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Number 22, 1083, Netflix Incorporated against DivX LLC.

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Mr. Fleming.

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Good morning, and may it please the court, Mark Fleming together with Nora Sioux on behalf of Netflix.

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DivX's 588 patent acknowledges in column one that adaptive bitrate streaming was well known.

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The Chen reference disclosed it at paragraphs 63 and 64, and the board itself summarizes it on page 10 of its final written decision.

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The board also found that Chen cannot be said to be incompatible with partial frame encryption.

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And it did not find and could not have found on this record that combining ABS with partial frame encryption was somehow beyond the level of ordinary skill.

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What the board did was commit the same legal errors that the court reviewed de novo and corrected in cases like Allergan versus Apotex and others.

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And it did that in three ways.

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First of all, the board considered only Chen's purported claimed invention, namely scalable layers, rather than taking Chen with respect to all it taught, which included the description of ABS by itself without scalable layers.

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We didn't rely on, and we didn't have to rely on, Chen's scalable layers because DIVX does not claim them.

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And as this court said in Allergan versus Apotex,

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Failure to consider the appropriate scope of the patent's claimed invention when evaluating reasonable expectation of success is a legal error reviewed without deference.

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And that's the standard of review here.

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And we submit the same result should apply.

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The second.

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What's the error in the board's determination with respect to the scope?

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So what the board did is it believed that Netflix had to show a reasonable expectation of success in combining adaptive bitrate streaming with scalable layers with partial frame encryption.

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The error in the scope was Divix's claims do not claim scalable layers.

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That's not disputed.

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Chan discloses adaptive bitrate streaming without scalable layers.

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It then purports to improve on what the state of the art was at that time by saying, you could do this with scalable layers, it might make things better.

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We didn't rely on that claim.

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But the board went on and found motivation to combine anyway, right?

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The board did find motivation to combine most definitely, and that's clear throughout the opinion.

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I assume you'll hear from Mr. Hendefar some dispute about that, but I don't think it's possible to read the board's opinion and find any problem with motivation to combine.

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They specifically say, we sufficiently established it.

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Their reasoning is solely based on reasonable expectation of success, and I think that's where the legal error is plain, because they say there would have been a problem, a skilled artisan in their view,

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would not have reasonably expected success in combining adaptive bitrate streaming with scalable layers, together with Lindahl's partial frame encryption.

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But of course, we don't have to show that.

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There's another long issue right there about adapting.

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It sounds to me like we're still in the motivation to combine area and not in looking at reasonable expectation of success.

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I mean, I would certainly agree that the board's analysis, even though it recognizes that these are two separate things, there is some lack of clarity in its reasoning, but I think what it clearly was trying to do was make a finding of no reasonable expectation of success.

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I don't think that could be justified.

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To be clear, I don't think it could be justified as a motivation finding either, even had the board purported to make one, which it didn't.

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And the best authority there is Intel versus Qualcomm from 2021, where Intel relied on the articulation of the prior art in a reference called Bergener and said, Bergener discloses a prior art switch.

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We want to combine that with other references.

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And the board said, well, you can't do that because Bergener criticizes that switch and says it's no good and tries to improve on it.

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And this court reversed, saying that's not proper because there's nothing wrong with relying on a prior art patent's description

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of the state of the prior art on which it purports to improve.

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And that's exactly what we did with respect to Chen.

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What about the Chen 924 reference?

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How do you see that as how the board handled that?

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So that is an additional error in our view, because Chen 924 we relied on.

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It's not part of a combination.

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We're not trying to combine it.

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But it showed that at the relevant time, skilled artisans were already combining adaptive bitrate streaming with partial frame encryption.

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And they were doing it in the context of the very file formats that are disposed in Chen and in Lindell.

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So that is further evidence, not only of a motivation to combine, but also not just of a reasonable expectation of success, but of actual success in combining these features together.

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The board didn't address it at all.

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The only time in the written decision

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where Chen 924 is addressed, is in a recitation of what our arguments were.

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And then the board says, this is on page 27 of the appendix, the board says, we need not decide whether a skilled arson could and would have modified existing file formats to accomplish the goal.

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But of course, the fact that it was already being done, without dispute, I might add, when one of the members of the panel asked DIVIX's counsel at the hearing, what do you take from Chen 924?

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Council said that a skilled artisan may have known that it could do adaptive bitrate streaming with partial frame encryption.

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That shows not only the motivation to combine, but also a reasonable expectation.

