[00:00:09] Speaker 03:
Yeah.

[00:00:39] Speaker 01:
The next case is red line detection versus star and virotech 2015 1047 and 1048.

[00:00:49] Speaker 05:
We'll hear from Mr. Newbolts.

[00:00:54] Speaker 05:
Newbolts.

[00:00:55] Speaker 01:
Please proceed.

[00:00:58] Speaker 05:
and again for the timing I understand that each side is going to be given 20 minutes?

[00:01:04] Speaker 01:
Yes.

[00:01:05] Speaker 01:
Okay, and I think I allocated 13 to 7.

[00:01:07] Speaker 01:
You're allocating 13 to 7.

[00:01:12] Speaker 05:
May I please report?

[00:01:17] Speaker 05:
As this Court is held, the Supreme Court is held, the trial is first and foremost a search for the truth.

[00:01:22] Speaker 05:
case we never got to the truth because the Patent Trail and Appeal Board made a plainly erroneous and highly prejudicial decision to expunge all of Redline Detections expert testimony.

[00:01:32] Speaker 05:
Expert testimony that was properly submitted by Redline under 37 CFR

[00:01:36] Speaker 05:
What prevented you from submitting the expert declaration earlier rather than relying on 42-123A?

[00:01:43] Speaker 05:
The rules don't require you to... No, no, I didn't say require.

[00:01:48] Speaker 05:
I said what prevented you from submitting that expert declaration?

[00:01:53] Speaker 05:
You said in here, it's just a question of cost allocation.

[00:01:57] Speaker 05:
Well, because at the time we filed the petition, which is three months after the IPR procedure came into place, the rules clearly said that you had the ability to submit supplemental information and you had the ability to do that one month after trial had been instituted so long it was relevant for a claim for which the IPR had been instituted.

[00:02:17] Speaker 05:
It seemed like a viable option.

[00:02:18] Speaker 05:
It was considered a viable option and... What prevented you?

[00:02:26] Speaker 05:
uh... you understand my question don't you yeah i do understand your question your honor and uh... the the rationale was one of the cost savings was primarily driving the fact that it was a new procedure and we believe we could get the information you could have done

[00:02:39] Speaker 05:
Yes, we could have done it.

[00:02:42] Speaker 05:
But 123A expressly states that earlier availability is not a reason for denying the entry of supplemental information.

[00:02:48] Speaker 05:
123A has two requirements that the request may be made within one month after the trial was instituted and that the evidence be relevant to a claim for which the

[00:03:01] Speaker 06:
The regulation states the requirements for filing a motion, though.

[00:03:06] Speaker 06:
It doesn't state the requirements for granting a motion.

[00:03:10] Speaker 06:
The board still has the discretion, doesn't it?

[00:03:13] Speaker 06:
It has discretion under B and C. So your view is under A, as long as you meet the filing deadline and it's relevant, the board has to take whatever.

[00:03:23] Speaker 05:
It limits their discretion because as the court said in Hernandez, the courts are bound to follow their own rules.

[00:03:30] Speaker 06:
Where in the rules does it say,

[00:03:33] Speaker 06:
Once these two conditions are met, the motion must be granted.

[00:03:37] Speaker 05:
In our particular case, Your Honor, the earlier availability was a reason for not allowing the evidence in.

[00:03:44] Speaker 05:
That was a reason.

[00:03:45] Speaker 05:
That was a reason that is in 123B and 123C and not in 123A.

[00:03:50] Speaker 05:
It was intentionally omitted.

[00:03:52] Speaker 06:
and the USPTO in its comments basically said that if you don't present evidence at the time... So your view is, if you meet the time deadlines and it's relevant, you can dump as much material on the PTO as you want and they have to accept it.

[00:04:06] Speaker 05:
The timeliness won't be a factor.

[00:04:09] Speaker 05:
There's other reasons for denying it.

[00:04:12] Speaker 05:
If it raises new grounds, which our information did not do, the interest of... So you can restructure the whole procedure, as you wish.

[00:04:22] Speaker 05:
know your honor because comment 91 the office of the directors own comments say that your penalty for not introducing evidence at the at the filing of the petition

[00:04:34] Speaker 05:
Your penalty is the IPR not being instituted, not the exclusion of the testimony.

[00:04:40] Speaker 05:
The entire purpose of the rule is to allow evidence to come in after the IPR has been initiated.

[00:04:46] Speaker 01:
The rule relates to supplemental information.

[00:04:49] Speaker 01:
This was more than information, wasn't it?

[00:04:53] Speaker 01:
This is argument related to grounds.

[00:04:58] Speaker 05:
The rules say that supplemental information is defined as evidence that a party intends to rely on to support its case.

[00:05:06] Speaker 05:
That's what supplemental... Our expert testimony is information... Exactly what did it supplement?

[00:05:12] Speaker 05:
It basically was expert testimony that went directly to the two grounds... You knew it was expert testimony.

[00:05:18] Speaker 05:
What prior information did it supplement?

[00:05:21] Speaker 05:
It basically was expert testimony by one of the world's foremost authorities on EVAP testing that the grounds upon which the IPR was instituted, the combination of the... And what prior evidence did it supplement?

[00:05:34] Speaker 05:
It was basically expert testimony... It was the novel evidence, was it not?

[00:05:39] Speaker 05:
Excuse me?

[00:05:40] Speaker 05:
It was new.

[00:05:41] Speaker 05:
It wasn't supplemental.

[00:05:42] Speaker 05:
Supplemental evidence is defined as evidence that a party submits in support of its case.

[00:05:48] Speaker 05:
That's...

[00:05:50] Speaker 05:
And so everything that you submit is supplemented.

