[00:00:00] Speaker 00:
This case is Netflix versus Vago Technologies, 2022, 1800, and 2208.

[00:00:05] Speaker 00:
Mr. Batts, when you're ready.

[00:00:36] Speaker 02:
May I please support Harper-Batz on behalf of Netflix appellant.

[00:00:39] Speaker 02:
The parties agree here that the focus of this appeal is limitation 1e, a plurality of image instances of a plurality of software applications that are executable on the plurality of virtual machines.

[00:00:50] Speaker 02:
Now the board clearly construed this phrase such that executable referred to image instances, not software applications.

[00:00:58] Speaker 02:
And the entire analysis of the final decision on this issue was a single paragraph and really in reality a single sentence.

[00:01:05] Speaker 02:
and the construction adopted by the board was not advocated by either party is wrong and is subject to de novo review.

[00:01:13] Speaker 02:
So we explain in our opening brief that the claim language, grammar rules, the specification, and their expert testimony demonstrates that that construction was clearly wrong.

[00:01:24] Speaker 03:
When did you first offer your construction to either of the boards in either of the IPRs, the one that you asked us to adopt?

[00:01:35] Speaker 02:
The issue of what is executable first came up in the first final written decision, because it was not advocated by either party.

[00:01:44] Speaker 02:
So I don't think there's been any dispute that neither party asked for this construction.

[00:01:48] Speaker 02:
Avago isn't defending this construction.

[00:01:50] Speaker 02:
They didn't defend it below, and they also haven't defended it in their briefing here.

[00:01:54] Speaker 03:
From which it follows that you're acknowledging you did not propose the construction that you're advocating to us.

[00:02:02] Speaker 03:
until after the final written decision was issued in the first IPR, correct?

[00:02:07] Speaker 02:
That is correct, Your Honor.

[00:02:08] Speaker 03:
So how can that be proper given, meaning you first presented it in your reply brief in the second IPR, correct?

[00:02:18] Speaker 03:
Yes.

[00:02:20] Speaker 03:
So isn't that too late for you to offer a claim construction?

[00:02:24] Speaker 02:
Absolutely not, Your Honor, because given that neither party had advocated for this claim construction, and it was an unanticipated claim construction that's clearly wrong by the board, the first opportunity that we had to argue that claim construction was after the first final written decision issue.

[00:02:38] Speaker 02:
That's the first time we had notice or opportunity.

[00:02:40] Speaker 03:
Was there a dispute over the claim construction that arose prior to that, even if neither side actually proposed this resolution to that dispute?

[00:02:50] Speaker 02:
There is no dispute as to what executable referred to, whether it referred to software application.

[00:02:56] Speaker 03:
There was a dispute over the proper construction of limitation 1E as a whole, correct?

[00:03:05] Speaker 02:
I don't think so, Your Honor, and the reason I pause on answering that is because if we go to, it was a claim construction that we requested for that language, for the 1E language.

[00:03:16] Speaker 02:
And what we requested there was for a different issue.

[00:03:18] Speaker 02:
The issue was a question of what would constitute an image instance.

[00:03:22] Speaker 02:
And we pointed to the dependent claim in the patent itself to say, well, an image instance could qualify, a virtual machine image file could qualify as an image instance.

[00:03:33] Speaker 02:
And Avago, in response, didn't dispute that.

[00:03:36] Speaker 02:
They didn't contest that that would satisfy.

[00:03:39] Speaker 02:
So with the claim language that we proposed, the claim construction we proposed, we didn't believe there was any ambiguity or need.

[00:03:45] Speaker 02:
You know, claim constructions are supposed to address ambiguities in claim language.

[00:03:48] Speaker 02:
We didn't believe that there was any ambiguity in the claim language as to what executable referred to.

[00:03:54] Speaker 02:
Because as we noted, for the grammar rule, the last antecedent grammar rule,

[00:03:58] Speaker 02:
I mean, clearly as a grammar rule, it would modify the closer clause, not the remote clause.

[00:04:03] Speaker 02:
They didn't address that in their briefing.

[00:04:05] Speaker 02:
We also explained that if you look at limitation 1C, I think that's really instrumental here because... I'm happy for you to get there, but just one more thing on the procedural status.

