UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`DELL INC.; EMC CORPORATION; HEWLETT-PACKARD
`ENTERPRISE CO.; HP ENTERPRISE SERVICES, LLC; TERADATA
`OPERATIONS, INC.; and VERITAS TECHNOLOGIES, LLC,
`Petitioners,
`
`v.
`
`REALTIME DATA LLC d/b/a IXO,
`Patent Owner.
`
`Case: IPR2017-001761
`* * * * *
`Case: IPR2017-00806
`
`[Consolidated]
`Patent No. 7,161,506
`
`PETITIONER’S BRIEF PURSUANT TO
`THE BOARD’S FEBRUARY 23rd ORDER
`
`1 Case IPR2017-01688 has been joined with this proceeding.
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`DELL INC.; EMC CORPORATION; HEWLETT-PACKARD
`ENTERPRISE CO.; HP ENTERPRISE SERVICES, LLC; TERADATA
`OPERATIONS, INC.; and VERITAS TECHNOLOGIES, LLC,
`Petitioners,
`
`v.
`
`REALTIME DATA LLC d/b/a IXO,
`Patent Owner.
`
`Case: IPR2017-001761
`* * * * *
`Case: IPR2017-00806
`
`[Consolidated]
`Patent No. 7,161,506
`
`PETITIONER’S BRIEF PURSUANT TO
`THE BOARD’S FEBRUARY 23rd ORDER
`
`1 Case IPR2017-01688 has been joined with this proceeding.
`
`
`
`TABLE OF CONTENTS
`
`I.
`II.
`
`SCHULHAUSER APPLIES TO CLAIMS 104 AND 105 ......................... 1
`PETITIONERS’ REPLY ARGUMENTS WERE PROPER .................... 2
`A.
`The Full Factual Basis of Petitioners’ Prima Facie Case Was Set
`Forth in its Petition ................................................................................ 2
`Petitioners’ Reply Arguments Respond to the PO Response ............... 2
`B.
`PO Has Had Notice and a Fair Opportunity to Respond ...................... 3
`C.
`III. SCHULHAUSER IS SOUND AND BINDING AUTHORITY ................. 3
`A.
`The Board’s SOPs Require the Board to Apply Schulhauser ............... 3
`B.
`Schulhauser Was Correctly Decided..................................................... 4
`IV. CONCLUSION .............................................................................................. 5
`
`i
`
`
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`CASES
`Aqua Prod., Inc. v. Matal,
`872 F.3d 1290 (Fed. Cir. 2017) ............................................................................ 4
`
`Belden Inc. v. Berk-Tek LLC,
`805 F.3d 1064 (Fed. Cir. 2015) ............................................................................ 3
`
`Cybersettle, Inc. v. Nat'l Arbitration Forum, Inc.,
`243 F. App'x 603, 607 (Fed. Cir. 2007) ............................................................... 5
`
`EmeraChem Holdings, LLC v. Volkswagen Group of Am., 859 F.3d
`1341 (Fed. Cir. 2017) ........................................................................................... 3
`
`Ex parte Schulhauser,
`2016 WL 6277792, No. 2013-007847, 8-9 (PTAB Apr. 28, 2016) ............passim
`
`Ex parte Urbanet,
`Appeal 2011-002606, 2012 WL 4460637 (PTAB Sept. 19, 2012) ...................... 5
`
`Fresenius USA, Inc. v. Baxter Int’l, Inc.,
`
`582 F.3d 1288, 1298 (Fed. Cir. 2009) ................................................................. 5
`In re Johnston, 435 F.3d 1381 (Fed. Cir. 2006) ........................................................ 5
`In re Kollar, 286 F.3d 1326 (Fed. Cir. 2002) ........................................................... 4
`Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292 (Fed. Cir. 2015) ...................... 4
`
`Netword, LLC v. Centraal Corp., 242 F.3d 1347 (Fed. Cir. 2001) .......................... 3
`
`Reactive Surfaces LTD., LLP, v. Toyota Motor Corporation,
`IPR2016-01914, Paper 60 (PTAB Jan. 12, 2018) ............................................... 3
`Samsung Elecs. Co., Ltd. v. Infobridge Pte. Ltd.,
`IPR2017-00100, 2017 WL 1534929 (Apr. 26, 2017) .......................................... 5
`
`ii
`
`
`
`Scripps Clinic & Research Found. v. Genentech, Inc., 927 F.2d 1565,
`1583 (Fed. Cir. 1991) ........................................................................................... 5
`Skky, Inc. v. MindGeek, s.a.r.l., 859 F.3d 1014 (Fed. Cir. 2017) ............................. 3
`
`OTHER AUTHORITIES
`37 C.F.R. §§ 42.25(b), 42.23(b) ............................................................................. 2, 3
`MPEP, § 2111.04 ....................................................................................................... 5
`PTAB Standard Operating Procedure No. 2 Rev. 9 (Sept. 22, 2014) ....................... 5
`
`iii
`
`
`
`Petitioner submits this brief pursuant to the Board’s February 23, 2018 Order
`
`Authorizing Additional Briefing. See Paper 38. Schulhauser is applicable to claims
`
`104 and 105, is sound under the law, and, as precedent, should be followed here.
