HTC Corporationv.Advanced Audio Devices, LLV

Patent Trial and Appeal Board

Dec 29, 2015

09641069 (P.T.A.B. Dec. 29, 2015)

Trials@uspto.gov Paper 40
571-272-7822 Date: December 29, 2015

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

HTC CORPORATION and HTC AMERICA, INC.,
Petitioner,

v.

ADVANCED AUDIO DEVICES, LLC,
Patent Owner.

____________

Case IPR2014-01154
Patent 6,587,403 B1
____________

Before SCOTT A. DANIELS, CHRISTOPHER L. CRUMBLEY, and
GEORGIANNA W. BRADEN, Administrative Patent Judges.

CRUMBLEY, Administrative Patent Judge.

FINAL WRITTEN DECISION
35 U.S.C. § 318 and 37 C.F.R. § 42.73

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I. INTRODUCTION
In this inter partes review trial, instituted pursuant to 35 U.S.C. § 314,
Petitioner HTC Corporation and HTC America, Inc. (collectively, “HTC”)
challenges the patentability of claims 1, 3, 6, 7, 11, 12, 16, 22, 24, 27, 29,
30, 35–37, 43 and 45–47 of U.S. Patent No. 6,587,403 (Ex. 1001, “the ’403
patent”), owned by Advanced Audio Devices, LLC (“AAD”).
We have jurisdiction under 35 U.S.C. § 6(c). This Final Written
Decision, issued pursuant to 35 U.S.C. § 318(a) and 37 C.F.R. § 42.73,
addresses issues and arguments raised during trial. For the reasons
discussed below, we determine that HTC has met its burden to prove, by a
preponderance of the evidence, that claims 1, 3, 6, 7, 11, 12, 16, 22, 24, 27,
29, 30, 35, 36, 37, 43, and 45–47 of the ’403 patent are unpatentable. We
also determine that AAD has not met its burden on its Motion to Amend
regarding entry of proposed substitute claims 49–65, and thus, we deny the
Motion to Amend.
A. Procedural History
On July 11, 2014, HTC filed a Petition requesting inter partes review
of claims 1, 3, 6, 7, 11, 12, 16, 22, 24, 27, 29, 30, 35, 36, 37, 43, and 45–47
of the ’403 patent. Paper 1, “Pet.” AAD filed a Patent Owner’s Preliminary
Response. Paper 7. In a December 30, 2014, Decision on Institution of
Inter Partes Review (Paper 6, “Dec.”), we instituted trial on claims 1, 3, 6,
7, 11, 12, 16, 22, 24, 27, 29, 30, 35, 36, 37, 43, and 45–47 based on the
following grounds:
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1. Whether claims 1, 6, 7, 22, 29, 30, 43, and 45–47 are unpatentable
under 35 U.S.C. § 102 as anticipated by Nathan ’259;1

2. Whether claims 1, 6, 7, 22, 27, 29, 30, 35, 43, and 45–47 are
unpatentable under 35 U.S.C. § 103 as having been obvious over the
combined disclosures of Nathan ’259 and Nathan ’255;2 and

3. Whether claims 1, 3, 6, 7, 11, 12, 16, 22, 24, 30, 35–37, 43, and 45–47
are unpatentable under 35 U.S.C. § 103 as having been obvious over
the combined disclosures of Sound Blaster,3 Lucente,4 and Ozawa.5
Dec. 22.
Following institution, AAD filed a Patent Owner’s Response to the
Petition (Paper 13, “PO Resp.”), and HTC filed a Reply (Paper 21, “Pet.
Reply”). AAD also filed a contingent Motion to Amend pursuant to
37 C.F.R. § 42.121 (Paper 14, “Mot. Amend”), to which HTC filed an
Opposition (Paper 22, “Amend Opp.”), and AAD filed a Reply (Paper 25,
“Amend Reply”).
HTC supported its Petition with the Declaration of Christopher
Schmandt (Ex. 1007), and submitted a Rebuttal Declaration of Mr.

1 Ex. 1002, WO 96/12259 to Nathan et al. (Apr. 25, 1996).
2 Ex. 1003, WO 96/12255 to Nathan et al. (Apr. 25, 1996).
3 Ex. 1004, Exhibit B, Sound Blaster 16 User Reference Manual. With
Sound Blaster, HTC submits the Declaration of Kyle A. Miller, which states
that Sound Blaster was publicly available “no later than the early spring of
1995.” Ex. 1004 ¶ 13.
4 Ex. 1005, EP 0598547 A2 to Lucente et al. (May 25, 1994).
5 Ex. 1006, US 5,870,710 to Ozawa et al. (filed Jan. 22, 1997).
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Schmandt (Ex. 1010) with its Reply. HTC submitted a third Schmandt
Declaration in support of its Opposition to the Motion to Amend. Ex. 1023.
With its Patent Owner Response and Motion to Amend, AAD filed
the Declaration of Joseph C. McAlexander III. Ex. 2003. AAD filed a
Second Declaration of Mr. McAlexander supporting its Reply on its Motion
to Amend. Ex. 2009. HTC took the cross-examination of Mr. McAlexander
via deposition. Ex. 1016. AAD also submitted the testimony of Peter J.
Keller, a named inventor on the ’403 patent. Ex. 2004.6
AAD filed a Motion to Exclude Exhibit 1004 (Paper 27, “Mot.
Exclude”), to which HTC filed an Opposition (Paper 29, “Exclude Opp.”)
and AAD filed a Reply (Paper 32, “Exclude Reply”).
Oral hearing was requested by both parties, and a consolidated oral
hearing involving this trial and related trials IPR2014-01155, IPR2014-
01156, IPR2014-01157, and IPR2014-01158 was held on September 17,
2015. A transcript of the oral hearing is included in the record. Paper 39,
“Tr.”
B. The ’403 Patent
The ’403 patent discloses an audio recording device that the
specification terms a “music jukebox.” Ex. 1001, 1:11–12. According to
the specification, existing recording devices permitted music to be recorded

6 Exhibit 2004 was the subject of a Motion to Seal (Paper 15), which was
granted. Paper 30. A public, redacted version of Exhibit 2004 was also filed
by AAD under the same exhibit number.
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onto a compact disc in real time, but did not provide editing functions, the
ability to store music on the recorder for making multiple copies of the disc,
or the ability to customize easily the order in which tracks are recorded onto
the disc. Id. at 2:24–58. The described music jukebox is said to address
these issues, as well as permit a user to “audition” a stored audio track by
listening to it before recording onto a compact disc. Id. at 3:19–38.
Various hardware components of the jukebox are described in the
specification, including: audio inputs for receiving music in the form of
analog signals (id. at 7:53–60); one or more data storage structures for
storing and retrieving audio stored in digital form (id. at 9:15–23); and a
drive for recording stored audio onto compact discs (id. at 14:4–5). The
audio data stored in the memory permits audio tracks to be played back
selectively, or “auditioned,” prior to recording. Id. at 4:35–44. The
components of the music jukebox are contained in a housing having a
display for providing information to a user, for example, through a graphical
user interface. Id. at 4:51–5:11. The housing also comprises a plurality of
push buttons for controlling operation of the device. Id. at 5:12–36.
The specification of the ’403 patent describes the operation of the
device as permitting a user to create “sessions,” which are groups of sound
tracks selected from a master song list. Id. at 15:63–65, 17:6–14. A user
also may reorder the songs within a session by selecting songs and moving
them up or down within the session list. Id. at 16:37–47. The session then
can be written to a compact disc. Id. at 15:60–63.
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C. Illustrative Claims
Of the challenged claims, only claim 1 is independent; all other
challenged claims depend, directly or indirectly, from claim 1. The
independent claim reads as follows:
1. A music jukebox configured for storing a music library
therein, said music jukebox comprising:
a housing;
an audio data receiver arranged to receive audio data from
outside the housing;
audio output structure located at least partially within the
housing for outputting audio signals;
data storage memory in the housing for storing audio data
received from outside the housing through the audio data
receiver,
said music jukebox including a user interface comprising
a display device located at least partially within the housing,
said display device providing a display which is viewable
from outside the housing,
and a plurality of manually operable function controllers on the
housing,
said music jukebox configured such that a music library of
sound tracks is storable in digital form in the data storage
memory as a result of audio data being received from
outside the housing through the audio data receiver,
said music jukebox configured such that said music library is
organizable into a master song list and at least one group of
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sound tracks wherein each group comprises at least one
sound track []7 from the master song list,
wherein said music jukebox is configured such that indicia of
said master song list and indicia of at least one group of
sound tracks are displayable on said display,
wherein said music jukebox is configured such that said
plurality of manually operable function controllers is useable
to select a group of sound tracks stored in the data storage
memory and operate the music jukebox such that said music
jukebox outputs audio signals through said audio output
structure.
Id. at 21:16–43 (line breaks and indentation added for readability).
In its Motion to Amend, AAD proposed substitute claims 49–65, of
which claim 49 is independent and a substitute for claim 1, if found
unpatentable. Mot. Amend 2. Claims 50–65 are proposed as substitutes for
dependent claims 6, 7, 11, 12, 16, 22, 24, 29, 30, 35–37, 43, and 45–47,
respectively. Proposed claim 49 reads as follows, with underlined material
indicating language added to original claim 1:
49. A music jukebox configured for storing a music library
therein, said music jukebox comprising:
a housing;
an audio data receiver arranged to receive audio data from
outside the housing;
audio output structure located at least partially within the
housing for outputting audio signals;