[00:04:14] Speaker 03:
Sure.

[00:04:16] Speaker 03:
The proper construction of the limitation 1E was in dispute from fairly early on.

[00:04:24] Speaker 03:
Both sides were heard on it.

[00:04:26] Speaker 03:
And we know from our case law, the board was not limited in what construction it gave to resolve that dispute.

[00:04:33] Speaker 03:
It was not limited to what either party proposed.

[00:04:37] Speaker 03:
So it seems that it follows from that.

[00:04:39] Speaker 03:
You had fair notice and an opportunity to be heard on the proper construction of 1E.

[00:04:45] Speaker 03:
And your construction that you ask us to adopt simply comes up too late.

[00:04:51] Speaker 02:
And I would disagree with that, Your Honor, because as I noted, what we asked for construction and what Broadcom, the dispute between the two parties about our construction was what would constitute an image instance.

[00:05:02] Speaker 02:
But what we did do is we set forth clearly in our petition, we explained that the software applications are executable.

[00:05:09] Speaker 02:
And we had that explained in our petition.

[00:05:12] Speaker 02:
So there was never an argument.

[00:05:13] Speaker 02:
There was an expert argument about this.

[00:05:15] Speaker 02:
And in fact, Broadcom took the position in the briefing below that the software applications are executable.

[00:05:20] Speaker 03:
Well, I think you also said that image instances need only be executable as well, right?

[00:05:31] Speaker 03:
The board called you out on that.

[00:05:32] Speaker 03:
That seems entirely inconsistent with you saying now that only software applications have to be executable.

[00:05:39] Speaker 02:
Well, I think I have three points to say on response to that.

[00:05:43] Speaker 02:
First is our petition clearly laid out that we were contending that the software applications are executable.

[00:05:49] Speaker 02:
So we did that in our petition at appendix page 177, and then the corresponding paragraph 137 of our expert declaration, we laid out.

[00:05:57] Speaker 02:
It's not that it's a very difficult claim limitation to address, that software would be executable.

[00:06:03] Speaker 02:
And we pointed out that Conducar specifically teaches software that can execute.

[00:06:07] Speaker 02:
So the second point that I would say is that that quote that was pointed, that you're referring to, Your Honor, was for the second theory, which were not appealing here.

[00:06:16] Speaker 02:
And it was addressing this question.

[00:06:17] Speaker 02:
The main thrust, the overall thrust of Avago's arguments below was this three-step process argument they had.

[00:06:24] Speaker 02:
And it was a question about executable or executing.

[00:06:28] Speaker 02:
That's what the parties were.

[00:06:29] Speaker 02:
If you look at the hearing transcript, the briefing,

[00:06:31] Speaker 02:
all the arguments essentially were there.

[00:06:34] Speaker 02:
And that's why Avago doesn't even defend this construction.

[00:06:37] Speaker 02:
Instead, they're asking you to affirm based upon the three-step process argument, even though the board specifically said it didn't reach that argument.

[00:06:44] Speaker 02:
And then I do think it is notable that on Appendix page 3250 to 3251, Avago stated, quote, each time a specification uses the phrase on the virtual machines as used in Claim 1 and 19,

[00:06:58] Speaker 02:
The specification refers to software applications executing in the emulated environment.

[00:07:04] Speaker 02:
So clearly, there wasn't some sort of dispute about the claim limit.

[00:07:07] Speaker 02:
This isn't an example.

[00:07:08] Speaker 02:
I think Your Honor is thinking of an example where, yeah, you have a claim limitation dispute.

[00:07:11] Speaker 02:
You have two different proposals by the two different parties.

[00:07:15] Speaker 02:
And then the board says, well, I'm not really going with your proposal, not your disposal.

[00:07:19] Speaker 02:
I'm going to go my own way.

[00:07:20] Speaker 02:
I'm going to do a modified version of either of those proposals.

[00:07:23] Speaker 02:
There was no dispute below about what was executable.

[00:07:27] Speaker 02:
And therefore, I do think this falls within the APA for notice and consideration, inconsistent with even the electronic decision recently by this board, where we're talking about, hey, you have to give an opportunity when a patent owner raises a new plane construction and its patent owner responds,

[00:07:43] Speaker 02:
then you get an opportunity to address it in your reply.

