[00:00:00] Speaker 04:
Our first case for argument today is 2017-1817, Assa Abloy v. Spectrum Brand.

[00:00:09] Speaker 04:
Mr. McKeon, please proceed.

[00:00:13] Speaker 00:
Good morning.

[00:00:14] Speaker 00:
May I please decode.

[00:00:15] Speaker 00:
The primary issue on appeal is whether the board exceeded its authority and denied due process by finding in its final written decision the claims unpatentable based on contention never raised by Spectrum.

[00:00:27] Speaker 00:
This is why in the final written decision, the board found it necessary to recast the contentions that were made by section.

[00:00:34] Speaker 00:
The board agreed with us that the Nielsen reference did not disclose steps A and B in the order required, but the board nevertheless found that there was motivation to modify the reference, modify that figure three, to find the claims unpatentable.

[00:00:51] Speaker 01:
In the blue brief at four, you say claim one is representative of most of the claims on appeal.

[00:00:57] Speaker 01:
Which ones aren't represented by claim one?

[00:01:00] Speaker 00:
I think, Your Honor, for this point I'm making here about A, B, it's claim one and its dependence.

[00:01:06] Speaker 00:
This does not apply to 14 and to 30.

[00:01:09] Speaker 00:
This particular point where we believe the board went off the rails and they created a new argument that was never presented applies just to claim one and its dependence.

[00:01:20] Speaker 01:
So all the appeal claims rise or fall with claim one.

[00:01:23] Speaker 00:
We made that contention.

[00:01:26] Speaker 00:
They don't seem to dispute that point.

[00:01:28] Speaker 00:
Although this particular point I'm making here about steps A and B does apply to claim one in particular.

[00:01:36] Speaker 00:
And I think it's important to really look at the timeline and way things progress through the IPR.

[00:01:41] Speaker 00:
Of course, the petition was filed, and we had two grounds, and we had claim charts attached.

[00:01:46] Speaker 00:
And for all the elements, you had these two references, Nielsen and Tarkus.

[00:01:51] Speaker 00:
The petition, nowhere in the petition

[00:01:53] Speaker 00:
Did spectrum say that if something was not disclosed, there is nevertheless motivation to modify Nielsen in the manner that meets the claims, in particular the step A and B point.

[00:02:05] Speaker 00:
And then the institution's decision comes out.

[00:02:08] Speaker 00:
And we all know that.

[00:02:09] Speaker 01:
It seems to me your primary argument is that the PTAB violated the APA because you weren't on notice that it was considering whether the asserted claims would have been obvious over Nielsen alone.

[00:02:24] Speaker 00:
That's sort of the primary umbrella argument, Your Honor, but I think the one that's particularly problematic in our view is one that they created in the final written decision that no one argued.

[00:02:35] Speaker 00:
This was the issue that, well, you know what?

[00:02:37] Speaker 00:
We agree with you.

[00:02:39] Speaker 00:
We agree with you that Nielsen does not disclose A and B, because they were arguing that.

[00:02:45] Speaker 00:
They argued in the case that, first of all, they said the order of staffs didn't matter.

[00:02:49] Speaker 01:
But the PTAB's references to combining

[00:02:55] Speaker 01:
Nielsen and Carcass are limited to claims 7 and 21, right?

[00:03:01] Speaker 00:
The combination was 7 and 21.

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

[00:03:05] Speaker 01:
And they're not an issue on this appeal.

[00:03:07] Speaker 00:
Well, it is in the sense that the broader issue we've raised in our briefing is that when they decided not to institute on the second round, they were doing a combination case, which was both Nielsen and Carcass in combination disclosed

[00:03:24] Speaker 00:
all the elements.

[00:03:26] Speaker 00:
And we believe that when they made that decision, they needed to proceed throughout the entire IVR on that basis.

[00:03:34] Speaker 00:
And then at the end, of course, they had a Nielsen-only finding.

[00:03:38] Speaker 00:
But again, Your Honor, I think really that that's why I want to focus on A and B, because that was the one that they just came out with at the end of the case.

[00:03:46] Speaker 00:
And they said that, well, we agree with you.

[00:03:49] Speaker 00:
There's a whole case we were arguing that Nielsen did not show A and B.

[00:03:54] Speaker 00:
We had a big argument with these guys on that.

[00:03:56] Speaker 00:
And at the end of the case, we get the final decision and they say, yeah, you're right.

[00:04:00] Speaker 00:
It doesn't show that.

[00:04:02] Speaker 00:
But it's obvious because you'd be motivated to modify it.

