UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`GLOBAL TEL*LINK CORP.,
`Petitioner
`
`SECURUS TECHNOLOGIES, INC.,
`Patent Owner
`
`1PR2015-01223 (U.S. Patent No. 7,961,860)
`
`PETITIONER’S MOTION TO EXCLUDE EXHIBITS 2006 AND 2011
`
`Mail Stop "PATENT BOARD"
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 223 13-1450
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`GLOBAL TEL*LINK CORP.,
`Petitioner
`
`SECURUS TECHNOLOGIES, INC.,
`Patent Owner
`
`1PR2015-01223 (U.S. Patent No. 7,961,860)
`
`PETITIONER’S MOTION TO EXCLUDE EXHIBITS 2006 AND 2011
`
`Mail Stop "PATENT BOARD"
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 223 13-1450
`
`
`
`TABLE OF CONTENTS
`
`I. (cid:9)
`
`II. (cid:9)
`
`Factual Background ......................................................................................... 1
`
`Rule 408 bars the admission of Exhibits 2006 and 2011 because they
`contain settlement statements and are offered to impeach or contradict
`GTL’s statements concerning RPI ................................................................... 2
`
`A.
`
`B.
`
`Rule 408 broadly prohibits admitting the content of settlement
`discussions for the purpose of impeachment.........................................2
`
`Rule 408 applies to the statements in Exhibits 2006 and 2011
`because they contain settlement statements and are offered to
`impeach or contradict GTL. .................................................................. 4
`
`III. (cid:9)
`
`Conclusion.......................................................................................................
`
`5
`
`1
`
`
`
`Petitioner Global Tel*Link Corporation ("GTL") moves to exclude Exhibits
`
`2006 and 2011, two declarations that Patent Owner Securus Technologies, Inc.
`
`submitted to support its Motion for Additional Discovery (Paper 11). These
`
`declarations contain information allegedly communicated by GTL’s CEO, Brian
`
`Oliver, during earlier settlement negotiations between GTL and Securus(cid:151)even
`
`though the parties agreed that all information communicated at the negotiations
`
`"[would] be for settlement purposes only and subject to Federal Rule of Evidence
`
`408." Ex. 1013. The Board should exclude these declarations because their use in
`
`these proceedings violates the parties’ agreement and is prohibited by FRE 408.
`
`I. (cid:9)
`
`Factual Background
`
`In September 2013 and April 2014, GTL and Securus met to negotiate a
`
`possible settlement of intellectual-property disputes over patents covering the same
`
`technologies involved in these proceedings. As a condition to those meetings, the
`
`parties agreed: "any information exchanged at or in connection with this meeting
`
`will be for settlement purposes only and subject to Federal Rule of Evidence 408."
`
`Ex. 1013. Securus’s recent Motion for Additional Discovery seeks information
`
`related to the real party-in-interest ("RPI"). Specifically, Securus alleges that
`
`American Securities should have been named as an RPI. To support its motion,
`
`Securus filed two declarations purporting to recount information communicated at
`
`the parties’ earlier settlement talks: "GTL has conveyed to Securus that American
`
`1
`
`
`
`Securities, not GTL, controls disputed intellectual property matters" because
`
`"GTL’s CEO, Brian Oliver, stated that he could not accept any settlement offer
`
`without American Securities’s prior approval." Paper 11 at 1; Exs. 2006, ¶J3-4;
`
`2011, ¶2. GTL sought the Board’s authorization to exclude Exhibits 2006 and
`
`2011. The Board authorized this motion.
`
`II. Rule 408 bars the admission of Exhibits 2006 and 2011 because they
`contain settlement statements and are offered to impeach or contradict
`GTL’s statements concerning RPI.
`
`A. (cid:9)
`
`Rule 408 broadly prohibits admitting the content of settlement
`discussions for the purpose of impeachment.
`
`Rule 408 prohibits admitting settlement discussions to impeach a party’s
`
`prior statement:
`
`(a) ... Evidence of the following is not admissible (cid:9)
`
`on behalf of any
`
`party - either to prove or disprove the validity or amount of a
`
`disputed claim or to impeach by a prior inconsistent statement or a
`
`contradiction: ... conduct or a statement made during compromise
`
`negotiations about the claim.