[00:07:46] Speaker 02:
This is one step worse in the sense that we didn't have notice from the patent owner response that there was going to be this argument, so we didn't have an opportunity to address it in the reply.

[00:07:55] Speaker 02:
It wasn't even discussed at the oral hearing, so it wasn't even like we had an opportunity at the first oral hearing to address this issue.

[00:08:02] Speaker 02:
Literally the first time we see this is in the first final written decision, and if you go to that page of the first final written decision, what we see on

[00:08:12] Speaker 02:
page 23 to 24 of the first final written decision, up until page 23, you have basically the board summarizing the two parties' arguments.

[00:08:21] Speaker 02:
The first time that they do any analysis here about the arguments is at the very bottom of 23, that one paragraph, where they say they agree with the patent owner's arguments, and they simply have a sentence there that says, we didn't show that the virtual disk image files for Fondacar, the three different types, are executable on the programming virtual machines.

[00:08:41] Speaker 02:
That's the only analysis.

[00:08:42] Speaker 02:
They didn't say anything else.

[00:08:43] Speaker 02:
They just said, you didn't show this.

[00:08:44] Speaker 02:
You didn't show that the virtual machines are executable, even though the claim language is clearly referring to the software applications.

[00:08:51] Speaker 02:
And then the next part of that paragraph, like I said, I think it's a single sentence that's really analyzing this, because the next part of that same paragraph, they're actually acknowledging and crediting our actual argument, which is petitioner cites Kondakar's teachings that the operating system and applications are operating.

[00:09:08] Speaker 02:
That's the problem that they have here is they didn't do that analysis.

[00:09:11] Speaker 02:
They didn't give us an opportunity to address that analysis up until the first final written decision issued.

[00:09:17] Speaker 02:
And what's really notable here in this briefing, I think, in this appeal, is Broadcom isn't contesting that the board made a mistake about that analysis.

[00:09:25] Speaker 02:
They keep on saying, well, plain, ordinary meaning, plain, ordinary meaning.

[00:09:27] Speaker 02:
But even when they were asked by the judges in the second hearing below, they refused to take a position on what the term executable refers to.

[00:09:35] Speaker 02:
When we pointed out the claim limitation, I do want to hit that claim limitation 1C.

[00:09:39] Speaker 02:
1C has very parallel language.

[00:09:43] Speaker 02:
It says a plurality of image instances

[00:09:47] Speaker 02:
of a virtual machine manager, so a software application, that is executable.

[00:09:53] Speaker 02:
So clearly, not only the rule of last antecedent executable is referring to the software application, the virtual machine manager here, but given that there's a plural in the remote clause and a singular in the near clause, it clearly has to be referring to the software application.

[00:10:10] Speaker 02:
And they didn't address the grammar rule at all, other than to say, well, patent cases haven't ever used the grammar rule, and we pointed out that patent cases have actually used the grammar rule.

[00:10:18] Speaker 02:
They didn't address this claim language in their brief in any way.

[00:10:21] Speaker 02:
They didn't address the specification that we pointed to, Column 33, the specification, where we've noted that on Appendix Page 122,

[00:10:30] Speaker 02:
that the specification of the 138 patent talks about operating system software applications may execute on virtual machines.

[00:10:37] Speaker 02:
So we have the specification support that they didn't address.

[00:10:39] Speaker 02:
And then we have their own expert's testimony.

[00:10:41] Speaker 02:
And I don't know if you noticed, Your Honor, but in their expert's testimony, we actually asked him a question about the image instances executed.

[00:10:47] Speaker 02:
And he corrected the questionnaire and said, well, actually, it's the software applications that are executed.

[00:10:52] Speaker 02:
So we have all the evidence for a de novo review of a claim construction showing that the board's claim construction was wrong.

[00:10:59] Speaker 02:
And I do want to point out in Appendix 3968 to 3971, the judge will vote in the second hearing asked Avago's counsel on multiple occasions, are you agreeing?

[00:11:11] Speaker 02:
Do you agree that executables should refer to image instances versus software applications?

[00:11:16] Speaker 02:
And they kept on dodging the question because they know it's wrong.

[00:11:19] Speaker 02:
So we have a clear instance here.

