Velos Media, LLC

Patent Trials and Appeals Board

Aug 18, 2020

IPR2019-00757 (P.T.A.B. Aug. 18, 2020)

Trials@uspto.gov Paper 41
571-272-7822 Date: August 18, 2020

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

UNIFIED PATENTS INC.,
Petitioner,

v.

VELOS MEDIA, LLC,
Patent Owner.
____________

IPR2019-00757
Patent 9,930,365 B2
____________

Before MONICA S. ULLAGADDI, JASON W. MELVIN, and
AARON W. MOORE, Administrative Patent Judges.

ULLAGADDI, Administrative Patent Judge.

JUDGMENT
Final Written Decision
Determining None of the Challenged Claims to be Unpatentable
35 U.S.C. § 318(a)
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I. INTRODUCTION
Unified Patents Inc.1 (“Petitioner”) requested an inter partes review of
claims 1–20 (the “challenged claims”) of U.S. Patent No. 9,930,365 B2 (Ex.
1001, “the ’365 patent”). Paper 2 (“Petition” or “Pet.”). Velos Media, LLC
(“Patent Owner”) filed a Preliminary Response. Paper 6 (“Prelim. Resp.”).
On September 11, 2019, we entered a Decision on Institution
(“Institution Decision” or “Inst. Dec.,” Paper 7) instituting an inter partes
review as to all of the challenged claims on all of the grounds set forth in the
Petition.
After institution of trial, Patent Owner filed a Patent Owner Response
(“PO Resp.,” Paper 18), to which Petitioner filed a Reply (“Pet. Reply,”
Paper 26).2 Patent Owner filed a Sur-reply (“Sur-Reply,” Paper 31).3 A
hearing was held on June 16, 2020. The transcript of the hearing has been
entered into the record. Paper 39 (“Transcript” or “Tr.”).
We have jurisdiction under 35 U.S.C. § 6. This final written decision
is issued pursuant to 35 U.S.C. § 318(a). As explained below, we determine
Petitioner has not shown by a preponderance of the evidence that claims 1–
20 of the ’365 patent are unpatentable.
II. BACKGROUND
A. Related Proceedings
Petitioner and Patent Owner indicate that the ’365 patent is not
asserted in any related district court proceedings. In particular, Petitioner

