`________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`________________
`
`Cisco Systems, Inc.,
`
`Petitioner
`
`v.
`
`FOCAL IP, LLC,
`
`Patent Owner
`
`________________
`
`Case IPR2016-01257
`Patent Number: 8,457,113
`________________
`
`DECLARATION OF REGIS J. “BUD” BATES IN SUPPORT OF PATENT
`OWNER’S CONTINGENT MOTION TO AMEND
`
`CISCO SYSTEMS, INC. v. FOCAL IP, LLC
`FOCAL IP, LLC EX2040 - 1
`Bates Declaration
`IPR2016-01257
`
`
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`Declaration of Regis J. “Bud” Bates
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`TABLE OF CONTENTS
`
`QUALIFICATIONS ........................................................................................ 2
`
`PERSON OF ORDINARY SKILL ................................................................. 4
`
`I.
`
`II.
`
`III. LEGAL UNDERSTANDING ......................................................................... 5
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`A. ANTICIPATION ................................................................................... 5
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`B.
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`OBVIOUSNESS ................................................................................... 6
`
`IV. DISCUSSION OF THE PSTN AND OVERVIEW OF THE ’113
`PATENT .................................................................................................................... 9
`
`V. WRITTEN DESCRIPTION SUPPORT OF THE SUBSTITUTE CLAIM . 16
`
`VI. STATE OF THE ART AS OF THE PRIORITY DATE ............................... 16
`
`VII. UNIVERSE OF PRIOR ART ........................................................................ 20
`
`VIII. SUMMARY OF THE REFERENCES ......................................................... 22
`
`A.
`
`B.
`
`C.
`
`D.
`
`E.
`
`F.
`
`G.
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`Summary of Schwab ........................................................................... 22
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`Summary of O’Neal ............................................................................ 28
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`Summary of Archer ............................................................................. 33
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`Summary of Chang .............................................................................. 35
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`Summary of Burger ............................................................................. 38
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`Summary of Alexander ....................................................................... 41
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`Summary of Shtivelman ...................................................................... 43
`
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`ii
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`IPR2016-01257
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`Declaration of Regis J. “Bud” Bates
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`H.
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`I.
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`Summary of McMullin ........................................................................ 44
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`Summary of Swartz ............................................................................. 46
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`IX. ARGUMENTS .............................................................................................. 47
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`The EXT Art does not disclose a Tandem Access Controller
`A.
`Communicating with a Tandem Switch without Passing through an Edge
`Switch ............................................................................................................ 48
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`The EXT Art does not Disclose Additional Elements in the Proposed
`B.
`Substitute Claim ............................................................................................. 50
`
`The Shtivelman and McMullin do not disclose a Tandem Access
`C.
`Controller Communicating with a Tandem Switch without Passing through an
`Edge Switch ................................................................................................... 51
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`D.
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`The Intelligent Network Art (Chang) .................................................. 52
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`X. OBVIOUSNESS ............................................................................................ 54
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`XI. CONCLUSION .............................................................................................. 57
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`iii
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`CISCO SYSTEMS, INC. v. FOCAL IP, LLC
`FOCAL IP, LLC EX2040 - 3
`Bates Declaration
`IPR2016-01257
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`
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`I, Regis J. “Bud” Bates, declare as follows:
`1. My name is Regis J. “Bud” Bates, and I have been retained as an expert
`witness for Inter Partes Review of IPR2016-01257.
`2.
`This report contains statements of my opinions formed to date and the
`bases and reasons for those opinions. I may offer additional opinions based on
`further review of materials in this case, including opinions and/or testimony of other
`expert witnesses.
`3.
`I understand that this Declaration is being submitted along with Patent
`Owner’s Contingent Motion to Amend.
`4.
`Capitalized terms found in this Declaration that are not defined herein have
`the meaning given them in Patent Owner’s Contingent Motion to Amend Claim 143
`of U.S. Patent No. 8,457,113.
`5.
