`571-272-7822
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`Paper 15
`Entered: May 19, 2016
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`UNITED STATES PATENT AND TRADEMARK
`OFFICE
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`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`
`
`AMX, LLC,
`Petitioner
`
`v.
`
`CHRIMAR SYSTEMS, INC.,
`Patent Owner.
`
`
`
`Case IPR2016-00572 (Patent 9,049,019 B2)
`Case IPR2016-00573 (Patent 9,019,838 B2)1
`
`
`
`
`
`Before KARL D. EASTHOM, GREGG I. ANDERSON, and
`ROBERT J. WEINSCHENK, Administrative Patent Judges.
`
`ANDERSON, Administrative Patent Judge.
`
`________________
`
`ORDER
`Denying Patent Owner’s Motion for Additional Discovery
`37 C.F.R. § 42.51(b)(2) and
`Granting Petitioner’s Motion to Seal
`37 C.F.R. §§ 42.1 and 42.54
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` I. INTRODUCTION
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`1 We exercise our discretion and use this joint caption. Absent authorization,
`the parties are not permitted to use this joint caption.
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`IPR2016-00572 (Patent 9,049,019 B2)
`IPR2016-00573 (Patent 9.019,838 B2)
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`Pursuant to authorization from the Board (Paper 7), Chrimar Sysems,
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`Inc. (“Patent Owner”) filed a Motion for Additional Discovery (Paper 10,
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`“Mot.”),2 to which AMX, LLC (“AMX”) and Dell Inc. (“Dell”)(collectively
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`“Petitioner”) filed an Opposition (Paper 12, “Opp.”). Substantially similar
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`motions were filed by Patent Owner seeking additional discovery in each of
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`IPR2016-00569 and IPR2016-00574.
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`Patent Owner’s Motion requests additional discovery concerning
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`whether Petitioner properly identified the real parties-in-interest in its Petition.
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`Mot. 2; see 35 U.S.C. § 312(a)(2) (requiring a petition to identify all real
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`parties-in-interest). Petitioner is alleged to be a proxy for unnamed third
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`parties, including Hewlett-Packard Co. (“HP”) and/or Cisco Systems, Inc.
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`(“Cisco”). Mot. 2. Patent Owner argues that identifying all real parties-in-
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`interest have been listed is “critical in determining whether the IPR
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`proceeding is timed-barred under § 315(b), or in determining the scope of the
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`estoppel in litigation.” Id.
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`Petitioner’s Opposition includes citations to Exhibits 1039 and 1040.
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`Petitioner filed a Motion to Seal those two exhibits (Paper 14, “Motion to
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`Seal,” “Mot. Seal”). Petitioner also proposes entry of the default protective
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`order. Mot. Seal 1. Patent Owner does not oppose the Motion to Seal and
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`agrees to the entry of the default protective order. Id.
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`II. MOTION FOR ADDITIONAL DISCOVERY CONCERING REAL
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`2 Citations are to papers filed in IPR2016-00572, unless otherwise noted.
`2
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`IPR2016-00572 (Patent 9,049,019 B2)
`IPR2016-00573 (Patent 9.019,838 B2)
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`PARTIES-IN-INTEREST
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` A
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` party seeking discovery beyond routine discovery that is expressly
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`permitted by rule must do so by motion, and must show that such additional
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`discovery is in the interests of justice. 35 U.S.C. § 316(a)(5); 37 C.F.R. §
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`42.51(b)(2)(i). As the movant, Patent Owner bears the burden of establishing
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`it is entitled to additional discovery. 37 C.F.R. § 42.20(c).
