[00:00:00] Speaker 00:
We have four cases on the calendar this morning.

[00:00:04] Speaker 00:
We have two cases from the Patent Trial and Appeal Board, one case from the Court of Appeals Veterans Claims, and one from the Court of International Trade.

[00:00:14] Speaker 00:
The first case is Neology v. CAHPSTRAFFICCOM number 17-1228.

[00:00:20] Speaker 00:
Mr. Schloss, you may proceed.

[00:00:28] Speaker 03:
Thank you, Your Honor.

[00:00:29] Speaker 03:
Good morning.

[00:00:31] Speaker 03:
May it please the court.

[00:00:33] Speaker 03:
The issue in this appeal is whether either of two references, Snodgrass or Herta, discloses what the 044 and 568 patents refer to as a security key.

[00:00:46] Speaker 03:
The PTAP incorrectly concluded that what Snodgrass refers to as an arbitration number and what Herta refers to as a random number qualify as security keys, and that both

[00:00:59] Speaker 03:
References therefore anticipate the 568 and 044 patents.

[00:01:05] Speaker 03:
Because the board was incorrect, Neology respectfully requests that this court reverse the findings of invalidity.

[00:01:12] Speaker 00:
I would like to start just by asking you a procedural question.

[00:01:16] Speaker 00:
There are some non-instituted claims and grounds in this case.

[00:01:21] Speaker 00:
Does your client have a position on the sash related issues?

[00:01:28] Speaker 03:
I anticipated this question, but this is not something we've delved into very deeply.

[00:01:33] Speaker 03:
I understand that the court has requested briefing from parties and other cases on this issue.

[00:01:38] Speaker 03:
I think it's our position that we can proceed, that the court does have jurisdiction and that the fact that non-instituted claims are not part of this particular appeal does not prevent us from going forward.

[00:01:50] Speaker 03:
I believe those may qualify as final judgments by the PTAB.

[00:01:56] Speaker 03:
The finality was

[00:01:57] Speaker 03:
at the institution stage.

[00:02:00] Speaker 03:
So I believe that this court does have jurisdiction and can proceed.

[00:02:04] Speaker 00:
And you have no request for remand or anything like that?

[00:02:07] Speaker 03:
No, we are not requesting remand.

[00:02:10] Speaker 00:
Thank you.

[00:02:13] Speaker 03:
So I think what we begin with here is the construction of a claim at issue, the terms at issue.

[00:02:20] Speaker 03:
There's really no disagreement as to the construction of the term security key, which is really at the heart of the case.

[00:02:27] Speaker 03:
The board and the parties agree that a security key is a key that is checked and validated to grant or deny access to a tag's memory.

[00:02:37] Speaker 01:
And it's... Why don't you tell me why it is that the board was wrong?

[00:02:41] Speaker 01:
Because unless I've misunderstood what's going on here is the arb number on the one hand and the other unlocks something.

[00:02:53] Speaker 01:
Right?

[00:02:53] Speaker 01:
Yes, sir.

[00:02:54] Speaker 01:
They give you access to something.

[00:02:56] Speaker 01:
Correct.

[00:02:57] Speaker 01:
And I think it was the board said that something is enough to meet their interpretation of the claim.

[00:03:05] Speaker 03:
I think, first of all, that something has to be memory, because the way it's construed is the security key gives access to a tag's memory, or grant or deny access to a tag's memory.

[00:03:18] Speaker 03:
So that means access to something that's in a memory.

[00:03:21] Speaker 03:
Yes.

[00:03:22] Speaker 03:
I mean, what's talked about in the claims is an identifier.

[00:03:26] Speaker 01:
But I thought the board made a finding that Snodgrass does grant access to something in memory.

[00:03:34] Speaker 03:
I'm not sure that's what the board found.

[00:03:36] Speaker 03:
I think what the board... My understanding of what the board said is that at some point, access to memory happens in Snodgrass after the arbitration number is checked.

[00:03:48] Speaker 01:
After you check it, right.

[00:03:48] Speaker 03:
But I don't... This is where I think the board is wrong.

[00:03:52] Speaker 01:
Is that a fact finding that's wrong?

