Paper No.
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` Filed: October 7, 2016
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`
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`__________________
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`__________________
`IBG LLC; INTERACTIVE BROKERS LLC;
`TRADESTATION GROUP, INC.; TRADESTATION SECURITIES, INC.;
`TRADESTATION TECHNOLOGIES, INC.; and
`IBFX, INC.
`
`Petitioners
`v.
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`
`
`
`
`
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`
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`
`
` TRADING TECHNOLOGIES INTERNATIONAL, INC.
`
`Patent Owner
`_________________
`Case CBM2015-00179
`U.S. Patent 7,533,056
`_________________
`
`
`
`PATENT OWNER’S OPPOSITION TO MOTION TO EXCLUDE
`
`
`
`
` Filed: October 7, 2016
`
`
`
`
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`__________________
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`__________________
`IBG LLC; INTERACTIVE BROKERS LLC;
`TRADESTATION GROUP, INC.; TRADESTATION SECURITIES, INC.;
`TRADESTATION TECHNOLOGIES, INC.; and
`IBFX, INC.
`
`Petitioners
`v.
`
`
`
`
`
`
`
`
`
`
`
` TRADING TECHNOLOGIES INTERNATIONAL, INC.
`
`Patent Owner
`_________________
`Case CBM2015-00179
`U.S. Patent 7,533,056
`_________________
`
`
`
`PATENT OWNER’S OPPOSITION TO MOTION TO EXCLUDE
`
`
`
`
`CBM2015-00179
`U.S. Patent 7,533,056
`
`Table of Contents
`I. Preliminary Statement ..................................................................................... 1
`II. Standard ............................................................................................................ 2
`III. TT’s Testimonial Evidence From District Court Is Admissible (Exhibit
`2327). ......................................................................................................................... 2
`A. Nothing justifies treating TT’s testimonial evidence from district
`court differently from Petitioners’ testimonial evidence from district
`court (i.e., the 2005 Kawashima deposition transcript). ............................... 3
`B. TT’s testimonial evidence from district court is admissible under
`Federal Rule of Evidence 807. ......................................................................... 4
`IV. TT’s Documentary Evidence From District Court Is Admissible (Exhibits
`2300, 2301, 2304-2316, 2318-2324, 2326, and 2328-2329)..................................... 8
`A. The exhibits are authentic (Exhibits 2300, 2301, 2304-2316, 2318-
`2324, 2326, and 2328-2329). ............................................................................. 8
`B. The exhibits are not hearsay (Exhibits 2300, 2304-2316, 2318-
`2324, 2326, and 2328-2329). ...........................................................................10
`V. Court Documents Are Admissible (Exhibits 2030 and 2032). ...................11
`VI. Conclusion .......................................................................................................11
`
`
`
`
`
`
`
`ii
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`
`
`
`Preliminary Statement
`
`I.
`
`CBM2015-00179
`U.S. Patent 7,533,056
`
`37 C.F.R. § 42 governs these proceedings, and it “shall be construed to
`
`secure the just, speedy, and inexpensive resolution of every proceeding.” § 42.1(b).
`
`While Petitioners may prefer to focus on the “speedy” and “inexpensive”
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`requirements, the “just” requirement cannot be ignored. In these proceedings, the
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`“just” requirement mandates that the Board consider all of the evidence introduced
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`by Patent Owner, Trading Technologies International, Inc. (“TT”).
`
`Just like Petitioners’ Exhibit 1007, the transcript of a 2005 deposition of
`
`Atshushi Kawashima on which Petitioners rely to allege the prior art status of TSE
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`(Exhibit 1003), some of TT’s evidence comes from district court. Petitioners
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`provide no basis or justification for the Board to treat TT’s evidence from district
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`court any differently from their own. Unlike Petitioners, TT took steps to ensure its
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`evidence could come into the proceedings in a “just” way.
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`First, unlike Petitioners who ignored the Federal Rules of Evidence in
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`introducing the 2005 Kawashima deposition transcript into these proceedings, TT
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`sought to have certain Federal Rules of Evidence waived in the proceedings. Paper
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`54, Board’s Order, at 2. Petitioners opposed this request despite the fact that it
`
`would have cured the hearsay problem associated with the 2005 Kawashima
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`deposition transcript, and the Board denied the request. See id. at 2-3.
