Nest Labs, Inc.v.Allure Energy, Inc.

Patent Trial and Appeal Board

Mar 10, 2015

13302071 (P.T.A.B. Mar. 10, 2015)

Trials@uspto.gov Paper 7
571-272-7822 Entered: March 10, 2015

UNITED STATES PATENT AND TRADEMARK OFFICE
_____________

BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________

NEST LABS, INC.,
Petitioner,

v.

ALLURE ENERGY, INC.,
Patent Owner.
____________

Case IPR2014-01423
Patent 8,442,695 B2
____________

Before BART A. GERSTENBLITH, CHRISTOPHER L. CRUMBLEY, and
KEVIN W. CHERRY, Administrative Patent Judges.

CHERRY, Administrative Patent Judge.

DECISION
Denying Institution of Inter Partes Review
37 C.F.R. § 42.108

I. INTRODUCTION
Petitioner, Nest Labs, Inc., filed a Petition requesting an inter partes
review of claims 1–20 of U.S. Patent No. 8,442,695 B2 (Ex. 1002, “the
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’695 patent”) under 35 U.S.C. §§ 311–319. Paper 2 (“Petition” or “Pet.”).
Patent Owner, Allure Energy, Inc., filed a Preliminary Response. Paper 6
(“Prelim. Resp.”). We have jurisdiction under 35 U.S.C. § 314. Section 314
provides that an inter partes review may not be instituted “unless . . . the
information presented in the petition . . . shows that there is a reasonable
likelihood that the petitioner would prevail with respect to at least 1 of the
claims challenged in the petition.”
Upon consideration of the arguments and evidence presented by
Petitioner and Patent Owner, we determine that Petitioner has not
demonstrated a reasonable likelihood that it will prevail with respect to
claims 1–20. Accordingly, the Petition is denied.
A. Related Proceedings
According to Petitioner and Patent Owner, the ’695 patent is involved
in, at least, the following lawsuit: Allure Energy, Inc. v. Nest Labs, Inc.,
No. 9:13-cv-00102-RC (E.D. Tex.). Pet. 2; Paper 4, 1.
B. The ’695 Patent
The ’695 patent relates to an apparatus for home energy management.
Ex. 1002, 1:41–43, Figs. 7, 11.
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Figure 7 is reproduced below.

Figure 7 illustrates energy management user interface (EMUI) 700,
which can be displayed on a mobile device, desktop computer, thermostat or
other networked device. Id. at 41:28–35.
EMUI 700 can display current readings section 718, which can
include current date and time section 720, current thermostat set-point 722,
and energy savings level 724. Id. at 41:54–42:2. Energy savings level 724
is configured to indicate a savings level that relates to current thermostat set-
point 722. Id. at 42:2–4. EMUI 700 can display a “visual indication of an
energy savings” in association with a current thermostat set-point to give a
user feedback on energy consumption based on a thermostat set point. Id. at
42:4–9. As the user adjusts the thermostat set-point up or down, energy
savings level 724 can be altered in near real-time based on the user’s
selection. Id. at 42:9–12.
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Figure 11 is reproduced below.

