UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_____________
`
`HONEYWELL INTERNATIONAL, INC.
`
`Petitioner
`
`v.
`
`ALLURE ENERGY, INC.
`
`Patent Owner
`_____________
`
`Case No. IPR2016-___
`Patent No. 8,509,954
`
`PETITIONER’S EXHIBIT NO. 1001
`
`
`_____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_____________
`
`HONEYWELL INTERNATIONAL, INC.
`
`Petitioner
`
`v.
`
`ALLURE ENERGY, INC.
`
`Patent Owner
`_____________
`
`Case No. IPR2016-___
`Patent No. 8,509,954
`
`PETITIONER’S EXHIBIT NO. 1001
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`_____________
`
`HONEYWELL INTERNATIONAL, INC.
`
`Petitioner
`
`v.
`
`ALLURE ENERGY, INC.
`
`Patent Owner
`_____________
`
`Case No. IPR2016-___
`Patent No. 8,509,954
`
`DECLARATION OF GEOFF WILLIAMSON
`
`Honeywell Exhibit 1001, Page 1
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`
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`TABLE OF CONTENTS
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`Page
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`QUALIFICATIONS....................................................................................... 2
`I.
`LEGAL STANDARDS .................................................................................. 6
`II.
`III. MATERIALS REVIEWED ......................................................................... 11
`IV. ANALYSIS OF GALVIN IN VIEW OF KANSAL.................................... 13
`V.
`ANALYSIS OF NAGEL IN VIEW OF IVANG......................................... 34
`VI. ADDITIONAL REMARKS......................................................................... 45
`
`i
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`Honeywell Exhibit 1001, Page 2
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`
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`I, Geoff Williamson, declare:
`I make this declaration based on my personal knowledge and what
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`was known by one skilled in the art prior to early 2009. If called upon to
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`testify as to the truth of the facts set forth in this declaration, I could and
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`would do so competently. I have been retained by Honeywell Inc.
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`(“Honeywell”) to provide this declaration relating to a petition by Honeywell
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`for inter partes review of U.S. Patent 8,509,954 (“the ‘954 patent”), owned by
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`Allure Energy, Inc.
`
`QUALIFICATIONS
`I.
`A copy of my curriculum vitae is attached at the end of this
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`declaration. I have 30+ years of experience working in the areas of energy,
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`efficiency, control systems, alternative energy generation, and the Smart Grid.
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`I studied Mechanical Engineering with an emphasis on Heating, Ventilation,
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`and Cooling (HVAC) at Royal Melbourne Institute of Technology (now called
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`“RMIT University”) in 1981. Prior to this I received trade qualifications in the
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`field of HVAC and refrigeration.
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`I initially worked for about 15 years in Australia as a sales
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`engineer and business unit manager for Email Limited (Australia), Johnson
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`Controls Australia Limited, and Honeywell Australia Limited. During that
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`time, I became familiar with control systems, including temperature control
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`2
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`Honeywell Exhibit 1001, Page 3
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`
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`systems for buildings, and the needs of customers for such systems. Such
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`systems included thermostat-mediated control as a primary interface between
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`the users and the systems.
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`After having moved to the United States, I joined CellNet Data
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`Systems in California. At CellNet Data Systems, I worked in business
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`development and network application, where I was the principal manager
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`involved in what has generally been described as the first wireless 2-way
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`deployment of Internet connected thermostats by a utility into residential
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`locations for demand management and price of supply driven usage
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`management in North America. I then worked in business development for
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`Sage Systems, which was a start-up company focused on leveraging residential
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`demand side energy capacity for use by the electricity distribution market.
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`That work generally related to efforts to communicate the benefits of Sage’s
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`technology, which permitted over-the-Internet and wireless control of
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`thermostats. I then became vice-president of business development for an
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`incubator group within Invensys PLC, which was developing advanced energy
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`demand response systems and services for the energy distribution and supply
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`markets of North America and Europe. In that role, I worked with partners to
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`push the adoption of smart home technology for energy use. That work
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`launched a precursor to the Advanced Metering Infrastructure (AMI), now
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`3
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`Honeywell Exhibit 1001, Page 4
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`
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`Smart Grid with the California Public Utilities Commission. This work gave
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`me further experience in understanding the needs of both energy producers and
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`energy users, and the capabilities of technologies for meeting those needs.
