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`Paper No. 10
`May 10, 2021
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`XILINX, LLC,
`Petitioner,
`v.
`FG SRC LLC,
`Patent Owner.
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`IPR2021-00633
`Patent No. 7,149,867
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`PATENT OWNER FG SRC LLC’S
`SURREPLY IN SUPPORT OF ITS
`OPPOSITION TO PETITIONER’S MOTION FOR JOINDER
`AND REPLY IN SUPPORT OF ITS
`MOTION FOR ADDITIONAL DISCOVERY
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`Petitioner’s Reply (Paper 9, “Reply”) disingenuously dismisses its
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`statutory obligations regarding the disclosure of all real parties in interest: “If
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`Patent Owner raises that ineffectual issue in the Intel IPR, it will be because
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`Patent Owner chose to do so, not because joinder imposed the issue.” Reply at
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`1. Petitioner simply ignores 35 U.S.C.A. §312(a)(2), which requires that for
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`every IPR, “the petition identifies all real parties in interest.” It is Patent
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`Owner’s obligation as the adverse party to point out Petitioner’s shortcomings,
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`particularly, when Petitioner explicitly admits that “Petitioner and Amazon
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`have coordinated” on certain matters. Reply at 4. Petitioner then proceeds to
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`discuss its relationship with Amazon over the next nine pages of its brief. None
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`of this discussion is relevant to the Intel IPR. Petitioner’s suggestion that it
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`would be able to join the Intel IPR as a “silent understudy” is plainly legal
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`fiction.
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`1. WHETHER AMAZON IS AN RPI IS A SINE QUA NON
`THRESHOLD ISSUE.
`Petitioner ignores the most basic aspect of joinder—that it requires a
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`proper second petition which itself warrants the institution of an inter partes
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`review: “the Director, in his or her discretion, may join as a party to [an already
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`instituted IPR] any person who properly files a petition under section 311 that
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`. . . warrants the institution of an inter partes review under section 314.” 35
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`U.S.C.A. §315(c). Although Petitioner is correct in stating that a time-barred
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`party can still be joined to an existing IPR (Reply at 1), that does not relieve
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`the Petitioner from its obligation to satisfy the RPI disclosure requirement of
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`§312. 35 U.S.C.A. §312(b)(2). Failure to meet this requirement can itself be a
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`reason to deny institution of a petition. See, e.g., Worlds Inc. v. Bungie, Inc.,
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`903 F.3d 1237, 1240 (Fed. Cir. 2018) (“Under 35 U.S.C. §312(a)(2), an IPR
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`petition ‘may be considered only if ... the petition identifies all real parties in
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`interest.’”); ARRIS Int’l. PLC v. Chanbond, LLC, (Fed. Cir. Dec. 27, 2018)
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`(accepting PTAB decision denying institution based upon a failure to disclose
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`real parties in interest.). “Correctly identifying all real parties in interest with
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`respect to each IPR petition is important, as the determination may impact
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`whether a petition may be instituted.” Id. Petitioner’s failure to identify
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`Amazon as an RPI in itself precludes its Petition from being instituted which
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`renders its Motion to Join moot.
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`2. THE FACTS STRONGLY SUPPORT THAT AMAZON IS AN
`RPI OF XILINX, AND THAT THEY ARE OPERATING IN
`CONCERT.
`First, Petitioner admits that the Amazon suit was filed on Oct. 18, 2017
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`and that Petitioner was aware of and even participated in that suit, and that it
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`even produced relevant technical documents. Reply at 2. Second, Petitioner
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`admits that “Patent Owner sued Petitioner on a new theory that Petitioner’s
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`FPGA products, separate and apart from their unique deployment by Amazon”
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`infringe the ’867 patent on April 30, 2020. Id. Petitioner, thus, admits two
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`relevant points: (1) Patent Owner originally sued Amazon based on the unique
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`deployment of Petitioner’s products by Amazon, and (2) when it became
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`apparent that Petitioner’s products infringed the asserted patent “separate and
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`apart from their unique deployment by Amazon,” Patent Owner timely initiated
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`a separate suit against Petitioner. Petitioner effectively admits that Patent
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`Owner proceeded in good faith against both Amazon and Xilinx on separate
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`infringement theories as soon as it became aware of their infringement.
