UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`TIFFANY AND COMPANY,
`
`Petitioner,
`
`v.
`
`LAZARE KAPLAN INTERNATIONAL INC.,
`
`Patent Owner.
`
`Patent No. 6,476,351
`
`
`Inter Partes Review No. IPR2015-00024
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`
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`PATENT OWNER RESPONSE
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`IPR2015-00024
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`Docket No.: 614142800100
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`TABLE OF CONTENTS
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`Page
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`I.
`
`II.
`
`INTRODUCTION .......................................................................................... 1
`
`STATE OF THE PRIOR ART ....................................................................... 4
`
`III. THE ’351 PATENT ........................................................................................ 6
`
`IV. CLAIM CONSTRUCTION ......................................................................... 12
`
`A.
`
`B.
`
`C.
`
`D.
`
`E.
`
`F.
`
`G.
`
`Introduction ........................................................................................ 12
`
`The Claim Language And Specification Require That The
`“Controlling” Limitations Be Based On Electronic Image
`Information Fed Back From The Imaging Step/System .................... 15
`
`The Claim Language And Specification Require That The
`“Controlling” Limitations Use Both “Marking Instructions”
`And Electronic Image Information In Combination To Generate
`A Marking .......................................................................................... 19
`
`Prior Art Uses Of Imaging Systems Do Not Fall Within The
`“Controlling” Limitations .................................................................. 24
`
`The Prosecution History Of The ’351 Patent Supports LKI’s
`Construction Of The “Controlling” Limitations ................................ 26
`
`The 2010 Federal Circuit Opinion Is Consistent With LKI’s
`Construction Of The “Controlling” Limitations ................................ 29
`
`LKI’s Proposed Construction Is Required By The Intrinsic
`Record And Is Supported By The 2010 Federal Circuit Opinion ...... 32
`
`V. GROUND 1: FINE DIAMONDS ALONE DOES NOT RENDER
`OBVIOUS CLAIMS 1 AND 7 ..................................................................... 33
`
`A.
`
`B.
`
`Summary Of Fine Diamonds .............................................................. 33
`
`Fine Diamonds Does Not Disclose Or Suggest The
`“Controlling” Limitations .................................................................. 35
`
`VI. GROUND 2: FINE DIAMONDS IN COMBINATION WITH THE
`ILR ARTICLE DOES NOT RENDER OBVIOUS CLAIMS 1 AND 7 ..... 38
`
`A.
`
`Summary Of The ILR Article ............................................................ 38
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`TABLE OF CONTENTS
`(continued)
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`Page
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`B.
`
`Fine Diamonds In Combination With The ILR Article Does Not
`Disclose Or Suggest The “Controlling” Limitations ......................... 39
`
`C. A POSITA Would Not Combine Fine Diamonds With The ILR
`Article ................................................................................................. 42
`
`VII. GROUND 6: GRESSER IN COMBINATION WITH THE ILR
`ARTICLE DOES NOT RENDER OBVIOUS CLAIMS 1 AND 7 ............. 47
`
`A.
`
`Summary Of Gresser .......................................................................... 47
`
`B. Gresser In Combination With The ILR Article Does Not
`Disclose Or Suggest The “Controlling” Limitations ......................... 47
`
`C. A POSITA Would Not Combine Gresser With The ILR Article ...... 49
`
`VIII. OBJECTIVE INDICIA OF NON-OBVIOUSNESS FURTHER
`DIRECT A FINDING OF NON-OBVIOUNESS ........................................ 50
`
`A.
`
`B.
`
`C.
