Intellectual Concepts, LLC v. Zannier, Inc.

BoxInterferences@uspto.gov 	Paper 66	1
Telephone: 571-272-4683 	Entered: 19 September 2008	2
3
UNITED STATES PATENT AND TRADEMARK OFFICE	4
BOARD OF PATENT APPEALS AND INTERFERENCES	5
____________________	6
7
Patent Interference 105,617 McK	8
Technology Center 1700	9
____________________	10
11
INTELLECTUAL CONCEPTS, LLC,	12
(Inventor: Gregory James Caton)	13
14
Application 10/782,405,	15
Junior Party,	16
17
v.	18
19
ZANNIER, INC.,	20
(Inventor: Paul D. Manos)	21
22
Patent 7,264,847 B2,	23
Senior Party,	24
____________________	25
26
Before: FRED E. McKELVEY, Senior Administrative Patent Judge, and	27
RICHARD E. SCHAFER and JAMES T. MOORE, Administrative Patent	28
Judges.	29
30
McKELVEY, Senior Administrative Patent Judge	31
MEMORANDUM OPINION and ORDER	32
Decision denying Intellectual Concepts Motion 7	33
34
A. Background	35
Intellectual Concepts Miscellaneous Motion 7 (Paper 62) seeks a	36
ruling in limine on the admissibility of (1) prior testimony of Gregory James	37

2
Caton given in a civil action in a state court in Louisiana and (2) a Caton	1
affidavit (Ex 2086) submitted in connection with Intellectual Concepts, LLC	2
Motion for Judgment 2 (Paper 59).	3
Intellectual Concepts was not authorized to file a motion seeking a	4
ruling in limine on the admissibility of prior testimony of Gregory James	5
Caton given in a civil action in a state court in Louisiana. A single judge has	6
dismissed Intellectual Concepts Motion 7 as to the prior testimony.	7
Paper 63.	8
The first issue before us is whether the Caton affidavit (Ex 2086) is	9
admissible without cross-examination in the United States. A second issue	10
is whether cross-examination of Caton should be authorized to take place in	11
Ecuador.	12
B. Intellectual Concepts statement of facts	13
Intellectual Concepts Motion 7 is accompanied by a Statement of	14
Material Facts. See Paper 62, page 11 (Appendix 2). The Statement of	15
Facts is as follows:	16
1. Mr. Caton believes that he has a well-founded fear of arrest	17
upon returning to the United States.	18
2. Mr. Caton believes that he has a medical problem that makes	19
it inadvisable for him to travel in an airplane at 30,000 ft an[d] that he	20
would, therefore, have a likelihood of being subjected to physical harm if he	21
were to travel to the United States. Ex 2103 and Ex 2104.	22
3. Mr. Caton's statements are supported by the Affidavit of	23
Kenneth Michael Wright. Ex 2015.	24
4. Intellectual Concepts has secured a statement as to the laws	25
concernign [sic-concerning] false testimony and perjury in Ecuador.	26
Ex. 2106.	27

3
5. Intellectual Concepts has made two proposals for the taking	1
of cross examination testimony of Mr. Caton in Ecuador. Ex 2106.	2
The statement of facts is an invitation to the Board to search the	3
exhibits and determine the real facts. We caution Intellectual Concepts that	4
the statement of facts is a significant part of a motion because (1) it permits	5
an opponent to admit or deny each fact and (2) it tells the Board what a	6
party's "story" is in connection with a motion. The statement of facts also	7
provides a convenient format for an opponent to admit or deny facts. Any	8
future motion by Intellectual Concepts which fails to set out a statement of	9
facts, which if believed, would not make out a prima facie case may result in	10
denial of the motion.	11
C. Findings of fact	12
Gregory James Caton resides in Ecuador.	13
A Caton declaration is relied upon by Intellectual Concepts in	14
connection with its Motion 2.	15
Motion 2 alleges that Caton is the sole inventor of the subject matter	16
of the count—meaning that Caton conceived the invention without any input	17
from Paul D. Manos.	18
In filing the declaration, Caton states that he will not come to the	19
United States for cross-examination.	20
According to Intellectual Concepts, there are two reasons why	21
Gregory James Caton will not appear in the United States for cross-	22
examination:	23
(1) Caton says that if he comes to the United States he will be	24
arrested and	25
(2) Caton says he suffers from a medical condition which is	26
said to preclude his flying in airplanes above 30,000 feet.	27

