QUALCOMM INCORPORATED v. APPLE INC. — Oral Argument

0:01 Judge Taranto The United States Court of Appeals for the Federal Circuit is now open and in session.

0:05 God save the United States and this honorable court.

0:09 The court will hear argument in number 2015-58, Qualcomm against Apple.

0:15 Ms. Sweezy, please begin when you're ready.

0:19 Appellant Attorney (Jennifer Loraine Swize) Thank you, Your Honor.

0:20 Good morning.

0:21 May it please the court.

0:22 The board's full ground for finding the challenged claim unpatentable was statutorily improper.

0:30 This court should reverse.

0:31 The issue here concerns the scope of inter-parties review and specifically the text of Section 311B of the AIA,

0:39 which identifies specific categories of prior art that can be used as a ground in an IPR.

0:46 Judge Taranto You mean as a basis, right?

0:51 Appellant Attorney (Jennifer Loraine Swize) Technically as a basis.

0:52 The grounds would be 102, 103, and then as a basis.

0:55 Judge Taranto Right, and I know the language in IPR practice uses ground for basis,

1:01 but since we're talking about the statute,

1:03 we might not be able to use that as a basis.

1:03 We might keep that language consistent with the statute.

1:08 Appellant Attorney (Jennifer Loraine Swize) Yes, Your Honor.

1:09 Thank you.

1:11 The statute does limit the basis for an IPR to two specific categories,

1:18 first patents and second printed publications that are prior art to the challenged patent.

1:25 The text at issue is on the basis of prior art consisting of patents or printed publications.

1:32 That is a clear rule that limits what can be used as a basis.

1:36 In an IPR, the board exceeded that scope.

1:40 The board rested on a basis that combined statements in the 674 patent itself with the Majestic Reference.

1:47 That is not permissible because it does not meet the categories under Section 311B.

1:53 The 674 patent, the challenged patent, is not a prior art reference.

1:57 It is not a prior art patent.

1:59 It is not a prior art printed publication.

2:01 Because the board exceeded its statutory scope, issuing a final written decision that rested on a basis,

2:08 that attempted to combine the patent and the reference.

2:11 Judge Taranto What kind of uses of things that are not prior art patents or printed publications are permissible in deciding IPR questions?

2:28 Like admissions, like expert testimony about common knowledge, surely some such uses are permissible.

2:39 And so the question would be,

2:41 how to distinguish those uses from use as a basis?

2:50 Appellant Attorney (Jennifer Loraine Swize) This court has recognized that distinction.

2:53 The statute does itself.

2:55 In other words, Section 311B is really directed to what can be the basis.

2:59 And this court has recognized that there are other uses of other types of evidence,

3:04 whether that be statements in the challenged patent itself, in the background section or elsewhere,

3:09 expert declarations, other prior art references, or even non-prior.

3:14 And the types of uses that that evidence can be made of, the court has characterized as supporting roles.

3:27 Evidence could be used to understand what the asserted art means.

3:31 Judge Taranto Where does the phrase limited supporting role come from that you were just using?

3:36 Appellant Attorney (Jennifer Loraine Swize) Supporting role, and the actual quote is proper supporting roles.

3:41 It's from the YEDA decision, where this court actually cataloged these various uses.

3:46 It wasn't specifically addressing statements in the challenged patent itself,

3:50 but it was recognizing that.

3:51 That there is other evidence that can be used in an inter-parties review beyond the specific asserted art.

3:57 So, for instance, informing what the level of ordinary skill in the art might be,

4:03 understanding what the asserted references actually disclose.

4:07 There might be other documents or evidence, expert testimony.

4:11 Judge Taranto What about something that might be at least getting close to what's going on here,

4:18 whether it gets all the way there or not, is another question,

4:20 which is,

4:22 is there a reason to supply, a reason to modify a particular reference in a way that supplies a final claim element

4:37 and arrives at the claimed invention?

4:40 Appellant Attorney (Jennifer Loraine Swize) Right, Your Honor.

4:41 That would also be a permissible use.

4:43 In other words, in the sense of it could be evidence demonstrating that a person of ordinary skill in the art might modify one of the asserted references.

4:53 And the Court has recognized that.

4:55 Under Section 103, not necessarily an I-СТ puisque that's part of that inquiry.

5:01 And so.

5:01 311 acknowledges that 103 has a role here.

5:06 That's one of the statutory grounds.

5:08 But the basis of the 103 would be a combination or a single reference would be asserted how that reference might be read as a person

5:17 by a person of ordinary skill in the art.

5:19 How it might be modified.

5:21 That it might be combined with another reference that is part of that basis.

5:25 This could be made.

5:28 of other evidence, whether it's expert testimony opining on what's

5:32 in the general knowledge or other references. This is Judge Chen.

5:36 Judge Chen What about supplying claim limitations?

5:41 Appellant Attorney (Jennifer Loraine Swize) No, Your Honor. Section 311B, that would be precisely what

5:45 311B would prohibit using statements in the patent itself.

5:49 Judge Chen Is that what we're saying out of research? Or Conon Clique Phillips?

5:53 That you can't rely on

5:57 admissions or knowledge of

6:00 a skilled artisan for matching up with

6:05 certain claim limitations? In the sense, Your Honor, that the

6:09 Appellant Attorney (Jennifer Loraine Swize) 103 inquiry does take into account how a person of ordinary skill in the art

6:14 would read the asserted references. The threshold, though, needs to be

6:18 what are the asserted references, and that's precisely what Section 311B

6:22 Judge Chen I'm sorry. I'm a little confused. My understanding of our case

6:26 law is that we've already endorsed her.

