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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`MICROSOFT CORPORATION AND MICROSOFT MOBILE INC.,
`Petitioners,
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`v.
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`KONINKLIJKE PHILIPS N.V.,
`Patent Owner.
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`PTAB Case No.: IPR2017-01766
`Patent No. RE44,913
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`PETITIONERS’ OPPOSITION TO MOTION FOR ADDITIONAL
`DISCOVERY UNDER 37 C.F.R § 42.51(b)(2)
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`PTAB Case No. IPR2017-01766, Patent No. RE44,913
`Petitioners’ Opposition to Motion for Additional Discovery
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`I.
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`INTRODUCTION
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`The Board’s case law is clear that motions for additional discovery will be
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`denied if based on speculation, rather than evidence showing that the discovery
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`would lead to something useful. Here, Philips wants to argue that Microsoft is a
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`real-party-in-interest (“RPI”) with a third party. But Philips’ requested discovery
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`is based on nothing more than speculation.
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`II. ARGUMENT
`A party seeking discovery beyond what is expressly permitted by the
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`Board’s rules must establish that the additional discovery is “necessary in the in-
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`terest of justice.” 35 U.S.C. § 316(a)(5); see also 37 C.F.R. § 42.51(b)(2). “Dis-
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`covery in an inter partes review proceeding is more limited than in district court
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`patent litigation, as Congress intended our proceedings to provide a more efficient
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`and cost-effective alternative to such litigation. Thus, we take a conservative ap-
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`proach to granting additional discovery.” Dr. Reddy’s Labs., Ltd., v. Monosol Rx,
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`LLC, IPR2016-01111, slip op. at 3 (Sept. 1, 2016) (Paper 9).
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`The Board has identified five factors (the “Garmin factors”) to be considered
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`in determining whether additional discovery is in the interest of justice. See Gar-
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`min Int’l, Inc. v. Cuozzo Speed Techs. LLC, Case IPR2012-00001, Paper 26 at 6–7
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`(Mar. 5, 2013) (“Garmin”). The very first Garmin factor requires that “the re-
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`quester of information should already be in possession of a threshold amount of
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`-1-
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`PTAB Case No. IPR2017-01766, Patent No. RE44,913
`Petitioners’ Opposition to Motion for Additional Discovery
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`evidence or reasoning tending to show beyond speculation that something useful
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`will be uncovered,” where “‘useful’ means favorable in substantive value to a con-
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`tention of the party moving for discovery.” Garmin at 7 (emphasis added).
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`The Patent Office has specifically rejected the idea that “the discovery rules
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`should be expanded to permit the patent owner to investigate the petitioner’s com-
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`pliance with the identification of the real party-in-interest.” Final Rule, 77 Fed.
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`Reg. at 48,695 (Resp. to Cmt. 10). To show that its discovery requests are in the
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`interests of justice, Philips must therefore “provide evidence in its possession tend-
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`ing to show beyond speculation that a non-party exercised or could have exercised
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`control over a party’s participation in a proceeding”—a burden that “would not be
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`met by requests that amount to investigating Petitioner’s compliance” with the RPI
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`identification requirement. CaptionCall, LLC, v. Ultratec, Inc., IPR2015-00636,
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`slip op. at 5 (Feb. 23, 2015) (Paper 42) (emphasis added).
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`This is exactly what Philips is doing. By its own admission, Philips is inves-
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`tigating whether Microsoft has complied with the RPI requirement. E.g., Paper 12
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`(“Motion”) at 1 (“evidence may exist”), 8 (“documents and other things may exist”)
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`(emphases added). Philips has no evidence tending to show an RPI issue.
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`A.
