trials@uspto.gov
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`571-272-7822
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`CBM2015-00015, Paper No. 52
`CBM2015-00016, Paper No. 53
`CBM2015-00017, Paper No. 44
`CBM2014-00192, Paper No. 43
`CBM2014-00193, Paper No. 43
`CBM2014-00194, Paper No. 47
`CBM2014-00199, Paper No. 47
`CBM2015-00018, Paper No. 40
`December 10, 2015
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`RECORD OF ORAL HEARING
`UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`- - - - - -
`SAMSUNG ELECTRONICS AMERICA, INC.,
`SAMSUNG ELECTRONICS CO., LTD., and APPLE INC.,
`Petitioners,
`v.
`SMARTFLASH LLC,
`Patent Owner.
`- - - - - - -
`Case Nos. CBM2014-00192, CBM2015-00016
`(Patent Number 8,033,458)
`CBM2014-00193, CBM2015-00017
`(Patent Number 8,061,598)
`CBM2014-00194, CBM2014-00199, CBM2015-00015
`(Patent Number 8,118,221)
`CBM2015-00018, (Patent Number 7,942,317)
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`Oral Hearing Held on Monday, November 9, 2015
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`571-272-7822
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`CBM2015-00015, Paper No. 52
`CBM2015-00016, Paper No. 53
`CBM2015-00017, Paper No. 44
`CBM2014-00192, Paper No. 43
`CBM2014-00193, Paper No. 43
`CBM2014-00194, Paper No. 47
`CBM2014-00199, Paper No. 47
`CBM2015-00018, Paper No. 40
`December 10, 2015
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`RECORD OF ORAL HEARING
`UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`- - - - - -
`SAMSUNG ELECTRONICS AMERICA, INC.,
`SAMSUNG ELECTRONICS CO., LTD., and APPLE INC.,
`Petitioners,
`v.
`SMARTFLASH LLC,
`Patent Owner.
`- - - - - - -
`Case Nos. CBM2014-00192, CBM2015-00016
`(Patent Number 8,033,458)
`CBM2014-00193, CBM2015-00017
`(Patent Number 8,061,598)
`CBM2014-00194, CBM2014-00199, CBM2015-00015
`(Patent Number 8,118,221)
`CBM2015-00018, (Patent Number 7,942,317)
`
`
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`
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`Oral Hearing Held on Monday, November 9, 2015
`
`
`
`Before: JENNIFER S. BISK; RAMA G. ELLURU; JEREMY
`M. PLENZLER (via video link); and MATTHEW R. CLEMENTS (via
`video link), Administrative Patent Judges.
`
`
`
`The above-entitled matter came on for hearing on Monday,
`November 9, 2015, at 10:03 a.m., in Hearing Room A, taken at the U.S.
`Patent and Trademark Office, 600 Dulany Street, Alexandria, Virginia.
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`APPEARANCES:
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`ON BEHALF OF THE PETITIONER SAMSUNG:
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`W. KARL RENNER, ESQ.
`TOM ROZYLOWICZ, ESQ.
`ANDREW PATRICK, ESQ.
`YAO WANG, ESQ.
`Fish & Richardson P.C.
`1425 K Street, N.W., 11th Floor
`Washington, D.C. 20005
`202-783-5070
`
`Julie Han, Samsung Representative
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`ON BEHALF OF THE PETITIONER APPLE:
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`J. STEVEN BAUGHMAN, ESQ.
`MEGAN F. RAYMOND, ESQ.
`Ropes & Gray LLP
`2099 Pennsylvania Avenue, N.W.
`Washington, D.C. 20006-6807
`202-508-4600
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`3
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`APPEARANCES (Continued)
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`JAMES R. BATCHELDER, ESQ.
`Ropes & Gray LLP
`1900 University Avenue
`Sixth Floor
`East Palo Alto, California 94303-2284
`650-617-4000
`
`CHING-LEE FUKUDA, ESQ.
`Ropes & Gray LLP
`1211 Avenue of the Americas
`New York, New York 10036-8704
`212-596-9000
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`Cyndi Wheeler, Apple Representative
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`ON BEHALF OF THE PATENT OWNER:
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`MICHAEL R. CASEY, ESQ.
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`GREG KRAUSS, ESQ.
