[00:00:01] Speaker 03: Before we proceed with our regular business, I'd like to turn it over to Judge Hughes for a motion. [00:00:10] Speaker 06: Good morning. [00:00:10] Speaker 06: I've been in a mission this morning. [00:00:12] Speaker 06: This is the time of year, or at least for me, that I unhappily have to let my current clerks move on, although I'm happy to see them move on and go to other things. [00:00:25] Speaker 06: Fortunately, the judiciary gets to keep this clerk another year. [00:00:28] Speaker 06: She's going to go clerk for a district court judge in Worcester, Massachusetts, for a year. [00:00:32] Speaker 06: And I'm sure she will prove as able of a clerk for him as she did for me. [00:00:37] Speaker 06: So that said, I move the admission of Rebecca Gentile, who is a member of the bar and is in good standing with the highest court of Massachusetts. [00:00:45] Speaker 06: I have knowledge of her credentials and am satisfied that she possesses the necessary qualifications. [00:00:51] Speaker 03: Judge Plater? [00:00:55] Speaker 03: I am delighted to grant the motion. [00:00:59] Speaker 03: I will proceed. [00:01:23] Speaker 03: All right, first case this morning is 18-1389, Deakin Industries versus Shmore Company. [00:01:31] Speaker 03: Mr. Lo Cicero? [00:01:34] Speaker 03: Yes, Your Honor. [00:01:37] Speaker 03: Let me just say at the outset that there was a request to close the courtroom because of confidential matters. [00:01:42] Speaker 03: I'll just tell you, I've been here 19 years, and I think I've closed the courtroom once or twice. [00:01:47] Speaker 03: So if we need to address that, we'll be mindful of the confidentiality restrictions. [00:01:52] Speaker 02: Thank you, Your Honor. [00:01:54] Speaker 02: Good morning, Your Honor. [00:01:55] Speaker 02: It's Anthony LoCicero for Pellants, Deikin Industries, and Deikin America, with me is my colleague, Mary Mikulski. [00:02:03] Speaker 02: At the outset, Deikin has standing to challenge the decision of the Board of Appeals. [00:02:12] Speaker 02: First, Deikin and Chemours are direct head-to-head competitors in the market for the sale of refrigerants. [00:02:19] Speaker 02: There are only five players in the world. [00:02:21] Speaker 02: By 2014, Deikin's customers, Honda and another automaker, had asked Deikin to supply it with the refrigerant at issue HFO1234YF, which I'll refer to as YF. [00:02:36] Speaker 02: Deikin told both of these automakers that the 709 patent, the patent at issue here, presented issues that Deikin needed to address. [00:02:47] Speaker 02: Honda asked Deikin for a formal price quote. [00:02:49] Speaker 02: to provide one yf to its u.s. [00:02:52] Speaker 03: facilities and i can decline uh... because it respects the intellectual property suggestion uh... i'm having my own views that i'm satisfied with based on the briefing so i can move on to the merits [00:03:17] Speaker 02: On the merits, the board either committed legal error by relying on the hearsay statement in the bill of reference for its truth, not for what it teaches, but for the truth of the statement contained therein, or it abused its discretion when it said it did not affirmatively rely on Dr. Sun's experiments and data, Dr. Sun being Kim Moore as the patent owner's expert. [00:03:43] Speaker 02: The board, we made a motion to exclude those experiments on the grounds that they started with the wrong starting compound. [00:03:51] Speaker 03: And the board said we did not affirmatively rely on Dr. Sun. [00:03:55] Speaker 03: So are you suggesting that the board was misstating what they had done? [00:04:01] Speaker 02: I don't think so, Your Honor. [00:04:02] Speaker 02: I think that [00:04:05] Speaker 02: What's curious is the word affirmatively, but I think I think your honor was right I think that the board did not rely on dr. Sun's experiments And I think that therefore the only support for the board's conclusion is that I can did not meet its burden of proof and if we turn to appendix 20 the portion of the board's decision Identifying the evidence that relied on it said that [00:04:32] Speaker 02: Patent owner, Chemours, directs us to evidence that it was known that dehydrofluorination of reactions can occur in reactors in the absence of a catalyst. [00:04:43] Speaker 02: In particular, Miller, the reference in question, discloses that