Bloomberg, Inc. v. Markets-Alert Pty, Ltd.

Trials@uspto.gov Paper 32
571-272-7822 Entered: May 29, 2013
UNITED STATES PATENT AND TRADEMARK OFFICE
____________
BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________
BLOOMBERG INC.; BLOOMBERG L.P.; BLOOMBERG FINANCE L.P.;
THE CHARLES SCHWAB CORPORATION;
CHARLES SCHWAB & CO., INC.;
E*TRADE FINANCIAL CORPORATION; E*TRADE SECURITIES LLC;
E*TRADE CLEARING LLC; OPTIONSXPRESS HOLDINGS INC.;
OPTIONSXPRESS, INC.; TD AMERITRADE HOLDING CORP.;
TD AMERITRADE, INC.; TD AMERITRADE IP COMPANY, INC.; and
THINKORSWIM GROUP INC.
Petitioner,
v.
MARKETS-ALERT PTY LTD.
Patent Owner.
____________
Case CBM2013-00005 (JYC)
Patent 7,941,357
____________
Before JAMESON LEE, SALLY C. MEDLEY, JONI Y. CHANG, Administrative
Patent Judges.
CHANG, Administrative Patent Judge.
DECISION
Motion for Additional Discovery
37 C.F.R. §§ 42.51(b)(2) and 42.224

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INTRODUCTION
Markets-Alert Pty. Ltd. (“Markets-Alert”) filed a motion for additional
discovery seeking production of information considered by a declarant, prior art
and information considered by Bloomberg et al. (collectively “Bloomberg”), and
information related to licensing and commercial implementation.1 (“Mot.” Paper
28; Ex. 2021.) Bloomberg opposes. (“Opp.” Paper 31.) We have considered each
item in the request of Markets-Alert and Bloomberg’s opposition. For the reasons
discussed below, Markets-Alert’s motion for additional discovery is granted-in-
part.
DISCUSSION
The purpose of the Leahy-Smith America Invents Act (“AIA”) is to establish
a more efficient and streamline patent system that will improve patent quality and
limit unnecessary and counterproductive litigation costs. To achieve that goal, the
AIA created new administrative trial proceedings to be conducted by the Board,
including covered business method patent reviews, as a cost-effective alternative to
litigation. It is recognized that limited discovery lowers the cost, minimizes the
complexity, and shortens the period required for dispute resolution. Consistent
with the statutory provisions and legislative intent of the AIA, there is a strong
public policy to limit discovery in administrative trial proceedings, as opposed to
the practice in district court patent litigations that have broad discovery.
While an interests of justice standard is employed in granting additional
discovery in inter partes reviews, a good cause standard is applied in post-grant
reviews and covered business method patent reviews. 37 C.F.R. §§ 42.51(b)(2)(i)
1 In its prior Order, the Board authorized Markets-Alert to file a motion for
additional discovery and Bloomberg to file an opposition. (Paper 27.)

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and 42.224.2 On balance, the interests of justice standard is a slightly higher
standard than the good cause standard, to reflect that the scope of issues which
could be raised by a petitioner in an inter partes review is limited to grounds based
on patents or printed publications. Id.
Notwithstanding the different standards, the legislative intent for those
administrative trial proceedings shares the same principle that each review should
be an efficient, streamlined, and cost-effective alternative to district court
litigation. The statutory provisions for inter partes reviews, post-grant reviews,
and covered-business method patent reviews caution against overly broad
discovery3 and provide the same considerations, including efficient administration
of the Office and the ability of the Office to complete the proceeding timely.4
Moreover, as stated in the legislative history, “[g]iven the time deadlines imposed
on these proceedings, it is anticipated that, regardless of the standards imposed in
[35 U.S.C. §§ 316 and 326], PTO will be conservative in its grants of discovery.”
154 Cong. Rec. S9988-89 (daily ed. Sept. 27, 2008) (statement of Sen. Kyl).
2 See also Changes to Implement Inter Partes Review Proceedings, Post-Grant
Review Proceedings, and Transitional Program for Covered Business Method
Patents, 77 Fed. Reg. 48680, 48693 (Aug. 14, 2012) (final rule).
3 See 35 U.S.C. 316(a)(6) and 326(a)(6) (“The Director shall prescribe
regulations. . . (6) prescribing sanctions for abuse of discovery, abuse of process,
or any other improper use of the proceeding, such as to harass or to cause
unnecessary delay or an unnecessary increase in the cost of the proceeding.”
Emphasis added.)
4 See 35 U.S.C. §§ 316(b) and 326(b) (“In prescribing regulations under this
section, the Director shall consider the effect of any such regulation on the
economy, the integrity of the patent system, the efficient administration of the
Office, and the ability of the Office to timely complete proceedings instituted under
this chapter.” Emphasis added.)

