[00:00:04] Speaker 01: The United States Court of Appeals for the Federal Circuit is now open and in session. [00:00:10] Speaker 01: I say the United States in the honorable court. [00:00:13] Speaker 01: Be seated. [00:00:16] Speaker 01: Good morning. [00:00:17] Speaker 01: The argued case this morning is number 14. [00:00:21] Speaker 01: That's 1627. [00:00:25] Speaker 01: Fairland LLC against LKQ Corporation. [00:00:29] Speaker 01: Mr. Cutler. [00:00:34] Speaker 00: Good morning, Your Honors, may it please the court. [00:00:36] Speaker 00: We have an issue today, two types of issues to address in this appeal. [00:00:41] Speaker 00: The first types of issues are garden variety patent issues, claim construction, obviousness, things of that nature. [00:00:48] Speaker 00: We'll get to that as well. [00:00:49] Speaker 00: There's also a procedural type issue that relates specifically to the inter-parte review proceedings that are, as you know, brand new to the patent world. [00:00:57] Speaker 00: Specifically relating to the regulations and statutes that govern inter-parte review. [00:01:02] Speaker 00: I'm going to begin my argument with this procedural aspect. [00:01:04] Speaker 00: And it's summarized well by an intervener at page 14 of their brief in a headnote that says, the board acted properly by considering evidence and argument beyond those presented in the petition for review. [00:01:18] Speaker 00: Not only did the board consider that type of evidence, it solely relied upon that type of evidence in certain key respects with respect to certain elements of the 364 patented issue. [00:01:29] Speaker 01: Are you distinguishing between the propriety of evidence or [00:01:34] Speaker 01: as opposed to argument, because they might be treated differently? [00:01:38] Speaker 00: Well, no, I think evidence is what needs to be in the petition. [00:01:41] Speaker 00: Argument is going to be a tighter case to call, and I think you'd have to look at it case by case basis. [00:01:48] Speaker 00: I think there's some instances where evidence, I'm sorry, argument was also either raised in a reply brief to fill a hole in the prima facie case of obviousness in the petition, [00:02:02] Speaker 00: and also relied on Susponte by the board in the final written decision. [00:02:07] Speaker 03: So your argument is that all the evidence has to be in the petition? [00:02:10] Speaker 03: That's right. [00:02:11] Speaker 03: That's right. [00:02:12] Speaker 03: So what if some evidence is produced in discovery in the course of the proceeding? [00:02:17] Speaker 03: They can't rely on that? [00:02:18] Speaker 03: Well, Your Honor, discovery in... Well, now what's the answer to the question? [00:02:21] Speaker 03: No, they can't rely on that. [00:02:22] Speaker 03: They cannot? [00:02:23] Speaker 00: No. [00:02:24] Speaker 00: Discovery in the Interparte review is not like discovery in federal district court where [00:02:29] Speaker 00: where we can fill holes in a notice-pleading complaint. [00:02:33] Speaker 00: In an inter-part-day review section, 35 U.S.C. [00:02:35] Speaker 03: section 312A3 requires... What's the point of allowing discovery just to benefit the patentee? [00:02:43] Speaker 00: No, there's three types of discovery, Ron, in an inter-part-day review. [00:02:47] Speaker 00: First is compelled discovery. [00:02:48] Speaker 00: That has never been granted to date. [00:02:50] Speaker 00: You know, if you need to take a subpoena of a third party, things of that nature, the board hasn't allowed that to date. [00:02:55] Speaker 00: The second type is additional discovery. [00:02:58] Speaker 00: There have been limited examples where additional discovery has been granted to allow a couple of documents here to prove real party interest or a couple of documents there. [00:03:05] Speaker 00: The Garmin case sets a very hard, very high burden to get additional discovery in inter-party review. [00:03:11] Speaker 00: The main type of discovery in inter-party review is what's called routine discovery. [00:03:17] Speaker 00: There's three things. [00:03:18] Speaker 00: There's the evidence that's attached to the petition. [00:03:22] Speaker 00: Obviously, in inter-party review, most of the documents are part of the [00:03:26] Speaker 00: of the petition and are filed with the petition. [00:03:28] Speaker 00: I think these discovery rules in terms of what may be relied upon in the petition is forecasting the post-grant review where uses and sales can be used. [00:03:37] Speaker 00: There might be the need to produce other evidence like deposition testimony of witnesses and things of that nature. [00:03:43] Speaker 00: But the evidence, the first type of routine discovery is that relied upon in the petition. [00:03:48] Speaker 00: Second is any inconsistent statements that the petitioner is aware of that may be inconsistent with arguments that are made. [00:03:56] Speaker 00: The third type is the deposition of any witnesses that are relied