UNITED STATES PATENT AND TRADEMARK OFFICE
`______________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`______________________
`
`ACTIVISION BLIZZARD, INC., ELECTRONIC ARTS INC.,
`TAKE-TWO INTERACTIVE SOFTWARE, INC., 2K SPORTS, INC., and
`ROCKSTAR GAMES, INC.,
`
`Petitioners
`
`v.
`
`ACCELERATION BAY, LLC,
`Patent Owner
`______________________
`
`Cases IPR2015-01951, IPR2015-01953 (Patent 6,714,966 B1)
`Cases IPR2015-01964, IPR2015-01996 (Patent 6,829,634 B1)
`Cases IPR2015-01970, IPR2015-01972 (Patent 6,701,344 B1)1
`
`______________________
`
`Before the Honorable SALLY C. MEDLEY, LYNNE E. PETTIGREW, and
`WILLIAM M. FINK, Administrative Patent Judges.
`
`
`PETITIONERS’ SUBMISSION OF TRANSCRIPT OF TELEPHONE
`CONFERENCE ON JULY 11, 2016
`
`
`Petitioners file the attached transcript of the Telephone Conference with the
`
`Board dated Monday, July 11, 2016 in the above-captioned matters.
`
`
`
`
`1 During the July 11, 2016 telephone conference with the Board, Petitioners were
`
`given leave to use a joint caption to submit the transcript of the conference.
`
`

`
`Cases IPR2015-01951, IPR2015-01953 (Patent 6,714,966 B1)
`Cases IPR2015-01964, IPR2015-01996 (Patent 6,829,634 B1)
`Cases IPR2015-01970, IPR2015-01972 (Patent 6,701,344 B1)
`
`Dated: July 12, 2016
`
`Respectfully submitted,
`
`By: /s/ James L. Davis, Jr.
`J. Steven Baughman (lead counsel)
`Reg. No. 47,414
`
`Ropes & Gray LLP
`2099 Pennsylvania Avenue,
`N.W.
`Washington, D.C. 20006- 6807
`P: 202-508-4606/ F: 202-383-8371
`Steven.Baughman@ropesgray.com
`
`James L. Davis, Jr. (back-up counsel)
`Reg. No. 57,325
`Ropes & Gray LLP
`1900 University Avenue, 6th Floor
`East Palo Alto, CA 94303-2284
`P: 650-617-4794/F: 650-566-4147
`james.l.davis@ropesgray.com
`
`
`
`
`
`Andrew Thomases (back-up counsel)
`Reg. No. 40,841
`Ropes & Gray LLP
`1900 University Avenue, 6th Floor
`East Palo Alto, CA 94303-2284
`P: 650-617-4712/F: 650-566-4275
`andrew.thomases@ropesgray.com
`
`Matthew R. Shapiro (back-up counsel)
`Reg. No. 70,945
`Ropes & Gray LLP
`1211 Avenue of the Americas
`New York, NY 10036-8704
`P: 212-596-9427/F: 646-728-1784
`matthew.shapiro@ropesgray.com
`
`Joseph E. Van Tassel (back-up counsel)
`Reg. No. 74,136
`Ropes & Gray LLP
`1211 Avenue of the Americas
`New York, NY 10036-8704
`P: 212-596-9438/F: 646-728-1727
`joseph.vantassel@ropesgray.com
`
`Mailing address for all correspondence: ROPES & GRAY LLP, IPRM – Floor 43,
`Prudential Tower, 800 Boylston St., Boston, MA 02199-3600
`
`
`
`
`
`
`
`2
`
`

`
`Cases IPR2015-01951, IPR2015-01953 (Patent 6,714,966 B1)
`Cases IPR2015-01964, IPR2015-01996 (Patent 6,829,634 B1)
`Cases IPR2015-01970, IPR2015-01972 (Patent 6,701,344 B1)
`
`
`
`CERTIFICATE OF SERVICE
`
`The undersigned certifies that a copy of the foregoing PETITIONER’S
`
`SUBMISSION OF TRANSCRIPT OF TELEPHONE CONFERENCE ON
`
`JULY 11, 2016 was served on July 12, 2016 in its entirety by causing the afore-
`
`mentioned document to be electronically mailed, pursuant to the parties’ agree-
`
`ment, to the following attorneys of record for the Patent Owner listed below:
`
`James Hannah
`Michael Lee
`Kramer Levin Naftalis & Frankel LLP
`990 Marsh Road
`Menlo Park, CA 94025
`(650) 752-1700
`jhannah@kramerlevin.com
`mhlee@kramerlevin.com
`svdocketing@kramerlevin.com
`
`Shannon Hedvat
`Kramer Levin Naftalis & Frankel LLP
`1177 Avenue of the Americas
`New York, NY 10036
`(212) 715-9100
`shedvat@kramerlevin.com
`
`Attorneys for Patent Owner Acceleration Bay, LLC
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`ROPES & GRAY LLP
`
`/Bridget McAuliffe/
`Bridget McAuliffe
`
`3
`
`
`
`
`
`

`
`Page 1
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`---------------------------------------x
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`---------------------------------------x
`
` ACTIVISION BLIZZARD, INC.
