[00:00:00] Speaker 04:
We will hear argument first today in number 231815, Vago Technologies against Netflix.

[00:00:12] Speaker 04:
Mr. Young.

[00:00:14] Speaker 01:
Thank you, Your Honor.

[00:00:15] Speaker 01:
May it please the court to hand you on for Vago Technologies.

[00:00:20] Speaker 01:
With respect to the challenge claim one,

[00:00:22] Speaker 01:
The board's findings with respect to limitations 1B, 1C, and 1D lack substantial evidence.

[00:00:29] Speaker 01:
Specifically with respect to limitation 1B, the Patrick reference, which is the prior reference relied on by the board, does not disclose the determination of an initial transmission rate using a real-time determination of available bandwidth between the server and the client.

[00:00:48] Speaker 01:
Patrick does make a determination

[00:00:50] Speaker 01:
And what this determination is is without dispute.

[00:00:54] Speaker 01:
Patrick determines the available bandwidth for accelerated streaming, which acts as an upper limit or threshold to what the actual streaming may be.

[00:01:04] Speaker 01:
So Patrick goes through and determines what this threshold is and the actual streaming

[00:01:12] Speaker 01:
is not determined prior to transmission.

[00:01:17] Speaker 00:
Is your argument here contingent on our agreeing with you that paragraph 38, for example, of the Patrick reference doesn't relate to step 204 at all?

[00:01:32] Speaker 01:
I believe it's step 206, Your Honor, but yes.

[00:01:35] Speaker 01:
Yes, step 206.

[00:01:39] Speaker 01:
So to skip ahead to paragraph 38, with respect to how Patrick goes through.

[00:01:47] Speaker 00:
Did you answer my question?

[00:01:50] Speaker 00:
Your Honor.

[00:01:51] Speaker 00:
I asked whether your argument, just your argument that you're presenting, that you just mentioned, whether that's contingent on the understanding, your suggestion that paragraph 38 doesn't relate to step 206.

[00:02:05] Speaker 00:
I know, Your Honor.

[00:02:06] Speaker 01:
And the reason for that is,

[00:02:08] Speaker 01:
even if the court were to accept the board's findings in totality with respect to paragraph 38, which we disagree with for many reasons in the briefing.

[00:02:17] Speaker 01:
But if the court were to accept that, at the end of the day, what you still have is that the network conditions, which is what we're relied on as part of paragraph 38, would impact the determination of that threshold

[00:02:30] Speaker 01:
But there's no evidence that those network conditions would determine the actual transmission rate.

[00:02:37] Speaker 01:
Because remember, limitation 1B says you have to determine the transmission rate.

[00:02:42] Speaker 01:
And that's based on a real-time determination of the available communication bandwidth between the server and the client.

[00:02:49] Speaker 01:
To make a very clear point on this, there's nothing in Patrick

[00:02:54] Speaker 01:
that discloses the determination of the initial transmission rate before transmission.

[00:03:00] Speaker 01:
So even if the court would accept everything the board found with respect to paragraph 38, you would still have a calculation in Patrick of that upper threshold

[00:03:11] Speaker 01:
but then the actual transmission, which is an act 208 of the Patrick reference, that is the actual transmission rate.

[00:03:21] Speaker 01:
And to take a step back, this makes sense because if you look at figure two of Patrick and you look at the server, there are two specifically different elements as part of that server.

[00:03:36] Speaker 01:
You have

[00:03:37] Speaker 01:
the accelerated streaming control module 150.

[00:03:40] Speaker 01:
That's what does act 202, 204, 206.

[00:03:45] Speaker 01:
And that's the control module.

[00:03:47] Speaker 01:
But that's not what's actually doing the streaming.

[00:03:49] Speaker 01:
The streaming itself is with streaming module 144.

[00:03:54] Speaker 01:
And there's nothing in the Patrick reference that says the accelerated streaming control module tells

[00:04:02] Speaker 01:
or dictates to the streaming module 144 what the actual transmission rate is going to be.

[00:04:10] Speaker 01:
What actually happens is the control module 150 sets up these thresholds, an upper threshold and a lower threshold.

[00:04:16] Speaker 01:
And the board specifically found that that's what the available bandwidth for accelerated streaming is.

