United States Patent and Trademark Office
`
`________________________________________________
`
`Before the Patent Trial and Appeal Board
`________________________________________________
`
`
`
`D-Link Systems, Inc.,
`Petitioner
`
`v.
`
`Chrimar Systems, Inc.
`Patent Owner
`
`
`
`________________________________________________
`
`Case No. IPR2016-01425
`U.S. Patent No. 8,155,012
`________________________________________________
`
`
`Patent Owner’s Preliminary Response
`Under 37 C.F.R. § 42.107(a)
`
`
`
`
`
`
`
`
`
`

`

`Case No. IPR2016-01425
`U.S. Patent No. 8,155,012
`
`
`Table of Contents
`
`Table of Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv 
`Patent Owner’s Exhibit List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi 
`Introduction and Summary of Arguments . . . . . . . . . . . . . . . . . . . . . . . . 1 
`Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 
`A.  Status of Related Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 
`B.  Chrimar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 
`C.  The ’012 Patent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 
`D. Person of Ordinary Skill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 
`Arguments and Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 
`A.  Legal Standard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 
`B.  The Petition does not name all real parties-in-
`interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 
`1.  Legal Standard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 
`2.  D-Link Corporation is an unnamed real party-
`in-interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 
`C.  Claim Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 
`1.  Prior Claim Constructions from the District
`Court Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 
`2.  “wherein distinguishing information about the
`piece of Ethernet data terminal equipment is
`associated to impedance within the at least one
`path” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 
`a.  The distinguishing-information phrase
`defines structure that limits the claim. . . . . . . . . . . . . . . . . . 24 
`
`
`
`
`– ii –
`
`

`

`Case No. IPR2016-01425
`U.S. Patent No. 8,155,012
`
`
`b.  Properly construed, the distinguishing-
`information phrase requires that the claimed
`piece of Ethernet data terminal equipment
`must be configured to be distinguishable
`from at least one other piece of Ethernet
`data terminal equipment on the same
`network. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 
`D. Petitioner has not made a prima facie case that the
`’012 Patent’s claims are obvious in view of any of
`the alleged combinations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 
`1.  The combination of Chang and Patton does not
`meet every limitation of the claims. . . . . . . . . . . . . . . . . . . . . . 36 
`a.  Chang, alone, does not teach or disclose the
`distinguishing-information limitation. . . . . . . . . . . . . . . . . . 36 
`2.  Petitioner’s proposed combination of Chang
`and Patton fails because: (1) it does not disclose
`or meet the distinguishing-information
`limitation; and (2) Chang explicitly disparages
`Patton’s detection mechanism. . . . . . . . . . . . . . . . . . . . . . . . 38 
`3.  Applying the proper claim construction, the
`alleged combination of de Nijs and Chaudhry
`does not meet every element of the ’012 Patent
`claims. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 
`Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 
`Certificate of Compliance with Word Count . . . . . . . . . . . . . . . . . . . . . 46 
`Certificate of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 
`
`
`
`– iii –
`
`

