United States Court of Appeals for the Federal Circuit

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1 Case: Document: 38 Page: 1 Filed: 09/26/ United States Court of Appeals for the Federal Circuit SPHERIX INCORPORATED, Appellant, v. UNIDEN AMERICA CORPORATION, Appellee. Appeal from the United States Patent and Trademark Office, Patent Trial and Appeal Board, in Case No. IPR REPLY BRIEF OF APPELLANT SPHERIX INCORPORATED GREGORY GONSALVES GONSALVES LAW FIRM 2216 Beacon Lane Falls Church, Virginia gonsalves@gonsalveslawfirm.com G. DONALD PUCKETT NELSON BUMGARDNER PC 3131 West 7th Street, Suite 300 Fort Worth, TX puckett@nelbum.com Counsel for Appellant Spherix Incorporated September 26, 2016 COUNSEL PRESS, LLC (888)

2 Case: Document: 38 Page: 2 Filed: 09/26/2016 CERTIFICATE OF INTEREST Pursuant to Federal Circuit Rule 47.4, counsel for Appellant Spherix Incorporated, certifies as follows: 1. The full name of every party represented by me is: Spherix Incorporated 2. The name of the real party in interest represented by me is: Not applicable 3. All parent corporations and any publicly held companies that own 10 percent or more of the stock of the party represented by me are: Not applicable. 4. The names of all law firms and the partners or associates that appeared for the party now represented by me in the trial court or agency or are expected to appear in this court are: Gonsalves Law Firm: Gregory J. Gonsalves Nelson Bumgardner: G. Donald Puckett Ascenda Law Group, PC: Tarek N. Fahmi ii

3 Case: Document: 38 Page: 3 Filed: 09/26/2016 Skiermont Puckett, LLP: Dated: September 26, Steven W. Hartsell Respectfully submitted, /s/ Gregory J. Gonsalves GREGORY J. GONSALVES GREGORY J. GONSALVES GONSALVES LAW FIRM 2216 Beacon Lane Falls Church, VA gonsalves@gonsalveslawfirm.com G. DONALD PUCKETT NELSON BUMGARDNER, PC 3131 West 7th Street, Suite 300 Fort Worth, TX puckett@nelbum.com Counsel for Appellant Spherix Incorporated iii

4 Case: Document: 38 Page: 4 Filed: 09/26/2016 TABLE OF CONTENTS CERTIFICATE OF INTEREST... ii TABLE OF CONTENTS... iv TABLE OF AUTHORITIES... vii TABLE OF ABBREVIATIONS... ix I PETITIONER IMPROPERLY ATTEMPTS TO SHIFT ITS BURDEN TO DEMONSTRATE OBVIOUSNESS... 1 A. PETITIONER HAS THE BURDEN OF SETTING FORTH A PRIMA FACIE CASE OF OBVIOUSNESS B. THE PARTIES DID NOT AGREE AND COULD NOT HAVE AGREED ON A CLAIM CONSTRUCTION II THE BOARD DID NOT COMPLY WITH THE APA S NOTICE REQUIREMENT... 5 A. THE BOARD VIOLATED THE APA S NOTICE REQUIREMENT BY SETTING FORTH TWO DIFFERENT CLAIM CONSTRUCTIONS... 5 B. THE BOARD CANNOT CHANGE ITS CLAIM CONSTRUCTION ON APPEAL WITHOUT VIOLATING THE APA S NOTICE PROVISION C. THE PATENT OWNER COULD NOT HAVE POSSIBLY PROVIDED A RESPONSE TO A MEANS PLUS FUNCTION ANALYSIS BECAUSE IT WAS NOT PROVIDED BEFORE THE BOARD S FINAL WRITTEN DECISION... 9 III THE BOARD S DETERMINATIONS THAT THE FIRST AND SECOND PROCESSOR MEANS ARE OBVIOUS ARE NOT SUPPORTED BY SUBSTANTIAL EVIDENCE iv

5 Case: Document: 38 Page: 5 Filed: 09/26/2016 A. AN OBVIOUSNESS CONCLUSION OF A MEANS PLUS FUNCTION LIMITATION REQUIRES A SHOWING THAT THE CORRESPONDING STRUCTURE OR EQUIVALENTS THEREOF ARE TAUGHT BY THE PRIOR ART B. PETITIONER S ARGUMENT REGARDING THE CLAIMED FIRST AND SECOND PROCESSOR MEANS IN ITS REPLY WAS NEW AND IMPROPER C. PETITIONER S REPLY AND THE BOARD S FINAL WRITTEN DECISION DO NOT ADDRESS ALL OF THE COMPONENTS IN THE CORRESPONDING STRUCTURES OF THE FIRST AND SECOND PROCESSOR MEANS IV THE BOARD S CLAIM CONSTRUCTION OF CONCURRENTLY TRANSMITTING THE ALPHANUMERIC DATA [WHICH HAD BEEN GENERATED FROM SELECTED ONE OF KEY OPERATIONS AT THE HANDSET] IS ERRONEOUS A. THE BOARD ERRED IN CONSTRUING THE CLAIMS TO ENCOMPASS THE TRANSMISSION OF ANY ALPHANUMERIC DATA RATHER THAN THE CONCURRENT TRANSMISSION OF ALPHANUMERIC DATA GENERATED FROM SELECTED ONE OF KEY OPERATIONS AT THE HANDSET B. THE BOARD SHOULD USE THE SAME CLAIM CONSTRUCTION PRINCIPLES FOR EXPIRED PATENTS AS THOSE THAT ARE USED AT THE DISTRICT COURT V THE BOARD S FLAWED CLAIM CONSTRUCTION REQUIRES REVERSAL OF ITS OBVIOUSNESS RULING A. THE BOARD S CONCLUSION THAT THE PRIOR ART TEACHES CONCURRENTLY TRANSMITTING THE ALPHANUMERIC DATA [THAT HAD BEEN PREVIOUSLY GENERATED FROM SELECTED ONES OF KEYSTROKE OPERATIONS AT THE HANDSET] IS BASED ON AN ERRONEOUS CLAIM CONSTRUCTION v