`
`Finally, Petitioner’s reliance on Schulhauser in their reply was proper.
`
`I.
`
`SCHULHAUSER APPLIES TO CLAIMS 104 AND 105
`The Board’s Order in Ex parte Schulhauser, No. 2013-007847, at 8-10 (PTAB
`
`Apr. 28, 2016) (precedential) holds that when a patentee drafts method claims in a
`
`format where one step of the method is performed to the exclusion of another (e.g.,
`
`“if X, then Y; if not X, then Z”), only one step needs to be disclosed or rendered
`
`obvious by the prior art. In other words, the claim covers two distinct methods: one
`
`in which the prerequisite condition is met, and another in which the prerequisite
`
`condition is unmet. Schulhauser at 8. A finding that either one of the two distinct
`
`methods would have been obvious is all that is required. See id. at 8-10.
`
`As explained in the Reply, claims 104 and 105 are drafted in precisely the
`
`same manner as those at issue in Schulhauser. Reply at 20-23. Each is a method
`
`claim that requires performance of one of two compression steps—to the exclusion
`
`of the other—depending on whether a prerequisite condition is satisfied, e.g., “a data
`
`type of the data block is identified” (claim 104). Ex. 1001 at 2:41-43. Thus, under
`
`Schulhauser, the prior art asserted by Petitioner needs to satisfy only one of the two
`
`conditional steps to render the claim anticipated or obvious.
`
`1
`
`
`
`II.
`
`PETITIONER’S REPLY ARGUMENTS WERE PROPER
`A.
`The Full Factual Basis of Petitioner’s Prima Facie Case Was Set
`Forth in its Petition
`Whether the Board applies Schulhauser or not, Petitioner presented a prima
`
`facie case of obviousness for claims 104 and 105 in their Petition. Specifically,
`
`Petitioner showed that a POSA would find it obvious to modify Franaszek with the
`
`teachings of Hsu, resulting in a system that performed both compression steps. See
`
`Pet. at 20-31 and 39-43.
`
`Petitioners’ Reply Arguments Respond to the PO Response
`B.
`Petitioner’s reliance on Schulhauser responded directly “to arguments raised
`
`in the corresponding … patent owner response.” 37 C.F.R. § 42.23(b). In its
`
`Response, however, Patent Owner (“PO”) asserted that if Franaszek and Hsu were
`
`combined, “the combined system” would result in a system where “limitation [c]”
`
`of claim 104 and “limitation [d2]” of claim 105 would not be performed.2 POR at 1-
`
`2. Petitioner responded in their Reply that PO’s key basis for disputing the
`
`obviousness of the claims was legally irrelevant under Schulhauser. Petitioner’s
`
`argument was in direct response to PO’s legally-flawed argument, and thus
`
`2 PO does not dispute that the Petitioners’s prior art combination discloses at least
`
`performing the “content dependent compression” conditional limitation of claim 104
`
`and the corresponding limitation of claim 105. See Reply at 22-23.
`
`2
`
`
`
`permissible under 37 C.F.R. § 42.23(b). Petitioner’s argument should be considered
`
`by the Board. See 5 U.S.C. § 556(d) (requiring orders to be issued “on consideration
`
`of the whole record” after a party “present[s] his case” and “submit[s] rebuttal
`
`evidence”); see also EmeraChem Holdings, LLC v. Volkswagen Group of Am., 859
`
`F.3d 1341, 1348 (Fed. Cir. 2017) (applying 5 U.S.C. §§ 554(b)-(c) & 556(d) in IPR);
`
`cf. Netword, LLC v. Centraal Corp., 242 F.3d 1347, 1356 (Fed. Cir. 2001)
`
`(“fundamental fairness requires” response to arguments raised in responsive brief).
`
`PO Has Had Notice and a Fair Opportunity to Respond
`C.
`Application of Schulhauser is a legal issue. PO discussed it in its
`
`demonstratives and during the oral hearing. It is now the subject of this briefing—
`
`an opportunity given to both parties. PO has been given “notice of and a fair
`
`opportunity to meet the grounds of rejection.” Belden Inc. v. Berk-Tek LLC, 805 F.3d
`
`1064, 1080 (Fed. Cir. 2015); see also Skky, Inc. v. MindGeek, s.a.r.l., 859 F.3d 1014,
`
`1023 (Fed. Cir. 2017) (reply responding to the Board and PO’s positions was not
`
`improper, particularly when PO permitted responsive brief). Indeed, if PO thought
`
`it was prejudiced, PO should have raised the matter promptly after Petitioner’s Reply
`
`was filed. See 37 C.F.R. § 42.25(b).
`
`III.
`
`SCHULHAUSER IS SOUND AND BINDING AUTHORITY
`A.