[00:03:55] Speaker 01:
Help me else, because what we're in this orb we're in is we are reviewing a decision by the board.

[00:04:03] Speaker 01:
And if it's a fact issue, we're reviewing it for substantial evidence.

[00:04:08] Speaker 01:
So what the board is telling and what a reference teaches in the jurisdiction, this board, for a long, long time, has been a fact question.

[00:04:15] Speaker 01:
So what Snodgrass teaches is a fact question.

[00:04:18] Speaker 03:
What Snodgrass teaches is a fact question.

[00:04:20] Speaker 03:
But to the extent this goes into claim construction,

[00:04:23] Speaker 03:
I believe that's a question that this court reviews de novo.

[00:04:26] Speaker 00:
But you have not appealed from the claim construction.

[00:04:28] Speaker 03:
We have not appealed from the actual construction that the board assigned to terms, and the parties actually agreed to.

[00:04:37] Speaker 03:
But I think where the error is in the way the board applied that claim construction.

[00:04:42] Speaker 03:
And so, as I said, the problem isn't the, well,

[00:04:47] Speaker 01:
What would Snodgrass have to do in your judgment to meet the claim limitation?

[00:04:54] Speaker 03:
What Snodgrass would have to do is there would have to be language in Snodgrass that says the checking and validating of the arbitration number somehow gets you into the tag's memory.

[00:05:06] Speaker 03:
And that's not what Snodgrass does.

[00:05:08] Speaker 03:
Snodgrass says, by checking and validating the arbitration number, we know which tag we're talking to.

[00:05:14] Speaker 03:
I want to talk to this tag.

[00:05:16] Speaker 00:
I agree, though, that at some point the memory is accessed.

[00:05:19] Speaker 00:
Absolutely.

[00:05:20] Speaker 00:
Information from the memory is shared.

[00:05:22] Speaker 00:
It is.

[00:05:23] Speaker 00:
And that step would not occur if the arbitration number didn't match.

[00:05:27] Speaker 03:
That's true.

[00:05:28] Speaker 03:
And I think the language that my colleague used in discussion with the board on this is that checking the arbitration number is a prerequisite to gaining access to the tag's memory.

[00:05:39] Speaker 03:
But that is not the same as actually having the number

[00:05:43] Speaker 03:
grant you access to the tag memory.

[00:05:46] Speaker 03:
The arbitration number in Snodgrass does not act as a password.

[00:05:50] Speaker 03:
What it is doing is it's identifying the tag it wants to talk to.

[00:05:55] Speaker 03:
And at some point in the process, yes, access to the memory will be granted.

[00:06:00] Speaker 03:
But it's not through the actual matching of the arbitration number in the tag and the reader.

[00:06:06] Speaker 00:
What is the claim language that you're relying on to require such a tight connection between the arbitration number and the memory access?

[00:06:15] Speaker 03:
Well, the claim language is that the security key is used to get, I believe the actual language is based on the security key, the access to memory.

[00:06:30] Speaker 03:
is based on the security key.

[00:06:32] Speaker 00:
So it's your view that it has to be based only on the security key?

[00:06:36] Speaker 03:
No.

[00:06:37] Speaker 03:
It is not our view that it has to be based only on the security key.

[00:06:40] Speaker 03:
Based directly on the security key?

[00:06:41] Speaker 03:
Based directly is probably a good word.

[00:06:43] Speaker 03:
At some point, it has to be based on the security key.

[00:06:46] Speaker 03:
There could be other things that go on that gave you access to memory.

[00:06:49] Speaker 01:
It doesn't say based directly on it.

[00:06:50] Speaker 03:
It does not.

[00:06:51] Speaker 03:
It does not.

[00:06:53] Speaker 03:
But it says based on the security key.

[00:06:55] Speaker 03:
So at some point, the security key has to act on what's in the tag's memory.

[00:07:01] Speaker 03:
And that's the based on part.

[00:07:09] Speaker 03:
The example we give in the papers is turning on my computer is not going to give me access to secure files on the computer.

[00:07:18] Speaker 03:
I have to put in a password.

[00:07:20] Speaker 03:
The same thing here.