`In preparing this Declaration, I have reviewed the Petitions, the
`declarations that accompany the Petitions, the Institution Decision, and the exhibits
`that have been submitted with in this IPR proceeding as well as the Related IPR
`Proceedings.
`6.
`This Declaration is a statement of my opinions on issues related to the
`validity of the Proposed Substitute Claim and the other issues raised in the
`Contingent Motion to Amend.
`7.
`I am of the opinion that the Proposed Substitute Claim is patentable over
`the IPR Art, as well as all other art about which I am aware.
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`CISCO SYSTEMS, INC. v. FOCAL IP, LLC
`FOCAL IP, LLC EX2040 - 4
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`IPR2016-01257
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`Declaration of Regis J. “Bud” Bates
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`I.
`
`QUALIFICATIONS
`8.
`This section summarizes my career history, education, publications, and
`other relevant qualifications. My full curriculum vitae is attached as Appendix A to
`this report.
`9.
`I have been involved in and with the telecommunications industry for 50
`years and have seen the development and growth of the various technologies,
`infrastructure, legal, regulatory, and technical services.
`10. Notably, I am the author of 20 books which outline the use of Voice and
`Data technologies used throughout the industry. As author of these books, I am
`situated to opine upon the state of the Telephone Networks, as well as the
`conclusions that both parties in this proceeding draw therefrom.
`11.
`I am the founder and president of TC International Consulting, Inc.
`(TCIC), based in Heber, Arizona. I have held this position since the inception of the
`company in October 1989. TCIC is a full service consulting and training firm
`specializing in communications and computer convergence.
`12. My role is to assist our client companies with the analysis of options,
`selection of vendors or products to meet their strategic goals, and training for
`technologies including voice, telephone systems, data networks, video, Internet,
`wireless, wireless local area networks (LAN), voice over Internet Protocol (VoIP)
`systems and services, fiber optics, and infrastructure. We have been responsible for
`selecting and implementing over 100 private branch exchange (PBX) systems for
`our client companies. TCIC develops and conducts training for corporate users,
`equipment manufacturers, and Telephone and Internet carriers.
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`Declaration of Regis J. “Bud” Bates
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`13. From September 1986 to October 1989, I was the chief information officer
`at Pepper, Hamilton, and Scheetz in Philadelphia, PA. My responsibilities included
`the complete automation of the law firm’s multiple offices around the country.
`14. From September 1979 to September 1986, I was the telecommunications
`manager at Air Products and Chemicals, Inc. My responsibilities were to design,
`select, analyze and implement voice and data communications projects at U.S. and
`international sites.
`15. From April 1977 to September 1979, I was the senior telecommunications
`manager for manufacturing and international sites at Data General Corporation in
`Westboro, MA. I was responsible for selecting telecommunications equipment for
`sites across the world, selecting services (voice, data and fax traffic) from common
`carriers, and selecting appropriate means and protocols to use these goods and
`services.
`16. From September 1974 to April 1977, I was the manager of administrative
`services at a retail chain in Canton, MA called Hills Department Stores. There, I
`was responsible for communications matters including voice, data, fax, telex, and
`teletype.
`17. From April 1972 to September 1974, I worked as the telecommunications
`and facilities manager at Damon Corporation, a conglomerate that included medical-
`biological development, veterinary products, clinical labs, security manufacturing,
`and hobby craft. My responsibilities included voice and data communications for a
`variety of locations across the country.
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`CISCO SYSTEMS, INC. v. FOCAL IP, LLC
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`IPR2016-01257
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`Declaration of Regis J. “Bud” Bates
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`18. From September 1966 to April 1972, I was a captain in the U.S. Army
`Signal Corps. My assignments took me to many locations, including a deployment
`in Vietnam, where I worked in mobile and fixed-site communication environments
`using radio-based VHF and troposcatter systems.
`19.
