[00:00:00] Speaker 03:
We'll start the morning with two admissions.

[00:00:03] Speaker 03:
And Judge Chen will make some motions.

[00:00:06] Speaker 07:
Yes, sir.

[00:00:07] Speaker 07:
Thank you, Judge Newman.

[00:00:08] Speaker 03:
Would the two of you stand, please, and approach the podium?

[00:00:15] Speaker 07:
That's close enough.

[00:00:19] Speaker 07:
Thank you, Judge Newman.

[00:00:20] Speaker 07:
Good morning.

[00:00:21] Speaker 07:
I'd like to move the admission of two individuals to our bar.

[00:00:26] Speaker 07:
First, I move the admission of Elena Marie Witt.

[00:00:28] Speaker 07:
who is a member of the bar and in good standing with the highest court of Illinois.

[00:00:33] Speaker 07:
And I have knowledge of her credentials and am satisfied that she possesses the necessary qualifications.

[00:00:39] Speaker 07:
Also today, I'd like to move the admission of Chancen Chang, who is a member of the bar and is in good standing with the highest courts of New York and the District of Columbia.

[00:00:50] Speaker 07:
I also have knowledge of his credentials and am satisfied that he possesses the necessary qualifications.

[00:00:56] Speaker 07:
I know all of these things because these two individuals have been clerks of mine for over a year, and I've been working with them every day.

[00:01:06] Speaker 07:
And I'm convinced that they have the high character and are excellent lawyers, have terrific analytical abilities, and have protected me from making any mistakes over the past year.

[00:01:20] Speaker 07:
And I'm confident that we as a court will be proud

[00:01:26] Speaker 07:
to have them as members of our bar.

[00:01:29] Speaker 03:
Well, thank you.

[00:01:29] Speaker 03:
The panel will vote.

[00:01:32] Speaker 03:
What is your vote, Judge Stone?

[00:01:34] Speaker 01:
I vote yes.

[00:01:37] Speaker 03:
And your vote, we assume, is yes.

[00:01:40] Speaker 01:
Yes.

[00:01:40] Speaker 03:
And my vote is yes.

[00:01:43] Speaker 03:
Welcome, both of you, to the bar of this court.

[00:01:47] Speaker 03:
Please raise your right hand and face the clerk who will administer the oath.

[00:01:52] Speaker 00:
Do you swear or affirm that you will comport yourself as an attorney and counsel of this Court of Law and that you will support the Constitution of the United States of America?

[00:02:03] Speaker 00:
I do.

[00:02:04] Speaker 00:
Welcome to the bar of the United States Court of Appeals for the federal circuit.

[00:02:15] Speaker 03:
Down to business, we call the first case, number 151346, SAS Institute Against Compliments of LLC, Mr. Marra.

[00:02:29] Speaker 06:
Good morning, Your Honors, and may it please the Court.

[00:02:31] Speaker 06:
I'll focus on two issues this morning.

[00:02:33] Speaker 06:
First, the claim construction regarding claim four, and secondly, the sufficiency of the final decision of the Court.

[00:02:40] Speaker 06:
So first, as to claim four.

[00:02:42] Speaker 06:
The board committed both an error of substance and an error of procedure.

[00:02:46] Speaker 06:
On the substance, the board failed to apply the broadest reasonable interpretation of the claim term graphical representations of data flows.

[00:02:55] Speaker 06:
The board instead imported a definition from the specification of a different term, data flow diagram, and the board required that claim four include data processing icons and arrows.

[00:03:09] Speaker 06:
That's not consistent with the specification or that brought us reasonable interpretation of the specification.

[00:03:14] Speaker 06:
And that was the only basis for the board's patentability finding regarding claim four.

[00:03:18] Speaker 06:
So we're asking the court to reverse that construction and reverse the patentability finding.

[00:03:23] Speaker 06:
But even if the court affirms the board's construction of that claim term, we're asking for a remand to the board because the board did not adopt that construction until the final written decision.

[00:03:35] Speaker 06:
And SAS had no opportunity to address it.

[00:03:38] Speaker 06:
In fact,

[00:03:38] Speaker 06:
That construction was not offered by either the parties.

[00:03:42] Speaker 06:
It was not a term that had been disputed at the time of the final written decision.

[00:03:46] Speaker 06:
The construction that the board gave us in the final written decision was totally unexpected.

[00:03:51] Speaker 06:
In fact, earlier in the IPR, in the institution decision, this is at A173, the record, the board signaled to the parties that the graphical representations in the claims

[00:04:04] Speaker 06:
there are several recitations of graphical representation, did not acquire any icons or arrows, let alone the specific icons and arrows that the board ultimately read it to claim for.

[00:04:15] Speaker 06:
So throughout the IPR, after the institution decision, the parties did not address any icons or arrows.

[00:04:22] Speaker 06:
That was not an issue that they had, that was in play during the IPR.

[00:04:27] Speaker 07:
Patent owner in its preliminary response did put forward a claim construction for

[00:04:32] Speaker 07:
data flows or graphical representations of data flows that related to icons and arrows, isn't that right?

[00:04:39] Speaker 06:
That is correct, Your Honor.

[00:04:41] Speaker 06:
That was with respect to claim two, the graphical representations of data flows, depict data flows, that's correct.

[00:04:49] Speaker 06:
And in the institution decision, the board determined that icons and arrows and many of the other limitations that the patent owner wanted to read into the claim term were not required.

[00:05:01] Speaker 06:
Patent Office said, again, at A173, graphical representations are described more broadly in the 936 patent, not limited to icons and arrows.

[00:05:10] Speaker 06:
It's basically just a picture or a graph that depicts something.

[00:05:12] Speaker 01:
What sort of evidence would you put in on icons and arrows?

[00:05:18] Speaker 06:
I would expect, Your Honor, that we would point back to the specific places in the prior art already of record, perhaps expert testimony,

[00:05:29] Speaker 06:
to identify where these very specific kinds of icons that the board said were required are found in the prior art.

[00:05:36] Speaker 06:
Because there's no dispute that the prior art that we relied upon, the code reference in particular, and that's code COAD, includes icons and arrows.

[00:05:46] Speaker 06:
The board found claim for patentable because we didn't show a specific kind of icon, an icon depicting a data processing step.

[00:05:56] Speaker 07:
I guess the concern I have is

[00:05:58] Speaker 07:
is that in your request for rehearing to the board, as well as your short request in your briefing, there's no real meat to the request for remand.

[00:06:11] Speaker 07:
You suggest in a broad conceptual way that you would like to have a second crack at proving unpatentability under this claim construction, but you don't

[00:06:20] Speaker 07:
really explain what you would do or what you would really accomplish from it.

[00:06:26] Speaker 07:
You just say, you deserve a second chance.

[00:06:28] Speaker 07:
And so I'm trying to put myself in the board's shoes.

[00:06:32] Speaker 07:
It feels a little nebulous what you really want or what you would really do.

[00:06:38] Speaker 06:
And at the time that we requested rehearing from the board, Your Honor, we realized that we couldn't put in any new evidence or arguments at that time.

[00:06:46] Speaker 06:
We were very limited in what we could do.

[00:06:47] Speaker 07:
I'm just pointing out that so far,

[00:06:50] Speaker 07:
Even up till today, I haven't really seen or heard what I would consider a concrete roadmap of what your expectations would be or what you would actually do.

