Elbit Systems of America, LLC v. Thales Visionix, Inc. , 881 F.3d 1354 ( 2018 )

United States Court of Appeals
for the Federal Circuit
______________________
ELBIT SYSTEMS OF AMERICA, LLC,
Appellant
v.
THALES VISIONIX, INC.,
Appellee
______________________
2017-1355
______________________
Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. IPR2015-
01095.
______________________
Decided: February 6, 2018
______________________
RANGANATH SUDARSHAN, Covington & Burling LLP,
Washington, DC, argued for appellant. Also represented
by MATTHEW AARON KUDZIN; KURT CALIA, Redwood
Shores, CA.
DANIEL I. KONIECZNY, Tabet DiVito & Rothstein, LLC,
Chicago, IL, argued for appellee. Also represented by
MEREDITH MARTIN ADDY, ASHLEY CRETTOL INSALACO.
______________________
Before MOORE, WALLACH, and STOLL, Circuit Judges.
2 ELBIT SYS. OF AM., LLC v. THALES VISIONIX, INC.
WALLACH, Circuit Judge.
Appellant Elbit Systems of America, LLC (“Elbit”)
sought inter partes review of various claims of Appellee
Thales Visionix, Inc.’s (“Thales”) U.S. Patent No.
6,474,159 (“the ’159 patent”). The U.S. Patent and
Trademark Office’s Patent Trial and Appeal Board
(“PTAB”) issued a final written decision, see Elbit Sys. of
Am., LLC v. Thales Visionix, Inc., No. IPR2015-01095
(P.T.A.B. Oct. 14, 2016) (J.A. 1–25), finding that, inter
alia, Elbit failed to demonstrate by a preponderance of the
evidence that claims 3–5, 13, 24–28, 31, and 34 (“the
Asserted Claims”) of the ’159 patent would have been
obvious over U.S. Patent No. 4,722,601 (“McFarlane”) in
combination with two other prior art references, see
J.A. 2, 4−5.
Elbit appeals. We have jurisdiction pursuant to 28
U.S.C. § 1295(a)(4)(A) (2012). We affirm.
BACKGROUND
Entitled “Motion-Tracking,” the ’159 patent generally
relates to “tracking motion relative to a moving platform,
such as motion-base simulators, virtual environment
trainers deployed on board ships, and live vehicular
applications including helmet-mounted cueing systems
and enhanced vision or situational awareness displays.”
’159 patent, Abstract. The claimed invention purportedly
“enables the use of inertial head-tracking systems on-
board moving platforms by computing the motion of a
‘tracking’ Inertial Measurement Unit (IMU) mounted on
[a head mounted display] relative to a ‘reference’ IMU
rigidly attached to the moving platform.” Id. This elimi-
nates the need to calculate an object’s position relative to
the ground, id. col. 1 ll. 23–25, col. 6 l. 67–col. 7 l. 12,
col. 8 ll. 37–41, which improves functionality when “track-
ing on moving vehicles, where millimeter-level vehicle
position data is generally not available,” id. col. 6 ll. 65–
67; see id. col. 7 l. 40–col. 8 l. 17 (explaining the method of
ELBIT SYS. OF AM., LLC v. THALES VISIONIX, INC. 3
calculating the object’s orientation without requiring
additional calculation of its orientation relative to earth).
Dependent claim 3 is effectively representative 1 and
depends from dependent claim 2, which in turn depends
from independent claim 1. Claims 1–3 are reproduced
below:
1. A system for tracking the motion of an object
relative to a moving reference frame, comprising:
a first inertial sensor mounted on the
tracked object;
a second inertial sensor mounted on the
moving reference frame; and
an element adapted to receive signals
from said first and second inertial sensors
and configured to determine an orienta-
tion of the object relative to the moving
reference frame based on the signals re-
ceived from the first and second inertial
sensors.
