[00:00:00] Speaker 02: asking this court to affirm a board decision that's based on a doctrine that the board has since abandoned and to rely on what the government itself on the last stage of its brief calls an implicit finding, a finding the board did not make and could not have made on this record. [00:00:14] Speaker 02: Are we talking about the secondary considerations? [00:00:16] Speaker 02: That's the one, Your Honor, where the government is trying to urge on the court an implicit finding that the secondary considerations were found not to have existed, that the long-felt need had been satisfied in 1930. [00:00:28] Speaker 02: which is not a finding the board ever made, nor could it have made, because it is conceded by Adidas, by its expert before the board, and on page 41 of its own brief to this court, that there was a long-felt need that persisted through to the filing of Nike's patent application. [00:00:43] Speaker 02: At the very least, that's something the board should have considered and did not, and that's a ground in itself for a remand. [00:00:49] Speaker 02: I'd also start with another stark example of error, which is claim 49. [00:00:53] Speaker 02: That is the claim that requires apertures formed by omitting stitches, [00:00:57] Speaker 02: and positioned for receiving laces. [00:00:59] Speaker 02: The government itself doesn't even address that limitation, and no wonder, because neither of these cited prior art references discloses it in any way. [00:01:07] Speaker 02: Schussler undisputedly doesn't. [00:01:08] Speaker 02: It's a hat. [00:01:09] Speaker 02: There are no laces. [00:01:10] Speaker 02: And as for Nishida, Adidas's own expert conceded a deposition that he couldn't identify any apertures for receiving laces in that reference. [00:01:18] Speaker 05: Now, the board said... The standard you had to meet was some regulation where you had the burden to establish that [00:01:25] Speaker 05: Claims 48 and 49 were patently distinct from each other, right? [00:01:31] Speaker 05: That's correct, Your Honor, but the board... Well, you're talking about Nishida and there's shoes clear references, but the comparison is between the two claims. [00:01:40] Speaker 02: So there are two separate requirements that the comparison between the two claims is a requirement, but the board did not deny the motion to amend on that basis. [00:01:47] Speaker 02: It's very clear about that. [00:01:49] Speaker 02: The basis on which it did deny the motion was because it found that we had the burden to prove [00:01:55] Speaker 02: patentability over Nishida and Schuster. [00:01:57] Speaker 02: That's an error in itself and we'll get to that. [00:01:59] Speaker 02: But even on its own merits, there is no way to find that claim 49 is unpatentable over Nishida and Schuster. [00:02:06] Speaker 05: I thought they denied it because they felt like you did not meet the standard for a reasonable substitute number of claims where you were trying to replace one patent claim with [00:02:15] Speaker 02: two patent claims. [00:02:16] Speaker 02: They did discuss that, Judge Chen, but there's a statement in the decision that they do not deny the motion to amend on that basis, which is why the PTO does not defend that argument. [00:02:26] Speaker 05: But then they grouped them together, I guess, with the independent claim, right? [00:02:31] Speaker 05: They grouped them together and that is the property. [00:02:33] Speaker 02: Then concluded that the independent claim was [00:02:35] Speaker 02: not patentable. [00:02:37] Speaker 02: But they disregarded the claim that distinguished claim 49, which is these apertures that are formed by omitting stitches, which is not disclosed in the Nishida reference. [00:02:46] Speaker 02: Right. [00:02:46] Speaker 05: I'm just trying to, this is more administrative, trying to understand what they did. [00:02:52] Speaker 05: The ground here. [00:02:52] Speaker 05: My understanding was they didn't quote unquote put the cart before the horse by concluding that the claims were unpatentable. [00:03:02] Speaker 05: And because they were unpatentable, they would be grouped together. [00:03:05] Speaker 05: Right? [00:03:06] Speaker 05: I thought it was more because they felt like that your side did not meet the standard, the regulatory standard for establishing that these two claims are reasonable substitute number of claims for the canceled claim 19 or whatever it was. [00:03:22] Speaker 02: No, Your Honor. [00:03:22] Speaker 02: That is not the basis for the board's decision. [00:03:24] Speaker 02: The basis for the board's decision is on page 825, which is also page 25 of the board decision, where they have a paragraph in the center of the page that talks about claims 48 and 49. [00:03:34] Speaker 02: And then they're talking about the patentability over Nishida. [00:03:38] Speaker 02: And they say, with respect to the additional limitations of claim 49, Nishida describes forming lacing areas by knitting. [00:03:45] Speaker 02: Now, of course, lacing areas says nothing about the apertures. [00:03:49] Speaker 02: In fact, there's an area where laces will eventually go. [00:03:51] Speaker 02: Doesn't mean that the holes where the laces go are formed by omitting stitches. [00:03:55] Speaker 02: And in fact, as our expert Mr. Tonkel testified, without contradiction on this point, [00:04:00] Speaker 02: The disclosure of Nishida tells a skilled artisan that the holes are going to be punctured, not created by omitting stitches. [00:04:06] Speaker 02: The board then goes on and cites Nike's patent against it and says, further the specification of the 011 patent. [00:04:12] Speaker 05: You don't dispute that omitting stitches in a knitted material to create apertures consciously is something old, do you? [00:04:23] Speaker 02: Well, we don't deny that it might be. [00:04:26] Speaker 05: Nike's not the first one that came up with that idea. [00:04:29] Speaker 05: that to consciously design holes in a knitted material based on omitting stitches while you're knitting it. [00:04:37] Speaker 02: That's not an argument we've made, but we don't need to make that argument, Your Honor, because that's not the basis on which the board resolved this