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`Illustrative factors to be considered in determining whether a discovery
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`request is in the interests of justice have been explained in Garmin
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`International, Inc. v. Cuozzo Speed Technologies, LLC, Case IPR2012-00001,
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`slip op. at 6–7 (PTAB Mar. 5, 2013) (Paper 26) (precedential). Garmin
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`explains that: (1) there must be more than a mere possibility of finding
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`something useful or a mere allegation that something useful will be found; (2)
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`a party may not seek another party’s litigation positions or the underlying
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`basis for those positions; (3) a party should not seek information that
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`reasonably can be generated without a discovery request; (4) instructions and
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`questions should be easily understandable; and (5) the discovery requests
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`must not be overly burdensome to answer. Id.
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`Whether a party is a real party-in-interest to a proceeding is a highly
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`fact-dependent question. Office Patent Trial Practice Guide, 77 Fed. Reg.
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`48,756, 48,759 (Aug. 14, 2012) (“Trial Practice Guide”) (citing Taylor v.
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`Sturgell, 553 U.S. 880 (2008)). “Courts invoke the terms ‘real party-in-
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`interest’ and ‘privy’ to describe relationships and considerations sufficient to
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`justify applying conventional principles of estoppel and preclusion.” Id.
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`Taylor lists six categories that create an exception to the common law rule that
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`normally forbids non-party preclusion in litigation. Taylor, 553 U.S. at 893–
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`3
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`IPR2016-00572 (Patent 9,049,019 B2)
`IPR2016-00573 (Patent 9.019,838 B2)
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`95. “A common consideration is whether the non-party exercised or could
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`have exercised control over a party’s participation in a proceeding.” Trial
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`Practice Guide, 77 Fed. Reg. at 48,759 (citing Taylor, 553 U.S. at 895).
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`Additional relevant factors include: the non-party’s relationship with the
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`petitioner; the non-party’s relationship to the petition itself, including the
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`nature and/or degree of involvement in the filing; and the nature of the entity
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`filing the petition. Trial Practice Guide, 77 Fed. Reg. at 48,760. To prevail in
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`its Motion for Additional Discovery concerning real parties-in-interests,
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`Patent Owner has the burden to show its discovery requests are in the interests
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`of justice.
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`A. Patent Owner’s Motion and Evidence
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`In the Motion, Patent Owner indicates it “expects” that parties other
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`than Petitioner3 exercised or could have exercised control over these
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`proceedings and, thus, should have been named a real party-in-interest. See,
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`e.g., Mot. 2, 4. Patent Owner argues that evidence in its possession tends to
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`show that: (1) indemnification agreements exist between AMX and/or Dell
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`and third-parties (Mot. 4); (2) AMX and HP both hired the same counsel in
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`separate cases (Mot. 3); and (3) Dell is a customer of Aerohive Networks
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`(Mot. 5); see also Opp. 4 (categorizing Patent Owner’s evidence).
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`B. Petitioner’s Opposition and Evidence
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`Petitioner contends that Patent Owner’s discovery requests are not in
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`the interests of justice. Opp. 1–2. Petitioner also asserts the necessity for
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`discovery is premised on speculation or a “mere possibility.” Id. at 1, 3–8.
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`Next, Petitioner contends Patent Owner has already taken discovery,
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`3 Patent Owner emphasizes HP and Cisco but mentions other entities both
`named and unnamed. See Mot. 3–5.
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`4
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`IPR2016-00572 (Patent 9,049,019 B2)
`IPR2016-00573 (Patent 9.019,838 B2)
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`specifically from AMX, which confirms that the requested discovery and is
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`available through other means. Id. at 1, 8–9.
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`C. Patent Owner’s Proposed Discovery Requests
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`Patent Owner’s proposed discovery requests are submitted as Exhibit
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`2002. Interrogatory number 1 is exemplary in asking for “any request for
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`indemnification” made by or directed to Petitioner. Ex. 2002, Int. No. 1.
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`Similarly, the requests for production of documents seek, for example, “[a]ll
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`indemnity agreements” that involve any of the patents being challenged in
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`these proceedings. Id. at Req. No. 1.
