`Filed: September 18, 2019
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
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`____________________________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________________________________________
`
`FOUNDATION MEDICINE, INC.,
`Petitioner,
`v.
`
`GUARDANT HEALTH, INC.,
`Patent Owner.
`
`_____________________
`
`Case No. IPR2019-00636
`Case No. IPR2019-00637
`U.S. Patent No. 9,902,992
`_____________________
`
`PETITIONER’S REQUEST FOR REHEARING
`PURSUANT TO 37 C.F.R. § 42.71(d)
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`
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`IPR2019-00636; IPR2019-00637
`Patent No. 9,902,992
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`TABLE OF CONTENTS
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`INTRODUCTION .............................................................................................. 1
`I.
`II. LEGAL STANDARD ........................................................................................ 2
`III. BASIS FOR REQUESTED RELIEF ................................................................. 3
`A. The Board misapprehended Petitioner’s obviousness argument and
`improperly required Petitioner to meet an inherency standard to establish
`the obviousness of tagging “at least 20%” of cfDNA molecules ................. 3
`B. The Board overlooked Petitioner’s express identification of motivation to
`improve ligation efficiency ......................................................................... 10
`IV. CONCLUSION ................................................................................................ 12
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`i
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`IPR2019-00636; IPR2019-00637
`Patent No. 9,902,992
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`TABLE OF AUTHORITIES
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`Page(s)
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`
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`Federal Cases
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`In re Napier, 55 F.3d 610 (Fed. Cir. 1995) ................................................................ 3
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`In re Spormann, 363 F.2d 444 (CCPA 1966) ............................................................ 4
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`KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007) .................................................. 6
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`Par Pharm., Inc. v. TWi Pharm., Inc., 773 F.3d 1186 (Fed. Cir. 2014) .................... 4
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`Southwire Co. v. Cerro Wire LLC, 870 F.3d 1306 (Fed. Cir. 2017) ......................... 4
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`Star Fruits S.N.C. v. United States, 393 F.3d 1277 (Fed. Cir. 2005) ........................ 2
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`W.L. Gore & Assoc. v. Garlock Inc., 721 F.2d 1540 (Fed. Cir. 1983) ...................... 4
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`Patent Trial and Appeal Board Cases
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`Alarm.com Inc. v. Vivint, Inc., IPR2016-00173, Paper 14 (PTAB May 10,
`2016) ...................................................................................................................... 8, 9
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`Bungie, Inc. v. Worlds Inc., IPR2015-01319, Paper 14, (PTAB Dec. 7, 2015) .... 5, 8
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`Cepheid v. Roche Molecular Systems, Inc., IPR2015-00881, Paper 9 (PTAB
`Sep. 17, 2015) ........................................................................................................ 6, 9
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`Telesign Corp. v. Twilio Inc., IPR2017-01976, Paper 11 (PTAB Mar. 9,
`2018) ...................................................................................................................... 6, 9
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`Unified Patents Inc. v. Velos Media, LLC, IPR2019-00194, Paper 8 (PTAB
`May 16, 2019) ........................................................................................................ 7, 9
`
`Regulations
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`37 C.F.R. § 42.71 ................................................................................................. 2, 12
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`ii
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`
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`I.
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`IPR2019-00636; IPR2019-00637
`Patent No. 9,902,992
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`INTRODUCTION
`Petitioner respectfully requests rehearing of the Patent Trial and Appeal
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`Board’s (“the Board”) decision denying institution of trial on inter partes review
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`petitions IPR2019-00636, challenging claims 1-11, 13, and 15-26 of U.S. Patent No.
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`9,902,992 (“the '992 patent”), and IPR2019-00637, challenging claims 11, 12, 14,
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`and 27-33 of the '992 patent. See Paper 10 (“Decision”).1 The Board’s decision was
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`premised on the conclusion that Petitioner did not sufficiently demonstrate that the
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`prior art “inherently” taught the claim limitation of tagging “at least 20% of the
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`cfDNA molecules by ligation.” Decision at 15. But Petitioner never made an
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`inherency argument. Instead, the Board was led to error by Patent Owner’s
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`mischaracterization of Petitioner’s obviousness argument. This error prevented the
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`Board from applying the correct legal standard and fairly considering the argument
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`and evidence actually provided by Petitioner.
