[00:00:00] Speaker 04:
Our next case for argument is 21-1796, Grant Diagnostics versus O'Lear.

[00:00:09] Speaker 04:
Mr. Bunker, please proceed when you're ready.

[00:00:11] Speaker 01:
Thank you, Your Honors, and may it please the Court.

[00:00:13] Speaker 01:
The Board erred in two ways in finding claims 3 through 6 and 10 unpunctual.

[00:00:19] Speaker 01:
First, the Board improperly allowed O'Lear to attempt to backfill fatal gaps in its petition with new arguments and a new expert declaration on reply.

[00:00:29] Speaker 01:
Second, even considering Allir's new arguments and new evidence, the board's unpatentability determination did not find substantial evidentiary support in the record.

[00:00:41] Speaker 01:
If we look at the first error, the law and the rules require that an IPR petitioner, in its petition, identify with particularity the full grounds and evidence for its challenge and to include the full arguments for the relief it is seeking.

[00:00:59] Speaker 01:
An IPR petitioner may not use a reply to add new arguments and new evidence that should have been included.

[00:01:05] Speaker 03:
Is your argument that in this case the arguments that were made in the reply are totally devoid of any type of connection with the arguments that were made before that filing?

[00:01:16] Speaker 01:
Yes, our position is that in the petition the arguments were conclusory.

[00:01:21] Speaker 01:
And therefore, when Allir came back on reply to try to fix those mistakes or fill in those gaps, that is tantamount to making a new argument on reply.

[00:01:32] Speaker 01:
And that's our basis that cases such as Waseca finders.

[00:01:36] Speaker 03:
What's a reply for to that?

[00:01:38] Speaker 01:
The reply is for and under the case law... It's to respond to arguments previously made.

[00:01:44] Speaker 01:
It is to respond in a proper response to arguments made.

[00:01:48] Speaker 01:
And also, Alir had the opportunity to point the board to evidence in its petition that the board overlooked or maybe misunderstood, or to clarify the board's misunderstanding of evidence or arguments in its petition.

[00:02:03] Speaker 01:
If we had submitted new evidence, Alir could have responded to that evidence as well.

[00:02:10] Speaker 01:
But we did not.

[00:02:11] Speaker 01:
So Alir did not point to the board to evidence that was in the petition that the board overlooked.

[00:02:18] Speaker 01:
It didn't point to arguments in the petition that the board misunderstood.

[00:02:23] Speaker 01:
It was not responding to evidence that we submitted because we submitted no evidence with our patent on it.

[00:02:29] Speaker 02:
It was responding to arguments that you made.

[00:02:33] Speaker 01:
In our view, we were not making new arguments.

[00:02:36] Speaker 01:
What we did was point out gaps that they failed to close in their petition.

[00:02:47] Speaker 01:
The reply can respond to an argument, but that response may not add new arguments or new evidence improperly in violation of the statute.

[00:02:58] Speaker 01:
So certainly a response is okay.

[00:03:00] Speaker 02:
This is a totally abstract discussion.

[00:03:04] Speaker 02:
I mean, your description of the situation doesn't correspond to my reading of the record.

[00:03:14] Speaker 02:
What are a couple of examples where

[00:03:16] Speaker 02:
The reply created new arguments that didn't exist in the petition in the first place.

[00:03:26] Speaker 01:
One example that comes to mind is if we look at claims three through six.

[00:03:30] Speaker 01:
Claims three through six was ground 12 in the petition.

[00:03:35] Speaker 01:
The primary reference was tidings.

[00:03:39] Speaker 01:
The secondary references were McKay and Leon.

[00:03:44] Speaker 01:
In the petition, Alir asserted that the motivation for modifying the primary reference tidings was provided by our own patent, which is improper.

[00:03:57] Speaker 01:
You cannot use our patent teaching against itself.

[00:04:01] Speaker 01:
That is classic hindsight.

[00:04:03] Speaker 01:
Alir also are, that's at appendix 160, Alir also are asserted that a motivation for modifying tidings was to quote, and this is at appendix 163,

[00:04:14] Speaker 01:
Achieve the benefits of having the liquid sample contact the test strip only at a predetermined designated area designed for direct contact with the liquid, as taught by McKay or Lyon.

[00:04:27] Speaker 01:
Okay.

