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`UNITED STATES PATENT AND TRADEMARK OFFICE
`___________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`___________________
`
`
`SIRIUS XM RADIO INC.,
`Petitioner,
`
`v.
`
`FRAUNHOFER-GESELLSCHAFT ZUR FÖRDERUNG DER
`ANGEWANDTEN FORSCHUNG E.V.,
`Patent Owner.
`___________________
`
`Case IPR2018-00689
`Patent No. 6,993,084
`___________________
`
`
`PATENT OWNER’S SUR-REPLY
`TO PETITIONER’S REPLY TO PATENT OWNER’S
`PRELIMINARY RESPONSE
`
`
`
`
`
`Mail Stop “PATENT BOARD”
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
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`Case IPR2018-00689
`Patent 6,993,084
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`UPDATED EXHIBIT LIST
`
`Executed Summons to Sirius XM Radio Inc., attaching
`Complaint for Patent Infringement, Dated February 22,
`2017
`Fraunhofer Complaint for Patent Infringement against
`Defendant Sirius XM Radio Inc., Filed February 22, 2017
`Expert Declaration of Michael L. Honig, Ph.D. in Support
`of Patent Owner’s Preliminary Response
`Curriculum Vitae of Michael L. Honig, Ph.D.
`
`Sirius XM Holdings Inc., SEC Form 10-K for the year
`ended December 31, 2017, Filed January 31, 2018
`Sirius XM Holdings Inc., SEC Form 8-K, November 14,
`2013
`Pandora Media, Inc., SEC Schedule 13D, September 22,
`2017
`Pandora Media, Inc., SEC Joint Filing Agreement (Exhibit
`A) to Schedule 13D, September 22, 2017
`Sirius XM Holdings Inc., SEC Form 8-K, January 11, 2018
`
`Sirius XM Holdings Inc., Exhibit 10.1 to SEC Form 8-K,
`January 10, 2018 (Meyer Employment Agreement)
`Sirius XM Holdings Inc., SEC Form 8-K, January 14, 2014
`
`Sirius XM Holdings Inc., Exhibit 10.1 to SEC Form 8-K,
`January 10, 2014 (Donnelly Employment Agreement)
`Sirius XM Holdings Inc., SEC Form 10-K for the year
`ended December 31, 2016, Filed February 2, 2017
`Defendant Sirius XM Radio Inc.’s Corporate Disclosure
`Statement Pursuant to Rule 7.1 of the Federal Rules of
`Civil Procedure, April 25, 2017
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`Fraunhofer
`Ex. 2001
`
`Fraunhofer
`Ex. 2002
`Fraunhofer
`Ex. 2003
`Fraunhofer
`Ex. 2004
`Fraunhofer
`Ex. 2005
`Fraunhofer
`Ex. 2006
`Fraunhofer
`Ex. 2007
`Fraunhofer
`Ex. 2008
`Fraunhofer
`Ex. 2009
`Fraunhofer
`Ex. 2010
`Fraunhofer
`Ex. 2011
`Fraunhofer
`Ex. 2012
`Fraunhofer
`Ex. 2013
`Fraunhofer
`Ex. 2014
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`Case IPR2018-00689
`Patent 6,993,084
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`Erik Knutson v. Sirius XM Radio Inc., No. 12-cv-0418-
`AJB (S.D. Cal.), First Amended Class Action Complaint
`for Damages, Filed May 29, 2015
`Francis W. Hooker v. Sirius XM Radio Inc., No. 4:13-cv-3
`(E.D. Va.), Class Complaint, Filed January 4, 2013
`Yefim Elikman v. Sirius XM Radio Inc. and Career
`Horizons, Inc., No. 1:15-cv-02093 (N.D. Ill.), Second
`Amended Class Action Complaint, Filed April 1, 2015
`Anthony Parker v. Sirius XM Radio Inc., No. 8:15-cv-
`01710-JSM-EAJ (M.D. Fla), Class Action Complaint, Filed
`July 22, 2015
`Francis W. Hooker et al. v. Sirius XM Radio Inc., No. 4:13-
`cv-3 (E.D. Va.), Final Order Approving Settlement and
`Certifying the Settlement Class, Filed December 22, 2016
`Corporate Overview for Sirius XM Satellite Radio,
`retrieved from https://www.siriusxm.com/corporate?