4
"Affidavit" of Gregory James Caton	1
In support of its motion, Intellectual Concepts relies on an "affidavit"	2
of Gregory James Caton. Ex 2104.	3
Caton currently resides in Guayaquil, Ecuador. Ex 2104, page 2:5-6	4
and page 3:12-13.	5
Guayaquil, Ecuador is located essentially at sea level.	6
Caton’s "apprehension of arrest" if he returns to the United States is	7
said to "make it impossible for me to return to the United States." Ex 2104,	8
page 3:14-15.	9
Why would Caton be apprehensive of being arrested if he came to the	10
United States for cross-examination?	11
While Intellectual Concepts has "sort of" told us about Caton's	12
criminal history, at no point does Intellectual Concept Motion 7 give a	13
sufficient and clear statement of that criminal history.	14
Accordingly, we have obtained a copy of a Department of Justice	15
News Release dated 24 August 2004. The news release is reproduced	16
below:	17
Gregory Caton Sentenced for	18
Selling Unapproved New Drugs	19
Department of Justice News Release	20
August 24, 2004	21
22
GREGORY JAMES CATON, age 48, from Lake Charles,	23
Louisiana, was sentenced today to 33 months imprisonment to	24
be followed by 3 years supervised release by United States	25
District Judge Tucker Melançon [of the Western District of	26
Louisiana], announced United States Attorney Donald W.	27
Washington. CATON pled guilty to a Bill of Information in	28
May 2004, charging him with (1) one count of devising a	29
scheme and artifice to defraud numerous victims and utilizing a	30

5
commercial interstate carrier to carry out the scheme and	1
artifice to defraud; (2) one count of introduction of unapproved	2
new drugs (Cansema Tonic III and H3O) into interstate	3
commerce; and (3) forfeiture of assets. By pleading guilty to	4
count three, CATON agreed to forfeit any property acquired as	5
the result of his criminal violations.	6
From 1999 to 2003, CATON and his employees utilized an	7
internet site named Alpha Omega Labs to take direct orders for	8
unapproved new drugs represented to have some medicinal	9
qualities. The chemical substances were not approved for sale	10
by the U.S. Food and Drug Administration. In order to legally	11
market a drug in interstate commerce, the drug’s manufacturer	12
is required to comply with all applicable provisions of the	13
Federal Food, Drug, and Cosmetic Act in order to ensure that	14
the products sold are safe for humans and effective for their	15
intended uses. By taking orders for these unapproved new	16
drugs and causing them to be delivered by interstate	17
commercial carriers, CATON was introducing unapproved new	18
drugs into interstate commerce.	19
As a result of the scheme, CATON received approximately	20
$950,000. On at least two occasions known to the United	21
States, the items shipped by the defendant and utilized by	22
victims resulted in bodily injury and harm to the victim.	23
CATON shipped Cansema Tonic III and H3O via interstate	24
commerce. Cansema Tonic III was intended for use in the cure,	25
mitigation, treatment, or prevention of cancer. H3O was	26
intended for use in the cure, mitigation, treatment, or prevention	27
of athlete’s foot, cuts and burns, eczema, fingernail fungus,	28
chronic gas, gastroenteritis, gingivitis and periodontal disease,	29
halitosis, herpes sores, ophthalmia, psoriasis, sore throat, strep	30
throat, and wounds. Neither drug was recognized as safe and	31
effective by qualified experts for their intended uses and	32
CATON had no approved marketing or investigational	33
applications for the drugs on file.	34
In order to facilitate the scheme, CATON and/or his wife	35
purchased buildings at two locations and a residence in Lake	36
Charles, Louisiana. The properties were purchased and/or paid	37

