`
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`AMX, LLC.,
`Petitioner,
`
`v.
`
`CHRIMAR SYSTEMS, INC.,
`Patent Owner.
`
`
`
`Case IPR2016-00573
`U.S. Patent No. 9,019,838
`
`
`
`
`
` PATENT OWNER CHRIMAR SYSTEMS, INC.’S
`MOTION FOR ADDITIONAL DISCOVERY UNDER 37 C.F.R. § 42.8(a)(2)
`
`
`
`
`
`
`
`
`
`
`
`
`
`I.
`
`BACKGROUND
`
`Patent Owner Chrimar Systems, Inc. (“Chrimar”) requests that the Board
`
`authorize certain targeted discovery from Petitioner AMX, LLC (“Petitioner”) as
`
`set forth in Exhibit 2002 (Chrimar’s proposed discovery requests). See 37 C.F.R.
`
`§§ 42.51 (b)(2), 42.52(a). Chrimar expects that the requested discovery, together
`
`with additional information, will show that Petitioner is the proxy of unnamed third
`
`parties Hewlett-Packard Co. (“HP”) and/or Cisco Systems, Inc. (“Cisco”), thus
`
`establishing that the petition is time-barred under 35 U.S.C. § 315(b), or the proxy
`
`of another unnamed third party, which would affect the scope of estoppel in related
`
`litigation. This motion is filed in accordance with the Board’s April 14, 2016 Order
`
`(Paper No. 8).
`
`II. ADDITIONAL DISCOVERY CONCERNING THE IDENTITY OF
`ALL REAL PARTIES IN INTEREST IS NECESSARY IN THE
`INTERESTS OF JUSTICE
`
`The Board may authorize additional discovery if it is shown to be in the
`
`“interests of justice.” 37 C.F.R. § 42.51(b)(2). Chrimar requests discovery that is
`
`necessary in the interests of justice to determine whether Petitioner is a proxy for
`
`unnamed third parties here. Chrimar believes that it can show that HP, Cisco,
`
`and/or another entity is a real party-in-interest or privy, which is critical in
`
`determining whether the IPR proceeding is timed-barred under § 315(b), or in
`
`determining the scope of the estoppel in litigation.
`
`
`
`2
`
`
`
`As shown below, Chrimar’s discovery requests satisfy the five Garmin
`
`factors applied by the Board. See Garmin Int’l, Inc. v. Cuozzo Speed Techs. LLC,
`
`Case IPR2012-00001, Paper No. 26 at 6–7 (Mar. 5, 2013).
`
`in possession of evidence that shows beyond
`is
`A. Chrimar
`speculation that the requested discovery will uncover useful
`information.
`
`Chrimar satisfies the first Garmin factor, which requires more than a mere
`
`allegation or possibility that something useful will be discovered. See id. at 6–7.
`
`The following evidence tends to show that information favorable in substantive
`
`value to Chrimar on the issue of real parties-in-interest will be uncovered by the
`
`requested discovery:
`
`• HP filed a declaratory-judgment action in the Eastern District of
`
`Michigan requesting a ruling of invalidity on U.S. Patent No.
`
`9,049,019 (“the ’019 patent”). Ex. 2003.
`
`• AMX then filed a petition for inter partes review of that same ’019
`
`patent, even though AMX is not accused of infringing that patent.
`
`IPR2016-00572, Paper No. 1.
`
`• AMX hired McDermott Will & Emery, which represents HP in the
`
`Eastern District of Michigan litigation, and in another action in the
`
`Northern District of California also involving Chrimar and Chrimar’s
`
`patents, to represent it in the IPR proceedings. Exs. 2003 and 2004.
`
`
`
`3
`
`
`
`• As counsel for AMX confirmed, it is undisputed that indemnity
`
`agreements exist between AMX and third parties. Ex. 2001 at 19:7–
`
`12.
`
`• AMX sells certain products provided by another party accused of
`
`infringement in a Chrimar case—Ruckus Wireless. See Ex. 2005 at 5.
`
`• Ruckus Wireless states publicly that it indemnifies its channel
`
`partners. See Ex. 2006 at 72.
`
`• Chrimar believes that Ruckus was indemnifying AMX in litigation
`
`involving Chrimar and the same patents at issue in the IPR—as
`
`counsel for Ruckus, Matthew Yungwirth, represents Ruckus and was
`
`representing AMX—and may still be indemnifying AMX in such
`
`litigation. Exs. 2007 and 2008.
`
`B. Chrimar’s requested discovery does not seek Petitioner’s
`litigation positions or the underlying basis for those positions.
