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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`___________________
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`APPLE INC.
`Petitioner,
`
`v.
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`VIRNETX, INC. AND SCIENCE APPLICATION INTERNATIONAL
`CORPORATION,
`Patent Owner
`
`Patent No. 7,490,151
`Issued: Feb. 10, 2009
`Filed: Sep. 30, 2002
`Inventors: Edmund C. Munger, et al
`Title: Establishment of a Secure Communication Link Based Domain Name
`Service (DNS) Request
`____________________
`
`Inter Partes Review No. IPR2013-00354
`__________________________________________________________________
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`PETITIONER’S MOTION FOR JOINDER OF PROCEEDINGS
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`Paper No. 12
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`IPR2013-00354 – Motion for Joinder
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`Pursuant to the authorization granted by the Panel on August 14, 2013 in
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`Paper No. 11, Petitioner Apple Inc. (“Petitioner” or Apple) moves to have the
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`Board join IPR proceeding IPR2013-00354 with IPR2013-00376 filed by New Bay
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`Capital, LLC (“NBC”), each of which concerns U.S. Patent No. 7,490,151.
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`I.
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`Relevant Facts
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`Apple filed its petition seeking inter partes review of the ’151 patent on June
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`17, 2013. The petition challenged the patentability of all claims, 1-16, based on
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`three references: Aventail, BinGO, and Beser (Exs. 1007-1009). On June 23,
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`2013, NBC filed its petition challenging the patentability of claims 1 and 13 over
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`two references: Kiuchi and Dalton (Exs. 1002 & 1003 in IPR2013-00376).
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`The ’151 patent is a member of a family of patents owned by VirnetX that
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`includes U.S. Patent No. 6,502,135, 7,418,504 and 7,921,211. The specifications
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`of these patents are nearly identical. VirnetX has asserted varying sets of claims of
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`the ’151 and other of its patents against Apple and other entities in numerous
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`lawsuits. In August of 2010, VirnetX sued Apple and five other entities (the “2010
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`Litigation”). VirnetX asserted “at least” claims 1, 6, 7, 12, and 13 of the ’151
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`patent against Apple and claims 1, 6, 7, 12, and 13 against co-defendant Cisco.
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`After trial, it obtained a judgment of infringement against Apple on, inter alia,
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`claims 1 and 13 of the ’151 patent. That action now is on appeal to the Federal
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`Circuit.
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`1
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`IPR2013-00354 – Motion for Joinder
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`On December 31, 2012, VirnetX served a new complaint on Apple asserting
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`infringement of “at least” claims 1, 6, 7, 12, and 13 of the ’151 patent (the “2012
`
`Litigation”). See Ex. 1050 at 6. When VirnetX served this new complaint on
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`Apple, it established a 12 month period for Apple to submit a petition for inter
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`partes review of the ’151 patent that runs until December 31, 2013. 35 U.S.C.
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`§ 315(b); see Petition at 1-3. The new complaint led to a civil action, now pending
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`in the Eastern District of Texas, that will go to trial on October 13, 2015.
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`VirnetX also asserted the ’151 patent against Microsoft in a separate lawsuit
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`filed in April 2013,1 and it has asserted it against numerous other defendants2 in
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`actions filed in 2010 and 2011.
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`1 The 2013 complaint broadly alleges infringement of the patent without
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`specifying particular claims, and infringement contentions are not due until
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`September 2013.
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`2 Specifically, VirnetX sued Avaya, Inc.; Mitel Networks Corp.; Mitel Networks,
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`Inc.; Siemens Enterprise Commc’ns GmbH & Co. KG; Siemens Enterprise
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`Commc’ns, Inc.; Siemens AG; Siemens Commc’ns, Inc.; and Siemens Corp. in
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`Case No. 6:11-cv-00018-LED (E.D. Tex.) and Aastra Techs. Limited; Aastra USA,
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`Inc.; Apple Inc.; Cisco Systems, Inc.; NEC Corp.; and NEC Corporation of
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`America in Case No. 6:10-cv-00417-LED (E.D. Tex.).
