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`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`______
`
`BESTWAY USA, INC.,
`Petitioner,
`
`v.
`
`INTEX MARKETING, LTD.,
`Patent Owner.
`____________
`
`Case PGR2017-00003
`Patent 9,254,240
`____________
`
`Record of Oral Hearing
`Held: August 1, 2018
`____________
`
`
`
`
`Before KEN B. BARRETT, FRANCIS L. IPPOLITO, and
`KEVIN W. CHERRY, Administrative Patent Judges.
`
`
`
`
`
`
`

`

`Case PGR2017-00003
`Patent 9,254,240
`
`
`
`APPEARANCES:
`
`ON BEHALF OF THE PETITIONER:
`
`
`BRIAN A. JONES, ESQUIRE (Telephonic appearance)
`McDermott, Will & Emery
`444 West Lake Street
`Suite 4000
`Chicago, IL 60606
`
`
`
`ON BEHALF OF THE PATENT OWNER:
`
`
`R. TREVOR CARTER, ESQUIRE (Telephonic appearance)
`Faegre, Baker, Daniels
`300 North Meridian Street
`Suite 2700
`Indianapolis, IN 46204
`
`
`
`
`
`The above-entitled matter came on for hearing on Wednesday, August
`1, 2018, commencing at 11:08 a.m., at the U.S. Patent and Trademark
`Office, 600 Dulany Street, Alexandria, Virginia.
`
`
`
`
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`Case PGR2017-00003
`Patent 9,254,240
`
`
` P R O C E E D I N G S
`- - - - -
`JUDGE BARRETT: Good morning everybody. We are on the
`record. Thank you for indulging us as the court reporter set up this morning.
`We're on the record today for a second and supplemental hearing in PGR
`2017-00003, Bestway v. Intex Marketing. I am Judge Barret in the hearing
`room in Alexandria along with the court reporter. There is no public present
`at this time. On the phone with me are Judges Cherry and Ippolito and the
`counsel are appearing telephonically. So I'd like to start with the parties'
`appearances. Who do we have from Petitioner?
`MR. JONES: Good morning, Your Honors. Brian Jones of
`McDermott, Will & Emery on behalf of Petitioner Bestway USA. With me
`is Michael Chu also of McDermott Will.
`JUDGE BARRETT: Welcome. And who do we have from Patent
`Owner?
`MR. CARTER: Good morning, Your Honor. This is Trevor Carter
`and with me are my colleagues Drew McCoy and Reid Dodge for the Patent
`Owner.
`JUDGE BARRETT: All right. So we set forth the procedure for
`today's hearing. Each party's going to have 15 minutes total time to present
`arguments. The panel does have the demonstrative exhibits and we also
`have the record available. Because this is telephonic, it is even more
`important than normal for you to identify the slides you are talking about.
`The court reporter does have a set of the demonstratives. I would ask that
`only one attorney per side speak at a time. If you want to have your co-
`counsel speak, please request that before people just jump in and, along
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`Case PGR2017-00003
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`those lines, please identify yourself at the beginning of your argument. That
`will help the court reporter immensely in keeping track of who is speaking.
`As always, Petitioner will go first and you may reserve time for
`rebuttal. Patent Owner will then respond and Petitioner can use any time
`remaining. I'll be watching the clock and give counsel warning as they're
`approaching their time. Any questions or concerns before we get started?
`Petitioner?
`MR. JONES: Nothing from Petitioner. This is Brian Jones, nothing
`from Petitioner.
`JUDGE BARRETT: All right. Patent Owner, you good?
`MR. CARTER: Yes. Trevor Carter for Patent Owner, nothing.
`JUDGE BARRETT: Well then with that, Petitioner you may begin.
`MR. JONES: This is Brian Jones. I'd like to reserve three minutes for
`rebuttal, please.
`JUDGE BARRETT: Okay.
`MR. JONES: And I'll do my best to identify the slide number in the
`lower right corner of our demonstratives but please let me know if you have
`any questions along the way or if I forget to do so.
`So turning to slide 2. As you know the Board issued a modified
`institution decision. Today we'll only address the newly instituted grounds.
