[00:00:00] Speaker 01: Let's begin with the first argument. [00:00:03] Speaker 01: Docket number 22-1043, Netflix Incorporated versus Divics, LLC. [00:00:09] Speaker 01: Mr. Fleming, you have 12 minutes in your opening. [00:00:12] Speaker 01: Please go right ahead. [00:00:13] Speaker 03: Good morning, Your Honor. [00:00:14] Speaker 03: May it please the court, Mark Fleming on behalf of Netflix. [00:00:17] Speaker 03: The claimed point of novelty of the 920 patent is the key ladder made up of three encryption keys. [00:00:23] Speaker 03: In this IPR, Divics did not deny that the Chan reference discloses that. [00:00:28] Speaker 03: Instead, the dispute turned on [00:00:29] Speaker 03: whether the prior art disclosed obtaining a whole frame before decryption began. [00:00:34] Speaker 03: And there's a very straightforward error that at the very least requires a remand. [00:00:37] Speaker 03: We argued, and there's no dispute on the merits, that regardless of claim construction and regardless of Chen, the GRAB 333 reference discloses obtaining whole frames before beginning decryption. [00:00:48] Speaker 03: The board itself summarizes that disclosure on Appendix 21, where it quotes GRAB's Paragraph 19. [00:00:54] Speaker 03: And then three pages later on Appendix 24 and 25, [00:00:58] Speaker 03: summarized and quoted our arguments for how Grab taught obtaining encrypted content, citing our petition at 3233, as well as Grab's paragraphs 19 and 56. [00:01:08] Speaker 03: DIVIX does not deny on the merits that Grab encrypted data frame by frame or at the frame level. [00:01:14] Speaker 03: In fact, it admitted that. [00:01:15] Speaker 03: In its patented response, its expert Dr. Nielsen admits that in his declaration. [00:01:19] Speaker 03: But the board didn't address this argument because it believed that Chen's disclosure was dispositive, and that was [00:01:24] Speaker 03: error. [00:01:25] Speaker 03: We relied on both references. [00:01:26] Speaker 03: And if the board believed that Chen didn't disclose the limitation, then it should have addressed Grab. [00:01:31] Speaker 03: And it simply didn't. [00:01:32] Speaker 03: The only response from DIVIX is waiver. [00:01:35] Speaker 03: But DIVIX admits on pages 64 and 65 of the Red Brief that our petition says that Grab, independently of Chen, [00:01:42] Speaker 03: teachers obtaining encrypted content, and the board fully recognized that we made this argument. [00:01:47] Speaker 01: It quoted it in the decision-making- I understand your appeal. [00:01:51] Speaker 01: You have three arguments, and I think I quickly heard an integration of all three in the opening of your argument today, but you're primarily focusing on what I believe be argument number three. [00:02:02] Speaker 03: I'm beginning with that, Your Honor, just to make clear that at the very least there needs to be a remand for that. [00:02:07] Speaker 03: And I will proceed to the other two. [00:02:08] Speaker 03: I just wanted to make sure it was very clear. [00:02:10] Speaker 01: I think we're familiar with the paragraph at A7035 that you're referring to about your petition. [00:02:17] Speaker 01: But what about the petitioner reply? [00:02:20] Speaker 01: I mean, to what degree did the reply or the oral argument really try to focus on [00:02:27] Speaker 01: a combination of references where you were relying on the three-level key ladder of Chen with the frames and partial encryption of those frames of grab. [00:02:41] Speaker 01: I'm not sure I saw that come out in the petition or reply, or you were a argument before the court. [00:02:47] Speaker 03: There are a couple of responses to that, Judge Chen, if I may. [00:02:50] Speaker 03: On 7461 and 7462, [00:02:53] Speaker 03: We say that Chan and Grab both teach encrypting and decrypting video frames. [00:02:59] Speaker 03: And at the hearing slides on 7744, we show that DIVIX admits, and this is true in their Patnona response, that Grab 333 teaches partial encryption of video frames. [00:03:10] Speaker 03: But more to the point, Your Honor, to the extent there was any confusion about this, it's not as though the board forgot about this, because when we got to the final written decision on 24 and 25 of the appendix, [00:03:19] Speaker 03: They quote and specifically cite this very argument. [00:03:23] Speaker 03: So it was certainly preserved sufficiently that the board knew about it. [00:03:26] Speaker 03: They summarized it. [00:03:27] Speaker 03: They said we were making the argument. [00:03:28] Speaker 03: They cited our petition. [00:03:29] Speaker 03: They cited Dr. McDaniel's declaration. [00:03:31] Speaker 03: They just simply didn't address it on the merits. [00:03:33] Speaker 03: So at the very least, we need a remand as to that. [00:03:36] Speaker 03: Now, in addition to that, when the court remands, as we believe it should, the court should also give guidance on the scope of the claims. [00:03:42] Speaker 03: And the board made a legal error there when it held for the first time in the final written decision [00:03:46] Speaker 03: that the claims required that whole encrypted frames be obtained before decryption begins. [00:03:54] Speaker 03: And the frames are not so limited. [00:03:56] Speaker 00: The board found that frames exist in a... Proposed a claim construction for that provision, that part of it in your petition? [00:04:03] Speaker 03: Neither party proposed a construction of that limitation. [00:04:07] Speaker 03: We believe that the claim on its face by its plain language does not contain such a requirement. [00:04:13] Speaker 03: When Divics then started suggesting [00:04:16] Speaker 03: that we had an obligation to show that frames are received on the receive end, whole frames are obtained before decryption even begins. [00:04:25] Speaker 03: We opposed that. [00:04:26] Speaker 03: We made it very clear at the oral hearing on 7820 and 7821 that the patent owner was misconstruing the claims and trying to say it required obtaining encrypted frames, which it does not require. [00:04:43] Speaker 03: It simply requires obtaining encrypted [00:04:45] Speaker 00: What do we do if we find both of your constructions