[00:04:24] Speaker 01:
On page 18 of the final written decision of the board, the board specifically says that this

[00:04:33] Speaker 01:
This available bandwidth for accelerated streaming, which is determined in Act 206, acts as an upper threshold or limit.

[00:04:40] Speaker 01:
That's not in dispute.

[00:04:41] Speaker 01:
What the board then found was that, well, the actual determination, that would have been an obvious thing.

[00:04:52] Speaker 01:
Because the board knows that there's no actual determination of the initial transmission rate that is determined using a real-time

[00:05:03] Speaker 01:
using a real-time determination of the available bandwidth between the server and the client.

[00:05:08] Speaker 01:
That's never disclosed in Patrick.

[00:05:11] Speaker 01:
Not a word.

[00:05:12] Speaker 01:
The board understood that and said, well, it would have been obvious.

[00:05:15] Speaker 01:
Now, they don't rely on another reference other than Patrick.

[00:05:17] Speaker 04:
I'm sorry.

[00:05:19] Speaker 04:
Obvious to simply use the determined maximum that is concededly in Patrick.

[00:05:28] Speaker 01:
But no, your honor.

[00:05:29] Speaker 01:
They said that it would be obvious to determine an initial transmission rate based on a real-time determination of the available communication bandwidth between the server and the client, which is not disclosed in Patrick.

[00:05:41] Speaker 01:
The upper limit is disclosed for sure.

[00:05:43] Speaker 04:
That's what I mean.

[00:05:43] Speaker 04:
So if you assume that Patrick discloses an upper limit

[00:05:48] Speaker 04:
on a transmission rate that you think it's not obvious to a skilled artist and reader use it?

[00:05:58] Speaker 01:
Oh, no, no, you're on.

[00:05:59] Speaker 01:
That's not at all what I'm saying.

[00:06:01] Speaker 01:
The threshold is absolutely used.

[00:06:04] Speaker 01:
And the steady state.

[00:06:05] Speaker 01:
There's two thresholds in PATRICK.

[00:06:07] Speaker 01:
There is the upper threshold, which is what's determined in Act 206, and then the steady state.

[00:06:15] Speaker 01:
And what PATRICK says is you set these limits, and then you transmit between them.

[00:06:20] Speaker 01:
And that's why I was saying that the control module 150 sets those limits.

[00:06:25] Speaker 01:
But the actual transmission rate was actually transmitted.

[00:06:28] Speaker 01:
is with the streaming module 144.

[00:06:33] Speaker 04:
So what... And is there something in Patrick that talks about the streaming module making a decision about the rate at which to stream or just to carry out the transmission?

[00:06:46] Speaker 01:
The latter.

[00:06:46] Speaker 04:
So who in Patrick is the

[00:06:51] Speaker 04:
deciding what at least the initial transmission rate will be.

[00:06:57] Speaker 04:
Isn't it obvious that if the streaming module isn't making the decision, obvious that one thing Patrick would render obvious is use the upper limit that the only decision maker calculated.

[00:07:17] Speaker 01:
The upper limit is, and this goes back to the underlying purpose of Patrick, the upper limit is based on the server load.

[00:07:25] Speaker 01:
In other words, what can the server actually do?

[00:07:28] Speaker 01:
But it doesn't have any determination of what the 098 patent says, which is what you do, this real-time determination of what you can actually transmit.

[00:07:39] Speaker 01:
What Patrick is saying is you look at the server,

[00:07:42] Speaker 01:
And that limit is used as an upper limit.

[00:07:47] Speaker 01:
But what 144 does is it starts transmitting.

[00:07:49] Speaker 01:
In fact, in paragraph 39, it gives you an example.

[00:07:53] Speaker 01:
And it says, well,

[00:07:54] Speaker 01:
you can start sending data from the receiver to the client, wait for an acknowledgement, but then you're not gonna know the actual transmission rate until you've already begun streaming, and that's to bleed into limitation 1C.

[00:08:10] Speaker 01:
What happens in 1C is you make the determination of what the transmission rate's going to be in 1B, and then in 1C, you start transmitting at that initial

[00:08:24] Speaker 01:
at that initial transmission rate.

[00:08:26] Speaker 01:
So you have to make the determination in step B, and then you transmit in step C. What Patrick does in paragraph 39, it says expressly, is you start transmitting.