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`Philips Has Not Shown that the Requested Discovery is In
`the Interest of Justice
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`Philips makes four arguments in support of its requested discovery: first, that
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`the lack of overlap among petitioners in the above-discussed actions suggests “co-
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`-2-
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`PTAB Case No. IPR2017-01766, Patent No. RE44,913
`Petitioners’ Opposition to Motion for Additional Discovery
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`ordination”; second, that Acer and ASUS are Microsoft customers; third, that Mi-
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`crosoft has previously referred to its indemnification practices; and fourth, that
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`HTC and Microsoft previously filed a joint petition on a different patent using
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`common counsel. None of these approaches Garmin’s high requirements.
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`1.
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`The Lack of Overlap Among Petitioners Does Not
`Show Beyond Speculation That Useful Information
`Will be Uncovered By Philips’ Requested Discovery.
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`Philips argues that “the fact that Google/Acer/ASUS also pursued challenges
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`against 9 of the asserted patents, with no overlap in patents being challenged …
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`suggests a level of coordination in which [the various parties] divided responsibili-
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`ties.” Motion at 9; see also id. at 2-3. This is the very type of speculation prohib-
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`ited by Garmin. There is nothing suspect or untoward about the parties to the IPR
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`petitions involving Philips’ asserted patents. Instead, the order in which parties
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`filed IPRs follows logically from the chronology of the district court litigations.
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`In December 2015, Philips filed a series of patent infringement actions in
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`district court, asserting some or all of 11 patents against seven defendant groups:
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`HTC, Acer, ASUS, Southern Telecom, Visual Land, Double Power, and Yifang.
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`Originally, the cases involved allegations relating to Google’s Android operating
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`system. In April 2016, however, Philips amended its complaints in five of the ac-
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`tions—those against Acer, ASUS, Visual Land, Double Power, and Yifang—to
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`reference products that ran Microsoft’s Windows operating system. On August 26,
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`-3-
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`PTAB Case No. IPR2017-01766, Patent No. RE44,913
`Petitioners’ Opposition to Motion for Additional Discovery
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`2016, Philips served infringement contentions that specifically identified Windows
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`as providing the allegedly infringing functionality for certain patents in those five
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`actions. See Ex. 2005 at 3, ¶ 11, Ex. 2007 at 3, ¶ 11. Microsoft moved to inter-
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`vene in the five actions on November 4, 2016, on the grounds that Philips’ in-
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`fringement allegations for 5 of the asserted patents (including the ’913 patent) were
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`“based at least in part upon the inclusion of Microsoft’s Windows software” in cer-
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`tain accused products. Ex. 2004 at 4; Ex. 2006 at 4. On December 9, 2016, Philips
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`filed counterclaims asserting that Microsoft infringed 9 of the asserted patents.
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`On December 5, 2016—just four weeks after Microsoft had intervened, and
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`before Philips had filed any infringement claims against Microsoft—Google filed 8
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`IPR petitions against various patents asserted in the litigations. A few days later,
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`Google filed petitions against another two asserted patents. See Motion at 2-3. Af-
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`ter a two-month lapse, on February 10, 2017, Microsoft and HTC filed a petition
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`on another asserted patent. Id. HTC separately filed petitions challenging two
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`other asserted patents (of which one is not asserted against Microsoft, and the other
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`was asserted first in Philips’ counterclaims, not in Microsoft’s complaint-in-
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`intervention). Id. In July 2017, after institution of two of Google’s IPRs, Mi-
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`crosoft moved to join the earlier proceedings (including in this case).
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`Thus, the Android allegations had been in place for nearly a year before Mi-
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`crosoft became involved in the litigations involving Philips’ patents. Google filed
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`-4-
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`PTAB Case No. IPR2017-01766, Patent No. RE44,913
`Petitioners’ Opposition to Motion for Additional Discovery
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`its petitions barely one month after Microsoft moved to intervene—before Mi-
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`crosoft even knew what patents Philips would assert against Windows. With time,
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`it became apparent that no additional petitions were forthcoming, so Microsoft
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`worked with HTC to prepare and file a separate petition. And after the Board insti-
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`tuted trial on certain of Google’s petitions, Microsoft moved for joinder in this case
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`and in one other, as 35 U.S.C. § 315(c) and 37 C.F.R. § 42.22 allow it to do.