[00:06:59] Speaker 06:
Well, I would expect upon remand to the board, and this is only if the court were to affirm the construction that the board adopted in claim four, and we're asking the court to reverse that construction.

[00:07:11] Speaker 06:
If remanded and required to show that the prior R demonstrates the elements of claim four as construed by the board, I would expect we'd have some abbreviated procedure in the Patent Office.

[00:07:22] Speaker 06:
We're in uncharted territory here.

[00:07:24] Speaker 06:
We'd have some abbreviated procedure in the Patent Office where the parties would perhaps submit supplemental briefing.

[00:07:32] Speaker 06:
There may be some supplemental expert declarations to

[00:07:37] Speaker 06:
allow the parties to allow SAS to identify where it is in the prior art these very specific icons are shown, where the icons depicting data processing steps are in the prior art.

[00:07:49] Speaker 06:
And that's the opportunity we never had before in front of the patent office.

[00:07:53] Speaker 06:
Code doesn't have that, right?

[00:07:55] Speaker 06:
Code does have, in fact, in our papers we explain that code does have icons depicting data processing steps.

[00:08:02] Speaker 06:
We do believe that is the case.

[00:08:04] Speaker 06:
And we put that in our request for rehearing to the board, and the board did not address that.

[00:08:08] Speaker 06:
The board just said, we're not going to reconsider our claim construction.

[00:08:13] Speaker 07:
No, but the whole point is whether icons are necessary for graphical representations of data flows.

[00:08:19] Speaker 07:
And in the request for rehearing, that would have been your time to say, oh, well, if that's what you understand the claim to require, well, the code reference has it right there.

[00:08:32] Speaker 06:
I don't know that that would have been proper, again, given the limits on what we were permitted to do at the time in front of the board.

[00:08:40] Speaker 06:
Would the board have considered that to be new evidence or new arguments?

[00:08:45] Speaker 06:
We certainly would have made those new arguments or pointed to those portions of the code reference had the board granted our request for rehearing.

[00:08:53] Speaker 06:
But they did not grant the request for rehearing.

[00:08:56] Speaker 07:
Well, the grant for request for rehearing, isn't it built and

[00:09:00] Speaker 07:
predicated on the content of the arguments you make in your request for rehearing.

[00:09:05] Speaker 06:
And the substance of our argument to the board was that you gave us a new claim construction.

[00:09:10] Speaker 06:
Nobody saw this coming.

[00:09:12] Speaker 06:
Give us a chance.

[00:09:13] Speaker 06:
Let us put in evidence and arguments directed to the prior art to show you where the elements of this new claim construction are if you're going to maintain that claim construction.

[00:09:23] Speaker 01:
What made you think that it would be improper to put that in the request for rehearing?

[00:09:28] Speaker 01:
to put, Your Honor, to put specific... With like, for example, column 8, lines 2 through 10, or wherever it is in the reference that you would be relying upon.

[00:09:35] Speaker 06:
Well, again, we were operating under the rules of the board, which are very strict, certainly at the time of the oral hearing, that they will not allow any new evidence or any new arguments by the parties.

[00:09:45] Speaker 06:
So we thought the proper procedural approach was request rehearing before we submitted any new evidence or any new arguments.

[00:09:53] Speaker 06:
That's why we did it.

[00:09:54] Speaker 01:
Do you have a specific role in mind?

[00:09:56] Speaker 01:
I understand.

[00:09:57] Speaker 06:
I'm thinking of the final, the trial practice guide, I'm thinking of, Your Honor, which very clearly lays out that at the time of the oral hearing, no new evidence and no new arguments.

[00:10:08] Speaker 06:
So we're asking for a remand on claim four, again, if the board maintains, or if the court affirms the board's construction of the data for this claim term.

[00:10:18] Speaker 06:
We're also asking for a remand on claims two and 11 through 16, and this is the

[00:10:23] Speaker 06:
the partial final written decision issue.

[00:10:26] Speaker 06:
And our arguments here really parallel the arguments that have been made to another panel of this court in the synopsis mentor appeals of which Judge Newman you were a part.

[00:10:36] Speaker 06:
And our basic position is this, that if an IPR is instituted, as it was here, then the board is required to issue a final written decision as to the patentability of any patent claim challenged by the petitioner.

[00:10:52] Speaker 06:
And how do we determine what any patent claim challenged by the petitioner is?

[00:10:57] Speaker 06:
We look to other parts of the statute.

[00:10:59] Speaker 06:
Section 312 of the statute identifies the requirements for the petition.

[00:11:04] Speaker 06:
And in the petition, it requires that the challenger identify each claim challenged.

[00:11:10] Speaker 07:
It's a two-stage process, right?

[00:11:11] Speaker 07:
And we have the petition stage, and then we have the trial stage.

[00:11:15] Speaker 07:
So yes, you're referencing us to a section about the first stage.

[00:11:20] Speaker 07:
But the final written decision is in the context of the second stage.

[00:11:25] Speaker 07:
And then in 318A, I believe the premise of that provision begins with something like, if an IPR is instituted, then the board shall write a final written decision on every claim challenged.

[00:11:40] Speaker 07:
And in the context of stage two, in the context of that provision, why isn't it reasonable to say that it's

[00:11:47] Speaker 07:
requiring a final written decision on all the claims challenged that have been instituted and are actually part of the trial, not part of the now discarded stage one petition phase?

[00:12:01] Speaker 06:
You're correct, Your Honor.

[00:12:02] Speaker 06:
The 318A does begin with if an interparties review is instituted.

[00:12:07] Speaker 06:
And that means has the petitioner met the threshold showing of showing at least one of the challenged claims

[00:12:15] Speaker 06:
a likelihood that they will prevail as to at least one of the challenged claims.

[00:12:19] Speaker 06:
So at that point, if the PTO makes that determination and exercises its discretion to institute the IPR, then we have to determine what was any patent claim challenged by the petitioner and that we look back to the petition.

[00:12:34] Speaker 07:
So if there are 100 claims in a patent and the petitioner petitions on all 100 claims

[00:12:41] Speaker 07:
The patent office grants an IPR on just claim 44 and then writes a final written decision on claim 44.

[00:12:48] Speaker 07:
I guess it's your view that the patent board actually has to write a final written decision on patentability of all 100 claims.

[00:12:58] Speaker 07:
That is our position, Your Honor.

[00:13:00] Speaker 06:
If the board makes the threshold decision that there's a likelihood they will prevail as to at least one challenge claim and the board institutes the IPR,

[00:13:10] Speaker 06:
Then the requirement of 318A is clear that they must issue a final written decision.

[00:13:15] Speaker 06:
The board must issue a final written decision as to any patent claim challenged by the petitioner.

[00:13:20] Speaker 07:
Just stepping back from a moment, you know, I know you want to really zero in on a hypertextual treatment, but why would there be logic in that outcome of this hypothetical I just asked?

[00:13:35] Speaker 06:
The logic of the outcome is that

[00:13:39] Speaker 06:
by addressing in the final written decision all the claims challenged by the petitioner.

[00:13:44] Speaker 06:
We have the certainty of one track.

[00:13:48] Speaker 06:
The petitioner is the master of the petition and decides what claims to challenge.

