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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`
`DAIMLER NORTH AMERICA CORPORATION,
`MERCEDES-BENZ USA, LLC, and MERCEDES-BENZ U.S.
`INTERNATIONAL, INC.,
`Petitioners,
`
`v.
`
`STRAGENT, LLC,
`Patent Owner.
`____________
`
`Case IPR2017-01502 (Patent 8,209,705 B2)
`Case IPR2017-01503 (Patent 8,566,843 B2)
`Case IPR2017-01504 (Patent 8,566,843 B2)
`____________
`
`Record of Oral Hearing
`Held: September 11, 2018
`
`
`
`
`Before LYNNE E. PETTIGREW, PATRICK M. BOUCHER, and
`CARL L. SILVERMAN, Administrative Patent Judges.
`
`
`
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`Case IPR2017-01502 (Patent 8,209,705 B2)
`Case IPR2017-01503 (Patent 8,566,843 B2)
`Case IPR2017-01504 (Patent 8,566,843 B2)
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`
`
`APPEARANCES:
`
`ON BEHALF OF THE PETITIONER:
`
`
`JAMES M. GLASS, ESQUIRE
`RICHARD LOWRY, ESQUIRE
`Quinn Emanuel Urquhart & Sullivan, LLP
`51 Madison Avenue
`22nd Floor
`New York, New York 10010
`
`
`ON BEHALF OF THE PATENT OWNER:
`
`
`THOMAS H. KRAMER, ESQUIRE
`GEORGE PAZUNIAK, ESQUIRE
`O'Kelly, Ernst & Joyce, LLC
`901 North Market Street
`Suite 1000
`Wilmington, Delaware 19801
`
`
`
`
`The above-entitled matter came on for hearing on Tuesday, September
`
`11, 2018, commencing at 1:00 p.m., at the U.S. Patent and Trademark
`Office, 600 Dulany Street, Alexandria, Virginia.
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`P R O C E E D I N G S
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`JUDGE PETTIGREW: This is a consolidated hearing for three
`cases, IPR2017-01502, 01503 and 01504, Daimler North America
`Corporation versus Stragent, LLC. Judge Boucher is joining us by video
`from our Denver office, and today Judge Silverman is joining us by video
`from our Silicon Valley office. Please speak into the microphone to ensure
`that they can hear your arguments. And also, since they won't have the
`benefit of visual cues in the hearing room here, please identify particular
`slide numbers as you move through your demonstratives. We remind the
`parties that the demonstratives are not evidence but instead are aids to assist
`the panel in understanding your arguments.
`Each side has 90 minutes to argue. As set forth in our hearing
`order, petitioner will begin by presenting its case regarding the challenged
`claims. Patent owner then will respond to petitioner's argument. And
`finally, petitioner may use any time it has reserved for rebuttal to respond to
`arguments the patent owner makes here today.
`Counsel, when you begin your argument, please identify yourself
`and your party for the record. And counsel for petitioner, please indicate
`how much time you would like to reserve for rebuttal. Petitioner, you may
`begin when ready.
`MR. GLASS: Thank you, Your Honor. James Glass for
`petitioner, Daimler. With me today is Richard Lowry. If I could, I would
`like to optimistically reserve 30 minutes for rebuttal.
`JUDGE PETTIGREW: We'll start you with 60.
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`MR. GLASS: I'm going to start on slide 3, Your Honors. We have
`been here before. I know you heard argument yesterday in the BMW cases
`on these patents. This is also the second time that we have been here on
`these patents. I don't think there's any real dispute over what the '843 and
`'705 patents disclose. This is a figure you have seen several times at this
`point in our briefs and PO's briefs.
`At a very high level, the '843 and '705 patents relate to basically a
`network bridge that allows information network packets from one network
`to be -- it's stripped of its header, it's stripped of its network information.
`The data is then stored in this bulletin board which is just simply a shared
`network resource, shared memory. And then to get the data to another
`network, the process simply happens in reverse. The data is picked up by
`one of the remote message processors encapsulated with network
`information and transmitted on the second or third network. And again, I
`don't think there's really any dispute between the parties as to that, at that
`level, what these patents disclose.