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`That different parties have filed IPRs on different patents shows only that
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`Microsoft, a party added almost one year after Philips filed suit, chose to focus its
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`efforts on patents that had not yet been challenged. Even if there had been some
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`“coordination” as to which parties would handle which patents for IPR purposes—
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`which Philips has provided no evidence of, and of which Microsoft is unaware—
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`Philips cites no authority showing that this hypothetical would rise to a right or op-
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`portunity to control this proceeding sufficient to create a RPI issue. E.g., 77 Fed.
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`Reg. at 48,759 (“control generally means that it should be enough that the nonparty
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`has the actual measure of control or opportunity to control that might reasonably be
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`expected between two formal coparties”) (quotation omitted). The lack of overlap
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`between IPR petitioners does not tend to show beyond speculation that Philips’ re-
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`quested discovery will uncover something useful relating to RPI issues.
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`2. Microsoft’s Customer Relationships Do Not Show
`that Useful Information Will Be Uncovered.
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`Philips also argues that Microsoft “predicated its intervention in the litiga-
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`-5-
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`PTAB Case No. IPR2017-01766, Patent No. RE44,913
`Petitioners’ Opposition to Motion for Additional Discovery
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`tions, in part, on Acer and ASUS being customers that use the Microsoft OS.” Mo-
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`tion at 4; id. at 7-8. More accurately, Microsoft intervened because Philips’ in-
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`fringement allegations against five defendants were based on Windows software on
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`the accused products. Ex. 2004 at 4. But the fact that Acer and ASUS (as well as
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`Visual Land, Double Power, and Yifang) are Windows customers is both undisput-
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`ed and irrelevant. Philips needs no discovery to ascertain something Microsoft has
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`acknowledged. E.g., Ex. 2004 at 3. And the Board has repeatedly recognized that
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`a customer relationship is distinct from a RPI relationship: a third party’s customer
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`status has nothing to do with whether the third party can control this IPR proceed-
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`ing. E.g., CQG, Inc. v. Chart Trading Development, LLC, CBM2016-00046, slip
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`op. at 21 (Sept. 13, 216) (Paper 13) (“Patent Owner has failed to present any per-
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`suasive evidence that the customer defendants have any influence or control over
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`Petitioner’s actions in this proceeding”); Eastman Kodak Co. v. CTP Innovations,
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`LLC, IPR2014-00790, slip op. at 11 (Nov. 28, 2014) (Paper 9) (“Petitioner’s filing
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`of the present petition ‘to support [its] customers’ does not, by itself, mean that its
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`customers exercise control over Petitioner’s actions in this proceeding.”).
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`Philips protests that Microsoft has not explained “why Acer and ASUS are
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`not RPIs in later IPRs,” even though they were identified as a basis for intervening.
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`Motion at 2. Quite simply, Microsoft intervened because Philips sued Acer and
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`ASUS (as well as three other defendants) based on Microsoft’s software—and Mi-
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`-6-
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`PTAB Case No. IPR2017-01766, Patent No. RE44,913
`Petitioners’ Opposition to Motion for Additional Discovery
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`crosoft did not name Acer and ASUS as RPIs because they were not involved in
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`this Petition in any way. Philips has pointed to no evidence tending to show that
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`Microsoft’s customer relationship with Acer and ASUS bears on a RPI issue.
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`3.
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`Philips Has Not Cited Evidence Showing That
`Indemnification Agreements Even Exist, Let Alone
`That They Relate to This Proceeding.
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`Philips argues that “Microsoft has touted its indemnification of OEMs in IP
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`matters,” pointing to two generic press releases from 2005 and 2006. Motion at 4
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`(citing Exs. 2009, 2010); id. at 6, 7. Philips does not identify evidence of any spe-
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`cific agreements at all, let alone agreements that would be useful in demonstrating
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`that third parties direct, control, or fund this proceeding. E.g., AMX, LLC, v. Chri-
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`mar Sys., Inc., IPR2016-00572, slip op. at 5-6 (May 19, 2016) (Paper 15) (denying
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`request for additional evidence in part because patent owner “d[id] not identify any
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`evidence suggesting that [supposed] indemnification agreements would be useful
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`in demonstrating that the third parties direct, control, or fund these proceedings”).
