[00:00:00] Speaker 02: The next case is Cost Corporation versus Bose Corporation, 23-1173. [00:00:07] Speaker 00: Mr. Needleson, again, when you're ready. [00:00:37] Speaker 00: Thank you, Your Honor. [00:00:37] Speaker 00: May it please the Court? [00:00:38] Speaker 00: Again, my name is Mark Needison for Appellant Cause Corporation. [00:00:42] Speaker 00: This appeal consolidates two final written decisions from the Board of Patent Appeals for the so-called 025 and 934 patents. [00:00:50] Speaker 00: Bose challenged all claims of the 025 patent and most of the claims of the 934 patent. [00:00:56] Speaker 00: The Board found in cost its favor on the so-called signal strength claims. [00:01:02] Speaker 00: I want to focus on the signal strength claims, which is the focus of Bose's cross appeal. [00:01:14] Speaker 00: The board made some factual findings. [00:01:17] Speaker 00: in its final written decision, which were the basis for finding Acosta's favor. [00:01:23] Speaker 02: Among those factual findings was that both... Can you just try to... And I'll have your friend help me to clear up. [00:01:30] Speaker 02: What claims... I know you, in the claustronics, you reasserted claim four as representative of the signal strength claims. [00:01:37] Speaker 02: What other claims are related to that, that you're calling the signal strength claims that are at issue here for the 025 and 934? [00:01:53] Speaker 00: It's several. [00:01:54] Speaker 00: It's about 20 claims. [00:02:05] Speaker 00: So on page 23 of our opening brief, footnote 6 mentions all the so-called signal strength claims of the 025 and 934 pads. [00:02:14] Speaker 00: Can you read them for the record? [00:02:16] Speaker 02: No, that's fine. [00:02:17] Speaker 02: We can take a look at it. [00:02:19] Speaker 00: Claim four is the first claim in each pattern. [00:02:23] Speaker 00: So that's like the lowest numbered claim in each. [00:02:29] Speaker 00: So I want to, one of the board's findings and finding and costs in favor on the signal strength claims was that Bose had failed to provide a motivation combined with a rational underpinning. [00:02:41] Speaker 00: That's a factual finding by the board. [00:02:43] Speaker 00: It deserves substantial evidence deference. [00:02:47] Speaker 00: And I want to focus on Boza's reply brief. [00:02:53] Speaker 00: At the bottom of page 29, they ask that this court that say, the problem with the majority's decision, however, this is talking about the motivation of the buying. [00:03:01] Speaker 00: The problem with the majority's decision, however, is it failed to properly weigh the pros and cons in two different ways. [00:03:08] Speaker 00: So Bose is explicitly asking you to weigh the pros and cons of the board's decisions on the motivation to combine. [00:03:15] Speaker 00: That's not proper under a substantial evidence review. [00:03:18] Speaker 00: But even if we go into the two reasons why they're asking for you to do it, they are not well placed either. [00:03:24] Speaker 00: The first one on the top of page 30, they say that the board totally ignored Bose's first argument for motivation to combine. [00:03:34] Speaker 00: The first argument Bowe's made was so-called convenience for a user and for that they cited Verada Paragraphs 16 and 31 and 20 and the board specifically addressed that argument. [00:03:51] Speaker 00: It's at footnote 18 of the 934 pattern final written decision and it's at footnote 27 of the 025 final written decision. [00:04:00] Speaker 00: So they clearly [00:04:01] Speaker 00: They did not ignore Bose's first argument. [00:04:04] Speaker 03: Can I ask you maybe more of a housekeeping question, but I just want to get your take on kind of remedy. [00:04:10] Speaker 03: And I know again you're probably going to think we're a broken record, but I want to ask you on the mootness point here. [00:04:15] Speaker 03: If we find that the district court's order on 101 had some propulsive effect and that this case is moot and all that, do you agree with both that we should vacate the board's decision with respect to the signal strength claims? [00:04:29] Speaker 03: Or do you have a different position? [00:04:31] Speaker 03: I'm not sure that I'm aware of what your position is on what would happen with respect to