upon in the petition. [00:04:02] Speaker 00: Okay, or vice versa. [00:04:04] Speaker 03: So that discovery produces relevant evidence that the board can't consider it? [00:04:09] Speaker 00: Well, it depends on what you mean by evidence, Your Honor. [00:04:12] Speaker 00: Maybe that's where we're crossing in the night here, two ships passing the night. [00:04:16] Speaker 00: The evidence that the board can rely upon to prove a prima facie case of obviousness needs to be in the petition. [00:04:24] Speaker 00: That's absolutely clear by the [00:04:25] Speaker 00: statutory regulatory scheme that was set up. [00:04:28] Speaker 03: Will you not argue? [00:04:29] Speaker 03: I'm sorry. [00:04:29] Speaker 00: What's the added evidence here? [00:04:31] Speaker 00: The added evidence here are, I'll take one example, spraying original clear coating onto a headlamp. [00:04:38] Speaker 00: The board relied, if you took the petition and the final written decision and held them side by side, you would find that what was in the final written decision, the two pieces of argument, two arguments I'm going to tell you about, or two pieces of evidence, were not in the petition. [00:04:52] Speaker 00: The first one, the board relied upon [00:04:55] Speaker 00: expert testimony from our patentees expert, which by definition, of course, came after the petition was filed. [00:05:04] Speaker 00: The second one was there was a secondary reference relied upon in the petition called the Eastwood Reference. [00:05:09] Speaker 00: The Eastwood Reference was provided and discussed in the petition only for the fact of removing a headlamp from an automobile. [00:05:17] Speaker 00: What the board came up with was about a 12-page exhibit. [00:05:23] Speaker 00: The board found an excerpt deep within the Eastwood reference that it believed justified the spraying a clear coat on the headlight. [00:05:34] Speaker 02: The problem with this is... That's so trivially obvious as a way to put a coat back on or to turn it to the headlight after you've cleaned it. [00:05:48] Speaker 00: Your Honor, that's not what the evidence of this case is. [00:05:50] Speaker 00: The evidence of this case is that LKQ is the United States leading refurbisher of automobile parts. [00:05:59] Speaker 00: They were not doing this process. [00:06:01] Speaker 00: What they did is they started taking our headlamps and giving it to the inventors of the 364 patent. [00:06:08] Speaker 00: And the inventors then performed the process on the headlamps and brought them back. [00:06:13] Speaker 00: LKQ was so profoundly impressed by the quality [00:06:17] Speaker 00: We started gathering the headlamps for our attorney. [00:06:18] Speaker 03: But that's not responsive. [00:06:20] Speaker 03: As I understand it, what you're saying is that the evidence about spraying as a way of putting the code on wasn't in the petition. [00:06:29] Speaker 03: And you're arguing also that the removal of the fully removing evidence wasn't in the petition. [00:06:37] Speaker 03: Of course, that latter is irrelevant under the claim construction adopted by the board. [00:06:43] Speaker 03: So you're really talking about the spraying [00:06:46] Speaker 03: as Judge Lurie said, not being in the petition and being kind of well-known in the art, right? [00:06:53] Speaker 00: Absolutely. [00:06:53] Speaker 00: In terms of the procedural argument, if the board's claim construction is affirmed, then that's right, on the removal of the original clear coat, that's right, that's separate aside. [00:07:04] Speaker 00: But with respect to the sprain, the evidence relied upon, our expert testimony, and frankly it's not [00:07:11] Speaker 00: our experts saying that spraying was known to be put on headlamps. [00:07:14] Speaker 00: That's not what the evidence that was relied upon stated. [00:07:17] Speaker 00: It was an interpretation of what our experts said. [00:07:23] Speaker 00: And secondly, this excerpt from Eastwood that doesn't actually stand for the proposition of spraying clear coat on a headlamp. [00:07:29] Speaker 01: Well, to be sure that I understand your position, what's the point of having expert testimony and having depositions [00:07:39] Speaker 01: If that which comes out, let's say there are no new documents, so it's just what they say or their opinion or whatever. [00:07:47] Speaker 01: But what is the point, the entire point of this statute is to bring out information that might be brought out in the district court, and therefore it provides for depositions and experts. [00:08:01] Speaker 01: You're saying that nothing that is said on either side can then be relied upon by the board? [00:08:08] Speaker 00: No, that's not what I'm saying, Your Honor. [00:08:09] Speaker 00: What I'm saying is the petition needs to have the evidence upon which a finding of unpatentability can be found. [00:08:17] Speaker 03: But that's the same thing as saying they can't rely on the discovery. [00:08:21] Speaker 00: Well, no, to