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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`WEATHERFORD INTERNATIONAL, LLC, WEATHERFORD/LAMB, INC.,
`WEATHERFORD US, LP, and WEATHERFORD ARTIFICIAL LIFT SYSTEMS,
`LLC,
`Petitioners,
`
`v.
`
`PACKERS PLUS ENERGY SERVICES, INC.,
`Patent Owner.
`____________
`
`Case IPR2017-01232 (Patent 9,303,501 B2)
`Case IPR2017-01236 (Patent 9,303,501 B2)1
`____________
`
`Record of Oral Hearing
`Held: June 26, 2018
`____________
`
`
`
`
`Before SCOTT A. DANIELS, NEIL T. POWELL, and
`CARL M. DEFRANCO, Administrative Patent Judges.
`
`
`
`
`

`

`Case IPR2017-01232 (Patent 9,303,501 B2)
`Case IPR2017-01236 (Patent 9,303,501 B2)
`
`
`
`APPEARANCES:
`
`ON BEHALF OF THE PETITIONER:
`
`
`DOUGLAS R. WILSON, ESQUIRE
`Heim, Payne & Chorush, LLP
`6710 Chase Tower, 600 Travis
`Houston, Texas 77002
`
`and
`
`JASON M. SHAPIRO, ESQUIRE
`Edell, Shapiro & Finnan, LLC
`9801 Washingtonian Boulevard, Suite 750
`Gaithersburg, Maryland 20878
`
`
`ON BEHALF OF THE PATENT OWNER:
`
`
`GREGORY GONSALVES, ESQUIRE
`Gonsalves Law Firm
`2216 Beacon Lane
`Falls Church, Virginia 22043
`
`
`
`
`The above-entitled matter came on for hearing on Tuesday, June 26,
`
`2018, commencing at 1:30 p.m., at the U.S. Patent and Trademark Office,
`600 Dulany Street, Alexandria, Virginia.
`
`
`
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`2
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`Case IPR2017-01232 (Patent 9,303,501 B2)
`Case IPR2017-01236 (Patent 9,303,501 B2)
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`
`P R O C E E D I N G S
`- - - - -
`JUDGE POWELL: Good afternoon. This is the hearing for two
`cases, IPR2017-01232 and IPR2017-01236, each of which involves U.S.
`patent number 9,303,501 B2.
`Joining us remotely, we have Judges Daniels and DeFranco.
`Starting with petitioner, can we get counsel to state their names for the
`record.
`
`MR. SHAPIRO: Your Honors, I'm Jason Shapiro with the law
`firm Edell, Shapiro & Finnan, lead counsel for petitioner, Weatherford.
`With me today is Doug Wilson with the law firm of Heim, Payne &
`Chorush. And Mr. Wilson will be arguing for petitioner today. Also with us
`is Mr. David Morris, who is in-house counsel with Weatherford.
`JUDGE POWELL: Thank you. And patent owner?
`MR. GONSALVES: My name is Dr. Greg Gonsalves. I'll be
`representing patent owner. And with me here is Mr. Nemunaitis.
`JUDGE POWELL: Thank you. All right, let me address some
`logistics here. First, there are some concerns on the record about certain
`things being introduced newly at certain points in the procedure and may be
`procedurally improper. We are going to discuss some of that here in a bit.
`For today, though, with respect to what substantive materials we can discuss,
`we don't plan to preclude any discussion of anything that you have in your
`demonstratives or that is in the record so far. And we will be careful when
`we prepare a final decision not to rely on anything that was improperly
`added.
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`Case IPR2017-01232 (Patent 9,303,501 B2)
`Case IPR2017-01236 (Patent 9,303,501 B2)
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`
`The total argument time allotted to each party is going to be
`60 minutes. As I mentioned, we have a matter here where a sur-reply was
`authorized in both cases for the patent owner to address some issues that
`were -- that the patent owner objected to as potentially newly introduced
`with petitioner's replies. In connection with that, patent owner also
`requested authorization to reserve time, 15 minutes, to speak after the
`petitioner's rebuttal regarding any of the subject matter that was a concern as
`potentially newly introduced with the reply. So we have the potential for a
`little bit more back and forth today than in a typical case, as we've
`authorized patent owner to reserve that time.
