`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`RF CONTROLS, LLC,
`
`Petitioner,
`
`v.
`
`A-1 PACKAGING SOLUTIONS, INC.,
`
`Patent Owner.
`
`Patent No. 8,690,057
`Issue Date: April 8, 2014
`
`Title: RADIO FREQUENCY IDENTIFICATION SYSTEM FOR TRACKING
`AND MANAGING MATERIALS IN A MANUFACTURING PROCESS
`
`Cases No.: IPR2014-01536, IPR2015-00119
`
`PETITIONER’S REPLY TO PATENT OWNER’S
`RESPONSE TO PETITION
`
`
`
`Pursuant to the Scheduling Order entered in this case on March 30, 2015,
`
`Petitioner, RF Controls, LLC (“Petitioner”), provides the following Petitioner’s
`
`Reply to A-1 Packaging Solutions, Inc.’s (“Patent Owner”) Owner’s Response to
`
`Petition (the “Reply”). The Reply is timely filed on or before September 28, 2015,
`
`per the Due Date Appendix of the Scheduling Order.
`
`I.
`
`Introduction
`
`Patent Owner has effectively conceded that all elements of independent
`
`claims 1, 17, and 27 of U.S. Patent No. 8,690,057 (“the ‘057 patent”) are disclosed
`
`by Hofer, U.S. Patent No. 8,493,182, which properly incorporates by reference
`
`Bloy, WO 2009/035723 (together, “Hofer”). Patent Owner’s sole defense is
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`essentially that the Board was wrong to institute this proceeding because the
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`“inventory” tracking aspects of the ‘057 patent are supposedly entitled to
`
`patentable weight. However, that question is not properly before the Board and, in
`
`the case, the Board was plainly correct to institute the trial.
`
`A. Statement of Relief Requested (37 C.F.R. §§ 42.22-23)
`
`Petitioner respectfully requests that the Board enter an order finding that
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`Petitioner has established by a preponderance of the evidence that independent
`
`claims 1, 17, and 27 of the ‘057 patent are unpatentable under 35 U.S.C. §102 as
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`anticipated by Hofer, and ordering that independent claims 1, 17, and 27 of the
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`‘057 patent are cancelled.
`
`1
`
`
`
`B. Grounds for Review
`This inter partes review is a consolidation of two separate petitions for inter
`
`partes review: IPR2014-01536 (claims 1-16) and IPR2015-00119 (claims 17-30).
`
`The Board instituted the IPR2014-01536 trial as to independent claim 1, and joined
`
`with it review of independent claims 17 and 27 from IPR2015-00119. IPR2015-
`
`00119 was not separately instituted. The scope of the instant review is thus:
`
`(1) whether independent claim 1 is anticipated by Hofer under 35 U.S.C. §
`
`102;
`
`(2) whether independent claims 17 and 27 are anticipated by Hofer under 35
`
`U.S.C. § 102.
`
`II. Argument
`
`A. The Issue Of Whether The Inventory Tracking Aspects of the ‘057
`Patent Are Entitled To Patentable Weight Has Already Been Decided,
`And Is Excluded From Any Further Consideration In These
`Proceedings.
`
`Patent Owner’s Response can be reduced to one simple but erroneous thesis:
`
`the Board was wrong.
`
`By way of background, in its Preliminary Response to the Petition, Patent
`
`Owner offered little substantive argument distinguishing the elements of the ‘057
`
`patent from the disclosure of Hofer, other than the specific types of objects to
`
`which the RFID tags were attached differed. Prelim. Resp. 21 (“Neither Hofer nor
`
`Bloy is directed towards inventory management using RFID tags … but instead
`
`2
`
`
`
`deal with general methods of locating RFID tags.”). The Board found this
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`unpersuasive, concluding that the “inventory tracking aspects” of the ‘057 patent
`
`are an intended use, and not entitled to patentable weight. See, e.g., Paper No. 10,
`
`Institution Decision at 12-13 (March 30, 2015).
