`
` Entered: February 24, 2014
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`AVAYA, INC., DELL INC., SONY CORP. OF AMERICA, and
`HEWLETT-PACKARD CO.
`Petitioners
`
`v.
`
`NETWORK-1 SECURITY SOLUTIONS, INC.
`Patent Owner
`____________
`
`Case IPR2013-00071
`Case IPR2013-00385
`Case IPR2013-00495
`Patent 6,218,930
`____________
`
`Held: January 9, 2014
`____________
`
`Before JONI Y. CHANG, JUSTIN T. ARBES, and GLENN J. PERRY,
`Administrative Patent Judges.
`
`APPEARANCES:
`
`ON BEHALF OF THE PETITIONER AVAYA, INC.:
`
`
`JONATHAN M. LINDSAY, ESQUIRE
`
`
`Crowell & Moring
`3 Park Plaza, 20th Floor
`
`
`
`
`Irvine, California 92614-8505
`
`
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`Cases IPR2013-00071, IPR2013-00385, IPR2013-00495
`Patent 6,218,930
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`
`ON BEHALF OF THE PETITIONER DELL INC.:
`
`
`THOMAS M. DUNHAM, ESQUIRE
`
`
`Winston & Strawn, LLP
`
`
`1700 K Street, NW
`
`
`Washington, DC 20006
`
`ON BEHALF OF THE PATENT OWNER:
`
`
`GREGORY DOVEL, ESQUIRE
`
`
`Dovel & Luner, LLP
`
`
`201 Santa Monica Boulevard, Suite 600
`
`
`Santa Monica, California 90401
`
`
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`The above-entitled matter came on for hearing on Thursday,
`January 9, 2014, commencing at 9:32 a.m., at the U.S. Patent and
`Trademark Office, 600 Dulany Street, Alexandria, Virginia.
`
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`P R O C E E D I N G S
`- - - - -
`JUDGE ARBES: Good morning, everyone. This is
`the oral hearing in Case IPR2013-00071 involving Patent
`6,218,930. Cases IPR2013-385 and 495 have been joined
`with this proceeding.
`Can counsel please state your names and who you
`represent for the record?
`MR. SANOK: Jeff Sanok for Avaya.
`MR. LINDSAY: Jonathan Lindsay for Avaya.
`MR. DUNHAM: Thomas Dunham for Dell and with
`me is Michael Scheer also for Dell.
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`MR. DOVEL: Good morning, Your Honors. I'm
`Greg Dovel. I represent the Patent Owner Network-1. With
`me is Charles Wieland.
`MR. HAWKINS: Your Honors, good morning.
`Charles Hawkins with Petitioner Hewlett-Packard Company
`from the law firm of McDermott Will & Emery. With me is
`Raymond Gabriel.
`MS. WEISENBERGER: Your Honors, Theresa
`Weisenberger from Finnegan on behalf of Sony.
`JUDGE ARBES: Counsel for the Patent Owner, is
`lead counsel present for the hearing today?
`MR. DOVEL: Yes, that's --
`MR. MUKAI: I'm sorry, Robert Mukai.
`JUDGE ARBES: Thank you. Per the Board's Trial
`Hearing Order in this case, three parties will be presenting
`arguments today. Counsel for Avaya will have 60 minutes.
`Counsel for Dell will have 10 minutes and counsel for the
`Patent Owner will have 70 minutes.
`The order of the presentation today is that Avaya,
`as the Petitioner, will present its case first regarding the
`challenged claims. The Patent Owner will then respond to
`Avaya's case and present its own case on the motion to
`amend. If Avaya reserves time for rebuttal, it can use the
`rest of its time to respond to the Patent Owner's case on all
`issues, and then we will hear from Dell, and Dell can use its
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`time to respond to Avaya's -- the Patent Owner's
`presentation on all issues.
`And, finally, if the Patent Owner has reserved time
`for rebuttal, it can address issues raised by either Avaya or
`Dell regarding just the motion to amend.
`Counsel, do you have copies of the demonstratives
`that you can provide to the court reporter and the panel
`today?
`
`MR. DOVEL: Yes, we do, Your Honor, would you
`like us to hand those to you now?
`JUDGE ARBES: Yes, please. Thank you.
`MR. DOVEL: This is the complete slides that were
`
`filed.
