[00:00:00] Speaker 04:
All right, now back to our first case this morning is 24-2445 Amstead Rail Company v. Squires. Mr. Miller, whenever you're ready.

[00:00:12] Speaker 03:
Thank you. I'll reserve three minutes.

[00:00:25] Speaker 04:
For rebuttal, sure.

[00:00:26] Speaker 03:
Thank you.

[00:00:26] Speaker 04:
Please proceed.

[00:00:28] Speaker 03:
Thank you. May it please the court.

[00:00:30] Speaker 03:
This case is a consolidated case involving two IPRs before the patent trial on the appeal board. I would like to start by addressing some issues in relation to the 673 patent, which is the underlying 539 case.

[00:00:43] Speaker 02:
Can I just ask you before you dive into it, there's at least, I think by my count, at least 10 issues here. I assume you'll focus on the stronger ones, but just give me a preview. What are the strongest issues among the ones that you briefed?

[00:00:58] Speaker 03:
Sure, Your Honor. The first I'm going to address is motivation to combine the embodiments of without.

[00:01:07] Speaker 02:
That's on the 673?

[00:01:08] Speaker 03:
Yes, that's correct.

[00:01:10] Speaker 02:
Limitation 5K, 5G, maybe?

[00:01:13] Speaker 03:
That is the 223 patent. Okay, thank you. Yeah, so I'll get to that in a second.

[00:01:19] Speaker 03:
I'm also going to address the claim construction issue with relation to nominal operating conditions and severity level. in relation to the 673 patent. For the 223 patent, I will address claim five with regard to an assumption that the board made that we believe is unsupported by the record.

[00:01:40] Speaker 02:
Thank you.

[00:01:40] Speaker 03:
That would be the focus of our argument.

[00:01:44] Speaker 03:
So I'll start with the motivation to combine issue. There's no dispute below that The petition is based on a combination of embodiments, separate embodiments in the FEV.

[00:01:56] Speaker 01:
The petition states that... How do we know that? I mean, it could be easily read that the petition said Lefevre 102 or in the alternative 103, and the board adopted the petition...

[00:02:14] Speaker 01:
And what is it in that reference, I'm just going to call it Lefevre, that shows you and shows us that the different limitations that are disclosed in Lefevre are necessarily in different embodiments of Lefevre?

[00:02:35] Speaker 03:
Well, that is what the petitioner said. And again, that was adopted by the board.

[00:02:40] Speaker 01:
Right.

[00:02:42] Speaker 01:
Well, the petition said a couple things, right? It said, we're relying on 102. The reference, Lefebvre, doesn't expressly disclose that all these different limitations are contained in a single embodiment. But nevertheless, it's also in the alternative would have been obvious under 103.

[00:03:07] Speaker 01:
Am I misunderstanding that?

[00:03:10] Speaker 03:
I did not read the petition.

[00:03:14] Speaker 03:
as proposing arguments in the alternative.

[00:03:27] Speaker 03:
In the petition... What page are you on? It's short. This is Appendix 1681.

[00:03:36] Speaker 03:
The petitioner says, Lefebvre, however, does not expressly state all the disclosed limitations are part of a single embodiment.

[00:03:43] Speaker 01:
What does the sentence say above that?

[00:03:48] Speaker 03:
What it says is that Petitioner believes these claims are anticipated. However, the ground that's actually presented is a 103 ground. They did not present a 102 ground.

[00:03:58] Speaker 01:
Well, the thing is, we've seen this before, where the Board officially finds claims unpatentable under Section 103, but that's We've also affirmed those when the single reference contains all the limitations in the 102 cents. So that's not necessarily surprising to us.

[00:04:27] Speaker 01:
And so the next question is, argument is premised on there's something in Lefevre that's telling us that the limitations that are being relied upon in that reference are being disclosed in separate embodiments. And so my question to you is, when I read Lefevre, that wasn't so obvious to me. What is it that proves to you and me that the parts of Lefevre that the Board and Petitioner are relying on are coming from different embodiments in Lefevre?

[00:05:02] Speaker 03:
I think my response to that is that it's not Amstead's burden to provide the prima facie case in chief. Motivation to combine, whether it's through separate references or through multiple embodiments, in the same reference, and this is from the Stephan case.

[00:05:15] Speaker 01:
I guess the question is, why couldn't it be that the board affirmed both? Affirmed, yes, this is a 102.