`I'm on slide 5, Your Honors. Briefly, we are here again. I
`mentioned we are here today -- this is the second batch of petitions we filed.
`The first batch of petitions, I'll refer to them, they were the 1457, 1458. We
`challenge all of the independent claims from both the '705 and '843 patents.
`Those claims were all found unpatentable by Your Honors. Today we are
`here for the remaining dependent claims, and I have listed them on slide 5.
`I'm not going to walk through them. But the thrust of the positions today are
`going to focus on the dependent claims.
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`I'm on slide 6. Just as a quick refresher, we have relied on the
`same art with a few petitions that we relied on in the 1457 and 1458.
`Miesterfeld is one of our primary references. And just like the '843 and '705
`patents, Miesterfeld discloses what I have highlighted in blue here, this blue
`SPI RAM. It's a shared resource, the shared RAM. There are two networks,
`the VDB and the ITS data bus. It was disputed in the 457/458 whether those
`are two networks. Your Honors found that they were two networks. Data is
`just like the '843 patent, stored in that SPI RAM, and that's shared memory,
`encapsulated and then transmitted to one of the other networks.
`I'm going to skip to slide 8. Posadas is our second primary
`reference. I'm actually going to slow down a little bit for this one because I
`think the arguments for the most part related to Posadas are identical to what
`was raised in 457 and 458. They are attached to different claim limitations,
`and I think there is a fundamental disconnect again here, as there was in 457,
`as to what Posadas discloses.
`Posadas relates to the author's work on YAIR. It's Yet Another
`Intelligent Robot. He used two different networks, a CAN network in the
`robot that's connected to the sensors connected through what he calls a
`gateway, the ISCCAN, that translates data from the CAN network to
`Ethernet packets.
`I'm going to skip to, just very briefly -- I should have had this on
`this slide, but I'm switching to slide 38. This is a figure I meant to put on
`this slide. But this is an annotated figure of Figure 4 from Posadas. And I'm
`going to preface this now, but I walked through this with their expert. I
`think this is absolutely supported by Posadas itself. The way Posadas works
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`is has this CAN object system which I have highlighted in green here. The
`network, the flow, the data flows from the CAN network to what they have
`labeled these as silos to the first SC silo in the blue shaded area. There are
`multiple silos. The one marked with a (1) is where all data from the CAN
`network is first received, and it's stored there in that blackboard. From there
`the data is then transmitted over, its encapsulated in an Ethernet packet and
`transmitted through Ethernet to the remaining silos in local partial
`replications of the blackboard.
`I'll get to this later, but I think it's worth prefacing this argument
`again. This is exactly what they argued in 457/458 that Posadas doesn't
`disclose a second network. In that case they focused on the processing step.
`Here they say there's no second network. They just ignore the fact that there
`is an Ethernet network here, and I think that's plainly by that figure
`incorrect.
`I'm going to step back now. I'm sorry to jump around, Your
`Honors. I'm back on slide 10. I'm going to walk through the remaining
`references very quickly. Stewart, Stewart we relied on for the
`memory-related limitations. Very basic memory allocation techniques
`checking to see if memory is available before you write to it, sending
`notifications. They have raised again exactly the same arguments here
`against Stewart as they did in 457/458. There's nothing new in connection
`with Stewart.
`Wense, Upender and Zhao are the last three references. We've
`relied on these for very specific limitations. There is no dispute over what
`these references disclose. There is a dispute over -- again, they raise the
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`same arguments as they did before that one of ordinary skill in the art would
`not have combined them. Wense discloses the use of a LIN network with a
`CAN network in an automotive environment. That's exactly what we used it
`for.
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`Upender is a new reference to these petitions. We relied on
`Upender in our ground 3 for a very specific purpose. I'll get to this later, but
`there is a dispute they have argued that claims 52 and 53 require that data on
`one side of the network be the same as or have the same format as an entire
`network frame on the first side of the network. We relied on Upender as an
`alternative to show that this is expressly disclosed. They have not disputed
`any of the disclosures we have relied on in Upender.
