[00:00:00] Speaker 02:
Our next case scheduled for argument today is N. Ray Caustic, appeal number 231437.

[00:00:08] Speaker 02:
Mr. Gregory, take your time, but when you're ready, we're ready.

[00:00:27] Speaker 00:
May it please the court, Sean Gregory of Taft, Stettini, and Hollister on behalf of the appellants, Mia Dragkostec and Guy Vandeveld.

[00:00:36] Speaker 00:
We have all heard the apparently intractable question, which comes first, the chicken or the egg?

[00:00:43] Speaker 00:
While a key question in this case sounds very similar, which comes first, validity or claim construction?

[00:00:50] Speaker 00:
This court has explicitly provided the guidance that the validity cart should not be placed before the claim construction horse.

[00:01:00] Speaker 00:
Yet, in the PTAB below, the PTAB did explicitly the opposite.

[00:01:06] Speaker 00:
They explicitly said, we can't construe this claim appropriately because of statutory constraints.

[00:01:16] Speaker 00:
In Pfizer, Inc.

[00:01:18] Speaker 00:
and Renbaxy Laboratories Limited,

[00:01:20] Speaker 00:
This court very clearly analyzed a very similar situation.

[00:01:28] Speaker 00:
There was a dependent claim.

[00:01:30] Speaker 00:
Yes, Your Honor.

[00:01:32] Speaker 01:
Do you intend that the relevant comparison for plotting the issue is what the patentee intended the original scope to be?

[00:01:40] Speaker 00:
So claim construction is all about what the patentee's intention is.

[00:01:46] Speaker 00:
Yes, Your Honor.

[00:01:47] Speaker 00:
The proper scope of dependent claim three is what the Patney intended, and if we look at the specification, the only scenario, the only written description support provided, or the clear written description support provided, is an alternative sale, an alternative direct exchange between parties that avoided or did not involve a trial.

[00:02:13] Speaker 01:
So how is the public supposed to understand what the intended original scope of the penalty was here?

[00:02:21] Speaker 00:
So the public is able to understand it the same way that the courts do, that the practitioners do.

[00:02:27] Speaker 00:
Reading the specification, understanding the clear language in the specification,

[00:02:32] Speaker 00:
and the clear language in the claims.

[00:02:34] Speaker 00:
The claim three, patented claim three, is very clear, a method according to claim one, wherein the intermediary website enables interested exchange partners to conduct a direct exchange of click-through traffic without a trial process.

[00:02:52] Speaker 00:
And that plain language says we have parties that are not, there's no antecedent basis, there's no reference back to claim one other than the preamble,

[00:03:02] Speaker 00:
So we have interested parties that want to perform a direct transaction without a trial.

[00:03:08] Speaker 00:
And in light of the specification, that direct transaction is an alternative to the trial-based transaction that is recited in Claim 1.

[00:03:20] Speaker 01:
Why wouldn't a claim that allows more than A or B fundamentally be broader than a claim that allows only a day?

[00:03:29] Speaker 00:
So according to the MPEP, according to the Patent Office, there are two distinct methods that, according to the MPEP, that is not a broader claim.

[00:03:44] Speaker 00:
It's simply a claim that recites additional steps.

[00:03:53] Speaker 02:
If we were to interpret the original claim to

[00:03:58] Speaker 02:
require just one of the two options, not be A or B, but to just be B, drawn to be alone.

[00:04:08] Speaker 02:
If we were to agree with that interpretation, you would have a problem, right?

[00:04:15] Speaker 02:
I mean, the claim that... Because I'm having a hard time understanding, as Judge Cunningham said, why a claim directed to A or B isn't broader than a claim just directed to B.

[00:04:28] Speaker 00:
So part of the issue is the analysis isn't a comparison of claim three, of proposed claim three to original claim one.

[00:04:39] Speaker 00:
The question is whether claim three as proposed, the new claim is the same as claim three as patented.

[00:04:48] Speaker 02:
Okay, but my question stands.

[00:04:50] Speaker 02:
What if I interpret original claim three to be directed to no testing period?

[00:04:59] Speaker 02:
And then claim three and the reissue is directed to a system that offers either a testing period or no testing period.

[00:05:09] Speaker 02:
Why isn't reissue claim three broader than original claim three?

