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We have four cases on the calendar this morning.

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But before we get to them, we have one of our pleasant annual ceremonies where we welcome into our bar our departing law clerks.

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And I will be the movement for two of them.

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And Church Stoll will be the movement

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the third.

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I will begin by stating what is observatory, which is that I move the admission of Arthur John Argyle III, who is a member of the Bar and is in good standing with the highest courts of New York and New Jersey.

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I have knowledge of his credentials and am satisfied that he possesses the necessary qualifications.

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And I also move the admission of Yi Pei, Audrey Yang, who is a member of the Bar and is in good standing with the highest court of New York.

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I have knowledge of her credentials, and I'm satisfied that she possesses the necessary qualifications.

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Beyond these obligatory statements, I want to state that these are two wonderful people.

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They have excellent minds.

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They are very diligent.

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They have played important roles in my chambers for the last two years.

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I have been privileged to have them work with me.

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And I know they will.

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succeed in whatever they do in life, particularly in legal practice.

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And I think probably we'll want to have the oath administered for all together.

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And so I would ask Judge Stoll to make her motion.

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OK, thank you.

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I move for the admission of John Yang, who is a member of the Bar and is in good standing with the highest court of New York.

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I have knowledge of his credentials and am satisfied that he possesses the necessary qualifications.

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I'm aware of John's credentials and qualifications because he's done an excellent job serving as my law clerk for the past 15 months.

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John has been reliable, talented, and hardworking, and a joy to have in chambers.

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He's not only been dependable as a source for teaching difficult scientific subject matter, but also as a source for making a good, strong cup of coffee.

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He has also demonstrated wise judgment in the selection of his fiance.

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I will solicit my colleague.

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Shall we grant Judge Stahl's motion?

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I'm in favor.

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And would you preside over the motion that I have made?

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Do you approve Judge Laurie's motion?

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I wholeheartedly agree with Judge Laurie.

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OK.

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As the presiding judge over Judge Laurie's motion,

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That motion is granted.

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Thank you.

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Will the applicants please approach the clerk to take the oath of office?

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Please raise your hand.

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Through you solemnly swear of honor, that you will comfort yourself, the attorney, and counsel of this

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Congratulations to you all, and welcome to the bar.

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And I will just finally make one note that Judge Stoll and I will be participating in another ceremony regarding Audrey and John later in the year, one of much greater consequence.

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And I need to say no more.

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We have four cases this morning.

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All patent cases, two from the patent board and two from the district court.

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First one is Henny Penny Corporation versus Flymaster, 2018, 1596.

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Mr. Sokol, who's been waiting patiently, poised.

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I'm here representing Henny Penny, the appellant and the petitioner in the IPR.

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May it please the court, the board made two critical errors in this case, among others.

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First, it erroneously considered the obviousness of only physically substituting

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the censor of Iwaguchi for the censor of Kaufman.

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And its reasoning was that that was the only thing that the petition argued.

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But the petition clearly argued more than that.

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It argued a more general obviousness issue

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And that is that it would be obvious to use Kauffman or another sensor in Kauffman that measures TPMs because Iwaguchi teaches that it's desirable to use TPMs to accurately and most efficiently measure the oil degradation

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in a friar system.

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I have two questions for you.

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First of all, what is the standard of review that would apply to this question?

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I mean, it seems to me it's a waiver issue, and so therefore, abuse of discretion would be the standard that we would apply.

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Well, this Court has said in the Erickson case that it is an abuse of discretion standard.

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I think that's really questionable because it's tantamount to

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in district court, which would be a motion to dismiss that is reviewed de novo.

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But under the present law in this court, it is an abusive discretion standard.

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And then my second question to you is, where is it that the reference says that the measuring of TPMs is efficient?

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Because I don't think the reference actually says why you would want to do it.

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Paragraphs three and four of Iwaguchi, Your Honor.

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And I can read you that language.

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This is in the appendix at 715.

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And I'll just read the pertinent parts of paragraphs three and four.

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Paragraph three, known standards of analytical values of such oils and fats include acid value, peroxide value, and polar compounds.

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And in fact, Kaufman uses peroxide and acid values.

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It also discloses polar compounds, but not expressly in connection with fryer oil.

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Then paragraph four says.

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Mr. Sokol, combining Kaufman and Iwaguchi has certain problems, which the board recognized relating to temperature, right?

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That substantial evidence supporting its decision.

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No, I don't think so, Your Honor.

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First of all, the cooling means are not part of the sensor.

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And I'm sorry, I didn't.

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But you can read paragraph four.

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which really talks about safety and that it's the gold standard in most of Europe because the other two parameters are inferior and have serious problems.

