[00:00:00] Speaker 02:
It's an appeal from the Patent Trial and Appeal Board, D'Agostino versus MasterCard.

[00:00:08] Speaker 02:
And Mr. Greenspoon, you want five minutes for rebuttal?

[00:00:13] Speaker 04:
Yes, Your Honor.

[00:00:13] Speaker 04:
Thank you.

[00:00:14] Speaker 02:
I'm going to try to keep better track of time.

[00:00:18] Speaker 04:
Well, good morning, Your Honors.

[00:00:19] Speaker 04:
May it please the Court.

[00:00:20] Speaker 04:
We raised several points of error in our briefing, and today I'd like to focus on two.

[00:00:26] Speaker 04:
And those relate to the single merchant limitation claims patentability.

[00:00:32] Speaker 04:
And then our alternative argument, and make no mistake, it's an alternative argument.

[00:00:37] Speaker 04:
We rank order.

[00:00:38] Speaker 04:
We would prefer a result that agrees with us on patentability.

[00:00:41] Speaker 04:
But the alternative argument is that there ought to be a remand because of the policy change that favored my client, Mr. D'Agostino, during this appeal.

[00:00:50] Speaker 01:
So starting with the- Oh, and what about your?

[00:00:53] Speaker 01:
18 months is 18 months.

[00:00:55] Speaker 01:
Well, I'm prepared to address that if it comes up, of course.

[00:00:58] Speaker 01:
Not on my account.

[00:01:01] Speaker 04:
Save your breath, in other words.

[00:01:03] Speaker 04:
Right.

[00:01:04] Speaker 04:
Well, I guess my only comment on that is that the road was littered with litigants who never argued against partial institution of IPR.

[00:01:13] Speaker 02:
That's true.

[00:01:14] Speaker 04:
Moving on to patentability issues.

[00:01:16] Speaker 02:
If we agree with the board's claim construction, then would you agree there's substantial evidence to support

[00:01:23] Speaker 02:
their ultimate conclusion.

[00:01:26] Speaker 04:
I have to divide the issues in my mind.

[00:01:28] Speaker 04:
Part of our appeal is a claim construction of whether the claims require multiple transaction authorization.

[00:01:37] Speaker 02:
Right.

[00:01:37] Speaker 02:
So if we agree with the board that it could require just a single transaction, then would you agree that substantial evidence would support the board's finding?

[00:01:49] Speaker 02:
In other words, it turns on the claim construction, right?

[00:01:51] Speaker 02:
Maybe that's a better question.

[00:01:54] Speaker 04:
Cutting right to the quick, I concede that.

[00:01:56] Speaker 04:
If that claim construction is affirmed, then I believe that we have not preserved any independent argument.

[00:02:02] Speaker 04:
However, let's get to that claim construction, because it's weak and really wrong.

[00:02:09] Speaker 04:
And then I'll get to the certain store example later.

[00:02:12] Speaker 04:
But Your Honors, the prosecution history is sometimes, like here, the best evidence.

[00:02:18] Speaker 04:
of what a disputed claim term means.

[00:02:20] Speaker 04:
And with Your Honor's indulgence, I'll just read briefly from the prosecution history, July 2008, Appendix 1652.

[00:02:27] Speaker 04:
Quote, the Franklin patent discloses an invention that is significantly different, significantly different in several important ways from applicants' invention.

[00:02:39] Speaker 04:
Not claim-specific, applicants' invention.

[00:02:41] Speaker 04:
Specifically, the Franklin patent relates exclusively to a substitute number

[00:02:47] Speaker 04:
that is used for a single transaction only.

[00:02:51] Speaker 04:
And the quote ends right there.

[00:02:53] Speaker 04:
I'll just pause and say, a substitute number that is used for a single transaction only is exactly this aspect of the Cohen reference used by the board.

[00:03:02] Speaker 04:
And then at appendix 1637, we note that this remark accompanied a claim amendment that narrowed to add the word purchases to the body of the claim.

[00:03:12] Speaker 04:
So it's a one-two punch of prosecution disclaimer.

[00:03:15] Speaker 04:
It's the words that were disclaiming scope to cover the Cohen embodiment later used to find an anticipation.

[00:03:22] Speaker 04:
And as well, it's a claim amendment, a simultaneous claim amendment.

[00:03:27] Speaker 04:
And if there were any doubt from what I just read to you from July 2008, let's go to May 2009 at Appendix 1575.

[00:03:35] Speaker 01:
What was the page of the first claim amendment you were saying?

[00:03:38] Speaker 04:
The amendment itself, 1637.

[00:03:42] Speaker 04:
And then the remarks that I quoted, 1652.

[00:03:44] Speaker 04:
I'll pause for just a second if your honors want to pull up 1575.

[00:03:55] Speaker 04:
On that page in May of 2009, the applicant stated again, the Franklin patent does not disclose a payment category that is to a single merchant, but rather a proxy number that is limited to a single transaction.

[00:04:10] Speaker 04:
And by then, your honors,

[00:04:11] Speaker 04:
As well, the claim language has been amended again with yet another reference to purchases plural as part of what a payment category is.

