[00:00:00] Speaker 00:
The next case is number 14, 1516, Synopsis Incorporated Against Mentorographic Corporation.

[00:00:08] Speaker 00:
Mr. Shumsky.

[00:00:13] Speaker 00:
Proceed.

[00:00:14] Speaker 02:
Good morning, Your Honors, and may it please the Court.

[00:00:16] Speaker 02:
I'm Eric Shumsky, also representing Synopsis here this morning.

[00:00:20] Speaker 02:
I'd like to try and focus principally on the anticipation argument.

[00:00:24] Speaker 06:
But before you go into that, I want to be clear.

[00:00:28] Speaker 06:
Your colleague said that in this case, you are only challenging the final written decision and not the decision to institute.

[00:00:36] Speaker 06:
Is that correct?

[00:00:37] Speaker 02:
That is correct, Your Honor.

[00:00:40] Speaker 02:
Let me make sure that I respond to what I hear to be the concern animating the question.

[00:00:46] Speaker 02:
Your Honor asked a series of questions about the adequacy of relief and whether relief in the second case, in this case, would mean that there wouldn't be APA review available.

[00:00:58] Speaker 02:
And my answer is the same one that I heard my colleague Mr. Loeb to be giving, which is the following.

[00:01:04] Speaker 02:
Our challenge is to the final written decision.

[00:01:07] Speaker 02:
To the extent the court simply spoke to Section 318 and Section 319, then there might well be something left over that would need to be decided in the APA case, if conversely, and this was the last part of what Mr. Loeb was saying,

[00:01:23] Speaker 02:
The court in interpreting section 318, the scope of this court's jurisdiction under 319, went on to look at the regulation, for instance.

[00:01:33] Speaker 06:
Why would we do that if it's only an issue about the final written decision rather than an issue about institution?

[00:01:40] Speaker 02:
Well, I'll leave this to the other side.

[00:01:41] Speaker 02:
The reason the court might do that, for instance, is that that's what the other side has advocated.

[00:01:46] Speaker 02:
The government has said

[00:01:48] Speaker 02:
In order to understand Section 318, you need to look at our regulations.

[00:01:52] Speaker 02:
So they have said the two rise and fall again.

[00:01:53] Speaker 06:
Well, is your position that even if the PTO has the discretion not to institute review with respect to all of the claims, that the final written decision has to address all of the claims, even though there was no institution decision with respect to some of the claims?

[00:02:09] Speaker 02:
No, Your Honor.

[00:02:10] Speaker 02:
Our argument has been that the two of them go together.

[00:02:14] Speaker 06:
Well, then it sounds as though you're challenging the institution decision.

[00:02:19] Speaker 02:
So let me respond in the following fashion.

[00:02:24] Speaker 02:
Yes, we say that the regulation is invalid because the two need to go together.

[00:02:29] Speaker 02:
The fact that they go together doesn't mean any less that we are challenging the final written decision under section 318.

[00:02:35] Speaker 02:
We think that the final written decision here was defective for all of the reasons that Mr. Loeb was saying, and we think that we have

[00:02:43] Speaker 02:
a valid appeal under section 319.

[00:02:46] Speaker 06:
Do you think you can challenge the institution decision by challenging the final written decision?

[00:02:52] Speaker 02:
I mean, there is an aspect of that that goes with it, your honor, but that doesn't divest the court of jury.

[00:02:57] Speaker 06:
Wait, wait, wait.

[00:02:58] Speaker 06:
What's the answer to my question?

[00:03:02] Speaker 06:
Are you saying that you can challenge the institution decision by challenging the final decision?

[00:03:09] Speaker 02:
I'm resisting only because I think that the framing of the question builds a big premise, and the challenge here is to the final written decision.

[00:03:21] Speaker 02:
The final written decision doesn't have everything that it needs to in it, and that's all we need to establish appellate jurisdiction under Section 319.

[00:03:29] Speaker 02:
Now we have said, and we've said in the APA case, that we think that as a result of Section... Yeah, but you're not answering my question, and it's, I think, important.

[00:03:38] Speaker 06:
Do you agree that you cannot address the institution decision and alleged defects in it by challenging the final written decision?

[00:03:49] Speaker 02:
So phrased, Your Honor, no, I don't agree with that.

[00:03:53] Speaker 02:
The final written decision has to contain certain things.

[00:03:56] Speaker 02:
Section 318 says what those are.

[00:03:58] Speaker 02:
Section 319 then confers on this court appellate jurisdiction

[00:04:03] Speaker 02:
to review in a circumstance where a party is dissatisfied with the final written decision.

[00:04:11] Speaker 06:
And that's exactly what- Yeah, but actually what Cuomo said, you can't challenge the final written decision based on what happened at the institution.

[00:04:17] Speaker 02:
Absolutely, Your Honor, and Acadies says the same thing too, and we agree with that.

[00:04:21] Speaker 02:
The difference here is that the final written decision has the signal defect.

[00:04:27] Speaker 02:
In Acadies, and obviously there's an aspect of this in the cross appeal,

[00:04:31] Speaker 02:
In Akades or in Quozo, someone's trying to double dip.

[00:04:34] Speaker 02:
They're trying to get something that is about the stuff of institution and challenge it in the final written decision on the theory in Quozo that it was interlocutory or on the theory in Akades that it had been addressed again.

