Velos Media, LLC

Patent Trials and Appeals Board

Aug 31, 2020

IPR2019-00710 (P.T.A.B. Aug. 31, 2020)

Trials@uspto.gov Paper No. 45
571-272-7822 Entered: August 31, 2020

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

UNIFIED PATENTS INC.,
Petitioner,

v.

VELOS MEDIA, LLC,
Patent Owner.
____________

IPR2019-00710
Patent 8,964,849 B2
____________

Before DANIEL J. GALLIGAN, JASON W. MELVIN, and
AARON W. MOORE, Administrative Patent Judges.

MELVIN, Administrative Patent Judge.

JUDGMENT
Final Written Decision
Determining No Challenged Claims Unpatentable
35 U.S.C. § 318(a)

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I. INTRODUCTION
Petitioner, Unified Patents, Inc.,1 filed a Petition (Paper 3, “Pet.”)
requesting inter partes review of claims 1, 2, 11, 12, and 22 (“the challenged
claims”) of U.S. Patent No. 8,964,849 B2 (Ex. 1001, “the ’849 patent”).
Patent Owner, Velos Media, LLC, timely filed a Preliminary Response.
Paper 7 (“Prelim. Resp.”). We instituted review of the challenged claims.
Paper 8 (“Institution Decision” or “Inst.”).
Patent Owner filed a Response. Paper 21 (“PO Resp.”). Petitioner
filed a Reply. Paper 25 (“Pet. Reply”). Patent Owner filed a Sur-Reply.
Paper 31 (“PO Sur-Reply”). We held a hearing on June 8, 2020, and a
transcript appears in the record. Paper 41 (public version) (“Tr.”); Paper 42
(full version).
This is a final written decision as to the patentability of the challenged
claims. For the reasons discussed below, we determine that Petitioner has
not shown by a preponderance of the evidence that any of the challenged
claims is unpatentable.
A. THE ’849 PATENT
The ’849 patent is titled “Multi-Level Significance Maps for
Encoding and Decoding” and describes data-compression techniques related
to encoding and decoding video data. Ex. 1001, codes (54), (57), 1:16–18.
Blocks of pixel data are transformed into blocks of coefficients that
represent the pixels, known as transform units. See id. at 1:37–42, 1:49–56.
Transform units may be further represented by significance maps made from
significant-coefficient flags that each indicate whether a corresponding

1 Petitioner has now changed its name to Unified Patents, LLC. Paper 22.
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coefficient in the transform unit is nonzero. Id. at 4:64–5:9. Encoding the
information from a significance map to a bitstream involves scanning the
map in a certain order and encoding the information according to a particular
scheme. Id. at 7:39–8:4.
The Specification describes that encoding significance maps may
benefit from using “multi-level significance maps for certain transform
units.” Id. at 8:38–40. Such an approach involves grouping the significant-
coefficient flags by “dividing or partitioning the transform unit structure into
blocks.” Id. at 8:45–54. Figure 4 is reproduced below:

Id. at Fig. 4. Figure 4 depicts an example 16×16 significance map 102
divided into sixteen 4×4 blocks. Id. at 8:62–9:13. To implement the
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multilevel approach to significance maps, each 4×4 block of significant-
coefficient flags in Figure 4 is assigned a significant-coefficient-group flag,
indicating whether the block contains a nonzero coefficient. Id. at 9:25–37.
Figure 5 is reproduced below:

