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 IPR2018-00690
`Patent No. 6,314,289
`___________________
`
`FRAUNHOFER’S PATENT OWNER 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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`

`IPR2018-00690
`Patent No. 6,314,289
`
`TABLE OF CONTENTS
`
`III.
`
`I.
`II.
`
`Page
`INTRODUCTION ........................................................................................ 1
`THE PETITION IS DEFECTIVE BECAUSE IT FAILS TO
`NAME ALL REAL PARTIES-IN-INTEREST ........................................... 2
`Legal Standard .................................................................................... 4
`A.
`B.
`Factual and Procedural Background .................................................. 6
`C.
`SXM Holdings Is A Real Party-In-Interest ........................................ 7
`D.
`Liberty Is A Real Party-In-Interest .................................................. 23
`E.
`The Petition Must be Dismissed as Sirius XM Failed to
`Disclose All Real Parties-In-Interest Within the One-Year
`Bar Date ............................................................................................ 24
`THE PETITION IS DEFECTIVE BECAUSE IT WAS FILED
`OUTSIDE THE STATUTORY BAR PERIOD ......................................... 27
`IV. BACKGROUND OF THE ’289 PATENT ................................................ 33
`V.
`LEVEL OF ORDINARY SKILL ............................................................... 38
`VI. CLAIM CONSTRUCTION ....................................................................... 38
`Claim Construction Standard ........................................................... 38
`A.
`Petitioner Applied the Wrong Claim Construction Standard .......... 38
`B.
`C.
`Preambles are Limiting for Claims 10, 13, 27 and 31 ..................... 39
`VII. PRIOR ART ................................................................................................ 41
`A.
`Ground 1 Should Be Denied ............................................................ 41
`1.
`Chen and Campanella do not Disclose “the Second
`Number of Output Bits Includes Two Portions of
`
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`IPR2018-00690
`Patent No. 6,314,289
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`Page
`
`B.
`
`Output Bits, Each Portion of Output Bits Individually
`Allowing the Retrieval of Information Represented by
`the First Number of Input Bits” ............................................. 43
`The Petition Fails to Articulate Adequate Objective
`Rationale to Modify or Combine the References .................. 46
`Grounds 2 and 3 Should Be Denied ................................................. 50
`1.
`Petitioner Failed to Meet its Burden to Show
`Smallcomb Qualifies as Prior Art .......................................... 50
`Smallcomb is not Entitled to Claim Priority to its
`Provisional and, thus, is not Prior Art to the ’289
`Patent ...................................................................................... 53
`VIII. CONCLUSION ........................................................................................... 54
`
`2.
`
`2.
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`IPR2018-00690
`Patent No. 6,314,289
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Cases
`Apple Inc. v. OpenTV, Inc.,
`IPR2015-00969, Paper No. 8 (Sep. 23, 2015) .................................................... 52
`Atlanta Gas Light Co. v. Bennett Regulator Guards, Inc.,
`IPR2013-00453, Paper No. 88 (Jan. 6, 2015) ......................................... 14, 15, 23
`Belden Inc. v. Berk-Tek LLC,
`805 F.3d 1064 (Fed. Cir. 2015) .......................................................................... 49
`Catalina Marketing International, Inc. v. Coolsavings.com, Inc.,
`289 F.3d 801 (Fed. Cir. 2002) ............................................................................ 41
`Cisco Sys., Inc. v. C-Cation Techs., LLC,
`IPR2014-00454, Paper No. 12 (Aug. 29, 2014) ................................................. 42
`Cordelia Lighting, Inc. v. Cooper Lighting, LLC,
`IPR2017-01860, Paper No. 15 (Feb. 14, 2018) .................................................. 53
`Cultec, Inc. v. Stormtech LLC,
`IPR2017-00526, Paper No. 14 (Jul. 17, 2017) ........................... 29, 30, 31, 32 , 33
`Daifuku Co., Ltd. et al. v. Murata Machinery, Ltd.,
`IPR2015-01538, Paper No. 11 (Jan. 19, 2016) ....................................... ......11, 22
`Dynamic Drinkware, LLC v. National Graphics, Inc.,
`800 F.3d 1375 (Fed. Cir. 2015) .............................................................. 51, 52, 54
`Eaton Corp. v. Rockwell Int’l Corp.,
`323 F.3d 1332 (Fed. Cir. 2003) .......................................................................... 39
`Fidelity Nat’l Info. Servs., Inc. v. Datatreasury Corp.,