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`Davidson Berquist Jackson & Gowdey LLP
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`8300 Greensboro Drive
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`Suite 500
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`McLean, Virginia 22102
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`571-765-7200
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`Case Nos. CBM2014-00192, CBM2015-00016 (Patent Number 8,033,458);
`CBM2014-00193, CBM2015-00017 (Patent Number 8,061,598);
`CBM2014-00194, CBM2014-00199, CBM2015-00015 (Patent Number
`8,118,221); and CBM2015-00018, (Patent Number 7,942,317)
`P R O C E E D I N G S
`
`
`
`(10:03 a.m.)
`JUDGE ELLURU: Please be seated. Good
`morning. We are here for the final hearing in
`CBM2015-0015, CBM2015- 0016, CBM2015- 0017 and
`CBM2015- 0018, Apple Inc. versus Smartflash LLC.
`This is also the final hearing for CBM2014- 00192,
`with which CBM2015- 00119 has been consolidated;
`CBM2014-00193, with which CBM2015- 00120 has been
`consolidated; CBM2014- 00194, with which CBM2015- 00117
`has been consolidated; and CBM2014- 00199, Samsung
`Electronics America, Inc., Samsung Electronics Company,
`Limited, and Apple, Inc. v. Smartflash.
`I'm Judge Elluru. To my right is Judge Bisk. And
`appearing remotely from San Jose is Judge Clements and from
`Detroit is Judge Plenzler.
`Let's begin with appearances from counsel,
`starting with Petitioner Apple.
`MR. BAUGHMAN: Your Honor, Steve Baughman.
`With me is my colleague, Jim Batchelder, Ching- Lee Fukuda
`and Megan Raymond for Apple. And we have with us a
`representative of apple, Cyndi Wheeler.
`JUDGE ELLURU: Thank you. And for
`Smartflash?
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`5
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`Case Nos. CBM2014-00192, CBM2015-00016 (Patent Number 8,033,458);
`CBM2014-00193, CBM2015-00017 (Patent Number 8,061,598);
`CBM2014-00194, CBM2014-00199, CBM2015-00015 (Patent Number
`8,118,221); and CBM2015-00018, (Patent Number 7,942,317)
`MR. CASEY: Good morning, Your Honor.
`Michael Casey on behalf of the Patent Owner Smartflash.
`With me is my colleague Greg Krauss. And with me also is
`the inventor of the patent.
`JUDGE ELLURU: Thank you. I would like to go
`over how we will proceed today. We will have two sessions
`of hearings. The first session will commence momentarily
`and cover the hearings for CBM2015- 0015, 16, 17 and 18.
`Each party, Apple and Smartflash, will have 75
`minutes of total time to present its argument. But let me
`remind the parties that, pursuant to our previous order, we
`had dismissed Apple as a Petitioner from CBM2015-00015
`and CBM2015- 00018, and also from 2015- 000 16, with respect
`to claim 1 of the '458 patent; and from CBM2014- 00194 with
`respect to claims 2 and 11 of the '221 patent.
`Petitioner Apple has the burden so will go first.
`Then Patent Owner will argue its opposition to Petitioner's
`case. And then if Petitioner Apple has reserved any time,
`Petitioner can use that time for rebuttal.
`The second session will commence at 1:30 p.m.
`and will cover oral hearings for CBM2014- 00192, 193, 194
`and 199.
`
`Please remember that Judges Clements and
`Plenzler cannot see whatever is being projected on the screen.
`So when you refer to a demonstrative on the screen, please
`
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`Case Nos. CBM2014-00192, CBM2015-00016 (Patent Number 8,033,458);
`CBM2014-00193, CBM2015-00017 (Patent Number 8,061,598);
`CBM2014-00194, CBM2014-00199, CBM2015-00015 (Patent Number
`8,118,221); and CBM2015-00018, (Patent Number 7,942,317)
`state the slide number so these Judges can follow along and
`we have a clear transcript.
`Also, please make clear at all times to which case
`and to which claim a particular argument relates.
`I will use the clock on the wall to time you and
`will give you a warning when you are reaching the end of
`your argument time.
`Do counsel have any questions, starting with
`Petitioner?
`MR. BAUGHMAN: Not from Petitioners, Your
`
`Honor.
