Case No. IPR2019-00500
`Patent No. 9,737,154
`
`
`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 MOTION FOR ADDITIONAL DISCOVERY
`
`
`
`
`WA 14042803.1
`
`
`Patent No. 9,737,154
`
`
`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 MOTION FOR ADDITIONAL DISCOVERY
`
`
`
`
`WA 14042803.1
`
`
`
`Case No. IPR2019-00500
`Patent No. 9,737,154
`
`TABLE OF CONTENTS
`I. Background. ....................................................................................................... 1
`II. Advertising and Marketing Is Relevant to Rebut Commercial Success. ........... 1
`A. There Is More Than a Mere Possibility of Useful Information. .................... 2
`B. The Remaining Garmin Factors Weigh in Favor of the Request .................. 5
`
`
`
`
`
`
`- i -
`
`
`WA 14042803.1
`
`
`
`Case No. IPR2019-00500
`Patent No. 9,737,154
`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`Federal Cases
`Demaco Corp. v. F. Von Langsdorff Licensing Ltd.,
`851 F.2d 1387 (Fed. Cir. 1988) ............................................................................ 2
`Garmin Int’l, Inc. v. Cuozzo Speed Techs. LLC,
`IPR2012-00001, Paper 26 (PTAB March 5, 2013) .......................................... 1, 4
`Garmin,
`IPR2012-00001, Paper 20 ..................................................................................... 4
`
`Seadrill Americas, Inc., et al. v. Transocean Offshore Deepwater
`Drilling, Inc.,
`IPR2015-01929, Paper 102 (PTAB May 18, 2017) ............................................. 1
`WBIP, LLC v. Kohler Co.,
`829 F.3d 1317 (Fed. Cir. 2016) ............................................................................ 1
`Regulations
`37 C.F.R. § 42.6(e) ..................................................................................................... 7
`
`- ii -
`
`
`WA 14042803.1
`
`
`
`Case No. IPR2019-00500
`Patent No. 9,737,154
`Petitioner (“ANM”) requests the Board require Patent Owner (“PO”) produce
`
`certain financial information rebut PO’s assertion of commercial success. (See Ex.
`
`1040).
`
`I.
`
`Background.
`PO asserts several theories of secondary considerations of non-obviousness in
`
`its Response, in particular, commercial success of its products that incorporate the
`
`technology of the challenged patent. (See Paper 45 at 66) Additionally, PO submitted
`
`declarations asserting a nexus between nearly all its products and the claims of the
`
`challenged patent. (See e.g. Ex. 2027, 2031, 2032) The Board granted PO’s
`
`discovery requests aimed at these theories. Although in its initial objections on this
`
`issue PO inexplicably declined to use its own products in support of commercial
`
`success, it is clear from their Response that they rely on their own products’ success
`
`in support of their commercial success arguments. ANM intends to rebut this
`
`assertion by showing that any commercial success in the air adjustable mattress
`
`industry, including PO’s claims of success, is due to advertising expenditures for
`
`marketing, sales staff, and retail stores, and that the alleged success is not due their
`
`product’s incorporation of the claimed features of the challenged patent.
`
`II. Advertising and Marketing Is Relevant to Rebut Commercial Success.
`The Board may grant additional discovery if it “is in the interests of justice,”
`
`and meets each factor of Garmin Int’l, Inc. v. Cuozzo Speed Techs. LLC, IPR2012-
`
`- 1 -
`
`
`
`
`
`Case No. IPR2019-00500
`Patent No. 9,737,154
`00001, Paper 26 at 6–7 (PTAB March 5, 2013). When commercial success is
`
`asserted, other factors that may be responsible for a product’s success become
`
`relevant in rebutting such contentions. See e.g. WBIP, LLC v. Kohler Co., 829 F.3d
`
`1317, 1329-30 (Fed. Cir. 2016). Commercial success due to business acumen and
`
`clever marketing must be considered when assessing non-obviousness. See Seadrill
`
`Americas, Inc., et al. v. Transocean Offshore Deepwater Drilling, Inc., IPR2015-
`
`01929, Paper 102 at 37-38 (PTAB May 18, 2017). ANM bears the burden of
`
`adducing evidence of advertising to rebut commercial success. See Demaco Corp.