` ELECTRONIC ART, INC.
` TAKE-TWO INTERACTIVE SOFTWARE, INC.
` 2K SPORTS, INC., and
` ROCKSTAR GAMES,
` Petitioner,
` V.
` ACCELERATION BAY, LLC.
` Patent Owner.
`--------------------------------------x
`
` MEET AND CONFER TELEPHONE CONFERENCE
` Monday, July 11, 2016
`
`Reported by:
`GOLDY GOLD, CSR, RPR
`JOB NO. 109950
`
`TSG Reporting - Worldwide 877-702-9580
`
`1 2
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`3
`4
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`5 6
`
`7
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`14
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`16
`17
`18
`19
`20
`21
`22
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`24
`25
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`

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`Page 2
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`Page 3
`
`1
`APPEARANCES:
`2
`SALLY C. MEDLEY, Administrative Judge
`3
`LYNNE E. PETTIGREW, Administrative Judge
`4 WILLIAM M. FINK, Administrative Judge
`
`567
`
`ROPES & GRAY
`Attorneys for Petitioner/Activision
` 191 North Wacker Drive
` Chicago, IL 60606
`BY: JAMES DAVIS, ESQ.
` J. STEVEN BAUGHMAN, ESQ.
`
`KRAMER LEVIN NAFTALIS & FRANKEL
`Attorneys for Defendants
` 990 Marsh Road
` Menlo Park, CA 94025
`BY: JAMES HANNAH, ESQ.
`
`8
`9
`10
`11
`12
`13 WILSON SONSINI GOODRICH & ROSATI
`Attorneys for Petitioner/Plaintiff
`14
` 701 Fifth Avenue
` Seattle, WA 98104
`15
`BY: ANDREW BROWN, ESQ.
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
` July 11, 2016
` 1:30 p.m.
`
`12
`
`3
`
`45
`
` Telephone Conference, held before
`6 Goldy Gold, a Registered Professional
`7
`Reporter, Certified Shorthand Reporter,
`8
`and Notary Public of the State of New
`9 York.
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
`Page 4
`
`Page 5
`
`1
` PROCEEDINGS
`2
` ADMINISTRATIVE JUDGE FINK: This
`3
`is Judge Fink and Judges Medley and
`4
`Pettigrew are also on the line.
`5
` And if we can start with a roll
`6
`call with who we have for petitioner.
`7
` MR. DAVIS: Your Honor, Steve
`8
`Baughman and Jim Davis from Ropes &
`9 Gray for the Activision petitioners.
`10
` I understand Andy Brown from
`11 Wilson Sonsini will be joining for the
`12
`Bungie petitioner.
`13
` MR. BROWN: Yes, this Andy Brown
`14
`from Wilson Sonsini on behalf of
`15
`Bungie.
`16
` MR. DAVIS: Your Honor, just to
`17
`let you know we do have a court
`18
`reporter arranged for today.
`19
` ADMINISTRATIVE JUDGE FINK:
`20
`Thank you for that information.
`21
` We received an e-mail from
`22
`petitioner regarding two issues: The
`23
`first issue is in regard to the
`24
`relationship between Acceleration Bay
`25
`and Boeing in these proceedings. And
`
`1
` PROCEEDINGS
`2
`the second issue is regarding a
`3
`possible motion to amend the patent
`4
`owner filed.
`5
` So we'll start with the first
`6
`issue, if you can just give me one
`7
`second.
`8
` Mr. Baughman or counsel for
`9
`petitioner, Mr. Thomases, initiated
`10
`the e-mail.
`11
` So petitioner's counsel, why
`12
`don't you go first and explain your
`13
`position, and then we'll hear from
`14 Mr. Hannah.
`15
` MR. BAUGHMAN: Thanks, Your
`16 Honor. This is Steve Baughman.
`17
` Petitioner's request has to do
`18 with the District of Delaware's
`19
`June 3, 2016, order in the District
`20
`Court litigation. That's number
`21
`1:15CV00228 and the order is
`22 Document 148.
