Trials@usp_to.gov
`
`Paper No. 34
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`Entered: February 12, 2019
`571-272-7822
`REDACTED PUBLIC VERSION OF PAPER NO. 34
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`MOBILE TECH, INC.,
`
`Petitioner,
`
`V.
`
`INVUE SECURITY PRODUCTS INC.,
`Patent Owner.
`
`Cases IPR2017-01900 and IPR2017-01901
`
`Patent 9,478,110 B2
`
`Before JUSTIN T. ARBES, STACEY G. WHITE, and
`DANIEL J. GALLIGAN, Administrative Patent Judges.
`
`WHITE, Administrative Patent Judge.
`
`FINAL WRITTEN DECISION
`
`35 US. C. § 318(a)
`
`REDACTED PUBLIC VERSION OF PAPER NO. 34
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`IPR2017-01900 and IPR2017-01901
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`Patent 9,478,110 B2
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`REDACTED PUBLIC VERSION OF PAPER NO. 34
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`I.
`
`BACKGROUND
`
`Petitioner Mobile Tech, Inc. (“Petitioner” or “MTI”) filed two
`
`Petitions requesting inter partes review of claims 1—36 of US. Patent No.
`
`9,478,110 B2 (Ex. 1001,1 “the ’ 1 10 patent”) in IPR2017-01900 and
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`IPR2017-01901. On February 13, 2018, we instituted trial in IPR2017-
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`01900 on claims 1—9 and 11—36 on all asserted grounds of unpatentability,
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`and we instituted trial in IPR2017-01901 on claims 1—36 on all asserted
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`grounds of unpatentability. In each proceeding, Patent Owner InVue
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`Security Products Inc. (“Patent Owner” or “InVue”) filed a Patent Owner
`
`Response and Petitioner filed a Reply, as listed in the following chart.
`
`Case
`Number
`
`Claims
`Instituted
`
`Decision on Petition
`Institution
`
`Response
`
`Reply
`
`version)
`
`IPR2017-1—9 and
`01900
`11—36
`
`Paper 1
`(.“Pet ”)
`
`(“Reply”)
`
`Paper 20
`(“PO Resp. ”)
`(sealed);
`Ex. 2040
`
`(public
`
`IPR2017-
`01901
`
`1—36
`
`Paper 13
`(“1901
`Dec.”)
`
`Paper 1
`(“1901
`Pet.”)
`
`Paper 22
`(“1901
`Reply”)
`
`Paper 20
`(“1901
`PO Resp”)
`(sealed);
`Ex. 2040
`
`(public
`version)
`
`1 Unless otherwise specified with the prefix “1901,” we refer to papers and
`exhibits filed in IPR2017-01900.
`
`2
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`IPR2017-01900 and IPR2017-01901
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`Patent 9,478,110 B2
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`REDACTED PUBLIC VERSION OF PAPER NO. 34
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`A combined oral hearing was held on November 7, 2018, and a
`
`transcript of the hearing is included in the record. Papers 33 (public
`
`version), 32 (“TL”) (sealed).
`
`IPR2017-01900 and IPR2017-01901 involve the same challenged
`
`patent and parties, and there is overlap in the evidence submitted by the
`
`parties. To administer the proceedings more efficiently, we exercise our
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`authority under 35 U.S.C. § 315(d) to consolidate the two proceedings for
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`purposes of issuing one final written decision.
`
`We have jurisdiction under 35 U.S.C. § 6. This Decision is issued
`
`pursuant to 35 U.S.C. § 318(a). For the reasons that follow, we determine
`
`that Petitioner has shown by a preponderance of the evidence that claims 1—
`
`36 of the ’1 10 patent are unpatentable.
