trials@uspto.gov
`571-272-7822
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`IPR2014-00785, Paper No. 40
`June 23, 2015
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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`GLOBAL TEL*LINK CORPORATION,
`Petitioner,
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`v.
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`SECURUS TECHNOLOGIES, INC.,
`Patent Owner.
`____________
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`IPR2014-00785
`Patent 6,636,591
`____________
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`Held: June 3, 2015
`____________
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`BEFORE: KEVIN F. TURNER, BARBARA A. BENOIT, and
`GEORGIANNA W. BRADEN, Administrative Patent Judges.
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`The above-entitled matter came on for hearing on Wednesday,
`June 3, 2015, commencing at 1:01 p.m., at the U.S. Patent and
`Trademark Office, 600 Dulany Street, Alexandria, Virginia.
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`571-272-7822
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`IPR2014-00785, Paper No. 40
`June 23, 2015
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`GLOBAL TEL*LINK CORPORATION,
`Petitioner,
`
`v.
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`SECURUS TECHNOLOGIES, INC.,
`Patent Owner.
`____________
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`IPR2014-00785
`Patent 6,636,591
`____________
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`Held: June 3, 2015
`____________
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`
`
`
`BEFORE: KEVIN F. TURNER, BARBARA A. BENOIT, and
`GEORGIANNA W. BRADEN, Administrative Patent Judges.
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`The above-entitled matter came on for hearing on Wednesday,
`June 3, 2015, commencing at 1:01 p.m., at the U.S. Patent and
`Trademark Office, 600 Dulany Street, Alexandria, Virginia.
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`IPR2014-00785
`Patent 6,636,591
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`APPEARANCES:
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`ON BEHALF OF THE PETITIONER:
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`MICHAEL D. SPECHT, ESQUIRE
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`Sterne Kessler Goldstein Fox
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`1100 New York Avenue, N.W.
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`Washington, D.C. 20005
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`ON BEHALF OF PATENT OWNER:
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`JEFFREY R. BRAGALONE, ESQUIRE
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`Bragalone Conroy PC
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`Chase Tower
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`2200 Ross Avenue
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`Suite 4500 W
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`Dallas, Texas 75201-7924
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`IPR2014-00785
`Patent 6,636,591
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` P R O C E E D I N G S
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`JUDGE BENOIT: Good afternoon, everyone. I'm
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`Judge Benoit and appearing on the video are Judges Turner and
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`Braden. We are convened today for oral argument in
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`IPR2014-00785, which challenges U.S. Patent 6,636,591.
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`Each side has one hour to argue. The Petitioner has the
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`ultimate burden of establishing unpatentability and will argue
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`first. Both parties may reserve rebuttal time.
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`Judge Turner and Judge Braden will not have the
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`benefit of visual cues in the room. So when you speak referring
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`to an exhibit or demonstrative, please identify it by page or slide
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`number before you start to speak. Also, when you begin your
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`argument, please identify yourself and the party you represent so
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`the record will be clear.
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`Briefly before we begin with your arguments, we would
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`like to address the panel's objections to each other's
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`demonstratives, which were filed by each party on May 30th. We
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`would like to remind the parties that demonstratives are not
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`evidence, but rather they are aids to facilitate our understanding
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`of your presentations today.
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`The panel is capable of determining whether
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`information in a demonstrative is improper and we will not rely
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`on improper information in our final written decision. Also,
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`there's no jury here and so that there's no jury that might be
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`confused by such information. Therefore, we're not going to
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`spend time this afternoon ruling on or discussing any of the
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`objections.
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`With that, Petitioner, you may begin when ready.
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`MR. SPECHT: Good afternoon, Your Honors. My
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`name is Michael Specht. I'm a partner and head of the
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`Electronics Practice Group at Stern Kessler Goldstein & Fox. I'm
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`here today with Dr. Steven Peters, one of the backup counsel,
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`also of Sterne Kessler. I also have two of our other backup
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`counsel, Mr. Yonan and Mr. Ray, from our firm also in
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`attendance.
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`I am here on behalf of Global Tel*Link and we would
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`like to reserve 30 minutes of our time for rebuttal.
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`Your Honors, Petitioners have demonstrated that all
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`claims of the '591 patent are unpatentable. Patent Owner has
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`provided no credible evidence or arguments to rebut this. Today
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`we simply want to highlight our key arguments, discuss the flaws
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`in their positions and answer any questions that you may have.
