Tq Delta, LLC v. Dish Network LLC ( 2019 )

United States Court of Appeals
for the Federal Circuit
______________________
TQ DELTA, LLC,
Appellant
v.
DISH NETWORK LLC,
Appellee
______________________
2018-1799
______________________
Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. IPR2016-
01470.
______________________
Decided: July 10, 2019
______________________
RAJENDRA A. CHIPLUNKAR, McAndrews, Held & Malloy,
Ltd., Chicago, IL, argued for appellant. Also represented
by PETER J. MCANDREWS, DAVID Z. PETTY.
HEIDI LYN KEEFE, Cooley LLP, Palo Alto, CA, argued
for appellee. Also represented by JENNIFER VOLK, Reston,
VA; STEPHEN R. SMITH, Washington, DC.
______________________
Before NEWMAN, LINN, and WALLACH, Circuit Judges.
2 TQ DELTA, LLC v. DISH NETWORK LLC
WALLACH, Circuit Judge.
Appellee DISH Network (“Dish”) sought inter partes
review (“IPR”) of claims 6, 11, 16, and 20 (“the Challenged
Claims”) of Appellant TQ Delta, LLC’s (“TQ Delta”) U.S.
Patent No. 8,611,404 (“the ’404 patent”). The U.S. Patent
and Trademark Office’s Patent Trial and Appeal Board
(“PTAB”) issued a final written decision finding, inter alia,
that the Challenged Claims are unpatentable as obvious.
See DISH Network LLC. v. TQ Delta, LLC, No. IPR2016-
01470 (P.T.A.B. Feb. 7, 2018) (J.A. 1–38).
TQ Delta appeals. We have jurisdiction pursuant to 28
U.S.C. § 1295(a)(4)(A) (2012). We affirm.
BACKGROUND
Entitled “Multicarrier Transmission System with Low
Power Sleep Mode and Rapid-On Capability,” the ’404 pa-
tent relates to the field of “multicarrier transmission sys-
tems.” ’404 patent col. 1 l. 31. “Multicarrier transmission
systems provide high speed data links between communi-
cation points[ and have recently been used] . . . for commu-
nications over the local subscriber loop that connects a
telephone service subscriber to a central telephone of-
fice. . . .” 1 Id. col. 1 ll. 37–41. The ’404 patent generally
describes a method for “establishing a power management
sleep state in a multicarrier system” and efficiently waking
up a transmission system utilized on hardware, such as a
computer, from sleep mode. Id. col. 1 ll. 32–33; see id., Ab-
stract. The process involved when the transmission system
1 The ’404 patent explains that the recent applica-
tion of these systems described in the patent “are com-
monly referred to as ‘xDSL’ systems, where the ‘x’ specifies
a particular variant of DSL (digital subscriber loop) com-
munications, e.g., ADSL (asynchronous digital subscriber
loop), HDSL (High-Speed Digital Subscriber Loop), etc.”
’404 patent col. 1 ll. 42–47.
TQ DELTA, LLC v. DISH NETWORK LLC 3
is first powered up prior to sleep mode is referred to as
“full . . . initialization.” Id., Abstract. Specifically, the ’404
patent describes the invention “in the context of an ADSL
system having a first transceiver located at the site of a
customer’s premises,” referred to as the “CPE transceiver,”
as well as “a second transceiver located at a local central
telephone office” referred to as the “CO transceiver.” Id.
col. 3 ll. 63–67 (internal quotation marks omitted). The
’404 patent explains that “since the CPE transceiver and
CO transceiver are very similar, the invention [is] ex-
plained in connection with a detailed illustration of the
CPE transceiver only.” Id. col. 4 ll. 11–13. Generally, in
DSL systems, “a pair of transceivers communicate with
[each] other by dividing the overall bandwidth of the chan-
nel interconnecting the subscriber and the central office
into a large number of separate subchannels, each of lim-
ited bandwidth, operating in parallel with each other.” Id.
col. 1 ll. 48–52.
Independent claim 6 is illustrative and recites:
An apparatus comprising a transceiver operable to:
receive, in a full power mode, a plurality of
superframes, wherein the superframe com-
prises a plurality of data frames followed
by a synchronization frame;
receive, in the full power mode, a synchro-
nization signal;
transmit a message to enter into a low
power mode;
store, in a low power mode, at least one pa-
rameter associated with the full power
mode operation wherein the at least one
parameter comprises at least one of a fine
gain parameter and a bit allocation param-
eter;
4 TQ DELTA, LLC v. DISH NETWORK LLC
receive, in the low power mode, a synchro-
nization signal; and
exit from the low power and restore the full
power mode by using the at least one pa-
rameter and without needing to reinitialize
the transceiver.
Id. col. 10 ll. 29–43 (emphasis added).
