`
`
`
`Filed on behalf of TQ Delta LLC
`By: Peter J. McAndrews
`McAndrews, Held & Malloy, Ltd.
`500 W. Madison St., 34th Floor
`Chicago, IL 60661
`Tel: 312-775-8000
`Fax: 312-775-8100
`E-mail:
`pmcandrews@mcandrews-ip.com
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_____________
`
`CISCO SYSTEMS, INC. and ARRIS GROUP, INC.,
`Petitioner,
`
`v.
`
`TQ DELTA, LLC,
`Patent Owner.
`_____________
`Case IPR2016-010071
`Patent No. 8,432,956 B2
`_____________
`
`PATENT OWNER’S REQUEST FOR REHEARING
`UNDER 37 C.F.R. §42.71(d)
`
`
`
`
`
`
`
`
`
`
`
`1 ARRIS Group, Inc., who filed a Petition in IPR2017-00422, has been joined in
`this proceeding.
`
`
`
`
`
`
`
`
`
`I.
`II.
`
`III.
`
`
`
`
`
`
`
`
`
`
`TABLE OF CONTENTS
`
`A.
`
`B.
`
`C.
`
`D.
`
`INTRODUCTION ................................................................................. 1
`ARGUMENT ........................................................................................ 1
`The Board Overlooked That It Arrived At Contradictory Claim
`Constructions of “During Showtime” .................................................... 1
`
`The Board Overlooked Patent Owner’s Response to Petitioner’s
`Obviousness Rationales ......................................................................... 6
`
`The Board Misapprehended Patent Owner’s Responses to Petitioner’s
`Obviousness Theory Regarding A Diagnostic Message Comprising
`“Power Level Per Subchannel Information . . . Based on a Reverb
`Signal” ................................................................................................... 8
`
`The Board Abused Its Discretion in Its Procedure For Raising,
`Considering, and Ruling Upon Objections to New Reply Evidence .... 9
`
`CONCLUSION ................................................................................... 12
`
`
`
`
`
`i
`
`
`
`
`
`I.
`
`INTRODUCTION
`
`Patent Owner TQ Delta, LLC (“Patent Owner”) respectfully requests a
`
`rehearing, pursuant to 37 C.F.R. §42.71(d), of the Board’s October 26, 2017 Final
`
`Written Decision (Paper 38) (“Final Decision”) as to claims 91-10 of U.S. Pat. No.
`
`8,432,956 (“the ’956 patent”). In particular, 37 C.F.R. § 42.71(d) provides that
`
`rehearing by the Board is appropriate where the Board “misapprehended or
`
`overlooked” matters. While Patent Owner believes the Board made other errors in
`
`its Final Written Decision and does not waive its right to appeal, Patent Owner
`
`submits that the Board misapprehended or overlooked at least several matters as
`
`discussed below.
`
`II. ARGUMENT
`
`A. The Board Overlooked That It Arrived At Contradictory Claim
`Constructions of “During Showtime”
`
`In this proceeding (IPR2016-01007) the Board held that it is “not persuaded
`
`
`
`by Patent Owner’s negative construction, which excludes initialization from
`
`normal communication.” (Paper 38 at 9 (emphasis added).)
`
`Yet in another related proceeding (IPR2016-01008), the Board recognized
`
`that “[b]oth parties agree that ‘during Showtime’ connotes normal communications
`
`of a DSL transceiver, which excludes initialization and training, as our
`
`construction of ‘during Showtime’ reflects.” (IPR2016-1007, Paper 41 at 37
`
`(emphasis added).)
`
`
`
`1
`
`
`
`
`
`As a result, the Board’s bases for finding that the prior art rendered obvious
`
`the claimed “SNR during Showtime” are not clear. Is it because the Board believes
`
`that measuring SNR during initialization still satisfies the claim? Or is it because
`
`the Board believes that the prior art teaches measuring SNR during normal
`
`communications, rather than just during initialization? And if it is the latter, the
`
`Board appears to have misapprehended Patent Owner’s arguments and evidence.
`
`Specifically, in this proceeding, the Board found that “the noise gathering in
`
`Milbrandt is not limited to the initialization step but also occurs during Showtime.”