6 Case: Document: 38 Page: 6 Filed: 09/26/2016 B. THE PETITIONER S NEW ARGUMENT INTRODUCED FOR THE FIRST TIME IN THIS APPEAL DOES NOT SHOW THAT THE PRIOR ART TEACHES CONCURRENTLY TRANSMITTING THE ALPHANUMERIC DATA [THAT HAD BEEN PREVIOUSLY GENERATED FROM SELECTED ONES OF KEYSTROKE OPERATIONS AT THE HANDSET] C. THE BOARD S RULING THAT ONE OF ORDINARY SKILL WOULD HAVE COMBINED FIGA WITH MARTENSSON TO ACHIEVE THE CLAIMED INVENTION IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE CONCLUSION CERTIFICATE OF SERVICE CERTIFICATE OF COMPLIANCE vi

7 Case: Document: 38 Page: 7 Filed: 09/26/2016 TABLE OF AUTHORITIES Cases BAE Sys. Info. and Elec. Sys. Integration, Inc. v. Cheetah Omni, LLC IPR , Final Written Decision, Paper 45 (P.T.A.B. June 19, 2014) Ball Aerosol & Specialty Container, Inc. v. Limited Brands, Inc., 555 F.3d 984, 993 (Fed. Cir. 2009) Corning Inc. v. DSM IP Assets B.V. IPR , Final Written Decision Paper 84 (P.T.A.B. May 1, 2014) Dynamic Drinkwares, LLC v. Nat l Graphics Inc., 800 F.3d 1375, (Fed. Cir. 2015)... 1 Fieldcomm Group v. SIPCO, LLC, IPR , Decision Denying Institution Paper 13 (P.T.A.B. August 11, 2015)... 7 Genzyme Therapeutic Products Ltd. Partnership v. Biomarin Pharmaceutical Inc U.S. App LEXIS (June 14, 2016)... 7, 12 In Re: Magnum Oil Tools Intl., Ltd., 2016 WL , (Fed. Cir. July 25, 2016)... 2, 3 Medtronic, Inc. v. Advanced Cardiovascular Sys., Inc. 248 F.3d 1303 (Fed. Cir. 2001) On Demand Mach. Corp. v. Ingram Indus., Inc. 442 F.3d 1331 (Fed. Cir. 2006) Personalized Media Communs., L.L.C. v. ITC 161 F.3d 696 (Fed. Cir. 1998)... 5 Rodale Press, Inc. v. FTC 407 F.2d 1252 (D.C. Cir. 1968)... 5 vii

8 Case: Document: 38 Page: 8 Filed: 09/26/2016 Scotts Company LLC v. Encap, LLC IPR , Paper 79 (PTAB June 29, 2014) Toyota Motor Corp. v. Am. Vehicular Sciences LLC IPR , Paper 50 (PTAB Jan. 12, 2015) Statutes & Rules 35 U.S.C , 5, 6, 7 35 U.S.C. 316(e)... 1, C.F.R (b) viii

9 Case: Document: 38 Page: 9 Filed: 09/26/2016 TABLE OF ABBREVIATIONS Parties Appellant or Patent Owner Spherix Incorporated Appellee, Petitioner, or Uniden Uniden America Corporation Citations Appx MPEP Appellant s Opening Brief Appellee s Brief Joint Appendix at page(s) Manual of Patent Examining Procedure Opening Brief Of Appellant Spherix Incorporated Responsive Brief Of Defendant-Appellee Uniden America Corporation Terms 599 Patent United States Patent No. 5,581,599 AIA Martensson Board IPR PTAB America Invents Act United States Patent No. 6,349,212 B1 Patent Trial and Appeal Board Inter Partes Review Patent Trial and Appeal Board Figa United States Patent 4,924,496 ix

10 Case: Document: 38 Page: 10 Filed: 09/26/2016 I. PETITIONER IMPROPERLY ATTEMPTS TO SHIFT ITS BURDEN TO DEMONSTRATE OBVIOUSNESS. A. PETITIONER HAS THE BURDEN OF SETTING FORTH A PRIMA FACIE CASE OF OBVIOUSNESS. Petitioner s argument that this Court should excuse its failure to include a means plus function analysis for the claimed first and second processor means with its Petitioner (Appellee s Brief, pp and 26-29) should be rejected. Petitioner s arguments are based entirely on a misreading of the law and lack factual support. In an inter partes review, the petitioner shall have the burden of proving a proposition of unpatentability by a preponderance of the evidence. 35 U.S.C. 316(e). [T]here are two distinct burdens of proof: a burden of persuasion and a burden of production. Dynamic Drinkwares, LLC v. Nat l Graphics Inc., 800 F.3d 1375, 1378 (Fed. Cir. 2015) (citing Tech. Licensing Corp v. Videotek Inc., 545 F.3d 1316, (Fed. Cir. 2008)). The burden of persuasion in an inter partes review is on the petitioner to provide unpatentability by a preponderance of the evidence, 35 USC 316(e) and that burden never shifts to the patentee. Dynamic Drinkwares, LLC v. Nat l Graphics Inc., 800 F.3d at The burden of production may entail producing additional evidence and presenting persuasive argument based on new evidence or evidence already of record. Id. (citing Tech. Licensing Corp, 545 F.3d at 1327). The Federal Circuit has recently ruled that neither burden can be shifted to the patentee after institution [of an inter partes review] to prove that the patent is 1

