[00:00:00] Speaker 02: The next case is the Livecore Inc. [00:00:01] Speaker 02: versus ITC, number 23-1509. [00:00:06] Speaker 02: Mr. Pack, let them settle the evening before the podium. [00:00:12] Speaker 05: Just a housekeeping issue. [00:00:14] Speaker 05: I would like to actually adjust my time allocation so that for the $4.99 issues, I like to reserve five minutes for the ITC, the issues for which we have the appeal. [00:00:25] Speaker 05: and then reserve 10 minutes of my time to deal with the arguments from the panel. [00:00:33] Speaker 02: I don't understand. [00:00:33] Speaker 02: I thought you all had 15 minutes. [00:00:36] Speaker 05: Yes, Your Honor. [00:00:37] Speaker 05: So I'm just dividing up the time. [00:00:39] Speaker 05: So when I go to talk about the issues that a live floor is appealing, I would like to use five minutes, about 15 minutes, and then reserve 10 minutes to deal with. [00:00:49] Speaker 05: Apple's arguments. [00:00:51] Speaker 03: Or I could... He wants to say ten minutes for a rebuttal? [00:00:54] Speaker 03: Yes, Your Honor. [00:00:55] Speaker 03: Oh, you just want to talk for five minutes. [00:00:56] Speaker 03: That's right, Your Honor. [00:00:59] Speaker 02: I thought you were serving two different... Better put, Your Honor. [00:01:02] Speaker 02: Okay. [00:01:02] Speaker 02: So, well, your clock... Okay. [00:01:05] Speaker 02: He's going to do five first, so it's going to turn yellow very, very quickly. [00:01:08] Speaker 04: Five and ten, not ten and five. [00:01:12] Speaker 02: Right. [00:01:12] Speaker 02: Five and ten instead of ten and five. [00:01:14] Speaker 02: We'll just watch the clock, because we have a lot of argument in this case, and we're going to keep to time. [00:01:18] Speaker 02: Thank you. [00:01:19] Speaker 02: When you're ready. [00:01:21] Speaker 05: May it please the Court, Your Honor. [00:01:23] Speaker 05: With respect to the issues that a live court is appealing on the ITC, our position is that we believe the Commission correctly found most issues to be accurately found based on the law. [00:01:37] Speaker 05: The two issues that I want to raise for Your Honor's consideration or argument relate to the 499 patent. [00:01:44] Speaker 05: The first is the finding with respect to [00:01:48] Speaker 05: patent eligibility of the claims of the 499 patent. [00:01:53] Speaker 05: And the second will be dealing with the infringement issues around the alert limitation. [00:01:58] Speaker 05: So on the first issue, Your Honor, I think it's important to understand that we have agreement between Apple and a live core on what the state of the art was in terms of what is the problem being solved. [00:02:11] Speaker 05: And the problem being solved is predicated on the medical science around arrhythmia. [00:02:17] Speaker 05: Arrhythmia is an episodic disease. [00:02:20] Speaker 05: So episodes come and go, and it comes and goes according to irregular patterns. [00:02:28] Speaker 05: It's very difficult to detect. [00:02:30] Speaker 05: It's also progressive, which means that as the disease progresses over time, the treatment options become smaller, and the success rates become lower as well. [00:02:40] Speaker 05: So the inventive solution developed by a life course solves this problem through a technological improvement. [00:02:47] Speaker 05: by combining a variety of sensors that are recited in the claims of the 499 claims that include on a smartwatch, and we're dealing with claim 16 that recites a smartwatch. [00:02:58] Speaker 05: In a smartwatch form factor, you have a heart rate sensor, an ECG sensor, and an activity sensor. [00:03:06] Speaker 05: So we're dealing with a unique combination of hardware elements on a smartwatch form factor. [00:03:12] Speaker 05: One thing important to note, Your Honor, because it may have been glossed over in Apple's presentation of the issues, [00:03:17] Speaker 05: It's very different to deal with a single-lead ECG measurement data than a conventional 12-lead where you have much more electrical information about the heart. [00:03:28] Speaker 05: And as the evidence showed in the ITC record, it took Apple many, many years to be able to integrate a single-lead ECG that could be reliably performing in a smartwatch form factor. [00:03:42] Speaker 05: But it's not just the hardware integration. [00:03:44] Speaker 05: It's also the software. [00:03:45] Speaker 05: that is needed to process a single lead ECG data in order to confirm the presence of arrhythmia at a level that would qualify, for example, for FDA approval. [00:03:57] Speaker 05: It was a very difficult problem to solve, as evidenced by the secondary considerations evidence in this case. [00:04:04] Speaker 05: This inventive solution here uses this unique combination of hardware, combined with software algorithms, including machine learning algorithms that are recited in claim 17, [00:04:16] Speaker 05: to do two things. [00:04:17] Speaker 05: One is to detect arrhythmia using PPG data that everybody agrees has incomplete information about the electrical signals that are running through the heart, because it's an optical signal that only tells you... You're almost done with your time on the 499. [00:04:32] Speaker 03: Let me ask you about the infringement contention on the alert. [00:04:38] Speaker 03: Is it your contention that the administrative law judge effectively construed alert broadly enough to cover all calls to action? [00:04:48] Speaker 03: And if so, where did that happen? [00:04:50] Speaker 05: Yes, Your Honor. [00:04:51] Speaker 05: So that happened. [00:04:52] Speaker 05: It is the Markman order that he issued. [00:04:55] Speaker 05: And the page? [00:04:57] Speaker 05: Let me find the page for Your Honor. [00:04:59] Speaker 05: So I believe that page is. [00:05:04] Speaker 05: I guess you can give it to me when you come back. [00:05:06] Speaker 03: But you need that broad of a construction. [00:05:08] Speaker 03: Isn't that correct? [00:05:10] Speaker 05: We do need that broad construction. [00:05:11] Speaker 05: And we believe that the judge actually used the broad construction in his claim construction aspects of his initial determination as well. [00:05:20] Speaker 05: The issue is... Yeah, I understand. [00:05:22] Speaker 03: Let me just get you to where my concern is. [00:05:25] Speaker 03: I tend to think you have a [00:05:28] Speaker 03: substantial evidence, probably at least for a DOE theory, but that's not what our issue is. [00:05:33] Speaker 03: Our issue is, how is there not substantial evidence for a finding of non-infringement? [00:05:39] Speaker 03: Help me understand how I could possibly find that. [00:05:42] Speaker 05: Yes. [00:05:42] Speaker 05: So with respect to non-infringement, you have literal. [00:05:45] Speaker 05: We argue both literal and DOE. [00:05:48] Speaker 05: And on the substantial question issue, [00:05:51] Speaker 05: What you will find is that in the Apple's own documents that they were telling the users, there is an important excerpt that is left out of the ALJ's findings. [00:06:03] Speaker 05: In the website telling the users how to use the Apple Watch, it says, one of the situations in which you are to take an ECG measurement on the device is when you receive the irregular rhythm notification. [00:06:16] Speaker 05: That is an instruction, which under the Tennis case law is evidence [00:06:21] Speaker 05: of how an alert, in this case, is to be used by Apple itself. [00:06:25] Speaker 05: So setting aside all the third-party documents, this is Apple's own document teaching users how to perform that act. [00:06:31] Speaker 05: And I think that was an important part of the ALJ's analysis that was left out. [00:06:35] Speaker 05: Thank you. [00:06:36] Speaker 05: Thank you. [00:06:38] Speaker 05: Your Honor, I'll get you the site. [00:06:43] Speaker 02: Ms. [00:06:43] Speaker 02: Bosworth. [00:06:48] Speaker 00: May it please the court, I'd like to very briefly address some inaccurate statements in the discussion of the 499 patent before I proceed to ask. [00:06:56] Speaker 02: Can I ask you a threshold question? [00:06:59] Speaker 00: Yes. [00:06:59] Speaker 02: We have the PTAB case coming up next. [00:07:01] Speaker 00: Yes, Your Honor. [00:07:02] Speaker 02: What's the effect of that case if we affirm there on this case? [00:07:08] Speaker 00: If you affirm in the PTAB appeal, [00:07:11] Speaker 00: Then AliveCorps no longer has a valid patent on which it could pursue a Section 337 complaint. [00:07:17] Speaker 00: The right posture, as this court has said, for example, in the TransOVA case from 2018, is to vacate the ITC's ruling. [00:07:28] Speaker 00: That is the final decision as well as the remedial orders and remand to the agency with instructions that the complaint be dismissed and the investigation be terminated. [00:07:39] Speaker 00: Turning back to the 499, just on 101, the claims of the 499 patent do not contain most of what a life course council talked about. [00:07:48] Speaker 00: They specify only that the ECG sensor is on the mobile computing device, which proclaims 16 as a smartwatch. [00:07:55] Speaker 00: They do not specify where or what kind of heart rate or activity sensor is involved in the system. [00:08:01] Speaker 00: They also do not use the words confirm or detect, nor do they describe that process. [00:08:05] Speaker 00: They are much broader. [00:08:06] Speaker 00: The argument about the single-lead ECG that is not a requirement of these claims, that's also an argument that will lie for waived if the Commission agrees, and its evidence does not support that in any event. [00:08:18] Speaker 04: The claim simply refers to a smartwatch. [00:08:22] Speaker 00: Claim 16 refers to the mobile computing device being a smartwatch, correct, Your Honor. [00:08:28] Speaker 00: And as to the infringement issue, I want to correct a few things. [00:08:35] Speaker 00: ALJ did not find that the claim was as broad as the Life Course Council said. [00:08:41] Speaker 00: The site is Appendix 323. [00:08:44] Speaker 00: The only issue at Markman that was resolved here was whether the alert has to be a literal message. [00:08:49] Speaker 00: The ALJ said it doesn't. [00:08:51] Speaker 00: It does not exclude a non-linguistic method of alerting, but the question for infringement purposes is what is the content of that alert. [00:09:00] Speaker 00: Reference to the statements on Apple's website are both irrelevant. [00:09:04] Speaker 00: This is about what happens on the watch. [00:09:06] Speaker 00: It's not, for example, an inducement case. [00:09:09] Speaker 00: They're also wrong. [00:09:10] Speaker 00: Nowhere does Apple state you are to take an ECG when you get an IRN alert. [00:09:14] Speaker 00: What it says is you can take an ECG at any time, including when you receive an IRN alert. [00:09:21] Speaker 00: I'd like to turn with the Court's permission to the two fundamental flaws in the Commission's decision that Apple contends require a reversal as to all three asserted patents. [00:09:34] Speaker 00: First, the legal error in finding the domestic industry requirement met based on expenses that do not pertain to the only domestic industry product, that's the carbon ban. [00:09:44] Speaker 00: And second, the legal error in rejecting Apple's strong prima facie obviousness showing [00:09:50] Speaker 00: on separate prior art from the art on which the PTAB relied to invalidate these same patents, based on evidence of secondary considerations that even the ALJ acknowledged [00:10:00] Speaker 00: was not particularly strong. [00:10:02] Speaker 00: Starting with domestic industry, the Commission itself recognized a fundamental flaw in the ALJ's analysis. [00:10:09] Speaker 00: At Appendix 12, Note 16, it clarified that the requirement that investments be with respect to the articles protected by the patent applies with respect to subsections A, B, and C. [00:10:23] Speaker 00: The Commission, however, failed to appreciate the consequences of that error in the ALJ's analysis, namely, as the ALJ had correctly recognized under subparagraphs A and B, any expenditures on the prototype products [00:10:38] Speaker 00: rather than the domestic industry article, the Cardia Band, should have been excluded. [00:10:42] Speaker 00: That's at Appendix 264 to 265. [00:10:45] Speaker 00: Yet the ALJ included those same expenses under subparagraph C with no explanation, apparently overlooking the fact that the article's requirement applies to all three subparagraphs, as the Commission clarified and as this Court has held. [00:11:00] Speaker 00: The commission did not offer an explanation for how it was nonetheless