UNITED STATES PATENT AND TRADEMARK OFFICE
`
`____________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________________
`
`AMX LLC,
`Petitioner,
`
`v.
`
`CHRIMAR SYSTEMS, INC.,
`Patent Owner.
`
`____________________
`
`Case IPR2016-00573 (Patent 9,019,838)
`____________________
`
`PETITIONER’S OPPOSITION TO
`PATENT OWNER’S MOTION FOR ADDITIONAL DISCOVERY
`
`
`
`____________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________________
`
`AMX LLC,
`Petitioner,
`
`v.
`
`CHRIMAR SYSTEMS, INC.,
`Patent Owner.
`
`____________________
`
`Case IPR2016-00573 (Patent 9,019,838)
`____________________
`
`PETITIONER’S OPPOSITION TO
`PATENT OWNER’S MOTION FOR ADDITIONAL DISCOVERY
`
`
`
`TABLE OF CONTENTS
`
`I.
`
`II.
`
`Introduction......................................................................................................1
`
`The Requested Discovery Is Futile and Not in the Interest of Justice ............2
`
`A.
`
`B.
`
`C.
`
`Garmin Factor 1: Chrimar Offers Nothing More Than
`Speculation That Something Useful Will Be Discovered.....................3
`
`Garmin Factor 3: Patent Owner Has the Ability to Obtain the
`Information by Other Means.................................................................8
`
`Garmin Factor 5: Chrimar’s Requested Discovery is Overly
`Burdensome...........................................................................................9
`
`III. Conclusion .....................................................................................................10
`
`i
`
`
`
`TABLE OF AUTHORITIES
`
`Cases
`Apple Inc. v. Achates Reference Publ’g, Inc.,
`IPR2013-00080, Paper 18 (P.T.A.B. Apr. 3, 2013) ...............................................1
`
`Broadcom Corp. v. Telefonaktiebolaget LM Ericsson (PUBL),
`IPR2013-00601, Paper 23 (P.T.A.B. Jan. 24, 2014) ..............................................5
`
`CaptionCall, L.L.C. v. Ultratec, Inc.,
`IPR2015-00636, Paper 42 (P.T.A.B. Feb. 23, 2016)..............................................8
`
`Garmin Int'l, Inc. v. Cuozzo Speed Techs. LLC,
`IPR2012-00001, Paper 26 (P.T.A.B. Mar. 5, 2013)...............................................3
`
`Wavemarket Inc. v. Locationet Sys. Ltd.,
`IPR2014-00199, Paper 34 (P.T.A.B. Aug. 11, 2014).............................. 5, 6, 7, 10
`
`Statutes
`
`35 U.S.C. § 316(a)(5).................................................................................................1
`
`Other Authorities
`
`Office Patent Trial Practice Guide,
`77 Fed. Reg. 48756 (Aug. 14, 2012) ..................................................................3, 7
`
`Rules
`
`37 C.F.R. § 42.51(b)(2)(i)..........................................................................................1
`
`ii
`
`
`
`I.
`
`Introduction
`
`Chrimar’s Motion for Additional Discovery should be denied because (1)
`
`Petitioner AMX is not in privity with Hewlett-Packard Co. (“HP”), Cisco Systems,
`
`Inc. (“Cisco”), Ruckus Wireless (“Ruckus”) and/or any other third-parties, and (2)
`
`Chrimar has not demonstrated that the requested additional discovery is “necessary
`
`in the interest of justice.” 35 U.S.C. § 316(a)(5); 37 C.F.R. § 42.51(b)(2)(i).
`
`Discovery in inter partes review (“IPR”) is “less than what is normally
`
`available in district court patent litigation” because “Congress intended inter partes
`
`review to be a quick and cost effective alternative to litigation.” Apple Inc. v.