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`As a result, the Board committed several errors in the Decision. First, the
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`Board acted contrary to multiple Board decisions declining to apply an inherency
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`standard where a Patent Owner mischaracterizes an obviousness argument as relying
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`on an inherency theory. Here, the Board misapprehended Petitioner’s obviousness
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`argument and improperly required Petitioner to demonstrate that Schmitt inherently
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`1 Unless stated otherwise, paper and exhibit numbers refer to those filed in
`IPR2019-00636.
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`1
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`
`
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`disclosed tagging “at least 20%” of cfDNA molecules by ligation. Second, the
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`IPR2019-00636; IPR2019-00637
`Patent No. 9,902,992
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`Board erred by overlooking Petitioner’s express arguments regarding motivation to
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`improve ligation efficiency. Petitioner’s explanation, ignored by the Preliminary
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`Response and the Decision, provides the requisite motivation to modify the method
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`of Schmitt to improve ligation efficiency.
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`Petitioner respectfully requests rehearing and institution of each ground in its
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`petitions. Additionally, Petitioner is filing a request for a Precedential Opinion Panel
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`(POP) along with this Request for Rehearing.
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`II. LEGAL STANDARD
`A party requesting rehearing must show that a decision should be modified by
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`identifying “all matters the party believes the Board misapprehended or overlooked,
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`and the place where each matter was previously addressed in a motion, an
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`opposition, or a reply.” 37 C.F.R. § 42.71(d). The Board reviews requests for
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`rehearing under an abuse of discretion standard. Id. at § 42.71(c). “An abuse of
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`discretion occurs where the decision is based on an erroneous interpretation of the
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`law, on factual findings that are not supported by substantial evidence, or represents
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`an unreasonable judgment in weighing relevant factors.” Star Fruits S.N.C. v.
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`United States, 393 F.3d 1277, 1281 (Fed. Cir. 2005).
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`2
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`IPR2019-00636; IPR2019-00637
`Patent No. 9,902,992
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`III. BASIS FOR REQUESTED RELIEF
`A. The Board misapprehended Petitioner’s obviousness argument
`and improperly required Petitioner to meet an inherency
`standard to establish the obviousness of tagging “at least 20%” of
`cfDNA molecules
`In the Petitions, Petitioner explained why a person of ordinary skill in the art
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`(“POSA”) “would have understood” Schmitt to teach tagging “at least 20% of the
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`cfDNA molecules” (Paper 22 at 39-41, emphasis added); yet, misled by the Patent
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`Owner3, the Board erroneously applied an inherency standard to Petitioner’s
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`argument in denying institution. Decision at 14 (“Petitioner repeatedly argues that
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`a person of ordinary skill in the art would have known that the ligation methods
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`taught by Schmitt would result in ‘at least 10-20% yield’ of tagged DNA fragments.
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`On its face, Petitioner’s inherency argument fails.”). In making this error, the Board
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`overlooked multiple Board decisions declining to apply an inherency standard where
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`a Petitioner’s obviousness argument has been mischaracterized by a Patent Owner.
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`Thus, the Board’s determination misapprehends the argument and evidence set forth
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`by Petitioner regarding the obviousness of this limitation.
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`Although “[t]he inherent teaching of a prior art reference, a question of fact,
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`arises both in the context of anticipation and obviousness,” In re Napier, 55 F.3d
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`610, 613 (Fed. Cir. 1995), a determination of obviousness does not require a finding
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`2 Paper 2 (“Petition”).
`3 Paper 7 (“Prelim. Resp.”), at 9-13.