[00:05:15] Speaker 00:
During the prosecution history, during re-exam,

[00:05:19] Speaker 00:
Appellants actually proposed what you're asking.

[00:05:22] Speaker 00:
The original claim amendments proposed was just that.

[00:05:29] Speaker 00:
Let's only do alternative B. And the examiner didn't like it.

[00:05:35] Speaker 00:
And so in order to please the examiner, the appellants then incorporated original claim one in the alternative.

[00:05:46] Speaker 00:
which also is further supported by the written description.

[00:05:51] Speaker 02:
So what I would say is... Do you want to point us to a place where that happened or show us in the plain claim language what you're talking about to make it so that original claim three can be interpreted as being a claiming either A or B?

[00:06:10] Speaker 02:
I mean, it seems to me that that seems to be your main argument.

[00:06:14] Speaker 02:
Is it original claim three is directed to alternative options?

[00:06:18] Speaker 00:
Yes, your honor.

[00:06:19] Speaker 00:
Yes, your honor.

[00:06:20] Speaker 00:
And the best way to show that is if we look at the proposed claim three under amendment during re-exam and look at how it's amended

[00:06:31] Speaker 02:
Is this reissue claim three?

[00:06:33] Speaker 00:
Yeah, if we look at reissue claim three.

[00:06:36] Speaker 02:
I don't think there's any dispute that reissue claim three is an A or B claim.

[00:06:43] Speaker 02:
The question is whether the original claims recite an A or B option.

[00:06:49] Speaker 00:
OK, and I apologize.

[00:06:51] Speaker 00:
I may have misunderstood your question there.

[00:06:54] Speaker 04:
Well, if you just look at the original claim in order to infringe,

[00:06:58] Speaker 04:
So if you look at the original claim, claim one, right, would require you to do the pre-bidding, right?

[00:07:07] Speaker 00:
Yes.

[00:07:07] Speaker 00:
Yes, sir.

[00:07:08] Speaker 04:
And then if you look at, if you were going to instead decide to charge somebody with violating claim three, right?

[00:07:15] Speaker 04:
Yes, sir.

[00:07:15] Speaker 04:
You would have to show both that they did a pre-bidding and that they did not do a pre-bidding.

[00:07:22] Speaker 00:
No, your honor.

[00:07:23] Speaker 00:
That's the proper, the plain language.

[00:07:26] Speaker 04:
Tell me, tell me, in order to prove

[00:07:28] Speaker 04:
infringement of Claim 3.

[00:07:31] Speaker 00:
Yes.

[00:07:32] Speaker 04:
What would the defendant have to do?

[00:07:35] Speaker 00:
In order for Claim 3, it's simply identify additional... Wait a second.

[00:07:42] Speaker 04:
A dependent claim, when it says the method according to Claim 1, that means you have to perform Claim 1 plus the new limitation.

[00:07:49] Speaker 04:
That's how you infringe Claim 3, right?

[00:07:53] Speaker 00:
Part of the problem is... Can you answer me?

[00:07:55] Speaker 00:
Yes or no?

[00:07:56] Speaker 00:
Yes, Your Honor.

[00:07:56] Speaker 04:
Okay, so in order to infringe claim three, you would have to show that they performed claim one, which was the pre-trial.

[00:08:04] Speaker 04:
Yes, Your Honor.

[00:08:05] Speaker 04:
Then you would have to go on and show they did claim three, which was that they didn't do that.

[00:08:09] Speaker 04:
They did it direct.

[00:08:12] Speaker 00:
Yes, Your Honor.

[00:08:13] Speaker 04:
And then, so that's the way it read.

[00:08:15] Speaker 04:
And you went in for reissue because you said, whoopsie-doo, there's an indefinite problem here.

[00:08:21] Speaker 04:
You weren't trying to argue when you went for your reissue that you didn't claim broadly enough, right?

[00:08:28] Speaker 00:
Yes, Your Honor.

[00:08:29] Speaker 04:
Your rationale, the patent officer, we got a little problem here because we've got food.

[00:08:34] Speaker 04:
Just like Judge Cleminger might say later on in an infringement case, what kind of a claim is this where you do one thing pre-trial and then you turn it around and you do it without pre-trial?

[00:08:45] Speaker 04:
What kind of sense does that make?

[00:08:47] Speaker 04:
So you say, we better clean this up.