`
`v. F. Von Langsdorff Licensing Ltd., 851 F.2d 1387, 1393 (Fed. Cir. 1988). ANM’s
`
`requests are in the interests of justice as evidence rebutting commercial success is
`
`relevant to an analysis of non-obviousness.
`
`A.
`There Is More Than a Mere Possibility of Useful Information.
`ANM has evidence tending to show something useful will be uncovered, and
`
`the proposed discovery will demonstrate that PO devotes significant resources to its
`
`marketing. The latest SEC form 10K from PO states that approximately 30-45% of
`
`its revenue is expended on “sales and marketing” and has grown from $512 million
`
`in 2014 to $687 million in 2018. (Ex. 1041 ¶ 2; Ex. 1042 at 33) Additionally, as PO
`
`has increased its “sales and marketing” budget, its overall revenue has increased
`
`each year in a correlated fashion. (Ex. 1042 at 33) PO is explicit in their own
`
`materials regarding the causation between this success “Marketing drives growth in
`- 2 -
`
`
`WA 14042803.1
`
`
`
`Case No. IPR2019-00500
`Patent No. 9,737,154
`our business by building brand relevance, reputation, awareness, consideration and
`
`ongoing engagement…” (Id. at 9) (emphasis added) For example, PO has
`
`emphasized the effect on sales of its high profile marketing deal with the National
`
`Football League. (Id.; Ex. 1041 ¶ 4; Ex. 1044) The discovery will show that PO’s
`
`outsized marketing commitment is not a recent phenomenon, but rather, has been a
`
`continuous business strategy both before and after its purported incorporation of the
`
`patented subject matter of the challenged patents.
`
`Also, even though PO’s current non-obviousness position aims to prove
`
`commercial success through ANM, this discovery will be used to rebut those
`
`contentions. PO’ Response addresses a previous lawsuit that it brought against Dires,
`
`LLC, which is broadly referenced as trademark suit. (See e.g. Ex. 2035-2037) In that
`
`case, PO complained that Dires, LLC, and ANM’s president Craig Miller, had
`
`increased its sales (achieving commercial success) due to an alleged confusion
`
`between its allegedly famous mark “Sleep Number,” and the Dires, LLC products.
`
`(Ex. 1041 ¶ 5; Ex. 1045 ¶¶ 65-7) PO stated there that the strength of its mark, was
`
`“[a]s a result of widespread use in connection with the advertising and promotion of
`
`its Sleep Number® beds and related products, Select Comfort has developed
`
`substantial good will and national recognition in the Trademarks-At-Issue as a
`
`source of high-quality mattresses and bedding products.” (Ex. 1045 ¶ 16) But now,
`
`largely having an adverse result in that litigation, PO now attempts to explain
`- 3 -
`
`
`WA 14042803.1
`
`
`
`Case No. IPR2019-00500
`Patent No. 9,737,154
`ANM’s success as being a result of “copying,” ascribing no relevance to its previous
`
`litigation contentions that the success was the result of association with PO’s
`
`trademark. Trademarks which PO contends were valuable due to the advertising.
`
`Additionally, PO maintains over 570 proprietary retail locations with
`
`attendant sales staff. Its own materials state that “[o]ur average sales-per-square foot
`
`is in the top 10 among U.S. specialty retailers and is driven by a differentiated store
`
`experience and modern store design.” (Ex. 1041 ¶ 3; Ex. 1043 at 1) “Store
`
`experience and modern store design” have nothing to do with any of the claimed
`
`features of the patents or even PO’s technology in a general sense. The discovery
`
`sought is directed to quantifying the annual expenditure for these locations and the
`
`staff that drives these sales.
