[00:00:00] Speaker 00: The United States Court of Appeals for the Federal Circuit is now open and in session. [00:00:06] Speaker 00: God save the United States and this honorable court. [00:00:11] Speaker 00: Good morning, ladies and gentlemen. [00:00:13] Speaker 00: We have six cases on our calendar this morning, five being submitted on the briefs and one is being argued. [00:00:20] Speaker 00: That one is Unilock 2017, LLC versus Facebook, [00:00:29] Speaker 00: 191688 and 1689. [00:00:30] Speaker 00: Mr. Stevens, please proceed when you're ready. [00:00:42] Speaker 03: Thank you, Your Honor, and may it please the Court. [00:00:45] Speaker 03: This is Jeffrey Stevens for Patent Owner, May 17, LLC. [00:00:51] Speaker 03: I'd like to start by pointing out that LG is no longer a party to this appeal. [00:00:56] Speaker 03: Facebook and WhatsApp, which I'll collectively refer to as Facebook, should not be presenting argument on claims one through six and eight. [00:01:05] Speaker 03: Although LG and Facebook filed a combined brief, there's no dispute that Facebook and WhatsApp were properly held by the board to be stopped from challenging claims one through six and eight. [00:01:18] Speaker 01: Mr. Stevens, I have a few questions for you. [00:01:23] Speaker 01: This is Judge Wallach. [00:01:25] Speaker 01: On page 22 of the blue brief, you contend, I'm quoting, although COFAX is not designated presidential by the PTAB, the PTAB's failure to even address Unilock's arguments regarding COFAX, which is a case naming Unilock as a party, raise actions, raise issues of due process and fairness due to the unexplained inconsistent treatment of the circumstances in different cases. [00:01:55] Speaker 01: You didn't cite any authority for that proposition. [00:01:57] Speaker 01: Do you have any? [00:02:03] Speaker 03: No specific authority, Your Honor. [00:02:05] Speaker 03: I think the argument is one of fairness. [00:02:08] Speaker 03: The patent owner here pointed out a situation in which, in another case, it was where the board looked at the fact that there were three parties [00:02:23] Speaker 03: together challenging the patent and that on that basis, they were real parties in interest of each other for that purpose. [00:02:31] Speaker 01: Okay, I asked you for authority. [00:02:34] Speaker 01: Let me ask you another one. [00:02:36] Speaker 01: On page 27 of the blue brief, you argue that, quote, as a matter of policy and statutory construction, the board's decision to allow the challenge in dependent claim seven to proceed [00:02:49] Speaker 01: would render meaningless the acknowledged estoppel applicable to independent claim one. [00:02:57] Speaker 01: You didn't cite any authority for that proposition. [00:03:00] Speaker 01: Do you have any? [00:03:03] Speaker 01: I'm asking about legal authority, not argument. [00:03:10] Speaker 03: Well, I believe even under principles of collateral estoppel, that would be the case, Your Honor. [00:03:20] Speaker 03: by because we did cite authority, right, that when one claim, an independent claim is shown not to be obvious, then the dependent claim are necessarily not shown to be obvious either. [00:03:38] Speaker 03: So that's the authority that we have for that. [00:03:41] Speaker 03: And to allow Facebook and WhatsApp to then challenge claim seven, [00:03:50] Speaker 03: would render that, that meaning was simply because they would be allowed to and required to make a showing for claim one that they're stopped from, from making it. [00:04:00] Speaker 04: Okay. [00:04:01] Speaker 04: Thank you. [00:04:02] Speaker 04: But this is Judge Chen. [00:04:04] Speaker 04: I'm sorry. [00:04:04] Speaker 04: Go ahead, Judge Laurie. [00:04:06] Speaker 00: Go ahead, Judge Chen. [00:04:08] Speaker 04: Oh, I was just going to follow up on, uh, counsel's response to Judge Wallach. [00:04:13] Speaker 04: Um, in this particular instance though, if Facebook, um, [00:04:17] Speaker 04: persists in attacking claim seven, it's not attacking claim one. [00:04:21] Speaker 04: It's not anything, any challenge to claim seven wouldn't require