[00:00:00] Speaker 04:
We will hear argument first in number 20, 2078, in Ray Parallax Group International.

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Mr. Sells?

[00:00:17] Speaker 04:
Van Loben Sells.

[00:00:18] Speaker 04:
Van Loben.

[00:00:21] Speaker 04:
Begin whenever you are ready.

[00:00:24] Speaker 01:
Good morning and may it please the court.

[00:00:26] Speaker 01:
My name is John Van Loben Sells and I represent the Patent Owner

[00:00:29] Speaker 01:
Parallax in its appeal from the Patent Trial and Appeal Board's ruling following the re-examination of the Parallax 085 patent.

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With me today is my colleague, Joe Andelin.

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As the court is aware, in the underlying re-examination, the examiner found that all claims of the 085 patent were obvious under Section 103 of the Patent Act.

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And the board ultimately adopted the examiner's rationale

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for that result.

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Appellant, the 085 patent owner, demonstrated in its papers that the board committed a reversible error when it endorsed the examiner's fatally flawed invalidity analysis.

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Specifically, the examiner rejected all the claims of the 085 patent as obvious under Section 103 solely because she concluded

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that the two layers of the Koffler map inherently have the same coefficient of thermal expansion.

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Council?

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Yes.

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I want to ask you a question about that.

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I understand that it was an inferency argument, but wasn't there an obviousness position as well in that Galorm taught the idea of having the same coefficient of thermal expansion between two materials in order to solve the problem that the patent was seeking to solve?

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yes well I understand that's the board's position on appeal that there that there was an obvious argument based on that combination but in fact

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The examiner below did not make that rejection.

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There is no combination.

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The examiner didn't cite Galorm at all?

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She did cite Galorm, but she cited it for a different proposition.

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She cited it for the proposition that it supported her conclusion that the missing feature in Koffler was actually inherently present.

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And that's different.

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That's different from admitting that the feature is missing in Koffler and present in Galorm and that they may be combined.

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And if, it is our position, had the examiner meant to make a combination rejection, that she knew how to do that.

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There's a specific way to do that, and that she had to set out specifically under KSR and this progeny all the reasons why that combination would result in an obviousness rejection.

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She didn't do that.

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But you agree that the board did?

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I do not.

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If you look at the board's final decision, the only place where it cites this coffler in combination with DeLorme is on page six of its final decision, which is at appendix page eight.

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The board essentially adopted the exact same rationale as the examiner and proved what the examiner said about it, which is that Galorme informs or supports the notion that that feature is inherently a part of COFLA.

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The board does not make a separate

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uh... rejection based on that combination and in fact it could not do so what do you make of the sentence that says therefore this is the sentence coming right after the alarm the skilled worker had reason at the time of the invention to pick the conditions which would result in the layers having the same thermal properties and to only use those that do

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I guess I had understood that to be that the alarm gives the motivation even if not every single thing within the Kauffler range would produce the required equal coefficients of thermal expansion to pick the conditions that would.

[00:04:31] Speaker 01:
Well, I agree that that that it appears that the board is saying that, but I think that what it cannot do is support the decision of the examiner and

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affirm the rejection if the rejection was not made on that basis.

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Because there has to be... Ground zero is that that would be a new grounds of rejection.

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Exactly right.

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Which you then would be able to have sent back to the examiner if you chose.

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That's exactly right.

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So... What happens in a situation where the board has what you consider to be a new grounds of rejection, but doesn't treat it as a new grounds of rejection?

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Do you then have the burden of telling the board that they made a mistake, for example, in a petition for re-hearing?

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Well, I haven't seen authority that would suggest that we have the obligation to do that before bringing an appeal here.

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No, you have a choice.

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I believe if you have a choice, you could either go directly, when there is a new ground of rejection, you could either go directly to this court still, or you could choose to continue prosecution in front of the examiner.

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Okay, well, we obviously chose to bring the appeal directly here because that is our view of what appears to have happened here, what may have happened here, to the extent that the board treated the citation to Galorme as a combination.

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That was an improper additional grounds for rejection that is not in the examiner's final rejection.

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And her final rejection is

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is on page 1814 of the appendix where she's very clear in how she cites it.

