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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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`DELL INC.; EMC CORPORATION; HEWLETT-PACKARD
`ENTERPRISE CO.; HP ENTERPRISE SERVICES, LLC; TERADATA
`OPERATIONS, INC.; and VERITAS TECHNOLOGIES, LLC;
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`Petitioners,
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`v.
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`REALTIME DATA LLC,
`Patent Owner.
`____________________
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`Case IPR2017-001761
`Patent No. 7,161,506
`____________________
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`PATENT OWNER’S OPPOSITION
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`RE: EX PARTE SCHULHAUSER
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`1 Case IPR2017-00806 has been consolidated with this proceeding. Case
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`IPR2017-01688 has been joined with this proceeding.
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`IPR2017-00176 & -00806
`PATENT OWNER’S OPPOSITION RE: EX PARTE SCHULHAUSER
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`Ex Parte Schulhauser (“Schulhauser”) does not support a finding of
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`unpatentability as to any claim at issue in this proceeding for five reasons.2
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`First, Petitioner did not timely present any argument or theory based
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`on Schulhauser, and has waived the ability to do so. The Board is legally
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`foreclosed from now finding unpatentability based on Schulhauser sua
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`sponte. Intelligent Bio-Systems, Inc. v. Illumina Cambridge Ltd., 821 F.3d
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`1359, 1369 (Fed. Cir. 2016) (“[T]he expedited nature of IPRs bring with it
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`an obligation for petitioners to make their case in their petition to institute.”);
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`In re Magnum Oil Tools Int’l, Ltd., 829 F.3d 1364, 1381 (Fed. Cir. 2016)
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`(rejecting the Board’s reliance on unpatentability arguments that “could have
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`been included” in the petition but were not); Wasica Finance GMBH v.
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`Continental Auto. Systems, 853 F.3d 1272, 1286 & n.9 (Fed. Cir. 2017)
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`(holding that a petitioner cannot establish unpatentability based on new
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`theories presented in its reply brief and that “[s]hifting arguments in this
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`fashion is foreclosed by statute, our precedent, and Board guidelines.”)
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`(internal citations omitted); Ariosa Diagnostics v. Verinata Health, Inc., 805
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`2 Patent Owner objects to the Board’s requirement of simultaneous
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`briefing. Petitioner bears the burden of proof, and Patent Owner is not fairly
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`heard where it cannot know of arguments before being asked to rebut them.
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`1
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`IPR2017-00176 & -00806
`PATENT OWNER’S OPPOSITION RE: EX PARTE SCHULHAUSER
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`F.3d 1359, 1367 (Fed. Cir. 2015) (because Petitioner bears the burden in IPR
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`proceedings, “a challenge can fail even if different evidence and arguments
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`might have led to success”); 5 U.S.C. § 554(b)(3); 77 Fed. Reg. 48,756,
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`48,768; 37 C.F.R. § 42.23(b). Schulhauser’s precedential designation pre-
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`dates the Petition. Yet the Petition did not raise it, and Patent Owner did not
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`have a full and fair opportunity to develop responsive evidence or argument.
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`Second, applying Schulhauser in the context of this proceeding would
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`be arbitrary and capricious, and unconstitutional. The Schulhauser decision
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`arose in the context of a pending prosecution. In that setting, a patentee can
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`work around Schulhauser by simply amending claims to avoid limitations
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`that will not be given patentable weight. By contrast, during prosecution
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`Realtime had no notice from the PTO of Schulhauser or the prospect that
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`certain limitations of its claims would be given no patentable weight. Rather,
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`during reexamination of the ’506 patent, the Office gave the limitations at
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`issue patentable weight. See Ex. 1007 at 27-28, 32-33, 35; Ex. 1012 at 27-28
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`(agreeing with Realtime that LBX, Lafe, Reynar, and French failed to teach
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`the same limitations at issue in this briefing). Realtime maintained the
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`limitations on that basis, and made significant investments and expenditures
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`to enforce and defend the claims. Moreover, whereas the PTO must
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`undertake notice and comment rulemaking to apply the rule of Schulhauser
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`2
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`IPR2017-00176 & -00806
`PATENT OWNER’S OPPOSITION RE: EX PARTE SCHULHAUSER
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`to IPRs, the PTO has not issued any rule, regulation, or policy complying
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`with the requirements of the Administrative Procedure Act that extends
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`Schulhauser to issued claims later challenged through IPR. See Aqua
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`Products v. Matal, 872 F.3d 1290, 1319-1322, 1328 (Fed. Cir. 2017) (en
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`banc) (requiring notice and comment rulemaking for substantive PTO
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`positions that would impact final decisions on patentability). Notably,
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`Schulhauser itself is entirely directed to prosecution, not IPR. Nor could the
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`PTO apply the rule of Schulhauser retroactively to issued claims. There is
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`no express Congressional grant to support such retroactive rulemaking, and
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`it is thus foreclosed by the APA and Supreme Court precedent. Bowen v.
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`Georgetown Univ. Hospital, 488 U.S. 204, 208-09 (1988). Applying
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`Schulhauser here would also violate the Due Process Clause. For instance,
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`Schulhauser only arose here after the time to bring a motion to amend had
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`passed. Finally, depriving Patent Owner of the weight that the Office once
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`afforded to its issued claim limitations would constitute an unlawful taking.
