[00:00:00] Speaker 04: Next case for argument is 23-1462, G3D Technologies versus Microsoft. [00:00:08] Speaker 02: May it please the court. [00:00:10] Speaker 02: Your Honor, this case presents a slightly different issue than the ones we've been discussing so far with respect to the 691 patent. [00:00:19] Speaker 02: Again, a related patent. [00:00:21] Speaker 02: I believe this is also a CIP of the 163, which was a CIP of the 771. [00:00:30] Speaker 02: so related families. [00:00:33] Speaker 02: And here our complaint with the board's decision is that it improperly substituted its own theory of obviousness for the one that was actually presented in the petition, the one that should have guided the litigation according to SAS. [00:00:54] Speaker 04: And the essence of your argument is they put more emphasis on Acosta [00:00:59] Speaker 04: than the petition did? [00:01:02] Speaker 02: Right, Your Honor. [00:01:02] Speaker 02: I mean, this appears in the board's opinion at the bottom of page 65. [00:01:08] Speaker 02: It says, although the petition does not use the term alternative, we find that the petitioner's positions and arguments set forth with sufficient clarity. [00:01:18] Speaker 02: And they go on to develop this alternative theory of obviousness that relies on Acosta alone. [00:01:26] Speaker 04: Well, can I ask you, firstly, what is your [00:01:30] Speaker 04: position on what the standard of review is in this context. [00:01:36] Speaker 04: The other side obviously says repeatedly it's an abuse of discretion. [00:01:40] Speaker 04: Do you agree with that? [00:01:42] Speaker 02: This really amounts to a violation of the APA, Your Honor, which I believe you reviewed in the first instance. [00:01:49] Speaker 02: I don't think it's a discretionary issue of the Board. [00:01:54] Speaker 01: acts in contravention to the APA in terms of... If they had used the word alternatively or alternative argument, you wouldn't have a case anymore, would you? [00:02:06] Speaker 02: Well, if they presented an alternative argument, then sure, I agree, Your Honor. [00:02:10] Speaker 01: How can this just be a case of a missing word? [00:02:15] Speaker 01: If the board goes on and builds an argument and lays a clear path of reasoning, [00:02:23] Speaker 01: that they use. [00:02:24] Speaker 01: Why wouldn't that be enough? [00:02:27] Speaker 02: Because it was never an alternative theory, Your Honor. [00:02:29] Speaker 02: The board just created this out of whole cloth. [00:02:32] Speaker 04: The board rests a lot on Acosta. [00:02:36] Speaker 04: Their narrative of Acosta comes entirely from the petition, does it not? [00:02:41] Speaker 04: And there's nothing that the board said in its description of Acosta that wasn't also included in the petition. [00:02:48] Speaker 04: Am I right about that? [00:02:51] Speaker 02: I don't recall every word of the board's opinion to know whether they looked at Acosta independently of the petition or not. [00:02:57] Speaker 04: Well, there are a lot of citations. [00:02:58] Speaker 04: I mean, I get that. [00:02:59] Speaker 04: I didn't go back and do a one-for-one, but they do a lot of citations to the petition when they're discussing Acosta. [00:03:08] Speaker 04: We have a number of cases that deal with this APA type problem. [00:03:14] Speaker 04: I mean, one of the things we look at, I think, is whether or not you were prejudiced by it, whether you had an opportunity to respond. [00:03:22] Speaker 04: And I didn't see anything in your briefs, maybe I missed it, that you were somehow prejudiced by this, that you didn't know what the argument was and therefore you didn't have an opportunity to respond. [00:03:34] Speaker 04: I'm not seeing that argument. [00:03:35] Speaker 02: I think we do address that in the brief, Your Honor, that this is something that appeared in the final decision, and we didn't even have the opportunity to address it. [00:03:55] Speaker 01: So was there new evidence presented before the response and reply briefs came in? [00:04:05] Speaker 02: No new evidence, your honor. [00:04:07] Speaker 02: Same references. [00:04:08] Speaker 01: The board changed horses midstream, so to speak. [00:04:12] Speaker 02: Correct. [00:04:14] Speaker 04: The board... Well, you made these arguments to the board, right? [00:04:18] Speaker 