`571-272-7822
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`IPR2015-01973, Paper No. 24
`December 6, 2016
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`RECORD OF ORAL HEARING
`UNITED STATES PATENT AND TRADEMARK OFFICE
`- - - - - -
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`- - - - - -
`EMERSON ELECTRIC CO.,
`Petitioner,
`vs.
`SIPCO, LLC,
`Patent Owner.
`- - - - - -
`Case IPR2015-01973
`Patent 8,013,732 B2
`Technology Center 2600
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`Oral Hearing Held Friday, October 28, 2016
`
`Before: LYNNE E. PETTIGREW, STACEY G. WHITE, and
`CHRISTA P. ZADO, Administrative Patent Judges.
`The above-entitled matter came on for hearing on Friday,
`October 28, 2016, at 2:00 p.m., Hearing Room A, taken at the U.S. Patent
`and Trademark Office, 600 Dulany Street, Alexandria, Virginia.
`REPORTED BY: RAYMOND G. BRYNTESON, RMR,
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`CRR, RDR
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`APPEARANCES:
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`ON BEHALF OF THE PETITIONER:
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`DONALD L. JACKSON, ESQ.
`WALTER DAVIS, ESQ.
`WAYNE HELGE, ESQ.
`Davidson, Berquist, Jackson & Gowdey LLP
`8300 Greensboro Drive
`Suite 500
`McLean, Virginia 22102
`571-765-7700
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`ON BEHALF OF THE PATENT OWNER:
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`DR. GREGORY J. GONSALVES, ESQ.
`The Gonsalves Law Firm
`571-419-7252
`gonsalves@gonsalveslawfirm.com
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`P R O C E E D I N G S
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`(2:00 p.m.)
`JUDGE WHITE: Thank you again for your
`flexibility with dealing with the scheduling of these
`proceeding. I do appreciate the parties having to go out of
`their way to travel back and forth, and I appreciate the time
`you have taken taking care of that matter for us.
`Good afternoon. This is the oral hearing for
`IPR2015- 01973 for Patent Number 8,013,732 B2, between
`Petitioner, Emerson Electric, and Patent Owner, SIPCO.
`I'm Judge White. With me again are Judges
`Pettigrew and Zado. Let's have appearances.
`MR. JACKSON: Good afternoon, Your Honor.
`This is Don Jackson of Davidson, Berquist, Jackson &
`Gowdey on behalf of Petitioner, Emerson. And with me is
`Walter Davis of the same firm, and Ted Plunkett, who is the
`client representative from Emerson, and then also we have
`Wayne Helge of the same firm.
`DR. GONSALVES: My name is Dr. Gregory
`Gonsalves. I'm representing the Patent Owner. With me is
`the founder of the company, Mr. Petite, and he is also the
`inventor of the patent that is at issue in this IPR.
`Also with me, who you met this morning, is Eva
`Gonsalves, and she will be helping me with the presentation
`today.
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`JUDGE WHITE: Well, again, for this matter we
`will have 45 minutes per side. How much time would you like
`to reserve for rebuttal?
`MR. JACKSON: I will reserve 15 minutes.
`JUDGE WHITE: 15 minutes.
`MR. JACKSON: Thank you.
`JUDGE WHITE: Do you have any questions at
`this time or should we get started? All right. You may begin.
`MR. JACKSON: I'm going to have to learn to
`work to the left as opposed to the right.
`JUDGE WHITE: We're always throwing obstacles
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`at you.
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`MR. JACKSON: So similar to this morning, I'm
`going to start with some claim construction issues. The first
`one has to do with the term function code. The function code
`in the '314 -- I'm sorry, that's this morning's patent -- in the
`'732 patent, function code is used to describe two different,
`somewhat different concepts.
`Function code is used to describe, well, function
`code in one sense is used in messages that are being sent from
`the sensors or the actuator side of the system back toward the
`gateway. And in that case, there is an example in the patent
`where there is a thermostat shown and there are function
`codes in the figure associated with the thermostat device.
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`One of the function codes corresponds to the
`temperature, for example, that the thermostat is measuring.
`And in that situation the patent describes that the function
`code corresponding to that particular type of data is put into
`the message, and then presumably payload includes the value
`corresponding to the temperature that is being measured by
`the thermostat.