`
`Chrimar is not seeking discovery prohibited by the second Garmin factor.
`
`See Garmin, IPR2012-00001, Paper 26 at 13. Instead, Chrimar seeks limited
`
`discovery concerning whether third parties are real parties-in-interest that should
`
`have been identified in the Petition pursuant to 35 U.S.C. § 312(a)(2) (or whether
`
`any third party is a “privy” of a petitioner under 35 U.S.C. § 315(b)). To that end,
`
`the requested discovery seeks only factual information regarding third parties’
`
`relationships with Petitioner and their involvement with these proceedings, not
`
`
`
`4
`
`
`
`Petitioner’s litigation positions or the underlying basis for those positions. For
`
`example, Request for Production No. 1 seeks indemnity agreements, which are not
`
`privileged, and all of the requested interrogatories seek factual, not privileged,
`
`information about third parties’ involvement in the Chrimar Litigation and these
`
`IPRs. If, however, Petitioner contends otherwise for any discovery request, any
`
`allegedly privileged information or litigation positions can easily be redacted.
`
`C. Chrimar cannot generate equivalent information by other means.
`
`With respect to the third Garmin factor, Chrimar does not have the ability to
`
`generate equivalent discovery by any other means. Petitioner is the only one in
`
`possession of the discovery sought.
`
`To be a real party-in-interest, a third party’s participation with a petitioner
`
`need not be overt, and the evidence of an unnamed real party-in-interest may be
`
`circumstantial. Zoll Lifecor Corp. v. Philips Elec. N. Am. Corp., Case IPR2013-
`
`00609, slip op. at 10 (PTAB Mar. 20, 2014) (Paper 15). With respect to privity, the
`
`Federal Circuit has stated an “indemnity agreement between” parties creates “a
`
`significant relationship between them,” and that “[s]uch an indemnification
`
`agreement, in other cases, has alone been enough to find privity.” Intel Corp. v.
`
`U.S. Int’l Trade Comm’n, 946 F.2d 821, 839 (Fed. Cir. 1995). Also, under
`
`controlling Federal Circuit law, Aevoe Corp. v. AE Tech. Co., 727 F.3d 1375 (Fed.
`
`Cir. 2013), a reseller of accused infringing products is in privity with a party
`
`
`
`5
`
`
`
`accused of infringement. Chrimar needs the requested discovery to obtain the
`
`direct evidence or additional circumstantial evidence of a third party’s covert role
`
`in the IPR proceeding. See Garmin, IPR2012-00001, Paper 26 at 13–14. If
`
`Petitioner is covertly acting on behalf of (or in coordination with) HP or Cisco in
`
`particular, that information is almost certainly known only to Petitioner. If HP,
`
`Cisco, or another third party, is secretly funding or controlling the IPR, that
`
`information is almost certainly known only by Petitioner. If Petitioner had some
`
`other reason to file the petition here, that information is almost certainly known
`
`only to Petitioner.
`
`For example, indemnification agreements, which AMX admits exist, are not
`
`public. Documents concerning third parties’ right to control Petitioner’s activities
`
`in this IPR also are not public. Similarly, each interrogatory seeks information
`
`known only to Petitioner. Because Chrimar cannot generate equivalent information
`
`by any other means, the third Garmin factor weighs heavily in favor of granting
`
`additional discovery.
`
`D. Chrimar’s instructions are easily understandable.
`
`With respect to the fourth Garmin factor, the instructions for the requested
`
`discovery are easily understandable, having been modeled, in part, on instructions
`
`approved by the Board in Garmin and ParkerVision. See Dr. Michael Farmwald
`
`and RPX Corp. v. ParkerVision, Inc., Case IPR2014-00946, Paper 16, Ex. 2006.
`
`
`
`6
`
`
`
`In Garmin, the Board “considered the two-page instructions for
`
`interrogatories and the two-page instructions for document requests and
`
`conclude[d] that the instructions [were] easily understandable.” Garmin, IPR2012-
`
`00001, Paper 26 at 14. Here, taken together, the Instructions and Definitions
`
`sections of the requested discovery are under two pages and are likewise easily
`
`understandable. Moreover, the Instructions here are substantially equivalent to the
`
`instructions the Board considered in ParkerVision, to which the Board held:
`
`“Patent Owner’s Requests include only three ‘Instructions’ that appear relatively
`
`standard and are easily understandable. Thus, this factor weighs in favor of
`
`granting Patent Owner’s Motion.” See ParkerVision, IPR2014-00946, Paper 25 at
`
`6 (Feb. 20, 2015).
`
`E. Chrimar’s requested discovery is not overly burdensome.