`And Zhao we relied on, there are claims that require a third
`network, and that's exactly what Zhao shows, and that's what we relied on it
`for.
`
`I'm going to move on, unless Your Honors have any questions, to
`claim construction. We exchanged slides last week. I thought there was a
`lot more disputes than apparently there are. So I'm going to walk through
`really only a few of these. Realtime, happily, both parties agree this time as
`to what it means. There are really three phrases that come up throughout.
`It's a thread that's throughout PO's response, sharing "the information" and
`the second network. And it's really -- they focused on these terms in these
`petitions. They didn't focus on them in the previous petitions, but it's the
`same argument that they raised in 457/458 that sharing requires completing
`the delivery, that there's no processing, that there's no second network in the
`prior art. And that's baked into their construction for these terms. So I'll
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`walk through those kind of together, and then I'll walk through diagnostic
`mode.
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`Just a few points. I mean, we did have a section in our briefs on
`their expert and whether his testimony should be accredited. I'm not going
`to walk through that, but there are some points that it was directly relevant to
`his claim construction. On sharing, their construction for sharing is that a
`computer system has to partake of an experience, occupy or enjoy with
`others. I thought that was very odd in the context of the '843 patent. I asked
`him, Where did you get that from? Well, he looked it up in a dictionary. I
`asked him to explain to me the process of how he construed. He started and
`stopped with the dictionary. I asked him why, why he did that. Well, he
`was under the impression that that was how he was supposed to opine. So at
`a first step he started with a dictionary because that's what he was told to do.
`He didn't go any further than that.
`Now, whether this notion -- I don't think I have to go through this
`too much. I don't think anyone in this room is going to argue that the
`computers, especially the computers in the '843 patent, experience anything.
`I asked him and I think this is just an example. Like I said, we cited a lot of
`testimony from him as to how far he would go to support a position that I
`don't think really is supportable. Are computers described as experiencing
`information? This was my question in context of the patents. I don't see
`why they couldn't be. I went on, I asked him, I think, if computers were
`sentient. And he went on and he said, well, the debate is -- there's still a
`debate about that.
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`So this was not just an example of them overreaching and perhaps
`using a construction that could be interpreted. This was something their
`expert truly believed in, that the computers in the '843 somehow experienced
`information.
`We'll set that aside. The point I raised earlier is that this is the
`same old argument that they raise in 457 and 458. I asked him why the
`difference, why did you use a different construction in 457 and 458. Is it the
`same notion? Does your construction here require sharing the information?
`Does it require completing delivery of information? That's what they argued
`in 457. He said yes.
`So the point is that they are using different words. He's using the
`word "experience", "partake of", "enjoy", but it's the same exact position as
`457/458, that sharing requires completing delivery. And that's their position
`on that term.
`I'm going to skip protocol. I really don't think there's much of an
`issue on that. On slide 21, I want to go through this briefly. I'm not quite
`sure if this is an issue. Again, they argue that there is no second network.
`They base that on the memory structure of Posadas and on Miesterfeld.
`They do argue that the second network must be the recipient of shared
`information. This is something they raised several times throughout their
`briefs.
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`And I think it's very important to look at what the claims actually
`say. Nowhere in the claims do they require that the second network receive
`anything. The claims are absolutely agnostic. Once the information is made
`available, the claims are agnostic as to what they are shared with. This is
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`51L. 51L simply says that the apparatus is operable such that information is
`capable of being shared, utilizing a second network protocol. It doesn't say
`shared with the second network. Just shared in a second network protocol.
`I'm not going to go through the entirety of the remaining
`limitations, but the 51M, N and O at the bottom of the slide on slide 21
`describes all the different parts of the second network. There is not one
`mention of receiving anything. So again, this is -- they are baking in this
`notion, whether it be into the notion of sharing the network or the second
`network. They are building in this notion the exact same thing they argued
`in 457 and 458 that sharing require -- that the claims require completing
`delivery.
