`________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`________________
`
`CAVIUM, INC.,
`Petitioner,
`
`v.
`
`ALACRITECH, INC.,
`Patent Owner
`________________
`
`Case IPR2017-01707
`U.S. Patent No. 7,673,072
`________________
`
`PATENT OWNER’S PRELIMINARY RESPONSE
`PURSUANT TO 35 U.S.C. § 313 AND 37 C.F.R. § 42.107
`
`06973-00001/9639138.1
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` Case No. IPR2017-01707
`U.S. Patent No. 7,673,072
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`TABLE OF CONTENTS
`
`Page
`
`I.
`II.
`
`B.
`
`V.
`
`INTRODUCTION...........................................................................................1
`OVERVIEW OF THE ’072 PATENT ............................................................3
`A.
`The ’072 Patent Specification...............................................................3
`B.
`The ’072 Patent Claims.........................................................................4
`III. OVERVIEW OF THE ASSERTED PRIOR ART..........................................7
`A.
`U.S. Patent No. 5,768,618 to Erickson et al. (“Erickson”)...................7
`B.
`Andrew S. Tanenbaum, Computer Networks, 3rd ed.
`(1996) (“Tanenbaum”)..........................................................................9
`IV. CLAIM CONSTRUCTION ..........................................................................10
`A.
`This Petition Should Be Denied Because Petitioner
`Alleges Certain Claim Terms Are Indefinite......................................10
`Petitioner’s Proposed Terms for Construction Do Not
`Affect Alacritech’s Non-Obviousness Argument in This
`Preliminary Response..........................................................................11
`THE BOARD SHOULD DENY THE PETITION BECAUSE
`IT FAILS TO DISCLOSE ALL REAL PARTIES IN
`INTEREST ....................................................................................................12
`A.
`The Relationship Between Cavium and QLogic is
`Sufficiently Close................................................................................13
`Cavium Effectively Controls QLogic .................................................14
`Cavium Effectively Controls Dell.......................................................16
`Dell Desires Review of the ’072 Patent..............................................17
`Intel Has Effective Choice as to the Legal Theories and
`Proofs of Dell and Cavium..................................................................18
`Finding QLogic, Dell, and Intel Are Real Parties in
`Interest Is Consistent with Legislative Intent......................................19
`THE BOARD SHOULD DECLINE INSTITUTION UNDER
`35 U.S.C. § 325(D) BECAUSE ALL THE PRIOR ART HAS
`ALREADY BEEN CONSIDERED BY THE OFFICE................................21
`
`B.
`C.
`D.
`E.
`
`F.
`
`VI.
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`B.
`
`C.
`
`VII. THERE IS NO REASONABLE LIKELIHOOD THAT THE
`PETITIONER WILL PREVAIL UNDER GROUND 1 (THE
`ONLY GROUND).........................................................................................22
`A.
`There Is No Motivation to Combine Erickson and
`Tanenbaum..........................................................................................22
`Tanenbaum Fails to Disclose and Teaches Away [1.4]
`[9.4] or [15.4] “Dividing, by the Interface Device, the
`Data into Segments”............................................................................23
`Erickson Fails to Disclose [1.4] [9.4] or [15.4] “dividing,
`by the interface device, the data into segments”.................................26
`1.
`Erickson does not disclose any interface device
`that is capable of dividing the data into segments....................26
`Petitioner’s reliance on its expert’s hindsight
`modifications of Erickson is baseless.......................................27
`VIII. ALACRITECH RESERVES ITS RIGHTS UNDER THE
`PENDING OIL STATES CASE AT THE UNITED STATES
`SUPREME COURT ......................................................................................30
`IX. CONCLUSION .............................................................................................30
`
`2.
