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`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`MAN WAH HOLDINGS LIMITED,
`
`Petitioner,
`
`v.
`
`RAFFEL SYSTEMS, LLC,
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`Patent Owner.
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`Case PGR2019-00029
`Patent D821,986 S
`
`Record of Oral Hearing
`Held: April 2, 2020
`
`Before GRACE K. OBERMANN, CHRISTOPHER G. PAULRAJ and
`RYAN H. FLAX, Administrative Patent Judges.
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`Case PGR2019-00029
`Patent D821,986 S
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`APPEARANCES:
`
`ON BEHALF OF THE PETITIONER:
`
`SHEN WANG
`Arch & Lake LLP
`203 North La Salle Street
`Suite 2100
`Chicago, IL 60601
`
`ON BEHALF OF THE PATENT OWNER:
`
`DAVID A. CASIMIR, Ph.D.
`Casimir Jones S.C.
`2275 Deming Way
`Middleton, WI 53562
`
`CLARK BAKEWELL, Esq.
`Mayer Brown
`1999 K Street NW
`Washington, D.C. 20006
`
`The above-entitled matter came on for hearing on Thursday, April 2,
`2020, commencing at 1:00 p.m., at the U.S. Patent and Trademark Office,
`600 Dulany Street, Alexandria, Virginia, 22314.
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`Case PGR2019-00029
`Patent D821,986 S
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`P R O C E E D I N G S
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`And I want to first thank everybody for your flexibility in
`conducting this video hearing today. We know that this is a departure from
`our typical practice. Given that, we wanted to start off by clarifying a few
`items.
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`1
`2
`JUDGE FLAX: Looks like everyone is here. So, we can begin.
`3
`4 Hi there everybody. I'm Judge Flax. I'm here with Judges Obermann and
`5 Paulraj. And we are here via video for PGR2019-00029 concerning patent
`number D821,986. If you're not here for that you're on the wrong video
`6
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`conference.
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`First, our primary concern is your right to be heard. If at any
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`time during this proceeding you encounter technical or other difficulties that
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`you feel fundamentally undermines your ability to adequately represent your
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`client, please let us know immediately. For example, by contacting the team
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`16 members who provided you with connection information.
`Second, when not speaking please mute yourself. We on the
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`panel will be doing likewise.
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`Third, please identify yourself each time you speak. This helps
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`the court reporter, who is on the line as we speak, prepare an accurate
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`transcript.
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`Fourth, we have the entire record including your
`demonstratives. When referring to demonstratives, papers, or exhibits
`please do so clearly and explicitly by Slide number, exhibit number, and
`page number, or by whatever reference you need to identify what you're
`talking about. Please also pause a few seconds after identifying it to provide
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`Case PGR2019-00029
`Patent D821,986 S
`us time to find it. This helps the preparation of an accurate transcript of the
`hearing.
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`I'm going to presume that when you set up the video conference
`call you had all the conversation you needed regarding the contact in case of
`technical difficulties, so I won't go over that.
`Okay, so each side has requested an hour, which you will have.
`If you want to reserve any time for rebuttal, please let me know when you
`stand up to speak for the first time, or when you start speaking for the first
`time.
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`1
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`4
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`So, we can begin with the Petitioner's case if you're ready.
`10
`MR. WANG: Yes, Your Honor, we are ready. My name's
`11
`12 Shen Wang. I'm from Arch and Lake. I'm here for Petitioner. So, I -- let
`13 me introduce Mr. Bakewell. He's going to argue on our behalf.
`JUDGE FLAX: Okay.
`14
`15
`MR. BAKEWELL: Good afternoon, Your Honors. My name
`16
`is Clark Bakewell of Mayer Brown of -- on behalf of Petitioner Man Wah
`17 Holdings Limited. If I can, I would like to reserve 15 minutes for a rebuttal.
`JUDGE FLAX: Okay, I've got it. You can go ahead and begin.
`18
`19
`MR. BAKEWELL: Thank you. In the Board's Institution
`20
`decision the Board institutes its PGR on two grounds. Under §102(a)(1) to
`21
`view of the Raffel_Sample which is Exhibit 1004 as evidence supporting an
`22
`on-sale bar, or as an anticipatory reference available to the public. Also,
`23
`under §103, as obvious, due to the Kintec Solution which is Exhibit 1006, as
`24
`a primary reference and Hua-Dali which is Exhibit 1007 as a secondary
`25
`(phonetic) reference. This oral presentation will focus on the on-sale bar and
`26
`§103 obviousness grounds, but all grounds of institution have been briefed
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`Case PGR2019-00029
`Patent D821,986 S
`and have to take questions on its behalf (phonetic).