`
`MR. CASEY: Yes, Your Honor, I do. Your
`Honor, the order that was issued on November 5th -- it says
`here on the 4th but it was actually I think entered on the 5th
`-- indicates in footnote 3 and footnote 5 that you will not be
`hearing any -- sorry, footnote 6, that you will not be hearing
`any arguments as relates to 15 and 18. So this hearing is
`actually not for 15 and 18.
`JUDGE ELLURU: Is Patent Owner making a
`request at this time?
`MR. CASEY: No, Your Honor. Patent Owner is
`making the point that Your Honors have cancelled 15 and 18
`or have noticed, have informed the parties that 15 and 18 are
`cancelled.
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`Case Nos. CBM2014-00192, CBM2015-00016 (Patent Number 8,033,458);
`CBM2014-00193, CBM2015-00017 (Patent Number 8,061,598);
`CBM2014-00194, CBM2014-00199, CBM2015-00015 (Patent Number
`8,118,221); and CBM2015-00018, (Patent Number 7,942,317)
`JUDGE ELLURU: We've dismissed Petitioner
`from those cases.
`MR. CASEY: And the order says that you are not
`going to hear arguments on 15 and 18. Is that correct?
`JUDGE ELLURU: That is correct. Is Patent
`Owner making a request to make argument with respect to
`those claims?
`MR. CASEY: With respect to those claims, Your
`Honor, Patent Owner is respectfully requesting that, given
`that you have already cancelled, that it be given an
`opportunity in the future to have a separate oral argument.
`You have already cancelled it.
`So statutorily, under 35 U.S.C. 326 (a)(10), the
`Patent Owner has a right to a hearing on this case.
`And the PTAB cancelled that hearing without
`notice and without conferring with -- or without being in
`conformance with 325 -- 35 U.S.C. 326 (a)(10).
`JUDGE BISK: So why don't you talk about those
`cases today then.
`MR. CASEY: Your Honor, you have already
`cancelled that case. I can't be requested to prepare an
`argument in two seconds. You have already made your --
`issued your ruling. You can't undo a ruling three seconds
`before the hearing.
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`Case Nos. CBM2014-00192, CBM2015-00016 (Patent Number 8,033,458);
`CBM2014-00193, CBM2015-00017 (Patent Number 8,061,598);
`CBM2014-00194, CBM2014-00199, CBM2015-00015 (Patent Number
`8,118,221); and CBM2015-00018, (Patent Number 7,942,317)
`JUDGE ELLURU: We've dismissed Petitioner
`from those cases as well with respect to certain claims.
`MR. CASEY: Yes, I understand, Your Honor. So
`the issue is whether or not the proceeding is terminated with
`respect to those -- whether those proceedings are terminated
`or whether those proceedings are only dismissed with respect
`to the Petitioner.
`So if -- Your Honor cited Progressive and
`Blackberry as supporting the fact that you can go forward
`even without a Petitioner. But neither of those cases is
`actually on point. So the actual proceedings in 15, 18 and the
`proceeding in 16 --
`JUDGE BISK: Excuse me. Why didn't you bring
`this up before just now?
`MR. CASEY: Your Honor, you issued the order
`on Thursday. The time for a reconsideration hasn't even
`passed yet.
`JUDGE ELLURU: You could have requested a
`teleconference and asked whether you -- you could have
`brought this up in a teleconference Thursday or Friday.
`MR. CASEY: That may be, Your Honor, but the
`reality is that you cancelled the hearing without providing
`notice. You did it too late to actually provide us with the
`ability to respond.
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`Case Nos. CBM2014-00192, CBM2015-00016 (Patent Number 8,033,458);
`CBM2014-00193, CBM2015-00017 (Patent Number 8,061,598);
`CBM2014-00194, CBM2014-00199, CBM2015-00015 (Patent Number
`8,118,221); and CBM2015-00018, (Patent Number 7,942,317)
`JUDGE BISK: So when do you want to have a
`hearing on this?
`MR. CASEY: We will have to find out, Your
`Honor, you will have to look at your calendar, but the issue
`arises --
`
`JUDGE BISK: Well, you say today is too late.
`When is not too late?
`MR. CASEY: Two weeks. Your Honor, there is a
`separate issue that has to be addressed at this point, which is
`if you are going to go forward, the Board has stepped into the
`shoes of the Petitioner.
