UNITED STATES PATENT AND TRADEMARK OFFICE
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`_____________________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`_____________________
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`TAYLOR MADE GOLF COMPANY, INC.
`Petitioner
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`v.
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`PARSONS XTREME GOLF, LLC
`Patent Owner
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`Case IPR2018-00768
`U.S. Patent 9,345,938
`_____________________
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`PETITIONER TAYLOR MADE GOLF COMPANY, INC.’S RESPONSE TO
`PATENT OWNER’S MOTION TO SEAL
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`Mail Stop “PATENT BOARD”
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
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`
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`_____________________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`_____________________
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`TAYLOR MADE GOLF COMPANY, INC.
`Petitioner
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`v.
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`PARSONS XTREME GOLF, LLC
`Patent Owner
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`Case IPR2018-00768
`U.S. Patent 9,345,938
`_____________________
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`PETITIONER TAYLOR MADE GOLF COMPANY, INC.’S RESPONSE TO
`PATENT OWNER’S MOTION TO SEAL
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`Mail Stop “PATENT BOARD”
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
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`
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`Case IPR2018-00768
`U.S. Patent 9,345,938
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`Pursuant to 37 C.F.R. §§ 42.14 and 42.54, Petitioner Taylor Made Golf
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`Company, Inc. (“Taylor Made”) respectfully submits this Response to Patent
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`Owner’s Motion to Seal Exhibits 2084-2106 and the Supplement to PXG’s Patent
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`Owner Response (“SPOR”). Paper No. 28 (“Motion”). The Motion comes to the
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`Board under unique procedural circumstances, but nevertheless, Taylor Made
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`shows below that good cause exists to seal certain portions of Exhibits 2084-2106
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`and the SPOR, which relies on these documents. The materials that the parties seek
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`to seal can generally be broken down into one or more of the following types of
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`sensitive and confidential Taylor Made information: financial data, customer-
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`related information, competitive intelligence, market research, or research and
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`development information.
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`PXG is the movant here, but it is with two exceptions Taylor Made’s
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`confidential information at issue in this Motion.1 Thus, Taylor Made files this
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`Response in support of PXG’s Motion. This situation arises because PXG moved
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`for additional discovery on December 12, 2018. See Paper 19. PXG only knew of
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`this information because it was produced by Taylor Made under seal in the district
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`1 These exceptions are Exhibit 2084, which is PXG’s expert declaration prepared
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`in reliance on Taylor Made’s confidential information, and Paper No. 27, which
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`quotes liberally from Taylor Made’s documents.
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`Case IPR2018-00768
`U.S. Patent 9,345,938
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`court. See Paper 19, 1. After the Board granted PXG’s motion for additional
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`discovery, PXG relied on the confidential documents it obtained pursuant to that
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`motion, and filed the instant motion to seal. For the reasons stated more fully
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`below, the Board should grant PXG’s motion to seal.
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`In order to simplify the issues and ensure that the public record is complete,
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`Taylor Made provides redacted versions of each document subject to PXG’s
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`motion, except for Exhibit 2103, which is comprised almost solely of highly
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`sensitive commercial information such that a public redacted version would be of
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`little value.
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`I.
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`LEGAL STANDARD
`The Office Patent Trial Practice Guide states that “[t]he rules aim to strike a
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`balance between
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`the public’s
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`interest
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`in maintaining a complete and
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`understandable file history and the parties’ interest in protecting truly sensitive
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`information.” 77 Fed. Reg. 48756, 48760 (Aug. 14, 2012). The rules also “identify
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`confidential information in a manner consistent with Federal Rule of Civil
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`Procedure 26(c)(1)(G), which provides for protective orders for trade secret or
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`other confidential research, development or commercial information.” Id. (citing
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`37 C.F.R. § 42.54).
