Case No. IPR2019-00514
`Patent No. 5,904,172
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`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. IPR2019-00514
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`Patent No. 5,904,172
`____________
`
`
`
`
`PETITIONER’S OPPOSITION TO PATENT OWNER’S
`MOTION TO EXCLUDE (PAPER 82)
`
`
`
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`WA 14736552.5
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`Patent No. 5,904,172
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`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. IPR2019-00514
`
`Patent No. 5,904,172
`____________
`
`
`
`
`PETITIONER’S OPPOSITION TO PATENT OWNER’S
`MOTION TO EXCLUDE (PAPER 82)
`
`
`
`
`WA 14736552.5
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`Case No. IPR2019-00514
`Patent No. 5,904,172
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`TABLE OF CONTENTS
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`I.
`
`INTRODUCTION ......................................................................................... 1
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`II. LEGAL STANDARD .................................................................................... 1
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`III. ARGUMENT ............................................................................................. 1
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`A. Dr. Giachetti’s testimony should not be excluded ...................................... 1
`
`B. Supporting exhibits re ANM’s opposition to PO motion for additional
`discovery should not be excluded ....................................................................... 2
`
`1. Exs. 1041–42 and 1047 are not inadmissible hearsay ............................. 2
`
`2. Exs. 1041–47 and 1052 are also admissible ............................................ 3
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`C. Miscellaneous arguments should be disregarded ........................................ 3
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`1. The Declaration of Mr. Craig Miller should not be excluded .................. 3
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`2. The Declaration of Dr. Lynde should not be excluded ............................ 7
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`3.
`
`ITC Order ............................................................................................... 9
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`4. Deposition Transcripts ........................................................................... 9
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`IV.
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`CONCLUSION .........................................................................................10
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`TABLE OF AUTHORITIES
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` Page(s)
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`Federal Cases
`
`In the Matter of CERTAIN AIR MATTRESS SYSTEMS,
`COMPONENTS THEREOF, AND MEHTODS OF USING THE
`SAME,
`No. 337-TA-971, 2020 WL 416443 (U.S.I.T.C. Jan. 22, 2020) .......................... 2
`
`Donlin v. Phillips Lighting N. Am. Corp.,
`581 F.3d 73 (3rd Cir. 2009) ............................................................................... 5
`
`Intelligent Bio-Systems, Inc. v. Illumia Cambridge Ltd.,
`821 F.3d 1359 (Fed. Cir. 2016) .......................................................................... 7
`
`LifeWise Master Funding v. Telebank,
`374 F.3d 917 (10th Cir. 2004) ............................................................................ 6
`
`Sanofi-Aventis U.S. LLC v. Immunex Corp.,
`No. IPR2017-01884, Paper 96 (PTAB Feb. 14, 2019) ....................................... 1
`
`Ward v. Dixie Nat. Life Ins. Co.,
`595 F.3d 164 (4th Cir. 2010) .............................................................................. 8
`
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`Case No. IPR2019-00514
`Patent No. 5,904,172
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`I.
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`INTRODUCTION
`
`Petitioner American National Manufacturing, Inc. (“ANM” or “Petitioner”)
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`files this Opposition in response Patent Owner Sleep Number Corp.’s (f/k/a Select
`
`Comfort Corp.) (“PO” or “Sleep Number”) Motion to Exclude (Paper 82) (the
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`“MTE”).
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`PO’s motion should be denied.
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`II. LEGAL STANDARD
`
`“The party moving to exclude evidence bears the burden of proving that it is
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`entitled to the relief requested—namely, that the material sought to be excluded is
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`inadmissible under the Federal Rules of Evidence (“FRE”).” Sanofi-Aventis U.S.
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`LLC v. Immunex Corp., No. IPR2017-01884, Paper 96 (PTAB Feb. 14, 2019) (citing
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`37 C.F.R. §§ 42.20(c) and 42.62(a)).
