`Petitioner’s Motion to Strike
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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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`CANON U.S.A., INC.
`Petitioner
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`v.
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`CELLSPIN SOFT, INC.
`Patent Owner
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`___________________
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`U.S. Patent No. 9,258,698
`Inter Partes Review No. 2019-001271
`___________________
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`
`PETITIONER’S MOTION TO STRIKE
`NEW ARGUMENTS AND EVIDENCE SUBMITTED IN
`PATENT OWNER’S SUR-REPLY (PAPER 29)
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`1 GoPro, Inc., Garmin International, Inc., and Garmin USA, Inc. were joined as
`parties to this proceeding. Paper 27.
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`IPR2019-00127
`Petitioner’s Motion to Strike
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`I.
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`II.
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`TABLE OF CONTENTS
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`INTRODUCTION ........................................................................................... 1
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`ARGUMENT ................................................................................................... 4
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`A.
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`B.
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`C.
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`D.
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`E.
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`The New Exhibits and Arguments Violate the Letter of the
`Consolidated Trial Practice Guide ........................................................ 4
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`The New Exhibits and Arguments are Highly Prejudicial to Petitioner
` ............................................................................................................... 6
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`The New Exhibits and Arguments Would Violate Petitioner’s Due
`Process Rights ....................................................................................... 8
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`Patent Owner Cannot Justify Its Late Submission of Evidence, All of
`Which Should Have and Could Have Been Submitted In Connection
`with Its Patent Owner Response..........................................................10
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`The Proper Remedy for Patent Owner’s Violation of the Guide is
`Striking Exhibits 2025-2033 and Any Arguments Based Thereon ....13
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`III. CONCLUSION ..............................................................................................14
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`IPR2019-00127
`Petitioner’s Motion to Strike
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`TABLE OF AUTHORITIES
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`Cases
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`Page
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`Abbott Labs. v. Cordis Corp.,
`710 F.3d 1318 (Fed. Cir. 2013) ................................................................... 8-9
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`Canon Inc. v. Intellectual Ventures II LLC,
`IPR2014-00631, Paper 50 (PTAB Aug. 19, 2015) ................................. 11, 12
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`Dell Inc. v. Acceleron, LLC,
`818 F.3d 1293 (Fed. Cir. 2016) ................................................................. 9-10
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`Genzyme Therapeutic Prods. Ltd. P’Ship v. Biomarin Pharm. Inc.,
`825 F.3d 1360 (Fed. Cir. 2016) ...................................................................8, 9
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`Mallinckrodt Pharm. Ir. Ltd. v. Biovie, Inc.,
`IPR2018-00974, Paper 34 (PTAB Nov. 13, 2019) ....................................5, 14
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`N. Am. Coal Co. v. Miller,
`870 F.2d 948 (3d Cir. 1989) ..........................................................................10
`
`Navistar, Inc. v. Fatigue Fracture Tech., LLC,
`IPR2018-00853, Paper 58 (PTAB Aug. 29, 2019) ....................................5, 14
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`Trane U.S. Inc. v. SEMCO, LLC,
`IPR2018-00514, Paper 36 (PTAB Apr. 17, 2019) ...................................... 6-7
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`Yeda Research v. Mylan Pharm. Inc.,
`906 F.3d 1031 (Fed. Cir. 2018) ....................................................................... 9
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`5 U.S.C. §§ 554(b)-(c), 556(d), 557(c) ...................................................................... 8
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`Statutes
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`Patent Trial and Appeals Board Consolidated
`Trial Practice Guide, November 2019 ................................................... passim
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`Rules
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`IPR2019-00127
`Petitioner’s Motion to Strike
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`I.
