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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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`SIRIUS XM RADIO INC.,
`Petitioner,
`
`v.
`
`FRAUNHOFER-GESELLSCHAFT ZUR FÖRDERUNG DER
`ANGEWANDTEN FORSCHUNG E.V.,
`Patent Owner.
`___________________
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`IPR2018-00690 (Patent 6,314,289 B1)
`___________________
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`PATENT OWNER’S RESPONSE
`TO PETITIONER’S REQUEST FOR REHEARING
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`
`
`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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`10591252
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`TABLE OF CONTENTS
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`I.
`II.
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`B.
`
`Page
`INTRODUCTION ........................................................................................ 1
`THE RECENT GOOGLE DECISION DOES NOT IMPACT THE
`BOARD’S DENIAL OF INSTITUTION HERE ......................................... 1
`A.
`The Google Case Correctly Sets Forth A Flexible, Fact-
`Based Framework For Identifying RPIs ............................................ 2
`SXM Holdings Clearly Qualifies As An RPI Under The
`Google Framework, For The Same Reasons That The Board
`Articulated In Its Decision In This Case ............................................ 3
`PETITIONER’S REHEARING REQUEST IS PROCEDURALLY
`DEFECTIVE ................................................................................................. 5
`IV. THE BOARD PROPERLY APPLIED THE RPX CASE IN
`DETERMINING THAT HOLDINGS IS AN RPI ....................................... 7
`THE BOARD PROPERLY EXCERCISED ITS DISCRETION IN
`FINDING PETITIONER SHOWED NO GOOD CAUSE TO
`AMEND ........................................................................................................ 9
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`III.
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`V.
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`TABLE OF AUTHORITIES
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` Page(s)
`
`Cases
`AIT, LLC, v. RPX Corp.,
`897 F.3d 1336 (Fed. Cir. 2018) ...................................................................passim
`Amerigen Pharms Ltd. v. Janssen Oncology, Inc.,
`Case IPR2016-00286, Paper No. 92 (Dec. 3, 2018) ............................................. 6
`Fasteners For Retail, Inc. v. RTC Ind. Inc.,
`Case IPR2018-00741, Paper No. 32 (Nov. 15, 2018) ........................................ 10
`General Plastic Industrial Co., Ltd. v. Canon Kabushiki Kaisha,
`Case IPR2018-01357, Paper No. 19 (Sept. 6, 2017) ............................................ 6
`Google LLC v. Seven Networks LLC,
`Case IPR2018-01117, Paper No. 20 (Nov. 19, 2018) .................................passim
`Lumentum Holdings, Inc. v. Capella Photonics, Inc.,
`Case IPR2015-00739, Paper No. 38 (Mar. 4, 2016) ............................................. 9
`Wi-Fi One, LLC, v. Broadcom Corp,
`878 F.3d 1364 (Fed. Cir. 2018) ............................................................................ 5
`Other Authorities
`37 C.F.R. § 42.5(c)(3) ................................................................................................ 9
`37 C.F.R. § 42.71(d) .............................................................................................. 5, 6
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`I.
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`IPR2018-00690 (Patent 6,314,289 B1)
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`INTRODUCTION
`Patent Owner Fraunhofer opposes Petitioner’s request for rehearing of the
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`Board’s decision denying institution in this case. See Paper No. 17 (“Reh’g Req.”);
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`Paper No. 16 (“Decision”). Pursuant to the Board’s Order (Paper No. 20), Patent
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`Owner is filing this same opposition to the rehearing requests in related cases.
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`Petitioner’s request for rehearing should be denied as it does not come close
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`to meeting the heavy burden required to justify reconsideration of the Board’s well-
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`reasoned Decision. Petitioner instead mischaracterizes the law, attempts to reweigh
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`the facts, and repeatedly relies on new arguments that it failed to raise earlier despite
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`the opportunity to do so. None of this is a proper basis for granting rehearing. Nor
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`are Petitioner’s failed RPI arguments rescued by the recent non-precedential
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`decision in Google LLC v. Seven Networks LLC, Case IPR2018-01117, Paper No.
