throbber

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`Paper No. 12
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`
`
`
`MICROSOFT CORPORATION
`Petitioner,
`v.
`SAINT REGIS MOHAWK TRIBE,
`Patent Owner.
`
`
`
`
`
`
`IPR2018-01607
`Patent 7,620,800 B2
`
`
`
`
`
`
`PETITIONER MICROSOFT CORPORATION’S OPPOSITION TO
`PATENT OWNER’S MOTION TO EXTEND ITS PRELIMINARY
`RESPONSE DEADLINE UNTIL AFTER THE RESOLUTION
`OF ITS PETITION FOR WRIT OF CERTIORARI CONCERNING
`WHETHER SOVEREIGN IMMUNITY MAY BE ASSERTED
`IN INTER PARTES REVIEWS
`
`
`
`

`

`Opposition to Mot. to Extend Prelim. Resp. Deadline
`IPR2018-01607
`U.S. Patent 7,620,800
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`TABLE OF CONTENTS
` I.
`INTRODUCTION ........................................................................................... 1
`II.
`FACTUAL BACKGROUND .......................................................................... 1
`III. ARGUMENT ................................................................................................... 2
`SRMT Has Shown No Basis For A Stay .............................................. 2
`A.
`1. SRMT’s Sovereign Immunity Argument Has Been
` Heard and Rejected ......................................................................... 2
`2. There is No Good Cause For a Stay ................................................. 4
`3. SRMT’s Mischaracterizations of the Record Do Not
`Support a Stay .................................................................................. 6
`B. The Federal Circuit’s Decision in Mylan is Controlling ........................ 8
`C. SRMT has Waived the Right to Assert a Defense of
`Sovereign Immunity ............................................................................... 8
`CONCLUSION .......................................................................................................... 9
`
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`i
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`Opposition to Mot. to Extend Prelim. Resp. Deadline
`IPR2018-01607
`U.S. Patent 7,620,800
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`
`TABLE OF AUTHORITIES
` Page(s)
`Cases
`DietGoal Innovations LLC v. Chipotle Mexican Grill,
`70 F. Supp. 3d 808, 811-12 (E.D. Tex. 2014) (Bryson, J.) .................................. 5
`LSI Corp. v. Regents of the Univ. of Minn.
`IPR2017-01068, Paper 19, PTAB, Dec. 19, 2017 ................................................ 8
`Mylan Pharm., Inc. v. Allergan, Inc.
` IPR2016-01127, Paper 129, PTAB, Feb. 23, 2018 ............................................. 3
`Mylan Pharm., Inc. v. Allergan, Inc.
` IPR2016-01127, Paper 137, PTAB, Mar. 22, 2018 ............................................. 1
`Mylan Pharm., Inc. v. Allergan, Inc.
` IPR2016-01127, Paper 142, PTAB, Nov. 30, 2018 ............................................ 4
`Mylan Pharm., Inc. v. Allergan, Inc.
` IPR2016-01127, Paper 81, PTAB, Sept. 22, 2017 .............................................. 1
`Saint Regis Mohawk Tribe v. Mylan Pharm. Inc.,
`896 F.3d 1322 (Fed. Cir. 2018) ............................................................................ 1
`SRC Labs, LLC v. Microsoft Corp.,
`No. 1:17cv-01172-LO-JFA, ECF No. 1 (E.D. Va. Oct. 18, 2017) ................... 2, 9
`SRC Labs, LLC v. Microsoft Corp.,
`No. 2:18-cv-00321-JLR, ECF No. 117 (W.D. Wash. Oct. 11, 2018) .................. 6
`Xilinx Inc., v. Saint Regis Mohawk Tribe
`IPR2018-01395, Paper 11, PTAB, Oct. 24, 2018 ............................................. 3, 7
`Other Authorities
`37 C.F.R. § 42.1(b) .................................................................................................... 6
`37 C.F.R. § 42.5(c)(2) ................................................................................................ 8
`Fed. R. App. P. 41(d)(1)......................................................................................... 4, 8
`ii
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`Opposition to Mot. to Extend Prelim. Resp. Deadline
`IPR2018-01607
`U.S. Patent 7,620,800
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`
`The Supreme Court, 2017 Term – The Statistics
` 132 HARV. L. REV. 447 (2018) ............................................................................ 5
`
`
`iii
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`Opposition to Mot. to Extend Prelim. Resp. Deadline
`IPR2018-01607
`U.S. Patent 7,620,800
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`
`I.
