`
`Trials@uspto.gov
`Tel: 571-272-7822 Entered: November 24, 2021
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`APPLE INC.,
`Petitioner,
`v.
`KOSS CORPORATION,
`Patent Owner.
`____________
`
`IPR2021-00592
`Patent 10,469, 934 B2
`____________
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`
`
`Before PATRICK R. SCANLON, DAVID C. McKONE, and
`GREGG I. ANDERSON, Administrative Patent Judges.
`
`ANDERSON, Administrative Patent Judge.
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`
`ORDER
`Conduct of the Proceedings
`37 C.F.R. § 42.5
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`IPR2021-00592
`Patent 10,469,934 B2
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`INTRODUCTION
`I.
`On September 9, 2021, we authorized Koss Corporation (“Patent Owner”) to
`file a motion for additional discovery (“Motion”), pursuant to 37 CFR
`§ 42.51(b)(2)(i). See Ex. 3001. Apple Inc. (“Petitioner”)1 was authorized to file an
`Opposition and Patent Owner was authorized to file a reply. Id. Patent Owner
`filed the Motion (“Mot.,” Paper 12), Petitioner filed its Opposition (“Opp.,” Paper
`13), and Patent Owner filed its Reply (“Reply,” Paper 16).
`The Motion seeks “[s]ales revenue and quantity of units sold, by calendar
`quarter, for AirPods (1st & 2nd gen) and AirPods Pro since the commercial
`introduction of those products.” Mot. 1 (citing Ex. 2033, 22).
`LEGAL PRINCIPLES
`II.
`In an inter partes review, the moving party bears the burden of showing that
`the relief requested should be granted. 37 C.F.R. § 42.20(c). Under the Leahy-
`Smith America Invents Act, additional discovery, such as that requested here, is
`available for “what is otherwise necessary in the interest of justice.” 35 U.S.C.
`§ 316(a)(5); see also 37 C.F.R. § 42.51(b)(2)(i) (“The moving party must show that
`such additional discovery is in the interests of justice . . . .”). As stated in Garmin
`International, Inc. v. Cuozzo Speed Techs. LLC, Case IPR2012-00001 (PTAB Mar.
`5, 2013) (Paper 26, 5–6) (precedential):
`[I]n inter partes review, discovery is limited as compared to that
`available in district court litigation. Limited discovery lowers the
`cost, minimizes the complexity, and shortens the period required for
`dispute resolution. There is a one-year statutory deadline for
`completion of inter partes review, subject to limited exceptions.
`35 U.S.C. § 316(a)(11); see also 37 C.F.R. § 42.100(c). What
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`1 The Petition challenges US Patent No. 10,469,934 B2, issued Nov. 5, 2019 (’934
`patent, Ex. 1001).
`2 Patent Owner’s Request for Additional Discovery.
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`IPR2021-00592
`Patent 10,469,934 B2
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`constitutes permissible discovery must be considered with that
`constraint in mind.
`The party requesting discovery “should already be in possession of a threshold
`amount of evidence or reasoning tending to show beyond speculation that
`something useful will be uncovered.” Id. at 7. Also, “[a] party should seek relief
`promptly after the need for relief is identified. Delay in seeking relief may justify
`a denial of relief sought.” 37 C.F.R. § 42.25(b).
`III. DISCUSSION
`Patent Owner lists the five factors identified in Garmin that are relevant to
`whether the requested discovery is in the interests of judgement. Mot. 6. The
`Garmin factors include: (1) the request is based on more than a mere possibility of
`finding something useful; (2) the request does not seek the litigation positions of
`the other party; (3) the information is not reasonably available through other
`means; (4) the request is easily understandable; and (5) the request is not overly
`burdensome to answer. Id. (citing Garmin, Paper 26 at 6–7).
`For the required nexus between commercial success and the claimed
`invention, Patent Owner alleges “publicly available information provides more
`than a threshold showing that Petitioner’s ‘AirPods Products’ have been
`commercially successful.” Mot. 2. According to Patent Owner, the public
`information likewise demonstrates that the AirPods Products embody the
`challenged claims. Id. Patent Owner argues generally that the additional
`discovery seeks evidence for proving commercial success, which is relevant for
`assessing obviousness. Id. at 6 (citing Graham v. John Deere Co., 383 U.S. 1, 17-
`18 (1966)). Patent Owner cites publicly available information it has collected
`which shows that between 2017 and 2020 Petitioner’s AirPods Products sold 224
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`million units and generated 35 billion dollars. Mot. 9 (citing Ex. 20343).
`According to Patent Owner, these sales represent almost fifty percent of the total
`market. Id. (citing Ex. 2040,4 2).
