United States Patent and Trademark Office
`
`________________________________________________
`
`Before the Patent Trial and Appeal Board
`________________________________________________
`
`
`
`AMX, LLC and
`Dell Inc.,
`Petitioners
`
`v.
`
`Chrimar Systems, Inc.
`Patent Owner
`
`
`
`________________________________________________
`
`Case No. IPR2016-00574
`U.S. Patent No. 8,902,760
`________________________________________________
`
`
`Patent Owner’s Preliminary Response
`Under 37 C.F.R. § 42.107(a)
`
`
`
`
`
`
`
`
`
`
`
`________________________________________________
`
`Before the Patent Trial and Appeal Board
`________________________________________________
`
`
`
`AMX, LLC and
`Dell Inc.,
`Petitioners
`
`v.
`
`Chrimar Systems, Inc.
`Patent Owner
`
`
`
`________________________________________________
`
`Case No. IPR2016-00574
`U.S. Patent No. 8,902,760
`________________________________________________
`
`
`Patent Owner’s Preliminary Response
`Under 37 C.F.R. § 42.107(a)
`
`
`
`
`
`
`
`
`
`
`
`Table of Contents
`
`Case No. IPR2016-00574
`U.S. Patent No. 8,902,760
`
`
`
`
`iv
`Table of Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .
`Patent Owner’s Exhibit List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi
`Introduction and Summary of Arguments . . . . . . . . . . . . . . . . . . . . . . . 1
`Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .
`3
`A. Status of Related Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
`B. Chrimar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . 4
`C. The ’760 Patent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 6
`D. Person of Ordinary Skill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
`Arguments and Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
`A. Legal Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 11
`1. Inter Partes Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
`2. Obviousness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
` 12
`B. Claim Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`16
`1. Prior Claim Constructions from the District
`16
`Court Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`1. “pairs of conductors” . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
`C. The Petition should be denied because Petitioners
`have not made a prima facie case that the ’760
`Patent’s claims are obvious in view of the De
`19
`Nicolo references. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`1. The De Nicolo References . . . . . . . . . . . . . . . . . . . . . . . . . 21
`a. The ’666 Patent discloses a method and
`apparatus for allocating power among
`processor cards in a closed, modular system. . . . . . . . . . . . . . 21
`b. The ’468 Patent discloses a system for
`powering Ethernet-based telephones. . . . . . . . . . . . . . . . . . 24
`
`
`
`
`– ii –
`
`
`
`Case No. IPR2016-00574
`U.S. Patent No. 8,902,760
`
`
`26
`
`31
`
`2. Petitioners do not assert that a person of
`ordinary skill in the art would have been
`motivated to combine the De Nicolo references
`to achieve the system claimed by the ’760
`Patent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . .
`3. Petitioners offer only a conclusory statement
`that a person of ordinary skill would have
`known how to combine the De Nicolo
`references. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .
`4. Petitioners do not contend that a person of
`ordinary skill in the art would have had a
`reasonable expectation of success . . . . . . . . . . . . . . . . . . . . . 36
`D. Ground 2: Petitioners have not made a prima facie
`case that the ’760 Patent is obvious in view of the
`autonegotiation references. . . . . . . . . . . . . . . . . . . . . . . . . . . 37
`a. Petitioners wrongly assume that the ’760
`Patent claims autonegotiation. . . . . . . . . . . . . . . . . . . . . . 40
`b. Petitioners have not shown that the
`autonegotiation references disclose a path
`configured to draw DC current through a
`loop formed over at least one conductor of a
`first pair of conductors and at least one
`conductor of a second pair of conductors. . . . . . . . . . . . . . . 41
`c. There is no evidence to support Petitioners’
`unsupported inference that their proposed
`paths draw different magnitudes of DC
`current. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .
`d. The autonegotiation references, themselves,
`disprove Petitioners’ contention that the
`disclosed autonegotiation system would
`work if the Ethernet device is powered off. . . . . . . . . . . . . . . 48
`Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . .
`49
`Certificate of Compliance with Word Count . . . . . . . . . . . . . . . . . . . . 51
`Certificate of Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .
`51
`
`46
`
`– iii –
`
`
`
`Case No. IPR2016-00574
`U.S. Patent No. 8,902,760
`
`
` Table of Authorities
`
`Cases
`
`15
`
`15
`
`12, 13, 14, 31
`
`Dome Patent L.P. v. Lee,
`799 F.3d 1372 (Fed. Cir. 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Dynamic Drinkware, LLC v. Nat’l Graphics, Inc.,
`800 F. 3d 1375 (Fed. Cir. 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
`In re Cyclobenzaprine Hydrochloride Extended–Release Capsule Patent Litig.,
`676 F.3d 1063 (Fed. Cir. 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . .
`In re Fine,
`837 F.2d 1071 (Fed. Cir. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
`In re Kahn,
`441 F.3d 977 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . .
`Intelligent Bio-Sys., Inc. v. Illumina Cambridge Ltd.,
`— F.3d —, 2016 WL 2620512 (Fed. Cir. May 9, 2016) . . . . . . . . . 16, 36, 41
`KSR Int’l Co. v. Teleflex Inc.,
`550 U.S. 398 (2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Microsoft Corp. v. Proxyconn, Inc.,
`789 F.3d 1292 (Fed. Cir. 2015) . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Perfect Web Techs., Inc. v. InfoUSA, Inc.,
`587 F.3d 1324 (Fed. Cir. 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
`Princeton Biochems., Inc. v. Beckman Coulter, Inc.,
`411 F.3d 1332 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
`Securus Techs., Inc. v. Global Tel*Link Corp.,
`IPR2015-00155, Paper No. 30 (Apr. 7, 2016) . . . . . . . . . . . . . . . . . . . 14
`Star Sci., Inc. v. R.J. Reynolds Tobacco Co.,
`655 F.3d 1364 (Fed. Cir. 2011) . . . . . . . . . . . . . . . . . . . . . . . . . . .
`Tec Air, Inc. v. Denso Mfg. Mich. Inc.,
`192 F.3d 1353 (Fed. Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
`Tietex Int’l, Ltd. v. Precision Fabrics Group, Inc.,
`
` IPR2014-01248, Paper No. 39 (2016) . . . . . . . . . . . . . . . . . . . . . . . 12
`
`13, 14
`
`16
`
`13
`
`– iv –
`
`
`
`14, 31
`
`Case No. IPR2016-00574
`U.S. Patent No. 8,902,760
`
`Wowza Media Sys., LLC v. Adobe Sys. Inc.,
`IPR2013-00054, Paper No. 12 (Apr. 8, 2013) . . . . . . . . . . . . . . . . .
`
`Statutes
`20
`35 U.S.C. § 103(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .
`10
`35 U.S.C. § 313 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . .
`35 U.S.C. § 314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 8, 18
`
`Rules
`19
`37 C.F.R. § 42.8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . .
`10
`37 C.F.R. § 42.107 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .
`37 C.F.R. § 42.108(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8, 18
`37 C.F.R. § 42.22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . .
`19
`37 C.F.R. § 42.22(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`19
`37 C.F.R. § 42.23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . .
`19
`37 C.F.R. § 42.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . .
`19
`37 C.F.R. § 42.65(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .
`43
`37 C.F.R. § 42.100(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
` 23
`37 C.F.R. § 42.104 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .
`19
`
`Other Authorities
`
`Webster’s Ninth New Collegiate Dictionary (1983). . . . . . . . . . . . . . . . . . 26
`
`
`
`
`
`– v –
`
`
`
`Case No. IPR2016-00574
`U.S. Patent No. 8,902,760
`
`
` Patent Owner’s Exhibit List
`
`Chrimar
`System, Inc.
`Exhibit No.
`
`
`
`Exhibit Description
`
`Date Filed
`
`2001
`
`2002
`
`2003
`
`2004
`
`2005
`
`2006
`
`2007
`
`2008
`
`Transcript of Telephone Proceedings, April 13, 2016,
`IPR2016-00569, IPR2016-00574, IPR2016-00572,
`IPR2016-00573
`Chrimar’s Proposed Discovery Requests
`Hewlett-Packard Co. and Aruba Networks, Inc.’s
`Complaint and Demand for Jury Trial, Dkt. No. 1,
`filed in Hewlett-Packard Co., et al. v. Chrimar
`Systems, Inc., Civil Action No. 2:15-cv-12569,
`Eastern District of Michigan
`Notice of Appearance of David H. Dolkas, Dkt. No.