[00:05:54] Speaker 05:
Well, either according to the rationale, if you have to submit everything at the time of the filing of the petition, that's not what the rules state.

[00:06:02] Speaker 05:
The rules state there's an exact... You can supplement it.

[00:06:06] Speaker 05:
So what are you supplementing?

[00:06:07] Speaker 05:
I'm supplementing our initial arguments and the... What evidence are you supplementing?

[00:06:12] Speaker 05:
I am submitting the rationale of or the expert testimony of an expert that substantiates red lines of grounds by claims not... What, listen to the question.

[00:06:20] Speaker 05:
What evidence are you supplementing?

[00:06:24] Speaker 05:
Not argument.

[00:06:25] Speaker 05:
What evidence are you supplementing?

[00:06:28] Speaker 05:
I'm supplementing our initial filing, our petition, our price, our commission.

[00:06:35] Speaker 05:
Expert testimony is evidence, your honor.

[00:06:37] Speaker 05:
What expert testimony are you supplementing?

[00:06:40] Speaker 05:
I'm sorry, the expert testimony is the supplementation.

[00:06:44] Speaker 05:
Our petition set forth what evidence, listen again, what evidence are you supplementing?

[00:06:51] Speaker 05:
The prior patents that were submitted along with our petition and the motivation to combine.

[00:06:57] Speaker 06:
And when the trial... What evidence on the motivation to combine did you submit in connection with the initial filing?

[00:07:06] Speaker 06:
we submitted the prior references in the prior references can't be in themselves motivation to combine can they?

[00:07:13] Speaker 05:
when the board granted our petition they did say there was motivation to combine these references the board actually said in granting two of the twelve grounds let me ask you this another way this is a regulation of the board do you think it's plain?

[00:07:35] Speaker 06:
I guess.

[00:07:36] Speaker 06:
I mean, under your interpretation, anything that comes in within a month and is relevant has to come in.

[00:07:44] Speaker 06:
That's what the rules, when they publish the rules and the USPTO directors come in, if it's relevant and it's timely... So your view is that this not only sets time limits on you, it sets the conditions for granting that, even though it doesn't say that's the conditions for granting the motion.

[00:08:02] Speaker 06:
what it says for the criteria right but it doesn't say the board has to grant that seems to be a whole left for the board to interpret okay and if that's the case then don't you lose because then we're under a very deferential standard where we defer to the board's interpretation of its own rules no your honor because the problem that you have here why this case is so important you have different panels of the board applying different criteria

[00:08:30] Speaker 05:
as to whether or not to allow us information under 123A.

[00:08:34] Speaker 05:
We cited the cases in our brief.

[00:08:36] Speaker 05:
Well, you cited cases that involved supplemental information.

[00:08:40] Speaker 05:
Yes, Your Honor.

[00:08:42] Speaker 05:
It was a supplement to prior evidence.

[00:08:45] Speaker 05:
But the problem, your honor, is that those panels of the board, we were not allowed, Art Evanson came in because the board said you had to... In Pacific, you cited Pacific Market.

[00:08:57] Speaker 05:
Yes, exactly.

[00:08:58] Speaker 05:
In Pacific Market, there was a 68 page declaration with claim charts, right?

[00:09:05] Speaker 05:
Isn't that true, initially?

[00:09:06] Speaker 05:
Yes.

[00:09:08] Speaker 05:
Okay.

[00:09:08] Speaker 05:
The supplemental evidence was a 10 page declaration.

[00:09:11] Speaker 05:
that refines the existing expert opinion, right?

[00:09:16] Speaker 05:
Yes, Your Honor.

[00:09:17] Speaker 05:
Okay.

[00:09:18] Speaker 05:
That's supplementing existing evidence, is it not?

[00:09:22] Speaker 05:
It is, it's supplementing, but Your Honor, the definition of supplemental information as used by the Board, it's evidence that you bring in after the initiation.

[00:09:31] Speaker 05:
It's not, it's not defined as supplementing, Your Honor.

[00:09:33] Speaker 05:
It's defined as new evidence that is brought in to the case to support your case.

[00:09:39] Speaker 05:
And so all your evidence is supplemental.

[00:09:43] Speaker 05:
with respect to our expert testimony, if we were... Let me rephrase that.

[00:09:47] Speaker 05:
All evidence is supplemental under your analysis.

[00:09:51] Speaker 05:
Evidence that is submitted after the initiation of an IPR.

[00:09:55] Speaker 05:
Why on earth would I submit anything beforehand?

[00:09:59] Speaker 05:
It gives me a tremendous opportunity to sin bed.

[00:10:02] Speaker 05:
Because then your penalty is, Your Honor, is that your IPR doesn't get initiated.

[00:10:07] Speaker 05:
You don't get the peak that your office of the director said.

[00:10:11] Speaker 05:
Your penalty of withholding information is that the IPR is not instituted.

[00:10:15] Speaker 05:
It's not you are foreclosed from introducing evidence later on.

[00:10:20] Speaker 05:
That's what the comments expressly state that.

[00:10:22] Speaker 05:
They took that into consideration in the published rulemaking and public comments.

[00:10:26] Speaker 05:
They took that into consideration and they said,

[00:10:29] Speaker 05:
If you want to withhold intentionally, intentionally withhold information, you can do that.

[00:10:34] Speaker 05:
Your consequence is going to be your IPR is not initiated.

[00:10:41] Speaker 01:
This pattern was granted originally.

[00:10:45] Speaker 01:
The main reference, William, was cited.

[00:10:49] Speaker 01:
And we have this re-examination system to give the Patent Office a second crack at it.