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`TABLE OF AUTHORITIES
`
`Page
`
`Cases
`Alacritech, Inc. v. CenturyLink, Inc.,
`2:16-cv-00693-JRG-RSP (E.D. Tex.)................................................... 1, 19
`Alacritech, Inc. v. Dell Inc.,
`2:16-cv-00695-RWS-RSP (E.D. Tex.) ................................................. 1, 19
`Alacritech, Inc. v. Wistron Corp.,
`2:16-cv-00692-JRG-RSP (E.D. Tex.)................................................... 1, 19
`Benson & Ford, Inc. v. Wanda Petroleum Co.,
`833 F.2d 1172 (5th Cir. 1987) ................................................................. 23
`Coalition for Affordable Drugs (ADROCA) LLC v. Acorda Therapeutics,
`Inc.,
`Case IPR2015-00817, Paper 12 (Aug. 24, 2015) ..................................... 14
`Dynamic Drinkware LLC v. Nat’l Graphics, Inc.,
`800 F.3d 1375 (Fed. Cir. 2015) ..................................................... 3, 13, 17
`FedEx Corp. v. Ronald A. Katz Technology Licensing, L.P.,
`Case CBM2015-00053, Paper 9 (Jun. 29, 2015)...................................... 16
`Hewlett-Packard Co. v. U.S. Philips Corp.,
`Case IPR2015-01505, Paper 16 (Jan. 19, 2016)................................... 3, 14
`Microsoft Corp. v. Biscotti,
`IPR2014-01457, Paper, No. 9 (Mar. 9, 2015) .......................................... 14
`Oil States Energy Servs. LLC v. Greene’s Energy Group, LLC,
`Case No. 16-712 (U.S. Jun. 12, 2017)..................................................... 31
`Teva Pharmaceuticals USA, Inc. v. Indivio UK Limited,
`Case IPR2016-00280, Paper 23 (Jun. 10, 2016)....................................... 14
`Statutory Authorities
`35 U.S.C. § 21 ................................................................................................ 1
`35 U.S.C. § 103(a) .................................................................................. 1, 2, 3
`35 U.S.C. § 312(a)(2).................................................................................... 18
`35 U.S.C. § 313............................................................................................... 1
`35 U.S.C. § 314............................................................................................... 4
`35 U.S.C. § 314(a) .................................................................................... 3, 32
`35 U.S.C. § 325(D) ................................................................................. 30, 31
`Rules and Regulations
`37 C.F.R. §42.8(b)(1) ................................................................................... 18
`37 CFR §42.24(a)......................................................................................... 28
`37 C.F.R. § 42.24(a)(i)............................................................................ 29, 30
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`37 CFR §42.24(A)(1) ................................................................................... 28
`37 CFR §42.24(a)(2) .................................................................................... 29
`37 C.F.R. §42.63........................................................................................... 16
`37 C.F.R. §42.107(a)...................................................................................... 1
`37 C.F.R. §42.108 .......................................................................................... 5
`Office Patent Trial Practice Guide, 77 Fed. Reg. 48756 (Aug. 14, 2012)
`............................................................................................................ passim
`H.R. Rept. No 112-98 (2011) (Judiciary Committee Report on H.R. 1249,
`June 1, 2011)............................................................................................. 27
`Legislative Materials
`157 Cong. Rec. S1034 (Mar. 1, 2011).......................................................... 27
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`PATENT OWNER’S LIST OF EXHIBITS
`
`Description
`
`Declaration of Paul Prucnal Regarding IPR2017-01707
`
`Intel’s Motion to Intervene, Case No. 2:16-cv-00693-
`JRG-RSP, Dkt. 71 (E.D. Tex., Oct. 31, 2016).
`
`Declaration of Karineh Khachatourian ISO Cavium’s
`Motion to Intervene, Case No. 2:16-cv-00693-JRG-RSP,
`Dkt. 109-3 (E.D. Tex., Jan. 13, 2017).
`
`Excerpts of Webster’s New World Dictionary of
`Computer Terms, Sixth Edition, 1997.
`
`Not used
`
`Not used
`
`Not used
`
`Not used
`
`Cavium’s Motion to Intervene, Case No. 2:16-cv-00693-
`JRG-RSP, Dkt. 109 (E.D. Tex., Oct. 31, 2016).
`
`Exhibit #
`
`Ex. 2001
`
`Ex. 2002
`
`Ex. 2003
`
`Ex. 2004
`
`Ex. 2005
`
`Ex. 2006
`
`Ex. 2007
`
`Ex. 2008
`
`Ex. 2009
`
`Ex. 2010
`
`Curriculum Vitae of Paul Prucnal
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`I.
`
`INTRODUCTION
`
`Pursuant to 35 U.S.C. § 313 and 37 C.F.R. § 42.107(a), Patent Owner
`
`Alacritech Inc. (“Alacritech”) submits this Preliminary Response to the Petition for
`
`Inter Partes Review (“the Petition”) filed in this matter.1 Petitioner Cavium Inc.
