[00:00:07] Speaker 04:
OK, the next argued case is number 16-1406, PPG Industries, Incorporated against Wells Barre Sourcing, Incorporated.

[00:00:16] Speaker 04:
Mr. Figg.

[00:00:17] Speaker 00:
Thank you, Your Honor.

[00:00:19] Speaker 00:
Good morning, Your Honors.

[00:00:20] Speaker 00:
May it be released to the court.

[00:00:23] Speaker 00:
This case can be decided on the basis of legal errors by the board, not factual errors.

[00:00:30] Speaker 03:
Mr. Figg, could you start with standing?

[00:00:32] Speaker 03:
Yes.

[00:00:32] Speaker 03:
I'm a little concerned.

[00:00:35] Speaker 03:
You addressed it at the very end of your gray brief.

[00:00:39] Speaker 03:
But I'd like to hear you speak on it a bit more.

[00:00:42] Speaker 00:
Well, we were a bit surprised that standing was raised, Your Honor.

[00:00:48] Speaker 03:
Have you been accused of infringing this patent?

[00:00:55] Speaker 00:
Actually, PPG, shortly after the last brief was filed, was sued for patent infringement by Balspar.

[00:01:02] Speaker 00:
on progeny, very closely related patents.

[00:01:07] Speaker 01:
But not on this patent?

[00:01:09] Speaker 00:
Not on these patents that are involved here.

[00:01:12] Speaker 01:
Are they related?

[00:01:12] Speaker 01:
You said closely related.

[00:01:14] Speaker 01:
How are they related?

[00:01:15] Speaker 01:
Are they like parent-child?

[00:01:16] Speaker 00:
Yes.

[00:01:17] Speaker 00:
They're child patents.

[00:01:20] Speaker 01:
OK.

[00:01:21] Speaker 00:
And I think it's clear that PPG and Valspar are competitors in this business.

[00:01:30] Speaker 00:
There's a statutory basis for this appeal.

[00:01:33] Speaker 00:
I know the court is very much aware of that.

[00:01:36] Speaker 00:
And the consumer watchdog case and other cases have said the standing requirements are relaxed in that situation.

[00:01:46] Speaker 00:
They're not eliminated.

[00:01:49] Speaker 00:
Here, it's very clear that PPG has

[00:01:54] Speaker 00:
a bona fide genuine interest in the technology of these patents.

[00:01:59] Speaker 00:
In fact, almost all of the patents that are discussed in the briefs as prior art or as arguments that Valspar makes as to why this coding limitation, flexibility limitation should be in the claims are PPG patents.

[00:02:17] Speaker 03:
It demonstrates PPG has a very legitimate... But the concern I had was in your gray brief, you were referencing how

[00:02:25] Speaker 03:
Perez is something from PPG.

[00:02:28] Speaker 03:
Perez?

[00:02:29] Speaker 03:
Perez, yes.

[00:02:31] Speaker 03:
But the Dr. Swarup declaration was talking about how PPG was using that particular coding 25 years ago.

[00:02:42] Speaker 03:
Yes.

[00:02:43] Speaker 03:
So I was concerned that the gray brief was artfully drafted in a way that perhaps you were saying, okay, 25 years ago we made this kind of coding.

[00:02:55] Speaker 03:
But the gray brief doesn't go further to say, we're presently making this coding, or we are in the process of making this coding, or we are trying to decide between one of two codings, either X or Perez.

[00:03:11] Speaker 03:
And therefore, we need to have a freedom to operate understanding here.

[00:03:16] Speaker 03:
So I didn't see any of that in your gray brief, and so I need

[00:03:23] Speaker 00:
Well, there was a document that was cited in the gray brief.

[00:03:28] Speaker 01:
But that's a 2013 PowerPoint.

[00:03:29] Speaker 00:
The 2013 PowerPoint that shows that PPG has an ongoing program to develop these kinds of can interior coatings.

[00:03:37] Speaker 01:
I got the concern about that one, though, because it's three years ago.

[00:03:42] Speaker 01:
So can you talk about what PPG is doing now?

[00:03:44] Speaker 00:
Well, as I say, PPG now has been sued for patent infringement for developing and commercializing

[00:03:52] Speaker 00:
It's CAN interior coding.

[00:03:54] Speaker 01:
So PPG is currently making a CAN interior coding.

[00:03:57] Speaker 00:
Yes.

[00:03:58] Speaker 01:
And it has been sued by Valspar based on patents that are child patents to the patent at issue here.

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

[00:04:04] Speaker 00:
PPG, I don't want to misspeak.

[00:04:08] Speaker 00:
Whether they are actually selling them or they are in final stages of development in the US, I'm not sure.

[00:04:14] Speaker 00:
I know they are selling them in Europe, and there's also litigation

[00:04:19] Speaker 00:
about the European patents going on in Europe.

[00:04:22] Speaker 00:
Is the lawsuit in Europe or the United States?

[00:04:24] Speaker 00:
The United States.

[00:04:25] Speaker 04:
Let's turn to the merits of the appeal.

[00:04:28] Speaker 00:
Thank you, Your Honor.

[00:04:30] Speaker 00:
Well, as I said, I think this case can be turned on legal issues, not factual issues.

[00:04:36] Speaker 00:
And I'd like to focus on two of those during my remarks here today, subject to any additional issues the court would like to discuss.

[00:04:45] Speaker 00:
First, the board contravened

[00:04:47] Speaker 00:
decades of this court's precedent, when it relied on an admittedly unclaimed property, this coding flexibility, to reverse the examiner's determination that the claimed invention would have been obvious over the combination of the Perez patent and the Christensen patent, both formed by PPG.

[00:05:14] Speaker 00:
The board erred as a matter of law in construing the claims by reading this coding flexibility requirement into the claims.

[00:05:24] Speaker 00:
This claim construction infected the entire board decision.

