PUBLIC - REDACTED VERSION
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`UNITED STATES PATENT AND TRADEMARKOFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`FORD MOTOR COMPANY
`Petitioner
`
`V.
`
`PAICE LLC & THE ABELL FOUNDATION, INC.
`Patent Owner
`
`Case IPR2014-00571
`Patent 7,104,347
`
`Patent Owner’s Preliminary Responseto
`Petition for Inter Partes Review ofU.S. Patent
`No. 7,104,347
`
`PUBLIC - REDACTED VERSION
`
`1
`
`PAICE 2001
`BMW v. Paice
`IPR2020-00994
`
`1
`
`PAICE 2001
`BMW v. Paice
`IPR2020-00994
`
`

`

`Patent No. 7,104,347
`Patent OwnerPreliminary Response
`
`Case IPR2014-00571
`Attorney Docket No: 36351-0011IP1
`
`PUBLIC - REDACTED VERSION
`
`TABLE OF CONTENTS
`
`I.
`
`Il.
`
`INTRODUCTION ..0...ceecceeceseseeecsesceeeceeseseeseeseeeeeasaeecssasaeeseeeeceseneaseseseneaeasaneeseeaseneteeees 1
`
`BACKGROUND OF THE '347-PATENT icascasnnsiisead monaoniaiindarenduaees 3
`
`Il.=PETITIONER IS BARRED OR ESTOPPED FROM REQUESTING INTER PARTES
`REVIEW CHALLENGING THE ’347 PATENT CLAIMS... ceececeeeeeteceteteteteteeeees 5
`
`A.
`
`B.
`
`Introduction — The Arbitration AQre@Ment ........:.cecccececesesesesseesesssessseeestsseeeeees 5
`
`Petitioner Has Failed to Meet the Requirementsof 37 C.F.R. § 42.104.......... 9
`
`C.—The Board Should Exerciseits Discretion Under 37 C.F.R. § 42.108(b) and
`DenyInstitution of the Petition to Prevent Harm to Patent Owner................. 10
`
`CLAIM CONSTRUCTION........ccccccscscsecscssscsssssesssssssesssssnsssesssessesecasasanesenesesenseseees 12
`
`DEFECTS IN THE PROPOSED GROUNDS OF UNPATENTABILITY ..........:000 16
`
`A.
`
`Ground1 is defective becausePetitioner hasfailed to establish a reasonable
`likelihood that Severinsky ’970 in view of the general knowledge of a POSA
`describes or suggests the features recited in claims 23 and 36. ............008 16
`
`Severinsky 970 in view of the general knowledge of a POSA doesnot
`1.
`describe or suggest the claimed enginethat can efficiently produce torque at
`a lower level SP of the CNGING..........ccesececesesesesesesceeesseeteceeecesssesesseseeeeeess 17
`
`Severinsky '970 in view of the general knowledge of a POSA doesnot
`zo
`describe or suggestthe claimed enginethat canefficiently produce torque up
`to a maximum torque output MTO of the ENING. .........ccceecseseseeceescseesesenees 18
`
`Severinsky ‘970 in view of the general knowledge of a POSA doesnot
`i
`describe or suggest “employing said engine to propel said vehicle when the
`torque RL requiredto dosois less than said lower level SP and using the
`torque between RL andSP to drive said at least one electric motor to charge
`said battery when the state of charge of said battery indicates the desirability
`Of GOING SO........cccscscesscecscecssesescecececsesescseceecenesaeecasacecaeeeeenesasesaseseeeeeetetesanenesees 20
`
`2
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`

`

`Patent No. 7,104,347
`Patent OwnerPreliminary Response
`
`Case IPR2014-00571
`Attorney Docket No: 36351-0011IP1
`
`PUBLIC - REDACTED VERSION
`
`B.
`
`Ground 2 is defective becausePetitioner has failed to establish a reasonable
`likelihood that Severinsky '970 in view of the general knowledge of a POSA
`andin further view of Ehsani describes or suggests the featuresrecited in
`CIES Hy7, 1S, BING 2a ooh co ahr anncin ee cosPoceodivnSodveievvavarevnciwevincvanvamisedee’ ears 22
`
`There is no motivation for POSA to modify Severinsky '970 in view of
`1.
`RISEN cc ciesiniasissezseis cxazrsi rtastaads crigraansettasianteiianisin tantastauadesspiaedindeatipindiianidvads 22
`
`Severinsky '970 in view of the general knowledge of a POSA andin
`2.
`further view of Ehsani does not describe or suggest “a setpoint (SP) above
`which said engine torqueis efficiently produced.”...........ccscecsesseeeeseeeeeees 25
`
`Severinsky '970 in view of the general knowledge of a POSAandin
`3:
`further view of Ehsani doesnot describe or suggest the features of claim 9. 25
`
`C.