`INTRODUCTION
`The request of Saint Regis Mohawk Tribe (“SRMT”) to delay these
`proceedings should be denied because it has already been decided that SRMT is
`not immune from IPR proceedings, and SRMT has waived any argument that it
`could be immune by asserting the patents at issue here in Federal Court. SRMT
`therefore cannot show any good cause to depart from the ordinary rules governing
`IPRs, or any likelihood of harm from complying with those rules.
`II. FACTUAL BACKGROUND
`On September 8, 2017, Allergan, Inc. transferred numerous prescription
`drug patents to SRMT in an effort to shield the patents from IPR proceedings.
`IPR2016-01127, Paper 81 at 7, EX. 2086, EX. 2103. In that case, the Board held
`that IPR proceedings are administrative enforcement actions that do not invoke the
`right of sovereign immunity, and ordered that the case proceed. IPR2016-01127,
`Paper 137. SRMT appealed, but the Federal Circuit affirmed, holding that
`sovereign immunity “does not extend to actions brought by the federal
`government,” that an “IPR is more like an agency enforcement action than a civil
`suit brought by a private party,” and that therefore SRMT may not rely on
`sovereign immunity to shield itself from IPR proceedings. Saint Regis Mohawk
`Tribe v. Mylan Pharm. Inc., 896 F.3d 1322, 1325, 1327-28 (Fed. Cir. 2018)
`(“Mylan”). On October 28, 2018, SRMT’s petition for rehearing en banc in that
`1
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`Opposition to Mot. to Extend Prelim. Resp. Deadline
`IPR2018-01607
`U.S. Patent 7,620,800
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`case was denied without dissent, Mylan, ECF No. 170, and on November 13, 2018,
`the Federal Circuit denied SRMT’s motion to stay the issuance of its mandate
`pending the result of SRMT’s proposed petition for a writ of certiorari from the
`Supreme Court, Mylan, ECF No. 174.
`Similar to the Mylan case, and in another effort to shield patents from IPR
`proceedings, SRMT obtained title to the patents challenged here via a blanket
`transfer of 39 patents from SRC Labs, LLC (“SRC”). See Ex. 1072. SRMT and
`SRC then jointly asserted six of those patents against Microsoft in district court
`litigation. SRC Labs, LLC v. Microsoft Corp., No. 1:17cv-01172-LO-JFA, ECF
`No. 1 (E.D. Va. Oct. 18, 2017). Microsoft subsequently filed 10 IPR petitions
`challenging those six asserted patents, initiating the proceedings that are the
`subject of SRMT’s motion.
`III. ARGUMENT
`A.
`SRMT Has Shown No Basis For A Stay
`1.
`SRMT’s Sovereign Immunity Argument Has Been Heard
`and Rejected
`SRMT’s principal argument for a delay in these proceedings is that “[t]he
`Tribe’s sovereign immunity is a threshold issue that must be addressed before the
`IPR may proceed because tribal sovereign immunity is not merely a liability
`defense, it is an ‘immunity from suit’ that ‘is effectively lost if a case is
`erroneously permitted to go to trial.’” Motion at 5. The problem with that
`2
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`Opposition to Mot. to Extend Prelim. Resp. Deadline
`IPR2018-01607
`U.S. Patent 7,620,800
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`contention, however, is that the question of SRMT’s immunity from an IPR
`proceeding has already been addressed, squarely, by a panel of the PTAB and a
`panel of the Federal Circuit, each of which has held that no such immunity applies.
`See Mylan, supra; IPR2016-01127, Paper 129.
`That is why, since the Federal Circuit’s ruling in Mylan, no tribunal
`approached by SRMT for a stay has granted one. The Federal Circuit in Mylan
`summarily denied SRMT’s request for a stay of the mandate pending a petition for
`certiorari, Mylan, ECF No. 174. Similarly, the panel in Xilinx, Inc. v. Saint Regis
`Mohawk Tribe, IPR2018-01395 denied a joint request to extend SRMT’s
`preliminary response deadline on the ground that “[g]iven that the Federal Circuit
`has already issued its decision in [Mylan], we are not persuaded that the parties
`have demonstrated good cause for an extension of the deadline to file the Patent
`Owner’s preliminary response.” IPR2018-01395, Paper 11 at 2. SRMT makes no
`attempt to show that the circumstances here require a different result.
