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`IPR2014-00171 - IPR2014-00177
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` UNITED STATES PATENT AND TRADEMARK OFFICE
` BEFORE THE PATENT TRIAL AND APPEAL BOARD
`——————————————————————————————
`RPX CORPORATION |
` Petitioner, |
` v. | Case IPR2014-00171
`VIRNETX INC. | Patent 6,502,135
` Patent Owner. |
`——————————————————————————————
`RPX CORPORATION |
` Petitioner, |
` v. | Case IPR2014-00172
`VIRNETX INC. | Patent 6,502,135
` Patent Owner. |
`——————————————————————————————
`RPX CORPORATION |
` Petitioner, |
` v. | Case IPR2014-00173
`VIRNETX INC. | Patent 7,490,151
` Patent Owner. |
`——————————————————————————————
`RPX CORPORATION |
` Petitioner, |
` v. | Case IPR2014-00174
`VIRNETX INC. | Patent 7,921,211
` Patent Owner. |
`——————————————————————————————
`RPX CORPORATION |
` Petitioner, |
` v. | Case IPR2014-00175
`VIRNETX INC. | Patent 7,921,211
` Patent Owner. |
`——————————————————————————————
` (Caption continues on next page)
` Friday, February 7, 2014
` 10:00 a.m. EST
` CONFIDENTIAL PURSUANT TO PROTECTIVE ORDER
`Teleconference before the Patent Trial and Appeals Board
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`202-220-4158
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`Henderson Legal Services, Inc.
`www.hendersonlegalservices.com
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`Page 1 of 33
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`VIRNETX EXHIBIT 2027
`RPX v. VirnetX
`Trial IPR 2014-00171
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`
`
`Teleconference
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`IPR2014-00171 - IPR2014-00177
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` (Continued caption:)
`——————————————————————————————
`RPX CORPORATION |
` Petitioner, |
` v. | Case IPR2014-00176
`VIRNETX INC. | Patent 7,418,504
` Patent Owner. |
`——————————————————————————————
`RPX CORPORATION |
` Petitioner, |
` v. | Case IPR2014-00177
`VIRNETX INC. | Patent 7,418,504
` Patent Owner. |
`——————————————————————————————
`
` Friday, February 7, 2014
` 10:00 a.m. EST
` Teleconference before the Patent Trial and Appeals
`Board, the proceedings being recorded stenographically
`by Jonathan Wonnell, a Registered Professional Court
`Reporter (NCRA #835577) and Notary Public of the State
`of Minnesota, and transcribed under his direction.
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` A P P E A R A N C E S O F C O U N S E L
` (All participants appearing by phone)
`
` On behalf of the Patent Trial and Appeal
` Board:
` MICHAEL P. TIERNEY, ESQ., Administrative
` Patent Judge
` STEVEN C. SIU, ESQ., Administrative Law
` Judge
` KARL D. EASTHOM, ESQ., Administrative Law
` Judge
`
` On behalf of RPX Corporation:
` OLIVER R. ASHE, JR., ESQ.
` Ashe P.C.
` 11440 Isaac Newton Square North, Suite
` 210
` Reston, Virginia 20190
` (703) 467-9001
` oashe@ashepc.com
` -- and --
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` A P P E A R A N C E S (Cont'd)
`
` On behalf of RPX Corporation (Cont'd):
` GREGORY M. HOWISON, ESQ.
` Howison & Arnott, LLP
` Lincoln Center II
` 5420 LBJ Freeway, Suite 660
` Dallas, Texas 75240
` (972) 680-6050
` ghowison@dalpat.com
`
` On behalf of Virnetx Inc.:
` JOSEPH E. PALYS, ESQ.
` Finnegan, Henderson, Farabow, Garrett &
` Dunner, LLP
` Two Freedom Square
` 11955 Freedom Drive
` Reston, Virginia 20190-5675
` (571) 203-2700
` joseph.palys@finnegan.com
` -- and --
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` A P P E A R A N C E S (Cont'd)
` On behalf of Virnetx Inc. (Cont'd):
` NAVEEN MODI, ESQ.
` Finnegan, Henderson, Farabow, Garrett &
` Dunner, LLP
` 901 New York Avenue, N.W.