[00:04:05] Speaker 00:
That came out of left field.

[00:04:07] Speaker 00:
And that really is the fundamental problem we think requires correction by this court.

[00:04:11] Speaker 00:
And we think the SAS opinion, the SAS opinion from the Supreme Court is very helpful here.

[00:04:19] Speaker 00:
I mean, it talks, the majority opinion talks about the

[00:04:22] Speaker 00:
inquisitorial, inquisition process, if you will, the old way we did it.

[00:04:28] Speaker 00:
You know, the post grant procedures of the old way was the patent office sort of drove it.

[00:04:32] Speaker 00:
But the new way is an adversarial process, and there's contentions of the parties, and the party, the petitioner drives the process through their contentions.

[00:04:41] Speaker 00:
Not the director, the petitioner drives the process.

[00:04:45] Speaker 00:
And here we think the board

[00:04:48] Speaker 00:
did something totally different.

[00:04:49] Speaker 01:
I'm just willing to bet that your opposing counsel will say SAS is very helpful to them.

[00:04:54] Speaker 01:
Everybody seems to think SAS is very helpful.

[00:04:56] Speaker 00:
Well, we're going to have a lot of interesting discussion on that, I think, over the coming months and years, perhaps.

[00:05:00] Speaker 00:
But I think for this case in particular, though, the statements regarding who's doing what in the process.

[00:05:08] Speaker 00:
And the director is not the one that's making the contentions.

[00:05:11] Speaker 00:
The director is not the one that's driving it.

[00:05:13] Speaker 00:
It's the petitioner.

[00:05:15] Speaker 00:
And that's the point that we tried to make in our supplemental submission.

[00:05:19] Speaker 00:
In the Magnum Well Tools case as well, where this court said, in terms of the issues, it's not the board that raises the issues and argues the case.

[00:05:33] Speaker 00:
It's the petitioner and the petition.

[00:05:36] Speaker 00:
And that's where we think that the problems here were particularly poignant.

[00:05:45] Speaker 00:
You know, the precedent here, I mean, we think the fact that the board alone came up with this argument at the end, we think that's it.

[00:05:53] Speaker 00:
It requires a reversal on that basis.

[00:05:55] Speaker 00:
But, of course, this court's precedent is clear that in this court's SAS decision, you can't change theories midstream.

[00:06:05] Speaker 00:
In that particular case, you know, we had a new claim construction at the end.

[00:06:08] Speaker 00:
In the Dell case that we cite, an oral argument, you know, there was a particular

[00:06:14] Speaker 00:
and everyone was pointing to one element, but an oral argument, they started pointing to another element with some catty limitation.

[00:06:21] Speaker 00:
And this court said, no, you can't do that.

[00:06:25] Speaker 00:
Notice an opportunity.

[00:06:26] Speaker 00:
And finally, in the Novasa case, we cite, I think it's very persuasive here, same drill.

[00:06:31] Speaker 00:
It was a figure 18.

[00:06:32] Speaker 00:
People were looking at figure 18, but they didn't cite it for the particular proposition

[00:06:38] Speaker 00:
that in the petition and in the reply, they came up with a new point.

[00:06:41] Speaker 02:
If we disagree with you about your process argument, is there substantial evidence that supports the board's determination that Nielsen and a skilled artisan would disclose all of these elements?

[00:06:53] Speaker 00:
We don't believe so, Your Honor.

[00:06:55] Speaker 00:
I mean, it is spectrum that was the part that should have provided that substantial evidence to modify Nielsen in the way where steps A and B could be modified.

[00:07:04] Speaker 00:
And we know, because they never argued that,

[00:07:07] Speaker 00:
We know they didn't provide the substantial evidence.

[00:07:09] Speaker 00:
It didn't come from them.

[00:07:10] Speaker 00:
And if you look at the board's decision on A19, they have a site to an expert, their expert.

[00:07:17] Speaker 00:
That site doesn't support the proposition that it would be obvious, because they weren't arguing to modify Nielsen.

[00:07:24] Speaker 00:
They were saying Nielsen disclosed it.

[00:07:27] Speaker 00:
So we think there's no substantial evidence, in particular on this AB point, this step point that

[00:07:34] Speaker 00:
that the board came up with at the end.

[00:07:36] Speaker 00:
So no, we think that there's no substantial evidence to support this finding if you don't hear us on the process point.

