nine aylus networks versus apple there are some more seats in the back marshall if you want to tell people they can file in there's more seats back there now that people left yes your honor all right come on you guys i apologize for the chaos mr zacar go ahead thank you so we're here on behalf of aylus looking for a motion summary judgment this motion summary judgment with no infringement was granted prebased finding the common ground is confidential second the district court looked at the best location to find support for its conclusion of claim construction isn't it just claim construction you've got claim construction and those are the different sources of claim construction right correct the court looked at the court intended to do claim construction but in its claim construction it did so primarily based on principle of claim differentiation look back to support that claim differentiation and then said it was confirmed by a couple of statements that we had made and gone beyond so i want to address each one in turn because a single primary base for the court's plan was based on the claim differentiation and we believe the claim differentiation report misunderstood the difference between claim one and claim two let me start with the fundamental inventions the fundamental invention is an iphone that controls a control point an it server that controls the control point a media service with the content issued those are four components of the invention what claim one said is one is the communication with one the other one is the communication with the other the only way the media can get from the media server to the video editor is if the control point and the control point work together that's the only way that it could happen if the two of them okay how about this if you don't mind i'm going to fast forward you suppose i agree with you that the plain meaning of the claims read in the context of the spec does not prohibit cp from being invoked in claims two and twenty one let's just jump forward and say that i agree with you until that point but your hurdle to overcome it seems to me is disclaimer now we can give it a lot of different names we can call it prosecution history disclaimer or we can call it judicial estoppel but i'm not sure what the right name would be if it applies here but that to me is it seems like the heart of what you need to convince us of and your honor when i was preparing this that was my conclusion as well the issue is really not one of claim depreciation it's whether this prosecution disclaimer or not and so there's really two arguments the first is the ipr statement is itself nondisclaimer this court hasn't provided guidance on that and i think ipr practitioners would appreciate that but i actually want to focus on the second now which is was there a disclaimer in the statement and there are two statements made in the appendix shall i turn to both of those statements the first thing is on appendix nine hundred and seventy three and then the second statement is in appendix one thousand and two what is our standard for review when someone else finds there's a disclaimer under what standard of review do we review the lower court decision of a disclaimer your honor at the end of the day we will and i would actually present to the court to the district court actually didn't find a disclaimer they said it was akin to a disclaimer it really focused on the claim differentiation argument and really looked at the disclaimer as much as the court specifically said a confirmation but let me talk specifically to the disclaimer issue the disclaimer was the first sentence similarly certain other challenging patent claims require only that the control point the control point logically invoked so that starts with the word similarly here at ja1039 no i'm sorry on one thousand nine hundred and seventy three it's in the middle of the page middle of the page it starts with the word similarly there's the first sentence where the court we said that only that the control point logic be used it would suggest to the ordinary reader from the english language that would exclude the involvement of the control it would suggest to the user that the only thing that could be used is the cpp and what i would say is this case knows exactly what the was which is you have a sentence that would appear to go into if this was the entirety of the record i would read that and say that sentence seems to imply that the control point can't be used but it's not the entirety of the record the entirety of the record actually a combination of three sentences here you should read the next two sentences that follow let me read those two next sentences it says the question going is is only the cpp allowed or is any cpp required and the very next sentence says in other words the challenge claim require select reinvoking of cp logic and cpp logic and then the very next sentence it says as discussed above this is a key aspect of the claim invention which addresses an important objective namely the reducing of expensive bandwidth in one thousand nine hundred and ninety four studying the bandwidth cost about twenty five cents a minute or whatever so your goal what he was planning here was to go to the server remotely to the phone but minimize that usage of the cellular communication as much as possible so that the free wifi would do as much but again reducing does not equal eliminating what they are saying apple of their statement was to both only the cp is allowed it did not say our interpretation is only the cp is required and two it said the cpp eliminates the use of the excuse me the cp use eliminates and i'm saying the very next sentence says don't eliminate reduce the use i believe this is identical to the sandisk scenario where one statement standing alone one sentence standing alone often seem if you took that first sentence and there was nothing