`325 is supposed to be an anti- harassment statute.
`It is supposed to prevent exactly the kind of behavior that is
`now occurring, which is there has already been one final
`written decision, and now the proceedings continue against
`the Patent Owner and drive up costs, increase delays, and the
`Board is now doing on behalf of Petitioner that which
`Petitioner cannot do themselves, which is continue the
`proceeding rather than terminate.
`JUDGE ELLURU: As we indicated in our order,
`the record has been closed in these proceedings.
`MR. CASEY: Your Honor, the record is not
`closed. The record remains open because there can be
`admissions yet. And the record is not closed because
`statutorily Patent Owner is entitled to a hearing.
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`Case Nos. CBM2014-00192, CBM2015-00016 (Patent Number 8,033,458);
`CBM2014-00193, CBM2015-00017 (Patent Number 8,061,598);
`CBM2014-00194, CBM2014-00199, CBM2015-00015 (Patent Number
`8,118,221); and CBM2015-00018, (Patent Number 7,942,317)
`You have created a situation where the only way
`to move forward with the statutory rights that the Patent
`Owner has is to have a hearing, but the only person who could
`be standing in the shoes of the Petitioner at this point is the
`Board. So the Board is both adjudicator and party.
`JUDGE BISK: But where are the admissions
`coming from?
`MR. CASEY: They could be an admission of a
`
`party.
`
`JUDGE BISK: But there is only you left, the
`Patent Owner left.
`MR. CASEY: That may be, Your Honor, but that
`doesn't mean the record is closed, nor has Patent Owner
`waived its right to a hearing.
`JUDGE ELLURU: We do this in settlements as
`well, when parties have settled on the 11th hour, we have
`proceeded to final written decision.
`MR. CASEY: Your Honor, that's under a different
`section. That's under 327, which expressly provides the
`ability for the Board to continue to a final hearing even if the
`parties have settled.
`This isn't 327. This is 325. It is essentially an
`anti- harassment statute. And as I said, the Board is now
`doing exactly what the Petitioner is prohibited from doing
`itself, which is causing this procedure to continue on.
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`Case Nos. CBM2014-00192, CBM2015-00016 (Patent Number 8,033,458);
`CBM2014-00193, CBM2015-00017 (Patent Number 8,061,598);
`CBM2014-00194, CBM2014-00199, CBM2015-00015 (Patent Number
`8,118,221); and CBM2015-00018, (Patent Number 7,942,317)
`The only possible remedy is that, rather than
`dismissal, this case actually be terminated. This isn't like
`Progressive where --
`JUDGE ELLURU: So you are re-raising the issue
`of requesting a motion to terminate those cases which we
`have already ruled on.
`MR. CASEY: And, Your Honor, the time period
`for requesting reconsideration of that has not yet run.
`JUDGE ELLURU: Understood.
`MR. CASEY: Nor has the time period for
`requesting essentially that the Chief Judge take action if that
`is also required.
`So the fact is that this ruling came two days
`before this hearing. And we are where we are because of the
`order the Board issued, but this is not the doing of the Patent
`Owner.
`
`JUDGE ELLURU: Thank you. I'm going to
`confer with my Panel for a few minutes.
`(Pause)
`JUDGE ELLURU: Mr. Casey, we do have a
`question for you.
`MR. CASEY: Yes, Your Honor.
`JUDGE ELLURU: Are you requesting argument
`on the 325 issue or to argue on the merits of the two cases?
`
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`Case Nos. CBM2014-00192, CBM2015-00016 (Patent Number 8,033,458);
`CBM2014-00193, CBM2015-00017 (Patent Number 8,061,598);
`CBM2014-00194, CBM2014-00199, CBM2015-00015 (Patent Number
`8,118,221); and CBM2015-00018, (Patent Number 7,942,317)
`MR. CASEY: Your Honor, if the -- I guess I'm
`having a hard time. Can you be more specific with your
`question, and then I can try to answer it.
`JUDGE ELLURU: You said that you would like a
`hearing at a later time. Is that with respect to the merits of
`CBM2015-0015 and CBM2015- 0018 or is that with respect to
`the 325 issue that we have already ruled on?
`MR. CASEY: So, Your Honor, this will play out
`in two steps. If Your Honors say that you will not grant us a
`hearing, then that's an issue of essentially preventing a
`statutory right that is granted to the Patent Owner.
