Jodi Schwendimann

Patent Trials and Appeals Board

Oct 1, 2021

IPR2020-00628 (P.T.A.B. Oct. 1, 2021)

Trials@uspto.gov Paper 29
571-272-7822 Date: October 1, 2021

UNITED STATES PATENT AND TRADEMARK OFFICE

BEFORE THE PATENT TRIAL AND APPEAL BOARD

NEENAH, INC. and AVERY PRODUCTS CORPORATION,
Petitioner,
v.
JODI A. SCHWENDIMANN, f/k/a JODI A. DALVEY,
and NUCOAT, INC.,
Patent Owner.

IPR2020-00628
Patent RE41,623 E

Before JEFFREY W. ABRAHAM, MICHELLE N. ANKENBRAND, and
AVELYN M. ROSS, Administrative Patent Judges.
ROSS, Administrative Patent Judge.
JUDGMENT
Final Written Decision
Determining All Challenged Claims Unpatentable
35 U.S.C. § 318(a)

IPR2020-00628
Patent RE41,623 E

2
I. INTRODUCTION
Neenah, Inc. and Avery Products Corporation ( collectively
“Petitioner”)1 filed a Petition (Paper 1, “Petition” or “Pet.”) requesting inter
partes review of claims 1–17 of U.S. Reissue Patent No. RE41,623
(Ex. 1001, “the ’623 patent”). Pet. 1. Jodi A. Schwendimann, f/k/a Jodi
Dalvey, and NuCoat, Inc. (collectively “Patent Owner”) filed a Preliminary
Response (Paper 9, “Prelim. Resp.”).
Upon consideration of the Petition, Preliminary Response, and the
parties’ evidence, we determined that Petitioner had demonstrated a
reasonable likelihood that it would prevail with respect to at least one claim
of the ’623 patent. Paper 10 (“Decision on Institution” or “DI”). Thus,
pursuant to the Supreme Court’s decision in SAS Institute Inc. v. Iancu, 138
S. Ct. 1348, 1355 (2018), and the USPTO Guidance,2 we instituted review
of all challenged claims on all asserted grounds. Id.
Following institution of trial, Patent Owner filed a Patent Owner
Response (Paper 14, “PO Resp.”), Petitioner filed a Reply (Paper 16, “Pet.
Reply”), and Patent Owner filed a Sur-reply (Paper 20). In support of their
respective positions, Petitioner relies on the testimony of Dr. Robert A.

1 Petitioner identifies Neenah, Inc., Avery Products Corporation, and Stahls’
Inc. as real parties-in-interest. Pet. 1. “[I]n an abundance of caution,
Petitioner also identifies Stahls’ Inc. as a possible real party-in-interest . . .
[who] is a customer of Neenah’s and Neenah is partially indemnifying
. . . in connection with certain accused products in the Michigan Lawsuit.”
Id.
2 In accordance with USPTO Guidance, “if the PTAB institutes a trial, the
PTAB will institute on all challenges raised in the petition.” See USPTO,
Guidance on the Impact of SAS on AIA Trial Proceedings (April 26, 2018)
(available at https://www.uspto.gov/patents-application-process/patent-trial-
and-appeal-board/trials/guidance-impact-sas-aia-trial) (“USPTO Guidance”).
IPR2020-00628
Patent RE41,623 E

3
Wanat (Ex. 1020; Ex. 1062,), and Patent Owner relies on the testimony of
Dr. Scott Williams (Ex. 2001) and the Declaration of Dr. Christopher Ellison
(Ex. 2011).
An oral hearing was held on July 12, 2021, and a transcript of the
hearing is included in the record (Paper 28, “Tr.”).
We have jurisdiction under 35 U.S.C. § 6. This Final Written
Decision is issued pursuant to 35 U.S.C. § 318(a) and 37 C.F.R. § 42.73.
For the reasons discussed below, we determine that Petitioner has shown by
a preponderance of the evidence that claims 1–17 of the ’623 patent are
unpatentable.
A. Related Proceedings
Petitioner identifies the pending lawsuit between the parties, styled
Jodi A. Schwendimann v. Neenah, Inc., Case No. 1:19-cv-00361-LPS (D.
Del.) (“Delaware Lawsuit”), as a related proceeding in which Patent Owner
asserts the ’623 patent. Pet. 1; see also Paper 8, 2 (Patent Owner’s
Mandatory Notices).
The ’623 patent is also asserted in the following pending litigations:
Jodi A. Schwendimann v. Stahls’ Inc., Case No. 2:19-cv-10525-
LVP-MKM (E.D. Mich.) (“Michigan Lawsuit”); and
Jodi A. Schwendimann v. Siser North America, Inc., Case No.
1:19-cv-00362-LPS (D. Del.).
Pet. 2; Paper 12, 2. The ’623 patent was also asserted in Jodi A.
Schwendimann v. Arkwright Advanced Coating, Inc. et al., Case No. 0:11-
cv-00820-JRT-HB (D. Minn.) (“Arkwright Lawsuit”). Pet. 2, 10. The ’623
patent is the subject of separate petitions for inter partes review: Stahls’ Inc.
v. Jodi A. Schwendimann, IPR2020-00633 and Stahls’ Inc. v. Jodi A.
IPR2020-00628
Patent RE41,623 E

4
Schwendimann, IPR2020-00641. Paper 8, 2. We instituted inter partes
review in the -00633 and -00641 cases. See IPR2020-00633, Paper 11;
IPR2020-00641, Paper 11. Concurrently with the entry of this Final Written
Decision, we also separately enter judgment in the -00633 and -00641 cases.
Petitioner states that the ’623 patent is a reissued patent of U.S. Patent
No. 6,844,311, which issued from U.S. Patent Application No. 09/541,845
(“the ’845 application”), which is a continuation-in-part of U.S. Patent
Application No. 09/391,910 (“the ’910 application”). Numerous patents
claim priority to the ’845 and ’910 applications including U.S. Patent
No. 7,749,581 (“the ’581 patent”), U.S. Patent No. 7,754,042 (“the ’042
patent”), U.S. Patent No. 7,771,554 (“the ’554 patent”), and U.S. Patent
No. 7,766,475 (“the ’475 patent”) (together with the ’623 patent, collectively
“the Schwendimann patents”). Pet. 3.
Petitioner also filed petitions for inter partes review against the ’581
patent, the ’042 patent, the ’554 patent, and the ’475 patent. Pet. 1–2;
Paper 8, 2. We instituted inter partes review on Petitioner’s challenges
against the ’581 patent in IPR2020-00634 (Paper 13) and IPR2020-00644
(Paper 10), against the ’042 patent in IPR2020-00629 (Paper 10) and
IPR2020-00635 (Paper 10), and against the ’475 patent in IPR2020-00915
and IPR2020-01122 (Paper 8). We rendered judgment in IPR2020-00629, -
00634, -00635, and -00644 on September 10, 2021. IPR2020-00634,
Paper 39; IPR2020-00644, Paper 35; IPR2020-00629, Paper 39; IPR2020-
00635, Paper 46. We declined, however, to institute review on Petitioner’s
challenges against the ’581 patent in IPR2020-00645 (Paper 10) or against
the ’554 patent in IPR2020-00636 (Paper 10) or IPR2020-01121 (Paper 8).
IPR2020-00628
Patent RE41,623 E

5
The Schwendimann patents were also involved in Patent Interference
Nos. 105,961, 105,964, and 105,966 (collectively “Interference
Proceedings”). Ex. 2004, 1; Ex. 2003, 2.
B. The ’623 Patent (Ex. 1001)
The ’623 patent, titled “Method of Image Transfer on a Colored
Base,” issued on September 7, 2010. Ex. 1001, codes (45), (54). The ’623
patent is directed to “a method for transferring an image onto a colored base
and to an article comprising a dark base and an image with a light
background on the base.” Id. at 1:13–15.
The ’623 patent explains that conventional image transfer processes
use two-steps: applying a white or light background polymeric material to a
colored base with heat and then using another sheet to impart an image to
the substantially white polymeric material. Id. at 3:35–48. According to
the ’623 patent, the conventional two-step process requires careful alignment
of an image with the white background, is “exceedingly time-consuming,”
and produces significant waste of base and image transfer materials. Id.
at 3:49–56.
An exemplary image transfer process of the ’623 patent is depicted
below in Figure 1.
IPR2020-00628
Patent RE41,623 E

6

Figure 1 “illustrates a schematic view of one process of image transfer onto
a colored product.” Id. at 2:29–31. Figure 1 depicts colored base material
102 (e.g., a colored textile), image 104 including substantially white
background 106, and indicia 108 disposed on substantially white
background 106. Id. at 3:7–18. The ’623 patent states that image 104 is
applied to colored base material 102 with heat to make completed article 110
in a single step. Id.
An embodiment of an image transfer device is depicted below in
Figure 5.
IPR2020-00628
Patent RE41,623 E