`Anyway, so the order of things will be the petitioner will present
`its case in chief first. The patent owner will do a response. The petitioner
`will do its rebuttal. If patent owner has reserved some time to address the
`allegedly new arguments, then the patent owner may use its time after the
`petitioner's rebuttal. And if that happens, then the petitioner may use any
`time it has remaining up to 15 minutes to respond to that.
`With all of that said, I suppose I will be curious to know to some
`degree, not that it matters that much -- the parties can use their time as they
`choose. I'll be curious to know if the petitioner wants to reserve time for its
`case in chief, but I imagine the petitioner may be interested in knowing, first
`of all, whether the patent owner intends to exercise its option to use the 15
`to -- to reserve 15 minutes for discussion after petitioner's rebuttal.
`MR. GONSALVES: Yes, Your Honor, we plan on using that
`additional 15 minutes to address the new arguments that were raised in the
`reply.
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`Case IPR2017-01232 (Patent 9,303,501 B2)
`Case IPR2017-01236 (Patent 9,303,501 B2)
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`
`JUDGE POWELL: Okay. With that, then, again, it's up to you,
`but petitioner, when you stand up for your case in chief, do you want to
`reserve some time?
`MR. WILSON: Your Honor, I think what we would like to do is
`reserve -- at the beginning reserve five minutes, and then I suspect we'll have
`substantially more time than that available when we get to that point in the
`argument. But at least five minutes.
`JUDGE POWELL: Okay. Well, thank you for your patience
`through that very long wind-up. With that, I think we are ready to go, but let
`me check to make sure nobody has any questions.
`MR. GONSALVES: No question, Your Honor. Thank you.
`JUDGE POWELL: Petitioner, you may begin.
`MR. WILSON: Thank you, Your Honors. Douglas Wilson for the
`petitioners, Weatherford Entities. And let me just start by jumping right into
`slide 2. And I want to start by backing up to the prior IPR that we argued
`just a few months ago, IPR2016-01509, which involved U.S. patent number
`7,861,774. That IPR involved a challenge to claims 1, 3 through 7, 9, 10, 12
`and 16 of the '774 patent. Claim 1 is shown here on the screen. Let me
`point out that claim 1 recites a method for fracturing a
`hydrocarbon-containing formation accessible through a wellbore, the
`method comprising a series of method steps running a tubing string into an
`open hole, expanding radially outward the first, second and third solid body
`packers, conveying a fluid conveyed sealing device through the tubing
`string, pumping fracturing fluid to fracture the hydrocarbon-containing
`formation.
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`Case IPR2017-01232 (Patent 9,303,501 B2)
`Case IPR2017-01236 (Patent 9,303,501 B2)
`
`
`And so now looking at slide 3, we come to the present two IPRs
`that involve the '501 patent, U.S. patent 9,303,501, and a challenge to claims
`1 through 9 of the '501 patent. The '774 claim 1 limitations that we just
`discussed are all included in '501 claim 1, the only independent claim in the
`'501 patent. However, as Your Honors heard this morning, and I won't
`belabor these points, there are a couple of limitations added to '501, claim 1,
`all of which relate to a hydraulically-actuated sliding sleeve and the
`additional method limitation of applying a first pressure within the tubing
`string inner bore such that the hydraulically-actuated sliding sleeve moves
`from the closed port position to the open port position. And that becomes
`important when we get to the evidence of copying.
`So let me start with IPR2017-1232, which is the Yost as a primary
`reference ground. The issue in this case is essentially the same issue as was
`involved in the '774 IPR with the addition of the hydraulically-actuated
`sleeve limitations, and therefore, the Halliburton reference was added to that
`combination of references.
`With respect to IPR2017-1236, the Thomson reference is the
`primary reference there. We again added the Halliburton reference to show
`that the hydraulically-actuated sliding sleeve limitation was also taught in
`the art and would have been obvious to combine. So you have a Thomson
`plus Ellsworth plus Halliburton combination.
