[00:00:00] Speaker 02: Thank you, Your Honors, and may it please the Court. [00:00:03] Speaker 03: In finding no motivation to combine, either can they... Mr. Sears, I just want to come back to some things you said in your briefs in this case. [00:00:15] Speaker 03: On page two of the gray brief, you say that Oyster has asserted the 952 patent against over nine different companies over the past four years. [00:00:28] Speaker 03: What's the status of those cases? [00:00:32] Speaker 02: Your Honor, I believe for the 952 patent, those cases are all concluded. [00:00:38] Speaker 02: I don't think there's, unlike the 898 patent in the prior case, I don't think that there's an existing case with the 952 patent. [00:00:46] Speaker 03: Okay. [00:00:46] Speaker 03: On page four of the brief, you say Oyster's strategy is to seek dismissal of this appeal on standing grounds and then turn around and sue appellant. [00:00:56] Speaker 03: Oyster's counsel told you that? [00:00:59] Speaker 02: No, Your Honor. [00:01:00] Speaker 02: Again, we were saying what our interest was. [00:01:06] Speaker 03: I'm making a point about not speculating. [00:01:08] Speaker 03: Go ahead. [00:01:09] Speaker 02: Well taken, Your Honor. [00:01:11] Speaker 02: Thank you. [00:01:12] Speaker 02: Unless there are any other questions about standing, proceeding to the merits, with the board finding that there's no motivation to combine either Knader or Bausch with Schneider, [00:01:26] Speaker 02: The board applied an improper, obvious analysis that limited Schneider to one aspect of its invention and provided no rationale for how that obviated our evidence of motivation to combine. [00:01:39] Speaker 02: So again, taking a step back, Canadian Bouch [00:01:42] Speaker 02: disclose all the elements of the challenge claim except for the control circuitry including a digital analog converter for altering the phase of the phase modulator. [00:01:53] Speaker 02: Now in the petition, we provided evidence that a person with an ordinary skill in the art would be motivated to use Schneider's MZ modulator and control algorithm to implement the phase modulator that's disclosed in Canada and Bausch. [00:02:06] Speaker 02: In particular, the benefits of... Yes, Your Honor. [00:02:10] Speaker 03: Edgewallet. [00:02:11] Speaker 03: On page 25 of the GRADE brief, you say, and I'm quoting, even if Schneider's control algorithm would not run while converting intensity modulation values to phase modulation values, with Canada and Bell, I'm adding a little bit in there, petitioners showed that a person having ordinary skill in the art would have combined the references. [00:02:36] Speaker 03: Did Schneider's control algorithm run? [00:02:41] Speaker 02: Your Honor, what Schneider says is Schneider doesn't ever say that don't ever operate the control algorithm unless you are also transmitting data at the same time. [00:02:54] Speaker 02: In fact, Schneider teaches running its control algorithm and then powering down. [00:03:00] Speaker 02: Once you get the settled values, you power down for extended periods of time. [00:03:03] Speaker 02: So it clearly contemplates that you're going to be transmitting data and not running the control algorithm. [00:03:09] Speaker 02: What the board focused on, and again, this is to take a step back, this is not a claim, a limitation of the challenge claim here, but what the board said was, you know, even though there's no dispute that you could use Schneider's control algorithm and its MD modulator for phase modulation, you could do that, no dispute there. [00:03:31] Speaker 02: The board didn't dispute that you still get the benefits of compensating for aging, environment, temperature, but the board said, [00:03:39] Speaker 02: when using it as a phase modulator, Schneider's control algorithm would not run during data transmission. [00:03:44] Speaker 02: And this conflicted with this one aspect of Schneider's invention. [00:03:48] Speaker 02: And in making that finding, what they were relying on was a statement in Schneider's provisional application. [00:03:54] Speaker 02: And that statement says one aspect of this invention is that the algorithm for non-disruptively optimizing the bias set point in a system where there is normal data flow through the advice. [00:04:09] Speaker 02: So Schneider doesn't say never ever run the control algorithm unless you're also transmitting data. [00:04:16] Speaker 02: What it does say is you want to, you want to be non disruptive. [00:04:20] Speaker 02: That's what it says in its, in its, um, in, in its provisional. [00:04:24] Speaker 02: So our, our point is that the, the board aired for three reasons. [00:04:28] Speaker 02: One Schneider's not limited to operating its control algorithm during data transmission. [00:04:33] Speaker 02: But