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`Petitioner’s derogatory attorney argument that “Patent Owner was really just
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`lying in wait” is unsupported conjecture and—even if true—would be
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`irrelevant to Xilinx’s obligation to disclose all RPIs. Similarly, Petitioner’s
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`attorney argument that “Patent Owner purposefully withheld its infringement
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`allegations against Petitioner until after Amazon’s time bar” hardly deserves a
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`response as it is belied by the fact that both Amazon and Xilinx actually filed
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`timely IPRs, each strategically challenging only certain non-overlapping sets
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`of Patent Owner’s patents.
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`Petitioner even goes so far as to argue that “Patent Owner’s surprise suit
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`is why Petitioner did not initiate an IPR sooner.” Reply at 2. This is a flat-out
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`misdirection by omission. Petitioner did not initiate an IPR against this patent
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`sooner, but it did initiate an IPR against U. S. Patent No. 9,153,311 (“’311
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`patent”), even though it had not been accused of infringement. The question as
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`to “why” is answered by the fact that its RPI Amazon had been sued. Both the
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`’867 patent and the ’311 patent were asserted against Xilinx’s RPIs
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`Amazon.com, Inc. and Amazon Web Services, Inc. (“Amazon”) in SRC Labs,
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`LLC et al., v. Amazon Web Services, Inc., et al., No. 1:17-cv-01227 (E.D.
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`Virginia), filed Oct. 18, 2017; SRC Labs, LLC et al., v. Amazon Web Services,
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`Inc., et al., No. 2:18-cv-00317 (W.D. Washington), filed Feb. 26, 2018; and
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`SRC Labs, LLC et al. v. Amazon Web Services, Inc. et al., Case No. 2:17-00547
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`(E.D. Virginia), filed Oct. 18, 2017.1 In each of these cases, Patent Owner
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`alleged that Amazon’s products infringe both the ’867 patent and the ’311
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`patent based on its usage of Xilinx FPGA products.
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`In response, Xilinx has closely cooperated with Amazon in its defense.
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`In a divide-and-conquer strategy, Xilinx challenged the ’311 patent in
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`IPR2018-01395 and Amazon challenged the ’867 patent in IPR2019-00103.
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`Both petitions were denied (IPR2018-01395, Paper 17 and IPR2019-00103,
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`Paper 22). This time around, the Xilinx/Amazon team is challenging the ’867
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`patent in Xilinx’s name. Allowing such gamesmanship will certainly
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`encourage similarly situated defendants to cooperate in a likewise manner.
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`1 Case No. 2-17-00547 was consolidated with Case No. 1-17-cv-01227, and the
`consolidated case was transferred to the Western District of Washington in Case No.
`2:18-cv-00317 on February 26, 2018.
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`Petitioner’s representations regarding its relationship and interactions
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`with Amazon in its reply themselves are carefully crafted fool’s gold. For
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`example, Petitioner states that “Petitioner did not communicate, much less
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`coordinate, with Amazon in any way regarding the filing of this IPR or
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`regarding joinder.” Reply at 2. Petitioner carefully did not address its
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`cooperation with Amazon in the Amazon suit or their prior divide-and-conquer
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`IPRs. Patent Owner is entitled to discovery to expose the true nature of Xilinx’s
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`relationship with Amazon beyond the carefully crafted self-serving statements
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`in its reply.
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`Petitioner further argues that a “critical puzzle piece[]” is missing—
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`referring to the “requirement” that an RPI relationship ought only be found if
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`the “petitioner ‘can be said to be representing [the non-party’s] interest.’”
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`Reply at 3. That “missing piece” is Xilinx’s IPR of the ’311 patent before it
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`had been sued. Why else would it willingly take on the substantial cost of an
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`IPR when it had not been accused of infringement, and according to Xilinx, the
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`Amazon suit related only to the “unique deployment [of Xilinx’s products] by
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`Amazon” and was only “based on the custom manner in which Amazon
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`chooses to configure Petitioner’s products?” Reply at 2. Petitioner’s actions
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`at the PTAB are flatly inconsistent with a party representing only its own
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`interests.