04: I mean, aren't the same arguments you're making here about the change in Acosta from the petition an argument you made to the board? [00:04:27] Speaker 02: No, I don't believe so, your honor. [00:04:28] Speaker 02: I don't believe we ever argued in front of the board that Acosta alone [00:04:33] Speaker 02: isn't the case. [00:04:34] Speaker 02: The argument we had before the board was Tomoda's method, the secondary reference, Tomoda's method doesn't teach selection of the right portions. [00:04:47] Speaker 02: I mean, our argument in front of the board was that Microsoft's petition is based on the premise that somehow selecting fewer than all of the original slices [00:05:02] Speaker 02: satisfies the claim. [00:05:03] Speaker 02: That was the argument the petition was based on. [00:05:08] Speaker 02: And Dr. Bajaj showed how that's not going to meet the limitation of the claim. [00:05:15] Speaker 02: I can refer to our briefing, I think, where we showed the juxtaposition of Dr. Bajaj's images. [00:05:24] Speaker 02: This is page 34 of our brief and the image comes from Dr. Bajaj's declaration. [00:05:32] Speaker 02: You see on the leftmost image, we have the total volume of interest. [00:05:39] Speaker 02: The middle image is essentially what Microsoft argued was taught by the Acosta-Tomoda combination. [00:05:48] Speaker 02: And the rightmost image is what the claim actually requires. [00:05:52] Speaker 02: And the board essentially agreed with our construction of the claim. [00:05:55] Speaker 02: But what they did then was said, oh, [00:05:59] Speaker 02: We'll just find against D3D on another basis, Acosta alone. [00:06:04] Speaker 02: But that was never Microsoft's case. [00:06:09] Speaker 02: Perhaps if we had known about that, we would have had an answer to that case. [00:06:13] Speaker 02: But we shouldn't have to defend against both Microsoft, which presented one case, and the board, which developed its own case. [00:06:21] Speaker 02: That was not the case in the petition. [00:06:23] Speaker 04: What about hypothetically? [00:06:24] Speaker 04: I mean, here you've got a fairly robust proceeding before the PTAP. [00:06:28] Speaker 04: Didn't you have a hearing and then have post-hearing briefs? [00:06:31] Speaker 04: and so forth. [00:06:33] Speaker 04: So the board can often come up with a claim construction that, frankly, differs from either what the petitioner or the patent owner put forth. [00:06:40] Speaker 04: So the nature of the arguments, not the bases of the grounds included in the petition, but the nature of the arguments can be fluid during a proceeding, hypothetically, right? [00:06:52] Speaker 04: Because if the claim construction changes, then you've got to shift [00:06:56] Speaker 04: the emphasis for what the prior art said or what you're looking at the prior art. [00:07:00] Speaker 04: Is that a non-starter in your view under the APA? [00:07:04] Speaker 02: No, I agree with you, Your Honor. [00:07:06] Speaker 02: And this court has had several cases in which the board did adopt a different construction. [00:07:11] Speaker 02: And in fact, in this case, they did adopt a different construction. [00:07:14] Speaker 04: And they had post-hearing briefings. [00:07:15] Speaker 02: And we had post-hearing briefings on construction. [00:07:19] Speaker 02: We're not arguing with the board's construction. [00:07:22] Speaker 02: We're arguing with what happened after the construction and the manner in which they applied the prior art, which was not the basis for the original obviousness allegations contained in the petition. [00:07:35] Speaker 02: The board has flexibility. [00:07:37] Speaker 04: And just to go back to a question I asked a few minutes ago, I think I found what I was remembering, which is the board dealt with these arguments, right? [00:07:45] Speaker 04: I mean, at 62 of the board opinion. [00:07:48] Speaker 04: they say that you're taking the position that it's inconsistent, Acosta's inconsistent with the petitioner's contentions. [00:07:54] Speaker 04: So you raised this matter with the board, and they dealt with it, right? [00:08:02] Speaker 02: Yes, I see what you're saying, Your Honor. [00:08:05] Speaker 02: But that, I believe, is referencing a different argument. [00:08:12] Speaker 02: That's the argument about [00:08:15] Speaker 