[00:00:13] Speaker ?:
So.

[00:00:30] Speaker 00:
OK, I think we're set.

[00:00:31] Speaker 00:
Please begin.

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

[00:00:32] Speaker 04:
Good morning.

[00:00:33] Speaker 04:
My name is Tarek Kafami.

[00:00:35] Speaker 04:
I'm here representing the appellant security people.

[00:00:38] Speaker 04:
You may please the court.

[00:00:40] Speaker 04:
Your honor, the board's errors in this case was in applying the test for obviousness as if it were the way to determine the level of skill in the art.

[00:00:52] Speaker 04:
Rather than resolving the level of ordinary skill in the art, the board instead searched for a person capable of producing the article recited in the claim from the teachings of the cited references and deemed that that individual

[00:01:10] Speaker 04:
was the person of ordinary skill and accordingly found the claim obvious.

[00:01:15] Speaker 04:
In effect, Your Honors, the board examined the question not whether the invention would have been obvious to the person of ordinary skill, but whether it would have been so to somebody standing in the shoes of the inventor.

[00:01:27] Speaker 00:
Well, even if we agree with you with respect to the error of the board,

[00:01:32] Speaker 00:
How is it clear to us that that really affected or had anything largely to do with the analysis and the conclusions of the board?

[00:01:40] Speaker 04:
Your Honor, the answer to that question is in the board's decision itself at page 22.

[00:01:45] Speaker 04:
The board says there is no persuasive evidence.

[00:01:52] Speaker 04:
I'm sorry, where are you reading?

[00:01:54] Speaker 04:
I'm sorry.

[00:01:54] Speaker 04:
This is just below the middle of the page.

[00:01:58] Speaker 04:
The paragraph begins, based on the evidence.

[00:02:01] Speaker 04:
Sure.

[00:02:01] Speaker 04:
Thank you.

[00:02:02] Speaker 04:
There is no persuasive evidence that installation technician or a manager of a health club having all the teachings of the references before him or her would have had the skills to produce a structure defined by the claim.

[00:02:14] Speaker 04:
That was the patent owner's point in the case, that the person of ordinary skill could not have found or arrived at the subject matter recited in the claim, that the person would not have found the claim obvious.

[00:02:28] Speaker 03:
I guess, as I understand,

[00:02:30] Speaker 03:
What the board did was there were two proposed hypothetical skilled artisans from the two sides.

[00:02:38] Speaker 03:
One was somebody that's an engineer familiar with electromechanical locks with a certain amount of experience.

[00:02:46] Speaker 03:
And then your side proposed a manager of a health club, Jim.

[00:02:53] Speaker 04:
A technician as well.

[00:02:54] Speaker 03:
A technician as well.

[00:02:55] Speaker 03:
And then ultimately, between those two choices,

[00:03:00] Speaker 03:
the board picked the engineer as the skilled artisan.

[00:03:07] Speaker 03:
That's right.

[00:03:08] Speaker 03:
And then went ahead and said, okay, the health club manager or technician wouldn't have been able to make this invention.

[00:03:18] Speaker 03:
Correct.

[00:03:19] Speaker 03:
But if we agree with the board that between the two choices of who should be the hypothetical skilled artisan that the

[00:03:30] Speaker 03:
the engineer with experience with electromechanical locks is the right frame of reference over the health club manager slash technician then I think you know that resolves this aspect of the board's decision that you know then there's no reversible error

[00:03:54] Speaker 04:
Well, Your Honor, just because you get to the same answer doesn't mean that it excuses the manner in which the board got there.

[00:04:02] Speaker 04:
Because the selection of the person of ordinary skill also pervaded the rest of their opinion.

[00:04:08] Speaker 04:
It affected the very art that they considered.

[00:04:13] Speaker 03:
But what is wrong with preferring an engineer who has experience with electromechanical locks?

[00:04:22] Speaker 03:
over the health club manager as being the hypothetical one of ordinary skill in this part.