`Back to the IPR '774 final written decision, it involved two
`grounds, as you can see here on the top of slide 6, first the Yost plus
`Thomson plus Ellsworth ground and secondly the Thomson plus Ellsworth
`ground. Both of those grounds were resolved by the Board against patent
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`Case IPR2017-01232 (Patent 9,303,501 B2)
`Case IPR2017-01236 (Patent 9,303,501 B2)
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`owner. And you can see that the Board has ordered that the challenged
`claims have been shown to be unpatentable on both grounds.
`Now, the impact of that decision is that patent owner is collaterally
`estopped from asserting that the subject matter that was shown to be
`unpatentable in the prior IPR, the '774 IPR is patentable here. The
`MaxLinear case, a recent decision in the Federal Circuit says we note that
`the collateral estoppel effect of an administrative decision of unpatentability
`generally requires the invalidation of related claims that present identical
`issues of patentability.
`I think Your Honors are very familiar with the fact that there is an
`identical issue of patentability presented in the current two IPRs, but you
`don't have to take my word for it. Patent owner themselves have said that.
`Turning to slide 8, we see the patent owner response in the '774 IPR, they
`identified the key issue as whether it was obvious to use solid body packers
`in combination with ball-activated sleeves to perform the patented method of
`open hole multistage fracturing.
`What do they say in the current two IPRs? This is their
`identification of the key issue in the present two IPRs in slide 9. It says,
`Whether it was obvious to remove casing, cement and perforating from the
`conventional practice and then use solid body packers in combination with
`ball-activated sleeves to perform the patented method of open hole
`multi-stage fracturing. The underlying portion is the only difference. And
`as you'll see, removing casing, cement and perforating is part of open hole
`multi-stage fracturing. So the entirety of the issue is exactly what was
`resolved in the '774 case.
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`Case IPR2017-01232 (Patent 9,303,501 B2)
`Case IPR2017-01236 (Patent 9,303,501 B2)
`
`
`And just to put a finer point on it, if we look at slide 10, you can
`see the final written decision from the '774 IPR where the Board held we
`find evidence that one of ordinary skill in the art would have known about
`both multi-stage open hole completions as well as cemented casing
`completions. And while cemented casings appear arguably to be
`conventional, we are not persuaded that one of ordinary skill in the art would
`have understood that horizontal wellbore multi-stage fracturing required
`cemented casing completion.
`This resolves the primary issue that is before the Board today in
`these two IPRs. And moreover, patent owner is bound by it. They are not
`entitled to come in here and argue something differently.
`So we take a look at slide 11, and as Your Honor alluded to earlier,
`patent owner actually requested additional briefing from the Board to
`address what they considered to be new reply evidence. They could have
`asked for a briefing on collateral estoppel. They chose not to. I suspect if
`they did, the Board would have given it to them. But they didn't ask for it.
`They have therefore, waived the right to brief it. Nevertheless, you find
`briefing on in their sur-reply. But this is the entirety of their sur-reply
`briefing on this issue: Collateral estoppel does not bar consideration of the
`grounds in this proceeding as all of the claims and all of the asserted grounds
`are different from those at issue in the U.S. patent number 7,861,774
`proceedings.
`That is simply not the law. As MaxLinear said and as several
`cases from the Federal Circuit have said, it doesn't require identity of claims.
`It doesn't require identity of art as long as the issue is identical. Patent
`owner articulated the issue precisely the same way in this case as they did in
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`Case IPR2017-01232 (Patent 9,303,501 B2)
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`the prior IPR. The issue is the same. Patent owner is foreclosed from
`arguing that open hole multi-stage fracturing using solid body packers and
`ball-drop sliding sleeves is a patentable invention. They can't do it.
`On top of that, when we filed our reply brief, we knew that
`collateral estoppel applied. We did not know the position patent owner
`would take on it. Now that they are here arguing this point, I have to point
`out that the Board adopted its own rule on collateral estoppel. 37 CFR
`42.17(d)(3) precludes patent owner from taking any -- let me quote: From
`taking any action inconsistent with the adverse judgment that they received,
`including, by the way, obtaining a patent with a claim that is not patentably
`distinct from the claims that were invalidated. That is precisely what they
`are doing here today in violation of the Board's rule.
