Trials@uspto.gov
`Tel: 571-272-7822
`
`
`Paper 67
`Entered: January 6, 2020
`
`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.
`____________
`
`IPR2019-00497 (Patent 8,769,747 B2)
`IPR2019-00500 (Patent 9,737,154 B2)
`IPR2019-00514 (Patent 5,904,172)1
`____________
`
`Before SCOTT A. DANIELS, FRANCES L. IPPOLITO, and
`ALYSSA A. FINAMORE, Administrative Patent Judges.
`
`DANIELS, Administrative Patent Judge.
`
`
`ORDER
`Denying Patent Owner’s Second Motion for Additional Discovery
`37 C.F.R. §§ 42.24, 42.51(b)(2)
`
`
`
`
`Following a conference call with the parties on October 16, 2019, and
`by an Order of October 17, 2019, we authorized Patent Owner to file a
`Motion for Additional Discovery (“Motion,” or “Mot.”) and Petitioner to file
`
`1 We issue one Order and enter it in each proceeding.
`
`1
`
`
`
`Tel: 571-272-7822
`
`
`Paper 67
`Entered: January 6, 2020
`
`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.
`____________
`
`IPR2019-00497 (Patent 8,769,747 B2)
`IPR2019-00500 (Patent 9,737,154 B2)
`IPR2019-00514 (Patent 5,904,172)1
`____________
`
`Before SCOTT A. DANIELS, FRANCES L. IPPOLITO, and
`ALYSSA A. FINAMORE, Administrative Patent Judges.
`
`DANIELS, Administrative Patent Judge.
`
`
`ORDER
`Denying Patent Owner’s Second Motion for Additional Discovery
`37 C.F.R. §§ 42.24, 42.51(b)(2)
`
`
`
`
`Following a conference call with the parties on October 16, 2019, and
`by an Order of October 17, 2019, we authorized Patent Owner to file a
`Motion for Additional Discovery (“Motion,” or “Mot.”) and Petitioner to file
`
`1 We issue one Order and enter it in each proceeding.
`
`1
`
`
`
`
`IPR2019-00497 (Patent 8,769,747 B2)
`IPR2019-00500 (Patent 9,737,154 B2)
`IPR2019-00514 (Patent 5,904,172)
`an Opposition (“Opposition,” or “Opp.”) to the Motion in each of the
`above-captioned proceedings. Paper 41. Where necessary, and for purposes
`of brevity we refer in this Order only to documents filed in IPR2019-00497.
`Patent Owner seeks additional discovery pertaining to its assertion of
`nexus and copying. Mot. 1–3. With its Motion (Paper 47), and proposed
`Discovery Requests (Exhibit 2074, “Requests”) Patent Owner requests
`specifically that the Board require Petitioner to produce or grant access to
`(1) five versions of its source code that were produced in the District Court,
`and (2) three exhibits to Patent Owner’s infringement contentions against
`Petitioner. Mot. 1; Ex. 2074. Patent Owner filed an Opposition (Paper 49)
`to the Motion and Requests. Opp. 1.
`After considering the arguments, evidence, and facts of the case
`before us, we determine that it is not in the interests of justice to grant Patent
`Owner’s Motion. For the reasons stated below, Patent Owner’s motion is
`denied.
`A. Background
`Patent Owner’s Motion is a second request for additional discovery,
`as it follows a previous motion for additional discovery and opposition
`(Papers 18, 23), which we granted in-part in an Order (Paper 34, “First
`Add’l Disc. Order”). Patent Owner now requests to use certain information
`in these IPR proceedings already obtained in the underlying District Court
`proceeding, specifically, five versions of Petitioner’s source code (“accused
`source code”), apparently utilized in allegedly infringing products. Mot. 1–
`2. Patent Owner contends that the accused source code is relevant to
`secondary considerations, particularly, nexus and copying. Id. at 2–3.
`Patent Owner acknowledges that despite obtaining a modification of the
`
`
`
`2
`
`
`
`IPR2019-00497 (Patent 8,769,747 B2)
`IPR2019-00500 (Patent 9,737,154 B2)
`IPR2019-00514 (Patent 5,904,172)
`District Court’s Protective Order, (“Protective Order”), the accused source
`code remains subject to redaction and confidentiality in the underlying
`district court litigation and therefore the accused source code itself, cannot
`currently be used in these IPR proceedings. Id. at 1; Ex. 3004.
