[00:00:00] Speaker 02:
We will have four cases on the calendar this morning.

[00:00:13] Speaker 02:
Two patent cases, one from the PTAB and one from the district court.

[00:00:18] Speaker 02:
Two cases in the court of federal claims, one of which is being submitted in the briefs and won't be argued in the veterans case.

[00:00:26] Speaker 02:
But first, we have one of these pleasant events, family events, one might say, and a member, one of our law clerks is becoming a member of the bar.

[00:00:42] Speaker 02:
And Judge Stoll is going to make a motion.

[00:00:44] Speaker 00:
Yes, I have an important motion today.

[00:00:46] Speaker 00:
Ms.

[00:00:48] Speaker 00:
Bayford, could you please rise?

[00:00:50] Speaker 00:
I am moving for the admission of Bethany Davey-Benford, who is a member of the bar and is good standing with the highest court of California.

[00:01:01] Speaker 00:
I have knowledge of her credentials and am satisfied that she possesses the necessary qualifications.

[00:01:08] Speaker 00:
I have had the pleasure to have Bethany serve as my law clerk for the last year and a half.

[00:01:13] Speaker 00:
Bethany is not only very talented and diligent and hardworking,

[00:01:18] Speaker 00:
but she's also a great joy to work with.

[00:01:21] Speaker 00:
She is kind-hearted and lively and has a great sense of humor.

[00:01:26] Speaker 00:
I have no doubt that she will be an excellent addition to our bar.

[00:01:32] Speaker 02:
Thank you, Judge Stoll.

[00:01:33] Speaker 02:
Judge Stoll's motions are usually very well taken, and I particularly like the reference to having a good sense of humor.

[00:01:42] Speaker 02:
Judge Chen, how do we vote?

[00:01:46] Speaker 04:
I vote to grant.

[00:01:47] Speaker 02:
I'm beaten to grant the motion.

[00:01:49] Speaker 02:
Would you please step up and take the oath?

[00:01:53] Speaker 01:
Do solemnly swear that you will support yourself as an attorney and counsel of this court, up right and according to law, and you will support the Constitution of the United States of America.

[00:02:04] Speaker 01:
Thank you.

[00:02:11] Speaker 02:
We will now proceed.

[00:02:14] Speaker 02:
with our usual business.

[00:02:19] Speaker 02:
First case is Nike versus Adidas with a small a.

[00:02:24] Speaker 02:
2019, 1262.

[00:02:27] Speaker 02:
Mr. Harris.

[00:02:38] Speaker 01:
Thank you, Your Honor.

[00:02:40] Speaker 01:
Good morning, and may it please the Court.

[00:02:43] Speaker 01:
The board committed three errors that warrant reversal.

[00:02:47] Speaker 01:
First, the board violated the APA's requirements of notice and opportunity to respond when it found claim 49 unpatentable on an argument that Adidas never raised and the parties never litigated.

[00:03:05] Speaker 01:
And instead, it based that finding on an argument that the board itself raised, addressed, and decided for the very first time in its decision on remand.

[00:03:17] Speaker 01:
Claim 49 requires, among other things, apertures formed by omitting stitches.

[00:03:24] Speaker 02:
What didn't you have adequate notice of an opportunity to respond to?

[00:03:29] Speaker 01:
Sure, Your Honor.

[00:03:31] Speaker 01:
The board based its unpatentability determination on the finding that omitting stitches to form apertures was a well-known technique in the art.

[00:03:45] Speaker 01:
And in the IPR proceeding below, Adidas did not argue that omitting stitches to form apertures was a well-known technique in the art.

[00:03:54] Speaker 01:
Instead,

[00:03:55] Speaker 01:
Adidas argued that the Nishida reference disclosed that limitation in Claim 49.

[00:04:02] Speaker 01:
That's at Appendix 1002.

[00:04:04] Speaker 01:
And in essence, and by the way, the board rejected that argument that was litigated by Adidas.

[00:04:13] Speaker 01:
In its final written decision on remand, the board found that Nishida does not disclose

[00:04:20] Speaker 01:
Apertures formed by omitting stitches as claimed in in 49 But the board didn't stop there like it should have instead the board went on and And we submit this is where the board aired the board went on and found that claim 49 was nonetheless obvious because Omitting stitches to form apertures was allegedly well known in the art didn't the board rely on Spencer for that teaching

[00:04:47] Speaker 00:
And Spencer was a prior reference that had been attached to the petition or maybe attached to the experts of report that was attached to the petition.

