UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`_________________
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`GEOTAB INC., AND
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`TV MANAGEMENT, INC., D/B/A GPS NORTH AMERICA
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`Petitioners,
`
`v.
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`PERDIEM CO., LLC.
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`Patent Owner
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`_________________
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`Case IPR2016-01063
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`U.S. Patent 8,717,166
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`_________________
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`
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`OPPOSITION TO PATENT OWNER’S MOTION TO TERMINATE
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`i
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`_________________
`
`GEOTAB INC., AND
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`TV MANAGEMENT, INC., D/B/A GPS NORTH AMERICA
`
`Petitioners,
`
`v.
`
`PERDIEM CO., LLC.
`
`Patent Owner
`
`_________________
`
`Case IPR2016-01063
`
`U.S. Patent 8,717,166
`
`_________________
`
`
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`OPPOSITION TO PATENT OWNER’S MOTION TO TERMINATE
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`i
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`EXHIBIT LIST1
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`Ex. 1001 U.S. Patent No. 8,717,166 (“’166 Patent”)
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`Ex. 1002
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`The file history of the ’166 Patent
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`Ex. 1003 U.S. Patent No. 7,327,258 (“Fast”)
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`Ex. 1004 U.S. Provisional Patent App. No. 60/542,208 (“Fast Provisional”)
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`Ex. 1005 U.S. Patent Pub. No. US 2005/0156715 (“Zou”)
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`Ex. 1006 Discrete Wireless’s Marcus GPS Fleet Management Application
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`Product Brochure (“Marcus”)
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`Ex. 1007 U.S. Patent App. No. 14/629,336, Response to Non-Final Office
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`Action (Feb. 11, 2016)
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`Ex. 1008
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`Success Stories in Fleet Tracking (Sept. 1, 2005)
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`Ex. 1009 U.S. Patent No. 7,949,608 (“Li”)
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`Ex. 1010
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`Software as a Service Article (“SaaS Article”)
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`Ex. 1011
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`Infringement Contentions in related litigation
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`Ex. 1012 Declaration of Dr. Stephen Heppe
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`Ex. 1013 Declaration of Vivek Ganti, Esq.
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`Ex. 1014 Declaration of William Steckel
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`Ex. 1015 Declaration of Steven G. Hill
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`Ex. 1016 Declaration of Michael Femal
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`1 Newly Filed exhibits in Bold
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`
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`ii
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`
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`Patent Owner moved to terminate (Paper 15, “PO Motion”), arguing that
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`SkyBitz Inc. (“SkyBitz”) should have been identified as a real party-in-interest
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`(RPI). Because SkyBitz has neither controlled nor funded this petition, Patent
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`Owner is wrong. For the following reasons, the Petition has correctly identified
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`any and all RPIs.
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`Factual Background
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`Telular Corp. (“Telular”), a named RPI, acquired SkyBitz in 2012 and
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`wholly owns SkyBitz. (Ex. 1014, ¶3-4). As the parent of Petitioner TV
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`Management, Inc. dba GPS North America (“GPSNA”), Telular funded and
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`controlled the instant IPR.2 (Id., ¶8). Telular approved naming GPSNA as
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`Petitioner because it was identified as a defendant in the co-pending litigation.
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`(Id., ¶9). Telular did not name SkyBitz as an RPI because, absent permission from
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`Telular, SkyBitz has no ability to take any legal action, participate in any legal
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`action, or supply any funds in relation to legal action. (Id., ¶10). In addition,
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`SkyBitz has no financial interest in the co-pending litigation because Telular is
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`fully responsible for all accused products, attorney’s fees and payment of any
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`judgment in relation to the co-pending litigation. (Id., ¶12).
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`2 This IPR was also funded and controlled by Geotab Inc., whose RPI status is not
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`at issue.
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`
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`1
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`
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`Telular’s five-member Board of Directors unanimously approved
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`participation in and funding of this proceeding, four of which are not affiliated
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`with SkyBitz. (Id., ¶¶7-8).
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`SkyBitz has no power to act on its own in any capacity without obtaining
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`Telular’s Board approval. (Id., ¶10). SkyBitz must first receive Telular Board
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`approval before embarking on any involvement in engineering projects, setting
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`sales prices, engaging in financial transactions, and/or participating in legal action.
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`(Id.). SkyBitz also must seek Telular’s approval to spend any money. (Id.).
