UNITED STATES PATENT AND TRADEMARK OFFICE
`
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________
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`NEW BAY CAPITAL, LLC,
`Petitioner,
`v.
`
`VIRNETX, INC.
`Patent Owner.
`____________
`
`Case IPR2013-00378
`Patent 7,921,211
`____________
`
`NEW BAY CAPITAL’S OPPOSITION TO MOTION FOR JOINDER
`FILED BY THIRD PARTY APPLE INC.
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`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________
`
`NEW BAY CAPITAL, LLC,
`Petitioner,
`v.
`
`VIRNETX, INC.
`Patent Owner.
`____________
`
`Case IPR2013-00378
`Patent 7,921,211
`____________
`
`NEW BAY CAPITAL’S OPPOSITION TO MOTION FOR JOINDER
`FILED BY THIRD PARTY APPLE INC.
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`I.
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`FACTUAL BACKGROUND
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`A. New Bay Capital Seeks a Just, Speedy and Inexpensive Review of
`the ‘211 Patent
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`New Bay Capital, LLC (“New Bay”) has petitioned for inter partes review of
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`U.S. Patent No. 7,921,211 (the ‘211 Patent). The petition has been strictly tailored
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`to comply with the policy behind inter partes reviews – to provide a just, speedy
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`and inexpensive review of a patent. 37 C.F.R. §42.1(b). The petition has been
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`limited to a challenge of claims 36, 37, 47 and 51. The prior art to be considered
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`has been limited to a single reference, Kiuchi. A single ground for cancelation has
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`been asserted against each challenged claim.
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`B. Apple Seeks to Add its Two Inter Partes Reviews to this
`Proceeding
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`Apple has filed two inter partes reviews against the ‘211 Patent. Due to the
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`questionable timeliness of these inter partes reviews, Apple seeks to join them with
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`New Bay’s IPR. Even though Apple offers to limit the grounds of its IPR’s to be
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`joined, the size of the joinder is huge. In IPR2013-00397, Apple still insists on
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`presenting all three grounds as follows:
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`(i) Claims 1-3, 5-8 and 14-60 are anticipated under § 102(b) by Aventail
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`Connect v 3.01/2.5 Administrator’s Guide (“Aventail”);
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`(ii) Claims 3, 31-32, and 55-56 are obvious under § 103 based on Aventail
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`in view of Beser;
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`1
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`(iii) Claims 31, 32, 55, and 56 are obvious under §103 based Aventail in
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`view of a Person of Ordinary Skill in the Art
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`In IPR2013-00398, Apple intends to present the following two remaining
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`grounds:
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`(i) Claims 1-3, 5-8 and 14-60 are anticipated under § 102(e) by Beser; and
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`(ii) Claims 1-3, 5-8 and 14-60 are obvious under § 103 based on Beser in
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`view of RFC 2401;
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`In support of its inter partes reviews, Apple submits a total of 74 exhibits
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`including the declarations of Michael A. Fratto, Chris A. Hopen and James
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`Chester.
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`In addition to Apple’s two IPR’s, Apple is also availing itself of the
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`resources of the PTO with its extensive challenge to the ‘211 patent in an ongoing
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`inter partes reexamination. Indeed, the rejection of all claims of the ‘211 patent is
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`before the Board on patent owner’s Notice of Appeal filed July 25, 2013 in
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`Apple’s reexamination no. 95/001,789.
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`II. Grounds for Joinder
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`The Board has considered some or all of the following when deciding on
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`joinder of IPR proceedings1:
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`1. Whether the proceedings involve the same parties.
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`1 See, for example, Microsoft Corp. v. Proxyconn, Inc., IPR2013-00109, Paper 15.
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`Patent 7,921,211
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`2. Whether the proceedings involve the same patent.
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`3. Whether the proceedings involve the same prior art.
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`4. Whether there is a discernible prejudice to either party.
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`5. Whether joinder will unduly delay the resolution of either proceeding.
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`6. Whether joinder will help “secure the just, speedy, and inexpensive
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`resolution” of the proceedings.