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The Office promulgated the patent trial rules through rulemaking under the
authority of the AIA (e.g., 35 U.S.C. §§ 316 and 326). Consistent with the AIA,
regulations set forth in Part 42, Title 37, Code of Federal Regulations, including
the discovery rules for inter partes reviews, post-grant reviews, and covered-
business method patent reviews, must be construed to secure the just, speedy, and
inexpensive resolution of every proceeding. 37 C.F.R. § 42.1(b).
Markets-Alert as the moving party has the burden of proof in establishing
entitlement to the requested relief. 37 C.F.R. §§ 42.20(c), 42.51(b)(2), and
42.224.5 In its prior Order, the Board advised Markets-Alert to keep the statutory
and regulatory considerations in mind when filing a motion for additional
discovery. (Paper 15, 4-5.) For further guidance, the Board directed the parties’
attention to the factors set forth in “Decision – On Motion For Additional
Discovery” entered in IPR2012-00001. See Garmin International, Inc. et al. v.
Cuozzo Speed Technologies LLC, IPR2012-00001, Paper No. 26 at 6-7 (PTAB,
Mar. 5, 2013).
Those same factors are helpful in determining whether discovery requests
may be granted in covered business method patent reviews. As discussed
previously, administrative trial proceedings share the same public policy, statutory,
and regulatory considerations of discovery. For covered business method patent
review, we slightly modify each of the five factors set forth in Garmin, for
determining whether the requested discovery is necessary for good cause.
5 37 C.F.R. § 42.224 Discovery.
Notwithstanding the discovery provisions of subpart A:
(a) Requests for additional discovery may be granted upon a showing of
good cause as to why the discovery is needed; and
(b) Discovery is limited to evidence directly related to factual assertions
advanced by either party in the proceeding.

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Discovery Factors for Covered Business Method Patent Review
1. More Than A Possibility And Mere Allegation—
The mere possibility of finding something useful, and mere allegation
that something useful will be found, are insufficient to establish a
good cause showing. “Useful” means favorable in substantive value
to a contention of the party moving for discovery. A good cause
showing requires the moving party to provide a specific factual reason
for expecting reasonably that the discovery will be “useful.”
2. Litigation Positions And Underlying Basis—
Asking for the other party’s litigation positions and the underlying
basis for those positions is insufficient to demonstrate that the
additional discovery is necessary for good cause. The Board has
established rules for the presentation of arguments and evidence.
There is a proper time and place for each party to make its
presentation. A party may not attempt to alter the Board’s trial
procedures under the pretext of discovery.
3. Ability To Generate Equivalent Information By Other Means—
A party should not seek information that reasonably can be generated
without a discovery request.
4. Easily Understandable Instructions—
Instructions and questions should be easily understandable. For
example, ten pages of complex instructions for answering questions is
prima facie unclear. Such instructions are counter-productive and
tend to undermine the responder’s ability to answer efficiently,
accurately, and confidently.
5. Requests Not Overly Burdensome To Answer—
Requests must not be overly burdensome to answer, given the
expedited nature of a covered-business method patent review. The
burden includes financial burden, burden on human resources, and
burden on meeting the time schedule of the trial. Requests should be
sensible and responsibly tailored according to a genuine need.

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Information Considered by Declarant
Markets-Alert requests the production of all documents and things
considered by Dr. Steven R. Kursh, Bloomberg’s expert, in conjunction with the
preparation of his declaration filed in this proceeding (Request 3). (Mot. 2;
Ex. 2021, 8.) Markets-Alert asserts that the evidence sought is necessary for
cross-examining Dr. Kursh with respect to his testimony on claim construction and
the state of the art at the time of filing. (Mot. 7.) In its opposition, Bloomberg
argues that it has provided the necessary information, and to the extent that
Markets-Alert’s request goes beyond the provided information, the request is
unduly broad. (Opp. 6-7.)
Applying the Factors to the facts related to Request 3, we determine that
Markets-Alert sufficiently demonstrates specific factual reasons for expecting that
there are other items which the declarant relied on in providing the declaration.
We first note that Request 3 is specific and tailored narrowly, seeking information
from one individual that is related to a single declaration on the issues raised by
Bloomberg in its petition. As support, Markets-Alert provides two specific
examples, which Markets-Alert believes that Dr. Kursh’s testimony is relying upon
evidence other than the cited prior art reference. (Mot. 7. “Kursh opines that ‘real-
time notification’ includes the time period sufficiently long to accommodate the
remote communication devices mentioned in [Patent 7,941,357 (‘the ’357
Patent’)];” and “Kursh summarily opines that one of skill in the art would consider
the matching of buy and sell orders in Satow to constitute technical analysis.”)
In its submission of the declaration, Bloomberg provides a list of
information considered by Dr. Kursh. (Ex. 1002, Appendix B, 45-46.) Bloomberg
also implies that that list is complete. (Opp. 6-7.)