Id. at Fig. 5. Figure 5 depicts a higher-level significance map 104 created
from Figure 4’s significance map. Id. at 9:38–50. Such higher-level
significance maps can benefit efficiency during coding because a significant-
coefficient-group flag with a zero value indicates that there is no need to
process the individual significant-coefficient flags of that group—they are
all zero. Id. at 10:43–54. The higher-level significance maps also allow
certain “special cases that are accounted for in the encoding and decoding
processes to save bits.” Id. at 12:6–7.
One special case described in the Specification relates to the block of
coefficients in the upper-left corner of a map, which includes the coefficient
in the [0, 0] position—also referred to as the DC coefficient. Id. at 12:16–19.
Because that group represents low-frequency information in the transformed
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pixel data, “[t]he probability of this group containing no non-zero
coefficients is extremely low.” Id. at 12:19–20. Therefore, the Specification
describes that, “instead of transmitting a significant-coefficient-group flag
for the [0, 0] group, the encoder may be configured to always encode the
significant-coefficient flags of that group and the decoder may be configured
to always decode the significant-coefficient flags of that group.” Id. at
12:20–25.
B. CHALLENGED CLAIMS
Challenged claims 1, 11, and 22 are independent. Claim 1 is
illustrative and is reproduced below:
1. A method of reconstructing significant-coefficient flags for a
transform unit from a bitstream of encoded data, the method
comprising:
reconstructing significant-coefficient-group flags, wherein
the transform unit is partitioned into non-overlapping
blocks, each block containing a respective group of
significant-coefficient flags, and wherein each
significant-coefficient-group flag corresponds to a
respective block and its respective group of significant-
coefficient flags; and
reconstructing each significant-coefficient flag by
if the significant-coefficient-flag is at position (0,0) in its
group, a corresponding significant-coefficient-group
flag is non-zero, the group is not the DC block, and
all the previous significant-coefficient flags in that
group are zero, then inferring the significant-
coefficient-flag at position (0,0) in that group to be 1,
and
otherwise
decoding the significant-coefficient flag from the
bitstream if that significant-coefficient flag is in a
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group that has corresponding significant-
coefficient-group flag that is non-zero, and
setting the significant-coefficient flag to zero, if that
significant-coefficient flag is in a group that has
corresponding significant-coefficient-group flag
that is zero.
Id. at 20:42–67. Claim 11 recites similar limitations, and claim 22 is directed
to a method for encoding that recites encoding limitations corresponding
generally to the decoding limitations of claim 1. Id. at 21:41–22:4, 22:52–
23:9.
C. PRIOR ART AND ASSERTED GROUNDS
Petitioner asserts that the challenged claims are unpatentable on the
following grounds:
Claims Challenged 35 U.S.C. §2 Reference(s)/Basis
1, 2, 11, 12, 22 103 Chen3
1, 2, 11, 12, 22 103 Chen, Bao4
Pet. 4. Petitioner also relies on the Declaration and Reply Declaration of
Dr. Alan C. Bovik (Ex. 1002; Ex. 1036). See generally Pet. 4–75;
Pet. Reply 3–9.