[00:04:20] Speaker 01:
So can I ask this, and this may not be fresh enough.

[00:04:24] Speaker 01:
So one can read, tell me why one can't read these several passages as saying Franklin is about single purchases.

[00:04:40] Speaker 01:
It's not about single merchants.

[00:04:42] Speaker 01:
Ours is about single merchants.

[00:04:45] Speaker 01:
That doesn't mean that yours is about single merchants plus multiple transactions.

[00:04:55] Speaker 01:
It focuses on transaction versus merchant in the distinguishing of Franklin, not single versus multiple.

[00:05:06] Speaker 04:
In fact, to answer your question, I believe it's explaining that the single merchant limitation wording, the verbiage for that, for how you define a payment category limited to a single merchant, the applicant there is defining it not to cover exactly what he said, a proxy number that is limited to a single transaction.

[00:05:30] Speaker 04:
So he's sort of sweeping it all in globally.

[00:05:32] Speaker 04:
He's saying, if you show me a single use card,

[00:05:36] Speaker 04:
which is just a proxy number limited to a single transaction, I'm telling the world I do not intend to cover that.

[00:05:43] Speaker 04:
And I'm telling the world explicitly I'm pointing to a limitation that I say excludes it.

[00:05:48] Speaker 04:
And then I'm also amending the claims to add the plural word purchases in important places.

[00:05:54] Speaker 04:
And it's not only the prosecution history, Your Honors.

[00:05:56] Speaker 04:
It's also the structure of the specification.

[00:05:59] Speaker 04:
If you look to the middle of column eight in each of the patents, I don't have an appendix site, but there are the two patents in suit.

[00:06:06] Speaker 04:
The claimed embodiments come from the middle of column 8.

[00:06:12] Speaker 04:
The paragraph before that, that starts on column 7, is a single-use embodiment that the applicant chose not to claim.

[00:06:19] Speaker 04:
Where he starts the column 8 paragraph, he talks about, this is where I'm going to discuss the multi-transaction authorization embodiment.

[00:06:28] Speaker 04:
So the structured specification

[00:06:31] Speaker 04:
builds the claims around the specification paragraph that explicitly says multi-transaction authorization.

[00:06:39] Speaker 02:
But aren't they dependent claims that talk about multi-transactions?

[00:06:43] Speaker 04:
Let's distinguish two things.

[00:06:47] Speaker 04:
Yes, Your Honor, the dependent claims talk about multiple instances of using the card.

[00:06:54] Speaker 04:
The independent claims talk about the payment category definition having to include

[00:07:01] Speaker 04:
multi-transaction capabilities.

[00:07:04] Speaker 04:
So there's a distinction here between how you define the card, what the payment category is, and then the ultimate uses of the card.

[00:07:11] Speaker 04:
Now, of course, the dependent claims.

[00:07:12] Speaker 02:
Shouldn't that be consistent, though?

[00:07:15] Speaker 04:
It is absolutely.

[00:07:16] Speaker 04:
It should be consistent.

[00:07:17] Speaker 04:
The claim structure is actually consistent.

[00:07:19] Speaker 04:
So claim one, for example, is, under our contentions, multi-transaction authorization capability.

[00:07:25] Speaker 04:
That's the definition of the payment category.

[00:07:28] Speaker 04:
So it can't cover a single-use card.

[00:07:30] Speaker 04:
And then claim, I can't remember, 14 or 15 talks about the instance of multiple users.

[00:07:35] Speaker 02:
Why couldn't a multi-transaction capability also be a single transaction capability?

[00:07:45] Speaker 04:
I'm not sure I follow the question.

[00:07:48] Speaker 04:
By multi-transaction capability, that's expressly a disclaimer and a disavowal of a single-use card.

[00:07:55] Speaker 04:
Multi-transaction authorization capability.

[00:07:58] Speaker 04:
as the specification describes it, and then it comes into the words of the claims as purchases.

[00:08:02] Speaker 04:
And let me also point to the preamble talks about making multiple purchases using terminology that forms the antecedent basis for future claim limitations using the term purchases.

[00:08:16] Speaker 04:
It's the classic scenario where the preamble does breathe life and meaning into the claim.

[00:08:21] Speaker 04:
And then finally, the most undeniable claim language that one can see in the patents.

[00:08:26] Speaker 04:
Now, we think all claims have this capability.

[00:08:29] Speaker 04:
But I would ask your honors to look at the 486 patent, claim 24, and the 988 patent, claim 17.

[00:08:35] Speaker 04:
In the claim limitations for those, there's explicitly the words defining what is a payment category for those claims.

[00:08:43] Speaker 04:
It permits a, quote, series of subsequent purchases.

[00:08:47] Speaker 04:
Series of subsequent purchases.

[00:08:48] Speaker 04:
So there can be no argument that those claims

[00:08:51] Speaker 04:
read on top of what the board thought that they did that is the Cohen embodiment of a single transaction card.

[00:08:59] Speaker 04:
So moving to the next patentability error, that's the board misapprehending the so-called certain store example in Cohen.

[00:09:09] Speaker 04:
And what the board should have determined is that the certain store example falls outside the claim language as previously construed in this court.

