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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 IPR2016-00039
`Patent 7,228,588
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`PETITIONER’S MOTION TO STRIKE HEARSAY
`TESTIMONY OF WILFRIED MERKEL [EXHIBIT 2005]
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`IPR2016-00039
`PETITIONER’S MOTION TO STRIKE
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`TABLE OF AUTHORITIES
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`Cases
`KSR Int'l Co. v. Teleflex Inc.,
`550 U.S. 398 (2007) .............................................................................................. 5
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`Page(s)
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`Robert Bosch LLC v. Pylon Manufacturing Corp.,
`No. 08-542 (D. Del. Apr. 15, 2010) .................................................................. 1, 4
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`Statutes and Rules
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`35 U.S.C. § 316(a)(5) ................................................................................................. 3
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`Federal Rule of Evidence 804 .................................................................................... 5
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`Federal Rule of Evidence 804(b)(1)(B) ..................................................................... 5
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`Regulations
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`37 C.F.R. § 42 ............................................................................................................ 1
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`37 C.F.R. § 42.5 ......................................................................................................... 4
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`37 C.F.R. § 42.12 ....................................................................................................... 4
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`37 C.F.R. §§ 42.51 ................................................................................................. 1, 3
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`77 Fed. Reg. 48756 (Aug. 14, 2012).......................................................................... 3
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`Legislative and Administrative Proceedings
`Arisdyne Sys., Inc. v. Cavitation Tech., Inc.,
`IPR2015-00977, Paper No. 32 (PTAB Dec. 15, 2015) ........................................ 5
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`HTC Corp. v. NFC Technology, LLC,
`IPR2014-01198, Paper No. 41 (PTAB Nov. 6, 2015) ................................. 3, 4, 5
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`IBG LLC v. Trading Techs. Int’l, Inc.,
`CBM2015-00179, Paper No. 39 (PTAB Apr. 15, 2016) .................................. 4, 5
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`Ikaria, Inc. v. GeNO LLC,
`IPR2013-00253, Paper No. 22 (PTAB Apr. 24, 2014) ........................................ 5
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`IPR2016-00039
`PETITIONER’S MOTION TO STRIKE
`TABLE OF AUTHORITIES
`Cont’d
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`Cases
`John’s Lone Star Distrib., Inc. v. Thermolife Int’l, Inc.,
`IPR2014-01201, Paper No. 31 (PTAB May 13, 2015) ........................................ 5
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`Page(s)
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`Square, Inc. v. REM Holdings 3, LLC,
`IPR2014-00312, Paper No. 37 (PTAB December 9, 2014) ............................. 2, 3
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`iii
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`IPR2016-00039
`PETITIONER’S MOTION TO STRIKE
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`Costco Wholesale Corporation (“Petitioner”) submits this Motion to Strike
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`the hearsay testimony of Wilfried Merkel (Exhibit 2005, 210–264), submitted by
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`Robert Bosch LLC (“Patent Owner”) in connection with IPR2016-00034,
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`IPR2016-00036, IPR2016-00038, IPR2016-00039, IPR2016-00040, and IPR2016-
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`00041 (the “IPRs”) pursuant to 37 C.F.R. §§ 42.51-53 (governing routine
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`discovery), and 37 C.F.R. § 42.12. In each of the IPRs, Patent Owner submitted
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`approximately 54 pages of a 2010 district court trial transcript, Robert Bosch LLC
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`v. Pylon Manufacturing Corp., No. 08-542 (D. Del. Apr. 15, 2010), in which
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`Mr. Merkel testified on behalf of Patent Owner. See Ex. 2005, 210–64. Each of
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`Patent Owner’s Responses in the IPRs cites Mr. Merkel’s prior testimony as
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`purportedly supporting assertions of non-obviousness in the IPRs, including as to
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`patents that were not even at issue in the 2010 trial. See IPR2016-00034, Paper No.
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`26, at 22, 24, 27; IPR2016-00036, Paper No. 28, at 17, 19, 22; IPR2016-00038,
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`Paper No. 28, at 9, 11, 14; IPR2016-00039, Paper No. 31, at 12–14, 17; IPR2016-
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`00040, Paper No. 28, at 13, 15–16, 18; IPR2016-00041, Paper No. 32, at 14, 15–
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`16, 19.
