Tiffany and Companyv.Lazare Kaplan International Inc.

Patent Trial and Appeal Board

Apr 13, 2016

09688655 (P.T.A.B. Apr. 13, 2016)

Trials@uspto.gov Paper No. 34
571-272-7822 Entered: April 13, 2016

UNITED STATES PATENT AND TRADEMARK OFFICE
____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

TIFFANY AND COMPANY,
Petitioner,

v.

LAZARE KAPLAN INTERNATIONAL, INC.,
Patent Owner.
____________

Case IPR2015-00024
Patent 6,476,351 B1
____________

Before MICHAEL P. TIERNEY, MICHELLE R. OSINSKI, and
JEFFREY W. ABRAHAM, Administrative Patent Judges.

ABRAHAM, Administrative Patent Judge.

FINAL WRITTEN DECISION
35 U.S.C. §318 and 37 C.F.R. § 42.73

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I. INTRODUCTION
Tiffany and Company (“Petitioner”) filed a Petition seeking inter
partes review of claims 1 and 7 of U.S. Patent No. 6,476,351 B1 (Ex. 1001,
“the ’351 patent”). Paper 2 (“Pet.”). Lazare Kaplan International, Inc.
(“Patent Owner”) filed a Patent Owner Preliminary Response to the Petition.
Paper 6 (“Prelim. Resp.”). We determined that there was a reasonable
likelihood that Petitioner would prevail in challenging those claims as
unpatentable. On April 20, 2015, the Board instituted trial to review the
patentability of the challenged claims. Paper 7 (“Dec. on Inst.”).
After institution, Patent Owner filed a Patent Owner Response (Paper
12, “PO Resp.”), and Petitioner filed a Reply (Paper 24, “Reply”). An oral
hearing was held on January 21, 2016. A transcript of the hearing has been
entered into the record of the proceeding as Paper 33 (“Tr.”). Petitioner filed
a motion to exclude certain evidence submitted by Patent Owner. Paper 26.
Patent Owner filed an opposition (Paper 28) and Petitioner filed a reply to
the opposition (Paper 30). In addition, there are multiple pending motions to
seal various exhibits. Paper 13; Paper 25.
We have jurisdiction under 35 U.S.C. § 6(c). This Final Written
Decision is issued pursuant to 35 U.S.C. § 318(a) and 37 C.F.R. § 42.73.
For the reasons that follow, we determine that Petitioner has shown by a
preponderance of the evidence that claims 1 and 7 are unpatentable. In
addition, we dismiss Petitioner’s Motion to Exclude Evidence as moot and
we grant the pending Motions to Seal.

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A. Related Proceedings
Patent Owner asserted the ’351 patent in Lazare Kaplan Int’l Inc. v.
Photoscribe Techs., Inc., Case No. 1:06 CV 4005 (SDNY). Pet. 1; Paper 5.
Petitioner is not a party to that proceeding.

B. The ’351 Patent
The ’351 patent discloses a method and system for microinscribing
the surface of a gemstone using a laser. Ex. 1001, 1:14–17. The ’351 patent
shows one microinscribing apparatus in Figure 9, reproduced below.

Figure 9 shows various components of a microinscribing apparatus,
including laser 1, mirror 8 and focusing lens 10 for focusing laser energy
from the laser onto gemstone/workpiece 11, displaceable stage 50, computer
52, and cameras 28 and 32. Id. at 15:33–44, 16:13, 16:44–54.
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The ’351 patent discloses that the gemstone is held in a mounting
system that is mounted on a translatable stage. See id. at Figs. 7A–7E,
Fig. 10 element 144. The laser does not move, and therefore, to generate the
inscription, the translatable three-axis (XYZ) stage moves the workpiece in
relation to the laser beam. Id. at 16:44–48. The translatable stage is
“controlled by a computer to produce a complex marking pattern.” Id. at
2:47–48. The inscription data can be manually entered or generated by the
computer. Id. at 20:15–23. The apparatus can include an assortment of
fonts as well as custom or editable characters, such as logos and graphics.
Id. at 20:3–14, 22:66–67.
Video cameras allow an operator to view the workpiece from a
plurality of vantage points, provide for “optical feedback” of the inscription
process, and can be used to ensure the correct positioning of the workpiece.
Id. at 2:61–3:13, 16:51–17:8. “The optical feedback system also allows the
operator to design an inscription, locate the inscription on the workpiece,
verify the marking process and archive or store an image of the workpiece
and formed markings.” Id. at 3:14–17, 18:13–17, 20:52–55.
According to one embodiment of the ’351 patent, an operator inserts a
gemstone into the apparatus and aligns it so that top and side views are
displayed on video monitors. Id. at 18:31–33. The operator enters the
inscription into the computer, and verifies the inscription positioning on the
images of the gemstone displayed on the monitors. Id. at 18:33–39. Once
the inscription positioning is verified, the computer sends commands to the
inscription controller, which adjusts the position of the XYZ translatable
stage accordingly to form the inscription pattern on the gemstone. Id. at
18:39–43.
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C. Challenged Claims
Independent claims 1 and 7 are the only challenged claims, and are
reproduced below:
1. A method of microinscribing a gemstone with laser energy
from a pulse laser energy source, focused by an optical
system on the workpiece, comprising the steps of:
mounting a gemstone in a mounting system;
directing the focused laser energy onto a desired portion
of the gemstone;
imaging the gemstone from at least one vantage point;
receiving marking instructions as at least one input; and
controlling the directing of the focused laser energy
based on the marking instructions and the imaging, to
selectively generate a marking on the gemstone based
on the instructions.
7. A laser energy microinscribing system, for gemstones, said
system comprising:
a laser energy source;
a gemstone mounting system, allowing optical access to a
mounted workpiece;
an optical system for focusing laser energy from the laser
energy source, onto the gemstone to create an ablation
pattern thereon;
means for directing said focused laser energy onto a
desired portion of the gemstone, having a control
input;
an imaging system for viewing the gemstone from at
least one vantage point and obtaining image
information from the gemstone;
an input for receiving marking instructions; and
a processor for controlling said directing means based on
said marking instructions and said imaging system, to
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selectively generate a marking based on said
instructions and a predetermined program.
Ex. 1001, 26:53–65, 27:17–34.

D. References
Petitioner relies on the following references:
1. C. Paul Christensen, Fine Diamonds With Laser Machining,
PHOTONICS SPECTRA 105–110 (Nov. 1993) (“Fine Diamonds,” Ex.
1007).
2. C. Paul Christensen, Laser Processing Works on a Micro Scale,
INDUSTRIAL LASER REVIEW 1–4 (June 1994) (“ILR Article,” Ex.
1009).
3. Gresser et al., U.S. Patent No. 4,392,476, issued July 12, 1983
(“Gresser,” Ex. 1010).