claim. [00:04:43] Speaker 02: It didn't address this at all. [00:04:45] Speaker 02: It believed that Nike's own patent could be cited against it for this teaching. [00:04:49] Speaker 02: This is a combination patent. [00:04:51] Speaker 02: That's certainly true. [00:04:52] Speaker 02: But then there needs to be more than simply even if the board had identified this limitation in the prior art, which it didn't. [00:04:58] Speaker 02: there would have to be some motivation to combine the reference that disclosed, whatever it is, this omitting stitches limitation. [00:05:06] Speaker 02: And there isn't any of that either. [00:05:07] Speaker 02: At the very least, there would need to be a remand for the board to articulate some reasoning on which it could find that this limitation had been disclosed. [00:05:15] Speaker 02: Instead, all it has is a faulty citation to Nishida, which clearly does not disclose this limitation, and then citing our own specification. [00:05:23] Speaker 05: But claim 19 and not resisting the [00:05:27] Speaker 05: the institutional grounds for Claim 19. [00:05:31] Speaker 05: Do you agree with the other side that in effect you've conceded that the apertures limitation is part of the prior art? [00:05:39] Speaker 05: No, Your Honor. [00:05:40] Speaker 02: Claim 19 does not disclose an aperture formed by omitting stitches, position for receipt omitted. [00:05:45] Speaker 02: Okay. [00:05:45] Speaker 05: The part about omitting the stitches in a position where you would use the aperture for lacing. [00:05:51] Speaker 05: Okay. [00:05:52] Speaker 05: I'm not talking about that language. [00:05:54] Speaker 02: I'm just talking about apertures. [00:05:55] Speaker 02: Well, Claim 19 certainly does disclose an aperture in the west-knitted textile element. [00:06:01] Speaker 02: But that is not the limitation of Claim 49 that we're talking about that the board failed to address. [00:06:06] Speaker 02: This is a narrowing version. [00:06:08] Speaker 05: As a starting point, apertures is something in this textile element. [00:06:15] Speaker 05: That's part of the prior art that's been conceded. [00:06:18] Speaker 05: Now, the real grounds of the dispute for you is the creation of the aperture by [00:06:25] Speaker 02: omitting stitches in a location so that you could use it for a lace. [00:06:29] Speaker 02: That's right, Judge Jent. [00:06:30] Speaker 02: And the problem is that the only evidence that was cited by either the board or by Adidas is the disclosure in Nishida of a net-like structure in the toe area for increasing air exchange. [00:06:42] Speaker 02: Now, there are no laces in the toe area. [00:06:44] Speaker 02: There's certainly no suggestion that those apertures were formed by omitting stitches. [00:06:47] Speaker 02: The way the board tried to make the leap of logic from what Nishida discloses to what we claim in the proposed amended claim [00:06:54] Speaker 02: is it points to the fact that Nike uses the omission of stitches to improve air permeability as a general matter. [00:07:01] Speaker 02: It then says that anyone who wanted to improve air permeability must necessarily have done it the way Nike said to do it in its patent specification. [00:07:09] Speaker 02: And then leaps from that to say that they would also use the omission of stitches for a completely different purpose, namely the creation of apertures for laces. [00:07:17] Speaker 02: There is no evidence supporting either of those leaps of logic. [00:07:21] Speaker 02: It certainly isn't in Adidas's experts report. [00:07:24] Speaker 02: So at the very least, there needs to be some articulation of a basis for that element in the prior art, which the board did not like. [00:07:32] Speaker 05: I guess the other side would say all that they need to worry about is apertures alone, which is conceded to be in the prior art, because apertures based on omitting stitches is not something that needs to be considered, because that's more of a product by process kind of a limitation. [00:07:52] Speaker 05: and how the product is made by a particular process is not relevant to patentability. [00:07:57] Speaker 02: That, Jeff, is not an argument that was made below as to Claim 49. [00:08:00] Speaker 02: If it had been made below, I think the board's answer to that would have been the answer it gave on the other product-by-process argument that Adidas made with respect to a flattened structure, which is, in order to flattened edges, [00:08:14] Speaker 02: which imparts structural differences when you flatten it an edge or when you omit a stitch to create an aperture, as opposed to punching out the material when the yarns get frayed and they need to be further finished, whether by searing through heating or some additional stitching or some kind of cover over them, otherwise they'll unravel. [00:08:34] Speaker 02: The board made that finding specifically as to flattened edges. [00:08:37] Speaker 02: We think it would have made the very same finding, it's the same analysis, [00:08:40] Speaker 02: as to punching out lacing holes, but it never had a chance to answer that question because it wasn't made. [00:08:46] Speaker 02: No finding of that nature was requested of the board, and it certainly wasn't made in under Chenery. [00:08:52] Speaker 02: It's not a proper basis for affirmance. [00:08:55] Speaker 02: It's the sort of thing that would have to be assessed by the board on remand. [00:08:59] Speaker 05: The master image 3D, we have a lot of issues to get through. [00:09:02] Speaker 05: You only have five minutes left. [00:09:04] Speaker 05: I guess you would have us [00:09:08] Speaker 05: vacate and remand that particular denial? [00:09:11] Speaker 02: Yes, Your Honor. [00:09:11] Speaker 05: Assuming we have to vacate the other, the merits rejection. [00:09:17] Speaker 02: Correct, Your Honor. [00:09:18] Speaker 02: I mean, the PTO has abrogated or at the very least radically reinterpreted the idle-free decision. [00:09:24] Speaker 02: It no longer asserts, at least as a general matter, the idle-free rule that was imposed against Nike. [00:09:31] Speaker 02: We didn't get a response to our 28-J letter, so I don't know what the government's position is going to