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`20 (Nov. 19, 2018). The Google case simply applied a typical RPI analysis to a
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`different set of facts to obtain a different result. Because Petitioner fails to identify
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`any error in the Board’s Decision—much less an “abuse of discretion” that could
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`possibly warrant rehearing—Petitioner’s rehearing request should be denied.
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`II. THE RECENT GOOGLE DECISION DOES NOT IMPACT THE
`BOARD’S DENIAL OF INSTITUTION HERE
`The Board’s Order suggested that Patent Owner address: (1) “whether the
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`Google panel’s framework for determining whether a party is an RPI is correct,” and
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`(2) “whether Sirius XM Holdings meets the RPI criteria set forth in that decision.”
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`As shown below, the Google framework fully confirms that Holdings is an RPI.
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`IPR2018-00690 (Patent 6,314,289 B1)
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`A. The Google Case Correctly Sets Forth A Flexible, Fact-Based
`Framework For Identifying RPIs
`The Google case sets forth a typical—and generally correct—articulation of
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`legal principles applicable to the RPI inquiry. The case first notes that “the petitioner
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`bears the burden of persuasion to demonstrate that it has identified all of the RPIs,”
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`and that this burden never “shift[s]” to the patent owner. Id. at 5-6. The RPI analysis
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`itself is described as a “highly fact-dependent question” to be decided on a “case-
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`by-case basis.” Id. at 8. A variety of potentially relevant factors are mentioned,
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`including whether the entity “exercised or could have exercised control over a
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`party’s participation in a proceeding,” the entity’s “relationship with the petitioner,”
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`the entity’s “relationship to the petition,” “the nature of the entity filing the petition,”
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`whether the petition was filed at the “behest” of another, and whether the entity
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`“possessed effective control from a practical standpoint.” Id. at 8-9.
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`The Google case emphasizes that there is “no bright-line test” governing the
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`outcome of the RPI analysis. Id. at 8-9. For example, the existence of a parent-
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`subsidiary relationship supports but does not by itself prove the existence of an RPI.
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`Id. at 11, 13. Moreover, although cases exist in which a disinterested party may be
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`directed to file a petition as proxy for the one true RPI, the statute also contemplates
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`situations where there are multiple interested RPIs. Id. at 6 (requiring identification
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`of “all of the RPIs [plural]”); see also AIT, LLC, v. RPX Corp., 897 F.3d 1336, 1347,
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`1354 (Fed. Cir. 2018) (“Congress understood that there could be multiple real parties
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`IPR2018-00690 (Patent 6,314,289 B1)
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`in interest”). Thus, Google urges consideration of “the totality of the circumstances”
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`rather than “isolated facts,” noting that even “circumstantial” evidence can be
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`enough to demonstrate one or more qualifying RPIs in a given case. Google at 9.
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`B.
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`SXM Holdings Clearly Qualifies As An RPI Under The Google
`Framework, For The Same Reasons That The Board Articulated
`In Its Decision In This Case
`Application of the Google framework to this case confirms that Holdings
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`indeed qualifies as an RPI, consistent with the Board’s Decision denying institution.
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`For example, the Board properly found that Holdings qualified as an RPI based in
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`part on the nature of Holdings’ “relationship with the petitioner.” See Google at 9;
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`Decision at 4-6. The Board relied on undisputed evidence of the coextensive
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`operations between Petitioner and Holdings, including an SEC disclosure stating that
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`Holdings has “no operations independent of its subsidiary [Petitioner] Sirius XM.”
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`Decision at 5. The Board further relied on the complete overlap in the current high-
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`level leadership at both Petitioner and Holdings. Id. at 5 (“The names and titles for
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`all nine of Holdings’ executive officers—including the Chief Executive Officer and
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`General Counsel—are the same as those of Sirius XM”). These facts are in stark
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`contrast with those presented in Google, which rejected the patent owner’s assertion
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`that the petitioner (Google) and its corporate parent (Alphabet) were “essentially a
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`single entity.” Google at 14. In reaching this conclusion, the Google decision relied
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`on evidence that Alphabet had significant operations distinct from Google (including
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`IPR2018-00690 (Patent 6,314,289 B1)
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`matters involving the “self-driving car company, Waymo” and other Alphabet
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`subsidiaries), as well as different CEOs and only one overlapping member on
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`Alphabet’s eleven-member board. Id. at 15-16. Significantly, unlike the patent
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`owner in Google, Patent Owner here presented substantial evidence to demonstrate
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`Holdings is an RPI and never argued that the “mere existence of a parent-subsidiary
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`relationship” is enough to satisfy the RPI inquiry. Cf. id. at 11-13; see also
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`Preliminary Response at 6-23; Sur-Reply at 1-5 (additional RPI evidence).