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`The New Bay IPR and the Apple IPR’s should not be joined because the
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`proceedings involve different parties with no relation to one another, the
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`proceedings involve different claim challenges based on different prior art, joinder
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`would be extremely prejudicial to New Bay in terms of delay and cost and dilution
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`of its position due to the sheer size and complexity of the Apple IPR’s, joinder will
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`certainly delay resolution of New Bay’s IPR, and joinder will not help to “secure
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`the just, speedy, and inexpensive resolution” of the proceedings.
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`III. Joinder Would Add Significant Complexity, Delay and Cost to New
`Bay’s IPR
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`A. Joinder Would Add Numerous Substantive Issues
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`While Apple’s two IPR’s include challenges to claims 36, 37, 47 and 51
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`challenged by New Bay, they do so on different grounds using different prior art,
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`and therefore joinder would not reduce the number of grounds to be addressed by
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`the Board. No efficiency would be gained by joining the proceedings.
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`3
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`Patent 7,921,211
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`Furthermore, the Apple IPR’s add challenges to patent claims which are not
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`at issue in the New Bay IPR. The additional patent claims which will need to be
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`addressed if joined include claims 1, 2, 3, 5, 6, 7, 8, 14-35, 38-46, 48-50 and 52-60.
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`These claims present many new concepts and limitations that are not the subject of
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`the New Bay IPR. Indeed, two new independent claims 1 and 60 will need to be
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`addressed if joined. Moreover, the dependent claims add many further new
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`limitations including at least the following:
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`“non-standard top-level domain name” claim 3;
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`“authenticate the query using a cryptographic technique” claim 5
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`“Internet” claim 6;
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`“edge router” claim 7;
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`“the domain name service system is connectable to a virtual private
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`network through the communication network” claim 8;
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`“the domain name service system is configured to respond to the query
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`for the network address” claim 14;
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`“to provide… the network address corresponding to a domain name”
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`claims 15, 59;
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`“at least one of the plurality of domain names is reserved for secure
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`communication links” claim 18;
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`“a server” claims 19, 43;
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`4
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`“domain name database” claims 20, 21, 44, 45;
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`“store the corresponding network addresses for use in establishing secure
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`communication links” claims 22, 46;
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`“at least one of the plurality of domain names comprises an indication”
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`claims 24, 48;
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`“the secure communication link uses encryption” claims 28, 52;
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`“supporting a plurality of services” claims 29, 53;
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`“the query is initiated from the first location, wherein the second location
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`comprises a computer, and wherein the network address is an address
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`associated with the computer” claim 34, 58.
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`The references asserted in the Apple IPR’s all raise new substantive issues.
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`There is absolutely no overlap and no efficiency to be gained by joining these
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`issues with those of the New Bay IPR. The challenges asserted by Apple make no
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`use of Kiuchi. The prior art references asserted by Apple are all new and raise new
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`issues. The references include the following:
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`U.S.Patent No. 6,496,867 (Beser);
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`RFC2401, November 1998;
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`Aventail Connect v 3.01/2.5 Administrator’s Guide;
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`These new references are cited by Apple in five new grounds attacking the
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`claims. There is no overlap between these five grounds and the single ground
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`5
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`Patent 7,921,211
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`raised by New Bay. The chart below illustrates the expansion proposed by Apple’s
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`joinder motion. The issues raised by the present New Bay IPR are shown in green.
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`The additional grounds and claims that would be imposed by the Apple IPR’s are
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`shown in red.
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`33-35 36 37 38 to 46
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` 47 48-50 51 52-54 55 56 57-60
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`‘211 claims-> 1
`Kiuchi
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`Beser
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`Beser,
`RFC2401
`Aventail
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`Aventail,
`Beser
`Aventail,
`POSITA
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`2
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`3
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`5
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`6
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`7
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`8 14 to 30
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`31
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`32
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`‘211 claims
`Cont. ->
`Kiuchi
`
`Beser
`
`Beser,
`RFC2401
`Aventail
`
`Aventail,
`Beser
`Aventail,
`POSITA
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`6
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`Case IPR2013-00378
`Patent 7,921,211
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`The Aventail reference adds further complications by adding the issue of
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`whether it constitutes a printed publication. The propriety of treating Aventail as a
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`prior art reference has been challenged by VirnetX in reexamination proceedings
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`concerning parent patent 6,502,135, in particular, inter partes reexamination No.