[00:07:22] Speaker 03:
The random number in Snodgrass or the use of any number

[00:07:30] Speaker 03:
It may get me, at some point in the process, that has to happen before I get access to memory.

[00:07:36] Speaker 03:
But the patent claims talk about a security key, a particular number that is used to grant access to memory.

[00:07:43] Speaker 03:
Without that number, memory cannot be accessed.

[00:07:46] Speaker 03:
Or putting it in a positive standpoint, the number is what gives you access to the memory.

[00:07:52] Speaker 03:
That's not true in Snodgrass.

[00:07:54] Speaker 03:
The arbitration number does not give access to memory.

[00:07:57] Speaker 03:
Yes, at some point in the process,

[00:07:59] Speaker 03:
memory is accessed after the random numbers or the arbitration number is validated.

[00:08:05] Speaker 03:
But it's not the validation of that random arbitration number that gives access to the memory.

[00:08:17] Speaker 01:
Does access to the memory actually mean to get inside the memory or to have the key that opens the door?

[00:08:25] Speaker 03:
I'm not sure.

[00:08:27] Speaker 03:
Distinction, Your Honor.

[00:08:28] Speaker 01:
I mean, I think by access to the memory, we've agreed that Snodgrass has got a number.

[00:08:38] Speaker 01:
It's like a key.

[00:08:38] Speaker 01:
If you turn it, it's pointing you towards the memory.

[00:08:45] Speaker 03:
I don't know that that's not what the number in Snodgrass does.

[00:08:48] Speaker 03:
What Snodgrass the number does, it says, this is the tag I want to talk to.

[00:08:54] Speaker 03:
It's not a key that opens the memory.

[00:08:56] Speaker 03:
The snotgrass is about identifying one out of a number of tags.

[00:09:03] Speaker 01:
And once you've identified... But do we agree that snotgrass has a security key?

[00:09:09] Speaker 03:
I don't know.

[00:09:09] Speaker 03:
It may or may not.

[00:09:10] Speaker 03:
I don't think it talks about a security key.

[00:09:13] Speaker 01:
Doesn't the board decision presume that the number is a security key?

[00:09:19] Speaker 03:
The board, I think, concludes that the number is a security key.

[00:09:22] Speaker 01:
But do you challenge that?

[00:09:23] Speaker 03:
Yes, that's why we're here.

[00:09:25] Speaker 01:
that it's a security key.

[00:09:29] Speaker 03:
Yes, we challenge that the arbitration number of Snodgrass is a security key, because it doesn't grant access to the memory in Snodgrass.

[00:09:44] Speaker 03:
And it's the same in Hertha.

[00:09:46] Speaker 03:
Hertha, they have what they call the random number.

[00:09:50] Speaker 03:
And the random number in Hertha

[00:09:52] Speaker 03:
There's nothing in HERTA about granting or denying access to memory.

[00:09:55] Speaker 03:
All it is is about authorizing a payment transaction.

[00:09:59] Speaker 03:
We don't know where that payment transaction occurs, whether it's in the memory, whether it's in something else.

[00:10:03] Speaker 03:
But it is clear.

[00:10:04] Speaker 00:
Is information in the memory of the RFID tag in HERTA, is that accessed and shared with the key transponder?

[00:10:17] Speaker 03:
At some point, it may be.

[00:10:19] Speaker 03:
HERTA doesn't really talk about memory.

[00:10:21] Speaker 03:
We don't know where the contents of the ID and the payment information is in HERTA, actually.

[00:10:28] Speaker 03:
So there's very little in HERTA that talks about the random number.

[00:10:34] Speaker 03:
It's, I think, mentioned once or twice in passing.

[00:10:37] Speaker 03:
It doesn't say what the random number does or where it's stored.

[00:10:42] Speaker 03:
And there's nothing about where ID information or payment information is stored.

[00:10:46] Speaker 03:
So we don't know if memory is involved at all

[00:10:49] Speaker 00:
If we think that the board's findings of anticipation by Snodgrass and obviousness over Slovin and Snodgrass, if we were to affirm, are there any claims remaining that would have been found invalid in view of Herta alone?