6:28 Blessed or accepted the

6:32 reliance on things like knowledge of a skilled

6:36 artisan and or admitted prior art to supply

6:40 at least one claim limitation or

6:44 maybe more than one. I mean, we can get into an argument about

6:48 well, then what does it mean to be the basis? But as I understand the state of our

6:52 case law, we've already made a choice

6:57 that is okay for

6:58 things like established knowledge of a skilled artisan

7:03 to support

7:05 a finding that it was known in the prior art

7:11 that certain claim limitations in the claim

7:14 were known. Am I wrong about that?

7:17 Appellant Attorney (Jennifer Loraine Swize) With one caveat, Judge Chen, if I can address

7:22 where the question landed and then one comment you made

7:27 as part of the question. So, no, we completely agree with that.

7:32 I agree that the case law has recognized that the general knowledge of the artisan

7:37 can inform the 103 analysis. The distinction is that in IPRs, Congress has made the choice

7:46 of what can be the basis for a 103 contention, and it is specified two particular types of

7:53 prior art. And this court has consistently recognized that phrasing, albeit in the Section

7:59 301 context for reexaminations, but where that same language is used. And I think that's

8:05 very important.

8:05 I think that the phrase, prior art consisting of patents or printed publications, means

8:10 the natural reading, that the references that can be used, the documents that can be used

8:16 to challenge an issued patent, consist of prior art patents or prior art printed publications.

8:23 Judge Bryson Ms. Ruizy, this is Judge Bryson, and I want to follow up on the questions of my two colleagues.

8:31 Ms. Ruizy, I'm struggling to put this in order. I want the attention of the public to know

8:34 understand the distinction that you're drawing between basis and supporting evidence or other

8:42 materials. Do you have a definition that would help us with that, rather than our trying to

8:51 cobble together examples? Is there something more definitional, or are we really talking

8:58 about something fairly formalistic, as in, this is obvious under X in light of Y, in which X and Y

9:09 would be, and everything else would be supporting? I think by force of statute, whether we want to

9:20 Appellant Attorney (Jennifer Loraine Swize) call it formalistic or not, Congress has made the choice as to what can be used as a basis for

9:26 Judge Bryson Right, right, I understand that. What I want to know is what you think, how you would define the

9:33 target, and how you would define the basis for supporting evidence, and how you would define the

9:33 term basis here. Is it just in the formalistic sense that as long as the PTO is not using the

9:42 references in the formalistic sense of Y, this is open? I think I agree with the phrasing that

9:59 Appellant Attorney (Jennifer Loraine Swize) Congress has said that the contemplated scope of inter-parties review would be an asserted

10:05 reference as a single reference obviousness, or reference X in light of reference Y. That is the

10:14 scope of 311B and what informs the basis. This Court has reconciled, however, that other evidence

10:21 can be used. Please continue. Thank you. In terms of a definition, Your Honor, I think it really

10:30 goes back to, we're talking specifically here about Section 103 and general knowledge, and in

10:36 cases like Phillips v. Google, Pace v. Ford, Sanofi v. Milan, this Court has recognized that

10:44 evidence can be used to inform once you have the threshold understanding of what is the asserted

10:52 art by the petitioner. I don't think there's really a difficulty here in terms of line drawing. The

10:59 Court in Phillips, and I think Phillips teaches us a lot of lessons here, has already done that

11:04 inquiry. So it's already first evaluated what is the ground asserted by the petitioner and

11:11 explained no matter how the petitioner articulates its grounds. This goes back to the

11:16 SAS Institute and the petitioner being the master of its complaint. And in Phillips, even where the

11:21 petitioner said that the Board had articulated a third ground use in the same arguments as the

11:29 petitioner, this Court said that cannot be done. That's recasting a ground. It's the petitioner that

11:35 needs to master its complaint. The rest of Phillips that I think also informs us and is very helpful

11:40 says that a petitioner could assert a single reference and say that that reference could be

11:47 modified by the petitioner. And that's what we're trying to do here. And I think that's what we're

11:48 trying to do here. So we're trying to do here is to verify that it's accurate in

11:48 some sense, based on what the ordinary artisan would know. All kinds of evidence could inform that

11:55 inquiry, whether it's statements in the patent, challenge patent itself, expert decorations,

11:59 other art. But that needs to be properly...

12:03 Judge Chen Just so I follow up on this, on my question.

12:07 Appellant Attorney (Jennifer Loraine Swize) Yes.

12:07 Judge Chen In Phillips, the basis, I don't know, the ground of the challenge, whatever you want to call it, it was

12:15 smell plus general knowledge.

12:19 of the skilled artisan. And it was the

12:23 pipelining limitation in the claim that

12:27 the challenger pointed to the knowledge of the skilled

12:31 artisan for that limitation. Is that right?

12:36 Appellant Attorney (Jennifer Loraine Swize) That's part of that evidence, Judge Chen. Was there something in the actual

12:41 Judge Chen prior art reference itself that taught the

12:45 Appellant Attorney (Jennifer Loraine Swize) pipelining limitation? Yes. This court said, recognized that

12:50 the law reference also taught that and that there was also expert declaration.

12:54 This court, in cases like Ariosa, has been

12:57 clear that... What if we read

13:01 Judge Chen Phillips to say that it's okay to rely

13:05 on the knowledge of a skilled artisan as supported by whatever evidence

13:09 you want to use, in combination with a prior art reference

13:13 to be a basis of

13:18 a 103 challenge.

13:20 And if that's the way we read Phillips, then wouldn't it

13:28 likewise be okay to

13:32 make a basis of a 103 challenge in an IPR

13:35 a prior art reference in conjunction with admitted prior art

13:41 given that admitted prior art is really just another way

13:44 of identifying what is already within the knowledge

13:48 of the skilled artisan before the date of the patent.

13:52 Appellant Attorney (Jennifer Loraine Swize) I want to answer the first part that I read Phillips...