`So with that issue out of the way, let me address the new
`limitations that are at issue, the hydraulically-actuated sliding sleeve. In
`slide 12, we see here the Halliburton reference. The Halliburton reference
`discloses a pump open plug. Now, petitioner has put in evidence through its
`expert that the Halliburton reference discloses a hydraulically-actuated
`sliding sleeve as is recited in the claims. That's what's shown here, the
`Halliburton pump open plug. There is no dispute about that. I'm not aware
`of anyone saying that's not a hydraulically-actuated sliding sleeve. So I
`understand there's an issue about whether or not they believe Halliburton
`was shown to be a publication, which I'll get to. But whether this discloses a
`hydraulically-actuated sliding sleeve is not a disputed issue.
`Now, turning to slide 13, we see Dr. Rao's declaration that
`petitioner submitted. And he opined it was also known to combine
`hydraulically-actuated sliding sleeves, i.e., pump open plugs, with
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`Case IPR2017-01232 (Patent 9,303,501 B2)
`Case IPR2017-01236 (Patent 9,303,501 B2)
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`ball-actuated sliding sleeves to stimulate a formation. Now, before this in
`paragraph 44 of Dr. Rao's declaration he actually cites the 1992 Department
`of Energy report which I'm going to refer to as Overbey. It's Exhibit 1034.
`You can see it referenced on the bottom of the slide there, 13.
`Now, what that reference discloses, as the Board will remember,
`Overbey discusses a follow-on well to Yost. So Yost worked for the
`Department of Energy. Overbey worked for the Department of Energy, in
`fact, participated with Yost in the first well. Overbey does the second well.
`This is the Hardy HW No. 1 well. And he says because Yost was so
`successful, we are going to use this again, but what we would like to do is
`actually use what he refers to as a bullhead port collar, a
`hydraulically-actuated sliding sleeve in the bottom stage and a ball-actuated
`sliding sleeve above that so we don't have to have tubing intervention for the
`first two stages.
`Dr. Rao says this shows it was known in the art to use a
`hydraulically-actuated sliding sleeve in open hole multi-stage fracturing.
`There's no dispute about this. Mr. McGowen, you heard this morning, and
`the same is true in our IPR, Mr. McGowen has not offered any opinions on
`this. Dr. Rao's opinion is the only evidence in the record, and it is backed up
`by Overbey, which no one disputes Dr. Rao's interpretation of Overbey. It is
`undisputed that hydraulically-actuated sliding sleeve used at the end for
`open hole multi-stage fracturing is disclosed in the art.
`On top of that, Overbey actually discloses why you use it. You
`need to pressure up the tubing string to set the packers and then you need it
`to shear out and open up so that you can fracture it through the toe. So all of
`this is disclosed. There's no dispute in this record about that disclosure.
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`Case IPR2017-01232 (Patent 9,303,501 B2)
`Case IPR2017-01236 (Patent 9,303,501 B2)
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`
`So that brings us to our last issue -- well, let me back up for a
`second. Slide 14, the Board -- let me throw in there that the Board
`mentioned in its '774 IPR final written decision we are apprised of
`persuasive evidence that motivations to complete open hole wells existed
`and that combining the tools and techniques disclosed in the prior art was
`not difficult and was within the level of ordinary skill in the art. And the
`same is true. The Board is dealing with the same record in this proceeding
`that it was dealing with in the '774 IPR.
`Now, moving to slide 15, the evidence here from the Barr
`declaration is presented in slide 15. She opines -- sorry, she testifies the
`1997 catalog that is the Halliburton reference was available to any customer
`or potential customer as well as others seeking a copy in 1997. Halliburton,
`as a regular practice and in the normal course of its business, prints these
`types of product catalogs every few years, including the 1997 catalog, and
`disseminates them to customers and/or potential customers from the year
`they are printed until the next edition is printed.