[00:04:29] Speaker 04:
Well, it becomes a question of substantial evidence at that point, Your Honor, and I agree the board can make a decision about which weight of the evidence it finds to be more persuasive.

[00:04:39] Speaker 01:
Counsel, this is a very unusual argument on the level of ordinary skill.

[00:04:45] Speaker 01:
This is not nuclear physics.

[00:04:47] Speaker 01:
I probably have skills closer to the locker room attendant in this field, but you've got this basic reference, Ogasawara, regarding describing a lock, and you've got two other references regarding adding electronics.

[00:05:09] Speaker 01:
Why are we arguing so much about the level of skill?

[00:05:12] Speaker 01:
Why don't we just look at the references?

[00:05:15] Speaker 04:
Well, Your Honor, this is an obviousness case.

[00:05:17] Speaker 04:
So level of skill is the issue.

[00:05:20] Speaker 04:
It is the prerequisite.

[00:05:22] Speaker 04:
In fact, we're not even supposed to construe claims until we understand who the person of ordinary skill is, because you construe the claims from that person's standpoint.

[00:05:33] Speaker 04:
So it is the question that has to be answered.

[00:05:35] Speaker 04:
Now, if this were anticipation, I agree with you.

[00:05:37] Speaker 04:
We go to the references.

[00:05:38] Speaker 04:
Do they teach what's claimed?

[00:05:40] Speaker 04:
The inquiry is done.

[00:05:42] Speaker 04:
But we can't just get over the idea of,

[00:05:45] Speaker 04:
You know, yes, it's not nuclear physics, and Judge Lurie, your educational background, I suggest, is far more than that of the manager.

[00:05:55] Speaker 00:
Well, is there a dispute that affected the result in terms of what the various pieces of prior art taught?

[00:06:04] Speaker 04:
I don't think there's a dispute as to the teachings of the references.

[00:06:07] Speaker 00:
So isn't that where

[00:06:10] Speaker 00:
in theory, of what the level of skill in the art could infect the analysis.

[00:06:16] Speaker 00:
And here, whether you're right or wrong, I think this is the point Judge Lloyd was making.

[00:06:21] Speaker 00:
If you look at these references, there's nothing in the analysis that suggests anything other than reading this, that it was infected by who, a person, or skill in the art.

[00:06:31] Speaker 00:
Is it your motive?

[00:06:32] Speaker 00:
Are you saying it affected the motivation aspect of this?

[00:06:35] Speaker 00:
Not what the reference is taught, but whether there was a motivation to combine?

[00:06:40] Speaker 04:
I think that's part of the analysis, Your Honor.

[00:06:44] Speaker 04:
I don't think there's a basic dispute about what the content of the references was.

[00:06:52] Speaker 04:
There is a dispute about whether the person of ordinary skill would have combined them in the manner suggested by the petitioner.

[00:07:00] Speaker 04:
But in fact, the board answered that question.

[00:07:04] Speaker 04:
Again, page 22.

[00:07:05] Speaker 03:
Can you just give a bottom line answer of why was it wrong for the board to conclude that between the two competing hypothetical skilled artisans, it was wrong for them to pick an engineer with experience with electromechanical locks rather than a health club manager?

[00:07:28] Speaker 03:
for an invention related to electromechanical locks?

[00:07:34] Speaker 04:
It was wrong, Your Honor, because they applied hindsight.

[00:07:37] Speaker 04:
They looked for the person that would satisfy the obviousness test and dubbed that individual the person of ordinary skill, rather than doing it correctly and first determining the person of ordinary skill and asking whether that person would have found the invention obvious.

[00:07:52] Speaker 04:
That is the fundamental error that the board committed.

[00:07:56] Speaker 04:
They approached the question in reverse,

[00:07:59] Speaker 04:
They asked, who do we need to make it obvious?

[00:08:02] Speaker 04:
And once they found that person, well, the answer presented itself.