else in the record yes it would probably imply that would seem to imply that the cp can't be used but if you read the next two statements it doesn't say only the cpp is allowed it just basically says the cp is required it certainly doesn't say the cp can have no involvement because it says you are reducing wireless bandwidth reducing would not imply elimination you take these sentences together the entirety of the prosecution's statement your honor we allege to the court that that's not what about the language at ja1004 which talks about again it has the language only the cpp is invoked and refers to that as being in claims two and twenty one those are two basically mirror statements but i would again argue if you look at the statement look at the very next statement that follows importantly these steps are the key purpose of enabling the local wireless network whatever such network is available in order to reduce the wireless consuming spectrum again what we're trying to do is in this scenario reduce the amount of work that the server on the internet history because you're using wireless communication network but the idea that a storefront would not be involved in we can also step back from the claim to understand what the patent is about the patent is about internet delivery of media content the first scenario is one is the international server the other one is connection with the media and where logic will imply that the two communicate but even if things seem structurally possible where the cp the phone with the wireless communication the idea that you wouldn't go to a storefront to pay for something what about the pto's response itself to those statements we're looking at judicial estoppel or prosection history estoppel and this case at page ja842 you've got the p tabs saying specifically that talks about the cp logic or the cpp logic exclusively handling the negotiation of the media content delivery suggesting that they were looking at this only language and interpreting it in a way that's the way apple is now interpreting it and therefore making a decision about ipr institution based on that understanding of the language that aylus used i have two responses to that you honor the first response apple actually at the district court level argued that what matters is what we said and this court should not take into account what ptab said or did well it's a legal issue yes one thousand one hundred and sixty six okay i'm assuming you apple sure should not be considered and i don't necessarily disagree with that but let's take a look at what the ptab said the ptab said that identical evidence has been used for claim one and claim two it didn't go into detail as to explain what it found as a distinguishing feature between the two and so what evidence could be missing what it did say was it appeared that the cp is exclusively patented and that was a actually a fourparty argument at the district court level what does the word handling mean and handling your honor one thing that we argue at the district court levels handling doesn't mean an exclusion of involvement right handling mean which is what we were saying at the district court level potential was the cp and saying jump on the phone click on this movie pay for the movie get it to me and you just go to cp and all you get is an encryption key is the term and you get that information and you go get the content handling could easily be understood to mean what we presented at the district court which is look you can get the content you can do it select it get your content but you're gonna need an activation handling could easily prevent that and so what i would say is but in the prior art that was asserted against these claims both cpp and cp logic were in both correct correct they were capable of being invoked both of them were capable of being invoked you got around that prior art arguably with regard to claim two and by twenty one by a sentence that says only cpp is invoked to negotiate media content between the ms and mr i guess i don't understand the prior art had both you say the way you get around the prior art is you only use one i don't understand how to reconcile that you want me to look at the context of everything and the context of everything includes what were you trying to overcome and the thing you were trying to overcome used both how do you overcome that thing if i don't give the same reading to this language the district court did your honor without going into a detailed explanation of prior art the difference between claim one and claim two is claim one says both of these must be present and both must negotiate to deliver the content claim two is one step beyond while claim two says not only must you have the option of having the two of them work you must also have the option of having pure delivery the concept that claim two was delivering was i'm gonna give you paid content i can give you in claim two the structure of having the youtube content where i don't want to be involved or a website link right the point of claim two is it provides an additional limitation in terms of optionality what is the additional limitation the additional limitation is that the cpp it can be eliminated it doesn't necessarily require to be eliminated the additional limitation of claim two is you can have a structure where only if the cpp does all the content okay but that was the argument you made to overcome to prior art reference right but the difference to overcome the prior art reference was that's a possibility it's not the question that's required wait wait wait i feel like we're beginning to get confused between the liberty issues with respect to what's allowed and in respect to infringement what's required what is allowed in a prior art what is allowed to overcome the prior art reference is if there is a structure one possibly within the different possibilities that