[00:05:29] Speaker 00:
And the board read into the claims this flexibility requirement, while at the same time reading out of the claims what the patents at issue here, the Valspar patents,

[00:05:42] Speaker 00:
called preferred embodiments or preferred coatings of the invention.

[00:05:47] Speaker 00:
Now, the only facts that are important to these issues are facts that are not disputed.

[00:05:54] Speaker 00:
There's no dispute that the Perez coatings meet the compositional requirements of the Valspar patent claims.

[00:06:03] Speaker 00:
So they claim the use of the Perez coatings

[00:06:08] Speaker 00:
There's no dispute that the board relied entirely on extrinsic evidence to find the so-called coding flexibility requirement.

[00:06:17] Speaker 00:
And at the end of the day, there is no dispute about the meaning of the claims.

[00:06:24] Speaker 00:
Balspar made unequivocal statements in its brief that the claims are not limited to coding flexibility.

[00:06:33] Speaker 03:
Well, let me try a hypothetical.

[00:06:37] Speaker 03:
someone is doing some kind of drug discovery plan, and then there is a compound that they choose to be a lead compound.

[00:06:46] Speaker 03:
And it's really close to what is ultimately the patented compound.

[00:06:50] Speaker 03:
But everybody is under the belief that that lead compound is poisonous.

[00:06:59] Speaker 03:
Just because the patent claim doesn't say the following composition that, by the way, is not poison,

[00:07:07] Speaker 03:
It seems like that's a relevant consideration to the obviousness inquiry in trying to figure out whether one of ordinary skill in the art would look at that prior art lead compound and want to modify it to render obvious the ultimate patented compound.

[00:07:26] Speaker 00:
Your hypothetical might not be so hypothetical, Your Honor.

[00:07:30] Speaker 00:
I think those were facts that were very similar to the Bristol Myers

[00:07:35] Speaker 00:
versus Teva case.

[00:07:37] Speaker 04:
But the law of precedent doesn't require that you move into the claim all of the things that are in the specification, whether it might be known or the comparisons.

[00:07:48] Speaker 04:
How much does your argument depend on what's in the claim as opposed to what's described as a property of the private?

[00:07:58] Speaker 00:
Your Honor, just following up on Judge Chin's argument, I think it's the same question.

[00:08:03] Speaker 00:
Yes.

[00:08:06] Speaker 00:
I think that the claims control the obviousness determination.

[00:08:13] Speaker 00:
And if you're claiming a drug, you might argue that that claim does have some limitation about toxicity in it, maybe not expressly, but inherently.

[00:08:25] Speaker 00:
And this court's jurisprudence, I think, has always been firmly anchored.

[00:08:34] Speaker 00:
The obviousness jurisprudence

[00:08:36] Speaker 00:
has always been firmly anchored in what is claimed.

[00:08:41] Speaker 00:
If the court were to accept the invitation that you can base obviousness on desirable properties of a commercial product that are not required by the claims, which is what's going on here, you would never know where to stop.

[00:08:56] Speaker 00:
I mean, you would be flooded with arguments and expert testimony about properties that have nothing to do with what the invention actually claims.

[00:09:06] Speaker 00:
Now this court has spoken to this issue.

[00:09:09] Speaker 00:
And just to refer to a few comments in the Intelligent Biosystems case, which is cited in our brief, the court quoted the earlier Apotex versus Allergan versus Apotex and said, quote, failure to consider the appropriate scope of the patent's claimed invention in evaluating the reasonable expectation of success

[00:09:34] Speaker 00:
constitutes a legal error that is reviewed without deference.

[00:09:39] Speaker 00:
On that same page, which was page 1367 of 821 F3rd, the court said, one must have a motivation to combine accompanied by a reasonable expectation of achieving what is claimed in the patent at issue.

[00:09:57] Speaker 04:
But you don't put that in the claim.

[00:09:58] Speaker 00:
I'm sorry?

[00:09:59] Speaker 04:
You don't put that in the claim.

[00:10:01] Speaker 04:
You don't put your motivation.

[00:10:03] Speaker 00:
No, but you put the limitations on which you're basing your patentability argument or your non-obviousness argument.

[00:10:12] Speaker 00:
I mean, when you stand back and think about what's being said here, it is that our claims are patentable over Perez because Perez allegedly doesn't have this required flexibility.

[00:10:27] Speaker 00:
Yet our claims don't require flexibility.

[00:10:31] Speaker 00:
And in fact, preferred embodiments in our patent application don't have flexibility.

[00:10:36] Speaker 01:
Your claims say that it has to be on a can.

[00:10:39] Speaker 01:
So Perez has the coding, but Perez doesn't say it would be on the interior of a can.

[00:10:45] Speaker 01:
And then the secondary reference says, you can use this coding on it and put a coding on the interior of the can.

[00:10:50] Speaker 01:
But there is one of the things to put something on the interior of the can.

[00:10:54] Speaker 01:
There's evidence of this, which we are reviewing for substantial evidence.

[00:10:58] Speaker 01:
And the evidence is that,

[00:11:00] Speaker 01:
One of ordinary scaler would know that if you're going to put a coating on the interior of a can, it should be flexible so that if the can gets dented, it doesn't flake off and the person eats it.

[00:11:09] Speaker 01:
So why is that not supported by substantial evidence?

[00:11:13] Speaker 00:
Your Honor, I come back to it has to be grounded in the claims.

[00:11:18] Speaker 00:
And this court has said that over and over and over again.

[00:11:20] Speaker 01:
The motivation doesn't have to be grounded in the claims, though.

[00:11:22] Speaker 01:
I'm sorry?

[00:11:23] Speaker 01:
The motivation doesn't have to be grounded in the claims.

[00:11:25] Speaker 00:
No, no, not the motivation.

[00:11:27] Speaker 00:
that's being used to try to distinguish the prior art.

[00:11:31] Speaker 00:
Now, the claims here are extremely broad.

[00:11:37] Speaker 00:
They're very broad, both in terms of the definition of the coding composition that's used, and they're very broad in terms of the applications for which that composition is used.