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`And even if Philips had cited evidence that relevant indemnification agreements
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`exist (which it has not), this alone would not be sufficient to indicate control over
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`the proceeding. E.g., Wavemarket Inc. v. Locationet Sys. Ltd., IPR2014-00199,
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`slip op. 34 at 6 (PTAB Aug. 11, 2014) (Paper 34) (indemnification obligation is
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`not sufficient to demonstrate beyond speculation that non-party funded, controlled,
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`or had ability to exercise control over IPR proceedings).
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`-7-
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`PTAB Case No. IPR2017-01766, Patent No. RE44,913
`Petitioners’ Opposition to Motion for Additional Discovery
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`Further, although Philips claims that its IPR counsel have been precluded
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`from reviewing documents relevant to this issue (Motion at 8-9), this statement is,
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`to be generous, incomplete: Microsoft agreed to allow Philips’ IPR counsel to re-
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`view its documents, so long as appropriate confidentiality protections were in place.
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`Ex. 1030 at 2 (“In the interest of facilitating the PTAB’s full review of Philips’ re-
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`quest for discovery, however, we are willing to agree to a limited use of these doc-
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`uments in the IPRs, so long as they are not used for any other extra-litigation pur-
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`pose.”). The fact that Philips has not submitted any Microsoft documents support-
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`ing its request—indemnification agreements or otherwise—confirms that it has no
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`evidence to support the present motion.
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`4. HTC and Microsoft’s IPR Petition On a Different
`Patent Does Not Show that Useful Information Will
`Be Uncovered.
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`Philips argues that HTC and Microsoft “petition[ed] jointly for IPR … of [a
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`different] one of the asserted patents” and did so “using the same law firm that rep-
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`resents Microsoft in the present petition.” Motion at 8. The Board has repeatedly
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`recognized that because common representation does not indicate control sufficient
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`to establish an RPI relationship, common representation is not a basis for RPI dis-
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`covery. E.g., AMX at 6 (“We are not persuaded, though, that common representa-
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`tion adds anything beyond speculation that something useful will be uncovered re-
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`garding additional real parties in interest in these proceedings. There are many
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`-8-
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`PTAB Case No. IPR2017-01766, Patent No. RE44,913
`Petitioners’ Opposition to Motion for Additional Discovery
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`reasons for different parties to retain the same counsel. … Such coordination does
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`not indicate control.”). And Philips points to no authority to suggest that collabo-
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`ration on a different IPR petition, relating to a different patent, suggests that HTC
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`and Microsoft are RPIs on this petition. To the contrary: where HTC and Mi-
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`crosoft worked together, in the other petition, Microsoft identified the relationship.
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`B.
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`Philips’ Overbroad Discovery Requests Violate the Final
`Garmin Factor.
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`Garmin’s fifth factor requires that any requested discovery “must not be
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`overly burdensome to answer … Requests should be sensible and responsibly tai-
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`lored according to a genuine need.” Garmin at 7. Philips seeks four requests for
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`production of information (“RFP”). First, Philips seeks agreements between Mi-
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`crosoft and Acer or ASUS that provide “indemnifications for and/or options to
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`control defenses” relating to devices containing Microsoft software. Ex. 2011 at 5
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`(RFP 1). The request is not limited to agreements that implicate this case or even
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`the related litigations. Philips also seeks information “related to any direct or indi-
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`rect cost sharing … related, directly or indirectly, to invalidity/unpatentability chal-
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`lenges.” Id. (RFP 2). Again, Philips’ request is not limited to information regard-
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`ing funding of the Petition in this action or to petitions before the Board generally
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`(of which there is none). Finally, Philips seeks general communications relating to
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`challenging validity of the asserted patents in the USPTO (id. (RFP 3)), which
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`again is not limited to communications regarding the drafting or funding of this Pe-
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`-9-
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`PTAB Case No. IPR2017-01766, Patent No. RE44,913
`Petitioners’ Opposition to Motion for Additional Discovery
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`tition. These requests are sweeping and, plainly, investigative. Philips cannot use
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`37 C.F.R. § 42.51(b)(2) as a fishing expedition. See Trial Practice Guide, 77 Fed.