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`Third, Schulhauser rests entirely on two non-precedential Federal
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`Circuit decisions that do not support its holding, and it is legally incorrect. In
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`Applera v. Illumina, the Federal Circuit held that all limitations of claim 1—
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`including 1(c)—are met once the sequence of nucleotides is determined. 375
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`F. App’x. 12, 21 (Fed. Cir. 2010). Applera did not hold that claim 1 could be
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`3
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`IPR2017-00176 & -00806
`PATENT OWNER’S OPPOSITION RE: EX PARTE SCHULHAUSER
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`met without determining the sequence of nucleotides, or by ignoring
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`limitation 1(c). To the contrary, it stated that the requirement of limitation
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`1(c) was “[t]he distinguishing feature of the invention. . . .” Id. Applera thus
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`held that all limitations of claim 1 were practiced, not that the claim could be
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`met even if some limitations were never practiced. In Cybersettle v. Nat’l
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`Arbitration Forum, the court expressly noted that the claim at issue
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`contained “no conditional language.” 243 F. App’x. 603, 607 (Fed. Cir.
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`2007). So the language Schulhauser quotes from Cybersettle is merely
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`fleeting dicta. It is also not supported by any internal citations. By contrast,
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`Federal Circuit precedent holds that even the “broadest reasonable
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`interpretation” standard forbids a construction that reads out limitations
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`explicitly recited in a claim, or that causes the claim to read onto prior art
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`approaches expressly taught away from in the specification. In re Suitco
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`Surface, 603 F.3d 1255, 1260-1261 (Fed. Cir. 2010); In re Smith, 871 F.3d
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`1375, 1382-84 (Fed. Cir. 2017); In re NTP, Inc., 654 F.3d 1279, 1287-88
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`(Fed. Cir. 2011). Here, the specification specifically teaches against using
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`only content dependent compression. Ex. 1001 at 2:54-3:45. Instead, the
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`specification teaches methods “for providing fast and efficient data
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`compression using a combination of content independent data compression
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`and content dependent data compression.” Paper 19 at 2. Interpreting the
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`4
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`IPR2017-00176 & -00806
`PATENT OWNER’S OPPOSITION RE: EX PARTE SCHULHAUSER
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`claims to be met based on a purely content dependent approach—i.e.,
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`ignoring limitations 104[c] and 105[d2]—would be precisely what the
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`specification taught against, and cannot be correct even under BRI.
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`Fourth, applying Schulhauser would not support a finding of
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`unpatentability as to any challenged claim because the Petition fails for other
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`reasons. Petitioner’s theory relies on a combination that includes Sebastian,
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`and the Board instituted on that basis. Petitioner’s motivation to combine
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`Franaszek with Sebastian is based on the premise that Franaszek can face
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`situations where it has a data type, but does not have an encoder associated
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`with that data type. POR at 15; Pet. at 42-43; Oral Hearing Demonstratives
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`(“Demonstratives”) at Slide 89. But the testimony of both Dr. Creusere and
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`Dr. Zeger establishes that a POSA would know that Franaszek does not have
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`that problem. POR at 15-17; Demonstratives at 90-91. Accordingly, the
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`Petition’s motivation to combine with respect to Sebastian fails, and the
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`Petition thus fails as a whole. POR at 16-17. Moreover, the testimony of
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`both experts also establishes that Sebastian does not teach or suggest what
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`Petitioner purports. POR at 17-19; Demonstratives at 93-98.
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`Fifth, the only expert testimony of record demonstrates that all of the
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`limitations of claims 104 and 105 must be met under Petitioner’s
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`obviousness theory, or else obviousness cannot be found. Ex. 2004 ¶¶ 32-38.
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`5
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`IPR2017-00176 & -00806
`PATENT OWNER’S OPPOSITION RE: EX PARTE SCHULHAUSER
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`Date: March 5, 2018
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`Respectfully submitted,
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`/s/ Kayvan Noroozi
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`William P. Rothwell, Reg. No. 72,522
`NOROOZI PC
`2245 Texas Drive, Suite 300
`Sugar Land, TX 77479
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`Kayvan B. Noroozi, Admitted Pro Hac Vice
`NOROOZI PC
`1299 Ocean Ave., Suite 450
`Santa Monica, CA 90401
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`Counsel for Patent Owner
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`6
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`IPR2017-00176 & -00806
`PATENT OWNER’S OPPOSITION RE: EX PARTE SCHULHAUSER
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`CERTIFICATION OF SERVICE
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`The undersigned hereby certifies that the foregoing PATENT
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`OWNER’S OPPOSITION RE: EX PARTE SCHULHAUSER was served
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`electronically via e-mail on March 5, 2018, to the following counsel of
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`record for Petitioner:
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`IPR2017-00176
`Andrew R. Sommer
`Thomas M. Dunham
`Garth A. Winn
`Vivek V. Krishnan
`Lisa K. Nguyen
`Robert Steinberg
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`
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`IPR2017-00806
`Eliot D. Williams
`Jamie R. Lynn
`Andrew Wilson
`Michelle Eber
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`Date: March 5, 2018
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`IPR2017-00176@winston.com
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`garth.winn@klarquist.com
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`Lisa.Nguyen@lw.com
`bob.steinberg@lw.com
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`eliot.williams@bakerbotts.com
`jamie.lynn@bakerbotts.com
`andrew.wilson@bakerbotts.com
`michelle.eber@bakerbotts.com
`DLTeradata@bakerbotts.com
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`Respectfully submitted,
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`/s/ Kayvan Noroozi
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`Kayvan B. Noroozi, Admitted Pro Hac Vice
`NOROOZI PC
`1299 Ocean Ave., Suite 450
`Santa Monica, CA 90401
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`Counsel for Patent Owner
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`7
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