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`I am putting up slide number 2. Just to remind us of the
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`instituted grounds, there's one instituted ground. It is an
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`obviousness based rejection. It rejects all Claims 1 through 10 of
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`the '591 patent. Claims 1 and 9 are the independent claims. They
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`are very similar and there are two references, the Karacki
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`reference and Gainsboro '843 that are the references of interest
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`today.
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`Your Honors, in instituting this trial, the panel citing
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`KSR commented, obviousness must be gauged in a view of
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`common sense and the creativity of a person of ordinary skill in
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`the art. Obviousness can be established when the prior art itself
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`suggests the claimed subject matter to the person of ordinary skill
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`in the art.
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`Your Honors, we believe that we have demonstrated
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`both under common sense as well as the art that the '591 patent
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`claims, all of the claims are obvious.
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`The '591 patent is directed towards affecting inmate
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`behavior -- and I'm on slide 3 -- affecting inmate conduct through
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`providing discounted telephone rates based on certain criteria.
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`There are two general concepts there. One is inmate programs,
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`inmate incentive programs to promote good behavior and
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`telephone discounts.
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`Inmate incentive programs have been around for
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`centuries. As the demonstrative states, the notion of good time
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`where inmates are rewarded for good behavior with early release
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`was first passed in the law in 1817. This notion of inmate
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`incentive programs, it's been around for centuries and, in fact, in
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`the Karacki reference it notes that it can hardly be said that there's
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`something new or revolutionary in a correctional method, which
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`provides external rewards for positive behavior. On the contrary,
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`such reward systems tend to be the very cornerstone upon which
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`most institutional programs are built. This appeared in the
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`Karacki reference, a reference that's 30 years prior to the
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`application date of the '591 patent. So, clearly, inmate incentive
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`programs are well-known and have been around for a long time.
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`Likewise, telephone discounts based on behavior are
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`well-known. As the declaration of our expert, Dr. Len Forys, as
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`he knows, Dr. Forys is an individual with 40 years of experience
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`in telecommunications, 30 of which he has been dealing with
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`prison communication systems.
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`He notes, telephone companies have been rewarding
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`and incentivizing subscribers with discounts since at least the
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`1920s. In the 1990s, increased competition and long distance
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`market led to a more creative discount rewards, discounts for
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`subscribers for a variety of reasons.
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`Your Honors, so that the key concepts here, inmate
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`incentive programs, discounts for telephone service, these have
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`been known for not -- not years, decades and even centuries. So
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`common sense tells us this patent, these claims are obvious.
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`Now, turning to the claims. If we look on the claim --
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`now I'm putting up slide 8. Slide 8 is of Independent Claim 1.
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`Independent Claim 1 simply has providing an ID for an inmate,
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`well known, establishing a discount telephone rate, well known as
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`we've just discussed.
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`As we go through this, one of ordinary skill in the art
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`without even looking at a reference, this claim is obvious. In fact,
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`Your Honors, anyone who's used the telephone and received a
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`discount would look at this claim and find that it's obvious.
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`Essentially you behave in a certain way, you get a discount. If
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`you don't behave in that way, you lose the discount. That's what
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`this patent is claiming. It is obvious just looking at it from a
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`common sense perspective.
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`JUDGE BRADEN: Excuse me, counselor.
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`MR. SPECHT: Yes, Your Honor.
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`JUDGE BRADEN: I know that you have a certain
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`order that you were probably going to go in.
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`MR. SPECHT: Sure.
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`JUDGE BRADEN: But I would like to go in the order I
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`would like to go in and so I would like for you to address your
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`argument number 4 first about claim construction. Because
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`looking here at the claim, there's both establishing a discount
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`telephone rate and reducing the telephone charge rate for inmates
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`that meet the measurement of conduct during incarceration for a
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`predetermined period of time.
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`I'd like you to address claim construction, what you
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`believe the claim construction should be, why it should be and
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`let's go from there, and then we can address, you know, your
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`other arguments, but I'd like to go to that one first, please.
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`MR. SPECHT: Sure. So I'm going to put up to help in
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`that discussion our slide 20, which talks about the first element,
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`establishing a discount telephone rate. And so, here, we
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`presented a construction, Petitioner's construction establishing
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`rate reductions for telephone calls originating from the
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`correctional facility.
