`
`NOTE: This disposition is nonprecedential.
`
`United States Court of Appeals
`for the Federal Circuit
`______________________
`
`KINGSTON TECHNOLOGY COMPANY, INC.,
`Appellant
`
`v.
`
`SPEX TECHNOLOGIES, INC.,
`Appellee
`______________________
`
`2019-1256
`______________________
`
`Appeal from the United States Patent and Trademark
`Office, Patent Trial and Appeal Board in No. IPR2017-
`01021.
`
`______________________
`
`Decided: February 21, 2020
`______________________
`
`DAVID M. HOFFMAN, Fish & Richardson, P.C., Austin,
`TX, argued for appellant. Also represented by OLIVER
`RICHARDS, San Diego, CA.
`
` KRISTOPHER DAVIS, Russ August & Kabat, Los Angeles,
`CA, argued for appellee. Also represented by MARC AARON
`FENSTER, PAUL ANTHONY KROEGER, BENJAMIN T. WANG.
` ______________________
`
`Before DYK, O’MALLEY, and STOLL, Circuit Judges.
`
`
`
`Case: 19-1256 Document: 46 Page: 2 Filed: 02/21/2020
`
`2
`
`KINGSTON TECH. CO. v. SPEX TECHS., INC.
`
`STOLL, Circuit Judge.
`Kingston Technology Company, Inc. appeals the Pa-
`tent Trial and Appeal Board’s final written decision declin-
`ing to find claims 55–57 of U.S. Patent No. 6,003,135
`anticipated by PCT Application WO 95/16238 (Jones). Be-
`cause substantial evidence supports the Board’s determi-
`nation that Jones does not expressly or inherently disclose
`certain limitations of claims 55 and 56, we affirm as to
`those claims. With regard to claim 57, we hold that the
`Board abused its discretion when it rejected Kingston’s
`supplemental briefing for purportedly presenting a new
`theory of invalidity. We therefore vacate the Board’s deci-
`sion as to claim 57 and remand for the Board to consider
`Kingston’s supplemental briefing addressing claim 57.
`BACKGROUND
`I
`The ’135 patent, titled “Modular Security Device,” is di-
`rected to a modular, typically portable, device that com-
`municates with a host computing device—e.g., a host
`computer. The disclosed modular device contains a secu-
`rity module and a target module. The security module pro-
`vides security functionality such as encryption or password
`control, while the target module provides non-security
`functionality such as data storage, biometric scanning, a
`modem, or a smart card reader. The ’135 patent discloses
`that separating the security elements of the modular de-
`vice from other functionality provides for a single security
`module that can be used to provide security to multiple
`types of interactions with the host computer.
`In certain embodiments, the security module can be po-
`sitioned inline such that all communications between the
`target module and the host computer must travel through
`it. The same security module can also be used with a vari-
`ety of target modules, thereby increasing flexibility. In ad-
`dition, the modular device can be implemented to assume
`
`
`
`Case: 19-1256 Document: 46 Page: 3 Filed: 02/21/2020
`
`KINGSTON TECH. CO. v. SPEX TECHS., INC.
`
`3
`
`the identity of the target module such that the security
`module is transparent to the host computer.
`Claims 55 and 57 are illustrative:
`55. For use in a modular device adapted for com-
`munication with a host computing device, the mod-
`ular device comprising a security module that is
`adapted to enable one or more security operations
`to be performed on data and a target module that
`is adapted to enable a defined interaction with the
`host computing device, a method comprising the
`steps of:
`receiving a request from the host computing device
`for information regarding the type of the modular
`device;
`providing the type of the target module to the host
`computing device in response to the request; and
`operably connecting the security module and/or the
`target module to the host computing device in re-
`sponse to an instruction from the host computing
`device.
`. . .