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Given those facts, we determine that Request 3 is necessary for good cause.
Accordingly, the Board grants Markets-Alert’s motion for additional discovery as
to the production of all documents and things reviewed or considered by Dr. Kursh
in conjunction with preparation of his declaration, but only to the extent of Dr.
Kursh’s recollection. However, Markets-Alert’s instructions (Ex. 2021, 4-5,
¶¶ 16-17) do not apply to that production of documents and things. See Order
section of this decision below.
Prior Art Known to Bloomberg and Information Considered by Bloomberg
Markets-Alert requests the production of prior art known to Bloomberg that
was not submitted in the petition (Request 1), and documents and things reviewed
or considered by Bloomberg in conjunction with the preparation of the petition
(Request 2). (Mot. 2; Ex. 2021, 8.) Upon consideration of Markets-Alert’s
requested items and arguments, we determine that Markets-Alert has not met its
burden to show that the requested discovery is necessary for good cause.
In support of Requests 1-2, Markets-Alert contends that “the undisclosed
prior art would be highly probative and favorable in substantive value to Markets-
Alert.” (Mot. 4) In particular, Markets-Alert argues that the prior art known to
Bloomberg is “highly relevant to this proceeding as they inform the level of
ordinary skill and the state of the relevant art at the time of filing.” (Id.) Markets-
Alert also alleges that if the requested prior art is disclosed, it would be “able to
avoid unnecessary arguments and amendments.” (Mot. 5.) According to Markets-
Alert, the requested prior art is “unfavorable to Petitioners’ position” and therefore
it “will likely be favorable to Markets-Alert and useful in this proceeding.”
(Mot. 5-6.) Markets-Alert further asserts that the requested information is “crucial
to fully analyzing the positions advanced by Petitioners.” (Mot. 6.)

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We are not persuaded by Markets-Alert’s arguments, as they are highly
speculative and do not provide sufficient factual reason to demonstrate that
something “useful” will be uncovered (see Factor 1). As Bloomberg points out,
Markets-Alert is seeking prior art and information that are irrelevant to the
instituted grounds of unpatentability. (Opp. 3.) While those prior art and
information sought by Markets-Alert were considered by Bloomberg, they are not
relied upon to support the asserted grounds of unpatentability.
On this record, we also observe that the prior art and information sought by
Markets-Alert, at best, is merely cumulative to the prior art already submitted by
Bloomberg on the record. To the extent that the requested prior art and
information are inconsistent with Bloomberg’s position, Bloomberg already
confirmed that it has produced all information covered by 37 C.F.R.
§ 42.51(b)(1)(iii) as routine discovery. (Paper 27, 3.) Further, Bloomberg is not
required to cite cumulative prior art. Indeed, redundant grounds based on
cumulative prior art are not warranted. See Order denying redundant grounds,
Liberty Mutual Ins. Co. v. Progressive Casulty Ins. Co., CBM2012-00003, Paper 7
(PTAB, Oct. 25, 2012). Moreover, as noted by Bloomberg, reasons behind why
Bloomberg disclosed some prior art, but not others, do not present a genuine need
for the items sought, as the requests seek Bloomberg’s litigation positions and the
underlying basis for those positions (see Factor 2). (Opp. 5-6.)
In its motion, Markets-Alert does not provide any explanation as to why its
own prior art search or expert opinion could not have identified prior art or
information necessary to inform Markets-Alert on the state of the art and claim
construction (see Factor 3). Markets-Alert also fails to explain why it could not
avoid unnecessary arguments and amendments using the result of its own prior art
search or expert opinion.

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As to Markets-Alert’s argument that the requests pose no burden, Markets-
Alert’s argument is not commensurate with the scope of the requests. That
argument narrowly focuses on the information possessed by Petitioners’ counsel.
(Mot. 4 “what is likely already sitting in a computer file of Petitioners’ counsel.”)
In fact, Markets-Alert’s requests broadly cover information actually or
constructively possessed by every present and former employee and any other
persons acting or purporting to act on behalf of Bloomberg. (Ex. 2021, 4-5,
¶¶ 16-17 “These requests for production seek all information that is known to you,
your representatives, agents or investigators, and unless otherwise privileged, their
counsel, employees, representatives, agents, servants, investigators or consultants;”
and “[t]hese requests for production seek all [d]ocuments and things that are in the
actual or constructive possession, custody, or control of the responding party
and/or the responding party’s present and former employees, officers, directors,
agents, representatives, attorneys, accountants, underwriters, investigators, or other
persons acting or purporting to act on behalf of the responding party.”) Such
instructions that include numerous individuals are unduly broad and burdensome
(see Factor 5). Additionally, these broad instructions would cause unnecessary
substantial delays, as the instructions would place an obligation on Bloomberg to
identify numerous individuals and require each individual to make a diligent search
for information.
For the foregoing reasons, Markets-Alert’s motion for additional discovery
as to Requests 1 and 2 is denied.