[00:10:55] Speaker 01:
And there was a request for re-examination.

[00:10:58] Speaker 01:
It was granted.

[00:11:00] Speaker 01:
A new art was cited, and the claims were narrowed, and patent was confirmed.

[00:11:06] Speaker 01:
And then there was a second re-examination, a third.

[00:11:10] Speaker 01:
The third examination, so this patent now has been essentially granted three times by the patent office and you're asking us to send it back for a fourth.

[00:11:21] Speaker 01:
Isn't there an end to re-examination in the patent office?

[00:11:26] Speaker 05:
Your honor, excellent question.

[00:11:27] Speaker 05:
The problem is when this case was filed prior to November 1999, the only viable option that we had was ex parte re-examination.

[00:11:37] Speaker 05:
We couldn't do inter-parties re-examination.

[00:11:41] Speaker 05:
We had to basically go through the ex parte process.

[00:11:44] Speaker 05:
We think some of the egregiousness statements were made in the second re-examination, but there was nothing we could have done procedurally.

[00:11:51] Speaker 05:
Could we have been involved in an inter-parties process where we were involved to be able to dispute and have our input as part of the proceedings?

[00:12:00] Speaker 05:
Because by law, we were prevented from pursuing any kind of inter-parties process.

[00:12:05] Speaker 05:
That was the only alternative that we had.

[00:12:07] Speaker 05:
So we had to pursue that.

[00:12:09] Speaker 05:
And when the IPR, we'd been sued.

[00:12:13] Speaker 05:
And then we went to pursue the IPR, like all the other practitioners, thinking that this was a new procedure.

[00:12:21] Speaker 01:
Do you want to spend any time on the merits?

[00:12:24] Speaker 01:
Excuse me?

[00:12:24] Speaker 01:
Do you want to spend any time?

[00:12:26] Speaker 05:
Yes, OK.

[00:12:27] Speaker 05:
Because this case is also about the obviousness

[00:12:33] Speaker 05:
analysis made by the board.

[00:12:36] Speaker 05:
And we believe that the board committed legal error in not conducting an appropriate obviousness analysis under KSR and the court's precedent under rental manufacturing.

[00:12:46] Speaker 05:
At no time did the board in its final decision ever discuss the common sense or creativity of a person's skills in the art.

[00:12:53] Speaker 05:
Creativity and common sense are not mentioned anywhere in the board's final written decision.

[00:12:58] Speaker 05:
And as the score is held, the tests are obvious.

[00:13:01] Speaker 05:
This not only permits, but requires consideration of common sense and common knowledge.

[00:13:07] Speaker 05:
And that failure alone is failure of the reversible error under KSR.

[00:13:11] Speaker 05:
And not only did the board fail to consider common sense or creativity,

[00:13:14] Speaker 05:
The board failed to consider the prior art in the context of the background knowledge that the person of ordinary skill would have had with respect to the use of inert gases and vaporized oil to make smoke for a wide variety of applications, including leak detection.

[00:13:28] Speaker 05:
The Gilliam reference that we submitted with our petition taught all of the underlying structure to perform the claimed invention.

[00:13:37] Speaker 05:
Smoke-producing chamber vaporizing oil into smoke using that smoke to detect leaks in automotive systems.

[00:13:43] Speaker 05:
The VacuTech reference, which refers to the use of the Gilliam machine, looking at the totality of the arc, shows the actual use of the Gilliam machine for use in EVAP testing with the fuel tank.

[00:13:54] Speaker 05:
Both the VacuTech and Gilliam references talk about the risk of flammability and explosion.

[00:14:02] Speaker 06:
It seems to me that you have a pretty good obviousness argument but the problem for me is the board ruled against you and that's a factual finding at least on the motivation that combined that we review on a very deferential standard.

[00:14:17] Speaker 06:
Why isn't STARS expert testimony substantial evidence to support the board's conclusion?

[00:14:23] Speaker 05:
Because this appeal is based on legal error, Your Honor.

[00:14:25] Speaker 05:
The legal error is based on not rendering a proper obviousness analysis under KSR and Randall Manufacturing.

[00:14:33] Speaker 05:
Because KSR requires that creativity and common sense be taken into consideration.

[00:14:38] Speaker 05:
That's not reflected.

[00:14:39] Speaker 06:
Well, how do we know that?

[00:14:41] Speaker 06:
The board doesn't have to do kind of a rote check-off of, I consider this, I consider this, I consider this, I consider common creativity.

[00:14:50] Speaker 06:
We assume they've applied KSR unless their opinion is clearly to the opposite, and I don't see that.

[00:14:58] Speaker 06:
And so if we assume that there's no legal error and we're up to substantial evidence question, then isn't STARS expert testimony enough?

[00:15:06] Speaker 05:
Well, the fact that you're having that, if you're going to have this case decided on unrebutted testimony when there was actual evidence rebutting that testimony that was not allowed to come to the record, I mean, sure, it makes it one-sided, but that's your procedural problem.

[00:15:26] Speaker 05:
But then you're having the case decided on procedure as opposed to the merits.

[00:15:29] Speaker 05:
That goes against everything the trial is about.

[00:15:31] Speaker 05:
It's about the truth and getting the evidence.

[00:15:33] Speaker 05:
Really?

[00:15:33] Speaker 05:
Yes.

[00:15:34] Speaker 05:
So the rules of evidence don't matter, the rules of civil procedure don't matter in a trial?

[00:15:40] Speaker 05:
Absolutely.

[00:15:42] Speaker 05:
In fact, the rule that we're talking about... But you're saying that that goes against everything about how a case should be decided.

