[00:00:00] Speaker 02:
Our second case is Bill J. Coe versus Apple, 2023-2348.

[00:00:04] Speaker 02:
I think we're all set, Mr. Coe.

[00:00:07] Speaker 02:
Thank you, Your Honor.

[00:00:13] Speaker 01:
Good morning, Your Honors.

[00:00:14] Speaker 01:
May it please the Court.

[00:00:18] Speaker 01:
Bill Jaycoe raises a number of issues in this appeal related to the finding of unpatentability to challenge claims with respect to 804 patent.

[00:00:26] Speaker 01:
Many of them are issues of law.

[00:00:27] Speaker 01:
Some are issues of whether there was substantial evidence.

[00:00:30] Speaker 01:
I'd like to focus on just a few of them.

[00:00:35] Speaker 01:
And then, obviously, if you have questions, I'll have the answer.

[00:00:38] Speaker 01:
One of them relates to the claim limitation of transmitting.

[00:00:44] Speaker 01:
And this is the transmitting by the sending data processing system, the broadcast unidirectional wireless data record, for receipt by plurality of receiving mobile data processing systems.

[00:00:56] Speaker 01:
Obviously, we have disagreed with the board's disagreement with our claim construction that the transmitting must be directly from one mobile unit to another mobile unit.

[00:01:08] Speaker 01:
With respect to the claim construction part of it, we'll just rely on our briefs on that point, unless you have some further questions related to it.

[00:01:16] Speaker 01:
However, the reason I'm doing that is because the board, as an alternative argument, said that even under Bill Draco's proposed construction, they found that Himmelstein's PicoNet, in particular the concept of a master transmitting

[00:01:34] Speaker 01:
data directly to a slave, that that met the transmitting directly limitation.

[00:01:42] Speaker 01:
In particular, that's in the final written decision at page 12, which is also appendix 12.

[00:01:50] Speaker 01:
The problem with that conclusion in our estimation is that there's no actual evidence about transmitting from a master to a slave.

[00:02:02] Speaker 03:
What procedurally what happened is... Well, Counselor, the record, the intrinsic record, does not preclude the use of an intermediary system in this process.

[00:02:15] Speaker 03:
Is that right?

[00:02:16] Speaker 03:
I'm sorry?

[00:02:16] Speaker 03:
It doesn't preclude an intermediary

[00:02:20] Speaker 01:
Oh, I would disagree with that.

[00:02:21] Speaker 03:
Yes, I know you would.

[00:02:22] Speaker 01:
Yes.

[00:02:23] Speaker 01:
Under our proposed claim construction, an intermediary is precluded under the meaning of the claim term.

[00:02:30] Speaker 03:
In the intrinsic record.

[00:02:32] Speaker 03:
In the intrinsic record.

[00:02:33] Speaker 03:
Show me where.

[00:02:34] Speaker 01:
Well, first of all, within the claim itself, which states that the transmitting by the sending data processing system of a broadcast unidirectional system is to be received by the mobile data processing system.

[00:02:48] Speaker 01:
So what the claim actually says is, I send it, it gets received by the mobile data processing system.

[00:02:55] Speaker 05:
If you refer to the patent itself... And you think the patent implies no intermediate hop?

[00:03:01] Speaker 01:
In the context of the specification, yes I do.

[00:03:06] Speaker 01:
In the context of the specification and the drawings, the entire purpose of the patent is this location-based exchange of information where it talks about peer-to-peer communications.

[00:03:19] Speaker 01:
There is a figure, it looks like a pentagon, and it shows the different mobile devices, and it shows the different communication paths that are possible.

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And in each of them,

[00:03:30] Speaker 01:
It's described also in the specification of the number of nodes that are allowed to transmit.

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So from, if you have five, one can transmit to one directly, two directly, three directly, four directly, and then each one of them can do the same thing.

[00:03:43] Speaker 01:
There's no discussion in the specification where the transmission goes from one to another and then to a third.

[00:03:51] Speaker 01:
as being that transmission to the third receiving unit.

[00:03:56] Speaker 01:
And like I said, the overall thrust of the patent is this peer-to-peer communication where you take out a centralized server.

[00:04:07] Speaker 01:
What's discussed is that the centralized server creates problems with bottlenecks, it causes security concerns and the like.

[00:04:13] Speaker 01:
So rather than do that, we push out the functionality to the mobile units to allow them to

[00:04:21] Speaker 01:
to communicate directly.