`On slide 3 those newly instituted grounds are highlighted. The Board
`previously heard arguments on ground one which covered Peterson and
`Fireman for claims 1 through 7 and 17. Ground two adds the teachings from
`Guan 797. On top of that ground three adds the teachings from Wang 615.
`Turning to slide 4. The claims in grounds two and three can be
`organized into two groups. The first group is claims 18 through 22 and these
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`Case PGR2017-00003
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`all depend from claim 17. The claims add features related to the walls of the
`pool and the notches of the internal tensioning structures. The second group
`is really just claim 30. It depends from claim 7 and it adds a requirement that
`the pool floor be a double layered floor and attached through an annular
`perimeter rim.
`So if we look at slide 6 it shows the Guan 797 reference. This is the
`additional prior art used in ground two and Guan is an inflatable pool with
`internal tensioning structures and a cross-sectional view of Guan's inflatable
`pool is shown in figure 3, and the petition uses Guan to show the wall-
`related limitations of claim 18 and the petition also uses Guan to show the
`double layered floor of claim 30.
`On slide 7 is the Wang 615 reference. This is the additional prior art
`used in ground three, and Wang is also an inflatable pool with internal
`tensioning structures and the petition uses Wang for the notch-related
`features of claims 19 through 22.
`On slide 8, just a reminder that the Patent Owner relies solely on its
`preliminary response for grounds two and three and on slide 9, the Patent
`Owner's preliminary response identifies no unique disputes for the features
`added by claims 18 through 22. Patent Owner simply rehashes its ground
`one arguments related to the Fireman reference.
`So moving on to slide 11. Under ground two the petition presented
`two alternative arguments to address the wall-related limitations of claim 18.
`First, the petition presented the combination of Peterson and Fireman and
`second, it presented a further combination with Guan.
`Slide 12 shows claim 18 with the additional wall-related limitations
`including the inner wall, the outer wall, the top wall and the bottom wall.
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`Case PGR2017-00003
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`The petition first explained how Peterson disclosed those features, then to
`the extent not disclosed by Peterson the petition explained how further
`combining with Guan disclosed these features and Petitioner argued this in
`the alternative because it anticipated the Patent Owner might dispute
`whether Peterson's two sheet structure disclosed the top and bottom walls
`required by claim 18 and it used Guan to show that in the alternative using
`Guan's four sheet structure disclosed these additional features.
`Ultimately the argument was unnecessary because Patent Owner did
`not dispute Peterson's disclosure in this regard and Patent Owner did not
`dispute that Guan also disclosed these wall-related limitations.
`JUDGE BARRETT: I'd like to stop you there. This is Judge Barrett.
`Tell me how you get the limitation from 18 further comprising a top wall
`and a bottom wall from what Petitioner identifies as a two sheet structure.
`MR. JONES: So, yes this is Brian, and regarding Peterson's
`disclosure the top wall is identified there in green and the bottom wall is
`identified there in red. The Peterson reference is a two sheet structure
`because it shows seams as 22 and 24 where the top and bottom wall -- the
`two side walls are joined and this is different from Guan's structure down
`below which uses a top wall 22 and a bottom wall and a side wall, and
`another side wall to form a four sheet structure showing all four walls.
`JUDGE BARRETT: So I understand your argument. For example,
`the top wall -- what you've identified as the top wall in Peterson, you've
`identified portions of the inner wall and the outer wall and labeled that the
`top wall, correct?
`MR. JONES: That's correct. I would say that what we've labeled is
`the portions of the first wall and the second wall and the portions of the first
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`Case PGR2017-00003
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`wall can be divided into a top wall, inner wall and bottom wall, and then
`portions of the second wall can be divided into portions of the top wall, outer
`wall and bottom wall and that when inflated it forms the top, inner, bottom
`and outer walls require by claim 18.
`JUDGE BARRETT: Okay. Thank you.
`MR. JONES: So moving to slide 13. This shows the notch-related
`limitations added by claims 19 through 22, and under ground three the
`petition further combines the ground two references with the Wang 615
`reference, and again the petition presented ground three as an alternative
`argument anticipating that Patent Owner might seek a narrower construction
`of the terms notches and notch defining portions required by these claims.
