Case 5:18-cv-00357-AB-SP Document 165 Filed 09/12/19 Page 1 of 18 Page ID #:5992
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`PILLSBURY WINTHROP SHAW
`PITTMAN LLP
`Steven A. Moore, SBN 232114
`steve.moore@pillsburylaw.com
`Nicole S. Cunningham, SBN 234390
`nicole.cunningham@pillsburylaw.com
`501 West Broadway, Suite 1100
`San Diego, CA 92101-3575
`Telephone: 619-234-5000
`Facsimile: 619-236-1995
`
`Kecia J. Reynolds (pro hac vice)
`kecia.reynolds@pillsburylaw.com
`1200 Seventeenth Street, NW
`Washington, DC 20036
`Telephone: 202-663-8000
`Facsimile: 202-663-8007
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`
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`Attorneys for Plaintiff
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`FOX ROTHSCHILD LLP
`Andrew S. Hansen (pro hac vice)
`ahansen@foxrothschild.com
`Archana Nath (pro hac vice)
`anath@foxrothschild.com
`Elizabeth A. Patton (pro hac vice)
`epatton@foxrothschild.com
`Lukas D. Toft (pro hac vice)
`ltoft@foxrothschild.com
`222 South Ninth Street, Suite 2000
`Minneapolis, MN 55402
`Telephone: 612-607-7000
`Facsimile: 612-607-7100
`
`Ashe P. Puri, SBN 297814
`apuri@foxrothschild.com
`10250 Constellation Blvd., Suite 900
`Los Angeles, CA 90067
`Telephone: 310-598-4150
`Facsimile: 310-556-9828
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`UNITED STATES DISTRICT COURT
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`CENTRAL DISTRICT OF CALIFORNIA
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`SLEEP NUMBER CORPORATION,
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`Plaintiff,
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`v.
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`SIZEWISE RENTALS, LLC,
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`Defendant.
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`SLEEP NUMBER CORPORATION,
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`Plaintiff,
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`AMERICAN NATIONAL
`MANUFACTURING, INC.,
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`v.
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`Defendant.
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`Case Nos. 5:18–cv–00356 AB (SPx)
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`5:18–cv–00357 AB (SPx)
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`PLAINTIFF’S EX PARTE
`APPLICATION TO MODIFY THE
`STIPULATED PROTECTIVE
`ORDER
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`DISCOVERY MATTER
`Hon. Sheri Pym, United States Magistrate
`Judge
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`American National Manufacturing Inc.
`Exhibit 1036
`IPR2019-00500
`Page 1
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`

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`Case 5:18-cv-00357-AB-SP Document 165 Filed 09/12/19 Page 2 of 18 Page ID #:5993
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`TO: THE HONORABLE ANDRE BIROTTÉ JR. AND ALL PARTIES AND
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`THEIR ATTORNEYS OF RECORD:
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`Plaintiff Sleep Number Corporation (“Plaintiff”) seeks ex parte relief outside
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`of the regular-noticed motion procedures in order to move the District Court in Case
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`Numbers 18-00356 AB (SPx) and 18-00357 AB (SPx) (the “District Court Action”)
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`to modify the District Court Action’s Stipulated Protective Order, located at 356 Case
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`Dkt. 69 and 357 Case Dkt. 75, granted at 356 Case Dkt. 74 and 357 Case Dkt. 78 and
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`modified at 356 Case Dkt. 121 and 357 Case Dkt. 121 (“Protective Order”).
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`Specifically, Plaintiff requests a modification of the Protective Order at paragraph 2.1,
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`to modify the term “Action” to include the current inter partes review proceedings,
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`IPR2019-00497, IPR2019-00500, and IPR2019-00514 (“IPR Proceedings”).
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`Defendants oppose Plaintiff’s motion.
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`Ex parte relief is available when the movant shows that his or her cause will be
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`“irreparably prejudiced if the underlying motion is heard according to regular noticed
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`motion procedures” and further that the movant is not responsible for the necessity of
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`the ex parte relief, or the relief is necessary because of excusable neglect. Mission
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`Power Eng'g Co. v. Cont'l Cas. Co., 883 F. Supp. 488, 492 (C.D. Cal. 1995). Here,
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`both of these requirements are met due to the tactical non-cooperation by Defendants
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`and the expedited timeline of the IPR Proceedings, including Plaintiff’s currently
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`pending motion for additional discovery, the expected short timeframe for the Patent
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`Trial and Appeal Board’s (“PTAB”) decision on that motion, the necessity for the
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`PTAB to have all the relevant information to make an informed decision on that
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`motion, and the upcoming October deadlines for Patent Owner Responses before
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`which all discovery must be complete.
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`In the District Court Action, Defendants Sizewise Rentals, LLC and American
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`National Manufacturing, Inc. (collectively “Defendants”) asserted counterclaims of
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`invalidity of U.S. Patent Nos. 8,769,747 (“the ‘747 Patent”), 9,737,154 (“the ‘154
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`-1-
`PLAINTIFF’S EX PARTE APPLICATION TO MODIFY THE STIPULATED
`PROTECTIVE ORDER
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`
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`American National Manufacturing Inc.
`Exhibit 1036
`IPR2019-00500
`Page 2
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`