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`Second, TT sought additional discovery in the form of subpoenas to
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`1
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`CBM2015-00179
`U.S. Patent 7,533,056
`
`facilitate depositions that would reproduce here the evidence it (and Petitioners)
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`already had from district court. Id. at 4. Petitioners again opposed, and the Board
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`denied TT’s request because it was “speculative.” Id. at 5. Left with no other
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`options, TT introduced its evidence from district court in the same way that
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`Petitioners introduced their evidence from district court. There is no rule that
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`prevented TT from doing so. Petitioners could have challenged TT’s evidence by
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`cross-examining its witness. They simply chose not to.
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`TT’s evidence proves the validity of its patent. Petitioners cannot be allowed
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`to bury their heads in the sand rather than face it. While the Board should consider
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`all of TT’s evidence directly, at a minimum, it was proper for TT’s declarants to
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`rely on the evidence, so it must remain in the record. Ignoring the evidence would
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`be unjust and would deprive TT of due process.
`
`II.
`
`Standard
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`As the movant, Petitioners bear the burden of proving that the challenged
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`exhibits are inadmissible. CBM2012-00002, Paper 66 at 59 (January 23, 2014); 37
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`C.F.R. § 42.20(c). Petitioners failed to meet their burden, and the Board disfavors
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`excluding evidence as a matter of policy; “it is better to have a complete record of
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`the evidence submitted by the parties than to exclude particular pieces.”
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`CBM2012-00002, Paper 66 at 60-61.
`
`III. TT’s Testimonial Evidence From District Court Is Admissible (Exhibit
`2327).
`
`2
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`
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`CBM2015-00179
`U.S. Patent 7,533,056
`
`Exhibit 2327 is a transcript of sworn deposition testimony from district
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`court.
`
`A. Nothing justifies treating TT’s testimonial evidence from district
`court differently from Petitioners’ testimonial evidence from
`district court (i.e., the 2005 Kawashima deposition transcript).
`
`Everyone’s testimony from district court was sworn and subject to cross
`
`examination in these proceedings. Regardless of whether such cross examination
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`would be classified as routine discovery or additional discovery, the Board
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`recognized that cross examination is warranted when a party makes testimonial
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`evidence a pivotal part of its case, even if that testimonial evidence is from a prior
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`proceeding. Paper 39 at 3.
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`Before filing its PO responses, TT requested additional discovery in the
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`form of subpoenas to proactively facilitate Petitioners’ cross examination of the
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`witnesses behind TT’s testimonial evidence from district court. Paper 54, Board’s
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`Order, at 4. Rather than seizing this opportunity, Petitioners opposed TT’s request.
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`Id. And the Board denied TT’s request because “[t]he need for any subpoenas . . .
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`was speculative.” Id. at 5. At the time, the Board pointed out that the request was
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`premature because “[TT didn’t] know what evidence [it would] rely on, whether
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`the petitioner [would] object to such evidence or have the need to cross examine
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`[the] people.” Ex. 2107 at 44:16-45:3.
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`Ultimately, TT never needed to repeat its request for additional discovery in
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`3
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`CBM2015-00179
`U.S. Patent 7,533,056
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`the form of subpoenas, because Petitioners made a litigation choice to not even
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`request cross examination to challenge any of TT’s testimonial evidence from
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`district court. Petitioners’ litigation choice does not change the fact that TT’s
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`testimonial evidence from district court is just as trustworthy as Petitioners’
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`testimonial evidence from district court and should, therefore, be admitted in these
`
`proceedings if the 2005 Kawashima deposition transcript is admitted.
`
`B.
`
`TT’s testimonial evidence from district court is admissible under
`Federal Rule of Evidence 807.
`
`Federal Rule of Evidence 807 provides a “residual exception” to the hearsay
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`rule. The Board’s recent Final Written Decision in Apple Inc. v. VirnetX Inc. is
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`instructive on the rule’s applicability to TT’s testimonial evidence from district
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`court. IPR2015-00811, Paper 44 at 68-70 (Sep. 8, 2016). In the Apple case, the
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`Board addressed the admissibility of evidence just like TT’s: district court
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`deposition testimony. Id. at 68. After pointing out that the party challenging the
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`admissibility of the evidence “chose not to seek the opportunity to cross examine
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`the declaration testimony,” which the Board had defined to include the district
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`court deposition testimony, the Board explained why the residual exception of
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`Federal Rule of Evidence 807 rendered everything admissible. Id. at 68-70.