`If you say you are going to grant us a hearing,
`then the only way you can grant us the hearing is if the Board
`steps into the shoes of the Petitioner and does on behalf of
`the Petitioner that which the Petitioner cannot do itself.
`As a result, at that point -- to lay my cards on the
`table -- I'm going to ask that the Panel recuse itself because
`it's going to be on both the same side of the Petitioner and the
`adjudicator.
`JUDGE BISK: Couldn't you; can't you make that
`argument today?
`MR. CASEY: I'm sorry?
`JUDGE BISK: And you can't make that argument
`
`today?
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`Case Nos. CBM2014-00192, CBM2015-00016 (Patent Number 8,033,458);
`CBM2014-00193, CBM2015-00017 (Patent Number 8,061,598);
`CBM2014-00194, CBM2014-00199, CBM2015-00015 (Patent Number
`8,118,221); and CBM2015-00018, (Patent Number 7,942,317)
`MR. CASEY: I can certainly make the argument
`today, Your Honor, that if you step into the shoes of the
`Petitioner and say that you will grant me a hearing in the
`future, that you haven't, in fact, put yourself in the position
`of the Petitioner.
`JUDGE BISK: So what do you need the two
`weeks for, is what I'm trying to figure out?
`MR. CASEY: To have a hearing on 15 and 18,
`Your Honor. If you decide that you are not going to recuse
`yourself or the Patent Office is going to go forward with the
`hearing in 15 and 18 --
`JUDGE BISK: So wait a minute. This is a
`different request. What you are asking for is not only a
`hearing in two weeks but a hearing with a different panel in
`two weeks.
`MR. CASEY: Yes, Your Honor, absolutely.
`JUDGE BISK: Okay.
`MR. CASEY: And, Your Honor, I will go so far
`as to say that if you say that you are going to grant the
`request for a hearing and the Board is saying it is going to
`step into the shoes of Petitioner, I'm going to request a
`different hearing for all of today.
`JUDGE BISK: Okay. So is there anything that
`you could argue today that would satisfy one of these two
`cases?
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`Case Nos. CBM2014-00192, CBM2015-00016 (Patent Number 8,033,458);
`CBM2014-00193, CBM2015-00017 (Patent Number 8,061,598);
`CBM2014-00194, CBM2014-00199, CBM2015-00015 (Patent Number
`8,118,221); and CBM2015-00018, (Patent Number 7,942,317)
`MR. CASEY: I guess, Your Honor, I need to
`know whether or not the Board has become the Petitioner or
`the Board is going to grant a hearing, or the Board is not
`becoming the Petitioner, and then we can --
`JUDGE BISK: Okay. I think I understand what
`you are saying.
`JUDGE ELLURU: And we have another question
`
`for you.
`
`MR. CASEY: Yes, Your Honor.
`JUDGE ELLURU: How are the arguments in 16
`and 17 different -- or how are the arguments in 15 and 16
`different from the arguments you are going to make within 16
`and 17 with respect to the merits?
`MR. CASEY: I haven't decided that, Your Honor.
`They may not be different in the long run, but you
`certainly can't ask me --
`JUDGE ELLURU: So your arguments have to be
`based on your briefing and we haven't seen any differences.
`MR. CASEY: Absolutely. Your Honor, are you
`saying that you are not going to grant me a hearing for 15 and
`18 or --
`
`JUDGE ELLURU: The Panel has not made any
`decisions yet. I'm asking you a question with respect to
`CBM2015-0015 and 16, and why those arguments with respect
`
`
`
`15
`
`
`
`
`
`Case Nos. CBM2014-00192, CBM2015-00016 (Patent Number 8,033,458);
`CBM2014-00193, CBM2015-00017 (Patent Number 8,061,598);
`CBM2014-00194, CBM2014-00199, CBM2015-00015 (Patent Number
`8,118,221); and CBM2015-00018, (Patent Number 7,942,317)
`to the merits would be different than the arguments you will
`be making today with respect to CBM2015- 0016 and 17?
`MR. CASEY: Your Honor, I'm not sure that they
`would be, but I am not capable of making that decision with
`zero notice after the Board has already cancelled the hearing
`on those 15 and 18 last week. I'm not capable of doing that,
`Your Honor.