6
for with funds derived from the scheme and are subject to	1
forfeiture pursuant to law.	2
Alpha Omega Labs was operated from the offices of Lumen	3
Food Corporation located in Lake Charles, Louisiana.	4
Sentencing in federal court is governed by the United States	5
Sentencing Guidelines established by the United States	6
Congress and the United States Sentencing Commission.	7
Under U.S. Sentencing Guidelines, actual sentences are based	8
upon a formula that takes into account the severity and	9
characteristics of the offense, and a defendant’s criminal	10
history, if any. Parole has been abolished in the federal system.	11
The investigation was conducted by the U.S. Food and Drug	12
Administration, Office of Criminal Investigations, New Orleans	13
Resident Office and was prosecuted by Assistant United States	14
Attorney Larry J. Regan.	15
For further information, please contact United States Attorney	16
Donald W. Washington at 337-262-6618 or First Assistant U.S.	17
Attorney Bill Flanagan at 318-676-3600.	18
We have considered the news release only to the extent that it reports	19
the views of the Department of Justice in connection with Caton's criminal	20
activity.	21
Caton was found guilty and sentenced in the Western District of	22
Louisiana.	23
Caton, apparently not satisfied with his sentence, took an appeal to the	24
U.S. Court of Appeals for the Fifth Circuit. According to the Fifth Circuit,	25
Caton was convicted of mail fraud and introduction of unapproved new	26
drugs into interstate commerce. United States v. Caton, 201 Fed. Appx. 213,	27
214 (5th Cir. Sept. 25, 2006). The Fifth Circuit declined to set aside Caton's	28
sentence. A petition for certiorari was denied. Caton v. United States,	29
127 S. Ct. 1386 (Feb. 26, 2007).	30

7
Presumably after serving the 33 month sentence (minus any "good	1
behavior" time credited to Caton), on 5 June 2006 Caton began serving "a	2
three year period of supervised release …" Ex 2104, page 3:17.	3
Based on the record, we take it that Caton moved to Ecuador after his	4
release from incarceration.	5
We gather from the Caton "affidavit" that Caton was required from	6
time to time to return to the United Sates as a condition of his "supervised	7
release."	8
Caton attempted to convince the Western District of Louisiana for a	9
"suspension" of supervised release, apparently so he could permanently	10
relocate to Ecuador. Ex 2104, page 4:1-2.	11
According to Caton, the Western District of Louisiana set a hearing	12
date of 25 October 2007 to take up the request for "suspension." Ex 2104,	13
page 4:6-7.	14
But about that time, a medical problem said to have first come to light	15
"around April, 2004" "began to remanifest itself." Ex 2104, page 4:8-9.	16
Apart from Caton's self-serving statement, there is no independent	17
corroboration of any April 2004 medical problem.	18
According to Caton, however, in 2004 (on some unspecified date) he	19
was admitted to the hospital (not identified) because he was complaining (to	20
whom is not identified) of sharp pains in the right side in the area of the liver	21
and right kidney. Ex 2014, page 4, 9-11.	22
In October of 2007, about the time of the hearing date in the Western	23
District of Louisiana, Caton tells us that his current physician (identified as	24
Dr. Carlos Julio Tobar, M.D.) is said to have identified Caton's condition as	25
"chronic kidney infection, or nephritis." Ex 2104, page 4:12-13.	26

8
Caton says that Dr. Tobar recommended that Caton not fly in	1
airplanes above 30,000 feet. Ex 2014, page 4:18-19.	2
Caton further tells us that because he could not fly to the United States	3
he could not attend the 27 October 2007 hearing in the Western District of	4
Louisiana.	5
As a result, Caton was in violation of the conditions of his release.	6
Ex 2104, page 5:3-6.	7
"Report" of Dr. W. Omar Garcia F."	8
Intellectual Concepts relies on a "report" of Dr. W. Omar Garcia F.	9
Ex 2103.	10
Spanish words can have an accent mark. In the case of Garcia, the	11
accent is on the "i" or García. In the case of medico, mentioned later in this	12
opinion, it is on the "e" or médico. In this opinion we omit accent marks.	13
The report is not in the form of a declaration and has not otherwise	14
been authenticated.	15
Included in the "report" is a Spanish language "Reporte Medico."	16
Also included in the "report" is an unverified translation of the	17
"Reporte Medico." See "Medical Report."	18
According to the Medical Report [bracketed matter added]:	19
In sight of the tests [sic—in view of the urinalysis]	20
results I conclude that Mr. Gregory James Caton is suffering	21
from a nephritic syndrome that at the moment is causing a renal	22
insufficiency with several days of evolution. Therefore, the	23
patient should be [given drugs and be] under specialized	24
medical care for a period of at least two weeks, for the	25
monitoring of the drugs' doses and of the evolution of said renal	26
insufficiency.	27

