UNITED STATES PATENT AND TRADEMARK OFFICE
`
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________
`
`NEW BAY CAPITAL, LLC,
`Petitioner,
`v.
`
`VIRNETX, INC.
`Patent Owner.
`____________
`
`Case IPR2013-00376
`Patent 7,490,151
`____________
`
`NEW BAY CAPITAL’S OPPOSITION TO MOTION FOR JOINDER
`FILED BY THIRD PARTY APPLE INC.
`
`
`
`
`
`
`
`
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________
`
`NEW BAY CAPITAL, LLC,
`Petitioner,
`v.
`
`VIRNETX, INC.
`Patent Owner.
`____________
`
`Case IPR2013-00376
`Patent 7,490,151
`____________
`
`NEW BAY CAPITAL’S OPPOSITION TO MOTION FOR JOINDER
`FILED BY THIRD PARTY APPLE INC.
`
`
`
`
`
`
`
`
`I.
`
`FACTUAL BACKGROUND
`
`A. New Bay Capital Seeks a Just, Speedy and Inexpensive Review of
`the ‘151 Patent
`
`New Bay Capital, LLC (“New Bay”) has petitioned for inter partes review of
`
`U.S. Patent No. 7,490,151 (the ‘151 Patent). The petition has been strictly tailored
`
`to comply with the policy behind inter partes reviews – to provide a just, speedy
`
`and inexpensive review of a patent. 37 C.F.R. §42.1(b). The petition has been
`
`limited to a challenge of claims 1 and 13. The prior art to be considered has been
`
`limited to two references Kiuchi and Dalton. Three separate grounds were
`
`presented applying the references to the challenged claims to establish
`
`unpatentabililty.
`
`
`
`B. Apple Seeks to Add its Two Inter Partes Reviews to this
`Proceeding
`
`
`Apple has also filed an inter partes review against the ‘151 Patent. Due to
`
`the questionable timeliness of its inter partes review, Apple seeks to join it with
`
`New Bay’s IPR. Even though Apple offers to limit the grounds of its IPR to be
`
`joined, the size of the joinder is huge. In IPR2013-00354, Apple still insists on
`
`presenting the following seven remaining grounds:
`
`(i) Claims 1-16 are anticipated under § 102(b) by Aventail;
`
`
`
`1
`
`
`
`Case IPR2013-00376
`Patent 7,490,151
`
`
`(ii) Claims 3, 9 and 15 are obvious under § 103 based on Aventail in view of
`
`RFC 1035;
`
`(iii) Claims 5 and 11 are obvious under § 103 based on Aventail in view of
`
`Reed;
`
`(vi) Claims 1-16 are anticipated under § 102(e) by Beser;
`
`(vii) Claims 1-16 are obvious under § 103 based on Beser in
`
`view of RFC 2401;
`
`(viii) Claims 1-16 are obvious under § 103 based on Beser in
`
`view of Blum;
`
`(x) Claims 1-16 are obvious under § 103 based on Beser in
`
`view of RFC 2401, further in view of Blum.
`
`In support of its inter partes reviews, Apple submits a total of 66 exhibits including
`
`the declarations of Michael A. Fratto, Chris A. Hopen and James Chester.
`
`In addition to Apple’s IPR, Apple is also availing itself of the resources of
`
`the PTO with its extensive challenge to the ‘151 patent in an ongoing inter partes
`
`reexamination. All claims of the ‘151 patent currently stand rejected in the
`
`reexamination no. 95/001,697.
`
`
`
`
`
`
`
`2
`
`
`
`Case IPR2013-00376
`Patent 7,490,151
`
`II. Grounds for Joinder
`
`The Board has considered some or all of the following when deciding on
`
`joinder of IPR proceedings1:
`
`1. Whether the proceedings involve the same parties.
`
`2. Whether the proceedings involve the same patent.
`
`3. Whether the proceedings involve the same prior art.
`
`4. Whether there is a discernible prejudice to either party.
`
`5. Whether joinder will unduly delay the resolution of either proceeding.
`
`6. Whether joinder will help “secure the just, speedy, and inexpensive
`
`resolution” of the proceedings.
`
`The New Bay IPR and the Apple IPR should not be joined because the
`
`proceedings involve different parties with no relation to one another, the
`
`proceedings involve different claim challenges based on different prior art, joinder
`
`would be extremely prejudicial to New Bay in terms of delay and cost and dilution
`
`of its position due to the sheer size and complexity of the Apple IPR, joinder will
`
`certainly delay resolution of New Bay’s IPR, and joinder will not help to “secure
`
`the just, speedy, and inexpensive resolution” of the proceedings.