`
`The requested discovery is limited to 6 interrogatories and 4 document
`
`requests, and is “sensible and responsibly tailored according to a genuine need.”
`
`See Garmin, IPR2012-00001, Paper 26 at 14–16. For example, Request for
`
`Production No. 1 seeks indemnity agreements involving the accused products in
`
`the Chrimar Litigation or Related Matters that are applicable or potentially
`
`applicable to patent infringement claims involving any one or more of the four
`
`Chrimar patents at issue in these IPRs, and Interrogatory No. 1 seeks an
`
`identification of third parties that Petitioner has communicated with regarding
`
`
`
`7
`
`
`
`indemnification for the Chrimar Litigation or Related Matters, both of which are
`
`specifically targeted to documents and information critical to determining the real
`
`parties-in-interest and privies of Petitioner in these IPRs.
`
`Chrimar’s requests are not overly burdensome but are narrowly tailored and
`
`seek only a small amount of materials that are directly related to the real party-in-
`
`interest issue and that would be expected to be kept in very specific locations—for
`
`example, agreements with suppliers or customers are likely to be maintained in a
`
`central repository accessible to the business unit responsible for the relationship or
`
`the legal department. Petitioner’s compliance would not require substantial time,
`
`effort, or financial resources, and would not adversely impact the schedule in this
`
`review. Thus, the fifth Garmin factor weighs in favor of granting additional
`
`discovery.
`
`III. CONCLUSION
`
`For the foregoing reasons, the Board should grant Chrimar’s motion. The
`
`discovery is in the interests of justice. It would be unjust and prejudicial to Chrimar
`
`to be required to defend the validity of its patents in an IPR without the requested
`
`discovery to assist Chrimar in showing that real parties-in-interest and/or privies of
`
`the Petitioner have not been properly named in the IPR petitions. See 5 U.S.C.
`
`§ 556(d) (“A party is entitled to present his case or defense by oral or documentary
`
`evidence, to submit rebuttal evidence, and to conduct such cross-examination as
`
`
`
`8
`
`
`
`may be required for a full and true disclosure of the facts.”); 5 U.S.C. § 556(e)
`
`(“When an agency decision rests on official notice of a material fact not appearing
`
`in the evidence in the record, a party is entitled, on timely request, to an
`
`opportunity to show to the contrary.”). Chrimar therefore respectfully requests that
`
`the Board grant the requested additional discovery contained in Exhibit 2002, and
`
`require Petitioner to respond to the interrogatories and produce all responsive
`
`documents within fourteen (14) days of the Board’s Order, or at such time as the
`
`Board deems reasonable.
`
`
`
`
`
`
`
`9
`
`
`
`
`
`
`
`Respectfully submitted,
`
`
`
`
`
` /s/ Justin S. Cohen
`Justin S. Cohen
` Reg. No. 59,964
` Justin.Cohen@tklaw.com
`THOMPSON & KNIGHT LLP
`One Arts Plaza
`1722 Routh Street, Suite 1500
`Dallas, Texas 75201
`214.969.1700
`214.969.1751 (Fax)
`
`Richard W. Hoffmann
` Reg. No. 33,711
` Hoffmann@Reising.com
`REISING ETHINGTON PC
`755 West Big Beaver Road, Suite 1850
`Troy, Michigan 48084
`248.689.3500
`248.689.4071 (Fax)
`
`COUNSEL FOR PATENT OWNER
`CHRIMAR SYSTEMS, INC.
`
`
`April 20, 2016
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Certification of Service Under 37 C.F.R. § 42.6(e)(4) & 42.105(a)
`
`A copy of this PATENT OWNER CHRIMAR SYSTEMS, INC.’S
`
`
`
`MOTION FOR ADDITIONAL DISCOVERY REQUESTS UNDER 37
`
`C.F.R. § 42.8(a)(2) has been served on Petitioners via email at the following
`
`correspondence addresses:
`
`Brent A. Hawkins (Reg. No. 44,146)
`Amol A. Parikh (Reg. No. 60,671)
`McDermott, Will & Emery LLP
`227 West Monroe Street
`Chicago, Illinois 60606-5096
`bhawkins@mwe.com
`amparikh@mwe.com
`
`
`
`
`
` /s/ Justin S. Cohen
`Justin S. Cohen
` Reg. No. 59,964
` Justin.Cohen@tklaw.com
`THOMPSON & KNIGHT LLP
`One Arts Plaza
`1722 Routh Street, Suite 1500
`Dallas, Texas 75201
`214.969.1700
`214.969.1751 (Fax)
`
`
`
`
`April 20, 2016