`
`Ground3 is defective becausePetitioner has failed to establish a reasonable
`likelinood that Ehsaniin view of Severinsky '970 describes or suggests the
`features recited in claims 1, 6, 7,9, 15, AN 21. eee ees eetseseeeeeeeeeeeeees 26
`
`Petitioner fails to present a prima facie case of obviousness with
`1,
`regard to Ehsani in view of Severinsky '970. .......:sccscsssesssesssssssscsesssesessseenees 27
`
`There is no motivation for POSA to modify Ehsani in view of
`2.
`SHEVENIMIGIN 9lrroxa cissocpanasoonsnye os iasscca sazesaseespvagi ons roneiconecoecnue cespmmaenerecamcotbeneenes 28
`
`Proposed combination of Ehsani in view of Severinsky 970 does not
`3
`describe or suggest “a second electric motor connected to road wheels of
`said vehicle, and operable as a motor,to apply torque to said wheels to
`propel said vehicle, and as a generator, for accepting torque from at least
`said wheels for generating CUFTENT.”.........:scsscssesssssessseresesssestesnsssssersserssssssees 29
`
`Ehsani in view of Severinsky ’970 does not describe or suggest “a
`4,
`setpoint (SP) above which said engine torqueis efficiently produced.”......... 30
`
`Ehsani in view of Severinsky '970 does not describe or suggest the
`+f
`BESALIPGS AE AMT AD scvsizene Seca cea ive caccathcnds asco Pad eds 5 cai Saaeoatea edebs ai tactaaeeidse 31
`
`VI.©REDUNDANT GROUNDS OF UNPATENTABILITY..........ccccccceccesssssesesesssesssseeeees 31
`
`VIL.
`
`CONCLUSIONoc ccccccsseecsssescstssssescsssssssesssssesscsneesssecsussssssneusesassneceesesssaneneeseseees 33
`
`3
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`

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`Patent No. 7,104,347
`Patent OwnerPreliminary Response
`
`Case IPR2014-00571
`Attorney Docket No: 36351-0011IP1
`
`PUBLIC - REDACTED VERSION
`
`TABLE OF AUTHORITIES
`
`CASES
`
`In re Zletz,
`893 F.2d 319 (Fed. Cir. 1989).......cccescsscssssessessssessessesessessssessessssssessnsnssesesseseseaseessnseseeten 12
`
`K/S HIMPPv. Hear-WearTechs., LLC,
`751 F.3d 1362 (Fed. Cir. 2014)... cccccssscsssessessssesssssssesseesssesseeesssseeassssneessessneasessnsessess 19
`
`KSRInt'l Co.v. Teleflex Inc.,
`BOO WS: SOG (2007) avcaecs ce assstecad uessisbentin less. ssssssccssscessececsecscsesscscsecsessessersecarsscasssees 19, 28
`
`Liberty Mut. Ins. Co. v. Progressive Cas. Ins. Co., CBM2012-00003, PaperNo. 7
`(PTAB Oct: 25, 2012) cessscsseacaattenteatunaseasoisiesssseseccessececsesessessesessesseseesecsessesaeeseessaesseaeess 2, 32
`
`STATUTES AND REGULATIONS
`
`BP NOS GI ese sesta acs Aa ced isiSeubcaie Wage css csescccscccsncaccncsccucncacescsesscnenscnsarsncarsucarsneseasess 1
`
`SOUS. SOUSDs ssssceicesessctaceingacecuasncaapaspacbdeeseeeecececeecseecececseeeececsesseeecseeseeecseeneeesaesaeeseaeens 11
`
`SIE PRS AZ) sce cscs rasncses nce css en ae encneceeecseeeesecneeeeseeseeeeseeneeeeseeseeaesneneeseaees 2, 32
`
`BF CPR GAZ AGO) ciate Seta tictestbehdeeneeaeceececceesecseceeeeseceeseeseeaeseeaeeaeseeaeeansneaeeaeateas 12
`
`OT ERR § 42 NGG vcscescsacancsicacssevcisntsansndsnniontveccessecscceesececceeseecceeeseecenseeseenecaeseenseansneneeaeseeaees 9
`
`OE eS AZ AUT scctisssnscazeapenssapescnssascrnsnssnsdnidesceesecoccesseecceeeceeeceseseeceseeaesesaeeaeseeaeeasseeaeeansneaees 1
`
`OPE RS AZ ADB(D)
`
`si cctsesusns ensekteacilateaiarvaldieeeeesecsececseesecseceeseeseceeseeseeeeseeaeeaeseeaeeassneaseaeaeeas 10
`
`77 Fed. Reg. 48688 (Aug. 14, 2012). ccceccsessssessescssssessseseseesesessesesetsesesseseteceesensesensnsecees 10
`
`OTHER
`
`Inter Partes Review, Inter Partes Disputes (last visited July 11, 2014),
`http://www.uspto.gov/aia_implementation/DpPai.JSP..........ccc.ccccssseecssseccssssssseccssseeccsssssecssseesseees 8
`
`4
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`Patent No. 7,104,347
`Patent OwnerPreliminary Response
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`Case IPR2014-00571
`Attorney Docket No: 36351-0011IP1
`
`PUBLIC - REDACTED VERSION
`
`EXHIBITS
`
`Exhibit Number
`5001
`
`Exhibit Name
`Arbitration Agreement between Paice LLC and Ford Motor
`
`Company
`
`iv
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`5
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`

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`PUBLIC - REDACTED VERSION
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`Case IPR2014-00571
`Attorney Docket No: 36351-0011IP1
`
`Patent No. 7,104,347
`Patent OwnerPreliminary Response
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`I.