`

`Case No. IPR2016-01425
`U.S. Patent No. 8,155,012
`
`
` Table of Authorities
`
`Federal Cases 
`
`AIA Eng’g Ltd. v. Magotteaux Int’l S/A,
`657 F.3d 1264 (Fed. Cir. 2011) ........................................................................... 35
`Astrazeneca AB v. Mut. Pharm. Co.,
`384 F.3d 1333 (Fed. Cir. 2004) ........................................................................... 35
`Catalina Mktg. Int’l, Inc. v. Coolsavings.com, Inc.,
`289 F.3d 801 (Fed. Cir. 2002) ............................................................................ 25
`Chalumeau Power Sys., LLC v. Alcatel-Lucent,
`No. 11-1175, 2013 WL 5913849 (D. Del. Oct. 30, 2013) ...................................... 36
`Dynamic Drinkware, LLC v. Nat’l Graphics, Inc.,
`800 F.3d 1375 (Fed. Cir. 2015) ........................................................................... 12
`Freeman v. Gerber Prods. Co.,
`357 F. Supp. 2d 1290 (D. Kan. 2005) ................................................................. 24
`Gemalto S.A. v. HTC Corp.,
`754 F.3d 1364 (Fed. Cir. 2014) ........................................................................... 34
`Gonzalez v. Banco Central Corp.,
`27 F.3d 751 (1st Cir. 1994) ...................................................................................13
`In re Gurley,
`27 F.3d 551 (Fed. Cir. 1994) ............................................................................... 39
`In re Keum Nam Kim,
`Appeal 2100–005480, 2014 WL 663955 (P.T.A.B. Feb. 18, 2014) ..................... 24
`In re Schreiber,
`128 F.3d 1473 (Fed. Cir. 1997) ........................................................................... 24
`Microsoft Corp. v. Proxyconn, Inc.,
`789 F.3d 1292 (Fed. Cir. 2015) ........................................................................... 20
`Netword, LLC v. Centraal Corp.,
`242 F.3d 1347 (Fed. Cir. 2001) ........................................................................... 34
`On Demand Mach. Corp. v. Ingram Indus., Inc.,
`442 F.3d 1331 (Fed. Cir. 2006) ........................................................................... 34
`Phillips v. AWH Corp,
`415 F.3d 1303 (Fed. Cir. 2005) (en banc) ........................................................... 33
`Reflectix, Inc. v. Promethean Insulation Tech. LLC,
`IPR2015-00039, Paper 18 (2015) ........................................................................ 12
`Taylor v. Sturgell,
`553 U.S. 880 (2008) ............................................................................................13
`
`– iv –
`
`

`

`Case No. IPR2016-01425
`U.S. Patent No. 8,155,012
`
`Tietex Int’l, Ltd. v. Precision Fabrics Group, Inc.,
`IPR2014-01248, Paper 39 (2016) ........................................................................ 12
`Zerto, Inc. v. EMC Corp.,
`IPR2014-01254, Paper 35 at (2015) .................................................................... 12
`
`
`State Cases 
`
`35 U.S.C. § 312(a) .................................................................................................. 12
`35 U.S.C. § 313 ......................................................................................................... 3
`35 U.S.C. § 314(a) ......................................................................................... 2, 11, 34
`
`
`Cases 
`
`Office Patent Trial Practice Guide,
`77 Fed. Reg. 48,756, (Aug. 14, 2012) .................................................. 12, 13, 14, 19
`
`
`Federal Statutes 
`
`37 C.F.R. § 42.100(b) ............................................................................................. 20
`37 C.F.R. § 42.104 ................................................................................................. 12
`37 C.F.R. § 42.107 .............................................................................................. 3, 47
`37 C.F.R. § 42.108(c) .......................................................................................... 2, 11
`37 C.F.R. § 42.22(a)(2) .......................................................................................... 12
`
`
`
`– v –
`
`

`

`Case No. IPR2016-01425
`U.S. Patent No. 8,155,012
`
`
` Patent Owner’s Exhibit List
`
`
`
`Chrimar
`System, Inc.
`Exhibit No.
`
`2017
`
`2018
`
`2019
`
`2020
`
`2032
`
`Exhibit Description
`
`Date Filed
`
`Memorandum Opinion and order denying AMX’s
`motion for summary judgment of non-
`infringement of the ’012 Patent, Dkt. No. 96,
`Chrimar Sys., Inc., et al. v. AMX, LLC, Civil
`Action No. 6:13-cv-881-JDL, Eastern District of
`Texas
`Memorandum Opinion and order construing
`certain terms of the ’012 Patent, Dkt. No. 105,
`Chrimar Sys., Inc., et al. v. AMX, LLC, Civil
`Action No. 6:13-cv-881-JDL, Eastern District of
`Texas
`Memorandum Opinion and order construing
`certain terms of the ’012 Patent and denying
`AMX’s motion for summary judgment of
`indefiniteness regarding the “distinguishing”
`terms of the ’012 Patent, Dkt. No. 108, Chrimar
`Sys., Inc., et al. v. AMX, LLC, Civil Action No.
`6:13-cv-881-JDL, Eastern District of Texas
`Memorandum Opinion and order denying AMX’s
`motion for summary judgment of indefiniteness
`regarding certain claims of the ’012, ’107, and ’760
`Patents, Dkt. No. 122, Chrimar Sys., Inc., et al. v.
`AMX, LLC, Civil Action No. 6:15-cv-164-JDL,
`Eastern District of Texas
`Defendants’ Combined Motion for Summary
`Judgment and Claim Construction (selected
`portions), Dkt. No. 73, filed in Chrimar Systems,
`Inc., et al. v. AMX, LLC, Civil Action No. 6:13-cv-
`881-JDL, Eastern District of Texas
`
`10/18/2016
`
`10/18/2016
`
`10/18/2016
`
`10/18/2016
`
`10/18/2016
`
`– vi –
`
`

