Paper No. 23
`Filed: April 24, 2019
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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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`SONOS, INC.
`Petitioner
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`v.
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`IMPLICIT, LLC
`Patent Owner
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`IPR2018-00767
`U.S. Patent No. 8,942,252
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`PETITIONER’S OPPOSITION TO PATENT OWNER’S MOTION TO
`SUBMIT SUPPLEMENTIAL INFORMATION
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`Filed: April 24, 2019
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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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`SONOS, INC.
`Petitioner
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`v.
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`IMPLICIT, LLC
`Patent Owner
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`IPR2018-00767
`U.S. Patent No. 8,942,252
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`PETITIONER’S OPPOSITION TO PATENT OWNER’S MOTION TO
`SUBMIT SUPPLEMENTIAL INFORMATION
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`I.
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`INTRODUCTION
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`Implicit’s motion highlights its corroboration problem. Instead of engaging
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`in the appropriate diligence up front to check with other people and corroborate Mr.
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`Balassanian’s invention story, Implicit strategically chose to rely solely on Mr.
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`Balassanian and his own documents. It is simply too late and too prejudicial to allow
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`Implicit to try and fix this problem.
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`As we are well past one-month after institution, Implicit must establish that it
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`is entitled to relief under 37 C.F.R. § 42.123(b). Specifically, Implicit must show
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`“why the supplemental information reasonably could not have been obtained earlier,
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`and that consideration of the supplemental information would be in the interests-of-
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`justice.” 37 C.F.R. § 42.123(b). In deciding requests for late submission of
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`supplemental
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`information, panels “weigh both factors” and “tak[e]
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`into
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`consideration [the] mandate to construe the rules to secure the just, speedy, and
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`inexpensive resolution of every proceeding.” Mylan Pharm. Inc., v. Yeda Research
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`& Dev. Co. Ltd., IPR2015-00643, Paper 48 at 2 (PTAB Feb. 1, 2016).
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`Notably, to meet the “interest-of-justice” standard set forth in 37 C.F.R. §
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`42.123(b), Implicit must do more than merely show good cause for consideration of
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`this information. Instead, Implicit must show that it was fully diligent in its
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`discovery efforts and there would be no undue prejudice to Sonos. See Ultratec, Inc.
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`v. CaptionCall, LLC, 872 F.3d 1267, 1272 (Fed. Cir. 2017) (“‘[T]he interests-of-
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`1
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`justice standard is slightly higher than good cause . . . [t]o show good cause, a party
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`would be required to make a particular and specific demonstration of fact. Under
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`the interests-of-justice standard, the moving party would also be required to show
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`that it was fully diligent in seeking discovery and that there is no undue prejudice to
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`the [non-movant].’”) (quoting 77 Fed. Reg. 48,719 (Aug. 14, 2012)).
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`Implicit has not met these requirements.
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`II. ARGUMENT
`Implicit Has Failed to Show That It Could Not Have Reasonably
`A.
`Obtained the Evidence Earlier
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`Implicit has failed to show that it reasonably could not have obtained the
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`evidence earlier. Implicit argues merely that it did not obtain the evidence earlier.
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`But, this is not the standard.
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`Implicit could have reasonably – if not easily – obtained the Peterson Email
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`had it simply asked Dr. Peterson or Mr. Fiucynski for the email. Under the facts as
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`presented by Implicit, it was at least reasonable to have expected Implicit to conduct
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`some kind of external search, and it was at least reasonable to have expected Implicit
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`to reach out to either Dr. Peterson or Mr. Fiucynski seeking relevant documents.
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`Implicit explains that its records custodian (who is also the lead inventor of
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`the patent and the founder of Implicit and its predecessor companies), Mr.
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`Balassanian, searched his own records for relevant documents but did not uncover
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`the Peterson Email. Mot. at 4-6. This was apparently the extent of Implicit’s
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`2
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`investigation for relevant material because Implicit and Mr. Balassanian stop short
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`of explaining what, if anything, else they did to uncover relevant documents. Indeed,
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`neither Implicit nor Mr. Balassanian allege that they even asked anyone else,
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`particularly former employees and advisors, if they had relevant material. This
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`failure was unreasonable given several facts apparent from Implicit’s Motion.
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`In particular, Implicit and Mr. Balassanian knew that: (i) around the relevant
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`time period in 2001, “BeComm often migrated its email server . . . which caused
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`emails to become lost”; (ii) “Mr. Balassanian did not backup or save his emails
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`before the migration”; and (iii) “Mr. Balassanian also had a practice of deleting
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`emails throughout the day.” Mot. at 5. The presence of any one of these facts – let
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`alone all three – coupled with the fact that Implicit presented an evidence-heavy
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`swear-behind defense to rebut Sonos’s prior-art case would have suggested to a
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`reasonable party that they ought to ask previous employees or advisors for relevant
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`documents. Implicit’s failure to do so was unreasonable under the circumstances,
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`and thus belies any claim that it could not have uncovered the Peterson Email.1
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`1 Mr. Balassanian’s sudden assertions regarding lost and deleted emails is also
`inconsistent with his deposition testimony in which he testified that “[BeComm] had
`a practice of not throwing out hard drives with our computers,” and that BeComm
`“saved the hard drive[s]” and used “tape drives” to backup “servers in [BeComm’s]
`network.” Ex.1019 at 99:11-100:9.
