UNITED STATES PATENT AND TRADEMARK OFFICE
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`____________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`____________
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`AMERICAN NATIONAL MANUFACTURING INC.,
`Petitioner,
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`v.
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`SLEEP NUMBER CORPORATION
`f/k/a SELECT COMFORT CORPORATION,
`Patent Owner.
`____________
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`Case No. IPR2019-00500
`Patent No. 9,737,154 B2
`____________
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`PATENT OWNER’S OBJECTIONS TO PETITIONER’S EVIDENCE
`PURSUANT TO 37 C.F.R. § 42.64(b)(1)
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`____________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`____________
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`AMERICAN NATIONAL MANUFACTURING INC.,
`Petitioner,
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`v.
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`SLEEP NUMBER CORPORATION
`f/k/a SELECT COMFORT CORPORATION,
`Patent Owner.
`____________
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`Case No. IPR2019-00500
`Patent No. 9,737,154 B2
`____________
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`PATENT OWNER’S OBJECTIONS TO PETITIONER’S EVIDENCE
`PURSUANT TO 37 C.F.R. § 42.64(b)(1)
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`Case No. IPR2019-00500
`Patent No. 9,737,154 B2
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`Pursuant to 37 C.F.R. § 42.64 and the Federal Rules of Evidence, as applied
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`by the Board, Patent Owner Sleep Number Corporation (“Sleep Number”) provides
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`the following objections to evidence submitted by Petitioner American National
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`Manufacturing Inc. (“ANM”). These objections are timely served within five (5)
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`business days.
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`Sleep Number serves ANM with these objections to provide notice that Sleep
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`Number may move to exclude the challenged evidence under 37 C.F.R. § 42.64(c)
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`unless ANM cures the defects associated with the challenged evidence identified
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`below. In addition, Sleep Number reserves the right to present further objections to
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`this or additional evidence submitted by ANM, as allowed by the applicable rules or
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`other authority.
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`Exhibit 1033 – “Declaration of Craig S. Miller in Support of Petitioner’s
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`Opposition to Patent Owner’s Motion for Additional Discovery”
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`Sleep Number objects to Exhibit 1033 as irrelevant, misleading, and
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`confusing under Fed. R. Evid. 401–403. Throughout, Craig Miller misleadingly
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`testifies as to information he either has no personal knowledge of or has not provided
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`sufficient support for. See, e.g., ¶ 3 (starting with the sentence “At the time, Sleep
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`Number had significant product failures related to the structural integrity of the air
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`chambers in their product lines.” and including the next five sentences); ¶ 4 (“[T]his
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`Patent No. 9,737,154 B2
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`business has never fully recovered from the non-compete and from Sleep Number’s
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`other anticompetitive activities.”); ¶ 6 (“At no time have I or anyone else at
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`American National Manufacturing ever seen or examined any of Sleep Number’s
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`source code for any of their air controllers.” (bold emphasis added)); ¶ 7 (“[I]t was
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`Sleep Number who sought our air controllers.”); ¶ 7 (“I believe that Sleep Number
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`accused one of these legacy controllers as infringing the ‘747 and ‘154 patents in the
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`District Court case, despite the air controller predating both patents by several
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`years.”); ¶ 8 (“Sleep Number was using these industry contacts I provided to steal
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`component suppliers away from American National.”); ¶ 9 (“As was found by the
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`jury in the District of Minnesota, our statement that our products are better quality
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`than Sleep Number is not false—our construction techniques and designs are
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`superior to theirs.”); ¶ 10 (“[ANM’s] construction techniques and designs are
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`superior to [Sleep Number’s].”); ¶ 14 (testifying that Sleep Number “possesses 95%
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`of the consumer air bed market”). The probative value of such unsupported
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`conclusory statements is far outweighed by a danger of confusion and prejudice.
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`Accordingly, Sleep Number objects to this Exhibit as irrelevant, misleading, and
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`confusing under Fed. R. Evid. 401–403.
