Paper No. 46
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`________________
`
`APPLE INC.,
`VISA INC., and VISA U.S.A. INC.,
`Petitioners,
`
`v.
`
`UNIVERSAL SECURE REGISTRY LLC
`Patent Owner
`________________
`
`Case IPR2018-008091
`U.S. Patent No. 9,530,137
`________________
`
`PATENT OWNER’S REPLY TO PETITIONER’S OPPOSITION TO
`PATENT OWNER’S MOTION TO STRIKE
`IMPROPER REPLY EVIDENCE
`
`1 Visa Inc. and Visa U.S.A., Inc., which filed a petition in IPR2018-00174,
`
`have been joined as a party to this proceeding.
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`________________
`
`APPLE INC.,
`VISA INC., and VISA U.S.A. INC.,
`Petitioners,
`
`v.
`
`UNIVERSAL SECURE REGISTRY LLC
`Patent Owner
`________________
`
`Case IPR2018-008091
`U.S. Patent No. 9,530,137
`________________
`
`PATENT OWNER’S REPLY TO PETITIONER’S OPPOSITION TO
`PATENT OWNER’S MOTION TO STRIKE
`IMPROPER REPLY EVIDENCE
`
`1 Visa Inc. and Visa U.S.A., Inc., which filed a petition in IPR2018-00174,
`
`have been joined as a party to this proceeding.
`
`
`
`Case No. IPR2018-00809
`U.S. Patent No. 9,530,137
`
`In its Petition, Apple Inc. (“Petitioner”) argues that International Patent
`
`Application Publication No. WO 2004/051585 A2 (“Jakobsson”) (Ex-1113)
`
`discloses several limitations of U.S. Patent No. 9,530,137 (“the ’137 patent). See
`
`Petition at 5-6, 20-72. Petitioner supports these arguments with expert testimony
`
`from Dr. Victor Shoup. See Ex-1102. Patent Owner explained in its Patent Owner
`
`Response how such allegations are wrong. In addition to further testimony by Dr.
`
`Shoup, Petitioner’s reply also proffered a brand new expert witness, Dr. Ari Juels
`
`(Ex-1130), which Patent Owner has moved to strike.
`
`In opposition to Patent Owner’s motion, Petitioner contends that it is
`
`proffering Dr. Juels not only as an expert, but as a fact witness as well. See, e.g.,
`
`Opp. at 1 (“Dr. Juels and Dr. Jakobsson are co-inventors”). As explained in the
`
`opening motion, this new evidence is untimely because it was not presented in the
`
`original Petition, and Petitioner’s newly minted theory that Dr. Juels is also a
`
`necessary fact witness because he is an inventor of the asserted prior art reference,
`
`compounds that tardiness. Indeed, as an inventor of the art Petitioner relies upon
`
`in the Petition, Petitioner could have presented Dr. Juels’ testimony with the
`
`Petition. Petitioner chose not to. Moreover, because the Board has denied
`
`allowing Patent Owner to rebut this last minute factual and expert evidence, failure
`
`to strike Dr. Juels’ declaration is highly prejudicial.
`
`1
`
`
`
`Case No. IPR2018-00809
`U.S. Patent No. 9,530,137
`
`I.
`
`DR. JUELS’ DECLARATION IS IMPROPER UNTIMELY NEW
`EVIDENCE THAT IS HIGHLY PREJUDICIAL
`
`As explained in the opening motion, the governing statute requires a petition
`
`to identify “with particularity . . . the evidence that supports the grounds for the
`
`challenge to each claim, including . . . affidavits or declarations of supporting
`
`evidence and opinions, if the petitioner relies on expert opinions.” 35 U.S.C.
`
`§312(a)(3)(B) (emphasis added). The Trial Practice Guide’s Aug. 2018 update
`
`(“TPG”) confirms the importance of this requirement: “Petitioner may not submit
`
`new evidence or argument in reply that it could have presented earlier . . .” TPG
`
`at 14. See SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348, 1356 (2018) (“the petitioner's
`
`petition, not the Director’s discretion, is supposed to guide the life of the
`
`litigation.”) (emphasis added); cf. Dexcom, Inc. v. Waveform Techs., Inc.,
`
`IPR2016-01680 (Paper 46) at 30 (PTAB Feb. 28, 2018) (excluding evidence raised
`
`for first time in a reply brief), aff’d Dexcom, Inc. v. Waveform Technologies, Inc.,
`
`760 Fed. Appx. 1023 (Fed. Cir. Apr. 3, 2019) (per curiam).