[00:04:25] Speaker 01:
But back to my earlier point, the fact that the board relied on Himmelstein's master-to-slave embodiment, purported embodiment, there's a number of problems with that.

[00:04:39] Speaker 05:
I'm sorry, just remind me, is that the same as or different from the reference to the pecan hat?

[00:04:45] Speaker 01:
It is the same.

[00:04:46] Speaker 01:
Yes.

[00:04:46] Speaker 01:
Yes.

[00:04:47] Speaker 01:
Yes.

[00:04:48] Speaker 01:
There is a reference in Himmelstein to a PicoNet.

[00:04:51] Speaker 01:
And in the Pico... All it says is that you could use a PicoNet and that the mobile devices can communicate.

[00:04:58] Speaker 01:
What we submitted from our... But isn't that enough?

[00:05:02] Speaker 01:
No it is not.

[00:05:03] Speaker 05:
Why?

[00:05:04] Speaker 01:
So what we submitted was evidence from our expert that said in a PicoNet you have a

[00:05:10] Speaker 01:
you have a master which acts as basically a hub for communications.

[00:05:15] Speaker 01:
And so if mobile unit one wants to talk to mobile unit two, it sends data to the master who then assigns a time to send it and will send it.

[00:05:29] Speaker 01:
So it is not unidirectional.

[00:05:31] Speaker 01:
You have a stop along the way.

[00:05:34] Speaker 01:
What Apple did in response to that expert's opinion was to say, no, no, you've discounted the possibility that the master could be the sending unit.

[00:05:47] Speaker 01:
The problem with that is that there's no evidence in the record

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from any expert, from any of the prior art, from Himmelstein, of that situation where the master communicates directly to the mobile unit.

[00:06:05] Speaker 01:
And so this absence of evidence certainly doesn't meet substantial evidence.

[00:06:11] Speaker 01:
And the only thing that the board relied on for that was the argument from counsel, from Apple in their briefing, and as everyone knows,

[00:06:21] Speaker 01:
attorney arguments not evidence.

[00:06:23] Speaker 05:
Did Apple's expert also say it?

[00:06:25] Speaker 01:
No.

[00:06:26] Speaker 01:
No, he did not.

[00:06:29] Speaker 01:
He did not.

[00:06:33] Speaker 01:
Interestingly, in the red brief, it's page 33 of the red brief, in the flip note,

[00:06:51] Speaker 01:
And this is, of course, Apple's brief.

[00:06:53] Speaker 01:
They state, Himmelstein does not refer to master and slave devices.

[00:06:59] Speaker 01:
Well, that in and of itself is admission that it's not in the reference upon which they rely.

[00:07:04] Speaker 01:
And of course, they did not submit any declaration by any expert to support this master and slave

[00:07:11] Speaker 01:
embodiment, purported embodiment, and thus there is no substantial evidence to support the basis upon which the board found this limitation to be met.

[00:07:23] Speaker 03:
You want to show me where in the record are intermediaries precluded?

[00:07:30] Speaker 01:
Sure.

[00:07:32] Speaker 01:
Referring to the patent itself, if you turn to the background of the invention,

[00:07:39] Speaker 01:
And I will... Admittedly, this patent is quite long.

[00:07:47] Speaker 01:
The returns are very... This is APPX.

[00:07:59] Speaker 01:
Basically, it's starting at APPX 1917.

[00:08:02] Speaker 03:
Give us the page.

[00:08:05] Speaker 01:
Oh, I'm sorry.

[00:08:06] Speaker 01:
It is page 77.

[00:08:11] Speaker 01:
of exhibit I'm sorry I have the APPX page at 1917.

[00:08:17] Speaker 01:
Is that the page you were asking for?

[00:08:25] Speaker 05:
I'm sorry.

[00:08:28] Speaker 01:
I'm sorry it's the 804 pattern.

[00:08:33] Speaker 01:
My apologies.

[00:08:40] Speaker 03:
Appendix 79.

[00:08:44] Speaker 01:
Yeah, that's my fault.

[00:08:49] Speaker 01:
So if we look at the brief summary of the invention and the background of the invention, and this is an APPX 108109 and the following pages, it talks generally about how location-based services were the norm and those

[00:09:09] Speaker 01:
Services relied on a central server to kind of direct and consolidate all the transmittal of information from mobile devices.

[00:09:19] Speaker 01:
And then in a brief summary of the invention, it talks about, and this is on APPX 109, it talks about the disadvantages to such a system.

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And then, and I'm referring to column four, lines 24, approximately.

[00:09:36] Speaker 01:
24?

