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`Case No. IPR2014-00173
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`Paper No.
`Filed: January 27, 2014
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`Filed on behalf of: VirnetX Inc.
`By:
`Joseph E. Palys
`
`Naveen Modi
`Finnegan, Henderson, Farabow,
` Garrett & Dunner, L.L.P.
`11955 Freedom Drive
`Reston, VA 20190-5675
`Telephone: 571-203-2700
`Facsimile: 202-408-4400
`E-mail: joseph.palys@finnegan.com
`
` naveen.modi@finnegan.com
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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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`RPX CORPORATION
`Petitioner
`v.
`VIRNETX INC.
`Patent Owner
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`Case IPR2014-00173
`Patent 7,490,151
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`Patent Owner’s Motion for Discovery
`from RPX Corporation and Apple, Inc.
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`Case No. IPR2014-00173
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`Table of Contents
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`I.
`Precise Relief Requested ................................................................................. 1
`Factual Background ......................................................................................... 1
`II.
`III. Reasons for the Relief Requested .................................................................... 3
`IV. Conclusion ....................................................................................................... 7
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`Case No. IPR2014-00173
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`Table of Authorities
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`Statutes
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`35 U.S.C. § 312(a)(2) ............................................................................................. 3, 6
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`35 U.S.C. § 315(b) ................................................................................................. 3, 6
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`35 U.S.C. § 316(a)(5) ................................................................................................. 3
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`Rules
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`37 C.F.R. § 42.51(b)(2) .............................................................................................. 1
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`37 C.F.R. § 42.52(a) ................................................................................................... 1
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`Cases
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`Asahi Glass Co. v. Toledo Eng’g Co., 505 F. Supp. 2d 423
` (N.D. Ohio 2007) .................................................................................................. 5
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`In re Echostar Comms. Corp., 448 F.3d 1294, 1301 (Fed. Cir. 2006) ...................... 5
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`Garmin Int’l, Inc. v. Cuozzo Speed Techs. LLC, IPR2012-00001, Paper 26
`(P.T.A.B. March 5, 2013) ............................................................................ 3, 7
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`In re Guan, Control No. 95/001,045, Decision Vacating Filing Date
`(USPTO Aug. 25, 2008) .................................................................................. 4
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`Phelps v. Hamilton, 122 F.3d 1309 (10th Cir. 1997) ................................................ 5
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`Other
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`“Office Patent Trial Practice Guide,” 77 Federal Register 157
`(Aug. 14, 2012), pp. 48756-773 .................................................................. 4, 6
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`Case No. IPR2014-00173
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`I.
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`Precise Relief Requested
`VirnetX requests that the Board authorize the discovery from RPX and
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`Apple contained in Exhibits 2002-2005. See 37 C.F.R. §§ 42.51(b)(2), 42.52(a).
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`II.
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`Factual Background
`RPX provides defensive patent services to its clients. It acts “as an
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`extension of a client’s in-house legal team” and “as a trusted intermediary,” and
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`when litigation arises, “selectively clear[s its] clients from the suit.” (Exs. 2006,
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`2007 at 3, 2008.) To fund these services, RPX collects fees from its clients.
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`(Ex. 2007 at 9.)
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`at 1.)
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`(Id. at 1-2; see also Ex. 2001 at 64:15-18.)
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` (Ex. 1073
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`, RPX
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`petitioned for IPR of four VirnetX patents Apple was found to infringe.
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`(Ex. 2009.) RPX contends the grounds in its petitions are “substantially identical”
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`to the time-barred, non-instituted Apple petitions. (Pet. at 6; Exs. 2010-2016.) But
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`this is not an instance where the petitions were merely copied or modified from the
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`public record.
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` (Ex. 2001 at 7:11-18; Ex. 1074 at 8:1-5, 25:13-14.) RPX also
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`obtained access to Apple’s alleged expert, Michael Fratto, who submitted
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`declarations with the Apple and RPX petitions. (See, e.g., Exs. 1003 and 2017.)
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`RPX has also advanced Apple’s interests in these proceedings. Shortly after
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`the RPX petitions were filed, it came to light that the petitions neglected to
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`challenge three claims Apple was found to infringe. Over the next two days,
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`corrected petitions were filed solely to add new challenges to the infringed claims,
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`much to Apple’s benefit. (See Ex. 2009; Ex. 1074 at 16:15-17:11.) RPX also
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`requested that these proceedings be expedited, but RPX makes no products that
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`could infringe VirnetX’s patents. The urgency must be so RPX can “selectively
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`clear” Apple from its suit with VirnetX.
