[00:00:00] Speaker 02:
Number 22, 1546, Sony Interactive Entertainment versus Intellectual Pixels Limited, Mr. Dowd.

[00:00:09] Speaker 02:
Good morning, your honors.

[00:00:10] Speaker 03:
May it please the court?

[00:00:11] Speaker 03:
My name is Jim Dowd, and I'm appearing on behalf of Helen Sony.

[00:00:15] Speaker 03:
May I proceed?

[00:00:16] Speaker 03:
Yes.

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The board's final written decision commits two errors that I plan to address with your honors this morning.

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The first is the board's decision analyzed the long obviousness combination.

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This is a legal error reviewed de novo.

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The second is the board refused to consider Sony's supplemental reply, which was an abuse of discretion.

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To kind of level set, there's only one claim that's at issue in this appeal, which is dependent claim four.

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Claim four depends from claim one, which the board found was invalid based upon two references, Schmidt and Kesslin.

[00:00:54] Speaker 04:
OK, so can I just cut to the chase?

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A lot of your friend's argument on the other side seems to be the evolving theories you had.

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One, two, three, four, I lost count.

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So can you tell us what your theory with regard to Schmidt was in your initial petition?

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Yes, Your Honor.

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The theory in the petition, and this is at A55080,

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was that a person of skill would have been motivated to apply.

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Give me a second.

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What's the site?

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5080.

[00:01:31] Speaker 03:
Got it.

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And at 5080, you'll see the theory of the petition is that a person of skill would have been motivated to apply the standards teaching, the teaching

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of an inter-frame spacing delay to Schmidt's client server system.

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Not the whole of the standard, not collision detection, not CSMA-CD, which is just the title of the standard, but the teaching, the specific teaching of an inter-frame spacing delay.

[00:02:10] Speaker 02:
There's no reference in the petition to the 1998 standard, right?

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There is not your honor and we don't need the 1998 standard to prevail because why not the teaching of an interframe spacing delay is in the 1985 standard That same teaching is expressed identically in the 1998 standards So if we disagree with you and say that the 1998 standard is essential the board was right in saying that you didn't

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raise the right part of that to a server ploy and you lose, right?

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I would respectfully disagree, Your Honor, for two reasons.

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Number one is the teaching of an inter-frame spacing delay.

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If we step back to what the claim is for a second, all of claim one.

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I think you're not accepting my hypothetical.

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My hypothetical is if we conclude that the 1998 standard is essential to the obviousness theory,

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That wasn't raised in the petition.

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The right part of it wasn't raised until the sir reply and you'd lose on this issue.

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Right.

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I, again, your honor, I would respectfully disagree.

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And if I can just walk your honor through, but I want you to walk me through it with my hypothetical, accepting my hypothetical rather than fighting.

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And I, and I, I'm going to attempt to do that, your honor.

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And the reason is if you start with what the petition argues, the petition says,

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that it's the teaching of an inter-frame space into that.

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You're not accepting my hypothetical?

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You are simply not.

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What I said is if we hold that the 1998 standard is essential to the obviousness theory, then you lose.

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I mean, you may argue that it's not essential, and that's what you are arguing.

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But if it is essential, you lose, right?

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The reason that I would say no, your honor, is because of the sequence of arguments that happened from the petition.

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Council, are you relying on the 1998 standard?

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Are you relying on the 1985 standard?

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We're relying on the 1985 standard and the 1998 standard is simply evidence that is responsive to the argument that IPL made.

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IPL was the first to submit the 1998 standard.

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It did it by submitting an incomplete abstract.

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which it then argued in its POPR and in its POR.

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But if we think that your motivation to combine doesn't make sense because the 1985 standard, because Schmidt refers to a faster standard, if we think if we read Schmidt to require reference to the 1998 standard, then what would your argument be then?

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the hypothetical.

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I think that's the hypothetical.

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Right.

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It's that whether it's the 1998 standard or the 1985 standard.

[00:05:04] Speaker 00:
Oh, no.

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But if we think you need the 1998 standard.

[00:05:08] Speaker 03:
Yes, Your Honor.

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Just hypothetically, then is that the end of your case?

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I don't believe it is.

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OK.

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So let's assume that you need to have the 1998 standard then.

[00:05:19] Speaker 03:
OK.

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What is your argument then?

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My argument is that the reason that the 1998 standard came into this case at all

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is that in its patent owner preliminary response, IPL submitted a copy of that standard.

