Court Opinion

ID: 4018854
Source: CourtListenerOpinion
Date Created: 2016-07-26 16:01:07.433807+00
Date Added: 2024-06-11T14:08:01.688558
License: Public Domain

NOTE: This disposition is nonprecedential.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.
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 Deci-
sion”).
    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 stor-
age device is in the form of a single-piece USB flash drive
that replaces prior art floppy disk drives and other physi-
cal drives, which require two separate devices to be opera-
tional—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
NETAC TECHNOLOGY CO., LTD   v. SANDISK CORPORATION        3

device. Id. at col. 9 ll. 21–35. The driver processes opera-
tion 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 establish-
   ing a data exchange channel between a host com-
   puter 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 mod-
   ule 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 com-
   puter through said USB or IEEE 1394 connector;
   and
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 up-
    on 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 refer-
ences 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 ap-
pealed to the Board, making many of the same arguments
that it had made before the examiner. The Board af-
firmed 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 Tech-
NETAC TECHNOLOGY CO., LTD   v. SANDISK CORPORATION      5

nology Co. v. SandDisk Corp., No. 15-1630, Netac ap-
pealed 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 Gart-
side, 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. Im-
portantly, 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 publica-
tion dates for three of the secondary references were
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 unper-
suasive. 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 sum-
marily 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 wheth-
er the Board properly determined that two of the second-
ary references disclose the “special operation instruction”
limitation. We conclude that substantial evidence sup-
ports 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 determina-
tion 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 combina-
tion with various secondary references. Netac says that
all of those rejections should be set aside because Terasa-
ki does not teach the “directly access” term under Netac’s
proposed construction. As explained above, however, we
NETAC TECHNOLOGY CO., LTD   v. SANDISK CORPORATION       7

disagree with Netac’s construction. Because Netac pre-
sents 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