`IPR2014-00489, Paper No. 9 (Aug. 13, 2014) ................................................... 42
`Galderma S.A. v. Allergan Industrie,
`IPR2014-01422, Paper No. 14 (Mar. 5, 2015) ............................................passim
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`Intelligent Bio-Sys, Inc. v. Illumina Cambridge Ltd.,
`821 F.3d 1359 (Fed. Cir. 2016) .......................................................................... 47
`In re Kahn,
`441 F.3d 977 (Fed. Cir. 2006) ................................................................ 47, 48, 50
`Kingbright Elecs. Co. Ltd. v. Cree, Inc.,
`IPR2015-00751, Paper No. 8 (Aug. 10, 2015) ................................................... 49
`KSR Int’l Co. v. Teleflex Inc.,
`550 U.S. 398 (2007) ...................................................................................... 46, 47
`Marrin v. Griffin,
`599 F.3d 1290 (Fed. Cir. 2010) .......................................................................... 40
`Masterimage 3D, Inc. v. RealD Inc.,
`IPR2015-00035, Paper No. 79 (Apr. 20, 2016) ...................................... 51, 52, 53
`In re Nuvasive, Inc.,
`842 F.3d 1376 (Fed. Cir. 2016) .......................................................................... 47
`Panasonic Corp. v. Optical Devices, LLC,
`IPR2014-00302, Paper No. 9 (Jul. 11, 2014) ..................................................... 48
`Personal Web Techs., LLC v. Apple, Inc.,
`848 F.3d 987 (Fed. Cir. 2017) ............................................................................ 49
`Phillips v. AWH Corp.,
`415 F.3d 1303 (Fed. Cir. 2005) (en banc) .................................................... 38, 39
`Pitney Bowes, Inc. v. Hewlett-Packard Co.,
`182 F.3d 1298 (Fed. Cir. 1999) .......................................................................... 39
`Radware, Inc. v. F5 Networks, Inc.,
`IPR2017-01185, Paper No. 9 (Oct. 11, 2017) ........................................ 3, 4, 7, 18
`Samsung Elecs. Co., Ltd. v. Black Hills Media, LLC,
`IPR2014-00737, Paper No. 16 (Nov. 4, 2014) ................................................... 48
`Terremark North America LLC v. Joao Control & Monitoring Sys.,
`LLC,
`IPR2015-01482, Paper No. 10 (Dec. 28, 2015) ............................................ 27, 33
`
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`IPR2018-00690
`Patent No. 6,314,289
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`Teva Pharms. USA Inc. v. Monosol RX, LLC,
`IPR2016-00281, Paper No. 21 (May 23, 2016) ............................................ 26, 33
`Zerto, Inc. v. EMC Corp.,
`IPR2014-01254, Paper No. 35 .......................................................................... 5, 7
`Zoll Lifecor Corp. v. Philips Elec. N. Am. Corp.,
`IPR2013-00606, Paper No. 13 (Mar. 10, 2014) ..........................................passim
`Statutes
`35 U.S.C. § 42.15(a) ................................................................................................ 31
`35 U.S.C. § 102(e) ................................................................................................ 1, 51
`35 U.S.C. § 103 .......................................................................................................... 1
`35 U.S.C. § 112 ........................................................................................................ 52
`35 U.S.C. § 312(a) ............................................................................................... 4, 25
`35 U.S.C. § 314(a) ................................................................................................... 54
`35 U.S.C. § 315(b) ............................................................................................passim
`Rules and Regulations
`37 C.F.R. § 42 ...................................................................................................passim
`Other Authorities
`77 Fed. Reg. 48,680, 48,689 (Aug. 14, 2012) ......................................................... 24
`Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756
`(Aug. 14, 2012) ..................................................................................... 4, 5, 48, 50
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`IPR2018-00690
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`EXHIBIT LIST
`
`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
`
`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
`PTAB E2E Search Result for AIA Review Number:
`IPR2016-00690, https://ptab.uspto.gov/#/login (search
`“AIA Review #” for “IPR2016-00690”) (retrieved June 6,
`2018)
`PTAB E2E Search Result for AIA Review Number:
`IPR2016-00690, https://ptab.uspto.gov/#/login (search
`“AIA Review #” for “IPR2016-00690”) (retrieved April 18,
`2018)
`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
`
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`IPR2018-00690
` Patent No. 6,314,289
`
`Fraunhofer Ex.