[00:05:24] Speaker 01:
And because Lefebvre teaches all these limitations, and also in the alternative, it's a 103.

[00:05:33] Speaker 03:
So that record was not developed below. The entire record in the IPR was as a single-reference obviousness ground. So there was no development about whether they were all in a single embodiment or not. That's kind of our point, is that that was never developed. They did not present it in their petition that way, and that was not part of any of the briefing below.

[00:06:03] Speaker 03:
And the board acknowledged directly that Lefebvre doesn't disclose all the limitations in a single embodiment.

[00:06:11] Speaker 01:
Oh, the board said that?

[00:06:13] Speaker 03:
Yes, in the 673, yes, they did.

[00:06:16] Speaker 03:
That is, I think I have that. Yeah, that's in the final written decision appendix page 156.

[00:06:37] Speaker 03:
So the petitioner asserts that the challenge claims are unpatentable under 103 over Lefebvre, which does not disclose expressly all the limitations as part of a single embodiment.

[00:06:47] Speaker 03:
So that's what the board found. That's a finding of the board at that point.

[00:06:51] Speaker 01:
But I guess if they're not expressly all disclosed in a single embodiment, that doesn't mean they're not disclosed all in a single embodiment.

[00:06:59] Speaker 03:
Again, that's not Amstead's burden to show. It is the petitioner's burden to show that either all of the limitations are in a single embodiment, which both the petitioner and the board acknowledge they are not, or to show motivation to combine those separate embodiments.

[00:07:19] Speaker 03:
Amstead is not required to show a lack of a prima facie case.

[00:07:26] Speaker 04:
So what you're isolating as being the problem in this regard is simply that because the petition failed to make a prima facie case of motivation to combine in the petition?

[00:07:37] Speaker 03:
That's correct. Part of a prima facie case of obviousness is providing a motivation to combine and reasonable likelihood of success. And that was never developed for this round.

[00:07:47] Speaker 04:
When did this come up in the proceeding? Did you challenge it in the response?

[00:07:53] Speaker 03:
Yes, Your Honor.

[00:07:54] Speaker 04:
They came back and said...

[00:07:57] Speaker 03:
The response of the petitioner was, we don't have to, citing to real-time data. The problem with real-time data is that that was expressly a 102 or in the alternative 103 ground, and there was an express finding that all of the limitations were in a single embodiment. And the board in that case actually did address motivation to combine in the alternative argument.

[00:08:20] Speaker 04:
So what are you seeking here? A vacate and remand so that the board can... Or are you saying the petitioner forfeited its ability to establish a motivation to combine now because they didn't have it in their petition? What's the relief you're seeking?

[00:08:35] Speaker 03:
I think it's the latter.

[00:08:36] Speaker 03:
The petition does not state a prima facie case, and it's too late now to add to that record.

[00:08:44] Speaker 03:
At the minimum, there should be a vacature and an additional fact-finding.

[00:08:54] Speaker 03:
So with regard to claim construction of the 673 patent, I'm going to just touch very briefly on nominal operating conditions because I do not think there was a very big dispute. The main dispute just had to do with how the board approached the addition of normative into the construction. So just so we are clear, the...

[00:09:20] Speaker 03:
Board construed nominal operating conditions as normative or expected conditions, based on certain things that aren't relevant here.

[00:09:29] Speaker 03:
And Amstead proposed simply just expected conditions. And the reason why was that both petitioner and the board in its final decision continually referred to operational limits as normative limits. And frankly, that just didn't make a lot of sense, because nominal operating conditions, as it is used certainly in the claim, it has to do with what operating conditions are expected for a rail car in any particular environment.

[00:10:00] Speaker 03:
critical failure or an operational limit cannot be, by definition, a nominal operating condition.

[00:10:06] Speaker 02:
So, yeah, the only thing you dispute is the inclusion of the word normative at the beginning of the construction. And what is it that you think specifically is being captured by that inclusion of the word normative that otherwise would not be within the scope of this claim term?

[00:10:26] Speaker 03:
Well, again, judging from the description that the board uses, they refer to operational limits of the rail car as normative limits. And so to the extent that is included within nominal operating conditions, our view is that it cannot be corrected.

[00:10:46] Speaker 02:
Your view is that operational limits would not be included within, quote, expected conditions, right?