`Patent Owner obtained the modified Protective Order allowing Patent
`Owner to use certain confidential documents and information from the
`District Court proceeding in these IPR proceedings, except for third-party
`source code. See Ex. 3004, 9 (“[A]ny documents used in IPR must have
`private source code information from third parties redacted.”). Petitioner
`asserts that all the accused source code is third-party source code. Opp. 1–2.
`Thus, according to Patent Owner, such assertions unreasonably block Patent
`Owner from using any of the accused source code from the District Court in
`these proceedings. Mot. 1–2.
`Petitioner opposes the Motion and Requests for a variety of reasons,
`including that the Requests are irrelevant with respect to secondary
`considerations because Patent Owner may, but has strategically chosen not
`to, rely on its own information to show commercial success. Opp. 1. Also,
`Petitioner contends that Patent Owner is simply relying on its unproven
`allegations of infringement to assert copying, and that disclosing and using
`the accused source code in these proceedings would violate the rights of
`third-party source code owners and the District Court’s Protective Order. Id.
`B. Patent Owner’s Requests
`Because it cannot use the accused source code from the District Court
`proceeding in these IPR proceedings, Patent Owner proposes one
`Interrogatory and one corresponding Request for Production, which we
`reproduce below.
`
`
`
`3
`
`
`
`IPR2019-00497 (Patent 8,769,747 B2)
`IPR2019-00500 (Patent 9,737,154 B2)
`IPR2019-00514 (Patent 5,904,172)
`Interrogatory No. 1: Please affirmatively provide notice that
`Sleep Number may Access and Use the Accused Source Code in
`this IPR Proceeding.
`Request No. 1: Please produce, or in the alternative provide
`Access and Use of, the following: (1) the Accused Source Code
`contained within bates numbered pages ANMISC_0001-0031,
`ANMISC_0038-0111, and ANMISC_0121-0437 and (2) Sleep
`Number’s Infringement Contentions Against ANM.
`Ex. 2074.
`C. Analysis
`We address the Interrogatory and corresponding Request for
`Production along with the parties’ arguments below.
`Patent Owner’s Arguments
`1.
`Patent Owner addresses the Garmin factors2 with respect to its
`Requests. Mot. 3–5. Patent Owner argues that something useful will be
`uncovered because the accused source code is known to exist and has been
`inspected by Patent Owner already in the District Court case. Id. at 4. And,
`according to Patent Owner, in these proceedings “the Source Code will be
`instructive to the Board in analyzing secondary considerations.” Id. at 3.
`Patent Owner has also apparently incorporated certain of the accused source
`code with its infringement contentions at the District Court, and wishes to
`use the infringement contentions, including the accused source code, and
`
`
`2 Garmin Int’l Inc. v. Cuozzo Speed Techs. LLC, IPR2012-00001, slip op. at
`6–7 (PTAB Mar. 5, 2013) (Paper 26) (precedential). The Garmin factors
`are: (1) more than a possibility and mere allegation that something useful
`will be discovered; (2) requests that do not seek other party’s litigation
`positions and the underlying basis for those positions; (3) ability to generate
`equivalent information by other means; (4) easily understandable
`instructions; and (5) requests that are not overly burdensome to answer. Id.
`4
`
`
`
`
`
`IPR2019-00497 (Patent 8,769,747 B2)
`IPR2019-00500 (Patent 9,737,154 B2)
`IPR2019-00514 (Patent 5,904,172)
`related exhibits to show nexus and copying as they relate to secondary
`considerations in these IPR proceedings. Id. at 4. Patent Owner argues that
`using the infringement contentions and exhibits for purposes of secondary
`considerations in these IPRs, is not seeking Petitioner’s litigation positions.
`Id. Patent Owner also argues that it cannot generate equivalent discovery
`because of the Protective Order, and that the accused source code is not
`publically available. Id. at 5. Also, Patent Owner contends that requesting
`authorization to seek a subpoena from the Board is not reasonable where the
`information is known to exist, has been disclosed already in the District
`Court, and is in possession of both parties. Id. Patent Owner argues that the
`Requests are easily understandable and not overly burdensome as they are
`already in the possession of both parties. Id.
`Petitioner’s Arguments
`2.
`Petitioner argues that it does not own the accused source code and that
`Patent Owner’s Requests violate the rights of third-party owners of the
`accused source code and disregards the District Court’s Protective Order.
