Filed: February 11, 2019
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`____________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________________
`
`ZTE (USA), INC.
`Petitioner
`
`v.
`
`CYWEE GROUP LTD.
`Patent Owner
`
`____________________
`
`Case IPR2019-00525
`Patent No. 8,552,978
`____________________
`
`OPPOSITION TO PETITIONER’S MOTION FOR JOINDER TO
`INTER PARTES REVIEW IPR2018-01257
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`____________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________________
`
`ZTE (USA), INC.
`Petitioner
`
`v.
`
`CYWEE GROUP LTD.
`Patent Owner
`
`____________________
`
`Case IPR2019-00525
`Patent No. 8,552,978
`____________________
`
`OPPOSITION TO PETITIONER’S MOTION FOR JOINDER TO
`INTER PARTES REVIEW IPR2018-01257
`
`
`
`Case IPR2019-00525
`Patent No. 8,552,978
`
`TABLE OF CONTENTS
`
`I. INTRODUCTION ............................................................................................. 1
`II. STANDARD ...................................................................................................... 2
`III. ARGUMENT ................................................................................................... 3
`1. Joinder Would Prejudice Patent Owner ..................................................... 3
`2. Joinder Would Impact The Trial Schedule ................................................ 6
`a. Joinder Would Introduce New Claim Construction Issues ................... 7
`b. Joinder Would Require Additional Discovery as to RPIs ...................... 8
`IV. CONCLUSION ............................................................................................... 9
`
`
`
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` i
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`Case IPR2019-00525
`Patent No. 8,552,978
`
`TABLE OF AUTHORITIES
`
`
`Cases
`
`Applications in Internet Time v. RPX Corp.,
` 897 F.3d 1336 (Fed. Cir., July 9, 2019) ................................................................ 5
`
`Famy Care Ltd. v. Allergan, Inc.,
` IPR2017-00566 (PTAB July 12, 2017) ................................................................. 4
`
`Google LLC v. CyWee Group Ltd.,
` IPR2018-01257 ..................................................................................................... 1
`
`Kyocera Corp. v. Softview, LLC,
` IPR2013-00004 (PTAB Apr. 24, 2013) ................................................................ 3
`
`Nidec Motor Corp. v. Zhongshan Broad Ocean Motor Co. Matal,
` 868 F.3d 1013 (Fed. Cir. 2017) (Dyk, J. and Wallach, J. concurring) .................. 7
`
`Proppant Express Investments LLC, et al., v. Oren Tech., LLC,
` IPR2018-00914, Paper 21 at 5 (PTAB Nov. 8, 2018) ........................................... 7
`
`Unified Patents, Inc. v. PersonalWeb Tech., LLC, et al.,
` IPR2014-00702, Paper 12 at 2-3 (PTAB July 24, 2014) .............................. 2, 5, 6
`
`Statutes
`
`35 U.S.C. § 315(c) .................................................................................................... 2
`
`37 CFR § 42.122 ....................................................................................................... 2
`
`Other Authorities
`
`157 Cong. Rec. S1376 (daily ed. Mar. 8, 2011) (statement of Sen. Kyl) ............. 3, 4
`
` ii
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`
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`Case IPR2019-00525
`Patent No. 8,552,978
`
`I.
`
`
`INTRODUCTION
`
`ZTE (USA), Inc. (“Petitioner” or “ZTE”) has filed a petition against CyWee
`
`Group Ltd. (“CyWee” or “Patent Owner”) for inter partes review of U.S. Patent
`
`No. 8,552,978 (the “‘978 Patent”) concurrently with a Motion for Joinder (the
`
`“Motion”) with Google LLC v. CyWee Group Ltd., IPR2018-01257 (the “Google
`
`IPR”). The Google IPR was instituted on December 11, 2018, challenging claims
`
`10 and 12 of the ’978 Patent.
`
`ZTE is one of four parties now seeking joinder with the Google IPR. The
`
`other parties are Samsung Electronics Co., Ltd. (“Samsung”); Huawei Device
`
`USA, Inc., et al. (“Huawei”); and LG Electronics Inc. (“LG”). All of these parties
`
`are also parties to infringement actions before various district courts involving the
`
`‘978 Patent. Petition, Paper 1 at 5-6. ZTE has challenged the validity of the ‘978
`
`Patent in CyWee Group Ltd. v ZTE Corp. et al., Civil Action No. 3:17-cv-02130
`
`(S.D. Cal.) (the “District Court Action”).
`
`The District Court Action was filed on October 17, 2017. District Court
`
`Action, Complaint, Doc. 1. ZTE is nearly three months past the deadline for which
`
`it could have filed a petition for a new IPR pursuant to 37 C.F.R. § 42.101(b).
