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`Case No. IPR2014-00238
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`Filed on behalf of: VirnetX Inc.
`By:
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`Joseph E. Palys
`Paul Hastings LLP
`875 15th Street NW
`Washington, DC 20005
`Telephone: (202) 551-1996
`Facsimile: (202) 551-0496
`E-mail: josephpalys@paulhastings.com
`
`
`
`
`
`Paper No.
`Filed: August 29, 2014
`
`Naveen Modi
`Paul Hastings LLP
`875 15th Street NW
`Washington, DC 20005
`Telephone: (202) 551-1990
`Facsimile: (202) 551-0490
`E-mail: naveenmodi@paulhastings.com
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`
`
`APPLE INC.
`Petitioner
`v.
`VIRNETX INC.
`Patent Owner
`
`
`
`Case IPR2014-00238
`Patent 8,504,697
`
`
`
`
`
`Patent Owner’s Response
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`Case No. IPR2014-00238
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`Table of Contents
`Introduction ...................................................................................................... 1
`I.
`II. Mr. Fratto’s Testimony Should Not Be Given Any Weight Because
`He Is Not One of Ordinary Skill ...................................................................... 1
`III. Mr. Fratto’s Testimony Should Not Be Given Any Weight Because
`He Has Repeatedly Demonstrated Bias Against VirnetX’s Patents ............... 6
`IV. Claim Construction .......................................................................................... 9
`A.
`“Secure Communication Link” (Claims 1-3, 11-13, 16-17, and
`24-27) ..................................................................................................10
`1.
`“Authentication” and “Address Hopping” Alone Do Not
`Result in a “Secure Communication Link” ...............................11
`VirnetX Disclaimed “Secure Communication Links” that
`Do Not Require Encryption ......................................................15
`“Virtual Private Network (VPN)” (Not a Claim Term) ......................19
`“Intercept[ing] . . . a request to look up an internet protocol (IP)
`address” (Claims 1 and 16) .................................................................23
`“Determining, in response to the request, whether the second
`network device is available for a secure communications
`service” (Claims 1 and 16) ..................................................................27
`V. Wesinger Does Not Anticipate Claims 1-3, 8-11, 14-17, 22-25, and
`28-30 ..............................................................................................................31
`A. Wesinger’s Disclosure .........................................................................31
`B. Wesinger Does Not Disclose Each and Every Feature of the
`Independent Claims .............................................................................36
`1. Wesinger Does Not Disclose the Claimed “Determining”
`Features .....................................................................................37
`a) Wesinger’s Firewall Allow/Disallow Decision
`Does Not Occur “In Response to the Request to
`Look up an IP Address” ..................................................37
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`B.
`C.
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`D.
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`2.
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`Case No. IPR2014-00238
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`b) Wesinger’s Firewall Allow/Disallow Decision
`Does Not Determine “Whether the Second
`Network Device Is Available for [the] Secure
`Communications Service” ..............................................46
`2. Wesinger Does Not Disclose the Claimed “Intercepting”
`Features .....................................................................................47
`C. Wesinger Does Not Disclose Each and Every Feature of the
`Dependent Claims ...............................................................................52
`1. Wesinger Does Not Anticipate Dependent Claims 8, 9,
`22, and 23 ..................................................................................52
`2. Wesinger Does Not Anticipate Dependent Claims 10 and
`29 ...............................................................................................53
`3. Wesinger Does Not Anticipate Dependent Claims 14 and
`28 ...............................................................................................55
`VI. Claims 4-7 and 18-21 Are Not Obvious Based on Wesinger in View
`of RFC 2543 ..................................................................................................56
`VII. Conclusion .....................................................................................................58
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`Case No. IPR2014-00238
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`TABLE OF AUTHORITIES