[00:04:57] Speaker 01:
That's correct Judge Soll.

[00:04:58] Speaker 01:
The board did rely on Spencer to support its conclusion that

[00:05:04] Speaker 00:
So is your argument that there was no notice that the board would be relying on Spencer?

[00:05:09] Speaker 00:
Or is your argument that you had no notice that the board was going to rely on the assertion that it was the omission of stitches is well known?

[00:05:18] Speaker 01:
The latter.

[00:05:19] Speaker 01:
Spencer was obviously part of the record below.

[00:05:22] Speaker 00:
But Adidas never argued, and the parties never litigated, whether- What about the fact that this court's opinion on remand said it may well be that the omission of stitches might be well known?

[00:05:33] Speaker 01:
Yeah, that's absolutely right.

[00:05:35] Speaker 01:
The court in the prior appeal did say... What did we mean by that?

[00:05:38] Speaker 01:
Well, so our interpretation is that this court said, we don't know why the board found Claim 49 unpatentable because the board didn't articulate its reasoning.

[00:05:50] Speaker 01:
So we're going to send this back to the board so that it can articulate its reasoning.

[00:05:54] Speaker 01:
And you speculate it that maybe the reason was that it thought omitting stitches to form apertures was a well-known technique in the art.

[00:06:02] Speaker 04:
Is it?

[00:06:04] Speaker 01:
No, it's not.

[00:06:04] Speaker 01:
And there's no record evidence that it's a well-known technique in the art.

[00:06:07] Speaker 04:
What about Spencer?

[00:06:08] Speaker 04:
There's Spencer.

[00:06:09] Speaker 01:
Right.

[00:06:09] Speaker 01:
So Spencer does not say that omitting stitches to form apertures is a well-known technique in the art.

[00:06:16] Speaker 00:
And moreover, there's absolutely... What if Spencer hypothetically taught, just assume for a minute, that it actually taught omitting stitches?

[00:06:24] Speaker 00:
Is it your position that just because Spencer teaches the element doesn't teach that it's well known?

[00:06:31] Speaker 00:
I'm just trying to make sure I understand your point.

[00:06:34] Speaker 01:
Well, so the first error, our point is that that issue was not raised by Adidas and it was not litigated.

[00:06:43] Speaker 01:
We had no opportunity.

[00:06:45] Speaker 01:
And when we went back on remand, the board did not reopen the record for additional evidence and argument.

[00:06:51] Speaker 00:
Do you think that the board could rely on references beyond what the petitioner cites, but that your concern is a lack of notice?

[00:07:01] Speaker 01:
Yeah, absolutely.

[00:07:02] Speaker 01:
The board can rely on references that are part of the record, provided that there's notice and opportunity to be heard.

[00:07:12] Speaker 04:
So I understand your argument that

[00:07:15] Speaker 04:
you had no idea that the final written decision could potentially result, could potentially rely on Spencer for teaching the creation of apertures by omitting stitches.

[00:07:28] Speaker 04:
And so therefore you didn't have an opportunity to address that potential finding because you didn't know it was even in the works that the board would unilaterally do that.

[00:07:38] Speaker 04:
What if hypothetically the board

[00:07:41] Speaker 04:
issued a notice 30 days before the oral argument, and in the notice said, I see something interesting on page 84 of Spencer that I would like both sides to file five-page briefs on within seven days, discussing whether or not page 84 of Spencer discloses creating apertures in material by omitting stitches, and then be prepared to discuss that oral argument.

[00:08:11] Speaker 04:
Do you think that would satisfy all of your APA concerns?

[00:08:15] Speaker 04:
Because it's in fact the board that first raised the issue, but assuming that Adidas in its five-page letter group said, why yes, page 84 absolutely does disclose that apertures can be created by omitting stitches.

[00:08:29] Speaker 04:
It was known in the art, and because it was known in the art, it was a known technique, and one of the ways to create an aperture is by omitting stitches, just as recited in claim 49.

[00:08:40] Speaker 04:
Would that satisfy all of your concerns?

[00:08:42] Speaker 01:
Well, certainly, Your Honor, I think in that scenario, we would have had notice that the board was going to raise it and we would have had an opportunity to respond.

[00:08:52] Speaker 01:
I think that that scenario would also conflict with what the Supreme Court tells us in SAS, where the Supreme Court said that it's the petitioner's contention, not the board's discretion.