the extent that the petition says that element A is found in prior reference here, and then our expert opines that it's not, that it's, you're wrong, it's not, and then the deposition is taken [00:08:37] Speaker 00: and you can undermine the testimony of the expert. [00:08:42] Speaker 00: That's what the deposition is for. [00:08:44] Speaker 00: You have to go back to re-examination practice. [00:08:45] Speaker 00: In re-examination practice, expert declarations could be submitted and there was no opportunity to sit that person down in a chair and find out and pressure test their [00:08:57] Speaker 00: their opinions. [00:08:58] Speaker 00: Here you can't have a system where a petition is filed and the rules require the petition to contain all the evidence. [00:09:05] Speaker 00: There are rules that allow for supplemental evidence to be included. [00:09:10] Speaker 00: It's section 316A3 of the Patent Act and then 37 CFR 42.123 say if you want to include additional evidence [00:09:20] Speaker 00: That has to be done within one month of the decision institute. [00:09:24] Speaker 01: But you're not limiting that to documentary evidence. [00:09:26] Speaker 01: You're also just saying as evidence what someone might have said in a deposition. [00:09:31] Speaker 01: Absolutely. [00:09:32] Speaker 00: It's evidence that would, listen, what 312A3 says is that a petition must identify with particularity the evidence that supports the challenge to each claim. [00:09:46] Speaker 00: The evidence of a prima facie case must be in the petition. [00:09:50] Speaker 00: If it's not there, and in the patent owner response, it is pointed out that there's a hole in the petition, which is exactly what happened here. [00:09:56] Speaker 00: It cannot open the door to brand new evidence in a reply brief or later, where patent owner has no opportunity to respond to it. [00:10:03] Speaker 00: That's the way the briefing is set up. [00:10:05] Speaker 00: The way this all played out, we identified the holes in the petition in the reply brief and in our expert depositions afterwards. [00:10:13] Speaker 00: They didn't ask about [00:10:14] Speaker 00: You know, the CUDA reference, for example. [00:10:18] Speaker 00: Oh, you know, spraying actually is there. [00:10:20] Speaker 00: Let's explain why spraying is there. [00:10:21] Speaker 00: That's not what the deposition does. [00:10:23] Speaker 03: But your argument is that all the evidence has to be in the petition and that the board can't rely on anything that was developed later, no? [00:10:31] Speaker 00: The answer is, that is not what I'm saying. [00:10:34] Speaker 00: The answer, the board can rely, can look at deposition testimony to help inform its decision. [00:10:39] Speaker 00: But what happened here is a prima facie case of obvious is relied upon in the final written decision. [00:10:44] Speaker 00: contains in the spraying example, two pieces of evidence that absolutely were not contained in the petition. [00:10:51] Speaker 00: I don't understand. [00:10:54] Speaker 03: You have to be saying then that there was something that the board relied on that was outside the petition and that that's not proper. [00:11:03] Speaker 03: Correct. [00:11:05] Speaker 03: So, you know, how can it be? [00:11:08] Speaker 03: that they have this proceeding to develop additional evidence, but none of it can be relied on. [00:11:12] Speaker 00: That's where I think your honor is wrong. [00:11:13] Speaker 00: This proceeding is not to develop additional evidence. [00:11:16] Speaker 00: This proceeding is for a petition and the board's regulations, the trial practice guide is adamant that you need to get all your evidence into the petition in the first instance. [00:11:25] Speaker 00: Because in order to have a just, speedy, and expeditious process, we're only going to have three briefs here. [00:11:30] Speaker 00: We're going to have the petition, we're going to have a patent on response, and we're going to have a reply brief. [00:11:35] Speaker 00: I think Your Honor is incorrect to suggest that the proceeding is all about creating new evidence. [00:11:39] Speaker 00: That's what district court's about. [00:11:41] Speaker 00: This is supposed to be a shortcut of district court. [00:11:43] Speaker 00: The trial last only 12 months and there's a very streamlined briefing procedure and it's very prejudicial to patent owners if when they point out that a prima facie case was not set forth in the petition that new evidence can be generated after their only response and to which we have no opportunity to respond. [00:12:02] Speaker 00: That's not how this is set up. [00:12:03] Speaker 00: That's why [00:12:05] Speaker 00: The additional evidence rules 42.123 require any new evidence to be included within one month of the decision institute. [00:12:15] Speaker 00: Not coincidentally, that gives plenty of time to a patent owner to respond to that evidence in the patent owner's response. [00:12:20] Speaker 00: It