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`In 2005, I started a consulting firm that helped evaluate the
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`commercial viability of new technologies, focused on communications systems
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`and their applications to energy, efficiency, and the environment. My clients
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`during this time included Nivis, Control4, Energate, and Trilliant, which are
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`wireless network and premises control companies. I ultimately left to work for
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`one client, Trilliant Inc., which developed a smart energy distribution platform
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`to help energy producing and distributing companies obtain information about
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`energy usage by their customers, essentially at the middle of the so-called
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`Smart Grid.
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`In early 2009 I returned to consulting, with a focus on clean tech
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`and the Smart Grid. In that role, I helped a number of companies understand
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`consumer needs and viability of products in the areas of home automation,
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`demand response, distributed controls networks, thermostat operation and
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`usage, and other related technologies. Of note was the engagements I had with
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`Energate, a smart thermostat company based in Ontario, Canada and active
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`across all of North America primarily with regards to energy utilities and their
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`demand response and dynamic pricing programs, and with Control4, and their
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`4
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`Honeywell Exhibit 1001, Page 5
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`
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`progression from home automation into demand response and energy
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`management. More recently, I have worked for a company developing
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`extremely low resistance materials to increase the efficiency of generation,
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`distribution, and use of electricity. I am also the founding CEO of a company
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`developing a solid state “turbine on a chip” as a disruptive new way to
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`generate electricity. I currently serve on the advisory board for a company
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`called CandiControls, which focuses on enabling the “internet of things” as
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`applicable to premises control and management.
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`During my years with Sage and Invensys, I was active with the
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`Internet Home Alliance and with an organization that is now called the Zigbee
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`Alliance. I was the Sage company representative for the Internet Home
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`Alliance at the time of its creation, and I worked with it to demonstrate the
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`connectivity of devices such as thermostats to the Internet and to other
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`thermostats over wireless networks.
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`Based upon my knowledge and experience with energy control
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`systems, I am aware of the needs and the challenges faced in producing
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`automation products that are well-liked by users and that can be employed to
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`reduce energy usage, particularly by early 2009. I routinely discussed the
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`needs of energy users and energy producers with those parties, and the
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`manners in which new technologies could be used to meet those needs. I also
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`5
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`Honeywell Exhibit 1001, Page 6
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`
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`worked with others who were architecting and developing systems to meet
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`those needs, and had detailed conversations with these individuals about their
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`work on those systems. I am also very familiar with the terminology of energy
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`generation, distribution, and control, and of home automation at the time.
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`II. LEGAL STANDARDS
`In preparing my analysis, I have applied the legal standards
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`described below, which were provided to me by counsel for Honeywell.
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`Proper Viewpoint: I understand that generally, the technical
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`issues in this proceeding are to be viewed from the perspective of a person
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`having an ordinary level of skill in the art at the time the invention was made
`
`(around late 2009). I understand the district court in the litigation between
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`Allure and Nest1 generally determined (and the parties to the litigation agreed),
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`at least preliminarily, that such a person would have: a bachelor’s of science
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`degree in mechanical or electrical engineering and at least two years of
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`experience in the field of electronic and mechanical systems related to energy
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`management and control systems. I do not disagree with this definition, but
`
`note that in-home automation is a type of control system. Additional education
`
`might substitute for some of the experience, and substantial experience might
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`1 Allure Energy, Inc. v. Nest Labs, Inc. et al, Case no. 9:13-cv-102 in the Eastern District of
`Texas.
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`6
`
`Honeywell Exhibit 1001, Page 7
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`
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`substitute for some of the educational background. I personally possess at least
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`the level of skill of a person of ordinary skill in the relevant art, and I can
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`speak from the perspective of an ordinarily skilled artisan. I have formulated
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`my analysis on this matter based on personal experience and what was
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`considered standard by one skilled in the art prior to late 2009.