7 The word “selected” was removed from claim 1 by a Certificate of
Correction, entered Oct. 7, 2003. Ex. 1001.
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data storage memory in the housing for storing audio data
received from outside the housing through the audio data
receiver,
said music jukebox including a user interface comprising
a display device located at least partially within the housing,
said display device providing a display which is viewable
from outside the housing,
and a plurality of manually operable function controllers on the
housing,
said music jukebox configured such that a music library of
sound tracks is storable in digital form in the data storage
memory as a result of audio data being received from
outside the housing through the audio data receiver,
said music jukebox configured such that said music library,
after being stored, is organizable into a master song list and
at least one group of sound tracks wherein each group
comprises at least one sound track selected8 from the master
song list,
wherein after the sound tracks are stored and organized, the
order of the sound tracks in said group of sound tracks is
customizable,
wherein said music jukebox is configured such that indicia of
said master song list and indicia of at least one group of
sound tracks are displayable on said display,
wherein said music jukebox is configured such that said
plurality of manually operable function controllers is
useable to select a group of sound tracks stored in the data
storage memory and operate the music jukebox such that

8 AAD’s proposed claim 49 includes the word “selected,” notwithstanding
the fact that the word was removed from claim 1 via a Certificate of
Correction.
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said music jukebox outputs audio signals through said
audio output structure.
Mot. Amend 11–12.
II. DISCUSSION
A. Claim Construction
For purposes of our Decision to Institute, we analyzed each claim
term in light of its broadest reasonable interpretation, as understood by one
of ordinary skill in the art and as consistent with the specification of the ’403
patent. 37 C.F.R. § 42.100(b); see In re Cuozzo Speed Techs., LLC, 778
F.3d 1271, 1281–82 (Fed. Cir. 2015). In the Decision, we construed the
terms master song list, indicia of said master song list, manually operable
function controllers, and organizable. See Dec. 8–9. During the course of
the trial, neither party asked us to modify our constructions of master song
list, indicia of said master song list, or manually operable function
controllers. We see no reason to alter the constructions of these claim terms
as set forth in the Decision to Institute, and we incorporate our previous
analysis for purposes of this Decision. Therefore, for the reasons set forth in
the Decision to Institute, we interpret certain claim terms of the ’393 patent
as follows:
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master song list a list of sound tracks within a library

indicia of said
master song list
visible information that identifies a
master song list

manually operable
function controllers

controls that can be operated by hand
Dec. 8–9.
In our Decision to Institute, we construed organizable as “put things
into a particular arrangement by ordering or grouping.” Id. In its Response,
AAD asks that we reconsider our earlier interpretation of organizable. PO
Resp. 8–9. Specifically, AAD disputes our conclusion that the term could be
met by either ordering or grouping, as opposed to requiring ordering. Id.
According to AAD, the term should be construed “to mean that a user can
rearrange or customize the order of sound tracks.” Id. at 9. To support this
construction, AAD notes that our Decision cited two portions of the
specification which refer to “rearranging the order” and “customiz[ing] the
order” of sound tracks. Id.; see Dec. 9 (citing Ex. 1001, 13:11–12, 3:32–33).
AAD misunderstands our prior claim construction ruling. We cited
the above-quoted portions of the specification to demonstrate that, when the
’403 patentee wished to refer to ordering sound tracks, the terms
rearranging or customizing were used—as opposed to the term organizable.
Dec. 9. By contrast, we noted that the specification of the ’403 patent does
not use the word organizable outside the claims. Id. The claim language
itself, therefore, is the best guide to the meaning of the term. As we noted in
our Decision, claim 1 requires that the music library is “organizable into a
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master song list and at least one group of sound tracks.” Ex. 1001, 21:32–33
(emphasis added); Dec. 9. This usage implies that the user must be able to,
at the very least, add songs from the music library into groups such as the
master song list and the group of sound tracks. We note that AAD’s expert,
Mr. McAlexander, agreed with our construction of the term, with a minor
caveat discussed below. Ex. 1016, 31:6–32:16 (“The actual context of an
arrangement ordering and grouping, I have no problem with that. I think
they’re right.”). AAD’s proposed construction, which limits organizable to
only the ordering of songs, is not the broadest reasonable interpretation of
the claim term.
AAD attempts to read further limitations into organizable that do not
appear in our prior Decision. According to AAD, our Decision was based
“on the assertion that downloaded songs not in the queue represent the
master song list.” PO Resp. 28. In other words, AAD interprets our
Decision to require that “the two groups are mutually exclusive groups of
songs, i.e., the master song list, and the playback queue. As such, a song in
the queue cannot also be resident in the master song list.” Id. at 30.
Whatever the source of AAD’s interpretation, it is not correct. Our
Decision never construed organizable to require at least two mutually
exclusive groups of sound tracks, nor do we discern any basis in the claims
or the specification for such a construction.
For these reasons, we reaffirm our construction of organizable, with a
slight modification. As correctly noted by Mr. McAlexander during his
deposition, the claim term is an adjective, whereas the construction adopted
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in our Decision is a verb phrase. Ex. 1016, 31:6–32:16. We, therefore,
modify our construction of organizable to be “capable of being put into a
particular arrangement, by ordering or grouping.”
B. Patentability of Original Claims
We first address whether HTC has met its burden of proving by a
preponderance of the evidence that the challenged original claims are
unpatentable. We instituted trial on two related grounds, anticipation by
Nathan ’259 and obviousness over the combination of Nathan ’259 and
Nathan ’255, and will analyze these grounds together before turning to the
third instituted ground, obviousness over Sound Blaster, Lucente, and
Ozawa.
1. Alleged Anticipation of Claims 1, 6, 7, 22, 29, 30, 43, and 45–47 by
Nathan ’259
a. Disclosures of the Nathan References
The primary dispute between the parties on the Nathan references is
over what the references actually disclose. According to HTC, the jukebox
systems described in the Nathan systems permit purchase and download of
songs from a remote server, into a master song list stored locally on the
jukebox. Pet. 17–21. A user may then select songs from the master song list
into a queue; after the songs are played, they are deleted from the queue, but
not the local storage. Id. By contrast, AAD asserts that the jukeboxes of
Nathan permit users to purchase the right to play a song only once; when the
songs are downloaded, they are immediately added to the queue, then
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deleted from local storage immediately after they are played. PO Resp. 11–
12. According to AAD, therefore, a user of the Nathan system has no
control over the order of songs in the queue other than the order in which the
songs were purchased. Id. at 22. Nor does Nathan, in AAD’s reading,
provide any library distinct from the queue. Id. at 16 (“The queue is not a
subset of an internal music library; the queue is the music library.”) (citing
Ex. 2003 ¶ 62).
In our Decision to Institute, we determined that the record at that time
did not support AAD’s interpretation of the Nathan references. Rather, we
concluded that “it appears that Nathan ’259 discloses deleting songs from
the queue once they are played, not from the music library altogether.” Dec.
12 (citing Ex. 1002 ¶ 86 (“[w]hen the selection has been reproduced in its
entirety, it is removed from the queue file”)). We also determined that the
record supported the conclusion that Nathan ’259 discloses a “new selection
acquisition mode” (“NSAM”) for ordering and downloading new music onto
the jukebox. Dec. 13; Ex. 1002 ¶¶ 64–73. A “selection graphics screen”
then permits a user to add these newly acquired songs to a queue for
playback. Ex. 1002 ¶ 74. We concluded that Nathan ’259 appeared to
describe a master song list to which songs are added via the NSAM, as well
as the ability to create a queue of songs selected from the master song list
using the selection graphics screen. Dec. 13.
AAD’s Response contends that our interpretation of Nathan ’259 was
in error (PO Resp. 11), and Mr. McAlexander testifies in support of AAD’s
interpretation of the reference. Ex. 2003 ¶¶ 32–65. AAD raises several
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issues regarding the disclosure of Nathan ’259, which it contends are
inconsistent with HTC’s interpretation of the reference.
First, AAD asks why, if songs are not deleted entirely from the device
immediately following playback, Nathan ’259 does not disclose some sort of
“delete” function so that users can clear songs from the memory. PO Resp.
11–12. HTC responds by noting that Nathan ’259, as a patent document,
likely is focused on the novel aspects of the disclosed device as opposed to
known functions such as deleting files. Pet. Reply 9–10.
Prior art references are evaluated according to what they would
disclose to a person of ordinary skill in the art. See Sundance, Inc. v.
DeMonte Fabricating Ltd., 550 F.3d 1356, 1361 n.3 (Fed. Cir. 2008). As
such, the fact that a reference is silent regarding a particular feature only
signifies exclusion of that feature if a person of ordinary skill would
understand silence to imply exclusion. AAD provides no compelling
evidence this is the case with Nathan ’259. Mr. McAlexander, AAD’s
expert, testifies that there is no disclosure of a delete function in Nathan
’259, but does not state that he, or any other person of ordinary skill, would
interpret this silence to imply that a delete function is excluded. Ex. 2003 ¶
62. Furthermore, we note that Nathan ’255 explicitly discloses a manual
delete function for removing little-heard titles. Ex. 1003 ¶ 7. We do not
find the absence of an explicit “delete function” in Nathan ’259 to imply that
the Nathan jukebox does not have such a common and known function.
Second, AAD notes that Nathan ’259 discloses a system having as
little as 32 megabytes of RAM, and asks why such a small amount of
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memory is contemplated if a local music library is stored. PO Resp. 12–13.
HTC responds by noting that the 32 megabyte capacity is a minimum, and
Nathan ’259 puts no upper limit on the number of songs that can be stored.
Pet. Reply 10. Furthermore, HTC notes that Nathan ’255 discloses that its
device may store a “minimum of 350 to 400 titles.” Id. (citing Ex. 1003
¶ 7). We consider HTC’s interpretation on this point to be persuasive, and
do not understand the disclosure of a 32 megabyte minimum memory
capacity to be inconsistent with our understanding of the Nathan references.
Third, AAD points out a passage in Nathan ’259 that states that a
button “allows validation of the selection or selections for initiating their
introduction into the queue,” (Ex. 1002 ¶ 74) and argues that “validation”
refers to purchase of a song. PO Resp. 15–16. Therefore, under AAD’s
theory, purchase of a song results in immediate addition to the queue. Id. at
38. HTC contends that such an interpretation would render Nathan ’259’s
two modules redundant, as there would be no reason to have both a “new
selections acquisition module” (“NSAM”) and a “selection graphics screen,”
if songs are directly added from the NSAM to the queue. Pet. Reply 8. We
agree with HTC, and additionally note that Nathan ’259 uses the word
“validate” in other contexts meaning “to confirm.” Ex. 1002 ¶ 75
(“validates his choice”), ¶ 114 (“validates the credit card”). We, therefore,
interpret “validation of his the selection” in paragraph 74 of Nathan ’259 to
refer to confirming that a song will be added to the queue, rather than
purchase of a song.
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At oral argument, AAD discussed these issues, and asked several
other questions regarding the disclosure of Nathan ’259 which had not been
raised previously in briefing. Tr. 53–54. Even if we were to consider such
arguments properly raised,9 we do not find them persuasive. Based on our
review of the Nathan references in light of the expert testimony, our
interpretation of the Nathan disclosures has not changed.
We find that Nathan ’259 discloses a jukebox that permits the
downloading of song tracks via its NSAM. Ex. 1002 ¶ 64, 73 (“The display
of FIG. 9 allows the user to access the new selections acquisition mode in
connection with the NSAM module. . . . Button (1038) allows ordering of
the selection which is then downloaded according to the above described
mode.”). A different “selection graphics screen” shows the songs that have
been downloaded, permits the user to sort the songs according to different
criteria, and gives the user the ability to add songs to a queue. Id. ¶ 74
(“Button (124) allows validation of the selection or selections for initiating
their introduction into the queue or their immediate and successive
performance if the queue is empty.”). Contrary to AAD’s argument, we see
no reason to conclude that when a file is purchased and downloaded, it is
immediately added to the queue, and deleted from local memory
immediately after it is played. Nor do we find that the Nathan systems only

