Case: 19-1059    Document: 58    Page: 1   Filed: 02/13/2020




   United States Court of Appeals
       for the Federal Circuit
                 ______________________

           ACOUSTIC TECHNOLOGY, INC.,
                    Appellant

                            v.

       ITRON NETWORKED SOLUTIONS, INC.,
                      Appellee
               ______________________

                  2019-1059, 2019-1060
                 ______________________

     Appeals from the United States Patent and Trademark
 Office, Patent Trial and Appeal Board in Nos. IPR2017-
 01030, IPR2017-01031.
                  ______________________

                Decided: February 13, 2020
                 ______________________

    MICHELLE ARMOND, Armond Wilson LLP, Newport
 Beach, CA, argued for appellant. Also represented by
 DOUGLAS R. WILSON, Austin, TX.

    ADAM R. BRAUSA, Durie Tangri LLP, San Francisco,
 CA, argued for appellee. Also represented by MARK A.
 LEMLEY.
                ______________________

   Before MOORE, REYNA, and TARANTO, Circuit Judges.
Case: 19-1059     Document: 58      Page: 2    Filed: 02/13/2020




 2            ACOUSTIC TECHNOLOGY, INC. v. ITRON NETWORKED
                                                  SOLUTIONS


 REYNA, Circuit Judge.
      On September 8, 2017, the Patent Trial and Appeal
 Board instituted inter partes review based on two petitions
 filed by Silver Spring Networks, Inc. Nine days after insti-
 tution, Silver Spring agreed to merge with Itron, Inc., an
 entity undisputedly time-barred under 35 U.S.C. § 315(b).
 Silver Spring and Itron completed the merger during the
 proceedings. The Board later issued a final written deci-
 sion and found the challenged claims unpatentable. On ap-
 peal, Acoustic asks that we vacate the Board’s final written
 decision on grounds that the inter partes review was time-
 barred due to Silver Spring’s and Itron’s merger-related ac-
 tivities. Acoustic also challenges the Board’s obviousness
 findings. Because we find that Acoustic waived its time-
 bar and obviousness arguments, we affirm.
                         BACKGROUND
              I. ’574 Patent and “WAN Means”
     Acoustic Technology, Inc. (“Acoustic”) owns U.S. Patent
 No. 5,986,574 (“the ’574 patent”), which relates to commu-
 nications systems for utility providers to remotely monitor
 groups of utility meters, e.g., electricity meters. 1 According
 to Acoustic, the claimed inventions were “a considerable
 improvement over prior art designs that called for the ad-
 ditional expense of installing supporting communications
 equipment and infrastructure.” Central to this appeal is
 the “WAN means” claim limitation, which relates to the


     1    The ’574 patent is a parent of continuation U.S. Pa-
 tent Application No. 09/703,298, which issued as U.S. Pa-
 tent No. 6,509,841. Acoustic filed a related appeal
 involving U.S. Patent No. 6,509,841 on the same day it filed
 this appeal. Acoustic Tech., Inc. v. Itron Networked Solu-
 tions, Inc., Case No. 2019-1061. We heard oral arguments
 in this case and Case No. 2019-1061 on December 4, 2019.
 We have issued opinions in both cases simultaneously.
Case: 19-1059     Document: 58      Page: 3    Filed: 02/13/2020




 ACOUSTIC TECHNOLOGY, INC. v. ITRON NETWORKED                 3
 SOLUTIONS


 systems’ ability to transmit information over a Wide Area
 Network (“WAN”).
      In one embodiment, shown in Figure 1 below, a plural-
 ity of “servicing means 16” (e.g., on-site utility meters) com-
 municate with a “relay means 14,” which in turn
 communicates with a “control means 12” (e.g., a remote
 computer at a utility facility). J.A. 202, Fig. 1; J.A. 205–
 206 at 2:27–3:32. The relay means communicates with the
 plurality of servicing means over a Local Area Network.
 The relay means and the control means, on the other hand,
 communicate over a wide area network via a “WAN
 means.”