`2014
`
`Fraunhofer Ex.
`2015
`
`Fraunhofer Ex.
`2016
`Fraunhofer Ex.
`2017
`
`Fraunhofer Ex.
`2018
`
`Fraunhofer Ex.
`2019
`
`Fraunhofer Ex.
`2020
`
`Fraunhofer Ex.
`2021
`
`Fraunhofer Ex.
`2022
`Fraunhofer Ex.
`2023
`
`Fraunhofer Ex.
`2024
`
`Fraunhofer Ex.
`2025
`
`Defendant Sirius XM Radio Inc.’s Corporate Disclosure
`Statement Pursuant to Rule 7.1 of the Federal Rules of
`Civil Procedure, April 25, 2017
`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
`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
`
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`Patent No. 6,314,289
`
`Fraunhofer Ex.
`2026
`
`Fraunhofer Ex.
`2027
`
`Fraunhofer Ex.
`2028
`
`Fraunhofer Ex.
`2029
`
`Fraunhofer Ex.
`2030
`Fraunhofer Ex.
`2031
`
`Fraunhofer Ex.
`2032
`
`Fraunhofer Ex.
`2033
`
`Global Interactive Media, Inc. v. Sirius XM Holdings Inc.,
`1:16-cv-06379-JGK (N.D. of Ill.), Complaint Filed June 30,
`2016
`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
`Revised Joint Claim Construction Chart, Fraunhofer-
`Gesellschaft zur Förderung der Angewandten Forschung
`E.V. v. Sirius XM Radio Inc., Case No. 17-cv-184-JFB-
`SRF, Dkt. 112 (D. Del. Feb. 9, 2018).
`
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`IPR2018-00690
` Patent No. 6,314,289
`
`STATEMENT OF MATERIAL FACTS IN DISPUTE
`Petitioner Sirius XM Radio Inc. did not submit a statement of material facts
`
`in this Petition. Accordingly, no response is due pursuant to 37 C.F.R. § 42.23(a),
`
`and no facts are admitted.
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`IPR2018-00690
`Patent No. 6,314,289
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`I.
`
`INTRODUCTION
`The Patent Trial and Appeal Board (“Board”) should decline to institute trial
`
`because the Petition fails to establish a reasonable likelihood that Sirius XM Radio
`
`Inc. (“Sirius XM” or “Petitioner”) would carry its burden to show that any claim of
`
`U.S. Patent No. 6,314,289 (Ex. 1002, “the ’289 Patent”) is not patentable.
`
`The Petition asserts three separate grounds: Ground 1, alleging that claims 1-
`
`15, 17-33, and 35 are obvious under 35 U.S.C. § 103 over Chen (Ex. 1004) in view
`
`of Campanella (Ex. 1005); Ground 2, alleging claims 1-6, 8-14, 17-23, 25-32, and
`
`35 are anticipated under 35 U.S.C. § 102(e) over Smallcomb (Ex. 1003); and
`
`Ground 3, alleging claims 1-15, 17-33, and 35 are obvious under 35 U.S.C. § 103
`
`over Smallcomb in view of Campanella.
`
`The Petition fails to demonstrate a reasonable likelihood of success in
`
`prevailing to prove invalidity of any of the claims of the ’289 patent due to a
`
`number of serious procedural and substantive defects. By way of example, the
`
`Petition:
`
`• fails to name all real parties-in-interest in the proceeding;
`
`• is time-barred for failure to timely file a petition accompanied by the
`
`required fees within the statutory one-year period;
`
`• fails to prove that at least one reference (Ex. 1003 [Smallcomb],
`
`underlying Grounds 2 and 3) qualifies as prior art;
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`Patent No. 6,314,289
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`• advances allegations of obviousness based on improper expert
`
`testimony and attorney arguments that are conclusory and
`
`unsupported by underlying facts or evidence.