allows to say this is not prior art allows yeah you agree of course just as a basic teaching point that something that anticipates a claim if earlier would later infringe the claim right something that anticipates would later infringe the claim correct right the analysis somebody shouldn't be able to say one thing to the patent office in order to avoid a prior art rejection and then later take a different approach when asserting infringement right correct right no i'm not saying that's what we did what i'm trying to explain is that what we said to the patent office is that claim two requires two functionalities one is both work one is one works where do you get the idea that it says both work well claim two requires right the claim should've ended on claim one so the logic of claim two would be that you have two separate functionalities no claim two would depend on claim one which means it therefore must be narrower than claim one claim one required two claim two came along and required only one well the narrower doesn't mean an additional in functionality limitations you have that two functionalities in claim two your specification also talks about the advantages of in some circumstances having this ccp logic work and sometimes having the ccp logic and the cp logic but it provides a very specific reason why in the scenario of claim two you'd want to only have the cp logic work isn't that right correct we're trying to eliminate or reduce the bandwidth that's used on the wireless spectrum the consequences that you want the cpp to do as much as possible right you want to have the cp do as little as possible because the cp communication is going to cross the wireless spectrum and that consumes money and what we're trying to do is reduce that consumption of money and that's exactly what we said is that we're attempting to reduce that cost and you do successfully reduce it if you use only one right absolutely when you have that reduction one theoretical possibility of reduction is elimination we don't disagree with that what you agreed to in the beginning was that one sentence read out of context you said would look really bad for you and you started on page nine something and i'm on page one hundred and four that one sentence appears in multiple places in this record this one sentence you said looks bad for you but you said the sentences that come after save us but i could interpret the sentence that come after about reduction to you reduce the bandwidth if you use only one and that is how you in fact do reduce the bandwidth why don't i read those two sentences as consistent with each other since reduction if i read the first sentence and it says only this one and i read the second sentence it says will reduce bandwidth well yes if you use only this one it will reduce bandwidth i don't understand how the reduction sentence saves you because reduction is not elimination well if we had met to say no involvement the very next sentence would've said the use the cp is eliminated therefore is benefiting in the communication the sentence actually in both seven thousand three hundred and ninety three and nine hundred and seventy three and in one hundred and four is followed immediately by the issue of reduction and i think an understanding of the technology makes it clear that you're never going to provide paid content without and so the idea that the cpp would eliminate the use of the cp entirely would not fall into how the payment content is delivered and would be delivered in a logical sense okay i think we have your argument you've used all your time and your rebuttal time i'll restore some let's hear from the other side i would encourage you to focus your argument on the same things that he did if you don't mind absolutely your honor if it please the court what i'd like to do is pick up exactly where we were on appendix nine hundred and seventy three i won't belabor the actual disclaiming sentence this counsel can see that that says what it says but the law says you can't look at the context but the context here are the following two sentences and counsel glossed over the second sentence the second sentence on nine hundred and seventy three starts in other words if the court's there it says in other words what we're going to be hearing is restating the same point in other words the challenge claims referring to the dependent claims require selectively invoking the cp logic and or a cp logic based on whether the ms and or mr can communicate with the uv through the local network it's saying that in the context of both being connected which is the context of claims two and twenty one that it is the cp logic that is selectively invoked that's just another way of saying only so we've got two things saying the same thing right back to back and even if you turn to the third sentence which is what the counsel what about the and i'm sorry selectively invoking cp logic and or cpp logic right and you wait wouldn't you normally say or if you meant them to be alternatives well that's because this is covering all three scenarios it's covering the independent claim scenario which is both i see okay i understand so it says based on whether they communicate it says as discussed above this is a key aspect of the claim invention so what do we know about that that means that this was not a slip of the lip this is something that they were focused on as being essential to their argument to the ptab and then we have the language that was just quoted which addresses an important objective namely reducing the use of expensive bandwidth we know counsel both in their brief and today stopped there they stopped there the sentence goes on eg white area cellular networks by implementing so now we're going to tell you how this reduction occurs by implementing a least cost routing decision about how to negotiate media content delivery well what's the how to