[00:00:00] Speaker 04:
2027 Altamont Software versus Sorna Corporation

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Mr. Holbro, come on forward and proceed.

[00:01:22] Speaker 00:
Good morning, may it please the court.

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I'm Bill Lebrow here on behalf of Altamont Appellate in the case.

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First, I thought I'd just address the court's questions regarding Article 3 standing briefly.

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Just comment on a few of the response that SORNA recently submitted.

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Notably, in their response, SORNA did not contest

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Any of the following didn't contest that it's filed over half a dozen lawsuits.

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Didn't contest that none of them have been determined on the merits.

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Didn't contest that it filed a lawsuit against PaxSkier's Meteorider for infringement of the 408 patent.

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Didn't contest that Altamont's Outbox product provides the same functions in the same way as the Meteorider.

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They didn't contest that Swann refused to agree not to sue Altamont for infringing the 408 patent and the four related patents.

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The thrust of their argument appears to be that the affiant Mr. Kavanaugh stated that he does not believe the outbox infringes the 408 patent.

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As noted in his affidavit, he also did not believe that the meteor rider infringed the 408 patent either, but that did not stop Swarnoff from suing Paxgier.

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Apparently, the defendant's position is that based on that statement alone, there's no standing.

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If that were true and defendants

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I don't think there would be many patent lawsuits.

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As a result, I don't think there's much question on the standing issue.

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Turning to the more important issue, the issues relating to the final decision issued by the board.

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As mentioned, Sorna's a highly digitized company, which is the reason that this IPR was filed.

[00:03:12] Speaker 03:
Yeah, but when we get to the merits, that's not really something for us to worry about.

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So let me take it to you.

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No, but I'm just putting it into context because it is a reason that there should be a variant.

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we don't believe the board fairly analyzed the issues in the case.

[00:03:27] Speaker 03:
Well the question was whether or not you were required to say more about what modifications of, how do you pronounce the reference, Collie?

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I pronounce it Kale, but I don't know the name.

[00:03:41] Speaker 03:
In your petition.

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And the board said this amounted to a significant evidentiary gap because

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They said that you needed to do more.

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It was a substantial modification that would have been necessary to CAIL and you needed to do more.

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We've got a deferential standard of review here.

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How is it that there's sufficient basis to overturn the board's conclusion with respect to the sufficiency of our statement made in the petition and the significant modifications that the board concluded were necessary?

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Thank you, and that is the primary issue here.

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And I believe that there's no question that our response, our petition, did include Cale and argued why Cale did render

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the four-way patent obvious.

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In reply, the patent owner raised some issues relating to this term called the perimeter table, which was in the... But there's no question that there was something missing in Kale, that Kale didn't deal with the DICOM stuff or whatever.

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So you had to make... You agree you had to make some representation in your petition.

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about how you can combine CAIL with the other reference, right?

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Well, CAIL applied to all data.

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It didn't limit it to any data.

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In fact, we quoted sections from CAIL which says this can be applied to all data.

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It wasn't until patent owner raised the issue that maybe this parameter table wouldn't work with DICOM data.

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that we addressed it both in Dr. Ory's deposition.

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So the question that we have to decide, right, is was that a significant enough gap?

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Was the board right that that was a gap in terms of what you needed to come forth initially because of the failure of Kale to specifically deal with this other DICOM stuff?

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And we review that for substantial evidence.

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Right.

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We can get to that, and I think the answer is that our position was thorough enough.

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But the case law, and I'm quoting from Apple versus Indra Electronics says, further any ambiguity as to whether Apple raised the new argument or reply is eliminated when we consider whether Apple's reply arguments are responsive to arguments raised in Andrea's patent owner's response.

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As we have regularly held, the petitioner in an inter-parties review proceeding may introduce new evidence after the petition stage if the evidence is a legitimate reply to evidence introduced by the patent owner.