`
`The Claimed Invention Of The ’351 Patent Experienced
`Commercial Success........................................................................... 51
`
`The Claimed Invention Of The '351 Patent Was Copied ................... 56
`
`The Commercial Success And Copying Demonstrate That
`Claims 1 And 7 Are Not Obvious Over The Prior Art ...................... 57
`
`IX. PATENT OWNER’S FINAL REMARKS .................................................. 58
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`CASES
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`TABLE OF AUTHORITIES
`
`Page(s)
`
`Allen Archery, Inc. v. Browning Mfg. Co.,
`819 F.2d 1087 (Fed. Cir. 1987) .......................................................................... 51
`
`Corning Inc. v. DSM IP Assets B.V.,
`IPR2013-00048, Paper No. 96 (P.T.A.B. July 11, 2014) ................................... 42
`
`Eurand, Inc. v. Mylan Pharms., Inc. (In re Cyclobenzaprine Hydrochloride
`Extended-Release Capsule Patent Litig.),
`676 F.3d 1063 (Fed. Cir. 2012) .......................................................................... 44
`
`Fenner Invs., Ltd. v. Cellco Partnership,
`778 F.3d 1320 (Fed. Cir. 2015) .................................................................... 14, 26
`
`Gould v. Quigg,
`822 F.2d 1074 (Fed. Cir. 1987) .......................................................................... 47
`
`Graham v. John Deere, Co.,
`383 U.S. 1 (1966) ................................................................................................ 51
`
`GSI Technology, Inc., v. Cypress Semiconductor Corp.,
`IPR2014-00121, Paper No. 46 (P.T.A.B. April 9, 2015) ................................... 42
`
`Honeywell Int’l, Inc. v. ITT Indus., Inc.,
`452 F. 3d 1312 (Fed. Cir. 2006) ......................................................................... 18
`
`In re Rambus, Inc.,
`753 F.3d 1253 (Fed. Cir. 2014) .......................................................................... 13
`
`Intri-Plex Techs., Inc. v. Saint-Gobain Performance Plastics Rencol, Ltd.,
`IPR2014-00309, Paper No. 83 (P.T.A.B. Mar. 23, 2014) .................................. 51
`
`KSR International Co. v. Teleflex Inc.,
`550 U.S. 398 (2007) ................................................................................ 42, 43, 51
`
`Leo Pharm. Prods., Ltd. v. Rea,
`726 F.3d 1346 (Fed. Cir. 2013) .................................................................... 50, 51
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`Microsoft Corp. v. Proxyconn, Inc.,
`No. 2014-1542, 789 F.3d 1292,
`2015 U.S. App. LEXIS 10081 (Fed. Cir. June 16, 2015) ............................. 13, 26
`
`Phillips v. AWH Corp.,
`415 F.3d 1303 (Fed. Cir. 2005) ...................................................................passim
`
`Retractable Tech. v. Becton, Dickinson and Co.,
`653 F.3d 1296 (Fed. Cir. 2011) .......................................................................... 26
`
`SciMed Life Sys. v. Advanced Cardiovascular Sys.,
`242 F.3d 1337 (Fed. Cir. 2001) .......................................................................... 18
`
`Toyota Motor Corp. v. Hagenbuch,
`IPR2013-00483, Paper No. 37 (PTAB Dec. 5, 2014) ........................................ 13
`
`Verizon Servs. Corp. v. Vonage Holdings Corp.,
`503 F.3d 1295 (Fed. Cir. 2007) .......................................................................... 18
`
`Vulcan Eng’g, Co. v. Fata Aluminium, Inc.,
`278 F.3d 1366 (Fed. Cir. 2002) .......................................................................... 51
`
`STATUTES
`
`35 U.S.C. § 103 .......................................................................................................... 1
`
`35 U.S.C. § 311(b) ................................................................................................... 47
`
`35 U.S.C. § 316(e) ................................................................................................... 42
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`Patent Owner Exhibit List
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`Exhibit Description
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`Exhibit
`
`Judgment dated January 16, 2009, in Lazare Kaplan International, Inc.
`v. Photoscribe Technologies, Inc. et al., S.D.N.Y. Case. No. 1:06-CV-
`04005.
`
`Opinion filed February 15, 2012, in Lazare Kaplan International, Inc.
`v. Photoscribe Technologies, Inc. et al., S.D.N.Y. Case. No. 1:06-CV-
`04005.
`
`2001
`
`2002
`
`Decision dated April 19, 2013 in Lazare Kaplan International Inc. v.
`Photoscribe Technologies, Inc. et al., Fed. Cir. Case. No. 2012-1247.