negotiate media content delivery well that's what we were just going over in the claims it's choosing either the cp or the cpp or both depending on the network context all three of these sentences are saying the same thing the least cost routing decision is the how to negotiate and in this case when you pick the cpp as the court is acknowledged that reduction goes down to zero you can read all three these things consistently can i ask you then is it your view that the as discussed above key aspect and the reducing which includes the reducing language sentence is a sentence that applies to pretty much all the challenge claims and the arguments made with regard to say claim one as well as claim two or is that sentence really only applying to what is it is it two and twenty or two and twenty one i can't remember what the numbers are precisely that are at issue and i apologize your honor but can you point me to where you're which sentence you're referring to the reducing sentence the reducing sentence thank you the one that when you just said as discussed above this is a key aspect of the invention which addresses an important objective namely reducing use of expensive bandwidth now if that sentence was tailored only to a claim to argument and if you were right about claim two is one or the other basically only one thing then it would actually say eliminating and instead it says reducing so is your view that sentence is a broader sentence that applies to all the challenge claims in some cases it reduces in other cases it eliminates yes exactly it applies to all if you go back up into the text it's talking about the different variations and so this is capturing all of them what about how going up further in the text it actually starts with similarly certain of the challenge dependent claims so it's not talking about claims one and twenty it's talking about the dependent claims right right the sentence immediately proceeds that is talking about the independent claims it says based on the determination of the challenge independent claims so the first thing the independent claims then it turns to the defendant claims you're saying within one paragraph they're hitting both and then at the end when they summarize the advantages those are the advantages of and both or either one it's not crystal clear which sure scenario that's right the reduction language that's being pointed to is zero in the context of the claims two and twenty one and the claims the situation of the independent claims it would be a reduction but the point is all three of these sentences can be read together but the first sentence the disclaiming sentence means when it says and the counsel doesn't disagree with that and if i could turn your honors to the other disclaimer because this helps enlighten the situation as well we turn to one thousand and three and one thousand and four again we have to look at the context if we look at one thousand and three at the very last paragraph at the bottom of that page it starts to claims one two and four disclaimers one two and four as well as claims twenty twenty one and twenty three combined to claim three alternative steps so here they're telling the patent office that these are different ways to accomplish something depending upon what the network environment is then we have the disclaimer itself which is at the top of one thousand and four which says if however the ms and mr are both in communication with the ue via the local wireless network then only cpp involved to negotiate media content delivery between the ms and the mr that refers to claims two and twenty one there you have a great clear if then situation if a then b counsel then pointed to the reduced language but if you go down to the bottom of that page one thousand and four we have the same point made this says the fact that the upnp this is the very end of the page the fact that the upnp does not care how the ms and mr communicate reconfirms that the upnp design cannot and does not teach or suggest this feature of the claims this the key part which requires a least cost routing decision based on the determination available networks and so as we learned from looking at page nine hundred and seventy three the least cost routing decision is the decision of the cp or cpp logic is going to be invoked to do the media content delivery so again the language of the disclaimer itself is clear and the context surrounding it confirms that they meant exactly what they said mr fowler even if we agree with you that this amounts to a disclaimer this is part of the polyp way between the petitioner and the patent owner that occurred prior to the institution of the review why should we treat that as prosecution history sure there's i think two parts of the answer to that the first is an existing case law that the court can turn to to seek guidance from first we had the supreme court's cuozzo decision cuozzo said in part that itrs are reexamination i have the quotes here if you want but they say it has a judicial aspect to it and has a reexamination aspect to it but cuozzo didn't draw a line between exactly preinstitution postinstitution exactly that was going to be my next point in making that determination or making those statements that is perfectly judicial and perfectly examinationable they didn't draw a line saying that some of it's not and some of it is the statements are broadly worded statements and this court and its prior precuozzo decisions has held up proceedings such as exparty reexamination interparties reexamination and reissue proceedings those kinds of statements the same kind of statements that were made here were made there constitute part of the prosecution history and can be disclaimers and we know those cases in our brief the katz case which had to do with reexamination dupont you're addressing now the point about whether or not something that doesn't occur