`
`A. Related Matters
`
`The parties indicate the ’ 1 10 patent originally was asserted in In Vue
`
`Security Prods, Inc. v. Mobile Tech, Inc., Case No. 3-16-cv-00734
`
`(W.D.N.C.), and that the case was consolidated with others involving patents
`
`related to the ’1 10 patent and transferred to the United States District Court
`
`for the District of Oregon. Paper 11, 2—3, Paper 30, 1. Petitioner has filed
`
`petitions for inter partes and post grant review involving the same parties
`
`and related patents in IPR2016-00892, IPR2016-00895, IPR2016-00896,
`
`IPR2016-00898, IPR2016-00899, IPR2016-01241, IPR2016-01915,
`
`IPR2017-00344, IPR2017-00345, IPR2018-00481, IPR2018-01138, and
`
`PGR2018-00004. Paper 11, 3—4. We note that final written decisions have
`
`been issued in IPR2016-00892, IPR2016-00895, IPR2016-00896, IPR2016-
`
`3
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`Patent 9,478,110 B2
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`REDACTED PUBLIC VERSION OF PAPER NO. 34
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`00898, IPR2016-00899, IPR2016-01241, IPR2016-01915, IPR2017-00344,
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`and IPR2017-00345, some of which have been appealed. The parties also
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`identify certain patents and pending patent applications that may be affected
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`by a decision in this proceeding. See id. at 4; Paper 30, 2—3.
`
`B. The ’1 10 Patent
`
`The ’1 10 patent describes a security system and method including a
`
`programmable key. EX. 1001, 1:27—29. This security system is depicted in
`
`Figure 1, which is reproduced below.
`
`
`
`Figure 1 depicts security system 1. Id. at 6:14—16. The primary
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`components of security system 1 are programming station 3, programmable
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`key 5, and alarm module 7. Id. at 6: 15—19. Merchandise 9 is connected to
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`alarm module 7 Via cable 11 that preferably contains sense loop 13. Id.
`
`at 6:18—20. Programming station 3 randomly generates a unique security
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`code (Security Disarm Code, or “SDC”) that is transmitted to programmable
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`key 5, which in turn stores the SDC in key memory. Id. at 9:21—27. Once
`
`4
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`REDACTED PUBLIC VERSION OF PAPER NO. 34
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`programmed with an SDC, key 5 is taken to alarm module 7 and the SDC is
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`stored in the alarm module’s memory. Id. at 9:41—48.
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`C. Illustrative Claim
`
`As noted above, Petitioner challenges claims l—36 of the ’ l 10 patent,
`
`of which claims 1 and 24 are independent. Claim 1 is illustrative of the
`
`challenged claims and is reproduced below:
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`1. A programmable security system for protecting items of
`merchandise from theft,
`the programmable security
`system comprising:
`at least one key programmed in a retail store with a unique
`security code, the unique security code not chosen by a
`person; and
`at least one security device programmed in the retail store with
`the unique security code, the at least one security device
`comprising an alarm and a memory for storing the unique
`security code, the at least one security device configured
`to be attached to an item of merchandise, the at least one
`security device further configured to activate the alarm in
`response to the integrity of the security device being
`compromised,
`wherein the at least one key is configured to control the at least
`one security device in the retail store upon a matching of
`the unique security code programmed in the key with the
`unique security code programmed in the security device.
`
`Ex. 1001, 28:28—46.
`
`D. Instituted Grounds of Unpatentability
`
`The instant consolidated inter partes review involves the following
`
`grounds of unpatentability:
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`REDACTED PUBLIC VERSION OF PAPER NO. 34
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`
`
`§ 103
`§ 103
`
`§102(b)
`§ 103
`§ 103
`
`Claims Challenged
`1—17 and 19—36
`8, 18, and 25
`9
`9
`9
`9
`1—7 9 11—16 19 21—24
`26—28, and 30—36
`1—9 and 11—36
`8, 18, and 25
`
`9
`
`Reference(s)
`Rothbaum2 and Denison3
`Rothbaum, Denison, and Deguchi
`5
`.
`UChlda
`Uchida
`Uchida and Burri6
`
`11.
`
`REAL PARTY-IN—INTEREST
`
`Pursuant to 35 U.S.C. § 312(a)(2), “[a] petition filed under section
`
`311 may be considered only if .
`
`.
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`. (2) the petition identifies all real parties in
`
`interest.” See also 37 C.F.R. § 42.101(b) (“A person who is not the owner
`
`of a patent may file with the Office a petition to institute an inter partes
`
`review of the patent unless .
`
`.