DISCUSSION
TQ Delta challenges the PTAB’s claim construction on
the basis that the PTAB violated TQ Delta’s procedural
rights by relying on a new claim construction, see Appel-
lant’s Br. 25–29, and improperly construed the “without
needing to reinitialize” limitation, see id. at 29–36. TQ
Delta also argues the PTAB’s finding of obviousness is not
supported by substantial evidence. See id. at 36–64. We
address each argument in turn.
I. The Administrative Procedure Act
A. Standard of Review and Legal Standard
“IPR proceedings are formal administrative adjudica-
tions subject to the procedural requirements of the Admin-
istrative Procedure Act (‘APA’).” SAS Inst., Inc. v.
ComplementSoft, LLC., 825 F.3d 1341, 1351 (Fed. Cir.
2016), rev’d on other grounds sub nom., SAS Inst. Inc. v.
Iancu, 138 S. Ct. 1348 (2018); see APA, 60 Stat. 237 (1946)
(codified in scattered sections of 5 U.S.C. (2012)). Pursuant
to the APA, we will set aside a PTAB decision that is “arbi-
trary, capricious, an abuse of discretion, or otherwise not
in accordance with law.” 5 U.S.C. § 706(2)(A). In the con-
text of IPR proceedings, the PTAB “may not change theo-
ries in midstream without giving respondents reasonable
notice of the change and the opportunity to present argu-
ment under the new theory.” SAS, 825 F.3d at 1351 (inter-
nal quotation marks and citation omitted); see 5 U.S.C.
§ 554(b) (“Persons entitled to notice of an agency hearing
TQ DELTA, LLC v. DISH NETWORK LLC 5
shall be timely informed of . . . the matters of fact and law
asserted.”). 2 The APA and due process require “notice” and
a “fair opportunity” to be heard. Belden Inc. v. Berk-Tek
LLC, 805 F.3d 1064, 1080 (Fed. Cir. 2015).
B. The PTAB Did Not Violate TQ Delta’s APA Rights
In its decision to institute, the PTAB, after identifying
a passage in U.S. Patent No. 5,956,323 (“Bowie”) that “loop
transmission characteristics are ‘retrieved from memory
and used to enable data transmission to resume quickly by
reducing the time needed to determine loop transmission
characteristics,’” stated that “[Dish] explains that a person
[having] ordinary skill in the art [(‘PHOSITA’)] would un-
derstand this [passage] to mean that the ‘parameters are
used to restore data transmission on the loop without hav-
ing to perform the ‘handshaking’ (or initialization) process
again.” J.A. 229. In its Final Written Decision, the PTAB
interpreted the claim term “without needing to reinitialize”
as being “satisfied if any step of initialization is avoided.”
J.A. 29. TQ Delta avers that the PTAB violated its proce-
dural rights “[b]y changing its interpretation of the ‘with-
out needing to reinitialize’ limitation.” Appellant’s Br. 25.
TQ Delta also asserts that the PTAB “unfairly denied TQ
Delta any opportunity to respond [to the change in its in-
terpretation of the term] in a meaningful way.” Id. (capi-
talization modified). More specifically, TQ Delta asserts
that because neither party advocated for a new claim con-
struction and the PTAB sua sponte construed the “without
needing to reinitialize” limitation as being “satisfied if any
2 TQ Delta relies upon 35 U.S.C. § 554, which does
not exist in Title 35 of the U.S. Code. See Appellant’s Br.
25. We believe that TQ Delta intends to cite to 5 U.S.C.
§ 554, which governs administrative procedure, and that it
is clear from its arguments that TQ Delta is raising a claim
under the APA pursuant to 5 U.S.C. § 554. We, therefore,
construe this claim as an APA challenge.
6 TQ DELTA, LLC v. DISH NETWORK LLC
step of initialization is avoided,” TQ Delta was denied a
proper chance to respond to the PTAB’s understanding of
the claim term. Id. at 24. We disagree with TQ Delta.
The PTAB did not violate TQ Delta’s APA rights. The
PTAB never construed the “reinitialize” limitation in its
Decision to Institute IPR as TQ Delta contends, and it,
therefore, did not change course by construing the term in
the Final Written Decision. See id. Rather, in its Decision
to Institute, the PTAB summarized DISH’s arguments ad-
dressing how a PHOSITA would interpret the disclosures
in Bowie. J.A. 229. In the Final Written Decision, the
PTAB explained what its understanding of the limitation
was in the context of the prior art. J.A. 29 (explaining that
“[the PTAB is] still persuaded that Bowie teaches exiting
low power mode and restoring full power mode ‘without
needing to reinitialize the transceiver’ because we inter-
pret that phrase to be satisfied as long as the entire initial-
ization process is not needed”); see also HTC Corp. v.