[00:08:05] Speaker 04:
And the case was essentially over.

[00:08:08] Speaker 04:
So that is the error that we complain about.

[00:08:10] Speaker 04:
That is the error that we've addressed in our papers.

[00:08:13] Speaker 03:
So then are you conceding that if the board was right, or if we conclude the board was right in saying that for this type of claimed invention, this kind of technology,

[00:08:25] Speaker 03:
One of ordinary skill in this art is an engineer with experience with electromechanical locks, then you lose because, or you have other arguments.

[00:08:35] Speaker 04:
We have other arguments, Your Honor, and they are addressed in our papers.

[00:08:38] Speaker 04:
The first goes to the motivation issue that Chief Judge Prost addressed, and that is the question is not really whether a person of ordinary skill, whether it be the engineer or the technician, not whether that person

[00:08:53] Speaker 04:
presented with these references that the petitioner found would have found the claim obvious.

[00:08:58] Speaker 04:
Would they have even selected those references in the first instance?

[00:09:02] Speaker 04:
This is the WBIP versus Kohler case decided by this court.

[00:09:08] Speaker 04:
And Judge Moore, writing for the court, tells us that the real question is whether the skilled artisan would have plucked one reference out of the sea of prior art and combined it with another to address some need present in the field.

[00:09:23] Speaker 04:
The patent owner made the argument that Osigawa, which you raised, is really directed to an entirely different field.

[00:09:30] Speaker 04:
It's a high-security, safe application.

[00:09:33] Speaker 04:
And as Judge Laurie points out, that's not really what we have here.

[00:09:37] Speaker 04:
We have a lock that goes on lockers and health locks.

[00:09:40] Speaker 00:
Can I just ask you a couple questions about that?

[00:09:42] Speaker 00:
I think the other side says that you waived this argument.

[00:09:47] Speaker 00:
Ogasawa is not relevant prior art.

[00:09:51] Speaker 00:
And the other thing is that I think there are also statements in the record where you described Ogasawara as relevant prior art reference.

[00:10:04] Speaker 04:
Let me address that for you, Your Honor.

[00:10:06] Speaker 04:
So at page 272 of the appendix is where the patent owner commented on Ogasawara.

[00:10:15] Speaker 04:
The first comment that was made, this is right under the heading for Ogasawara, the first comment that was made is that Ogasawara describes a high security safe.

[00:10:25] Speaker 04:
And then on the very next page, page 273, the first full paragraph, a person of ordinary skill would not have considered the art of high security safes.

[00:10:37] Speaker 04:
So there was no waiver of any argument.

[00:10:39] Speaker 04:
The argument was made explicit that Ogasawara is not something that would have been considered.

[00:10:45] Speaker 04:
And then at J.A.

[00:10:47] Speaker 03:
830, where you conceded that the prior art that was part of the original prosecution, which included Okasawara, was all material prior art.

[00:10:57] Speaker 03:
And therefore, it was unnecessary to submit other pieces of prior art which were cumulative in light of those material prior art.

[00:11:05] Speaker 03:
J.A.

[00:11:05] Speaker 03:
830.

[00:11:07] Speaker 04:
That's the board's characterization, Your Honor?

[00:11:09] Speaker 03:
OK, what if I read J.A.

[00:11:11] Speaker 03:
830 and it says exactly what I just said it says?

[00:11:14] Speaker 03:
I'm sorry, 830 or A30?

[00:11:17] Speaker 03:
JA830.

[00:11:24] Speaker 03:
Discussed in the red brief.

[00:11:27] Speaker 04:
Let's go to the source material, Your Honor.

[00:11:29] Speaker 04:
Again, I'm at page 272, where the relevance of Ogasawara is stated explicitly.

[00:11:36] Speaker 03:
Your client filed this brief.

[00:11:38] Speaker 03:
These are your client's words at JA 830, lines 14 to 16.