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`INTRODUCTION
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`Pursuant to the Board’s December 20, 2019 Order (Paper 36), Petitioner
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`Canon U.S.A., Inc. (“Petitioner” or “Canon”) hereby respectfully moves to strike
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`(a) Exhibits 2025-2033, which Patent Owner Cellspin Soft, Inc. (“Patent Owner”
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`or “Cellspin”) belatedly submitted with its sur-reply filed on December 3, 2019
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`(Paper 29), and (b) arguments in the sur-reply that are based on this untimely
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`evidence.2
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`In its Patent Owner Response filed July 22, 2019, Cellspin advanced several
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`impermissibly narrow claim construction positions based on extrinsic testimony
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`from its expert, Dr. Michael Foley. Paper 17 at 12-23. For example, Cellspin
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`argued that the term “paired wireless connection” should include the requirements
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`of “encrypted data exchange” and a link that can be “disconnected and reconnected
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`without having to repeat pairing and authentication,” based on Dr. Foley’s
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`argument that these were features of Bluetooth pairing. Id. at 16. In its
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`Petitioner’s Reply, Canon explained why Cellspin’s claim construction positions
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`were improper and unsupported. Paper 24 at 3-9. For example, Canon explained
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`2 As set forth in Canon’s Notice of Basis for Relief (Paper 33), Exhibits 2024 and
`2025 were identified on Cellspin’s amended exhibit list (Paper 30), but Cellspin
`did not file the exhibits at the time and has not filed them as of January 3, 2020.
`Because Cellspin failed to timely file Exhibits 2024 and 2025, it has waived any
`right to rely upon them. Canon further seeks to strike Exhibit 2025 on the grounds
`set forth in this motion.
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`IPR2019-00127
`Petitioner’s Motion to Strike
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`that Cellspin’s construction for the term “paired wireless connection” was
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`improper because (1) the claims and specification of the ‘698 patent are not limited
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`to Bluetooth, (2) Dr. Foley had cherry-picked two optional features from one
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`version of the Bluetooth specification and read them into the claims, and (3) Dr.
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`Foley had failed to analyze other pairing technologies or other versions of the
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`Bluetooth specification. Id. at 3-7. Canon supported these arguments with cross-
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`examination testimony from Dr. Foley, who conceded that his opinions were based
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`on optional features found in a single version of the Bluetooth specification. Id.
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`In the face of these arguments and damaging testimony, Cellspin sought a
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`do-over in its sur-reply. Cellspin submitted a new 54-page declaration from Dr.
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`Foley setting out extensive new opinions and evidence in an effort to repair
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`Cellspin’s deficient claim construction positions. Exhibit 2026 at 14-34. Dr. Foley
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`attempted to explain away or contextualize the parts of his deposition testimony
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`that Canon had cited to explain why Cellspin’s claim construction positions were
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`improper. Id. Dr. Foley also addressed technologies other than Bluetooth, such as
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`Wi-Fi and Zigbee, citing new technical documents spanning hundreds of pages.
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`Id. at 15-17; Exs. 2027-2033. Cellspin then incorporated Dr. Foley’s new opinions
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`into its sur-reply—oftentimes verbatim—to argue that its original constructions
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`were proper. Paper 29 at 3-9.
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`IPR2019-00127
`Petitioner’s Motion to Strike
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`The Board’s Consolidated Trial Practice Guide expressly prohibits this type
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`of belated reliance on new evidence and arguments in a sur-reply. See Patent Trial
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`and Appeals Board Consolidated Trial Practice Guide, November 2019 (“Guide”)
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`at 73 (“The sur-reply may not be accompanied by new evidence other than
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`deposition transcripts of the cross-examination of any reply witness.”). There is no
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`ambiguity in this rule. Sur-replies are for the limited purpose of responding to
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`arguments made in reply briefs, commenting on reply declaration testimony, or
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`pointing to cross-examination testimony. Id. They are not an opportunity for a
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`patent owner to submit new evidence or new arguments, especially those that could
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`have and should have been raised in a Patent Owner Response. Id.
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`Cellspin violated this rule by submitting extensive new testimonial and
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`documentary evidence with its sur-reply. None of the new exhibits are cross-
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`examination transcripts.3 Instead, they include Dr. Foley’s new 54-page expert
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`declaration (Ex. 2026); a second “supplemental” declaration from Dr. Foley that
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`Cellspin identified on its exhibit list but did not file (Ex. 2025); webpage printouts
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`(Exs. 2027-2028); a patent publication (Ex. 2029); an excerpt of the prosecution
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`history for U.S. Patent No. 9,258,698 (Ex. 2030); and three technical specifications
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`spanning hundreds of pages (Exs. 2031-2033). Cellspin did not seek prior
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`3 To be sure, Canon offered to make its reply witness available for deposition, but
`Cellspin declined the opportunity to take one.