7

Figure 5 illustrates “a cross-sectional view of one other embodiment of the
image transfer device of the present invention.” Id. at 2:41–42. Figure 5
shows “an image transfer sheet 500 that is comprised of a substrate layer 502
[and] a release layer 504 comprising a silicone coating 505 and a white layer
506.” Id. at 8:48–53. Figure 5 also depicts white layer 506 and receiving
layer 508 as part of peel layer 520. See id. at 8:57–63, 9:7–9.
The ’623 patent describes the white layer as imparting “a white
background on a dark substrate.” Id. at 3:31–34. According to one
embodiment, “the white layer 506 of the image transfer sheet 500 is
impregnated with titanium oxide or other white or luminescent pigment.”
Id. at 8:57–60. In another embodiment, “the white layer 506 and a receiving
layer 508, contacting the white layer 506 are impregnated with titanium
oxide or other white or luminescent pigment.” Id. at 8:60–63. According to
the ’623 patent,
[f]or some embodiments, a white layer 506, 606, such as is
shown in FIGS. 5-6, includes ethylene/methacrylic acid
(E/MAA), with an acid content of 0-30%, and a melt index from
10 to 3500 with a melt index range of 20 to 2300 for some
embodiments. A low density polyethylene with a melt index
higher than 200 is also suitable for use. Other embodiments of
the white layer include ethylene vinyl acetate copolymer resin,
EVA, with vinyl acetate percentages up to 50%/EVA are
modifiable with an additive such as DuPont Elvax, manufactured
IPR2020-00628
Patent RE41,623 E

8
by DuPont de Nemours of Wilmington, Del. These resins have
a Vicat softening point of about 40 degrees to 220 degrees C.,
with a range of 40 degrees to 149 degrees C. usable for some
embodiments.
Id. at 6:8–20.
Referring once again to the embodiment of Figure 5, the ’623 patent
describes an image transfer process. Specifically, the ’623 patent discloses
that “an image is imparted to the polymer component of the peel layer 520
utilizing a top coat image-imparting material such as ink or toner.” Id.
at 9:7–9. The ’623 patent explains that “[t]he image transfer sheet 500 is
applied to the colored base material so that the polymeric component of the
peel layer 520 contacts the colored base” and a source of heat is applied to
the image transfer sheet 500. Id. at 9:18–26. Thus, “[t]he peel layer 520
transfers the image” and “[t]he application of heat to the transfer sheet 500
results in ink or other image-imparting media within the polymeric
component of the peel layer being changed in form to particles encapsulated
by the polymeric substrate.” Id. at 9:28–32. As a result, “[t]he encapsulated
ink particles or encapsulated toner particles and encapsulated titanium oxide
particles are then transferred to the colored base in a mirror image to the ink
image or toner image on the polymeric component of the peel layer 520.”
Id. at 9:36–40. The ’623 patent further explains the following:
[b]ecause the polymeric component of the peel layer 520
generally has a high melting point, the application of heat, such
as from an iron, does not result in melting of this layer or in a
significant change in viscosity of the overall peel layer 520. The
change in viscosity is confined to the polymeric component that
actually contacts the ink or toner or is immediately adjacent to
the ink or toner. As a consequence, a mixture of the polymeric
component, titanium oxide or other white or luminescent
pigment, and ink or toner is transferred to the colored base as an
IPR2020-00628
Patent RE41,623 E

9
encapsulate whereby the polymeric component encapsulates the
ink or toner or titanium oxide or other white pigment. It is
believed that the image transfer sheet, with the white titanium
oxide or other white or luminescent pigment background is
uniquely capable of both cold peel and hot peel with a very good
performance for both types of peels.
Id. at 9:41–55.
C. Illustrative Claims
Petitioner challenges claims 1–17 of the ’623 patent. Of the
challenged claims, claims 1 and 6 are independent, are illustrative, and are
reproduced below.
1. A method for transferring an image to a colored
substrate comprising woven, fabric based material, or paper,
comprising:
providing an image transfer sheet comprising an image
transfer substrate; a release layer contacting the image transfer
substrate and an image-imparting layer that comprises a polymer
that includes indicia wherein the release layer is impregnated
with one or more of titanium oxide or other white pigment or
luminescent pigment;
peeling the image transfer substrate from the image
transfer sheet;
contacting at least the remaining portions of the image
transfer sheet to the colored substrate comprising woven, fabric
based material, or paper; and
applying heat to at least the remaining portions of the
image transfer sheet so that an image including indicia from the
image-imparting layer is transferred from the image transfer
sheet to the colored substrate comprising woven, fabric based
material, or paper wherein the image comprises a substantially
white background or luminescent background and indicia.
Ex. 1001, 11:44–12:7 (emphasis omitted).
IPR2020-00628
Patent RE41,623 E

10
6. An image transfer sheet, comprising:
a colored, substrate comprising woven, fabric based
material, or paper;
a release layer overlaying the substrate, wherein the
release layer is impregnated with titanium oxide or other white
pigment or luminescent pigment; and
a polymer layer.
Id. at 12:20–26.
D. Prior Art and Asserted Grounds of Unpatentability
Petitioner contends that claims 1–17 are unpatentable based on the
following grounds:
Claims Challenged 35 U.S.C. §3 References/Basis
1–17 103 Oez-US,4 Meyer5
8, 17 103 Oez-US, Meyer, Kronzer6
1–17 103 Oez-PCT,7 Oez-US
1–17 103 Kronzer, Oez-US
1–17 103 Kronzer, Meyer

3 The Leahy-Smith America Invents Act (“AIA”), Pub. L. No. 112-29, 125
Stat. 284, 287–88 (2011), amended 35 U.S.C. § 103, effective March 16,
2013. Because the application from which the ’042 patent issued was filed
before this date, the pre-AIA version of § 103 applies.
4 Oez, US 5,655,476, issued Sept. 9, 1997 (Ex. 1013, “Oez-US”).
5 Meyer et al., US 3,359,127, issued Dec. 19, 1967 (Ex. 1019, “Meyer”).
6 Kronzer, US 5,798,179, issued Aug. 25, 1998 (Ex. 1018, “Kronzer”).
7 Oez, WO 97/41489, published Nov. 6, 1997 (Ex. 1016, “Oez-PCT”).
References to Oez-PCT are to Exhibit 1016, which is an English-language
translation of Oez-PCT with line numbers. Pet. 4.
IPR2020-00628
Patent RE41,623 E

11
Pet. 5. We instituted trial on all asserted grounds. DI 2, 41; SAS, 138 S. Ct.
at 1355.
II. ANALYSIS
A. Legal Standards
To prevail in its challenge, Petitioner must demonstrate by a
preponderance of the evidence that the claims are unpatentable. 35 U.S.C.
§ 316(e); 37 C.F.R. § 42.1(d) (2019). A claim is unpatentable under
35 U.S.C. § 103 if the differences between the claimed subject matter and
the prior art are such that the subject matter, as a whole, would have been
obvious at the time of the invention to a person having ordinary skill in the
art. KSR Int’l Co. v. Teleflex, Inc., 550 U.S. 398, 406 (2007). The question
of obviousness is resolved on the basis of underlying factual determinations
including (1) the scope and content of the prior art; (2) any differences
between the claimed subject matter and the prior art; (3) the level of ordinary
skill in the art; and (4) objective evidence of nonobviousness.8 Graham v.
John Deere Co., 383 U.S. 1, 17–18 (1966).
To show obviousness, it is not enough to merely show that the prior
art includes separate references covering each separate limitation in a
challenged claim. Unigene Labs., Inc. v. Apotex, Inc., 655 F.3d 1352, 1360
(Fed. Cir. 2011). “This is so because inventions in most, if not all, instances
rely upon building blocks long since uncovered, and claimed discoveries
almost of necessity will be combinations of what, in some sense, is already
known.” KSR, 550 U.S. at 418–419.

8 The parties have not asserted or otherwise directed our attention to any
objective evidence of nonobviousness.
IPR2020-00628
Patent RE41,623 E

12
On the other hand, an obviousness analysis “need not seek out precise
teachings directed to the specific subject matter of the challenged claim, for
a court can take account of the inferences and creative steps that a person of
ordinary skill in the art would employ.” Id. at 418; accord In re Translogic
Tech., Inc., 504 F.3d 1249, 1259 (Fed. Cir. 2007). However, Petitioner
cannot satisfy its burden of proving obviousness by employing “mere
conclusory statements.” In re Magnum Oil Tools Int’l, Ltd., 829 F.3d 1364,
1380 (Fed. Cir. 2016). Instead, Petitioner must articulate a reason why a
person of ordinary skill in the art would have combined or modified the prior
art references. In re NuVasive, Inc., 842 F.3d 1376, 1382 (Fed. Cir. 2016);
see also Metalcraft of Mayville, Inc. v. The Toro Co., 848 F.3d 1358, 1366
(Fed. Cir. 2017) (“In determining whether there would have been a
motivation to combine prior art references to arrive at the claimed invention,
it is insufficient to simply conclude the combination would have been
obvious without identifying any reason why a person of skill in the art would
have made the combination.”); Belden Inc. v. Berk-Tek LLC, 805 F.3d 1064,
1073 (Fed. Cir. 2015) (“[O]bviousness concerns whether a skilled artisan not
only could have made but would have been motivated to make the
combinations or modifications of prior art to arrive at the claimed
invention.”) (citing InTouch Techs., Inc. v. VGO Commc’ns, Inc., 751
F.3d 1327, 1352 (Fed. Cir. 2014)).
B. Level of Ordinary Skill in the Art
In the Decision on Institution, we determined that a person of ordinary
skill in the art at the time of the invention of the ’623 patent
would have at least a Bachelor’s degree in Chemistry, Chemical
Engineering, Imaging Technology or Material Science with at
IPR2020-00628
Patent RE41,623 E