[00:08:35] Speaker 01:
Now you've got to transmit lower than the upper limit and higher than the lower limit, but then what you actually transmit is not determined until transmission has begun.

[00:08:44] Speaker 01:
And that's one of the fundamental distinctions between Patrick

[00:08:49] Speaker 01:
and claim one of the 098 patent.

[00:08:52] Speaker 01:
Because in the 098 patent, you set the transmission rate first.

[00:08:56] Speaker 01:
And then you run it for a period of time.

[00:08:58] Speaker 01:
And then if there's a change in the available communication bandwidth between the server and the client, then you would recalculate to a second transmission rate for the rest of that first period.

[00:09:10] Speaker 04:
I don't remember exactly, but did the board find that Patrick taught the calculation of the rate at which the

[00:09:24] Speaker 04:
processor could spit things out and the rate at which the wire could transmit what is spit out.

[00:09:42] Speaker 04:
If I understand.

[00:09:44] Speaker 04:
The processor bandwidth, I think, is sometimes how it was talked about.

[00:09:47] Speaker 04:
And the carrier bandwidth is sometimes how it was talked about.

[00:09:51] Speaker 04:
I thought that the board disagreed with your argument that Patrick taught only the processor bandwidth.

[00:09:59] Speaker 04:
And increasingly, as you're describing things here, it seems to me your argument is coming down to disagreeing with the board's finding about that.

[00:10:11] Speaker 01:
I hope I understand your question.

[00:10:13] Speaker 01:
What the board found was that Patrick taught the upper and lower limit and the board found that it would have been obvious

[00:10:21] Speaker 01:
for Patrick to modify Patrick.

[00:10:23] Speaker 01:
Again, a single reference.

[00:10:24] Speaker 01:
There's no other reference to combine it with.

[00:10:26] Speaker 01:
That a person of oriented skill not reading Patrick would have also found that it was obvious to make this determination of the initial transmission rate.

[00:10:35] Speaker 01:
And that's where, to answer the previous question from Judge Stoled, paragraph 38 is irrelevant

[00:10:43] Speaker 01:
Paragraph 38 deals with whether network conditions impact the upper or lower limit.

[00:10:49] Speaker 01:
That's all that the board found with respect to paragraph 38.

[00:10:52] Speaker 01:
The board took another step and said, in addition to these upper and lower limits, it also would have been obvious for the server to calculate an initial transmission rate based on the upper and lower limit.

[00:11:05] Speaker 01:
And our position is none of the paragraphs cited by the board talk about the actual transmission rate being determined prior to actual transmission.

[00:11:14] Speaker 01:
There's absolutely discussion about the determination of the upper or lower limit prior to transmission.

[00:11:22] Speaker 01:
So hopefully that answered your question.

[00:11:27] Speaker 01:
And then with respect to claim one, lastly, with element D,

[00:11:36] Speaker 01:
The structure with claims elements B, C, and D is you determine an initial transmission rate for a first period, and it's based on a real-time determination of the available bandwidth between the server and the client.

[00:11:48] Speaker 01:
You start the transmission.

[00:11:50] Speaker 01:
That available bandwidth between the server and the client changes.

[00:11:54] Speaker 01:
Then you make a second determination of a second transmission rate to then transmit for the balance of the first period.

[00:12:04] Speaker 01:
And the board simply relied on

[00:12:06] Speaker 01:
Paragraph 45 to say that, well, will these steps 204 through 208 get reevaluated periodically?

[00:12:16] Speaker 01:
Well, if you never made the first determination for the first transmission rate,

[00:12:22] Speaker 01:
There's no determination of the first period.

[00:12:25] Speaker 01:
So then, obviously, first period of time.

[00:12:27] Speaker 01:
Obviously, then, there's also no disclosure of determining a second transmission rate and then transmitting for that balance of the first period.

[00:12:35] Speaker 01:
So with respect to the board's findings, with respect to elements B, C, and D, we argue that that lacks substantial evidence.

[00:12:43] Speaker 01:
Because even if the board were to accept

[00:12:45] Speaker 01:
The court which would accept the board's evaluation of paragraph 38, again, that's only the upper and lower limit.

[00:12:53] Speaker 01:
It's not related to the actual transmission rate that element B, C, and D require.