` Washington, D.C. 20005
` (202) 408-4000
` naveen.modi@finnegan.com
`
` On behalf of Apple Computers:
` JEFFREY P. KUSHAN, ESQ.
` JOSEPH A. MICALLEF, ESQ.
` Sidley, Austin, Brown & Wood
` 1501 K Street, N.W, Suite 600
` Washington, D.C. 20005
` (202) 736-8000
` jkushan@sidley.com
` jmicallef@sidley.com
`
` ALSO PRESENT:
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` JONATHAN WONNELL, Court Reporter
` P R O C E E D I N G S
` (10:00 a.m. EST)
` JUDGE TIERNEY: This is Judge Tierney
`joining the conference call. Are Judges Siu and
`Easthom online?
` JUDGE SIU: Judge Siu is online.
` JUDGE EASTHOM: So is Judge Easthom.
` JUDGE TIERNEY: All right.
` JUDGE EASTHOM: Good morning.
` JUDGE TIERNEY: Good morning, everyone.
`Let's now check to see -- do we have
`representatives from the patent owner? Is Virnetx
`online, on the call?
` MR. PALYS: Yes, Your Honor. This is
`Joseph Palys and Naveen Modi for Virnetx and we
`have a court reporter on the line as well.
` JUDGE TIERNEY: Thank you. Do we have a
`representative from RPX on the phone?
` MR. ASHE: Yes. This is Oliver Ashe.
` MR. HOWISON: This is Greg Howison.
` JUDGE TIERNEY: And next do we have a
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`representative from Apple on the call?
` MR. KUSHAN: Yes, Your Honor. This is
`Jeff Kushan and Joe Micallef for Apple.
` JUDGE TIERNEY: Well, welcome everyone
`to the conference call. The purpose of today's
`call is to discuss the discovery motion oppositions
`that were filed previously. As you are aware, we
`are referring to inter partes review IPR
`2014-00171. We do have IPRs also 00172, et cetera,
`all the way to 178, as well as the Apple IPRs. The
`numbers I'll have to look at in a moment. I think
`it's 238. Apple, could you please chime in and
`give me the correct number?
` MR. KUSHAN: Yes. It's -- bear with me
`one second.
` JUDGE TIERNEY: I could find it. Just a
`moment. 237 and 238.
` MR. KUSHAN: That's correct.
` JUDGE TIERNEY: I just wanted to point
`out for purposes of today's call I will be
`referring mainly to the 171 with understanding that
`its effect is through the 178, and to the extent
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`necessary it also will be affecting the 00237 and
`00238 cases.
` Are there any questions regarding that?
` MR. PALYS: No, Your Honor. This is
`Joseph Palys. Just make a correction for the
`record. I believe the IPRs only go to 177.
` JUDGE TIERNEY: Thank you.
` MR. PALYS: I didn't know if you wanted
`these to control another matter.
` JUDGE TIERNEY: Since we do have the
`court reporter on the line we just want to make it
`clear that we're going to focus in -- if we only
`discuss 178 it does have affect to the other cases.
`I think that's my point. But yes, we should get
`the numbers corrected. So let the record reflect
`it only goes through 177 in my notes. Thank you
`for pointing that out.
` Anything else we need to be aware of
`before we begin? We'll start with patent owner.
` (No reply).
` JUDGE TIERNEY: Petitioner?
` MR. ASHE: Not for RPX.
`
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` JUDGE TIERNEY: Apple? All right.
`Hearing no objections, I also want to point out to
`the extent necessary there may be information
`discussed concerning confidential business
`information. So I would like to know if anyone is
`online who is not subject to the protective order.
`If so please speak up now.
` Hearing no concerns or parties
`identifying themselves as not subject to the
`protective order, everyone who is partaking in the
`phone call will be subject to the protective order
`and we shall now begin.
` The board has reviewed the discovery
`motions and has the following to say. Basically to
`start off with, we have looked at the allegations
`and there are three basic areas that we've looked
`into. One is the funding. Is the funding given by
`Apple to RPX for purposes of filing these series of
`IPRs by RPX, and is it sufficient showing that it's
`necessary to take further discovery on that issue.
` As of this time based on the information
`provided the board concludes there has not been
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`sufficient information shown to go forward with
`discovery on that issue. Currently there has only
`been showing of speculation that there is anything,
`any relationship where Apple was providing funding
`to RPX for the purposes of filing these IPRs.
