`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`APPLE INC.
`Petitioner
`v.
`PERSONALIZED MEDIA COMMUNICATIONS, LLC
`Patent Owner
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`Case No.: IPR2016-00755
`Patent No.: 8,191,091
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`PETITIONER’S PRELIMINARY REPLY TO
`PATENT OWNER’S PRELIMINARY RESPONSE
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`Petitioner’s Preliminary Reply: IPR2016-00755
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`In its Preliminary Response, PMC argues for the first time that the ’091
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`patent is entitled to a November 3, 1981 priority date, contrary to numerous
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`representations it made during prosecution and litigation that the patent is only
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`entitled to priority to a CIP application filed on September 11, 1987. PMC makes
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`its new priority argument the centerpiece of its Preliminary Response, contending
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`the issue is dispositive because it would mean four of the five references relied
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`upon are not prior art to the ’091 patent. Paper 7 at 7-16, 33-34.
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`Not only do the facts undermine PMC’s new priority claim, but PMC is in
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`fact barred from asserting this earlier priority as a matter of law. Federal Circuit
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`case law confirms that PMC must be held to its express disclaimer of priority to the
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`1981 application, and its repeated claims of priority only to the 1987 CIP, made
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`during prosecution and never retracted. And even if PMC is not legally barred
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`from claiming the 1981 priority date, there is good reason why PMC consistently
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`claimed priority only to the 1987 CIP throughout prosecution and in litigation – the
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`challenged claims are simply not supported by the 1981 disclosure.
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`I.
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`PMC DISCLAIMED PRIORITY TO THE 1981 SPECIFICATION
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`Throughout prosecution of the ’091 patent (U.S. Patent Appl. No.
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`08/485,507), PMC made numerous explicit statements that the ’091 patent only
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`claimed priority to the 1987 CIP. In an IDS dated December 5, 1995, PMC
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`unequivocally stated “this application only claims priority to the September 11,
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`1
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`Petitioner’s Preliminary Reply: IPR2016-00755
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`1987 filing date.” Ex. 1042 at 2. In a later Amendment, PMC reiterated that “[t]he
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`present application asserts priority based on the 1987 disclosure.” Ex. 1043 at 11.
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`In multiple IDSs, PMC listed the applications to which the ’091 patent claims
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`priority as tracing back only to the 1987 CIP (U.S. Patent No. 4,965,825). Ex.
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`1042 at 1; Ex. 1044 at 1; Ex. 1045 at 1; Ex. 1046 at 1; see also Ex. 1043 at 33.
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`Noticeably absent from these lists are any reference to the two PMC patents based
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`on the 1981 application (U.S. Patent Nos. 4,694,490 and 4,704,725).
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`In addition to these affirmative statements claiming priority only to 1987,
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`PMC expressly disclaimed priority to the 1981 date. The Examiner rejected the
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`pending ’091 claims for double patenting, stating that “there is no apparent reason”
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`why PMC could not have presented the ’091 claims in patents claiming priority to
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`the 1981 application. Ex. 1047 at 11. In response, PMC stated that the examiner’s
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`double patenting rejection based on patents having the 1981 specification “is
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`improper because the present application does not claim the benefit of those
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`applications under 35 U.S.C. § 120.” Ex. 1043 at 21.1 PMC successfully argued
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`that “there could never have been a basis for claiming the present subject matter in
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`[the 1981] applications.” Id.; see Ex. 1031. As this panel ruled in IPR2014-01527
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`(Amazon v. PMC) regarding the same statement, “in addition to not seeking
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`priority during prosecution, [PMC] conceded ‘a basis for claiming the present
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`1 All emphasis added unless otherwise noted.
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`2
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`Petitioner’s Preliminary Reply: IPR2016-00755
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`subject matter’ in its earlier filed ’490 patent specification.” Ex. 1048 at 30.
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`The Federal Circuit addressed very similar circumstances in Bradford Co. v.
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`Conteyor N. Am., Inc. and ruled that the patentee was estopped from claiming
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`priority to an earlier application based on the prosecution disclaimer. 603 F.3d
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`1262 (Fed. Cir. 2010). In Bradford, when prosecuting a CIP application, the
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`patentee responded to a double patenting rejection by stating that the earlier
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`application did not disclose certain claimed elements. Id. at 1263-64. Later, in
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`litigation, the patentee asserted priority to the earlier application that had been the
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`basis for the double patenting rejection. Id. at 1267. The Federal Circuit held that
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`the patentee was “estopped from arguing for an earlier priority date … by the
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`prosecution history of [the asserted] patent” because “arguments made to persuade
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`an examiner to allow an application trump an ambiguous disclosure that otherwise
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`might have sufficed to obtain an earlier priority date.” Id. at 1269.