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The board's failure to address that, we think, is at the very least a reason for a remand.

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Can I ask you this question?

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At the end of the board's decision, the board concludes that there was enough doubt

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to defeat a conclusion of reasonable expectation of success about a skilled artisan's ability to make the necessary modifications to standard file formats used in Chen.

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I guess I need to understand whether that is a point that applies to the aspect of chin that you rely on, which is basically a description of background prior art, or whether it applies only to the, let's call it the chin invention.

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Because if it applies also to the background,

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art, description, teachings as you would say, disclosures of Chen, then my question is why is that not an independent ground for affirmance?

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I read it as confined to the

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the combination that it was holding us to, we think incorrectly, which is to combine partial frame encryption with scalable layers and forward error.

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What, if anything, about file formats is disclosed in the portions of Chen that you feature?

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So the first point I'd make in response to this question, Judge Toronto, is the board did not find, and I don't think it could have found, that a skilled artisan would not actually be able to make these modifications.

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And that paragraph on page 27 is very careful to say, we don't need to decide whether it could.

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But it does address it.

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And what it says is, let's assume that it

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is read as saying there's enough doubt about that that we don't think there would have been a reasonable expectation of success.

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We don't need to decide definitively whether somebody could have done it.

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They would have been unsure.

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So I don't.

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I'm sufficiently unsure.

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Don't argue about the standard of reasonable expectation.

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Sufficiently unsure to be more than a mere possibility.

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I mean, I do think that is relevant, because the board has not made a finding that a skilled artisan couldn't have done it.

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So I think that that legal point is there, and I don't want to be seen to not address it.

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But I'll address the question, which is, what's the state of the record on that?

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So Lindahl, which is the reference we rely on for partial frame encryption,

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discusses implementing it in the MPEG-4 format, and our expert explained that.

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So does Chan 924.

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It talks about using what it calls selective encryption in the MPEG-2 TS format.

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And these are the very same types of formats that Chan, the lead reference, discloses.

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They all derive from the ISO-based media file format.

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And they're all being used potentially together.

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And our expert, Dr. McDaniel, explained this at Appendix 6679, paragraph 5 of his reply report.

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And Chan itself says it in paragraph 119, which is on 5441 of the appendix.

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Chen says the 3GPP file format or any other file based on the ISO-based media file formats such as MP4 or 3GPP2 may be used as the container format for HTTP streaming and the following features.

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Both sides, experts admitted that undergraduates and graduate students had designed their own file formats to say nothing of being able to modify the ones that existed

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And that's because these are meant to be extensible.

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They are meant to be modified by skilled artisans who use them.

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And DIVIX has never offered any response to that.

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I notice there are two different words, extensible and modified, or modifiable.

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I think you're treating those as synonymous.

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Is it correct that they're synonymous, or does extensible mean only some subset of modifications?

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No, I think generally I'm not a technician.

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The question is whether the modification that would be needed to do the partial encryption, which is probably itself only one subset of selective encryption, would be something that would put off a skilled artist in his or her expectation of succeeding.

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So I think already that goes beyond the finding that the board has.

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And I don't think they don't cite any evidence for that proposition.

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We cited Dr. McDaniel's reply report, for which there is no contrary evidence provided by DIVIX.

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We cited a prior reference called Stockhammer, and this is on 5544 and 5545, which describes the base media file format as a flexible, extensible format that is used as the basis for other file formats such as 3GPP.

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It was also the basis for MP4.

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which Dr. McDaniel references in footnote one of his reply reports, 6679.

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Can I switch topics back to your basic argument?

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The board has a sentence or two, maybe, that says, of course, there was some motivation to combine reference Chen, reference Lindow, and whatever the third one is, which doesn't play any role in our debate right now.

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That seems to me at a pretty high level of generality.

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Why would one not read the board to say something like the following?

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Your combination proposes

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basically ignoring vast amounts of Chen and relying just on a little bit of background description of the prior art in Chen.

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Part of your task as a challenger is to provide a reason a skilled artisan would start where you're starting.

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We don't actually think you've established that, because somebody picking up Chen would not be motivated to ignore, I don't know, is it literally hundreds of columns?

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But in any event, or if it's paragraphs, hundreds of paragraphs, and just rely on the bit of description at the beginning.

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Why is that not?

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So there's a motivation finding this characterization would be.

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negative to you built into the board's decision.

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Because the board does keep coming back in a way that's not very clear, moving back between reasonable expectation of success and motivation.