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She cites it as support for her inherency argument.

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I think you understand your position.

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You probably have other more important things you want to talk about.

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So I don't want to keep you from talking about the other parts of the examiner's rationale and the board's rationale.

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Right.

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So thank you, Your Honor.

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I guess what I would say sort of in response to Your Honor's initial question is that let's say that that obviousness rejection was properly made or properly taken into account in the board's final action.

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I think it still has to be reversed here because as we pointed out in our papers,

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where you have disparate types of prior art references.

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Like, Galorme and Koffler are not the similar technology.

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They're not the same technology.

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They're very different.

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Galorme deals with printed circuit boards.

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Koffler deals with this sort of polymetric phone.

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They're very different.

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And when you have different technologies like that, then the board

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or the examiner, if there had been a combination rejection, had to have pointed to evidence outside of those two references in order to find motivation to combine.

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So in other words, if you have references that are similar.

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What about the fact that the references are directed to the same problem?

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Well, at least one of them, they're both seeking to solve the secondary reference, galore, and is directed to solving a specific problem.

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that one of ordinary scale in the earth knew of to exist in the first reference.

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Well, I guess at a high level of generality that would be true that you have a problem of potential delamination and heat stress, but you're talking about that happening in very different chemical physical environments.

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The Galorme reference deals with printed circuit boards and resins, and they don't have any of the sort of volatility, or at least there's no evidence that they have the sort of volatility that you have with polymetric foams and that sort.

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And so when you have... Where do you think in your specification there's a discussion of the problems

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that you just mentioned with respect to the foams because I didn't really see that in the specification you know all the discussion about how you have to have the rollers be a particular temperature all of that or you'll have these

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problems of being able to achieve the same coefficient of thermal expansion in the two different materials?

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Well, I guess what I would say, Your Honor, I don't have the specific references that I might point to from the specification, but I'll get those from my colleague and bring them back in rebuttal.

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But one response to that question is that

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You know, we cited cases for the proposition that it's not proper for the board to criticize the specification for not having answers to every conceivable invalidity challenge that might arise.

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You know, that that's not an appropriate criticism of the specification.

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The specification doesn't have to have all the information that's needed to traverse hypothetical rejections.

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And ours certainly doesn't.

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We have and have to have the opportunity to traverse rejections when they are made expressly.

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And in this case, certainly we believe that that rejection was not made expressly.

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I think in your specification that says the two layers have the same chemical composition so that two layers may have the same coefficient of thermal expansion.

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And it seems now that you're presenting evidence, this in fact, the statement in the specification isn't necessarily true.

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And instead, there's a lot more to it than that.

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It's a lot more difficult than the specification makes it sound.

[00:10:14] Speaker 01:
Well, Your Honor, I think the response to that is that that sentence in the specification deals with foamed layers.

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So the chemical composition of the foam that has already gone through the reactions and the foaming process.

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In those cases where they have the same chemical composition,

[00:10:33] Speaker 01:
then, yes, they have the same CTE.

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But the problem arises, and the Koffler reference deals with situations where you have the same chemical ingredients beforehand.

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It doesn't take into account what happens during the foaming process, the chemical reactions that happen there, the off-gassing, the changes into the molecular structure and density of the foam that happen necessarily when you are doing that process.

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So we're really talking about different things.

[00:11:02] Speaker 01:
You're talking about the same matte layers, yes.

[00:11:09] Speaker 01:
When they have the same chemical composition, because they've gone through that process in the same way, they do have the same CD, but they don't have it automatically when you start just with the same ingredient.

[00:11:21] Speaker 03:
Because you have to control- So if I understand correctly that your reading of the chemical composition is things like cell structure, cell size, density.

[00:11:30] Speaker 03:
That's how you're reading chemical composition as opposed to

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what the materials are that it's made of.

[00:11:37] Speaker 01:
That's correct.

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It's not simply the ingredients.

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It's especially because in the foaming process, the ingredients change.

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They indisputably undergo chemical change.

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Even the quantities of the constituents change because there is this off-gassing that happens when the foaming process takes place.

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So they're not the same when they finish as when they start.