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So that's really the motivation.

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And Judge Lurie, yeah, the problems.

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The problems were in connection with physical substitution.

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of one censor for the other.

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That didn't address the broader argument that this very strong motivation that you get from paragraphs three and four of Iwaguchi to use TPMs and not peroxides and acids has no impact on that whatsoever.

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And even physical substitution would have been obvious.

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There's a very high level of skill in the art in this case.

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and which was not even contested by Freymaster.

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What about the secondary considerations?

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There was praise in the industry, awards?

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There is evidence of praise.

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And the case law of this court has said that when you have pretty strong evidence of obviousness, and here I maintain it's overwhelming,

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that the secondary evidence of praise is just about the weakest you can have.

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Even the board here found that there was no substantial need, unfilled need, for the invention, the claim subject matter, because it was satisfied by Iwaguchi and Kaufman.

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is not really, it doesn't even have a nexus because the things that were praised are in both Iwaguchi and in Kaufman.

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And this court has said that you don't satisfy the nexus requirement if the thing that's being praised, or whatever the secondary consideration is, is found in the prior art.

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When the patent owner response explained how

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there would be all kinds of drawbacks and complexity in making the proposed combination contained in the petition.

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Right.

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On reply, did you supply any kind of evidence or expert declaration that would explain why, that would explain away whatever combinability problems related to complexity or anything else that's untrusted?

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Your Honor, again, the complexity went just to the physical substitution.

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And it was cooling means.

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The cooling means are not part of the sensor.

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So you could substitute the sensor.

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But obviously your combination to work and operate requires to compensate for the high, high heat that's now going to be used against Iwaguchi's sensor.

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And so your counter argument, I understand, is, well, you could just use a heat dissipator to deal with that.

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And you don't believe that it's as complex as the patent owners making that out to be.

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So what I'm trying to figure out is, did you supply an expert declaration or any evidence to that effect?

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I think the answer is no.

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Well, we have an expert declaration.

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That was attached to the petition.

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I'm asking about attached to your reply or anything else.

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Neither party has any evidence along those lines.

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It's pure conclusive speculation by both experts.

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But the cooling means is not part of the censor.

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Kaufman has a sensor that goes all the way up to 400 degrees centigrade.

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The operating temperature for the fryer is only 186 degrees centigrade.

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The references have overlapping temperature ranges.

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Even Iwaguchi says that you can use his sensor at 180 degrees centigrade.

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He just prefers a lower temperature.

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It's not a requirement.

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He prefers

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a lower temperature to enhance the life of the sensor.

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But he never says that it's necessary.

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In fact, he doesn't even mention the cooling means until claim six of Iwaguchi.

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And he doesn't even describe it in the 15th paragraph of the reference.

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And none of that takes away from, that all goes to the physical substitution.

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If the board was wrong in saying that the petition is limited to physical substitution, then the obviousness couldn't be clearer.

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You've got Kaufman, who measures conductivity and detects polar materials, but in connection with oils, that there's leakage from a cooling system that is polar, and it raises the conductivity

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of the oil.

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And then you've got Iwaguchi who says the acid values and peroxides that Kaufman says you can use in fryer systems are inferior.

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They have problems.

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They don't work.

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And people could get arteriosclerosis.

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and heartburn and serious diseases.

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But TPMs, it says, is the gold standard in most of Europe.

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And that's why you need to use TPMs when you're talking about fryer systems rather than other kinds of oil.

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And the motivation could not be stronger.

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But even physical substitution, I argue,

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would have been obvious, although the board was erroneous of limiting it to that as the issue.

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Because one ordinary skill in the art could use the censor of Iwaguchi.

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And in fact, the board relied on a single sentence in paragraph 250 of Bowser's declaration

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and the same language is in the petition, that said you can use a sensor in Kaufman that detects TPMs.

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And then he says in paragraph 250, you can use the sensor for greater accuracy and for most efficiency

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the processor and or sensor of Iwaguchi.

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Well, processor and or sensor means you can use the processor alone.

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Iwaguchi has a sensor and a processor and the sensor detects conductivity and the processor converts the conductivity

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into TPMs.

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Kaufman also has a sensor that measures conductivity.

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And he even says it detects polar materials.

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And if you physically substitute the processor, which that one sentence in paragraph 250 says, if you physically substitute just the processor and not the sensor of Iwaguchi,

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then you have it because that processor, both experts on both sides, testified that Kaufman's conductivity measurement is indicative of TPMs.

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And if you use a processor that calculates TPMs from conductivity, that would have been an obvious

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physical substitution.

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How do you respond on the waiver issue?