`104, filed in Chrimar Systems, Inc., et al. v. Cisco
`Systems, Inc., et al., Civil Action No. 3:13-cv-1300,
`Northern District of California
`AMX’s Initial Disclosures, served in Chrimar
`Systems, Inc., et al. v. AMX, Civil Action No. 6:15-
`cv-163, Eastern District of Texas
`Ruckus Wireless, Inc.’s 2015 Annual Report on Form
`10-K, Page 72
`Notice of Appearance of Matthew Yungwirth, Dkt.
`No. 15, filed in Chrimar Systems, Inc., et al. v. AMX,
`Civil Action No. 13-cv-881, Eastern District of Texas
`Order Granting Application for Admission of
`Attorney Pro Hac Vice as to Matthew Yungwirth,
`Dkt. No. 49, filed in Chrimar Systems, Inc. et al. v.
`Ruckus Wireless, Inc., Northern District of California
`
`4/20/2016
`
`4/20/2016
`
`4/20/2016
`
`4/20/2016
`
`4/20/2016
`
`4/20/2016
`
`4/20/2016
`
`4/20/2016
`
`– vi –
`
`
`
`Case No. IPR2016-00574
`U.S. Patent No. 8,902,760
`
`
`Chrimar
`System, Inc.
`Exhibit No.
`
`Exhibit Description
`
`Date Filed
`
`Order regarding Consolidation, Dkt. No. 17, filed in
`Chrimar Systems, Inc., et al. v. ADTRAN, Inc., et al.,
`Civil Action No. 6:15-cv-618, Eastern District of
`Texas
`Aerohive Network, Inc.’s 2015 Annual Report on
`Form 10-K
`Letter from Gilbert A. Greene to David Goren dated
`January 27, 2016 re: Microsemi’s indemnification of
`Dell
`“Welcome to the DLINK SYSTEMS store at Dell,”
`Dell.com, available at
`http://accessories.us.dell.com/sna/brand.aspx?c=us&l
`=en&s=dhs&cs=19&brandid=1040 (last visited April
`20, 2016)
`“What’s New: Dell and Juniper collaborate on secure,
`open-standard networking solutions…,” Dell.com
`http://www.dell.com/content/topics/topic.aspx/global/
`products/landing/en/powerconnect-j?c=us&l=en (last
`visited April 20, 2016)
`“Aerohive Networks Announces Agreement with
`Dell to Resell Aerohive’s Industry-Leading Cloud
`Managed Wi-Fi and Mobility Solutions,”
`Aerohive.com
`http://www.aerohive.com/company/press-
`releases/2015/aerohive-networks-announces-
`agreement-with-dell-to-resell-aerohive_s-industry-
`leading-cloud-managed-wi-fi-and-mobility-
`solutions.html (last visited April 20, 2016)
`Declaration of Dr. Vijay K. Madisetti
`Curriculum Vitae of Dr. Vijay K. Madisetti
`
`4/20/2016
`
`4/20/2016
`
`4/20/2016
`
`4/20/2016
`
`4/20/2016
`
`4/20/2016
`
`6/9/2016
`6/9/2016
`
`2009
`
`2010
`
`2011
`
`2012
`
`2013
`
`2014
`
`2015
`2016
`
`– vii –
`
`
`
`Case No. IPR2016-00574
`U.S. Patent No. 8,902,760
`
`
`Chrimar
`System, Inc.
`Exhibit No.