[00:11:12] Speaker 03:
I'm sorry, again, so are there any claims that only Herta applies to?

[00:11:15] Speaker 00:
Yeah, are there any claims?

[00:11:17] Speaker 00:
The board has numerous different

[00:11:19] Speaker 00:
rejections, if you will, and one of them is anticipation by HERTA of quite a number of claims, but are any of those claims not also found invalid in view of Slaven and Snodgrass or just Snodgrass alone?

[00:11:34] Speaker 03:
I'm not sure I'm answering the question, but HERTA only applies to one of the patents.

[00:11:40] Speaker 03:
Oh, okay.

[00:11:41] Speaker 03:
It's only asserted against one of the patents.

[00:11:42] Speaker 03:
I believe the 044.

[00:11:43] Speaker 03:
So whatever you find in HERTA wouldn't apply to the 568 patent.

[00:11:49] Speaker 00:
OK.

[00:11:50] Speaker 00:
Thank you.

[00:11:51] Speaker 03:
OK.

[00:11:51] Speaker 03:
And I think I'll reserve my three minutes.

[00:11:54] Speaker 03:
Thank you.

[00:11:54] Speaker 03:
I'll let you have further questions.

[00:11:57] Speaker 03:
Thank you.

[00:12:04] Speaker 02:
Good morning.

[00:12:05] Speaker 02:
I'm late.

[00:12:05] Speaker 02:
May it please the court.

[00:12:07] Speaker 02:
Judge Stoll, to your question regarding HURTA, all the claims that were found invalid under HURTA were also found separately invalid based on Snigrest and Slavin.

[00:12:18] Speaker 02:
And this simply is a narrow appeal of whether substantial evidence supports the board's decision.

[00:12:23] Speaker 02:
As my colleague acknowledged, they do not dispute the claim construction of security key.

[00:12:28] Speaker 02:
And they don't really dispute what Snoggrass and Herda references disclose.

[00:12:32] Speaker 02:
Applying the unchallenged construction, the board correctly determined that Snoggrass' arbitration number and Herda's random number are the claim security key.

[00:12:40] Speaker 02:
And you can find the board's decision on page 22

[00:12:48] Speaker 02:
22 of the board's decision, where the board explained that the access to or checking and validating the arbitration number is required for the tag to respond with memory contents.

[00:13:01] Speaker 02:
Under the plain language of this construction that's unchallenged, that is a security key.

[00:13:06] Speaker 02:
Now, what I understand theology to be arguing here is that

[00:13:10] Speaker 02:
the security key or that the arbitration number, the random number, and the sonograms are inherited don't meet a function of security key, and they also argue about the baseline.

[00:13:19] Speaker 02:
But function does not matter, as this court has made clear in Ray Shriver.

[00:13:23] Speaker 02:
In that case, there was a patent to application to a... What do you mean by function of the security key?

[00:13:29] Speaker 00:
If the function of the security key is to...

[00:13:32] Speaker 00:
Grant or deny access to memory.

[00:13:34] Speaker 02:
Actually, thank you for correcting me.

[00:13:36] Speaker 02:
The function, they're disputing the purpose.

[00:13:37] Speaker 02:
So they're disputing that the purpose of the claimed arbitration numbers and random number in HERDA must be for providing security, that's argued in the brief, versus just the function, which the board found, the function is providing access to memory.

[00:13:52] Speaker 02:
And under the board's fact finding, if the arbitration number in Snodgrass is compared with the arbitration number stored in the tag, it grants access to memory.

[00:14:00] Speaker 02:
So it meets whatever claimed function is actually there.

[00:14:03] Speaker 02:
Regardless of whether it talks about purpose, purpose does not matter.

[00:14:07] Speaker 02:
I misspoke when I mentioned function, but it's purpose.

[00:14:10] Speaker 02:
In the Schreiber reference, the claim was directed at a popcorn dispensing funnel.

[00:14:15] Speaker 02:
The court found anticipation based on an oil can funnel because even though the claim talked about a purpose for use of that structure, the structure was met by the prior art.

[00:14:26] Speaker 02:
And regarding based on, it's a claim construction dispute.

[00:14:31] Speaker 02:
The language requires to be based on.