`
`INTRODUCTION
`
`Paice LLC and The Abell Foundation, Inc. (collectively, “Patent Owner”) respectfully
`
`submit this Preliminary Responsein accordance with 35 U.S.C. § 313 and 37 C.F.R. §
`
`42.107, responding to the Petition for Inter Partes Review (‘the Petition”) filed by Ford Motor
`
`Company(“Petitioner”). Patent Owner requests that the Board notinstitute inter partes
`
`review because (1) Petitioner lacks standing in view ofthe bargained-for Arbitration
`
`Agreement between Petitioner and Patent Owner and (2) the Petition fails to establish a
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`reasonable likelihood that Petitioner will prevail with respectto at least oneof the
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`challenged claims.
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`First, Petitioner and Patent Owner have negotiated and executed an Arbitration
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`Agreementaspart of a settlement of a prior patent infringement suit and Petitioner is barred
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`or estopped from requestinginter partes review challenging the claims ofthe '347 patent in
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`view ofthe Arbitration Agreement.
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`Second, for each of the proposed groundsof unpatentability, Petitioner has failed to
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`demonstratethat that there is a reasonable likelihood that the priorart relied upon
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`anticipates or renders obvious the challengedclaims.
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`For example, with respect to Ground 1, Petitioner has failed to demonstrate a
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`reasonable likelihood that Severinsky ’970 (Ex. 1003) in view of the general knowledgeof a
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`6
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`Patent No. 7,104,347
`Patent OwnerPreliminary Response
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`Case IPR2014-00571
`Attorney Docket No: 36351-0011IP1
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`PUBLIC - REDACTED VERSION
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`POSAdiscloses or suggests an enginethat can efficiently produce torque at loads between
`
`a lowerlevel SP and a maximum torque output MTO, asrecited in claim 23.
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`With respect to Ground2, Petitioner has failed, among otherthings, to demonstrate
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`a reasonablelikelihood that a POSA would have known and beenable to modify Severinsky
`
`‘970 (Ex. 1003) in view of Ehsani (Ex. 1004).
`
`With respect to Ground 3, Petitioner has not, among otherdeficiencies, presented a
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`prima facie case of obviousness,thusfailing to demonstrate a reasonablelikelihood that the
`
`proposed combination of Ehsani (Ex. 1004) in view of Severinsky ’970 (Ex. 1003) describes
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`or suggests the recited features ofclaims 1, 6, 7, 9, 15, and 21.
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`Finally, the Petition proposes several redundant grounds without identifying how any
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`one ground improvesonthe other, contrary to 37 C.F.R. § 42.1(b) and the Board’s Liberty
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`Mutual representative order. See Liberty Mut.! Ins. Co. v. Progressive Cas.Ins. Co.,
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`CBM2012-00003, Paper No. 7 (PTAB Oct. 25, 2012). To the extent the Board institutes on
`
`one ground, the redundant grounds should be denied.
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`Accordingly, Petitioner's petition fails to establish a reasonablelikelihood thatit
`
`would prevail with respect to at least one of the claims challengedin the petition. This
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`petition should be denied.
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`Patent No. 7,104,347
`Patent OwnerPreliminary Response
`
`Case IPR2014-00571
`Attorney Docket No: 36351-0011IP1
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`PUBLIC - REDACTED VERSION
`
`Il.