`
`Exhibit Description
`
`Date Filed
`
`Memorandum Opinion and Order, Dkt. No. 96, filed
`in Chrimar Systems, Inc., et al. v. AMX, LLC, Civil
`Action No. 6:13-cv-881-JDL, Eastern District of
`Texas
`Memorandum Opinion and Order, Dkt. No. 105, filed
`in Chrimar Systems, Inc., et al. v. AMX, LLC, Civil
`Action No. 6:13-cv-881-JDL, Eastern District of
`Texas
`Memorandum Opinion and Order, Dkt. No. 108, filed
`in Chrimar Systems, Inc., et al. v. AMX, LLC, Civil
`Action No. 6:13-cv-881-JDL, Eastern District of
`Texas
`Memorandum Opinion and Order, Dkt. No. 122, filed
`in Chrimar Systems, Inc., et al. v. AMX, LLC, Civil
`Action No. 6:13-cv-881-JDL, Eastern District of
`Texas
`Memorandum Opinion and Order, Dkt. No. 123, filed
`in Chrimar Systems, Inc., et al. v. AMX, LLC, Civil
`Action No. 6:13-cv-881-JDL, Eastern District of
`Texas
`Reserved
`Reserved
`Reserved
`Reserved
`U.S. Patent No. 6,650,622
`U.S. Patent No. 7,457,250
`U.S. Patent No. 8,155,012
`U.S. Provisional Application No. 60/081,279
`
`6/9/2016
`
`6/9/2016
`
`6/9/2016
`
`6/9/2016
`
`6/9/2016
`
`N/A
`N/A
`N/A
`N/A
`6/9/2016
`6/9/2016
`6/9/2016
`6/9/2016
`
`2017
`
`2018
`
`2019
`
`2020
`
`2021
`
`2022
`2023
` 2024
` 2025
`2026
`2027
`2028
`2029
`
`
`
`– viii –
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`
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`Case No. IPR2016-00574
`U.S. Patent No. 8,902,760
`
`
`
`
`Introduction and Summary of Arguments
`
`Petitioners wrongly contend that certain claims of U.S. Patent No. 8,902,760
`
`(Ex. 1001, the “’760 Patent”) are obvious in view of two sets of references: (1) the
`
`De Nicolo references— U.S. Patent Nos. 6,115,468 (Ex. 1019, the ’468 Patent) and
`
`6,134,666 (Ex. 1020, the ’666 Patent); and (2) the autonegotiation references—
`
`U.S. Patent No. 5,883,894 (Ex. 1034); National Semiconductor DP83840
`
`Technical Data Sheet (Ex. 1024); IEEE Standard 802.3u-1995 (Ex. 1025); and
`
`IEEE Standard 802.3-1993 (Ex. 1026).1
`
`The Board should dismiss the Petition and decline to institute a trial in this
`
`case. Petitioners have not met their burden to show a reasonable likelihood that one
`
`or more challenged claims of the ’760 Patent will be found unpatentable, as
`
`required by 35 U.S.C. § 314(a) and 37 C.F.R. § 42.108(c). Specifically, Petitioners
`
`have failed to make a prima facie case that the ’760 Patent is obvious in view of
`
`either the De Nicolo or the autonegotiation references.
`
`
`1 Petitioners assert that each set of references renders the following claims
`
`obvious: independent claim 1 and its dependent claims 31, 37, 58, 59, 69, 72; and
`
`independent claim 73 and its dependent claims 106, 112, 134, 142, 145.
`
`– 1 –
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`
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`Case No. IPR2016-00574
`U.S. Patent No. 8,902,760
`
`
`With respect to Ground 1, the De Nicolo references, Petitioners point to no
`
`evidence that a person of ordinary skill in the art, facing the problems discussed in
`
`the ’760 Patent, would have been motivated to combine them to achieve the
`
`inventions claimed by the ’760 Patent. Further, Petitioners offer only conclusory
`
`argument, unsupported by fact, that a person of ordinary skill would have
`
`understood how to combine the references. Further still, Petitioners fail to argue,
`
`much less point to evidence, that a person of ordinary skill would have had a
`
`reasonable expectation that combining the references would have resulted in the
`
`inventions claimed by the patent. Accordingly, Petitioners have not made a prima
`
`facie case that any claim of the ’760 Patent is obvious in light of the De Nicolo
`
`references. The Board should reject Ground 1 of the Petition.
`
`With respect to Ground 2, the autonegotiation references, Petitioners have not
`
`shown that a person of ordinary skill in the art would have been motivated to
`
`combine them to create the inventions claimed in the ’760 Patent or that such a
`
`person would have had a reasonable expectation that combining them would result
`
`in the claimed inventions. Petitioners also fail to show that combining the
`
`references meets every limitation of the claims. In this regard, Petitioners ignore
`
`express statements in the references that contradict their arguments and rely on
`
`conclusory statements of their expert that are unsupported by facts. As a result,
`
`– 2 –
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`
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`Case No. IPR2016-00574
`U.S. Patent No. 8,902,760
`
`Petitioners have not made a prima facie case that any claim of the ’760 Patent is
`
`obvious in light of the autonegotiation references. The Board should reject Ground
`
`2 of the Petition.