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`Sleep Number further objects to this Exhibit as lacking authentication as
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`required under Fed. R. Evid. 901–902. Rule 901 requires that the “proponent must
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`produce evidence sufficient to support a finding that the item is what the proponent
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`claims it is.” ANM has failed to provide any evidentiary foundation for portions of
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`this document. For example, ANM provides no authentication for an article included
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`in a website cited in paragraph 3. Further, paragraph 15 attempts to attest to Sleep
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`Number and ANM’s sales revenues for 2018 and 2019 respectively, without
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`providing any authentication or method for reaching such numbers. Accordingly,
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`this testimony is irrelevant, misleading, unduly prejudicial, and confusing under
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`Fed. R. Evid. 401–403.
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`Sleep Number further objects to this Exhibit to the extent testimony contained
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`therein is more prejudicial than probative under Fed. R. Evid. 403. By way of
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`example, at least three portions of this Exhibit fall into this category. First, the
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`unauthenticated article included in a website cited in paragraph 3 involves an
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`unrelated lawsuit that took place over ten years ago and that is wholly irrelevant to
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`these proceedings. The vaguely written article provides only alleged information
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`about Sleep Number’s mattresses and its use is highly prejudicial to Sleep Number,
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`particularly given that the lawsuit was repeatedly dismissed and never proceeded
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`beyond the Rule 12 stage, yet there is no mention of that fact in this Exhibit. Second,
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`Craig Miller’s testimony in paragraph 4 regarding his unsubstantiated claims of anti-
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`competitive behavior is irrelevant, unsupported, and speculative at best. As a result,
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`such self-serving and conclusory testimony is prejudicial to Sleep Number. Third,
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`Craig Miller’s proffered testimony in paragraph 10 is self-serving, speculative,
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`misleading, and irrelevant. Indeed, Miller’s testimony that Sleep Number did not
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`adopt his designs because “it would be too expensive or add too much cost to their
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`products” is speculative and misleading, as it falsely indicates Sleep Number at one
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`point considered adopting ANM’s designs. Likewise, Miller’s testimony regarding
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`the jury’s findings in an unrelated case is misleading and irrelevant, as it falsely
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`implies the jury found that ANM’s products are superior to Sleep Number’s, which
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`it did not. Accordingly, this testimony is irrelevant, misleading, unduly prejudicial,
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`and confusing under Fed. R. Evid. 401–403, and its probative value is far
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`outweighed by a danger of undue prejudice.
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`Sleep Number further objects to this Exhibit as containing inadmissible
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`hearsay under Fed. R. Evid. 801–802. For example, proffered testimony in
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`paragraph 4 includes purported statements of Kirk Stoa, an out of court declarant, to
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`prove the truth of the matter asserted, i.e. that “in the spirit of the agreement and our
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`commitment to working together long term” Sleep Number asked ANM to exit an
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`unrelated agreement. As another example, proffered testimony in paragraph 3 refers
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`to “reports of mold and mildew which formed on [Sleep Number’s] air chambers”
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`and to a Consumerist article, both of which come from out of court declarants to
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`prove the truth of the matter asserted, i.e. that Sleep Number wanted ANM’s
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`assistance on mattress construction. Such testimony meets the definition of hearsay
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`under Fed. R. Evid. 801, and because no exception applies, it is inadmissible under
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`Fed. R. Evid. 802.
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`Sleep Number further objects to this Exhibit to the extent testimony contained
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`therein mischaracterizes the documents to which it cites, including Exhibits 1034
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`and 2037, as discussed below in relation to each Exhibit.
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`Exhibit 1034 – “IPR 5 - Nautilus Warranty Exposure”
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`Sleep Number objects to Exhibit 1034 as lacking authentication as required
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`under Fed. R. Evid. 901–902. Rule 901 requires that the “proponent must produce
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`evidence sufficient to support a finding that the item is what the proponent claims it
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`is.” ANM provides no evidentiary foundation for this document or attempt to
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`authenticate it. Accordingly, this evidence is irrelevant, misleading, unduly
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`prejudicial, and confusing under Fed. R. Evid. 401–403.
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`Sleep Number further objects to this Exhibit as containing inadmissible
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`hearsay under Fed. R. Evid. 801–802. This Exhibit consists of statements by
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`Nautilus, an out of court declarant, to prove the truth of the matter asserted, i.e. that
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`its consumer sales were highest before Craig Miller entered into a consulting
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`agreement with Sleep Number. Such testimony meets the definition of hearsay
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`under Fed. R. Evid. 801, and because no exception applies, it is inadmissible under
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`Fed. R. Evid. 802.