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`PMC argued in IPR2014-01527 that the Examiner would not have relied on
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`its disclaimer because priority is “irrelevant to an In re Schneller analysis.” Ex.
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`1048 at 30. PMC’s position is legally incorrect, contradicted by the record and its
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`own argument that its disclaimer would overcome the rejection, and ignores
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`PMC’s unambiguous statement that the 1981 application “could never have been a
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`basis for claiming the present subject matter.” Ex. 1043 at 21. Having disclaimed
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`priority to 1981, PMC is now estopped from taking a contradictory position.
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`3
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`Petitioner’s Preliminary Reply: IPR2016-00755
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`PMC may also argue that the claims pending at the time of the June 10, 1997
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`Amendment were later cancelled, and that the statements made in that Amendment
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`do not apply to the claims at issue. Not only were PMC’s statements applicable to
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`the “application” being prosecuted, but a comparison of the then-pending 30
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`claims and the challenged claims shows they have tremendous overlap. For
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`instance, both prosecution claim 3 and issued claim 13 recite “receiving” an
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`“information
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`transmission” containing “[disabled/encrypted]
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`information”;
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`“detecting” “the presence of an instruct-to-enable signal”; “passing said instruct-to-
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`enable signal to” a “processor”; “[modifying/determining] a fashion in which said
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`receiver station locates [said enabling information/a first decryption key]”;
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`“locating said [enabling information/first decryption key]”; “[enabling/decrypting]
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`said [disabled/encrypted] information”; and “outputting said programming based
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`on said step of [enabling/decrypting].” Compare Ex. 1043 at 2-9 with Ex. 1003 at
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`claims 13, 20, 26. Any argument that the 1981 specification did not support the
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`then-pending claims but supports the issued claims would not be credible.
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`If PMC believed the circumstances had changed, or its repeated statements
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`claiming priority to 1987 were in error, Federal Circuit law demands that the
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`patentee clearly inform the Examiner of any rescission. See Hakim v. Cannon
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`Avert Grp., PLC, 479 F.3d 1313, 1318 (Fed. Cir. 2007) (“Although a disclaimer
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`made during prosecution can be rescinded, … the prosecution history must be
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`4
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`Petitioner’s Preliminary Reply: IPR2016-00755
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`sufficiently clear to inform the examiner that the previous disclaimer … may need
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`to be revisited.”); Spring Willow Fashions LP v. Novo Indus., LP, 323 F.3d 989,
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`995 (Fed. Cir. 2003) (“The public notice function of a patent and its prosecution
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`history requires that a patentee be held to what he declares during the prosecution
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`of his patent. … If the applicant mistakenly disclaimed coverage of the claimed
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`invention, then the applicant should have amended the file to reflect the error, as
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`the applicant is the party in the best position to do so.”).
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`There is no indication whatsoever that PMC rescinded its disclaimer at any
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`time. In fact, when prosecution resumed years later, PMC continued to assert
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`priority to the 1987 CIP. PMC added the claims that issued in the ’091 patent in an
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`Amendment dated April 11, 2011, explaining that it had consolidated claims from
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`related pending applications “separated based on whether priority was claimed to
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`[the 1981 specification] or [the 1987 CIP].” Ex. 1035 at 1-2. PMC stated that the
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`“instant application” represented the “DECR 87 group ‘B’” application, which
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`included rejected claims from the “DECR 87 group ‘A’” so that the “A”
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`application could issue. Id. at 2-4. Documents filed during prosecution of the
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`“DECR 87 group ‘A’” application (U.S. Patent. Appl. No. 08/474,145) confirm
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`that the “DECR” group relates to “decryption of broadcast information” and that
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`“87” designates a priority claim to the 1987 CIP. See Ex. 1049 at 9, 13.
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`Furthermore, throughout prosecution the Examiner rejected the claims based
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`5
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`Petitioner’s Preliminary Reply: IPR2016-00755
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`on references that post-dated 1981. PMC never once asserted the references were
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`not prior art, or gave any indication that its 1987 priority claim was in question.
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`See Exs. 1036, 1037, 1039. Indeed, in the concurrent litigation, until PMC filed its
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`Preliminary Response, PMC repeatedly asserted the ’091 patent claimed priority to
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`1987 rather than 1981, and that the challenged claims were conceived and reduced
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`to practice in 1987 rather than 1981. Ex. 1019 at 6; Ex. 1050 at 7; Ex. 1051 at 6-7.