13
least one year of experience in coating technologies and imaging
technologies, or at least five years of work experience in the field
of coating technologies and imaging technologies.
DI 13 (adopting Patent Owner’s proposed definition).
For purposes of this Final Written Decision, we maintain our
determination from the Decision on Institution because neither party
disputes that determination and because the level of skill is consistent with
the record. See PO Resp. 13; see generally Pet. Reply.
C. Claim Construction
In an inter partes review filed on or after November 13, 2018, we
construe claims “using the same claim construction standard that would be
used to construe the claim in a civil action under 35 U.S.C. 282(b), including
construing the claim in accordance with the ordinary and customary
meaning of such claim as understood by one of ordinary skill in the art and
the prosecution history pertaining to the patent.” 37 C.F.R. § 42.100(b); see
Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc).
Furthermore, we expressly construe the claims only to the extent necessary
to resolve the parties’ dispute. See Nidec Motor Corp. v. Zhongshan Broad
Ocean Motor Co. Ltd., 868 F.3d 1013, 1017 (Fed. Cir. 2017) (“[W]e need
only construe terms ‘that are in controversy, and only 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))).
IPR2020-00628
Patent RE41,623 E

14
1. “white layer”9
In the Decision on Institution, we construed the term “white layer” to
mean “a layer comprising a concentration or configuration of pigment
providing a white background for received indicia and which further
comprises a polymer that melts and mixes with another layer or layers
during application.” DI 14–15. Our construction was based on the parties’
agreement that the claims of the ’623 patent require a white layer that melts
and mixes with another layer and on the claim construction the district court
adopted in the Arkwright Lawsuit. Ex. 1022, 17 (Arkwright Lawsuit
Markman Order). The district court in the Delaware Lawsuit also adopted a
similar construction of “white layer.” Ex. 1066, 6 (Delaware Markman
Order). In the Decision on Institution, we rejected Patent Owner’s attempt
to broaden the interpretation adopted in the Arkwright Lawsuit to include “a
polymer that softens or melts and mixes to some degree with another layer.”
Id. (Patent Owner’s modifications indicated by underlining); Prelim.
Resp. 12–13.
Patent Owner now requests that we adopt a construction of “white
layer” that includes “a layer comprising a concentration or configuration of
pigment providing a white background for received indicia and which
further comprises a polymer that softens or melts, such that it mixes with
another layer or layers during application, without the resulting composition
needing to be substantially uniform.” PO Resp. 18 (Patent Owner’s
modifications indicated with underlining). We decline to adopt Patent

9 Although the term “white layer” is not expressly recited in claim 1 of the
’623 patent, both parties agree that all claims of the ’623 patent require a
white layer that melts and mixes. See, e.g., Pet. 18–19; PO Resp. 14–15.
IPR2020-00628
Patent RE41,623 E

15
Owner’s construction for the same reasons expressed in our Decision on
Institution. DI 14–15. We further note that Patent Owner states that “the
parties’ disputes with respect to the construction of the ‘white layer’ make
no difference to the Board’s resolution of this matter.” PO Resp. 15;
Tr. 13:24–14:3, 53:9–54:13. Accordingly, and for purposes of this Final
Written Decision, we maintain our construction of the term “white layer.”
2. order of steps
Petitioner argues that the method steps recited in claim 1, i.e., the
“contacting,” “peeling,” and “applying” steps, are not required to be
performed in any particular order. Pet. 21. Specifically, Petitioner asserts
that during the Interference Proceedings, “Patent Owner repeatedly made
clear that these three steps do not have to be performed in any particular
order, i.e, the claim covers peel first then apply heat or vice versa.” Id.
(citing Ex. 1030, 17, 19; Ex. 1020 ¶¶ 79–80). Patent Owner “adopt[s]
Petitioner’s argued construction regarding the order of steps” but contends
that it “does not waive its right to argue that Claim 1 does require the steps
to be performed in a particular order.” PO Resp. 15.
However, neither Patent Owner nor Petitioner argue that the
resolution of this inter partes review depends on the particular order of the
steps recited in the claims. See generally Pet.; PO Resp. Accordingly, we
apply the Petitioner’s claim construction position—which Patent Owner
does not dispute—that the claims do not require any particular order of
contacting, peeling, and applying. See Nidec, 868 F.3d at 1017 (Fed. Cir.
2017) (citing Vivid Techs., 200 F.3d at 803 (“[W]e need only construe terms
‘that are in controversy, and only to the extent necessary to resolve the
controversy.’”)).
IPR2020-00628
Patent RE41,623 E

16
3. other terms
Petitioner additionally urges us to adopt the constructions from the
Arkwright Lawsuit for the terms “overlaying/overlaid,” “colored substrate,”
“contacting/contactable,” impregnated,” “layer,” and “mix/mixed/mixture.”
Pet. 18–19. Petitioner also notes that Patent Owner proposed constructions
for “indicia,” “image-imparting layer,” and “encapsulates” in the companion
Michigan Lawsuit, though “Petitioner does not believe that any of these
additional terms have a meaningful impact on the asserted grounds in this
proceeding. Id. at 22. Patent Owner is silent as to whether these terms
require express construction. See generally PO Resp.
As we did in our Decision on Institution, we determine the above-
identified terms require no express construction. See Nidec, 868 F.3d
at 1017.
D. Alleged Obviousness over Kronzer and Oez-US (claims 1–17)
Petitioner contends claims 1–17 would have been obvious over
Kronzer in view of Oez-US. Pet. 52. Petitioner directs us to portions of
Kronzer and Oez-US that purportedly disclose each of the limitations in the
challenged claims. Id. at 54–66. Petitioner also relies on the declaration
testimony of Dr. Wanat to support its arguments. See id.
1. Kronzer (Ex. 1018)
Kronzer relates to a printable heat transfer paper having cold release
properties to permit the removal of the carrier or base sheet after the transfer
sheet has cooled. Ex. 1018, code (57), 2:25–30. According to Kronzer, the
heat transfer paper includes a flexible first layer, or base sheet, that has
“sufficient strength for handling, coating, sheeting, and other operations
associated with its manufacture, and for removal after transferring an
IPR2020-00628
Patent RE41,623 E

17
image.” Id. at 4:15–26. The heat transfer paper includes a second layer, or
“release layer,” disposed on the base sheet and composed of a thermoplastic
polymer having essentially no tack at transfer temperatures. Id. at 5:23–45.
A third layer, overlaying the second layer, includes a thermoplastic polymer
which melts in a range from about 65° C to about 180° C. Id. at 5:46–48.
According to Kronzer, “[t]he third layer functions as a transfer coating to
improve the adhesion of subsequent layers in order to prevent premature
delamination of the heat transfer material.” Id. at 5:48–51. A fourth layer
overlays the third layer to provide a layer on which an image is placed by an
ink jet printer. Id. at 7:3–6. The printable heat transfer material of Kronzer
may further include a fifth layer, including a film-forming binder and
located between the second and third layers, to improve adhesion and
prevent delamination. Id. at 8:31–46. Additionally, Kronzer states that “any
of the foregoing film layers may contain other materials, such as processing
aids, release agents, pigments, deglossing agents, antifoam agents, and the
like,” because “use of these and similar materials is well known to those
having ordinary skill in the art.” Id. at 8:47–51.
2. Oez-US (Ex. 1013)
Oez-US “relates to a transfer paper and to a process for transferring
photocopies to textiles, such as, in particular, T-shirts.” Ex. 1013, 1:6–8.
Oez-US describes “a transfer paper which has, as the coating of plastic, at
least: a polyurethane which can be cross-linked under the action of heat by a
melamine-formaldehyde resin esterified with methanol, mixed with an
acrylic acid ester/acrylic acid copolymer, the latter being a thickener.” Id.
at 1:37–42. Oez-US states that it is of “essential importance that a white
pigment (TiO2) can be incorporated into the mixture so that the prior white
IPR2020-00628
Patent RE41,623 E

18
coating of dark (black) textiles hitherto necessary can now be dispensed with
and the print can be transferred immediately with a single film.” Id. at 1:51–
55.
Oez-US discloses that the coating “can be peeled off from the paper as
a film and can be laid as a positive on the textile substrate to be ironed on
and to bond with the textile fibers.” Id. at 1:47–49. Oez-US describes
ironing the film onto a textile “at elevated temperatures.” Id. at 3:56–58.
3. Analysis of Claim 1
Petitioner contends that Kronzer, like claim 1, “teaches a heat transfer
paper comprising several layers, including a first layer ‘base sheet’ (i.e.,
substrate), a second ‘release layer’ disposed on the base sheet, a third
polymer layer overlaying the second layer, and a fourth “print layer” for
receiving/imparting an image overlaying the third layer.” Id. at 52–53
(citing Ex. 1018, 4:27–8:31; Ex. 1020 ¶¶ 88, 185–190). Petitioner further
asserts that Kronzer may include additional materials, such as pigments, in
any of its above-identified layers. Id. at 56 (citing Ex. 1018, 8:47–51).
Petitioner acknowledges that “Kronzer does not expressly disclose
that its release layer includes a ‘white’ pigment [but,] this feature is taught
by Oez-US.” Id. (Ex. 1013, 1:47–55, 3:32–54). Petitioner explains that one
of ordinary skill in the art would have had reason to substitute the white
pigment, described by Oez-US, for the pigment in Kronzer’s release layer
because “Oez-US . . . expressly teaches that its transfer sheets ‘can be used
particularly advantageously on dark (black) fabrics.” Id. at 54 (citing
Ex. 1013, 2:50–51, 1:27–31; Ex. 1020 ¶¶ 92, 185–194); see also id. at 57
(explaining that doing so “provides a contrasting white background for
application of images onto dark fabrics”). Petitioner further alleges that
IPR2020-00628
Patent RE41,623 E