`Turning to slide 14. Patent Owner did in fact propose a narrower
`construction for these terms. Nevertheless, Patent Owner does not dispute
`that Wang discloses the notches and notch defining portions under Patent
`Owner's narrower constructions and at deposition Patent Owner's expert
`confirmed this understanding and that means that with respect to claims 18
`through 22 there are no unique disputes outside of the ground one argument.
`So I'd like to turn to the disputed issues and those are highlighted on
`slide 16. The first one that is unique to grounds two and three is whether
`Petitioner identified the annular perimeter rim of claim 30 and the second
`dispute is whether Petitioner provided the motivation to combine the
`additional features from Guan and Wang.
`So we can discuss first claim 30. On slide 18 the Petitioner relies on
`Guan for the additional features of claim 30, in particular the annular
`perimeter rim and its attachment to the upper and lower layers. The petition
`stated that Guan 797 disclosed an annular perimeter rim where the bottom
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`Case PGR2017-00003
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`wall 21 is attached to the inner circular wall 24 and that's shown in figure 3
`of Guan. Petitioner also explained how Guan's floor 21 included an upper
`layer spaced apart from a lower layer to define an airbag cushion for the
`pool floor.
`JUDGE BARRETT: Mr. Jones, before you move on. The annular
`perimeter rim that you've identified in the reference, is my understanding
`correct that you've actually identified the inner wall as constituting the
`perimeter rim?
`MR. JONES: No. It's where the floor attaches to the inner wall and
`so the annular perimeter rim is a portion of the floor 21 in Guan that defines
`the airbag cushion for the pool floor. So remember that the Guan reference
`has an airbag, it inflates the floor. This requires that there be a structure
`surrounding the floor to seal in the air to create the airbag cushion and so it
`is really the edge of this floor 21 that is the annular perimeter rim and that
`annular perimeter rim is attached to the inner wall 24.
`JUDGE BARRETT: Okay. I'm still a little fuzzy and it's not
`necessarily your fault, I think it's my fault. What sheet or sheets form the
`perimeter rim?
`MR. JONES: It's floor 21 forms -- at the edge of floor 21 is an
`annular perimeter rim where the upper layer attaches to the inner wall and
`where the lower layer attaches to the inner wall.
`JUDGE BARRETT: Okay. So then the rim itself is a portion of the
`inner wall; is that correct?
`MR. JONES: No. The rim itself is the outer edge of the two layered
`floor. So floor 21 has a thickness to it and the outer edge of floor 21 is the
`annular perimeter rim.
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`
`JUDGE BARRETT: I think I understand. What I'm getting at is the
`claim calls for an annular perimeter rim attached to the inner wall. So I was
`trying to envision what is this rim and I admit I guess I was envisioning a
`sheet of some sort attached to the inner wall.
`MR. JONES: And that is correct because floor 21 does attach to the
`inner wall and it also creates an airbag cushion so there must be more than
`an upper layer and lower layer, it must be fully surrounded in order to create
`the airbag cushion.
`JUDGE BARRETT: What I'm envisioning is the lower layer is fused
`to the inner wall and upper layer is fused to the inner wall and that creates an
`airtight enclosure, but then I would question where's the perimeter rim
`attached to that inner wall?
`MR. JONES: Well, and I think Guan's disclosure could be broad
`enough to understand that. If that's the case it's a very minor variation that
`you're discussing here that has really no significance to the features or the
`utility of this device.
`JUDGE BARRETT: Okay.
`MR. JONES: I think perhaps slide 19 might show that a little bit
`more clearly where there's a zoomed in picture of the figure showing where
`the upper layer, lower layer and annular perimeter rim are connected.
`JUDGE BARRETT: Right. So slide 19, the enlarged part in the
`circle. If I understand correctly you've identified the annular perimeter rim
`as a portion of the inner wall; is that correct?
`MR. JONES: No. That's where it attaches at the inner wall and so it's
`the portion of the floor 21 that attaches the upper layer to the lower layer and
`to the inner wall 24.
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`Case PGR2017-00003
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`
`JUDGE BARRETT: Okay. For what it's worth, you're at your 12
`minutes. I'll give you a few more minutes because I was asking a lot of
`questions, but you're up to the point where you would have reserved time for
`rebuttal.
