[00:00:00] Speaker 03:
Next argument today is in document number 22-1568 in Ray Dang.

[00:00:07] Speaker 03:
Mr. Gardy, whenever you're ready.

[00:00:11] Speaker 01:
Your honor, this may please the court.

[00:00:15] Speaker 01:
The issues before us today involve some significant broad aspects of obviousness in law as applied to advanced materials.

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So these issues from the applicant's perspective impact not just this case, but we're seeing these issues repeatedly in the patent office.

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And one significant objective of the applicant is to get these issues clarified so that our

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dealings with the Patent Office we think will be on a fairer and reasonable grounds for proceeding.

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Just this last Friday, a colleague and I filed a reply brief in another case for this applicant to the PTAB involving virtually identical legal issues.

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So, three overarching legal issues here are

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the standard for motivation to combine, whether or not the teachings of the cited references provide a reasonable expectation of success, and thirdly, on the application of inherency in meeting the claim limitations.

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And maybe I'll start with the inherency because this is

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a significant issue in terms of how the PTO has been applying this.

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And here the technology is lithium ion batteries.

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And admittedly the technology is very complex.

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This patent application is directed toward silicon suboxide, a new

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material being applied for the negative electrode or anode for rechargeable batteries.

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So the claims include a feature related to the cycling properties of the battery, which is an important characteristic.

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For our rechargeable batteries, for them to have value, they need to recharge a reasonable number of times.

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So each cycle

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corresponds to a discharge and recharge cycle of the battery.

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For testing purposes, it's performed using what we could call accelerated wear testing, you know, with an orderly procedure.

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Of course, in use, discharge and charging is

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more sporadic by the user, but for testing purposes, you discharge and recharge at certain rates and look at the degradation of the battery capacity over time.

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So under Inherency, the law was anchored in anticipation and very reasonable.

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You know, and Ray Bass describes, you know, the circumstances where you discover, you know, some new property of something that's known and you shouldn't be able to get patent claim for just understanding something more about something that's old.

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So then when you apply this in obviousness, it becomes pretty much right away murkier because you're combining

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different references with different teachings.

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So under those circumstances, this court has, you know, in salt wire explained that, you know, for inherency to apply in the context of obviousness, the property still needs to necessarily follow.

[00:04:40] Speaker 01:
So

[00:04:42] Speaker 03:
Isn't it true, though, in the patent office examination context?

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Yes.

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And that's what we're talking about for Best and Southfire, that this court created a rule that there's going to be burden shifting.

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When all of the elements in the claim are taught in reference, or would have been obvious to put together based on what's in the art, then any

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functional limitations or property limitations that are additionally cited in the claim are presumed to be due to all the different elements that reside in the claim that have been found to be obvious and then that puts the burden on the applicant, again we're just talking about the PTO context, to come forward with some information to explain why it's not necessarily so that the functional limitation is

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just a natural result of the recited structural elements in the claim.

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That's my understanding of what VEST and Southwire are getting at.

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It's a burden shifting, the PTO, they don't have laboratories where they can run tests and things like that.

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The applicants, however, can always

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submit a declaration maybe by the inventor or by an expert that would simply rebut the prima facie case here and saying no these discharge capacity characteristics recited in these claims are not a result of all these different limitations about the negative electrode

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In fact, there's many other things that contribute to this particular characteristic that I'm claiming, that I'm including in the claim.

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So, in that sense, that's how the burden shifting program works under VEST and Southwire.

[00:06:43] Speaker 03:
What is wrong with my understanding of the law?

[00:06:47] Speaker 01:
The basic outline that you described is fine.

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The problem is, in this case,

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you know, the examiner and the board will say, you know, show us that the battery of Nakanishi, Miyagi, and Pli does not work.

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So I'll ask the examiner, and you know, what battery are you talking about?

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In some sense, if perhaps if the motivation to combine and the reasonable expectation of success were there,

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then I would know what bad read that is.

[00:07:27] Speaker 01:
The problem is Miyagi is 230 pages, mostly irrelevant teachings.

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But the focus, the focal point of the inquiry is once you accept that there is a motivation to combine with a reasonable expectation of success of these three references, Nakanishi, Miyagi, and Plei,

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What you would end up with is a lithium ion battery that has all of the structural elements that you've recited in your claim.