     Claim 16 of the ’574 patent, reproduced below, is rep-
 resentative of the claims at issue on appeal and recites a
 relay means in the form of a “concentrator meter”:
         16. A concentrator having means for relaying
     communication between a plurality of metering de-
     vices and at least one control station comprising:
Case: 19-1059    Document: 58      Page: 4    Filed: 02/13/2020




 4            ACOUSTIC TECHNOLOGY, INC. v. ITRON NETWORKED
                                                  SOLUTIONS


         concentrator comprising a meter and
           means for monitoring an amount of usage
           of a medium;
         LAN means for receiving data from said
          plurality of metering devices over a local
          area network;
         WAN means for transmitting data associ-
          ated with both said plurality of metering
          devices and said monitoring means over
          a wide area network to said at least one
          control station; and
         a housing comprising a meter receiving
           said monitoring means, said LAN means
           and said WAN means.
 J.A. 209 at 9:22–35 (emphasis added).
                      II. IPR Petitions
     In March 2010, Acoustic sued Itron Inc. (“Itron”) for in-
 fringement of the ’574 patent. Acoustic and Itron later
 agreed to settle the suit. As part of the settlement agree-
 ment, Acoustic licensed the ’574 patent to Itron. As a result
 of the lawsuit, Itron was time-barred from seeking inter
 partes review (“IPR”) of the ’574 patent as of March 26,
 2011. See 35 U.S.C. § 315(b).
      Six years after suing Itron, Acoustic sued Silver Spring
 Networks, Inc. (“Silver Spring”) for infringement of the ’574
 patent. In response, on March 3, 2017, Silver Spring timely
 filed two IPR petitions that challenge the ’574 patent and
 that gave rise to this appeal: IPR2017-01030 and IPR2017-
 01031 (“the petitions”).
     Several weeks before Silver Spring filed the petitions,
 Silver Spring and Itron began privately discussing “a po-
 tential business combination.” J.A. 6556. The first contact
 occurred on February 12, 2017, when a representative of
 Itron phoned a Silver Spring board member to express
Case: 19-1059    Document: 58      Page: 5    Filed: 02/13/2020




 ACOUSTIC TECHNOLOGY, INC. v. ITRON NETWORKED               5
 SOLUTIONS


 Itron’s interest in a potential merger. The next day, Itron’s
 CEO continued the discussion with a director of Silver
 Spring. One week later, on February 20, 2017, Itron’s CEO
 requested a meeting with Silver Spring to discuss “a poten-
 tial acquisition.” J.A. 6556.
     Silver Spring and Itron continued to discuss a potential
 merger after Silver Spring filed the petitions. Representa-
 tives from each company met on March 10, 2017, one week
 after Silver Spring filed the petitions, and again on
 April 12, 2017.
     The Board instituted inter partes review on Septem-
 ber 8, 2017. Nine days later, on September 17, 2017, Silver
 Spring and Itron agreed to merge. Itron publicly an-
 nounced the agreement the next day. Silver Spring asserts
 that, up until the day the parties reached an agreement,
 Silver Spring was exploring potential business relation-
 ships with more than a dozen other companies.
     Silver Spring and Itron completed the merger on Jan-
 uary 5, 2018, while the inter partes review proceedings re-
 mained underway. Acoustic learned of the merger three
 days later. On January 17, 2018, Silver Spring filed up-
 dated mandatory notices that listed Itron as a real-party-
 in-interest.
     The Board entered final written decisions on August
 21, 2018, nearly a year after Silver Spring and Itron agreed
 to merge and seven months after they completed the mer-
 ger. The Board’s final written decisions found the chal-
 lenged claims unpatentable on all three asserted grounds:
 obvious in view of Argyroudis, obvious in view of Argyrou-
 dis and Selph, and obvious in view of Mayo and Roach.
 Acoustic never raised a time-bar challenge to the Board.
    Acoustic appeals the Board’s final written decisions.
 We have jurisdiction under 28 U.S.C. § 1295(a)(4)(A).
Case: 19-1059     Document: 58     Page: 6    Filed: 02/13/2020




