Trials@uspto.gov
`571-272-7822
`
`
` Paper 13
`
` Date Entered: April 27, 2017
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`I.M.L. SLU,
`Petitioner
`v.
`
`WAG ACQUISITION, LLC
`Patent Owner.
`____________
`
`Case IPR2016-01656
`Patent 8,122,141 B2
`Case IPR2016-01658
`Patent 8,364,839 B21
`____________
`
`
`
`TREVOR M. JEFFERSON, BRIAN J. McNAMARA, and
`PATRICK M. BOUCHER, Administrative Patent Judges.
`
`
`
`McNAMARA, Administrative Patent Judge.
`
`
`
`CONDUCT OF THE PROCEEDING
`37 C.F.R. § 42.5
`
`
`
`1 This Order is to be filed in each case. The parties are not authorized to use
`this style heading in any subsequent papers
`
`
`
`

`

`Case IPR2016-01656; IPR2016-01658
`Patent 8,122,141 B2; 8,364,839 B2
`
`
`Introduction
`On November 18, 2016, we conducted a telephone conference with counsel
`for I.M.L. SLU (“Petitioner”) and WAG Acquisition, LLC (“Patent Owner")
`concerning Patent Owner's request for authorization to file a Motion for Discovery
`of certain information related to whether Petitioner had identified all real parties-
`in-interest in this proceeding. According to Patent Owner, Petitioner failed to
`identify Coolvision, Ltd. (“Coolvision”) and Muly Litvak, alleged to be the
`majority owner of both Petitioner and Coolvision, as real parties-in-interest.
`During the teleconference, we understood that there was agreement as to
`production of some documents, i.e., a document identified as an “Operating
`Agreement,” but not others. Therefore, we ordered the parties to confer again and,
`if no agreement could be reached, we authorized Patent Owner to file its motion by
`November 30, 2016.
`Pursuant to our order, Patent Owner moves for the following discovery: (1)
`the ability to use 77 pages of documents previously produced under protective
`order restricting its use to litigation in the United States District Court for the
`District of New Jersey (“the 77 pages”), and (2) documents sufficient to show the
`chain of ownership of both Petitioner and Coolvision. Paper 7, Motion for
`Discovery (“Mot.”) 4, 7. Petitioner filed an Opposition to Patent Owner’s Motion
`on December 9, 2016. Paper 9, (“Opp.”). On December 12, 2016, Petitioner filed a
`Letter Concerning Petitioner’s Brief In Opposition To Patent Owner Motion For
`Discovery seeking to clarify statements in its Opposition concerning proof of
`
`
`
`2
`
`

`

`Case IPR2016-01656; IPR2016-01658
`Patent 8,122,141 B2; 8,364,839 B2
`
`service on Coolvision. Paper 10 (“Letter”).2 On February 27, 2017, we entered a
`Decision to Institute a trial. Paper 11.
`Confidentiality
`The cover page of Patent Owner’s Motion and Petitioner’s Opposition state
`“Filed Under Seal – References Information Subject To Protective Order.”
`Petitioner’s Letter contains no such designation, but was filed electronically as
`available to Board and Parties Only. Exhibits 2001 and 2002 that accompanied the
`Motion are English translations of a publically available news article and chart
`concerning the purported ownership of Petitioner, Sobnito Investments, and
`Coolvision by Muly Litvak. Ex. 2001, 2002. Exhibits 2001 and 2002 were not
`filed under seal and are available to the public.
`Neither Patent Owner nor Petitioner complied with our requirements for
`filing a Motion to Seal with a Proposed Protective Order. 37 C.F.R. § 42.54.
`Thus, there is no protective order currently in place in this proceeding. Petitioner
`contends that we should not condone Patent Owner’s violation of the District
`Court’s Protective Order by Patent Owner’s use of restricted pages 1–17 and 30–
`77 of the 77 pages. Opp. 5. Neither Patent Owner nor Petitioner filed a copy of
`any Protective Order that may have been entered by any U.S. District Court.
`Neither Patent Owner nor Petitioner filed a redacted Motion or Opposition that
`would permit us to identify what, if any, subject matter in the Motion and
`
`
`2 Citations herein are to papers in IPR2016-01656. In IPR2016-01658, Patent
`Owner’s Motion for Discovery (Paper 7) and Petitioner’s Opposition to Patent
`Owner’s Motion for Discovery (Paper 9) present the same arguments discussed in
`the similarly numbered papers for IPR2016-01656. However, Patent Owner’s
`Letter Concerning Petitioner’s Brief in In Opposition To Patent Owner Motion For
`Discovery filed in IPR2016-01656 was not filed in IPR2016-01658.
`3
`
`
`
`