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`IPR2019-00127
`Petitioner’s Motion to Strike
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`authorization from the Board to deviate from the Guide and submit these untimely
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`exhibits. They should thus be stricken, along with any arguments in Cellspin’s sur-
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`reply that are based on the exhibits.
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`In addition to violating the letter of the Guide, the new exhibits and
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`arguments would prejudice Canon, violate the Administrative Procedure Act and
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`its guarantees of due process, and set bad precedent. If Cellspin is permitted to
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`rely on these exhibits and arguments, patent owners in future proceedings would be
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`emboldened to submit new sur-reply evidence without authorization, leading to
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`more complicated and unpredictable proceedings, and prejudice against petitioners.
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`Accordingly, Canon respectfully requests that the Board strike Exhibits
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`2025-2033 and all arguments in the sur-reply that are based on such evidence.
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`II. ARGUMENT
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`A. The New Exhibits and Arguments Violate the Letter of the
`Consolidated Trial Practice Guide
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`The Board’s Consolidated Trial Practice Guide sets forth “standard practices
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`before the Board during AIA trial proceedings” based upon the Board’s trial rules.
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`Guide at 1. These standard practices “includ[e] the structure and times for taking
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`action in each of the AIA proceedings” to “encourage[] consistency of procedures
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`among panels of the Board.” Id. at 1, 3. “[A]bsent special circumstances,
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`discovery will proceed in a sequenced fashion” as set forth in the Guide. Id. at 7-8.
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`IPR2019-00127
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`The Guide defines, in no uncertain terms, the proper procedure for patent
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`owner sur-replies and accompanying discovery: “The sur-reply may not be
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`accompanied by new evidence other than deposition transcripts of the cross-
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`examination of any reply witness.” Id. at 73 (emphasis added). Under the plain
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`letter of this rule, Cellspin was not permitted to introduce new evidence with its
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`sur-reply. See Mallinckrodt Pharm. Ir. Ltd. v. Biovie, Inc., IPR2018-00974, Paper
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`34 at 8-9 (PTAB Nov. 13, 2019) (striking, in view of the Guide, portions of a sur-
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`reply relying on new evidence in the form of a supplemental declaration that was
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`improperly included as an exhibit to the sur-reply); Navistar, Inc. v. Fatigue
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`Fracture Tech., LLC, IPR2018-00853, Paper 58 at 51 (PTAB Aug. 29, 2019)
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`(granting motion to strike exhibits to a sur-reply because they “do not comply with
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`[the Board’s] rules for proper evidence to accompany a sur-reply,” citing the
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`Guide).
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`Cellspin violated the Guide by submitting Exhibits 2025-2033, which
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`consist of extensive new testimonial and documentary evidence, none of which are
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`cross-examination transcripts. In particular, the evidence includes:
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` a “Supplemental Declaration” from Cellspin’s expert witness, Michael
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`Foley, Ph.D. (Ex. 2025);4
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`4 As noted above, Exhibit 2025 was identified on Cellspin’s amended exhibit list,
`but not filed.
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` a 54-page “Sur-reply Declaration” from Cellspin’s expert witness,
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`IPR2019-00127
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`Michael Foley, Ph.D. (Ex. 2026);
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` printouts from the Internet (Exs. 2027-2028);
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` U.S. Patent Publication No. US 2004/0059941 to Hardman et al. (Ex.
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`2029);
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` an excerpt of the prosecution history for U.S. Patent No. 9,258,698
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`(Ex. 2030); and
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` three new technical specifications spanning nearly 350 pages (Ex.
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`2031-2033).
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`Cellspin did not seek, and the Board did not grant, prior authorization to
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`deviate from the Guide and submit these untimely exhibits. Under the plain letter
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`of the Guide, therefore, these materials should be stricken, along with the portions
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`of the sur-reply that rely upon them.
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`B.
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`The New Exhibits and Arguments are Highly Prejudicial to
`Petitioner
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`In addition to violating the Guide, Cellspin’s new evidence and arguments
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`would be highly prejudicial to Canon because Canon does not have an opportunity
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`to respond. The Board has struck unauthorized sur-reply evidence and arguments
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`to prevent this type of unfair prejudice. See, e.g., Trane U.S. Inc. v. SEMCO, LLC,
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`IPR2018-00514, Paper 36 at 8 (PTAB Apr. 17, 2019) (“[W]e cannot overlook a
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`IPR2019-00127
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`party’s blatant disregard of our rules and practice when doing so would unfairly
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`prejudice another party, unduly burden the Board’s review of the evidence, and
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`impact the efficiency of our decision-making.”).