`
`2003
`
`*Patent Owner’s Exhibits 2001-2003 were previously filed and are listed based on
`37 C.F.R. § 42.63
`
`Expert Report of Dr. David Trumper Regarding Invalidity of Claims 1
`and 7 of U.S. Patent No. 6,476,351 in Lazare Kaplan International, Inc.
`v. Photoscribe Technologies, Inc. et al., S.D.N.Y. Case. No. 1:06-CV-
`4005.
`
`2004
`
`Declaration of Jeffrey Bokor in Support of Patent Owner.
`
`Declaration of Necip Alev in Support of Patent Owner.
`
`Declaration of William Moryto in Support of Patent Owner.
`
`- PUBLIC - Redacted Version
`
`2005
`
`2006
`
`2007
`
`Declaration of William Moryto in Support of Patent Owner.
`
`2008
`
`- CONFIDENTIAL - Filed Under Seal
`
`U.S. Patent No. 4,467,172 to Ehrenwald et al.
`
`2009
`
`Transcript of the Deposition of Dr. David Trumper on June 30, 2015.
`
`2010
`
`Transcript of the Deposition of C. Paul Christensen on July 12, 2011.
`
`2011
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`Exhibit Description
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`Exhibit
`
`Christensen, C.P. et al., Micromachining with Waveguide Excimer
`Lasers, SPIE Volume 1835, 1992 (Referenced in Christensen 2011
`Dep, as DX 212).
`
`Christensen, C.P., Micromachining of Diamond Substrates with
`Waveguide Excimer Lasers, SPIE Volume 2062(Referenced in
`Christensen 2011 Dep, as DX 214).
`
`Christensen, C.P., Waveguide Excimer Laser Fabrication of 3D
`Microstructures, SPIE Volume 2045 (Referenced in Christensen 2011
`Dep, as DX 215).
`
`Christensen, C.P., Fine Diamonds with Laser Machining, Photonics
`Spectra, November 1993 (Referenced in Christensen 2011 Dep, as DX
`216).
`
`2012
`
`2013
`
`2014
`
`2015
`
`Christensen, C.P., Laser Processing Works on a Micro Scale, Industrial
`Laser Review, June 1994 (Referenced in Christensen 2011 Dep, as DX
`217).
`
`2016
`
`Hunn, J.D. and Christensen, C.P., Ion Beam and Laser-Assisted
`Micromachining of Single-Crystal Diamond, Solid State Technology,
`December 1994 (Referenced in Christensen 2011 Dep, as DX 218).
`
`Christensen, C.P., UV Lasers: Key Tools for Micromachining, Medical
`Device & Diagnostic Industry, January 1995 (Referenced in
`Christensen 2011 Dep, as DX 219).
`
`Subpoena dated May 20, 2011, in Lazare Kaplan International, Inc. v.
`Photoscribe Technologies and Gemological Institute of America, Case
`No. 1:06 CV 4005 (Marked in Christensen 2011 Dep, as D-373).
`
`2017
`
`2018
`
`2019
`
`Transcript of the Deposition of C. P. Christensen on October 11, 2007.
`
`2020
`
`License Agreement between Lazare Kaplan & Sons and GIA Gem
`Trade Laboratory, Inc. dated August 11, 1982.
`
`2021
`
`License Agreement between Lazare Kaplan International, Inc. and GIA
`Gem Trade Laboratory, Inc. dated February 16, 1996.
`
`2022
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`Exhibit Description
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`Exhibit
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`Spreadsheet of Monthly Inscription numbers, May 1994 to July 2006.
`
`2023
`
`- CONFIDENTIAL - Filed Under Seal
`
`Settlement Agreement between Lazare Kaplan International, Inc. and
`Gemological Institute of America (public).
`
`License Agreement between Lazare Kaplan International, Inc. and
`Gemological Institute of America (public).
`
`Example of GIA Diamond Dossier Report.
`
`Example of GIA Diamond Grading Report.
`
`Gemological Institute of America, “Frequently Asked Questions”
`(http://www.4cs.gia.edu/enus/faq.htm).