`Opp. 1–2. Petitioner argues that despite knowing that the accused source
`code was owned by third parties it was Patent Owner “who offered to redact
`third-party source code to mollify concerns about third-party rights in
`connection with its efforts to modify the District Court’s protective order.”
`Id. at 2. Petitioner argues that producing the accused source code in these
`IPR proceedings, effectively making an end run around the District Court’s
`Protective Order, “does not just fail to serve the ‘interests of justice,’ it
`actively undermines this standard as set forth in 37 CFR § 42.51(b)(2)(i).”
`Id. Petitioner asserts that the appropriate course of action was for Patent
`Owner to seek the Board’s authorization to request a subpoena for the
`
`
`
`5
`
`
`
`IPR2019-00497 (Patent 8,769,747 B2)
`IPR2019-00500 (Patent 9,737,154 B2)
`IPR2019-00514 (Patent 5,904,172)
`ownership entities to produce any third-party source code in these IPR
`proceedings. Id. at 3. Petitioner argues that Patent Owner’s request and
`assertion that requesting authorization for subpoena’s for third party source
`code owners is unreasonable, is simply a result of Patent Owner’s inaction
`and making. Id. Petitioner makes several other arguments including that
`Patent Owner has other means available to show commercial success such as
`its own financial and market share data, and that Patent Owner has not
`provided its own source code so as to compare with the accused source code,
`and thus cannot show copying.
`The Garmin Factors
`3.
`We consider Patent Owner’s Interrogatory together along with its
`Request for Production as they relate to production of the accused source
`code in these proceedings.
`Garmin Factor 1 – Useful Information
`As an initial matter it has not been made clear by Patent Owner,
`regardless of who is the owner, why the accused source code would itself, as
`lines of un-compiled code, be useful for purposes of secondary
`considerations. “Useful” means favorable in substantive value to a
`contention of the party moving for discovery. A good cause showing
`requires the moving party to provide a specific factual reason for expecting
`reasonably that the discovery will be “useful.” Patent Owner’s Motion has
`not adequately explained with any degree of specificity why, or how, it
`intends to use the accused source code to show nexus and copying. Patent
`Owner’s Motion merely states that its “request is based on code inspected in
`the District Court Case, which PO incorporated into its Infringement
`Contentions and which show copying and nexus.” Mot. 4. Indeed, with
`
`
`
`6
`
`
`
`IPR2019-00497 (Patent 8,769,747 B2)
`IPR2019-00500 (Patent 9,737,154 B2)
`IPR2019-00514 (Patent 5,904,172)
`regard to its utility, without specific expert testimony the accused source
`code itself, as high-level assembly language, would be incomprehensible to
`anyone except a skilled programmer or software developer. PO has not
`explained how the source code could be useful at this stage of the
`proceeding. For example, PO has not explained how it will have time to
`have an expert translate the source code so that PO can present it in some
`useful way. Patent Owner has also not explained with any particularity why
`producing the actual accused source code in these proceedings would be
`useful to the Board in the consideration of either nexus or copying.
`To be clear, the modified Protective Order allows use of certain
`documents, evidence, and analysis from the District Court with the caveat
`that the accused source code itself be redacted. Id. Patent Owner could
`have explained in its Motion to the Board why and how those documents
`and information, from a standpoint of usefulness to the Board, needed to
`have the actual source code disclosed in addition to the other information.
`Patent Owner has not done so. Accordingly, we are not persuaded that
`producing the actual accused source code, in addition to related evidence
`that can now be brought to bear in these proceedings based on the modified
`Protective Order, will provide useful information.
`Garmin Factor 2 – Litigation Positions
`We do not determine Patent Owner to be overtly seeking any
`admission of infringement or any specific litigation position, despite the fact
`that Petitioner has not had to serve its non-infringement responses in the
`District Court due to the stay of that proceeding. Opp. 5. Patent Owner has
`a right to try and obtain relevant information from Petitioner and the District
`
`
`
`7
`
`
`
`IPR2019-00497 (Patent 8,769,747 B2)
`IPR2019-00500 (Patent 9,737,154 B2)
`IPR2019-00514 (Patent 5,904,172)
`Court to support its assertions of secondary considerations even though such
`information may also be part of an eventual non-infringement defense.