`

`Case IPR2016-01656; IPR2016-01658
`Patent 8,122,141 B2; 8,364,839 B2
`
`Opposition the parties consider to be information that should not be available to the
`public. Neither party filed a copy of the restricted pages in this proceeding.
`The Protective Order filed in the District Court “allows Coolvision and IML
`to designate as confidential certain material information being produced or
`deposition testimony taken during limited personal jurisdiction discovery.” WAG
`Acquisition, LLC v. Sobonito Investments, Ltd. et al., Case No. 2:14-cv-1661
`(D.N.J.), Doc. 82 at 2 (Aug. 26, 2014) (“District Court Protective Order”).
`Paragraph 15 of the District Court Protective Order states that “No information that
`is in the public domain or which is already known by the receiving party through
`proper means or which is or becomes available to a party from a source other than
`the party asserting confidentiality, rightfully in possession of such information on a
`non-confidential basis, shall be deemed or considered to be Confidential material
`under this Protective Order.” Id. ¶ 15. The identities of Petitioner, Coolvision and
`Mr. Litvak are disclosed in the publicly available news articles in Exhibits 2001
`and 2002 and are not confidential. We do not consider the existence of the 77
`pages to be confidential information because Petitioner states that pages 18–29 of
`the 77 pages are unrestricted. Opp. 5. We are unable to identify any other
`information in the Motion and Opposition that could be considered confidential,
`and, as noted above, neither party has identified specific confidential information
`Therefore, we make this Order available to the public.
`Discussion
`In its Motion, Patent Owner states that during their meet and confer
`Petitioner initially consented to Patent Owner’s use of the 77 pages in this
`proceeding and to a stipulation as to the percentages of ownership of Coolvision
`and Petitioner by one individual (“the stipulated ownership percentages”) for
`purposes of addressing real party-in-interest and privity. Mot. 5. Patent Owner
`
`
`
`4
`
`

`

`Case IPR2016-01656; IPR2016-01658
`Patent 8,122,141 B2; 8,364,839 B2
`
`states that the 77 pages, includes the Operating Agreement and two asset purchase
`agreements that reflect the relationship between Coolvision and Petitioner. Id.
`Patent Owner also states the ability to use the 77 pages and the stipulated
`ownership percentages would satisfy its discovery requests. Id. However, Patent
`Owner reports that Petitioner conditioned use of the 77 pages and the stipulated
`ownership percentages on Patent Owner’s waiver of further fact discovery, a
`condition Patent Owner states is over-reaching and unacceptable. Id. at 6.
`We agree that Petitioner’s attempt to preclude follow-on discovery is over-
`reaching. However, to the extent that this is the remaining discovery dispute
`between the parties, it is irrelevant. The panel, not the parties, will determine
`whether additional discovery is warranted. To the extent that parties do not agree
`on additional discovery in proceedings before the Patent Trial and Appeal Board
`we are guided by the following principles (“the Garmin factors”) first articulated in
`Garmin Int’l., Inc. v. Cuozzo Speed Techs LLC, Case IPR2012-00001, slip op. 6–7
`(PTAB Mar. 3, 2015): (1) whether there are more than a mere possibility and a
`mere allegation that something useful might be found, (2) whether the discovery
`merely seeks early identification of an opponent’s litigation position, (3) whether
`the party requesting the discovery can obtain the information through other means,
`(4) whether the discovery requests and instructions are clear, and (5) whether the
`discovery requests are overly burdensome.
`In this case, the discovery requests are clear and do not impose an undue
`burden on Petitioner’s resources because they are drawn to information already
`produced in the case pending in the U.S. District Court. Petitioner does not argue
`that the 77 pages and documents sufficient to show the chain of ownership between
`Petitioner and Coolvision are available from any other source. To the extent that
`the chain of ownership request is satisfied by the stipulated ownership percentages,
`
`
`
`5
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`