it. [00:04:35] Speaker 00: The hypothetical is if you agree that [00:04:38] Speaker 00: the Judge Tiger, the district court decision inviting, invalidating all these claims as preclusive effect? [00:04:44] Speaker 03: Yes. [00:04:50] Speaker 03: What's your position on what, if anything, should be done with the board's decision with respect to the signal strength claims? [00:04:56] Speaker 03: This is the Monsignor issue. [00:04:58] Speaker 00: Yeah. [00:04:58] Speaker 00: I mean, I think you ought to uphold the board's decision. [00:05:02] Speaker 00: Because we filed the amended complaint. [00:05:04] Speaker 00: It doesn't have preclusive effect. [00:05:07] Speaker 04: But let's say hypothetically, I think that Judge Cunningham is saying hypothetically, let's say that we thought that it did have the closest effect. [00:05:14] Speaker 04: The question is whether we would vacate any portion of the board's decision below under Monsignor. [00:05:22] Speaker 04: Specifically, the portion that relates to the signal claims, because the signal strength claims. [00:05:29] Speaker 04: And the reason why would be is that any mootness that occurred wasn't the fault of Bo's. [00:05:40] Speaker 00: I don't know the answer to that question. [00:05:50] Speaker 00: I want to go back to the merits of upholding the signal strength claims. [00:05:54] Speaker 00: Back to the motivation to combine. [00:05:56] Speaker 00: The second argument Boaz made was that it would be improving a known device or taking a known technique to improve a known device. [00:06:07] Speaker 00: And the board there found that Bose's expert had made an incredible or not credible opinion. [00:06:13] Speaker 00: That's a factual finding. [00:06:15] Speaker 00: And if you look at actually what Bose's expert said, he merely just stated the standard. [00:06:20] Speaker 00: It was a bold conclusion. [00:06:21] Speaker 00: So the board was right to say there's no factual basis for that. [00:06:24] Speaker 00: And the third basis for Bose's appeal on this issue is that Bose, of the oral argument, [00:06:30] Speaker 00: Pete made a new argument about a user moving around. [00:06:34] Speaker 00: The board said that's a new argument. [00:06:35] Speaker 00: He didn't raise it before. [00:06:37] Speaker 00: But even if we're going to consider it, we don't think that's a motivation to combine. [00:06:41] Speaker 00: So all these are factual considerations that have substantial evidence. [00:06:52] Speaker 00: I want to now, if we could turn to the basis for our appeals, [00:06:57] Speaker 00: The main appeal is the claim construction appeals, starting with the 025 patent. [00:07:03] Speaker 00: There's a claim that incites a body portion and an elongated portion. [00:07:07] Speaker 00: It's kind of similar to the 982 patent we talked about. [00:07:11] Speaker 00: We feel that the board misconstrued the claim term body portion. [00:07:16] Speaker 00: And they pretty much just rearranged the words. [00:07:20] Speaker 00: If you properly construe the term, it should mean the main or central or [00:07:25] Speaker 00: principal component of the earphone, because that's the ordinary meaning of body, and it distinguishes it from the elongated portion, separate from the body portion. [00:07:33] Speaker 00: And when you apply that proper construction, it closes argument. [00:07:42] Speaker 00: don't show any validity. [00:07:43] Speaker 00: They're not so obvious. [00:07:44] Speaker 00: It's because those argued that on the 46th of Davis, the earbud, the foam earbud, was the body portion. [00:07:51] Speaker 00: But there's no evidence that it's the main or central or principal component of the earphone. [00:07:56] Speaker 00: In the grand scheme of things, it's a very small portion of Davis's earphone. [00:08:06] Speaker 00: The other claim set of claims in the 025 patent for the claims instruction issue are back to the hanger bar type claims or some dependent claims there. [00:08:16] Speaker 00: And there they say that the hanger bar or the body connected to the hanger bar where the earphone extends from the body. [00:08:28] Speaker 00: Extends from was the key claim term the board said extends from could mean an indirect connection. [00:08:33] Speaker 00: I think the ordinary meaning in light of the Phillips