02: the portion of the image that shows up in the Tomoda reference. [00:08:25] Speaker 02: So the board had a theory that they had advanced that the institution staged, going to your point about how arguments can be fluid, that there was selection of a certain part of the image and this part of the image showed up in the full slices that ultimately get presented and somehow that could meet the claim. [00:08:46] Speaker 02: That was what this discussion was about. [00:08:52] Speaker 02: And yes, we addressed that. [00:08:57] Speaker 02: But that's not the ultimate conclusion the board reached. [00:09:00] Speaker 02: The ultimate conclusion the board reached was, well, we'll just look at a cost alone. [00:09:04] Speaker 00: Let me ask you. [00:09:06] Speaker 00: There's no question that you were confronted with both Acosta and Tomoda by Microsoft in their combination argument. [00:09:18] Speaker 00: Clearly they say it's a combination. [00:09:21] Speaker 00: And did you, and I might have read it, I forgot it, I apologize, but did you kind of, in that context, in the context of that argument, did you sort of say, okay, no, here's the problem with Acosta, and here's the problem with Tomoda? [00:09:38] Speaker 00: Did you sort of grapple with Acosta by itself in the course of the board proceedings? [00:09:47] Speaker 02: I know we, we critiqued Acosta in some respects, your honor, but really we grappled with the combination of the reference and the combination is proposed by Microsoft because the fault lies in that combination. [00:10:03] Speaker 02: Microsoft looked to, to Moda to say how the portions would be selected. [00:10:12] Speaker 02: And it's that part of the claim that we address. [00:10:15] Speaker 02: We're saying fine. [00:10:17] Speaker 02: If you're going to rely on Tomoda for that part of the selection, you have to live with the consequences of Tomoda. [00:10:24] Speaker 02: And that leads to the selection of entire slices, not portions of those slices, as required in the claim. [00:10:33] Speaker 02: That's how we address the combination, Your Honor. [00:10:37] Speaker 00: And where is that specifically in here? [00:10:43] Speaker 00: well i i i i find it is section of the release yes no no no i'm happy to address it uh... let me find it for you in the and it's let me ask for me as this is where we are i could find i shouldn't ask you have to rummage around at this point it it it uh... it actually begins i think on about uh... [00:11:11] Speaker 02: 517 of the appendix, Your Honor. [00:11:13] Speaker 02: 517? [00:11:14] Speaker 02: OK. [00:11:16] Speaker 00: Let me ask you, what you seem to have here is, and you alluded to it when you pointed to those pages at the beginning of the argument, what do we do as a general proposition? [00:11:26] Speaker 00: This is sort of a hypothetical, I guess, and maybe it's already been presented. [00:11:31] Speaker 00: The board has a case where they have references A and B. The petitioner says it's a combination of A and B. [00:11:40] Speaker 00: The board really hears all the arguments on A, all the arguments on B. And it comes to the conclusion, we understand what they're saying about A, we understand what everybody's saying about B. But in our considered judgment, really, A handles it alone. [00:11:58] Speaker 00: That's what we have here. [00:12:00] Speaker 00: Off the top of my head, that doesn't strike me as, at least in a case like this where you have a fully developed record of everything, [00:12:10] Speaker 00: as rising to the level of an APA violation. [00:12:14] Speaker 00: Where am I wrong on that? [00:12:17] Speaker 02: I think SAS addresses that, Your Honor. [00:12:19] Speaker 02: The Supreme Court says that what guides the litigation is the petition. [00:12:23] Speaker 02: It's not the director's role through the board to curate the petition and pick out and cherry pick better arguments. [00:12:31] Speaker 00: But is the director? [00:12:32] Speaker 00: No, you correctly said what I think SAS says. [00:12:35] Speaker 00: But is the director sort of, or is the board, I guess, [00:12:40] Speaker 00: simply to sit there and feel iron bound that it can't deviate in the slightest and call it as it sees it based on a very complete record. [00:12:51] Speaker 02: They have an option, your honor. [00:12:52] Speaker 02: They can always ask the parties for briefing on that issue. [00:12:56] Speaker 02: If they want to stretch to some other alternative, they can ask for briefing. [00:13:01] Speaker 02: In fact, they did so here when it comes to construction. [00:13:04] Speaker 02: But they didn't ask us to brief the idea of, hey, what about Acosta alum? [00:13:09] Speaker 04: But they used, as I said, I think I said before, and tell me if I'm wrong, I think all of their references, their basis for relying on Acosta was what was included in the petition. [00:13:20] Speaker 02: Even if that's true, Your Honor, and I don't remember, but even if it's true, they didn't rely on the way Microsoft put it together. [00:13:29] Speaker 02: They didn't give us a chance to address that argument. [00:13:33] Speaker 02: Acosta alone teaches things. [00:13:35] Speaker 02: And, you know, SAS, I think, follows from the Chenery Doctrine. [00:13:39] Speaker 02: where the Supreme Court tells us that when it comes to administrative actions, you rely upon the petitioners to guide that litigation. [00:13:56] Speaker 04: Let me go back to one point earlier about the standard of review. [00:14:02] Speaker 04: Well, on page 20 of the red brief, they cite the Erickson case. [00:14:08] Speaker 02: Yes, I remember now. [00:14:09] Speaker 04: Okay, so are you... I don't disagree with Erickson. [00:14:14] Speaker 04: Do you agree that the standard of review here is an abuse? [00:14:18] Speaker 01: Abuse, yes. [00:14:26] Speaker 01: I'm concerned that we do [00:14:28] Speaker 01: have a number of cases that have come before us and they seem to be coming where the board doesn't set out enough reasoning for us to sometimes even have a meaningful review. [00:14:44] Speaker 01: And I'm especially concerned when the board does not allow a party to answer or to discuss [00:14:55] Speaker 01: new theories that are presented or new evidence. [00:14:58] Speaker 01: And we get those cases, and they're a big concern to me. [00:15:03] Speaker 01: In this case, if I read carefully back through the final written decision, would I find a clear pathway that gives me the reasoning that the board followed? [00:15:19] Speaker 01: Because if the answer is yes, then I would expect that you should have been aware or [00:15:25] Speaker 01: known of that pathway. [00:15:27] Speaker 01: And that would have been your notice at that point to say, hey, wait a minute. [00:15:30] Speaker 01: Something's going on here. [00:15:31] Speaker 01: I haven't had a chance to respond and to request that you be given that opportunity. [00:15:39] Speaker 01: Does such a pathway exist? [00:15:41] Speaker 01: And I believe our case, if you want to look at that later, it's nuvaceum. [00:15:48] Speaker 01: What do you say to that? [00:15:52] Speaker 02: I appreciate what you're saying, your honor. [00:15:53] Speaker 02: The pathway that the board lays out is this alternative theory. [00:15:58] Speaker 02: We don't believe that alternative theory exists in the petition. [00:16:02] Speaker 02: We think the board was constructing it of their own accord, and that's where the error is. [00:16:15] Speaker 02: OK, thanks. [00:16:15] Speaker 02: Thank you. [00:16:25] Speaker 03: Good morning, your honors. [00:16:27] Speaker 03: May it please the court, Sarah Jack on behalf of the Appellate Microsoft Corporation. [00:16:31] Speaker 03: This appeal boils down to the narrow issue whether the board was within its discretion to read Microsoft's petition as it did, and as a corollary to that, reject G3D's reading. [00:16:43] Speaker 03: It clearly was within its discretion, as explained in extensive detail across 20 pages of the board's decision and also as set out in the petition. [00:16:52] Speaker 03: Specifically, the board found that Microsoft's petition relies on both Acosta and Tomota as disclosing the selecting portions limitation as construed. [00:17:03] Speaker 03: This is evident from the petition's discussion. [00:17:05] Speaker 04: But the question here is whether or not Microsoft's emphasis of portions of Acosta versus Tomota was consistent with what the board did in its ultimate analysis. [00:17:17] Speaker 03: Certainly, Your Honor, I think that it was. [00:17:20] Speaker 03: If we look specifically to Section 1E of the petition, which is on Appendix 194, I think you'll