[00:15:50] Speaker 05:
Rules matter, do they not?

[00:15:52] Speaker 05:
The rules of evidence 401, relevance, that's the cornerstone of what this information that we're trying to get in, our expert testimony, that the fact that it was brought in under rules that expressly allow that information to be brought in after trials initiated.

[00:16:10] Speaker 05:
That's your problem.

[00:16:12] Speaker 05:
You think that maybe we don't.

[00:16:14] Speaker 05:
Well, because you're using procedural grounds to decide this case on the merits and that, and you're excluding substance of expert testimony when there's an express rule that allows that evidence to come in.

[00:16:24] Speaker 05:
Supposing the court had ruled that the evidence that you were presenting had been improperly denied in discovery and hadn't been produced and entered a sanction against you under 37 B2C.

[00:16:44] Speaker 05:
uh... that would affect the merit that outcome of the case would it not be sanctioned and you're talking about the I'm talking about in a district court case since we're doing it by now then you would have to look at an underlying basis for the sanction and you'd go through a due process uh... procedure that goes to you can't just sanction somebody in a vacuum so it's whether or not the situation the circumstances warranted that being the case

[00:17:08] Speaker 05:
And so, to answer your question, if there is a fact scenario where that is the only remedy, like for default judgment, for example, it's like you never get to the merits just because the other party didn't show up, you bend over backwards to at least have that person show up and be at least able to give their side of the story.

[00:17:28] Speaker 05:
That's what due process is all about.

[00:17:29] Speaker 05:
And your particular... My analogy is a little closer though.

[00:17:33] Speaker 05:
Well, in this particular case, twofold.

[00:17:38] Speaker 05:
One, because we had expert testimony, we submitted that.

[00:17:41] Speaker 05:
It didn't raise any new grounds.

[00:17:43] Speaker 05:
It was followed exactly why the Rule 42123 was enacted.

[00:17:50] Speaker 05:
That's precisely the procedure we chose to follow three months after the whole procedure became available.

[00:17:58] Speaker 05:
And now you have different panels of the board applying different criteria as to when that information comes in.

[00:18:05] Speaker 05:
I'm going back to, actually, for the Palo Alto Networks and the Pacific Market International.

[00:18:15] Speaker 05:
Granted, you're trying to distinguish.

[00:18:16] Speaker 05:
I know the PTO and STAR has gone to great lengths to distinguish those cases based upon the type of evidence.

[00:18:23] Speaker 05:
But the problem is those cases, Your Honor,

[00:18:26] Speaker 06:
Then they applied criteria discretionary regulation that allows them to decide what evidence or not And if they do decide in one case to let stuff in and they don't decide to let it in in another case Then they get to do that and you may argue that it's an abuse of discretion, but you can't argue that it's legally Yes, your honor.

[00:18:46] Speaker 05:
I can because two reasons one different different criteria is being applied then it's arbitrary and capricious and

[00:18:54] Speaker 06:
If it's a plain... Well, okay, you could argue that it's arbitrary and capricious, but that's about as high of a standard review as abuse of discretion.

[00:19:02] Speaker 06:
I think we would be very hard pressed to find that the board's projection of this evidence here was arbitrary and capricious.

[00:19:09] Speaker 05:
Well, I would say, your honor, due to the court's ruling, recent ruling in June in Microsoft versus Proxycon, the standard was interpreting a rule was plain error and an inconsistent interpretation of the rule.

[00:19:23] Speaker 01:
and bulls would you like to say the rest of my you know I would have only one thing I'm gonna just mention here your honor said that but also radio manufacturing taking all the art and going to the merits and I would say that for rebuttal thank you all right Mr. Babcock you'll take 15 minutes and give the Patna office five yes your honors good morning and may it please the court I think Judge Wallach's first question

[00:19:51] Speaker 04:
put the finger right in the nub of the issue here, which is this was petitioner's strategic choice.

[00:19:57] Speaker 04:
This was a strategy call to try to, and it's a pejorative word, but you use it, you understand that, the patenot.

[00:20:05] Speaker 03:
I think I used it in the hypothetical.

[00:20:07] Speaker 04:
In the hypothetical.

[00:20:07] Speaker 04:
I'll use it without trying to be offensive, in a sense, where certainly council would like to present their evidence as late as possible to provide a disadvantage to the patenot, and that's exactly what happened here, and it didn't work.

[00:20:22] Speaker 04:
Because the evidence didn't come in, yes it was a one sided decision for the board, correctly so.

[00:20:30] Speaker 04:
The board wasn't going to replace its own analysis of the art, its own views of what the person of skill in the art would normally understand, what would have been obvious.

[00:20:39] Speaker 04:
The board did what it should have done, which is it weighed the evidence that was of record, and the evidence was completely skewed.

[00:20:47] Speaker 04:
The only evidence of record was that the claims were not demonstrated to be unpatentable.

[00:20:55] Speaker 04:
Here the board made a decision on a Rule 123A.

[00:20:59] Speaker 04:
I think Judge Hughes, you're correct, this is a discretionary call.

[00:21:03] Speaker 04:
And the question here for this panel isn't to try to draw a line about what's permissible and what's impermissible under 123A.

[00:21:11] Speaker 04:
The question here is, did the board abuse its discretion in allowing or denying the motion to have this particular piece of evidence excluded from the evidence?

[00:21:23] Speaker 04:
And this case,

[00:21:24] Speaker 04:
is an extreme case.

[00:21:26] Speaker 04:
This is not even a close call where you say, well, there's issues going both ways.

[00:21:31] Speaker 04:
This is about... Sure.

[00:21:32] Speaker 05:
If they had submitted a 10-page declaration and a 60-page supplement, it might be an argument.