2. The system of claim 1[,] in which the first and
second inertial sensors each comprises three an-
gular inertial sensors selected from the set of an-
1 Although the PTAB appears to have treated
claims 1–3 as illustrative, see J.A. 4, the parties do not
designate a claim as representative, see generally Appel-
lant’s Br.; Appellee’s Br. However, Elbit limits its sub-
stantive arguments to claim 3, see Appellant’s Br. 29–47,
and argues that “claims 4[–]5, 13, 24–28, 31, and 34 are
unpatentable for the same reasons as claim 3,” id. at 47
(capitalization omitted). Therefore, the Asserted Claims
“stand or fall” with claim 3. In re Affinity Labs of Tex.,
LLC, 856 F.3d 883, 894 n.6 (Fed. Cir. 2017) (internal
quotation marks and citation omitted).
4 ELBIT SYS. OF AM., LLC v. THALES VISIONIX, INC.
gular accelerometers, angular rate sensors, and
angular position gyroscopes.
3. The system of claim 2, in which the angular in-
ertial sensors comprise angular rate sensors, and
the orientation of the object relative to the moving
reference frame is determined by integrating a
relative angular rate signal determined from the
angular rate signals measured by the first and
second inertial sensors.
Id. col. 11 l. 50–col. 12 l. 2 (emphasis added).
DISCUSSION
I. Standard of Review and Legal Standard
“We review the PTAB’s factual findings for substan-
tial evidence and its legal conclusions de novo.” Redline
Detection, 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 adequate to support a conclusion.” In re NuVa-
sive, Inc., 842 F.3d 1376, 1379–80 (Fed. Cir. 2016) (inter-
nal quotation marks and citations omitted). If two
“inconsistent conclusions may reasonably be drawn from
the evidence in record, [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.”
In re Cree, Inc., 818 F.3d 694, 701 (Fed. Cir. 2016) (inter-
nal quotation marks and citation omitted).
A patent claim is invalid “if the differences between
the subject matter sought to be patented and the prior art
are such that the subject matter as a whole would have
been obvious at the time the invention was made to a
person having ordinary skill in the [relevant] art
ELBIT SYS. OF AM., LLC v. THALES VISIONIX, INC. 5
[(‘PHOSITA’)].” 35 U.S.C. § 103(a) (2006). 2 Obviousness
is a question of law based on underlying findings of fact.
See In re Gartside, 203 F.3d 1305, 1316 (Fed. Cir. 2000).
Those underlying 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 ordi-
nary 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. 49, 50–52 (1966). In assessing the prior
art, the PTAB also “consider[s] whether a PHOSITA
would have been motivated to combine the prior art to
achieve the claimed invention.” In re Warsaw Orthopedic,
Inc., 832 F.3d 1327, 1333 (Fed. Cir. 2016) (internal quota-
tion marks, brackets, and citation omitted).
II. Substantial Evidence Supports the PTAB’s Determina-
tion that the Asserted Claims Would Not Have Been
Obvious
This appeal concerns whether, in light of McFarlane,
the method of integrating the “relative angular rate
signal” 3 taught in claim 3 of the ’159 patent would have
2 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). However, be-
cause the application that led to the ’159 patent has never
contained (1) a claim having an effective filing date on or
after March 16, 2013, or (2) a reference under 35 U.S.C.
§§ 120, 121, or 365(c) to any patent or application that
ever contained such a claim, the pre-AIA § 103 applies.
See id. § 3(n)(1), 125 Stat. at 293.
3 Although Elbit now appears to contest the PTAB’s
lack of explicit construction of “relative angular rate
signal” in Elbit’s favor, see Appellant’s Br. 45–47, neither
6 ELBIT SYS. OF AM., LLC v. THALES VISIONIX, INC.
been obvious to a PHOSITA. Oral Arg. at 2:02–31, 13:37–
51. After determining that Elbit “ha[d] not directed [the
PTAB] to prior art of record that allegedly teaches the
‘relative angular rate signal,’” J.A. 16−17, and that there
were many “deficiencies” in the testimony of Elbit’s ex-
pert, the PTAB concluded that Elbit had not “met its
burden of proving [the Asserted Claims] unpatentable by
a preponderance of the evidence,” J.A. 18. We agree.
Substantial evidence supports the PTAB’s conclusion
of nonobviousness. It is undisputed that the method of
calculating the “relative angular rate signal” taught in the
’159 patent “is not explicitly disclosed” in the prior art
because the prior art and the Asserted Claims employ
different steps to calculate the orientation or position of a
moving object relative to a moving reference frame.