[00:10:52] Speaker 03:
That's correct. Expected conditions are what the rail car would be going in under normal conditions, under normal operation. An operational limit is where you have, just to use a specific example, you have a bearing that is vibrating to the point where it is at the operational limit of that bearing and it's at risk of failure. That's not a nominal operating condition.

[00:11:14] Speaker 04:
Well, the board here relied on the specifications.

[00:11:22] Speaker 04:
I think they cited, are you familiar with what I'm talking about?

[00:11:26] Speaker 03:
I believe so.

[00:11:31] Speaker 04:
Why is that passage not sufficient basis for supporting enforcement?

[00:11:37] Speaker 03:
What was, I apologize, what was the citation?

[00:11:39] Speaker 04:
I've got it here in my notes. 142 to 48.

[00:11:50] Speaker 03:
Well, for one thing, this paragraph is talking about mechanical failures that can very quickly lead to catastrophic failure.

[00:12:01] Speaker 03:
What I'll say is... So one thing I'll say, I'll say this right now. If the board had described their analysis the way that Intervenor did, I don't know if we would be here talking about this. But that's not what they said.

[00:12:14] Speaker 03:
They had...

[00:12:17] Speaker 03:
repeatedly referred to a limit or maximum permissible operating temperatures, for example. And, again, I don't want to belabor this point. The reason why this is important is, I think, going to the next issue, which is the severity levels. Do you want to move to those quickly?

[00:12:38] Speaker 04:
Yes. Because we're running into your bubble time.

[00:12:41] Speaker 03:
Absolutely, Your Honor. So the AMSA's construction of severity level was that it's one of a plurality of known levels indicating seriousness of a condition or a deviation. This is related to the construction of the claim itself. The severity level is assigned to deviations which are, in the previous element, defined as deviations from nominal operating conditions. So that's, again, why...

[00:13:10] Speaker 03:
an operational limit would not be a nominal operating condition. An operational limit would be presumably one of those points that might indicate a severity level. But in any case, the board construed a severity level as a type of fault which requires a particular action.

[00:13:28] Speaker 03:
Amstead and its expert developed below that there's no definition of level that...

[00:13:35] Speaker 03:
equates to a fault. It didn't make a lot of sense to refer to it as a type of fault. I believe the reason why this is the case is that both parties looked at the disclosure of the tiered alarms in the patent.

[00:13:55] Speaker 03:
That would be column 13 to column 14, lines 32 to 32.

[00:13:58] Speaker 04:
Okay, can I just ask you quickly before your time runs out? What are the consequences of the two claim construction points you've just raised here?

[00:14:07] Speaker 03:
Sure.

[00:14:09] Speaker 03:
Yes. So the properly construed LAFEB does not disclose severity levels. LAFEB discloses a single threshold.

[00:14:17] Speaker 04:
And what about the normative, the first claim construction point?

[00:14:21] Speaker 03:
Well, again, I think the import there is that what the severity levels are assigned to the deviations from nominal operating conditions. So, again, just nominal operating conditions are expected conditions from our view. Even if you're talking about normative conditions, as long as it's normative to normal operating conditions, then I guess that could be fine.

[00:14:42] Speaker 03:
But, again, as far as the severity level is concerned, the issue is Lefebvre does not disclose the severity level as it's described in the patents. And as it's claimed.

[00:14:54] Speaker 04:
All right. We're running out of time, so we'll take the other issues that you wanted to raise on the briefs. And we'll kick from the other side. Thank you.

[00:15:00] Speaker 03:
Thank you, Your Honor.

[00:15:10] Speaker 00:
Good morning. Good morning, Your Honors. May it please the Court. I'd like to start with the motivation to combine issue, if that's OK.

[00:15:18] Speaker 00:
I just want to begin by saying there was a lot of statements here made about what the board agreed to or what the petitioner alleged. And I want to go back to where Judge Chen was talking about in the petition how what was stated there wasn't some concession that there are disclosures and multiple embodiments. But what the petitioner was saying is that everything is disclosed in the Lefebvre reference. However... It's not expressly clear that there's anything in multiple embodiments.

[00:15:51] Speaker 00:
The petitioner did not point to there being multiple embodiments where the disclosures are. Amstead did not point to multiple embodiments. And the board, in its finding, did not agree and point to the disclosures being in multiple embodiments. That page that counsel pointed to where the board made the statement, the board is quoting the petitioner. The board is saying...