`57. For use in a modular device adapted for com-
`munication with a host computing device, the mod-
`ular device comprising a security module that is
`adapted to enable one or more security operations
`to be performed on data and a target module that
`is adapted to enable a defined interaction with the
`host computing device, a method comprising the
`steps of:
`communicating with the host computing device to
`exchange data between the host computing device
`and the modular device;
`
`
`
`Case: 19-1256 Document: 46 Page: 4 Filed: 02/21/2020
`
`4
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`KINGSTON TECH. CO. v. SPEX TECHS., INC.
`
`performing one or more security operations and the
`defined interaction on the exchanged data;
`mediating communication of the exchanged data
`between the host computing device and the modu-
`lar device so that the exchanged data must first
`pass through the security module; and
`operably connecting the security module and/or the
`target module to the host computing device in re-
`sponse to an instruction from the host computing
`device.
`’135 patent col. 26 ll. 12–53 (emphases added to highlight
`disputed claim limitations).
`The specification of the ’135 patent explains that some
`embodiments conform to the PCMCIA standard. PCMCIA
`cards, popularized in the 1990s, were removable modules
`with a variety of functions—e.g., modem, smart card
`reader, data storage—that could be inserted into a desig-
`nated slot in a laptop computer. The Personal Computer
`Memory Card International Association established the
`standard for PCMCIA cards (hence the name),1 and the
`PCMCIA standard is comprised of multiple discrete speci-
`fications.
`
`II
`Jones is the only prior art reference at issue on appeal.
`Jones is a PCT Application directed to “[a] detachable
`PCMCIA memory card . . . incorporating a smartcard inte-
`grated circuit.” Jones at Abstract. The memory card of
`Jones provides removable data storage secured by a pass-
`word, encryption, or both.
`Jones discloses at least one embodiment that conforms
`to the PCMCIA standard. Jones specifically cites to the
`
`
`1 PCMCIA cards were later dubbed “PC Cards.”
`
`
`
`Case: 19-1256 Document: 46 Page: 5 Filed: 02/21/2020
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`KINGSTON TECH. CO. v. SPEX TECHS., INC.
`
`5
`
`“PC Card Standard Specification, Release 2.01, published
`in November, 1992,” but does not expressly incorporate
`that specification by reference. Jones col. 5 ll. 22–23; see
`also id. at col. 8 ll. 26–29 (similar). Elsewhere, Jones ex-
`plains that “[t]he programming interface to the PCMCIA
`Card Services software is defined in Section 3 of the
`PCMCIA Standard (Release 2.01),” but again does not ex-
`pressly incorporate that disclosure by reference. Id.
`at col. 9 ll. 16–19.
`
`III
`inter partes review of
`for
`Kingston petitioned
`claims 55–58 of the ’135 patent based on anticipation by
`Jones, obviousness over Jones alone, and obviousness over
`Jones in view of other prior art. The Board initially de-
`clined to institute review for claims 55–57, but modified its
`institution decision to include those claims following SAS
`Institute, Inc. v. Iancu, 138 S. Ct. 1348 (2018). The Board
`then permitted Kingston to submit supplemental infor-
`mation pursuant to 37 C.F.R. § 42.123. The Board also au-
`thorized the parties to
`file supplemental briefing
`addressing the supplemental information submitted by
`Kingston.
`The Board issued a final written decision in which it
`held claim 58 unpatentable, but declined
`to hold
`claims 55–57 unpatentable. See generally Kingston Tech.
`Co. v. SPEX Techs., Inc., No. IPR2017-01021, 2018 WL
`4773543, at *1 (P.T.A.B. Oct. 1, 2018) (“Decision”). Rele-
`vant here, the Board found that Kingston had failed to
`show by a preponderance of the evidence that claims 55–57
`of the ’135 patent are anticipated by Jones.2 In so finding,
`the Board declined to consider Kingston’s supplemental
`
`
`2 Although not at issue on appeal, the Board also re-
`jected Kingston’s obviousness arguments based on Jones
`alone and in combination with other references.
`
`
`
`Case: 19-1256 Document: 46 Page: 6 Filed: 02/21/2020
`
`6
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`KINGSTON TECH. CO. v. SPEX TECHS., INC.