Figure 11 illustrates wireless thermostat 1100, as described and
claimed in the ’695 patent. Ex. 1002, 49:6–8.
In Figure 11, wireless thermostat 1100 can be associated with an
energy management system, mobile device, energy management user
interface, or other devices. Id. at 49:8–11. Wireless thermostat 1100 can
use various display technology, including LCD displays. Id. at 49:17–21.
Wireless thermostat 1100 can include thermostat display 1108, temperature
increase input 1110, and temperature decrease input 1112. Id. at 49:12–17.
Wireless thermostat 1100 can include smart thermostat settings 1118, which
can be programmable settings that can display proximity mode 1122,
vacation mode 1124, and smart energy 1126, and can be operated using an
energy management user interface operating on a mobile device or other
network device. Id. at 49:36–46. Proximity control can manage the settings
based on the user’s proximity, for example, to the site. Id. at 53:12–22.
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C. Illustrative Claim
Claim 1, an apparatus claim, is the only independent claim of the
’695 patent. Claims 2–20 depend, either directly or indirectly, from claim 1.
Claim 1 is illustrative of the subject matter in this proceeding, and is
reproduced below.
1. A temperature controlling apparatus, comprising:
a housing including an LCD screen capable of displaying
settings information and an energy savings settings icon;
a processor configured to detect multiple inputs with the
housing, the multiple inputs including inputs from a plurality of
users providing the settings information in response to the
interaction with the housing;
the processor further configured to initiate a suggestion
of a setting resulting in a display of the energy savings settings
icon;
encoded logic configured to be used by the processor to
process the multiple inputs and determine a schedule and
determine whether to display the energy savings settings icon
based on the determined schedule;
a wireless communication module configured to access a
hosted web service and a mobile device, wherein each of the
hosted web service and the mobile device may receive multiple
inputs from the plurality of users such that the settings
information used to determine the schedule can be provided
remotely; and
wherein the multiple inputs can further include detecting
a presence in proximity to the housing of at least one user over
a period of time and providing a presence status to determine
the settings information.
Id. at 62:51–63:7.
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D. Evidence Relied Upon
Petitioner relies upon the following prior art references.
Ehlers US 7,130,719 B2 Oct. 31, 2006 Ex. 1004
Chapman US 2007/0158442 A1 July 12, 2007 Ex. 1006
Wagner US 2007/0241203 A1 Oct. 18, 2007 Ex. 1007
Galvin US 2010/0250590 A1 Sept. 30, 2010
1
Ex. 1008
Nicodem US 2008/0099568 A1 May 1, 2008 Ex. 1009
Anderson US 2008/0046878 A1 Feb. 21, 2008 Ex. 1010
Elliott US 6,980,659 B1 Dec. 27, 2005 Ex. 1011
Byron J. Stigge, Jr., Informed Home Energy Behavior: Developing a
Tool for Homeowners to Monitor, Plan and Learn about Energy
Conservation (June 2001) (M.S. dissertation, Mass. Instit. of Tech.)
(Ex. 1005, “Stigge”).
Therese E. Peffer, California DREAMing: The Design of Residential
Demand Responsive Technology with People in Mind (Mar. 1, 2009) (Ph.D.
dissertation, Univ. of Cal., Berkeley) (Ex. 1012, “Peffer”).
Petitioner also relies upon the Declaration of Geoff Williamson, dated
August 28, 2014. Ex. 1001.
E. Asserted Grounds of Unpatentability
Petitioner asserts the following grounds of unpatentability:
References Basis Challenged Claim(s)
Ehlers, Stigge, and Peffer § 103(a) 1–5, 8, 9, 11, 12
Ehlers, Stigge, Peffer, Chapman § 103(a) 6
Ehlers, Stigge, Peffer, Chapman,
and Wagner
§ 103(a) 7