`
`JUDGE ARBES: One note we will have for the
`record is that the parties did, when they filed their
`demonstratives in the PRPS system, did call -- I believe
`called them both demonstrative evidence. We would just
`note for the parties that the demonstratives are not evidence
`themselves. They're just merely trial aids for the attorneys
`doing presentations today, so we'll correct the dates -- the
`titles of the documents in PRPS. You don't need to worry
`about that.
`Counsel for Avaya, you may proceed first.
`Would you like to reserve time for rebuttal?
`MR. LINDSAY: Yes, we would.
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`JUDGE ARBES: How much time would you like?
`MR. LINDSAY: We'll reserve approximately half
`of our time, 30 minutes.
`What we've given you there is a full set of the
`slides. We're going to be discussing probably not all of
`those, just a subset of those today, and we'll give you a copy
`of just the ones we discuss at the end. Thank you, Your
`Honors.
`So this is not a complex case that involves complex
`technology. It's about a scant patent that's barely three and
`a half columns in length and claims at issue without a single
`prior art rejection really. The Patent Owner cited a single
`reference during the prosecution process. It's called
`Jenneve, which is actually an ISDN reference, and we'll talk
`about that a little bit later.
`But as Judge Rich said, the name of the game is the
`claim, so we'd like to focus on the claim, Claim 6 in
`particular, and in particular what it requires, not what it
`might alternatively cover, which we might hear a lot about
`from the Patent Owner, but actually what it requires.
`The first thing it requires is providing a data node.
`This is a method claim. It requires providing certain
`components from a network, the data node, an access device
`and a data signaling pair that's connected to the two over
`which there's a transmission, data and power.
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`Well, Your Honors, that's exactly what Matsuno
`does, and what we're looking at here is Figure 5 from
`Matsuno. This is the third embodiment. Matsuno has about
`eight different embodiments that it describes, and this is one
`of them and we're going to focus on this one I think for the
`majority of our presentation today.
`Now, Matsuno provides those three network
`components. In particular, it has a data node right here.
`This is described as being a power supply circuit within the
`switching station, which is an ISDN switching station --
`JUDGE CHANG: Excuse me, counsel, just -- I'm
`sorry to interrupt you, but whenever you refer to your
`demonstrative, please on the record state the slide number so
`that way the transcript will be clear.
`MR. LINDSAY: Thank you. Thank you, Your
`Honor. Certainly. So we're looking at slide number 5. The
`previous slide is just an annotated version of the previous
`slide, which was slide 4.
`Okay. Now, the data node is connected to an access
`device, which is described as being a DTE, data terminal
`equipment 3 and NT1, network terminal 2. And connecting
`those two things is what Matsuno calls a subscriber line,
`which is a data signaling pair 12. So it's providing data
`node and access device connected with data signaling pair.
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`That's all that claim -- the providing step that Claim 6
`requires.
`Well, what else does Claim 6 require? Well, in
`particular, it requires the delivering of a low-level current,
`and what's important here is what it does not require. It
`does not require that every access device or every
`component of this network might receive this low-level
`current, only that the access device receive the low-level
`current, and that's what Matsuno does.
`Now, again, what we're looking at here -- this is
`Figure 5 again, same figure, and some text that describes it
`and that's blown up so we can read it a little bit easier today.
`Okay. But what Matsuno does is when there's a loss of local
`power, contact breaker -- and this is slide 10, by the way.
`The contact breaker point 8 closes. When that closes -- this
`is the contact breaker point right there. When that closes,
`there's a DC loop formed, current flows. Current flows from
`the data node to the access device, just as in the delivering
`step.
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`Now, Avaya believes that's a low-level current and
`we're going to drill down on that a little bit in a moment, but
`for right now we can say certainly it is a current and it is a
`low-level current.
`What else is required? Well, sensing. Sensing a
`voltage level on the data signaling pair. Again, what's
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`important here is what it does not require. It does not
`require sensing multiple voltage levels, although that may
`certainly be within the scope of the claims. It's not for us to
`decide here today. All it requires is a voltage level de-sense
`and that would be on the data signaling pair, and that's
`certainly what Matsuno does as well.