`
`. [t]he petition requesting the proceeding is
`
`filed more than one year after the date on which the petitioner, the
`
`petitioner’s real party-in-interest, or a privy of the petitioner is served with a
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`complaint alleging infringement of the patent”). Petitioner states in its
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`Petitions that “[t]he real parties-in-interest are Mobile Tech, Inc., d/b/a
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`Mobile Technologies Inc. and MT1, and MTI Holdings, LLC.” Pet. 6;
`
`2 U.S. Patent No. 5,543,782, issued Aug. 6, 1996 (1901 Ex. 1003,
`“Rothbaum”).
`3 U.S. Patent Pub. No. 2004/0201449 A1, pub. Oct. 14, 2004 (1901 Ex.
`1002, “Denison”).
`4 U.S. Patent Pub. No. 2004/0003150 A1, pub. Jan. 1, 2004 (1901 Ex. 1004,
`“Deguchi”).
`5 Japanese Patent App. Pub. No. 1997-259368, pub. Oct. 3, 1997 (EX. 1002);
`certified translation (Ex. 1003, “Uchida”).
`6 European Patent App. Pub. No. 0 745 747 A1, pub. Dec. 4, 1996 (Ex.
`1004, “Burri”).
`
`6
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`REDACTED PUBLIC VERSION OF PAPER NO. 34
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`1901 Pet. 5. According to Petitioner, MTI Holdings, LLC has changed its
`
`name to ITM Holdings, LLC (“ITM”). Paper 11, 2; Ex. 1014 11 30.
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`Patent Owner argues that Petitioner has failed to comply with the real
`
`party-in—interest (“RPI”) requirement of 35 U.S.C. § 312(a)(2).7 PO Resp. 1.
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`Patent Owner first raised this issue in a January 11, 2018, email to the
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`Board. Paper 8, 1. We held a conference call to discuss Patent Owner’s
`
`concerns, and in response to those concerns, we authorized the parties to file
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`a supplemental preliminary response and reply to the supplemental
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`preliminary response. Id. at 2—3; see Papers 9, 10.
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`Shortly thereafter, this issue was raised in several other proceedings
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`between these parties, IPR2016-01915, IPR2017-00344, IPR2017-00345,
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`and PGR2018-00004. On January 29, 2018, we issued an Order in
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`IPR2016-01915, IPR2017-00344, IPR2017-00345, PGR2018-00004, and
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`the instant IPRs proceedings. Paper 12. In that Order, we denied Patent
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`Owner’s request for authorization to seek additional discovery of documents
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`pertaining to Vestar Capital Partners (“Vestar”) and its relationship with
`
`7 We note that 35 U.S.C. § 3 1 5 (b) bars institution of an inter partes review
`if an RPI or privy of the petitioner was served with a complaint alleging
`infringement of the challenged patent more than one year prior to the filing
`of the petition. Here, however, the other purported RPIs argued by Patent
`Owner have not been sued for infringement, so the § 315(b) bar is not at
`issue. Further, Petitioner acknowledged at the hearing that MTI and MTHI
`are in privity with each other, such that MTHI would now be unable to file
`its own petition for inter partes review (due to expiration of the one year).
`See Tr. 6928—15.
`
`7
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`Petitioner, but authorized Patent Owner to depose Petitioner’s Chief
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`Executive Officer, Christopher Remy, regarding the RPI issue. Id. at 5. We
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`stated that unless a showing of good cause was made, that deposition would
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`“be the only deposition authorized as to Mr. Remy in any of the proceedings
`
`involving these parties.” Id. As to IPR2016-01915, IPR2017-00344, and
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`IPR2017-00345, we authorized Patent Owner to file a motion to terminate
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`along with supporting evidence, and Petitioner was authorized to file a
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`response. Id. at 5—6. We did not authorize the filing of a motion to
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`terminate in the instant proceedings because at that time we had not yet
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`made a determination as to whether these proceedings should be instituted.
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`Id. at 5 n.3.
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`On March 27, 2018, we denied Patent Owner’s Motion to Terminate
`
`because we determined that Petitioner’s RPI designation was proper.
