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
`____________
`
`PATENT OWNER’S MOTION FOR ADDITIONAL DISCOVERY AND TO
`WAIVE THE WORD COUNT FOR THE PARTIES’ RESPONSE, REPLY, AND
`SUR-REPLY
`
`
`____________
`
`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
`____________
`
`PATENT OWNER’S MOTION FOR ADDITIONAL DISCOVERY AND TO
`WAIVE THE WORD COUNT FOR THE PARTIES’ RESPONSE, REPLY, AND
`SUR-REPLY
`
`
`
`Table of Contents
`
`Introduction ................................................................................................................ 1
`Factual and Procedural Background .......................................................................... 1
`Argument.................................................................................................................... 2
`Secondary Considerations Are Probative to Questions of Patentability. ........ 2
`Discovery is Appropriate as to Secondary Considerations in This Case. ....... 3
`A.
`There is More than a Mere Possibility of Usefulness. .......................... 4
`B.
`Sleep Number Is Not Seeking Litigation Positions. ............................. 7
`C.
`Sleep Number Cannot Generate Equivalent Discovery. ....................... 8
`D.
`The Requested Discovery is Easily Understandable. ............................ 8
`E.
`The Requested Discovery is Not Overly Burdensome. ........................ 9
`Discussion of Secondary Considerations and Other Issues Warrant
`Enlargement of the Word Count for the Response, Reply, and Sur-Reply. .... 9
`Conclusion ...............................................................................................................10
`
`
`
`Introduction
`
`On September 5, 2019, the Board determined that a motion for additional
`
`discovery under 37 C.F.R. § 42.51(b)(2) was warranted and that a motion to waive
`
`(enlarge) the word count under 37 C.F.R. § 42.24(a)(2) was also appropriate.
`
`Accordingly, Patent Owner Sleep Number Corporation f/k/a Select Comfort
`
`Corporation (“Sleep Number”) respectfully moves to require Petitioner American
`
`National Manufacturing Inc. (“Petitioner” or “ANM”) to answer the discovery
`
`requests in Ex. 2026 and to increase word counts for the parties’ upcoming briefing
`
`for Patent Owner’s Response, Petitioner’s Reply, and Patent Owner’s Sur-Reply.
`
`Factual and Procedural Background
`
`In these IPR proceedings, ANM and Real Party in Interest Sizewise Rentals,
`
`LLC (“Sizewise”) challenge the patentability of each claim in the ‘172 Patent. On
`
`September 5, 2019, the Parties attended a telephone conference during which the
`
`Board authorized the filing of this motion for additional discovery and to increase
`
`the word count. Also discussed on the call was seeking modification of the Protective
`
`Order (“DCPO”) in the underlying district court case (“District Court Case”) to
`
`allow the parties to utilize documents in these IPRs. (See Paper 14.)
`
`The Parties met and conferred on September 9, 2019 regarding Sleep
`
`Number’s request to modify the DCPO. ANM took the position that wholesale
`
`modification was not appropriate but it would consider a narrower list of documents.
`
`1
`
`
`
`Sleep Number identified documents, including those referenced in ANM’s and
`
`Sizewise’s District Court Case interrogatory responses. ANM opposed the use of
`
`any of the documents. Therefore, Sleep Number is bringing an ex parte motion in
`
`the District Court Case asking for modification of the DCPO.1
`
`Argument
`
`Secondary Considerations Are Probative to Questions of Patentability.
`
`Sleep Number seeks additional discovery narrowly relating to secondary
`
`considerations. “Evidence of secondary considerations may often be the most
`
`probative and cogent evidence in the record. It may often establish that an invention
`
`appearing to have been obvious in light of the prior art was not.” Omron Oilfield &
`
`Marine, Inc. v. MD/TOTCO, IPR2013-00265, Paper 11 at 13 (PTAB Oct. 31, 2013)
`
`(quotations omitted). Such considerations may include, among others, commercial
`
`success and copying. See Apple Inc. v. Samsung Electronics Co. Ltd., 839 F.3d 1034,
`
`1052 (Fed. Cir. 2016). “There is a presumption that the patented invention is
`
`commercially successful ‘when a patentee can demonstrate commercial success,
`
`usually shown by significant sales in a relevant market, and that the successful
`
`1 The DCPO is attached as Exs. 2028-29, and counsel’s email exchange is attached
`
`as Ex. 2030. ANM wrongly argues that referencing confidential documents in
`
`these IPRs is a violation of the DCPO. (See Ex. 2030 (citing case law).)