`In addition to these formal roles, I have consulted for and provided training
`courses to over 20 major organizations, including Cisco, Motorola Solutions, Nortel
`Networks, the University of California at Berkeley, and Fidelity Investments, as well
`as the U.S. Army, Electronic proving Grounds, Central Intelligence Agency, Federal
`Bureau of Investigation, and National Security Agency.
`20.
`I received a Bachelor of Sciences degree in Business Management in 1979
`from Stonehill College in Easton, MA with additional work towards my Masters of
`Business Administration from Lehigh University in Bethlehem, PA and St. Joseph’s
`College in Philadelphia, PA.
`21.
`I completed all the coursework but not the thesis for an MBA.
`
`II.
`PERSON OF ORDINARY SKILL
`22.
`I believe that a person of ordinary skill in the art with respect to the ’113
`Patent in 1999-2000 would have a bachelor’s degree in electrical engineering,
`computer science, or the equivalent thereof and approximately 2-3 years of
`professional experience within the field of telecommunications or network
`communications. This is consistent with the positions taken by the Petitioners in the
`Related IPRs. See, e.g., -01262 La Porta Dec. (Ex. 2064) at ¶28; -01258 Lavian Dec.
`(Ex. 2065) at ¶19; -01257 Willis Dec. (Ex. 2027) at ¶21.
`
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`IPR2016-01257
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`Declaration of Regis J. “Bud” Bates
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`III. LEGAL UNDERSTANDING
`23. Although I am not an attorney and do not intend to testify about legal
`issues, my opinions are also informed by my understanding of the relevant law. I
`understand that a patent claim can be found invalid in an inter partes review if the
`Patent Office concludes that it is more likely than not that the claim is invalid.
`
`A. ANTICIPATION
`24.
`I have read 35 U.S.C. §§ 102 (a)-(g) and understand the requirements to
`prove “anticipation” of a patented invention under these statutory provisions. I have
`been advised that if each and every element or step of a claim is disclosed within the
`“four corners” of a single prior art reference, that claim is said to be anticipated by
`that prior art reference and is invalid under 35 U.S.C. § 102.
`25.
`I understand that anticipation requires that a single reference disclose all
`the elements, as arranged in the claim. I further understand that the prior art
`reference must clearly and unequivocally disclose the claimed invention or direct
`those skilled in the art to the claimed invention without any need for picking,
`choosing, and combining various disclosures not directly related to each other by the
`teachings of the cited reference.
`26.
`I also have been advised that a prior art reference can disclose a claim
`feature because the feature is expressly described, or because the feature is inherent
`in the disclosure. I understand that something is inherent in a prior art reference if
`the missing descriptive matter must be necessarily present, and it would be so
`recognized by one of ordinary skill in the art. I also understand that inherency cannot
`
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`Declaration of Regis J. “Bud” Bates
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`be established by probabilities or possibilities, and that the mere fact that something
`may result from a given set of circumstances is not sufficient to show inherency.
`
`B. OBVIOUSNESS
`27.
`I also understand the legal standards that apply to invalidity for
`obviousness under 35 U.S.C. § 103. I understand that a patent claim may be invalid
`under 35 U.S.C. § 103 if the differences between the claimed subject 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 skill in the art to which the
`subject matter pertains. I understand that obviousness is a question of law and that
`the following factors must be evaluated to determine whether a party challenging a
`patent claim’s validity has met its burden of proof that the claimed invention is
`obvious: (1) the scope and content of the prior art; (2) the differences between the
`claims and the prior art; (3) the level of ordinary skill in the art; and (4) objective
`indicia of non-obviousness.
`28.
`I understand that to reach a proper determination under 35 U.S.C. § 103,
`one must step backward in time and into the shoes worn by the hypothetical “person
`of ordinary skill in the art” (“POSA”) when the invention was unknown and just
`before it was made. In view of all factual information, one must then make a
`determination whether the claimed invention “as a whole” would have been obvious
`at that time to that person of ordinary skill in the art. Knowledge of the applicants’
`disclosure must be put aside in reaching this determination, yet kept in mind in order
`to determine the differences between the claimed subject matter as a whole and the
`content of the prior art.