[00:07:44] Speaker 04:
Well, on page JA19 of the PTA decision, which you've referenced a couple times, isn't the reference to the expert testimony, I think that's exhibit 1004, paragraph 29, isn't that where the expert, Dr. Green, was explaining

[00:08:03] Speaker 04:
that you initially store access codes and then repeat the process to replace.

[00:08:08] Speaker 04:
There's a dispute between the parties of whether the reference discloses the same access code being transmitted multiple times or replacement access codes, i.e.

[00:08:17] Speaker 04:
different access codes.

[00:08:19] Speaker 04:
And I believe that's where Mr. Green was saying that he reads Nielsen as disclosing different access codes, a separate code that would be sent

[00:08:27] Speaker 04:
if the first code was lost or stolen or something.

[00:08:30] Speaker 04:
Is that a fair understanding of what he's talking about?

[00:08:33] Speaker 00:
Yeah, that's true.

[00:08:34] Speaker 00:
We had a dispute about, you know, we were saying when that paragraph 128 in Nielsen, the access code, it was actually meaning repeating sending that was the same access code.

[00:08:45] Speaker 00:
So we had an argument about that.

[00:08:47] Speaker 00:
And that was, that's the context of the site the board made.

[00:08:50] Speaker 00:
But your honor, I think it's important to look at a paragraph up where the board says, thus, we agree with the patent owner.

[00:08:57] Speaker 00:
that Nielsen teaches a process different from the steps beside your claim one.

[00:09:02] Speaker 04:
Actually, what it says is specifically figure three of Nielsen.

[00:09:05] Speaker 04:
It doesn't show the process as iterative.

[00:09:08] Speaker 04:
Well, true.

[00:09:08] Speaker 04:
So it doesn't say, I don't know.

[00:09:10] Speaker 04:
I'm looking at it.

[00:09:11] Speaker 04:
Both sentences seem limited to figure three.

[00:09:15] Speaker 04:
I'm not exactly sure what to make of the paragraph anywhere where they say nonetheless.

[00:09:19] Speaker 04:
I'm not entirely sure, Mr. McKeon, whether they're finding

[00:09:25] Speaker 04:
obviousness to modify Nielsen or where they're saying, but Nielsen other than figure three, along with Dr. Green's testimony makes it clear to us that Nielsen is sending replacement access codes.

[00:09:37] Speaker 04:
And as such, Nielsen is disclosing an iterative process.

[00:09:41] Speaker 04:
And if that's true, then Nielsen is disclosing steps B and A being performed in that order.

[00:09:47] Speaker 04:
So I guess I'm not positive that I read the board of how to read this portion of the board's opinion.

[00:09:52] Speaker 04:
whether it is an obviousness determination, which might be beyond the scope of the petition, or whether it's actually a finding that Nielsen, by virtue of disclosing an iterative process, is in fact disclosing the steps in reverse order.

[00:10:06] Speaker 04:
So why don't you respond to that?

[00:10:07] Speaker 00:
Well, I just take a different view of what it says here.

[00:10:11] Speaker 00:
At the beginning of this opinion, it's talking about recasting the arguments.

[00:10:16] Speaker 00:
I mean, the board even says that.

[00:10:17] Speaker 00:
They say, we're recasting the arguments that spectrum's making.

[00:10:22] Speaker 00:
And it's read it.

[00:10:23] Speaker 04:
Where did they say the recasting?

[00:10:24] Speaker 00:
I'm like, where is it?

[00:10:26] Speaker 00:
Recasting, Your Honor.

[00:10:26] Speaker 00:
Let me give you the exact page on that.

[00:10:35] Speaker 00:
A 10, Your Honor.

[00:10:41] Speaker 00:
We further, and I'll just quote, we further exercise our discretion to recast the challenges presented in the petition in view of the specific prior actually relied on for the challenge claims.

[00:10:51] Speaker 00:
And then we go, we read the part we read here where they agree with us.

[00:10:55] Speaker 00:
And that statement in context means that Nielsen doesn't disclose it, and you're right, Your Honor, it refers to Figure 3, but the debate here was Figure 3.

[00:11:07] Speaker 00:
That was the centerpiece of the debate, was Figure 3, and the reference in paragraph 128 of Nielsen about resending the, periodically sending the access code.

[00:11:19] Speaker 00:
And so then we go on to the next paragraph.

[00:11:22] Speaker 00:
And I submit to you that whether it's modifying the figure, we think in fairness that's what they're doing here, or simply saying, oh, it's obvious.

[00:11:32] Speaker 00:
I think either way, we have a problem.

[00:11:34] Speaker 00:
Because they're arguing that it was literally disclosed.