[00:08:49] Speaker 04:
Correct, Your Honor.

[00:08:50] Speaker 04:
So we go in and say, well, we'll clean it up, we'll fix them, we'll just say they infringed if they did either one.

[00:08:56] Speaker 04:
And that is clearly broader than originally because originally you had to prove all this other stuff.

[00:09:03] Speaker 00:
So part of the problem... Why isn't it broader?

[00:09:07] Speaker 04:
Part of the problem is that... Why isn't it broader?

[00:09:11] Speaker 00:
Part of the problem is Patented Claim 3 also improperly mixes both the method claims and the structure of the Internet web server that enables this process.

[00:09:24] Speaker 00:
So one reading of Patented Claim 3 is... Wait, is there a new three?

[00:09:29] Speaker 00:
No.

[00:09:30] Speaker 00:
Patented Claim 3 reads a method according to Claim 1

[00:09:34] Speaker 00:
wherein the intermediary website enables.

[00:09:39] Speaker 00:
So there's a mix of method and structure claims here.

[00:09:45] Speaker 00:
Well, that may be a reason why you needed to get a new one, right?

[00:09:50] Speaker 01:
Yes, sure.

[00:09:50] Speaker 04:
There's some confusion of whether it was indefinite or whatever, but that doesn't undermine the question of whether or not the new claim is broader than the old claim.

[00:10:00] Speaker 00:
So again,

[00:10:03] Speaker 00:
the original claim would only, you would have to, the infringer would have to meet the method of independent claim one, which is the trial, or in the dependent claim, the infringer, we could assert only dependent claim three

[00:10:30] Speaker 00:
as a structure, as an independent web server that enables a non-trial direct transaction.

[00:10:39] Speaker 04:
But still, what is that?

[00:10:41] Speaker 04:
Now we're just talking about whoever it was that drafted original claim one with claim three dependent from it wasn't thinking clearly because of these problems, which isn't my problem, isn't your problem now either.

[00:10:56] Speaker 04:
Your problem now is whether or not you're a fix of that

[00:11:00] Speaker 04:
gave your client a broader right to exclude than your client had before.

[00:11:05] Speaker 00:
So as it's redrafted in an independent form, the reexamined claim is now we can say we could only sue the same parties of independent claim one with a trial process

[00:11:22] Speaker 00:
or the same party for the non-trial process under that dependent claim, what was originally patented, claim three.

[00:11:32] Speaker 00:
So it's been rewritten in independent form.

[00:11:35] Speaker 00:
We've taken that patented claim three, which requires, as you're pointing out, Your Honor, both the trial process of claim one and the dependent, the non-trial process of patented claim three,

[00:11:50] Speaker 00:
And we've rewritten it in independent form to say, we now can sue those same two parties, either under independent original patent claim one or original patent claim three.

[00:12:04] Speaker 01:
Council, just wanted to make sure our comments engage in terms of the issue before us.

[00:12:08] Speaker 01:
Do you agree the issue is whether the board erred in finding that reissue claim three is an improper broadening reissue?

[00:12:16] Speaker 00:
Yes, Your Honor.

[00:12:18] Speaker 00:
Yes, Your Honor.

[00:12:22] Speaker 02:
Do you have more to add?

[00:12:23] Speaker 02:
You're in your abuttle time.

[00:12:24] Speaker 00:
Yes.

[00:12:24] Speaker 02:
I just want to make sure you know that.

[00:12:26] Speaker 00:
No.

[00:12:26] Speaker 00:
At this point, I'd like to preserve my time.

[00:12:28] Speaker 02:
OK.

[00:12:29] Speaker 02:
Let's hear from the government.

[00:12:35] Speaker 02:
Mr. Foreman, thank you.

[00:12:37] Speaker 03:
When you're ready.

[00:12:39] Speaker 03:
Thank you, and may it please the court.

[00:12:40] Speaker 03:
I'd like to start with this idea of intended scope that Judge Cunningham had asked about.

[00:12:46] Speaker 03:
In a typical claim construction analysis, you are looking for the intended scope of the claim, but you're doing that by looking at the claim language, looking at the specification, looking at the prosecution history.

[00:12:59] Speaker 03:
What appellants are saying with intended scope is, well, we messed up drafting claim three,

[00:13:07] Speaker 03:
But we really meant to say the method with A or B. Those two things are completely different.

