13-09-06 Motorola Petition for Rehearing (Apple ITC Appeal)

7/30/2019 13-09-06 Motorola Petition for Rehearing (Apple ITC Appeal)

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NON-CONFIDENTIAL

Appeal No. 2012-1338

UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

APPLE INC.,

Appellant,

v.

INTERNATIONAL TRADE COMMISSION,

Appellee,

and

MOTOROLA MOBILITY, INC.,

Intervenor.

Appeal from the United States International Trade Commission

in Investigation No. 337-TA-750

INTERVENOR MOTOROLA MOBILITY, INC.S

PETITION FOR PANEL REHEARING AND REHEARINGEN BANC

Charles K. VerhoevenQUINN EMANUEL URQUHART &SULLIVAN LLP50 California St., 22nd FloorSan Francisco, CA 94111

(415) 875-6600

David A. NelsonQUINN EMANUEL URQUHART &SULLIVAN LLP500 W. Madison St., Suite 2450Chicago, IL 60661(312) 705-7400

Edward J. DeFrancoAlexander RudisMatthew A. TraupmanQUINN EMANUEL URQUHART &SULLIVAN LLP

51 Madison Ave., 22nd FloorNew York, NY 10010(212) 849-7000

Attorneys for Intervenor MotorolaMobility, Inc.

Case: 12-1338 Document: 75 Page: 1 Filed: 09/06/2013


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CERTIFICATE OF INTEREST

Counsel for Intervenor Motorola Mobility, Inc. certifies the following:

1. The full name of every party or amicus represented by me is:

Motorola Mobility LLC, formerly known as Motorola Mobility, Inc.

On June 22, 2012, Intervenor Motorola Mobility, Inc. was converted

into a Delaware limited liability company, changing its name to

Motorola Mobility LLC.

2. The name of the real parties in interest represented by me is:

None.

3. All parent corporations and any publicly held companies that

own 10 percent or more of the stock of the party or amicus curiae

represented by me are:

Motorola Mobility LLC is a wholly owned subsidiary of Google Inc.,

a publicly held company.

4. The names of all law firms and the partners or associates that

appeared for the party or amicus now represented by me in the trial court or

agency or are expected to appear in this Court are:

See the Addendum to Motorolas Certificate of Interest on the

following page.



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ADDENDUM TO MOTOROLAS CERTIFICATE OF INTEREST

The names of all law firms and partners or associates that appeared for

the party now represented by me in the agency or that are expected to appear

in this court are:

QUINN EMANUEL URQUHART &SULLIVAN,LLP

Charles K. Verhoeven

David A. Nelson

Edward J. DeFranco

David Eiseman

Alexander RudisBrian Dunne

Matthew A. Traupman

Stephen Straub

Anastasia Fernands

Tigran Vardanian

Graham Pechenik

Cathleen Garrigan

Greg Maskel

Abhishek Bapna

David Shaul

Aaron Perez-Daple

Robert Cleary, Jr.

Geneva McDaniel

STEPTOE &JOHNSON LLP

Charles F. Schill

Jamie B. Beaber



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Respectfully submitted,

Dated: September 6, 2013 By: s/ David A. Nelson


QUINN EMANUEL URQUHART &

SULLIVAN,LLP

50 California St., 22nd Floor

San Francisco, CA 94111

Tel. (415) 875-6600

Fax (415) 875-6700

Edward J. DeFranco

Alexander RudisMatthew A. Traupman


SULLIVAN,LLP

51 Madison Ave., 22nd Floor

New York, NY 10010

Tel. (212) 849-7000

Fax (212) 849-7100

David A. Nelson


SULLIVAN,LLP

500 W. Madison St., Suite 2450

Chicago, IL 60661

Tel. (312) 705-7400

Fax (312) 705-7401

Attorneys for Intervenor Motorola

Mobility, Inc.



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TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ......................................................................... viTABLE OF ABBREVIATIONS .................................................................. viiSTATEMENT OF COUNSEL ....................................................................... 1INTRODUCTION .......................................................................................... 1BACKGROUND ............................................................................................ 3ARGUMENT FOR REHEARING ................................................................. 5I. THE PANEL OVERLOOKED THE NEED TO REMAND

FOR ADDITIONAL FACT FINDING REGARDING

WHETHER THE PERSKI 455 PATENT IS PRIOR ART TO

CLAIM 10 ............................................................................................ 5II. THE PANELS FINDINGS ON SECONDARY

CONSIDERATIONS OVERLOOKED THE FACT THAT

APPLES IPHONE HAS NOT BEEN FOUND TO PRACTICE

CLAIM 10 OF THE 607 PATENT..................................................... 7III. THE PANEL MISAPPLIED FEDERAL CIRCUIT CASE

LAW ON THE NEXUS REQUIRED TO ESTABLISH

SECONDARY CONSIDERATIONS OF NON-

OBVIOUSNESS ................................................................................... 9ARGUMENT IN SUPPORT OF REHEARINGEN BANC........................ 11I. THE PANELS OPINION CONFLICTS WITH THIS

COURTS PRECEDENT REQUIRING A FINDING THAT

THE COMMERCIALLY SUCCESSFUL PRODUCTPRACTICES THE ASSERTED CLAIMS ........................................ 11



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II. THE PANELS OPINION SIGNIFICANTLY LOWERS THESTANDARD FOR ESTABLISHING A NEXUS BETWEEN

SALES OF A PRODUCT AND THE MERITS OF THE

CLAIMED INVENTION ................................................................... 13CONCLUSION ............................................................................................. 15

Material has been deleted from page 7 of the non-confidential version of

Intervenor Motorola Mobility, Inc.s Petition For Panel Rehearing And

RehearingEn Banc. This material is deemed confidential business

information pursuant to 19 U.S.C. 1337(n) and 19 C.F.R. 210.5, and

pursuant to the Protective Order entered November 30, 2010, and the Orders

Amending the Protective Order entered January 14, 2011, and June 16,

2011. The material omitted from these pages contains confidentialdeposition and hearing testimony, confidential business information,

confidential patent application information, and confidential licensing

information.



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vi

TABLE OF AUTHORITIES

Page

Cases

Commil USA, LLC v. Cisco System, Inc.,2013 U.S. App. LEXIS 12943 (Fed. Cir. June 25, 2013).......................... 9

Demaco Corp. v. F. Von Langsdorff Licensing Ltd.,851 F.2d 1387 (Fed. Cir. 1988) ............................................................... 10

DyStar Textilfarben GmbH & Co. Deutschland KG v. C.H. Patrick Co.,464 F.3d 1356 (Fed. Cir. 2006) ................................................................. 8

Graham v. John Deere Co. of Kansas City,383 U.S. 1 (1966) ..............................................................................passim

J.T. Eaton & Co. v. Atlantic Paste & Glue Co.,106 F.3d 1563 (Fed. Cir. 1997) ................................................. 1, 8, 10, 12

In re Kao,639 F.3d 1057 (Fed. Cir. 2011) ........................................................... 1, 10

Muniauction, Inc. v. Thompson Corp.,532 F.3d 1318 (Fed. Cir. 2008) ........................................................... 8, 14

Ormco Corp. v. Align Tech., Inc.,463 F.3d 1299 (Fed. Cir. 2006) ....................................................... 1, 8, 10

Ritchie v. Vast Res., Inc.,

563 F.3d 1334 (Fed. Cir. 2009) ................................................................. 9

Tokai Corp. v. Eaton Enterprise, Inc.,632 F.3d 1358 (Fed. Cir. 2011) ............................................... 1, 10, 14, 15

Statutes

35 U.S.C. 102(e) ...................................................................................... 2, 5

35 U.S.C. 103 ............................................................................................... 1



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TABLE OF ABBREVIATIONS

A_____ The cited page(s) of the Joint Appendix

ALJ Administrative Law Judge

Blue Br. Corrected Opening Brief and Addendum of

Appellant Apple Inc.

Commission or ITC United States International Trade Commission

ID Initial Determination (A35-253)

Perski 455 U.S. Patent No. 7,372,455 (A16601-36)

Perski 808

provisional

U.S. Provisional Patent Application No. 60/446,808

(A16147-55)

Section 337 19 U.S.C. 1337

SmartSkin SmartSkin: An Infrastructure for Freehand

Manipulation on Interface, CHI 2002, April 22-25,2002 (A13597-604)

Gray Br. Reply Brief of Appellant Apple Inc.

607 patent U.S. Patent No. 7,663,607 (A531-63)

.