1 Petitioner has informed the Board that it has changed its name to Unified
Patents, LLC. Paper 20.
2 Ex. 1024 is the redacted version of the Patent Owner’s Response. Ex. 1023
is the redacted version of the Petitioner’s Reply.
3 Ex. 1038 is the redacted version of Patent Owner’s Sur-reply.
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states that it “is unaware of any law suits in which the ’365 Patent is asserted
or challenged” (Pet. 64), and Patent Owner states that, at the time of the
Preliminary Response, it “has not filed a patent infringement lawsuit”
(Prelim. Resp. 1).
Although Patent Owner states that “Petitioner has now filed thirteen
IPRs against Velos patents,” specifically, IPR2019-00194, IPR2019-00635,
IPR2019-00660, IPR2019-00670, IPR2019-00707, IPR2019-00710,
IPR2019-00720, IPR2019-00749, IPR2019-00757, IPR2019-00763,
IPR2019-00806, IPR2019-00883, and IPR2019-01130, other than the instant
proceeding (IPR2019-00757), none of these proceedings appear to concern
either the ’365 patent or a patent related to the ’365 patent. Id. at 1–2 n.1.
B. The ’365 Patent (Ex. 1001)
The ’365 patent issued on March 27, 2018, based on application No.
15/696,263, which claims priority to, among other applications, provisional
application Nos. 61/102,787 filed October 3, 2008, 61/144,357 filed January
13, 2009, and 61/166,631 filed April 3, 2009. Ex. 1001, codes (21), (45),
(60). The ’365 patent concerns techniques for encoding and decoding digital
video data using macroblocks. Id. at code (57). Figure 12 of the ’365 patent
is reproduced below.
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Figure 12 of the ’365 patent illustrates a 64×64 pixel
macroblock that has been partitioned into sub-partitions of
varying sizes, each of which has an encoding mode. Id. at
6:22–24
“[V]ideo encoder 20 may receive a set of various-sized blocks for a
coded unit,” which “may comprise a video frame, a slice, or a group of
pictures (also referred to as a ‘sequence’),” and includes a macroblock or a
partition of a macroblock. Id. at 12:19–21, 38:45–47, 52–54. As shown in
Figure 12, a large, 64×64 pixel macroblock has different sub-block partitions
within the same large macroblock; these sub-blocks have different coding
modes for each partition. Id. at 33:35–37, 33:47–49. The differently coded
sub-blocks include, for example, a 32×32, B-coded partition and an 8×8, I-
coded partition. Id. at 34:26–31. The encoder “generate[s] block-type
syntax information that . . . identifies the partitions and the encoding modes
used to encode the partitions.” Id. at 13:56–58. The syntax information
further “includes values corresponding to the largest block in the coded unit
and the smallest block in the coded unit.” Id. at 39:21–24.
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A video decoder receives the “coded unit and the syntax information
for the coded unit from the video encoder.” Id. at 39:27–28. The video
decoder “determine[s] when a block does not have further separately
encoded sub-partitions based on the indication in the coded unit syntax
information of the smallest encoded partition.” Id. at 39:37–41. For
example, when “the largest block is 64×64 pixels and the smallest block is
also 64×64 pixels, then it can be determined that the 64×64 blocks are not
divided into sub-partitions smaller than the 64×64 size.” Id. at 39:41–44.
Alternatively, when “the largest block is 64×64 pixels and the smallest block
is 32×32 pixels, then it can be determined that the 64×64 blocks are divided
into sub-partitions no smaller than 32×32.” Id. at 39:44–48.
Using syntax information that identifies the encoding mode, the
decoder “decode[s] the video block based on the block-type syntax
information” that identifies the encoding mode. Id. at 14:19–21.
C. Challenged Claims
Challenged claims 1, 7, and 15 are independent. Challenged claims
2–6, 8–14, and 16–20 depend from claims 1, 7, and 15. Independent claim 1
is illustrative and is reproduced below.
1. A method of decoding video data, the method comprising:
decoding a first syntax element associated with a sequence of
pictures of the video data, the first syntax element representing a
minimum size of blocks of the sequence of pictures;
decoding a second syntax element, separate from the first syntax
element, associated with the sequence of pictures, the second
syntax element representing a maximum size of the blocks of the
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sequence of pictures, wherein the maximum size is greater than
16×16 pixels;
determining that a current block of a plurality of blocks of the
sequence of pictures has a starting size equal to the maximum
size using the second syntax element;
partitioning the current block to obtain a plurality of sub-blocks
for the current block, wherein partitioning comprises
determining that a sub-block of the sub-blocks of the current
block does not include further separately encoded sub-partitions
when the size of the sub-block is equal to the minimum size
indicated by the first syntax element;
decoding a third syntax element, separate from the first syntax
element and the second syntax element, the third syntax element
representing an encoding mode used to encode the sub-block,
wherein the encoding mode comprises one of an intra-prediction
mode and an inter-prediction mode; and
decoding the sub-block according to the encoding mode, without
further partitioning the sub-block, based on the determination
that the block does not include further separately encoded
subpartitions.
Ex. 1001, 40:28–59.
D. Proposed Grounds of Unpatentability
Petitioner supports the following challenges with the Declaration of
Dr. Immanuel Freedman (Ex. 1009).
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Reference(s) Basis4 Claims Challenged
U.S. Patent No. 5,999,6555 to Kalker et al.
(“Kalker,” Ex. 1006) and U.S. Publication
No. 2005/0123282 A16 to Novotny et al.
(“Novotny,” Ex. 1007)
§ 103 1–4, 6–10, 12–18,
20
Kalker, Novotny, and U.S. Patent No.
6,084,9087 to Chiang et al. (“Chiang,” Ex.
1008)
§ 103 5, 11, 19

III. ANALYSIS
A. Principles of Law
A claim is unpatentable under 35 U.S.C. § 103(a) if the differences
between the subject matter sought to be patented and the prior art are such
that the subject matter as a whole would have been obvious at the time the
invention was made to a person having ordinary skill in the art to which said
subject matter pertains. KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 406
(2007). The question of obviousness is resolved on the basis of underlying
factual determinations, including: (1) the scope and content of the prior art;