`Petitioner’s sales are alleged to have a nexus with the ’934 patent because
`the sales “were a direct result of the unique characteristics of the claimed invention
`-- as opposed to other economic and commercial factors unrelated to the quality of
`the patented subject matter.” Mot. 7 (citing In re Huang, 100 F.3d 135, 140 (Fed.
`Cir. 1996)). Patent Owner alleges it is entitled to a rebuttable presumption of
`nexus upon a showing that the commercially successful product “is the invention
`disclosed and claimed.” Id. (citing Demaco Corp. v. F. Von Langsdorff Licensing
`Ltd., 851 F.2d 1387, 1392 (Fed. Cir. 1998)). Patent Owner alleges that, even
`without the presumption, it is still entitled to show “that the evidence of secondary
`considerations is the direct result of the unique characteristics of the claimed
`invention.” Id. at 8 (citing Fox Factory, Inc. v. SRAM, LLC, 994 F.3d 1366, 1373–
`1374 (Fed. Cir. 2019)).
`For reasons discussed below in our analysis of the Garmin factors, we are
`persuaded that Patent Owner has, for purposes of this motion, sufficiently shown
`the required nexus between the additional discovery requested and the claimed
`invention. Patent Owner has provided publicly available information of annual
`sales between 2017 and 2020. We agree with Patent Owner that this “information
`provides more than a threshold showing that Petitioner’s AirPods Products have
`been commercially successful.” Mot. 2.
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`3 Apple Statistics (2021) - Business of Apps, “Apple AirPods sales.”
`4 9TO5Mac, January 27, 2021.
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`Factor 1: more than a mere possibility of finding something useful
`Patent Owner’s showing of nexus consists, in part, of a summary of claim 1
`and a citation to its infringement contentions filed in the co-pending district court
`litigation. Mot. 9–10 (claim 1 summary), 5 (citing Ex. 1014,5 525–563, 597–607).
`The infringement contentions map Petitioner’s promotional and advertising
`literature to the claims of the ’934 patent. Id. at 9–10 (citing Ex. 2030–20326);
`Reply 1; Ex. 1014.
`The claims of the ’934 patent are broad, as are the promotional and
`advertising material describing the AirPods Products. On this record, we find that
`the claim chart shows the AirPods Products may meet the limitations of at least
`claim 1 of the ’934 patent. See Ex. 1014, Ex. C-1, 1–11. Thus, Patent Owner has
`shown more than a mere possibility that it is entitled to a rebuttable presumption of
`nexus upon its showing that the AirPods Products are “the invention disclosed and
`claimed.” Mot. 7 (citing Demaco Corp., 851 F.2d at 1392).
`We disagree with Petitioner that the infringement contentions are not proof
`of the correspondence between the challenged claims and Petitioner’s products,
`and are instead conclusory allegations lacking evidentiary support. See Opp. 5–6
`(citing IPR2020-01405, Paper 30 at 5 (PTAB Apr. 23, 2021) (denying motions for
`additional discover because “assertions of infringement and coextensiveness do not
`go far enough”)). Patent Owner’s contentions cite specific evidence from
`Petitioner’s own advertising and promotional materials showing features of the
`products accused therein and mapping those features to the limitations of the
`challenged claims of the ’934 patent. Although we do not make a finding that
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`5 Plaintiff Koss Corporation’s Preliminary Infringement Contentions, Case No.
`6:20-cv-00655 (W.D. Tex.).
`6 Petitioner’s “Newsroom” press releases dated December 13, 2016 (Ex. 2030),
`March 20, 2019 (Ex. 2031), and October 28, 2019 (Ex. 2032).
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`Patent Owner has proved infringement, we do find that Patent Owner’s showing
`goes beyond a “mere possibility of finding something useful.” Petitioner does not
`argue that the contentions are otherwise insufficient or that its advertising and
`promotional materials are not authentic and accurate. See Reply 2.
`We also agree with Patent Owner that a nexus for commercial success may
`be based on claim 1’s recitation of “firmware upgrades transmitted from the
`remote, network connected server.” Mot. 5. Such upgrades are alleged as being
`necessary in order for the AirPods Products to operate reliably. Id. (citing Ex.
`1001, 18:1–32 (claim 1), 10 (citing Ex. 10097, 1:32–40). Patent Owner argues
`“Petitioner has released several firmware updates for the AirPods Products,
`including shortly after the products’ release. Id. at 10 (citing Exs. 2035,8 20399).
`Petitioner does not respond to this contention.
`Factor 1 weighs in favor authorizing additional discovery.