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STATEMENT OF COUNSEL

Based on my professional judgment, I believe the panel decision is

contrary to the following decision of the Supreme Court of the United States

and precedents of this Court: Graham v. John Deere Co. of Kansas City,

383 U.S. 1 (1966);J.T. Eaton & Co. v. Atl. Paste & Glue Co., 106 F.3d 1563

(Fed. Cir. 1997); Ormco Corp. v. Align Tech., Inc., 463 F.3d 1299 (Fed. Cir.

2006); Tokai Corp. v. Eaton Enter., Inc., 632 F.3d 1358 (Fed. Cir. 2011);In

re Kao, 639 F.3d 1057 (Fed. Cir. 2011). Based on my professional

judgment, I also believe this appeal requires an answer to one or more

precedent-setting questions of exceptional importance:

1. Whether commercial success can be established without a

finding that the commercially successful product practices the claims being

challenged under 35 U.S.C. 103.

2. Whether a patentee can establish commercial success as

evidence of non-obviousness when the features the patentee alleges are

responsible for creating the commercial success are found in the prior art.

s/ David A. Nelson

Attorney for Intervenor

INTRODUCTION

The panel correctly affirmed the ITCs finding that seven of the eight

asserted claims of the 607 patent are invalid; however, by invalidating

some, but not all, of the asserted claims, the panel overlooked facts and



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misapplied the law as they uniquely apply to claim 10, the only remaining

asserted claim. First, the panel mistakenly failed to remand for additional

fact finding on the issue of whether the Perski 455 patent is prior art to

claim 10. With respect to claim 10, the panel found that the Perski 455

patent is not entitled to the filing date of its provisional application;

however, the Perski 455 patent itself was filed before Apples 607 patent.

Thus, even without the benefit of its provisional, Perski is prior art under 35

U.S.C. 102(e) unless Apple can establish an earlier priority date. Because

there has been no fact finding on this issue, a remand is required.

Second, the panel overlooked the fact that there has been no finding

that Apples iPhone practices claim 10. The panel found that Apple had

conclusively established commercial success with respect to claim 10 based

on its iPhone sales; however, the only claim that Apple was found to

practice is claim 1, a claim that the panel found anticipated by the Perski

455 patent. The panels holding that Apple had established commercial

success without an underlying finding that the iPhone practices claim 10 is

inconsistent with this Courts precedent.

Finally, the panel misapplied this Courts precedent regarding the

required nexus between the iPhones commercial success and the merits of

the claimed invention. This Courts case law requires a patentee to



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demonstrate that the products commercial success is based upon claimed

features that are not present in the prior art. Yet, the panel undertook no

analysis to determine if the features of Apples multitouch sensor that are

responsible for the iPhones commercial success were present in prior art

touchscreens such as the one described in the Perski 455 patent.

BACKGROUND

1. The only patent relevant to this petition, the 607 patent, relates

to a transparent touchscreen that can detect more than one finger touch at the

same time, a multitouch screen. A532-61. Apple asserted claims 1-7 and

10, of which claims 1 and 10 are independent. Although they both relate to

a multitouch screen, claims 1 and 10 recite a different sensor structure.

A561(21:35-55); A561(22:23-55). For example, claim 10 requires three

glass members with transparent electrodes (typically made of ITO) deposited

over two of the members. A561(21:35-55). Claim 1 allows for the two

transparent electrodes to be deposited over both sides of a single substrate.

A561(22:23-55). The ALJ found that each of the asserted claims of the 607

patent were invalid on two separate grounds.

2. The first basis for the ALJs invalidity finding was that the

Perski 455 patent anticipated each of the asserted claims of the 607 patent.

A181-86. One of the issues before the ALJ and on appeal was whether the



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Perski 455 patent is prior art to the 607 patent. The Perski 455 patent was

filed on January 15, 2004 and claims priority to a provisional application

the Perski 808 provisional filed on February 10, 2003. Apples 607

patent was filed on May 6, 2004. Apple alleged that it reduced the subject

matter of the 607 patent to practice in December 2003. The ALJ found that

the Perski 455 patent is entitled to the filing date of its provisional, and

because the provisional was filed before Apples earliest alleged invention

date, the ALJ found that Perski is prior art. The ALJ expressly declined to

make any fact findings regarding Apples alleged invention date and

subsequent diligence in reduction to practice. A182.

3. The ALJs second basis for his invalidity determination was

that the SmartSkin article renders each of the asserted claims of the 607

patent obvious. Of the fourGraham factors, only the fourth factor,

secondary considerations, is relevant to this petition. Regarding Apples

alleged commercial success, the ALJ found that Apples iPhone practices

claim 1 of the claimed invention of the 607 patent no findings were made

with respect to the remaining asserted claims. A238. The ALJ then rejected

Apples arguments that there was a nexus between the iPhones commercial

success and the 607 patent, finding that the iPhones commercial success

was due to factors unrelated to the merits of the 607 patent. A217.



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ARGUMENT FOR REHEARING

I. THE PANEL OVERLOOKED THE NEED TO REMAND FORADDITIONAL FACT FINDING REGARDING WHETHER

THE PERSKI 455 PATENT IS PRIOR ART TO CLAIM 10

Motorola does not seek rehearing regarding the panels determination

that the Perski 455 patent is not entitled to the filing date of its provisional

with respect to claim 10. Motorola does, however, seek rehearing regarding

the procedural disposition that is necessitated by the panels decision. The

correct procedural disposition is for the panel to remand the issue of whether

the Perski 455 patent is prior art with respect to claim 10.

As Apple itself admits, the determination of whether Perski 455 is

prior art depends on two propositions of timing. Gray Br. 17. First is the

priority date of the subject matter of claim 10, and second is the effective

filing date of the Perski 455 patent. Id. The Perski 455 patent was filed on

January 15, 2004 approximately five months before the 607 patent was

filed. Unless Apple can establish an earlier priority date, the Perski 455

patent is prior art under 35 U.S.C. 102(e) even in light of the panels

determination that Perski 455 does not relate back to the filing date of the

provisional application. Apple alleges that it reduced the claimed subject

matter to practice in December 2003 before the Perski 455 patent was

filed but after the Perski 808 provisional was filed. Because the ALJ found



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that the Perski 455 patent was entitled to the filing date of the Perski 808

provisional, and, because this predated Apples earliest alleged conception

date, the ALJ made no factual findings with respect to the date of conception

or diligence in reduction to practice. A181-82. The panel affirmed the

ALJs finding that claims 1-7 are entitled to the filing date of the provisional

but reversed the ALJs finding with respect to claim 10. Op. at 9.

Given the panels determination that Perski 455 is not entitled to the

filing date of the Perski 808 provisional for claim 10, a remand for

additional fact finding regarding Apples alleged priority date for claim 10 is

required. Unless Apple can establish a priority date before January 15, 2004

for claim 10, the Perski 455 patent is still prior art even without the benefit

of the provisional filing date. Indeed, Apple itself admits that a remand is

necessary: If the ALJs ruling on the second proposition [that Perski 455

is entitled to the filing date of its provisional] was erroneous, this Court must

remand to make the requisite finding on the first [whether Apple can

establish its alleged priority date]. Gray Br. 17. The panel did not

explicitly remand this issue and instead simply held that the ITCs finding of

anticipation lacks substantial evidence. Op. at 9. Motorola respectfully

requests that the panel clarify its decision so that it explicitly remands the

issue of whether the Perski 455 patent is prior art to claim 10.



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II. THE PANELS FINDINGS ON SECONDARYCONSIDERATIONS OVERLOOKED THE FACT THAT

APPLES IPHONE HAS NOT BEEN FOUND TO PRACTICE

CLAIM 10 OF THE 607 PATENT

In light of the panels finding that Perski 455 anticipates claims 1-7,

the only claim relevant to the obviousness analysis is claim 10. With respect

to secondary considerations of non-obviousness, the panel reversed the

ALJs finding that Apple failed to establish a sufficient nexus between sales

of the iPhone and the subject matter of the 607 patent. Op. at 17. The

panels decision regarding secondary considerations rests upon a faulty

factual premise: That the iPhone has been shown to practice claim 10.

The ALJ determined that the iPhone practices claim 1 but expressly

declined to making any findings with respect to the other asserted claims of

the 607 patent. A238. There are significant structural differences between

claims 1 and 10. Unlike claim 1, claim 10 requires that the conductive

layers (typically ITO) be deposited on two separate glass members.

A561(122:39-46). In contrast, the iPhone uses [[

]] A19344.