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`BACKGROUND OF THE ’347 PATENT
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`The 347 patent (Ex. 1001), entitled “Hybrid Vehicles,” issued on September12,
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`2006, from an application with a priority date of September 14, 1998. The '347 patent
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`discloses embodiments of a hybrid electric vehicle, with an internal combustion engine and
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`two motors. One or both of the motors may be used to recharge the battery. Additionally, a
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`microprocessoris employedto select different operating modes based on thevehicle’s
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`instantaneous torque requirements, the state of charge ofthe battery bank, and other
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`variables. (See, e.g., Ex. 1001 at Abstract.)
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`An embodimentof the hybrid vehicle disclosed in the 347 patent is shownin Figure
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`3, reproduced below:
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`B
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` 6.3
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`As shown, a traction motor 25 is connected to the road wheels 34 through a
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`differential 32. A starter motor 21 is connected to the internal combustion engine 40. The
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`Patent No. 7,104,347
`Patent OwnerPreliminary Response
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`Case IPR2014-00571
`Attorney Docket No: 36351-0011IP1
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`PUBLIC - REDACTED VERSION
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`motors 21 and 25are functional as either motors or generators, depending on the operation
`
`of the corresponding inverter/charger units 23 and 27, which connect the motors to the
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`battery bank 22. (See Ex. 1001 at 26:13-24.)
`
`These componentsare controlled by a microprocessor48 or any controller capable
`
`of examining input parameters and signals and controlling the modeof operation of the
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`vehicle. (See, e.g., Ex. 1001 at 26:25-27:20.) For example, control of engine 40is
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`accomplished by way of control signals provided by the microprocessorto the electronic fuel
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`injection (EFI) unit 56 and electronic engine management (EEM) unit 55. Control of (1)
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`starting of the engine 40; (2) use of motors 21 and 25 to provide propulsive torque; or(3)
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`use of motors as generatorsto provide regenerative recharging of battery bank 22, is
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`accomplished through control signals provided by the microprocessorto the inverter/charger
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`units 23 and 27. (See, e.g., Ex. 1001 at 26:59-27:20; 28:38-49.)
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`The hybrid vehicle may be operated in a number of modes basedon the vehicle’s
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`instantaneous torque requirements, the engine’s maximum torque output, the state of
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`charge of the battery, and other operating parameters.
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`In an implementation of the ’347
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`patent, the microprocessor causesthe vehicle to operate in various operating modes
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`pursuantto its controlstrategy.
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`For example, in mode |, the hybrid vehicle is operated as an electric car, with the
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`traction motor providing all torque to propel the vehicle.
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`(Ex. 1001 at 37:26-35.) As the
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`4
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`Patent No. 7,104,347
`Patent OwnerPreliminary Response
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`Case IPR2014-00571
`Attorney Docket No: 36351-00111P1
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`PUBLIC —- REDACTED VERSION
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`vehicle continues to be propelledin electric only mode,the state of charge of the battery
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`may become depleted, and need to be recharged.
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`I|n this case, the hybrid vehicle may
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`transition to modeII to rechargethe battery, in which the vehicle operates as in mode|, with
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`the addition of the engine running the starter/generator motor to provide electrical energyto
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`operate the traction motor and recharge the battery.
`
`(Ex. 1001 at 37:35-39.) When the
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`internal combustion engine can operatein its fuel efficient range, the hybrid vehicle
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`operates in mode IV, with the engine providing torque to propel the vehicle.
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`(Ex. 1001 at
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`37:45-47; 38:55-65.)
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`If the vehicle requires additional torque, such as for acceleration or
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`hill-climbing, the vehicle may enter mode V, where the traction motor provides additional
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`torque to propel the vehicle beyond that provided by engine 40.
`
`(Ex. 1001 at 38:4-11.)
`
`Ill.
`
`PETITIONER IS BARRED OR ESTOPPED FROM REQUESTING INTER PARTES
`REVIEW CHALLENGING THE ’347 PATENT CLAIMS
`
`A.
`
`Introduction - The Arbitration Agreement
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`Petitioner is barred or estopped from requesting an inter partes review challenging
`
`the claims of the ’347 patent in view of an Arbitration Agreement negotiated by Petitioner
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`and Patent Owner as a part of a settlement of Patent Owner's 2010 patentinfringement suit
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`against Petitioner.
`
`(Ex. 2001, Arbitration Agreement(“AA’).)1
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`Patent No. 7,104,347
`Patent OwnerPreliminary Response
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`Case IPR2014-00571
`Attorney Docket No: 36351-00111P1
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`PUBLIC —- REDACTED VERSION
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`11
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`Patent No. 7,104,347
`Patent OwnerPreliminary Response
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`Case IPR2014-00571
`Attorney Docket No: 36351-00111P1
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`PUBLIC —- REDACTED VERSION
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`Petitioner has breachedthe Arbitration Agreement’s===c)
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`and therefore should be estopped or barred from requesting inter partes review
`
`
`
`challenging the patentclaims of the '347 patent.(Neereeeeectet!