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`To fall under the exception, a “statement must: 1) have equivalent
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`circumstantial guarantees of trustworthiness; 2) be offered as evidence of a
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`4
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`CBM2015-00179
`U.S. Patent 7,533,056
`
`material fact; 3) be more probative on the point for which it is offered than any
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`other evidence that the proponent can obtain through reasonable efforts; and 4) be
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`in the interests of justice to admit.”1 Id. at 69 (citing Fed. R. Evid. 807). As
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`recognized by the Board in Apple, the residual exception is to be reserved for
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`“exceptional cases.” Id. at 69 (citing Conoco Inc. v. Dep’t of Energy, 99 F.3d 387,
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`392 (Fed. Cir. 1996), as amended on rehearing in part (Jan. 2, 1997)). But “[t]rial
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`courts are accorded wide discretion in applying the residual hearsay exception.” Id.
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`(citing Doe v. United States, 976 F.2d 1071, 1076–77 (7th Cir. 1992), cert. denied
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`510 U.S. 812 (1993); United States v. North, 910 F.2d 843, 909 (D.C. Cir. 1990)
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`cert. denied 500 U.S. 941 (1991)).
`
`TT’s testimonial evidence from district court has the same circumstantial
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`guarantees of trustworthiness as the testimony at issue in Apple and those
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`declarations actually created for these proceedings. See id. at 69-70. “The vast
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`majority of testimony in inter partes reviews[/CBMs] is admitted in paper form, as
`
`a declaration, instead of as live witness testimony. Thus, whether or not testimony
`
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`1 Federal Rule of Evidence 807 includes a notice requirement, but that
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`requirement is not relevant to these proceedings. Unlike a district court trial or
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`hearing, both parties to these proceedings were on notice of all of the evidence as
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`soon as it was filed and thus had an opportunity to meet it before the oral hearing.
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`5
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`CBM2015-00179
`U.S. Patent 7,533,056
`
`is specifically created for a specific IPR[/CBM] or is created for another
`
`proceeding, if the declaration is sworn testimony and the witness is available for
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`cross-examination, the testimony bears the same guarantees of trustworthiness.” Id.
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`at 70. Here, like in Apple, TT’s testimonial evidence from district court is sworn
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`testimony and the witness would have been available for cross-examination had
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`Petitioners sought such cross examination.2 Thus, TT’s testimonial evidence from
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`2 TT never needed to repeat its request to subpoena any witness because
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`Petitioners never sought to depose any witness. Moreover, even if Petitioners had
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`sought to depose a witness and the Board refused the request, the earlier testimony
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`of such witness would still have the same circumstantial guarantees of
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`trustworthiness as those declarations actually created for these proceedings because
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`other parties in the earlier litigations had the same motivation to develop the
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`testimony as Petitioners, that is, the motivation to invalidate TT’s patents. See
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`IPR2015-00811, Paper 44 (Sep. 8, 2016) at 70 (citing Fed. R. Evid. 804(b)(1) as
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`further support for its finding that the testimony from other proceedings had the
`
`same guarantees of trustworthiness); see also Fed. R. Evid. 804(b)(1) (exception to
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`hearsay rule for testimony “offered against a party . . . whose predecessor in
`
`interest had . . . an opportunity and similar motive to develop it by direct, cross-, or
`
`redirect examination”); Horne v. Owens-Corning Fiberglas Corp., 4 F.3d 276, 283
`
`6
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`
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`CBM2015-00179
`U.S. Patent 7,533,056
`
`district court has the same circumstantial guarantees of trustworthiness as those
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`declarations actually created for these proceedings.
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`As required by Federal Rule of Evidence 807, TT’s testimonial evidence
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`from district court is also offered as evidence of a material fact, more probative on
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`the point for which it is offered than any other evidence that TT could obtain
`
`through reasonable efforts, and in the interests of justice to admit. For example, as
`
`recognized by Petitioners, the evidence goes to corroboration of the testimony of
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`two inventors regarding reduction to practice. Paper 116 at 4. This evidence is
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`more probative than any other evidence that TT could obtain through reasonable
`
`efforts because Petitioners opposed and the Board denied TT’s efforts to obtain
`
`more probative evidence through additional discovery in the form of subpoenas.