[00:09:38] Speaker 01:
Column four, line 24?

[00:09:46] Speaker 03:
And you claim that that teaches that intermediaries are precluded?

[00:09:56] Speaker 01:
It teaches not to use a centralized server, which would be the intermediary.

[00:10:00] Speaker 03:
That's not what I asked, sir.

[00:10:03] Speaker 03:
I asked you, is there any place in the record that demonstrates that intermediaries are precluded?

[00:10:12] Speaker 01:
What it demonstrates that intermediaries are not

[00:10:14] Speaker 01:
Included in the definition of sure actually they may be they may be included, but they're not precluded No, they an intermediate cannot be included with a scope of claim Because under the under the claim words themselves it says it's a unit or not all transmissions have to be peer-to-peer That's correct.

[00:10:38] Speaker 01:
That's correct within the path.

[00:10:39] Speaker 01:
They do in the path.

[00:10:41] Speaker 01:
They do have to be paired here and

[00:10:43] Speaker 02:
Counsel, do you want to save five minutes?

[00:10:45] Speaker 02:
You can continue or save what you want.

[00:10:50] Speaker 01:
The other point I wanted to raise, because I guess I'm limited on my rebuttal to what they talk about.

[00:10:55] Speaker 01:
So the other thing I want to talk very quickly, unless you have some other questions pertaining to this, is the secondary considerations that were at issue before the board and that weren't given any weight.

[00:11:07] Speaker 01:
In particular, the copying and the licenses.

[00:11:10] Speaker 01:
In what the board, there's no dispute that Apple was sent the portfolio for consideration to be purchased or licensed or whatever it might be.

[00:11:21] Speaker 01:
And this is based on an existing relationship that Bill Johnson, the inventor of the patents, had with Apple.

[00:11:29] Speaker 01:
They had previously sold to Apple like portfolio patents.

[00:11:32] Speaker 01:
So with this new portfolio, he reached out to see if they were interested.

[00:11:39] Speaker 01:
What the board then cited was Liquid v. L'Oreal 941 F1133 and said that under Liquid we needed to show that there had been proof of a change in their approach to their technology.

[00:11:59] Speaker 01:
And while Liquid does give that as an example of copying, L'Oreal is not

[00:12:07] Speaker 01:
limited to that kind of situation.

[00:12:10] Speaker 01:
In fact, in the liquid case, they cite Institut Pasteur at 738, F1337, in particular page 1347, where the access and the proven similarities between the patented invention and the accused product can demonstrate copying.

[00:12:32] Speaker 01:
and what we submitted was a claim chart by our expert which showed the matching of the claims to the accused product which was under butted by their expert so the only evidence that you have with respect to that particular question is our under butted evidence that it is covered.

[00:12:55] Speaker 01:
Secondly,

[00:12:57] Speaker 01:
there are numerous licenses and understand there's lots of people in the courtroom I'm not going to go into any confidential information but there are multiple licenses with some very large companies and what the board argued was the licenses include many many patents and therefore you can't identify which one is connected to.

[00:13:21] Speaker 02:
Over 30.

[00:13:23] Speaker 01:
Correct.

[00:13:23] Speaker 01:
But you have to keep in mind that the

[00:13:27] Speaker 01:
How we got to that license was there was a litigation involving what became the eventual licensee, which only involved three patents.

[00:13:35] Speaker 01:
And one of those three patents was the 804 patent.

[00:13:38] Speaker 01:
So it is very easy to draw that connection between what was the actual impetus for the license.

[00:13:44] Speaker 01:
And I'll reserve my minute 30 left, I guess.

[00:13:46] Speaker 02:
And we'll save it for you.

[00:13:48] Speaker 02:
Mr. Davis.

[00:14:02] Speaker 00:
Good morning, Your Honors.

[00:14:03] Speaker 00:
May it please the Court?

[00:14:07] Speaker 00:
Each of Bill Jaco's arguments that they've raised here today fails for multiple, independent reasons.

[00:14:13] Speaker 00:
With respect to flame construction,

[00:14:15] Speaker 00:
Your honor is correct.

[00:14:17] Speaker 00:
There is no support in the record that would preclude the use of intermediaries that would support Bill J. Coe's construction.

[00:14:27] Speaker 00:
In fact, in that very column, they were signed into column four of the 804 patent.

[00:14:33] Speaker 00:
This is Appendix 109, and specifically

[00:14:38] Speaker 00:
Line 55 extending onto column 5, line 10, it talks about indirectly located mobile data processing systems.