`That message goes from the sensors back to the
`gateway. But, importantly, the '314 patent also describes a
`function code that is used on the opposite side of the system.
`So it states -- and let me just go ahead and put what I believe
`to be the relevant part here of the specification on the
`document camera.
`JUDGE WHITE: What column?
`MR. JACKSON: This is column 11, lines -- what I
`have highlighted is 51 to 54. What the specification teaches
`is that on the gateway side of the system you can also have a
`lookup table, and the lookup table includes on the one hand
`the function codes and on the other side of the lookup table it
`also includes what it describes here as a plurality of code
`segments.
`So when the message is received by the gateway,
`that function code in that message can be used to correlate to
`certain code segments that are stored in the gateway. The
`specification states that the code segments are executed by
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`CPU 422, which is in the gateway, and which largely control
`the operation of the computer.
`Now, the reason that is important is because in
`Patent Owner's briefing, when they tried to argue that we
`misinterpret the term function code and so forth, they have
`been focusing on what happens at the sensor actuator side of
`the system. This portion of the specification tells us
`something about function codes and how they are used on the
`gateway side of the system.
`This lines up exactly with the way function codes
`are used in Burchfiel. And that's why this is so important. In
`fact, this is almost identical to the way Burchfiel works.
`There is a function code that's embedded in a message that's
`sent from the sensor actuator from the transceiver side bands,
`and is sent back to the gateway.
`The gateway uses the function code in the
`message, goes to the lookup table 425, says I'm supposed to
`execute this code segment, execute code segment, execute
`some sort of software routine. And the CPU executes that
`code segment and that controls in some way the operation of
`the computer.
`JUDGE WHITE: So are you now asking for a
`specific construction of function code, because all that you
`had in the petition was that a function code should be
`construed as a code corresponding to a function or condition?
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`MR. JACKSON: You are correct, Your Honor, and
`that construction largely came out of District Court litigation
`where this issue had been litigated between the Patent Owner
`and other parties, and we thought, using a broadest reasonable
`interpretation, that was fine.
`I guess really this is more an issue of -- in a sense
`it is claim construction but it is really in the way that the term
`is being applied. They are arguing that we are trying to apply
`the term function code to Burchfiel in a way that is not
`supported by the specification of the '732 patent.
`And what I'm trying to point out is, no, actually
`the way the '732 patent uses the term function code, it uses it
`at two different ends of the system, and on the one end of the
`system corresponding to the gateway it is being used exactly
`the way Burchfiel uses the function field in its messages.
`JUDGE WHITE: To the extent this is claim
`construction, though, isn't this late?
`MR. JACKSON: Well, we didn't get their position
`until their Patent Owner response, well, certainly after we
`filed the petition, which is where we laid out our claim
`construction arguments. I don't recall if they had this specific
`argument in their preliminary response or not.
`But either way we didn't have the chance to
`respond to that. And really this is more of an application of
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`the way that you should -- I think, honestly, if you take our
`construction, it is broad enough to encompass both situations.
`So if you apply the construction that we have
`proposed, which I think is the broadest reasonable
`construction, then you will include, you will encompass, both
`Burchfiel, the Burchfiel side of things, you know, where it is
`talking about what happens at the station in Burchfiel, but you
`also encompass what the '732 patent describes as happening in
`the sensor actuator side of the system.
`So claim construction, I think we should go with
`the broadest construction that we proposed here. I don't
`really think that the Patent Owner has challenged our
`definition per se. I think that all of their arguments instead
`have implicitly challenged it as being too broad because we
`are encompassing what is in the prior art.
`I don't think the construction itself is too broad. I
`think it is appropriate. And maybe this falls more in the
`category of let's match the claims to the prior art. But
`because it is focused on what the specification says about that
`term and the way it is used, I put it in the category of claim
`construction. Your Honor, you may be right. It may not
`belong under that category.
`JUDGE WHITE: Well, to the extent it is an
`argument as to how the claim language should be applied to
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`the art, could you point me to where you are making the same
`argument at least in the reply, if not in your petition?
`MR. JACKSON: Sure. Certainly. Let me skip
`down in my outline. Well, do you want to know where it is in
`the paper or where it is in the reference?
`JUDGE WHITE: In your papers.