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`Page(s)
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`FEDERAL CASES
`Apple Inc. v. Achates Reference Publ’g, Inc.,
`IPR2013-00080, Paper No. 90 (June 2, 2014) ...................................................... 8
`Ethicon, Inc. v. U.S. Surgical Corp.,
`135 F.3d 1456 (Fed. Cir. 1998) ............................................................................ 8
`Garmin Int’l Inc. v. Cuozzo Speed Tech. LLC,
`IPR2012-00001, Paper No. 15 (Jan. 9, 2013) ..................................................... 19
`Grober v. Mako Prods., Inc.,
`686 F.3d 1335 (Fed. Cir. 2012) .......................................................................... 18
`Idle Free Sys., Inc. v. Bergstrom, Inc.,
`IPR2012-00027, Paper No. 26 (June 11, 2013) .............................................. 9, 49
`Jonsson v. Stanley Works,
`903 F.2d 812 (Fed. Cir. 1990) ............................................................................ 18
`KSR Int’l. Co. v. Teleflex, Inc.,
`550 U.S. 398 (2007) ............................................................................................ 46
`Krippelz v. Ford Motor Co.,
`667 F.3d 1261 (Fed. Cir. 2012) .......................................................................... 18
`Lindemann Maschinenfabrik v. Am. Hoist and Derrick,
`730 F.2d 1452 (Fed. Cir. 1984) .......................................................................... 51
`Microsoft Corp. v. Multi–Tech Sys., Inc.,
`357 F.3d 1340 (Fed. Cir. 2004) .......................................................................... 18
`Motorola Solutions, Inc. v. Mobile Scanning Tech., LLC,
`IPR2013-00093, Paper No. 28 (Apr. 29, 2013) .................................................. 19
`Net MoneyIN, Inc. v. VeriSign, Inc.,
`545 F.3d 1359 (Fed. Cir. 2008) .......................................................................... 50
`Printing Indus. of Am. v. CTP Innovations, LLC,
`IPR2013-00474, Paper No. 16 (Dec. 31, 2013) .................................................. 51
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`In re Robertson,
`169 F.3d 743, 745 (Fed. Cir. 1999) .................................................................... 53
`ScentAir Techs., Inc. v. Prolitec, Inc.,
`IPR2013-00179, Paper No. 9 (Apr. 16, 2013) .................................................... 49
`In re Skvorecz,
`580 F.3d 1262 (Fed. Cir. 2009) ............................................................................ 9
`Sundance, Inc. v. DeMonte Fabricating Ltd.,
`550 F.3d 1356 (Fed. Cir. 2008) ........................................................................ 5, 6
`Tagatz v. Marquette Univ.,
`861 F.2d 1040 (7th Cir. 1988) .............................................................................. 8
`Tempo Lighting Inc. v. Tivoli LLC,
`742 F.3d 973 (Fed. Cir. 2014) ...................................................................... 16, 17
`Wang Labs., Inc. v. Am. Online, Inc.,
`197 F.3d 1377 (Fed. Cir. 1999) .......................................................................... 18
`Xilinx, Inc. v. Intellectual Ventures I LLC,
`IPR2013-00112, Paper No. 14 (June 27, 2013) .................................................. 19
`In re Yamamoto,
`740 F.2d 1569 (Fed. Cir. 1984) ............................................................................ 9
`ZTE Corp. & ZTE (USA) Inc. v. ContentGuard Holdings, Inc.,
`IPR2013-00134, Paper No. 12 (June 19, 2013) .................................................. 19
`FEDERAL STATUTES
`35 U.S.C. § 103(a) ............................................................................................. 46, 58
`35 U.S.C. § 314 ........................................................................................................ 48
`35 U.S.C. § 316(e) ..................................................................................................... 1
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`I.
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`Case No. IPR2014-00238
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`Introduction
`Patent Owner VirnetX Inc. respectfully submits this Response to the Board’s
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`decision to institute inter partes review (Paper No. 15, the “Decision”) and to the
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`petition for inter partes review (Paper No. 1, the “Petition”) filed by Apple Inc.
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`The Board instituted review of U.S. Patent No. 8,504,697 (“the ’697 patent”) on
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`two grounds: (1) anticipation of claims 1-3, 8-11, 14-17, 22-25, and 28-30 by
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`Wesinger; and (2) obviousness of claims 4-7 and 18-21 over Wesinger in view of
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`RFC 2543.