`Diagnostic mode, I'm on slide 22, Your Honors. This is a new
`argument to this case. It goes to, I believe claim 18 of the '705 patent. Now,
`we've argued that diagnostic mode, we've done a proper claim construction
`analysis. We've started with the ordinary meaning for this term. The
`ordinary meaning, we say, is simply a mode designed to determine whether
`a computer system is functioning properly or to detect programming errors.
`We cited the same portion of the specification they did and we
`said, look, this supports our construction. So we used different words, but I
`think the notion that a diagnostic mode that allows inspection of the system
`while it's running, we used slightly different words. I don't think that's
`definitional, but I think it's the same idea that we are trying to get across that
`you just test the system.
`Now, they have looked at this section in '705 patent column 11:51
`through 67, and they have brought in a litany of other characteristics that are
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`required for a diagnostic mode. They say it has to be an alternative mode, it
`has to be distinct, it has to be permanent, it can't be temporary. That's all
`from their briefs. There is absolutely nothing in this section, I have searched
`the patent, the word "permanent" doesn't come up a single time. Temporary,
`not once is it mentioned throughout the patent. They say it has to be
`alternative or distinct. I guess they are building that into the notion of
`modes. They don't explain what they mean by alternative or distinct, and the
`patent, of course, doesn't say anything about those modes in any way being
`alternative or distinct.
`So I would agree that this language that I highlighted here, that it
`allows inspection of the system while it's running. I would agree that that is
`consistent with the construction we have raised. It is certainly not -- it
`certainly does not drag in the notion that it has to be alternative, distinct,
`permanent or not temporary.
`JUDGE PETTIGREW: Is that the only mention of diagnostic
`mode in the patent other than the claims?
`MR. GLASS: I believe there may be one other, Your Honor. I
`don't think either side relied on it. I don't think it discusses -- I don't think
`there's any real distinction in how it's discussed. But again, it's not a
`definitional -- to the extent it is discussed, it's never discussed in a
`definitional manner.
`JUDGE BOUCHER: I guess the part that I'm looking at, I'm
`looking at the '705 patent, column 10, where it's talking about Figure 17 and
`describing different modes, and it does refer to those modes as distinct
`modes. It doesn't actually refer to the diagnostic mode in that description,
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`but that does seem to provide at least some support that there is some
`distinction between the operational modes and the diagnostic mode.
`MR. GLASS: Your Honor, I do agree that that's -- I guess that's
`the reason why neither party really cited to it. It talks about different modes
`but again, not in the context of the diagnostic modes. But I think that brings
`up an important issue. And this is something that is endemic to their papers.
`They run to a portion of the specification, they cite to it and say this portion
`is definitional. But that's not how we do claim construction. We start with
`the ordinary meaning. We go to the spec to see if there's a reason to depart
`from that ordinary meaning. Was the patentee a lexicographer? Was there a
`waiver of claim scope? Was there an argument made during prosecution
`history? There is none of that here. They have cited to nothing. I would say
`simply because there is a discussion of distinct modes, our construction, of
`course, embraces that. But to limit the claims to that just because there's a
`discussion of it, I think, would be improper.
`Does that address your question, Your Honor?
`JUDGE BOUCHER: Yes, thank you.
`MR. GLASS: Now, I have been harping on this notion of ordinary
`meaning. There is no dispute here. You don't have to take our word for it.
`Their own expert agreed with me. I asked him during his deposition would
`it be reasonable to say that a diagnostic mode is a mode that is designed to
`determine whether a computer system is functioning properly or to detect
`programming errors. He agreed with me.
`Now, I think from the demonstratives, I think they are going to
`take issue with the fact that he -- and I'm not trying to hide from this. He
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`said that that was one of many definitions that he would apply. The point is
`there is at least one ordinary meaning. Why did we jump to the specification
`first? You start with the ordinary meaning and then go to the spec to see if
`there is a limiting or a narrowing. They did exactly what in reverse what the
`Federal Circuit tells us to construe claims.
`Unless Your Honors have any questions on claim construction, I
`think those are really the only points I want to hit. I'm going to move on to
`the prior art unless there are any questions.