`MR. JACKSON: Okay. We certainly implicitly
`addressed the issue by taking the construction we proposed in
`the petition and applying it to Burchfiel. But certainly in the
`Petitioner's reply -- I don't have the paper number handy,
`Your Honors.
`JUDGE WHITE: I have your reply. I'm looking at
`it right now.
`MR. JACKSON: On page 5, the heading A reads:
`Burchfiel discloses "function codes." And so in this section,
`this is where we show that function codes, you know, they call
`it a function field in Burchfiel, but the function field in
`Burchfiel discloses the claimed function codes.
`And if there is something specific you want me to
`identify in this section, I'm happy to look for it.
`JUDGE WHITE: Okay.
`MR. JACKSON: So if I could, Your Honor, in, it
`looks like, it's the paragraph that starts at the bottom of page
`6 and goes over to page 7. It is the last paragraph in the
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`section. We talk about how Burchfiel works in the beginning
`part of this paragraph.
`At the end of this paragraph is where we actually
`used the same -- it is part of the specification, it is re-quoted
`here in the Petitioner's reply, and that is where we are linking
`the way function codes are used in the '732 patent to the way
`it is disclosed in the Burchfiel reference.
`So I've kind of jumped ahead in my outline, but
`that's fine. The other -- and I'm just going to real quickly
`touch on this -- the other claim construction issue or what I
`called claim construction issues initially is with respect to the
`term sensor. Sensor, the construction we proposed was an
`equipment, program or device that monitors or measures the
`state or status of a parameter or condition and provides
`information concerning the parameter or condition.
`And this was a construction that was adopted in
`the SIPCO vs. ABB case some number of years ago by the
`Eastern District of Texas. Subsequently it is true that a later
`court looked at the briefing the parties put forward in that
`case with respect to the term sensor. And the court in that
`case did not agree that the term equipment or program was
`supported by the specification and, therefore, took those two
`pieces out of the definition.
`It's not fair to say that that later court overrode the
`earlier court as SIPCO has argued. Two different
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`constructions by two different courts. We think the first one
`is more appropriate. As we mentioned in our briefing, if we
`take the word equipment out, I don't think that makes a
`difference. Both the words equipment and device connotate a
`hardware structure.
`Program was taken out by the second court and
`program is what SIPCO would like to not have included in the
`construction here in this proceeding. Program, as we went
`through in our brief, is pretty clearly, we think, part of what
`is going on in the '732 patent with respect to the sensors.
`They talk about certainly hardware sensors but
`also there is discussion about programs or software features
`that are making measurements that are used with the sensors
`or used as part of the sensors. And so we think it is not
`appropriate to remove those features from the definition of
`sensor.
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`And specifically I don't have a -- actually I do, I
`think. Actually I don't think either of these quotes I'm going
`to get to in just a minute.
`But what we have cited here is column 9, lines 29
`to 38. It explains, the '732 patent explains that the sensors
`can communicate with the transceiver using digital
`communication, and the digital communication certainly
`suggested that there are data packets or other digital messages
`being exchanged between the sensor and the transceiver, and
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`that the data packets are assembled -- the data packets that
`end up being broadcast by the transceiver are assembled by
`the digital processor that is in the transceiver, and digital
`processors operate using a program. Right? I mean, that is
`kind of inherent in the whole thing.
`And so this digital processor that is working in the
`transceiver is receiving these digital messages from the
`sensor, using those messages -- using that data that it is
`receiving to formulate the packets that are broadcast.
`And so the program that is part of the operating
`system or the software that is running that digital controller is
`reading the messages that are coming from the sensor,
`interpreting them, reformatting them, so as to be rebroadcast
`through the radio portion of the transceiver. So for that
`reason we think that the -- it would be improper to exclude
`program from the definition of sensor.
`That digital controller, keep in mind, is doing a lot
`more than just sensing. It is receiving messages from other
`nodes, rebroadcasting the messages, reading the messages
`itself. It also in certain embodiments is interfacing with an
`actuator.
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`So it's not just a -- it would be one thing if it was
`a digital controller that was just dedicated to the sensor. In
`that case maybe you say, okay, that's a hardware piece. But
`because what it is doing is -- it has multiple functions,
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`multiple roles in the transceiver. Only one of those roles is
`interfacing with the sensor or is part of the sensor. Therefore,
`we think that the software that would be executed by that
`controller shouldn't be considered to be part of the sensor.