[00:04:47] Speaker 02:
We agree with both of those cases.

[00:04:50] Speaker 02:
The absolutely critical distinction here is that it's the final written decision that's erroneous.

[00:04:58] Speaker 02:
And the reason the final written decision is the key is for the same reasons Mr. Loeb was saying, because of the need for a stoppile, because of the problem which stays, for the integrity of the system as a whole, for the reason you were saying, Judge Newman, precisely because of what Congress intended with the overall scheme.

[00:05:16] Speaker 00:
Do I remember correctly, in the institution decision, the examiner or whoever issued it didn't say, we're not going to review all the claims?

[00:05:27] Speaker 00:
I thought that that didn't appear until the final decision.

[00:05:32] Speaker 00:
Is that correct?

[00:05:32] Speaker 02:
I'm not sure that's right, Your Honor.

[00:05:35] Speaker 00:
I don't remember exactly.

[00:05:36] Speaker 02:
I believe the institution decision did, as is the custom of the office, only address certain of the claims.

[00:05:42] Speaker 00:
But I don't believe it said we're not going to address all the claims.

[00:05:47] Speaker 00:
Is that correct?

[00:05:49] Speaker 02:
I'm not sure, Your Honor.

[00:05:50] Speaker 02:
I think it may not have specifically gone the extra step and said we're not going to...

[00:05:56] Speaker 00:
If it didn't, then this debate about what's in the final, in the institution decision, perhaps is not significant.

[00:06:05] Speaker 00:
If they didn't say, yes, but there are a few claims here that we're not going to address, they remain outside of the potential estoppel.

[00:06:14] Speaker 00:
I don't remember that in the institution decision.

[00:06:18] Speaker 00:
I thought they just said that we're going to take the case because you've shown that at least one claim, whatever the

[00:06:26] Speaker 06:
They said in the institution decision, we're not instituting review as to some of these claims, right?

[00:06:34] Speaker 00:
I don't remember.

[00:06:35] Speaker 06:
They had to have said that.

[00:06:38] Speaker 02:
I confess, I mean, I'm happy to look and bring the court a citation.

[00:06:41] Speaker 02:
I don't remember the precise wording of that.

[00:06:43] Speaker 00:
That's a diversion.

[00:06:45] Speaker 02:
I do want to save a bit of time, at least, to talk about the substantive anticipation decision itself.

[00:06:52] Speaker 02:
But don't want to artificially cut short this part of the discussion.

[00:06:55] Speaker 02:
I understand this is an important and novel question in the court, obviously.

[00:06:59] Speaker 02:
It's had a number of questions about it.

[00:07:02] Speaker 06:
Go ahead to the merits.

[00:07:03] Speaker 02:
Thank you, Your Honor.

[00:07:04] Speaker 02:
So on the anticipation question, we think that there is a simple and straightforward basis to vacate and remand under fundamental principles of administrative law.

[00:07:17] Speaker 02:
And that's the simple fact that the board

[00:07:20] Speaker 02:
failed to address an argument that was made, and that was anticipation in light of Figures 16 and 18 and the accompanying disclosure.

[00:07:28] Speaker 02:
And I think it is notable that as we come to the... Did you make that argument to the Board?

[00:07:34] Speaker 02:
Yes, Your Honor.

[00:07:35] Speaker 02:
Figures 16 and 18 were all over the petition.

[00:07:39] Speaker 02:
They were specifically raised at A-181.

[00:07:42] Speaker 02:
They were further discussed at A-149-150.

[00:07:45] Speaker 06:
Did you have an expert who explained why those anticipated?

[00:07:50] Speaker 02:
No, your honor, but that's a separate question.

[00:07:52] Speaker 02:
The only argument that's been made.

[00:07:54] Speaker 06:
But you're asking us to examine this very complicated patent and decide that it's anticipatory without the benefit of any expert testimony.

[00:08:03] Speaker 02:
Well, so as the case comes to the court, the only question is whether the board improperly failed to address an argument that was made to it.

[00:08:13] Speaker 02:
And that's a sufficient basis under Motor Vehicle Manufacturers Association

[00:08:18] Speaker 02:
and the long line of Supreme Court authority to vacate and remand.

[00:08:22] Speaker 02:
So I would, Judge Dike, I want to make sure to finish responding to your question about whether we raised it, because I do want to make sure the court understands the full extent to which these figures were dealt with.

[00:08:32] Speaker 02:
So it's not only just in the petition where I indicated.

[00:08:35] Speaker 02:
It was also raised at the oral hearing at A812 and A13.

[00:08:40] Speaker 02:
A slide was given to the board, to the panel, that addressed a specific question.

[00:08:45] Speaker 02:
That's at A781.

[00:08:47] Speaker 02:
In fact, the other side was asked a question about this.

[00:08:50] Speaker 02:
I've noticed that we left that page out of the compiled appendix we submitted to the court, but that's at A832.

[00:09:00] Speaker 02:
And the board itself said that we submitted what they called at A69, a detailed claim chart.

[00:09:08] Speaker 02:
So the issue was before the board,

[00:09:11] Speaker 02:
And it suffices to vacate and remand that the board simply failed to address the question.