E. Reviewed Grounds of Unpatentability
The Board instituted trial to review the patentability of the challenged
claims on the following grounds:
Claims
Challenged
Statutory
Basis Reference(s)
1 and 7 §103 Fine Diamonds
1 and 7 §103 Fine Diamonds and the ILR Article
1 and 7 §103 Gresser and the ILR Article

F. Level of Ordinary Skill in the Art
Petitioner’s declarant, Dr. Trumper, testifies that a person of ordinary
skill in the art “would possess at least a bachelor’s degree in mechanical,
electrical, manufacturing, or optical engineering, plus a few years of
experience in the design and control of machines involving precision
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motion, lasers, and optics.” Ex. 1003 (“Trumper Declaration”) ¶ 17. Patent
Owner and its declarant, Dr. Bokor, adopted the level of ordinary skill in the
art advanced by Dr. Trumper. PO Resp. 43–44 and n.4; Ex. 2005 (“Bokor
Declaration”) ¶ 22.
For purposes of this decision, we credit the testimony provided by the
declarants for both parties and hold that one of skill in the art would possess
at least a bachelor’s degree in mechanical, electrical, manufacturing, or
optical engineering, plus a few years of experience in the design and control
of machines involving precision motion, lasers, and optics. This level of
ordinary skill is reflected not only by the information presented by the
parties, but also by the prior art of record. Okajima v. Bourdeau, 261 F.3d
1350, 1355 (Fed. Cir. 2001) (the prior art itself can reflect the appropriate
level of ordinary skill in the art).

II. ANALYSIS
A. Claim Interpretation
In an inter partes review, claim terms in an unexpired patent are
interpreted according to their broadest reasonable construction in light of the
specification of the patent in which they appear. 37 C.F.R. § 42.100(b);
Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,766 (Aug. 14,
2012); In re Cuozzo Speed Techs., LLC, 793 F.3d 1268, 1278 (Fed. Cir.
2015), cert. granted sub nom. Cuozzo Speed Techs. LLC v. Lee, 136 S. Ct.
890 (mem.) (2016) (No. 15-446). Claim terms are given their ordinary and
customary meaning, as understood by one of ordinary skill in the art in the
context of the entire disclosure. In re Translogic Tech., Inc., 504 F.3d 1249,
1257 (Fed. Cir. 2007).
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Only terms which are in controversy need to be construed explicitly,
and then only to the extent necessary to resolve the controversy. Vivid
Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200 F.3d 795, 803 (Fed. Cir. 1999).
In our Decision on Institution, we determined that only the “controlling”
limitations required construction. Based on our review of the complete
record, we maintain our determination that no other explicit constructions
are necessary, and we address the “controlling” limitations below.

The “controlling” limitations1
Petitioner proposes that, under the broadest reasonable interpretation,
these limitations mean controlling the directing of the focused laser energy,
or controlling the directing means, “based on automated or manual feedback
derived from optical images of a gemstone before or during the laser burn
process.” Pet. 4–5; Reply 3–11. Petitioner contends that support for this
construction can be found within the Specification of the ’351 patent. Pet. 5
(citing Ex. 1001, 5:57–6:4). Petitioner also contends that this construction is
consistent with the Federal Circuit’s opinion in Lazare Kaplan International,
Inc. v. Photoscribe Technologies, Inc., 628 F.3d 1359, 1369 (Fed. Cir.

1 The “controlling” limitations refer to the following:

“controlling the directing of the focused laser energy based on
the marking instructions and the imaging, to selectively
generate a marking on the gemstone based on the instructions”
in claim 1; and

“a processor for controlling said directing means based on said
marking instructions and said imaging system, to selectively
generate a marking based on said instructions and a
predetermined program” in claim 7.

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2010), wherein the court, applying the standard in Phillips v. AWH Corp.,
415 F.3d 1303 (Fed. Cir. 2005) (en banc), held that “one of ordinary skill in
the art at the time of the invention would have understood the term
‘controlling the directing . . . based on . . . the imaging’ to include control
based on either automated or manual feedback derived from optical images
of a gemstone, before or during the laser burn process.” Pet. 5 (citing Ex.
1006, 14); Ex. 1003 ¶¶ 25–26.
In the Preliminary Response, Patent Owner stated that it did not
“agree with much of the claim constructions” provided by Petitioner, but did
not elaborate further and did not offer its own construction for these terms.
Prelim. Resp. 10–11.
In the Decision on Institution, based on our review of the
Specification of the ’351 patent, the Federal Circuit’s opinion in Lazare
Kaplan, and the Trumper Declaration, we adopted Petitioner’s proposed
construction, and construed the “controlling” limitations to include control
based on either automated or manual feedback derived from optical images
either before or during the laser inscription process. Dec. on Inst. 9.
In the Patent Owner Response, Patent Owner contends that the terms
should be construed as follows:
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PO Resp. 15.
For the reasons explained below, we determine that Petitioner has
shown by a preponderance of the evidence that claims 1 and 7 are
unpatentable under either of the proposed constructions of the “controlling”
limitations. Accordingly, we determine that it is unnecessary to resolve the
parties’ dispute over the term “controlling.” See Wellman, Inc. v. Eastman
Chem. Co., 642 F.3d 1355, 1361 (Fed. Cir. 2011) (“[C]laim terms need only
be construed ‘to the extent necessary to resolve the controversy.’”) (quoting
Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200 F.3d 795, 803 (Fed. Cir.
1999)). We provide below an analysis of the challenged claims under both
constructions.

B. Asserted Grounds of Unpatentability
1. Introduction
Petitioner asserts that claims 1 and 7 are obvious in view of Fine
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Diamonds alone, Fine Diamonds in combination with the ILR Article, and
Gresser in combination with the ILR Article. To support these asserted
grounds of unpatentability, Petitioner provides detailed explanations and the
declaration of Dr. Trumper to show how the references disclose or suggest
each claim limitation under either party’s proposed constructions of the
disputed claim terms.
In our Decision on Institution, we determined that Petitioner had made
a threshold showing that the prior art discloses or suggests all limitations of
the challenged claims, including the “controlling” limitations under
Petitioner’s proposed construction of those terms, sufficient for us to
conclude that there was a reasonable likelihood that Petitioner would prevail
in showing that the challenged claims were obvious in view of Fine
Diamonds, the ILR Article, and/or Gresser.
Our Scheduling Order in this case cautioned Patent Owner that “any
arguments for patentability not raised in the [Patent Owner Response] will
be deemed waived.” Paper 8, 3. The Board’s Trial Practice Guide,
furthermore, states that the Patent Owner Response “should identify all the
involved claims that are believed to be patentable and state the basis for that
belief.” Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,766
(Aug. 14, 2012). Furthermore, as the Board has stated, our governing statute
and Rules “clearly place some onus on the patent owner, once trial is
instituted, to address the material facts raised by the petition as jeopardizing
patentability of the challenged claims.” Johnson Health Tech Co. Ltd. v.
Icon Health & Fitness, Inc., Case IPR2013-00463, slip op. 12 (PTAB Jan.
29, 2015) (Paper 41).
In its Response, with the exception of the “controlling” limitations,
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Patent Owner does not challenge Petitioner’s arguments and evidence
demonstrating that the prior art discloses or suggests all limitations of the
challenged claims. Patent Owner’s arguments regarding the “controlling”
limitations are made only under Patent Owner’s construction of the
“controlling” limitations. See PO Resp. 35–42.
Thus, with the exception of the “controlling” limitations under Patent
Owner’s construction, the record contains the same, and now undisputed and
uncontested, arguments and evidence regarding whether the prior art
discloses or suggests the limitations of the challenged claims as it did at the
time of our Decision to Institute.
Based upon our review of the record, we agree with Petitioner’s
arguments and evidence presented in the Petition regarding whether Fine
Diamonds, the ILR Article, and Gresser, disclose or suggest the limitations
of the challenged claims. See Pet. 9–27, 55–59. Thus, we determine that the
preponderance of the evidence supports a finding that Petitioner has
demonstrated (1) that all limitations of the challenged claims are disclosed or
suggested by one or more of Fine Diamonds, the ILR Article, and/or Gresser
under Petitioner’s proposed construction of the “controlling” limitations, and
(2) that all non-“controlling” limitations of the challenged claims are
disclosed or suggested by one or more of Fine Diamonds, the ILR Article,
and/or Gresser, under Patent Owner’s proposed claim construction of the
“controlling” limitations.
In view of this, in our analysis below, we focus on Patent Owner’s
arguments presented in the Patent Owner Response, namely that (1) the
applied references fail to disclose or suggest the “controlling” limitations
recited in claims 1 and 7 under Patent Owner’s construction of the terms, (2)
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a person of ordinary skill in the art would not combine the ILR Article with
Fine Diamonds or with Gresser, and (3) objective indicia of non-obviousness
direct a finding of non-obviousness. PO Resp. 1–3; see Office Patent Trial
Practice Guide, 77 Fed. Reg. at 48,766 (“The [Patent Owner] [R]esponse
should identify all the involved claims that are believed to be patentable and
state the basis for that belief.”).