9
The Reporte Medico and the Medical Report are dated 15 October	1
2007.	2
Also included in the exhibit is an "Examen de Orina." No translation	3
of the Examen de Orina appears in the record. One member of the panel is	4
fluent in Spanish. However, business in the USPTO in conducted in	5
English. 37 C.F.R. § 41.154(b). Moreover, our decisions are made on the	6
English language record. Cf. Fromson v. Anitec Printing Plates, Inc., 132	7
F.3d 1437, 1448 (Fed. Cir. 1997) (C.J. Mayer, concurring). Other members	8
of the panel, the opponent and reviewing court judges may or may not be	9
fluent in other languages, including Spanish.	10
We understand "orina" to mean urine. Collins Spanish English	11
English Spanish Dictionary, ISBN 0-00-470295-6, page 519 (3d ed. 1993).	12
"Examen de Orina" means "Urinalysis Report."	13
With respect to "proteinas" (proteins), the Examen de Orina indicates	14
"Negativo" (negative). With respect to blood content (sangre), the Examen	15
de Orina reports 250 eri/uL, although we are not told what "eri/uL" means.	16
"Affidavit" of Kenneth Michael Wright	17
Intellectual Concepts relies on an "affidavit" of Kenneth Michael	18
Wright. Ex 2105.	19
The "affidavit" is dated 5 September 2008.	20
Wright tells us that he was been asked to explain what he has learned	21
about Caton. Ex 2105, page 3/6. The "affidavit" does not have page or line	22
numbers. We refer to the "fax" page numbers at the top of pages of the	23
exhibit.	24
According to Wright, Caton began commuting to Ecuador after his	25
"release to probation in 2006." Ex 2015, page 4/6.	26

10
Further according to Wright, Caton "engaged counsel to file to have	1
the remainder of his probation … terminated." Ex 2015, page 4/6.	2
At some point Caton called Wright (presumably from Ecuador) to	3
advise Wright that a doctor had advised Caton not to fly. Ex 2015, page 5/6.	4
Wright is said to have told Caton that Caton technically was in	5
violation of his probation. Ex 2105, page 5/6.	6
According to Wright, Caton told Wright that "he could not afford to	7
be arrested, since he had sold all his businesses and property here	8
[presumably Louisiana] and had completely moved to Ecuador, and	9
established a business there." Ex 2105, page 5/6.	10
"Affidavit" of Xavier Rosales-Kuri, J.D.	11
Intellectual Concepts relies on an "affidavit" of Xavier Rosales-Kuri.	12
Ex 2106.	13
Rosales-Kuri is an attorney in Ecuador. Ex 2106, page 2:1-4.	14
Rosales-Kuri asserts that false testimony and perjury are punishable	15
under the laws of Ecuador. Ex 2106, page 2:9-10.	16
Rosales-Kuri has provided an unverified translation of what he says	17
are two articles of the criminal code of Ecuador (Ex 2106, page 2:12 through	18
page 3:3):	19
Art. 354.- False testimony will be punishable if the	20
informant being either an authority or any private individual,	21
has declared, confessed or informed to any government	22
authority, in an untruthful manner; and perjury when made	23
under oath.	24
The above mentioned will apply except in case of	25
confession or signed declaration of the accused party in a	26

11
criminal trial, as well as with reports from authorities when	1
such may bring criminal responsibility thereto.	2
Art. 355.- False testimony will be punished with one to	3
three years of prison; and perjury, with medium-term	4
imprisonment of three to six years.	5
Rosales-Kuri goes on to say that "for these provision to take effect," a	6
procedure is available whereby upon a "U.S. Judge's order" and a lot of other	7
rigmarole a deposition might be taken before a "court clerk." "Conditions	8
such as these" would "trigger the false testimony and perjury provisions” of	9
Arts. 354 and 355 of the criminal code of Ecuador.	10
Original Spanish language versions of Arts. 354 and 355 have not	11
been supplied. Accordingly, there is no way for Zannier to verify the	12
accuracy of the translation of those two articles. Moreover, based on the	13
unverified translation we have been given, it is not altogether clear what	14
behavior is "unlawful."	15
Rosales-Kuri proffers a second alternative.	16
According to Rosales-Kuri, a videotaped deposition can be conducted	17
and the transcript can be signed by a "notary who is judicially appointed."	18
The notary apparently “would serve only to verify the identity of the person	19
signing the [deposition?] transcript." Ex 2106, page 3:11-15.	20
D. Analysis	21
Admissibility of the evidence	22
The evidence presented is insufficient to justify granting any relief.	23
Most of the evidence is not admissible even without an objection from	24
an opponent.	25
Without sufficient evidence to support its case, the case for granting	26
relief to Intellectual Concepts evaporates.	27