`1
`Turning to Slide 2 of the demonstratives and the on-sale bar,
`2
`the finding here is Exhibit 1001, which is the 986 patent to Exhibit 1004
`3
`4 which is the Song email, which is the reference that shows the
`5 Raffel_Sample. As will be quickly apparent, the product offered in the Song
`email in the design shown in the nine extra patents are pretty much identical.
`6
`7 Raffel sent the exact design that a later patent --
`JUDGE FLAX: When you say pretty much identical, Counsel.
`8
`9 This is Judge Flax.
`MR. BAKEWELL: Yes.
`10
`11
`JUDGE FLAX: When you, when you say pretty much
`12
`identical. Is there anything about them that is not identical?
`13
`MR. BAKEWELL: Thanks, Your Honor. They are obviously
`14
`a different image of what appears to be a computer rendering, and one is a
`15
`very sketch done by hand with dotted lines more appropriate for a patent.
`16 So, they are not absolutely identical, but I do not think that there's any
`17 meaningful differences beyond that between the two images. I think the
`18 Board and Institution is essentially the same.
`Raffel sent this exact design that is later patented to a customer
`19
`20
`one year and two months before filing a patent application which surpasses
`21
`the outer limits of the one-year until bar principle period. This matters -- the
`22
`on-sale bar prevents even a tenth profit from a later claims invention more
`23
`than one year before filing to the patent application. There's then an on-sale
`24
`bar in a patent statutes ever since 1836. The Patent Owner clearly violated
`25
`this requirement and attached (inaudible).
`26
`My presentation will first discuss the facts of the offer in the
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`5
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`Case PGR2019-00029
`Patent D821,986 S
`1 Song email. Then the governing law and then apply a law to these facts.
`Turning to Slide 3 in the demonstratives. This is quick
`2
`3
`overview introduction of the Song email which is Exhibit 1004 in which we
`4 will go into detail over the next few Slides. As an overview, it's a two-page
`email with a two-page attachment. To avoid confusion, the two-page email
`5
`6 will be referred to as the Song email and the two-page attachment will be
`referred to as the Song email attachment. But both are part of the same
`7
`8
`reference and this is Exhibit 1004.
`9
`The Song email was sent in a combination of English and
`10 Chinese. Thus, Exhibit 1005 is a translation of just the first few pages which
`had Chinese in them. The Song email attachment was sent in just English so
`11
`12
`there was no need to supply a translation of the two pages.
`13
`Turn to Slide 4 of the demonstratives. We'll look closer at the
`14 Song email. This Slide depicts an excerpts from Exhibit 1005 which is the
`translation of the Song email. It shows two threshold matters. First, the
`15
`16 Song email was sent on November 17, 2015. And second, that the Song
`email was sent by Xiamen Raffel, which is Patent Owners wholly-owned
`17
`18 Chinese manufacturing subsidiary. A fact noted in this email. Patent owner
`has not contested either of these facts.
`19
`20
`Turning to Slide 5 of the demonstratives. This is an excerpt
`21
`from the translated Song email and Exhibit 1005. Important to note are two
`22
`other details. This is an email that is offering pricing and terms for a certain
`23
`set of products which are called the "CTR Series" and which are shown in
`24
`the attachment. This email also specifies the delivery conditions. This says
`25
`the context from the Song email attachment which has the Raffel_Sample in
`26
`it. These products were being offered for sale on specific stated terms.
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`Case PGR2019-00029
`Patent D821,986 S
`Now, on Slide 6 of the demonstratives, this is the so-called
`1
`2 Raffel_Sample as it is shown on page 3 of Exhibit 1004 which is the first
`page of Song email attachment. In addition to showing the exact design that
`3
`4
`later patented, Exhibit 1004 shows this product as described with a menu
`5
`and product number -- that's those red box to the left -- offered at a specific
`6
`price. This is the 57.49 RFB that's in the middle red box. And with a
`7 minimum quantity specified. In this case, the minimum quantity is one.