`intcmp=GN_FOOTER_NEW_AboutSiriusXM_Corp on
`June 29, 2018
`Sirius XM Holdings Inc. Common Stock (SIRI) Real-Time
`Stock Quote, NASDAQ.com, retrieved from
`https://www.nasdaq.com/symbol/siri/real-time on June 29,
`2018
`Sirius XM Holdings Wikipedia Page, retrieved from
`https://en.wikipedia.org/wiki/Sirius_XM_Holdings on July
`2018
`SIRI – Sirius XM Holdings Inc. Company Profile –
`CNNMoney.com, retrieved from https://money.cnn.com/
`quote/profile/profile.html?symb=SIRI on July 2, 2018
`Sirius XM Holdings Inc. (SIRI) Stock is Still Slipping,
`May 2, 2017, retrieved from https://investorplace.com
`/2017/05/sirius-xm-siri-stock-slipping/ on July 2, 2018
`Verizon to Buy Gogo? ‘Not so Fast,’ Macquarie Says,
`August 27, 2014, retrieved from https://finance.yahoo.com
`/news/verizon-buy-gogo-not-fast-151154614.html on July
`2, 2018
`Global Interactive Media, Inc. v. Sirius XM Holdings Inc.,
`1:16-cv-06379-JGK (N.D. of Ill.), Complaint Filed June 30,
`2016
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`Fraunhofer
`Ex. 2015
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`Fraunhofer
`Ex. 2016
`Fraunhofer
`Ex. 2017
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`Fraunhofer
`Ex. 2018
`
`Fraunhofer
`Ex. 2019
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`Fraunhofer
`Ex. 2020
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`Fraunhofer
`Ex. 2021
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`Fraunhofer
`Ex. 2022
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`Fraunhofer
`Ex. 2023
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`Fraunhofer
`Ex. 2024
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`Fraunhofer
`Ex. 2025
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`Fraunhofer
`Ex. 2026
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`Aug. 31, 2016 Letter from Mark A. Baghdassarian to Court
`in Global Interactive Media, Inc. v. Sirius XM Holdings
`Inc., 1:16-cv-06379-JGK (N.D. of Ill.)
`December 8, 2016 Stipulated Dismissal With Prejudice in
`Global Interactive Media, Inc. v. Sirius XM Holdings Inc.,
`1:16-cv-06379-JGK (N.D. of Ill.)
`Written Statement of David J. Frear, Chief Financial
`Officer, Sirius XM Holdings Inc. Before the U.S. House of
`Representatives Committee on the Judiciary Subcommittee
`on Courts, Intellectual Property, and the Internet, Hearing
`on Music Licensing Under Title 17, June 25, 2014
`Patrick Donnelly Emails
`
`Sirius XM Holdings Inc. (SIRI) Company Profile, Reuters,
`retrieved from https://www.reuters.com/finance/
`stocks/company-profile/SIRI.OQ on July 5, 2018
`LinkedIn Profile for Sirius XM Holdings Inc., retrieved
`from https://www.linkedin.com/company/sirius-xm-radio-
`inc./ on July 5, 2018
`Technology License Agreement, July 24, 1998
`
`
`
`Fraunhofer
`Ex. 2027
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`Fraunhofer
`Ex. 2028
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`Fraunhofer
`Ex. 2029
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`Fraunhofer
`Ex. 2030
`Fraunhofer
`Ex. 2031
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`Fraunhofer
`Ex. 2032
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`Fraunhofer
`Ex. 2033
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`
`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`Cases
`Aceto Corp. v. Gowan Co.,
`IPR2015-01016, Paper No. 15 (Oct. 2, 2015) ...................................................... 2
`Amazon.com, Inc. v. Appistry, Inc.,
`IPR2015-00480, Paper No. 18 (July 13, 2015) .................................................... 4
`Applications in Internet Time, LLC v. RPX Corp.,
`897 F.3d 1336 (Fed. Cir. 2018) .................................................................... 1, 2, 3
`Atlanta Gas Co. v. Bennett Regulator, Inc.,
`IPR2013-00453, Paper No. 88 (Jan. 6, 2015) ................................................... 2, 3
`Corning Optical, LLC v. PPC Broadband, Inc.,
`IPR2014-00440, Paper No. 70 (Dec. 9, 2015) ...................................................... 5
`Galderma S.A. v. Allergan USA Inc.,
`IPR2014-01422, Paper No. 14 (Mar. 5, 2015) ................................................. 4, 5
`Radware, Inc. v. F5 Networks, Inc.,
`IPR2017-01185, Paper No. 9 (Oct. 11, 2017) .............................................. 1, 2, 4
`Reflectix, Inc. v. Promethean Tech,
`IPR2015-00039, Paper No. 18 (Apr. 24, 2015) .................................................... 5
`Zerto Inc. v. EMC Corp.,
`IPR2014-01254, Paper No. 35 (Mar. 3, 2015) ..................................................... 4
`Zoll Lifecor Corp. v. Philips Elecs. North Am. Corp.,
`IPR2013-00606, Paper No. 13 (Mar. 20, 2014) ................................................... 5
`Statutes
`35 U.S.C. § 315(e) ................................................................................................. 1, 5
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`Petitioner SXM chose to withhold disclosure of real parties-in-interest SXM
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`Case IPR2018-00689
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`Holdings and Liberty Media from its Petition on the rationale that those closely
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`related parties should be free to file subsequent petitions as needed without any
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`“§ 315(e) estoppel concerns.” See Reply at 5. Patent Owner presented a
`
`substantial challenge to this defective RPI disclosure, see POPR at 2-27, which
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`then obligated Petitioner to satisfy its “burden of persuasion” to establish that it
`
`had in fact properly identified “all the real parties in interest.” Applications in
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`Internet Time, LLC v. RPX Corp., 897 F.3d 1336, 1356 & n.7 (Fed. Cir. 2018)
`
`(emphasis in original and quotation omitted) (“AIT”). This burden requires
`
`meaningful evidence and not merely “bald assertions” in a self-serving declaration.