[00:11:49] Speaker 00:
The claims read on Perez.

[00:11:50] Speaker 00:
There's no dispute.

[00:11:52] Speaker 00:
And the only ground that the board gave for

[00:11:56] Speaker 00:
saying there was no motivation to combine or no reasonable expectation of success was that Perez allegedly lacked sufficient flexibility.

[00:12:07] Speaker 01:
No, it's not on the inside surface of a food can.

[00:12:11] Speaker 01:
And so then they had to turn to the secondary reference.

[00:12:13] Speaker 00:
I'm sorry, I missed that, Your Honor.

[00:12:14] Speaker 01:
The inside surface of a can.

[00:12:17] Speaker 01:
The claim says a method of coding an inside surface of a food or a beverage can.

[00:12:21] Speaker 00:
Right.

[00:12:22] Speaker 01:
Right?

[00:12:23] Speaker 01:
That Perez doesn't teach that.

[00:12:25] Speaker 00:
Well, Perez teaches the exact same compositions that are used in the valspar patents, that are claimed in the valspar patents.

[00:12:37] Speaker 00:
The patent examiner, the reexamination board, said, if I look at Perez, it has the characteristics that make it suitable for an inside coating for a can.

[00:12:48] Speaker 00:
If I look at Christensen, it tells you how to use that coating for coating the inside of a can.

[00:12:54] Speaker 03:
The board did not... When you say that coding, which coding?

[00:12:58] Speaker 03:
The Perez coding.

[00:12:59] Speaker 03:
The Christensen reference says... Well, it doesn't reference Perez, but what the examiner said... It just says you can use a coding on the inside of a can.

[00:13:07] Speaker 00:
The examiner said you can use the Perez coding in the Christensen method to code the inside of a can, and that that was obvious.

[00:13:15] Speaker 00:
And I would submit, Your Honor, the board did not disturb that conclusion.

[00:13:19] Speaker 00:
The board did not address that conclusion by the examiner at all.

[00:13:23] Speaker 00:
What the board said was, we buy into the fact that the Perez coding is not sufficiently flexible.

[00:13:33] Speaker 00:
And that was the entire basis for the board's decision.

[00:13:36] Speaker 00:
It was basing non-obviousness on something that is nowhere in the claims, which is contrary to decades of this court's precedent.

[00:13:44] Speaker 01:
I thought that the board had its own findings of fact.

[00:13:48] Speaker 01:
The board what?

[00:13:49] Speaker 01:
doesn't it have its own findings of fact numbered one through 15?

[00:13:52] Speaker 00:
Yes.

[00:13:53] Speaker 00:
And none of them had anything to do with any of this other than flexibility.

[00:14:00] Speaker 01:
Well, it does say that, you know, there's different references that say that it's particularly stringent and specific requirements for coding compositions for cannon interiors, which are different from other coatings, flexibility and adhesion are essential.

[00:14:13] Speaker 01:
And so it was just relying on those

[00:14:16] Speaker 01:
fact findings for the idea that if you're going to take Perez and modify it in view of Christensen, you'd want to make sure the coding in Perez is flexible, not reading into the claims flexibility.

[00:14:26] Speaker 00:
I don't dispute that the whole point of this case is the board found that there is a stringent flexibility requirement and I say they found that that requirement was in the claims and they used that requirement to distinguish the Perez reference.

[00:14:44] Speaker 00:
My point is

[00:14:47] Speaker 00:
That is not a requirement of the claims.

[00:14:49] Speaker 00:
Valspar admits that's not a requirement of the claims.

[00:14:52] Speaker 00:
Right in their brief, they say very plainly on page 19 that everyone involved agreed on one thing.

[00:14:59] Speaker 00:
The claims were not limited to flexibility or other stringent requirements.

[00:15:04] Speaker 00:
Now, their claims cover a wide array of applications of this coding.

[00:15:08] Speaker 00:
They are not limited to a commercial coding.

[00:15:10] Speaker 03:
Mr. Fick, can we move on?

[00:15:11] Speaker 03:
What about, very quickly, the Brandenburg Declaration and the problem with the Brandenburg Declaration?

[00:15:17] Speaker 00:
The Brandenburg declaration, again, was the basis for the board's decision on this.

[00:15:34] Speaker 03:
He tried to create example 18 from Perez.

[00:15:37] Speaker 03:
He didn't include the wedding agent.

[00:15:39] Speaker 03:
That's right.

[00:15:40] Speaker 03:
And the board mistakenly thought that the cross-linking agent was the same thing as a wedding agent.

[00:15:46] Speaker 00:
The board on its own, we had made the argument that Brandenburger did not accurately reproduce.

[00:15:55] Speaker 00:
And our experts said Perez requires a surfactant wetting agent.

[00:16:01] Speaker 00:
And that is important.

[00:16:03] Speaker 00:
It's important to the very property that is being touted here as so critical, flexibility, because if the coating doesn't adhere well,

[00:16:13] Speaker 00:
It flakes away when you bend the substrate.

[00:16:18] Speaker 04:
But it's an emulsion polymerization.

[00:16:21] Speaker 04:
You can't have an emulsion polymer without some sort of surfactant.

[00:16:26] Speaker 00:
Well, that's not what Perez says, Your Honor.

[00:16:28] Speaker 00:
What Perez says is Perez has examples 1 through 18 that describe making the latex, the polymer emulsion.

[00:16:36] Speaker 00:
And then it says to formulate these latexes into coatings, you add a cross-linking agent,

[00:16:43] Speaker 00:
And you had a surfactant wedding agent.

[00:16:46] Speaker 00:
And the board clearly made a mistake.

[00:16:48] Speaker 00:
Nobody disputes.

[00:16:50] Speaker 00:
The board made a mistake.

[00:16:51] Speaker 00:
It rejected our argument by saying, Simel 303 is a surfactant wedding agent.