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`The Board’s Decision in this case also properly considered whether Holdings
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`“exercised or could have exercised control over a party’s participation in a
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`proceeding,” thus showing “effective control” in relation to these proceedings “from
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`a practical standpoint.” See Google at 8-9; Decision at 5-6. For example, the Board
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`here relied on “undisputed evidence … [that] Holdings and Petitioner are jointly
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`involved in legal matters, including patent-related lawsuits and those that name only
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`Petitioner.” Decision at 6. This evidence served to demonstrate an “actual measure
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`of control or opportunity to control that might reasonably be expected between two
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`formal coparties,” including with respect to this very proceeding (another patent-
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`related dispute naming only Petitioner). See id. at 4. By contrast, Google found that
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`the patent owner there failed to present “persuasive evidence that any of the unnamed
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`parties could have exercised control of [the IPR] proceeding.” Google at 14.
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`IPR2018-00690 (Patent 6,314,289 B1)
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`The Google decision itself expressly distinguishes this case based on these
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`critical factual differences: “Notably, unlike here, the record in Sirius showed that
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`‘[b]eyond Holdings’ ownership of Petitioner and the complete management overlap
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`between the two entities, the undisputed evidence suggests Holdings and Petitioner
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`[were] jointly involved in legal matters, including patent-related lawsuits and those
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`that name only Petitioner.’” Google at 16 (quoting Decision at 6). Thus, Google fully
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`supports the Board’s Decision in this case and provides no support for rehearing.
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`III. PETITIONER’S REHEARING REQUEST IS PROCEDURALLY
`DEFECTIVE
`As for the specific arguments raised in Petitioner’s request for rehearing, they
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`initially fail for not satisfying 37 C.F.R. § 42.71(d), which requires that a rehearing
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`request must not only set forth the “matters the party believes the Board
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`misapprehended or overlooked,” but must also specifically identify “the place where
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`each matter was previously addressed in a motion, an opposition, or a reply.” Id.
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`The vast majority of the arguments in Petitioner’s rehearing request were not
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`actually included in Petitioner’s earlier submissions, contrary to this clear rule.
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`For example, Petitioner’s rehearing request relies heavily on the Federal
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`Circuit’s January 2018 decision in Wi-Fi One, LLC, v. Broadcom Corp, 878 F.3d
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`1364 (Fed. Cir. 2018) (see Reh’g Req. at 8-9, 14) and the Federal Circuit’s July 2018
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`RPX decision (see Reh’g Req. at 1, 3-5, 12-13). Yet Petitioner did not discuss or cite
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`either of these cases in any prior submission to the Board—not even in the Replies
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`that Petitioner filed in August 2018 as a specific response to the RPI arguments
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`IPR2018-00690 (Patent 6,314,289 B1)
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`raised by Patent Owner. See Case IPR2018-00689, Paper No. 8 (Aug. 21, 2018),
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`Case IPR2018-00690, Paper No. 13 (Aug. 21, 2018). Similarly, Petitioner’s prior
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`submissions offered only a single paragraph in support of its belated request to
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`amend its RPI disclosures, and did not include any argument regarding “good
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`cause.” See Reply at 5 (failing to mention the “good cause” standard, instead
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`focusing on issues regarding jurisdiction and prejudice). Of course, Petitioner cannot
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`fairly accuse the Board of “ignoring” or “overlooking” arguments or case law that
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`Petitioner neglected to even mention in its own papers. Because Petitioner does not
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`(and cannot) identify where these arguments were presented earlier, its rehearing
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`request plainly violates § 42.71(d).
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`The Board has made clear that arguments raised for the first time in a request
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`for rehearing are “not entitled to consideration.” General Plastic Industrial Co., Ltd.
