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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________________
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`PAYPAL, INC.
`UPWORK GLOBAL INC.
`SHOPIFY, INC.
`SHOPIFY (USA), INC.
`STRAVA, INC.
`VALASSIS COMMUNICATIONS, INC.
`RETAILMENOT, INC.
`DOLLAR SHAVE CLUB, INC.
`Petitioners
`
`v.
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`PERSONALWEB TECHNOLOGIES LLC
`LEVEL 3 COMMUNICATIONS, LLC
`Patent Owners
`
`____________________
`
`
`Case IPR2019-01111
`Patent No. 7,802,310
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`____________________
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`
`PATENT OWNERS’ SUR-REPLY
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`
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`Case IPR2019-01111
`Patent No. 7,802,310
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`Petitioners’ main argument as to why they are not in privity with Amazon,
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`and why Amazon is not an RPI, is that Petitioners allegedly possessed “unique
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`motivations” for filing this Petition that were/are independent of Amazon’s dispute
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`with PersonalWeb. But any unique motivations related to the use of non-Amazon
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`products by some co-Petitioners do not negate the close relationship that does
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`exist, which stems from Petitioners’ undisputed use of Amazon’s products.
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`I.
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`PETITIONERS ARE IN PRIVITY WITH AMAZON, EVEN IF SOME
`CO-PETITIONERS USE SOME NON-AMAZON PRODUCTS.
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`The POPR rests on uses of Amazon S3 by Petitioners rather than on uses of
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`non-S3 products, since the relationship between Petitioners and Amazon is what is
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`at issue. “Both the statute and the regulation ask only two questions: (1) when was
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`‘the petition’ filed; and (2) when was … the petitioner’s real party in interest, or a
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`privy of the petitioner served with a complaint?” Click-to-Call Techs. v. Ingenio,
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`Inc., 899 F. 3d 1321, 1338 (Fed. Cir. 2018). Asking whether some co-Petitioners
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`might have had some products implicated by some non-S3 allegations is irrelevant
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`and obfuscates the real issue behind the privity and RPI analyses, which examines
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`whether Petitioners and Amazon have a sufficiently close relationship based on the
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`use of Amazon S3 products. The answer to that question is undisputedly “yes.”
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`II.
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`PERSONALWEB AND AMAZON AGREE WITH THE DISTRICT
`COURT’S FINDINGS.
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`PersonalWeb accepted the District Court’s privity analysis, telling the CAFC
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`Case IPR2019-01111
`Patent No. 7,802,310
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`that “[w]ith respect to claim preclusion, the only element [on appeal] is whether
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`the present litigation involves the same cause of action as the Texas Action.” In re:
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`PersonalWeb Techs., LLC., Appeal No. 2019-1918 (CAFC) at Dkt. 49 at 36 [Ex.
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`2017]. In its unopposed motion for leave to intervene in the appeal, Amazon avers
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`that “[t]he judgment … came about only because of Amazon’s indemnification of
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`S3 customers and its summary judgment motion.” Id. at Dkt. 29 at 8 [Ex. 2018].
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`PersonalWeb thus is “living with” the District Court’s privity finding and is
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`not “trying to have it both ways.” So too is Amazon. Yet Petitioners here advance
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`positions contrary to what the District Court has found, and to what its supplier-
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`indemnitor has told the District Court and is telling the CAFC. Petitioners cannot
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`benefit from the District Court’s finding in that forum and disclaim it here.
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`III. PETITIONERS MISCHARACTERIZE PRIVITY LAW.
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`Privity requires a flexible analysis and hinges on whether the parties’
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`relationship is “sufficiently close” such that they should be bound by the trial
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`outcome. WesternGeco LLC v. ION Geophysical Corp., 889 F.3d 1308, 1318-19
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`(Fed. Cir. 2018). It “takes into account the ‘practical situation,’ and should extend
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`to parties to transactions and other activities relating to the property in question.”
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`Trial Practice Guide, 77 Fed. Reg. at 48,759 (emphasis added) (citing 157 Cong.
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`Rec. S1376 (Mar. 8, 2011) (statement of Sen. Kyl)). The “practical situation” here
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`is that Amazon adequately represented Petitioners’ interests in using S3 products in
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`Case IPR2019-01111
`Patent No. 7,802,310
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`the Texas action where accusations against customer defendants were made, and
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`Amazon continues to adequately represent Petitioners interests in the MDL and
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`CAFC Appeal—exactly as Amazon has argued, exactly as the District Court
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`found, and exactly in line with what is needed to establish privity.
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`Ninth Circuit law holds “that privity exists when the interests of the party in
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`the subsequent action were shared with and adequately represented by the party in
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`the former action.” Ex. 2012 at 13. This standard is akin to the intent of § 315 and
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`Taylor, as explained in Applications in Internet Time, LLC v. RPX Corp., 897 F.3d
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`1336, 1350 & 1360-61 (Fed. Cir. 2018) (“AIT”). The District Court also analyzed
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`whether the indemnification and provider-customer relationships created privity,
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`concluding that both did. The Court has done the heavy lifting in determining that
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`the parties are privies under 9th Circuit law, which comports with Congressional
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`intent, CAFC case law, and Supreme Court precedent. See Ex. 2012 at 12-16.
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`Petitioners provide no real counterarguments. Petitioners do not state any
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`legal standard that should apply, much less show that 9th Circuit is inconsistent
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`with CAFC holdings. Petitioners do not allege error in the District Court analysis.
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`Instead, Petitioners’ “authorities state only general propositions that are entirely
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`consistent with [the District Court] analysis.” Id. at 14. The Reply’s cherry-picked
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`statements from the CAFC’s analysis do not address its ultimate holdings. Ninth
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`Circuit law comports with the CAFC’s test, and Petitioners do not argue otherwise.
