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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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`APPLE INC.,
`Petitioner,
`
`v.
`
`KOSS CORPORATION,
`Patent Owner.
`_____________________
`
`CASE: IPR2021-00686
`U.S. PATENT NO. 10,491,982
`_____________________
`
`
`PATENT OWNER’S MOTION FOR ADDITIONAL DISCOVERY
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`IPR2021-00686
`Motion for Additional Discovery
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`TABLE OF CONTENTS
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`I.
`STATEMENT OF THE PRECISE RELIEF REQUESTED .......................... 1
`STATEMENT OF MATERIAL FACTS ........................................................ 3
`II.
`III. APPLICABLE LEGAL PRINCIPLES ........................................................... 5
`IV. THE REQUESTED ADDITIONAL DISCOVERY SATISFIES THE
`“INTERESTS OF JUSTICE” STANDARDS ................................................. 8
`A.
`The Requested Discovery is Based on More than a Possibility
`and Mere Allegation .............................................................................. 8
`1.
`Publicly Available Evidence Indicate that the AirPod Products
`are a Commercial Success .......................................................... 8
`There is a Presumed Nexus Between the AirPod Products and
`the Challenged Claims ................................................................ 9
`The Requested Discovery Does Not Seek Petitioner’s Litigation
`Positions or Their Underlying Basis ................................................... 12
`Patent Owner Cannot Generate Equivalent Information by
`Other Means ........................................................................................ 12
`The Discovery Requests are Easily Understandable ........................... 12
`The Discovery Requests are Narrowly Tailored and Not
`Burdensome ......................................................................................... 13
`CONCLUSION .............................................................................................. 14
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`2.
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`B.
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`C.
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`D.
`E.
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`V.
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`i
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`IPR2021-00686
`Motion for Additional Discovery
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`TABLE OF AUTHORITIES
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` Page(s)
`
`Cases
`In re Applied Materials, Inc.,
`692 F.3d 1289 (Fed. Cir. 2012) ............................................................................ 9
`Demaco Corp. v. F. Von Langsdorff Licensing Ltd.,
`851 F.2d 1387 (Fed. Cir. 1998) ...................................................................... 7, 10
`Ecolochem, Inc. v. S. Cal. Edison Co.,
`227 F.3d 1361 (Fed. Cir. 2000) ............................................................................ 6
`Fox Factory, Inc. v. SRAM, LLC,
`994 F.3d 1366 (Fed. Cir. 2019) ............................................................................ 7
`Garmin Int'l, Inc. v. Cuozzo Speed Techs. LLC,
`IPR2012-00001, Paper 26 (PTAB Mar. 5, 2013) ........................................passim
`Graham v. John Deere Co.,
`383 U.S. 1 (1966) .................................................................................................. 6
`In re Huang,
`100 F.3d 135 (Fed. Cir. 1996) .......................................................................... 7, 9
`Kingston Tech. Co., Inc. v. CATR Co., Ltd.,
`IPR2015-00559, Paper 18, 2-7 (PTAB June 10, 2015) ........................................ 2
`Merck & Co., Inc. v. Teva Pharm. USA, Inc.,
`395 F.3d 1364 (Fed. Cir. 2005) ...................................................................... 6, 11
`Microsoft Corp. v. Proxyconn, Inc.,
`IPR2012-00026 and IPR2013-00109, Paper 32 (PTAB Mar. 8,
`2013) ..................................................................................................................... 8
`Ormco Corp. v. Align Tech., Inc.,
`463 F.3d 1299 (Fed. Cir. 2006) ............................................................................ 7
`Pentec, Inc. v. Graphic Controls Corp.,
`776 F.2d 309 (Fed. Cir. 1985) .............................................................................. 6
`
`ii
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`IPR2021-00686
`Motion for Additional Discovery
`
`SightSound Techs., LLC v. Apple Inc.,
`809 F.3d 1307 (Fed. Cir. 2015) ............................................................................ 7
`Varian Med. Sys., Inc. v. William Beaumont Hospital,
`IPR2016-00162, Paper 69, 30-36 (PTAB May 4, 2017) ...................................... 2
`Statutes
`35 U.S.C. § 103 .......................................................................................................... 6
`35 U.S.C. § 316(a)(5) ................................................................................................. 5
`Other Authorities
`37 C.F.R. § 42.51(b)(2) .......................................................................................... 1, 5
`37 C.F.R. § 42.52(a)(2) .............................................................................................. 1
`
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`iii
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`IPR2021-00686
`Motion for Additional Discovery
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`EXHIBIT LISTING
`Description
`Exhibit
`KOSS-2001 Docket Report, Koss Corp. v. Apple Inc., Case No. 6:20-cv-00665-
`ADA (W.D. Tex.) (as of July 21, 2021)
`
`KOSS-2002
`
`Joint Claim Construction Statement, Koss Corp. v. Apple Inc., Case
`No. 6:20-cv-00665-ADA, Dkt. 68 (W.D. Tex. April 14, 2021)
`
`KOSS-2003 Claim Construction Order, Koss Corp. v. Apple Inc., Case No.