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`On July 29, 2016, Petitioner objected to Mr. Merkel’s testimony on multiple
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`grounds. See Petitioner’s Objections to Evidence (Paper No. 32), 3. On August 12,
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`2016, in response to Petitioner’s objections, Patent Owner served a Declaration of
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`Wilfried Merkel, in which Mr. Merkel asserted that “for reasons of cardiac health”
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`IPR2016-00039
`PETITIONER’S MOTION TO STRIKE
`he would not “voluntarily give a deposition in this case.” Ex. 1106 (Klaiber Decl.),
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`pp. 6–8 (Tab A). After Petitioner inquired further, Patent Owner informed
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`Petitioner that they contacted Mr. Merkel, but would not be producing him New
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`York, instead proposing that Mr. Merkel answer written questions. Ex. 1106, p. 12
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`(Tab C). Petitioner declined because “it is important to cross-examine this
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`particular witness in person to properly discuss the many exhibits and technical
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`issues that are involved in” these six cases and because it is entitled to do so.
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`Square, Inc. v. REM Holdings 3, LLC, IPR2014-00312, Paper No. 37, at 2–3
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`(PTAB December 9, 2014). Patent Owner rejected Petitioner’s suggestion to
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`voluntarily withdraw Mr. Merkel’s testimony from consideration. Ex. 1106, p. 31
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`(Tab E).
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`On September 22, 2016, Petitioner sought relief from the Board and
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`requested either that the Board order Patent Owner to make Mr. Merkel available
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`for cross examination in the United States or authorize Petitioner to file a motion to
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`strike. Ex. 1106, p. 33–34 (Tab F). On September 27, 2016, the Board held a
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`teleconference call to discuss Petitioner’s request. During that call, counsel for
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`Patent Owner represented that before Patent Owner supplemented its evidence
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`with a declaration from Mr. Merkel, it had not contacted Mr. Merkel in years.1
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`Subsequently, the Board authorized Petitioner to file a motion to strike Exhibit
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`1 Ex. 1106 ¶ 3.
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`2
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`IPR2016-00039
`PETITIONER’S MOTION TO STRIKE
`2005, containing hearsay testimony of Mr. Merkel, from the record (Paper No. 34).
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`I.
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`THE BOARD SHOULD STRIKE EXHIBIT 2005 BECAUSE PATENT
`OWNER FAILED TO MAKE ITS TESTIFYING WITNESS, MR.
`MERKEL, AVAILABLE FOR CROSS-EXAMINATION IN THE U.S.
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` “Under 35 U.S.C. § 316(a)(5), Congress tasked the Director with
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`prescribing regulations ‘setting forth standards and procedures for discovery of
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`relevant evidence including that such discovery shall be limited to …the deposition
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`of witnesses submitting affidavits or declarations.” HTC Corp. v. NFC Technology,
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`LLC, IPR2014-01198, Paper No. 41, at 3 (PTAB Nov. 6, 2015). As a “guiding
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`principle” of “routine discovery,” “if a party proffers a witness’s testimony, that
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`party must make that witness available for cross-examination by the other party” in
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`the United States, and must bear all costs. Id. at 3–4 (citing 37 C.F.R. §§ 42.51–
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`42.53 and Office Patent Trial Practice Guide, 77 Fed. Reg. 48756, 48761 (Aug. 14,
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`2012)) (emphasis added by Board); see also Square Inc. v. REM Holdings 3, LLC,
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`IPR2014-00312, Paper No. 37, at 2–3 (PTAB Dec. 9, 2014) (witness must be made
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`available for cross-examination in the United States or be withdrawn).
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`In HTC, the non-party witness refused to appear for deposition, and the
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`Board concluded that under the rules governing routine discovery, Patent Owner
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`must make him available for cross-examination. HTC, Paper No. 41, at 4 (citing 37
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`C.F.R. § 42.53(b)(2), (3)). The Board exercised its authority to strike the
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`declaration under 37 C.F.R. § 42.12(a) and (b), and further cited § 42.5(a). HTC,
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`3
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`IPR2016-00039
`PETITIONER’S MOTION TO STRIKE
`Paper 41, at 4 (citations omitted). The Board granted Petitioner’s subsequent
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`motion to strike in part, and expunged the declaration. In lieu of striking portions
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`of Patent Owner’s Response that cited to the expunged declaration, the Board gave
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`no weight to any reliance on the declaration in Patent Owner’s Response. Id. at 5.