`
`(Paper 41 at 30.) For that proposition, the Board cited to Milbrandt’s discussion of
`
`measuring noise “during the normal course of operation.” (Id. at 30-31.) But the
`
`Board conceded that Milbrandt referred to that normal course of operation as
`
`“modem training,” which “suggests it is not ‘during Showtime.’” (Id.) As a result,
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`the Board found that “Milbrandt is, at best, ambiguous on this point” and it was
`
`“not persuaded that it is inconsistent with the portion of Milbrandt relied on by
`
`Petitioner that states the modem ‘may operate as a spectrum analyzer during
`
`operation’ and ‘measure[s] noise characteristics of a subscriber line.” (Id.)
`
`But the Board misunderstood that Milbrandt was using the phrase “during
`
`operation” or “during the normal course of operation” differently in different
`
`places. Rather, Patent Owner explained how column 10, lines 41 to 46 of
`
`Milbrandt showed that the entirety of Milbrandt, including the portion relied upon
`
`
`
`2
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`
`
`
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`by Petitioners (column 12, lines 58 to 63), did not disclose measuring any noise
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`information “during Showtime.” Namely, the passage in Milbrandt relied upon by
`
`Petitioners (column 12, lines 58 to 63) only states that “[t]he noise information for
`
`a particular subscriber
`
`line 16 may be determined by measuring noise
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`characteristics of a subscriber line 16 during operation . . . .” Ex. 1011 at 12:58-63.
`
`Patent Owner’s expert very specifically explained, however, that when Milbrandt
`
`was referring to measuring noise “during operation,” it was not referring to doing
`
`so during Showtime. See Ex. 2001 at ¶ 62 (“Milbrandt discloses, moreover, that
`
`while it gathers noise ‘during operation,’ it only does so ‘during modem training.’),
`
`cited at Paper 13 at 26. This discussion was with respect to Milbrandt’s use of the
`
`phrase “during operation” in general and throughout. Patent Owner’s expert
`
`merely pointed to column 10, lines 43-46 of Milbrandt as an example to illustrate
`
`that when Milbrandt’s phrase “during operation” meant “modem training.” See id.
`
`There is nothing contradictory about this statement, as initialization is an
`
`“operation.” See id.
`
`As such, in the only spot where Milbrandt actually explains what was meant
`
`by “operation,” it is clear that it meant “modem training.” See id. In contrast, at
`
`column 12, lines 58-63, Milbrandt does not say that it meant something different
`
`with the phrase or that “during operation” was intended to refer to “during
`
`Showtime.” Mere speculation by Petitioners and their expert, Dr. Kiaei, about
`
`
`
`3
`
`
`
`
`
`what Milbrandt might have meant at column 12, lines 58-63 is not evidence.
`
`And if there is any ambiguity, it favors Patent Owner, given that Petitioners
`
`bear the burden of proof. The Board itself found that Milbrandt’s disclosure that
`
`“modem training” occurs “during the normal course of operation of system 10”
`
`was “at best, ambiguous.” Paper 38 at 31. So that begs the question. How is
`
`Milbrandt’s disclosure of measuring noise “during operation” at column 12, lines
`
`58 to 63 any different or less ambiguous? Indeed, Petitioner’s expert, Dr. Kiaei,
`
`confirmed that it was not clear whether Milbrandt’s modem determined test and
`
`diagnostic information ‘during operation or ‘during Showtime.” See Paper 30,
`
`citing Ex. 2011 at 62-63. And when asked how Milbrandt determined noise during
`
`Showtime, he did not have an opinion. (See id.)
`
`If Milbrandt’s phrase “during operation” is ambiguous, however, then the
`
`Board’s reliance on that disclosure to render claims of the ’956 patent unpatentable
`
`is improper.2 See, e.g., Deller’s Walker on Patents, Vol. 1 at 286 (“ambiguous
`
`
`2 The Board for the first time in its Final Written Decision found that Milbrandt’s
`
`disclosure of “during operation” is ambiguous, even though neither party had made
`
`such an argument. Accordingly, Patent Owner is entitled to address this issue on
`
`which it was not given prior notice. See SAS Inst., Inc. v. ComplementSoft, LLC,
`
`825 F.3d 1341 at *20-21 (Fed. Cir. June 10, 2016) (“An agency may not change
`
`
`
`
`
`4
`
`
`
`
`
`disclosures do not anticipate”); Par Pharm., Inc. v. TWi Pharm., Inc., 773 F.3d
`
`1186, 1195 (Fed. Cir. 2014) (even in the context of obviousness, mere
`
`“probabilities and possibilities” that a prior art reference discloses a claim
`
`limitation are not enough).