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But part of what the board says is we don't think a skilled artisan would actually shed all of the improved stuff in Chen and just start with that beginning.

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So I'd like to first answer why I don't think that's what the board was doing and second why it would be wrong if that's how the court were to read it.

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So taking the first point, if one looks at page 17,

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And in the second full paragraph on that page, the board starts by saying, reasonable expectation of success and motivation to combine are different legal concepts.

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Everyone agrees with that.

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Cite to intelligent biosystems.

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Although we continue to determine, continuing on from what happened in the decision on institution, that petitioner has sufficiently established

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that an ordinarily skilled artisan would have had some motivation to combine the teachings.

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We determined below that petitioner's obviousness showing does not sufficiently demonstrate that a skilled artisan would have had a reasonable expectation of success.

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And so the first part of that sentence, I don't know what the word sufficiently established can mean other than that we have carried our burden.

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But the way that I'm, I guess, positing or framing the question is that the issue is not what sufficiently established means.

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It is what the object, the direct object of that little verbal phrase, sufficiently established is.

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And one thing could be sufficiently established a motivation to combine the references in general.

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The relevant thing is to combine the particular portions that you are relying on with, again, let's

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later portions of the board opinion say, we don't think a skilled artisan would give up all of this other stuff in Chen to just say, we're just using the background art description of Chen.

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So one more point on this, and then I'll move to why I don't think that would be supported in any event.

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If that were really what the board was doing, one would have expected them to mention motivation to combine at some point before the end of the analysis.

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But whenever they come back to what their finding actually is, it's always in terms of solely reasonable expectation of success, including at the very end of the discussion on 28, where the board's bottom line says, we are not persuaded that one of ordinary skill would have had a reasonable expectation of success in combining.

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No discussion of motivation.

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Now, if the court disagrees and thinks that this can be read as a motivation decision,

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There would still have to be, at the very least, a vacator.

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And the best authority for that is Intel versus Qualcomm, because there you had exactly the same situation.

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You had a prior art reference, Bergener, which disclosed a switch and criticized it and said, this is no good.

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You have to improve upon it.

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And the board said, well, based on that, no one would have looked to Bergener for the prior art switch.

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And this court said, that's incorrect, because you can take the prior art for all that it discloses, including its articulation of the prior art.

[00:15:01] Speaker 02:
And it's not hundreds of pages or even hundreds of paragraphs.

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The discussion in Chen of scalable layers starts at, I believe, paragraph 375 out of a 500 paragraph reference.

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There's a lot of discussion of what we call basic or what you could call adaptive bitrate streaming without scalable layers, including paragraphs 63 and 64, which we rely on in depth.

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And the board actually quotes when summarizing Chen itself on page 10.

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The fact that adaptive bitrate streaming had gotten to the point

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by the time of the invention, about the claimed invention, that artisans like Chen were already improving on it in various ways doesn't mean that prior art adapted bitrate streaming as it existed suddenly becomes patentable or suddenly becomes unavailable for purposes of an obviousness combination.

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This court has said that numerous times because a prior art patent

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It's always going to criticize the prior art to some extent and say we think we can do better and here's our improvement.

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This court has said that does not mean that the reference is confined to its claimed invention.

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That goes all the way back to Inray Heck and Inray Applied Materials and Inland Steel.

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There are plenty of cases in that area.

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I don't think the law is disputed.

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The question is simply, did the board comply with the law?

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And in our view, we think the answer is clearly no, because it required us to combine, in our obviousness contention, a feature that DIVIX itself does not claim to have invented, and it's not in its claims.

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I'm well into my rebuttal time.

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If the court has further questions, I'd be happy to answer.

[00:16:31] Speaker 03:
Is the Intel Qualcomm case that you rely on one that you cited?

[00:16:35] Speaker 03:
Yes, it's in our opening brief.

[00:16:37] Speaker 03:
Well, I know that there were several.

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I was on both of the panels.

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I wrote one of them, but I don't think it's that one, right?

[00:16:43] Speaker 02:
It's a different one?

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So there's the 2021 one, which we cite.

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Let's see, pages 40 and 43 of our opening brief.

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And then there's the 2021, which we also cite.

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for the different proposition, which is that the obviousness combination does not have to be the best or the ideal combination out there.

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It simply has to be a suitable one.

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And there's no finding by the board that our combination is somehow unsuitable.

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And there's certainly nothing in Chen that suggests that it would be.