[00:16:13] Speaker 00:
Go back to it again. It was on APPX 156 where opposing counsel seemed to suggest that the board made some sort of admission that things are in different embodiments. But what it's saying is petitioner asserts that claims, and it lists the claims, are unpatentable under 103 over la feb, which does not expressly I'm sorry, which does not disclose expressly all limitations. It's just quoting what the petitioner had said.

[00:16:41] Speaker 02:
It's not making some sort of... The petition controls what happens in the proceeding.

[00:16:46] Speaker 02:
Can the board find a claim unpatentable as anticipated if the petition does not argue that it is?

[00:16:55] Speaker 00:
So to answer your question, no, but that's not exactly the facts here. So the petition says that Everything, all the limitations are found in Lefebvre. And then it says we're not clear that everything's expressly in one embodiment, so we're doing it under a 103. This is just like real time, despite what opposing counsel said. In that case, it was a 103, and the court there said, okay, this is really like a 102, and we don't need this additional reference here.

[00:17:33] Speaker 00:
And because 102 is the epitome of obviousness, we can find that all of the limitations are here without looking for a motivation to combine. And that's exactly what happened here. When the patent owner filed this corrected reply, it basically said, there's an issue here because there's a limitation missing. It did not really argue motivation to combine, but it said there needs to be a motivation to combine here because there's something missing, and so you have to modify the reference in some sort of way. And that's not what the board found. The board went through every single limitation and said, here's the limitation in the reference.

[00:18:07] Speaker 00:
Here's the limitation in the reference. There's no reason to modify here. There's no reason to modify. find a motivation because everything, all the limitations are disclosed in that particular reference.

[00:18:18] Speaker 00:
So this is a case akin to real time that can stand the way that it was written.

[00:18:26] Speaker 00:
Moving on, if that's okay, to the claim construction with the normative operating conditions.

[00:18:34] Speaker 04:
If you could address, your friend said, I'm not sure whether this is normative or severity, he made the point that What you're saying in the brief had been what the board said. That might have been okay, but it was different, what you're saying. So if you know what he's speaking to, why don't you address that?

[00:18:51] Speaker 00:
I don't because I feel like I was just defending what the board actually did, which was essentially finding that the board – I think what Amstead is arguing – is that they feel that the stage four critical alarm was read into the claim. But that's not actually what happened. That was my impression when I read their brief, and I think that's the argument that is being made here today, that you can't read that in. But the board did not do that.

[00:19:20] Speaker 00:
It didn't find that that failure was a catastrophic failure. It was basically saying what's happening here is that there are multiple operational norms that serve as reference points for detecting the deviations. And it literally went through and said you have bearing temperatures that exceed the temperature of an apslimate. You have average bearing temperatures calculated at the wagon or freight level. You have threshold-based alarm values for bearing temperatures. And all it's doing is saying under this word nominal operating conditions, it's saying you have these deviations that come from what is normal.

[00:19:56] Speaker 00:
And that's what that nominal, I'm sorry, normative or expected condition language means. It's not saying we're bringing in a fault or something where it's so high that it's wrong. We're just saying this is what it should be at a certain level, something is different, and so it is off of the normative operating conditions.

[00:20:16] Speaker 02:
So, I'm sorry, in your view then, what is the word normative adding to, to the construction of nominal that wouldn't be covered if normative was not in the construction?

[00:20:32] Speaker 00:
I think it's just showing that there are operational norms, operational values that are what one would expect when operating the rail car.

[00:20:42] Speaker 02:
Is it just redundant of expected conditions, or is it actually broadening the claim term?

[00:20:50] Speaker 02:
That is the inclusion of the word normative.

[00:20:54] Speaker 00:
I think it could be made that it might be a little bit redundant because it's staying normative or expected. But I think the reason it's stated here is because there are these sort of predetermined values, meaning predetermined conditions within, let's say, the bearing temperatures that are being looked for. And when the sensors determine that something is wrong there, they send a signal. And so... You mean like...

[00:21:23] Speaker 01:
If there was some default range that the bearing temperature should be, like, for example, 100 to 150 degrees Fahrenheit, that would be a normative, nominal operating condition?

[00:21:40] Speaker 00:
If that's what the reference says. The reference doesn't actually have temperatures.