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`II. THE CHALLENGED CLAIMS OF THE ’091 PATENT ARE NOT
`SUPPORTED BY THE 1981 SPECIFICATION
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`Independent of PMC’s disclaimer, the challenged claims of the ’091 patent
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`are not entitled to claim priority to the 1981 specification under 35 U.S.C. § 120.
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`Section 120 permits a patent application to rely on the filing date of an earlier
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`application “only if the disclosure of the earlier application provides support for
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`the claims of the later application, as required by 35 U.S.C. § 112.” PowerOasis,
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`Inc. v. T-Mobile USA, Inc., 522 F. 3d 1299, 1306 (Fed. Cir. 2008). Claims that
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`depend on “[s]ubject matter that arises for the first time in [a] CIP application do[]
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`not receive the benefit of the filing date of the parent application.” Id.
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`In the ’091 patent, independent challenged claims 13, 20, and 26 recite
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`decrypting and outputting “programming.” As this panel explained in IPR2014-
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`01527, “the term ‘programming’ was initially described in the [1981] specification
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`as ‘mean[ing] everything transmitted over television or radio’ and thereafter was
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`broadened in the [1987 specification] to include ‘everything that is transmitted
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`6
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`Petitioner’s Preliminary Reply: IPR2016-00755
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`electronically.’” Ex. 1048 at 33; compare Ex. 1009 at Abstract with Ex. 1003 at
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`6:31-34. Because the broader 1987 definition of “programming” expands the
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`scope of the subject matter, claims 13, 20, and 26 are not entitled to the 1981
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`priority date as a matter of law. See PowerOasis, 522 F.3d at 1310-11 (where a
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`claim term would receive a broader construction in view of the later filing, the
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`claim is not entitled to the benefit of the earlier filing). This panel came to the
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`same conclusion in IPR2014-01527. Ex. 1048 at 34.
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`In addition, the 1981 specification does not provide sufficient disclosure to
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`support various elements claimed in the ’091 patent – consistent with PMC’s prior
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`statements. For example, there is no support in the 1981 specification for the claim
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`13 elements that require “detecting in said encrypted digital information
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`transmission the presence of an instruct-to-enable signal” and “determining a
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`fashion in which said receiver station locates a first decryption key by processing
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`said instruct-to-enable signal.” Ex. 1003 at claim 13. Rather, the 1981
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`specification describes “preinformed” receivers, explaining that “the pattern of the
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`composition, timing, and location of the signals [to prevent unauthorized use] may
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`vary in such ways that only receiving apparatus that are preinformed regarding the
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`patterns that obtain at any given time will be able to process the signals correctly.”
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`Ex. 1009 at 4:31-40. Similarly, the terms “decryption key” (claims 13, 20) and
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`“instruct-to-enable signal” (claims 13, 20, 26) are never used in the ’490 patent.
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`7
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`Petitioner’s Preliminary Reply: IPR2016-00755
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`Date: July 20, 2016
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`Respectfully submitted,
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`/s/ Marcus E. Sernel
`Marcus E. Sernel (Reg. No. 55,606)
`Joel R. Merkin (Reg. No. 58,600)
`KIRKLAND & ELLIS LLP
`300 North LaSalle Street
`Chicago, Illinois 60654
`P: 312.862.2000; F: 312.862.2200
`marc.sernel@kirkland.com
`joel.merkin@kirkland.com
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`Attorneys For Petitioner
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`8
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that a copy of the foregoing Petitioner’s
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`Preliminary Reply to Patent Owner’s Preliminary Response was served on July 20,
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`2016 to attorneys of record for Patent Owner by electronic transmission:
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`Douglas J. Kline
`GOODWIN PROCTER LLP
`100 Northern Avenue
`Boston, Massachusetts 02210
`DG-PMC-Apple@goodwinprocter.com
`
`
`Thomas J. Scott (Reg. No. 27836)
`PERSONALIZED MEDIA
`COMMUNICATIONS, LLC
`14090 Southwest Freeway, Suite 450
`Sugar Land, TX 77478
`
`Jennifer Albert
`Stephen Schneiner
`GOODWIN PROCTER LLP
`901 New York Avenue N.W.
`Washington, D.C. 20001
`jalbert@goodwinprocter.com
`sschreiner@goodwinprocter.com
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`
`
`
`
`/s/ Marcus E. Sernel
`Marcus E. Sernel