`
`Achates Reference Publ’g, Inc., IPR2013-00080, Paper 18 at 3 (P.T.A.B. Apr. 3,
`
`2013). The Board must therefore be “conservative in authorizing additional
`
`discovery.” Id. Additional discovery, like that requested in Chrimar’s Motion,
`
`should only be permitted where such discovery is “necessary in the interest of
`
`justice.” Id. at 4. And the necessity for discovery must be premised on more than
`
`speculation or a “mere possibility.” Id. There must be “factual evidence or
`
`support” underlying a request for additional discovery
`
`that demonstrates
`
`“something useful [to the proceeding] will be found.” Id. Chrimar fails to satisfy
`
`this standard and the Board should reject Chrimar’s Motion.
`
`1
`
`
`
`II.
`
`The Requested Discovery Is Futile and Not in the Interest of Justice
`
`AMX does not have any information responsive to proposed Interrogatory
`
`Nos. 2-6 or Document Request Nos. 2 and 4. (See Ex. 2002). AMX and its parent
`
`company Harman International Industries have not taken any “steps or actions” to
`
`prevent third-parties from being named real parties-in-interest (Interrogatory No.
`
`2). Similarly, there are no third-parties who have contributed monetarily to, have
`
`the right to control aspects of, or have received updates about the IPR proceedings
`
`(Interrogatory Nos. 3-4, 6). In addition, there are no third-parties for which AMX
`
`has the right to control activities in litigation (Interrogatory No. 5). Finally, there
`
`are no agreements or other documents with third parties relating to the IPR
`
`proceedings (Document Request Nos. 2 and 4). As a result, no information of
`
`documents exist that are responsive to Interrogatory Nos. 2-6 or Document
`
`Request Nos. 2 and 4.
`
`The remaining discovery requests relate to indemnification agreements
`
`(Interrogatory No. 1 and Document Request No. 1) and joint defense agreements
`
`(Document Request No. 3). (See Ex. 2002). As set forth below, Chrimar has failed
`
`to establish, beyond mere speculation, that the requested discovery will contain any
`
`useful information. Moreover, the requested discovery is overly burdensome.
`
`2
`
`
`
`A.
`
`Garmin Factor 1: Chrimar Offers Nothing More Than
`Speculation That Something Useful Will Be Discovered.
`
`To establish it is entitled to the requested discovery, Chrimar must
`
`demonstrate that it is already in possession of “a threshold amount of evidence or
`
`reasoning tending to show beyond speculation that something useful will be
`
`uncovered.” Garmin Int'l, Inc. v. Cuozzo Speed Techs. LLC, IPR2012-00001, Paper
`
`26 at 6 (P.T.A.B. Mar. 5, 2013). The term “useful” goes beyond traditional district
`
`court litigation thresholds of relevance and admissibility. Id. at 7. Here, Chrimar
`
`has the burden of demonstrating that the requested discovery is “favorable in
`
`substantive value to a contention of the party moving for discovery.” Id.
`
`Chrimar alleges that the requested discovery is relevant to the issue of
`
`identifying the real parties-in-interest. (Mot. at 3). The Office Patent Trial Practice
`
`Guide provides guidance regarding factors to consider in determining whether a
`
`party is a real party-in-interest. See Office Patent Trial Practice Guide, 77 Fed.
`
`Reg. 48756, 48759 (Aug. 14, 2012). One important consideration is whether a non-
`
`party exercises, or could have exercised, control over a party’s participation in the
`
`IPR proceeding. Id. An example justifying the real party-in-interest label is a party
`
`that “funds and directs and controls” an IPR petition or proceeding. Id. at 48760
`
`(emphasis added).
`
`As a threshold matter, Chrimar fails to explain how its proposed
`
`interrogatories and document requests relate to identification of any potential real
`
`3
`
`
`
`party-in-interest that funds and directs and controls this IPR proceeding. As a
`
`result, Chrimar has not met its burden of showing that its proposed discovery
`
`requests will in any way support its contention that the petition fails to name a real
`
`party-in-interest.