`8 And also notes that this is delivered pricing that is being offered. These --
`In turning to Slide 7, the Song email attachment. Exhibit 1004
`9
`10
`at page 4 and this is a Slide title on its page. This is page 4 of Exhibit 1004;
`11
`not page 3. It specifies that standard terms and conditions will apply which
`12 makes the Song email a complete offer. And it says that small quantities of
`all items are available on demand. Thus, the Song email and its attachment
`13
`14
`is not talking about a product not yet available. At least small quantities can
`15
`be purchased all on demand. And there is no minimum number or
`16
`commercial threshold requirement of the on-sale bar, so long as there's at
`17
`least one product being sold. So, there's minimum quantity of one, available
`18
`on demand, for the offer terms and conditions. There's a complete offer and
`19
`triggers the on-sale bar. Taken together -- Exhibit 1004 conveys what the
`20 Federal Circuit will call the required elements of the complete offer for the
`on-sale bar. So, let's talk about the legal standards for the on-sale bars. This
`21
`22
`title does seem to be a dispute between the parties.
`23
`Turning to Slide 8. The Supreme Court issued it's still
`24
`controlling from work for the on-sale bar. The 1998 case Pfaff v. Wells
`25 Electronics. In this case, the Supreme Court set out the reasoning for the
`existence of the on-sale bar. It said "an inventor must be content with either
`26
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`Case PGR2019-00029
`Patent D821,986 S
`secrecy, or legal monopoly" in order to not trigger the on-sale bar after the
`1
`invention is ready for patent. To do otherwise would impermissibly exempt
`2
`the statutorily available time for protection of an invention. The Supreme
`3
`4 Court also provided guidance for what an inventor should not do. An
`inventor should not commercially market the product and it says that this is
`5
`6
`requirement that an inventor should be possible -- for an inventor to
`7
`understand and control. This is not supposed to be a highly technical
`8
`standard. It's supposed to be a standard that the inventors can follow. More
`9
`recently, Federal Circuit (phonetic) in Meds. Co. reiterated this language
`10 with inferences emphasizing the commercial marketing of language from the
`11 Supreme Court upheld at a guidance for the on-sale bar.
`Turning to the next Slide; Slide 9 of the demonstratives. This
`12
`13
`goes against the Meds. Co. decision. The Court went on to offer guidance
`14
`that is in opposition to the guidance that Burch by would have to honor here
`15
`in this case. This brings us back to the Supreme Court's guidance in Pfaff v.
`16 Wells. Well, the inquiries certain with borrows from contract law. The
`focus is on whether the inventor attempted to profit from the invention more
`17
`18
`than one year before filing the patent. Thus, the (inaudible) Court gently
`19 moved away from some of the earlier guidance that patent is on -- in the
`20 Group One and Linear Tech cases regarding certain contractual standards.
`21 UCC does not have "talismanic significance" is one of the things it said.
`22 And it said that meeting, or not meeting the terms of the Institute not
`disbolative (phonetic). And I wanted to stress you --
`23
`24
`JUDGE OBERMANN: Counsel, I had one question. What
`25
`about the sale would not conceivably be covered or, or be within the scope
`26
`of the UCC? What takes it outside of the UCC?
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`Case PGR2019-00029
`Patent D821,986 S
`MR. BAKEWELL: Your Honor, I don't think it does take it
`1
`outside of the scope. And I do want to emphasize that we're -- the
`2
`3 Petitioners not conceding that it is outside the scope, but I think it is
`important for these -- to overall -- the discussion that we're having. To
`4
`5
`obviously a correct standard in that it is not strictly ties to the UCC. The
`6 UCC doesn't define an offer in the contractual standards. The bag you tend
`to go to. The restatement of the contracts which defines various factors that
`7
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`can be taken into account for whether an offer is an offer -- a price quotation
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`and Patent Owner -- and Patent Owner urges. For the price quotation, the
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`restatement set in the contracts. §26C which was quoted more recently by
`11
`the Federal Circuit as helpful here. Notice that a price quotation -- isn't a
`12
`price quotation even if the communication says it's a price quotation
`13
`dependent, in fact, it matters -- what the context are of the communication.
`14 That is, to take into account [0:15:04]
`15
`16 WHERE I STARTED
`17
`18 Are the completeness of the offer, and how many recipients their
`communication is directed to? Here, we have a complete offer in every
`19
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`sense. And we have it addressed to just one recipient Man Wah.