[00:11:39] Speaker 00:
And we know from A19 of the opinion that they did not agree with the petition on that.

[00:11:45] Speaker 00:
They did not agree with the petitioner on that.

[00:11:46] Speaker 04:
They did not agree with the petitioner that it was literally disclosed in Figure 3.

[00:11:50] Speaker 04:
Do you think that that means that the board is stopped by SAS from concluding that it is literally disclosed in the relevant text of the Nielsen reference that everyone has been arguing about when the expert says that text says it's iterative?

[00:12:07] Speaker 04:
Even if Figure 3 doesn't particularly disclose it, the text says it's iterative, which means

[00:12:10] Speaker 04:
After step B, later step A is going to get performed again, and therefore you have BA instead of AB.

[00:12:16] Speaker 04:
Do you really think that the board is stopped by SAS from reaching a conclusion like that when it's the very relevant text and document and prior art that everyone is talking about?

[00:12:28] Speaker 00:
Well, I do, Your Honor, and I think it's consistent with this court's case law.

[00:12:34] Speaker 00:
When you're looking at the same figure in these cases we've cited, you're looking at the same figure, you just point to something different.

[00:12:40] Speaker 00:
Where's the line?

[00:12:42] Speaker 00:
And I think what SAS is telling you, it's up to the petitioner.

[00:12:47] Speaker 00:
And the petitioner has said again and again, despite Figure 3 saying start and stop, which is what Figure 3 says, start and stop, it was up to them to say, OK, even though it's not literally disclosed, one of the owners is going to be motivated to modify the figure based on the disclosures.

[00:13:04] Speaker 04:
I don't see where they say one would be motivated to modify the figure.

[00:13:11] Speaker 04:
I guess I'm still at the point where I'm not sure what that second paragraph means, but I think it might mean that Nielsen discloses BA.

[00:13:21] Speaker 04:
I'm not positive, but I don't see where it goes as far as you're saying that we have to modify the figure to get to that.

[00:13:31] Speaker 04:
Yeah, go ahead.

[00:13:32] Speaker 04:
If you want to respond, please do.

[00:13:33] Speaker 00:
Yeah, Your Honor, we'll just take a different view of the context here, of how this all, the argument, how it was developed, how it was argued.

[00:13:41] Speaker 00:
And there was a lot of discussion in the briefing and at the hearing below about what Nielsen disclosed.

[00:13:48] Speaker 00:
And when the board makes a start statement that, yeah, this is not disclosed, we agree with you, then everything else that follows is a rejection of their argument and something different than what they argued.

[00:14:00] Speaker 04:
Okay.

[00:14:00] Speaker 04:
Why don't we hear from opposing counsel and I'll restore your rebuttal time.

[00:14:03] Speaker 04:
Thank you.

[00:14:18] Speaker 05:
Good morning.

[00:14:19] Speaker 05:
Again, please support Michelle Armand from Kenobi Martins representing the Applebee's Spectrum Brands.

[00:14:24] Speaker 05:
I wanted to address a couple points raised by Ellen's counsel and their argument.

[00:14:28] Speaker 05:
The first argument was that the board found that Nielsen does not disclose steps A and B in Claim 1.

[00:14:37] Speaker 05:
And that is not supported by the record.

[00:14:39] Speaker 05:
That is not what the board found.

[00:14:41] Speaker 05:
If you look in the record at Joint Appendix 19, what the board found was that although Figure 3 by itself did not disclose the steps A and B in the recited order,

[00:14:56] Speaker 05:
Figure 3, together with paragraph 128 of Nielsen, did disclose performing those steps in the recited order because paragraph 128 teaches that that process in figure 3 is performed repeatedly every time a credential is updated.

[00:15:14] Speaker 05:
And of course, paragraph 128 in Nielsen is describing the exact figure 3 that we're talking about here.

[00:15:21] Speaker 04:
So the board's language

[00:15:26] Speaker 04:
doesn't really support what you're saying.

[00:15:28] Speaker 04:
I definitely agree with you that the preceding paragraph is only Figure 3 of Nielsen doesn't show it and doesn't preclude the board from finding something else that Nielsen does.

[00:15:37] Speaker 04:
Whether that exceeds the scope of the petition or not, I don't know.

[00:15:40] Speaker 04:
But the second paragraph, the one that I was questioning counsel about that I'm not really sure how to read, says nonetheless we find Nielsen suggests, doesn't say discloses.

[00:15:50] Speaker 04:
Then the worst thing, I think, for you is the thus sentence.

