`
`
`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
`____________
`
`
`PETITIONER’S AMENDED OPPOSITION TO PATENT OWNER’S
` MOTION FOR ADDITIONAL DISCOVERY AND OTHER
`MISCELLANEOUS RELIEF (PAPER 18)
`
`
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`Case No. IPR2019-00500
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`TABLE OF CONTENTS
`INTRODUCTION ............................................................................................. 1 
`I. 
`II.  LEGAL STANDARD ........................................................................................ 2 
`III. 
`ARGUMENT ................................................................................................. 3 
`A.  Sans evidence, PO fails to carry its heavy burden to show the additional
`discovery is “necessary in the interest of justice” ................................................. 3 
`1.  Factor 1—PO failed to demonstrate it is in “possession” of any probative
`evidence, and there is no more than “a possibility and mere allegation” here .. 3 
`2.  Factor 2—PO’s Requests implicate the Parties’ litigation position,
`namely, as to noninfringement ........................................................................... 5 
`3.  Factor 3—Other means exist that PO could use to demonstrate
`commercial success such as evidence related to its own products .................... 7 
`4.  Factor 4—PO’s instructions and requests (expressly implicating other
`disputed and protected documents) are far from “easily understandable” ........ 7 
`5.  Factor 5—PO’s Requests covering “all” products and 10 years of
`financial data are overly burdensome ................................................................ 9 
`B.  Page Limit Extension is Not Warranted ...................................................... 10 
`IV. 
`CONCLUSION ............................................................................................ 10 
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`TABLE OF AUTHORITIES
`
` Page(s)
`
`Cases
`Apple Inc. v. Sightsound Tech., LLC,
`CBM2013-00020, Paper 40 .................................................................................. 6
`Brown & Williamson Tobacco Corp. v. Philip Morris Inc.,
`229 F.3d 1120 (Fed. Cir. 2000) ............................................................................ 7
`Chervon,
`IPR2015-00595, Paper 31 ..................................................................................... 9
`Douglas Dynamics, L.L.C. v. Meyer Prods., LLC,
`IPR2015-01839, Paper 29 ..................................................................................... 5
`Garmin Int’l, Inc. et al. v. Cuozzo Speed Tech. LLC,
`IPR2012-00001, No. 26 (Mar. 5, 2013) .......................................................passim
`Jazz Pharm., Inc. v. Amneal Pharm. LLC,
`C.A. No. 13-391(ES) (JAD), 2016 WL 11480203 (D.N.J. Jan. 22,
`2016) ..................................................................................................................... 8
`Kingston,
`IPR2015-00149, Paper 24 ..................................................................................... 4
`Seadrill Amer. Inc. v. Transocean Offshore Depwater Drilling, Inc.,
`IPR2015-01929, Paper 31 ..................................................................................... 6
`Sleep Number Corp. v. American National Manufacturing, Inc.,
`C.A. No. 5:18-cv-00357 AB (SPx) (C.D. Cal. Feb. 20, 2018) ....................... 1, 12
`Statutes
`35 U.S.C. § 316(a)(5) ................................................................................................. 2
`Other Authorities
`37 C.F.R. § 42.6(e) ................................................................................................... 12
`37 C.F.R. § 42.51(b)(2) .............................................................................................. 2
`
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`154 Cong. Rec. S9988 (daily ed. Sept. 27, 2008) (statement of Sen.
`Kyl) ....................................................................................................................... 3
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`Petitioner American National Manufacturing, Inc. (“ANM” or “Petitioner”)
`files this Opposition in response to Patent Owner Sleep Number Corp.’s (f/k/a Select
`Comfort Corp.) (“PO” or “Sleep Number”) Motion for Additional Discovery and to
`Waive the Word Count for the Parties’ Response, Reply, and Sur-Reply (Paper 18)
`(the “Motion”).1 Ex. 2016 provides PO’s Discovery Requests (the “Requested
`Discovery” or “Requests”).
`I.
`
`INTRODUCTION
`PO’s Motion is the first step of opening Pandora’s Box. PO seeks detailed,
`customized information covering “all” of ANM’s air bed products spanning ten
`years. The Requests are complicated and expressly implicate confidential
`documents protected by the District Court’s protective order.2 Compliance would
`be extremely burdensome and appear to require violating the District Court’s
`protective order, which prohibits the use of protected documents in this proceeding.