`
`In its Motion, Chrimar provides a list of “evidence” allegedly showing
`
`useful information will be uncovered. (Mot. at 3-5). This “evidence” can be
`
`divided into two categories: (i) purported indemnification agreements between
`
`AMX and third-parties (Mot. at 4); and (ii) the fact that AMX and HP both hired
`
`McDermott Will & Emery as counsel in separate cases (Mot. at 3). Nowhere does
`
`Chrimar explain how any of this information is connected to or relates to the
`
`specific proposed interrogatories or document requests set forth in Exhibit 2002.
`
`Chrimar also fails to show how the listed “evidence” demonstrates that a non-party
`
`funded this proceeding and exercised or could have exercised control over AMX’s
`
`participation in this proceeding.
`
`For instance, the mere existence of an indemnification provision or
`
`agreement is insufficient to establish the expansive concept of privity, much less
`
`the more narrowly defined relationship of a real party-in-interest:
`
`According to long-standing precedent, Bros, Inc. v. W.E. Grace Mfg.
`Co., 261 F.2d 428, 429 (5th Cir. 1958), when a patent holder sues a
`dealer, seller, or distributer of an accused product, as is the case at
`hand, indemnity payments and minor participation in a trial are not
`
`4
`
`
`
`sufficient to establish privity between the non-party manufacturer of
`the accused device and the defendant parties.
`Broadcom Corp. v. Telefonaktiebolaget LM Ericsson (PUBL), IPR2013-00601,
`
`Paper 23 at 7 (P.T.A.B. Jan. 24, 2014) (also citing I.T.S. Rubber Co. v. Essex Co.,
`
`272 U.S. 429 (1926); and Restatement, Judgment § 84, comment e (1942))
`
`(denying motion for additional discovery that relied largely on indemnity
`
`agreements between a supplier and its customers relating to district court
`
`litigation). While Chrimar alleges that certain indemnification agreements exist,
`
`Chrimar provides no
`
`evidence beyond speculation
`
`that
`
`the
`
`requested
`
`indemnification agreements obligate any third-party to fund the present IPR
`
`proceeding, or provide any third-party the right to control the IPR proceeding. See
`
`Wavemarket Inc. v. Locationet Sys. Ltd., IPR2014-00199, Paper 34 at 6 (P.T.A.B.
`
`Aug. 11, 2014) (finding identification of indemnification obligation is not
`
`sufficient to demonstrate beyond speculation that non-party funded, controlled, or
`
`had ability to exercise control over IPR proceedings).
`
`Similarly, Chrimar provides no evidence or explanation as to how the mere
`
`fact that AMX and HP hired the same law firm demonstrates that HP funded or
`
`exercised control over this IPR proceeding. Under similar circumstances, the
`
`Board has found that the existence of shared counsel between a petitioner and a
`
`third-party “does not demonstrate beyond speculation that something useful will be
`
`uncovered regarding [the non-party’s] funding, direction, control, or ability to
`
`5
`
`
`
`exercise control of Petitioner’s participation
`
`in
`
`this
`
`inter partes review
`
`proceeding.” Wavemarket, IPR2014-00199, Paper 34 at 6 (italics in original).
`
`Chrimar suggests that because AMX filed a petition for inter partes review
`
`for a patent which Chrimar has not yet asserted infringement against AMX (i.e.,
`
`U.S. Patent No. 9,049,019), HP must be a real party-in-interest. (Mot. at 3).
`
`However, the claims of the ’019 patent are nearly identical to the claims of the
`
`’107 patent, which Chrimar alleges AMX infringes (See IPR2016-00572, Ex. 1013
`
`at 2 (entry for “Chrimar Systems Inc. d/b/a CMS Technologies et al. v. AMX, 6:15-
`
`cv-00164”)).