2. Claims 1 and 7 as Obvious under § 103 in view of Fine Diamonds
and the ILR Article
i. Fine Diamonds (Ex. 1007)
Fine Diamonds is an article authored by Dr. Paul Christensen
discussing laser machining of diamonds. Ex. 1007, 105. Fine Diamonds
discloses systems that combine “small laser sources with high-resolution
imaging and precision motion-control systems for sculpting, planarizing,
marking and patterning of diamond and diamond-like materials.” Id. at 106.
Fine Diamonds depicts a laser micromachining configuration in Figure 2,
which is reproduced below.
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Figure 2 shows the components of the laser micromachining system,
including a UV waveguide laser, beam delivery optics, a video camera,
viewing optics, X-Y-Z stages, and a computer and stage controller. Id. Fine
Diamonds discloses the use of CAD/CAM software not only to draw
arbitrary shapes but also to allow the computer to control the stages such that
complex shapes can be etched into the diamond substrate. Id. at 107–108.
According to Fine Diamonds, the “CAD/CAM software and the direct-write
approach to laser machining allows almost any shape to be generated in a
diamond surface.” Id. at 108. The high resolution video cameras in Fine
Diamonds allow the operator to monitor the machining process. Id.

ii. The ILR Article
The ILR Article, also authored by Dr. Christensen, discloses surface
patterning of various materials, including diamonds, on a micro scale using a
UV laser source. Ex. 1009, 2. The ILR Article describes “[d]irect write”
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techniques, which “focus the entire beam of a smaller laser on the work
surface and move the surface under the focused beam for pattern
generation.” Id. The ILR Article further discloses computer control of the
work surface motion, which allows for the production of CAD-generated
shapes. Id. A generic direct-write UV laser station is depicted in Figure 2 of
the ILR Article, which is reproduced below.

Figure 2 shows the UV laser station comprised of the laser itself in addition
to beam transfer optics, a focusing objective, X-Y stages, video camera,
viewing optics, and a computer and stage controller. Id. at 2–3. According
to the ILR Article:
CAD/CAM interface simplifies motion programming and
allows electronic control of processing speed, exposure
parameters, and other features. This simplifies set-up,
accelerates process development, and improves flexibility of the
system in small batch processing. Video images generated by
the viewing system can be digitized and processed to derive
information used for autofocus, registration, orientation, edge-
following, and other operations that make the laser tool easier
and faster to use.
Id. at 3.
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iii. The “controlling” limitations
Petitioner argues that, even under a construction of the “controlling”
limitations that requires electronic image information to be fed back from
the imaging step or system and combined with marking instructions to
generate a marking on the gemstone, claims 1 and 7 are unpatentable as
obvious in view of Fine Diamonds in combination with the ILR Article.
Reply 12–15; Pet. 5, n.1, 59–60.
Petitioner contends that Fine Diamonds explicitly states that “optical
tools combine the small laser sources with high-resolution imaging and
precision motion-controlled systems for sculpting, planarizing, marking and
patterning of diamond and diamond-like materials.” Reply 12 (quoting Ex.
1007, 2) (emphasis in Reply).
Petitioner further contends that the ILR Article discloses video images
that are digitized and processed, which constitute electronic image
information. Id. at 13 (citing Ex. 1009, 3). Petitioner argues that the ILR
article teaches that electronic image information is fed back to the computer
stage/controller because the ILR Article teaches that the digitized images are
processed to “derive information used for autofocus, registration, and
orientation.” Id.
Petitioner takes the position that the ILR Article’s reference to a
CAD/CAM interface that “simplifies motion programming” corresponds to
the marking instructions recited in the “controlling” limitations. Id. In view
of this, Petitioner argues that:
The ILR Article, thus discloses the marking instructions (e.g.,
CAD/CAM programs of the motion-controlled systems) and the
electronic imaging (i.e., high-resolution imaging) could be
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automatically combined for “electronic control of processing speed,
exposure parameters, and other features” during “set-up” or in process
“for autofocus, registration, orientation, edge-following, and other
operations that make the laser tool easier and faster to use.”
Id. at 13–14 (emphasis omitted).
Patent Owner argues that the quoted language in Fine Diamonds
merely indicates that the optical tools of Fine Diamonds “use lasers,
imaging, and motion-controlled systems, as shown in Fig. 2 of Fine
Diamonds.” PO Resp. 36. Patent Owner contends that Figure 2 of Fine
Diamonds does not show a connection between the video camera and the
computer/stage controller, and without a connection between the camera and
computer, “there is no feedback of the electronic image information and no
combination of the marking instructions and electronic imaging information
to generate a marking.” Id. at 37 (citing Ex. 2005 ¶ 37).
Patent Owner further argues that the ILR Article does not disclose the
“controlling” limitations and therefore does not cure the deficiencies of Fine
Diamonds. Id. at 39–42. In particular, Patent Owner contends that Figure 2
in the ILR Article is essentially the same as Figure 2 in Fine Diamonds,
showing no connection from the video camera to the computer and stage
controller. Id. at 38–39. Patent Owner thus argues that the video images are
not fed back to the computer and stage controller, and cannot be combined
with marking instructions to generate a marking. Id. at 40. Patent Owner
further argues that the ILR Article discloses only that video images can be
processed to derive information used for certain operations, and is silent as
to how to perform image processing or what performs the image processing.
Id. at 39.
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Referring specifically to the statement in the ILR Article regarding
video images being digitized and used for autofocus, registration,
orientation, or edge-following, Patent Owner argues that “[n]one of the
operations enumerated by this sentence discloses, or even suggests, ‘marking
instructions’ and electronic image information combined to generate a
marking.” Id. at 40, 42. According to Patent Owner, autofocusing would
occur independently of the marking instructions, and registration and
orientation refer to setting up a workpiece and selecting a starting point for
the laser, respectively, and do not constitute a disclosure of an image fed
back to a processor and combined with marking instructions. Id. at 40–41.
Patent Owner further argues that “edge-following” does not have a
commonly understood meaning in the relevant art, and that even if a person
of ordinary skill in the art did understand that term to suggest “employing an
image to perform some type of edge-following for laser inscription of a
gemstone, the ILR Article does not disclose or suggest feedback of the
digitized image combined with ‘marking instructions’ to generate a
marking.” Id. at 41–42 (citing Ex. 2005 ¶ 83).
Upon consideration of the evidence and arguments presented by
Patent Owner and Petitioner, we conclude that Petitioner has shown by a
preponderance of the evidence that the ILR Article discloses the
“controlling” limitations under Patent Owner’s construction.
Although Figure 2 of the ILR Article does not depict a physical
connection between the video camera and the camera and stage controller,
we are persuaded that the ILR Article discloses or suggests that the video
images in the ILR Article (i.e., the electronic image information) are fed
back to the computer. During the Oral Hearing, Patent Owner indicated that
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the term “fed back” is broad and does not necessarily require a physical
connection between the camera and the computer. Tr. 39:4–40:25 (arguing
that the important aspect of the claim is that the image taken on the imaging
device is itself transferred to the computer, as opposed to only calculations
manually derived from that image being manually entered into the
computer).
The purpose of the laser tool in the ILR Article is to provide surface
patterning and ablations of diamonds with a UV laser source. Ex. 1009, 2.
The ILR Article depicts a computer in Figure 2, and refers to the
“[i]ntegration of a computer into the direct-write system.” Id. at 3. The ILR
Article further discloses that “[v]ideo images generated by the viewing
system can be digitized and processed to derive information used for”
various “operations that make the laser tool easier and faster to use.” Id.
We credit the testimony of Dr. Trumper that “the ILR Article makes clear
that the computer digitizes and processes the optical images of a gemstone,
and the automated feedback derived from the images is used for controlling
the directing of the focused laser energy,” as it is consistent with the ILR
Article’s disclosure of integrating a computer into the diamond ablation
system. Ex. 1003 ¶ 56. Thus, despite the fact that the ILR Article does not
expressly state that the computer is used to digitize and process the video
images, it would have been obvious to a person of ordinary skill in the art
that integrating the computer into the direct write system would include
using the computer (shown in Fig. 2) to digitize the video images generated
by the viewing system and process them to conduct the various operations
that make the laser tool easier to use. KSR Int’l Co. v. Teleflex Inc., 550 US
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398, 421 (2007) (“A person of ordinary skill is also a person of ordinary
creativity, not an automaton.”).
Furthermore, as noted above, the ILR Article teaches that “[c]omputer
control of work surfaces allows direct production of CAD-generated shapes”
on diamond surfaces. Ex. 1009, 2. Petitioner contends, and Patent Owner
does not contest, that the CAD/CAM programs correspond to the required
“marking instructions.” Pet. 25–26 (citing Ex. 1009, 2); Ex. 1003 ¶ 56 (Dr.
Trumper stating “marking instructions (e.g., motion programming of the
CAD/CAM program)”). Additionally, the ILR Article discloses that the
“CAD/CAM interface . . . allows electronic control of processing speed,
exposure parameters, and other features” of the laser tool that “simplifies
set-up [and] accelerates process development.” Ex. 1009, 3. As Petitioner
points out, the next sentence in the very same paragraph discusses digitizing
and processing the video images. Reply 13. In view of this, we determine
that a person of ordinary skill in the art, reviewing the ILR Article, would
have understood the ILR Article to disclose or suggest using the computer to
control and operate the laser tool to generate shapes based on a combination
of two inputs, the CAD/CAM programs (i.e., “marking instructions”) and
images fed back to the computer and digitized therein (i.e., electronic image
information), which “simplif[y] set-up [and] accelerate[] process
development” and “make the laser tool easier to use.”2 Ex. 1009, 3; Reply
13; Ex. 1003 ¶ 55.