 6            ACOUSTIC TECHNOLOGY, INC. v. ITRON NETWORKED
                                                  SOLUTIONS


                         DISCUSSION
     Acoustic raises two issues on appeal. First, Acoustic
 asserts that the PTAB’s final written decisions should be
 vacated because the underlying IPR proceedings are time-
 barred under 35 U.S.C. § 315(b). Second, Acoustic chal-
 lenges the Board’s obviousness findings on grounds that
 the Board erroneously construed “WAN means” of claims 3,
 16, 17, and 20 of the ’574 patent.
                         I. Time-Bar
     Acoustic argues that we must vacate the Board’s final
 written decisions because the inter partes reviews were
 time-barred under 35 U.S.C. § 315(b). Section 315(b) pro-
 vides:
     An inter partes review may not be instituted if the
     petition requesting the proceeding is filed more
     than 1 year after the date on which the petitioner,
     real party in interest, or privy of the petitioner is
     served with a complaint alleging infringement of
     the patent.
 35 U.S.C. § 315(b) (emphasis added). Congress included
 the “real parties in interest” provision in § 315(b) to “safe-
 guard patent owners from having to defend their patents
 against belated administrative attacks by related parties.”
 Applications in Internet Time, LLC v. RPX Corp., 897 F.3d
 1336, 1350 (Fed. Cir. 2018), cert. denied, 139 S. Ct. 1366
 (mem.) (2019).
     The Board evaluates § 315(b) at the time it decides
 whether to institute proceedings. Power Integrations, Inc.
 v. Semiconductor Components Indus., LLC, 926 F.3d 1306,
 1315 (Fed. Cir. 2019). In Power Intergrations, we held that
 the real-party-in-interest determination must consider all
 relationships that arise before the date of institution, in-
 cluding relationships that arise after the petition filing
 date. Id. at 1314–15 (“[Section] 315(b) requires considera-
 tion of privity and [real-party-in-interest] relationships
Case: 19-1059     Document: 58      Page: 7    Filed: 02/13/2020




 ACOUSTIC TECHNOLOGY, INC. v. ITRON NETWORKED                 7
 SOLUTIONS


 arising after filing but before institution.”). We expressly
 declined to decide whether the Board is required to reeval-
 uate § 315(b) in view of a new real-party-in-interest that
 arises after institution. Id. at 1314 n.8 (“We do not ad-
 dress the impact of a change in RPI . . . occurring after in-
 stitution.”).
      Acoustic argues that the underlying IPRs are time-
 barred because Itron was a real-party-in-interest “both be-
 fore and after the IPRs were instituted.” Appellant Br. 47.
 Before institution, Acoustic asserts, Itron was a real-party-
 in-interest because “the executives met; Itron conducted
 due diligence; the details of the merger were discussed; and
 the formal ‘merger agreement’ was prepared and negoti-
 ated.” Reply Br. 16–17. After institution, Acoustic con-
 tends, Itron was “unquestionably” a real-party-in-interest
 because Silver Spring became a wholly-owned subsidiary
 of Itron, and Itron “controlled [Silver Spring] and had a sig-
 nificant interest” in the inter partes review proceedings.
 Id. at 22–23.
      Acoustic contends that Silver Spring’s post-institution
 status as a real-party-in-interest is important because “in-
 stitution is not a static decision” and the Board has the au-
 thority to reevaluate § 315(b) when a real-party-in-interest
 arises after institution. Reply Br. 20–21. The Board’s abil-
 ity to assess § 315(b) after institution is necessary, Acoustic
 explains, in order to avoid an “end-run around Section
 315(b)” where parties delay their corporate deals until
 shortly after institution and avoid the consequences of the
 time-bar.
     Itron advances several arguments in response to
 Acoustic’s time-bar arguments. First, Itron argues that
 Acoustic waived its time-bar challenge of the IPRs because
 Acoustic did not raise those arguments before the Board.
 Second, Itron argues the time bar of § 315(b) does not apply
 to the underlying IPR proceedings because Itron merged
 with Silver Spring after the Board instituted the
Case: 19-1059     Document: 58     Page: 8    Filed: 02/13/2020