`Now, she goes on to address additional ways in which that
`publication was distributed. And I understand the Board is somewhat
`concerned with this issue based on the questions that were raised this
`morning. So let me address, if I may, a few of the questions that were raised
`this morning. First of all, there was a question of I understand that
`Ms. Barr's declaration might -- and let me preface this by saying I'm not sure
`that our Barr declaration is exactly the same as the one that was presented
`this morning, but it sounds the same. But there was a question raised about
`whether or not that's sufficient, you know, the availability is sufficient to
`show a printed publication.
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`Case IPR2017-01232 (Patent 9,303,501 B2)
`Case IPR2017-01236 (Patent 9,303,501 B2)
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`
`So I'm going to read to the Board from a case, Constant versus
`Advanced Micro Devices. It's 848 F.2d 1560, a 1988 Federal Circuit
`opinion. And the Court there says, Accessibility goes to the issue of whether
`interested members of the relevant public could obtain the information if
`they wanted to. If accessibility is proved, there is no requirement to show
`that particular members of the public actually received the information.
`We do not bear the burden of showing that any customer actually
`came and picked up a copy. I think this declaration establishes that, but we
`don't bear that burden anyway. It's not required to show a printed
`publication. Accessibility is the issue. Not that it was actually distributed.
`And I think the evidence is unrefuted on this point. They had the
`opportunity to depose Ms. Barr. They chose not to. Her testimony is the
`only evidence in this record on this point.
`Now, I also want to -- I understand that given that this is one of the
`few issues to be resolved by this IPR that patent owner intends to present a
`fairly robust challenge to the printed publication requirement. So I want to
`preempt that if I can and point out Orion IP versus Hyundai Motor America,
`the Federal Circuit case we cited, holds that an electronic parts catalog is a
`printed publication.
`But let me take it a step further and point out that the case that
`patent owner cited this morning, In Re Bayer, 568 F.2d 1357, goes into a
`whole lot more detail about this issue. They cited it for the proposition that
`Halliburton was not a printed publication because the particular publication
`at issue in In Re Bayer, the one on which they decided, was a graduate thesis
`presented to three members of a graduate faculty and stuck in a library and
`not indexed or anything. But let me recite to the Board some of the case law
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`Case IPR2017-01232 (Patent 9,303,501 B2)
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`that they worked their way through in getting to that decision. And in
`particular, they were trying to address the point of whether or not it was
`required that a publication be accessible to every member of the public in
`order for it to be a printed publication. They concluded that it wasn't, but
`let's walk through the case law that they addressed getting there.
`First, starting with Imperial Glass Company, and I'm reciting from
`pages 1360 to 61 of the CCPA opinion. The first citing Imperial Glass
`Company versus AH Heisey & Company, which is a Sixth Circuit opinion,
`the Court said, and this is the CCPA, the trial court refused to consider the
`catalogs, and those are the glass manufacturer's catalogs at issue in that case,
`thinking that they were not publications within the meaning of the statute
`because they were not found in a library. The appellate court held that to be
`error reasoning that manufacturer's catalogs so circulated are more effective
`in spreading information among persons skilled in that art than if the same
`catalogs were only on file in some public library.
`Now, that's a case that is quoted in the case they cited to the Board.
`But the CCPA goes on quoting additionally from Jochmus versus Leviton, a
`Second Circuit opinion, following on the Sixth Circuit opinion they just
`talked about, the CCPA observed that the Second Circuit was in accord with
`the Sixth Circuit and then quoted the Second Circuit opinion. Here's what
`the Second Circuit had to say on this issue: While it is true that the phrase
`"printed publication" presupposes enough currency to make the work part of
`the possessions of the art, it demands no more. A single copy in a library,
`though more permanent, is far less fitted to inform the craft than a catalog
`freely circulated however ephemeral its existence. For the catalog goes
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`Case IPR2017-01232 (Patent 9,303,501 B2)
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`direct to those whose interests make them likely to observe and remember
`whatever it may contain that is new and useful.