`23
` In that order, the court held
`24
`that with respect to the patents at
`25
`issue in these proceedings,
`2 (Pages 2 to 5)
`
`TSG Reporting - Worldwide 877-702-9580
`
`

`
`Page 6
`
`Page 7
`
`1
` PROCEEDINGS
`2 Acceleration Bay was, as of June 3rd,
`3
`not an owner but rather an exclusive
`4
`licensee, and that's on page 5 of the
`5
`order. And that patent owner Boeing,
`6
`quote, did not transfer all
`7
`substantial rights to Acceleration
`8
`Bay, and that's on page 9 of the
`9
`order.
`10
` Early in these proceedings,
`11
`however, beginning around October 15th
`12 with their mandatory notices and
`13
`powers of attorney -- and, for
`14
`example, that's Papers 3 and 4 in the
`15
`01951 proceeding, Acceleration Bay
`16
`told the Board and petitioners that
`17 Acceleration Bay was the patent owner,
`18 with no mention of Boeing.
`19
` The District of Delaware found
`20
`the contrary: Acceleration Bay was an
`21
`exclusive licensee with fewer than all
`22
`substantial rights. And rather than
`23
`appeal that decision, as Acceleration
`24
`Bay's counsel told the Board in an
`25
`e-mail on June 15th of this year,
`
`Page 8
`
`1
` PROCEEDINGS
`2
`quote, subsequent to that order,
`3 Acceleration Bay and the Boeing
`4
`Company entered into an amended and
`5
`restated patent purchase agreement,
`6
`resolving all the issues identified by
`7
`the district court in that order.
`8
` Acceleration Bay filed the
`9
`agreement in court. We've seen a
`10
`redacted copy of it. And Acceleration
`11
`Bay dismissed their earlier suit
`12 without prejudice and then re-filed.
`13
` So their actions to date, in
`14
`petitioner's view, confirm that
`15 Acceleration Bay is not disputing it
`16 was not the patent owner before the
`17
`June 3rd order of the court and that
`18
`later amended restated purchase
`19
`agreement.
`20
` There's been no appeal of the
`21
`order. Instead they simply filed the
`22
`new agreement and simply filed the
`23
`litigation, after dismissing without
`24
`prejudice.
`25
` But they've been filing papers
`
`Page 9
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
` PROCEEDINGS
`and taking actions in these PTAB
`proceedings long before June 3rd.
` As the Board found in the
`Bio-Rad case, and that's
`IPR 2015-00009, Paper 9, under the
`statute 35 USC 313, it's a patent
`owner who has the right to file a
`preliminary response; page 3 of the
`order. The Board applies traditional
`common-law principles that determine
`real parties and interests, and this
`uniformity of approach with the
`federal courts was designed to ensure
`conventional principles of estoppel
`and preclusion are going to apply in
`both places.
` Same page: And under these
`principles, an exclusive licensee that
`does have substantial rights can be an
`effective patentee; that's page 3.
` In that Bio-Rad case, at the
`time of the Board's order, there was
`no evidence to find a basis for
`licensee to file papers as the patent
`
`1
` PROCEEDINGS
`2
`owner, and the Board there issued an
`3
`order to show cause why the licensee's
`4
`paper shouldn't be expunged.
`5
` And a similar situation applies
`6
`here. Given the district court's June
`7
`finding that Acceleration Bay was an
`8
`exclusive licensee with less than all
`9
`substantial rights, it was not an
`10
`effective patent owner and didn't have
`11
`the authority to act alone in filing
`12
`its preliminary response and proceed
`13 without Boeing, at least until the
`14
`amended restated agreement we talked
`15
`about in June, which we've seen only
`16
`in redacted form.
`17
` So petitioners are requesting
`18
`and we believe we are entitled to have
`19
`Boeing, which was the real patent
`20
`owner for that period before
`21
`June 2016, sign on to the filings that
`22 Acceleration Bay made before the
`23
`agreement, and significantly to
`24
`confirm that Boeing has produced or
`25 will produce to us information as the
`3 (Pages 6 to 9)
`
`TSG Reporting - Worldwide 877-702-9580
`
`

`
`1
` PROCEEDINGS
`2
`real patent owner was required to do
`3
`under 37 CFR 42.51(b)(1)(iii). That's
`4
`the inconsistent information
`5
`provision.
`6
` We know from our first call with
`7
`the Board on January 28th, there were
`8
`some issues of information disclosure
`9
`and control of information between
`10
`Boeing and Acceleration Bay, which
`11 Your Honor will recall. Acceleration
`12
`Bay's counsel cited obligations to
`13
`Boeing as among the reasons it had
`14
`redacted certain information from the
`15
`documents it filed.