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`In 2015, Telular authorized and provided the necessary funding for SkyBitz
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`to acquire TV Management Inc., d/b/a GPS North America (“GPSNA”). (Id., ¶3-
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`4). Petitioners do not dispute that the shares of GPSNA were acquired by SkyBitz.
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`(PO Motion, p.1). However, the GPSNA acquisition required Telular’s approval
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`and its authorization to transfer funds to finance the acquisition. (Id., ¶3-4). After
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`the acquisition, Telular took ownership of all GPSNA product lines and
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`trademarks. (Id., ¶5).
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`Legal standard for RPI
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` “A petition filed under section 311 may be considered only if … the petition
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`identifies all real parties in interest[.]” 35 U.S.C. § 312(a)(2); see also 37 CFR
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`42.8. The RPI inquiry depends on the relationship between a non-party and the
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`proceeding. Aruze Gaming v. MGT Gaming, IPR2014-01288, paper 13, p. 11
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`
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`2
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`
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`(PTAB 2015). The RPI status does not depend on the relationship between the
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`parties. Id. For example, the fact that a non-party is a subsidiary or a spinout of a
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`named party does not alone transform the non-party into an RPI. Compass Bank v.
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`Intellectual Ventures II LLC, IPR2014-00724, paper 12, pp. 10–11 (PTAB 2014)
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`(holding that a subsidiary is not an RPI); Hughes Network Systems, LLC et al v.
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`California Institute of Tech., IPR2015-00059, paper 42, pp. 10-11 (PTAB 2016)
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`(holding that a spinout company is not an RPI).
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`A “common consideration [in determining RPI status] is whether the non-
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`party exercised or could have exercised control over a party’s participation in a
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`proceeding.” Cox Communications v. AT&T Intellectual Property I, LP, IPR2015-
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`01227, paper 13, pp.8-9 (PTAB 2015) (internal citations omitted). The Board
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`looks at the involvement in the filing, and the funding of the petition. See Trial
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`Practice Guide, 77 Fed. Reg. at 48,760.
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`To demonstrate control, the Patent Owner must show persuasive evidence
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`that the non-party engaged in strategic planning, preparation, and review of the
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`inter partes review petition. TRW Automotive US LLC v. Magna Electronics Inc.,
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`IPR2014-01497, paper 7, p.9 (PTAB 2015) (emphasis added). In fact, reviewing
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`an IPR petition to address the citation format and “small nits” does not rise to the
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`level of control over the IPR petition. See The Mangrove Partners Master Fund,
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`Ltd. v. Virnetx Inc., IPR2015-01046, paper 74, p.4 (PTAB 2016). Generalized
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`
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`3
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`
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`evidence raising a hypothesis of control does not suffice to show specific control
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`over an IPR petition. Id. at p.6.
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`SkyBitz is not an RPI because it has not, cannot and will not control the
`IPR, pay for the IPR or have any input into the IPR
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`The Motion to Terminate fails to address the funding or control of this
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`Petition and the instant proceeding. Here, Telular is the party to the Joint Defense
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`Agreement pursuant to which the IPR petition was filed. (Ex. 1015, ¶2, ¶5; Ex.
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`1016, ¶4). Telular – not SkyBitz – authorized outside counsel to prepare the
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`petition, and funded the petition. (Ex. 1014, ¶8; Ex. 1015, ¶¶3-5; Ex. 1016, ¶¶5-7).
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`SkyBitz neither requested nor received Telular’s approval to participate or fund
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`this IPR. (Ex. 1014, ¶11). Such approval would be mandatory. (Id., ¶¶10-11).
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`The evidence shows that Skybitz lacked the ability to fund or control the IPR, and
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`never exercised any such funding or control. Thus, the inquiry should end here,
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`and the motion should be denied. See The Mangrove Partners Master Fund, Ltd.
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`v. Virnetx Inc., IPR2015-01046, paper 74, p.2 (PTAB 2016); see also Aruze
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`Gaming, IPR2014-01288, p.11; See Hughes, IPR2015-00059, paper 42, p.11.
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`Corning Optical and Zoll are distinguishable.
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`With respect to Corning Optical, Patent Owner attempts to analogize the
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`relationship between that case’s petitioner, unnamed parent corporation (Corning,
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`Inc.) and unnamed subsidiary to the relationship between Telular, SkyBitz and
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`
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`4
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`
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`GPSNA. (PO Motion, pp. 4-5). The Corning facts are quite different from the
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`facts in the instant case.
