Trials@uspto.gov
`571-272-7822
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` Paper 22
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` Entered: March 10, 2016
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`PRONG, INC.,
`Petitioner,
`
`v.
`
`YEOSHUA SORIAS,
`Patent Owner.
`____________
`
`Case IPR2015-01317
`Patent 8,712,486 B2
`____________
`
`
`Before SALLY C. MEDLEY, GLENN J. PERRY, and
`KIMBERLY McGRAW, Administrative Patent Judges.
`
`McGRAW, Administrative Patent Judge.
`
`
`
`
`
`
`
`ORDER
`Conduct of the Proceeding
`37 C.F.R. § 42.5
`
`
`
`
`571-272-7822
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`
`
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` Paper 22
`
`
`
` Entered: March 10, 2016
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`PRONG, INC.,
`Petitioner,
`
`v.
`
`YEOSHUA SORIAS,
`Patent Owner.
`____________
`
`Case IPR2015-01317
`Patent 8,712,486 B2
`____________
`
`
`Before SALLY C. MEDLEY, GLENN J. PERRY, and
`KIMBERLY McGRAW, Administrative Patent Judges.
`
`McGRAW, Administrative Patent Judge.
`
`
`
`
`
`
`
`ORDER
`Conduct of the Proceeding
`37 C.F.R. § 42.5
`
`
`
`
`
`IPR2015-01317
`Patent 8,712,486 B2
`
`
`
`Patent Owner filed a motion for additional discovery in the instant
`proceeding, and Petitioner filed an opposition. Papers 18 (“Mot.), 19
`(“Opp.”). For the reasons below, Patent Owner’s motion is denied.
`Patent Owner seeks additional discovery pertaining to its assertion of
`commercial success of Petitioner’s products and efforts by the Petitioner to
`purchase the application that issued as the ’486 patent as objective
`indications of non-obviousness. Mot. 2–5. In particular, Patent Owner
`requests the Petitioner answer the following Document Requests and
`Request to Admit set forth in Exhibits 2013 and 2014:
`
`Request No. 1:
`For each Prong Charger Product model made or sold by or on behalf
`of Prong, documents sufficient to show on at least a quarterly basis from
`2012 to the present (a) the number of units ordered, (b) the gross sales in
`units, and (c) the gross sales in U.S. Dollars.
`
`Request No. 2:
`For each Prong Charger Product model made or sold by or on behalf
`of Prong, documents sufficient to show for each sales outlet listed below
`from 2012 to the present (a) the total number of units ordered by that sales
`outlet from Prong directly or through an intermediary, (b) the gross sales in
`units to that outlet, and (c) the gross sales in U.S. dollars.
`• Amazon.com (direct sales only)
`• Best Buy
`• Walmart
`
`2
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`IPR2015-01317
`Patent 8,712,486 B2
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`
`
`• Staples
`• AT&T
`• SharperImage.com
`• Hammacher.com
`• Brookstone
`• Adorama
`• GoWireless
`• Tessco Technologies.
`
`Request No 3:
`Copies of final prospectus prepared by or for Prong in connection
`with Georgia Oak Partners investments in Prong in 2014 and 2015.
`
`Request for Admission No. 1:
`Admit that the Forefront Law Group was acting on behalf of Prong
`(whether directly or indirectly) when it approached Mr. Max Moskowitz in
`February, 2012 on behalf of an anonymous client interested in purchasing
`U.S. Patent Application Serial No. 13/348,066.
`
`Analysis
`Pursuant to the Leahy-Smith America Invents Act, Pub. L. No. 112-
`
`29, 125 Stat. 284 (2011) (“AIA”), certain discovery is available in inter
`partes review proceedings. 35 U.S.C. § 316(a)(5); see 37 C.F.R. §§ 42.51–
`53. Discovery in an inter partes review proceeding, however, is more
`limited than what is normally available in district court patent litigation, as
`Congress intended inter partes review to be a quick and cost effective
`3
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`IPR2015-01317
`Patent 8,712,486 B2
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`
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`alternative to litigation. See H. Rep. No. 112-98 at 45-48 (2011). The
`legislative history of the AIA makes clear that additional discovery should
`be confined to “particular limited situations, such as minor discovery that
`PTO finds to be routinely useful, or to discovery that is justified by the
`special circumstances of the case.” 154 Cong. Rec. S9988-89 (daily ed. Sept.
`27, 2008) (statement of Sen. Kyl). In light of this, and given the statutory
`deadlines required by Congress for inter partes review proceedings, the
`Board will be conservative in authorizing additional discovery. In an inter
`partes review proceeding, a party seeking discovery beyond what is
`expressly permitted by rule must do so by motion, and must show that such
`additional discovery is “necessary in the interest of justice.” 35 U.S.C.
`§ 316(a)(5); see 37 C.F.R. § 42.51(b)(2)(i).
`
`Patent Owner, as the movant, bears the burden of demonstrating that it
`is entitled to the additional discovery sought. 37 C.F.R. § 42.20(c). Thus, to
`meet its burden, Patent Owner must explain with specificity the discovery
`requested and why the discovery is necessary in the interest of justice. The
`Board considers various factors in determining whether additional discovery
`in an inter partes review proceeding is necessary in the interest of justice,
`including:
`More Than A Possibility And Mere Allegation — The mere
`possibility of finding something useful, and mere allegation that
`something useful will be found, are insufficient to demonstrate
`that the requested discovery is necessary in the interest of justice.