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`The Board presented an initial construction in the
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`Institution Decision essentially the same, but for the fact that they
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`added or you added and the service provider limitation narrowing
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`this construction.
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`My first comment is that to a certain extent, the
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`construction is irrelevant. These claims are obvious under either
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`the Board's construction or our construction. With respect to our
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`differences in the construction and why we think the Board's
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`construction is overly narrow, it results from the fact if you look
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`at the specification, there's a single embodiment encompassing a
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`service provider is not enough.
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`If you look at Figure 1 and the discussion in the
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`specification, it refers back to the single figure of this patent, and
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`let me put that figure up.
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`Okay. So it's discussing this particular embodiment,
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`and this is on slide 9.
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`JUDGE BRADEN: Which figure? Okay.
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`MR. SPECHT: Figure 1 from the patent, slide 9 from
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`our demonstratives. And in here the example, the embodiment --
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`and they start off the discussion by saying Figure 1 is an
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`embodiment, right, and this is what I call a non-premised based
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`system. So what you see here in this embodiment is where these
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`databases 18 in the service bureau, those are within the service
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`provider, right?
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`And that's the embodiment they're describing in the
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`specification with respect to Figure 1, but the specification also
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`goes on to say that you can have a premise-based embodiment
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`and that premise, referring again back to slide 9, Figure 1, 12 is
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`the premise-based system.
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`So what happened in that scenario is simply these
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`databases 18 would essentially be off of 12, right, and so the
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`premise or the prison could provide those rate discounts before it
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`even gets to the central office, so you would have two ways of
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`establishing the discount rate, one within the network, within the
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`network of the service provider network, and also here within the
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`premises, and that's supported in the spec where you have the
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`notion of they're talking about an embodiment where they've
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`established rate reductions with the service provider, but those
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`same rate reductions could be established just within the premise
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`in a database that was here.
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`JUDGE BRADEN: I guess my question is, if you make
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`systems where they're on the premise, they establish a discounted
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`rate, does that mean that if an inmate has good behavior and they
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`get the discounted rate, does that mean that the prison then pays
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`what the inmate -- the difference between their discounted rate
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`and the rate that they get from the telecom provider? Does that
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`mean that the prison is paying that difference?
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`MR. SPECHT: It could be. It could be that the prison
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`ways of looking at the discount rate. One is a discount rate is
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`actually between the charge to the inmate and one is a rate that is
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`a negotiated rate between the prison and the service provider,
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`right?
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`And so that rate that exists between the prison and the
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`service provider, that doesn't need to necessarily be coupled with
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`the rate that you're providing to the inmate. Those could be two
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`different things. And in a context like this -- go ahead.
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`JUDGE BRADEN: Isn't that the case in Claim 1? You
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`have those two different steps. You have establishing a
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`discounted telephone rate, i.e., between the prison and the
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`telecom provider and then reducing the telephone charge rate for
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`inmates, i.e., between the prison and the inmate.
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`MR. SPECHT: Yeah, so, again, I think we're sort of
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`conflating two different concepts. The patent itself, the
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`specification talks about establishing the discount rate and it talks
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`about the discount rate being applied to the calls from the end
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`user, in this case the inmate, right? And that's not necessarily the
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`same rate that has been negotiated between a prison and the
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`service provider itself.
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`When you get to the element of reducing the charge
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`rate, again, what we're saying is what that reduction of the caller
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`charge rate is now, element 1.4, that's simply where you have a
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`standard telephone rate for the inmate and they get a discount off
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`of that, and in Karacki that discount is going from some amount,
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`a dollar per call to zero for the call.
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`So it's a discount. That doesn't necessarily have to be
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`tied to the underlying rate that's negotiated between a prison and a
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`service provider. Those could be different things. Typically in a
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`situation where you're looking to have a profit and that rate is
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`going to be higher than the rate that's negotiated between the
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`prison or a hotel, for example, a hotel and a service provider.
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`Does that answer your question?
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`JUDGE BRADEN: Okay. I think I understand your
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`position.
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`MR. SPECHT: Coming back to the issue of the
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`construction, either way the Karacki and Gainsboro reference
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`suggests this element. They suggest the --
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`JUDGE TURNER: A quick follow-up. You're talking
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`about Figure 1, but isn't there just a single figure in the patent?
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`MR. SPECHT: Oh, that's correct.