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`In this case, if Cellspin is permitted to rely on new sur-reply evidence and
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`arguments, Canon will have no opportunity to depose Cellspin’s expert witness on
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`his extensive new opinions (set forth in two declarations), or to address Cellspin’s
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`new evidence in briefing. For example, Cellspin’s new expert declaration (Ex.
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`2026) includes new opinions based on new evidence, and Canon will not have the
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`opportunity to cross-examine Cellspin’s expert witness on his extensive new
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`declaration, opinions, and evidence. Furthermore, Canon will have no opportunity
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`to submit briefing to address the new evidence and arguments set forth in
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`Cellspin’s sur-reply, particularly given the rapidly approaching oral argument date
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`of January 28, 2020.
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`Exhibit 2026 also attempts to explain away or retract admissions that
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`Cellspin’s expert made in his deposition given after Cellspin filed its Patent Owner
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`Response. Cellspin’s counsel had the opportunity to address those admissions
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`through redirect examination, but chose not to. That was the time for Cellspin to
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`seek any additional testimony from its expert. Waiting to see how Canon would
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`use the deposition testimony in its reply brief, then adding over 50 pages of written
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`IPR2019-00127
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`redirect testimony without any opportunity for Canon to re-cross or respond, is
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`highly improper and prejudicial.
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`Cellspin also relies on the new declaration and the new exhibits to support
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`its improper claim construction positions. These positions were set forth in
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`Cellspin’s Patent Owner Response, and Cellspin should have submitted all
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`evidence and expert testimony to support its positions at that time. Waiting until
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`its sur-reply to try to patch the holes in its positions is, again, highly improper and
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`unfairly prejudicial.
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`To avoid this undue prejudice, the Board should strike Cellspin’s new
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`exhibits and the portions of the sur-reply that rely upon those exhibits.
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`C. The New Exhibits and Arguments Would Violate Petitioner’s Due
`Process Rights
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`Leaving the new exhibits and arguments in the record would also violate the
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`Administrative Procedure Act and its guarantees of due process. “In a formal
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`adjudication, such as inter partes review, the APA imposes certain procedural
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`requirements on the agency.” Genzyme Therapeutic Prods. Ltd. P’Ship v.
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`Biomarin Pharm. Inc., 825 F.3d 1360, 1365-66 (Fed. Cir. 2016). Among these are
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`the basic requirements of due process: that parties be given both notice of the
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`evidence and arguments on which the other side relies, as well as an opportunity to
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`respond. See id.; see also 5 U.S.C. §§ 554(b)-(c), 556(d), 557(c); Abbott Labs. v.
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`IPR2019-00127
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`Cordis Corp., 710 F.3d 1318, 1328 (Fed. Cir. 2013) (“The indispensable
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`ingredients of due process are notice and an opportunity to be heard by a
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`disinterested decision-maker.”). The introduction of new evidence in the middle of
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`a proceeding is permissible only “as long as the opposing party is given notice of
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`the evidence and an opportunity to respond to it.” Genzyme, 825 F.3d at 1366; see
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`also Yeda Research v. Mylan Pharm. Inc., 906 F.3d 1031, 1040 (Fed. Cir. 2018)
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`(approving of new evidence included in reply declaration because opposing party
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`deposed expert afterward and could have substantively responded through a sur-
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`reply).
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`Here, if the Board allows Exhibits 2025-2033 and arguments based thereon
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`to remain in the record, those basic due process requirements will be violated. The
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`exhibits and arguments are part of a sur-reply, to which no responsive briefing is
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`permitted. Nor would responsive briefing, alone, provide an adequate remedy, as
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`Canon will have no opportunity to cross examine Cellspin’s expert witness on the
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`new material in his declarations.
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`Canon’s only opportunity to address the new factual assertions is at the
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`hearing, which is far too late to comport with due process. See, e.g., Dell Inc. v.