the board to announce that claim one is invalid. [00:04:31] Speaker 04: Is that right? [00:04:34] Speaker 04: Well, they would have to determine that. [00:04:38] Speaker 04: I'm just asking a question. [00:04:40] Speaker 04: It's a claim by claim analysis. [00:04:41] Speaker 04: So if Facebook is attacking claims seven and succeeds, [00:04:47] Speaker 04: that wouldn't necessarily automatically render claim one invalid. [00:04:54] Speaker 04: Am I right? [00:04:59] Speaker 04: I understand your argument about claim scope, but claim one would still be a valid claim. [00:05:08] Speaker 03: I guess, I mean, the issue is the claim scope, that all elements of claim one are included in claim seven and to show that [00:05:16] Speaker 03: The TTO would issue a certificate, right? [00:05:20] Speaker 04: The board would issue a certificate concluding that claim seven is unpatentable, but it wouldn't make any comment in that certificate about claim one. [00:05:33] Speaker 04: Is that right? [00:05:36] Speaker 03: Well, it would be, but by extension, by virtue of the scope of those claims, it may or may not list it. [00:05:45] Speaker 03: as a claim, but I don't believe the statute is limited in that respect. [00:05:51] Speaker 04: It's with respect to a claim and... In the certificate, the Section 318B certificate that the PTAB would be issuing, it would cancel Claim 7, but it wouldn't comment about Claim 1. [00:06:06] Speaker 04: Am I right? [00:06:10] Speaker 03: I presume that's how it would work. [00:06:13] Speaker 03: Yes, Sean. [00:06:15] Speaker 00: Mr. Stevens, this is Judge Lowry. [00:06:17] Speaker 00: Let's get straight with this case above. [00:06:21] Speaker 00: Did you say that LG is not part of this appeal? [00:06:24] Speaker 03: That's correct, Your Honor. [00:06:28] Speaker 00: Well, except for Claim 7, the other parties are stopped, are they not? [00:06:39] Speaker 00: So are you saying that all the claims except, none of the claims except for Claim 7 [00:06:45] Speaker 00: are before us? [00:06:52] Speaker 03: They should not be, Your Honor. [00:06:56] Speaker 03: The patent owner seeks to reverse the judgment on all the claims, but there is no party here arguing in favor of the board's judgment with respect to claims one through six and eight because [00:07:15] Speaker 03: LG is no longer a party. [00:07:18] Speaker 00: But that's not the main reason. [00:07:20] Speaker 00: When does it? [00:07:24] Speaker 00: We still have to make a decision. [00:07:26] Speaker 00: Or is there no longer a case of controversy? [00:07:31] Speaker 03: Well, there is still a case of controversy, Your Honor, because the patent donor, appealing from a judgment of the agency, still has the right to [00:07:45] Speaker 03: overturned the judgment based on its patent rights that have been adjudicated by the board. [00:07:55] Speaker 04: Mr. Stevens, just following up on the withdrawal of LG as a party in this appeal, am I understanding it correctly that LG itself did not file that motion to withdraw? [00:08:07] Speaker 04: It was your side that filed that motion? [00:08:13] Speaker 04: We did. [00:08:14] Speaker 04: Can you explain that? [00:08:16] Speaker 04: Why is it that Uniloc was the one that filed the motion speaking to withdraw another party here, LG, from the appeal? [00:08:28] Speaker 04: I didn't quite understand why LG wasn't speaking for itself. [00:08:34] Speaker 03: Well, Your Honor, I think it's probably mostly just from a practicality standpoint. [00:08:41] Speaker 03: Uniloc entered a settlement with LG. [00:08:44] Speaker 03: And, you know, LG at that point wouldn't necessarily want to be doing any more than it needed to, to get out. [00:08:53] Speaker 03: So Uniloc really, I would say as a, as a favor to LG, put the paperwork together, but it was, LG was not opposed and, and Uniloc could have, you know, demanded that LG do it, but there's really nothing more to it than that. [00:09:16] Speaker 00: You may proceed further, Mr. Stevens. [00:09:20] Speaker 03: Yes, Your Honor. [00:09:20] Speaker 03: Thank you. [00:09:25] Speaker 03: I would like