`
`
`
`Similarly, the Board appears to have misapprehended the parties’ arguments
`
`and the evidence regarding the disclosure of the ANSI T1.413 reference. The
`
`Board found that ANSI T1.413 also teaches measuring “SNR during Showtime”
`
`from its disclosure that “SNR, as measured by the receivers” is “externally
`
`accessible from the ATU-C,” or its disclosure that SNR is available at “any other
`
`time following the execution of initialization and training.” Paper 38 at 30.
`
`However, not even Petitioners had argued in the Petition that ANSI T1.413
`
`discloses measuring “SNR during Showtime”—that is why Petitioners relied on
`
`Milbrandt for alleged disclosure of measuring “noise” “during Showtime.” See
`
`Paper 13, Patent Owner’s Response at 24-27. Rather, Petitioners only alleged that
`
`ANSI T1.413 refers to SNR being “externally accessible” or “available” during
`
`Showtime—which says nothing about when it is measured. See id. Even if ANSI
`
`T1.413 discloses making SNR available or accessible during Showtime, that does
`
`
`theories in midstream without giving respondents reasonable notice of the change
`
`and the opportunity to present argument under the new theory.”)
`
`
`
`5
`
`
`
`
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`not mean it was measured during Showtime, as opposed to during initialization.
`
`B.
`
`The Board Overlooked Patent Owner’s Response to Petitioner’s
`Obviousness Rationales
`
`Rehearing is also appropriate because the Board overlooked certain
`
`arguments and evidence presented by Patent Owner. Specifically, when the Board
`
`addressed Petitioners’ rationales in the petition for modifying Milbrandt in view of
`
`ANSI T1.413, it overlooked some of Patent Owner’s responses.
`
`Namely, the Board found that “Patent Owner’s arguments do not address
`
`Petitioner’s motivation to combine Milbrandt and ANSI T1.413 to (1) “allow the
`
`subscriber modem to send back upstream to the central office modem the power
`
`levels to be used on each DMT sub-carrier” or (2) to “make Milbrandt’s system
`
`compliant with the ANSI T1.413 standard.” Paper 38 at 32-33. But Patent Owner
`
`did address both of these arguments.
`
`Patent Owner explained in its Preliminary Patent Owner response that
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`Petitioners’ first argument was not a sufficient obviousness rationale because it
`
`was just reciting the end result (i.e., adding feature B to reference A so that
`
`reference A has feature B). See Paper 7 at 31. And Patent Owner also explained
`
`that complying with the ANSI T1.413 standard was not a reason to modify
`
`Milbrandt in the proposed manner, because Milbrandt already complied with the
`
`ANSI T1.413 standard and Petitioner had not shown that ANSI T1.413 even
`
`required determining SNR “during Showtime” in the first place (as opposed to just
`
`
`
`6
`
`
`
`
`
`making it “available.”3 See id. at 6, 34, 40. Importantly, the Preliminary Patent
`
`Owner response is part of the record and must be considered in making a Final
`
`Written Decision. See, e.g., Perfect Surgical Techniques, Inc. v. Olympus Am.,
`
`Inc., 841 F.3d 1004, 1012 (Fed. Cir. 2016) (the Board must consider the “whole
`
`record”). Patent Owner had not repeated these arguments in its later Response
`
`only because the Board had not adopted these rationales of Petitioners in its
`
`Institution Decision.
`
`Moreover, the Board appears to have at least partly addressed Patent
`
`Owner’s argument when it stated that “we do not read Milbrandt as describing full
`
`compliance with ANSI T1.413, but instead states that an embodiment supports
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`communication using ADSL techniques that comply with ANSI Standard T1.413.”
`
`(Paper 38 at 33.) But not even Petitioner had made such an argument, and there is
`
`no evidence in the record in this regard. See Brand v. Miller, 487 F.3d 862, 869
`
`(Fed. Cir. 2007) (“We therefore hold that . . . it is impermissible for the Board to
`
`base its factual findings on its expertise, rather than on evidence in the record …”).
`
`
`
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`3 Similarly, the Board found that Petitioner’s expert testimony that “compliance
`
`with ANSI T1.413 would have motivated the combination” was “unrebutted.” See
`
`Paper 38 at 33-34. But that is also incorrect for the same reasons.
`
`
`
`7
`
`
`
`
`
`C. The Board Misapprehended Patent Owner’s Responses to
`Petitioner’s Obviousness Theory Regarding A Diagnostic Message
`Comprising “Power Level Per Subchannel Information . . . Based
`on a Reverb Signal”
`
`The Board’s findings with respect to this claim limitation also show that the
`
`Board misapprehended the nature of the limitation, Petitioners’ arguments, and
`
`Patent Owner’s rebuttal evidence. Indeed, the Board’s findings support exactly
`
`what Patent Owner had argued.