dehydrofluorination of HFC-245Cb can be carried out in a reaction zone at elevated temperatures in the absence of a catalyst. [00:04:59] Speaker 02: Miller further teaches that the appropriate temperatures are between 350 and 900 degrees centigrade. [00:05:05] Speaker 02: Miller indicates that the length of the reactor, that is, including one or more catalysts. [00:05:11] Speaker 03: We're reading along with you. [00:05:12] Speaker 03: So there's a book. [00:05:14] Speaker 03: What's your argument here? [00:05:15] Speaker 03: I mean, this is hearsay? [00:05:18] Speaker 02: Yes. [00:05:22] Speaker 03: This is a discussion of what Miller discloses. [00:05:30] Speaker 02: And that's right. [00:05:31] Speaker 02: And what Miller discloses is that such a reaction can occur. [00:05:37] Speaker 02: What the board did was it violated its own rules by [00:05:45] Speaker 02: considering this statement for the truth of the matter, not for the disclosure, not for example a worker skilled in the art would think to do certain things because of this disclosure or the claims say this and this discloses something else, but the truth of the proposition that this reaction can and indeed did occur in this case [00:06:07] Speaker 02: when Mr. Takahashi reproduced example one of Miller and that's a violation of the rule 42.61 of 37 CFR which says that a specification and drawings of a patent are admissible evidence only to prove what they describe. [00:06:25] Speaker 02: They are not the truth of the statement and [00:06:31] Speaker 06: I'm not sure what difference that makes. [00:06:34] Speaker 06: I mean, the problem, it's your burden of proof, and you didn't submit any evidence that Miller inherently discloses this process, or enough. [00:06:43] Speaker 06: I mean, this seems like a bizarre patent to me, too, that the reason they got the patent was they claimed an impurity in addition to the actual substance. [00:06:53] Speaker 06: But there must be plenty of opportunities for you to get expert testimony or do the exact process rather than do a variant of Miller to show that every skilled artist would know that impurities always result from this. [00:07:09] Speaker 06: You didn't do it. [00:07:10] Speaker 06: So the fact that the board relied on part of Miller to show that [00:07:14] Speaker 06: It could do this process in a way that wouldn't necessarily result in impurities in the way their claim does. [00:07:21] Speaker 06: I don't see, even if we reject that, how you've still met your burden of proof to show that Miller inherently discloses impurities. [00:07:29] Speaker 02: In order to have complied with the requirements for the reproduction of the experiment, Dyken was required to demonstrate that any deviations were material, and Mr. Takahashi did. [00:07:42] Speaker 06: Why didn't you just do it exactly like Miller? [00:07:47] Speaker 06: Frankly, I don't understand why either of you didn't replicate Miller. [00:07:50] Speaker 06: You didn't replicate Miller exactly. [00:07:52] Speaker 06: They didn't replicate Miller exactly. [00:07:54] Speaker 06: What are you all dancing around here? [00:07:56] Speaker 04: That was my question also. [00:07:59] Speaker 04: Is there some compelling reason why Takahashi didn't do what Miller said? [00:08:05] Speaker 04: Then this argument would not even be in front of us. [00:08:15] Speaker 02: There is no way for me to answer that but to say you're correct, Your Honor. [00:08:18] Speaker 02: However, what Mr. Takahashi said was that he believed that even without the catalyst the reaction would mostly not progress. [00:08:26] Speaker 02: and that even if it did, there would not be sufficient amount of product generated that would affect this result. [00:08:32] Speaker 02: So the answer to your question is that he used the material that he had, same justification that Dr. Sun gave for not reproducing example one of Miller, starting with a different starting compound. [00:08:45] Speaker 02: He used what he had, and it was his testimony that that was an immaterial deviation. [00:08:52] Speaker 06: And the board disagreed, which we review for substantial evidence, right? [00:08:56] Speaker 02: yes sir but the problem is that there was no evidence to no admissible evidence to contradict mr takahashi statement the only evidence evidence that the board relied on was the statement of in miller