19
Kronzer and Oez-US teach the mix and melt requirement because “adjacent,
contacting layers of polymers that are heated to their melting (or softening)
temperatures will necessarily mix.” Id. at 57. Dr. Wanat testifies that “a
[person of ordinary skill in the art] would have understood that Kronzer’s
white layer (i.e., third layer with TiO2/white pigment as taught by Oez-US)
would melt and mix with other adjacent layers of the image transfer sheet,
such as the fourth/image-imparting layer” when heat is applied. Id. at 57–58
(citing Ex. 1020 ¶¶ 38–59, 195–198; Ex. 1018, 2:45–67).
Lastly, Petitioner asserts that Kronzer teaches peeling the first/backing
layer from the transfer sheet (id. at 59 (citing Ex. 1018, 4:6–14, 12:12–43;
Ex. 1020 ¶ 201)), that “the polymers in its image transfer sheet ‘bond to the
fabric when heat and pressure are used to effect transfer’” (id. at 59–60
(citing Ex. 1018, 4:1–2, 6:16–20; Ex. 1020 ¶ 202)), and that heat is applied
during transfer using a “non-steam hand iron set at about 163°-177° C” (id.
at 60 (citing Ex. 1018, 9:4–7; Ex. 1020 ¶¶ 203–204)). According to
Petitioner, “Kronzer teaches first placing its image transfer sheet on a fabric,
applying heat to effect an image transfer, and (after cooling) peeling off the
first/base layer.” Id. at 60 (citing Ex. 12:12–18:6). Petitioner further
explains that “a [person of ordinary skill in the art] would have found it
obvious to modify Kronzer to [reorder its steps] based on the teachings of
Oez-US” and to first peel off the substrate layer and then apply the image
transfer sheet to the fabric so that the image is placed “face up,” before
applying heat. Id. at 61 (citing Ex. 1013, 1:27–31, 2:50–51; Ex. 1020
¶¶ 205–209). Therefore, Petitioner reasons that the combination of Kronzer
and Oez-US discloses the steps claim 1 requires, even under a construction
IPR2020-00628
Patent RE41,623 E

20
of claim 1 that requires performing the steps in the specific order recited in
claim 1.
Patent Owner does not challenge any of Petitioner’s allegations
regarding the teachings of Kronzer and Oez-US. See generally PO Resp.
We have reviewed the evidence and argument of record and determine that
Petitioner establishes, by a preponderance of the evidence, each limitation of
claims 1–17 of the ’623 patent is present in either Kronzer or Oez-US.
Patent Owner, however, does allege that Petitioner has not
demonstrated a reason one of ordinary skill in the art would have combined
the Oez-US pigment with Kronzer’s structure or that such a combination
would have yielded a reasonable expectation of success. Id. at 25.10 Patent
Owner further asserts that because of the differences between Kronzer and
Oez-US, a person of ordinary skill in the art would not have had a reason to
combine their teachings to achieve the invention claimed by the ’623 patent.
Id. at 29. We address Patent Owner’s arguments below.
a) whether Petitioner has established a reason to combine
Kronzer and Oez-US
Patent Owner argues that Petitioner has failed to meet its burden of
establishing that a person skilled in the art would have been motivated to

10 Patent Owner, relying on our Decision on Institution (DI 31), further
contends that “[t]o the extent Petitioners are arguing that Kronzer’s third
layer be replaced with Oez’s white layer, the combination would not result
in a white layer that has a polymer that melts and mixes with another layer
or layers” because of cross-linking in Oez-US. Id. at 25 n.2. As we
explained in our Decision on Institution, Petitioner does not argue that Oez-
US’s entire white layer is included in Kronzer. DI 31–32. Rather, Petitioner
proposes that only the white pigment itself is included in Kronzer’s third
layer. Id.; see infra Section II.D.4.
IPR2020-00628
Patent RE41,623 E

21
combine Kronzer and Oez-US and that each of Petitioner’s reasons to
combine must fail. PO Resp. 25–29. Patent Owner contends that
Petitioner’s first reason, i.e., that each reference teaches “printable multi-
layered transfer structures having a removable substrate, release coating, and
image-imparting layer,” is incorrect. Id. at 26. Patent Owner explains that
“every example and every claim in Oez teaches a single coating of plastic,
not a multi-layered transfer with a distinct ‘image-imparting layer.’” Id.
Patent Owner additionally argues that mere identity of subject matter
between two references is insufficient to establish that the skilled artisan
would have had a reason to combine the teachings of those references. Id.
Petitioner asserts that Patent Owner’s allegation regarding Oez-US
being limited to a single layer of plastic is “demonstrably false.” Pet.
Reply 3. Petitioner explains that “Oez-US discloses and claims a multi-
layered transfer sheet” and that “[Patent Owner’s] expert admitted as much
during his deposition.” Id. at 3–4 (citing Ex. 1013, 2:36–44; Ex. 1062 ¶ 6;
Ex. 1063, 295:8–296:18).
We agree with Petitioner that Oez-US is not limited to a single layer
coating and instead encompasses multi-layered designs. Here, Petitioner
shows that Oez-US, like Kronzer, describes multi-layered transfer structures.
See Ex. 1013, 2:36–44 (describing a polymer layer between the paper and
the polyurethane layer), claim 12 (same); see also Ex. 1063, 295:8–296:18
(testimony by Dr. Ellison describing Oez-US as having a second, optional
layer).
Furthermore, although we agree with Patent Owner that identity of
subject matter, alone, is insufficient to demonstrate that the ordinarily skilled
artisan would have had reason to combine the teachings of Kronzer and Oez-
IPR2020-00628
Patent RE41,623 E

22
US, Petitioner does not rely on identity of subject matter alone, as discussed
in more detail below. Moreover, we consider Petitioner’s discussion of the
identity of subject matter in the references relevant for purposes of
demonstrating the references are analogous art, which is part of the
obviousness analysis. Wyers v. Master Lock Co., 616 F.3d 1231, 1238 (Fed.
Cir. 2010); see also In re Kahn, 441 F.3d 977, 987–88 (Fed. Cir. 2006)
(noting that the inquiry as to whether a person of ordinary skill in the art
would have sought to combine the references “picks up where the analogous
art test leaves off”).
Patent Owner next challenges Petitioner’s argument that Kronzer and
Oez-US “share the common goal of improving image transfer
characteristics” because “Kronzer and Oez-US solve fundamentally different
problems using fundamentally different technologies.” PO Resp. 27. Patent
Owner explains that Kronzer “solves the problem of creating an image
transfer that has ‘cold release properties’” where, in contrast, Oez-US
“solves the problem of printing in ‘positive,’ incorporating white pigment
into ‘a coating of plastic,’ and the use of ‘black textiles.’” Id. Therefore,
Patent Owner reasons that “the divergent goals and solutions of the two
inventions demonstrate why a [person of ordinary skill in the art] would not
be motivated to combine them.” Id. at 27–28.
Similarly, Patent Owner also contends that the fact that “Oez-US
teaches that its transfer sheets ‘can be used particularly advantageously on
dark (black) fabrics” is not a reason to combine Oez-US with Kronzer. Id.
at 28. According to Patent Owner, “Petitioner does not argue that Kronzer’s
structure provides something beneficial that is lacking in Oez-US that would
be improved by combining it with Kronzer” or how “the combination of the
IPR2020-00628
Patent RE41,623 E

23
two references would result in some new desirable feature.” Id. As a result,
Patent Owner argues that Petitioner’s combination of Kronzer and Oez-US
was motivated by Petitioner’s improper use of the ’623 patent claims as a
“roadmap.” Id. at 29
Petitioner maintains that “Kronzer and Oez-US are both directed to
improving the image transfer quality of multi-layer transfer sheets.” Pet.
Reply 5 (citing Pet. 52–54; Ex. 1020 ¶¶ 88, 92, 185–194; Ex. 1062 ¶¶ 11–
12). Citing our Decision on Institution, Petitioner explains that “Kronzer’s
teachings are applicable to image transfers on any color fabric . . . and . . .
[that] a [person of ordinary skill in the art] would have understood from
Oez-US’s teachings that a ‘positive’ image would be printed on top of
Kronzer’s layer in conjunction with adding white pigment.” Id. (citing
DI 33–34; Ex. 1020 ¶¶ 92–93, 207–209; Ex. 1062 ¶¶ 7–14, 43). Petitioner
further explains that “[t]hese grounds do not propose to modify or improve
anything in Oez-US. Rather, Petitioner demonstrated that it would be
obvious to improve Kronzer by adding a white pigment, as taught by Oez-
US.” Pet. Reply 5. Petitioner asserts that the motivation for combining the
references is found explicitly in Oez-US; that is, “having a white opaque
layer on top of which a ‘positive’ image is printed in a transfer sheet to
enhance image quality on dark fabrics.’” Id. (citing Pet. 52–54; Ex. 1013,
1:27–31, 2:50–51; Ex. 1020 ¶¶ 7–12).
In weighing the evidence and arguments before us, we find Petitioner
advances sufficient reasoning with rational underpinnings to explain why
one of ordinary skill in the art would have had reason to combine Kronzer
and Oez-US. Pet. 52–54, 56–57. Petitioner relies on Oez-US’s express
teaching that including a white pigment “ensures a greater brilliance of the
IPR2020-00628
Patent RE41,623 E