[00:11:22] Speaker 02:
of a claim construction that is wrong and under de novo review should be reversed and it should be remanded so they can consider and do an actual analysis of the theory that we set forth in our petition regarding the software applications being executable.

[00:11:36] Speaker 03:
The board says there's like four theories here, but on appeal today, is there anything we have to decide other than the claim construction and whether we can reach the claim construction?

[00:11:48] Speaker 02:
So to be clear, they've

[00:11:50] Speaker 02:
They highlight what they call four theories.

[00:11:52] Speaker 02:
The second theory is not being appealed, so there's nothing to be done on that one.

[00:11:57] Speaker 02:
The first theory and the third theory, we contend, are the same theory.

[00:12:00] Speaker 02:
Because they said, well, now you're arguing that the software is disputable.

[00:12:04] Speaker 03:
The only part of the first theory that's in dispute is the claim construction, correct?

[00:12:07] Speaker 03:
Yes, Your Honor.

[00:12:07] Speaker 03:
Now what about the fourth theory, the bootable?

[00:12:10] Speaker 03:
Is there some other issue for us?

[00:12:11] Speaker 02:
So the fourth theory is, I mean, I'm going to be straightforward on this.

[00:12:15] Speaker 02:
We did not argue in our petition that the image instances are executable.

[00:12:20] Speaker 02:
We didn't foresee that being an issue.

[00:12:22] Speaker 02:
That wasn't a theory that we put in the petition.

[00:12:24] Speaker 02:
But once we saw the final written decision, it's not like we could put our heads in the sand like an ostrich for the second hearing.

[00:12:30] Speaker 02:
We had to say, OK, they told us now that this means the image instance are executable.

[00:12:34] Speaker 02:
We need to do both the claim construction we believe is correct, but also with the construction they adopted.

[00:12:39] Speaker 02:
So we said, hey, there's still evidence in the record

[00:12:42] Speaker 02:
sufficient to show that the image instances are bootable.

[00:12:45] Speaker 02:
So Kondakar also teaches image instances that are executable.

[00:12:49] Speaker 02:
So that wasn't our theory in our petition, but similar to like if a patent owner raised a new claim construction in a patent owner response, you say, hey, even under that claim construction, it's a timely theory that can be addressed by the board.

[00:13:03] Speaker 02:
So that theory would only be relevant, I think, Your Honor, if you found that the claim construction stood.

[00:13:12] Speaker 02:
then it would be under a question of, well, under that claim construction, which we think is wrong, we still introduced evidence.

[00:13:19] Speaker 02:
And there's sufficient evidence in the record to find the claims unpatentable.

[00:13:23] Speaker 00:
Counsel, you're well into your rebuttal time.

[00:13:25] Speaker 02:
Apologies, Your Honor.

[00:13:26] Speaker 00:
Do you want to save it?

[00:13:27] Speaker 02:
Yes, Your Honor.

[00:13:28] Speaker 02:
Thank you.

[00:13:28] Speaker 00:
Mr. Young.

[00:13:45] Speaker 01:
Thank you, Your Honors.

[00:13:46] Speaker 01:
Dan Young, from Carls and Brady, representing Avago Technologies.

[00:13:51] Speaker 01:
There are, as counsel for Netflix set forth, there are a couple key issues here that make this case actually very straightforward.

[00:13:59] Speaker 01:
The first is that limitation 1E is at issue.

[00:14:04] Speaker 01:
Conocard is the only prior reference that they relied on for both the first and the second petition.

[00:14:10] Speaker 01:
And they offered a claim construction

[00:14:12] Speaker 01:
not just for a portion of limitation 1e, not just for a plurality of image instances or a plurality of software applications, but for the entirety of that limitation.

[00:14:24] Speaker 01:
They said the entirety of that limitation, which also includes that are executable on a plurality of virtual machines, all of it,

[00:14:31] Speaker 01:
is satisfied by a plurality of disk image files.

[00:14:37] Speaker 01:
The board rejected that claim construction.

[00:14:41] Speaker 01:
And very importantly, Netflix does not appeal the board's rejection of their proposed claim construction.

[00:14:49] Speaker 01:
And it's important to understand what the board exactly did with respect to that claim construction.