counting those expenditures in the prototype products as somehow supporting an existing domestic industry. [00:11:14] Speaker 03: Wasn't there some finding about sort of residual benefits to the users of the now discontinued product? [00:11:21] Speaker 00: There was a mention of some purported benefit. [00:11:24] Speaker 00: There's two problems with that, Your Honor. [00:11:27] Speaker 00: One is a legal problem. [00:11:28] Speaker 00: There's no authority for finding an existing domestic industry on that basis. [00:11:32] Speaker 03: Have you ever said you can't do that? [00:11:34] Speaker 00: I don't believe the court has ever confronted this kind of situation, but if you think about it, we're talking about an existing domestic industry. [00:11:42] Speaker 00: And there's also a way to show a domestic industry that it's being established, which AliveCore tried to do through these prototype products, and the commission rejected that. [00:11:52] Speaker 00: It said AliveCore hadn't shown that it had a significant likelihood of actually developing an industry in those products, yet somehow it said the same spending that it wasn't willing to rely on on its own merit counted because it somehow benefited [00:12:06] Speaker 00: Cardioband users. [00:12:07] Speaker 00: We don't think there's any legal authority for that. [00:12:09] Speaker 00: Certainly it's not in the Hyosun case, for example, that the Commission relies on where you had a product that was still being deployed until... You said there was a second problem. [00:12:19] Speaker 00: Yes. [00:12:19] Speaker 00: Yes, Your Honor. [00:12:20] Speaker 00: I'll get to the evidentiary problem. [00:12:22] Speaker 00: The second problem is that there's simply no support for such a finding in the record. [00:12:28] Speaker 00: A live Quorum of Commission talk on appeal about software updates [00:12:31] Speaker 00: That's not in the commission's analysis. [00:12:34] Speaker 00: Again, all the commission said on this product's requirement was that it benefits CardioBand users. [00:12:39] Speaker 00: It didn't explain how. [00:12:41] Speaker 00: And I'd note that in particular, AliveCore did try to rely on spending on software development. [00:12:46] Speaker 00: The ALJ rejected that evidence. [00:12:48] Speaker 00: This is at Appendix 271. [00:12:50] Speaker 00: It rejected that evidence as unreliable. [00:12:55] Speaker 00: economic domestic industry there's also a separate problem with the lack of nexus to the patents as well as a lack of showing of significance but I'm mindful of the time and with court's permission I turn to the obviousness issue. [00:13:08] Speaker 03: So could you tell us what is our standard of review of the balancing of the secondary considerations evidence against the strength the prima facie case? [00:13:19] Speaker 03: Do we do that balance de novo? [00:13:21] Speaker 00: I believe so, Your Honor. [00:13:23] Speaker 00: Yes, the finding as to any given secondary consideration topic copying or praise would be for substantial evidence, but the weighing of the Graham factors is a question of law. [00:13:32] Speaker 00: And so that's why here, too, we think there's a legal error as well. [00:13:35] Speaker 03: So if the commission said copying evidence is strong, for example, we have to review that for substantial evidence, but then the weighing of that strong secondary evidence of non-obviousness [00:13:49] Speaker 03: against a strong prima facie case, that's for us to do de novo. [00:13:53] Speaker 00: That's correct. [00:13:54] Speaker 00: I want to clarify here the commission did not say that the evidence of copying was strong. [00:13:59] Speaker 00: The commission did not say that the overall evidence of secondary considerations was strong. [00:14:04] Speaker 00: The ALJ at one point characterized it that way, but that included the commercial success evidence, which the Commission rightly rejected as weak. [00:14:11] Speaker 00: Even as to the copying and the industry praise, although there is that stray characterization of it as strong, elsewhere the ALJ describes the evidence of alleged copying as not exactly a smoking gun and circumstantial [00:14:25] Speaker 00: evidence of copying and admits that the industry preys evidence is not unqualified and also not totally directed to the actual patented technology. [00:14:35] Speaker 00: Again, the first error here is the legal one in allowing tepid evidence of secondary considerations at best to overcome an undeniably strong prima facie case of obviousness. [00:14:48] Speaker 00: This court said, for example, in Wires, that secondary considerations [00:14:51] Speaker 00: should never overcome a strong prima facie showing, and it has done so only once in the Transocean case. [00:14:57] Speaker 00: The court recognized that that was an outlier case and you had [00:15:01] Speaker 00: seven different categories of secondary considerations. [00:15:04] Speaker 00: Jury findings on each specific one at this court were determined were supported by substantial evidence. [00:15:10] Speaker 00: That's certainly not this case. [00:15:12] Speaker 00: But even if the court were to look at this from a substantial evidence perspective, there is no evidence, certainly not of copying, and no evidence of praise with nexus to the patented technology. [00:15:28] Speaker 00: Here too, a live court on the commission on appeal [00:15:31] Speaker 00: make an argument that's very different from what the ALJ actually said. [00:15:34] Speaker 00: They focus on things like whether Apple had access to a live force technology, the fact that there were meetings, the fact that there were these FOIA requests where, of course, all confidential information was redacted, according to FOIA. [00:15:46] Speaker 00: But if you look at what the ALJ actually said, he said all of that was not especially probative. [00:15:51] Speaker 00: That's in Appendix 202. [00:15:52] Speaker 00: Instead, what he relied on was a set of evidence, also in Appendix 202, the next paragraph. [00:15:59] Speaker 00: like to briefly walk the court through that because we don't believe it constitutes any evidence of copying. [00:16:04] Speaker 00: It's certainly not substantial evidence. [00:16:06] Speaker 00: One, the fact that by 2014, Apple had shelved an attempt to put an ECG sensor on the very first Apple