`Here we're looking at slide 11 and a description,
`again, on figure 5 a little further down where it talks about
`what happens after those breakers close. What happens after
`those breakers close is a subscriber line 12, a voltage is seen
`at both terminals of the constant current circuits. Okay.
`That's a voltage being sensed, and that is obviously on the
`subscriber line 12, which is, of course, the data signaling
`pair. So the sensing step is satisfied.
`Now, the terms there in red, we're going to talk
`about those in some more detail and what on the data
`signaling pair means. So Avaya's position is that it is
`satisfied as well.
`The next step, backing up one, is controlling power,
`controlling power based on a preselected condition of
`voltage level. Again, Matsuno does that. Now we're going
`to go to slide 12. Again, we're looking at figure 5 again,
`annotated version, showing some text that describes what
`happens.
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`Well, what happens is once the voltage is at or
`above a set level, right, that is our preselected condition.
`The voltage detection parts detect that voltage and the
`contact breaker point controls power. It controls power by
`switching from a high-power source -- it switches to the
`high-power source from the low-power source. Totally the
`step is satisfied.
`Now, there are three terms up there in red, which
`we'd like to talk about briefly that have been the subject of
`some discussion in this proceeding. First is low-level
`voltage. So we can go and discuss the fact that Avaya and
`its expert, Dr. Zimmerman, have applied the Board's
`construction. The low-level current is sufficiently low that,
`by itself, will not operate the access device. The Patent
`Owner, however, Dr. Knox has refused to apply that
`construction and, instead, has proposed a much narrower,
`unsupported construction.
`What they believe you should add to their
`construction is that it will not operate the access device at
`any data signaling pair length. That's different, by the way,
`than any other construction that we've seen the Patent Owner
`argue in their papers that have been discussed in previous
`litigations. It's certainly the first time that we've seen that
`and it has nothing to do with the broadest reasonable
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`interpretation. That is a selected limitation for the sole
`purpose of avoiding Matsuno.
`JUDGE ARBES: Counsel, how do we deal with a
`reference, like Matsuno, that does not disclose the length of
`a data signaling pair?
`MR. LINDSAY: Well, we look at the construction
`that the Board has selected and see if Matsuno satisfies that.
`Matsuno does satisfy that, because we know from what it
`tells us that it has to switch to the higher voltage power
`supply in order to provide minimal communications to the
`access device. So it's telling you it's not enough.
`JUDGE ARBES: But isn't it the case in Matsuno
`that at a certain data signaling pair length it may be
`sufficient and at another data signaling pair length it may
`not be as the Patent Owner argued?
`MR. LINDSAY: We don't believe that's what
`Matsuno supports and Dr. Zimmerman has explained that
`based on the amount of voltage drop that Matsuno tells us
`occurs when the high-voltage power supply is being applied.
`We can similarly expect to see the same voltage drop with
`the low-power supply and you would only get on the order of
`about eight volts available at the NT1 and DTE, which
`would be insufficient to power those access devices.
`JUDGE ARBES: And is that making a particular
`assumption as to what the length would be, then, or --
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`MR. LINDSAY: Well, it's reading the express
`voltage drops that Matsuno tells us. He tells us that when
`you apply the 120 volt, you only have on the order of 80 to
`85 volts available and then, of course, that drop is a function
`of two things. It's a function of the length of the subscriber
`lines. So implicit in that number is that subscriber line
`length and the efficiency of the power supply itself. So
`neither of those two things will change when you switch to
`the low-power supply, and that's why Dr. Zimmerman
`concludes that you would have on the order of eight volts.
`So why did this construction get selected? Well,
`Network-1 had to admit that there were at least some devices
`in Matsuno that could not operate at the negative 48-volt
`level. Not even Dr. Knox could construct a set of
`assumptions in which an ISDN subscriber loop that was out
`at the design length of, say 18,000 feet would be operable
`using these 48 volts.
`Now, of course, as we mentioned ago, Avaya
`believes based on Dr. Zimmerman's testimony that none of
`the devices, regardless of length, would be operable in that
`case, and we talked about the eight volts and that being
`available.