9 “A party may . . . only present [at oral hearing] arguments relied upon in
the papers previously submitted. No new evidence or arguments may be
presented at the oral argument.” Office Patent Trial Practice Guide, 77 Fed.
Reg. 48,756, 48,768 (Aug. 14, 2012).
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permit the order of the queue to be determined by purchase order, as
opposed to the order in which the songs are selected from the library of all
downloaded songs.
b. Analysis of Anticipation by Nathan ’259
Anticipation requires not only that all elements of a claim are
disclosed within the four corners of a single prior art reference, but that the
elements are “arranged as in the claim.” Net MoneyIN, Inc. v. VeriSign, Inc.,
545 F.3d 1359, 1369 (Fed. Cir. 2008). For the following reasons, we
determine that Petitioner has not proven by a preponderance of the evidence
that Nathan ’259 teaches all elements of claim 1, and by extension, any of
the challenged dependent claims.
Claim 1 requires, inter alia, “a housing” and “a display device located
at least partially within the housing.” Furthermore, the claimed music
jukebox must be configured “such that indicia of said master song list and
indicia of at least one group of sound tracks are displayable on said display.”
In the Petition, HTC identifies an LCD display disclosed in Nathan
’259, which is located in the jukebox’s housing. Pet. 19–20. HTC also
identifies the disclosure of Nathan’s “selection module,” which shows
indicia of a master song list as well as the queue. Pet. Reply 12. Nathan
’259 teaches that the selection module displays a window containing “titles
of selections in alphabetic order by song name,” and a button, which “allows
validation of the selection or selections for initiating their introduction into
the queue.” Ex. 1002 ¶ 74.
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AAD argues, however, that HTC errs in linking the selection module
of Nathan ’259 with the LCD display in the housing. According to AAD,
the Nathan ’259 jukebox is designed to be connected to a television, and the
graphics modules such as the selection module are displayed on the TV. PO
Resp. 17–18. By contrast, AAD argues the LCD screen in the housing is
intended to “allow minimum display in the case in which the user does not
connect a TV screen.” Ex. 1002 ¶ 46. Furthermore, AAD notes that,
according to Nathan ’259, the LCD screen “allows sequential access to a list
in alphabetical order,” (citing Ex. 1002 ¶ 100) but does not disclose that the
LCD screen can display both a master song list and at least one group of
sound tracks, as required by claim 1. PO Resp. 39.
Upon review of the disclosure of Nathan ’259 and the testimony of the
parties’ experts, we find that AAD’s interpretation of the reference on this
point is the correct one. Nathan ’259 states that the object of the invention is
to provide a device that can be connected to a television and used to display
various windows-based selection modules. Ex. 1002 ¶¶ 1, 65, 74, Figs. 9,
10. The LCD screen, by contrast, is characterized as “minimum,” and is
only to be used in the event connection to a TV is unavailable. Id. ¶ 46.
There is no indication in Nathan ’259 that a “minimum display” could
display the graphical, windows-based modules such as the selection graphics
screen. To the contrary, the LCD screen is said to only permit alphabetical
display of a list, and to allow access to that list only sequentially. Id. ¶ 100.
There is insufficient evidence to conclude that the LCD screen permits
display of “indicia of said master song list and indicia of at least one group
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of sound tracks,” as required by claim 1. Furthermore, while the television
screen described in Nathan is capable of such a display, it is not located “at
least partially within the housing.”
For these reasons, we find that HTC has not met its burden of showing
that all elements of claim 1 are disclosed by Nathan ’259, and therefore, we
conclude that HTC has not proven that Nathan ’259 anticipates the claim.
By extension, dependent claims 6, 7, 22, 29, 30, 43, and 45–47, each of
which incorporates the limitations of claim 1, also are not anticipated by
Nathan ’259.
2. Alleged Obviousness of Claims 1, 6, 7, 22, 27, 29, 30, 35, 43, and
45–47 in View of Nathan ’259 and Nathan ’255
The elements of an obviousness analysis under 35 U.S.C. § 103 were
set forth by the Supreme Court as follows: “the scope and content of the
prior art are to be determined; differences between the prior art and the
claims at issue are to be ascertained; and the level of ordinary skill in the
pertinent art resolved.” Graham v. John Deere Co., 383 U.S. 1, 17 (1966).
Furthermore, as a guard against hindsight reasoning, we must “withhold
judgment on an obviousness challenge until [we] consider[] all relevant
evidence, including that relating to the objective considerations” such as
commercial success or long-felt need. In re Cyclobenzaprine Hydrochloride
Extended-Release Capsule Patent Litig., 676 F.3d 1063, 1079 (Fed. Cir.
2012). While we may apply “an expansive and flexible approach” to the
question of obviousness, and take the sequence of the Graham factors in a
different order depending on the particular case, “the factors continue to
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define the inquiry that controls.” KSR Int’l. Co. v. Teleflex Inc., 550 U.S.
398, 407, 415 (2007).
We note at the outset that AAD does not contest that a person of
ordinary skill in the art would have combined the disclosures of Nathan ’259
and Nathan ’255. Tr. 80:16–24. Rather, AAD disputes HTC’s interpretation
of the Nathan references, and whether a person of ordinary skill in the art
would have understood them to disclose all elements of the challenged
claims. PO Resp. 45. Upon review of HTC’s asserted reasons to combine
the Nathan references (Pet. 31), Mr. Schmandt’s testimony on that point (Ex.
1007 ¶ 125), and the lack of challenge from AAD, we find that a person of
ordinary skill would have had reason to combine the Nathan references in
the manner asserted.
a. Independent Claim 1
The disclosure of Nathan ’255 remedies the deficiency of Nathan ’259
discussed above in the context of the anticipation ground; namely, that
Nathan ’259 does not disclose a housing containing a display capable of
displaying “indicia of said master song list and indicia of at least one group
of sound tracks.” As AAD recognizes, Nathan ’255 discloses a touchscreen
display for controlling the jukebox located within its housing. Ex. 1003 ¶
24; PO Resp. 46. The touchscreen is a 14 inch “Intelli Touch” screen that
“allows display of various selection data used by the customers.” Ex. 1003 ¶
24. Mr. Schmandt, HTC’s expert and a founder of the MIT Media Lab with
more than thirty years of experience in the media technology field, testifies
that “[a] person skilled in the art would be motivated to implement the touch
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screen disclosed in Nathan 255 on the LCD screen . . . disclosed in Nathan
259, to allow more intuitive control of the jukebox.” Ex. 1007 ¶¶ 12, 13,
128. We, therefore, conclude that it would have been obvious to include the
touchscreen of Nathan ’255 in the housing of Nathan ’259, to display the
modules of Nathan ’259 such as the selection graphics screen. See Ex. 1002
¶ 74. The display in the housing would be capable of displaying indicia of
said master song list and indicia of at least one group of sound tracks, as
required by claim 1.
Regarding the remaining limitations of claim 1, we find that the
Nathan references disclose a housing (“box,” Ex. 1002 ¶ 46); an audio data
receiver (“telecommunications interface,” id. ¶ 3); an audio output structure