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`In light of the disclosures of Wesinger and RFC 2543, and the analysis
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`below, Apple has not carried its “burden of proving . . . unpatentability by a
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`preponderance of the evidence.” 35 U.S.C. §316(e). The Board should enter
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`judgment against Apple and terminate this proceeding.
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`II. Mr. Fratto’s Testimony Should Not Be Given Any Weight Because He
`Is Not One of Ordinary Skill
`Apple’s purported expert, Michael Fratto, has repeatedly defined the level of
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`ordinary skill in the art for VirnetX’s patents as requiring a master’s degree in
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`computer science or computer engineering and approximately two years of
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`experience in computer networking and computer security. (See, e.g., Ex. 2021 at
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`1, ¶5, Declaration of Mr. Fratto filed Aug. 6, 2012 in Apple’s inter partes
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`reexamination control no. 95/001,789; Ex. 2022 at 1, ¶5, Declaration of Mr. Fratto
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`filed June 25, 2012 in Apple’s inter partes reexamination control no. 95/001,788.)
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`This is the same level of skill that Apple and nearly a dozen other parties have
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`Case No. IPR2014-00238
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`consistently advocated in related litigation. (Paper No. 12 at 15, “Preliminary
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`Response”; Ex. 2006 at 4, Memorandum Opinion and Order in VirnetX Inc. v.
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`Mitel Networks Corp. et al., Case No. 6:11-CV-18 (E.D. Tex. Aug. 1, 2012);
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`Ex. 1049 at 5, Memorandum Opinion and Order in VirnetX Inc. v. Cisco Systems,
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`Inc. et al., Case No. 6:10-CV-417 (E.D. Tex. April 25, 2012).)
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`It is also essentially the same level of skill that both Apple and Microsoft
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`have advocated in other inter partes reviews of VirnetX’s patents. (See, e.g.,
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`Ex. 2023 at 3, ¶7, Declaration of Dr. Roch Guerin in Apple’s IPR2014-00481,
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`Ex. 1011; Ex. 2024 at 3, ¶7, Declaration of Dr. Roch Guerin in Microsoft’s
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`IPR2014-00403 Exhibit 1011.) VirnetX’s expert, Dr. Fabian Monrose, also agrees
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`that a person of ordinary skill in art for VirnetX’s patents would have had a
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`master’s degree in computer science or computer engineering, as well as two years
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`of experience in computer networking with some accompanying exposure to
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`network security. (Ex. 2025 at 10, ¶ 12, Declaration of Fabian Monrose, Ph.D.,
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`“Monrose Decl.”) Because there is nearly universal agreement that this is the level
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`of skill that applies to VirnetX’s patents, the Board should apply it here.
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`It is undisputed that Mr. Fratto does not meet or exceed this level of skill
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`and, as a result, is not qualified to provide opinions in this proceeding. He is, in
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`fact, significantly below this level of skill. Mr. Fratto did not graduate high school,
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`instead earning a GED in 1983. (Ex. 2026 at p. 11, ll. 15-18, Transcript of August
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`Case No. IPR2014-00238
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`14, 2014 Deposition of Michael Fratto.) He then spent two years at a junior
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`college in Florida and three years at Towson University pursuing a degree in
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`Philosophy that he never completed. (Id. at p. 7, l. 17 - p. 9, l.) He then spent two
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`years at Syracuse University, receiving a bachelor of art’s degree in information
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`science and technology in 2001. (Id. at p. 9, l. 7 - p. 10, l. 14.) His
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`post-undergraduate education consists exclusively of a five-day introductory
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`course to Cisco routers. (Id. at p. 10, ll. 15-24.) He does not have a master’s
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`degree in computer science or computer engineering (or any other field). (See
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`Ex. 1003 at 8-11, ¶¶ 2-13.)