1
Galvin was filed March 30, 2009.
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References Basis Challenged Claim(s)
Ehlers, Stigge, Peffer, and Galvin § 103(a) 10
Ehlers, Stigge, Peffer, and
Nicodem
§ 103(a) 13–16
Ehlers, Stigge, Peffer, Nicodem,
and Anderson
§ 103(a) 17
Ehlers, Stigge, Peffer, and Elliott § 103(a) 18
Ehlers, Stigge, Peffer, Elliott, and
Nicodem
§ 103(a) 19
Ehlers, Stigge, Peffer, and Wagner § 103(a) 20
II. ANALYSIS
A. Claim Interpretation
In an inter partes review, claim terms in an unexpired patent are given
their broadest reasonable construction in light of the specification of the
patent in which they appear. 37 C.F.R. § 42.100(b); see also In re Cuozzo
Speed Tech., LLC, No. 2014-1301, 2015 WL 448667, at *5–*8 (Fed. Cir.
Feb. 4, 2015) (“Congress implicitly adopted the broadest reasonable
interpretation standard in enacting the [America Invents Act (“AIA”)],” and
“the standard was properly adopted by PTO regulation”). Under the
broadest reasonable construction standard, claim terms are given their
ordinary and customary meaning, as would be understood by one of ordinary
skill in the art in the context of the entire disclosure. In re Translogic Tech.,
Inc., 504 F.3d 1249, 1257 (Fed. Cir. 2007). Any special definition for a
claim term must be set forth with reasonable clarity, deliberateness, and
precision. In re Paulsen, 30 F.3d 1475, 1480 (Fed. Cir. 1994). Only those
terms which are in controversy need be construed, and only to the extent
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necessary to resolve the controversy. Vivid Techs., Inc. v. Am. Sci. & Eng’g,
Inc., 200 F.3d 795, 803 (Fed. Cir. 1999).
“energy savings settings icon”
Petitioner submits that the broadest reasonable interpretation of this
term should encompass the construction set forth by Patent Owner in the
related District Court action, “a visual representation reflecting actual or
anticipated energy savings or usage associated with a past, current and/or
future set point and/or operating condition.” Pet. 6–7. Although at one
point Patent Owner suggests a similar construction, see Prelim. Resp. 17 (“a
visual representation that is displayed by the device processor to indicate
that certain temperature settings are energy efficient”), Patent Owner
ultimately contends that the broadest reasonable interpretation is “a graphic
representation capable of indicating a current or potential level of energy
savings associated with one or more settings.” Id. at 18 (emphasis omitted).
Patent Owner argues that Petitioner “contends this term is limited to
an ‘altering of color of an icon based on an energy savings.’” Id. at 17. We
do not agree with this assertion. Petitioner suggests that altering the color of
an icon can meet this limitation, but Petitioner does not appear to contend, in
this proceeding, that the term is limited only to altering color. See Pet. 11.
Thus, the principal concern of Patent Owner is not an issue in this
proceeding.
As for the parties’ proposed constructions, we are not convinced that
Patent Owner’s “graphic representation” language adds any clarity. Patent
Owner relies on a dictionary definition to support its “graphic
representation” language. Prelim. Resp. 17 (citing Ex. 2009). Patent
Owner, however, does not identify where, if at all, the Specification includes
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the phrase “graphic representation.” At least one portion of the
Specification cited by Patent Owner refers to a “visual representation.” See
Ex. 1002, 42:6–9. Thus, the phrase “visual representation” seems to align
closer to the Specification. As for the remaining language of the two
proposed constructions, the parties do not point us to any significant
difference between them. Moreover, Petitioner offers no evidence or
argument to support its construction. Patent Owner’s language, on this
record, appears broad enough to encompass Petitioner’s construction, is
simpler, and is reasonable in light of the Specification. Ex. 1002, 42:2–12.
Thus, for purposes of this Decision, we construe the term “energy savings
settings icon” as “a visual representation capable of indicating a current or
potential level of energy savings associated with one or more settings.”
“encoded logic configured to be used by the processor to process”
Petitioner submits that the broadest reasonable interpretation of this
term should encompass the construction set forth by Patent Owner in the
related District Court action, “software, firmware, hardware, or any
combination thereof.” Pet. 6, 7–8. Patent Owner begins by arguing that the
phrase “encoded logic configured to be used by the processor to process the
multiple inputs and determine a schedule and determine whether to display
the energy savings settings icon based on the determined schedule” should
not be governed by 35 U.S.C. § 112 ¶ 6.
2
Prelim. Resp. 23–26. Although it
appears that this is an issue in the related district court action (Ex. 2012),
Petitioner is not contending that these terms are means-plus-function

