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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`___________________
`
`
`RPX, INC.
`Petitioner,
`
`v.
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`VIRNETX, INC. AND SCIENCE APPLICATION INTERNATIONAL
`CORPORATION,
`Patent Owner
`
`Patent No. 7,490,151
`Issued: February 10, 2009
`Filed: September 30, 2002
`Inventors: Victor Larson, et al.
`Title: Establishment of a Secure Communication Link Based Domain Name
`Service (DNS) Request
`____________________
`
`Inter Partes Review No. IPR2014-00173
`__________________________________________________________________
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`THIRD PARTY APPLE’S OPPOSITION TO PATENT OWNER’S
`MOTION FOR ADDITIONAL DISCOVERY
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`Paper No. 23
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`IPR2014-00173 – Apple’s Opposition to Additional Discovery
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`VirnetX’s requested discovery should be denied. First, VirnetX presents no
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`basis, beyond its own speculation, to support its discovery demands. It identifies
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`no evidence to suggest Apple exercised any control over RPX’s decision to prepare
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`or file the RPX petitions, and mischaracterizes what it seeks, stating its discovery
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`“narrowly target[s non-public] information about
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`,”
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`when, in reality; it seeks any information “regarding the RPX IPRs” to be used in
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`both this IPR and related district court proceedings. VirnetX also improperly
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`dismisses the burden of its discovery, ignoring that its requested discovery of
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`Apple, by its very nature, is duplicative of what it demands from RPX. It similarly
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`dismisses legitimate concerns about forcing Apple to reveal its litigation strategies
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`and positions, including privileged communications. And, throughout its motion,
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`VirnetX fails to show how the discovery it seeks relates specifically to the RPX
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`petitions – the necessary focus of the privity inquiry.
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`I.
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`VirnetX Has Not Shown that Relevant Evidence Actually Exists
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`Although it argues its discovery “seek[s] only a small set of materials
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`directly related to the RPX IPRs,” Mot. at 7, VirnetX’s actual requests seek any
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`evidence “regarding the RPX IPRs,” regardless when that evidence might have
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`come into existence, whether it is privileged or whether it is even relevant to the
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`issue of privity or these IPR proceedings. Ex. 2004 at 4; Ex. 2005 at 1. Given
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`VirnetX’s admission they would seek to use whatever they discover in their district
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`1
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`IPR2014-00173 – Apple’s Opposition to Additional Discovery
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`court discovery efforts here (Ex. 1074 at 30:21-31:17; Ex. 1077 at 14:8-15:10), one
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`can assume they will use this discovery to aid their district court litigation.
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`But even if the discovery were limited to interactions between Apple and
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`RPX before the RPX petitions were filed, it should be denied. VirnetX has
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`produced nothing to show the evidence they seek exists, much less that it
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`specifically concerns the preparation or filing of the RPX petitions, and ignores the
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`substantial evidence to the contrary. For example, it presents nothing to counter
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`the unequivocal statements in the RPX petitions that RPX was solely responsible
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`for (i) its decision to contest the VirnetX patents, (ii) picking which claims to
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`contest, (iii) selecting the grounds to raise, and (iv) paying the costs of preparing
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`the petitions and conducting the proceedings (Pet. at 6), statements which counsel
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`for RPX expressly confirmed in response to questions from the panel. Ex. 2001 at
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`63:12-65:6.
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` In three Board calls and in its motion,
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`2
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`IPR2014-00173 – Apple’s Opposition to Additional Discovery
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`Instead, VirnetX presents only irrelevant speculation. First, it theorizes that
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`if RPX successfully establishes that VirnetX’s patent claims are unpatentable, it
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`will have “advanced Apple’s interests.” Mot. at 2. But the Board has recognized
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`that is irrelevant to privity. See IPR2013-00215, Paper 10 at 4. Indeed, any of the
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`companies VirnetX has sued under these patents would equally benefit if RPX
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`prevails. And VirnetX cites nothing to support its contention that
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` (Mot. at 1). VirnetX also does not address the evidence in its
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`own exhibits that shows that RPX pursues a wide variety of activities (only one of
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`which is initiating PTO proceedings) to advance its openly stated corporate
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`mission of mitigating risks from patents of questionable validity. See Ex. 2006 at
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`1; Ex. 2007 at 6-7.