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`Mr. Fratto’s work experience also falls short of the level required for one of
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`ordinary skill in the art for VirnetX’s patents. Mr. Fratto worked a “variety of odd
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`jobs” for about a decade until the early 1990s, then worked on simple office
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`automation programs, and has since been an editor and analyst for technological
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`publications. (See, e.g., Ex. 2026 at p. 11, l. 19 - p. 13, l. 21; see also Ex. 1003 at
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`8-11, ¶¶ 2-13.) Mr. Fratto’s editorial-focused career has allowed him to work in an
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`environment that includes using some computer networking products, (see, e.g.,
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`Ex. 2026 at p. 17, l. 15 - p. 18, l. 4), but it falls short of including the type of
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`experience required to qualify him as a person of ordinary skill in the art. (See
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`Ex. 1003 at 8-11, ¶¶ 2-13.)
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`The Federal Circuit has explained that witnesses like Mr. Fratto who do not
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`possess at least ordinary skill in the art cannot testify regarding invalidity:
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`We hold that it is an abuse of discretion to permit a
`witness to testify as an expert on the issues of
`noninfringement or invalidity unless that witness is
`qualified as an expert in the pertinent art. Testimony
`proffered by a witness lacking the relevant technical
`expertise fails
`the standard of admissibility under
`Fed.R.Evid. 702. Indeed, where an issue calls for
`consideration of evidence from the perspective of one of
`ordinary skill in the art, it is contradictory to Rule 702 to
`allow a witness to testify on the issue who is not qualified
`as a technical expert in that art.
`…
`With regard to invalidity, for example, a witness not
`qualified in the pertinent art may not testify as an expert
`as to anticipation, or any of the underlying questions,
`such as the nature of the claimed invention, what a prior
`art references discloses, or whether the asserted claims
`read on the prior art reference.
`…
`Nor may a witness not qualified in the pertinent art
`testify as an expert on obviousness, or any of the
`underlying technical questions, such as the nature of the
`claimed invention, the scope and content of prior art, the
`differences between the claimed invention and the prior
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`Case No. IPR2014-00238
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`art, or the motivation of one of ordinary skill in the art to
`combine
`these references
`to achieve
`the claimed
`invention.
`Sundance, Inc. v. DeMonte Fabricating Ltd., 550 F.3d 1356, 1363-64 (Fed. Cir.
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`2008).
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`Because his qualifications and experience fall below those of a person of
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`ordinary skill in the art, no weight should be given to Mr. Fratto’s characterizations
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`of the ’697 patent, characterizations of the alleged prior art, or conclusory
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`statements about what one of ordinary skill in the art at the relevant time would
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`have understood.
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`Mr. Fratto’s and Apple’s attempts in this inter partes review to redefine the
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`level of skill in a way that might encompass Mr. Fratto should be rejected. Those
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`attempts are inconsistent with Mr. Fratto’s own prior sworn testimony that the
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`level of skill should be higher, are inconsistent with Apple’s own definition in
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`litigation and in other inter partes reviews, and are inconsistent with the level of
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`skill adopted by many other parties familiar with VirnetX’s patents.
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`Apple relied almost exclusively on Mr. Fratto’s declaration to support its
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`Petition, rarely citing Wesinger itself in its application of the reference to the
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`challenged claims. (See Paper No. 19 at 3-5; Paper No. 1.) The Decision also
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`relies extensively on Mr. Fratto’s testimony, citing Mr. Fratto’s declaration 15
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`times. (See Paper No. 15.) Both Apple’s and the Decision’s analyses are based on
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`testimony that should not be given any weight, see Sundance v. DeMonte, supra,
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`so the Board should enter judgment against Apple and terminate this proceeding
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`for this reason alone.
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`III. Mr. Fratto’s Testimony Should Not Be Given Any Weight Because
`He Has Repeatedly Demonstrated Bias Against VirnetX’s Patents
`Mr. Fratto has displayed a bias against VirnetX’s patents that is far outside
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`the norms a reasonable trier of fact would expect of an individual proffered as an
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`expert. He made public statements that were not disclosed by Apple, and thus not
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`considered in the Board’s decision to institute inter partes review, which make all
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`of his testimony questionable, particularly in light of the inaccurate conclusions he
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`draws in this proceeding. The Board should not give his testimony any weight.