`The party requesting discovery should already be in possession
`of evidence tending to show beyond speculation that in fact
`something useful will be uncovered.
`
`4
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`
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`IPR2015-01317
`Patent 8,712,486 B2
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`
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`Garmin Int’l, Inc. v. Cuozzo Speed Techs. LLC, IPR2012-00001, Paper 26,
`at 6–7 (PTAB Mar. 5, 2013).
`
`“[U]seful” in the context of the first factor above means “favorable in
`substantive value to a contention of the party moving for discovery,” not just
`“relevant” or “admissible.” Id. at 7.
`
`Patent Owner’s Document Requests
`Patent Owner argues that its document requests Nos. 1, 2, and 3 will
`
`uncover useful information relating to commercial success. Mot. 4. On this
`record, we conclude Patent Owner has not met its burden to demonstrate that
`discovery of the requested documents are necessary in the interest of justice
`as Patent Owner has not provided a threshold amount of reasoning or
`evidence to show sales allegedly amounting to commercial success. While a
`conclusive showing is not necessary at this stage, some evidence or
`reasoning is needed to establish that there is more than a mere possibility
`that Patent Owner’s request would uncover something useful.
`
`Commercial success typically is shown with evidence of “significant
`sales in a relevant market.” Ormco Corp. v. Align Tech., Inc., 463 F.3d
`1299, 1312 (Fed. Cir. 2006) (citation omitted). Patent Owner argues that
`“Prong’s products have achieved commercial success.” Mot. 2. As support,
`Patent Owner cites to documents as showing Prong’s products are available
`at major retail and online outlets, that Prong has manufactured “a lot” of
`products, and that Prong has sold over 2600 units. Id. (citing Ex. 2019–
`2022, 2029–2036). However, Patent Owner does not clearly articulate what
`
`5
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`IPR2015-01317
`Patent 8,712,486 B2
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`constitutes the relevant market nor explain how Prong’s sales would be
`considered significant in that market. The burden is on the Patent Owner to
`provide sufficient evidence or reasoning to show, beyond mere speculation
`or a mere possibility, that Petitioner’s sales were significant enough in the
`relevant market to constitute commercial success and that the requested
`discovery would, therefore, return useful information. Patent Owner has not
`provided sufficient evidence or reasoning to meet its burden, particularly
`given the low volume of sales identified. See, e.g., In re Huang, 100 F.3d
`135, 140 (Fed. Cir. 1996) (absolute sales numbers without market share data
`does not establish commercial success).
`
`Request to Admit
`Patent Owner also seeks discovery requesting Prong to admit that it
`
`was involved in an effort to purchase the patent application that gave rise to
`the patent at issue in the current proceeding. Mot. 4–5; Ex. 2014.
`
`On this record, we conclude Patent Owner has not met its burden to
`demonstrate that the requested discovery is necessary in the interest of
`justice. Patent Owner states that “[s]imilar to licensing inquiries for a
`patent, a competitor’s effort to purchase an application is probative of non-
`obviousness.” Mot. 5. However, Patent Owner does not cite any case law
`nor explain in any detail why it believes an unsuccessful attempt by a single
`competitor to purchase the application would support a finding of non-
`obviousness. We note that the mere existence of a single, or even several,
`licensees, without more specific information about the circumstances
`surround the licensing is not a good indicator of nonobviousness. In EWP
`6
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`IPR2015-01317
`Patent 8,712,486 B2
`
`
`
`Corp. v. Reliance Universal Inc., 755 F.2d 898, 907-08 (Fed. Cir. 1985), the
`Court of Appeals for the Federal Circuit stated:
`to
`infallible guides
`Such [licensing] programs are not
`patentability. They sometimes succeed because they are
`mutually beneficial to the licensed group or because of business
`judgments that it is cheaper to take licenses than to defend
`infringement suits, or for other reasons unrelated to the
`unobviousness of the licensed subject matter.
`
`
`Here the patent application was not sold or even licensed. See e.g., Soverain
`Software LLC v. Newegg Inc., 705 F.3d 1333, 1346–47 (Fed. Cir.
`2013)(stating unsuccessful attempts to license software do not support
`finding of non-obviousness). Patent Owner has not directed us to any
`evidence as to what the terms and conditions, if any, were offered in
`connection with the offer to purchase the application that would support a
`finding of non-obviousness. Patent Owner merely directs us to an email
`asking if the Patent Owner “is conceptually interested in further discussions”
`with “a client who would be interested in purchasing” the patent application
`and related PCT filing. Ex. 2006. While a conclusive showing is not
`necessary at this stage, some evidence or reasoning is needed to establish
`that there is more than a mere possibility that Patent Owner’s request would
`uncover something useful. Patent Owner has not provided sufficient
`evidence or reasoning to meet this burden.
`
`In consideration of the foregoing, it is hereby:
`
`ORDERED that Patent Owner’s motion for additional discovery is
`denied.
`
`
`7
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`
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`IPR2015-01317
`Patent 8,712,486 B2
`
`
`FOR PETITIONER:
`Caleb Pollack
`Zeev Pearl
`Daniel Melman
`PEARL COHEN ZEDEK LATZER BARATZ LLP
`cpollack@pearlcohen.com
`zpearl@pearlcohen.com
`dmelman@pearlcohen.com
`
`
`
`
`
`FOR PATENT OWNER:
`Mitchell S. Feller
`Jason Wachter
`GOTTLIEB RACKMAN & REISMAN, P.C.
`msfeller@grr.com
`jwachter@grr.com
`
`
`8
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