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`, throughout these proceedings, they
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`have attempted to give the impression they are operating independently to avoid
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`real-party-in-interest (“RPI”) and privity issues. For example, RPX and Apple
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`took care not to share with the Board the relationship between RPX and Apple’s
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`counsel. (See Ex. 2001 at 69:6-71:4, demonstrating how both Apple and RPX
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`refused to answer the Board’s question about whether Apple had provided any
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`assistance regarding the RPX petitions.) It was not until VirnetX mentioned the
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`metadata in the RPX petitions (Ex. 2001 at 71:11-22), which demonstrates that
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`Apple’s counsel was involved with the RPX petitions (Ex. 1074 at 13:12-18:11),
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`Case No. IPR2014-00173
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`that RPX requested another call with the Board to explain that
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` (See id. at 6:13-9:13.)
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`III. Reasons for the Relief Requested
`VirnetX moves to take additional discovery from RPX and Apple.
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`VirnetX’s discovery requests are “necessary in the interest of justice,” 35 U.S.C.
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`§ 316(a)(5), and meet each of the factors set forth in Garmin Int’l, Inc. v. Cuozzo
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`Speed Techs. LLC, IPR2012-00001, Paper 26, as explained below.
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`More Than a Possibility and Mere Allegation: VirnetX’s discovery
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`narrowly focuses on the nature and scope of the relationship between Apple and
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`RPX as it pertains to RPX’s IPR petitions. (See Exs. 2002-2005.) The discovery
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`is based on the known aspects of
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` that are
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`discussed above (more than a possibility and mere allegation), and is calculated to
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`render useful information that is favorable to VirnetX’s contention that RPX’s
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`petitions should be dismissed under 35 U.S.C. § 312(a)(2) for failing to identify
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`Apple as an RPI, and/or are time-barred under 35 U.S.C. § 315(b) because RPI’s
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`privy Apple was sued more than a year before RPX filed its petitions. See Garmin,
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`IPR2012-00001, Paper 26 at 7.
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`In particular, the requests seek:
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`Case No. IPR2014-00173
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`; communications
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`and payments between Apple and RPX regarding the RPX IPRs (useful at least to
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`show Apple’s involvement and funding of the RPX IPRs);
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`; communications about the RPX IPRs
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`between Apple and RPX, Sidley Austin, Howison & Arnott, and Ashe PC (useful
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`at least to show the nature and degree of Apple’s influence over the RPX IPRs);
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`and invoices, payments, agreements, communications between RPX and Sidley
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`Austin, and number of hours spent by various attorneys (useful at least to show the
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`nature and scope of Sidley’s representation of RPX and who paid for the IPRs).
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`Each discovery request seeks information related to the factors concerning
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`RPI and privity set forth in the Trial Practice Guide (“TPG”) and In re Guan. See
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`TPG at 48759-60; In re Guan, Control No. 95/001,045, Decision Vacating Filing
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`Date (Aug. 25, 2008) at 8. And while the Board initially declined to allow
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`additional discovery based on RPX’s representations that they alone control these
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`proceedings and pay for them (see Ex. 2001 at 73:14-74:10), “sole discretion,”
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`“control,” and funding are only portions of the RPI/privity inquiry. See Guan;
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`TPG at 48759-60. Moreover, the facts show otherwise and VirnetX should be
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`allowed discovery into the selective information provided by RPX and Apple.
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`Case No. IPR2014-00173
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`In addition, just because RPX and Apple share counsel does not render the
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`discovery sought less useful. (See Ex. 1074 at 26:3-14.) Indeed, “the existence of
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`shared counsel supports a finding of privity where other factors present suggest
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`that a unique relationship exists between the two parties.” Asahi Glass Co. v.
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`Toledo Eng’g Co., 505 F. Supp. 2d 423, 436 (N.D. Ohio 2007); see also Phelps v.
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`Hamilton, 122 F.3d 1309, 1319 (10th Cir. 1997) (“control need not be exercised
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`directly by the non-litigating party. It is sufficient that the choices were in the
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`hands of counsel responsible to the controlling person; moreover, the requisite
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`opportunity may exist even when it is shared with other persons.”) (internal
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`quotations omitted). If it were not a factor, one has to wonder why RPX and Apple
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`were not forthcoming about sharing counsel in the RPX petitions or the
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`teleconference of January 8, 2014.
