Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-16-01098/USCOURTS-ca13-16-01098-0/pdf.json

Parties Involved:
Netac Technology Co., Ltd
Appellant
SanDisk Corporation
Appellee

Document Text:

NOTE: This disposition is nonprecedential.

United States Court of Appeals 

for the Federal Circuit ______________________ 

NETAC TECHNOLOGY CO., LTD,

Appellant

v.

SANDISK CORPORATION,

Appellee

______________________ 

2016-1098

______________________ 

Appeal from the United States Patent and Trademark 

Office, Patent Trial and Appeal Board in No. 95/001,747.

______________________ 

Decided: July 26, 2016

______________________ 

WENYE TAN, Anova Law Group, PLLC, Sterling, VA, 

for appellant. Also represented by XIAOQUN WU. 

DARRYL J. ADAMS, Baker Botts, LLP, Austin, TX, for 

appellee. Also represented by BRIAN W. OAKS, JEFFREY 

TODD QUILICI; RUSSELL J. CRAIN, Dallas, TX. 

______________________ 

Before PROST, Chief Judge, SCHALL and CHEN, Circuit 

Judges.

Case: 16-1098 Document: 32-2 Page: 1 Filed: 07/26/2016
2 NETAC TECHNOLOGY CO., LTD v. SANDISK CORPORATION

PROST, Chief Judge. 

This appeal is from a decision of the Patent and 

Trademark Office Patent Trial and Appeal Board 

(“Board”) in an inter partes reexamination of U.S. Patent 

No. 7,788,447 (“’447 patent”), owned by Netac Technology 

Co., Ltd. (“Netac”). The examiner rejected all 35 claims of 

the ’447 patent as obvious. Each claim was rejected based 

on at least 12 different combinations of prior art, with a 

total of 60 rejections. Netac appealed the examiner’s 

rejections to the Board, which affirmed all 60 rejections. 

Sandisk Corp. v. Netac Tech. Co., No. 2015-001443, 2015 

WL 5092840, at *1 (PTAB Aug. 21, 2015) (“Board Decision”).

Netac then timely appealed to us. For the reasons 

stated below, we affirm the Board’s decision.

BACKGROUND

The ’447 patent relates to a flash memory external 

storage device. ’447 patent Abstract. The portable storage device is in the form of a single-piece USB flash drive 

that replaces prior art floppy disk drives and other physical drives, which require two separate devices to be operational—a physical drive connected with a host computer 

and a storage device (e.g., a floppy disk) to be inserted 

into the physical drive for data access. Id. at col. 1 ll. 39–

49.

The claimed external storage device uses flash 

memory as storage media. Power for the external device 

is provided by a host computer via a USB, and a data 

exchange channel is established for the host computer 

and the external storage device to exchange data or 

information in accordance with the USB standard. Id. at 

col. 5 ll. 4–12. When the external flash memory storage 

device is plugged into the data processing host, a driver 

coordinates with firmware in the flash device to initialize 

the device and assign a display symbol for the external 

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NETAC TECHNOLOGY CO., LTD v. SANDISK CORPORATION 3

device. Id. at col. 9 ll. 21–35. The driver processes operation requests in magnetic disk operation format that are 

sent from the operating system to the external device. 

The driver then converts the operation instructions into a 

format for execution by the firmware. Id. at col. 4, ll. 27–

67.

The ’447 patent has 35 claims, of which claim 1 is the 

only independent claim. Claim 1 recites:

1. A portable flash memory storage device 

comprising:

at least one flash memory module built-in 

said device, wherein said flash memory module is 

arranged on a block basis;

a USB or IEEE 1394 connector for establishing a data exchange channel between a host computer and said flash memory module based on 

USB or IEEE 1394 standard;

a microprocessor for processing commands to 

directly access data or information in the said 

flash memory module, said microprocessor further 

comprises a firmware for processing user requests 

to access the flash memory module; and

a circuit connected with said USB or IEEE 

1394 connector and said flash memory module, 

through which a DC power supply is provided 

from said host computer through said USB or 

IEEE 1394 connector to said flash memory module and said microprocessor upon connecting said 

portable flash memory storage device with said 

host computer,

wherein said portable flash memory storage 

device only acquires DC power from the host computer through said USB or IEEE 1394 connector; 

and

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4 NETAC TECHNOLOGY CO., LTD v. SANDISK CORPORATION

wherein said microprocessor coordinates with 

a driver for the portable flash memory device in 

the host computer to assign and display a device 

symbol for said portable flash memory device upon connecting said USB or IEEE 1394 connector 

to the host computer.

’447 patent col. 12 ll. 2–30.

During the reexamination, the examiner rejected all 

35 claims based on various combinations of three primary 

references and eleven secondary references. Each claim 

was rejected based on at least 12 different combinations of 

prior art, with a total of 60 rejections. A list of all references and the 60 rejections can be found in the Board’s 

final decision. Board Decision, 2015 WL 5092840, at *2–

4.