`16
` And so petitioners respectfully
`17
`request that Boeing be ordered to sign
`18
`on to Acceleration Bay's filings
`19
`before June and confirm it has
`20
`produced or to produce now whatever
`21
`inconsistent information should have
`22
`been produced, based on those
`23
`positions when they were filed in this
`24
`proceeding.
`25
` I'm happy to respond to cases
`
`Page 10
`
`Page 11
`
`1
` PROCEEDINGS
`2
`that were raised in the e-mails from
`3
`patent owner, Your Honor, but it
`4
`probably makes sense to do that after
`5
`they've spoken.
`6
` ADMINISTRATIVE JUDGE FINK: Is
`7
`petitioner disputing that as a result
`8
`of the amended and restated patent
`9
`purchase agreement, that the
`10 Acceleration Bay is now the patent
`11
`owner?
`12
` MR. BAUGHMAN: You Honor, the
`13
`section that the new agreement, which
`14 we received under -- the sections of
`15
`the new agreement regarding licenses
`16
`to which the agreement is subject are
`17
`redacted. We received it under
`18
`default protective order. We don't
`19
`have the redacted portions.
`20
` The petitioner is respectfully
`21
`-- we don't intend at this time to
`22
`pursue through discovery of the Board
`23
`the issue of standing to go forward.
`24 We think that's probably more
`25
`appropriately addressed in litigation.
`
`Page 13
`
`Page 12
`
`1
` PROCEEDINGS
`2
` So we're focusing our request
`3
`now on relief prior to that amended
`4
`agreement that was mentioned in
`5
`counsel's e-mail to the Board on
`6
`June 15th.
`7
` ADMINISTRATIVE JUDGE FINK:
`8 Okay. Thank you for that
`9
`clarification.
`10
` Mr. Hannah, why don't you go
`11
`ahead.
`12
` MR. HANNAH: Thank you, Your
`13 Honor. This is James Hannah.
`14
` Your Honor, we'll start with the
`15
`district court litigation.
`16
` With regard to the district
`17
`court litigation, the issue there was
`18
`a prudential standing and whether that
`19
`there was a prudential standing for
`20 Acceleration Bay to maintain the suit
`21
`against some of the petitioners in
`22
`this case, including Activision.
`23
` It was not a case or an order
`24
`regarding a patent owner in this
`25
`regard, in terms of the IPR.
`
`1
` PROCEEDINGS
`2
` And as a result of that, the
`3
`court did find that Boeing would have
`4
`to join the district court litigation
`5
`in order to maintain the suit, or it
`6
`could correct it with a new agreement.
`7
` And the reason there is very
`8
`specific. It is because if Boeing
`9
`didn't join that suit based on the
`10
`district court's finding, then Boeing
`11
`could go ahead and sue the defendants
`12
`again, even if Acceleration Bay lost.
`13
` So there is an issue there for
`14
`standing in that the order would be
`15
`binding.
`16
` For instance, if there was a
`17
`noninfringement finding or something
`18
`similar, that Boeing couldn't re-sue
`19
`under its own name and wouldn't be
`20
`barred by any estoppel provisions or
`21
`anything like this. It shouldn't stay
`22
`a res judicata or things of that
`23
`nature.
`24
` So that's the issue. And that's
`25 why prudential standing is a
`4 (Pages 10 to 13)
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`
`Page 14
`
`Page 15
`
`1
` PROCEEDINGS
`2
`completely different issue in district
`3
`courts as it is in the IPRs.
`4
` I think that the case is very
`5
`clear.
`6
` There is the Legend 3 case,
`7 which is IPR2015-01350, Paper 12.
`8
` ADMINISTRATIVE JUDGE FINK:
`9
`Could you say that again?
`10
` MR. HANNAH: Just the citation,
`11 Your Honor?
`12
` ADMINISTRATIVE JUDGE FINK: Yes.
`13
` MR. HANNAH: Yes. It's the
`14
`Legend 3 v. Prime Focus IPR. It's
`15
`case IPR2015-01350.
`16
` This case explicitly states
`17
`that -- and I'll quote -- that "there
`18
`is no similar requirement of exclusive
`19
`ownership for a patent owner to
`20
`prosecute an inter partes review
`21
`proceeding in the USPTO. To the
`22
`contrary, our rules contemplate that
`23
`an owner of a part interest in the
`24
`subject patent be moved to act to the
`25
`exclusion of an inventor or a co-owner
`
`Page 16
`
`1
` PROCEEDINGS
`2
`in situations where a co-owner is
`3
`unable or refuses to prosecute the
`4
`proceeding," citing 37 CFR, section
`5
`42.9.