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`Over the course of several years, Mr. Fratto has made public statements on
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`Twitter that reveal his bias against VirnetX’s patents. (See, e.g., Ex. 2026 at p. 73,
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`l. 22 - p. 74, l. 13; see also Exs. 2008-2020.) Mr. Fratto was first retained by
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`Apple in 2011, when he asked on Twitter for suggestions for a rate to charge as a
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`patent consultant. (See, e.g., Ex. 2026 at p. 58, ll. 17-18, and p. 82, l. 3 - p. 83, l. 8;
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`Ex. 2011.) Shortly thereafter, Mr. Fratto revealed that he does not view himself as
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`being neutral. Rather, Mr. Fratto announced that he views his role as including
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`“patent busting” rather than “patent consulting.” (Ex. 2018; Ex. 2026 at p. 94, ll.
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`4-11.) Later in 2013, Mr. Fratto went further, posting that “if someone wants to
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`retain me as an expert witness to bust [a patent] I will do it for free just to screw
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`Case No. IPR2014-00238
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`them.” (Ex. 2015, emphasis added; Ex. 2026 at p. 91, ll. 5-15.)
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`Not only is Mr. Fratto purposefully trying to “bust” VirnetX’s patents, he is
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`using improper techniques to do so. Two months after signing his declaration in
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`this matter, Mr. Fratto announced that he has “come to the conclusion patent
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`disputes aren’t won on merits but rather who can bury who under a mountain of
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`paper.” (Ex. 2013, emphasis added; Ex. 2026 at p. 94, l. 17 - p. 95, l. 6.) In this
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`context, it is not surprising that Mr. Fratto chose to sign a lengthy 201-page
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`declaration filled with inaccurate conclusions that are refuted below.
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`In 2012, only one week before signing a declaration in the 95/001,788
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`reexamination of a VirnetX patent, Mr. Fratto posted on Twitter that “every so
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`often I look at the cluster [censored] over stupid, obvious patents, and it pisses me
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`off anew. So short sighted and idiotic.” (Ex. 2019; Ex. 2026 at p. 86, l. 1 - p. 87, l.
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`21.) Given that Mr. Fratto’s only patent work has been against VirnetX, the bulk
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`of Mr. Fratto’s anti-patent Twitter posts are really against VirnetX patents. (See
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`Ex. 2026 at p. 49, l. 17 - p. 50, l. 9.) Mr. Fratto views “expert witnesses” such as
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`himself as benefitting personally from the type of attack he has mounted here. (Ex.
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`2017; Ex. 2026 at p. 92, l. 20 - p. 93, l. 14.)
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`Mr. Fratto’s bias is not a minor point. It affects his analysis. During his
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`deposition, Mr. Fratto admitted: “[t]o the best of my recollection, I don’t think I
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`have ever concluded that claims were not obvious or not anticipated.” (Ex. 2026 at
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`p. 58, l. 19 - p. 59, l. 1, emphasis added.) Mr. Fratto has also never taken these
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`proceedings seriously, even posting one day before his deposition in this matter
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`that “Council [sic] says I’m not allowed to make faces or gestures at opposing
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`[counsel] during a deposition. That’s no fun.” (Ex. 2008; Ex. 2026 at p. 91, l. 16 -
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`p. 92, l. 16.) He then begrudgingly stated, “I will be professional, I suppose.”
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`(Ex. 2008.)