(“stereo audio output,” id. ¶ 42); data storage memory (“RAM,” id. ¶ 51);
and a plurality of manually operable function controllers (“a set of buttons,”
id. ¶ 46). AAD does not contest these elements. Rather, AAD argues that
the references do not disclose organizing a music library into a master song
list and at least one group of sound tracks, as required by claim 1. PO Resp.
46–47. To support this argument, AAD relies on its interpretation of Nathan
as permitting only “single-play” downloads of songs, with immediate
introduction of downloaded songs into a queue that cannot be reorganized.
Id.; see id. at 34–38. As discussed above, we do not find this interpretation
of Nathan ’259’s disclosure to be the correct one.
Given our finding that Nathan ’259 discloses the ability to select
songs to download to local storage, followed by the ability to select songs
for introduction into a queue, we find that the disputed limitation of claim 1
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is taught by the combination of the Nathan references. The songs
downloaded into Nathan’s local memory constitute a “master song list,” and
the selection of songs into a queue is “at least one group of sound tracks.”
This grouping satisfies the broadest reasonable interpretation of organizable,
as discussed above. See supra, Section II.A.
AAD also argues that the Nathan references do not disclose the ability
to use the plurality of manually operable function controllers to select a
group of sound tracks. PO Resp. 40–41, 47. As outlined above, however,
we find that Nathan ’259 discloses buttons that can be used to introduce
songs into its queue. Ex. 1002 ¶¶ 46, 66, 74 (“Button (124) allows
validation of the selection or selections for initiating their introduction into
the queue.”). Alternatively, we find that Nathan ’255 discloses a
touchscreen that may be used to “allow[] display of various selection data
used by the customers.” Ex. 1003 ¶ 24. As argued by HTC, a “user selects
the group of sound tracks just as the captain of a pickup football team selects
the team by selecting individual players to form the team.” Pet. Reply 13;
see Tr. 35:21–36:19.
For these reasons, we find that the combination of Nathan ’259 and
Nathan ’255 teaches each limitation of claim 1.
b. Dependent Claims
AAD also contests the obviousness of dependent claims 6, 7, 22, 29,
30, 35, 43, and 45–47 over the combined Nathan references, but with respect
to claims 22, 35, and 45–47, no argument is made other than AAD’s
contention that not all elements of claim 1 are disclosed. PO Resp. 41, 47–
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48. For the reasons discussed above, the arguments regarding claim 1’s
elements are unpersuasive, and find that the additional elements of these
dependent claims are taught by the Nathan references as set forth in HTC’s
Petition. Pet. 33–36.
AAD does argue that the additional elements of claims 6, 7, 29, 30
and 43 are not disclosed by Nathan ’259, and that this deficiency is not
remedied by combination with Nathan ’255. Id. at 41–45, 47–48. With
respect to claims 6 and 7, AAD’s arguments focus on whether Nathan ’259
satisfies the organizable limitation of claim 1, which we rejected above. We
find that the additional limitations of claim 6 (“at least one sound track . . . is
organizable into at least one group of sound tracks”) and claim 7 (“at least
one manually operable function controller capable of being operated to
facilitate organizing at least one sound track into at least one group of sound
tracks”) are met by Nathan ’259’s disclosure of introducing songs to its
queue. Ex. 1002 ¶ 74.
Claim 29 requires the ability “to sort at least one of the sound tracks
and the groups of sound tracks stored in said data storage memory according
to indicia of said sound tracks and groups of sound tracks.” HTC argues that
this is disclosed by Nathan ’259’s selection graphics screen, which displays
songs stored locally and permits introduction into the queue. Pet. 25; Pet.
Reply 13–14. We find that Nathan ’259 discloses that this screen contains
“Window (121)” which “allows display of titles of selections in alphabetic
order by song name.” Ex. 1002 ¶ 74. This meets claim 29’s requirement of
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the capability to sort “at least one of the sound tracks . . . stored in said data
storage memory according to indicia of said sound tracks.”
Claim 30 requires the ability to “audition at least one sound track in
said data storage memory.” In its Response, AAD argues that the term
audition requires the ability to “accept, edit, or delete the song” after
listening to all or part of it. PO Resp. 43–44. This interpretation, however,
was contradicted by AAD’s counsel at oral argument:
JUDGE CRUMBLEY: . . . Claim 30 recites auditioning at least
one sound track, and you point out that . . . the specification at
least says, okay, you aud -- truly audition a recording, and it
uses that in reference to listening to a sound track before the
sound track is recorded onto a compact disk.
MR. FOLEY: Yes.
JUDGE CRUMBLEY: And so does that mean that “audition”
requires recording to a compact disk?
MR. FOLEY: No. I wouldn't interpret it that way at all. The
device even says it could be used as a jukebox. . . .
JUDGE CRUMBLEY: Well, I guess my question is
that -- does “audition” just merely mean playback? Does it
mean --
MR. FOLEY: Yeah. I would argue that “audition” means, you
know, you can play it.
Tr. 79:13–80:7.
HTC also notes that, in related District Court litigation, AAD argued
that “audition” means “to review or listen to.” Pet. Reply 14 (citing Ex.
1011, 14; Ex, 1012, 7). We do not consider audition in claim 30 to mean
anything more than the ability to listen to all or a portion of a sound track.
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As such, Nathan ’259 discloses this capability. Ex. 1002 ¶ 100 (“A ‘play’
button (1028) starts playback.”).
Finally, claim 43 requires an amplifier to be located in the housing.
HTC directs our attention to Nathan ’259’s disclosure of a button (15) that
allows the volume of connected headphones to be adjusted. Pet. 26 (citing
Ex. 1002 ¶ 46). AAD’s expert, Mr. McAlexander, testifies that while the
use of an amplifier in such a situation is not “necessarily required,” “the
volume of an audio output to headphones can typically be adjusted by means
of an amplifier.” Ex. 2003 ¶ 61. Mr. Schmandt points out that Nathan ’255
also discloses that its jukebox has “integrated amplified loudspeakers,”
necessarily requiring inclusion of an amplifier. Ex. 1007 ¶ 144. Based on
this testimony, and our review of the references, we find that inclusion of an
amplifier in the housing is taught or suggested by the combined disclosures
of the Nathan references.
We, therefore, conclude that HTC has met its burden of showing that
each element of challenged dependent claims 6, 7, 22, 27, 29, 30, 35, 43, and
45–47 is disclosed by the combination of Nathan ’259 and Nathan ’255. As
discussed above, we also find that a person of ordinary skill in the art would
have had reason to combine the Nathan references.
c. Objective Indicia of Nonobviousness
Factual inquiries for an obviousness determination include secondary
considerations based on evaluation and crediting of objective evidence of
nonobviousness. See Graham, 383 U.S. at 17. Notwithstanding what the
teachings of the prior art would have suggested to one of ordinary skill in the
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art at the time of the invention, the totality of the evidence submitted,
including objective evidence of nonobviousness, may lead to a conclusion
that the challenged claims would not have been obvious to one of ordinary
skill in the art. In re Piasecki, 745 F.2d 1468, 1471–72 (Fed. Cir. 1984).