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`Case 5:18-cv-00357-AB-SP Document 165 Filed 09/12/19 Page 3 of 18 Page ID #:5994
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`Patent”), and 5,904,172 (“the ‘172 Patent”) (collectively the “Patents-in-Suit”).
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`Discovery and disclosures included documents relating to Defendants’ invalidity
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`claims and Plaintiff’s defenses to the same, which documents were provided subject
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`to the Protective Order. In the middle of the District Court Action, Defendants sought
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`to assert their invalidity claims through inter partes review (“IPR”) proceedings and
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`petitioned the PTAB for IPR of the Patents-in-Suit. (See ‘356 Case Dkt. 133; 357
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`Case Dkt. 134.) Defendants then asked this Court to stay the District Court Action
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`pending final disposition of the IPR Proceedings, which the Court granted in light of
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`the potential IPR institution. (See 356 Case Dkt. 143; 357 Case Dkt. 142.) In issuing
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`the stay, this Court retained jurisdiction over the District Court Action, which would
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`include the Stipulated Protective Order. (See id.)1
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`On July 24, 2019, the PTAB instituted IPRs for the ‘747 Patent and ‘154 Patent,
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`and on August 5, 2019, instituted IPR for the ‘172 Patent. As such, per Defendants’
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`request, the validity of the Patents-in-Suit is now being addressed through the IPR
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`Proceedings while the District Court Action remains stayed.
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`On September 5, 2019, Plaintiff’s and Defendants’ counsel participated in an
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`initial conference call with the PTAB regarding Plaintiff’s request for additional
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`discovery. (See Declaration of Lukas Toft (“Toft Decl.”) Ex. 1.) At that time, the
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`PTAB granted Plaintiff’s request to bring a motion for additional discovery, including
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`discovery or disclosures already served in the District Court Action. That motion was
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`filed on September 12, 2019 per order of the PTAB. (Id. Ex. 1; Exs. 2–4.)
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`1 Because the Court retains jurisdiction over the District Court Action, the Court need
`not reopen the case to decide this motion. See Millennium Labs., Inc. v. Allied World
`Assurace Co. (U.S.), Inc., No. 12-CV-2280-BAS-KSC, 2017 WL 4810181, at *2
`(S.D. Cal. Oct. 24, 2017) (“This Court . . . retains the power to modify [the protective
`order] and it is not necessary for this case to be ‘reopened’ in order to consider
`Millennium’s request to modify.”).
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`PLAINTIFF’S EX PARTE APPLICATION TO MODIFY THE STIPULATED
`PROTECTIVE ORDER
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`American National Manufacturing Inc.
`Exhibit 1036
`IPR2019-00500
`Page 3
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`

