Court Opinion

ID: 4509483
Source: CourtListenerOpinion
Date Created: 2020-02-21 17:00:43.152412+00
Date Added: 2024-06-11T09:37:52.750326
License: Public Domain

Case: 19-1256    Document: 46    Page: 1   Filed: 02/21/2020

        NOTE: This disposition is nonprecedential.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.
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 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
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 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;
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 4                     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.”
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 “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
     Kingston petitioned for inter partes review of
 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.
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 6                      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).
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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
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 8                     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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 10                    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.                    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                    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.                   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.