[00:13:51] Speaker 06:
The petitioner decides for these challenged claims, I know that if an IPR is instituted that I'm either going to get a determination in the patent office or I'm going back to district court on those challenged claims.

[00:14:05] Speaker 03:
So in your view,

[00:14:07] Speaker 03:
Now that's very interesting.

[00:14:08] Speaker 03:
I thought your position was contrary.

[00:14:11] Speaker 03:
So in your view, the estoppel, the statutory estoppel, would apply to all of the claims?

[00:14:18] Speaker 06:
Only to the claims for which there is a final written decision, Your Honor.

[00:14:22] Speaker 03:
Well, the claims that are not instituted.

[00:14:26] Speaker 03:
How can they get into the final written decision if they're not instituted?

[00:14:31] Speaker 06:
And here, Your Honor, you're correct.

[00:14:33] Speaker 06:
But what we end up with here is some claims instituted, some claims in the final written decision, some claims not.

[00:14:39] Speaker 06:
So in this situation, for example, we'll be going back to the district court with some claims having estoppel, some claims having no estoppel.

[00:14:47] Speaker 06:
And that was not the intent of the statutory scheme.

[00:14:50] Speaker 06:
The statutory scheme was intended to have certainty.

[00:14:52] Speaker 06:
Either the claims that are going to get challenged are decided in the patent office by the experts in the patent office, or all the claims challenged by the petitioner are decided in district court.

[00:15:03] Speaker 06:
this mixed bag or this piecemeal approach to the claims challenged was not the intent of the statute.

[00:15:08] Speaker 03:
Let's hear from the other side and we'll save you rebuttal time.

[00:15:11] Speaker 06:
Thank you very much, Your Honor.

[00:15:18] Speaker 03:
Okay, I missed your topic.

[00:15:19] Speaker 03:
Let's pursue this front because I observe that in your brief, the regulations allow your supporting the partial institution and say does not require the board to waste its resources for claims

[00:15:33] Speaker 03:
that there's no reasonable chance of invalidation.

[00:15:38] Speaker 03:
So you're willing to give up, again, the statutory estoppel for claims that go through the formalities.

[00:15:46] Speaker 03:
Does this mean, in your mind, that they can go back and sue you in the district court on these claims?

[00:15:52] Speaker 05:
It's not my understanding that the estoppel would attach unless there was a final written decision.

[00:15:58] Speaker 05:
That's as to statutory estoppel, whether there's other common law estoppel theories or things that we might pursue.

[00:16:03] Speaker 03:
Well, it comes up here.

[00:16:04] Speaker 03:
And then we decide on the claim that's been instituted.

[00:16:08] Speaker 03:
And there are these other claims out there someplace.

[00:16:11] Speaker 03:
So you would forego any estoppel as to any of the other claims.

[00:16:16] Speaker 05:
I don't believe that there is an estoppel that would attach if there wasn't a final written decision on those claims.

[00:16:21] Speaker 05:
So I don't.

[00:16:22] Speaker 05:
I mean, I'd love to have the estoppel, of course.

[00:16:25] Speaker 05:
But I don't think that's there.

[00:16:26] Speaker 03:
It's in the statute.

[00:16:27] Speaker 03:
Of course, on this procedure, it seems to me that it would be absent, which surprised me in terms of endorsing such a procedure if, in fact, it's so clear cut that these claims are valid.

[00:16:43] Speaker 05:
Right.

[00:16:44] Speaker 05:
And again, Your Honor, I think there are other ways potentially to make estoppel arguments other than the statutory estoppel, just sort of common law principles of estoppel.

[00:16:52] Speaker 05:
But from my view,

[00:16:55] Speaker 05:
this turns on the word challenged, and whether in the context of a final written decision, does challenged mean anything that the petitioner raised initially, or does it mean what is challenged properly at that point in time?

[00:17:08] Speaker 05:
And if the board decides that the petitioner didn't meet the threshold in order to institute, then it hasn't been properly challenged.

[00:17:16] Speaker 05:
And for the most part...

[00:17:18] Speaker 07:
The statutory estoppel does not kick in for those claims that were petitioned for, but are not instituted.

[00:17:24] Speaker 05:
If there has not been a final written decision, then the statute, the language of the statute doesn't call for a statutory estoppel.

[00:17:30] Speaker 03:
So what's the point of this new America Invents Act?

[00:17:34] Speaker 03:
You go back to the district court, you just have another couple of years of litigation, enormous expense, which perhaps delay is a factor.

[00:17:43] Speaker 03:
We appreciate nothing is this simple.

[00:17:46] Speaker 03:
At the same time, isn't that exactly?

[00:17:48] Speaker 03:
what was supposed to be forestalled?

[00:17:52] Speaker 05:
I think that was the hope.

[00:17:53] Speaker 05:
But this is sort of the result of a petitioner filing a petition that doesn't adequately address all the claims.

[00:18:00] Speaker 05:
And so I think the system works fine if a petitioner is really truly able to challenge all the claims.

[00:18:06] Speaker 05:
And when they're not able to really truly challenge all the claims, you do get these results where it's sort of a mixed bag of things.

[00:18:12] Speaker 05:
And so the appropriate way to handle it would be don't file the IPR petition.

[00:18:17] Speaker 05:
There's no requirement that somebody accused of infringement has to file an IPR.

[00:18:22] Speaker 05:
It's obviously become extremely common.

[00:18:24] Speaker 05:
But in a case like this where there's some claims where there's good arguments and others that there aren't, then the resolution would be, let's just deal with all of them in district court.

[00:18:33] Speaker 05:
And I think the remedy here, if the court decided that partial institution is not allowed, is I think it needs to go back to the board in the first instance and re-decide whether it's a good use of board resources to institute it all.

[00:18:46] Speaker 05:
And if only some of the claims can be dealt with and others can't, well, maybe the board will decide that it's a better use of its time and resources, which are limited and which face, you know, tight deadlines to get these done, to say, petitioner, you've only made out of cases the half of these claims.

[00:19:00] Speaker 05:
We're just going to deny institution altogether because it's not worth the claim.

[00:19:03] Speaker 03:
That's not what the statute says.

[00:19:04] Speaker 03:
The statute says all you have to do is show that one claim is more likely than not invalid.

[00:19:11] Speaker 05:
But it also places discretion in the board to decide whether to institute and the decision whether to institute... It doesn't say to institute as to that one claim.

[00:19:19] Speaker 03:
It says to institute.

[00:19:21] Speaker 05:
But it still leaves discretion to the board when it will institute or not and that decision is not reviewed by this court.

[00:19:27] Speaker 03:
It doesn't sound like what's in the legislative history for this procedure that for the other claims you can go to the district court.

[00:19:38] Speaker 03:
You think that that's what

[00:19:40] Speaker 03:
the legislators had in mind, you can litigate a couple of claims in the office, appeal it up here.

[00:19:47] Speaker 03:
And so then one side or the other is stopped.

[00:19:50] Speaker 03:
They're both bound by the decision of the office as to that claim.

[00:19:55] Speaker 03:
And for the others, you go back to the district court.

[00:19:58] Speaker 05:
I think that's the impact of how the legislation has been.

[00:20:01] Speaker 03:
We will ask Mr. Piccolo, because it's so contrary to all of the publicity when this was enacted.

[00:20:09] Speaker 05:
Well, I agree.