`
`To the extent that the Board even finds it necessary to reach the merits of
`
`Petitioner’s arguments, these arguments are based on conclusory statements
`
`focused on superficial similarities of the cited art and alleged advantages of Patent
`
`Owner’s invention, without any articulated reasoning as to why a person having
`
`ordinary skill in the art would recognize the proposed modifications and
`
`combinations as obvious. Accordingly, the Petition should be dismissed on the
`
`merits because the Petition has failed to make a prima facie showing that the
`
`challenged claims are anticipated or rendered obvious under any of the asserted
`
`grounds. To be clear, this is not a situation in which there is proper evidence
`
`presented by the Petition that Patent Owner simply disputes. The Petition fails to
`
`present anything other than conclusory assertions on key elements of its theories.
`
`II.
`
`THE PETITION IS DEFECTIVE BECAUSE IT FAILS TO NAME
`ALL REAL PARTIES-IN-INTEREST
`As an initial matter, the Petition should be dismissed because it fails to
`
`disclose all real parties-in-interest, including two entities closely related to
`
`Petitioner: Sirius XM Holdings Inc. (“SXM Holdings”) and Liberty Media Inc.
`
`(“Liberty”). As demonstrated below, the serious blurring of corporate boundaries
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`Patent No. 6,314,289
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`between SXM Holdings and Liberty and Petitioner reflects a high degree of control
`
`over disputes involving Petitioner, which is more than enough in this case to
`
`qualify each of these parties as a real party-in-interest (“RPI”).
`
`Moreover, Petitioner’s failure to disclose these parties was hardly an
`
`inadvertent mistake. In the concurrent district court proceedings, Petitioner duly
`
`identified both SXM Holdings and Liberty in its corporate disclosure statement.
`
`However, Petitioner later filed inter partes review petitions against the asserted
`
`patents that did not disclose these two entities to the Board. When confronted with
`
`this omission in an earlier one of those proceedings, Petitioner did not move to
`
`correct, but rather insisted that the omission was intentional, as the two undisclosed
`
`entities would not be subject to any“§ 315(e) estoppel concerns.” IPR2018-00682,
`
`Petitioner’s Reply to POPR (Paper No. 9) at 4. In other words, Petitioner
`
`deliberately withheld a full and complete RPI disclosure as part of an improper
`
`attempt to keep SXM Holdings and Liberty free to file a subsequent petition if the
`
`first one proved unsuccessful. This is not right. Radware, Inc. v. F5 Networks,
`
`Inc., IPR2017-01185, Paper No. 9, at 17 (Oct. 11, 2017) (disclosure requirement
`
`designed to protect patent owners “from harassment via successive petition[s] by
`
`the same or related parties”).
`
`The Board should reject Petitioner’s approach and dismiss the Petition for
`
`failure to satisfy the statutory RPI requirement.
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`IPR2018-00690
`Patent No. 6,314,289
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`Legal Standard
`A.
`A petition for inter partes review “may be considered only if … the petition
`
`identifies all real parties-in-interest.” 35 U.S.C. § 312(a)(2).1 This requirement
`
`serves a number of important purposes, including assisting the Board in identifying
`
`potential conflicts, assuring proper application of statutory bar and estoppel
`
`provisions, and assessing the credibility of evidence presented in a proceeding.
`
`See Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,759 (Aug. 14,
`
`2012); Zoll Lifecor Corp. v. Philips Elec. N. Am. Corp., IPR2013-00606, Paper No.
`
`13, at 12 (Mar. 10, 2014). Full and timely disclosure of all real parties-in-interest
`
`is necessary “to protect the integrity of both the USPTO and Federal Courts by
`
`assuring that all issues are promptly raised and vetted.” 77 Fed. Reg. at 48,759.
`
`The petitioner is the party that bears the “burden … to establish that it has
`
`complied with the statutory requirement to identify all the real parties-in-interest.”
`
`Galderma S.A. v. Allergan Industrie, SAS, IPR2014-01422, Paper No. 14, at 5
`
`(Mar. 5, 2015). Once a patent owner “reasonably brings into question” the
`
`accuracy of an RPI disclosure, the petitioner must present evidence sufficient to
`
`satisfy its “burden of persuasion” on this point. Radware, Inc. v. F5 Networks,
`
`1 All emphasis in quoted material in this paper has been added except where
`
`expressly noted otherwise.