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`JUDGE TURNER: Okay. And so I guess when you
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`them illustrated? So having the single figure would seem to
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`indicate that there's a single embodiment and that's the reason
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`why, you know, we've drawn the claim construction to include
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`the service provider, because that's the only thing disclosed.
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`MR. SPECHT: Yeah, well, actually to the first part of
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`your question, Your Honor, I don't believe you need a figure for
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`specification specifically does identify that there can be a
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`premise-based solution, a different embodiment to a service
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`provider embodiment.
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`JUDGE TURNER: And point that out to me directly,
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`because I'd like to know where you're pointing to.
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`MR. SPECHT: We'll get that in a second, that
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`particular cite. We address that in our reply, our Petitioner's
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`JUDGE TURNER: I know. I'd like --
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`JUDGE BRADEN: Judge Turner, that would be at
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`column 3, lines 20 through 21, stating “Alternatively the
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`equipment can be premise-based, i.e. within the correctional
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`MR. SPECHT: That's right.
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`JUDGE BRADEN: I guess my question is with regards
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`establishment of the discounted rate has to be within the
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`MR. SPECHT: In this case, yes, because they're
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`referring to this equipment, the equipment being 18, and that's the
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`databases they talk about 18, so they're talking about having that
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`equipment be premise-based. In that case, those databases are
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`what supply the discounted rates.
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`So, yes, in fact, under that scenario and a premise-based
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`solution, one of ordinary skill in the art and certainly Dr. Forys
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`would agree that it's going to be provided. The discount rate will
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`be established by the institution in that case.
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`JUDGE BRADEN: So I guess I'm not so sure that it's
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`just the databases that are premise based, because it talks at --
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`starting at line 15, service bureau 16 includes necessary
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`equipment to facilitate the method of the present invention,
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`including a processor that can link to one or more databases and a
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`collection and detection device, such as a DTMF collection and
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`detection device, for receiving data entered or provided by the
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`inmate. Alternatively the equipment can be premise based.
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`Does that not seem like it's the process, sir, in the
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`DTMF collection and detection device? I don't necessarily read
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`that to be database 18 is premise based.
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`MR. SPECHT: Well, I think it goes on to say that, in
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`fact, the processor at the service bureau or is at the institution in a
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`premise-based system. That's one aspect that's there. The whole
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`point of the processor or one point of the processor is to access
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`those databases. So that would imply and it certainly implied to
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`the expert here that you could either have the situation where it's
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`here in the network or back at the premise.
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`JUDGE BRADEN: Go ahead.
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`MR. SPECHT: The bottom line, though, from our
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`perspective is under either construction and what was
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`characterized or what you found in the Institution Decision that
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`the element is disclosed under either or disclosed and/or
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`suggested, right? And so you identified in the Institution
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`Decision the notion that Gainsboro, the Gainsboro reference,
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`provides the rates back from the service provider, right? And so
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`the rates are clearly established between the prisoner -- or the
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`prison facility and the service provider. That was one thing that
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`you identified in your Institution Decision.
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`And additionally in our initial petition, right, we talked
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`about Karacki, Karachi establishing the discount rate, and then
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`we also talked about Gainsboro, how Gainsboro has time of date
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`discounts, and Gainsboro talks about those discounts being within
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`IPR2014-00785
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`a service provider and, therefore, the inmates are getting those
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`discounts, which we clarified, and that was slide 21, sorry.
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`In slide 22 Gainsboro discloses that rates are established
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`between the correctional facility and the service provider and we
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`supported that with the declaration of Dr. Forys and we go
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`through the discussion here where it talks about how rates are
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`charged about the middle of this excerpt where a rate charged to
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`the BOP, the prison facility, by the telephone service for direct
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`calls. So, clearly, there's a rate established between the two that
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`discloses this element and certainly suggests it.
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`And the only other comment I would make with respect
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`to this element, this also came up in the deposition of our expert.
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`His answer here on this issue, you know, one of ordinary skill in
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`the art -- this is slide 23 -- would understand that there's a rate
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`there. In fact, Gainsboro talks about a rate for calls. It's
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`obviously a discount of that, that's occurring here based upon
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`time of day.
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`One of ordinary skill in the art would understand that
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`how it is that rate established, it's usually negotiated between a
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`business environment and the service provider, in fact, done in a
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`competitive manner. So people understand that that's what's
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`happening. This goes to the notion of the negotiation for rates,
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`right?
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`JUDGE BRADEN: Thank you.