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`Case 5:18-cv-00357-AB-SP Document 165 Filed 09/12/19 Page 4 of 18 Page ID #:5995
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`During the call with the PTAB, Plaintiff made clear that its motion for
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`additional discovery would request discovery regarding ANM’s sales and financial
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`information, which is relevant, at minimum, to adequately evaluate commercial
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`success—a secondary consideration of non-obviousness relevant to validity of the
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`Patents-in-Suit. (Toft Decl. Ex. 1.) Plaintiff notified the PTAB that it already had
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`certain, limited financial data from the District Court Action it would seek to use in
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`conjunction with the additional discovery and that this financial data produced in the
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`District Court Action supported why the additional discovery in the IPR Proceedings
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`was necessary. (Id.) Importantly, “[t]he Board instructed that where Sleep Number
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`was already in possession of certain sales information in the district court litigation,
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`it should request a modification of the protective order from the district court in order
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`to use that information in these proceedings.” (Id. Ex. 1, at 3; Ex. 5, Tr. at 27:2-7
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`(stating on the call that “you need to go back to the district court and modify [the
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`protective order] so you can produce [information] in front of us.”).) Indeed, during
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`the call, the Board stated: “[t]hat’s what the parties have done in the past and it is
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`fairly straight forward.” (Toft Decl. Ex. 5, Tr. at 27:7-9.)
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`Plaintiff is seeking to do exactly what the Board instructed—modify the
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`Protective Order to allow use of the District Court Action discovery in the IPR
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`Proceedings. But Defendants have been unwilling to cooperate, and Plaintiff has had
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`to resort to filing the present ex parte motion to seek the Court’s assistance.
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`Specifically, in response to the Board’s request and in order to streamline the
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`modification process and serve this Court’s judicial economy, Plaintiff’s counsel
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`reached out to Defendants’ counsel to seek agreement on a stipulation to modify the
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`Protective Order. (Toft Decl. Ex. 6.) In response, Defendants’ counsel stated that it
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`would “need more detail.” (Id.) Plaintiff’s counsel then provided more detail,
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`specifying that Plaintiff sought to include the IPR proceedings in the Protective
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`Order’s definition of “Action” to allow for the use of the District Court Action
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`PLAINTIFF’S EX PARTE APPLICATION TO MODIFY THE STIPULATED
`PROTECTIVE ORDER
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`American National Manufacturing Inc.
`Exhibit 1036
`IPR2019-00500
`Page 4
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`