`6:20-cv-00665-ADA, Dkt. 83 (W.D. Tex. June 2, 2021)
`
`KOSS-2004
`
`Joint Motion to Amend Agreed Scheduling Order, Koss Corp. v.
`Apple Inc., Case No. 6:20-cv-00665-ADA, Dkt. 85 (W.D. Tex.
`June 15, 2021)
`
`KOSS-2005 Order Denying Defendant’s Motion to Transfer, Koss Corp. v.
`Apple Inc., Case No. 6:20-cv-00665-ADA, Dkt. 76 (W.D. Tex.
`April 22, 2021)
`
`KOSS-2006 Docket Report, Apple Inc. v. Koss Corp., Case No. 4:20-cv-
`05504-JST (N.D. Cal.) (as of July 15, 2021)
`
`KOSS-2007 Order Granting Motion to Transfer, Apple Inc. v. Koss Corp.,
`Case No. 4:20-cv-05504-JST, Dkt. 72 (N.D. Cal May 12, 2021)
`
`KOSS-2008 Joint Motion to Consolidate Cases, Koss Corp. v. Apple Inc., Case
`No. 6:20-cv-00665-ADA, Dkt. 84 (W.D. Tex. June 8, 2021)
`
`KOSS-2009 R. Davis, “Albright Says He’ll Very Rarely Put Cases on Hold for
`PTAB,” Law360, May 11, 2021
`(www.law360.com/articles/1381597/print?section=ip) (accessed
`July 9, 2021)
`
`KOSS-2010 Order Denying Motion to Stay, Kerr Machine Co. v. Vulcan
`Indus. Holdings, LLC et al., Case No. 6-20-cv-00200-ADA (W.D.
`Tex. Apr. 7, 2021)
`
`iv
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`IPR2021-00686
`Motion for Additional Discovery
`
`Description
`Exhibit
`KOSS-2011 Order Governing Proceedings - Patent Case, Judge Albright
`(W.D. Tex. Feb. 23, 2021)
`
`KOSS-2012 U.S. Pub. No. 2008/0194209 A1 to Haupt et al. (“Haupt-209”)
`
`KOSS-2013 Defendant Apple Inc.’s Invalidity Contentions, Koss Corp. v.
`Apple Inc., Case No. 6:20-cv-0066-ADA, Jan. 15, 2021 (W.D.
`Tex.)
`
`KOSS-2014 Petition, Apple Inc. v. Koss Corp., IPR2021-00255, November 25,
`2020
`
`KOSS-2015 Petition, Apple Inc. v. Koss Corp., IPR2021-00600, March 7, 2021
`
`KOSS-2016 S. Carlson et al., “Tallying Repetitive Inter Partes Review
`Challenges,”
`Law360,
`Sept.
`14,
`2018
`(www.law360.com/articles/1083158/tallying-repetitive-inter-
`partes-review-challenges) (accessed July 15, 2021)
`
`KOSS-2017 U.S. Pub. No. 2007/0037615 A1 to Glezerman
`
`KOSS-2018 U.S. Pub. No. 2005/0136839 to Seshadri et al. (“Seshadri-839”)
`
`KOSS-2019 Docket Report, Koss Corp. v. Skullcandy, Inc., Case No. 2:21-cv-
`00203-DBB-JCB (D. Utah) (as of July 21, 2021)
`
`KOSS-2020 Docket Report, Koss Corp. v. PEAG, LLC d/b/a JLAB Audio,
`Case No. 3:21-cv-01177-CAB-JLB (S.D. Cal.) (as of July 21,
`2021)
`
`KOSS-2021 Exhibit D6 to Defendant Apple Inc.’s Invalidity Contentions,
`Koss Corp. v. Apple Inc., Case No. 6:20-cv-0066-ADA, Jan. 15,
`2021 (W.D. Tex.)
