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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`D-Link Systems, Inc.,
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`Petitioner,
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`v.
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`Chrimar Systems, Inc.
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`Patent owner,
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`Case: IPR2016-01426
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`U.S. Patent No. 9,019,838
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`PETITIONER’S REPLY TO PATENT OWNER PRELIMINARY
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`RESPONSES REGARDING ARGUMENTS
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`ON REAL PARTY-IN-INTEREST
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`IPR2016-01426
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` U.S. Patent No. 9,019,838
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`D-Link Systems, Inc. is the only entity that funds or directs or has any
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`control over this proceeding or the co-pending litigation between the parties before
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`the Eastern District of Texas. Patent Owner (“PO”) itself chose to name D-Link
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`Systems, Inc. as the sole Defendant in the co-pending EDTX litigation. See, for
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`example, Exh. 2047.
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`I.
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`THE PETITION CORRECTLY IDENTIFIES D-LINK SYSTEMS,
`INC. AS THE SOLE REAL PARTY IN INTEREST
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`Without any actual proof, PO asserts that D-Link Corp, an overseas, legally
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`separate corporation of being an RPI simply because D-Link System is a
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`subsidiary of D-Link Corp. (POPR, 1 & 19.) However, as the overseas parent has
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`no actual control over this proceeding, PO seeks to find support for its arguments
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`by making misleading statements and drawing flawed conclusions.
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`a. PO Misconstrues Legally Required Financial Statements
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`POPR cites heavily to D-Link Corp.’s consolidated financial statements. D-
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`Link Corporation is a publicly held company in Taiwan (the Republic of China).
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`As shown in the very document that PO cites, Taiwanese security law requires that
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`a company list financial investment information and risks (including law suits) for
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`every subsidiary company. See, for example, Exh. 2038-14 (“entities that are
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`required to be included in the combined financial statements….under [certain
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`Taiwanese Security Regulatory rules] are the same as those included…in
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`conformity with [certain accounting standards].”)
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`As PO even acknowledges at footnote 25, D-Link Corporation “was required
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`to include” cases against Petitioner in its consolidated financial statement. It is a
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`simple security documentation requirement that has nothing to do with control or
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`direction of any of the suits. Beyond this, contrary to PO’s assertion, even if a
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`Petitioner and an affiliate were to share counsel in the co-pending litigation (which
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`is not even the case here), even that shared counsel does not establish the affiliate’s
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`ability to control Petitioner’s conduct in this proceeding. Syntroleum Corp. v.
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`Neste Oil Oyj, Case IPR2013- 00178, Paper 22 at 7 (Sept. 4, 2014).
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`Beyond all this, while not mentioned by PO, the D-Link Corp.’s Annual
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`Report shows the Petitioner is not even a wholly owned subsidiary. The Board has
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`found that even where an annual report stated that a parent company “conduct[s]
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`substantially all of [its] operations through subsidiaries,” it is not legally sufficient
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`to establish the patent “control[s] all aspects of Petitioner’s business, including
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`controlling [ ] inter partes review” (italic in original). TRW Automotive US LLC v.
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`Magna Electronics Inc., Case IPR2014-01497, Paper 7 at 8-9 (Mar. 19, 2015).
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`b. Factual Errors in PO’s “Products At Issue” Arguments
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`D-Link Systems does not purchase its products from D-Link Corporation.
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`PO is simply wrong about this. PO has further never asserted U.S. Patent No.
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`9,019,838 against D-Link Corp. or D-Link Corp.’s products. In fact, PO has never
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`sued D-Link Corp. for patent infringement - mostly likely because D-Link Corp.
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`does not sell any products in the United States. D-Link Corp. is simply not at issue
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`here – belying PO’s misleading statements about it.
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`II. CONCLUSION
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`Patent Owner must sufficiently demonstrate with evidence that a parent
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`controls a subsidiary’s participation in the inter partes review. Here, the
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`arguments set forth in the POPR are all based on misconstruing or misstating either
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`documents or business practices. These flawed arguments cannot establish that D-
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`Link Corp controls or directs this IPR – because it factually does not.
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`Date: November 10, 2016
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`Respectfully submitted,
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`/s/Victoria Hao
`Victoria Hao, Reg. No. 47,630
`Attorney for Petitioner
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`CERTIFICATION OF SERVICE
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`The undersigned hereby certifies that the foregoing Reply is being served via
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`electronic mail (e-mail) to Patent Owner counsels of record (Chrimar@tklaw.com).
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`/Victoria Hao, Reg. No. 47,630/
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`Date: November 10, 2016
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`4
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