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`Case 5:18-cv-00357-AB-SP Document 165 Filed 09/12/19 Page 5 of 18 Page ID #:5996
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`documents in the IPR Proceedings. (Id.) Plaintiff also communicated it would be
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`amenable to modifying the PTAB’s default protective order to include confidentiality
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`provisions similar to the District Court Action’s Protective Order to maintain the
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`confidentiality protection of any documents used in the IPR Proceedings. (Id.)
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`On September 9, 2019, the parties met and conferred via telephone between
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`counsel. During that phone call, Defendants’ counsel stated that they would not agree
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`to a “wholesale” modification of the Protective Order to allow all documents in the
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`District Court to be used in the IPR Proceedings, but that they would be willing to
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`consider a specific list of documents. (Toft Decl. Ex. 6.) In response, Plaintiff’s
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`counsel provided Defendants’ counsel with an initial exemplary list of thirteen
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`specific documents it requested to use in the course of the IPR Proceedings, all of
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`which are documents Defendants identified or attached to Defendants’ interrogatory
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`responses in the District Court Action. (Id.) In response, Defendants again refused to
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`consider stipulating to a modification. (Id.) Instead, Defendants’ counsel baselessly
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`accused Plaintiff’s counsel of violating the Protective Order by “using” its
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`confidential information in referencing bates numbers of documents in the District
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`Court Action in Plaintiff’s IPR discovery requests. (Id.) Plaintiff responded that it was
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`simply narrowing the scope of the requested modification and that Defendant’s
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`accusations that Plaintiff “used” Defendants confidential information by simply
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`indicating bates ranges and exhibit numbers in its requests were baseless and contrary
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`to law. (Id.) Plaintiff again asked Defendants to reconsider stipulating to a
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`modification but Defendants again refused. (Id.)
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`Additionally, Plaintiff requested that Defendants at least allow it to file with
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`the PTAB redacted versions of Plaintiff’s infringement contention claim charts served
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`in the District Court Action in support of Plaintiff’s motion for additional discovery
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`in the IPR Proceedings. (Id.) Plaintiff further ensured that all citations to source code
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`and other confidential information would be redacted from the contentions,
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`PLAINTIFF’S EX PARTE APPLICATION TO MODIFY THE STIPULATED
`PROTECTIVE ORDER
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`American National Manufacturing Inc.
`Exhibit 1036
`IPR2019-00500
`Page 5
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`alleviating any confidentiality concerns. (Id.) Again, Defendants refused. (Id.) At that
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`time, Plaintiff notified Defendants it would be moving forward with the motion for
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`additional discovery and an ex parte motion for leave to modify the Protective Order.
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`(Id.)
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`As a result of Defendants’ gamesmanship, Plaintiff was forced to file its motion
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`for additional discovery on September 12 without the benefit of its infringement
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`contentions, which further evidence the appropriateness of granting Plaintiff
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`additional discovery in the IPR Proceedings.2 (See Toft Decl. Exs. 2–4.) Moreover,
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`the limited financial documents Defendants produced in the District Court Action
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`would have provided further support for Plaintiff’s motion for additional discovery.
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`While Plaintiff was forced to submit its motion for additional discovery without the
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`benefit of documents from the District Court Action, it reserved the right to submit
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`such information in the event the Court grants Plaintiff’s request to modify the
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`Protective Order. (See id.) Time is of the essence as Defendants’ response to the
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`motion is due September 19, and the PTAB’s decision on the motion is expected soon
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`thereafter.
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`Additionally, Plaintiff needs the discovery and disclosures for the upcoming
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`October deadlines for Patent Owner Responses. Documents from the District Court
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`Action, such as the infringement contentions and sales and revenue for the accused
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`products, are key evidence in the PTAB’s validity analysis as described in more detail
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`below. Plaintiff should not be prevented from using the relevant documents produced
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`2 Additionally, Plaintiff had hoped to submit expert declarations with its motion for
`additional discovery to the PTAB to demonstrate evidence of the required nexus
`between the merits of the claimed invention and commercial success of the accused
`products was available. See, e.g., In re GPAC Inc., 57 F.3d 1573, 1580 (Fed. Cir.
`1995). However, as a result of Defendants’ wholesale refusal to stipulate to any
`modification of the Protective Order, Plaintiff was foreclosed from submitting such
`expert declarations. (See Toft Decl. Exs. 2–4.)
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`PLAINTIFF’S EX PARTE APPLICATION TO MODIFY THE STIPULATED
`PROTECTIVE ORDER
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`American National Manufacturing Inc.
`Exhibit 1036
`IPR2019-00500
`Page 6
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`