`JUDGE WHITE: Is it your position that the sensor
`is an inventive sensor or would this just be the ordinary
`meaning of a sensor?
`MR. JACKSON: It is the ordinary meaning of a
`sensor. I don't think there has been any claim by either side
`that what the inventors here came up with was a novel sensor
`or a novel actuator. Those are part of the admitted prior art.
`It is something that is discussed in the background of the
`patent as being something that was out there.
`It's part of a system that had certain deficiencies
`that the invention of the patent supposedly, you know,
`addresses. So I don't think anybody would argue that the
`sensors themselves or the actuators themselves, for that
`matter, are novel in any fashion.
`JUDGE WHITE: And you just mentioned admitted
`prior art. One of the things that Patent Owner took issue with
`was the characterization of certain aspects in the specification
`as admitted prior art.
`So I would like to hear your response as to these
`sections that they have said are not part of the APA.
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`MR. JACKSON: I want to get their list in front of
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`me.
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`JUDGE WHITE: I've got it in front of me.
`MR. JACKSON: I'm sorry?
`JUDGE WHITE: I've got it in front of me.
`MR. JACKSON: Do you see a page?
`JUDGE WHITE: Page 19 of the Patent Owner
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`Response.
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`MR. JACKSON: Okay. There you go, okay. So
`let me address that. So as the Petitioner -- well, let me just
`state for the record that as a Petitioner, and I think we've
`identified this certainly in our reply, but I think also in our
`petition, we think that the -- and then I'm going to address
`specifically the list but let me just put this out there.
`The admitted prior art in our view begins at
`column 1, line 54, and extends over to column 2, at least to
`line 46. That's all in the background of the patent. It is all
`describing, I mean, to use their own words, you know,
`existing systems and so forth. That is one section.
`Then there is a figure, figure 1 in the patent that is
`also labeled prior art, so that constitutes admitted prior art.
`And then the text that's associated with figure 1, so that text
`starts on column 5, line 32 and goes down to the same column,
`line 61. That's all in our view the admitted prior art.
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`You will notice that the first two bullet points in
`their list of improperly-identified prior art fall within those
`two sections. So the column 2, lines 34 to 47, it is right in
`the section labeled Background where they are discussing the
`prior art systems. So I don't see how that could possibly not
`be considered part of the APA.
`And then in column 5, lines 48 to 61, again, that's
`the very end of the section I identified in column 5. And all
`that relates to describing what is happening in figure 1, which
`is labeled prior art. So I think the first two of those are the
`APA.
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`The next three, and I think this comes out of in
`large part questioning that Petitioner -- I'm sorry, that Patent
`Owner's counsel asked of our expert. The expert
`understandably is trying to be very careful and not say
`something that, you know, he can't take back later.
`In questioning, in these sections, what the -- what
`our expert was trying to say was that the application that is
`being described, whether it be monitoring of parking meters
`or I forgot what the other applications were, but there were
`several applications that were described in these sections of
`the patent, those applications existed, not necessarily using
`the invention that's described.
`So I think that is where the confusion arose with
`respect to the Patent Owner in their briefing. They were
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`trying to say that what the expert was saying was that the
`monitoring of a space using the wireless system that's
`described in the patent, they are characterizing that as being
`an admission or an argument that that was all admitted prior
`art.
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`And that's not our position. What we're saying,
`just to be clear, is it is the sections in columns 1 over to 2,
`and in column 5, coupled with figure 1. That's the APA.
`JUDGE WHITE: So your position is the sensor or
`actuator or other system that is mentioned in conjunction with
`the network, that system, for instance, in column 13 is an
`irrigation control system.
`You are saying that irrigation control system is
`admitted prior art, not the irrigation control system in
`conjunction with the networking described?
`MR. JACKSON: Well, our expert is not a lawyer,
`certainly not a patent lawyer. He is not a lawyer at all. So I
`think the issue what is admitted prior art versus what is just
`prior art that someone would admit is obviously prior art, I
`think he may have conflated those terms, not using them
`correctly.