`
`During the time since ZTE was first served with the complaint in the District Court
`
`Action, ZTE has not indicated any interest in challenging the validity of the ‘978
`
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`1
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`Patent No. 8,552,978
`Patent by IPR, opting instead to pursue an invalidity defense in the District Court
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`Action. The District Court Action has progressed considerably, but was stayed on
`
`January 15, 2019, pending the resolution of the Google IPR. A claim construction
`
`hearing was held on November 19, 2018. Moreover, ZTE never identified U.S.
`
`Patent App. Pub. 2004/0095317 to Zhang (“Zhang”) in its invalidity contentions in
`
`the District Court Action. These contentions were filed after the Google IPR, when
`
`ZTE would have been made aware of that reference. ZTE should not be permitted,
`
`through joinder, to now rely on a prior art reference it decided was irrelevant in the
`
`first instance.
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`Allowing joinder here will severely prejudice the Patent Owner; will
`
`introduce new issues requiring additional discovery; will impact the schedule of
`
`this proceeding and related proceedings; and will waste the time, effort, and
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`resources of the Board, the parties, and the federal district courts. Accordingly,
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`ZTE’s Motion must be denied.
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`II. STANDARD
`
`The Board’s decision to grant joinder is discretionary. Unified Patents, Inc.
`
`v. PersonalWeb Tech., LLC, et al., IPR2014-00702, Paper 12 at 2-3 (PTAB July
`
`24, 2014); 35 U.S.C. § 315(c); 37 CFR § 42.122. This discretionary determination
`
`is made on a case-by-case basis, taking into account the particular facts of each
`
`case, substantive and procedural issues, and other considerations. Unified Patents,
`
`
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`2
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`Case IPR2019-00525
`Patent No. 8,552,978
`IPR2014-00702, Paper 12 at 3. When determining whether to grant a motion for
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`joinder, the Board considers many factors including the timing and impact of
`
`joinder on the trial schedule, cost, discovery issues, potential simplification of
`
`briefing, and claim construction issues. Id. at 3 (citing Kyocera Corp. v. Softview,
`
`LLC, Case IPR2013-00004, Paper 15 at 4 (PTAB Apr. 24, 2013); 157 Cong. Rec.
`
`S1376 (daily ed. Mar. 8, 2011) (statement of Sen. Kyl)).
`
`The moving party has the burden of establishing that it is entitled to joinder.
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`Unified Patents, IPR2014-000702, Paper 12 at 3. Even where two parties file
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`nearly identical petitions in separate proceedings, joinder is not granted “as a
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`matter of right,” if the movant fails to meet its burden. Id. at 4.
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`III. ARGUMENT
`
`
`1. Joinder Would Prejudice Patent Owner
`
`
`
`In a request for reconsideration of the Board’s decision to institute the
`
`Google IPR, Patent Owner warned of a coordinated attack on the ‘978 patent by a
`
`group of major technology companies. Google IPR, Paper 10 at 2-3. Now, Patent
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`Owner’s warnings are fully realized. Samsung, Huawei, LG, and ZTE all seek to
`
`join the Google IPR to use their substantial combined resources to bully the
`
`smaller CyWee. This synchronized effort by petitioners is highly prejudicial to
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`Patent Owner for multiple reasons.
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`3
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`Patent No. 8,552,978
`First, this type of mass joinder petitioning was one of Congress’ concerns in
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`codifying 35 U.S.C. § 315. Congress granted the Director—and through him, the
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`Board—discretion “over whether to allow joinder [as a] safety valve [to] allow the
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`Office to avoid being overwhelmed if there happens to be a deluge of joinder
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`petitions in a particular case.” Unified Patents, IPR2014-000702, Paper 12 at 4
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`(quoting 157 Cong. Rec. S1376 (daily ed. Mar. 8, 2011) (statement of Sen. Kyl)).
`
`ZTE’s Motion is one in just such a “deluge of joinder petitions.” Four joinder
`
`petitions have been filed in relation to the Google IPR.1 A flood of joinder petitions
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`of this kind prejudices Patent Owner, as it must now face the combined resources
`
`and efforts of all of the petitioners. Abusive, serial joinder also places stress on the
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`Board to determine whether each individual joinder is appropriate on a case-by-
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`case basis, wasting resources and potentially extending the trial schedule while the
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`determinations are made.