to talk about LG and its motion to join Facebook's petition here. [00:09:46] Speaker 03: tied its interest up with Facebook's and requesting to join Facebook's IPR. [00:09:52] Speaker 03: And we contend that in so doing, LG became a real part of it. [00:09:56] Speaker 03: Is this an issue that's reviewable by us? [00:10:02] Speaker 03: We contend that it is, Your Honor. [00:10:04] Speaker 03: Yes. [00:10:09] Speaker 04: Are you familiar with our decisions, Facebook versus Windy City? [00:10:15] Speaker 04: Credit acceptance? [00:10:20] Speaker 03: I'm more familiar with the ESIP decision, Your Honor, that the other side brought up in their brief. [00:10:31] Speaker 04: Credit acceptance versus Westlake Services and Facebook versus Windy City Innovations are absolutely critical, decisive authority from this Court on the questions of [00:10:42] Speaker 04: whether Joinder and Estoppel here in your case are reviewable or not? [00:10:52] Speaker 03: Well, I guess we're certainly not challenging whether or not LG could have been joined. [00:11:09] Speaker 04: You're making an Estoppel argument, right? [00:11:12] Speaker 03: Yes, Your Honor. [00:11:18] Speaker 04: OK. [00:11:19] Speaker 04: Well, given your unfamiliarity with credit acceptance, why don't we just go ahead and assume for purposes of the remainder of this argument that this is an issue that's reviewable by us. [00:11:32] Speaker 04: Why is LG necessarily a stop tier? [00:11:38] Speaker 03: Thank you, Your Honor. [00:11:39] Speaker 03: I would like [00:11:41] Speaker 03: To request, if I may, if it would help the court, if you could do some supplemental briefing on the reviewability of that question, which was not raised by any other party. [00:11:58] Speaker 00: Counsel, you're responsible for knowing the law and fully presenting the law to us and being prepared to respond on it. [00:12:05] Speaker 00: I don't see why supplemental briefing would be appropriate. [00:12:09] Speaker 00: You're supposed to make your case the first time. [00:12:13] Speaker 04: Before you go, why don't you go ahead and give us a very short answer on what is it that happened here that is evidence that LG was impermissibly seeking some second bite at the Apple in attacking your client's patent here by participating in this IPR that is on appeal? [00:12:45] Speaker 03: Well, the crux of it is that LG could see exactly what was going on in terms of Facebook having joined the previous Apple IPR when they voluntarily chose to tie up their interests with Facebook in this IPR. [00:13:03] Speaker 03: So they don't merely have a common interest with Facebook. [00:13:05] Speaker 03: They formalize that interest by joining Facebook as a co-party, gaining the ability to control [00:13:13] Speaker 03: these proceedings as a co-party. [00:13:16] Speaker 03: And in so doing, they could have seen and should have known that when Facebook, when the judgment came down in the earlier IPR to which Facebook had joined, that Facebook would be stopped. [00:13:35] Speaker 03: And so in tying their interests in that way. [00:13:38] Speaker 04: Again, let me try again. [00:13:41] Speaker 04: For Facebook, [00:13:42] Speaker 04: as a party, I think we can all see how the estoppel worked against them here in this proceeding because given that Facebook joined the Apple IPR and that Apple IPR reached a conclusion that the claims were in fact patentable, not unpatentable, then Facebook here, if it were to maintain this IPR, it would be [00:14:08] Speaker 04: impermissibly getting a second bite at the Apple and trying to attack these claims. [00:14:12] Speaker 04: And so the patent board shut Facebook down and said, no, you are stopped under section 315. [00:14:21] Speaker 04: Fine. [00:14:21] Speaker 04: That's Facebook. [00:14:23] Speaker 04: Now we have LG. [00:14:24] Speaker 04: LG did not participate in the Apple IPR. [00:14:27] Speaker 04: As far as I know, LG has never before tried to attack the validity of these claims. [00:14:33] Speaker 04: So what I'm trying to understand here is, [00:14:36] Speaker 04: Just how is it that LG, by seeking