UNITED STATES PATENT AND TRADEMARK OFFICE
`
`____________
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________
`
`
`AMERICAN NATIONAL MANUFACTURING INC.,
`Petitioner,
`
`v.
`
`SLEEP NUMBER CORPORATION
`f/k/a SELECT COMFORT CORPORATION,
`Patent Owner.
`____________
`
`Case No. IPR2019-00500
`Patent No. 9,737,154 B2
`____________
`
`
`
`
`
`
`DECLARATION OF ELIZABETH A. PATTON
`IN SUPPORT OF PATENT OWNER’S RESPONSE
`
`
`
`
`
`
`Sleep Number Corp.
`EXHIBIT 2033
`IPR2019-00500
`Page 1
`
`
`
`____________
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________
`
`
`AMERICAN NATIONAL MANUFACTURING INC.,
`Petitioner,
`
`v.
`
`SLEEP NUMBER CORPORATION
`f/k/a SELECT COMFORT CORPORATION,
`Patent Owner.
`____________
`
`Case No. IPR2019-00500
`Patent No. 9,737,154 B2
`____________
`
`
`
`
`
`
`DECLARATION OF ELIZABETH A. PATTON
`IN SUPPORT OF PATENT OWNER’S RESPONSE
`
`
`
`
`
`
`Sleep Number Corp.
`EXHIBIT 2033
`IPR2019-00500
`Page 1
`
`
`
`Case No. IPR2019-00500
`Patent No. 9,737,154 B2
`
`
`I, Elizabeth A. Patton, declare as follows:
`
`1.
`
`I am a partner at the law firm Fox Rothschild LLP, and I am one of the
`
`attorneys representing Sleep Number Corporation f/k/a Select Comfort Corporation
`
`(herein “Sleep Number”) in the above matter initiated by American National
`
`Manufacturing, Inc. (“ANM”). I have been admitted pro hac vice.
`
`2.
`
`I have first-hand knowledge of the information stated in this
`
`Declaration, which I submit in support of Patent Owner’s Response.
`
`3.
`
`I am a senior member of the team representing Patent Owner in the
`
`following IPR proceedings: IPR2019-00497 (U.S. Pat. No. 8,769,747), IPR2019-
`
`00500 (U.S. Pat. No. 9,737,154), and IPR2019-00514 (U.S. Pat. No. 5,904,172). I
`
`am also a senior member of the team representing Patent Owner in the following
`
`related district court cases (“District Court Case”): Sleep Number Corporation v.
`
`American National Manufacturing Inc., 5:18-cv-00357(AB)(SPx) (C.D. Cal. 2018)
`
`and Sleep Number Corporation v. Sizewise Rentals, LLC, 5:18-cv-00356(AB)(SPx)
`
`(C.D. Cal. 2018).
`
`4.
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`Additionally, I am a senior member of the team representing Sleep
`
`Number Corporation in the following district court case involving ANM’s related
`
`company and Real-Party-in-Interest Dires, LLC (“Dires Case”): Sleep Number
`
`Corporation, et al. v. John Baxter, et al., 12-cv-2899-DWF-SER (D. Minn. 2012),
`
`on appeal, Sleep Number Corporation, et al. v. John Baxter, et al., 19-1077 (8th Cir.
`
`1
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`Sleep Number Corp.
`EXHIBIT 2033
`IPR2019-00500
`Page 2
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`
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`Case No. IPR2019-00500
`Patent No. 9,737,154 B2
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`2019). In September of 2017, a trial was conducted in the Dires Case. During the
`
`trial, ANM President Craig Miller Jr. testified at length regarding facts related to
`
`Sleep Number’s claims in the litigation, including the false statements Sleep Number
`
`alleged ANM had made to consumers, many of which involved statements
`
`pertaining to Sleep Number.
`
`5.
`
`The testimony elicited during the trial in the Dires Case was publicly
`
`filed on the docket as full page transcripts at Docket Entries 586-588. Exhibit 2034
`
`is a true and correct copy of excerpts of Volumes VI–VIII of the trial testimony in
`
`minuscript form, which includes all of Craig Miller’s trial testimony conducted on
`
`September 29, 2017, October 2, 2017, and October 3, 2017.
`
`6.