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`The standard governing the Board’s determination of whether to grant a
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`motion to seal is “good cause.” Garmin v. Cuozzo, IPR2012-00001, Paper 37
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`Case IPR2018-00768
`U.S. Patent 9,345,938
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`(April 5, 2013); see also 37 C.F.R. § 42.54. To establish good cause for sealing a
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`document, the moving party must explain “(1) what adverse consequences and
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`harm would result from public disclosure of each item of information sought to be
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`sealed, and (2) why the party presenting the item of information must rely,
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`specifically, on the subject information, and the parties cannot stipulate away any
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`such need.” Corning Optical Comm’ns RF, LLC v. PPC Broadband, Inc.,
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`IPR2014-00736, slip. op. at 2 (PTAB Apr. 14, 2015) (Paper 38). The moving party
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`must also balance “(1) the public’s interest in maintaining a complete and
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`understandable record, (2) the harm to a party, by disclosure of the information,
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`and (3) the need of either party to rely specifically on the information at issue.” Id.
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`at 3.
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`FOR TREATING CERTAIN
`II. GOOD CAUSE EXISTS
`DOCUMENTS AS “CONFIDENTIAL – FOR COUNSEL ONLY”
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`Each of the exhibits summarized below should be designated “Confidential
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`– For Counsel Only” under the Protective Order (see PXG2020 (“Protective
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`Order”), ¶1(b)) because it contains “trade secret or other confidential research,
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`development, financial, customer related data, or other commercial information” of
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`Petitioner Taylor Made, and the information PXG and Taylor Made seek to have
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`sealed is not necessary to provide the public with a complete and understandable
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`record of this proceeding.
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`Case IPR2018-00768
`U.S. Patent 9,345,938
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`For each document (except PXG2103), Taylor Made has provided redacted
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`versions of the document that remove only the confidential information.2
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`A. EXHIBITS 2085, 2086, 2087, AND 2088 – TAYLOR MADE’S
`FINANCIAL DATA
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`The Board should seal Exhibits 2085, 2086, 2087, and 2088 because they
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`contain confidential financial information relating to Taylor Made’s sales and
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`forecast numbers for dozens of its products, or testimony regarding the same.
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`Redacted versions of these exhibits have been submitted as TMG1085, TMG1086,
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`TMG1087, and TMG1088, respectively.
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`To be clear, these documents contain monthly or annual sales or forecast
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`numbers for broad swaths of Taylor Made’s product lineup: the P790 (the sole club
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`for which PXG relies on these documents), other irons, metalwoods, wedges,
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`2 Because these redacted versions are being filed publicly, Taylor Made has also
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`redacted any confidentiality designations that appear on the documents. In
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`addition, to avoid confusion over which exhibit number is correct, Taylor Made
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`has redacted PXG’s Exhibit Stamps and placed its own stamps reflecting the
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`exhibits numbers identified below. To further simplify the exhibit designations,
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`Taylor Made has filed the exhibits with corresponding numbers in the Petitioner’s
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`exhibit range (e.g., the redacted public version of PXG2084 is submitted as
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`TMG1084).
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`U.S. Patent 9,345,938
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`putters, balls, and soft goods like golf bags, as well as deposition testimony about
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`this information. Public disclosure of these exhibits would harm Taylor Made
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`because competitors would gain access to commercially sensitive information
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`about Taylor Made’s sales and forecasts.
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`In contrast, the public has little to no interest in Taylor Made’s financial
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`data. This data—and publicly available information estimating the data—was
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`summarized in both PXG’s public Patent Owner’s Response (“POR”) and
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`supporting expert declaration of Andrew Carter. See, e.g., Paper 21, 47-49;
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`PXG2032, ¶¶57-59. Moreover, the public’s understanding of the issues in this case
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`does not turn on any of the financial data that appear in these exhibits.
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`Notably, similar information from PXG has already been sealed in this IPR
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`and granted “Confidential – For Counsel Only” confidentiality. The Board granted
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`PXG’s motion to seal the exhibit identified as PXG2014, which contains financial
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`data similar to—but far less detailed than—the information contained in Taylor
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`Made’s documents. See Paper 17, 3. In view of the likelihood of substantial harm
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`to Taylor Made, PXG’s purported need to use this information to demonstrate the
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`commercial success of Taylor Made’s non-infringing P790 irons, and the minimal
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`public interest in the exhibits, the balance of factors favors sealing Exhibits 2085,
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`2086, 2087, and 2088 and designating these exhibits “Confidential – For Counsel
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`Only.”
