[00:00:00] Speaker 01:
181358 Cola Solutions versus Blackridge Emulsions.

[00:01:26] Speaker 05:
Good morning, Your Honors.

[00:01:33] Speaker 05:
May it please the Court to understand how the Board erred in finding Blackledge's patents not obvious.

[00:01:42] Speaker 05:
One must understand what the inventions of the patents really is or really are.

[00:01:50] Speaker 05:
A careful reading of the patents, and they're essentially identical,

[00:01:55] Speaker 05:
demonstrates that the invention was defying conventional wisdom by using a hard pen asphalt composition to obtain a trackless tack coat with good bonding properties.

[00:02:10] Speaker 05:
But that is exactly what the Bardizzi prior art reference discloses.

[00:02:15] Speaker 01:
Well, the claims disclose a penetration value and softening points.

[00:02:23] Speaker 01:
And Bardizzi does not disclose any self-hating points.

[00:02:26] Speaker 01:
Is that correct?

[00:02:27] Speaker 05:
Not expressly.

[00:02:29] Speaker 01:
Okay.

[00:02:29] Speaker 05:
So you've got an inherency argument.

[00:02:33] Speaker 05:
No, we're not arguing in herency anymore.

[00:02:37] Speaker 05:
And that was because Dr. King, the expert for COLAS, made a math error.

[00:02:44] Speaker 05:
Once he was apprised of that error, he said, that doesn't change the conclusion of obviousness.

[00:02:50] Speaker 05:
And obviousness was always the position.

[00:02:52] Speaker 01:
So you agree that based on the record as it stands now, or as it stood after they came in with this, that there's no viable inherency argument here?

[00:03:02] Speaker 05:
That's correct, Your Honor.

[00:03:03] Speaker 01:
OK.

[00:03:04] Speaker 01:
So that introduces firstly a waiver issue, and then a merits issue.

[00:03:10] Speaker 05:
I'm sorry?

[00:03:11] Speaker 01:
Firstly, that introduces a waiver issue, and then a merits issue.

[00:03:14] Speaker 01:
Because we have all sorts of cases, but in this case,

[00:03:17] Speaker 01:
You came up with a theory in your petition, and that theory was inherently.

[00:03:25] Speaker 01:
They refuted that theory, and now you come up with a new and different theory for this case.

[00:03:34] Speaker 01:
Isn't it too late?

[00:03:36] Speaker 05:
No.

[00:03:37] Speaker 05:
It's really not a different theory.

[00:03:39] Speaker 05:
The position that Colas took from the get-go was that the claimed invention was obvious.

[00:03:47] Speaker 05:
under Section 103, in view of the same combination of five references, that there would be an expectation.

[00:03:54] Speaker 01:
But I thought you just told me a few minutes ago that your theory was inherency, and that based on, and you pointed out, based on the evidence that the Patenona brought forward, that inherency argument is no longer viable, and you agree with that.

[00:04:09] Speaker 01:
That was your theory.

[00:04:10] Speaker 01:
No, no.

[00:04:10] Speaker 01:
Yes, it was an obviousness case then, and it's an obviousness case now.

[00:04:14] Speaker 01:
But your theory was inherency, was it not?

[00:04:17] Speaker 05:
That was a theory.

[00:04:18] Speaker 05:
It wasn't the only theory.

[00:04:20] Speaker 02:
Well, it was the only theory set forth in the petition.

[00:04:23] Speaker 05:
Excuse me?

[00:04:24] Speaker 02:
It was the only theory set forth in the petition.

[00:04:27] Speaker 02:
Is it your view that the minute you cite to 103, that you can rely on any basis for obviousness, regardless of what it is?

[00:04:38] Speaker 05:
Your Honor.

[00:04:40] Speaker 05:
There was an emphasis on inherency in the petition, but it was not the only argument that was made.

[00:04:46] Speaker 05:
It was a 103 argument.

[00:04:48] Speaker 05:
There was language.

[00:04:49] Speaker 01:
It's all... Okay, but you're making an argument now about overlapping ranges or something like that, right?

[00:04:54] Speaker 01:
Was that argument ever made in the petition?

[00:04:59] Speaker 05:
The overlapping ranges argument was not expressly made in the petition, but obviousness of the softening point ranges was argued.