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`Inc., IPR2017-01185, Paper No. 9, at 17 (Oct. 11, 2017). This evidentiary
`
`requirement has teeth; for example, “uncorroborated testimonial evidence” has
`
`been found inadequate to satisfy this burden, especially because a petitioner “is far
`
`more likely to be in possession of, or have access to, relevant evidence than is a
`
`patent owner.” Id. at 18-19.
`
`The question of whether an entity is a real party-in-interest is a “highly fact
`
`dependent question.” 77 Fed. Reg. at 48,759. “A common consideration [in this
`
`analysis] is whether the non-party exercised or could have exercised control over
`
`a party’s participation in a proceeding.” Id. From a practical standpoint, this
`
`inquiry often involves examination of “shared corporate leadership” and whether
`
`the entities involved have become “so intertwined that it is difficult … to
`
`determine precisely where one ends and another begins.” Galderma, IPR2014-
`
`01422, Paper No. 14, at 8. Thus, a company may be deemed a real party-in-
`
`interest where its relationship with the petitioner is sufficiently blurred that the two
`
`companies “effectively operate as a single entity.” Zerto, Inc. v. EMC Corp.,
`
`IPR2014-01254, Paper No. 35, at 14.
`
`The statutory requirement to disclose all real parties-in-interest is a
`
`“threshold issue” that must be satisfied as a predicate to any substantive review of
`
`the merits of any challenges presented in a petition. See Zoll Lifecor, IPR2013-
`
`00606, Paper No. 13, at 8; Galderma, IPR2014-01422, Paper No. 14, at 5.
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`IPR2018-00690
`Patent No. 6,314,289
`
`Factual and Procedural Background
`B.
`Patent Owner filed an infringement suit against Petitioner on February 22,
`
`2017, asserting four patents including the ’289 patent. Ex. 2002-10 to -12
`
`(complaint alleging infringement of the ’289 patent). In that litigation, Petitioner
`
`filed a corporate disclosure with the district court stating that Sirius XM Holdings
`
`Inc. “owns 100% of the common stock of Sirius XM Radio Inc.” Ex. 2014-1; see
`
`also 2005-4, 2017 SEC Form 10-K for SXM Holdings (acknowledging that Sirius
`
`XM is a “wholly-owned subsidiary” of Sirius XM Holdings Inc.).2 This corporate
`
`disclosure further identified Liberty Media Corporation as a substantial owner of
`
`SXM Holdings. Ex. 2014-1; see also Ex. 2005-4, -28 (acknowledging that Liberty
`
`is the beneficial owner of “approximately 70% of the outstanding shares of [SXM]
`
`Holdings’ common stock”).
`
`Petitioner subsequently filed petitions for inter partes review on all four
`
`asserted patents. See Pet. at 1; see also IPR2018-00681, IPR2018-00682,
`
`IPR2018-00689. In all of these petitions, Sirius XM is the sole Petitioner and only
`
`real party-in-interest identified to the Board. Pet. at 6. None of the petitions
`
`2 Retrievable from: https://www.sec.gov/Archives/edgar/data/908937/
`
`000090893718000014/siri-20171231x10k.htm. See also Ex. 2006-2, 2013 SEC
`
`Form 8-K for SXM Holdings.
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`IPR2018-00690
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`disclose or mention SXM Holdings or Liberty.
`
`Patent Owner submitted a preliminary response in IPR2018-00681 and
`
`IPR2018-00682 on June 8, 2018, and raised Petitioner’s failure to fully disclose all
`
`real parties-in-interest (among other deficiencies). See, e.g., IPR2018-00682,
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`Paper No. 8, at 4-20. Petitioner sought leave to submit a reply in both cases to
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`address the RPI issue, and filed its replies on June 28, 2018. See, e.g., IPR2018-
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`00682, Paper No. 9, at 1-4. Patent Owner has been authorized to submit a sur-
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`reply in these cases no later than July 6, 2018.
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`Notably, Petitioner has not filed any motion to amend its RPI disclosure in
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`any of its cases against Patent Owner (including this one). Petitioner instead
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`persists in arguing that its original disclosure listing only Sirius XM is entirely
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`correct. See, e.g., IPR2018-00682, Paper No. 9, at 1-4.