` Next, the question came up and we are
`looking at the Guan factors in particular. As
`pointed out by Virnetx, there was some question or
`issue raised -- at least they're raising an
`issue -- as to whether there has been sufficient
`control and direction such that Apple directed RPX
`to file the IPRs; and, secondly, whether or not
`Apple is exerting or has some level of control
`sufficient to show that there's a privy
`relationship between Apple and RPX for the ongoing
`IPRs.
` We are saying today that we will allow
`some level of discovery but we want it noted for
`the record, since we do have a court reporter, that
`in allowing discovery we are in no way reaching the
`underlying merits of the issue. Merely we are
`saying that there is sufficient basis shown at this
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`point in time to allow Virnetx to have some
`discovery on that issue.
` Now, also we want to point out that when
`we say some level of discovery we are cognizant
`that the statute provides that discovery must be
`necessary in the interests of justice.
`Furthermore, the legislative history consistent
`with the substitute speaks as to being conservative
`in our grants as to the discovery.
` So with that in mind, the board wants it
`noted that we are willing to provide some level of
`discovery on those issues. We have reviewed
`Virnetx's request. However at this time we are
`concerned that the request may be overly broad.
` So what we have today is the following.
`What we're going to go ahead with is allow the
`parties to identify -- and we're thinking somewhere
`in the range of five pages. No more than five
`pages, we should say. The parties will have
`sufficient time -- we're thinking an arrangement of
`next Tuesday. And we're going to have the parties
`speak to this in a moment -- where the parties
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`would let us know what they can agree on to have
`for discovery.
` So option one is they would be able to
`come to an agreement on those issues. We're
`looking at something less than what has been
`requested but something more than the zero which is
`what the opposition stated.
` If the parties are unable to come to an
`agreement as to what discovery should be had
`between the parties on these issues, then they are
`to each file and identify the specific boundaries
`of the requests. Specifically Virnetx would come
`in with a request saying this is what they are
`looking for. Also RPX and Apple would come in with
`some level of discovery.
` If RPX and Apple come back again with
`zero discovery on these two issues and Virnetx
`comes in with discovery of a certain nature, just
`be aware that between zero and something, the board
`will be inclined to give some discovery.
` However if Virnetx comes in with an
`overly broad request and Virnetx (sic) and Apple
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`come in with a more reasonable request, understand
`that we'd be more likely to take a more reasonable
`narrow request.
` If none of the requests come in and
`appear reasonable to the board, then the default is
`the board will go ahead and select itself with the
`understanding I think the parties are aware of that
`when the board is required to go ahead and pick and
`choose on its own, no one ends up very happy.
` So having said all that I'll ask my
`co-panelists if they have anything further to add
`on these points before we turn to the parties.
` Judge Easthom, do you have any further
`things you would like to add for the record?
` JUDGE EASTHOM: No. Thank you, Judge.
` JUDGE TIERNEY: Judge Siu, would you
`like to add anything for the record?
` JUDGE SIU: I have nothing to add.
` JUDGE TIERNEY: Okay. So at this time
`we will go and ask the parties if they have any
`questions or concerns regarding our outline that we
`just provided. I will start with the patent owner,
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`Virnetx.
` MR. PALYS: Thank you, Your Honor. This
`is Joseph Palys. The one question I have is I
`understand from your ruling that if we come to an
`agreement the paper that we'd need to submit
`jointly would be five pages. But if there is no
`agreement am I correct to understand that our
`individual papers would be five pages as well?
` JUDGE TIERNEY: Yes. And actually let's
`back up. To sweeten the pot, shall we say, should
`the parties agree and have a joint request then the
`page limits are no longer necessary to be five.
`I'm open to a reasonable suggestion as to what it
`should be since it would be a joint request. And
`in fact do we actually need page limits if there's
`a joint request?
` MR. PALYS: The patent owner's position,
`the answer is no, I don't think so. But I will let
`the others respond.
` JUDGE TIERNEY: I'll go to first RPX.
`If it's a joint request would there need to be a
`page limit?
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` MR. ASHE: No, Your Honor.
` JUDGE TIERNEY: Apple?
