IPR2016-01710 Petition
`U.S. Patent 7,490,037
`
`Filed on behalf of Unified Patents Inc.
`By: Vincent J. Galluzzo, Reg. No. 67,830
`
`Teresa Stanek Rea, Reg. No. 30,427
`
`CROWELL & MORING LLP
`
`1001 Pennsylvania Avenue, N.W.
`
`Washington, D.C. 20004
`
`Tel: (202) 624-2781
`
`Email: vgalluzzo@crowell.com
`
`Jonathan Stroud, Reg. No. 72,518
`Unified Patents Inc.
`1875 Connecticut Avenue, N.W., Floor 10
`Washington, D.C. 20009
`Tel: (202) 805-8931
`Email: jonathan@unifiedpatents.com
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________________________________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________________________________________
`
`UNIFIED PATENTS INC.
`Petitioner
`
`v.
`
`DIGITAL AUDIO ENCODING SYSTEMS, LLC
`Patent Owner
`
`IPR2016-01710
`Patent 7,490,037
`
`PETITION FOR INTER PARTES REVIEW OF
`U.S. PATENT 7,490,037
`CHALLENGING CLAIMS 1-32
`UNDER 35 U.S.C. § 312 AND 37 C.F.R. § 42.104
`
`
`
`
`
`
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`

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`IPR2016-01710 Petition
`U.S. Patent 7,490,037
`
`TABLE OF CONTENTS
`
`I. MANDATORY NOTICES ............................................................................. 1
`A.
`Real Party-in-Interest ................................................................................... 1
`B.
`Related Matters ............................................................................................ 1
`C.
`Counsel ........................................................................................................ 5
`D.
`Service Information, Email, Hand Delivery, and Postal ............................. 5
`II.
`CERTIFICATION OF GROUNDS FOR STANDING .................................. 6
`III. OVERVIEW OF CHALLENGE AND RELIEF REQUESTED .................... 6
`A.
`Prior Art Patents and Printed Publications .................................................. 6
`B.
`Grounds for Challenge ................................................................................. 7
`IV.
`INTRODUCTION ........................................................................................... 7
`V.
`TECHNOLOGY BACKGROUND ................................................................. 9
`VI. OVERVIEW OF THE ’037 PATENT .......................................................... 12
`A.
`Summary of the Alleged Invention............................................................ 12
`B.
`Level of Ordinary Skill in the Art ............................................................. 14
`C.
`Prosecution History .................................................................................... 14
`VII. CLAIM CONSTRUCTION .......................................................................... 15
`VIII. SPECIFIC GROUNDS FOR PETITION ...................................................... 17
`A.
`Ground I: Claims 1–4, 7, 9, 10, 17, 18, 21, 23–25, 29, and 32 are
`anticipated by Riddle ................................................................................. 18
`Overview of Riddle .................................................................................. 19
`Claims 1 and 17 are anticipated by Riddle............................................. 21
`Claim 2 is anticipated by Riddle ............................................................. 26
`Claim 3 is anticipated by Riddle ............................................................. 27
`Claim 4 is anticipated by Riddle ............................................................. 28
`Claim 7 is anticipated by Riddle ............................................................. 28
`Claim 9 is anticipated by Riddle ............................................................. 29
`Claim 10 is anticipated by Riddle ........................................................... 29
`Claim 18 is anticipated by Riddle ........................................................... 29
`
`1.
`2.
`3.
`4.
`5.
`6.
`7.
`8.
`9.
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`IPR2016-01710 Petition
`U.S. Patent 7,490,037
`10. Claim 21 is anticipated by Riddle ........................................................... 30
`11. Claim 23 is anticipated by Riddle ........................................................... 30
`12. Claim 24 is anticipated by Riddle ........................................................... 31
`13. Claim 25 is anticipated by Riddle ........................................................... 31
`14. Claim 29 is anticipated by Riddle ........................................................... 32
`15. Claim 32 is anticipated by Riddle ........................................................... 32
`Ground II: Claims 5, 6, 11–14, 19, 20, and 22 are obvious over Riddle .. 33
`B.
`1.
`Claim 5 is obvious over Riddle ............................................................... 33
`2.
`Claim 6 is obvious over Riddle ............................................................... 34
`3.
`Claim 11 is obvious over Riddle ............................................................. 35
`4.