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And it goes on to say, stepping back a bit distance persuades us that the board's decision to ignore Apple's responsive arguments

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to issue to issues raised by Andrea and its patent owners response is not supported as a matter of law and the conclusion that the reply brief constitutes an impermissible new matter is an abuse of discretion so there's two standards one if it's made in response to reply then it comes in and the board erred by not allowing it not analyzing what was submitted in reply to issues raised by the

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your petition because our legal standard is as long as it's in the reply it's okay and we can throw it in then and we don't have to put anything in the petition.

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That's what Apple stands for and there's another case here.

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There are, though, plenty of cases that hold that the petition has to particularly set forth the specific grounds on which the party's relying, including mapping the claims particularly to the prior order of the claims.

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Right.

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I mean, I understand what you're saying, that there's also the board's rule that says that you can have new information so long as it's responsive to a prior pleading, like it says, to the institution's decision or the reply.

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But can't the board rely on both of those grounds for saying that they're going to exclude this evidence?

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Well, I think you're right.

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I think the board.

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As in the Apple case found that both, it wasn't in response to the petitioner's response.

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So it comes in and there was no factual reason to exclude it.

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And in the Anacor versus Iancoup case, the petitioners submitted two new references as part of their argument.

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And those were allowed to come in because they're in response to the petitioners or to the patent owners' reply.

[00:08:30] Speaker 04:
Yeah, but this isn't, do I understand the fact, right?

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In this case, you relied for obvious purposes on KL.

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And then after the patent owner came in and explained the problems with that, in reply, for the first time, you come in with arguments about how you could modify Kale.

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I mean, that seems like introducing a new reference or introducing a new portion of a reference in reply, which we've clearly held is outside the scope of the petition.

[00:09:01] Speaker 00:
No.

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First of all, the

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clarification that was made on reply was not new evidence.

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Basically, the clarification was that a parameter table is equivalent to a database table.

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And both the Dr. Horry, who is Altamont's expert, and

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Dr. Kia, who is sworn as expert, agreed that a parameter table could be modified to accommodate the DICOM images.

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Well, yes, but that Dr. Khoury declaration came with the reply.

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You're introducing evidence that the reference you relied on for obviousness, which has been argued not to support obviousness, could be modified in a way that you never presented as part of your petition or initial briefing.

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That's because it was never an issue.

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There's an understanding.

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You have the obligation to establish obviousness, all of the elements, all of the parameters.

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The patent owner pointed out deficiency in there, and your comeback wasn't, oh, no, what we provided does, in fact, satisfy obviousness.

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Your response was, well, the thing could be modified, and a skilled artist would know how to do that.

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That's a new ground.

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That's a new argument.

[00:10:32] Speaker 00:
No.

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I don't think that was the position.

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The position was that there was, that the parameter table, which is what it's called on Kale, in which the patent owner created a very narrow definition of, we accepted that and said, even under that definition, Kale still teaches it.

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And that, and this is how.

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And both Dr. Ori and Dr. Kia confirmed that a parameter table could be modified.

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You can call it a database table.

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It would be modified so it can be used for DICOM data.

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But it wasn't on its face disclosing that.

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I think the quote from Dr. Ori

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Is, would you describe that the same as a parameter table?

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I'm sorry, yes.

[00:11:34] Speaker 00:
Appendix 1310.

[00:11:35] Speaker 04:
Is that the first volume or the second volume?

[00:11:39] Speaker 00:
I believe that's the second volume.

[00:11:40] Speaker 04:
Just give me a second.

[00:11:41] Speaker 04:
Let me get with you.

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And the question is, would you describe that as the same as a parameter table in discussing the database table that Dr. Rory identified?

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He said the roof stuff underneath could be described as a parameter table, but a SQL database table, some people might call it a parameter table.

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So it's just semantics and computer diction.

[00:12:06] Speaker 01:
We're looking at page 80 on this appendix, page 1310, right?

[00:12:10] Speaker 01:
Yeah.

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80 at the top, round lines three and four.

[00:12:14] Speaker 00:
Yeah.

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78-15 to 89 is the area that it's quoted there.