one sentence in paragraph forty two to the effect that [00:09:18] Speaker 02: This reaction, dehydrofluoration, can occur in a catalyst-free zone. [00:09:24] Speaker 02: That is not evidence that it did occur. [00:09:27] Speaker 06: But does it have to be evidence that it did occur? [00:09:30] Speaker 06: Or does it just have to be because it's pointed to as prior art as evidence of what a skilled artisan would understand would occur? [00:09:39] Speaker 06: Isn't that what the board said about that paragraph in Miller? [00:09:43] Speaker 06: I think that it said. [00:09:46] Speaker 06: I mean, the board is allowed to rely on Miller as evidence of what a skilled artisan would think about the process, right? [00:09:55] Speaker 06: That's what prior art discloses. [00:09:57] Speaker 06: That's correct. [00:09:58] Speaker 06: So if they relied on it in that sense and said Miller demonstrates that a skilled artisan [00:10:03] Speaker 06: would understand that this process may not always happen, or it may happen in non-catalyst parts of the tube or whatever, then what's wrong with that conclusion? [00:10:14] Speaker 02: What's wrong with it is that it's being offered for, it is a statement of what a worker skilled in the art would think, but Mr. Takahashi, who performed the experiment and who testified on the road and gave direct and admissible testimony, said that in his view as a worker skilled in the art, [00:10:33] Speaker 06: Sure, but are you suggesting that the board can't read a reference and say this shows a skilled artisan would think X That is all that a the board can do well So they did that and they've read Miller and said a skilled artisan would think this of Miller your expert says a skilled artisan would think something else don't they get to judge the evidence and weigh it and [00:10:55] Speaker 06: Isn't that at all? [00:10:58] Speaker 06: I mean, we can't review that. [00:11:00] Speaker 02: I think that they could have, if they could certainly weigh, admissible evidence. [00:11:05] Speaker 06: But again, are you suggesting that the board's reading of what Miller discloses as a skilled artist would think is not admissible evidence? [00:11:16] Speaker 06: Not for the truth. [00:11:18] Speaker 06: You're not answering the question. [00:11:20] Speaker 06: They're not relying on for the truth of what happened in this specific experiment that your expert did. [00:11:27] Speaker 06: They're saying Miller discloses that a skilled artisan would understand X. Can they read Miller that way? [00:11:33] Speaker 06: Yes, they can. [00:11:34] Speaker 02: Well, isn't that what they did? [00:11:35] Speaker 02: No, they went further. [00:11:37] Speaker 02: They said that that is evidence [00:11:39] Speaker 02: that that's what did occur. [00:11:41] Speaker 06: But they also said that that's what a skilled artisan would understand, didn't they? [00:11:45] Speaker 02: Yes. [00:11:45] Speaker 06: Even if they went further, isn't that understanding of the skilled artisan sufficient to affirm their finding? [00:11:52] Speaker 02: I don't think so, Your Honor. [00:11:53] Speaker 02: I think that there's no direct evidence of what would happen in this particular case. [00:11:59] Speaker 02: And that's the dispute. [00:12:01] Speaker 02: And the other evidence. [00:12:03] Speaker 03: If there's no direct evidence of what would happen in a specific case, don't you lose? [00:12:08] Speaker 03: You've got the burden. [00:12:10] Speaker 02: with the evidence that was Mr. Takahashi's testimony, that in his view, as a work of skill in the art, the presence of a catalyst free zone would not create a material difference in the outcome of the results. [00:12:24] Speaker 02: So what? [00:12:24] Speaker 06: They're not obligated to accept his testimony. [00:12:27] Speaker 06: They could reject his testimony too and say no evidence, which is what they did. [00:12:31] Speaker 06: Even if they... Because he didn't replicate Miller. [00:12:36] Speaker 06: I mean, it comes back to that problem is he didn't replicate Miller. [00:12:40] Speaker 06: They weren't convinced that the differences were immaterial, so they rejected his testimony. [00:12:45] Speaker 06: All this back and forth about whether his permissible will rely on paragraph 42 or not seems to me beside the point. [00:12:52] Speaker 06: I mean, what evidence besides his