2 The Leahy-Smith America Invents Act (“AIA”), Pub. L. No. 112-29, 125
Stat. 284, 287–88 (2011), amended 35 U.S.C. § 103. Because the effective
filing date of the ’849 patent is before March 16, 2013 (the effective date
of the relevant amendment), the pre-AIA version of § 103 applies. See
Ex. 1001, code (22).
3 U.S. Patent Publication No. 2010/0086030 A1 (filed Sept. 18, 2009;
published Apr. 8, 2010) (Ex. 1003).
4 U.S. Patent Publication No. 2007/0160133 A1 (filed Aug. 18, 2006;
published July 12, 2007) (Ex. 1004).
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II. ANALYSIS
A. CLAIM CONSTRUCTION
For an inter partes review petition filed after November 13, 2018, we
construe claim terms “using the same claim construction standard that would
be used to construe the claim in a civil action under 35 U.S.C. 282(b).” See
Changes to the Claim Construction Standard for Interpreting Claims in Trial
Proceedings Before the Patent Trial and Appeal Board, 83 Fed. Reg. 51340,
51358 (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)).
Petitioner submits only that the plain and customary meaning of the
claim terms should apply. Pet. 30. Patent Owner submits that “DC block”
refers to “a non-overlapping block resulting from partitioning a single
transform unit” and that a DC block “includes the only DC coefficient of the
transform unit at (0,0).” PO Resp. 25. Patent Owner notes that Petitioner
appears to agree with that interpretation, in that Petitioner refers to the DC
block as the one block with the DC coefficient. Id. at 25 (citing Pet. 22).
In the Institution Decision, we construed “DC block” as “the
transform-unit block that includes the DC coefficient (the coefficient at (0,0)
in the transform unit).” Inst. 7–8. Both parties note their agreement with our
construction. PO Resp. 26; Reply 2. We maintain that construction here.
Claim 1 recites “the transform unit is partitioned into non-overlapping
blocks, each block containing a respective group of significant-coefficient
flags.” Id. at 20:46–48. Thus, the claim language itself already requires that
the DC block is a non-overlapping block resulting from partitioning a single
transform unit.
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The Specification discloses splitting a transform unit into groups (id.
at 8:45–54) and explains that a block is a type of group: “The significance
map 102, i.e. the set of significant-coefficient flags, may be grouped based
upon a uniform division of the transform unit structure into contiguous
blocks in one embodiment.” Id. at 9:6–9; see also id. at 9:16–24 (describing
possible group shapes as including square blocks, rectangular blocks, and
diagonal slices). It further discloses that certain groups may receive special
treatment; significant here is “the first group,” which “contains the DC
coefficient at [0, 0] in the transform unit.” Ex. 1001, 12:6–7, 12:16–19.
In light of the claim language and Specification’s disclosures, we
construe “DC block” as “the transform-unit block that includes the DC
coefficient (the coefficient at (0,0) in the transform unit).”
We determine that no further constructions are required at this stage.
See Nidec Motor Corp. v. Zhongshan Broad Ocean Motor Co., 868 F.3d
1013, 1017 (Fed. Cir. 2017); Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc.,
200 F.3d 795, 803 (Fed. Cir. 1999).
B. UNPATENTABILITY OVER CHEN ALONE
Petitioner maps the limitations of claim 1 to Chen’s disclosures.
Pet. 31–61. Chen discloses methods of processing video data using
partitioned macroblocks. Ex. 1003, code (57). Chen’s methods include using
“hierarchical coded block pattern (CBP) values to efficiently identify coded
macroblocks and partitions having non-zero coefficients within a large
macroblock.” Id. ¶ 8. Such “CBP values are each one-bit syntax values that
indicate whether or not there are any nonzero transform coefficient values in
a given block following transform and quantization operations.” Id. ¶ 126.
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Chen’s hierarchy of CBP values allows a value at one level to
represent a matrix of values at a lower level, indicating whether at least one
of those values is nonzero. Id. ¶ 102.
In one example, when CBP64 value 262 is a bit with a value of
‘1,’ indicating that there is at least one non-zero coefficient in
the large macroblock, CBP 260 includes the four CBP32 values
264, 266, 268, 270 for four 32x32 partitions of the large 64x64
macroblock, as shown in the example of FIG. 15.
Id. ¶ 195. Chen’s Figure 15 is reproduced below:

Ex. 1003, Fig. 15. Figure 15 depicts an example hierarchical coded block
pattern 260.
Like the ’849 patent, Chen discusses techniques for improving coding
efficiency by inferring the value of a coefficient based on the values of other
coefficients in a block. For a block with a bit indicating the block has
nonzero coefficients and four additional bits, each representing nonzero
coefficients in one quarter partition of the overall block, “when the first three
of the four additional bits are zero, the fourth additional bit may not be
included, which the decoder may interpret as the last partition being one.”
Id. ¶ 131. Chen designates further-partitioned levels of a macroblock as
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higher levels and states that “[t]he highest-numbered level, in some
examples, could be as fine-grain as a single pixel, i.e., a 1×1 block.” Id.
¶ 112.
Because Chen does not expressly state that the DC block is coded
using a condition that excludes it from the inferring step, Petitioner turns to
other evidence. Petitioner submits that Chen’s statement that “video
decoder 30 may operate according to a video compression standard, such as
the ITU-T H.264 standard,” shows a skilled artisan would understand to
exclude the DC block from the inferring step. Pet. 49–50 (quoting Ex. 1003
¶ 75). To that end, Petitioner asserts that “the H.264 standard requires that
the block/group flag (‘syntax element coded_block_flag’) for a DC block be
coded separately from other blocks.” Id. at 50. To support that the assertion,
Petitioner relies on a portion of the H.264 standard that does not support
such a finding without further explanation, and Petitioner directs us to no
such explanation. See PO Resp. 65–66; Pet. 50 (citing Ex. 1018
§ 9.3.3.1.1.9). Although Petitioner cites Dr. Bovik’s declaration, the
statements there offer no explanation beyond the Petition’s assertion.
Compare Pet. 50–51, with Ex. 1002 ¶ 87.
The H.264 standard itself appears to describe how certain variables
are determined when processing according to the standard, but the standard
does not plainly support Petitioner’s assertion regarding what skilled artisans
would understand about the DC block. See Ex. 1018 § 9.3.3.1.1.9. Without
such a straightforward disclosure in the reference or an adequate explanation
from a declarant, Petitioner’s contentions fail to persuade us that Chen alone
renders obvious the challenged claims. See Pet. 49. We highlighted this
deficiency in the Institution Decision (Inst. 10), and Patent Owner addressed
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the ground based on Chen alone in light of H.264 (PO Resp. 62–69), but
Petitioner’s Reply does not offer any explanation or support beyond the
Petition (see Pet. Reply 8 n.3).
Furthermore, even if the H.264 standard requires the group flag for
the DC block to be coded separately, Petitioner has not explained how
excluding the DC block from the inferring step follows from this separate
coding. Indeed, if the group flag for the DC block is coded, there would be
no apparent reason to deviate from Chen’s disclosure of inferring the value
of the last bit in certain circumstances. See Ex. 1003 ¶ 131. For example,
encoding the group flag with a value of one and then including a value of
one for the last bit when every other bit in the group is zero runs counter to
Chen’s disclosure of omitting that last bit as unnecessary. See Ex. 1003
¶ 131 (“That is, the encoder may determine that the last bit has a value of
one when the first three bits are zero and when the bit representative of the
higher level hierarchy has a value of one.”).
We conclude that Petitioner has not shown by a preponderance of the
evidence that the challenged claims would have been obvious over Chen.
C. UNPATENTABILITY OVER CHEN AND BAO
Petitioner additionally relies on Bao to assert that skilled artisans
would know to exclude Chen’s DC block from the inferring step. Pet. 51–55.
Like Chen, Bao relates to video coding techniques, including those that
conform to and extend the H.264 standard. Ex. 1004 ¶¶ 42–43. Bao
describes a mode of processing termed “Intra 16 by 16 prediction mode,” in
which “the luma prediction residuals are first transformed into 16 4×4
blocks, and the DC coefficients of the 16 blocks form another 4×4 block.”
Id. ¶ 105. Thus, a transform is performed on each of 16 separate subblocks,
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producing 16 transform units, each with a DC coefficient. The DC
coefficient of each transform unit is extracted and then the DC coefficients
are grouped to make Bao’s “DC block.” Id. Bao’s Figure 15 is reproduced
below:

Figure 15 depicts Bao’s “DC block” 94, formed of the DC coefficients from
each 4x4 transform unit. Ex. 1004 ¶ 105, Fig. 15. Bao discloses that,
“[a]ccording to ITU-T H.264, the DC block is coded separately from the AC
blocks.” Id. ¶ 105.
Petitioner submits that a skilled artisan “would have understood that it
is highly unlikely for the DC coefficient to be zero” and that, therefore,
“[f]or efficiency and further reduction of the number of bits in a bitstream, it
is not necessary (and often redundant) to include a flag in the bitstream to
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indicate, to a decoder, whether a DC block contain at least one non-zero
coefficient or not.” Pet. 53. Thus, according to Petitioner, such person
“would have been motivated to modify Chen to incorporate Bao’s teachings
of coding the DC block separately.” Id.
The problem with Petitioner’s argument is that understanding the DC
block is unlikely to have a zero value does not dictate a particular approach
to the coding–decoding process. A skilled artisan could configure a system
to treat the DC block in a variety of ways, but Petitioner must show that it
would have been obvious to arrive at the claimed approach.
In its Reply, Petitioner argues that “Bao’s teaching is based on the
axiom that a DC coefficient is highly unlikely to have a value of zero;
therefore, it should be processed differently.” Pet. Reply 3. Petitioner asserts
that Patent Owner “has cited no other possible reason for separately
processing Bao’s ‘DC block.’” Pet. Reply 3 n.1. It is not Patent Owner’s
burden, however, to disprove Petitioner’s alleged motivation. Rather,
Petitioner must demonstrate by a preponderance of the evidence that the
claims are unpatentable. 35 U.S.C. § 316(e). This burden of persuasion
never shifts to Patent Owner. See Dynamic Drinkware, LLC. v. Nat’l
Graphics, Inc., 800 F.3d 13.75, 1378 (Fed. Cir. 2015). Petitioner does not
provide sufficient detail to explain why Bao’s teaching of coding its DC
block separately would lead a skilled artisan to have excluded Chen’s DC
block from the (0,0) inference. See PO Resp. 50. Although Petitioner asserts
that Bao teaches “exclud[ing] the DC block” from the (0,0) inference
(Pet. 54), we see no evidence or explanation of this in the record. Rather, as
confirmed during trial, Petitioner relies on Bao to teach separate processing
of a DC block (see Pet. Reply 1–9), which falls short of the claimed subject
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matter as discussed above. Having considered the full record, we determine
Petitioner has not demonstrated obviousness of claim 1 over Chen and Bao
by a preponderance of the evidence.
Petitioner’s contentions for claim 11, which is directed to a decoder
and also recites excluding the DC block from the (0,0) inference, refer to its
contentions for claim 1 and fail for the same reasons. See Pet. 66–67.
Claim 22 is directed to a method for encoding and recites a limitation
analogous to the (0,0) inference in claim 1, for which Petitioner refers to its
contentions based on Chen alone and based on Chen and Bao. Pet. 75. We
are unpersuaded for the reasons discussed for claim 1. Dependent claims 2
and 12 stand with their respective independent claims.
D. REAL PARTIES IN INTEREST
Patent Owner argues that we should dismiss the Petition because it
does not name all real parties in interest. PO Resp. 71–76. Patent Owner
identifies seven companies that have paid membership fees to Petitioner and
asserts that those companies should have been named as real parties in
interest. Id.
Petitioner challenges Patent Owner’s assertions, arguing that Unified
Patents Inc. is the sole real party in interest. Pet. Reply 9–18. Petitioner cites
evidence that it alone controls this proceeding (Ex. 2152, 5, 10–11;
Ex. 2138, 31:25–33:2; Ex. 1017, 3, 4; Ex. 2161, 93:5–17) and does not
communicate with its members about potential validity challenges before
filing IPRs (Ex. 2138, 222:16–223:4). Petitioner searched for and could not
identify any communications with its members regarding the ’849 patent or
this proceeding other than public announcements. Pet. Reply 13; Ex. 2013;
Ex. 2161, 68:22–69:9. Petitioner further points out that no alleged unnamed
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real party in interest would be subject to a time bar under § 315(b). Pet.
Reply 14.
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, 6–11
(Jan. 24, 2019) (precedential).
E. THE BOARD’S CONSTITUTIONALITY
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. 69.
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.” PO Resp. 70.
We decline to consider Patent Owner’s constitutional challenge as the
issue has been addressed by the Federal Circuit in Arthrex. See Arthrex, 941
F.3d at 1337 (“This as-applied severance . . . cures the constitutional
violation . . . .”).
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III. CONCLUSION
For the reasons discussed above, we conclude Petitioner has not
proven unpatentability of the challenged claims.
In summary:
Claims

35
U.S.C.
§
Reference(s)/Basis
Claims
Shown
Unpatentable
Claims
Not Shown
Unpatentable
1, 2, 11,
12, 22 103 Chen 1, 2, 11, 12, 22
1, 2, 11,
12, 22 103 Chen, Bao 1, 2, 11, 12, 22
Overall
Outcome 1, 2, 11, 12, 22

IV. ORDER
In consideration of the foregoing, it is hereby:
ORDERED that claims 1, 2, 11, 12, and 22 of US 8,964,849 B2 are
not determined to be unpatentable; 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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PETITIONER:
David Cavanaugh
Trishan Esram
Brian J. Lambson
Jonathan P. Knight
WILMER CUTLER PICKERING HALE & DORR LLP
david.cavanaugh@wilmerhale.com
trishan.esram@wilmerhale.com
brian.lambson@wilmerhale.com
Jonathan.Knight@wilmerhale.com

Roshan Mansinghani
Jonathan Stroud
UNIFIED PATENTS INC.
roshan@unifiedpatents.com
jonathan@unifiedpatents.com

Theodoros Konstantakopoulos
DESMARAIS LLP
tkonstantakopoulos@desmaraisllp.com

PATENT OWNER:
Brent N. Bumgardner
Thomas C. Cecil
Barry J. Bumgardner
Matthew C. Juren
NELSON BUMGARDNER ALBRITTON P.C.
brent@nbafirm.com
tom@nbafirm.com
barry@nbafirm.com
matthew@nbafirm.com