`
`v
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`IPR2021-00686
`Motion for Additional Discovery
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`Description
`Exhibit
`KOSS-2022 Exhibit D8 to Defendant Apple Inc.’s Invalidity Contentions,
`Koss Corp. v. Apple Inc., Case No. 6:20-cv-0066-ADA, Jan. 15,
`2021 (W.D. Tex.)
`
`KOSS-2023 U.S. Patent 7,343,177 to Seshadri et al. (“Seshadri-177”)
`
`KOSS-2024 Pub. No. 2008/0298606 A1 to Johnson et al. (“Johnson”)
`
`KOSS-2025 U.S. Patent 8,190,203
`
`KOSS-2026 U.S. Patent 8,571,544
`
`KOSS-2027 U.S. Patent 8,655,420
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`KOSS-2028 U.S. Patent 9,049,502
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`KOSS-2029 U.S. Patent 9,438,987
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`KOSS-2030 U.S. Patent 9,497,535
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`KOSS-2031 U.S. Patent 9,729,959
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`KOSS-2032 U.S. Patent 9,986,325
`
`KOSS-2033 U.S. Patent 10,206,025
`
`vi
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`IPR2021-00686
`Motion for Additional Discovery
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`Exhibit
`KOSS-2034 U.S. Patent 10,368,155
`
`Description
`
`KOSS-2035 U.S. Patent 10,469,934
`
`KOSS-2036 Order, In re Apple Inc., Case No. 21-147, D.I. 25 (Fed. Cir. Aug.
`4, 2021)
`
`KOSS-2037 Apple Inc., Form 10-K, for fiscal year ended September 26, 2020
`
`KOSS-2038
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`“Apple AirPods are now available,” Apple Newsroom, Dec. 13,
`2016 (www.apple.com/newsroom/2016/12/apple-airpods-are-
`now-available/) (last accessed Sept. 8, 2021)
`
`KOSS-2039
`
`“AirPods, the world’s most popular wireless headphones, are
`getting even better,” Apple Newsroom, Mar. 20, 2019
`(www.apple.com/newsroom/2019/03/airpods-the-worlds-most-
`popular-wireless-headphones-are-getting-even-better/) (last
`accessed Sept. 8, 2021)
`
`KOSS-2040
`
`“Apple reveals new AirPods Pro, available October 30,” Apple
`Newsroom, Mar. 20, 2019
`(www.apple.com/newsroom/2019/10/apple-reveals-new-airpods-
`pro-available-october-30/) (last accessed Sept. 8, 2021)
`
`KOSS-2041 Patent Owner’s Request for Additional Discovery
`
`KOSS-2042 D. Curry, “Apple Statistics (2021),” Business of Apps, Aug. 16,
`2021 (www.businessofapps.com/data/apple-statistics/) (last
`accessed Aug. 18, 2021)
`
`KOSS-2043
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`“Connect your AirPods and AirPods Pro to your iPhone,” Apple
`Support, Jun. 23, 2021 (https://support.apple.com/en-
`us/HT207010) (last accessed Sept. 9, 2021)
`
`vii
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`IPR2021-00686
`Motion for Additional Discovery
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`Description
`Exhibit
`KOSS-2044 M. Potuck, “AirPods dominate wireless headphone market as
`global growth hits 90% for 2020,” 9to5Mac, Jan. 27, 2021
`(9to5mac.com/2021/01/27/airpods-dominate-wireless-headphone-
`market/) (last accessed Sept. 16, 2021)
`
`KOSS-2045
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`J. Cipriani, “Your AirPods just got a quiet update,” CNET,
`February 1, 2017 (www.cnet.com/tech/mobile/how-to-update-the-
`firmware-of-apples-airpods/) (last accessed September 8, 2021)
`
`KOSS-2046
`
`KOSS-2047
`
`J. Clover, “Apple Releases New Firmware Update for AirPods,”
`MacRumors, May 24, 2017
`(www.macrumors.com/2017/05/24/airpods-firmware-update/)
`(last accessed September 8, 2021)
`
`J. Clover, “Apple Releases New Firmware for AirPods 2 and
`AirPods Pro,” MacRumors, December 16, 2019
`(www.macrumors.com/2019/12/16/apple-releases-new-airpods-
`firmware/) (last accessed September 8, 2021)
`
`KOSS-2048 C. Miller, “Apple releases updated firmware version for AirPods
`and AirPods Pro,” 9to5Mac, April 28, 2021
`(9to5mac.com/2021/04/28/apple-releases-updated-firmware-
`version-for-airpods-and-airpods-pro/) (last accessed September 8,
`2021)
`
`KOSS-2049
`
`J. Clover, “Apple Updates AirPods 2 and AirPods Pro Firmware
`to Version 3A283,” MacRumors, September 14, 2020
`(www.macrumors.com/2020/09/14/apple-updates-airpods-
`firmware-3a283/) (last accessed September 15, 2021)
`
`KOSS-2050 Sept/Oct 2021 Email chain with Board re filing Motion
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`viii
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`IPR2021-00686
`Motion for Additional Discovery
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`Patent Owner, Koss Corporation, submits this Motion for Additional
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`Discovery under 37 C.F.R. §§ 42.51(b)(2) and 42.52(a)(2). The Board authorized
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`Patent Owner to file this motion on September 9, 2021.1
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`I.