`6
` ADMINISTRATIVE JUDGE FINK:
`7 Which paper are you reading from?
`8
` MR. HANNAH: Paper 12, Your
`9 Honor.
`10
` ADMINISTRATIVE JUDGE FINK:
`11 Okay.
`12
` MR. HANNAH: In the Legend 3.
`13
` And it says further, "Our
`14
`jurisdiction is over every involved
`15
`patent during the proceeding, citing
`16
`again 37 CFR 42.3. Thus, we are not
`17
`persuaded that this is an issue of
`18
`standing, as that terms is used in
`19
`patent infringement actions bought in
`20
`district court."
`21
` And then the case goes on to
`22
`state what the requirements are.
`23
` In terms of what is required to
`24
`participate in this, it says, "Patent
`25
`owner has met the requirements of our
`
`Page 17
`
`1
` PROCEEDINGS
`2
`rules for participation in this
`3
`proceeding. In its notices filed on
`4
`June 26th" -- and now I'm paraphrasing
`5
`because it has it has the citations to
`6
`the code -- but on June 26th it
`7
`identified itself as a patent owner
`8
`and a real party at interest, and lead
`9
`counsel was identified as having
`10
`affirmative representation.
`11
` And further, to our knowledge,
`12
`no other parties requested to appear
`13
`in this proceeding, claiming an
`14
`ownership interest in the subject
`15
`patent.
`16
` Clearly all those requirements
`17
`have been met here. Acceleration Bay
`18
`has been assigned to the patent.
`19
`That's clear in the docket. There's
`20
`been no disagreement to that, that
`21 Acceleration Bay has been assigned the
`22
`patent.
`23
` It has been filed with the
`24 USPTO. There's assignment records.
`25 And its notices pursuant to the rules,
`
`1
` PROCEEDINGS
`2 we have identified ourselves as the
`3
`patent owner, and I have identified
`4 myself as lead counsel and have full
`5
`authority to act on behalf of the
`6
`patent owner.
`7
` And, furthermore, Boeing was
`8
`actually served with the IPR
`9
`proceedings when it was first filed,
`10
`and Boeing has not made request to
`11
`appear in this proceeding, claiming an
`12
`ownership in the patent.
`13
` So all of those factors, in
`14
`light of the Legend 3 case, should
`15 weigh in the fact that the standing
`16
`issue is not the same as in district
`17
`court, and that Acceleration Bay has
`18
`the full authority to act as a patent
`19
`owner.
`20
` Counsel brought up the Bio-Rad
`21
`case. The Bio-Rad case has very
`22
`different circumstances. In that
`23
`case, Caltech was identified as the
`24
`patent owner and the assignee in the
`25
`public record. And then the Fluidigm
`5 (Pages 14 to 17)
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`Page 18
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`Page 19
`
`1
` PROCEEDINGS
`2
`company filed a petition, filed the
`3
`preliminary response and its mandatory
`4
`notices. So there was nothing in the
`5
`record that actually showed that this
`6
`third-party company had any interest
`7
`in the patent.
`8
` The facts here are very
`9
`different. Acceleration Bay was
`10
`assigned the patents. That assignment
`11
`exists in the PTO, and it has been the
`12
`assignee.
`13
` And then furthermore, the
`14
`petitioners identified Acceleration
`15
`Bay as the patent owner. So the
`16
`petitioners admitted that Acceleration
`17
`Bay was the patent owner since the
`18
`very beginning.
`19
` Therefore -- and that was not
`20
`the case in Bio-Rad. So this is much
`21 more like the Legend 3 issue.
`22
` I'd also like to point out the
`23
`Supreme Court recently confirmed in
`24
`the Cuozzo case that IPRs are
`25
`different in district court
`
`Page 20
`
`1
` PROCEEDINGS
`2
`litigations. And there it held that
`3
`standing issues are different, and it
`4
`is talking there about a petitioner's
`5
`standing, but that logic still applies
`6
`to the issue here in that the standing
`7
`requirements are different before the
`8
`Board as they are in a district court
`9
`proceeding. And that's why the rules
`10
`that the Board has, you know, apply in
`11
`the way that they do.
`12
` If the Board does entertain the
`13
`petitioner's request here, then
`14
`there's two scenarios in which I see
`15
`it.
`16
` One is that the petition itself
`17
`should be -- the entire proceeding
`18
`should be terminated, because the
`19
`petitioners identified the wrong
`20
`patent owner. The case just goes
`21
`away. If that's what the petitioners
`22 want, if the patent owners want, then
`23
`they identified the wrong parties and
`24
`interests, and the proceedings go
`25
`away.