`
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`IPR2016-01257
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`Declaration of Regis J. “Bud” Bates
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`29. Because obviousness is determined from the perspective of a person of
`ordinary skill in the art at the time of the invention, I understand that to consider any
`distortion caused by hindsight bias, to guard against slipping into the use of
`
`hindsight, to be cautious of opinions that rely upon after‐the-fact reasoning, and to
`
`avoid the temptation to read into the prior art the teachings of the invention at issue.
`The determination of obviousness is not whether a person could, with full knowledge
`of the patented device, reproduce it from prior art or known principles. The question
`is whether it would have been obvious, without knowledge of the patentee’s
`achievement, to produce the same thing that the patentee produced. This judgment
`must be made without the benefit of hindsight. It is improper to take concepts from
`
`other devices and change them in light of the now‐known template of the patented
`
`device, without some direction that would render it obvious to do so.
`30.
`I understand that a claim is not proven obvious merely by demonstrating
`that each of the claim elements was independently known in the prior art. I
`understand that most, if not all, inventions rely on building blocks long since
`uncovered and claimed discoveries, and, almost of necessity, will likely be
`combinations of elements that were already known. A party challenging validity
`must show that a person of ordinary skill in the art would have had a reason to
`combine the teachings of the prior art to achieve the claimed invention and would
`have had a reasonable expectation of success in doing so.
`31.
`I also understand that an inference that a claimed combination would not
`have been obvious is especially strong where the prior art’s teachings undermine the
`very reason being proffered as to why a person of ordinary skill would have
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`Declaration of Regis J. “Bud” Bates
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`combined the known elements. A reference may be said to “teach away” when a
`person of ordinary skill, upon reading the reference, would be discouraged from
`following the path set out in the reference, or would be led in a direction divergent
`from the path that was taken by the applicant. Where a proposed modification or
`combination for the prior art would change the principle of operation of the prior art
`being modified or render the prior art unsatisfactory for its intended purpose then
`the teachings of the references are not sufficient to render the claims at issue obvious.
`32.
`I understand that a party challenging the claims of a patent must present
`evidence sufficient to establish some articulated, rational reason to select and
`combine the teachings of the prior art to produce the claimed invention with a
`reasonable expectation of success, which is sometimes referred to as a prima facie
`conclusion, or case, of obviousness.
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`Declaration of Regis J. “Bud” Bates
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`IV. DISCUSSION OF THE PSTN AND OVERVIEW OF THE ’113
`
`PATENT
`33. The PSTN employs various equipment to route calls. This equipment
`includes switches and databases, and is arranged in a hierarchical fashion:
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`Declaration of Regis J. “Bud” Bates
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`Notably, the same hierarchical levels/equipment may be referred to by a variety of
`names. In both examples above, the class 4 level refers to both a “toll center” and a
`“tandem switch.” This understanding is important because the ’113 Patent and prior
`art references sometimes use different terminology to refer to the same hierarchical
`level.
`34. At the top of the hierarchy are regional toll centers (class 1 offices). These
`offices are interconnected with sectional toll centers (class 2 offices), which in turn
`connect to primary centers (class 3 offices). As a point of reference, in 1984 (the
`year AT&T was broken up into the “Baby Bells”), there were 10 class 1 centers, 67
`class 2 centers, and 200 class 3 centers. Ray Horak, Communications Systems &
`Networks 159-61, (2nd ed. 2000) (Ex. 2002).