`
`STATEMENT OF THE PRECISE RELIEF REQUESTED
`The
`requested discovery
`seeks
`information concerning
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`secondary
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`considerations of nonobviousness, namely the commercial success of Petitioner’s
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`AirPods (1st and 2nd generations) and AirPods Pro true wireless headphones
`
`(collectively “AirPod Products”), which embody the Challenged Claims (as well as
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`non-challenged claims). APPLE-1014, 1003-1077. The specific discovery sought
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`is limited to summary level sales from inception of the AirPod Products, the first of
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`which (AirPods 1st gen.) was released in December 2016. KOSS-2038.
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`Specifically, Patent Owner seeks only “[s]ales revenue and quantity of units sold, by
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`calendar quarter, for Apple AirPods (1st and 2nd generations) and Apple AirPods
`
`Pro since the commercial introduction of those products.” KOSS-2041.
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`1 Patent Owner attempted to file this motion on September 17, 2021 but experienced
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`problems. On October 6, 2021, the Board authorized Patent Owner to refile the
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`identical motion “with the applicable deadlines as if the motions were filed timely.”
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`KOSS-2050.
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`IPR2021-00686
`Motion for Additional Discovery
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`The interest of justice favors allowing the requested discovery. Garmin Int'l,
`
`Inc. v. Cuozzo Speed Techs. LLC, IPR2012-00001, Paper 26 (PTAB Mar. 5, 2013)
`
`(precedential). The requested discovery is limited and narrow in scope and seeks
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`specific information that is undeniably relevant and useful to refuting Petitioner’s
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`obviousness challenges. See Kingston Tech. Co., Inc. v. CATR Co., Ltd., IPR2015-
`
`00559, Paper 18, 2-7 (PTAB June 10, 2015) (granting additional discovery limited
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`to narrow categories of financial information concerning one product). Indeed, the
`
`Board has found that evidence of commercial success may be highly probative of
`
`nonobviousness. See Varian Med. Sys., Inc. v. William Beaumont Hospital,
`
`IPR2016-00162, Paper 69, 30-36 (PTAB May 4, 2017) (“Notwithstanding what the
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`teachings of the prior art would have suggested to one of ordinary skill in the art at
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`the time of the invention, the totality of the evidence submitted, including objective
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`evidence of nonobviousness, may lead to a conclusion that the challenged claims
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`would not have been obvious to one of ordinary skill in the art.”). While the
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`discovery Patent Owner seeks is uniquely in Petitioner’s possession, publicly
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`available information provides more than a threshold showing that Petitioner’s
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`AirPod Products have been commercially successful. Public information likewise
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`demonstrates that the AirPod Products embody the challenged claims.
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`Accordingly, Patent Owner’s motion for additional discovery should be
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`
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`granted. Patent Owner is willing to enter into an appropriate protective order to the
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`IPR2021-00686
`Motion for Additional Discovery
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`extent necessary to protect Petitioner’s confidential information.
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`II.
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`STATEMENT OF MATERIAL FACTS
`1.
`On July 22, 2020, Patent Owner filed a civil action in the U.S. District
`
`Court for the Western District of Texas, Case No. 6:20-cv-00665-ADA, against
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`Petitioner alleging infringement of, among other things, U.S. Patent 10,491,982
`
`(“’982 Patent”). KOSS-2001. Details about other matters involving the ’982 Patent
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`are provided at Paper 9 (Patent Owner Preliminary Response) at 6-7.
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`2.