`
`All of this information cuts against PO’s assertion that its, or anyone else’s,
`
`success in the air adjustable mattress industry can be attributable to minor, iterative
`
`technology improvements as disclosed in the patents. Rather, PO’s success in the
`
`industry is the product of savvy and expensive marketing campaigns, armies of sales
`
`staff, and “modern store design” of its retail outlets. While ANM is able to point to
`
`instances of this through public sources, the objective financial data regarding
`
`expenditures in these matters, which is sought by this discovery, will be useful
`
`“beyond speculation.” Garmin, IPR2012-00001, Paper 20 at 2.
`
`- 4 -
`
`
`WA 14042803.1
`
`
`
`Case No. IPR2019-00500
`Patent No. 9,737,154
`B.
`The Remaining Garmin Factors Weigh in Favor of the Request
`ANM is seeking information related to marketing and advertising to rebut
`
`PO’s secondary considerations, not litigation positions. PO’s high level financial and
`
`advertising information is publically known, but ANM cannot generate the detailed
`
`information necessary to perform the required analysis, and PO has access to and
`
`knows its financial and advertising information. Although ANM seeks compilations
`
`of data PO supplies as part of its obligations as a publically traded company, PO’s
`
`data from before the filing of the oldest challenged patent, the ‘172 Patent, are not
`
`accessible because PO only became publically traded in 1998. (Ex. 1043 at 4) The
`
`requests are readily understandable, as they track the language selected by PO in its
`
`public SEC reports, and are not burdensome because PO maintains this data as a
`
`public company. The requests seek creation of an Excel document, with some
`
`narrative explanation about what sorts of expenses are carried in each reporting item.
`
`- 5 -
`
`
`WA 14042803.1
`
`
`
`Case No. IPR2019-00500
`Patent No. 9,737,154
`Date: December 19, 2019
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Respectfully Submitted,
`SPENCER FANE LLP
`By /s/Kyle L. Elliott .
`Kyle L. Elliott, Reg. No. 39,485
`kelliott@spencerfane.com
`Kevin S. Tuttle, Reg. No. 52,307
`Brian T. Bear (pro hac vice)
`Spencer Fane LLP
`1000 Walnut Street, Suite 1400
`Kansas City, Missouri 64106-2140
`Telephone: (816) 474-8100
`kelliott@spencerfane.com
`ktuttle@spencerfane.com
`bbear@spencerfane.com
`
`Jaspal S. Hare, Reg. No. 66,988
`jhare@spencerfane.com
`Spencer Fane LLP
`5700 Granite Pkwy, Suite 650
`Plano, TX 75024
`
`- 6 -
`
`
`WA 14042803.1
`
`
`
`Case No. IPR2019-00500
`Patent No. 9,737,154
`
`CERTIFICATE OF SERVICE
`Pursuant to 37 C.F.R. § 42.6(e), the undersigned hereby certifies that a copy
`
`of the foregoing PETITIONER’S MOTION FOR ADDITIONAL DISCOVERY is
`
`served in its entirety on December 19, 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
`Andew Hansen (pro hac vice)
`ahansen@foxrothschild.com
`Archana Nath (pro hac vice)
`anath@foxrothschild.com
`Elizabeth A. Patton (pro hac vice)
`epatton@foxrothschild.com
`FOX ROTHSCHILD LLP
`222 South Ninth Street, Suite 2000
`Minneapolis, MN 55402
`Kecia J. Reynolds
`kecia.reynolds@pillsburylaw.com
`PILLSBURY WINTHORP SHAW PITTMAN LLP
`1200 Seventeenth Street, NW
`Washington, DC 20036
`
`- 7 -
`
`
`
`
`
`Case No. IPR2019-00500
`Patent No. 9,737,154
`Date: December 19, 2019
`
`
`
`
`
`
` /s/Kyle L. Elliott .
`Kyle L. Elliott (Reg. No. 39,485)
`.
`Attorney for Petitioner
`American National Manufacturing, Inc.
`
`- 8 -
`
`
`WA 14042803.1
`
`
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