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`Acceleron, LLC, 818 F.3d 1293, 1301 (Fed. Cir. 2016) (“[T]he Board denied
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`Acceleron its procedural rights by relying in its decision on a factual assertion
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`introduced into the proceeding only at oral argument, after Acceleron could
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`IPR2019-00127
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`meaningfully respond.”); see also N. Am. Coal Co. v. Miller, 870 F.2d 948, 951
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`(3d Cir. 1989) (vacating and remanding agency decision on due-process grounds
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`for failing to provide an opportunity to cross-examine witness’s opinions through
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`deposition).
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`Thus, to ensure Canon’s due process rights, the Board should strike Exhibits
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`2025-2033 and the portions of the sur-reply that rely upon that evidence.
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`D.
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`Patent Owner Cannot Justify Its Late Submission of Evidence, All
`of Which Should Have and Could Have Been Submitted In
`Connection with Its Patent Owner Response
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`There is no justification for Cellspin’s failure to timely submit the new
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`evidence and arguments submitted with its sur-reply brief. Cellspin has argued in
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`its Notice of Basis for Relief that its new evidence and arguments are justified
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`because of supposed improprieties in Canon’s reply brief and accompanying
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`evidence. See Paper 35 at 2-5. The Board should reject this argument for the
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`following reasons:
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`First, Cellspin’s allegations about Canon’s reply and evidence are incorrect.
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`As Canon explained in its reply paper, Cellspin’s Patent Owner Response
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`advanced narrow claim construction positions that were inconsistent with the
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`intrinsic record of the ‘698 patent and based on Dr. Foley’s attempt to read
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`optional features from one version of the Bluetooth specification into the claims.
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`Paper 24 at 3-9. Canon submitted rebuttal evidence to explain why Cellspin’s
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`IPR2019-00127
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`claim construction positions—and arguments based on those positions—were
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`improper, and further to explain why the challenged claims are unpatentable even
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`under Cellspin’s narrow constructions. This evidence is entirely proper in the
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`context of a reply paper. See Guide at 73 (“A party also may submit rebuttal
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`evidence in support of its reply.”); see also Canon Inc. v. Intellectual Ventures II
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`LLC, IPR2014-00631, Paper 50 at 54 (PTAB Aug. 19, 2015).
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`By contrast, Cellspin’s sur-reply presents evidence and arguments that it
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`could have and should have presented in connection with its Patent Owner
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`Response filed on July 22, 2019. The new evidence and arguments are designed to
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`correct deficiencies in the improper claim constructions that Cellspin presented in
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`its Patent Owner Response. Compare Paper 17 at 12-23 with Ex. 2026 at 14-34.
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`For example, Dr. Foley’s sur-reply declaration presents new opinions and evidence
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`based on technical specifications for the Wi-Fi and Zigbee standards, despite the
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`fact that his original opinions were based on Bluetooth version 2.1 + EDR. See Ex.
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`2026 at 14-34; see also Ex. 1040 at 19:7-11 (“Q. First, the opinions in your
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`declaration are based on the version 2.1 + EDR specification of Bluetooth; is that
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`correct? A. Correct. And any time I quote the Bluetooth specification of pull from
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`it, it is the 2.1 + EDR.”). There is no justification for Cellspin and Dr. Foley’s late
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`submission of evidence and arguments based on, e.g., the Wi-Fi and Zigbee
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`standards. If Cellspin believed this evidence and corresponding arguments were
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`IPR2019-00127
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`necessary to support its claim construction positions, then it should have submitted
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`them in connection with its Patent Owner Response. Instead, it limited its
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`arguments to a single version of the Bluetooth specification (version 2.1 + EDR)
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`and forewent any analysis of other versions of Bluetooth or other standards such as
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`Wi-Fi and Zigbee.
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`Accordingly, contrary to Cellspin’s assertion, Canon’s motion here and
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`Cellspin’s expected motion to strike are not “intertwined” in any way. See Paper
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`35 at 3. There is no question that Cellspin violated the Guide’s express prohibition
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`on submitting new evidence with a sur-reply. Canon, on the other hand, properly
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`submitted new evidence with its reply, as permitted under the Board’s rules and the
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`Guide, and in response to arguments and evidence raised in Cellspin’s Patent
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`Owner Response. See Canon, IPR2014-00631, Paper 50 at 54; see also Guide at
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`73 (“A party also may submit rebuttal evidence in support of its reply. . . . The
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`sur-reply may not be accompanied by new evidence other than deposition
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`transcripts of the cross-examination of any reply witness.”) (emphasis added).