[00:11:46] Speaker 03:
All right, this is a district court filing in the Northern District of California, San Francisco to Beijing, where your security people declared that this was material prior art.

[00:12:06] Speaker 03:
Yes.

[00:12:06] Speaker 03:
It was considered by the Patent Office?

[00:12:08] Speaker 04:
It was considered by the Patent Office.

[00:12:10] Speaker 03:
Right.

[00:12:10] Speaker 03:
So it's material.

[00:12:12] Speaker 04:
You said it.

[00:12:13] Speaker 04:
Security people said it.

[00:12:16] Speaker 04:
I don't think I've said anything that doesn't say it's material, Your Honor.

[00:12:19] Speaker 04:
Materiality is measured by the standpoint of what the examiner would consider.

[00:12:24] Speaker 04:
Not the person of ordinary skill.

[00:12:26] Speaker 03:
So, I don't know.

[00:12:28] Speaker 03:
This is starting to sound like an argument only a lawyer could love.

[00:12:32] Speaker 03:
When you say to the District Court,

[00:12:36] Speaker 03:
the Northern District of California, that Ogasawara is definitely material art.

[00:12:44] Speaker 03:
It doesn't mean material art?

[00:12:48] Speaker 04:
No, it means exactly what it says, Your Honor.

[00:12:50] Speaker 04:
It means material art.

[00:12:50] Speaker 04:
That's right, it does.

[00:12:52] Speaker 04:
It does?

[00:12:52] Speaker 04:
Yeah.

[00:12:57] Speaker 04:
And even if you conclude that Ogasawara would have been properly considered, Your Honor, there's still the question of the objective factors that the Board

[00:13:06] Speaker 04:
apparently disregarded.

[00:13:09] Speaker 04:
The board apparently believed that the part of the claim that was directed to the electronic key reader was somehow not that which provided the manager access.

[00:13:23] Speaker 04:
The board indicates that there was on page 28 of their opinion in the first full paragraph, there's insufficient nexus between claim for

[00:13:36] Speaker 04:
and the features that led to commercial success.

[00:13:38] Speaker 04:
But that's simply not the case, because the very feature that allowed for the commercial success, that allowed for the manager access and the programming, was that electronic key card reader.

[00:13:50] Speaker 04:
That was in Ms.

[00:13:50] Speaker 03:
Advocate's... The claim doesn't itself recite anything about the ability to reprogram the lock using the electronic key reader.

[00:13:59] Speaker 04:
Is that fair to say?

[00:14:00] Speaker 04:
It's an apparatus claim, so it doesn't restype the step of reprogramming.

[00:14:04] Speaker 04:
You're absolutely right.

[00:14:04] Speaker 04:
There's no programming element in the claim.

[00:14:09] Speaker 04:
There's no step of programming.

[00:14:10] Speaker 04:
You're right.

[00:14:10] Speaker 04:
But the element that allows for the programming is that electronic key card reader, Your Honor.

[00:14:15] Speaker 04:
Even the patent says so.

[00:14:17] Speaker 04:
In column three, beginning at line 66 through column four, about line 10.

[00:14:25] Speaker 04:
What?

[00:14:25] Speaker 03:
It talks about the ability for a manager to reprogram the lock?

[00:14:29] Speaker 04:
It talks about the specification?

[00:14:30] Speaker 04:
It talks about the manager access, your honor, not programming.

[00:14:34] Speaker 03:
That's right.

[00:14:35] Speaker 04:
There's nothing in there about programming.

[00:14:38] Speaker 04:
That's correct.

[00:14:41] Speaker 04:
Your honor, I'm well into the rebuttal time.

[00:14:53] Speaker 02:
Morning, Your Honors, and may it please the court.

[00:14:55] Speaker 02:
If I could, I'd like to start with this commercial success point.

[00:14:59] Speaker 02:
And Judge Chen, I think, is exactly right.

[00:15:01] Speaker 02:
There's nothing in the claim about reprogramming.