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`7
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`12
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`Patent No. 7,104,347
`Patent OwnerPreliminary Response
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`Case IPR2014-00571
`Attorney Docket No: 36351-00111P1
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`PUBLIC —- REDACTED VERSION
`
`Secitioner then filed four separate Petitions
`
`for Inter Partes Review on April 4, 2014 with the Patent Trial and Appeal Board ofthe U.S,
`
`Patent Office. The cases are numbered: IPR2014-00568, IPR2014-00570, IPR2014-00571
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`and IPR2014-00579. On June 5, 2014, Petitionerfiled four more Petitions for Inter Partes
`
`Review. Those cases are numbered: IPR2014-00852, IPR2014-00884, IPR2014-00875 and
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`IPR2014-00904.
`
`Each ofthe eight Petitions for Inter Partes Reviewfiled by Petitione(aD
`eeaSa,
`°aee
`ey) Indeed, the U.S. Patent and Trademark Office classifies IPR asa trial
`
`proceeding which, among otherthings, determines the validity of a patent. Parties to IPR
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`proceedings file pleadings, take discovery, presenttrial briefs, participate in evidentiary
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`hearings with live testimony, and make arguments before a three administrative law judge
`
`3 “Inter Partes Review,” http://www.uspto.gov/aia_implementation/bpal.isp.
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`13
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`Patent No, 7,104,347
`Patent OwnerPreliminary Response
`
`Case IPR2014-00571
`Attorney Docket No: 36351-00111P1
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`PUBLIC —- REDACTED VERSION
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`keee
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`GDctitioner breached the Arbitration Agreementiel
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`jot Petitioner's eight separate IPR proceedings force Patent Ownertolitigate on eight
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`separate fronts, including multiple IPR’s directed against the instant challenged ‘347 patent.
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`For example, Petitioner filed 3 IPRs covering many of the same claimsof the '347 patent:
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`(1) IPR2014-00579—claims 1, 7, 8, 18, 21, 23, and 37; (2) IPR2014-00571—claims1, 6, 7,
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`9, 15, 21, 23, and 36;and (3) IPR2014-00884—claims1, 7, 10, 21, 23, and 24.
`
`B.
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`Petitioner Has Failed to Meet the Requirements of 37 C.F.R. § 42.104
`
`As discussed above, by virtue of the unambiguoustermsof the Arbitration
`
`Agreement, Petitioner is barred or estopped from requesting inter partes review. Under 37
`
`C.F.R. § 42.104, “[t]he petitioner must certify that the patent for which review is soughtis
`
`available for inter partes review andthat the petitioner is not barred or estopped from
`
`requesting an inter partes review challenging the patent claims on the groundsidentified in
`
`the petition.” While Petitioner parroted the languagefrom the rule in makingits
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`Patent No. 7,104,347
`Patent OwnerPreliminary Response
`
`Case IPR2014-00571
`Attorney Docket No: 36351-00111P1
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`PUBLIC —- REDACTED VERSION
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`“certification” in each ofits eight petitions for inter partes review, Petitionerfailed to bring the
`
`Arbitration Agreementto the Board's attention, or address the terms of the Agreement
`
`whatsoever.
`
`“Section 42.104(a) provides that a petition must demonstrate that the petitioner has
`
`standing.” 77 Fed. Reg. 48688 (Aug. 14, 2012). “This requirementis to ensure that a party
`
`has standing tofile the inter partes review and would help prevent spuriously-instituted inter
`
`partes reviews.” /d.
`
`In fact, “[flacially improper standingwill be a basis for denying the
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`petition without proceeding to the merits of the petition.” /d. By failing to address the
`
`Agreementin its petition, the Petitioner has failed to meet section 42.104(a)'s requirement
`
`that the Petitioner demonstrate that it has standing. For at least this additional reason, the
`
`instant petition should be denied.
`
`C.
`
`The Board Should Exercise its Discretion Under 37 C.F.R. § 42.108(b)
`and DenyInstitution of the Petition to Prevent Harm to Patent Owner
`
`Moreover, even if the Petitioner had addressed or acknowledgedthe Arbitration
`
`Agreementin its petition, the Board should exerciseits discretion and deny the instant
`
`petition to prevent substantial harm to the Patent Ownerfrom the Petitioner's breachofthe
`
`Agreement. First, Patent Owner will lose the benefit of the bargain it made with Petitioner,
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`PUBLIC —- REDACTED VERSION
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`Patent No. 7,104,347
`Patent OwnerPreliminary Response
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`Case IPR2014-00571
`Attorney Docket No: 36351-00111P1
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`1 220: over ise
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`the benefit of the bargain it believed it obtained.