`PO is the Goliath in the premium air mattress industry,3 while ANM is a mere
`David.4 PO’s proffered justification for its requested discovery is secondary indicia
`of nonobviousness (i.e., copying and commercial success). It follows that PO would
`
`1 This brief is on behalf of ANM only. Sizewise Rentals, LLC (“Sizewise”), who is
`not a named party to this action, is not believed to be entitled to participate in this
`proceeding, and is not believed to be subject to the PO’s requested discovery (which
`does not include a request for a subpoena). To the extent the Board disagrees, the
`Board’s guidance would be appreciated.
`2 The “District Court” refers to the district court in Sleep Number Corp. v. American
`National Manufacturing, Inc., C.A. No. 5:18-cv-00357 AB (SPx) (C.D. Cal. Feb.
`20, 2018).
`3 See Ex. 1028 (stating revenue of approx. $1.5 billion).
`4 See Ex. 1029 (stating revenue of approx. $21 million (est.)).
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`be in possession of supporting evidence at least related its own highly touted
`practicing products and marketing materials related to ANM’s accused products.
`Yet, the Motion provides no substantive evidence in support and fails to make even
`a threshold showing. Tellingly, PO’s own discovery responses from the District
`Court action failed to identify “secondary indicia” as relevant, let alone provide its
`“Rule 11” basis for such an assertion, as it was so required to do in response to
`ANM’s duly propounded written discovery. This is an admission by omission.
`Inevitably, delving into commercial success (and the required element of
`“nexus”) would lead to a trial-within-a-trial on infringement (with associated
`evidence, arguments, additional declarants) and derail this Board’s effort to maintain
`an orderly and timely proceeding. The Motion fails to justify imposing such drastic
`burdens on the parties and the Board.
`A moving party must show the discovery is necessary in the interest of justice.
`The Motion consists exclusively of self-serving attorney argument supported by a
`self-serving and unsupported attorney declaration. Such is insufficient to satisfy the
`Garmin factors. PO cannot carry its heavy burden on this record.
`The Board should deny the requested additional discovery and ancillary relief.
`II. LEGAL STANDARD
`The movant for additional discovery must show that it is “necessary in the
`interest of justice.” 35 U.S.C. § 316(a)(5).5 This standard is higher than “good
`cause” and reflects the limited scope of inter partes review (“IPR”). The Board
`considers five factors to determine if the standard is met. See Garmin Int’l, Inc. et
`al. v. Cuozzo Speed Tech. LLC, IPR2012-00001, No. 26 (Mar. 5, 2013) (hereinafter
`
`
`5 Emphasis added throughout. See also 37 C.F.R. § 42.51(b)(2) (“The moving
`party must show that such additional discovery is in the interests of justice . . .”).
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`Garmin). These gate keeping factors reflect the important difference between the
`broad scope of discovery available under the Federal Rules of Civil Procedure and
`the far narrower scope that Congress intended for inter partes review.6 Additional
`discovery is restricted to “minor discovery that PTO finds to be routinely useful, or
`to discovery that is justified by the special circumstances of the case.” Garmin at 5.
`III. ARGUMENT
`A.
`Sans evidence, PO fails to carry its heavy burden to show the
`additional discovery is “necessary in the interest of justice”
`1.
`Factor 1—PO failed to demonstrate it is in “possession” of any
`probative evidence, and there is no more than “a possibility and
`mere allegation” here
`PO’s Motion relies exclusively on attorney argument and lacks substantive
`evidence. See Motion at 5 (Without citation to evidence, the Motion states “[t]his
`factor [1] is easily satisfied; Sleep Number is in possession of evidence that
`something useful will be uncovered.”). The Motion’s proffered justification that the
`Requested Discovery relates to secondary indicia of nonobviousness, namely
`commercial success,7 is highly suspect as discussed below.
`PO highly touts its own products as “market successes,” which “implement[]
`the technology” of the patent-at-issue here. Ex. 1017, ¶¶ 11 and 22. It follows that
`PO would be in possession of substantive evidence of commercial success (if it
`
`
`6 154 Cong. Rec. S9988 (daily ed. Sept. 27, 2008) (statement of Sen. Kyl).
`7 The Motion (at 4) does assert “copying.” However, none of the Requests are
`directed to evidence of copying, but instead the Requests are directed to financial
`information. The Motion does not articulate how financial information would be
`probative of copying, nor does ANM see how. Thus, ANM does not further address
`copying and focuses its arguments on commercial success.
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`existed). It also follows that ANM would have touted such successful technology in
`its marketing materials if it was a driver of commercial success. Yet, PO’s Motion
`fails to identify and attach any such easily accessible evidence.