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`VirnetX also speculates that Apple must have controlled the RPX petitions
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`because “RPX contends the grounds in its petitions are ‘substantially identical’ to
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`the time-barred non-instituted Apple petitions.” Mot. at 1. But, the Apple
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`petitions are publicly available, as are more than 3 years of inter partes
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`reexamination records concerning the VirnetX patent claims, Ex. 2001 at 68:16-20,
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`and as the Board noted in a recent call, it is common practice for one party to copy
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`publicly available material from PTAB files and use them in its own filing.
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`3
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`IPR2014-00173 – Apple’s Opposition to Additional Discovery
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` Mot. at 2. VirnetX
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`strains to attach significance to this fact, claiming that “RPX and Apple took care
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`not to share with the Board the relationship between RPX and Apple’s counsel”
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`(Id. at 2)
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` Yet, Sidley’s
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`representation of RPX was freely admitted, so no further discovery is necessary to
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`establish this fact. And, while VirnetX labels
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` much less
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`evidence contradicting the RPX statements that it was solely responsible for
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`preparing and filing its petitions. Ex. 2001 at 63:12-65:6; Ex. 1074 at 12:11-20.
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`In any event, prior Board decisions refute the legal premise of this theory.
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`For example, in IPR2013-00028, which presents facts closely analogous to this
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`proceeding, Patent Owner contended because Petitioner’s counsel “represent[ed]
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`some of the co-defendants in a related litigation the co-defendants have had an
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`opportunity to exercise control” of the Petition. Id., Paper 31 at 4 (emphasis
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`added). The Board dismissed that argument as speculation, observing that Patent
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`Owner identified no evidence suggesting the co-defendants actually “have
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`exercised control of [the] proceeding in any manner.” Id. Notably, the Board
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`relied on representations from Petitioner’s counsel that the “real party-in-interest
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`4
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`IPR2014-00173 – Apple’s Opposition to Additional Discovery
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`information is correct and has not changed,” and that counsel understood it was
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`“under a continuing duty of candor to update any changes in the representations
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`they have made.” Id. The same representations were made by RPX in this
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`proceeding. Pet. at 6; Ex. 2001 at 63:12-65:6.
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`VirnetX cites In re Guan, Control No. 95/001,045 (Aug. 25, 2008), a case
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`where it was established that a third party funded and directed the requestor’s
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`conduct in connection with a specific reexamination proceeding. The evidence of
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`record here establishes the contrary – it shows Apple had no role in these RPX
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`petitions. The other cases VirnetX cites are simply irrelevant. In Asahi Glass Co.
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`v. Toledo Eng’g Co., 505 F.Supp.2d 423 (N.D. Ohio 2007), the court found issue
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`preclusion not because the lawyers shared counsel, but because they formed a joint
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`defense group to defend a trade secret claim and had reciprocal indemnity
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`agreements relating to that claim. Asahi at 434. In Phelps v. Hamilton, 122 F.3d
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`1309 (10th Cir. 1997), the court found privity because the plaintiff “could be said
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`to be directly responsible … for ‘controlling’ the entire course of the state court
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`proceedings.” Id., 122 F.3d at 1319. These two district court cases also present
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`facts not even remotely similar to those present in these proceedings.