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And DIVIX has disavowed twice in its red brief any teaching away argument.

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There's no teaching away finding here.

[00:17:27] Speaker 04:
OK.

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I will save you rebuttal time.

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Thank you, Your Honor.

[00:17:35] Speaker 01:
May I please the court?

[00:17:37] Speaker 01:
The fundamental misunderstanding or disagreement with what my friend presented is that we proposed, and the word correctly found, reasonably found, supported by substantial evidence, that there is no disclosure of

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what Petitioner calls a basic ABS system without scalability that meets the other connotations in Chen to then be combined with partial-frame encryption.

[00:18:06] Speaker 01:
And please allow me to elaborate.

[00:18:08] Speaker 01:
If your honors look at Chen Appendix page number 544, there is an actual background of the invention section in Chen.

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Petitioner is not relying on any of that.

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But if your honor goes to the next pages, page 5436, starting on paragraph 61, the detailed description of the invention.

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That's where petitioner starts, relying on Chen.

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There is no background streaming in Chen.

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Just for what it's worth, I went through, I think, the petition and circled all of the paragraphs in Chen that it relied on.

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And there are a whole bunch of them in the background of the invention, 16, 17, 18, 19, 24, 26.

[00:19:08] Speaker 03:
That's my record.

[00:19:09] Speaker 01:
Correct.

[00:19:10] Speaker 01:
So please allow me to explain what other paragraphs they rely on, which are significant.

[00:19:15] Speaker 03:
And then it comes in.

[00:19:16] Speaker 03:
And they talk rather specifically about 63.

[00:19:20] Speaker 03:
Is it 63 and 64?

[00:19:23] Speaker 03:
Yeah.

[00:19:24] Speaker 03:
Which are in the detailed description of the invention, but still describing some background stuff.

[00:19:32] Speaker 03:
I'm not quite sure what you mean by the idea that the teachings in Chen that they relied on don't really include this, I don't know, plain vanilla background art adaptive bitrate streaming.

[00:19:51] Speaker 01:
Understood.

[00:19:51] Speaker 01:
So the claim don't just claim some alternate bitrate streams.

[00:19:57] Speaker 01:
It's a very detailed claim.

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It requires a specific structure of those streams.

[00:20:02] Speaker 01:
It requires, for example, a top-level index file.

[00:20:05] Speaker 01:
It requires portions within the file.

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It requires the system to be able to address those portions specifically.

[00:20:12] Speaker 01:
For all of those, petitioners relying on Chen's system.

[00:20:16] Speaker 01:
Please allow me to point your honor to the point.

[00:20:18] Speaker 03:
And when you say Chen's system, you mean part of the invented?

[00:20:21] Speaker 01:
So there is no background of the art discussion in Chen that says here's a streaming system with a top-level index file with fragments, with segments, with a segment index where the playback device can then

[00:20:36] Speaker 01:
a request from the transmitter, for example.

[00:20:39] Speaker 01:
So for example, if your owners look at appendix page 11056, that's petition page 48, in connection with claim limitation 1K, that's still claim one, they start chain paragraph 517.

[00:20:55] Speaker 01:
Not background, paragraph 517.

[00:20:58] Speaker 01:
Similarly, appendix page 11059, that's petition page 51.

[00:21:03] Speaker 03:
No, there is no doubt that the petition cites a lot of material starting at 61 and forward, although there are large sections where it doesn't.

[00:21:14] Speaker 03:
As I say, I went through and circled, and there are lots and lots of later paragraphs.

[00:21:20] Speaker 03:
So what's the problem with their saying, we told you in the petition, element by element, claim element by claim element, what we're relying on.

[00:21:31] Speaker 03:
It's not scalability.

[00:21:33] Speaker 03:
It's not forward error correction.

[00:21:37] Speaker 01:
So the problem is they are relying on appendix pages, for example 1156 and 1157, on churns, what it calls fragments.

[00:21:47] Speaker 01:
They need that fragments for the disclosure of parts of the file in the claim.

[00:21:52] Speaker 01:
Chen's fragments are the blocks.

[00:21:55] Speaker 01:
So Chen explains, for example, on Appendix Page 5437, that his fragments are his blocks.

[00:22:02] Speaker 01:
Chen's blocks, the board reasonably found, undisputed by their expert.

[00:22:06] Speaker 01:
Chen's blocks are invariably, without exception, scalable.

