Granting-in-part Additional Discovery on Financial Performance Data IPR2015-00149


Takeaway: Evidence that a product practices claims of the challenged patent may support a motion for additional discovery into commercial success even where the relevant market and size of the market has not been established.

In its Decision, the Board granted-in-part Patent Owner’s Motion for Additional Discovery from Petitioner “related to objective indicia of nonobviousness, particularly the financial performance of Petitioner’s allegedly infringing products and industry praise of such products.” Pursuant to the Board’s authorization, Patent Owner filed its Motion accompanied by several exhibits, “including four proposed document requests (Exhibit 2001) and four proposed interrogatories (Exhibit 2002).” However, the Board did not authorize Patent Owner to propose interrogatories and, therefore, denied the Motion as applied to Exhibit 2002. The Board then addressed Patent Owner’s request as applied to Exhibit 2001.

A party seeking additional discovery must establish “that such additional discovery is in the interests of justice.” 37 C.F.R. § 42.51(b)(2); 35 U.S.C. § 316(a)(5). The Board generally considers the five Garmin factors in deciding whether the requested discovery is in the interests of justice. See Garmin Int’l, Inc. v. Cuozzo Speed Techs. LLC, IPR2012-00001, slip op. at 6–7 (PTAB Mar. 5, 2013) (Paper 26) (informative) (“Garmin”).

First, the Board addressed “whether there exists more than a ‘mere possibility’ or ‘mere allegation that something useful [to the proceeding] will be found.” The Board noted that the moving party “should be in possession of evidence tending to show beyond speculation that something useful will be uncovered.”

The first document request in Exhibit 2001 sought financial information related to a particular allegedly infringing product of Petitioner’s. In support of this request, Patent Owner provided a claim chart (Exhibit 2004) mapping Petitioner’s allegedly infringing product to claims of the ’544 patent. Patent Owner argued that the chart established a nexus, and that additional evidence of nexus could be found in consumers’ praise on (Exhibit 2005) that “singled out the patented features, in particular, the swivel cover.” Petitioner opposed, arguing that Patent Owner had not shown “more than a mere possibility that Petitioner’s product is commercially successful because Patent Owner has not provided evidence ‘of both the size of the relevant market (here USB drives) and that the product sale would likely be significant to that market.’” The Board found that considerations of the proper definition of the relevant market and the size of such market need not be decided at this stage. Patent Owner’s claim chart supported its first document request.

The second and third requests sought consumer feedback received by Petitioner, information “relevant to whether Petitioner’s product received praise in the industry, a secondary consideration of nonobviousness.” While the Board noted that the Motion was speculative “as to whether Petitioner receives and maintains such feedback,” the Board stated that “it is typical that a business may receive and maintain such records.” Petitioner also acknowledged “that it may have responsive documents.”

The fourth request, however, was not supported by Patent Owner’s claim chart. The request sought “documents evidencing Petitioner’s ‘initial decision to commercialize’” its product identified in the claim chart. As Petitioner noted, Patent Owner did not identify “a product produced by Patent Owner that Petitioner could have copied,” and Patent Owner’s argument that Petitioner could have copied other designs practicing the ’544 patent was found to be unpersuasive.

The second factor regarding litigation positions and underlying bases, Petitioner argued that Patent Owner’s request was “an ‘end-run’ around” the stay of the district court litigation that would Patent Owner with an “advantage in discussions between the parties.” Patent Owner argued that the factor focused on a party that seeks “the other party’s litigation contentions, not whether there might be co-relevance of discoverable facts.” The Board agreed with Patent Owner.

The third factor concerns Patent Owner’s ability to generate equivalent information by other means. The Board found this factor to support Patent Owner’s first, second, and fourth requests because it would be “difficult, if not impossible, for Patent Owner to generate equivalent information by other means.” The third request, “feedback other than consumer feedback, ‘e.g., industry press,’” was not found to be supported by this factor because such information is likely to be public information.

The fourth factor is whether the instructions are easily understandable. The Board found instructions to produce documents within 14 days to be understandable. To the extent certain terms in the instructions are unclear, the Board found that the parties should meet and confer regarding the scope of those terms.

Finally, the fifth factor concerns whether the requests are overly burdensome to answer. The Board noted that any requested discovery will impose some burden to answer. However, in light of the arguments presented and the Board’s decision to allow Petitioner 30 days instead of the requested 14 days, the Board found the document requests not to be overly burdensome.

For the foregoing reasons, the Board granted the Motion as to the first and second document requests, but denied the Motion as to the third and fourth requests.

Kingston Tech. Co., Inc. v. Catr Co., Ltd., IPR2015-00149
Paper 24: Decision Granting Patent Owner’s Motion for Additional Discovery
Dated: June 10, 2015
Patent: 6,926,544 B2
Before: Thomas L. Giannetti, Bart A. Gerstenblith, and David C. McKone
Written by: Gerstenblith