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`Case IPR2018-00768
`U.S. Patent 9,345,938
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`B. EXHIBITS 2089 AND 2090 – TAYLOR MADE’S P790
`DEMAND AND PLANNED MANUFACTURING CAPACITY
`INFORMATION
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`The Board should seal Exhibits 2089 and 2090. These documents, which
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`Taylor Made files in redacted form as TMG1089 and TMG1090, respectively, are
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`an email relating to the demand for the P790 irons, Taylor Made’s inventory, and
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`manufacturing capacity for the P790 irons (Exhibit 2090), and deposition
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`testimony regarding the same (Exhibit 2089). Moreover, the documents reveal the
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`identity of a Taylor Made customer and the relationship between Taylor Made’s
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`early sales forecasts, the actual demand for the non-infringing P790 irons, and
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`Taylor Made’s manufacturing capacity and inventory of the P790s. This is
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`precisely the kind of information that the Protective Order defines as “Confidential
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`– For Counsel Only” information. Protective Order, ¶1(b). Public disclosure of
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`these exhibits would harm Taylor Made because disclosure would reveal customer
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`identities and other competitively sensitive information to Taylor Made’s
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`competitors.
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`The public has little to no interest in this information. The public does not
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`need to know the identity of Taylor Made’s customers or whether Taylor Made
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`overestimated or underestimated the sales of the P790 irons. Indeed, from the
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`public versions of PXG’s POR and Carter declaration, the public is aware that the
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`P790 irons are excellent sellers. See, e.g., Paper 21, 47-49; PXG2032, ¶¶57-59.
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`Case IPR2018-00768
`U.S. Patent 9,345,938
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`Given the likelihood of substantial harm to Taylor Made, the minimal
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`importance of this information to PXG’s case, and the minimal public interest in
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`these exhibits, the balance of factors favors sealing Exhibits 2089 and 2090 and
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`designating them “Confidential – For Counsel Only.”
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`C. EXHIBITS 2093, 2094, 2095, 2101, AND 2106 – TAYLOR
`MADE’S COMPETITIVE ANALYSIS AND MARKET
`INTELLIGENCE DOCUMENTS
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`The Board should seal Exhibits 2093, 2094, 2095, 2101, and 2106 as
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`“Confidential – For Counsel Only.” Taylor Made has submitted redacted versions
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`of these exhibits as TMG1093, TMG1094, TMG1095, TMG1101, and TMG1106,
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`respectively.
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`Public disclosure of these Taylor Made documents would cause the
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`company competitive harm, yet the public has no meaningful interest in the
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`documents. Exhibits 2093, 2094, 2095, 2101, and 2106 identify other companies’
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`clubs, including Taylor Made’s characterizations and thoughts about these clubs,
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`tests performed on the clubs, and commentary from testers on the clubs. These
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`documents reveal Taylor Made’s analysis of the golf club market as a whole, its
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`identification of a “new trend” in golf club design, and the thought processes and
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`early development steps that Taylor Made took to capitalize on that trend.
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`Disclosure of Taylor Made’s identification of, and solution to, this trend would
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`harm Taylor Made by allowing competitors to piggyback off of Taylor Made’s
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`U.S. Patent 9,345,938
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`analysis and develop similar solutions. These confidential market analysis and
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`development documents fall squarely within the “Confidential – For Counsel
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`Only” designation of the protective order. Protective Order, ¶1(b). Moreover, the
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`public has no interest in Taylor Made’s views of other companies’ golf clubs, its
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`identification of a market trend, or its early thoughts on how to take advantage of
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`the trend.
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`PXG cites these documents only in its SPOR to allege copying, commercial
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`success, and industry praise. See Paper 27, 1-3. PXG made these same arguments
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`based on publicly available information in its original POR. See POR, 45-61. The
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`public does not need access to Taylor Made’s internal documents to understand
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`that PXG believes that Taylor Made copied its products, that the P790 is a huge
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`commercial success, and that PXG’s clubs have been praised.
