To the
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`1
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`
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`Case IPR2015-01868
`Patent 7,434,974
`extent not allowed in response to this Motion, IDT intends to seek discovery of
`
`these email communications once the Board has seen the supplier agreements.
`
`II.
`
`FACTUAL BACKGROUND
`
`IDT accuses LG of infringing the patent that is the subject of the petition in
`
`the District of Delaware. See Delaware Display Group LLC et al. v. LG
`
`Electronics Inc. et al., No. 1:13-cv-02109 (D. Del., filed Dec. 31, 2013) (the
`
`“Delaware Litigation”). LGE and LGD were served with the complaint on January
`
`2, 2014. In response to that litigation, LG filed 19 IPR petitions against the patent-
`
`at-issue and other patents asserted in the Delaware Litigation. See IPR2014 -
`
`01092; -01094; -01095; -01096; -01097; -01357; -01359; -01362; IPR2015 -
`
`00487; -00489; -00490; -00492; -00493; -00495; -00496; -00497; -00506; -01666;
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`and -01717. LG then moved to stay the litigation pending the outcome of the IPR
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`proceedings. See Delaware Litigation, Dkt. 81, Joint Status Report on IPR
`
`Petitions, Ex. 2001 at 2-3.
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`However, while the motion to stay was pending, and after over one year
`
`since LG was served with the complaint, the Board denied institution of four of the
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`IPRs against two of the asserted patents and denied institution of six out of the
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`eight claims challenged against a third asserted patent. See IPR2014-01095 &
`
`IPR2015-00496 (U.S. Patent No. 8,215,816 (the “’816 Patent”) institution denied);
`
`IPR2014-01092 & IPR2015-00497 (U.S. Patent No. 7,434,974 (the “’974 Patent”)
`
`
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`2
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`Case IPR2015-01868
`Patent 7,434,974
`institution denied); and IPR2014-01096 & IPR2015-00493 (U.S. Patent No. US
`
`7,537,370 (the “’370 Patent”) denying institution of six out of eight challenged
`
`claims). Thus, LG is now time-barred from filing further IPRs under 35 USC §
`
`315(b).
`
`Following denial of institution of the foregoing IPRs, and just a month from
`
`the hearing on LG’s motion to stay, KJ Pretech (a major LG supplier) filed three
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`IPR petitions coinciding with the patent claims denied institution by LG. See
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`IPR2015-01866 (’816 Patent), IPR2015-01867 (’974 Patent), IPR2015-01868
`
`(’370 Patent) (collectively “Pretech IPRs”).1 Again, the timing was no coincidence,
`
`and was clearly done so that LG could represent to the district court that all of the
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`asserted claims in the litigation were subject to a pending IPR petition. See
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`Defendant’s Stay Hearing Presentation (“LG Stay Presentation”), Exhibit 2002 at 2
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`(representing to the district court that asserted claims, including those of KJ
`
`Pretech “will be canceled”) (emphasis in original)). In fact, LG highlighted the KJ
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`Pretech filings in its presentation. See id. at 5 (showing how the KJ Pretech filings
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`fit into LG’s overall IPR strategy). And it no coincidence that the KJ Pretech
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`filings neatly “fill the gaps” of the claims asserted in the Delaware Litigation that
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`were not covered by LG’s denied IPRs. These representations were made by LG
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`counsel, the same attorneys who represent KJ Pretech in this IPR.
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`1 See Ex. 2001 (Joint Status Report on IPR Petitions, Filed 10/12/15).
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`
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`3
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`Case IPR2015-01868
`Patent 7,434,974
`Additionally, LG has produced a supplier agreement under a protective order
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`in the Delaware Litigation that supports the Patent Owner’s contention that there is
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`a business relationship between KJ Pretech and LG such that LG is in privity to
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`Petitioner or itself a real party in interest. Patent Owner requests that KJ Pretech
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`produce all supplier agreements and related documents in this proceeding.
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`III. REASONS FOR THE RELIEF REQUESTED
`
`The Patent Trial Practice Guide (“Trial Practice Guide”) explains that
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`whether an unnamed party constitutes a RPI is a “highly fact-dependent question.”