`
`
`
`
`
`
`1 See, for example, Microsoft Corp. v. Proxyconn, Inc., IPR2013-00109, Paper 15.
`
`3
`
`
`
`Case IPR2013-00376
`Patent 7,490,151
`
`III. Joinder Would Add Significant Complexity, Delay and Cost to New
`Bay’s IPR
`
`A. Joinder Would Add Numerous Substantive Issues
`
`While Apple’s IPR includes challenges to claims 1 and 13 challenged by
`
`New Bay, it does so on different grounds using different prior art, and therefore
`
`joinder would not reduce the number of grounds to be addressed by the Board. No
`
`efficiency would be gained by joining the proceedings.
`
`Furthermore, the Apple IPR adds challenges to numerous patent claims
`
`which are not at issue in the New Bay IPR. The additional patent claims which will
`
`need to be addressed if joined include claims 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 14, 15
`
`and 16. These claims present many new concepts and limitations that are not the
`
`subject of the New Bay IPR. Indeed, new independent claim 7 will need to be
`
`addressed if joined. The dependent claims add many further new limitations which
`
`will require consideration in a joined IPR including at least the following:
`
`“determining whether the client is authorized to access the secure server”
`
`claims 2, 8, 14;
`
`“sending a request to the secure server to establish an encrypted channel
`
`between the secure server and the client” claims 2, 8, 14;
`
`“returning a host unknown error message to the client” claims 3, 9, 15;
`
`4
`
`
`
`Case IPR2013-00376
`Patent 7,490,151
`
`
`“the client comprises a web browser into which a user enters a URL
`
`resulting in the DNS request” claims 4, 10, 16;
`
`“an IP address hopping scheme” claims 5, 11;
`
`“avoids sending a true IP address of the secure server to the client”
`
`claims 6, 12.
`
`The references asserted in the Apple IPR all raise new substantive issues.
`
`There is absolutely no overlap and no efficiency to be gained by joining these
`
`issues with those of the New Bay IPR. The challenges asserted by Apple make no
`
`use of Kiuchi or Dalton. The prior art references asserted by Apple are all new and
`
`raise new issues. The references include the following:
`
`U.S.Patent No. 6,496,867 (Beser);
`
`RFC2401, November 1998;
`
`U.S.Patent No. 6,182,141 (Blum)
`
`Aventail Connect v 3.01/2.5 Administrator’s Guide;
`
`RFC1035, November 1987; and
`
`Reed, “Anonymous Connections and Onion Routing”, IEEE Journal on
`
`Selected Areas in Communications, vol. 16, no. 4, May 1998.
`
`These new references are cited by Apple in the seven new grounds attacking
`
`the claims. There is no overlap between these seven grounds and the three grounds
`
`raised by New Bay. The chart below illustrates the expansion proposed by Apple’s
`
`5
`
`
`
`Case IPR2013-00376
`Patent 7,490,151
`
`joinder motion. The issues raised by the present New Bay IPR are shown in green.
`
`The additional grounds and claims that would be imposed by the Apple IPR are
`
`shown in red.
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9 10 11 12 13 14 15 16
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`‘151
`claims ->
`Kiuchi
`103
`Kiuchi
`102
`Dalton,
`Kiuchi
`Aventail
`
`Aventail,
`RFC1035
`Aventail,
`Reed
`Beser,
`
`Beser,
`RFC2401
`Beser,
`Blum
`Beser,
`RFC2401,
`Blum
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`The Aventail reference adds further complications by adding the issue of
`
`whether it constitutes a printed publication. The propriety of treating Aventail as a
`
`prior art reference has been challenged by VirnetX in the inter partes
`
`reexamination 95/001,697. VirnetX wrote, “Apple also has not shown that Aventail
`
`6
`
`
`
`Case IPR2013-00376
`Patent 7,490,151
`
`v. 3.01 or AutoSOCKS were publicly available or that they are printed publications.
`
`Apple submitted uncorroborated declarations of Hopen, Fratto, and Chester (“the
`
`Declarants”) to support its allegation that Aventail v3.01 and AutoSOCKS are prior
`
`art, but the Declarants fail to provide any evidence to corroborate that these
`
`documents were disseminated and publicly available before the effective filing
`
`date of the ‘151 patent.” (Patent Owner’s Response to Office Action of April 20,
`
`2012, p. 5)
`
`B. Joinder Would Expand and Complicate Discovery
`
`In keeping with the Board’s interest in delivering an inexpensive resolution
`
`to an IPR, discovery is strictly limited. 37 C.F.R. §42.51(b). Nevertheless, cross
`
`examination of affidavit testimony is routine discovery. The Apple IPR would add
`
`the testimony of three new witnesses - Michael A. Fratto, Chris A. Hopen and
`
`James Chester. Additional testimony from VirnetX witness(es) would also be
`
`expected. These witnesses will be asked to address all of the new issues mentioned
`
`above that would be imposed by the Apple IPR. To the extent, they will be
`
`addressing aspects of claims 1 and 13 being challenged in the New Bay IPR, New
`
`Bay would need to be present at the depositions to allow for further cross
`
`examination, as needed. The added difficulties of scheduling, preparing for and
`
`attending these depositions would significantly bog down and significantly
`
`increase the cost of prosecuting the instant New Bay IPR.
