UNITED STATES PATENT AND TRADEMARK OFFICE
`______________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`______________
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`APPLE INC., SNAP INC., FACEBOOK, INC., AND
`WHATSAPP INC.
`Petitioners,
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`V.
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`UNILOC USA, INC., AND UNILOC LUXEMBOURG S.A.
`Patent Owner.
`______________
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`Case IPR2017-00221 (Patent 7,535,890)
`Case IPR2017-00222 (Patent 8,243,723)
`Case IPR2017-00225 (Patent 8,995,433)
`______________
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`Record of Oral Hearing
`Held: February 8, 2018
`______________
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`Before: JENNIFER S. BISK, MIRIAM L. QUINN, and CHARLES J.
`BOUDREAU, Administrative Patent Judges.
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`______________
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`APPLE INC., SNAP INC., FACEBOOK, INC., AND
`WHATSAPP INC.
`Petitioners,
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`V.
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`UNILOC USA, INC., AND UNILOC LUXEMBOURG S.A.
`Patent Owner.
`______________
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`Case IPR2017-00221 (Patent 7,535,890)
`Case IPR2017-00222 (Patent 8,243,723)
`Case IPR2017-00225 (Patent 8,995,433)
`______________
`
`Record of Oral Hearing
`Held: February 8, 2018
`______________
`
`
`Before: JENNIFER S. BISK, MIRIAM L. QUINN, and CHARLES J.
`BOUDREAU, Administrative Patent Judges.
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`Case IPR2017-00221 (Patent 7,535,890)
`Case IPR2017-00222 (Patent 8,243,723)
`Case IPR2017-00225 (Patent 8,995,433)
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`APPEARANCES:
`
`FOR THE PETITIONERS:
`
` Mr. Jason D. Eisenberg
` Mr. Michael D. Specht
` Mr. Trent W. Merrell
` STERNE KESSLER GOLDSTEIN FOX
` 1100 New York Avenue, NW
` Washington, D.C. 2005
` 202.371.2600
` 202.371.2540 (Fax)
` lgordon@skgf.com
` Ms. Lisa Fuller Schwier, Ph.D.
` COOLEY, L.L.P.
` 1299 Pennsylvania Avenue NW, Suite 700
` Washington, D.C. 20004
` 202.842.7876
` 202.842.7899 (Fax)
` lschwier@cooley.com
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`FOR THE PATENT OWNERS:
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` Mr. Brett Mangrum
` Mr. Ryan Loveless
` ETHERIDGE LAW GROUP
` 2600 East Southlake Boulevard,
` Suite 120
` Southlake, Texas 76092-6634
` 817.470.7249
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`Case IPR2017-00222 (Patent 8,243,723)
`Case IPR2017-00225 (Patent 8,995,433)
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`ALSO PRESENT:
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` Steve Pappas, Registered Patent Agent, Sterne
` Kessler Goldstein Fox
` Marc Breverman, Apple Corporate Counsel
` Amirali Sharifi
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`The above-entitled matter came on for hearing on February 8,
`2018, commencing at 11:00 a.m. at the U.S. Patent and Trademark
`Office, 207 S Houston St., Dallas, Texas.
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`Case IPR2017-00221 (Patent 7,535,890)
`Case IPR2017-00222 (Patent 8,243,723)
`Case IPR2017-00225 (Patent 8,995,433)
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`P R O C E E D I N G S
` (Commencing at 11:00 a.m.)
` JUDGE QUINN: All right. Welcome to the Texas
`Regional Office. Do we have everybody that we need for the
`entirety of the proceeding session.
` MR. EISENBERG: Yes, we do.
` JUDGE QUINN: So do we have everybody that we
`need?
` MR. EISENBERG: The petitioner has everyone
`that they need here.
` JUDGE QUINN: Okay. Does patent owner have
`everyone?
` MR. MANGRUM: Your Honor, Brett Mangrum, good
`morning. Yes, we have everyone we need for the proceeding
`hearing.
` THE COURT: Let's start with some preliminaries.
`I'll do the introduction. You may be seated because I have
`other issues to discuss with everybody.
` We're here today to hear the oral argument in
`the inter partes review proceedings docketed as IPR2017-221,
`IPR2017-222 and IPR2017-225. All three were initially filed by
`Apple.