[00:04:28] Speaker 01:
Allir said, achieve the benefits.

[00:04:31] Speaker 01:
But what benefits?

[00:04:33] Speaker 01:
Allir identified and described no benefits.

[00:04:36] Speaker 03:
To that point, I think they also argued that

[00:04:39] Speaker 03:
A skilled artisan would have been motivated to make a proposed modification in removing the wicking material to tidings to reduce costs and simplify tidings devices.

[00:04:50] Speaker 03:
Is it that a response both at a broad level and yet at a very detailed technical level?

[00:04:56] Speaker 01:
I don't believe so, Your Honor.

[00:04:58] Speaker 01:
That's our whole issue is that in the petition, Alir simply said achieve the benefits without identifying or explaining what those benefits are.

[00:05:07] Speaker 01:
In our Patent Honor response, we said Alir failed to satisfy his burden because it didn't explain what those benefits are.

[00:05:15] Speaker 01:
Then on reply, that's where Alir comes back and tries to fix its mistake by saying cost reduction and simplifying the tidings rubric.

[00:05:24] Speaker 02:
But that's exactly what a reply is for, is to elaborate on a point that was made in the petition.

[00:05:31] Speaker 02:
And this doesn't seem to be a new argument.

[00:05:35] Speaker 02:
It just seems to be an elaboration of what they meant by benefits.

[00:05:39] Speaker 01:
We see it differently, Your Honor.

[00:05:41] Speaker 01:
We do see it as going beyond simply an elaboration.

[00:05:44] Speaker 01:
When the rules require the petitioner to identify their ground with particularly in the petition and they insert a broad, generic, undefined benefit or motivation, it's not proper to come back on reply and actually explain, okay, what we really meant was X, Y, and Z. To us, that is not an elaboration.

[00:06:07] Speaker 01:
That's a new argument.

[00:06:09] Speaker 01:
And we see that in the case law, such as Waysick of Finance and also the non-precedential decision of Microsoft BIPA Technologies.

[00:06:17] Speaker 01:
There, the court said, this argument is not responding to any non-conclusory argument in the petition.

[00:06:25] Speaker 01:
Therefore, it's a new one, and it should not be considered on reply.

[00:06:29] Speaker 04:
OK, so see if you can walk me through this, because I'm having trouble following it exactly.

[00:06:33] Speaker 04:
For claims three to six,

[00:06:35] Speaker 04:
What is it that you say they limited themselves to in the petition as far as the motivation to combine?

[00:06:42] Speaker 01:
It's not so much a limit.

[00:06:44] Speaker 01:
It is that they failed to articulate what the motivation is.

[00:06:48] Speaker 01:
And in our view, they said, achieve the benefits of direct fluid delivery.

[00:06:53] Speaker 04:
But that's the way.

[00:06:54] Speaker 04:
But achieve the benefits of direct fluid delivery.

[00:06:56] Speaker 04:
And then you challenged that in your patented response.

[00:07:01] Speaker 04:
And they came back and replied, and didn't they just

[00:07:03] Speaker 04:
point to the patent itself with the claim that those benefits are removing wicking material and reorienting the flow control channels?

[00:07:11] Speaker 01:
Well, to the extent they pointed to our own patent, that doesn't satisfy their burden.

[00:07:16] Speaker 01:
Our patent is not prior art and cannot supply a motivation.

[00:07:20] Speaker 01:
But I think more what they did, and you can see this at Appendix 777 in their reply,

[00:07:26] Speaker 01:
What they did on reply is come back and say, well, the benefits, the previously unidentified benefits, are to one, reduce cost.

[00:07:35] Speaker 04:
But when you say the previously unidentified benefits, wouldn't it be fair for the board to interpret the benefits that they articulate in the petition as being the same benefits you articulate in the patent?

[00:07:46] Speaker 01:
I don't think that solves the issue, though.

[00:07:51] Speaker 01:
what the inventor came up with and what the inventor solved the problem can't be then turned against the inventor and used against the inventor as

[00:08:03] Speaker 01:
as a roadmap for the invention.

[00:08:06] Speaker 01:
To us, that's hindsight.

[00:08:08] Speaker 01:
It wasn't like the inventor in the patent said, the prior art teaches X, Y, and Z. It wasn't an admission of prior art in the patent.