`
`briefing regarding claim 57 because Kingston had, in the
`Board’s assessment, presented “new argument and new in-
`validity theories not presented or relied upon in the Peti-
`tion.” Id. at *12 (first citing 37 C.F.R. § 42.23(b); then
`citing Office Patent Trial Practice Guide, August 2018 Up-
`date 14, https://go.usa.gov/xU7GP).
`Kingston appeals the Board’s finding of no anticipation
`of claims 55 and 56 along with the Board’s refusal to con-
`sider Kingston’s arguments addressing claim 57 in its sup-
`plemental briefing. We have jurisdiction under 28 U.S.C.
`§ 1295(a)(4)(A).
`
`DISCUSSION
`I
`We first address the Board’s finding of no anticipation
`of claims 55 and 56. “A patent claim is invalid as antici-
`pated only if each and every element of the claim is ex-
`pressly or inherently disclosed in a single prior art
`reference.” Guangdong Alison Hi-Tech Co. v. Int’l Trade
`Comm’n, 936 F.3d 1353, 1363 (Fed. Cir. 2019) (first citing
`35 U.S.C. § 102 (2006);3 then citing SRI Int’l, Inc. v. Inter-
`net Sec. Sys., Inc., 511 F.3d 1186, 1192 (Fed. Cir. 2008)).
`Anticipation is a question of fact that we review for sub-
`stantial evidence. Blue Calypso, LLC v. Groupon, Inc.,
`815 F.3d 1331, 1341 (Fed. Cir. 2016) (citing Kennametal,
`Inc. v. Ingersoll Cutting Tool Co., 780 F.3d 1376, 1381
`(Fed. Cir. 2015)). For the reasons that follow, we conclude
`
`
`3 Because the ’135 patent does not contain any claim
`with an effective filing date on or after March 16, 2013, the
`applicable version of 35 U.S.C. § 102 is the one preceding
`the changes made by the America Invents Act. See
`Leahy-Smith America Invents Act, Pub. L. No. 112-29
`§ 3(n), 125 Stat. 284, 293 (2011).
`
`
`
`Case: 19-1256 Document: 46 Page: 7 Filed: 02/21/2020
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`KINGSTON TECH. CO. v. SPEX TECHS., INC.
`
`7
`
`that the Board’s findings as to claims 55 and 56 are sup-
`ported by substantial evidence, and accordingly, we affirm.
`Claim 55 recites, in relevant part, “receiving a request
`from the host computing device for information regarding
`the type of the modular device,” and “providing the type of
`the target module to the host computing device in response
`to the request.” ’135 patent col. 26 ll. 19–22. Claim 56 de-
`pends from claim 55 and therefore includes the same “re-
`ceiving” and “providing” limitations.
`In its petition, Kingston identified certain passages of
`Jones as disclosing the “receiving” and “providing” limita-
`tions. In particular, Kingston pointed to Jones’s disclosure
`that, “[t]o implement the PCMCIA interface standard,” its
`secure memory card “stores information enabling the host
`computer to automatically identify the particular PCMCIA
`card as soon as the card and host are connected.” Jones
`col. 5 ll. 24–29 (emphasis added). The Board was not per-
`suaded by this passage because, in its view, “automatically
`identify” is not specific enough to disclose the separate “re-
`ceiving” and “providing” steps of claim 55. Indeed, the
`Board noted that Jones’s reference to “automatic” identifi-
`cation actually suggests that Jones does not require any
`request from the host computer prior to the identification
`of the PCMCIA card.
`In support of its supplemental briefing for claims 55
`and 56, Kingston submitted excerpts from two PCMCIA
`standard specifications. Before the Board, Kingston con-
`tended that this additional evidence established that the
`“automatic” identification of Jones incorporates functions
`from the PCMCIA standard that satisfy the “receiving” and
`“providing” limitations of claims 55 and 56. In particular,
`Kingston pointed to the GetTupleData and GetConfigura-
`tionInfo functions as implementing the automatic identifi-
`cation described in Jones.