`
`In a span of 20 months, Chrimar has filed three district court litigations in
`
`the Eastern District of Texas against AMX on related patents:
`
` In November 2013, Chrimar filed a lawsuit alleging infringement
`of U.S. Patent No. 8,155,012. See ChriMar Sys., Inc. et al v. AMX,
`LLC, 13-cv-881, Dkt. 1.
` In March 2015, Chrimar file a second lawsuit alleging
`infringement of U.S. Patent Nos. 8,155,012 and 8,942,107. See
`Chrimar Sys., Inc. et al v. AMX, LLC, 15-cv-164, Dkt. 1.
` In July 2015, Chrimar filed a third lawsuit, this time alleging
`infringement of U.S. Patent Nos. 9,019,838 and 8,902,760. See
`Chrimar Sys., Inc. et al v. AMX, LLC, 15-cv-615.
`
`The second lawsuit was filed while the first case was in expert discovery,
`
`involving the same patent and adding a new patent in the same family. Two more
`
`6
`
`
`
`patents in the same family soon followed. Rather than wait for Chrimar to file
`
`another harassing lawsuit with the next patent, AMX filed a petition for inter
`
`partes review of the ’019 patent.
`
`In addition, Chrimar seeks discovery relating to agreements with any third-
`
`party regarding any district court litigation involving U.S. Patent No. 8,942,107,
`
`U.S. Patent No. 9,049,019, U.S. Patent No. 9,019,838; or U.S. Patent No.
`
`8,902,760. Notwithstanding that Chrimar has not identified any co-defendant
`
`alleged to be a real party-in-interest, the mere fact that AMX is co-defendants with
`
`other companies in a district court litigation is not evidence that any of those co-
`
`defendants are a real party-in-interest. See Office Patent Trial Practice Guide, 77
`
`Fed. Reg. 48756, 48760 (“If Party A is part of a Joint Defense Group with Party B
`
`in a patent infringement suit . . . Party A is not a 'real party-in-interest' . . . based
`
`solely on its participation in that Group.”). Chrimar neither alleged nor provided
`
`any evidence establishing beyond mere speculation that any co-defendant controls
`
`or has the right to control this proceeding. See Wavemarket, IPR2014-00199, Paper
`
`34 at 6 (finding joint defense/common interest agreements does not demonstrate
`
`beyond speculation that something useful will be uncovered regarding non-party’s
`
`funding, direction, control, or ability to exercise control of an inter partes review
`
`proceeding).
`
`7
`
`
`
`Even Chrimar admits it does not have evidence beyond speculation, instead
`
`saying it “believes that Ruckus was indemnifying AMX” and that it “believes that
`
`it can show that HP, Cisco, and/or another entity is a real party-in-interest or
`
`privy.” (Mot. at 2, 4 (emphasis added)). Chrimar’s use of the word “believes”
`
`evinces speculation, rather than demonstrating it has evidence in its possession
`
`tending to show beyond speculation that any third-party funded this proceeding
`
`and exercised control, or could have exercised control, over this proceeding. See
`
`CaptionCall, L.L.C. v. Ultratec, Inc., IPR2015-00636, Paper 42 at 17-18 (P.T.A.B.
`
`Feb. 23, 2016) (finding that use of the word “believes” in a motion for additional
`
`discovery supported a finding that Patent Owner’s discovery requests were based
`
`on mere speculation).
`
`Therefore, Patent Owner has failed to satisfy Garmin Factor 1.
`
`B.
`
`Garmin Factor 3: Patent Owner Has the Ability to Obtain the
`Information by Other Means
`
`Not only does Chrimar have the ability to obtain the requested information
`
`by other means, it has actually sought alternative and less cumbersome means as to
`
`AMX to determine whether any third-parties should have been named in the IPR
`
`petition. The day after Chrimar filed its Motion, it took the Rule 30(b)(6) corporate
`
`deposition of AMX in connection with the co-pending district court litigation.