[00:09:16] Speaker 04:
Here's a merits question for you.

[00:09:19] Speaker 04:
Mentor says in a thread break that you can flight functional debugging addressed by 376 with Gregory's physical constraint debugging.

[00:09:30] Speaker 04:
If, as they assert, the functional simulation in Gregory is carried out at the HDL level, which is pre-synthesis.

[00:09:41] Speaker 04:
rather than at the gate level, which is post-synthesis, which is what's in the 376, how is the disclosure of Gregory sufficient to render Claims 1 and 28 of 376 invalid?

[00:09:56] Speaker 02:
So let me answer that in a couple or maybe even three different ways, Judge Wallach.

[00:10:00] Speaker 02:
So first of all, the board made no such finding.

[00:10:03] Speaker 02:
And of course, as Your Honor knows, on review of an agency decision, the court can only affirm on a basis

[00:10:09] Speaker 02:
found by the agency.

[00:10:10] Speaker 02:
The agency didn't find that, and indeed directly to the contrary, the board invalidated or held unpatentable claims five, eight, and nine, which strongly indicates that it believed the contrary to be true.

[00:10:23] Speaker 02:
So that's the first answer.

[00:10:25] Speaker 02:
Second, had the board so held under cases like American CalCAR, it would have been legally erroneous.

[00:10:32] Speaker 02:
The particular implementation or application of a reference doesn't render it anticipatory.

[00:10:38] Speaker 02:
or not.

[00:10:39] Speaker 02:
And the final answer, which we think that the court can't and shouldn't even get to, is that we actually just disagree with that.

[00:10:45] Speaker 02:
We think the disclosure of Gregory at columns one and two and then subsequently in column 11 actually does indeed talk about functional testing.

[00:10:56] Speaker 02:
But that's really, as I say, sort of three or four layers down before the court would even get to that.

[00:11:02] Speaker 02:
Now, all of that, of course, is far into the merits, and we think that the threshold question about the board's failure to address Figures 16 and 18 really is enough to vacate and remand and send this back to the board for further consideration of that issue.

[00:11:21] Speaker 00:
Okay.

[00:11:22] Speaker 00:
We can hear from the other side and save your rebuttal time.

[00:11:25] Speaker 02:
Thank you, Your Honor.

[00:11:32] Speaker 00:
OK, Mr. Miller.

[00:11:34] Speaker 05:
Good morning.

[00:11:35] Speaker 05:
May it please the court, Mark Miller, representing Mentor Graphics.

[00:11:40] Speaker 05:
To answer the court's question about the decision to institute, at Appendix A-40, the board did state that the petition is denied as to certain claims.

[00:11:51] Speaker 05:
So there was a denial as to claims in the decision, whether to institute or not.

[00:11:59] Speaker 05:
I would also like to focus in on the merits, on the anticipation issue.

[00:12:04] Speaker 06:
Before you do that, could I just be clear what's left of your cross-appeal?

[00:12:11] Speaker 06:
Do you agree that Akades bars your argument with respect to privity and real party interest?

[00:12:21] Speaker 05:
Your Honor, we agree that if Akades binds this court, which it does, then our appeal under 315D is

[00:12:29] Speaker 05:
decided under that case.

[00:12:31] Speaker 06:
Okay.

[00:12:31] Speaker 06:
And what about the Microsoft and the motion for leave to amend?

[00:12:36] Speaker 06:
Does the Microsoft case resolve the motion for leave to amend contentions?

[00:12:42] Speaker 05:
I believe you're referring to Microsoft versus Proxycon.

[00:12:45] Speaker 05:
And Your Honor, we do not believe that that case addresses the portion of the Idle 3 standard that requires the patentee

[00:12:54] Speaker 05:
to demonstrate patentability over all prior art known to the patent owner.

[00:13:00] Speaker 05:
So we do not believe that Microsoft is dispositive on the motion to amend issue.

[00:13:09] Speaker 05:
Now on the merits of the anticipation issue, we believe that the board correctly found that synopsis did not show that Gregory's temp out signal satisfies the execution status limitation in claims one and 28.

[00:13:24] Speaker 05:
This was supported by Dr. Soroside's declaration, which the board termed persuasive.

[00:13:31] Speaker 05:
And the board went beyond the express language and found looking beyond the express language and found that synopsis did not point to any disclosure in Gregory that analysis information includes execution status.

[00:13:47] Speaker 05:
Now, this is important because it addresses the issue that Mr. Shumsky made about

[00:13:53] Speaker 05:
the claim five limitation, claim five comparison.

[00:13:58] Speaker 05:
The important point there is that synopsis had arguments about figures 16 and 18 with respect to different claims, not with respect to claims one and 28.

[00:14:08] Speaker 05:
There's one sentence in the claim chart at page 181 that Mr. Shumsky referred to regarding execution stats that does nothing more

[00:14:19] Speaker 05:
then refer to the claim language uses the word execution status and figures 16 and 18.

[00:14:26] Speaker 05:
I apologize.

[00:14:29] Speaker 05:
That section does not use the words execution status.

[00:14:32] Speaker 05:
That portion of the claim chart simply refers to the figures.

[00:14:35] Speaker 05:
There's no explanation of how those figures operate to provide execution status.