4 The relevant sections of the Leahy-Smith America Invents Act (“AIA”),
Pub. L. No. 112–29, 125 Stat. 284 (Sept. 16, 2011), took effect on March 16,
2013. Because the effective filing date of the ’365 is before that date, our
citations to Title 35 are to its pre-AIA version. See Ex. 1001, codes (22),
(60), (63).
5 Kalker issued on December 7, 1999. Ex. 1006, code (45). Kalker’s issue
date predates the earliest possible priority date of the ’365 patent. See Ex.
1001, codes (60), (63).
6 Novotny published on June 9, 2005. Ex. 1007, code (45). Novotny’s
publication date predates the earliest possible priority date of the ’365
patent. See Ex. 1001, codes (60), (63).
7 Chiang issued on July 4, 2000. Ex. 1008, code (45). Chiang’s issue date
predates the earliest possible priority date of the ’365 patent. See Ex. 1001,
codes (60), (63).
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(2) any differences between the claimed subject matter and the prior art;
(3) the level of skill in the art; and (4) objective evidence of nonobviousness,
i.e., secondary considerations. See Graham v. John Deere Co., 383 U.S. 1,
17–18 (1966).
“In an [inter partes review], the petitioner has the burden from the
onset to show with particularity why the patent it challenges is
unpatentable.” Harmonic Inc. v. Avid Tech., Inc., 815 F.3d 1356, 1363 (Fed.
Cir. 2016) (citing 35 U.S.C. § 312(a)(3) (requiring inter partes review
petitions to identify “with particularity . . . the evidence that supports the
grounds for the challenge to each claim”)). The burden of persuasion never
shifts to Patent Owner. See Dynamic Drinkware, LLC v. Nat’l Graphics,
Inc., 800 F.3d 1375, 1378 (Fed. Cir. 2015) (citing Tech. Licensing Corp.
Videotek, Inc., 545 F.3d 1316, 1326–27 (Fed. Cir. 2008)) (discussing the
burden of proof in an inter partes review). Furthermore, Petitioner cannot
satisfy its burden of proving obviousness by employing “mere conclusory
statements.” In re Magnum Oil Tools Int’l, Ltd., 829 F.3d 1364, 1380 (Fed.
Cir. 2016).
Thus, to prevail in an inter partes review, Petitioner must explain how
the proposed combinations of prior art would have rendered the challenged
claims unpatentable. We analyze the challenges presented in the Petition in
accordance with the above-stated principles.
B. Level of Ordinary Skill in the Art
We review the grounds of unpatentability in view of the
understanding of a person of ordinary skill in the art at the time of the
invention. Graham, 383 U.S. at 17. Petitioner contends that the ordinarily
skilled artisan would have had at least
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[A] person having, as of October 3, 2008: (1) at least an
undergraduate degree in electrical engineering or closely related
scientific field, such as physics, computer engineering, or
computer science, or similar advanced post-graduate education
in this area; and (2) two or more years of experience with video
or image processing systems.
Pet. 12 (citing Ex. 1009 ¶¶ 30–32). Patent Owner does not propose a
definition for the level of ordinary skill in the art. See generally PO.
Resp.
We determine that the level of ordinary skill proposed by Petitioner is
consistent with the ’365 patent and the asserted prior art and we adopt that
definition. We note, however, the conclusions and findings rendered in this
decision do not turn on selecting the particular level of ordinary skill in the
art that Petitioner proposes.
C. Claim Construction
We apply the same claim construction standard used by Article III
federal courts and the ITC, both of which follow Phillips v. AWH Corp., 415
F.3d 1303 (Fed. Cir. 2005) (en banc), and its progeny. See Changes to the
Claim Construction Standard for Interpreting Claims in Trial Proceedings
Before the Patent Trial and Appeal Board, 83 Fed. Reg. 51340, 51,340,
51,358 (Oct. 11, 2018) (amending 37 C.F.R. § 42.100(b) effective
November 13, 2018) (now codified at 37 C.F.R. § 42.100(b) (2019)).
Accordingly, we construe each challenged claim of the ’365 patent to
generally have the ordinary and customary meaning of such claim as
understood by one of ordinary skill in the art and the prosecution history
pertaining to the patent.
Petitioner does not propose particular constructions for any claim
terms. Pet. 13–14 (“At this time, Petitioner proposes that the claims be
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construed pursuant to their plain and ordinary meaning in light of the
specification of the ’365 Patent.”). In its Preliminary Response, Patent
Owner proposed constructions for four claim limitations, “a first syntax
element,” “a second syntax element,” “a third syntax element,” and “a
second syntax element, separate from the first syntax element.” We
preliminarily construed these terms in our Institution Decision. Dec. 8–15.
In its Response, Patent Owner does not allege error with our
preliminary constructions or propose constructions for any other term. See
generally PO Resp. Petitioner does not address these terms in its Reply. See
generally Pet. Reply. Having reviewed the complete record developed
during trial, we do not discern a dispute between the parties regarding these
terms and we do not need to construe these terms to decide the issues before
us. See, e.g., Nidec Motor Corp. v. Zhongshan Broad Ocean Motor Co., 868
F.3d 1013, 1017 (Fed. Cir. 2017) (“[W]e need only construe terms ‘that are
in controversy, and only to the extent necessary to resolve the controversy.’”
(quoting Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200 F.3d 795, 803
(Fed. Cir. 1999))).
D. Obviousness over Kalker and Novotny
Petitioner contends that claims 1–4, 6–10, 12–18, and 20 are
unpatentable under 35 U.S.C. § 103 as obvious over Kalker and Novotny.
Pet. 14–59. For the reasons that follow, we are not persuaded that the
evidence supports Petitioner’s arguments and Dr. Freedman’s testimony.
Accordingly, we are not persuaded that Petitioner establishes unpatentability
of claims 1–4, 6–10, 12–18, and 20 by a preponderance of the evidence.
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1. Overview of Kalker (Ex. 1006)
Kalker concerns a video encoding and decoding technique which
“encod[es] [a] segmentation map” of a video picture by “assigning a block-
size code to each block size . . . to obtain a one-dimensional series of block-
size codes.” Ex. 1006, 1:46–50; see id. at 6:10–25 (Claim 1).
Figure 9 of Kalker is reproduced below.