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`Courts address an alleged expert’s bias by reducing the weight given to the
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`expert’s testimony. See, e.g., Ethicon, Inc. v. U.S. Surgical Corp., 135 F.3d 1456,
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`1465 (Fed. Cir. 1998); see also Tagatz v. Marquette Univ., 861 F.2d 1040, 1042
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`(7th Cir. 1988). In this case, Mr. Fratto has demonstrated extreme bias against
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`VirnetX and in favor of himself and Apple. His bias goes beyond the type of
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`general bias that the Board dismissed in Apple Inc. v. Achates Reference Publ’g,
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`Inc., IPR2013-00080, Paper No. 90 (June 2, 2014), another case involving an
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`Apple expert. No reasonable trier of fact would give Mr. Fratto’s testimony any
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`weight. Therefore, since Apple relied exclusively on Mr. Fratto’s declaration to
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`support its Petition and the Decision relies extensively on his testimony, the Board
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`should enter judgment against Apple and terminate this proceeding.
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`IV. Claim Construction
`The Petition identified five terms for construction. The Decision provided
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`Case No. IPR2014-00238
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`constructions for all but one of those terms. The Decision also provided a
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`construction for a term not identified by the parties for construction. VirnetX
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`responds to certain constructions below.
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`Although VirnetX’s constructions represent
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`the broadest reasonable
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`interpretation (“BRI”) of the claims in light of the specification and prosecution
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`history, in inter partes review, the Board should apply the claim construction
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`standard applied by the courts, especially given the litigations and prosecution
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`histories of patents in the same family as the ’697 patent. The BRI standard “is
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`solely an examination expedient, not a rule of claim construction.” In re Skvorecz,
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`580 F.3d 1262, 1267-68 (Fed. Cir. 2009). It is certainly justified during the
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`examination process because applicant has the opportunity to amend the claims
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`during prosecution. In re Yamamoto, 740 F.2d 1569, 1571 (Fed. Cir. 1984).
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`As the Board has noted, however, inter partes review is not an examination
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`but is “more adjudicatory than examinational, in nature.” Idle Free Sys., Inc. v.
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`Bergstrom, Inc., IPR2012-00027, Paper No. 26 at 6 (June 11, 2013). The ability to
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`amend claims during inter partes review is so severely restricted that the rationale
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`underpinning the BRI—the ability to freely amend claims—does not apply
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`especially given the litigations and prosecution histories of patents in the same
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`Case No. IPR2014-0023 8
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`family as the ’697 patent. As a result, to the extent the Board would have adopted
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`a narrower construction under the courts’ claim construction standard than it has
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`adopted here, it should adopt the narrower construction because the BRI standard
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`should not apply to this proceeding.
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`A.
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`“Secure Communication Link” (Claims 1—3, 11—13, 16—17, and
`24—27)
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`VirnetX’s Proposed
`Construction
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`Apple’s Proposed
`Construction
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`
`
`A direct communication
`link that provides data
`security through
`encryption
`
`A communication link in A transmission path that
`which computers
`restricts access to data,
`privately and directly
`addresses, or other
`communicate with each
`information on the path,
`other on insecure paths
`generally using
`between the computers
`obfuscation methods to
`where the communication
`hide information on the
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`is both secure and
`anonymous, and where
`the data transferred may
`or may not be encrypted
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`path, including, but not
`limited to, one or more of
`authentication,
`encryption, or address
`ho 0 u in ;
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`The Decision preliminarily construed “secure communication link” to mean
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`“a transmission path that restricts access to data, addresses, or other information on
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`the path, generally using obfuscation methods to hide information on the path,
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`including, but not limited to, one or more of authentication, encryption, or address
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`hopping.”
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`(Decision at 8.)
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`VimetX respectfully disagrees and requests
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`reconsideration of this construction.
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`Case No. IPR2014-00238
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`1.
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`“Authentication” and “Address Hopping” Alone Do Not
`Result in a “Secure Communication Link”
`As explained in the Preliminary Response, the Decision’s construction is
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`contrary to the plain meaning of “secure communication link” and the teachings of
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`the ’697 patent because it permits, but does not require, encryption. (See Paper
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`No. 12 at 20-26.) For example, the patent specification teaches that “data security
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`is usually tackled using some form of data encryption,” and it repeatedly discusses
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`using encryption. (Ex. 1001 at 1:57-58; see also id. at 10:26-27, 11:42-49, 34:38-
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`39.)