[00:13:02] Speaker 00:
Can I ask you what you just said?

[00:13:03] Speaker 00:
I mean, the board, in its opinion, specifically cited paragraph 38 for the proposition that Patrick disclosed that the amount of bandwidth can vary based on the current conditions

[00:13:15] Speaker 00:
of the network coupling the server and client devices.

[00:13:18] Speaker 00:
And then they say, as a result, we agree that it would have been obvious to measure the available communications bandwidth between the server and the client.

[00:13:26] Speaker 00:
I mean, you're not disputing that that's factually, that there's substantial evidence to support that, right?

[00:13:32] Speaker 00:
Or are you?

[00:13:34] Speaker 00:
I mean, there's expert testimony to support that.

[00:13:37] Speaker 00:
So that's why I'm struggling a little bit.

[00:13:40] Speaker 01:
Your Honor, our position is certainly with respect to if you read Patrick as a whole, that paragraph 38 clearly talks about the network communications being directed to the upper limit and the lower limit, not the actual transmission rate.

[00:13:57] Speaker 01:
But even if you were to accept all of that, there's no disclosure in Patrick whatsoever that you make this measurement of a real-time determination of the bandwidth between the server and the client and then use that

[00:14:09] Speaker 01:
to then calculate the actual transmission rate.

[00:14:10] Speaker 01:
There is no evidence at all that an actual transmission rate is determined by Patrick prior to transmitting.

[00:14:16] Speaker 01:
And then just one last quick thing with respect to claim.

[00:14:19] Speaker 04:
You're well into your rebuttal time.

[00:14:22] Speaker 01:
Yes, your honor.

[00:14:22] Speaker 01:
With respect to claim seven, this predetermined latency goal only talks about increasing the bandwidth based on this factor.

[00:14:32] Speaker 01:
But there's no discussion at all of how that would actually work with Patrick, how you'd actually take the MoDavi reference, use this factor, and adjust the upper and lower limits, which are based on server load, based on this factor.

[00:14:45] Speaker 01:
There's no discussion at all of how that would be done.

[00:14:47] Speaker 01:
So we also argue that that would be a lack of substantial evidence with respect to that finding as well.

[00:14:51] Speaker 04:
OK, thank you.

[00:15:11] Speaker 02:
May it please the court, Harper Batts on behalf of Appellee Netflix.

[00:15:15] Speaker 02:
I guess I would start off by saying I don't think there's any dispute here that we're under the substantial evidence standard here today for review.

[00:15:22] Speaker 02:
I was a little thrown off, I guess, by Judge Stoll's question early on.

[00:15:27] Speaker 02:
I thought we were going to be arguing about paragraph 38, disclosures of paragraph 38.

[00:15:30] Speaker 02:
That was the majority of their briefing.

[00:15:34] Speaker 02:
But I can walk through the arguments of that.

[00:15:36] Speaker 02:
I don't even recall them mentioning the streaming module in their brief.

[00:15:40] Speaker 02:
either brief before this court, so I'm a little surprised by the argument about the streaming module.

[00:15:46] Speaker 02:
But I do think, if we start off, Appellant has continually argued that Patrick's determination of available bandwidth is based upon only server load.

[00:15:56] Speaker 02:
And you heard that again today, where he's talking about the upper limit, or server load, or based upon the server.

[00:16:02] Speaker 02:
They gave up that argument and sir replied before the board,

[00:16:05] Speaker 02:
But they reprised it here in the opening brief, and I just have a few citations, pages 42 to 44, and then again on opening brief page 63, they say, Patrick teaches determining transmission rate using only the server load.

[00:16:19] Speaker 02:
We showed that to be untrue.

[00:16:21] Speaker 02:
We showed that the board explained and relied upon our arguments about paragraph... Did you show that to be untrue by relying on paragraph 38?

[00:16:29] Speaker 00:
Your expert did?

[00:16:30] Speaker 02:
Not just 38, Your Honor.

[00:16:31] Speaker 02:
So we relied on paragraphs 31 through 35, where they also talked about different factors that would be considered for the rate, including like a requester sending a requested rate for the transmission.

[00:16:43] Speaker 02:
So there's clearly other teachings in Patrick that went beyond just server load for the available bandwidth determination prior to reaching paragraph 38.