[00:20:10] Speaker 05:
I think what we have is a circumstance where the intent, the supposed intent or the possible intent hasn't really played out in the way that it's been drafted, in the way that it's been instituted.

[00:20:21] Speaker 03:
The courts are for, aren't they, to assure that the legislative intent is fulfilled.

[00:20:27] Speaker 03:
If the board has got it wrong, it's our obligation, is it not?

[00:20:32] Speaker 03:
To get it right.

[00:20:33] Speaker 05:
But we're still limited by the language of the statute, which says that there's review for any challenged claims.

[00:20:41] Speaker 05:
And so whether the intent actually is fulfilled in the language of the statute, we still have the language of the statute, which doesn't allow for judicial review of claims where there was a challenge.

[00:20:52] Speaker 03:
The statute doesn't say you can institute as to, you can take some claims out of the system.

[00:20:59] Speaker 03:
All the statute says

[00:21:00] Speaker 03:
is that if you show more likely than not in validity as to one claim, you grant the petition.

[00:21:08] Speaker 05:
But it still leaves the discretion to the court.

[00:21:10] Speaker 03:
Or you can deny the petition.

[00:21:11] Speaker 05:
Correct.

[00:21:12] Speaker 03:
But it doesn't say you can grant or deny what you feel like.

[00:21:17] Speaker 05:
Well, I think then if we would be left, again, going back to the board in the first instance to decide whether on these facts it wanted to institute where it could only institute on some claims, but not on all claims.

[00:21:29] Speaker 05:
You do otherwise end up with the situation exactly as your honor pointed out.

[00:21:33] Speaker 05:
If there's a hundred claims and only one has some change, and it may be one that's not even an issue in the litigation, then 99 claims, the board has to spend time dealing with all for the sake of one claim for which an argument's been made.

[00:21:47] Speaker 01:
Why is this different from previously with respect to ex-party re-exams and re-issues, for example?

[00:21:55] Speaker 01:
at the Patent Office, the Patent Office would consider the patentability of all the claims once a decision was made to consider the re-examination, for example.

[00:22:06] Speaker 01:
Why is it different here?

[00:22:07] Speaker 01:
Is it because there you had examiners that started the process and here it's an adversarial system?

[00:22:14] Speaker 05:
That could be.

[00:22:15] Speaker 05:
I don't know the answer to why this was written this way versus the way it was written for the prior system.

[00:22:21] Speaker 07:
Is that true for re-examinations that if

[00:22:25] Speaker 07:
a re-exam is granted on one claim in a 100-claim patent, then the PTO is going to do a re-examination on all 100 claims, regardless of whether it deemed there to be a substantial question of patentability on those other 99 claims?

[00:22:43] Speaker 05:
So I confess I don't know the answer to that question.

[00:22:45] Speaker 05:
The patent office in their time may know the answer to that, but I just confess I don't know what the answer to that is, unfortunately.

[00:22:54] Speaker 05:
I wanted to address also claim four and the arguments made as to claim four.

[00:23:02] Speaker 05:
So it's not clear to me based on the argument whether petitioners continuing to argue for a new construction different from the construction and the institution decision which they had argued for in their brief.

[00:23:15] Speaker 05:
For the reasons set forth in our brief would oppose that.

[00:23:18] Speaker 05:
There is no basis to raise a brand new construction on appeal that hadn't been proposed below.

[00:23:24] Speaker 05:
It is substantively different.

[00:23:25] Speaker 05:
They're attempting to remove the word executing from the construction.

[00:23:30] Speaker 05:
So this isn't just some minor little tweak or variation.

[00:23:32] Speaker 07:
Let's remove the procedural argument you're raising, and let's just assume that they would be very happy with the construction that the board announced in its institution decision.

[00:23:45] Speaker 07:
So now, what's wrong with that interpretation?

[00:23:49] Speaker 05:
What's wrong with the original institution?

[00:23:52] Speaker 05:
Well, the problem is that there's no showing that there's prior art that meets that construction.

[00:24:00] Speaker 05:
I think that the construction the board ultimately reached was the right one.

[00:24:02] Speaker 05:
It pointed to the language and the specification for that specific limitation, which was the visualizer.

[00:24:09] Speaker 05:
And that's what it relied on in reaching that construction.

[00:24:13] Speaker 03:
As a disclaimer, suppose for the sake of this procedural conversation,

[00:24:20] Speaker 03:
we decide that the board was wrong and that they did disclaim the object-oriented language, what happens?

[00:24:29] Speaker 05:
If there is a finding that object-oriented language is outside the scope of a data manipulation language, then there hasn't been a showing for any of the claims that they're invalid.

[00:24:42] Speaker 05:
And so you would need to reverse... Yeah, the claims aren't before us.

[00:24:45] Speaker 03:
You say any of the claims.

[00:24:47] Speaker 03:
So they can go to the district court?

[00:24:49] Speaker 05:
I was sloppy in my language, I apologize.

[00:24:52] Speaker 05:
I meant the claims for which there has been a final decision, the claims that we've cross appealed on, that that finding would need to be reversed.

[00:24:59] Speaker 05:
That object-oriented languages, whether there's embedded SQL or not, are outside the scope of the data manipulation languages used in these claims.

[00:25:10] Speaker 05:
So as to all those claims that had been invalidated by the board, that should be reversed and those claims should stand and we will go back to district court with a stoppile on those claims.

[00:25:23] Speaker 05:
Okay.

[00:25:25] Speaker 03:
I think, yes, you get another chance.

[00:25:27] Speaker 03:
Let's hear from Mr. Piccolo.

[00:25:29] Speaker 03:
I have some questions for him.

[00:25:54] Speaker 04:
Thank you, Your Honors, and may it please the Court.

[00:25:58] Speaker 04:
To Your Honor, Judge Newman's inquiry about the stopple.

[00:26:04] Speaker 03:
You know what's bothering me.

[00:26:06] Speaker 04:
There is no stopple.

[00:26:10] Speaker 03:
In the office's position, there is no stopple.

[00:26:13] Speaker 03:
That's what I would have thought.

[00:26:14] Speaker 03:
There is no stopple as to the claims that the Board declines to consider.

[00:26:23] Speaker 03:
They can go back to the district court on those claims, no matter what.

[00:26:27] Speaker 03:
So what's this elaborate procedure for if we can't resolve the issues as the legislator says was their intent?

[00:26:40] Speaker 04:
Well, Your Honor, I would say to that, that there's no command from Congress to resolve the whole patent.

[00:26:48] Speaker 03:
There's no command not to.

[00:26:50] Speaker 03:
Suppose they just thought, as Judge Showell and as I thought was the procedure, it goes into re-examine.

[00:26:58] Speaker 03:
You re-examine.

[00:27:00] Speaker 03:
And that this is supposed to be even better in that it's got finality?

[00:27:07] Speaker 04:
Your Honor, about re-examine, I don't think.

[00:27:09] Speaker 04:
I'm not positive.

[00:27:10] Speaker 04:
And I would be happy to submit a letter to the court afterward.

[00:27:13] Speaker 04:
I don't think all claims have to get re-examined on some basis.

[00:27:18] Speaker 03:
Send us your view on that.

[00:27:20] Speaker 04:
In 304, it talks about resolving the question.

[00:27:26] Speaker 04:
And in the first sentence of section 304, it says that there has to be a substantial new question of patentability affecting any claim.