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`I would not characterize these passages as being
`admitted prior art. I think, however, that, you know, Patent
`Owner and representatives of the Patent Owner, including the
`inventors, would likely concede that irrigation control systems
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`existed, not necessarily wireless, I'm not going to push that,
`but just the idea that there were irrigation control systems out
`there, that those are prior art.
`And I think that what our expert was trying to say,
`perhaps inartfully, was that such an obvious conclusion, that
`he doesn't think anybody would reasonably dispute that, and
`in his mind he used that term admitted prior art or perhaps
`agreed to questions that Patent Owner's counsel was putting
`forward.
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`But I'm not saying that legally using, you know,
`the law on what is admitted prior art, I'm not saying that
`columns 12 and 13 have admitted prior art. They may
`describe prior art, but not admitted prior art. Does that
`answer your questions?
`JUDGE WHITE: I think I follow what you are
`saying, yes.
`MR. JACKSON: Okay. Thank you. A lot of the
`arguments that were made by the Patent Owner related to
`whether or not the different references should properly be
`combined. I didn't count the number but there are certainly
`four or five sections in their Patent Owner Response dealing
`with this issue.
`And unless you would like me not to spend any
`time with that I would like to go through quickly and just deal
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`with the reasons why we think that, you know, that, for
`example, Kahn and the APA could be combined.
`JUDGE WHITE: Yes.
`MR. JACKSON: The admitted prior art, what I've
`identified as the admitted prior art, describes the wired
`monitoring and control systems, and they are different
`applications that are described in that same section of the
`admitted prior art. One of them being industrial process
`monitoring and control, which happens to be the area that my
`client makes products in.
`But they describe this system, and they describe
`some of the shortcomings with the system, primarily being
`installation costs, you know, installing the wiring in these
`systems can be a very expensive proposition. And we found
`that to be true in -- certainly in our cases in retrofit
`situations, where you have an existing plant that is already
`built and you need to or want to go in and add monitoring
`points within the plant.
`To do wired systems would require some
`destruction of the walls, digging up the floors, installation of
`wires, conduit, and so forth. And installing wireless systems
`is much cheaper. That is the problem that the inventors of the
`'732 patent recognized and described as part of the problems
`associated with the admitted prior art.
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`JUDGE WHITE: Do you have any evidence as far
`as any other industry players or anywhere else that describes
`this as the problem that one skilled in the art were working on
`at the relevant time, because it seems that your petition and
`Dr. Heppe looked very closely at the specification of the '732
`patent and the specification's description of the cost and other
`associated issues when framing what the problem is, so I'm
`trying to see, do you have any evidence of others in the art
`framing that problem in that way.
`MR. JACKSON: Well, what comes to mind with
`respect to art in this petition, I am -- nothing is coming to my
`mind right now. Maybe one of my fellow partners can shed
`light on that if there is any, but I don't think that that is
`necessary, with all due respect.
`I mean, KSR , specifically in the Supreme Court's
`opinion in KSR , specifically talked about how the obvious
`analysis is not constrained to the patentee's particular
`motivation about purpose or the specific problem he or she
`sought to solve. So if you are not constrained by that, that
`implies that it can be that or other reasons for looking to the
`different combination of art.
`So KSR is specifically endorsing the idea that you
`can, in fact, look to the problem that the inventors of the
`patent were dealing with or that they sought to solve. There
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`is not a prohibition. It is not limited to that, the reasons for
`making the combination.
`JUDGE PETTIGREW: Is that really what KSR is
`saying, though, that you can look to the patent that is being
`challenged for the motivation or that you can have evidence of
`motivation that is the same as what motivated the inventor?
`MR. JACKSON: Well, I mean, I think the
`reading -- my view of KSR is that it would encompass either
`of those. If it's, you know, I think it would be improper to
`look to the patent being challenged if you are looking at
`something that was being done as part of the solution to the
`problem and say that that is giving rise to the reason to
`combine the references.
`But where the patent is acknowledging a known
`problem in the art, it is not a problem that he or she has
`identified, it is a known problem in the art, and --
`JUDGE WHITE: I think that is where we are
`looking for evidence. Was it a known problem in the art?
`What do you have to show that others knew that this was an
`issue, because I think what I am looking at is defining the
`problem, figuring out what is wrong, isn't that part of the
`inventive process?