could be declaration testimony. [00:12:22] Speaker 00: It could be documentary evidence. [00:12:24] Speaker 00: But you can't have a system where new evidence comes in afterwards and there's no opportunity to respond, including at the oral hearing. [00:12:31] Speaker 00: The oral hearing is purportedly [00:12:33] Speaker 00: Not amenable to new arguments and new evidence either. [00:12:36] Speaker 01: I know we're running out of time. [00:12:38] Speaker 01: Do you want to talk about the merits? [00:12:41] Speaker 00: Sure, your honor. [00:12:43] Speaker 00: With regard to the merits, the removing the clear coat limitation, the board read partially into the claim or partially removing an original clear coat or removing some of an original clear coat. [00:12:56] Speaker 00: That is just simply contradictory to the entirety of the intrinsic evidence. [00:12:59] Speaker 00: The specification of the 364 patent is entirely about creating a headlamp that is of original equipment quality. [00:13:06] Speaker 00: And it sets forth in great detail the step-by-step process by which this is to take place. [00:13:12] Speaker 00: And the only embodiment disclosed requires taking the entirety of the original clear coat off. [00:13:18] Speaker 00: And so to read in this removing some of the clear coat is not a reasonable interpretation in view of the specification. [00:13:28] Speaker 00: It's also important to recognize that right before this particular limitation, removing an original clear coat, is a limitation that says removing a headlamp. [00:13:37] Speaker 00: We all knew what removing a headlamp was. [00:13:39] Speaker 00: In fact, that was the main focus of the petition, that it was obvious to remove a headlamp and then perform procedures on the headlamp. [00:13:45] Speaker 00: Remove in that context was entirely off. [00:13:48] Speaker 00: That's what remove in the context of the clear coat ought to be as well. [00:13:52] Speaker 00: To the extent that the court reverses that claim to structural argument, [00:13:57] Speaker 00: Again, with respect to the removing a clear coat limitation, there was also a hole in the petition. [00:14:03] Speaker 00: What was cited in the petition in our briefing was just a couple lines that said the CUDA reference discloses removing a clear coat. [00:14:09] Speaker 00: It is absolutely undisputed at this point in time that CUDA does not disclose removing it, that clear coating is left on because CUDA was talking about a shade tree mechanic type process where good enough was just good enough. [00:14:20] Speaker 00: And so they left clear coat on there. [00:14:23] Speaker 00: And our experts will find that that is not what ordinary skill in the art would understand this limitation to mean. [00:14:28] Speaker 00: Because to get that original equipment quality that's set forth in the specification, and you put a new spray of coating on there, the coating would delaminate if you left it on there. [00:14:38] Speaker 00: That is not original equipment. [00:14:41] Speaker 00: The evidence relied upon by the board in this regard is again testimony from our expert, not their expert. [00:14:49] Speaker 00: And what our expert testified to was not that when you remove the headlamp from the car that you would know to take it all off. [00:14:58] Speaker 00: There's nothing in the art of record that would suggest that. [00:15:01] Speaker 00: The only way you get that step is by looking at our patent in Perfect Hindsight. [00:15:05] Speaker 00: What he said was if you remove the headlamp, the limited access corners would be gone. [00:15:10] Speaker 00: LKQ never asked the deposition, all right, now that the limited access corners are gone, would you or would you not know to take that off? [00:15:16] Speaker 00: That might be evidence that counteracted, you know, the concept that the prima facie case wasn't made in the petition, but that's not what was asked. [00:15:27] Speaker 00: What was asked was if you take this off, would the limited access corners be gone? [00:15:31] Speaker 00: Our experts said yes. [00:15:33] Speaker 00: Now the board takes a huge leap from that to say, well, if you would have thought to take it off, [00:15:38] Speaker 00: Then you would have thought to take the entire clear coding off. [00:15:44] Speaker 00: That's not something that's in the art. [00:15:45] Speaker 00: There's no expert testimony about that. [00:15:47] Speaker 00: And it's new evidence that came after the fact. [00:15:51] Speaker 00: In general, there's a lot of gap filling going on. [00:15:56] Speaker 00: The board was trying to help out Petitioner by filling gaps. [00:16:00] Speaker 00: And the Court's precedent in the KSM case suggests that that sort of generalities are not acceptable. [00:16:09] Speaker 00: You need to have documentary evidence to prove core findings of obviousness or unpatentability. [00:16:18] Speaker 00: Regarding the statically neutralized case, again, it's a claim construction issue. [00:16:23] Speaker 