`

`Case No. IPR2016-01425
`U.S. Patent No. 8,155,012
`
`
`Chrimar
`System, Inc.
`Exhibit No.
`
`Exhibit Description
`
`Date Filed
`
`2033
`
`2034
`
`2035
`
`2038
`
`2039
`
`2040
`
`2041
`
`2042
`
`2043
`
`2044
`
`Defendants’ Responsive Claim Construction Brief
`(selected portions), Dkt. No. 432, filed in Chrimar
`Sys., Inc., et al. v. ADTRAN, Inc., et al., Civil
`Action No. 6:15-cv-618-JRG-JDL, Eastern District
`of Texas
`Memorandum Opinion and Order, Dkt. No. 223,
`filed in Chrimar Sys., Inc., et al. v. Alcatel-Lucent, et
`al., Civil Action No. 6:15-cv-163-JDL, Eastern
`District of Texas
`Memorandum Opinion and order on ALE’s
`motion to construe certain claim terms of the ’012
`and ’760 Patents, Dkt. No. 318, filed in Chrimar
`Sys., Inc., et al. v. AMX, LLC, Civil Action No.
`6:15-cv-164-JDL, Eastern District of Texas
`D-Link Annual Report, 2014
`
`D-Link Corporate Presentation, August 2013
`
`D-Link Annual Report, 2013
`Docket Sheet, Quad Powerline Tech. v. Actiontec
`Elec., Civil Action No. 2:14-cv-01166-JRG-RSP,
`Eastern District of Texas
`Docket Sheet, Via Vadis, et al. v. D-Link Sys., Inc.,
`Civil Action No. 1:14-cv-00812-LY, Western
`District of Texas
`Docket Sheet, Ericsson Inc. v. D-Link Corp., et al.,
`Civil Action No. 6:10-cv-00473-RWS, Eastern
`District of Texas
`Docket Sheet, Concinnitas, LLC, et al. v. D-Link
`Corp., et al., Civil Action No. 2:14-cv-01043-JRG-
`RSP, Eastern District of Texas
`
`10/18/2016
`
`10/18/2016
`
`10/18/2016
`
`10/18/2016
`
`10/18/2016
`
`10/18/2016
`
`10/18/2016
`
`10/18/2016
`
`10/18/2016
`
`10/18/2016
`
`– vii –
`
`

`

`Case No. IPR2016-01425
`U.S. Patent No. 8,155,012
`
`
`Chrimar
`System, Inc.
`Exhibit No.
`
`Exhibit Description
`
`Date Filed
`
`Docket Sheet, NorthPeak Wireless, LLC v. 3Com
`Corp., et al., Civil Action No. 5:08-cv-01813-IPJ,
`Northern District of Alabama
`Docket Sheet, Network-1 Sec. Sol., Inc. v. D-Link
`Corp., et al., Civil Action No. 6:05-cv-00291-LED,
`Eastern District of Texas
`Notice of Appearance of Counsel for Defendant D-
`Link Systems, Inc., Dkt. No. 64, Chrimar Sys.,
`Inc., et al. v. D-Link Sys., Inc., Civil Action No.
`6:15-cv-618-JRG-JDL, Eastern District of Texas
`
`10/18/2016
`
`10/18/2016
`
`10/18/2016
`
`2045
`
`2046
`
`2047
`
`
`
`– viii –
`
`