[00:21:40] Speaker 04:
I think the specific case that we've discussed is a closer case.

[00:21:43] Speaker 04:
I'm not sure it was decided correctly.

[00:21:44] Speaker 04:
That's not an issue here, but at least there you had some supplementation going on.

[00:21:48] Speaker 04:
You had an initial declaration that was submitted.

[00:21:51] Speaker 04:
But here there's only one testimonial evidence submitted by the petitioner.

[00:21:55] Speaker 05:
I reversed the numbers from Pacific.

[00:21:57] Speaker 04:
Okay.

[00:21:57] Speaker 04:
Was it 10 and 60?

[00:21:59] Speaker 05:
It was 60 and 10.

[00:22:01] Speaker 04:
Right, right.

[00:22:02] Speaker 03:
And I'm saying if it had been 10 and 60.

[00:22:03] Speaker 04:
That may be a tougher case.

[00:22:05] Speaker 04:
But that's not here.

[00:22:06] Speaker 04:
That's not the case today.

[00:22:07] Speaker 04:
Here was a 61 page declaration longer than 60.

[00:22:09] Speaker 04:
Here is zero.

[00:22:10] Speaker 04:
Pardon me?

[00:22:11] Speaker 04:
Here is zero.

[00:22:12] Speaker 04:
Exactly, Your Honor.

[00:22:14] Speaker 04:
And it's not even submitted two months late or three months late.

[00:22:18] Speaker 04:
It's submitted

[00:22:20] Speaker 04:
seven months into the proceeding, 28 days within the 30-day window.

[00:22:25] Speaker 04:
It's the only evidence they submit of any testimonial record.

[00:22:30] Speaker 04:
So in this situation, you've got an extreme set of facts, and the question is, did the board abuse his discretion to say this is too extreme?

[00:22:37] Speaker 04:
And the answer is, the board certainly had his discretion to do that.

[00:22:41] Speaker 06:
Now, I think the- Can I ask you about the merits?

[00:22:43] Speaker 06:
I mean, it is a substantial evidence.

[00:22:47] Speaker 06:
and it seems to me that you probably have enough with expert testimony if we look at this substantial evidence question.

[00:22:55] Speaker 06:
I'm a little troubled by the way the board applied KSR and random manufacturing here.

[00:23:00] Speaker 06:
Because it seems to me that Gilliam teaches almost every single element of his claim except for the inner gap.

[00:23:08] Speaker 04:
Not so, your honor.

[00:23:09] Speaker 04:
And here's the key.

[00:23:10] Speaker 04:
And I'll put it simply.

[00:23:12] Speaker 04:
The prior art, every one of the prior art, and our expert made this very clear, understood that to create smoke, you needed fire.

[00:23:19] Speaker 04:
Whether smoke or fire, you needed combustion, you needed air.

[00:23:22] Speaker 04:
I'm glad you said that.

[00:23:24] Speaker 04:
You needed air.

[00:23:26] Speaker 05:
I'm glad you said where there's smoke, there's fire.

[00:23:29] Speaker 05:
I was waiting for somebody.

[00:23:30] Speaker 04:
I think we actually said that to the board, which is a simple way of saying the reason that this was an invention was something relational.

[00:23:38] Speaker 04:
You can create smoke without combustion, without air.

[00:23:42] Speaker 04:
Both the Polly and Stoil, the prior references,

[00:23:45] Speaker 04:
They created smoke using oxygen, using atmospheric pressure.

[00:23:51] Speaker 04:
And of course, here in the primary reference... I'm not sure that that's right.

[00:23:55] Speaker 06:
Okay, that's your expert testimony, but it seems like there's other prior art that suggests that you can create smoke through vaporization.

[00:24:04] Speaker 06:
All of the prior art that was... Let's assume that there's other prior art that says you can create smoke through vaporization.

[00:24:13] Speaker 04:
Well, you need to do more than that.

[00:24:16] Speaker 04:
First, there's two limitations to the claim that we focused on.

[00:24:19] Speaker 04:
One is creating smoke in an inert environment.

[00:24:22] Speaker 04:
And then using that smoke and using it in an inert environment, putting it into a closed facility which is inert to prevent explosions.

[00:24:32] Speaker 04:
So none of the prior art even teaches this.

[00:24:33] Speaker 04:
You have a missing element to begin with.

[00:24:35] Speaker 04:
You don't have any situation where you have inert gas solely in an environment being tested.

[00:24:41] Speaker 06:
But this is the problem.

[00:24:42] Speaker 06:
That's where it seems to me you're requiring too much of the obvious analysis of going beyond KSR requiring a specific teaching

[00:24:50] Speaker 06:
that it be done in that specific way.

[00:24:53] Speaker 06:
Whereas if we assume that Gilliam, and I know you disagree with it, but for the purposes of this treat it as a hypothetical, assume that Gilliam has everything except an inert gas, do we have to have a specific teaching of an inert gas in an atmosphere like Gilliam, or do we just have to have a teaching that to reduce the problems of flammability, you use an inert gas?

[00:25:16] Speaker 04:
This is not enough.

[00:25:17] Speaker 06:
This is what the claim says.

[00:25:19] Speaker 06:
You have to look at the claim.

[00:25:21] Speaker 06:
The claim requires two different things.

[00:25:22] Speaker 06:
But the claim, okay, again, I don't think you're, maybe I'm not being clear or you're just not addressing the hypothetical.

[00:25:28] Speaker 06:
Gilliam has all of those elements, except an inert gas.

[00:25:32] Speaker 06:
So we don't need to go outside Gilliam.