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`SXM Holdings Is A Real Party-In-Interest
`C.
`SXM Holdings is clearly a real party-in-interest in this case, as it is so
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`“intertwined” with Petitioner that the two “effectively operate as a single entity.”
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`Zerto, IPR2014-01254, Paper No. 35, at 14. Such a relationship tends to show that
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`“an actual measure of control or opportunity to control the filing of and
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`participation in an IPR might reasonably be expected”—a factor that weighs
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`strongly in favor of real party-in-interest status. See, e.g., Radware, IPR2017-
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`01185, Paper No. 9, at 7.
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`IPR2018-00690
`Patent No. 6,314,289
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`There is ample evidence that SXM Holdings is (and presents itself as) an
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`operating entity whose functions overlap so extensively with Petitioner that it is
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`difficult to discern where one entity ends and the other begins. For example, SXM
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`Holdings submits regular filings to the SEC that jointly provide required
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`information and financial disclosures for itself and Sirius XM in a single,
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`consolidated fashion. Ex. 2005-4 (“‘[W]e,’ “us,” “our,” and “our company” as
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`used herein . . . refer to Sirius XM Holdings Inc. and its subsidiaries.”). Notably,
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`Petitioner does not make available any public reports with this information and
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`does not make any financial disclosures to the SEC, other than those submitted by
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`SXM Holdings.3
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`These filings from SXM Holdings include a section entitled “Management’s
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`Discussion and Analysis of Financial Condition and Results of Operations,” which
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`provides a description of their satellite radio business and operations: “[w]e
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`transmit music, sports entertainment, comedy, talk, news, traffic and weather
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`channels, as well as infotainment services, in the United States on a subscription
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`3 Sirius XM Holdings, Inc. is a publicly traded company whose shares are
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`listed on the NASDAQ exchange under the ticker SIRI. Petitioner does not have
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`publicly traded shares and is not listed on any exchange. Ex. 2021,
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`https://www.nasdaq.com/symbol/siri/real-time
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`fee basis through our two proprietary satellite radio systems,” “[w]e also acquire
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`IPR2018-00690
`Patent No. 6,314,289
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`subscribers through marketing,” “[w]e have agreements with every major
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`automaker,” and “[o]ur primary source of revenue is subscription fees.” Ex. 2005-
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`4.; see Zoll Lifecor, IPR2013-00606, Paper No. 13, at 15 (corporate parent deemed
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`real party-in-interest where parent and subsidiary “repeatedly held themselves out
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`… as a single entity”).
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`SXM Holdings and Petitioner are also jointly involved in legal matters,
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`including lawsuits that name only Sirius XM (and not SXM Holdings) as a
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`defendant. For example, SXM Holdings states in its SEC filings that “we are a
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`defendant” in a variety of legal proceedings:
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`ITEM 3. LEGAL PROCEEDINGS
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`In the ordinary course of business, we are a defendant
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`or party to various claims and lawsuits, including the
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`following discussed below. …
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`This matter is captioned SoundExchange, Inc. v. Sirius
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`XM Radio, Inc., No.13-cv-1290-RJL (D.D.C.) …
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`This matter is titled SoundExchange, Inc. v. Sirius XM
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`Radio, Inc., No.17-cv-02666-RJL (D.D.C.) …
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`Ex. 2005-31 to -33. As another example, SXM Holdings reports that “we were a
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`defendant in several purported class action suits.” Ex. 2013-19, Securities and
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`Exchange Commission Form 10-K, Sirius XM Holdings Inc. (Feb. 2, 2017) (citing
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`IPR2018-00690
`Patent No. 6,314,289
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`cases).4 Exhibit 2013 lists the cases. Id. Again, all of these cited cases identify
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`Sirius XM as the nominal defendant, not SXM Holdings. Id.; see also Ex. 2015-1
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`(Erik Knutson v. Sirius XM Radio Inc., No. 12-cv-0418-AJB (S.D. Cal.), class
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`action complaint listing only Sirius XM as defendant); Ex. 2016-1 (Francis W.