`
`2024
`
`2025
`
`2026
`
`2027
`
`2028
`
`“GIA Diamond Dossier”
`(http://www.bluenile.com/education/diamonds/certification/giadossier)
`
`2029
`
`Complaint filed May 25, 2006 in Lazare Kaplan International, Inc. v.
`Photoscribe Technologies, Inc., S.D.N.Y. Case No. 1:06 CV 4005
`
`Amended Complaint filed November 22, 2006 in Lazare Kaplan
`International, Inc. v. GIA Enterprises, Inc. et al., S.D.N.Y. Case No.
`1:06 CV 4005.
`
`2030
`
`2031
`
`Judgement dated April 19, 2013, in Lazare Kaplan International, Inc. v.
`Gemological Institute of America, et al., Fed. Cir., Appeal No. 2012-
`1247.
`
`2032
`
`Stipulation, Order, and Judgement Pursuant to Federal Rule of Civil
`Procedure 54(b) filed September 24, 2013 in Lazare Kaplan
`International, Inc. v. Photoscribe Technologies, Inc., et al., S.D.N.Y.
`Case No. 1:06 CV 4005.
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`2033
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`vii
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`I.
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`INTRODUCTION
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`On April 20, 2015, the Board instituted review of claims 1 and 7 of the ’351
`
`Patent based on only three of the six proposed grounds. The instituted grounds—
`
`all under 35 U.S.C. § 103—were based on Fine Diamonds alone, Fine Diamonds in
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`view of the ILR Article, and Gresser in view of the ILR Article. But, in instituting
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`review, the Board did not have the benefit of LKI’s construction of the
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`“controlling” limitations of claims 1 and 7, an analysis of the scope and content of
`
`the applied art by LKI’s experts, Prof. Bokor (Ex. 2005) and Necip Alev (Ex.
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`2006), or evidence of objective indicia of non-obviousness, such as the commercial
`
`success of the claimed invention. Once LKI’s claim construction analysis, expert
`
`testimony and evidence are considered, LKI submits that claims 1 and 7 are valid
`
`over the remaining three grounds for at least the following reasons.
`
`First, the Institution Decision was based on an overbroad claim construction
`
`of the “controlling” limitations provided by Tiffany. That construction severs the
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`recited marking instructions from the recited imaging, whereas the specification
`
`and prosecution history of the ’351 Patent emphasize that the marking instructions
`
`and the imaging are combined to generate the gemstone marking. Such a
`
`combination results in increased laser inscription throughput as the ’351 Patent
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`specification explains. (See, e.g., Ex. 1001, 19:55-62.)
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`Rather than consider the dispositive intrinsic evidence, Tiffany instead based
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`its construction almost entirely on language from a 2010 Federal Circuit opinion.
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`(Ex. 1006.) The 2010 Federal Circuit opinion, however, was never intended to
`
`define the entire scope of the “controlling” limitations, particularly the relationship
`
`between the marking instructions and the imaging to generate a gemstone marking.
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`The opinion instead was tailored to address specific limitations of automated
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`imaging during inscription erroneously imported by the District Court into claims 1
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`and 7. The Federal Circuit’s silence on the combination of the marking
`
`instructions and the imaging of the “controlling” limitations cannot be used by
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`Tiffany to now sever the marking instructions from the imaging in a manner that
`
`runs counter to the intrinsic record.
`
`Second, in the instituted grounds, Tiffany primarily relies on Fine Diamonds
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`and Gresser, which disclose rudimentary setup techniques that were already
`
`considered by the Examiner and are far removed from the claim invention’s
`
`combination of the marking instructions and the imaging to generate a gemstone
`
`marking. This deficiency is evident from even a glance at their figures. Tiffany
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`attempts to bolster Fine Diamonds and Gresser by relying on the ILR Article. The
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`ILR Article is itself deficient. It has barely over two pages of disclosure that are
`
`unrelated to gemstone inscription. And its disclosure is so thin and ambiguous that
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`it cannot be applied to claims 1 and 7, particularly under their proper construction.
