Paper 23 Tel: Entered: June 18, 2015 UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD

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1 Paper 23 Tel: Entered: June 18, 2015 UNITED STATES PATENT AND TRADEMARK OFFICE BEFORE THE PATENT TRIAL AND APPEAL BOARD SMART MODULAR TECHNOLOGIES INC., Petitioner, v. NETLIST, INC., Patent Owner. Case IPR (Patent 8,001,434 B1) Case 1 Before LINDA M. GAUDETTE, BRYAN F. MOORE, MATTHEW R. CLEMENTS, PETER P. CHEN, Administrative Patent Judges. MOORE, Administrative Patent Judge. ORDER Conduct of the Proceedings 37 C.F.R This order addresses issues that are the same in all identified cases. We exercise our discretion to issue one order to be filed in each case. The parties, however, are not authorized to use this style heading in subsequent papers.

2 A conference call in the above proceedings was held on June 2, Counsel for Petitioner and Patent Owner participated in the call with Judges Gaudette, Moore, Clements, and Chen. The purpose of the call was to discuss a request by Patent Owner to file a motion for additional discovery regarding real parties-in-interest ( RPIs ). On a previous call, held on May 7, 2015, Petitioner stated that it wished to add parties related to Smart Modular Technologies, Inc. ( Smart Modular ) in the corporate structure as RPIs. Petitioner stated that it wished to add these entities because of a recent Board decision denying institution of inter partes review, Galderma S.A. v. Allergan Industrie, SAS, Case IPR (PTAB March 5, 2015) (Paper 14) (Galderma), which Petitioner reads as standing for the proposition that entities with common directors and which are wholly owned subsidiaries are to be considered RPIs. Petitioner stated, while it disagreed with the holding in Galderma, it wished to add the entities as RPIs out of an abundance of caution. In an order dated May 26, 2015, Petitioner s request for authorization to file a motion to amend the Petitions to name additional RPIs was denied. Paper In that order, we also noted Patent Owner had not made a specific request for discovery or for authorization to file a motion for additional discovery. Id. Patent Owner now makes that request. In the call held June 2, 2015, Patent Owner asserted its belief that Smart Storage Systems a company formerly related to Petitioner that was sold to SanDisk Corporation ( SanDisk ) prior to the filing of the present inter partes reviews (IPRs) was one of the companies Petitioner contemplated adding as an RPI. Petitioner denied that this is the case. 2 Citations are to IPR unless otherwise noted. 2

3 Patent Owner noted that Smart Modular, Smart Worldwide (believed to be a parent of Smart Modular), SanDisk, and Diablo Technologies ( Diablo, petitioner in several IPRs involving the same patents as the present IPRs) were involved in a patent infringement lawsuit in district court. Petitioner notes that this litigation began after the sale of Smart Storage Systems to SanDisk. Smart Modular and Smart Worldwide were dismissed from that lawsuit based on their representation that they were not selling the accused products. Patent Owner believes that Smart Modular has no interest whatsoever in the present IPRs and acts only as a strawman filing petitions for SanDisk (Smart Storage). Based on these beliefs, Patent Owner requested that Petitioner answers interrogatories regarding, inter alia, (1) the identity of the alleged RPIs, common officers/directors, and their duties; (2) possible interests Smart Modular has in the case; (3) shared office space, communications with other petitioners, (4) control of and payment for these IPRs; and (5) issues of privity relating to an agreement by which Smart Storage was sold by Smart Worldwide to SanDisk including, specifically, whether such agreement included a holdback or other contract provisions that gives Smart Modular an interest in the outcome of these IPRs. Petitioner notes that the facts surrounding the sale of Smart Storage were known to Patent Owner at the time it filed its preliminary response. Additionally, Petitioner agreed to answer Patent Owner s interrogatories directed to the entities that Petitioner requested be added as RPIs (not Smart Storage). We give due consideration to the analysis discussed in Garmin Int l, Inc. et. al. v. Cuozzo Speed Tech, LLS, IPR , slip op. 6 7 (PTAB 3

4 Mar. 5, 2013) (Paper 26) (informative) (hereinafter Garmin ), to guide our determination whether a discovery request meets the statutory and regulatory necessary in the interests of justice standard. The Garmin panel found that [t]he party requesting discovery should already be in possession of evidence tending to show beyond speculation that in fact something useful will be uncovered. Garmin at 6. In this case, we find that the companies that Petitioner requested authorization to add as RPIs are relevant subjects of discovery. However, the facts surrounding the Smart Storage entity and its relationship to SanDisk have been known to Patent Owner for at least six months (prior to its filing of its preliminary response). We find that the recent request by Petitioner to add RPIs did not change anything with regard to the facts surrounding Smart Storage or the likelihood that Smart Storage, SanDisk, or Diablo are RPIs. Additionally, we find that the allegation that Smart Modular acted as a strawman for SanDisk or Diablo is purely speculative. Therefore, at this stage in the case, we deny the request to file a motion for additional discovery related to SanDisk and Smart Storage. See Sony Computer Entertainment America LLC v. Game Controller Technology LLC, Case IPR , slip op. at 5 (PTAB April 2, 2015) (Paper 31). As to the discovery related to shared office space, we do not find this request is likely to result in something useful. 3 Therefore, we find that the discovery Petitioner has agreed to provide regarding the companies it attempted to add as RPIs is sufficient. 3 Useful means favorable in substantive value to a contention of the party moving for discovery. IPR (Paper 26 at 7-8). 4

5 CONCLUSION For the foregoing reasons, Patent Owner has not shown that the additional discovery requested would be necessary in the interests of justice. Therefore, Patent Owner s request for authorization to file a Motion for Additional Discovery is denied. It is ORDER ORDERED that Patent Owner s request for authorization to file a Motion for Additional Discovery is denied. 5

6 For PETITIONER: Sanjiva Reddy Michael Heafey KING & SPALDING LLP PATENT OWNER: Thomas Wimbiscus Scott McBride Wayne Bradley Gregory Schodde MCANDREWS, HELD & MALLOY, LTD. 6