`
`FRE 408(a). In 2006, Rule 408 was broadened to prohibit admitting into evidence
`
`statements made during settlement negotiations for purposes of impeachment by a
`
`prior inconsistent statement or a contradiction. And courts recognize that Rule
`
`408’s amended text serves this purpose. See, e.g., Eid v. Saint-Gobain Abrasives,
`
`Inc., 377 Fed. Appx. 438, 444-45, 445 n.6 (6th Cir. 2010) ("The plain text of Rule
`
`408 precludes the use of settlement communications ’to impeach through prior
`
`2
`
`
`
`inconsistent statement or contradiction ... Eid appears to quote an older version
`
`that did not include this language"); U.S. v. Park, 2008 WL 2338298, *6 (C.D. Cal.
`
`May 27, 2008) (finding it improper to use settlement communications for
`
`impeachment purposes). And the comments to Rule 408 state this broadening
`
`amendment serves to prevent "broad impeachment [that] would tend to swallow
`
`the exclusionary rule and would impair the public policy of promoting
`
`settlements." FRE 408, 2006 Advisory Committee Note.
`
`What is more, "[t]he dispute [involving settlement negotiations] need not be
`
`the one being tried in the case where the settlement is being offered" to fall within
`
`Rule 408’s prohibition. See, e.g., Lyondell Chem. Co. v. Occidental Chem. Corp.,
`
`608 F.3d 284, 296-98 (5th Cir. 2010) (internal citations omitted); Playboy Enter.,
`
`Inc. v. Chuckleberry Publ’g, Inc., 687 F.2d 563 (2d Cir. 1982) (evidence of
`
`plaintiff’s settlement dealings with another alleged infringer were not admissible as
`
`evidence); Scaramuzzo v. Glenmore Distilleries Co., 501 F. Supp. 727, 733 (N.D.
`
`Ill. 1980) ("[ut would be logically inconsistent to uphold the vitality of Rule 408,
`
`while at the same time holding that a settlement offer could be used against the
`
`offeror in related cases").
`
`Rule 408 excepts from its prohibition a narrow set of purposes: "[t]he court
`
`may admit this evidence for another purpose,
`
`[i.e., a purpose not expressly
`
`prohibited by FRE 408(a),] such as proving a witness’s bias or prejudice, negating
`
`3
`
`
`
`a contention of undue delay, or proving an effort to obstruct a criminal
`
`investigation or prosecution." FRE 408(b). But courts have narrowly applied this
`
`exception limiting it, typically, to proving prejudice, bad acts, fraud, discoverable
`
`facts, state of mind, notice, or claims arising out of the settlement process. See,
`
`e.g., Arnold v. Wilder, 657 F.3d 353, 366-67 (6th Cir. 2011); Ray Comm’n, Inc. v.
`
`Clear Channel Comm’n., 673 F.3d 294, 306 (4th Cir. 2012); U.S. v. Austin, 54
`
`F.3d 394, 400 (7th Cir. 1995); Westchester Specialty Ins. Servs., Inc. v. US. Fire
`
`Ins. Co., 119 F.3d 1505, 1512-13 (11th Cir. 1997). And ultimately, "when the
`
`issue [of admissibility] is doubtful, the better practice is to exclude evidence of
`
`compromises or compromise offers." Weems v. Tyson Foods, Inc., 665 F.3d 958,
`
`965 (8th Cir. 2011) (citation omitted).
`
`B. (cid:9)
`
`Rule 408 applies to the statements in Exhibits 2006 and 2011 because
`they contain settlement statements and are offered to impeach or
`contradict GTL.
`
`Securus admits that the alleged statements it has offered are from settlement
`
`negotiations between the parties. Ex. 2006, ¶2-4; 2011, ¶2. And Securus has
`
`offered these alleged statements for the purpose of impeaching or contradicting
`
`GTL’s prior statement that it is the sole RPI. As such, Securus has impermissibly
`
`offered these statements into evidence in contravention of Rule and the parties’
`
`agreement. Ex. 1013; Eid, 377 Fed. Appx. at 444-45, 445 n.6; Park, 2008 WL
`
`2338298 at *6. And the alleged statements offered by Securus are from settlement
`
`
`
`negotiations centered on ending the parties’ ongoing disputes. The Board should,
`
`therefore, adopt the court’s conclusion in Lyondell, i.e., that "offering of settlement
`
`evidence arising out of a shared factual nexus and bearing directly on present
`
`issues of liability between many of the same parties falls within Rule 408’s
`
`prohibition." Lyondell, 608 F.3d at 299; see also Scaramuzzo, 501 F. Supp. at 733.