Because there has been no finding that the iPhone practices claim 10,

the panels determination that Apple has established secondary

considerations for claim 10 of the 607 patent based on iPhone sales

conflicts with both Supreme Court and Federal Circuit precedent. Indeed,

Confidential

Material Omitted



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the entire rationale for evaluating secondary considerations is premised upon

the notion that the product that demonstrates secondary considerations

actually practices the patent. See Graham, 383 U.S. at 17-18 ([S]econdary

considerations . . . might be utilized to give light to the circumstances

surrounding the origin of the subject matter sought to be patented.).

Consistent with this premise, this Courts precedent consistently holds

that commercial success requires a showing that a product practices the

patent. For example inJ.T. Eaton, this Court explained that commercial

success is usually shown by significant sales in a relevant market, and that

the successful product is the invention disclosed and claimed in the

patent. . . . 106 F.3d at 1571; see also Muniauction, Inc. v. Thompson

Corp., 532 F.3d 1318, 1327-28 (Fed. Cir. 2008); Ormco, 463 F.3d at 1311-

12. Indeed without first establishing that the iPhone practices claim 10, any

evidence relating to the commercial success of the iPhone, copying of the

iPhone or industry praise for the iPhone cannot be relevant to the validity of

claim 10 because it does not relate to the claimed subject matter.

Apple may argue that evidence showing that the iPhone practices

claim 1 is sufficient to establish commercial success for other claims of the

607 patent. This argument is erroneous for two reasons. First, invalidity is

determined on a claim-by-claim basis. See, e.g.,DyStar Textilfarben GmbH



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& Co. Deutschland KG v. C.H. Patrick Co., 464 F.3d 1356, 1372 (Fed. Cir.

2006). Establishing secondary considerations for one claim is not sufficient

to establish secondary considerations for all other asserted claims. Second,

claim 1 has been found invalid. It therefore cannot be practiced. Cf.

Commil USA, LLC v. Cisco Sys., Inc., 2013 U.S. App. LEXIS 12943, at *14

(Fed. Cir. June 25, 2013). Based on the current record, there has been no

finding that Apple practices any valid claim of the 607 patent.

The proper disposition is to remand the issue of whether secondary

considerations have been established so that the ITC can determine in the

first instance if the iPhone practices claim 10. If the iPhone does not

practice claim 10, there can be no secondary considerations for that claim.

III. THE PANEL MISAPPLIED FEDERAL CIRCUIT CASE LAWON THE NEXUS REQUIRED TO ESTABLISH SECONDARY

CONSIDERATIONS OF NON-OBVIOUSNESS

The panels commercial success analysis also conflicts with this

Courts case law on secondary considerations. Although commercial

success is an established secondary consideration, this Court has recognized

that [t]he commercial success of a product can have many causes unrelated

to patentable inventiveness. Ritchie v. Vast Res., Inc., 563 F.3d 1334, 1336

(Fed. Cir. 2009). That concern is especially true where, as in this case, the

claimed invention is only one component of a multi-component product.



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See Demaco Corp. v. F. Von Langsdorff Licensing Ltd., 851 F.2d 1387,

1392 (Fed. Cir. 1988). Thus, this Courts case law requires that the patentee

establish a nexus between the alleged commercial success and the merits of

the claimed invention. Id.

In order to establish the required nexus between a products

commercial success and the merits of the claimed invention, this Courts

precedent consistently requires that a patentee demonstrate that the products

success is not the result of features found in the prior art. SeeKao, 639 F.3d

at 1068 (Where the offered secondary consideration actually results from

something other than what is both claimed andnovel in the claim, there is no

nexus to the merits of the claimed invention.) (emphasis in original); Tokai,

632 F.3d at 1369 (If commercial success is due to an element in the prior

art, no nexus exists.); Ormco Corp., 463 F.3d at 1312 ([I]f the feature that

creates the commercial success was known in the prior art, the success is not

pertinent.);J.T. Eaton, 106 F.3d at 1571 ([T]he asserted commercial

success must be due to the merits of the claimed invention beyond what was

readily available in the prior art.).

The panel found that commercial success had been conclusively

established, finding that Apples evidence of industry copying of the

multitouch screen and industry praise of this feature are strong evidence of



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nexus. Op. at 17. By focusing simply upon the iPhones multitouch

screen, the panel overlooked the analysis required by this Courts case law.

As the panel itself recognized, a multitouch screen already existed in the

prior art the Perski 455 patent discloses a multitouch screen having all

of the features recited by claims 1-7, including a transparent sensor that can

simultaneously detect multiple touches. Op. at 8-9. The panel conducted no

analysis to determine whether the features of the multitouch screen that

allegedly drive sales of the iPhone (and that were the subject of alleged

copying and industry praise) were already present in the prior art. This

analysis is required under the case law cited above.

ARGUMENT IN SUPPORT OF REHEARINGEN BANC

If the panel declines to reconsider its decision, the Court should rehear

the case en banc to clarify the law regarding the proof needed to establish

secondary considerations of nonobviousness.

I. THE PANELS OPINION CONFLICTS WITH THIS COURTSPRECEDENT REQUIRING A FINDING THAT THE

COMMERCIALLY SUCCESSFUL PRODUCT PRACTICES

THE ASSERTED CLAIMS

The panels decision that Apple had established commercial success

conflicts with both the letter and spirit of this Courts jurisprudence on

secondary considerations. Commercial success, like all other secondary

considerations, is considered in the obviousness analysis to give light to the



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circumstances surrounding the origin of the subject matter sought to be

patented. Graham, 383 U.S. at 17-18. In Graham,the Supreme Court

explained that secondary considerations serve two important functions.

First, secondary considerations focus attention on economic and

motivational rather than technical issues and are, therefore, more susceptible

of judicial treatment than are the highly technical facts often present in

patent litigation. Id. at 36. Second, they guard against the use of

impressible hindsight when making an obviousness determination. Id.

A crucial assumption underpinning the Supreme Courts rationale for

including secondary considerations in the test for obviousness is that the

product used to establish commercial successful (or industry praise or

copying by competitors) practices the claim whose validity is being

challenged. Consistent with this reasoning, Federal Circuit case law requires

that a patentee demonstrate that its product practices the asserted claims.

See, e.g.,J.T. Eaton, 106 F.3d at 1571.

The panels opinion conflicts with this precedent and is inconsistent

with the rationale for considering commercial success set forth in Graham.

The ALJ determined that Apples iPhone practices a single claim of the 607

patent, claim 1. The panel affirmed the ALJs finding that claim 1 is

anticipated by the Perski 455 patent. Thus, based on the current record,



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Apple has not shown that it practices any valid claim of the 607 patent, and

in particular, there has been no finding that Apple practices claim 10 the

only claim relevant to the obviousness analysis.

Nevertheless, the panel reversed the ALJ and found that Apple had

conclusively established commercial success. Op. at 17. By ordering the

ITC to consider on remand Apples commercial success when assessing the

obviousness of claim 10 even though there has been no showing that Apple

practices this claim, the panels opinion is inconsistent with this Courts

precedent. Indeed, the panels findings here are completely divorced from

the Supreme Courts original rationale for considering commercial success.

If the iPhone does not practice claim 10, its commercial success does

nothing to shed light on the circumstances surrounding the origin of the

subject matter sought to be patented. Graham, 383 U.S. at 17-18.

II. THE PANELS OPINION SIGNIFICANTLY LOWERS THESTANDARD FOR ESTABLISHING A NEXUS BETWEEN

SALES OF A PRODUCT AND THE MERITS OF THE

CLAIMED INVENTION

The panels opinion regarding the legal standard needed to establish

the nexus between sales of a product and the merits of the claimed invention

separately merits en banc review to ensure uniformity in this Courts

precedent. In addition to the threshold showing that the commercially

successful product practices the asserted claim, this Courts precedent also



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requires that a patentee establish a nexus between the commercial success

and the merits of the claimed invention. See, e .g.,Muniauction, 532 F.3d at

1327. The nexus requirement flows directly from the rationale set forth in

Graham: A product, particularly a multi-component product, may be

commercially successful for a number of reasons; for example, the ALJ

found that the iPhones commercial success was due to factors unrelated to

the 607 patent, including the iPhones slim profile, light weight, good

battery life, attractive design, easy to use software, and availability of

numerous popular applications, songs and videos. A217. In order for

commercial success to be relevant in an obviousness analysis, the consumer

demand driving commercial sales of the product must be attributable to the

novel aspects of the claimed invention. This nexus to the merits of the

invention rather than an entire product, or, in the case of a multi-component

product, a particular feature is particularly important in industries where

technological progress occurs incrementally, leading to minor improvements

over existing technology.