[00:14:42] Speaker 06:
So your argument is they didn't raise 16 and 18.

[00:14:45] Speaker 05:
That is correct.

[00:14:46] Speaker 05:
And to the extent that they did raise them, they didn't present a sufficient argument to carry their burden before the board.

[00:14:54] Speaker 05:
Simply citing those figures in the claim chart is insufficient to carry their burden, which they have on the IPR.

[00:15:02] Speaker 00:
But if we agree with respect to anticipation, you still have the more difficult question with respect to obviousness, do you not?

[00:15:10] Speaker 05:
No, the board did not consider obviousness, Your Honor.

[00:15:13] Speaker 05:
The only question before the Patent Trial and Appeal Board was anticipation in view of Gregory.

[00:15:20] Speaker 05:
And addressing Judge Wallach's question regarding functional simulation versus physical constraint debugging, that we think is the answer to this issue on anticipation.

[00:15:33] Speaker 05:
Because in Gregory, the only functional simulation that's performed relates to the RTL.

[00:15:40] Speaker 05:
The claim calls for providing execution status using the netlist.

[00:15:45] Speaker 05:
In this case, Gregory fails to disclose any functional simulation using the netlist.

[00:15:51] Speaker 05:
And the board recognized that decision, saying that the analysis information that is in Gregory doesn't disclose execution status.

[00:16:01] Speaker 05:
At page A73, the board said, in fact, when Gregory discusses analysis, it generally refers to characteristics of the circuit

[00:16:10] Speaker 05:
such as timing and power, which are not related to execution status as we have construed that term.

[00:16:16] Speaker 05:
So you have Gregory that performs some functional simulation only on the code, only on the source code, either HDL or RTL.

[00:16:27] Speaker 05:
That's shown in Figures 1 and Figures 3 of Gregory.

[00:16:30] Speaker 05:
That's at 11.05 and 11.07 in the appendix.

[00:16:34] Speaker 05:
There is no functional simulation in Gregory with respect to the netlist.

[00:16:40] Speaker 05:
And it is the instrumentation signal in the netlist that must provide execution status.

[00:16:47] Speaker 05:
What Gregory does talk about in the context of the netlist are physical constraints such as timing and power.

[00:16:55] Speaker 05:
Those are very different than execution status.

[00:16:57] Speaker 05:
The board found that there was a difference and considered that issue when making its decision.

[00:17:04] Speaker 00:
I'm going to be sure that I understand your argument.

[00:17:07] Speaker 00:
You're saying obviousness was never argued?

[00:17:09] Speaker 00:
or just that it wasn't decided?

[00:17:13] Speaker 05:
The IPR was not instituted on obviousness.

[00:17:17] Speaker 05:
It was the only issue before the board.

[00:17:19] Speaker 00:
All that you need in an institution is the general statement that more likely than not there is one claim of this entire group, which on the preponderance standard is invalid.

[00:17:32] Speaker 00:
So now I'm looking at the

[00:17:34] Speaker 00:
entirety of the proceedings leading to the final decision, which is before us for review.

[00:17:42] Speaker 05:
And in this case, the board granted inter-parties review only on the question of whether Gregory anticipated... You're saying that the entire board proceeding is restricted by what is said by the single examiner on the decision to institute?

[00:18:01] Speaker 05:
Yes, Your Honor, that is what the board instituted on a particular basis for invalidity, in this case anticipation.

[00:18:11] Speaker 05:
And that was what was before the board.

[00:18:12] Speaker 00:
That's not in the statute, so you say that this is the correct implementation of the statute?

[00:18:17] Speaker 05:
Yes, we do.

[00:18:19] Speaker 05:
And in fact, in the petition, the petitioner had to set forth each ground on which they would ask

[00:18:27] Speaker 05:
the board to institute an IPR.

[00:18:29] Speaker 05:
In this case, the only ground on which the board instituted was anticipation.

[00:18:35] Speaker 00:
I'm talking about the grounds that were set forth, not the grounds that were granted.

[00:18:43] Speaker 05:
And then the grounds that were granted was only anticipation.

[00:18:49] Speaker 00:
So that's another distinction then that you feel is required by the statute?

[00:18:55] Speaker 05:
Your Honor, I don't believe that we've addressed that, but that would be consistent with the interpretation of the statute and the regulation that the board can institute on certain grounds and not on other grounds.

[00:19:11] Speaker 05:
So it would be consistent to institute only on grounds of anticipation.

[00:19:15] Speaker 00:
I thought, I heard you say that it wasn't a question of the grounds that was asked to be implemented on

[00:19:22] Speaker 00:
But the grounds on which the board decided in its final decision are the only grounds before us.

[00:19:29] Speaker 05:
I'm sorry.

[00:19:29] Speaker 05:
I was hearing your question.

[00:19:31] Speaker 00:
I don't want to put words in your mouth, but there is a distinction.

[00:19:35] Speaker 05:
I was hearing your question to relate to the initial determination as to whether an IPR would be instituted.

[00:19:44] Speaker 05:
But I did not understand your question to relate to the final written decision.

[00:19:49] Speaker 05:
And in that case,

[00:19:50] Speaker 05:
the final written decision only addresses anticipation, and that should be the only issue before this court.

[00:19:59] Speaker 00:
Even if other grounds were pleaded?