`
`This filing is timely under 35 U.S.C. § 313 and 37 C.F.R. § 42.107, as it is being
`
`filed within three months of the Notice dated March 9, 2016, granting the Petition
`
`a filing date of February 29, 2016. While Patent Owner here addresses some limited
`
`aspects of the Petition, if instituted, Patent Owner expects to address these and
`
`other aspects of the petition in greater detail.
`
` Background
`
`A. Status of Related Litigation
`The ’760 Patent is currently one of four related patents2 asserted in litigation
`
`pending in the Eastern District of Texas against Petitioners: Chrimar Systems, Inc.
`
`et al. v. Alcatel-Lucent S.A., et al., Case No. 6:15-cv-163 involves AMX, and Chrimar
`
`Systems, Inc. et al. v. ADTRAN, Inc., et al., Case No. 6:15-cv-618 involves Dell. The
`
`Court construed certain terms of the ’760 Patent and denied AMX’s motion for
`
`summary judgment of invalidity on March 28, 2016.3 Trial is scheduled for October
`
`2 The four related patents are U.S. Patent Nos. 8,155,012 (Ex. 2028);
`
`9,049,019 (Ex. 1007); 8,942,107 (Ex. 1003) and 9,019,838 (Ex. 1005).
`
`3 See Exs. 2020 and 2021.
`
`– 3 –
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`Case No. IPR2016-00574
`U.S. Patent No. 8,902,760
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`of 2016 against AMX. A Markman hearing is scheduled in the ADTRAN case on
`
`June 9, 2016, and trial is scheduled in January of 2017 against Dell.
`
`B. Chrimar
`Chrimar was founded in 1993 by Chris Young and Marshall Cummings.4 After
`
`learning about a number of thefts of networked equipment at the University of
`
`Michigan, where Mr. Cummings worked, the two began developing security
`
`solutions for networked equipment. While many in the industry focused on locking
`
`computers to desks and installing video surveillance systems, Messrs. Cummings
`
`and Young began focusing on an easily overlooked fact—these devices were already
`
`individually wired to the network by their own network cabling.
`
`In 1992, Messrs. Cummings and Young filed a patent application, which
`
`issued in 1995 as U.S. Patent No. 5,406,260 entitled “Network Security System for
`
`Detecting Removal of Electronic Equipment.”5 The ’260 Patent claimed
`
`inventions related to monitoring the physical connectivity of a piece of equipment
`
`(e.g., a computer) to a network using existing network wiring—even when the
`
`piece of equipment was powered off. Realizing the uniqueness and potentially
`
`
`4 Chrimar is a combination of “Chri” from Chris and “Mar” from Marshall.
`
`5 Ex. 1016, the “’260 Patent.”
`
`– 4 –
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`Case No. IPR2016-00574
`U.S. Patent No. 8,902,760
`
`broad appeal of this idea, Messrs. Cummings and Young founded Chrimar in 1993
`
`and began working on a commercial product they called EtherLock.
`
`In response to customer demand, Chrimar expanded and John Austermann
`
`joined the company in 1997 to oversee its general management and direct its sales
`
`and marketing efforts. He and Mr. Cummings began contemplating ideas to expand
`
`the company’s product offerings. They soon conceived of inventions related to
`
`managing, tracking, and controlling assets that physically connect to a network,
`
`which led to the ’760 Patent and six other granted patents—all of which claim
`
`priority to Chrimar’s provisional patent application dated April 10, 1998.6
`
`In early 1998, Chrimar began developing a new generation of products based
`
`on the inventions disclosed and claimed in those patents. And in the fall of 1998,
`
`Chrimar began selling new products that enabled physical control, tracking,
`
`management, and security of computer assets and network ports.
`
`
`6 Those patents are U.S. Pat. Nos. 6,650,622 (Ex. 2026); 7,457,250 (Ex.
`
`2027); 8,155,012 (Ex. 2028); 9,049,019 (Ex. 1007); 9,019,838 (Ex. 1005); and
`
`8,942,107 (Ex. 1003), each of which claims priority to provisional application no.
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`60/081,279 (Ex. 2029). U.S. Pat. No. 7,457,250 was subjected to a reexam, and all
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`reexamined claims were confirmed as patentable.