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`77 Fed. Reg. 48,756, 48,759 (Aug. 14, 2012). An important consideration is
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`“whether the non-party exercised or could have exercised control over a party’s
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`participation in a proceeding.” Id. (emphasis added). Other factors are the unnamed
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`party’s relationship to the petitioner. Id. Determination of whether a petition
`
`identifies all RPIs is a “threshold issue,” on which Petitioner bears the burden of
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`persuasion. Reflectix Inc. v. Promethean Insulation Technology LLC, IPR2015-
`
`00047, Paper 18 at 8 (PTAB Apr. 24, 2015) (denying institution); Atlanta Gas
`
`Light Co. v. Bennett Regulator Guards, Inc., IPR2013-00453, Paper 88 at 7-8
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`(PTAB Jan. 6, 2015). Central to the Board’s determination is whether a party other
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`than the named petitioner is “controlling, or capable of controlling” the proceeding
`
`before the Board. Reflectix at 9-10. Further, complete control is not required, “if a
`
`nonparty can influence a petitioner’s actions in a proceeding before the Board, to
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`
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`4
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`
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`Case IPR2015-01868
`Patent 7,434,974
`the degree that would be expected from a formal co-petitioner, that nonparty
`
`should be considered an RPI to the proceeding.” Aruze Gaming Macau LTD v.
`
`MGT Gaming Inc., IPR2014-01288, Paper 13 at 12 (PTAB Feb. 20, 2015).
`
`Moreover, “RPI is the relationship between a party and a proceeding; RPI does not
`
`describe the relationship between parties.” Aruze Gaming Macau at 11. The Trial
`
`Practice Guide explains that an RPI, as used in the context of an IPR, “is the party
`
`that desires review of the patent. Thus, the ‘real party-in-interest’ may be the
`
`petitioner itself, and/or it may be the party or parties at whose behest the petition
`
`has been filed.” Trial Practice Guide at 48,759 (emphasis added). The Trial
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`Practice Guide also provides that “[u]ltimately, that analysis seeks to determine
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`whether the relationship between the purported ‘privy’ and the relevant other
`
`party is sufficiently close such that both should be bound by the trial outcome
`
`and related estoppels.” Id. (emphasis added). Further,
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`[t]he emphasis is not on the concept of identity of parties, but on
`the practical situation. Privity is essentially a shorthand statement
`that collateral estoppel is to be applied in a given case; there is no
`universally applicable definition of privity. The concept refers to a
`relationship between the party to be estopped and the unsuccessful
`party in the prior litigation which is sufficiently close so as to justify
`application of the doctrine of collateral estoppel.
`
`Id. (emphasis added).
`
`
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`5
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`
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`Case IPR2015-01868
`Patent 7,434,974
`Given that RPI requires a fact intensive analysis, IDT seeks this limited
`
`additional discovery of documents and facts that only KJ Pretech, LG and their
`
`common counsel possess. Furthermore, IDT’s discovery requests are narrowly
`
`tailored and “necessary in the interest of justice,” 35 U.S.C. § 316(a)(5), and meet
`
`each of the factors set forth in Garmin Int’l, Inc. v. Cuozzo Speed Tech., LLC,
`
`IPR2012-00001, Paper 26 “Garmin”). Additionally, since privity and RPI is a
`
`threshold issue that would bar Petitioner’s Petition, IDT requests to receive the
`
`requested discovery in time to address it prior to its deadline for filing its
`
`preliminary response.
`
`A. The obvious usefulness of the requested discovery
`
`As demonstrated above, the discovery IDT seeks will be useful in
`
`demonstrating that at least LG is an RPI. See Request No. 1. IDT seeks the
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`“intercompany agreements” between KJ Pretech and LG that lay out the
`
`relationship and obligations between the companies when intellectual property
`
`suits arise, including indemnity obligations.
`
`KJ Pretech is a supplier of at least a component of accused products in the
`
`litigation. Further, the KJ Pretech IPRs were filed by the same lawyers at the same
`
`law firm that filed the LGD and LGE IPRs2. KJ Pretech’s counsel also admits to
`
`2 Even though the Board has determined that mere indemnity agreements or
`
`sharing the same counsel, does not necessarily indicate that a party is in privity,
`
`
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`6
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`
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`Case IPR2015-01868
`Patent 7,434,974
`using the later filed IPRs (including KJ Pretech’s) as a way to fill in the missing
`
`pieces presented to and denied by the PTAB. See LG Stay Presentation, Exhibit
`
`2002 at 4-5.
`
`Limited discovery of the existence and details of the agreement related to
`
`rights, obligations or indemnification for allegations of infringement of third party
`
`intellectual property rights is highly relevant to determining the privity and RPI
`
`issue. Further, Patent Owner believes that the most probative evidence of the
`
`importance of the supplier agreements will be the limited set of communications
`
`between KJ Pretech and LG regarding the filing of these IPRs and the assertion of
`
`indemnity rights under the agreements. To the extent that the Board did not
`
`authorize a current request for such limited communications, Patent Owner
`
`reserves the right to make this request once the agreements are of record in this
`
`proceeding.
`
`B. IDT is not seeking KJ Pretech’s litigation positions or their bases.