`But in order to avoid Matsuno in the face of that
`admission that there are at least some devices out there that
`might be operated -- that might not be operable, Network-1
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`had to add this limitation, basically requiring that every
`access device that's connected to the network be inoperable
`using that low-level current regardless of how far the device
`might be located, the implication being that Matsuno's closer
`devices are apparently inadvertently being operated with that
`low power, but there's no such requirement in the claims nor
`is there any support for that construction in the specification
`and, frankly, the Patent Owner wanted their claims to mean
`that, and if they believe there was support for that, they
`could have amended their claims to say that.
`Next, we're going to look at slide 22. Now, as we
`mentioned ago, Network-1 admits that there are at least
`some access devices that would not be operated using
`low-level power. This is in the Patent Owner response. One
`skilled in the art would understand the primary reason for
`the higher power would be to allow higher-power NT1s and
`DTEs to operate at full functionality over the long
`subscriber loop lengths.
`Again, their admission is at least some devices are
`being operated -- are not being operated with that low-level
`power. That admission alone is dispositive, because, as the
`Board noted, it's the specific current in Matsuno and a
`specific device in Matsuno which is pertinent to this
`analysis.
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`JUDGE ARBES: Counsel, if you can go back to
`slide 22 for a second, it seems to me that all the Patent
`Owner has admitted is that they would operate at full
`functionality. Is that -- how do we reconcile that with the
`Board's construction of just operation? Is there a difference
`between operation and operation at full functionality?
`MR. LINDSAY: There is no reason to suggest in
`Matsuno that there is and this is, again, the Patent Owner
`response and their position that there are some devices that
`are not going to be operated at these far distances. Dr. Knox
`has admitted that.
`Now, to the extent that there might be levels of
`functionality, again, we look at Matsuno what it's trying to
`do and it's trying to provide minimal communications, and
`we believe that, you know, that's what the dividing line
`really is, is whether it's being operated according to the
`minimal communication standard or not and Matsuno has to
`switch to that higher power at the end of the day in order to
`do that.
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`JUDGE ARBES: So it's the Petitioners' position,
`then, that minimal communication is operation and
`everything below that is not operation.
`MR. LINDSAY: I think that's the way Matsuno is
`-- would be read fairly.
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`So if there are no more questions on -- oh, actually
`I do want to talk about this slide briefly, and this is what
`Matsuno tells us about switching to the power supply. This
`is slide 20, paragraph 4 from Matsuno where it talks about
`switching to the aforementioned station power supply occurs
`-- again, the remote power -- occurs with the shutdown of
`local power and that power is sufficient to allow minimal
`communications to the terminal 103 and it's thus supplied.
`So it wasn't being supplied until you had that switch.
`So now we're going to take a look at a new figure.
`This is Figure 11 and this is paragraph 4, another part of
`paragraph 4 from Matsuno, and this is slide 15. Now, what
`we see here is we see this reference of a DC voltage of 40
`volts and there's been some discussion about whether that 40
`volts is sufficient to operate the access device, so I'd like to
`talk a little bit about that.
`Now, first of all, what this paragraph here is
`describing is that that 40 volts is a prescribed voltage. It's a
`converted voltage from the local power supply. This has
`nothing to do with the remote power supply. It's being
`applied down here by the local power supply 111 at the S/T
`point right there. Okay. So we -- it does not, however, have
`anything to do with the U point.
`Okay. The fact that 40 volts is being provided by
`the local power source at DTE tells us nothing about the
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`current. It also tells us nothing importantly about what
`voltage you have to see at the U point in order to get that 40
`volts. Because as Dr. Knox has testified, the NT1 itself
`consumes voltage. It consumes a minimum of 28 volts, and
`he has a series of calculations he goes through to get to the
`point where in his very generous assumptions he believes
`there's 41 volts available at the U point.
`Well, if there's 41 -- 41.2 volts to be specific, if he
`believes there's 41.2 volts available at the U point, the NT1
`is consuming power, we do not get 40 volts at the S/T point,
`which is what this 40 volt is being applied to.
`So I'm looking at slide 16 now, and this is a quote
`from the Board, indicating that Network-1 has not
`sufficiently explained the current that's being provided by
`that 40 volt. That position, that concern, remains
`unaddressed. We do not know what that is.
`JUDGE ARBES: Counsel, the statement that you
`point to there was in response to an argument that I believe
`they made in the preliminary response. How do we deal
`with at this point looking at that 40 volts, how do we
`determine if the current there is sufficient or not based on --
`it seems to us to be perhaps an apples to oranges comparison
`here where the reference only speaks about 40 volts. How
`do we determine if the current resulting from that is a
`low-level current or not?