[00:12:22] Speaker 03:
Can I just, I mean we've read the entire opinion and the board obviously has an alternative holding which is you lose on the merits and in connection with that it makes

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sort of, it says that looking at the experts, having considered both experts now, even if considered everything the expert says, he says, Kale's teaching are limited and its type of processing of the data system would not work on DICOM formatted data without significant modifications for which Kale provides no teachings or guidance.

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If we take that as correct, that's the board's conclusion, having looked at all the evidence.

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Doesn't that support the initial conclusion that you require there were significant modifications necessary to CAIL?

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to work on DICOM and that CAEL has no teaching or guidance as to how those modifications would be made.

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And if we accept that as correct under whatever standard of review we're doing, then why would you require to, in the first instance in support of your petition, provide that?

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Well, I think there's two ways to answer that.

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One, as discussed,

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The board clearly said they weren't going to consider the information submitted in the reply.

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And in page 39 of the brief, I think there's some dick in there that's very confusing of whether they considered it with that statement or not.

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But they do say.

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Well, in page 33, they say even if they were to consider it, you would lose, right?

[00:13:59] Speaker 00:
Well, at page 39, they say, as discussed, Cale's teachings are insufficient to support obviousness because of significant additional modifications that were not presented in the petition.

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Council, but I see what you're saying on page 39, but you haven't answered the question about page 33.

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Could you please look at page 33 and then answer the question?

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So it's page 33.

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It's the first full paragraph is where there is an alternative holding

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by the board where they see, even considering petitioners later raised modifications to Kale in its reply.

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But they don't consider, there's no analysis here on how they come to that conclusion.

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It's a conclusionary statement because the page before they say they're not going to consider it.

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And here, they should be even considering it, but there's no analysis.

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Well, I'm not going to defend how wonderful and fulsome the paragraph on page 33 is.

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However, it does have the sentence to which I referred a couple minutes ago.

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The full record, this is the board's analysis of the full record, including the expert testimony on both sides.

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as discussed above, supports that CAEL's teachings are limited and its type of processing of the data stream would not work on DICOM formatted data without significant modifications for which CAEL provides no teachings or guidance.

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And again, there's no explanation there.

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They ignore

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all the evidence that was presented and then they come in with this conclusory statement which is then followed by another conclusory statement which says essentially the same thing except at that point they put in parenthetically that were not presented in the petition.

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So it's not clear what they've done.

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The other thing that's really unique about this case is that... Do you want to save any time for rebuttal counsel?

[00:15:49] Speaker 00:
Yeah, I've got two quick points to make and then I'll sit down.

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The other thing that's very unique about this case is that

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This analysis that the board came up with was suesponte.

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It wasn't raised by Sorna.

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The first time we saw this was in the final decision.

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Never had an opportunity to address it.

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Never had an opportunity to explain the circumstances that would have hopefully rebutted that in the mind of the board.

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The other issue that's very critical here is that the

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That the patent itself is silent as to how all this happens.

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The board found that there's no mention of key value pairs.

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There's no mention of what parsing or extracting means in the 408 patent.

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And this board has found that

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Council you're beyond your time you've used all your time in your rebuttal time we're going to hear from opposing council I thought this was four minutes that included all of your time it was your responsibility that's why I tried to stop you

[00:17:21] Speaker 02:
Thank you.

[00:17:22] Speaker 02:
May it please the court, Your Honor.

[00:17:24] Speaker 02:
I'd like to start off with the Article III standing issue.

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As the court understands, there is a three-part test for Article III.

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Can I ask you about that?

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Your least reply.

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doesn't come out and say it, but comes pretty close to saying that Altamont would have had to admit that it infringes in order to have standing.

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You say your second sentence is, by its own admission, they deny they infringe.

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Is it your view of our law that in the absence of an admission that their product infringes, there's no standing?

[00:18:04] Speaker 02:
No, Your Honor.

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Clearly, in each of the cases referenced in our briefing, there were a multitude of factors that were examined by the court.

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The court never focused on one thing.

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But in my conclusion of reading these cases, oftentimes, the appellant did, in fact, admit that their products were at least implicated

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the patent.

