UNITED STATES PATENT AND TRADEMARK OFFICE
`
`———————
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`———————
`
`UNIFIED PATENTS INC.
`
`Petitioner
`
`- vs. -
`
`FALL LINE PATENTS, LLC
`
`Patent Owner
`
`———————
`
`IPR2018-00043
`
`U.S. Patent 9,454,748
`
`PETITIONER’S RESPONSE TO
`
`PATENT OWNER’S OBSERVATIONS
`
`FILED UNDER SEAL - PROTECTIVE ORDER MATERIAL
`
`Unified Patents v. Fall Line
`IPR2018-00043
`Unified Exhibit 1032
`
`
`
`———————
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`———————
`
`UNIFIED PATENTS INC.
`
`Petitioner
`
`- vs. -
`
`FALL LINE PATENTS, LLC
`
`Patent Owner
`
`———————
`
`IPR2018-00043
`
`U.S. Patent 9,454,748
`
`PETITIONER’S RESPONSE TO
`
`PATENT OWNER’S OBSERVATIONS
`
`FILED UNDER SEAL - PROTECTIVE ORDER MATERIAL
`
`Unified Patents v. Fall Line
`IPR2018-00043
`Unified Exhibit 1032
`
`
`
`Petitioner’s Response to Patent Owner’s Observations
`IPR2018-00043 (U.S. Patent 9,454,748)
`
`I.
`
`Introduction
`
`Petitioner Unified Patents Inc. (“Unified”) submits this Response to Patent
`
`Owner’s Observations on Cross-Examination of Mr. Kevin Jakel (Paper 30). A
`
`Motion for Observation is intended to “draw the Board’s attention to relevant cross-
`
`examination testimony” but “is not an opportunity to raise new issues, re-argue
`
`issues, or pursue objections.” See Paper 7, p. 5; Trial Practice Guide, 77 Fed. Reg.
`
`48756, 48768 (Aug. 14, 2012). Each of Patent Owner’s observations include
`
`attorney argument or mischaracterizations of Mr. Jakel’s testimony, and omissions
`
`of other relevant portions of Mr. Jakel’s testimony that provide the full context of
`
`each issue. Unified therefore objects to Patent Owner’s improper use of its
`
`observations and provides below proper context for each observation and the
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`mischaracterizations of Mr. Jakel’s testimony.
`
`Response to Observation #1
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`Patent Owner omits that Mr. Jakel testified the proportion of Petitioner’s
`
`revenue that is spent on IPRs as compared to other deterrence activities is because
`
`“IPR activities are just, they are expensive. So, they make up the most expensive
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`aspect of what we do.” Ex. 2009, 158:21–159:11. Also, Mr. Jakel testified that “In
`
`terms of employees, I think there are as many employees that spend their time on
`
`other things besides IPRs, than, as we do people who are dedicated exclusively to
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`IPRs.” Ex. 2009, 159:16–160:2.
`
`-1-
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`FILED UNDER SEAL - PROTECTIVE ORDER MATERIAL
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`
`
`Petitioner’s Response to Patent Owner’s Observations
`IPR2018-00043 (U.S. Patent 9,454,748)
`
`Response to Observation #2
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`The cited testimony is not relevant to Patent Owner’s proposition, because, as
`
`outlined in Petitioner’s RPI Reply (Paper 22) at 7–8, the Trial Practice Guide
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`provides that membership in an association, alone, does not make an entity an RPI.
`
`Response to Observation #3
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`Patent Owner omits that Mr. Jakel testified that contracts with members do
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`not “obligate Unified to spend a certain percentage of the money that they receive
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`on deterrence activities” and do not “require Unified Patents to spend any particular
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`amount of money on deterrence activities.” Ex. 2009, 61:2–10. Rather, Unified is
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`“hired to do deterrence for a zone.” Ex. 2009, 67:17–20. Mr. Jakel’s testimony is
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`unequivocal in stating, for example, that “We don’t do anything on behalf of our
`
`members. We work on behalf of the zones that we work for.” Ex. 2009, 94:8–15.
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`Response to Observation #4
`
`The cited testimony does not support Patent Owner’s proposition that
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`“members hire Petitioner to perform deterrence services, including filing IPRs.”
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`Observations, p. 3 (emphasis added). The cited testimony discusses “deterrence for
`
`a zone” and deterring NPE activity, but does not mention filing IPRs. Further, as
`
`Mr. Jakel testified, “we sell memberships to the zone…we use the money they give
`
`us to generate a deterrence on behalf of the zone,” that “Unified performs many NPE
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`deterrent activities including data analytics, prior art searching, prior art contests,
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`-2-
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`FILED UNDER SEAL - PROTECTIVE ORDER MATERIAL
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`
`
`Petitioner’s Response to Patent Owner’s Observations
`IPR2018-00043 (U.S. Patent 9,454,748)
`validity and patentability analyses and post grant review requests” and confirmed
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`that “we do all of those things and we think that all of those things have an impact.
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`Exactly which impact has the greatest impact or the greatest deterrent impact at any
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`given moment, I’m not sure.” Ex. 2009, 59:23–60:8, 158:1–159:11.