[00:09:17] Speaker 04:
Now, just to recap of that construction by this court,

[00:09:20] Speaker 04:
There's a prohibition against, or I think the court called it a timing sequence, but there's a prohibition against what I'm calling pre-identifying what goes into the placeholder for a payment category in terms of the identity of the merchant.

[00:09:34] Speaker 04:
So the court said that at a first stage in time, there's a setting of the number of the merchants, but not an identification of who they are.

[00:09:42] Speaker 04:
And then at a second point in time, there's the identification of who they are.

[00:09:45] Speaker 04:
That's the claim construction from before.

[00:09:50] Speaker 04:
This is well briefed on our part why a certain store, as described in Cohen, doesn't read on this.

[00:09:57] Speaker 04:
Because if you're identifying a certain store and then you're handing the card, or if you're creating a card that's purpose for a certain store, then you hand that card to a consumer.

[00:10:09] Speaker 04:
The reality on the ground is that the consumer has to know where to go.

[00:10:12] Speaker 04:
You don't send the consumer on a hunt to guess whether it's the dry cleaner down the street or the Sears across town.

[00:10:19] Speaker 04:
So the real world backs us up in this.

[00:10:23] Speaker 04:
The certain store language in Cohen can't read on this court's claim construction because it pre-identifies the identity of who is in that payment category.

[00:10:33] Speaker 04:
And plus, the undisputed dictionary definitions that both sides have pointed to include that a certain store means a fixed, settled, or known store.

[00:10:43] Speaker 02:
Were those dictionaries before the board?

[00:10:45] Speaker 04:
They were not, Your Honor.

[00:10:48] Speaker 04:
OK.

[00:10:49] Speaker 04:
If I can spend 30 seconds, I see I'm into my rebuttal.

[00:10:51] Speaker 04:
But on the policy change, why, at the very minimum, there should be a remand.

[00:10:55] Speaker 04:
There's no dispute that I could perceive in the briefing that the Patent Office's policy actually did change with the labeling of Coltech and two other decisions as informative.

[00:11:05] Speaker 04:
And that policy, as it now exists, contrasted from how it existed before, is that the discretion of the board under Section 315 and 325 has to be channeled so that

[00:11:16] Speaker 04:
there's so that there's no conducting of the trial.

[00:11:20] Speaker 04:
There's no conduct of IPR, no review when the same petitioner, the same attacker has previously presented the same art unsuccessfully.

[00:11:30] Speaker 02:
But your point is discretion.

[00:11:32] Speaker 02:
Are we to say that there is no way that the director could make a change in policy that's not retroactive?

[00:11:41] Speaker 04:
Not under the Yang case, interestingly cited in the intervener's own brief, the Yang case says that if the board or an agency has set a policy, it cannot rationally depart from the policy in future cases.

[00:11:55] Speaker 02:
Well, that's different than resetting a policy, right?

[00:12:01] Speaker 04:
I believe, Your Honor, I might be referring to the retroactivity question.

[00:12:04] Speaker 02:
Right.

[00:12:04] Speaker 04:
The retroactivity question is actually resolved by the fact that this is a policy change without a statement of non-retroactivity.

[00:12:12] Speaker 04:
So it doesn't state, hey, this policy only applies in the future.

[00:12:15] Speaker 04:
In fact, it's silent on that.

[00:12:17] Speaker 02:
But the policy change occurred after the board reached its decision in its case, correct?

[00:12:22] Speaker 04:
That is correct, Your Honor, in the timing.

[00:12:24] Speaker 04:
But just one citation of a Supreme Court decision that supports that agency adjudication policy announcements do apply retroactively.

[00:12:33] Speaker 04:
is called Chainery 2 from 1947, 332 US 194.

[00:12:40] Speaker 04:
And I'd like to save my remaining time for rebuttal.

[00:12:42] Speaker 04:
Thank you.

[00:13:04] Speaker 03:
May it please the court?

[00:13:05] Speaker 03:
I'll eat Williams for MasterCard.

[00:13:07] Speaker 03:
We have saved five minutes for the Patent Office representative to discuss some of the procedural issues, but I'd like to turn to the merits, beginning with the claim construction issue.

[00:13:17] Speaker 03:
I think the court correctly identified the claim construction issue as being dispositive for the single merchant claims.

[00:13:23] Speaker 03:
I'm going to point out that there's another set of claims that relate to one or more merchants, as I'm sure the court remembers.

[00:13:29] Speaker 03:
Those claims were separately invalidated.

[00:13:31] Speaker 03:
The claim construction issue with respect to whether

[00:13:34] Speaker 03:
multiple purchases are required or not is irrelevant to those claims.

[00:13:38] Speaker 03:
They fall under either construction, given the board's findings as to the disclosure of Cohen's type and group of stores limitation, as well as the board's reliance on any computer store disclosure of Cohen.

[00:13:51] Speaker 01:
So I thought I was remembering that the board said that if the single merchant claims are unpatentable,

[00:14:04] Speaker 01:
then so are the morality ones so that you're not walking away from one issue actually, if resolved in your favor, can decide the case.

[00:14:16] Speaker 03:
No, that's true.