Watch. [00:16:13] Speaker 00: I don't know how that chose to happen. [00:16:14] Speaker 03: Are you saying it's not even a reasonable inference to put all that evidence together and say Apple copied? [00:16:20] Speaker 00: Not all of these. [00:16:21] Speaker 00: You have emails that relate to a live course public website, again, before the cardio band existed. [00:16:28] Speaker 00: You have a 2016 presentation talking about a different AliveCore product and saying that's a reference for an ECG feasibility study. [00:16:36] Speaker 00: CardiaBand was not released until November 2017. [00:16:40] Speaker 00: You have earlier, the ALJ relied on his copying evidence on email exchange from a researcher who had reached out to Apple and asked to donate watches for a study with CardiaBand. [00:16:51] Speaker 00: I don't know how that shows copying. [00:16:53] Speaker 00: And certainly not Apple's FDA submissions for its ECG app. [00:16:56] Speaker 00: in which the agency asks applicants to identify comparable products and Apple said that CardiaVan was the most similar product on the market. [00:17:04] Speaker 00: None of it shows copying. [00:17:05] Speaker 00: I'll reserve my time. [00:17:07] Speaker 06: Thank you. [00:17:19] Speaker 01: Mr. Hughes? [00:17:21] Speaker 01: Yes, Hughes. [00:17:22] Speaker 01: Good morning and may it please the court. [00:17:24] Speaker 01: I would like to begin with where my friend left off. [00:17:29] Speaker 01: This is with the invalidity on copying and industry praise. [00:17:34] Speaker 01: The evidence, the commission relies on... Let me ask you the same question I asked her. [00:17:39] Speaker 02: If we affirm the PTAP's finding of invalidity, does the commission agree that we vacate and that you have to dismiss the investigation? [00:17:49] Speaker 01: Right, we do agree. [00:17:50] Speaker 01: I mean, in Broadcom, something similar happened. [00:17:53] Speaker 01: What the court did was they claimed that PTAB found invalid that the court affirmed. [00:17:59] Speaker 01: It found that as moot. [00:18:01] Speaker 01: But that is because the commission found no violation. [00:18:05] Speaker 01: So with respect to a life course appeal, that part of it becomes moot. [00:18:10] Speaker 01: With respect to Apple's appeal, that has to be remanded to the commission to vacate the orders. [00:18:16] Speaker 01: The orders are suspended, so all the commission will do will be to rescind them. [00:18:21] Speaker 01: So now coming back to evidence of industry praise and copying, the evidence the commission relied on was very strong evidence. [00:18:28] Speaker 01: With respect to industry praise, we have cardiologists. [00:18:32] Speaker 01: Alivecore was the first company to be able to combine this ECG and the PPG in the smartwatch. [00:18:40] Speaker 01: When Alivecore released its product in 2017, the cardiologists called it a paradigm shift in cardiac care. [00:18:47] Speaker 01: Another cardiologist called it [00:18:49] Speaker 01: a giant leap in personalized healthcare. [00:18:52] Speaker 01: This is praise for the product. [00:18:55] Speaker 01: A product that didn't exist came into existence because of a life course ingenuity. [00:19:01] Speaker 01: There's an article in Cardiology, a peer review article in Cardiology Today, which also praised the KBS. [00:19:08] Speaker 01: So the evidence that the commission relied on and industry praise was especially strong. [00:19:13] Speaker 01: Similarly, the evidence that the commission relied on for copying is as strong. [00:19:18] Speaker 01: Now, if we step back, this is what the story is. [00:19:20] Speaker 01: In 2013, Apple tried to do the same thing, tried to implement the ECG on its Apple Watches, the Apple Series 1 to 3. [00:19:29] Speaker 01: Apple wasn't able to do that. [00:19:30] Speaker 01: So Apple shelved the project. [00:19:33] Speaker 01: Now, we come back to 2018. [00:19:35] Speaker 01: All of a sudden, Apple has been able to do that on the Apple Series 4 and onwards. [00:19:40] Speaker 01: Now, what happened in between was, the evidence shows, was Apple meeting with a live course engineers [00:19:47] Speaker 01: inventors numerous times, and also obtaining its FDA's approval through a FOIA request. [00:19:55] Speaker 01: So between Apple shelving its project in 2013 and all of a sudden being able to develop a project in 2018 or releasing a product, that is what happened in between. [00:20:07] Speaker 03: Now, the FOIA request could not have yielded any confidential information, could it? [00:20:12] Speaker 01: No, it couldn't. [00:20:13] Speaker 01: I mean, a commission isn't saying the FOIA request was confidential information. [00:20:17] Speaker 01: What the Commission is saying is that with FOIA requests, in combination with all the meetings that are live cool, [00:20:23] Speaker 01: that Apple actually requested from a live course engineers shows what Apple was trying to do in the interim. [00:20:29] Speaker 03: Did the commission actually make a finding that the secondary considerations evidence was strong and either whatever they found, do you agree with Apple's counsel that we review for substantial evidence the findings as to the strength of the secondary consideration evidence, but we then do our own weighing de novo? [00:20:51] Speaker 01: I would agree with that, because obviousness is a question of law, based on underlying facts. [00:20:57] Speaker 01: So the court would have to review the commission's factual findings for substantial evidence, and as we submit here, the evidence is actually quite strong, such that the weigh-in, because the fourth ground factor [00:21:11] Speaker 01: is as important as all the other three, which is what this court has said. [00:21:14] Speaker 03: But the weighing itself is not a factual finding. [00:21:18] Speaker 01: That's correct. [00:21:19] Speaker 01: That would be illegal. [00:21:20] Speaker 01: That would be a legal question. [00:21:22] Speaker 01: But then we also remind the court that I don't think there's any case where this court has reversed the lower tribunal's finding that the secondary considerations overcame the prima facie case showing. [00:21:34] Speaker 01: There's actually more than one case. [00:21:36] Speaker 01: My friend says there's only one case, the Transocean. [00:21:39] Speaker 01: There's also