be. [00:09:35] Speaker 02: Did you give us the 28-J letter on Proxycon? [00:09:37] Speaker 02: On Proxycon, no we did not, Your Honor, but I'm happy to address it if Your Honor would like. [00:09:41] Speaker 05: Is there anything to address at this point in light of Proxycon? [00:09:45] Speaker 02: There is, Your Honor. [00:09:46] Speaker 02: Proxycon did not address the plain text of the statute in Section 316E, which says that the burden of proof in an IPR is on the petitioner with respect to a proposition of unpatentability. [00:09:58] Speaker 02: On an amended claim? [00:10:01] Speaker 02: The proxy cons certainly did not address that question. [00:10:04] Speaker 02: I mean, the language of 316E does not differentiate between original issued claims and amended claims. [00:10:10] Speaker 02: It says in an IPR, the burden of a proof on a proposition of unpatentability is on the petitioner. [00:10:15] Speaker 02: There is no reason to make the non-statutory distinction that the PTO is trying to make in its brief to this court. [00:10:22] Speaker 02: In fact, they don't cite anything at all. [00:10:23] Speaker 02: As far as I can tell, it's simply an assertion that they don't want it to apply to amended claims. [00:10:27] Speaker 02: If they thought that that was consistent with the statute, they could maybe issue a regulation or something that said that. [00:10:33] Speaker 02: They haven't done that. [00:10:34] Speaker 02: But quite frankly, we think such a regulation would be void anyway because it's inconsistent with the statute. [00:10:39] Speaker 02: We think the thing to have done was to recognize that the burden of proof adds to the issue that Congress has spoken to. [00:10:45] Speaker 02: The proposition of unpatentability is on the petitioner. [00:10:48] Speaker 02: There are plenty of other issues where the patent owner can be given the burden. [00:10:51] Speaker 02: such as showing that you've got a reasonable number of claims, showing that you haven't added new matter, you haven't broadened the scope of the claims. [00:10:57] Speaker 02: The board found that we met our burden on that. [00:11:00] Speaker 02: It didn't deny the motion to amend on that basis. [00:11:02] Speaker 02: But what it can't do and what the PTO can't do to regulation or otherwise is something contrary to the statute. [00:11:08] Speaker 02: And the statute is clear. [00:11:09] Speaker 02: Proxycon did not address that language for whatever reason. [00:11:12] Speaker 02: It wasn't raised in that case. [00:11:14] Speaker 02: So this panel is perfectly able to and should enforce the language of the statute as it is written. [00:11:19] Speaker 02: Now, I do want to make sure that I get through all of the points, and the last one that's remaining is that there's simply no substantial evidence of a motivation to combine here. [00:11:28] Speaker 02: And this applies to all of the claims at issue, the proposed amended claims. [00:11:32] Speaker 02: What you have here are two references. [00:11:34] Speaker 02: You have Nishida and you have Schussler. [00:11:36] Speaker 02: They approach the issue in completely different ways. [00:11:40] Speaker 02: Nishida involves a web of fabric. [00:11:42] Speaker 02: You put the patterns as close together as you can, you cut them out, and you do your best to minimize the waste by making sure that the wasted material is lighter and cheaper. [00:11:50] Speaker 05: Was it known in the prior art that when you're doing flat knitting, you can flat knit a large web and then cut out the desired design? [00:11:59] Speaker 05: Or alternatively, when you're flat knitting, you can knit to shape? [00:12:03] Speaker 02: Was that known in the art? [00:12:05] Speaker 02: The two references are Nishida and Schuster are prior art. [00:12:08] Speaker 02: The question is, what basis is there for considering? [00:12:11] Speaker 02: that a skilled artisan would have taken the cutting of a pattern out of a web in Nishida and say, you know what, I'm going to get rid of the pattern, I'm going to get rid of the cutting, I'm going to get rid of the web, and I'm going to do this all based on a reference that dates back to the 1930s. [00:12:23] Speaker 02: There is no evidence of a motivation to do that. [00:12:26] Speaker 02: And at the very least, it would have to have been considered in light of the fact that there was an established, acknowledged, admitted need in this case for a method to reduce cutting waste. [00:12:37] Speaker 02: And yet nobody did it in the 60 years since Schussler was published or in the 10 years since Nishida was issued until Nike came up with it. [00:12:46] Speaker 01: The motivation to combine, that's a question of fact, right? [00:12:48] Speaker 02: It is a question of fact, Your Honor. [00:12:50] Speaker 02: It certainly is, Your Honor, as would be long-felt need if the board had made a finding on it, but it didn't. [00:12:55] Speaker 02: At the very least, it should have considered whether there was a motivation in light of this age-old prior art, particularly given the established long-felt need for this invention, yet nobody came up with it. [00:13:05] Speaker 02: This is Leo Pharmaceuticals, Your Honor. [00:13:07] Speaker 02: This is a case where the most recent prior art is 10 years old, the other asserted prior art is 60 years old. [00:13:13] Speaker 02: that weights very heavily against a finding of obviousness. [00:13:16] Speaker 02: You're deep into your rebuttal. [00:13:18] Speaker 02: I am indeed, Your Honor. [00:13:19] Speaker 02: I wanted to make sure I addressed the question. [00:13:20] Speaker 02: Thank you very much. [00:13:21] Speaker 05: Okay. [00:13:25] Speaker 03: Mr. Stockwell? [00:13:26] Speaker 03: May it please the Court. [00:13:28] Speaker 03: Just taking the last issue on motivation to combine, I think Nike's fundamental argument is that the motivation to combine was lacking because of the way they view the references, this issue they raised in their [00:13:41] Speaker 03: reply brief that Nishida is fundamentally an additive process because you have the web supporting this. [00:13:46] Speaker 05: Why isn't this like Leo Pharmaceutical? [00:13:48] Speaker 05: Well, because, Your Honor, first of all... For old stale