[00:27:38] Speaker 04:
And then the reexamination is ordered addressing and resolving that question.

[00:27:44] Speaker 04:
So the question was, what claims were found to rate the

[00:27:48] Speaker 04:
connected to a substantial new question of patentability and then resolution of that question.

[00:27:54] Speaker 04:
Here, similarly or regardless, the statutory scheme here is clear.

[00:28:03] Speaker 03:
The language is quite different.

[00:28:04] Speaker 03:
It says that if any claim is more likely than not invalid, that goes farther than substantial question, then the board can decide

[00:28:15] Speaker 03:
or the examiner who's ever doing it can decide whether or not to institute the petition.

[00:28:21] Speaker 03:
Let's say that the petition challenges the entire patent.

[00:28:26] Speaker 03:
Isn't that the only choice that's available to the office, whether to grant the petition or deny it?

[00:28:36] Speaker 04:
Respectfully no, Your Honor.

[00:28:37] Speaker 04:
Congress didn't say that.

[00:28:38] Speaker 04:
And the PTO's promulgation, which was given

[00:28:43] Speaker 04:
wide authority to promulgate regulations, and that's found in section 316.

[00:28:47] Speaker 04:
The office's rule on institution, rule 42.108, which has been used many, many times by the office and has come up at various points in litigation, that the patent office, the board, has to find a reasonable likelihood affecting

[00:29:12] Speaker 04:
as to the petition, what was submitted in the petition.

[00:29:16] Speaker 04:
And this rule expressly says all, some, or none, all, some, or none, can go into the IPR.

[00:29:23] Speaker 04:
So you open the gate.

[00:29:24] Speaker 04:
You don't have to put any in.

[00:29:26] Speaker 04:
Or if there's a reasonable likelihood, some go in.

[00:29:29] Speaker 04:
And in this case, claims two and 11 to 16, the board, and this court should not address that question, but the board had ample reason to close the gate

[00:29:41] Speaker 04:
on claims two and 11 to 16 because of things such as not pointing properly specifically enough to the prior art and construing means limitations to get to structure in complements soft patent specification.

[00:29:56] Speaker 04:
So those claims were far different than claims one and three to 10 that the board did let into the room of IPR through the gate and the parties hotly contested

[00:30:10] Speaker 04:
those claims, which resulted, and wisely so, in a final decision by the board.

[00:30:17] Speaker 04:
And that's what these parties are now arguing about on appeal, the merits of those claims.

[00:30:24] Speaker 03:
Well, I'm trying to figure out the legislative intent, however it should come out.

[00:30:30] Speaker 03:
And it just seems, from everything that the legislators thought that they were doing, that their intention was to move the patent.

[00:30:41] Speaker 03:
It's understood even if you have 200 claims, there's only one invention per patent.

[00:30:47] Speaker 03:
If there's more than one, then you restrict the patent.

[00:30:50] Speaker 03:
So you have one invention, however it's claimed 200 different ways.

[00:30:55] Speaker 03:
So if any one of those claims is more likely than not invalid, found at the threshold at the institution, and the petitioner has requested, let's narrow it to the petitioner,

[00:31:10] Speaker 03:
It's requested review of all of the claims.

[00:31:14] Speaker 03:
I'm trying to understand whether the legislative purpose is nonetheless to cut back on resolving the issues as to that patent so that you can spend a few years before the office, plus an appeal here and whatever other petitions you want, but you can't go to the district court and everyone seems to agree

[00:31:39] Speaker 03:
that you can go back now to the district court to where you were a few years ago and start again with the other claims.

[00:31:48] Speaker 03:
There's no estoppel.

[00:31:50] Speaker 03:
There's no admission against interest.

[00:31:54] Speaker 03:
There's nothing.

[00:31:54] Speaker 03:
So meanwhile, the patent is expiring.

[00:31:58] Speaker 03:
You think that's what the legislature's had in mind or you think they just didn't think about it?

[00:32:04] Speaker 04:
Your Honor, respectfully, Congress

[00:32:07] Speaker 04:
It's clear that Congress wanted to assist district courts by streamlining patentability determinations going back to the PTO.

[00:32:18] Speaker 04:
And any streamlining or simplification assists district courts.

[00:32:22] Speaker 03:
This isn't even admissible or evidential.

[00:32:27] Speaker 03:
There's no estoppel.

[00:32:29] Speaker 04:
For claims 1 and 3 to 10, there is.

[00:32:33] Speaker 04:
Because they went through the IPR process.

[00:32:37] Speaker 04:
were resolved in a final written decision by the agency.

[00:32:41] Speaker 07:
I guess the question is whether you think that Congress had intended and expected that the agency would chop IPR petitions in half so that it would only go forward on the merits on half of a patent and then throw back the other half of the patent at the district court so that in effect you would have litigation in two different forums

[00:33:08] Speaker 07:
Or do you think that Congress really expected litigation with respect to a certain patent would truly be resolved in one form or the other, either the PTO or the district court, but not have this kind of two-part, two-stage process that the agency has now created with its rulemaking?

[00:33:35] Speaker 04:
Thank you, Your Honor.

[00:33:37] Speaker 04:
35 USC 314 does not require the patent board to institute IPRs.

[00:33:48] Speaker 07:
My question is more, what do you and the agency think?

[00:33:51] Speaker 07:
Do you think the Congress contemplated this outcome?

[00:33:55] Speaker 07:
That this was their intent?

[00:33:57] Speaker 04:
Yes, Your Honor, because, for example, as we discussed in our brief, there's legislative history from Senator Kyle, for example, that

[00:34:06] Speaker 04:
the PTAP and there's express statutory authority, we could stop having these proceedings if we need to catch up.

[00:34:14] Speaker 04:
It's better to not have them.

[00:34:16] Speaker 04:
So there was wide reaching discretion for the agency about instituting part or some or not instituting many in order for us to try to complete these challenging proceedings within a year.

[00:34:34] Speaker 04:
And Congress was

[00:34:36] Speaker 04:
very interested that one, the petition shows a reasonable likelihood, and two, that the proceeding could be done and the PTAB could handle it.

[00:34:45] Speaker 04:
We're getting hundreds and upwards, over thousands of these over the last couple of years.

[00:34:53] Speaker 07:
Sure, but that point is just about whether to do an IPR or to elect not to do an IPR.

[00:35:00] Speaker 07:
Sort of an all or nothing question.

[00:35:02] Speaker 07:
What we have in front of us today

[00:35:04] Speaker 07:
is something that looks more piecemeal, at least with respect to this particular IPR and several other IPRs.

[00:35:11] Speaker 07:
So the question is, is there something you can point to that Congress expected that outcome?

[00:35:19] Speaker 04:
Well, it's permitted by the statute.

[00:35:21] Speaker 03:
I think, Mr. Piccolo, if you look at what Senator Kyle kept saying over and over, he was saying that these decisions would move from the district court to the office.

[00:35:34] Speaker 03:
not half and half.

[00:35:37] Speaker 03:
And this is what I find so troubling about this, to try and get it right.

[00:35:43] Speaker 03:
We understand with sort of a gossipy perhaps that district courts that might in the past have stayed their actions because of what's happening in the office are taking a different position and that it isn't quite working out.

[00:36:04] Speaker 03:
as it seems some of the legislators thought, well, this is a difficult and I think important question.

