IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`
`In re Patent of: Larson et al.
`U.S. Patent No.: 7,188,180 Attorney Docket No.: 38868-0002IP1
`Issue Date:
`March 6, 2007
`Appl. Serial No.: 10/702,486
`Filing Date:
`November 7, 2003
`Title:
`METHOD FOR ESTABLISHING SECURE COMMUNICATION LINK
`
`BETWEEN COMPUTERS OF VIRTUAL PRIVATE NETWORK
`
`Mail Stop Patent Board
`Patent Trial and Appeal Board
`U.S. Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`
`
`
`
`
`
`
`PETITION FOR INTER PARTES REVIEW OF UNITED STATES PATENT NO. 7,188,180
`PURSUANT TO 35 U.S.C. §§ 311–319, 37 C.F.R. § 42
`
`Page 1 of 62
`
`VIRNETX EXHIBIT 2024
`Microsoft v. VirnetX
`Trial IPR2014-00558
`
`

`

`Attorney Docket No. 38868-0002IP1
`IPR of U.S. Patent No. 7,188,180
`
`TABLE OF CONTENTS
`
`I. 
`
`II. 
`III. 
`
`2. 
`
`MANDATORY NOTICES UNDER 37 C.F.R § 42.8(a)(1) ........................................... 1 
`A.  Real Party-In-Interest Under 37 C.F.R. § 42.8(b)(1) ............................................ 1 
`B.  Related Matters Under 37 C.F.R. § 42.8(b)(2) .................................................... 1 
`C.  Lead And Back-Up Counsel Under 37 C.F.R. § 42.8(b)(3) ................................. 2 
`D.  Service Information .............................................................................................. 2 
`PAYMENT OF FEES – 37 C.F.R. § 42.103 ................................................................ 2 
`REQUIREMENTS FOR IPR UNDER 37 C.F.R. §§ 42.104 ........................................ 3 
`A.  Grounds for Standing Under 37 C.F.R. § 42.104(a) ............................................ 3 
`1. 
`Voluntarily dismissal of invalidity without prejudice of the 2007 and 2010
`VirnetX litigations nullifies service of corresponding complaints for
`purposes of 35 U.S.C. § 315(b). ................................................................ 4 
`Independent of considerations relating to dismissal of the 2007 and 2010
`VirnetX litigations, proper interpretation of 35 U.S.C. § 315(b) permits this
`IPR under the present circumstances ....................................................... 7 
`B.  Challenge Under 37 C.F.R. § 42.104(b) and Relief Requested ........................ 13 
`C.  Claim Construction under 37 C.F.R. §§ 42.104(b)(3) ........................................ 14 
`1. 
`“Virtual Private Network” and “Virtual Private Network Communication
`Link” ......................................................................................................... 16 
`“Secure Computer Network Address” ..................................................... 18 
`2. 
`“Secure Domain Name” ........................................................................... 19 
`3. 
`“Secure Domain Name Service” .............................................................. 20 
`4. 
`“Provisioning Information” ........................................................................ 21 
`5. 
`SUMMARY OF THE ‘180 PATENT ........................................................................... 23 
`A.  Brief Description ................................................................................................. 23 
`B.  Summary of the Prosecution History of the ’180 Patent .................................... 23 
`C.  The Effective Priority Date of the Claims of the ‘180 Patent .............................. 27 
`MANNER OF APPLYING CITED PRIOR ART TO EVERY CLAIM FOR WHICH AN
`IPR IS REQUESTED, THUS ESTABLISHING A REASONABLE LIKELIHOOD THAT
`AT LEAST ONE CLAIM OF THE ‘180 PATENT IS UNPATENTABLE ..................... 27 
`A. 
`[GROUND 1] – Provino Anticipates Claims 1, 10, 12-15, 17, 26, 28-31, and 33
` ........................................................................................................................... 28 
`[GROUND 2] – Provino in view of Guillen and Kosiur renders obvious claims 4,
`6, 20, 22, 35, and 37 .......................................................................................... 49 
`REDUNDACY ............................................................................................................ 55 
`VI. 
`VII.  CONCLUSION .......................................................................................................... 56
`
`IV. 
`
`V. 
`
`B. 
`
`i
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`Page 2 of 62
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`