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`Case 5:18-cv-00357-AB-SP Document 165 Filed 09/12/19 Page 7 of 18 Page ID #:5998
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`in the District Court Action because Defendants made the choice to pursue invalidity
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`through the IPR Proceedings. Indeed, despite the PTAB’s instruction to seek
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`modification of the Protective Order, Defendants have wholesale refused to consider
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`modifying the Protective Order. In fact, Defendants have resorted to bad faith
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`arguments, attempting to use the Protective Order as both a sword (to stop any
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`discussion of produced documents in the IPR proceedings) and a shield (to stop
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`information helpful to Plaintiff from being considered by the PTAB).
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`These tactics are especially concerning, and further warrant ex parte relief, as
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`there are multiple additional approaching deadlines in which the PTAB must consider
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`the information that will be made available by modifying the Protective Order. In
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`addition to Plaintiff’s motion for additional discovery, these deadlines include, but are
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`not limited to: Defendants’ opposition to Plaintiff’s motion for additional discovery
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`on September 19, 2019; Plaintiff’s Response to IPR Petitions of ‘747 and ‘154 Patents
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`on October 16, 2019; and Plaintiff’s Response to IPR Petition of ‘172 Patent on
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`October 23, 2019.3 (Toft Decl. Exs. 7, 8.) If Defendants are able to use the Protective
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`Order as both a sword and a shield to prevent Plaintiff from using relevant and crucial
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`information already in its possession, Plaintiff will be unnecessarily prejudiced.
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`As discussed above, Plaintiff’s counsel has met and conferred extensively with
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`Defendants’ counsel on these issues. Further, Plaintiff’s counsel notified Defendants’
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`counsel that, due to its refusal to stipulate to modifying the Protective Order prior to
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`Plaintiff’s motion for additional discovery, Plaintiff would have no choice but to file
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`an ex parte motion in the District Court Action seeking to modify the Protective
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`Order. (Toft Decl. Ex. 6.)
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`Pursuant to Local Rule 7-19, contact information of counsel for Defendants is
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`3 The scheduling order set this date on October 21, 2019 but the parties stipulated to
`move it to October 23, 2019.
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`PLAINTIFF’S EX PARTE APPLICATION TO MODIFY THE STIPULATED
`PROTECTIVE ORDER
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`American National Manufacturing Inc.
`Exhibit 1036
`IPR2019-00500
`Page 7
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`

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`Case 5:18-cv-00357-AB-SP Document 165 Filed 09/12/19 Page 8 of 18 Page ID #:5999
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`as follows and Plaintiff’s counsel is providing a copy of this application to
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`Defendants’ counsel and notifying them of the 24-hour response deadline:
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`Spencer Fane LLP
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`Kyle L. Elliot (SBN 164209)
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`Email: kelliot@spencerfane.com
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`Kevin Tuttle (pro hac vice)
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`Email: ktuttle@spencerfane.com
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`Brian T. Bear (pro hac vice)
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`Email: bbear@spencerfane.com
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`1000 Walnut Street, Suite 1400
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`Kansas City, MO 64106
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`Jaspal S. Hare (SBN 282171)
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`5700 Granite Parkway, Suite 650
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`2200 Ross Avenue, Suite 4800 West
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`Dallas, Texas 75201
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`Telephone: (214) 750-3610
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`-7-
`PLAINTIFF’S EX PARTE APPLICATION TO MODIFY THE STIPULATED
`PROTECTIVE ORDER
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`American National Manufacturing Inc.
`Exhibit 1036
`IPR2019-00500
`Page 8
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`

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`Case 5:18-cv-00357-AB-SP Document 165 Filed 09/12/19 Page 9 of 18 Page ID #:6000
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`Facsimile: (214) 750-3612
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`Lewis Roca Rothgerber Christie LLP
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`Thomas J. Daly (SBN 119684)
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`Email: tdaly@lrrc.com
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`Drew Wilson (SBN 283616)
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`Email: dwilson@lrcc.com
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`655 N. Central Avenue, Suite 2300
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`Glendale, CA 91203-1445
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`Telephone: (626) 795-9900
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`Facsimile: (626) 577-8800
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`Dated:
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`By:
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`/s/Ashe P. Puri
`FOX ROTHSCHILD LLP
`Ashe P. Puri, State Bar No. 297814
`apuri@foxrothschild.com
`10250 Constellation Blvd., Suite 900
`Los Angeles, CA 90067
`Telephone: 310-598-4150
`Facsimile: 310-556-9828
`Attorneys for Plaintiff
`SLEEP NUMBER CORPORATION
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`-8-
`PLAINTIFF’S EX PARTE APPLICATION TO MODIFY THE STIPULATED
`PROTECTIVE ORDER
`
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`
`
`American National Manufacturing Inc.
`Exhibit 1036
`IPR2019-00500
`Page 9
`
`