[00:09:04] Speaker 04:
Right, but here we're dealing with a motion to amend, right?

[00:09:07] Speaker 04:
You were dealing with proposed substitute claims that at a minimum look different than the issued patent claims.

[00:09:14] Speaker 04:
And so the petitioner

[00:09:16] Speaker 04:
for those issued patent claims, of course, is serving as the architect of the case by filing a petition and to raising whatever arguments the petitioner wants to make to attack those issued claims.

[00:09:29] Speaker 04:
But you, by having filed a motion to amend to thereby alter and modify those claims, now have created something new.

[00:09:37] Speaker 04:
And so now we're going off track.

[00:09:40] Speaker 04:
And why couldn't the board identify something like this

[00:09:45] Speaker 04:
with them the petitioner, of course, coming forward with the burden of persuasion, having the board identify the issue, then go forward and comment on that.

[00:09:54] Speaker 01:
So the petitioner has an opportunity.

[00:09:57] Speaker 01:
After Nike filed its motion to amend, the petitioner had an opportunity to set forth its contentions on unpatentability.

[00:10:04] Speaker 01:
And the burden is on the petitioner to do that.

[00:10:06] Speaker 01:
And in fact, that's what Adidas did here.

[00:10:08] Speaker 01:
And Adidas argued that Nishida disclosed the limitation.

[00:10:12] Speaker 04:
I think you're drifting away from my question.

[00:10:15] Speaker 04:
My question is just a structural one.

[00:10:18] Speaker 04:
Is it your view that the board, if it sees something in the record,

[00:10:23] Speaker 04:
that teaches the limitation that you have added into a proposed substitute claim.

[00:10:31] Speaker 04:
Does the board have to sit silent about that and do nothing?

[00:10:34] Speaker 04:
And then if the petitioner just falls down and doesn't address it, then that's the end of that possible avenue for finding unpatentability?

[00:10:43] Speaker 04:
Or can the board identify it early enough in the case so that both sides can address that question?

[00:10:52] Speaker 04:
In the context of a motion to amend.

[00:10:54] Speaker 04:
And if the answer is no, why is the answer no?

[00:10:56] Speaker 01:
Well, if the board identifies an issue, notifies the party of the issue, and the context in which it's going to be litigated, I think that that would address the notice and opportunity to respond arguments that we're raising here in this appeal.

[00:11:10] Speaker 00:
You said earlier, I asked you if the board was allowed to look at prior earn outside of what the petitioner had identified in opposing a motion to amend, and you said that the board could.

[00:11:21] Speaker 00:
Are you changing your view on that?

[00:11:22] Speaker 01:
No, no, absolutely not.

[00:11:24] Speaker 01:
I think that the board can consider references that are part of the record as long as the parties are given, the patent owners given notice and an opportunity to respond to that.

[00:11:36] Speaker 00:
Now, I don't see this necessarily refuting your position here on notice, but I just want to know, did you seek re-hearing at the board level when you were provided with the final decision that identified the board's grounds for the first time?

[00:11:57] Speaker 01:
No, we did not.

[00:12:00] Speaker 01:
And we don't think we were required to either.

[00:12:03] Speaker 00:
Why didn't you?

[00:12:04] Speaker 00:
I mean, even if you're not required to.

[00:12:05] Speaker 01:
Well, the record had already been established.

[00:12:08] Speaker 01:
We went back on remand.

[00:12:09] Speaker 01:
And we knew that the burden was on Adidas to prove that claim 49 was unpatentable.

[00:12:16] Speaker 01:
The board did not reopen the record.

[00:12:19] Speaker 01:
We knew that there was no record evidence.

[00:12:20] Speaker 00:
I'm presuming, though, that you're saying that you don't think he would have been able to present new evidence, for example, explaining why the prior didn't teach the elementary claim 49.

[00:12:28] Speaker 00:
Correct.

[00:12:31] Speaker 01:
So in this legal error that we believe the board committed by not giving us notice and opportunity to respond, we believe led to the board's second error, which is there's no evidence, let alone substantial evidence, that supports the board's findings that omitting stitches to form apertures is a well-known technique

[00:12:55] Speaker 01:
in the art for the 011 patent.

[00:12:59] Speaker 01:
And for this issue, we think this court's Orinde versus Apple opinion is instructive.