`
`Response to Observation #5
`
`The cited testimony does not support Patent Owner’s proposition. Unified is
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`obligated to reduce NPE activity in a technology zone and has no obligation to
`
`perform deterrence effects on behalf of its “zone members.” Mr. Jakel’s testimony
`
`is unequivocal in stating, for example, that “We don’t do anything on behalf of our
`
`members. We work on behalf of the zones that we work for.” Ex. 2009, 94:8–15.
`
`As Mr. Jakel also testified, Unified’s activities benefit all companies within a
`
`technology zone, whether the company is a member of the zone or a non-member:
`
`“we are working on behalf of the zones. I mean, everyone ultimately gets a benefit
`
`by the way. We claim that even, even nonmembers get a benefit when we settle a
`
`license to settle an IPR on the patent….So we think everyone benefits.” Ex. 2009,
`
`124:20–125:10.
`
`Response to Observation #6
`
`The cited testimony does not support Patent Owner’s proposition. Rather, Mr.
`
`Jakel’s testimony is unequivocal in stating, for example, that “We don’t do anything
`
`-3-
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`FILED UNDER SEAL - PROTECTIVE ORDER MATERIAL
`
`
`
`Petitioner’s Response to Patent Owner’s Observations
`IPR2018-00043 (U.S. Patent 9,454,748)
`on behalf of our members. We work on behalf of the zones that we work for.” Ex.
`
`2009, 94:8–15.
`
`Response to Observation #7
`
`The cited testimony does not support Patent Owner’s proposition and does not
`
`consider Mr. Jakel’s full testimony. Mr. Jakel testified that Unified maintains
`
`memberships by describing its work “on behalf of the zone” and not on behalf of
`
`any member. Ex. 2009, 110:1–21. Thus, the deterrence generated for a zone
`
`maintains memberships, not simply filing IPRs as alleged.
`
`Response to Observation #8
`
`Patent Owner’s observation omits facts. As detailed above in the Response
`
`to Observation #7, Mr. Jakel testified that Unified maintains memberships by
`
`describing its work “on behalf of the zone” and not on behalf of any member. Ex.
`
`2009, 110:1–21.
`
`Response to Observation #9
`
`Patent Owner’s observation omits facts. Petitioner does not spend
`
`subscription fees on behalf of its members. As Mr. Jakel testified, “we are not doing
`
`work on behalf of members.” Ex. 2009, 123:24–124:12; see also 94:8–15. Rather,
`
`as Mr. Jakel testified, Unified’s revenue is spent on deterrence activities for a zone:
`
`Unified has a meeting “that says this is what we did the last year as all of our
`
`deterrence work; this is what we are doing in a particular zone. And as I kind of
`
`-4-
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`FILED UNDER SEAL - PROTECTIVE ORDER MATERIAL
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`
`
`Petitioner’s Response to Patent Owner’s Observations
`IPR2018-00043 (U.S. Patent 9,454,748)
`described it earlier, like, we work on behalf of the zone, we give all of the
`
`information and we just say basically, you know, like, here is what we did for the
`
`zone, if you like the work we do on behalf of the zone, then pay us again, renew,
`
`and we are going to work on behalf of the zone for another year.” Ex. 2009, 110:1–
`
`15 (emphasis added). Mr. Jakel confirmed that the during the meeting Unified
`
`“go[es] through the zone activity.” Ex. 2009, 110:17–21; see also 114:16–25.
`
`Response to Observation #10
`
`First, this observation is not relevant, because none of Patent Owner’s
`
`arguments of record concern licensing. Second, Patent Owner’s observation omits
`
`facts. As Mr. Jakel testified: “Q. Okay. Let’s talk about licenses. Unified Patents
`
`obtains licenses on behalf of its members. Is that correct? A. That is incorrect….We
`
`don’t do anything on behalf of our members. We work on behalf of the zones that
`
`we work for.” Ex. 2009, 94:8–15. Additionally, as Mr. Jakel testified in connection
`
`with obtaining licenses, “we are not doing work on behalf of members,” (Ex. 2009,
`
`124:2–12) and further, that “everyone ultimately gets a benefit…even nonmembers
`
`get a benefit when we settle a license to settle an IPR on the patent. Everyone
`
`ultimately.” Id. at 124:20–125:10.
`
`Response to Observation #11
`
`As with Observation #10, this observation is not relevant, because none of
`
`Patent Owner’s arguments of record concern licensing. Patent Owner also
`
`-5-
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`FILED UNDER SEAL - PROTECTIVE ORDER MATERIAL
`
`
`
`Petitioner’s Response to Patent Owner’s Observations
`IPR2018-00043 (U.S. Patent 9,454,748)
`mischaracterizes Mr. Jakel’s testimony by ignoring the full context of the testimony.
`
`As Mr. Jakel testified in connection with obtaining licenses, “everyone ultimately
`
`gets a benefit…even nonmembers get a benefit when we settle a license to settle an
`
`IPR on the patent. Everyone ultimately” (Ex. 2009, 124:20–125:10) and further,
`
`that “we are not doing work on behalf of members[.]” Id. at 124:2–12.