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`D. Garmin Factors
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`We next turn to a discussion of Patent Owner’s arguments that its
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`discovery requests are in the interests of justice as shown by the five Garmin
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`factors. Mot. 3–9.
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`1. Whether Something Useful Will Be Found
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`The first Garmin factor considers whether there exists more than a mere
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`possibility of finding something useful or a mere allegation that something
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`useful will be found. Garmin, slip op. at 6. “The party requesting discovery
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`should already be in possession of evidence tending to show beyond
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`speculation that in fact something useful will be uncovered.” Id.
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`Patent Owner contends that the evidence in its possession “tends to
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`show that information favorable in substantive value to Chrimar on the issue
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`of real parties-in-interest will be uncovered by the requested discovery.” Mot.
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`3. Specifically, Patent Owner identifies evidence indicating that Petitioner
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`may have indemnification agreements with third parties. Mot. 3–4 (citing Ex.
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`2005, 5; Ex. 2006, 72; Ex. 2010, 41). Patent Owner, however, does not
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`identify any evidence suggesting that those indemnification agreements would
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`5
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`IPR2016-00572 (Patent 9,049,019 B2)
`IPR2016-00573 (Patent 9.019,838 B2)
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`be useful in demonstrating that the third parties direct, control, or fund these
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`proceedings. Mot. 3–5. Patent Owner also does not identify any evidence
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`suggesting that Petitioner has requested indemnification under those
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`agreements. Id. In other words, Patent Owner does not identify evidence
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`tending to show that those indemnification agreements would be useful in
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`demonstrating that there are additional real parties in interest in these
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`proceedings.
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`Moreover, we are not persuaded, on this record, that the existence of
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`indemnification agreements would indicate control over these proceedings by
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`the indemnitor. See Opp. 5 (citing Broadcom Corp. v. Telefonaktiebolaget
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`LM Ericsson (PUBL), IPR2013-00601, slip op. at 7 (PTAB Jan. 24,
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`2014)(Paper 23)); see also Wavemarket Inc. v. Locationet Sys. Ltd., IPR2014-
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`00199, slip op. 34 at 6 (PTAB Aug. 11, 2014)(Paper 34) (finding
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`indemnification obligation is not sufficient to demonstrate beyond speculation
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`that non-party funded, controlled, or had ability to exercise control over IPR
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`proceedings).
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`Patent Owner also identifies evidence indicating that Petitioner is
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`represented in these proceedings by the same counsel that represents HP in
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`other cases involving the same patents. Mot. 3–4 (citing Ex. 2003; Ex.
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`2004). We are not persuaded, though, that common representation adds
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`anything beyond speculation that something useful will be uncovered
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`regarding additional real parties in interest in these proceedings. There are
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`many reasons for different parties to retain the same counsel. One significant
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`reason for common representation is familiarity with the subject matter and
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`coordination of effort, such as participation in a “Joint Defense Group.”
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`Such coordination does not indicate control. See Opp. 6 (citing Office Patent
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`6
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`IPR2016-00572 (Patent 9,049,019 B2)
`IPR2016-00573 (Patent 9.019,838 B2)
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`Trial Practice Guide, 77 Fed. Reg. at 48760 (“If Party A is part of a Joint
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`Defense Group with Party B in a patent infringement suit . . . Party A is not a
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`‘real party-in-interest’ . . . based solely on its participation in that Group.”)).
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`Further, the language of Patent Owner’s Motion evinces speculation,
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`rather than demonstrating Patent Owner has evidence in its possession tending
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`to show something useful will be uncovered regarding additional real parties
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`in interest in these proceedings. For example, Patent Owner states it “believes
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`that Ruckus was indemnifying AMX” and that it “believes that it can show
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`that HP, Cisco, and/or another entity is a real party-in-interest or privy.” Mot.
