UNITED STATES PATENT AND TRADEMARK OFFICE
`
`____________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________________
`
`AMX LLC and DELL INC.,
`Petitioners,
`
`v.
`
`CHRIMAR SYSTEMS, INC.,
`Patent Owner.
`
`____________________
`
`Case IPR2016-00569 (Patent 8,942,107)
`____________________
`
`PETITIONERS’ OPPOSITION TO
`PATENT OWNER’S MOTION FOR ADDITIONAL DISCOVERY
`
`
`
`____________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________________
`
`AMX LLC and DELL INC.,
`Petitioners,
`
`v.
`
`CHRIMAR SYSTEMS, INC.,
`Patent Owner.
`
`____________________
`
`Case IPR2016-00569 (Patent 8,942,107)
`____________________
`
`PETITIONERS’ OPPOSITION TO
`PATENT OWNER’S MOTION FOR ADDITIONAL DISCOVERY
`
`
`
`TABLE OF CONTENTS
`
`I.
`
`II.
`
`Introduction......................................................................................................1
`
`The Requested Discovery Is Futile and Not in the Interest of Justice ............2
`
`A.
`
`B.
`
`C.
`
`Garmin Factor 1: Chrimar Offers Nothing More Than
`Speculation That Something Useful Will Be Discovered.....................3
`
`Garmin Factor 3: Patent Owner Has the Ability to Obtain the
`Information by Other Means.................................................................7
`
`Garmin Factor 5: Chrimar’s Requested Discovery is Overly
`Burdensome...........................................................................................9
`
`III. Conclusion .....................................................................................................10
`
`i
`
`
`
`TABLE OF AUTHORITIES
`
`Cases
`Apple Inc. v. Achates Reference Publ’g, Inc.,
`IPR2013-00080, Paper 18 (P.T.A.B. Apr. 3, 2013) ...............................................1
`
`Broadcom Corp. v. Telefonaktiebolaget LM Ericsson (PUBL),
`IPR2013-00601, Paper 23 (P.T.A.B. Jan. 24, 2014) ..............................................5
`
`Broadcom Corp. v. Wi-Fi One, LLC,
`IPR2013-00601, Paper 71 (P.T.A.B. Jun. 1, 2015) ................................................9
`
`CaptionCall, L.L.C. v. Ultratec, Inc.,
`IPR2015-00636, Paper 42 (P.T.A.B. Feb. 23, 2016)..............................................7
`
`Garmin Int'l, Inc. v. Cuozzo Speed Techs. LLC,
`IPR2012-00001, Paper 26 (P.T.A.B. Mar. 5, 2013)...............................................3
`
`Wavemarket Inc. v. Locationet Sys. Ltd.,
`IPR2014-00199, Paper 34 (P.T.A.B. Aug. 11, 2014).................................. 5, 6, 10
`
`Statutes
`
`35 U.S.C. § 316..........................................................................................................1
`
`Other Authorities
`
`Office Patent Trial Practice Guide,
`77 Fed. Reg. 48756 (Aug. 14, 2012). .................................................................3, 6
`
`Rules
`
`37 C.F.R. § 42.51 .......................................................................................................1
`
`ii
`
`
`
`I.
`
`Introduction
`
`Chrimar’s Motion for Additional Discovery should be denied because
`
`(1) Petitioners AMX and Dell are not in privity with Hewlett-Packard Co. (“HP”),
`
`Cisco Systems, Inc. (“Cisco”), Ruckus Wireless (“Ruckus”) and/or any other third-
`
`parties, and (2) Chrimar has not demonstrated that the requested additional
`
`discovery is “necessary in the interest of justice.” 35 U.S.C. § 316(a)(5); 37 C.F.R.
`
`§ 42.51(b)(2)(i).
`
`Discovery in inter partes review (“IPR”) is “less than what is normally
`
`available in district court patent litigation” because “Congress intended inter partes
`
`review to be a quick and cost effective alternative to litigation.” Apple Inc. v.