11 Case: Document: 38 Page: 11 Filed: 09/26/2016 patentable. In Re: Magnum Oil Tools Intl., Ltd., 2016 WL at * 7, (Fed. Cir. July 25, 2016). Indeed, the petitioner continues to bear the burden of proving unpatentability after institution and must do so by a preponderance of the evidence at trial. Id. (citations omitted). For example, in Magnum, the petitioner failed to explain in its petition why an artisan would have been motivated to combine the prior art references. Id. The Board then required the patent owner to rebut the petitioner s assertion that a skilled artisan would have been motivated to combine the prior art reference, without first requiring [the petitioner] to provide evidence to support its assertion. Id. at * 8. The Federal Circuit reversed the Board and held that the Board improperly shifted the burden to the patentee. Id. Like the petitioner s arguments in Magnum, Petitioner Uniden s arguments that it was not required to set forth any means plus function analysis are also without merit. Like the petitioner in Magnum, Uniden failed to set forth a prima facie case of obviousness by not providing any means plus function analysis for either the first or second processor means. Appx Petitioner merely recited the claim language for the first and second processor means in one column of a claim chart and provided quotations from one reference (i.e., Martensson) in the other column of the chart. Id. The Board then required the Patent Owner to show why the corresponding structures of the first and second processor means were not known in 2

12 Case: Document: 38 Page: 12 Filed: 09/26/2016 the art, without first requiring the Petitioner to show that the corresponding structures were known. Appx39. This attempt by the Petitioner and the Board to shift the burden to demonstrate a prima facie case of obviousness for the first and second processor means is not permitted by the Federal Circuit. In Re: Magnum Oil Tools Intl., Ltd., 2016 WL at *8. For this reason alone, the Board s ruling should be reversed. B. THE PARTIES DID NOT AGREE AND COULD NOT HAVE AGREED ON A CLAIM CONSTRUCTION. Petitioner also argues that its failure to provide any means plus function analysis should be excused because the parties agreed upon the claim constructions to be applied by the Board. Appellee s Brief, p. 8. But this argument is also based entirely on a misreading of the law and lacks factual support. First, Petitioner does not cite to any stipulation of an agreement between the parties on the construction of the first and second processor means. See id. pp Second, Petitioner Uniden did not tell this Court that prior to filing its IPR petition against the 599 patent, it told the District Court in a claim construction brief in a litigation involving the same 599 patent that the claimed first and second processor means should be construed as means plus function limitations. Appx Petitioner Uniden also neglected to tell this Court that after filing its IPR petition, it again told the District Court during oral argument for the same litigation that the first and second processor means should be construed as means plus function limitations. Appx

13 Case: Document: 38 Page: 13 Filed: 09/26/2016 Thus, Petitioner did, in fact, believe that the first and second processor means were means plus function limitations and nonetheless, neglected to include any 112(6) analysis for these limitations in its Petition. Moreover, there was clearly no agreement among the parties on claim construction before the Board because the Petitioner told the District Court both before and after filing its IPR petition that the processor means were means plus function limitations. Appx , Appx Indeed, Petitioner sought a means plus function construction at the District Court to make it more difficult for the Patent Owner to establish infringement and sought a broader, non-means plus function construction before the Board to make it easier to demonstrate obviousness. Third, even if the parties had reached a claim construction agreement which they clearly did not there is no legal authority to support Petitioner s contentions that the Board should accept an improper claim construction. Rather, the legal authority indicates that the use of the term means in the first and second processor means limitations triggers a presumption that the inventor used this term advisedly to invoke the statutory mandates for means-plus-function clauses. York Prods. v. Central Tractor Farm & Family Ctr., 99 F.3d 1568, 1574 (Fed. Cir. 1996). Moreover, the presumption also applies to method claims because they often recite the physical structures of a system in which the claimed method is practiced. Microprocessor Enhancement Corp. v. Tex. Instruments, Inc., 520 F.3d 1367,

14 Case: Document: 38 Page: 14 Filed: 09/26/2016 (Fed. Cir. 2008). Indeed, this Court has ruled that this presumption applies regardless of whether the claim discloses an apparatus or method. See, e.g., On Demand Mach. Corp. v. Ingram Indus., Inc., 442 F.3d 1331, 1336, (Fed. Cir. 2006). The presumption cannot be rebutted for the first and second processor means limitations because neither limitation recites sufficiently definite structure to avoid the ambit of 112, P 6. Personalized Media Communs., L.L.C. v. ITC, 161 F.3d 696, 704 (Fed. Cir. 1998). Neither limitation, for example, recites the structure that performs the recited function such as a processor, a modem, a keypad or memory. That is, the legal authority requires the Board to construe the first and second processor means under 112(6) regardless of Petitioner s alleged agreement. In addition, irrespective of what the law allows or requires the Board in fact did not adopt this so-called agreed construction. Appx II. THE BOARD DID NOT COMPLY WITH THE APA S NOTICE REQUIREMENT. A. THE BOARD VIOLATED THE APA S NOTICE REQUIREMENT BY SETTING FORTH TWO DIFFERENT CLAIM CONSTRUCTIONS. There is ample legal support for the proposition that the Board may not change its claim construction from one that first interprets a limitation as being not subject to 112(6) and later in a final written decision, interprets the same limitation as being subject to 112(6). Belden v. Birk-Tek, LLC, 805 F.3d 1064, 1080 (Fed. Cir. 2015) (quoting Rodale Press, Inc. v. FTC, 407 F.2d 1252, (D.C. Cir. 1968)); SAS Institute, Inc., 2016 WL at *7 (Fed. Cir. June 10, 2016) (vacating a 5

15 Case: Document: 38 Page: 15 Filed: 09/26/2016 patentability determination by the Board in holding that the Board cannot adopt a new claim construction in a final written decision without giving the parties an opportunity to address that new construction). For example, in SAS Institute, the Board set forth one claim construction in its institution decision and set forth a different claim construction in its final written decision. Id. In addition, the Board in SAS Institute attempted to excuse its claim construction change by stating that the new construction did not prejudice SAS because SAS could have made construction arguments for the term in its IPR petition. Id. at *6. Nonetheless, the Federal Circuit vacated the Board s final decision for not complying with the APA s notice provision because the Board change[d] theories in midstream. Id. at *7 (citations omitted). Just as the Board had done in SAS Institute, the Board here changed theories in midstream by initially leading the parties to believe that the first and second processor means were not subject to 112(6) and later, indicating otherwise by including a 112(6) construction and analysis in its final written decision. Appx19. In particular, the Board initially indicated that the first and second processor means should not be construed as means plus function limitations by instituting the proceeding even though the Petitioner had not set forth any means plus function 6