 8            ACOUSTIC TECHNOLOGY, INC. v. ITRON NETWORKED
                                                  SOLUTIONS


 proceedings. Third, Itron asserts that the Board is not au-
 thorized to reevaluate § 315(b) after institution and that
 Acoustic’s proposed reading of the statute “offers no logical
 stopping point for the Board to assess the time bar.” Ap-
 pellee Br. 36.
     We hold that Acoustic has waived its time-bar chal-
 lenge to the IPRs because it failed to present those argu-
 ments before the Board. We retain case-by-case discretion
 over whether to apply waiver. Monsanto Tech. LLC v. E.I.
 DuPont de Nemours & Co., 878 F.3d 1336, 1342 n.8 (Fed.
 Cir. 2018). We have “frequently declined to hear argu-
 ments that the applicant failed to present to the Board.” In
 re Watts, 354 F.3d 1362, 1367 (Fed. Cir. 2004). When a
 party raises arguments on appeal that it did not raise to
 the Board, they “deprive[] the court of the benefit of the
 [Board’s] informed judgment.” In re NuVasive, Inc., 842
 F.3d 1376, 1380 (Fed. Cir. 2016) (explaining the im-
 portance of “a comprehensive record that contains the ar-
 guments and evidence presented by the parties”).
     There is no dispute that Acoustic failed to raise § 315(b)
 time-bar arguments before the Board. Acoustic became
 aware of the merger as of January 8, 2018, more than seven
 months before the Board issued its final written decisions.
 J.A. 7026. Yet, Acoustic does not provide any reason for its
 failure to challenge the proceedings as time-barred. Be-
 cause Acoustic failed to present its time-bar arguments to
 the Board and “deprive[d] the court of the benefit of the
 [Board’s] informed judgment,” we exercise our discretion to
 apply waiver. In re NuVasive, 842 F.3d at 1380.
     Acoustic attempts to excuse its waiver by asserting,
 without legal authority, that the time-bar is “jurisdic-
 tional” and thus “may be raised at any time.” Appellant
 Br. 29. We disagree.
     Acoustic is correct that we have previously described
 the time-bar restrictions on the Board’s institution powers
 as “jurisdictional.” Appellant Br. 29–32 (citing Click-to-
Case: 19-1059    Document: 58     Page: 9    Filed: 02/13/2020




 ACOUSTIC TECHNOLOGY, INC. v. ITRON NETWORKED              9
 SOLUTIONS


 Call Techs., LP v. Ingenio, Inc., 899 F.3d 1321, 1325
 (Fed. Cir. 2018); Wi-Fi One, LLC v. Broadcom Corp., 878
 F.3d 1364, 1373 (Fed. Cir. 2018)). But our application of
 waiver differs between challenges to an agency’s “jurisdic-
 tion” and challenges to a federal court’s jurisdiction. PGS
 Geophysical AS v. Iancu, 891 F.3d 1354, 1362 (Fed. Cir.
 2018). As we explained in PGS:
    Even if the Board could be said to have acted “ultra
    vires” in refusing to institute reviews of some
    claims and grounds . . . the Board’s error is wai-
    vable, not one we are required to notice and act on
    in the absence of an appropriate request for relief
    on that basis. Several courts of appeals have rec-
    ognized the same for a challenge to an agency’s “ju-
    risdiction,” after the Supreme Court, in City of
    Arlington v. FCC, rejected a distinction between
    agency “jurisdiction” errors and other errors for
    certain deference purposes . . . .”
 Id. (compiling cases) (citations omitted). We hold that
 time-bar challenges under § 315(b) are not immune from
 waiver.
      To permit litigants to raise § 315(b) time-bar chal-
 lenges for the first time on appeal would encourage what
 the Supreme Court has referred to as “sandbagging,” i.e.,
 “suggesting or permitting, for strategic reasons, that the
 [tribunal below] pursue a certain course, and later—if the
 outcome is unfavorable—claiming that the course followed
 was reversible error.” Freytag v. Comm’r of Internal Reve-
 nue, 501 U.S. 868, 895 (1991). Here, had Acoustic raised a
 time-bar challenge before the Board, the Board was fully
 empowered to dismiss the petitions for untimeliness if the
 challenge had merit. But allowing Acoustic to raise a time-
 bar challenge for the first time on appeal would afford it a
 significant and unfair advantage: Acoustic could wait for
 the Board’s decision on the merits, which if favorable would
Case: 19-1059      Document: 58    Page: 10   Filed: 02/13/2020