`Therefore, the CCPA went on to conclude: From the foregoing
`authorities, we think it apparent that a printed document may qualify as a
`publication under 102(b) notwithstanding that accessibility thereto is
`restricted to a part of the public so long as accessibility is sufficient to raise a
`presumption that the public concerned with the art would know of the
`invention.
`I think that establishes conclusively that the Halliburton catalog is
`a printed publication based on the record before the Board today, the
`undisputed record, factual record.
`Now, I can and am prepared to, if the Board is interested in hearing
`it, go back into the substantive grounds that were addressed in the '774
`opinion. I would prefer not to. I believe it is not legally relevant. And
`patent owner is not entitled to challenge the decision there again. I believe
`they are not entitled to argue that these claims are patentable because they
`recite open hole multi-stage fracturing with solid body packers and a
`ball-actuated sliding sleeve. But I am happy to, if the Board has any
`remaining questions about the substance of those grounds.
`JUDGE POWELL: I don't have any questions personally. The
`only thing I would say is that I don't believe we are going to rule on the issue
`of collateral estoppel today. So that leaves you with the choice of whether to
`discuss the matter of your own volition.
`MR. WILSON: I understand that, Your Honor. I'm prepared to sit
`down and wait to see whether they address any of those issues. So I'll
`reserve the rest of my times.
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`Case IPR2017-01232 (Patent 9,303,501 B2)
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`JUDGE DEFRANCO: Let me ask, counsel, this is Judge
`DeFranco, has there been a notice of appeal filed in that other case?
`MR. WILSON: There has been; that's correct.
`JUDGE DEFRANCO: So don't you think it behoves patent owner
`to make these arguments in order to preserve them?
`MR. WILSON: I actually think they are precluded from doing
`that. Collateral estoppel does not require a decision that has been affirmed
`on appeal.
`JUDGE DEFRANCO: But if they did not make those arguments
`in their patent owner response, then they wouldn't be able to ever make
`them. So they have to make them in their patent owner response in order to
`preserve them. I'm just not sure I agree with you that they are collaterally
`estopped right now from making them.
`MR. WILSON: So the point Your Honor is making is didn't they
`have to make those arguments in their patent owner response in order to
`preserve them for purposes of appeal. I actually think the answer to that is
`no. I actually think the Board -- let me back up for a second and put -- I'm
`speaking hypothetically.
`Put us in context of this case, their patent owner response was filed
`before the Board's final written decision in the '774 IPR. So, yes, they had to
`make them. Once that decision is issued, the Board's own rule actually
`prohibits them from acting in a manner that's inconsistent with that
`judgment. So I think not only shouldn't they, they actually couldn't. Had the
`'774 IPR final written decision issued before their patent owner response --
`JUDGE DEFRANCO: What do you propose they have done once
`we rendered that decision, that they drop the whole case?
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`Case IPR2017-01232 (Patent 9,303,501 B2)
`Case IPR2017-01236 (Patent 9,303,501 B2)
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`MR. WILSON: No. Well, to the extent that they hinge
`patentability on this issue, yes, I think they should concede that the claims
`are unpatentable in view of the Board's final written decision in the prior
`IPR. In other words, these claims --
`JUDGE DEFRANCO: Even though they filed notice of the appeal
`and the Federal Circuit hasn't come down to tell us whether we are right or
`wrong. What if the Federal Circuit says we are wrong?
`MR. WILSON: Then it comes back.
`JUDGE DEFRANCO: But if they hadn't made the argument, then
`they wouldn't be able to make them again.
`MR. WILSON: But it's easy. We do this all the time in District
`Court litigation. You stipulate to a set of facts based on a particular outcome
`of a ruling and you say, well, if that's the appropriate claim construction,
`then they don't infringe. However, if it's turns out that's wrong, we'll come
`back. And this happens all the time.
`JUDGE DEFRANCO: But that's usually through a stipulation. It's
`not necessarily through collateral estoppel. I think that's what you are
`arguing, right?
`MR. WILSON: It can happen either way. In other words, the
`point it I'm legally bound by this claim construction ruling. Yeah, I could go
`to trial and contend that a different claim construction should apply, but I'm
`going to lose on that point and the judge is going to forbid me from doing it,
`properly so. So what happens is I just stipulate if that's the appropriate
`construction, there is no infringement, and we go up to the Federal Circuit.