Secondary considerations may include any of the following: long-felt but
unsolved needs, failure of others, unexpected results, commercial success,
copying, licensing, and praise. See Graham, 383 U.S. at 17; Leapfrog
Enters., Inc. v. Fisher-Price, Inc., 485 F.3d 1157, 1162 (Fed. Cir. 2007).
To be relevant, evidence of nonobviousness must be commensurate in
scope with the claimed invention. In re Kao, 639 F.3d 1057, 1068 (Fed. Cir.
2011) (citing In re Tiffin, 448 F.2d 791, 792 (CCPA 1971)); In re Hiniker
Co., 150 F.3d 1362, 1369 (Fed. Cir. 1998). In that regard, in order to be
accorded substantial weight, there must be a nexus between the merits of the
claimed invention and the evidence of secondary considerations. In re
GPAC Inc., 57 F.3d 1573, 1580 (Fed. Cir. 1995). “Nexus” is a legally and
factually sufficient connection between the objective evidence and the
claimed invention, such that the objective evidence should be considered in
determining nonobviousness. Demaco Corp. v. F. Von Langsdorff Licensing
Ltd., 851 F.2d 1387, 1392 (Fed. Cir. 1988). The burden of showing that
there is a nexus lies with the patent owner. Id.; see Paulsen, 30 F.3d at
1482.
AAD argues that the “clear commercial success” of the invention
claimed in the ’403 patent demonstrates its nonobviousness, notwithstanding
the disclosures of the Nathan references. PO Resp 57–58. To demonstrate
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this alleged commercial success, AAD submits the testimony of Peter
Keller, supported by a number of confidential licenses which are said to
have generated more than $10,000,000 of gross revenue. Id. at 58. Mr.
Keller describes the “AAD Family of Patents,” which includes the ’403
patent, other related United States Patents, and foreign counterparts. Ex.
2004 ¶¶ 5, 8. Mr. Keller testifies that, for each licensee, he ensured that “at
least one commercial product sold” was covered by “at least one claim of at
least one patent” of the family. Id. ¶ 11.
In cases in which the proffered evidence of commercial success is
licenses, rather than sales of products embodying the invention, there is a
danger that the licenses may have been taken only because they were
cheaper than defending an infringement suit. See EWP Corp. v. Reliance
Universal Inc., 755 F.2d 898, 908 (Fed. Cir. 1985). In such situations, nexus
between the commercial success and the patent cannot be inferred; rather,
“affirmative evidence of nexus” is required. Iron Grip Barbell Co. v. USA
Sports, Inc., 392 F.3d 1317, 1324 (Fed. Cir. 2004). In other words, a patent
owner must demonstrate “a nexus between the merits of the invention and
the licenses of record”; otherwise, the licenses are to be accorded little
weight. In re GPAC Inc., 57 F.3d at 1580 (emphasis added).
HTC notes that each of the licenses listed by Mr. Keller includes at
least two patents that explicitly claim a compact disc recorder, an element
not present in the claims of the ’403 patent. Pet. Reply 24. HTC also
contends that AAD fails to demonstrate any link between the invention of
the ’403 patent and the taking of the license; for example, AAD provides no
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apportionment of revenues to show the amount attributable to the ’403
patent, as opposed to the other members of the licensed family. Id.
We agree with HTC that the evidence provided by AAD does not
establish a sufficient link between the merits of the invention claimed in the
’403 patent and the taking of the licenses. Although Mr. Keller notes that
some of the provided licenses were taken in situations where there was no
pending litigation against the licensee (Ex. 2004 ¶ 9), he does not address
whether litigation had been threatened against those parties. We, therefore,
cannot determine whether the licenses reflect the commercial value of the
invention claimed in the ’403 patent, or whether they were taken merely to
avoid the cost of litigation, either pending or threatened. Absent a
persuasive showing of nexus, AAD’s evidence of licensing fails to establish
commercial success.
We conclude that the evidence of objective indicia of nonobviousness
is insufficient to overcome the evidence of obviousness over the combined
Nathan references.
d. Conclusion on Obviousness
For the foregoing reasons, HTC has proven by a preponderance of the
evidence that Nathan ’255 and Nathan ’259 teach all elements of challenged
claims 1, 6, 7, 22, 27, 29, 30, 35, 43, and 45–47, and that a person of
ordinary skill in the art would have had reason to combine the disclosures.
Furthermore, we conclude that such a combination would have been within
the level of ordinary skill in the art, as evidenced by the prior art of record.
We, therefore, conclude that claims 1, 6, 7, 22, 27, 29, 30, 35, 43, and 45–47
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would have been obvious at the time of the invention, and thus are
unpatentable under 35 U.S.C. § 103.
3. Alleged Obviousness of Claims 1, 3, 6, 7, 11, 12, 16, 22, 24, 30, 35–
37, 43, and 45–47 in View of Sound Blaster, Lucente, and Ozawa
We instituted trial to determine whether claims 1, 3, 6, 7, 11, 12, 16,
22, 24, 30, 35–37, 43, and 45–47 would have been obvious over the
combined disclosures of Sound Blaster, Lucente, and Ozawa, finding
persuasive HTC’s unchallenged analysis in its Petition of how the elements
of the challenged claims are taught by the references. Dec. 16–17, 21. In so
doing, we noted that AAD did not dispute the alleged disclosures of the
references, but instead disputed that Sound Blaster qualified as prior art to
the ’403 patent, and argued that a person of ordinary skill in the art would
have not combined the references. Id. at 17. In its Response, AAD again
does not address the disclosures of the references, and instead argues that the
references are not combinable because the combined teachings would
produce an inoperable device. PO Resp. 48–57. According to AAD, to
combine Sound Blaster with the teachings of Lucent would require a
substantial reconstruction and redesign of the elements in Lucent. Id. at 46–
47. Thus, AAD concludes that the combination of Sound Blaster and Lucent
and any other prior art would not have rendered the challenged claims
obvious. Id. at 49. In addition, AAD moved to exclude Exhibit 1004
(Miller Declaration, Miller CV, and the Sound Blaster reference). Mot.
Exclude 1.
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Sound Blaster discloses audio software with a graphical user interface
designed for organizing and playing back audio files. Ex. 1004, 2-1.10
Sound Blaster also discloses the ability to group sound tracks into playlists.
Id. at 2-20–2-28, Fig. 2-8.
Lucente discloses a “pen-based computer with an integral flat panel
display and digitized screen.” Ex. 1005 1:3–4. The housing of Lucente
includes an audio input and output, processor, and memory. Id. at 12:2–13;
7:39–49. According to HTC, the hardware of Lucente is capable of running
the Sound Blaster software. Pet. 38.
Ozawa discloses a portable audio device that can download music
from a network service center and save audio files to a hard drive in the
device. Ex. 1006, 4:48–53. The Ozawa device has push-button controls on
its face for controlling the operation of the device, such as playing and
pausing music. Id. at 5:30–33.
At oral hearing, AAD’s counsel did not concede that Sound Blaster,
Lucente, and Ozawa disclose all elements of the claims if combined, but
acknowledged that AAD’s briefs had provided no argument on that point.
Tr. 90–91. Specifically, AAD did not provide any evidence or testimony
contrary to the evidence and testimony provided by Petitioner regarding the
disclosures of Sound Blaster, Lucente, and Ozawa. Our Scheduling Order in
this case cautioned AAD that “any arguments for patentability not raised in