[00:15:54] Speaker 04:
Are you familiar with the thus sentence on page 19?

[00:15:57] Speaker 04:
Right after they talk about paragraph 128, they say, thus, we determine that a skilled artisan would have found it obvious to initially store the access codes, and thereafter repeat the process in the flow chart of figure three.

[00:16:09] Speaker 04:
They don't say Nielsen disclosed it.

[00:16:11] Speaker 04:
They said it would have been obvious, a light in Nielsen.

[00:16:15] Speaker 04:
And that, to me, is, I think, your most difficult crux.

[00:16:18] Speaker 04:
It's a poorly worded.

[00:16:20] Speaker 04:
paragraph for sure, and I'm not positive what it means, but can you address why that doesn't preclude you from the argument, not preclude, but why that doesn't discount the argument you're making?

[00:16:30] Speaker 05:
Well, what the board was saying here is that when

[00:16:35] Speaker 05:
The disclosures of Nielsen, Figure 3 and Paragraph 128 together, are considered.

[00:16:42] Speaker 05:
It makes it clear that Figure 3 is being repeated.

[00:16:45] Speaker 05:
And so they are relying on the express disclosure in Paragraph 128 that says that the access codes are transmitted periodically to replace, to show that Nielsen teaches that you would

[00:16:57] Speaker 05:
Repeat figure three over and over again.

[00:17:00] Speaker 04:
OK, well then let's look at the last sentence of the same paragraph, which is, I think, equally bad for you as the thus sentence, which you still haven't explained how I sort of ignore the fact that they said would render it obvious as opposed to teaches it explicitly.

[00:17:12] Speaker 04:
They know how to say when something teaches it explicitly.

[00:17:14] Speaker 04:
They do it in this opinion throughout.

[00:17:16] Speaker 04:
And so when they said it would render obvious, my thus sentence, you didn't respond at all to my question, because the board knows the difference between something rendering something obvious and something explicitly teaching it.

[00:17:26] Speaker 04:
And they chose different language.

[00:17:28] Speaker 04:
I don't know what to make of that.

[00:17:29] Speaker 04:
But I'll give you another chance to try your hand at it.

[00:17:32] Speaker 04:
But the last sentence is equally difficult to contend with of that paragraph because it ties Nielsen Figure 3, which references how Access Code Management System administers the access code.

[00:17:46] Speaker 04:
And then it cites Paragraph 128.

[00:17:47] Speaker 04:
And then it says, thereby providing a suggestion and motivation to modify Nielsen's teaching so as to repeat the process of Figure 3

[00:17:56] Speaker 04:
when replacing previously stored access codes.

[00:17:59] Speaker 04:
That, again, sounds like not explicitly disclosed language, but rather obvious language.

[00:18:05] Speaker 04:
And so definitely address this, but then maybe you want to move afterwards to the point about why it would be okay for the board to go beyond just, I don't know that you're going to convince me on this point, but I want you to try.

[00:18:19] Speaker 04:
But then you better move on to why if you don't convince me on this point, it's nonetheless okay for the board to do what it did nonetheless.

[00:18:26] Speaker 04:
Do you understand?

[00:18:27] Speaker 04:
Yes, your honor.

[00:18:28] Speaker 05:
Okay, so go ahead.

[00:18:29] Speaker 05:
So when the board, first on the thus sentence, when the board says thus we determine that the skilled artisan would have found it obvious to initially store access codes and thereafter repeat the process, what they're not saying is that

[00:18:41] Speaker 05:
Nielsen is missing that limitation.

[00:18:43] Speaker 05:
What they're saying is we look at Figure 3, we don't see that process being repeated.

[00:18:48] Speaker 05:
When you go to Paragraph 128 in Nielsen, which discusses Figure 3, we know from reading that disclosure in Nielsen that that process, of course, has to be repeated because you're updating the access codes.

[00:19:01] Speaker 05:
So what I think they're articulating here is that Figure 3 by itself does not disclose the steps being performed in the recited order.

[00:19:11] Speaker 05:
But reading Figure 3 with Paragraph 128 and modifying Figure 3 based on the express teaching in Paragraph 128, then we get there and the claims are satisfied.

[00:19:23] Speaker 05:
They're shown in the recited order.

[00:19:25] Speaker 05:
So I think the only thing that's being modified here is Figure 3.

[00:19:29] Speaker 05:
The board never explicitly found

[00:19:31] Speaker 05:
Nielsen doesn't teach this at all.