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`3
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`
`
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`of inherency. See Southwire Co. v. Cerro Wire LLC, 870 F.3d 1306, 1311 (Fed. Cir.
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`IPR2019-00636; IPR2019-00637
`Patent No. 9,902,992
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`2017) (“[A]lthough [the Board] improperly invoked inherency, it need not have. It
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`made the necessary underlying factual findings to support an obviousness
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`determination.”). “Inherency and obviousness are distinct concepts.” W.L. Gore &
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`Assoc. v. Garlock Inc., 721 F.2d 1540, 1555 (Fed. Cir. 1983) (citing In re Spormann,
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`363 F.2d 444, 448 (CCPA 1966)). Inherency requires “a high standard [] to establish
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`the existence of a claim limitation in the prior art in an obviousness analysis….” Par
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`Pharm., Inc. v. TWi Pharm., Inc., 773 F.3d 1186, 1195-96 (Fed. Cir. 2014).
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`While the Board recognized Petitioner’s arguments that a POSA would have
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`understood Schmitt to teach tagging at least 20% of the cfDNA molecules, the Board
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`imposed an inherency analysis where none was required. Decision at 12 (“Petitioner
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`argues that Schmitt teaches using ‘state of the art ligation techniques, which a
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`[person of ordinary skill in the art] would have understood to result in at least a 10-
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`20% yield of tagged DNA fragments’ . . . According to Petitioner, a person of
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`ordinary skill in the art would have known that the blunt-end technique ‘was capable
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`of generating a 10-20% final library yield . . .’”) (emphasis added). Specifically, the
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`Board relied on Petitioner’s statement that “Schmitt does not explicitly recite tagging
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`‘at least 20%’ of the cfDNA molecules” and Patent’s Owner’s arguments to
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`improperly conclude that Petitioner was relying on inherency. Id. at 13 (“Having
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`considered the parties’ arguments and evidence, we determine that Patent Owner has
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`4
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`the better position. Petitioner admits that Schmitt does not expressly teach tagging
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`IPR2019-00636; IPR2019-00637
`Patent No. 9,902,992
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`‘at least 20% of the cfDNA molecules.’ Pet. 39. Thus, although not stated as such,
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`Petitioner argues Schmitt inherently teaches the limitation.”). However, the absence
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`of an express disclosure of a claim limitation by a prior art reference in an
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`obviousness analysis does not necessarily result in reliance on an inherency theory.
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`See Bungie, Inc. v. Worlds Inc., IPR2015-01319, Paper 14, at 13 (PTAB Dec. 7,
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`2015) (“Patent Owner’s [inherency] arguments generally overlook that because this
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`is an obviousness ground, Petitioner need not show that Funkhouser ‘expressly
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`disclose[s]’ the [claim limitation] step and instead must establish only that
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`Funkhouser teaches or suggests these actions.”). Moreover, nowhere in its Decision
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`does the Board identify a single instance wherein Petitioner made an inherency
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`argument. Rather, led to error by the Patent Owner, the Board deviated from
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`Petitioner’s arguments and imposed its own inherency theory. Decision at 13.
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`(“[A]lthough not stated as such, Petitioner argues that Schmitt inherently teaches
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`this limitation.”) (emphasis added). Petitioner made no such argument. In
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`committing this error, the Board acted contrary to multiple Board decisions declining
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`to apply an inherency standard where a Patent Owner mischaracterizes an
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`obviousness argument as relying on an inherency theory.
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`As one PTAB panel noted in declining to accept a Patent Owner’s
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`characterization that a Petitioner relied on an inherency theory, “there must be some
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`5
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`articulated reasoning with some rational underpinning to support the legal
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`IPR2019-00636; IPR2019-00637
`Patent No. 9,902,992
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`conclusion of obviousness, but such reasoning need not seek out precise teachings
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`directed to the specific subject matter of the challenged claim.” Cepheid v. Roche
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`Molecular Systems, Inc., IPR2015-00881, Paper 9, at 11 (PTAB Sep. 17, 2015)
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`(citing KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 418 (2007) (internal quotation
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`marks omitted)). Instead, “the background knowledge possessed by a person having
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`ordinary skill in the art is an integral part of an obviousness analysis,” as are the
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`inferences and creative steps a person of ordinary skill in the art would employ. Id.;
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`see also Telesign Corp. v. Twilio Inc., IPR2017-01976, Paper 11, at 11 (PTAB Mar.