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That's the battery that you focus on.

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And then the next question is, OK, is there some problem?

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Is there some scientific problem that it's wrong to simply presume that the discharge capacity characteristics that are likewise recited in the claim don't naturally flow from that ion battery?

[00:08:20] Speaker 01:
Well, we've already presented examples showing that it works, right?

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So they're in essence saying, show it doesn't work.

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So, you know, part of the question is, have we put enough features in the claim?

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And maybe that's unclear in this case.

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If there were motivation to combine, which we don't think is even close,

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And if there were a reasonable expectation of success, which we think is clearly not there, you know, I view in my work in the patent office, I don't view the examiners and adversary.

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I view that we're together searching for the truth.

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You know, I do a lot of work on complex materials.

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It is very complicated.

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I'm sympathetic to them.

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In this case in particular, there's very little prior art because

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Very few people in the world can cycle these materials at all.

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It's a difficult issue.

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So I want to work with them to arrive at something that I think is fair and reasonable but will provide the protection my client needs to conduct their business.

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So in that context, I need a reasonable framework for those discussions.

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And in this case, Miyagi clearly is not relevant.

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So I'm happy to have the conversation.

[00:09:52] Speaker 02:
So is your argument and your objection really about inherency?

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I thought you just basically agreed that the framework for inherency is OK.

[00:10:02] Speaker 02:
It sounds like your argument is with the motivation to combine and use Miyagi.

[00:10:08] Speaker 02:
But you started off on inherency.

[00:10:12] Speaker 01:
Because the PTO is using inherency to avoid considering the reasonable expectation of success.

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They say it's clearly successful because, well, you got it to work.

[00:10:26] Speaker 01:
Therefore, we find the pieces, we put them together.

[00:10:29] Speaker 01:
There's a reasonable expectation.

[00:10:32] Speaker 02:
Do you have an argument that these pieces aren't present in these three pieces of art?

[00:10:39] Speaker 01:
The pieces are there, but KSR said the pieces are almost always there.

[00:10:43] Speaker 02:
Right?

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It's not a matter of finding the pieces.

[00:10:46] Speaker 02:
So what's your argument then?

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If the pieces are there and you can't prove that the pieces don't produce the result you have because it's inherent, then is your argument really about motivation to combine?

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And why didn't you start there?

[00:11:05] Speaker 01:
Because we're constantly seeing inherency being used.

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as a reason to not consider a reasonable expectation of success.

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We don't think inherency should be used at all in these cases, to be honest.

[00:11:18] Speaker 01:
They're not relevant.

[00:11:19] Speaker 01:
You know, you're putting together five pieces pulled out of references.

[00:11:26] Speaker 02:
Well, I mean, I don't think that's the law, is it?

[00:11:28] Speaker 02:
I mean, I know you don't, a lot of people would not like us to allow inherency and obviousness determinations, but we do.

[00:11:38] Speaker 01:
I don't mind it at all, and I think it's not needed because if there's a reasonable expectation of success when you're combining three or four references, pulling out different pieces, if there's a reasonable expectation of success, I think inherently follows, right?

[00:11:54] Speaker 01:
Because your own examples prove that it works.

[00:11:57] Speaker 01:
The real issue then should be requiring a finding of a reasonable expectation of success.

[00:12:04] Speaker 03:
Did the board make a reasonable expectation of success finding here?

[00:12:08] Speaker 01:
They did, but it was very perfunctory.

[00:12:10] Speaker 01:
They say all the pieces are there, but then there was no motivation to combine.

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What is the piece that you're bothered by in particular?

[00:12:23] Speaker 03:
There's no reasonable expectation of success for having a negative electrode thickness of 25 microns.

[00:12:36] Speaker 03:
Based on Miyagi's teaching that there's a certain range of thickness for a negative electrode that you would want, which encompasses 25 microns.

[00:12:46] Speaker 01:
Miyagi is mostly focused on carbon electrodes, graphite electrodes.

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Graphite is an electrical conductor.

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So the ranges of electrode thickness there are not directly relevant, without more, for silicon suboxide, which is an electrical insulator.

[00:13:08] Speaker 02:
Well, that sounds like an entirely different argument altogether.

[00:13:11] Speaker 02:
I mean, it sounds like you're arguing Miyagi isn't even relevant or an aerosol

[00:13:17] Speaker 01:
Correct.