`

`Case No. IPR2016-01425
`U.S. Patent No. 8,155,012
`
`
`
`
`Introduction and Summary of Arguments
`
`Petitioner wrongly contends that certain claims of U.S. Patent No. 8,155,012
`
`(the “’012 Patent”) are rendered obvious in light of two alleged combinations:
`
`(1) Chang (U.S. Patent No. 5,991,885) and Patton (U.S. Patent No. 5,121,482); and
`
`(2) de Nijs (U.S. Patent No. 5,568,525) and Chaudhry (U.S. Patent No.
`
`5,790,363).1
`
`As an initial matter, the Petition fails because it does not name all of the real
`
`parties-in-interest. Petitioner’s parent company, D-Link Corporation, consistently
`
`and regularly retains counsel for and controls the defense of all patent suits brought
`
`against its subsidiary, D-Link Systems, Inc.—the only named Petitioner in this
`
`proceeding. In fact, the law firm representing Petitioner here is the same firm that
`
`has been retained by D-Link Corporation in nearly every (if not, in fact, every)
`
`patent suit brought against Petitioner in the past several years and that represents
`
`Petitioner in the underlying district court case. There is little doubt that D-Link
`
`Corporation is funding and controlling this proceeding. Accordingly, it should have
`
`been named as a real party-in-interest. Because D-Link Corporation was not named
`
`
`1 In each case, the claims at issue are: independent claim 31 and its dependent
`
`claims 34, 35, 36, 40, 43, 44, 52, 56, and 60.
`
`– 1 –
`
`

`

`Case No. IPR2016-01425
`U.S. Patent No. 8,155,012
`
`as a real party-in-interest, the Petition should be denied.
`
`Further, Petitioner has not met its burden to show a reasonable likelihood that
`
`one or more challenged claims of the ’012 Patent will be found unpatentable, as
`
`required by 35 U.S.C. § 314(a) and 37 C.F.R. § 42.108(c). Specifically, Petitioner
`
`has failed to make a prima facie case that the ’012 Patent is obvious in view of the
`
`combination of either Chang and Patton or de Nijs and Chaudhry.
`
`With respect to both Ground 1 and Ground 2, Petitioner’s arguments are
`
`based on an improper claim construction. Independent claim 31—from which all of
`
`the other claims at issue depend—recites “[a]n adapted piece of Ethernet data
`
`terminal equipment” that includes, among other things, at least one path “wherein
`
`distinguishing information about the piece of Ethernet data terminal equipment is
`
`associated to impedance within the at least one path.” Properly construed, the
`
`claim requires that the at least one path must be configured to have impedance
`
`configured to distinguish the piece of Ethernet data terminal equipment from at
`
`least one other piece of Ethernet data terminal equipment in the same network.
`
`Petitioner does not contend that either of its alleged combinations discloses
`
`such a path. Rather, Petitioner argues the combinations are invalidating because
`
`they can distinguish Ethernet devices, generally, from other types of non-
`
`Ethernet devices. Specifically, Chang and Patton allegedly disclose a system that
`
`– 2 –
`
`

`

`Case No. IPR2016-01425
`U.S. Patent No. 8,155,012
`
`can distinguish Ethernet equipment from an infrared adapter, and de Nijs and
`
`Chaudhry allegedly disclose a system that can be used to distinguish equipment in
`
`one network from equipment in another network. Petitioner does not contend that
`
`either combination can distinguish one piece of Ethernet data terminal equipment
`
`from another piece of Ethernet data terminal equipment, as the claims require.
`
`Accordingly, Petitioner has not made a prima facie case that any claim of the
`
`’012 Patent is obvious in light of either combination. The Board should reject both
`
`Grounds of the Petition for at least this reason.
`
`This filing is timely under 35 U.S.C. § 313 and 37 C.F.R. § 42.107, as it is being
`
`filed within three months of the Notice dated mailed July 18, 2016, granting the
`
`Petition a filing date of July 13, 2016. While Patent Owner here addresses some
`
`limited aspects of the Petition, if instituted, Patent Owner expects to address these
`
`and other aspects of the petition in greater detail.
`
` Background
`A. Status of Related Litigation
`
`The ’012 Patent is currently one of four related patents2 asserted in litigation
`
`pending in the Eastern District of Texas against Petitioner: Chrimar Systems, Inc., et
`
`2 The four related patents are U.S. Patent Nos. 8,155,012 (Ex. 1001);
`
`9,049,019; 8,942,107 and 9,019,012.
`
`– 3 –
`
`