13:59 Judge Chen Well, you have to accept the way I read Phillips, in the hypothetical.

14:03 but the hypothetical is, you can use an IPR

14:10 that, in which the challenge

14:12 is based on a prior art reference in conjunction with

14:17 the knowledge of a skilled artisan, in which you are relying

14:21 on the knowledge of the skilled artisan to supply a claim limitation,

14:26 that is missing from the actual prior art reference you are asserting in the challenge?

14:34 Appellant Attorney (Jennifer Loraine Swize) Under that hypothetical, Judge Chen, if the only evidence that is being asserted as demonstrating

14:40 general knowledge is, quote-unquote, prior art from the patent itself, that does not

14:47 meet Section 311B because it is not a prior art patent or a prior art printed publication.

14:53 So that would either be an end run, an improper end run around Section 311B, or simply

14:57 directly contrary to it.

15:00 The court has recognized that the board and this court can certainly police, and I think

15:05 a clear ruling from this court on the scope of 311B would disincentivize misuses of so-called

15:12 applicant-admitted prior art.

15:14 AFL is attempting, attempted to use, and the board used statements in the challenge patent

15:20 itself under 311B.

15:26 Judge Taranto Why don't you wrap up, and then you'll have your rebuttal time back.

15:31 Appellant Attorney (Jennifer Loraine Swize) And I just wanted to reinforce that the hypotheticals we're discussing here are not the situation

15:37 here where AFL used a reference under 311B for one limitation, but relied on the statements

15:46 in the patent itself as most of the majority of limitations.

15:50 That's not the contemplated scope of Section 311B.

15:54 And AFL clearly brought its grounds, its basis on a juristic reference in view of and actually

16:04 starting with the subject matter.

16:05 So-called applicant-admitted prior art, which is outside the scope of Section 311B.

16:09 Thank you for the additional time, and I'll...

16:15 Judge Taranto Thank you.

16:17 Ms. Queller?

16:20 Appellee Attorney Yes, Your Honor.

16:21 Your Honor, it may please the court.

16:23 The director intervenes to request that this court use its discretion to remand the proceedings

16:28 back to the agency in order to allow the board to reconsider the final written decision and

16:34 apply the director's guidance on the use of applicant-admitted prior art.

16:37 Judge Taranto Should we decide anything at all?

16:40 Before we remand or just remand?

16:42 I mean, it seems to me that there's a sort of the main debate between the parties, which may actually

16:49 have a very easy resolution that is a resolution in favor of Qualcomm that the two printed

16:58 publications and patents themselves have to be prior.

17:02 The patent itself is not prior, so they can't be the basis.

17:05 And that would then leave the question, well, is the admission,

17:10 in this patent, a basis?

17:13 Should we decide even that first question?

17:17 Appellee Attorney Your Honor, it is within this court's discretion, of course, to decide the statutory interpretation

17:22 of 311 as a de novo issue.

17:24 The director just requested a remand just based on the legitimate concern that the court's

17:30 review be based on the current agency's statutory interpretation, which differs from the analysis

17:36 that the board decision used that is currently before the court.

17:39 So...

17:40 What...

17:40 Judge Taranto What...

17:40 What do you think basis means?

17:42 Is it a matter of the formality?

17:46 I don't mean to diminish the significance by using that term in the statement of the

17:53 ground as AAPA in view of Maturzyk.

17:57 Is it a matter of how much is being used?

18:03 Is it a matter of whether in the heading the AAPA comes first or second?

18:10 Is...

18:10 How do we...

18:12 On the assumption that that's the remaining question, what should we think about that?

18:20 I'm not sure, actually, that the director's guidance, which actually supplies very much

18:26 guidance on that question.

18:30 Appellee Attorney So, with respect to the order of references, I'll take that portion first.

18:35 The board did address that, and I agree with that decision on Appendix 22 that...

18:40 Yeah.

18:41 Rarely does the order of reference and the positional of the references make any difference

18:46 in analyzing the patentability of the claim.

18:48 So, I would not agree that that informs the decision of whether or not the admission is

18:54 the basis.

18:56 In the director's guidance...

18:57 So, that...

18:57 Judge Taranto I'm sorry.

18:58 So, just so that the statement AAPA plus Maturzyk, you would treat as identical for these purposes

19:05 to Maturzyk plus AAPA, or Maturzyk in view of AAPA.

19:11 Appellee Attorney That's correct.

19:11 Judge Taranto And do you think that in this case, either Apple has argued for or that the petition

19:19 supplies a basis for the board to find unpatentability, viewing it that way consistent with the constraints

19:38 on the board having to follow the petition?

19:44 Appellee Attorney Well, I think that's a great example of one of the other reasons that the director has

19:49 requested remand in order to address whether or not the admission here was used as evidence

19:57 of general knowledge and not impermissibly overtaking the entire proceedings, as Your

20:03 Honor indicated, as an improper basis.

20:07 That is not a factual decision that the board made here.

20:12 So, that is something that...

20:14 That is something that could be conducted, an analysis that could be conducted on remand.

20:18 And that would also allow, you know, if there are any disputed facts of whether Qualcomm

20:24 disputes, in fact, that this is an admission or whether what they've stated in their patent

20:29 is evidence of general knowledge, that it's something else that could be conducted on

20:35 remand.

20:36 And otherwise, as the director put in the guidance, the decision of whether or not the

20:44 admissions are used as evidence of general knowledge can be simply guided by this court's

20:49 precedent in Conclique Phillips.

20:51 We also have the BE Aerospace decision and Arendee v. Apple that all address the use

20:57 of evidence such as for general knowledge or common sense in addition to a prior art

21:04 patent.

21:05 So, the main idea is that the 311 analysis be based, and in the director's guidance at

21:13 4534.

