Microsoft Corp. v. Proxyconn, Inc.

IPR2012-00026 (TLG); IPR2013-00109 (TLG) (Patent 6,757,717 B1)

[Motion for additional discovery in an IPR relating to commercial success must demonstrate sufficient nexus between the alleged commercial success and movant’s invention]

FACTS

Patent Owner Proxyconn moved for additional discovery relating to the alleged commercial success of its invention in order to demonstrate its nonobviousness. Specifically, it sought marketing materials, pricing, specifications, and sales figures for Microsoft’s product that contained the allegedly infringing feature.  Microsoft opposed the motion claiming that its product did not contain the allegedly infringing feature and that there was no sufficient nexus between the claimed invention and the alleged commercial success.

HOLDING

The Board denied Patent Owner’s motion for additional discovery. The Board noted that Congressional objective in creating the new IPR proceedings was to provide a quick and cost-effective alternative to federal court litigation. To further this objective, discovery in the proceedings is limited. In seeking additional discovery relating to secondary evidence of nonobviousness, such as evidence of commercial success, the movant has the burden to show sufficient nexus between the claimed invention and the alleged commercial success. While conclusive showing is not necessary at a motion stage, some showing of relevance is required. The Board found that Patent Owner did not meet this burden. The Board noted that Patent Owner’s discovery requests were directed to information that was at least partly publicly available and were not narrowly tailored. Further, the Board found that Patent Owner did not show sufficient relevance of the sales figures for the product allegedly containing the infringing feature and commercial success of Patent Owner’s invention. The Board noted that the product contained thousands of features and that a showing that the allegedly infringing feature drove the sales of the product would be required to demonstrate commercial success of Patent Owner’s invention.

TAKEAWAY

Discovery in IPR is limited. In seeking additional discovery relating to the secondary evidence of nonobviousness, such as commercial success, the burden is on the movant to show sufficient nexus between commercial success of the product and movant’s invention. Discovery requests must be limited and narrowly tailored.

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