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`III. ARGUMENT
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`A. Dr. Giachetti’s testimony should not be excluded
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`A motion to exclude must “[i]dentify where in the record the evidence sought
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`to be excluded was relied upon.” Practice Guide, § II.K(b). PO’s argument in this
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`section fail to make a proper case for exclusion given PO fails to identify where
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`ANM is relying on the objected-to evidence. In addition, the objected-to portions of
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`Dr. Giachetti’s declaration provide helpful background and context and are thus
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`admissible.
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`Patent No. 5,904,172
`B.
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`Supporting exhibits re ANM’s opposition to PO motion for
`additional discovery should not be excluded
`
`1.
`
`Exs. 1041–42 and 1047 are not inadmissible hearsay
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`Exs. 1041–42 are screenshots from Dun & Bradstreet related to corporate
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`financial information. These exhibits fall squarely within the ambit of FRE 803(17)
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`hearsay exception for market reports and commercial publications.
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`With respect to Ex. 1046, it is a brief regarding vacatur related to an
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`International Trade Commission. Given that PO has been trumpeting that ITC case
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`here (e.g., Ex. 2015 and 2016 (ITC papers)), it is relevant that the ITC vacated its
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`positions related to the ’172 patent at issue here. See Ex. 1079 (In the Matter of
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`CERTAIN AIR MATTRESS SYSTEMS, COMPONENTS THEREOF, AND
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`MEHTODS OF USING THE SAME, No. 337-TA-971, 2020 WL 416443 (U.S.I.T.C.
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`Jan. 22, 2020)).
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`With respect to Ex. 1047, PO objects to ¶¶ 3–4 and 8–9 of Mr. Miller’s
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`declaration without elaborating why these statements are believed to be inadmissible
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`hearsay. A review those paragraphs reveal the testimony generally relates to PO
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`itself. This testimony is not inadmissible hearsay because any underlying statements
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`are used against a party opponent (see FRE 801(d)(2)) or an exception applies (see
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`FRE 804(b)(3) or 807). Other testimony (Ex. 1047, ¶ 9) is not hearsay because Mr.
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`Miller is providing factual information (e.g., how much he was paid) of which he
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`had personal knowledge.
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`2.
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`Exs. 1041–47 and 1052 are also admissible
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`To PO’s “first” point, Exs. 1041–42 (publicly available reports) were
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`authenticated by a supplemental declaration of Mr. Elliott. See Ex. 1080, ¶¶ 3-4.
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`Ex. 1049 was duly authenticated by Mr. Miller as a business record. See 1047, ¶ 4.
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`To PO’s “second” point, the MTE neither describes how Exs. 1047 and 1052 were
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`relied on nor why these exhibits should be excluded. Thus, PO fails to carry its
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`burden to show why these exhibits should be excluded. See Practice Guide, § II.K.
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`Similarly, to PO’s “third” point, the MTE neither describes how Exs. 1043–46 and
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`1052 were relied on nor why these exhibits should be excluded. Thus, PO fails to
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`carry its burden to show why these exhibits should be excluded. See Practice Guide,
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`§ II.K.
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`To PO’s “lastly” point, PO fails to make a legal argument (as opposed to PO
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`dissatisfaction with the evidence) why these exhibits 1043, 1045, 1046, and 1047
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`should be excluded.
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`PO simply has not carried its burden to exclude any of these exhibits.
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`C. Miscellaneous arguments should be disregarded
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`1.
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`The Declaration of Mr. Craig Miller should not be excluded
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`PO tried to establish commercial success based on ANM’s sales. PO relied
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`on an expert, Carl Degen, whose opinion was unreliable because he did not properly
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`examine causation. Mr. Degen admitted the deficiency in his analysis (ANM MTE
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`at 10). ANM duly moved to exclude Mr. Degen’s declaration. See Paper [ANM
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`MTE] at 6. ANM’s motion was supported by declarations from ANM’s President,
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`Mr. Craig Miller, and an independent expert, Dr. Matthew Lynde. PO’s attempt to
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`exclude portions of these declarations here is flawed.