`MR. JONES: Okay. That's fine, and I'll just be happy to answer any
`more questions you have, otherwise I'll continue to say that Patent Owner's
`expert agreed that the Guan's floor 21 is attached to inner wall 24 at the
`outer edge of floor 21 and that's really the key point is that the outer edge of
`floor 21 is attached and is the annular perimeter rim required by claim 30.
`So I'll move forward very quickly to the motivations to combine on
`slide 22. The petition provided under ground one a motivation to combine
`Guan's teaching of the wall related features of claim 18 and the petition
`explained that Guan is an inflatable spa with virtually interchangeable
`structure to that of Peterson and that using Guan's design would have been a
`simple design choice among known alternatives and Guan disclosed that his
`particular design would in fact provide a beautifying shape and Patent
`Owner did not rebut this evidence of a reason to combine with Guan.
`The same is true on slide 23 where the petition separately provided a
`motivation to combine Guan's teaching of the double layered floor of claim
`30. The petition explained that Guan's double layered floor was a simple
`design choice among known alternatives and the double layered floor would
`have been known to provide the advantage of additional cushioning and
`protection against leaks. Again, Guan explicitly provides this motivation
`because he says his double walled floor provides comfort to the persons in
`the pool and again Patent Owner did not rebut this evidence.
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`Case PGR2017-00003
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`
`Finally, on slide 24 under ground three the petition also provided a
`motivation to combine Wang's teaching of the notch-related features
`required by claims 19 through 22 explaining that any shape notch would
`have been an obvious design choice. This is because the known function of
`any such notch was to provide a gap to allow air to flow around the
`tensioning structure and Wang describes the same purpose for the notched
`portions of his tensioning structures that interlink the vertical air chambers
`and again, Patent Owner did not rebut this evidence.
`So to sum up, Petitioner has met its burden to show claims 18 through
`22 are unpatentable under grounds two and three of the petition and Patent
`Owner did not dispute and failed to rebut most of Patent Owner's evidence
`unique to grounds two and three. Claims 18 through 22 and 30 relate to
`simple features that would have been obvious design choices to those of skill
`in the art and Petitioner respectfully requests that claims 18 through 22 be
`cancelled. Thank you.
`JUDGE BARRETT: Thank you. Okay. I'll let you keep your three
`minutes of rebuttal and then I will give Patent Owner an extra three minutes
`if you like. So with that, Mr. Carter, do I understand you're going to deliver
`the argument?
`MR. CARTER: Yes, Your Honor.
`JUDGE BARRETT: You may begin whenever you're ready.
`MR. CARTER: Thank you. So let's start with slide 3 of Patent
`Owner's slides. In this case the Institution decision denied grounds two and
`three. For ground two it did so for two reasons. First, it wasn't clear in the
`petition whether Petitioner was proposing a three reference combination or
`multiple two reference combinations and while we believe that there is new
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`Case PGR2017-00003
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`argument and new characterization that has now been provided by the
`Petitioner in its reply filing, one thing that is clear is that they are
`acknowledging that they were proposing different combinations as part of
`ground two. So the Board's finding that ground two was not clear because it
`wasn't clear what combinations were being proposed is absolutely correct
`and should be affirmed in the final written decision.
`Second, the Board noted that Petitioner's reasoning to combine Guan
`with the combination of Peterson and Fireman was deficient. The Petitioner
`asserted that the combination would have been obvious for the reasons stated
`in its petition and refers to reasons why one would combine Peterson and
`Fireman, but that did not explain why a person of ordinary skill would have
`combined Guan as a third reference with Peterson and Fireman and further,
`as Petitioner argued, if Peterson and Guan are interchangeable the panel
`noted that they failed to see why one of ordinary skill in the art would have a
`reason to add a cumulative reference in the form of Guan to that existing
`teaching and that was exactly the right finding.
`I'm going to jump ahead to slide 5. In the rehearing decision
`following Petitioner's Motion for Rehearing on ground two, and then on
`slide 6 we have the panel's analysis for denying that rehearing request and
`once again, the panel maintained its position that ground two was confusing,
`not clear whether Petitioner was asserting for this single ground a two
`reference combination or a three reference combination and once again, that
`confusion continues in the reply briefing where Petitioner is clearly setting
`out that for the single ground that it was looking for the Board to parse
`through that ground to determine exactly what combinations Petitioner was
`seeking, was not clearly stated.