to maintain its role in this IPR, was impermissibly getting a second bite at the apple? [00:14:49] Speaker 04: Do you see the question? [00:14:52] Speaker 03: I do. [00:14:52] Speaker 03: That is the question I was attempting to answer, which is that the statute says that the [00:15:05] Speaker 03: petitioner or its real party in interest or privy of the petitioner may not request to maintain a proceeding with respect to a claim on the ground raised or reasonably could have raised and LG became a real party in interest or privy of Facebook in seeking to join this IPR and tying its interests up with those of Facebook in a formal manner in this proceeding. [00:15:33] Speaker 03: It's the same as if [00:15:35] Speaker 03: Facebook and LG had gotten together and said, let's together challenge this patent. [00:15:42] Speaker 03: There really shouldn't be any difference that LG came around later and requested to join her after Facebook had already filed this petition. [00:15:54] Speaker 03: Either way, they would be getting around the statute. [00:15:57] Speaker 03: I mean, essentially, Facebook could rope anyone in to [00:16:04] Speaker 03: take over for it once it became the stop uh... and so it lg become very evident in this is there any evidence in this record that face book recruited algae or roped algae and to this i p r uh... no your honor not today and aware of but it's an illustration of you know the intention of the of the statute is double statute and and how it you know could [00:16:34] Speaker 03: potentially be circumvented, if it's not given the meaning that we think it has, which is that, you know, Facebook, LG is a real party in interest or privy of Facebook by joining together with it in this IPR. [00:16:52] Speaker 03: And it can't be, you know, surprised that, you know, Facebook is a stopped and by tying its interests together, [00:17:01] Speaker 03: Therefore, you know, shouldn't be surprised that it also is a stopped from pursuing those same claims, even if it did not directly participate in the earlier proceeding. [00:17:12] Speaker 03: I would like to reserve a little of my time for rebuttal, if I may. [00:17:18] Speaker 00: You have used it up, but we will give you two minutes for rebuttal. [00:17:21] Speaker 00: In the meantime, let's hear from Mr. Morton. [00:17:26] Speaker 02: Thank you, your honor. [00:17:26] Speaker 02: May I please the court? [00:17:29] Speaker 02: This is Philip Morton on behalf of the Apple East Facebook and WhatsApp. [00:17:33] Speaker 02: I'd like to address the issue of the second bite at the Apple that, um, um, is that it keeps being referred to here. [00:17:41] Speaker 04: Mr. Morton, since you're not representing LG and you can't possibly be representing LG, uh, what issues [00:17:55] Speaker 04: that are pending in this appeal, can you actually address? [00:18:02] Speaker 04: What is the scope? [00:18:03] Speaker 04: What are the boundaries on what you can argue today? [00:18:12] Speaker 02: We believe that we can argue at a minimum that Facebook can proceed on claim seven of this patent and also the claims in the 1428 appeal. [00:18:27] Speaker 02: claims 9 through 12, 14 through 17, 25, and 26. [00:18:32] Speaker 02: But we also believe we can still address the issues of LG's, you know, the arguments about LG being a stop here. [00:18:47] Speaker 04: Can you explain why? [00:18:48] Speaker 04: Because just to be honest, I don't see how you can. [00:18:52] Speaker 04: That would be LG's interest. [00:18:55] Speaker 04: And LG has settled out of this case and is no longer a party here. [00:18:59] Speaker 04: And you are stopped from challenging anything related to claims 1-6 and 8. [00:19:08] Speaker 04: And the LG estoppel question is part and parcel of whether the board correctly [00:19:20] Speaker 04: rendered a final written decision on claims 1-6 and 8? [00:19:27] Speaker 02: Yes, I understood, Your Honor. [00:19:31] Speaker 02: I understand that we cannot address the merits of claims 1-6 and 8. [00:19:37] Speaker 02: But with respect to the arguments that Facebook was, you know, in privity with