16 Case: Document: 38 Page: 16 Filed: 09/26/2016 analysis in its Petition. See Appx At the end of the IPR proceeding, the Board led the parties to believe that is was construing the first and second processor means under 112(6) by introducing in its Final Written Decision for the very first time a means plus function analysis. Appx639. Because the Board in this IPR proceeding changed claim construction theories midstream without giving the Patent Owner the chance to respond to the new theory, just as it did in SAS Institute, this Court should vacate the Board s ruling in this IPR, just as it did in SAS Institute. Petitioner cites to no legal authority to contravene the basic principle that the Board may not change its theory midstream from a non means plus function analysis to a means plus function analysis. Genzyme, the case relied upon by the Petitioner, supports only the unremarkable proposition that the Board may consider a prior art reference to show the state of the art at the time of the invention, regardless of whether that reference was cited in the Board s institution decision. Genzyme Therapeutic Prods L.P. v. Biomarin Pharm. Inc., 2016 U.S. App. LEXIS 10711, at 1 The Board does not institute proposed grounds against claims containing a means plus function limitation unless the Petition provides a proper means plus function analysis. See e.g., Fieldcomm Group v. SIPCO, LLC, IPR , Decision Denying Institution, Paper 13 at 11 (P.T.A.B. August 11, 2015) ( Petitioner did not provide the proper analysis for any of the means-plus-function limitations. That is, the Petitioner did not identify the specific portions of the specification that describe the structure, material, or acts corresponding to each claimed function, let alone show how the prior art teaches such structure. 37 C.F.R (b)(3) (4). ). 7

17 Case: Document: 38 Page: 17 Filed: 09/26/2016 *19 (Fed. Cir. June 14, 2016). Neither Genzyme nor any of the other cases cited by Petitioner support the notion that the Board can change its claim construction theory midstream without violating the APA s notice provision. B. THE BOARD CANNOT CHANGE ITS CLAIM CONSTRUCTION ON APPEAL WITHOUT VIOLATING THE APA S NOTICE PROVISION. The Petitioner also argued that the Board has not adopted the District Court s means plus function claim construction. Appellee s Brief, pp According to the Petitioner, therefore, the Board maintained its initial view that the first and second processor means are not means plus function limitations in its final decision. Id. The Petitioner does not explain, however, how the Final Written Decision could possibly be interpreted in this manner given that it included not only a means plus function claim construction but also a comparison of the prior art to the means plus function construction. Regardless, under Petitioner s interpretation of the Board s final claim construction, the Board did not comply with the APA s notice requirement. Because SAS Institute prohibits the Board from changing its claim construction position at the end of an IPR proceeding, it certainly would prohibit the Board from changing its position in this appeal. Moreover, Petitioner did not provide any response to the reasons set forth in the Patent Owner s Opening Brief and the District Court s claim construction ruling as to why the first and second processor means should be construed as means plus function limitations. See e.g., Appellee s Brief, pp Petitioner did not make 8

18 Case: Document: 38 Page: 18 Filed: 09/26/2016 any attempt to argue that the first and second processor means are not means plus function limitations. Id. For these additional reasons, the Board s decision should be vacated. C. THE PATENT OWNER COULD NOT HAVE POSSIBLY PROVIDED A RESPONSE TO A MEANS PLUS FUNCTION ANALYSIS BECAUSE IT WAS NOT PROVIDED BEFORE THE BOARD S FINAL WRITTEN DECISION. Petitioner s argument that the Board complied with the APA s notice provision merely because the Patent Owner discussed the means-plus-function issues during the hearing (Appellee s Brief, p. 26) is based on a misreading of the law and lacks factual support. Petitioner had not provided a proper means plus function analysis prior to the hearing, as it was required to do because it has the burden of setting forth a prima facie case of obviousness. Supra, I. And the Board made no mention of any means plus function analysis in its Institution Decision. Appx Indeed, a means plus function analysis was not presented in this IPR proceeding until the Board issued its Final Written Decision. Appx19, Appx If the Petition had included a means plus function analysis in the Petition, like the one in the Board s Final Written Decision, the Patent Owner would have had the opportunity to identify the deficiencies in that analysis, as it has done before this Court. The Patent Owner could not have possibly provided any response to a means plus function analysis in the Patent Owner Response because the means plus function 9

19 Case: Document: 38 Page: 19 Filed: 09/26/2016 analysis was not provided until well after the due date for that Response. For all these reasons and those set forth in the Patent Owner s Opening Brief, the Board violated the APA s notice requirement. Its decision should therefore be vacated on this basis alone. III. THE BOARD S DETERMINATIONS THAT THE FIRST AND SECOND PROCESSOR MEANS ARE OBVIOUS ARE NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. A. AN OBVIOUSNESS CONCLUSION OF A MEANS PLUS FUNCTION LIMITATION REQUIRES A SHOWING THAT THE CORRESPONDING STRUCTURE OR EQUIVALENTS THEREOF ARE TAUGHT BY THE PRIOR ART. There is ample legal support for the proposition that a petitioner must demonstrate that the corresponding structure or its equivalents are taught by the prior art to establish obviousness of a means plus function limitation. The first step in construing a [means plus function] limitation is a determination of the function of the means plus function limitation. Medtronic, Inc. v. Advanced Cardiovascular Sys., Inc., 248 F.3d 1303, 1311 (Fed. Cir. 2001). Once a court has determined the limitation s function, the next step is to determine the corresponding structure disclosed in the specification and equivalents thereof. Id. None of the cases cited by Petitioner indicate that the standard obviousness analysis for means plus function claim limitations can be bypassed or omitted. See e.g., KSR Int l Co v. Teleflex, Inc., 550 U.S. 398, 417 (2007); PerfectWeb Techs., Inc. V. Info USA, Inc., 587 F.3d 1324, 1328 (Fed. Cir. 2008); Sciele Pharma Inc. v. 10