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`3
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`Implicit alleges that it was not aware that Dr. Peterson or Mr. Fiucynski
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`“might have potentially relevant information.” Telling, however, is that neither
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`Implicit nor Mr. Balassanian allege that they forgot who these individuals were or
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`that they did not know how to contact them. Instead, Implicit and Mr. Balassanian
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`merely allege that they did not have actual knowledge that these individuals in fact
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`possessed relevant evidence. But, in view of Implicit’s apparent failure to even ask,
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`its lack of actual knowledge is insufficient to establish that “it could not reasonably
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`have obtained the Peterson Email earlier.”
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`Moreover, this is not a case where the evidence did not exist during the IPR
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`discovery period; to the contrary, the evidence has existed for over 17 years. And,
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`like the defendants in Implicit’s other litigations, all Implicit had to do to obtain this
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`evidence was ask for it.2 Because Implicit failed to conduct any semblance of a
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`reasonable investigation, its assertion that it “could not reasonably have obtained the
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`Peterson Email earlier than it did” fails. See Hyperbranch Med. Tech., Inc. v. Incept
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`LLC, IPR2016-01836, Paper 32 at 5-6 (PTAB Oct. 30, 2017) (denying motion to
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`submit late supplemental evidence because “it appears that Patent Owner was unable
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`to acquire the documents principally because it did not search for the information
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`until [too late].”).
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`2 Indeed, Dr. Peterson produced this email within two days of the subpoena’s issue-
`date. Ex.2090; Mot. at 3, 6.
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`4
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`B. Considering the Evidence Is Not in the Interests-Of-Justice
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`Implicit has fallen well short of its obligation to establish that it was fully
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`diligent in its discovery efforts. And consideration of this evidence will unduly
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`prejudice Sonos. For either or both of these reasons, Implicit’s Motion fails.
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`First, as set forth above, Implicit failed to conduct any semblance of a
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`reasonable investigation. For this reason alone, Implicit was not fully diligent. But
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`Implicit was not fully diligent for at least the additional reason that Implicit was on
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`notice of Sonos’s contention that Implicit’s evidence lacked corroboration as of
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`December 26, 2018. Paper 10 at 11 (Sonos’s objections to Implicit’s evidence
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`served with the POR, specifically objecting to Implicit’s evidence as lacking
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`sufficient corroboration and thus being inadmissible under FRE 901 and further
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`citing three cases in support).
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`Given this extraordinarily-rare early look at one of Sonos’s contentions,
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`Implicit could have conducted an investigation at that time knowing full-well Sonos
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`was intending to challenge Implicit’s lack of corroboration. And Implicit could have
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`sought the Board’s approval to submit any such uncovered supplemental
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`information. To be sure, such a request would have still been a request to submit
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`late supplemental information under 37 C.F.R. § 42.123(b). But the timing of such
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`a request may have allowed Implicit to argue that it was at least somewhat diligent
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`in its discovery efforts and may have allowed Sonos to conduct discovery on any
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`5
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`uncovered evidence prior to its March 18, 2019 Reply due-date.
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`Second, Sonos would be unduly prejudiced if the Board were to admit the
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`evidence at this juncture. Had this evidence been submitted earlier, Sonos would
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`have sought to depose either or both of Dr. Peterson and Mr. Fiucynski regarding
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`this evidence.3 Additionally, Sonos would have asked questions regarding this
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`evidence at Mr. Balassanian’s February deposition and used such testimony in
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`Sonos’s Reply. This is obviously not possible now. The oral hearing is in less than
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`two months. There is simply no time to re-open discovery on this email prior to the
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`oral hearing, nor would it be fair to delay the oral hearing, and thus the disposition
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`of this proceeding, given the Board’s mandate to “construe the rules to secure the
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`just, speedy, and inexpensive resolution of every proceeding.” Mylan, IPR2015-
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`00643, Paper 48 at 2. Post-submission briefing on the evidence’s relevance would
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`3 Implicit explains, “Implicit notified Petitioner in advance of Dr. Peterson’s March
`11, 2019 deposition, but Petitioner did not attend.” This is misleading. Implicit
`notified Sonos (while Sonos’s counsel was in Denver to depose Implicit’s expert) at
`10:02 PM on Thursday, March 7 that Dr. Peterson was being deposed in Tucson on
`Monday, March 11. Ex.1027 No part of the emails advising of Dr. Peterson’s and
`Mr. Fiucynski’s depositions indicated that Sonos was permitted to attend or ask
`questions at these depositions. These were depositions scheduled and taken pursuant
`to subpoenas issued (not by Implicit) in unrelated district court litigations, to which
`Sonos was not a party. Implicit offered no assurances that Sonos would be permitted
`to question the witnesses, nor did the email even indicate that Sonos was invited.