10 HTC did not add page numbers to the Sound Blaster reference, as required
by our Rules. See 37 C.F.R. § 42.63(d)(2)(i). We refer to the page numbers
of the original Sound Blaster manual when citing the reference.
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the [Patent Owner Response] will be deemed waived.” Paper 7, 3. The
Board’s Trial Practice Guide, furthermore, states that the Patent Owner
Response “should identify all the involved claims that are believed to be
patentable and state the basis for that belief.” Office Patent Trial Practice
Guide, 77 Fed. Reg. 48,756, 48,766 (Aug. 14, 2012) (emphasis added). As
the Board has stated, our governing statute and Rules “clearly place some
onus on the patent owner, once trial is instituted, to address the material facts
raised by the petition as jeopardizing patentability of the challenged claims.”
Johnson Health Tech Co. v. Icon Health & Fitness, Inc., Case IPR2013-
00463, slip op. at 12 (PTAB Jan. 29, 2015) (Paper 41). By addressing only
the combination of the references, AAD conveyed to the Board and HTC
that the only bases for its belief that the challenged claims are patentable
were (i) whether Sound Blaster and Lucente were combinable and (ii)
whether Sound Blaster is admissible.
In our Decision to Institute, we concluded that HTC had made a
threshold showing that Sound Blaster, Lucente, and Ozawa taught all the
limitations of the challenged claims, sufficient for us to conclude that there
was a reasonable likelihood that HTC would prevail in showing that the
challenged claims were obvious over the combined references. Dec. 21–22.
We must now determine whether the preponderance of the evidence of
record supports a finding of obviousness. 35 U.S.C. § 316(e). Given
AAD’s waiver of argument that the combination of references does not teach
all elements of the challenged claims, the record now contains the same
arguments and evidence on that point as it did at the time of our Decision to
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Institute. After careful consideration of the entire record, including the
Petition, Patent Owner’s Response, and all evidence submitted by the
parties, we find that the preponderance of the evidence of record supports a
finding that HTC has set forth how all limitations of the challenged claims
are taught by Sound Blaster, Lucente, and Ozawa. Pet. 42–58; Ex. 1007
¶¶ 172–214 (Schmandt declaration including claim charts). We, therefore,
turn to the two remaining issues on this ground of unpatentablility: AAD’s
Motion to Exclude Sound Blaster, and whether a person of ordinary skill
would have had reason to combine Sound Blaster, Lucente, and Ozawa.
a. Motion to Exclude Exhibit 1004
Exhibit 1004 contains two related documents: (1) the Declaration of
Kyle A. Miller, attesting to the public availability of the Sound Blaster
reference; and (2) the Sound Blaster reference itself. Mr. Miller testifies that
Sound Blaster is a copy of a Sound Blaster 16 User Reference Manual he
received during the course of his employment at Creative Labs, “no later
than the early spring of 1995.” Ex. 1004 ¶ 19. According to Mr. Miller, his
employer provided him with commercial versions of Creative Labs’ most
popular products, including the Sound Blaster 16 Audio Card. Id. ¶ 12. Mr.
Miller testifies that the product he received included the User’s Manual, and
would have been the same documentation provided to a commercial
purchaser of the product. Id. ¶ 14.
AAD moves to exclude Exhibit 1004 on several grounds. Mot.
Exclude 1. Pursuant to our Rules, a motion to exclude evidence must be
filed to preserve any previously-made objections to evidence. 37 C.F.R.
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§ 42.64(c). The motion must identify where in the record the objections
were made, and must explain the objections. Id.
We note that AAD does not identify where in the record its objections
to evidence were made prior to their being the basis of the Motion to
Exclude, in violation of Rule 42.64(c). Indeed, the Board is aware of AAD’s
prior objections only because they were quoted in HTC’s opposition to the
Motion to Exclude. For this reason, AAD’s Motion is procedurally
deficient, and may be denied on this basis alone.
Even if we were to overlook the procedural deficiency of the motion
itself, we would not exclude Exhibit 1004. First, AAD argues that the Miller
Declaration is hearsay. Mot. Exclude 3–5. It does not appear that AAD
previously made this objection, as required by our Rules. According to
HTC, the only hearsay-based objection made by AAD was that Exhibit B
(the Sound Blaster reference itself) did not satisfy the business records
exception to the hearsay rule. Exclude Opp. 2. Furthermore, even if AAD
had preserved such an objection, we do not consider the Miller Declaration
to be hearsay, as it is not an out-of-court statement. In an inter partes
review, direct testimony is typically provided via affidavit, with cross-
examination taken via deposition. 37 C.F.R. § 42.53(a). In this respect,
testimony via affidavit before the Board is distinguishable from the
affidavits submitted in District Court cases cited by AAD, such as
Hilgraeve, Inc. v. Symantec Corp., 271 F. Supp. 2d 964 (E.D. Mich. 2003).
See Polaris Wireless, Inc. v. TruePosition, Inc., Case IPR2013-00323, slip
op. at 41 (PTAB Nov. 3, 2014) (Paper 62).
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Second, AAD objects to the copyright date on the Sound Blaster
reference as hearsay. Mot. Exclude 5–7. Again, AAD has not established
that it previously made such an objection, other than the general objection to
“Exhibit B” as not being within the business records exception. This is
insufficient to put HTC on notice that AAD was specifically objecting to the
copyright date of the reference as hearsay. See 37 C.F.R. § 42.64(b)(1)
(“The objection must identify the grounds for the objection with sufficient
particularity to allow correction in the form of supplemental evidence.”). In
any event, we consider the exclusion of the copyright date to be moot, as we
do not rely on the copyright date to reach our determination that Sound
Blaster was publicly available. Mr. Miller’s testimony that Sound Blaster
was publicly available rests on his personal recollection, and merely cites the
copyright date as corroboration for that recollection. Ex. 1004, Miller Decl.,
¶ 17.
Third, AAD contends that Sound Blaster is not within the business
records exception to the hearsay rule. Mot. Exclude 8. While it does appear
that AAD previously made this objection, the Motion does not cite to where
in the record the objection was made, as required by our Rule 42.64(c).
Nevertheless, the application of a hearsay exception is irrelevant, as Sound
Blaster is not offered for a hearsay purpose. As a prior art reference, Sound
Blaster is offered to show what information it would have conveyed to a
person of ordinary skill in the art; the truth of the contents of Sound Blaster
is not relevant to this inquiry. See EMC Corp. v. Personal Web Techs., LLC,
Case IPR2013-00085, slip op. at 66 (PTAB May 15, 2014) (Paper 73) (“a
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prior art document submitted as a ‘printed publication’ under 35 U.S.C.
§ 102(b) is offered simply as evidence of what it described, not for proving
the truth of the matters addressed in the document”); see Joy Techs., Inc. v.
Manbeck, 751 F. Supp. 225, 233 n.2 (D.D.C. 1990), aff’d, 959 F.2d 226
(Fed. Cir. 1992)).
Finally, AAD seeks to exclude Sound Blaster as not authenticated, as
there is no evidence to authenticate the reference “except the inadmissible
Miller Declaration.” Mot. Exclude 8. We have not found the Miller
Declaration to be inadmissible, however. To authenticate an item of
evidence, a party must “produce evidence sufficient to support a finding that
the item is what the proponent claims it is.” Fed. R. Evid. 901(a). The
Miller Declaration provides sufficient evidence to support the finding that
Sound Blaster is what HTC contends it to be: a document distributed to the
public with the commercially available version of the Sound Blaster 16
Audio Card.
For these reasons, even if AAD’s Motion to Exclude were
procedurally proper, we would not exclude Exhibit 1004, including the
Sound Blaster reference, from the record.
b. Combinability of References
HTC contends that a person of ordinary skill in the art would have had
reason to combine Sound Blaster, Lucente, and Ozawa. Pet. 40. First, the
references are said to pertain to personal computing devices with similar
hardware, for similar purposes of reproducing audio. Id. In addition, HTC
argues the devices of Lucente and Ozawa are directed to portable devices,
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and HTC asserts that a person of ordinary skill in the art would have
combined the software of Sound Blaster with these devices to “improv[e]
multimedia user experience.” Id. at 41.
To the contrary, AAD argues that combining Sound Blaster with
Lucente would have been outside the level of ordinary skill at the time of the
invention. PO Resp. 48–49. AAD first focuses on hardware
incompatibilities between the tablet computer of Lucente and the software of
Sound Blaster. Id. Citing the McAlexander Declaration, AAD argues that
“[t]he amount of skill required to make the Lucente device compatible with
the Sound Blaster software would substantially exceed the level of ordinary
skill.” Id. (citing Ex. 2003 ¶¶ 23–28). Mr. McAlexander testifies that
modification of the Lucente computer to run Sound Blaster would include
such drastic steps as “redesign of the battery and thermal management
within the housing to provide the designed battery operating time while
preventing overheating of the internal circuits” (Ex. 2003 ¶ 25) and redesign
of the “entire interface structure of the Sound Blaster 16 audio card . . . from
an ISA configuration to a different bus standard, including firmware re-write
to conform to the different bus protocol” (id. ¶ 27).
Mr. McAlexander also testifies that the Sound Blaster software
required a Windows 3.1 operating system, which allegedly was incompatible
with the “pen-based computer” disclosed in Lucente. Id. ¶ 28. For example,
Mr. McAlexander points out Lucente’s recitation of the ability to rotate the
display to permit either right-handed or left-handed operation, and states that
such a functionality was not provided in Windows 3.1. Id. ¶ 30.
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In response, HTC argues that AAD focuses too heavily on the
physical combinability of the devices disclosed in the references, as opposed
to whether the teachings of the references would be combined. Pet. Reply
17–18. HTC submits the testimony of Mr. Schmandt, who testifies that a
person of ordinary skill in the art would have recognized that the
functionality of the Sound Blaster software (such as storing and managing
audio files, including making playlists) would provide similar benefits in a
portable touchscreen computer, such as the one described in Lucente. Ex.
1007 ¶ 168. The disclosures of Sound Blaster and Lucente, according to Mr.
Schmandt, would allow a person of ordinary skill in the art to construct a
device as claimed in the ’403 patent. Ex. 1010 ¶ 58. Mr. Schmandt also
addresses Mr. McAlexander’s opinion that a person of ordinary skill in the
art would have been unable to combine the computer of Lucente with the
software of Sound Blaster, and testifies that a person of ordinary skill would
have both the ability and reason to combine the teachings of these
references. Id. ¶¶ 60–71.
In our view, HTC’s proposed analysis better comports with the
“expansive and flexible approach” to obviousness set forth by the Supreme
Court in KSR. “The test for obviousness is not whether the features of a