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`– 5 –
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`
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`Case No. IPR2016-00574
`U.S. Patent No. 8,902,760
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`C. The ’760 Patent
`
`The ’760 Patent is directed to methods and systems for managing devices
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`connected in a wired network. The claims “relate[] generally to computer networks
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`and, more particularly, to a network management and security system for
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`managing, tracking, and identifying remotely located electronic equipment on a
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`network.”7 The “invention is particularly adapted to be used with an existing
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`Ethernet communications link or equivalents thereof.”8
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`More specifically, the patent discloses identifying an “asset,” such as a
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`computer, “by attaching an external or internal device to the asset and
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`communicating with that device using existing network wiring or cabling.”9 The
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`remote device is referred to as a “remote module.”10 An asset can be managed,
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`tracked, or identified by using the remote module to communicate information
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`
`7 ’760 Patent at 1:27–30 (Ex. 1001); see also Declaration of Dr. Vijay K.
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`Madisetti ¶ 17 (Ex. 2015, “Madisetti Dec.”).
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`8 ’760 Patent at 3:41–43 (Ex. 1001).
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`9 ’760 Patent at 2:4–6 (emphasis added) (Ex. 1001).
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`10 ’760 Patent at 3:27–30 (Ex. 1001).
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`– 6 –
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`
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`Case No. IPR2016-00574
`U.S. Patent No. 8,902,760
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`about the asset to network monitoring equipment, referred to as a “central
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`module.”11
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`The basic configuration of an embodiment of the system claimed by the patent
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`is illustrated in Figure 4, reproduced below with highlights and annotations.
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`
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`High-frequency data in an Ethernet network propagates between a hub (1) and
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`
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`a PC (3a) over two pairs of conductive lines—a pair of transmit lines, highlighted in
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`green (conductors 1 & 2), and a pair of receive lines, highlighted in red (conductors
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`3 and 6). A central module (15a) and a remote module (16a) are placed between the
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`hub and the PC, with the high-frequency data propagating through them. What’s
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`novel about the system is that the remote module can convey information about the
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`11 ’760 Patent at 3:27–31; 6:7–12; 8:65–9:5 (Ex. 1001); see also Madisetti Dec.
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`¶ 18 (Ex. 2015).
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`– 7 –
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`Case No. IPR2016-00574
`U.S. Patent No. 8,902,760
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`PC to the central module wherein the information is carried by different
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`magnitudes of DC current flowing through the same conductive lines as the high-
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`frequency data without adversely affecting the high-frequency data. This is
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`generally represented in the figure above by the black arrows between the central
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`and remote modules. The different magnitudes of DC current convey information
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`about the PC, and this can happen even when the PC is powered off.12
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` The central module has a direct connection to the remote module via a
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`conventional Ethernet cable. More importantly, the central module can be
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`connected to multiple remote modules. The diagram below shows an exemplary
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`configuration consisting of a central module connected to four remote modules.
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`This arrangement is commonly referred to as being part of a “star” or “hub
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`and spoke” configuration, in which the central module has a direct electrical
`
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`12 See, e.g., Madisetti Dec. ¶¶ 20 and 22–30 (Ex. 2015).
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`– 8 –
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`Case No. IPR2016-00574
`U.S. Patent No. 8,902,760
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`connection to the remote modules, allowing it to identify, communicate with, and
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`manage each of the assets—as opposed to a “bus” configuration where
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`communication lines (and thus the electrical connection) are shared among several
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`devices.
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`This system allowed the patentees to solve a number of problems associated
`
`with prior-art asset-management systems. As the patent explains:
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`[The prior art was] generally incapable of detecting the electrical
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`connection status of equipment[;] it cannot detect the physical
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`location of equipment, the identifying name of equipment is not
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`permanent, and the monitored assets must be powered-up.
`
`Therefore, a method for permanently identifying an asset by
`attaching an external or internal device to the asset and
`communicating with that device using existing network
`wiring or cabling is desirable. . . . It would also be desirable to
`communicate with the device without requiring the device or
`the asset to be connected to alternating current (AC) power.
`
`Such a device would allow a company to track its assets, locate
`
`any given asset, and count the total number of identified assets at
`
`any given time, thus significantly reducing its [total cost of
`ownership] of identified assets.13
`
`
`13 ’760 Patent at 1:65–2:15 (Ex. 1001); see also Madisetti Dec. ¶ 32 (Ex. 2015).
