UNITED STATES PATENT AND TRADEMARK OFFICE
`
`_____________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`______________________
`
`COSTCO WHOLESALE CORPORATION,
`Petitioner,
`
`v.
`
`ROBERT BOSCH LLC,
`Patent Owner.
`______________________
`
`CASE NO. IPR2016-00036
`U.S. Patent No. 6,944,905
`______________________
`
`
`
`PATENT OWNER’S OPPOSITION TO PETITIONER’S MOTION TO
`STRIKE TESTIMONY OF WILFRIED MERKEL
`
`
`
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`
`
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`
`
`_____________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`______________________
`
`COSTCO WHOLESALE CORPORATION,
`Petitioner,
`
`v.
`
`ROBERT BOSCH LLC,
`Patent Owner.
`______________________
`
`CASE NO. IPR2016-00036
`U.S. Patent No. 6,944,905
`______________________
`
`
`
`PATENT OWNER’S OPPOSITION TO PETITIONER’S MOTION TO
`STRIKE TESTIMONY OF WILFRIED MERKEL
`
`
`
`
`
`
`
`
`
`
`
`Case No. IPR2016-00036
`U.S. Patent No. 6,944,905
`
`Table of Authorities
`
`Cases
`Clay v. Johns–Manville Sales Corp.,
`722 F.2d 1289 (6th Cir. 1983) .......................................................................... 1
`
`Lloyd v. Am. Export Lines, Inc.,
`580 F.2d 1179 (3d Cir. 1978) .......................................................................... 1
`
`Robert Bosch LLC v. Pylon Mfg. Corp.,
`659 F.3d 1142 (Fed. Cir. 2011) ....................................................................... 3
`
`Supermarket of Marlinton, Inc. v. Meadow Gold Diaries, Inc.,
`71 F.3d 119 (4th Cir. 1995) ............................................................................. 1
`
`
`Administrative Proceedings
`
`HTC Corp. v. NFC Technology, LLC,
`IPR2014-01198, Paper No. 41 (PTAB Nov. 6, 2015)................................. ... 5
`
`
`Square, Inc. v. REM Holdings 3, LLC,
`IPR2014-00312, Paper No. 37 (PTAB Dec. 2014) ......................................... 5
`
`
`Rules
`
`Fed. R. Civ. P. 30 ....................................................................................................... 5
`
`Fed. R. Civ. P. 31 ....................................................................................................... 5
`
`Fed. R. Evid. 104 ....................................................................................................... 2
`
`Fed. R. Evid. 804 ....................................................................................................... 1
`
`Fed. R. Evid. 807 ....................................................................................................... 3
`
`
`
`i
`
`
`
`
`
`
`
`
`Case No. IPR2016-00036
`U.S. Patent No. 6,944,905
`
`Regulations
`
`37 C.F.R. § 42.12 ....................................................................................................... 4
`
`37 C.F.R. § 42.51 ................................................................................................... 3, 4
`
`37 C.F.R. § 42.52 ....................................................................................................... 4
`
`37 C.F.R. § 42.53 ....................................................................................................... 5
`
`
`
`Other Materials
`
`Black’s Law Dictionary (9th ed. 2009) ...................................................................... 5
`
`
`
`
`
`
`ii
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`
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`Case No. IPR2016-00036
`U.S. Patent No. 6,944,905
`Costco seeks to exclude from evidence what it calls the “hearsay testimony”
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`of a non-party inventor, given under oath in federal court subject to cross-
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`examination, because Mr. Merkel’s failing health prevents him from sitting for live
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`deposition in the United States. Costco’s motion rests on two faulty assumptions:
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`that Mr. Merkel’s 2010 testimony standing alone is inadmissible under the Federal
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`Rules of Evidence, and that the PTO’s rules create an absolute right to oral cross-
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`examination in the United States.
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`Mr. Merkel’s trial testimony is admissible under Rule 804(b)(1). When a
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`witness is unavailable, his prior testimony “given as a witness at a trial” is
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`admissible if “offered against a party . . . whose predecessor in interest had . . . an
`
`opportunity and similar motive to develop it by direct, cross-, or redirect
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`examination.” A “predecessor in interest” is “a party having a like motive to cross-
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`examine about the same matters as the present party would have” and who “was
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`accorded an adequate opportunity for such examination.” Lloyd v. Am. Export
`
`Lines, Inc., 580 F.2d 1179, 1187 (3d Cir. 1978); see Supermarket of Marlinton,
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`Inc. v. Meadow Gold Diaries, Inc., 71 F.3d 119, 128 (4th Cir. 1995); Clay v.