`
`IPR2016-01915,8 Paper 34 (sealed), Paper 38 (public version). Subsequent
`
`to that decision, final written decisions were entered in IPR2016-01915
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`(Paper 36), IPR2017-00344 (Paper 41), and IPR2017-00345 (Paper 36). No
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`requests for rehearing were filed in any of the proceedings. Patent Owner
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`has appealed IPR2017-00344 and IPR2017-00345 (IPR2017-00345, Paper
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`37). No appeal was filed in IPR2016-01915. Patent Owner now asks us to
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`make a different decision in this case because it believes that we “based [our
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`8 The parties filed the same briefing and evidence in IPR2016-01915,
`IPR2017-00344, and IPR2017-00345. We issued a single decision for all
`three cases.
`
`8
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`prior] decision primarily on two assumptions” that Patent Owner believes to
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`be in error.9 PO Resp. 1—2.
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`Petitioner argues in reply that Patent Owner is collaterally estopped
`
`from raising issues that were resolved against it in the prior Board decisions.
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`Reply 17—18; see MaxLinear, Inc. v. CF CRESPE LLC, 880 F.3d 1373, 1376
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`(Fed. Cir. 2018) (stating “[i]t is well established that collateral estoppel, also
`
`known as issue preclusion, applies in the administrative context”); see also
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`VirnetXInc. v. Apple, Inc., 909 F.3d 1375, 1377 (Fed. Cir. 2018) (“A party
`
`is collaterally estopped from relitigating an issue if: (1) a prior action
`
`presents an identical issue; (2) the prior action actually litigated and
`
`adjudged that issue; (3) the judgment in that prior action necessarily required
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`determination of the identical issue; and (4) the prior action featured full
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`representation of the estopped party.”).
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`Patent Owner argues that collateral estoppel should not be applied
`
`here because these cases are based on different facts and there has been a
`
`shift in the law. Tr. 106: 12—107: 19. In particular, Patent Owner asserts that
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`“[t]he evidence is the same documents. The facts are different.”10 Id. at
`
`7727—8; see also id. at 73: 12—19 (acknowledging that the evidence of record
`
`9 Where the parties make similar arguments in both of the instant
`proceedings, we refer to the briefing in IPR2017-01900 for convenience.
`10 In its Motion to Seal its Patent Owner Response and accompanying
`evidence, Patent Owner states that it “submits and cites the same
`
`confidential information” as it did in IPR201 6-0 1 91 5 , IPR2017-00344, and
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`IPR2017-00345. Paper 21, 2—3.
`
`9
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`Patent 9,478,110 B2
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`REDACTED PUBLIC VERSION OF PAPER NO. 34
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`is “identical”). According to Patent Owner, “[t]he difference in evidence
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`would be the [passage of] time.” Id. at 87:6—7. Patent Owner points out that
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`Mr. Remy was deposed approximately nine months before the hearing in
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`these matters and Petitioner had not provided any updates regarding the
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`relationship between the various Mobile Tech entities since the time of
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`Mr. Remy’s deposition. Id. at 87:7—14. We need not resolve whether
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`collateral estoppel is applicable here because, consistent with our prior
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`decisions, we find that Petitioner properly identified all RPls in this matter.
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`Petitioner bears the ultimate burden of persuasion in establishing that
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`all RPls have been named. Worlds Inc. v. Bungie, Inc., 903 F.3d 1237, 1242
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`(Fed. Cir. 2018). Our reviewing court has found that “Congress intended
`
`that the term ‘real party in interest’ have its expansive common-law
`
`meaning.” Applications in Internet Time, LLC v. RPX Corp, 897 F.3d 1336,
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`1351 (Fed. Cir. 2018) (hereinafter “AIT”). Whether a non-party is a “real
`
`party-in-interest” for purposes of an inter partes review proceeding is a
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`“highly fact-dependent question” that takes into account how courts
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`generally have used the term to “describe relationships and considerations
`
`sufficient to justify applying conventional principles of estoppel and
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`preclusion.” Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756,
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`48,759 (Aug. 14, 2012). As noted by our reviewing Court, the Office Patent
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`Trial Practice Guide “explain[s] that the two questions lying at its heart are
`
`whether a non-party ‘desires review of the patent’ and whether a petition has
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`been filed at a nonparty’s ‘behest.’” AIT, 897 F.3d at 1351 (quoting Office
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`Patent Trial Practice Guide, 77 Fed. Reg. at 48,759) (“Determining whether
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`a non-party is a ‘real party in interest’ demands a flexible approach that
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`1 0
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`REDACTED PUBLIC VERSION OF PAPER NO. 34
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`takes into account both equitable and practical considerations, with an eye
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`toward determining whether the non-party is a clear beneficiary that has a
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`preexisting, established relationship with the petitioner.”).