Figure 9 shows a segmentation map of a
video picture. Id. at 2:36–37.
As shown in Figure 9, a “plurality of variable-size blocks of a picture
constitute a ‘segmentation map.’” Id. at 2:66–67. In the segmentation map,
“[e]ach block size is represented by a block-size code S,” for example, “S=1
for 4*4 blocks, S=2 for 8*8 blocks and S=3 for 16*16 blocks.” Id. at 3:30–
33. The block sizes in the segmentation map are represented by a bit stream
representing a sequence of block sizes. See id. at 5:58–60. The sequence of
block sizes is generated via a “scanning circuit [that] scans the segmentation
map on the basis of a grid corresponding to the smallest block size,” as
shown by scanning pattern 91. Id. at 3:22–24; 5:36–38. For example:
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First, the top left 16*16 block is analyzed. As this block is not
further divided into smaller blocks, the block size code S=3 is
generated. Then, the next (top right) 16*16 block is analyzed.
This block is segmented into smaller blocks and will now
completely be scanned before proceeding to the next 16*16 block.
More particularly, the top left 8*8 block is now analyzed. As it
is not further divided, the block size code S=2 is generated.
Similarly, the block size code S=2 is generated for the next (top
right) 8*8 block. Then the bottom left 8*8 block is analyzed. It
is segmented into smaller blocks and will thus be scanned before
proceeding to the next 8*8 block. Accordingly, an S=1 block size
code is generated for the top left 4*4 block, the top right 4*4
block, the bottom left 4*4 block and the bottom right 4*4 block,
successively.
Id. at 5:38–52. The scanning of the segmentation map of Figure 9 “yields
the following sequence of block size codes: 3,2,2,1,1,1,1,2,3,3,EOS[end-of-
scan code].” Id. at 5:58–60. The sequence of block code sizes is decoded
via a corresponding segmentation map-decoding circuit and a segmentation
map reconstruction circuit in which “an element is extracted from the
sequence” to assign “the value S to each grid location within said block.”
Id. at 4:36–37, 43–45, 53–59.
2. Overview of Novotny (Ex. 1007)
Novotny concerns video encoding and decoding techniques. Ex. 1007
¶ 22. In particular, Novotny describes “a picture (e.g., an image, a frame, a
field, etc.) 70i may be divided (e.g., segmented, partitioned, etc.) into a
number of macroblocks 86.” Id. ¶ 31 (referring to Fig. 3, not reproduced).
Novotny further describes that encoded video includes macroblock syntax
elements “that may include but are not limited to: macroblock type[s]” (id.
¶ 37) which “generally include, but are not limited to, Intra16×16 [and]
Intra4×4” (id. ¶ 50).
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3. Independent Claim 1
Independent claim 1 recites “decoding a first syntax element
associated with a sequence of pictures of the video data, the first syntax
element representing a minimum size of blocks of the sequence of pictures.”
Claim 1 further recites “partitioning the current block to obtain a plurality of
sub-blocks for the current block, wherein partitioning comprises determining
that a sub-block of the sub-blocks of the current block does not include
further separately encoded sub-partitions when the size of the sub-block is
equal to the minimum size indicated by the first syntax element.”
a) Petitioner’s Contentions
According to Petitioner, “Kalker teaches an encoding-side
transmitting station that assigns particular size values to multiple block-size
codes (i.e., syntax elements) for an entire coded unit (e.g., a picture or frame
in Kalker)” and transmits these block-size codes to a decoding-side
receiving station, which “decode[s] the data and reconstruct[s] the image.”
Pet. 26–27 (citing Ex. 1006, 3:8–18, 1:20–24, 3:31–35, 4:55–56, claims 1,
8). More particularly, Petitioner asserts that:
[T]he encoder sets a block-size code of “3” to represent the
largest blocks in the coded unit, such as 16×16 blocks, a block-
size code of “2” can represent intermediary blocks, such as 8×8
blocks, and a block-size code of “1” represents the smallest, or
minimum block size in the coded unit, e.g., 4×4 blocks.
Pet. 27 (citing Ex. 1006, 3:25–34, 5:36–57, 4:43–67). Petitioner also asserts
that “[b]ecause the block-size codes may vary from picture to picture, the
encoder must not only communicate” which particular block-size code (e.g.,
1 or 3) is assigned to a given partition in a current picture, but “it must also
communicate what value the block-size code represents for a given picture
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(e.g., 4×4, 8×8, 16×16).” Id. at 15–16 (citing Ex. 1006, 5:15–21 (describing
alternatives for block-size codes, such as S=3 corresponding to an 8×8
block); Ex. 1009 ¶ 49).
Noting that Kalker does not explicitly disclose the assigning and
transmitting of block-size codes at the decoder side, Petitioner further asserts
“Kalker teaches both encoding and decoding video data” and that while
“[i]ts most detailed discussion is provided from the perspective of the
encoding process,” a person having ordinary skill in the art (“PHOSITA”)
would have recognized “Kalker’s teachings of its encoding steps would be
reversed by a corresponding decoder device.” Pet. 25 (citing-in-part Ex.
1006, 2:43–3:5, 3:8–18, 3:36–67, 4:36–42, 4:48–50; Ex. 1009 ¶ 52).
To teach the “partitioning” limitation, Petitioner quotes the following
portion of Kalker:
Then, the next (top right) 16*16 block is analyzed. This block is
segmented into smaller blocks and will now completely be
scanned before proceeding to the next 16*16 block. More
particularly, the top left 8*8 block is now analyzed. As it is not
further divided, the block size code S=2 is generated. Similarly,
the block size code S=2 is generated for the next (top right) 8*8
block. Then the bottom left 8*8 block is analyzed. It is