testimony do you have that Miller inherently discloses this? [00:12:56] Speaker 02: Well, the other evidence [00:12:58] Speaker 02: that we should have been able to rely on in the view of the board not excluding it is Dr. Sun's proof of concept experiments because those experiments, as Mr. Takahashi said and testified in his second declaration, demonstrate that the catalyst-free zones could not have generated [00:13:19] Speaker 02: the amount of impurities that Mr. Takahashi found when he replicated the Miller experiment. [00:13:26] Speaker 02: There were two orders of magnitude. [00:13:29] Speaker 02: So even Dr. Sun's experiments demonstrated that there was not, that those catalyst free zones could not have altered the results and that the only [00:13:42] Speaker 02: place for the impurities that have been created was in the catalytic zone, which is what the Miller experiment is, and what Mr. Takahashi replicated. [00:13:52] Speaker 04: If neither you, the petitioner, nor the patent owner prove their cases, because neither of them had experts who could replicate Miller, apparently, [00:14:09] Speaker 04: and the PTAB looks at Miller and says, here's the prior order. [00:14:14] Speaker 04: Who loses? [00:14:16] Speaker 04: If that were the case, then you're the petitioner. [00:14:18] Speaker 02: Then the petitioner would lose. [00:14:20] Speaker 02: But in this case, and I see them into my rebuttal time, the point that we're making is that Mr. Takahashi said that his [00:14:30] Speaker 02: use of a longer catalyst-free zone was an immaterial deviation, and that that evidence should have carried the day. [00:14:39] Speaker 02: And I'll reserve the remainder of my time for you. [00:14:41] Speaker ?: Thank you. [00:14:41] Speaker 01: Good morning, Your Honors. [00:14:54] Speaker 01: May it please the Court? [00:14:55] Speaker 01: My name's Dee Prudoshi. [00:14:56] Speaker 01: I'm here for the appellee, Kim Morse. [00:14:59] Speaker 01: Judge Hughes, to your point, I think that's exactly the point on appeal. [00:15:05] Speaker 01: This really should be a substantial evidence case that I can fail to meet its burden. [00:15:12] Speaker 01: And they are arguing that all of this is, the linchpin to their argument really is the hearsay argument. [00:15:19] Speaker 01: We don't even need to consider whether or not it is here, say, because in the first instance, I can... Let me ask you. [00:15:27] Speaker 06: This is just purely a composition claim, right? [00:15:29] Speaker 06: It's not a method claim? [00:15:30] Speaker 06: Correct. [00:15:30] Speaker 06: And it's a composition claim... Could you claim just the underlying composition, or was that already well known in the art? [00:15:38] Speaker 01: I apologize. [00:15:40] Speaker 06: I'm sorry. [00:15:40] Speaker 06: The composition without the impurities. [00:15:43] Speaker 06: the composition without the impurities. [00:15:46] Speaker 06: You don't have a, that's not this claim. [00:15:48] Speaker 06: This claim depends on a certain level of impurity. [00:15:51] Speaker 06: That is correct. [00:15:52] Speaker 06: Okay. [00:15:53] Speaker 06: I mean, it just seems like a really odd thing that if you couldn't have claimed the composition, I mean, I know our precedent allows it, but now you can claim it just because you've noticed that, you know, in the ordinary process of making this an impurity is created. [00:16:07] Speaker 06: I mean, you're lucky your friend on the other side didn't come up with good evidence because it seems to me everybody would know that [00:16:13] Speaker 06: that you're going to get a certain level of impurity in making this kind of composition. [00:16:17] Speaker 01: Well, this impurity in particular, and unfortunately this isn't part of the record, but this impurity in particular does have some added properties to it. [00:16:29] Speaker 06: You're saying it has some utility to the specific application? [00:16:34] Speaker 06: Yes. [00:16:34] Speaker 06: So it's not really just an impurity. [00:16:36] Speaker 06: It's something that's going to add to the [00:16:40] Speaker 06: It's a like refrigerant coolant or something like that. [00:16:43] Speaker 06: That's correct. [00:16:44] Speaker 06: Yes [00:16:46] Speaker 06: uh... is that in the specification it's not in the specification so it's not really anything you can rely on to show that