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And so the chemical composition has to include

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Density the molecular structure all those things cell size because those play into the physical properties of the the foam matte layers including CTE Why aren't things like cell structure and cell size themselves physical properties?

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They are physical properties But you're calling them chemical compositions

[00:12:25] Speaker 01:
Well, I think they go hand in hand.

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I think the chemical composition, the chemical structure feeds into the cell size.

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They feed into the density because the chemicals are rearranged during the foaming process.

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And when you read that sentence that is cited by the board in the final action, it's cited out of the context of the rest of the specification that does talk about it.

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Mr.. Sauer correctly yes, I

[00:13:19] Speaker 02:
Good morning, and may it please the court, Peter Sauer on behalf of the USPTO director.

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The board's conclusion that the pending claims of the 085 patent would have been obvious over the prior art is correct, and the underlying factual findings are supported by substantial evidence.

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Well, what about, let's just call it a procedural argument, this idea which I think Mr. Menlo themselves

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suggested that the board, to the extent it went beyond saying, same CTE is inherent in Koffler, went off in a different direction from anything found in the examiner's rejection, and that was improper.

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Yes, Your Honor.

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I would start by saying that that argument wasn't raised in the opening brief for this court.

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It was only raised in the reply brief for the first time, and so it's improper.

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Even so, it's incorrect.

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As noted in the PTO's brief,

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At APPX 1813 to 1814, the examiner's final rejection discusses 103 and specifically discusses the combination of coffee and galore.

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The PTAB opinion cites APPS 1814 for that very proposition.

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Right.

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But it may be that there are several different uses that could be made of Galorm.

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What if one of them would be, Galorm tells a skilled artist, this is all 103.

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There was never any 102.

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So the question is, what is a skilled artist going to do with Koffler?

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is this inherency point, which is everything Koffler teaches produces the CTE if you use the same ingredients, true inherency.

[00:15:19] Speaker 04:
I took it that the page, I guess appendix page eight, written decision page six, says kind of even if not,

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Gillorm tells a skilled artisan to set conditions, not just pick ingredients, use conditions to ensure that CTEs are the same.

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Where on 1813, 1814 does the examiner speak of choosing conditions that would produce CTE if not every same ingredient mixture would?

[00:15:54] Speaker 04:
There is a sentence that says, use the right ingredients near the bottom of, this is line 17 to 19 of 1814, but that doesn't speak of conditions like temperature, which is, I think, what the other side focuses on.

[00:16:12] Speaker 02:
Correct, Your Honor.

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So reading these sentences together, I think, is how you come to that outcome.

[00:16:18] Speaker 02:
It says a person having ordinary skill in the art would use materials with the same physical properties such as coefficient of thermal expansion and laminated foam materials to avoid delamination.

[00:16:29] Speaker 02:
That's the starting point that Your Honor mentioned.

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Starting from just Koffler, that a person of ordinary skill in the art would use the same ingredients and

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because they are meant to be the same process them under the same conditions and therefore they would wind up with the same physical properties.

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But then the examiner goes on to say this is supported by galore which teaches that by having a composition with a coefficient of thermal expansion that is substantially the same as that of the substrate to which it is applied, serious problems of delamination are overcome.

[00:17:01] Speaker 02:
So the examiner is saying

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that Gilorum teaches the person of ordinary skill in the art that you not only need to apply the same conditions, but you need to particularly control for the outcome of the coefficient of thermal expansion.

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That is the critical parameter that has to be kept in mind during the process.

[00:17:19] Speaker 04:
Did the examiner and the examiner's answer elaborate in any way that would

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move this discussion, which on the assumption this discussion doesn't quite get to process conditions.

[00:17:35] Speaker 04:
Did the examiner's answer talk about process conditions?

[00:17:40] Speaker 02:
No, Your Honor.

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Because Parallax's appeal brief only talks about the inherency, I believe that the examiner limited her discussion to rebuttal of the appeal brief.

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And so that issue wasn't raised for the examiner to further clarify to the extent it was unclear from this passage.