prosecution we all typically think of as being that ex parte proceeding that results in the grant of a patent reexamine inter partes reexam all this ipr stuff is sort of different and what you seem to be addressing now is the idea that statements made in those contexts have nonetheless been held by our court to constitute prosecutions through disclaimer don't fiddle with the words judge more we could have called it reexamined disclaimer we could have called it ipr disclaimer but why give it so many different names but i guess the question i thought that judge lynn asked you which i don't think any of those cases you point to address and definitely correct me if i'm wrong is but this statement was made before the proceeding was even initiated to what extent is a statement made in advance of such a proceeding part of the history that ought to be folded in very good there are two parts to that as well the cases that have addressed this issue of when the proceeding starts have had to do with for example whether you can appeal a denial a motion to stay in a cpm that's an intellectual properties case or whether pr estoppel applies that's the shaw case and in those cases both cases the court had to grapple with the issue of when does a proceeding start because the right to do those two things or the collusion for estoppel turned on when a proceeding began so the court did a statutory analysis as it should and determined that because those two things are based on the proceeding the proceeding will start upon institution but that doesn't answer the different question of whether what happened before that is part of the prosecution history right none of the cases that this court has addressed including the hpk so those are the really the three cases in addition to cuozzo that addressed this issue have said that what happens before is not part of the prosecution history it doesn't compel that result either well let me ask you a question i don't mean to interrupt but let me ask you a question try to shed some light on this let's suppose these same two statements were made in a colloquy that occurred in a separate lawsuit between aylus and apple that would not amount to a prosecution history estoppel because it has nothing to do with the normal prosecution activities that take place in the patent office where the patent office has a proceeding before it that will ultimately determine the scope of patent coverage whether claims are allowed or not allowed arguments made in a separate lawsuit between parties don't create estoppels like that don't create prosecution history why should this argument made in the course of a proceeding that occurs prior to the review be treated any different well that's a very good question first of all this is in front of the patent office that's one of the distinguishing factors but what difference does that make well i'll tell you because these are the statements made by the patent holders to the patent office for the purposes of coming to the patent office and many of claims is to avoid prior art in order avoid a finding of unpatentability that's something that's very much like the original prosecution and the same statements that you could see here could have been made in the original prosecution and without knowing the context you wouldn't be able to tell the difference because in both cases the patent holder's trying to avoid accountability and this courts well on prosecution history disclaimers founded at least on two very important public policy public interest policies one of which is to avoid the situation of allowing a patent holder to report to the patent office and say one thing to avoid a finding of unpatentability which is exactly what happened here and then be able to go to the district court and say something else against an alleged infringer that underlies many cases that this court is going all the way back to southwall for example similarly public notice function this court has prosecution industry disclaimers based on the fact that alleged infringers or people practicing patents are entitled to look to the patent office the record in the patent office is a part of the record in the patent office to see what the patent has said about the meaning and scope of the patent claims and the last thing i would say is that even if the disclaimers if the disclaimers are made and they're effective then that's it that's it for the alleged infringer in ptab because the statements have consequences the failure to institute or a decision not to institute is final and not appealable you have a situation here where apple made a substantive argument to the patent office aylus made a substantive argument to the patent office the patent office although it's not part of the quote marriage proceeding evaluated the merits of the parties claims on the substance and decided that it wasn't substantially likely that apple would be able to prove its claim based upon the disclaimers made by aylus and having denied that institution apple therefore had no had no right to a remedy yes it does you can go after it in district court there's no estoppel that's what shaw says so apple still has another venue in which to pursue exactly the same claim that's why it would be so awful if estoppel kicked in earlier wouldn't it if estoppel kicked in earlier then than apple would be arguably precluded well i'm sorry it didn't have any remedy with respect to what had happened because it's not appealable the fact is what happened is yeah but lots of people deal with that every day the pto denies and sometimes they don't even give you a reason why and you've got no right to appeal in the same quills the same context this is one reason why disclaimers should be plight this court has had a well developed body of disclaimer law that applies to statements exactly like this and oftentimes you have a disclaimer of original prosecution the