[00:13:14] Speaker 02:
Is there any way to read claim three to be that way?

[00:13:17] Speaker 02:
I mean, original dependent claim three.

[00:13:19] Speaker 02:
Can that be read to mean A or B?

[00:13:22] Speaker 02:
No.

[00:13:24] Speaker 02:
I don't see how you get that.

[00:13:25] Speaker 02:
I mean, they... What is your best argument for why not?

[00:13:30] Speaker 02:
Is it based on the plain claim language?

[00:13:32] Speaker 03:
Yes, the plain claim language says,

[00:13:34] Speaker 03:
You know, the original claim one says a method using a trial process, and then the dependent claim says the method of claim one, yeah, not using a direct exchange.

[00:13:46] Speaker 03:
So I don't see how you get alternatives out of that.

[00:13:51] Speaker 03:
It's either you're doing it in claim one, and then you're not doing it in claim three.

[00:13:57] Speaker 03:
You can't, as appellants have noted, you can't... So it's claim three that you're both doing it and not doing it?

[00:14:04] Speaker 02:
Yes.

[00:14:04] Speaker 02:
Even though that seems like an impossibility.

[00:14:06] Speaker 03:
Yes, and that's the problem here.

[00:14:08] Speaker 03:
And that's why they filed the reissue application because they realized that there's this inconsistency there.

[00:14:18] Speaker 03:
their fix, unfortunately, broadens the original claims.

[00:14:23] Speaker 03:
And had they done that within the two-year period, statutory period, we wouldn't be here.

[00:14:29] Speaker 03:
But that didn't happen.

[00:14:30] Speaker 02:
What about the prosecution history that counsel referred to, some sort of prosecution history that showed that it was their intent to claim it in the alternative?

[00:14:42] Speaker 03:
I don't think you can get away from the plain language of the claims.

[00:14:46] Speaker 03:
You can't get past the plain language of the

[00:14:48] Speaker 03:
the plain language of the claims in this case.

[00:14:51] Speaker 03:
Both sides agree that the plain language of patent claim three does not recite alternatives and really does not make any sense.

[00:15:01] Speaker 04:
So once we're there, you can't... If a claim clearly says A and the specification clearly says B, then what's the status of the patent?

[00:15:12] Speaker 03:
Well, then, I mean, I think you would have potentially a written description issue or enablement issue if you're claiming something that has nothing to do with what's described in the specification.

[00:15:23] Speaker 04:
Do we know anything about the state of the prior art when the claim, the issued claim was filed when claim one and claim three were first put in the patent?

[00:15:36] Speaker 04:
Is that of record?

[00:15:37] Speaker 03:
No, I mean, other than the one, the beta reference, which is relied on for the obviousness rejection of reissue claim three.

[00:15:44] Speaker 04:
And the beta reference taught doing this stuff with a direct exchange?

[00:15:52] Speaker 03:
Well, the beta reference has the idea of where you have a database of advertisements that can be posted on the website.

[00:16:01] Speaker 03:
And the website selects a specific advertisement based on some criteria.

[00:16:07] Speaker 03:
They're listed in the reference.

[00:16:10] Speaker 03:
And so implied in that there's a transaction going on where the people providing the advertisements and the websites hosting the advertisements.

[00:16:21] Speaker 04:
So that's really... And the argument was one who's still in the art would have understood that.

[00:16:27] Speaker 04:
to have resulted at least in a direct exchange?

[00:16:29] Speaker 03:
Correct, and the direct exchange claim still would require a bidding process, so basically an auction-style sale.

[00:16:37] Speaker 03:
Beta does not disclose an auction-style sale, but the examiner and the board found that would have been obvious to one of ordinary skill, that a sale can be done via an auction.

[00:16:56] Speaker 04:
What I was trying to get, it just kind of looked to me like claim one was what the invention was really all about in the beginning, which was to have this pre-process material.

[00:17:06] Speaker 04:
And that was what was innovating.

[00:17:08] Speaker 04:
And that claim three just dropped in, oh, well, by the way, let's also take a shot at the prior art.

[00:17:15] Speaker 03:
I agree, I think that what they're trying to get at with this patent is the idea of doing the pre-bidding trial so that the parties have more information to make a better decision in terms of the offer and acceptance of sale.

[00:17:35] Speaker 02:
There's nothing further.