20 Case: Document: 38 Page: 20 Filed: 09/26/2016 Luper Ltd., 684 F.3d 1253, 1259 (Fed. Cir. 2012). Neither the Board nor the Petitioner performed the proper obviousness analysis for the first and second processor means because neither showed that the components of the corresponding structure or their equivalents would have been obvious, let alone show that their arrangement within the particular structure disclosed by the 599 patent would have been obvious. Appellant s Opening Brief, II. B. PETITIONER S ARGUMENT REGARDING THE CLAIMED FIRST AND SECOND PROCESSOR MEANS IN ITS REPLY WAS NEW AND IMPROPER. There is ample legal authority to support the proposition that a petitioner may not rely on new evidence set forth belatedly in a Reply to make up for a complete omission of any means plus function analysis from its Petition. See, e.g., Scotts Company LLC v. Encap, LLC, IPR , Final Written Decision, Paper 79 at 5-6 (P.T.A.B. June 29, 2014) ( Specifically, we hold that the new evidence could have been included with the motion. ); BAE Sys. Info. and Elec. Sys. Integration, Inc. v. Cheetah Omni, LLC, IPR , Final Written Decision, Paper 45 at 15 (P.T.A.B. June 19, 2014) ( Although BAE cited Figure 20 in its Petition, it did not develop this particular argument in its Petition. ); Ariosa Diagnostics v. Verinata Health, Inc., IPR , Final Written Decision, Paper 43 at 19 (P.T.A.B. Oct. 23, 2014) ( Petitioner [fails to] explain[] why Exhibit 1010 could not have been presented as part of the asserted ground of unpatentability in the first instance with 11

21 Case: Document: 38 Page: 21 Filed: 09/26/2016 the petition. ); Toyota Motor Corp. v. Am. Vehicular Sciences LLC, IPR , Final Written Decision, Paper 50 at 21 (P.T.A.B. Jan. 12, 2015) ( Toyota cannot rely belatedly on this evidence in its Reply and Reply Declaration to make up for the deficiencies in its Petition. ); Corning Inc. v. DSM IP Assets B.V., IPR , Final Written Decision, Paper 84 at (P.T.A.B. May 1, 2014). The sole IPR decision cited by Petitioner in response to Patent Owner s argument stands for the unremarkable proposition that a petitioner may respond in its Reply to new and unexpected claim construction positions that were set forth in a Patent Owner s Response. Nintendo of America, Inc. v. Motion Games LLC, IPR , 2015 Pat. App. LEXIS 5322 (PTAB May 15, 2015) (Final Written Decision). But this decision does not support the notion that a petitioner may use a Reply to compensate for an entire omission of a means plus function analysis from its Petition. See id. Petitioner admitted that it did not include a means plus function argument in the Petition. Appellee s Brief, p. 38. Also, Petitioner neglected to tell this Court that it had argued before the District Court that the first and second processor means should be construed as means plus function limitations. Appx2543. That is, the Petitioner knew that the first and second processor means were means plus function limitations and nonetheless, failed to provide any means plus function analysis in its Petition. In addition, Patent Owner filed a motion to exclude the new means plus function analysis in Petitioner s Reply from the IPR, which according to 12

22 Case: Document: 38 Page: 22 Filed: 09/26/2016 the Federal Circuit, is the proper way to exclude evidence that is raised for the first time in a petitioner s reply. Genzyme Therapeutic Products Ltd. Partnership v. Biomarin Pharmaceutical Inc., 2016 U.S. App LEXIS 10711, *16 (June 14, 2016). Moreover, the Board stated that it did not rely on the evidence that was introduced in Petitioner s Reply. Appx49. For all these reasons, Petitioner s belated means plus function analysis in the Reply and its Supplemental Declaration (which was not considered by the Board), should not be considered by this Court in the appeal. C. PETITIONER S REPLY AND THE BOARD S FINAL WRITTEN DECISION DO NOT ADDRESS ALL OF THE COMPONENTS IN THE CORRESPONDING STRUCTURES OF THE FIRST AND SECOND PROCESSOR MEANS. Petitioner does not now contend that the means plus function construction set forth in the Board s Final Written Decision for the first and second processor means, is improper. Indeed, Petitioner gave no response to Patent Owner s explanation of why the means plus function construction is not correct. 2 Each of the constructions for the first and second processor means requires the corresponding structures to include a particular arrangement of many 2 Petitioner s allegation that Patent Owner s argument for the District Court s claim construction was not raised before the Board (Appellee s Brief, p. 39) is wrong. The Patent Owner explained to the Board that the means plus function construction was correct in both its Response and at the hearing. Appx360, Appx , Appx Also, the District Court s explanation for why the means plus function construction is correct is part of the IPR record in this appeal. Appx

23 Case: Document: 38 Page: 23 Filed: 09/26/2016 components including, for example, an EEPROM 97, a bidirectional data bus, etc. Appx639. The Petitioner s Reply and the Supplemental Declaration fail to discuss many of the components that comprise that structure. Appx For example, they fail to discuss the EEPROM 97 or bidirectional data bus, let alone show that that their arrangement with the other components of the corresponding structures of the Specification are taught or suggested by the prior art. Id. Petitioner s arguments to the contrary in its brief on appeal were not raised during the IPR proceeding in either the Petition (which does not even attempt to provide a means plus function analysis) or the Reply (which does not provide a complete or proper means plus function analysis). Supra, I. Therefore, they cannot be raised for the first time in this appeal. Sage Prods v. Devon Indus., 126 F.3d 1420, 1426 (Fed. Cir. 1997); see also Finnigan Corp. v. Int l Trade Commission, 180 F.3d 1354, 1363 (Fed Cir. 1999). Moreover, Petitioner s arguments are simply not accurate. First, Petitioner asserted that Dr. Franzon declared that a skilled artisan would have combined the additional structures corresponding to the means plus function limitations including EEPROM, which Spherix represented to be missing from the record. (Appellee s Brief, p. 32 citing Appx ). But the pages cited by the Petitioner (e.g., Appx , Appx ) do not discuss an EEPROM or bidirectional data bus, contrary to Petitioner s assertion. Indeed, these portions of Dr. Franzon s 14