`
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`10
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`IPR2016-01257
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`Declaration of Regis J. “Bud” Bates
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`35. Class 4 and 5 levels comprise the rest of the hierarchy and are of particular
`relevance to the ’113 Patent. Class 4 centers contain tandem switches. Class 4
`centers are also referred to as toll centers, and tandem switches are also referred to
`as Class 4 switches or toll switches. As a point of reference, in 1984, there were
`approximately 940 tandem switches. Id. In 2000, tandem switches were generally
`distributed around the United States on the basis of population density. Large
`metropolitan areas would have several tandem switches located in and around the
`areas, whereas large rural geographic areas could be served by a few tandem
`switches. A POSA in 2000 would have known that several tandem switches would
`serve the large metropolitan areas of the United States (e.g., New York City, Los
`Angeles, etc.) and would consider these switches to be local tandem switches, from
`the perspective of the POSA in that particular geographic area. For example, a
`POSA located in New York City would refer to the tandem switches located in and
`around New York City as the local tandem switches that can communicate with one
`another.
`36. A POSA would understand that a PSTN tandem switch be construed as “a
`switch in the PSTN that interconnects other PSTN tandem switches and edge
`switches.”
`37. As stated above, tandem switches serve to interconnect Class 5 offices that
`contain edge switches. Edge switches are sometimes referred to as central offices
`(“COs”), and vice versa. In 1984, there were thousands of COs containing edge
`switches in the U.S. Central offices have been defined as:
`
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`[Offices] which serve end users through local loop connections [local
`loops are the actual copper wires that run from a customer’s premises to
`the central office].
`
`Ex2002 at 159; and
`. . . a CO traditionally houses one or more voice-optimized circuit switches
`to interconnect subscriber lines within a local area known as the carrier
`serving area (CSA) and to connect subscriber local loops to network
`trunks.
`
`Ex2003 at 102.
`38. These dictionary definitions are consistent with the disclosures of tandem
`switches and edge switches in the ’113 Patent:
`The [PSTN] consists of a plurality of edge switches connected to
`telephones on one side and to a network of tandem switches on the other.
`The tandem switch network allows connectivity between all of the edge
`switches, and a signaling system is used by the PSTN to allow calling and
`to transmit both calling and called party identity.
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`IPR2016-01257
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`’113 Patent, 1:45-51 and Fig. 2. The most salient points regarding tandem switches
`and edge switches, as confirmed by both extrinsic and intrinsic evidence, are (1)
`edge switches are connected directly to subscribers or edge devices via end-lines
`(i.e., there are copper wires (or other media) that run directly between the edge
`switches and subscribers); and (2) tandem switches are not directly connected to
`subscribers or edge devices, but are instead connected to edge switches and other
`tandem switches.
`
`39.
`In the PSTN, before one subscriber is able to have a voice communication
`with another subscriber, the call must be “set up.” Setting-up a call refers to the
`exchange of control signaling that causes the establishment of a path over which
`voice data can flow. In the PSTN, voice paths are established on demand, as needed,
`in order to conserve resources. At the time of the inventions, the PSTN utilized the
`Signaling System 7 (“SS7”) protocol to set up calls. SS7 signaling flows between
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`one CO and another, including all switches in between (e.g., tandem switches). SS7
`signaling does not flow past COs to edge devices, as edge devices are not equipped
`to process and respond to SS7 signaling.
`40. Generally, the ’113 Patent relates to the provision of call control features
`in a public telephone network. Call forwarding (e.g., transferring a voice call
`originally directed to 703-555-1212 to an alternate telephone number) is an
`exemplary call control feature. The ’113 Patent discloses a Tandem Access
`Controller (“TAC”) that implements call control features. The TAC is a
`combination of computing hardware and software that is appropriately programmed
`to process calls. ’113 Patent, 4:35-47.
`41. The Background section acknowledges that, at the time of the invention,
`various devices existed to provide call control features. One novel and important
`aspect of the ’113 Patent concerns where in the PSTN such call control features are
`implemented. As discussed in more detail below, the ’113 Patent expressly
`recognizes that prior art call control devices were attached to an edge device (e.g.,
`phones and PBXs) or an edge switch located in a CO. ’113 Patent 1:52-67; 2:40-54.