`We also appreciate that Patent Owner could, but strategically is not,
`relying on its own products to show nexus, or apparently, its own source
`code in comparison to the accused source code to show copying. Patent
`Owner’s reliance on, and use of Petitioner’s technical, financial, and sales
`data to show nexus and copying in many ways presupposes that Petitioner’s
`products are infringing. Patent Owner has not explained sufficiently how it
`intends to use the accused source code, and thus the Requests could lead to a
`trial within a trial on infringement which would result in the parties’ arguing
`their respective infringement contentions in these IPR proceedings.
`Garmin Factor 3 – Equivalent Information
`Turning to the third Garmin factor, we agree with Petitioner, as we
`did in our earlier Order, that Patent Owner is fully capable, although
`apparently not willing, to use and provide its own information for purposes
`of secondary considerations in the form of Patent Owner’s market, sales, and
`financial information based on its own data from its products, vendors, and
`retailers to determine nexus and market share in relation to commercial
`success. Opp. 3. With respect to copying as one aspect of secondary
`considerations, it is not persuasive for Patent Owner to argue for producing
`only the accused source code without also producing and comparing to
`Patent Owner’s own source code, or at the very least explaining how it
`intends to show copying using an expert and without comparison to its own
`source code. Mot. 4–5.
`To the specific point of obtaining the source code and copying, Patent
`Owner acknowledges it could have obtained the source code through
`
`
`
`8
`
`
`
`IPR2019-00497 (Patent 8,769,747 B2)
`IPR2019-00500 (Patent 9,737,154 B2)
`IPR2019-00514 (Patent 5,904,172)
`discovery in these IPR’s, i.e., via subpoenas, and yet did not. Mot. 4.
`Indeed, Patent Owner understood that the District Court did not authorize
`the use of the source code and chose to rely instead on its request that the
`Board order the source code be turned over. This is in contradistinction to
`both the District Court Order and the rights of third parties. We are
`persuaded that Patent Owner understood the confidential nature of the third
`party source code and could have timely sought subpoenas in these IPR
`proceedings to potentially show copying and did not. These facts weigh in
`favor of the source code being long-before known and in the hands of Patent
`Owner, who could have, but did not, seek an appropriate course of action to
`discover and use that information in these proceedings.
`Garmin Factor 4 – Instructions
`The instructions in the Requests are clear and unambiguous, but in
`this case, clarity is significantly outweighed by the other factors discussed
`above, and below, which pertain specifically to the substance and context of
`the Requests.
`
`Garmin Factor 5 – Burden
`On the face of the Requests, the effort to produce the accused source
`code may appear fairly low. See Mot. 5. The accused source code, as Patent
`Owner points out, has already been made available to Patent Owner in the
`District Court, and arguably could be done again in these proceedings. Id.
`However, with respect to burden, the over-riding issue here is that although
`both parties may possess it, they do not own the accused source code, third
`parties do. Requests must not be overly burdensome to answer, given the
`expedited nature of an inter partes review. The burden includes financial
`burden, burden on human resources, and burden on meeting the time
`
`
`
`9
`
`
`
`IPR2019-00497 (Patent 8,769,747 B2)
`IPR2019-00500 (Patent 9,737,154 B2)
`IPR2019-00514 (Patent 5,904,172)
`schedule of the trial. Requests should be sensible and responsibly tailored
`according to a genuine need. Patent Owner has not shown any evidence that
`Petitioner has a contractual right or ability to use or produce the accused
`source code in a lawsuit or IPR proceeding without permission from the
`owners. Patent Owner’s argument, therefore, does not account for the
`burden on, and more importantly the rights with respect to third-parties who
`own the accused source code and are not parties to these proceedings or the
`underlying district court litigation.
`From a timing perspective, Patent Owner understood early in these
`proceedings that it desired specific information from Petitioner with respect
`to secondary considerations, and even came to the Board to request
`additional discovery which, as discussed above, in view of Petitioner’s
`opposition, we granted-in-part. Papers 18, 23, 34. Patent Owner’s first
`request for additional discovery did not seek the accused source code itself,
`but mainly information regarding Petitioner’s products that used the accused
`source code. Paper 18. Because the request was not made, our earlier
`Order, of course, did not authorize, condone or even address disclosure of
`the accused source code itself, although we made clear on this issue that
`“[t]here must also be a way to identify whether [Petitioner’s] product
`contains the allegedly infringing source code, or not.” First Add’l Disc.