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`For these reasons, Exhibits 2093, 2094, 2095, 2101, and 2106 should be
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`sealed and designated “Confidential – For Counsel Only.”
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`D. EXHIBIT 2103 – TAYLOR MADE’S INTERNAL “FULL YEAR
`OPPORTUNITY REVIEW” PRESENTATION
`The Board should seal Exhibit 2103 in its entirety as “Confidential – For
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`Counsel Only” because public disclosure of this document would cause Taylor
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`Made serious competitive harm. Accordingly, because the entire document is
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`U.S. Patent 9,345,938
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`especially sensitive, Taylor has not submitted a redacted public version of this
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`document.
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`Exhibit 2103 is an internal presentation that contains significant detail about
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`Taylor Made’s business and strategy, from net sales, margins, and other financial
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`data of the entire company, to analyses of competitors’ commercial positions in
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`golf clubs, golf balls, and other markets, marketing expenditures, and short- and
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`long-term business planning. Allowing competitors to access this information
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`would allow them to rob Taylor Made of business opportunities it identified,
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`outspend Taylor Made in certain market segments, and develop competitive
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`strategies to counter Taylor Made’s business planning. The public has no need or
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`interest in such sensitive information that could possibly outweigh the risk of harm
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`to Taylor Made.
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`For
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`these reasons, Exhibit 2103 should be sealed and designated
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`“Confidential – For Counsel Only.”
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`FOR TREATING CERTAIN
`III. GOOD CAUSE EXISTS
`DOCUMENTS AS “CONFIDENTIAL INFORMATION”
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`The Board should seal Exhibits 2091, 2092, 2096, 2097, 2098, 2099, 2100,
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`2102, 2104, and 2105 as designated “Confidential Information.”3 PXG’s Motion
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`3 Taylor Made submits redacted versions of these documents as TMG1091,
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`TMG1092, TMG1096, TMG1097, TMG1098, TMG1099, TMG1100, TMG1102,
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`U.S. Patent 9,345,938
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`failed to mention that PXG already tried to de-designate these documents in the
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`district court litigation and the court ordered them to be designated “Confidential.”
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`TMG1108, 16-17 (ordering these documents and others to be designated
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`“Confidential”). In the interests of economy and efficiency, the Board should adopt
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`the court’s prior ruling. But even if the Board wishes to undertake the same
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`analysis, it should find Exhibits 2091, 2092, 2096, 2097, 2098, 2099, 2100, 2102,
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`2104, and 2105 to be “Confidential Information.”
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`These exhibits are similar to Exhibits 2093, 2094, 2095, 2101, and 2106.
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`These documents reflect internal communications regarding other companies’
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`clubs, summaries of market intelligence obtained by Taylor Made, and similar
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`marketplace and competitive information. The court’s decision to designate them
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`“Confidential” rather than “Confidential – For Counsel Only” (under essentially
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`the same terms as in this IPR’s Protective Order) turned on PXG’s claim that its
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`principals needed to review the documents to make “informed decisions about
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`settlement and litigation strategy.” TMG1108, 15-16. While PXG makes no such
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`allegation here, Taylor Made recognizes that the de-designation bell cannot be
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`unrung, and thus these documents should be treated under the “Confidential
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`TMG1104, and TMG1105, respectively.
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`U.S. Patent 9,345,938
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`Information” provision of the protective order since they have already been
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`disclosed to PXG decision-makers.
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`PXG’s purported interest in these documents, however, does not change the
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`fact that the public has no cognizable interest in these documents. As above, PXG
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`relies on these documents solely in its supplemental POR to allege copying,
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`commercial success, and industry praise, see Paper 27, 1-3, arguments it also
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`attempted to make based solely on publicly available information in its original
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`POR. See POR, 45-61. The public is well aware that PXG believes these
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`allegations; it does not need Taylor Made’s confidential documents to understand
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`PXG’s allegations.
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`For these reasons, and the reasons stated in the district court’s decision,
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`Exhibits 2091, 2092, 2096, 2097, 2098, 2099, 2100, 2102, 2104, and 2105 should
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`be sealed and designated “Confidential” under the Protective Order.