even if you find that it, that it is limited to that, [00:04:36] Speaker 02: Then what you're talking about is one aspect of Schneider's invention, as its provisional says. [00:04:43] Speaker 02: So it's error not to consider Schneider's other teachings, including its expressed teachings about the stability benefits you would get by using its control algorithm. [00:04:54] Speaker 02: Yes, Your Honor. [00:04:57] Speaker 03: 48 in the blue brief, footnote 10. [00:05:00] Speaker 03: You say, during oral argument, one board member's questioning reflected in an evaluation of Schneider [00:05:06] Speaker 03: in comparison to a hypothetical phase modulation reference that might be more desirable. [00:05:13] Speaker 03: What's the purpose of that footnote? [00:05:15] Speaker 03: What does it prove? [00:05:17] Speaker 02: Your Honor, what we, again, what we were saying is there's no dispute you could use this for phase modulation and you'd get those benefits. [00:05:25] Speaker 02: You have to do a simple mathematical conversion in order to do that, in which point data would not run for a very brief period of time. [00:05:35] Speaker 02: But you can still get all these benefits. [00:05:38] Speaker 02: And so what the point of the footnote is this court has made clear that when you're looking at our obviousness combination, you're not looking for the most desirable combination or the most preferable one. [00:05:52] Speaker 02: And even if there is some conflict with one aspect of the prior art reference, [00:05:58] Speaker 02: That doesn't necessarily obviate motivation to combine. [00:06:02] Speaker 02: So this is just the point that it looks like what the board was doing was saying, it looks like there's this conflict with this non-claimed feature. [00:06:11] Speaker 02: Yes, Your Honor. [00:06:12] Speaker 03: It seems that we were relying for motivation to combine. [00:06:16] Speaker 03: On Dr. Blumenthal, on page 50, he's your expert and you say, he substantiated that a person having ordinary skill in the art would have been motivated to combine. [00:06:28] Speaker 03: Was there any reason the board had to believe his statement? [00:06:36] Speaker 02: No, Your Honor. [00:06:37] Speaker 02: Of course, the board can weigh the testimony. [00:06:41] Speaker 02: Our point here is that we had submitted motivation combined based on the specification as well. [00:06:47] Speaker 02: The specification says that Schneider, the specification of Schneider says you get these stability benefits. [00:06:54] Speaker 02: So there's no showing the board never explained why this purported conflict with one aspect of Shire's invention would suddenly obviate all of the other benefits that Schneider itself expressly discloses. [00:07:09] Speaker 02: There's no showing that any purported disruption overcomes the stability benefits. [00:07:14] Speaker 02: There's no showing or evidence that the 952 is concerned with this functionality. [00:07:19] Speaker 02: It didn't claim it. [00:07:20] Speaker 02: All it says is, [00:07:21] Speaker 02: we're claiming a digital analog converter for use with a phage modulator. [00:07:26] Speaker 02: So, you know, even if the board found that this was some sort of important feature, even though it's not claimed, they should have weighed this against the stability benefits of Schneider and explained why this non-simultaneous operation would somehow outweigh those benefits. [00:07:43] Speaker 02: But when you look at the final decision, there's nothing there about why it would outweigh [00:07:48] Speaker 02: the benefit you get by using Schneider's control algorithm for phase modulation? [00:07:53] Speaker 03: You say at page 53 that it's undisputed that a person having ordinary skill in the art could have modified Schneider's control algorithm to modulate phase with a reasonable expectation of success. [00:08:08] Speaker 03: How is that undisputed? [00:08:10] Speaker 03: If the board made no findings regarding a reasonable expectation of success, an oyster question whether your combination would result in a [00:08:18] Speaker 03: reasonable expectations of success, how is that undisputed? [00:08:24] Speaker 02: Your Honor, if you look at Appendix 37, you'll see on the first paragraph in the second sentence, this is the board's finding saying, petitioner has shown [00:08:46] Speaker 02: that a person-oriented skill art could have modified Schneider's control algorithm to operate with Keneda's phase modulation. [00:08:52] Speaker 02: So it says, and then if you look at appendix 32, the board lists the facts that it determined were undisputed. [00:09:06] Speaker 02: And number two on that is an MZ modulator could be used to modulate either intensity or phase. [00:09:14] Speaker 02: So the board is saying, yes, you okay, you've shown that a person with a