`Thus, the question of the applicability of SRMT’s tribal sovereign immunity
`to IPRs is no longer a “threshold issue” to be decided. It has been decided, against
`SRMT, so such sovereign immunity can no longer be a basis for interfering with
`the regular adjudication of Microsoft’s petitions.
`SMRT also contends that “a stay will preserve the status quo while this
`important issue is decided,” Motion at 6, but the exact opposite is true. The status
`3
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`Opposition to Mot. to Extend Prelim. Resp. Deadline
`IPR2018-01607
`U.S. Patent 7,620,800
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`quo is that SRMT’s tribal sovereign immunity does not apply in an IPR. Indeed,
`the IPR proceedings underlying the decision in Mylan are continuing to an Oral
`Hearing now scheduled for January 11, 2019, see IPR2016-01127, Paper 142, and
`the IPR proceeding brought by Xilinx against SRMT is continuing along the usual
`schedule, IPR2018-01395, Paper 11. SRMT has made no effort to show why the
`Board should treat the proceedings here any differently. SRMT thus asks not to
`maintain the status quo, but for special treatment, and an exception to the normal
`rules that ordinarily apply.
`A. There is No Good Cause For a Stay
`SRMT further argues that “[g]ood cause is present here because the Tribe
`would be irreparably harmed if its Preliminary Response Deadline is not extended
`because, as noted above, sovereign immunity is immunity from suit, not a defense
`to liability.” Motion at 7. That is incorrect. SRMT has no immunity to these
`IPRs, so it will not be harmed by complying with the normal rules of an IPR, such
`as submitting a preliminary response in the time frame set forth in the rules.
`Moreover, SRMT’s “good cause” argument has already been decided
`against it. For example, in Mylan, the standard SRMT was required to satisfy in
`order to obtain a stay of the Federal Circuit’s mandate included a showing of good
`cause, see Federal Rule of Appellate Procedure 41(d)(1), and SRMT made the
`same “irreparable harm” argument to satisfy that requirement that it makes here,
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`Opposition to Mot. to Extend Prelim. Resp. Deadline
`IPR2018-01607
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`Mylan, ECF No. 171 at 6-7. The argument was rejected by the Federal Circuit, so
`it should be rejected here as well.
`Indeed, SRMT cannot show even a likelihood of harm. The unanimous
`ruling in Mylan affirmed a unanimous decision of the Board, and SRMT’s petition
`for en banc rehearing was denied without dissent. SRMT has therefore not been
`able to find a single judge to accept its immunity argument. And, while SRC
`provides various statistics regarding the timing surrounding the filing a petition for
`certiorari (Motion at 3-4), it conveniently leaves out that the Supreme Court
`typically grants only around 4% of such writs in a term. See, e.g., Ex. 1071, The
`Supreme Court, 2017 Term – The Statistics, 132 HARV L. REV. 447, 455 (2018).
`SRMT has had its day in court on the tribal sovereign immunity issue, and it
`lost. The extremely low likelihood that it can reverse that loss in the Supreme
`Court coupled with the complete lack of support for SRMT’s position confirms
`that there is no likelihood of injury if its motion is denied, and no good cause to
`extend its preliminary response deadlines.1
`1 Moreover, while SRMT may have a right to seek review of the decision in Mylan
`
`by the Supreme Court, now that the mandate in Mylan has issued (Mylan, ECF No.
`175) SRMT is collaterally estopped from asserting its sovereign immunity
`argument in other cases. See DietGoal Innovations LLC v. Chipotle Mexican Grill,
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`Opposition to Mot. to Extend Prelim. Resp. Deadline
`IPR2018-01607
`U.S. Patent 7,620,800
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`SRMT’s Mischaracterizations of the Record Do
`B.
`Not Support a Stay
`SRMT’s additional arguments do nothing to undo that failure. SRMT’s
`assertion that “the requested extension will not prejudice Microsoft,” Motion at 8,
`is simply wrong. Absent some justification to depart from the rules, which does
`not exist here, Microsoft is entitled to have its petitions considered in the ordinary
`course, just as any other IPR petitioner is. See 37 C.F.R. § 42.1(b) (the rules of the
`Board “shall be construed to secure the just, speedy, and inexpensive resolution of
`every proceeding”). Moreover, SRMT has asserted these patents against Microsoft
`in district court, on the flimsiest of evidence, so Microsoft has a significant interest
`in demonstrating the invalidity of the asserted patents in a timely manner.