00: The interactive gift case suggests that there's two parts to the test of deciding whether a particular claim limitation ought to happen in order. [00:16:31] Speaker 00: One, you look to the claim language. [00:16:33] Speaker 00: Two, you look to the specification. [00:16:34] Speaker 00: The claim language, does logic or grammar suggest that it ought to be done in a certain order? [00:16:39] Speaker 00: The specification, does it directly or implicitly require that it be done in an order? [00:16:44] Speaker 00: All the evidence suggests that it be done in an order. [00:16:47] Speaker 00: You read the specification of the patent. [00:16:50] Speaker 00: Once you do this, you do this. [00:16:51] Speaker 00: Once you do that, you do that. [00:16:52] Speaker 00: It's all laid out there in perfect detail. [00:16:56] Speaker 00: And it only talks about static neutralization after the steps of [00:17:01] Speaker 00: removing the debris have taken place, the grinding and the buffing steps. [00:17:06] Speaker 00: After that debris has been created, now you statically neutralize it to remove it right before the spraying step to make sure that in an original equipment quality lamp you have a nice solid coating on there. [00:17:20] Speaker 00: CUDA, Eastwood, the other references, they're not concerned about that type of quality and as a result they don't disclose the standard neutralization at the very end of the process. [00:17:30] Speaker 00: It's also important to note that the claim language itself dictates an order. [00:17:33] Speaker 00: It says that you statically neutralize to facilitate the removal of all of the debris. [00:17:39] Speaker 00: That's suggesting that you created the debris in these orders, in this order, and an order matters. [00:17:50] Speaker 00: I've got about two minutes, 45 minutes left. [00:17:51] Speaker 00: I'm going to reserve the remainder of my time for rebuttal. [00:17:55] Speaker 01: Okay, thank you. [00:18:05] Speaker 01: Mr. Engel? [00:18:06] Speaker 04: Good morning, Honors. [00:18:10] Speaker 04: May it please the Court? [00:18:12] Speaker 04: The Board's decision here should be affirmed. [00:18:15] Speaker 04: I'd like to address the first argument that Mr. Cutler addressed, which was new evidence used to form the Board's finding. [00:18:22] Speaker 04: I'm going to let the Solicitor address the procedural aspects, but I want to point out that no new evidence was used to arrive at this decision. [00:18:33] Speaker 04: First off, [00:18:35] Speaker 04: The references that were in the institution were the references that were used to finally invalidate the claims that are on appeal here. [00:18:43] Speaker 04: The board relied on the 364 patent itself for discussion of the halo effect at A9 of the appendix with respect to claim construction. [00:18:51] Speaker 04: The board is entitled to look at the patent itself to determine the proper claim construction. [00:18:56] Speaker 04: The board relied on Eastwood for a teaching of spraying. [00:18:59] Speaker 04: That's at A22 to 23 of the appendix. [00:19:02] Speaker 04: Eastwood is part of the record. [00:19:03] Speaker 04: It was one of the instituted combinations. [00:19:05] Speaker 04: The board's clearly entitled to look at what the references teach to see whether or not spraying was known in the art. [00:19:10] Speaker 04: In the petition, we argued that spraying was known in CUDA. [00:19:14] Speaker 04: Clear lamp in response said CUDA does not teach spraying. [00:19:18] Speaker 04: The board looked at all of the evidence, including other references to see whether that coding or applying could be interpreted as spraying. [00:19:25] Speaker 04: Was that something known in the art at the time? [00:19:29] Speaker 04: The board at A21 to 22 also relied on the testimony of Clearland's experts. [00:19:34] Speaker 04: That testimony was in their direct declarations, the direct examination that Clearland put in. [00:19:41] Speaker 04: That testimony could not have been in the petition. [00:19:43] Speaker 04: It only came in when Clearland put it in. [00:19:46] Speaker 04: And the board also relied on cross-examination testimony at A18 to A19. [00:19:52] Speaker 04: Again, cross-examination testimony has to be able to be relied on if it's authorized by the statute. [00:19:59] Speaker 04: Moving on to the claim construction issues in this case, I think this case presents an interesting decision for the court post-TEVA. [00:20:09] Speaker 04: Here you will see that there are many fact findings made because clearly they haven't put in expert declarations to support all of the claim constructions that are on appeal. [00:20:18] Speaker 04: And we would submit that post-TEVA, those factual findings should only be overturned [00:20:26] Speaker 04: if there's not substantial evidence to support the board's findings regarding those claim constructions. [00:20:32] Speaker 02: Specifically, with respect to removing... In other words, Tebra applied