[00:14:55] Speaker 01:
What Netflix argued was that because of dependent claim two,

[00:15:01] Speaker 01:
that says that what dependent claim two says is that not the entirety of 1E, not a plurality of image instances of a plurality of software applications that are executable on a plurality of virtual machines, not the entirety, but just that the image instances can be satisfied by a virtual disk image file.

[00:15:27] Speaker 01:
And the board said that is improper, because you're reading out the second half of that limitation that says that are executable on the plurality of virtual machines.

[00:15:38] Speaker 01:
The plurality of virtual machines, the antecedent basis for that is limitation 1D.

[00:15:46] Speaker 01:
The reason they don't appeal their construction is because they would easily lose that, because if you take dependent claim 2 and you substitute it into

[00:15:56] Speaker 01:
dependent claim three, what it would say is the virtual disk image files that are executable on the plurality of virtual machines.

[00:16:04] Speaker 01:
And that last part is completely null and void under their construction.

[00:16:08] Speaker 01:
And the board said, that's improper.

[00:16:10] Speaker 01:
You're reading that out of the claim.

[00:16:13] Speaker 01:
Because as we said, the second part of that limitation describes how and where those virtual, those image instances of the software applications are deployed.

[00:16:24] Speaker 01:
Because that's defined in

[00:16:26] Speaker 03:
Help me understand where you disagree with how Netflix characterizes procedurally where we are.

[00:16:35] Speaker 03:
There was a dispute over the proper construction of limitation 1E, and both parties were heard on that, right?

[00:16:44] Speaker 03:
Yes, Your Honor.

[00:16:45] Speaker 03:
But there were certain portions of the competing proposals that there was no disagreement between the parties on.

[00:16:52] Speaker 03:
Isn't that correct?

[00:16:54] Speaker 01:
Well, what was very clear is that in the entirety of this case, Netflix took the position that the image instances are what is executable.

[00:17:06] Speaker 01:
As you pointed out, the board called them on that.

[00:17:08] Speaker 03:
In their reply brief, they said... Well, there are other places where they say it's the applications that have to be executable, aren't there?

[00:17:18] Speaker 03:
We were pointed out some of those instances in the record, weren't we?

[00:17:21] Speaker 01:
Well, once the image instance of the software applications are deployed, then obviously the software applications themselves will execute the whole point.

[00:17:34] Speaker 01:
But that's not the point of the claim.

[00:17:37] Speaker 01:
As you can see, if you took their construction of dependent claim two and put it into claim one, it would say virtual disk image files

[00:17:46] Speaker 01:
that are executable on the plurality of virtual machines.

[00:17:50] Speaker 01:
And what the board did was they said after they rejected their construction, they looked at the petition, which is the same for limitation 1E in both final written decisions.

[00:18:04] Speaker 01:
And what they said was, you have not explained how that are executable on the virtual machines

[00:18:11] Speaker 01:
You provide no explanation of how that's satisfied under what you argued in the petition.

[00:18:17] Speaker 01:
When the board calls their first theory in their second final written decision, which Mayor is the first, there's no question

[00:18:27] Speaker 01:
that that, quote, first theory is their proposed construction that the court rejected, or the board rejected.

[00:18:33] Speaker 01:
The entirety of that, and it's at the very beginning of the petition for limitation 1E, it says, limitation 1E may be satisfied by A, plurality of virtual disk image files, C, section 5A, which was their claim instruction, which the board rejected.

[00:18:51] Speaker 01:
The entirety of the first theory, all it talks about are the three types of VMs, which are image instances.

[00:19:00] Speaker 01:
And it just describes that that as a whole satisfies the entirety of 1E.

[00:19:06] Speaker 01:
Because the dispute that the board rejected was not a portion of 1E, but the entirety of 1E.

[00:19:12] Speaker 03:
But at least Netflix's position on appeal is that there was a portion of 1E

[00:19:20] Speaker 03:
that was not disputed between the parties and the board went to that undisputed portion and filled in a construction that neither party had proposed for that undisputed portion.

[00:19:36] Speaker 03:
Tell me why that characterization of what happened procedurally is incorrect.

[00:19:41] Speaker 01:
Because the board never made

[00:19:42] Speaker 01:
an affirmative construction.

[00:19:44] Speaker 01:
They applied the plain and ordinary meaning.