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`The sworn testimony from the author of Fine Diamonds and the ILR Article further
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`demonstrates that a person of ordinary skill in the art would not have been able to
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`combine the limited disclosure of the ILR Article with Fine Diamonds or Gresser.
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`Such combinations would not have yielded predictable results.
`
`Third, there exists substantial objective indicia of non-obviousness with a
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`nexus to the claimed invention of the ’351 Patent. The combination of the marking
`
`instructions and the imaging as set forth in the ’351 Patent led to improvements in
`
`speed, accuracy, and throughput for gemstone laser inscription systems. These
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`improvements enabled gemstone inscription to be used for high-volume
`
`applications. For example, the Gemological Institute of American (“GIA”) used
`
`the improved techniques for its high-volume Diamond Dossier® report service for
`
`small stones. The popularity of the Diamond Dossier®, based on the ’351 Patent,
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`skyrocketed after its introduction in 1998 and it is now used by high-volume
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`gemstone sellers like Blue Nile, as set forth in the testimony of William Moryto
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`(Ex. 2007, 2008)1 and related exhibits. Tiffany’s view of the claimed invention as
`
`directed to well-known prior steps or elements cannot be squared with substantial
`
`evidence that the claimed invention was recognized and valued by the gemstone
`
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`1 Ex. 2007 is the public redacted version of William Moryto’s declaration, and Ex.
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`2008 is the full confidential version filed under seal with an accompanying motion
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`as discussed infra.
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`industry.
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`Given Tiffany’s overbroad claim interpretation, the deficiencies of Fine
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`Diamonds, Gresser and the ILR Article, and the objective indicia of non-
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`obviousness, LKI respectfully requests that the Board find claims 1 and 7 of the
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`’351 Patent valid over the instituted grounds.
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`II.
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`STATE OF THE PRIOR ART
`
`In the multibillion dollar gemstone industry, the “4Cs”—color, cut, clarity,
`
`and carat weight—are used to determine the value of a gemstone. (Ex. 2006,
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`¶¶ 10-15.) A professional gemologist examines and grades a gemstone based on
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`the 4Cs. This grade is a mostly subjective assessment based on the gemologist’s
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`expertise and is not apparent to a typical customer from looking at the gemstone.
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`(Id.) Thus, the gemstone does not intrinsically carry the evaluation with it. (Id.,
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`¶ 15.)
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`The prior art has accordingly recognized the utility of a gemstone carrying
`
`its evaluated characteristics. For example, by 1983, Gresser (Ex. 1010) noted the
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`utility in having a gemstone’s evaluated characteristics “follow the stone through
`
`its travel from the original vendor to the eventual purchaser.” (Ex. 1010, 1:14-17.)
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`But at the time of Gresser, it was not possible to mark these characteristics on the
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`gemstone without defacing the stone and reducing its value. (Id., 1:17-20.)
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`Gresser addressed this problem by using a laser to scribe identifying
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`indicium in the gemstone. (Id., 1:41-46.) The laser could mark very small
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`indicium on the gemstone imperceptible to the human eye, less than 100 microns,
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`which did not reduce the value of the gemstone. (Id., 1:46-50; 2:43-49.)
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`Gresser was not alone. For example, in 1984, U.S. Patent No. 4,467,172 to
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`Ehrenwald et al. (“Ehrenwald,” Ex. 2009) disclosed gemstone laser inscription.
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`(Ex. 2009, Abstract, 1:16-18, 2:16-19.) Both Gresser and Ehrenwald recognized
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`the value in inscribing gemstones with identifying indicia and used lasers to meet
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`this objective. (See also Ex. 1003, ¶¶ 18-19.)
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`Gresser and Ehrenwald were also typical of the prior art in that they
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`performed the laser inscription using computer-controlled stages. For example,
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`Gresser places the gemstone on a table system that includes four stacked tables.