[00:16:58] Speaker 00:
Nobody disputes.

[00:16:58] Speaker 00:
That's wrong.

[00:16:59] Speaker 04:
It's not a wedding.

[00:17:01] Speaker 04:
Did anyone correct it?

[00:17:03] Speaker 04:
It just seems to be such a conspicuous error.

[00:17:06] Speaker 00:
It was in the final decision.

[00:17:08] Speaker 00:
It was in the final decision.

[00:17:09] Speaker 00:
So we didn't have any opportunity to correct it.

[00:17:13] Speaker 00:
No one made this argument to the board.

[00:17:17] Speaker 00:
The board used this argument that it came with up on its own to reject Dr. Good's testimony that a surfactant wedding agent is important to adhesion, which in turn is important to flexibility.

[00:17:33] Speaker 00:
Now, there's a lot of lawyer argument in Valspar's brief about the Perez reference, but the fact

[00:17:41] Speaker 00:
is not disputed.

[00:17:42] Speaker 00:
The board made a glaring mistake when it said Simel 303 is a wedding agent, a surfactant wedding agent.

[00:17:49] Speaker 01:
That argument would just apply to Perez, not to JP 387, right?

[00:17:55] Speaker 00:
That's right.

[00:17:56] Speaker 00:
JP 387 was, I think the board concluded 387 was, they rejected that simply because it didn't say within its four corners it's flexible, even though the

[00:18:09] Speaker 00:
Our experts said there's really no dispute that it's flexible because, again, it's the same polymer that's claimed in the Balspar patents.

[00:18:18] Speaker 04:
Okay.

[00:18:19] Speaker 04:
Let's hear from the other side and we'll save your rebuttal.

[00:18:21] Speaker 00:
Thank you, Your Honor.

[00:18:28] Speaker 02:
Mr. Smith?

[00:18:29] Speaker 02:
Thank you, Judge Newman.

[00:18:30] Speaker 03:
What can you tell us about the patent lawsuit that was recently filed on a related patent?

[00:18:35] Speaker 02:
I think the way Mr. Fig characterized it as being progeny patents is accurate.

[00:18:41] Speaker 02:
Unfortunately, I haven't done a comparison of the claims, but I know the claims are different.

[00:18:46] Speaker 02:
I also don't know what PPG is doing commercially, so that's the extent of what I can tell you.

[00:18:51] Speaker 03:
I can't do the analysis right now on whether... Right, but Valspar must know something about what PPG is doing because it filed a lawsuit, right?

[00:18:58] Speaker 03:
I'm certain Valspar... It didn't just blindly file a patent lawsuit, right?

[00:19:01] Speaker 02:
Yes, Your Honor.

[00:19:02] Speaker 02:
I'm certain Valspar does know something about what PPG is doing, even if in part it is based on testing without discovery or something like that.

[00:19:10] Speaker 02:
I don't happen to know that right now.

[00:19:11] Speaker 02:
It's not a record.

[00:19:12] Speaker 01:
In your brief, you said that there's no Article III standing.

[00:19:16] Speaker 01:
Do you maintain that position?

[00:19:17] Speaker 02:
Yes, we do.

[00:19:18] Speaker 02:
Why?

[00:19:18] Speaker 02:
Because there's no injury, in fact, in this case.

[00:19:21] Speaker 02:
And I certainly concede.

[00:19:23] Speaker 01:
Even with the fact that your client has sued PPG based on related patents, based for a coding for an interior of a can?

[00:19:32] Speaker 01:
Yes, Your Honor.

[00:19:33] Speaker 04:
So is the theory that reexamination requires an Article III controversy?

[00:19:39] Speaker 02:
Yes, Your Honor.

[00:19:40] Speaker 02:
The theory is that certainly article 3 standing is required.

[00:19:44] Speaker 02:
Not for the initial re-examination, of course, because that's a statutory right given by Congress.

[00:19:48] Speaker 02:
And PBG exercised that, and they're allowed to do that even without article 3 standing.

[00:19:53] Speaker 02:
But once you appeal to this court under the consumer watchdog case, you have to meet the article 3 standing, particularly injury.

[00:19:59] Speaker 01:
Just the concrete and particularized injury.

[00:20:02] Speaker 02:
The injury, in fact, right.

[00:20:03] Speaker 02:
And the other two are subsidiary to that in this particular case.

[00:20:08] Speaker 03:
As we know, the standard.

[00:20:10] Speaker 03:
for case or controversy is relaxed in these kinds of peculiar situations, how would the facts have to be different than what they currently are in your view that would get PPG over the hump and then therefore have standing at this point in this appeal to challenge the validity of your patent?

[00:20:30] Speaker 02:
I think there would need to be a reasonable apprehension of suit.

[00:20:34] Speaker 03:
Give me an example.

[00:20:36] Speaker 02:
In a licensing negotiation, Valspar serves a claim chart on PPG saying, this is why we think you infringe these two patents.

[00:20:44] Speaker 01:
So you think that it's the same standard that somebody would have to satisfy for filing a declaratory judgment action?

[00:20:50] Speaker 02:
In terms of injury, in fact, yes.

[00:20:52] Speaker 02:
I don't think this would pass muster under a declaratory judgment action.

[00:20:56] Speaker 02:
But freely admit that this is closer than it could be.

[00:20:58] Speaker 03:
But they don't need to pass the standards for a D.J.

[00:21:01] Speaker 03:
action here.

[00:21:02] Speaker 03:
We all know that.

[00:21:03] Speaker 03:
So there's something less than that.

[00:21:06] Speaker 03:
So what in your view would be less than that that would still satisfy the relaxed standing standards in this peculiar situation?

[00:21:14] Speaker 02:
Some indication, Your Honor, that PPG has an apprehension of suit under these patents and not... Kind of like filing a lawsuit against them on the exact same specification?

[00:21:26] Speaker 02:
That depends on what the claims say and what PPG's product is.