`

`Case No. IPR2016-01425
`U.S. Patent No. 8,155,012
`
`al. v. ADTRAN, Inc., et al., Case No. 6:15-cv-618. The court in that case construed
`
`certain terms of the ’012 Patent and denied defendants’ (including Petitioner)
`
`request to find certain claims of the ’012 Patent invalid as being indefinite.3 In
`
`other, earlier cases involving the ’012 Patent, the Court also construed certain
`
`terms of the ’012 Patent, denied Defendants’ motion for summary judgment of
`
`non-infringement, and denied Defendants’ motions of summary judgment of
`
`invalidity.4 Trial is scheduled for January of 2016 against D-Link. In an earlier case
`
`
`3 Mem. Op. & Order, Chrimar Systems, Inc., et al. v. ADTRAN, Inc., et al., No.
`
`6:15-cv-618-JRG-JDL (E.D. Tex., June 20, 2016 (ECF No. 454)) (Ex. 1004-1).
`
`4 Mem. Op. & Order, Chrimar Systems, Inc., et al. v. AMX, LLC, No. 6:13-cv-
`
`881 (E.D. Tex. Oct. 22, 2014 (ECF No. 96)) (Ex. 2017); Mem. Op. & Order,
`
`Chrimar Systems, Inc., et al. v. AMX, LLC, No. 6:13-cv-881-JDL (E.D. Tex. Jan. 8,
`
`2015 (ECF No. 105)) (Ex. 2018); Mem. Op. & Order, Chrimar Systems, Inc., et al. v.
`
`AMX, LLC, No. 6:13-cv-881-JDL (E.D. Tex. Jan. 16, 2015 (ECF No. 108)) (Ex.
`
`2019); Mem. Op. & Order, Chrimar Systems, Inc., et al. v. Alcatel-Lucent, et al., No.
`
`6:15-cv-163-JDL (E.D. Tex. Mar. 28, 2016 (ECF No. 122)) (Ex. 2020); Mem. Op.
`
`& Order, Chrimar Systems, Inc., et al. v. Alcatel-Lucent, et al., No. 6:15-cv-163-JDL
`
`(E.D. Tex. Mar. 28, 2016 (ECF No. 123)) (Ex. 1001-2); Mem. Op. & Order,
`
`– 4 –
`
`

`

`Case No. IPR2016-01425
`U.S. Patent No. 8,155,012
`
`involving the ’012 Patent, a jury trial was held against Alcatel-Lucent Enterprise,
`
`USA, Inc. (“ALE”) the week of October 3, 2016, resulting in a jury verdict in favor
`
`of Chrimar.5
`
`B. Chrimar
`
`Chrimar was founded in 1993 by Chris Young and Marshall Cummings.6 After
`
`learning about a number of thefts of networked equipment at the University of
`
`Michigan, where Mr. Cummings worked, the two began developing security
`
`solutions for networked equipment. While many in the industry focused on locking
`
`computers to desks and installing video surveillance systems, Messrs. Cummings
`
`and Young began focusing on an easily overlooked fact—these devices were already
`
`individually wired to the network by their own network cabling.
`
`
`Chrimar Systems, Inc., et al. v. Alcatel-Lucent, et al., No. 6:15-cv-163-JDL (E.D. Tex.
`
`July 29, 2016 (ECF No. 223)) (Ex. 2034); Mem. Op. & Order, Chrimar Systems,
`
`Inc., et al. v. Alcatel-Lucent, et al., No. 6:15-cv-163-JDL (E.D. Tex. Sept. 27, 2016
`
`(ECF No. 318)) (Ex. 2035).
`
`5 Chrimar Systems, Inc., et al. v. Alcatel-Lucent S.A., et al., Case No. 6:15-cv-
`
`163.
`
`6 Chrimar is a combination of “Chri” from Chris and “Mar” from Marshall.
`
`– 5 –
`
`