references that were attempted to being combined and this court rejected that combination. [00:13:56] Speaker 03: Sure, Your Honor. [00:13:58] Speaker 03: First off, just on the motivation to combine. [00:14:01] Speaker 03: Nike's argument doesn't address the actual rationale the board used to combine for which there's substantial evidence. [00:14:07] Speaker 03: We can come back to that. [00:14:08] Speaker 03: With respect to the Leo Pharmaceuticals issue and the secondary considerations issue, what I'd like to point out is that page 41 of our reply brief, of our response brief, what we said was, yes, there was a long-felt need to reduce waste when you're making shoes. [00:14:23] Speaker 03: I mean, everybody knows there's always been that need. [00:14:26] Speaker 03: The very next sentence says, Nishida solved that need. [00:14:30] Speaker 03: And so did Schuster. [00:14:32] Speaker 03: As your honor posited to Nike's counsel, the art knew that you could put these structures next to each other on a web, use a web instead of a thickened material. [00:14:44] Speaker 03: That would do some savings. [00:14:46] Speaker 03: The art also knew from Schuster that you could knit to shape. [00:14:50] Speaker 03: So the art already solved the need. [00:14:52] Speaker 03: Now, what Nike also omits is that our expert, Dr. Frederick, explained that the reason, I mean, what Nike's fundamental long felt need was, well, somebody didn't take the Schussler reference dealing with the helmet swatch textile manufacturing and move it into making shoes. [00:15:09] Speaker 03: And our expert explained that by saying, wait a minute, when you're doing that, there are trade-offs because of the complexity of the manufacturing. [00:15:16] Speaker 03: process associated with shoes. [00:15:18] Speaker 03: So it's not, yes, you could, a skilled person could easily adopt the shoe sore technique to the Nishida technique. [00:15:25] Speaker 03: And in fact, there was plenty of motivation to do that, but they'd have to consider some other process steps and costs. [00:15:32] Speaker 03: And thus rebutted their showing of secondary consideration. [00:15:35] Speaker 03: Which the board never made a finding of. [00:15:37] Speaker 03: Well, your honor, on that point, what I would point out is. [00:15:43] Speaker 05: What if we conclude that the board [00:15:45] Speaker 05: made no findings on secondary considerations of them. [00:15:49] Speaker 03: What do we do? [00:15:51] Speaker 03: There's two answers to that. [00:15:53] Speaker 03: The first answer is what permeates their reply is that, well, you must remand, according to Nike, because of the Chinnery Doctrine. [00:16:02] Speaker 03: And what I would say is this court has addressed the Chinnery Doctrine in both Inrei Kamensky as well as- Inrei Kamensky. [00:16:11] Speaker 03: Yes. [00:16:12] Speaker 03: Do you need the citation? [00:16:14] Speaker 03: No, I know about it. [00:16:15] Speaker 01: One of the cases like Rambus V. Ray and Ray Hungkow, where we said specifically that the board failed to consider secondary consideration, so we must remand. [00:16:28] Speaker 01: How do you square up your argument? [00:16:29] Speaker 03: Well, Your Honor, what I would say is you've also said specifically that even under the Chinary Doctrine, you still have to take into account harmless error. [00:16:41] Speaker 03: Okay. [00:16:41] Speaker 03: And what we contend is that when you look at what the board did, in this instance, if you read the board's decision, you can see that they did, in fact, implicitly consider the secondary consideration long felt need, and they concluded there was no long felt need. [00:16:57] Speaker 03: And let me just refer you to a couple of places in the record where you can see that. [00:17:02] Speaker 03: So at A38, the board noted Nishida's teaching [00:17:08] Speaker 03: regarding the reduction of waste by placing layouts and adjoining positions. [00:17:13] Speaker 03: So remember, the long felt need here is to reduce waste. [00:17:17] Speaker 03: And the board says, wait a minute, Nishida, which is the prior art, does that. [00:17:21] Speaker 03: And the PTAB also found it, and Nike's response to that was, well, Nishida doesn't completely reduce waste. [00:17:31] Speaker 03: That was what their expert said at A1647 to 48. [00:17:35] Speaker 03: But the board also found [00:17:37] Speaker 03: that patent owner does not dispute that all the limitations of the claims are taught in the prior art. [00:17:43] Speaker 03: That is, you knew that you could do knit to shape from the Schussler references and that the other limitations were taught in the Nishida reference. [00:17:51] Speaker 03: So the PTAB finding, and this is at A38, Schussler teaches that the 2D helmet swatch of figure one of Schussler may be knit to shape on a flat knitting machine. [00:18:01] Speaker 03: When you combine that with Nishida's discussion, [00:18:04] Speaker 03: of reducing weight, the board is saying there is no long felt need here. [00:18:08] Speaker 03: The art teaches that. [00:18:10] Speaker 01: Isn't the board supposed to look at whether the references created from the Fisher case and then determine, look at secondary considerations? [00:18:17] Speaker 01: Isn't there a process under Graham v. Deer that the board was supposed to undertake, including an express consideration of secondary considerations? [00:18:27] Speaker 03: Well, I certainly agree that the board must consider secondary considerations when offered. [00:18:31] Speaker 03: I mean, that's clear. [00:18:33] Speaker 03: this court's controlling case law. [00:18:35] Speaker 03: The board did consider that. [00:18:37] Speaker 03: That was fully in the record. [00:18:38] Speaker 03: I don't believe that under this court's case law, the board necessarily has to discuss those when there's other findings that the board makes that indicate it considered it and decided there was no long felt need. [00:18:51] Speaker 03: And here, I would urge that any error is harmless in light of those findings by the board. [00:18:58] Speaker 03: There simply was no long felt need here sufficient to justify remand. [00:19:02] Speaker 03: I think we have your argument on secondary consideration