reasonable? [00:04:51] Speaker 00: I mean, you didn't raise this as a claim construction argument, so normally I think we would find it forfeited and just look at this in terms of substantial evidence to see whether the board's interpretation of whether the prior art discloses frames and its view is supported. [00:05:10] Speaker 00: But if we send it back, I mean, are we obligated to do any kind of claim construction or note that? [00:05:16] Speaker 00: I'm just, procedurally this, I mean, if we didn't have the sending it back part, I think you'd be in trouble because you hadn't preserved a claim construction argument, and I don't really see anything wrong with the board's reading, although I see something appealing to yours as well. [00:05:31] Speaker 00: But are we obligated to do something if we send it back, or is that up to the board to decide if it wants to? [00:05:39] Speaker 00: determine that there's a dispute among you two between the claim and raise it for itself for the first time. [00:05:45] Speaker 03: So judges, let me address the procedural point first, and then I'll address why I think that our claim construction is the preferable one. [00:05:53] Speaker 03: I think this, as in the entertainer versus Hulu case, which we cite, I think this is a situation where the board came up with a claim construction that had not been foreshadowed in the decision on institution. [00:06:04] Speaker 03: We made clear at the hearing what our position was, which was that the claims do not require that a whole frame be received before decryption begins. [00:06:14] Speaker 03: So it was clear what our position is. [00:06:15] Speaker 00: Did you ask for the board to construe it at the hearing though? [00:06:18] Speaker 03: No, no party asked for a construction. [00:06:20] Speaker 03: It was only once the final written decision came out that it was... But I think they made their position clear too. [00:06:25] Speaker 00: Well, they were making their position in terms of what... I mean, this is just frustrating when you have disputed claims go, but neither party wants to ask for a claim construction. [00:06:35] Speaker 00: I mean, it's not O2 Micro because we're at the board, but it's very similar. [00:06:39] Speaker 00: I mean, why didn't you ask? [00:06:40] Speaker 00: When you saw that they were saying whole frames, why didn't at least at the oral hearing, you say, you really need to construe this. [00:06:47] Speaker 00: This isn't an evidence issue. [00:06:49] Speaker 00: This is a claim construction issue. [00:06:51] Speaker 03: So on 7820, Your Honor, [00:06:55] Speaker 03: Council for Netflix says, one of the major differences is starting at line 16 on 7820. [00:07:01] Speaker 03: One of the major differences here is how patent owner has chosen to try to describe the claims. [00:07:06] Speaker 03: And they're always focused on encrypted frames, encrypted frames, encrypted frames. [00:07:09] Speaker 03: That's not the language you just read from limitation 1C. [00:07:12] Speaker 03: 1C is obtaining encrypted content using a playback device where the content includes the frames of video and at least a portion are encrypted. [00:07:20] Speaker 03: And then going on to page 7821, [00:07:22] Speaker 03: Patent owner keeps on trying to switch this, work this argument about the claims are about encrypted frames. [00:07:27] Speaker 03: They're not. [00:07:28] Speaker 03: They're about encrypted portions of frames and encrypted content. [00:07:32] Speaker 03: And that encrypted content is the portions of the frames. [00:07:34] Speaker 03: And again, the board understood what we were doing. [00:07:36] Speaker 03: Because on page 7823, there's a question from one of the APJs starting at line two. [00:07:42] Speaker 03: But when that one C says includes frames of video, petitioner's point would be if one of steel could identify where the frame is. [00:07:50] Speaker 00: I understand your argument, but if you look throughout [00:07:53] Speaker 00: Not just one, if you don't just look at one C, but you look throughout all of the limitations in claim one, there's some that do refer to frames in terms of the way your opponent would be seeing them, I think. [00:08:06] Speaker 03: I don't think so, Your Honor. [00:08:07] Speaker 03: So now we're on to the substance of the claim construction. [00:08:09] Speaker 03: The key about, I'll start with one C and then I'll expand out to the other limitations. [00:08:13] Speaker 03: One C says obtaining encrypted content. [00:08:16] Speaker 03: There's no question that even in a transport stream implementation, [00:08:20] Speaker 03: encrypted content is received. [00:08:22] Speaker 03: It has to be, otherwise you couldn't play the movie back. [00:08:25] Speaker 03: The content includes frames of video. [00:08:28] Speaker 03: Again, the board found on page 41 of the appendix that in a transport stream implementation, the transport stream contains frames. [00:08:35] Speaker 03: Frames are transmitted, frames exist. [00:08:39] Speaker 01: Can we unpack that last statement you just inserted? [00:08:42] Speaker 01: Certainly. [00:08:43] Speaker 01: My understanding is the TS packets, assuming that that is what Chen is disclosing, [00:08:50] Speaker 01: that's being transmitted, they don't have the frames per se inside those TS packets. [00:08:56] Speaker 01: The best that any one given TS packet could have is just a piece of a frame. [00:09:02] Speaker 03: For a single TS packet, yes, that is true. [00:09:05] Speaker 01: And so that's the concern. [00:09:07] Speaker 01: The concern is that the expectation of the board, as was pointed out in the board's institution decision, was that Chen could arguably lack disclosing the transmission of frames. [00:09:20] Speaker 03: Well, let's be clear Judge Chen, what they said in the institution decision was there was a dispute of fact as to whether a transport stream would include frames. [00:09:28] Speaker 03: That was decided in our favor repeatedly in the final written decision where the board acknowledges. [00:09:34] Speaker 01: But the debate, as I understand it, is that PS packets themselves are not frames and [00:09:44] Speaker 01: Then the