`

`Case No. IPR2016-01425
`U.S. Patent No. 8,155,012
`
`
`In 1992, Messrs. Cummings and Young filed a patent application, which
`
`issued in 1995 as U.S. Patent No. 5,406,260 entitled “Network Security System for
`
`Detecting Removal of Electronic Equipment.”7 The ’260 Patent claimed
`
`inventions related to monitoring the physical connectivity of a piece of equipment
`
`(e.g., a computer) to a network using existing network wiring—even when the
`
`piece of equipment was powered off. Realizing the uniqueness and potentially
`
`broad appeal of this idea, Messrs. Cummings and Young founded Chrimar in 1993
`
`and began working on a commercial product they called EtherLock.
`
`In response to customer demand, Chrimar expanded and John Austermann
`
`joined the company in 1997 to oversee its general management and direct its sales
`
`and marketing efforts. He and Mr. Cummings began contemplating ideas to expand
`
`the company’s product offerings. They soon conceived of inventions related to
`
`managing, tracking, and controlling assets that physically connect to a network,
`
`which led to the ’012 Patent and six other granted patents—all of which claim
`
`priority to Chrimar’s provisional patent application dated April 10, 1998.8
`
`
`7 Ex. 1010, the “’260 Patent.”
`
`8 Those patents are U.S. Pat. Nos. 6,650,622; 7,457,250; 9,019,838;
`
`9,049,019; 8,902,760; and 8,942,107, each of which claims priority to provisional
`
`– 6 –
`
`

`

`Case No. IPR2016-01425
`U.S. Patent No. 8,155,012
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`
`In early 1998, Chrimar began developing a new generation of products based
`
`on the inventions disclosed and claimed in those patents. And in the fall of 1998,
`
`Chrimar began selling new products that enabled physical control, tracking,
`
`management, and security of computer assets and network ports.
`
`C. The ’012 Patent
`
`The ’012 Patent is directed to methods and systems for managing devices
`
`connected in a wired network. The claims “relate[] generally to computer networks
`
`and, more particularly, to a network management and security system for
`
`managing, tracking, and identifying remotely located electronic equipment on a
`
`network.”9 The “invention is particularly adapted to be used with an existing
`
`Ethernet communications link or equivalents thereof.”10
`
`More specifically, the patent discloses identifying an “asset,” such as a
`
`computer, “by attaching an external or internal device to the asset and
`
`
`application no. 60/081,279 (Ex. 1005). U.S. Pat. No. 7,457,250 was subjected to a
`
`reexam, and all reexamined claims were confirmed as patentable.
`
`9 ’012 Patent at 1:23–26 (Ex. 1001).
`
`10 ’012 Patent at 3:35–37 (Ex. 1001).
`
`– 7 –
`
`