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`Hooker v. Sirius XM Radio Inc., No. 4:13-cv-3 (E.D. Va.), class complaint listing
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`only Sirius XM as defendant); Ex. 2017-1 (Yefim Elikman v. Sirius XM Radio Inc.
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`and Career Horizons, Inc., No. 1:15-cv-02093 (N.D. Ill.), Second Amended Class
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`Action Complaint listing Sirius XM as defendant); Ex. 2018-1 (Anthony Parker v.
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`Sirius XM Radio Inc., No. 8:15-cv-01710-JSM-EAJ (M.D. Fla), Class Action
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`Complaint listing only Sirius XM as defendant). SXM Holdings goes on to admit
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`that its legal involvement extends to other cases involving intellectual property:
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`“[W]e are a defendant in various other lawsuits and arbitration proceedings,
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`including … actions filed by … owners of patents, trademarks, copyrights or
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`other intellectual property matters.” Ex. 2013-19.
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`With statements such as these, SXM Holdings demonstrates itself to be “an
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`involved and controlling parent corporation representing the unified interests of
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`
`4 Retrieved from: https://www.sec.gov/Archives/edgar/data/908937/
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`000090893717000009/siri-20161231x10k.htm
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`IPR2018-00690
`Patent No. 6,314,289
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`itself and Petitioner,” or at least that it “exercised or could have exercised control
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`over a party’s participation” with regard to intellectual property challenges such as
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`the instant IPR proceeding. See Zoll Lifecor, IPR2013-00606, Paper No. 13, at 10;
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`Galderma, IPR2014-01422, Paper No. 14, at 5. The Board has specifically stated
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`that an entity may be deemed a real party-in-interest when it “assumes control of
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`litigation brought against” another company. Daifuku Co., Ltd. et al. v. Murata
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`Machinery, Ltd., IPR2015-01538, Paper No. 11, at 12 (Jan. 19, 2016) (cited by
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`Petitioner).
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`Beyond these general representations about its involvement in legal matters
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`impacting Petitioner, SXM Holdings also specifically admits that it participates in
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`settlement negotiations and payment of settlement amounts—even where the suits
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`name only its wholly-owned subsidiary Sirius XM as a defendant: “We have
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`entered into an agreement to settle these purported class action suits. … As part
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`of this settlement, we made a $35 million payment to a settlement fund ….” Ex.
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`2013-19. Despite the fact that SXM Holdings admits to entering into and funding
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`the settlements, the final order approving the settlements lists only Sirius XM as
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`the sole defendant. See Ex. 2019-1, Final Order Approving Settlement and
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`Certifying the Settlement Class, December 22, 2016. And there is little question
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`that SXM Holdings has the same ability to control the disposition of patent cases
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`involving Sirius XM, as SXM Holdings has affirmatively noted that “[o]ther
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`parties may have patents or pending patent applications, which will later mature
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`IPR2018-00690
`Patent No. 6,314,289
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`into patents or inventions that may block or put limits on our ability to operate our
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`system” and that “[w]e may have to resort to litigation to enforce our rights . . . .”
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`Ex 2005-29. Thus, SXM Holdings has unequivocally demonstrated that it has
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`substantial control over legal disputes involving its subsidiary Sirius XM—
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`including the ability to affirmatively settle cases involving Sirius XM such as this
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`IPR proceeding.
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`SXM Holdings and Petitioner also have a shared corporate structure that
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`further facilitates a level of control over Petitioner far beyond what would be
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`possible in a typical parent-subsidiary relationship. Indeed, the level of overlap is
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`striking: at least nine of the executive officers of SXM Holdings and Sirius XM
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`are identical. The following is a list of executive officers of Petitioner Sirius XM:
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`Ex. 2008-2, Joint Filing Agreement to Schedule 13D (Sept. 22, 2017).5 The names
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`IPR2018-00690
`Patent No. 6,314,289
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`and titles are exactly the same for all nine officers of SXM Holdings:
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`
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`
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`Ex. 2008-3; see also Ex. 2007-6, -11, Schedule 13D (Sept. 22, 2017).6
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`5 Retrievable from: https://www.sec.gov/Archives/edgar/data/1230276/
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`000119312517301078/d458882dex99a.htm. Exhibit 2004 is listed as Exhibit A to
`