clear error. [00:20:40] Speaker 02: Yeah. [00:20:41] Speaker 02: But you're saying with respect to the Patent Office, you go down further. [00:20:47] Speaker 04: I believe that the in-reg guard side case talks about substantial evidence and I think that equates it to [00:20:53] Speaker 04: the same clear error standard at the district court level. [00:20:57] Speaker 04: In other words, not de novo. [00:20:59] Speaker 04: Not de novo. [00:20:59] Speaker 04: That's correct, Your Honor. [00:21:00] Speaker 03: Well, except that Tavis says it's de novo insofar as intrinsic evidence. [00:21:06] Speaker 03: And here, the board's claim construction was based on intrinsic evidence, not extrinsic evidence, right? [00:21:13] Speaker 04: I don't know that that's entirely [00:21:15] Speaker 04: Correct, Your Honor. [00:21:16] Speaker 04: It's an interesting case because we did not have a competing expert. [00:21:19] Speaker 04: They didn't adopt one expert over the other. [00:21:21] Speaker 03: To what extent were they relying on expensive evidence for the claim construction? [00:21:24] Speaker 04: Yeah, so for example, clearly I'm putting an expert to say one of ordinary skill would understand that removing means removing the entirety of the coding. [00:21:36] Speaker 03: But there's no, they didn't rely on any term of art that was known. [00:21:41] Speaker 03: Under Phillips, and I don't understand Phillips to have changed [00:21:45] Speaker 03: of and changed by TIVA, Phillips says, you know, an expert can be useful if he's construing a term of art that was known, but it's not relevant where the expert comes and says, oh, well, I'm an expert. [00:22:01] Speaker 03: Let me tell you how I read the patent. [00:22:03] Speaker 03: And that's what the testimony is here, right? [00:22:07] Speaker 04: I think they testified how to read the patent, but they'd also testified that one of ordinary skill in the art would understand this term [00:22:13] Speaker 04: to mean one thing. [00:22:14] Speaker 04: And the reason that's important is because the CUDA reference. [00:22:16] Speaker 03: I don't see that, but I'm a little surprised that you're making there argument for them. [00:22:21] Speaker 04: Well, the CUDA reference says removing. [00:22:24] Speaker 04: It has the exact same orders in the patent. [00:22:27] Speaker 04: So clearly, I'm forced to bring in an expert to say, removing, when you're looking at this specific type of thing, means one thing. [00:22:34] Speaker 04: The board looked at that fact finding and decided that was not the case. [00:22:38] Speaker 04: They decided removing means removing at least a part of the coding. [00:22:42] Speaker 04: The part that has damage on it, partially removing it is encompassed by the patent. [00:22:48] Speaker 03: What the board said was that they used fully removing in the specification. [00:22:52] Speaker 03: They chose not to use that term in the claims itself. [00:22:55] Speaker 03: So removing in the claims has to mean something different from fully removing. [00:23:01] Speaker 04: That's correct, Your Honor. [00:23:04] Speaker 04: I'll move on to statically neutralizing. [00:23:09] Speaker 04: I think there was an argument there that it's only shown at one place in the method, and I think if you actually look back at the patent itself, it's shown at multiple different tests. [00:23:17] Speaker 01: Would your argument be different if it were two places? [00:23:21] Speaker 04: It is shown in two places, so my point is that it's shown at multiple places during the process. [00:23:31] Speaker 01: Okay, proceed. [00:23:38] Speaker 04: With respect to the obviousness teachings in this case, CUDA discloses coding or applying a clear coat. [00:23:46] Speaker 04: The board found that spraying is encompassed by the art. [00:23:50] Speaker 04: We would submit that the board's findings supported by substantial evidence and should be affirmed. [00:23:56] Speaker 04: With respect to removing, there is no dispute under the board's construction that part of the clear coating is removed. [00:24:04] Speaker 04: The board also found under [00:24:06] Speaker 04: ClearLamp's proposed construction of the combination of references. [00:24:10] Speaker 04: This is an important point. [00:24:11] Speaker 04: When you take the lamp out of the car and apply the CUDA method, there really is no dispute that it would remove the entirety of the coding if that's what you're intending to do. [00:24:21] Speaker 04: CUDA talks about the limited access corners possibly hindering it, but when you removed it from the car, those limited access corners no longer exist. [00:24:45] Speaker 04: There are no further questions, Your Honor. [00:24:46] Speaker 04: That's all I have. [00:24:48] Speaker 01: Okay. [00:24:48] Speaker 01: Thank you. [00:24:52] Speaker 01: Thank you from the representative of the office, Sumitel. [00:25:01] Speaker 05: Your Honor, may it please the court? [00:25:02] Speaker 05: Section 316A5 of the Patent