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But it submitted an abstract, not the actual standard.

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And it said, oh, a person of skill would not have combined inter-frame spacing with Schmidt because the 1998 standard is 100 megabits per second, not 10.

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That was their argument.

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We responded to that.

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And under this court... You're still not answering the question.

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I mean, I'm sorry.

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You're just not answering it.

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You're wandering around saying the 1998 standard is not essential to your theory.

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And we're asking you if we're to decide that it is essential

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So the obviousness thing you lose because you didn't raise it in the petition or in fact, the right part of it in the reply.

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Let me try to be as direct as I can.

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This court's precedent says we can respond to arguments raised by the petitioner, I'm sorry, by the patent owner after the petition.

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And I would commend to Your Honor's Intel versus PACT, which was decided after our briefing.

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In the reply, you didn't even cite the part of the 1998 standard that you're relying on in the server.

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We did, Your Honor.

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In the reply, we cited the 1998 standard and specifically inter-frame spacing in response to the argument that the POR had made about 10 versus 100 megabits.

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of full versus half duplex, which is what the board ultimately relied on.

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IPL didn't raise that issue until a sir reply after our reply.

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And it's that issue which the board then picked up on and said, and then compared the wrong thing.

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It compared collision detection as a part of the combination, but collision detection is not part of the combination.

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The combination is inter-frame spacing alone.

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And the point that we made in our, in our response to the seroply, which of course the board did not consider, and we would suggest is error not to consider, is that whether it's full duplex or half duplex, whether it's 10 megabits per second or a hundred megabits per second, inter-frame spacing is used consistently, independently of whether collision detection is used.

[00:07:59] Speaker 00:
I hear you.

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Anyway, I have other concerns that I want to ask you about.

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I see this as being not too easy of an issue.

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And maybe if I were the party that were ruling on this in the first instance, I may have ruled differently on whether your reply was responsive or not.

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But there's a very deferential standard of review.

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So some of the things I'm looking at here

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include that in your reasonable expectation of success discussion in your petition you do reference CSMA-CD and you say that there would have been a reasonable expectation of success because you would use the Ethernet's Interframe Spacing would simply be used for its intended purpose of providing the Interframe Recovery for CSMA-CD and then additionally on page A5078

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There's, again, more discussion of collision detection.

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And also on page 5079, I agree with you that when you described your motivation to combine, you didn't refer to the collision detection.

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But everywhere else, including the reasonable expectation for success, you did.

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So why doesn't that support the board's ruling in this case?

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The reason is because, Your Honor, what we were using was the name of the standard.

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The name of the standard is

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Carrier Sense Multiple Access with Collision Detection, CSMA-CD.

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That's the name the IEEE chose to give to the 1985 standard.

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That's at A1477.

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Coincidentally, if we look at the 1998 standard, that's at A1973.

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It has the identical name.

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It is the same

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standard.

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It's just the name of the standard, and we didn't bodily incorporate the entirety of the standard.

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We said only this teaching is what we are using.

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And the teaching, if I take you to it, of inter-frame spacing, in the 1995, I'm sorry, 85 standard, it's at A1513,

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It's section 4.2.3.2.2.

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It's independent of any other thing.

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There's a separate section on collision handling that is below that.

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There's a separate section on collision detection that's below that yet again.

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All we refer to is the inter-frame spacing section.

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If I take your honors to the 1998 standard, and this is at A2066, you see the same structure in the 1998 standard.

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On page 2066, there's section 4.2.3.2.2, which is inter-frame spacing.

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It is described identically.

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This is intended to provide inter-frame recovery time for other CSMA CD sub-layers and for the physical medium.

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That's the benefit that we called out.

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It's the same benefit for fast ethernet in 1998 as it was in 1985.

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And if you look just above what I'm quoting, there's a section on full duplex mode.

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on page 2066 that says the MAC, which is the media access control layer that this standard is defining, continues to defer for a proper inter-frame spacing, and it cites that same section.

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So in full duplex mode, the evidence is you still use inter-frame spacing.

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Now, if I return to this court's decisions and the case, for example, of Anacor,

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What this court has held is that the petitioner in an inter partes review proceeding may introduce new evidence after the petition stage if the evidence is a legitimate reply to evidence introduced by the patent owner.

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So first, this was a reply to the argument made in the POR and in a sur-reply.