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`Sleep Number further objects to this Exhibit as irrelevant under Fed. R. Evid.
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`401. This Exhibit purportedly details sales and warranty information from a
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`company that is not a party nor a real-party-in-interest in these proceedings. As
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`such, pursuant to Fed. R. Evid. 403, this Exhibit’s probative value is substantially
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`outweighed by a danger of prejudice and confusion inherent with referencing an
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`irrelevant exhibit.
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`Exhibit 1035 – “Declaration of Kyle L. Elliott in Support of Petitioner’s
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`Opposition to Patent Owner’s Motion for Additional Discovery”
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`Sleep Number objects to Exhibit 1035 as relying on self-serving attorney
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`argument. See Zero Gravity Inside, Inc. v. Footbalance Sys. Oy, No. IPR2015-
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`01769, 2017 WL 505951, at *8 (P.T.A.B. Feb. 2, 2017) (“Mere attorney arguments
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`and conclusory statements that are unsupported by factual evidence have little
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`probative value.”). Specifically, Sleep Number objects to the misleading
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`characterization in paragraphs 5–8 of Sleep Number’s offer to redact source code
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`and the District Court’s order regarding the same as Sleep Number (and seemingly
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`the District Court) was not aware that allegedly all source code constituted third-
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`party source code. Sleep Number further objects to the inaccurate characterization
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`in paragraph 9 that Sleep Number’s January 25, 2019 infringement contentions were
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`“the first time that Defendants were provided with meaningful information regarding
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`the theories of infringement regarding the source code.” As a result of these
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`mischaracterizations, ANM provides an out-of-context, incomplete picture of the
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`evidence, and pursuant to Fed. R. Evid. 106 fails to include all related evidence “that
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`in fairness out to be considered at the same time.” Accordingly, this Exhibit is
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`irrelevant, misleading, and confusing under Fed. R. Evid. 401–403, and its limited
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`probative value is outweighed by danger of undue prejudice and confusion.
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`Sleep Number further objects to this Exhibit to the extent testimony contained
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`therein mischaracterizes the documents to which it cites, including Exhibits 1036,
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`2043, and 2052, as discussed below in relation to those specific Exhibits.
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`Exhibit 1036 – “2019-09-12 Petitioner’s Ex Parte Application to Amend
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`Protective Order [-357, Dkt. 165]”
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`Sleep Number notes that Exhibit 1036 is mislabeled as “Petitioner’s Ex Parte
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`Application” when this Exhibit in fact is Patent Owner’s Ex Parte Application. Sleep
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`Number further notes that this Exhibit is referenced only in Exhibit 1035, not in
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`ANM’s Opposition. Accordingly, ANM has attempted to skirt the page limit and
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`the probative value of the Exhibit is substantially outweighed by a danger of
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`prejudice under Fed. R. Evid. 403.
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`Case No. IPR2019-00500
`Patent No. 9,737,154 B2
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`Sleep Number further objects to the extent ANM mischaracterizes the Exhibit
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`in its Opposition or in Exhibit 1035, the Declaration of Kyle L. Elliot. Specifically,
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`Sleep Number objects to ANM’s use of this Exhibit for the purpose of presenting an
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`out-of-context and misleading quote to assert that Sleep Number’s limited offer to
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`redact third-party source code applied to all at-issue source code when, in reality,
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`Sleep Number was not aware that allegedly all source code constituted third-party
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`source code when it made that offer. Such out-of-context assertion is misleading,
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`unduly prejudicial, and confusing under Fed. R. Evid. 401–403.
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`Citations to Sleep Number Exhibits 2037, 2043, and 2052
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`ANM cites to these Exhibits in its Opposition. Because they were filed by
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`Sleep Number, Sleep Number has no objection to the admission of the Exhibits
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`themselves. However, Sleep Number objects to the extent ANM mischaracterizes
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`Sleep Number’s Exhibits in ANM’s Opposition, Exhibit 1033 (the Declaration of
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`Craig S. Miller), or Exhibit 1035 (the Declaration of Kyle L. Elliot).