[00:36:18] Speaker 03:
Let's think after we hear the rest of the arguments whether further briefing might help to try and straighten it out once and for all.

[00:36:27] Speaker 04:
If I could say one point, Your Honor.

[00:36:30] Speaker 04:
Go ahead.

[00:36:33] Speaker 04:
The initiating statute, 35 U.S.C.

[00:36:36] Speaker 04:
314, has enough breadth to permit the agency to construe it the way it has.

[00:36:44] Speaker 04:
Our construction, and under Chevron, has been a permissible construction to promulgate rules which are consistent with cases of this court, such as St.

[00:36:53] Speaker 04:
Jude, Dominion Dealer, and Quozo, that we have authority.

[00:36:57] Speaker 04:
And our institution decisions are not revealable by this court.

[00:37:03] Speaker 04:
So I want to reemphasize the lack of reviewability and the breadth in the statute to give us chevron deference on choosing how we are going to implement the statute that we administer.

[00:37:17] Speaker 07:
OK.

[00:37:17] Speaker 07:
My other question, I'm sorry, to ask is SAS's procedural argument that it was blindsided by a new claim construction

[00:37:31] Speaker 07:
by the board in its final written decision.

[00:37:34] Speaker 07:
And it requested to be given a shot at putting on a case with respect to that new construction.

[00:37:46] Speaker 07:
Let's just say hypothetically the patent board institutes a fresh brand new claim construction in a final written decision in an IPR, one that neither party really expected.

[00:38:02] Speaker 07:
Is it your view that APA due process, there are some expectations and requirements for the agency in an instance like that to somehow reopen the record, perhaps in a very limited way, but nevertheless provide both parties a meaningful opportunity to explain their case under this very fresh new claim construction?

[00:38:32] Speaker 04:
Thank you, Your Honor.

[00:38:34] Speaker 04:
The board's rehearing rule permits any party, and I'm specifically looking at 37 CFR section 42.71d, any party to request rehearing.

[00:38:52] Speaker 04:
The party has to be dissatisfied with the decision, so I think what you just talked about, either party would have a chance.

[00:39:03] Speaker 04:
I'm familiar with this rule that the party in a rehearing request should show.

[00:39:10] Speaker 04:
And the rule is very clear on what should be the meat in the rehearing request, that the party.

[00:39:17] Speaker 04:
And it's not that, I guess, hard to do if the board really maybe did something it shouldn't have, because the rule says the party could discuss points

[00:39:31] Speaker 04:
that the party believes the board misapprehended, which I think goes to that sequence of events, or overlooked, which may go to some missed evidence.

[00:39:44] Speaker 04:
The rehearing request rule is a very good pre-appeal rule that if the board did something that was misapprehended,

[00:39:59] Speaker 04:
If it misapprehended something or overlooked something, a party has a clear regulatory chance.

[00:40:05] Speaker 04:
And people should take advantage of this rule if they truly think that something maybe popped up or was overlooked.

[00:40:15] Speaker 04:
So I think- Let me ask it differently.

[00:40:19] Speaker 07:
I'm sorry.

[00:40:20] Speaker 07:
Go ahead.

[00:40:20] Speaker 07:
If the board in a final written decision wrote a rejection,

[00:40:30] Speaker 07:
of a claim that everybody would recognize is a new ground of rejection, a new ground of unpatentability.

[00:40:39] Speaker 07:
Certainly you wouldn't say, yes, they get to do that and that's the end of the game and the patent owner is out of luck.

[00:40:45] Speaker 07:
Correct.

[00:40:46] Speaker 07:
You are very comfortable in agreeing with me that the agency would give the patent owner or the applicant in that instance like that an opportunity to go back and try to

[00:40:58] Speaker 07:
put on a case for patentability in light of this new ground of unpatentability.

[00:41:04] Speaker 07:
I agree, Your Honor.

[00:41:05] Speaker 07:
Okay, so now my hypothetical relevant to this case is what if the board issues in its final written decision in an IPR a new ground of patentability, okay, and based on a brand new claim construct.

[00:41:24] Speaker 07:
And so my question to you is, in a situation like that,

[00:41:28] Speaker 07:
Should the petitioner be given an opportunity, like a patent owner would in the prior hypothetical, to go back and put on a case for why, under that new ground of patentability, why nevertheless the claims are unpatentable now that the petitioner understands what the board thinks about the scope of a given claim?

[00:41:50] Speaker 07:
So what's the answer to that?

[00:41:55] Speaker 04:
That's an interesting question, Your Honor.

[00:41:58] Speaker 04:
give a couple of quick, which I hope are helpful, thoughts.

[00:42:03] Speaker 04:
And that is we do have a new ground of rejection rule that makes it non-final.

[00:42:10] Speaker 04:
And the applicant or aggrieved party can come back.

[00:42:14] Speaker 04:
I'm not aware of, and I think we don't, have a new ground of patentability rule.

[00:42:18] Speaker 04:
But I respectfully submit that 37 CFR section 42.71D

[00:42:28] Speaker 04:
aptly takes care of that situation because the board, my argument to the board would be that honorable board, you misapprehended my claim construction, the other party's claim construction, any reasonable claim construction.

[00:42:45] Speaker 04:
Here is what, because I've been advocating and maybe there's some estoppel or something that I've been saying, you get to restate your claim construction or appeal

[00:42:58] Speaker 04:
that what was done below was just a wrong claim construction.

[00:43:02] Speaker 04:
It was unreasonable.

[00:43:03] Speaker 04:
So I see two outs as to that.

[00:43:07] Speaker 04:
And there may be a third.

[00:43:08] Speaker 04:
But one would be directly request re-hearing.

[00:43:11] Speaker 04:
And two would be appeal that it was an unreasonable claim construction.

[00:43:16] Speaker 07:
Right.

[00:43:16] Speaker 07:
But they don't have the third option to also argue, even if you disagree with my renewed claim construction arguments,

[00:43:27] Speaker 07:
I should have an opportunity to pursue an unpatentability theory under this brand new claim construction.

[00:43:39] Speaker 04:
I've now thought of a third possibility, maybe arrow in the quiver, and that is that the agency head has authority under 37 CFR 1.181 to 183.

[00:43:54] Speaker 04:
to superintend the office or grant petitions in extraordinary circumstances.

[00:44:02] Speaker 04:
If I were the aggrieved person on the other side or whatever, I would be researching and establishing a petition along that line to maybe reopen it.

[00:44:13] Speaker 04:
But it does sound like an extraordinary circumstance where justice requires that something be done as a third possibility.

[00:44:21] Speaker 04:
I get back to, I think,

[00:44:24] Speaker 04:
Top item to pursue would be a request for rehearing.

[00:44:26] Speaker 04:
My next item would be an appeal to this court.

[00:44:29] Speaker 04:
And then maybe do all three or do the petition before appealing or something, but a petition to the agency head or to the board.

[00:44:37] Speaker 04:
It's been delegated to the chief administrative patent judge.

[00:44:41] Speaker 04:
And there may be a way to stop.

[00:44:45] Speaker 04:
I think what's critical is to stop the appeal clock and possibly get some better communication between the parties and the board.

[00:44:52] Speaker 04:
But I would also say that rehearing is well suited to that.

[00:44:57] Speaker 01:
Well, I do have a question.