[00:17:36] Speaker 02:
Other questions?

[00:17:39] Speaker 02:
Judge Croningham?

[00:17:40] Speaker 02:
Okay.

[00:17:40] Speaker 02:
Thank you.

[00:17:40] Speaker 02:
All right, thank you, Council.

[00:17:45] Speaker 02:
Mr. Gregory, you have a little over three minutes in rebuttal time.

[00:17:48] Speaker 00:
Yes, Your Honor.

[00:17:50] Speaker 00:
So I'd like to turn to the specification.

[00:17:52] Speaker 00:
If we look at column 11, this is appendix 34, column 11 starting at line 26.

[00:18:01] Speaker 00:
And yes, just to reiterate, I would

[00:18:04] Speaker 00:
say that a key part of the invention here is the trial process.

[00:18:09] Speaker 00:
Most of the specification is directed to that.

[00:18:12] Speaker 00:
And yet here we have a very explicit, as an alternative to trial bidding with a number of interested buyers, a seller can conduct a sale process without trial or bidding with one chosen buyer and conduct a negotiation directly, manually, with the buyer.

[00:18:31] Speaker 00:
In type 9, the seller initiates a direct sale.

[00:18:34] Speaker 00:
ClickBroker sets up the direct sale process.

[00:18:37] Speaker 00:
The focus of transaction is again at ClickBroker and the data type ID, and it goes on to talk more about that direct sale.

[00:18:46] Speaker 00:
This is the only support, only written support for patented claim 3 in the specification.

[00:18:54] Speaker 00:
It's the only written support for

[00:18:57] Speaker 00:
It's the only interpretation that is supported by the specification that these direct sales are performed as an alternative to a direct, as an alternative to the trial process.

[00:19:11] Speaker 00:
And so the only, the only proper claim construction of patented claim three

[00:19:20] Speaker 00:
is that this direct sale without a trial process that's recited is an alternative to independent claim one.

[00:19:28] Speaker 02:
But doesn't our case law say that we're supposed to look at what the language of the claim says, and we can refer to the specification to change that ordinary meaning of those words only if someone's a lexicographer or there's a disclaimer?

[00:19:46] Speaker 02:
And this is just disclosing an embodiment.

[00:19:48] Speaker 02:
What do you think your best argument is in terms of we don't usually use the specification to fix the claim claim?

[00:19:55] Speaker 00:
Understood.

[00:19:55] Speaker 00:
And yet, in this particular case,

[00:19:58] Speaker 00:
While the claim language is fairly clear, there is clear ambiguity because of that mix between a method and a structure that is introduced by that website enabling language.

[00:20:12] Speaker 00:
And so in order to resolve that ambiguity, we need to look back to the specification to understand what that clear lexicography is, what the clear intent is for that claim language.

[00:20:27] Speaker 01:
You're not saying that there's lexicography here though, right?

[00:20:33] Speaker 00:
I used lexicography because that was Judge Stoll's question.

[00:20:37] Speaker 00:
I don't know that there is lexicography per se.

[00:20:40] Speaker 00:
We're not trying to redefine a meaning.

[00:20:43] Speaker 00:
But the original patent drafter introduced ambiguity.

[00:20:48] Speaker 00:
And it's that ambiguity that allows us to look back to the specification to understand where the clarity is.

[00:20:55] Speaker 04:
So your right to exclude for 20 years should be based on an ambiguity.

[00:21:02] Speaker 04:
That doesn't make much sense, does it?

[00:21:04] Speaker 00:
So again, that's the problem, though, because... That problem didn't get created by the patent law.

[00:21:11] Speaker 04:
No, the problem got created by the way somebody drafted claim three.

[00:21:16] Speaker 00:
Absolutely, and that's the whole intent of free examination is to correct those drafting errors that were introduced initially

[00:21:25] Speaker 00:
in order to resolve that ambiguity.

[00:21:32] Speaker 02:
Any questions?

[00:21:33] Speaker 02:
Any questions Judge Cunningham?

[00:21:34] Speaker 02:
Okay.

[00:21:35] Speaker 02:
Thank you very much.

[00:21:36] Speaker 02:
Thank you Your Honor.

[00:21:37] Speaker 02:
We thank counsel for their argument.

[00:21:39] Speaker 02:
The case is submitted.