`The Board’s SOPs Require the Board to Apply Schulhauser
`Even if Petitioner had not cited to Schulhauser, the Board should still follow
`
`its binding precedents. See Reactive Surfaces LTD., LLP, v. Toyota Motor Corp.,
`
`3
`
`
`
`IPR2016-01914, Paper 60 (PTAB Jan. 12, 2018) (sua sponte post-hearing order
`
`indicating “controlling precedent requires us to interpret claims reciting conditional
`
`method steps [in accordance with Schulhauser]”). Schulhauser is precedential. It is
`
`thus “binding authority” under the Board’s Standard Operating Procedures
`
`(“SOPs”). PTAB SOP No. 2 Rev. 9 at 3 (Sept. 22, 2014). By designating
`
`Schulhauser precedential, the PTO used adjudication to set the direction of the
`
`agency. See Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292, 1307 (Fed. Cir.
`
`2015) overruled on other grounds by Aqua Prods., Inc. v. Matal, 879 F.3d 1290
`
`(Fed. Cir. 2017) (en banc). The public, including Petitioner, should be able to rely
`
`on the PTO’s “precedential” designations regarding the law applicable to a
`
`proceeding before the Office.
`
`Schulhauser Was Correctly Decided
`B.
`Schulhauser accords with Federal Circuit decisions and administrative
`
`guidance. A claim to a process “consists of a series of acts or steps,” and “consist[s]
`
`of doing something.” In re Kollar, 286 F.3d 1326, 1332 (Fed. Cir. 2002). A method
`
`may be claimed such that in carrying out the claimed steps, a “condition” causes one
`
`step to be performed instead of another. For example, a claim may recite “if A, do
`
`step B,” but “if not A, do step C.” A claim written in such a form cannot require the
`
`performance of step B and step C because at any one instant, “A” and “not A” cannot
`
`co-exist. Thus, “if the condition for performing a contingent step is not satisfied, the
`
`4
`
`
`
`performance recited by the step need not be carried out in order for the claimed
`
`method to be performed.” Cybersettle, Inc. v. Nat’l Arbitration Forum, Inc., 243 F.
`
`App’x 603, 607 (Fed. Cir. 2007).3 In other contexts, the Federal Circuit has
`
`repeatedly held that all the words in a patent claim are not always required, as
`
`exemplified by Markush claims, non-limiting claim preambles, claims written in
`
`permissive format, and claims reciting intended uses. See, e.g., Fresenius USA, Inc.
`
`v. Baxter Int’l, Inc., 582 F.3d 1288, 1298 (Fed. Cir. 2009); In re Johnston, 435 F.3d
`
`1381, 1384 (Fed. Cir. 2006). Method claims written in conditional format also have
`
`optional features and should be treated no differently.
`
`Board decisions are in accord with Schulhauser. See, e.g., Ex parte Urbanet,
`
`Appeal 2011-002606, 2012 WL 4460637 (PTAB Sept. 19, 2012); Samsung Elecs.
`
`Co., Ltd. v. Infobridge Pte. Ltd., IPR2017-00100, 2017 WL 1534929, at *12 (Apr.
`
`26, 2017). As is the M.P.E.P. See MPEP § 2111.04 (II) (citing Schulhauser).
`
`IV. CONCLUSION
`Petitioner respectfully submits that the application of Schulhauser is
`
`appropriate and that, in any event, each challenged claim is invalid as obvious.
`
`3 Claim interpretation for infringement is the same as validity. See Scripps Clinic
`
`& Research Found. v. Genentech, Inc., 927 F.2d 1565, 1583 (Fed. Cir. 1991).
`
`5
`
`
`
`Dated: March 5, 2018
`
`Respectfully submitted,
`
`/Eliot D. Williams/
`Eliot D. Williams (Reg. No. 50,822)
`BAKER BOTTS L.L.P.
`1001 Page Mill Road, Bld. 1, Suite 200
`Palo Alto, California 94304-1007
`650.739.7510
`
`Lead Counsel for Petitioner Teradata
`Operations, Inc.
`
`6
`
`
`
`§ 42.6(e)—CERTIFICATE OF SERVICE
`
`Pursuant to 37 C.F.R. §§ 42.6(e) and 42.105(a), this is to certify that on March
`
`5, 2018, I caused to be served a true and correct copy of the foregoing
`
`“PETITIONER’S BRIEF PURSUANT TO THE FEBRUARY 23rd ORDER” was
`
`served by electronic mail upon the following counsel for Patent Owner:
`
`Lead Counsel
`
`William P. Rothwell - william@noroozipc.com
`
`Back-up Counsel
`
`Kayvan Noroozi - kayvan@noroozipc.com
`
`Dated: March 5, 2018
`
`Respectfully submitted,
`
`/Eliot D. Williams/
`Eliot D. Williams (Reg. No. 50,822)
`BAKER BOTTS L.L.P.
`1001 Page Mill Road, Bld. 1, Suite 200
`Palo Alto, California 94304-1007
`650.739.7510
`
`Lead Counsel for Petitioner Teradata
`Operations, Inc.
`
`1
`
`
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