the Apple case. [00:21:40] Speaker 01: where this court affirmed the lower court's finding that the secondary considerations overcame the showing of prima facie obviousness. [00:21:49] Speaker 01: And I also direct the court to the Volvo Penta case. [00:21:53] Speaker 01: In the Volvo Penta, this court reversed the board's decision specifically because the board did not consider the secondary considerations. [00:22:05] Speaker 01: And the secondary consideration the court found quite telling was that of copying. [00:22:10] Speaker 01: So we take that. [00:22:10] Speaker 01: And also, in global parents, the board and this court found strong evidence of prima facie showing. [00:22:18] Speaker 01: But the court still reversed and remanded for the board to consider secondary considerations. [00:22:24] Speaker 01: All this will show that a strong showing of secondary considerations can overcome a showing of prima facie case of obviousness. [00:22:33] Speaker 01: So the commission was correct in making that finding. [00:22:36] Speaker 01: I also want to correct one thing my friend from Apple said. [00:22:39] Speaker 01: What she said was that the commission found the evidence to be weak. [00:22:42] Speaker 01: That is not correct. [00:22:43] Speaker 01: The commission found the evidence strong. [00:22:45] Speaker 01: The only evidence the commission found weak was that of commercial success. [00:22:49] Speaker 01: And the commission didn't credit commercial success in the commission opinion. [00:22:55] Speaker 01: Commission relied exclusively on copying, which this court has said can be a strong indication of non-obviousness. [00:23:02] Speaker 01: And industry praise from Apple itself is what the commission relied on to make its finding. [00:23:10] Speaker 01: Now turning to domestic industry. [00:23:14] Speaker 01: The commission's finding in domestic industry was lawful and also consistent with the facts in this case. [00:23:23] Speaker 01: For the commission, the domestic industry product was a live-course KBS, and that is what embodies the patented technology. [00:23:32] Speaker 01: The commission found the domestic industry under prong C. Under prong C, what the commission looks for [00:23:38] Speaker 01: Once the Commission has determined the existence of the article, the Commission looks for exploitation in that patented technology. [00:23:46] Speaker 01: In so doing, the Commission found that the upgraded products, these are what they call upgrades of future products to the KBS, investments in those also were correctly credited to the KBS itself. [00:23:58] Speaker 01: Apple's contention is that the commission erred in that regard. [00:24:02] Speaker 01: But this court preceded, of course, the commission. [00:24:05] Speaker 01: Specifically, interdigital, where the court explained the meaning of Section 337, explained the meaning of proxy. [00:24:13] Speaker 01: And what the court said was, for a proxy analysis, the investment has to be directed to the exploitation of the patent. [00:24:22] Speaker 01: And in this case, all the investment the commission counted, accredited, [00:24:27] Speaker 01: were specifically directed to exploitation of the same patented technology. [00:24:32] Speaker 01: Apple also contends that there was no nexus finding. [00:24:36] Speaker 01: The nexus finding in this case is as clear as any case one would find. [00:24:41] Speaker 01: In this case, the KBS is the embodiment of the claims. [00:24:47] Speaker 01: There's no daylight between the claims and the KBS. [00:24:52] Speaker 01: In such instances, the Commission always infers the nexus requirements. [00:24:57] Speaker 01: This is in the case where the patented technology is a small part of the articles of the domestic industry article. [00:25:05] Speaker 01: In this case, they are one and the same. [00:25:08] Speaker 01: So the commission's finding was lawful and also supported by the fact that the commission relied upon. [00:25:16] Speaker 03: Can you help me on the substantiality of the investments or the expenditures? [00:25:22] Speaker 03: It seemed that the commission compared the amount of domestic expenditures to the amount of foreign expenditures. [00:25:28] Speaker 03: And it was just that ratio, which was heavily towards domestic expenditures, that was seemingly per se substantial to the commission. [00:25:38] Speaker 03: Is that a fair interpretation of what the commission said? [00:25:41] Speaker 03: And if so, help me understand the logic. [00:25:43] Speaker 01: Right, what the commission does is, so once the commission has the numbers, the commission then determines whether it's significant or substantial in this instance, whether it's substantial. [00:25:53] Speaker 01: And what this court said in LELO is that the commission has to be benchmarking numbers. [00:25:58] Speaker 01: So the commission always undertakes what is called a contextual analysis to determine whether the domestic expenditure is substantial. [00:26:07] Speaker 01: And what the Commission did here, which Commission has done numerous investigations, was to compare the domestic R&D spending by a life pool to its foreign R&D spending. [00:26:21] Speaker 01: So that is a comparison the Commission performed to determine substantiality. [00:26:26] Speaker 03: But Apple says under that reasoning, if it was a dollar invested in the U.S. [00:26:31] Speaker 03: and 10 cents invested around the world, the commission would have to say that's substantial and none of us would think that was substantial. [00:26:39] Speaker 03: Is that a fair criticism? [00:26:41] Speaker 01: It's not fair. [00:26:42] Speaker 01: It's not fair. [00:26:43] Speaker 01: That's going too far. [00:26:46] Speaker 01: Because the numbers also mean something, right? [00:26:49] Speaker 01: If the commission looks at the numbers and the numbers don't look substantial, [00:26:53] Speaker 01: The commission may not even get to trying to determine a contextual analysis. [00:26:58] Speaker 01: In this case, the number was significant. [00:27:01] Speaker 01: But that doesn't end the inquiry for the commission. [00:27:05] Speaker 01: The commission always takes the next step to determine, is this number significant or substantial in the context of this industry, of this marketplace? [00:27:16] Speaker 01: So that is what the commission always