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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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`COSTCO WHOLESALE CORPORATION,
`Petitioner,
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`v.
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`ROBERT BOSCH LLC,
`Patent Owner.
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`Case IPR2016-00034
`Patent 6,973,698
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`PETITIONER’S REPLY IN SUPPORT OF MOTION TO EXCLUDE
`INADMISSIBLE EVIDENCE
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`IPR2016-00034
`PETITIONER’S REPLY IN SUPPORT OF MOTION TO EXCLUDE EVIDENCE
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`I.
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`THE BOARD SHOULD STRIKE AND EXCLUDE PATENT OWN-
`ER’S PROFFER OF UNSUBSTANTIATED HEARSAY EXPERT
`TESTIMONY OF WILFRIED MERKEL AS TO WHICH PETITION-
`ER HAS HAD NO CROSS-EXAMINATION OPPORTUNITY.
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`By order issued October 19, 2016 (Paper 29), the Board authorized a motion
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`to strike Patent Owner’s Exhibit 2005. This exhibit consists of selected portions of
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`undocumented, unsubstantiated, and non-credible expert testimony that Patent
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`Owner proffered as in support of assertions that (i) the skill level in the art purport-
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`edly was very low at relevant times, and (ii) the subject matter identified in the
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`challenged claims purportedly is responsible for decisions by certain original
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`equipment manufacturers (OEM’s) and others to switch from conventional brack-
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`eted to flat or “beam”-style wipers for certain vehicles.
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`The skill level and commercial success assertions in Exhibit 2005, given by
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`one Wilfried Merkel more than five years ago in Robert Bosch, LLC v. Pylon Mfg.
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`Corp., 775 F. Supp. 2d 739 (D. Del. 2011), are assertions that could have been pre-
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`sented in this proceeding by any number of witnesses. It was Patent Owner’s
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`choice to try to present purported secondary evidence of non-obviousness through
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`a witness who claimed to be unable to submit to cross-examination in this proceed-
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`ing. And it is Patent Owner that must now live with the consequences of that stra-
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`tegic choice: Exhibit 2005 is inadmissible hearsay and Patent Owner has plainly
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`acted to try to thwart the truth-seeking process in this case.
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`1
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`IPR2016-00034
`PETITIONER’S REPLY IN SUPPORT OF MOTION TO EXCLUDE EVIDENCE
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`37 C.F.R. § 42.53(a) clearly and unambiguously states: “Uncompelled direct
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`testimony must be submitted in the form of an affidavit.” There is good reason for
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`this rule: persons who submit affidavits in inter partes review proceedings are re-
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`quired to submit to cross-examination. See 37 C.F.R. §§ 42.51(b), 42.53. Here, af-
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`ter Petitioner objected to Exhibit 2005, Patent Owner purported to cure this defect
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`by submitting an affidavit of Mr. Merkel (Exhibit 2021); but in that very affidavit
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`Mr. Merkel announced his refusal to appear for cross-examination. Patent Owner
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`acted in a manner that was guaranteed to deny Petitioner any opportunity to cross-
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`examine Mr. Merkel to test whether the skill level and commercial success asser-
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`tions in Exhibit 2005 have any basis in contemporaneous data or documentary evi-
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`dence.
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`In the Pylon case, Mr. Merkel was found to have falsely taken credit for sub-
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`ject matter conceived by a third party. See Pylon, 775 F. Supp. 2d at 745 (“Merkel
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`and Leutsch committed a material omission by presenting Fehrsen’s ideas as their
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`own during the prosecution of the ’974 patent . . . .”). Patent Owner had and has a
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`powerful motive to shield Merkel from cross-examination in these circumstances;
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`its attempt to evade cross-examination should not be condoned.
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`Patent Owner asserts that its choice of an affiant who now refuses to appear
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`for cross-examination is no bar to admission of Exhibit 2005, because Exhibit 2005
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`is purportedly admissible under the hearsay exception prescribed in Federal Rule
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`2
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`IPR2016-00034
`PETITIONER’S REPLY IN SUPPORT OF MOTION TO EXCLUDE EVIDENCE
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`of Evidence 804(b)(1). Patent Owner asserts that the defendant in the Pylon case
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`cited above purportedly (i) is Petitioner’s “predecessor in interest” and (ii) in 2010
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`purportedly had “an opportunity and similar motive to develop” what Petitioner
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`would have sought to elicit on cross-examination of Mr. Merkel in 2016.
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`Patent Owner bears the burden of proving that the predicates of Rule
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`804(b)(1) are met, see United States v. Kennard, 472 F.3d 851, 855–56 (11th Cir.