[00:15:04] Speaker 02:
And I think it's important to understand what this reprogramming is and how this advocate explained it in her deposition.

[00:15:12] Speaker 02:
The claim, claim four, says you have a key reader that accepts an identification device that allows access to the lock.

[00:15:21] Speaker 02:
plug in your ID key, it'll open the lock.

[00:15:25] Speaker 02:
The reprogramming starts by putting in a programming key, and the lock writes data onto that key.

[00:15:32] Speaker 02:
A new manager code is written to the key.

[00:15:36] Speaker 02:
So you need a key writer in order to perform this step.

[00:15:41] Speaker 02:
Then you take the programming key, you go to the next lock, you plug it in, and it reprograms.

[00:15:46] Speaker 02:
You're not using it as an identification, you're using it to reprogram.

[00:15:51] Speaker 02:
And Judge Chen is correct.

[00:15:53] Speaker 02:
There's no discussion of any of this in the patent.

[00:15:57] Speaker 02:
There's no discussion of how you would put in the manager's code.

[00:16:02] Speaker 02:
There is a discussion saying you can delete it.

[00:16:04] Speaker 02:
It says you can do that.

[00:16:06] Speaker 02:
If a manager leaves, you can delete their code.

[00:16:08] Speaker 02:
There's nothing about how you would program the code, how you would reprogram.

[00:16:12] Speaker 02:
Certainly nothing talking about the lock writing data onto some programming key.

[00:16:18] Speaker 02:
Simply not there.

[00:16:19] Speaker 02:
And so the board's decision

[00:16:22] Speaker 02:
that SPI had not established a nexus between alleged commercial success and claim four, and certainly supported by substantial evidence.

[00:16:31] Speaker 02:
I would like to go back to the person of ordinary skill in the art.

[00:16:37] Speaker 02:
And we disagree that the board looked at this backwards.

[00:16:41] Speaker 02:
The board did not.

[00:16:42] Speaker 02:
If you look at the order, the board doesn't say, OK, we need to equate the person of ordinary skill with the inventor.

[00:16:50] Speaker 02:
What the board does, it says, here are the relevant factors we need to consider.

[00:16:55] Speaker 02:
And it quotes case law saying, relevant factors.

[00:16:59] Speaker 02:
And it says, now we're going to work through some factors to try to figure this out.

[00:17:03] Speaker 02:
It starts by looking at the claim language and the specification.

[00:17:07] Speaker 02:
In the claim language, it notes things like a microcontroller.

[00:17:12] Speaker 02:
So that's a computer chip.

[00:17:15] Speaker 02:
The specification has similar technical discussions

[00:17:19] Speaker 02:
It talks about optical sensors.

[00:17:21] Speaker 02:
The patent itself suggests some technical sophistication.

[00:17:24] Speaker 02:
The board notes that.

[00:17:26] Speaker 02:
The board then talks about one of the named inventors, other patents, and notes that one of them is cited prior art.

[00:17:34] Speaker 02:
It says that prior art also suggests some technical sophistication, understanding of technology and engineering.

[00:17:41] Speaker 02:
It then moves on to consider testimony by

[00:17:45] Speaker 02:
SPI's corporate representative witness, Ms.

[00:17:48] Speaker 02:
Advocate, who says, when asked, what level of expertise would you need in order to build the lock if you were given the 180 patent?

[00:17:57] Speaker 02:
And she says, well, you'd need mechanical expertise, and you'd need electronic expertise.

[00:18:03] Speaker 02:
The board works through all of that.

[00:18:05] Speaker 02:
And finally, in the paragraph that counsel noted, where it says, on the other hand, there's no evidence that a health club manager

[00:18:15] Speaker 02:
could make this lock.

[00:18:18] Speaker 02:
What the court's saying there, there was a lot of debate in the oral argument about whether you're looking at someone who would use the lock, buy the lock, use the lock, install the lock, versus someone who could make the lock based on the written description in the 180 patent.