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`The Decision’s construction is also technically flawed. Of the obfuscation
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`methods in the construction—authentication, encryption, and address hopping—
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`only encryption restricts access to “data, addresses, or other information on the
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`path,” as required by the first portion of the construction. (Ex. 2025 at 11, ¶ 15,
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`Monrose Decl.) The other techniques alone do not provide the claimed security.
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`(Id.)
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`Authentication merely “[e]nsur[es] that a message originated from the
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`expected sender and has not been altered on route.” (Ex. 2004 at 3, Glossary for
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`the Linux FreeS/WAN Project; see Ex. 2025 at 12, ¶ 16, Monrose Decl.) It does
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`not prevent an eavesdropper from accessing data transmitted over an unsecure
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`communication link. (Ex. 2025 at 12, ¶ 16, Monrose Decl.) The specification
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`11
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`supports this fact by describing at least one scenario where an authenticated
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`Case No. IPR2014-00238
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`transmission occurs “in the clear”—i.e., over an unsecured communication link:
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`SDNS [secure domain name service] 3313 can be accessed
`through secure portal 3310 “in the clear”, that is, without using
`an administrative VPN communication link. In this situation,
`secure portal 3310 preferably authenticates the query using any
`well-known technique, such as a cryptographic technique,
`before allowing the query to proceed to SDNS [3313].
`(Ex. 1001 at 52:7-12; Ex. 2025 at 12, ¶ 16, Monrose Decl.)
`Address hopping alone also does not provide the claimed security, as there is
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`nothing inherent in moving from address to address that precludes an eavesdropper
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`from reading the details of a communication. (Ex. 2025 at 12-13, ¶ 17, Monrose
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`Decl.) This is why the ’697 patent discloses embodiments that use encryption in
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`conjunction with address hopping to protect, for example, the next address in a
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`routing scheme from being viewed by eavesdroppers. (See, e.g., Ex. 1001 at 3:36-
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`50, stating in part that “[e]ach TARP packet’s true destination is concealed behind
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`a layer of encryption generated using a link key”; see Ex. 2025 at 12-13, ¶ 17,
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`Monrose Decl.) The Decision contends that address hopping alone is sufficient
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`because the ’697 patent states that “[a]ddress hopping provides security and
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`privacy.” (Decision at 7, citing Ex. 1001 at 25:54-56, 40:66-68.) However, the
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`Decision overlooks that address hopping embodiments in the ’697 patent also use
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`encryption, and it is the encryption that provides security while moving from
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`address to address primarily contributes to privacy. (See, e.g., Ex. 1001 at 3:16-
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`Case No. IPR2014-00238
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`4:40; see also Ex. 2025 at 12-13, ¶ 17, Monrose Decl.)
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`In construing “secure communication link,” the Institution Decision in
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`related IPR2014-00237 cites dictionary definitions, but these definitions are for
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`peripheral terms and do not support the Decision’s construction of “secure
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`communication link.” (IPR2014-00237 Paper No. 15 at 9-10; IPR2014-00237
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`Exs. 3002, 3003; Ex. 2025 at 13, ¶ 18, Monrose Decl.) For example, IPR2014-
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`00237 Institution Decision refers to an IEEE dictionary definition of “security
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`service.” As defined, however, “security service” broadly pertains to securing
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`“system resources” in addition to data. (IPR2014-00237 Ex. 3003.) System
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`resources can be secured through physical means that include access controls or
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`authentication, such as where the computing system is in a locked room and the
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`person attempting to gain access to it must present a guard with credentials to
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`physically access the machine. (Ex. 2025 at 13, ¶ 18, Monrose Decl.) Securing
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`data that travels over a public network of switches and routers controlled by third
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`parties, where there is no opportunity for physically guarding access, cannot rely
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`solely on techniques like authentication. (Id.)