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`2
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`IPR2013-00354 – Motion for Joinder
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`II. Argument
`Apple submits that joinder of the proceedings is fully warranted. See
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`IPR2013-00004, Paper 15 at 4; Dell v. Network-1 Security Solutions, Inc.,
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`IPR2013-00385, Paper 17 at 2-3. Joinder is proper under the statutory design of
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`inter partes review, will simplify and reduce the number of issues before the Board
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`and will enable streamlined proceedings (i.e., one coordinated proceeding instead
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`of three separate proceedings). In addition, the Board can manage the joined
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`proceeding in a way that does not impact scheduling or conduct of the proceedings.
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`See Motorola Mobility LLC v. Softview, LLC, IPR2013-00256, paper 10 at 2-3.
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`Joinder Is Authorized and Appropriate
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`A.
`The Board is authorized to join these proceedings pursuant to 35 U.S.C. §
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`315(c). Dell, IPR2013-00385, Paper 17 at 2-6. In addition, joinder is not
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`precluded by § 315(b), were that provision found to apply to the instant petition.
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`Id. As Apple explained in its petition, § 315(b) does not preclude the submission
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`of its petition or institution of trial on the basis of this petition. See Petition at 1-3.
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`Joinder will further the statutory purpose of the inter partes review authority
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`and is justified in this case. It will enable the Board to efficiently review, in a
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`single proceeding, the patentability of all the claims in the ’151 patent that VirnetX
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`has asserted in multiple actions against multiple defendants, including Apple. The
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`schedule of the joined proceedings is also fully compatible with the schedule of the
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`3
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`IPR2013-00354 – Motion for Joinder
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`2012 Litigation. Because that litigation will not go to trial until October 2015, the
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`Board will have ample time to conduct a trial in the joined proceeding and to issue
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`a final written decision before the trial. The joined proceeding will thus provide an
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`alternative forum to efficiently review the patentability of claims being asserted in
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`district court litigation, will reduce the number of issues the district court must
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`address and will minimize any duplication of effort by the Board and the Court.
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`See Comments General Trial Rules, 77 Fed. Reg. at 48663. In other words, the
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`Board will be able to issue a decision on the challenged claims that will have a
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`meaningful impact on the 2012 Litigation without causing delay. See H.R. Rpt.
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`112-98, at 45 (2011) (discussing “time limits during litigation”); 157 Cong. Rec.
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`S1326 (daily ed. Mar. 7, 2011) (statement of Sen. Sessions). Joining these
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`proceedings thus is perfectly consonant with the statutory purpose and design of
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`the inter partes review authority.
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`Joining Apple’s proceedings with the NBC proceeding (IPR2013-00376)
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`will reduce the overall administrative burden on the Board of individually
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`conducting trials on each petition. Moreover, because the Board has not yet
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`decided on which grounds to institute review, it will be able to review the grounds
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`in the petitions, and institute a single trial in a manner that avoids undue delay or
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`complication. See Motorola, IPR2013-00256, paper 10 at 10 (granting joinder
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`where it would “not unduly complicate or delay” earlier-initiated proceeding).
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`4
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`IPR2013-00354 – Motion for Joinder
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`Petitioner Is Willing to Limit the Grounds of Its Petition
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`B.
`To minimize the burden on the Board, and in view of the Panel’s comments
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`during the August 5, 2013 telephone conference, Apple is willing to limit the
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`grounds of unpatentability upon which it is requesting inter partes review of the
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`’151 patent. First, in the context of this motion, Apple requests the Board to
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`consider only those grounds in the petition that are based on the Aventail
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`publication, Ex. 1007, and the Beser patent, Ex. 1009. Petition at 5-6. Apple also
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`is willing to limit the grounds of its challenge to certain combinations based on
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`these primary references; namely, those involving Aventail with RFC 1035, Ex.
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`1017, and Reed, Ex. 1014, and those involving Beser with RFC 2401, Ex. 1010,
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`and Blum, Ex. 1011.3 While the other grounds identified in its petition are fully
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`warranted, Apple recognizes that limiting the grounds of its petition will
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`substantially reduce the number of issues that the Panel must address and will
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`conserve the time and resources of the Board.
