Takeaway: A reasonable expectation of success does not require that a person of ordinary skill in the art already know with absolute predictability that a combination would work.

In its Final Written Decision, the Board found that Petitioner had shown by a preponderance of the evidence that claims 1-5 and 8 of the ’274 patent are unpatentable. “The ’274 patent relates to identifying voltage anomalies,” which “may occur when the cabling of a power distribution system is physically damaged and an electrically conductive path is established between the cabling and an object, such as a manhole cover or street light pole.”

The Board first addressed claim construction under the broadest reasonable interpretation in light of the specification, construing the terms “voltage anomaly,” “mobile,” and “monitored event.”

With respect to “voltage anomaly,” Petitioner argued that “the ’274 patent describes a voltage anomaly as being undesirable or dangerous,” and therefore the term should be construed as an “unexpected voltage.” The Board disagreed with Petitioner’s proposal as being inconsistent with the specification, as the Board previously determined in its Decision on Institution. The Board also previously disagreed with Patent Owner’s proposal as improperly limiting the term to one specific example disclosed in the specification. Relying on the specification and dictionary definitions, the Board defined the phrase “identify a line frequency voltage anomaly in the electric field” to mean “identify a deviation from a normal line frequency voltage in the electric field, including by identifying an electric field, at a line frequency, that exceeds a threshold, or that rises and peaks above a threshold or background and then falls.”

With regard to the term “mobile,” the Board agreed with Patent Owner’s proposal and defined the limitation “mobile apparatus” to mean “apparatus that operates while in motion.

With respect to the term “monitored event,” the Board determined in its Institution Decision that not express construction was necessary. The parties did not dispute the determination, and the Board again provided no express construction.

The Board next turned to the alleged obviousness of claims 1-5 and 8, addressing Patent Owner’s arguments in turn. First, the Board found Patent Owner’s argument that Petitioner’s analysis failed to take into account the claimed invention as a whole to be unpersuasive. The Board was persuaded by Petitioner’s arguments and evidence that the cited references disclose the limitations of the challenged claims.

The Board then analyzed the proposed combination of prior art references. The Board found that Petitioner identified evidence that the proposed combination would have been obvious. With respect to Patent Owner’s argument that a person of ordinary skill in the art would not have combined the referenced based on the level of skill in the art, the Board was persuaded that the reason for combining was clear from the disclosure of the prior art.

Patent Owner also argued that a person of skill in the art would not have a reasonable expectation of success in combining the references. The Board was not persuaded, noting that “a reasonable expectation of success does not require that a person of ordinary skill in the art already know with absolute predictability that a combination would work.” The Board was also persuaded that the Thomas reference’s disclosure would provide one with a reasonable expectation of success.

As to Patent Owner’s arguments that the EFA Manual references “teaches away from the combination proposed by Petitioner,” the Board was not persuaded. The Board found that reading the prior art references together, one of ordinary skill in the art would have found the claimed invention obvious.

Next, the Board addressed Patent Owner’s arguments related to alleged objective indicia of non-obviousness, finding each unpersuasive. As a preliminary matter, Patent Owner contended that Petitioner’s arguments related to the objective indicia should not be considered because “Petitioner knew about the objective indicia before filing the Petition, but did not present its arguments and evidence until the Reply.” The Board disagreed, noting that Petitioner was responding to arguments raised in the Patent Owner Response.

With respect to the alleged long-felt but unmet need, the Board found that “[a]lthough Patent Owner explains generally why the technology existing prior to the ’274 patent may not have been ideal for large cities, that alone does not indicate that utility companies actually had a long-felt but unmet need for a more efficient alternative, rather than, for example, just a lack of interest in the technology.” Moreover, with respect to one alleged example of a long-felt but unmet need involving Consolidated Edison (“Con Ed”), based on the evidence presented, the Board found that Con Ed’s need arose in 2004 (shortly after an electrocution death in New York City), and the need was met in 2005. Thus, the need was not long-felt.