2 This is especially true considering Patent Owner’s argument that the
“combined” language in the controlling limitations is not limited to
overlaying marking instructions on an image. Tr. 48:15–22.
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We are not persuaded by Patent Owner’s arguments regarding
autofocus, registration, orientation and edge-following, as they relate to the
digitized and processed images. See PO Resp. 40–42. Nor do we credit Dr.
Bokor’s testimony in this regard. See Ex. 2005 ¶¶ 78–82. First, we note that
the ILR Article is not limited to those operations, as it refers generically to
“other operations.” Ex. 1009, 3. Next, Patent Owner and Dr. Bokor’s
contentions that none of these operations disclose or suggest marking
instructions and image information combined to generate a marking ignores
the ILR Article’s disclosure, in the very same paragraph, of the use of
CAD/CAM programming to simplify motion programming and allow
electronic control of certain aspects of the laser tool. PO Resp. 40–42; Ex.
2005 ¶¶ 78–82; Reply 13–14.
Finally, Patent Owner and Dr. Bokor acknowledge that a person of
ordinary skill in the art would interpret the terms registration and orientation
“as occurring at setup, for example, by moving a workpiece under a laser,
and selecting a starting point for the laser to begin firing, based on
information derived from a digitized workpiece image.”3 PO Resp. 41; Ex.
2005 ¶ 80 (emphasis added). Thus, based on Patent Owner’s own
arguments, and in view of its own declarant’s testimony, the ILR Article not
only expressly teaches the use of a CAD/CAM interface (i.e., marking
instructions) to simplify “set-up,” but also teaches the use of digitized video
images (i.e., electronic image information) to derive information used for
operations associated with set-up (registration and orientation). Therefore,

3 We note that this statement undermines Patent Owner’s earlier argument
that the “ILR Article is silent regarding setting up the substrate for
machining and does not disclose any technique for determining a starting
point or initial focus.” PO Resp. 39.
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contrary to Patent Owner’s arguments, we determine that a person of
ordinary skill in the art would have understood that the ILR Article discloses
or suggests that images are fed back to a processor and combined with
marking instructions for, at the very least, setting up the laser inscription
machine.
Thus, although Patent Owner also argues that its proposed
construction of the controlling limitations “distinguishes over systems that
use gemstone images for setup—independent of ‘marking instructions’” (PO
Resp. 29 (emphasis added)), the ILR Article discloses or suggests using
images for set up in combination with marking instructions. Moreover, as
Patent Owner points out, the Federal Circuit stated that the “controlling”
limitations include “control based on . . . feedback derived from optical
images of a gemstone, before or during the laser burn process.” Ex. 1006,
14 (emphasis added); PO Resp. 31–32. We note that Patent Owner argues
that its proposed construction is consistent with the 2010 Federal Circuit
opinion. PO Resp. 29–32.
For all of the reasons discussed above, we determine that the ILR
Article discloses or suggests the “controlling” limitations of claims 1 and 7.
Petitioner has identified sufficiently where the additional limitations of
claims 1 and 7 are present in Fine Diamonds and the ILR Article, and Patent
Owner does not argue otherwise. We, therefore, conclude that Petitioner has
shown by a preponderance of the evidence that Fine Diamonds and the ILR
article disclose or suggest all elements of claims 1 and 7.