[00:19:47] Speaker 01:
And they said that Netflix has to describe in their petition how the entirety of that limitation is satisfied.

[00:19:56] Speaker 01:
So what the board did.

[00:19:56] Speaker 03:
Sorry, did the board not implicitly require that what needed to be executable was the image instances as opposed to the software applications?

[00:20:09] Speaker 03:
Isn't that clearly the implication of how the board was

[00:20:12] Speaker 03:
construing 1E?

[00:20:14] Speaker 01:
I know, Your Honor.

[00:20:16] Speaker 01:
What they were doing was they were applying what Netflix argued in the petition.

[00:20:21] Speaker 01:
What they argued in the petition were that these three types of disk files satisfied the entirety of 1E.

[00:20:28] Speaker 01:
So what they did was they went through the petition and they said, let's map what you argue.

[00:20:33] Speaker 01:
And when they get to that section where it says, at best, what they say is, at best, you've shown or they've argued that the software applications are executable, but that is in direct contradiction to what they argued with respect to the disk files being executed.

[00:20:54] Speaker 01:
And it wasn't just in one place.

[00:20:57] Speaker 01:
They argue it over and over and over again

[00:21:00] Speaker 01:
They argue, for example, they said in the second reply, they said, the claim language that requires the image instances need only be executable.

[00:21:13] Speaker 01:
In their first reply, they said it twice.

[00:21:15] Speaker 01:
They said, with respect, now remember, in the claim language, there are two sets of image instances.

[00:21:20] Speaker 01:
One is image instances of virtual machine manager.

[00:21:23] Speaker 01:
and the second is the image instances of the software applications.

[00:21:27] Speaker 01:
So in their first reply, and you can see this on Appendix 2224, they said the claims only require that those images, the images of the virtual machine manager, are executable on the plurality of application nodes.

[00:21:41] Speaker 01:
Then they said with respect to the image instances of the software applications,

[00:21:45] Speaker 01:
on Appendix 2233, they said, it is the claim language, not the petitioner, that omits the patent owner's process by requiring that the images need only be executable, not actually executed.

[00:22:00] Speaker 03:
They point us to at least one instance where your expert seems to say it's the software applications that need to be executable.

[00:22:07] Speaker 01:
Well, the software applications are executable.

[00:22:10] Speaker 01:
But what needs to happen is the image instances need to be executable.

[00:22:17] Speaker 01:
And if you look at the totality of claim one, this makes sense.

[00:22:22] Speaker 01:
So if you look at, as an example, the first set of image instances, in section 1D it says, now remember, these are the image instances of the virtual machine manager.

[00:22:33] Speaker 01:
It says, wherein, when executed on the application nodes, the image instances

[00:22:39] Speaker 01:
of the virtual machine manager provide a polarity of virtual machines.

[00:22:43] Speaker 01:
That's the antecedent basis for the virtual machines down in limitation 1E.

[00:22:50] Speaker 01:
So there it is, the image instances of the virtual machine manager that are executable.

[00:22:57] Speaker 01:
And then when you talk about the image instances of the software applications, you look at the second part of the claim.

[00:23:07] Speaker 01:
So the first part of the claim talks about

[00:23:09] Speaker 01:
the software image instance repository, and the second part of it deals with the control mode, what happens is you copy the image instances of the virtual machine manager onto a node, a hard computer, then those image instances of the virtual machine manager execute, create virtual machines, which then the images of the software applications go down on top of.

[00:23:38] Speaker 01:
And so what the board said is that's, you Netflix have argued that the image instances are what are executable, and the only part where they, you know, they said that they argued this in the petition, that the software applications are executable.

[00:23:55] Speaker 01:
There's a single sentence that talks about the second half of limitation one E, which is that are executable on the Plowry virtual machines, and it's the very last sentence

[00:24:05] Speaker 01:
in section one.

[00:24:07] Speaker 01:
You can see this on appendix page 177.

[00:24:09] Speaker 01:
It says, as explained above, each pre-built custom-built and instantly deployable VM includes a virtual disk image file with an operating system

[00:24:18] Speaker 01:
and applications that are executable on the virtual machines.

[00:24:21] Speaker 01:
Where it says, as explained above, the entirety of that section is simply talking about a plurality of image instances of the software applications.