`Claim 12 is obvious over Riddle ............................................................. 36
`5.
`Claim 13 is obvious over Riddle ............................................................. 37
`6.
`Claim 14 is obvious over Riddle ............................................................. 39
`7.
`Claim 19 is obvious over Riddle ............................................................. 39
`8.
`Claim 20 is obvious over Riddle ............................................................. 39
`9.
`Claim 22 is obvious over Riddle ............................................................. 40
`Ground III: Claims 1, 2, 4–11 and 13–32 are obvious over Norris in view
`C.
`of Hinderks, Yabusaki, and Menezes ......................................................... 41
`Overview of Norris .................................................................................. 41
`1.
`Overview of Hinderks .............................................................................. 43
`2.
`Overview of Yabusaki ............................................................................. 43
`3.
`Overview of Menezes .............................................................................. 44
`4.
`Claims 1 and 17 are obvious over Norris in view of Hinderks ............... 45
`5.
`Claim 2 is obvious over Norris in view of Hinderks ............................... 49
`6.
`Claim 4 is obvious over Norris in view of Hinderks and Yabusaki ........ 49
`7.
`Claim 5 is obvious over Norris in view of Hinderks ............................... 50
`8.
`Claim 6 is obvious over Norris in view of Hinderks and Yabusaki ........ 51
`9.
`10. Claim 7 is obvious over Norris in view of Hinderks ............................... 53
`11. Claim 8 is obvious over Norris in view of Hinderks ............................... 53
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`IPR2016-01710 Petition
`U.S. Patent 7,490,037
`12. Claim 9 is obvious over Norris in view of Hinderks ............................... 54
`13. Claim 10 is obvious over Norris in view of Hinderks ............................. 55
`14. Claim 11 is obvious over Norris in view of Hinderks ............................. 56
`15. Claim 13 is obvious over Norris in view of Hinderks ............................. 56
`16. Claim 14 is obvious over Norris in view of Hinderks ............................. 57
`17. Claim 15 is obvious over Norris in view of Hinderks and Yabusaki ...... 58
`18. Claim 16 is obvious over Norris in view of Hinderks and Yabusaki ...... 59
`19. Claim 18 is obvious over Norris in view of Hinderks and Yabusaki ...... 60
`20. Claim 19 is obvious over Norris in view of Hinderks ............................. 61
`21. Claim 20 is obvious over Norris in view of Hinderks ............................. 62
`22. Claim 21 is obvious over Norris in view of Hinderks ............................. 63
`23. Claim 22 is obvious over Norris in view of Hinderks and Yabusaki ...... 64
`24. Claim 23 is obvious over Norris in view of Hinderks ............................. 65
`25. Claim 24 is obvious over Norris in view of Hinderks ............................. 65
`26. Claim 25 is obvious over Norris in view of Hinderks and Menezes ....... 66
`27. Claim 26 is obvious over Norris in view of Hinderks ............................. 67
`28. Claim 27 is obvious over Norris in view of Hinderks ............................. 68
`29. Claim 28 is obvious over Norris in view of Hinderks ............................. 69
`30. Claim 29 is obvious over Norris in view of Hinderks ............................. 69
`31. Claim 30 is obvious over Norris in view of Hinderks ............................. 70
`32. Claim 31 is obvious over Norris in view of Hinderks ............................. 71
`33. Claim 32 is obvious over Norris in view of Hinderks ............................. 72
`IX. CONCLUSION .............................................................................................. 72
`
`
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`IPR2016-01710 Petition
`U.S. Patent 7,490,037
`
`I. MANDATORY NOTICES
`
`A. Real Party-in-Interest
`
`Pursuant to 37 C.F.R. § 42.8(b)(1), Unified Patents Inc. (“Unified” or
`
`“Petitioner”) certifies that Unified is the real party-in-interest, and further certifies
`
`that no other party exercised control or could exercise control over Unified’s
`
`participation in this proceeding, the filing of this petition, or the conduct of any
`
`ensuing trial. In this regard, Unified has submitted voluntary discovery. See
`
`EX1035 (Petitioner’s Voluntary Interrogatory Responses).
`
`B. Related Matters
`
`U.S. Patent 7,490,037 (“the ʼ037 Patent” (EX1001)) is owned by Digital
`
`Audio Encoding Systems, LLC (“DAE”, or “Patent Owner”). See EX1036 (Apple
`
`Complaint), at ¶ 15.