`

`Case 5:18-cv-00357-AB-SP Document 165 Filed 09/12/19 Page 10 of 18 Page ID #:6001
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`MEMORANDUM OF POINTS AND AUTHORITIES
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`BACKGROUND
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`Plaintiff seeks leave and requests that the Court modify the Protective Order.
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`Specifically, Plaintiff requests the court modify paragraph 2.1 of the Protective Order
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`and define the term “Action” to include the current inter partes proceedings:
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`IPR2019-00497, IPR2019-00500, and IPR2019-00514 (“IPR Proceedings”). Plaintiff
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`makes this request in light of the need for use of this information in the IPR
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`Proceedings, which relate to the same Patents-in-Suit and claims at issue in the
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`District Court Action. In granting Plaintiff’s request to file a motion for additional
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`discovery in the IPR Proceedings, the PTAB explicitly directed that Plaintiff request
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`modification of the Protective Order from the District Court to the extent Plaintiff
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`“was already in possession of certain sales information in the district court litigation,”
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`stating that doing so is “what the parties have done in the past” and “is fairly straight
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`forward.” (Toft Decl. Ex. 5.) Although Plaintiff has attempted to stipulate with
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`Defendants to a modified Protective Order, Defendants have refused to consider such
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`modification.
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`Multiple impending deadlines in the IPR proceedings necessitate ex parte
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`modification of the Protective Order. First, the deadline for Plaintiff’s Motion for
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`Additional Discovery was September 12, 2019, and Defendants’ Opposition to
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`Plaintiff’s Motion for Additional Discovery is due September 19, 2019. (Toft Decl.
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`Ex. 1.) As detailed above and below, discussion of documents produced in this Action
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`are needed to support Plaintiff’s request for additional discovery in the IPR
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`proceedings. Thus, Plaintiff seeks modification of the Protective Order to submit
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`supplemental information to the PTAB in support of its motion for additional
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`discovery.
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`Second, Plaintiff’s Response to the ‘747 and ‘154 Patent IPR Petitions are due
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`October 16, 2019, and Plaintiff’s Response to the ‘172 Patent IPR Petition is due
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`-9-
`PLAINTIFF’S EX PARTE APPLICATION TO MODIFY THE STIPULATED
`PROTECTIVE ORDER
`
`
`
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`
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`American National Manufacturing Inc.
`Exhibit 1036
`IPR2019-00500
`Page 10
`
`