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`Case IPR2019-01111
`Patent No. 7,802,310
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`The Reply argues that the District Court’s finding involved estoppel issues
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`resulting from PersonalWeb’s prior dismissal of Amazon when S3 was at issue and
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`was unrelated to Petitioners’ ability to independently defend themselves in the
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`PTAB due to non-S3 allegations. Yet “PersonalWeb’s indirect infringement
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`accusations against ‘Amazon’s end-user customers and defendants’ in the Texas
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`Action further support the conclusion that Amazon and its customers share the
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`same interest in the use of S3.” Id. (emphasis added). The plain text of § 315 shuts
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`down any absolute right to independent defense in the PTAB. And the time bar
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`applies where “proxies or privies would benefit from an instituted IPR, even where
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`the petitioning party might separately have its own interest in initiating an IPR.”
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`AIT at 1347 (emphasis added). It is not an “either-or” proposition. The argument
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`that the PTAB is not bound by the finding of privity is foreclosed by the CAFC.
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`Petitioners’ Taylor analysis repackages the same legal error and is factually
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`undermined by the indemnity agreement analysis. It simply is not credible.
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`IV. PETITIONERS DO NOT MEET THEIR RPI-RELATED BURDEN.
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`The POPR at III.E closely tracks the PTAB’s analysis in Ventex. The PTAB
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`would be on firm footing finding that Amazon is an RPI, especially when privity-
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`related facts and Amazon’s own statements are taken into account.
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`No reasonable person would believe that “Amazon and Petitioners are on
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`separate tracks fighting different allegations.” Amazon certainly doesn’t, as it told
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`Case IPR2019-01111
`Patent No. 7,802,310
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`the CAFC that it is indemnifying its customer defendants and that the cases against
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`the co-Petitioners here would be directly affected by the appeal. Ex. 2018 at 10-14.
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`No reasonable person would believe that any “preexisting, established
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`relationship” was terminated by virtue of a CAFC appeal. The indemnification
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`agreement lives on, through appeal and presumably thereafter. Id. at 2, 4, 6, & 8.
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`And no reasonable person would believe that Amazon was getting only a
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`“generalized benefit.” Amazon certainly doesn’t believe this: “As S3 customers,
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`[the customers] are also limited to the specific infringement claims brought against
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`them. Amazon, however, has far broader interests as the supplier of S3….” Id. at 8.
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`Amazon and Petitioners have a mutual interest in invalidating the claims at
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`issue here. Amazon is a clear beneficiary of the Petitioners’ efforts in this IPR, just
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`as Petitioners were the clear beneficiaries of Amazon’s privity arguments. And
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`Petitioners are seeking relief from the PTAB that Amazon cannot seek for itself.
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`Petitioners do not argue that the Petition’s filing date should be maintained if
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`Amazon were an added RPI. Thus, if the PTAB were disinclined to follow the
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`District Court’s lead with respect to privity, the Petition would be time-barred.
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`V. CONCLUSION
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`The PTAB should embrace the District Court’s findings and accept what
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`both Amazon and PersonalWeb have told the CAFC. Amazon is a privy of
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`petitioners, and is an RPI. The Petition is time-barred for both reasons.
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`Respectfully submitted,
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`Case IPR2019-01111
`Patent No. 7,802,310
`
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`Dated: October 8, 2019
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` /Joseph A. Rhoa/
`Joseph A. Rhoa
`Reg. No. 37,515
`Jonathan A. Roberts
`Reg. No. 68,565
`Counsel for Patent Owner PersonalWeb
`Nixon & Vanderhye PC
`901 N. Glebe Road, Suite 1100
`Arlington, Virginia 22203
`Telephone: (703) 816-4043
`Telephone: (703) 816-4414
`Email: jar@nixonvan.com
`Email: jr@nixonvan.com
`
`Lawrence M. Hadley
`(Admitted Pro Hac Vice)
`GLASER WEIL FINK HOWARD
` AVCHEN & SHAPIRO LLP
`10250 Constellation Boulevard,
`19th Floor
`Los Angeles, California 90067
`Telephone: (310) 553-3000
`Email: LHadley@Glaserweil.com
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`- 6 -
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`
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`CERTIFICATE OF SERVICE
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`Case IPR2019-01111
`Patent No. 7,802,310
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`The undersigned hereby certifies that a true copy of the foregoing Patent
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`Owner’s Sur-Reply and all exhibits filed therewith, was served on Petitioners on
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`October 8, 2019, by emailing a copy to counsel at the email addresses listed below:
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`Brent P. Ray (Reg. No. 54,390)
`bray@kslaw.com
`KING & SPALDING LLP
`353 N Clark Street, 12th Floor
`Chicago, IL 60654
`(312) 995-6333
`
`Lori A. Gordon (Reg. No. 50,633)
`lgordon@kslaw.com
`KING & SPALDING LLP
`1700 Pennsylvania Ave NW
`Washington, D.C. 20006
`(202) 737-0500
`
`Kourtney N. Baltzer (Reg. No. 65,294)
`kourtney.baltzer@kirkland.com
`Nikhil R. Krishnan (Reg. No. 68,879)
`nikhil.krishnan@kirkland.com
`KIRKLAND & ELLIS LLP
`300 North LaSalle Street
`Chicago, Illinois 60654
`Telephone: (312) 862-2000
`Fax: (312) 862-2200
`PayPal_PWeb_PTAB@kirkland.com
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`
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`
` /Jonathan A. Roberts/
`Jonathan A. Roberts
`Reg. No. 68,565
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