`
`Specifically, the claims require including in the diagnostic message “power
`
`level per subchannel information . . . based on a Reverb signal.” Petitioners’
`
`theory was that it would have been obvious to modify Milbrandt to provide this
`
`feature in view of ANSI T1.413, in order to adjust automatic gain control. See
`
`Paper 2 at 17-18, 49. The Board adopted this theory in its Final Written Decision.
`
`See Paper 38 at 34.
`
`But there is a glaring problem with this theory—power level per subchannel
`
`information, even if it is based on a Reverb signal, is not used to adjust AGC.
`
`Only the Reverb signal itself is used to adjust AGC. See Paper 13 at 22, citing
`
`1014 at 94 (“C-REVERB is a signal that allows the ATU-R receiver to adjust its
`
`automatic gain control (ACG) to an appropriate level.”) So adjusting AGC would
`
`only be a reason to add just a Reverb signal to Milbrandt—not to go the step
`
`further and determine power level per subchannel information based on that
`
`Reverb signal. Determining power level per subchannel information has nothing
`
`
`
`8
`
`
`
`
`
`to do with adjusting AGC. See Paper 13 at 22-23. Indeed, the Board itself
`
`recognized this fact when it stated that “ANSI T1.413 discloses the use of Reverb
`
`[i.e., not PSD based on Reverb] to adjust AGC, where gain is based on power,
`
`represented by PSD.” Paper 38 at 34. And the Board cited to Patent Owner’s
`
`argument that “ANSI T1.413 provides a reason to send the Reverb signal in
`
`Milbrandt, but does not support a power level per subchannel based on those
`
`Reverb signals.” Paper 38 at 34. In other words, the Reverb signal itself is used
`
`adjusts the AGC—not the PSD. As the Board itself recognized, the PSD is
`
`something that is just separately related to gain. Meanwhile, Petitioners’ only
`
`“evidence” to the contrary is just the conclusory opinion of Dr. Kiaei, which is
`
`contradicted by the ANSI T1.413 standard itself. See In re Am. Acad. of Sci. Tech
`
`Ctr., 367 F.3d 1359, 1368 (Fed. Cir. 2004) (the Board should give no weight to
`
`conclusory expert opinions); Rohm & Haas Co. v. Brotech Corp., 127 F.3d 1089,
`
`1092 (Fed. Cir. 1997) (same); Ashland Oil, Inc. v. Delta Resins & Refractories,
`
`Inc., 776 F.2d 281, 294 (Fed. Cir. 1985) (same).
`
`D. The Board Abused Its Discretion in Its Procedure For Raising,
`Considering, and Ruling Upon Objections to New Reply Evidence
`
`Finally, it is also unclear from the Board’s Final Written Decision whether it
`
`relied on evidence or arguments to which Patent Owner had objected as being
`
`improper new reply arguments. If it did, the Board abused its discretion with
`
`
`
`9
`
`
`
`
`
`respect to its process for Patent Owner to make such objections, and the manner in
`
`which it only vaguely and generally ruled upon the objections.
`
`Namely, the Board only allowed Patent Owner to submit an argument-less
`
`“listing” of improper new Reply arguments without any explanation, while
`
`allowing Petitioner to submit a “response” identifying to what in Patent Owner’s
`
`Response it was replying to. See Paper 19. The Board also refused to allow Patent
`
`Owner to provide any explanation or argument on the Board call on this issue.
`
`Patent Owner submits that such a process is unreasonable for several
`
`reasons, including (a) the Board’s procedure did not satisfy the necessary showings
`
`under the controlling rules and law (e.g., the rules require more than just
`
`considering whether a Petitioner’s Reply is in “response” to something that Patent
`
`Owner said and prohibit any arguments or evidence that could have been brought
`
`earlier) and (b) the Board’s procedure denied Patent Owner an opportunity to be
`
`fully heard without a reasoned justification (e.g., any time the Board may have
`
`saved by not reviewing the parties’ arguments was offset by not being informed by
`
`the parties of the nature of the disputes). See, e.g., Redline Detection, LLC v. Star
`
`Envirotech, Inc., 811 F.3d 435, 442 (Fed. Cir. 2015) (the Board abuses its
`
`discretion in how it manages its permissive rules of trial proceeding if it is “(1)
`
`clearly unreasonable, arbitrary, or fanciful” or “(4) involves a record that contains
`
`no evidence on which the Board could rationally base its decision.”); Ultratec, Inc.