[00:24:32] Speaker 03:
If we reach the merits of what is the proper construction of that last portion of 1E, what should we say is the correct construction?

[00:24:41] Speaker 01:
The correct construction would be plain and ordinary meaning,

[00:24:45] Speaker 03:
Meaning what has to be executable, the image instances or the applications?

[00:24:50] Speaker 01:
Well, Netflix certainly argued that the applications need to be executable.

[00:24:54] Speaker 01:
And what's your position?

[00:24:56] Speaker 01:
The entirety of the claim requires the image instances to be executable.

[00:25:01] Speaker 01:
Now, the software applications obviously are executable as well because that's the whole point of having software applications on a computer.

[00:25:08] Speaker 01:
But the way this claim works is there are two sets of images.

[00:25:13] Speaker 03:
Are you defending the board's implicit claim construction or are you not?

[00:25:18] Speaker 01:
I don't think the board made an implicit claim construction.

[00:25:20] Speaker 01:
That's what we said in the brief.

[00:25:21] Speaker 01:
And the reason for that is because what they did is they rejected their claim construction.

[00:25:25] Speaker 01:
They said plain and ordinary meaning.

[00:25:27] Speaker 01:
Then they looked at the petitions.

[00:25:30] Speaker 01:
And under these two theories,

[00:25:32] Speaker 01:
The first theory clearly says, under Netflix's view, that the image instances are what need to be executable, and they said that you didn't explain how those image instances are executable on the plurality of virtual machines, because that was the construction that they rejected because Netflix did not explain how... Image instances are one thing, but the claim requires specific types of image instances.

[00:26:01] Speaker 01:
image instances of software applications that are executable on the virtual machines.

[00:26:06] Speaker 01:
So what the board did is looked at the evidence in the petition and said you didn't argue, you didn't set forth, you had no explanation for why the theory is that are executable on the virtual machines.

[00:26:19] Speaker 01:
And what we said in page 14 of the brief in front of your honor, the problem with Condocard and the problem with Netflix's position and why it's not clear,

[00:26:30] Speaker 01:
is they use the VMs, the three types of VMs, as both the image instances of the software applications and the virtual machines.

[00:26:43] Speaker 01:
But the virtual machines are from limitation 1D, and they never tie

[00:26:51] Speaker 01:
limitation 1e to limitation 1d.

[00:26:54] Speaker 01:
And that's what the board said in all these theories.

[00:26:56] Speaker 01:
They said you provided no explanation as to how that happens.

[00:27:01] Speaker 01:
and you heard their counsel at the beginning during their argument, they don't talk about the virtual machines at all.

[00:27:08] Speaker 01:
It's not the same thing.

[00:27:09] Speaker 01:
And if you read the entirety of Section 1E in both petitions, the entirety of that limitation is exactly what their claim construction is.

[00:27:19] Speaker 01:
That was rejected.

[00:27:20] Speaker 01:
So it's not surprising that the board found that the Section 1E was deficient because their claim construction read that limitation out, and their evidence assumed that limitation out.

[00:27:32] Speaker 03:
Procedurally, if we do look at this case as one in which, yes, there was a dispute over 1E, but certain portions of 1E were not disputed, and then the board implicitly construed 1E in a way that did something unanticipated to the undisputed portion of 1E.

[00:27:53] Speaker 03:
And so, given the happenstance of time, Netflix then

[00:28:00] Speaker 03:
came up with a new, clearer construction only after that all happened in the first final written decision.

[00:28:06] Speaker 03:
And you're not defending that the board came up with the right construction if, I know you don't agree with all that, but if that's how we see this case procedurally, what should we do?

[00:28:17] Speaker 03:
Is it proper what Netflix did in coming up with the new construction and its reply in the second IPR, or is it not proper?

[00:28:24] Speaker 01:
No, Your Honor, it's absolutely not proper.

[00:28:27] Speaker 01:
And the board set forth the standard.

[00:28:30] Speaker 01:
It says, at the outset, you have to argue with it.

[00:28:34] Speaker 03:
Tell me this, in our remaining seconds.

[00:28:36] Speaker 03:
What made what the board did proper, if that's how I see it?