`
`Response to Observation #12
`
`Patent Owner mischaracterizes Mr. Jakel’s testimony by alleging that the
`
`“zones are comprised on [sic] Petitioner’s members.” Zones are defined by
`
`technology areas, and are not comprised of members. As Mr. Jakel’s declaration
`
`states, “Unified independently selects which patents to target based on the perceived
`
`deterrent value to a technology zone” and that “Unified establishes its Zones, and
`
`then members chose to join. Members do not direct or otherwise participate in the
`
`establishment of Zones.” Jakel Declaration (EX1026), ¶¶ 3, 6. Further, as Mr. Jakel
`
`testified, “Unified is going to work on behalf of a zone, and by doing so we are going
`
`to take independent third party action to create the deterrence that we feel like is
`
`going to be beneficial for the technology area.” Ex. 2009, 159:9–20.
`
`Response to Observation #13
`
`First, this observation is not relevant, because none of Patent Owner’s
`
`arguments of record concern licensing. Second, Patent Owner mischaracterizes Mr.
`
`Jakel’s testimony by asserting that “a majority of the licenses obtained by Petitioner
`
`-6-
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`FILED UNDER SEAL - PROTECTIVE ORDER MATERIAL
`
`
`
`Petitioner’s Response to Patent Owner’s Observations
`IPR2018-00043 (U.S. Patent 9,454,748)
`were for patents on which Petitioner had filed an IPR,” as Patent Owner’s questions
`
`to Mr. Jakel were vague and cannot clearly provide support for its contention. See
`
`Ex. 2009, 106:3-11.
`
`Response to Observation #14
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`Patent Owner’s conclusion omits the full context of Mr. Jakel’s testimony.
`
`Mr. Jakel stated he conducts a meeting “that says this is what we did the last year as
`
`all of our deterrence work; this is what we are doing in a particular zone. And as I
`
`kind of described it earlier, like, we work on behalf of the zone, we give all of the
`
`information and we just say basically, you know, like, here is what we did for the
`
`zone, if you like the work we do on behalf of the zone, then pay us again, renew,
`
`and we are going to work on behalf of the zone for another year.” Ex. 2009, 110:1–
`
`15 (emphasis added).
`
`Response to Observation #15
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`Patent Owner conclusion omits the full context of Mr. Jakel’s testimony, as
`
`detailed above in the Response to Observation #14.
`
`Response to Observation #16
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`Patent Owner mischaracterizes Mr. Jakel’s testimony. Mr. Jakel’s declaration
`
`states that “Unified’s members do not pay any fees designated for IPRs” and also
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`“Unified alone determines how to spend its money.” Jakel Declaration (EX1026), ¶
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`3. Mr. Jakel’s deposition also includes the following exchange: “Q. Can a member
`
`-7-
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`FILED UNDER SEAL - PROTECTIVE ORDER MATERIAL
`
`
`
`Petitioner’s Response to Patent Owner’s Observations
`IPR2018-00043 (U.S. Patent 9,454,748)
`direct that Unified, that Unified file a specific IPR? A. They cannot.” Ex. 2009,
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`185:24–186:1. The cited testimony does not conflict with that statement, and there
`
`is no denial of the position alleged by Patent Owner. As Mr. Jakel repeatedly
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`explained: “What we believe and what we have been very clear on from the
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`beginning, members choose to participate in a zone or not. And they fund the zone.
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`What we choose to then spend that money on is to spend the money on IPRs or other
`
`activities.” Ex. 2009, 166:12–18. This testimony is consistent with the identified
`
`testimony in Patent Owner’s Observation #16.
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`March 1, 2019
`
`Respectfully submitted,
`
`/David W. OBrien/
`David W. O’Brien
`Counsel for Petitioner
`Registration No. 40,107
`HAYNES AND BOONE, LLP
`
`-8-
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`FILED UNDER SEAL - PROTECTIVE ORDER MATERIAL
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`
`
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`Unified Patents, Inc.
`Petitioner
`
`§
`§
`§
`§
`§
`
`Petition for Inter Partes Review
`
`IPR2018-00043
`U.S. Patent No. 9,454,748
`
`
`CERTIFICATE OF SERVICE
`
`The undersigned certifies, in accordance with 37 C.F.R. § 42.6, that service
`was made on the Patent Owner as detailed below.
`Date of service March 1, 2019
`
`Manner of service Electronic Service by E-Mail
`
`Documents served Petitioner’s Response to Patent Owner’s Observations
`Petitioner’s Motion to Seal
`Exhibit 1028
`
`Persons served Terry L. Watt (terry.watt@crowedunlevy.com)
`Matthew J. Antonelli (matt@ahtlawfirm)
`Michael E. Ellis (michael@ahtlawfirm.com)
`Larry D. Thompson, Jr. (larry@ahtlawfirm.com)
`
`/Raghav Bajaj/
`Raghav Bajaj
`Counsel for Petitioner
`Registration No. 66,630
`
`-9-
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`FILED UNDER SEAL - PROTECTIVE ORDER MATERIAL
`
`
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