[00:18:34] Speaker 02:
That was the debate.

[00:18:36] Speaker 02:
And this, I understand this, is the court saying, on the one hand, petitioners provided a bunch of evidence.

[00:18:43] Speaker 02:
And we see a lot of evidence in the record.

[00:18:45] Speaker 02:
On the other hand, there's no evidence that a health club manager could take the patent, the written description, understand it, and practice the claimed invention.

[00:18:56] Speaker 02:
So the decision here is supported by substantial evidence.

[00:19:00] Speaker 02:
Certainly, the contrary position is not supported by any evidence.

[00:19:06] Speaker 02:
And finally, I think the court understands the point about Aguasuara.

[00:19:09] Speaker 02:
We do believe that any argument that

[00:19:13] Speaker 02:
One of skill in the art would not have considered it.

[00:19:15] Speaker 02:
It's waived.

[00:19:16] Speaker 02:
It's material.

[00:19:17] Speaker 02:
There are repeated statements that it's relevant prior art.

[00:19:20] Speaker 02:
But more than that, Your Honors, the 180 patent itself begins by saying, column one, one of the very first lines says, this invention relates to electronic locks, lockers, safes, cabinets, and other storage devices.

[00:19:38] Speaker 02:
It immediately then says, of course, electronic locks are known in the art.

[00:19:42] Speaker 02:
For example, electronic locks are used in hotel, guest rooms, safes.

[00:19:48] Speaker 02:
They can have temporary codes.

[00:19:49] Speaker 02:
They can have permanent codes.

[00:19:51] Speaker 02:
So the 180 patent itself suggests that Augustuara is within the same field.

[00:19:59] Speaker 02:
Certainly, it's addressing the same problem, which is allowing someone to put in a temporary code through a keypad to access the lock and then also providing some alternative means of accessing.

[00:20:11] Speaker 02:
Your honors, unless you have questions, I'd be happy to see the rest of my time.

[00:20:17] Speaker 02:
Thank you.

[00:20:27] Speaker 04:
Your honors, there was no debate about whether the teachings of the patent would allow the technician to produce the invention.

[00:20:36] Speaker 04:
In fact, the board says

[00:20:37] Speaker 04:
that there's no persuasive evidence that the technician or the health club manager having the teachings of the references before him or her would have had the skills to produce the structure defined by the claim.

[00:20:49] Speaker 04:
That was the question the board was investigating.

[00:20:52] Speaker 04:
And letting the test for obviousness, which that goes to, define the inquiry into the level of skill is always going to produce whatever level of skill is necessary to find the claim obvious.

[00:21:05] Speaker 04:
It's simply applied hindsight.

[00:21:08] Speaker 04:
And when defining the level of skill, we do not proceed in that reverse fashion.

[00:21:14] Speaker 04:
We proceed prospectively.

[00:21:17] Speaker 04:
As to the factors that were considered, we indicate in our papers that yes, sometimes this court has said education of the inventor is an appropriate thing to look at.

[00:21:28] Speaker 04:
But that's not what the board looked at.

[00:21:30] Speaker 04:
The board looked at the skill of the inventor again on page 22 of their opinion.

[00:21:36] Speaker 04:
Exhibit 1010, one of the primary inventors of the patents, relied upon by petitioner, demonstrates a knowledge of electrical and mechanical engineering principles.

[00:21:47] Speaker 04:
This suggests a level of skill that involves intimate familiarity with technology and engineering.

[00:21:52] Speaker 04:
They were commenting on the inventor's level of skill, and that's not appropriate.

[00:21:59] Speaker 04:
Your Honor, as to the objective criteria, the nexus was shown, the very feature

[00:22:06] Speaker 04:
allows for the manager access the reprogramming is recited in the claim and the board simply missed that.

[00:22:14] Speaker 04:
So for those reasons we ask that this court reverse.