J.A. 468; see Oral Arg. at 1:19–2:01, 12:00–13:34. The
PTAB credited the testimony of Thales’s expert, see
J.A. 14−15, who explained the prior art calculates an
object’s relative orientation using a three-step method:
First, the orientation of a moving object . . . is cal-
culated with respect to an inertial reference
frame . . . using inertial sensors mounted to a
moving object (e.g., angular rate sensors . . . ).
Next, the orientation of a moving reference
frame . . . is calculated with respect to the inertial
reference frame using inertial sensors mounted to
party proffered a construction of this limitation to the
PTAB, Oral Arg. at 1:09–13, http://oralarguments.
cafc.uscourts.gov/default.aspx?fl=2017-1355.mp3 (conced-
ing, by Elbit’s attorney, that “the parties never asked for
constructions”), 11:35–45 (same by Thales’s attorney).
Therefore, this argument is waived. See Conoco, Inc. v.
Energy & Envtl. Int’l, L.C., 460 F.3d 1349, 1358 (Fed. Cir.
2006) (“[A] party may not introduce new claim construc-
tion arguments on appeal . . . .” (citation omitted)).
ELBIT SYS. OF AM., LLC v. THALES VISIONIX, INC. 7
the moving reference frame . . . . Finally, the rela-
tive orientation of the moving object with respect
to the moving platform . . . is calculated by resolv-
ing the two orientation calculations.
J.A. 2109–10. For example, McFarlane calculates direc-
tional angles to detect the orientation of the moving object
and then “appl[ies] . . . inputs from the [moving reference
frame’s] own inertial platform so that movements of the
reference frame may be off set against movements indi-
cated by the [moving object],” indicating that McFarlane
twice calculates orientation and then resolves those two
calculations to determine relative orientation. McFarlane
col. 4 ll. 14−21; see id. col. 2 ll. 37–54; see also J.A. 2138–
39 (explaining, by Thales’s expert, that a PHOSITA would
have understood McFarlane to disclose this three-step
method).
In contrast, Thales’s expert explained that the Assert-
ed Claims employ a two-step method: “the raw signal
data from the inertial sensors . . . is used to determine the
relative angular rate signal”; and “[t]hat relative angular
rate signal . . . is then used to calculate the relative orien-
tation.” J.A. 2112. This testimony is supported by the
specification of the ’159 patent, which explains that “this
system operates independently without any inputs from
the motion-base controller or the vehicle attitude[4] refer-
ence system, and without the need to ever know or meas-
ure or calculate the orientation or position of the moving
platform.” ’159 patent col. 8 ll. 37–41; see, e.g., id. col. 1
ll. 36–40 (explaining that, prior to the ’159 patent, “[t]he
inertial sensors would measure head motion relative to
the ground, while the drift-correcting range sensors would
measure head pose relative to the vehicle platform in
which the reference receivers are mounted”).
4 “Attitude” is another term for orientation.
J.A. 810 (Elbit’s Expert Decl.).
8 ELBIT SYS. OF AM., LLC v. THALES VISIONIX, INC.
Moreover, Thales’s expert explained that the two-step
method employed by the Asserted Claims “reduces both
the number of calculations required to determine relative
orientation . . . and the propagation of errors that inevita-
bly occur when using inertial sensors to track motion.”
J.A. 2112; see J.A. 2108 (“Contrary to the . . . prior
art, . . . without performing all computations related to
the Earth as a fixed reference frame, transformation
errors are minimized.”); see also ’159 patent col. 1 ll. 40–
42 (explaining that, prior to the ’159 patent, “[w]hile the
vehicle is turning or accelerating, the . . . filter would
attempt to fuse inconsistent data and produce unpredict-
able results”). This constitutes substantial evidence
showing that the prior art does not teach the Asserted
Claims’ “relative angular rate signal.”
Elbit’s expert attempts to undermine this testimony
by arguing that the two- and three-step methods are
“mathematically equivalent” and that “there is no practi-
cal difference” between them. J.A. 2034. However, the
PTAB determined that Elbit’s expert’s testimony was
“unsupported” and entitled to “little weight” because he
did not address or account for the recited relative angular
rate signal limitation “anywhere in his opinion.” J.A. 17–
18. “The PTAB [i]s entitled to weigh the credibility of the
witnesses,” Trs. of Columbia Univ. v. Illumina, Inc., 620
F. App’x 916, 922 (Fed. Cir. 2015); see Inwood Labs., Inc.
v. Ives Labs., Inc., 456 U.S. 844, 856 (1982) (“Determining
the weight and credibility of the evidence is the special
province of the trier of fact.”), and, thus, we decline to
disturb these credibility determinations here.