`
`While Petitioner argues that Dr. Juels’ testimony is permissible because it
`
`responds to Dr. Jakobsson’s testimony regarding the Jakobsson prior art reference,
`
`and that it could not have anticipated such testimony, Petitioner’s contentions are
`
`incorrect as a matter of law and fact. See Opp. at 2-7.
`
`2
`
`
`
`Case No. IPR2018-00809
`U.S. Patent No. 9,530,137
`
`Petitioner primarily relies upon Belden Inc. v. Berk-Tek LLC, 805 F.3d 1064
`
`(Fed. Cir. 2015) to argue that reply declarations that respond to patent owner
`
`arguments are permissible. Opp. 2-7. However, Belden is clearly distinguishable.
`
`To begin with, Belden’s reply declaration solely presented expert testimony--not
`
`factual as well as expert testimony, as the instant proceeding concerns. And, the
`
`Federal Circuit noted the patent owner in that case failed to even file a sur-reply
`
`addressing the issue; unlike here, where the Board has denied allowing Patent
`
`Owner to file rebuttal testimony.
`
`Petitioner’s other cited cases are inapposite. For example, the Board has
`
`distinguished Anacor Pharm., Inc. v. Iancu, 889 F.3d 1372 (Fed. Cir. 2015) on the
`
`grounds that the patent owner in that case had prior notice of the supposed new
`
`evidence; Petitioner has not even alleged Patent Owner had prior notice of Dr.
`
`Juels’ testimony. See Aisin Seiki Co., Ltd. v. Intellectual Ventures II LLC,
`
`IPR2017-01538, 2018 WL 6584583, at *27 (PTAB Dec. 12, 2018) (“patent owner
`
`had previously discussed those contentions in its own papers”). Hughes Network
`
`Sys., LLC v. Calif. Inst. Tech., IPR2015-00059, 2016 Pat. App. LEXIS 1867, at
`
`*52-*53 (PTAB Apr. 21, 2016) is likewise irrelevant: “Patent Owner was well
`
`aware of Petitioner’s position, which it had the opportunity to address as part of its
`
`response.”
`
`3
`
`
`
`Case No. IPR2018-00809
`U.S. Patent No. 9,530,137
`
`Apple started this proceeding on April 4, 2018 relying upon a declaration
`
`from Dr. Victor Shoup testifying that Jakobsson invalidates the ’137 patent. Yet,
`
`Petitioner waited over a year, and on the eve of trial, to introduce testimony of not
`
`only a brand new expert, Dr. Ari Juels, but also proffer his testimony as a matter of
`
`fact, as an inventor of the reference that is the basis of the Petition. There is no
`
`reason Apple could not have presented such evidence in its Petition—Dr. Juels is
`
`an inventor of Petitioner’s proffered prior art.
`
`Indeed, this new factual evidence is akin to proffering new embodiments of
`
`references, which the Federal Circuit has upheld the Board’s declining to consider
`
`when a petitioner fails to identify or discuss in a petition. See Ariosa Diagnostics
`
`v. Verinata Health, Inc., 805 F.3d 1359, 1367 (Fed. Cir. 2015) (“We see no error in
`
`the Board’s rejection of Ariosa’s reliance, in its Reply submissions, on previously
`
`unidentified portions of a prior-art reference to make a meaningfully distinct
`
`contention.”). The rules are clear; this tardy evidence should be stricken from the
`
`proceeding. Indeed, the trial practice guide states that striking is the appropriate
`
`course here. See TPG at 18.
`
`Further, striking this new evidence is critical here because Patent Owner
`
`cannot rebut this improper new factual and expert evidence with a declaration from
`
`Dr. Markus Jakobsson. Hence, failure to strike would be highly prejudicial to
`
`4
`
`
`
`Case No. IPR2018-00809
`U.S. Patent No. 9,530,137
`
`Patent Owner. Cf. Realtime Data, LLC v. Iancu, 912 F.3d 1368, 1373 (Fed. Cir.