21:14 5, there's a definition of basis as the starting point.

21:18 Judge Taranto This is a foundational or starting point?

21:21 Appellee Attorney Correct, Your Honor.

21:22 Judge Taranto So, you've read Apple's petition.

21:27 Is there any reasonable way to read that petition as treating Masurczyk but not AAPA as foundational

21:38 or a starting point?

21:41 Appellee Attorney Your Honor, I would respectfully push that.

21:45 It's a question of fact within the Board of Provence to answer that question on remand.

21:51 So, if that is something that would be helpful and guide the court's decision on the use

21:58 in this case, I think that would be one reason to remand for the Board to make that decision

22:04 in the first place.

22:06 Judge Chen This is Judge Chen.

22:07 Do you have anything more, or does the agency have anything more to offer other than the

22:15 dictionary definition for the word basis to understand what the meaning of that word

22:22 is in Section 311B?

22:24 Appellee Attorney In addition to the meaning of that word, I think this court has addressed that already.

22:30 So, the addition that we would have would be this court's precedent, as I mentioned,

22:35 for example, in Conclique Phillips or B.E.

22:37 Aerospace, where the very similar questions were asked about the use of general knowledge.

22:41 And really, you know, admissions do boil down as excellent true admissions.

22:46 And excellent admissions are excellent evidence of what is known.

22:51 Judge Chen I guess what I'm trying to figure out for the context of an IPR is, does it matter to

22:57 the agency how many limitations are being taught by the AAPA versus a cited prior art

23:08 reference?

23:09 Does it matter to the agency if the AAPA is...

23:16 Doing nothing more than supplying what I'll call routine, conventional, well-known, boring

23:24 elements, and that it's the cited prior art reference that's actually being used to supply

23:31 the inventive contribution that the inventor provided?

23:36 I mean, I'm just trying to get a feeling, I mean, you want us to send it back, but because

23:42 you want the agency to use it.

23:51 So I don't know if we have the basis for this item.

23:58 I'm trying to go back to the point where they said, well, it doesn't matter to the agency

23:58 how many limitations are being taught by the AAPA versus a cited prior art reference,

24:00 because there's plenty of them.

24:01 And I think this is one of the reasons that the agency doesn't necessarily have the ability

24:02 to pass their own rules that will grant them the opportunity to give the pessoas the same

24:03 Appellee Attorney intent, even if it doesn't really reflect what they did, but the agency, the agency

24:09 So they don't consider that the agency is an individual.

24:11 And if there is a different bureaucrat or an agency that does that, then the agency

24:12 What we're seeing from this is that our general knows what the agency is doing, but it's not

24:15 kind of the contours and the proper use of common sense and an obviousness analysis.

24:20 So the first kind of inquiry was whether it's used to provide a motivation to combine.

24:28 The second was when it's provided or invoked to supply a limitation that was missing,

24:34 whether the limitations in question were simple, the technology was straightforward.

24:38 Judge Chen What if it's a claim with ten limitations

24:42 and you're relying on the AAPA to match up with nine of the ten limitations,

24:48 and then you're citing a prior art reference for the tenth limitation.

24:54 But at the same time, when you look at the challenged patent,

24:59 the challenged patent says the first nine limitations, those are all very well known,

25:05 and so there's nothing interesting about those.

25:09 But my contribution is,

25:14 modifying that old boring circuit diagram by adding a new element to it,

25:19 that'll improve its performance.

25:21 And the IPR challenger is now relying on a prior art reference for that tenth element.

25:31 What's the basis of that challenge?

25:35 Appellee Attorney So I think it depends highly on the factual nature of the invention in question

25:39 and what the exact admission is,

25:42 rather than the nature of it.

25:43 There are a number of limitations,

25:45 but whether the technology was simple,

25:49 the modification was simple,

25:52 following this court's guidance in the R&D...

25:55 Judge Chen Was my question not enough?

25:57 Did my question not hypothetically give you enough information on the fact pattern?

26:03 Appellee Attorney Respectfully, Your Honor, I would say that it depends on the technology.

26:07 So whether the technology was particularly straightforward,

26:11 the limitation in question,

26:13 or the limitations,

26:14 are there ten elements,

26:17 but they're all together as one?

26:19 I do think the technology is important to that inquiry.

26:23 The other question is whether or not the admission is disputed,

26:27 whether it's proper evidence of general knowledge.

26:31 Does the patent owner dispute whether or not this is a true admission?

26:35 Judge Chen It's not disputed in my hypothetical.

26:37 It's not disputed in my hypothetical,

26:39 and the technology is straightforward.

26:40 Appellee Attorney If the technology is very straightforward,

26:44 I do not believe the number of limitations

26:46 is a guidance of whether or not it is a basis.

26:50 Without commenting on and knowing the full facts,

26:54 and I understand, Your Honor,

26:55 the hypothetical is very complete,

27:00 but if a prior art reference is there,

27:03 then we do believe that that satisfies the requirement of 311,

27:08 that the basis be on a prior art patent,

27:11 which is...

27:11 The admission is not.

27:12 We do agree that the admission is not a prior art patent,

27:14 and then it does appear that that would fit within this court's precedent

27:19 in Conclique and Arendi

27:21 as just supplying the general knowledge of the art.

27:25 So I do think the guidance is there already,

27:27 in this court's precedent,

27:29 on how to use evidence of general knowledge,

27:36 evidence of common sense,

27:37 for missing claim limitations,

27:39 and admission is just another type.

27:41 of that evidence.

27:43 And it has been frequently used,

27:44 as we mentioned,

27:46 and reexam the history of this limitation of 311.

27:51 Judge Taranto This is Judge Taranto.

27:53 Can I just ask,

27:53 you've pointed to Arendi,

27:56 which is all about common sense.