secondary reference may be bodily incorporated into the structure of the
primary reference.” In re Keller, 642 F.2d 413, 425 (CCPA 1981). Our
inquiry is, therefore, not “whether the references could be physically
combined but whether the claimed inventions are rendered obvious by the
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teachings of the prior art as a whole.” In re Etter, 756 F.2d 852, 859 (Fed.
Cir. 1985) (en banc).
Based on the combination of references proposed by HTC, Mr.
Schmandt testifies that a person of ordinary skill in the art would have
recognized the advantages of Sound Blaster’s functionality, and sought to
incorporate those features into Lucente. Ex. 1007 ¶ 168 (“a person of
ordinary skill in the art would be motivated to combine a system with the
flexibility, portability, and ease of use of Lucente with the audio
management capabilities of Sound Blaster”); id. at ¶ 170 (“it would be
obvious to design a system with physical (e.g. push-button) controls to carry
out the various functions designed by Sound Blaster, particularly in view of
Lucente and Ozawa”) (emphasis added). The record reflects that such a
modification would not have been outside the level of ordinary skill, which
both experts define similarly. Ex. 1007 ¶ 25 (Schmandt: at least a bachelor’s
degree in electrical engineering, computer science, or equivalent, and 1–3
years of experience in designing and programming consumer electronic
devices); Ex. 2003 ¶ 8 (McAlexander: bachelor’s degree in electrical
engineering or computer engineering, and at least two years of experience in
the design of audio systems). This level of skill is also reflected by the prior
art of record. See Okajima v. Bourdeau, 261 F.3d 1350, 1355 (Fed. Cir.
2001). AAD’s focus on whether the Sound Blaster hardware sound card
could be installed on the Lucente device, or whether the Sound Blaster
software could run on Lucente’s operating system, ignores that a person of
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ordinary skill is a “person of ordinary creativity, not an automaton.”
KSR, 550 U.S. at 421.
It would not have been outside the level of ordinary skill in the art, as
defined by both experts, to modify the device of Lucente to have the
functionality described in Sound Blaster—including grouping and ordering
songs—as well as the ability to download songs as described in Ozawa. We,
therefore, find that a person of ordinary skill in the art would have had
reason to combine the disclosures of Sound Blaster, Lucente, and Ozawa,
and would have had a reasonable expectation of success in doing so.
c. Objective Indicia of Nonobviousness
As discussed above, we have considered AAD’s evidence of objective
indicia of nonobviousness, but conclude that the evidence is insufficient to
support a conclusion of nonobviousness.
d. Conclusion on Obviousness
For the foregoing reasons, HTC has proven by a preponderance of the
evidence that Sound Blaster, Lucente, and Ozawa teach all elements of
challenged claims 1, 3, 6, 7, 11, 12, 16, 22, 24, 30, 35–37, 43, and 45–47,
and that a person of ordinary skill in the art would have had reason to
combine the disclosures. Furthermore, we conclude that such a combination
would have been within the level of ordinary skill in the art, as evidenced by
the prior art of record. We, therefore, conclude that claims 1, 3, 6, 7, 11, 12,
16, 22, 24, 30, 35–37, 43, and 45–47 would have been obvious at the time of
the invention, and thus are unpatentable under 35 U.S.C. § 103.
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C. Patentability of Proposed Substitute Claims
In an inter partes review, amended claims are not added to the patent
as of right, but rather must be proposed as a part of a motion to amend.
35 U.S.C. § 316(d). As moving party, the patent owner bears the burden of
proof to establish that it is entitled to the relief requested—namely, addition
of the proposed claims to the patent. 37 C.F.R. § 42.20(c). A patent owner
must meet the requirements of 37 C.F.R. § 42.121, and demonstrate the
patentability of the proposed substitute claims. Idle Free Sys., Inc. v.
Bergstrom, Inc., Case IPR2012-00027 (PTAB June 11, 2013) (Paper 26,
“Idle Free”) (informative); see also Microsoft Corp. v. Proxyconn, Inc., 789
F.3d 1292, 1308 (Fed. Cir. 2015) (“Assuming an amendment is
appropriately responsive to the grounds of unpatentability involved in the
trial, the patentee must still go on to show that it is entitled to its substitute
claim.”)
AAD’s Motion to Amend proposes to substitute new claim 49 for
claim 1, contingent on claim 1 being held unpatentable. Mot. Amend 2. As
we have held claim 1 to be unpatentable, we consider the Motion to Amend.
Proposed claim 49 differs from claim 1 in two respects: (1) the
proposed claim recites that the music library is organizable “after being
stored”; and (2) after the sound tracks are stored and organized, the order of
the sound tracks is customizable. Id. To provide written description support
for these changes, AAD cites to the disclosure of US Patent Application No.
09/641,069 (Ex. 2006), filed August 17, 2000, which issued as the ’403
patent. Id. at 2–5. Therefore, even if we were to grant the Motion to
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Amend, the proposed substitute claims would only be entitled to a priority
date of August 17, 2000. See 37 C.F.R. § 42.121(b) (“A motion to amend
claims must . . . set forth: . . . (2) The support in an earlier-filed disclosure
for each claim for which benefit of the filing date of the earlier filed
disclosure is sought.”)
A motion to amend is also required to set forth a construction for any
new terms introduced via amendment. See Idle Free, slip op. at 7. In
particular, AAD introduces the term customizable to the claims. AAD does
not proffer a construction of “customizable,” instead stating that the
amendment “simply codifies the Board’s claim construction of the term
‘organizable.’” Mot. Amend 6. If, by this “codification,” AAD intended
customizable to be synonymous with organizable, it is unclear how this is
so. As discussed above, the broadest reasonable interpretation of
organizable is “capable of being put into a particular arrangement, by
ordering or grouping.” Proposed claim 49 includes the phrase “the order of
the sound tracks is customizable.” From this usage, customizable appears to
be used to refer to ordering, which is encompassed by, but not coextensive
with, organizable. This construction, however, introduces confusion into the
claim, as it is not clear what is meant by “after the sound tracks are stored
and organized, the order of the sound tracks in said group of sound tracks is
customizable” if customizable is synonymous with, or encompassed by,
organizable.
AAD’s failure to set forth a clear claim construction for customizable
could, on its own, be fatal to the Motion to Amend. Nevertheless, we will
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construe customizable as referring to ordering, and the amendment as
referring to the ability to reorder sound tracks in a group (customize) after a
first grouping or ordering operation (organize). Even adopting this
construction, however, we would not grant the Motion to Amend, as AAD
has not demonstrated patentability of claim 49 or any of the proposed
dependent claims.
In a motion to amend, a patent owner has the burden “to show
patentable distinction over the prior art of record and also prior art known to
the patent owner.” Idle Free, slip op. at 7. We have held that “prior art of
record” refers to material art in the prosecution history of the patent, material
art of record in the current proceeding before the Board, and material art of
record in any other proceeding before the Office involving the patent. See
MasterImage 3D, Inc. v. RealD Inc., Case IPR2015-00040, slip op. at 2
(PTAB July 15, 2015) (Paper 42, “MasterImage 3D”). To that end, in its
Motion, AAD discusses two references, Alexander and Timis, which were
allegedly the “most pertinent references” cited during prosecution of the
’403 patent. Mot. Amend 8. AAD also discusses the Nathan references,
which are of record in the current proceeding. Id. at 8–10.
AAD does not discuss, however, the patentability of claim 49 or the
dependent claims over the Sound Blaster, Lucente, and Ozawa references of
record in the current proceeding, other than to challenge the combinability of
the references. Id. at 10. As discussed above, we are not persuaded by
AAD’s arguments on this point, and conclude that a person of ordinary skill
in the art would have combined the disclosures of the references.
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Furthermore, as HTC correctly notes in its Opposition, the Sound
Blaster reference discloses that a user may rearrange the songs in a playlist,
after they are stored locally and grouped into the playlist. Amend Opp. 10
(citing Ex. 1004, 2–25; Ex. 1023 ¶¶ 12–14). By failing to address
sufficiently this disclosure in its Motion, AAD has failed to demonstrate
patentability of claim 49, or any of the proposed dependent claims, over the
prior art of record.
Additionally, AAD’s Motion lacks sufficient discussion of the prior
art known to AAD, beyond that already of record. The Board has stated that
this requires “no more than the material prior art that Patent Owner makes of
record in the current proceeding pursuant to its duty of candor and good faith
to the Office under 37 C.F.R. § 42.11.” MasterImage 3D, slip op. at 3. In
considering this duty of candor and good faith, patent owners should
emphasize the limitations added to the proposed claim. Id. AAD’s Motion
fails to make any such prior art of record, even though it acknowledges that
other patents in the same family as the ’403 patent “had hundreds of items of
prior art cited against it.” Mot. Amend 9. AAD merely makes the statement
that “[a]s far as Patent Owner knows, none of the features now being
claimed were previously known or disclosed in any of the prior art of record,
or in any other prior art known to Patent Owner.” Id. at 9–10.
AAD argues that “[t]here are almost 200 references made of record in
the AAD patent family. AAD cannot be expected to discuss them all in its
Motion.” Amend Reply 4. Even if the large number of prior art references
cited in related applications may excuse AAD’s failure to discuss one or two
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material references, however, it does not excuse AAD from, at the very
least, making a good faith attempt to determine whether any prior art known
to it discloses the additional limitations introduced in the proposed amended
claim. As discussed above, the earliest priority date supported by the
Motion to Amend is August 17, 2000. AAD makes no effort, however, to
discuss the state of the art as of that date, or provide any prior art references
beyond those already of record that might be material to the added
limitations. A generalized statement that “none of the features now being
claimed were previously known or disclosed in any of the prior art of record,
or in any other prior art known to Patent Owner” (Mot. Amend 9–10) is not
sufficient, on this record, to carry AAD’s burden. See Idle Free, slip op. at 7
(“Some representation should be made about the specific technical
disclosure of the closest prior art known to the patent owner, and not just a
conclusory remark that no prior art known to the patent owner renders
obvious the proposed substitute claims.”).
In addition, HTC cites several references from the prosecution of a
related AAD patent, including the Logan,11 Looney,12 and Yankowski13
patents, and argues that they disclose the added limitations of proposed
claim 49. Amend Opp. 14–15. In reply, AAD asserts only that “[n]one of
[Logan, Looney, or Yankowski] discloses or suggests what is now being