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`2006), and it has not done so. In the five years since the Pylon case, it has emerged
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`that Patent Owner has engaged in a pattern of discovery misconduct and failed to
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`produce any documents that its parent company, Robert Bosch GmbH, chose not to
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`volunteer, including OEM-related documents that may have evidenced or presup-
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`posed a skill level higher than what Patent Owner would now have the Board be-
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`lieve. See Robert Bosch LLC v. Alberee Products, Inc., 171 F. Supp. 3d 283, 291–
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`92 (D. Del. 2016) (“Costco is entitled to some relief possibly including dismissal
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`of the entire case.”). On this basis alone, Patent Owner has failed to carry its bur-
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`den of showing that the Pylon defendant (i) qualifies as Petitioner’s “predecessor
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`in interest” and (ii) had “an opportunity and similar motive to develop” what Peti-
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`tioner would have sought to elicit on cross-examination of Mr. Merkel in this case.
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`The ’698 Patent was not at issue in the Pylon case and there was no “oppor-
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`tunity” whatsoever to cross-examine Merkel with respect to the skill level and
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`commercial success assertions in Exhibit 2005 insofar as the claims of that patent
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`3
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`IPR2016-00034
`PETITIONER’S REPLY IN SUPPORT OF MOTION TO EXCLUDE EVIDENCE
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`are concerned. It is no answer to this objection that Merkel was not questioned
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`about the ’698 Patent in the Pylon case, for Patent Owner has proffered Merkel’s
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`testimony as purportedly relevant to the patentability of the challenged claims here.
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`In a last-ditch effort to salvage Exhibit 2005, Patent Owner cites the “residu-
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`al” hearsay exception, Fed. R. Evid. 807; but Patent Owner has failed to show that
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`Exhibit 2005 “is more probative on the point[s] for which it is offered than any
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`other evidence that the proponent can obtain through reasonable efforts.” Fed. R.
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`Evid. 807(3). Patent Owner has made no showing that Mr. Merkel has unique
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`knowledge of the skill level in the art or the reasons for commercial product sales
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`that could not be presented through other witnesses. Mr. Merkel is not even named
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`as an inventor on the ’698 Patent. This is not an “exceptional case[]” to apply the
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`residual exception. Conoco Inc. v. Dep’t of Energy, 99 F.3d 387, 392 (Fed. Cir.
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`1996).
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`II. THE BOARD SHOULD STRIKE AND EXCLUDE PATENT OWN-
`ER’S PROFFER OF HIDDEN HEARSAY THROUGH THE LAY
`DECLARATION OF MARTIN KASHNOWSKI (EXHIBIT 2007)
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`On its face, paragraph 7 of Mr. Kashnowski’s declaration purports to de-
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`scribe, in vague and subjective terms, the results of certain tests that unknown and
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`unnamed persons conducted. Mr. Kashnowski does not say that he personally con-
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`ducted or observed the tests. The authority Patent Owner cites for the proposition
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`that Mr. Kashnowski may describe tests he did not conduct or observe, Corning
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`4
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`IPR2016-00034
`PETITIONER’S REPLY IN SUPPORT OF MOTION TO EXCLUDE EVIDENCE
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`Inc. v. DSM IP Assets B.V., IPR2013-00049, Paper 90 (PTAB July 11, 2014), is
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`inapplicable. There, the Board admitted (but gave little weight to) an expert decla-
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`ration that relied on another’s tests. See id. at 5. But not even experts can be used
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`“as a conduit for introducing hearsay.” Marvel Characters, Inc. v. Kirby, 726 F.3d
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`119, 136 (2d Cir. 2013). Here, Mr. Kashnowski is not proffered as an expert.
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`The testing Mr. Kashnowski refers to falls precisely under §42.65(b): “The
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`Board’s § 42.65, as with Fed. R. Evid. 702, is intended to ensure that a party pro-
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`ponent meets a threshold level of reliability when offering technical tests and data
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`as evidence.” 3D-Matrix Ltd. v. Menicon Co., IPR2014-00398, Paper 11 at 9
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`(PTAB Aug. 1, 2014). Mr. Kashnowski’s purported characterizations of undis-
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`closed results of unknown and undisclosed tests performed by unknown and un-
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`named persons should be excluded.
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`Dated: January 3, 2017
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`Respectfully Submitted,
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`/James R. Klaiber/
`James R. Klaiber
`Registration No. 41,902
`Hughes Hubbard & Reed LLP
`One Battery Park Plaza
`New York, New York 10004
`James.klaiber@hugheshubbard.com
`(212) 837-6125
`Attorney for Petitioner
`Costco Wholesale Corporation
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`5
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`IPR2016-00034
`PETITIONER’S REPLY IN SUPPORT OF MOTION TO EXCLUDE EVIDENCE
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`CERTIFICATE OF SERVICE
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`I hereby certify that on this 3rd day of January, 2017, the foregoing Petition-
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`er’s Reply in Support its Motion to Exclude Evidence Pursuant to 37 C.F.R.
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`§ 42.64 was served in its entirety by email on the attorneys of record for Patent
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`Owner:
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`Patrick R. Colsher (patrick.colsher@shearman.com)
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`Mark Hannemann (mark.hannemann@shearman.com)
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`Joseph Purcell (joseph.purcell@shearman.com)
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`/James R. Klaiber/
`James R. Klaiber
`Registration No. 41,902
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`75081502