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`In addressing situations like those contemplated by the ’697 patent, the
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`IPR2014-00237 Institution Decision’s dictionaries support VirnetX’s view that a
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`“secure communication link” requires encryption. (Ex. 2025 at 14, ¶ 19, Monrose
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`Decl.) For example, a few lines above the general definition of “security” that the
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`Case No. IPR2014-00238
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`IPR2014-00237 Institution Decision relies on, the dictionary states that “secure
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`visual communications” is defined as “[t]he transmission of an encrypted digital
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`signal consisting of animated visual and audio information; the distance may vary
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`from a few hundred feet to thousands of miles.” (IPR2014-00237 Ex. 3002 at 3,
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`emphasis added; Ex. 2025 at 14, ¶ 19, Monrose Decl.) For signals traveling the
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`distances contemplated by the ’697 patent, and particularly where those distances
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`include third-party controlled network hardware, encryption is the only viable
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`mechanism for security over those physically unsecured portions of the networks.
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`(Ex. 2025 at 14, ¶ 19, Monrose Decl.)
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`While authentication and address hopping may be used in conjunction with
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`encryption to achieve data security, this fact does not make them sufficient by
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`themselves to satisfy the claim language. (Ex. 2025 at 14, ¶ 20, Monrose Decl.)
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`The Decision’s construction presents them as alternatives, allowing each to be
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`sufficient, so VirnetX disagrees with the construction at least to the extent it does
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`Case No. IPR2014-00238
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`not require encryption.1
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`2.
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`VirnetX Disclaimed “Secure Communication Links” that
`Do Not Require Encryption
`The ’697 patent explains that “secure communication links” require
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`encryption for the reasons discussed above. However, to the extent the Decision
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`indicates that the term would ordinarily encompass links without encryption,
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`VirnetX’s undisputed disclaimer should override the broader meaning.
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`Apple concedes in the Petition that the “Patent Owner unequivocally
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`disclaimed secure communication links that did not employ encryption.” (Pet. at 9
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`n.2.) Likewise, in district court litigation, Apple and other defendants argued that
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`encryption was required because “VirnetX unequivocally disclaimed ‘secure
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`communications links’ that are not encrypted” to overcome prior art during
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`1 Any other disagreements with the Decision’s construction that VirnetX
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`discussed in its Preliminary Response, such as the lack of a requirement that the
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`communication path be “direct,” do not appear to be relevant to the parties’
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`disputes, so VirnetX does not separately address them here. VirnetX similarly
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`does not address certain arguments that Apple made but that the Decision did not
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`discuss or adopt, such as Apple’s argument that claim differentiation supports a
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`broader construction of “secure communication link.”
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`reexamination. (Ex. 2002 at 2-3, Motion for Reconsideration in the ’417 Litigation
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`Case No. IPR2014-00238
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`(E.D. Tex. June 21, 2012); see also Ex. 1056 at 25-26, Patent Owner’s Response to
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`Office Action of Dec. 29, 2011, “One of ordinary skill in the art would have
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`understood a secure communication link to require encryption.”) The district court
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`agreed and adopted the same construction VirnetX now proposes in this inter
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`partes review. (See Ex. 2003 at 1, Order in the ’417 Litigation (E.D. Tex. Oct. 4,
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`2012).)2
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`The Decision declined to apply this disclaimer here, citing Tempo Lighting
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`Inc. v. Tivoli LLC, 742 F.3d 973 (Fed. Cir. 2014) for the notion that the PTO need
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`not adopt a disclaimer. (Decision at 6.) One significant difference between Tempo
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`Lighting and this inter partes review, however, is that Tempo Lighting involved
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`reexamination, where amending claims is a realistic option that is not subject to the
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`tight constraints the Office places on motions to amend in inter partes review.
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`Despite having more of an opportunity to amend—the Office’s alleged basis for
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`applying the broadest reasonable interpretation and more heavily scrutinizing
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`disclaimers—the Federal Circuit still did apply the disclaimer in Tempo Lighting.
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`2 This case is currently on appeal to the Federal Circuit. (See Ex. 2030,
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`Corrected Non-Confidential Brief for Plaintiffs-Appellees VirnetX Inc. and
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`Science Applications International Corporation.)
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`In inter partes review, where the opportun