[00:14:17] Speaker 03:
So if the court were to conclude that the board's claim construction is correct as to whether multiple purchases are required or not, then all the claims disappear.

[00:14:26] Speaker 03:
My point is that if this court were

[00:14:29] Speaker 03:
were to try to change this claim construction in some way to require multiple purchases and to conclude that somehow Cohen's disclosure didn't anticipate under that construction, that would only affect the single merchant claims because the one or more merchant claims are clearly broader than the single merchant claims.

[00:14:44] Speaker 03:
So they would be invalidated by Cohen regardless of the claim construction.

[00:14:48] Speaker 02:
So tell us why discussions of multiple transactions also include single transactions.

[00:14:59] Speaker 03:
You're talking about in the Cohen reference?

[00:15:01] Speaker 03:
I'm just not sure I understood the question.

[00:15:02] Speaker 02:
On the claim construction, I mean, the board ultimately found that, though, that does talk about multiple transactions, it could include what?

[00:15:10] Speaker 03:
Right.

[00:15:11] Speaker 02:
So why do we say multiple means one?

[00:15:13] Speaker 02:
What language in the claim supports that?

[00:15:16] Speaker 03:
Yeah, I think, well, so then this turns out as to which claims we actually look at, because we just heard an argument about series that appears only in, I think, two claims across these two patents.

[00:15:25] Speaker 03:
There was never a construction of series.

[00:15:27] Speaker 03:
The board was never asked to reach that.

[00:15:28] Speaker 03:
That has to do with how the patent owner argued this case below, which is to just say all the claims require multiple transactions.

[00:15:34] Speaker 03:
And then they focused their argument on one claim in particular.

[00:15:39] Speaker 03:
And we can look at that one claim.

[00:15:45] Speaker 02:
The board focused on one claim.

[00:15:47] Speaker 03:
The board did, because the patent owner in its original responses below focused on claim 21 of the 988 patent.

[00:15:54] Speaker 02:
But it did argue before the board that that wasn't representative, right?

[00:15:58] Speaker 03:
I don't think they argued it wasn't.

[00:15:59] Speaker 03:
They never separately argued these independent claims.

[00:16:02] Speaker 03:
So if there's an argument being made now that series requires multiple transactions, that would only affect two of the claims, not, for instance, claim 21.

[00:16:10] Speaker 03:
And they never argued that below.

[00:16:12] Speaker 03:
They never argued that there was a different claim scope across these independent claims.

[00:16:15] Speaker 03:
They chose to say that all of the claims require multiple transactions.

[00:16:19] Speaker 03:
They focused their argument.

[00:16:20] Speaker 03:
They said that's true of all the independent claims.

[00:16:23] Speaker 03:
They mentioned every independent claim and said they all require multiple transactions.

[00:16:27] Speaker 03:
And they focused on claim 21 of the 998 patent.

[00:16:31] Speaker 02:
But they separately argued the other patent in their patent owner response, right?

[00:16:36] Speaker 03:
They separately argued.

[00:16:37] Speaker 03:
So originally, the way this case got presented to the board, there were two IPRs, one for each patent.

[00:16:42] Speaker 03:
They were separately briefed.

[00:16:44] Speaker 03:
But the arguments were essentially identical across both of those proceedings.

[00:16:48] Speaker 03:
There was never a distinction made between, for instance, the claim

[00:16:53] Speaker 03:
in the 486 patent uses the word series until we get to this court.

[00:16:58] Speaker 03:
So they weren't separately argued below.

[00:17:00] Speaker 03:
And that's what the PTEP found in its remand decision, that they weren't separately argued below.

[00:17:04] Speaker 03:
They were always argued together, and the focus was always on claim 21 of the 988 patent.

[00:17:10] Speaker 03:
With respect to that particular claim, at most we have recitations here of, for instance,

[00:17:26] Speaker 03:
You know, authorize a payment for a purchase.

[00:17:29] Speaker 03:
That's step E of claim 21.

[00:17:31] Speaker 03:
Authorizing payment for said purchase, that's step F of claim 21.

[00:17:34] Speaker 03:
Nothing in the claim requires there be multiple purchases.

[00:17:38] Speaker 03:
Now, it can include multiple purchases.

[00:17:40] Speaker 03:
We're not disagreeing with that.

[00:17:41] Speaker 03:
The claim scope is certainly broad enough to encompass multiple purchases.

[00:17:45] Speaker 03:
But there's nothing in this claim that disavows a single purchase.

[00:17:48] Speaker 03:
And in fact, it seems to specifically be directed to a single purchase when looking at the remaining claim limitations.

[00:17:56] Speaker 03:
Now, we heard something about the file history.

[00:17:59] Speaker 01:
Just on the language.

[00:18:01] Speaker 01:
So there's the plural word in the preamble, the plural word being purchases.

[00:18:06] Speaker 01:
Then there's a plural word in, where was it?

[00:18:11] Speaker 01:
I was just looking at it.

[00:18:13] Speaker 01:
Isn't transactions?

[00:18:14] Speaker 03:
Step B says limits transactions.

[00:18:16] Speaker 03:
Is that the one?

[00:18:17] Speaker 01:
Yes.