` MR. KUSHAN: No, Your Honor.
` JUDGE TIERNEY: All right. So for
`purposes of today going forward the board
`authorizes the filing of a joint request with no
`page limit. The parties can go ahead and specify
`as they see fit. Again, keep in might the rules do
`provide whether the parties are in agreement as to
`discovery that the board -- the parties may agree
`at their own discretion and the board does not
`necessarily have to chime in as to the scope on
`that. So where the parties -- if they're able to
`agree, given that we are inclined to give some
`discovery, the board authorizes no page limit.
` Next, are there any further issues from
`Virnetx?
` MR. PALYS: Just to confirm, the due
`date is next Tuesday? Is that correct, Your Honor?
` JUDGE TIERNEY: That was what we had in
`mind. Again, we are cognizant that Virnetx has an
`upcoming filing for their preliminary response. We
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`wanted it to be timely with our discovery. If
`Tuesday causes concerns please let me know.
` MR. PALYS: No. We're fine with
`Tuesday, Your Honor.
` JUDGE TIERNEY: Okay. Any further
`things before I turn it over to the petitioner?
`RPX?
` MR. ASHE: We don't have anything
`additional, Your Honor.
` JUDGE TIERNEY: Okay. Apple, do you
`have any questions or concerns that we need to
`speak of today?
` MR. KUSHAN: I just wanted to raise two
`questions. First, the form of the filing that you
`would anticipate would be setting forth the
`discovery that has -- that the parties would agree
`to or would propose to be agreed to. It's not
`another briefing. It's simply identifying the
`discovery. Is that correct?
` JUDGE TIERNEY: Yes. The purpose of the
`briefing is not to go into whether or not the
`discovery should be authorized, but rather what is
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`the extent of the discovery that should be
`authorized.
` MR. KUSHAN: All right. And then the
`second question is in connection with the discovery
`that could be contemplated there is one issue about
`redundancy that I think we flagged in our brief,
`and that is to the extent that the discovery is
`directed toward communications between Apple and
`RPX, would there be a necessity of kind of dual
`production of essentially the same communications,
`or is that something you can provide guidance on at
`this point?
` JUDGE TIERNEY: I was hoping that the
`parties would be able to come to an amicable
`solution to that. My understanding is that there
`should not be a need to have duplicate production.
` MR. KUSHAN: Okay. Thank you, Your
`Honor.
` JUDGE TIERNEY: But I'm open to
`questions on that issue. Hearing no questions on
`that issue, my understanding is that the parties
`will be providing just one copy. Should there be
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`any questions or concerns about not having
`sufficient information provided of course we're
`available for a conference call on that issue.
` One issue I would like to point out now
`that we've had this brief discussion -- so we're
`going to have the filings on Tuesday. That will be
`five pages if the parties do not agree. Each party
`will be given five pages. I would like to go on to
`more the nitty gritty, which is I would like these
`papers filed -- Apple, do you have any problems
`filing them the same way you did in the last --
` MR. KUSHAN: No, Your Honor.
` JUDGE TIERNEY: So they will be filed
`with the 00171 as well as through the -- as pointed
`out by Virnetx -- through the 00177. The order
`we'll put out regarding this conference call will
`be put in both the 00171 through 177 as well as
`Apple filings.
` Now, an issue of concern that the board
`has is we understand that there is a concern that's
`been raised that the information sought would go to
`privileged communications. We would like at least
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`to have some discussion today as to the nature of
`the privilege and how we should go forward with
`this privilege being raised.
` And I will start with Apple on that
`issue since I believe it came up in their
`opposition.
` MR. KUSHAN: Thank you, Your Honor. The
`issue that we framed in our -- one of the issues we
`framed in our opposition was that there had been
`kind of an allegation of waiver of privilege which
`we did not believe had been substantiated. The
`motion filed by Virnetx didn't identify any waiver.
`And we also did not see a justification typically
`we'd see with requiring waiver of privileged
`communications.
` And in this vein we would assume that in
`the absence of a showing that it's fairly
`substantial, it would be improper to demand that
`either -- well, Apple -- waive privilege with
`regard to communications with counsel.