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`6
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`not cure the prejudice either given that Sonos would have no opportunity to test the
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`veracity or the memories of the relevant individuals. See Redline Detection, LLC v.
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`Star Envirotech, No. IPR2013-00106, Paper 35 at 9 (PTAB. June 30, 2014) (“The
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`process for submitting supplemental information does not rely on post-submission
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`briefing to avoid prejudice . . .”), aff’d, 811 F.3d 4354 (Fed. Cir. 2015).
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`Worse, Implicit has now compounded this prejudice by twice improperly
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`arguing the substance and relevance of this evidence, despite the Board’s
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`admonishment that “the supplemental information at issue shall not be filed as
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`exhibits.” Paper 19 at 3. Indeed, Implicit spent several pages of its eight-page
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`Motion summarizing, block quoting, and re-litigating its corroboration position in
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`view of “the Peterson Email.” Mot. at 1, 3-4, 7. And in its Sur-Reply, Implicit
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`argued again that it satisfied the corroboration requirement because of “the Peterson
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`Email,” specifically block quoting portions thereof. Paper 22 at 4. This is
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`exceedingly prejudicial as Sonos has no opportunity to address the underlying
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`substance of the supplemental evidence.
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`C. Admitting the Evidence Would Be Futile
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`Finally, it would be futile to admit the Peterson Email as it is not authenticated,
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`suffers from double hearsay, and is not relevant to the claimed inventions at issue in
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`this IPR. For instance, Dr. Peterson’s litigation deposition testimony does not
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`authenticate or establish a hearsay exception for the email, nor is such testimony
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`7
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`even evidence in this proceeding.4 Likewise, Mr. Balassanian clearly cannot
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`authenticate or establish a hearsay exception for the Peterson Email, as he admits
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`that he does not recall ever receiving it and that he could not even find a copy of it
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`after multiple searches. Mot. at 5.
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`There is also no indication that the Peterson Email is relevant to the inventions
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`claimed in either of the patents at issue in this IPR. Indeed, by Implicit’s own
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`admission, the email is between two individuals that were not “involved in the
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`development that led to the inventions.” Mot. at 4. Not surprisingly, the email fails
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`to discuss any synchronization of content between a master device and a slave device
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`using device times and rendering times, as required by the claims. Instead, it merely
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`states, “Guy Carpenter came up with a scheme to synchronize media across
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`networked machines.” Thus, it does not corroborate the inventions at issue here.5
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`4 Specifically, Implicit points to page 9, but this testimony is merely the parties’
`counsel stipulating to not challenge authenticity in their eventual trial. It is unclear
`how two parties’ stipulation to not raise an evidentiary challenge at trial would serve
`to authenticate the evidence in a wholly separate proceeding with different parties.
`5 If Implicit wanted to remedy its corroboration problem, it should have sought the
`testimony of Mr. Carpenter, who was actually involved in the development behind
`the inventions, rather than a generic email between the uninvolved Dr. Peterson and
`Mr. Fiucynski. Implicit’s failure to secure such testimony from Mr. Carpenter is
`telling, as Implicit’s counsel has recently been in contact with and represents Mr.
`Carpenter in connection with these proceedings. Ex.1021.
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`8
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`Date: April 24, 2019
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`/Cole B. Richter/
`Rory P. Shea (USPTO Reg. No. 60,529)
`Cole B. Richter (USPTO Reg. No. 65,398)
`George I. Lee (USPTO Reg. No. 39,269)
`Michael P. Boyea (USPTO Reg. No. 70,248)
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`LEE SULLIVAN SHEA & SMITH LLP
`656 West Randolph Street, Floor 5W
`Chicago, Illinois 60661
`Tel: (312) 754-9602
`Fax: (312) 754-9603
`shea@ls3ip.com
`richter@ls3ip.com
`lee@ls3ip.com
`boyea@ls3ip.com
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`Attorneys for Petitioner Sonos, Inc.
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`9
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`CERTIFICATE OF SERVICE
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`In accordance with 37 CFR §42.6(e)(4), I hereby certify that on April 24,
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`2019, a true copy of the accompanying OPPOSITION, was served via electronic
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`mail to the following counsel at the addresses designated for service by Patent
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`Owner:
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`William E. Davis, III
`THE DAVIS FIRM, PC
`213 N. Fredonia Street, Suite 230
`Longview, Texas 75601
`bdavis@davisfirm.com
`Lead Counsel
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`Christian Hurt
`THE DAVIS FIRM, PC
`213 N. Fredonia Street, Suite 230
`Longview, Texas 75601
`churt@bdavisfirm.com
`sue@davisfirm.com
`Back-Up Counsel
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`/Cole B. Richter/
`Cole B. Richter (USPTO Reg. No. 65,398)
`LEE SULLIVAN SHEA & SMITH LLP
`656 West Randolph Street, Floor 5W
`Chicago, Illinois 60661
`Tel: (312) 754-9602
`Fax: (312) 754-9603
`richter@ls3ip.com
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`Date: April 24, 2019
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