`
`During the deposition, Chrimar’s attorney questioned the witness about the IPR
`
`proceedings and learned that no third-parties are contributing to the funding of the
`
`8
`
`
`
`IPR proceedings. (Ex. 1040, Noble Dep. Tr. Vol. 2 at 387:23-25). Chrimar also
`
`learned that AMX did not speak to any third-parties prior to filing the petition in
`
`the current IPR proceeding. (Ex. 1039, Noble Dep. Tr. Vol. 1 at 182:17-19, 183:2-
`
`5, 184:4-25). Moreover, even though indemnification agreements are not sufficient
`
`to demonstrate beyond speculation that a non-party funded, controlled, or had
`
`ability to exercise control over IPR proceedings as stated above with respect to
`
`Garmin Factor 1, when Chrimar asked about certain non-parties, it learned that
`
`AMX has neither tendered nor requested indemnification from them with respect
`
`to the on-going litigation. (Id. at 70:8-10, 185:16-186:9). As a result, the crux of
`
`the information sought by the proposed interrogatories and document requests (i.e.,
`
`there are no unnamed real parties-in-interest) is already in Chrimar’s possession
`
`and/or available to Chrimar through other less restrictive means. Thus, Chrimar’s
`
`claim that it cannot obtain the requested information by alternative means is
`
`demonstrably wrong.
`
`C.
`
`Garmin Factor 5: Chrimar’s Requested Discovery is Overly
`Burdensome
`
`Chrimar’s proposed discovery requests are not narrowly tailored. To the
`
`contrary, Chrimar’s proposed requests are so broad they will require production of
`
`information unrelated to identification of any alleged real party-in-interest.
`
`Proposed Document Request No. 1 requests “all indemnity agreements”
`
`relating to the accused products. (Ex. 2002). This request is overly broad because it
`
`9
`
`
`
`could encompass, for example, the thousands of agreements with customers and
`
`end users who have purchased products from AMX. Chrimar offers no explanation
`
`as to why such information would lead to useful information to demonstrate such
`
`customers and end users are potential real parties-in-interest.
`
`Proposed Document Request No. 3 seeks any agreement with any third party
`
`regarding the any district court litigation involving U.S. Patent Nos. 8,942,107,
`
`9,049,019, 9,019,838; or 8,902,760. (Ex. 2002). The only such agreements in
`
`existence are joint defense agreements relating solely to the district court
`
`litigations, and these agreements are privileged under the common interest doctrine
`
`and therefore not discoverable. Moreover, Chrimar has not provided any evidence
`
`beyond speculation that any agreement with respect to the district court litigations
`
`provides a third-party with the right or ability to control the current IPR
`
`proceedings. See Wavemarket, IPR2014-00199, Paper 34 at 6 (denying discovery
`
`of joint defense/common interest agreements).
`
`III. Conclusion
`
`Petitioner respectfully requests that Chrimar’s Motion be denied.
`
`Date: April 27, 2016
`
`Respectfully submitted,
`
`/s/ Brent A. Hawkins
`Brent A. Hawkins (Reg. No. 44,146)
`Amol A. Parikh (Reg. No. 60,671)
`MCDERMOTT, WILL & EMERY LLP
`
`Attorneys for Petitioner, AMX LLC
`
`10
`
`
`
`CERTIFICATE OF SERVICE
`
`On April 27, 2016, Petitioner’s Opposition to Patent Owner’s Motion for
`
`Additional Discovery was served by email on the following counsel of record for
`
`Patent Owner:
`
`Justin S. Cohen (Reg. No. 59.964)
`THOMPSON & KNIGHT LLP
`1722 Routh Street, Suite 1500
`Dallas, TX 75201
`Justin.Cohen@tklaw.com
`
`Richard W. Hoffman (Reg. No. 33,711)
`REISING ETHINGTON PC
`755 West Big Beaver Road, Suite 1850
`Troy, MI 48084
`Hoffmann@Reising.com
`
`/s/ Brent A. Hawkins
`Brent A. Hawkins
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