`
`Petitioner filed its petition for inter partes review (IPR) on March 22,
`
`2021, challenging claims 1-5 and 14-20. Pet. at 1. The Board has not yet ruled on
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`institution.
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`3.
`
`The ’982 Patent includes twenty (20) claims, of which claim 1 is the
`
`sole independent claim. Claim 1 claims a system that comprises headphones and a
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`mobile, digital audio player (“DAP”). The headphones comprise two (“first” and
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`“second”) earphones that are not physically connected. Each earphone comprises a
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`body portion and an elongated portion. The body portion comprises a wireless
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`communication circuit, a processor circuit, an ear canal portion, and at least one
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`acoustic transducer. The elongated portion “extends away from the body portion
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`such that the elongated body portion extends downwardly when the ear canal portion
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`is inserted in the ear of the user ….” The earphones also comprise a microphone, an
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`IPR2021-00686
`Motion for Additional Discovery
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`antenna and a rechargeable power source. The DAP “stores digital audio content
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`and comprises a wireless transceiver for transmitting digital audio content to the
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`headphones via Bluetooth wireless communication links….” Each earphone
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`“receives and plays audio content received wirelessly via the Bluetooth wireless
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`communication links from” the mobile DAP. APPLE-1001, 18:7-40.
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`4.
`
`Petitioner released its AirPods (1st gen.) true wireless headphones in
`
`December 2016 with an initial sales price of $159. KOSS-2038, 1-3. Petitioner
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`released the 2nd generation AirPods in March 2019 and the AirPods Pro in October
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`2019. KOSS-2039; KOSS-2040. The 2nd-generation AirPods are different from
`
`the 1st-generation in that the 2nd generation includes a different Apple-designed
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`chip (H1 chip) that “delivers performance efficiencies, faster connect times, more
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`talk time and the convenience of hands-free ‘Hey Siri.’” KOSS-2039, 2. The
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`AirPods Pro add “Active Noise Cancellation and superior, immersive sound in an
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`all-new lightweight, in-ear design.” KOSS-2040, 2.
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`5.
`
`Public sources estimate that Petitioner sold: 15 million AirPods in
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`2017; 35 million AirPods in 2018; 60 million AirPods in 2019; and 114 million
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`AirPods in 2020. KOSS-2042, 15.
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`6.
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` Petitioner does not release sales information for the AirPod Products.
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`- 4 -
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`Instead, its SEC filings include sales figures for a broader category of products
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`IPR2021-00686
`Motion for Additional Discovery
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`(“Wearables, Home and Accessories”). KOSS-2037, 24.
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`7.
`
`The Challenged Claims have a priority date of at least April 7, 2009.
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`APPLE-1001, 2 (filing date of PCT/US2009/039754). Thus, the AirPods were
`
`released more than seven years after the earliest possible priority date of the ’982
`
`Patent.
`
`8.
`
`The AirPod Products, when paired with a mobile DAP (e.g., a
`
`smartphone, such as an iPhone) as part of their normal operating mode, possess all
`
`of the elements of claim 1 of the ’982 Patent. APPLE-1014, 1003-1077. In fact, the
`
`record evidence shows that the AirPods, in conjunction with a paired iPhone, possess
`
`all the elements of all the Challenged Claims. Id.
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`9.
`
`The AirPod Products are designed to be operated with a paired, mobile
`
`DAP. Petitioner’s instructions for how to use the AirPod Products implore the user
`
`to “make your that you have an iPhone with the latest version of iOS.” KOSS-2043,
`
`1.
`
`III. APPLICABLE LEGAL PRINCIPLES
`Additional discovery must be “necessary in the interest of justice.” 35 U.S.C.
`
`§ 316(a)(5); 37 C.F.R. § 42.51(b)(2). In determining whether additional discovery
`
`in an inter partes review proceeding is necessary in the interest of justice, the Board
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`- 5 -
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`
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`considers the following factors: (1) the request is based on more than a mere
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`IPR2021-00686
`Motion for Additional Discovery
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`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 (collectively, “Garmin Factors”). Garmin, Paper 26 at 6-7.
`
`Patent Owner’s request for additional discovery seeks evidence for proving
`
`commercial success of the Challenged Claims, which is relevant for assessing
`
`obviousness of the Challenged Claims under 35 U.S.C. § 103. Graham v. John
`
`Deere Co., 383 U.S. 1, 17-18 (1966). “Commercial success is relevant because the
`
`law presumes an idea would successfully have been brought to market sooner, in
`
`response to market forces, had the idea been obvious to persons skilled in the art.”