does. [00:27:19] Speaker 01: So the commission always conducts a two-step analysis, takes a look at the numbers, [00:27:22] Speaker 01: and then determines whether this is significant or substantial. [00:27:26] Speaker 01: So Apple's analogy is it's far-fetched. [00:27:31] Speaker 01: So turning to Alivecore's appeal, I mean the appeal is alert. [00:27:36] Speaker 01: I know counsel for Alivecore mentioned that the commission broadly construed the alert limitation. [00:27:42] Speaker 01: that is not entirely accurate. [00:27:44] Speaker 01: All the commission said was alert is not limited to a message. [00:27:48] Speaker 01: That's all the ALG said. [00:27:50] Speaker 01: The ALG didn't say that it's open to anything at all. [00:27:53] Speaker 01: What ALG specifically stated was the statement has to instruct or direct a user to take an ECG. [00:28:04] Speaker 01: What happens here with the Apple Watch is the Apple Watches don't direct anyone to take an ECG. [00:28:09] Speaker 01: They simply direct a user to talk to your doctor. [00:28:12] Speaker 01: And the ALD found in the commission agreed that a statement, talk to your doctor, isn't the same as take an ECG, either literally or under the doctrine of equivalent. [00:28:24] Speaker 01: With respect to the section 101, also ALIFE co's brief, ALIFE co mentions that, council mentions that about a single electrode, that doesn't exist in the claims. [00:28:35] Speaker 01: It simply doesn't exist. [00:28:37] Speaker 01: All the claims are directed broadly to a heart rate sensor. [00:28:42] Speaker 01: It's just at a very high level of generality is how the claims are drafted. [00:28:47] Speaker 01: The claims in the 499 are very unlike the claims in the 731 or the 941 patent. [00:28:53] Speaker 01: Those claims specifically recite the arrangement of the PPG to the ECG center. [00:28:58] Speaker 01: They recite the two lead electrode. [00:29:01] Speaker 01: So those claims the Commission found pass master under 101, whereas the 499 patent, the claims are at a very high level of generality. [00:29:11] Speaker 01: So the commission found those invalid under 101. [00:29:17] Speaker 01: The court doesn't have any questions from me, also. [00:29:19] Speaker 01: Thank you. [00:29:20] Speaker 01: Thank you very much. [00:29:26] Speaker 02: Mr. Pack, you have a little under 10 minutes left. [00:29:29] Speaker 02: Thank you, Your Honor. [00:29:39] Speaker 05: So you are [00:29:40] Speaker 05: Your Honors, I'd like to begin by just noting the claim construction order at Appendix 222. [00:29:48] Speaker 05: And there, Judge Elliott wrote, as for alert and alerting, the plain and ordinary meeting is similarly broad and includes notify, instruct, indicate, generate, and send notification signals. [00:30:04] Speaker 05: In fact, one purpose of the disclosed invention [00:30:09] Speaker 05: is to minimize false alarms, suggesting that an alarm, i.e. [00:30:13] Speaker 05: an audible tone, may qualify as an alert. [00:30:18] Speaker 05: So we do contend, Your Honor, that the legal definition given to alert as based on the various embodiments constitute not only non-textual messages, but even audible tones such as alerts. [00:30:35] Speaker 05: And the reason why that's significant, Your Honor, is because in tennis, [00:30:39] Speaker 05: What we have is Federal Circuit precedent saying when you're looking at the question is what is the intended function of something, is there an alert mechanism, you can also look at instruction manuals. [00:30:54] Speaker 05: Because obviously if you have a noise coming from a device, that alone doesn't signify to the user what to do in the case that you receive an audible alert. [00:31:06] Speaker 05: It's not just the text message on the device, but we have a website. [00:31:10] Speaker 05: And I'll note, Your Honor, to see. [00:31:13] Speaker 05: This is an appendix. [00:31:16] Speaker 05: I believe it's 13904. [00:31:20] Speaker 05: And this is the website that we cited, where this is not about a future roadmap. [00:31:25] Speaker 05: This is about Apple telling users what to do with the Apple Watch and the Cardio app. [00:31:30] Speaker 05: And here we have taken ECG with a picture of the app [00:31:35] Speaker 05: and the Apple Watch. [00:31:37] Speaker 05: And it says, you can take an ECG at any time. [00:31:41] Speaker 05: And it goes on to say, when you receive an irregular rhythm notification. [00:31:46] Speaker 05: So we believe that the combination of the alert showing up on the screen, combined with the instructions that are being taught under tennis, shows that there was literal as well as DOE infringement. [00:31:59] Speaker 03: And at the page of that order, did you say it's 222, or did I miss a number? [00:32:04] Speaker 05: Your Honor, I apologize. [00:32:07] Speaker 05: 322. [00:32:08] Speaker 05: 322. [00:32:09] Speaker 05: So the order is 322, and the website is 13904. [00:32:14] Speaker 05: You can move on. [00:32:15] Speaker 05: Thank you. [00:32:15] Speaker 05: All right. [00:32:17] Speaker 05: So now I'd like to turn to some of the things that we heard from Apple's case. [00:32:23] Speaker 05: There is a lot of this information that is confidential to Apple. [00:32:26] Speaker 05: And I won't go into the specifics. [00:32:28] Speaker 05: Just to note, Appendix 202 is where the AOJ summarizes [00:32:34] Speaker 05: the voluminous evidence of Apple engaging in a course of conduct over many years. [00:32:40] Speaker 05: And as counsel for the commission noted, Apple had tried to build an ECG device and then ultimately shelved that device for many years until a live core came to market with the cardio band product that received the significant industry praise that was talked about. [00:32:57] Speaker 05: And if you look at some of the confidential records from Apple's own files, [00:33:03] Speaker 05: Appendix 202. [00:33:05] Speaker 05: This is specifically analyzing the cardio band ECG functionality, using it as a starting point for the design process of Apple's watch product. [00:33:20] Speaker 05: So this is not simply people within Apple saying this is a good idea. [00:33:26] Speaker 05: I mean, you look at the evidence in totality, and this was a starting point, an input process, [00:33:32] Speaker 05: not only for the FDA approval where they use it as a predicate, but