2
Section 4(c) of the AIA re-designated 35 U.S.C. § 112 ¶ 6, as 35 U.S.C.
§ 112(f). Pub. L. No. 112-29, 125 Stat. 284, 296–07 (2011). Because the
’695 patent has a filing date before September 16, 2012 (effective date of the
AIA), we refer to the pre-AIA version of 35 U.S.C. § 112, in this Decision.
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limitations here. Pet. 8. In the absence of any briefing or argument in this
proceeding as to why, under our claim construction standards, we should
apply § 112 ¶ 6 to this claim limitation, we decline to address it.
Patent Owner next contends that we should construe this term to mean
“programmed instructions that when executed by the processor
automatically determine a schedule based on the multiple inputs and then
displays the icon with the determined schedule.” Prelim. Resp. 28
(emphasis omitted). Patent Owner’s proposed construction largely mirrors
the actual claim language, but it deviates in three respects. First, Patent
Owner’s construction substitutes “with the schedule” for the claim recitation
“based on the schedule.” Although the purpose of this change is not clear, it
seems to suggest that the encoded logic must cause display of both the
energy savings icon and the schedule. However, there is nothing in the
claim language that requires “display” of the schedule. Thus, we decline to
re-write the claim to suggest otherwise.
Second, the claim recitation does not require that the logic is
configured to actually display the icon, it only requires that the logic is
configured to “determine whether to display” the energy savings icon. In the
absence of any justification, we decline to re-write the claim to require more
than only a determination.
Finally, Patent Owner seeks to add the requirement that the schedule
be determined “automatically” to the exclusion of any “manually”
determined schedule. Prelim. Resp. 27. Because our resolution of this case
does not involve this dispute, however, we decline to address it.
Accordingly, for purposes of this Decision, beyond the discussion
above, we decline to construe this term.
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Remaining terms
As for the remaining terms for which Petitioner offers constructions,
we see no reason that any of these terms need construction for this Decision.
B. Claims 1–5, 8, 9, 11, and 12: Asserted Obviousness over
Ehlers, Stigge, and Peffer
Petitioner contends that claims 1–5, 8, 9, 11, and 12 are unpatentable
under 35 U.S.C. § 103(a) as obvious over Ehlers, Stigge, and Peffer. To
support its contention, Petitioner provides a detailed showing mapping
limitations of claims 1–5, 8, 9, 11, and 12 to structures described by Ehlers,
Stigge, and Peffer. Pet. 19–43. Petitioner also cites the Declaration of Geoff
Williamson for support. See Ex. 1001 ¶¶ 19–25.
Ehlers (Ex. 1004)
Ehlers, titled “System and Method of Controlling an HVAC System,”
discloses a system that “allows at least one customer (or user) located at a
customer site (indicated by reference number 1.04) . . . to manage delivery
or usage of the electricity to the customer’s site 1.04.” Ex. 1004, 4:64–5:1.
Figure 1B of Ehlers is reproduced below.

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Figure 1B is a diagrammatic illustration of one implementation of the energy
management system of Ehlers. Id. at 3:38–39. The system includes
thermostat 1.30D that has a two-way communications channel. Id. at 28:57–
59. The customer may access and control system 1.02 through user
interface 1.14, which is accessible through external devices, such as, mobile
phones or desktop computers. Id. at 6:4–13.
Figure 3A of Ehlers is reproduced below.

Figure 3A shows an embodiment of thermostat 1.30D. Ex. 1004, 14:56–57.
Thermostat 1.30D is a wall-mounted device, which has control panel 3.02,
with display screen 3.04, and a plurality of input buttons 3.06. Id. at 14:57–
59. Thermostat 1.30D allows the user to view current temperature, view
current heating or cooling set-point, override heating and cooling set-points,
and resume scheduled heating and cooling set-points. Id. at 15:17-28.
These functions can also be accessed through a web page or graphical user
interface that can be accessed through a web browser on a computer or
mobile phone. Id. at 42:58–43:67.
System 3.08 can manage comfort for the customer site 1.04 by
learning from the user’s inputs or adjustments to system 3.08 to change or
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modify indoor air temperature. Id. at 30:55–57. This can include the use of
“follow my lead” artificial intelligence learning and execution routines. Id.
at 42:47–55. Ehlers also teaches the use of occupancy sensors that provide
the system with “knowledge of if there were people present in the site 1.04.”
Id. at 40:1–11.
Stigge (Ex. 1005)
Stigge, titled “Informed Home Energy Behavior: Developing a Tool
for Homeowners to Monitor, Plan and Learn about Energy Conservation,”
describes a home energy management system that tracks a user’s energy
usage and provides tips to users to conserve energy. Ex. 1005, 3. Stigge
discloses icons that can be displayed to indicate energy savings tips. Id. at
50, 63.
An enlargement of Figure 6.5 of Stigge is shown below. Id. at 50.