[00:21:46] Speaker 01:
I bet I'm just trying to get a better understanding of what a normative – Yes, if that was the expected thing that a rail car operator would have looked for or expected when they were operating the rail car and then there was some sort of deviation from that, then under that hypothetical – I thought maybe expected might have been referencing some kind of real-time expected temperature in the sense that maybe you're sensing the temperature of all the bearings of a train car and – Those are all in roughly the same temperature, but now this one is, for this one particular bearing, the temperature is deviating quite a bit from the other bearings.

[00:22:35] Speaker 01:
Yes, maybe I misunderstood your – Since temperatures, and so, therefore, that's – the expected temperature would be something very close to all the other ones.

[00:22:44] Speaker 00:
Yes, and I apologize. Maybe I misunderstood your original hypothetical, but that's what I thought I was agreeing to.

[00:22:49] Speaker 01:
But it is absolutely the case of – So that's a real-time expected condition, whereas a normative is, hey, during operation, we expect all these things to be roughly – Yes, within a range of – X to Y degrees temperature and – And if you're outside of that, then you're not within a nominal operating condition.

[00:23:11] Speaker 00:
Right, and then you would have the alarm threshold at that point. Does normative appear in the spec, the word normative? In their specification? I don't recall, Your Honor. Let me just take a look real quick.

[00:23:25] Speaker 04:
And also, is this the print instruction that the other side, that the petitioner was advocating, or is this something the board came up with?

[00:23:32] Speaker 00:
This was what the petitioner was advocating, Your Honor, to answer your question about is normative in this.

[00:23:39] Speaker 01:
Is nominal operating conditions in the spec? It's a better question. You're welcome.

[00:23:48] Speaker 00:
Thank you, Your Honor.

[00:23:52] Speaker 00:
To the extent it is, I want to be able to point you.

[00:24:01] Speaker 00:
So I'm not sure about the normative, or at least where I could point, Your Honors, to locate that. I'm happy to.

[00:24:10] Speaker 04:
I know there's words like normal.

[00:24:12] Speaker 00:
Yes, those are in there. You're right, not nominal.

[00:24:16] Speaker 04:
Okay.

[00:24:17] Speaker 00:
Yeah, I don't see that in the specification here. I'm trying to.

[00:24:25] Speaker 00:
So just to clarify, so the clean construction that the board came to is the proper construction and is correct. As for severity level, I think it suffers from sort of the same problem, right? So opposing counsel argued that there's no value, there's no known values in the construction, and I think what they're looking for is that stages one through four that are sort of outlined in...

[00:24:54] Speaker 00:
their specification, but that's not, the board correctly found that nothing in the specification identifies numeric thresholds defining those particular stages, and so those aren't needed for severity levels. The only thing you need for the severity level is the fact that it's outside of this range, and therefore something is wrong with the rail car, and then a an action needs to be taken by the operator as a result. There's not any known values anywhere in the specification to point to that would go against the claim construction that the board came up with.

[00:25:32] Speaker 00:
And so if there are no further questions, I yield my time.

[00:25:35] Speaker 04:
Thank you.

[00:25:36] Speaker 00:
Thank you, Your Honors.

[00:25:37] Speaker 04:
Okay, we'll restore it two minutes later.

[00:25:45] Speaker 03:
Thank you, Your Honors. I'm just going to touch briefly on the last point that was raised with regard to the severity levels.

[00:25:54] Speaker 03:
The multi-stage levels that my colleague was discussing are on column 13 of the – well, I'm looking at the 223 patent, but the specifications are the same. This is Appendix 136 and column 13 – It has stage 1, stage 2, stage 3, and stage 4, going from lines 5 to lines 43, it looks like.

[00:26:26] Speaker 03:
What is discussed here are, in fact, numerical values. They just don't have specific numerical values attached to them. But it's a predetermined amount hotter than the axonate is one. That's a temperature. That's going to be a value. And it's predetermined. It's expressly stated as predetermined.

[00:26:46] Speaker 03:
For stage three, it's the temperature predetermined amount above ambient. Again, that's going to be a value.

[00:26:54] Speaker 03:
So that is what we're talking about. And these are actually escalating values that lead to, with greater seriousness, and lead to more necessary interventions. The last one being the critical alarm, which is stop the train and remove the bearing.

[00:27:13] Speaker 03:
So that...

[00:27:14] Speaker 03:
This is what Amstead cited to in support of its construction. The board cited to it for its construction. We believe our interpretation of that disclosure is correct and supports the construction. Thank you. Thank you.

[00:27:30] Speaker 04:
Thank you. Both sides, the case was submitted.