[00:18:20] Speaker 01:
So why do those words not tell you that

[00:18:26] Speaker 01:
There has to be more than one.

[00:18:29] Speaker 03:
So a couple reasons.

[00:18:30] Speaker 03:
First of all, remember in the context of this appeal, we're applying the broadest reasonable interpretation.

[00:18:35] Speaker 03:
So we're looking at what would a person of ordinary skill in the yard have given this claim in terms of its broadest reasonable interpretation.

[00:18:42] Speaker 03:
And if the patent owner didn't like that, they could, of course, have appealed, excuse me, amended to specifically recite multiple transactions, which, by the way, some dependent claims do.

[00:18:52] Speaker 03:
say multiple transactions.

[00:18:53] Speaker 03:
So the patent owner knows how to claim that when it wanted to, and it didn't, and it chose not to make an amendment to reflect that below.

[00:19:00] Speaker 03:
The second point is the specification itself confirms this use of transactions in the plural to mean a singular.

[00:19:06] Speaker 03:
This is at appendix page A82, column 7, line 63.

[00:19:13] Speaker 01:
I'm sorry, which patent by column?

[00:19:15] Speaker 03:
OK, it's in the 988 patent.

[00:19:17] Speaker 03:
OK.

[00:19:17] Speaker 03:
And column what?

[00:19:18] Speaker 03:
7.

[00:19:19] Speaker 03:
Thanks.

[00:19:20] Speaker 03:
Bottom of column 7.

[00:19:21] Speaker 03:
Right.

[00:19:22] Speaker 03:
Line 63.

[00:19:23] Speaker 03:
This is in describing the invention.

[00:19:25] Speaker 03:
Such transactions may include a single transaction.

[00:19:29] Speaker 03:
So we know the patent owner himself is using this word in plural to mean one or more.

[00:19:34] Speaker 03:
That's also true, by the way, when he uses merchants and other terms in the patent that were previously construed below.

[00:19:41] Speaker 02:
So what line of column seven were you reading?

[00:19:44] Speaker 03:
I was reading at 63, I think.

[00:19:45] Speaker 03:
It's hard to tell exactly, but right around there.

[00:19:52] Speaker 03:
We also cite this court's case law.

[00:19:54] Speaker 03:
It's in page 21 of our brief, the red brief, discussing the use of plural and how plural terms often mean one or more.

[00:20:02] Speaker 03:
It can include the singular.

[00:20:18] Speaker 03:
So I think all those things together, the fact that

[00:20:21] Speaker 03:
There were some dependent claims that specifically require multiple transactions.

[00:20:25] Speaker 02:
What's your response to your friend on the other side who says that a single transaction might be disclosed in the specification, but it wasn't ultimately claimed?

[00:20:39] Speaker 02:
Well, my response...

[00:20:41] Speaker 02:
disclaimer in the prior art that it ultimately was claimed differently.

[00:20:46] Speaker 03:
Yeah, I see no disavowal in the file history of the Patent Office.

[00:20:49] Speaker 03:
The PTAB didn't find a disavowal in the file history either of claiming one or more transactions.

[00:20:55] Speaker 03:
The Franklin patent had to do with pre-identifying a merchant, which, as you know, is the issue that came up to this court last time this case was here.

[00:21:04] Speaker 03:
The amendments that were made were relating to the fact that the credit card can be used for multiple purchases, which, of course, it's true.

[00:21:10] Speaker 03:
Your account can be used for multiple purchases, but that's not the limitation in this claim.

[00:21:14] Speaker 03:
This claim is about authorizing a transaction using this.

[00:21:20] Speaker 02:
Well, while we did consider the single merchant issue the last time, we didn't actually have presented to us or have opportunity to consider the single transaction issue, right?

[00:21:33] Speaker 03:
I think that's fair.

[00:21:35] Speaker 03:
It wasn't certainly the focus of the briefing last time, although the issue, I think, was mentioned.

[00:21:38] Speaker 03:
But it wasn't addressed in the court's opinion specifically, other than that the court did turn and look to the file history disclosure discussion of the Langhans reference, where, again, there was a discussion of a transaction in the file history, not multiple transactions.

[00:21:54] Speaker 03:
So I think under the BRI, in view of the fact that the specification clearly is using the plural word transactions to include a single transaction,

[00:22:02] Speaker 03:
in view of the dependent claims that do specifically claim multiple transactions when that is an element that the patent owner wanted to include, the board's claim construction should be affirmed.

[00:22:16] Speaker 03:
Even if it's not, however, I do want to turn very quickly to the certain store disclosure of Cohen, because the board there made some factual findings that that teaching of Cohen would teach a person of ordinary skill and the art.

[00:22:27] Speaker 03:
They would understand

[00:22:28] Speaker 03:
that that can include the situation where the store is not specifically identified.

[00:22:33] Speaker 03:
And so therefore, it falls within the scope of the single merchant limitation and can include multiple purchases.

[00:22:41] Speaker 01:
And is that the point on which I may have misunderstood this?

[00:22:45] Speaker 01:
Mr. Greensman said that's really not consistent with Cohen's language about a certain store.

