IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`HARVEST TRADING GROUP, INC.,
`Petition
`
`v.
`
`VIREO SYSTEMS, INC. AND
`UNEMED CORPORATION,
`
`Patent Owners
`
`U.S. PATENT NO. 8,354,450
`IPR 2016-00945
`
`U.S. PATENT NO. 8,962,685
`IPR 2016-00947
`
`DECLARATION OF MARK FAULKNER
`
`
`
`Ex. 2001
`
`
`
`
`
`
`Vireo Systems, Inc. Ex. 2001 - 001
`
`
`Harvest Trading Group, Inc. v. Vireo Systems, Inc.
`IPR2016-00947
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`HARVEST TRADING GROUP, INC.,
`Petition
`
`v.
`
`VIREO SYSTEMS, INC. AND
`UNEMED CORPORATION,
`
`Patent Owners
`
`U.S. PATENT NO. 8,354,450
`IPR 2016-00945
`
`U.S. PATENT NO. 8,962,685
`IPR 2016-00947
`
`DECLARATION OF MARK FAULKNER
`
`
`
`Ex. 2001
`
`
`
`
`
`
`Vireo Systems, Inc. Ex. 2001 - 001
`
`
`Harvest Trading Group, Inc. v. Vireo Systems, Inc.
`IPR2016-00947
`
`
`
`DECLARATION
`I, Mark Faulkner, hereby declare and say:
`
`1. I am over the age of eighteen (18) and have personal knowledge of the matters
`
`set forth herein.
`
`2. I am the President of Vireo Systems, Inc. (“Vireo” or “Owner”).
`
`3. Vireo is one of the co-owners of U.S. Patent Nos. 8,354,450 (the “ ‘450
`
`Patent”), 8,962,685 (the “ ‘685 Patent”), 8,026,385 (the “ ‘385 Patent”), and
`
`7,608,641 (the “ ‘641 Patent).
`
`4. I understand that the ‘450 Patent is subject to a petition for inter partes review
`
`in Proceeding No. IPR2016-00945 filed by the Petitioner, Harvest Trading
`
`Group, Inc., and that the ‘685 Patent is subject to a petition for inter partes
`
`review in Proceeding No. IPR2016-00947, also filed by Harvest Trading
`
`Group, Inc. I further understand that the ‘450 Patent is identified as a
`
`continuation in part of the ‘385 Patent, the ‘385 Patent is a continuation of the
`
`‘450 Patent, and that the ‘685 Patent is a divisional of the ‘450 Patent.
`
`5. Vireo and ProMera Health, LLC (“ProMera”) were parties to a Product
`
`Development and Manufacturing Agreement (“PDMA”) under which Vireo
`
`was responsible for manufacturing a creatine hydrochloride nutritional
`
`supplement, and ProMera was to market and distribute creatine hydrochloride
`
`Vireo Systems, Inc. Ex. 2001 - 002
`
`
`Harvest Trading Group, Inc. v. Vireo Systems, Inc.
`IPR2016-00947
`
`
`
`nutritional supplements covered by the ‘450 and ‘685 Patents under the CON-
`
`CRET brand.
`
`6. ProMera is a limited liability company with three members, which include
`
`HTG Ventures, LLC (51% ownership) and the Patent Owner (Vireo, 42%
`
`ownership). During the PDMA, ProMera’s managers were John Lewis, Tim
`
`Kensinger (“Kensinger”), and myself. Petitioner was identified as a resource
`
`ProMera would use to market and distribute creatine hydrochloride. HTG
`
`Ventures appointed managers Kensinger and Lewis, who have caused
`
`ProMera to use Petitioner as an exclusive distributor, which is the subject of
`
`a separate lawsuits that are currently pending. Upon learning of HTG
`
`Ventures’ and its appointed managers’ misconduct, Vireo terminated the
`
`PDMA (and ProMera’s license) and I resigned as manager. ProMera and
`
`Petitioner continued to sell creatine hydrochloride in violation of the patents.
`
`7. Petitioner (Harvest Trading Group, Inc.) is a corporation, and has three
`
`officers: James Lewis (President), John Lewis (Treasurer), and Kensinger
`
`(Secretary). These same three individuals are also the owners of Petitioner.
`
`8. HTG Ventures, LLC, a limited liability company, has three members who
`
`coincide with the officers and owners of Petitioner: John Lewis, James Lewis,
`
`and Kensinger. The managers of HTG Ventures are also the same three
`
`individuals. HTG Ventures is a holding company for its owners’ interest in
`
`Vireo Systems, Inc. Ex. 2001 - 003
`
`
`Harvest Trading Group, Inc. v. Vireo Systems, Inc.