` We, subsequently to those cases, had
`joinders, especially in IPR2017-225 where Facebook, Inc.,
`and WhatsApp have been joined to that case. And the patent owner
`is Uniloc Luxembourg and Uniloc USA. On this we're going
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`to have a conversation with you about who's the rightful
`patent owner.
` But first let me introduce to you the judges
`that we have on the panel today. Judge Jennifer Bisk is
`present in the Courtroom D in Madison Building in the U.S.
`PTO Alexandria campus. And Judge Charles Boudreau is present
`in the courtroom of the Silicon Valley Regional Office in San
`Jose.
` And I'll be hosting the hearing today. I'm
`Judge Miriam Quinn at the Texas Regional Office in Dallas.
` Because we have different groups of entities
`for the different cases, I want counsel for petitioner in the
`221 case and all the entities that are here for that case to
`state your appearance for the record.
` MR. EISENBERG: For petitioner, we have Jason
`Eisenberg from Sterne Kessler for Apple. And we have Lisa
`Schwier from Cooley for the other parties.
` JUDGE QUINN: And what other parties would
`that be?
` MS. SCHWIER: For the joinder petitioners,
`your Honor.
` JUDGE QUINN: Which ones?
` MS. SCHWIER: For -- I represent Facebook,
`WhatsApp and Snap.
` JUDGE QUINN: All three?
` MS. SCHWIER: Yes.
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`Case IPR2017-00222 (Patent 8,243,723)
`Case IPR2017-00225 (Patent 8,995,433)
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` JUDGE QUINN: Okay. Now, Snap has joined the
`221 case and the 225 case but not the 222 case; is that
`right?
` MS. SCHWIER: I believe that's correct, your
`Honor.
` JUDGE QUINN: Okay. All right. And Facebook
`has joined all three cases?
` MS. SCHWIER: Facebook and WhatsApp, yes, your
`Honor.
` JUDGE QUINN: Okay. Perfect.
` Who do we have here for patent owner?
` MR. MANGRUM: Patent owner attorney -- I am
`the lead counsel for patent owner, Brett Mangrum.
`Representing Uniloc with me is also counsel of record Ryan
`Loveless of the same Etheridge Law Group.
` JUDGE QUINN: Okay. Thank you.
` Let's start with the patent owner issue that I
`alerted to you earlier. We have some inconsistencies in the
`mandatory notices for these cases and in the related cases
`where in this case the mandatory notices led us to believe
`that both Uniloc USA and Uniloc Luxembourg are both patent
`owners. But in the subsequent cases, it appears that only
`Uniloc Luxembourg is the patent owner.
` So my question to you is which one's right?
`Both cannot be right, so which one is correct? If in this
`case, there is an inconsistency, would you be filing
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`Case IPR2017-00222 (Patent 8,243,723)
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`mandatory notices to reflect the correct patent owner?
` MR. MANGRUM: Thank you, your Honor.
` Just so I know, should I be addressing from
`the microphone here, or would it be better --
` JUDGE QUINN: As long as they can hear you,
`that's fine.
` Can you see counsel when speaking from the
`table?
` MR. MANGRUM: If this is better, I'm happy to
`come up to the front.
` JUDGE QUINN: That's fine.
` MR. MANGRUM: So I appreciate the opportunity
`to address this question. The rightful patent owner is
`Uniloc Luxembourg S.A. Uniloc USA, Inc., is the exclusive
`licensee, and we've been in the process of updating. Uniloc
`has several pending IPR matters as patent owner in -- before
`the PTAB, so we've been in the process of updating any
`discrepancies from that rightful description in other cases.
`If we missed it in this case, we will address that with an
`updated notice.
` JUDGE QUINN: Yes. Specifically in this case
`we noticed that the discrepancy is still there. In the other
`ones, it has been corrected, so that's why we noticed it
`here. So will you please update the mandatory notices here?
` MR. MANGRUM: Yes, your Honor. Thank you for
`bringing that to our attention.
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` JUDGE QUINN: Okay. Thank you.
` The other two housekeeping matters I want to
`bring to your attention is objections to demonstratives. We
`reviewed the objections. We noted that petitioner had no
`objections, but patent owner did have objections.