[00:21:30] Speaker 02:
And that was evidence, I think, that PPG could have put into the record as the question brought out.

[00:21:36] Speaker 01:
I don't know how they could have put that into record when you filed suit later, your client filed suit after their reply brief.

[00:21:43] Speaker 02:
Well, PPG certainly could have said, we have the intention of going forward with something that looks like the claims of this patent, or at least that we're considering that.

[00:21:52] Speaker 02:
But none of that was put into the record.

[00:21:54] Speaker 02:
during the proceedings below, or even in this court in the reply brief.

[00:21:58] Speaker 03:
Could we get a letter, maybe from both sides, about, OK, what is this lawsuit that's going on?

[00:22:05] Speaker 03:
And identify the patent, and what's the product?

[00:22:09] Speaker 03:
I need to understand before I can figure out what's going on here on the standing question.

[00:22:14] Speaker 03:
Absolutely.

[00:22:15] Speaker 04:
I think, yes.

[00:22:15] Speaker 04:
Let's set it aside and not use up your time.

[00:22:18] Speaker 04:
But we will accept from both sides

[00:22:23] Speaker 04:
No more than three pages, I think.

[00:22:26] Speaker 04:
I think three pages are enough of anything you need to tell us about standing under the explicit circumstances of the old law reexamination.

[00:22:38] Speaker 02:
Thank you, Your Honor.

[00:22:40] Speaker 04:
OK, let's turn to the merits.

[00:22:42] Speaker 02:
On the merits of the case, we view the situation somewhat differently than PPG.

[00:22:47] Speaker 02:
I think fundamentally, it's relatively simple.

[00:22:49] Speaker 02:
We had dueling experts in this case on the question of,

[00:22:53] Speaker 02:
the combinability of the references.

[00:22:56] Speaker 02:
And the board credited Valspar's expert, Dr. Brandenburger.

[00:22:59] Speaker 02:
That decision was within the board's discretion and supported by substantial evidence.

[00:23:03] Speaker 02:
And let me give you what I think is the core evidence in the case that allows you to affirm on the merits, even aside from any question of simul-303 or testing.

[00:23:15] Speaker 02:
And that is, first of all, the board's finding that there are stringent requirements that apply in the can interior coding field

[00:23:21] Speaker 02:
which I think is supported by undisputed evidence at this point, or largely undisputed evidence.

[00:23:26] Speaker 02:
The board's finding that these requirements.

[00:23:28] Speaker 02:
Remind me again, what's that evidence?

[00:23:30] Speaker 02:
There's a number of pieces of evidence, Your Honor.

[00:23:32] Speaker 02:
First, there's Dr. Brandon Berker's testimony, and the evidence that we recited in pages 25 to 29 of the opening brief, where we cite two patents from PPG, from AXO, prior Valspar patents, all of which say this is a specialty field.

[00:23:48] Speaker 02:
It has stringent requirements, including flexibility,

[00:23:51] Speaker 02:
And codings that have worked in other fields don't work well in this field.

[00:23:54] Speaker 02:
So a person of ordinary skill in the art is already approaching problems in this field a little bit differently than they would approach them anywhere else, with a mindset that other codings for other systems, which is what JP387 and Perez are, are not likely to work well here.

[00:24:11] Speaker 02:
And beyond that, of course, we have the testimony of Dr. Brandenburger directed specifically to the disclosures of JP387 and Perez.

[00:24:19] Speaker 02:
detailing why those disclosures and their particular characteristics would have given a person of ordinary skill in the art the affirmative disbelief that these references would actually meet the flexibility requirement or would be formulated to be a candidate for your coding.

[00:24:34] Speaker 01:
In the 047 decision, the board doesn't seem to rely on that.

[00:24:40] Speaker 01:
It seems to really just be focusing on the experiments that were performed by Mr. Brandenburger.

[00:24:45] Speaker 01:
I mean, if you look at his declaration, Mr. Brandenburger has like

[00:24:48] Speaker 01:
three or four paragraphs where he says more general things like what you're talking about.

[00:24:52] Speaker 01:
But the board doesn't seem to rely on that at all, and instead is just relying on this experiment, which seems to have some sort of clear error in it.

[00:25:00] Speaker 01:
And the board has a clear error in saying that the cross-linker is also the wedding agent.

[00:25:07] Speaker 01:
So how can we rely on other things in Mr. Brandenburger's declaration when the board did not?

[00:25:13] Speaker 02:
So let me address that.

[00:25:15] Speaker 02:
separately for the two rejections.

[00:25:16] Speaker 02:
So certainly for JP387, the testing just isn't relevant.

[00:25:20] Speaker 02:
And if you read the board's opinion at appendix 30 and 31, they really are saying Dr. Brandenburger testified to the characteristics of JP387 and didn't find those to be particularly suited to this can interior coding field.

[00:25:35] Speaker 02:
So it's a little bit different for JP387 and Perez.

[00:25:38] Speaker 02:
For Perez in view of Christensen, I think you're correct that the board spent a lot of

[00:25:45] Speaker 02:
real estate in the opinion talking about the experimentation.

[00:25:49] Speaker 02:
But the introduction to the analysis and the ultimate conclusion, this sentence right after they talk about the experimentation where they say, as a result, it comes after the Simel 303 statement.

[00:26:01] Speaker 02:
What they say there, I think, is particularly important.

[00:26:03] Speaker 02:
They say, as a result, we credit the statements in the Brandenburger Declaration over the statements made in the Second Good Declaration.

[00:26:11] Speaker 02:
That's on appendix page 26.

[00:26:15] Speaker 03:
Do you agree that Simel is not a wedding agent?

[00:26:21] Speaker 02:
With the way you phrased the question, no.

[00:26:23] Speaker 02:
I think that Ward's finding is actually scientifically accurate.

[00:26:27] Speaker 02:
But we will agree that we didn't argue that.

[00:26:29] Speaker 02:
We didn't put the evidence in the record to show that.