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And certainly the board, as I noted at pages 6 and 8, PPX 6 and 8 of the board's opinion, is citing to this precise page for the precise proposition that we've just discussed, that to the extent that inherently is in present based on popular alone, one of ordinary skill

[00:18:19] Speaker 02:
Looking to the same problem to solve this problem delamination would be aware of galore and would know that the critical parameter to control for is the coefficient of thermal expansion and that would take steps to control the process to get the desired outcome of the same CTE for both bone layers and and that's the board found that's consistent with the

[00:18:44] Speaker 02:
the disclosure in the 085 patent both in the passage that Judge Stoll pointed out and also in the brevity of the disclosure there's less than two columns of detailed description of the embodiment of the

[00:19:01] Speaker 02:
of the invention.

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And so it's largely left to the skill of the person, ordinary skill in the art, to come up with, well, what temperature should I use?

[00:19:10] Speaker 02:
What ranges should I control them to?

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What equipment should I use?

[00:19:14] Speaker 02:
If all of these things are so critical, that sort of post-hoc reasoning by Parallax Now, it wasn't disclosed.

[00:19:22] Speaker 02:
It evidently wasn't their viewpoint at the time that they filed the patent, because none of that description is present.

[00:19:28] Speaker 02:
In fact, there's far more information

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for a person of ordinary skill to start from in creating a controlled process when looking at Koffler than looking at the 085 patent.

[00:19:39] Speaker 02:
Because the 085 patent, for example, says the roller temperature should be controlled to within five degrees.

[00:19:46] Speaker 02:
But it doesn't tell you to within five degrees of what.

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Whereas Koffler provides starting ranges.

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And it doesn't say that that can be.

[00:19:55] Speaker 04:
I guess I had understood the five degrees to mean you're doing two rolls.

[00:20:01] Speaker 04:
They should be within five degrees of each other.

[00:20:03] Speaker 04:
Did I misunderstand that?

[00:20:05] Speaker 04:
That's correct, Your Honor, but I'm pointing out that... Not within five degrees of an absolute temperature, just no variation greater than five.

[00:20:12] Speaker 04:
Did I misunderstand that?

[00:20:14] Speaker 02:
I think similar to that, Your Honor, I would, from my point of view, it would be something like you would discover that your very idealized temperature for conducting a particular step is 185 degrees.

[00:20:27] Speaker 02:
And so that means plus or minus two and a half degrees is your range that you want to control because that's the ideal that you're shooting for, but you don't want to let it get more than two and a half degrees either side of that.

[00:20:39] Speaker 02:
And my point I was trying to make is that they're telling you not to let it go more than two and a half degrees away, but they don't tell you it's 185 degrees.

[00:20:48] Speaker 02:
The person of ordinary skill in the art has to figure out that

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idealized number that's going to be the center point of that range all on their own, because it's not identified in the 0i85 patent.

[00:21:00] Speaker 02:
Again, this person of ordinary skill in the art is quite highly skilled because of all of the factors that go into producing these foamed products.

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I'd also say that the task before this court is greatly simplified.

[00:21:16] Speaker 04:
Can I say one more thing on this procedural?

[00:21:22] Speaker 04:
If Parallax thought that the board's decision had introduced a new ground of rejection, was it obligated to seek rehearing?

[00:21:33] Speaker 04:
Or can it come to us as an initial matter and say, and put aside whether it did say that in its opening brief here, separate question, is it obligated to seek rehearing the board?

[00:21:47] Speaker 02:
I think it behooves the patentee to take advantage of that process, but they're not strictly speaking obligated to do so.

[00:21:54] Speaker 02:
There are definitely procedures and

[00:21:57] Speaker 02:
rules in place for raising that specific issue that a new ground of rejection.

[00:22:02] Speaker 04:
I vaguely recall that there is some rule about that, but I don't remember.

[00:22:06] Speaker 03:
Do I have it right that the rule is that if there is a new ground of rejection, only if there is, like if the board recognizes it, then the rule says that the patent applicant can either go directly to our court or go back to the patent examiner for further prosecution.

[00:22:25] Speaker 03:
Do you know?

[00:22:27] Speaker 03:
But it has to be in a situation where the board has in fact said that there's a new ground.

[00:22:32] Speaker 02:
That is correct, Your Honor.

[00:22:33] Speaker 02:
The board first has to recognize that there is a new ground of rejection, which entails asking them to consider that issue.