[00:18:31] Speaker 04:
Perhaps they didn't go so far as to say that there was a... Well, do you know that he said that you sued somebody for infringement that does a product almost exactly like theirs?

[00:18:40] Speaker 04:
How is that not suggesting their product is implicated for infringement?

[00:18:44] Speaker 02:
Your Honor, that's a conclusory statement.

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Altamont would like the court to believe that we as SORNA would sue any other company in the world that makes medical data recording devices.

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That's not what they said.

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They said you sued a company that makes a product just like theirs.

[00:19:00] Speaker 02:
Are you referring to the PaxGear?

[00:19:03] Speaker 02:
The PaxGear reference, Your Honor?

[00:19:05] Speaker 02:
Yes.

[00:19:05] Speaker 02:
OK.

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And that was, in fact, a company that was run by the decline Brian Kavanaugh.

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They said that the product works in the same way.

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We don't have an infringement case against them.

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There's not any evidence in the record to test there is a third.

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There's a declaration that says that it operates in the same way.

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And there's no contrary evidence, right?

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There is no contrary evidence.

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But there is also, Your Honor, no objective evidence for the court to utilize to test that assertion either.

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It's his opinion that they work in the same way and his statement that they work in the same way.

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But there is not any evidence.

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He has knowledge of both of them, right?

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Given his unique circumstances of having worked at the other company, have been involved in the litigation on behalf of the other company, right?

[00:19:55] Speaker 02:
That is correct, Your Honor.

[00:19:56] Speaker 02:
Yes, that is correct.

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He would, in theory, have knowledge of how they work.

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He didn't, in fact, give an opinion on whether or not his product and the former Paxia product infringed the patent, which is the more important question for us.

[00:20:13] Speaker 04:
No, it's not, actually.

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The more important question is, are they likely to get sued by you?

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And you sued somebody that makes a product they said is identical.

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They don't have to admit infringement in order to get jurisdiction here.

[00:20:26] Speaker 02:
I agree that they do not have to admit infringement, but is it sufficient with no other evidence to say, I don't think these products infringe, but so on and on?

[00:20:36] Speaker 04:
You have no chance of winning on this issue.

[00:20:38] Speaker 04:
Your arguments are specious.

[00:20:40] Speaker 04:
I suggest you move on to the merits, unless my colleagues disagree.

[00:20:43] Speaker 04:
Feel free to weigh in if you do.

[00:20:46] Speaker 02:
Thank you, Your Honor.

[00:20:46] Speaker 02:
I'll move on to the merits.

[00:20:50] Speaker 02:
As the board noted in

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in the discussion earlier today with my friend.

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The board did in fact note that even if they had considered the modifications that were necessary to CAIL and DICOM view, it would not have changed their opinion.

[00:21:13] Speaker 02:
That is absolutely true.

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And it's also true that Altamont did not

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bring up in its initial petition the fact that modifications are necessary.

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Only after Sorna brought up their own argument that, in fact, a parameter table would not work to parse DICOM data.

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And in fact, our expert Dr. Kia explicitly stated that if a parameter table were used on DICOM formatted data, that the disk that would be produced by the patent intervention would only have the fields written on it that were the same across

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that were the same across all the data inputted.

[00:21:53] Speaker 03:
So you'd have a disk that would have... So if they had done more in their petition, this case would have played out exactly the same way, right?

[00:22:01] Speaker 03:
You would have come in and you would have had your expert saying, no it doesn't, and the board would have had to weigh the experts, which ultimately in alternative holding it did.

[00:22:10] Speaker 03:
I agree.

[00:22:12] Speaker 03:
The problem I have is I guess we're all into line drawing and I'm not sure where the lines ought to be drawn and maybe that's more to the board and we've got a deferential standard of review but I mean there could probably be a number of things that you would come up with in terms of making an argument of non-obviousness

[00:22:33] Speaker 03:
that they could or not anticipate.

[00:22:37] Speaker 03:
But obviously, the petition is not going to necessarily respond to every argument you subsequently provide, right?

[00:22:44] Speaker 03:
And how are we supposed to discern where to draw the line?