[00:08:17] Speaker 01:
What Allir was using is that they said, well, the patent says you can do this and it was beneficial.

[00:08:23] Speaker 01:
Well, that's because we figured it out.

[00:08:24] Speaker 01:
That was why we got a patent.

[00:08:25] Speaker 04:
So the problem with your argument, for me, one of the problems with your argument is you're so in the weeds.

[00:08:32] Speaker 04:
This is substantial evidence stuff and then you're saying it wasn't raised in the petition so therefore they shouldn't have been able to say it this way in the reply.

[00:08:42] Speaker 04:
It looks like to me that it's okay in the reply.

[00:08:45] Speaker 04:
But the real problem is, for me, you know what?

[00:08:49] Speaker 04:
You're so in the weeds.

[00:08:51] Speaker 04:
And this isn't something that we do on appeal.

[00:08:53] Speaker 04:
This is something you should have brought before the board.

[00:08:56] Speaker 04:
And you didn't bring this particular issue before the board.

[00:08:59] Speaker 04:
This case went back on remand.

[00:09:01] Speaker 04:
And while you made general allegations about new evidence, you didn't identify this one.

[00:09:06] Speaker 04:
So if you had, that would really help us, right?

[00:09:08] Speaker 04:
Because then the board could have addressed this very nuanced, very factual, very narrow case-specific issue.

[00:09:15] Speaker 04:
But they didn't because you didn't raise it for them.

[00:09:19] Speaker 04:
And so now you want us on appeal to dig into something very factual and narrow that's hard to understand when there isn't a finding from the board that would help you.

[00:09:30] Speaker 01:
May I make two points in response to that?

[00:09:31] Speaker 04:
Yeah, because basically I'm saying you forfeited this argument.

[00:09:34] Speaker 04:
So tell me why you didn't forfeit it, why your general allegations of new evidence, which wasn't specific to this, nonetheless preserved it.

[00:09:42] Speaker 01:
So what we argued in our brief and what we maintain is what we said in our surreply down to the board on page one, and also what we said to the board at the oral hearing was sufficient to put the board on notice of our objection to Allere's reply, including the two grounds that are issue on this appeal.

[00:10:01] Speaker 02:
Where in the surreply did you raise this point?

[00:10:04] Speaker 01:
In our view, we raised this point on the first page of our surreply, where we objected to Allere's reply.

[00:10:13] Speaker 01:
This is 793.

[00:10:14] Speaker 01:
And I would add that we also emphasize the same objection at the oral hearing before the board.

[00:10:25] Speaker 02:
But all this does on 793 is just a general statement, as Chief Judge Moore said, about these are new arguments.

[00:10:32] Speaker 02:
But he didn't specify which ones were new arguments.

[00:10:36] Speaker 02:
He didn't specify these that we've been talking about here as new arguments.

[00:10:41] Speaker 01:
To the extent that Allir asserts that every statement from the reply needs to be identified as new or not to the board, we don't see any support for that.

[00:10:55] Speaker 01:
We maintain that what we said in this reply.

[00:10:57] Speaker 04:
The forfeiture has an equitable component to it.

[00:11:00] Speaker 04:
And on appeal, you want me to dig deep into the weeds and try to understand this nuanced difference between what they did say in the petition on motivation for claims three through six

[00:11:10] Speaker 04:
And then what they elaborated on in the reply.

[00:11:13] Speaker 04:
And you'd like me to make some factual determination that those things are not an expansion of one argument, but rather a completely new argument.

[00:11:22] Speaker 04:
But when we contemplate forfeiture, it bothers me that you didn't raise that argument with any particularity like you are now for us to the board.

[00:11:32] Speaker 04:
Had you done that, the board could have addressed it in the first instance, in detail.

[00:11:36] Speaker 04:
And then I wouldn't be in this awkward position of trying to

[00:11:40] Speaker 04:
understand these nuances that you're drawing between the petition and the reply.

[00:11:45] Speaker 04:
So for me, with all due respect, this is exactly what notions of forfeiture go to, or waiver, or whatever you want to say, because you had an opportunity to flesh this out, and there could have been a fact-finding body that would have given me helpful and detailed information to understand how to understand these issues, and you didn't.

[00:12:04] Speaker 04:
And so now you want the appeal court to do it in the first instance.