[00:19:33] Speaker 05:
We need to go out beyond Nielsen and look at the knowledge of one of the skill and the art to fill in the gap.

[00:19:38] Speaker 05:
When they filled in the gap, they relied on paragraph 128 of Nielsen.

[00:19:42] Speaker 05:
They didn't go beyond the scope, beyond the four corners of Nielsen.

[00:19:47] Speaker 02:
Is there a difference between going outside of Nielsen to find what a skilled artisan would conclude and looking at Nielsen to find what a skilled artisan would conclude?

[00:19:58] Speaker 05:
I think so.

[00:19:59] Speaker 05:
I think there is an obvious argument you can make which says, the prior art does not teach this limitation.

[00:20:04] Speaker 05:
However, the background and knowledge upon a skill in the art, you would know to perform that step.

[00:20:12] Speaker 05:
So how I understand Appellant's argument is they're contending that Nielsen does not disclose.

[00:20:18] Speaker 02:
But if that's the case, wouldn't they have just said Nielsen discloses this, rather than a skilled artisan would have concluded from reading Nielsen?

[00:20:28] Speaker 02:
that this would be obvious.

[00:20:31] Speaker 05:
I think the reason the board chose this particular language was because... You know what?

[00:20:35] Speaker 02:
I'm going to... You don't need to answer that.

[00:20:38] Speaker 02:
I think I agree with Judge Morin.

[00:20:39] Speaker 02:
I'd like to hear you talk about why this matters at all.

[00:20:44] Speaker 05:
Correct.

[00:20:45] Speaker 05:
So the instituted ground for claim one was obvious, obviousness based on Nielsen.

[00:20:51] Speaker 01:
And so... Let me just interject a question on that.

[00:20:57] Speaker 01:
Congress is with your opposing council.

[00:21:00] Speaker 01:
The only claim limitations not taught by Nielsen were independent claims seven and 21.

[00:21:07] Speaker 01:
And we had that colloquy about that.

[00:21:13] Speaker 01:
But the petition includes claim charts.

[00:21:16] Speaker 01:
And I'm looking at the appendix at 95.

[00:21:19] Speaker 01:
And the claim chart discussing the preamble to independent claim one discusses carcass.

[00:21:27] Speaker 01:
So is that preamble to independent claim one limiting?

[00:21:35] Speaker 01:
And if not, how do you reconcile your statement?

[00:21:37] Speaker 05:
There was no argument below whether or not the preamble was limiting.

[00:21:42] Speaker 05:
So if you look at the claim charts, the claim charts focus on Nielsen and its disclosures.

[00:21:46] Speaker 05:
And some of the limitations, other than claims 7 and 21, where we did rely on Nielsen's teachings that are not at issue on appeal, do have a string set at the end that says, see also exhibit 1003.

[00:21:57] Speaker 05:
But if you look, and I'm at joint appendix 92, when we described what we were doing in the claim charts, we said, Nielsen discloses nearly all of the limitations of the challenge claims, and the missing limitations are supplied by carcass.

[00:22:14] Speaker 05:
Those differences are specifically described below.

[00:22:17] Speaker 05:
And then we talk about 7 and 21.

[00:22:19] Speaker 05:
So our position, which we made clear in the petition and the board also recognized in its institution decision, was that

[00:22:26] Speaker 05:
We were only relying on Carcass's teachings for claims 7 and 21.

[00:22:30] Speaker 05:
That answers your question.

[00:22:32] Speaker 01:
I would like to go back to your question.

[00:22:34] Speaker 01:
Yeah, go back to it.

[00:22:37] Speaker 05:
I wanted to address Judge Moore's question.

[00:22:40] Speaker 05:
So as I was saying, the instituted ground here was obviousness based on Nielsen.

[00:22:48] Speaker 05:
And when we presented our petition.

[00:22:53] Speaker 04:
So just out of curiosity, do you think it would be OK

[00:22:56] Speaker 04:
for the PTO, if you say we are challenging obviousness based on Nielsen and then you have a claim chart wherein you indicate that you actually believe that it's pretty close to anticipation and you think every element is in fact disclosed.

[00:23:11] Speaker 04:
But then suppose at the end you have a catch-all and if you don't think these elements are disclosed where we say they are, then they would nonetheless be obvious in light of what we say.

[00:23:17] Speaker 04:
Is that sort of where you're going with this?

[00:23:19] Speaker 04:
Is that what you think that you have done here to put the other side on notice

[00:23:25] Speaker 04:
that we actually think a particular element is, in fact, disclosed, but if it's not, it would be obvious in light of what is, in fact, disclosed.