[00:13:06] Speaker 01:
And in that case, the court cautioned that the general knowledge of a skilled artisan can't be used as a wholesale substitute for detailed analysis and evidentiary support, especially when the board is relying on the general knowledge of a skilled artisan.

[00:13:29] Speaker 00:
But wasn't it citing to a prior reference to support that contention of the general knowledge

[00:13:36] Speaker 00:
The board in our case?

[00:13:38] Speaker 01:
Yes, absolutely.

[00:13:39] Speaker 01:
The board cited to Spencer for its contention of the general knowledge, but the Orende case says that if the board's going to do that, there needs to be concrete evidence, like expert testimony.

[00:13:52] Speaker 00:
Why isn't the reference itself alone enough?

[00:13:55] Speaker 00:
I mean, Orende did not involve the board

[00:14:00] Speaker 00:
citing to a particular prior art reference to support its contention that a particular element was commonly known.

[00:14:07] Speaker 00:
It's very different when the board also cites a prior art reference, says this is commonly known as evidenced by a prior art reference.

[00:14:16] Speaker 01:
Well, and in this case, we submit that the prior reference that Spencer cited to, I mean that the board cited to Spencer, does not show that omitting stitches to form apertures is a well-known technique in the art, in the field of the 011 patent.

[00:14:31] Speaker 02:
Well-known or not, it's in the prior art.

[00:14:36] Speaker 02:
Even if it's not well-known, it's a reference.

[00:14:40] Speaker 02:
It's part of the prior art, talks about open work structure and empty needles.

[00:14:45] Speaker 01:
Yes, Your Honor, but it does not talk about omitting stitches or skipping stitches, and there was no record on this developed below.

[00:14:52] Speaker 01:
The parties didn't...

[00:14:54] Speaker 02:
an empty needle lead to skipping a stitch?

[00:14:58] Speaker 01:
No, no, not necessarily.

[00:15:00] Speaker 01:
That's the point, Your Honor.

[00:15:01] Speaker 01:
There was no record developed on this.

[00:15:02] Speaker 01:
There was no expert testimony.

[00:15:04] Speaker 01:
The portions of Spencer that the board cited to, the parties never addressed or litigated below.

[00:15:09] Speaker 01:
So what those portions of Spencer that the board cited to mean, we never had an opportunity to explain that.

[00:15:17] Speaker 02:
You're into your rebuttal time.

[00:15:20] Speaker 02:
You can continue.

[00:15:21] Speaker 01:
I'll reserve my time for rebuttal.

[00:15:23] Speaker 01:
Thank you, Your Honor.

[00:15:25] Speaker 03:
Good morning.

[00:15:32] Speaker 03:
Thank you, Your Honors.

[00:15:34] Speaker 03:
I want to just make clear what our position is vis-a-vis this issue.

[00:15:42] Speaker 03:
When you look at the briefing here, one of the points that we've made that Nike has not responded to is that this is a different context.

[00:15:49] Speaker 03:
This is a proposed substitute claim.

[00:15:52] Speaker 03:
This is not a typical IPR where there's claims beforehand, and the petitioner is shooting at issued claims.

[00:16:00] Speaker 03:
And as the Supreme Court says in SAS, the petition guides the subsequent litigation.

[00:16:06] Speaker 03:
And in aqua products, this court said the board has to evaluate proposed substitute claims in light of the entire evidentiary record.

[00:16:16] Speaker 03:
And we think that context is very important.

[00:16:19] Speaker 03:
The notice cases that Nike generally relies upon are all in the context of a set of issued claims.

[00:16:27] Speaker 04:
We also said that the burden of persuasion is assigned to the petitioner when it comes to these motions to amend.

[00:16:35] Speaker 03:
That's correct, Your Honor.

[00:16:36] Speaker 03:
You do.

[00:16:37] Speaker 04:
So necessarily, doesn't that mean that it's up to you to make the case for why the proposed substitute claims are unpatentable?

[00:16:45] Speaker 03:
Yes.

[00:16:46] Speaker 04:
And then let's assume for the moment you do nothing, right?

[00:16:52] Speaker 04:
Correct.

[00:16:52] Speaker 04:
Your opposition to the motion to amend is very, very flawed.

[00:16:59] Speaker 04:
And nobody could ever conclude that your arguments are persuasive.

[00:17:05] Speaker 04:
Are you saying in that context it's okay for the board on its own to go fishing around for the entire record and then finding a reference that you did not rely on to create a rejection of the proposed substitute claim and then use that and then explain it in the first instance at the end of the trial and a final written decision to find the proposed substitute claims to be unpatentable?