`
`(“Cavium”) seeks Inter Partes Review (“IPR”) of claims 1-21 of U.S. Patent No.
`
`7,673,072 (“the ’072 patent”), as allegedly being unpatentable under 35 U.S.C. §
`
`103(a). The ’072 patent is assigned to Alacritech and is the subject of co-pending
`
`litigation, Alacritech, Inc. v. CenturyLink, Inc., 2:16-cv-00693-JRG-RSP (E.D.
`
`Tex.); Alacritech, Inc. v. Wistron Corp., 2:16-cv-00692-JRG-RSP (E.D. Tex.); and
`
`Alacritech, Inc. v. Dell Inc., 2:16-cv-00695-RWS-RSP (E.D. Tex.), which were all
`
`consolidated for pre-trial purposes (“the Litigation”).
`
`The ’072 Patent discloses a system with “a specialized microprocessor
`
`designed for processing network communications, avoiding the delays and pitfalls
`
`of conventional software layer processing, such as repeated copying and interrupts
`
`to the CPU,” and “freeing the host CPU from most protocol processing and
`
`allowing improvements in other task.” Ex. 1001 at 5:44-47, 7:47-49. The ’072
`
`patent’s claims focus on the transmission side of the protocol processing. The host
`
`
`1 This submission is timely as it is being filed within three months following the
`mailing date of the Notice of Filing Date Accorded to Petition. The three-month
`date following the July 22, 2017 mailing date is Monday, Oct. 23, 2017 (Paper
`No. 6).
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`gives raw data to the INIC which it must carve into segments, add headers to the
`
`data, perform checksums on the segment, and then send it out. As explained in
`
`more detail below, by relieving the host CPU of frequent and debilitating
`
`interrupts, the claimed invention provides enhanced network and system
`
`performance, faster data throughput, increased system stability, and an overall
`
`better user experience.
`
`In its Petition, Cavium asserts that the ’072 patent is invalid on the ground
`
`that claims 1-21 of the ’072 patent are obvious over U.S. Patent No. 5,768,618 to
`
`Erickson (“Erickson”) (Ex. 1005) and Computer Networks, A. Tanenbaum, 3rd ed.
`
`(1996) (“Tanenbaum”) (Ex. 1006), two references that were already considered by
`
`the Office during the prosecution of the ’072 patent. The Board should not second
`
`guess the opinion of the original examiner and exercise its discretion not to
`
`institute this Petition on this basis alone. As set forth below, Petitioner has not
`
`established that any references disclose “dividing, by the interface device, the data
`
`into segments” as recited in the challenged independent claims of the ’072 patent.
`
`The Board should deny institution of the Petition also because Petitioner has
`
`failed to identify all real parties in interest as required by 35 U.S.C. § 312(a)(2) and
`
`37 CFR § 42.8(b)(1). At the very least, the Board should allow Alacritech to seek
`
`early discovery on this issue. Further, the Petitioner asserts that the challenged
`
`claims (claims 1-21) are indefinite in scope. Without ascertaining proper claim
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`scope, the Board cannot conduct a necessary factual inquiry for determining
`
`obviousness.
`
`For at least these reasons, the Board should not institute this IPR. See 35
`
`U.S.C. § 314; 37 C.F.R. § 42.108.
`
`II. OVERVIEW OF THE ’072 PATENT
`
`A.
`
`The ’072 Patent Specification
`
`The ’072 Patent discloses a system with “a specialized microprocessor
`
`designed for processing network communications, avoiding the delays and pitfalls
`
`of conventional software layer processing, such as repeated copying and interrupts
`
`to the CPU,” and “freeing the host CPU from most protocol processing and
`
`allowing improvements in other task.” Ex. 1001 at 5:44-47, 7:47-49.
`
`The ’072 patent’s claims focus on the transmission side of the protocol
`
`processing. See id. at 97:30-31 (“to form transmit packets”). Fig. 24 of the ’072
`
`patent depicts a receiving embodiment with a specialized Intelligent Network
`
`Interface Card (INIC) providing a fast path for protocol processing. Id. at Fig. 24.
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`“The transmit case works in much the same fashion . . . In fast-path mode,
`
`the host gives raw data to the INIC which it must carve into MSS sized segments,
`
`add headers to the data, perform checksums on the segment, and then send it out on
`
`the drive.” Id. at 38:55-61 (emphasis added).