` We're not going to rule on the objection at
`this point. We're going to take under advisement all the
`arguments presented today regardless of whether you contend
`that they're outside the scope or not. That seemed germane
`to most of the objections that were lodged concerning
`petitioner's demonstratives. We're not going to allow any
`speaking objections on this, so if you want to make the
`argument, you make it during your argument time.
` And just to let you know, the demonstratives
`are demonstratives. They're not evidence in the record, so
`they're not going to be consulted for our purposes of writing
`the final written decisions. In accordance to Rule 70,
`the oral arguments should focus on the things that are
`in the briefs only.
` So do you have any questions about that
`instruction?
` MR. MANGRUM: No, your Honor.
` MR. EISENBERG: No, your Honor.
` JUDGE QUINN: Okay. Thank you.
` And the last item I have is for patent owner.
`There is a related proceeding in -- concerning the patent
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`8,995,433. That related proceeding is IPR2017-1427. And in
`that case, when we instituted -- in our decision on
`institution, we instructed the parties to brief by January
`25th of this year the 315(e)(1) estoppel issue, and we
`didn't see anything filed by patent owner in that case.
`So that's a pending item we need to resolve.
` I'd like to know if you're aware of that
`order, and if you're not, whether you plan on correcting the
`issue and filing a brief.
` Yes, please.
` MR. MANGRUM: Yes, your Honor. Thank you for
`the opportunity to address that.
` So that was with the preliminary proceedings,
`and in that particular case, Uniloc did file a preliminary
`response, and then the board responded to the preliminary
`response.
` We do intend to address the 315 issue in the
`formal response and hope to have -- we'll have ample space in
`the briefing there allotted by the rules to be able to
`address that issue.
` And with respect to the earlier date, we just
`missed it from the order. That's not something that we
`always see in an order and -- but we -- given that it's not
`an obligation to actually even file a preliminary response,
`we hope to have the opportunity to address that in a formal
`response, that issue.
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` JUDGE QUINN: Okay. I'm confused because the
`order went in the decision on institution, so it was after
`your preliminary response. So are you saying you're going to
`brief it in your response then, the trial?
` MR. MANGRUM: So we haven't yet filed --
`we've only filed a preliminary response in that proceeding.
`We haven't yet filed a formal response. So the issue is
`still ripe to present within a formal response, and we hope
`to address that issue in our formal response.
` JUDGE QUINN: Okay. Well, the reason it was
`set at an earlier date is because there's a direct conflict
`with this proceeding, and we want everybody to be aware of
`potential termination of the second proceeding. And we can
`go ahead and proceed and decide the issue without your
`response, but for due process reasons, we need everybody's
`word on this. So what I need you to do is to identify when
`you can file that brief. Within the next five days?
` MR. MANGRUM: Sure, your Honor. Yes.
` JUDGE QUINN: Okay. And the decision on
`institution in that IPR precisely says what needs to be
`filed.
` MR. MANGRUM: Yes, your Honor.
` JUDGE QUINN: Five pages and what-not.
` And for all the parties here, specifically
`Facebook and WhatsApp, who is the party in that 1427 case,
`and for patent owner, I want to direct your attention to how
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`we have handled a similar issue.
` So I turn your attention to the termination
`decision in IPR2016 -- yes, IPR2016-1860, and that is Paper
`28. And the parties to that case are Apple and Papst
`Licensing. So that's instructive and should be informative
`to the parties.
` Okay. So let's get to the matter at hand.
`Has everybody provided to the court reporter the paper copy
`of the demonstratives? Yes? Okay.
` All right. So petitioner, you may proceed
`first as the party with the burden to prove unpatentability,
`you will have the first opportunity to address the court.
`You have an hour to present your case. Would you like to
`reserve some of that for rebuttal?
` MR. EISENBERG: We'd like to reserve 30
`minutes of this time.
` JUDGE QUINN: Thirty minutes, okay. And I'm
`keeping track with my phone, so I can let you know when we're
`close.
` MR. EISENBERG: Okay. Sure.
` JUDGE QUINN: So as you noticed, the judges
`are on the screen. They cannot see what you present here, so
`you need to identify exhibits and slides by the numbers so
`that they can follow along.
` MR. EISENBERG: Thank you, your Honor.