`
`Id. at 1358; see also Radware, Inc. v. F5 Networks, Inc., IPR2017-01185, Paper
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`No. 9, at 17-19 (Oct. 11, 2017) (“uncorroborated testimonial evidence” insufficient
`
`to satisfy burden, in part because petitioner “is far more likely to be in possession
`
`of … relevant evidence than is a patent owner”).
`
`The Petitioner has failed to satisfy its burden of persuasion here. Petitioner
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`does not present any supporting documentary evidence, nor does it address (much
`
`less rebut) the evidence presented by Patent Owner in its POPR, including:
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`• Evidence of regular involvement by SXM Holdings in IP licensing and
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`other legal disputes against Petitioner, including participation in
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`settlement negotiations and payments (POPR at 9-12);
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`• Evidence of SXM Holdings consistently presenting itself as a unified
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`operating company with Petitioner, including in its SEC reports, public
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`Web presence, and testimony to Congress (id. at 8-9, 18-21);
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`• Evidence of complete overlap between the executive officers of
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`Petitioner and SXM Holdings, including the exact same individuals
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`serving as CEO, president, and in-house counsel (id. at 12-18).
`
`Instead, Petitioner relies almost exclusively on the uncorroborated testimony
`
`of its (and SXM Holdings’) general counsel, which is plainly inadequate. See
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`Radware, IPR2017-01185, Paper No. 9, at 18-19 (RPI burden not met by party
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`testimony without documentary support); Atlanta Gas Co. v. Bennett Regulator,
`
`Inc., IPR2013-00453, Paper No. 88, at 11 (Jan. 6, 2015); Aceto Corp. v. Gowan
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`Co., IPR2015-01016, Paper No. 15, at 9-11 (Oct. 2, 2015).
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`The Federal Circuit criticized this very approach in the recent AIT case,
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`where the Board initially concluded that the unnamed party was not an RPI based
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`on a self-serving declaration submitted by the petitioner. AIT, 897 F.3d at 1342-
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`43. The Federal Circuit strongly rejected this approach, finding the Board’s
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`analysis of the evidentiary record to be “impermissibly shallow” as it had simply
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`credited the testimony in petitioner’s declaration without regard to other evidence
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`and evidentiary conflicts in the “entirety of the record.” Id. at 1351. In remanding
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`for a proper RPI analysis, the Federal Circuit noted the Board had also relied upon
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`an “impermissibly narrow understanding” of what it means to be an RPI, as
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`opposed to the “expansive formulation” that was intended by Congress to “apply
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`broadly.” Id. at 1346, 1351, 1356. This was to include beneficiaries with a
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`“preexisting, established relationship with the petitioner” that are “so closely
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`related to the original petitioner as to qualify as a real party in interest”—an apt
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`description of SXM Holdings. Id. at 1350-51; see POPR at 10-23.1
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`Thus, the evidentiary record as a whole fails to support Petitioner’s assertion
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`that it is sufficiently distinct from SXM Holdings and Liberty Media that it can be
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`deemed the only party capable of controlling these proceedings. Instead, Petitioner
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`simply argues that SXM Holdings cannot be an RPI because is it allegedly a “non-
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`operational holding company.” Reply at 1. This argument is unfounded as a matter
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`of both law and fact. As for the law, there is no “bright line test” governing the
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`RPI analysis (AIT, 897 F.3d at 1342), and a holding company can certainly qualify
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`as an RPI. See, e.g., Atlanta Gas, IPR2013-00453, Paper No. 88, at 2, 11 (“holding
`
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`1 Petitioner attempts to dismiss the pre-suit communications with SXM
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`Holdings’ general counsel (Ex. 2030) by claiming the “underlying agreement” was
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`with Petitioner alone. Reply at 3-4. But what Petitioner points to is an engineering
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`contract, not a patent license. The original sublicense actually listed as parties both
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`XM’s predecessor AMRC and its parent AMRC Holdings. Ex. 2033.
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`company” was RPI in view of “intertwined” relationship with petitioner, which
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`“weighs heavily” toward RPI finding); see also Amazon.com, Inc. v. Appistry, Inc.,
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`IPR2015-00480, Paper 18 (July 13, 2015) (even indirect control enough for RPI).