`
`2019) (“[T]he Board may not rely on a basis for a decision unless the party
`
`adversely affected by such reliance had notice of the basis and an adequate
`
`opportunity to address it.”); Dexcom, Inc., IPR2016-01680 at 30 (“Under the
`
`circumstances of this case, it would violate the Administrative Procedures Act
`
`(‘APA’)’s requirement for notice and opportunity to respond, if we were to rely
`
`upon [evidence first submitted in reply].”).
`
`II.
`
`CONCLUSION
`
`“Unlike district court litigation – where parties have greater freedom to
`
`revise and develop their arguments over time and in response to newly discovered
`
`material – the expedited nature of IPRs brings with it an obligation for petitioners
`
`to make their case in their petition to institute.” Intelligent Bio-Systems, Inc. v.
`
`Illumina Cambridge LTD., 821 F.3d 1359, 1369 (Fed. Cir. 2016) (affirming
`
`Board’s refusal of reply brief and expert declaration). Petitioner failed to comply
`
`with this controlling precedent. Indeed, in its Petition, Apple chose to assert the
`
`Jakobsson reference and rely upon Dr. Shoup’s expert testimony. Not until the
`
`Reply did Petitioner proffer the inventor of that reference as both a factual and
`
`expert witness--it could have done both in the Petition. The motion should be
`
`granted.
`
`5
`
`
`
`Case No. IPR2018-00809
`U.S. Patent No. 9,530,137
`
`Date: July 2, 2019
`
` Respectfully submitted,
`
`By: /s/ James M. Glass, Reg. No. 46,729
` James M. Glass (Reg. No. 46,729)
`QUINN EMANUEL URQUHART &
`SULLIVAN, LLP
`51 Madison Avenue, 22nd Floor
`New York, NY 10010
`Tel: (212) 849-7000
`Fax: (212) 849-7100
`Email: jimglass@quinnemanuel.com
`
`Lead Attorney for Patent Owner –
`Universal Secure Registry LLC
`
`6
`
`
`
`Case No. IPR2018-00809
`U.S. Patent No. 9,530,137
`
`CERTIFICATE OF SERVICE
`
`Pursuant to 37 C.F.R. § 42.6(e), the undersigned hereby certifies that
`
`PATENT OWNER’S REPLY TO PETITIONER’S OPPOSITION TO PATENT
`
`OWNER’S MOTION TO STRIKE IMPROPER REPLY EVIDENCE, was served
`
`on July 2, 2019 by e-mailing copies to:
`
`Monica Grewal (Reg. No. 40,056)
`monica.grewal@wilmerhale.com
`Ben Fernandez (Reg. No. 55,172)
`ben.fernandez@wilmerhale.com
`Wilmerhale Distribution List
`wh-apple-usr-ipr@wilmerhale.com
`WILMER CUTLER PICKERING HALE AND DORR LLP
`60 STATE STREET
`BOSTON, MA 02109
`
`Mark Selwyn
`mark.selwyn@wilmerhale.com
`WILMER CUTLER PICKERING HALE AND DORR LLP
`950 Page Mill Road
`Palo Alto, CA 94304
`
`Matthew A. Argenti (Reg. No. 61,836)
`margenti@wsgr.com
`Michael T. Rosato (Reg. No. 52,182)
`mrosato@wsgr.com
`WILSON SONSINI GOODRICH & ROSATI
`650 Page Mill Road
`Palo Alto, CA 94304-1050
`
`Date: July 2, 2019
`
` Respectfully submitted,
`By: /s/ Razmig H. Messerian
` Razmig H. Messerian (Reg. No. 56,983)
`QUINN EMANUEL URQUHART &
`7
`
`
`
`Case No. IPR2018-00809
`U.S. Patent No. 9,530,137
`
`SULLIVAN, LLP
`865 S. Figueroa St., 10th Floor
`razmesserian@quinnemanuel.com
`
`Backup Counsel for Patent Owner –
`Universal Secure Registry LLC
`
`8
`
`
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