`
`This “carving” process conducted by the INIC is reflected in Claim 1 as well
`
`as all other independent claims, where it recites “dividing, by the interface device,
`
`the data into segments.” Id. at 97:26. (emphasis added). As analyzed below, this
`
`“dividing” step conducted by “the interface device” is not disclosed by either of the
`
`cited references or their combination.
`
`B.
`
`The ’072 Patent Claims
`
`The ’072 Patent includes 21 claims. All 21 claims are challenged in the
`
`Petition. Claims 1, 9, and 15 are the independent claims and each recites
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`“dividing, by the interface device, the data into segments.” Claims 2-8, 10-14, and
`
`16-21 depend on the independent claims. Independent claims 1, 9, and 15 are
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`reproduced below:
`
`Claim 1. A method comprising:
`
`establishing, at a host computer, a transport layer connection,
`including creating a context
`that
`includes protocol header
`information for the connection;
`
`transferring the protocol header information to an interface device;
`
`transferring data from the network host to the interface device, after
`transferring the protocol header information to the interface device;
`
`dividing, by the interface device, the data into segments;
`
`creating headers for the segments, by the interface device, from a
`template header containing the protocol header information; and
`prepending the headers to the segments to form transmit packets.
`
`Claim 9. A method comprising:
`
`creating, at a computer, a context including protocol information and
`status information for a network connection, the protocol information
`providing a template header for the network connection;
`
`transferring the protocol information and status information to an
`interface device;
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`transferring data from the computer to the interface device, after
`transferring the protocol information and status information to the
`interface device;
`
`dividing, by the interface device, the data into segments;
`
`creating headers for the segments, by the interface device, from the
`template header;
`
`prepending the headers to the segments to form packets; and
`
`transmitting the packets on a network.
`
`Claim 15. A method comprising:
`
`establishing, at a computer, a Transmission Control Protocol (TCP)
`connection corresponding
`to a context
`that
`includes status
`information and Internet Protocol (IP) addresses and TCP ports for
`the connection;
`
`transferring the context to an interface device;
`
`transferring data from the network host to the interface device;
`
`dividing, by the interface device, the data into segments;
`
`creating headers for the segments, by the interface device, from a
`template header that includes the IP addresses and TCP ports; and
`
`prepending the headers to the segments to form transmit packets.
`
`Since the cited references, alone or in combination with each other, fail to
`
`disclose the element “dividing, by the interface device, the data into segments,”
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`which is present in all the independent claims, this Petition should not be instituted
`
`pursuant to 35 U.S.C. § 314(a).
`
`III. OVERVIEW OF THE ASSERTED PRIOR ART
`
`A.
`
`U.S. Patent No. 5,768,618 to Erickson et al. (“Erickson”)
`
`Erickson appears on the face of the ’072 patent under “References Cited”
`
`and was initialed by the Examiner in an Information Disclosure Statement (IDS)
`
`dated October 26, 2009. Ex. 1002.303; see also Ex. 1001.002. Erickson was
`
`therefore already consider by the Examiner during the prosecution of the ’072
`
`patent, which was found to be allowable over Erickson
`
`Erickson “provides a capability for multiple user processes in a single
`
`computing node to simultaneously share direct access to an I/O device without the
`
`intervention of the operating system for each data transfer as it occurs.” Ex. 1005,
`
`2:54-56. Such intervention is caused because “[p]rogramming an input/output
`
`(I/O) device typically involves a user software process making a call to the
`
`operating system, [which] involves a context switch that swaps information in
`
`system registers and memory in order to process incoming data.” Id., 2:43-47.
`
`Instead of adding another specialized microprocessor, Erickson solves this
`
`problem by “mapping a small portion of the memory of the I/O device directly into
`
`the virtual address space of the user process.” Id., 2:63-66. This solution is further
`
`described in Erickson Fig. 2 shown below.
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`Erickson “maps a portion of memory 206, physically located on the I/O
`
`device adapter into a device driver’s address space 208. [Erickson] also maps sub-
`
`portions. e.g., pages, 210, 212. of the I/O device adapter’s memory 206 into the
`
`address spaces for one or more user processes 202, 204, thereby allowing the user
`
`processes 202, 204 to directly program the I/O device adapter without the overhead
`
`of the operating system, including context switches.” Id., 3:48-56. In other words,
`
`the user process is able to access the I/O physical memory just as it would access
`
`the system working memory, without needing to interrupt the operating system.