Cellular Comm’cns Equip., LLC, 701 F. App’x 978, 981
(Fed. Cir. 2017) (explaining the PTAB “engaged in claim
construction when it proceeded to determine whether [the
prior art] disclosed [certain] limitations” because, “[d]es-
pite the heading under which the [PTAB]’s analysis took
place, [its] ruling about the requirement of separate com-
ponents was clearly a claim construction” by “establish[ing]
the scope and boundaries of the subject matter that is pa-
tented” (internal quotation marks omitted) (quoting Net-
word, LLC v. Centraal Corp., 242 F.3d 1347, 1350 (Fed. Cir.
2001))). Thus, the PTAB did not “change course” by con-
struing the limitation in the Final Written Decision be-
cause it did not construe the term in its Decision to
Institute.
Nevertheless, TQ Delta had notice of the PTAB’s un-
derstanding of the “reinitialization” limitation as it relates
to the prior art before the PTAB issued the Final Written
Decision. See J.A. 303–04 (arguing, by TQ Delta in its pa-
tent owner response, that Bowie does not disclose the
TQ DELTA, LLC v. DISH NETWORK LLC 7
disputed limitation). During the Oral Hearing, the PTAB
repeatedly asked TQ Delta about its narrow construction
of the term and explained that it disagreed with TQ Delta’s
interpretation. See, e.g., J.A. 417 (“I’m just not understand-
ing your argument that there’s more to avoiding reinitiali-
zation than storing because there’s nothing in the claim
– there’s nothing claimed beyond the storing of the param-
eter and the receiving of the sync signal that would allow
it to avoid reinitializing when it exits from low power
mode”). After the Oral Hearing, TQ Delta was given the
opportunity to respond. See Intellectual Ventures II LLC v.
Ericsson Inc., 686 F. App’x 900, 906 (Fed. Cir. 2017) (ex-
plaining that the patent owner’s APA and due process ar-
guments were meritless because it was on notice of the at-
issue construction before the final written decision issued
because it had the “opportunity to seek a sur-reply or re-
hearing” and there was a “continuous focus on [the claim
term] before and during oral arguments”); see also id. (ex-
plaining that “[t]he [PTAB] is not constrained by the par-
ties’ proposed constructions and is free to adopt its own
construction”).
While TQ Delta asserts that this case is similar to SAS,
which held that, under the APA, the PTAB cannot change
theories midstream by adopting a construction in its final
written decision that neither party requested or antici-
pated, see 825 F.3d at 1351, we disagree. In SAS, the par-
ties agreed to the construction adopted by the PTAB at
institution, but the PTAB adopted a different construction
in its final written decision, without either party discussing
or briefing this new construction. Id. at 1351. We held that
it was “difficult to imagine either party anticipating that
already-interpreted terms were actually moving targets,
and it is thus unreasonable to expect that they would have
briefed or argued, in the alternative, hypothetical construc-
tions not asserted by their opponent.” Id.
Here, however, TQ Delta had adequate notice of the
PTAB’s understanding of the disputed claim limitation, as
8 TQ DELTA, LLC v. DISH NETWORK LLC
demonstrated by TQ Delta’s statements throughout the
proceedings. For example, in its Patent Owner Response,
TQ Delta argued for a narrow interpretation that avoided
the reinitialization process and explained that Bowie
“teaches that some re-initialization does occur as part of
going from low power mode to full power mode” and, thus,
Bowie does not disclose “without needing to reinitialize the
transceiver.” J.A. 303; see J.A. 304 (explaining that “Bowie
teaches that initialization can continue to occur even after
reaching the full power mode, but before data transmission
begins”). The PTAB explained that it disagreed with this
construction at the Oral Hearing, see J.A. 414 (“[Dish]
doesn’t need it to be teaching that it goes through the entire
initialization process.”), and the PTAB questioned TQ
Delta’s narrow construction, see J.A. 415 (“So how in the
world do you avoid needing to reinitialize the transceiver
if all you’ve done is stored parameters if its true that, as
you say, there’s more to reinitialization than parameter
determination?”). TQ Delta, however, responded to the
PTAB’s interpretation that “there could be some way that
[Bowie] determines the temperature’s changed short of full
reinitialization” with “[t]here’s no expert testimony regard-
ing how a modem, other than by using initialization steps
can determine that attenuation has changed” and “to the
extent there’s some suggestion that these modems have
some other method without reinitialization to determine
that attenuation has changed, there’s nothing in the rec-
ord” that addresses this issue. J.A. 413–17. Clearly, TQ
Delta had notice of the PTAB’s understanding of the “rei-
nitialize” limitation prior to issuance of the Final Written
Decision. Because TQ Delta had notice of the claim con-
struction issue and the opportunity to be heard, the PTAB
did not violate the APA. See Hamilton Beach Brands, Inc.
v. f’real Foods, LLC, 908 F.3d 1328, 1339 (Fed. Cir. 2018)
(distinguishing SAS because the party asserting the APA
violation “had notice of the contested claim construction is-
sues and an opportunity to be heard”).