evidence. [00:19:05] Speaker 03: I think I asked about Leo Pharmaceutical. [00:19:08] Speaker 03: Do you have a response to that? [00:19:10] Speaker 03: No, Your Honor. [00:19:11] Speaker 03: I don't beyond what I mentioned on secondary consideration. [00:19:14] Speaker 03: Okay. [00:19:16] Speaker 05: Now, what about Claim 49? [00:19:18] Speaker 03: So, Claim 49, I think Your Honor is correct that [00:19:22] Speaker 03: What Nike overlooks is that what the board actually did was to say, OK, you're trying to sub in for claim 19, two claims, claim 48 and claim 49. [00:19:33] Speaker 03: We're going to decide whether or not you've met your burden to show those claims are independently, patently distinct. [00:19:39] Speaker 03: They're not obvious over one another in light of the prior art. [00:19:42] Speaker 03: The analysis the board goes through where they talk about Nishida and the claims is to decide whether or not [00:19:50] Speaker 03: they're justified offering two for one. [00:19:53] Speaker 03: And at the end of the analysis, the board says, no, we don't think you've shown that claim 48 is patently distinct from claim 49 or vice versa. [00:20:02] Speaker 03: Do you think that's a one-way or two-way analysis? [00:20:07] Speaker 03: I don't know. [00:20:08] Speaker 03: I don't know. [00:20:12] Speaker 03: I'll have to PDO that. [00:20:14] Speaker 03: Yeah, I mean, I don't know whether the, I will say, I don't remember what idle free says, [00:20:20] Speaker 03: from the way they discussed it in the brief, it sounded like it was a two-way analysis because they looked at both limitations, they looked at what the other art like Nishida was teaching on that. [00:20:28] Speaker 03: Do you think that happened here? [00:20:29] Speaker 03: I'm sorry? [00:20:31] Speaker 05: Do you think a two-way analysis happened here? [00:20:34] Speaker 03: Well, they certainly, yes, from the way they discuss both of the claim elements and talk about how the claim elements were present, both in the admitted claims that were canceled, sorry, the claims that were canceled and therefore were deemed to be in the prior art, [00:20:47] Speaker 03: Nishida and the elements of claims 48 and 49. [00:20:51] Speaker 05: So if you assume for the moment that I've read Nishida and I don't see Nishida talking about knitting an aperture, let alone knitting an aperture that's based on omitting stitches in a position for where you would put the laces through. [00:21:12] Speaker 05: Tell me where I'm misreading Nishida. [00:21:15] Speaker 03: Okay, so when you look at figure two of Nishida, and they point this out in their reply brief, figure two and figure three. [00:21:21] Speaker 03: There's no lace holes in there. [00:21:23] Speaker 03: In figure two, there are no lace holes at the top where you would sort of normally expect laces, okay? [00:21:29] Speaker 03: And what we pointed out to the PTO was, but when you look at the toe area, there's a net-like structure. [00:21:36] Speaker 03: And Nishida talks about being able to use that. [00:21:38] Speaker 03: And that net-like structure, I mean, you make a net-like structure, it creates apertures because of the holes between the interstices of the web. [00:21:47] Speaker 03: That creates the apertures. [00:21:49] Speaker 03: And we pointed out that the skilled person would look at that disclosure from Nishida and realize that, well, you can also put the net-like structure in the lacing areas. [00:21:59] Speaker 03: And that the strip that they point to in Figure 2 was added. [00:22:03] Speaker 03: And when Nike criticized the board for referring to the permeability language in Nike's specification, what the board was doing there was comparing the character of the disclosure that Nike cited in support of claim 49, which had to do with that dropping some stitches for permeability to suggest, well, you can do that in the lacing area for holes. [00:22:26] Speaker 03: And if you compare the character of that disclosure, which Nike said was written description support for claim 49, [00:22:32] Speaker 03: with the character of the disclosure in the sheet, where you can also drop stitches, create the net-like structure in the toe, and a skilled person look at that so you can put it in the lacing area. [00:22:41] Speaker 05: Well, Nishida didn't say that. [00:22:42] Speaker 05: Nishida didn't say you can drop stitches to create holes for permeability. [00:22:46] Speaker 05: It talks about, I don't know, loose weaving in order to permit breathability, perhaps. [00:22:52] Speaker 03: But that's sort of exactly my point. [00:22:57] Speaker 03: Nike's disclosure talks about loose weaving for permeability. [00:23:01] Speaker 03: They point to that to support a claim to drop stitching. [00:23:06] Speaker 03: And Nishida does the same thing. [00:23:10] Speaker 03: So that's why we understood the board to be pointing to that disclosure in Nike and the corresponding disclosure in Nishida. [00:23:22] Speaker 03: The other point here is that at no point does Nike say it was any kind of abuse of discretion for the board to say, we're going to treat these claims. [00:23:32] Speaker 05: Where in Nike's patent does it talk about you create apertures by loose weaving? [00:23:40] Speaker 05: I mean, I see Nike's patent talking twice about apertures and each time [00:23:48] Speaker 05: those apertures are formed by omitting stitches at specific locations. [00:23:52] Speaker 03: But the Nike's patent also talks about creating permeability, which is what I was saying. [00:23:59] Speaker 03: The board was pointing to that and also pointing to the corresponding disclosure in Nishida. [00:24:05] Speaker 03: Both of those permeability disclosures the skilled person would understand are going to create apertures that can hold the lacing. [00:24:14] Speaker 03: And that's why the board was pointing to [00:24:17] Speaker 03: that part of Nike's disclosure, which was also similarly in the Nishida disclosure. [00:24:24] Speaker 03: If I could, going back to just the final issue that they raised with respect to the motion to amend, when I read their submission with respect to master image, if you look at the end of master image, I mean, it cites the Microsoft case