[00:26:32] Speaker 02:
So if there's a substantial evidence basis for that finding, it is in the vagueness of the Perez reference itself.

[00:26:39] Speaker 02:
And that is this surfactant wedding agent, which is talked about at column 11, lines 14 to 15, follows immediately the discussion of simel303.

[00:26:51] Speaker 02:
And if the significance that PPG is putting on that surfactant wedding agent as sort of the key to unlocking flexibility is actually there, you would have expected Perez to name that surfactant wedding agent and the composition, the concentration at which it's used, how it's used,

[00:27:07] Speaker 02:
And so concluding that the previous sentence is actually reintroduced as a surfactant wedding agent at that point in time, I think is a plausible thing for the board to do.

[00:27:17] Speaker 02:
Now, it wasn't my initial reading of that, but I think ultimately it doesn't matter.

[00:27:22] Speaker 03:
But why was it OK for Dr. Brandenberger to not include a wedding agent when he was purportedly trying to recreate example 18, but he forgot to add an ingredient?

[00:27:35] Speaker 02:
Because he can't add it, Your Honor.

[00:27:37] Speaker 02:
And he can't add it because you don't know what it is.

[00:27:41] Speaker 02:
Did he say that?

[00:27:42] Speaker 03:
No, he didn't.

[00:27:44] Speaker 03:
There's this thing in Perez, example 18, called wedding.

[00:27:47] Speaker 03:
I don't know how to put that in there.

[00:27:49] Speaker 03:
No, he didn't explain that in the declaration.

[00:27:52] Speaker 01:
Couldn't he have, had he recognized that he needed to include it, couldn't he have said, just like he did with one of the other ingredients,

[00:28:00] Speaker 01:
This is the reasonable amount of pound that somebody could put in.

[00:28:04] Speaker 01:
Here's that at 5%, 10%, 20%, you know, or whatever he did.

[00:28:08] Speaker 01:
I think he did that with respect to the cross-linker.

[00:28:10] Speaker 01:
He didn't have a specific amount, but he used his judgment.

[00:28:13] Speaker 01:
Had he recognized that a wedding agent was needed, wouldn't he have done that similar process?

[00:28:18] Speaker 02:
It's an extremely difficult thing to do.

[00:28:20] Speaker 02:
And the distinction between the surfactant wedding agent and the cross-linker, if they are indeed different,

[00:28:26] Speaker 02:
is that the cross-linker is actually named and he has some experience judging what the concentrations to be.

[00:28:31] Speaker 02:
In order to run these sorts of experiments that you're talking about, there are multiple dimensions in which you have to do them.

[00:28:38] Speaker 02:
You have to take the known universe of surfactants and run across that dimension.

[00:28:43] Speaker 02:
You have to take the concentrations that are possible and run something that he thinks is reasonable, some range, and then you have to do the application method.

[00:28:53] Speaker 02:
Those things are very, very difficult to resolve.

[00:28:55] Speaker 02:
I don't think you could test Perez any better than Dr. Brandenburger did.

[00:29:00] Speaker 01:
Then maybe the test is just not worthwhile.

[00:29:03] Speaker 04:
But he was looking for flexibility, whereas the wetting agent, as I understand it, related to adhesion to the surface, the metal surface.

[00:29:12] Speaker 04:
So if he was looking for the flexibility of the polymer, the wetting agent is not incorporated into the polymer.

[00:29:19] Speaker 04:
I would have thought that

[00:29:22] Speaker 04:
Perhaps he, in fact, had a more specific basis of comparison by using just the polymer in the cross-linking agent.

[00:29:33] Speaker 02:
I think that's a very important point, Judge Newman.

[00:29:36] Speaker 02:
There's no evidence in the record anywhere that the wetting agent actually contributes to flexibility.

[00:29:43] Speaker 02:
Remember that Perez is designed to have a coating which has a high glass transition temperature.

[00:29:50] Speaker 03:
I thought Dr. Good.

[00:29:51] Speaker 03:
mentioned something about why the wedding is an important part of example 18.

[00:30:00] Speaker 01:
And it's repeated at A23, paragraph 13, where the board says, Dr. Good testified that the service of the medal requires excellent wedding to provide adhesion because adhesion is very important when testing for flexibility.

[00:30:15] Speaker 02:
Right.

[00:30:17] Speaker 02:
Two things I would say to that, Your Honor.

[00:30:18] Speaker 02:
First of all, what Dr. Good did not testify to was that the wetting agent will actually improve flexibility.

[00:30:24] Speaker 02:
He said it will help in the testing of flexibility.

[00:30:27] Speaker 02:
But there's an important point there, which is in this emulsion polymerization system, and I disagree with Mr. Figg on this, it is required to have a surfactant in the initial stage, both AOT 75 and the polymeric surfactant.

[00:30:41] Speaker 02:
So there's a lot of surfactant and a lot of wetting already in this composition, for example, 18.

[00:30:46] Speaker 02:
The second thing, and this is what Mr. Good did not testify to, was that a person of ordinary skill in the art can select the wedding agent, can select the concentration, can select the application method in a way that changes Perez from the sort of flexibility disaster you see in the photographs that Dr. Brandenburger took to something that will actually work for an application that is not disclosed in Perez, for the can interior coding field.

[00:31:16] Speaker 02:
There's no evidence of record that that's even possible.

[00:31:19] Speaker 02:
Dr. Good didn't testify to that.

[00:31:21] Speaker 02:
And so if one is going to test Perez, this is about as well as one could do.

[00:31:26] Speaker 02:
This is up to the limits of what Perez actually discloses.

[00:31:29] Speaker 02:
And I think that's the fault of Perez.

[00:31:30] Speaker 02:
It's not the fault of the testimony.

[00:31:32] Speaker 03:
Perez coding composition, it's within the scope of your patent claims, right?

[00:31:37] Speaker 02:
For the independent claims, Your Honor, it's within the compositional part of the scope, yes.