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`v. Canon Kabushiki Kaisha, Case IPR2018-01357, Paper No. 19 at 20 (Sept. 6,
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`2017) (informative). Thus, a rehearing request is properly denied to the extent it is
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`used to “raise matters without adequately demonstrating where those matters
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`previously were raised.” Amerigen Pharms Ltd. v. Janssen, Inc., Case IPR2016-
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`00286, Paper No. 92 at 8 (Dec. 3, 2018); see also id. at 2 (“a request for rehearing is
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`not an opportunity … to present new arguments”) (citing 37 C.F.R. § 42.71(d)). The
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`Board should accordingly dismiss Petitioner’s new and improper arguments.
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`IPR2018-00690 (Patent 6,314,289 B1)
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`IV. THE BOARD PROPERLY APPLIED THE RPX CASE
`DETERMINING THAT HOLDINGS IS AN RPI
`Regardless, the new arguments presented in Petitioner’s rehearing request fail
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`IN
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`to remotely suggest any abuse of discretion in the Board’s Decision. Petitioner’s lead
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`argument is that the Board somehow “misapprehended” RPX and failed to
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`“conduct[] the full inquiry outlined” in that case. Reh’g Req. at 1-7. Not so. The RPX
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`case teaches the following: (1) that it is the petitioner who must bear the burden of
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`proving that all RPIs have been properly disclosed (897 F.3d at 1356 & n.7); (2) that
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`the RPI concept is intended to have an “expansive formulation” without applying
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`“unduly restrictive test[s]” (id. at 1351); (3) that “[d]etermining whether a non-party
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`is [an RPI] demands a flexible approach that takes into account both equitable and
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`practical considerations” (id.); and (4) that there are “multiple” factors that may be
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`“relevant” to this inquiry including, without limitation, “whether the non-party is a
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`clear beneficiary that has a preexisting, established relationship with the petitioner,”
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`“the nonparty’s relationship to the petition itself,” “the nature of the entity filing the
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`petition,” whether any non-party “desires review of the patent,” whether a petition
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`may have been “filed at a non-party’s ‘behest,’” and the presence of “overlapping”
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`leadership between the petitioner and non-party (id. at 1351, 1354).
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`The Board’s Decision in this case faithfully applied the teachings of RPX. The
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`Decision acknowledged that the burden was on SXM to satisfy the RPI requirement
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`and explained that this was a “highly fact-dependent” inquiry with no “bright line
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`test.” Decision at 3-4. The Board then carefully considered the facts of record as they
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`IPR2018-00690 (Patent 6,314,289 B1)
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`applied to “multiple factors” of relevance, including the consistent pattern of
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`Holdings’ direct involvement in IP disputes and other legal proceedings involving
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`only Petitioner (including settlement payments and participation in settlement
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`negotiations), the close preexisting relationship between Petitioner SXM and
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`Holdings, the nature of Petitioner and the admitted fact that Holdings has “no
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`operations independent of [Petitioner],” the identical management composition
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`between the two entities, and the self-serving assertions set forth in a declaration
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`submitted by the individual currently serving as general counsel of both Petitioner
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`and Holdings. Id. at 4-6. Weighing all of these facts, the Board concluded that
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`Petitioner had failed to meet its burden of proving it had identified all RPIs. Id. at 6.
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`Petitioner’s allegations of supposed error are thus without merit in view of the
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`Board’s detailed analysis consistent with RPX. For example, Petitioner claims the
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`Board did not consider the question of whether Holdings directed or controlled the
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`IPR proceedings, or benefitted from those proceedings in any way. Reh’g Req. at 3-
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`5. But in fact, the Board clearly found that Petitioner and Holdings are effectively
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`one and the same, and thus it was both entities that jointly sought advantage via the
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`IPR petition filed at their “behest.” (Holdings is hardly “non-operational” as it has
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`an Executive VP of “Operations.” Ex. 2008-3.) Petitioner offers a false dichotomy
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`by suggesting that only Petitioner or Holdings could be the true interested party,
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`whereas RPX teaches that Ҥ 315(b) does not presume the existence of only one real
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`IPR2018-00690 (Patent 6,314,289 B1)
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`party in interest—it is not an either-or proposition.” RPX, 897 F.3d at 1353.