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`Depending on the circumstances, various factors may be considered,
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`including whether the non-party “exercised or could have exercised control
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`over [the petitioner’s] participation in a proceeding,” the non-party’s
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`“relationship with the petitioner,” the non-party’s “relationship to the
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`petition itself, including the nature and/or degree of involvement in the
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`filing,” and “the nature of the entity filing the petition.” Office Patent Trial
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`Practice Guide, 77 Fed. Reg. at 48,759—60. A potentially relevant factor is
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`whether the non-party is funding or directing the proceeding. Id. For
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`example, “a party that funds and directs and controls an IPR .
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`.
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`. petition or
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`proceeding constitutes a ‘real party-in—interest,’ even if that party is not a
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`‘privy’ of the petitioner.” Id. at 48,760. Complete funding or control is not
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`required for a non-party to be considered a real party-in—interest, however;
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`the exact degree of funding or control “requires consideration of the
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`pertinent facts.” Id.
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`In his declaration, Mr. Remy testifies as to the corporate ownership
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`structure of Petitioner MTI and related entities. Ex. 1014 1111 13—16. Prior to
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`August 4, 2016, MTI was a wholly-owned subsidiary of MTI Holdings,
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`LLC. Id. 11 13. MTI Holdings, LLC later changed its name to ITM. Paper
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`11, 2; Ex. 1014 11 30. On August 4, 2016, MTI Buyer, Inc. (“MTI Buyer”)
`
`acquired all shares of Mobile Tech, Inc. from MTI Holdings, LLC. Ex.
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`1014 11 14. MTI Intermediate, Inc. (“MTI Intermediate”) is a holding
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`company that owns all shares of MTI Buyer, and Mobile Tech Holdings,
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`1 1
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`Inc. (“MTHI”) is a holding company that owns all shares of MTI
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`Intermediate. Id. 11 16. Finally, Vestar has some amount of ownership in
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`MTHI. Id. Both of the Petitions in the instant proceedings were filed after
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`August 4, 2016.
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`Patent Owner argues that Petitioner’s operations are guided and
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`controlled by MTHI and that the assertion that MTHI does not have control
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`over the proceedings and funding for the proceedings is unsubstantiated.
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`PO Resp. 2—3. Patent Owner cites various excerpts from the deposition of
`
`Mr. Remy that Patent Owner argues show that MTHI and MTI function as a
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`unified corporate entity and, therefore, that MTHI is a real party-in—interest.
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`Id. at 6—8. Patent Owner also argues MTHI imposed on ITM an obligation
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`to fund the instant proceedings. Id. at 12. We have reviewed the deposition
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`of Mr. Remy and the evidence of record cited by Patent Owner, and we do
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`not agree that the record demonstrates a degree of funding or control with
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`respect to the instant proceedings indicative of a real party-in—interest.
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`Turning first to the fimding of the instant proceedings, Mr. Remy
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`testified that, as part of the acquisition of MTI in August of 2016, an
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`“agreement was in place that— would _the-
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`_against -.” Ex. 2022, 8624—21. According to Mr. Remy, a
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`_was set up to _between InVue and MTI, and
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`that—. Id. at 88:4—89216; see id. at 153210—14
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`(“Under the new entity, what was required is that the previous company,
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`MTI Holdings LLC, would take—
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`—. That was my understanding”); id. at
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`155:3—6<Question: “Weleas—
`12
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`—as part ofthe—?”; Answer:
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`“Yes. Yes.”). In describing the funding mechanism, Mr. Remy testified that
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`—out of the” _set
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`up to— Id. at 12920—1303.