[00:14:48] Speaker 00:
Later on in the specification, it then goes on to describe those indirectly located mobile data processing systems.

[00:14:55] Speaker 00:
This is at appendix 136, column 57, lines 25 to 37.

[00:15:02] Speaker 00:
And there it's expressly reciting and describing the concept of a peer-to-peer network where there is communication, this is a quote, through a plurality of MSs, i.e.

[00:15:13] Speaker 00:
a plurality of hops.

[00:15:15] Speaker 00:
So directly addressing and discussing communications through intermediaries, both in the summary of the invention as well as in the detailed description.

[00:15:29] Speaker 03:
So what's the effect of that outcome you're talking about on the decision on motivation to combine?

[00:15:38] Speaker 03:
What does that do to Heimelstein?

[00:15:41] Speaker 00:
I think on with respect to motivation to combine that the board's determination is completely supported for two different reasons, both that the mirror reference teaches periodic beginning and the board found based off of Mears teachings that that would save power, as well as Dr. Long's testimony supporting that, that there had been a motivation, also that this was a known technique being applied in a

[00:16:11] Speaker 00:
in a known device yielding a predictable result, both independent bases to affirm that, but with respect to the transmitting limitation as well, Your Honor, there is

[00:16:24] Speaker 00:
Because the board's construction was correct, there's no dispute that the transmitting limitation is met under the board's construction.

[00:16:34] Speaker 00:
So this court doesn't even need to reach that.

[00:16:36] Speaker 00:
However, substantial evidence does also support the board's findings that that limitation is met also under Bill J. Coe's construction.

[00:16:45] Speaker 00:
With respect to that PicoNet disclosure,

[00:16:48] Speaker 00:
It expressly teaches, this is at appendix 1773, column 7, lines 48 to 52, that mobile units can talk directly to other mobile units.

[00:16:58] Speaker 00:
That direct language that they want to read into the claims is expressly taught in the Himmelstein reference, providing substantial evidence supporting that finding.

[00:17:09] Speaker 00:
Unless there's any further questions on the transmitting construction or the substantial evidence supporting those findings, I'll turn to the issue of secondary considerations.

[00:17:18] Speaker 00:
With respect to secondary considerations, the board properly found that Bill J. Coe not only failed to show nexus, but also failed to show any actual evidence of non-obviousness.

[00:17:30] Speaker 00:
Two of their arguments were raised today, copying and licensing.

[00:17:36] Speaker 03:
What's your response to, even though there were 30 patents that were

[00:17:42] Speaker 03:
that were mentioned, that three of them, they were able to establish nexus with three of the patents, with three of the licenses.

[00:17:53] Speaker 00:
You're right.

[00:17:54] Speaker 00:
There's 30 patents.

[00:17:55] Speaker 00:
They failed to show a nexus to any one of them, let alone that any of those licenses was taken because it valued any of the individual patents, as opposed to wanting to avoid litigation.

[00:18:10] Speaker 00:
So as the board correctly pointed out, there was simply no nexus shown back to the 804 patent.

[00:18:19] Speaker 05:
When I understood Mr.

[00:18:21] Speaker 05:
quote to say was that there were 30 patents covered by the license, but the license followed litigation on just three of them, of which this is one.

[00:18:33] Speaker 05:
So we can put aside the number 30 and focus just on three.

[00:18:37] Speaker 05:
And now we're talking about getting close to a connection.

[00:18:41] Speaker 00:
Your Honor, I believe it runs into the second of those two problems.

[00:18:48] Speaker 00:
If those three patents were being litigated, this is more of a sign that the parties are trying to avoid litigation than it is to place any particular value on the 804 patent.

[00:18:59] Speaker 05:
But as I think you know, the subject of the role of litigation in arriving at a license

[00:19:05] Speaker 05:
doesn't have a particularly clear-cut resolution because the only thing a patent is is a right to go to court to exclude.

[00:19:17] Speaker 05:
So the fact that somebody has gone down the path of

[00:19:21] Speaker 05:
actually saying, I'm serious about this.

[00:19:23] Speaker 05:
I'm going to try to exclude you, doesn't seem to distinguish the world of settlements of litigation from pre-litigation settlements in a terribly strong way.

[00:19:38] Speaker 05:
So what else do you have?

[00:19:41] Speaker 00:
Your Honor, in addition to this, and this is I think they also need to still show a nexus

[00:19:48] Speaker 00:
back to, these are ultimately commercial success arguments.