` You know, I can let RPX speak for
`itself. But our view is that they have not --
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`there has not been a basis established at this
`point for a waiver of privilege and we would assume
`that the discovery would be limited to the
`communications that would be non-privileged
`relating to RPX or Apple outside of the privileged
`communications with counsel.
` JUDGE TIERNEY: At this time the board
`has not found any waiver of privilege. Does that
`clarify things?
` MR. KUSHAN: Thank you, Your Honor.
` JUDGE TIERNEY: Okay. My concern, if
`you can speak a little more in detail, is I believe
`you've raised the issue of privilege. I believe it
`will be probably been coming up should there be
`some discovery on these issues. Can you enlighten
`the board as to how we should proceed where there
`is this privilege issue?
` MR. KUSHAN: Well, I guess we would
`proceed the way we would do it in litigation
`outside of the PTO proceedings where if there is a
`privileged communication sought we could provide a
`privilege log, if that is of value to the board.
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`But, you know, at some level I would hope that the
`parties could agree to just focus on the
`non-privileged communications that exist and to
`bypass the issue.
` JUDGE TIERNEY: And this is Judge
`Tierney. That was the way I looked at this, it was
`going to be similar to litigation, but I wanted to
`make sure that you didn't believe that there was
`anything different, any approach that we should
`take here.
` Am I correct in saying that you would
`approach this the same way you would approach
`district court litigation where the issue of
`privilege arises?
` MR. KUSHAN: From our perspective at
`Apple, yes.
` JUDGE TIERNEY: Going to RPX on that
`issue, do you view this as needing to be approached
`in any different light than, say, a district court
`discovery when privilege is raised?
` MR. ASHE: No, Your Honor.
` JUDGE TIERNEY: Virnetx?
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` MR. PALYS: No, Your Honor. The only
`thing I would add is like we would have in district
`court litigation, we would like to hopefully hold
`the option for in-camera inspection by the board if
`we get a privilege log. To the extent the board
`wants to review these documents we're open to allow
`that to happen.
` JUDGE TIERNEY: I will express that it
`is the board's hope that the parties will be able
`to work out the issues. As a matter of fact, it's
`our hope that we will have a joint request next
`Tuesday. Furthermore, should the parties not be
`able to agree as to privilege, we would strongly
`encourage them to work out the details before
`coming to the board.
` The board is available to help on these
`issues but we always believe it's in the best
`interests of the parties to work it out themselves.
`With that being said, is there anything further,
`Apple, that you had questions or concerns regarding
`our decision and order today?
` MR. KUSHAN: No, Your Honor.
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` JUDGE TIERNEY: Okay. I'll go back
`through. Before we adjourn I'm going to go back
`through everyone to make sure there is nothing
`further. I'll start again with the judges. Judge
`Siu, Judge Easthom, do you have anything further we
`need to raise today?
` JUDGE EASTHOM: Not from me, Your Honor.
`Judge Easthom.
` JUDGE SIU: Not from me either. Judge
`Siu.
` JUDGE TIERNEY: The panel has no further
`questions, so we'll go through the parties.
`Starting with patent owner.
` MR. PALYS: This is Joseph Palys. No
`further questions, Your Honor.
` JUDGE TIERNEY: RPX?
` MR. ASHE: No, Your Honor. Thank you.
` JUDGE TIERNEY: Apple?
` MR. KUSHAN: No, Your Honor. We're set.
` JUDGE TIERNEY: Okay. The last thing
`we'll say when the transcript becomes available --
`I believe, patent owner, you are providing the
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`court reporter today?
` MR. PALYS: That's correct, Your Honor.
` JUDGE TIERNEY: When the transcript is
`available would you please file it as an exhibit
`similar to the other transcripts you've had filed?
` MR. PALYS: Absolutely, Your Honor. And
`if I may, Jon, if you're on, we are requesting this
`to be rushed. If we can get a copy of that today
`that would be great. But we'll take care of that
`off line, Your Honor.
` JUDGE TIERNEY: All right. Thank you,
`everyone. We will put out an order summarizing
`what we've just discussed but keep in mind we will
`be referring and pointing to the transcript which
`is to be filed if the parties or the public would
`like further information.
` Is there any need to have this
`transcript identified as confidential subject to
`the protective order? I guess that's one issue I
`have before we adjourn. Patent owner?
` MR. PALYS: No, Your Honor.