[00:23:32] Speaker 05:
That is exactly what the claim charts were doing.

[00:23:36] Speaker 05:
So if you look at step A and step B, what we said is we believe that Nielsen discloses those limitations, and we pointed to the disclosures.

[00:23:43] Speaker 04:
In fact, and I'm looking at... But at this point, you were arguing that it discloses it because A and B don't have to be performed in order.

[00:23:52] Speaker 05:
Our reading of the claim in the petition stage was that there was no particular order, because this was a method claim, which usually, of course, do not have an order imposed unless there's an antecedent basis.

[00:24:04] Speaker 05:
And there was no antecedent basis.

[00:24:05] Speaker 05:
So after institution, when Pellant proposed this claim construction and it came out of left field, our response was, well, even if there is

[00:24:14] Speaker 05:
a particular order, it doesn't matter because based on the same disclosures in Nielsen that we cited in our petition at Joint Appendix 95, 96, you'll see paragraph 128 and figure 3 there, it doesn't matter because that process of updating credentials is performed repeatedly and it's going to perform those steps in either order.

[00:24:34] Speaker 05:
So based on the claim charts at Joint Appendix 95-96, when the board found it obvious, it found these limitations obvious.

[00:24:47] Speaker 05:
Over the identical disclosures, we had put in our petition and put Appellant in on notice.

[00:24:51] Speaker 05:
So any suggestion that this came out of left field, it didn't.

[00:24:55] Speaker 05:
And the only reason that this issue was even raised was because of Appellant's belated claim construction it provided after institution.

[00:25:04] Speaker 05:
You know, I think they were fully on notice on this.

[00:25:08] Speaker 04:
Just out of curiosity, what do you think that the board meant by that recast sentence that opposing counsel read to us?

[00:25:14] Speaker 04:
We're recasting petitioners' arguments in this case, which it then said it has the discretion to do and cited a case.

[00:25:21] Speaker 04:
You know, in light of SAS, I think that the level of discretion the board has is now a question mark.

[00:25:25] Speaker 05:
Correct.

[00:25:26] Speaker 04:
And so what do you think they meant by that?

[00:25:30] Speaker 05:
When the board said

[00:25:33] Speaker 05:
I believe it's joint appendix 10 that they were recasting.

[00:25:37] Speaker 05:
They did not mean that they were changing the grounds.

[00:25:40] Speaker 05:
So our position from the beginning was for all of the claims, except for claims 7 and 21, they were obvious over Nielsen alone.

[00:25:49] Speaker 05:
And so what the board said, and the reason they put this in was because appellant came to the

[00:25:55] Speaker 05:
final hearing and profess confusion about the scope of this IPR as they explained what they had done back in their institution decision.

[00:26:04] Speaker 05:
So if you turn in the record to the institution decision, the board had

[00:26:15] Speaker 05:
I'm looking at Appendix, Joint Appendix 516.

[00:26:19] Speaker 05:
What the board said there when they instituted based on Nielsen and Carcasses for the appealed claims were considering them based on Nielsen alone, and there's a point heading there that says,

[00:26:29] Speaker 05:
Obviousness of the appealed claims based on Nielsen and then if you turn the page to join appendix 518 then for claims 7 and 21 the point heading is Obviousness of claims 7 and 21 based on Nielsen and carcass So when the board summarized in the final written decision what they did and they called that the recasting what they're doing is simply summarizing what they explicitly did in the institution decision, so there was no change they were not switching grounds and of course the

[00:26:59] Speaker 05:
The institution decision tracked what we presented in the petition as well.

[00:27:06] Speaker 05:
The last point I wanted to address was SAS.

[00:27:09] Speaker 05:
Appellant has argued that SAS somehow has an impact on this case.

[00:27:14] Speaker 05:
SAS has the simple holding that all of the claims that are challenged in the petition must be considered by the board and rendered.

[00:27:22] Speaker 04:
I'm not sure the holding of SAS is anywhere near as simple, but I'm also not sure it's relevant to this case.

[00:27:27] Speaker 05:
Yeah, but anyway, it does not apply to this case simply because all of the things we challenged were decided in a foul-right decision.

[00:27:35] Speaker 03:
OK, thank you.

[00:27:37] Speaker 05:
So unless you have further questions, I'll see the rest of my time here.

[00:27:40] Speaker 03:
Thank you.

[00:27:40] Speaker 03:
Thank you very much.

[00:27:41] Speaker 03:
Let's restore Mr. McKeon's rebuttal time, please.