`PO’s failure to support its Motion with even such basic, readily accessible
`evidence demonstrates that its Requests are a fishing expedition and must fail. See
`Garmin at 6 (“The party requesting discovery should already be in possession of
`evidence tending to show beyond speculation that in fact something useful will be
`uncovered.” (emphasis added)). PO’s Motion is also in stark contrast to its lead case.
`See Kingston, IPR2015-00149, Paper 24 at 3–4 (proponent of discovery, who itself
`did not manufacture a practicing product, attached a claim chart for petitioner’s
`product and related consumer reviews that pointed out critical patent features to
`show nexus).
`The fishing nature of this Motion is further demonstrated by PO’s conduct in
`the District Court actions. In the District Court action, in response to ANM’s duly
`propounded interrogatories, PO neither identified “secondary indicia” generally, nor
`“commercial success” specifically—much less identify its Rule 11 basis of such an
`assertion—as it was required to do. See Ex. 1030 at 11–14. This is an admission by
`omission that PO has no basis to assert secondary indicia. This is particular troubling
`as PO was in possession of substantial discovery from ANM in the District Court
`action (including all the purported “evidence” alluded to in its present Motion)8 and
`was free to use that information in its responses but did not.9
`Even setting those issues aside, PO fails to make any evidentiary showing of
`
`8 Moreover, PO was entitled to use all discovery from a prior ITC action between
`the parties by stipulation. See Ex. 1031.
`9 The Motion here appears to raise serious ethical questions as to whether PO was
`intentionally withholding discovery in the District Court proceeding.
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`“nexus” as required. The Motion’s “nexus” argument is solely that the accused
`products are “coextensive . . . and nexus is presumed” (Motion at 6). But, if “[the
`invention is only a component” or product “embodies more than one patent,” it is
`not coextensive and the presumption of nexus does not apply. Douglas Dynamics,
`L.L.C. v. Meyer Prods., LLC, IPR2015-01839, Paper 29 at 5–6 (citations and
`quotations omitted). But here, a cursory review of the patent-at-issue shows that it
`is directed at best to a component (i.e., air controller) of a much larger air mattress
`system covered by multiple patents.10 Such is not entitled to the presumption of
`nexus. See id. PO provides no “threshold amount of evidence of an alleged nexus
`between the claimed invention and any commercial success” of the accused products
`as required. Id. at 5.
`Regardless of whether the presumption applies, the Motion makes no effort to
`establish that any accused product practices the patent-at-issue, such as by relying
`on public marketing materials. That alone dooms the Motion’s showing of “nexus.”
`In sum, PO’s utter lack of evidence dooms its Motion.11 See Garmin at 2
`(“The party requesting discovery should already be in possession of evidence
`tending to show beyond speculation that in fact something useful will be uncovered.”
`(emphasis added)). Factor 1 strongly supports denial.
`
`2.
`
`Factor 2—PO’s Requests implicate the Parties’ litigation
`position, namely, as to noninfringement
`As boards have recognized, additional discovery of this nature would
`
`10 PO itself accuses the same ANM products of infringing at least three different
`patents that are the subject of the three IPR between the parties.
`11 PO cannot assert the District Court’s protective order is unfairly prohibiting it
`from presenting relevant evidence here given that it was free to use any District
`Court evidence to respond to ANM’s interrogatories but did not.
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`inevitably lead to a trial-within-a-trial implicating the parties’ infringement positions
`and could derail an entire proceeding:
`. . . [the] requested discovery would broaden the scope of
`the instant proceedings significantly and delay the trial
`schedule. The discovery would result in a trial within a
`trial on the issue of infringement, with associated
`evidence, arguments, and (potentially) declarants from
`SightSound, and then the same from Apple in response.
`Apple Inc. v. Sightsound Tech., LLC, CBM2013-00020, Paper 40 at 6 (emphasis
`added). Rightfully so, this Board and others have recognized that it is not the
`Board’s job to make infringement determinations. See Hr’g Tr., Sep. 5, 2019, Paper
`1027 at 12:8–13:15 and 26:4–10; see also Seadrill Amer. Inc. v. Transocean
`Offshore Depwater Drilling, Inc., IPR2015-01929, Paper 31 at 5 (denying discovery
`noting “the scope of [IPR] does not extend to determinations of infringement.”).