[00:13:19] Speaker 01:
I mean, I guess that's the fundamental issue.

[00:13:21] Speaker 02:
But that's not why you argued to us.

[00:13:23] Speaker 01:
Pardon me?

[00:13:24] Speaker 02:
Go ahead.

[00:13:26] Speaker 01:
I apologize if it was confusing.

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But the issue is you shouldn't get to inherency if there's not a reasonable expectation of success and a motivation to combine.

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So I think you're right that inherency is applicable

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but only when those other circumstances are met.

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So normally you shouldn't even reach that because it's clearly inherent once you have reasonable expectations.

[00:14:01] Speaker 01:
So that's the real shortcoming here.

[00:14:03] Speaker 01:
I'm already into my rest of my time.

[00:14:08] Speaker 03:
Okay.

[00:14:08] Speaker 03:
Well, we'll save your remaining time.

[00:14:12] Speaker 03:
Okay.

[00:14:13] Speaker 01:
Thank you.

[00:14:16] Speaker 03:
All right.

[00:14:17] Speaker 03:
Let's hear from the PTO, Dr. Kasdan.

[00:14:21] Speaker 00:
Sure.

[00:14:24] Speaker 00:
May it please the court.

[00:14:26] Speaker 00:
I want to just talk about the motivation to combine, which I think is the important thing here.

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The claimed battery is very similar to Nakanishi.

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The only thing is Nakanishi doesn't tell you a thickness.

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So if you're going to make the Nakanishi battery, you're going to have to figure out what thickness to use.

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Miyagi says thickness is important.

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That's already a result-effective variable.

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So now all we have is the claimed recite at least about 25 microns, a very broad range.

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And if you're making Nakanishi, you know you need to experiment with the thickness because Nakanishi doesn't tell you a thickness.

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So Miyagi suggests you should experiment with it, and it even suggests thicknesses within the claimed range.

[00:15:05] Speaker 00:
That, I think, should be enough for the motivation to combine, because it's not a case where we're trying to not use the Nakanishi thickness that's there, and we're saying you would have modified it based on Miyagi.

[00:15:16] Speaker 00:
Nakanishi leaves that open.

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You have to figure that out.

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So I think that's sort of a simple motivation.

[00:15:21] Speaker 03:
The opposing council says Miyagi's negative electrode is made out of different material than the material that the primary reference is negative electrode.

[00:15:32] Speaker 00:
So again, I would think that would be a better argument if Nakanishi had a different thickness.

[00:15:36] Speaker 00:
And your question is, would you look to Miyagi to change Nakanishi's thickness?

[00:15:40] Speaker 00:
But Nakanishi doesn't give you a thickness.

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So you're going to need to experiment.

[00:15:43] Speaker 00:
Miyagi is just telling you that thickness matters, and these are some of the important thicknesses.

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And given the breadth of the claim range, at least about 25 microns,

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and there's no teaching away, they note the plea as a smaller one, but they're not claiming it's a teaching away, then you're gonna have to experiment.

[00:15:59] Speaker 00:
And that's what Miyagi tells you to experiment, and it even tells you some of the thicknesses where you might land in the claimed range.

[00:16:04] Speaker 00:
So I think that's, given how close the prior art is, I think that's enough.

[00:16:08] Speaker 00:
The other question was inherency, but I think in the end, we came out that the inherency isn't really what's at issue here.

[00:16:13] Speaker 00:
And if it would have been obvious to combine, if there would have been motivation to combine with a reasonable expectation of success, then the inherencies

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the Inherency Law that this Court has been applying is correctly applied here.

[00:16:25] Speaker 00:
So I'm not sure that's even relevant.

[00:16:28] Speaker 03:
In Ray Best and Southwire, were either of those a 103 or were they both 102s?

[00:16:35] Speaker 00:
Southwire is a 103.

[00:16:37] Speaker 00:
So it even has... So you had to combine the teachings of... Summers and view of Dow.

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was Southwire.

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And the court said that that was enough to set the inherency.

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So I think that was 103.

[00:16:53] Speaker 00:
So I think that's on point.

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And in fact, Southwire also had, it doesn't matter if it's inherency under 102 or prima facie obviousness under 103.