24
image . . . especially for printing black textiles.” Id. at 54 (citing Ex. 1013,
1:29–31, 1:47–55, 2:50–51). Accordingly, Petitioner reasons that a person
of ordinary skill in the art would have included the white pigment of Oez-US
in the polymer layer of Kronzer to provide a contrasting opaque background
for image transfers to dark/black fabrics. Id. at 54 (citing Ex. 1020 ¶¶ 92,
185–194).
Patent Owner’s arguments do not address Petitioner’s primary
argument, as Patent Owner focuses on alleged differences in how Kronzer
and Oez-US solve allegedly different problems, whereas Petitioner focuses
on improving the quality of image transfer in general, which is a common
goal in both Kronzer and Oez-US. Thus, we disagree that Kronzer and Oez-
US have “divergent goals” such that a person of ordinary skill in the art
would not have had reason to take advantage of the benefits described in
Oez-US. See KSR, 550 U.S. at 420 (“Under the correct analysis, any need or
problem known in the field of endeavor at the time of invention and
addressed by the patent can provide a reason for combining the elements in
the manner claimed.”).
Patent Owner’s additional argument—that Petitioner does not allege
that something is missing from Oez-US or that the combination with
Kronzer improves Oez-US—once again misses the main point of
Petitioner’s argument. Petitioner’s arguments are based on Oez-US
supplying something beneficial that is missing from Kronzer, and therefore,
improving the system of Kronzer, not the reverse. We thus disagree that
Petitioner has not indicated why a person of ordinary skill in the art would
have been motivated to combine Oez-US and Kronzer, and Petitioner’s
IPR2020-00628
Patent RE41,623 E

25
reliance on express teachings from Oez-US and Kronzer undermine any
argument that Petitioner improperly relies on hindsight.
b) whether a person of ordinary skill in the art would not have
had reason to combine Kronzer and Oez-US to yield the
invention described in the ’623 patent claims
Patent Owner further argues that there is affirmative evidence of
record demonstrating that a person of ordinary skill in the art would not have
had reason to combine the teachings of Kronzer and Oez-US. PO Resp. 29.
Specifically Patent Owner contends that
[t]his evidence includes: (1) Kronzer’s trials all involve
transparent, non-pigmented sheets that would pose issues if
transferred to dark t-shirts; (2) Kronzer and Oez rely upon
different chemical reactions; (3) Kronzer and Oez employ
different structures; (4) Kronzer and Oez solve different
problems and use different technologies to solve those problems;
and (5) Kronzer and Oez use opposite methods of application[].
Id. Patent Owner additionally alleges that because Petitioner incorporates
only the white pigment from Oez-US, “while ignoring the impact of other
functions of the white pigment,” the person of ordinary skill in the art would
not have had a reasonable expectation of success. Id. at 29–30. We address
each of Patent Owner’s arguments below.
(1) whether a person of ordinary skill in the art would not have
had reason to combine Kronzer with Oez-US where
Kronzer does not solve or address problems associated
with dark fabrics
Patent Owner argues that “a [person of ordinary skill in the art] would
not be motivated to combine Kronzer with Oez-US to create the inventions
of the ‘623 Patent . . . because Kronzer does not solve – or even
acknowledge – the problem of transferring an image onto dark fabric.” PO
Resp. 30 (citing Ex. 1018; Ex. 2011 ¶¶ 164, 267–280). For example, Patent
IPR2020-00628
Patent RE41,623 E

26
Owner contends that Kronzer does not acknowledge that conventional,
transparent transfers result in an image that has insufficient brilliance on
dark fabric, and that none of Kronzer’s examples utilize a pigment at all, let
alone one used to form an opaque background for dark fabrics. Id. at 31.
Petitioner “asserts that Oez-US—not Kronzer—discloses the problem
of transferring images onto dark fabrics and discloses the solution to that
problem; i.e., including a white/opaque pigment to provide a white/opaque
background onto which a positive image can be printed”—the same issue the
’623 patent purports to solve. Pet. Reply 6. Petitioner further explains that
Kronzer is not limited to any fabric color and “expressly suggests the use of
pigments in its layers.” Id.
Contrary to Patent Owner’s assertions, Kronzer need not solve much
less acknowledge, the problem of dark image transfer. The test for
obviousness is not whether the claimed invention is expressly suggested in
any one or all of the references, but whether the claimed subject matter
would have been obvious to those of ordinary skill in the art in light of the
combined teachings of those references. See In re Keller, 642 F.2d 413, 425
(CCPA 1981). One of ordinary skill can use his or her ordinary skill,
creativity, and common sense to make the necessary adjustments and further
modifications to result in a properly functioning device. See KSR, 550 U.S.
at 418 (“a court can take account of the inferences and creative steps that a
person of ordinary skill in the art would employ”). And where “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.” See id. at 417. Here, Kronzer teaches each element of claim 1 of
IPR2020-00628
Patent RE41,623 E

27
the ’623 patent—including a pigment in any one of its polymer layers.
Pet. 52–62. Kronzer, however, is silent as to the color of the pigment and
the color of the substrate used. Oez-US teaches the use of a white, opaque
pigment and explains that a white pigment “ensures a greater brilliance of
the image . . . especially for printing on black textiles.” Ex. 1013, 1:28–29.
Thus, we agree with Petitioner that the ordinarily skilled artisan would have
had reason to improve Kronzer’s method to include Oez-US’s white
pigment.
(2) whether a person of ordinary skill in the art would not have
had reason to combine Oez-US’s white pigment alone
without cross-linking and whether a reasonable expectation
of success exists
Patent Owner argues that a person of ordinary skill in the art would
not have had reason to use only the white pigment from Oez-US because
Oez-US teaches away from a white layer that does not cross-link. PO
Resp. 32. According to Patent Owner, “[t]he cross-linking reaction in Oez is
required for the white layer of Oez to function.” Id. Patent Owner explains
that “[t]ransferring a pigment from a reactive system (Oez) to a non-reactive
system (Kronzer) raises significant challenges from a chemistry and
materials science perspective.” Id. at 33 (citing Ex. 2011 ¶¶ 168, 267–280).
As a result, Patent Owner explains that “a ‘drop in’ replacement for an
existing ingredient that will result in the identical finished part color” is
“extremely rare.” Id. at 33–34 (citing Ex. 2012, 3). Patent Owner also states
“that, in the reactive system of Oez, the titanium dioxide performs multiple
functions beyond providing whiteness.” Id. at 34 (citing Ex. 2011 ¶¶ 171,
267–280). Patent Owner further argues that titanium dioxide is a particulate,
which “would change the viscosity and flow properties of the third layer at
IPR2020-00628
Patent RE41,623 E

28
transfer temperatures.” Id. (citing Ex. 2011 ¶¶ 172, 267–280). In addition,
“solid state characteristics of the third layer, such as modulus, elasticity, and
flexibility” would also be changed. Id. As a result, a person of ordinary
skill in the art would not have had a reasonable expectation of success. Id.
at 34–35. Patent Owner states that its argument is supported by the
numerous failures of the Kronzer system. Id. at 33.
Petitioner asserts that nothing in Oez-US teaches away from using
only the white pigment; “[r]ather, it is undisputed that Oez-US explicitly
teaches that including TiO2 in a transfer sheet layer improves the image
transfer quality onto dark fabrics.” Pet. Reply 6–7 (citing Ex. 1062 ¶¶ 87–
91; Ex. 1013, 1:46–55). And “Kronzer encourages using pigments in its
polymer layers.” Id. at 6 (citing Ex. 2011 ¶¶ 16–20; Ex. 1018, 8:46–51).
Petitioner asserts that a person of skill in the art would have understood “that
TiO2 would function as a white pigment—and provide a white/opaque
background—regardless of whether it was present in a cross-linked
polymer or a non-cross-linked polymer,” as Dr. Ellison admits. Id. (citing
Ex. 1062 ¶¶ 17–20; Ex. 1063, 304:8–22). Petitioner further states that
neither Patent Owner nor its expert cite to record evidence “to support their
assertion that TiO2 somehow participates in the cross-linking reaction in
Oez-US.” Id. (citing PO Resp. 42–43; Ex. 2011 ¶¶ 141–148; Ex. 1063,
302:4–303:21).
We do not agree with Patent Owner’s argument that Oez-US teaches
away from using white pigment alone or that Oez-US requires a cross-
linking polymer for the white pigment to function. See PO Resp. 32. To
teach away, a reference must discourage one of ordinary skill in the art from
following the path set out in the reference, or lead that person in a direction
IPR2020-00628
Patent RE41,623 E

