`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`
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`HARVEST TRADING GROUP, INC.,
`Petition
`
`v.
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`VIREO SYSTEMS, INC. AND
`UNEMED CORPORATION,
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`Patent Owners
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`U.S. PATENT NO. 8,354,450
`IPR 2016-00945
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`U.S. PATENT NO. 8,962,685
`IPR 2016-00947
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`DECLARATION OF MARK FAULKNER
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`Ex. 2001
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`Vireo Systems, Inc. Ex. 2001 - 001
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`Harvest Trading Group, Inc. v. Vireo Systems, Inc.
`IPR2016-00947
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`DECLARATION
`I, Mark Faulkner, hereby declare and say:
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`1. I am over the age of eighteen (18) and have personal knowledge of the matters
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`set forth herein.
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`2. I am the President of Vireo Systems, Inc. (“Vireo” or “Owner”).
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`3. Vireo is one of the co-owners of U.S. Patent Nos. 8,354,450 (the “ ‘450
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`Patent”), 8,962,685 (the “ ‘685 Patent”), 8,026,385 (the “ ‘385 Patent”), and
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`7,608,641 (the “ ‘641 Patent).
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`4. I understand that the ‘450 Patent is subject to a petition for inter partes review
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`in Proceeding No. IPR2016-00945 filed by the Petitioner, Harvest Trading
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`Group, Inc., and that the ‘685 Patent is subject to a petition for inter partes
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`review in Proceeding No. IPR2016-00947, also filed by Harvest Trading
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`Group, Inc. I further understand that the ‘450 Patent is identified as a
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`continuation in part of the ‘385 Patent, the ‘385 Patent is a continuation of the
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`‘450 Patent, and that the ‘685 Patent is a divisional of the ‘450 Patent.
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`5. Vireo and ProMera Health, LLC (“ProMera”) were parties to a Product
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`Development and Manufacturing Agreement (“PDMA”) under which Vireo
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`was responsible for manufacturing a creatine hydrochloride nutritional
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`supplement, and ProMera was to market and distribute creatine hydrochloride
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`Vireo Systems, Inc. Ex. 2001 - 002
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`Harvest Trading Group, Inc. v. Vireo Systems, Inc.
`IPR2016-00947
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`nutritional supplements covered by the ‘450 and ‘685 Patents under the CON-
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`CRET brand.
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`6. ProMera is a limited liability company with three members, which include
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`HTG Ventures, LLC (51% ownership) and the Patent Owner (Vireo, 42%
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`ownership). During the PDMA, ProMera’s managers were John Lewis, Tim
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`Kensinger (“Kensinger”), and myself. Petitioner was identified as a resource
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`ProMera would use to market and distribute creatine hydrochloride. HTG
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`Ventures appointed managers Kensinger and Lewis, who have caused
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`ProMera to use Petitioner as an exclusive distributor, which is the subject of
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`a separate lawsuits that are currently pending. Upon learning of HTG
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`Ventures’ and its appointed managers’ misconduct, Vireo terminated the
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`PDMA (and ProMera’s license) and I resigned as manager. ProMera and
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`Petitioner continued to sell creatine hydrochloride in violation of the patents.
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`7. Petitioner (Harvest Trading Group, Inc.) is a corporation, and has three
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`officers: James Lewis (President), John Lewis (Treasurer), and Kensinger
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`(Secretary). These same three individuals are also the owners of Petitioner.
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`8. HTG Ventures, LLC, a limited liability company, has three members who
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`coincide with the officers and owners of Petitioner: John Lewis, James Lewis,
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`and Kensinger. The managers of HTG Ventures are also the same three
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`individuals. HTG Ventures is a holding company for its owners’ interest in
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`Vireo Systems, Inc. Ex. 2001 - 003
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`Harvest Trading Group, Inc. v. Vireo Systems, Inc.
`IPR2016-00947
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`ProMera (51% ownership). Petitioner and its owners (John Lewis, James
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`Lewis, and Kensinger) caused HTG Ventures to manage ProMera according
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`to their wishes.