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`Second, although Apple has contested more claims of the ’151 patent in its
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`petition than NBC has, the issues raised by the additional claims will not
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`complicate the joined proceedings in any significant way. The additional claims
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`being disputed by Apple present the same or highly similar concepts and
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`3 The resulting grounds upon which inter partes review is requested are grounds
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`(i) to (iii), (vi) to (viii), and (x). See Petition at 5-6.
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`5
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`IPR2013-00354 – Motion for Joinder
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`limitations and do not raise unique patentability questions. See Ariosa Diagnostics
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`v. Isis Innovation, IPR2012-00022, paper 32 at 5 (permitting joinder of new
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`petition where new challenges were “premised on the same grounds [as the] earlier
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`proceeding, adding only additional references as needed to address the limitations
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`of the dependent claims.”). Notably, as explained in the petition, the three
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`independent claims, 1, 7, and 13, are highly analogous and differ in only minor
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`respects. Petition at 14-18. Moreover, the independent claims have similar
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`dependent claims, e.g., 2, 8, and 14; 3, 9, and 15; and 4, 10, and 16. Petition at 19-
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`22. Thus, considering the additional claims challenged by Apple will not
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`substantially increase the burden on Board.
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`The Board has permitted joinder of proceedings involving different prior art
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`and different claims. For example, the Board allowed joinder of a second petition
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`challenging certain claims not originally asserted by the patent owner after it had
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`instituted trial to review the originally asserted claims. See, e.g., Microsoft Corp.
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`v. Proxyconn, Inc., IPR2013-00109, paper 14 at 2-3. Similarly, the Board has
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`permitted joinder based on a petition seeking review of claims that were the subject
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`of a first trial on the basis of prior art the PTAB previously declined to review. See
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`ABB, Inc. v. Roy-G-Biv Corp., IPR2013-00282, paper 6.
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`Here, allowing the joined proceeding to address claims beyond those
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`addressed in NBC’s petition is appropriate in view of Patent Owner’s decision to
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`6
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`IPR2013-00354 – Motion for Joinder
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`file multiple infringement suits against multiple parties raising various
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`combinations of its claims. For example, Patent Owner is alleging that Apple
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`infringes multiple claims not addressed in NBC’s petition. Patent Owner also has
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`recently filed lawsuits against third parties broadly alleging infringement of all
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`claims of the ’151 patent. Because Patent Owner has repeatedly asserted various
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`combinations of the claims in serial litigation, consideration of claims that are not
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`presented in the NBC petition is warranted, particularly in view of the statutory
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`purpose of IPR proceedings. See § II.A, above.
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`C.
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`Joinder Will Not Impact the Schedule and Will Simplify the
`Board’s Review of the Issues
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`Unlike motions for joinder filed after a trial has been instituted, here, the
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`Board can establish, and the parties can follow, a single schedule in the joined
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`proceedings. Petitioner believes that doing so will substantially minimize the
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`burdens on the Board and the parties. For example, in a joined IPR proceeding, it
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`is anticipated that only one expert witness per petitioner, and one or two witnesses
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`from Patent Owner, will present testimony. Depositions of this small number of
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`witnesses can be readily accommodated within a standard IPR schedule.
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`Moreover, joining the proceedings at this stage will not prejudice either Patent
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`Owner or NBC. The Board has yet to institute a trial on the patent, and it will be
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`able to evaluate the arguments of both petitioners and any response from the Patent
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`Owner prior to instituting such trial. The Board will then be able to define the
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`7
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`IPR2013-00354 – Motion for Joinder
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`scope of the issues and select the grounds that will lead to the most efficient
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`resolution of all these proceedings. Cf. Netapp, Inc. v. Personal Web Techs, LLC,
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`IPR2013-00319, Paper 18 (denying joinder because new petition was filed after
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`trial was instituted, raised new substantive issues that would delay schedule, and
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`would disrupt coordination between five other IPRs).