`These prior art edge devices receive a call on one line, dial out on another line, and
`connect the two lines together.
`42. By contrast, the ’113 Patent discloses connecting the TAC to a tandem
`switch (hence the name Tandem Access Controller). This arrangement allows calls
`to be intercepted and processed before they are handed off to the CO (edge switch)
`associated with the called party. Stated differently, instead of a call being passed to
`a destination CO, then on to a controller connected to the CO which would a perform
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`Declaration of Regis J. “Bud” Bates
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`call control feature, the TAC processes the call at a tandem switch before it is ever
`routed to the destination CO. This novel arrangement has several advantages. The
`first advantage concerns costs. Calls coming into and out of controllers connected
`to COs incurred charges for each incoming and outgoing call. See ’113 Patent 2:17-
`22 (discussing this scenario). Using a TAC instead avoids these costs. See ’113
`Pat., 4:55-5:3.
`43.
`In a call forwarding scenario using the present invention, the TAC
`intercepts the call at the Class 4 level before it reaches the destination CO edge
`switch. As a result, the call from called party to the calling party is processed by the
`TAC before it reaches the CO associated with the called number. The TAC then
`initiates call signaling to set up the call to the forwarding number, and connects the
`original call to the one arranged by the TAC. This process is invisible to the called
`and calling parties, and incurs less tolls than the prior art solutions discussed in the
`’113 Patent. ’113 Patent, 4:55-5:3.
`44. Another advantage regarding the TAC’s placement at a tandem switch
`concerns call quality. Running an analog voice signal from an edge switch to an
`edge device over copper wire degrades the quality of the signal (an edge device is a
`device connected to an edge switch, typically on a customer’s premises, such as a
`private branch exchange (PBX) or a generic telephone – see ’113 Patent, 5:4-7). The
`prior art call forwarding solution suffers from this degradation twice: once from the
`calling party’s call to the controller connected to the CO, and once from the
`controller’s call to the forwarding number. On the other hand, handling calls at the
`tandem level maintains the quality of the call, as it is processed within the PSTN,
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`Declaration of Regis J. “Bud” Bates
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`where the signal will most likely be in digital form and/or carried over high-quality
`lines (as compared to the end lines that carry a call from a CO to a phone). ’113
`Patent, 1:59-2:63; 2:40-54.
`
`V. WRITTEN DESCRIPTION SUPPORT OF THE SUBSTITUTE
`CLAIM
`45.
`I have reviewed the written description support for the Substitute Claim in
`Exhibit 2041, and a POSA would reasonably conclude that the inventors had
`possession of each of the features of the Substitute Claim.
`46. Based on the state of the art and the supporting disclosure in the charts, a
`POSA would understand that Fig. 2 read in light of the whole underlying application
`support of the ’113 Patent (e.g., Fig. 5, 4:55-5:3) discloses the TAC receiving a first
`call request of a first call from a tandem switch, initiating a second call request of a
`second call via a VOIP network, without yet answering the first incoming call, and
`enabling communication when the second call is answered, in addition to the other
`claim limitations of the Substitute Claim.
`
`VI. STATE OF THE ART AS OF THE PRIORITY DATE
`47. Related to the growth of the internet during the 1990’s was the growth of
`VoIP. VoIP would grow significantly after the turn of the century, and certain
`businesses saw this potential back in the 1990s and began to innovate in this space.
`One obvious issue with the growth of VoIP was how to integrate VoIP systems with
`the already existing PSTN.
`48. Related to the development of VoIP were PBXs. As a bit of history, PBXs
`(private branch exchanges) were private telephone switches used by businesses of
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`CISCO SYSTEMS, INC. v. FOCAL IP, LLC
`FOCAL IP, LLC EX2040 - 19
`Bates Declaration
`IPR2016-01257
`
`
`
`Declaration of Regis J. “Bud” Bates
`
`all sizes. PBXs allowed businesses to share a handful of voice lines, and provided
`various calling features, such as voice mail, conference calling, call forwarding, and
`call waiting. Since at least the mid-1980s, PBXs provided users with call features
`such as call forwarding and conference calling. See, e.g., U.S. Pat. No. 4,646,296
`(filed on July 9, 1984) (Ex. 2056).