`
`During the trial in the Dires Case, the parties entered thousands of
`
`exhibits into evidence. Although those exhibits were not publicly filed on the
`
`docket, they became publicly available at the conclusion of the trial when the parties
`
`did not request any confidentiality designations or restrictions from public access
`
`(with the exception of certain customer communications not being submitted in this
`
`proceeding). In addition, those exhibits were later provided to the Eighth Circuit
`
`Court of Appeals, again under no confidentiality designations or restrictions from
`
`public access.
`
`7.
`
`Exhibit 2035 is a true and correct copy of Plaintiff’s Exhibit 730 from
`
`the Dires Case trial, which are materials produced by Dires that include instructions
`
`2
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`Sleep Number Corp.
`EXHIBIT 2033
`IPR2019-00500
`Page 3
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`
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`Case No. IPR2019-00500
`Patent No. 9,737,154 B2
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`from Craig Miller regarding training. Exhibit 2036 is a true and correct copy of
`
`Defendant’s Exhibits 212, 213, and 215 and Plaintiff’s Exhibits 716 and 718 from
`
`the Dires Case trial, which are emails produced by Dires that illustrate the training
`
`of its employees.
`
`8.
`
`Exhibit 2037 is a true and correct copy of Defendant’s Exhibits 172 and
`
`174 from the Dires Case trial, which is the Agreement and an Amendment to the
`
`Agreement between Select Comfort Corporation and American National
`
`Manufacturing, Inc., dated August 11, 2006 and January 22, 2009 respectively.
`
`9.
`
`I am aware from non-confidential, public documents, testimony, and
`
`information
`
`in
`
`the Dires Case
`
`and
`
`from Dires’ website
`
`at
`
`https://www.personalcomfortbed.com/the-original-number-bed (a true and correct
`
`copy of which is Exhibit 2038) that:
`
`a.
`
`ANM purchased the Instant Comfort brand name of adjustable
`
`air beds in July 2006.
`
`b.
`
`ANM was subject to a non-compete agreement with Sleep
`
`Number from August 2006 through November 2011. This non-compete
`
`agreement prohibited ANM and its President, Craig Miller, from selling
`
`consumer adjustable air beds, except in small numbers to a small number of
`
`existing customers—specifically no more than 100 beds to each existing
`
`customer—thus limiting ANM’s distribution of adjustable air beds. Dires
`
`3
`
`Sleep Number Corp.
`EXHIBIT 2033
`IPR2019-00500
`Page 4
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`
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`Case No. IPR2019-00500
`Patent No. 9,737,154 B2
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`refers to the non-compete on the website referenced above as causing a
`
`“limited distribution of adjustable firmness mattresses.”
`
`c.
`
`According to his testimony at trial, after the expiration of this
`
`non-compete agreement, Craig Miller intended to take ANM’s Instant
`
`Comfort brand direct to the consumer.
`
`d.
`
`In early 2012, he helped form an entity called Dires, LLC, at
`
`which he testified his title is Managing member and co-founder.
`
`e.
`
`Dires has been identified as a Real-Party-in-Interest in these IPR
`
`proceedings. Dires describes itself as a sister company to ANM and describes
`
`both ANM and Real-Party-in-Interest Sizewise Rentals, LLC as its parent
`
`company.
`
`f.
`
`Dires has sold adjustable air beds manufactured by ANM directly
`
`to consumers since September 2012.
`
`10. Sleep Number accuses ANM’s consumer air beds and Dires’ consumer
`
`air beds of patent infringement in the District Court Case—more specifically, that
`
`the beds have been sold with certain accused air controllers and certain accused
`
`source code. I understand Dr. John Abraham and Dr. George Edwards are
`
`submitting declarations (Exhibits 2027, 2029) in support of Patent Owner’s
`
`Response stating their opinions that ANM’s, and thus Dires’, consumer air beds copy
`
`Sleep Number’s patents and consumer air beds.
`
`4
`
`Sleep Number Corp.
`EXHIBIT 2033
`IPR2019-00500
`Page 5
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`
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`Case No. IPR2019-00500
`Patent No. 9,737,154 B2
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`11. As depicted on ANM’s website, ANM’s adjustable air beds are branded
`
`as “Instant Comfort” beds: https://www.instantcomfort.com/. I understand that
`
`ANM sells its brand directly to consumers and to other retailers. As depicted on
`
`Dires’ website, Dires’ adjustable air beds are branded as “Personal Comfort” beds:
`
`https://www.personalcomfortbed.com/. I understand that Dires sells its brand
`
`directly to consumers.
