Paper 19
`
`Trials@uspto.gov
`Tel: 571-272-7822 Entered: November 24, 2021
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`
`
`
`
`APPLE INC.,
`Petitioner,
`v.
`KOSS CORPORATION,
`Patent Owner.
`____________
`
`IPR2021-00600
`Patent 10,298,451 B1
`____________
`
`
`
`Before PATRICK R. SCANLON, DAVID C. McKONE,
`and NORMAN H. BEAMER, Administrative Patent Judges.
`
`BEAMER, Administrative Patent Judge.
`
`
`
`
`ORDER
`Conduct of the Proceedings
`37 C.F.R. § 42.5
`
`
`
`Trials@uspto.gov
`Tel: 571-272-7822 Entered: November 24, 2021
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`
`
`
`
`APPLE INC.,
`Petitioner,
`v.
`KOSS CORPORATION,
`Patent Owner.
`____________
`
`IPR2021-00600
`Patent 10,298,451 B1
`____________
`
`
`
`Before PATRICK R. SCANLON, DAVID C. McKONE,
`and NORMAN H. BEAMER, Administrative Patent Judges.
`
`BEAMER, Administrative Patent Judge.
`
`
`
`
`ORDER
`Conduct of the Proceedings
`37 C.F.R. § 42.5
`
`
`
`
`
`IPR2021-00600
`Patent 10,298,451 B1
`
`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 the Apple HomePods and HomePod Minis since the commercial
`introduction of those products.” Mot. 1 (citing Ex. 2014, 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
`
`
`1 The Petition challenges US Patent No. 10,298,451 B1, issued May 21, 2019 (’451
`patent, Ex. 1001).
`2 Patent Owner’s Request for Additional Discovery.
`
`
`
`2
`
`
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`IPR2021-00600
`Patent 10,298,451 B1
`
`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 ‘HomePod Products’ have been
`commercially successful.” Mot. 2. According to Patent Owner, the public
`information likewise demonstrates that the HomePod 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 2018 and 2020 Petitioner’s HomePod Products sold
`
`
`
`3
`
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`IPR2021-00600
`Patent 10,298,451 B1
`
`19.9 million units and generated 5 billion dollars. Mot. 9–10 (citing Exs. 2017,
`153; 20194; 2020, 25).
`Petitioner’s sales are alleged to have a nexus with the ’451 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 2018 and 2020. We agree with Patent Owner that this “information
`provides more than a threshold showing that Petitioner’s HomePod Products have
`been commercially successful.” Mot. 2.
`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
`
`
`3 Apple Statistics (2021) - Business of Apps, “HomePod sales.”
`4 “The Verge” (April, 2019).
`5 “Digital Music News” (July, 2021).
`
`
`
`4
`
`
`
`
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`IPR2021-00600
`Patent 10,298,451 B1
`
`litigation. Mot. 10–11 (claim 1 summary), 5 (citing Ex. 1016,6 488–523). The
`infringement contentions map Petitioner’s promotional and advertising literature to
`the claims of the ’451 patent. Id. at 10–11 (citing Exs. 2015, 2021, 20227);
`Reply 1.
`The claims of the ’451 patent are broad, as are the promotional and
`advertising material describing the HomePod Products. On this record, we find
`that the claim chart shows the HomePod Products may meet the limitations of at
`least claim 1 of the ’451 patent. See Ex. 1016, Ex. B-1, 1–8. 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 HomePod 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 ’451 patent. Although we do not make a finding that
`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
`
`
`6 Plaintiff Koss Corporation’s Preliminary Infringement Contentions, Case No.
`6:20-cv-00655 (W.D. Tex.).
`7 Petitioner’s “Newsroom” press release (Oct. 13, 2020) (Ex. 2015); “9TO5Mac””
`(Jan. 24, 2018) (Ex. 2021); “Newsroom” press release (Jan. 23, 2018) (Ex. 2022).
`
`
`
`5
`
`
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`IPR2021-00600
`Patent 10,298,451 B1
`
`argue that the contentions are otherwise insufficient or that its advertising and
`promotional materials are not authentic and accurate. See Reply 2.
`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. 13–14. 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 ’451 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.
`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. 14.
`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 HomePod Products have been commercially successful.”
`Id. at 2 (see Discussion above (citing Exs. 2017, 2019, 2020)).
`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.
`
`However, we do not find the publicly available information purporting to
`summarize Petitioner’s sales a satisfactory substitute for the confidential sales
`
`
`
`6
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`
`
`
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`IPR2021-00600
`Patent 10,298,451 B1
`
`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 HomePod 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. 14. 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
`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 may be
`unnecessary if the parties stipulate to commercial sales of the HomePod Products.
`Petitioner alleges the request seeks “[s]ales revenue and quantity of units sold, by
`calendar quarter, for the Apple HomePods and HomePod Minis since the
`commercial introduction of those products[,]” including sales made before the ’451
`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.
`
`
`
`7
`
`
`
`
`
`IPR2021-00600
`Patent 10,298,451 B1
`
`As per our Order, we grant the Motion subject to conditions set forth below.
`Factor 5 weighs slightly against authorizing further discovery.
`
`ORDER
`
`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
`FURTHER ORDERED that the additional discovery shall be subject to the
`following conditions: 1) no sales information prior to the date the ’451 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.
`
`
`
`
`8
`
`
`
`IPR2021-00600
`
`Patent 10,298,451 B1
`FOR PETITIONER:
`W. Karl Renner
`Roberto Devoto
`Ryan Chowdhury
`FISH & RICHARDSON P.C.
`axf-ptab@fr.com
`devoto@fr.com
`rchowdhury@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
`
`
`
`9
`
`
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