question came down to whether Chen is transmitting frames or is it transmitting TS packets. [00:09:54] Speaker 01: And there was a clear dichotomy between whether that TS packet is not a frame. [00:10:00] Speaker 01: That's my understanding of how the board understood the case. [00:10:04] Speaker 01: And so when you're saying that the board agreed that TS packets are frames, I'm not so sure that the board could be characterized the same. [00:10:14] Speaker 03: I hope I didn't say that the board said that TS packets are frames. [00:10:18] Speaker 03: What the board did say was that frames exist in the transport stream and that the transport stream transmits frames. [00:10:25] Speaker 03: And that, I think, is undeniable. [00:10:27] Speaker 01: How would the frames be in the TS packet transmission? [00:10:33] Speaker 03: Well, first of all, as the board recognized on 41, they have to be, otherwise you wouldn't be able to watch the movie at the other end. [00:10:39] Speaker 01: I know, but can you break it down and explain, can you paint a picture in my mind of exactly what's going on with the TS packet transmission? [00:10:48] Speaker 01: I've got an idea, and I can't tell exactly what your idea is. [00:10:52] Speaker 01: So let's find out what your idea is. [00:10:54] Speaker 03: My idea is, as the Chan reference discloses, you start with a video elementary stream, which is the big stream, as the board calls it, that comes from the content provider. [00:11:03] Speaker 03: It is then turned into a packetized elementary stream with each packet corresponding to a frame. [00:11:11] Speaker 03: At that point, and the board and DIVIX both recognize this, you could either encrypt the packetized elementary stream first and then break it into transport stream packets, or you could break it into transport stream packets and then encrypt them. [00:11:23] Speaker 03: You can do either. [00:11:24] Speaker 03: A person with a skill in the art knew how to do both. [00:11:27] Speaker 01: So what's inside a given TS packet? [00:11:29] Speaker 03: The TS packet is, I believe, something like 188 bytes. [00:11:32] Speaker 03: It has a header. [00:11:33] Speaker 03: And then it has a portion of the content. [00:11:36] Speaker 03: And everyone agrees it can be a portion of an encrypted frame, which is what all the claim requires be encrypted. [00:11:45] Speaker 03: That the plurality of frames of video are encrypted using at least one frame encryption key. [00:11:52] Speaker 03: And then on the back end, when you get to limitation one F and one G, [00:11:58] Speaker 03: The receive-in identifies any portions of a frame that are encrypted, and then in 1J decrypts the encrypted portions of the frame. [00:12:05] Speaker 01: Even if I were to read what your counsel argued before the board as making a claim construction argument about frames and encrypted content, isn't that too late to be raising a claim construction argument in an IPR? [00:12:24] Speaker 01: Oh, I don't think so, your honor, because this is a situation where at the Divics... Typically, your conception of the claim is a fully realized one in the petition. [00:12:34] Speaker 01: Oh, and it was. [00:12:34] Speaker 01: And then maybe at best, you point out a misunderstanding of the claim by the patent owner in the petitioner reply. [00:12:46] Speaker 01: But it seems very peculiar to wait until the oral argument after all briefing is done to then for the very first time [00:12:54] Speaker 01: bring up, oh, here's a conception of the claim that I want to advance that I have never advanced before. [00:13:01] Speaker 03: I don't think that's a fair account, if I may, Judge Chen. [00:13:04] Speaker 03: I mean, first of all, we believe that the plain language of the claim contains no order of steps requirement. [00:13:10] Speaker 03: I don't think David suggested that there is one. [00:13:12] Speaker 03: It doesn't matter. [00:13:13] Speaker 03: I mean, no one disputes that whether you're talking about Chen or any other conditional access system, frames are going to be obtained on the receive end. [00:13:20] Speaker 03: The only point that they're standing on is that supposedly a whole frame needs to be received before any decryption of a portion starts. [00:13:27] Speaker 03: That is not something we anticipated or suspected DIVIX would argue when we filed our petition. [00:13:32] Speaker 03: We simply relied on the plain language. [00:13:34] Speaker 03: Then when they filed their patent owner response, the decision on institution does not suggest that the board was in any way even receptive to this argument. [00:13:42] Speaker 03: Nothing in the decision on institution suggests that the board thought that there had to be... What if we disagree with that? [00:13:49] Speaker 03: Well, if you disagree with that, then we have the, the, the, then there's a waiver of the claim construction. [00:13:56] Speaker 03: Well, then I would say that as this court said in the Erickson case, this is a legal issue. [00:13:59] Speaker 03: It's fully briefed. [00:14:00] Speaker 03: To Diffix has not suggested there'd be any prejudice in addressing it. [00:14:03] Speaker 03: And it doesn't make sense to construe this claim in a way that's directly contrary to its plain language, not supported in any way supported by the specification. [00:14:10] Speaker 03: So let's admit it should be overlooked, but we don't think it was waived. [00:14:13] Speaker 00: How much does this matter if we agree with you on garb or grab? [00:14:19] Speaker 00: I mean, I know it takes away one, you know, set of disclosures, but I mean, if we agree that the board should have looked at Grab, how much, I mean, is there a dispute about whether Grab discloses whole frames or not? [00:14:35] Speaker 03: This is a better question for Mr. Lamkin. [00:14:37] Speaker 03: I don't think there's a dispute as to that. [00:14:39] Speaker 03: I think he might argue there might be a motivation to combine issue. [00:14:43] Speaker 03: And so I think there is value in making clear that Chen discloses this limitation as well. [00:14:48] Speaker 03: But if Mr. Lamkin is prepared to say that limitation 1C is disclosed by the