`
`12.
`
`I understand that Dires’ adjustable air beds are manufactured by ANM.
`
`I also understand Dr. Abraham opines in his declaration (Exhibit 2027) that the air
`
`controllers sold with these respective air beds are substantially the same and that
`
`both are manufactured by ANM.
`
`13.
`
`I understand from reviewing the Dires website referenced above,
`
`https://www.personalcomfortbed.com/the-original-number-bed (Exhibit 2038), that
`
`Personal Comfort claims to have helped “more than 20,000 sleepers achieve better
`
`and more restful sleep.”
`
`14.
`
`I understand from reviewing ANM’s public social media and website
`
`that it advertises its Instant Comfort brand as “the Number Bed that changes with
`
`you.” Exhibit 2039 is a true and correct copy of Instant Comfort’s User Guide,
`
`which
`
`is publically
`
`available on
`
`the
`
`Instant Comfort website
`
`at
`
`https://www.instantcomfort.com/wp-content/uploads/2018/09/IC-User-Guide.pdf,
`
`downloaded October 16, 2019, and which uses this phrase. Additionally, below is a
`
`5
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`Sleep Number Corp.
`EXHIBIT 2033
`IPR2019-00500
`Page 6
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`
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`Case No. IPR2019-00500
`Patent No. 9,737,154 B2
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`true and correct copy of a screen shot of a post on Instant Comfort’s Facebook page
`
`at https://www.facebook.com/instantcomfort/posts/2335481476491633, taken on
`
`October 16, 2019, which uses this phrase:
`
`
`
`15.
`
`I understand from basic internet research, including on ANM’s website,
`
`that, since 2012 when ANM was able to increase its consumer air beds sales, ANM
`
`has expanded to retailers other than Dires. I understand that those retailers sell
`
`ANM’s Instant Comfort adjustable air beds at a number of physical retail locations
`
`across the country as well as on those retailer’s websites. As just one example, when
`
`6
`
`Sleep Number Corp.
`EXHIBIT 2033
`IPR2019-00500
`Page 7
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`
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`Case No. IPR2019-00500
`Patent No. 9,737,154 B2
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`searching on ANM’s “Find a Store” website for retailers of Instant Comfort beds
`
`within 200 miles of Detroit, Michigan, I found over 50 results:
`
`
`
`See https://www.instantcomfort.com/find-a-store/.
`
`16. ANM’s “Find a Store” websites sets a maximum geographic search
`
`area of 200 miles, and therefore the website itself does not identify how many
`
`retailers currently sell ANM’s Instant Comfort products. As a result, I worked with
`
`my office’s paralegal to identify various city/state searches on the free online
`
`mapping program https://www.mapdevelopers.com. In doing so, I coordinated
`
`searches of geographic areas all across the country in conjunction with the “Find a
`
`Store” website. This allowed me to estimate how many retailers currently sell
`
`ANM’s Instant Comfort products. Based upon my review and analysis, it appears
`
`7
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`Sleep Number Corp.
`EXHIBIT 2033
`IPR2019-00500
`Page 8
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`
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`Case No. IPR2019-00500
`Patent No. 9,737,154 B2
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`ANM is selling Instant Comfort beds at over 175 retail locations across the country.
`
`I believe this to be a drastic increase from the limited number of customers to whom
`
`ANM was selling its Instant Comfort beds during the 2006-2011 period while under
`
`a non-compete agreement with Sleep Number and that this demonstrates the success
`
`ANM has had in selling consumer adjustable air beds since 2012.
`
`I declare under penalty of perjury that the foregoing is true and correct.
`
`Dated: October 23, 2019
`
`
`
`
`
`s/Elizabeth A. Patton
`Elizabeth A. Patton
`Fox Rothschild LLP
`Suite 2000, Campbell Mithun Tower
`222 South Ninth Street
`Minneapolis, MN 55402-3338
`Phone: (612) 607-7000
`Fax: (612) 607-7100
`E-mail: epatton@foxrothschild.com
`
`8
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`Sleep Number Corp.
`EXHIBIT 2033
`IPR2019-00500
`Page 9
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`
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