that the court recently disclosed. [00:24:44] Speaker 03: The thrust of Nike's opening brief [00:24:47] Speaker 03: on the motion to amend issue and their reply brief was really a challenge on the burden of proof. [00:24:53] Speaker 03: That the burden of proof should not have been placed on Nike and should have instead been placed on Adidas. [00:24:58] Speaker 03: I think the Microsoft case has squarely resolved that issue. [00:25:02] Speaker 03: And I had understood that from the Microsoft case. [00:25:05] Speaker 03: Footnote four in the Microsoft case certainly reserved for future decisions. [00:25:11] Speaker 03: The issue of the idle-free decision that said, [00:25:16] Speaker 03: you have to also look at the prior art known to the patent owner not made of record. [00:25:22] Speaker 03: And I recognize that the PTO has changed that. [00:25:26] Speaker 03: The only thing I would point to, Your Honors, is that if you read the PTAB decision on this point, when you look at the PTAB decision, there are a number of indicators that suggest that the PTAB was understanding Nike to say to the board, hey, we know of some prior art. [00:25:46] Speaker 03: But these claims are different from that prior art. [00:25:50] Speaker 03: And the board was wanting to know, what is this other prior art that you know? [00:25:54] Speaker 03: And specifically, at A34, Nike's statement was that the proposed claims were patentable over the prior art, including Ellipse's other prior art known to Nike. [00:26:08] Speaker 03: At A35, the P tab says, [00:26:14] Speaker 03: They talk about how Nike had failed to identify the other prior art. [00:26:22] Speaker 03: And that statement is made in the context, if you look at A4 in the PTAB's decision, Nike had disclosed to the patent office that there were a number of related proceedings involving other patents related to this one and pending applications. [00:26:38] Speaker 03: So the board's looking at Nike's disclosure and thinking, [00:26:41] Speaker 03: Well, you guys know about some other prior art. [00:26:44] Speaker 03: You haven't made it of record. [00:26:46] Speaker 03: We need you to make this of record. [00:26:48] Speaker 03: So the error that would exist under Nike's posture here, if you accept the proposition that Microsoft has resolved the burden of proof issue, is that Nike has not had an opportunity to disclose to the board that other prior art, and you would be remanding for that. [00:27:08] Speaker 03: We come full circle back to, [00:27:10] Speaker 03: the Chenery Doctrine, which says harmless error applies. [00:27:15] Speaker 03: If, in fact, this panel sustains the board's decision on the fundamental question of obviousness, there's no reason to remand back to allow Nike to make that type of disclosure under the master image decision. [00:27:30] Speaker 03: So for those reasons, we would respectfully ask the court to affirm. [00:27:34] Speaker 05: But hypothetically, we felt like we needed to remand on 103 [00:27:41] Speaker 05: because at the very least there is a problem with not making any findings on secondary considerations, then maybe we also need to remand on the master image issue. [00:27:53] Speaker 03: Well, I certainly recognize that if the court were to remand on the secondary considerations issue, that would allow Nike the opportunity to readdress the motion to amend issue under the new master image standard, right? [00:28:06] Speaker 03: I mean, they could make the disclosure that the board, I mean, if you read the board decision, it seems like the board is thinking, well, you guys know some priority, you need to disclose it. [00:28:15] Speaker 03: And they hadn't, at that point, they hadn't made any of those disclosures. [00:28:18] Speaker 03: And I certainly agree that that would be part of the process. [00:28:20] Speaker 03: I mean, at that point, they could [00:28:22] Speaker 03: make the disclosure that Master Image says they should. [00:28:28] Speaker 03: Thank you. [00:28:29] Speaker 05: Okay, thanks. [00:28:32] Speaker 05: Okay, here from the PTO, Mr. Foreman. [00:28:34] Speaker 05: Do you want to start with Master Image 3D? [00:28:39] Speaker 05: Sure. [00:28:40] Speaker 05: I've read that order as well as the Federal Register notice. [00:28:45] Speaker 05: To me, it's saying that the PTO is telling all of us [00:28:51] Speaker 05: that Master Image 3D serves as essentially a translation document as to what is the real meaning of the idle-free order. [00:29:00] Speaker 05: And so it's not the PTO stepping away and renouncing idle-free, it's interpreting idle-free. [00:29:10] Speaker 05: Is that a fair assessment of what is happening in Master Image 3D? [00:29:14] Speaker 04: Yes, I would agree with that. [00:29:15] Speaker 04: I think that it's not a change of idle-free, it's more of a clarification of idle-free. [00:29:21] Speaker 04: You know, the board denied here, denied Nike's motion to amend under what was at the time a fair reading of vital free. [00:29:29] Speaker 04: But now master image has explained that the reference to prior art not in the record known to the patent owner is limited to, excuse me, the prior art that would be disclosed by the patent owner under the duty of candor. [00:29:42] Speaker 04: So I think we would acknowledge that given this clarification, [00:29:47] Speaker 04: the board here may be read idle free too aggressively in this decision. [00:29:52] Speaker 04: And there does seem to be a conflict, we would acknowledge there would be a conflict between this board decision and what was said in master image. [00:30:01] Speaker 04: Because we're not saying that, we're not making any allegations against Nike that they violated their duty of candor. [00:30:09] Speaker 04: Now with the added clarification of master image, [00:30:17] Speaker 04: it becomes clear that the patent owner has no really affirmative duty to perform a search or submit prior art beyond what is required by the duty of camp. [00:30:30] Speaker 05: OK. [00:30:31] Speaker 05: So as I understood it, there were two independent grounds for denying the motion to amend. [00:30:36] Speaker 01: Correct. [00:30:36] Speaker 05: One was idle free, and the other one was on the merit these amended