`
`Achates Reference Publ’g, Inc., IPR2013-00080, Paper 18 at 3 (P.T.A.B. Apr. 3,
`
`2013). The Board must therefore be “conservative in authorizing additional
`
`discovery.” Id. Additional discovery, like that requested in Chrimar’s Motion,
`
`should only be permitted where such discovery is “necessary in the interest of
`
`justice.” Id. at 4. And the necessity for discovery must be premised on more than
`
`speculation or a “mere possibility.” Id. There must be “factual evidence or
`
`support” underlying a request for additional discovery
`
`that demonstrates
`
`“something useful [to the proceeding] will be found.” Id. Chrimar fails to satisfy
`
`this standard and the Board should reject Chrimar’s Motion.
`
`1
`
`
`
`II.
`
`The Requested Discovery Is Futile and Not in the Interest of Justice
`
`AMX and Dell do not have any information responsive to proposed
`
`Interrogatory Nos. 2-6 or Document Request Nos. 2 and 4. (See Ex. 2002). AMX,
`
`its parent company Harman International Industries, and Dell are the only real
`
`parties-in-interest in this proceeding, and thus they have not taken any “steps or
`
`actions” to prevent third-parties from being named real parties-in-interest
`
`(Interrogatory No. 2). Similarly, there are no third-parties who have contributed
`
`monetarily to, have the right to control aspects of, or have received updates about
`
`the IPR proceedings (Interrogatory Nos. 3-4, 6). In addition, there are no third-
`
`parties for which AMX or Dell has the right to control activities in litigation
`
`(Interrogatory No. 5). Finally, there are no agreements with third parties relating to
`
`the IPRs (Document Request No. 2), nor are there documents or communications
`
`with third parties regarding strategy or tactics relating to these IPRs (Document
`
`Request No. 4). As a result, no information or documents exist that are responsive
`
`to Interrogatory Nos. 2-6 or Document Request Nos. 2 and 4.
`
`The remaining discovery requests relate to indemnification agreements
`
`(Interrogatory No. 1 and Document Request No. 1) and joint defense agreements
`
`(Document Request No. 3). (See Ex. 2002). As set forth below, Chrimar has failed
`
`to establish, beyond mere speculation, that the requested discovery will contain any
`
`useful information. Moreover, the requested discovery is overly burdensome.
`
`2
`
`
`
`A.
`
`Garmin Factor 1: Chrimar Offers Nothing More Than
`Speculation That Something Useful Will Be Discovered.
`
`To establish it is entitled to the requested discovery, Chrimar must
`
`demonstrate that it is already in possession of “a threshold amount of evidence or
`
`reasoning tending to show beyond speculation that something useful will be
`
`uncovered.” Garmin Int'l, Inc. v. Cuozzo Speed Techs. LLC, IPR2012-00001, Paper
`
`26 at 6 (P.T.A.B. Mar. 5, 2013). The term “useful” goes beyond traditional district
`
`court litigation thresholds of relevance and admissibility. Id. at 7. Here, Chrimar
`
`has the burden of demonstrating that the requested discovery is “favorable in
`
`substantive value to a contention of the party moving for discovery.” Id.
`
`Chrimar alleges that the requested discovery is relevant to the issue of
`
`identifying the real parties-in-interest. (Mot. at 3). The Office Patent Trial Practice
`
`Guide provides guidance regarding factors to consider in determining whether a
`
`party is a real party-in-interest. See Office Patent Trial Practice Guide, 77 Fed.
`
`Reg. 48756, 48759 (Aug. 14, 2012). One important consideration is whether a non-
`
`party exercises, or could have exercised, control over a party’s participation in the
`
`IPR proceeding. Id. An example justifying the real party-in-interest label is a party
`
`that “funds and directs and controls” an IPR petition or proceeding. Id. at 48760
`
`(emphasis added).