`
`On May 25, 2016, DAE filed a lawsuit in the District of Delaware alleging
`
`infringement of the ʼ037 Patent in Digital Audio Encoding Systems, LLC v. Apple
`
`Inc., No. 1:16-cv-00389 (D. Del. Filed May 25, 2016).
`
`On June 23, 2016, DAE filed multiple additional lawsuits in the District of
`
`Delaware on the same grounds:
`
`Digital Audio Encoding Systems, LLC v. Fry’s Electronics, Inc., No. 1:16-
`
`cv-00481 (D. Del. Filed June 23, 2016);
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`IPR2016-01710 Petition
`U.S. Patent 7,490,037
`Digital Audio Encoding Systems, LLC v. AT&T Inc., No. 1:16-cv-00482 (D.
`
`Del. Filed June 23, 2016);
`
`Digital Audio Encoding Systems, LLC v. Sprint Corporation, No. 1:16-cv-
`
`00483 (D. Del. Filed June 23, 2016);
`
`Digital Audio Encoding Systems, LLC v. Target Corp., No. 1:16-cv-00484
`
`(D. Del. Filed June 23, 2016);
`
`Digital Audio Encoding Systems, LLC v. Overstock.com, Inc., No. 1:16-cv-
`
`00485 (D. Del. Filed June 23, 2016);
`
`Digital Audio Encoding Systems, LLC v. Atlantic Tele-Network, Inc., No.
`
`1:16-cv-00486 (D. Del. Filed June 23, 2016); and
`
`Digital Audio Encoding Systems, LLC v. Samsung Electronics Co. Ltd., et
`
`al., No. 1:16-cv-00487 (D. Del. Filed June 23, 2016).
`
`On June 24, 2016, DAE filed multiple additional lawsuits in the District of
`
`Delaware on the same grounds:
`
`Digital Audio Encoding Systems, LLC v. Amazon.com, Inc., No. 1:16-cv-
`
`00489 (D. Del. Filed June 24, 2016);
`
`Digital Audio Encoding Systems, LLC v. Best Buy Co., Inc., No. 1:16-cv-
`
`00490 (D. Del. Filed June 24, 2016);
`
`Digital Audio Encoding Systems, LLC v. eBay Inc., No. 1:16-cv-00491 (D.
`
`Del. Filed June 24, 2016);
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`IPR2016-01710 Petition
`U.S. Patent 7,490,037
`Digital Audio Encoding Systems, LLC v. Alphabet Inc., No. 1:16-cv-00492
`
`(D. Del. Filed June 24, 2016);
`
`Digital Audio Encoding Systems, LLC v. T-Mobile USA, Inc., No. 1:16-cv-
`
`00493 (D. Del. Filed June 24, 2016);
`
`Digital Audio Encoding Systems, LLC v. Verizon Communications Inc., No.
`
`1:16-cv-00494 (D. Del. Filed June 24, 2016); and
`
`Digital Audio Encoding Systems, LLC v. Wal-Mart Stores, Inc., No. 1:16-cv-
`
`00495 (D. Del. Filed June 24, 2016).
`
`On June 30, 2016, DAE filed multiple additional lawsuits in the District of
`
`Delaware on the same grounds:
`
`Digital Audio Encoding Systems, LLC v. Huawei Technologies Co., Ltd., et
`
`al., No. 1:16-cv-00558 (D. Del. Filed June 30, 2016);
`
`Digital Audio Encoding Systems, LLC v. Motorola Mobility LLC, No. 1:16-
`
`cv-00559 (D. Del. Filed June 30, 2016);
`
`Digital Audio Encoding Systems, LLC v. HTC Corporation, et al., No. 1:16-
`
`cv-00560 (D. Del. Filed June 30, 2016);
`
`Digital Audio Encoding Systems, LLC v. Toshiba Corporation, et al., No.
`
`1:16-cv-00561 (D. Del. Filed June 30, 2016);
`
`Digital Audio Encoding Systems, LLC v. LG Electronics, Inc., et al., No.
`
`1:16-cv-00562 (D. Del. Filed June 30, 2016);
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`IPR2016-01710 Petition
`U.S. Patent 7,490,037
`Digital Audio Encoding Systems, LLC v. Nokia Corporation, et al., No.