`
`Lastly, no exception to Rule 408 applies. Securus is not offering the alleged
`
`statements for any of the enumerated categories that courts have permitted
`
`settlement discussions to be admitted for under "another purpose," such as for
`
`proving prejudice, bad acts, fraud, discoverable facts, state of mind, notice, or
`
`claims that arise out of the settlement process.
`
`III. Conclusion
`
`In sum, Securus offers the alleged settlement-negotiation statements in
`
`Exhibits 2006 and 2011 for purposes expressly prohibited by Rule 408 and in
`
`contravention of how Rule 408 has been applied(cid:151)i.e., to impeach GTL. The
`
`Board should exclude Exhibits 2006 and 2011.
`
`Respectfully submitted,
`STERNE KESSLER, GOLDSTEIN & Fox P.L.L.C.
`
`Date: September 10, 2015 (cid:9)
`1100 New York Avenue, N.W. (cid:9)
`Washington, D.C. 20005
`(202) 371-2600
`
`Michael Ray(Reg.No. 33,997)
`
`Counsel for Petitioner
`
`5
`
`
`
`CERTIFICATE OF SERVICE (37 C.F.R. 42.6(e))
`
`The undersigned hereby certifies that the above-captioned PETITIONER’S
`
`MOTION TO EXCLUDE EXHIBITS 2006 AND 2011 and ASSOCIATED
`
`EXHIBIT were served in their entireties on September 10, 2015, via email on the
`
`following:
`
`Phone: (571) 203-2754
`Erika H. Amer (Lead Counsel) Finnegan, (cid:9)
`Henderson, Farabow, Garrett & Dunner, LLP Fax: (202) 408-4400
`11955 Freedom Drive (cid:9)
`erika.amer@finnegan.com
`Reston, Virginia 20 190-5675 (cid:9)
`USPTO Reg. No. 57,540
`
`Darren M. Jiron (Back-up Counsel)
`Finnegan, Henderson, Farabow,
`Garrett & Dunner, LLP
`11955 Freedom Drive
`Reston, Virginia 20 190-5675
`
`Michael V. Young (Back-up Counsel)
`Finnegan, Henderson, Farabow,
`Garrett & Dunner, LLP
`11955 Freedom Drive
`Reston, Virginia 20190-5675
`
`Daniel C. Tucker (Back-up Counsel)
`Finnegan, Henderson, Farabow,
`Garrett & Dunner, LLP
`11955 Freedom Drive
`Reston, Virginia 20190-5675
`
`Phone: (571) 203-2729
`Fax: (202) 408-4400
`darren.jiron@flnnegan.com
`USPTO Reg. No. 45,777
`
`Phone: (571) 203-2788
`Fax: (202) 408-4400
`michael.young@flnnegan.com
`USPTO Reg. No. 61,180
`
`Phone: (571) 203-2793
`Fax: (202) 408-4400
`daniel.tucker@flnnegan.com
`USPTO Reg. No. 62,781
`
`
`
`Brandon S. Bludau (Back-up Counsel) (cid:9)
`Finnegan, Henderson, Farabow, (cid:9)
`Garrett & Dunner, LLP (cid:9)
`11955 Freedom Drive (cid:9)
`Reston, Virginia 20190-5675
`
`Phone: (571) 203-2745
`Fax: (202) 408-4400
`brandon.b1udaufinnegan.com
`USPTO Reg. No. 62,140
`
`STERNE, KESSLER, GOLDSTEN & Fox P.L.L.C.
`
`Michael B. Ray (Reg. No. 33,997)
`Counsel for Petitioner
`
`Date: September 10, 2015
`1100 New York Avenue, N.W.
`Washington, D.C. 20005
`(202) 371-2600
`
`2
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