`

`Case No. IPR2016-01425
`U.S. Patent No. 8,155,012
`
`communicating with that device using existing network wiring or cabling.”11 The
`
`remote device is referred to as a “remote module.”12 An asset can be managed,
`
`tracked, or identified by using the remote module to communicate information
`
`about the asset to network monitoring equipment, referred to as a “central
`
`module.”13
`
`The basic configuration of an embodiment of the system claimed by the patent
`
`is illustrated in Figure 4, reproduced below with highlights and annotations.
`
`
`
`
`High-frequency data in an Ethernet network propagates between a hub (1) and
`
`a PC (3a) over two pairs of conductive lines—a pair of transmit lines, highlighted in
`
`green (conductors 1 & 2), and a pair of receive lines, highlighted in red (conductors
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`11 ’012 Patent at 1:67–2:2 (emphasis added) (Ex. 1001).
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`12 ’012 Patent at 3:22–25 (Ex. 1001).
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`13 ’012 Patent at 3:22–27; 6:1–6; 8:58–66 (Ex. 1001).
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`U.S. Patent No. 8,155,012
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`3 and 6). A central module (15a) and a remote module (16a) are placed between the
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`hub and the PC, with the high-frequency data propagating through them. What’s
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`novel about the system is that the remote module can convey information about the
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`PC to the central module through the same conductive lines that convey the high-
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`frequency data without adversely affecting the high-frequency data. This is
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`generally represented in the figure above by the black arrows between the central
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`and remote modules, and this can happen even when the PC is powered off.
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`This system allowed the patentees to solve a number of problems associated
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`with prior-art asset-management systems. As the patent explains:
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`[The prior art was] generally incapable of detecting the electrical
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`connection status of equipment[;] it cannot detect the physical
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`location of equipment, the identifying name of equipment is not
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`permanent, and the monitored assets must be powered-up.
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`Therefore, a method for permanently identifying an asset by
`attaching an external or internal device to the asset and
`communicating with that device using existing network
`wiring or cabling is desirable. . . . Such a device would allow a
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`company to track its assets, locate any given asset, and count the
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`total number of identified assets at any given time, thus
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`significantly reducing its [total cost of ownership] of identified
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`Case No. IPR2016-01425
`U.S. Patent No. 8,155,012
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`
`assets.14
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`In short, the patentees were looking for a way to identify, communicate with,
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`and manage distributed assets in a network, over existing network wires, even when
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`the assets are turned off. The innovative devices, methods, and systems described
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`and claimed by the ’012 Patent achieve each of these goals. Specifically, they are
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`able to: (1) transmit information about assets—e.g., a company’s computers—
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`along the same lines already being used to convey high-frequency data
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`communications to the assets, without interrupting the high-frequency data
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`communications15; and (2) convey information about the assets even when the
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`assets are powered off.16
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`14 ’012 Patent at 1:63–2:11 (Ex. 1001).
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`15 See, e.g., ’012 Patent at 11:64–66 (“The system transmits a signal over pre-
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`existing network wiring or cables without disturbing network communi-
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`cations . . . .”) (Ex. 1001).
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`16 See, e.g., Ex. 1001: ’012 Patent at 4:66–67 (describing an embodiment of the
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`invention “capable of identifying the existence and location of network assets
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`without power being applied to the assets.”); id. at 12:48–50 (“[T]he system
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`– 10 –
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`D. Person of Ordinary Skill
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`A person of ordinary skill in the art with respect to the ’012 Patent would
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`have, at a minimum, an undergraduate degree or the equivalent in the field of
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`electrical engineering or a related ancillary field, and one to three years of
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`experience with data-communications networks, such as Ethernet networks.
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`Having experience with data-communications networks, such a person would also
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`be familiar with data-communications protocols and standards.
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` Arguments and Authorities
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`A. Legal Standard
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`An inter partes review may be instituted only if “the information presented in
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`the petition . . . and any response . . . shows that there is a reasonable likelihood that
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`the petitioner would prevail with respect to at least 1 of the claims challenged in the
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`petition.” 35 U.S.C. § 314(a). The petitioner bears the burden of proof to
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`“demonstrate that there is a reasonable likelihood that at least one of the claims
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`challenged in the petition is unpatentable.” 37 C.F.R. § 42.108(c). At all stages of
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`the IPR, this burden of proof stays with the petitioner and never shifts to the patent
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`owner to prove the patentability of the challenged claims. See Dynamic Drinkware,
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`provides a means for permanently identifying the location of network assets
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`without applying power to the assets.”).
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`LLC v. Nat’l Graphics, Inc., 800 F.3d 1375, 1378–79 (Fed. Cir. 2015); see also Tietex