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`– 9 –
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`
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`Case No. IPR2016-00574
`U.S. Patent No. 8,902,760
`
`
`In short, the patentees were looking for a way to identify, communicate with,
`
`and manage distributed assets in a network, over existing network wires, even when
`
`the assets are powered off. The innovative devices, methods, and systems
`
`described and claimed by the ’760 Patent achieve each of these goals. Specifically,
`
`they are able to: (1) convey information about assets—e.g., a company’s
`
`computers—over the same lines already being used to convey high-frequency data
`
`communications to the assets, without substantially interfering with the high-
`
`frequency data communications14; and (2) convey information about the assets
`
`even when the assets are powered off.15
`
`
`14 See, e.g., ’760 Patent at 12:6–8 (“The system transmits a signal over pre-
`
`existing network wiring or cables without disturbing network communi-
`
`cations . . . .”) (Ex. 1001).
`
`15 See, e.g., ’760 Patent at 5:4–6 (describing an embodiment of the invention
`
`“capable of identifying the existence and location of network assets without power
`
`being applied to the assets.”); id. at 12:57–59 (“[T]he system provides a means for
`
`permanently identifying the location of network assets without applying power to
`
`the assets.”) (Ex. 1001).
`
`– 10 –
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`
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`Case No. IPR2016-00574
`U.S. Patent No. 8,902,760
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`D. Person of Ordinary Skill
`
`The Parties appear to agree that a person of ordinary skill in the art with
`
`respect to the ’760 Patent would have, at a minimum, an undergraduate degree or
`
`the equivalent in the field of electrical engineering or a related ancillary field, and
`
`one to three years of experience with data-communications networks, such as
`
`Ethernet networks. Having experience with data-communications networks, such
`
`a person would also be familiar with data-communications protocols and standards.
`
` Arguments and Authorities
`
`A. Legal Standards
`1. Inter Partes Review
`
`An inter partes review may be instituted only if “the information presented in
`
`the petition . . . and any response . . . shows that there is a reasonable likelihood that
`
`the petitioner would prevail with respect to at least 1 of the claims challenged in the
`
`petition.” 35 U.S.C. § 314(a). The petitioner bears the burden of proof to
`
`“demonstrate that there is a reasonable likelihood that at least one of the claims
`
`challenged in the petition is unpatentable.” 37 C.F.R. § 42.108(c). At all stages of
`
`the IPR, this burden of proof stays with the petitioner and never shifts to the patent
`
`owner to prove the patentability of the challenged claims. See Dynamic Drinkware,
`
`LLC v. Nat’l Graphics, Inc., 800 F.3d 1375, 1378–79 (Fed. Cir. 2015); see also Tietex
`
`– 11 –
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`
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`Case No. IPR2016-00574
`U.S. Patent No. 8,902,760
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`Int’l, Ltd. v. Precision Fabrics Group, Inc., IPR2014-01248, Paper No. 39 at 11
`
`(2016).
`
` When filing an IPR Petition, the petitioner must include sufficient evidence
`
`and argument to meet its burden of proof. The petition must include “[a] full
`
`statement of the reasons for the relief requested, including a detailed explanation of
`
`the significance of the evidence including material facts, the governing law, rules,
`
`and precedent.” 37 C.F.R. § 42.22(a)(2); see also 37 C.F.R. § 42.104 (requiring IPR
`
`petitions to meet the requirements of §§ 42.6, 42.8, 42.22, and 42.23).
`
`2. Obviousness
`
`To establish a prima facie case of obviousness based on a combination of
`
`elements disclosed in the prior art, it is necessary to show that it would have been
`
`obvious to make the claimed invention. In re Kahn, 441 F.3d 977, 986 (Fed. Cir.
`
`2006). This requires explaining why a person of ordinary skill in the art would have
`
`been motivated to select the references and to combine them to render the claimed
`
`invention obvious. Id.16 Without such an explanation for the motivation to combine
`
`
`16 See also, e.g., Tec Air, Inc. v. Denso Mfg. Mich. Inc., 192 F.3d 1353, 1359 (Fed.