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`Patent Owner argues that “[t]he—
`
`— shows that MTHI ultimately dictated MTI’s patent defense
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`strategy, including filing the current IPRs.” PO Resp. 11 (citing Ex. 2022,
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`154: 17—155: 1 1). We disagree. Rather, the funding mechanism described by
`
`Mr. Remy appears to show no direct funding by MTHI because it created a
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`mechanisma—
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`— MTHI did not obligate
`
`itself to fund these expenses that already were contemplated based on the
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`posture of the litigations in existence at the time MTHI acquired its interest
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`in MTI. See Pet. 6—7 (discussing the extensive litigation history between the
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`parties involving district court and Board proceedings over seven related
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`patents). Furthermore, according to Mr. Remy, the—
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`_ (EX- 2022, 89:12—16), meaning—-11
`
`11 Patent Owner argues that Petitioner has not produced additional materials
`to show whether the— since Mr. Remy’s deposition
`and asserts that the lack of updated information should lead us to apply an
`adverse inference that any updates would have been unfavorable for the
`Petitioner. PO Resp. 2, 13—14. We do not apply an adverse inference. As
`explained herein, Mr. Remy’s testimony regarding funding is clear, and
`Petitioner confirmed its continued accuracy at the hearing. See Ex. 1014
`11 26; Tr. 10027—20. Petitioner also had an obligation to inform Patent
`1 3
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`The evidence of record shows that no entities other than MTI and ITM (the
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`named real parties-in—interest) have provided or are providing funding for
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`MTI’s participation in the instant proceedings. Mr. Remy’s testimony is
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`unequivocal on this point, and Petitioner confirmed at the hearing that it is
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`still accurate. See Ex. 1014 11 26 (“None of the Alleged Entities [including
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`MTHI] have provided or are providing funding or financing for the Petitions
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`or corresponding IPRs.”); Tr. 10027—20. 12 Patent Owner also argues “Vestar
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`and MTHI—
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`—” Po Resp. 12—13 (citing Ex. 2022,
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`153:6—15526, 159:9—160z4). We disagree that this arrangement shows
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`Owner and the Board if the facts to which Mr. Remy testified were no longer
`true. See also 37 C.F.R. § 42.11(a) (“Parties and individuals involved in the
`proceeding have a duty of candor and good faith to the Office during the
`course of a proceeding”), 42.51(b)(1)(iii) (“Unless previously served, a
`party must serve relevant information that is inconsistent with a position
`advanced by the party during the proceeding concurrent with the filing of the
`documents or things that contains the inconsistency. .
`.
`. This requirement
`extends to .
`.
`. corporate officers, and persons involved in the preparation or
`filing of the documents or things”). Moreover, if Patent Owner believed
`discovery of additional materials was warranted in these proceedings, Patent
`Owner could have sought authorization to file a motion for additional
`discovery under 37 C.F.R. § 42.51 (b)(2), but Patent Owner never did so.
`
`12 We note that Mr. Remy did testify that other costs may be incurred in the
`instant proceedings, such as time spent by MTI employees, and that these
`“opportunity costs” may be borne by entities other than ITM, the funding
`entity. Ex. 2022, 9425—96220. For example, Mr. Remy stated that he is not
`compensated beyond his normal employee compensation for his work in
`connection with the instant proceedings. Id. at 94: 15—23.
`14
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`control. Ifanything, that—
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`instant proceedings.
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`As for what entities control MTI’s participation in the instant
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`proceedings, Mr. Remy testified that, “[a]s CEO of Mobile Tech, Inc., I was
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`and am the final decision maker on the filing of petitions for [inter partes
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`review (IPR)] or [post-grant review (PGR)].” Ex. 1014 1] 20; EX. 2022,
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`14623—5 (Question: “Have individuals associated with Mobile Tech
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`Holdings made decisions relating to the IPRs?”; Answer: “No. Other than
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`myself.”). Mr. Remy also testified that the decision to file petitions for inter
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`partes review in the instant proceedings “was not made, developed or
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`implemented by Vestar Capital Partners, Mobile Tech Holdings, Inc., MTI
`
`Intermediate, Inc. or MTI Buyer, Inc.” Ex. 1014 W 20—21, 24 (Mr. Remy
`
`testifying that Vestar, MTHI, MTI Intermediate, and MTI Buyer “have made
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`no decisions associated with the Petitions or related IPRs”), 28—29. In fact,
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`the holding companies now in the chain of ownership of MTI (MTHI, MTI
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`Intermediate, and MTI Buyer) did not even exist at the time MTI was first
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`sued by Patent Owner and decided to pursue a strategy of filing petitions
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`seeking inter partes review of Patent Owner’s patents. Id. 1111 22, 25.