find the very rationale that the board relied on contained in Section 1E, which is the limitation at issue. [00:17:38] Speaker 03: Section 1E begins by explaining that Acosta's 3D sampling probe would have been used to select in response to an input. [00:17:46] Speaker 03: And then further says Tamada's method would have been used to select in response to an input. [00:17:52] Speaker 03: And it goes on to say you would also use Tamada's method for displaying sectional images. [00:18:00] Speaker 01: Well, the question is whether the other side was ever given the opportunity or had the opportunity to address this new grounds or a new basis. [00:18:15] Speaker 01: of attributing the selecting element to a constant. [00:18:19] Speaker 01: It seems to me that Microsoft's theory all along was that the selection method was limited to tomato. [00:18:27] Speaker 03: So I think that's the way that D3D has argued this case throughout, Your Honor, but I don't think that's what Microsoft's conveyed in its petition. [00:18:33] Speaker 03: One is fairly clear, even at the beginning, that Acosta's probe would be used for selecting. [00:18:39] Speaker 03: And that stems, of course, comes after the lengthy discussion leading to that point of how Acosta operates, which the board credited. [00:18:49] Speaker 01: So just real quickly, give me the citation and the petition that [00:18:55] Speaker 01: addresses the Acosta plus theory that Acosta, where Microsoft relies on Acosta also for the selection element. [00:19:06] Speaker 03: Yes, sure. [00:19:06] Speaker 03: I mean, I believe in appendix 194 to 195, which is the start of the discussion of element 1e, which relates to selecting. [00:19:15] Speaker 03: The first couple of paragraphs talk about Acosta selecting operation. [00:19:21] Speaker 03: And I think some of the context here can be valuable, because below, D3D had some claim construction arguments surrounding the idea of further processing, which the board ultimately found had no patentable weight, but which Microsoft relied on Tomoda as evidence of that process. [00:19:38] Speaker 03: And to this extent, it was an element that needed to be proven. [00:19:44] Speaker 00: Let me ask you, in response to Judge Raina's question, you cited to 194 and 195 of the appendix. [00:19:50] Speaker 00: Is what you're saying, and if I mischaracterize what you're saying, please correct me. [00:19:56] Speaker 00: Is what you're saying, look, we came in and argued a combination of Acosta and Tomoda, point one. [00:20:05] Speaker 00: Point two though, if you look at our briefing and the petition and so forth and arguments, [00:20:13] Speaker 00: There's enough there to show Acosta alone doing the job. [00:20:19] Speaker 00: Is that what you're saying? [00:20:20] Speaker 03: Yes, Your Honor. [00:20:21] Speaker 03: At least as the board construed the selecting limitation. [00:20:23] Speaker 03: In particular, these paragraphs of Section 1E [00:20:29] Speaker 00: This is my 94-194. [00:20:30] Speaker 03: 194-195, this section discussing the element, lays out exactly how ACASTA meets the limitation. [00:20:39] Speaker 03: And that's in the petition, so D3D certainly was on notice of it and had the opportunity to address what ACASTA said there. [00:20:46] Speaker 00: So that's your argument. [00:20:47] Speaker 00: Basically, we said there's a combo here, but when you look at what we say about H1, there's enough there for the board to pin its hat, to put its hat on about the ACASTA. [00:20:59] Speaker 03: Yes, your honor. [00:21:01] Speaker 03: Excuse me. [00:21:03] Speaker 03: Certainly. [00:21:03] Speaker 03: And as I was saying before, your honor, Tomoda, and the board credited this, although it found that the four further processing limitation had no patentable weight, the board went on to credit the idea that if it did have patentable weight, Tomoda had added value in that regard. [00:21:22] Speaker 03: And I would just like to mention, your honor, [00:21:26] Speaker 03: The board discussed real-time and viewing the Acosta lump or Acosta plus Tamada arguments as alternatives. [00:21:33] Speaker 03: And I think that if you read section 1E, which is on these pages, 194 to [00:21:40] Speaker 03: 199, carefully you'll see that Microsoft starts where you would start discussing a limitation at the beginning