`The Board was not persuaded by the additional evi-
`dence submitted by Kingston. Although Jones expressly
`
`
`
`Case: 19-1256 Document: 46 Page: 8 Filed: 02/21/2020
`
`8
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`KINGSTON TECH. CO. v. SPEX TECHS., INC.
`
`references the “PC Card Standard Specification, Re-
`lease 2.01, published in November, 1992,” Jones col. 5
`ll. 22–23, the Board noted that Jones does not incorporate
`that specification by reference. And even assuming that
`Jones incorporates the identified specification, the Board
`noted that the functions relied on by Kingston are de-
`scribed in a different specification, the PCMCIA Card Ser-
`vices Specification, Release 2.0.
`Finding no express disclosure in Jones, the Board
`turned to inherent disclosure. The Board found that Jones
`also fails to inherently disclose the “receiving” and “provid-
`ing” limitations through its general references to the
`PCMCIA standard. Specifically, the Board was unper-
`suaded that a person of ordinary skill in the art would have
`understood the automatic identification of Jones to require
`use of the GetTupleData and GetConfigurationInfo func-
`tions—not least because Jones makes no reference to the
`PCMCIA specification that describes those functions. Even
`assuming that an ordinarily skilled artisan would have un-
`derstood Jones’s “automatic” identification to reference
`those functions, the Board further reasoned that the speci-
`fication identified by Kingston provides no indication that
`the functions are mandated by the PCMCIA standard. In-
`deed, the passage that Kingston cited for the GetTuple-
`Data function explains that
`Card Services clients may need to process a
`PC Card’s Card Information Structure (CIS) to de-
`termine if and how they will interact with a card
`detected in a socket. (Some clients may receive all
`the
`information
`they
`require
`from
`the
`CARD_INSERTION event).
`J.A. 1623 (emphases added).
`On this record, we cannot say that the Board’s finding
`of no anticipation is unsupported by substantial evidence.
`Kingston bore the burden of proof on this issue, and there
`are numerous material flaws in the evidence that Kingston
`
`
`
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`KINGSTON TECH. CO. v. SPEX TECHS., INC.
`
`9
`
`presented. The Board reasonably found that Jones itself
`does not expressly disclose the limitations at issue through
`its automatic identification feature, and further that Jones
`does not incorporate by reference any PCMCIA specifica-
`tion, much less the ones proffered by Kingston. The Board
`also reasonably declined to find inherent anticipation here,
`where Kingston’s theory of invalidity relies on multiple in-
`ferential leaps. In particular, Kingston’s theory requires
`an inference that an ordinarily skilled artisan would have
`understood Jones’s general reference to the PCMCIA
`standard to necessarily disclose the use of the GetTuple-
`Data and GetConfigurationInfo functions—the use of
`which, based on the official descriptions provided by King-
`ston, does not appear to be a requirement of the PCMCIA
`standard. See Alison, 936 F.3d at 1364 (“An element may
`be inherently disclosed only if it ‘is “necessarily present,”
`not merely probably or possibly present, in the prior art.’”
`(quoting Rosco, Inc. v. Mirror Lite Co., 304 F.3d 1373, 1380
`(Fed. Cir. 2002))).
`We have considered the other arguments advanced by
`Kingston—including that Jones must disclose the limita-
`tions at issue because it discloses the initial communica-
`tion at the same level of detail as the ’135 patent; that the
`Board’s application of inherency was too strict; and that the
`Board ignored key evidence and arguments from a parallel
`district court litigation—but we discern no reversible error
`in the Board’s analysis. We therefore affirm the Board’s
`determination as to claims 55 and 56.
`II
`We next address the Board’s finding of no anticipation
`of claim 57. Kingston specifically challenges the Board’s
`rejection of its supplemental briefing for improperly pre-
`senting a new theory of invalidity for claim 57. We review
`the Board’s decision not to consider a new argument for an
`abuse of discretion. See Intelligent Bio-Sys., Inc. v. Illu-
`mina Cambridge Ltd., 821 F.3d 1359, 1367 (Fed. Cir.