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`MR. SPECHT: Thank you. So with respect to sort of
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`the second part of your question, Your Honor, claim construction
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`with respect to reducing a telephone call charge rate, so
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`Petitioner's construction here was charging the discount telephone
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`rate and the Board's construction was reducing the standard
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`telephone charge rate.
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`Here, the Board's construction is actually broader. It
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`would encompass charging the discount telephone rate, as we
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`understand it. So you're reducing the telephone charge rate. So
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`certainly going from a standard rate to the discount rate
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`establishing Karacki would meet that claim construction, the
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`Board's claim construction.
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`And with respect to that element -- well, as we said
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`earlier -- I'm now on slide 28 -- telephone discounts have been
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`known since at least the 1920s. This is nothing new, reducing a
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`telephone call charge rate, providing a discount.
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`As we've identified in Karacki, as I just indicated,
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`Karacki establishes a discount rate of zero for the caller, a
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`hundred percent dropping the call from, you know, a standard
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`rate to zero. Gainsboro also discloses applying discounts to
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`inmates. So individually they all teach or suggest this particular
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`element and certainly in combination they do.
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`Does that answer your questions on those two elements?
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`JUDGE BRADEN: Yes, it did. Thank you. And if you
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`wouldn't mind going ahead and going to your discussion about
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`motivation to combine Karacki and Gainsboro.
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`MR. SPECHT: Sure.
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`So now I'm going back to slide 12. Slide 12 -- first of
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`all, Karacki is analogous art. In re Klein cites there a reference is
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`analogous prior art, if the art is from the same field or endeavor
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`regardless of the problem addressed.
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`And then further clarification, In re Clay states that if a
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`reference relates to the same problem as the patent, that fact
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`supports the use of that reference in an obvious rejection. So
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`that's the standard we're working under.
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`And then turning to slide 13, what we have here is on
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`the left-hand side we have an excerpt from Karacki, Karacki page
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`22 where it clearly states is a method, Karacki provides a method
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`by which students, in this case the students are inmates in this
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`detention center, are, in effect, rewarded for appropriate behavior.
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`On the right-hand side is the excerpt from the '591
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`patent. And, again, I'm just looking at the claim. It's a method of
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`affecting inmate behavior within a correctional facility. So
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`clearly these are analogous. They are trying to save or solve the
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`same problem. So sort of that threshold question of is this
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`analogous art? Absolutely.
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`And with respect to the second part of the analysis, the
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`motivation to combine -- this is now slide 14 -- so we believe that
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`the motivation to combine was articulated very clearly in our
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`petition and the supporting declaration of Dr. Forys where he
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`identified a number of reasons why you would combine these
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`references.
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`Karacki talks about an incentive system that provides
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`for discounted telephone service and Gainsboro is a system
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`within a prison for providing phone services to inmates. You
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`would combine those two naturally to automate the process in
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`Karacki with the processes in Gainsboro. That automation, as he
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`says here, would be motivated to combine Karacki's inmate
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`reward system to provide automated control of inmates' points,
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`saving the correctional facility time and money.
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`So there's a clear motivation there to do this. It also
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`would enable, as he goes on to further say, enable a greater range
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`of privileges for inmates and prevent the transfer of points, other
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`benefits that you get from the automation. So we think there is a
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`very clear motivation why one would combine these two
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`references.
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`And the other comment we have with respect to this is
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`Patent Owner has made an argument. They state here -- I'm on
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`slide 15 and reading the portion that's highlighted in yellow.
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`Because both Karacki and Gainsboro are missing these
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`limitations, which is referring back to the limitation of providing
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`discount telephone rates, a skilled artisan would have no
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`reasonable expectation of success in so modifying the prior art
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`and their combination is improper.
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`There's no legal precedent presented there. They cite to
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`the declaration of their alleged expert and this is not the test. In
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`fact, what Dr. Forys identified is parties would -- a person of
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`ordinary skill in the art would combine these with a reasonable
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`expectation of success.
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`This is a very simple combination and you would have
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`predictable results. The Board recognized this in the Institution
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`Decision, finding that there would -- that combining these two
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`references would not require any undue experimentation, which
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`we agree. This is a simple combination.
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`Your Honor, any other questions on motivation to
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`combine?