segmented into smaller blocks and will thus be scanned before
proceeding to the next 8*8 block. Accordingly, an S=1 block
size code is generated for the top left 4*4 block, the top right 4*4
block, the bottom left 4*4 block and the bottom right 4*4 block,
successively.
Pet. 43 (quoting Ex. 1006, 5:40–52, referring to Fig. 9) (emphasis omitted).
Petitioner contends Kalker teaches that “when an S=2 block is partitioned,
the sub-blocks are each assigned S=1 without the need for performing
further scanning of the S=1 block for sub-partitions.” Id. at 44–45 (citing
Ex. 1006, 5:47–52). According to Petitioner, the ’365 patent makes the
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claimed “determination” in the same way: “[w]hen the size of a sub-block is
equal to the minimum size, it is recognized that the block does not have
separately encoded sub-partitions.” Id. at 45 (citing Ex. 1001, 39:37–41,
39:5–12).
Petitioner further contends that,
[I]n Kalker, the decoder partitions the current block (i.e., a block
of the scanning grid that has a starting size equal to the maximum
size, represented by S=3 and equal to 16×16 pixels), to obtain a
plurality of sub-blocks (8×8 and 4×4 blocks in the exemplary
embodiment) for the current block, wherein partitioning
comprises determining that a sub-block (4×4 block) of the sub-
blocks (8×8 blocks) of the current block (16×16 block) does not
include further separately encoded subpartitions when the size of
the sub-block is equal to the minimum size (4×4 pixels) indicated
by the first syntax element (S=1).
Id. (citing Ex. 1006, 5:31–57, Fig. 9).
b) Patent Owner’s Contentions
Patent Owner argues that
Even if the Board were to find that map encoder 4 and scanning
circuit 41, both of which are part of Kalker’s encoder, are
performing some sort of partitioning process comparable to
Claim 1’s “partitioning the current block” step, such a finding
would necessarily mean that such partitioning is not being
performed in Kalker’s decoder.
PO Resp. 40. According to Patent Owner, “Petitioner’s efforts to prove that
Kalker’s map encoder is performing a partitioning step in order to show that
the map decoder is performing the same step (i.e., not an inverse step) are
confusing at best.” Id. at 42.
Patent Owner further argues that reconstruction of the segmentation
map at Kalker’s map decoder “is not a segmentation process” because
“[n]othing is being divided or partitioned” and, “[i]n fact, the process is
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additive,” because “[d]ifferent sized map elements representing different
size picture blocks (i.e., elements of size 3, 2, and 1) are being used” in the
decoder “to reconstruct the segmentation map.” Id. at 50 (emphasis added);
see also id. at 43–49 (illustrating Patent Owner’s contention as to
reconstruction of the segmentation map).
c) Petitioner’s Responsive Contentions
Petitioner responds that “[w]hen the block size code S=3 is applied by
the decoder, the stream of pixel data is divided into a 16x16 block, not a 4x4
array of a segmentation map consisting of 3’s as shown in PO’s diagram.”
Pet. Reply 8 (citing PO Resp. 44). And, Petitioner submits, Patent Owner’s
“suggestion that this map is simply ‘read’ by the decoder and involves no
partitioning of actual image data is demonstrably false” because “Kalker
expressly teaches that image data ‘is segmented into smaller blocks’ by the
encoder, and that the corresponding process results in the segmentation of
picture data by the decoder.” Id. at 8–9 (citing Ex. 1006, 3:8–18; 5:38–57)
(emphasis added).
d) Discussion
Petitioner argues that, because “the partitioning process [at the
encoder] in Kalker scans a current block in the grid with a starting size equal
to the maximum size . . . and then partitions down through an iterative
partitioning process potentially to the smallest block size,” “a PHOSITA
would have recognized that the decoder is performing the inverse of these
steps.” Pet. 40 (citing Ex. 1009 ¶¶ 43, 52; Ex. 1006, 4:43–50) (emphasis
omitted). Petitioner’s position––that the inverse of an encoder-side, iterative
partitioning process is also partitioning, but at the decoder side––is not
supported by sufficient evidence for the reasons discussed below.
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Kalker discloses few specific details of its decoder. See generally
Ex. 1006; see Pet. 25 (acknowledging Kalker’s “most detailed discussion is
provided from the perspective of the encoding process, while much of the
decoding process is generally described with respect to the information and
data received from the encoder”). Petitioner nevertheless contends “a
PHOSITA would have recognized, Kalker’s teachings of its encoding steps
would be reversed by a corresponding decoder device.” Id. (citing-in-part
Ex. 1009 ¶ 52; Ex. 1006, 4:48–50 (scanning order performed by decoder
corresponds to scanning order in the encoder)). In his supporting testimony,
Dr. Freedman testifies that
[A] PHOSITA would have recognized . . . that Kalker’s
decoding unit is simply reversing the encoding process in both
embodiments given Kalker’s teachings describing that “scanning
order [employed by the decoder] corresponds to the scanning
order in the encoder.” Id. at 4:48-50. A PHOSITA would
therefore have recognized that this same concept of the decoder
performing a reconstruction corresponding to the scanning
order of the encoder applies to the embodiment described
generally at 5:31-57 of Kalker and illustrated in Figure 9—
because the encoder scans a grid based on the largest block size
to partition blocks, a decoder generally would be programmed to
follow instructions provided by an encoder to inverse the
encoding process using the largest block size in this embodiment.
Ex. 1009 ¶ 52 (emphasis added).
Dr. Freedman further testifies that “[i]n one embodiment, the encoder