[00:27:44] Speaker 03:
Give him three minutes.

[00:27:45] Speaker 01:
My law professor used to say when a lawyer says merely to you, you'd better to know this.

[00:27:50] Speaker 03:
Or clearly.

[00:27:51] Speaker 01:
Or clearly.

[00:27:57] Speaker 00:
Just on the SAS point, I mean, there's a question about whether all grounds are going to be required now in the institution.

[00:28:02] Speaker 00:
I think that's a debate that we'll have going forward.

[00:28:04] Speaker 00:
But I do want to just quickly address what happened below.

[00:28:10] Speaker 00:
I think that's important.

[00:28:12] Speaker 00:
We've submitted our patent owner's response.

[00:28:15] Speaker 00:
And we said, wait a minute.

[00:28:16] Speaker 00:
Order of steps is real important here.

[00:28:18] Speaker 00:
A, B, get it in that order.

[00:28:20] Speaker 00:
And figure three is start-stop.

[00:28:23] Speaker 00:
No suggestion that this iterative process

[00:28:25] Speaker 00:
So we submitted our response, and in the reply, they came back and said, unequivocally, that Nielsen discloses this feature.

[00:28:34] Speaker 00:
And it made this iterative argument that despite the start-stop, you do it iteratively.

[00:28:40] Speaker 00:
And that was a highly contested issue at the hearing as well.

[00:28:46] Speaker 00:
So then in that context, when we get to page 19 and 20 of the board's final decision, we have the paragraph we talked about before where

[00:28:55] Speaker 00:
We agree with you, the Palin here, the patent owner, but nevertheless, we go on, and the concluding statement, which is actually on page 20, and I think Judge Borne, you read it, providing a suggestion and motivation to modify Nielsen's teachings.

[00:29:13] Speaker 00:
And so it's to repeat the figure three process.

[00:29:17] Speaker 00:
And that's something that was never argued.

[00:29:19] Speaker 00:
It's just plain and simple.

[00:29:20] Speaker 00:
They just didn't argue that point.

[00:29:23] Speaker 00:
And it's important because it's not inconsequential.

[00:29:26] Speaker 00:
Because whether something discloses it literally, or whether it's motivation to modify, the case we present is completely different.

[00:29:36] Speaker 00:
Our experts would put on a different case.

[00:29:38] Speaker 00:
Our cross-examination, their expert would have been different.

[00:29:40] Speaker 00:
Presentation of the board would have been different.

[00:29:42] Speaker 00:
We would have looked for other references or disclosures that would teach against that conclusion.

[00:29:47] Speaker 02:
But this wasn't an anticipation case.

[00:29:50] Speaker 02:
The board expressly

[00:29:52] Speaker 02:
initiated for the claims at issue based on Nielsen alone.

[00:29:57] Speaker 02:
It only went to carcass for 7 and 21, right?

[00:30:01] Speaker 02:
We have a dispute about the way that all went down, but yes, I mean, I think in the end of the day... I mean, you read the institution decision, it's pretty clear the reason they didn't have a separate ground is because they said this is already subsumed in the claims we're instituting on, which is Nielsen alone for the vast majority of the claims.

[00:30:19] Speaker 02:
So you were on notice at least that

[00:30:21] Speaker 02:
It was an obviousness issue, not an anticipation.

[00:30:24] Speaker 00:
That could be a fair point, but okay, we're on notice it's obvious.

[00:30:28] Speaker 00:
But boy, there's a lot of work to get from that to the end of the case where the specific nature of the allegation and the contention, okay, why is it obvious?

[00:30:40] Speaker 00:
You got to get there.

[00:30:41] Speaker 01:
Very briefly, what additional evidence would you present if we were amended?

[00:30:46] Speaker 00:
Well, our expert would put in a declaration and say, wait a minute, the figures three and the 128, there was no motivation to modify there.

[00:30:52] Speaker 01:
And it never identified any additional evidence in the case.

[00:30:55] Speaker 00:
We didn't know we were fighting a motivation to modify case.

[00:30:58] Speaker 00:
They were saying he was there all along.

[00:31:00] Speaker 00:
So we didn't go down that road.

[00:31:03] Speaker 00:
And we have limited page limits, limited time, and we're going to fight the battle that we're fighting.

[00:31:07] Speaker 00:
When I got to fight a battle, we don't think we need to fight.

[00:31:10] Speaker 00:
Unless there's any time and any questions, I thank the court.

[00:31:13] Speaker 04:
OK, I thank both counsel for their argument.