`
`1:16-cv-00565 (D. Del. Filed June 30, 2016);
`
`Digital Audio Encoding Systems, LLC v. Blackberry Limited, et al., No.
`
`1:16-cv-00566 (D. Del. Filed June 30, 2016);
`
`Digital Audio Encoding Systems, LLC v. Sony Corporation, et al., No. 1:16-
`
`cv-00567 (D. Del. Filed June 30, 2016); and
`
`Digital Audio Encoding Systems, LLC v. ZTE Corporation, et al., No. 1:16-
`
`cv-00568 (D. Del. Filed June 30, 2016).
`
`On July 5, 2016, DAE filed multiple additional lawsuits in the District of
`
`Delaware on the same grounds:
`
`Digital Audio Encoding Systems, LLC v. Bank of America Corporation, No.
`
`1:16-cv-00574 (D. Del. Filed July 5, 2016);
`
`Digital Audio Encoding Systems, LLC v. Telefonaktiebolaget LM Ericsson,
`
`et al., No. 1:16-cv-00575 (D. Del. Filed July 5, 2016);
`
`Digital Audio Encoding Systems, LLC v. ASUSTek Computer Inc., et al., No.
`
`1:16-cv-00576 (D. Del. Filed July 5, 2016);
`
`Digital Audio Encoding Systems, LLC v. Cisco Systems, Inc., No. 1:16-cv-
`
`00577 (D. Del. Filed July 5, 2016); and
`
`Digital Audio Encoding Systems, LLC v. International Business Machines
`
`Corporation, No. 1:16-cv-00578 (D. Del. Filed July 5, 2016).
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`IPR2016-01710 Petition
`U.S. Patent 7,490,037
`DAE filed against, inter alia, Apple Inc., Fry’s Electronics, Inc., AT&T Inc.,
`
`Sprint Corporation, Target Corp., Overstock.com, Inc., Atlantic Tele-Network,
`
`Inc., Samsung Electronics Co. Ltd., Amazon.com, Inc., Best Buy Co., Inc., eBay
`
`Inc., Alphabet Inc., T-Mobile USA, Inc., Verizon Communications Inc., Wal-Mart
`
`Stores, Inc., Huawei Technologies Co., Ltd., Motorola Mobility LLC, HTC
`
`Corporation, Toshiba Corporation, LG Electronics, Inc., Nokia Corporation,
`
`Blackberry Limited, Sony Corporation, ZTE Corporation, Bank of America
`
`Corporation, Telefonaktiebolaget LM Ericsson, ASUSTek Computer Inc., Cisco
`
`Systems, Inc., and International Business Machines Corporation, claiming that
`
`certain of these companies’ products or services infringe the ʼ037 Patent. It is the
`
`sole patent raised. These cases are in their early stages and no schedule or trial
`
`date has been set.
`
`C. Counsel
`
`Vincent J. Galluzzo (Reg. No. 67,830) will act as lead counsel; Teresa
`
`Stanek Rea (Reg. No. 30,427) and Jonathan Stroud (Reg. No. 72,518) will act as
`
`back-up counsel.
`
`D.
`
`Service Information, Email, Hand Delivery, and Postal
`
`Unified consents to electronic service at vgalluzzo@crowell.com and
`
`jonathan@unifiedpatents.com. Petitioner can be reached at Crowell & Moring
`
`LLP, 1001 Pennsylvania Avenue, N.W., Washington, DC 20004, Tel.: (202) 624-
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`IPR2016-01710 Petition
`U.S. Patent 7,490,037
`2781, Fax: (202) 628-8844 and Unified Patents Inc., 1875 Connecticut Avenue,
`
`N.W., Floor 10, Washington, D.C. 20009, Tel.: (650) 999-0899.
`
`II. CERTIFICATION OF GROUNDS FOR STANDING
`
`Petitioner certifies pursuant to Rule 42.104(a) that the patent for which
`
`review is sought is available for inter partes review and that Petitioner is not
`
`barred or estopped from requesting an inter partes review challenging the patent
`
`claims on the grounds identified in this Petition.
`
`III. OVERVIEW OF CHALLENGE AND RELIEF REQUESTED
`
`Pursuant to Rules 42.22(a)(1) and 42.104(b)(1)–(2), Petitioner challenges
`
`claims 1–32 of the ʼ037 Patent.