`
`Page 21
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`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`
` PROCEEDINGS
` Second, if the Board does
`entertain this, then I would submit
`that we would treat this call, and
`since we're on the record, as a motion
`under 37 CFR 42.9, that Acceleration
`Bay acts as the patent owner in this
`case. Boeing has been aware of these
`proceedings, has not attempted to
`become part of this proceeding. And,
`therefore, we would submit that if the
`case law isn't clear on its face,
`especially the Legend 3 case, then
`this should be treated as a motion
`37 CFR 42.9.
` And the relief sought is a bit
`bizarre in this case, in my opinion.
`It's not -- they're not asking for
`Boeing to join so that they can
`protect their rights or anything of
`that nature. Boeing is not seeking to
`be a participant in these proceedings.
` So the only thing that this is
`really causing is going to be trying
`to harass Boeing to be a part of these
`
`1
` PROCEEDINGS
`2
`proceedings when it clearly does not
`3
`believe that it is a party and it
`4
`doesn't need to be.
`5
` ADMINISTRATIVE JUDGE FINK: Let
`6 me ask you about that, because it
`7
`doesn't sound like they want Boeing to
`8
`be a part of the proceedings going
`9
`forward.
`10
` It sounds like, if I understand
`11
`petitioner's position, that at this
`12
`point they're merely asking that
`13
`Boeing adopt what has been done up
`14
`till now, which would be the
`15
`preliminary response, I think.
`16
` MR. HANNAH: Your Honor, I
`17
`understand that as well, because this
`18
`new agreement between Boeing and
`19 Acceleration Bay does clear all the
`20
`standing issues, which is why actually
`21
`the district court, on the day that it
`22 was filed, and the date that the
`23
`petitioner's standing issue was
`24
`resolved, there is a new case that was
`25
`filed on the very same day to show the
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`1
` PROCEEDINGS
`2
`continuation of the litigation.
`3
` But I still don't understand
`4 what would be the point to Boeing
`5
`having to adopt the preliminary
`6
`responses.
`7
` You know, first of all, under
`8
`the code cited, they don't want to
`9
`participate in these proceedings. And
`10
`under 37 CFR 42.9, they don't need --
`11
`they're a party that doesn't need to
`12
`participate in these proceedings. And
`13
`there's no harm to the petitioners if
`14
`Boeing doesn't join.
`15
` So in a district court
`16
`litigation, it matters, because if you
`17
`don't have the party, the correct
`18
`plaintiff in that issue that has
`19
`standing to sue, then you can subject
`20
`the defendant to multiple litigations
`21
`on the exact same issues because
`22
`there's a res judicata. That's not
`23
`the issue.
`24
` ADMINISTRATIVE JUDGE FINK: We
`25
`understand that.
`
`Page 24
`
`1
` PROCEEDINGS
`2
` MR. HANNAH: Okay.
`3
` ADMINISTRATIVE JUDGE FINK: If I
`4
`could ask, the other point that
`5
`petitioner raises, whether or not
`6
`Boeing should have had an obligation
`7
`to produce routine discovery as the
`8
`patent owner, did you address that?
`9
` MR. HANNAH: Well, I mean, so
`10
`from my understanding, Boeing doesn't
`11
`have anything, but it can't be ordered
`12
`to -- they can't be forced.
`13
` I mean, under the CFR, under
`14
`37 CFR 42.9, if it's unwilling to
`15
`participate in the proceeding, it
`16
`doesn't have to participate in the
`17
`proceedings. And so if it doesn't
`18 make a statement, then there's no
`19
`inconsistent information for it to
`20 make.
`21
` I mean, the reason to bring, to
`22
`drag Boeing in is completely different
`23
`than in IPRs in district courts.
`24
`They're not making any statement, so
`25
`that there's nothing for them to
`
`Page 25
`
`1
` PROCEEDINGS
`2
`produce and there is no reason to
`3
`bother them as a third party to this.
`4
` It seems like a tactic to be
`5
`able force Boeing to spend resources,
`6
`to have to hire counsel, to
`7
`participate in something when they
`8
`don't have to participate at all.
`9
` I mean, the relief to the
`10
`petitioners is going to be the same
`11 whether Boeing is involved or not, or
`12
`they adopt the preliminary response or
`13
`not.
`14
` I mean, there's no -- there is
`15
`no relief that they're going to get.
`16
`Either the patent is going to become
`17
`valid over the prior art and the
`18
`patent is going to survive or it's
`19
`not. And the petitioners are either
`20
`going to be estopped or they're not.
`21
`So -- I mean, estopped in the district
`22
`court litigation or they're not, based
`23
`on the ruling.