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`9. Harvest Trading Group Technologies, Inc. (“HTG Tech”) is an affiliate of,
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`and shares much of the same ownership of, Petitioner. HTG Tech provided
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`certain operational support to ProMera in its sale and distribution of CON-
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`CRET.
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`10. As President of a member of ProMera, I became familiar with the operation
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`of ProMera, with the owners and managers of Petitioner (Harvest Trading
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`Group, Inc.) and its affiliates (HTG Ventures and HTG Tech), and the
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`individuals that primarily controlled the operation of these entities.
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`11. I was personally involved in a number of meetings that included John Lewis,
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`James Lewis, and Kensinger discussing operation of ProMera and the
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`distribution and sale of the CON-CRET product. In those meetings,
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`Kensinger provided the same amount of input, influence, and control as that
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`provided by John Lewis and James Lewis. John Lewis, James Lewis and
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`Kensinger acted as co-equals in controlling the operations. Kensinger is a
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`manager of ProMera.
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`Vireo Systems, Inc. Ex. 2001 - 004
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`Harvest Trading Group, Inc. v. Vireo Systems, Inc.
`IPR2016-00947
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`12. I have direct knowledge of Kensinger controlling and directing various
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`aspects of ProMera’s operations and litigation strategy. First, when Vireo and
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`ProMera negotiated amendments or changes to the PDMA, Kensinger
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`communicated and directed ProMera’s position as Vireo’s licensee on
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`intellectual property issues and its obligations for defense.
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`13. Second, Kensinger also directed or influenced various aspects of ProMera’s
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`implementation of its obligations under the PDMA, including directly
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`influencing ProMera’s retail strategy for sale of the CON-CRET products, and
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`resolving disputes with Vireo over various fees and charges.
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`14. While the PDMA was in place, ProMera sold the CON-CRET nutritional
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`supplements using the creatine hydrochloride supplied by Vireo to its
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`managers’ affiliate, Petitioner. ProMera or Petitioner, under the ProMera
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`brand, advertised the CON-CRET products as “patented” and its packaging
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`included a reference to the ‘450 and ‘685 Patents.
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`15. The patent application that ultimately issued as the ‘450 Patent was filed as a
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`continuation in part of the ‘385 Patent on October 21, 2010. While the PDMA
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`was in place, James P. Lewis, John T. Lewis, and Kensinger (the principals of
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`ProMera and Petitioner) were provided copies of the pending patent
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`applications, communications to and from the United States Patent and
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`Trademark Office (“USPTO”), and provided input on the prosecution of the
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`Vireo Systems, Inc. Ex. 2001 - 005
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`Harvest Trading Group, Inc. v. Vireo Systems, Inc.
`IPR2016-00947
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`application. ProMera was even responsible for payment of, and did in fact
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`pay, the attorneys’ fees associated with the prosecution of the ‘450 Patent and
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`‘685 Patent.
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`16. As a result of Petitioner’s and its owners misconduct, Vireo terminated the
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`PDMA on February 5, 2015. After termination, Petitioner and its affiliates
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`continued to sell the creatine hydrochloride-based CON-CRET nutritional
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`supplement using an alternative manufacturer of creatine hydrochloride.
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`Petitioner continued and continues to advertise the unpatented creatine
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`hydrochloride as CON-CRET, which had been branded as a patented product.
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`17. Petitioner and ProMera sued Vireo seeking a declaratory judgment to
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`invalidate the ‘450 Patent and ‘685 Patent in the United States District Court
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`in Massachusetts. (“Massachusetts Patent Litigation”). Vireo sued Petitioner
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`and ProMera for infringement of the ‘450 Patent and ‘685 Patent (among other
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`claims) in the United States District Court of Nebraska on April 22, 2015.
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`The Massachusetts Patent Litigation was transferred to the United States
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`District Court of Nebraska.
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`18. One year later, on April 22, 2016, Petitioner filed this IPR.
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`Conclusion
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`Vireo Systems, Inc. Ex. 2001 - 006
`
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`Harvest Trading Group, Inc. v. Vireo Systems, Inc.
`IPR2016-00947
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`Vireo Systems, Inc. Ex. 2001 - 007
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`Harvest Trading Group, Inc. v. Vireo Systems, Inc.
`IPR2016-00947