Thus, as part of the nexus requirement, a patentee must show that the

commercial success is the result of novel features and not simply elements in

the prior art. See, e.g., Tokai, 632 F.3d at 1369. In this case, the panel

lowered the standard for establishing the required nexus. The panel found



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that Apple established a sufficient nexus by showing copying by competitors

and industry praise for the iPhones multitouch screen. Op. at 17. Yet, as

the panel itself recognized in conjunction with its anticipation analysis, the

prior art Perski 455 patent discloses a transparent touchscreen capable of

detecting multiple touches at the same time. Id. at 9-10. Thus, simply

attributing the iPhones commercial success to the multitouch screen does

not establish the required link between the iPhones commercial success and

the merits of the invention recited in claim 10. Without additional analysis,

it is impossible to tell whether the features of the multitouch screen

allegedly responsible for the iPhones commercial success are features of

prior art multitouch screens such as the one described in Perski or whether

they are attributable to the allegedly novel features recited by claim 10. By

failing to conduct this analysis, the panels opinion significantly lowers the

standard needed to establish the nexus between a products commercial

success and the merits of the claimed invention. The panels new standard is

completely divorced from the underlying rationale for considering

commercial success in an obviousness analysis.

CONCLUSION

Motorola respectfully requests panel rehearing or rehearing en banc.



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Dated: September 6, 2013 By: s/ David A. Nelson



SULLIVAN,LLP

50 California St., 22nd Floor

San Francisco, CA 94111

Tel. (415) 875-6600

Fax (415) 875-6700

Edward J. DeFranco

Alexander Rudis

Matthew A. Traupman


SULLIVAN,LLP51 Madison Ave., 22nd Floor

New York, NY 10010

Tel. (212) 849-7000

Fax (212) 849-7100

David A. Nelson


SULLIVAN,LLP

500 W. Madison St., Suite 2450

Chicago, IL 60661

Tel. (312) 705-7400

Fax (312) 705-7401

Attorneys for Intervenor Motorola

Mobility, Inc.



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ADDENDUM



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United States Court of Appeals

for the Federal Circuit______________________

APPLE INC.,

Appellant,

v.

INTERNATIONAL TRADE COMMISSION,Appellee,

AND

MOTOROLA MOBILITY, INC.,Intervenor.

______________________

2012-1338______________________

Appeal from the United States International TradeCommission in Investigation No. 337-TA-750.

______________________

Decided: August 7, 2013______________________

E. JOSHUA ROSENKRANZ, Orrick, Herrington & Sut-

cliffe, LLP, of New York, New York, argued for the appel-

lant. With him on the brief wereMARKS.DAVIES,RACHEL

M. MCKENZIE and T.VANN PEARCE, JR., of Washington,

DC.

Case: 12-1338 Document: 74-2 Page: 1 Filed: 08/07/2013Case: 12-1338 Document: 75 Page: 26 Filed: 09/06/2013


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APPLE INC. v. ITC2

MEGAN M. VALENTINE, Attorney Advisor, Office of

General Counsel, United States International Trade

Commission, of Washington, DC, argued for appellee.With her on the brief were DOMINIC L. BIANCHI,Acting

General Counsel, and ANDREA C. CASSON, Assistant

General Counsel for Litigation.

DAVIDA.NELSON,Quinn Emanuel Urquhart & Sulli-

van LLP, of Chicago, Illinois, argued for intervenor. With

him on the brief were CHARLES K.VERHOEVEN, of San

Francisco, California. Of counsel on the brief were

EDWARD J. DEFRANCO,ALEXANDER RUDIS and MATTHEW

A.T

RAUPMAN,of New York, New York.

______________________

Before MOORE,LINN,and REYNA,Circuit Judges.

Opinion for the court filed by Circuit Judge MOORE.

Opinion concurring-in-part and dissenting-in-part filed byCircuit Judge REYNA.

MOORE,Circuit Judge.

Apple appeals from the final decision of the Interna-

tional Trade Commission (ITC) that the asserted claims ofU.S. Patent No. 7,663,607 (607 patent) are invalid andthat Motorola does not infringe the asserted claims ofU.S. Patent No. 7,812,828 (828 patent). Apple challengesthe ITCs claim construction and its determinations of

obviousness, anticipation, and noninfringement. For thefollowing reasons, we affirm-in-part, reverse-in-part, andvacate-in-part the ITCs decision and remand for furtherproceedings.

BACKGROUND

This patent case involves smartphone touchscreens.The 607 patent discloses a touch panel with a transpar-ent capacitive sensing medium that can detect multipletouches at once. 607 patent, at [57]. To achieve the



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APPLE INC. v. ITC 3

multitouch functionality, the touch panel employs amatrix of electrodes connected to circuits that measure

the change in charge that occurs as a result of pressureapplied to the screen. Id. col.5 l.27col.6 l.7. The pres-

sure-induced change occurs because the electrode rowsare in a different layer than the electrode columns. Id.col.5 l.15col.6 l.18. When a user touches the screen, thepressure applied at each intersection point causes chargeto flow between the electrodes at that node. Id. Measur-

ing circuits connected to the electrodes scan the matrixand measure the displaced charge at each node. Id. Bydetecting these changes, the touch panel can determine ifand where a user has touched the screen. Id.

The 607 patent also discloses how to make thetouchscreen transparent. It teaches constructing theelectrodes with indium tin oxide (ITO), a transparentmaterial. 607 patent, col.12 ll.3552. But simply formingthe electrodes from ITO may not render the matrix invisi-

ble because the ITO electrodes tend to be less transparentthan gaps in the electrode matrix. Id. col.14 l.60col.15l.23. To remedy this problem, the patent teaches the useof dummy ITO pads to fill in gaps in the matrix. Id.col.15 ll.824. By inserting these pads in the matrix gaps,

the matrix has the optical properties of a uniform sheet ofITO and thus becomes invisible to the user. Id.

The 828 patent discloses a method to determine if thedisplaced charge at the nodes corresponds to a fingertouching the screen. It teaches that the touch panelsoftware mathematically fit[s] an ellipse around thenodes at which the measuring circuits have detected atouch. 828 patent, figs. 1315, col.60 l.516. Performing

the fit allows the device to determine if pressure appliedto the screen constitutes a finger touch as well as trackthe movement of the finger across the touchscreen. Id. at

[57].



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APPLE INC. v. ITC4

Apple initiated proceedings in the ITC, alleging thatMotorolas smartphones and tablets infringed various

claims of the 607 and 828 patents. Apple alleged thatMotorola infringed claims 17 and 10 of the 607 patent

and claims 1, 2, 10, 11, 2426, and 29 of the 828 patent.Claim 1 of the 607 patent is representative of the assert-ed touch panel claims:

A touch panel comprising a transparent capacitive

sensing medium configured to detect multiple

touches or near touches that occur at a same time

and at distinct locations . . . wherein the trans-

parent capacitive sensing medium comprises:

a first layer having a plurality oftransparent first

conductive lines . . . ; and

a second layer spatially separated from the first

layer and having a plurality oftransparent second

conductive lines . . . each of the second conductive

lines being operatively coupled to capacitive moni-

toring circuitry;

wherein the capacitive monitoring circuitry is con-

figured to detect changes in charge coupling be-

tween the first conductive lines and the secondconductive lines.

607 patent, claim 1 (emphases added). Claim 10, also

disputed on appeal, recites a similar display arrangementand requires the touch panel to form a pixilated image.Claim 1 of the 828 patent is representative of the assert-ed claims relating to mathematically fitting an ellipse:

A method of processing input from a touch-

sensitive surface, the method comprising:

receiving at least one proximity image representing

a scan of a plurality of electrodes of the touch-

sensitive surface;



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APPLE INC. v. ITC 5

segmenting each proximity image into one or more

pixel groups that indicate significant proximity,

each pixel group representing proximity of a distin-guishable hand part or other touch object on or

near the touch-sensitive surface; and

mathematically fitting an ellipse to at least one of

the pixel groups.

828 patent, claim 1 (emphasis added). Motorola pre-

vailed in the ITC proceedings. While the ITC determinedthat an article describing SmartSkin, a prior arttouchscreen system, did not anticipate the asserted claimsof the 607 patent, it determined that SmartSkin renderedthose claims obvious. The ITC also found that U.S. Pa-tent No. 7,372,455 (Perski 455) anticipated the 607

patent claims. The ITC also found that Motorola did notinfringe the 828 patent. It construed the term mathe-matically fitting an ellipse to require the method toperform a mathematical process whereby an ellipse isactually fitted to the data. J.A. 5870. Finding that theMotorola products do not fit an ellipse to the electrode

data, the ITC determined that those products do notinfringe the asserted claims of the 828 patent.

Apple appeals. We have jurisdiction under 28 U.S.C. 1295(a)(6).