[00:05:08] Speaker 01:
And the board- Well, that's pretty global, right?

[00:05:11] Speaker 01:
Obviousness was your theory.

[00:05:13] Speaker 01:
So as Judge Bomelli pointed out, you can come up with different aspects of obviousness, like an inherency argument and then something other than an inherency argument.

[00:05:21] Speaker 01:
You think that's okay?

[00:05:23] Speaker 05:
There's really no material difference between the obviousness argument for the softening point ranges and the inherency argument.

[00:05:30] Speaker 05:
In both cases, you're arguing that because all or most, and the board said there would just be a small fraction,

[00:05:38] Speaker 05:
because of the math error that would fall outside the claimed ranges for Bardizzi's asphalt.

[00:05:45] Speaker 05:
In both cases, you're saying all or most of the softening points for the Bardizzi asphalts would fall within the claimed range.

[00:05:58] Speaker 02:
Right, but inherently, especially in the obviousness context.

[00:06:01] Speaker 02:
requires the conclusion that it necessarily would always flow, right?

[00:06:07] Speaker 02:
So you can see that your inherency argument on obviousness doesn't work, right?

[00:06:12] Speaker 05:
Yes.

[00:06:13] Speaker 02:
And you also can see that Bardessi doesn't disclose the softening point ranges at all.

[00:06:19] Speaker 05:
Not expressly.

[00:06:20] Speaker 02:
Not expressly.

[00:06:21] Speaker 02:
So you can't get there through an inherency.

[00:06:23] Speaker 02:
So you're now saying that we can take a series of logical leaps that

[00:06:30] Speaker 02:
and you're going to argue that a procedure would have taken them to get to this end result, right?

[00:06:37] Speaker 02:
So where is that argument, which is a much more complex argument and requires, I would think, actual testimony to support it, where is that argument made in the petition?

[00:06:49] Speaker 05:
In the petition, the places where obvious sense of the softening points were argued in the petition

[00:06:57] Speaker 05:
are specified in the blue brief.

[00:07:01] Speaker 05:
And I can give you a host of appendix sites and what they say.

[00:07:12] Speaker 03:
Do any of them have expert testimony that says a skilled artisan would understand that Vardesi shows these softening point ranges instead of testimony that it automatically or inherently

[00:07:25] Speaker 03:
includes these soft-income ranges.

[00:07:28] Speaker 03:
To me, that seems to be a critical difference here, in that you didn't supply that argument, and you didn't supply the expert testimony.

[00:07:36] Speaker 03:
You were relying on inherency.

[00:07:38] Speaker 03:
And when that was proven wrong, yeah, you probably have a pretty good argument on the other point.

[00:07:44] Speaker 03:
But the board didn't institute on that ground.

[00:07:47] Speaker 03:
How could we find it incorrect for them to find waiver?

[00:07:51] Speaker 05:
Well, the inherency argument was actually a higher standard

[00:07:55] Speaker 03:
that had to be argued to support the... I mean, you made yourself a hard case here by not arguing the lower standard of what a skilled artist would read, but I mean, in retrospect, how do we unravel your choice on that?

[00:08:08] Speaker 05:
It may be that it is obvious, but... Let me give you an analogy.

[00:08:12] Speaker 05:
If you have a civil case where preponderance of the evidence is a standard and you're so sure of your facts and liability, you argue, well, the defendant

[00:08:24] Speaker 05:
a reasonable doubt standard would be liable.

[00:08:30] Speaker 05:
And it turns out the evidence shows it's just a preponderance of the evidence.

[00:08:34] Speaker 05:
Well, you've said too high a standard.

[00:08:36] Speaker 03:
I don't know how helpful that analogy is, but I would think even there, if it's your burden to show something and you agree that the burden is X, and you want to hold yourself to that burden, if you fail it, you fail it, even if you might have had a logical argument for a lower burden.

[00:08:52] Speaker 05:
Your Honor,

[00:08:53] Speaker 05:
It's not materially different.

[00:08:56] Speaker 05:
The two arguments... I don't necessarily disagree with you.

[00:09:00] Speaker 01:
How can it not be materially differently, as you would acknowledge, under one you lose and under one you win?