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`Case PGR2017-00003
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`
`Going back to slide 4 to the Institution decision for ground three, this
`panel noted that Petitioner's articulation of the ground does not remedy the
`deficiencies discussed above in context of the three reference ground which
`is ground two and Petitioner's reasoning that it would have been obvious to
`combine Wang with Peterson and Fireman and although not mentioned
`presumably Guan, making this a four way combination was just a high level
`conclusory statement that Wang disclosed the same basic spa structure as
`Peterson and places no particular limitations on the type of material to use
`for its tensioning structures. As we stated in our Patent Owner preliminary
`response, this is nothing more than a person of ordinary skill in the art could
`have made a combination but not what is required under the law which is
`that a person of ordinary skill in the art would have made that combination.
`Outside of the slides, I do want to address some of the questions that
`Judge Barrett, you were asking Petitioner regarding claim 30 and I think that
`it is important that we look at claim 30 to look at the claims that claim 30
`depends from. Claim 30 depends from claim 7 which depends from claim 1.
`Claim 1 sets out that there is a first wall and a second wall and that you have
`an inflatable air chamber defined by the first wall and the second wall. So
`the first wall is defining the inflatable air chamber. It claim 7 it sets out that
`the first wall is an internal wall of the pool. Then when we get to claim 30 --
`and it can be helpful to look at Petitioner's slide 18, they have claim 30 on
`slide 18 -- claim 30 is clear that they're talking about what it is that the
`bottom wall includes. The bottom wall includes an annular perimeter rim
`attached to the internal wall of the pool and that internal wall of the pool, as
`we know from claim 7, is the first wall that as set out in claim 1 is used to
`define the inflatable chamber.
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`
`So Judge Barrett, your questions regarding what is the annular
`perimeter rim and isn't that part of the inner wall was exactly on point
`because the annular perimeter rim needs to be something different from the
`internal wall which is what is used, at least in part, to define the inflatable air
`chamber. So I think that your questioning was right on point. I just wanted
`to also add what it is that claim 1 and claim 7 adds to the analysis.
`Unless the panel has any questions, Patent Owner rests.
`JUDGE BARRETT: Thank you. Mr. Jones, I'll give you your three
`minutes.
`MR. JONES: Thank you, Your Honor. I just want to address the
`issue of confusion regarding grounds two and three, and the petition made
`clear that these were alternative arguments under ground two and that's at
`page 48 of the petition. It stated that,
`"To the extent that Patent Owner argues that the top wall and/or
`bottom wall are not taught by Peterson in view of Fireman, those features
`would have been obvious when combined with the teachings of Guan."
`So I think that was clear. It was clear in the rehearing request that was
`made and Patent Owner chose not to address that even after understanding
`this from the rehearing request it relied on its preliminary response and did
`not file a Patent Owner response with respect to these grounds.
`As for the motivation to combine, the Institution decision and Patent
`Owner did not address the motivation contained in the petition with respect
`to an obvious design choice. These were design choices with known
`benefits and that's what the petition laid out. This is exactly what KSR
`recognizes as a sufficient rationale in that certain design choices can be a
`reason for combining prior art references and that design incentives or
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`Case PGR2017-00003
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`market forces can prompt such variations, and as to the annular perimeter
`rim that's exactly what these variations are. These are simple variations of
`known prior art references and known types of connections. There's nothing
`rocket science about this type of art, and so any arguments that Patent
`Owner is raising does not go to any functional benefits of the 240 patent and
`these are not patentably distinct features over the prior art. Unless there's
`further questions, we will conclude.
`JUDGE BARRETT: Okay. Thank you. I have nothing further and
`neither do the other two judges. Thank you for your time, and this case is
`submitted.
`
`
`
`(Whereupon, at 11:35 a.m., the oral hearing was concluded.)
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`Case PGR2017-00003
`Patent 9,254,240
`
`
`
`PETITIONER:
`
`Michael Chu
`Brian Jones
`MCDERMOTT, WILL & EMERY
`mchu@mwe.com
`bajones@mwe.com
`
`
`PATENT OWNER:
`
`Trevor Carter
`Andrew McCoy
`FAEGRE, BAKER, DANIELS
`trevor.carter@faegrebd.com
`andrew.mccoy.ptab@faegrebd.com
`
`
`16
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`