DISCUSSION

I. Standard of Review

We review the ITCs legal determinations denovo andits factual findings for substantial evidence. Crocs, Inc. v.Intl Trade Commn, 598 F.3d 1294, 1302 (Fed. Cir. 2010).Claim construction is a matter of law, which we review de

novo. Sorensen v. Intl Trade Commn, 427 F.3d 1375,

1378 (Fed. Cir. 2005). Obviousness is a question of lawbased on underlying facts. Crocs, 598 F.3d at 1308. Wereview the ITCs obviousness determination withoutdeference and its factual findings for substantial evidence.



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APPLE INC. v. ITC6

Id. Whether a prior art reference anticipates the claims isa question of fact, reviewed for substantial evidence.

Vizio, Inc. v. Intl Trade Commn, 605 F.3d 1330, 1342(Fed. Cir. 2010).

II. Anticipation of the 607 Patent: Perski 455

The ALJ found that Perski 455 anticipates the as-serted claims of the 607 patent. He found that Perski455 was 102(e) prior art despite Apples allegation of

conception prior to the filing date of the application thatissued as Perski 455. The ALJ found that the provisionalapplication to which Perski 455 claims priority, U.S.Provisional Patent Application No. 60/446,808 (Perski

808), provides written description support for the disclo-sure in Perski 455. After resolving the priority issueagainst Apple, the ALJ determined that Perski 455anticipates the 607 patent claims. The ALJ found thatPerski 455 discloses a touchscreen that can detect multi-ple touches at the same time. The ITC declined to reviewthese findings.

Apple argues that the ITC anticipation findings werein error. It contends that Perski 455 is not prior artbecause (1) Perski 808 does not disclose any way to

determine whether multiple fingers touch the screen; and(2) Perski 808 does not specifically incorporate by refer-ence the front end and digital unit aspects of U.S.Provisional Patent Application 60/406,662 (Morag) thatthe ALJ used to find claim 10 anticipated.

Even if Perski 455 is prior art, Apple argues that thereference does not disclose detect[ing] multiple touchesor near touches that occur at a same time and at distinct

locations. It contends that the algorithm disclosed inPerski 455 cannot detect multiple touches that occur atthe same time because it requires too much processing

the algorithm requires at least n*m steps to accuratelyscan all the nodes in a sensor matrix containing m rowsand n columns. Apple asserts that Motorola also failed to



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APPLE INC. v. ITC 7

present any evidence that the matrix disclosed in Perski455 can accurately detect multiple touches at the same

time because a single large touch can cause an outputsignal to be detected on more than one conductor line.

The ITC and Motorola respond that Perski 455 is pri-or art to the 607 patent. They argue that Perski 808

discloses the same sensor matrix and multitouch detec-tion algorithms as Perski 455. Regarding claim 10,Motorola argues that Perski 808 specifically incorporatesthe relevant portions of Morag.

The ITC and Motorola argue that Perski 455 disclosesall of the limitations of the 607 patent claims. They

argue that Perski 455 discloses a sensor that can detectmultiple touches at the same time. They contend that theclaims do not require a particular speed or accuracy indetecting the multiple touches, and regardless, Perski455 discloses both simple and faster detection algo-rithms. Lastly, Motorola asserts that Perski 808 disclos-es the exact scanning method that the 607 patent

discloses to detect multiple touches or near touches thatoccur at a same time and at distinct locations.

As an initial matter, we agree with the ITC and

Motorola that substantial evidence supports the ITCsdetermination that the disclosure in Perski 808 providesadequate written support for Perski 455. Perski 808provides the same multitouch scanning algorithms asPerski 455. Both disclose a sensor matrix that senses atouch by scanning the nodes of the matrix. Both disclosea simple and direct approach in which the circuitry

scans each node of the matrix, which requires at leastn*m steps for a sensor matrix that contains n columnsand m rows. Each reference also discloses the samefaster approach. Specifically, each discloses scanning

the nodes affiliated with a group of lines on one axis,which requires between two steps and n+m steps depend-

ing on the number of lines in the group. This faster



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APPLE INC. v. ITC8

approach, however, is not as accurate when detectingmultiple touches that occur simultaneously at specific

locations. To remedy this problem, both references dis-close the optimal approach of combining the two meth-

ods to achieve the right balance of speed and accuracy.Thus, substantial evidence supports the ITCs findingthat Perski 808 provides written support for Perski 455.1

We agree with Apple, however, that Perski 808 failsto incorporate by reference Morag.2 For a prior art refer-ence to anticipate a claim, the reference must discloseeach claim limitation in a single document. Advanced

Display Sys., Inc. v. Kent State Univ., 212 F.3d 1272, 1282

(Fed. Cir. 2000). The prior art document, however, mayincorporate subject matter by reference to another docu-

1 The dissent contends that Perski 808 does notprovide adequate written support for Perski 455 becausePerski 808 discloses multi-touch detection only as agoal, whereas Perski 455 enables the detection ofmultiple touches. Dissent at 89. This is incorrect.Perski 808 explains that the disclosed scanning algo-

rithms are able to detect more than one finger touch at

the same time. J.A. 16152. It discloses that thetouchscreen detector is capable of detecting multiplefinger touches simultaneously. J.A. 16151. Moreover,Perski 808 expressly states that [t]he present invention .. . enable[s] multiple and simultaneous finger inputs

directly on the display. J.A. 16149. Nothing in therecord supports the dissents view that the scanningalgorithms in Perski 808 could not detect multiple touch-es simultaneously. Indeed, the faster approach de-scribed in Perski 808 is virtually identical to the scanningalgorithm disclosed in the 607 patent.

2 Contrary to arguments by Motorola and the ITC,Apple raised this argument in its petition for ITC reviewand thus preserved it for appeal.



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APPLE INC. v. ITC 9

ment such that the incorporated material becomes part ofthe host document for the purposes of anticipation. Id.

To incorporate material by reference, the host documentmust identify with detailed particularity what specific

material it incorporates and clearly indicate where thatmaterial is found in the various documents. Id. at 128283. Whether and to what extent a host document incorpo-rates material by reference is a question of law, subject to

denovo review. Id. at 1283.

Here, Perski 808 only makes a passing reference toMorag as a method similar for detecting the presence ofa stylus. J.A. 16149. It does not affirmatively incorporate

any information. Perski 808 does not even refer to theparticular functionality in Morag that detects the pres-ence of a stylus, let alone the process that outputs touchevent information to form a pixilated image, as requiredby claim 10. Thus, Perski 808s reference to Morag fallsshort of identifying with detailed particularity the mate-

rial that discloses the pixilated image limitation inclaim 10. Because Perski 808 does not incorporate byreference the anticipatory subject matter from Morag, theITCs finding that Perski 455 anticipates claim 10 of the607 patent lacks substantial evidence.

Having resolved that Perski 455 is prior art forclaims 17 of the 607 patent, we conclude that substan-

tial evidence supports the ITCs finding that Perski 455anticipates those claims. Perski 455 discloses an embod-iment in which [a] two-dimensional sensor matrix lies ina transparent layer over an electronic display device anda finger touch at a certain location on the matrix increas-es the capacitance between the first conductor line and

the orthogonal conductor line which happens to be at orclosest to the touch position. Perski 455, col.13 ll.3240(reference numerals omitted). It discloses two matrix

scanning algorithms that are preferably able to detectmore than one finger touch at the same time. Id. col.14ll.1519.



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APPLE INC. v. ITC10

As recounted above, the number of steps required toscan the matrix depends on the number of matrix col-

umns and rows. The matrix disclosed in Perski 455 has ncolumns and m rows. Perski 455, col.13 l.65col.14 l.4.

Apple is correct that the slower method disclosed inPerski 455 requires at least n*m steps to scan the matrixbecause it scans each node one by one. Id. col.14 ll.2043.But the reference also discloses a faster approach thatrequires between two steps and a maximum of n+m

steps. Id. col.14. ll.4456. The faster approach scansgroups of nodes per step, which significantly reduces thenumber of steps required to scan the matrix. Id. Thereference also discloses a blend of the slower and faster

approaches as the optimal approach to detecting multi-ple touches. Id. col.14 l.5759.

Apple fails to provide any reason why the faster or op-timal approaches would be too slow or inaccurate to detectmultiple touches or why the disclosure of Perski 455 fails

to enable multiple touches. To the contrary, as Motorolapoints out, the scanning algorithm disclosed in the 607patent is very similar to the faster approach disclosed inPerski 455. The 607 patent discloses a sensing circuitthat detects changes in capacitance at each node along n

columns in the matrix by cycling through one row at atime for the m rows. 607 patent, col.5 l.60col.6 l.6.Moreover, the claims of the 607 patent do not expresslycontain a speed or accuracy limitation. Thus, we concludethat substantial evidence supports the ITCs finding thatPerski 455 anticipates claims 17 of the 607 patent. TheITCs decision that Perski 455 anticipates claim 10,

however, lacks substantial evidence.