LG, you know, so, you know, we can argue that as well. [00:19:50] Speaker 02: The Uniloc has, you know, argued with respect to Claim 7 that we're stopped as well. [00:19:57] Speaker 04: Yes, I don't dispute. [00:19:58] Speaker 04: You can, you know, argue and defend that position. [00:20:06] Speaker 04: Just because you say you can defend the board's decision on an LG not being stopped, I don't know why that makes it so. [00:20:23] Speaker 02: As I said, we can't contest the merits on claims 1 through 6 and 8, but we can for claim 7. [00:20:32] Speaker 02: And the way this has been argued by Uniloc, the estoppel issues are all bound up together. [00:20:39] Speaker 04: So, you know... Let's assume for the moment I disagree with that, that there are two separate estoppel arguments, one with respect to you and claim 7 and the second one with respect to LG and claims 1-6 and 8. [00:20:53] Speaker 04: and that I can see how it was clearly defined that way throughout the proceeding. [00:20:59] Speaker 04: So, why can you argue in defense of LG avoiding estoppel in this proceeding? [00:21:08] Speaker 02: Well, I can argue it as it relates to Claim 7, certainly, and I'm happy to proceed on that basis, Your Honor. [00:21:15] Speaker 02: I understand your disagreement on Claims 1 through 6 and 8. [00:21:20] Speaker 04: Okay, it sounds like we understand the boundaries of the scope of your argument. [00:21:25] Speaker 02: Go ahead. [00:21:29] Speaker 02: Okay, thank you, Your Honor. [00:21:30] Speaker 02: So, Facebook is not stopped on claims seven. [00:21:34] Speaker 02: The plain language of the statute is clear that a stopple runs to the individual claims, not to the, you know, to other claims that are in the patent, and that's clear in 315. [00:21:49] Speaker 04: I'm sorry, before you begin, does Facebook concede that this is reviewable? [00:21:55] Speaker 02: Yes, Your Honor. [00:21:58] Speaker 02: So when we filed our brief, the Windy City versus Facebook decision that was issued in September 2020 had not issued yet. [00:22:09] Speaker 02: But given the court's ruling there, we do agree that or we're not contesting in this action that this is reviewable. [00:22:22] Speaker 04: How come you didn't file a 28-J letter? [00:22:25] Speaker 04: I mean, you're Facebook, right? [00:22:28] Speaker 04: The name of that case is Facebook versus Windy City. [00:22:31] Speaker 04: Yes, Your Honor. [00:22:32] Speaker 04: It goes directly to the heart of your argument in your red brief against reviewability in this appeal. [00:22:38] Speaker 02: Yes, Your Honor, in hindsight. [00:22:40] Speaker 02: We probably should have done that. [00:22:42] Speaker 02: And we'll take note to make sure that happens in the future. [00:22:53] Speaker 02: So proceeding, as I was saying, Facebook has not stopped on claim seven. [00:23:01] Speaker 02: Validity is determined on a claim-by-claim basis. [00:23:06] Speaker 02: That's clear from 35 U.S.C. [00:23:07] Speaker 02: 282A. [00:23:08] Speaker 02: The concerns about this being a piecemeal petition or an end run around the estoppel [00:23:23] Speaker 02: That just doesn't apply here. [00:23:28] Speaker 02: The facts are that LG filed its own independent petition before Facebook's petition in the 1427 and 1428 IPRs was [00:23:45] Speaker 02: instituted and LG filed this before any estoppel issue had been raised. [00:23:53] Speaker 02: The first time estoppel was raised was in the December 4, 2017 institution decision in the Facebook IPRs. [00:24:02] Speaker 02: Uniloc chose not to move forward, not to raise any issues of estoppel as it relates to LG until March 23rd, which was after the LG IPR had been instituted on March 6th, and after the Uniloc patent owner responsive had filed in December of 2017. [00:24:27] Speaker 02: Uniloc never argued anything about there being any estoppel here. [00:24:31] Speaker 02: The timeline is clear that LG's petition was independent of Facebook's. [00:24:37] Speaker 02: There's no evidence in the record that LG and Facebook... Why are you talking about LG? [00:24:48] Speaker 04: Your Honor, I'm speaking