` JUDGE QUINN: Let me know when you want to
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`start.
` PETITIONER'S STATEMENT
` MR. EISENBERG: Okay. Good morning, your
`Honors, and may it please the board. I'm Jason Eisenberg
`from Sterne Kessler for Petitioner Apple.
` With me here today from Sterne Kessler are
`Michael Specht, Amirali Sharifi, Trent Merrell, and Steve
`Pappas, for Apple; Lisa Schwier, who introduced herself, from
`Cooley, for Snap, Facebook, and WhatsApp; and we have Marc
`Breverman from our client Apple.
` I will be handling the '890 and the '723
`patent discussions, and Michael Specht will be handling the
`'433 patent discussions.
` We would like to start with the '890 for about
`15 minutes, move to the '433 patent for about ten minutes,
`and finish with the '723 patent for about five minutes, if
`that's okay with the board. We're open to do it in any order
`that the board would like or start by addressing any
`questions the board has.
` JUDGE QUINN: You can present however you want
`to present, yes.
` MR. EISENBERG: Thank you, your Honor.
` We would just like to make a quick note about
`the objections, and we'll move on, that we believe Objection
`2 is actually directed to the reply and not the
`demonstratives, and therefore, it should have been raised
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`earlier.
` JUDGE QUINN: Why is that?
` MR. EISENBERG: It is objected to the
`demonstratives of our slide deck, including arguments that
`were made in the reply that they believe were not made in the
`petition, so it's not necessarily directed to our
`demonstratives but directed to adding arguments from the
`reply into the demonstratives. So we think it's an improper
`direction -- objection of the demonstratives. It should have
`been raised after the reply was filed.
` JUDGE QUINN: Well, we didn't set a deadline
`for them to raise that issue, so I don't see why they've
`waived it or done it late. Why would you say that?
` MR. EISENBERG: Well, we would say that if
`it's directed to the demonstrative, the demonstrative is
`repeating exactly what's in the reply so maybe the objection
`is just incorrect on the record.
` JUDGE QUINN: Well, your objection is noted,
`but just to let you know, they've preserved the issue, so
`we're going to treat it as an objection to the scope.
` MR. EISENBERG: Understood. Thank you, your
`Honor.
` JUDGE QUINN: Okay.
` MR. EISENBERG: In the '890 patent --
`just as a note, I'll be trying to stay within the record and
`the arguments. I'll try not to use the demonstratives too
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`much just because of how we have it set up here.
` So I'd like to start with the '890
`patent, and there's three disputed issues in the record. One
`is the meaning of local and external networks which
`petitioner believes should be construed to be relative
`locations only. The patent owner argues that they're not
`locations but rather they are types of networks. We believe
`the patent owner is wrong, and we'll explain why.
` But in the end, under either the correct
`petitioner or -- which we believe the incorrect patent owner
`understanding of those claim terms, we have presented
`arguments in the position why Malik and Väänänen teach under
`both meanings.
` We will also be addressing the selecting
`feature, selecting one or more recipients feature, and the
`server feature system.
` I'd like to start by talking about the patent
`owner's position on local and external just to clarify it.
`In deposition and in their papers, the patent owner has
`turned to the words "private" for the local network and
`"public" for the external network. They've said that they
`have to be heterogenous network architectures of different
`types of networks.
` When asked what that meant, since it wasn't
`clarified in the patent owner response, their declarant at
`deposition stated that it was a matter of accessibility, that
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`Case IPR2017-00222 (Patent 8,243,723)
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`a private network had limited accessibility and a public
`network had open accessibility.
` And when asked what heterogenous meant, he
`said it was just a matter of the different types of
`accessibilities. When asked where in the record, where in
`the patent, where in the claims public and private and
`accessibility were found, he stated they were not, that it
`was based on his understanding.
` When asked did you provide any evidence to
`support that understanding, he said he did not. And as
`you'll note in the record, there is no evidence other than
`the declaration itself in the record.
` JUDGE QUINN: So what is your definition of
`local network then?
` MR. EISENBERG: We believe that if you look at
`the claims themselves and the summary of the invention, which
`is the only place you'll find -- I'm sorry. Local network
`you ask?
` JUDGE QUINN: Local network.