`
`The I/O device driver running in the operating system kernel can also use the same
`
`I/O physical memory as its RAM space. Since both the operating system kernel
`
`and the user process have direct access to the I/O physical memory through the
`
`virtual memory, the I/O process will eliminate calls to the operating system and the
`
`associated context switches on a per I/O basis, and will also reduce the number of
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`intermediate memory-to-memory copies generated when routing I/O data. See Ex.
`
`1005 at 3:4-5 and 8-9.
`
`However, the Erickson solution is about a design of memory system,
`
`especially how to share physical memory on an I/O device among the user
`
`processes and the operating system through virtual memory. It does not disclose
`
`any interface device that is capable of dividing the data into segments.
`
`B.
`
`Andrew S. Tanenbaum, Computer Networks, 3rd ed. (1996)
`(“Tanenbaum”)
`
`Tanenbaum also appears on the face of the ’072 patent under “References
`
`Cited” and was initialed by the Examiner in an Information Disclosure Statement
`
`(IDS) dated October 26, 2009. Ex. 1002.312; see also Ex. 1001.004. It is a
`
`textbook with more than 800 pages. Petitioner cited only a few pages in its
`
`Petition, where Tanenbaum mentions a “fast path” processing for TCP. Ex. 1006
`
`at 584. This fast path processing is introduced to improve the network
`
`performance. Id. at 583. However, this proposal is fundamentally different from
`
`the ’072 patent in that it is a software proposal, without altering the location where
`
`any of the processing occurs (e.g., on the host or on the interface device) and
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`particularly without disclosing an interface device capable of dividing the data into
`
`segments.
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`Tanenbaum emphasizes the role played by software in improving network
`
`performance. “The software and operating system are often more important than
`
`the routers and interface boards.” Ex. 1006 at 579. In the section cited by the
`
`Petitioner, the author states that “[t]he moral of the story above is that the main
`
`obstacle to fast networking is protocol software. In this section we will look at
`
`some ways to speed up this software.” Ex. 1006 at 583 (emphasis added). The
`
`Fast path processing disclosed by Tanenbaum is one way of designing the
`
`software; it does not introduce any interface device that divides the data into
`
`segments.
`
`IV. CLAIM CONSTRUCTION
`
`A.
`
`This Petition Should Be Denied Because Petitioner Alleges
`Certain Claim Terms Are Indefinite
`
`Petitioner expressly contends that the limitations “context” appearing in all
`
`independent claims and “status information” in independent claims 9 and 15 must
`
`be construed for this Petition and are indefinite. See Petition at 25-26 (“Petitioner
`
`respectfully submits that the following terms shall be construed for this IPR . . .
`
`Petitioner contends that ‘context’ is indefinite as used in the 072 Patent claims . . .
`
`Petitioner has taken the position that ‘status information’ as used in the 072 Patent
`
`is indefinite.”). This contention, without more, should end the Board’s inquiry into
`
`all independent claims and their dependent claims.
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`“If [the Board’s] unpatentability analysis requires ‘considerable speculation
`
`as to the meaning and assumptions as to the scope’s of the claims, the differences
`
`between the claimed invention and the prior art cannot be ascertained.” ams AG v.
`
`511 Innovations, Inc., Case IPR2016-01788, Paper No. 15 at 6 (PTAB Mar. 15,
`
`2017) (quoting In re Steele, 305 F.2d 859, 862 (CCPA 1962)). “In other words,
`
`without ascertaining proper claim scope,” the Board “cannot conduct a necessary
`
`factual inquiry for determining obviousness—ascertaining differences between the
`
`claimed subject matter and the prior art.” Id. (quotation marks and citations
`
`omitted). Where, as here, a Petitioner’s own submission asserts that challenged
`
`claims (claims 1-21) are indefinite in scope, the Board cannot institute an
`
`obviousness trial against those claims. See id. at 11-12 (denying institution on all
`
`claims based on indefiniteness in independent claim). The Board should therefore
`
`deny institution of this Petition as to claims 1-21 on this basis alone.
`
`B.