`
`A.
`
`Prior Art Patents and Printed Publications
`
`The following references are pertinent to the grounds of unpatentability
`
`explained below. None of the following references were considered by the
`
`Examiner during prosecution of the ’037 Patent:1
`
`1.
`
`U.S. Patent 6,175,856 (filed on September 30, 1996, published on
`
`January 16, 2001) (“Riddle”) (EX1003), which is prior art under 35
`
`U.S.C. § 102(e).
`
`
`1 The ʼ037 Patent issued from a patent application filed prior to enactment of the
`
`America Invents Act (“AIA”). Accordingly, pre-AIA statutory framework applies.
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`IPR2016-01710 Petition
`U.S. Patent 7,490,037
`U.S. Patent 5,557,749 (filed on October 15, 1992, published on
`
`2.
`
`September 17, 1996) (“Norris”) (EX1004), which is prior art under 35
`
`U.S.C. § 102(a).
`
`3.
`
`U.S. Patent 6,041,295 (filed on April 10, 1996, published on March
`
`21, 2000) (“Hinderks”) (EX1005), which is prior art under 35 U.S.C.
`
`§ 102(e).
`
`4.
`
`U.S. Patent 5,513,211 (filed on May 25, 1994, published on April 30,
`
`1996) (“Yabusaki”) (EX1006), which is prior art under 35 U.S.C.
`
`§ 102(b).
`
`5.
`
`U.S. Patent 5,621,894 (filed on August 9, 1995, published on April
`
`15, 1997) (“Menezes”) (EX1007), which is prior art under 35 U.S.C.
`
`§ 102(a).
`
`B. Grounds for Challenge
`
`This Petition, supported by the Declaration of Leonard Laub (“Laub
`
`Declaration” (EX1002)), requests cancellation of challenged claims 1–32 as
`
`unpatentable under 35 U.S.C. §§ 102 or 103. See 35 U.S.C. § 314(a).
`
`IV.
`
`INTRODUCTION
`
`Encoding of audio signals can be complicated and heavily reliant on
`
`complex mathematical algorithms and computer processing techniques. While the
`
`ʼ037 Patent is titled “Method and Apparatus for Encoding Signals,” it does not deal
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`IPR2016-01710 Petition
`U.S. Patent 7,490,037
`with these complex algorithms or processing techniques. In fact, the ʼ037 Patent
`
`has little to do with encoding techniques themselves.
`
`The ’037 Patent is instead directed to a simple idea: using a “middleman”
`
`control device between an upstream device that sends an audio signal and a
`
`downstream device that receives the audio signal. The middleman simply chooses
`
`the encoding format to apply to the audio signal from a predetermined list based on
`
`information that the middleman knows or discovers about the downstream device.
`
`But this idea had already been proposed years earlier in the field of computer
`
`networking by companies like Apple Computer, Inc., Microsoft Corporation, and
`
`Intel Corporation. See EX1003 (Riddle), EX1007 (Menezes), EX1004 (Norris),
`
`EX1009 (Mirashrafi).
`
`In networking systems, numerous computers with differing capabilities and
`
`requirements needed to be able to send and receive audio and video data in real
`
`time. So those skilled in the art developed solutions to find and use the most
`
`efficient encoding methods for the network. A common solution was to negotiate
`
`encoding methods among the computers or terminals connected to the network to
`
`determine the “best” encoding method to use. These pre-1997 solutions are no
`
`different from the “invention” claimed in the ʼ037 Patent.
`
`The ʼ037 Patent was not novel, and was obvious as of July 1, 1997, over the
`
`various encoding format negotiation and selection schemes known in the art.
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`IPR2016-01710 Petition
`U.S. Patent 7,490,037
`Claims 1–32 of the ʼ037 Patent are therefore unpatentable in light of at least the
`
`grounds presented herein.
`
`V. TECHNOLOGY BACKGROUND
`
`A. The Basics of Encoding and Decoding of Digital Signals
`
`The technology discussed in this Petition generally relates to the encoding of
`
`digital audio signals and methods of selecting an appropriate encoding format for
`
`the encoding of that signal. EX1001 (ʼ037 Patent), at 1:56–57, 4:50–53. The term
`
`“encoding” broadly refers to the representation of a piece of information in another
`
`form. See EX1013 (Painter), at 1.2 “Compression” and “encryption” are two
`
`terms that are subsets of “encoding,” as each represents a piece of information in
`
`another form, size-reduced or scrambled, respectively.