`
`Now, in its Response, the Patent Owner merely repeats its prior argument,
`
`which has already been rejected by the Board, on grounds that the Board was
`
`wrong. As a threshold matter, Patent Owner’s argument is procedurally improper,
`
`raising an appellate position in a trial proceeding. “In instituting a trial, the Board
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`will streamline the issues for final decision by authorizing the trial to proceed only
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`on the challenged claims for which the threshold standards for the proceeding have
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`been met.” Office Patent Trial Practice Guide, 77 Fed. Reg. 48756, 48765 (Aug.
`
`14, 2012) (emphasis added). “Further, the Board will identify, on a claim-by-claim
`
`basis, the grounds on which the trial will proceed. Any claim or issue not
`
`included in the authorization for review is not part of the trial.” Id. (emphasis
`
`added)
`
`The Board has decided the grounds on which this trial will proceed, and they
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`do not include the question of whether the inventory tracking aspects of the ‘057
`
`patent are entitled to patentable weight. Not only is this matter not included in the
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`Board’s authorization for review, it is excluded. Inst. Dec. 13-14. To the extent
`
`Patent Owner’s Response retreads this same ground, the Response and arguments
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`3
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`
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`presented therein should be disregarded. Given that the Board has instituted this
`
`trial and that Patent Owner has not presented any evidence or argument that any
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`element (other than the irrelevant “inventory” tracking aspect) of the ‘057 patent is
`
`not disclosed by Hofer, it is clear that Hofer anticipates claims 1, 17 and 27 of the
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`‘057 patent and the Board should issue an order cancelling those claims.
`
`B. The Inventory Tracking Aspects of the ‘057 Patent Have No Patentable
`Weight.
`Even assuming, arguendo, that the issue was properly before the Board (and
`
`it clearly is not), the inventory tracking aspects of the ‘057 patent are not entitled to
`
`patentable weight. Functional language in a system or apparatus claim is entitled
`
`to patentable weight only if it limits the structure of the claims so as to
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`differentiate the claimed subject matter from the prior art. See, e.g., In re
`
`Schreiber, 128 F.3d 1473 (Fed. Cir. 1997) (claim reciting a conical shape useful for
`
`dispensing popcorn was anticipated by prior art oil funnel); Bettcher Industries,
`
`Inc. v. Bunzl USA, Inc., 661 F.3d 629 (Fed. Cir. 2011) (functional language in
`
`claims are not entitled to patentable weight if the structure is already known).
`
`Further, where claims recite database objects that have no functional
`
`relationship to the computer system, but merely convey a message or meaning to a
`
`human user independent of the computer system, or merely serves as a support for
`
`information or data, no functional relationship exists. For example, in Ex Parte
`
`O’Sullivan, Appeal No. 2012-011855 (July 30, 2015), the Applicant’s sole basis
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`4
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`
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`for distinguishing his primary independent claim over the prior art was the
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`following limitation:
`
`comparing the parsed text to social bookmarks and associated
`
`metadata from a social bookmarking system and matching portions of
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`the content to respective ones of the social bookmarks and associated
`
`metadata, based upon the comparison
`
`The Examiner rejected the claim as non-functional descriptive matter on
`
`grounds that the “social bookmarking” aspects say “nothing about the functional
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`relationship of the element with the rest of the claimed elements that would
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`differentiate it from the prior art, such as any database,” rendering it non-functional
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`descriptive language. The Board agreed and upheld the rejection on appeal, noting
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`that the patentability depended solely upon the informational content of the recited
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`limitation. See also Ex parte Nehls, 88 USPQ2d 1883, 1889 (BPAI
`
`2008) (precedential) (“[T]he nature of the information being manipulated does not
`
`lend patentability to an otherwise unpatentable computer-implemented product or
`
`process.”).