`
`Petitioner’s Proposed Terms for Construction Do Not Affect
`Alacritech’s Non-Obviousness Argument in This Preliminary
`Response
`
`The two terms proposed by Petitioner for construction, “context for
`
`communication” and “prepend,” do not otherwise affect Alacritech’s non-
`
`obviousness argument in this preliminary response. Therefore, it is unnecessary
`
`for Alacritech to address them for purpose of this preliminary response.
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`V.
`
`THE BOARD SHOULD DENY THE PETITION BECAUSE IT FAILS
`TO DISCLOSE ALL REAL PARTIES IN INTEREST
`
`A requirement of a petition includes identifying “all real parties in interest.”
`
`35 U.S.C. § 312(a)(2).2 The Board should deny institution of this IPR because the
`
`Petition fails to identify all real parties in interest as required by 35 U.S.C. §
`
`312(a)(2) and 37 CFR § 42.8(b)(1).
`
`The Petition identifies only one real party in interest: Cavium.3 In doing so,
`
`the Petitioner at least fails to identify at least QLogic Corporation (“QLogic”)—a
`
`subsidiary of Cavium being a supplier of defendant Dell Inc. (“Dell”) in
`
`Alacritech’s patent infringement lawsuit over the ’072 Patent.4 Cavium also failed
`
`
`2 See also IPR2014-00689, Paper No. 22 (Aug. 12, 2014) (holding that failing to
`
`list a real party in interest can result in the petition to be considered “an incomplete
`
`petition” under Rule 42.106(b), not entitled to receive a filing date).
`
`3 See Petition at 2 (“Petitioner, Cavium, Inc., is the real-party-in-interest. No other
`
`parties exercised or could have exercised control over this petition; no other parties
`
`funded or directed this Petition.”).
`
`4 The co-pending district court cases, Alacritech v. CenturyLink, Alacritech v.
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`Wistron, and Alacritech v. Dell, were filed on June 30, 2106, and consolidated for
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`pre-trial purposes. In October 2016, Intel filed a motion to intervene in the district
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`to disclose the district court defendant Dell, and another indemnifier Intel, the de
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`facto driver of this case.
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`A.
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`The Relationship Between Cavium and QLogic Is Sufficiently
`Close
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`“Privity is essentially a shorthand statement that collateral estoppel is to be
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`applied in a given case. . . . The concept refers to a relationship between the party
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`to be estopped and the unsuccessful party in the prior litigation which is
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`sufficiently close so as to justify application of the doctrine of collateral estoppel.”
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`Office Patent Trial Practice Guide, 77 Fed. Reg. at 48759.
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`Cavium is QLogic’s parent company and QLogic is Cavium’s wholly owned
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`subsidiary. As Cavium’s Motions to Intervene filed in district court makes it clear,
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`Cavium itself is not a supplier of Dell. Ex.0009.005. Instead, it is Cavium’s
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`wholly subsidiary QLogic that is Dell’s supplier. Id (“Cavium seeks to intervene
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`because some of Alacritech’s infringement allegations in the Complaint in this
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`action specifically accuse some Dell products of infringement based in part on
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`their use of QLogic network adapters, including, among others, QLogic 57840S-k
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`quad port 10GbE blade KR NDC”). There is no direct indemnification relationship
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`court case because Dell’s accused products used components supplied by Intel.
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`Ex. 2002 at 1.
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`between Cavium and Dell. The indemnification relationship is between QLogic
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`and Dell. Cavium was involved in this lawsuit only because QLogic is Cavium’s
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`wholly owned subsidiary. Ex.2009.005 (“Cavium’s interest in this litigation is
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`based on the involvement of its wholly-owned subsidiary, QLogic Corporation
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`(‘QLogic’).”).
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`Cavium admitted that it “has a substantial, direct financial interest in the
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`outcome of this litigation.” Ex.2009.005. Cavium also admitted that it “can offer
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`technical knowledge and expertise that its customer lacks, as the designer and
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`manufacturer of the QLogic technology targeted by Alacritech’s infringement
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`allegations. Moreover, issues litigated in this action may affect other Cavium
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`customers in the event that they are sued by Alacritech or its successors.” Ex.
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`2002.005. The intimate relationship between Cavium and QLogic creates privity
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`and makes QLogic a real party in interests.
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`B.