III. Anticipation and Obviousness of the 607 Patent:SmartSkin

A. AnticipationMotorola argues that if we reverse the ITCs decision

that Perski 455 anticipates claim 10 of the 607 patent,



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APPLE INC. v. ITC 11

we should reverse the ITCs decision that SmartSkin doesnot anticipate claim 10. The ALJ determined that

SmartSkin does not disclose the use of transparent con-ductive lines because the references statements about

using transparent ITO conductive lines related to futurework. The ITC declined to review the ALJs finding.Motorola argues that the ALJ erred because SmartSkinsdisclosure would have enabled a skilled artisan to build atouchscreen using transparent ITO electrodes.

We agree with Apple and the ITC that substantial ev-idence supports the ITCs finding of no anticipation.SmartSkin discloses an opaque surface covered with a

grid of copper electrodes, not a transparent touchscreenbased on ITO electrodes. In the SmartSkin system, aprojector displays an image on the surface and circuitryconnected to the copper electrode grid detects when a usertouches the surface, enabling the surface to operate as atouch-screen. SmartSkin explains that its authors had

developed two working interactive surface systems basedon this technology: a table and a tablet. J.A. 13603.Figure 7 from SmartSkin shows an exemplary tablesystem:



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APPLE INC. v. ITC12

J.A. 13599. Thus, the reference explains that the authors

had not achieved a touchscreen employing transparentelectrodes.

The only discussion of transparent electrodes appearsunder the Conclusions and Directions for Future Worksection, in which the authors explain that they wereinterested in future research directions. J.A. 13603.One of those directions was the use of transparent ITOelectrodes that are mounted in front of a flat panel

display or a rear-projection screen. Id. There is nodisclosure that the authors had achieved a transparenttouch screen and the record does not indicate that it

would have been routine to do so. Nor is there any disclo-sure in SmartSkin that the matrix of ITO electrodeswould have created the transparent . . . layer[s] recited

in claim 10. Although the ITO electrodes are transparent,the 607 patent explains that, when arranged in a matrix,the patterned ITO can become quite visible therebyproducing a touchscreen with undesirable optical proper-ties. 607 patent, col.14 l.65col.15 l.3.

We do not agree with Motorola that the ITCs deter-mination regarding the disclosure of the SmartSkin

reference lacks substantial evidence. Given SmartSkinslimited disclosure, we decline to disturb the ITCs finding



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that Motorola failed to prove that SmartSkin anticipatesclaim 10 of the 607 patent.

B. Obviousness

Despite finding that SmartSkin did not anticipate the607 patent claims, the ALJ concluded that they wouldhave been obvious in light of SmartSkin in combinationwith a patent application that stemmed from theSmartSkin project, Unexamined Japanese Patent Appli-

cation No. 2002-342033A (Rekimoto). The ITC reviewedthe ALJs decision and upheld it. The ITC agreed withthe ALJs conclusion that SmartSkin provides a motiva-tion to combine the use of transparent electrodes with a

mutual capacitance sensor. The ITC also agreed with theALJs finding that Rekimoto disclosed the limitations inclaim 10 that are absent from SmartSkin.

Apple argues that the ITC erred in concluding thatSmartSkin in combination with Rekimoto rendered obvi-

ous claim 10 of the 607 patent. Apple contends that itsdesign and development story shows that a transparentmultitouch screen would not have been obvious to those ofskill in the artApples highly-skilled engineers had toextensively research and modify the copper mesh

SmartSkin design. It asserts that objective evidencereinforces that the 607 patent is not obvious. Specifically,

Apple points to evidence that the industry praised theiPhones touchscreen; that nearly every major cellphonemanufacturer, including Motorola, copied the iPhonestouchscreen; and that the iPhone was a commercialsuccess.

Apple argues that the ITC improperly employed a

hindsight analysis by asking whether the invention wasdifferent from the prior art. Second, Apple asserts thatthe ITC undervalued the ingenuity in measuring capaci-

tance changes and hiding the ITO circuitry, both of whichare absent in SmartSkin and Rekimoto. Third, Apple



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APPLE INC. v. ITC14

contends that the ITC improperly ignored Apples objec-tive evidence.

The ITC and Motorola respond that claim 10 wouldhave been obvious. They contend that claim 10 is notlimited to a particular method to measure capacitanceand does not require hiding the ITO circuitry to achieve

complete transparency. They argue that SmartSkin andRekimoto disclose every limitation of claim 10. Motorolaargues that SmartSkin defines the same problem as the607 patentcreating a multitouch surfaceand providesthe solution, including the use of transparent ITO. Itpoints to emails between Apples engineers that

SmartSkin could work for multitouch input.The ITC and Motorola argue that Apples secondary

consideration evidence is not adequate to overcome thestrong prima facie showing of obviousness. They arguethat multiple patents cover the iPhones touchscreen andthat Apple failed to prove nexus between the 607 patent-ed invention and the commercial success. They contend

that the industry praise for the iPhone related to featuresother than the multitouch screen and assert that Applepresented no evidence of copying.

We are troubled by the ITCs obviousness analysis.We have repeatedly held that evidence relating to all fourGraham factorsincluding objective evidence of second-ary considerationsmust be considered before determin-ing whether the claimed invention would have beenobvious to one of skill in the art at the time of invention.

Transocean Offshore Deepwater Drilling, Inc. v. MaerskDrilling USA, Inc., 699 F.3d 1340, 1349 (Fed. Cir. 2012);see also Mintz v. Dietz & Watson, Inc., 679 F.3d 1372,1379 (Fed. Cir. 2012) (collecting cases). Indeed, it isaxiomatic that [t]he establishment of a prima facie case .

. . is not a conclusion on the ultimate issue of obvious-ness. Transocean, 699 F.3d at 1348.



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The ITC failed to follow this precedent. Prior to evenmentioning the secondary considerations, the ALJ con-

cluded that the evidence clearly and convincingly showsthat the 607 patent is obvious in light of SmartSkin in

combination with Rekimoto. J.A. 216. That error war-rants vacating the ITCs decision. The ITC also concludedthat claim 10 was obvious and issued its own findingsregarding the first three Graham factors (rejecting someof the ALJ conclusions regarding the disclosures in the

prior art). The ITC concluded that the 607 patent claimsat issue would have been obvious in view of Smartskin incombination with Rekimoto. J.A. 529. The ITC, however,never even mentioned, much less weighed as part of the

obviousness analysis, the secondary consideration evi-dence Apple presented. It stated only that it did notreview the ALJ finding regarding secondary considera-tions. J.A. 523 n.7. This is not adequate under our law.The ultimate conclusion of obviousness is a legal conclu-sion to be reached after weighing all the evidence on bothsides.3 The ITC analyzed only the disclosure of the prior

art references and based solely on that evidence deter-mined the claims would have been obvious. We concludethat the ITCs fact findings regarding what the referencesdisclose are supported by substantial evidence. And as

the ALJ and the ITC found, the Smartskin reference isvery close and expressly recommends as Conclusions and

Directions for Future Work using transparent ITOelectrodes to build a transparent SmartSkin sensor. J.A.13603. Indeed, the reference teaches that this transpar-ent sensor could be integrated with most of todays flat

3 The dissents claim that objective evidence is thebest evidence is not correct. Dissent at 1415. In anindividual case, it is certainly possible that objective

evidence may outweigh the evidence that tends to estab-lish obviousness. It is also possible that strong evidenceunder the first three Graham factors may outweigh theobjective evidence. But there is no hierarchy of evidence.



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APPLE INC. v. ITC16

panel displays because those systems rely on an activematrix and transparent electrodes. Id. The ITC erred,

however, to the extent that it did not analyze the second-ary consideration evidence.

This error was not harmless. Secondary considera-tions evidence can establish that an invention appearing

to have been obvious in light of the prior art was not andmay be the most probative and cogent evidence in therecord. Transocean, 699 F.3d at 1349 (quoting Stratoflex,Inc. v. Aeroquip Corp., 713 F.3d 1530, 1538 (Fed. Cir.1983)). This evidence guards against the use of hindsightbecause it helps turn back the clock and place the claims

in the context that led to their invention. Mintz, 679F.3d at 1378. Apple presented compelling secondaryconsiderations evidence that may have rebutted even astrong showing under the first three Graham factors, andthe ITC failed to grapple with it.