[00:22:53] Speaker 03:
Well, we think it is consistent.

[00:22:54] Speaker 01:
No, I think that's the same.

[00:22:56] Speaker 01:
you know, the wandering card holder wondering, where should I go with this?

[00:23:02] Speaker 01:
Where is this certain store?

[00:23:05] Speaker 03:
So the way the board addressed that question is to look at the entirety of the teachings of Cohen and to say, you know, there is a breadth of disclosure here.

[00:23:13] Speaker 03:
The Cohen teaches many different ways to use, to limit this card, one of which is to limit the card to a certain store.

[00:23:20] Speaker 03:
And they say a person of reverse skill in the art reading Cohen,

[00:23:24] Speaker 03:
would not assume that you have to pre-identify the merchant in order to make a limitation to a certain store.

[00:23:30] Speaker 03:
You could identify the merchant by saying, the next store I use this at will be the certain store, and the card is limited to that store.

[00:23:36] Speaker 03:
That's how the board interpreted Cohen.

[00:23:39] Speaker 02:
Wait, I don't really understand that.

[00:23:40] Speaker 02:
So you say, the next store I use this card at is my certain store?

[00:23:45] Speaker 02:
Correct.

[00:23:46] Speaker 02:
And then it becomes a different certain store the next time you use the card?

[00:23:49] Speaker 02:
No, then at that point.

[00:23:49] Speaker 02:
How is there a limitation?

[00:23:51] Speaker 03:
Because at that point, then, as soon as you use the card,

[00:23:53] Speaker 03:
That's that you go into a merchant, you use the card, that's your certain store.

[00:23:57] Speaker 03:
OK, now I've used that certain store.

[00:23:58] Speaker 03:
The card can only be used at the certain store, not some other store.

[00:24:04] Speaker 03:
So that was a factual finding that the board made based on the Cohen reference.

[00:24:08] Speaker 03:
This is not a court of first impression.

[00:24:11] Speaker 03:
You have to give deference to the board's findings if they're supported by substantial evidence.

[00:24:15] Speaker 03:
Cohen's teachings, I think, clearly provide substantial evidence for that finding.

[00:24:19] Speaker 03:
And even if they didn't, as we point out, we have an alternative argument for affirmance, which is the Cohen's teaching of any computer store.

[00:24:26] Speaker 03:
That, in our view, clearly includes a single computer store where you can make multiple purchases.

[00:24:32] Speaker 03:
The board obviously disagreed with us and said that that is plural.

[00:24:35] Speaker 03:
And we think it was an error to do that.

[00:24:37] Speaker 03:
And it seems to have conflated the disclosure of any computer store with Cohen's teachings of types of stores, plural.

[00:24:45] Speaker 03:
I see I've run into my colleague's time.

[00:24:50] Speaker 03:
Thank you, Your Honor.

[00:24:53] Speaker 00:
Yes.

[00:24:57] Speaker 00:
May I please the court?

[00:24:58] Speaker 00:
Coke Stewart for the intervener on appeal, director of the USPTO.

[00:25:01] Speaker 00:
If Your Honor has any questions about the timing issue, I'll just devote my argument to the alleged new policy of the board.

[00:25:10] Speaker 00:
So the argument that Dagestan is making is that the board has announced a new policy under 325D

[00:25:18] Speaker 00:
And they actually try and tries to sweep in 315D as well.

[00:25:22] Speaker 00:
But as I think we made clear in our brief, informative decisions of the board are not agency policy.

[00:25:29] Speaker 00:
They're just examples of non-binding ways individual panels can handle cases.

[00:25:34] Speaker 00:
And I think the best evidence of the fact that it's not an agency policy is the fact that if you look at the three informative decisions here, they actually approach the issue in different ways.

[00:25:44] Speaker 00:
And the Coltech decision, which D'Agostino cites repeatedly,

[00:25:48] Speaker 00:
It does seem to be kind of an open and shut case.

[00:25:50] Speaker 00:
They see if the arguments are the same or substantially the same, and they decide to exercise their discretion not to institute.

[00:25:57] Speaker 00:
But in the other cases, they have a different analysis, and they go through other factors that go beyond whether the question before the court is same or substantially the same.

[00:26:05] Speaker 02:
But it is true that under the APA, an agency can't just randomly treat one party before it differently than another, right?

[00:26:15] Speaker 00:
That is true.

[00:26:16] Speaker 00:
I think if we cabin our discretion, then we need to follow our own policy of how that discretion's been cabin.

[00:26:23] Speaker 00:
This hasn't happened here yet.

[00:26:25] Speaker 00:
There is no formal policy of the board on how to handle these cases.

[00:26:29] Speaker 00:
They seem to depend on the facts and circumstances of the case, even in the three informative decisions here.

[00:26:34] Speaker 00:
The question of whether the arguments were the same or substantially the same required a fair level of analysis.

[00:26:40] Speaker 00:
They really had to go through and compare what claims were at issue, what art was at issue, what arguments were made.

[00:26:45] Speaker 00:
and so forth.

[00:26:46] Speaker 00:
And then the next question, even if the board did find that they were the same or substantially the same, there would be other factors to consider and whether to exercise discretion.