[00:09:05] Speaker 05:
At least in your view, not necessarily... It's not materially different in terms of the obviousness of the softening point ranges that are claimed.

[00:09:15] Speaker 02:
Let's go to that materially difference, all right?

[00:09:18] Speaker 02:
Under Inherency, you don't have to worry about what a casino would think or not think.

[00:09:22] Speaker 02:
It's just there.

[00:09:23] Speaker 02:
Right?

[00:09:25] Speaker 02:
Under the new theory, you've got like three or four logical steps.

[00:09:30] Speaker 02:
Daisy doesn't teach softening points.

[00:09:32] Speaker 02:
You then say there's some mathematical formula that someone could use to determine the softening ranges for the asphalt, and that from there, you could extrapolate, despite the problem with the mostifiers and everything else, to the TACCO.

[00:09:47] Speaker 02:
I mean, that's a lot of steps, none of which you recite in your petition.

[00:09:53] Speaker 05:
Your Honor, the inherency argument is really, or the obviousness is an expansion on the inherency argument.

[00:10:03] Speaker 05:
It's very much like this Court's decision that we cited in our citation of supplemental authority, Erickson v. Intellectual Ventures, where... But Erickson was, Erickson said this argument was in the petition.

[00:10:18] Speaker 02:
We made a specific finding that was in the petition and that the board just chose not to address it.

[00:10:23] Speaker 02:
That's very different than saying that, well, whatever you want to believe it was in the petition, we're going to agree.

[00:10:32] Speaker 02:
But it was literally worded in the petition.

[00:10:35] Speaker 05:
Well, as I said, in the petition, we did raise also obviousness.

[00:10:40] Speaker 05:
The emphasis was on herency, but you also raised obviousness.

[00:10:43] Speaker 05:
We talked about what one of the ordinary skill in the art

[00:10:47] Speaker 05:
predict, what they would expect, reasonably expect.

[00:10:51] Speaker 05:
There's lots of language that supports obviousness.

[00:10:54] Speaker 05:
Even if it were not in the petition, at the time that Dr. King was deposed, before the response was filed by Blackledge, and he learned during his deposition that he had made a math error, he said, that doesn't change my conclusion on obviousness.

[00:11:12] Speaker 05:
So they knew when they filed the response that obviousness was at issue.

[00:11:18] Speaker 05:
They extensively, this is Blackledge, extensively in its response argued about the obviousness of the softening points.

[00:11:28] Speaker 05:
Of course, they said it was not obvious, but they extensively argued obviousness.

[00:11:32] Speaker 05:
At that point, if it was not in the petition, and I maintain it is, then they waived their position that we can't raise it.

[00:11:42] Speaker 05:
Because at that point, we have a right to rebut.

[00:11:45] Speaker 05:
We have a right to rebut the obviousness arguments that they made in their response.

[00:11:52] Speaker 05:
And they didn't, they didn't, after we did that, they didn't move to strike our reply.

[00:11:58] Speaker 05:
They didn't move for, to file us a reply, which the board.

[00:12:03] Speaker 03:
I don't understand how the fact that your friend on the other side was diligent in addressing all potential arguments that you raised

[00:12:12] Speaker 03:
at a later stage prevents the board from saying, no, these are too late.

[00:12:18] Speaker 03:
It may be that if the board would say, well, this was good enough, close enough, they're not having any due process violations here because they knew about this argument and went on to decide it, we wouldn't find it error by the board.

[00:12:29] Speaker 03:
But why is it error by the board to not address an issue that you didn't raise in your petition?

[00:12:37] Speaker 05:
It's error because it was fully developed by the parties.

[00:12:41] Speaker 02:
The board has the right to enforce its own rules, and we have said that more than once.

[00:12:46] Speaker 02:
And it has a rule that you can't raise a new issue in your reply that you didn't put in the petition.

[00:12:52] Speaker 02:
And the reason they do that is that when they make a decision to institute, they want to make sure that it is based on all the best arguments that can be presented and that then the whole matter moves forward from there.

[00:13:03] Speaker 02:
It's not like a district court where you've got the luxury of

[00:13:06] Speaker 02:
of amendments and extra time and more discovery.

[00:13:10] Speaker 02:
The board has its rules for a reason, and we have said we defer to their application of those rules, barring extreme prejudice or a clear error.