` MR. EISENBERG: We believe a local network is
`strictly a geographic network based on a distance between a
`server and a client and that it is a relative location with
`respect to the external. So the external and the local just
`reflect that the local is in one place and the external is a
`network outside of the local network which the claims say and
`which the summary of the invention says.
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`Case IPR2017-00222 (Patent 8,243,723)
`Case IPR2017-00225 (Patent 8,995,433)
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` There is no mention of external anywhere in
`the detail description. There is no external network shown
`in the figures. There is only a local and external mentioned
`in the claims and in the summary. And it's always that the
`external is outside of the local.
` And now, there are some claims that it doesn't
`say external as outside the local.
` JUDGE BISK: I'm sorry. This is Judge Bisk.
`Can you clarify a little what you mean by "outside"?
` MR. EISENBERG: The best clarification we can
`make is if we turn to Malik and our understanding of Malik in
`the record. In the petition, we have Figure 2 of Malik. We
`can go straight to the document itself.
` And the way we see it is that if we choose, as
`an example, server 215 and client 200 as being a first
`network, that would be a local network. And if we choose 216
`and 203 and Malik as the second network, that would be
`external from the local network. It would be outside of the
`local network.
` And that's exactly what the claims say and
`exactly what the summary says. So it's just a --
` JUDGE BISK: So --
` MR. EISENBERG: I'm sorry. Go ahead.
` JUDGE BISK: So in order to figure out what an
`external network is, you have to first define or choose what
`you want the local network to be, and then the external
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`network is everything not in there?
` MR. EISENBERG: That is exactly what the
`claims in the summary says, you're correct, your Honor. They
`merely state that it's outside of the local is the only
`definition they give for the word external in the patent at
`all.
` JUDGE BISK: And your definition of local --
`I'm having a problem with it being a little circular. In
`order to understand what the external network is, we have to
`know what the internal network is, but we only know the
`internal network by -- I'm not really sure. It's...
` MR. EISENBERG: So this may help clarify it,
`your Honor. I think if you think of it as first and second
`or you think of it as starting with a client that's attached
`to a server and that is the way the claim defines the local
`network to be.
` So they pick one client, one server. They say
`that's the local network. And then they pick a second server
`and a second client, and they say that's external because
`it's outside of the local. So it's a matter of where you
`start the claim and where you begin, where the client is and
`the recipient is, and you look at the claim as a whole and
`the combination of the elements that you start -- I'm sorry.
`Go ahead.
` JUDGE BISK: What about Claim 28, though?
`Because Claim 28 says a client connected to an external
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`network.
` MR. EISENBERG: Correct. So I think in Claim
`28 we would have to revert back to the summary of the
`invention and look at how they define external, and that is
`outside the local, and I think that we struggle with it as
`much as your Honors do because we don't have a figure that
`shows it. We don't have a clear discussion of it in the
`specification. So we can only go by what the claims say and
`go by what the summary of the invention says which is the
`only other place that external and --
` JUDGE BISK: Well, do we know what the plain
`and ordinary meaning of these terms in the art is?
`Do we have any expert testimony on what a person of ordinary
`skill would think these terms mean?
` MR. EISENBERG: Well, our expert, in his
`original declaration, agreed with this meaning and actually
`made a broader meaning that external is just outside of any
`network, that it's purely something that is outside or
`inside.
` So local is inside a network and external is
`outside the network, and it's even a broader meaning than
`what we find in the claim and the specification. And that's
`what our expert has said.
` The other side's expert has again defined them
`as public and private and based on accessibility issues,
`which is not found in the specification and is not found in
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`the figures. So we believe that if you want to go to the
`intrinsic record, if you want to go to the patent itself, the
`claims themselves, it's merely defined as relative location,
`one of them being outside the other.
` JUDGE BISK: Okay. Thank you.
` JUDGE QUINN: So in your view, local is a
`geographical determination, the local network. And external
`is just everything else?
` MR. EISENBERG: Geographical may actually be
`narrowing it. I think local is whatever the first network
`chosen is, wherever that may be, and the second one is just
`outside of where that's chosen, from what we can tell from
`the specification claims --
` JUDGE QUINN: Well, it seems to be more than
`that. I mean, a local network is usually something like a
`LAN, a very short distance type of server client
`communication. It's not the internet, for example, so...