[00:20:03] Speaker 05:
Even if other grounds were set forth in their petition, but an IPR was not instituted on those grounds, yes.

[00:20:17] Speaker 05:
So just to go back to the issue on

[00:20:20] Speaker 05:
anticipation, the arguments were not set forth in the brief.

[00:20:28] Speaker 05:
And I'd like to point out that with respect to the distinction between claims five, where synopsis did present more argument about figures 16 and 18, and claims one and 28, those claims are different, because claim five does not have the execution status limitation.

[00:20:46] Speaker 05:
So arguments with respect to claim five,

[00:20:49] Speaker 05:
were not necessarily relevant to claims one and 28, which have the execution status limitation.

[00:20:57] Speaker 05:
Synopsis relies heavily on the QI press case, but in that case, the court was dealing with what were termed nearly identical claims.

[00:21:06] Speaker 05:
As I said, in this case, the distinction between claims one and 28 on one hand, claim five on the other is that the execution status limitation does not appear in claim five.

[00:21:21] Speaker 05:
So another point that I believe is important with regard to the discussion about Gregory in terms of demonstrating execution status is that synopsis does not indicate where in Gregory the conditions that they rely on in their brief are set forth.

[00:21:42] Speaker 05:
So the circuit in Gregory is part of a much larger circuit.

[00:21:46] Speaker 05:
Synopsis agrees with that.

[00:21:49] Speaker 05:
It's the much larger circuit that has to provide input to the circuits that they talk about in Gregory.

[00:21:56] Speaker 05:
Without those inputs and the conditions to know what happens within the circuits that are cited, there's no way to determine execution status.

[00:22:08] Speaker 05:
And Dr. Saurav said he has addressed those issues.

[00:22:11] Speaker 05:
Now, even if the circuits that Synopsys presents would have a temp out signal,

[00:22:17] Speaker 05:
which is something that is artificially added to preserve a particular portion of the circuit during optimization.

[00:22:26] Speaker 05:
Those temp out signals would be removed if the circuits in the figures cited by synopsis were subject to functional simulation.

[00:22:36] Speaker 05:
Functional simulation would not operate on those signals.

[00:22:40] Speaker 05:
They would be removed because they're redundant.

[00:22:42] Speaker 05:
The temp out signal simply connects back to itself as temp in.

[00:22:47] Speaker 05:
that signal wouldn't be used as part of functional simulation.

[00:22:51] Speaker 05:
And that makes sense because in Gregory, as I said before, functional simulation is performed only on the source code and not with respect to the net list.

[00:23:03] Speaker 05:
And again, it's the net list that appears in the claim.

[00:23:09] Speaker 05:
Now, I would offer the court one other, on a contingent motion that we have to amend, one other contingency, which is that

[00:23:17] Speaker 05:
In the district court, the district court has entered a permanent injunction based on claims 1 and 28.

[00:23:25] Speaker 05:
Claim 5 was not an issue in the district court.

[00:23:28] Speaker 05:
If this court upholds the validity of claims 1 and 28, Mentor Graphics would not push its motion to amend issues with respect to claim 5.

[00:23:39] Speaker 05:
Those issues might be relevant in the event that claims 1 and 28 are remanded and we need to consider

[00:23:47] Speaker 05:
of the contingent motion to amend before the board.

[00:23:52] Speaker 05:
Thank you.

[00:23:54] Speaker 00:
Thank you, Mr. Miller.

[00:24:08] Speaker 00:
Mr. Wyden.

[00:24:10] Speaker 03:
Thank you, Judge Newman.

[00:24:11] Speaker 03:
It may please the court.

[00:24:12] Speaker 03:
I'd like to start, if I may, with a very brief response about the motion to amend.

[00:24:16] Speaker 03:
We think that this case is governed by Microsoft eProxyCon.

[00:24:20] Speaker 03:
Just as in Microsoft eProxyCon, the board here found that on the prior art of record in the proceeding, the amended claims were not patentable and that the MedMetrographics had failed to carry its burden on that.

[00:24:34] Speaker 03:
That's what Microsoft eProxyCon said was sufficient and there's no need to reach the idle-free issue in this case.

[00:24:39] Speaker 00:
So is the position of the office

[00:24:41] Speaker 00:
that a motion to amend are, as you say in your brief, a patent owner has a statutory right to an amendment?

[00:24:50] Speaker 03:
The patent owner has a statutory right to file what is deemed, what is called a motion to amend.

[00:24:54] Speaker 00:
Yes, he said to file at least one motion to amend.

[00:24:56] Speaker 00:
Correct.

[00:24:57] Speaker 00:
Do they have a right to have the motion granted or only the right to file it?

[00:25:01] Speaker 03:
Only the right to file a motion.

[00:25:03] Speaker 00:
You don't file a motion, can't you?

[00:25:05] Speaker 00:
I mean, is that something that has to be decided by statute?

[00:25:09] Speaker 00:
So the position of the office is

[00:25:11] Speaker 00:
that there is no right to amend a claim, even a narrowing amendment, but you can file an amendment.

[00:25:20] Speaker 03:
The position of the USPTO is that the patent owner can file what is called a motion to amend in the statute.

[00:25:26] Speaker 03:
And because of that language in the statute that it's a motion to amend, the board places the burden on the patent owner to prove the patentability of the claim.

