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`UNITED STATES PATENT AND TRADEMARK OFFICE
`__________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`__________
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`Prime Focus Creative Services Canada Inc.,
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`Petitioner
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`v.
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`Legend3D, Inc.,
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`Patent Owner
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`___________
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`IPR2016-01243
`U.S. Patent No. 7,907,793
`___________
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`PETITIONER’S REPLY IN SUPPORT OF
`REQUEST FOR REHEARING
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`Mail Stop: PATENT BOARD
`Patent Trial and Appeal Board
`U.S. Patent & Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
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`10447071
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`TABLE OF CONTENTS
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`The Board must provide petitioner with an opportunity to
`respond in full, including the submission of new evidence. .............. 1
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`The Request properly rebutted the new evidence relied upon
`by the Board. ...................................................................................... 5
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`Page
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`A.
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`B.
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`TABLE OF AUTHORITIES
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` Page(s)
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`Cases
`Dell Inc. v. Acceleron, LLC,
`818 F.3d 1293 (Fed. Cir. 2016) ...................................................................... 4
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`EmeraChem Holdings, LLC v. Volkswagen Group of America,
`Inc.,
`859 F.3d 1341 (Fed. Cir. 2017) ...................................................................... 4
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`In re Magnum Oil Tools International, Ltd.,
`829 F.3d 1364 (Fed. Cir. 2016) ...................................................................... 4
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`In re NuVasive, Inc.,
`841 F.3d 966 (Fed. Cir. 2016) ........................................................................ 4
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`Rovalma, S.A. v. Bohler-Edelstahl GmbH,
`856 F.3d 1019 (Fed. Cir. 2017) ...................................................................... 5
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`SAS Inst., Inc. v. ComplementSoft, LLC,
`825 F.3d 1341 (Fed. Cir. 2016) .................................................................. 3, 4
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`Statutes
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`5 U.S.C. § 556(d) ................................................................................................. 3
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`A. The Board must provide Petitioner with an opportunity to
`respond in full, including the submission of new evidence.
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`Legend argues that Petitioner is improperly attempting to shift the burden of
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`persuasion onto the Patent Owner (Paper 57 at p. 9-10), but that argument
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`mischaracterizes the Request for Rehearing. Petitioner acknowledges that it
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`always carries the burden of persuasion and is actually arguing that, to the extent
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`that there is any dispute whether Petitioner carried its burden, Petitioner was
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`entitled to notice and an opportunity to respond.
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`To begin, the Petition did carry its burden of persuasion regarding the
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`combinability of Sullivan. As set forth in the Request for Rehearing, the Petition
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`discussed at length Sullivan’s teaching of “projecting at least a portion of a first
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`2D image…onto computer-generated geometry,” and it is facially impossible to
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`project only “a portion” of an image without using a data structure to identify the
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`specific group of pixels to project—i.e., without creating a mask. See Request,
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`Paper 55 at p. 8-9 (quoting Petition, Paper 1 at p. 14 (quoting Sullivan, Ex. 1006 at
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`17:14-15)). Given that Sullivan teaches masks, the Petition, supported by the
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`uncontroverted testimony of Dr. Forsyth, argued that Passmore’s teaching
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`regarding reusing colorization masks was applicable to both Passmore and
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`Sullivan since they both use masks. See Request, Paper 56 at p. 11-12 (citing
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`Petition at p. 16 (Passmore’s teachings “would have led one of ordinary skill in the
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`art to combine/modify…either Passmore or Sullivan”)). In its Patent Owner’s
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`Response, Legend did not dispute that Sullivan teaches masks nor did it dispute the
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`combinability of Sullivan. By the time of the Final Written Decision, therefore, it
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`was an undisputed fact that Sullivan taught masks and was properly combinable.
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`But in the Final Written Decision, the Board suddenly found that “Sullivan
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`does not describe masks” (which had never been disputed) and, as a result, that
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`Passmore’s teaching of reusing colorization masks was inapplicable to Sullivan
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`(which had also never been disputed). Paper 54 at p. 43-55. The Final Written
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`Decision did not even cite Sullivan itself in support of these new findings, let alone
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`cite any previous argument by Legend or the Board providing notice of the
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`disputed connection between Sullivan and masks. See id. The Final Written
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`Decision instead supported its new findings by citing cross-examination testimony
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`from Dr. Forsyth that was never presented in any paper. Paper 54 at p. 44 (citing
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`Ex. 2021 at 31:12-15). Legend is correct that a petitioner failing to meet its burden
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`of persuasion is not a “new theory,” but holding that Sullivan does not teach masks
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`undoubtedly is. The Board therefore did not “merely render[] judgment on the
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`record,” as Legend argues (Paper 57 at p. 1), since the record did not reflect any
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`dispute over the relationship between Sullivan and masks nor did the record reflect
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`any dispute about Sullivan’s combinability.