`
`Here, the “inventory tracking” aspects of the ‘057 patent do no more than
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`recite a particular type of information manipulated, telling the Board nothing about
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`the functional relationship of this element with the rest of the claims. As the Board
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`has already concluded, the functional relationship is between the computer systems
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`5
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`
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`and the RFID tags being tracked. Inst. Dec. 13-14. Those elements are already
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`found in Hofer, as shown in the Petition and tacitly conceded by Patent Owner.
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`Whether an RFID tag is attached to an “inventory item” (as opposed to some other
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`non-inventory item) impacts only the nature of the information manipulated, not
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`how it is manipulated.
`
`Patent Owner admits as much in its response, distinguishing its claims on
`
`the (erroneous) contention that the type of information stored, accessed, and
`
`updated in the ‘057 patent is somehow unique to “inventory.” For example, Patent
`
`Owner contends that the mere fact that the “inventory tracking information” is
`
`stored in, retrieved from, and updated in, a computer memory “make[] an
`
`inventory tracking system different” in that this “tracks not only the location of an
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`RFID tag, but the identity/quantity/etc. of the items the RFID tag represents.”
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`Resp. 6. Similarly, Patent Owner contends that the “memory, access system, and
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`detection controller have an associated physical structure to facilitate updating of
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`inventory item information.” Resp. 7. But, just like the “social bookmarking”
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`limitation in Ex Parte O’Sullivan, there is nothing in the claims (or in Patent
`
`Owner’s Response) to explain how that physical structure for storing “inventory”
`
`item information differs from the physical structure for storing any other type of
`
`item information. That is, the claims do not recite any functional relationship that
`
`could differentiate “inventory” item tracking from any other type of item tracking.
`
`6
`
`
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`This can be further seen in that the term “inventory” is itself hopelessly
`
`vague, as it merely denotes a business classification for an item, not an inherent
`
`characteristic. The term fails to impart any meaningful distinction from item
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`tracking generally. Anything can be “inventory” in at least some context, and the
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`specific “inventory item information” cited by Patent Owner – “identity,”
`
`“location,” and “quantity” – are universal characteristics of all objects, and not
`
`unique to “inventory.” That is, every item one could track has an identity, a
`
`location, and a quantity (often merely “one”).
`
`For example, a carton of one dozen eggs is “inventory” while stocked on the
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`shelves of a grocery store, and it does not suddenly lose its “identity” or “location”
`
`or “quantity” when sold, and no longer “inventory.” The only characteristic of the
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`product that changes when it ceases to be “inventory” is its intended use: the
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`grocery store intends to sell it, and the buyer intends to consume it.
`
`Indeed, the
`
`members of this Board have an identity, location, and quantity, and would no
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`doubt object to being classified as “inventory.”
`
`Patent Owner further attempts to distinguish its claims by suggesting that
`
`certain other claim
`
`language becomes “confused and unworkable”
`
`if
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`“inventory” tracking is not given patentable weight. Resp. 10-11. Specifically,
`
`Patent Owner contends that if the “inventory” aspects are disregarded, what is the
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`“subset of the inventory item information” being accessed by the access system?
`
`7
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`
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`This question is answered in Patent Owner’s disclosure, which recites “an access
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`system that accesses the memory and provides at least a subset of the inventory
`
`item information for one or more of the inventory items to a user for determining
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`the current physical location of the one or more of the inventory items within the
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`inventory tracking region.” Ex. 1001, column 7, lines 24-29. The “subset” is thus
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`the detected location of the RFID tag. As with the rest of Patent Owner’s
`
`argument, this framing of the issue proceeds from the flawed and clearly erroneous
`
`assumption that the type of information accessed (identity, location, quantity, etc.)
`
`is somehow unique to “inventory,” when it clearly is not. Indeed, the word
`
`“inventory” could be omitted from this passage entirely without impacting the
`
`method described or the structure to perform it.