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`2, 4; see Opp. 7 (citing CaptionCall, L.L.C. v. Ultratec, Inc., IPR2015-00636,
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`slip op. at 17–18 (PTAB Feb. 23, 2016)(Paper 42)). Other positions taken by
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`Patent Owner reinforce the speculative nature of the requested discovery, e.g.,
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`“[i]f Petitioners are covertly acting on behalf of . . . HP or Cisco.” Mot. 6.
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`While the use of words like “believes,” “if,” or other qualified wording
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`evidencing opinions or possibilities do not alone lead to the conclusion that
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`the requested discovery is speculative, some evidence needs to corroborate the
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`suppositions. Such corroboration is lacking here.
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`Thus, the first Garmin factor weighs against granting the Motion.
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`2. Garmin Factors 2 and 3
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`Patent Owner contends it is not seeking information indicative of
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`Petitioner’s litigation positions or the underlying basis for such. Mot. 4–5.
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`This is not disputed by Petitioner and our review of Exhibit 2002 confirms
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`that representation. Accordingly, the second Garmin factor does not weigh
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`for or against additional discovery.
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`Regarding the third Garmin factor, that Patent Owner cannot generate
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`equivalent discovery by other means, Patent Owner asserts it has no other
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`7
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`IPR2016-00572 (Patent 9,049,019 B2)
`IPR2016-00573 (Patent 9.019,838 B2)
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`recourse and that the circumstantial evidence it provides is enough to warrant
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`the requested discovery. Mot. 5–6 (citing Zoll Lifecor Corp. v. Philips Elec.
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`N. Am. Corp., Case IPR2013-00609, slip op. at 10 (PTAB Mar. 20, 2014)
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`(Paper 15)). Petitioner argues that Patent Owner already obtained or can
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`obtain the requested discovery through discovery requests or depositions in
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`the related district court case. Opp. 8–9. Petitioner’s argument is not
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`persuasive. In either case, Patent Owner must obtain the discovery by serving
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`discovery requests on Petitioner, not by other means.
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`Thus, the third Garmin factor weighs slightly in favor of granting the
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`Motion.
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`3. Garmin Factors 4 and 5
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`Turning to the fourth Garmin factor, Patent Owner contends its
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`instructions and questions are easily understandable. Mot. 6–7. Petitioner
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`does not argue this factor. While this factor is favorable to Patent Owner, it is
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`not dispositive. The other four factors must be reviewed and weighed.
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`With respect to the fifth Garmin factor, Patent Owner contends its
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`proposed discovery is specifically targeted and narrowly tailored. Mot. 7–8.
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`Petitioner disagrees, noting among other things that document request number
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`1 requests “all indemnity agreements.” Opp. 9 (citing Ex. 2002, Req. No. 1).
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`We agree with Petitioner. Patent Owner identified several third parties
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`by name, including HP, Cisco, Ruckus, and Aerohive (see Mot. 3–4). But
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`Patent Owner’s proposed discovery does not specifically seek documents
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`relating to those named parties, but rather to “all third parties,” “any third
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`party,” “all indemnity agreements,” and “all agreements.” See Ex. 2002. We
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`do not find the proposed discovery to be narrowly tailored to the real party-in-
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`interest issue.
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`8
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`IPR2016-00572 (Patent 9,049,019 B2)
`IPR2016-00573 (Patent 9.019,838 B2)
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`Thus, while the fourth Garmin factor is neutral, the fifth factor weighs
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`against granting the Motion.
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`4. Conclusion
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`As discussed above, the first and fifth factors weigh against granting the
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`Motion, the second and fourth factors are neutral, and the third factor weighs
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`only slightly in favor of granting the Motion. After consideration of Patent
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`Owner’s arguments and evidence in light of the Garmin factors, we determine
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`that Patent Owner has not shown that the additional discovery is in the
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`interests of justice. See 37 C.F.R. § 42.51(b)(2).