[00:22:49] Speaker 02:
I think that, fortunately, that is not an issue that you or a decision that you have to make today.

[00:22:56] Speaker 02:
The question in front of the board today is whether or not the finding of the PTAB supported by

[00:23:01] Speaker 02:
substantial evidence.

[00:23:02] Speaker 02:
In this case, I think it is.

[00:23:04] Speaker 02:
They did not explicitly refuse to consider the modifications testified on by Dr. Horry.

[00:23:13] Speaker 03:
Do you rely on the alternative holding on page 33?

[00:23:15] Speaker 03:
Excuse me, Your Honor?

[00:23:17] Speaker 03:
Do you rely on their alternative holding on page 33?

[00:23:20] Speaker 02:
I am, Your Honor.

[00:23:21] Speaker 02:
Or at least their... Yes, I think it could be properly characterized as an alternative

[00:23:30] Speaker 03:
My answer would be that it is in fact supported in the record.

[00:23:39] Speaker 02:
You know, they explicitly referred to the declaration testimony of both Dr. Horry and Dr. Kia, which discussed in depth the modifications necessary to Kaolin Dicompio.

[00:23:59] Speaker 02:
I would, again, stress to the panel today that this is not an issue of waiver, the board refusing to consider arguments raised by Altamont.

[00:24:10] Speaker 02:
The board considered the arguments and found them lacking.

[00:24:12] Speaker 02:
And there is substantial evidence in the record to support that conclusion.

[00:24:23] Speaker 04:
OK, Mr. Carroll.

[00:24:30] Speaker 04:
two minutes of rebuttal time, since I guess you got confused about the clock.

[00:24:34] Speaker 04:
So please come on up with two more minutes.

[00:24:36] Speaker 00:
Thank you very much, Your Honor.

[00:24:40] Speaker 00:
This court has held that prior to our reference need only be as enabling as at the same level as the disclosure of the patent analyze.

[00:24:47] Speaker 00:
That's a constant versus AMD INC 848, up second 1560.

[00:24:52] Speaker 00:
The patent here, in its totality describing

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how the information is parsed and placed on a label consists of one sentence that says the first routine parses any DICOM part 10 file found in the incoming directory 52.

[00:25:07] Speaker 00:
Then it states there's a building image directory which magically contains the patient information file which isn't addressed otherwise identified as patient.txt and then at the end it says

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There's a printer that they acquired from some other company, which uses a merge file, which incorporates this patient .txt file.

[00:25:28] Speaker 00:
That's it.

[00:25:29] Speaker 00:
There's nothing about key value pairs.

[00:25:32] Speaker 00:
There's nothing about no mention of databases, no mention of how it's stored.

[00:25:39] Speaker 00:
There's a lot of other language in there about the images and where they go.

[00:25:42] Speaker 00:
But as to the text, it's printed on the labels.

[00:25:44] Speaker 00:
That's it.

[00:25:45] Speaker 00:
There's nothing else.

[00:25:48] Speaker 00:
Based on this court's own holding in the concept case, the CALE reference is that in spades.

[00:25:57] Speaker 00:
I mean, it does even more.

[00:25:58] Speaker 00:
It at least gives an option of a parameter table for a person with ordinary skill in the art to consider to use when creating the text database.

[00:26:10] Speaker 00:
The 408 patent does nothing.

[00:26:12] Speaker 00:
The other thing to consider.

[00:26:13] Speaker 01:
So your point is that there's not substantial evidence to support the board's finding that Kale only teaches taking the entire document as opposed to grabbing parts.

[00:26:25] Speaker 01:
Is that right?

[00:26:27] Speaker 00:
My point here was that if a faceta for some more new skill in the art is expected to understand how to create this text database and burn CDs and put labels on them with the text based on the four-way patent,

[00:26:42] Speaker 00:
then a façade who the board found was a pretty bright guy with a lot of experience in DICOM and computer programming also could utilize CAIL to do the same thing.

[00:27:14] Speaker 00:
The honorable court is adjourned until tomorrow morning at 10 a.m.