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`Cavium Effectively Controls QLogic
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`Cavium has direct control over QLogic, not only because QLogic is
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`Cavium’s wholly owned subsidiary, but also Cavium has made important decisions
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`on behalf of QLogic in this case.
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`For example, in Cavium’s motion to intervene, it laid out the history of the
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`patent infringement case. None of it ever mentions what QLogic did actively.
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`Quite opposite, QLogic only took a passive role during the litigation in receiving
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`an indemnification letter from Dell. Ex. 2002.005-.006. Since the beginning of
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`this litigation, it appears that all communications have been conducted between
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`Cavium and Dell directly. See Ex. 2009.007 (“Cavium contacted Alacritech in
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`early December . . . based on Cavium’s unavailability during the holidays . . .
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`Cavium’s potential intervention in the action has been discussed with Alacritech’s
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`counsel . . . Cavium attempted to avoid contested motion practice”).
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`Most importantly, Cavium made a key decision on behalf of QLogic, which
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`is to “propose as an alternative that the parties could avoid motion practice by
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`Alacritech dismissing the claims against Dell as to the QLogic products and then
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`filing a new complaint to assert those claims directly against QLogic.” Ex.
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`2002.003. In other words, Cavium has the power to waive QLogic’s objection and
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`offer it as a defendant as an exchange of dismissing Dell. The evidence of control
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`here is overwhelming. In IPR2014-01380, the Board found the petitioner General
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`Electric Company (“GE”) failed to disclose a real party interest, Oklahoma Gas &
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`Electric Company (“OG&E”), whom the petitioner had control over in a district
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`court case. Id. Here, for the same reason, Cavium also failed to disclose a real
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`party in interest, its subsidiary and direct supplier of Dell, QLogic, over which
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`Cavium fully controls.
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`C.
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`Cavium Effectively Controls Dell
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`“There are multiple factors relevant to the question of whether a non-party
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`may be recognized as a ‘real party in interest’ or ‘privy.’ A common consideration
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`is whether the non-party exercised or could have exercised control over a party’s
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`participation in a proceeding.” Office Patent Trial Practice Guide, 77 Fed. Reg. at
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`48759-60. “Absolute control, however, is not necessary. Instead, a nonparty will
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`be found to have control if it ‘has the actual measure of control or opportunity to
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`control that might reasonably be expected between two formal coparties.’
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`Moreover, actual control is not required; the opportunity to exert the appropriate
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`level of control is sufficient.” IPR2014-01380, Paper No. 34 at 8 (April 5, 2015)
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`(internal citations omitted).
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`In IPR2014-01380, the petitioner GE’s control over the district court
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`defendant was based on their agreement stating that “Petitioner would ‘provide a
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`full and unqualified defense to OG&E.’” Id.5 Cavium has a similar agreement
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`5 In IPR2014-01380, the petitioner GE argued that “only privity with respect to the
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`present inter partes review proceeding, not privity with respect to the [district
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`court] lawsuit, is relevant to the application of the § 315(b) bar,” but this was
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`expressly rejected by the Board. See IPR2014-01380, Paper No. 34 at 11 (“We do
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`with Dell. Cavium’s litigation in-house declares in the district court case that
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`“Dell has requested that Cavium indemnify, defend and hold it harmless from
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`Alacritech, Inc.'s (“Alacritech”) claims in this action that concern QLogic products,
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`based on an indemnity agreement relating to Dell's purchases of QLogic products. .
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`. . Based on the nature of the claims at issue in this suit, Cavium has agreed to
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`defend and partially indemnify Dell as to the claims against Dell products
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`incorporating Cavium/QLogic’s technology .” Ex. 2003 at 1 (emphasis added).
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`Indemnification is a factor favoring finding of privity. See IPR2014-01380, Paper
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`No. 34 at 7-8 (“indemnitors . . . assume control of litigation against the parties they
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`indemnify.”); see also Benson & Ford, Inc. v. Wanda Petroleum Co., 833 F.2d
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`1172, 1174 (5th Cir. 1987). Just as in IPR2014-01380, Cavium had control over
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`Dell through the indemnification agreement but failed to disclose Dell as a real
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`party in interests.
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`Dell Desires Review of the ’072 Patent
`D.
`A “real party in interest” is “the party that desires review of the patent.” See
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`Office Patent Trial Practice Guide, 77 Fed. Reg. at 48759; see also IPR2014-
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`00488, Paper No. 52 at