claims would still be obvious. [00:30:45] Speaker 05: Correct. [00:30:47] Speaker 05: If we were to conclude that there was a defect in the 103 analysis of the amended claims because there was a failure to consider the secondary consideration evidence, then not only would we have to vacate that ground for denying the motion to amend, but would we vacate or would you be fine if we reversed the other ground for denying the motion to amend given [00:31:18] Speaker 05: what you just told us about your understanding of Master Image 3D. [00:31:23] Speaker 04: I believe that if the obviousness finding is vacated and the case is being sent back to the board, I think vacating and remanding on the Master Image issue is appropriate and letting the board kind of reapply [00:31:47] Speaker 04: apply the master image decision to Nike's motion. [00:31:50] Speaker 04: I think that would be the most appropriate result. [00:31:56] Speaker 05: Do you think there's a defect on a failure to consider the secondary consideration evidence? [00:32:04] Speaker 04: No, I would agree that there's no explicit analysis in the board's opinion of secondary considerations. [00:32:12] Speaker 04: I don't think anyone would dispute that. [00:32:15] Speaker 04: like Adidas talked about and like we talked about in our brief, I think that if you look at what the board said and you look at what Nike said, I mean going back to Nike's motion, I mean Nike now obviously is making a very big deal about their secondary considerations argument given the board's decision, but if you look at Nike's original motion to amend, they devote a single paragraph to this at the end and the only evidence they cite is their expert's declaration who just [00:32:44] Speaker 04: And the experts really just point to Nishida saying, well, you know, Nishida tries to reduce waste, but doesn't reduce all of the waste. [00:32:53] Speaker 04: So therefore there's this long felt need. [00:32:55] Speaker 04: I mean, I think that given the way this case really is never about secondary considerations. [00:33:01] Speaker 04: And so I think that with that backdrop, it's kind of understandable that the board didn't really focus on secondary considerations. [00:33:08] Speaker 04: But I think that given what the board said about both, you know, [00:33:14] Speaker 04: you know, saying that Nasheeda addressed the issue of reducing waste and making these the shoe uppers and given the fact that shoe slur references disclose, you know, eliminating all the extra waste in making forming the nick hats, I think it can be understood that the board considered the secondary considerations argument and did not accept it. [00:33:41] Speaker 05: Can we go to Proxycon? [00:33:42] Speaker 05: Sure. [00:33:43] Speaker 05: Mr. Fleming was saying that this panel has an open lane considering whether the statute commands that the burden of proof for the patentability, unpatentability of these claims still remains with you and the petitioner, not with the patent owner when it comes to proposed amended claims. [00:34:04] Speaker 04: I bet you're reading a proxicon? [00:34:06] Speaker 04: No, I think proxicon resolved the issue of burden of proof. [00:34:09] Speaker 04: Did proxicon do a textual treatment of the statute? [00:34:13] Speaker 04: Yeah, and I think that what Proxy John said was that the board's interpretation of 37 CFR 42.20C, which says that anyone filing a motion should bear the burden of proof in establishing the relief sought, demonstrates that a patentee filing a motion to amend bears the burden of proof. [00:34:41] Speaker 04: showing that the claims are patentable. [00:34:43] Speaker 04: I think that the court in Microsoft accepted that and agreed. [00:34:48] Speaker 05: So I think that this issue is resolved. [00:34:53] Speaker 05: When it comes to patentable distinction between two proposed claims, is that a one-way or a two-way analysis? [00:35:02] Speaker 04: I'm not sure. [00:35:10] Speaker 04: I'm not sure what you mean by one-way and two-way. [00:35:13] Speaker 05: Okay. [00:35:14] Speaker 05: Obviousness type double patenting. [00:35:15] Speaker 05: I'm just assuming that that is the mode of analysis that would apply when it comes to judging two proposed claims that are replacing one single canceled claim and then to comply with your regulation on patentable distinctness. [00:35:32] Speaker 05: This case law, it might be confusing, but sometimes we use a one-way analysis and other times we use two-way analysis. [00:35:38] Speaker 05: I was just trying to [00:35:40] Speaker 05: understand if the agency has a position. [00:35:43] Speaker 04: I honestly, I mean in this case we don't have a position on this. [00:35:45] Speaker 04: It wasn't addressed in the board decision really. [00:35:48] Speaker 04: It wasn't addressed in our briefing. [00:35:49] Speaker 04: Okay. [00:35:50] Speaker 01: I wanted to ask you a question going back to a master image. [00:35:53] Speaker 01: Sure. [00:35:53] Speaker 01: So if Nike has satisfied its duty as candor, then is the statement that it has in its motion to amend, does that satisfy master image? [00:36:04] Speaker 04: I think it would. [00:36:05] Speaker 04: I mean, I agree with the DSS council that Nike's motion is a little ambiguous because it seems like there may be some art out there that it knows about, but it's not disclosing it. [00:36:16] Speaker 04: But I wouldn't go so far as to say that Nike's violating its duty of candor. [00:36:20] Speaker 04: I think it's implied that everyone who practices before the office has a duty of candor. [00:36:28] Speaker 04: And I don't necessarily know that you need an affirmative statement saying, yes, I comply with my duty of candor. [00:36:34] Speaker 04: I mean, given Nike's statement, it may be that they know of something that they didn't disclose, but I'm not going so far as to saying that that's what happened. [00:36:45] Speaker 05: I'm sorry. [00:36:45] Speaker 05: I just remembered another question. [00:36:47] Speaker 05: Teva, Standard Review of Claim Construction. [00:36:50] Speaker 03: Yes. [00:36:52] Speaker 05: Do you agree that there are times where the patent board is relying on extrinsic evidence, and then when it does, then