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`(Ex. 1010, 2:63-3:3.) The four tables are driven by stepping motors to enable
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`movement in the x, y, z, and rotational directions. (Id., 3:4-19.) As part of setting
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`the focus and starting point, the operator in Gresser looks through a microscope
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`above the gemstone, and moves the table “such that a point on the profile of girdle
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`is brought to the intersection of the cross-hairs of the microscope.” (Id., 5:1-6; see
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`also id., 5:45-59.) Similarly, Ehrenwald also discloses an initial setup and focus
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`procedure (Ex. 2009, 2:40-43) and a positioning table for the gemstone that can
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`move in multiple directions. (Id., 5:9-14.)
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`Also typical of the prior art, both Gresser and Ehrenwald viewed the
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`gemstone before or during the inscription. For example, Gresser discloses two
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`microscopes for viewing the diamond, one located above the diamond and one in
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`front of the diamond. (Ex. 1010, 4:46-48.) Ehrenwald also discloses a viewing
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`microscope (Ex. 2009, 2:40-43; 4:47-53) as well as a television camera for viewing
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`the diamond during the inscription process. (Id., 4:56-58.)
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`Finally, both Gresser and Ehrenwald disclose allowing an operator to enter
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`an inscription into a computer and for the processor of the computer to cause the
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`inscription to occur on the gemstone. In Gresser, the operator inputs the
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`inscription content to a computer control system with a microprocessor. (Ex. 1010,
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`4:52-68, 5:22-44.) The operator also looks through the microscopes and uses the
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`crosshairs to make various measurements of the gemstone and inputs these
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`measurements separately into the computer control system. (Id., 4:61-68, 5:22-44.)
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`Once the microprocessor has these two separate inputs, the operator instructs the
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`microprocessor to commence the inscription process. (Id., 6:7-10.) The
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`microprocessor provides the appropriate signals to beam deflectors and the table to
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`deflect the laser beam and move the table appropriately to create indicia on the
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`gemstone. (Id., 6:11-7:10.) Like Gresser, Ehrenwald discloses a computer that
`
`instructs the table to cause the inscription of the stone. (Ex. 2009, 5:9-21.)
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`III. THE ’351 PATENT
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`The ’351 Patent recognized the state of the prior art, such as Gresser and
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`Ehrenwald, by citing to both in the background section. (Ex. 1001, 1:20-35.) Like
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`Gresser and Ehrenwald, the ’351 Patent discloses a laser marking system for
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`inscribing indicia on a gemstone. (See, e.g., id., 15:1-6.) It also discloses locating
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`a gemstone on a translatable stage (see, e.g., id., 4:46-65), video cameras for
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`viewing the gemstone either before or during the inscription (see, e.g., id., 2:61-66;
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`3:1-3; 16:51-17:8, 18:14-18), and moving the translatable stage with a computer
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`based on an operator-entered inscription. (Id., 18:33-42.)
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`But systems with the known features of Gresser and Ehrenwald had a
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`number of drawbacks. (Ex. 2006, ¶¶ 22-24.) One drawback was that the
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`inscription process was time consuming and required significant expertise. (Id.,
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`¶ 22.) For example, a skilled technician had to be able to view the gemstone via a
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`microscope and make detailed measurements of the gemstone, and then turn
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`around and input those measurements manually into a computer having a
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`microprocessor. (Id.; see also Ex. 1010, 4:61-68, 5:22-44.) In addition, the
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`operator had to separately input the inscription content into the computer. (Ex.
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`1010, 4:55-60.) Taking the measurements and then inputting them into the
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`computer was relatively time-consuming and susceptible to human error. (Ex.
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`2006, ¶ 22-23.) As a result, prior art systems, such as those set forth in Gresser,
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`had a limited throughput at which gemstones could be inscribed. (Id., ¶ 23; see
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`also § VIII(A)(2), infra.)
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`IPR2015-00024
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`Docket No.: 614142800100
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`The ’351 Patent sought to improve over prior art systems by increasing the
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`speed at which inscription content could be accurately placed on a gemstone, and
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`correspondingly, improving overall throughput of the inscribing process. This was
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`achieved in part by locating the inscription content on the gemstone using a
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`“painting” technique. (See, e.g., Ex. 1001, 19:42-62.) The ’351 Patent combines
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`the inscription content entered by the operator with gemstone image information
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`fed back to the processor to generate the inscription. (Id., 2:61-3:1, 3:14-17, 11:6-
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`10; see also Ex. 2005, ¶ 39.)