[00:12:08] Speaker 04:
I don't know.

[00:12:09] Speaker 04:
It doesn't feel like something that I feel like I should really get into since you had a chance to bring it below and you didn't.

[00:12:15] Speaker 01:
Well, let me make a couple of points, Your Honor.

[00:12:17] Speaker 01:
So first off, we do have the guidance from the board itself and its trial practice guide where the board says, we are capable of identifying new issues and belatedly presented evidence, number one.

[00:12:30] Speaker 01:
Number two, I would also add that in the final written decision, the board addressed new arguments and new evidence

[00:12:37] Speaker 01:
for a ground on which we did not elaborate as we did with other egregious examples in O'Lear's reply.

[00:12:47] Speaker 01:
And you can see that on Appendix 59.

[00:12:49] Speaker 04:
I don't know how that helps you.

[00:12:52] Speaker 04:
The fact that the board itself identified something wrong with the process,

[00:13:00] Speaker 04:
Great, that's awesome, but it doesn't relieve you of your obligation to identify other things that you think are wrong with the process if you then want to bring them on appeal.

[00:13:09] Speaker 01:
The point being that the fact that the board is addressing things outside of the grounds on which we elaborated, in our view, supports the conclusion that the board understood our objection as not limited to simply the grounds that we pointed out as egregious examples of these new arguments and new evidence.

[00:13:29] Speaker 02:
I'd also add that we are not simply dealing with a review of board... In this decision, the board didn't address the new evidence theory in connection with the arguments that you're making now.

[00:13:44] Speaker 01:
They did not address the new arguments and new evidence on the two grounds that were at appeal.

[00:13:49] Speaker 01:
But in our view, the fact that we did not elaborate on those two does not mean that we forfeited that argument.

[00:13:56] Speaker 01:
in our view and what we said at the oral hearing and what we said in our survey.

[00:14:00] Speaker 03:
Look at that page you drew our attention to on 793 and that's the introduction of the survey flag brief.

[00:14:09] Speaker 03:
Siser talks about the new approaches go beyond responding to the patent owners arguments and should be disregarded and that the new theories nevertheless fell on the merits.

[00:14:19] Speaker 03:
Then you go on and argue.

[00:14:20] Speaker 03:
You're saying basically that it's the same argument.

[00:14:23] Speaker 03:
You go, they still fail to teach.

[00:14:25] Speaker 03:
The petitioner still stretches new approaches to achieve that.

[00:14:31] Speaker 03:
You're saying that these new arguments are basically it's material that's already been handled.

[00:14:41] Speaker 03:
And you don't argue here that it would be improper for the board to consider the arguments.

[00:14:46] Speaker 03:
In fact, you say it's more merits and we think they still fail.

[00:14:51] Speaker 01:
I don't think in our view it's not making this the same point.

[00:14:56] Speaker 01:
Our point was that they shouldn't have been considered in the first place.

[00:15:01] Speaker 01:
They were new because they weren't made in the petition adequately.

[00:15:06] Speaker 01:
But the second argument is even if you consider them, let's consider those

[00:15:13] Speaker 01:
They still don't have substantial evidentiary support in the record because they don't find support in the prior art.

[00:15:19] Speaker 01:
They conflict with the prior art.

[00:15:21] Speaker 01:
There's no substantial evidentiary support for those new assertions.

[00:15:28] Speaker 04:
OK.

[00:15:28] Speaker 04:
Thank you, counsel.

[00:15:31] Speaker 04:
Thank you.

[00:15:31] Speaker 04:
Even though you used it all, I'll restore your three minutes of rebuttal time.

[00:15:36] Speaker 04:
Thank you.

[00:15:37] Speaker 00:
Mr. Wilcox.

[00:15:37] Speaker 00:
Thank you, Chief Judge Moore, and may it please the court.

[00:15:39] Speaker 00:
Jason Wilcox on behalf of the leader.

[00:15:41] Speaker 00:
Chief Judge Moore, I think you're exactly right that on this issue of whether we raised an improper argument in our reply, it was waived by Rembrandt below because they didn't raise it to the board.

[00:15:52] Speaker 04:
You mean waived or forfeited?

[00:15:54] Speaker 00:
I said waived.