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`Here, unlike Corning, the Petitioner identified its controlling parent Telular
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`as an RPI. Unlike Corning, there is no evidence that Telular has allocated any
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`portion of the funding of the RPI to SkyBitz. (Ex. 1015, ¶¶5-6; Ex. 1016, ¶¶6-7).
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`Unlike Corning, the named parent Telular – not SkyBitz – retained and paid
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`counsel to prepare and file the IPR petition. Unlike Corning, Telular – not SkyBitz
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`– is fully responsible for the manufacture, marketing and sale of the accused
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`products. (Ex. 1014, ¶6).
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`Patent Owner also argues that “GPSNA’s [district court litigation] counsel
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`have been representing both GPSNA’s and SkyBitz’s interests.” (PO Motion,
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`p.4). Reliance on this evidence of corporate separation between GPSNA and
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`SkyBitz flatly contradicts Patent Owner’s claim that the two entities are alter egos.
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`Regardless, the evidence (Ex. 2008) merely shows counsel (Mr. Femal) acting on
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`behalf of a corporate parent (Telular) seeking patent peace to protect its business
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`moving forward. (Ex. 1016, ¶¶2-3). This is evidence of nothing more than Telular
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`exerting control over the litigation.
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`Patent Owner relies on Zoll in claiming that the settlement discussions
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`reflected in Ex. 2008 suggest that SkyBitz rather than Telular or GPSNA
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`exercised control over the instant IPR. (PO Motion, pp.4-5, citing Zoll Lifecor
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`
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`5
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`
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`Corp. v. Philips Elecs. N. Am. Corp., IPR2013-00618, 2014 WL 1253143, at *7
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`(PTAB Mar. 20, 2014). Yet the facts of this case are not at all similar to those of
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`Zoll. Here, the controlling parent Telular was disclosed as an RPI. Mr. Femal,
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`who is not IPR counsel to the Petitioner, acknowledges that he represents the
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`interests of the controlling parent corporation Telular. (Ex. 1016, ¶2). Unlike Zoll,
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`there has not been any event in this IPR proceeding (or the underlying litigation)
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`where a representative of SkyBitz took over the proceedings.
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`Even Under Patent Owner’s theory, the disclosure of GPSNA was
`adequate disclosure of SkyBitz.
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`Rather than establish evidence of control or funding by SkyBitz, Patent
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`
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`Owner’s motion skirts the issue by instead relying on a merger-based “alter ego”
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`theory. However, as shown below, Patent Owner’s analysis misses the mark. The
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`relevant authority on this issue holds that the Petition is not in error for naming a
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`pre-merged entity instead of its legal successor, even if the merger giving rise to
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`corporate successorship occurred before the filing of a petition. See Valeo North
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`America et al v. Magna Electronics, IPR2014-01203, paper 13, pp.7-9 (PTAB
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`2015).
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`In Valeo, the petition filed on July 25, 2014 named Valeo Inc. as a
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`petitioner. See Valeo, IPR2014-01203, paper 1. The one-year statutory bar date
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`for filing the IPR was July 26, 2014. See id., paper 12, p.1. The evidence showed
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`that before filing the petition, Valeo Inc. was merged into Valeo North America,
`6
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`
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`Inc., an entity which was not named as a petitioner or an RPI. “The Petition was
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`technically in error insofar as it named Valeo, Inc. when, at that time, the correct
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`name of the entity was Valeo North America, Inc. However, because Valeo North
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`America, Inc. is the legal successor to Valeo, Inc., the Petition was correct
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`substantively insofar as it identified the entity as a real party-in-interest.” (Id. at 8).
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`Patent Owner articulates no prejudice suffered by it due to the use by Petitioner of
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`‘Valeo, Inc.’ instead of ‘Valeo North America, Inc.’ … Accordingly, we are not
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`persuaded that the listing of ‘Valeo, Inc.’ instead of ‘Valeo North America, Inc.’
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`precludes us from considering the Petition.” (Id.).