`21
`So, to answer your question more directly, I think it does satisfy
`22
`the offer for sale standard under the UCC, but even if it doesn't, even if
`23
`there's some technicality that left it out, the on sale bond in Section 102
`24
`accommodate that, because it was looking at it as a test product, it was
`25
`looking at commercial marketing (inaudible).
`26
`JUDGE OBERMANN: Thank you.
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`Case PGR2019-00029
`Patent D821,986 S
`MR. BAKEWELL: Thus, because contract formalities, strictly
`1
`speaking, don't govern. and this is the language from Meds. Co, the inquiry
`2
`is whether the price has been commercially marketed, which as I just got
`3
`into a little bit, allows a little bit of flexibility. It shows that the decision that
`4
`ignores the inventor's efforts to profit from the invention in favor formalities,
`5
`6 would be incorrect.
`Turning to Slide 10 of the demonstratives, Patent Owner has
`7
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`consistently relied on two Federal Circuit cases from before the 2016 en
`9
`banc Meds. Co. decision to support its position. Group One and Linear
`10 Tech, which were both decided earlier, but to the extent that either contrasts
`11 with the language of the en banc decision in Meds. Co. neither offer
`guidance that remains valid. And this applies to dicta at each step, arguably
`12
`13
`set a strict standard about following the detail to the accepted language from
`14
`the restatement of contracts. And this was indeed different because it was
`15
`outside the scope of what either court was holding. Neither court was
`16
`considering the facts that were remotely close to an offer for sale. The
`17
`courts acknowledged this themselves.
`18
`Turning to Group One, this was a case where the actual Patent
`19 Owner had created a machine for curling ribbon, which it reached out to
`20 Hallmark, the card company, and said, oh I have a machine that did not
`provide much details about the machine, and asked Hallmark if it would be
`21
`22
`interested in licensing the product. There were no terms mentioned to
`23 Hallmark. It was a very indefinite offer of some, really an offer to start
`talking about this. The parties then began to talk about it, but at no point
`24
`25 were the terms more specifically discussed.
`So, when -- so because the terms weren't exclusively discussed,
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`Case PGR2019-00029
`Patent D821,986 S
`the court noted that the communications were indefinite and lacked specific
`1
`terms such as price and quantity. And that's different than the song email
`2
`and the offer made in the present circumstances.
`3
`And this is similar to Linear Tech as well. If we turn to Slide
`4
`12 of the demonstratives, this -- sorry about that, I believe this is 11 of the
`5
`demonstratives. The Linear Tech case was about computer chips that a
`6
`company had invented. And it sent out a newsletter to customers telling
`7
`them to be aware that a new product would soon be available. It mentioned
`8
`that a new chip was going to be available. It didn't, again, it didn't offer
`9
`pricing terms. It didn't offer any ways for the customers to accept. It simply
`10
`11 was not an offer.
`Which the court acknowledged it said, you know the newsletter
`12
`13
`speaks of this as a product not yet available for sale. And none of this
`14
`language arguably offers the LT1070 for sale. Thus, when the courts were
`15
`talking about adhering to the statements, these were easy cases for the court
`16
`to decide. And in such general easy decisions, it's easy to draw standards,
`17
`restatements, not misstatements, but in close calls the Federal Circuit, you
`18
`have to go back to the Supreme Court guidance from fact. Which is that this
`19
`is about an attempt to profit was looking -- what we're looking at is
`20
`commercial marketing, which is a slightly broader standard.
`21
`Turning to Slide 12, one issue that the Patent Owner has raised,
`22
`is that this was a preliminary offer that the parties were expecting additional
`23
`negotiations of a supply agreement to be signed and eventually assisted with
`24
`purchase orders to be implemented. This doesn't affect whether the email
`25
`itself, Exhibit 1004, was an offer for sale under the (inaudible). It was set
`26
`looking at just this email.
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`Case PGR2019-00029
`Patent D821,986 S
`Several district courts have considered this issue and they've
`1
`rejected the argument that Patent Owner’s tried to make. In the case of
`2
`3 Orbis Corp., the fact that additional negotiations might be expected, and that
`additional details may need to be discussed between the parties, didn't
`4
`5
`change the fact that an initial offer was being made. And this was the case
`6 where a baking sheet company had reached out to a manufacturer, had
`obtained a quotation from a manufacturer and then turns to the customer --
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`8
`JUDGE FLAX: Counsel?