`

`Case IPR2016-01656; IPR2016-01658
`Patent 8,122,141 B2; 8,364,839 B2
`
`only Petitioner can enter such a stipulation. Although Patent Owner’s discovery
`requests may be relevant to jurisdictional disputes in the courts, they are not sought
`in this proceeding for the purpose of discovering Petitioner’s litigation position.
`Jurisdiction is not at issue in this proceeding because Petitioner submitted itself to
`our jurisdiction and rules when it filed the Petition. Patent Owner’s discovery
`requests are directed at Petitioner’s compliance with our rules concerning naming
`each real party-in-interest.
`Thus our inquiry focuses on Patent Owner’s contention that there is a real
`possibility something useful will result from the discovery, because if Coolvision
`or Muly Litvak is an unnamed real-party-in- interest to this proceeding, the Petition
`may be barred under 35 U.S.C. § 315(b). Mot. 2. We do not address that
`penultimate issue at this stage of the proceeding—we decide only whether
`discovery is appropriate. Patent Owner notes that at least four factors under Taylor
`v. Sturgill, 553 U.S. 890 (2008) will play into a subsequent analysis of whether
`Coolvision and/or Muly Litvak is a real party-in-interest: (1) the existence of a
`pre-existing substantive relationship between a party and non-party, (2)
`representation in an action by someone with the same interests as the non-party, (3)
`the assumption of control over an action by the non-party, and (4) re-litigation
`through a proxy. Mot. 3. According to Patent Owner, the public information in
`the news articles in Exhibits 2001 and 2002 demonstrates the possibility of a real
`party-in-interest relationship between Petitioner and Coolvision and/or Muly
`Litvak and the requested discovery is needed to address these real party-in-interest
`factors.
`Petitioner contends that Exhibits 2001 and 2002 constitute salacious,
`unreliable, anonymously sourced, unsubstantiated hearsay and hearsay within
`hearsay. Opp. 4. Petitioner further states that Patent Owner falls far short of
`
`
`
`6
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`

`

`Case IPR2016-01656; IPR2016-01658
`Patent 8,122,141 B2; 8,364,839 B2
`
`setting forth a threshold amount of evidence tending to show that the discovery
`Patent Owner seeks factually supports its contention. Opp. 2, 4 (citing Zerto, Inc.
`v. EMC Corp., Case IPR2014-1254, slip op. at 4 (PTAB Nov. 25, 2014) (Paper
`15)).
`There is insufficient foundation for Exhibits 2001 and 2002 to qualify as
`admissible under the Federal Rules of Evidence. However, the issue is whether
`Exhibits 2001 and 2002 are sufficient to support Petitioner’s request for discovery
`into the existence of a real party-in-interest relationship. Although the Board takes
`a more restrictive approach to discovery that the district courts, we have not
`abandoned the principle that information need not be admissible in evidence to be
`discoverable. Petitioner waived service of process in the District Court on August
`24, 2015 and filed its Petition within one year, i.e., on August 22, 2016. The
`District Court complaint names Does 1–20, but at this time it appears that Muly
`Litvak is not a defendant in the District Court. Thus, the inquiry focuses on
`Coolvision. Mr. Litvak’s role may be relevant to the extent that he directs the
`activities and participation, if any, of Coolvision in this proceeding. Although
`Patent Owner has not laid a foundation for us to consider Exhibits 2001 and 2002
`as admissible under the Federal Rules of Evidence, Patent Owner is not engaged in
`mere speculation that something useful will be discovered. Patent Owner presents
`published information developed by a third party who appears to have conducted
`an investigation into the relationship between Petitioner, Coolvision, and Muly
`Litvak. The published information in this case supports Patent Owner’s request for
`further inquiry into whether the relationship, if any, between Petitioner, Coolvision
`and Muly Litvak renders Coolvision a real party-in-interest in this proceeding.
`Petitioner also argues that Patent Owner should not obtain the requested
`discovery because adding Mr. Litvak or Coolvision to the Petition as a real part-in-
`
`
`
`7
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`