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`Petitioner, on the other hand, will lose nothing if the instantpetition is denied.
`
`It will
`
`still have the opportunity to challenge valiclity/Qa
`
`losing only the time between theoriginal filing ofits petition and the Board's institution
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`decision—andit will have the right to present whatevervalidity defenses remain after the
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`a °e:i012cannot be
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`4 Patent Ownerhas concurrently-filed a Motion for Preliminary Injunction in the co-pending
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`district court case (Paice LLC and The Abell Foundation,Inc. v. Ford Motor Company, C.A.
`
`No. 1:140-cv-00492-WDQ) seeking an Orderrequiring Petitioner to dismiss sevenof the
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`IPRs to comply with the Arbitration Agreement’
`
`
`
`
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`(nodeeqUlngPelond?Toirinale eve)ae
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`dismiss the instantpetition and each of the other sevenpetitions for at least the reasons
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`discussed herein.(i
`a ©5012"is wel within the one.
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`yeartime bar of 35 U.S.C. § 315(b) and therefore will not be prejudiced by denial of
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`institution of each of the presently-pending petitions.
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`Patent No. 7,104,347
`Patent OwnerPreliminary Response
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`Case IPR2014-00571
`Attorney Docket No: 36351-0011IP1
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`PUBLIC - REDACTED VERSION
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`harmedby a decision that merely requiresit to live up to the contractual promises it made.
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`Accordingly, for at least these additional reasons, the Board should exerciseits discretion
`
`and decide notto institute inter partes review on the groundthat at least Petitioner lacks
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`standingto bring the instantpetition.
`
`While Patent Ownerhasprovided reasons as to why the Board should notinstitute
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`inter partes review basedsolely on the bargained-for Arbitration Agreement between the
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`parties, other reasons exist for denying certain grounds of unpatentability presented in the
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`Petitioner’s petition. Each of those reasonsis discussedin further detail below.
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`IV.
`
`CLAIM CONSTRUCTION
`
`A claim subject to IPRis given its “broadest reasonable construction in light of the
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`specification of the patent in which it appears.” 37 C.F.R. § 42.100(b). This meansthat the
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`words of the claim are given their plain meaning unless that meaningis inconsistent with the
`
`specification.
`
`In re Zletz, 893 F.2d 319, 321 (Fed. Cir. 1989). Patent Owner submits, for
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`the purposesof the IPR only, that the claim terms are presumedto take ontheir broadest
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`reasonable interpretation in view ofthe specification of the 347 patent.5 Underthis
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`5 Becausethe standardsof claim interpretation appliedin litigation differ from PTO
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`proceedings, any interpretation of claim termsin this IPR is not binding upon Petitionerin
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`anylitigation related to the '360 patent. See In re Zletz, 893 F.2d at 321.
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`12
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`Patent No. 7,104,347
`Patent OwnerPreliminary Response
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`Case IPR2014-00571
`Attorney Docket No: 36351-0011IP1
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`PUBLIC - REDACTED VERSION
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`standard, and consistent with at least one district court construction of the same terms, the
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`broadest reasonableinterpretation of the terms “setpoint(SP)” and “SP,” which appear in
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`claims 1, 6, 7, 9, 15, 23, and 36 of the 347 patent, is “a definite, but potentially variable
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`value at whichatransition between operating modes may occur.” (Ex. 1115 at 13.)
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`Contrary to the broadest reasonable interpretation standard, Petitioner's proposed
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`construction for the terms “setpoint (SP)” and “SP”is based upon an improperly narrow
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`reading of the specification and completely dismisses the previous construction of the same
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`term by the U.S. District Court for the Eastern District of Texas. (See Petition at 14-16.)
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`Specifically, Petitioner asserts that “setpoint (SP)” and “SP” should be construed as “a
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`predetermined torque value.” (/d. at 16.) Petitioner's proposed construction is contrary to
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`the specification and claims of the ’347 patent.
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`The specification of the 347 patent makesclear that the control system calculates a
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`numberof sensed variables, such as “road load,” the current torque outputof the engine,
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`and the state of chargeof the battery, and comparesthose calculated values against the
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`“setpoint” to determine the mode of operation:
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`the microprocessortests sense and calculated values for system variables,
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`such as the vehicle’s instantaneous torque requirement,i.e., the “road load”
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`RL, the engine’s instantaneous torque output ITO, both being expressed as a
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`percentage of the engine’s maximum torque output MTO, and the state of
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`chargeof the battery bank BSC, expressed as a percentage ofits full charge,
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`Patent No. 7,104,347
`Patent OwnerPreliminary Response
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`Case IPR2014-00571
`Attorney Docket No: 36351-0011IP1
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`PUBLIC - REDACTED VERSION
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`against setpoints, and usesthe results of the comparisonsto control the
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`modeof vehicle operation.