[00:14:34] Speaker 02:
It does not require based only on.

[00:14:36] Speaker 02:
My colleague didn't agree with based only on.

[00:14:39] Speaker 02:
For good reason, they fought us on that construction in other litigation.

[00:14:43] Speaker 02:
That's referenced at footnote five of our brief.

[00:14:45] Speaker 02:
He now says based directly on, but that was never argued to the board, that there should be a base directly on construction.

[00:14:52] Speaker 02:
The board found that the matching arbitration number and matching random number in Sinai, Russ, and Herda is required as a necessary condition for memory to be granted.

[00:15:02] Speaker 02:
Under any understanding of what based on means, that meets the definition.

[00:15:07] Speaker 02:
And to my colleague's example about turning on a computer,

[00:15:11] Speaker 02:
that you wouldn't say that the access to memory is based on terminal computer.

[00:15:16] Speaker 02:
Well, you also wouldn't say that your password is no longer a security key because you have to turn on the computer.

[00:15:23] Speaker 02:
So you would still say access to your computer is based on your password, even if there are other conditions that may be required.

[00:15:29] Speaker 02:
So I think that analogy just does not work.

[00:15:33] Speaker 02:
And at the very least, the claim does not require that there be a direct only condition on what based on means.

[00:15:42] Speaker 02:
The board found that Snoggrass and Herda disclosed the claim security key, disclosed that access to memory is based on security key, relying on Neology's own emissions.

[00:15:53] Speaker 02:
This can be found at appendix 179 through 181.

[00:15:59] Speaker 02:
Neology admitted that the Snoggrass arbitration number checks and validates.

[00:16:04] Speaker 02:
At 177, Neology admitted that the matching arbitration number is a prerequisite for memory access to be provided.

[00:16:12] Speaker 02:
And Neology's expert also admitted that at appendix 858 and 860 that it is necessary for the arbitration number to match in order for the tag to respond with memory contents.

[00:16:26] Speaker 02:
And if security were required, it's not, but if security or express purpose of security were required, Neology expert admitted that Snoggrass protocol provides some level of security.

[00:16:36] Speaker 02:
and that checking and validating the arbitration number before responding is a form of security.

[00:16:41] Speaker 02:
You can find those at 856 and 861 in the appendix.

[00:16:46] Speaker 02:
Now Herda, again, is not necessary for this court to affirm the board's decision, but Neology made similar omissions regarding Herda.

[00:16:54] Speaker 02:
Neology's expert admitted at 877 in the appendix.

[00:16:57] Speaker 02:
So these claims are originally prosecuted.

[00:16:59] Speaker 01:
Snodgrass wasn't in front of the examiner.

[00:17:02] Speaker 02:
Your Honor, I do not believe that snotgrass was.

[00:17:04] Speaker 02:
I don't recall.

[00:17:06] Speaker 02:
Let me answer that.

[00:17:07] Speaker 02:
I don't recall that it was.

[00:17:08] Speaker 02:
I don't believe it was.

[00:17:13] Speaker 02:
So just to sum up, at 877 of the appendix, Neology Admitted, that heard a transaction response, which is memory contents.

[00:17:21] Speaker 02:
And then you could find that at the board's decision at appendix 81, the payment ID is

[00:17:31] Speaker 02:
from memory.

[00:17:34] Speaker 02:
Neology's expert admitted that HERDA will only send that response if the random number sent by the reader matches the random number stored by the tag.

[00:17:42] Speaker 02:
That's found in Appendix 877.

[00:17:45] Speaker 02:
And then, again, if security were required, we submit it's not.

[00:17:48] Speaker 02:
If security were required, Neology's expert admitted that HERDA encrypts that random number for purposes of security.

[00:17:54] Speaker 02:
That's found in Appendix 875.

[00:17:57] Speaker 02:
So Your Honor, we submit that this is just a narrow question of whether substantial evidence supports the board's decision.

[00:18:04] Speaker 02:
The board made fact findings.

[00:18:06] Speaker 02:
There's not a question about what the prior art discloses.

[00:18:08] Speaker 02:
There's not a question about whether the construction is correct.