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`Johns–Manville Sales Corp., 722 F.2d 1289, 1295 (6th Cir. 1983).
`
`Mr. Merkel’s declaration—which was served as supplemental evidence to
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`overcome Costco’s initial hearsay objection—establishes his unavailability. Fed.
`
`R. Evid. 804(a)(5) (“cannot be present . . . because of . . . a then-existing infirmity,
`
`
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`1
`
`
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`Case No. IPR2016-00036
`U.S. Patent No. 6,944,905
`[or] physical illness . . .”). Mr. Merkel has declared under penalty of perjury that,
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`“for reasons of cardiac health, [he has] been advised that [he] should not travel and
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`should minimize [his] activities.”1 Ex. 1106 at 7. Costco does not dispute this.
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`Mr. Merkel’s prior testimony was “given as a witness at a trial,” (Ex. 2005 at
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`1), and is being offered against Costco, whose “predecessor in interest had . . . an
`
`opportunity and similar motive to develop it.” In the trial, defendant Pylon was
`
`asserting the obviousness of Bosch wiper patents, including two at issue here, U.S.
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`Patent Nos. 6,292,974 and 6,944,905, (id. at 22), relying on some of the same prior
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`art as Costco has asserted in IPRs 2016-00034 and 38–41, (id. at 162:25–163:2).
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`The Merkel testimony is offered to prove that: (i) no commercially viable beam
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`blades existed before 2002, when Bosch satisfied the long-felt need for them, (id.
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`at 346:16–348:2); (ii) Bosch’s first commercial beam blade (Aerotwin) and later
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`product (Icon) practice the challenged claims, (id. at 353:22–354:1); (iii) these
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`blades included a flexible spoiler with diverging legs mounted on top of the blade,
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`as well as plastic end caps, (id. at 359:12–360:4); and (iv) beam blades are
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`sensitive to changes caused by adding structures, (id. at 388:23–391:8). This
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`testimony was relevant in the Pylon trial for the same reasons as here—because it
`
`is probative regarding objective evidence of non-obviousness and the knowledge in
`
`1 The Board is not bound by the rules of evidence when evaluating the sufficiency
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`of Mr. Merkel’s declaration vis-a-vis unavailability. See Fed. R. Evid. 104(a).
`
`
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`2
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`
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`Case No. IPR2016-00036
`U.S. Patent No. 6,944,905
`the art that beam blade modifications have negative consequences. Pylon thus had
`
`the same motivation for cross-examining Merkel as Costco has now, both in kind
`
`(to invalidate Bosch’s wiper patents) and in degree (Pylon would ultimately be
`
`enjoined from selling its beam blades after pursuing an appeal, see Robert Bosch
`
`LLC v. Pylon Mfg. Corp., 659 F.3d 1142 (Fed. Cir. 2011)).
`
`Mr. Merkel’s testimony is also admissible under Rule 807, because (1) it
`
`“has equivalent circumstantial guarantees of trustworthiness”; (2) “it is offered as
`
`evidence of a material fact”; (3) “it is more probative on the point for which it is
`
`offered than any other evidence that the proponent can obtain through reasonable
`
`efforts”; and (4) “admitting it will best serve the purposes of these rules and the
`
`interests of justice.” For the reasons above, there are guarantees of
`
`trustworthiness—the testimony was presented at trial and subject to cross-
`
`examination—and the facts for which it is offered are material. Its probative value
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`is shown by the fact that Mr. Merkel, before falling ill, traveled from Germany to
`
`attend the Pylon trial; Bosch would not have proffered him if Mr. Merkel’s
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`testimony were not important. And, because Costco has made no attempt to
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`procure contrary evidence—and has rejected Bosch’s suggestion of written
`
`questions—justice would be disserved by excluding the testimony.