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`PO challenges portions of Mr. Miller’s declaration on the basis of personal
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`knowledge. See MTE at 9-10. Mr. Miller stated his personal knowledge of the facts
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`in his declaration. (Ex. 1072, ¶ 1). Mr. Miller’s personal knowledge hardly seems
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`controversial, since he is the President of ANM and also a manager of Dires, LLC.
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`Further, PO knows Mr. Miller personally as PO previously hired Mr. Miller as a
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`consultant to give research and development advice and to work with PO’s top
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`executives. (See Ex. 1048). Notwithstanding these circumstances, Mr. Miller
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`provided more details of his personal knowledge through a supplemental
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`declaration. (Ex. 1079). Below are PO’s challenges and Mr. Miller’s basis for his
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`personal knowledge:
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`PO withdrew from the market a brand which it owned and
`which competed with Petitioner’s air beds. This resulted
`in an increase in ANM sales. PO challenges Mr. Miller’s
`personal knowledge of these facts. MTE at 9. PO publicly
`announced its withdrawal from the market. Mr. Miller
`confirmed the coincident increase in ANM sales by
`studying official company records and by setting up the
`new customer accounts. (Ex. 1079, ¶ 16).
`
`PO told Google that it held a trademark rights in “number
`bed” and, based on PO’s complaints, Google suspended
`hundreds of ads that used the term “number bed” and were
`placed by ANM’s sales affiliate, Dires, Inc. In fact, PO
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`held no trademark rights in “number bed.”. PO challenges
`Mr. Miller’s knowledge of these facts. Mr. Miller stated
`that most of facts were admitted by PO’s high-level
`employees testifying at a trademark trial that he attended.
`(Ex. 1079, ¶ 9). Mr. Miller has personal knowledge of the
`facts regarding suspension by his study of Dires, LLC
`business records (Id.).
`
`ANM purchased source code (a component embedded
`within an air controller) from a supplier. For a time, the
`supplier identified the source code only by a numeric
`range, “1.5-1.8”. PO says Mr. Miller claims to, but does
`not have, knowledge of when a particular version was
`used. In fact, Miller said exactly the opposite. (Ex. 1079,
`¶ 7). Mr. Miller, who does not read source code, does not
`know when any particular version was used by the
`supplier. (Id.).
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`Issues with Mr. Degen’s analysis include an under-count
`and a separate over-count of controllers; failing to
`consider that ANM was just starting its business in 2012
`and had a plan for growth; that ANM had supply problems
`in connection with controllers; that the suspension by
`Google ads affected Dires, LLC on-line sales; and that
`ANM sales increased when it published a YouTube video
`comparing its product with PO’s. PO challenges Mr.
`Miller’s personal knowledge on each of these facts. MTE
`at 10. Mr. Miller knows these facts because he examined
`each of them and he explains the basis for his knowledge,
`in detail, in his supplemental declaration. (Ex. 1079, ¶¶ 5,
`6, 8, 12, 15).
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`PO argues that Mr. Miller may not give opinion evidence regarding his own
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`business. MTE at 10–11. That is not the law. FRE 701 allows lay opinion testimony
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`that is “rationally based on the witness’s perception.” The Advisory Committee
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`notes say that the Rule allows opinion testimony by business owners due to the
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`particular knowledge they develop. Federal cases are in accord. See, e.g., Donlin v.
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`Phillips Lighting N. Am. Corp., 581 F.3d 73, 81-82 (3rd Cir. 2009); LifeWise Master
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`Funding v. Telebank, 374 F.3d 917, 929-30 (10th Cir. 2004).