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`Second, joinder is only appropriate where the party seeking joinder agrees to
`
`take a “silent understudy” role. Famy Care Ltd. v. Allergan, Inc., IPR2017-00566,
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`Paper 12 at 9 (PTAB July 12, 2017). ZTE has alleged that it will “act as an
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`‘understudy’ and will not assume an active role.” Motion, Paper 3 at 1. However, it
`
`is unfathomable that Samsung, Huawei, LG, and ZTE—all major technology
`
`1 The related matter of Google LLC v. CyWee Group Ltd., IPR2018-01258,
`challenging related U.S. Patent No. 8,441,438, also received four joinder petitions
`from the same four parties: Samsung, Huawei, LG, and ZTE. In sum, between the
`two related IPRs, Patent Owner and the Board face eight joinder petitions.
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`4
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`Patent No. 8,552,978
`companies who are defendants in district court litigation with significant interest in
`
`the outcome of the Google IPR—will truly take an “understudy” role. Rather, the
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`facts indicate that the petitioners will be and have been actively working in tandem
`
`to defeat CyWee’s claims. Google is a known ring-leader in organizing major
`
`companies in coordinated efforts to overwhelm smaller patent owners. See, e.g.,
`
`Unified Patents, IPR2014-00702, Paper 12 at Part II(2), pp. 4-6. And all of the
`
`parties seeking joinder are mobile device manufacturers that use Google’s Android
`
`operating system, which is a foundational component of CyWee’s district court
`
`cases against those parties. It is also telling that large sections of each of the new
`
`petitioners’ briefs for their motions to join appear to be copy-pasted from one
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`another and contain nearly identical language with only minor modifications.
`
`Taken together, these facts indicate that ZTE and the other parties seeking
`
`joinder have already been working together and will certainly continue working
`
`together, taking active roles in the Google IPR. Moreover, as will be discussed
`
`below, additional discovery will be necessary to determine the extent of the
`
`relationship between the petitioners and to discover whether other third parties that
`
`also use the Android operating system that are not currently seeking to join the
`
`Google IPR are Real Parties in Interest (RPI) to its outcome. See Applications in
`
`Internet Time v. RPX Corp., 897 F.3d 1336, 1357 (Fed. Cir., July 9, 2019) (“[A]n
`
`agent with an ownership interest in the subject mater of the suit... or a party in
`
`
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`5
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`Patent No. 8,552,978
`whose name a contract has been made for the benefit of another, may qualify as a
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`real party in interest... Depending on the nature of the parties’ relationship, an
`
`entity can serve as an agent to a principal and file an IPR on the principal’s behalf
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`even without the two formally agreeing that the agent will do so.” (internal
`
`citations omitted)).
`
`2. Joinder Would Impact The Trial Schedule
`
`ZTE contends that its “proposed joinder will neither unduly complicate the
`
`Google IPR nor delay its schedule.” Motion, Paper 3 at 2. ZTE’s joinder, however
`
`would introduce new issues, including at least claim construction issues and
`
`questions regarding RPI, which would require additional discovery. Additionally,
`
`the Google IPR is not a single case with no other pending related IPRs. IPR2018-
`
`01258 was also filed by Google on June 14, 2018, and currently is on the same
`
`schedule as IPR2018-01257. IPR2018-01258 concerns U.S. Patent No. 8,441,438
`
`(the “‘438 Patent”), from which the ‘978 Patent descends. Samsung, Huawei, LG,
`
`and ZTE all seek joinder in that IPR as well. IPR2019-00143 also concerns the
`
`‘438 Patent and was filed by ZTE on October 31, 2018. ZTE has made no effort to
`
`address the impact of its joinder on the schedule of these related IPRs and therefore
`
`has failed to meet its burden to show that it is entitled to joinder. Unified Patents,
`
`IPR2014-00702, Paper 12 at 6-7.
`
`
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`6
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`Case IPR2019-00525
`Patent No. 8,552,978
`a. Joinder Would Introduce New Claim Construction Issues
`
`The Board has held, and the Federal Circuit has stated, that Congress did not
`
`intend “that petitioners could employ the joinder provision to circumvent the time
`
`bar by adding time-barred issues to an otherwise timely proceeding, whether the
`
`petitioner seeking to add new issues is the sane party that brought the timely
`
`proceeding... or... a new party.” Proppant Express Investments LLC, et al., v. Oren
`
`Tech., LLC, IPR2018-00914, Paper 21 at 5 (PTAB Nov. 8, 2018) (quoting Nidec
`
`Motor Corp. v. Zhongshan Broad Ocean Motor Co. Matal, 868 F.3d 1013, 1020
`
`(Fed. Cir. 2017) (Dyk, J. and Wallach, J. concurring)). While ZTE claims that it
`
`“presents no new issues” to the Google IPR, Motion, Paper 3 at 6, this is untrue.