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`The transcript is thus within a hearsay exception. And, because it is not an
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`“affidavit testimony prepared for [this] proceeding,” 37 C.F.R. § 42.51(b)(1)(ii), no
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`
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`3
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`
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`Case No. IPR2016-00036
`U.S. Patent No. 6,944,905
`deposition could be required for any reason. Should the Board find the transcript
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`not within an exception, Mr. Merkel’s supplemental declaration—adopting his
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`previous testimony as his current testimony—is curative. Costco has not
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`challenged the declaration in this respect. Costco only argues that the declaration
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`is an “affidavit testimony prepared for [this] proceeding,” that therefore Costco is
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`entitled to cross-examination as a matter of “routine discovery,” that Mr. Merkel’s
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`inability to sit for a U.S. deposition violates the rules of routine discovery, and
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`finally that this violation requires all Merkel evidence expunged. But its claim of
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`entitlement to a live deposition is based on a misinterpretation of PTO rules.
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`Rule 42.51 merely states that cross-examination testimony is “authorized.”
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`No rule requires the exclusion of direct testimony merely because there has been
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`no live cross. Rather, Rule 42.52 provides for a motion to compel—which Costco
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`has not filed. Nor has Costco deposed other declarants whose testimony overlaps
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`Merkel’s. Costco only sought to depose the witness it knew could not attend.
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`Instead, Costco invokes Rule 42.12, which does not grant the Board blanket
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`authority to strike evidence but is limited to sanctions for misconduct. It was not
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`sanctionable misconduct for Bosch to serve the declaration of a man whose heart is
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`failing, or to suggest to Costco the only means of cross-examination his health
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`would allow. Nor do the Board decisions cited by Costco suggest otherwise. In
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`Square, the patent owner refused to arrange a deposition of a foreign witness in the
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`
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`4
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`
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`Case No. IPR2016-00036
`U.S. Patent No. 6,944,905
`United States or in Hong Kong because the costs were prohibitive. IPR2014-
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`00312, Paper 37, at 2; see 37 C.F.R. § 42.53(g) (requiring proponent to bear the
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`reasonable costs of cross-examination). And, in HTC, the witness refused an
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`overseas deposition “for personal reasons,” after the proffering patent owner told
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`the Board that they “don’t need to compel the witness.” IPR2014-01198, Paper 41,
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`at 2 & n.1. Neither case supports the imposition of sanctions against Bosch, who
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`was forthright about Mr. Merkel’s condition and who never refused to bear the
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`costs of whatever cross-examination might be appropriate for someone in that
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`condition.
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`Costco also fails to establish that Bosch’s suggestion of written questions
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`does not satisfy the rules, which require, at most, that cross-examination occur by
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`“deposition.” Black’s Law Dictionary defines “deposition” as a “witness’s out-of-
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`court testimony that is reduced to writing . . . for later use in court or for discovery
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`purposes,” and recognizes the existence of both “oral deposition[s]” and
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`“deposition[s] on written questions.” The Federal Rules of Civil Procedure are in
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`accord, providing rules for “Depositions by Oral Examination” (Rule 30) and
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`“Depositions by Written Questions” (Rule 31). And, nowhere do the statute or
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`rules governing IPRs expressly require live depositions.
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`Costco is merely seizing on Mr. Merkel’s poor health to advance its position
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`in these IPRs; it sought evidence nowhere else. Its motion should be denied.
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`5
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`DATED: October 28, 2016
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`
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`Respectfully submitted,
`
`Case No. IPR2016-00036
`U.S. Patent No. 6,944,905
`
`
`
`Shearman & Sterling LLP
`
`
`
`/Patrick R. Colsher/
`Patrick R. Colsher (Reg. No. 74,955)
`Mark A. Hannemann (pro hac vice)
`599 Lexington Ave
`New York, NY 10022
`Tel: (212) 848-4000
`
`Counsel for Patent Owner
`Robert Bosch LLC
`
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`6
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`
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`Certificate of Service
`
`
`The undersigned hereby certifies that the foregoing PATENT OWNER’S
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`OPPOSITION TO PETITIONER’S MOTION TO STRIKE TESTIMONY OF
`
`WILFRIED MERKEL was served via electronic mail on October 28, 2016, on the
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`following counsel for Petitioner:
`
`
`
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`
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`
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`
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`Richard M. Koehl (richard.koehl@hugheshubbard.com)
`James R. Klaiber (james.klaiber@hugheshubbard.com)
`David E. Lansky (david.lansky@hugheshubbard.com)
`Stefanie Lopatkin (stefanie.lopatkin@hugheshubbard.com)
`
`/Patrick R. Colsher/
`Patrick R. Colsher
`599 Lexington Ave
`New York, NY 10022
`Tel: (212) 848-4000
`
`Counsel for Patent Owner
`Robert Bosch LLC
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