Elbit’s counterarguments are unpersuasive. First,
Elbit argues that the method employed by the Asserted
Claims merely reorders the steps employed by the prior
art and that “[c]hanging the order of steps does not pro-
duce a new or unexpected result.” Appellant’s Br. 32; see
id. at 31–34. However, Thales’s expert explained the
differences between the three-step method employed by
ELBIT SYS. OF AM., LLC v. THALES VISIONIX, INC. 9
the prior art and the two-step method employed by the
Asserted Claims, compare J.A. 2109–10, with J.A. 2112,
as well as the benefits of the two-step method, J.A. 2112,
and Elbit conceded that it failed to argue that substantial
evidence does not support the PTAB’s decision to credit
Thales’s explanation of the nonobviousness of the two-
step method, see Oral Arg. at 27:30–32 (acknowledging
that they “did not make . . . a legal argument” that the
PTAB’s decision is unsupported by substantial evidence),
which constitutes waiver, see Nan Ya Plastics Corp. v.
United States, 810 F.3d 1333, 1347 (Fed. Cir. 2016) (hold-
ing that failure to present arguments under the operative
legal framework “typically warrants a finding of waiver”).
Second, Elbit argues that the PTAB applied the incor-
rect legal standard because it “fail[ed] to credit the
knowledge of a [PHOSITA],” who would allegedly under-
stand that the sum of integrals principle 5 extends to
navigation equations, and, “[i]nstead, . . . required Elbit to
produce a prior art reference expressly teaching that the
sum of integrals principle applies ‘in the context of navi-
gation equations.’” Appellant’s Br. 35 (quoting J.A. 17);
see id. at 34–37. However, Elbit improperly attempts to
create legal error by selectively quoting from a portion of
one of the PTAB’s multiple findings analyzing why it
5 Pursuant to this principle, “as a matter of calcu-
lus, the sum of integrals is equal to the integral of sums.”
J.A. 2144. According to Elbit, this principle dictates that
the same result will be reached whether data is “first
integrated, then subtracted” or “first subtracted, then
integrated,” such that “the order in which these steps are
performed does not matter.” Appellant’s Br. 3. As ap-
plied to the ’159 patent, Elbit contends that the sum of
integrals principle renders the ’159 patent “no more than
a predictable variation of the prior art” and, thus, un-
patentable. Id. at 5 (citation omitted).
10 ELBIT SYS. OF AM., LLC v. THALES VISIONIX, INC.
found Elbit’s expert unpersuasive, and “[w]e will not find
legal error based upon an isolated statement stripped
from its context.” Waymo LLC v. Uber Techs., Inc., 870
F.3d 1350, 1361 (Fed. Cir. 2017) (internal quotation
marks and citation omitted). As for whether a PHOSITA
“would understand that the sum of integrals principle
applies to all equations, including navigation equations,”
Appellant’s Br. 37 (capitalization omitted); see id. at 37–
41, Elbit fails to present any evidence supporting this
contention beyond attorney argument, see id. at 37–41,
and “[a]ttorney argument is not evidence” and cannot
rebut other admitted evidence, Icon Health & Fitness, Inc.
v. Strava, Inc., 849 F.3d 1034, 1043 (Fed. Cir. 2017). In
contrast, Thales’s expert testified that a PHOSITA could
have determined that it would be “mathematically inap-
propriate or invalid” to apply the principle to the naviga-
tion equations disclosed in the ’159 patent. J.A. 2143. In
sum, substantial evidence supports the PTAB’s determi-
nation that the Asserted Claims would not have been
obvious to a PHOSITA.
CONCLUSION
We have considered Elbit’s remaining arguments and
find them unpersuasive. Thales’s request for attorney
fees is denied. Accordingly, the Final Written Decision of
the U.S. Patent and Trademark Office’s Patent Trial and
Appeal Board is
AFFIRMED
COSTS
Costs to Thales.