24 Case: Document: 38 Page: 24 Filed: 09/26/2016 testimony do not even relate to any means plus function analysis. Appx , Appx Petitioner s allegation that Dr. Franzon had testified that a person of ordinary skill would have known to use all the components of FIG. 3 of the 599 patent (Appellee s Brief, pp ) do not cite to Dr. Franzon s testimony and therefore, are not supported by the record. Petitioner also alleged that the Final Written Decision identified the components of the corresponding structures for the first and second processor means. Appellee s Brief, pp That too is wrong. The Final Written Decision does not explain how the prior art teaches an EEPROM, a NVRAM, or a bidirectional database. Appx More importantly, the Final Written Decision does not demonstrate that the arrangement of the components in the particular structure disclosed in the 599 patent is taught by the prior art. Id. Finally, Petitioner alleged that Dr. Lyon testified in support of the Petition that Figa and Martensson disclosed every element of those claims. Appellee s Brief, p. 35, citing Appx ). But the pages cited by the Petitioner do not contain any means plus function analysis. Indeed, Dr. Lyon could not have possibly supported the Petition for the claimed first and second processor means because the Petition does not contain any means plus function analysis. Thus, the Petitioner did not show that the components of the structures corresponding to the first and second processor means would have been obvious. 15

25 Case: Document: 38 Page: 25 Filed: 09/26/2016 Moreover, the Petitioner did not even attempt to show at any time during the IPR proceeding or this appeal that the particular arrangement of the components of the corresponding structure of the 599 patent would have been obvious (Appellee s Brief, pp ). For these reasons, the Board s obviousness decision on first and second processor means is not supported by substantial evidence and should be reversed. IV. THE BOARD S CLAIM CONSTRUCTION OF CONCURRENTLY TRANSMITTING THE ALPHANUMERIC DATA [WHICH HAD BEEN GENERATED FROM SELECTED ONE OF KEY OPERATIONS AT THE HANDSET] IS ERRONEOUS. A. THE BOARD ERRED IN CONSTRUING THE CLAIMS TO ENCOMPASS THE TRANSMISSION OF ANY ALPHANUMERIC DATA RATHER THAN THE CONCURRENT TRANSMISSION OF ALPHANUMERIC DATA GENERATED FROM SELECTED ONE OF KEY OPERATIONS AT THE HANDSET. The portions of the claim that are relevant to the construction of this claim limitation is reproduced below: generating predetermined command and alphanumeric data for selected ones of key operations at the handset; enabling the first processor means at the handset for displaying keyed alphanumeric data on the screen and concurrently transmitting the alphanumeric data and commands to the base station. Appx69-70, col. 12, l. 65 col. 13, l. 5. The instance of the term alphanumeric data in the second limitation shown above is preceded by the definite article the, and therefore, refers to the instance of the same term in the preceding limitation. See, e.g., Energizer Holdings Inc. v. Int l Trade Comm n, 435 F.3d 1366 (Fed. Cir. 2006) (discussing requirement of antecedent basis). In other words, the claims do 16

26 Case: Document: 38 Page: 26 Filed: 09/26/2016 not merely require the concurrent transmission of any alphanumeric data; they require the concurrent transmission of a particular alphanumeric data that was generated from selected one of key operations at the handset. Appx69, col. 12, ll The Petitioner s assertion that Patent Owner s proposed construction is incorrect because it imports limitations from the Specification into the claims (Appellee s Brief, pp 44-45) is also wrong. As explained above and in Appellant s Opening Brief, the claim language itself requires that the alphanumeric data that is concurrently transmitted must have been generated from selected ones of key operations at then handset. Appx69, col. 12, ll ; Appellant s Opening Brief, pp Moreover, the construction that is required by the claim language itself is also consistent with the Specification of the 599 patent. Appellant s Opening Brief, pp The Board s construction is erroneous because it omits the claim requirement that the transmitted alphanumeric data must have been generated from selected one of key operations at the handset. Appx69, col. 12, ll Because the Board s obviousness conclusion was based on an erroneous claim construction, it should be vacated. 17

27 Case: Document: 38 Page: 27 Filed: 09/26/2016 B. THE BOARD SHOULD USE THE SAME CLAIM CONSTRUCTION PRINCIPLES FOR EXPIRED PATENTS AS THOSE THAT ARE USED AT THE DISTRICT COURT. The Patent Owner s proposed construction is correct regardless of whether the claims are construed to preserve their validity. Patent Owner s proposed claim construction is based on the claim language itself and the Specification, and is not dependent on the principle of construing claims to preserve their validity. Supra, IV.A. Nonetheless, the Patent Owner maintains that the Board should construe claims of an expired patent in accordance with the same principles used at the district court to promote consistency in claim construction rulings between the two forums. The statutes referenced by Petitioner in support of its position is directed to the burden of proof for establishing unpatentability in an IPR, not a principle of claim construction. 35 USC 316 (e). Nothing in this statute precludes the Board from using the same claim construction principles that are used at the District Court. Id. V. THE BOARD S FLAWED CLAIM CONSTRUCTION REQUIRES REVERSAL OF ITS OBVIOUSNESS RULING. The Board s conclusion that the challenged claims of the 599 patent are invalid on grounds of obviousness cannot be affirmed once its claim construction is corrected. 18