it's not obvious or something like that well that wasn't right now i know that's not that wasn't the argument in this case right exactly again i think you're lucky your friend didn't come up with better prior art and expert testimony well we well right uh... we would have certainly uh... introduced that evidence had that been in play [00:17:16] Speaker 06: I don't know how you could introduce it as relevant if it's not in your claims or your specification. [00:17:21] Speaker 01: Well, it's not in the claims, it's not in the specification. [00:17:25] Speaker 01: There is some testing that was done by our client that's not part of the record, of course. [00:17:31] Speaker 01: So we're just talking here. [00:17:35] Speaker 01: In terms of the principle argument that Deiken relies on is that the board improperly relied on Miller 42 as hearsay. [00:17:44] Speaker 01: But again, I don't think we need to get there because Deiken has waived that argument. [00:17:49] Speaker 01: And even without Miller 42, even if the court were to decide that it's hearsay and that Deiken did not waive it, there's substantial evidence to support the court's decision. [00:18:02] Speaker 01: So with the waiver argument, [00:18:05] Speaker 01: The 4264C is clear. [00:18:07] Speaker 01: Rule 4264C. [00:18:08] Speaker 01: Motion. [00:18:09] Speaker 06: Okay, so the board rejected their expert because the experiment was different and they found the differences were not immaterial, right? [00:18:20] Speaker 06: That's correct. [00:18:21] Speaker 06: Yeah, that is correct. [00:18:22] Speaker 06: Yes. [00:18:23] Speaker 06: Right. [00:18:23] Speaker 06: So if we get rid of the board's reading of paragraph 42 in Miller, what substantial evidence supports that decision and rejecting their expert's testimony? [00:18:32] Speaker 06: Because I think it's pretty clear that [00:18:36] Speaker 06: if their experts testimony was properly rejected then they're out, no matter what we do with all this hearsay. [00:18:42] Speaker 06: Is there anything that supports the rejection other than the board's reading of Miller? [00:18:45] Speaker 01: Yes. [00:18:46] Speaker 01: I mean, I think this goes to Judge Plager's point, which is if there's no evidence on one side and no evidence on the other, the petitioner loses. [00:18:55] Speaker 01: But there is more than that. [00:18:56] Speaker 01: There's Dr. Sun's testimony. [00:18:58] Speaker 01: There's the 281 patent. [00:19:00] Speaker 01: There's Mr. Takahashi's admission himself. [00:19:04] Speaker 01: This is all in the context of their burden to prove that they faithfully executed the Miller Example 1. [00:19:12] Speaker 01: And we still don't know, to this day, why he made the deviation that he did in using such a much longer reactor. [00:19:20] Speaker 06: Do we know why your expert made the deviations when he did his tests? [00:19:24] Speaker 01: So she did her tests without the catalyst. [00:19:28] Speaker 01: It was a proof of concept experiment that she made. [00:19:34] Speaker 01: 2157. [00:19:35] Speaker 01: I mean, she didn't replicate Miller exactly. [00:19:38] Speaker 06: She did not. [00:19:39] Speaker 06: No, Your Honor. [00:19:40] Speaker 06: I suspect there's a reason your expert didn't do it, more so than his. [00:19:43] Speaker 01: So she didn't have it on hand. [00:19:45] Speaker 01: 245CV is a starting material that Comoros does not use for its YF production. [00:19:52] Speaker 01: So that is the reason. [00:19:53] Speaker 01: It wasn't on hand. [00:19:54] Speaker 01: And because the limited time amounts in these proceedings [00:19:59] Speaker 01: She wasn't able to get hold of that. [00:20:01] Speaker 01: So again, but her experiments were without a catalyst and just simply showing that the longer reactor length is going to certainly affect the effluent that's being produced. [00:20:15] Speaker 01: So those are the things. [00:20:16] Speaker 01: And I want to just talk briefly about, you know, Dr. Sun's opinion. [00:20:22] Speaker 01: It was cited. [00:20:24] Speaker 01: You know, Deichen's counsel didn't [00:20:28] Speaker 01: didn't read into the record the Appendix 20, but it does cite exhibit 2016, which is Dr. Son's opinion, at paragraph 49. [00:20:36] Speaker 01: So that is part of the record that was relied upon by the board in its decision. [00:20:42] Speaker 01: And if we