`
`95/001,682. VirnetX wrote, “With respect to Aventail, the Request submitted
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`uncorroborated declarations from three individuals whom Patent owner has no
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`opportunity to depose in this matter, and which were not incorporated or relied on
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`by the Office Action.” (Patent Owner’s Response to Office Action of February 15,
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`2012, p. 14) “Patent Owner does not agree with the statements and assertions made
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`within those declarations, and reserves the opportunity to challenge their
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`correctness should the Examiner rely on them in subsequent proceedings.” (Id., p.
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`14, n.6)
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`B. Joinder Would Expand and Complicate Discovery
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`In keeping with the Board’s interest in delivering an inexpensive resolution
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`to an IPR, discovery is strictly limited. 37 C.F.R. §42.51(b). Nevertheless, cross
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`examination of affidavit testimony is routine discovery. The two Apple IPR’s
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`would add the testimony of three new witnesses - Michael A. Fratto, Chris A.
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`Hopen and James Chester. Additional testimony from VirnetX witness(es) would
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`also be expected. These witnesses will be asked to address all of the new issues
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`mentioned above that would be imposed by the Apple IPR’s. To the extent, they
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`7
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`Case IPR2013-00378
`Patent 7,921,211
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`will be addressing aspects of claims 36, 37, 47, and 51 being challenged in the
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`New Bay IPR, New Bay would need to be present at the depositions to allow for
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`further cross examination, as needed. The added difficulties of scheduling,
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`preparing for and attending these depositions would significantly bog down and
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`significantly increase the cost of prosecuting the instant New Bay IPR.
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`Moreover, the addition of Apple, an unrelated third party, will complicate
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`depositions and discovery. Unlike more suitable joinder situations in which an
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`identical petition is filed or a co-defendant in a litigation seeks to participate, here
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`Apple does not share any such affiliation with New Bay. To the extent, Apple
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`takes positions to coordinate with its positions taken in litigation, New Bay faces
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`no such similar constraints. These differences among the parties may lead to
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`unprecedented three-way discovery and claim construction disputes.
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`C. Joinder Would Severely Impact Scheduling
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`Given the limited number of claims challenged on the mere basis of a single
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`prior art reference, New Bay had reasonable hopes of a shortened schedule or a
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`regular schedule coordinated with co-pending IPR2013-00377 directed to parent
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`Patent No.7,418,504. Similarities between the claims and the challenge to the ‘211
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`patent and the ‘504 patent would allow for judicial efficiencies. However, in view
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`of the added claims, the new claim elements, the new prior art references, the
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`additional party and the additional witnesses, joinder with the Apple IPR’s would
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`8
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`Case IPR2013-00378
`Patent 7,921,211
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`impose heavy burdens on the Board and New Bay preventing a speedy and
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`inexpensive resolution of New Bay’s pair of inter partes reviews.
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`Rather than seeking consolidation and increased efficiency, Apple foresees
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`limiting the participation of each petitioner to the grounds presented in its
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`respective petitions. Given that both petitioners challenge claims 36, 37, 47 and 51,
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`statements by witnesses and parties regarding these claims have the potential for
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`influencing the other party’s grounds for challenging the claims. Thus, with
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`multiple filings relative to claims 36, 37, 47 and 51 by the proposed three parties,
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`the discovery burdens and burdens of reviewing numerous filings greatly increases
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`by joining Apple’s two disparate inter partes reviews to the New Bay IPR. A
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`joined IPR will not be more efficient but rather more cumbersome and costly. New
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`Bay would be greatly prejudiced by the proposed joinder.
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`IV. Conclusion
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`For all the foregoing reasons, Apple’s motion for joinder should be denied
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`and the Board should proceed to an orderly and timely consideration of New Bay’s
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`IPR simply challenging claims 36, 37, 47 and 51 in view of Kiuchi.
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`Dated: August 28, 2013
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` Respectfully submitted,
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`
` /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
`
`
`
`9
`
`
`
`Case IPR2013-00378
`Patent 7,921,211
`
`
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`
`
`03959/05004 1950370.1
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`
`
`
`
` Boston, MA 02110-1618
`(617) 443-9292
`Attorneys for Petitioner, New Bay Capital,
`LLC.
`
`10
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`
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`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
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`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
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`
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`
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`Dated: August 28, 2013 /Robert M. Asher, #30,445/
`Robert M. Asher
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`
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`Reg. No. 30,445
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`
`
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