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`Int’l, Ltd. v. Precision Fabrics Group, Inc., IPR2014-01248, Paper 39 at 11 (2016).
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` When filing an IPR Petition, the petitioner must include sufficient evidence
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`and argument to meet its burden of proof. The petition must include “[a] full
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`statement of the reasons for the relief requested, including a detailed explanation of
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`the significance of the evidence including material facts, the governing law, rules,
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`and precedent.” 37 C.F.R. § 42.22(a)(2); see also 37 C.F.R. § 42.104 (requiring IPR
`
`petitions to meet the requirements of §§ 42.6, 42.8, 42.22, and 42.23).
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`B. The Petition does not name all real parties-in-interest.
`1. Legal Standard
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`A petition for inter partes review “may be considered only if . . . the petition
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`identifies all real parties in interest. 35 U.S.C. § 312(a) (emphasis added). This
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`statutory requirement is a threshold issue on which Petitioner has the burden of
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`persuasion. See Reflectix, Inc. v. Promethean Insulation Tech. LLC, IPR2015-00039,
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`Paper 18 at 8 (2015); Zerto, Inc. v. EMC Corp., IPR2014-01254, Paper 35 at 6–7
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`(2015).
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`A real party in interest is a “party that desires review of the patent” or “at
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`whose behest the petition has been filed.” Office Patent Trial Practice Guide, 77
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`Fed. Reg. 48,756, 48,759 (Aug. 14, 2012) (“Trial Practice Guide”). Factors to
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`consider in deciding whether a nonparty is a real party-in-interest include the
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`nonparty’s “relationship with the petitioner” and “its relationship to the petition
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`itself, including the nature and/or degree of involvement in the filing; and the
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`nature of the entity filing the petition.” Id. at 48,759–60.
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`A common focus of the inquiry is whether the nonparty exercised or could
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`have exercised control over a party’s participation in the proceeding. Id. at 48,759
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`(citing Taylor v. Sturgell, 553 U.S. 880, 895 (2008)). The concept of control
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`generally means that “the nonparty has the actual measure of control or
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`opportunity to control that might reasonably be expected between two formal
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`coparties.” Id. (citation omitted). “The nonparty’s participation may be overt or
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`covert, and the evidence may be direct or circumstantial—so long as the evidence
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`as a whole shows that the nonparty possessed effective control over a party’s
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`conduct of the [proceeding] as measured from a practical, as opposed to a purely
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`theoretical standpoint.” Gonzalez v. Banco Central Corp., 27 F.3d 751, 759 (1st Cir.
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`1994).
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`“[T]here is no bright-line test,” however, “for determining the necessary
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`quantity or degree of participation to qualify as a ‘real [party-in-interest]’ . . . based
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`on the control concept.” Trial Practice Guide at 48,759 (citing Gonzalez, 27 F.3d at
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`759). “[A] party that funds and directs and controls” a petition or proceeding
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`– 13 –
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`constitutes a real party-in-interest, “[b]ut whether something less than complete
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`funding and control” is sufficient depends on the facts. Id. at 48,760.
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`2. D-Link Corporation is an unnamed real party-in-interest.
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`Petitioner D-Link Systems, Inc.’s parent company is D-Link Corporation, a
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`publicly held company organized under the laws of the Republic of China.17 D-Link
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`Corporation owns a 97.76% controlling interest in Petitioner,18 and it includes
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`Petitioner as a Consolidated Company in its consolidated financial statements, as
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`required by the Criteria Governing the Preparation of Affiliation Reports,
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`Consolidated Business Reports and Consolidated Financial Statements of Affiliated
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`Enterprises.19
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`D-Link Corporation controls Petitioner’s patent litigation. In this regard, D-
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`Link Corporation is in the business of designing and manufacturing networking
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`17 See D-Link Corporation’s Annual Report 2014, Notes to the consolidated
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`financial statements (Ex. 2038 at page 23 of the .pdf).
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`18 See D-Link Corporation’s Annual Report 2014, Notes to the consolidated
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`financial statements (Ex. 2038 at page 27 of the .pdf).
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`19 See D-Link Corporation’s Annual Report 2014, Representation Letter (Ex.
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`2038 at page 14 of the .pdf).
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`– 14 –
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`equipment.20 Petitioner’s business is limited to marketing and after-sales service of
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`D-Link Corporation’s products.21 Thus, when Petitioner is sued for patent
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`infringement, D-Link Corporation’s products are at issue, and D-Link Corporation
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`has a direct interest in resolving the litigation. In fact, D-Link Corporation has a
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`consistent and regular policy of controlling patent-infringement suits brought
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`against Petitioner.
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`D-Link Corporation’s 2013 and 2014 Annual Reports, for example, list
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`numerous lawsuits asserted against it and its subsidiaries, and unequivocally state
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`that D-Link Corporation controls the litigation in each