[00:16:52] Speaker 02:
And so in terms of this upper limit or upper, the threshold argument, I think if we turn to paragraphs 34 and 35, it's quite instructive because those paragraphs which were relied upon the board in conjunction, in combination with paragraph 17,

[00:17:09] Speaker 02:
Let me slow down.

[00:17:10] Speaker 02:
Let me start with 17.

[00:17:11] Speaker 02:
So paragraph 17, which the board relied upon,

[00:17:16] Speaker 02:
sorry, paragraph 19, includes the Streaming Control Module.

[00:17:21] Speaker 02:
It introduces the Streaming Control Module.

[00:17:23] Speaker 00:
Which, are you looking, did you say paragraph 19?

[00:17:25] Speaker 00:
19.

[00:17:26] Speaker 00:
A762?

[00:17:26] Speaker 00:
On 762.

[00:17:27] Speaker 02:
Thank you.

[00:17:31] Speaker 02:
It says that the Streaming Control Module is what determines an appropriate rate for accelerated streaming.

[00:17:38] Speaker 02:
So the module that's determining the rate, and you kept on talking about a limit versus a rate,

[00:17:44] Speaker 02:
Patrick uses the term rate, and it's talking about your determining a rate for the accelerated streaming.

[00:17:49] Speaker 02:
If we now turn to Patrick on paragraphs 34 and 35 on appendix 763 and 764, and these are the paragraphs that the board cited to in the final written decision on this point, it talks about the rate that is being determined in Act 206 from Figure 3,

[00:18:06] Speaker 02:
and that's before transmission starts, you're determining this rate, and it says the various ways that the rate can be determined, including, as I mentioned earlier, the very first sentence that paragraph 34 talks about, the rate can be determined based in part on a rate requested by the requester.

[00:18:22] Speaker 02:
So it's not simply server load.

[00:18:24] Speaker 02:
There's different factors, and they go through 34, and then into 35, they talk about what is the rate for this transmission, and then that rate is being used by, is being determined by, and then at the very top of 764, that very first line from Paragraph 34, the rate determined by Control Module 150.

[00:18:45] Speaker 02:
So I think Patrick's teachings are very straightforward in terms of explaining how a rate is determined.

[00:18:51] Speaker 02:
The rate is determined in Act 206.

[00:18:54] Speaker 02:
I do think Council mixed two different findings by the Board in the final written decision.

[00:19:01] Speaker 02:
The Board looked at paragraph 38 and said, and I think you noted that language from the final written decision 31 and there's some other portions of the decision that are talking about, Patrick's paragraph 38 teaches that you use the bandwidth, the network bandwidth, as part of the determination of the rate.

[00:19:20] Speaker 02:
The board also said that it would have been obvious looking at Patrick's teachings to make that determination.

[00:19:27] Speaker 02:
And it relied upon the support of both experts to said, at this time period, it was known how to do this.

[00:19:35] Speaker 02:
There was like 10 or 15 different techniques we cited out in our briefing.

[00:19:38] Speaker 02:
There was many different techniques that could be used to determine the network bandwidth.

[00:19:42] Speaker 02:
So I think I'm happy to answer any questions, but I believe that addresses

[00:19:46] Speaker 03:
You started by saying that certain argument being made to us today was waived in your view and their sir reply Can you show us where that is sure that waiver happened?

[00:19:55] Speaker 02:
Yeah, if I understood you correctly Yes, I was pointing to that their argument that available bandwidth depends only on sir on server load and

[00:20:06] Speaker 02:
They admitted, and also even here in their reply brief, they admitted that, well, there are other factors.

[00:20:14] Speaker 02:
So if we look at their reply brief on page three.

[00:20:16] Speaker 03:
That's their reply to us.

[00:20:18] Speaker 02:
To you.

[00:20:19] Speaker 02:
They said, well, yes, but that's a property of the requester.

[00:20:24] Speaker 02:
So they tried to turn the argument where they're saying it's only about server load.

[00:20:29] Speaker 02:
page three of the reply.

[00:20:31] Speaker 04:
Where are you on it?

[00:20:32] Speaker 02:
And they say it is clearly a property of the requester.

[00:20:35] Speaker 04:
First paragraph.

[00:20:36] Speaker 04:
Thank you.

[00:20:37] Speaker 02:
The italicized requester.