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`Construing Claim Terms: I understand that Honeywell bears the
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`burden of proving unpatentability by a preponderance of the evidence in a
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`Patent Office proceeding. I understand that a validity determination involves
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`first construing the claims to determine the meaning they would have had to
`
`one of ordinary skill in the art, and then applying them to the so-called prior
`
`art. I understand the applicable claim construction standard in these
`
`proceedings requires terms be given their “broadest reasonable interpretation”
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`in light of the specification, as they would be interpreted by one of ordinary
`
`skill in the art. I understand that under a broadest reasonable interpretation,
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`words of the claim must be given their plain meaning, unless such meaning is
`
`inconsistent with the specification. The plain meaning of a term means the
`
`ordinary and customary meaning given to the term by those of ordinary skill in
`
`the art at the time of the invention.
`
`General Prior Art Invalidity: It is my understanding that a patent
`
`claim is invalid (a) if the claimed invention was known or used by others in the
`
`7
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`Honeywell Exhibit 1001, Page 8
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`
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`United States, or patented or described in a printed publication anywhere,
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`before the invention date; or (b) if the claimed invention was in public use or
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`on sale in the United States, or patented or described in a printed publication
`
`anywhere, more than one year prior to the earliest priority date. For purposes
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`of the current proceeding, I understand that “prior art” in the form of printed
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`publications and patents or patent applications may be considered, but prior art
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`in the form of public knowledge and use, and sales may not be considered. I
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`also understand that prior art can take the form of a patent application filed
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`prior to the priority date of the ‘954 patent. If the patent application was
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`granted, then the original filing must support at least one claim in the granted
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`patent. For the purposes of my opinions here, I assume that the ‘954 patent is
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`entitled to its earliest claimed priority date, August 21, 2009.
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`Anticipation Invalidity: It is my understanding that a claimed
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`invention is invalid as “anticipated” if each and every element of the claim has
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`been disclosed in a single prior art reference. It is my understanding that prior
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`art is defined by the patent statutes, and includes various categories of
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`information. It is my understanding that a printed publication is prior art with
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`regard to a claimed device or method if it was published more than one year
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`prior to the earliest priority date of the patent in question, or if it was published
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`before the date of invention of the device or method.
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`8
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`Honeywell Exhibit 1001, Page 9
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`
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`Obviousness Invalidity: It is my understanding that a patent
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`claim is invalid as “obvious” if the differences between the patented subject
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`matter and the prior art are such that the subject matter as a whole would have
`
`been obvious at the time the invention was made to a person having ordinary
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`skill in the art. I understand the ultimate conclusion of whether a claim is
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`obvious should be based upon several factual considerations. First, I must
`
`consider the level of ordinary skill in the field that someone would have had at
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`the time the claimed invention was made. Second, I must consider the scope
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`and content of the prior art. Third, I must consider what difference, if any,
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`existed between the claimed invention and the prior art. Importantly, I
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`understand that I must be careful not to determine obviousness using the
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`benefit of hindsight and that many true inventions might seem obvious after
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`the fact.
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`I understand that a patent claim composed of several elements is
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`not proved obvious merely by demonstrating that each of its elements was
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`independently known in the prior art. In evaluating whether such a claim
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`would have been obvious, I may consider whether I find a reason that would
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`have prompted a person of ordinary skill in the field to combine the elements
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`or concepts from the prior art in the same way as in the claimed invention. I
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`understand there is no single way to define the line between true inventiveness
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`9
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`Honeywell Exhibit 1001, Page 10
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`
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`on one hand (which is patentable) and the application of common sense and
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`ordinary skill to solve a problem on the other hand (which is not patentable).
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`As one helpful example, a combination of familiar elements operating
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`according to known methods is likely to be obvious when it yields predictable
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`results. Also, if a person of ordinary skill can implement a “predictable
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`variation” in a prior art device, and would see the benefit from doing so, such a
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`variation is obvious. And, I may also consider whether there is some teaching
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`or suggestion in the prior art to make the modification or combination of
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`elements claimed in the patents-in-suit. Moreover, market forces or other
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`design incentives may be what produced a change, rather than true
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`inventiveness. It is my understanding that I may consider whether the change
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`was merely the predictable result of using prior art elements according to their
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`known functions, or whether it was the result of true inventiveness. I
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`additionally should consider whether the innovation applies a known technique
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`that had been used to improve a similar device or method in a similar way. I
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`may also consider whether the claimed invention would have been obvious to
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`try, meaning that the claimed innovation was one of a relatively small number
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`of possible approaches to the problem with a reasonable expectation of success
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`by those skilled in the art.