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`Reg. at 48,760 (Response to Comment 10) (“Patent Owner’s discovery requests
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`suggest that Patent Owner is investigating Petitioner’s compliance with its identifi-
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`cation of the real parties-in-interest, a practice expressly rejected by the Office dur-
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`ing adoption of the AIA Rules.”).
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`Additionally, Philips seeks to depose a Microsoft witness about communica-
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`tions relating to challenging “asserted patents in the USPTO.” Ex. 2011 at 6. This
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`would almost certainly be one of Microsoft’s counsel, which would likely raise an
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`inordinate number of privilege issues without serving a necessary purpose. The
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`Board has recognized that requests for deposition are rarely “sensible and respon-
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`sibly tailored according to a genuine need” (Garmin at 7). E.g., 1964 Ears LLC v.
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`Jerry Harvey Audio Holdings, LLC, IPR2016-00494, slip op. at 10 (May 20, 2016)
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`(Paper 19) (denying motion for additional discovery where “Patent Owner fails to
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`explain why a deposition, rather than a few simple Interrogatories, is needed”).
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`III. CONCLUSION
`Philips has not demonstrated more than a mere possibility that something
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`useful will be discovered from its requested discovery and has therefore failed to
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`show that the discovery is “necessary in the interest of justice.” 35 U.S.C.
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`§ 316(a)(5). Microsoft respectfully requests that the Board deny Philips’ Motion.
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`-10-
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`PTAB Case No. IPR2017-01766, Patent No. RE44,913
`Petitioners’ Opposition to Motion for Additional Discovery
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`Respectfully submitted,
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`/Christina J. McCullough/
`Lead Counsel
`Christina J. McCullough
`Reg. No. 58,720
`Perkins Coie LLP
`1201 Third Avenue, Suite 4900
`Seattle, WA 98101-3099
`Phone: (206) 359-8000
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`Back-up Counsel
`Chad Campbell, pro hac vice
`2901 N. Central Avenue, Suite 2000
`Phoenix, AZ 85012-2788
`Phone: (602) 351-8000
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`Attorneys for Petitioners
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`Dated: November 8, 2017
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`-11-
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`PTAB Case No. IPR2017-01766, Patent No. RE44,913
`Petitioners’ Opposition to Motion for Additional Discovery
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that a true copy of the foregoing PETI-
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`TIONERS’ OPPOSITION TO MOTION FOR ADDITIONAL DISCOVERY was
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`served in its entirety this 8th day of November, 2017 by electronic mail on the Pa-
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`tent Owner via its attorneys of record:
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`FITZPATRICK, CELLA, HARPER & SCINTO
`Justin J. Oliver (Reg. No. 44,986)
`Daniel S. Glueck (Reg. No. 37,838)
` PhilipsIPR@fchs.com
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`Respectfully submitted,
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`/Christina J. McCullough/
`Lead Counsel
`Christina J. McCullough, Reg. No. 58,720
`Perkins Coie LLP
`1201 Third Avenue, Suite 4900
`Seattle, WA 98101-3099
`Phone: (206) 359-8000
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`Back-up Counsel
`
`Chad Campbell, pro hac vice
`Perkins Coie LLP
`2901 N. Central Avenue, Suite 2000
`Phoenix, AZ 85012-2788
`(602) 351-8000
`
`Attorneys for Petitioners
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`1
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`Dated: November 8, 2017
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