For example, Apple presented evidence of industrypraise by business publications. Time Magazine hailed

the iPhone as the 2007 Invention of the Year in partbecause of the phones touchscreen and its multitouchcapabilities. J.A. 748384. Bloomberg Businessweekissued a 2007 article entitled Apples Magic Touch

Screen, in which it labeled the sophisticated multipointtouch screen as [t]he most impressive feature of the new

iPhone. J.A. 7826. Around the same time, Wired Maga-zine recounted that, after Apple demonstrated the iPhoneand its brilliant screen, an AT&T executive praised theiPhone as the best device I have ever seen. J.A. 8259(internal quotation marks omitted). The ITC failed toaddress this evidence and the record does not appear to

contain any contrary evidence.

Apple also presented evidence of copying. The ITC

failed to address this evidence as well.Lastly, Apple presented evidence that the iPhone has

achieved a high degree of commercial success. Apple



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presented financial information that showed that theiPhone and related products received billions in dollars of

revenue from 2008 to 2010. J.A. 14184. Apple also pre-sented evidence showing a nexus between the undisputed

commercial success of the iPhone and the patented multi-touch functionality, namely evidence that Apples compet-itors copied its touchscreen and that those in the industrypraised the iPhones multitouch functionality. The ITCdid not address any of this evidence.4

For the foregoing reasons, we vacate the ITCs deci-sion that claim 10 of the 607 patent would have beenobvious and remand the case for further proceedings. To

be clear, we conclude that the ITC fact findings regardingthe scope and content of the prior art (what the reference

4 The ITC did not weigh this evidence. After con-cluding that the claims were obvious, the ALJ did findthat there was no nexus between the commercial successof the iPhone and the multitouch functionality that is thesubject of the 607 patent. J.A. 217. We conclude thatthis fact finding is not supported by substantial evidence.

Apples evidence of industry copying of the multitouch

screen and industry praise of this feature are strongevidence of nexus. The only contrary evidence is a curso-ry statement of Motorolas technical expert. Given thestrong record evidence of nexus, this conclusory statementis insufficient to support the finding of no nexus. See

Perske v. Office of Pers. Mgmt., 25 F.3d 1014, 1020 (Fed.Cir. 1994) (holding that the Merit Systems ProtectionBoards finding lacked substantial evidence becausecontrary evidence in the record overwhelm[ed] theevidence that supported the Boards finding); EckstromIndus., Inc. v. United States, 254 F.3d 1068, 1076 (Fed.

Cir. 2001) (holding that the Department of Commercesfact finding was not supported by substantial evidencebecause, after a review of all of the evidence, the over-whelming evidence supported a contrary finding).



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APPLE INC. v. ITC18

discloses) are supported by substantial evidence. Weremand so the ITC can consider that evidence in conjunc-

tion with the evidence of secondary considerations anddetermine in the first instance whether claim 10 would

have been obvious to one of skill in the art at the time ofthe invention.

IV. Noninfringement of 828 Patent

The ALJ construed the term mathematically fitting

an ellipse to require the method to perform a mathemat-ical process whereby an ellipse is actually fitted to thedata, and, from that ellipse, various parameters can becalculated. J.A. 5870. Based on this construction, the

ALJ found that Motorolas accused products did notinfringe because they only measure data from thetouchscreen but do not actually fit an ellipse. The ITCdeclined to review the ALJs noninfrinement decision.

Apple argues that the ITC improperly limited the

term mathematically fitting an ellipse to require calcu-lation of the ellipse parameters after the ellipse has beenactually fitted. It contends that the specification re-peatedly explains that the method fits an ellipse by calcu-lating the parameters of that ellipse or by using default

parameters as a baselinethere is no prior fitting ordrawing of the ellipse. Apple asserts that it is irrelevantthat the ellipse parameters could, in theory, define othershapes.

The ITC and Motorola contend that the ALJ correctlyconstrued the limitation to require the software to actu-ally fit[] the ellipse and then calculate the parameters ofthe ellipse. They contend that the inventors amended the

claims during prosecution to overcome a reference thatobtain[ed] measured data . . . so long as the measureddata happens to be measured from an object that is in

general ellipse-like. J.A. 1192021. They argue that theplain language of the claim requires the software tomathematically fit[] an ellipse separate from calculating



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ellipse parameters. Lastly, they argue that the specifica-tion explains that the ellipse parameters are determined

by fitting an ellipse.

We agree with Apple that the ITC erroneously con-strued the mathematically fitting an ellipse limitation.The plain language requires the software to mathemati-

cally fit[] an ellipse to the data. That process refers tocalculating the mathematical parameters that define anellipse. The dependent claims further support this inter-pretation. Those claims recite the step of transmittingone or more ellipse parameters, 828 patent, claims 2, 3,which implies that the steps in the independent method

claim have already calculated the ellipse parameters.Those claims do not imply, as Motorola contends, a sepa-rate step of calculating the ellipse parameters.

The remainder of the intrinsic record is in accord withthe ordinary meaning of the claim language. The specifi-cation repeatedly explains that the mathematical fittingprocess creates the parameters of the ellipse. E.g., 828

patent, Fig. 18, col.25 l.54col.26 l.21. The prosecutionhistory is also consistent with the plain meaning ofmathematically fitting an ellipse. During prosecution,the applicants distinguished a prior art reference on the

basis that the reference obtained data that happened tobe ellipse-like, i.e., the prior art never mathematically

fit the received data. J.A. 11920 (emphasis omitted).Those statements are consistent with the ordinary mean-ing of mathematically fitting an ellipse and do notsuggest that we should limit the term to require themethod to actually fit[] [an ellipse] to the data. Thecorrect construction only requires the method to calculate

the parameters that define an ellipse. Accordingly, weconclude that the ITC erred in its construction of math-ematically fitting an ellipse.

Having adopted Apples construction, we vacate the

ITCs decision that Motorola does not infringe the 828



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APPLE INC. v. ITC20

patent claims and remand the case for further proceed-ings. We do not accept Motorolas invitation that we

render judgment of noninfringment on appeal. Contraryto Motorolas arguments, the ITC never found that the

Xoom did not infringe under any construction. Nor didApple concede noninfringment under any construction.See J.A. 133. Apples expert did testify that Motorolasnon-Xoom products did not infringe, but that testimonywas based on his acceptance of the ITCs construction of

mathematically fitting an ellipse. J.A. 3065355. Wethus vacate the ITCs decision that Motorola does notinfringe the 828 patent claims and remand the case toallow the ITC to consider in the first instance whether the

accused products infringe under the correct constructionof mathematically fitting an ellipse.

CONCLUSION

We have considered the parties remaining argumentsand find that they are without merit. For the foregoingreasons, we affirm-in-part, reverse-in-part, and vacate-in-

part the ITCs decision and remand for further proceed-ings.

AFFIRMED-IN-PART, REVERSED-IN-PART, AND

VACATED-IN-PART



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United States Court of Appeals

for the Federal Circuit______________________

APPLE INC.,

Appellant,

v.

INTERNATIONAL TRADE COMMISSION,Appellee,

AND

MOTOROLA MOBILITY, INC.,Intervenor.

______________________

2012-1338______________________

Appeal from the United States International TradeCommission in Investigation No. 337-TA-750.

______________________

REYNA,Circuit Judge, concurring-in-part and dissenting-in-part.

I.

The Smartphone has defined modern life. Be it in theworkplace, the home, airports, or entertainment venuesacross America, individuals are tethered to their

handheld devices. Not long ago, users primarily spokeinto these devices. Today, fingers tapping, grazing,pinching, or scrolling the screen is a ubiquitous image

that reflects how we conduct business, work, play, and



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APPLE INC. v. ITC2

live. The asserted patent in this case is an invention thathas propelled not just technology, but also dramatically

altered how humans across the globe interact and com-municate. It marks true innovation.

Today the majority invalidates seven claims in UnitedStates Patent No. 7,633,607 (the 607 Patent) based on

prior art that would not enable one of skill in the art atthe time of the invention. In concluding that the Perski455 prior art reference can be backdated to claim priorityto the provisional application, the majority misapplies ourrequirement that the earlier disclosure comply with 112 1. Given the critical differences between the provisional

and non-provisional disclosures, I would reverse the ITCsfinding that Perski 455 is entitled to the Perski 808priority date and remand for additional proceedings.

On the issue of obviousness, rather than adopting theITCs determination that the SmartSkin prior art refer-ence would have motivated one of skill in the art to com-bine mutual capacitance technology with transparent

screens, I would hold as a matter of law that the assertedclaims are not obvious.