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`Moreover, contrary to the Donnelly Declaration, there is significant evidence
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`that SXM Holdings has substantial operations and is not some sort of separate
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`holding company shell. Cf. Ex. 1025, ¶¶ 2-15. SXM Holdings consistently holds
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`itself out as essentially the same as Petitioner and has represented on its public web
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`page, SEC filings, and testimony to Congress that it has millions of subscribers and
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`thousands of employees; that it enjoys and reports substantial revenue
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`(undifferentiated from Petitioner); that it has paid IP owners “well over $1 billion”
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`in royalties; that it conducts real-world operations like “transmit[ting] music,”
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`“acquir[ing] subscribers through marketing,” and entering into “agreements” with
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`automakers; that it owns or maintains infringing functionalities such as satellites
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`and repeater systems; and that it is involved in legal matters for Petitioner
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`including settlement negotiations and payments. POPR at 10-23. SXM Holdings
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`even has officers specifically appointed to areas such as “Operations,” “Sales,” and
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`“Marketing.” POPR at 21-22. These facts among others clearly distinguish this
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`case from Daifuku, as relied upon in the Reply. IPR2015-01538, Paper No. 11, at
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`11-12 (Jan. 19, 2016) (distinguishing circumstances where a party had overlapping
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`executives with petitioner or capacity to “control [] litigation brought against the
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`[petitioner]”); see also POPR at 12, 23-24.
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`In short, there is ample evidence in this case that SXM Holdings is so
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`“intertwined” with Petitioner that the two “effectively operate as a single entity,”
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`which reflects “an actual measure of control or opportunity to control the filing of
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`and participation in [this] IPR.” Zerto, IPR2014-01254, Paper No. 35, at 14;
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`Radware, IPR2017-01185, Paper No. 9, at 7; Galderma, IPR2014-01422, Paper
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`No. 14, at 5; Zoll Lifecor, IPR2013-00606, Paper No. 13, at 10, 15 (parent and
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`subsidiary “repeatedly held themselves out … as a single entity”); Reflectix, Inc. v.
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`Promethean Tech, IPR2015-00039, Paper No. 18, at 11-12 (Apr. 24, 2015).
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`Finally, Petitioner’s defective RPI disclosure is not curable. The one-year
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`bar date has passed, and Petitioner effectively admits that the omission was
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`intentional, claiming that the undisclosed entities would avoid any Ҥ 315(e)
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`estoppel concerns.” See Reply at 5. These facts render inapposite the cases cited
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`in Petitioner’s Reply (at 5)—this is not a situation of a simple clerical “mistake” or
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`a petition that could easily be refiled because the petitioner was diligent in filing
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`well in advance of the one-year bar date. The Board does not hesitate to deny
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`amendment in circumstances such as these. See, e.g., Reflectix, IPR2015-00039,
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`Paper No. 18, at 13-18 (denying request to correct RPI after statutory bar date);
`
`Corning Optical, LLC v. PPC Broadband, Inc., IPR2014-00440, Paper No. 70, at
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`10-13 (Dec. 9, 2015) (same); Galderma, IPR2014-01422, Paper No. 14, at 13.
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`Date: August 28, 2018
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`Case IPR2018-00689
`Patent No. 6,993,084
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`Respectfully submitted,
`
`
`
`
`/s/ Ben J. Yorks
`Ben J. Yorks (Reg. No. 33,609)
`Babak Redjaian (Reg. No. 42,096)
`David McPhie (Reg. No. 56,412)
`Irell & Manella LLP
`1800 Avenue of the Stars, Suite 900
`Los Angeles, CA 90067
`Tel: (310) 277-1010
`Fax: (310) 203-7199
`Email: FraunhoferIPRs@irell.com
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`CERTIFICATE OF SERVICE
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`Pursuant to 37 C.F.R. § 42.6, the undersigned certifies that on August 28,
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`2018, a copy of the foregoing document PATENT OWNER’S SUR-REPLY TO
`
`PETITIONER’S REPLY TO PATENT OWNER’S PRELIMINARY
`
`RESPONSE and EXHIBIT 2033 were served, by electronic mail, as agreed to by
`
`the parties, upon the following:
`
`KRAMER LEVIN NAFTALIS & FRANKEL LLP
`
`Jonathan Caplan (Reg. No. 38,094)
`JCaplan@kramerlevin.com
`
`Mark Baghdassarian (pro hac vice)
`mbaghdassarian@kramelevin.com
`
`Shannon Hedvat (Reg. No. 68,417)
`shedvat@kramerlevin.com
`
`Jeffrey H. Price (Reg. No. 69,141)
`jprice@kramerlevin.com
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`
`
`
`
`
` /s/ Susan Langworthy
`By:
` Susan Langworthy
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