[00:31:44] Speaker 01:
I think that you were saying that the board credited the statements made in the Brandeburger Declaration over the statements made in the Good Declaration.

[00:31:51] Speaker 01:
But don't we have to read that as being as a result and then look at the sentence before that to understand that it's being credited as a result of the testing that was done?

[00:32:03] Speaker 02:
So I think that there are two different questions maybe that Your Honor is asking.

[00:32:10] Speaker 02:
But one is,

[00:32:11] Speaker 02:
can we read the board's opinion as referring to the entire Brandenburger Declaration?

[00:32:16] Speaker 02:
And I think given the introduction to the analysis section, where they say in view of the arguments and evidence of record, and also in view of the earlier statement that the board makes, which is that the Brandenburger Declaration contains testimony and testimony about experimentation.

[00:32:31] Speaker 02:
This is the PPX 20, I believe.

[00:32:35] Speaker 02:
That the board is actually reviewing and crediting the entire Brandenburger Declaration.

[00:32:41] Speaker 02:
Now, they talk a lot about the experimentation.

[00:32:44] Speaker 02:
And I think that's because a lot of the party's argumentation was over the experimentation.

[00:32:49] Speaker 02:
But even though it's thin, I think what the board is actually saying is we credit the statements made in the Brandenburger Declaration over the statements made in the Good Declaration.

[00:32:58] Speaker 02:
And you can view the experimentation as a credibility enhancement of that.

[00:33:03] Speaker 02:
So in other words, they believe Dr. Brandenburger in part because Dr. Brandenburger actually tested it, whereas PPG did not test it.

[00:33:11] Speaker 03:
Are we talking about the JP387 rejection right now?

[00:33:15] Speaker 02:
No, we're talking about actually Perez and Christensen.

[00:33:17] Speaker 02:
At the end of that paragraph on appendix page 26 where they're talking about the experimentation and they conclude as a result.

[00:33:24] Speaker 02:
Right.

[00:33:25] Speaker 03:
So let's just assume for the moment we've got a problem with the Brandenburger testing of example 18.

[00:33:33] Speaker 03:
And there was an over-reliance on a misunderstanding of whether Brandenburger actually

[00:33:41] Speaker 03:
it followed the full recipe in example 18.

[00:33:46] Speaker 03:
Then when we get over the JP387 analysis, it looks like the board does something of a shortcut to the finish line and says, we look at Dr. Brandenburger's declaration, we look at Dr. Good's declaration, we find Dr. Brandenburger's declaration is more persuasive, and so therefore we reverse the projection.

[00:34:09] Speaker 03:
That analysis likewise seems exceedingly thin, especially if we have a problem with at least a major aspect of Dr. Brandenburger's declaration.

[00:34:18] Speaker 02:
There's a critical aspect of the board's opinion in which they state they credit Dr. Brandenburger's testimony over that Dr. Goode because it's consistent with the prior art.

[00:34:29] Speaker 02:
And there are many aspects of Dr. Brandenburger's testimony which are consistent with what they were seeing in the prior art, particularly the prior art that was coming from PPG

[00:34:38] Speaker 02:
saying this is a specialty field with stringent requirements where other compositions don't work well.

[00:34:45] Speaker 02:
And Dr. Brandenburger's testimony in his declaration also addresses JP387 specifically and says, look, this is a general coding thing.

[00:34:55] Speaker 02:
This is a general coding composition.

[00:34:58] Speaker 02:
It's directed to things like leather processing, paper processing.

[00:35:02] Speaker 02:
Per the expressed terms of the specification in JP387, a person of ordinary skill working in this field

[00:35:08] Speaker 02:
this almost undisputedly acknowledged specialty field with stringent requirements is not going to view this general coding as potentially applicable to a canned interior coding.

[00:35:20] Speaker 02:
They're going to say, this is probably not going to work.

[00:35:23] Speaker 02:
And maybe I'm going to test it or something else.

[00:35:25] Speaker 02:
But they're not going to go in with a reasonable likelihood of success for the reasons in Dr. Brandenburger's declaration.

[00:35:31] Speaker 03:
In other words, should see that would have made me more comfortable if the board actually said that.

[00:35:36] Speaker 02:
So what the board did say was that they were crediting Dr. Brandenburger's declaration because Dr. Brandenburger's declaration was more consistent with the prior art.

[00:35:47] Speaker 02:
When you pair that with the board's earlier fact findings regarding the stringent requirements in the field and regarding the differences between this field and other fields and other coding compositions, I think you get to that point.

[00:36:04] Speaker 04:
Any more questions, Mr. Swin?

[00:36:05] Speaker 02:
Thank you very much.

[00:36:06] Speaker 04:
Thank you, Mr. Swin.

[00:36:09] Speaker 04:
Mr. Figg.

[00:36:14] Speaker 00:
Thank you very much.

[00:36:19] Speaker 00:
The argument is this is a specialty field and the coatings have to be flexible.

[00:36:25] Speaker 00:
Yet the preferred embodiments in the patent application admittedly are not flexible.

[00:36:31] Speaker 00:
We pointed out that the flexibility test

[00:36:34] Speaker 00:
in the Valspar patents is a reverse impact test.

[00:36:39] Speaker 00:
They said the most preferred coatings or the more preferred coatings pass that test.

[00:36:45] Speaker 00:
But preferred coatings do not pass that test.

[00:36:48] Speaker 00:
Those are embodiments of their claims.

[00:36:51] Speaker 00:
How can they distinguish a reference for lack of flexibility when the preferred embodiments in their own patent don't have this alleged requirement?

[00:37:01] Speaker 00:
Can you point me to that in the patent?

[00:37:03] Speaker 00:
I'm sorry?

[00:37:03] Speaker 00:
Can you point me?

[00:37:05] Speaker 00:
Yes.

[00:37:05] Speaker 00:
Appendix page 26, column 22, lines 16 and 17 say that preferred codings come when you're there.

[00:37:19] Speaker 00:
I'm sorry.