[00:25:35] Speaker 06:
Again, treat this as a hypothetical.

[00:25:39] Speaker 06:
Because I understand you disagree about what Gilliam stands, but assume Gilliam has everything except an inert gas.

[00:25:46] Speaker 06:
Do we have, when we go outside of Gileam, don't we have teachings that show an inert gas can be used to reduce flammability?

[00:25:55] Speaker 04:
Not in this record.

[00:25:58] Speaker 06:
You know, Your Honor, and I think... I mean, Holly says, use an inert gas to reduce flammability.

[00:26:03] Speaker 06:
It does it in a different way, but we don't need the closed system because we have the closed system in Gileam.

[00:26:09] Speaker 04:
You don't have either, you don't have the closed system where you're creating the smoke,

[00:26:15] Speaker 04:
and you don't have the closed system where you're actually applying the smoke.

[00:26:18] Speaker 06:
But again, I know you don't want to answer the hypothetical because you think it's too close to the facts, but I'm assuming Gilliam has every single one of those elements, including the closed system, everything in the claim except the inert gas.

[00:26:33] Speaker 06:
Why wouldn't

[00:26:34] Speaker 06:
based upon all the references and basically common sense that you use inert gas to reduce flammability.

[00:26:40] Speaker 04:
Because you don't think you're going to get smoke.

[00:26:42] Speaker 04:
The reason you don't combine it is because you say, look, if I take the oxygen out of the system and I use only inert gas, I can't create any smoke because it can't burn.

[00:26:50] Speaker 04:
I need air to burn to get smoke.

[00:26:54] Speaker 04:
And nobody said, oh, you know what?

[00:26:55] Speaker 04:
You can create smoke without air.

[00:26:56] Speaker 04:
How do you do that?

[00:26:57] Speaker 04:
Well, that was the trick.

[00:26:59] Speaker 04:
And that was the yaha.

[00:27:01] Speaker 04:
And I appreciate the hypothetical.

[00:27:03] Speaker 06:
It's not the lack of prior art teaching inert gas to reduce flammability.

[00:27:11] Speaker 06:
It's the lack of prior art teaching the use of

[00:27:16] Speaker 06:
an inert atmosphere to produce smoke.

[00:27:19] Speaker 04:
Okay, I understand.

[00:27:20] Speaker 04:
Those are two questions, right?

[00:27:21] Speaker 04:
That's the right answer, because there's no dispute that the prior art said, oh, you can use inert gas for leak testing to actually determine a leak.

[00:27:29] Speaker 06:
So you could put it... There's no dispute that prior, everybody understands that if you use an inert gas, that reduces climate change.

[00:27:36] Speaker 04:
Right.

[00:27:36] Speaker 04:
Exactly.

[00:27:37] Speaker 04:
That was done in the prior art.

[00:27:38] Speaker 04:
And the problem with the old leak testing was that all you saw was the pressure would fall.

[00:27:43] Speaker 04:
But you don't know... So your view is what is...

[00:27:45] Speaker 06:
is not obvious is that nobody had discovered how to produce smoke.

[00:27:51] Speaker 06:
using an inert atmosphere.

[00:27:53] Speaker 04:
And Judge Laurie pointed to the re-examinations which really focused on narrowed it down to say this is what's clever is using inert gas to make visible smoke which actually makes it a lot easier to not only know you have a leak but to know where the leak is because if you don't have smoke you can't see it.

[00:28:09] Speaker 05:
Otherwise you're just seeing a pressurization.

[00:28:12] Speaker 04:
All you're seeing is a pressure drop in a big system, a complicated system, like where is it coming from?

[00:28:16] Speaker 04:
You can listen,

[00:28:18] Speaker 04:
the smoke, ah, I can look into the car and I can see it coming out.

[00:28:22] Speaker 04:
So that was what was clever here.

[00:28:25] Speaker 04:
And I don't want to suggest that the panel here should engage in a de novo review of the art and try to figure out for itself what a person of skill in the art would have thought.

[00:28:38] Speaker 04:
In fact, I said this to the board,

[00:28:43] Speaker 04:
And I did it with all due respect, and I'll say it to this panel as well.

[00:28:47] Speaker 04:
You're not a person of ordinary skill in the art, neither am I. And it's not your job to put evidence of your own views into the record.

[00:28:56] Speaker 04:
We have plenty of evidence here from a person of ordinary skill, from that perspective, from our expert.

[00:29:02] Speaker 04:
And he explains in great detail all the prior art, how it works, how it's different, why there wouldn't be a reason to combine.

[00:29:09] Speaker 04:
The board said, it's under-budded.

[00:29:14] Speaker 04:
Yes, there could have been other evidence in the record.

[00:29:17] Speaker 04:
In fact, there's three or four pages in their brief which cite testimony that wasn't in the record.

[00:29:24] Speaker 04:
I'm like, well, okay.

[00:29:26] Speaker 04:
I'm sure the panel here isn't going to get confused and start citing two evidence that wasn't in the record, but here it's just one site.

[00:29:34] Speaker 04:
It's a very easy job for this panel to say, look, it's a discretionary call from the board

[00:29:39] Speaker 04:
This is an extreme situation of facts.

[00:29:41] Speaker 04:
Of course, the board can say, this evidence doesn't come in.

[00:29:44] Speaker 04:
Now we have a situation where the evidence is all lopsided.

[00:29:46] Speaker 04:
There's only evidence supporting patentability.

[00:29:48] Speaker 04:
There's no evidence supporting.

[00:29:49] Speaker 04:
They bear the burden.

[00:29:51] Speaker 04:
The board said, if you didn't carry your burden, you don't have any evidence.