`Order 13. In its request to modify the District Court’s Protective Order, it
`further appears Patent Owner also did not ask, or at least convince, the
`District Court to allow use of the accused source code outside the District
`Court proceeding. See Ex. 3004, 7 (“It appears [Patent Owner] does not
`intend to produce any source code directly to PTAB . . . But [Patent Owner]
`states that to the extent any documents reference information produced by a
`
`
`
`10
`
`
`
`IPR2019-00497 (Patent 8,769,747 B2)
`IPR2019-00500 (Patent 9,737,154 B2)
`IPR2019-00514 (Patent 5,904,172)
`third-party, it can address these privacy interests with appropriate
`redactions.”). Then, in mid-October, just a week before its Patent Owner
`Response is due, Patent Owner circled back to the Board in this quest for the
`actual accused source code. Papers 47, 49.
`Recognizing the late nature of its Requests in the IPR discovery
`period, Patent Owner desires that the Board simply order disclosure of the
`accused source code. Mot. 1. This we will not do. First, to do so would be
`in direct contravention to the District Court’s modified Protective Order.
`Ex. 3004. Even if we have the ability to do so, neither the facts in this case
`as discussed relative to the Garmin factors, nor Patent Owner’s recognition
`late in the game that it might have a reason or need for the accused source
`code, persuades us to find it in the interests of justice to disagree with the
`comprehensive and reasoned decision of the District Court. Second, as
`Patent Owner acknowledges in its Motion, the proper procedure for
`obtaining confidential evidence in these IPR proceedings from third parties
`would have been to ask the Board for authorization to seek a subpoena from
`the District Court for the accused source code. See Mot. 5. The lateness of
`this Request by Patent Owner in this case and burden on meeting the time
`schedule of the trial also do not weigh in favor of Patent Owner for this
`factor.
`D. Conclusion
`On this record we conclude that Patent Owner has not met its burden
`to demonstrate that disclosure of the accused source code is necessary for
`good cause and in the interests of justice. According to Petitioner, the
`accused source code Patent Owner seeks, relates to highly confidential
`technical information of third parties. Opp. 2. The Protective Order was
`
`
`
`11
`
`
`
`IPR2019-00497 (Patent 8,769,747 B2)
`IPR2019-00500 (Patent 9,737,154 B2)
`IPR2019-00514 (Patent 5,904,172)
`entered in the district court litigation, and even after modification, is
`intended to ensure the confidentiality of such materials. See Ex. 3004.
`While Patent Owner argues that Petitioner can produce the materials in these
`proceedings—despite the Protective Order—Patent Owner does not provide
`a sufficient basis for requiring Petitioner to do so. We agree with Petitioner
`that producing the requested information in the manner advocated by Patent
`Owner here, could require violating the Protective Order without good
`cause, and would be unduly burdensome and prejudicial under the
`circumstances. In addition to the prejudice to third-parties, Patent Owner’s
`Requests would broaden the scope of the instant proceedings significantly
`into infringement issues, which are inappropriate in this proceeding, and also
`delay the trial schedule. The discovery could result in a trial within a trial on
`the issue of infringement, with associated evidence, arguments, and
`(potentially) declarants from Patent Owner, and then the same from
`Petitioner in response. This is contrary to the goal of inter partes review to
`be an efficient, streamlined alternative to litigation, completed within one
`year of institution. See 35 U.S.C. § 316 (a)(11). Patent Owner does not
`explain sufficiently why its Requests, with all of its resulting burdens, can or
`should be done with the instant proceedings still completed within that time
`frame.
` For the reasons given, it is
`ORDERED that Patent Owner’s motion for additional discovery is
`denied.
`
`
`
`12
`
`
`
`IPR2019-00497 (Patent 8,769,747 B2)
`IPR2019-00500 (Patent 9,737,154 B2)
`IPR2019-00514 (Patent 5,904,172)
`For PETITIONER:
`
`Kyle L. Elliott
`Kevin S. Tuttle
`Jaspal S. Hare
`SPENCER FANE LLP
`kelliott@spencerfane.com
`ktuttle@spencerfane.com
`jhare@spencerfane.com
`
`For PATENT OWNER:
`
`Steven A. Moore
`Kecia J. Reynolds
`Pillsbury Winthrop Shaw Pittman LLP
`steve.moore@pillsburylaw.com
`kecia.reynolds@pillsburylaw.com
`
`Luke Toft
`Fox Rothschild LLP
`ltoft@foxrothschild.com
`
`
`
`13
`
`
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