`49. There was a need for PBXs that could adapt intra-office VoIP calls (or
`VoIP calls generally) to the PSTN, which was an analog system (at least at the local
`level), and vice versa. This dynamic is at issue in Alexander, Archer, Burger,
`O’Neal, Schwab, and Swartz. See e.g., Alexander (Ex. 2051), Background of the
`Invention, 1:14-33.
`50.
`In summary, during the 1990s, inventors were working on the problem of
`how to better integrate circuit and packet switched voice networks. These
`innovations, however, were largely being implemented from outside the PSTN by
`companies other than the Baby Bells (i.e., the original regional Bell operating
`companies that resulted as the breakup of AT&T in 1984 - Ameritech, Bell Atlantic,
`BellSouth, NYNEX, Pacific Telesis, Southwestern Bell, and US West), as opposed
`from inside the PSTN itself.
`51. Generally speaking, the Baby Bells (as well as other regional phone
`companies such as Cincinnati Bell) owned the equipment that made up the PSTN
`and controlled access to the PSTN. These companies generally only allowed access
`to the PSTN through edge switches. Edge switches served as “firewalls” to the rest
`of the PSTN. As one of their functions, they serve to protect the switching fabric of
`the PSTN from malfunctioning/malicious end user equipment such as PBXs. Thus,
`17
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`CISCO SYSTEMS, INC. v. FOCAL IP, LLC
`FOCAL IP, LLC EX2040 - 20
`Bates Declaration
`IPR2016-01257
`
`
`
`Declaration of Regis J. “Bud” Bates
`
`consumers of PBXs only had access to the PSTN though the lines provided to them
`by the local telecommunication companies through edge switches. These lines
`generally consisted of analog phone lines (common for residences) and digital T1
`connections (which provided up to 24 simultaneous voice paths, common for larger
`businesses). These lines originated from edge switches. In sum, the only practical
`interface into the PSTN (from the outside) was through central offices. A second
`development was taking place during the 1980s up until the time of the invention as
`well. Unlike the VoIP/PBX development discussed above, the implementation of
`features by the Baby Bells and others did not involve equipment to be attached to
`the peripheral of the PSTN. The Baby Bells did not attempt to utilize switching
`equipment similar to the claimed TAC to be attached to existing switching
`equipment within the PSTN. Rather, the Baby Bells and others contemplated
`modifications to switching and signaling equipment, referred to as intelligent
`networking.
`52. Chang is a representative example of this second development. Chang
`teaches that switching equipment, such as edge switches and tandem switches, can
`be modified to serve as Service Switching Points to initiate database queries to SCPs.
`Chang (Ex 2049), 9:13-17; Fig. 1, elements 11E and 11T. In these modified edge and
`tandem switches, database queries are sent to an SCP that stored call control
`information, and the SCP returns a response to the switch that the switch can utilize
`to process the call. In the case of these switches, the edge and tandem switches have
`been modified to contain enhanced functionality to send and receive the query and
`response signaling with an SCP.
`
`
`
`18
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`CISCO SYSTEMS, INC. v. FOCAL IP, LLC
`FOCAL IP, LLC EX2040 - 21
`Bates Declaration
`IPR2016-01257
`
`
`
`Declaration of Regis J. “Bud” Bates
`
`53. The Baby Bells were incentivized to add call features such as call waiting
`and call forwarding because the pricing of such features was not regulated like the
`cost of providing actual telephone service and was extremely profitable. See, e.g.,
`$200 Billion Broadband Scandal, Bruce Kushnick, 2006 (Ex. 2057) at 135 (“Some
`services could now be ‘market priced.’ Ameritech could charge what customers
`were willing to pay, even though there was no competition in