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Items Related to Licensing and Commercial Implementation
Markets-Alert requests additional discovery for the following items:
(4) Documents and things relating to any communication, discussion,
evaluation, consideration or decision regarding licensing from
Markets-Alert or commercial implementation or adoption of any
specific embodiment of the ’357 Patent in the 2000 to 2011 time
frame; and
(5) Documents and things relating to any commercial or technical review,
analysis or decision regarding licensing or commercial
implementation or adoption of any technology similar to the invention
of the ’357 Patent in the 2000 to 2011 time frame.
(Mot. 2; Ex. 2021, 8, Requests 4-5.)
In its motion, Markets-Alert essentially contends that the items to be
discovered would be probative to its potential assertion of secondary
considerations of nonobviousness including copy by others, failure of others,
commercial success, and long-felt but unresolved need. (Mot. 8-10.) We have
considered Markets-Alert’s requests for additional discovery and arguments.
On this record, we however determine that Markets-Alert has not met its burden to
demonstrate that the requested additional discovery is necessary for good cause.
Markets-Alert’s arguments with respect to why Requests 4-5 are necessary
for good cause are highly speculative and not meaningful. Although Markets-Alert
alleges that the requested information would have potential probative value,
Markets-Alert fails to provide a specific factual reason or evidence for expecting
that the discovery will be “useful.” Markets-Alert’s contentions are merely
allegations that something useful will be found, which are insufficient to
demonstrate that the requested additional discovery is necessary for good cause
(see Factor 1). For instance, as Bloomberg points out, rather than identify any
specific licensing proposals, communications, or commercial implementations, the

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requests are directed vaguely to anything relating to a long list of hypothetical and
unspecified activities over an eleven-year time period. (Opp. 8-9.) Markets-Alert
also fails to provide any specific factual reason or credible evidence to show that
Bloomberg or anyone had tried but failed to develop a method having the claim
features of the ’357 patent.
Markets-Alert does not direct our attention to any evidence that Bloomberg
sought to license from or copied the claimed subject matter of the ’357 Patent.
Even if there is a licensing agreement involving the ’357 patent, Markets-Alert
fails to provide adequate explanation or evidence to establish nexus between the
merits of the invention and such a licensing agreement. Without a showing of
nexus, the mere existence of licenses is insufficient to overcome the conclusion of
obviousness. Iron Grip Barbell Co. v. USA Sports, Inc., 392 F.3d 1317, 1324 (Fed.
Cir. 2004); SIBIA Neurosciences, Inc. v. Cadus Pharm. Corp., 225 F.3d 1349,
1358 (Fed. Cir. 2000).
With respect to Markets-Alert’s potential assertion of long-felt but
unresolved need as secondary consideration of nonobviousness, Markets-Alert fails
to explain why it could not rely on its own analysis of the state of the art or the
opinions of independent analysts without a discovery request (see Factor 3).
As discussed previously, Markets-Alert’s instructions set forth in its request
for additional discovery (Ex. 2021, 4-5) are overly broad, which would require
numerous individuals to search and produce the requested information. Those
instructions would place an undue burden and cause unnecessary substantial delays
(Factor 5).
For the foregoing reasons, Markets-Alert’s motion for additional discovery
as to Requests 4 and 5 is denied.

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ORDER
In consideration of the foregoing, it is hereby:
ORDERED that Markets-Alert’s motion for additional discovery is granted
as to the request for production of all documents and things reviewed or considered
by Steven R. Kursh in conjunction with the preparation of his declaration, but only
to the extent of Dr. Kursh’s recollection; and Markets-Alert’s instructions
(Ex. 2021, 4-5) shall not apply to that production of documents and things;
FURTHER ORDERED that, unless previously served, Bloomberg must
serve Markets-Alert, by June 4, 2013, a copy of all documents and things reviewed
or considered by Dr. Kursh in conjunction with the preparation of his declaration
(Ex. 1002), to the extent of Dr. Kursh’s recollection; and
FURTHER ORDERED that Markets-Alert’s motion for additional
discovery is denied as to all other requests for additional discovery (Requests 1-2
and 4-5).
PETITIONER:
Michael T. Rosato
Brian D. Range
Wilson Sonsini Goodrich & Rosati
Email: mrosato@wsgr.com
Email: brange@wsgr.com
PATENT OWNER:
Andrew Choung
Glaser Weil Fink Jacobs Howard Avchen & Shapiro, LLP
Email: achoung@glaserweil.com
William Fitzpatrick
F. Robbe International
Email: bill@frobbeintl.com