`
`Merck & Co., Inc. v. Teva Pharm. USA, Inc., 395 F.3d 1364, 1376 (Fed. Cir. 2005).
`
`Evidence of objective indicia of nonobviousness, such as commercial success, must
`
`be considered if present. Pentec, Inc. v. Graphic Controls Corp., 776 F.2d 309, 315
`
`(Fed. Cir. 1985).
`
`A patentee can show commercial success of a claimed invention by showing
`
`significant sales (including by the accused infringer) in a relevant market. See
`
`Ecolochem, Inc. v. S. Cal. Edison Co., 227 F.3d 1361, 1377 (Fed. Cir. 2000).
`
`Evidence of commercial success is significant where there is a nexus between the
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`- 6 -
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`
`
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`claimed invention and the commercial success. Ormco Corp. v. Align Tech., Inc.,
`
`IPR2021-00686
`Motion for Additional Discovery
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`463 F.3d 1299, 1311-12 (Fed. Cir. 2006). “In order to establish a proper nexus, the
`
`patent owner must offer proof that 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.” In re
`
`Huang, 100 F.3d 135, 140 (Fed. Cir. 1996). Nevertheless, Patent Owner is entitled
`
`to a rebuttable presumption of nexus upon a showing that the commercially
`
`successful product “is the invention disclosed and claimed.” Demaco Corp. v. F.
`
`Von Langsdorff Licensing Ltd., 851 F.2d 1387, 1392 (Fed. Cir. 1998); see also
`
`SightSound Techs., LLC v. Apple Inc., 809 F.3d 1307, 1319 (Fed. Cir. 2015) (“If a
`
`product both embodies the claimed features and is coextensive with the claims at
`
`issue,” a nexus between the evidence of commercial success and the claimed
`
`invention is presumed). Even where a presumption of a nexus is not appropriate,
`
`patent owner “is still afforded an opportunity to prove nexus by showing that the
`
`evidence of secondary considerations is the direct result of the unique characteristics
`
`of the claimed invention.” Fox Factory, Inc. v. SRAM, LLC, 994 F.3d 1366, 1373-
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`74 (Fed. Cir. 2019).
`
`The interest of justice standard for granting additional discovery requires a
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`showing of relevance by the party seeking the additional discovery before the request
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`- 7 -
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`
`
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`is granted. Microsoft Corp. v. Proxyconn, Inc., IPR2012-00026 and IPR2013-
`
`IPR2021-00686
`Motion for Additional Discovery
`
`00109, Paper 32, 5 (PTAB Mar. 8, 2013). Conclusive evidence of nexus, however,
`
`is not required to grant a motion for additional discovery. Instead, “some showing
`
`of relevance is necessary.” Id.
`
`IV. THE REQUESTED ADDITIONAL DISCOVERY SATISFIES THE
`“INTERESTS OF JUSTICE” STANDARDS
`A. The Requested Discovery is Based on More than a Possibility and
`Mere Allegation
`The first Garmin factor considers whether there exists more than a “mere
`
`possibility” or a “mere allegation that something useful [to the proceeding] will be
`
`found.” Garmin, Paper 26 at 6. Here, there is more than a mere allegation that
`
`something useful will be found because publically available evidence shows that
`
`Petitioner has exploited the Challenged Claims through sales of its AirPod Products
`
`and that a nexus should be presumed between the AirPod Products and the
`
`Challenged Claims.
`
`1.
`
`Publicly Available Evidence Indicate that the AirPod Products
`are a Commercial Success
`Publicly available information shows that the AirPod Products have
`
`experienced significant sales. Estimated sales for the AirPods alone from 2017-2020
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`are 224 million units. KOSS-2042, 15. At $159 USD apiece, that amounts to more
`
`that $35 billion in sales in four years. This estimate is exceedingly great because the
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`AirPod Products dominate the market for “true wireless” stereo headphones. KOSS-
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`IPR2021-00686
`Motion for Additional Discovery
`
`2044, 1.
`
`The market shipped over 300 million “true wireless” stereo headsets in 2020,
`
`with AirPod Products constituting almost 50% of those shipments. Id., 2. The next
`
`largest player in the market, Xiaomi, has only captured about a fifth of the market
`
`share possessed by the AirPod Products. Id. In other words, evidence that the
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`AirPod Products have achieved commercial success is not limited to sales data alone,
`
`but is also based on the AirPod Products’ domination of the global market for “true
`
`wireless” stereo headphones. See e.g., In re Applied Materials, Inc., 692 F.3d 1289,
`
`1300 (Fed. Cir. 2012); In re Huang, 100 F.3d 135, 140 (Fed. Cir. 1996).