`
`2
`
`
`
`product is the invention disclosed and claimed in the patent.’” Omron, IPR2013-
`
`00265, Paper 11 at 13 (quoting Ecolochem, Inc. v. S. Cal. Edison Co., 227 F.3d 1361,
`
`1377 (Fed. Cir. 2000)). There must be a “nexus” between the “merits of the claimed
`
`invention” and the “commercial success of the product.” Id. (citations omitted). “A
`
`prima facie case of nexus is established” when “the product that is commercially
`
`successful is the invention disclosed and claimed in the patent.” Id. at 14 (citing In
`
`re GPAC Inc., 57 F.3d 1573, 1580 (Fed. Cir. 1995)). Commercial success can be
`
`found based on the number of units sold, market share, sales, profits, and product
`
`saturation in the market place. Id. at 15.
`
`Discovery is Appropriate as to Secondary Considerations in This Case.
`
`Sleep Number has drafted specific, narrow requests directed toward
`
`information in the sole custody of ANM demonstrating the commercial success and
`
`copying of Sleep Number’s patented technology. Sleep Number’s original proposed
`
`requests have been tailored per the Board’s guidance. Sleep Numbers’ revised
`
`requests, attached as Exhibit 2026, request only as follows:
`
`• An identification of ANM’s and Sizewise’s products that embody an
`
`Accused Air Controller or Accused Source Code (as identified by Sleep
`
`Number in the District Court Case) and, for comparison, those that do not.
`
`Information regarding the number of units sold and revenues therefrom.
`
`Information regarding the distributors/retailers of such products.
`
`•
`
`•
`
`3
`
`
`
`•
`
`Information regarding the differentiating features of such products.
`
`The above information will show an adoption or copying of Sleep Number’s own
`
`patented design and the resulting commercial success of the practicing products.
`
`The Panel may order this additional discovery if it “is in the interests of
`
`justice,” which involves consideration of the five Garmin factors. Kingston Tech.
`
`Co., Inc. v. Catr Co., Ltd., IPR2015-00149, Paper 24 at 2 (PTAB June 10, 2015)
`
`(citing 35 U.S.C. § 316(a)(5); 37 C.F.R. § 42.51(b)(2)); Garmin Int’l, Inc. v. Cuozzo
`
`Speed Techs. LLC, IPR2012-00001, Paper 26 at 6–7 (PTAB March 5, 2013). These
`
`factors are (1) there is more than a possibility that the discovery will be useful;
`
`(2) the litigation positions of the other side are not sought; (3) there is no ability to
`
`generate equivalent information by other means; (4) the instructions for the
`
`discovery are easily understandable; (5) the requests are not overly burdensome to
`
`answer. Id. These factors all favor granting this motion.
`
`A.
`
`There is More than a Mere Possibility of Usefulness.
`
`Under the first factor, Sleep Number must have evidence tending to show
`
`beyond speculation that something useful will be uncovered. Id. at 6–8. There is no
`
`requirement that “a party seeking additional discovery prove its contentions as a
`
`prerequisite for obtaining the additional discovery.” Arris Group, Inc. v. C-Cation
`
`Techs. LLC, IPR2014-00746, Paper 15 at 3 (PTAB July 24, 2014). In Kingston
`
`Techs., the patent owner sought additional discovery on the financial results of the
`
`4
`
`
`
`petitioner’s product to show commercial success. IPR2015-00149, Paper 24 at 3.
`
`The Board held that a claim chart—which showed the product practiced several
`
`claims of the patent in question—alone supported the patent owner’s request. Id. at
`
`4 (finding that defining the relevant market and size were unnecessary to grant
`
`additional discovery). In Chervon North America, Inc. et al. v. Milwaukee Electric
`
`Tool Corp., the fact that a definite nexus had not been identified was inconsequential
`
`because the patent owner “ha[d] made a narrow request for documents it asserts will
`
`have a bearing on the issue of secondary considerations” and its request was “not
`
`based on mere speculation, but on direct input from its litigation counsel[’s]” review
`
`of documents produced in the underlying litigation. IPR2015-00595, Paper 31 at 3
`
`(PTAB Oct. 30, 2015); see also Brunswick Corp. et al. v. Cobalt Boats, LLC,
`
`IPR2015-01060, Paper 20 at 3 (PTAB Dec. 28, 2015) (discovery sought was “based
`
`on firsthand knowledge” of information discovered in related district court case).