 10             ACOUSTIC TECHNOLOGY, INC. v. ITRON NETWORKED
                                                    SOLUTIONS


 have estoppel effect, and then challenge the Board’s juris-
 diction on appeal only if the Board finds the claims obvious.
     Although we do not address the merits of Acoustic’s
 time-bar argument, we note Acoustic’s concerns about the
 concealed involvement of interested, time-barred parties.
 But because Acoustic never raised this issue to the Board,
 we decline to resolve whether Itron’s pre-merger activities
 render it a real-party-in-interest, or whether the Board has
 any authority or obligation to reevaluate § 315(b) post in-
 stitution.
                       II. “WAN Means”
      Acoustic argues that we should reverse the Board’s ob-
 viousness findings on grounds that the Board erroneously
 construed the “WAN means” term. Specifically, Acoustic
 argues that the Board erred by defining the corresponding
 structure for “WAN means” as “any device.” The Board
 should have instead limited the corresponding structure to
 a “conventional WAN radio,” Acoustic explains, because
 that is the only structure disclosed in the specification.
 Acoustic asserts that because the Board erroneously con-
 strued “WAN means,” it “never identified a conventional
 WAN radio in the prior art,” and its finding that the prior
 art discloses a “WAN means” is not supported by substan-
 tial evidence. Appellant Br. 57–63 (“[T]here is no substan-
 tial evidence establishing that the prior art contains ‘a
 conventional WAN radio’ or its equivalent under the cor-
 rect claim construction.”).
      Itron contends that the obviousness arguments Acous-
 tic makes to this Court rely on a different construction of
 “WAN means” than what Acoustic argued below. As a re-
 sult, Itron explains, the Board has not yet addressed the
 non-obviousness arguments that Acoustic raises for the
 first time on appeal. We agree.
     Before the Board, Acoustic argued non-obviousness by
 asserting that the prior art did not teach a conventional
Case: 19-1059    Document: 58     Page: 11    Filed: 02/13/2020




 ACOUSTIC TECHNOLOGY, INC. v. ITRON NETWORKED              11
 SOLUTIONS


 WAN radio capable of transmitting over publicly available
 Wide Area Networks. J.A. 512, J.A. 3301. Acoustic distin-
 guished the asserted prior art references based on their
 failure to disclose a system for transmitting over publicly
 available WAN. For example, Acoustic argued that the
 way data is exchanged in Argyroudis “is different than ex-
 changing data over a publicly available WAN.” J.A. 512.
 Acoustic likewise argued that the “transceiving means in
 Mayo . . . would not be a WAN means for transmitting over
 a publicly available wide area network.” J.A. 3301. The
 Board considered and rejected these arguments. J.A. 37;
 J.A. 84.
      Acoustic’s argument on appeal is new. Rather than ar-
 guing that the prior art fails to disclose a conventional ra-
 dio capable of transmitting over publicly available WAN,
 Acoustic now argues that the prior art fails to disclose any
 conventional WAN radio. Appellant Br. 50 (asserting that
 “there is no substantial evidence establishing that the prior
 art contains ‘a conventional WAN radio’ or its equivalent”).
 Acoustic’s argument on appeal makes no mention of pub-
 licly available WAN.
     Because Acoustic never presented to the Board the
 non-obviousness arguments it now raises on appeal, we
 find those arguments waived. In re Watts, 354 F.3d at 1367
 (explaining that we have “frequently declined to hear argu-
 ments that the applicant failed to present to the Board”);
 In re NuVasive, Inc., 842 F.3d at 1380 (explaining that fail-
 ure to raise arguments to the Board “deprives the court of
 the benefit of the Board’s informed judgment.”); see, e.g.,
 J.A. 576–578.
                        CONCLUSION
     We have considered Acoustic’s other arguments and
 find them unpersuasive. We affirm.
                        AFFIRMED
Case: 19-1059      Document: 58    Page: 12   Filed: 02/13/2020




 12             ACOUSTIC TECHNOLOGY, INC. v. ITRON NETWORKED
                                                    SOLUTIONS


                             COSTS
      No costs.