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`In the instant proceeding, Patent Owner’s proffer of Mr. Merkel’s prior trial
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`testimony in support of its secondary considerations argument subjects him to
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`cross-examination as routine discovery. See IBG LLC v. Trading Techs. Int’l, Inc.,
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`CBM2015-00179, Paper No. 39, at 2–3 (PTAB Apr. 15, 2016) (authorizing cross-
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`examination as routine discovery where Petitioner attempted to use prior
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`deposition testimony, but refused to make declarant available for cross-
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`examination). This point is reinforced by Patent Owner’s having submitted an
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`affidavit from Mr. Merkel in the IPRs which embraces that testimony. See
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`Ex. 1106, pp. 6–8 (Tab A).
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`As of October 24, 2016, the routine discovery period has closed. (Paper No.
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`20). By failing to make Mr. Merkel available for cross-examination, Patent Owner
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`has failed to comply with applicable rules, electing not to contact Mr. Merkel to
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`see if he was available before submitting his testimony, failing to make him
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`available, and then refusing to withdraw his testimony when he was not, all to
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`Petitioner’s detriment. Accordingly, as set forth in HTC, the declaration and
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`testimony of Mr. Merkel must be stricken, expunged from the record, and given no
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`4
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`IPR2016-00039
`PETITIONER’S MOTION TO STRIKE
`weight in the Board’s consideration of the Costco IPRs.2 See also IBG, CBM2015-
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`00179, Paper No. 39; Arisdyne Sys., Inc. v. Cavitation Tech., Inc., IPR2015-00977,
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`Paper No. 32 (PTAB Dec. 15, 2015); John’s Lone Star Distrib., Inc. v. Thermolife
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`Int’l, Inc., IPR2014-01201, Paper No. 31 (PTAB May 13, 2015); Ikaria, Inc. v.
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`GeNO LLC, IPR2013-00253, Paper No. 22 (PTAB Apr. 24, 2014).
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`II. CONCLUSION
`For the foregoing reasons, Exhibit 2005 at 210–64 must be stricken and
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`expunged from the record.
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`Dated: October 24, 2016
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`2 Mr. Merkel‘s testimony should be disregarded for the additional reason that it
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`constitutes inadmissible hearsay to which no exception applies. Even assuming that
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`Mr. Merkel were “unavailable” for purposes of Federal Rule of Evidence 804, the
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`provision in that rule for “Former Testimony” is inapplicable where, as here, the
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`proponent seeks to offer former testimony against a litigant who was neither a
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`party nor a predecessor in interest to a party to the prior proceeding. See Fed. R.
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`Evid. 804(b)(1)(B). Petitioner has never had any opportunity to cross-examine Mr.
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`Merkel with respect to the origin of the claimed subject matter, including with
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`respect to OEM requirements that may have driven the development. Cf.
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`KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 410 (2007) (OEM requirements led to
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`making of claimed pedal system).
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`5
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`Respectfully Submitted,
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` / Stefanie M. Lopatkin /
`Stefanie M. Lopatkin
`Registration No. 74,312
`Hughes Hubbard & Reed LLP
`One Battery Park Plaza
`New York, New York 10004
`Stefanie.lopatkin@hugheshubbard.com
`(212) 837-6393
`Attorney for Petitioner
`Costco Wholesale Corporation
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`6
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`IPR2016-00039
`PETITIONER’S MOTION TO STRIKE
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`IPR2016-00039
`PETITIONER’S MOTION TO STRIKE
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`CERTIFICATE OF SERVICE
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`I hereby certify that on this 24th day of October, 2016, the foregoing Motion
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`to Strike and Exhibit 1106 thereto were served by email in their entirety on the
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`attorneys of record for Patent Owner:
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`•
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`•
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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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` / Stefanie M. Lopatkin /
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`Stefanie M. Lopatkin
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`Registration No. 74,312
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`73748002