[00:44:58] Speaker 01:
When you say rehearing is well suited, I think the point that was made was that in a request for rehearing, there is no opportunity to present new evidence.

[00:45:09] Speaker 01:
And there have been some cases that have come before us where the PTAB has said, you can't point to a different column in this patent.

[00:45:19] Speaker 01:
because that's new evidence.

[00:45:21] Speaker 01:
You pointed to column three before, now you can't point to column six.

[00:45:25] Speaker 01:
So what about the position that when the argument is that the claim construction has changed and now I want to point to a different part of a reference or maybe my secondary reference, for example, in an obviousness combination, how do I do that?

[00:45:41] Speaker 01:
How do I get the opportunity to do that when initially the board said the claim construction was one thing and now

[00:45:49] Speaker 01:
It says it's something else in the final decision.

[00:45:56] Speaker 04:
I would, like assume arguing or pitch the board's claim construction and say, now I have under the Administrative Procedure Act or something, every right and opportunity to remake my argument, including pointing to evidence already of record.

[00:46:16] Speaker 04:
I mean, I would have no problem.

[00:46:17] Speaker 04:
laying all that out and saying that the construction that the board applied, here's my answer to it with evidence of record.

[00:46:27] Speaker 04:
My construction, board, you misapprehended.

[00:46:31] Speaker 04:
You should retreat and go to my construction.

[00:46:34] Speaker 04:
But I think in a sense, if it's a new construction, not posited by either party, then there could be a door opening.

[00:46:46] Speaker 04:
The rehearing request would be a great vehicle for that, that the door was opened by the board with this new claim construction.

[00:46:54] Speaker 04:
I think, board, you misapprehended and you overlooked other evidence that relates to this claim construction.

[00:47:01] Speaker 04:
So I could see a reasonable rehearing request being made given those factual predicates.

[00:47:08] Speaker 01:
What if the decision on the hearing request doesn't even address this issue?

[00:47:13] Speaker 01:
It says, no, I got the claim construction right,

[00:47:15] Speaker 01:
doesn't even address whether there should be an opportunity for new evidence to be presented.

[00:47:25] Speaker 04:
Well, that would be part of the agency's action subject to appeal.

[00:47:29] Speaker 04:
I would hope that the board, I think the board has a fair amount, not a long period of time to address it, but I would hope that between the three APJs they would

[00:47:44] Speaker 04:
try to doubt all the I's and cross all the T's, that what is now being requested is fully addressed.

[00:47:52] Speaker 04:
Because maybe it just might lead to relief being granted.

[00:47:57] Speaker 04:
So I hope that's just a hypothetical and that doesn't happen.

[00:48:02] Speaker 03:
OK.

[00:48:04] Speaker 03:
Thank you, Mr. Piccolo.

[00:48:05] Speaker 03:
We're glad to have you here.

[00:48:07] Speaker 03:
We've been saving a lot of questions for you.

[00:48:11] Speaker 04:
Thank you, Judge Mayorkas.

[00:48:15] Speaker 03:
Mr. Marlach, you have five minutes for rebuttal and the cross-appeal.

[00:48:21] Speaker 06:
Thank you, Your Honor.

[00:48:23] Speaker 06:
Let me start by saying, Judge Chen, I think the process that you just described is exactly what we have here.

[00:48:30] Speaker 06:
We have a brand new claim construction at the time of the final written decision that's asked to not have an opportunity to address.

[00:48:36] Speaker 06:
And it is akin to a new ground of patentability.

[00:48:39] Speaker 06:
And I did not hear an answer from my friend from the government as to what we should have done other than file a request for rehearing, which is what we did.

[00:48:47] Speaker 07:
Right.

[00:48:48] Speaker 07:
And I'm still frustrated why your request for rehearing didn't do more or say more in response to the alternative construction the board adopted and explain why even under that claim construction, if that's the playing field, then this is why the prior art of record still renders this claim obvious.

[00:49:06] Speaker 06:
And again, your honor, I think limited by the rules of the board at that point, what we were allowed to say, the evidence and arguments would be considered new arguments.

[00:49:14] Speaker 06:
We thought the better procedure was to ask for permission to do it.

[00:49:17] Speaker 07:
You had a new construction.

[00:49:18] Speaker 07:
The playing field changed.

[00:49:20] Speaker 07:
At least that's the position you had now.

[00:49:23] Speaker 07:
That's the position you had then.

[00:49:25] Speaker 07:
Under looking at this claim in a new light, as the board did, that was your time to step forward and say, OK, if this is what you really think the claim means now, then this is why

[00:49:36] Speaker 07:
Even that claim is no good.

[00:49:38] Speaker 06:
Which is what we would have done had the board granted our rehearing request.

[00:49:41] Speaker 06:
We didn't want to bake into the rehearing request itself, basically grant our own rehearing request by having the board consider everything we put into the single paper.

[00:49:51] Speaker 06:
We thought the proper procedure was ask for permission to submit the evidence and the arguments directed at the new construction.

[00:49:56] Speaker 06:
And we also in, don't forget, in the rehearing request, we were asking the board to undo the claim instruction.

[00:50:01] Speaker 06:
So that was a significant part of the rehearing request as well.

[00:50:06] Speaker 06:
I think Judge Shen, your hypothetical that you asked me about, about if there's a hundred claims in a patent and the patent office only decides or issues a final decision as to claim 44, then I think I heard my friend from the patent owner agree that perhaps in that situation the best thing for the board to do is just deny institution.

[00:50:30] Speaker 06:
That if the board makes the assessment at the outset that

[00:50:35] Speaker 06:
sufficient showing is not made as to all the challenge claims, then maybe the decision should just be a threshold no, and we're not going to institute the IPR.

[00:50:43] Speaker 06:
That would be more consistent with the legislative history and the statutory construction and would give us the certainty in district court that we're looking for, but also lead to more streamlined petitions, less kitchen sink type petitions.

[00:51:00] Speaker 06:
To your point Judge Newman, we do think the legislative intent is clear and it's clear in the statute itself.

[00:51:06] Speaker 06:
When Section 318A says any patent claim challenged by the petitioner, we think that very clearly means the claims that the petitioner elected to challenge in the petition and that's what the board's final written decision must address.

[00:51:26] Speaker 01:
Do you agree that Chevron deference is due to the PTO's interpretation of 318?

[00:51:33] Speaker 06:
We do not, Your Honor.

[00:51:34] Speaker 06:
First of all, we don't believe that the PTO really has, there is any rule or regulation to which the PTO is interpreting that particular statutory section.

[00:51:44] Speaker 06:
They are saying that our rule that allows partial institution goes to section 312, that they have discretion to

[00:51:52] Speaker 06:
whether to institute.

[00:51:53] Speaker 06:
There really is no PTO rule of regulation directed to 318 itself.

[00:51:57] Speaker 06:
And even if there were, we don't believe it's due any deference because it's contrary to the clear statutory intent.

[00:52:03] Speaker 07:
But it seems to me that your position in some ways is predicated on the idea that if one claim gets granted IPR, all claims get granted IPR.

[00:52:15] Speaker 07:
And then that does sort of come into tension with 316, which

[00:52:22] Speaker 07:
which has provisions about how the agency has been granted authority to set up standards and procedures for conducting these IPR proceedings.

[00:52:32] Speaker 07:
And they've done that.