29
divergent from the path taken by the applicant. In re Gurley, 27 F.3d 551,
553 (Fed. Cir. 1994) (“[A] reference will teach away if it suggests that the
line of development flowing from the reference’s disclosure is unlikely to be
productive of the result sought by the applicant.”). “A reference does not
teach away . . . if it merely expresses a general preference for an alternative
invention but does not ‘criticize, discredit, or otherwise discourage’
investigation into the invention claimed.” DePuy Spine, Inc. v. Medtronic
Sofamor Danek, Inc., 567 F.3d 1314, 1327 (Fed. Cir. 2009) (quoting In re
Fulton, 391 F.3d 1195, 1201 (Fed. Cir. 2004)). Patent Owner does not
identify any teaching in Oez-US that either requires use of a cross-linking
polymer with its white pigment or discourages use of a white pigment
without a cross-linking polymer. And our independent review of Oez-US
does not reveal any such teaching. The fact that Oez-US uses a white
pigment in conjunction with a cross-linked polymer does not mean that
cross-linking is required for titanium dioxide to function as a pigment, nor
does it teach away from pursuing the path taken in the ’623 patent.
Patent Owner’s arguments that transferring a white pigment from a
reactive to non-reactive system would be unpredictable because the titanium
dioxide performs functions beyond whiteness and because the properties and
characteristics of the layer would be altered are similarly unavailing. See PO
Resp. 33–34. Neither Patent Owner nor its expert, Dr. Ellison, identifies
anything in Oez-US that suggests the titanium dioxide performs functions
other than to provide a contrasting background. See generally id.; Ex. 2011.
Rather, Oez-US consistently refers to the white pigment or titanium dioxide
as responsible for providing contrast for images transferred to dark colored
textiles. Ex. 1013, 1:28–29, 1:50–52, 2:50–51. In fact, Oez-US states that
IPR2020-00628
Patent RE41,623 E

30
“[i]f white textiles are to be printed on, the titanium oxide pigment can be
omitted.” Id. at 2:31–32. Further, Dr. Ellison’s testimony that “white
pigments like titanium dioxide often have a surface chemistry [that] . . . can
interact with components of reactive systems [and] . . . can itself chemically
react with the components of the single polymer layer of Oez[-US] and
become part of the crosslinked network,” is inconclusive and, at best,
describes possible interactions in a reactive system—not in a non-reactive
system as Petitioner proposes. Ex. 2011 ¶ 171 (emphasis added).
Furthermore, record evidence supports Petitioner’s position that a person of
ordinary skill in the art would have understood titanium dioxide within a
polymer layer to provide a white background whether the polymer is cross-
linked or not. Ex. 1062 ¶¶ 17–18 (citing Ex. 1055 ¶¶ 120–121); Ex. 1063,
304:8–22 (Dr. Ellison’s testimony that the reactions described in Oez-US
would not be required for titanium dioxide to provide whiteness). Regarding
the purported changes titanium dioxide would have on certain properties or
characteristics of the polymer layers, Patent Owner’s argument is based
solely on the conclusory declaration testimony of Dr. Ellison. See Ex. 2011
¶¶ 141–148, 171–172.
Similarly, Patent Owner’s argument that “it is ‘extremely rare’ to find
a ‘drop in’ replacement” for titanium dioxide (PO Resp. 34) is unavailing
because it is based on an incomplete understanding of the referenced articles
and is conclusory. Patent Owner relies on Dr. Ellison’s testimony and
Exhibits 2012 and 2013. But Dr. Ellison admits the book excerpted in
Exhibit 2013 is not relevant to inorganic pigments, like titanium dioxide, and
that he had not “studied” the details of the paper in Exhibit 2012, which
identifies the problem with titanium dioxide only as a possible color shift or
IPR2020-00628
Patent RE41,623 E

31
variance in lightness of up to 10%. Pet. Reply 8, 22–23 (citing Ex. 1063
343:11–347:7, 350:5–355:2). Indeed, Petitioner identifies persuasive
evidence demonstrating that titanium dioxide is the most widely-used and
well-known white pigment. Pet. Reply 7 (citing Ex. 1062 ¶¶ 17–20; Ex.
1054; Ex. 1056; Ex. 1018, 6:4–8); see also Ex. 2012, 2 (“Titanium dioxide is
the most widely used white pigment because of its unique ability to provide
exceptional opacity and lend whiteness and brightness.”); Ex. 1063, 243:6–
22; Ex. 1055 (“Half of all TiO2 pigment produced is consumed by the
coatings industry and a quarter by the paper industry.”); Ex. 1057; Ex. 1058.
(3) whether a person of ordinary skill in the art would not have
had reason to combine where Kronzer and Oez-US
allegedly involve different structures and manufacturing
processes
Patent Owner contends there are “fundamental differences in [the]
structures and manufacturing” of Kronzer versus Oez-US such that the
ordinarily skilled artisan would not have combined their teachings. PO
Resp. 36. Patent Owner explains that “Kronzer is a multi-layered structure,
in which each layer is laid down separately during manufacturing and in
which each layer serves a different function,” whereas “every example and
every claim in Oez teaches a single homogenized coating, which is pre-
mixed during manufacture.” Id.
Petitioner argues that Oez-US is not a “single homogenized coating”
as Patent Owner suggests. Pet. Reply 9. Petitioner asserts that both Oez-US
itself and Patent Owner’s own expert describe Oez-US as having a multi-
layered structure. Id.
For the same reasons discussed above in Section II.D.3.a, we do not
agree with Patent Owner’s arguments in this regard. As we explained
IPR2020-00628
Patent RE41,623 E

32
above, Oez-US and Kronzer each describe multi-layered image transfer
structures. See Ex. 1013, 2:36–44 (describing a polymer layer between the
paper and the polyurethane layer), claim 12 (same); see also Ex. 1063,
295:8–296:18 (testimony by Dr. Ellison describing Oez-US as having a
second, optional layer); Ex. 1018, 2:33–3:6 (describing a heat transfer sheet
having up to five layers).
(4) whether a person of ordinary skill in the art would not have
had reason to combine where the technology and problems
solved are different
Patent Owner also argues that “a [person of ordinary skill in the art]
would not be motivated to combine Kronzer and Oez . . . because of the
fundamental differences in the problems each reference seeks to address and
the fundamental differences in the technology each reference uses to solve
those problems.” PO Resp. 37.
For the same reasons discussed above, in Section II.D.3.a, we do not
agree with Patent Owner’s arguments in this regard. As we explained
above, we consider Kronzer and Oez-US to be aligned with a common goal
of improving the quality of transferred images. Moreover, Petitioner’s
evidence and arguments regarding the use of the same polymers in both
references undermine Patent Owner’s arguments that the technology in the
two references is so different that a person of ordinary skill in the art would
not have had any reason to combine the teachings of the references.
(5) whether a person of ordinary skill in the art would not have
had reason to combine where the printing and applying
method of Kronzer and Oez-US are opposite to one another
Lastly, Patent Owner contends that a person of ordinary skill in the art
would not have had a reason to combine Kronzer and Oez-US because the
IPR2020-00628
Patent RE41,623 E

33
“two references use opposite methods of application” and would not have
had a reasonable expectation of success. PO Resp. 37. According to Patent
Owner, a person of ordinary skill in the art would be dissuaded from adding
a white pigment to the third layer of Kronzer because it would “obscure the
decorative graphic,” and therefore, be counterintuitive. Id. at 48–49.
Petitioner asserts that “far from being ‘counterintuitive’, a [person of
ordinary skill in the art] (or anyone else possessing a modicum of common
sense) would have understood that the inclusion of a white/opaque pigment
in Kronzer’s layer would require the image to be positioned positively on
top of (not underneath) the opaque/white layer, as expressly taught by Oez-
US.” Pet. Reply 10.
On this issue, Petitioner has the better position. The ordinarily skilled
artisan would have understood that there were two known methods for
applying image transfer sheets—either “peel first” or “peel last”—and would
have considered the benefits and disadvantages of each in developing an
image transfer sheet. See generally Ex. 1016 (describing “peel first”);
Ex 1018 (describing “peel last”); Tr. 36:8–37:8. Further, as Patent Owner
acknowledges, using the “peel last” method would result in the white layer
covering the image and therefore, the image would be obscured. PO
Resp. 38 (citing Ex. 2011 ¶¶ 177, 267–280) (“[A] person having ordinary
skill in the art] would expect that white pigment in the third layer would
obscure the decorative graphic.”); Pet. Reply 10; Ex. 1062 ¶¶ 42–43.
Therefore, the person of ordinary skill in the art would have had little reason
(if any reason at all) to apply the Kronzer/Oez-US image transfer sheet in a
“peel last” environment. The “person of ordinary skill is also a person of
ordinary creativity, not an automaton,” and does not abandon common sense
IPR2020-00628
Patent RE41,623 E