[00:13:19] Speaker 05:
Well, the prejudice here, if this Court affirms, is all Colas's prejudice.

[00:13:27] Speaker 05:
There's no prejudice to Blackledge because the argument was fully developed.

[00:13:34] Speaker 05:
They raised it themselves.

[00:13:35] Speaker 05:
in their response.

[00:13:39] Speaker 05:
So it was fully developed.

[00:13:41] Speaker 03:
But again, if you raise argument A, and the other side says, well, we're going to address argument A, because it's clearly wrong.

[00:13:49] Speaker 03:
We think that they may come back and argue argument B, which they've waived.

[00:13:53] Speaker 03:
But we're still going to, out of the interest of our clients and diligence, address that.

[00:13:58] Speaker 03:
That doesn't mean that the board can't say, we're only going to rely on A, because that's the raise.

[00:14:05] Speaker 03:
conceding anything when they do the extra work to rebut an argument that isn't in the case just out of caution, are they?

[00:14:14] Speaker 05:
Well, the board's job is to decide cases.

[00:14:19] Speaker 03:
The board's job is to decide the case that is presented to them.

[00:14:22] Speaker 03:
And I know you disagree about whether this was presented or not, but just assume that we don't think this other obvious necessary was presented in the petition.

[00:14:31] Speaker 03:
If that's their job, to decide the issue presented to them and they say,

[00:14:35] Speaker 03:
we're deciding this.

[00:14:36] Speaker 03:
You're wrong.

[00:14:37] Speaker 03:
Do they have an obligation to search beyond the record and find other reasons to invalidate the patents?

[00:14:42] Speaker 03:
I think we made it pretty clear that, A, they're not obligated to, and in some instances, they're not entitled to.

[00:14:50] Speaker 05:
Well, they don't have to search the record.

[00:14:51] Speaker 05:
The parties, both sides, presented their positions of obviousness.

[00:14:56] Speaker 05:
It was fully developed.

[00:14:58] Speaker 05:
And I think you'll agree that the board could have

[00:15:02] Speaker 05:
entertained the obviousness argument that was being made.

[00:15:06] Speaker 05:
And if they could have, then they should have.

[00:15:09] Speaker 05:
There's prejudice to COLAS here because of the estoppel provision that they might not be able to raise this in district court.

[00:15:19] Speaker 05:
But there's no prejudice to a party that argued it, fully developed it, was not denied any opportunity.

[00:15:28] Speaker 05:
I mean, there's a due process problem, I think.

[00:15:30] Speaker 05:
And to say that their procedural rule was violated, it wasn't really because Blackledge itself raised the obvious in this argument.

[00:15:43] Speaker 05:
And everything was there for them to decide.

[00:15:45] Speaker 05:
There was no need for them to refuse, except that they easily got rid of the case from their docket by saying, well, we're not even going to consider it.

[00:15:55] Speaker 05:
They did consider one aspect of obviousness, and that is the overlapping ranges.

[00:16:01] Speaker 05:
Now, they considered it.

[00:16:03] Speaker 05:
They decided that on the merits.

[00:16:05] Speaker 05:
We have the right to appeal that.

[00:16:07] Speaker 05:
I understood.

[00:16:09] Speaker 01:
Maybe I'm confusing this with another case.

[00:16:11] Speaker 01:
They found that it wasn't properly raised, and they found in the alternative that even if it had been properly raised, they dealt with it on the merits.

[00:16:21] Speaker 05:
With respect to the In rey Peterson argument,

[00:16:24] Speaker 05:
They never said it wasn't raised, and therefore we're not deciding it, but in the alternative.

[00:16:30] Speaker 05:
They didn't say that.

[00:16:31] Speaker 05:
They simply addressed it on the merits.

[00:16:34] Speaker 05:
I think they even used the word on the merits.

[00:16:37] Speaker 05:
And that was an erroneous decision.

[00:16:41] Speaker 02:
Both of their merits analyses were in the alternative, right?

[00:16:45] Speaker 05:
No.

[00:16:46] Speaker 05:
No.

[00:16:47] Speaker 05:
In Ray Peterson, if you look carefully at their opinion,

[00:16:50] Speaker 05:
It's after they said, we're not going to address your general obviousness argument.