combination of Chen and Grab and that there'd be a motivation to put together, then I agree it doesn't matter too much. [00:14:57] Speaker 03: But we want to preserve the argument in case Divx either here or on remand starts to say, well, Grab's all very well, but there's some other reason why limitation 1C wouldn't be satisfied by the two references together. [00:15:11] Speaker 03: I feel like I've [00:15:12] Speaker 03: Unless the court has any questions, I'm coming to the end of my opening time, so I reserve the balance of my time for a bottle if I may. [00:15:18] Speaker 01: Very good. [00:15:18] Speaker 03: Thank you, Your Honor. [00:15:22] Speaker 02: Good morning. [00:15:22] Speaker 02: May it please the court. [00:15:23] Speaker 02: The 920 patent concerns a secure system for video playback and receipt, one that permits content to remain encrypted so as to minimize the risk of copying. [00:15:34] Speaker 01: It does that in two ways. [00:15:35] Speaker 01: The three-level key ladder, that was already known in the art for encrypting, decrypting video transmission. [00:15:42] Speaker 02: In the manner in which it's disclosed in... Is that concept? [00:15:45] Speaker 02: The concept of key ladders did exist in the art. [00:15:49] Speaker 02: But then this is all about not the transmission. [00:15:52] Speaker 01: Partial encryption of video frames was also known in the art. [00:15:57] Speaker 01: That's correct. [00:15:58] Speaker 01: So this claim, as I understand it correctly, is the transmission that's encrypting video frame content that's partially encrypted using the three-level key ladder. [00:16:14] Speaker 01: Is there more to the claim than that? [00:16:16] Speaker 02: Yes, there is, Your Honor. [00:16:18] Speaker 02: Limitation 1C talks about obtaining, and then it tells you what you need to obtain, and to obtain is to [00:16:24] Speaker 02: gain possession of, to have, to hold, to possess. [00:16:27] Speaker 02: And then it tells you what you need to gain possession of, what you need to hold. [00:16:30] Speaker 02: And that is encrypted content that includes frames of video, and that means whole frames. [00:16:36] Speaker 02: Actual frames like in the old celluloid system where you run them at 24 frames per second, you get a moving image, that's a frame. [00:16:43] Speaker 02: And those frames must be encrypted in part. [00:16:45] Speaker 02: And if you don't actually obtain, if you're not getting that whole frame, [00:16:49] Speaker 02: with some portion of it, a plurality of the frames, a portion of which are encrypted, you're not obtaining encrypted content that includes frames where a portion of the frames are encrypted. [00:17:00] Speaker 02: You're getting something different. [00:17:01] Speaker 02: And the whole point of Chen, and the problem with Chen and why it doesn't disclose this. [00:17:05] Speaker 01: Doesn't the grab reference disclose obtaining encrypted content that includes frames where a portion of the frames are encrypted? [00:17:17] Speaker 02: So grab does not disclose obtaining encrypted content where a portion of the frames are encrypted. [00:17:24] Speaker 02: Grab is about a system of reading frames, or reading encrypted frames, but in this case, and maybe we should go to whether grab was, the combination where grab provides the obtaining was properly preserved. [00:17:35] Speaker 02: I'll come right to that then, because that seems to be a key issue. [00:17:37] Speaker 02: But grab does not disclose the obtaining, and it certainly doesn't disclose the combination [00:17:43] Speaker 02: of a key system, with that federated system that we have, together with the requirement that what the receiver obtained would actually have and possess are actual frames, a portion of which are encrypted. [00:17:55] Speaker 02: And that's a key thing. [00:17:56] Speaker 02: If somebody sent me, for example, a line from a page of a book each day, no one would say I'm obtaining the entire book until I get that last line. [00:18:06] Speaker 02: And if those lines disappear as quickly as they arrive into my hand, no one would say I'm obtaining that page of the book. [00:18:12] Speaker 02: Because by the time I get that last line, I don't have the rest of the page. [00:18:15] Speaker 02: And that's, in effect, what happens here. [00:18:17] Speaker 02: Because as the little packets come from Chen, coming across the wire, they get decrypted as they come in. [00:18:23] Speaker 02: And so at no point do I have a frame of video that's partially encrypted. [00:18:28] Speaker 02: Because by the time I have a frame of video, it's fully decrypted. [00:18:32] Speaker 02: You're talking about Chen. [00:18:34] Speaker 02: I'm thinking about Grab. [00:18:35] Speaker 02: Right. [00:18:35] Speaker 02: And Grab doesn't have the obtaining portion. [00:18:37] Speaker 02: And it doesn't have to. [00:18:38] Speaker 00: But Chen does. [00:18:39] Speaker 00: I mean, if all we need [00:18:42] Speaker 00: For to have Chen make a full disclosure is obtaining a whole frame. [00:18:46] Speaker 00: I mean, you may have motivation to combine arguments, but why doesn't Grab teach obtaining whole frames rather than this TS stream? [00:18:54] Speaker 02: Well, certainly the board did not address whether Grab teaches obtaining, and there's a special reason why it did not. [00:19:00] Speaker 02: It was going to take me a moment to explain why it wasn't preserved, and maybe I should go there now. [00:19:05] Speaker 02: And it runs along these lines. [00:19:07] Speaker 02: First, the board has specific procedures about how you put forth your combinations. [00:19:11] Speaker 02: You can't just say something like, Grab teaches these five things, and Chen teaches these same five things. [00:19:17] Speaker 02: Because then you end up, if you do that over and over, you end up with an amazing number of possible combinations. [00:19:23] Speaker 02: And that's basically what we have here. [00:19:24] Speaker 02: We have five pieces to limitation 5C. [00:19:26] Speaker 02: You have obtaining encrypted content. [00:19:28] Speaker 02: You have frames. [00:19:29] Speaker 02: You have a portion encrypted. [00:19:30] Speaker 02: You have