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`For example, Fig. 9 (below) illustrates a system in which a diamond 13 is
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`mounted on stages 50 to be inscribed by laser energy. The system includes vertical
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`camera 28 and side camera 32 that provide image information to computer 52 via
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`video-graphics card 56 of a computer system. (See Ex. 1001, 2:61-3:1.)
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`Docket No.: 614142800100
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`The mounted gemstone is adjusted so that the location of the inscription
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`(e.g., the girdle 12) is brought into view of the cameras. (Id., 16:62-17:4.) The
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`cameras provide this girdle image information to computer screen 57 of computer
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`52 via video-graphics card 56 as shown in red in annotated Fig. 9 above. After the
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`operator views the magnified girdle on computer screen 57, the operator enters
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`inscription content into the computer, such as a logo via keyboard 58, to paint the
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`inscription onto the image. (Id., 17:9-13.) For example, the inscription content is
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`displayed on computer screen 57, superimposed or overlaid on the girdle. (Id.,
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`17:13-16.) The operator then moves and sizes the inscription content, using the
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`mouse 59, for example, to correctly locate the inscription content on the diamond’s
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`girdle. (Id., 17:16-18; see also id., 20:52-58.) The adjustment of the inscription
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`content relative to the electronic image not only defines the position of the ultimate
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`inscription marked on the stone but also is used to control the laser burn pattern for
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`the inscription. The use of the keyboard 58, computer screen 57, and mouse 59 in
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`this manner is shown in blue in annotated Fig. 9 above. Computer screen 57 is
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`shown in both red and blue, since both the inscription data and gemstone are
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`combined and displayed simultaneously.
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`Next, the computer system takes the inscription content, the size and
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`location of the inscription content with respect to the imaged gemstone girdle, and
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`other measurements, and processes this data together to create a G-code file. (Id.,
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`IPR2015-00024
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`17:36-37.) The computer system’s motion control card 60 transfers the G-code file
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`to a stage controller, which then moves the stages in order to generate the
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`inscription on the gemstone. (Id., 17:38-40.) This is shown in green in annotated
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`Fig. 9 above.
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`The combining of these two types of information (image information and
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`inscription content) to generate a marking speeds up the inscription process. For
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`example, by viewing the inscription content superimposed and overlaid onto the
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`gemstone image for positioning, the operator can quickly and accurately position
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`the inscription content on the girdle and have confidence that the actual inscription
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`will be marked at the displayed location. (Ex. 2006, ¶ 27.) The positioning can be
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`done by a relatively inexperienced operator using a mouse and keyboard in
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`conjunction with a computer screen. (Id.) In addition, the operator can easily
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`change, as needed, the size, shape, and content of the inscription in a few
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`keystrokes and mouse movements. (Id.) These simple operations allow for precise
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`positioning of inscription content onto a gemstone.
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`This invention contributed to a large improvement in overall inscription
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`throughput. (Id., ¶ 25-26.) The ’351 Patent explains that its techniques can be
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`used to inscribe a gemstone in just 90 seconds and tallies the time required for the
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`various steps. (Ex. 1001, 19:60-62.) Mounting/dismounting of the stone with its
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`system takes 20-30 seconds (id., 19:55-57), locating the inscription content on the
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`gemstone takes 30-40 seconds with the above discussed “painting” technique (id.,
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`19:57-60), and the actual inscription takes approximately 20-35 seconds (id.,
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`19:42-45). This is in contrast to prior art systems, such as Gresser and Ehrenwald,
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`which required an experienced technician to make tedious measurements of the
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`gemstone based on viewing it, to input those measurements into a computer, and to
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`then separately input the inscription content in the computer to generate an
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`inscription.