`24
` So there's really -- I just
`25
`don't understand the reasoning here.
`
`1
` PROCEEDINGS
`2
` ADMINISTRATIVE JUDGE FINK: So
`3
`if I can let Mr. Baughman have a
`4
`chance to respond to the points you
`5
`raised.
`6
` I guess the points that I'd like
`7
`to understand more are, as you said,
`8 what is it that petitioner hopes to
`9
`accomplish by having Boeing sign on to
`10
`the papers that have been filed to
`11
`date. And then what of rule 42.9(b),
`12 which is that in some circumstances,
`13
`the co-owner of a patent may not be
`14 willing to participate in the case.
`15
` MR. BAUGHMAN: Thanks, Your
`16 Honor. This is Steve Baughman for the
`17
`petitioners, taking the points and
`18
`then going back through the others
`19
`that were raised as well.
`20
` First, the harm to petitioners
`21
`includes, in part, not receiving the
`22
`routine discovery they should have
`23
`from the actual parties that should
`24
`have appeared, including inconsistent
`25
`information which we do suspect may be
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` PROCEEDINGS
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`present.
`3
` And Boeing shouldn't be able to
`4
`present arguments through another
`5
`party that isn't actually infused with
`6
`the rights of a patent owner as a way
`7
`of avoiding discovery obligations.
`8
` The 42.9 issue was never raised.
`9
`It's not as though Activision came
`10 with its mandatory notices, which were
`11
`filed in October -- Papers 3 and 4 in
`12
`the 1951 proceeding, for example --
`13
`and said, hey, we are a co-owner with
`14
`Boeing, and Boeing doesn't want to
`15
`appear, so we're going to move
`16
`forward.
`17
` This was not something that was
`18
`ever raised until we raised it after
`19
`the district court order. So the
`20
`notion that the going-forward solution
`21
`to the standing problem solves
`22
`obligations that were not fulfilled in
`23
`the past is not correct.
`24
` There are other issues, like
`25
`frankly our ability to brief in the
`
`Page 26
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`1
` PROCEEDINGS
`2
`joinder motion. The point that we
`3 were no longer subject to a one-year
`4
`bar that we're not going to be able to
`5
`halt with this, and that's caused by
`6
`the fact that we're facing a patent
`7
`owner, purported, who was not actually
`8
`a patent owner.
`9
` On the suggestion that in our
`10
`petition that we misidentified the
`11
`patent owner, it's simply not true.
`12
`If the Board looks in the 01953
`13
`preceding paper to our petition, at
`14
`page 1, we say, for example, the '966
`15
`patent was issued to the Boeing
`16
`company --
`17
` ADMINISTRATIVE JUDGE FINK:
`18
`Sorry. So which -- it's your petition
`19
`you're referring to?
`20
` MR. BAUGHMAN: Yes, Your Honor,
`21
`I'm sorry. It's 1953. Sorry.
`22
` ADMINISTRATIVE JUDGE FINK: And
`23
`if this is the online thing, then I
`24
`probably know.
`25
` MR. BAUGHMAN: Your Honor is
`Page 29
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`Page 28
`
`1
` PROCEEDINGS
`2
`probably having better luck with it
`3
`than I have. It's Paper 2. Sorry
`4
`about that.
`5
` ADMINISTRATIVE JUDGE FINK:
`6 Okay. I have not yet mastered that.
`7
`I'm going to do this the old-fashioned
`8 way.
`9
` So, I'm sorry, Steve, you said
`10
`that is the 1953 paper.
`11
` MR. BAUGHMAN: I think they're
`12
`all roughly the same. But on the
`13
`first page, numbered page 1.
`14
` ADMINISTRATIVE JUDGE FINK: Yes,
`15
`go ahead.
`16
` MR. BAUGHMAN: Above the
`17
`introduction, we have the sentence
`18
`that the '966 patent was issued to the
`19
`Boeing company and is purportedly
`20
`assigned to Acceleration Bay LLC.
`21
` And, Your Honor, so we didn't
`22
`say that it was actually a correct
`23
`assignment. And that's all we have to
`24
`go on because that's the record in the
`25
`PAIR system.
`
`1
` PROCEEDINGS
`2
` If Your Honor looks at page 59,
`3 we clarify that we served the patent
`4
`owner at the address of record
`5
`designated in PAIR.
`6
` So, again, any problem here with
`7
`identifying the correct patent owner
`8
`is because of the actions of Boeing.
`9
` ADMINISTRATIVE JUDGE FINK: I
`10
`guess my question is, and what I think
`11 we would be interested in hearing is
`12 what that has to do with the
`13
`application of Rule 42.9 at this
`14
`point.