`

`Case 5:18-cv-00357-AB-SP Document 165 Filed 09/12/19 Page 11 of 18 Page ID #:6002
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`October 23, 2019. (Id. Exs. 7, 8.) As detailed below, the documents sought by Plaintiff
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`to use through modification of the Protective Order should be allowed to be used in
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`drafting Plaintiff’s Responses and considered in the ultimate decisions in the IPR
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`Proceedings. Particularly, these documents are relevant to Plaintiff’s non-obviousness
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`arguments, including secondary considerations such as commercial success and
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`copying.
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`As detailed in Plaintiff’s Application above, Plaintiff has repeatedly attempted
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`to work with Defendants, to no avail, to reasonably and narrowly modify the
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`stipulated Protective Order. Defendants’ consistent attempts to shield relevant
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`information from coming to light necessitated this ex parte motion. As such, Plaintiff
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`respectfully requests the Court grant its Ex Parte Motion to Modify the Protective
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`Order in accordance with this Motion.
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`“A district court retains the power to modify or lift protective orders that it has
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`ARGUMENT
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`entered.” Verizon California Inc. v. Ronald A. Katz Tech. Licensing, L.P., 214 F.R.D.
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`583, 585–86 (C.D. Cal. 2003). Importantly, this Circuit “strongly favors access to
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`discovery materials to meet the needs of parties engaged in collateral litigation.” Foltz
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`v. State Farm Mutual Auto. Ins. Co., 331 F.3d 1122, 1231 (9th Cir. 2003) (citation
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`omitted). As such, “district courts have inherent authority to grant a motion to modify
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`a protective order where ‘good cause’ is shown.” CBS Interactive, Inc. v. Etilize, Inc.,
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`257 F.R.D. 195, 201 (N.D. Cal. 2009) (citing Phillips ex rel. Estates of Byrd v.
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`General Motors Corp., 307 F.3d 1206, 1213 (9th Cir. 2002)). Good cause is shown if
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`a party will suffer prejudice or harm if a protective order is not modified. See id.
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`I.
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`Good Cause Exists to Modify the Protective Order
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`There is good cause to modify the Protective Order here because, as discussed
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`further below, the documents produced in the District Court Action relate directly to
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`the issues in the IPR Proceedings. Defendants attempt to prevent use of those relevant
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`-10-
`PLAINTIFF’S EX PARTE APPLICATION TO MODIFY THE STIPULATED
`PROTECTIVE ORDER
`
`
`
`
`
`
`American National Manufacturing Inc.
`Exhibit 1036
`IPR2019-00500
`Page 11
`
`

`

`Case 5:18-cv-00357-AB-SP Document 165 Filed 09/12/19 Page 12 of 18 Page ID #:6003
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`documents under the guise of confidentiality concerns. But it was Defendants’
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`decision to challenge the validity of the Patents-in-Suit through the IPR Proceedings.
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`And, likewise, it was Defendants’ decision to seek a stay in the District Court Action.
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`Now, Defendants seek to use a Protective Order to potentially keep any documents
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`from the Patents-in-Suit’s validity from coming to light. Courts have specifically
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`found that this type of gamesmanship is improper and have allowed for the disclosure
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`of information in related IPR proceedings:
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`The purpose of the protective order in this case was to protect from
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`the disclosure of confidential information—not to prevent the
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`discovery of relevant documents. [Defendant] made the decision to
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`bring the IPR proceedings after the initiation of this case, and
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`specifically requested to stay the case pending the resolution of
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`those proceedings. [Defendant] argued for the stay, in part, because
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`it was likely that the patents-in-suit would be invalidated, and thus
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`that no further proceedings would be necessary. Now, [defendant]
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`attempts to use the protective order as a shield to make sure certain
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`documents related to the patents’ validity will never come to light.
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`This is a form of gamesmanship the Court will not support, and,
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`thus, the Court refuses to adopt an interpretation of the protection
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`order to effectuate that result.
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`21 21
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`Milwaukee Elec. Tool Corp. v. Snap-on Inc., No. 14-CV-1296-JPS, 2016 WL
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`22 22
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`1719657, at *5 (E.D. Wis. Mar. 16, 2016).
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`Defendants’ improper gamesmanship is especially transparent in their refusal
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`to agree to Plaintiff submitting redacted copies of infringement contentions in its
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`Motion for Additional Discovery. Plaintiff offered to redact all citations to
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`confidential source code, which redactions would have alleviated any confidentiality
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`concerns. (See Toft Decl. Ex. 6.) Yet, Defendants still refused. (Id.) Such refusal
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`-11-
`PLAINTIFF’S EX PARTE APPLICATION TO MODIFY THE STIPULATED
`PROTECTIVE ORDER
`
`
`
`
`
`
`American National Manufacturing Inc.
`Exhibit 1036
`IPR2019-00500
`Page 12
`
`