`As for the assertion that Microsoft’s statement to the district court that the
`potential for a certiorari petition favored a stay somehow applies here, Motion at 8,
`that is not so. Microsoft argued that a stay should be granted in the district court
`litigation regardless of the outcome of any appeals, due to the significant effort
`both the parties and the Court would be required to undertake in the near term and
`70 F. Supp. 3d 808, 811-12 (E.D. Tex. 2014) (Bryson, J.) (collateral estoppel is
`
`“not affected by the fact that an appeal has been taken from the decision.”) This is
`yet another reason why SRMT cannot show good cause.
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`Opposition to Mot. to Extend Prelim. Resp. Deadline
`IPR2018-01607
`U.S. Patent 7,620,800
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`the possibility of significant efficiencies, but also noted that SRMT’s
`characterization of its appeal as a threshold matter only counseled in favor of
`granting a stay of the litigation. SRC Labs, LLC v. Microsoft Corp., No. 2:18-cv-
`00321-JLR, ECF No. 117 (W.D. Wash. Oct. 11, 2018). Those considerations are
`not implicated by the request for relief at issue here, as it is the Board’s resolution
`of Microsoft’s IPR petitions that will create efficiencies.
`And SMRT’s assertion that Microsoft “was previously ‘willing to enter into
`a mutual stay of the IPRs pending [the sovereign immunity appeal] if SRC and
`[Saint Regis Mohawk Tribe] are willing to stay all district court proceedings on the
`patents that are the subject of those IPR,’” Motion at 8, is misleading. Microsoft
`never stated it was willing to enter into a mutual stay of the IPRs “pending [the
`sovereign immunity appeal]”. It stated that, if the district court litigation was
`stayed as well, Microsoft was willing to agree to a “stay of the IPRs pending the
`Federal Circuit’s resolution of the rehearing petition”. EX2023 (emphasis added).
`That resolution has now occurred, and the mandate in Mylan has now issued.
`There is, therefore, no basis for a delay of the IPRs.
`Finally, the statement in SRMT’s brief that “the Board has extended the
`Patent Owner Preliminary Response deadline in every proceeding where sovereign
`immunity was raised,” Motion at 7, is factually inaccurate, as the Board in Xilinx,
`Inc. v. SRMT denied SRMT’s request, based on sovereign immunity, to extend the
`7
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`Opposition to Mot. to Extend Prelim. Resp. Deadline
`IPR2018-01607
`U.S. Patent 7,620,800
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`preliminary response. See IPR2018-01395, Paper 11 at 2. The statement is also
`misleading, as most of the IPR proceedings SRMT cites involved assertions of
`State sovereign immunity to IPRs, an argument SRMT is not entitled to make and
`an issue not yet resolved by the Federal Circuit. See IPR2017-01186; IPR2017-
`00572; and IPR2017-01338.
`B.
`The Federal Circuit’s Decision in Mylan is Controlling
`SMRT also argues that the Federal Circuit’s refusal to stay the mandate in
`Mylan is not controlling here, supposedly because “the standard to stay a mandate
`and the standard to extend the deadline for a Patent Owner’s Preliminary Response
`are not the same.” Motion at 8. That conclusion is legally erroneous. While the
`two standards may not be identical, they both require a showing of “good cause”.
`Compare Fed. R. App. P. 41(d)(1) with 37 C.F.R. § 42.5(c)(2). As demonstrated
`above, the Federal Circuit already rejected SRMT’s arguments as to good cause
`when SMRT asked for a stay of the mandate. It would be extraordinary, after that
`decision, for the Board to come to a different conclusion based on the exact same
`facts and arguments.
`C.
`SRMT has Waived the Right to Assert a Defense of Sovereign
`Immunity
`Finally, no appeal to the Supreme Court can affect these proceedings in any
`event, because SRMT waived any right to assert sovereign immunity in these
`8
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`Opposition to Mot. to Extend Prelim. Resp. Deadline
`IPR2018-01607
`U.S. Patent 7,620,800
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`proceedings by filing suit on the patents that are the subject of these IPRs. For
`example, in IPR2017-01068, Paper 19, an expanded panel of the Board held that
`“the filing of an action in federal court alleging infringement effectively waives
`Patent Owner’s Eleventh Amendment immunity defense.” Id. at 6. That decision
`was, of course, directed to State sovereign immunity, but there is no basis for
`concluding that an Indian Tribe possesses any greater sovereign immunity than
`expressly provided to the States under the Eleventh Amendment. The Board’s
`holding in IPR2017-01068 should therefore apply here.