skill in the art could have used Schneider to phase modulate. [00:09:24] Speaker 02: But there's this one aspect of Schneider that you that's not satisfied in the combination of running the control algorithm while you're transmitting data. [00:09:35] Speaker 02: So we're looking at Schneider and we're saying, [00:09:37] Speaker 02: There's a conflict there, so that's why we've decided you haven't shown motivation combined. [00:09:42] Speaker 02: But the board, again, never went back and said, yeah, there's this conflict, and here's why it outweighs the stability benefits you're going to get by using Schneider's control algorithm. [00:09:53] Speaker 02: It never explained why that is. [00:09:55] Speaker 02: It just disregarded or obviated the motivation combined we present as disclosed in Schneider in favor of this non-claimed feature [00:10:05] Speaker 02: of one aspect of Schneider's invention. [00:10:08] Speaker 02: And so that's why, that's what we're saying, Your Honors. [00:10:13] Speaker 03: Your time's up, if you want to, or let me put it this way, you're into your rebuttal time. [00:10:20] Speaker 02: Okay, Your Honors, if there's no more questions, I'll reserve the rest of my time. [00:10:24] Speaker 00: Councilor, this is Judge Stoll, I have a question. [00:10:27] Speaker 00: Why I read this board's decision on page 837 differently than you, [00:10:33] Speaker 00: I thought that what they were saying was, at most, you've shown that one could have made the modification you proposed, but not that one would have, and that they were particularly relying on expert testimony to support their conclusion, which is a factual conclusion. [00:10:48] Speaker 00: Why wasn't their reliance on the expert testimony, contrary to your expert's testimony, sufficient? [00:10:56] Speaker 02: Because, Your Honors, they never, the board never addressed [00:11:02] Speaker 02: the intrinsic evidence or the evidence that's directly in Schneider that says this control algorithm will give you these stability benefits. [00:11:12] Speaker 02: And in the light of the fact that it's undisputed that you could use it with the phase modulator of Canada and Bausch, what we're saying is the board essentially took that motivation to combine off the table and said, [00:11:30] Speaker 02: in light of this non-claim feature, why would you have used it? [00:11:34] Speaker 02: But the board never addressed the motivation combined we did present. [00:11:38] Speaker 02: It simply [00:11:39] Speaker 02: disregarded it without weighing the benefits versus what it saw to be based on its review of the expert testimony, what it saw to be a problem in conflict with this one aspect of Schneider. [00:11:53] Speaker 02: We're saying the board did not err by not giving due consideration to the other teachings of Schneider about stability benefits and by explaining why those suddenly are lost because of this non-claimed feature of Schneider. [00:12:12] Speaker 02: And if there are no more questions, I'll reserve the rest of my time. [00:12:14] Speaker 02: Thank you, Your Honors. [00:12:27] Speaker 02: Mr. Helgi? [00:12:27] Speaker 04: Good morning, Your Honor. [00:12:29] Speaker 04: May it please the Court? [00:12:31] Speaker 04: Once again, Your Honor, the Board's decision affirming the patentability of the challenge claims is not [00:12:38] Speaker 04: tainted by any legal error and, once again, is supported by substantial evidence. [00:12:42] Speaker 04: Your Honor, I'd like to begin by talking about Schneider. [00:12:45] Speaker 04: Schneider discloses a closed-loop algorithm for adjusting the bias and gain for a Moxender modulator operating in an intensity mode. [00:12:55] Speaker 01: Mr. Helge? [00:12:57] Speaker 01: Yes, Your Honor. [00:12:58] Speaker 01: Can you just speak to your opposing counsel's argument this morning that the board failed to weigh [00:13:07] Speaker 01: the stability benefits offered by Schneider's scheme against whatever problems the board saw in making the combination between Schneider and either of the primary references? [00:13:22] Speaker 04: Certainly, Your Honor. [00:13:23] Speaker 04: Well, Your Honor, I think the board absolutely recognized what Schneider teaches as advantages, but understood that those advantages related to environmental stability and tuning were uniquely [00:13:37] Speaker 04: directed to the exploitation of the transfer curve for a mock vendor modulator operating in the intensity mode. [00:13:46] Speaker 04: Really, what opposing counsel is saying when they say that the board didn't give that evidence any credit, what they're really asking this court to do is to not defer to the board's fact finding, which considered all of the reference, or the reference as a whole. [00:14:02] Speaker 04: you know, when Schneider talks about a closed loop