go back to paragraph 49, which is in Appendix 2803, she states, one of ordinary skill in the art at the time of Ms. [00:20:49] Speaker 01: Takahashi's experiments knew that thermal dehydrofluorination could occur in a hassoid tube without the aid of a catalyst. [00:20:56] Speaker 01: And she supported that. [00:20:58] Speaker 01: that opinion with Miller, 42, and the 281 pet as well. [00:21:04] Speaker 01: And that's not the only time she says it. [00:21:06] Speaker 01: If we go back to Appendix 16, which is the board's summary of our argument, Kimorza's argument, [00:21:13] Speaker 01: They cite to a couple of other paragraphs of Dr. Sun, paragraphs 39 and 45, and those are in appendix 2800 and 2802. [00:21:22] Speaker 01: She says the same thing, basically, that the effluent is going to change with a much longer reactor. [00:21:29] Speaker 01: So there's that evidence as well, to Your Honor's point. [00:21:35] Speaker 01: The 281 patent is cited separately in the board's decisions. [00:21:39] Speaker 01: That is also substantial evidence that supports [00:21:42] Speaker 01: And in Appendix 21, the board does cite to and discusses Mr. Takahashi's own admission. [00:21:51] Speaker 01: He says, yeah, that could happen. [00:21:53] Speaker 01: Now, he tries to downplay it and says that he doesn't think it's going to progress that much. [00:22:00] Speaker 01: But that is evidence that it could happen. [00:22:03] Speaker 01: And that is a material difference and deviation from Miller Example 1. [00:22:11] Speaker 01: So one more thing is that Deiken did not meet its burden to show why the deviation in the experiments were made. [00:22:18] Speaker 01: And I think that's the other point that I wanted to make. [00:22:20] Speaker 01: And just on the waiver, Deiken objected to Miller 42 in the proceedings below, but never moved to exclude that evidence from the trial. [00:22:36] Speaker 01: And so therefore, it was admitted and can be relied upon by the board [00:22:42] Speaker 01: its decision. [00:22:43] Speaker 01: So that is a waiver there. [00:22:46] Speaker 01: And therefore, once it's entered into the trial and it's admissible, the board can rely on it. [00:22:53] Speaker 03: You're talking about Dyken failure to exclude a portion of a reference that it relied on as prior art. [00:23:01] Speaker 03: Why on earth would any sane person do that? [00:23:04] Speaker 01: Well, they could exclude it for purposes of the truth of the matter, using it for the truth of the matter asserted. [00:23:08] Speaker 01: But they can certainly rely on it for what it describes and discloses. [00:23:13] Speaker 01: Of course, that's what the board did, is rely on it for what it discloses and teaches under the rules. [00:23:19] Speaker 01: And it was appropriate for the board to do that. [00:23:22] Speaker 01: It wasn't looking at it for the truth of the matter asserted. [00:23:28] Speaker 01: If there are no further questions, I think I've made my points. [00:23:32] Speaker 01: I yield my time. [00:23:32] Speaker 01: Thank you very much. [00:23:37] Speaker 02: Very briefly, Judge Hu's question about whether it was just an impurity, I think one answer to that is that unlike every other obviousness case, the patent donor did not put into the record any secondary considerations of non-obviousness. [00:24:01] Speaker 02: With regard to the waiver, as Chief Judge Proves said, no way we could, A, why would we possibly think to seek to exclude a portion of the reference that we relied on, and B, the error, what we believe to be the error of the board's way, was not apparent until the final written decision. [00:24:20] Speaker 02: With regard to Dr. Sun, it seems unfair and abusive for [00:24:30] Speaker 02: uh... Kim Morse to rely on Dr. Son's testimony uh... the 281 patent by the way is the same issue as Miller [00:24:39] Speaker 02: and not consider our arguments that Dr. Sun's data and experiments, which sought to demonstrate her concept, to prove her concept about the effect of the catalyst-free zone on dehydrofluorination, simply would not account for the volume of impurities that Mr. Takahashi found. [00:25:06] Speaker 02: If you have any further questions. [00:25:07] Speaker 02: Thank you. [00:25:08] Speaker 03: We thank both sides in the cases submitted. [00:25:17] Speaker 03: The next case for argument is 182094, Unilock v. Apa.