Act clearly authorizes both parties to engage in post-institution discovery of, quote, relevant evidence, including depositions of parties submitting [00:25:14] Speaker 05: affidavits or declarations. [00:25:16] Speaker 05: So the statute itself authorizes after institution, both parties are entitled to that discovery. [00:25:23] Speaker 05: At section AA, the statute authorizes the patent owner to submit a patent owner response after the proceeding is instituted that authorizes that party to introduce additional factual evidence, including statements of affiance and declarations. [00:25:39] Speaker 05: The petitioner is then authorized to engage in discovery, including the deposition of the person who submitted those affidavits and declarations, and submit a reply. [00:25:52] Speaker 05: All of this is clear in the statute, and all of this is frankly undisputed. [00:25:57] Speaker 05: Patent owner's position in this case, though, is that all of that discovery that was obtained pursuant to the statute, that basically the petitioner can acquire all of that evidence, [00:26:09] Speaker 05: and then can frankly throw it away because he's not allowed to use it in his reply. [00:26:14] Speaker 05: And that simply isn't a reasonable reading of the statute. [00:26:17] Speaker 05: The clear implication of the statute also is implemented by the patent officer's regulations is that each party is entitled to their discovery and then to use it in their responses and their replies. [00:26:28] Speaker 05: The principal limit on a petitioner's reply in these cases is that provided in the regulations as Section 4223. [00:26:36] Speaker 05: which limits the petitioner and his final reply to responding to arguments that were raised in the preceding patent owner response. [00:26:44] Speaker 05: In this case, there's no dispute that the petitioner adhered to that limit. [00:26:49] Speaker 05: The principal argument that clear lamp raises, upon clear lamp raises in this case, is with regard to whether the prior art disclosed removing all of the clear coat finish from the vehicle lamp. [00:27:00] Speaker 05: But it's clear that in its preceding patent owner response, ClearLamp itself directly raised this issue. [00:27:08] Speaker 05: This appears at pages A335 through 39 of the administrative record. [00:27:13] Speaker 05: Because ClearLamp raised the issue in its preceding patent owner response, LKQ Corporation, the petitioner, was entitled to respond to that in its reply. [00:27:23] Speaker 02: How does the presumption of validity go away because of the re-examination procedure? [00:27:30] Speaker 02: The statute still endows the patent with a presumption, even if it's going to be re-examined, doesn't it? [00:27:40] Speaker 05: In this case, the statute itself, I believe this is at Section 3160, provides that the presumption of validity does not apply in these proceedings. [00:27:48] Speaker 05: In these proceedings, though, it is the petitioner who bears the burden of proving unpatentability by preponderance of the evidence. [00:27:55] Speaker 05: The board's role is to take in appropriate evidence, conduct the proceeding, manage the [00:28:01] Speaker 05: and then weigh that evidence and simply determine whether the petitioner, LKQ Corp, has met his burden of proof, has demonstrated the unpatentability of his claims. [00:28:12] Speaker 05: In their reply brief in this case, LKQ Corp suggests that not only can the reply not raise any additional evidence, anything that was discovered, they also suggest that [00:28:26] Speaker 05: the petitioner in his petition must try to anticipate anything that might be raised in reply and respond to those arguments in the petition. [00:28:36] Speaker 05: I would submit this is not only contrary to the clear structure of the statute and the implementing regulations, it would also be utterly impractical. [00:28:43] Speaker 05: The office's position is that the petition is for presenting the case for instituting the proceeding, and the subsequently authorized petitioner reply, which is again is expressly authorized by the statute, [00:28:55] Speaker 05: at section 316A13 is an end for replying to the arguments that were raised in response. [00:29:02] Speaker 05: The inquiry that Clear Lamp advances in this case, where this court, under this inquiry, this court wouldn't ask, does the evidence support the board's determination that certain claims are patentable or unpatentable? [00:29:15] Speaker 05: Instead, the inquiry would be, well, what did the petitioner know and when did he know it? [00:29:19] Speaker 05: Sure, he raised this argument and the evidence supports this, but could he have somehow raised this earlier? [00:29:24] Speaker 05: The director would submit this type of hypothetical inquiry as utterly divorced from the clear purpose of these proceedings to provide a cheaper, faster, and fairer alternative for deciding the validity of claims in a patent. [00:29:40] Speaker 05: The inquiry being urged