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`Even if the Patent Owner could establish any showing of control or funding
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`by SkyBitz (of which there is none), its assertion that SkyBitz is an alter ego of
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`GPSNA (PO Motion, p.5) precludes termination. Under Valeo, the Petition is not
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`defective for naming GPSNA instead of SkyBitz because the Petition is “correct
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`substantively.” (Id.). Alter ego law further supports this conclusion, for “[i]f [alter
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`ego] is shown … all of the activities of the subsidiary are by definition activities of
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`the parent. … [under the alter ego theory] there is no separate legal entity at all.
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`Sprint Nextel Corp. v. iPCS, Inc., No. CIV.A. 3746-VCP, 2008 WL 2737409, at
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`
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`7
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`
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`*10 n.76 (Del. Ch. July 14, 2008) (emphasis added).3 Alter egos are one in the
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`same under the law. As such, disclosure of the Petitioner, the named defendant in
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`the litigation, is sufficient to disclose the alter ego SkyBitz as well.
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` In addition, Patent Owner is not prejudiced because SkyBitz is unable to
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`take any unilateral legal action or fund legal action, and therefore cannot control an
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`IPR petition or proceeding on its own. (Ex. 1014, ¶¶10-11). If GPSNA and
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`Telular are estopped by these proceedings, then a new petition could not be filed
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`by SkyBitz because any subsequent IPR petition filed by SkyBitz would have to
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`first be authorized by Telular, and thus suffer from the estoppel effect of this IPR.
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`(Ex. 1014, ¶10-11). Given these factors, disclosing GPSNA and Telular was
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`substantively correct, and the instant motion should fail.
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`The purpose of RPI disclosure is to protect patent owners from harassment
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`via successive petitions by the same or related parties. Trial Practice Guide at p.
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`48759. As demonstrated above, SkyBitz is incapable of taking or funding any
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`3 As Skybitz is a Delaware corporation, the law of Delaware is controlling on alter
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`ego issues. EBG Holdings LLC v. Vredezicht's Gravenhage 109 B.V., No. CIV.A.
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`3184-VCP, 2008 WL 4057745, at *11 (Del. Ch. Sept. 2, 2008) (“For the alter ego
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`theory, Delaware courts have looked to the law of the entity in determining
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`whether the entity's separate existence is to be disregarded.”) (quotation omitted).
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`
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`8
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`
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`legal action without Telular’s approval. SkyBitz has no means to act on its own.
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`If it did act, Telular would necessarily be an RPI. The policy for requiring RPI
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`disclosure would not be advanced in these circumstances.
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`In addition to Valeo, the estoppel provision of 35 U.S.C. § 315(e) applies to
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`petitioners, RPIs and any “privy of the petitioner.” The statute does not require
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`privies to be identified in the petition. 35 U.S.C. § 312(a); see also 37 C.F.R. §
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`42.8(b); see also Trial Practice Guide at 48759 (“The notion of ‘privity’ is more
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`expansive, encompassing parties that do not necessarily need to be identified in the
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`petition as a 'real party-in-interest.’’’). Thus, the statute contemplates that there
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`may be other entities that may be estopped, which do not need to be disclosed.
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`
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`Respectfully submitted,
`HILL, KERTSCHER & WHARTON, LLP
`
`
`
`
`
`/Vivek Ganti/
` Vivek Ganti
`Lead Counsel for Petitioner
`3350 Riverwood Pkwy, Suite 800 Registration No. 71,368
`Atlanta, GA 30339
`(770) 953-0995
`
`
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`Date: November 1, 2016
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`9
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`CERTIFICATION OF SERVICE
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`
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`The undersigned hereby certifies that the foregoing paper and supporting
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`materials were served via electronic mail on November 1, 2016, as agreed to by the
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`parties pursuant to 37 C.F.R. § 42.105, in its entirety on the following:
`
`Alan Whitehurst
`AlanWhitehurst@quinnemanuel.com
`Quinn-PerDiem@quinnemanuel.com
`Quinn Emanuel Urquhart & Sullivan, LLP
`777 6th Street NW 11th floor
`Washington, D.C. 20001-3706
`
`
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`Respectfully submitted,
`HILL, KERTSCHER & WHARTON, LLP
`
`
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`Date: November 1, 2016
`
`/Vivek Ganti/
` Vivek Ganti
`Lead Counsel for Petitioner
`3350 Riverwood Pkwy, Suite 800 Registration No. 71,368
`Atlanta, GA 30339
`(770) 953-0995
`
`
`
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`10
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