[00:22:11] Speaker 01:
There is no disclosure in Chen of a block-based streaming system that is not scalable.

[00:22:16] Speaker 01:
Now, going to the next point, I believe Your Honor Judge Torrento alluded to this point.

[00:22:22] Speaker 01:
What the board really found was we find that chance system that petition was relying on is necessarily, without exception, scalable.

[00:22:31] Speaker 01:
Patent owner's expert opined on that.

[00:22:34] Speaker 01:
Petitioner's expert, even though he submitted a reply declaration, he chose not to dispute this point.

[00:22:41] Speaker 01:
So the board reasonably found that Chen's system is necessarily by design, without exception, scalable, which is what the system that the petitioner is relying upon.

[00:22:51] Speaker 01:
The board then found that a person of ordinary skill wouldn't have had a reasonable expectation of success to import partial frame encryption

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inter-chance system, which is relied upon by petitioner, because that system is necessarily scalable.

[00:23:07] Speaker 03:
Right.

[00:23:07] Speaker 03:
There's fundamentally, as I take it, no real dispute here that if you had started with a scalable system, the board could say we had substantial evidence to say you wouldn't do the partial encryption that's required by the client.

[00:23:27] Speaker 01:
So then the board followed to say with regards to the motivation is, well, we have a chain system that's necessarily a scalable system.

[00:23:35] Speaker 01:
If Petitioner wants to combine partial frame encryption with a modified chain, which is not scalable, then they have to show motivation to do that.

[00:23:43] Speaker 01:
And then the board went on to say, for example, on page

[00:23:53] Speaker 01:
Page 43 of our brief, which is Appendix Page 21, the board said, and even if petitioner is correct,

[00:24:00] Speaker 01:
that ordinary skilled artisans could have implemented aspects of Chen without its central features, i.e.

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scalability of its general features, petitioner has not demonstrated why, italicized by the board, why they would jettison features that are disclosed as useful.

[00:24:17] Speaker 03:
Right.

[00:24:17] Speaker 03:
And that's one of the portions of the board's decision that I was discussing earlier that does, what's the law term, sounds in motivation.

[00:24:27] Speaker 01:
Okay, and if you're honest with you, I've had an honor response.

[00:24:30] Speaker 01:
The board followed without expressing our line of reasoning, which is Chen's system, by design, is scalable.

[00:24:38] Speaker 01:
A posita wouldn't be able to combine Chen's system as is with partial frame encryption.

[00:24:43] Speaker 01:
So to do that, you would have to remove the scalability, FTC, modify the standard file format, do a lot of other stuff.

[00:24:50] Speaker 01:
And a posita wouldn't have had the motivation to remove all of those stuff from Chen,

[00:24:55] Speaker 01:
just so the Posita could implement partial firm encryption and the board correctly found that that motivation does not exist.

[00:25:05] Speaker 01:
Now I also want to highlight one other point.

[00:25:08] Speaker 00:
What about when the board looks at adding Linhal?

[00:25:12] Speaker 00:
and what that combination would do.

[00:25:13] Speaker 00:
And then it said it would deteriorate, change performance, and reduce its efficiency.

[00:25:19] Speaker 00:
Does that go to the reasonable expectation of success?

[00:25:24] Speaker 01:
That goes to boards.

[00:25:26] Speaker 00:
Is that enough?

[00:25:27] Speaker 00:
I mean, do you have to show that something's going to work and work

[00:25:34] Speaker 01:
depends on the motivation that petitioner had proposed for that combination.

[00:25:41] Speaker 01:
Here, petitioner proposed for its motivation to combine $1 and $10, improve piracy, improve efficiency.

[00:25:50] Speaker 01:
When the proposed combination, as the board recently found, actually reduces efficiency, that defeats the very motivation that petitioner proposed for that combination.

[00:26:01] Speaker 01:
So here, because the motivation they proposed here.

[00:26:04] Speaker 00:
Do you have an issue of motivation to combine or reasonable expectation of success?

[00:26:08] Speaker 01:
They have primarily expectation of success, but to the extent they were arguing that.

[00:26:14] Speaker 00:
I mean, the combination succeeded.

[00:26:17] Speaker 00:
It just didn't work as well.

[00:26:19] Speaker 00:
So doesn't that go to motivation to combine?

[00:26:22] Speaker 00:
Wouldn't a person of skill and art not have combined to begin with because it would...

[00:26:28] Speaker 00:
not lead to greater efficiency, but less efficiency.