[00:16:56] Speaker 05:
And they said, and as to your Inray-Peterson argument, we think you lose because there's no disclosure of ranges in Bardeezy.

[00:17:05] Speaker 05:
And that was erroneous because anyone skilled in the art reading Bardeezy would realize that it discloses ranges.

[00:17:12] Speaker 05:
In fact, the patents themselves disclose that if you have a hard-penned asphalt,

[00:17:17] Speaker 05:
with a pen value of 40 or less, you're going to have a softening point of at least 140 degrees Fahrenheit.

[00:17:28] Speaker 05:
And here, Bardizzi discloses 10 to 20.

[00:17:31] Speaker 05:
At 10 to 20, it's almost a sure thing that you're going to have way over 140 degrees Fahrenheit as the softening point.

[00:17:41] Speaker 05:
So the board just ignored the level of skill in the art, the knowledge that a skilled artisan would have, and it's a very high level of skill in the art, which Blackledge never even addressed.

[00:17:54] Speaker 01:
Okay, we're over your rebuttal time, so let me hear from the other side.

[00:18:09] Speaker 04:
May it please the court.

[00:18:10] Speaker 04:
My name is John Triggs and along with Seth Ogden at my office we represent Blackledge Emulsions.

[00:18:15] Speaker 02:
Can you address that last point first?

[00:18:17] Speaker 02:
Did the board find waiver as it relates to the Peterson argument?

[00:18:22] Speaker 04:
I think so, Your Honor.

[00:18:23] Speaker 04:
If we go to page 26 of the decision, to the extent petitioners arguments in... Hold on.

[00:18:29] Speaker 01:
Give us a chance to... Oh, sorry, Your Honor.

[00:18:31] Speaker 04:
Excuse me.

[00:18:32] Speaker 04:
I'll slow down.

[00:18:36] Speaker 02:
Okay.

[00:18:37] Speaker 04:
To the extent

[00:18:38] Speaker 04:
Petitioner's arguments in the reply and at the hearing that the claimed range of softening points is typical or expected are offered as an alternative theory of obviousness in lieu of inherency.

[00:18:50] Speaker 04:
Those arguments were not adequately developed and presented in the petition.

[00:18:55] Speaker 04:
They went on to say that what little you gave us was of no value as well.

[00:18:59] Speaker 04:
But as I think this Court knows, that's typical of a trial judge doing belt and suspenders.

[00:19:04] Speaker 04:
You didn't have the right to make the argument, and the argument you made was no good as well.

[00:19:08] Speaker 00:
And then they went on to, yeah, and then they went on, did go on to talk about the claimed reign.

[00:19:13] Speaker 04:
Exactly.

[00:19:14] Speaker 04:
And they said if you didn't meet your burden, it's not there.

[00:19:16] Speaker 04:
So they gave them a sort of chance they shouldn't have had, and they still lost.

[00:19:20] Speaker 00:
Which is a prudent thing to do when you know you're going to get an appeal.

[00:19:23] Speaker 04:
Yes.

[00:19:24] Speaker 04:
That's exactly what it is.

[00:19:25] Speaker 04:
And that's all it is.

[00:19:26] Speaker 04:
It's prudent.

[00:19:27] Speaker 04:
Just like it's prudent for me.

[00:19:29] Speaker 04:
When in the deposition, their expert comes up with this new obviousness theory, I ask them questions about it, probably four or five pages, because I'm hearing it for the first time.

[00:19:37] Speaker 04:
And I've got to protect myself.

[00:19:39] Speaker 04:
But that doesn't mean I've waived what the rules spell out.

[00:19:42] Speaker 04:
This is an abuse of discretion.

[00:19:45] Speaker 04:
And the next point I want to make, and I've only got a couple, but we have to remember, and this argument typifies that, the petitioners in these cases never want to talk about the claims of the patent.

[00:19:55] Speaker 04:
They're always talking about the asphalt.

[00:19:57] Speaker 04:
And they always forget to say, but it's the tack coat and the properties of the cured tack coat on the road that counts.

[00:20:05] Speaker 04:
And that's not the asphalt.

[00:20:06] Speaker 04:
That's something different.