28 Case: Document: 38 Page: 28 Filed: 09/26/2016 A. THE BOARD S CONCLUSION THAT THE PRIOR ART TEACHES CONCURRENTLY TRANSMITTING THE ALPHANUMERIC DATA [THAT HAD BEEN PREVIOUSLY GENERATED FROM SELECTED ONES OF KEYSTROKE OPERATIONS AT THE HANDSET] IS BASED ON AN ERRONEOUS CLAIM CONSTRUCTION. As explained above, the claims require that the alphanumeric data that is concurrently transmitted with the command must have been previously generated from selected ones of keystroke operations at the handset. Supra, IV.A. There is no evidence in the record indicating that the prior art teaches this claim requirement. Rather, as explained in Patent Owner s opening brief, the alphanumeric data in Martensson is stored in a memory located at the base station. Appellant s Opening Brief, IV.A; Appx at 4:53-61 and 5: Moreover, the argument raised for the first time in Petitioner s IPR Reply that the combination of Martensson and Figa teaches this claim requirement is improper because Rule 42.23(b) prevents the fundamentally unfair practice of improperly springing new evidence on a patent owner for the first time after the patent owner has filed both of its substantive papers that it is permitted to file (i.e., the Patent Owner s Preliminary Response and the Patent Owner s Response). Appellant s Opening Brief, II.B.1 and IV.B; 37 C.F.R (b). Even if Petitioner s belated arguments were considered, they would not show that the prior art combination teaches this feature because the mere selection of one of a group of phone numbers at a handset does not teach that the selected phone number was generated from 19

29 Case: Document: 38 Page: 29 Filed: 09/26/2016 keystroke operations at the handset. Appellant s Opening Brief, IV.B. Rather, as explained by Dr. Franzon there is no need to transmit the phone number (alleged to be the claimed alphanumeric data by the Petitioner) to the base station because it is already at the base station. Appx Similarly, the Board s conclusion does not address the claim requirement. The Board stated that [w]hen the user selects the desired telephone number using the scroll keys and confirms the selection by depressing the talk key, an instruction is generated by the local microprocessor at the handset and relayed by radio communication to the base station. Appx But this statement does not address the claim requirement of a concurrent transmission of both commands and alphanumeric data that had been previously generated from selected key operations at the handset. Id. For these reasons, neither the Board nor the Petitioner have shown that the claim limitation of concurrently transmitting the alphanumeric data and commands to the base station as properly construed, would have been taught or suggested by the prior art. 20

30 Case: Document: 38 Page: 30 Filed: 09/26/2016 B. THE PETITIONER S NEW ARGUMENT INTRODUCED FOR THE FIRST TIME IN THIS APPEAL DOES NOT SHOW THAT THE PRIOR ART TEACHES CONCURRENTLY TRANSMITTING THE ALPHANUMERIC DATA [THAT HAD BEEN PREVIOUSLY GENERATED FROM SELECTED ONES OF KEYSTROKE OPERATIONS AT THE HANDSET]. The claim language of this limitation is not ambiguous; it requires that the alphanumeric data must have been generated from selected ones of keystroke operations at the handset. Appx69-70, col. 12, l. 65 col. 13, l. 5. Petitioner s arguments over the terms by and at in its brief (pp ) with Patent Owner s proposed construction were not raised during the IPR proceeding. Appellee s Brief, pp Therefore, they cannot be raised for the first time in this appeal. Sage Prods v. Devon Indus., 126 F.3d 1420, 1426 (Fed. Cir. 1997); see also Finnigan Corp. v. Int l Trade Commission, 180 F.3d 1354, 1363 (Fed Cir. 1999). In addition, Petitioner s quibbling over the terms by and at in the Patent Owner s construction is both puzzling and unclear. The claims explicitly recite generating predetermined command and alphanumeric data from selected ones of key operations at the handset. (Appx69, col. 12, ll ) (emphasis added). That is, the alphanumeric data that is transmitted concurrently with a command must have been previously generated from key operations at the handset, not from key operations at the base station, as alleged by Petitioner. The portions of Martensson and Figa referenced by Petitioner teach that the alphanumeric data is generated from key operations at the base station, not from key 21

31 Case: Document: 38 Page: 31 Filed: 09/26/2016 operations at the handset, as required by the claims. For example, Petitioner states that the base station sends a list of names and telephone numbers stored in memory to the handset. Appellee s Brief, p. 47. But that statement refers to alphanumeric data (e.g., names and telephone numbers) that are sent from the base station to the handset, not data that is generated from key operations at the handset and transmitted concurrently with a command to the base station, as required by the claims. Petitioner also argued that Martensson discloses this claim limitation by requesting a list of functional options and hone [sic] numbers, by or from selecting key operations at the handset. Id. at pp But the request mentioned by the Petitioner is a single item, in contrast to the claim limitations, which require the concurrent transmission of two distinct items: (i) a command and (ii) alphanumeric data that had been previously generated from key operations at the handset. Appx69-70, col. 12, l. 65 col. 13, l. 5. Petitioner also argued that when a user selects the Talk key of Martensson s handset, the phone number and command that the number be dialed is concurrently transmitted to the base station. Appellee s Brief, p. 48. But Martensson discloses no such thing. See e.g., Appx755, Martensson col. 6, ll And there is no evidence in the record indicating that the phone number is transmitted with the talk command. Indeed, there would have been no need to send the phone number from the handset to the base station in Martensson because the phone number is already 22

32 Case: Document: 38 Page: 32 Filed: 09/26/2016 at the base station. Rather, only an indication of the user s selection would need to be transmitted. Appx As explained by Dr. Franzon, the unnecessary transmission of data from the handset to the base station would needlessly shorten battery life at the handset. Id. This would render the handset unsuitable for its intended purpose of being cordless. Id. That is, the handset would no longer be cordless if it needed to be tethered to a power outlet by a cord because it was wasting energy. Even if one of the embodiments of Martensson were interpreted to include a keypad (as alleged by the Petitioner), the claim limitation would still not be taught because the mere presence of a keyboard does not teach concurrent transmission of a command and alphanumeric data that had been previously generated from selected key operations at the handset. Petitioner also argues that Martensson discloses that in some instances the phone directories will be stored at the handset. Appellee s Brief, p. 50, citing Martensson, col. 5, ll ). But the cited portion of Martensson states that memory 15 [of the handset] may also have portions associated respectively with each of the other handsets 2b, 2c 2n, and thus constituting a remote telephone directory for each handset Appx755, col. 5, ll (emphasis added). That is, this portion of Martensson references phone numbers that are associated with other handsets. The claims, in sharp contrast, require that the alphanumeric data that is 23