[00:52:33] Speaker 07:
And they've done that through rule by saying, we're only going to actually review on the merits those claims that we have found that it's more likely than not that the claims are unpatentable in view of the petition.

[00:52:48] Speaker 07:
So that's where I could see Chevron deference coming in, or the question of whether there should be Chevron deference to this rulemaking.

[00:52:57] Speaker 06:
But you're correct, Your Honor, that under 316 the Patent Office does have authority to adopt rules and regulations for the conduct of the IPR, but that discretion, to the extent they have it, does not extend so far as to violate the statute.

[00:53:12] Speaker 06:
And we think what they have done

[00:53:15] Speaker 06:
in allowing institutions or issuing final written decisions that don't address all of the challenge claims, that's directly contrary to 318.

[00:53:28] Speaker 06:
So the discretion does not extend that far.

[00:53:32] Speaker 06:
And if the court has no questions on the cross-appeal for me, I will rest on the papers on that.

[00:53:38] Speaker 03:
Thank you, Mr. Burr.

[00:53:40] Speaker 07:
Thank you.

[00:53:41] Speaker 07:
Just so I can confirm, on the cross appeal, that's data manipulation language?

[00:53:47] Speaker 06:
That was the data manipulation language and the graphical representation of flows within the retrieved source code to claim construction issues that my friend for the patent owner has appealed.

[00:53:58] Speaker 03:
Okay, thank you.

[00:54:01] Speaker 03:
Mr. Toppick, you want to argue with Mr. Piccolo?

[00:54:04] Speaker 05:
Argue with Mr. Piccolo?

[00:54:06] Speaker 05:
No, I would probably not argue with Mr. Piccolo.

[00:54:10] Speaker 05:
I understand my rebuttal time really should be on the cross appeal.

[00:54:13] Speaker 05:
I do have some comments on their appeal I'd be happy to make, however you prefer.

[00:54:20] Speaker 07:
Well, a part of their appeal is that they should be given a second crack to go after claim four under the board's new construction of data flows.

[00:54:33] Speaker 07:
And if it really is a new construction,

[00:54:38] Speaker 07:
Why shouldn't they be given that chance?

[00:54:39] Speaker 05:
Sure.

[00:54:40] Speaker 05:
So first, I think they could have addressed this in re-hearing.

[00:54:43] Speaker 05:
There was nothing that stopped them from saying, you know, you've overlooked these parts and these references.

[00:54:49] Speaker 05:
We're not talking about an instance where they could find new art or things like that.

[00:54:53] Speaker 05:
I mean, they were limited by what prior art they were looking at.

[00:54:56] Speaker 05:
It would most be an issue of explaining to the board why what they pointed to for the original construction also applies under the new construction.

[00:55:05] Speaker 05:
If we look at what they're relying on in their brief now, they're attempting to say a message flow is the same as a data flow because message equals data.

[00:55:14] Speaker 05:
And if you look in the briefs and look at what they're actually relying, what they're saying they would really be presenting to the board, it doesn't show what they say that it shows.

[00:55:24] Speaker 07:
And so it really... I agree, they've been a little vague, but I guess they are saying they'd like to go back to their expert and have their expert explain why

[00:55:33] Speaker 07:
Perhaps it was common knowledge in the art for these graphical representations to have icons.

[00:55:41] Speaker 07:
The icons aren't that big of a deal when it comes to these IDEs.

[00:55:46] Speaker 05:
And you have also the issue of icons for data processing steps, which I think might be more of an issue.

[00:55:52] Speaker 05:
But I think they're still limited by what those references actually show.

[00:55:56] Speaker 05:
And I don't think they've pointed to anything that would make any difference.

[00:55:59] Speaker 05:
And let's not forget the remedy that they're asking for here, really,

[00:56:03] Speaker 05:
is to propose an entirely new construction that is not the construction from the original institution.

[00:56:09] Speaker 05:
It's a new and different construction.

[00:56:12] Speaker 01:
But the question, I think, is whether if we were to affirm the board's construction, whether they should have an opportunity to present under that construction.

[00:56:23] Speaker 01:
So your comment about the claim construction and what they're trying to argue, I don't think that's what they're trying to argue.

[00:56:30] Speaker 01:
What they're saying is that

[00:56:31] Speaker 01:
if we were to affirm the claim construction, they wouldn't have an opportunity to present evidence on that claim construction.

[00:56:37] Speaker 05:
Right.

[00:56:38] Speaker 05:
So as to that issue, again, they had the opportunity to move for rehearing.

[00:56:43] Speaker 05:
And I think, I'll also point out, they argued in the argument leading up to the final written decision that it would have been perfectly appropriate for the board to construe claims for the very first time in the final written decision, which presents the same issues as a changed construction.

[00:56:58] Speaker 05:
Either way,

[00:56:59] Speaker 05:
you're left in a situation where the parties just have to do their best to sort of look at the constructions that we started with.

[00:57:06] Speaker 05:
Where else could that go?

[00:57:07] Speaker 05:
And put forth all the evidence that gives a record that would allow for a decision.

[00:57:12] Speaker 01:
Otherwise... Put your position that once there's an original construction, because here, this is different.

[00:57:16] Speaker 01:
The board said, this is how I construe this term in its initial decision.

[00:57:20] Speaker 01:
And then, from then on, the parties are supposed to assume that that's not set in stone.

[00:57:25] Speaker 01:
I must present evidence under alternative constructions as well.

[00:57:29] Speaker 01:
Is that your position?

[00:57:30] Speaker 05:
Yes.

[00:57:30] Speaker 05:
And I think that's why they've said that it would have been appropriate for the board to issue brand new constructions in the final round decision.

[00:57:36] Speaker 05:
You otherwise end up in a situation where we kind of keep going back and keep going back.

[00:57:41] Speaker 05:
I mean, if they wanted to have a process with a Markman hearing followed by a trial, that's what would happen in a district court.

[00:57:48] Speaker 05:
When you have the limited time period for an IPR to get done,

[00:57:51] Speaker 05:
it has to be done a little bit differently.

[00:57:53] Speaker 05:
And to keep going back any time there's a modification to an original claim construction, and we're not talking about something that's completely out of left field or that wasn't found in the specification or anything like that, then the opportunity is really in the rehearing motion to point to whatever evidence they had developed.

[00:58:12] Speaker 07:
But at the same time, I'm sorry, I do have another question.

[00:58:15] Speaker 03:
One more, sure.

[00:58:16] Speaker 03:
We need to move on.

[00:58:18] Speaker 07:
Where during the entire trial phase did your side ever press the claim construction that the board actually adopted in the final written decision?

[00:58:30] Speaker 07:
Because I didn't find it.

[00:58:32] Speaker 07:
So that's why it seems to me it's fair to say that the board really came up with it on its own.

[00:58:42] Speaker 05:
I think that's true.

[00:58:43] Speaker 05:
I don't think ultimately it's so terribly different that it requires going through the process all over again.

[00:58:51] Speaker 02:
Okay.

[00:58:53] Speaker 07:
Thank you.

[00:58:54] Speaker 03:
Okay.

[00:58:55] Speaker 03:
All right.

[00:58:56] Speaker 03:
Thank you.

[00:58:57] Speaker 03:
Thank you all.

[00:58:58] Speaker 03:
This is taken under submission.