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iv. The Combination of Fine Diamonds with the ILR Article
Petitioner argues that it would have been obvious to a person of
ordinary skill in the art to combine the teachings of the ILR Article with the
teachings of Fine Diamonds because both references relate to using similar
UV laser micromachining systems in the same way to yield predictable
results. Pet. 24; Ex. 1003 ¶¶ 51–57. In particular, Petitioner argues that a
person of ordinary skill in the art would have been motivated to
combine the features taught by the ILR Article relating to
automated control of the focused laser energy, including use of
translatable stages to assist with that purpose, based on both the
programmed marking instructions and automated feedback
using digitized images from video images of the relevant
portion of a gemstone, into the method and system taught by
Fine Diamonds, for example, to “simplif[y] set-up, accelerate[]
process development, and improve[] flexibility of the system”
and “make the laser tool easier and faster to use.”
Pet. 24 (citing Ex. 1009, 2; Ex. 1003 ¶¶ 51–57). Petitioner also notes that
Dr. Christensen was the author of both articles. Id.
In response, Patent Owner contends that the statements by Petitioner’s
declarant, Dr. Trumper, regarding the predictability of combining Fine
Diamonds with the ILR Article are “without basis” because “there is no
evidence of an actual system combining the features of Fine Diamonds and
the ILR Article.” PO Resp. 43. Patent Owner further contends that the ILR
Article does not provide any “technique or guidance” that would allow a
person of ordinary skill in the art to “implement the disclosed image
processing of the ILR Article in Fine Diamonds.” Id. at 44. In support of its
arguments, Patent Owner directs us to testimony from Dr. Christensen
allegedly describing that his attempt at “implementing the image processing
set forth in the ILR Article” was not successful. Id. at 44–45 (citing Ex.
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2011, 33:15–35:11, 38:24–39:15, 53:3–6). Based on this, Patent Owner
takes the position that combining the ILR Article with Fine Diamonds would
not have yielded predictable results and would have been beyond the skill of
a person of ordinary skill in the art. Id. at 45.4
As explained below, upon consideration of the evidence in this record,
we determine that Petitioner has demonstrated, by a preponderance of the
evidence, that combining the technical disclosures of the ILR Article and
Fine Diamonds would be merely a predictable use of prior art elements
according to their established functions—an obvious improvement. See
KSR, 550 U.S. at 417 (“[I]f a technique has been used to improve one
device, and a person of ordinary skill in the art would recognize that it would
improve similar devices in the same way, using the technique is obvious
unless its actual application is beyond [his or her] skill.”).
Dr. Trumper testifies that both articles are authored by Dr.
Christensen, describe laser micromachining systems, and share a similar, if
not identical, configuration. Ex. 1003 ¶ 54. Dr. Trumper also testifies that
the ILR Article “makes clear that the computer digitizes and processes the
optical images of a gemstone and the automated feedback derived from the
images is used for controlling the directing of the focused laser energy.” Id.
¶ 56. Further, as Petitioner and Dr. Trumper note, the ILR Article expressly
teaches that use of a CAD/CAM interface (i.e., “marking instructions”) and
digitized images (i.e., “electronic image information”) “simplifies set-up,
accelerates process development, and improves flexibility of the of the
system,” and also “make[s] the laser tool easier and faster to use.” Ex. 1009,

4 Patent Owner emphasizes that “Dr. Christensen’s testimony is being only
provided for defining the level of skill.” PO Resp. 47.
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3. We credit Dr. Trumper’s testimony regarding the use of the computer in
ILR to digitize and process images as it is consistent with the disclosure in
the ILR Article of integrating a computer into the diamond ablation system.
Id.; Ex. 1003 ¶ 56. We also credit Dr. Trumper’s testimony that it would
have been obvious to a person of ordinary skill in the art to combine Fine
Diamonds and the ILR Article in view of the similarities between the
configurations and uses of the UV laser micromachining machines in the
two references (see, e.g., Figure 2 in Fine Diamonds and the IRL Article)
and the potential advantages attributed to digitizing and processing images
in the ILR Article. Ex. 1009, 3; Ex. 1003 ¶ 54–55; Ex. 1007, 2–3. Thus, the
evidence presented by Petitioner demonstrates sufficiently that the ILR
Article discloses an improvement for a laser micromachining system, and
that a person of ordinary skill in the art would recognize that it would
improve similar devices, such as the laser micromachining system disclosed
in Fine Diamonds, in the same way.
We are not persuaded by Patent Owner’s argument that combining
Fine Diamonds with the ILR Article would have been beyond the level of
skill held by a person of ordinary skill in the art. Dr. Christensen’s
testimony is directed to “the first work [that] was done in connection with a
sale to a company” in the early 1990s. Ex. 2011, 35:14–19. According to
Dr. Christensen, he demonstrated the device to the customer who was not
“too satisfied with the robustness of it; it was having some difficulty
capturing the fiducials in every part because there was part to part variation
in these sorts of things.” Id. at 39:2–10. Ultimately the customer refused to
accept the product based on its performance. Id. at 39:12–15. As Petitioner
points out, neither Dr. Christensen’s testimony nor Patent Owner explains
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the standards imposed by the customer or why failing to meet this particular
customer’s satisfaction demonstrates that combining Fine Diamonds with
the ILR Article would have been beyond the level of skill in the art.
In addition to reiterating Dr. Christensen’s testimony, which we
address above, Dr. Bokor characterizes the disclosure of the ILR Article as
“thin,” stating that it “does not describe what the enumerated operations are,
much less provide any technique or guidance that a POSITA could follow to
implement the enumerated operations in combination with Fine Diamonds.”
Ex. 2005 ¶ 85. In preceding paragraphs of his declaration, however, Dr.
Bokor testifies that a person of ordinary skill in the art “may understand
[autofocus] as a computer analyzing an image and deriving information for
adjustments to bring the image into focus,” (id. ¶ 79), and that a person of
ordinary skill in the art would interpret registration and orientation as
“occurring at setup, for example, by moving a workpiece under a laser, and
selecting a starting point for the laser to begin firing, based on information
derived from a digitized workpiece image” (id. ¶ 80).
We thus determine that Patent Owner has not persuaded us that
combining the teachings of the ILR Article with Fine Diamonds would have
been beyond the level of an ordinary skilled artisan. See Leapfrog Enters.,
Inc. v. Fisher-Price, Inc., 485 F.3d 1157, 1162 (Fed. Cir. 2007) (citing KSR,
550 U.S. at 418).
Nor are we persuaded by Patent Owner’s arguments that Dr.
Trumper’s testimony is undermined by the fact that “there is no evidence of
an actual system containing all features of Fine Diamonds and the ILR
Article.” PO Resp. 43. An obviousness challenge, by nature, is premised on
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the lack of a single device or reference that discloses, either inherently or
expressly, all of the features of the claimed invention. 35 U.S.C. § 103.
For the foregoing reasons, we credit the testimony of Dr. Trumper that
it would have been obvious to a person of ordinary skill in the art to combine
the teachings of Fine Diamonds and the ILR Article (Ex. 1003 ¶¶ 54–56)
over Dr. Bokor’s testimony that a person of ordinary skill in the art would
not combine the teachings from these references (Ex. 2005 ¶¶ 85–90). We
are persuaded that Petitioner has articulated a reason with rational
underpinning why one with ordinary skill in the art would have combined
the ILR Article and Fine Diamonds as indicated in the Petition, and we are
persuaded that Petitioner’s reason to combine these references is supported
by a preponderance of evidence.