standard in this case is that extends from requires a direct connection. [00:08:41] Speaker 00: The 025 patent does disclose an earphone that goes into the ear or an earphone that extends into the ear and extends from the body. [00:08:52] Speaker 00: That's in figures 1D and 1E of the patent. [00:08:56] Speaker 00: And again, if you construe extends from to require a direct extension from, then it's clear that Boas has failed to show that claims are invalid. [00:09:09] Speaker 00: Again, relied on Davis's body. [00:09:12] Speaker 00: Davis is encoded 12 as the body, and the ear hook as the hanger bar, and the earphone 46 as the [00:09:19] Speaker 00: Earbud 46 has the earphone in the claim, but the earbud 46 of Davis does not extend directly from the enclosure 12. [00:09:30] Speaker 00: So with that, if there's any other questions, I'll reserve them in my time. [00:09:34] Speaker 00: Thank you. [00:09:35] Speaker 00: Thank you. [00:09:49] Speaker 01: Thank you, Your Honors. [00:09:50] Speaker 01: Michael Rader on behalf of the Appellee and Cross-Appellant Closed Corporation. [00:09:55] Speaker 01: I'd like to start by just addressing the motion to dismiss and making sure we're clear on what's going on in this appeal. [00:10:03] Speaker 01: I know it was previewed a little bit in the first argument, but we have two patents here, the 025 patent and the 934 patent. [00:10:10] Speaker 01: The allegations in the second amended complaint [00:10:13] Speaker 01: that costs made after the Section 101 order were only as to the signal strength claims, the ones listed in the footnote that Mr. Nielsen mentioned. [00:10:23] Speaker 01: So as to all of the other claims, and therefore all of the claims that cost is appealing on, [00:10:29] Speaker 01: They did not reassert any of those claims in their second amended complaint. [00:10:34] Speaker 01: Instead, they moved forward with a second amended complaint that only asserted the signal strength claims. [00:10:40] Speaker 04: And with respect to the signal strength claim, there was no appeal taken. [00:10:43] Speaker 01: And there was no appeal taken with respect to the signal strength claim. [00:10:46] Speaker 01: So that's the reason why their substantive appeals should be dismissed as moot. [00:10:51] Speaker 01: And as to our cross appeal, which relates to the signal strength claims, it should also be dismissed as moot because the same thing transpired. [00:11:00] Speaker 01: The only difference is that they made additional factual allegations in the second amended complaint related to the signal strength claims. [00:11:08] Speaker 01: But what they did not do is they did not do any of the following. [00:11:11] Speaker 01: They did not wait for the judge to rule on the motion to dismiss that second amended complaint. [00:11:16] Speaker 01: They did not seek vacateur of the judge's earlier order. [00:11:19] Speaker 01: And after the final judgment ended, they did not appeal. [00:11:21] Speaker 03: Maybe I wasn't following. [00:11:22] Speaker 03: For some reason, I thought, and obviously correct me if I'm wrong, because I'm trying to keep all of these straight. [00:11:29] Speaker 03: But I want to address kind of our follow up on what was being my hypothetical or whatever that I posed to the opposing counsel. [00:11:38] Speaker 03: I thought that there was some request for like a [00:11:40] Speaker 01: uh... they could share in part but in my midst remembering the request that was made no that's correct ok so what we're asking for is for all of the appeals including our cross-appeal to be dismissed the portion of the board's order that relates to the signal strength claims on which we lost should be vacated can I ask you as a practical matter why are you asking for that if hypothetically we were to agree [00:12:07] Speaker 04: that there was a final judgment holding those patents ineligible, and your appeal was dismissed. [00:12:15] Speaker 04: Why do you need a vacatur of the decision below when the patent is ineligible? [00:12:22] Speaker 01: Well, I guess, Your Honor, I could say belt and suspenders. [00:12:25] Speaker 01: It's really just that it's the right thing to do in this circumstance. [00:12:30] Speaker 02: But does it have any effect? [00:12:31] Speaker 02: Are there other? [00:12:32] Speaker 