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`(Ex. 1001 at 40:21-32.)
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`The specification also discloses that the “value of a setpoint (for example) may vary
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`somewhatin responseto recent history, or in response to monitored variables” and that“the
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`values given above for various numerical quantities may vary somewhatwithout departing
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`from the invention.” (See Ex. 1001 at 40:39-43.) Other examplesof the “setpoint” varying
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`include: varying the “setpoint” “in responseto a repetitive driving pattern” such as the route
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`driven by the driver each day (Ex. 1001 at 40:56-67); and varying the “setpoint” based “on
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`the modeof operation in effect when the road load equals a given setpoint SP,” e.g., varying
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`the “setpoint” for the transition between mode | and modeIV whenthe “road load”is
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`fluctuating around the “setpoint” (Ex. 1001 at 41:20-54). Moreover, the '347 patent
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`specification describes that “setpoint”isn’t merely a value that is predetermined ordefinite,
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`but ratherthatit refers to a value that is potentially variable. Indeed, the ’347 patent
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`specification explicitly states that “setpoint, referred to in the appendedclaims as ‘SP’...is
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`obviously arbitrary and can vary substantially.” (Ex. 1001 at col. 40:50-55 (emphasis
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`added); see also id. col. 13:23-25.) In addition, claim 2 specifically recites that “the
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`controller monitors patterns of vehicle operation over time and varies said setpoint SP
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`Patent No. 7,104,347
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`Case IPR2014-00571
`Attorney Docket No: 36351-0011IP1
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`PUBLIC - REDACTED VERSION
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`accordingly,” which clearly showsthat the setpoint SP is not necessarily a “predetermined”
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`value as Petitioner contends.
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`Additionally, Patent Owner notesthatat least one district court has construed the
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`terms “setpoint” and “SP” consistent with Patent Owner’s proposed construction.
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`(Ex. 1115
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`at 13.)
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`In that case, the court rejected defendant's argumentthat “setpoint” should be
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`construed as a “torque value”(essentially the same argumentbeing offered by Petitioner
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`here), holding that:
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`Although it is possible that a setpoint may always be determined to be a
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`torque value, there is nothing in the claims or specification that indicate
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`a given setpoint value is actually represented in terms of torque. In fact,
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`the specification clearly indicates that the state of charge of the battery bank,
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`‘expressed as a percentageofits full charge’ is compared against setpoints,
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`the result of the comparison being used to control the modeofthe vehicle.
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`'347 Patent, col. 40, Il. 28-31. Clearly a setpoint based on the battery charge
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`status is not a torque value. See also 347 Patent, col. 41, Il. 10-19 (‘“Itis also
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`within the scopeof the invention to make setpoint SP ... somewhat‘fuzzy’”).
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`(Ex. 1115 at 10 (emphasis added).)
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`The District Court went onto hold that the terms “setpoint” and “SP” should be given
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`the sameconstruction that Patent Owneroffers here, namely “a definite, but potentially
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`variable value at whichatransition between operating modes may occur.” /d.
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`Patent No. 7,104,347
`Patent OwnerPreliminary Response
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`Case IPR2014-00571
`Attorney Docket No: 36351-0011IP1
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`PUBLIC - REDACTED VERSION
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`Patent Owneralso notes that Dr. Davis’ opinions hinge on Petitioner's proposed
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`various constructions. For example, Dr. Davis statesthat “[flor the purposesofthis
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`declaration...regarding unpatentability,” he interprets “SP” and “Setpoint (SP)” as
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`“predetermined torque value.” (Ex. 1005 at | 174; see also id. at J] 273, 295, 318, 329,
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`339, and 371.) Accordingly,if the Board rejects any of Petitioner's constructions, Dr. Davis’
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`Opinions on the corresponding claim term (or terms) are irrelevant and should be given no
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`weight.
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`V.|DEFECTS IN THE PROPOSED GROUNDS OF UNPATENTABILITY
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`Each ofthe proposed grounds of unpatentability is defective for at least the reasons
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`detailed below.
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`A.—Ground 1 is defective becausePetitioner hasfailed to establish a
`reasonablelikelihood that Severinsky ’970 in view of the general
`knowledge of a POSA describes or suggests the featuresrecited in
`claims 23 and 36.