`9
`MR. BAKEWELL: And -- yes.
`10
`JUDGE FLAX: Counsel, this is Judge Flax. I have a question
`11
`about the Raffel sample and the email that had it attached thereto. So, the --
`12
`the email from Mr. Song seemed to include a definite price for this product,
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`identified the product. The price included shipping and I presume the
`14
`shipping would be to the -- to the business location of the Petitioner. Had --
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`had the Petitioner, at that point said, all right send me one of them, here's
`16
`payment. Would then -- would then the Patent Owner be obligated to send
`17
`the product?
`18
`MR. BAKEWELL: Yes, at least within a definition of small
`19
`quantities, which are available on demand. This is --
`20
`JUDGE FLAX: (Inaudible) a -- a quantity of one?
`21
`MR. BAKEWELL: Then absolutely, Your Honor. The terms
`22
`of the offered products, the shipping terms, there -- there really isn't any
`23
`incomplete aspects of this offer. And the Patent Owner hasn't pointed to
`24
`anything beyond the formalities of what is customary in the industry to take
`25
`it, such as a purchase order, but the fact is that under the standards for a --
`26
`under the statement -- standards for what the offer is, this was a complete
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`Case PGR2019-00029
`Patent D821,986 S
`offer being offered. And therefore could have been accepted legally
`speaking.
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`JUDGE FLAX: So, this is Judge Flax again, is an offer for
`3
`sale, or a simple sale, different or the same as a negotiation that would end in
`4
`a supply agreement? If they're different why?
`5
`MR. BAKEWELL: A negotiation that is -- could end in a sales
`6
`agreement might not actually be talking about any particular product, it
`7
`8 might not be talking about the terms and conditions of any particular sale.
`9 And in that case, Your Honor, although that's not what we're pointing to
`here, it would not be offering a particular product at any particular terms. In
`10
`11
`contrast, an offer for sale is, talking about in the context of the on-sale bar, a
`12
`product that's later patented and offering commercially marketing that
`13
`product to another party, trying to induce them to enter into a commercial
`14
`agreement. Whether or not that standard requires adhering to the
`15
`restatement, we contend it doesn't, but even if it does, a complete contractual
`16
`offer however is communicated, can be accepted by the receiving party.
`17
`In the case of some hybrid approach where you have an offer
`18
`that's making -- maybe later leads to a supply agreement. And again, that
`19 Patent Owner has factually established that these are connected, but even if
`they are, the fact that there is an earlier complete offer isn't changed by the
`20
`21
`fact that later negotiations occur. When the offer was made it is an offer and
`22
`it triggers the on-sale bar.
`23
`JUDGE FLAX: So, this is Judge Flax again.
`24
`MR. BAKEWELL: Yeah.
`25
`JUDGE FLAX: I -- I suspect you might turn to it at some
`26
`point, but I'd like to ask you a question about your -- your case regarding
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`Case PGR2019-00029
`Patent D821,986 S
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`publication.
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`1
`MR. BAKEWELL: Yes.
`2
`JUDGE FLAX: So, at -- at the -- at the preliminary stage of
`3
`this case, we -- we had no response from the patent -- the Patent Owner.
`4
`5 And so reading your arguments in the attachment from the -- from the Raffel
`sample email, you know it -- it appeared to us that it was possible that when
`6
`7
`the attachment said that the documents are available at Raffel's website that
`8
`that would include the publication with this picture of the design, or the
`9
`product that looks like the design. Now, their argument now, is that that
`10
`statement does not apply to the product, and that you don't have any real
`11
`evidence that there was a publication. So, what is your response to that?
`12
`MR. BAKEWELL: Thank you, Your Honor. The, you know
`13
`as -- as the Board is well aware, the evidentiary standard here is
`14
`preponderance of the evidence. And here we have the Raffel sample email,
`15 Exhibit 1004, stating on its face that these exhibits, these documents are
`available at Raffel.com. That is --
`16
`17
`JUDGE FLAX: Well, I'm not -- I'm not sure that that includes
`18 what you were arguing that it includes. I'm not sure that that includes this
`product description. Because that line directly follows the phrase, all sales
`19
`20
`are subject to Raffel systems standard terms and conditions of sale and
`21 warranty. So, grammatically, it appears that that's -- that statement's saying
`that the documents are available, but the website refers to those documents.