`In this case, SRMT and SRC filed a complaint against Microsoft on October
`18, 2017, alleging infringement of the patents at issue in these proceedings. SRC
`Labs, LLC v. Microsoft Corp., No. 1:17cv-01172-LO-JFA, ECF No. 1 (E.D. Va.
`Oct. 18, 2017). By joining that suit, SRMT waived any right to assert sovereign
`immunity in this IPR. Thus, the result of SRMT’s proposed appeal to the Supreme
`Court is irrelevant to whether the Board has jurisdiction in these proceedings, and
`can therefore not be the basis for good cause to delay these proceedings.
`CONCLUSION
`Accordingly, for the reasons set forth above, SRMT’s motion should be denied.
` Dated: December 7, 2018
`Respectfully Submitted,
`
`/Joseph A. Micallef/
`
`Joseph A. Micallef
`
`
`9
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`IPR2018-01607
`U.S. Patent 7,620,800
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`
`Opposition to Mot. to Extend Prelim. Resp. Deadline
`
`Reg. No. 39,772
`SIDLEY AUSTIN LLP
`1501 K Street, N.W.
`Washington, DC 20005
`jmicallef@sidley.com
`Attorney for Petitioner
`
`10
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`Opposition to Mot. to Extend Prelim. Resp. Deadline
`IPR2018-01607
`U.S. Patent 7,620,800
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`
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`Opposition to Mot. to Extend Prelim. Resp. Deadline
`IPR2018-01607
`U.S. Patent 7,620,800
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`
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`Opposition to Mot. to Extend Prelim. Resp. Deadline
`IPR2018-01607
`U.S. Patent 7,620,800
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`
`Exhibit # Reference Name
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`Opposition to Mot. to Extend Prelim. Resp. Deadline
`IPR2018-01607
`U.S. Patent 7,620,800
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`
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`14
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`Opposition to Mot. to Extend Prelim. Resp. Deadline
`IPR2018-01607
`U.S. Patent 7,620,800
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`
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`1059
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`Terms, 1994
`The Splash 2 Processor and Applications
`1060
`15
`
`

`

`Opposition to Mot. to Extend Prelim. Resp. Deadline
`IPR2018-01607
`U.S. Patent 7,620,800
`
`
`Exhibit # Reference Name
`1061
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`modular multiplication”, IEEE Trans. on VLSI, vol. 5, no. 2, June
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`http://www.dictionary.com/browse/plane.
`1064
`1065
`Declaration of Katherine Zimmerman
`Declaration of Jim Mullins
`1066
`1067
`Declaration of Rachel Watters
`Declaration of Stephen Trimberger
`1068
`1069
`Plaintiff’s Preliminary Claim Constructions, SRC Labs – Microsoft
`1070
`Official Copyright Registration of Splash2 (Ex. 1007)
`1071
`[NEW] The Supreme Court, 2017 Term – The Statistics, 132 Harv. L.
`Rev. 447, 455 (2018)
`1072
`[NEW] SRC Patent Assignment Sheet, August 2nd, 2017
`
`16
`
`

`

`Opposition to Mot. to Extend Prelim. Resp. Deadline
`IPR2018-01607
`U.S. Patent 7,620,800
`
`
`CERTIFICATE OF SERVICE
`
`I hereby certify that on December 7, 2018, a copy of the foregoing document
`has been served via e-mail on the following:
`Christopher Evans (cevans@shorechan.com)
`Alfonso Chan (achan@shorechan.com)
`Joseph DePumpo (jdepumpo@shorechan.com)
`Shore Chan DePumpo LLP
` Dated: December 7, 2018
`Respectfully Submitted,
`
`/Joseph A. Micallef/
`
`Joseph A. Micallef
`Reg. No. 39,772
`SIDLEY AUSTIN LLP
`1501 K Street, N.W.
`Washington, DC 20005
`jmicallef@sidley.com
`Attorney for Petitioner
`
`
`
`
`17
`
`

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