[00:26:57] Speaker 02:
But did any of that analysis occur here?

[00:26:59] Speaker 00:
It didn't occur here because D'Agostino didn't make those arguments to the board.

[00:27:04] Speaker 00:
So the board didn't get to consider its position in the first instance.

[00:27:07] Speaker 00:
D'Agostino is arguing that there is a policy change, but that's not really consistent with D'Agostino's conduct for the agency.

[00:27:14] Speaker 00:
Because when D'Agostino was before the agency in the CBM cases, it specifically opposed CBM institution on the basis of 325D.

[00:27:23] Speaker 00:
So D'Agostino is not well positioned to say it didn't understand that under the statute it had the ability to make those arguments until, you know, October 2017, a month after it filed its appeal brief in this case.

[00:27:37] Speaker 00:
So for those reasons, not only do we not believe there's a policy change, but we believe that D'Agostino waived its right to make those arguments.

[00:27:44] Speaker 01:
Are those two arguments independent, or does the absence of a definitive new policy support the argument for waiver?

[00:27:58] Speaker 01:
Because sometimes a clear enough change in law, and maybe this would be that if it existed, would justify

[00:28:06] Speaker 01:
late raising of an argument that simply wasn't available before.

[00:28:10] Speaker 00:
Agreed.

[00:28:11] Speaker 00:
I mean, if this was really a change in the law, then I think they would have a pretty fair argument to say, consider remand.

[00:28:19] Speaker 00:
And oftentimes, the parties will speak to the USPTO.

[00:28:23] Speaker 00:
We can make arrangements so that we're not bringing these issues to the court when they should be properly remanded.

[00:28:28] Speaker 00:
But here, the right existed in the statute when the AIA was passed.

[00:28:32] Speaker 00:
And D'Agostino took advantage of those arguments before the board.

[00:28:36] Speaker 01:
So let me just like assess the point this way.

[00:28:41] Speaker 01:
Suppose that Caltech was not just informative, but was presidential and announced something like a rule, a real rule.

[00:28:52] Speaker 01:
Would you still have a waiver, a good waiver argument?

[00:28:58] Speaker 00:
I don't think we would have a waiver argument, but I think we would have an argument that

[00:29:02] Speaker 00:
Coltech, if deemed presidential in October 2017, which it wasn't, would still only be forward-looking.

[00:29:09] Speaker 01:
And that's because why?

[00:29:11] Speaker 01:
Like Bowen against Georgetown Hospital kind of thing or something else?

[00:29:14] Speaker 00:
Well, we cite the Supreme Court case, you know, on the general rule that regulations, well... I think that's the one I just mentioned.

[00:29:21] Speaker 00:
Yes.

[00:29:21] Speaker 00:
That has to be forward-looking, but also the board's standard operating procedures say that even with respect to presidential decisions, they apply to subsequent cases, not to then pending cases.

[00:29:33] Speaker 00:
So again, we might be able to work out an arrangement, especially the significant change of law, with the parties.

[00:29:39] Speaker 00:
But we're certainly not under obligation, nor is this court under any obligation, to force a remand for further consideration.

[00:29:45] Speaker 01:
But you did something retroactive on SAS, right?

[00:29:49] Speaker 01:
It was applied post-institution by that announcement.

[00:29:53] Speaker 00:
My understanding is that the agency is agreeing to take remands of these cases to look at all the claims and all the grounds to comply with SAS.

[00:30:03] Speaker 00:
That arguably was a very significant change in the law, and not only a change in the law, but something that is a mandatory requirement.

[00:30:10] Speaker 00:
All claims must be evaluated by the board.

[00:30:13] Speaker 00:
All grounds must be evaluated by the board.

[00:30:15] Speaker 00:
Here, this is a discretionary issue.

[00:30:17] Speaker 00:
So even if we were to change in policy, it's still discretionary, which wouldn't support remand in this case.

[00:30:24] Speaker 00:
Your honor is having no further questions.

[00:30:25] Speaker 00:
Thank you.

[00:30:25] Speaker 00:
Thank you.

[00:30:34] Speaker 04:
Very quickly on policy, then I'd like to get back to patentability.

[00:30:37] Speaker 04:
Adidas versus Nike from July 2nd of this year does state that principle that if there's a change in the law, then there was no obligation before the board to raise the exact issue as it was raised in the appellate court.

[00:30:52] Speaker 04:
Also, I think this is the first clear time I've heard the director say that there was no policy change, which is a surprise to me because the

[00:31:03] Speaker 04:
Labeling of the decision as informative meant that it's stating the new norm.

[00:31:08] Speaker 04:
This is not my words.

[00:31:09] Speaker 04:
This is the words of the Patent Office SOP, stating a new norm of the Patent Office.

[00:31:13] Speaker 04:
And I see informative decisions as something like operating on discretionary, channeling discretionary issues.

[00:31:20] Speaker 04:
And I see presidential decisions as something like what this court does with announcing standards of law.

[00:31:27] Speaker 04:
So I think they harmonize side by side, and they both represent

[00:31:30] Speaker 04:
potential policy issues.