12
1. The Caton "affidavit"	1
The Caton "affidavit" is not admissible because it does not contain a	2
statement that Caton will make himself available in the United States for	3
cross-examination. Paper 1, pages 10-11; STANDING ORDER, ¶ 157.2	4
(Paper 2, page 52).	5
We surmise that Caton's response to an objection to admissibility	6
would be that the whole point is that Caton "cannot" come back to the	7
United States. Accepting for the moment an allegation that Caton "cannot"	8
come back to the United States, we are not at all confident that a prosecution	9
for perjury would, or could, take place in Ecuador. We have not been	10
favored with Spanish language versions of the criminal code of Ecuador or a	11
verified translation of the relevant articles of the criminal code of Ecuador.	12
Intellectual Concepts has failed to establish as a matter of fact that an	13
extradition treaty exists between Ecuador and the United States with respect	14
to perjury for testimony given in Ecuador to be used in an administrative (as	15
opposed to judicial) proceeding in the United States. Likewise, Intellectual	16
Concepts has failed to convince us that a violation of 18 U.S.C. § 1001 is a	17
matter for which Ecuador would extradite a resident of Ecuador to the	18
United States for criminal prosecution.	19
2. The Medical Report	20
The Medical Report is not admissible because Intellectual Concepts	21
has not established that it is authentic. Moreover, the information contained	22
in the Medical Report is hearsay.	23
3. The Rosales-Kuri "affidavit"	24
The Rosales-Kuri "affidavit" is not admissible because it does not	25
contain a statement that Rosales-Kuri will appear in the United States for	26
cross-examination. 	Paper 1, pages 10-11.	27

13
In addition, to the extent it purports to translate the criminal code of	1
Ecuador, it was not accompanied by Spanish language versions of that code	2
or a verified translation into English of the code. As noted earlier, failure to	3
provide a Spanish language version of the code complicates any attempt by	4
Zannier to independently verify the accuracy of the Rosales-Kuri translation.	5
4. The Wright "affidavit"	6
There are statements in the Wright "affidavit" which purport to "pass	7
on" what Caton told Wright. To the extent that Intellectual Concepts relies	8
on hearsay statements by Caton to Wright to establish the truth of those	9
statements, the Wright "affidavit" is hearsay.	10
The merits	11
Assuming the evidence is admissible, Intellectual Concepts has failed	12
to make out a case for relief.	13
1. Fear of arrest	14
Caton says he cannot come back to the United States for cross-	15
examination because he might be arrested. A short answer is "so what?"	16
Caton was convicted of criminal activity in the United States. He was	17
sentenced to 33 months in prison. We do not know whether the 33 months	18
was shorted based on "good behavior." After release, Caton was on	19
supervised release. Based on our understanding of the record, Caton is in	20
"violation" of the terms of his supervised release. We will assume, without	21
deciding, that a person violating the terms of supervised release is subject to	22
arrest.	23
The interference involves a "civil matter." Intellectual Concepts, the	24
junior party, seeks relief in this interference. As junior party, it has the	25
burden of proof. If Intellectual Concepts needs Caton's testimony to make	26
out its case, then it must obtain that testimony in the manner required by the	27