`
`
`
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`KINGSTON TECH. CO. v. SPEX TECHS., INC.
`
`2016). For the reasons that follow, we hold that the Board
`abused its discretion when it declined to consider the argu-
`ments addressing claim 57 in Kingston’s supplemental
`briefing. We therefore vacate the Board’s finding of no an-
`ticipation of claim 57 and remand to the Board for further
`consideration.
`Claim 57 recites, in relevant part, “performing one or
`more security operations and the defined interaction on the
`exchanged data.” ’135 patent col. 26 ll. 45–46 (emphasis
`added). In its petition, Kingston identified the “defined in-
`teraction” in Jones as “the transfer of data between the
`host computer 110 and the data storage 150.” J.A. 1825–
`26 (citing Jones col. 11 ll. 15–20).4
`In its supplemental briefing, Kingston argued that
`SPEX Technologies, Inc., the patent owner, had taken a po-
`sition regarding claim 57 in the IPR that was “directly con-
`trary” its position on infringement in a parallel district
`court litigation. J.A. 1017. Kingston specifically pointed to
`the testimony of SPEX’s litigation expert, who had purport-
`edly identified data storage as the “defined interaction” in
`the accused devices. In the course of doing so, Kingston
`characterized its own argument in the petition as having
`established that “Jones allow[s] for the transfer and stor-
`age of data.” J.A. 1016 (emphasis added) (citing J.A. 1824–
`26); see also J.A. 1017 (“Spex cannot argue that claim limi-
`tations can be met by transfer and storage of data for in-
`fringement purposes, then deny that transfer or storage of
`data is sufficient to anticipate these elements.”).
`In its final written decision, the Board rejected King-
`ston’s supplemental arguments addressing claim 57 for
`
`
`4 Kingston similarly identified the “defined interac-
`tion” in the ’135 patent as “the exchange of data between
`the host and the target module (memory).” J.A. 1824 (cit-
`ing ’135 patent col. 20 ll. 28–36).
`
`
`
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`KINGSTON TECH. CO. v. SPEX TECHS., INC.
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`11
`
`improperly presenting a new theory of invalidity outside of
`the scope of the petition. The Board explained that King-
`ston’s argument in the petition identified the “defined in-
`teraction” in Jones as the transfer of data, not the storage
`of data. According to the Board, “the only mention of the
`word ‘storage’ . . . in the Petition is a parenthetical state-
`ment identifying the physical components between which
`the ‘transfer of data,’ alleged in the Petition to be the re-
`cited ‘defined interaction,’ allegedly takes place.” Decision,
`2018 WL 4773543, at *12 (citing J.A. 1825–26). The Board
`thus concluded that Kingston’s supplemental briefing on
`claim 57 constituted an “impermissible new argument”
`that the Board would not consider—regardless of any in-
`consistent positions that SPEX may have taken in the par-
`allel litigation. Id.
`On appeal, Kingston admits that it did not use the
`words “data storage” in its petition. But Kingston insists
`that its supplemental argument was proper because it
`merely clarified Kingston’s original theory of invalidity for
`claim 57 in response to criticism from the Board and incon-
`sistent litigation positions taken by SPEX.
`We agree with Kingston. Although the Board “‘has
`broad discretion to regulate the presentation of evidence,’
`that discretion is not without limits.” Altaire Pharm., Inc.
`v. Paragon Bioteck, Inc., 889 F.3d 1274, 1285 (Fed. Cir.
`2018) (first quoting Belden Inc. v. Berk-Tek LLC, 805 F.3d
`1064, 1081 (Fed. Cir. 2015); then citing Ultratec, Inc.
`v. CaptionCall, LLC, 872 F.3d 1267, 1274 (Fed. Cir. 2017)),
`remand order modified by stipulation, 738 F. App’x 1017
`(Fed. Cir. 2018). We acknowledge that the Board’s rules
`prohibit a petitioner from submitting new evidence or new
`argument in reply that the petitioner could have presented
`earlier. See, e.g., 37 C.F.R. § 42.23(b). Indeed, we have re-
`peatedly endorsed that proposition. See, e.g., Henny Penny
`Corp. v. Frymaster LLC, 938 F.3d 1324, 1330–31 (Fed. Cir.