here is inconsistent with the statutory structure, is inconsistent with the office's regulations, and would frankly be unworkable and would undermine the clear purpose of these proceedings. [00:29:54] Speaker 05: If time permitting, I'd like to respond to two minor points raised in Clearlamp's argument. [00:29:59] Speaker 05: It's been alleged that patent owner only has one chance to respond to the petition. [00:30:03] Speaker 05: That's actually not the case. [00:30:05] Speaker 05: Patent owner is authorized at the petition stage to issue a preliminary response. [00:30:09] Speaker 05: This is at section 313 of the Patent Act. [00:30:11] Speaker 05: And then after institution of the proceeding and discovery, the patent owner is allowed an additional response. [00:30:17] Speaker 05: This is authorized by 3188 of the statute. [00:30:20] Speaker 05: So the patent owner does have two opportunities. [00:30:23] Speaker 05: to respond provided by statute in the proceeding. [00:30:26] Speaker 05: It's not, we wouldn't concede that the fundamental fairness of the proceeding depends on having two responses, but the patent owner is given those two opportunities. [00:30:34] Speaker 01: Thank you, Mr. Matau. [00:30:38] Speaker 01: Mr. Cutler. [00:30:43] Speaker 00: Thank you, Your Honor. [00:30:45] Speaker 00: A couple of very quick points. [00:30:48] Speaker 00: We talked already, I'm going back to the procedure first, we talked already about how [00:30:52] Speaker 00: The statute requires the evidence upon which the petition relies for an obvious ground to be in the petition. [00:30:58] Speaker 00: We talked about if there's additional evidence that needs to be included, there are provisions for that in the regulations. [00:31:03] Speaker 00: There's another thing I want to point out. [00:31:05] Speaker 00: The 37 CFR 42.23b says that a reply brief may only respond to issues raised in a patented response. [00:31:14] Speaker 01: I think it would be helpful if you talked a little bit about the merits. [00:31:18] Speaker 00: You only have a couple of minutes. [00:31:20] Speaker 00: Okay. [00:31:21] Speaker 00: On that point, I will briefly on that point. [00:31:23] Speaker 00: There is evidence at 47th Federal Register 48767 that talks about its new evidence if it is needed to make a prima facie case. [00:31:33] Speaker 00: I think it's a page seven of our reply brief that actually is very important to point out that what was done here is new evidence and shouldn't be included. [00:31:40] Speaker 00: Regarding the merits of the case, I'm brought back to Judge Laurie's comment that it's trivial to put spray on a headlamp. [00:31:49] Speaker 00: And the problem here is that's not the evidence of record. [00:31:52] Speaker 00: Even what was cited in the petition, what was cited by the board, there is no disclosure of spraying on a headlamp. [00:31:59] Speaker 00: Now, what's said in the opposition brief by LKQ is very important to point out. [00:32:04] Speaker 00: It says that Clearlamp's expert confirmed [00:32:07] Speaker 00: that spraying headlamps was known in the art. [00:32:10] Speaker 00: That's incorrect. [00:32:11] Speaker 00: If you read the testimony they cite, all he talks about is something to do with windshields. [00:32:15] Speaker 00: There's nothing to do with headlamps at all. [00:32:16] Speaker 00: So there is no evidence of spraying on a headlamp. [00:32:19] Speaker 00: And I'm not one to skill in the art, but if that was so clear and obvious, there should have been evidence to it in the paper. [00:32:29] Speaker 00: You know, Judge, you mentioned, Your Honor mentioned a [00:32:35] Speaker 00: you know, what the board said in its claim construction, looking at fully removing from the specification compared to the claims, that's some sort of hybrid claim differentiation argument that I'm not aware has any precedence to support it. [00:32:46] Speaker 00: The only embodiment in the specification was fully removing. [00:32:50] Speaker 00: The fact that the word fully was not included in the claim is not some sort of claim differentiation argument that can be made that limits our claim to, or broadens the claim out to partially or, you know, only removing some of the clear coding. [00:33:04] Speaker 00: And the other thing I want to mention with regard to the static neutralization, Council mentioned that it's mentioned twice in the specification, and the word static neutralization is mentioned twice, but not that this could happen at any point in the process. [00:33:18] Speaker 00: Each time it's mentioned, it's only talking about after the grinding and buffing step. [00:33:23] Speaker 00: It says it right in the specification, static neutralization happens after the grinding and buffing step. [00:33:28] Speaker 01: Thank you, Your Honors. [00:33:29] Speaker 01: Okay, thank you. [00:33:30] Speaker 01: Thank you all. [00:33:31] Speaker 01: The case is taken into submission. [00:33:34] Speaker 01: argument for this morning.