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`First, Sleep Number objects to the mischaracterization of Exhibit 2037, “Defts
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`172 and 174 (Dires Case).”
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` Specifically, Sleep Number objects to the
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`characterization of the parties’ relationships as discussed above in supra pages 1–2,
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`3–5.
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`Case No. IPR2019-00500
`Patent No. 9,737,154 B2
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`Second, Sleep Number objects to the mischaracterization of Exhibit 2043,
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`“September 26, 2019 District Court Order Modifying Protective Order.”
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`Specifically, Sleep Number objects to ANM’s use of this Exhibit to assert that Sleep
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`Number offered, and the District Court then ordered, the redaction of all third-party
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`source code when, in reality, Sleep Number (and seemingly the District Court) was
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`not aware that allegedly all source code constituted third-party source code.
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`Accordingly, the probative value of this Exhibit as used by ANM is outweighed by
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`a danger of undue prejudice and confusion under Fed. R. Evid. 401–403.
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`Third, Sleep Number objects to the mischaracterization of Exhibit 2052,
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`“ANMI00133414-00133422 Pump History Document.”
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` Specifically, Sleep
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`Number objects to the extent ANM relies upon this document to allegedly show that
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`the source code at issue is in fact owned by third-parties when, in reality, the
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`document merely provides reference to who created the software, not who owns it.
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`Accordingly, the probative value of this Exhibit as used by ANM is outweighed by
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`a danger of undue prejudice and confusion under Fed. R. Evid. 401–403.
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`9
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`Case No. IPR2019-00500
`Patent No. 9,737,154 B2
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`Dated: November 6, 2019
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`Respectfully submitted,
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`By: /s/Luke Toft
`Luke Toft (Reg. No. 75,311)
`Andrew S. Hansen (pro hac vice)
`Archana Nath (pro hac vice)
`Elizabeth A. Patton (pro hac vice)
`FOX ROTHSCHILD LLP
`222 South Ninth Street, Suite 2000
`Minneapolis, MN 55402-3338
`Telephone: (612) 607-7000
`Facsimile: (612) 607-71000
`ltoft@foxrothschild.com
`ahansen@foxrothschild.com
`anath@foxrothschild.com
`epatton@foxrothschild.com
`
`Steven A. Moore (Reg. No. 55,462)
`PILLSBURY WINTHROP SHAW PITTMAN LLP
`501 West Broadway, Suite 1100
`San Diego, CA 92101
`Telephone: (619) 234-5000
`Facsimile: (619) 236-1995
`steve.moore@pillsburylaw.com
`
`Kecia J. Reynolds (Reg. No. 47,021)
`PILLSBURY WINTHROP SHAW PITTMAN LLP
`1200 Seventeenth Street, NW
`Washington, DC 20036
`Telephone: (202) 663-8000
`Facsimile: (202) 663-8007
`kecia.reynolds@pillsburylaw.com
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`Attorneys for Patent Owner
`Sleep Number Corporation
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`Case No. IPR2019-00500
`Patent No. 9,737,154 B2
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`CERTIFICATE OF SERVICE
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`Pursuant to 37 CFR § 42.6(e), the undersigned hereby certifies that on
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`November 6, 2019, the foregoing Patent Owner’s Objections to Petitioner’s
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`Evidence Pursuant to 37 C.F.R. § 42.64(b)(1) was served via e-mail, as authorized
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`by the Petitioner, at the following email correspondence address of record:
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`Kyle L. Elliott
`kelliott@spencerfane.com
`Kevin S. Tuttle
`ktuttle@spencerfane.com
`Brian T. Bear (pro hac vice)
`bbear@spencerfane.com
`Lori J. Allee
`jallee@spencerfane.com
`SPENCER FANE LLP
`1000 Walnut Street, Suite 1400
`Kansas City, MO 64106
`
`Jaspal S. Hare
`jhare@spencerfane.com
`SPENCER FANE LLP
`2200 Ross Avenue
`Suite 4800 West
`Dallas, TX 75201
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`Dated: November 6, 2019
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`
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`
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`/s/Luke Toft
`Luke Toft (Reg. No. 75, 311)
`Counsel for Patent Owner
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`
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`11
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