`
` EX1002 (Laub
`
`Declaration), at ¶ 26.
`
`Just like today, end users in 1997 expected high-quality audio reproduction
`
`from a digital system. EX1013 (Painter), at 1. Yet with high-quality audio
`
`reproduction comes an increased “cost of transmission,” EX1005 (Hinderks), at
`
`1:43–44, and an “ever increasing volume of data to be transferred between
`
`systems,” EX1004 (Norris), at 1:27–28. This was as much at odds with
`
`
`2 The Painter reference was published at least as early as July 2, 1997 at the
`
`International Conference on Digital Signal Processing. See EX1037 at XXI.
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`IPR2016-01710 Petition
`U.S. Patent 7,490,037
`technological constraints like storage space, processing power, and network
`
`bandwidth as it is today. EX1014 (Furht), at 47.
`
`Encoding satisfies these competing interests by attempting to maximize both
`
`efficiency and quality. Encoding can “represent the signal with a minimum
`
`number of bits,” i.e., amount of data, “while generating output audio which cannot
`
`be distinguished from the original input, even by a sensitive listener.” EX1013
`
`(Painter), at 1. Compression encoding even further reduces the size of that data to
`
`be stored or transmitted, and therefore the associated transmission costs. See
`
`EX1015 (Pan), at 1; EX1014 (Fuhrt), at 48; EX1005 (Hinderks), at 1:46–49.
`
`Compression and other encoding techniques work by complementary
`
`“encoders” and “decoders.” EX1015 (Pan), at 7; EX1005 (Hinderks), at 1:52–61.
`
`The encoder receives an input data stream (e.g., digitized audio) and processes that
`
`data stream in accordance with a compression (encoding) algorithm. EX1015
`
`(Pan), at 7–8. After the compressed digital signal reaches its destination, the
`
`decoder simply reverses the processing steps taken by the encoder to reconstruct
`
`the original data stream. Id.
`
`Even before 1997, there was considerable research on encoding schemes.
`
`EX1013 (Painter), at 1; see also EX1016 (Plenge); EX1012 (Taniguchi); EX1017
`
`(Barrett); EX1018 (Nardone); EX1020 (Hienerwadel); EX1021 (Wiese ’715);
`
`EX1022 (Sedlmeyer); EX1023 (Dolby); EX1024 (Fujisaki). Out of this research
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`IPR2016-01710 Petition
`U.S. Patent 7,490,037
`came a number of standards, particularly between 1992 and 1997, some of which
`
`were available commercially. EX1013 (Painter), at 1, 25.
`
`One of those commercially available standards was “MPEG/audio,” which
`
`compressed an audio signal in part by exploiting the perceptual limitations of the
`
`human ear, known as a “psychoacoustic model.” EX1015 (Pan), at 6–7, 10;
`
`EX1013 (Painter), at 3. MPEG/audio removes certain parts of the audio signal
`
`that cannot be heard by the human ear, such as very high or very low frequencies.
`
`Id. Other psychoacoustic compression techniques were well known before 1997.
`
`See EX1001 (ʼ037 Patent), at 1:25–29; EX1025 (Klank); EX1026 (Kim); EX1027
`
`(Stautner).
`
`B.
`
`Encoding Format Selection Schemes
`
`In many early data communications systems, a sender would encode data in
`
`a certain format without first making sure that the receiver could accept a signal
`
`encoded in that format. EX1001 (ʼ037 Patent), at 1:30–44. This was inefficient, as
`
`there was no guarantee that the encoding methods available to the sender would be
`
`available to the receiver. EX1011 (H.323), at 12. If a sender were to select poorly,
`
`and the encoding method not be compatible with the receiver, the signal would
`
`need to be “re-coded.” EX1001 (ʼ037 Patent), at 1:33–37, 39–42. Thus, before
`
`1997, those skilled in the art knew to coordinate encoding methods between the
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`IPR2016-01710 Petition
`U.S. Patent 7,490,037
`encoder and decoder by various encoding format selection schemes to overcome
`
`these problems.