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`Mr. Miller is the business owner and has 22 years of experience in the
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`industry. Ex. 1072, ¶ 1; 1079 ¶¶ 1 and 18. Mr. Miller attests that he is fully involved
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`in “virtually all activities, including the activities of sales, marketing, finance,
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`production, purchasing and recordkeeping. Ex. 1079 ¶ 1. Mr. Miller’s experience
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`in these business functions are the basis for his opinions which are rationally based
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`on his perceptions and are admissible.
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`In particular, PO argues that Mr. Miller may not state his opinion that
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`advertising contributes to Petitioner’s sales; that Petitioner had a plan for business
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`growth; and that a certain supplier to Petitioner was more reliable than its
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`predecessor. (MTE, p. 10). These all are the topics in which a business owner has
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`knowledge. PO’s argument disregards Rule 701 and normal practice in courts where
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`corporate representatives testify as corporate matters.
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`Finally, PO incorrectly characterizes as “opinion” what is merely Mr. Miller’s
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`observation that Mr. Degen omitted certain facts from his declaration. See MTE at
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`10. For each observation of Mr. Degen’s omissions, Mr. Miller provided facts
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`within his personal knowledge. Ex. 1079, ¶¶ 1–8 and 15–16.
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`PO makes hearsay objections to parts of Mr. Miller’s testimony and two
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`exhibits he sponsors (see MTE at 10), but those objections are misplaced as
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`explained:
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`Mr. Miller recounts PO’s admissions at the trademark trial
`regarding its false accusation of trademark violations by
`Dires. (Ex. 1079 ¶ 9, 12). None of these statements are
`hearsay. F.R.E. 801(d)(2). Mr. Miller refers to a decision
`by the International Trade Commission. (Ex. 1072, ¶ 10).
`Public documents are not hearsay, F.R.E. 803(8), and PO
`makes no allegation that the record is not genuine. Mr.
`Miller also recounts PO’s public statement that it was
`removing its competing product from the market. (Ex.
`1079, ¶ 16). PO does not deny the accuracy of its public
`statement.
`
`PO objects to a summary of notices from Google ads. (Ex.
`1060/1075). This pertains to the issue of PO’s false claim
`of trademark violations. The summary is offered only to
`show notice to Petitioner that the ads were disallowed. It
`is not offered for the truth because there was no trademark
`violation. Finally, PO objects to a summary of Dires
`advertising expenses. (Ex. 1059/1074). Petitioner
`supplied the original records from which the summary was
`made. (Ex. 1079, ¶ 18). PO’s complaint is moot.
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`2.
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`The Declaration of Dr. Lynde should not be excluded
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`PO argues the bizarre proposition that a rebuttal witness cannot present
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`evidence of errors and omissions in an opponent’s statement of alleged facts. PO
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`cites Intelligent Bio-Systems, Inc. v. Illumia Cambridge Ltd., 821 F.3d 1359, 1369-
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`70 (Fed. Cir. 2016). That case does not support PO’s legal proposition. Rather, it
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`pertained to a petitioner who attempted to change its petition after a patent owner’s
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`response. By contrast, Dr. Lynde’s declaration is submitted as rebuttal to the
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`commercial success argument first raised by PO in its response.
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`PO further contends that Dr. Lynde may not rely on hearsay information.
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`F.R.E. 703 and authorities approve an expert’s reliance on hearsay statement by
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`those who are in a position to know the facts. See, e.g., Ward v. Dixie Nat. Life Ins.
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`Co., 595 F.3d 164, 181-82 (4th Cir. 2010); United States v. Lundy, 809 F.2d 392,
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`395-96 (7th Cir. 1987.
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`Dr. Lynde relied on information he received from Mr. Miller regarding ANM
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`invoices, sales, advertising and product supply. Mr. Miller certainly is in the
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`position to know these things because he personally reviewed the invoices, the sales
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`records, and the advertising records and because he is fully engaged in ANM’s
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`purchasing operations. See Ex. 1079, ¶¶ 1, 5, 15, and 18. Mr. Miller is a person in
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`the position to know the facts. Of particular note is that PO deposed Mr. Miller at
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`length about all these topics. See, generally, Ex. 2097 at 31:10-34:8, 39:14-40:8,
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`52:12-19, and 66:23-68:5. PO does not challenge Mr. Miller’s veracity.