3. Claims 1 and 7 as Obvious under 35 U.S.C. § 103 in view of Gresser
and the ILR Article
i. Introduction
Petitioner contends that Gresser in combination with the ILR Article
renders obvious claims 1 and 7 of the ’351 patent. Pet. 55–59. In the
Petition, Petitioner argues that Gresser discloses all of the limitations of
claims 1 and 7 with the exception of the “controlling” limitations. Id. For
this ground, Petitioner relies on the ILR Article as disclosing the
“controlling” limitations. Id.
In the Preliminary Response, Patent Owner argued that Gresser does
not disclose “imaging” or an “imaging system” (“the imaging limitations”)
as required in claims 1 and 7, respectively, and that Petitioner did not
contend that the ILR Article cured this deficiency. Prelim. Resp. 24–25.
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Patent Owner noted that the Patent Office already considered the question of
whether Gresser disclosed the imaging limitations during prosecution of the
application that ultimately led to the ’351 patent, and determined that
Gresser did not disclose these limitations. Id. Patent Owner thus requested
that the Board exercise its discretion under 35 U.S.C. § 325(d) and decline to
institute on this ground. Id.
In our Decision on Institution, we decided not to revisit the question
of whether Gresser discloses the imaging limitations in claims 1 and 7
pursuant to 35 U.S.C. § 325. Dec. on Inst. 20–21. We also determined that
although Petitioner did not expressly argue that the ILR Article discloses or
suggests the imaging limitations in claims 1 and 7, the ILR Article does
disclose these limitations, based on similarities between the ILR Article and
Fine Diamonds and Petitioner’s arguments that Fine Diamonds discloses the
imaging limitations. Id. at 22.
In its Response, Patent Owner does not dispute our determination that
the ILR Article discloses the imaging limitations of claims 1 and 7. As
discussed above, we consider any arguments not raised in the Response to be
waived. Accordingly, in the analysis below, we focus on Patent Owner’s
arguments raised in the Patent Owner Response, namely that the ILR Article
fails to disclose or suggest the “controlling” limitations under Patent
Owner’s construction and that a person of ordinary skill in the art would not
combine the ILR Article with Gresser. See PO Resp. 47–50.

ii. Gresser
Gresser discloses a method and apparatus for inscribing precious
stones, such as diamonds. Ex. 1010, 2:13–16. Gresser depicts one
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embodiment of its inscription system in Figure 1, which is reproduced
below.

Figure 1 of Gresser shows laser beam generation system 2, table
system 7 supporting diamond 5, a computer control system 8 that controls
the table system and laser generator, and microscopes 68 and 101 that
provide direct viewing of the diamond from the front and above,
respectively. Ex. 1010, 2:13–68, 4:46–51.

iii. The “controlling” limitations
In support of this asserted ground of unpatentability, Petitioner relies
upon the same arguments and evidence discussed above to establish that the
ILR Article discloses the “controlling” limitations, and Patent Owner largely
relies upon the same arguments and evidence to rebut Petitioner’s
contentions. Reply 18; PO Resp. 47–48. The only additional argument
presented with regard to the combination of Gresser and the ILR Article is
Patent Owner’s contention that “[e]ven if Gresser’s measurements were
obtained using the ILR Article’s video camera, those measurements would
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not meet the claimed controlling” limitations because modifying Gresser by
the ILR Article to include a video camera “still would not render obvious
feedback of the captured image information.” PO Resp. 48. Patent Owner
equates the combination of Gresser and the ILR Article to the combination
of Gresser and another prior art reference, Ehrenwald,5 considered by the
examiner during prosecution of the application leading to the ’351 patent.
We are not persuaded by Patent Owner’s argument. As Petitioner
notes, Ehrenwald is not a reference at issue in this proceeding, and Patent
Owner has not explained adequately why the combination of the ILR Article
and Gresser would be “no different” than the combination of Gresser and
Ehrenwald. See Reply 18. We note that the basis for Petitioner’s argument
that the ILR Article discloses the “controlling” limitations is not simply
incorporating the video cameras disclosed in the ILR Article into Gresser, as
Petitioner additionally relies on the ILR Article’s disclosure of the
combination of a CAD/CAM interface and information derived from
digitizing and processing video images to direct the focused laser energy.
Pet. 57–58 (referring to the combination of motion programming and video
images generated by the viewing system); Reply 18. Furthermore, for the
reasons discussed above, we agree with Petitioner that the ILR Article
discloses or suggests the “controlling” limitations in view of the ILR
Article’s combination of CAD/CAM programming and video images which
are digitized and processed (i.e., fed back to a computer) to provide
information used to simplify and speed up the operation the laser tool.
Reply 12–15.

5 Ehrenwald et al., U.S. Patent No. 4,467,172, issued Aug. 21, 1984.
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Accordingly, we determine that Petitioner has demonstrated by a
preponderance of the evidence that the ILR Article discloses the
“controlling” limitations of claims 1 and 7. Petitioner has identified
sufficiently where the additional limitations of claims 1 and 7 are present in
Gresser and the ILR Article and Patent Owner does not argue otherwise.
We, therefore, conclude that Petitioner has shown by a preponderance of the
evidence that Gresser and the ILR article disclose or suggest all elements of
claims 1 and 7.

iv. The Combination of Gresser with the ILR Article
Petitioner argues that a person of ordinary skill in the art would have
been motivated to combine, and capable of combining, the teachings of the
ILR Article and Gresser because both references teach using similar UV
laser micromachining systems in the same way. Pet. 56; Ex. 1003 ¶¶ 77–82.
In particular, Petitioner argues that a person of ordinary skill in the art would
have been motivated to
combine the features taught by the ILR Article relating to
automated control of the focused laser energy, including use of
translatable stages to assist with that purpose, based on both the
programmed marking instructions and automated feedback
using digitized images from video images of the relevant
portion of a gemstone, into the method and system taught by
Gresser, for example, to “simplif[y] set-up, accelerate[] process
development, and improve[] flexibility of the system” and
“make the laser tool easier and faster to use.”
Pet. 56 (citing Ex. 1009, 2; Ex. 1003 ¶¶ 78–82).
Patent Owner argues that a person of ordinary skill in the art would
not have combined Gresser with the ILR Article for the same reasons a
person of ordinary skill in the art would not have combined Fine Diamonds
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with the ILR Article. PO Resp. 49–50. According to Patent Owner, in view
of the difficulties experienced by Dr. Christensen regarding the combination
of the ILR Article and Fine Diamonds, “a combination of the limited
disclosure of the ILR Article with the decades-old technology from Gresser
would not have yielded predictable results.” Id. at 50 (citing Ex. 2005 ¶ 94).
We apply the same reasoning discussed above with regard to the
combination of Fine Diamonds and the ILR Article to the combination of
Gresser and the ILR Article. In view of Dr. Trumper’s testimony and the
express teachings of the ILR Article, we determine that Petitioner has
demonstrated, by a preponderance of the evidence, that combining the
technical disclosures of the ILR Article and Gresser would have been merely
a predictable use of prior art elements according to their established
functions—an obvious improvement. See KSR, 550 U.S. at 417. We credit
Dr. Trumper’s testimony that it would have been obvious to a person of
ordinary skill in the art to combine Gresser and the ILR Article because the
references disclose using similar laser inscribing systems and components in
the same way, and in view of the potential advantages attributed to digitizing
and processing images in the ILR Article, and using those images in
combination with CAD/CAM programming to operate the laser inscribing
system. Ex. 1003 ¶ 80–82. Also, as noted above, we are not persuaded that
Dr. Christensen’s testimony establishes sufficiently that combining Gresser
with the ILR Article would have been beyond the level of skill held by a
person of ordinary skill in the art. In addition to the reasons discussed above
regarding the deficiencies in Dr. Christensen’s testimony, we note that Dr.
Christensen’s testimony is not directed towards the Gresser reference.
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Thus, based on the evidence of record, we are persuaded that
Petitioner has articulated a reason with rational underpinning why one with
ordinary skill in the art would have combined the ILR Article and Gresser as
indicated in the Petition, and we are persuaded that Petitioner’s reason to
combine these references is supported by a preponderance of evidence.