`I have broken up the remainder of the presentation into basically
`two portions. For the vast majority of the claims -- I have listed these in our
`briefs, I've listed them on slide 24. For the vast majority of the claims, POs
`repeat, rehash arguments that were raised in 457/458. Again, we are here
`today only for dependent claims. For most of the claims they rely on
`arguments from the independent claims, the same arguments they raised in
`the previous cases.
`I'm going to walk through these. I'm not going to spend a ton of
`time on them, but again, they raise this notion that there would be no
`motivation to combine Posadas with Stewart or Posadas with Miesterfeld.
`There's no sharing of the information because there's no second network.
`Again, that particular argument they tie to different claim limitations in the
`independent claims the same argument. Stewart does not disclose sending a
`notification. I think we spent 20 minutes on that last time when I was here.
`They haven't changed one shade from that argument.
`And importantly, I think it is important to remember, if there was
`anything wrong with the 457/458 petitions, they had the opportunity to file a
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`motion for reconsideration. They have not. These issues are now up at
`appeal at the Federal Circuit. They have not said in any context when they
`had the ability to, to say that those previous decisions were incorrect. They
`are arguing, rearguing the exact same arguments today in the context of
`dependent claims.
`JUDGE BOUCHER: What is the relevance of that point? Are you
`saying that they are somehow estopped from making those arguments or that
`they have waived some sort of argument?
`MR. GLASS: Your Honor, I know in the BMW case they raised
`the issue of estoppel. I think a plain meaning reading of the claim, of the
`rule, I think there is an argument to be made that there is an estoppel. I'm
`positing this too as a very practical issue. We argued the independent
`claims. We've already done that. They had the opportunity to tell Your
`Honors why that decision was wrong. They could have filed a motion for
`reconsideration. They didn't. They have chosen their route to challenge that
`decision. They are at the Federal Circuit. We are here today. And it's not
`even like they came up with new arguments in this petition. They didn't
`even do that. It's exactly the same arguments raised in 457 and 458. So
`whether we call that an estoppel, whether we call that a waiver, I think they
`have waived the arguments. But from a practical consideration, they are
`raising exactly the same arguments and have not told us why you were
`wrong in the first place. So I don't know if that answers your question.
`JUDGE BOUCHER: I think it answers my question.
`MR. GLASS: I'm on slide 26. Would one of ordinary skill in the
`art have combined Posadas or Miesterfeld with Stewart. We went down this
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`Case IPR2017-01503 (Patent 8,566,843 B2)
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`road extensively in 457/458. Again, they have raised the same arguments. I
`have cited to the final written decision from those cases. I'm not going to
`walk through it.
`On slide 26, Your Honors walked through first all of the rationales
`and all of the reasons that we laid out for combining Stewart with
`Miesterfeld. If you remember from our petitions in this case and in 457, we
`included pages and pages of explanation as to why these references would
`have been combinable.
`The punch line on slide 27, we agree, and again we cited to
`Stewart and we argue that it was simply memory management techniques
`that would be applicable to any number of references. We agree that
`Stewart's memory management techniques are fundamental techniques
`applicable to shared memory environments. That's exactly what we are
`doing here. It's the same thing we did in the last case, and they are not
`raising any new arguments in connection with Stewart.
`On slide 28, I have cited more proof. I'm not going to go through
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`that.
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`On slide 33, enablement, I am going to spend a minute on this. I
`didn't think I was going to. I did see it in their slides. They have raised the
`same exact argument from 457 that Stewart -- I'm sorry, that Posadas and
`Miesterfeld are somehow not enabled. Well, first of all, they are wrong on
`the facts. I'll rest on our briefs on what we've cited for Posadas and
`Miesterfeld. But they are flat out incorrect on the law. When you do --
`that's why we have the KSR factors. The first KSR factor is what is the
`distinction between the prior art and the claims. Of course the prior art is
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`never going to enable the full scope of the claims. It makes no sense. The
`Federal Circuit said just that in the Amgen case that we cited. They have not
`cited a single case from an obviousness perspective that says that
`enablement is required in an obviousness context.