27:59 Is that the same concept as what's in the prior art,

28:06 though in an undocumented way?

28:08 I would think that the common sense,

28:12 law,

28:13 is addressing something different.

28:20 That is something about being able to say,

28:24 well,

28:24 everybody knows a certain technique or something,

28:30 or is there really no difference,

28:32 so that the Arendi discussion about common sense,

28:36 you think should carry over to this concept of a proper non-basis use.

28:41 Appellee Attorney The connection between Arendi and the current case

28:46 comes from the Conclique Phillips decision,

28:48 where they do discuss relying on general knowledge

28:51 to supply a missing claim limitation,

28:53 and discuss the use of common sense and common knowledge

29:00 that was discussed in Arendi.

29:02 And so that is where the connection is being made.

29:05 I think there may be differences in different cases

29:08 between something that is common sense

29:09 and what evidence that you use for common sense,

29:12 versus general knowledge.

29:14 But I do believe that the Arendi decision on common sense

29:16 does inform the inquiry here

29:19 as laid out by the panel in Conclique Phillips.

29:23 Judge Taranto Okay.

29:24 Do my colleagues have any further questions of Ms. Queller?

29:30 No.

29:31 Okay, hearing none,

29:33 I think we should hear from Ms. Degman.

29:37 Appellant Attorney (Jennifer Loraine Swize) Thank you, Your Honors.

29:38 Judge Taranto Thank you.

29:40 Appellant Attorney (Jennifer Loraine Swize) Good morning, Your Honors.

29:41 May it please the Court, Lauren Degman for Apple.

29:43 And so I'd like to start with noting

29:47 that both Qualcomm's and the Patent Office's arguments

29:50 must rely on rewriting what we see

29:53 as the plain language of the statute,

29:55 to eliminate the consisting of language,

29:57 to transform prior art as a noun

30:00 into prior-art as an adjective,

30:02 in order to arrive at an interpretation

30:07 that they believe is a better policy

30:10 than the one that is embodied in the language

30:12 of the statute itself.

30:13 We would submit that the plain language of the statute

30:18 really broaches no such change,

30:21 and if we were to get into policy arguments

30:23 and the legislative history,

30:25 both fall squarely on the side

30:26 of allowing prior art

30:29 that is found and is contained

30:34 in a patent or printed publication

30:37 is, in fact, fully consistent

30:39 with the policies set forth in the IPR statute,

30:43 and, in fact, the policies set forth by many cases,

30:47 including, you know, the general notion

30:50 to weed out bad patents.

30:53 Judge Taranto So let me...

30:54 Can you talk to us about the issue

30:57 we've been talking about for the last half hour?

30:59 Suppose you're wrong about that.

31:02 Help at least me understand

31:05 what a proper but non-basis use

31:11 of the...

31:12 of the statements of admission here

31:18 are on the assumption

31:20 that they are, in fact,

31:22 they cannot be basis.

31:25 Appellant Attorney (Jennifer Loraine Swize) You're hypothetical.

31:30 If they cannot be used as basis,

31:32 and I think there's been some good questions

31:33 about how we design the contours of the basis,

31:36 I think that there's no question under Phillips,

31:40 this court case is Phillips,

31:41 that they can be used to supply missing limitations,

31:45 and I think...

31:46 I think the conversation about how many,

31:49 how many limitations,

31:51 the quantity or the quality of limitations,

31:54 I don't think we need to drill down

31:57 to be cutting, you know, slicing hairs on that.

32:02 So they can supply limitations,

32:04 and in terms of the hypothetical Judge Chen offered,

32:08 I think there should be no...

32:10 There's no question, as it was before the board here,

32:13 that applicant admitted prior art

32:16 should be able to supply all the limitations

32:20 that were acknowledged to be, you know,

32:22 common, standard, known in the art,

32:25 and then, you know, should there be a qualitative,

32:28 you know, if the limitation's particularly important,

32:31 should it be able to fill that?

32:32 I frankly would say it should be,

32:34 because I think when we do the 103 analysis,

32:37 this court has said that all limitations do matter.

32:40 We look at the prior...

32:41 We look at the sources of prior art collectively.

32:45 We don't necessarily give any...

32:48 Judge Taranto Doesn't there...

32:49 Again, on the assumption, which I, you know,

32:54 which I know you disagree with,

32:57 but on the assumption that 311 reflects

33:01 a limitation of the bases of an IPR challenge,

33:10 then must not there be some basis,

33:14 some...

33:15 I'm sorry, some rule for cabining the use

33:19 so that there isn't essentially

33:23 a wholesale elimination of what's...

33:26 of the restriction in 311 whereby evidence

33:30 is introduced as part of the petition,

33:36 none of it in the form of a prior art patent

33:40 or a prior art patented printed publication,

33:44 but saying,

33:45 here are all of the things

33:46 that practitioners in the field knew

33:49 from some expert, for example,

33:51 with nothing cited, just...

33:52 But, you know, evidence.

33:53 So it's not as good as an admission,

33:55 but nevertheless, it's evidence.

33:56 All of that could essentially supply,

34:00 I don't know,

34:01 the lion's share of the case for obviousness

34:06 as long as there is one prior art patent

34:09 or prior art printed publication

34:11 that is cited for some of it.

34:14 Appellant Attorney (Jennifer Loraine Swize) So, Your Honor, I will agree with you initially

34:18 that under your hypothetical,

34:21 there has to be at least one prior art patent

34:23 or prior art printed publication.

34:25 But then I would say from there,

34:29 there really should not be a limit

34:31 when it comes to an admission.

34:33 Admissions are 100% reliable.

34:36 They cannot be challenged.

34:37 There's an estoppel associated with them.