identifies the largest block size and builds the map (and the decoder
reconstructs the map) on the basis of a grid corresponding to the largest
block size, such as a 16×16 block, denoted by S=3.” Id. ¶ 50 (citing Ex.
1006, 3:19–25, 4:36–47, 5:29–65, Fig. 5, 7, 9). Dr. Freedman further
testifies that “[i]n the example of this embodiment, the largest block size is
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represented by code S=3, which is a 16×16 starting block size for the
coding/decoding grid,” and that “[a] grid block with starting size of 16×16
may be subdivided into smaller blocks down to a minimum block size,
represented by the block-size code S=1 (e.g., 4×4).” Id. (citing Ex. 1006,
5:29–65, Fig. 9).
Dr. Freedman’s testimony cited in support of Petitioner’s contentions
for the “partitioning” limitation is unpersuasive as it is conclusory and not
supported by underlying evidence. See 37 C.F.R. § 42.65 (“Expert
testimony that does not disclose the underlying facts or data on which the
opinion is based is entitled to little or no weight.”). The portion of Kalker in
column 3 cited in support of Dr. Freedman’s testimony concerns scanning
circuit 41, which scans a segmentation map based on the a grid having a
block size corresponding to the largest or smallest block size to generate a
sequence of block size codes S at the encoder side. The cited portion in
column 5 and Figure 9 of Kalker provides further detail on how the
segmentation map is generated, but does not specifically disclose whether
that process occurs at the decoder. Only the cited portions in column 4 and
Figures 5 and 7 concern a process occurring at the decoder side. Ex. 1006,
4:36–47 (“The decoded sequence of block-size codes S is applied to a
segmentation map reconstruction circuit 91. This circuit comprises a
segmentation map memory having a grid corresponding to the smallest
block size (4×4 in the present example).”). We are not persuaded that
Kalker supports Petitioner’s position because the evidence cited by
Petitioner in support of its above-quoted contentions and underlying Dr.
Freedman’s testimony does not sufficiently support finding that Kalker
teaches or suggests “partitioning the current block to obtain a plurality of
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sub-blocks” in which the current block is “a current block of a plurality of
blocks of the sequence of pictures” after “decoding a first syntax element”
and “decoding a second syntax element,” as recited in claim 1.
Even assuming that Kalker’s segmentation map, during its creation, is
scanned based on a grid having the largest block size, such that sub-blocks
of pixel data are partitioned from larger blocks of pixel data, there is
insufficient evidence that supports the proposition that the inverse action on
the decoder side would also be partitioning larger blocks of picture data into
sub-blocks of picture data. Despite this, Petitioner would have us find that,
after Kalker’s encoder partitions, for example, a 16×16 block of pixels to
obtain 8×8 and 4×4 sub-blocks, the encoder would convey information to
the decoder so that the decoder could recreate the process from the encoder
side by again partitioning the 16×16 block of pixels to obtain 8×8 and 4×4
sub-blocks. We find that Patent Owner has the better position––that instead
of being partitioned or divided, pixel data is subject to an additive process in
which already partitioned blocks from the encoder are used, in the decoder,
in a reconstruction process. See PO Resp. 42–50.
For the foregoing reasons, we find that the combination of Kalker and
Novotny does not teach or suggest the partitioning limitation. As such, we
are not persuaded that Petitioner establishes that claim 1 is obvious over
Kalker and Novotny by a preponderance of the evidence.
4. Independent Claims 7 and 15 and Dependent Claims 2–
4, 6–8, 10, 12–14, 16–18, and 20
Petitioner relies on the same analysis for its challenges to claims 1, 7,
and 15. Pet. 23–50. For reasons substantially similar to those set forth
above with respect to independent claim 1, we are not persuaded that
Petitioner has established, by a preponderance of the evidence, that
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independent claims 7 and 15 are obvious in view of Kalker and Novotny.
We reach the same conclusion with respect to dependent claims 2–6, 8–14,
and 16–20 as these claims depend from independent claims 1, 7, and/or 15.
E. Obviousness over Kalker, Novotny, and Chiang
Petitioner contends that claims 5, 11, and 19 are unpatentable under
35 U.S.C. § 103 as obvious over Kalker, Novotny, and Chiang. Id. at 59–62.
As these claims depend from independent claims 1, 7, and 15, and as Chiang
was not cited to cure the deficiencies of Kalker and Novotny discussed
above with respect to the independent claims (see Pet. 61–62), we reach the
same conclusion—that Petitioner has not established by a preponderance of
the evidence that claims 5, 11, and 19 are unpatentable as obvious in view of
Kalker, Novotny, and Chiang.
F. Real Party in Interest Arguments
Patent Owner argues that we should dismiss the Petition because it
does not name all real parties in interest. PO Resp. 68–74. Patent Owner
identifies several companies that have paid membership fees to Petitioner
and asserts that those companies should have been named as real parties in
interest. Id. at 69.
Petitioner challenges Patent Owner’s assertions, arguing that Unified
Patents Inc. is the sole real party in interest. Pet. Reply 16–24. Petitioner
cites evidence that it alone controls this proceeding and does not
communicate with its members about potential validity challenges before
filing IPRs. Id. at 19–20 (citing Ex. 2152, 10–11; Ex. 2138, 31:25–33:2,
222:16–223:4).8 Petitioner avers that it searched for and could not identify