[00:20:39] Speaker 02:
Yes.

[00:20:40] Speaker 02:
And the point being there is, our point was

[00:20:43] Speaker 02:
They were the ones that argued that the available bandwidth was only being determined based upon server load.

[00:20:49] Speaker 02:
So then we said, hey, if you look at these other paragraphs, paragraphs 34 and 35, clearly there are other factors such as, for example, a rate requested by a requester that's not based upon the server.

[00:21:01] Speaker 02:
In turn, they said, well, yes, that's something that's other than the server load, but that's still not a determination based upon the network bandwidth.

[00:21:09] Speaker 02:
And we're not contending it's the network bandwidth.

[00:21:11] Speaker 02:
We're saying that Patrick is looking at numerous factors other than just server load for that available bandwidth determination.

[00:21:18] Speaker 02:
Paragraphs 34 and 35 include some, and then paragraph 38 includes others.

[00:21:26] Speaker 04:
I may have missed it.

[00:21:28] Speaker 04:
Did you identify a joint appendix page for the Sir Reply below?

[00:21:33] Speaker 04:
I did not.

[00:21:35] Speaker 02:
Let me see if I have that handy in there.

[00:21:40] Speaker 02:
I do not have it handy.

[00:21:41] Speaker 02:
I apologize.

[00:21:42] Speaker 02:
It is there, and it was in the appendix.

[00:21:50] Speaker 04:
No further questions?

[00:21:51] Speaker 04:
No.

[00:21:51] Speaker 04:
Thank you.

[00:22:06] Speaker 01:
Thank you, Your Honor.

[00:22:06] Speaker 01:
Since I have just a little bit of time here, one thing that's important to understand is that Netflix's counsel made this distinction between a rate and a limit.

[00:22:18] Speaker 01:
But the limit is also a rate.

[00:22:21] Speaker 01:
I mean, these are all bits per second, or megabits, or gigabits per second.

[00:22:26] Speaker 01:
So just because you're saying, well, this is determining, the term rate shows up with respect to, in some instances, like paragraph 19, for this upper limit, the limit is a rate.

[00:22:37] Speaker 01:
But the actual transmission rate, the initial rate that the,

[00:22:44] Speaker 01:
Bits go out of the server ad that is not going to be what the that's not the rate set by the upper limit That that's a boundary, but that is still a rate So just the actual transmission rate and the limit are still rates if that makes sense so just because this is Patrick uses the term rate and

[00:23:02] Speaker 01:
It doesn't mean that, it's not like the limit is some other unit of data and time.

[00:23:09] Speaker 01:
It's the same thing.

[00:23:10] Speaker 01:
So yes, Patrick does talk about, and I think that might be one of the things that contributed to the board's findings,

[00:23:16] Speaker 01:
is that it does use the term rate with respect to this upper limit.

[00:23:20] Speaker 01:
But that's the only determination that's made.

[00:23:22] Speaker 01:
And in fact, if that wasn't the case, then paragraph 39 would not have made any sense.

[00:23:26] Speaker 01:
Because that says you don't even know what the rate is until transmission has actually begun.

[00:23:32] Speaker 01:
And with respect to what goes into the factors, or what goes into this determination of the rate, I'm not sure that actually matters.

[00:23:41] Speaker 01:
Yes, paragraph 19 says that it's the appropriate rate for the accelerated streaming.

[00:23:46] Speaker 01:
Again, that's what Act 206 determines, right?

[00:23:51] Speaker 01:
Is based on bandwidth load of the server device, 146.

[00:23:54] Speaker 01:
That's exactly what it says.

[00:23:56] Speaker 01:
And there's other places where it talks about server load.

[00:23:58] Speaker 01:
Now, once that determination is made by server load, there are other things, as counsel had noted, other things that may adjust that.

[00:24:07] Speaker 01:
But at the end of the day, those are still just limits.

[00:24:09] Speaker 01:
That's not the actual transmission rate.

[00:24:11] Speaker 01:
There's not a determination of the initial transmission rate based on this real-time measurement between the server and the client.

[00:24:20] Speaker 01:
Thank you, Your Honor.

[00:24:20] Speaker 04:
Thank you.

[00:24:21] Speaker 04:
Thanks to both parties.

[00:24:22] Speaker 04:
Case is submitted.