14
rules. The rules require cross-examination in the United States. It is true	1
that testimony may be authorized in a foreign country. Cf. Bronshtein v.	2
Roser, 61 USPQ2d 1742 (Bd. Pat. App. & Int. 2001) (involving testimony in	3
England). In this case, where Intellectual Concepts has utterly failed to	4
establish that perjury in Ecuador is (1) is a crime when the testimony is	5
given for use in a United States Executive Branch administrative tribunal	6
and (2) would be an extraditable offense to the United States, we decline to	7
exercise our discretion to authorize testimony in Ecuador.	8
The fact that Caton might be arrested upon return to the United States	9
is a side show. If the testimony is needed and Caton has a sufficient interest	10
in this civil matter, then he needs to come to the United States to testify.	11
Caton's choice to avoid arrest to forego testifying in a "civil matter" is a	12
choice he is free to make. If Intellectual Concepts cannot "force" Caton to	13
come to the United States, then it will have to make out its case without	14
Caton's testimony.	15
2. Medical condition	16
We decline, even if admissible, to give much, if any, weight to the	17
"medical condition" "evidence."	18
If the Medical Report is to be believed, then we note that it is dated	19
15 October 2007. That is eleven months ago. There is no evidence that the	20
medical condition identified in the October 2007 Medical Report has not	21
been cured or how long it normally takes to cure the condition. The Medical	22
Report does not identify precise nature of the "nephritic syndrome." Nor are	23
we told how a diagnosis of "nephritic syndrome" is consistent with a	24
"negative" "protein analysis." Likewise, we are not told the significance of a	25
250 eri/uL blood in a urine sample (nor are we told what "eri/uL" means).	26

15
What we do learn from the Medical Report, is that Caton needed to be	1
under "specialized medical care" for two weeks—starting presumably on	2
15 October 2007. The two weeks have come and gone. There is no credible	3
evidence in the Medical Report that would corroborate Caton's allegation	4
that he is not to fly in airplanes above 30,000 feet. Certainly Dr. Garcia does	5
not say so in the Medical Report.	6
We characterize the "story" we have been told by Intellectual	7
Concepts as somewhat "fishy." We do not believe the story. In any event,	8
we decline to credit the story thereby dooming Intellectual Concepts'	9
medical condition argument. We cannot find that Caton currently is unable	10
to travel due to a medical condition. Nor, has Intellectual Concepts	11
indicated why Caton could not fly below 30,000 feet or whether Caton can	12
fly above 30,000 for short periods of time (Ecuador to Panama City; Panama	13
City to Guatemala City; and Guatemala City to Miami).	14
This case stands in stark contrast to that involving Dr. Lee in	15
Bronshtein v. Roser, 61 USPQ2d 1742 (Bd. Pat. App. & Int. 2001), where	16
convincing evidence of a medical condition was presented to the Board and	17
where the opponent consented to cross-examination in England. The	18
difference in the evidence we were given in Bronshtein and the "evidence"	19
we were given in this case shows why an exercise of discretion sometimes	20
results in a "yes" and other times results in a "no."	21
E. Order	22
Upon consideration of Intellectual Concepts Motion 7, and for the	23
reasons given, it is	24
ORDERED that the motion is denied, unless (1) within one (1)	25
week of the date of this Memorandum Opinion and Order, Intellectual	26
Concepts files a paper with the Board indicating that Caton will appear in	27

16
the United States for cross-examination and (2) Caton timely appears in the	1
United States for cross-examination.	2

17
105,617	1
cc (via electronic mail):	2
3
Attorney for Caton	4
(real party in interest Intellectual Concepts, LLC):	5
6
Holliday C. Heine, Esq.	7
Thomas O. Hoover, Esq.	8
WEINGARTEN, SCHURGIN, GAGNEBIN & LEBOVICI LLP	9
Ten Post Office Square	10
Boston, MA 02109	11
12
Tel: 	617-542-2290, ext. 313	13
Tel: 	617-542-2290, ext. 323	14
Fax: 	617-451-0313	15
Email: 	HHeine@wsglip.com	16
Email: 	THoover@wsglip.com	17
18
Attorney for Manos	19
(real party in interest Zannier, Inc.):	20
21
Ryan Cagle, Esq.	22
Murray Spruill, Esq.	23
ALSTON & BIRD LLP	24
3201 Beechleaf Court	25
Suite 600	26
Raleigh, NC 27604-1062	27
28
Tel: 	919-862-2200	29
Fax: 	919-862-2260	30
Email: 	ryan.cagle@alston.com	31
Email: 	murray.spruill@alston.com	32