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`10
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`Honeywell Exhibit 1001, Page 11
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`
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`I further understand that the “teaching, suggestion, or motivation”
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`test (i.e., asking whether the prior art includes a “teaching, suggestion, or
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`motivation” to combine the prior art so as to achieve the claimed invention) is
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`a useful guide in establishing a rationale for combining elements of the prior
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`art, though a claimed invention can be obvious without it.
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`III. MATERIALS REVIEWED
`In forming my opinions, I reviewed U.S. Patent 8,509,954 to Imes
`
`et al. (“the ‘954 patent”), relevant portions of its prosecution history and the
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`prosecution histories of related patents, and the following prior art references:
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`(1) U.S. Pub. No. 2010/0250590 to Galvin (“Galvin”), (2) U.S. Patent No.
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`7,953,518 to Kansal et al. (“Kansal”), (3) U.S. Patent No. 8,406,933 to Nagel
`
`et al. (“Nagel”), and (4) PCT Pub. No. WO2009/036764 to Ivang et al.
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`(“Ivang”). I also have reviewed U.S. Prov. Appl. No. 61/234,963 to Nagel et
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`al. (“the ‘963 Provisional”), the sections cited below of the Energy Policy Act
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`of 2005 and Energy Independence and Security Act of 2007, and Grayson C.
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`Heffner and Charles A. Goldman, Demand Responsive Programs – An
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`Emerging Resource for Competitive Electricity Markets?.
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`Based upon my knowledge and experience in this art and my
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`review of these documents, I understand what the ‘954 patent would have
`
`described and enabled to a person of ordinary skill in the art prior to the time
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`11
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`Honeywell Exhibit 1001, Page 12
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`
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`of the alleged priority date of the ‘954 patent (hereinafter “one skilled in the
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`art” and similar phrases). My findings, explained below, are based on my
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`education, experience, and background in energy control systems, and my
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`study of the above documents.
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`The energy industry has utilized demand response systems for
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`decades for both industrial and residential purposes. More recently, but well
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`before the ‘954 patent, demand response was combined with “smart grid”
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`technologies to provide flexible and real-time participation by energy users.
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`Both of these known concepts were later addressed in United States legislation
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`in the mid-2000s. The Energy Policy Act of 2005 was signed into law by
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`President George W. Bush in August 2005, and sought to quantify the benefits
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`of demand response. Energy Policy Act, Section 1252, Smart Metering. The
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`Energy Independence and Security Act of 2007 was signed in to law
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`by President George W. Bush in December 2007, listing many attributes of
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`existing “smart grids,” including “[d]evelopment and incorporation of demand
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`response, demand-side resources, and energy-efficiency resources”;
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`“[d]eployment of ‘smart’ technologies (real-time, automated, interactive
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`technologies that optimize the physical operation of appliances and consumer
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`devices) for metering, communications concerning grid operations and status,
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`and distribution automation. (6) Integration of ‘smart’ appliances and
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`12
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`Honeywell Exhibit 1001, Page 13
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`
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`consumer devices. (7) Deployment and integration of advanced electricity
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`storage and peak-shaving technologies . . . ”; and “(8) Provision to consumers
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`of timely information and control options. (9) Development of standards for
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`communication and interoperability of appliances and equipment connected to
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`the electric grid, including the infrastructure serving the grid.” The Energy
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`Independence and Security Act of 2007, Title XIII, Smart Grid. At this same
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`time, I was developing smart grid products at Invensys that were responsive to
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`demand response events, and that based user participation on preferences,
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`including the location of the user. The energy industry has utilized demand
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`response systems for decades for both industrial and residential purposes.
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`More recently, but well before the ‘954 patent, demand response was
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`combined with “smart grid” technologies to provide flexible and real-time
`
`participation by energy users. Examples of this can be found in a 2001 article
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`by Dr. Grayson C. Heffner and Charles A. Goldman. See Exhibit 1009.