`
`Although ZTE does not present any new grounds of unpatentability, its joinder to
`
`the Google IPR presents a new issue based solely on the timing of the petition.
`
`Because ZTE’s petition and Motion were filed after November 13, 2018, they
`
`should be subject to claim construction under the Phillips standard. However, the
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`Google IPR, filed before November 13, 2018, was subject to claim construction
`
`under the Broadest Reasonable Interpretation (“BRI”) standard. Because the claim
`
`construction standard applied to IPRs shifted between the time that the Google IPR
`
`was filed and the time that ZTE’s petition and Motion were filed, the Board will
`
`need to address the new issue of which claim construction standard would apply if
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`ZTE were to join.
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`7
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`Case IPR2019-00525
`Patent No. 8,552,978
`ZTE’s motion is little more than an attempt to circumvent the Phillips claim
`
`construction standard, which it would otherwise be subject to in the District Court
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`Action or in IPRs now filed with the PTAB. ZTE should not be allowed to misuse
`
`the IPR system in this way, and so its Motion should be denied on this ground. At
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`the very least, however, the new issue of which claim construction standard to
`
`apply to ZTE’s petition and joinder also weigh in favor of denying its Motion.
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`b. Joinder Would Require Additional Discovery as to RPIs
`
`ZTE’s joinder to this case also raises new questions regarding RPIs. As
`
`discussed above, taken as a whole, the facts indicate that the petitioners seeking
`
`joinder to the Google IPR are working together. Allowing joinder will create the
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`need for CyWee to engage in discovery regarding the precise nature of the
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`relationship between the petitioners and the extent to which they will truly be
`
`acting as “silent understudies” to Google in the Google IPR.
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`Similarly, the fact that Samsung, Huawei, LG, and ZTE all utilize the
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`Google Android operating system on their devices that are at issue at district court
`
`raises the question of whether other undisclosed third parties are RPIs having a
`
`stake in the outcome of the Google IPR. For instance, Motorola and HTC are also
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`parties to district court infringement and use Google’s Android operating system
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`on their infringing devices. The Motorola action has been stayed pending the
`
`outcome of the Google IPR, so it is clear that at least Motorola has an interest in
`
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`8
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`Case IPR2019-00525
`Patent No. 8,552,978
`the outcome of this proceeding. The lawsuit against HTC has not been stayed
`
`pending the outcome of the Google IPR, but this is because there are a number of
`
`additional claims asserted that are not patent claims. Joinder by any one of
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`Samsung, Huawei, LG, or ZTE will necessitate additional discovery to determine
`
`what other unknown makers of Android-based devices are RPIs to the Google IPR.
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`Because additional discovery will be required, which could also lead to
`
`shifts in the trial schedule, ZTE’s Motion should be denied.
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`IV. CONCLUSION
`
`Because the particular facts of this case, the substantive and procedural
`
`issues, and other considerations weigh in favor of denying ZTE’s Motion, joinder
`
`Respectfully submitted,
`
`
`
`
`
`/Jay P. Kesan/
`Jay P. Kesan
`Reg. No. 37,488
`
`Counsel for Patent Owner
`CyWee Group Ltd.
`
`
`
`should be denied.
`
`Dated: February 11, 2019
`
`
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`9
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`
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`CERTIFICATE OF SERVICE
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`Pursuant to 37 C.F.R. § 42.6(e), the undersigned certifies that on the date
`
`indicated below, a complete and entire copy of this submission was electronically
`
`served to Petitioner’s counsel at the email address of record:
`
`James R. Sobieraj (Reg. No. 30,805)
`Brinks Gilson & Lione
`NBC Tower, Suite 3600
`455 N. Cityfront Plaza Dr.
`Chicago, Illinois 60611
`Tel: (312) 321-4200
`jsobieraj@brinksgilson.com
`
`Jon H. Beaupré (Reg. No. 54,729)
`Tel: (734) 302-6000
`jbeaupre@brinksgilson.com
`
`Yuezhong Feng (Reg. No. 58,657)
`Tel: (312) 321-4200
`yfeng@brinksgilson.com
`
`Andrea L. Shoffstall (Reg. No. 75,426)
`Tel: (312) 321-4200
`ashoffstall@brinksgilson.com
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`ZTE_CyweeIPRs@birnksgilson.com
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`
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`Dated: February 11, 2019
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`Respectfully submitted,
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`
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`
`
`/Jay P. Kesan/
`Jay P. Kesan
`Reg. No. 37,488
`
`Counsel for Patent Owner
`CyWee Group Ltd.
`
`
`
`
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