This enlargement of Figure 6.5 shows the final prototype interface on the
digital table. Id. The “energy bar” on the left of the central console is
always displayed on the tabletop. Id. Pressing the indoor temperature
button brings up the temperature control screen in front of the user. Id. The
house icon (center) turns yellow or red when energy conservation
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suggestions are available. Id. It turns yellow for small suggestions, such as
turning off lights, and red for large suggestions, such as closing windows
with the air conditioner on. Id. The relationship between changing set-point
temperature and energy consumption is direct and visible as the energy bar
dynamically fluctuates with the set-point temperature and the weather
conditions. Id. One example of a suggestion that Stigge mentions is
lowering temperature set-point during the winter by 2 degrees. Id. at 63.
Peffer (Ex. 1012)
Peffer, titled “California DREAMing: The Design of Residential
Demand Responsive Technology with People in Mind,” describes an energy
management system that uses motion sensors to detect the presence or
absence of users, learns user temperature preferences, and uses this
information to automatically create a heating or cooling schedule for a
residence. Ex. 1012, 50–51, 104, 111, 121, 123, 180, 218, 223, 230.
Analysis
Claim 1 requires “encoded logic configured to be used by the
processor to . . . determine whether to display the energy savings settings
icon based on the determined schedule.” Ex. 1002, 62:61–64. With respect
to this claim limitation, Petitioner contends that the combination of Ehlers,
Stigge, and Peffer discloses this feature through incorporation of Stigge’s
“house icon” and “energy bar.” Pet. 31. As to the “house icon,” Petitioner
contends that Stigge discloses that the thermostat schedule influences
whether a particular suggestion is to be displayed and, thus, whether to
display a red or yellow house icon. Id. Petitioner relies on the testimony of
Mr. Williamson that:
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Stigge’s red or yellow “house icon” would be displayed based
on the determined schedule, because the system would have to
use the schedule in order to determine a suggestion to display
and thus which house icon to display. For example, some of
the suggestions state that a certain setpoint change causes a
specific level of energy savings, but the system must have
knowledge of the schedule in order to determine the level of
savings. As an extreme example, if the schedule indicated that
the HVAC system would not operate over the next twenty-four
hours, a suggestion that changing the setpoint would save a
certain amount of money would not be appropriate.
Pet. 31–32 (quoting Ex. 1001 ¶ 25).
As for Stigge’s “energy bar,” Petitioner argues that Stigge discloses
that its schedule influences the current set point, and thus, which size energy
bar icon to display. Pet. 32. Petitioner submits that Stigge discusses that
“the energy bar dynamically fluctuates with the setpoint temperature.”
Pet. 32 (quoting Ex. 1005, 50). Petitioner also relies on the testimony of
Mr. Williamson that a skilled artisan “would also have considered that a size
of Stigge’s energy bar would be affected based on the schedule, because the
schedule would directly impact how much energy was being used and
whether an energy bar of a particular size would be displayed.” Pet. 32
(citing Ex. 1001 ¶ 25). Petitioner finally argues that Stigge discloses, with
regard to “conservation suggestions,” that “[p]ersonalized, timely, detailed
and interpreted information will be the most useful if it is presented to a
person at the time and place of energy consumption decisions.” Pet. 32
(quoting Ex. 1005, 26).
We agree with Patent Owner that Petitioner’s evidence and argument
fail to show persuasively that the determination to display the energy savings
settings icon is based in any way on the schedule determined from the
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multiple inputs. Prelim. Resp. 47–49. We further agree with Patent Owner
that none of the cited portions of Stigge, or any other cited reference for this
ground, suggest that the house icon or energy bar are displayed based on a
schedule determined from inputs into the thermostat.
Mr. Williamson’s testimony does not convince us otherwise. The
cited part of Mr. Williamson’s testimony is found in Paragraph 25 of his
Declaration. See Ex. 1001 ¶ 25. Mr. Williamson’s conclusion is that “[o]ne
skilled in the art would have considered that Stigge’s red or yellow ‘house
icon’ would be displayed based on the determined schedule, because the