TQ DELTA, LLC v. DISH NETWORK LLC 9
II. Claim Construction
A. Standard of Review and Legal Standard
At the time of the Final Written Decision, the PTAB
gave “[a] claim . . . its broadest reasonable construction in
light of the specification of the patent in which it appears.”
37 C.F.R. § 42.100(b) (2017). A specification “includes both
the written description and the claims” of the patent. In re
Packard, 751 F.3d 1307, 1320 n.11 (Fed. Cir. 2014). “A pa-
tent’s specification, together with its prosecution history,[3]
constitutes intrinsic evidence to which the PTAB gives pri-
ority when it construes claims.” Knowles Elecs. LLC v. Cir-
rus Logic, Inc., 883 F.3d 1358, 1361−62 (Fed. Cir. 2018).
“We review the PTAB’s assessment of the intrinsic evi-
dence de novo.” Id. at 1362.
B. The PTAB Properly Construed the “Without Needing to
Reinitialize” Limitation 4
The PTAB determined that the “without needing to rei-
nitialize” limitation, in the context of comparing it to that
which is disclosed in the prior art, is “satisfied as long as
the entire initialization process is not needed.” J.A. 29.
More specifically, the PTAB explained that the limitation
“is satisfied if any step of initialization is avoided[] and
does not require that every step of initialization be
3 A patent’s prosecution history “consists of the com-
plete record of the proceedings before the [US]PTO,” which
provides “evidence of how the [US]PTO and the inventor
understood the patent.” Phillips v. AWH Corp., 415 F.3d
1303, 1317 (Fed. Cir. 2005) (en banc) (citation omitted).
4 TQ Delta concedes that, “even though the [PTAB]
construed ‘without needing to reinitialize’ in the context of
applying that limitation to the prior art . . . and not in the
‘Claim Construction’ section of the Final Written Deci-
sion . . . review of the construction . . . is proper.” Appel-
lant’s Br. 29.
10 TQ DELTA, LLC v. DISH NETWORK LLC
avoided.” J.A. 29. TQ Delta asserts that the “[PTAB]’s con-
struction conflicts with the plain meaning of the claim lan-
guage,” because “both parties agreed that the plain
meaning of [the term] is without needing to perform any
step of the initialization process.” Appellant’s Br. 30 (cap-
italization modified). We disagree with TQ Delta.
The ’404 patent’s claims and specification teach that
“reinitialize” does not require that every step of initializa-
tion is avoided, but rather that it is satisfied if any step is
avoided, thereby supporting the PTAB’s construction. We
begin our analysis with the claim language. In re Power
Integrations, Inc., 884 F.3d 1370, 1376 (Fed. Cir. 2018)
(“Claim construction must begin with the words of the
claims themselves.” (internal quotation marks, brackets,
and citation omitted)). Independent claim 6 discloses a
transceiver operable to “exit from the low power and re-
store the full power mode by using the at least one param-
eter and without needing to reinitialize the transceiver.”
’404 patent col. 10 ll. 41–43 (emphasis added). The express
language of the Challenged Claims does not recite a prior
or first initialization and therefore uses the term “reinitial-
ize” to mean repeating the same prior initialization process
over again. See, e.g., id.
The surrounding claims and broader specification pro-
vide additional support for our interpretation. See Phillips,
415 F.3d at 1314 (“[T]he claims themselves provide sub-
stantial guidance as to the meaning of particular claim
terms.”); see also Trs. of Columbia Univ. v. Symantec Corp.,
811 F.3d 1359, 1363 (Fed. Cir. 2016) (“The specification is
always highly relevant to the claim construction analysis
and is, in fact, the single best guide to the meaning of a
disputed term.” (internal quotation marks, brackets, and
citation omitted)). The Challenged Claims’ use of “re” in
“reinitialize” refers to repeating that prior initialization
process. See Wenger Mfg., Inc. v. Coating Mach. Sys., Inc.,
239 F.3d 1225, 1233 (Fed. Cir. 2001) (citing a dictionary
defining “the prefix ‘re-’ as ‘again, anew, over again’” and
TQ DELTA, LLC v. DISH NETWORK LLC 11
explaining that “in common parlance, it is customary to
speak of ‘circulating’ something once (e.g., an inter-office
memorandum), without ‘recirculating’ it a second time”).