`
`Cir. 1999) (“To establish a prima facie case of obviousness, [it is necessary to] show
`
`some objective teaching in the prior art or that knowledge generally available to one
`
`– 12 –
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`
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`Case No. IPR2016-00574
`U.S. Patent No. 8,902,760
`
`the references, the Federal Circuit infers hindsight was used to conclude the
`
`invention was obvious. Id. Indeed, “the great challenge of the obviousness
`
`judgment is proceeding without any hint of hindsight.” Star Sci., Inc. v. R.J.
`
`Reynolds Tobacco Co., 655 F.3d 1364, 1375 (Fed. Cir. 2011).
`
`As the Board recently explained, allegations of the motivation to combine fail
`
`if the analysis is not explicit:
`
`The key to supporting a conclusion of unpatentability under 35
`
`U.S.C. § 103(a) is the clear articulation of reasons why the
`
`claimed invention would have been obvious. The Supreme Court
`
`has clarified the requirements that the “analysis should be made
`
`explicit.” KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 418 (2007).
`
`Although the reasoning may draw from numerous intrinsic and
`
`extrinsic sources, conclusions of obviousness “cannot be
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`sustained by mere conclusory statements; instead, there must be
`
`some articulated reasoning with some rational underpinning to
`
`support the legal conclusion of obviousness.” Id. (quoting In re
`
`Kahn, 441 F.3d at 988).
`
`
`of ordinary skill in the art would lead that individual to combine the relevant
`
`teachings of the references.”) (internal citation and quotation omitted).
`
`– 13 –
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`
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`Case No. IPR2016-00574
`U.S. Patent No. 8,902,760
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`Securus Techs., Inc. v. Global Tel*Link Corp., IPR2015-00155, Paper No. 30 at 15
`
`(Apr. 7, 2016).17
`
`Applying this standard, the Board denied review in Wowza Media Systems,
`
`LLC v. Adobe Systems Inc., IPR2013-00054, Paper No. 12 at 14–17 (Apr. 8, 2013),
`
`because the petitioner offered only a conclusory argument that a person of ordinary
`
`skill would have been motivated to combine the references at issue. See also In re
`
`Kahn, 441 F.3d at 988 (“[R]ejections on obviousness grounds cannot be sustained
`
`by mere conclusory statements; instead, there must be some articulated reasoning
`
`with some rational underpinning to support the legal conclusion of obviousness. . . .
`
`
`17 See also, e.g., Perfect Web Techs., Inc. v. InfoUSA, Inc., 587 F.3d 1324, 1330
`
`(Fed. Cir. 2009) (“Although the obviousness analysis should ‘take account of the
`
`inferences and creative steps that a person of ordinary skill in the art would
`
`employ,’ the Supreme Court emphasized that this evidentiary flexibility does not
`
`relax the requirement that, [t]o facilitate review, this analysis should be made
`
`explicit.’” (quoting KSR, 550 U.S. at 418); Kahn, 441 F.3d at 988 (“[R]ejections
`
`on obviousness grounds cannot be sustained by mere conclusory statements;
`
`instead, there must be some articulated reasoning with some rational underpinning
`
`to support the legal conclusion of obviousness.”).
`
`– 14 –
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`
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`Case No. IPR2016-00574
`U.S. Patent No. 8,902,760
`
`This requirement is as much rooted in the Administrative Procedures Act, which
`
`ensures due process and non-arbitrary decision making, as it is in § 103.”
`
`(emphasis added)).
`
`Further, a party seeking to invalidate a patent as obvious must prove not only
`
`that “a skilled artisan would have had reason to combine the teaching of the prior
`
`art references to achieve the claimed invention,” but also “that the skilled artisan
`
`would have had a reasonable expectation of success from doing so.” In re
`
`Cyclobenzaprine Hydrochloride Extended–Release Capsule Patent Litig., 676 F.3d 1063,
`
`1069 (Fed. Cir. 2012) (internal quotation and citation omitted).18 “The reasonable
`
`expectation of success requirement refers to the likelihood of success in combining
`
`references to meet the limitations of the claimed invention.” Intelligent Bio-Sys.,
`
`Inc. v. Illumina Cambridge Ltd., — F.3d —, 2016 WL 2620512, at *6 (Fed. Cir. May
`
`
`18 See also, e.g., Dome Patent L.P
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