`MR. JACKSON: I don't think so, Your Honor. I
`don't think that identifying the problem -- part of the process,
`yes, I mean, it is part of the process because it perhaps is
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`what begins the journey for a search to that problem. But it is
`the solution to the problem that is the invention.
`And KSR is saying you can look to the same
`problems being dealt with by the inventors as a place where
`you would begin your analysis, and you have to go through all
`of the obviousness criteria to establish it, but that there is
`nothing wrong, there is nothing prohibitive about using a
`description of a problem that is admitted to be known in the
`art.
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`This is, just like the rest of the admitted prior art
`is admittedly knowledge that is in the art, so is this
`description of the problem.
`JUDGE WHITE: Well, let me be specific for you.
`I am thinking of a particular Federal Circuit case, Mintz v.
`Dietz, 679 F.3d 1372, it is a 2012 case, and in a portion of
`that case, the Federal Circuit is talking about inventive
`contributions, and specifically they state: "Often the
`inventive contribution lies in defining the problem in a new
`revelatory way. In other words, when someone is presented
`with an identical problem and told to make the patented
`invention, it often becomes virtually certain that the artisan
`will succeed at making the invention."
`And when you look at that description from the
`Federal Circuit, it seems that there needs to be something
`more than just what the specification described as the
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`problem. If this was a problem that was common throughout
`the art at the time, is there evidence that others were looking
`at this issue and trying to solve this problem?
`Because if everyone is trying to solve the problem,
`then you are not looking to the inventive work of the
`inventors of the '732 to figure out what the problem is. That's
`just the problem and everybody is trying to solve it.
`MR. JACKSON: Sure. I understand where you are
`coming from, and I don't, like I said, as I stand here right now
`I don't have a citation that I can give you other than the '732
`patent itself.
`In looking back at the '732 patent, in column 2,
`line 37, it looks like, they describe the typical approach to
`implementing control systems is to install networks of hard
`wired sensors and actuators along with the local controller,
`and then they go on to describe not only is there expense
`associated with developing and installing those sensors and
`actuators but the added expense of connecting the functional
`sensors and controllers with the local controller.
`All of this is in the context of what was going on
`out there in the typical approach. This is not a recognition of
`a new problem and then coming up with a solution to that
`problem. This is describing what, you know, what is going on
`with these typical systems. And it is commonsense. Right? I
`mean, it is commonsense that when you install a wired system,
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`certainly in many situations at least, it is going to be more
`expensive than a wireless system.
`This isn't a particularly insightful recognition. I
`think it is commonsense that if you could avoid the cost of
`doing one of the steps of installing a system and the cost of
`buying in this case the wires to install the system, with a
`wireless system then certainly one would recognize that as a
`better way of achieving the same objective.
`But, again, I think that this paragraph is the
`paragraph where the inventors were acknowledging that
`knowledge is out there. And do I have another cite right now,
`I don't, to give you, but certainly we think that part of the
`patent is that admission.
`JUDGE ZADO: And so aside from looking to the
`'732 patent, what does Petitioner have -- is that all Petitioner
`-- well, I know Petitioner relies not just on the teaching of the
`'732, but what I'm trying to figure out with my question is that
`if we're not persuaded that the '732, what it is teaching was
`well known, does the Petitioner have any other argument
`about the motivation aside from this?
`MR. JACKSON: With respect to these two pieces?
`JUDGE ZADO: Well, with respect to whether
`someone would have been motivated to combine these two
`references.
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`MR. JACKSON: Whether there are other
`arguments, I think that that is our --
`JUDGE ZADO: I know there are other arguments,
`but if we are not persuaded that what is in the '732, if we
`think it is hindsight and it is impermissible, does Petitioner
`still have an argument?
`MR. JACKSON: Well, Your Honor, I think that is
`our argument in a nutshell.
`JUDGE ZADO: Okay. Thank you. That was my
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`question.
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`MR. JACKSON: Can I go back to Judge White's
`question. Mr. Davis here has pointed me to another reference.
`This reference is from, it looks like it is SIPCO's Exhibit
`2004, and so I'm kind of flying a little bit blind here but let
`me put it on the counter here for us.
`So let me zoom in here. It is the paragraph that
`begins with rad