I join the majority in concluding that the ITC erred in

making an obviousness determination without fullyconsidering evidence pertaining to industry praise, copy-ing, and commercial success, but I write separately todiscuss my views as to the purpose and function of objec-tive indicia of nonobviousness as indicators of innovationin the relevant field.

I join the remainder of the majority opinion, includingtreatment of arguments relating to non-infringement of

U.S. Patent No. 7,812,828, construction of the claim termmathematically fitting an ellipse, and the reasoningconcluding that neither SmartSkin nor Perski 808 antici-

pate claim 10 of the 607 Patent.



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APPLE INC. v. ITC 3

Apple characterizes its invention as the first trans-parent, full image touchscreen that accurately detects and

responds to multiple touches at once. More precisely, theasserted claims of the 607 Patent generally disclose a

touch panel having a transparent capacitive sensingmedium1 configured to detect multiple, co-occurringtouches at different locations to produce signals repre-sentative of the location of the touches. The touch panel,embodied in the marketplace as the interactive screen of

an iPhone or iPad, is comprised of two layers of transpar-ent electrically-isolated conductive lines where the twolayers are spatially separated from each other and whereconductive lines in one layer are positioned transverse to

the conductive lines in the other layer, creating an arrayof intersection points. The images included below illus-trate that the claimed detection and response to touchoccurs through a mutual capacitance circuitry measur-ing the change in voltage between a horizontal wire and avertical wire when a finger approaches a crossing point onthe screen. See 607 Patent col. 9 ll. 52-62.

1 The claimed touchscreen sensors are made out ofindium tin oxide (ITO). As implemented in the 607Patent preferred embodiments, ITO circuitry was masked

to the user through caulking ITO channels with clearinsulation. 607 Patent col. 12 l. 24 to col. 13 l. 6 and col.14 l. 60 to col. 17 l. 11.



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APPLE INC. v. ITC 5

and exact terms. New Railhead Mfg., L.L.C. v. VermeerMfg. Co., 298 F.3d 1290, 1295 (Fed. Cir. 2002) (quoting

statute). I dissent from the majoritys conclusion thatPerski 455 is prior art to the 607 Patent.

A.

The Perski inventors initially filed a provisional pa-tent applicationPerski 808on February 10, 2003. Thenon-provisional Perski 455 application was later filed on

January 15, 2004. During the 11 months between thetime the provisional and non-provisional applicationswere filed, the inventors continued to refine the invention,as reflected in the extensive revisions made in filings with

the PTO. Those revisions clearly show that in filing forPerski 455, language from the provisional was removedand new language was added. Apple emphasizes thebreadth of the inventors revisions by constructing aredline2 comparing the language of the provisional appli-cation in February 2003 and the language of the non-provisional application in January 2004:

2 The language in black remained unchanged be-tween the provisional and non-provisional filings. Thelanguage in red represents what appeared in the Febru-ary 2003 filing of the provisional application, but wasremoved in the January 2004 filing of the non-provisional

application. The language in blue represents additionsmade in the filing of the non-provisional application. Theblue language never appeared in the original provisionalapplication.



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APPLE INC. v. ITC6

J.A. 6857 (excerpted portion).

Motorola argues that Perski 455 is entitled to theFebruary 2003 priority date because the Perski 808

provisional application provides written descriptionsupport for the claimed invention. On this point, theAdministrative Law Judge agreed, finding that the Perski808 provisional application sufficiently disclosed thefinger detection method and described algorithms for usewith transparent mutual capacitance.

Apple contends that Perski 455 is not entitled to theearlier priority date because there is no clear and convinc-ing evidence that Perski 808 satisfied the written de-scription requirement. Apple submits that the provisional

application lacked enabling disclosures because it was not

until Perski 455 was filed in January 2004 that theinventors disclosed how the screen recognized multiplefinger touches.



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APPLE INC. v. ITC 7

Apple also argues that the reference is not anticipa-tory because there is testimony that the 607 Patent was

conceived of between September 2003 and November2003i.e., before the Perski 455 application.3 See J.A.

872829. The Administrative Law Judge never consid-ered Apples evidence of an earlier conception date be-cause he was satisfied that Perski 455 was entitled to theearlier priority date. J.A. 182 (declining to make anyfindings on Apples date of invention). On appeal, Apple

seeks review of the Administrative Law Judges decisionregarding the Perski 455 priority date and his failure toaddress the conception date for the 607 Patent.

B.In section 119(e)(1) of the Patent Statute, a non-

provisional utility patent application may be afforded thepriority date of a related provisional application if the twoapplications share at least one common inventor and thewritten description of the provisional application ade-quately supports the claims of the non-provisional applica-

tion. To backdate the later application with the earlierpriority date, the specification of the provisional applica-tion must contain a written description of the inventionas defined in 112 1. New Railhead Mfg., L.L.C., 298

F.3d at 1295 (discussing 35 U.S.C. 119(e)(1) and 35U.S.C. 112 1).

3 To prove an earlier conception date, Apple mustshow by clear and convincing evidence that it conceived ofthe claimed subject matter before its filing date. 35U.S.C.A. 102(g)(2); see also Mahurkar v. C.R. Bard, Inc.,79 F.3d 1572, 1577 (Fed. Cir. 1996) ([P]riority of inven-tion goes to the first party to reduce an invention to

practice unless the other party can show that it was thefirst to conceive the invention and that it exercised rea-sonable diligence in later reducing that invention topractice.).



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APPLE INC. v. ITC8

My review of the differences between the Perski 808application and the Perski 455 application leads me to

determine that the prior application does not clearlyconclude that the Perski inventors possessed the claimed

invention as of February 10, 2003. Trading Tech. Intl.,Inc. v. eSpeed, Inc., 595 F.3d 1340, 1359 (Fed. Cir. 2010)(quoting Lockwood v. Am. Airlines, 107 F.3d 1565, 1572(Fed. Cir. 1997)). In brief, Perski 455 should not havebeen awarded the earlier provisional application date

because Perski 808 does not indicate that the inventorsknew how to detect multiple touches in February 2003.

As filed, the provisional application discusses finger

detection as a goal, with the goal being to recognize allof the sensor matrix junctions that bypass signals due toexternal finger touch. J.A. 16152. Recitation of a goal,however, is not sufficient if the corresponding steps arenot disclosed. The majority credits the incomplete discus-sion of scanning the nodes of a matrix as satisfying the

written description requirement without explaining howsuch a reference would put the Perski inventors in pos-session of the method for recognizing multiple fingertouches and then generating the appropriate outputsignal. Maj. Op. 7. Indeed, the n*m algorithm dis-

cussed and heavily relied on in the majoritys rationale isno more than the scanning of nodes in a matrix where ncorresponds to columns and m corresponds to rows.4 Icannot agree that scanning a matrix is the same as teach-ing detection of multiple finger touches.

4 The fact that a certain thing may result from agiven set of circumstances is not sufficient to anticipatebecause ultimately the prior art shows what it shows.

Bettcher Indus., Inc. v. Bunzl USA, Inc., 661 F.3d 629,

639

40 (Fed. Cir. 2011) (internal citations omitted). Iconclude that n*m, by itself, is not an algorithm. Whatis missing are corresponding steps, such as those added11 months later.



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APPLE INC. v. ITC 9

In January 2004, Perski 808 did not sufficiently ex-plain how the multipoint detection would occur. J.A.

16152. It was not until Perski 455 that the inventors setforth a critical passage confirming that the initial goal

had been met and procedures for detection were nowpossible:

In fact, because it is typically necessary to

repeat the procedure for the second axis so

the number of steps is more typically 2*n*m

steps. However, this method enables the de-

tection of multiple finger touches. When an

output signal is detected on more then [sic]

one conductor that means more than one fin-ger touch is present. The junctions that are

being touched are the ones connecting the

conductor that is currently being energized

and the conductors which exhibit an output

signal.

J.A. 16610 at col. 14 ll. 35-43 (emphasis added); J.A. 6857(indicating through color designations that the outputsignal language was not present in the Perski 808 appli-

cation).

The record reflects that the 2*n*m scanning methodenabling the detection of multiple finger touches wasabsent in February 2003 and the provisional application

was limited to the simplistic n*m method which by itselfmerely describes the existence of a gridi.e., intersectionlines parallel to each other. Because the disclosure inPerski 808 would not convey to a skilled artisan that thedetection of an output signal on more than one conductorcorresponds to multiple touches, I would reverse the ITCs

finding that Perski 455 is entitled to the Perski 808priority date. I would thus remand for additional pro-

ceedings determining Apples concept

Documents

13-09-06 Motorola Petition for Rehearing (Apple ITC Appeal)