34
when considering the combination of references. KSR, 550 U.S. at 421;
Winner Int’l Royalty Corp. v. Wang, 202 F.3d 1340, 1349 n.8 (Fed. Cir.
2000) (explaining that a person of ordinary skill in the art would have
considered both the advantages and disadvantages of the prior art).
Accordingly, the person of ordinary skill in the art would not have been
deterred by two different application types, but rather, would have had
reason to consider the teachings as a whole and opt for the “peel first”
method, which would have been well within their technical grasp. KSR, 550
U.S. at 421 (“When there is a design need or market pressure to solve a
problem and there are a finite number of identified, predictable solutions, a
person of ordinary skill has good reason to pursue the known options within
his or her technical grasp.”).
c) Summary of Claim 1
For the foregoing reasons, we are persuaded by Petitioner’s arguments
and evidence demonstrating that a person of ordinary skill in the art would
have had reason to combine the teachings of Kronzer and Oez-US, and
would have had a reasonable expectation of successfully doing so to arrive
at the subject matter recited in claim 1. As noted above, we also agree with
Petitioner’s undisputed arguments and evidence that Kronzer and Oez-US
teach or suggest all of the limitations recited in claim 1. As a result, we find
Petitioner has established, by a preponderance of evidence that claim 1 is
unpatentable as obvious in view of Kronzer and Oez-US.
4. Claim 5
Claim 5 depends from claim 1 and recites a method where “the
polymer of the image-imparting layer encapsulates the titanium dioxide or
other white pigment and indicia and transfers the titanium dioxide or other
IPR2020-00628
Patent RE41,623 E

35
white pigment in a pattern that forms the indicia on the colored substrate.”
Ex. 1001, 12:15–19.
Petitioner asserts that Oez-US teaches “encapsulating.” Pet. 63.
According to Petitioner, a person of ordinary skill in the art “would have
understood that, when white pigment is added to Kronzer’s third layer, as
taught by Oez-US, the fourth/image-imparting layer would encapsulate the
white pigment and image and transfer them to the fabric/substrate, as taught
by Oez-US.” Id. (citing Ex. 1020 ¶¶ 138–139, 211, 246–247). Dr. Wanat
opines that when pigment is added to a polymer such that it becomes a
“homogeneous mixture in which the pigment particles are dispersed in the
formulation, prior to forming the layer[,] [t]he pigment particles would thus
become dispersed in, and encapsulated by, the components of the
formulation.” Ex. 1020 ¶¶ 246–247; see also id. ¶¶ 138–139 (“Because the
polymer disclosed by Oez[-US] is formed by mixing and homogenizing with
TiO2, the TiO2 is encapsulated by the polymer . . . .”), ¶ 211 (same).
Dr. Wanat testifies that when the aqueous polymer dispersion evaporates, it
leaves behind a film and a person of ordinary skill in the art would
understand that the “polyurethane polymers encapsulat[e] the pigment
particles” even prior to the application of heat. Ex. 1020 ¶ 139; Pet. 36;
Ex. 1018, 5:44–6:3 (Kronzer explaining that its polymer layer can be formed
of powdered water-dispersible copolymers).
Patent Owner argues that “Oez uses a cross-linking white layer that
does not melt and mix.” PO Resp. 41. Accordingly, Patent Owner asserts
that “Petitioner has not met its burden of showing encapsulation is disclosed
in Oez, both because encapsulation must occur during the application of heat
IPR2020-00628
Patent RE41,623 E

36
and because – as a result of cross-linking – Oez does not behave as
Petitioner contends it does when subjected to heat.” Id.
Petitioner, however, does not propose to modify Kronzer to include
Oez-US’s entire white layer or the application of heat. Pet. 52–53. Rather,
in Petitioner’s proposed combination, only the white pigment of Oez-US is
included in Kronzer’s third polymer layer. Id. at 52–53, 56, 57–58. Relying
on Oez-US, Dr. Wanat testifies that when an aqueous polymer becomes
“mixed and homogenized” with a white pigment, the pigment becomes
encapsulated when the polymer film forms upon evaporation—even before
heat and pressure are applied. Ex. 1020 ¶¶ 138–139 (citing Ex. 1016, 3:32–
54; Ex. 1019, 3:32–43). Because Patent Owner’s argument that
encapsulation does not occur is based on applying heat and pressure, that
results in a cross-linked white layer—positions Petitioner does not
advance—Patent Owner’s argument is unavailing.
With regard to Patent Owner’s position that “encapsulation includes
the indicia” and “occurs as a result of heat being applied,” we note that
Patent Owner did not propose any claim construction for the term
“encapsulation” in the Patent Owner Response. See generally PO Resp.
The language of claim 5 does not expressly require the application of heat to
effectuate “encapsulation” and claim 5 suggests that the white pigment is
part of the indicia. Ex. 1001, 12:15–19 (stating that the polymer “transfers
the titanium dioxide or other white pigment in a pattern that forms the
indicia on the colored substrate”).
Therefore, on this record, the preponderance of the evidence supports
Petitioner’s position that the combination of Kronzer and Oez-US render the
subject matter of claim 5 unpatentable as obvious.
IPR2020-00628
Patent RE41,623 E

37
5. Claim 8
Claim 8 depends from claim 6 and additionally requires that “the
polymer layer comprises polypropylene.” Ex. 1001, 12:30–31.
Petitioner argues that Krozner describes its image-imparting layer as
comprising various polymers including “‘ethylene oxide, propylene oxide,
and alcohols, and polysiloxane polyethers’ (Kronzer, 8:28–30), as well as
‘polyolefins, polyesters, polyamides, and ethylene-vinyl acetate copolymers’
(Kronzer at 7:19–21) and/or ‘polyacrylates, polyethylenes, and ethylene-
vinyl acetate copolymers’ (Kronzer at 7:30–31) (emphasis added).” Pet. 65.
Petitioner explains that polypropylene is “an extremely common type of
polyolefin” and that “[i]t would have been an obvious design choice to select
polypropylene.” Id. at 65 (citing Ex. 1020 ¶¶ 165, 219, 252).
Patent Owner contends that “[a]part from conclusory statements in the
Petition and Declaration, Petitioner does not cite any evidence supporting
the conclusions that polyproplylene is ‘extremely common’ or that it would
have been an obvious choice.” PO Resp. 42.
On this record, we agree with Petitioner that the preponderance of the
evidence suggests that use of polypropylene would have been obvious to the
skilled artisan in view of Kronzer. Kronzer identifies numerous polymers
useful in its image-imparting layer, including “polyolefins, polyesters,
polyamides, and ethylene-vinyl acetate copolymers.” Ex. 1016, 7:19–21.
Dr. Wanat testifies that polypropylene, a thermoplastic, is a known
polyolefin. Ex. 1020 ¶ 219. According to Dr. Wanat, polypropylene “is one
of the most common polyolefins and is used in everyday applications, such
as chairs, consumer goods, and automotive parts.” Id. Dr. Wanat reasons
that “[i]t would have been obvious to a [person of skill in the art] to select
IPR2020-00628
Patent RE41,623 E

38
polypropylene because it has properties that are known to be useful in
transfer sheets[,] . . . [it] is low in cost, has good wash and chemical
resistance, and is flexible.” Id. Dr. Wanat further testifies that
“[p]olypropylene has a melting point of 150–186°C, and a solubility
parameter of 17.3 (MPa),” which overlaps with the melting point and
solubility parameter of Kronzer’s third and fourth layers—65° C to 180° C
and less than 19 MPa respectively. Id. (citing Ex. 1016, claim 8; Ex. 1043,
78211); see also Ex. 1016 ¶¶ 59–60 (identifying the melting points for certain
polymers, including polypropylene, and noting that “standard ironing/heat
press temperatures will exceed the melting point(s)/Tg(s) of these
polymers.”). We credit Dr. Wanat’s testimony in this regard.
Accordingly, the preponderance of the evidence supports Petitioner’s
position that the combination of Kronzer and Oez-US renders the subject
matter of claim 8 invalid as obvious.
6. Claim 16
Claim 16 depends from claim 6 and additionally requires that “the
release layer includes a release coating portion and a white layer portion
including titanium dioxide or other white pigment or luminescent pigment.”
Ex. 1001, 12:51–54. Petitioner, referring back its discussion of claim 1,
argues that Kronzer describes “a release layer having a release coating
portion and a white layer portion.” Pet. 66 (referencing Section VII.D.2.d).
Petitioner asserts that the combination of Kronzer and Oez-US would have
resulted in a transfer paper with the second and third layers comprising the

11 Dr. Wanat cites to the original page numbers of Exhibit 1043.
IPR2020-00628
Patent RE41,623 E

39
release layer and where the second layer is the release coating and the third
layer includes the white pigment. Id. at 57.
Patent Owner asserts that modifying Kronzer and Oez-US as
Petitioner suggests “reverses the order of the layers in Kronzer during &
following application.” PO Resp. 38. Patent Owner explains that this “is a
complete re-engineering of Kronzer” and Petitioner does not explain why a
person of ordinary skill in the art would have expected such re-engineering
to be successful. Id. at 38–40. Patent Owner argues that Petitioner “cite[s]
no support or evidence for the proposition” that it would be “natural” to
apply the “image transfer steps and image orientation taught by Oez-US.”
Id. (citing Pet. 66).12 Patent Owner reasons that “[t]his re-engineering is
based on hindsight.” Id. at 40.
Petitioner contends that modifying Kronzer to include a “peel first”
image orientation would not require a “complete reengineering” as Patent
Owner alleges. Pet. Reply 10. Petitioner asserts that “[Patent Owner] and
its expert make conclusory assertions that reversing the layers would not be
successful, would be unpredictable and would impact the transfer.” Id.
Petitioner’s challenge is based on reversing the order of the third and fourth
layers, which “are largely the same, and can include the same thermoplastic
polymers/binders having the same characteristics.” Id. (citing Ex. 1018,
5:46–48, 5:62–65, 6:1–19, 6:54–56, 7:12–41; Ex. 1062 ¶¶ 42–48).
Petitioner argues that a person of ordinary skill in the art “would have
understood that flipping the orientation of these two layers would result in