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`9, 2018) (“Petitioner does not appear to rely on inherency. Rather, [] Petitioner relies
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`on the common knowledge of a person of ordinary skill in the art to show that it
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`would have been obvious that the message sent over the Internet in ETSI 391-4 is
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`addressed to the recipient’s URI.”) (emphasis added).
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`Here, Petitioner provided an articulated reasoning with a rational
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`underpinning as to why a POSA would have viewed certain disclosures in Schmitt
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`as teaching tagging “at least 20%” of the DNA molecules. Specifically, the evidence
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`in the Petition set forth that (1) Schmitt teaches using state of the art ligation
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`techniques in its Duplex Consensus Sequencing (“DCS”) method, such as blunt-end
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`ligation and TA ligation (Petition at 39, citing EX1011 at 7:58-62; 15:5-20); (2)
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`Schmitt teaches that when using TA ligation in its DCS method, the “efficiency of
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`6
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`adaptor ligation” is “comparable to those seen with standard library preparation
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`IPR2019-00636; IPR2019-00637
`Patent No. 9,902,992
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`methods” (id. at 40, citing EX1011 at 22:43-56;); (3) it was known in the art at the
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`time of the invention that standard blunt end ligation methods generated a 10-20%
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`library yield (id. at 39, citing declaration of Dr. Stacey Gabriel at ¶131; EX1061 at
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`2, 7); and (4) it was also known in the art at the time of the invention that TA ligation
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`was “a superior technique” that was “likely to result in higher yield of tagged
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`fragments” compared to blunt-end ligation (id., citing declaration of Dr. Stacey
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`Gabriel at ¶131; EX1062 at 1006) (emphasis added). Based on this evidence,
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`Petitioner argued that a POSA would have understood Schmitt to teach achieving a
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`10-20% -- or higher -- yield. Petition at 40. Thus, Petitioner asserted what a POSA
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`would understand Schmitt to disclose, not that following Schmitt’s method
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`necessarily produces a certain result. See Unified Patents Inc. v. Velos Media, LLC,
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`IPR2019-00194, Paper 8, at 10 (PTAB May 16, 2019) (declining to find a Petitioner
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`relied on inherency where the Petitioner’s argument was “an assertion of what a
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`person of skill would understand Cheon to disclose, not an assertion that following
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`Cheon’s disclosures necessarily produces a certain result.”).
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`Moreover, there is no indication in Petitioner’s brief that it was relying on an
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`inherency theory. As another PTAB panel noted in declining to find that a Petitioner
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`relied on an inherency theory, “[n]owhere in this discussion regarding the []
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`limitation of independent claim 1 does [Petitioner] use terms such as ‘inherent’ or
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`7
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`‘necessarily present’ that would lead [the Board] to believe [Petitioner] is presenting
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`IPR2019-00636; IPR2019-00637
`Patent No. 9,902,992
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`and developing an inherency argument.” Alarm.com Inc. v. Vivint, Inc., IPR2016-
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`00173, Paper 14, at 15 (PTAB May 10, 2016). As in Alarm, Petitioner’s obviousness
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`analysis regarding the “at least 20%” limitation of claim 1 also does not use terms
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`such as “inherent” or “necessarily present” that would lead one to conclude
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`Petitioner was suggesting an inherency argument.