[00:17:33] Speaker 04:
How would that scenario be consistent with you meeting your burden of proof to find the claims unpatentable?

[00:17:46] Speaker 03:
So I'm going to break this into two parts.

[00:17:48] Speaker 03:
First, what the board can do, and second, the notice issue.

[00:17:52] Speaker 03:
And with respect to the board, what the board can do, we do believe

[00:17:56] Speaker 03:
that the board has the obligation under aqua products where both the majority opinion and the dissent agreed that it was up to the board to look at the entire record when examining proposed substitute claims.

[00:18:10] Speaker 03:
Because separate and apart from the burden that Adidas bore, the board and the patent office as an institution

[00:18:17] Speaker 03:
has the obligation to write a written decision about the patentability of the proposed substitute claims, which would never have been examined.

[00:18:25] Speaker 03:
And as the court grappled with in opera products, there are situations where petitioners don't care.

[00:18:32] Speaker 03:
that much about the substitute claim, or the petitioner is no longer in the case.

[00:18:36] Speaker 03:
And the board as an institution has an obligation to review the patentability of the substitute claim.

[00:18:44] Speaker 03:
So that's on the board.

[00:18:45] Speaker 04:
So that sounds incompatible with the idea that the burden of proof is assigned not to the board, but to the petitioner.

[00:18:55] Speaker 04:
Well, I guess you're saying there's actually two things going on.

[00:19:00] Speaker 04:
Yes, maybe the petitioner has a burden of proof, but at the same time, the board has its own obligation or opportunity to unilaterally do something free form outside and beyond what the petitioner argues.

[00:19:14] Speaker 03:
Well, I think that's a fair statement.

[00:19:16] Speaker 03:
And I would also, with respect to the petitioner in this case, I mean, candidly, Your Honor, I disagree with the premise of your conclusion.

[00:19:23] Speaker 03:
We did not do nothing.

[00:19:24] Speaker 03:
We had provided the Nishida reference.

[00:19:27] Speaker 03:
We had provided the space for reference.

[00:19:28] Speaker 04:
Let's assume for the moment that the arguments you made

[00:19:31] Speaker 04:
are not persuasive.

[00:19:32] Speaker 04:
Your reliance solely on the sheet to render Claim 49 unpatentable is no good.

[00:19:40] Speaker 04:
And so the only way to get to an affirmance is through what the board did, which was supplement your incomplete arguments with finding a reference that was in the record and fishing something out of that to then complete the analysis for unpatentability.

[00:20:01] Speaker 04:
I still don't see how that's compatible with the notion that the burden of persuasion is on you, the petitioner.

[00:20:11] Speaker 03:
Well, if you step back and look at the issues here with respect to Claim 49, we had met our burden on every single element being in the prior art except for the omission of stitches.

[00:20:28] Speaker 03:
And with respect to how the apparatus were formed by emitting stitches, our argument had been that limitation was meaningless as a matter of law.

[00:20:37] Speaker 03:
It added no patentable weight under this court's authority that how you achieve an apparatus structure.

[00:20:43] Speaker 04:
Are you arguing that on appeal?

[00:20:45] Speaker 03:
No, no.

[00:20:46] Speaker 03:
That's not in your brief.

[00:20:46] Speaker 03:
No, but I am pointing out, Your Honor,

[00:20:48] Speaker 03:
that we got all the way up to the omission of stitches, this court, in its remand order, identified the issue of, well, okay, is that part of the skill in the art?

[00:21:00] Speaker 03:
And Aqua Products instructs the board to go look at the evidence of record that the petitioner assembled and presented.

[00:21:06] Speaker 03:
And the board patched that together.

[00:21:11] Speaker 03:
And on that record, we met our burden.

[00:21:14] Speaker 00:
I hear what you're saying.

[00:21:17] Speaker 00:
Do you think, though, notice would be an issue there?

[00:21:21] Speaker 00:
I think it sounds like you're arguing that they should have had notice if you take the existence of the pert, reference Spencer in the record, combined with

[00:21:32] Speaker 00:
our remand decision that talked about, is this something within the knowledge of Warner's Filming Arts that somehow they should have had notice, with the instruction in Upward Products, I guess, that the board can look at the entirety of the record.

[00:21:45] Speaker 00:
Somehow, maybe you think that makes sense, provides notice.