`Here, ANM has neither admitted to infringement, nor are there any binding
`decisions as to infringement, nor any other shortcuts to avoid delving into a trial-
`within-a-trial on infringement to determine a possibility of nexus. Instead, ANM
`represents that issues of infringement are highly contested, PO’s infringement
`contentions are deficient, vague, and ambiguous, and raise issues of “practicing the
`prior art,” among other things.12 Wading into issues of nexus and infringement will
`certainly require ANM to put forth its noninfringement positions and supporting
`evidence.13 Inevitably, this would require the Board to review, analyze, and weigh
`
`
`12 See Ex. 1032 at 3 (describing deficiencies in PO’s infringement contentions, in
`particular, that the contentions provide no evidence of how numerous elements are
`met by any accused product).
`13 It is unclear how PO can candidly argue that it “understands that infringement is
`not at issue here” (Motion at 6) at the same time stating that it intends to show “nexus
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`competing interpretations and presentations of source code exhibits, physical
`product samples, and expert testimony, among other things.
`
`3.
`
`Factor 3—Other means exist that PO could use to demonstrate
`commercial success such as evidence related to its own products
`PO certainly could demonstrate (if exists) secondary indicia, such as
`commercial success, using information it possesses, such as information related to
`its own products as discussed in § III.A.1 supra. Yet, PO makes no basic evidentiary
`showing, or even bothers analyzing, evidence related to its own products.
`Moreover, ANM is the David with limited market share that at best would
`represent “modest” success. Compare Ex. 1029 with Ex. 1028 (showing ANM’s
`~$21M v. PO’s ~$1.5B in revenue). Such is insufficient to show commercial
`success. See Brown & Williamson Tobacco Corp. v. Philip Morris Inc., 229 F.3d
`1120, 1130 (Fed. Cir. 2000) (holding trial court’s failure to consider “modest level
`of commercial activity and limited market share achieved” by an accused product in
`view of other evidence of obviousness was harmless error) (cited approvingly by
`PO).
`
`4.
`
`Factor 4—PO’s instructions and requests (expressly implicating
`disputed and protected documents) are far from “easily
`understandable”
`PO’s instruction and requests are far from easily understandable and
`compliance necessarily involves interpretation of disputed documents that are
`covered by the District Court’s protective order.
`First, the Requests expressly implicate highly confidential information of
`ANM and third parties that is protected by the District Court’s protective order. For
`
`
`. . . [using] infringement contentions in the District Court Case” (Motion at 5) that it
`knows are in dispute (see n. 12 surpa).
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`example, third-party Medisphere Healthcare Ltd. (unaffiliated with ANM or
`Sizewise) is the owner of the “Platinum Source File source code” referenced in the
`Requests.14 See Ex. 2016 at 2. To date, the District Court has not modified its
`protective order to allow confidential information to be used in this IPR proceeding.
`Indeed, the District Court has already denied PO’s first attempt at modifying the
`protective order. It is entirely speculative that the District Court would be inclined
`to modify its protective order in response to PO’s further attempts seek
`modification.15
`Compliance with these Requests would appear to require ANM to consult
`
`14 PO has already violated the District Court’s protective order by using protected
`information to craft discovery in this proceeding—a use expressly prohibited by the
`protective order. See Ex. 2030 at 4 (counsel for ANM explaining this in detail); see
`also Jazz Pharm., Inc. v. Amneal Pharm. LLC, C.A. No. 13-391(ES) (JAD), 2016
`WL 11480203 at *2 (D.N.J. Jan. 22, 2016).
`15 PO has on Sep. 18, 2019 filed a second Ex Parte Application to seeking leave to
`seek modification of the District Court protective order. ANM filed its opposition
`on Sep. 19, 2019. It appears at best speculative that the District Court would
`entertain PO’s request given, inter alia: (1) the case has been stayed; (2) PO requests
`drastic relief to be able to use any and all District Court discovery in this IPR—
`which would appear to compromise this Board’s ability control discovery and
`efficient manage this proceeding (3) PO negotiated and stipulated to the District
`Court’s protective order; (4) waiver and estoppel likely apply, in particular, because
`PO was on notice of the intended IPR when it negotiated and stipulated to the
`protective order; and (5) the parties and third parties have relied on the protections
`of the current protective order in producing highly confidential materials and would
`be substantially prejudiced by the drastic expansion PO requests.
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`protected materials (including, e.g., third party Medisphere). Thus, ANM would
`potentially itself be in violation of the District Court’s protective order. To the extent
`there are any disputes regarding compliance with these Requests, it is unclear how
`such disputes could be resolved by the Board without further violations of the
`District Court’s protective order as the parties are not entitled to submit certain
`confidential information. Such issues permeate throughout the Requests and render
`all the requests far from “easily understandable.” It is inexplicable why PO chose
`to draft its Requests by expressly implicating protected materials.