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`Petitioner respectfully submits that, led to error by Patent Owner’s
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`mischaracterization of Petitioner’s obviousness
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`analysis,
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`the Decision
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`misapprehends these arguments, applies the wrong legal standard, and, therefore,
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`does not properly consider the substantial evidence of obviousness provided by
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`Petitioner. Patent Owner argued that “Petitioner concedes that ‘Schmitt does not
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`explicitly recite tagging at least 20% of the cfDNA’” and “the petition materials fail
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`to establish [at least a 10-20% yield of tagged DNA fragments] is necessarily
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`present in Schmitt.” Prelim. Resp. at 9; Decision at 11 (emphasis added). While
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`Petitioner acknowledged that Schmitt did not explicitly recite tagging “at least 20%”
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`of the cfDNA, the absence of an express disclosure of a claim limitation by a prior
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`art reference in an obviousness analysis does not result in reliance on an inherency
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`theory. See Bungie, IPR2015-01319, Paper 14, at 13 (“Patent Owner’s [inherency]
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`arguments generally overlook that because this is an obviousness ground, Petitioner
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`8
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`
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`need not show that Funkhouser ‘expressly disclose[s]’ the [claim limitation] step and
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`IPR2019-00636; IPR2019-00637
`Patent No. 9,902,992
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`instead must establish only that Funkhouser teaches or suggests these actions.”).
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`The Board’s application of an inherency standard to Petitioner’s obviousness
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`argument is, therefore, erroneous. Instead, the Petition provided sufficient evidence
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`that a POSA, with knowledge of the state of the art, would understand the method
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`of Schmitt to achieve a 10-20% or higher ligation efficiency. Petitioner respectfully
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`submits that the Board’s assertion that “Petitioner argues Schmitt inherently teaches
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`the [‘at least 20%’] limitation” (Decision at 13) and the finding that “the ligation
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`methods taught by Schmitt may result in at least 20% yield is not sufficient”
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`(Decision at 14) misapprehends Petitioner’s argument and evidence and is contrary
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`to multiple Board decisions. See, e.g., Alarm, IPR2016-00173, Paper 14; Bungie,
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`IPR2015-01319, Paper 14; Cepheid, IPR2015-00881, Paper 9; Telesign, IPR2017-
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`01976, Paper 11; Unified Patents, IPR2019-00194, Paper 8. As demonstrated by
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`those panels, it is improper to hold Petitioner to the inherency standard where a
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`Petitioner’s obviousness argument has been mischaracterized by a Patent Owner. A
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`rehearing in this matter would correct the Board’s misapprehension and allow
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`Petitioner’s obviousness grounds to reach trial.
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`9
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`IPR2019-00636; IPR2019-00637
`Patent No. 9,902,992
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`B.
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`The Board overlooked Petitioner’s express identification of
`motivation to improve ligation efficiency
`The Board’s conclusion that “Petitioner has not shown sufficiently why a
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`person of ordinary skill in the art would have modified Schmitt to tag ‘at least 20%’
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`of the DNA molecules” (Decision at 15, emphasis in original) overlooks the
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`evidence Petitioner provided that a POSA would have been motivated to improve
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`ligation efficiency.
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`Petitioner explained that “[t]he relevance of ligation efficiency was well-
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`known to the POSA, which was to improve the sequencing library’s diversity or
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`representation of the genome by optimizing one or more steps of sample
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`preparation.” Petition at 39. Petitioner’s explanation, ignored by the Decision and
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`the Preliminary Response, explains why a POSA would have been motivated to
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`improve ligation efficiency according to techniques known in the art. In its Petition,
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`Petitioner demonstrated how ligation efficiency as disclosed in Schmitt would be
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`optimized. Tagging at least 20% of the cfDNA molecules would have been obvious
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`because a POSA would have understood that “ligation efficiency could be improved
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`using a variety of techniques known in the art” as of the time of the invention.