Independent claim 1 also uses language similar to claim 6
and recites “stor[ing] . . . at least one parameter . . . com-
pris[ing] at least one of a fine gain parameter and a bit al-
location parameter,” and then “restor[ing] the full power
mode by using the at least one parameter and without
needing to reinitialize the transceiver.” ’404 patent col. 10
ll. 10–13, 16–18. The consistent use of similar language in
both independent claims indicates that following the pa-
rameters under which the DSL transceivers operate, the
“without needing to reinitialize” the full initialization pro-
cess is a parameter determined during the transceiver’s be-
ginning initialization. See id.; see also id. col. 3 ll. 25–30
(explaining that “in an already-operating installation, the
time required to initialize or re-initialize the system after
a suspension of operation in connection with power conser-
vation is generally unacceptable, since it is typically de-
sired to have the modem respond to [a] request for service
nearly instantaneously”). This beginning initialization is
required to establish stable data communication between
transceivers and indicates that not all of the transmission
parameters determined during the beginning initialization
can be stored and, thus, some form of initialization is nec-
essary to resume subsequent data transmission. See id.
col. 3 ll. 7–20. The Challenged Claims, therefore, support
the conclusion that “reinitialize” means initialization after
the transceiver’s beginning initialization and power down
into sleep mode.
Moreover, the specification provides an overview of the
transceiver initiation process. See ’404 patent col. 3 ll. 7–
20. The specification explains that transceivers, at the
time, performed “full . . . initialization” when waking from
inactivity. Id., Abstract. The specification indicates that
the purpose of the invention is to avoid full initialization
and offer a more convenient “rapid-on capability,” id. col. 3
12 TQ DELTA, LLC v. DISH NETWORK LLC
l. 33, so transceiver services resume “nearly instantane-
ously,” id. col. 3 ll. 29–30, or “within a few frames” after
periods of inactivity, id. col. 6 ll. 5–6; see id. col. 3 ll. 24–33.
The specification twice discusses avoiding reinitializations
and does not expressly require avoiding the entire initiali-
zation process. First, the ’404 patent explains that after a
transceiver is idling in sleep mode, “[t]he full transmission
and reception capabilities of the transceiver are quickly re-
stored when needed, without requiring the full (and time-
consuming) initialization.” Id., Abstract. Second, the spec-
ification explains that the transceiver “need not repeat the
initialization that was earlier required to establish the req-
uisite parameters . . . required for reliable communica-
tions.” Id. col. 8 ll. 6–12. This also refers to the full
initialization process because it describes the process from
exiting sleep mode through waking up from sleep mode.
See id. col. 8 ll. 1–12. Therefore, the “without needing to
reinitialize” limitation is “satisfied as long as the entire in-
itialization process is not needed.”
TQ Delta’s primary counterargument is unavailing.
TQ Delta asserts that “the [PTAB]’s construction improp-
erly reads the word [full] from the Abstract into the claims”
as the “claim language does not include the word ‘full.’” Ap-
pellant’s Br. 32. Additionally, TQ Delta states that “re-
gardless of the import of [full] as used in the
Abstract . . . by omitting the word ‘full’ in the claims, it is
reasonable to assume that the applicant intended for the
claim language to have a different scope than the language
found in the Abstract.” Id. As such, TQ Delta recognizes
that the specification’s use of “full” in the Abstract, ’404 pa-
tent, Abstract, and the phrase “the initialization that was
earlier required,” id. col. 8 ll. 6–7, together imply that any
form of initialization less than the “full” or “earlier” initial-
ization is sufficient to achieve the ’404 patent’s purpose of
rapid-on capability, see Appellant’s Br. 32. This language
in the patent is critical to understand the meaning of the
disputed limitation given the ’404 patent’s objective of
TQ DELTA, LLC v. DISH NETWORK LLC 13
providing rapid-on capability. See ’404 patent col. 3 ll. 31–
33; see also Netword, 242 F.3d at 1352 (“The claims are di-
rected to the invention that is described in the specifica-
tion; they do not have meaning removed from the context
from which they arose.”). Tellingly, nothing in the specifi-
cation suggests that the only way to achieve rapid-on capa-
bilities is by avoiding the initialization process entirely.
See generally ’404 patent. Thus, we do not understand the
claims as being limited to only achieving rapid-on capabil-
ities by avoiding the initialization process altogether.
III. Obviousness
A. The Relevant Prior Art
1. Bowie
Entitled “Power Conservation for [Plain Old Telephone
Service (‘POTS’)] and Modulated Data Transmission,” U.S.