02: Because it seems like there's lots of patent families going on here. [00:12:37] Speaker 02: patents or patent families where the board's reasoning in those claims and upheld may be used going forward, and that's why you wanted to vacate it, or you just want it because you want the ruling that it was, you know, [00:12:52] Speaker 02: not invalid vacated, even though it practically doesn't matter because they're ineligible. [00:12:59] Speaker 02: Because if it's the former, I get it. [00:13:01] Speaker 02: If it's the latter, I don't see what the point is. [00:13:04] Speaker 02: Because if they're ineligible, they're ineligible. [00:13:07] Speaker 02: Whether or not the board found them not invalid is beside the point. [00:13:13] Speaker 01: I guess what I would say is to directly answer your question about other cases, I don't know the answer to that because I haven't studied patents that are inserted against BOSE closely enough to know. [00:13:22] Speaker 01: But I would add one thing, which is that maybe it depends on how this court words its opinion or its order. [00:13:30] Speaker 01: But there's a hypothetical constraint. [00:13:32] Speaker 01: Let me just ask. [00:13:33] Speaker 02: Let me just say, to be clear, maybe this will help you answer. [00:13:37] Speaker 02: Let's just assume we're going to find the district court's ineligibility binding and preclusive as to all of the patent claims and patents it addressed in that issue, because it was either not reasserted or it wasn't appealed. [00:13:52] Speaker 02: I'm not saying that's what we're doing, but for purposes of answering this, that's the whole thing. [00:13:57] Speaker 02: And so if that's the case, then why does it matter that we need to vacate the board's findings on validity? [00:14:06] Speaker 01: If that's the case, then I don't think we need it, Your Honor. [00:14:09] Speaker 01: I think other than the [00:14:10] Speaker 01: Felt and suspenders answer. [00:14:12] Speaker 01: I think the reason for our concern was simply, depending on how this court worded its order, when we go back to the District of Massachusetts and file a motion to dismiss the pending infringement litigation, we were worried about any residual risk that POSS might try to relitigate the issue [00:14:30] Speaker 01: of collateral estoppel there, if this court's order wasn't sufficiently clear to make clear to the judge there. [00:14:37] Speaker 01: But if this court finds that that Section 101 order... Is that district court case currently stayed? [00:14:43] Speaker 01: It stayed. [00:14:44] Speaker 04: Okay. [00:14:44] Speaker 04: And so that's a district court case involving these same funds, including some that were found ineligible, but it's currently stayed pending the outcome of the IPRs. [00:14:54] Speaker 04: And no communication with the district court [00:14:57] Speaker 04: in your case has occurred as a result of the district court's determination in the Plantronics case? [00:15:02] Speaker 04: Is that what I understand? [00:15:04] Speaker 01: The district court, so the three patents that are at issue in our case against both are the three patents that are on appeal today. [00:15:11] Speaker 01: The 155 patent from this morning's first hearing and the two patents that issue in this hearing. [00:15:16] Speaker 01: It's just those three patents. [00:15:18] Speaker 01: The district court has ordered us to provide periodic updates on the status of the IPRs in the appeal. [00:15:24] Speaker 01: And if memory serves, I believe that Koss did make a request to lift the stay. [00:15:31] Speaker 01: And to directly answer your question, although I'm not 100% sure, I do have a memory that we may have mentioned to the district court, the Section 101 order, as one of the reasons why the station continues. [00:15:41] Speaker 01: And the district court did continue to stay, pending, among other things, the outcome of this appeal, these appeals. [00:15:50] Speaker 01: I want to make sure I don't lose sight of your question, Judge Cunningham. [00:15:53] Speaker 03: I feel like you've answered enough where I know where you stand. [00:15:58] Speaker 01: OK. [00:15:58] Speaker 01: OK. [00:15:59] Speaker 01: I'll just say with respect to the signal strength claims, the only way that the treatment