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And then also, if it is used to document the knowledge that skilled artisans would bring to bear in reading the prior art identified

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as producing obviousness.

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Well, a person of skill here would understand that inter-frame spacing did not change from 1985 forward.

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And it's used in every version of the Ethernet standard.

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That's the point.

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And it is not disputed that inter-frame spacing discloses claim four.

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It discloses that element of claim four, which is simply a delay before sending a known signal.

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There really is, I think, no dispute on that.

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But Your Honor, I didn't mean to cut off your question.

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I was just going to ask.

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I think in some of the cases that I was looking at, the difference was that the new evidence that was provided was to explain how the reference cited in the petition works.

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Here, it feels more like the new reference

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is provided to explain, hey, there's been no change, and this is really what we meant to cite, because this is the standard that's actually used by the primary reference.

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When we cited the 1985 version, because it demonstrates that this Claim4, this Interframe Spacing Delay, is something that had been known for 15 years by the time that we get to the 093 patent.

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This is old technology.

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It is nothing new.

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There seems to have been, we did not bodily incorporate collision detection or the rest of the protocol.

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It's simply that a person of skill reading Schmidt, reading that it would use Ethernet, would immediately recognize the benefit of having an inter-frame spacing delay as a part of its transmission scheme, because that's what Ethernet has always done.

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And it continues to do so.

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And it was only because IPL then said, oh, there's a difference between 100 and

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10 megabits per second that we responded and said, no, there isn't.

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That's counterfactual.

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Here's the evidence to show there is no difference.

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And then it changed arguments yet again.

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It changed from arguing the 100 to 10 to arguing full duplex versus half duplex.

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That came up for the first time in a sir reply.

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which comes after our reply, obviously after we have a chance to address it.

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That's the first time this half duplex, full duplex argument was made.

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And the argument was, and was accepted by the board, that because Schmidt is full duplex, it wouldn't use collision detection.

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And therefore our combination fails.

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That was the finding of the board, but that wasn't our combination.

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Because we never argued to combine with collision detection, we argued specifically the teaching of inter-frame spacing at A5080.

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And that's all we argued.

[00:15:13] Speaker 02:
Thank you.

[00:15:14] Speaker 03:
Thank you, Your Honor.

[00:15:18] Speaker 01:
Mr. Wilson?

[00:15:22] Speaker 01:
Thank you, Your Honors.

[00:15:27] Speaker 01:
This appeal should be affirmed for three reasons.

[00:15:31] Speaker 01:
First, Sony argued its first theory of invalidity in the petition.

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The board rejected it.

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Sony doesn't challenge that finding on appeal.

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Number two.

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This appeal is not about that first theory.

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It's not even about the second theory raised for the first time in his reply brief.

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This appeal is only about the third theory raised after all normal briefing had been completed.

[00:15:54] Speaker 00:
Could you, when you say first theory, second theory, third theory, you want to give more detail on what you're referring to?

[00:15:59] Speaker 01:
Absolutely, Your Honor.

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The first theory is that

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Claim four was invalid based on a combination of Schmidt with the 1985 standards, based on the use of the CSMA-CD protocols.

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And I just heard counsel assert that that's not true.

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They just referred to that as the name.

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But I would point, Your Honors, to Joint Appendix 5080.

[00:16:33] Speaker 00:
Are you looking at the opinion of the board?

[00:16:37] Speaker 01:
I'm looking at their underlying briefing.

[00:16:39] Speaker 00:
It's A58?

[00:16:40] Speaker 01:
5080, I'm sorry.

[00:16:44] Speaker 04:
Yeah, that was the page that you're trying to cite.

[00:16:46] Speaker 04:
Thank you.

[00:16:50] Speaker 01:
Actually, I'm sorry.

[00:16:51] Speaker 01:
Let's look at page 5078.

[00:16:52] Speaker 01:
So council just said they only referred to CSMA CD as the name of the standard.

[00:17:03] Speaker 01:
But right there on page 5078 at the bottom, you'll see them quoting page 38 of the standard, which you will find at JA 1512, 1512.

[00:17:15] Speaker 01:
And if you look there, the portion that's being quoted,

[00:17:27] Speaker 01:
is from the bottom of the page, section 4.2.3.2.1, carrier deference.

[00:17:34] Speaker 01:
That's exactly what's quoted in their petition.

[00:17:38] Speaker 01:
So this was the original theory, CSMA CD as part of the 1985 standard.