`
`There is nothing about tracking “inventory” data that requires a specific or
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`unique structure, nor is there any disclosure in the ‘057 patent suggesting any such
`
`thing. There is no indication of special circuitry on a motherboard or a unique
`
`platter arrangement in a hard drive, nor is any special programming required for
`
`storing, accessing, and updating inventory item information as opposed to any
`
`other item information. Certainly, the detection controller has structure for
`
`detecting and transmitting signals that are related to the location of the detected
`
`RFID tag but that structure is not special, unique, or otherwise functionally
`
`dependent upon whether the objects to which the tags are attached are “inventory.”
`
`8
`
`
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`Indeed, those elements are structurally identical even if the tags are attached to
`
`nothing.
`
`Stated simply, if Patent Owner’s position is accepted, given two structurally
`
`identical systems tracking the same objects and storing the same data about each,
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`one may infringe the ‘057 patent while the other may not, based solely on whether
`
`the object being tracked is “inventory.”
`
`The cases cited by Patent Owner are inapposite and distinguishable. Patent
`
`Owner chiefly relies upon an institution decision in Micro Motion, Inc. v. Invensys
`
`Systems, Inc., IPR2014-0039, a case involving flowmeters measuring the flow of
`
`materials through a tube. The claimed subject matter in that case included a
`
`“control system operable to modify [a] drive signal and thereby maintain
`
`oscillation of the flowtube during a transition of the flowtube from a substantially
`
`empty state to a substantially full state.” Micro Motion, Inc. v. Invensys Systems,
`
`Inc., IPR2014-0039, Inst. Dec. 5-6. The Board in that case held that the limitation
`
`was entitled to patentable weight because “[i]n order to modify the drive signal to
`
`maintain oscillation, the control system must have appropriate structure (e.g., a
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`programmed microprocessor) to achieve the claimed function.” Id. 8-9.
`
`This case is irrelevant to the instant matter, as Hofer clearly discloses the
`
`structure of the ‘057 patent’s tracking system – including a microprocessor
`
`programmed to store, access, and update information about the objects tracked via
`
`9
`
`
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`attached RFID tags. See, e.g., Ex. 1008, 9, 19. Patent Owner has never offered
`
`any contrary position or argument in this case, but rather distinguishes solely on
`
`the basis that the type of item information stored is somehow unique. However, as
`
`explained above, there is no specific structural component imparted by claiming
`
`“inventory” as opposed to any other type of object. The sole distinguishing factor
`
`Patent Owner offers is the type of information tracked. The claims at issue here
`
`are not at all like those in Micro Motion, and Micro Motion does not support Patent
`
`Owner’s position.
`
`Patent Owner also relies on IPR2013-00595, a case in which patentable
`
`weight was afforded to the bar code recognition capabilities of a bar code
`
`processing module. However, a bar code recognition module must have a specific
`
`structure, such as circuitry or program logic to recognize and distinguish bar code
`
`symbols from other descriptive material in image data. The analogous structure in
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`this case is not “inventory” item tracking, but rather the steerable antennas, which
`
`correspond to the bar code scanner, and the RFID tags attached to items, which
`
`correspond to bar codes on products. If this were the bar code case relied on by
`
`Patent Owner, Patent Owner would be taking the position that whether the bar
`
`code is attached to “inventory” can structurally distinguish one bar code scanner
`
`from another. This is plainly untenable.
`
`10
`
`
`
`Patent Owner string cites a handful of other cases without analysis or
`
`explanation, and these are likewise distinguishable in that the claims recite a
`
`functional limitation which imparts corresponding structure to an apparatus or to
`
`the performance of a method step. None of the cases stand for the proposition that
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`the type of data stored alone is patentable.
`
`C. Hofer Anticipates The Inventory Tracking Aspects of the ‘057 Patent.
`
`Finally, even assuming arguendo that the matter is properly before the
`
`Board (and it is not), and that the inventory tracking aspects are entitled to
`
`patentable weight (which they are not), Hofer anticipates them regardless.