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How do we respond to the testimony that was pointed out or I shouldn't say testimony but the oral argument discussion that occurred at the PTAB where the PTAB judges repeatedly asked in the petition what was your position and the response reads to me as if they're saying it was just a swap and

[00:17:18] Speaker 02:
Why isn't that enough to support the board's reading of the petition and determination that any other kind of combination was waived?

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It's not a waiver because the petition speaks for itself.

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I've explained why the petition has the broader obvious and so argument.

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And if you look at those facts.

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And yet when the attorney at the board hearing was asked point blank about where is this argument, this broader argument about combining these two references, the attorney was only referring to his reply brief, not the petition.

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And the board circled back to that and confirmed with the attorney, it's just in the reply, right?

[00:18:06] Speaker 05:
And the attorney said yes.

[00:18:07] Speaker 05:
So at this point, what are we supposed to do with that in trying to, I don't know, resurrect something kind of cryptic in the petition when it appears to have been given away at the hearing?

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Well, it couldn't be waived at the hearing because it's in the petition.

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And he argued both at the hearing.

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He argued both obvious in his positions, substitution and the broader alternative argument.

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So he wasn't waving at the oral argument because he actually made that argument.

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The petition, as I said, speaks for itself.

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And he made ambiguous statements.

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He clearly made some statements that he didn't have to make.

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But the court should view with skepticism that there is a gratuitous waiver of something that's actually

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In the petition, the board itself cited the response to the petition where it said there was no accuracy mentioned anywhere in Iwaguchi.

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And that put the whole Iwaguchi disclosure into play.

[00:19:30] Speaker 01:
Mr. Sokol, you're just about through your time, including rebuttal.

[00:19:34] Speaker 01:
Why don't we hear from the other side, and we'll give you two minutes of rebuttal time.

[00:19:38] Speaker 01:
OK, thank you, Your Honor.

[00:19:42] Speaker 01:
Mr. Lloyd.

[00:19:54] Speaker 06:
Good morning, Your Honors, and may it please the Court.

[00:19:56] Speaker 06:
Joseph Loy on behalf of Freymaster.

[00:19:59] Speaker 06:
What we've heard this morning and what is evident from the briefs before this Court is that the appellant is trying to rehash factual determinations that were made by this Board in a well-reasoned 39-page opinion that walks through from the premise of the petition that one would substitute

[00:20:21] Speaker 06:
censors of Iboguchi within the system of Kaufman to reach the 691 claim patent.

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And by doing that, it walks through the arguments on motivations combined, the evidence presented on motivation combined, and additionally, the evidence on the secondary considerations.

[00:20:41] Speaker 01:
These references were pretty close, though.

[00:20:44] Speaker 06:
Whether the references were pretty close is not the question before this court.

[00:20:49] Speaker 01:
Just one switch, one change.

[00:20:50] Speaker 06:
Judge Laurie, the question before this court is the question that the board did interpret using the KRS standard, also using this court depressive.

[00:20:58] Speaker 06:
KSI?

[00:20:58] Speaker 06:
Pardon me.

[00:20:58] Speaker 06:
Your honor.

[00:20:58] Speaker 05:
Can you speak about paragraphs three and four of Iwaguchi?

[00:21:02] Speaker 05:
Sure.

[00:21:02] Speaker 05:
And explain away why what Mr. Sokol is pointing out is wrong.

[00:21:11] Speaker 06:
So the paragraphs in Iwaguchi that refer to why one would use TPM were analyzed by the board.

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That is a factual determination that is well within the stretch of the board.

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And the board looked to those facts in addition to larger facts.

[00:21:26] Speaker 05:
Well, can you go dig down a little deeper than that?

[00:21:29] Speaker 05:
I know the board addressed it, but I'm trying to understand what's the content of these two paragraphs in Iwaguchi.

[00:21:36] Speaker 05:
Sure.

[00:21:36] Speaker 05:
In Iwaguchi, Iwaguchi.

[00:21:37] Speaker 05:
I mean, there is an argument that it's saying,

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acid value, peroxide value, those aren't as reliable as what it wants to look at.

[00:21:50] Speaker 06:
TPMs so even if we took that as true We move that it says what it says it says what it says and we're not trying to reread the the paragraph But what we are doing and what we did before this board is we presented evidence that the reference as a whole looking at Iwaguchi in its entirety and the problems that Iwaguchi was confronting even when the goal was to use toter polar material as its mechanism for determining oil degradation and

[00:22:19] Speaker 06:
It then took a fryer system and inserted a diversion cooling sampling loop.

[00:22:25] Speaker 06:
And in that loop, for numerous reasons, you have oil cooled using a dissipator.

