Paper No. 39
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`________________
`
`APPLE INC.,
`
`Petitioner,
`
`v.
`
`UNIVERSAL SECURE REGISTRY LLC
`Patent Owner
`________________
`
`Case IPR2018-00812
`U.S. Patent No. 8,856,539
`________________
`
`PATENT OWNER’S MOTION TO STRIKE
`IMPROPER NEW EVIDENCE AND ARGUMENT
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`________________
`
`APPLE INC.,
`
`Petitioner,
`
`v.
`
`UNIVERSAL SECURE REGISTRY LLC
`Patent Owner
`________________
`
`Case IPR2018-00812
`U.S. Patent No. 8,856,539
`________________
`
`PATENT OWNER’S MOTION TO STRIKE
`IMPROPER NEW EVIDENCE AND ARGUMENT
`
`
`
`Case No. IPR2018-00812
`U.S. Patent No. 8,856,539
`
`As authorized by the Board, Patent Owner Universal Secure Registry, L.L.C.
`
`(“PO”) moves to strike belatedly proffered argument and evidence that Apple Inc.
`
`(“Petitioner”) waited to include in Petitioner’s conditional motion to amend sur-
`
`reply (Paper 36) (“MTA Sur-Reply”). Exhibit 2114, submitted herewith, is a
`
`version of Petitioner’s MTA Sur-reply that highlights the new argument and
`
`evidence that PO seeks to strike.
`
`Both governing law and PTAB practice prohibit Petitioner from submitting
`
`argument in reply that could have presented earlier. Failure to strike these belated
`
`arguments is prejudicial as PO cannot respond to these new arguments.
`
`I.
`
`THE BOARD SHOULD STRIKE APPLE’S BELATED ARGUMENT
`The governing statute requires a petition to identify “with particularity…the
`
`evidence that supports the grounds for the challenge to each claim. . . .” 35 U.S.C.
`
`§ 312(a)(3)(B) (emphasis added). The Trial Practice Guide (Aug. 2018 Update)
`
`(“TPG”) is in accord. Id. at 14 (“Petitioner may not submit new evidence or
`
`argument in reply that it could have presented earlier, e.g. to make out a prima
`
`facie case of unpatentability.”). See also SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348,
`
`1356 (2018) (“petitioner’s petition, not the Director’s discretion, is supposed to
`
`guide the life of the litigation.”) (emphasis added); cf. Dexcom, Inc. v. Waveform
`
`Techs., Inc., IPR2016-01680 (Paper 46) at 30 (PTAB Feb. 28, 2018) (excluding
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`1
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`Case No. IPR2018-00812
`U.S. Patent No. 8,856,539
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`evidence raised for first time in a reply brief), aff’d Dexcom, Inc. v. Waveform
`
`Technologies, Inc., 760 Fed. Appx. 1023 (Fed. Cir. Apr. 3, 2019) (per curiam).
`
`Here, Petitioner waited until its MTA Sur-Reply to introduce new
`
`motivations to combine for claim limitations 39[b] and 39[c] and new reasons why
`
`Reber and Franklin teach limitations 39[e]-[f]. There is no reason Apple could not
`
`have presented these arguments in its Opposition (Paper 29). The rules are clear;
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`this tardy evidence should be stricken. See TPG at 18. Further, as PO cannot rebut
`
`this new argument with expert opinion, failure to strike would be highly
`
`prejudicial. Cf. Realtime Data, LLC v. Iancu, 912 F.3d 1368, 1373 (Fed. Cir.
`
`2019); Dexcom, Inc., IPR2016-01680 at 30.
`
`New Motivations To Combine
`A.
`First, Apple argues in its Opposition that a POSITA would combine Reber’s
`
`first and second embodiments to achieve claim limitation 39[b]. Opp. at 4-5 (citing
`
`to Pet., 33-35). With respect to motivation to combine, Petitioner merely proffered
`
`a footnote. See Opp. n.2 (“As explained previously, the cited portions of Reber
`
`would have been obvious
`
`to combine. Pet., 23-31, 33-35; POR Reply
`
`II(A)(4)(b).”). Not only is such incorporation by reference prohibited (see 37
`
`C.F.R. §42.6(a)(3)), the citation is to 12 pages of the Petition and several pages of
`
`the Reply; thus, it is unclear to which motivations to combine Petitioner is
`
`2
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`Case No. IPR2018-00812
`U.S. Patent No. 8,856,539
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`referring. Instead, Petitioner waited until the MTA Sur-Reply to explain the precise
`
`alleged reasons to combine. See Ex. 2114 at 3. PO objects to this new argument
`
`and evidence as prejudicial. Not only does this tactic circumvent an opposition’s
`
`page limits (37 C.F.R. § 42.24(b)(3)), it deprives PO of an opportunity to respond.
`
`Second, Petitioner provides new arguments in its MTA Sur-Reply (Ex. 2114
`
`at 5) as to why a POSITA would combine Reber and Franklin to achieve limitation
`
`39[c] that it failed to disclose in its Opposition. Compare Opp. at 8 (“Incorporating
`
`the time information into Reber’s one-time code would have increased efficiency
`
`since it would have eliminated the need to separately receive time data with the
`
`transaction. A POSITA would have had a reasonable expectation of success
`
`because both Reber and Franklin disclose that various types of information can be
`
`ascertained from transmitted codes for use by the receiving party”) with MTA Sur-
`
`Reply at 5 (“For a POSITA designing a system in view of Reber and Franklin, the
`
`need to generate an identical MAC value for comparison and validation (as
`
`described in Franklin) and a transaction record with time information (as disclosed
`
`in Reber) would have supplied the necessary motivation (and expectation of
`
`success) to include a time value in the transaction request for extraction.”).