`22
`23 Now, --
`24
`25
`26
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`MR. BAKEWELL: Yes, Your Honor.
`JUDGE FLAX: -- your -- your expert was asked during
`deposition if he'd ever investigated whether or not this was published prior
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`Case PGR2019-00029
`Patent D821,986 S
`to the patent date, and he had never even heard of the Way Back Machine or
`of any processes for determining whether something was available online at
`a -- a prior date. So, what is your response to that?
`MR. BAKEWELL: Your Honor, we are relying upon the
`statement in the -- on the face of the document itself. And we are aware, of
`course, of the argument the Patent Owner is making, and which you stated
`right there, that these documents could otherwise refer to the standard terms
`and conditions and the warranties. The Patent Owner has submitted a
`declaration in support of that interpretation.
`We contend that the burden is still met, because that could be
`referring to the fact that these documents themselves have a very plausible
`reading for the board's determination. Whether that's referring to the
`documents that the wording is on, but even if it's not, Your Honor, I do want
`to emphasize that under Patent Owners interpretation of it, they -- the
`availability of the documents would refer to the standard terms and
`conditions, which would make this impact an even more complete offer
`under the offer for sale. Because the Patent Owner would in fact be
`representing that the complete terms and conditions were being specified in
`this email.
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`19
`So, both instances are invalidity under 102(a) --
`20
`JUDGE FLAX: Yes.
`21
`MR. BAKEWELL: -- (1). And the Patent Owners contention
`22
`for that which have -- they have submitted some evidence and supportive of,
`23
`24 was really just leaves this in favor of invalidity under the onset bias.
`JUDGE FLAX: So, counsel, this is Judge Flax again. These --
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`these terms -- standard terms and conditions of sale and warranty that are
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`Case PGR2019-00029
`Patent D821,986 S
`referenced in your exhibit 1004, we -- those are not of record, are they?
`1
`MR. BAKEWELL: They're not of record, Your Honor.
`2
`JUDGE FLAX: Okay. Thank you.
`3
`MR. BAKEWELL: But, Your Honor, I would note that Patent
`4
`5 Owner, in Exhibit 1004, is representing that these are standard terms and
`conditions. It is a reasonable conclusion from that statement that these
`6
`7 would be complete terms and conditions of (inaudible), but of course, that --
`those are in addition to what the Federal Circuit has called the required
`8
`9
`elements for the on-sale bar, which is price, quality and delivery terms,
`10 which are on the face of the 1004 exhibit.
`So, looking back at Slide 12, of the demonstratives, the two
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`district court cases that examines this on the process of additional
`13
`negotiations, determined that subsequent negotiations, does affect the on-
`14
`sale bar when an initial offer for sale was made.
`15
`Turning to Honeywell, this for LCD displays in a cockpit for an
`16
`airplane. And the Patent Owner there argued that practice in the industry,
`17
`that -- that additional negotiations would occur, but -- but no one accepted
`18
`after one initial offer that just wasn't done. The court rejected that argument
`19
`for good reason. It said that even if it wasn't done, it could have been
`20
`accepted, the terms were complete. And as I said, effective, further
`21
`negotiations might arise, or even be expected does not preclude the AIMS
`22 Proposal from being an invalidating offer.
`And so, turning to Slide 13, and back to Exhibit 1004, this
`23
`24 meets all the required elements of an offer for sale for the on-sale bar. It
`offers the CTR UR2 08 product with an accompanying illustration. This is
`25
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`exhibit 1004 at page three. It specifies the minimum quantity as one, this is
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`Case PGR2019-00029
`Patent D821,986 S
`the same page. It -- it specifies the price as 57.49 RMB. And again, I would
`1
`emphasize that this is not an approximate number, this is an exact quoted
`2
`price. It is 57.49 RMB per unit. And the price includes delivery. These
`3
`4 were complete terms being offered.
`This specifies that all sales are subject to Raffel Systems
`5
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`standard terms and conditions of sale and warranted. This is Exhibit 1004 at
`7
`page four. And states that small quantities of all items are available on
`8
`demand, which I've spoken about already.