`
`2.
`
`There is a Presumed Nexus Between the AirPod Products and
`the Challenged Claims
`There is a clear nexus between the AirPod Products and the Challenged
`
`Claims. APPLE-1014, 1003-1077. The AirPod Products are essentially the
`
`“headphones” of claim 1 of the ’982 Patent because the AirPod Products comprise
`
`two separate, wireless earphones, where each earphone comprises the body portion,
`
`the elongated portion, the microphone, the antenna and the rechargeable power
`
`source of claim 1. Id. Although the AirPod Products are sold separately from the
`
`iPhone (e.g., the claimed mobile DAP), the AirPod Products are specifically
`
`designed and marketed to work with a smartphone.
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`IPR2021-00686
`Motion for Additional Discovery
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`To set up the AirPod Products, Petitioner expressly instructs users to “make
`
`sure that you have an iPhone …” and alternatively provides links to “set up your
`
`AirPods” with other types of mobile DAPs, such as “a Mac or a non-Apple device,
`
`like an Android phone ….” KOSS-2043, 1; see also APPLE-1014, 1014. To that
`
`end, Patent Owner is not asserting that sales of iPhones or other types of mobile
`
`DAPs are relevant to the nonobviousness of the Challenged Claims. Instead, Patent
`
`Owner merely intends to rely on Petitioner’s sales of “headphones” (e.g., the AirPod
`
`Products) that must work with an iPhone or another mobile DAP as being relevant
`
`to the nonobviousness of the Challenged Claims. See Demaco Corp. v. F. Von
`
`Langsdorff Licensing Ltd., 851 F.2d 1387, 1392 (Fed. Cir. 1988) (“When the thing
`
`that is commercially successful is not coextensive with the patented invention … the
`
`patentee must show prima facie a legally sufficient relationship between that which
`
`is patented and that which is sold.”).
`
`The nexus only increases with the challenged dependent claims because the
`
`AirPod Products are even more coextensive with the claimed features. For example:
`
` Relevant to claim 2, Petitioner sells the AirPod Products with a wireless
`
`charging case (e.g., claimed “docking station” for charging the wireless
`
`earphones). APPLE-1014, 1015;
`
` Relevant to claim 3, the AirPods can play audio stored on the mobile
`
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`IPR2021-00686
`Motion for Additional Discovery
`
`DAP (e.g., iPhone) (“first operational mode”) and audio streamed from
`
`a remote network server (“second operational mode”). APPLE-1014,
`
`1016-1017;
`
` Relevant to claims 4 and 5, by either double tapping an AirPod or
`
`enunciating “Hey Siri,” the AirPods can initiate transmission of, and
`
`receive a response from, a query to a remote network server (e.g.,
`
`activation of a user control, initiating transmission of a request to a
`
`remote network server, and a first earphone is configured to receive a
`
`response to the request). APPLE-1014, 1018-1019; and
`
` Relevant to claim 14, the processor circuits of the AirPods receive
`
`firmware updates. APPLE-1014, 1033; KOSS-2045 to KOSS-2049.
`
`Finally, the fact that Petitioner could introduce products more than seven
`
`years after the latest possible priority date for the ’982 Patent and still reap
`
`extraordinary revenue emphasizes the fact that sales of those products is strong
`
`evidence of the nonobvious of the Challenged Claims in 2009. The “law presumes
`
`an idea would successfully have been brought to market sooner, in response to
`
`market forces, had the idea been obvious to persons skilled in the art.” Merck, 395
`
`F.3d at 1376.
`
`Thus, Patent Owner’s narrowly tailored discovery request is based on more
`
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`- 11 -
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`
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`than a possibility or mere allegation. The requested information is also material to
`
`IPR2021-00686
`Motion for Additional Discovery
`
`assessing the obviousness of the Challenged Claims.
`
`B.
`
`The Requested Discovery Does Not Seek Petitioner’s Litigation
`Positions or Their Underlying Basis
`Garmin factor 2 provides that requesting an opposing party’s “litigation
`
`positions and the underlying basis for those positions is not necessary in the interest
`
`of justice.” Garmin, Paper 26 at 13. Patent Owner’s discovery requests narrowly
`
`seek only sales information and, hence, do not seek Petitioner’s underlying litigation
`
`positions or bases for them.