[00:37:20] Speaker 00:
Could you say it again?

[00:37:21] Speaker 00:
Did you say 20?

[00:37:21] Speaker 00:
Yes.

[00:37:21] Speaker 00:
Column 22 of the 876 patent.

[00:37:24] Speaker 01:
What's the appendix page number?

[00:37:25] Speaker 00:
26, I believe.

[00:37:27] Speaker 00:
I'm kind of working from memory here.

[00:37:29] Speaker 00:
That's fine.

[00:37:30] Speaker 00:
Column 22 of the 876.

[00:37:31] Speaker 00:
Line 16 and 17?

[00:37:36] Speaker 00:
says preferred coatings have one or more of the properties identified in the example section.

[00:37:44] Speaker 00:
Now if you read the example section, properties that are emphasized and identified separated by headings are coating continuity, this is whether there are pinholes in the coating, good adhesion, blush resistance, which is water resistance,

[00:38:04] Speaker 00:
detergent resistance and flexibility determined by the reverse impact test.

[00:38:13] Speaker 00:
They say only one or more of those is required.

[00:38:16] Speaker 00:
Now, Perez clearly has one or more.

[00:38:19] Speaker 00:
We actually think Perez has all of them.

[00:38:21] Speaker 00:
But for purposes of this dispute, Perez, it's admitted, has one or more of those properties.

[00:38:28] Speaker 00:
If you go on to the examples, and we reproduced this in our brief, Your Honor, the

[00:38:34] Speaker 00:
Examples clearly cover embodiments that failed this reverse impact test, which the patent says is the test used in the patent for flexibility.

[00:38:49] Speaker 00:
Did I respond to your question, Jim?

[00:38:52] Speaker 00:
The argument that the board credited Dr. Brandenburger over Dr. Good is

[00:39:02] Speaker 00:
simply overlooking why did they credit him.

[00:39:05] Speaker 00:
They credit him because they rejected PPG's argument that Brandenburger left out the surfactant wedding agent.

[00:39:16] Speaker 00:
They concluded that Brandenburger didn't leave it out because he put Simel in.

[00:39:21] Speaker 00:
But nobody disputes that was a clear mistake.

[00:39:25] Speaker 00:
That was the only reason they said they credited Dr. Brandenburger over Dr. Good.

[00:39:31] Speaker 00:
Now Dr. Good testified that the inclusion of a wetting agent is important in these kinds of coatings because it causes uniformity, it causes good adhesion of the coating to the substrate.

[00:39:48] Speaker 00:
And he said that is important when testing for flexibility.

[00:39:53] Speaker 00:
What that means is

[00:39:54] Speaker 00:
If you bend the substrate and the coating doesn't adhere well, it flakes away.

[00:40:00] Speaker 00:
That's exactly what Dr. Brandenburger showed in his photographs.

[00:40:04] Speaker 00:
So we don't know why Dr. Brandenburger left this out.

[00:40:08] Speaker 00:
But the arguments counsel made were not arguments Dr. Brandenburger made.

[00:40:13] Speaker 00:
This was pointed out in Dr. Good's declaration that he left out the surfactant wetting agent.

[00:40:22] Speaker 00:
He never said, well, I don't know what it is, or I don't know how much to use, or maybe he's talking about a surfactant that was in the upstage latex production.

[00:40:32] Speaker 00:
All that's lawyer argument.

[00:40:34] Speaker 00:
None of that was in Dr. Brandenberger's declaration.

[00:40:38] Speaker 00:
Let me address your point, Judge Stull, about to what extent did the board rely on things other than flexibility and other than Brandenberger's test results.

[00:40:52] Speaker 00:
The board cited two numerous paragraphs of the Brandenburger Declaration.

[00:40:58] Speaker 00:
Not one of those paragraphs that it cited dealt with any of these other issues other than flexibility, and the very first paragraph that just said this is a specialized field that has stringent requirements.

[00:41:10] Speaker 00:
They relied entirely on the alleged insufficient flexibility of Perez, and they relied entirely on Dr. Brandenburg's testimony.

[00:41:20] Speaker 00:
Under the Administrative Procedures Act, the board has an obligation to explain what they're basing their decision on.

[00:41:28] Speaker 00:
They never mentioned any of these other features, any of these teaching away arguments, anything other than the alleged insufficient flexibility and the fact that they concluded Brandenburger demonstrated it.

[00:41:42] Speaker 03:
But he demonstrated a property that... Just to clarify, you're out of time.

[00:41:47] Speaker 03:
You'll be sending in a three-page letter, too, right?

[00:41:51] Speaker 03:
Yes.

[00:41:51] Speaker 03:
Because that is going to be critical for me.

[00:41:54] Speaker 00:
Yes, I appreciate that, Your Honor.

[00:41:56] Speaker 00:
If I might just take 10 more seconds.

[00:42:00] Speaker 00:
We've found in numerous cases where requesters or IPR petitioners have appealed.

[00:42:08] Speaker 00:
And this issue never came up.

[00:42:10] Speaker 00:
We, frankly, were surprised it came up here.

[00:42:12] Speaker 00:
We're in a post-consumer watchdog world.

[00:42:14] Speaker 00:
No, but even after consumer watchdog.

[00:42:16] Speaker 00:
Consumer Watchbook, by the way, was decided after all the briefing went in.

[00:42:23] Speaker 00:
So I appreciate the opportunity we have.

[00:42:26] Speaker 04:
OK.

[00:42:26] Speaker 04:
Now, to be clear, let's just pick a date.

[00:42:28] Speaker 04:
Let's say November 15.

[00:42:30] Speaker 04:
That's two weeks from today.

[00:42:32] Speaker 04:
So does that make sense to both of you?

[00:42:36] Speaker 04:
OK.

[00:42:37] Speaker 04:
Thank you.

[00:42:39] Speaker 04:
That concludes the argued cases for this morning.

[00:42:44] Speaker ?:
All rise.