[00:26:30] Speaker 01:
That's a reasonable interpretation of the board.

[00:26:33] Speaker 00:
Is it that error by the court?

[00:26:34] Speaker 01:
No, no, no.

[00:26:35] Speaker 01:
It's not an efficiency issue.

[00:26:37] Speaker 01:
The partial frame encryption, which is a claim limitation, wouldn't have worked altogether in chance scalable system.

[00:26:48] Speaker 01:
That's the unrebutted expert testimony that we have, which the board also credited.

[00:26:53] Speaker 01:
So it's not that partial frame encryption would be less efficient.

[00:26:56] Speaker 01:
partial frame encryption wouldn't work.

[00:26:59] Speaker 01:
Then the board went an extra step and said, okay, to the extent petitioner is actually arguing, you're starting with Chen's system, we're gonna remove scalability, FEC, all of this other stuff from Chen, so that we can import partial frame encryption, if that's the petition's combination or interpretation, then there is no motivation to make that combination, because the positor wouldn't be motivated to reduce Chen's efficiency,

[00:27:23] Speaker 01:
go over modifying standard file formats and a lot of other stuff just so they could implement partial frame encryption in Chen.

[00:27:32] Speaker 03:
Why shouldn't we send this back for there to be a cleaner separation of motivation to combine from reasonable expectation of success and motivation

[00:27:51] Speaker 03:
to combine a particular starting point in Chen versus Chen as a whole so that we have a more doctrinally familiar presentation of the analysis?

[00:28:13] Speaker 01:
Because the reasonable expectation of success is by itself sufficient to affirm the board's ruling because the scope

[00:28:21] Speaker 01:
of disclosure of prior art is a question of fact, which should be affirmed as long as supported by substantial evidence.

[00:28:30] Speaker 01:
Here, the board found Chen does not disclose background description otherwise, does not disclose a system that is not scalable but is block-based.

[00:28:41] Speaker 01:
It just doesn't exist.

[00:28:42] Speaker 01:
That's the board's factual finding regarding what Chen discloses.

[00:28:46] Speaker 01:
And I emphasize that's supported by substantial evidence, because our expert opined on it.

[00:28:52] Speaker 01:
Their expert didn't rebut it.

[00:28:54] Speaker 01:
And Chen, and we point out in our briefing, has a lot of disclosures where it says, for example,

[00:29:00] Speaker 03:
Well, let me finish that.

[00:29:01] Speaker 03:
So I guess from the beginning, I keep pausing and starting to scratch my head, not just this morning, but at the very beginning, about the use of the word system.

[00:29:14] Speaker 03:
Chen doesn't describe a system.

[00:29:17] Speaker 03:
And I keep thinking, well, there's way too much play of possible meanings of that word system.

[00:29:27] Speaker 03:
Ordinarily, I think you would think a complete system, probably even Chen describing his inventive system.

[00:29:39] Speaker 03:
And I don't think there's any dispute about that.

[00:29:42] Speaker 03:
Their petition contains enough to say, we are relying on, and I think the word that the petition uses is teachings.

[00:29:52] Speaker 03:
which don't need to be a complete system.

[00:29:56] Speaker 03:
And what I don't see the board finding is that there is no disclosure in Chen of the pieces of the ultimate claim system that they want to lead a skilled artisan to.

[00:30:16] Speaker 03:
that that would not be disclosed among the teachings of Chen combined with Linda.

[00:30:25] Speaker 01:
Well, the board made an express finding that Chen has no embodiment that does not have scalability.

[00:30:33] Speaker 01:
Our expert.

[00:30:33] Speaker 03:
Well, that's your embodiment of his invention.

[00:30:38] Speaker 01:
Let me supplement that.

[00:30:39] Speaker 03:
Right, undisputed.

[00:30:40] Speaker 03:
Yes.

[00:30:41] Speaker 01:
Our expert opined that scalability is integral to everything disclosed in Chen.

[00:30:47] Speaker 03:
Everything disclosed?

[00:30:49] Speaker 03:
Every embodiment of his invention.

[00:30:52] Speaker 03:
Not just the invention, but- Which the other side says, that's not the issue.

[00:30:57] Speaker 01:
Well, they're relying on the embodiments of the invention.

[00:31:00] Speaker 03:
So if I may direct your honor to- No, they're relying on teachings in the docu.

[00:31:06] Speaker 01:
Well, they're relying on a playback device that receives specific file segments, file segment indexes, all of the elements of Chan's system.