examiner doesn't require an amendment allows the claim but because the patent holder said something in public very clearly that limits the claims this court has said that should limit the claims that people should be bound by what they said there was no public policy reason or no legal reason why that shouldn't apply here where someone's talking to the patent office and limiting their claims to try to avoid a finding of unpatentability which is exactly what happened here you mentioned i'm sorry to interrupt i want to make sure i get my question in you mentioned earlier that we have held that statements made during reexamination or probably reissue have been found to be prosecution's history estoppel statements my question is are any of those are you aware of any cases where i know the patent owner can request reexamination the patent owner can request reissue i think only the patent owner can and there can be times when those statements that are made in those requests have any of those statements been considered to be prosecution history statements that are important for understanding the meaning of claims well in the dupont case that was a reissue case so i think that may answer your question and that was held to be part of the prosecution not just the ratio but maybe the preliminary statement before the reissue is actually instituted or granted there are some procedure by which the pto looks at the declaration that is provided with the reissue and makes a determination for example as to whether that is adequate for the ratio to occur is that a situation you're talking about i am not sure of the answer to that question to be honest with okay and can i ask you a very policy oriented question sure as i'm sitting here thinking about what you said which was helpful because it called to me called to mind to me the purpose of notice a person a competitor who wanted to know what the scope of these claims are would likely read the patent and if they had any gumption at all would get the entire prosecution history of this patent if there were a re exam they'd want it and they get it that's what i believe people would do and so those statements in there put the world on notice at least with regard to what the inventor believes is the scope of his or her invention and they affect more than just individual parties and individual cases right they would block prosecution more generally because they're all public unlike judicial estoppel where a competitor wouldn't necessarily go after all the documents and in fact those could be sealed right confidential so many times all this stuff's confidential what's said before the patent office is something that is routinely turned to by every competitor in a space they may not have access to know about or have any even ability to acquire things that may or may not be stated in a judicial document that's exactly right and that's entirely consistent with this court's prior holdings on judicial disclaimer and prosecution history disclaimer and why it's so important and i should point out that one of the many reasons why although the same result could be achieved here through judicial estoppel the court may not get there and this is the superior way to reach the same conclusion okay but again that's okay we're going to restore a little bit of a rebuttal time for your colleague you're all set yeah all set okay thank you very much okay let's do two minutes of rebuttal i'm used to seeing you over here two minutes thank you your honor in the time i'd like to sort of respond to three issues the first one was ms fowler talked about least cost value suggesting that that you go to the lowest price but in telecommunications least cost value is a decision where you look at alternative pathways to these costs that you would take into account load balancing pathways the encryption zone the least cost value terminology in telecommunications and entertainment context refers to looking at the cost but deciding within the in the end briefing we didn't get to brief the meaning of the word of least cost value is but that's what least cost value means secondly this court discussed the issue or pipr and whether those should be prosecutionary disclaimers your honor the court includes a postinstitution on hybrid proceedings the pipr are very similar to do an ipc type proceeding where you are truly just going back and forth and explaining to the court to the ptab and saying this is what our patent's about so to hold those as prosecution disclaimers your honor would change the nature of pipr proceedings more akin to where the outcome of the patent the scope of the claims can be discussed but you're not arguing that the remarks made should go away and be ignored we're not your honor because they're going to have some effect they should have some effect wouldn't you agree as a matter of prosecution history disclaimer or judicial estoppel one way or the other the statement was made it was part of the public record it's before the patent office it's in the file history it's not going to go away we're not arguing this way your honor well if you're not arguing that it goes away then you're stuck with it right but the question is whether we should be stuck with it in terms of as a prosecution disclaimer or wherever we should be stuck with it as a judicial estoppel i think the the end result in terms of your case it doesn't matter what we call it does it no i understand the first one is clear nonequivocal statement the second one is clear inconsistency i think you'll understand that they're very different again i come back to this case and say your honor please relook at this case in those three sentences in the entirety of the context and in those context that was intended to be disclaimer what we were trying to do was to reduce the wireless spectrum that we were using okay i thank both counsel the argument is taken under advisement