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`The Board should denythe Petition for inter partes review ofclaim 23 (andits
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`dependentclaim 36) under Ground 1 becausePetitioner hasfailed to establish a
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`reasonablelikelihood that Severinsky 970 in view of the general knowledge of a POSA
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`describes or suggests at least “an internal combustion engine capableofefficiently
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`producing torque at loads betweena lowerlevel SP and a maximum torque output MTO,”
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`much less the recited steps of employing such engine. Moreover, Petitioner has failed to
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`establish a reasonable likelihood that Severinsky ’970in view of the general knowledgeofa
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`Patent No. 7,104,347
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`Case IPR2014-00571
`Attorney Docket No: 36351-0011IP1
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`PUBLIC - REDACTED VERSION
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`POSAdescribes or suggests the recited step of “employing said engine to propel said
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`vehicle when the torque RL required to do sois less than said lower level SP and using the
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`torque between RL and SP to drive said at least oneelectric motor to charge said battery
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`whenthe state of charge of said battery indicates the desirability of doing so.”
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`1.
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`Severinsky ’970 in view of the general knowledge of a POSA does
`not describe or suggest the claimed enginethat can efficiently
`producetorqueat a lowerlevel SP of the engine.
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`Severinsky ’970 does not describe or suggestthe claimed engine that can efficiently
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`produce torqueat a lowerlevel SP of the engine. Regarding setpoint (SP), Petitioner and
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`Dr. Davis assert that because the engine in Severinsky 970 runs only at 60-90% of MTO,
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`the low end of 60% of MTOis a “predetermined torque value” and thus equivalentto the
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`claimed “setpoint” based on Petitioner's flawed proposed construction of the term. (See Ex.
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`1005 at ] 204; see also Petition at 21.) However, as discussed above, “setpoint” as
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`properly construed in view of the specification andin light of the broadest reasonable
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`interpretation standard indicates values that are definite but potentially variable. At
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`minimum, Petitionerfails to demonstrate how the lower end of the 60-90% range of the
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`disclosed engine in Severinsky ’970 can bevaried.
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`To the contrary, Petitioner equates the claimed “lowerlevel SP”to a fixedlevel of
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`“60% of the engine’s maximum torque output.” (Petition at 21.) Dr. Davis further explains
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`that the 60-90% of MTO “is the ‘sweetspot’ of the disclosed engine where operation is most
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`Case IPR2014-00571
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`PUBLIC - REDACTED VERSION
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`efficient.” (Ex. 1005 at 202.) Neither the Petition nor Dr. Davis's declaration however
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`provides any supporting evidenceto indicate that this low end value in Severinsky 970 may
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`be varied in any way. Rather, Petitioner and Dr. Davis merely explain that the engine in
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`Severinsky '970 has a lowerefficient operation point that is a fixed property of the engine.
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`Therefore, Ground 1 is defective becauseit fails to establish a reasonablelikelinood
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`that Severinsky ’970 in view of the general knowledge of a POSA describes or suggests the
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`claimed enginethat can efficiently produce torque at a lowerlevel SP of the engine.
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`2.
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`Severinsky 970 in view of the general knowledge of a POSA does
`not describe or suggest the claimed enginethat can efficiently
`produce torque up to a maximum torque output MTOof the
`engine.
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`Petitioner has failed to provide any evidence regarding how Severinsky 970
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`describes or suggests the claimed engine thatefficiently produces torque up to a maximum
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`torque output (MTO) of the engine. Petitioner’s expert, Dr. Davis, likewise falls short in
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`demonstrating how Severinsky '970 meetsthis claimed feature.
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`According to the Petitioner, Severinsky 970 teaches an engine thatis “operated
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`only under its most efficient conditions” of output power and speed. (Petition at 20-21,
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`emphasis added.) Petitioner further acknowledgesthat the engine disclosed in Severinsky
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`'970 “is run only in the nearvicinity of its mostefficient operational point, that is, such
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`that it produces 60-90% of its maximum torque whenever operated.” (Id. at 21 (emphasis
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`in original).)
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`In other words, to the extent that Severinsky ’970 discloses “an internal
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`Patent No. 7,104,347
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`Case IPR2014-00571
`Attorney Docket No: 36351-0011IP1
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`PUBLIC - REDACTED VERSION
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`combustion engine capable ofefficiently producing torque,” any such engine can at best
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`maintain efficiency up to 90%ofits maximum torque, not up to the full maximum torque
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`output (MTO) asrecited in claim 23.
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`Incapable of offering any evidence as to how Severinsky '970 discloses an engine
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`that can operate efficiently up to its maximum torque output, Petitioner cites to the
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`declaration of Dr. Davis in contending that “[a] POSA would