from the very beginning that this was the cardio band product, the domestic industry product, was the genesis of the revamped efforts to design an ECG sensor and software into the Apple Watch. [00:33:50] Speaker 04: We think this is... I realize that there's quite a bit of evidence that might infer some sort of copying. [00:33:58] Speaker 04: Is there any direct evidence of copying? [00:34:01] Speaker 05: We believe all this in totality is direct evidence, as well as circumstantial evidence. [00:34:06] Speaker 05: And obviously, in many cases involving copying, you don't get direct evidence by the copy and saying, I copied XYZ. [00:34:14] Speaker 04: What we have here is... Do you have any evidence that is actually comparing software to software or structure to structure? [00:34:23] Speaker 05: Yes. [00:34:23] Speaker 05: And that's on Appendix 202, Your Honor. [00:34:25] Speaker 05: This is the confidential portion. [00:34:28] Speaker 05: And I'll just read some of the non- [00:34:31] Speaker 05: confidential aspects. [00:34:32] Speaker 05: Multiple internal Apple presentations and similar evidence do provide probative evidence of copying. [00:34:39] Speaker 05: And you can see there is a citation to a March 2016 Apple presentation characterized as, and you can see specifically, mentions of Apple looking at the technology was integrated into various products from a live quarter. [00:35:01] Speaker 05: In 2017, shortly before KBS received FDA clearance, Apple presentation described its method of mitigating problems with the Apple Watch as, you can see the quote. [00:35:13] Speaker 05: And so one thing I want to make clear here, too, is the invention includes both, and I'm not just talking about the 499 now, including all three patents, the invention includes not only detecting using PPG, [00:35:28] Speaker 05: but confirming using an onboard ECG. [00:35:32] Speaker 05: And so one thing that you haven't heard from Apple in its briefing or its oral presentation is that they did not copy the ECG functionality. [00:35:40] Speaker 05: What they say is, we didn't copy Smart Rhythm, which is the PPG functionality. [00:35:44] Speaker 05: But all of this evidence shows that they were using the Alive 4 not as a post-release benchmarking exercise, but as the beginning of their production and design exercise [00:35:57] Speaker 05: with respect to the ECG confirmation. [00:36:00] Speaker 05: And the reasons I talked about before, we're talking a smartwatch form factor with limited ability to integrate electrodes into that watch. [00:36:10] Speaker 05: And the information that's coming out of those leads is then processed through machine learning and other proprietary and inventive technologies that are built to get reliable confirmation of the arrhythmia. [00:36:24] Speaker 05: So all of this evidence is here. [00:36:25] Speaker 05: the copying, and I think Apple conceded that with respect to the strength as well as the fact of copying and industry praise is subject to substantial evidence review. [00:36:38] Speaker 05: And counsel for the commission spoke on behalf of the commission, and the commission here is the fact finder. [00:36:44] Speaker 05: The ALJ is a [00:36:46] Speaker 05: a judge who receives evidence and makes recommendations in the form of the initial decision. [00:36:50] Speaker 03: Do you agree with your friends on the other side that our standard of review of the weighing of that strong secondary evidence against the strong prima facie case is de novo? [00:37:00] Speaker 05: We do agree with that, Your Honor. [00:37:01] Speaker 05: So why not? [00:37:02] Speaker 03: So just quickly give me a sense of how it's a strong prima facie case. [00:37:07] Speaker 03: How could this secondary considerations, even if it's as strong as you say, how could it really outweigh that? [00:37:13] Speaker 05: Well, first of all, we believe that [00:37:16] Speaker 05: For many of the claims in the 731 patent and in the 941 patent, there was no prima facie case shown at all by the ALJA. [00:37:25] Speaker 05: So for those claims, we're not even reaching this conclusion. [00:37:29] Speaker 05: And that's definitely subject to substantial evidence review. [00:37:34] Speaker 05: And the judge, as well as the commission, found that those claims are not obvious based on the references that were cited. [00:37:40] Speaker 05: But with respect to the remaining claims, Your Honor, we have [00:37:46] Speaker 05: And you can look at the analysis done by the judge with respect to the obviousness. [00:37:53] Speaker 05: Many of those were, we believe in our opinion, taking references that suggested certain things and deriving an inference. [00:38:03] Speaker 05: And we had counter testimony on that point from the expert. [00:38:07] Speaker 05: We don't believe it was a strong showing of prima facie case. [00:38:11] Speaker 05: But even if it were, you have the whole purpose of having the fourth factor [00:38:17] Speaker 05: is to avoid hindsight. [00:38:19] Speaker 05: And you have all this other evidence that we just talked about, where Apple itself failed to do exactly what AliveCore achieved for many years, and then resorted to copying and ultimately had confidential internal praise of the products that embodied the patents. [00:38:37] Speaker 05: All of that, we believe, shows that what Apple is doing here is trying to use hindsight to piece together disparate pieces of evidence [00:38:47] Speaker 05: to imply that these claims are obvious. [00:38:50] Speaker 05: And against that backdrop, when you have such compelling evidence of industry praise and copying, as counsel for the commission noted, we think that when your honors look at the weighing, we think this is a particularly strong case of not just industry praise in general, but industry praise by Apple as the basis for development of the competing product that infringes. [00:39:11] Speaker 05: And so those are the reasons why, your honor, that we think this is [00:39:15] Speaker 05: Obviously, in your discretion, but we think this is a case where the commission's relation is different. [00:39:22] Speaker 05: Thank you. [00:39:22] Speaker 02: It looks like you ran through most of your time. [00:39:35] Speaker 02: I'll give you your... My clock says 18. [00:39:39] Speaker 00: The clock on the opening just had 10 minutes, and I thought