UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD. COSTCO WHOLESALE CORPORATION, Petitioner,

Transcription

1 UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD COSTCO WHOLESALE CORPORATION, Petitioner, v. ROBERT BOSCH LLC, Patent Owner. CASE NO. IPR PATENT OWNER S OPPOSITION TO PETITIONER S MOTION TO STRIKE TESTIMONY OF WILFRIED MERKEL

2 Table of Authorities Case No. IPR Cases Clay v. Johns Manville Sales Corp., 722 F.2d 1289 (6th Cir. 1983)... 1 Lloyd v. Am. Export Lines, Inc., 580 F.2d 1179 (3d Cir. 1978)... 1 Robert Bosch LLC v. Pylon Mfg. Corp., 659 F.3d 1142 (Fed. Cir. 2011)... 3 Supermarket of Marlinton, Inc. v. Meadow Gold Diaries, Inc., 71 F.3d 119 (4th Cir. 1995)... 1 Administrative Proceedings HTC Corp. v. NFC Technology, LLC, IPR , Paper No. 41 (PTAB Nov. 6, 2015) Square, Inc. v. REM Holdings 3, LLC, IPR , Paper No. 37 (PTAB Dec. 2014)... 5 Rules Fed. R. Civ. P Fed. R. Civ. P Fed. R. Evid Fed. R. Evid Fed. R. Evid i

3 Regulations Case No. IPR C.F.R C.F.R , 4 37 C.F.R C.F.R Other Materials Black s Law Dictionary (9th ed. 2009)... 5 ii

4 Costco seeks to exclude from evidence what it calls the hearsay testimony of a non-party inventor, given under oath in federal court subject to crossexamination, because Mr. Merkel s failing health prevents him from sitting for live deposition in the United States. Costco s motion rests on two faulty assumptions: that Mr. Merkel s 2010 testimony standing alone is inadmissible under the Federal Rules of Evidence, and that the PTO s rules create an absolute right to oral crossexamination in the United States. Mr. Merkel s trial testimony is admissible under Rule 804(b)(1). When a witness is unavailable, his prior testimony given as a witness at a trial is admissible if offered against a party... whose predecessor in interest had... an opportunity and similar motive to develop it by direct, cross-, or redirect examination. A predecessor in interest is a party having a like motive to crossexamine about the same matters as the present party would have and who was accorded an adequate opportunity for such examination. Lloyd v. Am. Export Lines, Inc., 580 F.2d 1179, 1187 (3d Cir. 1978); see Supermarket of Marlinton, Inc. v. Meadow Gold Diaries, Inc., 71 F.3d 119, 128 (4th Cir. 1995); Clay v. Johns Manville Sales Corp., 722 F.2d 1289, 1295 (6th Cir. 1983). Mr. Merkel s declaration which was served as supplemental evidence to overcome Costco s initial hearsay objection establishes his unavailability. Fed. R. Evid. 804(a)(5) ( cannot be present... because of... a then-existing infirmity, 1

5 [or] physical illness... ). Mr. Merkel has declared under penalty of perjury that, for reasons of cardiac health, [he has] been advised that [he] should not travel and should minimize [his] activities. 1 Ex at 7. Costco does not dispute this. Mr. Merkel s prior testimony was given as a witness at a trial, (Ex at 1), and is being offered against Costco, whose predecessor in interest had... an opportunity and similar motive to develop it. In the trial, defendant Pylon was asserting the obviousness of Bosch wiper patents, including two at issue here, U.S. Patent Nos. 6,292,974 and 6,944,905, (id. at 22), relying on some of the same prior art as Costco has asserted in IPRs and 38 41, (id. at 162:25 163:2). The Merkel testimony is offered to prove that: (i) no commercially viable beam blades existed before 2002, when Bosch satisfied the long-felt need for them, (id. at 346:16 348:2); (ii) Bosch s first commercial beam blade (Aerotwin) and later product (Icon) practice the challenged claims, (id. at 353:22 354:1); (iii) these blades included a flexible spoiler with diverging legs mounted on top of the blade, as well as plastic end caps, (id. at 359:12 360:4); and (iv) beam blades are sensitive to changes caused by adding structures, (id. at 388:23 391:8). This testimony was relevant in the Pylon trial for the same reasons as here because it is probative regarding objective evidence of non-obviousness and the knowledge in 1 The Board is not bound by the rules of evidence when evaluating the sufficiency of Mr. Merkel s declaration vis-a-vis unavailability. See Fed. R. Evid. 104(a). 2