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`Finally, PO mischaracterizes parts of Dr. Lynde’s deposition testimony. MTE
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`at 14. Contrary to PO’s statement, Dr. Lynde testified that he received information
`
`regarding supply problems from Mr. Miller. See Ex. 2098 at 29:10-17. Mr. Miller
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`also testified about the supply problems. Ex. 2097 at 52:12-16. Also contrary to
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`PO’s statement, Dr. Lynde’s analysis demonstrated the correlation between
`
`advertising spending and ANM’s unit sales. Ex. 1071, FIG. 3 and ¶ 46. Finally,
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`contrary to PO’s statement, Dr. Lynde explained that in economics, variations above
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`Case No. IPR2019-00514
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`or below a growth trend line are not meaningful; it is the growth trend line that is
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`important for measurement of statistical significance. See Ex. 1056/1071, ¶ 40-42;
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`Ex. 2098 at 103:1-7, 104:19-105:1, and 104:2-11).
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`3.
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`ITC Order
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`As discussed above, PO has been trumpeting the ITC case here (see, e.g., Exs.
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`2015 and 2016 (ITC papers)). Thus, it is relevant that the ITC vacated its positions
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`related to the ’172 patent at issue here. Ex. 1079.
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`4.
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`Deposition Transcripts
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`Turning to PO’s first argument, Giachetti’s testimony is generally for
`
`purposes of rebuttal. It was subject to cross-examination by PO and thus there are
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`no fairness concerns. At most, PO’s objections go to weight and do not justify
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`exclusion.
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`Turning to PO’s argument, PO desires to exclude testimony of its own
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`witness, Mr. Mahoney. The fact that PO hired Mr. Mahoney particularly because
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`his experience with medical devices involving pneumatics (i.e., ventilators) that
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`involved analogous problems to those in the air-mattress field, reflects on PO’s
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`credibility with respect to its argument related to the scope of the technical field.
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`Turning to PO’s third argument, Dr. Messner’s testimony (PO’s lead expert
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`in IPR2019-00497 and -500) is relevant to the credibility of various positions that
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`PO has taken here.
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`IV. CONCLUSION
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`For the foregoing reasons, the MTE should be denied.
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`Case No. IPR2019-00514
`Patent No. 5,904,172
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`Date: May 6, 2020
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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
`Brian T. Bear (pro hac vice)
`Mark A. Thornhill (pending pro hac vice)
`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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`Counsel for Petitioner American National
`Manufacturing, Inc.
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`CERTIFICATE OF SERVICE
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`Pursuant to 37 C.F.R. § 42.6(e), the undersigned hereby certifies that a copy
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`of the foregoing PETITIONER’S OPPOSITION TO PATENT OWNER’S
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`MOTION TO EXCLUDE (PAPER 82) is served in its entirety on May 6, 2020, by
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`electronic mail, as authorized by Patent Owner’s Updated Mandatory Notices,
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`directed to the attorneys of record for Patent Owner at the following correspondence
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`address of record:
`
`Steven A. Moore
`stevemoore@zhonglun.com
`ZHONG LUN
`4322 Wilshire Boulevard, Suite 200
`Los Angeles, CA 90010
`
` Kecia J. Reynolds
`kecia.reynolds@pillsburylaw.com
`PILLSBURY WINTHORP SHAW
`PITTMAN LLP
`1200 Seventeenth Street, NW
`Washington, DC 20036
`
`Luke Toft
`ltoft@foxrothschild.com
`
`
`
`
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`Andrew 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
`
`
`Date: May 6, 2020
`
`
`
`
` /s/Kyle L. Elliott .
`Kyle L. Elliott (Reg. No. 39,485)
`.
`Attorney for Petitioner
`American National Manufacturing, Inc.
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