`
`KJ Pretech is not a party to the litigations of any of the patents it seeks to
`
`challenge in IPR. Thus, IDT is not seeking KJ Pretech’s litigation positions or their
`
`bases. Moreover, the information sought only has to do with the direction and
`
`control of IPR proceedings and is not a litigation position or base.
`
`these have served as important factors to consider. See Zoll Lifecor Corp. v. Philips
`
`Elecs. N. Am. Corp., IPR2013-00609, Paper 15 at 12 (PTAB 2014).
`
`
`
`7
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`
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`Case IPR2015-01868
`Patent 7,434,974
`C. IDT has no ability to generate equivalent information.
`
`IDT’s discovery requests narrowly target information about KJ Pretech’s
`
`control and funding of the KJ Pretech IPRs that is not publicly available. Although
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`IDT seeks some information produced in the Delaware litigation, it is subject to a
`
`protective order that precludes IDT (but not KJ Pretech) from using it in the KJ
`
`Pretech IPRs.
`
`D. IDT has provided easily understandable instructions.
`
`IDT’s instructions are easily understandable and are based on the
`
`instructions the Board approved in Garmin. IPR2012-00001, Paper No. 26 at 14.
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`E. The requested discovery is not overly burdensome.
`
`The request seeks specific documents, namely the supplier agreements. To
`
`the extent authorized, even the email communications are specifically targeted by
`
`subject (communications between LG and KJ Pretech regarding indemnity claims
`
`and the filing and maintenance of the KJ Pretech IPRs) and focused as to time.
`
`IV. ORDERING KJ PRETECH TO PRODUCE ITS OWN
`CONFIDENTIAL INFORMATION DOES NOT VIOLATE THE
`DISTRICT COURT PROTECTIVE ORDER.
`
`Ordering KJ Pretech to produce documents disclosed in the Delaware
`
`litigation would not violate the court’s protective order. The Board has previously
`
`ordered documents first produced in litigation to be produced in a related
`
`proceeding. See SAP Am., Inc. v. Versata Dev. Grp., CMB2012-0001, Paper 24 at
`
`
`
`8
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`
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`Case IPR2015-01868
`Patent 7,434,974
`3-4 (PTAB 2012) (ordering petitioner to produce expert reports and deposition
`
`transcripts from litigation). IDT is willing to enter into the Board’s standard
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`protective order or another order amenable to KJ Pretech and the Board.
`
`V. DOCUMENTS AND THINGS REQUESTED
`
`REQUEST FOR PRODUCTION NO. 1
`
`The intercompany agreements between KJ Pretech and LG regarding rights,
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`obligations or indemnification for allegations of infringement of third party
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`intellectual property rights, and any joint defense agreements among
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`Petitioner and any of the defendants in the Delaware Litigation concerning
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`the handling of intellectual property disputes.
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`To the extent authorized by the Board, Patent Owner further seeks documents
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`responsive to the following request:
`
`
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`9
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`
`
`Case IPR2015-01868
`Patent 7,434,974
`REQUEST FOR PRODUCTION NO. 2
`
`Written communications between LG and KJ Pretech regarding either (a)
`
`indemnity
`
`for patent
`
`infringement claims made by
`
`Innovative Display
`
`Technologies, LLC, against LG or LG customers; and/or (b) the filing and
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`maintenance of inter partes review actions against patents owned by Innovative
`
`Display Technologies, LLC.
`
`Dated: December 1, 2015
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`Respectfully submitted,
`
`
`
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`
`
`
`
`
`
`
`________________________
`Justin B. Kimble
`Attorney for Patent Owner
`Registration No. 58,591
`Bragalone Conroy PC
`2200 Ross Ave.
`Suite 4500 – West
`Dallas, TX 75201
`
`
`
`10
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`
`
`Case IPR2015-01868
`Patent 7,434,974
`CERTIFICATE OF SERVICE
`
`
`
`The undersigned hereby certifies that document has been served via
`
`electronic mail on December 1, 2015, to Petitioner at following email addresses
`
`pursuant to its consent in its Petition at p. 2-3: rpluta@mayerbrown.com,
`
`bpaul@mayerbrown.com,
`
`astreff@mayerbrown.com,
`
`and
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`alam@mayerbrown.com; with a courtesy copy to PretechIPR@mayerbrown.com.
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` ________________________
`
`
`
`
`
`
`Justin B. Kimble
`
`
`
`
`
`
`Attorney for Patent Owner
`
`
`
`
`
`
`Registration No. 58,591
`
`
`
`
`
`Bragalone Conroy PC
`
`
`
`
`
`2200 Ross Ave.
`
`
`
`
`
`Suite 4500 – West
`
`
`
`
`
`Dallas, TX 75201
`
`
`
`
`
`
`
`
`
`11
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