key ladder. [00:19:31] Speaker 02: You end up with two to the fifth power possibilities, add other things. [00:19:35] Speaker 02: And so they end up with a large number of possible combinations. [00:19:38] Speaker 02: So in cases like Iron Ridge versus Pegasus, or Debt in Depth 30 Physical versus ConocoPhillips, they say, you have to actually say what you're getting from each of the particular references. [00:19:49] Speaker 02: I'm getting this from Grab. [00:19:50] Speaker 02: I'm getting this from Chen. [00:19:53] Speaker 02: And so when you go through what happened here, you realize exactly why the board never thought this alternative combination where obtaining frames came from Grab. [00:20:02] Speaker 02: So you start with Netflix's discussion of the combination, and this is at page 7020 and 7019. [00:20:07] Speaker 02: And what it describes the combination as is, on 7019, applying Grab 3.3's partial encryption teachings to Chen. [00:20:15] Speaker 02: Partial encryption, not obtaining frames. [00:20:19] Speaker 02: 7020, it cites partial encryption, Todding ground. [00:20:22] Speaker 02: So then when you get... Is this the motivation to combine section? [00:20:24] Speaker 01: Correct, that's the place that... I think we've got the limitation 1C section. [00:20:29] Speaker 01: Right, so the limitation... That seems to be the most relevant section, which is the number 87034 and goes over to 7036. [00:20:36] Speaker 02: And it says, and the interesting thing about that is if you look at 7035, 7036, it says what each of them teaches, but it doesn't do what the board requires, which it says [00:20:45] Speaker 02: What are you drawing from each of the combinations? [00:20:47] Speaker 02: If each of them teach five things, we now have 25 combinations? [00:20:50] Speaker 00: The board is not required to draw that out. [00:20:52] Speaker 00: Well, that could have been made about the way they describe chin, too. [00:20:55] Speaker 02: There were problems with the way they described chin as well. [00:20:58] Speaker 00: Well, I mean, how can the board pick one if it's improperly analyzed? [00:21:03] Speaker 00: They should say the whole thing is out because they haven't told us. [00:21:06] Speaker 00: I mean, there's as much discussion of grab teaching frames in this section as there is of chin teaching frames. [00:21:15] Speaker 02: I think that's right, but when you go to the combination and the motivation to combine, it's about Chen. [00:21:20] Speaker 02: When you look at the briefing, it's about Chen, and this is why that's really significant. [00:21:24] Speaker 00: If you go to the institution decision... Why aren't we looking more at the specifics of the actual 1C rather than the overall motivation to combine? [00:21:34] Speaker 02: Because when we look at the... Look, this is not a great petition. [00:21:38] Speaker 00: I mean, it's hard. [00:21:39] Speaker 00: There's lots of different limitations, and there's a page limit. [00:21:43] Speaker 00: the petitioners are always bound and you are the same and I think you probably have come across this, but I find it very hard to read 7035 and 7036 and obviously the benefit of focusing in [00:22:00] Speaker 00: up here rather than what the board has to do, but these two paragraphs say GRAB teaches obtaining frames. [00:22:07] Speaker 02: And I think this is the sequence that makes a big difference. [00:22:10] Speaker 02: The board in its institution decision tells everybody what it's doing. [00:22:14] Speaker 02: And you go to 7213 and the board says that petitioners proposed combinations, so it's describing what the combination is. [00:22:20] Speaker 02: In ground one, that's a specific ground, relies upon modifying Chen to include GRAB 33's partial encryption teachings. [00:22:26] Speaker 02: Not obtaining frames, partial encryption techniques. [00:22:29] Speaker 00: I get that, but the rest of the petition is not consistent with that. [00:22:35] Speaker 02: And then the board goes on, because I think this is important. [00:22:37] Speaker 02: It describes why that issue is critical. [00:22:41] Speaker 02: And it's critical because if Chen does not disclose frames, the asserted combination is missing an element. [00:22:45] Speaker 02: Again, it's not [00:22:47] Speaker 01: taking anything from ground says robs says about obtaining friends it was a little bit i understand the institution decision the board is saying that the motivation to combine chen and crap would be less clear if chen and grabber operating different data levels so it's right boards concerns are rest really more on the motivation combined and it's not that there is uh... it doesn't acknowledge that grab is meet inside that motivation to combine argument is that [00:23:16] Speaker 01: and understanding that Grab is in fact sending frames and not sending PS packets. [00:23:24] Speaker 02: It is encrypting and decrypting, but what's missing there is the obtaining, the transmission. [00:23:30] Speaker 02: All that transmission, if you look at the board's language, that is all coming from Chad. [00:23:34] Speaker 02: And that's why when it institutes a decision, it institutes a decision to address a material issue of fact regarding Chen's teachings. [00:23:41] Speaker 02: Not a question about what Grab teaches, what Chen teaches, because if Chen isn't teaching, [00:23:47] Speaker 02: That transmission where you obtain frames, it doesn't understand that to be coming from Grab. [00:23:52] Speaker 02: And so if Netflix had said, oh my gosh, you've misunderstood, our combination actually includes not just partial encryption. [00:24:00] Speaker 02: We're getting obtaining encrypted frames from Grab as well. [00:24:04] Speaker 02: If they thought that was the board had made a mistake, you would see somewhere in their reply, they say, board, you've made a mistake. [00:24:10] Speaker 02: This combination is not that narrow. [00:24:11] Speaker 02: We have an alternative combination out there. [00:24:14] Speaker 02: And in fact, the PTAB's practice guide, if you look at page 73, says, if you've got a problem with the institution decision, you can say something in your reply. [00:24:21] Speaker 02: And Netflix instead endorses the board's view. [00:24:23] Speaker 02: As you pointed out, Judge Chen, if you look at the reply, page 744, it says, Chen teaches the alleged invention of a three-level hierarchy key, and Grab 33 teaches partial encryption, and ground one combines those, or 7459. [00:24:34] Speaker 02: Grab teaches the mechanisms that allow precise control, allowing encryption to be applied to selected portions of the video frame. [00:24:40] Speaker 02: That's partial encryption. [00:24:41] Speaker 00: It's not obtaining, getting your hands on, getting a hold of encrypted content that includes- I think you've made a very good argument for why this combination of chin and grab don't work, but the board didn't make it. [00:24:55] Speaker 02: Well, the board didn't address it because the board properly didn't understand that that alternative combination- I'm not sure how we know that. [00:25:02] Speaker 02: Well, because if the board had understood the combination for it, I think the board would have addressed it. [00:25:06] Speaker 02: But if you look at the sequence of what happened [00:25:08] Speaker 02: where you don't have that actual combination being pointed out. [00:25:11] Speaker 02: The board initiates review and says, this combination is getting partial encryption from Grab, but doesn't say it's getting something else from Grab. [00:25:21] Speaker 02: And then in reply, there's nothing in there saying, please, board, you've made a mistake. [00:25:25] Speaker 02: It's actually another alternative combination. [00:25:26] Speaker 01: We're in the land of speculation, though, at this point, because the reply could easily be understood as recognizing that it is important for its motivation to combine theory to have both of these references understood as operating at the same data level. [00:25:45] Speaker 01: And so there was a desire to convince the board that Chen, just like Grab, is operating at the frame level and not the TS packet level. [00:25:56] Speaker 01: And if that's the case, then it's perfectly understandable why they would focus their attention on strengthening their motivation combined by convincing the board that Chen, in fact, also discloses frames. [00:26:09] Speaker 02: I think that their focus is definitely Chen. [00:26:11] Speaker 02: But if the board says, our critical issue is what does Chen disclose, and says what Grab is supposedly providing under the combination is not obtaining the encrypted content, but instead partial encryption, I think it is incumbent [00:26:26] Speaker 02: on the petitioner to point that out, and then make its case that there was a mistake. [00:26:30] Speaker 02: And the exact opposite occurs. [00:26:31] Speaker 02: It's grab and reply is partial encryption, partial encryption. [00:26:35] Speaker 02: I feel like I'm running out of time, and I should probably run over to the waiver of the first issue, the claim construction issue, Judge Hughes, and answer your question. [00:26:42] Speaker 02: When neither party asks for a claim construction, and the board adopts one that is within the plausible meanings, the answer is you have to affirm. [00:26:49] Speaker 02: And that comes from Comcast versus IP Holdings versus Sprint. [00:26:53] Speaker 02: In that case, where neither party proposes a construction and the one that's used is reasonable, a party can prevail only if it has the only reasonable view of the limitations. [00:27:04] Speaker 02: So only if Netflix has the only reasonable view of limitation 1C could it prevail here. [00:27:10] Speaker 02: And it clearly didn't actually preserve a claim construction issue, because the board's rules, again, are very clear. [00:27:16] Speaker 02: The trial guide, page 44, Judge Chen, you were effectively pointing this out. [00:27:20] Speaker 02: If a petitioner believes a claim term requires an express construction, [00:27:23] Speaker 02: he must include a statement identifying a proposed construction, we haven't heard the proposed construction given here, of that particular term, what term is at issue, and where the intrinsic or extrinsic evidence supports that meaning, entirely missing here. [00:27:36] Speaker 02: And Netflix had ample notice that we were arguing we don't have obtaining, you don't actually get, receive, hold, you don't obtain an encrypted frame that is encrypted in part because by the time you have a whole frame that's encrypted, [00:27:52] Speaker 02: Time and time again, we made that clear in our patent owner's statement. [00:27:57] Speaker 02: Judge Hughes, to turn it to whether or not moral argument is sufficient, the answer is no. [00:28:02] Speaker 02: Again, the board's rules are very clear on that. [00:28:05] Speaker 02: The board's rules say that parties may only present arguments relied upon in the papers previously submitted. [00:28:13] Speaker 02: And that's page 86 of the practice guide, and there's a case called Dell versus Acceleron making that point as well. [00:28:18] Speaker 02: So by oral arguments, it's too late, especially when you have that notice. [00:28:21] Speaker 02: And even if you look at oral argument, the material is being quoted to you. [00:28:25] Speaker 02: There's a piece of the sentence that gets left out, which makes clear that they're not arguing claim construction. [00:28:31] Speaker 02: They're arguing an application of the claim language. [00:28:34] Speaker 02: So for example, visit the farm page two. [00:28:36] Speaker 02: They quote 7820 to 21. [00:28:38] Speaker 02: A portion says, Netflix's argument is not the language of 1C. [00:28:42] Speaker 02: 1C is obtaining encrypted content, where the encrypted content includes the frames of video, and at least a portion are encrypted. [00:28:48] Speaker 02: That sentence actually continues and says, and what we see is that Chen combined with the teachings of Grab is Chen is teaching sending video frames. [00:28:55] Speaker 02: And even if it's limited to a TS architecture, what we see is it's encrypting portions of these things. [00:29:00] Speaker 02: So it's just an application of the claim language. [00:29:03] Speaker 02: They're not asking for a claim construction. [00:29:06] Speaker 02: And finally, the claim construction here is absolutely clear. [00:29:09] Speaker 00: Can I just ask you this then? [00:29:10] Speaker 00: Assuming we send it back on grab, and I know you don't want us to, but assuming we do, is your view that we still should address and affirm the board's, I guess, [00:29:22] Speaker 00: application of this claim charge. [00:29:24] Speaker 00: To call it a claim construction is a little difficult when there is no construction. [00:29:28] Speaker 02: Yeah, it's substantial evidence reviewed, Judge Hughes, just as you pointed out. [00:29:31] Speaker 02: Is there substantial evidence to support that Chen does not disclose or teach this particular claim? [00:29:38] Speaker 02: And under that, they do not have the only reason review. [00:29:41] Speaker 02: And so under Comcast versus IP holdings, this court would affirm. [00:29:44] Speaker 02: And yes, that's worthwhile. [00:29:45] Speaker 02: We're here. [00:29:45] Speaker 02: We should get that done, even if Grav were to go back. [00:29:48] Speaker 02: And I think that's where I would like to end. [00:29:50] Speaker 02: in the 36th at Second Serenity, it's to point out that the language here is very clear. [00:29:56] Speaker 02: We thought plain and ordinary meaning true in our way, which is it says two things. [00:30:00] Speaker 02: It says obtaining means to get a hold of, to possess. [00:30:05] Speaker 02: And then it says what needs to be obtained. [00:30:07] Speaker 02: And it says encrypted content that includes frames. [00:30:10] Speaker 01: If I put the remaining amount of your time, I just want to ask the question. [00:30:15] Speaker 01: The board concluded that it couldn't tell [00:30:18] Speaker 01: one way or another, whether Chen was operating at the frame level or the TS packet level. [00:30:25] Speaker 01: And so it concluded that therefore the petitioner did not meet its burden that in fact discloses something at the frame level. [00:30:31] Speaker 01: Fine. [00:30:33] Speaker 01: But assuming we send this back for grab, the grab combination, why wouldn't it be obvious to just use the three-level key hierarchy from Chen [00:30:44] Speaker 01: in a Grab video frame context where, as Grab discloses, you're encrypting just a portion of those frames. [00:30:55] Speaker 02: Right, and I think the answer is, one of the things that's just not obvious is to obtain the whole frame and decrypt at the end after obtaining the frame. [00:31:04] Speaker 02: And that's actually a really significant innovation for an important reason, and I should make this clear. [00:31:08] Speaker 01: Are you telling me that your inventor, who I think is called Grab, [00:31:13] Speaker 01: invented here in this patent, the idea of obtaining whole frames that nobody had ever transmitted frame by frame before? [00:31:22] Speaker 02: No, Your Honor, so that would be in, whether Chen discloses that when Chen is a broadcaster. [00:31:28] Speaker 01: Not Chen, I'm talking about Grab, the Grab reference and now we've got the Grab vendor. [00:31:33] Speaker 02: So the idea of having the data flow in and instead of encrypting that, decrypting the data as it flows in, as the traditional broadcast scheme is done, [00:31:41] Speaker 02: You instead obtain your whole frame, leaving some portion encrypted. [00:31:46] Speaker 02: That's actually a very significant innovation from my perspective, and I'll tell you why. [00:31:50] Speaker 02: Where does the patent say that? [00:31:52] Speaker 02: So where does the patent say that's a significant innovation? [00:31:54] Speaker 02: Yes. [00:31:55] Speaker 02: So the patent doesn't talk very much about the frames piece, but if you look at the bottom of page, let's take a look. [00:32:05] Speaker 01: I'm sorry we're going over time, but I'm trying to find out what's the concept here of the 920, and I don't recall it being what you're saying it is. [00:32:13] Speaker 02: Page 81, column 13, lines 62 to 65. [00:32:19] Speaker 02: And it says the frame encrypt keys are used to play back the content, so this is at the very end of the process, such that any decryption typically occurs as the content is being viewed. [00:32:29] Speaker 02: And that's actually really important. [00:32:31] Speaker 02: If you look at it, F is all about decrypting as it's being F, one F and down in the claims as it's being viewed. [00:32:36] Speaker 02: It's really important because when you are talking about untrusted systems, we're no longer in the world of a cable box and a trusted cable. [00:32:45] Speaker 02: We have people like Netflix and the like sending things to eventually computers. [00:32:49] Speaker 02: You want to keep that content encrypted through as much processing as possible because the more it is unencrypted, the more there's a possibility of leakage. [00:32:56] Speaker 02: And so what this allows you to do, because you receive the content, the whole frame, and once you have that whole frame ready for playback, a piece of it's still encrypted, it stays encrypted right into that very last minute, right into the typical implementation where any decryption occurs as the content is being viewed, the very last moment. [00:33:15] Speaker 02: And one F downward says, hey, your playback, your playback consists of steps that include decrypting and then playing. [00:33:23] Speaker 02: The actual playback incorporates that. [00:33:25] Speaker 02: And I think that is, to my mind, a very significant innovation. [00:33:28] Speaker 02: And it is anything but obvious. [00:33:30] Speaker 02: And I am way over my time. [00:33:31] Speaker 02: Thank you. [00:33:35] Speaker 01: Thank you, your honor. [00:33:41] Speaker 03: With respect to the preservation of a grab argument, there's no board finding of waiver here. [00:33:46] Speaker 03: The board quoted our argument in the decision on institution on page 7209, petitioner contends [00:33:52] Speaker 03: that Grav333 similarly teaches obtaining encrypted content using a playback device, e.g. [00:33:58] Speaker 03: decrypting digital video decoder, where the content includes frames of video. [00:34:02] Speaker 03: The board couldn't have been clearer. [00:34:04] Speaker 03: We didn't