8 Ex. 2152 does not have a corresponding redacted version. Ex. 2138 is
redacted as Ex. 1027.
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any communications with its members regarding the ’365 patent or this
proceeding other than public announcements. Id. at 20 (citing Ex. 20129;
Ex. 2161, 68:22–69:910). Petitioner further points out that no alleged
unnamed real party in interest would be subject to a time bar under § 315(b).
Id. at 20.
We have considered the parties’ submissions and determine that
Petitioner has adequately identified the real party in interest. Patent Owner
has introduced no evidence specific to this proceeding that causes us to
question Petitioner’s identification, and has not identified an aspect of
Petitioner’s business structure that we view as showing the alleged unnamed
real parties in interest are clear beneficiaries with respect to this proceeding
that have a preexisting, established relationship with Petitioner. See Ventex
Co. v. Columbia Sportswear N. Am., Inc., IPR2017-00651, Paper 152 at 6–
11 (PTAB Jan. 24, 2019) (precedential).
G. Motion to Seal Patent Owner’s Sur-Reply
In its Motion to Seal Patent Owner’s Sur-reply, Petitioner argues
The Emails from Shawn Ambwani with Attachments (Ex. 2113,
2114), the Transcripts of Depositions of Kevin Jakel (Ex. 2138
and 2161), and the Sample Membership Agreement Form (Ex.
2152) that Petitioner produced subject to the agreed-to Protective
Order each include statements that contain confidential, sensitive
commercial information, including closely held information
related to Unified’s core business. The Patent Owner Sur-Reply
(Paper 31) references and cites to the confidential information
included in one or more of the documents listed above. Petitioner
submits, and without agreeing or disagreeing to the designations,