[00:22:43] Speaker 04:
I would like to add that I think that the... If one put aside all of this obviousness version of the board's decision and just ask the question, was the board right in saying that sameness of the CTE is inherent in what Koffler teaches, defend that.

[00:23:09] Speaker 02:
Yes, Your Honor.

[00:23:10] Speaker 02:
I think that that's an entirely defensible position because Koffler specifically teaches that you're creating these two batches of color, that you're using the exact same ingredients and subjecting them to the exact same processes.

[00:23:24] Speaker 02:
And I think it's a matter of common sense, at least as a starting point, that if you put in the exact same ingredients except for the coloring and you subject those mixtures,

[00:23:34] Speaker 02:
to the same processes under the same conditions, you will get products that have the exact same properties.

[00:23:42] Speaker 04:
You have to either change the... Where's the best portion in Koffler that says same conditions, same process?

[00:24:01] Speaker 02:
Well, I think it's in that example number 17, for example, which starts on APPX 2021.

[00:24:12] Speaker 02:
It's described as two or more separate batches, each with a different color.

[00:24:17] Speaker 02:
That's at line 30 on APPX 2021.

[00:24:22] Speaker 02:
But all of the steps for those two batches are exactly the same.

[00:24:28] Speaker 04:
So some of those, just tell me if I've misunderstood this.

[00:24:34] Speaker 04:
You have studied this more than I have.

[00:24:38] Speaker 04:
So some of the conditions, like temperature conditions, are fairly substantial ranges.

[00:24:45] Speaker 04:
I'm looking at 110 to 130, 100 to 130, 80 to 100, 160 to 175.

[00:24:54] Speaker 04:
If in round number one, say you had 100, and in round number two you had 130, would you inherently get the same CTE out of the two results, even though there's a 30% difference in the temperature?

[00:25:12] Speaker 02:
I don't know the answer to that question, Your Honor.

[00:25:14] Speaker 02:
I don't think there's evidence.

[00:25:15] Speaker 04:
Isn't that a problem that one doesn't know the answer to that question?

[00:25:18] Speaker 04:
I don't mean the lawyer problem.

[00:25:20] Speaker 04:
I mean it's a substantive problem for determining inherency.

[00:25:23] Speaker 02:
I don't believe so, Your Honor, because I don't think that's a fair way to read the disclosure in Coffler.

[00:25:29] Speaker 02:
The fact that it is saying, for example, mix the two kilogram lumps at 80 to 100 degrees C, that

[00:25:40] Speaker 02:
is akin to telling you a starting point to identify my example of the 185 degree number.

[00:25:47] Speaker 02:
Your idealized point, they suggest, will fall in that range.

[00:25:51] Speaker 04:
And that's why... But does something else besides the example 17, something that might apply in fact to all examples, say, whatever you do for rule number one, do exactly the same for rule number two?

[00:26:06] Speaker 02:
Not precisely, Your Honor, because example 17 is the one that has two batches precisely to produce the two colors.

[00:26:14] Speaker 02:
That's what makes it unique.

[00:26:16] Speaker 02:
There are many other examples, but I'm not aware of one in particular.

[00:26:21] Speaker 02:
There are many, many in here that where you're, there's a reason to do it in two separate batches.

[00:26:28] Speaker 02:
And just to finish that point, Your Honor, I think these are identifying starting points for identifying your idealized process control point.

[00:26:36] Speaker 02:
They are not saying you can have it during the process vary anywhere in that range.

[00:26:42] Speaker 02:
And I don't think that from any art, including chemistry, that's a reasonable way to read a manufacturing process, which always identifies a target value to control the process and then moves from that to identify how much variance there can be in order to produce

[00:27:00] Speaker 02:
the desired high quality product.

[00:27:02] Speaker 02:
Every manufacturing process in order to be successful wants repeatability.

[00:27:07] Speaker 02:
And part of repeatability is process control.

[00:27:10] Speaker 02:
Sort of just a basic tenant of all manufacture.

[00:27:13] Speaker 02:
And I think you have to read the example 17 with that in mind.

[00:27:17] Speaker 02:
It's giving you more information than the 085 patent gave you as a person of ordinary skill to start your investigation.