[00:29:55] Speaker 04:
So you don't even have to get it.

[00:29:57] Speaker 04:
And you shouldn't try to get into the merits and say, well, let me see if I can figure out if it would have been obvious to me.

[00:30:03] Speaker 04:
That's never been the right test.

[00:30:05] Speaker 04:
And of course, the panel here knows that that's not the right test.

[00:30:08] Speaker 04:
So I think that essentially makes it very simple for this panel.

[00:30:13] Speaker 04:
There's a couple issues in the reply brief I'd like to address, because we didn't get a chance to discuss it, and I think maybe just one or two.

[00:30:20] Speaker 04:
The theme of the reply is kind of like, gee, we didn't know.

[00:30:24] Speaker 04:
Boy, had we known then what we knew today, we would have submitted it with our petition.

[00:30:31] Speaker 04:
We would have submitted the declaration of our petition.

[00:30:33] Speaker 04:
Well, that just is an incredible argument, Your Honors.

[00:30:35] Speaker 04:
First of all, the statute itself, the enacting statute, Section 312,

[00:30:43] Speaker 04:
A3b says very plainly that evidence to be filed with the petition includes, quote, affidavits or declarations of supporting evidence or opinions if the petitioner relies on expert opinions.

[00:30:56] Speaker 04:
So I can just look at the statute and say, okay, that's where it goes with the petition.

[00:31:02] Speaker 04:
Even though the actual first petition was filed on the first day of the implementation of the AIA, September 16, 2012, we've been talking with the panel, with the board about these procedures for months, if not a year.

[00:31:15] Speaker 04:
The rules have been promulgated.

[00:31:17] Speaker 04:
There have been webinars and seminars, all kinds of stuff on the internet about how do you do this new IPR stuff?

[00:31:23] Speaker 04:
How do you submit it?

[00:31:24] Speaker 04:
What's included?

[00:31:25] Speaker 04:
Everybody knew.

[00:31:27] Speaker 04:
Petitions go with extra declarations.

[00:31:29] Speaker 04:
It goes in together.

[00:31:30] Speaker 04:
It's front-loaded.

[00:31:31] Speaker 04:
That wasn't a mystery.

[00:31:34] Speaker 04:
Everybody did that.

[00:31:35] Speaker 04:
Thirdly, this wasn't the first petition.

[00:31:38] Speaker 04:
This wasn't the government petition filed in September 16, 2012.

[00:31:41] Speaker 04:
This was over 100 petitions later.

[00:31:44] Speaker 04:
The board puts all the petitions online on their purpose system.

[00:31:48] Speaker 04:
If you aren't sure how do you put a petition together?

[00:31:50] Speaker 04:
This is my first time.

[00:31:51] Speaker 04:
What do we include?

[00:31:53] Speaker 04:
There's a hundred examples already sitting there for you to look at, and you can see that they all, not all, but most, include extra declarations.

[00:32:02] Speaker 04:
So for someone to say, I didn't know, don't fault me for not knowing, that's not a legitimate argument.

[00:32:07] Speaker 04:
At this point in time, January of 2013, we all knew you front-loaded, you don't wait until seven months into the proceedings.

[00:32:21] Speaker 04:
There's a new case that was also cited in the reply, and that case was a recent case from the board, and it's Vallejo, North America.

[00:32:30] Speaker 04:
And I just want to note that it's a similar situation as the other case we decided, where some information included

[00:32:38] Speaker 04:
It was a custodian of records authenticating some documents.

[00:32:42] Speaker 04:
It was like archive.org kind of stuff so you can say, okay, this is actually prior art.

[00:32:46] Speaker 04:
So it wasn't anything like what we're talking about here.

[00:32:48] Speaker 04:
So that case is purposely and terribly inapplicable.

[00:32:54] Speaker 04:
The issue with regards to the board's overall mandate to be efficient and cost effective.

[00:33:01] Speaker 04:
There's a discussion in the reply brief about how it was efficient and cost effective for Redline.

[00:33:08] Speaker 04:
Well, that isn't the proper standard.

[00:33:10] Speaker 04:
The test isn't whether it's efficient and cost effective for a partisan.

[00:33:14] Speaker 04:
It's for the institution.

[00:33:15] Speaker 04:
And so the board is not looking at, did this save money for Redline?

[00:33:19] Speaker 04:
It said, was this allowing this new evidence in at this late stage?

[00:33:24] Speaker 04:
How would that affect the whole proceeding, including the board and both parties?

[00:33:28] Speaker 04:
So it's kind of, again, an argument that doesn't make a lot of sense when you look at it from the board's perspective.

[00:33:35] Speaker 04:
So with that, your honors, unless you have any other questions.

[00:33:38] Speaker 05:
I just want to differ with you on one point, Councilor.

[00:33:42] Speaker 05:
That is, I think we have considerable expertise in recognizing the leaking of inert gases.

[00:33:51] Speaker 05:
At least out of argument.

[00:33:53] Speaker 04:
But with that, your honor, I'll defer it out to the Solicitor's Office.

[00:33:58] Speaker 01:
Thank you, Mr. Babcock.

[00:34:02] Speaker 01:
And in Earth means having no reactivity and no effect.

[00:34:06] Speaker 01:
And what happens here is not without effect.

[00:34:10] Speaker 01:
Mr. Helm.

[00:34:11] Speaker 02:
Thank you, Your Honor.

[00:34:12] Speaker 02:
May it please the Court.

[00:34:13] Speaker 02:
The Board has considerable discretion when controlling its docket.

[00:34:17] Speaker 02:
The Board filed in this case that Redline attempted to circumvent the rules governing Interparty's review by withholding information until after the review was granted.