system would have to use the schedule in order to determine a suggestion to
display and thus which house icon to display.” Id. There is not a single
citation to any evidence—or even reference to other parts of the
Declaration—to support this sentence, or any other conclusion in this
paragraph. See id. We are not persuaded that this type of conclusory,
circular testimony, without factual basis, can form the articulated reasoning
necessary to sustain an obviousness rejection. See In re Kahn, 441 F.3d 977,
988 (Fed. Cir. 2006), cited with approval in KSR Int’l Co. v. Teleflex Inc.,
550 U.S. 398, 418 (2007) (“Rejections based on obviousness grounds cannot
be sustained by mere conclusory statements; instead, there must be
articulated reasoning with some rational underpinning to support the legal
conclusion of obviousness.”). As for the examples that Mr. Williamson
provides in Paragraph 25 of his Declaration, they do not appear to have any
basis in the reference and are merely Mr. Williamson’s speculation as to
how the system of Stigge would respond to various conditions. Without any
factual underpinning, however, it is impossible for us to assess whether these
examples are based in reality. See Ashland Oil, Inc. v. Delta Resins &
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Refractories, Inc., 776 F.2d 281, 294 (Fed. Cir. 1985) (“Lack of factual
support for expert opinion going to factual determinations . . . may render
the testimony of little probative value in a validity determination.”). Thus,
we do not find this evidence persuasive.
As for the energy bar, we agree with Patent Owner that the energy bar
merely displays the raw data of energy usage, and there is no persuasive
evidence to support the conclusion that the determination to display the
energy bar is based on any determined schedule. Prelim. Resp. 49. We also
are not persuaded by Mr. Williamson’s testimony regarding the energy bar.
Ex. 1001 ¶ 25. Mr. Williamson offers a single sentence that “[o]ne skilled in
the art would also have considered that a size of Stigge’s energy bar would
be affected based on the determined schedule, because the schedule would
directly impact how much energy was being used and whether an energy bar
of a particular size would be displayed.” Id. We are persuaded that much
like the testimony regarding the house icon, this testimony is also conclusory
and based on speculation without factual citation or explanation sufficient to
allow us to assess it. Thus, we do not find this evidence persuasive.
In sum, we agree with Patent Owner that the Petition does not present
any persuasive evidence demonstrating that the combination of Ehlers,
Stigge, and Peffer teaches or suggests “encoded logic configured to be used
by the processor to . . . determine whether to display the energy savings
settings icon based on the determined schedule.” Thus, we conclude that
Petitioner has not established a reasonable likelihood of prevailing on
showing that claim 1 would have been obvious under § 103(a) over Ehlers,
Stigge, and Peffer.
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Because Petitioner relies upon the same deficient analysis in
addressing each of the dependent claims, see Pet. 19–43, Petitioner has
failed to show, on this record, a reasonable likelihood of success on its
proposed ground of obviousness over Ehlers, Stigge, and Peffer against
claims 1–5, 8, 9, 11, and 12.
C. Remaining Grounds
The remaining grounds of unpatentability all rely on the same analysis
discussed above for claim 1 as to why Ehlers, Stigge, and Peffer teach or
suggest the recited “encoded logic configured to be used by the processor to
process the multiple inputs and determine a schedule and determine whether
to display the energy savings settings icon based on the determined
schedule,” and do not cure this deficiency. See Pet. 44–59. Therefore, for
the reasons stated above, we determine that Petitioner has failed to
demonstrate a reasonable likelihood of success for these grounds as well.
III. CONCLUSION
For the foregoing reasons, we determine that the information
presented fails to establish a reasonable likelihood that Petitioner would
prevail in showing that claims 1–20 of the ’695 patent are unpatentable.

IV. ORDER
It is hereby ORDERED that the Petition is denied, and no trial is
instituted.

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For Petitioner:

John Dragseth
Geoffrey P. Shipsides
Fish & Richardson P.C.
dragseth@fr.com
IPR36563-0010IP1@fr.com

Kevin McGann
White & Case LLP
kmcgann@whitecase.com

For Patent Owner:

John Artz
Bryan Schomer
Dickinson Wright PLLC
jsartz@dickinsonwright.com
bschomer@dickinsonwright.com