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`Attorney Docket No. 38868-0002IP1
`IPR of U.S. Patent No. 7,188,180
`
`EXHIBITS
`
`
`MSFT-1001
`
`MSFT-1002
`
`U.S. Patent No. 7,188,180 to Larson et al. (“the ‘180 patent”)
`
`Excerpts from the Prosecution History of the ‘180 Patent (“the Prose-
`cution History”)
`
`MSFT-1003
`
`U.S. Patent No. 6,557,037 (“Provino”)
`
`MSFT-1004
`
`(Reserved)
`
`MSFT-1005
`
`Alvaro Guillen et al., 1993 International Conference on Network Proto-
`cols, An Architecture for Virtual Circuit/QoS Routing (Oct. 1993) (“Guil-
`len”)
`
`MSFT-1006
`
`Dave Kosiur, Building and Managing Virtual Private Networks (1998)
`(“Kosiur”)
`
`MSFT-1007
`
`(Reserved)
`
`MSFT-1008
`
`
`
`(Reserved)
`
`MSFT-1009
`
`(Reserved)
`
`MSFT-1010
`
`(Reserved)
`
`MSFT-1011
`
`
`
`Declaration of Dr. Roch Guerin (“Guerin Declaration”)
`
`MSFT-1012
`
`MSFT-1013
`
`
`
`MSFT-1014
`
`Dismissal without prejudice with regard to invalidity of VirnetX Inc.
`v.Microsoft Corp., Docket No. 6:07CV80
`Dismissal from VirnetX Inc. v. Microsoft Corp., Docket No. 6:10CV94
`
`Copy of Docket from VirnetX Inc. v. Microsoft Corp., Docket No.
`6:10CV94
`
`ii
`
`Page 3 of 62
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`

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`Attorney Docket No. 38868-0002IP1
`IPR of U.S. Patent No. 7,188,180
`Redacted Settlement Agreement between VirnetX Inc. and Microsoft
`Corporation (Exhibit 10.1 from VirnetX SEC filing)
`
`Claim Construction Opinion and Order from VirnetX, Inc. v. Microsoft
`Corp., Docket No. 6:07CV80
`
`Joint Claim Construction Chart Pursuant To P.R. 4-5(d), VirnetX Inc.,
`vs. Cisco Systems, Inc., Docket No. 6:10-CV-417
`
`Claim Construction Opinion and Order from VirnetX Inc., vs. Cisco
`Systems, Inc., Docket No. 6:10-CV-417
`
`E. Gavron, RFC 1535, A Security Problem and Proposed Correction
`With Widely Deployed DNS Software (Oct. 1993)
`RFC 791, Internet Protocol (Sep. 1981)
`(Reserved)
`(Reserved)
`
`Excerpts from the Prosecution History of Reexamination Control No.
`95/001,270
`Excerpts from the Prosecution History of Reexamination Control No.
`95/001,792
`
`MSFT-1015
`
`MSFT-1016
`
`MSFT-1017
`
`MSFT-1018
`
`
`MSFT-1019
`
`MSFT-1020
`MSFT-1021
`MSFT-1022
`
`MSFT-1023
`
`MSFT-1024
`
`
`
`iii
`
`Page 4 of 62
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`