`
`C.
`
`Patent Owner Cannot Generate Equivalent Information by Other
`Means
`Garmin factor 3 relates to whether the requested documents are obtainable by
`
`Patent Owner through other means. Patent Owner cannot otherwise obtain this
`
`information because it is exclusively within the control of Petitioner. KOSS-2037,
`
`24. Patent Owner cannot generate or otherwise obtain Petitioner’s confidential sales
`
`information.
`
`D. The Discovery Requests are Easily Understandable
`Garmin factor 4 relates to whether the requested discovery is easily
`
`understandable.
`
` Here,
`
`the requested discovery’s
`
`instructions are easily
`
`understandable, and the requests are clearly limited to sale information for a limited
`
`number of specifically identified products (namely, AirPods and AirPod Pros) for a
`
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`- 12 -
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`
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`limited, specified time period (namely, since release of the products, the first of
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`IPR2021-00686
`Motion for Additional Discovery
`
`which was in December 2016).
`
`To the extent the Board deems the instructions not easily understandable, it
`
`may modify or direct Patent Owner to modify them accordingly.
`
`E.
`
`The Discovery Requests are Narrowly Tailored and Not
`Burdensome
`Garmin factor 5 relates to the degree of burden the requests place on
`
`Petitioner. Here, the requested discovery is limited to one request, which is for the
`
`sales data for three related products (AirPods 1st and 2nd generations, and AirPods
`
`Pro), for a limited, specified time period (namely, since release of the products, the
`
`first of which was in December 2016). The request is “sensible and responsibly
`
`tailored according to a genuine need” (see Garmin, Paper 26 at 14-16) because the
`
`significant sales of these products alone will demonstrate the commercial success of
`
`the Challenged Claims. It is narrowly tailored because it does not seek other types
`
`of evidence pertinent to secondary considerations for obviousness, such as
`
`Petitioner’s marketing materials and positive feedback that Petitioner has received
`
`about the AirPod Products.
`
`Petitioner’s compliance with the requested discovery should not require
`
`significant expenditure of resources or place a significant burden on meeting
`
`deadlines in this proceeding. Patent Owner expects that Petitioner maintains the
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`- 13 -
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`requested information in Petitioner’s normal course of business. Nor will
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`IPR2021-00686
`Motion for Additional Discovery
`
`Petitioner’s compliance with the requests affect the trial schedule. The Board has
`
`not yet decided on institution. To the extent the Board deems the discovery
`
`burdensome, it may modify or direct Patent Owner to modify them accordingly.
`
`V. CONCLUSION
`For the foregoing reasons, Patent Owner respectfully requests that the Board
`
`grant Patent Owner’s requested additional discovery contained in Ex. 2041 and
`
`require Petitioner to produce the responsive information within fourteen (14) days
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`of its order.
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`
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`Dated: October 7, 2021
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`
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`
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`Respectfully submitted,
`
`By:
`
`
`
`
`/Mark G. Knedeisen/
`Mark G. Knedeisen (Reg. No. 42,747)
`K&L Gates Center, 210 Sixth Avenue
`Pittsburgh, Pennsylvania 15222
`Tel.: (412) 355-6342
`mark.knedeisen@klgates.com
`
`Counsel for Patent Owner
`
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`- 14 -
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`IPR2021-00686
`Motion for Additional Discovery
`
`CERTIFICATION OF SERVICE
`
`I hereby certify that on October 7, 2021, I caused a true and correct copy of
`
`the foregoing to be served on the following counsel for Petitioner by electronic mail
`
`to the following email address:
`
`
`
`
`
`
`
`W. Karl Renner
`Roberto Devoto
`Fish & Richardson P.C.
`3200 RBC Plaza
`60 South Sixth Street
`Minneapolis, MN 55402
`Email: ipr50095-0019ip2@fr.com
`Email: ptabinbound@fr.com
`Email: axf-ptab@fr.com
`Email: devoto@fr.com
`
`By:
`
`
`
`
`
`/Mark G. Knedeisen/
`Mark G. Knedeisen (Reg. No. 42,747)
`K&L Gates Center, 210 Sixth Avenue
`Pittsburgh, Pennsylvania 15222
`Tel.: (412) 355-6342
`mark.knedeisen@klgates.com
`
`Counsel for Patent Owner
`
`
`
`
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