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`IV. ANALYSIS OF GALVIN IN VIEW OF KANSAL
`Galvin discloses a system for managing electric power demand
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`among a large number of small users. One of ordinary skill in the art would
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`understand that demand response systems were well-known at the time the
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`‘954 patent was filed, as evidenced by at least Galvin. See Exhibit 1004, at ¶ 6
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`(“Large utilities, desiring to avoid the use of high-priced peaking generators
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`13
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`Honeywell Exhibit 1001, Page 14
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`
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`when possible, also routinely participate in demand response programs.”). In
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`particular, Galvin describes a system that identifies energy capacity and
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`reduces appliance power usage during a given time period. See, e.g., Exhibit
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`1004, at ¶¶ 18–21. Galvin discloses that “consumers and small businesses
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`participate voluntarily in supply (generation and storage) or demand
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`(consumption) management programs by establishing preferences.” Exhibit
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`1004 at ¶ 20. Galvin’s “digital exchange receives preferences from a plurality
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`of exchange participants, and these preferences are used at least in part to
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`create response profiles relevant to the participants, and at least some of the
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`response profiles are aggregated into response packages with defined statistical
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`properties.” Exhibit 1004 at ¶ 14. One having ordinary skill in the art would
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`understand that a “response package” represented the aggregate capacity of
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`multiple sites. Because Galvin’s system manages demand programs by
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`creating response packages with defined statistical properties, Galvin’s system
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`is a “demand response system,” as I understand the term using the broadest
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`reasonable interpretation. At least Galvin demonstrates that demand response
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`systems were well-known at the time the ‘954 patent was filed. See Exhibit
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`1004, at ¶ 6 (“Large utilities, desiring to avoid the use of high-priced peaking
`
`14
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`Honeywell Exhibit 1001, Page 15
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`
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`generators when possible, also routinely participate in demand response
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`programs.”).
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`In order to create statistical properties for exchange participants,
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`Galvin has “consumers make their preferences concerning their willingness to
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`participate in energy management actions (that is, load reductions or provision
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`of power from generators or storage systems) on demand.” Exhibit 1004, at ¶
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`23. Based on those preferences, “all of the end users that make up the response
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`package are sent signals directing them to take the appropriate actions which
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`they previously volunteered to take.” Exhibit 1004 at ¶ 23. Kansal also
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`discloses a system and method for managing energy consumption in order to
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`reduce energy costs. Exhibit 1006 at Abstract. “The energy manager can
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`employ an algorithm that uses information such as energy price variation (e.g.,
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`demand response pricing), weather changes, and user’s presence/absence at
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`home to control the energy expenditure in a manner such that the desired
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`comfort levels are achieved with minimum cost.” Id. at 1:59–63. “The
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`proposed system thus helps reduce energy bills, helps utilities to reduce peak
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`provisioning costs, and helps protect the environment by reducing energy
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`usage and production.” Id. at 5:40–43. Both Galvin and Kansal are engaged in
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`the same field of endeavor, namely the controlling of energy consuming
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`appliances in order to maintain user preferences while reducing energy use
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`15
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`Honeywell Exhibit 1001, Page 16
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`during periods of high demand. One having ordinary skill in the art would
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`have found reasons to combine the teachings of Galvin and Kansal as
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`discussed below in order to provide a more efficient and responsive system,
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`because the energy management information would be received immediately
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`from a utility (the one entity that most naturally has access to such
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`information) and would thus be verified information.
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`Based on my review of Galvin, one having ordinary skill in the art
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`reading Galvin would understand that Galvin’s “Away” and “Home” profiles
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`are intended to be used based on whether a user is home or not. Galvin notes
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`that “preferences can be stated according to away or at home profiles, which
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`can be inferred or directly declared as is done with home security systems
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`when a user clicks ‘Away’ to tell the system he is leaving the house.” Exhibit
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`1004 at ¶ 45. When a user clicks ‘Away,’ one having ordinary skill would
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`understand that the user’s mobile phone—which is also away—can detect this
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`active, location based profile. See Exhibit 1004, at ¶¶ 25, 35, 36, 45Fig. 2
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`With regard to inferring whether the user has left the house, Galvin discusses
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`that “one might be able to infer that a user is at home based on dynamic
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`behavior of power usage.” Id. at ¶ 45. Similarly, Galvin discusses that “if there
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`has been usage of at least X kwh in the two hours prior to the period of
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`interest, then the user is likely at home” and that a user may be “away, as
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`16
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`Honeywell Exhibit 1001, Page 17
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`inferred by lack of use in the earlier period.” Id. at ¶ 19. Based on my review
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`of Galvin, one having ordinary skill in the art reading Galvin would
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`understand that Galvin’s “Away” and “Home” profiles as allowing a mobile
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`device to detect a user disposed away from a site.