[00:15:55] Speaker 00:
If you want to consider a forfeiture, I think that's OK.

[00:15:58] Speaker 00:
This court uses it both ways in its opinions and generally uses waiver as a shorthand.

[00:16:04] Speaker 00:
But I think whether you consider it waiver or forfeiture, it leads to the same result.

[00:16:10] Speaker 00:
And as you said, if you look at Appendix 793, which is where they say they raised this in their cert reply, they make just generic statements about there supposedly being new arguments without offering any detail.

[00:16:21] Speaker 02:
And then when they get into the law... They do offer detail, but it's about Czapkowski or whatever it is that isn't one of the issues we have here.

[00:16:28] Speaker 00:
That's exactly right, Judge Deichen.

[00:16:29] Speaker 00:
That's exactly where it's going to go, which is when they wanted to point out to the board and ask the board to look at a new argument, they went into detail for the combination of McKay and Sipkowski at appendix 794 through 806.

[00:16:42] Speaker 00:
And over and over again in that section, they argued there were new arguments, that they were improper.

[00:16:46] Speaker 00:
They cited the regulations.

[00:16:48] Speaker 00:
They cited this court's cases.

[00:16:50] Speaker 00:
That's how you put the board on notice

[00:16:52] Speaker 00:
that there's a new argument.

[00:16:53] Speaker 00:
But then when they got to the combinations that matter here on Appendix 806 to 809 and again at Appendix 813, they didn't come back and make those same arguments.

[00:17:03] Speaker 00:
They instead just addressed it on the merits.

[00:17:06] Speaker 00:
So I think it was entirely appropriate and fair for the board to interpret the arguments that they were making about whether there were improper new arguments in reply as limited just to the combination of McKay and Sapkowski.

[00:17:18] Speaker 00:
which is not a ground that the Board relied on in finding Claims 3 through 6 and Claim 10 obvious.

[00:17:25] Speaker 00:
And then Mr. Bunker also mentioned the oral hearing.

[00:17:28] Speaker 00:
Well, if you look at Appendix 974 to 975,

[00:17:33] Speaker 00:
which is the oral hearing where they raise this, they again make a general assertion that there were new arguments, and then they give the board one example, and it's the combination of McKay and Sipkowski.

[00:17:43] Speaker 00:
They don't go on to raise any concerns about the combination of McKay with Charm or Mae, or the combination of tidings with McKay or Leo.

[00:17:54] Speaker 00:
So we think the court doesn't even then need to get into whether there were improper new arguments on reply, but we think that there weren't.

[00:18:03] Speaker 00:
What they talked about specifically was claims three through six in the combination of tidings with

[00:18:09] Speaker 00:
Leon and McKay.

[00:18:11] Speaker 00:
And there, as the court noted, we pointed out there were benefits.

[00:18:15] Speaker 00:
The board understood the benefits that we were talking about were the ones that are identified in the patent.

[00:18:19] Speaker 00:
You can see that at Appendix 336.

[00:18:21] Speaker 00:
The board's question was, well, we're not sure whether people would have recognized that benefit before this patent came out.

[00:18:30] Speaker 00:
Then in our reply and in Dr. Bohannon's declaration, he came back and pointed out that if you look at Leon itself at column three, line 65 to 67, it talks about the advantages of removing the wicking material and addressed that concern.

[00:18:47] Speaker 00:
So this isn't a case like Wasika, which is the one case that Mr. Bunker mentioned, where all that happened in the petition was a party just said, if it is anticipated, it would have been obvious, with absolutely no articulation, and then came back in the reply and tried to offer a completely new theory of a motivation to combine.

[00:19:05] Speaker 00:
For claims three through six, and also for claim 10,

[00:19:08] Speaker 00:
The prior art was exactly the same in our petition and in our reply.

[00:19:12] Speaker 00:
The motivation to combine was exactly the same.

[00:19:14] Speaker 00:
We didn't introduce any new documentary evidence.

[00:19:18] Speaker 00:
It was just Dr. Bohannon, in our reply, responding to their attorney argument, which is exactly what the board's rules say is OK, is what this court's cases say is OK.

[00:19:28] Speaker 00:
And there is no reason to second guess that decision here.