`IPR2016-00947
`
`
`
`ProMera (51% ownership). Petitioner and its owners (John Lewis, James
`
`Lewis, and Kensinger) caused HTG Ventures to manage ProMera according
`
`to their wishes.
`
`9. Harvest Trading Group Technologies, Inc. (“HTG Tech”) is an affiliate of,
`
`and shares much of the same ownership of, Petitioner. HTG Tech provided
`
`certain operational support to ProMera in its sale and distribution of CON-
`
`CRET.
`
`10. As President of a member of ProMera, I became familiar with the operation
`
`of ProMera, with the owners and managers of Petitioner (Harvest Trading
`
`Group, Inc.) and its affiliates (HTG Ventures and HTG Tech), and the
`
`individuals that primarily controlled the operation of these entities.
`
`11. I was personally involved in a number of meetings that included John Lewis,
`
`James Lewis, and Kensinger discussing operation of ProMera and the
`
`distribution and sale of the CON-CRET product. In those meetings,
`
`Kensinger provided the same amount of input, influence, and control as that
`
`provided by John Lewis and James Lewis. John Lewis, James Lewis and
`
`Kensinger acted as co-equals in controlling the operations. Kensinger is a
`
`manager of ProMera.
`
`Vireo Systems, Inc. Ex. 2001 - 004
`
`
`Harvest Trading Group, Inc. v. Vireo Systems, Inc.
`IPR2016-00947
`
`
`
`12. I have direct knowledge of Kensinger controlling and directing various
`
`aspects of ProMera’s operations and litigation strategy. First, when Vireo and
`
`ProMera negotiated amendments or changes to the PDMA, Kensinger
`
`communicated and directed ProMera’s position as Vireo’s licensee on
`
`intellectual property issues and its obligations for defense.
`
`13. Second, Kensinger also directed or influenced various aspects of ProMera’s
`
`implementation of its obligations under the PDMA, including directly
`
`influencing ProMera’s retail strategy for sale of the CON-CRET products, and
`
`resolving disputes with Vireo over various fees and charges.
`
`14. While the PDMA was in place, ProMera sold the CON-CRET nutritional
`
`supplements using the creatine hydrochloride supplied by Vireo to its
`
`managers’ affiliate, Petitioner. ProMera or Petitioner, under the ProMera
`
`brand, advertised the CON-CRET products as “patented” and its packaging
`
`included a reference to the ‘450 and ‘685 Patents.
`
`15. The patent application that ultimately issued as the ‘450 Patent was filed as a
`
`continuation in part of the ‘385 Patent on October 21, 2010. While the PDMA
`
`was in place, James P. Lewis, John T. Lewis, and Kensinger (the principals of
`
`ProMera and Petitioner) were provided copies of the pending patent
`
`applications, communications to and from the United States Patent and
`
`Trademark Office (“USPTO”), and provided input on the prosecution of the
`
`Vireo Systems, Inc. Ex. 2001 - 005
`
`
`Harvest Trading Group, Inc. v. Vireo Systems, Inc.
`IPR2016-00947
`
`
`
`application. ProMera was even responsible for payment of, and did in fact
`
`pay, the attorneys’ fees associated with the prosecution of the ‘450 Patent and
`
`‘685 Patent.
`
`16. As a result of Petitioner’s and its owners misconduct, Vireo terminated the
`
`PDMA on February 5, 2015. After termination, Petitioner and its affiliates
`
`continued to sell the creatine hydrochloride-based CON-CRET nutritional
`
`supplement using an alternative manufacturer of creatine hydrochloride.
`
`Petitioner continued and continues to advertise the unpatented creatine
`
`hydrochloride as CON-CRET, which had been branded as a patented product.
`
`17. Petitioner and ProMera sued Vireo seeking a declaratory judgment to
`
`invalidate the ‘450 Patent and ‘685 Patent in the United States District Court
`
`in Massachusetts. (“Massachusetts Patent Litigation”). Vireo sued Petitioner
`
`and ProMera for infringement of the ‘450 Patent and ‘685 Patent (among other
`
`claims) in the United States District Court of Nebraska on April 22, 2015.
`
`The Massachusetts Patent Litigation was transferred to the United States
`
`District Court of Nebraska.
`
`18. One year later, on April 22, 2016, Petitioner filed this IPR.
`
`Conclusion
`
`Vireo Systems, Inc. Ex. 2001 - 006
`
`
`Harvest Trading Group, Inc. v. Vireo Systems, Inc.
`IPR2016-00947
`
`
`
`Vireo Systems, Inc. Ex. 2001 - 007
`
`
`Harvest Trading Group, Inc. v. Vireo Systems, Inc.
`IPR2016-00947
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