[00:19:52] Speaker 00:
They still need to show that there was some sort of commercial success as well, some nexus back to the patent.

[00:19:59] Speaker 00:
They raise the argument that they show that the iBeacon functionality of Apple infringed.

[00:20:07] Speaker 00:
Here, they included a claim chart.

[00:20:10] Speaker 00:
This is at appendix 4480 to 4482.

[00:20:13] Speaker 00:
There were 15 limitations in the

[00:20:18] Speaker 00:
chart a full claim, let alone provide evidence or analysis explaining how even those two limitations were met.

[00:20:26] Speaker 00:
They largely just included screenshots.

[00:20:31] Speaker 00:
With respect to copying around, I think that same analysis applies.

[00:20:35] Speaker 00:
They don't show a nexus

[00:20:37] Speaker 00:
back to?

[00:20:38] Speaker 05:
We didn't get into, Mr. Quote didn't get very far into copying, but I think he said that his client communicated to, if not with, apples.

[00:20:49] Speaker 05:
Is there evidence of apples reading the communication and responding or not?

[00:20:56] Speaker 00:
Yeah, I think there was some prior correspondence back and forth.

[00:21:00] Speaker 00:
There is no evidence of Apple doing anything with, and I think what was identified in that communications was the grandparent application, not even the application that is suited as the 804 patent itself.

[00:21:16] Speaker 00:
But there's no evidence

[00:21:19] Speaker 00:
such as what would be required under Wires versus Master Lock or Liquid versus L'Oreal of Apple doing anything with that.

[00:21:26] Speaker 00:
No evidence of change in product or even consideration of this application, which was the grandparent in designing iBeacon or making any changes to iBeacon, Your Honor.

[00:21:40] Speaker 00:
I think the board's findings there are both that there was a lack of nexus as well as no evidence of

[00:21:47] Speaker 00:
of any indicia of non-obviousness or supported by substantial evidence incorrect under this court's precedent.

[00:21:54] Speaker 00:
Unless there's any further questions, we would ask that the board's determinations here be affirmed.

[00:21:59] Speaker 02:
Thank you, counsel.

[00:22:01] Speaker 02:
Mr. Kuo has about a minute and a half of rebuttal time.

[00:22:12] Speaker 01:
Thank you, your honor.

[00:22:14] Speaker 01:
With regards to the copying question that was just asked,

[00:22:18] Speaker 01:
There is evidence that we communicated, that Bill Jekyll communicated with Apple and that Apple received it.

[00:22:23] Speaker 01:
The question of whether they did anything with it, that's evidence that would be solely within Apple's control and because of the limited discovery nature of the Interparties Review as opposed to digital court litigation,

[00:22:36] Speaker 01:
we don't have access to that kind of thing.

[00:22:38] Speaker 01:
It would seem incumbent upon Apple if they were to say, no, we designed this separate and apart from you, that they could actually proffer evidence to that effect rather than us fighting against an empty chair where we just don't have access to that kind of information.

[00:22:52] Speaker 03:
So I understand those are period discussion and extended period discussion with Apple, correct?

[00:22:56] Speaker 03:
Correct.

[00:22:58] Speaker 03:
This may not apply to this case, but I'd like to hear your view.

[00:23:03] Speaker 03:
To what extent should we consider

[00:23:06] Speaker 03:
this period of time where there's consideration of a partnership or a joint venture or the purchase or the licensing of a particular patent, and then finally, you know, the decision.

[00:23:21] Speaker 03:
I think it's, and why is that under, why do we consider that under evidence of copying?

[00:23:27] Speaker 01:
I think it's because it's not, well, circumstantial evidence falls into that category.

[00:23:32] Speaker 01:
I think it's not just the extent of time that there were negotiations, but there was this time of negotiation where they were given the information and then at some point they said, no, we don't want it.

[00:23:44] Speaker 01:
But then very shortly thereafter, all of a sudden they come out with the accused product.

[00:23:49] Speaker 01:
circumstantial evidence is that seems a little fishy.

[00:23:53] Speaker 01:
And if they had evidence that no, we developed it all on our own, they certainly could have provided that in rebuttal to our arguments.

[00:24:03] Speaker 01:
I see I'm out of time.

[00:24:04] Speaker 01:
But if you'll allow me, I just wanted one further comment about the intermediary question, unless you're good with it.

[00:24:13] Speaker 02:
Thank you, counsel.

[00:24:14] Speaker 02:
The case is submitted.

[00:24:15] Speaker 02:
Thank you.