`JUDGE ELLURU: Thank you. All right. Could
`we hear from Petitioner Apple briefly to see if it has any
`response at this point?
`MR. CASEY: Your Honor, just so we are clear,
`they are not Petitioners in 15, 18 or claim 1 of 16 any more.
`So they have no standing to discuss the issues in 15, 18 and
`claim 1 of the 16 matter. They are not Petitioners any more.
`You have already dismissed them.
`JUDGE ELLURU: All right. Thank you. We
`agree. Thank you.
`Please bear with us while we confer a little
`
`further.
`
`(Pause)
`JUDGE ELLURU: Counsel, the Panel has
`conferred and the Panel has decided to allow the Patent
`Owner to argue with respect to all four cases ,
`CBM2015-0015, CBM2015- 0016, CBM2015- 0017 and
`CBM2015-0018.
`
`
`
`16
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`Case Nos. CBM2014-00192, CBM2015-00016 (Patent Number 8,033,458);
`CBM2014-00193, CBM2015-00017 (Patent Number 8,061,598);
`CBM2014-00194, CBM2014-00199, CBM2015-00015 (Patent Number
`8,118,221); and CBM2015-00018, (Patent Number 7,942,317)
`MR. CASEY: Your Honor, there is insufficient
`time to prepare for 15, 18 and claim 1 of the 0016 matter.
`You have already cancelled those arguments. You can't tell
`me two minutes beforehand that I have to be prepared for
`those as well.
`I mean, you can tell me that, but I'm going to
`request a conference. I'm going to request an emergency
`motion with the Chief Judge. This is outrageous.
`JUDGE ELLURU: Your position is understood.
`MR. CASEY: Okay. Are you saying that if I
`don't argue 15 and 18 today, I've waived?
`JUDGE ELLURU: I am not saying anything other
`than that you are entitled to argue those -- we are giving you
`the opportunity to argue those cases today given the
`similarity of arguments in all four cases.
`MR. CASEY: Okay. So Your Honors are holding
`a hearing on 15 and 18 today, you are willing to hold a
`hearing on 15 and 18 today? You have stepped into the shoes
`of the Petitioner?
`JUDGE ELLURU: The Panel has agreed to give
`you the opportunity, to give Smartflash the opportunity to
`argue its case in CBM2015- 0015 and CBM2015- 0018.
`MR. CASEY: Okay. Your Honor, I would move
`that the Panel recuse itself as it has now stepped into the
`shoes of the Petitioner, because it is doing in 15 and 18 by
`
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`Case Nos. CBM2014-00192, CBM2015-00016 (Patent Number 8,033,458);
`CBM2014-00193, CBM2015-00017 (Patent Number 8,061,598);
`CBM2014-00194, CBM2014-00199, CBM2015-00015 (Patent Number
`8,118,221); and CBM2015-00018, (Patent Number 7,942,317)
`maintaining this proceeding that which the Petitioner itself
`cannot do.
`
`
`
`JUDGE ELLURU: Your request is denied.
`MR. CASEY: Okay. Your Honor, I also would
`request that the Patent Owner be given two weeks to prepare
`its arguments for 15 and 18 and claim 1 of the 0016 patent.
`JUDGE ELLURU: You can make that request.
`Again, we ask that you make that request at another time in
`written form.
`MR. CASEY: Okay.
`JUDGE ELLURU: So we will start with Petitioner
`
`Apple.
`
`Mr. Baughman, would you like to reserve any time
`for rebuttal?
`MR. BAUGHMAN: Yes, Your Honor. We would
`like to split our time roughly in half, so if we could reserve
`half our time, please, which I think is 38 minutes.
`JUDGE ELLURU: 33 minutes?
`MR. BAUGHMAN: 37 and a half. Thank you,
`Your Honor.
`JUDGE ELLURU: All right.
`MR. BAUGHMAN: Good morning, Your Honors.
`May it please the Board. And, Judges Clements and Plenzler,
`if I step away from the microphone, please feel free to remind
`me to wander back. I apologize in advance if I do that.