4. Objective Indicia of Non-obviousness
Patent Owner argues that the invention claimed in the ’351 patent
experienced commercial success and was copied, and that these objective
indicia of non-obviousness direct a finding of non-obviousness. PO Resp.
50.
i. Commercial Success
As evidence of commercial success, Patent Owner relies on a 1996
License between Patent Owner and GIA, wherein GIA agreed to exclusively
use LKI’s technology to inscribe diamonds. Id. at 52. According to Patent
Owner, GIA used the ’351 patent technology to inscribe diamonds included
in GIA’s Diamond Dossier®, which is
a type of report performed by a GIA gemologist after evaluating a
diamond, and includes characteristics like grading information (e.g.,
the 4Cs) and proportions of the diamond. (Ex. 2026.) The report
number of the Diamond Dossier® is laser-inscribed onto the evaluated
diamond. (Ex. 2028, 4-5.) The characteristics “follow” the diamond
(Ex. 1010, 1:14-17), because the inscribed report number can be used
to identify the report.
Id.
According to Patent Owner, prior to the 1996 license agreement, GIA
performed laser inscriptions of diamonds using prior art technology, and
only performed a few inscriptions per month. But “[w]hen GIA introduced
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the Diamond Dossier® in 1998 under the 1996 agreement, the number of
inscriptions per month skyrocketed.” Id. at 53. Patent Owner thus argues
that because the 1996 license required GIA to pay a flat fee per inscription
and a success fee if GIA conducted over a certain number of inscriptions
each year, “[f]rom [Patent Owner’s] perspective, the 1996 License was
commercially successful, because of the large number of inscriptions that
GIA performed pursuant to the agreement, and the accompanying royalties.
(Ex. 2007; Ex. 2008 ¶ 9).” Id. at 54.
Patent Owner further argues that there is a nexus between the
commercial success of the 1996 License and the claimed invention. Id.
Patent Owner directs us to Schedule 1 of the 1996 License, which lists the
components of the “Laser Based Diamond Inscribing System” that was the
subject of the 1996 License. Id. at 54–55. According to Patent Owner, the
components listed in Schedule 1 are similar to components listed in the
Specification of the ’351 patent, and Schedule 1 also contains a section
entitled “Mode of Operation” which is similar to the “Mode of Operation”
described in the ’351 patent. Id. at 55 (citing Ex. 2022, 35–36; Ex. 1001
15:12–31, 16:44–50).
In addition, Patent Owner argues that the “claimed invention of the
’351 Patent encompasses combining the ‘marking instructions’ and the
electronic image information, e.g., the overlay described in the
specification,” and that the Specification “describes this invention as
providing increased throughput.” Id. at 54; Ex. 1001, 19:55–62 (stating that
“40 stones per hour throughput is possible using the apparatus according to
the present invention”). Patent Owner notes that the 1996 License explicitly
references the same overlay and corresponding throughput, and therefore
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contends that the 1996 License “conveyed to GIA the invention of
combining the ‘marking instructions’ and the electronic image information
encompassed by the claims of the ’351 Patent, and linked this invention to
the expected throughput increases that was borne out by the actual number
of inscriptions performed under the 1996 License.” PO Resp. 55.
Petitioner argues that Patent Owner has failed to establish sufficiently
a nexus between the claims at issue and the purported commercial success.
Reply 19. Petitioner contends that the 1996 License agreement covered
“significantly more than the inventions in the claims-at-issue,” including
other patents, training, equipment, and know-how. Id. at 20–21.
Additionally, Petitioner contends that Patent Owner links the
commercial success of the 1996 License to the Diamond Dossier®, but the
Diamond Dossier® is not encompassed by claim 1 or claim 7. Id. at 21, 22
(noting that other claims of the ’351 patent and related patents arguably
encompass the Diamond Dossier report). Petitioner further argues that even
if Patent Owner’s claims regarding the increased throughput of inscribed
stones being a result of the combined use of marking instructions and
electronic image information are true, marking gemstones was not the reason
for the commercial success of the Diamond Dossier®. Instead, according to
Petitioner, the commercial success of the Diamond Dossier® was a result of
the combination of a unique inscription on a gemstone being associated with
a unique Diamond Dossier® report. Id. at 21–22 (citing Ex. 1019, 33:19–
34:3). In view of this, Petitioner argues that “[t]he commercial success of
the Diamond Dossier® report, which LKI acknowledges was an essential
part of the commercial success, is therefore related to unclaimed features
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and thus irrelevant to the validity of the claims-at-issue.” Id. at 22 (emphasis
omitted).
We are not persuaded by Patent Owner’s showing regarding
commercial success.
The Federal Circuit has held that “[e]vidence of commercial success
. . . is only significant if there is a nexus between the claimed invention and
the commercial success.” Ormco Corp. v. Align Tech. Inc., 463 F.3d 1299,
1311–1312 (Fed. Cir. 2006). Additionally, “[i]f the commercial success is
due to an unclaimed feature of the device, the commercial success is
irrelevant. So too if the feature that creates the commercial success was
known in the prior art, the success is not pertinent.” Id. at 1312; see also In
re Kao, 639 F.3d 1057, 1070 (Fed. Cir. 2011) (requiring a determination of
“whether the commercial success of the embodying product resulted from
the merits of the claimed invention as opposed to the prior art or other
extrinsic factors”).
The only claimed features that Patent Owner contends were not
known in the prior art are the “controlling” limitations of claims 1 and 7.
Thus, Patent Owner has the burden of demonstrating that the “controlling”
limitations, as opposed to other claimed or unclaimed features in the prior
art, led to the alleged commercial success. See Ormco, 463 F.3d at 1311–
1313; In re Kao, 639 F.3d at 1070; Tr. 60:15–70:7.
Patent Owner bases its commercial success contentions on the 1996
License Agreement. See Tr. 62:6–11. Patent Owner, however, has failed to
demonstrate sufficiently that the licensing revenue it received from this
agreement was due to the fact that the “Laser Based Diamond Inscribing
System” that was the subject of the 1996 License “control[led] the directing
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of the focused laser energy based on the marking instructions and the
imaging, to selectively generate a marking on the gemstone based on the
instructions.”
Although similar language regarding the operation of the laser system,
including “painting” and the throughput, appears in both the Specification of
the ’351 patent and the 1996 License, the license also encompasses several
unclaimed features, such as training, equipment, and technical know-how.
See Ex. 2022, 6–7. Similarly, in addition to “painting,” the ’351 patent and
the 1996 License indicate that “[t]he rest of the operations, e.g., locating
optimal place for inscription” (listed separately from “painting”) and the
skill of the operator influence the throughput. Ex. 1001, 19:55–62; Ex.
2022, 43 (stating that certain steps “should take a properly trained operator
30–40 seconds”). The record, however, lacks credible and persuasive
evidence demonstrating that the alleged commercial success resulted from
the “controlling” limitations, as opposed to unclaimed features such as
training, equipment, and/or technical know-how. Additionally, to the extent
Patent Owner relies on the Diamond Dossier® as evidence of the alleged
commercial success,6 this is yet another unclaimed feature.
Nor are we apprised of any credible evidence demonstrating that the
alleged commercial success is due to the “controlling” limitations as
opposed to a different claimed feature, such as those for which Patent Owner