`
`As a threshold matter, Chrimar fails to explain how its proposed
`
`interrogatories and document requests relate to identification of any potential real
`
`3
`
`
`
`party-in-interest that funds and directs and controls the IPR proceeding. As a
`
`result, Chrimar has not met its burden of showing that its proposed discovery
`
`requests will in any way support its contention that the petition fails to name a real
`
`party-in-interest.
`
`In its Motion, Chrimar provides a list of “evidence” allegedly showing
`
`useful information will be uncovered. (Mot. at 3-5). This “evidence” can be
`
`divided into three categories: (i) purported indemnification agreements between
`
`AMX and/or Dell and third-parties (Mot. at 4); (ii) the fact that AMX and HP both
`
`hired McDermott Will & Emery as counsel in separate cases (Mot. at 3); and (iii)
`
`the fact that Dell is a customer of Aerohive Networks (Mot. at 5). Nowhere does
`
`Chrimar explain how any of this information is connected to or relates to the
`
`specific proposed interrogatories or document requests set forth in Exhibit 2002.
`
`Chrimar also fails to show how the listed “evidence” demonstrates that a non-party
`
`funded this proceeding and exercised or could have exercised control over AMX or
`
`Dell’s participation in this proceeding.
`
`For instance, the mere existence of an indemnification provision or
`
`agreement is insufficient to establish the expansive concept of privity, much less
`
`the more narrowly defined relationship of a real party-in-interest:
`
`According to long-standing precedent, Bros, Inc. v. W.E. Grace Mfg.
`Co., 261 F.2d 428, 429 (5th Cir. 1958), when a patent holder sues a
`dealer, seller, or distributer of an accused product, as is the case at
`
`4
`
`
`
`hand, indemnity payments and minor participation in a trial are not
`sufficient to establish privity between the non-party manufacturer of
`the accused device and the defendant parties.
`Broadcom Corp. v. Telefonaktiebolaget LM Ericsson (PUBL), IPR2013-00601,
`
`Paper 23 at 7 (P.T.A.B. Jan. 24, 2014) (also citing I.T.S. Rubber Co. v. Essex Co.,
`
`272 U.S. 429 (1926) and Restatement, Judgment § 84, comment e (1942))
`
`(denying motion for additional discovery that relied largely on indemnity
`
`agreements between a supplier and its customers relating to district court
`
`litigation). While Chrimar alleges that certain indemnification agreements exist,
`
`Chrimar provides no
`
`evidence beyond speculation
`
`that
`
`the
`
`requested
`
`indemnification agreements obligate any third-party to fund the present IPR
`
`proceeding, or provide any third-party the right to control the IPR proceeding. See
`
`Wavemarket Inc. v. Locationet Sys. Ltd., IPR2014-00199, Paper 34 at 6 (P.T.A.B.
`
`Aug. 11, 2014) (finding identification of indemnification obligation is not
`
`sufficient to demonstrate beyond speculation that non-party funded, controlled, or
`
`had ability to exercise control over IPR proceedings).
`
`Similarly, Chrimar provides no evidence or explanation as to how the mere
`
`fact that AMX and HP hired the same law firm demonstrates that HP funded or
`
`exercised control over this IPR proceeding. Under similar circumstances, the
`
`Board has found that the existence of shared counsel between a petitioner and a
`
`third-party “does not demonstrate beyond speculation that something useful will be
`
`5
`
`
`
`uncovered regarding [the non-party’s] funding, direction, control, or ability to
`
`exercise control of Petitioner’s participation
`
`in
`
`this
`
`inter partes review
`
`proceeding.” Wavemarket, IPR2014-00199, Paper 34 at 6 (italics in original).