`
`This factor is easily satisfied; Sleep Number is in possession of evidence that
`
`something useful will be uncovered. First, ANM’s and Sizewise’s financial
`
`documents alone are evidence of commercial success. See Tec Air, Inc. v. Denso
`
`Mfg. Michigan Inc., 192 F.3d 1353, 1361 (Fed. Cir. 1999) (“sales figures alone” are
`
`evidence of commercial success). Second, Sleep Number will be able to show
`
`5
`
`
`
`nexus—the ITC already found infringement as to the ‘172 Patent,2 and, as in
`
`Kingston, Sleep Number served detailed infringement contentions in the District
`
`Court Case and has experts whose opinions support the contentions based upon a
`
`review of materials in the District Court Case.3 See Brown & Williamson Tobacco
`
`Corp. v. Philip Morris, Inc., 229 F.3d 1120, 1130 (Fed. Cir. 2000) (“[I]f the marketed
`
`product embodies the claimed features, and is coextensive with them, then a nexus
`
`is presumed. . . .”). Because the patents claim an entire mattress system with novel
`
`aspects of an air controller, sales information as to the entire system is relevant.
`
`Third, in the District Court Case, ANM and Sizewise have produced some financial
`
`documents with limited information. As in Chevron and Brunswick, Sleep Number’s
`
`counsel’s review gives Sleep Number a reasonable basis to believe that the requested
`
`discovery would show commercial success through (1) ANM and Sizewise
`
`incorporating Sleep Number’s patented technology into their bed models after patent
`
`2 In the Matter of Certain Air Mattress Sys., Components Thereof, & Methods of
`
`Using the Same, USITC Inv. No. 337-TA-971, Comm’n Opinion, 2017 WL
`
`11165550, at *4 (June 20, 2017).
`
`3 Per Ex. 2030, ANM opposes submission of the infringement contentions in these
`
`IPRs due to confidentiality and thus, out of an abundance of caution, Sleep Number
`
`has not attached them here nor submitted any supporting expert declarations.
`
`6
`
`
`
`issuance, and (2) those products experiencing an increase in unit sales and revenues.
`
`For example, Sleep Number’s counsel believes, as stated in Ex. 2027, that ANM
`
`increased its consumer bed sales after a non-compete with Sleep Number expired
`
`and increased its footprint with sales to retailers across the country.
`
`Based on the foregoing, Sleep Number should be allowed to discover the
`
`specifics of ANM’s consumer bed sales as well as ANM’s and Sizewise’s medical
`
`bed sales, which Sleep Number reasonably believes will yield similar information.
`
`B.
`
`Sleep Number Is Not Seeking Litigation Positions.
`
`The second factor forecloses discovery that merely attempts to uncover
`
`another party’s litigation positions, and the underlying basis for those positions, as
`
`inappropriate. Garmin, IPR2012-00001, Paper 26 at 6; accord Kingston Techs.,
`
`IPR2015-00149, Paper 24 at 5–6 (finding that requests that seek specific facts
`
`supports additional discovery). The concern addressed by this factor is not present
`
`here. Sleep Number’s additional discovery does not seek any litigation position or
`
`underlying basis. It seeks financial information/documents to show commercial
`
`success and copying, not position(s) on secondary considerations, validity, or
`
`infringement. Sleep Number understands that infringement is not at issue here and
`
`it does not seek information to support such a claim. Moreover, a patent owner is
`
`not seeking a litigation position when simply seeking to use documents already
`
`produced to its counsel in another matter. Chervon, IPR2015-00595, Paper 31 at 3.
`
`7
`
`
`
`C.
`
`Sleep Number Cannot Generate Equivalent Discovery.
`
`The third factor addresses whether the requesting party has no ability to
`
`generate equivalent information by other means. Garmin, IPR2012-00001, Paper 26
`
`at 6. This requires an adequate explanation for why, e.g., it cannot access the
`
`information from some other source or rely on its own analysis. Id. at 14. Financials
`
`and internal items that “would be difficult, if not impossible, for Patent Owner to
`
`generate equivalent information by other means,” weighs in favor of additional
`
`discovery. Kingston Techs., IPR2015-00149, Paper 24 at 6 (granting discovery as to
`
`financials and customer comments, but not publicly available information).
`
`The information sought from ANM and Sizewise is not otherwise available.