` JUDGE TIERNEY: RPX.
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` MR. ASHE: I think I'd like to look at
`the transcript before.
` JUDGE TIERNEY: Understood.
` MR. ASHE: So maybe provisionally have
`it submitted under seal.
` JUDGE TIERNEY: Understood. Is that any
`concern, going to patent owner, if you submit it
`under seal, provisionally under seal, to give time
`to the RPX to go ahead and see if there's something
`that needs be subject to the protective order?
` MR. MODI: No, Your Honor. In fact, we
`might be able to be make it easier. So we don't
`have to submit filings, we can send the transcript
`to RPX's counsel and work with them before we file
`it.
` JUDGE TIERNEY: I would appreciate that.
`All right. So the parties will work it out prior
`to filing to see if there is anything that
`potentially needs to be sealed.
` With that we're adjourned. We'll put
`out an order and I will put the details. I will be
`pointing to the transcript should people need
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`further details, but the order should be pretty
`straightforward. If there are any questions of
`course please contact the board and arrange a
`conference call.
` With that we're adjourned. Thank you
`everyone.
` (Whereupon, the conference call ended at
`10:19 a.m. EST.)
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`CERTIFICATE OF REPORTER
`
`I, Jonathan Wonnell, a Registered
`Professional Court Reporter
`(NCRA #835577) and
`Notary Public of the State of Minnesota, County of
`Hennepin, do hereby certify that the foregoing
`transcript is a true and accurate record of these
`proceedings;
`that said proceedings were taken in
`Stenotype note by me on the 7th day of February,
`2014, commencing at 10:00 a.m. EST and ending at
`10:19 a.m. EST.
`
`I further certify that present on behalf
`of Party Virnetx were Joseph Palys, Esq., and
`Naveen Modi, Esq., of Finnegan, Henderson, Farabow,
`Garrett & Dunner, LLP; on behalf of Party RPX
`Corporation was Oliver R. Ashe, Jr., Esq., of Ashe
`P.C. and Gregory M. Howison, Esq., of Howison &
`Arnott, LLC; and on behalf of Party Apple Inc. were
`Jeffrey Kushan, Esq., and Joseph A. Micallef, Esq.,
`of Sidley Austin LLP.
`
`I further certify that I am not related
`to, nor associated with any of the parties or their
`attorneys, nor do I have any disqualifying
`interest, personal or financial,
`in the actions
`within.
`
`Dated this 7th day of February, 2014,
`Hennepin County, Minnesota.
`
`in
`
`n Wonnell
`
`
`Public, Hennepin County, Minnesota
`My Commission expires January 31, 2017
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`1
`
`A
`a.m 1:20 2:12
`6:3 26:8 27:6,7
`able 12:3 15:13
`17:14 22:9,13
`25:12
`absence 19:17
`Absolutely 24:6
`accurate 27:5
`actions 27:14
`add 13:11,14,17
`13:18 22:2
`additional 16:9
`adjourn 23:2
`24:20
`adjourned
`25:20 26:5
`Administrative
`3:7,9,11
`affect 8:13
`agree 12:1 14:11
`15:10,14 16:16
`18:7 21:2
`22:13
`agreed 16:17
`agreement 12:4
`12:9 14:5,7
`15:9
`ahead 11:16
`13:6,8 15:7
`25:9
`allegation 19:10
`allegations 9:15
`allow 10:17 11:1
`11:16 22:6
`allowing 10:20
`amicable 17:14
`answer 14:18
`anticipate 16:15
`Appeal 1:1 3:5
`Appeals 1:22
`2:13
`appear 13:5
`
`appearing 3:3
`Apple 5:12 7:1,3
`7:10,12 9:1,18
`10:4,11,13,15
`12:14,16,22
`15:2 16:10
`17:8 18:10,18
`19:4,19 20:5
`21:16 22:20
`23:18 27:11
`appreciate
`25:16
`approach 21:9
`21:12,12
`approached
`21:18
`areas 9:16
`arises 21:14
`Arnott 4:6
`27:11
`arrange 26:3
`arrangement
`11:20
`Ashe 3:15,16
`6:20,20 8:22
`15:1 16:8
`21:21 23:17
`25:1,4 27:10
`27:10
`