`
`See Section III.A. And it is in the interests of justice to admit the evidence because
`
`TT will otherwise be deprived of due process. In addition, if the Board was to
`
`admit Petitioners’ evidence of the same type (i.e., the 2005 Kawashima deposition
`
`transcript) but exclude TT’s evidence, TT would be unfairly prejudiced.
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`Accordingly, the Board should admit TT’s testimonial evidence from district court
`
`
`(4th Cir. 1993) (“[P]rivity is not the gravamen of the analysis. Instead, the party
`
`against whom the deposition is offered must point up distinctions in her case not
`
`evident in the earlier litigation that would preclude similar motives.”)
`
`7
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`CBM2015-00179
`U.S. Patent 7,533,056
`
`in these proceedings if the 2005 Kawashima deposition transcript is admitted in
`
`these proceedings.
`
`IV. TT’s Documentary Evidence From District Court Is Admissible
`(Exhibits 2300, 2301, 2304-2316, 2318-2324, 2326, and 2328-2329).
`A. The exhibits are authentic (Exhibits 2300, 2301, 2304-2316, 2318-
`2324, 2326, and 2328-2329).
`
`First, the challenged exhibits (Exhibits 2300, 2304-2316, 2318-2324, 2326,
`
`and 2328-2329) are authentic at least because they were authenticated by Mr. Hart
`
`and Mr. Friesen, who have first-hand knowledge of the exhibits. In fact, they were
`
`the “third-party” individuals on the original third-party emails (Exhibits 2300,
`
`2304-2316, 2318-2324, 2326, and 2328-2329). See Ex. 2181, Declaration of Peter
`
`C. Hart, and Ex 2167, Declaration of Richard Friesen, authenticating Exhibits
`
`2300, 2304-2316, 2318-2324, 2326, and 2328-2329. Petitioners are aware of this
`
`(see Paper 116 at 6) but fail to explain why the statements of Mr. Hart and Mr.
`
`Friesen should be doubted. Paper 116 at 6-8.
`
`Also, Federal Rule of Evidence 901(a) states that the authentication
`
`requirement is satisfied if the proponent presents “evidence sufficient to support a
`
`finding that the item is what the proponent claims it is.” Here, the exhibits that
`
`Petitioners objected to contain sufficient evidence to support a finding that they are
`
`authentic. The third party emails (Exhibits 2300, 2304-2316, 2318-2324, 2326, and
`
`2328-2329), for example, contain distinct characteristics found on the page,
`
`8
`
`
`
`CBM2015-00179
`U.S. Patent 7,533,056
`
`including metadata, contents, and real names of the parties in the body of the
`
`emails that are sufficient to support a finding that the exhibits are what TT claims
`
`them to be. See, e.g., QSC Audio Products, LLC v. Crest Audio, Inc., IPR2014-
`
`00127, Paper 43 at 12 (April 29, 2015) (“[H]aving considered and weighed the
`
`distinctive characteristics of the articles and the circumstances surrounding their
`
`retrieval from the AES E-Library, we find that [the references] are what they
`
`appear to be”); see also Motorola Mobility, LLC v. Intellectual Ventures I, LLC,
`
`CBM2015-00004, Paper No. 33 at 15 (March 21, 2016) (“the distinctive
`
`characteristics found on the tile page, table of contents, and copyright page of
`
`Exhibit 2011 are sufficient to support a finding that the exhibit is what Patent
`
`Owner claims it to be.”). Furthermore, no “declaration from the author . . . is
`
`required to support a finding that the document is what it claims to be.” EMC
`
`Corp. v. Personal Web Tech., LLC, et al., IPR2013-00087, Paper No. 69 at 38
`
`(May 15, 2014). Exhibit 2301 also contains distinct characteristics to support a
`
`finding of authenticity, including verifiable information printed throughout the
`
`document (e.g., headers with the company logo and contact information, version
`
`number of the document, and its publication date). And Petitioners have failed to
`
`provide any substantial reason to doubt the authenticity of any of the exhibits, as
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`there is none. See id. at 42 (“[The movant] does not present sufficient or credible
`
`evidence to the contrary”).