`
`One such encoding format selection scheme was part of an international
`
`standard known as H.323. EX1011 (H.323). In the H.323 standard, the encoder
`
`initiates a “capability exchange” with the decoder by requesting the video bit rate,
`
`picture format, and audio encoding algorithm options that can be accepted by the
`
`decoder. Id. at 13. The encoder then transmits audio and video streams in real
`
`time to decoder in any format that is within the decoder’s capability set. Id. at i,
`
`13. Similar solutions were developed around the same time, all before 1997. See
`
`EX1008 (Sharma), at Abstract, 2:22–24, 30:55–57, 31:31–37, 32:27–30; EX1009
`
`(Mirashrafi), at 74:1–8; EX1010 (Spiess), at 7:17–25, 7:38–40, 7:49–63.
`
`VI. OVERVIEW OF THE ’037 PATENT
`
`A.
`
`Summary of the Alleged Invention
`
`The ʼ037 Patent is directed to methods of negotiating an encoding algorithm
`
`for encoding digital audio based on the capabilities or parameters of a downstream
`
`processing device. EX1001 (ʼ037 Patent), at 1:16–19, 1:56–57, 2:12–16. These
`
`methods utilize a simple control unit that does no more than agree on an encoding
`
`format with the processing device by a simple “handshake” protocol:
`
`(1)
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`transmit “a test signal” to the processing device;
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`determine “the properties or the property parameters” of the
`
`(2)
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`processing device;
`
`(3)
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`select an encoding format based on those properties or parameters;
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`and
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`(4)
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`set a simple switch to select a desired encoding format for a
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`subsequent digital audio signal.
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`Id. at 2:12–16, 3:38–39, 4:30–32, 4:42–47, 4:50–53.
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`Figure 1 of the ʼ037 Patent illustrates a block circuit diagram implementing
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`the handshake negotiation between control unit K and various downstream
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`processing devices such as transmission channels U1 and U2 and storage device
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`SP (red annotations added):
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`processing devices
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`Encoding algorithms
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`switch
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`control unit
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`Test signals
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`In Figure 1, a digitized audio signal TE arrives at switch S1, which is
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`controlled by control unit K. Id. at 4:32, 42–43. Control unit K determines the
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`position of switch S1 based on a test signal previously sent to the downstream
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`processing device (storage device SP or transmission channel U1 or U2). Id. at
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`4:42–47. That test signal provides information about the properties or parameters
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`of the downstream processing device to control unit K. Id. Based on those
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`properties or parameters, control unit K selects the appropriate encoding algorithm
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`for audio signal TE: either C1 or C2. Id. at 4:42–47, 50–53. Control unit K then
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`sets switch S1 to direct audio signal TE to that desired encoding algorithm, C1 or
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`C2. Id. at 4:50–53. As the prior art repeatedly demonstrates, however, this
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`concept of a negotiation between two devices for pre-determining an encoding
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`format was not novel, and was obvious at the time the ʼ037 Patent was filed.
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`B.
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`Level of Ordinary Skill in the Art
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`A person of ordinary skill in the art (“POSA”) for the ʼ037 Patent would
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`have a bachelor’s degree in electrical engineering or a related subject, and at least
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`three years of experience working with digital audio encoding and compression
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`techniques. EX1002 (Laub Declaration), at ¶ 23.
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`C.
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`Prosecution History
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`The ’037 Patent issued from U.S. Patent Application 11/143,011 (the “’011
`
`Application”), which was filed on June 2, 2005, EX1001 (ʼ037 Patent) at (22), and
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`which is a continuation of U.S. Patent Application 09/462,049. Id. at (63), 1:9–11.
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`The ʼ037 Patent claims priority to German Patent Application 197 27 938.4 filed
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`on July 1, 1997. Id. at 1:7–9. In the only Office Action, the Examiner rejected all
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`claims in the ’011 Application using the same references and arguments previously
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`used against the parent ʼ049 Application. EX1032 (’037 File History, Non-Final
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`Office Action (12/10/2007)). After the Applicants amended the independent
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`claims wholesale, EX1033 (ʼ037 File History, Amendment and Response
`
`(6/10/2008)), the Examiner issued a Notice of Allowability, EX1034 (ʼ037 File
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`History, Notice of Allowability (10/21/2008)).
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`VII. CLAIM CONSTRUCTION
`
`Claim terms of a patent in inter partes review are normally given their
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`“broadest reasonable construction in light of the specification.” 37 C.F.R.