` MR. EISENBERG: Yes. In our argument where we
`do discuss types of networks, we do agree that the local
`network would most likely be a LAN. It's actually defined as
`a LAN, a WAN, a wireless or wired network in the '890 patent
`itself. The '890 patent defines the local network very
`broadly and provides any of those as being within the scope
`of the word "local." So --
` JUDGE QUINN: Okay. So --
` MR. EISENBERG: I'm sorry. Go ahead.
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` JUDGE QUINN: So if we agree with you that
`local is the local Jabber server with the local client, and
`that any other server-client network will be external to that one,
`it doesn't matter that they're both LANs then; they're not
`different networks.
` MR. EISENBERG: That is correct. Under our
`definition it would not matter that they're both LANs because
`external doesn't have any meaning outside of the patent itself.
` JUDGE QUINN: But if we don't agree with you,
`do you have any evidence in the record that these networks
`could indeed be internet networks outside of the local
`network?
` MR. EISENBERG: We absolutely do, your Honor.
`In the petition, we take the alternative position that there
`could be an argument that the networks have to be a type of
`network. And we describe in the petition as an example that
`there could be a LAN through the combination with Väänänen
`between a local server, let's say, 215 and client 200.
` And if you look in the Malik patent, it
`discusses that there's a communication network in Figure 3,
`and that communication network can be any network. And one
`example being in the internet. And if you look at the Malik
`patent and you look at Figure 2 and you think of the servers
`being a headquarters and one of the clients being someone
`working at the headquarter and the other client being somebody
`working at a branch office that's far away and you read the
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`description of Figure 3 and Figure 2, you would know that
`if a person was working at the headquarters, you would have,
`most likely, a LAN network between, let's say, 215 and 200,
`and that you'd have, most likely, an internet or any other
`type of communication network 325 between server 216 and 203.
` So we do have, in the petition, the argument
`that there are different types of networks. And we can go one
`step further. When you look at the detailed description of
`Malik, it actually says that the network 325 which is shown
`most distinctly in Figure 3 to be nothing but a communication
`network. It provides an example of that of being the internet,
`but it doesn't limit it to that.
` So even if you had two communication networks,
`they could be different networks, different types of
`networks. Does that fully address your question?
` JUDGE QUINN: Yes. And you've chewed up a lot
`of time on this, so do you want to keep going on the 221
`case or --
` MR. EISENBERG: I'm happy to address the
`sender client and the server system, if your Honors have
`questions. If not, I'll yield half --
` JUDGE QUINN: Well, I do have a question on
`the argument that patent owner made about the invitation.
` MR. EISENBERG: Yes.
` JUDGE QUINN: It appears that in Malik every
`single voice recording requires that the first user send an
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`invitation first?
` MR. EISENBERG: We agree with that, but we
`don't think that's what the scope of the claim is. If we look
`at Malik and we turn to Figure 4 of Malik -- and I'll let
`everyone get there. Are we all ready? In Figure 4 of Malik,
`in steps 410 and 420, I think it's clear that the first user
`does authorize a second user to be able to send a voice message.
` But 420, which we don't know if it's one
`minute, one hour, one day, one month later, then says that
`the second user client receives a request from the second
`user to send an instant message to the first user.
` So even though there may be an invitation to
`say you can join my network, I'll allow you to communicate
`with me, that invitation doesn't say when that occurs, how it
`occurs. All the control of when a message is going to be
`sent and to whom it's going to be sent once they've joined
`this present service is done by the sender or the second
`client or the VIM of the second client as shown in step 420
`of the Malik.
` JUDGE QUINN: Okay. So you're mapping the
`selecting of the recipients and the recording of the message
`and the transmission of the message all to step 420 and
`after, after the invitation occurs?
` MR. EISENBERG: Yes. There could be other
`steps, but in this one, I think 420 covers most of that.
`There's other parts of Malik that teach it, but at least 420
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`shows you that the sender can then choose who and when to
`send the message to after they've been authorized to do so.
`And it's not -- the invitation doesn't require them to do
`anything at a certain time or send it to them. It gives them
`the opportunity to in the future.
` Is there any questions on anything else I can
`-- or else I'll address them on rebuttal if you have
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