[00:25:34] Speaker 03:
If the patentability of the claim is proven by the patent owner, then that amendment will be granted, and it will become the claim in an issued patent.

[00:25:40] Speaker 00:
But by statute, it must be a narrowing amendment.

[00:25:44] Speaker 00:
So if the patentability of the claim that is being narrowed is not at issue, is there more that's needed?

[00:25:53] Speaker 03:
Well, here the petitioner was able to show that the amended claim was still anticipated by Gregory, the prior art of reference at issue for the unamended claim.

[00:26:04] Speaker 00:
OK.

[00:26:05] Speaker 00:
Motion was not granted, is that right?

[00:26:07] Speaker 03:
That's right, it was not granted because the board determined that the claim was not patentable.

[00:26:13] Speaker 00:
I thought it was not granted because of an inadequacy of evidence, of separate evidence of patentability.

[00:26:21] Speaker 00:
You're saying it was not granted on the merits?

[00:26:24] Speaker 03:
Yes, the board had alternative grounds for denying the motion.

[00:26:26] Speaker 00:
But how could it be considered if the motion, if it wasn't allowed to be entered?

[00:26:31] Speaker 03:
The board considered the merits of the motion and said,

[00:26:35] Speaker 03:
In considering the merits, it said that the patent owner had to come forward and carry its burden of showing patentability.

[00:26:41] Speaker 00:
Separate patentability, even if or when the claim which is being amended is not being challenged on whatever the ground of amendment is?

[00:26:51] Speaker 03:
It was in fact, in this case, challenged on the same ground that the original claim was challenged.

[00:26:56] Speaker 00:
Well, all the claims that were accepted at least were challenged, isn't that right?

[00:27:01] Speaker 00:
for patentability on one basis or another?

[00:27:03] Speaker 03:
They were all challenged for anticipation on Gregory alone.

[00:27:06] Speaker 03:
That was the only issue on which the board instituted the IPR.

[00:27:11] Speaker 03:
And the amended claims that Mentor sought to add to its patent were also rejected for anticipation by Gregory.

[00:27:18] Speaker 00:
OK.

[00:27:18] Speaker 00:
So there is no right to amend?

[00:27:20] Speaker 03:
No, Your Honor.

[00:27:21] Speaker 00:
OK.

[00:27:22] Speaker 03:
There's a right to file a motion, but not to amend.

[00:27:24] Speaker 03:
If I could turn now to the synopsis's appeal, I'd like to go into a little bit more detail what my friend from Mentor was saying.

[00:27:30] Speaker 03:
At page 840, the board institution decision sets forth the scope of the inter-parties review.

[00:27:37] Speaker 03:
It says, it is ordered that the petition is granted as to claims 1 through 9, 11, 28, and 29 of the patents.

[00:27:46] Speaker 03:
It is further ordered that the petition is denied as to claims 10, 12 through 15, 20 through 27, and 30 through 33 of the patents.

[00:27:55] Speaker 03:
skipping a paragraph, it says, it is further ordered that the trial is limited to anticipation by Gregory, and no other grounds are authorized.

[00:28:04] Speaker 04:
And moving forward- You may extensively discuss why they're not going to- Exactly.

[00:28:09] Speaker 03:
That's just the final, the end of the decision, but they extensively discuss why they are not instituting.

[00:28:14] Speaker 03:
And at A576, in synopsis's petitioner response to the patent owner reply, I'm sorry, the petitioner replied to the patent owner response,

[00:28:24] Speaker 03:
says that it is seeking to have the, it only asks that the board invalidate claims one through nine, 11, 28, and 29 of a 376 patent as anticipated by Gregory.

[00:28:35] Speaker 03:
That's at page 8576.

[00:28:37] Speaker 03:
So that was the grounds that were being challenged by the petitioner at the time of the oral hearing, which is the critical time in an inter-part case review where all parties have put forward their evidence and arguments and oral hearing is presented to the board.

[00:28:51] Speaker 03:
Under the APA, all parties need to know what the issues that are being challenged during the review are at that hearing.

[00:28:58] Speaker 00:
But how can that be squared with the entire way that this dramatic new structure was promoted?

[00:29:07] Speaker 00:
And that is that the experts in the office will decide validity.

[00:29:12] Speaker 00:
And now we have one retrenchment after another, one withdrawal, one restriction that no

[00:29:21] Speaker 00:
litigation can continue after all because we're only going to decide this or that.

[00:29:26] Speaker 00:
Whereas the entire operation was supposed to have expert decision of the issues of validity.

[00:29:37] Speaker 03:
It is supposed to have experts, the experts address the issues of validity on which the agency institutes inter-party review.

[00:29:45] Speaker 00:
But the challenger has to raise any issue that

[00:29:49] Speaker 00:
could or should have been raised.

[00:29:50] Speaker 00:
It isn't that they can pick and choose and put in their pocket, never mind, we'll go back and get another trial in court.

[00:29:57] Speaker 03:
Well, the estoppel provision, I believe all parties here agree that the estoppel provision does not stop the proceeding going forward on any ground that the board did not institute.

[00:30:06] Speaker 00:
On the grounds of the regulation, which says that you don't have to decide all the issues.