Regarding the alleged failure of others, the Board was not persuaded by Patent Owner’s arguments. Patent Owner’s evidence including issued U.S. patents and an Electric Power Research Institute assessment did not indicate whether anybody “actually attempted to develop such a system and failed.” Another undated article, which indicated that mobile detection systems were not sufficiently advanced, was also not persuasive because the relevant date of the article was unclear and the article suggested that systems were successfully developed, just not sufficiently advanced. With respect to alleged examples of Con Ed’s failed attempts, the Board found that the cited examples did not have a nexus to the challenged claims in that Con Ed “previously decided not to even try developing a contactless system.”

Addressing commercial success, the Board was similarly not persuaded by Patent Owner’s arguments based on its SVD2000 product revenues and use in 61 regions in the United States and 4 regions in Canada and the UK. In particular, the Board noted that:

In sum, the evidence indicates that sales of Patent Owner’s SVD2000 product were driven by government regulation and/or catalyst events. Ex. 1026 ¶¶ 27–35; Ex. 1045, 101:21–102:12; Ex. 2014 ¶ 38; see supraSection II.B.5.a. However, the evidence also indicates that, after confronted with one or both of those factors, customers who purchased Patent Owner’s product appreciated that it was more efficient than manually testing for voltage anomalies. Ex. 2014 ¶¶ 94–101. As such, the evidence, when considered as a whole, indicates that the patented subject matter may have played some role in sales of Patent Owner’s product, but was not the direct or primary cause of those sales. See Applied Materials, 692 F.3d at 1299–1300. Therefore, the objective consideration of commercial success weighs only slightly in favor of finding the challenged claims to be non-obvious.

As to alleged copying by Petitioner of Patent Owner’s SVD2000 product, the Board found that even if copying were established, “the objective consideration of copying does not demonstrate that the challenged claims are non-obvious.”

Thus, the Board concluded that the challenged claims are unpatentable, and the alleged objective indicia did not weigh in favor of non-obviousness.

The Board then addressed Petitioner’s Motion to Exclude evidence, denying in part and dismissing in part the Motion. In denying in part the Motion, the Board noted that although objective indicia are to be considered from the perspective of a person of ordinary skill in the art, “Petitioner does not identify any requirement that only those considered to be a person of ordinary skill in the art may provide testimony regarding those objective indicia.” The Board dismissed and denied the Motion as to other evidence because the evidence was either not relied upon or because Petitioner’s arguments went to weight rather than admissibility.

Turning to Patent Owner’s Motion to Exclude, the Board also denied in part and dismissed in part this Motion. Certain of Patent Owner’s arguments were found to be related to sufficiency of proof rather than admissibility, and were therefore denied. Of particular interest, as to Exhibit 1017, Declaration of Mr. Johnson, Patent Owner argued that Mr. Johnson lacked personal knowledge of matters in the declaration. First, Patent Owner argued that he did not participate in distribution of EFA Manuals and could not testify to its distribution between 2002 and 2004. However, the Board noted that “[a]lthough Mr. Johnson may not have personally shipped or distributed the EFA Manual, Mr. Johnson states that he has personal knowledge that, since 2002, Narda’s standard practice is to include a user manual with each device sold and to provide user manuals to customers and others upon request.” Second, Patent Owner argued that Mr. Johnson lacked personal knowledge as to sales records discussed in his declaration. Again, the Board noted that “[a]lthough Mr. Johnson may not have reviewed the underlying sales records that form the basis of Exhibit C, Mr. Johnson states that the sales data in Exhibit C was generated upon his request by the sales and marketing department from Narda’s business records.” Finally, the Board found Patent Owner’s arguments related to Mr. Johnson’s inability to “explain at his deposition why the EFA Manual could no longer be accessed from certain websites mentioned in his declaration” raise question of weight and not admissibility.

The Board finally dismissed as moot Patent Owner’s Motion for Observation on Cross Examination, and granted the parties’ unopposed Motions to Seal.

L-3 Communications Holdings, Inc. v. Power Survey, LLC, IPR2014-00834

Paper 68: Final Written Decision

Dated: November 23, 2015

Patent: 8,482,274 B2

Before: Karl D. Easthom, Kevin W. Cherry, Robert J. Weinschenk, and William M. Fink

Written by: Weinschenk

Related Proceedings: IPR2014-00832; IPR2014-00835; IPR2014-00836; IPR2014-00838; IPR2014-00839; Power Survey, LLC v. Premier Utility Services, LLC, No. 2:13-cv-05670-FSH-MAH (D.N.J)