In its response to the examiner’s non-final rejection of 

the claims, Netac attempted to swear behind the three 

primary references, alleging that the subject matter of the 

claims was conceived before November 1, 1998, and was 

reduced to practice no later than February 1999. The 

examiner disagreed, finding that one of the references, 

U.S. Patent No. 6,292,863 (“Terasaki”), was 35 U.S.C. 

§ 102(b) art that cannot be sworn behind; that the earliest 

conception date shown was February 2, 1999; and that 

Netac failed to exercise the required diligence during the 

relevant times.

On April 12, 2013, after closing prosecution, the 

examiner issued a Right of Appeal Notice. Netac appealed to the Board, making many of the same arguments 

that it had made before the examiner. The Board affirmed the rejections of all 35 claims. 

Netac timely appeals the Board’s decision to us. 

Notably, many of the arguments that Netac makes before 

us in this appeal are identical to those made by Netac in a 

related appeal that we recently decided. In Netac TechCase: 16-1098 Document: 32-2 Page: 4 Filed: 07/26/2016
NETAC TECHNOLOGY CO., LTD v. SANDISK CORPORATION 5

nology Co. v. SandDisk Corp., No. 15-1630, Netac appealed the rejection of all claims of U.S. Patent No. 

6,829,672 (“’672 patent”), the parent of the ’447 patent. 

We summarily affirmed the Board’s decision in that case. 

Netac Tech. Co. v. Sandisk Corp., No. 2015-1630, 2016 

WL 495590 (Fed. Cir. Feb. 9, 2016). 

We have jurisdiction under 28 U.S.C. § 1295(a)(4)(A).

DISCUSSION

We review the Board’s legal conclusions de novo and 

factual determinations for substantial evidence. See In re 

Elsner, 381 F.3d 1125, 1127 (Fed. Cir. 2004); In re Gartside, 203 F.3d 1305, 1316 (Fed. Cir. 2000). “A finding is 

supported by substantial evidence if a reasonable mind 

might accept it as adequate to support the finding.” In re 

Adler, 723 F.3d 1322, 1325 (Fed. Cir. 2013).

Netac makes a number of arguments on appeal. 

First, Netac contends that the Board erred in determining 

the invention date of the ’447 patent and in refusing to 

determine the publication dates of certain secondary 

references. Second, Netac argues that the Board erred in 

its construction of two claim terms: “directly access” and

“special operation instruction.” Third, Netac challenges 

the Board’s rejection of all claims as obvious.

We conclude that substantial evidence supports the 

Board’s findings that Netac failed to show conception 

before February 2, 1999, and that it failed to establish 

diligence during the entire relevant time period. Importantly, Netac does not appear to dispute the Board’s 

finding with respect to lack of diligence on appeal. We 

thus agree with the Board that Netac cannot antedate 

any of the three primary references and that they were 

properly considered prior art. We also agree with the 

Board that Netac waived its argument that the publication dates for three of the secondary references were 

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6 NETAC TECHNOLOGY CO., LTD v. SANDISK CORPORATION

incorrect because Netac failed to challenge the publication 

dates during prosecution. 

Netac’s claim construction arguments are also unpersuasive. Netac contends that the term “directly access” 

means “communicating without a communication protocol 

conversion.” Appellant’s Br. 24. We note that another 

panel of the Board rejected this same argument by Netac 

in the related reexamination of the ’672 patent, Sandisk 

Corp. v. Netac Tech. Co., No. 2013-004839, 2013 WL 

6858246, at *16 (PTAB Dec. 30, 2013), and that we summarily affirmed the Board’s decision in that case, Netac 

Tech. Co. v. Sandisk Corp., No. 2015-1630, 2016 WL 

495590 (Fed. Cir. Feb. 9, 2016). We again find no error in 

the Board’s determination that nothing in the intrinsic 

record limits the term “directly access” in the manner 

proposed by Netac.

With respect to “special operation instruction,” we 

note that Netac did not proffer a construction for this 

term before the Board. Thus, to the extent that Netac has 

not waived this argument, at most, the question is whether the Board properly determined that two of the secondary references disclose the “special operation instruction” 

limitation. We conclude that substantial evidence supports the Board’s conclusion that both references “disclose 

conversion of commands from a magnetic disk format and 

sending those commands to a flash memory,” J.A. 31, and 

thus find no error in the Board’s obviousness determination on this point.

Finally, Netac challenges a number of the Board’s 

findings in its obviousness analysis. For example, the 

Board affirmed the examiner’s rejections of each of the 35 

claims on the basis of the Terasaki reference in combination with various secondary references. Netac says that 

all of those rejections should be set aside because Terasaki does not teach the “directly access” term under Netac’s 

proposed construction. As explained above, however, we 

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NETAC TECHNOLOGY CO., LTD v. SANDISK CORPORATION 7

disagree with Netac’s construction. Because Netac presents no further persuasive argument with respect to 

those rejections, we conclude that the Board did not err in 

its obviousness determination.

CONCLUSION

We have considered Netac’s remaining arguments and 

conclude that they are without merit. Because there was 

no error in the Board’s determination that all claims of 

the ’447 patent are unpatentable as obvious over the cited 

prior art, we affirm.

AFFIRMED

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