[00:30:12] Speaker 03:
That's correct.

[00:30:14] Speaker 00:
Whereas if that regulation, that's the APA issue, isn't it, as to whether

[00:30:18] Speaker 00:
The statute means that you must decide all the issues that are presented.

[00:30:23] Speaker 03:
Well, the statute says that the final written decision must address all issues challenged by all grounds, challenged by the petitioner.

[00:30:30] Speaker 03:
In the critical time where claims are challenged by the petitioner in an inter-parties review is as of the time of the oral hearing.

[00:30:39] Speaker 03:
So any claims that the parties have settled on and the board does not choose to go forward with under Section 317 of the statute, there's no need for the agency to address

[00:30:48] Speaker 03:
claims that have been dropped.

[00:30:50] Speaker 00:
We are told here that there were a few claims that were included in the group that were challenged.

[00:30:56] Speaker 00:
The office said we're not going to decide them.

[00:30:58] Speaker 03:
That's not the case, Your Honor.

[00:30:59] Speaker 03:
The office declined to decide the claims on which it declined to Institute Interparties Review because it determined that synopsis had not carried its burden under Section 314.

[00:31:09] Speaker 00:
I've broadened my question to the decision of the Institute.

[00:31:15] Speaker 00:
that if you institute on one claim, you can say, we're not going to institute on other claims.

[00:31:21] Speaker 00:
Go back to the district court and have your trial on those other claims.

[00:31:25] Speaker 03:
That's right.

[00:31:25] Speaker 00:
And how then, and this is really what troubles me, how can we square that with a basic philosophy that validity will be decided now, finally, with estoppel by the experts in the office?

[00:31:39] Speaker 03:
Well, anything that is decided by the office in an inter-parties review does result in streamlining

[00:31:45] Speaker 03:
of the district court litigation.

[00:31:46] Speaker 00:
And it can't be... There's still any elimination.

[00:31:48] Speaker 00:
There's an estoppel if it's decided.

[00:31:51] Speaker 00:
Either way, if the claims are sustained, that's it.

[00:31:55] Speaker 00:
They're valid.

[00:31:56] Speaker 00:
And if they're not sustained, that's it.

[00:31:58] Speaker 00:
They're invalid.

[00:31:59] Speaker 00:
And of course, if there's nothing left, there's nothing left in the district court.

[00:32:03] Speaker 00:
But if there are claims that are validated, you proceed with the infringement.

[00:32:07] Speaker 03:
Well, there often will be something left in the district court, Your Honor, and I can give two examples.

[00:32:11] Speaker 03:
One example is where there is an allegation of invalidity under Section 101 or Section 112, something that the agency cannot consider in an inter-par case review, or for the same, for that matter, art under beyond fail bar, something the agency cannot consider.

[00:32:24] Speaker 00:
It's also quite possible that a misdemeanor... Well, if it's invalidated under 102 or 103, then you can't go back and say, however, it's valid under 112.

[00:32:33] Speaker 00:
So the patentee is out of court, isn't that right?

[00:32:36] Speaker 00:
Isn't that the idea?

[00:32:37] Speaker 03:
Correct.

[00:32:38] Speaker 03:
If it is invalidated under any provision, the patent owner is out of court.

[00:32:43] Speaker 03:
But if it is found patentable over the art of record, the petitioner can still raise Section 101 ground or Section 112 ground.

[00:32:51] Speaker 03:
And there's no requirement in the statute that the petitioner challenge every claim at issue in the district court.

[00:32:56] Speaker 03:
The petitioner can challenge a subset of claims in an inter-parties review.

[00:32:59] Speaker 03:
And all the remaining claims would move forward in the district court, regardless of the inter-parties review.

[00:33:05] Speaker 00:
You know, what concerns me is that what looked on its face like an extraordinarily salutary development in reviving and revitalizing this patent system for the nation is instead being interpreted in such a way that it's worse than it was before, in which case I suppose the

[00:33:28] Speaker 00:
stature will be repealed.

[00:33:30] Speaker 03:
Well, I respectfully submit that it is not worse than it was before, Your Honor.

[00:33:34] Speaker 03:
And I think that the parties to these proceedings have shown that they are happy with the way the board is approaching it.

[00:33:40] Speaker 03:
We have very many, many petitions being filed.

[00:33:43] Speaker 03:
It seems like petitioners are happy with the way we're approaching it.

[00:33:46] Speaker 03:
And I want to make clear that Congress not only wanted the USPTO to replace aspects of district court proceedings,

[00:33:54] Speaker 03:
It also was abundantly clear that it was concerned about the agency's ability to handle these proceedings.

[00:34:00] Speaker 00:
But if you're telling us that the agency can't handle it, maybe you should tell that to Congress.

[00:34:06] Speaker 03:
We're not saying that the agency can't handle it.

[00:34:08] Speaker 03:
We're saying that Congress gave us the tools to arrange our affairs such that we could limit the number of inter partes reviews.

[00:34:15] Speaker 03:
We believe that section 42.108 of the regulations is fully permitted by the statute, and we think that

[00:34:22] Speaker 03:
The agency is allowed to go forward on a subset of issues, streamline the proceedings as it sees fit, address the issues that it thinks it can handle in one year, and resolve those issues.