`
`
`
`10
`
`
`
`
`
`v. CaptionCall, LLC, 872 F.3d 1267, 1272 (Fed. Cir. 2017) (finding the PTAB
`
`abused its discretion in refusing to allow Patent Owner to submit “the information
`
`necessary to make a reasoned decision,” by allowing Patent Owner to submit no
`
`argument in an email to the Board and allowing only general “characterizations” of
`
`the disputed evidence during the conference call).
`
`Moreover, in its Final Written Decision, the Board again abused its
`
`discretion in how it addressed and ruled upon Patent Owner’s objections and
`
`observations. The Board addressed Patent Owner’s objections in a single footnote,
`
`without explanation as to why it believed that each of the specific objected-to
`
`arguments or evidence in Petitioners’ Reply was permissible. See Paper 38 at fn.
`
`5. As such, there is not a sufficient record for appeal. See Ultratec, Inc. v.
`
`CaptionCall, LLC, 872 F.3d 1267, 1273 (Fed. Cir. 2017) (the Board may not
`
`“make significant evidentiary decisions without providing an explanation or a
`
`reasoned basis for its decisions” and “[f]or judicial review to be meaningfully
`
`achieved within these strictures, the agency tribunal must present a full and
`
`reasoned explanation of its decision.”).
`
`For example, the Board did not address: Why could Petitioner not have
`
`submitted each of the objected-to arguments or evidence earlier, in its Petition?
`
`How did Petitioner establish a prima facie case of obviousness without the
`
`objected-to evidence and arguments?
`
`
`
`11
`
`
`
`
`
`III. CONCLUSION
`
`For the foregoing reasons, Patent Owner respectfully requests rehearing of
`
`the Board’s Final Decision, and reconsideration of the Board’s findings of
`
`unpatentability for claims 1-10 of the ’956 patent.
`
`Respectfully submitted,
`
`Dated: November 27, 2017
`
`
`
`
`
`
`
`
`
`/Peter J. McAndrews/
`Peter J. McAndrews
`Registration No. 38,547
`McANDREWS, HELD & MALLOY, LTD.
`500 West Madison Street, 34th Floor
`Chicago, Illinois 60661
`Office: (312) 775-8000
`Fax: (312) 775-8100
`pmcandrews@mcandrews-ip.com
`
`Lead Counsel for Patent Owner
`
`
`
`12
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`
`
`
`
`
`
`
`
`CERTIFICATE OF SERVICE
`
`I hereby certify, pursuant to 37 C.F.R. Section 42.6, that a complete copy of
`
`the attached PATENT OWNER’S REQUEST FOR REHEARING was served
`
`via electronic mail on November 27, 2017, by electronic mail to the following:
`
`Lead Counsel
`David L. McCombs
`HAYNES & BOONE, LLP
`2323 Victory Ave., Suite 700
`Dallas, TX 75219
`Tel. 214-651-5533
`Fax 214-200-0853
`david.mccombs.ipr@haynesboone.com
`
`John M. Baird
`Duane Morris LLP
`505 9th St. NW, Ste 1000
`Washington, DC 20004
`Tel. 202-776-7819
`Fax 202-776-7801
`JMBaird@duanemorris.com
`
`
`Dated: November 27, 2017
`
`
`
`
`
`Back-up Counsel
`Theodore M. Foster
`Tel. 972-739-8649
`Gregory P. Huh
`Tel. 972-739-6939
`Russell Emerson
`Tel. 214-651-5328
`HAYNES & BOONE, LLP
`2323 Victory Ave., Suite 700
`Dallas, TX 75219
`Fax 972-692-9156
`ipr.theo.foster@haynesboone.com
`gregory.huh.ipr@haynesboone.com
`russell.emerson.ipr@haynesboone.com
`Christopher Tyson
`Duane Morris LLP
`505 9th St. NW, Ste 1000
`Washington, DC 20004
`Tel. 202-776-7819
`Fax 202-776-7801
`CJTyson@duanemorris.com
`
`
`
`
`/Peter J. McAndrews/
`
`
`
`
`
`
`
`Peter J. McAndrews
`Registration No. 38,547
`McANDREWS, HELD & MALLOY,
`LTD.
`500 West Madison Street, 34th Floor
`Chicago, Illinois 60661
`Telephone: (312) 775-8000
`
`13
`
`
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