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`Patent Owner makes several assertions as to alleged control of MTI
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`by MTHI, citing various excerpts from the testimony of Mr. Remy and
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`supporting exhibits. PO Resp. 6—8 (citing Ex. 2022, 17 :9—12, 20:18—22,
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`21 :6—10, 23: 17—24: 16, 25:21—26z9, 28: 19—22, 29: 17—31211, 31:12—17, 32:6—
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`13, 3225—3323, 34:18—22, 53214—5523, 62:21—64:5, 6423—5, 66210—673,
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`73:5—12, 7428—18, 7629—21, 8328—8514,136:12—139:15,139:8-21,151:10—
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`152:7, 166: 19—167z6, 168:23—169z6; Ex. 2004; Ex. 2034; Ex. 2025). Having
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`reviewed this testimony and the remainder of Mr. Remy’s deposition
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`testimony, we determine that the evidence does not show that MTHI is a real
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`party-in—interest in the instant proceedings.
`
`Patent Owner notes that MTHI employs Mr. Remy, Mr. Remy reports
`
`to the Board of Directors of MTHI, and Mr. Remy “can be fired or overruled
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`on any matter, including the [instant] proceedings.” PO Resp. 8, 11—12
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`(citing Ex. 2022, 1729—12, 2126—10, 32:6—13, 60: 10—14, 118218—11922,
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`166:13—167z6). As we noted in our prior decision,
`
`Mr. Remy’s testimony reveals a corporate structure that,
`unsurprisingly, permits control of MTI,
`a wholly-owned
`subsidiary, by its parent holding company MTHI
`(via
`intermediary holding companies MTI Intermediate and MTI
`Buyer), but it also shows nothing more than a typical corporate
`holding company structure, as well as the unlikely prospect of
`exertion of any control with respect to the instant proceedings.
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`IPR2016-01915, Paper 30, 10. Patent Owner takes issue with that finding
`
`and argues that “[Mr.] Remy’s admissions show that the MTI to MTHI
`
`corporate structure is anything but normal or typical” because “MTHI is the
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`corporate entity to whom Mr. Remy reports and the entity with absolute
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`interest and control in the business of MTI.” PO Resp. 9. We disagree
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`because we find that the evidence does not support Patent Owner’s assertion
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`of absolute interest and control; instead, the evidence shows that Mr. Remy
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`and not MTHI is directing the course of MTI’s participation in these IPRs.
`
`Isn’t it true that between the board of Mobile Tech
`Q
`Holdings and yourself as CEO of the subsidiary Mobile Tech, if
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`there was a settlement proposal to resolve the disputes with Invue
`that Mobile Tech Holdings felt was acceptable, Mobile Tech
`Holdings could instruct you to accept the settlement?
`
`This is the question you brought up before and
`[A]
`that’s where I still — I’m not sure of the agreement with the
`— And would there need
`to be any discussion with the folks that are—
`
`We went through that, but my question is between -
`Q
`-
`leaving aside the question about what, if any, rights -
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`
`
`[A]
`
`I’m not sure. I’m not sure what the agreement is.
`
`My question is between yourself as CEO of Mobile
`Q
`Tech and the board of Mobile Tech Holdings Inc., the board of
`Mobile Tech Holdings Inc. has the authority to instruct you to
`settle the lawsuit, correct?