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`JUDGE BRADEN: Real quick, though, because you
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`mentioned a person of ordinary skill in the art, in your petition I
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`believe that you talk about what you believe is a person of
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`ordinary skill in the art and I believe that your expert also
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`testified to this as being somebody with an associate degree in
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`electrical engineering, computer science or equivalent field with
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`one or two years of industry experience.
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`Is that still your position?
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`MR. SPECHT: That is still the position. We're okay
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`with the position in the Institution Decision that there's not that
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`much difference between those two. The whole point is we don't
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`believe it requires a whole lot of experience to understand this
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`patent. A person of ordinary skill in the art is only going to be
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`required to have a fairly minimal amount of experience, so we did
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`not provide any additional arguments on the construction. We've
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`accepted the Board's -- or my construction, but for a person of
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`ordinary skill in the art accepted that and have no objections to
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`that or arguments.
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`JUDGE BRADEN: Okay. Thank you.
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`MR. SPECHT: Since I have about five minutes left
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`here, what I would like to do is jump to -- first, let me ask you,
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`Your Honor, if you have any other specific questions on our
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`positions that you'd like me to jump to or any of the --
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`JUDGE BRADEN: I do not.
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`MR. SPECHT: -- judges?
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`So that being the case, what I'd like to do is jump to our
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`comments with respect to the alleged expert here of the Patent
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`Owner.
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`We do not believe that their expert, Dr. Akl, is credible.
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`This is slide 38 I believe. I'm sorry, 39.
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`So, first of all, on the record Dr. Akl admitted he had no
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`knowledge of institutional telephone rates, the first point. He also
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`testified under oath that he didn't know whether the general
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`concept of discounted telephone calls were known in 2000, the
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`application date of the patent, and he further stated on the record
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`that he has no expertise in the history of prison telephone
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`systems. These are the core concepts of this patent.
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`JUDGE BRADEN: But, counselor, didn't you just say
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`that this was a fairly simple concept, in that you really just needed
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`somebody who had kind of a EE degree with one year of
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`experience? I mean, does he have to have knowledge of
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`institutional phone rates to be a person of ordinary skill?
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`MR. SPECHT: Well, he's holding himself out as an
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`expert, not a person of ordinary skill in the art, so I don't believe
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`he even qualifies, frankly, as a person of ordinary skill in the art,
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`let alone the expert that he's holding himself out to be. So these
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`are -- I mean, these are statements he made.
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`Furthermore, during his deposition he repeatedly
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`indicated he had no opinion, no opinion, no opinion, wasn't
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`familiar with that, didn't look at this in the transcript.
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`Furthermore, if you look at an additional reason why no
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`weight should be given to his testimony -- I'm now on slide 40 --
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`all, and I'm going to say all, and I mean all substantive portions of
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`Dr. Akl's declaration are identical to the corresponding text of the
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`Patent Owner's response.
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`We cite there the mapping, right, between Akl's
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`declaration or Dr. Akl's declaration, paragraphs 34 through 37.
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`They match precisely to the arguments on page 7 through 9 and
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`we give the whole series of cites where it's exactly the same, but
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`for the fact that they switch out the word Securus with I, and the
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`Board, the PTAB, has said previously, merely repeating an
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`argument from the brief in the declaration of a proposed expert
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`does not give the argument enhanced probative value.
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`As examples of this, if we turn to slide 42, slide 42 puts
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`these side by side so you can see the comparison. This is one of
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`the comparisons we identified in that previous -- in our reply.
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`You know, paragraph 42 on the left-hand side of slide 42, you
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`have excerpts from Dr. Akl's declaration. On the right-hand side
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`you have the Patent Owner's response, exactly the same, that first
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`paragraph exactly.
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`The next paragraph, the only thing that changes, I take
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`no position versus Securus takes no position and so on. You can
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`see the highlights in red. It just -- and so when you combine that
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`with the fact that he has no experience in discount phone rates,
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`prisons, the inmate reward programs and it's exactly the same. It
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`really calls into question what information he's actually providing
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`and what expertise he offers to this proceeding.
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`And, lastly, the PTAB has already discredited Dr. Akl's
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`testimony in another matter that further goes to his credibility, a
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`matter that I believe, Your Honor, Judge Turner, was one of the
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`judges on. This is IPR2015-00153. This was an institution
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`decision also related to prison phone technology where the Board
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`indicated in that case, they gave little or no weight to Dr. Akl's
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`testimony. He neither explains his criteria that he applied in
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`making hi
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