33 Case: Document: 38 Page: 33 Filed: 09/26/2016 transmitted by the first processor means at the handset to have been generated from selected key operations at the same handset, not one of the other handsets: generating predetermined command and alphanumeric data from selected ones of key operations at the handset; enabling first processor means at the handset for displaying keyed alphanumeric data on the screen and concurrently transmitting the alphanumeric data and commands to the base station; Appx69-70, col. 12, l. 65 col. 13, l. 4. Thus, there is no evidence that this limitation, as properly construed, is taught by the prior art, even if Petitioner s new arguments that are raised for the first time in this appeal are considered. C. THE BOARD S RULING THAT ONE OF ORDINARY SKILL WOULD HAVE COMBINED FIGA WITH MARTENSSON TO ACHIEVE THE CLAIMED INVENTION IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE. The Board is required to make its analysis explicit as to whether there was an apparent reason to combine the known elements in the fashion claimed by the patent at issue. Ball Aerosol & Specialty Container, Inc. v. Limited Brands, Inc., 555 F.3d 984, 993 (Fed. Cir. 2009) (emphasis added) (quoting KSR International Co. v. Teleflex Inc., 127 S.Ct. 1727, (2007)). That is, this Court s precedent requires more of the Board in this appeal than a motivation to generally combine features from cordless and corded phones. It instead requires the Board to provide an explicit analysis as to the reason why a person of ordinary skill in the art would 24

34 Case: Document: 38 Page: 34 Filed: 09/26/2016 have been motivated to combine the prior art features in the fashion claimed in the patent at issue. Neither the Board nor the Petitioner provided a reason why a person of ordinary skill in the art would have been motivated to combine Martensson and Figa to concurrently transmit the command and alphanumeric data [previously generated from selected key operations at the handset] from the handset to the base station. See e.g., Appellee s Brief, pp ; Appx Rather, the Board discussed a motivation to generally combine features from corded phones and cordless phones throughout the IPR proceeding. Appx Petitioner repeats this mistake in its appeal brief by discussing how a skilled artisan would have been motivated to improve the phones of Figa and Martensson generally, and failing to explain why a skilled artisan would have been motivated to combine the teachings of the references in the fashion claimed in the 599 patent. Appellee s Brief, pp ). Instead of addressing the argument that the Patent Owner did make (e.g., that a skilled artisan would not have been motivated to combine the prior art teachings to concurrently transmit commands and alphanumeric data generated from keystroke operations at the handset), the Petitioner made up arguments that the Patent Owner did not make in its opening appeal brief and then, addressed its own made-up arguments (Appellee s Brief, p. 57). For example, Petitioner stated that Patent Owner contended that there was not a motivation to combine Martensson because 25

35 Case: Document: 38 Page: 35 Filed: 09/26/2016 its preferred embodiments did not have a keypad on the handset. (id. citing Appellant s Brief, 55, ECF No. 27). But neither page 55 of Appellant s opening brief nor any other page contains this contention. See Appellant s Opening Brief, pp The Petitioner also stated that [i]n essence, Spherix makes the same teaching away argument addressed above. Appellee s Brief, p. 57. But Patent Owner Spherix did not make this teaching away argument, either in essence or otherwise. See Appellant s Opening Brief, pp Petitioner s assertion that Patent Owner Spherix argued that Martensson s preferred embodiment would drain battery life, and thus, there would be no motivation to combine Martensson and Figa (Appellee s Brief, p. 57) does not cite to any portion of Appellant s Opening Brief. It is little wonder why; Patent Owner did not make this argument. Rather, Patent Owner argued that a skilled artisan would not have combined or interpreted the teachings of Martensson and Figa in the manner suggested by Petitioner because the resulting phone would have needlessly transmitted data that was already at the base station from the handset to the base station. Appellant s Opening Brief, pp Finally, Petitioner s arguments that Dr. Franzon s opinion on battery life is not relevant to the claims and are mere conjecture (Appellee s Brief, pp ) are also not accurate. First, Dr. Franzon s opinion is based on sound scientific principles, not conjecture. Appx Because energy is conserved, the energy needed 26

36 Case: Document: 38 Page: 36 Filed: 09/26/2016 for the handset to transmit data must come from a source of energy: its battery. See id. If data were to be needlessly transmitted from Martensson s handset to the base station, the data transmission would cause the battery to drain prematurely. Id. Dr. Franzon s opinion is relevant to the claims because it demonstrates that a skilled artisan would not have interpreted Martensson to teach that its handset transmits alphanumeric data to a base station that is already at the base station. Such an interpretation would render Martensson s handset unsuitable for its intended purpose of being cordless, because needlessly draining the battery would require the handset to be corded to an electrical power outlet. Id. The Board s conclusion that one of ordinary skill in the art would have combined the teachings of Figa and Martensson in the manner suggested by the Petitioner is clearly not supported by substantial evidence or common sense. For this additional reason, the Board s decision should be vacated. CONCLUSION For the reasons expressed above, the Board s judgment that claims 1 7 and 18 of the 599 patent are unpatentable should be vacated. 27

37 Case: Document: 38 Page: 37 Filed: 09/26/2016 September 26, Respectfully submitted, /s/ Gregory J. Gonsalves GREGORY J. GONSALVES DR. GREGORY J. GONSALVES GONSALVES LAW FIRM 2216 Beacon Lane Falls Church, VA G. DONALD PUCKETT NELSON BUMGARDNER, PC 3131 West 7th Street, Suite 300 Fort Worth, TX Counsel for Appellant Spherix Incorporated 28