`
`Even if Sleep Number is successful in modifying the DCPO, the documents
`
`produced in the District Court Case are incomplete and Sleep Number is not aware
`
`of catalogs, tests, or surveys that would show the relative success—certainly not
`
`historically—of ANM’s air mattresses with or without the patented features.
`
`D.
`
`The Requested Discovery is Easily Understandable.
`
`The fourth factor requires the additional discovery requests be easily
`
`understandable. Garmin, IPR2012-00001, Paper 26 at 6–7, 14 (finding 10 pages of
`
`complex requests unclear, but 2–4 pages of easily understandable requests
`
`acceptable); see also Chervon, IPR2015-00595, Paper 31 at 4 (finding specific
`
`request for documents focused, easily understandable, and not overly burdensome).
`
`8
`
`
`
`Here, Sleep Number’s requested discovery is short, tailored, and easily understood.
`
`E.
`
`The Requested Discovery is Not Overly Burdensome.
`
`The fifth factor requires the requests be sensible and responsibly tailored
`
`according to genuine need and not be overly burdensome (financially, time, ability).
`
`Garmin, IPR2012-00001, Paper 26 at 7, 15–16 (finding motion filed a month after
`
`institution not unduly delayed); see also Kingston Techs., IPR2015-00147, Paper 24
`
`at 7 (noting all discovery imposes some burden and granting discovery even where
`
`petitioner asserted “no efficient procedure to locate” the information). Here, the
`
`requests are narrowly tailored, provide alternative ways to produce the same
`
`information, can be answered in part with documents already produced in the
`
`District Court Case, and can be satisfied by generating financial reports/
`
`spreadsheet(s) as Sleep Number believes ANM likely did in the District Court Case.
`
`Discussion of Secondary Considerations and Other Issues Warrant
`Enlargement of the Word Count for the Response, Reply, and Sur-Reply.
`
`Pursuant to 37 C.F.R. § 42.24, Sleep Number requests that the Board waive
`
`the word count and allow a 15% increase in additional words for the parties’
`
`briefing—amounting to 2,100 additional words to the Patent Owner Response and
`
`840 additional words to the Petitioner Reply and Patent Owner Sur-Reply. Granting
`
`such request is in the interests of justice, as the current word limits are insufficient.
`
`First, the Patents-at-Issue lend themselves to discussion of various secondary
`
`considerations, which require considerable space. Second, the parties must undergo
`
`9
`
`
`
`a substantial amount of briefing on substantive issues as ANM has asserted multiple
`
`grounds (e.g., 13 different anticipatory and obviousness based grounds against the
`
`‘172 Patent) and lengthy claims (e.g., several claims having 7 to 10 limitations, each
`
`having several elements therein). Additionally, the parties must undergo substantial
`
`claim construction briefing; e.g., ANM has offered three alternative constructions
`
`for a single term in the ‘172 Patent, and Sleep Number must respond to each plus
`
`provide constructions for additional terms. Finally, Sleep Number plans to present
`
`multiple procedural issues with ANM’s Petition.
`
`Because these circumstances require significant space to fulsomely brief the
`
`parties’ arguments, a 15% across-the-board increase is in the interests of justice.
`
`Conclusion
`
`For these reasons, Sleep Number requests the Board grant its motion. Sleep
`
`Number respectfully reserves the right to provide additional documents or renew its
`
`motion in the event the DCPO is modified on Sleep Number’s ex parte motion.
`
`Respectfully submitted,
`
`10
`
`
`
`Dated: September 12, 2019
`
`By: s/Luke Toft
`Luke Toft (Reg. No. 75,311)
`FOX ROTHSCHILD LLP
`222 South Ninth Street, Suite 2000
`Minneapolis, MN 55402
`Telephone: (612) 607-7000
`Facsimile: (612) 607-7100
`ltoft@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
`
`Attorneys for Patent Owner
`Sleep Number Corporation
`
`11
`
`
`
`CERTIFICATE OF SERVICE
`Pursuant to 37 CFR § 42.6(e), the undersigned hereby certifies that on
`
`September 12, 2019, the foregoing Patent Owner’s Motion for Additional Discovery
`
`was served via e-mail, as authorized by the Petitioner, at the following email
`
`correspondence address of record as follows:
`
`Kyle L. Elliott
`kelliott@spencerfane.com
`
`Kevin S. Tuttle
`ktuttle@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
`
`Dated: September 12, 2019
`
`s/Luke Toft
`Luke Toft (Reg. No. 75, 311)
`Counsel for Patent Owner
`
`12
`
`
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