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`MR. LINDSAY: Well, actually you don't have to.
`You don't have to because two reasons. One, Matsuno tells
`us that you have to switch to the high-power supply to power
`the access device, number one. Number two, what Matsuno
`is trying to do -- again, we are comparing apples to oranges
`in the sense that this is a local power supply, the implication
`being that it's providing power to both the NT1 and the DTE.
`When you're providing remote power and you want
`to provide minimal communications, you have to power both
`the NT1 and the DTE. So the current that may be provided
`by that 40 volt to just the DTE is not representative or
`significant for purposes of the analysis, because you have to
`provide a sufficient current for both the NT1 and the DTE in
`order to provide minimal communications.
`JUDGE ARBES: Okay. So you're saying, then, that
`the access device is the combination of both, then, rather
`than just one.
`MR. LINDSAY: So there's two issues, Your Honor.
`As the claim is drafted, an access device is extremely
`broadly worded. It is a device that's connected to a data
`node, engages in data transmission and receives power over
`the same lines.
`Under those terms, either the NT1 or the DTE will
`do that. It would be receiving power from the data node and
`it would have communications. In the case of NT1, it's a
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`pass-through device. But when you consider what Matsuno
`is trying to do and consider what he's trying to operate, he's
`trying to provide minimal communications.
`You have to power the DTE in order to do that.
`That's the communication device, if you will. The NT1 also
`has to be powered, however. Because if you're not powering
`it, you can't power -- you can't plug a DTE into an NT1 that
`itself is not plugged in, to use that term. You wouldn't be
`providing this minimal communications.
`So for purposes of determining what a low-level
`current is and whether it's insufficient or not to operate the
`device, you have to consider what you're trying to operate.
`In this case you're trying to operate the DTE, and that's a
`function of the construction. And, again, the breadth of the
`way the claim is drafted that leads one to see that an access
`device in the claim can be either, but for purposes of
`whether the low-level current is truly insufficient, one must
`consider both the NT1 and DTE.
`JUDGE ARBES: So the question then becomes
`whether that 40 volts is sufficient to power both devices,
`then. The parties obviously dispute that.
`MR. LINDSAY: Well, certainly it would be a
`question. First of all, we know that the 40 volts is coming
`out of the NT1 being provided to the DTE, right. The NT1
`itself is plugged in. It's receiving a local power supply of
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`110 volts itself. So it is providing some potential that's
`driving a current to the DTE, but we don't -- but that current
`by itself, it says nothing about whether it's sufficient to also
`power the NT1, because the NT1's current is being received
`directly from the wall.
`So the next limitation that we have there in red that
`we'd like to talk about today is the on the data signaling pair
`limitation. This is slide 24. The Board has proposed a
`construction here for what it means and it means sensing a
`voltage at a point on a pair of wires used to transmit data.
`Now, Avaya and its experts have applied this
`construction to the claims and found that Matsuno
`anticipates claims. Network-1, however, and its expert,
`again, have refused to apply this construction. Rather,
`Network-1 argues that the voltage has to be the same on both
`wires and the current has to be delivered in common mode.
`This is a construction that's selected not with the broadest
`reasonable interpretation in mind, but, again, with a specific
`intent trying to avoid Matsuno, which they argue provides a
`current in differential mode as opposed to common mode.
`Well, the claim itself never restricts to how voltage
`is sensed nor is common mode ever used or discussed in the
`'930 patent. And as we talked about a moment ago with
`respect to low-level current, if the Patent Owner wanted its
`claims to say that, then they could have proposed an
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`amendment that would have said that, again, assuming they
`believed their support for that.
`Now, this is slide 25. This is, again, our Figure 5
`and an annotated version of it to show how the current is
`being sensed on the data signaling pair. I've highlighted the
`two sense points here and that that sense point -- well, here
`we have a voltage detection part. It's coupled here. We
`have voltages at both terminals of the constant current
`circuits, a terminal there, a terminal there. That voltage is
`the same as that voltage. So we are sensing a voltage on the
`data signaling pair. One wire is the other wire of the data
`signaling pair.
`JUDGE ARBES: But, counsel, those two voltages
`are different, right?