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`It was improper for the Board to present its new theory regarding Sullivan’s
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`alleged deficiencies for the first time in the Final Written Decision because
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`Petitioner had no notice of the alleged deficiency and has been deprived of an
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`opportunity to respond, as required by the Administrative Procedure Act. See 5
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`U.S.C. § 556(d) (“A party is entitled to…submit rebuttal evidence.”); SAS, 825
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`F.3d at 1351 (APA provides IPR petitioners with right to respond). Petitioner is
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`not arguing that the Board is “boxed into its Institution Decision,” contrary to how
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`Legend has characterized Petitioner’s argument (Paper 57 at p. 1), rather Petitioner
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`is arguing that, to the extent the Board disputes an issue that was never disputed by
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`Patent Owner nor flagged in the Institution Decision, Petitioner is entitled to notice
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`and an opportunity to respond prior to the Final Written Decision.
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`The Federal Circuit has addressed nearly this exact type of violation of the
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`APA in SAS Inst., Inc. v. ComplementSoft, LLC, 825 F.3d 1341, 1350-52 (Fed. Cir.
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`2016), where the Federal Circuit remanded after the Board adopted a claim
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`construction in its Final Written Decision that was different than the construction
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`the Board had adopted in its Institution Decision and that was not advocated by
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`either party during trial. Legend attempts to distinguish SAS by arguing that,
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`unlike in SAS, the Board in this case “did not change the legal standard…to prove
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`unpatentability.” Paper 57 at p. 7. But a “change [in] the legal standard” was not
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`why SAS was remanded, as the petitioner in SAS always faced the same legal
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`standard, namely demonstrating that the challenged claims as properly construed
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`were unpatentable. The Federal Circuit remanded in SAS because the Board made
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`a key finding in the Final Written Decision that had never been disputed by the
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`patent owner nor suggested by the Board. SAS, 825 F.3d at 1350-52. That is
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`exactly what has happened in this case.
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`SAS is just one of several highly analogous Federal Circuit cases that all hold
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`that the Board cannot raise a new theory for the first time in its Final Written
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`Decision without giving the affected party the opportunity to respond. See
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`EmeraChem Holdings, LLC v. Volkswagen Group of America, Inc., 859 F.3d 1341,
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`1351-52 (Fed. Cir. 2017); In re NuVasive, Inc., 841 F.3d 966, 972-75 (Fed. Cir.
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`2016); Dell Inc. v. Acceleron, LLC, 818 F.3d 1293, 1301 (Fed. Cir. 2016); In re
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`Magnum Oil Tools International, Ltd., 829 F.3d 1364, 1381 (Fed. Cir. 2016)
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`(“[T]he Board must base its decision on arguments…to which the opposing party
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`was given a chance to respond.”). Legend attempts to distinguish these additional
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`cases based on the fact that they are directed to protections for the patent owner
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`rather than the petitioner, but the Federal Circuit has already expressly rejected that
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`argument and held that the opportunity to respond is a right also guaranteed to IPR
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`petitioners under the APA. See SAS, 825 F.3d at 1351.
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`The Final Written Decision presented a new theory based on new factual
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`determinations supported by new evidence, and Petitioner had no notice of the
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`alleged deficiencies in the Petition. Petitioner must be provided with an
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`opportunity to brief the issue in full, including the ability to provide additional
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`evidence.
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`B. The Request properly rebutted the new evidence relied upon
`by the Board.
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`In the Final Written Decision, the Board relied on cross-examination
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`testimony by Dr. Forsyth that had never been cited by either party nor discussed by
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`the Board. Paper 54 at p. 44 (citing Ex. 2021 at 31:12-15). Petitioner’s Request
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`for Rehearing presented background testimony by Dr. Forsyth as context in order
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`to demonstrate that the Board had misapprehend the new evidence it had relied
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`upon. The Board opened the door to this background testimony when it relied on
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`new evidence in support of its new theory in the Final Written Decision. See
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`Rovalma, S.A. v. Bohler-Edelstahl GmbH, 856 F.3d 1019, 1029 (Fed. Cir. 2017)
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`(“The Board’s procedural obligations are not satisfied merely because a
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`particular fact might be found somewhere amidst the evidence submitted by the
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`parties, without attention being called to it so as to provide adequate notice and
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`an adequate opportunity to be heard.”). The Board’s misplaced reliance on the
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`new evidence demonstrates why Petitioner must be provided with an opportunity
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`to respond in full, because the Board’s new theory regarding Sullivan’s
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`relationship to masks would otherwise be premised on demonstrably
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`misapprehended testimony.
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`Dated: February 16, 2018
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`IRELL & MANELLA LLP
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` By: /Joshua Glucoft/
`Joshua Glucoft, Reg. No. 67,696
`Attorneys for Petitioner
`Prime Focus Creative Service Canada Inc.
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`CERTIFICATE OF SERVICE
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`I hereby certify, pursuant to 37 C.F.R. sections 42.6 that a complete copy of
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`the PETITIONER’S REQUEST FOR REHEARING is being served
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`electronically on the 16th day of February, 2018 upon:
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`Daniel N. Yannuzzi, Reg. No. 36,727
` Trevor J. Quist, Reg. No. 75,856
` Sheppard Mullin Richter & Hampton LLP
` 12275 El Camino Read, Ste. 200
`San Diego, A 92130 (858)720-8924
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`dyannuzzi@sheppardmullin.com
` tquist@sheppardmullin.com
` Sheppard-Legend3DIPR@sheppardmullin.com
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`/s/Susan M. Langworthy
` Susan M. Langworthy
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