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`IV. EXHIBIT 2084 – PXG’S EXPERT REPORT RELYING ON THE
`INFORMATION ABOVE
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`Exhibit 2084 is an expert report submitted on PXG’s behalf by Andrew
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`Carter. With the exception of Exhibits 2092, 2093, 2099, 2103, and 2106, the
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`Carter declaration is built almost exclusively on the other exhibits subject to
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`PXG’s motion. The Carter declaration includes, for example, statements regarding
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`the total sales of the P790 in units and revenue, charts reflecting Taylor Made’s
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`Case IPR2018-00768
`U.S. Patent 9,345,938
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`forecasted and actual sales, and tables that include exact Taylor Made sales or
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`forecast numbers. For all of the reasons stated above with respect to Exhibits 2091,
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`2094 through 2098, 2100, 2101, 2102, 2104, and 2105, Taylor Made requests that
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`the Board seal and designate Exhibit 2084 “Confidential Information.”
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`V.
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`PXG’S SUPPLEMENTAL PATENT OWNER RESPONSE
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`PXG’s SPOR contains three pages of “argument.” The vast majority of these
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`three pages are direct quotes from Taylor Made’s confidential information. For all
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`of the reasons stated above with respect to Exhibits 2084 through 2106, Taylor
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`Made requests that the Board seal and designate PXG’s SPOR “Confidential
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`Information.” Taylor Made submits a redacted version of PXG’s SPOR as
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`TMG1107.
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`VI. CERTIFICATION OF NONPUBLICATION
`Undersigned counsel, on behalf of Taylor Made, certifies that the
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`information sought to be sealed has not, to their knowledge, been published or
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`otherwise made public by Taylor Made.
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`VII. CONCLUSION
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`For the foregoing reasons, Taylor Made respectfully requests that the Board
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`seal Exhibits 2084 through 2106. Taylor Made further requests that the Board
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`designate Exhibits 2085 through 2090, 2093 through 2095, 2101, 2103, and 2106
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`“Confidential – For Counsel Only” and that the Board designate Exhibits 2091,
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`U.S. Patent 9,345,938
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`2092, 2096, 2097, 2098, 2099, 2100, 2102, 2104, 2105, and 2107 as “Confidential”
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`pursuant to the Protective Order.
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`Respectfully submitted,
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`STERNE, KESSLER, GOLDSTEIN & FOX P.L.L.C.
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`Richard D. Coller III (Reg. No. 60,390)
`Attorney for Petitioner
`Taylor Made Golf Company, Inc.
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`Date: January 24, 2019
`1100 New York Avenue, N.W.
`Washington, D.C. 20005-3934
`(202) 371-2600
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`CERTIFICATE OF SERVICE (37 C.F.R. § 42.6(e))
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`Case IPR2018-00768
`U.S. Patent 9,345,938
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`
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`The undersigned hereby certifies that on January 24, 2019 the above-
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`captioned PETITIONER TAYLOR MADE GOLF COMPANY, INC.’S
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`RESPONSE TO PATENT OWNER’S MOTION TO SEAL was served in its
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`entirety via electronic mail upon the following counsel of record for the Patent
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`Owner:
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`Richard W. Miller (Lead Counsel)
`Jonathon A. Talcott (Back-up Counsel)
`Joseph P. Anderson III (Back-up Counsel)
`Marc S. Segal (Back-up Counsel)
`millerrw@ballardspahr.com
`talcottj@ballardspahr.com
`andersonjp@ballardspahr.com
`segalm@ballardspahr.com
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`
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`Respectfully submitted,
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`STERNE, KESSLER, GOLDSTEIN & FOX P.L.L.C.
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`
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`
`
`Richard D. Coller III (Reg. No. 60,390)
`Attorney for Petitioner
`Taylor Made Golf Company, Inc.
`
`
`
`
`Date: January 24, 2019
`1100 New York Avenue, N.W.
`Washington, D.C. 20005-3934
`(202) 371-2600
`
`
`
`
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