[00:27:25] Speaker 02:
of how am I going to set up this process, but it still has to be refined and optimized according to the ordinary skill in the art.

[00:27:35] Speaker 02:
I'd just like to add briefly, Your Honor, that I think that the issues before this court are greatly simplified because many of the arguments raised in Parallax

[00:27:45] Speaker 02:
brief were not raised before the board and the starting point for this court's consideration should be 37 CFR 41.37 C14 which states that argument or authority must be included in the brief to be considered and also states that any claims that aren't separately argued rise or fall together and any separate argument is specifically waived.

[00:28:12] Speaker 02:
That, so Parallax was on very clear notice that not raising the argument in its brief, not in an attachment or in somewhere in the record to the board would result in waiver of those issues.

[00:28:25] Speaker 02:
And as I've noted, there are additional issues that Parallax has raised for the first time in its reply brief that were not even raised in its opening brief to the court.

[00:28:34] Speaker 02:
And I don't believe that there's any reason of fairness or due process to allow those arguments to stand.

[00:28:45] Speaker 02:
more further questions.

[00:28:46] Speaker 04:
Thank you.

[00:28:51] Speaker 04:
Mr. Van Loben Sells, three minutes.

[00:29:00] Speaker 01:
Thank you, Your Honor.

[00:29:00] Speaker 01:
I just had a couple of follow-up points.

[00:29:03] Speaker 01:
One, to follow up on an answer that Council gave to your question, Your Honor, about whether inherency has been

[00:29:14] Speaker 01:
approved or supported by the board.

[00:29:17] Speaker 01:
And I think you latched exactly onto it that they had not done that.

[00:29:22] Speaker 01:
That if you look at the details of Koffler and you follow what Koffler has, you do not end up with two mats

[00:29:36] Speaker 01:
coming out with the same CTE, especially with that broad of a range of temperature controls.

[00:29:42] Speaker 01:
At least there's no evidence that the board cites to or that the examiner could have cited to that would support that proposition.

[00:29:51] Speaker 01:
And it is the board's burden to prove inherency on that point because

[00:29:56] Speaker 01:
at least the examiner was solely relying on it to prove invalidity here.

[00:30:01] Speaker 01:
So if there is no evidence that the board can point to, the only evidence in the record is what Parallax submitted with its expert declarations that show exactly the opposite, that this is a very volatile process and that even when you have exactly the same or very close to the same ingredients coming in, if you don't closely control

[00:30:23] Speaker 01:
the phoning conditions, including temperature, then you don't end up with mats that have the same or similar CTE.

[00:30:30] Speaker 01:
So we believe that the inherency argument absolutely fails for substantive reasons, and the combination argument

[00:30:41] Speaker 01:
to the extent that there is one, has to fail at least on substantive due process grounds, procedural due process grounds, because the examiner did not present it as a ground for rejection.

[00:30:54] Speaker 04:
That last point, where in your blue brief did you make that point?

[00:30:58] Speaker 04:
The point that the board

[00:31:02] Speaker 04:
moved beyond inherency to talk about a motivation of a skilled artisan to choose certain process conditions that with the same ingredients would produce the same CTE.

[00:31:18] Speaker 04:
Where did you make the argument in your blue brief that it was improper for the board to do that because the examiner had not done it?

[00:31:28] Speaker 01:
I'm not sure that we raised that exactly in our opening papers but we do cover it in our in our reply brief.

[00:31:38] Speaker 01:
Well, hopefully not, Your Honor.

[00:31:39] Speaker 01:
I mean, from our perspective, I think it is an issue of due process for our client, that our client would have had the opportunity to traverse that rejection had it been made.

[00:31:55] Speaker 01:
Certainly, we believe that the art is not analogous, and we had the opportunity, if we did, to traverse that we could have.

[00:32:03] Speaker 01:
And at a minimum,

[00:32:04] Speaker 01:
that the board failed to cite evidence of motivation to combine outside of the two references, which this court's cases say that it has to do when you have non-analogous art.

[00:32:19] Speaker 04:
Thank you.

[00:32:20] Speaker 04:
Thank both parties for your arguments.

[00:32:23] Speaker 04:
The case is submitted.