and says Acosta selects. [00:21:49] Speaker 03: And then goes on and discusses Tomata's further processing. [00:21:53] Speaker 03: And at the end says also, at least for the reason that Tomata selects entire slices, a subset of the original slices, [00:22:03] Speaker 03: That is another ground on which the limitation is met. [00:22:05] Speaker 03: I think that the board was completely within its discretion to find alternative arguments in these pages of the petition and rely on that in holding the claims invalid. [00:22:18] Speaker 04: Was there anything that the board said in its description of Acosta? [00:22:22] Speaker 04: when it described Acosta and led it to conclude what it did on Acosta. [00:22:28] Speaker 04: Was that not from the petition? [00:22:30] Speaker 04: Was there anything that they pulled out of Acosta that was not included or cited in the petition? [00:22:35] Speaker 03: Not that I'm aware of, Your Honor. [00:22:37] Speaker 03: I have not admittedly checked every citation specifically. [00:22:40] Speaker 03: But I do know that at least a substantial majority, if not all of it, was mentioned in the petition. [00:22:53] Speaker 00: Jack, I have one question. [00:22:56] Speaker 00: This is really just for my own edification, if I need the edification. [00:23:02] Speaker 00: If you look at the appendix at 189, we have this figure here, 15. [00:23:10] Speaker 00: And I want to make sure I understand exactly what this figure shows. [00:23:15] Speaker 00: We have these three blocks in there, and those represent Acosta probes, correct? [00:23:22] Speaker 03: That's right, Your Honor. [00:23:23] Speaker 00: Each one of those is a probe. [00:23:25] Speaker 03: That's my understanding. [00:23:26] Speaker 00: And the lines that we see in the background, the vertical line and the two horizontal lines going off to the side, [00:23:34] Speaker 00: Those are showing that these probes are existing within the volume of interest. [00:23:43] Speaker 03: That's right, Your Honor. [00:23:45] Speaker 00: All right. [00:23:46] Speaker 00: That's all. [00:23:47] Speaker 00: I just wanted to make sure I understood that. [00:23:57] Speaker 03: Well, I'm happy to answer any further questions, Your Honor, but I'll take my time for it. [00:24:00] Speaker 03: Thank you. [00:24:13] Speaker 02: Your Honor, I think this case comes down to what you were looking at previously with my learned friend at appendix 194. [00:24:26] Speaker 02: With respect to this limitation, this is the case they put in front of the board. [00:24:32] Speaker 02: Acosta's 3D sampling probe would have been used to select a region of interest in response to an input. [00:24:39] Speaker 02: And Tomoda's method would have been used to select portions of the original 2D slices corresponding to the volume of that cursor. [00:24:47] Speaker 02: So Acosta selects. [00:24:49] Speaker 02: And what does it select? [00:24:51] Speaker 02: Look at Tomoda. [00:24:53] Speaker 02: Tomoda selects slices. [00:24:55] Speaker 02: And the claim says portions of slices. [00:24:58] Speaker 02: And the board's own opinion says that construction is not consistent with Microsoft's argument. [00:25:05] Speaker 04: Can I ask you, is it your view [00:25:08] Speaker 04: under the law, that given your view of this case, that the problem was that you didn't have an opportunity to respond. [00:25:17] Speaker 04: So you're seeking a reversal here, but you're really asking for a remand, right? [00:25:22] Speaker 02: Ordinarily a remand, Your Honor, but as we say in the briefing, Microsoft doesn't contest and never contested before the board that D3D's position was the correct position when it came to Tomoda. [00:25:34] Speaker 02: So you don't have to send it back. [00:25:36] Speaker 02: You can decide. [00:25:37] Speaker 04: What do you mean? [00:25:38] Speaker 04: I don't understand you. [00:25:39] Speaker 02: Microsoft has never disagreed that Tomoda selects entire slices. [00:25:45] Speaker 02: In fact, you just heard it here this morning. [00:25:48] Speaker 02: And that's not portions. [00:25:49] Speaker 02: And even the board's own opinion says that's not portions according to the claim. [00:25:56] Speaker 02: So ordinarily, yes, you send them back for cases like this, but here you don't have to. [00:26:04] Speaker 02: Thank you, Your Honors.