[00:31:16] Speaker 01:
So what they're saying is we're relying on Chan's embodiment, but we're removing the scalable feature of it.

[00:31:20] Speaker 01:
That's not really what they should be arguing.

[00:31:23] Speaker 01:
But I want to highlight one point, which is, if your honor would go to page 5439 of the appendix, paragraph 101, figure one, starting from figure one of Chen, 5, 4, 3, 9.

[00:31:49] Speaker 01:
Starting from the very figure one of Chen,

[00:31:53] Speaker 01:
Everything disclosed are Chen's embodiments.

[00:31:56] Speaker 01:
There is nothing in Chen that says, here is a scalable block system that doesn't have scalability, and now I'm going to add scalability to it.

[00:32:06] Speaker 01:
That disclosure doesn't exist in Chen.

[00:32:07] Speaker 01:
Everything disclosed, starting from figure one on, is overall a scalable system where scalability is built in it, and it needs the scalability to perform various functions.

[00:32:19] Speaker 03:
Am I right?

[00:32:21] Speaker 03:
Sometimes we have patents in which there's a figure and there's a little parenthetical under the figure that says prior art.

[00:32:28] Speaker 03:
None of the figures in Chen.

[00:32:29] Speaker 01:
No, no, no.

[00:32:30] Speaker 01:
Actually, that's why I'm pointing on it to page 5439, paragraph 101.

[00:32:34] Speaker 01:
One embodiment of the invention is described in reference to figure one.

[00:32:40] Speaker 01:
So starting with figure one, the very first figure, those are embodiments of Chen.

[00:32:46] Speaker 01:
There is no discussion in Chen, and the board reasonably found that there is some adaptive bitrate streaming with indexes, with blocks, with everything as background.

[00:32:57] Speaker 01:
And then I'm going to add scalability to it.

[00:33:00] Speaker 01:
That's not the way Chen describes it.

[00:33:02] Speaker 01:
It's true that Chen's scalability discussion doesn't start until paragraph 270 and change.

[00:33:08] Speaker 01:
But Chen, from the very beginning, the title is

[00:33:13] Speaker 01:
a scalable box.

[00:33:15] Speaker 01:
In the summary of the invention on paragraph... No, that's true.

[00:33:22] Speaker 03:
In the abstract, it's all over the place.

[00:33:24] Speaker 03:
And that's not in dispute in front of us.

[00:33:27] Speaker 03:
Everything that Chen says he's invented includes scalability.

[00:33:30] Speaker 01:
Right.

[00:33:31] Speaker 01:
But I want to highlight paragraph 27, index 5435, the files or data elements are organized as blocks

[00:33:39] Speaker 01:
and the system is configured to provide and consume scalable blocks.

[00:33:44] Speaker 01:
So this system started from figure one, not as a background, everything described in Chen is a block-based system and those blocks inherently by nature are scalable.

[00:33:54] Speaker 01:
which is what the board found, and that is a factual finding.

[00:33:58] Speaker 01:
Their expert didn't oppose it, our expert opined on it, so it should be affirmed based on substantial evidence.

[00:34:05] Speaker 01:
So that's the fundamental disagreement.

[00:34:07] Speaker 01:
Petitioner points out, argues that there is this discussion in Chen from the beginning to paragraph 370 before a scalability is discussed.

[00:34:15] Speaker 01:
Everything there is an adaptive bitrate streaming without scalability.

[00:34:19] Speaker 01:
And then Chen adds scalability starting at paragraph 170.

[00:34:22] Speaker 01:
That's the way they return.

[00:34:24] Speaker 01:
The board rejected that.

[00:34:25] Speaker 01:
And that rejection is a factual determination, which is supported by substantial evidence.

[00:34:31] Speaker 01:
Are there any questions I may be able to answer?

[00:34:34] Speaker 01:
Because I believe I have exceeded my time at this point.

[00:34:37] Speaker 04:
Thank you very much.

[00:34:38] Speaker 04:
Mr. Fleming.

[00:34:40] Speaker 02:
Thank you, Your Honor.

[00:34:42] Speaker 02:
The board actually recognizes on page 10 of its decision that Chen does disclose an adaptive bitrate streaming teaching that does not have scalable layers.

[00:34:53] Speaker 02:
If you look at the summary of Chen on page 10,

[00:34:57] Speaker 02:
They cite paragraphs 63 and 64 and quote them, which are the materials that we cited from our petition from Dr. McDaniel's declaration all the way along.