[00:20:08] Speaker 04:
And typically, because this is not our only case, we always hear asphalt, asphalt, asphalt, and very little about tack coat, because those are the properties claimed in the invention and all the claims of the patent.

[00:20:18] Speaker 04:
I've got just a couple of other points and I'll be done.

[00:20:21] Speaker 04:
One.

[00:20:22] Speaker 04:
The new argument theme is one paying attention to here, because we faced a new argument when interancy blew up.

[00:20:29] Speaker 04:
And so they came up with this obviousness argument, which was not well pleaded, that was not timely.

[00:20:35] Speaker 04:
They then came up with the ranges argument.

[00:20:38] Speaker 04:
And on this appeal, we have another new argument, not in the record.

[00:20:42] Speaker 04:
You can't test the properties of the tax code the way everybody does it in the industry, even though everybody agreed.

[00:20:48] Speaker 04:
Our experts told you what the test is.

[00:20:49] Speaker 04:
The test is in the patent.

[00:20:51] Speaker 04:
So you had another new argument.

[00:20:52] Speaker 04:
The bottom line is this decision was absolutely right.

[00:20:56] Speaker 04:
They did a bad job in their petition.

[00:20:59] Speaker 04:
They've scrambled to try to ignore it.

[00:21:01] Speaker 04:
They can't.

[00:21:02] Speaker 04:
It's an abuse of discretion.

[00:21:03] Speaker 04:
There's no abuse.

[00:21:04] Speaker 04:
This matter should be affirmed in its entirety.

[00:21:08] Speaker 04:
Thank you.

[00:21:19] Speaker 01:
I know I've used up my time.

[00:21:21] Speaker 01:
No, I will give you two minutes if you need it.

[00:21:24] Speaker 05:
All right.

[00:21:26] Speaker 05:
On page 26 of the final written decision in the 624 case, and I think it's probably in the same place because they're nearly identical, the board at the bottom of the page explained that it thought that we were foreclosed

[00:21:49] Speaker 05:
from presenting the general obviousness argument because the petition had only raised inherency.

[00:22:00] Speaker 05:
And then they started a new paragraph.

[00:22:03] Speaker 05:
Finally, we find an unpersuasive petitioner's argument that has presented a primification of obvious due to the overlap in the claimed range of softening points with that of the prior art.

[00:22:16] Speaker 05:
They didn't say you're precluded from that one.

[00:22:18] Speaker 05:
And they decided it on the merits.

[00:22:21] Speaker 05:
And so we're appealing from that decision.

[00:22:25] Speaker 05:
We've got a situation here where if you follow the Bardizzi prior art, and you do what Bardizzi said to do, and you're extremely skilled, you're going to reach the promised land.

[00:22:40] Speaker 05:
You're going to make a tack coat that is trackless and has

[00:22:48] Speaker 05:
good bonding.

[00:22:48] Speaker 05:
You will inevitably do that because of the extraordinary skill in the art that the board found in this case.

[00:22:56] Speaker 05:
And you're not even going to measure, in fact, it's unmeasurable.

[00:23:01] Speaker 05:
Experts for both sides agree you can't measure the rheological properties of the cured tack coat.

[00:23:07] Speaker 05:
What you're going to do is you're going to test it, as Bardizzi told you to test it, and you're going to reach the promised land because you've done the same thing

[00:23:17] Speaker 05:
that Bardezzi said to do, and then you're going to get sued by Blackledge, because he's going to say, well, you've got those properties within the scope of our claims.

[00:23:31] Speaker 05:
Somehow or other, they'll convince a jury to say that's true, even though it's unmeasurable, according to the experts, for both sides.

[00:23:40] Speaker 05:
And this patent is going to penalize somebody who follows the prior art.

[00:23:46] Speaker 05:
I think the court should not permit that simply because an expert made a math error.

[00:23:52] Speaker 05:
And the other side knew that obviousness was the issue.

[00:23:56] Speaker 05:
It was fully developed.

[00:23:57] Speaker 05:
The board could have decided it, and they should have decided it.

[00:24:01] Speaker 05:
This would be a gross injustice if the court affirms.

[00:24:06] Speaker 00:
Thank you.

[00:24:06] Speaker 00:
Thank you, Your Honor.