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`At bottom, VirnetX’s motion asks the Board to infer Apple control simply
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`from the existence of
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` But the
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`Board has found far closer commercial relationships between parties insufficient to
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`5
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`IPR2014-00173 – Apple’s Opposition to Additional Discovery
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`establish privity. For example, in IPR2013-00215, the Board found no privity
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`despite finding: (i) petitioner a joint venture partly owned by the disputed party,
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`(ii) directors from that disputed party served on the board of the petitioner, (iii) the
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`petitioner and disputed party had an ongoing relationship and a mutual interest in
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`the outcome of the proceeding. Id., Paper 10 at 3-4. The Board found no privity
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`because, as here, there was no evidence of control of the petitioner by the disputed
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`party in connection with the petition. Id.; see also IPR2013-00178, Paper 22 at 6-7
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`(Sept. 4, 2013) (privity requires both parties to a joint venture to exercise control
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`over conduct of the proceeding). Thus, absent some evidence of control, additional
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`discovery on privity grounds is not warranted. IPR2013-00215, Paper 10 at 4.
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`And while VirnetX points to factors other than control and funding in its
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`brief (Mot. at 4.), this is a red herring – it does not even identify any such “other”
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`factors, and its discovery plainly targets control and funding.
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`II. Numerous Factors Weigh Against Granting VirnetX’s Discovery
`VirnetX improperly dismisses several factors the Board has found to weigh
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`against the grant of additional discovery. First, it ignores that its requests are
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`unduly burdensome, demanding information without limit as to time or specific
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`relevance to this proceeding. See Ex. 2004 at 4; Ex. 2005 at 1. Next, it dismisses
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`concerns about requiring Apple to reveal its litigation positions on privity,
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`asserting that “identification of RPI/privies” is proper simply because it is timely.
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`6
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`IPR2014-00173 – Apple’s Opposition to Additional Discovery
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`Mot. at 6. Timeliness is not a justification, let alone a compelling justification, to
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`order this extraordinary discovery. VirnetX next dismisses its ability to obtain
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`equivalent information by other means, stating it cannot use in these proceedings
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`any information it obtains via its parallel discovery efforts in district court. This
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`statement both contradicts what its counsel told the Panel (Ex. 1077 at 14:8-15:10)
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`and misses the point – its proposed discovery at best would prove facts already
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`established and, almost by definition, is duplicative of what it might obtain from
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`RPX. Finally, VirnetX presents no justification for its unprecedented demand for
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`production of Apple’s privileged information. Instead, VirnetX halfheartedly
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`contends Apple has waived privilege because it has “selectively chosen to disclose
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`certain information” (Mot. at 5), but VirnetX identifies no disclosure that presents
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`a legally cognizable basis for finding a waiver. See, e.g., Ex. 1074 at 25:12-17;
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`8:15-22. And Apple’s right to redact documents or produce privilege logs is not a
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`justification for authorizing discovery – it is simply another unjustifiable burden
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`that would be imposed on Apple.
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`III. Conclusion
`Because VirnetX has failed to show that it is necessary in the interests of
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`justice, the Board should deny its motion for additional discovery.
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`7
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`IPR2014-00173 – Apple’s Opposition to Additional Discovery
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`Dated: February 3, 2014
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`Respectfully Submitted,
`
`/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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`8
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`IPR2014-00173 – Apple’s Opposition to Additional Discovery
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`CERTIFICATE OF SERVICE
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`I hereby certify that on this 3rd day of February 2014, a copy of this Third
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`Party Apple Inc.’s Opposition to Patent Owner’s Motion for Additional Discovery,
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`has been served in its entirety by e-mail on the following counsel of record:
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`Joseph E. Palys
`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
`
`Oliver R. Ashe, Jr., Esq
`Ashe, P.C.
`1140 Isaac Newton Sq. North
`Suite 210
`Reston, VA 20190
`Phone: (703) 467-9001
`Fax: (703) 467-9002
`E-mail: oashe@ashepc.com
`
`
`Naveen Modi
`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
`
`Gregory M. Howison
`Howison & Arnott, LLP
`Lincoln Centre II
`5420 LBJ Freeway, Suite 660
`Dallas, TX 75240
`Phone: (972) 680-6050
`Fax: (972) 479-0464
`E-mail: ghowison@dalpat.com
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`Dated: February 3, 2014
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`Respectfully submitted,
`
`/Jeffrey P. Kushan/
`Jeffrey P. Kushan
`Reg. No. 43,401
`
`9
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