[00:35:05] Speaker 02:
Chen details that video may be, quote, encoded at multiple bit rates to form different versions or representations, close quote.

[00:35:11] Speaker 02:
And those representations are broken into smaller pieces, perhaps on the order of a few seconds each to form segments, with each segment stored as a separate file.

[00:35:19] Speaker 02:
As a client device requests segments, it switches to different data rates based on available bandwidth.

[00:35:23] Speaker 02:
That is adaptive bitrate streaming as it was known in the prior art.

[00:35:27] Speaker 02:
There is no scalability discussion there.

[00:35:29] Speaker 02:
Chen goes on to add scalability and that's what it claims at the very end of its 554 paragraph

[00:35:36] Speaker 02:
application.

[00:35:37] Speaker 02:
There are two claims at the end, both of which involve scalable layers.

[00:35:40] Speaker 02:
It is true, and for purposes of this appeal we do not dispute, that the board found that there are no embodiments of the claimed invention in Chen that don't involve scalability.

[00:35:50] Speaker 02:
Now we disagree with that on the merits, but that's neither here nor there for purposes of this discussion, because even if that is true, that the embodiments of Chen's claimed invention all involve scalability, that does not exhaust everything else that Chen teaches.

[00:36:04] Speaker 02:
Chen is also relevant

[00:36:06] Speaker 02:
as a description of how far the prior art had come at that time on which Chen was trying to improve.

[00:36:13] Speaker 02:
Judge Raina, to your question about efficiency, of course, what the board found was a purported problem with efficiency compared, again, to Chen's claimed invention.

[00:36:24] Speaker 02:
That was not the motivation to combine that we were advancing, nor was it the reasonable expectation of success.

[00:36:29] Speaker 02:
We were comparing it to prior ART adaptive bitrate streaming, which, again, the board recognized was the nature of the combination we were trying to put forward.

[00:36:39] Speaker 02:
On page A22, I'll point out at the bottom,

[00:36:41] Speaker 02:
There's a discussion of petitioners' assertions that the petition need consider only the very basic adaptive bitrate streaming aspects.

[00:36:49] Speaker 02:
That is what we were talking about.

[00:36:51] Speaker 02:
And combining Lindahl with basic adaptive bitrate streaming would certainly improve efficiency.

[00:36:56] Speaker 02:
Because instead of having to encrypt the entire picture, you're just encrypting part of it, which means you'd only have to decrypt part of it.

[00:37:03] Speaker 02:
You don't need as much computation.

[00:37:04] Speaker 02:
It can be done on a battery-operated smartphone or tablet.

[00:37:08] Speaker 02:
It didn't need something that was on a big computer or television.

[00:37:10] Speaker 02:
That's the improvement that Lindahl offered to adaptive bitrate streaming as basically disclosed in the beginning of Chan, completely apart from scalability.

[00:37:19] Speaker 02:
It is certainly the case, and I don't think this is disputed,

[00:37:24] Speaker 02:
that Lindahl would serve the purpose of fighting piracy because, once again, let's remember, and the board recognizes this as well, Chen itself does not call for any particular type of digital rights management.

[00:37:36] Speaker 02:
It alludes to it at various points, but it doesn't say you need to use it.

[00:37:41] Speaker 02:
Lindahl provided a way of doing it that was more efficient.

[00:37:44] Speaker 02:
The fact that Chen then went on to disclose scalability, which he said, here's another way to be more efficient, doesn't mean that it would somehow teach away or discourage using Lindahl's different way of improving efficiency.

[00:37:54] Speaker 02:
Allied erecting is recognized, and this court recognizes in plenty of other cases, that a combination may have various advantages or disadvantages.

[00:38:01] Speaker 02:
That doesn't dispel reasonable expectation of success.

[00:38:03] Speaker 02:
It certainly doesn't dispel a motivation to combine either, had there even been such a finding, which we don't think the board made.

[00:38:09] Speaker 02:
Unless the court has further questions, we respectfully submit that the court should reverse on reasonable expectation of success, and we're at the very least, vacate and rebate.

[00:38:17] Speaker 04:
Thank you.

[00:38:17] Speaker 04:
Thanks to both counsels.

[00:38:19] Speaker 04:
Thank you.

[00:38:19] Speaker 04:
The case is taken under submission.

[00:38:21] Speaker 04:
That concludes this panel's arguments for today.