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`III. MOTION TO SEAL/PROTECTIVE ORDER
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`Petitioner filed an unopposed Motion to Seal Exhibits 1039 and 1040
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`(Paper 14, Mot. Seal), which Exhibits are referenced in the Opposition. There
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`is a strong public policy in favor of making information filed in an inter partes
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`review open to the public, especially because the proceeding determines the
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`patentability of claims in an issued patent and, therefore, affects the rights of
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`the public. Under 35 U.S.C. § 316(a)(1) and 37 C.F.R. § 42.14, the default
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`rule is that all papers filed in an inter partes review are open and available for
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`access by the public; however, a party may file a concurrent motion to seal
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`and the information at issue is sealed pending the outcome of the motion. It is
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`only “confidential information” that is protected from disclosure. 35 U.S.C. §
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`316(a)(7); see Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,760
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`(Aug. 14, 2012). The standard for granting a motion to seal is “for good
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`cause.” 37 C.F.R. § 42.54(a). The party moving to seal bears the burden of
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`proof in showing entitlement to the requested relief, and must explain why the
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`information sought to be sealed constitutes confidential information. 37
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`C.F.R. § 42.20(c).
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`9
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`IPR2016-00572 (Patent 9,049,019 B2)
`IPR2016-00573 (Patent 9.019,838 B2)
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`We have reviewed Exhibits 1039 and 1040. We conclude that they
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`contain confidential business information relating to AMX’s confidential
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`communications and business relationships with its suppliers. See Mot. Seal,
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`1. Based on the preceding, Petitioner submits that good cause exists to seal
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`the deposition excerpts, and request that the Board grant Petitioners’ motion to
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`seal. None of the contents of those documents that is asserted as constituting
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`confidential business information has been identified in this Decision in
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`reaching a determination with respect to the Motion.
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`Petitioner requests we enter the default protective order, attached to its
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`Motion. Mot. Seal, 1 (Appendix A). The Office Patent Trial Practice Guide,
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`77 Fed. Reg. 48,756, 48,760 (Aug. 14, 2012), provides that in an inter partes
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`review, “a document or thing will be made publicly available, unless a party
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`files a motion to seal that is then granted by the Board.” “A party may file a
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`motion to seal where the motion contains a proposed protective order, such as
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`the default protective order.” Id. “The protective order governs the protection
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`of confidential information contained in documents, discovery, or testimony
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`adduced, exchanged, or filed with the Board.” Id. at 48,769. Confidential
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`information is defined as “trade secret or other confidential research,
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`development, or commercial information.” Id. at 48,760.
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`The Motion to Seal states Patent Owner has been consulted and does
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`not object. We are persuaded that confidential commercial information is
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`present in at least Exhibits 1039 and 1040 and there is good cause for entry of
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`a protective order.
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`Accordingly, it is
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`IV. ORDER
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`IPR2016-00572 (Patent 9,049,019 B2)
`IPR2016-00573 (Patent 9.019,838 B2)
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`ORDERED that Patent Owner’s Motion for Additional Discovery is
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`denied; and
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`FURTHER ORDERED that Petitioner’s Motion to Seal is granted;
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`FURTHER ORDERED that Petitioner’s Motion for Entry of Default
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`Protective Order is granted;
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`FURTHER ORDERED that the Board’s default Standing Protective
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`Order is entered in this proceeding and effective as of the date of this Order.
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`PETITIONER:
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`Brent Hawkins
`Amol A. Parikh
`MCDERMOTT, WILL & EMERY LLP
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`Gilbert A. Greene
`NORTON ROSE FULBRIGHT US LLP
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`bhawkins@mwe.com
`amparikh@mwe.com
`bert.greene@nortonrosefulbright.com
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`PATENT OWNER:
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`Justin S. Cohen
`THOMPSON & KNIGHT LLP
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`Richard W. Hoffman
`REISING ETHINGTON PC
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`justin.cohen@tklaw.com
`hoffmann@reising.com
`Chrimar@tklaw.com
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`11