34:39 And if the admission is such that it takes up

34:43 the majority of the limitations quantitatively

34:47 or qualitatively, as long as it's not all of them,

34:50 there's no reason, you know,

34:51 certainly based on the plain and ordinary meaning of basis

34:54 in Section 311,

34:56 that there should be some further cabining

34:59 of how the applicant-admitted prior art could be used

35:03 or, to expand on your hypothetical, sir,

35:05 or at least address it,

35:07 general knowledge as defined in Phillips.

35:11 Judge Chen So this is Judge Chen.

35:13 As I understand it, it's starting to sound like,

35:17 for you and I guess Apple,

35:20 the word basis in Section 311 ,

35:23 basis of prior art consisting of patents

35:25 or printed publications,

35:27 as long as you have a prior art reference

35:33 that is being used to match up with one claim limitation,

35:38 no matter how qualitatively insignificant

35:41 that claim limitation is,

35:44 is that good enough if you're relying on something else,

35:48 whether it's AAPA or general knowledge

35:51 of the skilled artisan,

35:52 to satisfy the rest of the claim limitations,

35:57 whether that's 10, 20, or 30 limitations,

36:00 as well as the general knowledge of the skilled artisan

36:04 for supporting a motivation to combine that reference

36:09 with the AAPA or knowledge.

36:13 Is that your view of basis?

36:17 Appellant Attorney (Jennifer Loraine Swize) So, Your Honor, our view of basis

36:19 is that it actually does not do the work

36:23 that the director puts on it.

36:25 So I'm answering the hypothetical,

36:26 assuming, I have to agree,

36:28 that basis is actually limiting the grounds

36:31 to a prior art patent or publications.

36:34 But that caveat, to answer your question,

36:36 I think we have to look at the,

36:38 you always look at the collection of prior art together,

36:41 and all limitations matter, right?

36:44 And so I would say if you've got whatever is qualifying

36:48 as the prior art,

36:50 whether it be applicant-admitted prior art

36:53 or general knowledge,

36:55 we shouldn't be ranking the limitations

36:59 in some sort of quantitative or qualitative order

37:02 and then deciding what can be filled in by,

37:06 you know, a prior art patent

37:08 or a prior printed publication

37:11 and what can be filled in by admissions

37:15 or general knowledge.

37:17 I think that's not really how a 103 analysis works.

37:20 The traditional 103 analysis assumes

37:22 all the prior art is before a pasita

37:24 and then, you know, proceeds for the,

37:27 whether there's a motivation to combine.

37:29 And I will say there's nothing in Phillips that suggests...

37:32 Judge Chen Is your answer to my question yes,

37:35 that that is how you can understand

37:38 basis of prior art consisting of patents

37:40 or printed publications?

37:41 So long as you have a prior art reference

37:46 being asserted for one limitation of a claim,

37:50 no matter how insignificant that limitation is,

37:52 then it's okay.

37:55 Then that satisfies the requirements of 311 ,

37:59 even though you may be using AAPA

38:02 or knowledge of the skilled artisan

38:04 for the remaining 20 claim limitations

38:06 as well as the case for motivation

38:08 to combine the knowledge of the skilled artisan

38:11 with the asserted reference.

38:14 Appellant Attorney (Jennifer Loraine Swize) So, Your Honor, yes.

38:15 I think my answer is yes to the caveat

38:17 that we don't view on the basis of

38:19 as limiting 311 to prior art patents

38:23 and prior printed publications.

38:24 Judge Bryson Ms. Degnan, this is Judge Bryson.

38:26 You touched on a point that has been troubling me

38:30 a little earlier when you alluded

38:33 to the scope of the estoppel.

38:36 Are you suggesting that the estoppel in a case,

38:41 in which there is non-prior art

38:47 that is used as support for finding 103 obviousness,

38:53 would extend to all of the kind of evidence

38:57 that's being used in a supportive role?

39:03 Appellant Attorney (Jennifer Loraine Swize) So, Your Honor, I was not suggesting

39:06 in terms of Section 315, estoppel after an IPR.

39:11 I have come to a final written decision.

39:14 I am not suggesting anything of that sort.

39:16 I was saying that an admission,

39:17 I was describing the estoppel

39:19 as why an admission is inherently reliable

39:21 because it cannot be disputed.

39:23 The patent owner who is the master

39:26 of his own patent application

39:28 can be held to what he says there

39:31 because he's estoppel otherwise.

39:33 I was not...

39:34 Judge Bryson So, you're not talking about the kind of IPR estoppel.

39:38 You're talking about estoppel,

39:40 just prohibiting a party from contradicting himself.

39:44 Appellant Attorney (Jennifer Loraine Swize) That's exactly right, Your Honor.

39:46 I'm sorry if I...

39:46 All right.

39:47 Judge Bryson But now, turning to the question of estoppel,

39:50 if we were to agree with you,

39:53 with your construction of the statute,

39:58 I assume that that would mean

40:00 that the estoppel would be broadened similarly.

40:05 Appellant Attorney (Jennifer Loraine Swize) Right.

40:05 So, I understand your question, Your Honor,

40:07 that should an applicant admitted prior art

40:13 be allowed to be used as part of the grounds in an IPR.

40:18 I would think that the fact that it was used

40:22 and it was addressed would the estoppel...

40:24 Right.

40:24 Judge Taranto But just to put a point on it,

40:27 as you know, the estoppel is not limited to what was used,

40:30 but what reasonably could have been used.

40:34 So, why wouldn't it be true that under your view,

40:37 which is not limited to AAPA,

40:39 but to any kind of evidence

40:41 of what people would know,

40:45 including things on sale and things in public use,

40:49 that the estoppel would extend to anything

40:52 that the petitioner could have invoked in the proceeding?

40:58 Could reasonably, I think.

41:00 Is that the language?

41:01 I think that's the language of 315.