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`The improved speed, accuracy, and throughput of the ’351 Patent became
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`commercially significant as discussed in detail at § VIII(A) infra. (Ex. 2006, ¶ 25;
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`Ex. 2007, 2008, ¶¶ 4-10.) LKI’s predecessor licensed the technology set forth in
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`Gresser to GIA in 1982. (Ex. 2007, 2008, ¶ 3.) The number of inscriptions that
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`GIA performed using the Gresser machine was limited. (Id., ¶ 6.) In 1996, LKI
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`licensed the technology set forth in the ’351 Patent to GIA, which included the
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`above invention of combining the inscription content and gemstone image
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`information to generate a marking. (Id., ¶ 4; Ex. 2022, 39.) As shown in
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`confidential Ex. 2023 (submitted with an accompanying motion to seal), the
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`number of inscriptions that GIA performed using the technology set forth in the
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`’351 Patent, including the overlay discussed above, jumped dramatically. (See
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`also Ex. 2007, 2008, ¶¶ 6-8.)
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`Indeed, the increased throughput made possible GIA’s Diamond Dossier®
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`beginning in 1998, in which a report number is inscribed onto a diamond and acts
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`as the only unique identifier to match the diamond to the report. (Ex. 2028; Ex.
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`2007, 2008, ¶¶ 4, 10.) The Diamond Dossier® includes GIA’s grading of a
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`diamond, including the 4Cs, which “serves as the international gem and jewelry
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`industry’s benchmark credentials.” (Ex. 2029.) Without the increased throughput,
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`the GIA would not have been able to offer its Diamond Dossier® for high-volume
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`diamond sellers like Blue Nile. (Ex. 2007, 2008, ¶¶ 4, 10; 2029.)
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`IV. CLAIM CONSTRUCTION
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`A.
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`Introduction
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`In its Institution Decision, the Board only construed the “controlling”
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`limitations of claims 1 and 7. (Decision, 7-9.) Claim 1 recites “controlling the
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`directing of the focused laser energy based on the marking instructions and the
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`imaging, to selectively generate a marking on the gemstone based on the
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`instructions,” and claim 7 recites “a processor for controlling said directing means
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`based on said marking instructions and said imaging system, to selectively
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`generate a marking based on said instructions and a predetermined program.”
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`The Board tentatively adopted Tiffany’s construction of these limitations.
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`(Id., 9.) LKI disagreed with Tiffany’s construction (as the Board noted), but
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`focused its Preliminary Response on other deficiencies in Tiffany’s Petition.
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`(Preliminary Response, 10-11; see also Decision, 7.) LKI now takes the
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`IPR2015-00024
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`opportunity to present its position on the proper construction of the “controlling”
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`limitations.
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`As a preliminary matter, Tiffany cites 37 C.F.R. § 42.100(b) for the broadest
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`reasonable construction standard. (Pet., 4.) That rule applies to an “unexpired”
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`patent. The ’351 Patent will expire next year. Upon its expiration, the claim
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`construction standard will change from the broadest reasonable construction to the
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`Phillips standard, due to the inability to amend claims or maintain amendments
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`after expiration. See, e.g., In re Rambus, Inc., 753 F.3d 1253, 1256 (Fed. Cir.
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`2014); Toyota Motor Corp. v. Hagenbuch, IPR2013-00483, Paper No. 37, at 5-6
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`(PTAB Dec. 5, 2014); see also MPEP 2666.01 (“If the patent expires during the
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`reexamination procedure, and the patent claims have been amended, the Office will
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`hold the amendments as being improper and all subsequent reexamination will be
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`on the basis of the unamended patent claims. . . . Once the patent expires, a narrow
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`claim construction applies.”).
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`Whether the standard is the broadest reasonable construction or the Phillips
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`standard, Tiffany’s claim construction of the “controlling” limitations breaks
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`well-established canons of construction. Tiffany does not analyze the language of
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`the claims, cites only to a single paragraph of the specification of the ’351 Patent,
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`and ignores the prosecution history of the ’351 Patent. (Pet., 4-5.)
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`According to the Federal Circuit, the Board must consider “general claim
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`construction principles” of analyzing the la