9 Petitioner incorrectly cites Ex. 2013. Pet. 20. We understand this to be a
typographical error as Ex. 2012 is a press release that refers specifically to
the ’365 patent.
10 Ex. 2161 is redacted as Ex. 1026.
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Patent Owner does not contest or oppose that, the unredacted
version of the Patent Owner Sur-Reply (Paper 31) should be
sealed. Petitioner herewith submits a redacted version of the
Patent Owner Sur-Reply.
Paper 34, 2–3 (emphasis added). Petitioner represents that Patent Owner
does not oppose its motion. Id. at 3.
Petitioner argues that the exhibits discussed in the Sur-Reply were
“produced subject to the agreed-to Protective Order,” and that each of the
exhibits includes “statements that contain confidential, sensitive commercial
information, including closely held information related to Unified’s core
business.” Id. at 2–3 (citing Exs. 2113, 2114, 2138, 2161, 2152). Petitioner
notes that the “Patent Owner Sur-Reply (Paper 31) references and cites to
confidential information included in the [exhibits] listed above.” Id. at 3.
Petitioner provides redacted version for the Sur-Reply. Id.; see Ex. 1038.
Petitioners contends that “the balance overwhelmingly favors protecting
Unified’s highly confidential information,” because “[t]he information
Unified seeks to protect has nothing to do with patentability, but rather
involves Unified’s status as the real party in interest.” Paper 34, 3.
Petitioner argues that, accordingly, “the public interest in having access to
Unified’s confidential financial and business information is minimal, while
the public interest is well-served in keeping such business information
readily available and exchangeable between parties based on voluntary
discovery, without the fear of incidental public exposure of confidential
business information..” Id. at 3–4. Petitioner further argues that “[i]dentical
or similar confidential information held by Unified has been sealed by the
Board in prior cases.” Id. at 4 (citing Unified Patents, Inc. v. Uniloc 2017
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LLC, IPR2017-02148, Papers 84, 89 (PTAB May 23, 2019 & May 31, 2019)
(granting Unified’s Motions to Seal)).
A motion to seal may only be granted on a showing of good cause. 37
C.F.R. § 42.54(a). In general, the Board’s “rules aim to strike a balance
between the public’s interest in maintaining a complete and understandable
file history and the parties’ interest in protecting truly sensitive information.”
TPG at 19. The rules identify confidential information as “trade secret or
other confidential research, development, or commercial information.” Id.
(citing 37 C.F.R. § 42.54). Applying the rules, the Board has required that
a movant to seal must demonstrate adequately that (1) the
information sought to be sealed is truly confidential, (2) a
concrete harm would result upon public disclosure, (3) there
exists a genuine need to rely in the trial on the specific
information sought to be sealed, and (4), on balance, an interest
in maintaining confidentiality outweighs the strong public
interest in having an open record.
Argentum Pharms. LLC v. Alcon Research, Ltd., IPR2017-01053, Paper 27
at 4 (PTAB Jan. 19, 2018) (designated informative July 10, 2018); see also
Corning Optical Commc’ns RF, LLC, v. PPC Broadband, Inc., IPR2014-
00440, Paper 46 at 2 (PTAB April 6, 2015) (“Material is not confidential
business information simply because it relates to an activity of a
business.”).
Upon review of the Sur-Reply and corresponding redacted exhibit
1038, we are persuaded, by Petitioner, that the exhibit “include[s] statements
that contain confidential, sensitive commercial information, including
closely held information related to Unified’s core business.” Paper 34, 3.
We are further persuaded that “[t]he information Unified seeks to protect has
nothing to do with patentability, but rather involves Unified’s status as the
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real party in interest” based on our review of the corresponding redacted
exhibit. Id. at 6.
We find persuasive Petitioner’s concerns that disclosing the redacted
information could harm Petitioner by enabling others to replicate its
business, and that unsealing such information would have an adverse effect
on future voluntary discovery. We are persuaded that Petitioner has shown
good cause for maintaining this information under seal. Consequently, we
grant Petitioner’s motion to seal Patent Owner’s Sur-Reply.
H. Constitutionality Arguments
Patent Owner asserts that the “Board lacks the authority to issue a
Final Written Decision in this proceeding because the Administrative Patent
Judges (‘APJs’) are principal officers of the United States that must be
appointed by the President and confirmed by the Senate.” PO Resp. 67.
According to Patent Owner, the Federal Circuit’s decision in Arthrex, Inc. v.
Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir. 2019), “did not actually fix
the problem.” Id.
We decline to consider Patent Owner’s constitutional challenge as the
issue has been addressed by the Federal Circuit. See Arthrex, 941 F.3d at
1328.
IV. CONCLUSION
We conclude that Petitioner has not established, by a preponderance
of the evidence, that claims 1–4, 6–10, 12–18, and 20 of the ’365 patent are
unpatentable as obvious over the combination of Kalker and Novotny. We
also conclude that Petitioner has not established, by a preponderance of the
evidence, that claims 5, 11, and 19 are unpatentable as obvious over the
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combination of Kalker, Novotny, and Chiang. The chart below summarizes
our conclusions.
Claims
35
U.S.C.
§
Reference(s)/
Basis
Claims Shown
Unpatentable
Claims Not
Shown
Unpatentable
1–4, 6–10,
12–18, 20 103
Kalker,
Novotny
1–4, 6–10,
12–18, 20
5, 11, 19 103
Kalker,
Novotny,
Chiang

5, 11, 19
Overall
Outcome
1–20

V. ORDER
It is, therefore,
In consideration of the foregoing, it is hereby:
ORDERED that claims 1–20 of the ’365 patent have not been shown
by a preponderance of the evidence to be unpatentable;
FURTHER ORDERED that Patent Owner’s Sur-Reply (Paper 31) is
sealed; and
FURTHER ORDERED that, because this is a Final Written 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:
Eric A. Buresh
Jason Mudd
ERISE IP, P.A
eric.buresh@eriseip.com
jason.mudd@eriseip.com

Ashraf Fawzy
Roshan Mansinghani
Michelle Callaghan
UNIFIED PATENTS INC.
afawzy@unifiedpatents.com
roshan@unifiedpatents.com
michelle@unifiedpatents.com

For PATENT OWNER:
Brent Bumgardner
Thomas Cecil
Barry Bumgardner
Matthew Juren
NELSON BUMGARDNER ALBRITTON P.C
bbumgardner@nbclaw.net
tom@nelbum.com
barry@nelbum.com
matthew@nelbum.com

Christopher Granaghan
chris@nbafirm.com