`
`So as I’ve stated throughout this situation, when it
`[A]
`comes to the operations and the legal filings and the fight against
`Invue, I’m the one making the decisions. If the board decided
`that they wanted to overrule me or fire me in order to make a
`decision, they could do that. But they’re looking to me as the
`operator of Mobile Tech Inc. to make the decision. So your
`question is could they make the decision hypothetically? Sure.
`They could fire me or we could get in a dispute about it and then
`they could decide to make a decision and accept a settlement if I
`was not in agreement.
`
`In fact, the board of Mobile Tech Holdings Inc. has
`Q
`the authority to decide to dismiss or terminate the legal
`proceedings against Invue for any reason, correct?
`
`17
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`I’m not sure if they can terminate it
`I’m not sure.
`[A]
`because there’s other parties involved with MTI Holdings LLC.
`So I don’t know.
`
`Ex. 2022, 165: 1 5—167: 16 (objections omitted).
`
`Well, ultimately isn’t it the case that if the board of
`Q
`Mobile Tech Holdings Inc. had a disagreement with you about
`settling any legal matter that the board of Mobile Tech Holdings
`Inc. would have the final decision making authority?
`
`I guess if they really wanted to make a
`Sure.
`[A]
`decision and I was in total disagreement and they wanted to fire
`me and make that decision they could do that. Absolutely. But
`they don’t — that’s not what they do.
`I mean, these are financial
`partners, not operating partners. They don’t know anything
`about our industry at all.
`
`Ex. 2022, 118: 1 8—1 19:6 (objection omitted).
`
`This testimony shows that MTI’s CEO, Mr. Remy, is making the
`
`decisions with respect to the instant proceedings on behalf of MTI. See
`
`Ex. 1014 W 20, 28; see also Ex. 2022, 146:3—5; cf. Ex. 2022, 148:14—17
`
`(Mr. Remy testifying that Vestar, MTHI, MTI Intermediate, and MTI Buyer
`
`are “not making the decisions and I’m not seeking consultation from MTI or
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`Mobile Tech Holdings Inc. as a board as it pertains to this litigation”).
`
`Mr. Remy also testified that he has not discussed the instant proceedings
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`with the Board of MTHI “in a board format” but that he has “discussed with
`
`individuals about what’s transpired more as an update of what we’re doing.”
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`Ex. 2022, 66: 10—18; see also id., 75:8—77:1 (Mr. Remy testifying that he has
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`talked to John Stephens (secretary of MTI and Board member of MTHI)
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`“[s]ix times maybe” about the In Vue vs. MTI litigation and IPRs but that
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`“[i]t’s never been a topic of the board meetings”). Mr. Remy also testified:
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`“As it pertains to the costs associated with the lawsuit that InVue filed
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`against us and the IPRs associated with it, I’ve not discussed it with the
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`board or board members. I’ve not talked about it, the cost.” Ex. 2022, 75:2—
`
`6.
`
`Contrary to Patent Owner’s arguments, we do not see evidence of a
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`“blurring” of the lines of corporate separation between MTI and the other
`
`entities that shows these entities are real parties-in-interest. See PO Resp. 5—
`
`6. Rather, MTI is the operating company that makes a product (and has
`
`been sued for infringement of various patents), and MTHI, MTI
`
`Intermediate, and MTI Buyer are parent holding companies, with no
`
`independent operations of their own. Without more, we determine that the
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`parent-subsidiary relationship between MTHI and MTI is insufficient for
`
`MTHI to be a real party-in-interest with respect to the instant proceedings.
`
`Moreover, as explained in the Office Patent Trial Practice Guide, “at a
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`general level, the ‘real party-in-interest’ is the party that desires review of
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`the patent.” 77 Fed. Reg. at 48,759. The evidence of record shows that MTI
`
`is the party that desires review of the challenged patents. As Petitioner
`
`points out, “MTI desires review because it is the only party that has been
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`sued by InVue for patent infringement and it is the only party that makes and
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`sells products accused of infringement.” Reply 20 (citing Ex. 1022
`
`(complaint against MTI alleging infringement of the ’ 1 10 patent)). ITM also
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`is a real party-in-interest by virtue of the fact that it was—
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`_used to finance these proceedings. Ex. 2022, 155:3—6.
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`Patent Owner also argues that “MTI