of the signal strength claims could be any different in terms of the motion to dismiss is if some exception applied to the general rule that interlocutory orders merge with the final judgment. [00:16:23] Speaker 01: That's the general rule. [00:16:25] Speaker 01: The exception, according to the matter of your case, which is one of the Ninth Circuit cases we cited, is only if that order is overcome by later developments in the litigation. [00:16:36] Speaker 01: So the question for your honors would be, does simply filing an amended complaint with some additional allegations and then abandoning it and stipulating to dismissal with prejudice constitute [00:16:47] Speaker 01: a later event that overcomes the earlier order in the litigation. [00:16:51] Speaker 01: And we respectfully submit it's definitely not. [00:16:54] Speaker 01: As my colleague said this morning, had the court issued an order ultimately on the motion to dismiss that second amended complaint, that would supersede. [00:17:03] Speaker 01: But simply filing an amended complaint and then agreeing to dismissal [00:17:07] Speaker 01: That doesn't. [00:17:07] Speaker 01: If it did, every litigant would do that. [00:17:10] Speaker 01: As soon as they got hit with a dismissal, they would just replede and then dismiss their case with prejudice and make that argument. [00:17:17] Speaker 01: So all the appeals should be dismissed for that reason. [00:17:23] Speaker 01: I'm happy to understand your argument. [00:17:30] Speaker 01: There was an indication this morning that you didn't need argument on cost of appeals for all the reasons we've discussed. [00:17:35] Speaker 01: But I'm happy to address either that or our cross appeal if it would be helpful. [00:17:41] Speaker 01: Would you like to hear from me on the cross appeal? [00:17:48] Speaker 03: Do you have any questions? [00:17:48] Speaker 01: Thank you, Your Honors. [00:17:58] Speaker 02: He didn't really address the merits. [00:17:59] Speaker 02: I'll give you a little bit of time, but don't spend a lot of time on the merits since he didn't address them. [00:18:05] Speaker 00: I was. [00:18:06] Speaker 00: OK, on the merits, on the signal strength claims, the board found in our favor for three factual reasons. [00:18:14] Speaker 00: The first two are kind of related. [00:18:16] Speaker 00: But the third one stands alone. [00:18:18] Speaker 00: And the third one was that Bose had failed to show a motivation combined with a rational underpinning. [00:18:23] Speaker 00: And that was based on factual findings by the board that deserve substantial evidence of deference. [00:18:29] Speaker 00: And the record shows that the board got it right. [00:18:33] Speaker 00: or at least that its weighing of the facts was reasonable. [00:18:36] Speaker 00: They're entitled to the difference. [00:18:38] Speaker 00: Going back to the motion to dismiss if I may. [00:18:40] Speaker 00: A colleague asked, you know, was the order overcome when we filed the amended complaint? [00:18:48] Speaker 00: And our answer is yes. [00:18:50] Speaker 00: His order, Judge Tiger's order, was that it was without prejudice. [00:18:54] Speaker 00: He granted us the need to file an amended complaint. [00:18:56] Speaker 00: When we did that, it overcame his prior order. [00:18:59] Speaker 00: Judge Tiger has [00:19:00] Speaker 00: My research issued nine opinions on section 101 motions to dismiss. [00:19:05] Speaker 00: Two of them he granted with prejudice. [00:19:09] Speaker 00: He didn't allow the party to re-amend the other seven, cause the case being won. [00:19:13] Speaker 00: He gave the party motions without prejudice given a chance to amend the complaint. [00:19:19] Speaker 00: So they can, district court judges can grant these motions with prejudice, which would be more appealable at that time. [00:19:27] Speaker 00: Once we filed the amended complaint, [00:19:29] Speaker 00: It was interlocked where we couldn't have appealed, and there was nothing to merge into the final judgment that would have been appealable once the final judgment entered into. [00:19:39] Speaker 02: Thank you. [00:19:40] Speaker 02: Thank you. [00:19:41] Speaker 02: So you didn't talk about the merits of your process. [00:19:44] Speaker 02: So I'm not going to repeat it all the time.