`In another example of the Requests not being “easily understandable,”
`Interrogatory No. 4 requires identification of “which of the units sold/leased were to
`third party retailers or distributors” (Ex. 2016 at 3–4). It unclear whether this
`requires merely an identification of sales/revenue to all retailers and distributors in
`aggregate, or listing individually each of ANM’s retailers and distributors. This
`issue likely will lead to further disputes requiring additional judicial resources.
`
`5.
`
`Factor 5—PO’s Requests covering “all” products and 10 years
`of financial data are overly burdensome
`As an initial matter, Sizewise is not a party to this IPR proceeding, has had no
`opportunity to respond to this Motion, and is not subject to discovery (absent a duly
`issued subpoena, which PO has not requested). It’s unclear how ANM could comply
`with these Requests (if ordered) as to production of Sizewise information.16
`The Requests are far from being for documents as-kept-in-the-ordinary-
`course-of-business requests or “twelve specifically identified documents” (as was
`the case in Chervon, IPR2015-00595, Paper 31 at 4 (a case relied on by PO)).
`Instead, the Requests require ANM to prepare highly detailed, customized responses
`in very specific formats specified by the Requests in a short period of time. See Ex.
`
`16 The Motion does not assert any good cause for disregarding corporate formalities.
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`2016. Those detailed responses would require review, analysis, and compilation of
`complex financial data covering over ten years and all of ANM’s air bed products.
`See, e.g., Ex. 2016 at 4 (e.g., Request No. 1 requiring ANM to custom generate an
`Excel spreadsheet with detailed data since 2009 covering “all” air bed products). It
`is self-evident that “the financial burden, burden on human resource, and burden on
`meeting the time schedule” (Garmin at 5) of compliance would be extreme.
`B.
`Page Limit Extension is Not Warranted
`Given there appears to be no basis here to warrant granting additional
`discovery, there also is no basis for granting an ex ante page limit extension. PO’s
`aggressive litigation-style also cautions against an ex ante grant of additional pages
`that may be abused. See, e.g., n. 9, 11, 12, and 12 supra (regarding withholding
`discovery, candor, and protective order violation); IPR2019-00497, Paper 11
`(institution decision largely rejecting virtually all of PO’s spurious arguments).
`IV.
`
` CONCLUSION
`For the foregoing reasons, PO’s Motion should be denied.
`
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`Case No. IPR2019-00500
`Patent No. 9,737,154
`Date: September 23, 2019
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`Respectfully Submitted,
`SPENCER FANE LLP
`
`By /s/Kyle L. Elliott .
`Kyle L. Elliott, Reg. No. 39,485
`Kevin S. Tuttle, Reg. No. 52,307
`Spencer Fane LLP
`1000 Walnut Street, Suite 1400
`Kansas City, Missouri 64106-2140
`Telephone: (816) 474-8100
`
`Jaspal S. Hare, Reg. No. 66,988
`jhare@spencerfane.com
`Spencer Fane LLP
`5700 Granite Pkwy, Suite 650
`Plano, TX 75024
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`CERTIFICATE OF SERVICE
`Pursuant to 37 C.F.R. § 42.6(e), the undersigned hereby certifies that a copy
`
`of the foregoing PETITIONER’S AMENDED OPPOSITION TO PATENT
`
`OWNER’S MOTION FOR ADDITIONAL DISCOVERY AND OTHER
`
`MISCELLANEOUS RELIEF (PAPER 18) is served in its entirety on September 23,
`
`2019, by electronic mail, as authorized by Patent Owner’s Mandatory Notices,
`
`directed to the attorneys of record for Patent Owner at the following correspondence
`
`address of record:
`
`Steven A. Moore
`Steve.moore@pillsburylaw.com
`PILLSBURY WINTHORP SHAW PITTMAN LLP
`501 West Broadway, Suite 1100
`San Diego, CA 92101
`Luke Toft
`LToft@foxrothschild.com
`FOX ROTHSCHILD LLP
`Campbell Mithun Tower, Suite 2000
`222 South Ninth Street
`Minneapolis, MN 55402
`Kecia J. Reynolds
`kecia.reynolds@pillsburylaw.com
`PILLSBURY WINTHORP SHAW PITTMAN LLP
`1200 Seventeenth Street, NW
`Washington, DC 20036
`Date: September 23, 2019
`
`
`
`
` /s/Kyle L. Elliott .
`Kyle L. Elliott (Reg. No. 39,485)
`.
`Attorney for Petitioner
`American National Manufacturing, Inc.
`
`
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