`
`The claim chart in the Petition sets forth analogous structures in Hofer and
`
`Petitioner will not waste the Board’s time by repeating all such structures here, but
`
`a few deserve emphasis. First, Hofer discloses (by way of Bloy) that RFID tag
`
`readers may be used to “collect the identity of the RFID tags and therefore by
`
`association the identity of the item to which the tag is attached.” Further, Bloy
`
`discloses that RFID readers may be “configured as portals or gateways scanning
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`for the passage of RFID tags passing through, such as a pallet load of materials
`
`individually marked with RFID tags entering or leaving a warehouse for inventory
`
`feedback and control, providing an entry, presence and or exit signal tracking.”
`
`This plainly discloses an inventory tracking system, and that the “identity” of the
`
`item to which the tag is attached is tracked.
`
`11
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`
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`Second, Bloy further discloses a computer system “operatively coupled to
`
`the RF transceiver 12 and the electronic steering circuit 16” and that the computer
`
`system has “a data storage 26 … for storing a signal data record,” which includes
`
`“signal identification” that can be “the RFID tag identification or item
`
`identification.” Bloy further discloses that the physical location(s) of the detected
`
`radio frequency tag(s) are provided to the tracking system. Every object also
`
`inherently has a quantity – one. Hofer thus anticipates even the purportedly
`
`distinguishing characteristics of “inventory” upon which Patent Owner relies.
`
`D. Hofer Contains An Enabling Disclosure of Inventory Tracking
`Features.
`
`Finally, Patent Owner takes a second bite at the inventory tracking apple by
`
`arguing that Hofer does not contain an enabling disclosure of the inventory
`
`tracking aspects, and is therefore non-enabled.
`
`Again, as a threshold matter, this matter is not properly before the Board.
`
`The Board has already concluded that the inventory tracking aspects are not
`
`entitled to patentable weight and so even assuming arguendo that Hofer is not
`
`enabled with respect to inventory tracking (which it is, as discussed below), this is
`
`immaterial to the issues before the Board. See, e.g., Sony Computer Entertainment
`
`America LLC v. Game Controller Technology LLC, IPR2013-00634, Inst. Dec.
`
`(April 14, 2015) (the reference need only be enabled to the extent its disclosure
`
`anticipates the claimed invention). Moreover, the Board has already concluded
`
`12
`
`
`
`that Hofer is directed at least in part in inventory management, and instituted this
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`trial on the basis of this reference, effectively excluding the matter from the scope
`
`of these proceedings.
`
`Regardless, Patent Owner’s argument proceeds from the unsupported and
`
`demonstrably false statement that Bloy discloses inventory tracking in “just one
`
`sentence.” In the background section, Bloy recites the use of RFID tags in
`
`connection with “inventory feedback and control,” such as by tracking “a pallet
`
`load of materials individually marked with RFID tags entering or leaving a
`
`warehouse.” Ex. 1008. Bloy further recites that “This does not provide a specific
`
`location and/or direction of travel, other than by transient association between the
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`tags or tagged items and the location of the reader at the time of interrogation” and
`
`the disclosure of Bloy overcomes “a collective mindset in the signal acquisition
`
`and source location technology space that RFID technology in particular is
`
`applicable only with respect to gateway type exit/entry and or general presence
`
`detection and reporting function(s).” Patent Owner’s contention that Bloy “says
`
`nothing about implementing an RFID system to track inventory” is disingenuous.
`
`The entire Bloy disclosure is about implementing an RFID system to track
`
`inventory. The “inventory” aspects are not emphasized for the very reasons given
`
`by the Board in the institution decision: they aren’t entitled to patentable weight,
`
`and do not distinguish Bloy (or the ‘057 patent) from the prior art.
`
`13
`
`
`
`Moreover, Patent Owner offers no evidence in support of its conclusion that
`
`Bloy is not enabled as to inventory tracking. “A specification is not enabling if one
`
`with ordinary skill in the art cannot practice the claimed invention without undue
`
`experimentation.” In re Wands, 858 F.2d 731, 737 (Fed. Cir. 1998). A disclosure
`
`can be enabling even though some experimentation is necessary. Hybritech Inc. v.