`
`Likewise, the fact that Dell and Aerohive Networks are co-defendants in a
`
`co-pending district court action is not evidence that Aerohive Networks is a real
`
`party-in-interest. See Office Patent Trial Practice Guide, 77 Fed. Reg. at 48760 (“If
`
`Party A is part of a Joint Defense Group with Party B in a patent infringement suit
`
`. . . Party A is not a ‘real party-in-interest’ . . . based solely on its participation in
`
`that Group.”). Chrimar neither alleged nor provided any evidence establishing
`
`beyond mere speculation that Aerohive Networks controls or has the right to
`
`control this proceeding. See Wavemarket, IPR2014-00199, Paper 34 at 6 (finding
`
`joint defense/common
`
`interest agreements does not demonstrate beyond
`
`speculation that something useful will be uncovered regarding non-party’s
`
`funding, direction, control, or ability to exercise control of an inter partes review
`
`proceeding). Moreover, the fact that Chrimar chose to sue Dell and Aerohive in the
`
`same district court case cannot by itself elevate Aerohive to a real party-in-interest,
`
`as Chrimar appears to imply. Otherwise, Chrimar could unilaterally manufacture
`
`real party-in-interest status for any companies it wants simply by naming those
`
`companies as co-defendants in the case—which cannot be the law.
`
`6
`
`
`
`Even Chrimar admits it does not have evidence beyond speculation, instead
`
`saying it “believes that Ruckus was indemnifying AMX” and that it “believes that
`
`it can show that HP, Cisco, and/or another entity is a real party-in-interest or
`
`privy.” (Mot. at 2, 4 (emphasis added)). Chrimar’s use of the word “believes”
`
`evinces speculation, rather than demonstrating it has evidence in its possession
`
`tending to show beyond speculation that any third-party funded this proceeding
`
`and exercised control, or could have exercised control, over this proceeding. See
`
`CaptionCall, L.L.C. v. Ultratec, Inc., IPR2015-00636, Paper 42 at 17-18 (P.T.A.B.
`
`Feb. 23, 2016) (finding that use of the word “believes” in a motion for additional
`
`discovery supported a finding that Patent Owner’s discovery requests were based
`
`on mere speculation).
`
`For at least these reasons, the Patent Owner has failed to satisfy Garmin
`
`Factor 1 and has therefore failed to demonstrate the requested additional discovery
`
`is in the interest of justice.
`
`B.
`
`Garmin Factor 3: Patent Owner Has the Ability to Obtain the
`Information by Other Means
`
`Not only does Chrimar have the ability to obtain the requested information
`
`by other means, it has actually sought alternative and less cumbersome means as to
`
`AMX to determine whether any third-parties should have been named in the IPR
`
`petition. The day after Chrimar filed its Motion, it took the Rule 30(b)(6) corporate
`
`deposition of AMX in connection with the co-pending district court litigation.
`
`7
`
`
`
`During the deposition, Chrimar’s attorney questioned the witness about the IPR
`
`proceedings and learned that no third-parties are contributing to the funding of the
`
`IPR proceedings. (Ex. 1040, Noble Dep. Tr. Vol. 2 at 387:23-25). Chrimar also
`
`learned that AMX did not speak to any third-parties prior to filing the petition in
`
`the current IPR proceeding. (Ex. 1039, Noble Dep. Tr. Vol. 1 at 182:17-19, 183:2-
`
`5, 184:4-25). Moreover, even though indemnification agreements are not sufficient
`
`to demonstrate beyond speculation that a non-party funded, controlled, or had
`
`ability to exercise control over IPR proceedings, when Chrimar asked about certain
`
`non-parties,
`
`it
`
`learned
`
`that AMX has neither
`
`tendered nor
`
`requested
`
`indemnification from them with respect to the on-going litigation. (Id. at 70:8-10,
`
`185:16-186:9). As a result, the crux of the information sought by the proposed
`
`interrogatories and document requests (i.e., there are no unnamed real parties-in-
`
`interest) is already in Chrimar’s possession and/or available to Chrimar through
`
`other less restrictive means. Thus, Chrimar’s claim that it cannot obtain the
`
`requested information by alternative means is demonstrably wrong.