[00:34:35] Speaker 00:
And so this patentee then goes back to the district court and has another trial and is just a few years, a couple of years behind the previous schedule and additional expense and doesn't have the resolution that

[00:34:52] Speaker 00:
was the plainly stated legislative purpose?

[00:34:57] Speaker 03:
Well, perhaps my friend from synopsis will be able to answer this question better than I. But my understanding is that the district court litigation is complete.

[00:35:03] Speaker 00:
Well, I'm looking at it.

[00:35:04] Speaker 00:
If the PTO's regulation is at the heart of the debate today, is it not?

[00:35:10] Speaker 03:
That's correct.

[00:35:10] Speaker 03:
But my understanding is that in this particular case, the district court litigation is already complete.

[00:35:15] Speaker 03:
So there will not be an ongoing litigation.

[00:35:17] Speaker 00:
Well, you mean the APA legislature?

[00:35:19] Speaker 00:
or the district court is going on and hasn't stayed the litigation.

[00:35:25] Speaker 00:
Perhaps that was the fairest and most just thing to do in view of the way it's being implemented.

[00:35:32] Speaker 03:
Well, the district courts aren't able to make a decision whether or not to stay.

[00:35:36] Speaker 03:
Many district courts are staying proceedings.

[00:35:38] Speaker 03:
Other district courts are not, as they see the equities sit.

[00:35:41] Speaker 03:
And the agency is moving forward with what it thinks it can handle in these proceedings in one year.

[00:35:48] Speaker 03:
and satisfied Congress's intent to have us address the issues that we think we can address within one year in these proceedings.

[00:35:55] Speaker 00:
Okay.

[00:35:55] Speaker 00:
Well, thank you for presenting the views of the Director.

[00:35:59] Speaker 00:
Thank you.

[00:36:06] Speaker 00:
Mr. Shumsky.

[00:36:08] Speaker 02:
Thank you, Your Honor.

[00:36:09] Speaker 02:
I'd like to make just one point or perhaps two about each of the three issues that I hear is remaining in the case.

[00:36:18] Speaker 02:
now that I understand privity to be conceded, and taking them in the order that they were raised.

[00:36:24] Speaker 02:
First, Judge Dyke, on the question about the motion to amend, we do agree with the Solicitor's Office that Proxycon is controlling here.

[00:36:33] Speaker 02:
There were three alternative bases for the Board's decision, and one of them doesn't even require the establishment of the burden.

[00:36:41] Speaker 02:
The Board credited Dr. Hutchings.

[00:36:44] Speaker 02:
relies on the proxicon or relies on the burden as established in proxicon, and either of those is ample to affirm that aspect of the board's decision.

[00:36:55] Speaker 02:
Second, on the question about anticipation, I heard my friend on the other side to say, and this is the same thing they said in their red brief, that with regard to figures 16 and 18, we didn't make a sufficient argument

[00:37:08] Speaker 02:
I think there are two points to be made about that.

[00:37:10] Speaker 02:
First of all, we did for all of the reasons that I mentioned earlier.

[00:37:15] Speaker 02:
The point was made over and over and over and not just at A181, but moreover, as a matter of administrative law, that really is something for the board to address in the first instance.

[00:37:26] Speaker 02:
If a point is made, but the argument is that it wasn't sufficiently made under cases like Vizio versus ITC, that's something for the agency to sort out in the first instance.

[00:37:37] Speaker 02:
Judge Wallach, the question arose again about functional constraints, and I've answered that question to your honor already.

[00:37:45] Speaker 02:
We think that the board didn't make a finding on that, certainly didn't and couldn't have made a finding on it with regard to figures 16 and 18, and in any event is wrong for the reasons I was indicating.

[00:37:57] Speaker 02:
And finally, Judge Newman, my friends on the other side are absolutely correct about what the record says that a 40

[00:38:06] Speaker 02:
the board did say quite clearly we are instituting on some things and we are not going to go ahead with institution or with a final written decision on others and the problems are exactly the ones that your honor has pointed to.

[00:38:21] Speaker 02:
We have this partial system now where district courts as SAS explained in its amicus brief are deciding to go ahead with litigation and so we have instead of what should be a simple

[00:38:34] Speaker 02:
choice of forum or election of remedies, we have the worst of all worlds in which things are going ahead on both tracks with lengthy and expensive district court litigation at the same time as some of the same patents are being challenged between the same parties in the district court.

[00:38:53] Speaker 02:
And so the answer on that is the one that we've explained in both of the cases.

[00:38:57] Speaker 02:
We think that the board has simply misapprehended the congressional scheme

[00:39:02] Speaker 02:
and would ask the court to speak to that in one or the other of these appeals.

[00:39:08] Speaker 02:
And so just to, if the court has no questions, to be clear about the relief that we're seeking, we believe that the court should vacate and remand on the question of anticipation, should hold that the board has erred and remand for issuance of a decision that complies with Section 318,

[00:39:29] Speaker 02:
And then as to mentors cross-appeal issues, affirm as to privity in the motion to amend.

[00:39:37] Speaker 02:
Thank you, Your Honors.

[00:39:40] Speaker 00:
Thank you.

[00:39:41] Speaker 00:
Thank you all.

[00:39:42] Speaker 00:
The case is taken under submission.