`

`Case IPR2016-01656; IPR2016-01658
`Patent 8,122,141 B2; 8,364,839 B2
`
`interest would not infect Petitioner with a time bar prohibition. Opp. 2. The
`Petition would be time barred if either Petitioner or a real party-in-interest was
`served with a complaint alleging infringement more than 1 year before the filing
`date of the Petition. 35 U.S.C. § 315(b). Petitioner’s argument centers on its
`contention that, even if Coolvision is a real party-in-interest and is added to the
`Petition, a time bar would not be implicated because Coolvision has not been
`served with such a complaint. Opp. 3, Letter 1.
`In its Opposition, Petitioner argued that there was no evidence of service on
`Coolvision, Opp. 3. In its Letter, Petitioner acknowledged that Patent Owner filed
`in the District Court what Patent Owner asserts is proof of service on August 26,
`2014. Letter 1. On August 26, 2014, Patent Owner filed in the District Court a
`notice that Coolvision had been served in Israel on May 12, 2014, under the
`provisions of the Hague Convention. WAG Acquisition, LLC v. Sobonito
`Investments, Ltd. et al., Case No. 2:14-cv-1661 (D.N.J.), Doc. 20 (Aug. 26, 2014).
`Petitioner’s Letter clarifies that Petitioner disputes whether Patent Owner served
`Coolvision with a complaint for purposes of triggering the time bar under 35
`U.S.C. § 315(b). Letter 1. At this time, we make no determination whether
`Coolvision effectively was served more than a year before the filing date of the
`Petition, and we do not preclude discovery on this basis.
`We now turn to the question of the scope of discovery. We are troubled by
`Petitioner’s refusal to consent to Patent Owner’s use of the 77 pages and the
`stipulated percentages of ownership unless Patent Owner agrees not to seek follow-
`on discovery. Nevertheless, we cannot order Petitioner to produce information, if
`non-consensual production of that information would violate a protective order
`entered by a U.S. District Court. We can, however, on the issues before us apply a
`negative inference from Petitioner’s refusal to produce the information.
`
`
`
`8
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`

`

`Case IPR2016-01656; IPR2016-01658
`Patent 8,122,141 B2; 8,364,839 B2
`
`
`In addition, we can order Petitioner to produce evidence that is relevant to
`the question at hand, i.e., whether Coolvision is a real party-in-interest that
`Petitioner failed to name in the Petition. To that end, we order Petitioner to
`produce documents sufficient to show ownership and/or control of operations
`between Petitioner, Muly Litvak, and Coolvision, and documents sufficient to
`identify any role Muly Litvak, Coolvision or its personnel or owners may have
`played in (i) deciding to file the Petition, (ii) drafting, supervising, approving, or
`otherwise exerting control over the content of the Petition, and (iii) financing or
`paying for the Petition. Alternatively, the parties can reach agreement on a set of
`documents addressing these issues and report such agreement to the panel.
`Petitioner should produce the documents as ordered or the parties should notify us
`of any agreement concerning relevant document production not later than May 5,
`2017.
`In consideration of the above it is
`ORDERED that:
`Not later than May 5, 2017, Petitioner produce documents sufficient to show
`ownership and/or control of operations between Petitioner, Muly Litvak, and
`Coolvision, and documents sufficient to identify any role Muly Litvak, Coolvision,
`or its personnel or owners may have played in (i) deciding to file the Petition, (ii)
`drafting, supervising, approving, or otherwise exerting control over the content of
`the Petition, and (iii) financing or paying for the Petition. Alternatively the parties
`can file a notice that they have reached agreement concerning relevant document
`production.
`
`
`9
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`

`

`Case IPR2016-01656; IPR2016-01658
`Patent 8,122,141 B2; 8,364,839 B2
`
`PETITIONER
`David Yohannan
`Beth Jacob
`KELLEY DRYE & WARREN LLP
`dyohannan@kelleydrye.com
`bjacob@kelleydrye.com
`
`
`
`PATENT OWNER
`
`Ronald Abramson
`LEWIS BAACH PLLC
`ronald.abramson@lewisbaach.com
`
`Ernest Buff
`ERNEST D. BUFF & ASSOCIATES, LLC
`ebuff@edbuff.com
`
`
`
`
`
`
`10
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`