[00:31:32] Speaker 01:
What about the point that as a general matter, or maybe this is even, I think maybe she referred to the standard operating procedure.

[00:31:42] Speaker 01:
These kinds of things are, as a general matter, prospective only.

[00:31:47] Speaker 04:
The prospective statement exists only in the description of what is a precedential decision.

[00:31:52] Speaker 01:
In the standard operating procedure number, whatever.

[00:31:55] Speaker 04:
Correct.

[00:31:55] Speaker 04:
The SOP is what they call it.

[00:31:59] Speaker 04:
Right.

[00:31:59] Speaker 04:
I think that answers the question.

[00:32:01] Speaker 04:
The back to patentability, please, Your Honors, keep in mind there are two separate things going on in every one of these claims.

[00:32:09] Speaker 04:
One is the definition of what is a payment category.

[00:32:12] Speaker 04:
That is what we are saying is the part of the claim that requires a multiple transaction capability in every secure transaction card.

[00:32:20] Speaker 04:
The second thing is there are some discussion, my friend is correct, where one transaction is described in some greater detail.

[00:32:27] Speaker 04:
That one transaction description in the middle of a method claim is talking about the communication in order to effect a use of that multi-transaction card.

[00:32:36] Speaker 04:
But make no mistake, the card itself has always had to be programmed with a multi-transaction capability.

[00:32:43] Speaker 04:
Finally, whether we independently argued, I'd ask your honors to look at the following pages, 9330 to 31, 8876,

[00:32:56] Speaker 04:
I'll read 9643 right here.

[00:32:59] Speaker 04:
This shows that we were not grouping the claims together.

[00:33:02] Speaker 01:
9643?

[00:33:03] Speaker 04:
9643.

[00:33:04] Speaker 04:
It's the transcript of the hearing, line 20, talking about claim 24 of the 486 patent, which is different from the thing that they call the representative claim.

[00:33:15] Speaker 04:
Line 20.

[00:33:16] Speaker 04:
I'll pause well.

[00:33:18] Speaker 04:
Thank you.

[00:33:19] Speaker 04:
OK, 9643.

[00:33:24] Speaker ?:
OK.

[00:33:25] Speaker 04:
I'll go back to line 17.

[00:33:27] Speaker 04:
It says, designating one of a plurality of predefined payment categories, which limit a nature of subsequent purchases in at least one of said payment categories.

[00:33:38] Speaker 04:
Actually, nature is a typo.

[00:33:39] Speaker 04:
You meant number.

[00:33:40] Speaker 04:
Because you can see right here, if you've got a number of subsequent purchases, that's the claim language from claim 24 in the 4A6 patent going on, that's clearly more than one purchase.

[00:33:51] Speaker 04:
And a single-use card cannot be used to fit that element.

[00:33:54] Speaker 04:
It just can't.

[00:33:55] Speaker 04:
We separately argued the independent claims.

[00:33:57] Speaker 04:
We never conceded representative claim status.

[00:34:01] Speaker 04:
And finally, my friend pointed to column 7, line 63, as a so-called definition that transactions mean something singular.

[00:34:10] Speaker 04:
It sounded a little bit absurd to me.

[00:34:13] Speaker 01:
Not quite.

[00:34:13] Speaker 01:
He didn't call it a definition.

[00:34:15] Speaker 01:
He said, the plural in general sometimes can mean the singular and your patent

[00:34:21] Speaker 01:
indicates that you at least contemplated that possible usage.

[00:34:28] Speaker 04:
That's my friend's position.

[00:34:29] Speaker 04:
I understand, Your Honor.

[00:34:31] Speaker 04:
But Your Honor, the sentence that he started begins with the words, such transactions.

[00:34:36] Speaker 04:
So you have to read one sentence before to find out what's really being discussed here, which reads,

[00:34:41] Speaker 04:
The payment categories may be collectively defined as a variety of different types of transactions.

[00:34:47] Speaker 04:
Such transactions may include a single transaction for a specific amount of a purchase to be consummated.

[00:34:52] Speaker 04:
That's the types of transactions.

[00:34:55] Speaker 04:
Loose language, I agree.

[00:34:57] Speaker 04:
But then move on to column 8.

[00:34:58] Speaker 04:
And that's where, starting at line 17 in the 98 patent, that's the meat of what became the claims.

[00:35:06] Speaker 04:
Line 17 starts where it talks about multi-transaction authorization.

[00:35:10] Speaker 04:
That's what became the claims.

[00:35:12] Speaker 02:
So it says may also include.

[00:35:15] Speaker 04:
Correct, in the sense that there is a power by the applicant to claim either the single transaction or the multi-transaction.

[00:35:23] Speaker 04:
The multi-transaction are supported by column 8 that I just pointed to, starting line 17.

[00:35:28] Speaker 04:
And that's what became the claims, leaving in the dust, leaving behind any attempt to claim a single transaction card.

[00:35:34] Speaker 04:
So Cohen can't anticipate.

[00:35:38] Speaker 04:
Was there any further questions?

[00:35:40] Speaker 02:
Thank you.

[00:35:41] Speaker 02:
The cases will be submitted.

[00:35:42] Speaker 02:
We thank both counsels.