need to go further in our reply or at the oral hearing, even though we did mention it, because the board had made clear that it understood our position. [00:34:11] Speaker 03: And if there is any doubt whatsoever on pages 24 and 25 of the final written decision, [00:34:15] Speaker 03: the board repeats that very same language. [00:34:18] Speaker 03: Mr. Lamkin cited some cases, Iron Ridge and 303. [00:34:21] Speaker 03: I haven't read them. [00:34:22] Speaker 03: They're not cited in the briefs. [00:34:23] Speaker 03: There wasn't a 28-J letter. [00:34:25] Speaker 03: But I would be very surprised if either of them or any other decision of this court says that a petitioner waives an argument where the board quotes the argument in its final written decision and doesn't say it was waived. [00:34:35] Speaker 01: Are those Federal Circuit opinions or PTAP opinions? [00:34:38] Speaker 03: I have no idea, but they're not in the brief so I've never seen them before, Your Honor. [00:34:42] Speaker 03: I've never heard of them before this morning, but you can be sure I'll be looking them up when I get back to the office. [00:34:47] Speaker 03: We cite the dragon non-precedential opinion, which suggests that in this circumstance an argument is preserved, and we think that's right. [00:34:53] Speaker 03: Motion to combine expressly not addressed by the board on Appendix 22. [00:34:57] Speaker 03: And the holding of the board here is we hadn't shown that Chen's disclosure disclosed 1C. [00:35:03] Speaker 03: Grab, of course, was part of our combination. [00:35:05] Speaker 03: With respect to claim construction, again, there was a reference to something called Comcast versus IP holdings, not cited in the briefs. [00:35:11] Speaker 03: I don't know what it says. [00:35:12] Speaker 03: We cite Corning versus Fast-Felt, which says that when there is an implicit claim construction that is adopted for the first time in the final written decision, there's nothing wrong with [00:35:20] Speaker 03: a petitioner or a party appealing it for the first time in this court. [00:35:23] Speaker 03: It is a legal issue. [00:35:24] Speaker 03: It's fully briefed. [00:35:25] Speaker 03: I didn't hear any mention of prejudice if this court were to address it. [00:35:29] Speaker 03: I recognize that now with the benefit of hindsight, it's the sort of thing that could have been made more clear in front of the board, but it was certainly clear enough under Corning once the thing was first adopted in the final written session. [00:35:40] Speaker 00: I know we have the Nova review, assuming we find a claim construction issue preserved, but why shouldn't we send it back to the board and let them decide it in the first instance? [00:35:50] Speaker 03: The court certainly can do that. [00:35:52] Speaker 03: We wouldn't object to that. [00:35:53] Speaker 03: We think it's probably more efficient, given that this is a claim construction issue based entirely on the intrinsic record. [00:35:58] Speaker 03: Everything is in front of this court. [00:36:00] Speaker 03: This court can decide it, and that will make things clearer and more efficient for the board on remand. [00:36:05] Speaker 03: But if the court wishes to give the board a first crack at a more doctrinally understandable way of addressing the claim construction, we wouldn't oppose that. [00:36:16] Speaker 03: There was a suggestion on Divix's side that I hadn't made clear what our proposed claim construction was. [00:36:23] Speaker 03: I thought I'd been clear from the beginning, which is the board imposed a limitation that is not in the claims, namely that whole frames have to be received on the receive end before any decryption begins. [00:36:34] Speaker 03: We think that is unsupported, that additional limitation should not have been included. [00:36:38] Speaker 03: So our proposed construction is that the claims be construed and applied without that additional order of steps that is not recited. [00:36:46] Speaker 01: And the place we should find that having been preserved is at 7820 and 7821? [00:36:52] Speaker 03: That's where it was made at the oral hearing, yes. [00:36:55] Speaker 01: I mean, in the reply, we also... This is as good as it gets right here. [00:36:59] Speaker 03: No, there's... So in the reply on page, I believe it's 7452, we said, the challenge claims do not recite any networking or packet limitations. [00:37:12] Speaker 03: Then we have 7802. [00:37:14] Speaker 03: The claims are entirely silent on a mechanism for transmitting video, and the 920 patent itself provides no discussion or explanation of transmitting mechanisms. [00:37:24] Speaker 03: And then 7820 and 7821, notably when we made those arguments, both in the reply and at the hearing, DIVIX didn't argue waiver. [00:37:32] Speaker 03: The board didn't find a waiver. [00:37:35] Speaker 03: The fact that we didn't use the word claim construction, I don't think makes this case any different from the entertainer versus Hulu, where the appellant didn't vary. [00:37:42] Speaker 03: It was even a worse case. [00:37:44] Speaker 03: because the board had expressly construed the term and the appellant hadn't challenged that construction. [00:37:49] Speaker 03: But this court still reviewed it because it was clear what the position of the appellant was, which is how the claim was supposed to be understood. [00:37:57] Speaker 03: And again, there's no question, because when you get to 7823 and Judge Gerstin's question to counsel, they're very clearly talking about what the scope of the claim is. [00:38:05] Speaker 03: So this is fully preserved, we would submit. [00:38:08] Speaker 03: At the very least, it's fully briefed. [00:38:09] Speaker 03: It is available for this court to reach in order to provide guidance to the board on remand. [00:38:14] Speaker 03: Alternatively, Judge Hughes, we would not object to remanding for the board to consider this with the benefit of the arguments. [00:38:23] Speaker 03: Unless the court has further questions, we respectfully submit that the board's decision should be vacated and remanded. [00:38:29] Speaker 00: Thank you very much. [00:38:30] Speaker 00: The case is submitted.