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`Petition at 40, 41; Decision at 14. Petitioner cited to Quail (EX1062), which teaches
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`that ligation efficiency, among other aspects of sample preparation, can be improved
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`using ultrapure commercial ligases. Petition at 40; EX1062 at 1006-1007. Petitioner
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`10
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`
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`also cited to Lohman (EX1061), which teaches that the New England Biolabs (NEB)
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`IPR2019-00636; IPR2019-00637
`Patent No. 9,902,992
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`“Quick Ligation Kit” was a known kit that improved ligation efficiency. Petition at
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`40-41; EX1063 at 1, 3, Figure 2. Because it would have been desirable to improve
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`the sequencing library’s diversity or representation of the genome, a POSA trying to
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`detect genetic aberrations with the DCS method of Schmitt would have been
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`motivated to modify the method of Schmitt to optimize sample preparation, e.g.,
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`improve ligation efficiency, based on the techniques known in the art. The Petition
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`thus sufficiently addressed why and how a POSA would have modified Schmitt to
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`tag “at least 20%” of the DNA molecules.
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`Nevertheless, the Board overlooked Petitioner’s express arguments regarding
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`motivation to improve ligation efficiency. In its analysis, the Board acknowledged
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`that Petitioner argued “that ‘tagging at least 20% of the cfDNA molecules’ would
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`have been obvious because ligation efficiency ‘could be improved using a variety of
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`techniques.’” Decision at 14. However, without even addressing Petitioner’s
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`explanation of why a POSA would have been motivated to improve ligation
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`efficiency, the Board found that “Petitioner and its declarant, Dr. Gabriel, simply
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`assert that kits were available in September 2012 that could improve ligation
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`efficiency” (id. at 14-15, emphasis added) and concluded that “Petitioner has not
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`shown sufficiently why a person of ordinary skill in the art would have modified
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`Schmitt to tag ‘at least 20%’ of the DNA molecules.” Id. at 15 (emphasis in original).
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`11
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`IPR2019-00636; IPR2019-00637
`Patent No. 9,902,992
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`The Board’s conclusion erroneously overlooked the evidence Petitioner
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`
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`provided that a POSA would have been motivated to improve ligation efficiency.
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`Because the Board’s obviousness conclusions hinged on this error, a rehearing to
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`clarify the record and allow Petitioner’s obviousness grounds to reach trial is
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`warranted.
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`IV. CONCLUSION
`For the foregoing reasons, Petitioner respectfully requests rehearing under 37
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`C.F.R. § 42.71 and institution of IPR2019-00637, challenging claims 1-11, 13, and
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`15-26 of the ’992 patent, and of IPR2019-00638, challenging claims 11, 12, 14, and
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`27 of the ’992 patent.
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`
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` Respectfully submitted,
`
`Date: September 18, 2019
`
` By: / Rolando Medina /
`
`
`
`
`
` Rolando Medina, Reg. No. 54,756
`Eric J. Marandett, pro hac vice to be filed
`Sophie F. Wang, pro hac vice to be filed
`Stephanie L. Schonewald, Reg. No. 72,452
`CHOATE, HALL & STEWART LLP
`Two International Place
`Boston, MA 02110
`617-248-5000
`Attorneys for Petitioner
`
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`12
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`IPR2019-00636; IPR2019-00637
`Patent No. 9,902,992
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that the foregoing PETITIONER’S
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`REQUEST FOR REHEARING PURSUANT TO 37 C.F.R. § 42.71(d) was
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`served electronically in its entirety on September 18, 2019 via electronic mail to
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`the following attorneys of record:
`
` mrosato@wsgr.com
` sparmelee@wsgr.com
` sgerrard@wsgr.com
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`Respectfully submitted,
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`Date: September 18, 2019
`
`By: / Rolando Medina /
`
`
`
`
`
`
`
`Rolando Medina, Reg. No. 54,756
`Eric J. Marandett, pro hac vice to be filed
`Sophie F. Wang, pro hac vice to be filed
`Stephanie L. Schonewald, Reg. No. 72,452
`CHOATE, HALL & STEWART LLP
`Two International Place
`Boston, MA 02110
`617-248-5000
`Attorneys for Petitioner
`
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`13
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