Patent No. 5,956,323 (“Bowie”) discloses “a power conser-
vation system for modulated data communications.” Bowie
col. 1 ll. 4–5. Bowie describes an ADSL technology “used to
transmit wide-bandwidth modulated data over a two-wire
loop using high frequency carrier signals.” Id. col. 3 ll. 24–
25. Bowie explains that, prior to transmitting any data,
“signals are exchanged . . . to adapt the ADSL [transceiv-
ers] to the electronic characteristics of the particular wire
loop 220” over which those ADSL transceivers communi-
cate. Id. col. 4 l. 64–col. 5 l. 1. When it is in low power
mode and ready to wake up, the transceiver wakes from
low power mode and “retrieve[s] from memory” any saved
or stored “parameters” “to enable data transmission to re-
sume quickly by reducing the time needed to determine
loop transmission characteristics.” Id. col. 5 ll. 64–66. Fur-
ther, Bowie explains there are some instances where ADSL
receivers “may” need to “exchange handshaking[5]
5 “Th[e] exchange of information [over a loop be-
tween the customer premises equipment (‘CPE’) and
14 TQ DELTA, LLC v. DISH NETWORK LLC
information to establish reliable data communication,”
even after the parameters are restored. Id. col. 6 ll. 36–37;
see id. col. 5 l. 66 col. 6 l. 2. For example, “[h]andshaking
information may be required where . . . loop characteristics
have changed due, for example, to temperature-dependent
changes in loop resistance.” Id. col. 6 ll. 37–41.
2. The ADSL Standard
In 1995, the American National Standards Institute
(“ANSI”) published the “Network and Customer Installa-
tion Interfaces – Asymmetric Digital Subscriber Line
(ADSL) Metallic Interface,” known as ANSI T1.413-1995
(“the ADSL Standard”) (J.A. 1199–301). J.A. 1199. The
ADSL Standard is the first technical standard defining the
requirements for a single ADSL for interfaces between a
telecommunications network and the customer installation
in terms of their electrical characteristics and interactions.
See, e.g., J.A. 1220, 1223. 6 The ADSL Standard discloses a
set of requirements for transmissions between ADSL
transceivers, including the initialization process that all
ADSL transceivers must perform. J.A. 1220 (explaining
that “[t]he system reference model . . . illustrates the func-
tional blocks required to provide ADSL service”). During
initialization, the ADSL Standard mandates that
central office terminal (‘COT’) units] is often referred to as
handshaking. Once handshaking is completed, transmis-
sion of user data may begin.” Bowie col. 5 ll. 3–5; see id.
col. 4 l. 64–col. 5 l. 3.
6 The parties have used “ANSI T1.413” and “the
1995 ADSL Standard” interchangeably because they both
refer to the ADSL Standard. See Appellant’s Br. 10; Appel-
lee’s Br. 4. As such, we refer to the 1995 ADSL Standard
and ANSI T1.413 as the ADSL Standard unless otherwise
noted.
TQ DELTA, LLC v. DISH NETWORK LLC 15
“transceiver initialization is required . . . to establish a
communications link.” J.A. 1301.
3. Vanzieleghem
Entitled “Multi-Carrier Telecommunication System
with Power Reduction Means,” European Patent No. 0 883
269 A1 (“Vanzieleghem”) (J.A. 1188–98) discloses an ADSL
transmitter that operates according to the ADSL Standard.
J.A. 1189. Vanzieleghem explains that “[w]hen idle data
are received, the power dissipated in the transmitter is re-
duced because the symbols are then merely derived from a
few or even a single carrier (the ‘pilot tone’) instead as from
all the available carriers.” J.A. 1188. Vanzieleghem also
discloses that a “pilot tone,” or synchronization signal, is
transmitted during low power mode for the purpose of
“maintain[ing] the frequency synchronization between the
transmitter and the receiver.” J.A. 1192. Vanzieleghem
discloses that when the transmitter wakes up, it can re-
start transmitting data faster. See J.A. 1189 (explaining
that “[t]he transmission system remains thus efficient in
that it allows a fast restart”).
B. Standard of Review and Legal Standard
“We review the PTAB’s factual findings for substantial
evidence and its legal conclusions de novo.” Redline Detec-
tion, LLC v. Star Envirotech, Inc., 811 F.3d 435, 449 (Fed.
Cir. 2015) (citation omitted). “Substantial evidence is
something less than the weight of the evidence but more
than a mere scintilla of evidence,” meaning that “[i]t is such
relevant evidence as a reasonable mind might accept as ad-
equate to support a conclusion.” In re NuVasive, Inc., 842
F.3d 1376, 1379–80 (Fed. Cir. 2016) (internal quotation
marks and citations omitted). “If two inconsistent conclu-
sions may reasonably be drawn from the evidence in rec-
ord, the PTAB’s decision to favor one conclusion over the
other is the epitome of a decision that must be sustained
upon review for substantial evidence.” Elbit Sys. of Am.,
LLC v. Thales Visionix, Inc., 881 F.3d 1354, 1356 (Fed. Cir.
16 TQ DELTA, LLC v. DISH NETWORK LLC
2018) (internal quotation marks, brackets, and citation
omitted).