`MR. LINDSAY: Those two voltages in Matsuno
`would be different. This voltage would be different than
`that voltage, that's correct.
`JUDGE ARBES: So if we have a situation where a
`pair of wires and the voltages are two different voltages and
`the claim requires sensing a voltage level on the data
`signaling pair, which one would it be? How do you
`determine which one is the right one to sense a voltage level
`on the pair?
`MR. LINDSAY: You could use either and achieve
`the purpose of Matsuno as well as meet the limitations of the
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`claim, which only requires sensing a voltage level on the
`data signaling pair. In this case the voltage you sense would
`be relative to ground. In this case the voltage that you sense
`would be relative to some known reference. And either way
`you would have a meaningful voltage measurement that you
`could then use, as Matsuno does, to carry out the controlling
`step.
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`So the next slide I'll look at here is a discussion of
`this sensing across and sensing on. This is slide 75 and it's
`some testimony from Dr. Zimmerman where he was asked
`about this concept of on versus across. So he was asked the
`ordinary customary meaning of sensing. On is different than
`sensing across, correct? And he said, as I said before -- he
`was asked this question many times -- across is a specific
`case of sensing on, in the ordinary customary meaning.
`Sensing on is the broader term. Sensing across is the
`narrower term.
`So even if you conclude that Matsuno senses across,
`which in Figure 5 is not the case -- I should mention here
`Matsuno has numerous different embodiments, some of
`which he is measuring voltage difference and some of which
`he's measuring on one wire or the other.
`And so we see here that this would meet the claim
`limitation, even if Matsuno was sensing across, and actually
`I'll point out here that on is not a technical word. There's a
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`lot of technical meaning being implied into this word. It's a
`plain and ordinary word and one of ordinary skill in the art
`would know that you're trying to sense a voltage at a point
`on one of those wires.
`And also Dr. Knox himself told us there was
`nothing special about sensing a common-mode voltage,
`particularly when asked the question about, you know,
`nothing being inventive about differential mode versus
`common mode, and he said, one of ordinary skill in the art at
`the time would understand how to do that, that being
`measuring the voltage on either a common mode or a
`differential mode circuit. So this is really not about
`broadest reasonable interpretation. It's about avoiding
`Matsuno.
`The next term that we're going to talk about briefly,
`Your Honors, is the data network limitation. There's been
`some discussion about this as well. ISDN is a data network,
`integrated services digital network. Here is a diagram. This
`is slide 28. Here's a diagram taken from the book that Dr.
`Knox himself has described as being authoritative on the
`subject of ISDN.
`Okay. And the next slide is the annotated version
`of this and it's slide 29. And you see that this is an ISDN
`subscriber loop. You've got computers that are
`communicating here, and part of this integrated services
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`digital network is a packet switched data network. ISDN is
`a data network in Matsuno's ISDN reference.
`So one other point to make here is Dr. Knox himself
`in previous litigation characterized the Jenneve reference --
`we mentioned this earlier -- is an ISDN reference. This is
`the one and only reference that they cited to the Patent
`Office, and in describing Jenneve, he said, Jenneve teaches a
`method for remotely powering access equipment in a data
`network. He described an ISDN reference himself as being a
`data network.
`The other part of ground one in this case is the
`anticipation of Claim 9 by Matsuno. So we look at Claim 9
`and what it requires. It requires a step, a step of continuing
`to sense voltage level and a decreased power from a
`secondary power source. A voltage drops on the data
`signaling pair. This indicates removal of the access devices.
`Now, that's exactly --
`JUDGE PERRY: Counsel, excuse me, why does
`that happen, why does the voltage drop when the device is
`removed?
`MR. LINDSAY: Well, the '930 patent does not
`explain why the voltage drops when the device is -- it
`provides very little disclosure on that point. We're left to
`largely guess as to what that might be. And if you open the
`circuit, if you remove a device that's otherwise plugged in
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`and you open a circuit, voltage would drop then on that
`circuit is what -- you know, is what would happen in the
`case of Dr. Zimmerman opining about Figure 5, for example.
`But, you know, it's a good question, Your Honor, because
`the patent is not clear on that point.
`JUDGE PERRY: So if you remove a load, the
`voltage goes up or down?
`MR. LINDSA