`Factor 2: the request does not seek the litigation positions of the other party
`Patent Owner alleges it does not seek “underlying litigation positions or the
`bases for them.” Mot. 11. Petitioner responds that “KOSS’s focus on Apple
`products—without specific analysis of the unique features that produced their
`sales—suggests that KOSS’s attempts to use additional discovery in these IPR
`proceedings to impermissibly suggest infringement.” Opp. 8. To support its
`allegations in this proceeding, Patent Owner alleges that Petitioner’s products are
`the invention disclosed and claimed in the ’934 patent and has pointed to evidence
`purporting to make that showing. We are not persuaded that litigation positions
`would be disclosed were the discovery authorized.
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`7 Rao, US Patent No. 7,881,745 B2, issued Feb. 1, 2011.
`8 c/net, Your AirPods just got a quiet update, Sept. 8, 2021.
`9 MacRumors, Apple Updates AirPods Pro Firmware to Version 3A283, Sept. 14,
`2020.
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`Factor 2 weighs in favor of authorizing additional discovery.
`Factor 3: the information is not reasonably available through other means
`Patent Owner alleges additional discovery is needed because it “cannot
`generate or otherwise obtain Petitioner’s confidential sales information.” Mot. 11–
`12. On the other hand, Patent Owner alleges that “publicly available information
`on commercial success of Petitioner’s products . . . provides more than a threshold
`showing that Petitioner’s AirPods Products have been commercially successful.”
`Id. at 2 (see Discussion above (citing Exs. 2034 and 2040)).
`Petitioner argues the public information already available “is sufficient for
`its allegations of commercial success of [Petitioner].” Opp. 9. Further, according
`to Petitioner, the request goes beyond what has been produced in the district court.
`Id.
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`However, we do not find the publicly available information purporting to
`summarize Petitioner’s sales a satisfactory substitute for the confidential sales
`information maintained by Petitioner. In particular, there is no stipulation that the
`publicly available information is authentic or that it accurately reflects yearly sales.
`See Reply 5 (“Petitioner has not stipulated that the AirPods Products have achieved
`significant sales.”). With a stipulation regarding sales (which we suggest the
`parties investigate), the additional discovery might be unnecessary. Either way,
`Patent Owner needs the requested information to establish commercial success.
`And we are persuaded that Petitioner’s confidential sales information is not
`reasonably available to Patent Owner through other means.
`Factor 3 weighs in favor of authorizing additional discovery.
`Factor 4: the request is easily understandable
`Patent Owner states the request is understandable. Mot. 12. Other than
`alleging the request goes beyond what was produced in the district court, Petitioner
`does not specifically respond. Opp. 9. That the request is understandable does not
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`mean the discovery should be permitted but it does simplify the response of
`Petitioner.
`Factor 4 weighs in favor of authorizing additional discovery.
`Factor 5: the request is not overly burdensome to answer
`As noted in our analysis of Factor 3, the requested discovery might be
`unnecessary if the parties stipulate to commercial sales of the AirPods Products.
`Petitioner alleges the request seeks “[s]ales revenue and quantity of units sold, by
`calendar quarter, for AirPods (1st & 2nd gen) and AirPods Pro since the
`commercial introduction of those products[,]” including sales made before the ’934
`patent issued. Opp. 9 (citing Mot. 1). Further, Petitioner alleges “[t]his goes well
`beyond the discovery produced in the district court litigation, further demonstrating
`that the discovery is not as limited and readily available as [Patent Owner]
`suggests.” Id.
`We agree that Petitioner has identified some limitations to the request. As
`per our Order, we grant the Motion subject to conditions set forth below.
`Factor 5 weighs slightly against authorizing further discovery.
`ORDER
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`Accordingly, it is hereby:
`ORDERED that that within seven (7) days of the date of this order, Patent
`and Petitioner shall meet and confer regarding a stipulation that would avoid the
`need for the requested additional discovery;
`ORDERED that, if a stipulation is reached, the stipulation shall be filed
`within fourteen (14) days of this Order;
`ORDERED that, if a stipulation is not reached, Patent Owner’s Motion for
`Additional Discovery is GRANTED and within fourteen (14) days of this Order
`Petitioner shall produce the additional discovery to Patent Owner; and
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`IPR2021-00592
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`ORDERED that the additional discovery shall be subject to the following
`conditions: 1) no sales information prior to the date the ’934 patent issued need be
`produced; and 2) and only summary sales information in a form maintained by
`Petitioner or generated to respond to the additional discovery need be produced.
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`IPR2021-00592
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`Patent 10,469,934 B2
`FOR PETITIONER:
`W. Karl Renner
`David Holt
`Joel Henry
`FISH & RICHARDSON P.C.
`axf-ptab@fr.com
`holt2@fr.com
`jhenry@fr.com
`
`FOR PATENT OWNER:
`Mark G. Knedeisen
`Laurén Shuttleworth Murray
`Brian P. Bozzo
`K&L GATES LLP
`mark.knedeisen@klgates.com
`lauren.murray@klgates.com
`brian.bozzo@klgates.com
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