A patent claim is invalid “if the differences between the
claimed invention and the prior art are such that the
claimed invention as a whole would have been obvious be-
fore the effective filing date of the claimed invention to a
[PHOSITA].” 35 U.S.C. § 103 (2012). 7 Obviousness “is a
question of law based on underlying findings of fact.” In re
Gartside, 203 F.3d 1305, 1316 (Fed. Cir. 2000). Those un-
derlying findings of fact include (1) “the scope and content
of the prior art,” (2) “differences between the prior art and
the claims at issue,” (3) “the level of ordinary skill in the
pertinent art,” and (4) the presence of objective indicia of
nonobviousness such “as commercial success, long felt but
unsolved needs, failure of others,” and unexpected results.
Graham v. John Deere Co. of Kan. City, 383 U.S. 1, 17
(1966); see United States v. Adams, 383 U.S. 39, 50–52
(1966). In assessing the prior art, the PTAB also “con-
sider[s] whether a PHOSITA would have been motivated
to combine the prior art to achieve the claimed invention
and whether there would have been a reasonable expecta-
tion of success in doing so.” In re Warsaw Orthopedic, Inc.,
832 F.3d 1327, 1333 (Fed. Cir. 2016) (internal quotation
marks, brackets, and citation omitted).
C. Substantial Evidence Supports the PTAB’s Obvious-
ness Finding
The PTAB held that the Challenged Claims would have
been obvious over a combination of Bowie, the ADSL
Standard, and Vanzieleghem. J.A. 34. Specifically, the
7 Congress amended § 103 when it enacted the
Leahy-Smith America Invents Act (“AIA”). Pub. L. No.
112-29, § 3(c), 125 Stat. 284, 287 (2011). Because the ’404
patent has an effective filing date after March 16, 2013,
the AIA applies. See id. § 3(n)(1), 125 Stat. at 293.
TQ DELTA, LLC v. DISH NETWORK LLC 17
PTAB determined that “it would have been within the level
of ordinary skill in the art to select a frequency for Bowie’s
resume signal such that Vanzieleghem’s pilot tone would
not be mistaken for the resume signal.” J.A. 34. TQ Delta
asserts that “the [PTAB] erred in finding the Challenged
Claims unpatentable” because “Bowie does not teach avoid-
ing any steps of the initialization process.” Appellant’s
Br. 51 (capitalization modified). 8 Regarding motivation to
combine, TQ Delta argues Bowie teaches away from the
claimed reinitialization limitation because “Bowie and the
’404 patent are fundamentally different in how they teach
going back to transmitting data in full power mode opera-
tion after coming out of a low power mode.” Id. at 54 (in-
ternal quotation marks and citation omitted). Moreover,
TQ Delta asserts the prior art teaches away from the Chal-
lenged Claims because “using Vanzieleghem’s synchroni-
zation signal in combination with Bowie, as proposed by
[Dish], would produce an inoperative result.” Id. at 58 (in-
ternal quotation marks omitted). TQ Delta states that the
combination would be inoperative because “Van-
zieleghem’s pilot tone would cause Bowie to constantly
wake up to return to full power mode,” id. at 59 (internal
quotation marks and citation omitted), given that Van-
zieleghem’s pilot tone may have a signal pilot strength of
16 kilohertz (“kHz”), which may “falsely trigger the resume
signal detector and cause the modem of Bowie’s system to
return to full power mode, even if no resume signal is trans-
mitted,” id. at 60 (internal quotation marks and citation
omitted). We disagree with TQ Delta.
8 TQ Delta does not dispute that the prior art teaches
nearly every limitation of the Challenged Claims, see gen-
erally Appellant’s Br., and instead confines its challenge to
arguing Bowie does not teach the “without needing to rei-
nitialize” limitation, see id. at 51.
18 TQ DELTA, LLC v. DISH NETWORK LLC
Substantial evidence supports the PTAB’s determina-
tion that Bowie, in view of the ADSL Standard and Van-
zieleghem, renders obvious the Challenged Claims. First,
Bowie teaches ways to reduce power, but does not teach
that maximum power reduction is its intended purpose.
See Bowie col. 1 ll. 26–28 (explaining that “[t]he use of
POTS-compatible transmission frequencies severely limits
the maximum information carrying capacity of the wire
loop”). Bowie, however, explicitly recognizes the need for
some circuitry to remain on during low power mode to re-
ceive signals. See id. col. 5 ll. 28–30 (“Circuitry 115 to de-
tect the resume signal must remain capable of signal
detection during low power operation.”). For example,
Bowie’s specification demonstrates that in some embodi-
ments, its transceiver stores parameters before entering
into a low power mode. Id. col. 4 l. 64–col. 5 l. 4 (“Prior to
initiating transport of modulated data over the loop 220,
signals are exchanged over the loop 220 between the COT
unit 232 and the CPE unit 242 to adapt the ADSL
units . . . . This exchange of information is often referred
to as handshaking.”).