[00:21:51] Speaker 00:
But what about the scenario, which we asked your opposing counsel about, where the board would identify and say, hey, we're going to rely on Spencer for claim 49.

[00:22:01] Speaker 00:
What do you think of that?

[00:22:02] Speaker 00:
Why don't the parties submit briefs?

[00:22:04] Speaker 00:
Then you would be able to satisfy your burden of proof, right?

[00:22:09] Speaker 03:
Yes.

[00:22:09] Speaker 03:
And I think fundamentally what you're raising is, what is the character and quality of notice required in a proposed substitute claim situation when you've got this interplay between the board's obligation and the petitioner's obligation?

[00:22:24] Speaker 03:
I mean, what kind of notice is required in that situation?

[00:22:28] Speaker 03:
And generally, we agree that in the context of an issue claim in an institution, it is the party's responsibility

[00:22:36] Speaker 03:
to provide the prior art and citations to portions of the prior art to provide notice.

[00:22:41] Speaker 03:
That's what SAS says.

[00:22:43] Speaker 03:
That's what the case law says that Nike says.

[00:22:45] Speaker 03:
I think the character and quality of notice in the proposed substitute claim situation is different, because these are new claims that have never been examined.

[00:22:55] Speaker 03:
And as long as the board is relying on the record assembled by the petitioner and the parties, there is ample notice in that situation of the prior art references.

[00:23:03] Speaker 00:
What about the fact that you're using an interest in word which is examined, right?

[00:23:08] Speaker 00:
You're right.

[00:23:08] Speaker 00:
Those claims have not yet been examined by the PTO and the PTO has an examining function.

[00:23:14] Speaker 00:
But even in its examining function, the PTO usually provides, you know, first office action and then there's an opportunity to respond by the patent applicant or in this case here the patent owner.

[00:23:27] Speaker 00:
Why shouldn't there be an opportunity to respond?

[00:23:30] Speaker 00:
to the board's position when it relies on prior art not identified by the petitioner in its opposition motion?

[00:23:41] Speaker 03:
Generally, I agree that there should be sufficient notice for a party to respond.

[00:23:47] Speaker 03:
The question in the cases is, and it's very fact bound, is what is sufficient notice?

[00:23:51] Speaker 03:
For example,

[00:23:52] Speaker 03:
And at some level, what Nike is arguing is, well, we weren't aware that the board was going to end up relying on these three or four pages of Spencer, which was a very long reference.

[00:24:01] Speaker 03:
Well, your Genzyme decision talks about how the board can rely upon the same body of prior art that's in the rejection.

[00:24:08] Speaker 03:
And there's no need for the board to have... Genzyme is different, though.

[00:24:12] Speaker 04:
It is different in the instance.

[00:24:13] Speaker 04:
So Genzyme, just so we're both clear,

[00:24:15] Speaker 04:
Those particular passages that were relied upon ultimately in the final decision were discussed and debated throughout the IPR proceeding.

[00:24:25] Speaker 04:
Everybody knew that those pages were in play.

[00:24:29] Speaker 04:
In this particular instance, I think it's fair to say Nike had no idea that these two pages from Spencer were going to be fished out of this 400 page textbook and then they were going to be surprised with it in the final written decision.

[00:24:45] Speaker 04:
And so that's why it troubles me that that can be allowed, that there's no warning.

[00:24:53] Speaker 04:
I mean, the functional consequence of what the board did here and what you're proposing is that a patent owner can file a motion to amend.

[00:25:07] Speaker 04:
You can oppose it, and then they would reply to your opposition.

[00:25:10] Speaker 04:
And not only do they have to reply to your opposition,

[00:25:15] Speaker 04:
You are putting the patent owner in a position where they have to invent any and every possible theory of unpatent ability that could exist on that record, it might have.

[00:25:27] Speaker 04:
10 references, it might have 100 references in the formal record.

[00:25:31] Speaker 04:
And they have to now, on their own, try to imagine what are all the different iterations and possibilities that the board might concoct in a final written decision that hasn't been presented, discussed, debated, or given any notice of throughout any part of the proceeding.

[00:25:48] Speaker 04:
And that seems just a peculiar way to go and seems to

[00:25:54] Speaker 03:
conflict with every principle that's in the APA.

[00:26:00] Speaker 03:
And I understand your concern about that, and I agree, none of the cases the party of the site are directly on point.