[00:17:03] Speaker 00:
So I think Southwire is pretty explicit that inherency applies in these kinds of obviousness cases.

[00:17:10] Speaker 03:
Was the reasonable expectation of success analysis by the board perfunctory?

[00:17:16] Speaker 00:
I didn't think so.

[00:17:17] Speaker 00:
I mean, I think what KSR teaches us is the problem you need that will render something obvious doesn't have to be the problem that the patentee sets out.

[00:17:28] Speaker 00:
So it may be, they're saying you wouldn't know you'd have exactly these cycling parameters, but that's not the test under KSR.

[00:17:35] Speaker 00:
Under KSR, it would have been obvious to combine them for any reason.

[00:17:38] Speaker 00:
then it's obvious.

[00:17:40] Speaker 00:
And that, they've never argued that we wouldn't expect some amount of success in that.

[00:17:44] Speaker 00:
They're saying you wouldn't expect maybe the amount of success they're claiming, but they haven't argued unexpected results, which is why the board never addressed that.

[00:17:52] Speaker 00:
So it's just under KSR, the question is, is there any motivation to combine the structural limitations as they did?

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And the answer is yes.

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The functional limitations, we assume, are inherent because we have the PDOizer on our node.

[00:18:05] Speaker 00:
It can't run the test.

[00:18:06] Speaker 00:
So we just have to assume that if you meet the structural limitations, you get the functional limitations.

[00:18:11] Speaker 00:
And so that's why it would have been obvious.

[00:18:13] Speaker 00:
I don't know if this court has any further questions.

[00:18:16] Speaker 00:
If not, I'm happy to cede my time.

[00:18:18] Speaker 03:
OK, thank you.

[00:18:19] Speaker 03:
Dardie, you still have a minute.

[00:18:24] Speaker 01:
OK, I'd like to go back to the motivation of combined issue.

[00:18:29] Speaker 01:
So Miyagi is a reference directed toward electrolytes.

[00:18:36] Speaker 01:
And it's not really directed toward the structure of the electrodes, especially for silicon-based materials.

[00:18:48] Speaker 01:
There's thousands of battery references.

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So a person of ordinary skill in the art

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should not be clairvoyant and say there's some relevance here.

[00:19:02] Speaker 01:
I mean, so when you say that Nakanishi doesn't teach the electro thickness, that's because generally when you're trying to optimize just the performance to see if it'll work at all in the cycle,

[00:19:19] Speaker 01:
You make a very thin electrode because, and you make it more dilute concentrations of the active materials so that it won't fail quickly.

[00:19:30] Speaker 01:
So if you're trying to cycle it, you test one parameter by not challenging all the other parameters.

[00:19:39] Speaker 01:
When you make the electrode thicker.

[00:19:41] Speaker 01:
You know, you have these materials that are expanding several times their size and shrinking again.

[00:19:46] Speaker 01:
The thicker you make the electrode, the much more likely it is that it will destroy the electrode.

[00:19:51] Speaker 01:
It'll delaminate from the current collector.

[00:19:55] Speaker 01:
The impedance will be too high because you're moving ions and electrons.

[00:20:01] Speaker 01:
So it's a very complex integrated

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system that's not just, you know, looking, you're not, you know, building a house.

[00:20:13] Speaker 01:
You're, these things are active in there.

[00:20:16] Speaker 01:
They're, you're pulling lithium atoms in and out of a lattice.

[00:20:22] Speaker 01:
You're moving electrons through the system.

[00:20:24] Speaker 03:
Mr. Dougherty, I appreciate all of this.

[00:20:27] Speaker 03:
But I mean, this is a fact finding.

[00:20:29] Speaker 03:
This is a pure fact finding.

[00:20:30] Speaker 03:
And it's very hard without declaration evidence for this court to review fact findings like that and overturn them, so long as we can say they're supported by substantial evidence.

[00:20:45] Speaker 01:
I understand.

[00:20:45] Speaker 01:
But I think the legal shortcomings are what stand out here, because there was no motivation to combine.

[00:20:52] Speaker 01:
And there was no reasonable expectation of success.

[00:20:56] Speaker 03:
OK.

[00:20:56] Speaker 03:
Thank you very much.

[00:20:57] Speaker 03:
We have the argument.

[00:20:58] Speaker 03:
The case is submitted.