6 the art that beam blade modifications have negative consequences. Pylon thus had the same motivation for cross-examining Merkel as Costco has now, both in kind (to invalidate Bosch s wiper patents) and in degree (Pylon would ultimately be enjoined from selling its beam blades after pursuing an appeal, see Robert Bosch LLC v. Pylon Mfg. Corp., 659 F.3d 1142 (Fed. Cir. 2011)). Mr. Merkel s testimony is also admissible under Rule 807, because (1) it has equivalent circumstantial guarantees of trustworthiness ; (2) it is offered as evidence of a material fact ; (3) it is more probative on the point for which it is offered than any other evidence that the proponent can obtain through reasonable efforts ; and (4) admitting it will best serve the purposes of these rules and the interests of justice. For the reasons above, there are guarantees of trustworthiness the testimony was presented at trial and subject to crossexamination and the facts for which it is offered are material. Its probative value is shown by the fact that Mr. Merkel, before falling ill, traveled from Germany to attend the Pylon trial; Bosch would not have proffered him if Mr. Merkel s testimony were not important. And, because Costco has made no attempt to procure contrary evidence and has rejected Bosch s suggestion of written questions justice would be disserved by excluding the testimony. The transcript is thus within a hearsay exception. And, because it is not an affidavit testimony prepared for [this] proceeding, 37 C.F.R (b)(1)(ii), no 3

7 deposition could be required for any reason. Should the Board find the transcript not within an exception, Mr. Merkel s supplemental declaration adopting his previous testimony as his current testimony is curative. Costco has not challenged the declaration in this respect. Costco only argues that the declaration is an affidavit testimony prepared for [this] proceeding, that therefore Costco is entitled to cross-examination as a matter of routine discovery, that Mr. Merkel s inability to sit for a U.S. deposition violates the rules of routine discovery, and finally that this violation requires all Merkel evidence expunged. But its claim of entitlement to a live deposition is based on a misinterpretation of PTO rules. Rule merely states that cross-examination testimony is authorized. No rule requires the exclusion of direct testimony merely because there has been no live cross. Rather, Rule provides for a motion to compel which Costco has not filed. Nor has Costco deposed other declarants whose testimony overlaps Merkel s. Costco only sought to depose the witness it knew could not attend. Instead, Costco invokes Rule 42.12, which does not grant the Board blanket authority to strike evidence but is limited to sanctions for misconduct. It was not sanctionable misconduct for Bosch to serve the declaration of a man whose heart is failing, or to suggest to Costco the only means of cross-examination his health would allow. Nor do the Board decisions cited by Costco suggest otherwise. In Square, the patent owner refused to arrange a deposition of a foreign witness in the 4

8 United States or in Hong Kong because the costs were prohibitive. IPR , Paper 37, at 2; see 37 C.F.R (g) (requiring proponent to bear the reasonable costs of cross-examination). And, in HTC, the witness refused an overseas deposition for personal reasons, after the proffering patent owner told the Board that they don t need to compel the witness. IPR , Paper 41, at 2 & n.1. Neither case supports the imposition of sanctions against Bosch, who was forthright about Mr. Merkel s condition and who never refused to bear the costs of whatever cross-examination might be appropriate for someone in that condition. Costco also fails to establish that Bosch s suggestion of written questions does not satisfy the rules, which require, at most, that cross-examination occur by deposition. Black s Law Dictionary defines deposition as a witness s out-ofcourt testimony that is reduced to writing... for later use in court or for discovery purposes, and recognizes the existence of both oral deposition[s] and deposition[s] on written questions. The Federal Rules of Civil Procedure are in accord, providing rules for Depositions by Oral Examination (Rule 30) and Depositions by Written Questions (Rule 31). And, nowhere do the statute or rules governing IPRs expressly require live depositions. Costco is merely seizing on Mr. Merkel s poor health to advance its position in these IPRs; it sought evidence nowhere else. Its motion should be denied. 5

9 DATED: October 28, 2016 Respectfully submitted, Shearman & Sterling LLP /Patrick R. Colsher/ Patrick R. Colsher (Reg. No. 74,955) Mark A. Hannemann (pro hac vice) 599 Lexington Ave New York, NY Tel: (212) Counsel for Patent Owner Robert Bosch LLC 6

10 Certificate of Service The undersigned hereby certifies that the foregoing PATENT OWNER S OPPOSITION TO PETITIONER S MOTION TO STRIKE TESTIMONY OF WILFRIED MERKEL was served via electronic mail on October 28, 2016, on the following counsel for Petitioner: Richard M. Koehl (richard.koehl@hugheshubbard.com) James R. Klaiber (james.klaiber@hugheshubbard.com) David E. Lansky (david.lansky@hugheshubbard.com) Stefanie Lopatkin (stefanie.lopatkin@hugheshubbard.com) /Patrick R. Colsher/ Patrick R. Colsher 599 Lexington Ave New York, NY Tel: (212) Counsel for Patent Owner Robert Bosch LLC