`
`9
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`
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`CBM2015-00179
`U.S. Patent 7,533,056
`
`Finally, Petitioners’ challenges to the exhibits (e.g., “offers the exhibit as
`
`purported evidence of conception” (Paper No. 116 at 6), “use them here to support
`
`their assertions regarding alleged diligence” id. at 7) are more appropriately
`
`addressed as questions of sufficiency of proof, not admissibility. Such challenges
`
`should be raised in the case-in-chief, not a Motion to Exclude. See EMC Corp. v.
`
`ACQIS LLC, IPR2014-01469, Paper 56 at 20 (March 8, 2016).
`
`B.
`
`The exhibits are not hearsay (Exhibits 2300, 2304-2316, 2318-
`2324, 2326, and 2328-2329).
`
`As for Petitioners’ hearsay objection to the exhibits, the exhibits are not
`
`hearsay at least because they are not offered for the truth of the matter asserted. For
`
`example, the challenged exhibits (Exhibits 2300, 2304-2316, 2318-2324, 2326, and
`
`2328-2329) were offered to show the conception and development of the
`
`invention. Truth of the specific statements in the exhibits is irrelevant. See CA, Inc.
`
`v. Simple.com, Inc., 780 F.Supp.2d 196, 227-228 (E.D.N.Y. Mar. 5, 2009) (“The
`
`Meininger email is not hearsay because it is not being offered for the truth of its
`
`contents. The Meininger email contains statements claiming that the Meininger
`
`web page: (1) is ‘a REAL use for DHTML’; (2) behaves just like ‘windowmaker’;
`
`(3) is ‘ALL done with javascript and DHTML’; and (4) is ‘VERY graphics
`
`intensive,’ etc. However, the Meininger email is not being offered to prove the
`
`veracity of the foregoing statements.” (citations omitted).). Furthermore, as is the
`
`case with Petitioners’ objections to the authenticity of the exhibits, their objections
`
`10
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`
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`CBM2015-00179
`U.S. Patent 7,533,056
`
`relating to hearsay are more appropriately addressed as questions of sufficiency of
`
`proof, not admissibility.
`
`V. Court Documents Are Admissible (Exhibits 2030 and 2032).
`These exhibits are offered for the relevant purpose of showing how a court
`
`and a jury reacted to the evidence in these proceedings. See, e.g., Paper 21 at 62;
`
`Paper 81 at 39. They are not hearsay because they are not offered for the truth of
`
`the matter asserted and because they qualify as public records under Fed. R. Evid.
`
`803(8). They were prepared by a jury and district court, authorized by law, and
`
`recorded in the public office of the U.S. Court for the Northern District of Illinois.
`
`VI. Conclusion
`For these reasons, the Board should exclude none of TT’s evidence. While
`
`the Board should consider TT’s evidence directly, at a minimum, it was proper for
`
`TT’s declarants to rely on the evidence, so it must remain in the record.
`
`Respectfully Submitted,
`
`
`
`
`
`/Joshua L. Goldberg/
`By:
`Joshua L. Goldberg (Reg. No. 59,369)
`
`
`
`Date: October 7, 2016
`
`
`
`
`
`11
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`
`
`
`
`CERTIFICATE OF SERVICE
`
`CBM2015-00179
`U.S. Patent 7,533,056
`
`The undersigned hereby certifies that a copy of the foregoing PATENT
`
`
`
`OWNER’S OPPOSITION TO MOTION TO EXCLUDE was served on
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`October 7, 2016, via email directed to counsel of record for the Petitioner at the
`
`following:
`
`Robert Sokohl
`rsokohl-PTAB@skgf.com
`
`Lori Gordon
`lgordon-PTAB@skgf.com
`
`Richard Bemben
`rbemben-PTAB@skgf.com
`
`John C. Phillips
`CBM41919-0007CP1@fr.com
`
`PTAB@skgf.com
`
`
`
`
`
`
`Dated: October 7, 2016
`
`
`
`
`
`
`
`/Valencia Daniel/
`Valencia Daniel
`Litigation Legal Assistant
`
`FINNEGAN, HENDERSON, FARABOW,
`GARRETT & DUNNER, LLP
`
`
`12
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