to the... I thought we were talking about 27 and whether you are stopped from maintaining [00:24:59] Speaker 04: this IPR with respect to your challenge to Claim 7. [00:25:07] Speaker 02: Okay. [00:25:08] Speaker 02: Well, I'm speaking about the history here. [00:25:13] Speaker 02: I can move on from that if you'd like, Your Honor. [00:25:18] Speaker 02: So, with respect to Claim 7, [00:25:22] Speaker 02: Yep. [00:25:23] Speaker 02: There's an argument here that Facebook should have added this in the Apple IPR, the 225 IPR that Facebook had joined. [00:25:33] Speaker 02: But as the court's decision in Windy City, 973F1321 held, Facebook could not have added new issues to that IPR. [00:25:45] Speaker 02: So we could not have added it in that instance. [00:25:54] Speaker 02: That's the argument I have on claim seven, unless you have any other additional questions. [00:26:11] Speaker 00: Then proceed, Mr. Morton, with the rest of your argument. [00:26:18] Speaker 01: Okay. [00:26:24] Speaker 00: If you have any. [00:26:27] Speaker 02: Well, with respect to estoppel, I do not [00:26:35] Speaker 02: And then with respect to the merits of claims seven in the 1427 IPR and claims nine through 12, 14 through 17, 25 through 26 in the 1428 IPR, we think the briefs lay out in great detail why the decisions of the board should be affirmed. [00:27:00] Speaker 02: And so if Your Honors have no questions about that, [00:27:07] Speaker 02: I yield the rest of my time. [00:27:09] Speaker 00: All right. [00:27:09] Speaker 00: Thank you, Mr. Moore. [00:27:11] Speaker 00: Mr. Stevens, there's two minutes for a bottle. [00:27:19] Speaker 03: Thank you, Your Honor. [00:27:20] Speaker 03: This is Jeffrey Stevens for Patent Owner. [00:27:22] Speaker 03: I wanted to clarify. [00:27:27] Speaker 03: I know Petitioner's Council was not [00:27:34] Speaker 03: was straying somewhat from the bounds discussed of the argument, but it did go into the timeline, so I wanted to correct that the petitioners acknowledged in their brief that the patent owner had raised an argument previously as to the estoppel of LG. [00:27:55] Speaker 03: That argument was raised in the patent owner's response in the 1427 IPR. [00:28:03] Speaker 03: The board [00:28:05] Speaker 03: inexplicably in their decision on the request for rehearing, stated that this was the first time that Pat Nohner had argued, that Edelmauk had argued that LG was stopped as a real party in this district preview, but that in fact was not true. [00:28:24] Speaker 03: The LG brief says this is harmless error, but if you look at the board's rehearing decision, it's very clear that the board [00:28:36] Speaker 03: is viewing this in the context of a request for rehearing, is viewing it with its mistaken understanding that this is the first time the argument had been presented. [00:28:47] Speaker 03: And as such, it required Uniloc to meet some burden to show that LG was a real party in interest or privy, when in actuality that burden, once the issue has been raised by Uniloc, that burden should have fallen to [00:29:04] Speaker 03: LG to show that it was not a real party interest or privy of Facebook. [00:29:08] Speaker 03: And so that is apparent from the way that the board approaches and addresses the arguments and the decision on the request for re-hearing. [00:29:20] Speaker 03: And I will stop there. [00:29:26] Speaker 03: Thank you. [00:29:27] Speaker 00: Thank you, Tom. [00:29:28] Speaker 00: So we have your argument. [00:29:29] Speaker 00: But before we conclude, I'd like to ask my colleagues whether either of them [00:29:34] Speaker 00: wishes, supplemental briefing on credit acceptance in Facebook? [00:29:41] Speaker 01: This is Judge Wallach. [00:29:43] Speaker 01: Not at all. [00:29:43] Speaker 01: Thank you. [00:29:45] Speaker 01: No, thank you. [00:29:47] Speaker 00: All right. [00:29:47] Speaker 00: We will not need supplemental briefing. [00:29:50] Speaker 00: Thank you. [00:29:51] Speaker 00: The case is taken under submission. [00:29:57] Speaker 00: The honorable court is adjourned until tomorrow morning at 10 AM.