`
`Petitioner also cannot argue these new motivations to combine are
`
`responsive—PO’s Reply carefully explained why Apple’s original motivations to
`
`3
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`
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`Case No. IPR2018-00812
`U.S. Patent No. 8,856,539
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`combine are unavailing. See MTA Reply (Paper 34) at 6-11. Petitioner’s failure to
`
`provide persuasive reasons why a POSITA would combine Reber and Franklin in
`
`its Opposition does not warrant introducing new, unrelated motivations to combine
`
`in its MTA Sur-reply. Accordingly, these new arguments should be stricken.
`
`B.
`
`New Arguments for Validate Then Restrict Access Limitation
`
`Regarding claim limitation 39[e]-[f], Petitioner’s Opposition only argued
`
`that “a POSITA would have found it obvious to use the received transaction data
`
`of Reber to ensure both that the merchant is trustworthy [validate an identity of
`
`the provider] and is entitled to access the data needed to conduct the transaction
`
`[restriction mechanism/access restrictions].” Opp. at 8-9 (emphasis in original).
`
`The MTA Sur-Reply took a new direction, arguing “Franklin discloses that once a
`
`merchant is validated, the secure registry also compares the received MAC to a
`
`generated test MAC to ensure that the transacting parties are entitled to access the
`
`data needed to complete the transaction. Id. at ¶25; Ex-1132, Franklin, 12:17-27.”
`
`Ex. 2114 at 7. The Opposition’s argument that Reber’s transaction data ensures
`
`both that the merchant is trustworthy and entitled to data access is unrelated to the
`
`MTA Sur-Reply’s argument that Franklin compares MAC values to each other.
`
`Likewise, Petitioner waited until the MTA Sur-Reply to argue that “Reber
`
`and Franklin perform both claimed steps in the same way as embodiments of the
`
`4
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`Case No. IPR2018-00812
`U.S. Patent No. 8,856,539
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`’539 patent, which authorize financial transactions after determining that a
`
`received code is valid without any separate reference to access restrictions. See,
`
`e.g., Ex-1101, ’539 patent, 11:51-65 (discussing Fig. 7), 12:24-34 (discussing Fig.
`
`8), 13:3-14 (discussing Fig. 9), 13:35-57 (discussing Fig. 10).” Id. This argument
`
`does not appear in the Opposition.
`
`Moreover, these two new arguments are not responsive to PO’s MTA Reply.
`
`In its MTA Reply, PO discussed why the Opposition’s argument that Reber’s
`
`transaction data allegedly serves to ensure the merchant is trustworthy and entitled
`
`to access fails to satisfy the limitation 39[e]-[f]. MTA Reply (Paper 34) at 11-13.
`
`PO also explained why the Opposition’s argument that Franklin discusses
`
`dishonest merchants (Ex. 1132, Franklin at 1:39-54) and the Petition’s reliance on
`
`Franklin’s acquiring bank verifying that the merchant is “valid” (Id. at 11:38-47)
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`fails to address claim limitation 39[e]-[f]. Whether Franklin’s issuing bank receives
`
`and compares MAC values and whether Reber and Franklin perform steps the
`
`same was as embodiments of the ’539 patent (e.g., FIGS. 7-10 of ’539 patent) is
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`not responsive to PO’s contentions and constitutes new argument.
`
`II.
`
`CONCLUSION
`
`The Board should strike Petitioner’s belated material as shown in Ex. 2114.
`
`5
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`
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`Case No. IPR2018-00812
`U.S. Patent No. 8,856,539
`
`Date: August 2, 2019
`
` Respectfully submitted,
`
`By: /s/ James M. Glass, Reg. No. 46,729
` James M. Glass (Reg. No. 46,729)
`QUINN EMANUEL URQUHART &
`SULLIVAN, LLP
`51 Madison Avenue, 22nd Floor
`New York, NY 10010
`Tel: (212) 849-7000
`Fax: (212) 849-7100
`Email: jimglass@quinnemanuel.com
`
`Lead Attorney for Patent Owner –
`Universal Secure Registry LLC
`
`6
`
`
`
`Case No. IPR2018-00812
`U.S. Patent No. 8,856,539
`
`CERTIFICATE OF SERVICE
`
`Pursuant to 37 C.F.R. § 42.6(e), the undersigned hereby certifies that
`
`PATENT OWNER’S MOTION TO STRIKE IMPROPER NEW EVIDENCE
`
`AND ARGUMENT was served on August 2, 2019 by e-mailing copies to:
`
`Monica Grewal (Reg. No. 40,056)
`monica.grewal@wilmerhale.com
`Ben Fernandez (Reg. No. 55,172)
`ben.fernandez@wilmerhale.com
`WilmerHale Distribution List
`wh-apple-usr-ipr@wilmerhale.com
`WILMER CUTLER PICKERING HALE AND DORR LLP
`60 State Street
`Boston, MA 02109
`
`Mark Selwyn
`mark.selwyn@wilmerhale.com
`WILMER CUTLER PICKERING HALE AND DORR LLP
`950 Page Mill Road
`Palo Alto, CA 94304
`
`Date: August 2, 2019
`
` Respectfully submitted,
`By: /s/ Razmig H. Messerian
` Razmig H. Messerian (Reg. No. 56,983)
`QUINN EMANUEL URQUHART &
`SULLIVAN, LLP
`865 S. Figueroa St., 10th Floor
`Los Angeles, CA 90017
`razmesserian@quinnemanuel.com
`
`7
`
`
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