`15
` I understand that, you know, it
`16 wasn't known to you at that point.
`17
`But now that you've raised it and it's
`18
`become an issue, it seems as though
`19
`Rule 42.9 is applicable.
`20
` MR. BAUGHMAN: Your Honor, I
`21
`think it may be applicable going
`22
`forward. And so that's why we're
`23
`asking for frankly a fairly discrete
`24
`piece of relief here. If it's not
`25
`difficult to provide, then it
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`2
`shouldn't be as big an issue as it
`3
`seems to be, being argued today.
`4
` We're not trying to terminate
`5
`the proceedings. We're not trying to
`6
`eliminate everything that's happened
`7
`to this point. We're simply trying to
`8
`get routine discovery to which we were
`9
`entitled had the proper party fessed
`10
`up at the time of the original
`11
`filings.
`12
` And if I could briefly, Your
`13 Honor, address the case, I promise to
`14
`do it quickly.
`15
` ADMINISTRATIVE JUDGE FINK:
`16
`Sure.
`17
` MR. BAUGHMAN: The Cuozzo case,
`18
`as I think counsel for the patent
`19
`owner conceded, is about not requiring
`20
`constitutional standings for a
`21
`petitioner. And, respectfully, that's
`22
`just a completely different animal
`23
`than what we're talking about here,
`24
`because it's about section 311, which
`25
`talks about a person who is not the
`
`Page 32
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`1
` PROCEEDINGS
`2
`owner of a patent.
`3
` What we're talking about is
`4
`things like a preliminary response,
`5 where the statute requires it to be
`6
`filed by a patent owner.
`7
` As to Legend 3D, once your
`8 Honors take a look, I think you'll see
`9
`a number of very significant
`10
`distinctions.
`11
` First, unlike our situation, the
`12
`district court there had denied the
`13 motion to dismiss for lack of
`14
`standing, on page 5, the opposite of
`15
`our result.
`16
` And the Board there simply
`17
`accepted at that early stage -- it was
`18
`about one month from the institution
`19
`decision -- Prime Focus's
`20
`representation that it was the patent
`21
`owner, page 6. Here we have the
`22
`district court telling us that's not
`23
`true.
`24
` And in Legend 3D, they denied
`25
`the request for discovery on the
`
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`1
` PROCEEDINGS
`2
`standing issue without prejudice,
`3
`because time was short and it was a
`4 month before institution, and they
`5
`didn't regard it as a threshold issue.
`6
` Again, very different from what
`7 we've got here, and again, 42.9
`8
`doesn't apply here.
`9
` In Bio-Rad, the case I cited, we
`10
`have statements from the Board
`11
`indicating that similar estoppel
`12
`concerns motivate treating this
`13
`similarly to district court
`14
`litigation, the uniformity of approach
`15
`referred to on page 3 of that
`16
`decision, between the federal courts
`17
`and the office.
`18
` Finally, to just go back to the
`19 Delaware ruling, which says expressly
`20
`in holdings on pages 5 and 9, that,
`21
`first, AB is an exclusive licensee,
`22
`not an owner, and that Boeing, on
`23
`page 9, did not transfer all
`24
`substantial rights there.
`25
` So, again, we're asking for
`
`1
` PROCEEDINGS
`2
`limited relief based on the fact that
`3 we've been dealing with someone who is
`4
`not actually the patent owner.
`5
` We want to make sure that the
`6
`actual patent owner fulfilled its
`7
`obligations, including under
`8
`section 42.51(b)(i).
`9
` ADMINISTRATIVE JUDGE FINK: All
`10
`right. So we've got your positions,
`11
`and I understand that patent owners
`12
`asked for this to be treated as a
`13 motion under rule 42.9(b).
`14
` Is that correct, Mr. Hannah?
`15
` MR. HANNAH: In the alternative,
`16 Your Honor, yes.
`17
` ADMINISTRATIVE JUDGE FINK: In
`18
`the alternative?
`19
` MR. HANNAH: Yes.
`20
` ADMINISTRATIVE JUDGE FINK: Does
`21
`the petitioner oppose that motion?
`22
` MR. BAUGHMAN: Your Honor, I'm
`23
`not sure we have a showing that Boeing
`24
`is unable or refusing to participate.
`25
` I think we had a statement that
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` PROCEEDINGS
`2 Mr. Hannah may be counsel for Boeing.
`3
`I'm not sure. We're not prepared at
`4
`this moment to concede that.
`5
` Although I will say, we have not
`6
`intended at this point to challenge
`7
`going forward on Acceleration Bay's
`8
`representation now because we don't
`9
`think we