[00:18:11] Speaker 02:
And based on that undisputed construction and the undisputed disclosure of the prior art, the board reached the correct decision here.

[00:18:18] Speaker 02:
And we submit that this court should affirm.

[00:18:20] Speaker 00:
Can I just ask you about the SAS issues and the non-instituted claims in Browns?

[00:18:25] Speaker 02:
Yes, Your Honor.

[00:18:26] Speaker 02:
So I agree with my colleague that SAS is not jurisdictional.

[00:18:30] Speaker 02:
And I think that the Benefit Sphere, for instance, talks about the finality of the agency decision.

[00:18:36] Speaker 02:
I think it's very clear that this agency's decision was final.

[00:18:39] Speaker 02:
And we are not asking for a remand.

[00:18:42] Speaker 02:
And I understand my colleague on the other side is not asking for a remand.

[00:18:45] Speaker 02:
So we think that issue is waived.

[00:18:48] Speaker 02:
And therefore, we would ask that the court affirm the board's decision.

[00:18:58] Speaker 00:
We have a little over three minutes in the final time.

[00:19:01] Speaker 03:
Just briefly returning to the SAS issue, I don't believe there's a waiver here.

[00:19:05] Speaker 03:
I mean, we are not asking for a remand, but I don't believe there's a waiver because there's a change of law.

[00:19:09] Speaker 03:
And I don't think you can waive a change of law.

[00:19:11] Speaker 03:
And if it is jurisdictional, you can't waive subject matter jurisdiction.

[00:19:16] Speaker 03:
But we are not asking for a remand.

[00:19:18] Speaker 01:
Assuming that we had jurisdiction, one or the other of you might have a right under SAS to request relief.

[00:19:27] Speaker 01:
I understand.

[00:19:28] Speaker 01:
Which you're not asserting.

[00:19:29] Speaker 01:
Which we're not doing.

[00:19:30] Speaker 01:
And the short of the matter is that if you didn't assert the right, you would be waiving your right to the remedy.

[00:19:37] Speaker 01:
Perhaps.

[00:19:38] Speaker 03:
I think that's what he was referring to.

[00:19:39] Speaker 03:
OK.

[00:19:39] Speaker 03:
Yeah.

[00:19:39] Speaker 03:
At this point in time, that may be true.

[00:19:43] Speaker 03:
So if I may quickly address a couple of points.

[00:19:46] Speaker 03:
I think the way to think of whether the security key is actually providing access to memory is to think of it this way.

[00:19:56] Speaker 03:
Access to memory under the patents occurs because the security key is checked and validated.

[00:20:01] Speaker 03:
Under either Snodgrass or Herda, the tag's memory is not accessed because the arbitration number or the random number is checked and validated.

[00:20:10] Speaker 03:
Under those references, the memory is not accessed because the number is checked and validated.

[00:20:16] Speaker 03:
It happens as part of a sequence.

[00:20:20] Speaker 03:
But the actual granting of access to memory

[00:20:25] Speaker 03:
The taking of contents out of the memory does not happen because that number is checked and validated.

[00:20:30] Speaker 03:
Other things happen before the memory is accessed.

[00:20:34] Speaker 03:
And then just quickly talking about purpose and function.

[00:20:37] Speaker 03:
The way we're using the two, they're the same.

[00:20:40] Speaker 03:
We're not talking about a situation like in Shriver where you have a new use of an old product.

[00:20:46] Speaker 03:
Here we're saying that the claims themselves talk about something that has to happen.

[00:20:50] Speaker 03:
the function here.

[00:20:52] Speaker 03:
There has to be a checking and validating of the key to gain access to memory.

[00:20:56] Speaker 03:
That is part of the claim language.

[00:20:58] Speaker 03:
That has to be part of what the security key does.

[00:21:01] Speaker 03:
And our contention is that neither the arbitration number in Snodgrass nor the random number in Hertha does that function.

[00:21:10] Speaker 03:
And therefore, they cannot be prior art for purposes of invalidation.

[00:21:14] Speaker 03:
Thank you.

[00:21:15] Speaker 00:
Thank you.

[00:21:16] Speaker 00:
We thank counsel, and the case is submitted.