`I cited your final decision. You agreed with me. Here is another
`quote just in case there was any doubt. This is the same case. In that case
`the District Court said, well, we are not going to find that the claims are
`obvious because the prior art is not enabled. On the bottom, the Federal
`Circuit said, no, you are wrong. We are going to remand, and District Court,
`you should reconsider obviousness with respect to the prior art but do so
`without reference to whether it's enablement as enablement of the prior art is
`not a requirement to prove invalidity under 103. I don't know how it can be
`any clearer. I don't know why we are arguing this particular point, but I
`raise it because it is in their slides.
`I'm going to move on. Now, this is one of the arguments I
`mentioned earlier that it's the same argument, just kind of sung to a different
`tune. It's just tied to different claim elements. They argued in 457/458 that
`Posadas, there is no sharing of the information because there's no processing
`at the second network side. And they base that on this notion that Posadas
`has a distributed memory which is somehow excluded by the claims. So
`they have raised the exact same argument here. They are saying that there is
`-- but they have tied it to different claim limitations, that there's no sharing
`of the information because Posadas doesn't have a second network.
`Before I get to that, this is just for context on slide 36, this was
`Your Honor's final written decision. In 457/458 there was no dispute
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`between the parties that there was a first and second network. That was
`what Your Honors found. That's what we argued. They argued there that
`there was no processing. Here now they are arguing no second network.
`I want to focus on their argument for a second. They are basically
`saying, and this is a quote on the bottom of slide 38, that they have this
`single road theory when it comes to Posadas, that when you travel on the
`same one-lane road to and from destinations, you are retracing the same
`path. I'll call that the single road theory.
`What they are trying to argue here is that in Posadas, information
`flows from the CAN to the SC and then stops at the silo, and that's it, so that
`information goes back and forth between that one first silo labeled 1, back
`and forth to the CAN network. But that's exactly what Posadas doesn't
`teach. Posadas teaches that the information flows -- and I'm going to walk
`through their expert testimony on this, he agreed with me that the
`information flows from the CAN network. It is stored in that first silo
`labeled 1 in the blackboard and then distributed over an Ethernet network.
`It's partially replicated amongst these other blackboards. I'll get to that in a
`minute too. That's expressly contemplated by the '843 patent and shared
`with the remaining silos on the Ethernet network. This is not just me
`reading into a single figure. So there are legions of quotes we've cited in our
`briefs. I think this is from the intro.
`JUDGE PETTIGREW: I'm sorry, which slide is that?
`MR. GLASS: I'm actually on the wrong slide, Your Honor. This
`is slide 38 and I'm citing to the quote on the upper left-hand side. This is
`from Posadas. I think it's from the intro, the communication system presents
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`two communication models. That's practically his first sentence. A CAN
`bus and then it has a Windows NT bus later in that quote that communicates
`transparently through channels, CAN, Ethernet, DDE, RS232. The two
`modes are coupled using an application interface, a bridge, the same thing
`the '843 patent discloses.
`If there was any more dispute, I took great pains to walk through
`this with their expert at his deposition. This took many more pages to get to
`here, but this was the punch line. I walked him through every aspect of this
`figure. I'll start from the top: You agree with me that data flows from the
`CAN network to the SC delivery system? So first I established that
`information flows from the green part to the blue part.
`Yes, I agree. He agreed with me on that.
`As data goes from CAN to SC, it goes first through the SC silo
`that's labeled 1, do you agree?
`Looking at Figure 4, that's what seems to happen. So he agrees
`with me all the information flows from CAN to Ethernet -- I'm sorry, CAN
`to the SC and then stored in that blackboard.
`And then the SC, I took his nomenclature, called them silos, the
`SC shown in 1 communicates with the silo shown in 2 via an Ethernet radio.
`Is that fair?
`And he agreed with me on that too. So there's no dispute. Their
`own expert agreed with me that information goes from the CAN network to
`the silo to the Ethernet network. So not only is their description inconsistent
`with their own expert, it's inconsistent with how they argued later on in their
`own response.
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`In connection with the claims, I think this was claims 52 and 53,
`that quote on the bottom, that's from their response. So they are arguing in
`connection with the independent claims that, well, there's only one road
`because the networks are identical. The networks
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