41:03 Appellant Attorney (Jennifer Loraine Swize) So, Your Honor,

41:04 we are actually cabining it to applicant admitted prior art.

41:07 I mean, that is our argument here.

41:10 And I would agree with you that...

41:11 Judge Taranto I don't know.

41:12 Just to be clear,

41:13 what in the world is the logical basis for that?

41:17 It's just, again,

41:19 it's assuming it is not, you know,

41:25 a prior art patent and a prior art patented publication.

41:28 Your view is that anything else that establishes prior art

41:35 is fair game as long as there is one of those two types

41:39 in the proceeding,

41:40 which would suggest that establishing

41:42 estoppel would extend to barring in a district court proceeding

41:47 or other later PTO proceedings

41:50 the invocation of that entire other world of prior art.

41:57 Appellant Attorney (Jennifer Loraine Swize) So, Your Honor,

41:58 I don't think we're saying it can be literally anything else.

42:01 We are saying that it can be applicant admitted prior art

42:04 and it can be general knowledge under Phillips.

42:07 And so I'm not sure we're extending it further than that.

42:11 And the benefit of that...

42:14 Judge Taranto Forget for a minute about what you are asserting.

42:17 Why would the consequence not be what I am asking about?

42:29 Appellant Attorney (Jennifer Loraine Swize) So, unfortunately,

42:31 I think your hypothetical is in some ways so unbounded

42:34 it's difficult to answer.

42:36 I can answer it with respect to applicant admitted prior art.

42:40 But then in terms of, you know,

42:42 moving beyond that because applicant admitted prior art

42:45 is a known concrete universe.

42:47 It has to be in a patent.

42:49 Or in a printed publication.

42:50 And there's not going to be a lot of debate

42:52 as to what the admission was.

42:54 And so I would agree with you on that point

42:56 with respect to applicant admitted prior art,

43:00 the estoppel should extend to wherever such admissions

43:04 arise in a patent or a printed publication.

43:06 Judge Chen Could it be that what's going on in 311B

43:10 is that it's restricting the types of Section 102 prior art

43:17 that can be...

43:19 the basis for an IPR?

43:21 So, therefore, assuming for the moment

43:24 we're talking about 102A prior art patents

43:31 and printed publications,

43:33 those documents that predate the invention,

43:39 this phrase prior art consisting of patents

43:43 or printed publications is necessarily, therefore,

43:45 excluding the other types of 102 prior art.

43:49 The other types of 102 prior art are, for example,

43:49 like evidence of sales or evidence of public use.

43:55 And as for knowledge of others,

44:00 well, we've already said that the knowledge

44:05 of a skilled artisan is always something

44:07 that is relevant and usable in an IPR.

44:15 And so, therefore,

44:19 Therefore, of course, you can't rely even in part on commercial sales or public uses in an IPR

44:30 because this phrase necessarily excludes that by limiting the universe to patents or printed publications

44:40 that predate the invention.

44:45 Appellant Attorney (Jennifer Loraine Swize) So if I understand your question, you're saying can we rely on interpretation of 311B

44:53 as cabining in the later estoppel, and I think the way you articulated it is a good framework.

44:59 Judge Chen Yeah, this is me thinking about Judge Toronto's question with you as to whether your position is so broad

45:13 that the consequence of it, the logical conclusion would be that you're basically allowing everything in

45:22 that could be deemed prior.

45:24 And the answer is, well, maybe the text wouldn't allow that for things like evidence of sales and public uses.

45:34 Appellant Attorney (Jennifer Loraine Swize) Right, so if I could respond to that.

45:35 Our position is not so broad that evidence of public use and public on-sale bar,

45:42 the things that the legislative history specifically say should not be included

45:46 because they are sort of a messy dispute that is difficult for the office to administer.

45:51 We are not saying that.

45:52 We're saying admission.

45:53 So admissions are easy to identify.

45:58 They don't implicate any sort of messy disputes or investigation by the office.

46:03 And so only admissions, and the scope, there's a well-established body of law as to what an admission is.

46:09 Only admissions, applicant-admitted prior art is what we're talking about.

46:13 We are not expanding it to include things like public use or on-sale bar.

46:17 Judge Taranto I'm sorry, what is it an admission of?

46:22 Suppose it's just an admission.

46:23 It's an admission that something was in public use.

46:27 Appellant Attorney (Jennifer Loraine Swize) So I would say you're on to that question, that hypothetical.

46:29 If the background of a patent says, you know, figure one depicts a circuit that was sold in 1990,

46:40 that's an admission and that can be used.

46:45 Judge Taranto And can I just ask, right, can I just, I just noticed the following, and I have no idea if it's significant.

46:52 The estoppel provision uses the word ground, not basis.

46:55 Is that?

46:56 Does that have any significance?

46:59 Appellant Attorney (Jennifer Loraine Swize) So, Yaron, I would say that, you know, this sort of equating basis to ground is not necessarily appropriate.

47:07 And so, you know, to the extent that there's a distinction there, that would matter.

47:12 Again, there's nothing in the ordinary meaning of basis or any sort of construction of basis that limits it necessarily to ground

47:19 or, you know, allows the sort of rewriting the statute we see both the patent office and Qualcomm do.

47:29 Judge Taranto Any further questions from the panel?

47:34 Hearing none, I think we should move on and hear rebuttal from Ms. Sweezy.

47:40 I think you reserved five minutes.

47:43 Why don't you see if you need any more than that?

47:47 Appellant Attorney (Jennifer Loraine Swize) Okay.

47:48 Thank you, Judge Toronto.

47:49 I appreciate it.

47:50 Let me start off.

47:51 I think I can address this in about four or five points that I'd like to make, the first two being hopefully quite simple.

47:58 I heard the directors.