[00:17:42] Speaker 00:
Can you repeat the page that you're referring to?

[00:17:44] Speaker 00:
I'm sorry.

[00:17:45] Speaker 00:
Yes, your honor.

[00:17:48] Speaker 01:
1512 is the standard that they're quoting.

[00:17:56] Speaker 02:
So you said in the patent owner response that that 1985 standard and the CSMA CD doesn't apply to Schmidt, right?

[00:18:13] Speaker 01:
What we said, Your Honor, was that the petitioner had failed to connect the two.

[00:18:19] Speaker 01:
They asserted Schmidt.

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used the 1985 standard.

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That was their obviousness theory.

[00:18:25] Speaker 01:
We asserted they have not proved that.

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There's no evidence in this petition.

[00:18:30] Speaker 02:
That's essentially what I said.

[00:18:32] Speaker 02:
You argued that Schmidt didn't use the 1985 standard and therefore their obviousness theory failed.

[00:18:41] Speaker 02:
Okay, so they come back in the reply

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And there is reference in the reply to the 1998 standard, correct?

[00:18:50] Speaker 02:
That's correct, Your Honor.

[00:18:52] Speaker 02:
But if I understand correctly, the only reference to the 1998 standard in the reply is to the half-duplex mode, correct?

[00:19:02] Speaker 02:
That's correct, Your Honor.

[00:19:04] Speaker 02:
And it's only in the sur-reply that they say even with full-duplex, the 1998 standard reveals this.

[00:19:11] Speaker 01:
That's correct, Your Honor.

[00:19:13] Speaker 01:
Yes, and that is first, second, and third theories right there.

[00:19:18] Speaker 01:
The fourth theory shows up in their opening brief on appeal here, which is inter-frame spacing completely divorced from all context of the specifications could be combined with Schmidt.

[00:19:31] Speaker 01:
That wasn't raised below in any of their three tries.

[00:19:34] Speaker 04:
Well, that's where they led us in the first instance to A5080 and that paragraph, right?

[00:19:42] Speaker 04:
I mean, would they say that they did preserve this just plucking out the interframe?

[00:19:49] Speaker 01:
That's correct, Your Honor.

[00:19:50] Speaker 01:
That's what they argued.

[00:19:51] Speaker 01:
That's obviously incorrect.

[00:19:53] Speaker 01:
And if you look at page, we can just start at 5078 and walk through this.

[00:20:04] Speaker 01:
The middle of the page in their petition 5078 says the IEEE 802.3 standard describes the carrier sense.

[00:20:12] Speaker 01:
Multiple access with collision detection method of the IEEE 802.3 protocol.

[00:20:19] Speaker 01:
It's not the name of the protocol.

[00:20:20] Speaker 01:
It is the method that they're referring to.

[00:20:23] Speaker 01:
Next paragraph.

[00:20:24] Speaker 01:
In the CSMA CD protocol described in the IEEE 802.3 standard, it goes on to describe that standard.

[00:20:31] Speaker 01:
It quotes from the carrier deference portion that I just quoted to your honor.

[00:20:38] Speaker 01:
It goes on for page after page, page 5079.

[00:20:43] Speaker 01:
full paragraph at the bottom, Schmidt expressly teaches that the SLIM system uses the Ethernet protocol and therefore uses Ethernet's CSMA CD procedure of waiting a specified time period prior to transmission.

[00:20:59] Speaker 01:
It's unequivocal.

[00:20:59] Speaker 01:
That was their theory, and it's the only theory that's asserted.

[00:21:04] Speaker 01:
When they summarize on page 5080 and say,

[00:21:08] Speaker 01:
a person of ordinary skill in the art would have been motivated to apply the IEEE 802.3 standards teaching of an inter-frame spacing.

[00:21:16] Speaker 01:
What are they referring to?

[00:21:17] Speaker 01:
What they've just described for three pages, the CSMA CD protocol.

[00:21:23] Speaker 01:
The board correctly found that this is the only theory asserted in the petition.

[00:21:27] Speaker 01:
The board correctly rejected it.

[00:21:29] Speaker 01:
And I'm happy to answer any other questions that your honors have, but if there are no other questions, I'll see you the rest of my time.

[00:21:38] Speaker 02:
Okay.

[00:21:38] Speaker 02:
Thank you, Mr. Wilson.

[00:21:39] Speaker 02:
Thank both counsel in case it's submitted.