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`D. Briefing and Discovery Can Be Streamlined
`In the interest of efficiency, Petitioner is willing to accept reasonable
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`restrictions on discovery so long as they do not preclude it from independently
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`challenging the claims. In addition, Petitioner is willing to accept the condition
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`that each party limit its participation to the grounds presented in its respective
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`petition(s). See Motorola, IPR2013-00256, paper 10 at 2-3. Thus, if the Board
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`instituted review on the basis of the two primary references advanced by Apple and
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`one primary reference advanced by NBC, Apple would be willing to limit its
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`comments to issues raised by its prior art, and forgo comments on NBC’s grounds.
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`Petitioner Has Shown a Need to Use this Forum
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`E.
`Apple also has a need to use this process as a cost-effective alternative to
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`district court litigation. This need outweighs any counterveiling consideration of
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`joinder, including the burden and prejudice to the parties as discussed above.
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`Apple presently is defending itself against multiple lawsuits filed by the Patent
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`Owner that assert dozens of claims from the ’151 and related patents. Also,
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`8
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`IPR2013-00354 – Motion for Joinder
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`Petitioner has faced substantial procedural challenges in addressing invalidity
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`issues in district court. For example, in the 2010 Litigation, even though Patent
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`Owner asserted at trial over a dozen claims from four different patents, Apple was
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`given only 12 hours of trial time to put on an invalidity, non-infringement,
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`inequitable conduct, and damages case.
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`Finally, VirnetX will suffer no prejudice from joinder. VirnetX has filed
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`multiple actions against multiple parties over several years, each changing in scope
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`and the particular claims being asserted. By joining the present proceedings, the
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`Board will be able to limit, in the aggregate, the grounds at issue in these various
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`proceedings. Thus, joinder will enable the efficient resolution of these proceedings
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`before the Board without affecting the schedule of concurrent litigation and will
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`reduce, rather than increase the complexity of the concurrent litigation by reducing
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`the number of issues in those proceedings.
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`III. Conclusion
`For all of these reasons, Apple submits that joinder is warranted between
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`IPR2013-00354 and IPR2013-00376.
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`Dated: August 21, 2013
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`
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`Respectfully Submitted,
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`/Jeffrey P. Kushan/
`Jeffrey P. Kushan (Reg No. 43,401)
`Sidley Austin LLP
`1501 K Street NW
`Washington, DC 20005
`jkushan@sidley.com
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`9
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`IPR2013-00354 – Motion for Joinder
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`CERTIFICATE OF SERVICE
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`I hereby certify that on this 21st day of August 2013, a copy of this Motion
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`for Joinder, has been served in its entirety by e-mail and Express Mail on the
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`following counsel of record for patent owner:
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`Joseph E. Palys (Reg. No. 46,508)
`Finnegan, Henderson, Farabow,
`Garrett & Dunner, L.L.P.
`11955 Freedom Drive
`Reston, VA 20190-5675
`Phone: (571) 203-2700
`Fax: (202) 408-4400
`E-mail: joseph.palys@finnegan.com
`
`Naveen Modi (Reg. No. 46,224)
`Finnegan, Henderson, Farabow,
`Garrett & Dunner, L.L.P.
`901 New York Avenue, NW
`Washington, DC 20001-4413
`Telephone: 202-408-4065
`Facsimile: 202-408-4400
`E-mail: naveen.modi@finnegan.com
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`And on counsel for New Bay Capital:
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`rasher@sunsteinlaw.com and
`jklayman@sunsteinlaw.com or otherwise to
`Robert M. Asher
`Jeffrey T. Klayman
`Sunstein Kann Murphy & Timbers LLP
`125 Summer Street
`Boston, MA 02110-1618
`617 443 9292 (phone)
`617 443 0004 (fax)
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`Page 1
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`IPR2013-00354 – Motion for Joinder
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`Dated: August 21, 2013
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`Respectfully submitted,
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`/Jeffrey P. Kushan/
`Jeffrey P. Kushan
`Reg. No. 43,401
`Attorney for Petitioner
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`Page 2
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