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`Case Nos. CBM2014-00192, CBM2015-00016 (Patent Number 8,033,458);
`CBM2014-00193, CBM2015-00017 (Patent Number 8,061,598);
`CBM2014-00194, CBM2014-00199, CBM2015-00015 (Patent Number
`8,118,221); and CBM2015-00018, (Patent Number 7,942,317)
`Your Honors, Petitioner have provided our
`positions and evidence in these two trials in briefing and I
`have before Your Honors slide 1 of our demonstratives,
`Apple's demonstratives indicating the two trials we
`understand are in play for Petitioner Apple. That is the
`00016 and 00017 matters based on Your Honors' order dated
`November 4th.
`To assist the Board in considering the record for
`which we rely on our papers and the evidence we have
`already submitted, we propose to discuss in our opening
`discussion this morning two topics along with any questions,
`of course, the Board may have.
`So after some brief opening remarks, first my
`colleague, Mr. Batchelder, is going to address the
`ineligibility of the claims of the '458 and '598 patents that are
`at issue in these proceedings under the Supreme Court's
`two-step inquiry mandated in Mayo and Alice, and in
`particular under the second prong of that test, since Patent
`Owner has made no argument whatsoever to contest that its
`claims are directed to abstract ideas under the first prong of
`Mayo and Alice.
`Second, I'm going to address Patent Owner's
`legally-misguided arguments about preemption which, as the
`Supreme Court and Federal Circuit have made clear, is not
`some separate or alternative test for subject matter eligibility
`
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`Case Nos. CBM2014-00192, CBM2015-00016 (Patent Number 8,033,458);
`CBM2014-00193, CBM2015-00017 (Patent Number 8,061,598);
`CBM2014-00194, CBM2014-00199, CBM2015-00015 (Patent Number
`8,118,221); and CBM2015-00018, (Patent Number 7,942,317)
`under Section 101. It is certainly not the end run they have
`suggested in an effort to avoid the mandatory two- step test.
`Instead preemption is simply a motivation behind
`and is completely subsumed by the two- step test applied by
`the Supreme Court in Alice and Mayo, where the court
`recognizes that courts are not institutionally well suited to
`distinguish among different abstract ideas based on judgments
`about how narrowly or broadly they might be expected to
`foreclose future innovation.
`I will be prepared if the Board should have any
`questions to address the invalidity of claim 11 of the '458
`patent under Section 112 or any of the other arguments Patent
`Owner has thrown up to try to stave off invalidation of the
`challenged claims.
`Turning to slide 2 of Apple's demonstratives, just
`to give the Board an overview of the demonstratives we have
`this morning, we plan to address basically the first half of
`topics in our slides. We have an appendix with some
`additional detail that may or may not come up depending on
`the Board's questions.
`Now, there is a relatively narrow list of issues
`that remains in dispute before us. Before we jump in, I would
`like to make three brief observations about the kind of
`arguments and evidence Patent Owner has put before this
`Board.
`
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`Case Nos. CBM2014-00192, CBM2015-00016 (Patent Number 8,033,458);
`CBM2014-00193, CBM2015-00017 (Patent Number 8,061,598);
`CBM2014-00194, CBM2014-00199, CBM2015-00015 (Patent Number
`8,118,221); and CBM2015-00018, (Patent Number 7,942,317)
`The first point is about waiver. This trial begins
`and ends with application of the Supreme Court's two- part
`test for patent- eligible subject matter under Mayo and Alice.
`And Patent Owner has waived any argument with respect to
`the first part of that test.
`It has offered no argument disputing that, as
`Petitioner demonstrated and the Board agreed in the
`Institution Decision, the claims at issue here are directed to
`abstract ideas.
`JUDGE ELLURU: Counsel, all specifications and
`challenged patents are related. Is it your position that the
`abstract idea of all the challenged claims and all challenged
`patents is the same?
`MR. BAUGHMAN: Your Honor, I think the
`abstract ideas could be articulated that way.
`JUDGE ELLURU: And what is that?
`MR. BAUGHMAN: It is the idea of access to
`content based on payment. I think we actually have a slide
`addressing this in more detail and how the Board has defined
`it as well.
`Slide 6, please. And here we are talking about the
`concept of controlling access. The Board has in its
`Institution Decision in the 0016 matter noted that it is
`restricting access to stored data based on supplier-defined
`access rules and payment data.