`This happens all the time. And I think that's what happens in this context.
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`Case IPR2017-01232 (Patent 9,303,501 B2)
`Case IPR2017-01236 (Patent 9,303,501 B2)
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`They stipulate to the extent the Federal Circuit affirms the '774 final written
`decision, this case is over.
`JUDGE DEFRANCO: Are you familiar with that ever happening
`in our proceedings?
`MR. WILSON: Not in IPR, no.
`JUDGE DEFRANCO: I think we are different than District Court.
`MR. WILSON: In this respect, I respectfully, disagree. Like I
`said, the Board has passed its own rule precisely on this issue. I'm sorry,
`maybe it's the Patent and Trademark Office who promulgated that rule, but
`it's 37 CFR 42.73(d)(3). I mean, it's right there in the rules.
`JUDGE POWELL: It sounds like potentially a thorny issue. For
`today, I guess we'll just discuss it. Whatever the patent owner wants to do,
`to the extent that we caused any extra work for petitioner on the matter, we
`apologize for that, I suppose.
`MR. WILSON: No problem. Thank you.
`JUDGE DEFRANCO: I'm trying to look at this Rule 42.73(d)(3).
`It says a patent applicant or owner is precluded from taking action
`inconsistent with the adverse judgment including obtaining in any patent a
`claim that is not patentably distinct or from a finally refused or cancelled
`claim.
`
`So from taking any action that is inconsistent, so what action have
`they taken that's inconsistent? They already had the patent. And this is
`saying they can't obtain a claim. They already had the claim, so they can't
`go back in time.
`MR. WILSON: I don't read the options there as exhaustive, and
`I'm not sure they are intended to be exhaustive.
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`Case IPR2017-01232 (Patent 9,303,501 B2)
`Case IPR2017-01236 (Patent 9,303,501 B2)
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`JUDGE DEFRANCO: But I think you have to read it in the spirit
`of the rule.
`MR. WILSON: Right. What it's saying is, for example, in the
`precise example they gave, if they were to show up in the Patent and
`Trademark Office and file, for example, a continuation application in which
`they sought claims that were patentably indistinct, the Board would say they
`have plainly violated that rule. I think the purpose of the rule is literally
`collateral estoppel. It's to encode or enshrine the concept of collateral
`estoppel in practice at the PTO. When they come in to this proceeding and
`say it's patentable to do multi-stage open hole fracturing using solid body
`packers and ball-actuated sliding sleeves, I'm saying that is acting
`inconsistent with the Board's adverse judgment. And I think that's entirely
`within the scope of that rule.
`But even if it's not, the Federal Circuit precedent on this point is
`plain. I mean, even if it's not, they are barred under Federal Circuit
`precedent from coming in and trying to get a contrary decision. I think the
`Board itself has to act consistently with its prior decisions.
`JUDGE DEFRANCO: I think that decision, I'm not totally
`familiar with the certain decision you are speaking of because I haven't read
`the case, but it seems like they are talking about at the appellate level.
`MR. WILSON: So let me just run through a few facts. So what
`happened in the MaxLinear case is there were three IPRs, let's say, going.
`The independent claims were challenged in a couple of different IPRs, and
`then there was a third IPR proceeding that involved a challenge to the
`independent claims as well as the dependent claims. What happens is the
`first two cases go up on appeal first. In the first two cases the Board said
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`Case IPR2017-01232 (Patent 9,303,501 B2)
`Case IPR2017-01236 (Patent 9,303,501 B2)
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`those claims are unpatentable. The independent claims, there were three
`independent claims. Two of them were invalidated in one proceeding. A
`third one was invalidated in the second proceeding. I apologize for the
`complexity of the facts, but they are what they are.
`In the third IPR, the Board said the claims have not been shown to
`be unpatentable. In the meantime, these first two IPRs went up to the
`Federal Circuit. The Federal Circuit said, yep, we affirm those claims are
`invalid.
`
`Now, the Boa