[00:28:41] Speaker 01:
Yes, Your Honor, because the board applied, plain and unruly, to what they argued in the petition.

[00:28:47] Speaker 01:
And they found under what you argued, you ignored the limitation part of that are executable on the plurality of virtual machines.

[00:28:55] Speaker 01:
That's why we rejected your claim construction.

[00:28:57] Speaker 01:
And that's why your petition for Section 1E fails for the exact same reason.

[00:29:01] Speaker 01:
You don't give any meaning to that part of the limitation we need.

[00:29:07] Speaker 01:
Thank you, Your Honor.

[00:29:19] Speaker 02:
Thank you, Your Honors.

[00:29:19] Speaker 02:
There's quite a bit to unpack there, but I'm just going to start with one logical fallacy.

[00:29:24] Speaker 02:
The institution decision went forward.

[00:29:25] Speaker 02:
They granted institution even though the board didn't adopt Netflix's construction.

[00:29:29] Speaker 02:
They went with a plain and ordinary construction.

[00:29:32] Speaker 02:
If Avago's argument is to be followed by its logic, he said they should have never instituted because they rejected Netflix's construction or they didn't adopt Netflix's construction.

[00:29:41] Speaker 02:
They adopted a plain and ordinary construction, but in the institution decision, they never said,

[00:29:45] Speaker 02:
Plain ordering means that executable refers to the image instances rather than the software applications.

[00:29:50] Speaker 02:
The first time we saw that was in the final written decision.

[00:29:54] Speaker 02:
And I do think the Valencell Fitbit decision that we cited to hear in our briefing is relevant because at that case said, you can't just stop

[00:30:02] Speaker 02:
your analysis at the board when you reject a petitioner's construction.

[00:30:05] Speaker 02:
You have to go through and apply the construction that you're applying to the claims.

[00:30:10] Speaker 02:
So here, we need to have a review of the construction that they actually applied.

[00:30:14] Speaker 02:
Yes, it was a plain and ordinary meaning, but this court is full of decisions that says plain, ordinary meaning can still be a construction.

[00:30:20] Speaker 02:
So I don't think it's credible for him to say that there wasn't an affirmative construction in response to your questions, Judge Stark.

[00:30:26] Speaker 02:
There clearly was an affirmative to construction.

[00:30:28] Speaker 02:
He hypothesizes.

[00:30:29] Speaker 02:
And there's a lot of conjecture there of what the board was thinking.

[00:30:33] Speaker 02:
But we have a single sentence and final written decision on this point that just says, you didn't show that the image instances are executable.

[00:30:40] Speaker 02:
And I do think that, again, they had no response on the claim construction issue, none of the evidence that we submitted.

[00:30:47] Speaker 02:
They had no response.

[00:30:48] Speaker 02:
I think I heard for the first time that they said now that they do agree that the imaged instances are executable, but I'm not quite clear on that.

[00:30:56] Speaker 02:
But they've also conceded now, in response to your questions, Judge Stark, that the software applications are executable.

[00:31:02] Speaker 02:
So I don't think there's even a dispute if it gets remanded back under the claim construction.

[00:31:06] Speaker 02:
The only issue that the board needs to now address is the three-step process argument that was their main thrust argument that they dedicated almost all their briefing and oral argument to.

[00:31:16] Speaker 02:
And I just want to note my last point, and I'm happy to answer any other questions, but a lot of what you heard from him in his arguments about justifying the decision was, again, it was under the guy's different wording, but it's still the three-step process argument.

[00:31:29] Speaker 02:
If you look at the antecedent basis, if you look at what was earlier in the claims, all this other claim language, that's their three-step process argument.

[00:31:36] Speaker 02:
The board hasn't ruled on that three-step process argument.

[00:31:39] Speaker 02:
There's nothing for you to look at yet for that argument.

[00:31:42] Speaker 02:
That argument still remains to be decided.

[00:31:44] Speaker 02:
So it certainly can't be the basis for an affirmance here today.

[00:31:48] Speaker 02:
So I urge that this be remanded under proper claim instructions so that the board can consider that three-step process argument.

[00:31:54] Speaker 02:
And I'm happy to answer any other questions.

[00:31:58] Speaker 00:
Thank you to both counsel and thank you to submitters.