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`Second, if a party believes that the opposing party has exceeded the proper
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`scope of a reply, then it should timely request authorization to file a motion to
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`strike. Guide at 80.5 Parties should not, as Cellspin did here, engage in
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`5 As Canon will explain in its opposition to Cellspin’s expected motion to strike,
`Cellspin raised the possibility of a motion to strike 48 days after Canon submitted
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`IPR2019-00127
`Petitioner’s Motion to Strike
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`unauthorized self-help by submitting new evidence and impermissible sur-reply
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`arguments that purportedly respond to the alleged improper reply, and then only
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`seek to strike the reply after filing a sur-reply.
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`Allowing Cellspin’s conduct here would establish bad precedent in future
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`proceedings before the Board. Patent owners would cite this case as precedent for
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`filing unauthorized sur-reply evidence, which would needlessly complicate
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`proceedings and impose prejudice on petitioners. To avoid setting such precedent,
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`the Board should strike Cellspin’s new evidence and arguments.
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`E.
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`The Proper Remedy for Patent Owner’s Violation of the Guide is
`Striking Exhibits 2025-2033 and Any Arguments Based Thereon
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`Canon understands that the Board views motions to strike as an exceptional
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`remedy. See Guide at 80-81. The circumstances here—including an indisputable
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`violation of the Guide that results in undue prejudice to Canon—are precisely the
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`type of exceptional circumstances that warrant this remedy.
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`Canon submits that the Board has no reasonable alternative to striking the
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`new evidence and arguments. As explained above, not only is it “beyond dispute”
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`that the “evidence is belatedly presented” (see Guide at 80-81), but anything short
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`of that remedy would violate Canon’s due process rights and the Administrative
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`Procedure Act, and unfairly prejudice Canon in a significant way. The
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`its reply, and only after Canon had notified Cellspin that it intended to strike
`Cellspin’s sur-reply evidence.
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`IPR2019-00127
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`circumstances here are thus exactly the type of exceptional situation that the Guide
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`instructs will justify a motion to strike. See Guide at 80-81. And the Board has
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`done just that in other cases presenting the same type of violation. See, e.g.,
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`Mallinckrodt, IPR2018-00974, Paper 34 at 8-9; Navistar, IPR2018-00853, Paper
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`58 at 51.
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`Should the Board wish to impose a more lenient sanction as an alternative to
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`striking portions of the sur-reply, however, the Board could strike the new
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`evidence and treat the statements in the sur-reply based on that evidence as
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`unsupported attorney argument.
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`III. CONCLUSION
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`For the foregoing reasons, Canon respectfully requests that the Board strike
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`Exhibits 2025-2033 and all arguments in Cellspin’s December 3, 2019 sur-reply
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`that are based on these exhibits.
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`Date: January 3, 2020
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`Respectfully submitted,
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`/s/ Jared W. Newton
`Jared Newton
`Reg. No. 65,818
`jarednewton@quinnemaneul.com
`Quinn Emanuel Urquhart & Sullivan
`1300 I Street NW, 9th Floor
`Washington, DC 20005
`Tel: (202) 538-8000
`Fax: (202) 538-8100
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`IPR2019-00127
`Petitioner’s Motion to Strike
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`CERTIFICATE OF SERVICE
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`I hereby certify that on January 3, 2020, a copy of the foregoing Petitioner’s
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`Motion to Strike was served by filing this document through the PTAB’s E2E
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`Filing System as well as delivery via electronic mail to the following:
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`John J. Edmonds
`Email: pto-edmonds@ip-lit.com
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`Stephen F. Schlather
`Email: sschlather@ip-lit.com
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`Counsel for Patent Owner Cellspin Soft, Inc.
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`/s/ Jared W. Newton
`Jared Newton
`Reg. No. 65,818
`jarednewton@quinnemaneul.com
`Quinn Emanuel Urquhart & Sullivan
`1300 I Street NW, 9th Floor
`Washington, DC 20005
`Tel: (202) 538-8000
`Fax: (202) 538-8100
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`Date: January 3, 2020
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