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`Kansal discloses detecting a user location. Exhibit 1006 at 1:40–
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`46. Kansal discloses the use of external energy data to efficiently control an
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`energy sink (i.e., an energy consuming devices), and states that “the external
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`energy data can be, but is not limited to being, . . . global positioning service
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`(GPS) device, . . . sensors (e.g., . . . motion sensors, light sensing, heat sensing
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`. . . ), user state information external to the location, etc.” Id. at 4:46–5:9.
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`Kansal also discloses the use of internal energy data to efficiently control the
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`energy sink 104, and states that the “internal energy data can be, but is not
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`limited to being, . . . network resources within the home, motion sensors (e.g.,
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`to infer occupancy of various rooms within a location, frequency of activity,
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`etc.), heat sensors, . . . a portion of user state information internal to a location
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`related to the energy sink, user’s explicit information (e.g., preferences,
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`priorities, etc.), etc.” Id.
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`The detection of a location of a mobile device using global
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`positioning service (GPS) was traditionally used in prior art demand response
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`systems, as illustrated by Kansal. A skilled artisan reading Kansal would
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`17
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`Honeywell Exhibit 1001, Page 18
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`appreciate that Kansal’s GPS device is mobile device that has a location
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`determined by GPS technology. One having ordinary skill in the art would
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`have found reason to modify Galvin’s energy management system to use a
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`mobile GPS device, as illustrated by Kansal, or one or more of Kansal’s other
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`methods of detecting a user being disposed away from the site, in order
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`improve the accuracy of Galvin’s determination of whether a user is home or
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`away. Moreover, one having ordinary skill in the art would have found reason
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`to modify Galvin’s teachings to include a location determination using a
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`mobile GPS device in order to alleviate a user from needing to click “home”
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`and click “away” when entering and leaving the residence. One having
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`ordinary skill in the art would have recognized that detection of a user by
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`tracking a location of a GPS device would more quickly detect a user being at
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`a site as compared to systems that wait for a user to click a home button or that
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`require changes in energy use at the site, because (i) the user may sometimes
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`forget to click the home button, (ii) the home button may not be located
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`immediately inside the front door, and (iii) the user may not increase energy
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`usage significantly upon first arriving at the site. Moreover, one having
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`ordinary skill in the art would further have found reason to detect user location
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`using a mobile GPS device, as illustrated by Kansal, because it could alert
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`Galvin’s digital exchange to an expected time of arrival for a user, which
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`18
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`Honeywell Exhibit 1001, Page 19
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`would thus evaluate whether this arrival time would statistically impact
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`whether the user will comply with the demand response request.
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`Galvin discloses that “utilities or energy aggregators[] may
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`interact with a digital exchange 100 either directly or over the Internet 101
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`from a market interface 150.” Exhibit 1004 at ¶ 25. Additionally, Galvin’s
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`digital exchange 100 receives other types of information from utility
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`companies, such as information that identifies the types of power available and
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`information that identifies the amount of reduction needed. Id. at ¶ 25. Galvin
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`further notes that consumer preferences can include the type of energy (e.g.,
`
`wind energy) used to operate a load and that “a request is placed to the digital
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`exchange 100 for a package of wind power of sufficient quantity to provide for
`
`the given load.” Id. at ¶ 47. Because the digital exchange 100 communicates
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`with utilities and/or energy aggregators and is able to identify whether or not
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`energy is wind power or not, one having ordinary skill in the art reading
`
`Galvin would infer that Galvin receives information from utilities and/or
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`energy aggregators about the type of power available. Additionally, Galvin
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`explicitly recognizes that a “price to be paid for shedding the load (‘don’t take
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`this load offline remotely unless I will be paid $1 for the sacrifice’)” is used
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`for certain user preferences. Id. at ¶ 20. One skilled in the art would recognize
`
`that Galvin discloses that digital exchange 100 would receive energy pricing
`
`19
`
`Honeywell Exhibit 1001, Page 20
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`
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`and other energy management information from utilities, for example, in order
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`to determine the “level of criticality of the demand reduction effort” and in
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`order to determine the “price to be paid for shedding the load.” See id. at ¶ 20.