[00:26:08] Speaker 03:
Genzyme is a little different, but it does talk about the notion that there, at least in the institution final decision context, there shouldn't be a requirement or word for parity, which is kind of the issue here.

[00:26:18] Speaker 03:
How specific do you have to be?

[00:26:20] Speaker 03:
And a court of similar.

[00:26:21] Speaker 03:
I just assume it's not kind of similar to that.

[00:26:23] Speaker 03:
And if this court concludes that under your scenario, yeah, there's a problem here on an administrative agency level.

[00:26:32] Speaker 03:
the appropriate course is to remand.

[00:26:35] Speaker 03:
Because this is sort of the situation that aqua products was contemplating was going to be a problem.

[00:26:41] Speaker 03:
The conflict between the board's obligation to the public in looking at these new proposed claims and what it has to do as an agency

[00:26:51] Speaker 03:
versus the allocations of the burdens of proof.

[00:26:53] Speaker 03:
And this case would be a good vehicle for the board to actually say, okay, here's the procedure where we see a gap between that which the petitioner is arguing.

[00:27:03] Speaker 03:
And that which is where we see something in the record on that gap, here's how we're going to notify the patent owner on that and give them an opportunity to respond.

[00:27:14] Speaker 03:
This is the vehicle for doing that.

[00:27:15] Speaker 03:
We think notice should be sufficient in the context of this case, the remand order, the fact that the Spencer reference was well known.

[00:27:26] Speaker 03:
There was a debate about that.

[00:27:27] Speaker 03:
Both experts relied on that.

[00:27:28] Speaker 03:
This was a treatise.

[00:27:30] Speaker 03:
It's a long textbook because it's relied upon by both experts and the parties.

[00:27:34] Speaker 00:
Also, just to ask this pretty easy question, should we have a different rule based on the length of the reference?

[00:27:40] Speaker 03:
I'm sorry.

[00:27:40] Speaker 00:
Should we have a different rule based on the length of the reference?

[00:27:45] Speaker 03:
I honestly don't have a view on that, Your Honor.

[00:27:50] Speaker 03:
I think what that's getting to is Nike's point that, well, this was a long reference.

[00:27:56] Speaker 03:
And Judge Chin's point, how would we know which specific pages that the board might end up relying upon?

[00:28:03] Speaker 03:
Right.

[00:28:04] Speaker 03:
And I think that's just something that is taken into account in the totality of the circumstances.

[00:28:09] Speaker 00:
Do you think it's something you would consider as the totality of circumstances, the length of the reference?

[00:28:13] Speaker 03:
I think that's a fair point that Nike makes.

[00:28:17] Speaker 03:
I also think it's a fair point that in the context of this proceeding,

[00:28:22] Speaker 03:
The rejection was still based upon Nishida and Schussler in light of a technical reference that showed the background state of the art exactly as this court had posited in its remand order.

[00:28:37] Speaker 03:
And to the point of what the board's obligation was and what Adidas's obligation was, as the board observed, neither party, neither us nor Nike, asked for briefing on this issue.

[00:28:50] Speaker 03:
Nike did not say, well, we wish to address the remand issue that this court had identified in its remand order.

[00:29:01] Speaker 03:
If there's no further questions on that issue, I just want to briefly comment on the issue with respect to the other claims and the long felt need.

[00:29:09] Speaker 03:
And one point that Nike does not deal with in their briefing is that the board found that there was weak evidence of a long felt need.

[00:29:18] Speaker 03:
And then it said that weak evidence does not overcome the strong prima facie case.

[00:29:22] Speaker 03:
And we think there's more than substantial evidence to support the weak.

[00:29:27] Speaker 03:
And there were no legal errors when the board made that finding.

[00:29:30] Speaker 03:
Particularly the board said that Schussler actually met the need identified, that is the need to eliminate cutting waste, which is something that this court actually observed in discussing the motivation to combine with Schussler in its remand order.

[00:29:45] Speaker 03:
So that board's finding is consistent with this court's remand order.

[00:29:50] Speaker 03:
The other point we would make is eliminating cutting waste is just a species of the reducing waste that Nishida recognized, and again this court recognized in its remand order.

[00:30:01] Speaker 03:
So the board's finding that there was weak long felt need evidence was perfectly appropriate under both the remand order

[00:30:09] Speaker 03:
this court's case law and the evidence that Schussler met eliminating cutting waste altogether.

[00:30:19] Speaker 04:
Just curious, is there any litigation on this patent between the parties?