11 Ex. 1018, US 6,199,076 B1 to Logan et al. (filed Oct. 2, 1996).
12 Ex. 1020, US 5,969,283 to Looney et al. (filed June 17, 1998).
13 Ex. 1019, US 5,751,672 to Yankowski (May 12, 1998).
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claimed, as a whole, in substitute claim 1.” Amend Reply 5 (emphasis
added). At best, this assertion only addresses the purported novelty of the
claim over each of the cited references; AAD never addresses the
obviousness of the claimed subject matter, in particular the limitations added
via amendment. Therefore, even if we were to excuse AAD’s failure to
discuss references such as Logan, Looney, and Yankowski in its Motion to
Amend, AAD has not demonstrated that the proposed claims are not obvious
over the art.
We, therefore, conclude that AAD has not met its burden of
demonstrating that it is entitled to the relief requested in its Motion to
Amend. In particular, the Motion fails to set forth a clear claim construction
for customizable; fails to address the patentability of the claims over the
prior art of record; and fails to address the patentability of the claims over
the material prior art known to AAD. The Motion to Amend is denied.
III. CONCLUSION
We conclude that HTC has demonstrated, by a preponderance of the
evidence, that claims 1, 3, 6, 7, 11, 12, 16, 22, 24, 27, 29, 30, 35–37, 43, and
45–47 of the ’403 patent are unpatentable under 35 U.S.C. § 103, as having
been obvious over the following combinations of prior art references:
Claims 1, 6, 7, 22, 27, 29, 30, 35, 43, and 45–47: Nathan ’259 and
Nathan ’255; and
Claims 1, 3, 6, 7, 11, 12, 16, 22, 24, 30, 35–37, 43, and 45–47: Sound
Blaster, Lucente, and Ozawa.
In addition, we conclude that AAD has not demonstrated, by a
preponderance of the evidence, that proposed substitute claims 49–65 are
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patentable over the prior art, and that it is entitled to entry of the proposed
substitute claims. We, therefore, deny AAD’s Motion to Amend.
IV. ORDER
Accordingly, it is
ORDERED that claims 1, 3, 6, 7, 11, 12, 16, 22, 24, 27, 29, 30, 35–
37, 43, and 45–47 of U.S. Patent No. 6,587,403 B2 are unpatentable;
FURTHER ORDERED that Patent Owner’s Motion to Exclude is
denied;
FURTHER ORDERED that Patent Owner’s Motion to Amend is
denied as to proposed substitute claims 49–65;
FURTHER ORDERED that, pursuant to 35 U.S.C. § 318(b), upon
expiration of the time for appeal of this decision, or the termination of any
such appeal, a certificate shall issue canceling claims 1, 3, 6, 7, 11, 12, 16,
22, 24, 27, 29, 30, 35–37, 43, and 45–47 in U.S. Patent No. 6,587,403 B2;
and
FURTHER ORDERED that, because this is a final decision, parties to
the proceeding seeking judicial review of the decision must comply with the
notice and service requirements of 37 C.F.R. § 90.2.
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For Petitioner:

Bing Ai
Hwa C. Lee
Thomas N. Millikan
Matthew C. Bernstein
Evan S. Day
PERKINS COIE LLP
Ai-ptab@perkinscoie.com
HLee@perkinscoie.com
TMillikan@perkinscoie.com
MBernstein@perkinscoie.com
EDay@perkinscoie.com

For Patent Owner:

James R. Foley
Timothy M. McCarthy
CLARK HILL PLC
jfoley@clarkhill.com
tmccarthy@clarkhill.com