therefore [00:37:02] Speaker 05: when we are reviewing the patent board's claim construction, we're supposed to somehow divine which components of that claim construction rested on extrinsic evidence, and to the extent it does, then we're supposed to give some extra deference beyond the broadest reasonable construction analysis that we do. [00:37:25] Speaker 04: I believe that this court has applied the TEVA standard to appeals from board cases, so I would think that [00:37:32] Speaker 04: If the board is relying on extrinsic evidence, then it's entitled to the extra deference just like from a district court case. [00:37:41] Speaker 04: How that squares with the broadest reasonable interpretation. [00:37:44] Speaker 04: To be honest, I'm not sure. [00:37:50] Speaker 04: It's tough because they're really two different standards. [00:37:57] Speaker 04: The broadest reasonable interpretation is how the board [00:38:01] Speaker 04: reads the claims before them and how the examiner reads the claims before him. [00:38:06] Speaker 04: The TEVA standard is going towards how much deference you give the board interpretation, so they're really two different things, I think. [00:38:15] Speaker 04: But I agree that this court has applied TEVA to review of board decisions. [00:38:23] Speaker 05: Okay, thank you. [00:38:28] Speaker 05: I mean, we will certainly restore all of your rebuttal time. [00:38:32] Speaker 02: Very kind, Your Honor. [00:38:33] Speaker 02: Thank you very much. [00:38:33] Speaker 02: I will try not to use all of it, or at least no more of it, than the circumstances would require. [00:38:38] Speaker 02: To start with Proxycon, on page 24 of the SLIP opinion, this court says, Proxycon does not argue that the PTO acted outside its statutory authority in promulgating either one, and namely either of the regulations that were being asserted by Proxycon in that case. [00:38:54] Speaker 02: So there is no statutory decision, no parsing of statutory language, and proxy conduct simply wasn't raised. [00:38:59] Speaker 02: It's open to this court to consider that in this case, and we think it should. [00:39:03] Speaker 02: And I didn't hear any argument on the other side that Section 316E can be interpreted in any way other than the way we were advancing. [00:39:10] Speaker 02: Just to back up, I mean, I think if this court were to affirm a decision like this, it would send a somewhat remarkable message to the board. [00:39:17] Speaker 02: It would suggest that the board can completely ignore properly presented evidence of secondary consideration. [00:39:23] Speaker 02: And it would say that no matter what errors it makes, they can always be backfilled by counsel for the petitioner or counsel for the government on appeal in front of this court. [00:39:32] Speaker 02: That is not the system that Congress created. [00:39:34] Speaker 02: It's not consistent with the patent law or with administrative law, and this court shouldn't countenance it in this case. [00:39:39] Speaker 02: Just in terms of brief response to some of what you heard, a lot of Mr. Stockwell's arguments about what Nasheeda does or doesn't disclose, whether there was or was not a long-felt need, [00:39:48] Speaker 02: whether it was or was not solved by Schussler, these are issues on which the board has not made a finding. [00:39:53] Speaker 02: And it would not be appropriate for this court under Chenery, and Comiskey doesn't change this, when there is fact finding that is needed by the board, it is not for this court to substitute its own judgment. [00:40:04] Speaker 02: Rather, it's to remand to the board and allow them to exercise their congressional mandate to make the factual findings that are needed. [00:40:11] Speaker 02: And on the point of Teva, all of the alternative arguments that Adidas is trying to put in front of this court require some kind of fact-finding or require the overturning of fact-finding that the board has already made on the issues that it resolved in Nike's favor. [00:40:24] Speaker 02: For instance, with respect to the claim construction and the anticipation points, the idea that there is a structural difference between omitting stitches or flat-knit edges and punching out holes or cutting the edges so that the yarns get frayed. [00:40:37] Speaker 02: That is a finding the board makes on a 21, I believe. [00:40:41] Speaker 02: And in order for this court to reverse that, that would be a violation of the Cheney doctrine we would submit. [00:40:46] Speaker 02: I have one question for you. [00:40:47] Speaker 02: Yes, Judge. [00:40:48] Speaker 01: Beyond the long felt need, was there other secondary consideration that was evidence that was presented to the board? [00:40:54] Speaker 02: That is the one we relied on, Your Honor. [00:40:56] Speaker 02: I mean, there is some evidence of industry praise about how Flynet is a revolutionary product in the field, but we don't rely on that as a secondary consideration. [00:41:05] Speaker 02: Long felt need is the most important one. [00:41:06] Speaker 02: And there was no answer to the Leo pharmaceutical point, Judge Chen, that you raised quite pointedly. [00:41:11] Speaker 02: There is a significant age gap in the references in this case and the idea that you could simply combine these references without any evidence and without any explanation at least as to why this reference sat around for 60 years and nobody thought of doing it this way until Nike did it this way is certainly something the board at the very least needs to consider. [00:41:32] Speaker 02: The admission that Nigel Glantlefree was read to aggressively in this case is welcome. [00:41:36] Speaker 02: We certainly agree. [00:41:37] Speaker 02: That's not an alternative basis for affirmance anymore. [00:41:40] Speaker 02: And I also think Your Honor is quite right that figure two of Nasheeda simply does not show lace holes. [00:41:45] Speaker 02: It could have, but it doesn't. [00:41:47] Speaker 02: So we would submit that as for all the claims, the judgment should be reversed or at the very least vacated and remanded to the Board for further proceedings. [00:41:53] Speaker 02: And I thank the Court for its attention. [00:41:55] Speaker 05: Thank you.