[00:22:31] Speaker 06:
The cooled oil is cooled for a reason.

[00:22:33] Speaker 05:
I'm just trying to understand.

[00:22:35] Speaker 05:
Let's just stick with paragraphs three and four.

[00:22:37] Speaker 05:
I mean, you're talking about something else now.

[00:22:40] Speaker 05:
Paragraphs three and four appear to be communicating that measuring TPMs is a better way of

[00:22:49] Speaker 05:
detecting the degradation of cooking oil than these other, measuring for these other values.

[00:22:56] Speaker 05:
Those values are what, in fact, is what Kaufman was measuring.

[00:23:01] Speaker 05:
So am I misreading paragraphs three and four when I see it communicating that to me?

[00:23:08] Speaker 06:
I think it is important that you read, Judge Shen, the entirety of the reference and not just those passages in isolation.

[00:23:15] Speaker 05:
OK, well, how about those passages in isolation?

[00:23:18] Speaker 05:
Am I reading them correctly when I say what I said?

[00:23:21] Speaker 06:
What we are not disputing is that the paragraphs read

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precisely what they say.

[00:23:25] Speaker 05:
Okay.

[00:23:26] Speaker 05:
So what else in the reference when you say, let's read Iwaguchi as a whole, that somehow Iwaguchi somehow walks away from what it communicated in paragraphs three and four?

[00:23:39] Speaker 06:
The point is not necessarily that it walks away.

[00:23:41] Speaker 06:
The paragraphs are there.

[00:23:42] Speaker 06:
It says if we're going to use this as an approach, which is we're going to measure total polar material, this is the system that will achieve that result.

[00:23:51] Speaker 06:
And in this system what we have is we have

[00:23:54] Speaker 06:
It is clear as day in this representation that you have to lower the temperature in order to not expose the oil to prolonged periods of heat, which will degrade the oil, to cool the oil such that the sensor itself, which is measuring TPM, is not being exposed to scalding hot oil to damage the sensor, also to ensure that you're getting

[00:24:20] Speaker 06:
within the temperature range that is prescribed by the conversion table, that you're not outputting an error message.

[00:24:26] Speaker 06:
So all of those statements in Iwaguchi are statements that the board considered in the totality when they were considering the petitioner's argument that one would do the substitution.

[00:24:37] Speaker 06:
Now, the argument we heard from the petitioner again and again is one could.

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But that is not the question before the board or this court.

[00:24:44] Speaker 06:
It is whether one would be motivated and one would expect to achieve results out of that.

[00:24:53] Speaker 06:
And the board itself determined that that was not fact.

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And this court, as a court of review of those factual findings, owes deference to the findings of the board.

[00:25:03] Speaker 06:
Now, we agree with our friends on the other side, to Judge Spill's question, that on the waiver issue, that this is a abuse of discretion standard.

[00:25:11] Speaker 06:
There is no doubt about that.

[00:25:13] Speaker 06:
And the board was well within its discretion under the requirements of 312 that the petition must set forth with

[00:25:21] Speaker 06:
particularity, the basis for the grounds on which it is moving.

[00:25:25] Speaker 06:
This board determined that that was a substitution argument, and the petitioner again and again affirmed those results.

[00:25:33] Speaker 06:
And in its well-reasoned opinion, reached its conclusions.

[00:25:37] Speaker 02:
And Judge Laurie, I- How do you respond to the point that the petition stands on its own, and that we should just look at the petition?

[00:25:47] Speaker 02:
And the language in the petition is,

[00:25:50] Speaker 02:
more debatable as to whether it's proposing an actual substitution.

[00:25:56] Speaker 02:
Do you think the board should be able to ask counsel what the petition says and have that be held against counsel?

[00:26:01] Speaker 06:
I think that the board is charged under the statute to determine what is in the petition.

[00:26:07] Speaker 06:
And the predicate of that is that the petitioner must factually state forward in an articulate and in specific means what not only its arguments are, but what evidence it has to support that.

[00:26:19] Speaker 06:
And then when the board is issuing its institution decision, the board has the obligation to explain why it's instituting, which this board did with clarity.

[00:26:28] Speaker 06:
And although the petitioner sought rehearing on the institution decision, it did so on grounds one through five, not ground six, which is the ground that was instituted on.

[00:26:39] Speaker 06:
So there was no point at which, in that rehearing motion, that the petitioner contended that the board got it wrong there.

[00:26:48] Speaker 06:
And then when it became apparent that petitioner was trying to inject new arguments that had not been made or that were not instituted on, they confirmed repeatedly on this record that the position that the board took was the correct one.