[00:30:24] Speaker 03:
No, there are other patents that are in this family that Nike had asserted against a different party, Puma, but not against Adidas.

[00:30:35] Speaker 02:
Thank you, counsel.

[00:30:37] Speaker 02:
Your time has expired.

[00:30:38] Speaker 03:
Thank you, your honor.

[00:30:39] Speaker 02:
Mr. Harris has some rebuttal time.

[00:30:42] Speaker 01:
Thank you, your honor.

[00:30:43] Speaker 01:
So I want to first follow up on Judge Chin's hypothetical about putting the patent owner in this impossible position of scouring the record and trying to anticipate everything that the board could potentially cite to for an argument that the petitioner never raised.

[00:31:00] Speaker 01:
In addition to putting the patent owner in that position, it's going to result in appeals like this one, where the record is undeveloped when it gets to this court.

[00:31:13] Speaker 01:
The record regarding Spencer and what it discloses and what it would mean to a person of ordinary skill in the art, that was not litigated below.

[00:31:21] Speaker 01:
So, if ACWA products is read to mean that the APA doesn't apply to motions to amend, then that's going to make this court a court of first instance for a lot of factual issues, which doesn't seem right to us.

[00:31:35] Speaker 01:
I want to quickly hit on my co-counsel or opposing counsels.

[00:31:40] Speaker 01:
comments about the board's findings of weak evidence of secondary consideration.

[00:31:45] Speaker 04:
Before you get there, could you comment on the option of perhaps remanding Claim 49 as opposed to an outright reversal, assuming we find that there's some kind of procedural defect in what the board did?

[00:31:59] Speaker 01:
Yes, Your Honor.

[00:32:00] Speaker 01:
We think reversal's the appropriate outcome, obviously.

[00:32:04] Speaker 01:
So the board and Adidas have had two chances to justify their positions on claim 49.

[00:32:13] Speaker 01:
They've failed both times.

[00:32:15] Speaker 01:
If they're given a third bite at the apple, what they're really being given is a new IPR.

[00:32:20] Speaker 01:
It's a brand new argument that they didn't raise before.

[00:32:23] Speaker 01:
They could have raised before.

[00:32:25] Speaker 01:
They could have raised in opposition to our motion to amend.

[00:32:28] Speaker 00:
But it was raised by the board.

[00:32:29] Speaker 00:
There's a procedural error because the board raised a new demand.

[00:32:34] Speaker 00:
And so why wouldn't we demand so that you could present your evidence and develop this factual issue that you're talking about before the board?

[00:32:45] Speaker 01:
Because Adidas could have raised that argument.

[00:32:48] Speaker 00:
But we've already determined that under aqua products, the board can raise, look at the entirety of the record,

[00:32:56] Speaker 00:
and identify priority.

[00:32:58] Speaker 00:
That's already been determined, right?

[00:33:00] Speaker 00:
I mean, at least discussed, admitted.

[00:33:02] Speaker 00:
So assuming they can do that, just assume with me for a minute that they can do that, then why wouldn't a remand be appropriate in response to lack of notice?

[00:33:12] Speaker 01:
Right, because our position is they've already had an opportunity to do it, and they failed, twice.

[00:33:17] Speaker 04:
I guess the idea is the burden of proof was on Adidas.

[00:33:22] Speaker 04:
And based on what Adidas did, you know, they didn't meet that burden.

[00:33:29] Speaker 04:
If the board had perhaps alerted everyone to this Spencer issue before the end of the trial, and then Adidas had seized upon it and relied upon it, then one could say, okay, in that context, Adidas had met its burden of proof, but not based on what happened here.

[00:33:47] Speaker 01:
Well, this court alerted Adidas to that potential argument.

[00:33:51] Speaker 01:
And in fact, that's why the board picked up on it.

[00:33:53] Speaker 01:
And when we went back on remand, Adidas didn't ask to reopen the record to make that argument.

[00:33:59] Speaker 01:
They could have, and they didn't.

[00:34:01] Speaker 01:
So for that reason, we request that the court remand.

[00:34:05] Speaker 01:
I'm sorry, reverse and not remand.

[00:34:07] Speaker 01:
Thank you.

[00:34:08] Speaker 02:
Thank you, counsel.

[00:34:09] Speaker 02:
We will do our best not to miss a stitch in driving at the proper conclusion.

[00:34:15] Speaker 02:
We'll take the case on revisement.