`2019) (affirming Board’s rejection of a reply argument pre-
`senting an “entirely new rationale” for why a claim would
`
`
`
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`12
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`KINGSTON TECH. CO. v. SPEX TECHS., INC.
`
`have been obvious); Intelligent Bio-Sys., 821 F.3d at 1369–
`70 (affirming Board’s rejection of a reply argument pre-
`senting an “entirely new rationale” for motivation to com-
`bine). Yet we have also explained that “[p]arties are not
`barred from elaborating on their arguments on issues pre-
`viously raised,” Chamberlain Grp., Inc. v. One World
`Techs., Inc., 944 F.3d 919, 925 (Fed. Cir. 2019) (citing In-
`teractive Gift Express, Inc. v. CompuServe Inc., 256 F.3d
`1323, 1347 (Fed. Cir. 2001)), and that a reply argument is
`proper if it “cites no new evidence and merely expands on
`a previously argued rationale,” Ericsson Inc. v. Intellectual
`Ventures I LLC, 901 F.3d 1374, 1381 (Fed. Cir. 2018).
`Here, we conclude that Kingston did not improperly in-
`troduce new issues or new evidence relating to claim 57 in
`its supplemental briefing. Instead, Kingston’s supple-
`mental briefing merely elaborates upon its original argu-
`ment in order to clarify that the identified transfer of data
`in Jones incorporates the act of storing that data. Kingston
`did not identify or discuss any new theory based on Jones
`in its supplemental briefing, citing instead to the corre-
`sponding pages of its petition. See J.A. 1016–17 (citing
`J.A. 1824–26).5 Kingston’s petition characterizes the de-
`fined interaction in Jones as “the transfer of data between
`the host computer . . . and the data storage.” J.A. 1825–26
`(emphases added). As Kingston points out, in common par-
`lance “a memory module is storage.” Reply at 24. And at
`oral argument before this court, counsel for SPEX conceded
`that the act of transferring data from a host computer to
`memory is normally understood to include the act of storing
`that data. See Oral Arg. at 28:28–28:41, http://oralargu-
`ments.cafc.uscourts.gov/default.aspx?fl=2019-1256.mp3.
`
`
`5 The only new evidence offered by Kingston relating
`to claim 57—i.e., SPEX’s arguments in district court—was
`previously unavailable because those arguments were
`made after the petition was filed.
`
`
`
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`KINGSTON TECH. CO. v. SPEX TECHS., INC.
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`13
`
`Indeed, counsel for SPEX could not articulate any act be-
`yond storage that would normally take place when data is
`transferred from a host computer to memory. See id.
`at 28:00–28:28.
`On this record, Kingston’s supplemental briefing on
`claim 57 is properly characterized as a “clarification of its
`prior position in response to [others’] arguments,” as in
`Chamberlain, 944 F.3d at 925, not “an entirely new ra-
`tionale” worthy of being excluded, as in Intelligent Bio-Sys-
`tems, 821 F.3d at 1370. To hold otherwise would endorse
`an overly formalistic approach that would unduly inhibit a
`petitioner from responding to criticisms of issues that it
`properly presented in the petition. Accordingly, we vacate
`and remand for the Board to consider Kingston’s argu-
`ments addressing claim 57 in its supplemental briefing.
`CONCLUSION
`We have considered the parties’ other arguments, and
`we do not find them persuasive. For the foregoing reasons,
`we affirm the Board’s finding of no anticipation for
`claims 55 and 56, vacate the Board’s finding of no anticipa-
`tion for claim 57, and remand to the Board to consider
`Kingston’s supplemental briefing on claim 57.
`AFFIRMED-IN-PART, VACATED-IN-PART, AND
`REMANDED
`COSTS
`
`No costs.
`
`