`
`
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`Case Nos. CBM2014-00192, CBM2015-00016 (Patent Number 8,033,458);
`CBM2014-00193, CBM2015-00017 (Patent Number 8,061,598);
`CBM2014-00194, CBM2014-00199, CBM2015-00015 (Patent Number
`8,118,221); and CBM2015-00018, (Patent Number 7,942,317)
`JUDGE ELLURU: So that's a little different than
`your characterization. So I'm trying to determine what is
`your characterization of the abstract idea and do you agree
`that it is the same in all cases?
`MR. BAUGHMAN: Your Honor, we agree with
`the Board's articulation of the abstract idea and, respectfully,
`I think more than one person could come up with more than
`one formal way of stating the abstract idea, but I think the
`abstract ideas are essentially the same.
`JUDGE BISK: Can I ask you, what about the
`District Court's version of the abstract idea?
`MR. BAUGHMAN: If I might, Your Honor, may I
`ask my colleague, Mr. Batchelder, to help address that
`question?
`
`JUDGE BISK: Okay.
`MR. BATCHELDER: If I could, Your Honor, the
`
`Board's --
`
`JUDGE BISK: And then go to the microphone,
`though, so that we all can hear.
`MR. BATCHELDER: Sure. Just give me one
`moment. Again, James Batchelder, Ropes & Gray, for Apple.
`The Board's articulation here restricting access to
`stored data based on supplier-defined access rules and
`payment data we think is an accurate recitation of the abstract
`idea that encompasses the claims.
`
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`Case Nos. CBM2014-00192, CBM2015-00016 (Patent Number 8,033,458);
`CBM2014-00193, CBM2015-00017 (Patent Number 8,061,598);
`CBM2014-00194, CBM2014-00199, CBM2015-00015 (Patent Number
`8,118,221); and CBM2015-00018, (Patent Number 7,942,317)
`Let me just point to the magistrate's R and R --
`give me one moment, please. And the magistrate pointed to
`conditioning and controlling access to data based on a
`payment. A similar concept.
`I think the Board's perhaps is more all
`encompassing because it doesn't require payment. There are
`some claims that don't actually refer to payment. So I think
`the Board's is probably preferable in that respect.
`MR. BAUGHMAN: And, Your Honor, as far as
`we have seen, there has been no argument from Patent Owner
`that this is incorrect as an articulation of the abstract idea
`and, again, no challenge to the notion that all of the claims
`are directed to abstract ideas.
`So under the scheduling order in both of these
`trials, page 3, as the Patent Owner's has warned, any
`arguments in that connection are waived.
`JUDGE BISK: And the District Court seemed to
`find that it was an abstract idea as well.
`MR. BAUGHMAN: I think there is actually no
`dispute anywhere here that these are directed at abstract
`ideas, Your Honor.
`JUDGE BISK: Okay.
`MR. BAUGHMAN: And certainly none that has
`been raised by Patent Owner to this point. And actually we
`can see this in the table of contents of their Patent Owner
`
`
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`Case Nos. CBM2014-00192, CBM2015-00016 (Patent Number 8,033,458);
`CBM2014-00193, CBM2015-00017 (Patent Number 8,061,598);
`CBM2014-00194, CBM2014-00199, CBM2015-00015 (Patent Number
`8,118,221); and CBM2015-00018, (Patent Number 7,942,317)
`response, in the 00017 matter, that's the '598 patent, Paper
`32.
`
`
`
`So in 5- A they talk about the two- part test for
`statutory subject matter. And the next section of their brief,
`the second step of Mayo. So our argument here is going to
`focus on what we understand to be the only unwaived aspect
`of the Mayo test.
`The second point we would ask the Board to bear
`in mind this morning in sifting through the evidence is to
`focus on that second prong of Mayo and Alice and look at
`what the Patent Owner did. Instead of offering a substantive
`detailed argument about why its claims are argued to provide
`something significantly more than abstract idea in the way the
`Supreme Court has taught us could make them patent eligible,
`Patent Owner's focus, it spends most of its time instead
`offering a series of mistaken arguments about preemption.
`Staying here on the table of contents, after
`spending three pages on introducing the second step of Mayo,
`it spends 10 pages talking about preemption, preemption
`under DDR, preemption under Mayo and Alice, and
`preemption based on its arguments about non- infringing
`alternatives.
`But preemption is not the test for Section 101
`eligibility. We know t
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