`
`7
`
`
`
`Case IPR2013-00376
`Patent 7,490,151
`
`
`Moreover, the addition of Apple, an unrelated third party, will complicate
`
`depositions and discovery. Unlike more suitable joinder situations in which an
`
`identical petition is filed or a co-defendant in a litigation seeks to participate, here
`
`Apple does not share any such affiliation with New Bay. To the extent, Apple
`
`takes positions to coordinate with its positions taken in litigation, New Bay faces
`
`no such similar constraints. These differences among the parties may lead to
`
`unprecedented three-way discovery and claim construction disputes.
`
`C. Joinder Would Severely Impact Scheduling
`
`Given the mere challenge to two patent claims on the basis of just two prior
`
`art references, New Bay had reasonable hopes of a shortened schedule or a regular
`
`schedule coordinated with co-pending IPR2013-00375 directed to parent Patent
`
`No. 6,502,135. Similarities between the challenge to the ‘135 patent and the ‘151
`
`patent would allow for judicial efficiencies. However, in view of the added claims,
`
`the new claim elements, the new prior art references, the additional party and the
`
`additional witnesses, joinder with the Apple IPR would impose heavy burdens on
`
`the Board and New Bay preventing a speedy and inexpensive resolution of New
`
`Bay’s pair of inter partes reviews.
`
`Rather than seeking consolidation and increased efficiency, Apple foresees
`
`limiting the participation of each petitioner to the grounds presented in its
`
`respective petitions. Given that both petitioners challenge claims 1 and 13,
`
`8
`
`
`
`Case IPR2013-00376
`Patent 7,490,151
`
`statements by witnesses and parties regarding these claims have the potential for
`
`influencing the other party’s grounds for challenging the claims. Thus, with
`
`multiple filings relative to claims 1 and 13 by the proposed three parties, the
`
`discovery burdens and burdens of reviewing numerous filings greatly increases by
`
`joining Apple’s disparate inter partes review to the New Bay IPR. A joined IPR
`
`will not be more efficient but rather more cumbersome and costly. New Bay would
`
`be greatly prejudiced by the proposed joinder.
`
`IV. Conclusion
`
`For all the foregoing reasons, Apple’s motion for joinder should be denied
`
`and the Board should proceed to an orderly and timely consideration of New Bay’s
`
`IPR simply challenging claims 1 and 13 in view of Kiuchi and Dalton.
`
`Dated: August 28, 2013
`
` Respectfully submitted,
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`03959/05002 1949969.1
`
`
`
`
` /Robert M. Asher, #30,445/
`Robert M. Asher, Reg. No. 30,445
` Jeffrey T. Klayman, Reg. No. 39,250
` Sunstein Kann Murphy & Timbers LLP
`th Floor
` 125 Summer Street, 11
` Boston, MA 02110-1618
`(617) 443-9292
`Attorneys for Petitioner, New Bay Capital,
`LLC.
`
`9
`
`
`
`CERTIFICATE OF SERVICE
`
` I hereby certify that on this 28th day of August 2013, the foregoing NEW BAY
`
`CAPITAL’S OPPOSITION TO MOTION FOR JOINDER FILED BY THIRD
`
`PARTY APPLE INC. was served as agreed via email to counsel of record for patent
`
`owner:
`
`Joseph Palys
`
`Naveen Modi
`Finnegan, Henderson, Farabow, Garrett & Dunner LLP
`901 New York Avenue, NW
`Washington, DC 20001-4413
`Joseph.Palys@finnegan.com
`Naveen.modi@finnegan.com
`
`
`and to counsel for Apple:
`
`Jeffrey P. Kushan
`Joseph Micallef
`Sidley Austin LLP
`1501 K Street NW
`Washington, DC 20005
`jkushan@sidley.com
`jmicallef@sidley.com
`
`
`
`
`
`
`
`Dated: August 28, 2013 /Robert M. Asher, #30,445/
`Robert M. Asher
`
`
`
`
`
`
`
`
`Reg. No. 30,445
`
`
`
`
`
`
`
`
`
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