system and operating with intensity modulation, those factors are actually what gives Schneider the advantages that petitioners were trying to achieve and incorporate into the Bauch and Canada references. [00:14:21] Speaker 04: But as your honors can see, once we get into the reply, which this combination in this discussion wasn't included in the petition, once we get into the reply, we see the degree to which Schneider has to [00:14:32] Speaker 04: in effect, be broken. [00:14:34] Speaker 04: It has to be undone. [00:14:35] Speaker 04: All the features of Schneider that give it those advantages that Petitioner argued for and the board recognized have to be undone because Schneider, according to Petitioner's replies, has to be shut up. [00:14:48] Speaker 04: There's actually a sequence of events that Petitioner came forward with in their replies as how Schneider could feasibly be operated. [00:14:56] Speaker 04: Now Judge Wallach was directly on point in terms of what Petitioner said or what Lomitza said in their [00:15:02] Speaker 04: in their briefs, namely that there was a undisputed finding about reasonable expectation of success. [00:15:08] Speaker 04: And in fact, there is a dispute on that point. [00:15:11] Speaker 04: As Oyster raised in its red brief at page 56 in the footnote, in fact, Oyster did raise questions of whether this modification, this extensive set of tests that petition would have to take to get Schneider's possibly to operate with Bausch and Canada, there were questions whether [00:15:32] Speaker 04: it would actually be effective. [00:15:34] Speaker 04: Again, because Schneider is directed towards the intensity modulation mode of a Mach-Zehnder modulator, getting it to work with phase modulation is tricky, and what partition is proposed, for example, the conversion of the bias point simply by multiplying by two, everything that Schneider is designed to do is designed to recognize that a Mach-Zehnder that it's working with is not an ideal Mach-Zehnder, it's not one that [00:16:01] Speaker 04: is operating in perfect conditions and is entirely stable and never changes. [00:16:05] Speaker 04: In fact, that's the whole purpose of the algorithm. [00:16:08] Speaker 04: So when they simply take the output from the control algorithm, the settled points for bias and gain that have been run while it's in its intensity modulation mode, once they multiply it by two, in essence, [00:16:24] Speaker 04: they're trying to convert Schneider's recognition for environmental changes and stability benefits and they're undoing those because they're simply applying a mathematical number that may or may not work. [00:16:37] Speaker 04: In fact, as Oyster showed in some of its papers to the board, simply multiplying by two could actually increase the error rather than reduce it because we're talking about a curve and shifting of a curve and that sort of thing, Your Honor. [00:16:51] Speaker 04: Your Honors, don't need to reach that question about the reasonable expectation of success because the board recognized, and in fact here in its opening brief, Lumentum admits that it was not clear, at minimum, it was not clear in its petition about whether the data would be run or stopped when Schneider is combined with Bausch and Canada for transmitting phase-modulated data. [00:17:16] Speaker 04: That information only came out in reply, and in fact, [00:17:20] Speaker 04: One detail here that's important, and we pointed this out in our red brief at the bottom of page 42 and on top of page 43, after petitioners filed their petition and we were able to depose Dr. Blumenthal at appendix pages 27 and 11 and 27 and 14, Dr. Blumenthal said that he hadn't gone through the process of figuring out how to make Schneider work with Bausch and Canada. [00:17:44] Speaker 04: He hadn't done what he called inventive work. [00:17:47] Speaker 04: So that inventive work only comes up for the first time in reply. [00:17:51] Speaker 04: As a separate aside here, very quickly your honor, much of the, well I shouldn't say much, some of the blue brief does raise the issue that the board failed to consider petitioners' reply theories, and that's simply incorrect. [00:18:06] Speaker 04: The pages that the, or the discussion that momentum provides about their replies were fully considered. [00:18:13] Speaker 04: In fact, the board's findings as to this [00:18:17] Speaker 04: this extensive list of changes that would have to occur to Schneider, the board's list of findings regarding those is premised on what petitioner first raised in its reply. [00:18:27] Speaker 04: And we address that issue at our red brief pages 60 to 62. [00:18:31] Speaker 04: There is no argument that petitioners or lumentum presented first on the reply that the board failed to consider. [00:18:41] Speaker 04: One other point here very quickly, Your Honor, is simply lumentum in their brief, they do not [00:18:47] Speaker 04: give any deference to the board's fact finding. [00:18:50] Speaker 04: I believe perhaps it was Judge Chen who suggested that why isn't Oyster's evidence enough? [00:18:55] Speaker 04: And in fact, it is. [00:18:56] Speaker 04: The board had substantial evidence to reach its findings that a person of ordinary skill in the art would not have combined Schneider's closed-loop intensity modulation scheme into Bausch and Keneda's phased modulation schemes absent impermissible hindsight. [00:19:11] Speaker 04: That finding is supported by substantial evidence, and the board's [00:19:16] Speaker 04: Legal conclusions were not, not erroneous. [00:19:20] Speaker 04: They were performed properly. [00:19:21] Speaker 04: And, uh, if your honors have no other questions, I will feed the remainder of my time. [00:19:29] Speaker 03: Well, it appears there are no other questions. [00:19:31] Speaker 03: So let's hear the rebuttal. [00:19:37] Speaker 02: Thank you, Your Honors. [00:19:38] Speaker 02: Just on the point about the arguments made in the petition and the replies, the petition was very thorough, supported by pages of expert testimony, where Dr. Blumenthal walked through how you would use this with phase modulation. [00:19:55] Speaker 02: And at appendixes 1045 to 1046, this is in paragraphs 160 to 162 of his declaration, he tells you exactly how you do it. [00:20:05] Speaker 02: you run Schneider's control algorithm and the bias subroutine finds the peak and the gain subroutine finds the peak to null. [00:20:13] Speaker 02: And then in 162 he goes on and say how you would do this, how you would then convert it to phase modulation as you would essentially apply twice the voltage, twice the swing. [00:20:22] Speaker 02: And so when they said in their pattern owner response, well you don't have nine simultaneous operation [00:20:29] Speaker 02: The replies provided further context over why this would not be disrupted, why it was just a simple calculation. [00:20:36] Speaker 02: And just for context, you know, we're talking about very, very, very minute millisecond level period of time where you're doing the conversion. [00:20:48] Speaker 02: Now, I know that there was the point about the conflicting expert testimony. [00:20:54] Speaker 02: Our point is that [00:20:55] Speaker 02: even if the board decided that yes, I don't believe petitioners expert, I think that this would be non disruptive. [00:21:05] Speaker 02: I think it wouldn't comport with this one aspect of Schneider. [00:21:10] Speaker 02: And so I don't I don't I'm not going to credit that evidence, even if that's supported. [00:21:14] Speaker 02: Then you still have the situation where [00:21:18] Speaker 02: There's a conflict with what Schneider's saying, one of his benefits. [00:21:21] Speaker 02: There's no evaluation of why this millisecond delay would take away the substantial benefits of providing compensation for environmental noise, et cetera. [00:21:33] Speaker 02: The stability benefits, what we showed is you could run this, you could power down the control algorithm, and then you keep going and you've got the stability benefits. [00:21:45] Speaker 02: On the point about, you know, that this would be an undoing of Schneider and our expert hadn't gone through the inventive work. [00:21:57] Speaker 02: Again, the board wasn't relying on any of those findings. [00:22:02] Speaker 02: It just pointed to the non-simultaneous operation, that one aspect that was in Schneider's provisional. [00:22:08] Speaker 02: And that's what it based its decision on. [00:22:11] Speaker 02: So you won't find any discussion about ideal conversion for an ideal modulator or anything like that in the board written decision. [00:22:17] Speaker 02: The inventive work point is this is something that's, again, unrelated to the board's decision. [00:22:24] Speaker 02: What happened was they said, well, [00:22:27] Speaker 02: you haven't shown that you're actually doing the, you're running the control algorithm while you're phase modulating. [00:22:36] Speaker 02: And we said, you don't have to do that. [00:22:38] Speaker 02: You can do the conversion to phase modulation and then you apply it and you're phase modulating with those stability benefits. [00:22:45] Speaker 02: So you don't have to do it at the same time. [00:22:48] Speaker 02: And Schneider says, you don't have to run your control algorithm at the same time. [00:22:51] Speaker 02: So it was consistent with Schneider. [00:22:53] Speaker 03: Okay, council, wrap it up. [00:22:56] Speaker 02: I'm happy to take any questions from Your Honors, otherwise I will rest. [00:23:05] Speaker 03: Okay, we're done. [00:23:07] Speaker 02: Thank you, Your Honors.