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`Moreover, RPX and Apple should not be able to object on the basis of any
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`privilege, especially when they have selectively chosen to disclose certain
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`information while withholding other information in the RPX petitions and during
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`the teleconferences. See In re Echostar Comms. Corp., 448 F.3d 1294, 1301 (Fed.
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`Cir. 2006). It would be extremely prejudicial to VirnetX to allow RPX and Apple
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`to selectively offer information and not allow VirnetX to seek additional
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`information. And even if RPX or Apple were to claim privilege, the appropriate
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`response would be to provide redacted documents and a privilege log.
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`Case No. IPR2014-00173
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`Litigation Positions and Underlying Basis: VirnetX and RPX are not in
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`district-court litigation, and none of VirnetX’s requests implicate district-court
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`litigation positions or strategies of Apple or RPX. VirnetX also does not seek to
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`prematurely learn RPX’s and Apple’s positions in these IPRs.
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` Proper
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`identification of RPIs/privies is a threshold issue under 35 U.S.C. §§ 312(a)(2) and
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`315(b), so addressing the issue early is warranted. See TPG at 48759.
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`Ability to Generate Equivalent Information by Other Means: VirnetX’s
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`discovery requests narrowly target information about
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`that is not publicly available. Although VirnetX served subpoenas on RPX in
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`district court litigations to seek information for those cases, RPX refuses to
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`produce discovery there. (Exs. 2018 and 2019.) If RPX is compelled to provide
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`discovery in the district court, the discovery will likely be subject to the district
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`court’s protective order, which precludes using confidential information in any
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`proceeding other than the litigation. (See Exs. 2020 at 16, 2021 at 20-21.)
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`Similarly, VirnetX has served an interrogatory on Apple in the district court case to
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`seek information for that case. Apple has not responded yet, and when Apple does
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`respond, any disclosed information will also be likely unavailable in these
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`proceedings as its response will be subject to the district court’s protective order.
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`Moreover, resolving discovery issues in the district court will take time. For
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`example, VirnetX served subpoenas on New Bay Capital on July 15, 2013, but
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`Case No. IPR2014-00173
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`New Bay has yet to provide any responsive information. (Ex. 2022.) Here,
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`VirnetX’s preliminary response addressing RPI and privity issues is due March 6,
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`2014. Any resolution in the district court will likely occur well after that deadline.
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`Easily Understandable Instructions:
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` VirnetX’s
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`instructions
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`(see
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`Exs. 2002-2005 at 1-2) are easily understandable and are based on the instructions
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`already approved by the Board in Garmin. IPR2012-00001, Paper No. 26 at 14.
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`Requests Not Overly Burdensome: The limited requests seek only a small
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`set of materials directly related to the RPX IPRs. Moreover, RPX and Apple have
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`contended that there is little to no relationship between the two companies and
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`RPX’s relationship with Sidley Austin was brief. Thus, any alleged financial,
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`human resource, or time burden on RPX or Apple should be negligible. See
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`Garmin, IPR2012-00001, Paper 26 at 7.
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`IV. Conclusion
`Based on the above, VirnetX respectfully requests that the Board allow the
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`discovery contained in Exhibits 2002-2005.
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`Dated: January 27, 2014
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`Respectfully submitted,
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`By: /Joseph E. Palys/
`Joseph E. Palys
`Registration No. 46,508
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`Counsel for VirnetX Inc.
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`Case No. IPR2014-00173
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`Certificate of Service
`I certify that I caused to be served on the counsel identified below a true and
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`correct copy of
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`the
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`foregoing Patent Owner’s Motion
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`for Discovery
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`from RPX Corporation and Apple, Inc., by electronic means on January 27, 2014:
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`Oliver R. Ashe, Jr.
`Ashe, P.C.
`11440 Isaac Newton Sq. North, Suite 210
`Reston, VA 20190
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`Gregory M. Howison
`Howison & Arnott, LLP
`Lincoln Centre II
`5420 LBJ Freeway, Suite 660
`Dallas, TX 75240
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`Jeffrey P. Kushan
`Joseph A. Micallef
`Sidley Austin LLP
`1501 K Street NW
`Washington, DC 20005
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`Respectfully submitted,
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`By: /Joseph E. Palys/
`Joseph E. Palys
`Reg. No. 46,508
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`Counsel for VirnetX Inc.
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`Dated: January 27, 2014
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