[00:34:27] Speaker 02:
It wasn't just that the information could have been submitted earlier,

[00:34:31] Speaker 02:
but that waiting to submit until later disrupted the entire interparties review process.

[00:34:36] Speaker 02:
The board also concluded that Redline's supplemental information amounted to an entirely new interparties petition submitted after the fact of the board's institution decision.

[00:34:47] Speaker 02:
In light of this behavior and the nature of the proposed submission and consistent with all of the rules of 37 CFR 42, the board denied Redline's request to submit supplemental information.

[00:34:59] Speaker 02:
This is not abuse of discretion.

[00:35:02] Speaker 02:
There was no abuse of discretion in denying Redline's request.

[00:35:05] Speaker 02:
If I may, quickly, if you have any questions, of course, please, I'm happy to address them in specific.

[00:35:11] Speaker 02:
I just wanted to address a couple of issues that came up.

[00:35:13] Speaker 02:
The first is that what the board did in this case is kind of analogous to a scheduling order where you have a series of events that take place.

[00:35:24] Speaker 02:
And in the scheduling order,

[00:35:25] Speaker 02:
You can have an expert discovery that closes before the end of fact discovery.

[00:35:30] Speaker 02:
And it would be perfectly reasonable for a trial court.

[00:35:32] Speaker 02:
And the board in this case is acting in trial capacity to exclude the submission of expert testimony.

[00:35:38] Speaker 02:
And that is what the board did in this case.

[00:35:41] Speaker 02:
Again, because they're acting in this type of trial capacity, an abuse of discretion is particularly well-founded.

[00:35:48] Speaker 02:
The review of an abuse of discretion is particularly well-founded in this case.

[00:35:52] Speaker 02:
We talked about the commentary on the rules a lot.

[00:35:54] Speaker 02:
Again, I think the panel understands that those set forth a minimum requirement to file, not the requirement for it to be granted.

[00:36:02] Speaker 02:
And 42.20 puts the burden of proof always onto the person asking for the relief.

[00:36:09] Speaker 02:
And consistent with, I think, a recent case, Microsoft Toxicon, the board did put that burden onto Redline in this case.

[00:36:18] Speaker 02:
The final thing is that

[00:36:19] Speaker 02:
With cases like this, where there are minimum requirements, I think, again, this is consistent with Microsoft ProxyCon, it makes sense to give the board discretion to flesh out the meaning of those rules.

[00:36:33] Speaker 02:
And so instead of opting for what Redline proposes, which is to let everything in as long as it's timely and relevant, it makes sense to give the board the discretion.

[00:36:43] Speaker 02:
I think the board has applied the discretion very consistently in this situation to give

[00:36:48] Speaker 02:
to let things in that are actually supplemental, for example, a supplement to an existing report, a supplemental information related to whether something was actually a priori reference.

[00:37:00] Speaker 02:
And in that case, or in those cases that were cited, have been cited in this court, those trial cases from the board, I think the board has because of the wind by the wall.

[00:37:10] Speaker 02:
So unless there are any questions.

[00:37:12] Speaker 01:
Thank you.

[00:37:13] Speaker 01:
Thank you very much for asking.

[00:37:15] Speaker 01:
Mr. Newballs has a little less than two minutes for rebuttal.

[00:37:20] Speaker 05:
Yes, Your Honor.

[00:37:20] Speaker 05:
Thank you.

[00:37:21] Speaker 05:
Going back to the merits, Your Honor, the statement was made that it was not known to make smoke using an inert gas.

[00:37:28] Speaker 05:
and vaporized oil.

[00:37:30] Speaker 05:
The prior art overwhelmingly showed that, and we showed it through multiple references spanning 50 years.

[00:37:36] Speaker 05:
And per the court's precedent in random manufacturing, where you take all of the art into consideration, the 1969 aircraft engineering, Oracle disclosed smoke generators that operate on the proven system of using oil-propelled binary gas to produce a non-flammable, the non-flammability of the

[00:37:56] Speaker 05:
Smoke was appreciated for use in leak testing.

[00:38:00] Speaker 05:
There was no mention of the 1996 IFJ article that disclosed the use of a smoke machine that produces a non-flammable smoke using white oil entrained in a stream of inert propellant gas prior to the heating of the oil into smoke vapor.

[00:38:14] Speaker 05:
and the ESC rights as well.

[00:38:17] Speaker 05:
This way of making smoke was extremely well known.

[00:38:20] Speaker 05:
It was well known to those still in the art.

[00:38:22] Speaker 05:
Even the most basic level, everyone in this room knows that there's a risk that gasoline can explode.

[00:38:27] Speaker 05:
Everyone would want to avoid that.

[00:38:29] Speaker 05:
And there were various methods known in the art that did that.

[00:38:33] Speaker 05:
And simple substitution.

[00:38:34] Speaker 05:
It's a very simple substitution of materials.

[00:38:37] Speaker 05:
and that would have been readily appreciated by anyone skilled in the art.

[00:38:42] Speaker 05:
With respect to the denial of our expert testimony, again I want to emphasize the fact that 123A has a scheme.

[00:38:51] Speaker 05:
It has A, B, and C. B and C have other situations that have to be addressed with higher standards, higher showings.

[00:38:58] Speaker 05:
That is not applicable to 123A.

[00:39:00] Speaker 05:
That's what the rule says.

[00:39:02] Speaker 05:
The plain language is what we need to follow and that's what we should listen to.

[00:39:06] Speaker 01:
Thank you, Mr. Moob-Bowles.

[00:39:08] Speaker 01:
We'll take the case on her advisement.