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`5
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`Petitioner’s explanation for challenging only the ’311 patent (while
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`leaving Amazon to challenge only the ’867 patent) is dubious. Petitioner
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`admits that 5 patents were asserted against Amazon but offers only that maybe
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`it challenged the ’311 because “[f]or example, Petitioner was aware of prior art
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`describing its FPGA products and construed that art as invalidating the ’311
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`Patent. This fact made petitioning for IPR of the ’311 Patent efficient and
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`inexpensive.” This fact is called into question by two observations. First, the
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`IPR was not instituted—indicating that the prior art was not as strong as
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`Petitioner says it believed. Second, Xilinx and Amazon, both sophisticated
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`litigants, were faced with the same 5 patents and coincidentally found prior art
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`that just so happened to facilitate a divide-and-conquer strategy.
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`Petitioner further all but admits that some kind of agreement exists
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`between itself and Amazon and does not deny that there is an indemnity
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`obligation. Reply at 4. Instead, Petitioner strains to argue that an indemnity
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`obligation is not the driving factor motivating Petitioner’s actions. Id. This is
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`an easy argument to make when the adverse party and the Board are not looking
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`at the same documents and communications—which are solely in the
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`possession of Petitioner and Amazon. Indeed, Petitioner is under an obligation
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`to produce these potentially adverse materials and has failed to do so. 37 C.F.R.
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`§11.303. Petitioner’s carefully crafted statement that “Petitioner has not taken
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`any steps to indemnify Amazon nor indicated to Amazon that it would do so”
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`again does not address the extent to which an indemnity obligation actually
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`exists. Reply at 5.
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`Finally, Petitioner explicitly admits that “Petitioner and Amazon have
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`coordinated” on certain matters. Patent Owner and the Board are entitled to
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`probe the nature and extent of this coordinated effort.
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`Determining an RPI relationship requires “a flexible approach... with an
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`eye toward determining whether the non-party is a clear beneficiary that has a
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`preexisting, established relationship with the petitioner.” Applications in
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`Internet Time, LLC v. RPX Corp., 897 F.3d 1336, 1351 (Fed. Cir. 2018)
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`(“AIT”); Ventex Co., Ltd. v. Columbia Sportswear N.A. Inc., IPR2017-00651,
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`Paper 148 at 6 (PTAB Jan. 24, 2019). Close analysis of the interconnected
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`relationship between Amazon and Xilinx and the coordinated approach they
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`have taken in the past is required. Amazon and Xilinx’s coordinated behavior
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`supports—and Xilinx did not deny—the existence of a substantive legal
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`relationship including an indemnity obligation. Through Amazon’s and
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`Xilinx’s coordinated efforts, Xilinx is attempting to effectively assume the role
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`of non-party Amazon as a proxy to relitigate the same issues Amazon did and
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`could have previously raised. See RPX Corp. v. Applications in Internet Time,
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`LLC, IPR2015-0170, Paper 128 at 30-38 (PTAB Oct. 2, 2020).
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`3. ADDITIONAL DISCOVERY ON THE RPI ISSUE IS JUSTIFIED.
`Patent Owner’s narrowly tailored discovery request set forth in its
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`opposition meets the Garmin factors and will aid in demonstrating that
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`institution of this IPR is barred.
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`Regarding the first factor, the available circumstantial evidence strongly
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`supports that Amazon and Xilinx have a supplier contract which likely includes
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`indemnity provisions concerning the products accused of infringement in the
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`Amazon litigations. Notably, Xilinx does not deny this. Further, Amazon and
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`Xilinx took an uncanny coordinated approach which included Xilinx filing for
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`an IPR on behalf of Amazon before Xilinx was ever sued on a different
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`infringement theory. Xilinx’s explanation that “it knew of prior art” for just
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`the ’311 patent, while Amazon knew of prior art for just the ’867 patent is
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`implausible. Reply at 9. These facts fully support the minimal burden imposed
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`by production of the relevant supplier agreement(s) and the requested
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`communications between Amazon and Xilinx and supports that these requests
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`are “necessary in the interest of justice.” 35 U.S.C. §316(a)(5).