that is what I had run through. [00:39:43] Speaker 02: Oh, did it? [00:39:45] Speaker 02: Okay, then give her five back. [00:39:49] Speaker 00: Thank you, Your Honor, and I apologize if that was my error. [00:39:53] Speaker 00: I recognize we're focused on Apple's appeal issue, so I won't address the 499, but I would urge the Court to look at what Appendix 13904 actually says. [00:40:00] Speaker 00: It is not what a live course counsel said. [00:40:02] Speaker 00: Turning back to our appeal issues and just very briefly, [00:40:07] Speaker 00: on the domestic industry. [00:40:08] Speaker 00: The commission referred to the interdigital opinion at page 1298 of that opinion. [00:40:14] Speaker 00: This is the court's rehearing opinion from 2013. [00:40:16] Speaker 00: This court acknowledged that the activities referred to in subparagraph C must also exist with respect to articles protected by the patent that is a holding [00:40:26] Speaker 00: that there are two nexus requirements for subparagraph C, a products nexus and a patent nexus. [00:40:31] Speaker 00: That's exactly what the commission said here at appendix 12, note 16. [00:40:35] Speaker 00: I want to correct the idea that the prototype products are upgraded products. [00:40:40] Speaker 00: They are different products. [00:40:42] Speaker 00: The cardio band was a watch band with electrodes in it. [00:40:45] Speaker 00: The prototype products are smartwatches with electrodes on the watch, not the band. [00:40:49] Speaker 00: And finally, I did not hear the commission cite any legal basis for crediting spending on future [00:40:57] Speaker 00: not yet existing products to somehow support a domestic industry in a different discontinued product. [00:41:03] Speaker 00: I'd like to turn to obviousness now. [00:41:06] Speaker 00: As to the first question, we have agreement that the question of weighing the secondary considerations against the prima facie case is a legal question for this. [00:41:15] Speaker 02: We said, though, that copying is a particularly strong secondary consideration. [00:41:20] Speaker 02: And if we have strong evidence of copying, [00:41:23] Speaker 02: Isn't that enough, even on a de novo review, to outweigh the premium fashion case? [00:41:28] Speaker 00: I don't think the court has said that, Your Honor. [00:41:32] Speaker 00: The court has said, for example, in the Volvo Penta case, that copying can be strong evidence there. [00:41:36] Speaker 00: It was remanded to the board for a better explanation of why the court had not relied on the copying evidence there. [00:41:42] Speaker 00: I think one thing to focus on in Volvo Penta, too, is that the board had recognized and this court agreed that there is a spectrum between comparison [00:41:50] Speaker 00: which is not suspect, and copying, which is there the board has specifically found that the evidence was more akin to copying than comparison. [00:42:01] Speaker 00: Here at most, what we have is comparison. [00:42:06] Speaker 02: Hypothetically, though, if we have a situation where there may be a strong cream infection case, but a competitor like Apple has been trying to do something and couldn't do it, and [00:42:18] Speaker 02: there's evidence of actual copying of the product, wouldn't that be fairly persuasive evidence that it wasn't obvious if Apple had been trying, or if the company, I don't want to make it too personal, if the company had been trying to produce the same product and couldn't do it and resorted to looking at its competitor's product? [00:42:37] Speaker 02: Why wouldn't, in that hypothetical, that be really hard to get over even under a de novo review? [00:42:43] Speaker 00: So a couple answers, Your Honor. [00:42:46] Speaker 00: First of all, this Court has said as a matter of law that when you have such a strong chromofacial case, again, the point is to avoid hindsight, as the live course counsel agreed. [00:42:56] Speaker 00: Here we have nearly everything disclosed in one single reference, the Amon reference, which is this watch from 2004 that had a PPG and ECG sensor and did virtually everything the claims described. [00:43:06] Speaker 00: There's no risk, or there's substantially less risk of hindsight bias there. [00:43:11] Speaker 00: As a live court characterized it, pulling from disparate pieces of prior art, nearly everything is there. [00:43:17] Speaker 00: But regardless, I do want to make clear for the court that [00:43:22] Speaker 00: This is not a case in which Apple tried and failed. [00:43:25] Speaker 00: There's no finding by the Commission to that effect, and there's certainly no evidence of that. [00:43:29] Speaker 00: First of all, it is, I believe, undisputed that Apple started developing its ECG for the watch in 2012. [00:43:37] Speaker 00: This is at appendix 30738, among other places. [00:43:41] Speaker 00: 2012 was well before the Cardia Band and also before many of the LifeCore's other products. [00:43:50] Speaker 00: pointed out previously that the ALJ did not, in fact, rely on this supposed evidence of Apple having access to AliveCore's product or requesting meetings. [00:43:59] Speaker 00: The ALJ deemed that not especially probative, yet AliveCore and the Commission continue to cite to that evidence. [00:44:07] Speaker 00: Even if you look at that evidence, it doesn't support [00:44:10] Speaker 00: the story that they're telling. [00:44:14] Speaker 00: If you look, for example, at appendix 4001 to 4004, that is the testimony about Apple in 2014 deciding it was not going to try to get an ECG sensor onto the very first watch, but that testimony shows that Apple continued the development work throughout. [00:44:31] Speaker 00: It didn't simply shelve [00:44:33] Speaker 00: the project entirely. [00:44:34] Speaker 00: I'd also point the Court to Appendix 12026, which is a 2016 roadmap showing that Apple was still working on the ECG functionality. [00:44:44] Speaker 00: I also want to make clear the Commission did not rely on supposed praise from Apple in its secondary considerations analysis, and we've explained why that evidence doesn't support that in our reply brief. [00:44:55] Speaker 00: And the copying, again, I'll just say that the description of the evidence does not match what's in the record. [00:45:02] Speaker 02: Thank you. [00:45:05] Speaker 02: I think that's it, right?