`

`Case 5:18-cv-00357-AB-SP Document 165 Filed 09/12/19 Page 13 of 18 Page ID #:6004
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`clearly demonstrates that Defendants’ refusal to agree to modifying the Protective
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`Order is motivated not by confidentiality concerns, but by a desire to gain a tactical
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`advantage. Again, Defendants chose to litigate patent validity claims that are at issue
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`in the District Court Action not in front of this Court, but in front of the PTAB through
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`IPR. Changing the forum where validity issues are litigated was not Plaintiff’s choice;
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`Plaintiff should be entitled to defend its case in the same manner it would have had
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`the right to in the District Court Action.
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`a. Plaintiff Will Suffer Prejudice if the Protective Order Is Not
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`Modified Because the Sought Discovery Bares Directly on Issues
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`Central to the IPR Proceedings.
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`Plaintiff will suffer prejudice if the Protective Order is not modified to allow
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`12 12
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`Plaintiff to use documents from the District Court Action in the IPR Proceedings. The
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`District Court Action documents are directly relevant to the issues in the IPR
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`Proceedings. The same Patents-in-Suit and claims are at issue in both proceedings;
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`Defendants, however, unilaterally chose to challenge the validity of those Patents-in-
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`Suit in the IPR Proceedings instead of in the District Court Action. Defendants cannot
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`now use the Protective Order to prevent discovery of relevant information relating to
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`validity under the guise of confidentiality concerns. See Milwaukee Elec. Tool Corp.,
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`2016 WL 1719657, at *5 ; Specialty Prod., Inc. v. Baker Hughes Inc., No. CV H-15-
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`2915, 2016 WL 10770867, at *2 (S.D. Tex. Nov. 22, 2016). Indeed, the PTAB
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`expressly directed Plaintiff to seek modification of the Protective Order to use
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`documents already in its possession from the District Court Action in the IPR
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`Proceedings. Plaintiff therefore seeks modification of the Protective Order because
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`(1) documents from the District Court Action are relevant to the issues in the IPR
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`25 25
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`Proceedings and (2) those documents also establish the need for additional discovery
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`in the IPR Proceedings.
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`For example, documents produced in the District Court Action are relevant to
`-12-
`PLAINTIFF’S EX PARTE APPLICATION TO MODIFY THE STIPULATED
`PROTECTIVE ORDER
`
`
`
`
`American National Manufacturing Inc.
`Exhibit 1036
`IPR2019-00500
`Page 13
`
`

`

`Case 5:18-cv-00357-AB-SP Document 165 Filed 09/12/19 Page 14 of 18 Page ID #:6005
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`the claims in support of secondary considerations of non-obviousness, including at
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`least nexus, commercial success, and copying. Secondary considerations are uniquely
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`probative to establishing that an invention that appears to be obvious in light of prior
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`art is, in fact, not obvious. Transocean Offshore Deepwater Drilling, Inc. v. Maersk
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`Drilling USA, Inc., 699 F.3d 1340, 1349 (Fed. Cir. 2012). The Board itself recognized
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`the importance if this issue during the call. (Toft Decl. Ex. 5, Tr. at 12:8-16 (“[W]e
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`have the federal circuit that is very interested in the objective indicia of secondary
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`considerations.”). Thus, such evidence is important to present in the pending IPR
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`Proceedings. There is no legitimate reason to deprive Plaintiff of the ability to use this
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`10 10
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`evidence.
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`As to commercial success, “[t]here is a presumption that the patented invention
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`is commercially successful ‘when a patentee can demonstrate commercial success,
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`13 13
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`usually shown by significant sales in a relevant market, and that the successful product
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`is the invention disclosed and claimed in the patent.’” Omron Oilfield & Marine,
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`15 15
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`Inc. v. MD/TOTCO, IPR2013-00265, Paper 11 at 13, 2013 WL 8595961, at *8
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`(PTAB Oct. 31, 2013) (quoting Ecolochem, Inc. v. S. Cal. Edison Co., 227 F.3d
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`1361, 1377 (Fed. Cir. 2000)). There must be a “nexus” between the “merits of the
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`claimed invention” and the “commercial success of the product.” Id. (citations
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`omitted). “A prima facie case of nexus is established” when “the product that is
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