48:00 The counsel suggests that the statute might depend on the technology.

48:04 It does not.

48:05 The statutory language is clear, and Congress limited the types of prior art that can be used to specific categories.

48:11 It doesn't depend on what technology might be at issue.

48:14 Second, Apple is attempting, with its reliance on purported admissions, to graft on an additional category,

48:22 which is also contrary to the statute.

48:24 We do need to understand that Apple is attempting to use this as a prior art patent,

48:30 and it is not.

48:30 We have to go back to the statute.

48:32 And Judge Chen, with respect to your contemplation about statements about prior art sales,

48:38 the 674 patent and the figure is no different than other types of alleged admissions.

48:45 If they are not the type of prior art that is contemplated by Section 311 ,

48:50 it cannot be part of the combinable art.

48:53 So, for instance, an admission about a prior art use or sale would not qualify for the same reasons that these statements do not.

49:00 And I think I really want to hear your response.

49:02 Well, I would like to address the court's questions about VA versus general knowledge.

49:10 And it really is a distinction.

49:12 And in terms of the mission for the base, how the court might think about it,

49:19 I would suggest looking at the Yetta case at page 1041 and the Randall versus Ray case at page 1362.

49:29 The court there consistently recognizes that there is, on the one hand, evidence that can be used as a basis in an IPR,

49:38 the asserted reference.

49:39 Prior art patents and prior art printed publications.

49:42 And on the other hand, evidence that can be used to understand a motivation to combine or modify those references.

49:50 And the court in Yetta, for instance, says other types of evidence cannot be applied independently,

49:59 but could inform in their proper supporting roles how a person of ordinary skill in the arts might understand those references

50:06 or be motivated to combine or modify them.

50:09 Judge Chen Ms. Sweet?

50:10 Just a quick question.

50:11 What is your side's position on the PTO's request that we remand this?

50:19 Appellant Attorney (Jennifer Loraine Swize) Yes, Your Honor.

50:20 That was one of my other points.

50:21 There is no basis or need for a remand here.

50:25 This is a statutory interpretation question.

50:27 Apple asserted grounds that were outside the scope, and the Board relied on those.

50:32 And there is no open or alternate ground for the Board to reconsider on remands.

50:38 Judge Chen Here's another question.

50:39 I know you preserved some kind of Arthrex-related argument in your briefing.

50:44 Hypothetically, what if three weeks from now the Supreme Court issues an opinion in Arthrex that does its own fix to the statute

50:58 and repudiates the Federal Circuit's proposed fix to render the APJs constitutionally appointed?

51:10 And so, therefore, the conclusion would be that the Board panel that decided your case was, at that time, not properly appointed under the Constitution.

51:27 Would you want a remand under that situation, or would you want us to keep going?

51:32 Appellant Attorney (Jennifer Loraine Swize) Especially, Your Honor, we would have to evaluate that at the time, but the simplest course would be to reverse,

51:41 because the grounds did not fall within the basis articulated properly under Section 311 .

51:47 And this relates to the remand question in the sense that I believe Apple, or at least the Board, suggested that there is some sort of factual inquiry that the Board

51:58 sorry, that the Director suggested there's some sort of factual inquiry that the Board could undertake.

52:03 That is not correct.

52:04 This Court, for instance, in Phillips, is fully capable of evaluating whether Apple

52:10 actually brought a ground on some other basis, and it did not.

52:14 For instance, the petition never refers to general knowledge or common knowledge.

52:19 Its expert declaration does not.

52:22 In fact, there is no reference in the entire appendix other than in the Director's guidance at the very back to anything about general knowledge.

52:29 And this is the point I wanted to also make in relation to this proper basis use that does not fall under Section 311 .

52:40 The person of ordinary skill in the arts.

52:49 This Court, in the general knowledge.

52:52 And that is because of the hindsight concerns.

52:55 Yes, Your Honor.

52:56 Judge Bryson Yeah, I'm sorry.

52:57 Were you done with that point?

52:58 Appellant Attorney (Jennifer Loraine Swize) I just wanted to reiterate that this Court has made clear that is because of the hindsight concerns of Section 103, and it needs to be substantiated.

53:07 Importantly here, Apple never brought that issue, but that, I think, is a principal distinction between the statements themselves and how they might be understood by a person of ordinary skill.

53:18 And in Phillips, this Court understood that the Board there,

53:21 provided on multiple types of evidence to inform the general knowledge, not simply statements in the patent itself, which would be improper for supplying a limitation for purposes of Section 311 .

53:32 Judge Bryson Ms. Swayze, a while back, you mentioned the special status of AAPA.

53:40 And I just wonder, what if you had a case in which there is an admission made in the patent itself,

53:50 and the day after the patent issued, the applicant, now the patentee, gave a lecture in which he discussed the patent and described the prior art.

54:03 Would that be admissible, whereas the AAPA

54:07 Appellant Attorney (Jennifer Loraine Swize) Section 311 , no, I don't think so, Your Honor, because those statements would not themselves be a prior art patent or a prior art printed publication.

54:23 Judge Taranto Can I just ask one question, which has, I think, nothing to do with the AAPA?

54:30 The merits that we've been talking about.

54:32 Do I understand correctly from the statement of related cases that there is no live private dispute between Com and Apple over this patent?

54:44 Appellant Attorney (Jennifer Loraine Swize) That is correct.

54:46 The cases were litigated to a point, and Apple did, in the ITC, bring in validity challenges, which this patent survived.

54:55 But those cases have since been resolved.

54:57 The basis for the challenge claims being found unpatentable is the one ground on which the Board relied, the one basis that was outside the scope of Section 311 .

55:09 Judge Taranto Okay.

55:11 I think we should wrap this up, then.

55:14 And I thank all counsel and say that the case is submitted.