`
`Moreover, if Chrimar were to take a similar corporate deposition of Dell it
`
`would discover that none of Dell’s indemnification agreements with its suppliers
`
`reference IPR proceedings, give its suppliers the right to control IPR proceedings
`
`filed by Dell, or obligate Dell to file IPRs, and therefore Dell’s agreements with its
`
`suppliers (which are highly confidential) in no way render those suppliers real
`
`8
`
`
`
`parties-in-interest for these IPR proceedings. See Broadcom Corp. v. Wi-Fi One,
`
`LLC, IPR2013-00601, Paper 71 at 7 (P.T.A.B. Jun. 1, 2015) (finding that Patent
`
`Owner failed to show that “Petitioner’s indemnity agreements even mention IPRs,
`
`let alone would show funding, control, or ability to control IPRs, or would have
`
`obligated Broadcom to file specific, if any, IPRs.”) (emphasis added).
`
`C.
`
`Garmin Factor 5: Chrimar’s Requested Discovery is Overly
`Burdensome
`
`Chrimar’s proposed discovery requests are not narrowly tailored. To the
`
`contrary, Chrimar’s proposed requests are so broad that they will necessarily
`
`require production of information unrelated to identification of any alleged real
`
`party-in-interest.
`
`Proposed Document Request No. 1 requests “all indemnity agreements”
`
`relating to the accused products. (Ex. 2002). This request is overly broad because it
`
`could encompass, for example, the thousands of agreements with customers and
`
`end users who have purchased products from AMX or Dell. Chrimar offers no
`
`explanation as to why such information would lead to useful information to
`
`demonstrate such customers and end users are potential real parties-in-interest.
`
`Moreover, Dell’s agreements with its suppliers are highly confidential, and it is
`
`overly burdensome to require Dell to produce such confidential information in this
`
`proceeding when Chrimar has not demonstrated—and cannot demonstrate, as
`
`explained above—beyond speculation that those agreements in any way provide
`
`9
`
`
`
`for the suppliers’ funding, direction, control, or ability to exercise control of Dell’s
`
`participation in this IPR proceeding.
`
`Proposed Document Request No. 3 seeks any agreement with any third party
`
`regarding any district court litigation involving U.S. Patent Nos. 8,942,107,
`
`9,049,019, 9,019,838; or 8,902,760. (Ex. 2002). The only such agreements in
`
`existence are joint defense agreements relating solely to the district court
`
`litigations, and these agreements are privileged under the common interest doctrine
`
`and are therefore not discoverable. Moreover, Chrimar has not provided any
`
`evidence beyond speculation that any agreement with respect to the district court
`
`litigations provides a third-party with the right or ability to control the current IPR
`
`proceedings. See Wavemarket, IPR2014-00199, Paper 34 at 6 (denying discovery
`
`of joint defense/common interest agreements).
`
`III. Conclusion
`
`Petitioners respectfully request that Chrimar’s Motion be denied.
`
`Date: April 27, 2016
`
`Respectfully submitted,
`
`/s/ Brent A. Hawkins
`Brent A. Hawkins (Reg. No. 44,146)
`Amol A. Parikh (Reg. No. 60,671)
`MCDERMOTT, WILL & EMERY LLP
`
`Gilbert A. Greene (Reg. No. 48,366)
`NORTON ROSE FULBRIGHT US LLP
`
`Attorneys for Petitioners,
`AMX LLC and Dell Inc.
`
`10
`
`
`
`CERTIFICATE OF SERVICE
`
`On April 27, 2016, Petitioners’ Opposition to Patent Owner’s Motion for
`
`Additional Discovery was served by email on the following counsel of record for
`
`Patent Owner:
`
`Justin S. Cohen (Reg. No. 59.964)
`THOMPSON & KNIGHT LLP
`1722 Routh Street, Suite 1500
`Dallas, TX 75201
`Justin.Cohen@tklaw.com
`
`Richard W. Hoffman (Reg. No. 33,711)
`REISING ETHINGTON PC
`755 West Big Beaver Road, Suite 1850
`Troy, MI 48084
`Hoffmann@Reising.com
`
`/s/ Brent A. Hawkins
`Brent A. Hawkins
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