[00:19:32] Speaker 00:
And as a matter of fact, for this combination

[00:19:35] Speaker 00:
Leon with tidings in particular, the board in its final written decision at appendix 34 to 35 specifically said, when we point it out, we'll look at Leon itself, that that was a proper reply argument.

[00:19:49] Speaker 00:
So even though they didn't object, the board went out and affirmatively made a finding.

[00:19:52] Speaker 00:
That's not an abuse of discretion.

[00:19:55] Speaker 00:
I welcome the court's questions, but otherwise we rest on our briefs and thank the court for its time.

[00:20:00] Speaker 04:
Thank you, Mr. Wilcox.

[00:20:01] Speaker 04:
Mr. Bunker, you've got three minutes for rebuttal.

[00:20:04] Speaker 01:
Thank you, Your Honor.

[00:20:05] Speaker 01:
Just a few points.

[00:20:06] Speaker 01:
First, I disagree with the statement that the Board recognized what those benefits were.

[00:20:11] Speaker 01:
While the institution decision down below is not binding, we recognize this.

[00:20:15] Speaker 01:
The fact that the Board declined to institute on those grounds, finding that Allere failed to even show a likelihood of proving infringement on those claims, undercuts the suggestion that the Board recognized what it meant by saying benefits.

[00:20:30] Speaker 01:
or saying these conclusory assertions.

[00:20:33] Speaker 01:
It wasn't until the reply where they articulated their new arguments such as reducing cost, simplifying the device, where the board said, okay, that's enough.

[00:20:45] Speaker 01:
We don't think that's enough, but that's what happened here.

[00:20:47] Speaker 01:
So we disagree that it was just elaborating or clarifying what came in the petition.

[00:20:53] Speaker 01:
It clearly was not the case.

[00:20:56] Speaker 01:
Council also mentioned the citation

[00:20:58] Speaker 01:
to a portion of Leon, and I think this fits into the same category, that citation to Leon that council mentioned was not in the petition.

[00:21:09] Speaker 01:
It wasn't until after the board

[00:21:12] Speaker 01:
pointed out the gap in the petition that on reply, a leader came back and said, well, how about this portion of Leon?

[00:21:19] Speaker 01:
And in cases like Arioso, where it says, the identification of a previously unidentified portion of a prior art reference is a new argument, and we're not going to consider it.

[00:21:31] Speaker 01:
That addresses that issue.

[00:21:35] Speaker 01:
The other point that we didn't talk about, claim 10.

[00:21:42] Speaker 01:
on the substantial evidence issue for Claim 10, and if I might just take a few seconds on Claim 10.

[00:21:48] Speaker 01:
This is the embodiment of a single flow control channel with multiple test strips disposed in the same flow control channel.

[00:21:56] Speaker 01:
On the merits, even considering all... Mr. Boncker, I have to stop you.

[00:21:59] Speaker 04:
It's not fair.

[00:22:00] Speaker 04:
I don't think you brought this up in your opening, did you?

[00:22:03] Speaker 01:
I did not get to this point, Your Honor.

[00:22:04] Speaker 01:
That's correct.

[00:22:05] Speaker 04:
Yeah, so it's not fair to Mr. Wilcox because then he didn't get a chance to respond.

[00:22:08] Speaker 01:
Understood.

[00:22:08] Speaker 04:
You'll have to rest on your briefs on the Claim 10 argument.

[00:22:10] Speaker 01:
Okay, I'll pass on that, but maybe I can make one more point.

[00:22:13] Speaker 01:
As I started mentioning earlier in the argument, and I think this is responsive to what Mr. Miller-Clock said, we are not simply talking about a review or procedure here.

[00:22:24] Speaker 01:
There is a statute.

[00:22:25] Speaker 01:
35 U.S.C.

[00:22:27] Speaker 01:
312 mandates what must be in the petition.

[00:22:31] Speaker 01:
And so we disagree with the characterization that this is

[00:22:36] Speaker 01:
you know, something that, you know, the board is entitled to deference or fact finding.

[00:22:43] Speaker 01:
There is a statute here.

[00:22:45] Speaker 01:
If the board did not follow the law, then that is an abuse of discretion and the board's decision should be set aside.

[00:22:52] Speaker 01:
Thank you, Hunter.

[00:22:53] Speaker 04:
Thank both counsel for their argument.

[00:22:54] Speaker 04:
This case is taken under submission.