12 Patent Owner mistakenly cites to page 76 of the Petition. PO Resp. 38.
Petitioner’s discussion of claim 16 appears at page 66 of the Petition, and
Petitioner discusses orienting the layers as Oez-US suggests on pages 60–62.
IPR2020-00628
Patent RE41,623 E

40
the same functionality.” Id. at 11 (citing Ex. 1062 ¶¶ 46–47; Ex. 1018,
6:57–59, 8:47–51).
First, we observe that claim 16 is directed to a product, i.e., an image
transfer sheet. As a product claim, the order of application of layers is not
implicated so long as the layers themselves are arranged as claimed. Here,
Kronzer describes a first layer, which may be a latex-impregnated paper, a
second layer including a thermoplastic polymer, a third layer including a
film-forming binder, and a fourth layer which overlays the third layer, that
provides a printable material. Ex. 1018, 2:49–64. Kronzer describes that the
second layer including a “release-enhancing additive,” and that any of the
layers—including the third layer as Petitioner alleges—may include a
pigment. Id. at 2:57, 8:46–51. Petitioner asserts that the pigment, as
described in Oez-US, in the third layer is titanium dioxide. Pet. 55–57.
Specifically with reference to claim 16, Petitioner alleges that Kronzer’s
second and third layer together correspond to the claimed release layer that
includes a “release coating portion and a white layer portion.” Ex. 1001,
12:51–54. Therefore, the layers described in Kronzer, as modified by
Petitioner, are structured as claimed. Compare Ex. 1018, 2:49–64, with Ex.
1001, 12:20–26 (claim 6), 12:51–54 (claim 16); see also Pet. 55 (comparing
Kronzer’s structure with that of the ’623 patent).
Second, we disagree with Patent Owner’s assertion that Petitioner
improperly relies on hindsight. Impermissible hindsight is inferred when the
specific understanding or principle within the knowledge of one of ordinary
skill in the art that would have motivated one (with no knowledge of the
claimed invention) to make the proposed combination has not been
explained. In re Rouffet, 149 F.3d 1350, 1358 (Fed. Cir. 1998). Here,
IPR2020-00628
Patent RE41,623 E

41
however, Petitioner reasonably asserts that a person of skill in the art “would
have naturally also applied the image transfer steps and image orientation
taught by Oez-US” and would have reordered Kronzer’s third and fourth
layers because to do otherwise would result in the white layer being on top
of the image. Pet. 61 (citing Ex. 1020 ¶¶ 205–209). Petitioner explains that
its proposed “peel first” embodiment would have been successful “because
Kronzer expressly teaches that its substrate layer has ‘cold release’
properties.” Id. at 61–62 (citing Ex. 1018, 4:15–16; Ex. 1020 ¶¶ 205–209).
Petitioner also explains that each of Kronzer’s third and fourth layers are
similar and include thermoplastic polymers that melt in the same range, i.e.,
about 65 °C to about 180°C. Id. at 57–58 (quoting Ex. 1018, 2:35–67;
Ex. 1020 ¶¶ 38–59, 195–198). Dr. Wanat testifies that a “complete re-
engineering” is not required because “Kronzer discloses that the desired
characteristics and examples of the major components of the third and fourth
layer[s] are largely the same” and a person skilled in the art would expect
the layers to function similarly regardless of orientation. Ex. 1062 ¶¶ 44–45.
Therefore, Petitioner has provided sufficient reasoning with rational
underpinnings to explain why one of ordinary skill in the art would have
modified the teachings of the applied references. See KSR, 550 U.S. at 418.
Furthermore, critically lacking from Patent Owner’s argument is any
explanation of why “[a] complete reversal of the order of the layers would
not yield predictable results” (PO Resp. 39), what “complete re-engineering”
other than a reordering the layers is required (id. at 40), or any suggestion
that reversing the order of layers is beyond technical knowledge of the
person of ordinary skill in the art.
IPR2020-00628
Patent RE41,623 E

42
Accordingly, on this record, we find no evidence of hindsight
reconstruction. Thus for the reasons given above with respect to the
additional limitation of claim 16 and in Section II.D.7 below for independent
claim 6, we find Petitioner has established, by a preponderance of the
evidence, that claim 16 is unpatentable as obvious in view of Kronzer and
Oez-US.
7. Remaining Claims (claims 2–4, 6, 7, 9–15, 17)
Patent Owner argues claims 3, 4, 7, and 17 separately but does not
present any argument different from what is argued for claim 1. PO
Resp. 40 (advancing the “same reasons discussed above”), 42–43
(identifying “all of the reasons described above”). Patent Owner does not
present any separate argument for the remaining claims (i.e., claims 2, 6,
and 9–15) and, therefore, has forfeited any arguments based on these
uncontested claims. See generally id. at 25–43; cf. NuVasive, 842 F.3d
at 1381 (explaining that a patent owner waives an argument presented in the
preliminary response if it fails to renew that argument in the patent owner
response during the instituted trial). We have reviewed the information
Petitioner provides, including the relevant portions of the Wanat Declaration
and Petitioner’s arguments that a person of ordinary skill in the art would
have had reason to combine the various disclosures set forth in Kronzer and
Oez-US and would have had a reasonable expectation of success in
achieving the claimed invention. Because a preponderance of the evidence
supports Petitioner’s arguments as to claims 2–4, 6, 7, 9–15, and 17, we
adopt Petitioner’s analysis as our own. Accordingly, Petitioner establishes
that the subject matter of claims 2–4, 6, 7, 9–15 and 17 would have been
obvious in view of the combined teachings of Kronzer and Oez-US.
IPR2020-00628
Patent RE41,623 E

43
E. Remaining Grounds
Having determined that Petitioner establishes by a preponderance of
the evidence that the combination of Kronzer and Oez-US renders the
subject matter of claims 1–17 obvious, we need not address Petitioner’s
additional grounds challenging claims 1–17. See SAS, 138 S. Ct. at 1359
(holding a petitioner “is entitled to a final written decision addressing all of
the claims it has challenged”); Boston Sci. Scimed, Inc. v. Cook Grp. Inc.,
809 F.App’x 984, 990 (Fed. Cir. 2020) (nonprecedential) (“We agree that
the Board need not address [alternative grounds] that are not necessary to the
resolution of the proceeding.”).
III. CONCLUSION13
For the foregoing reasons, we conclude that Petitioner has satisfied its
burden of demonstrating, by a preponderance of the evidence, that the
subject matter of claims 1–17 of the ’623 patent is unpatentable.

13 Should Patent Owner wish to pursue amendment of the challenged claims
in a reissue or reexamination proceeding subsequent to the issuance of this
decision, we draw Patent Owner’s attention to the April 2019 Notice
Regarding Options for Amendments by Patent Owner Through Reissue or
Reexamination During a Pending AIA Trial Proceeding. See 84 Fed. Reg.
16,654 (Apr. 22, 2019). If Patent Owner chooses to file a reissue application
or a request for reexamination of the challenged patent, we remind Patent
Owner of its continuing obligation to notify the Board of any such related
matters in updated mandatory notices. See 37 C.F.R. § 42.8(a)(3), (b)(2).
IPR2020-00628
Patent RE41,623 E

44
IV. ORDER
In consideration of the foregoing, it is hereby:
ORDERED that Petitioner establishes by a preponderance of the
evidence that claims 1–17 of the ’623 patent are unpatentable; and
FURTHER ORDERED that, because this is a Final Written 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.
In summary:
Claims 35 U.S.C. § Reference(s)/Basis
14
Claim(s)
Shown
Unpatentable
Claim(s) Not
Shown
Unpatentable
1–17 103 Oez-US, Meyer
8, 17 103 Oez-US, Meyer,
Kronzer

1–17 103 Oez-PCT, Oez-US
1–17 103 Kronzer, Oez-US 1–17
1–17 103 Kronzer, Meyer
Overall
Outcome
1–17

14 In view of our determination that claims 1–17 are rendered obvious in
view of Kronzer and Oez-US, we do not reach grounds for which the last
two columns of this table are blank. See Section II.E.
IPR2020-00628
Patent RE41,623 E

45
FOR PETITIONER:
Joseph Richetti
Ethan Fitzpatrick
Bryan Cave Leighton Paisner LLP
joe.richetti@bryancave.com
ethan.fitzpatrick@bryancave.com

Abigail Cotton
abigail.cotton@bclplaw.com

FOR PATENT OWNER:
Devan V. Padmanabhan
Michelle E. Dawson
Britta S. Loftus (admitted pro hac vice)
Padmanabhan & Dawson, PLLC

devan@paddalawgroup.com
michelle@paddalawgroup.com
britta@paddalawgroup.com