[00:27:02] Speaker 06:
And that should be affirmed because that certainly was not an abuse of discretion, Your Honor.

[00:27:07] Speaker 06:
And I'll take Judge Laurie's advice from yesterday that you'll never lose points from conceding time unless this board has any additional questions for me.

[00:27:15] Speaker 06:
I will surrender the rest of my time.

[00:27:17] Speaker 01:
Thank you, counsel.

[00:27:19] Speaker 01:
Mr. Sokol has a couple of minutes of rebuttal time.

[00:27:25] Speaker 03:
I'm sorry, Your Honor.

[00:27:27] Speaker 01:
You have a couple of minutes of rebuttal time if you wish to utilize them.

[00:27:33] Speaker 03:
Yes, Your Honor.

[00:27:46] Speaker 03:
OK.

[00:27:48] Speaker 03:
My opponent said that the petition said could rather than would.

[00:27:54] Speaker 03:
If you read all of the paragraphs in context, 246, I'm talking about appendix 883 and 884 of the Declaration of Bowser, 246 said that centers capable of measuring data indicative total polar materials are known in the prior art.

[00:28:17] Speaker 03:
skilled in the art could readily adapt such sensors for use in Kaufman's system.

[00:28:22] Speaker 03:
But then he explained why they would want to.

[00:28:25] Speaker 03:
In fact, he said could if they desired to measure total polar materials.

[00:28:33] Speaker 03:
The same language appears in the petition, Your Honor.

[00:28:39] Speaker 03:
The petition says, could have modified the Coffman system.

[00:28:42] Speaker 03:
The petition is Appendix 99 to 100.

[00:28:46] Speaker 03:
You'll find the same language.

[00:28:48] Speaker 03:
I see, could have.

[00:28:50] Speaker 03:
Right, could have.

[00:28:52] Speaker 03:
If desired to measure total poll and materials, and then the subsequent paragraphs show why one

[00:28:59] Speaker 03:
would have wanted to or desired to measure total polar materials, and therefore would have readily adapted the sensor to measure total materials.

[00:29:12] Speaker 03:
The board focused just on one single sentence instead of reading these in context.

[00:29:16] Speaker 03:
So in 248, Iwaguchi provided, and I'm reading the declaration now, Iwaguchi

[00:29:26] Speaker 03:
further provides for detecting the amount of polar compounds for the purpose of estimating the degradation state of cooking oil.

[00:29:35] Speaker 03:
Thus, one skilled in the art would have understood that it was desirable in the field of cooking oil quality to provide a sensor that evaluates total polar compounds to most efficiently accomplish this task.

[00:29:51] Speaker 03:
That's an argument of general obviousness.

[00:29:58] Speaker 02:
Mr. Sokol, I want to ask you another question, which is earlier you had directed us to paragraphs three and four of the reference.

[00:30:07] Speaker 02:
But I don't see that part of the reference being cited in the petition.

[00:30:14] Speaker 02:
Am I missing that?

[00:30:16] Speaker 03:
The reference cites Iwaguchi.

[00:30:19] Speaker 02:
It doesn't say where to look.

[00:30:21] Speaker 02:
It doesn't rely on paragraphs three and four for motivation to combine.

[00:30:25] Speaker 02:
Instead, it relies on the notion that it would be more accurate.

[00:30:30] Speaker 03:
More accurate and more efficient, yes.

[00:30:34] Speaker 03:
And the reason, the basis for that is what's in paragraphs three and four.

[00:30:40] Speaker 02:
How does the board know that the basis for that is what's in paragraphs three and four if it's not identified in the petition?

[00:30:45] Speaker 03:
It is not cited expressly in the petition.

[00:30:49] Speaker 03:
If you read Iwaguchi, then you'll see that that's where it is.

[00:30:51] Speaker 03:
This is just like the Erickson case, where this is just an expansion.

[00:30:55] Speaker 03:
Erickson versus Intellectual Ventures, Roman numeral one, where the court remanded because the board refused to consider an argument saying it wasn't in the petition.

[00:31:08] Speaker 03:
And this court said that was error because it was essentially the same thing.

[00:31:13] Speaker 03:
that was raised later on.

[00:31:15] Speaker 03:
There was no new reference that had a significantly different point, and that it was simply an expansion that was permissible that the board had to permit.

[00:31:31] Speaker 01:
Thank you.

[00:31:32] Speaker 01:
Thank you, Mr. Sokol.

[00:31:33] Speaker 01:
As you can see, your time has expired.

[00:31:36] Speaker 01:
The case is submitted.

[00:31:38] Speaker 03:
Thank you, Your Honor.