Second, while Bowie does not provide a list of the types
of parameters it stores, it does specify that the parameters
stored are determined and exchanged during initialization.
Id. col. 5 ll. 17–19 (“Upon receipt of the shut-down signal,
the COT unit 232 optionally stores in memory 117 charac-
teristics the of the loop 220 that were determined by CPE
to COT handshaking.”). These include bit allocation pa-
rameters and fine gain parameters, which the ’404 patent
uses for the same process. J.A. 565 (explaining, by Dish’s
expert, that “the 1995 ADSL Standard explicitly discloses
a ‘fine gain parameter’ and a ‘bit allocation parameter’” and
that “these [fine gain parameter and bit allocation param-
eters] are part of the ‘loop loss characteristics’ already dis-
closed in Bowie as being stored during the unit’s 232, 242
low power mode”). It would have, therefore, been obvious
to a PHOSITA for Bowie’s system to store bit allocation
TQ DELTA, LLC v. DISH NETWORK LLC 19
parameters and fine gain parameters since those are ex-
changed during initialization as taught by the ADSL
Standard. See J.A. 565–66 (testimony, by Dish’s expert,
that “Bowie would have been operating according to the
1995 ADSL Standard, and a [PHOSITA] would have looked
to that [s]tandard for guidance”), 571 (Dish’s expert ex-
plaining that Bowie’s “parameters are used to restore data
transmission on the loop without having to perform the
‘handshaking’ (or initialization) process again”).
Third, a PHOSITA would have been motivated to em-
ploy Vanzieleghem’s synchronization signal, or pilot tone,
in combination with Bowie. “[A] reference teaches away
from a combination when using it in that combination
would produce an inoperative result.” In re ICON Health
& Fitness, Inc., 496 F.3d 1374, 1382 (Fed. Cir. 2007). It is
true that Bowie discloses that “[t]he resume signal may be
an [alternating current (‘AC’)] signal at a frequency above
voiceband, such as a 16 kHz AC signal,” Bowie col. 2 ll. 27–
28, which is the same frequency that TQ Delta asserts Van-
zieleghem’s pilot tone emits and would cause a false trigger
in Bowie, see Appellant’s Br. 60. However, Bowie supports
the PTAB’s determination, when it later states that “[t]he
resume signal may be an AC signal greater than 4 kHz or
may be a multi-tone AC signal.” Id. col. 2 ll. 44–46 (empha-
ses added). Bowie, thus, does not require its resume signal
to be set to receive a 16 kHz AC signal, such that a
PHOSITA could employ Bowie’s resume signal at a differ-
ent frequency without rendering Bowie inoperable. See
Bowie col. 2 ll. 44–46. Therefore, the combination of prior
art renders obvious the Challenged Claims.
TQ Delta’s primary counterargument is unpersuasive.
TQ Delta argues that “[t]he fact that Bowie may perform
‘additional handshaking’ after returning to its full power
mode does not change the fact that . . . Bowie’s ADSL unit
always re-determines loop transmission characteristics,
i.e., performs handshaking or initialization, before return-
ing to full power mode.” Appellant’s Br. 47 (third emphasis
20 TQ DELTA, LLC v. DISH NETWORK LLC
added). However, Bowie discloses that reinitialization is
needed in some, but not all, instances. See Bowie, Abstract;
see id. col. 5 ll. 20–22 (“Likewise, upon sending the shut-
down signal, the CPE unit . . . may also optionally store the
loop characteristics that it obtained through CPE to COT
handshaking.”). Bowie explains that “[h]andshaking infor-
mation may be required where, for example, loop charac-
teristics have changed due, for example, to temperature-
dependent changes in loop resistance.” Id. col. 6 ll. 38–41
(emphasis added). This, however, does not indicate that all
steps of initialization are required. See id. During the IPR
proceedings TQ Delta conceded that “Bowie specifically
teaches that some re-initialization does occur as part of go-
ing from low power mode to full power mode.” J.A. 303. TQ
Delta’s expert similarly explained that “Bowie . . . still
ha[s] to go through the process of . . . re-determining loop
characteristics upon coming out of low power mode in order
to accomplish Bowie’s goal of reliable data communica-
tions.” J.A. 4309. Because the reinitialize limitation is sat-
isfied if any step of initialization is avoided, TQ Delta’s
interpretation of Bowie satisfies the limitation as inter-
preted by the PTAB. Thus, given TQ Delta and its expert’s
admission that Bowie discloses some steps during the rei-
nitialization process, and prior to initialization, see
J.A. 303, 4309, we find no merit in its attempt on appeal to
argue the opposite.
CONCLUSION
We have considered TQ Delta’s remaining arguments
and find them unpersuasive. Accordingly, the Final Writ-
ten Decision of the U.S. Patent and Trademark Office’s Pa-
tent Trial and Appeal Board is
AFFIRMED