`
`Monoclonal Antibodies, Inc., 802 F.2d 1367, 1384 (Fed. Cir. 1986). Factors
`
`relevant to a determination of whether undue experimentation would be necessary
`
`include: (1) the quantity of experimentation necessary, (2) the amount of direction
`
`or guidance presented, (3) the presence or absence of working examples, (4) the
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`nature of the invention, (5) the state of the prior art, (6) the relative skill of those in
`
`the art, (7) the predictability or unpredictability of the art, and (8) the breadth of the
`
`claims. In re Wands, 858 F.2d at 737. Enablement is found where one of ordinary
`
`skill in the art could have combined the publication's description of the invention
`
`with his or her own knowledge to make the claimed invention. Tandus Flooring,
`
`Inc. v. Interface, Inc., IPR2013-00333 (Dec. 8, 2014), citing In re Donohue, 766
`
`F.2d 531, 533 (Fed. Cir. 1985) (“Such possession is effected if one of ordinary
`
`skill in the art could have combined the publication's description of the invention
`
`with his [or her] own knowledge to make the claimed invention.”).
`
`Patent Owner has offered no evidence of any kind in support of these
`
`factors, and has therefore failed to carry its burden to prove non-enablement. See,
`
`14
`
`
`
`e.g., DealerSocket, Inc. v. Autoalert, LLC, Case CBM2014-00202 (Feb. 17, 2015)
`
`(rejecting enabling argument because “[movant] does not explain what amount of
`
`experimentation would be required of one with ordinary skill in the art, and why
`
`that amount of experimentation should be deemed undue, much less support such
`
`explanations with underlying factual evidence.”); Tandus Flooring, Inc. v.
`
`Interface, Inc., IPR2013-00333 (Dec. 8, 2014) (“we have not been directed to facts
`
`sufficient to show that [the] disclosure would not inform one of ordinary skill in
`
`the art how to make the claimed connector”).
`
`III. Conclusion.
`
`Patent Owner has now had two opportunities to distinguish its claims from
`
`the Hofer reference, and has not made any effort to do so, beyond doggedly
`
`insisting that the “inventory” classification of the tracked items matters, despite the
`
`Board’s unequivocal statement that it does not. Nowhere in the argument
`
`presented by Patent Owner is any significant analysis presented of the actual
`
`language of the claims at issue, nor any attempt to distinguish that language from
`
`Hofer. Patent Owner tacitly admits that its claim elements – to the extent they are
`
`entitled to patentable weight – are disclosed by Hofer.
`
`15
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`
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`Respectfully submitted,
`
`Lewis Rice LLC
`
`Dated: September 28, 2015
`
`/Michael J. Hickey #51,801/
`
`Michael J. Hickey
`Registration No. 51,801
`Attorney for Petitioner
`
`Customer Number: 22822
`Lewis Rice LLC
`Attn: Box IP Dept.
`600 Washington, Suite 2500
`St. Louis, MO 63101
`Tel: (314) 444-7600
`Fax: (314) 444-7788
`
`16
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`
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`Inter Partes Review of United States Patent No. 8,690,057 (IPR2014-01536)
`
`CERTIFICATE OF SERVICE
`
`Pursuant to 37 C.F.R. § 42.6(e)(1), I hereby certify that on this 28th of September,
`2015, a copy of the foregoing Petitioner’s Reply to Patent Owner’s Response was
`served by electronic mail on the following counsel of record for Patent Owner:
`
`Roger A. Heppermann (rheppermann@marshallip.com)
`
`Shawn M. Buchanan (sbuchanan@marshallip.com)
`
`Benjamin T. Horton (bhorton@marshallip.com)
`
`MARSHALL, GERSTEIN & BORUN LLP
`
`233 SOUTH WACKER DRIVE
`6300 WILLIS TOWER
`CHICAGO IL 60606-6357
`
`Dated: September 28, 2015
`
`/Michael J. Hickey/
`
`Michael J. Hickey
`Registration No. 51,801
`Attorney for Petitioner
`
`17