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`One skilled in the art would understand that the level of criticality of the
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`demand reduction effort would obviously come from a utility company
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`because Galvin discloses that utility companies request demand reduction
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`efforts and that the presence of a demand reduction effort would signal a high
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`demand period of energy because the presence of a demand reduction effort
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`indicates that demand is higher than a utility company desires. I also believe
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`that one skilled in the art would recognize that detection of pricing information
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`would necessarily include increases and decreases in price (because energy
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`prices naturally and necessarily change quite frequently over time), and the
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`increases in price would typically be due to an undersupply of energy (i.e., the
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`supply of energy does not equal the demand for energy, thus the price rises to
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`drive down the demand).
`
`Kansal discloses detecting energy management information from a
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`utility company associated with the site. For example, Kansal discloses that
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`“energy costs” can be taken into account by the energy manager to ensure that
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`heaters are being used in an efficient manner. Exhibit 1006 at 1:40–46. Kansal
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`indicates that the energy manager 102 can use external energy data and indicates
`
`20
`
`Honeywell Exhibit 1001, Page 21
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`
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`that “the external energy data can be, but is not limited to being, energy pricing data
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`(e.g., cost per unit, inferred rates, real time quotes, etc.), weather data, peak load
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`warnings, grid instability data, discounts for energy reduction (e.g., reduction of
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`costs if energy is not used at a particular time, etc.).” Id. at 4:46–53. Kansal
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`discloses that “external energy data can be provided via the network 204” and
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`provides an example in which “a utility company provid[es] energy price variations,
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`peak load warnings, grid instability data or discounts offered for energy usage
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`reduction at specified times, etc.” Id. at 5:46–58. One having ordinary skill in
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`the art would understand that Kansal’s system provides energy management
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`information from a utility to an energy manager via a network, and that
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`Kansal’s system uses this energy management information to manage energy
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`use at the site.
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`One having ordinary skill in the art reviewing Galvin and Kansal
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`would appreciate that both systems allow a controlling device, such as Galvin’s
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`digital exchange or Kansal’s energy manager, to make decisions based on user
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`preferences and information about the energy. Accordingly, one having ordinary
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`skill in the art would have understood that such data would typically have been
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`provided by a utility which is the entity that most naturally has the data, and because
`
`receiving the information from the utility would ensure that the information would
`
`be timely received and be accurate. For example, it would have been preferable for a
`
`21
`
`Honeywell Exhibit 1001, Page 22
`
`
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`demand response system to receive pricing and other energy management
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`information directly from a utility company because the demand response system
`
`would be sure that it was getting immediate access to the data, and that the data had
`
`not been delayed by a third-party provider or even potentially modified by the third-
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`party provider. I further believe that one having ordinary skill in the art would have
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`found reason to use demand response pricing in Galvin’s teaching in order to reduce
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`energy costs for users, and to thus lower user resistance to participation in
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`subsequent demand response events during expected periods of higher energy
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`rates.
`
`Galvin discloses that “preferences can be quite wide-ranging
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`according to the invention, and may include mandatory preferences (preferences
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`that a digital exchange is not allowed to violate, such as “never turn off my
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`television on outlet #14”), or optional preferences with conditions (for example, “if
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`the price is more than X degrees [sic], and my hot water temperature is at least Y,
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`and it is between 8:00 am and 4:00 pm local time, you can turn off my hot water
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`heater for as long as needed or until the temperature drops to Z degrees”), or highly
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`permissive preferences (“you can do whatever you want to this load, whenever you
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`want”). Exhibit 1004 at ¶ 37. Accordingly, Galvin discloses user preferences to
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`never participate, user preferences to always participate, and other user preferences
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`based on price, etc. One having ordinary skill in the art would understand that
`
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