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`§ 42.100(b); Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2144–46 (2016).
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`The following discussion proposes constructions and support for
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`those
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`constructions. Any claim terms not included in the following discussion should be
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`given their broadest reasonable construction in light of the specification.
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`“property of the processing device”
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`The phrase “property of the processing device” should be interpreted to
`
`mean “capability or parameter of the processing device.”
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`The ʼ037 Patent does not define the term “property,” but provides
`
`definitional equivalents, such as “parameters,” “property parameters,” and
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`“possibilities” of the processing device. See EX1001 (ʼ037 Patent), at 4:46–47,
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`2:13–14, 1:65–2:1. The ʼ037 Patent describes that “the encoding format is
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`determined in dependence on the properties of the processing device,” making it
`
`“possible in the encoding procedure to take account of and use the encoding
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`formats which are necessary for the connected items of equipment.” Id. at 1:56–
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`57, 62–64. The ʼ037 Patent then goes on to give non-limiting examples of such
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`“properties,” including “bit rate,” “processor power,” and “power.” Id. at 3:40–42,
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`15:37, 43. In fact, the “bit rate,” “processor power,” and “power” examples are
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`also recited as limitations in dependent claims 5, 6, and 19 of the ’037 Patent, and
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`thus, the interpretation of “property” should be broad enough to encompass at least
`
`these limitations. See Acumed LLC v. Stryker Corp., 483 F.3d 800, 806 (Fed. Cir.
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`2007) (“independent claims are presumed to have broader scope than their
`
`dependencies”); Liebel-Flarsheim Co. v. Medrad, Inc., 358 F.3d 898, 910 (Fed.
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`Cir. 2004).
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`“test signal”
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`The term “test signal” should be interpreted to mean “a signal for obtaining
`
`information used in determining the encoding format or parameters.”
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`The ʼ037 Patent does not define the term “test signal,” but describes that
`
`“the properties or the property parameters of the selected transmission and/or
`
`storage and/or decoding devices are ascertained by one or more test signals
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`directed to the corresponding device” and “the encoding format is determined in
`
`dependence on the properties of the processing device.” EX1001 (ʼ037 Patent), at
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`2:13–16; 1:56–57. The ʼ037 Patent also provides an example where a “test signal”
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`is used to “establish the properties of the connected device, thus for example the bit
`
`rate of the connected transmission channel, suitably to automatically select the
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`encoding format by means of the control device.” Id. at 3:40–43.
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`“and/or”
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`The term “and/or” should be interpreted to mean “or.” As the Board found
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`in Ex parte Gross, the phrase “A and/or B” is broad enough to be read as “or,” as it
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`“covers embodiments having element A alone, element B alone, or elements A and
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`B taken together.” Ex parte Gross, Appeal 2011-004811, 2013 WL 6907805, at *2
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`(P.T.A.B. Dec. 31, 2013).
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`VIII. SPECIFIC GROUNDS FOR PETITION
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`Pursuant to Rule 42.104(b)(4)–(5), the following sections detail the grounds
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`of unpatentability, the limitations of the challenged claims of the ʼ037 Patent, and
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`how these claims were therefore anticipated or obvious in view of the prior art.
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`In addition to the prior art references discussed in detail in the following
`
`sections, the following references may also serve as grounds for unpatentability:
`
` U.S. Patent 5,546,395 (filed on November 29, 1994, published on
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`August 13, 1996) (“Sharma”) (EX1008), which is prior art under 35
`
`U.S.C. § 102(a);
`
` U.S. Patent 5,574,934 (filed on November 15, 1994, published on
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`November 12, 1996) (“Mirashrafi”) (EX1009), which is prior art
`
`under 35 U.S.C. § 102(a);
`
` U.S. Patent 5,889,818 (filed on September 29, 1995, published on
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`March 30, 1999) (“Spiess”) (EX1010), which is prior art under 35
`
`U.S.C. § 102(e); and
`
` International Telecommunication Union, ITU-T H.323 (November
`
`1996) (“H.323”) (EX1011), which is prior art under 35 U.S.C.
`
`§ 102(a).
`
`Petitioner does not include a detailed discussion of these references or grounds due
`
`to the word limit of 37 C.F.R. § 42.24(a)(1)(i).
`
`A. Ground I: Claims 1–4, 7, 9, 10, 17, 18, 21, 23–25, 29, an