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`The supplier contract between Amazon and Xilinx alone meets the “pre-
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`existing substantive legal relationships between the parties” standard in the
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`Taylor Factors, which under Ventex is sufficient to establish a privity
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`relationship. Xilinx should not be permitted to deny the nature of its
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`relationship with Amazon without disclosing its supplier agreement[s] and
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`related communications to Patent Owner and the Board. The specific requested
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`agreements and communications between Amazon and Xilinx will go to the
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`extent of Xilinx’s and Amazon’s coordinated efforts.
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`Petitioner further argues that Patent Owner already has the discovery it
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`seeks because of “Patent Owner’s access to Amazon’s and Petitioner’s
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`documents in more expansive district court discovery, which Patent Owner
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`does not deny.” Reply at 10. However, Patent Owner is obviously prevented
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`from using that discovery in this proceeding due to the applicable protective
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`orders.
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`To the extent the Board shares Petitioner’s concern that the second
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`request for discovery regarding relevant communications between Amazon and
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`Xilinx in the relevant timeframe is overly burdensome, Patent Owner is willing
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`to work with Petitioner to further revise the request to arrive at a reasonable
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`dataset—possibly through the use of keyword searches of ESI. Petitioner’s
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`argument that “[t]his is plainly an attempt to gather infringement-related
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`documents for use in the district court case” is a nonsensical red herring because
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`the request does not seek technical documents.
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`Finally, Petitioner’s concerns regarding the scope of request (3) all but
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`explicitly admit that some kind of indemnification agreements exist. If there
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`are truly so many such agreements that the scope of the request becomes
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`problematic, Patent Owner is again willing to work with Petitioner to narrow
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`the request to only the relevant agreements.
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`4. CONCLUSION
`Xilinx’s Motion for Joinder should be denied for failure to disclose
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`Amazon as an RPI. To the extent the Board requires additional evidence of the
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`full nature of the relationship between Xilinx and Amazon, Patent Owner’s
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`Motion for Additional Discovery should be granted.
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`Date: May 10, 2021
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`Respectfully submitted,
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`/Jay P. Kesan /
`Jay P. Kesan, Reg. No. 37,488
`jkesan@dimuro.com
`DIMUROGINSBERG, PC
` DGKEYIP GROUP
`1750 Tyson’s Blvd., Suite 1500
`Tysons Corner, VA 22102
`Telephone: (703) 289-5118
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`/Ari Rafilson /
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`Ari Rafilson, Reg. No. 58,693
`arafilson@shorechan.com
`SHORE CHAN, LLP
`901 Main Street, Suite 3300
`Dallas, TX 75202
`Telephone: (214) 593-9110
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`Attorneys for Patent Owner
`FG SRC LLC
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`CERTIFICATE OF SERVICE
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`Pursuant to 37 C.F.R. §§42.6(e)(4) and 42.25(b), the undersigned certifies that
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`on May 10, 2021, a complete copy of Patent Owner FG SRC LLC’s Surreply in
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`Support of Its Opposition to Petitioner’s Motion for Joinder and Reply in Support
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`of Its Motion for Additional Discovery was filed electronically through the Patent
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`Trial and Appeal Board’s PTABE2E System and provided, via electronic service, to
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`the Petitioner by serving the correspondence address of record as follows:
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`David Hoffman
`Kenneth W. Darby
`Fish & Richardson P.C.
`3200 RBC Plaza, 60 South Sixth Street
`Minneapolis, MN 55402
`hoffman@fr.com
`kdarby@fr.com
`IPR42653-0026IP1@fr.com
`PTABInbound@fr.com
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`Dated: May 10, 2021
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`/Jay P. Kesan /
`Jay P. Kesan
`Reg. No. 37,488
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