`9
`So, the Patent Owner also stated that he was looking forward to
`10
`the opportunity of taking our partnership to the next level. This is Exhibit
`11
`1005 at page one, in which was an introductory email to this offer. This --
`12
`this -- taken together, the Patent Owner is evidencing that it was attempting
`13
`to profit from this and never denied it was trying to sell it. It was offering it
`14
`on specific terms. The on-sale bar was triggered, and the Patent Owner had
`15
`on one year to file for a patent after sending this email. Which it did not do.
`16
`Turning to Slide 14, a very close factual patent examined by the
`17 Federal Circuit in 2016, further supports this petition. This is the Merck
`case. In the Merck case, the Patent Owner had sent a fax to another party,
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`stating that after some negotiations that it's up to you, if you'd like to submit
`20
`a purchase order for two kilograms of a crystalline salt. Here is the price.
`21 Please send me the purchase order and we'll take care of it. The parties had,
`prior to that, signed an NDA that required that the parties, both sides, any
`22
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`transaction, for it to be binding.
`24
`Nevertheless, the court looked at the facts. It looked at the -- it
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`didn't care that a purchase order would need to be submitted as further
`26
`procedural steps. It looked at the facts, there's a complete offer and
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`Case PGR2019-00029
`Patent D821,986 S
`determined that that triggered the on-sale bar under -- under Section 102.
`1
`So, as it says, Martin's details fax providing essential price,
`2
`delivery and payment terms contained all the required elements to qualify
`3
`for commercial offer for sale. And similar to the Merck case, the Song
`4
`email and exhibit 1004 has the price, it has the delivery times, and it has
`5
`payment. And so these also are required elements and satisfies a
`6
`commercial offer for sale for the on-sale bar purposes. Thus, the on-sale bar
`7
`has been triggered as the offer for sale shown in Exhibit 1004.
`8
`Turning to Slide 15, this reiterates the language from the
`9
`10 Supreme Court in 1998. That it is a condition of an investor's right to a
`patent that he shall not exploit his discovery competitively, after it is ready
`11
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`for patenting. He must content himself with either secrecy, or legal
`13 monopoly.
`The product, the Raffel sample shown in the Song email was
`14
`ready for patenting. The design was complete. This is a designed patent
`15
`that we're talking about. And the design was fully shown in that email.
`16
`17 Raffel was not satisfied with either secrecy or proceeding with the patent
`process until 14 months after it had sent an offer for sale demand law.
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`19
`So, accordingly, the D'986 patent is invalid, it should never
`20
`have been issued, it's in violation of the on-sale bar under Section 102.
`21
`JUDGE PAULRAJ: Counsel, Now, -- this is Judge Paulraj. I -
`22
`- I had a question. So, I saw in the record that you chose not to depose any
`23
`of Patent Owner's declarants. And, you know and it doesn't look like you --
`24
`you sought any additional testimony from Mr. Song or any of the
`25
`participants in -- in -- in that transaction.
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`So, is -- is it your position that, you know your case -- your case
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`Case PGR2019-00029
`Patent D821,986 S
`in chief, and your burden with respect to the on-sale bar can just be satisfied
`1
`by us looking at the content of the email itself? I think I'm -- my general
`2
`concern is that this is a very fact specific situation. We don't have any
`3
`background knowledge. The email, for example, refers to a meeting that
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`took place between Mr. Song and representatives of -- of Man Wah. We
`5
`don't have any facts about what -- what went on in that meeting. Can -- can
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`you address that -- that concern?
`7
`MR. BAKEWELL: Absolutely, Your Honor. And that's a
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`good point. Looking at the burden of proof, to answer that one first, the
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`answer is yes. The document, on its face, can answer the question before the
`10
`board about whether this was an offer for sale. It has what the Federal
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`12 Circuit has described as the required elements, the price and quantity, the
`delivery terms.
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`14
`But, more to your point about the overall factual context, which
`15 Patent Owner has submitted some declarations for, these should not change
`the board's analysis. In the Merck case, this is the Federal Circuit case from
`16
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`2016. The courts -- the parties had entered into some general discussions
`18
`before the fact that issued -- facts that they asked at issue were -- was set, but
`19
`that didn't change the courts looking at the facts itself as it's containing those
`20
`required elements.
`21
`And, similarly, the court when looking at declarations
`22
`submitted by the Patent Owner, well it -- it talked about a prior case. It was
`23
`talking about a declaration, similar to what we have here, that was submitted
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`by the Patent Owner. And it said, we just rejected this attempt to evade the
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`on-sale bar, including that the testimony was insufficient to override what
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