6 At the Oral Hearing, counsel for Patent Owner stated that Petitioner’s
“focus on the diamond dossier report is misplaced. The success that we’re
pointing to here for secondary considerations is based on the licensing
revenue that [Patent Owner] obtained by meeting the performance standards
that are set forth in the license agreement, and those are based on the unique
aspects of the claimed invention.” Tr. 62:6–11.
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has waived any argument that they were not already part of the prior art.
Therefore, although the “controlling” limitations may contribute to the
increased throughput, the evidence suggests that there are other, unclaimed
factors which also contribute to the feature that provided the alleged
commercial success.
Thus, we find that Patent Owner has not established by a
preponderance of evidence the requisite nexus between the claimed
invention and commercial success. Tokai Corp. v. Easton Enters., Inc., 632
F.3d 1358, 1369 (Fed. Cir. 2011) (“If commercial success is due to an
element in the prior art, no nexus exists.”); see also Ormco, 463 F.3d at 1313
(reasoning that success that is due “‘partially’ to claimed features” and to
unclaimed features and/or other features already in the art lacks the requisite
nexus to show unobviousness) (citations omitted).7

ii. Copying
Patent Owner argues that Photoscribe Technologies, Inc. copied the
technology claimed in the ’351 patent. PO Resp. 56–57. Patent Owner filed
a lawsuit in District Court against Photoscribe, which is currently pending.
According to Patent Owner, Photoscribe has conceded that its machines

7 Even if Patent Owner had established a nexus between the claimed
invention and the alleged commercial success, we find that Patent Owner
has not provided sufficient information for us to conclude that the 1996
License was in fact commercially successful. As evidence of commercial
success, Patent Owner relies on the number of inscriptions GIA performed
pursuant to the license and the resulting royalties. PO Resp. 54. Patent
Owner, however, provides an insufficient indication as to whether this
represents a substantial quantity in this market. See In re Huang, 100 F.3d
135, 140 (Fed. Cir. 1996).
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meet all limitations of the asserted claims except for the “controlling”
limitations. Id. at 56. Patent Owner contends that the Photoscribe machines
do practice the “controlling” limitations because they “use an overlay
technique nearly identical to that disclosed in the ’351 patent,” and therefore
combine marking instructions with electronic image information to generate
a marking. Id. at 56–57 (emphasis omitted).
Petitioner argues that Patent Owner’s allegations of copying and the
filing of a lawsuit do not constitute evidence of copying. Reply 24–25.
We are not persuaded by Patent Owner’s showing regarding copying.
“Not every competing product that arguably falls within the scope of a
patent is evidence of copying; otherwise, ‘every infringement suit would
automatically confirm the nonobviousness of the patent.’” Wyers v. Master
Lock Co., 616 F.3d 1231, 1246 (Fed. Cir. 2010) (quoting Iron Grip Barbell
Co. v. USA Sports, Inc., 392 F.3d 1317, 1325 (Fed. Cir. 2004)). To establish
copying, a party must provide evidence of efforts to replicate a specific
product, “which may be demonstrated through internal company documents,
direct evidence such as disassembling a patented prototype, photographing
its features, and using the photograph as a blueprint to build a replica, or
access to the patented product combined with substantial similarity to the
patented product.” Id. Patent Owner fails to provide credible evidence on
this point.
Thus, we find that Patent Owner has not established by a
preponderance of evidence that others have copied the claimed invention of
the ’351 patent.

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5. Claims 1 and 7 as Obvious under 35 U.S.C. § 103 in view of Fine
Diamonds
Petitioner argues that, even under a construction of the “controlling”
limitations that requires electronic image information to be fed back from
the imaging step or system and combined with marking instructions to
generate a marking on the gemstone, claims 1 and 7 are unpatentable as
obvious in view of Fine Diamonds. Reply 12–15; Pet. 5, n.1, 59–60.
We need not reach this issue in view of our determination that
Petitioner has shown by a preponderance of evidence that claims 1 and 7 of
the ’351 patent are unpatentable as obvious over Fine Diamonds and the ILR
Article, and Gresser and the ILR Article, and that Patent Owner’s evidence
regarding objective indicia of non-obviousness does not direct a finding of
non-obviousness.

III. PETITIONER’S MOTION TO EXCLUDE EVIDENCE
Petitioner filed a Motion to Exclude Evidence (Paper 26) in which
Petitioner seeks to exclude several paragraphs from the Declaration of Dr.
Bokor (Ex. 2005) and the Declaration of Necip Alev (Ex. 2006). Paper 26,
3–6. Petitioner also seeks to exclude the Transcripts of the Depositions of
Dr. Christensen and documents referred to in these depositions (Exs. 2011–
2020). Id. at 6–10. Additionally, Petitioner seeks to exclude the Declaration
of Mr. Moryto (Ex. 2007 (redacted), 2008 (unredacted)), as well as Exhibits
2004, 2010, 2021, 2022, and 2024–2033. Id. at 10–13.
We do not reach the merits of Petitioner’s Motion to Exclude because,
as explained above, even if the disputed evidence is considered, Petitioner
has shown by a preponderance of evidence that claims 1 and 7 are
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Patent 6,476,351 B1

41
unpatentable as obvious, and Patent Owner has not shown that the evidence
of secondary considerations of nonobviousness it submitted outweighs the
strong evidence of obviousness presented by Petitioner. Accordingly,
Petitioner’s Motion to Exclude is dismissed as moot.

IV. MOTION TO SEAL
Patent Owner filed an unopposed Motion to Seal Exhibits 2008 and
2023 pursuant to 37 C.F.R. § 42.14 and 42.54. Paper 13. In its motion,
Patent Owner asserts that the exhibits contain licensing information that is
confidential to GIA, who is not involved in this proceeding. Paper 13, 2.
Petitioner filed an unopposed Motion to Seal Exhibit 1021, which contains
deposition testimony also relating to confidential GIA licensing information.
Paper 25, 1–2. Exhibit 2007, filed by Patent Owner, is a redacted version of
Exhibit 2008, and Exhibit 1020, filed by Petitioner, is a redacted version of
Exhibit 1021. Patent Owner indicated that it was not able to file a redacted
version of Exhibit 2023, which contains “raw data regarding the number of
laser inscriptions performed by GIA pursuant to licensing agreements for
laser inscription technology between [Patent Owner] and GIA.” Paper 13, 3.
Upon review, good cause exists to seal the above information as set
forth in the above motions. We note that none of the sealed information was
relied upon or disclosed in this Decision.

V. CONCLUSION
For the foregoing reasons, we determine that Petitioner has shown by
a preponderance of the evidence that:
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Patent 6,476,351 B1

42
(1) Fine Diamonds and the ILR Article render claims 1 and 7 of the
’351 patent unpatentable as obvious; and
(2) Gresser and the ILR Article render claims 1 and 7 of the ’351
patent unpatentable as obvious.

VI. ORDER
For the reasons given, it is
ORDERED that claims 1 and 7 have been shown to be unpatentable;
FURTHER ORDERED that Petitioner’s Motion to Exclude Evidence
is dismissed as moot;
FURTHER ORDERED that Patent Owner’s Motion to Seal is
granted;
FURTHER ORDERED that Petitioner’s Motion to Seal is granted;
and
FURTHER ORDERED that, because this is a final decision, parties to
the proceeding seeking judicial review of the decision must comply with the
notice and service requirements of 37 C.F.R. § 90.2.

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Patent 6,476,351 B1

43

PETITIONER:
P. Weston Musselman, Jr.
Adam Shartzer
Ricardo Bonilla
Fish & Richardson P.C.
musselman@fr.com
shartzer@fr.com
PTABInbound@fr.com
IPR29266-0014IP1@fr.com

PATENT OWNER:
Mehran Arjomand
Fahd Hussein Patel
Morrison & Foerster LLP
marjomand@mofo.com
fpatel@mofo.com
kobrenovic@mofo.com