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`Moreover, contrary to Petitioner’s assertion (Reh’g Req. at 4), the Board did fully
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`consider the declaration submitted by Petitioner with its bald assertions regarding
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`direction and control, yet ultimately chose to give more weight to the documentary
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`evidence showing Holdings’ pattern of involvement in “patent-related lawsuits”
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`including disputes that “name only Petitioner.” Decision at 5-6. This was a robust
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`analysis that clearly did not rely on the “parent-subsidiary relationship” alone.
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`V. THE BOARD PROPERLY EXCERCISED ITS DISCRETION IN
`FINDING PETITIONER SHOWED NO GOOD CAUSE TO AMEND
`Finally, Petitioner belatedly tries to revisit and bolster its cursory request to
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`amend its RPI disclosures, arguing that the Board’s discretionary denial of this
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`request was inconsistent with Lumentum Holdings, Inc. v. Capella Photonics, Inc.,
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`Case IPR2015-00739, Paper No. 38 (Mar. 4, 2016). Reh’g Req. at 7-9. But contrary
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`to Petitioner’s assertion, the Board’s Decision in this case did not blindly assume
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`that RPI defects are “jurisdictional” and can never be cured. Rather, the Board
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`recognized that, under 37 C.F.R. § 42.5(c)(3), correction of an erroneous RPI
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`disclosure is possible “upon a showing of good cause” or where it would be “in the
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`interests of justice.” Decision at 7; Lumentum at 7 (correction of RPI permissible as
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`matter of “discretion” under § 42.5(c)(3)). In exercising its discretion here, the Board
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`simply concluded (correctly) that Petitioner had failed to satisfy the “good cause”
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`and “interests of justice” standards. See also Paper No. 19 (denying POP review).
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`IPR2018-00690 (Patent 6,314,289 B1)
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`Petitioner’s other new arguments regarding “good cause” are not only
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`procedurally improper (see Section III above) but also fail on their merits. Petitioner
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`claims there was no attempt to circumvent the time bar and estoppel rules, Reh’g
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`Req. at 10, and now takes the position for the first time that Holdings cannot file its
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`own future IPR petition because it “would be time barred.” Reh’g Req. at 5. But
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`Petitioner took the opposite position in its Reply, claiming that Holdings was “not
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`involved in the related litigation” and therefore was not subject to any “§ 315(b) time
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`bar or § 315(e) estoppel concerns.” Reply at 5. In other words, rather than timely
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`disclosing Holdings as an obvious RPI, Petitioner chose to try to keep open the
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`possibility of a future IPR petition by Holdings. As recently noted in a similar case:
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`To permit Petitioner to now amend its mandatory notices to cure its
`failure to name [a non-party] as an RPI would be unfair to Patent
`Owner and would encourage gamesmanship by allowing petitioners
`to refrain from naming all RPIs until if and after such unnamed RPI
`is the cause for denying institution.
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`Fasteners For Retail, Inc. v. RTC Ind. Inc., Case IPR2018-00741, Paper No. 32 at 5
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`(Nov. 15, 2018) (emphasis added). The Board’s Decision in this case was entirely
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`justified for the same reasons. Simply put, it was no abuse of discretion for the Board
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`to discourage this kind of gamesmanship in the failure to timely disclose Holdings—
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`a clear RPI under established law. The rehearing request should therefore be denied.
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`Date: January 11, 2019
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`
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`IPR2018-00690 (Patent 6,314,289 B1)
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`Respectfully submitted,
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`
`
`/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 January 11,
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`2019, a copy of the foregoing document PATENT OWNER’S RESPONSE TO
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`PETITIONER’S REQUEST FOR REHEARING was served, by electronic
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`mail, as agreed to by the parties, upon the following:
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`KRAMER LEVIN NAFTALIS & FRANKEL LLP
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`Jonathan Caplan (Reg. No. 38,094)
`JCaplan@kramerlevin.com
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`Mark Baghdassarian (pro hac vice)
`mbaghdassarian@kramelevin.com
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`Shannon Hedvat (Reg. No. 68,417)
`shedvat@kramerlevin.com
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`Jeffrey H. Price (Reg. No. 69,141)
`jprice@kramerlevin.com
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`
`
`
`
`
` /s/ Susan Langworthy
`By:
` Susan Langworthy
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`
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`10591252
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