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`Attorney Docket No. 38868-0002IP1
`IPR of U.S. Patent No. 7,188,180
`Microsoft Corporation (“Petitioner” or “Microsoft”) petitions for Inter Partes Review
`
`(“IPR”) under 35 U.S.C. §§ 311–319 and 37 C.F.R. § 42 of claims 1, 4, 6, 10, 12-15, 17, 20,
`
`22, 26, 28-31, 33, 35, and 37 (“the Challenged Claims”) of U.S. Patent No. 7,188,180 (“the
`
`‘180 patent”). As explained in this petition, there exists a reasonable likelihood that Mi-
`
`crosoft will prevail with respect to at least one of the Challenged Claims.
`
`The Challenged Claims are unpatentable based on teachings set forth in at least the
`
`references presented in this petition. Microsoft respectfully submits that an IPR should be
`
`instituted, and that the Challenged Claims should be canceled as unpatentable.
`
`I.
`
`MANDATORY NOTICES UNDER 37 C.F.R § 42.8(a)(1)
`
`Real Party-In-Interest Under 37 C.F.R. § 42.8(b)(1)
`A.
`Petitioner, Microsoft Corporation, is the real party-in-interest.
`
`
`
`Related Matters Under 37 C.F.R. § 42.8(b)(2)
`B.
`Microsoft is not aware of any terminal disclaimers for the ‘180 Patent. The ‘180 Pa-
`
`tent is presently involved in three pending litigations (the Litigations), one of which names
`
`Microsoft as a defendant: VirnetX Inc. et al. v. Microsoft Corporation, Docket No. 6:13cv351
`
`(E.D. Tex.) (“2013 VirnetX Litigation”); VirnetX Inc. v. Cisco Systems, Inc. et al., Docket No.
`
`6:10cv417 (E.D. Tex.); and VirnetX Inc. v. Apple Inc., Docket No. 6:13cv211 (E.D. Tex.).
`
`The ‘180 patent is also subject to co-pending inter partes reexamination control number
`
`95/001,792, which is currently at appeal to the Patent Trial and Appeal Board, and the ‘180
`
`Patent was earlier involved in an inter partes reexamination, identified by control number
`
`1
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`Attorney Docket No. 38868-0002IP1
`IPR of U.S. Patent No. 7,188,180
`97/001,270, for which a reexamination certificate was issued on June 7, 2011.
`
`Concurrently with this petition, Microsoft is filing another petition for IPR (identified
`
`with attorney docket number 38868-0002IP2) of the ‘180 patent. The relationship between
`
`the limited grounds presented in these two petitions is discussed in Section VI. Microsoft
`
`has also filed petitions for IPR of claims of another patent at issue in the 2013 VirnetX Liti-
`
`gation, namely U.S. Patent No. 7,987,274 (“the ‘274 Patent”). The ‘274 Patent is a continu-
`
`ation of a continuation of the ‘180 Patent, and thus, the ‘274 Patent and the ‘180 Patent
`
`share a similar specification.
`
`Lead And Back-Up Counsel Under 37 C.F.R. § 42.8(b)(3)
`C.
`Microsoft provides the following designation of counsel.
`
`LEAD COUNSEL
`W. Karl Renner, Reg. No. 41,265
`3200 RBC Plaza
`60 South Sixth Street
`Minneapolis, MN 55402
`T: 202-783-5070
`F: 202-783-2331
`
`
`BACKUP COUNSEL
`Kevin E. Greene, Reg. No. 46,031
`3200 RBC Plaza
`60 South Sixth Street
`Minneapolis, MN 55402
`T: 202-626-6376
`F: 202-783-2331
`
`Service Information
`D.
`Please address all correspondence and service to counsel at the address provided
`
`in Section I(C). Microsoft also consents to electronic service by email at IPR38868-
`
`0002IP1@fr.com.
`
`PAYMENT OF FEES – 37 C.F.R. § 42.103
`II.
`The Patent and Trademark Office is authorized to charge Deposit Account No. 06-
`
`1050 for the fee set in 37 C.F.R. § 42.15(a) for this Petition and for payment for any addi-
`
`2
`
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`Attorney Docket No. 38868-0002IP1
`IPR of U.S. Patent No. 7,188,180
`
`tional fees.
`
`III.
`
`REQUIREMENTS FOR IPR UNDER 37 C.F.R. §§ 42.104
`
`Grounds for Standing Under 37 C.F.R. § 42.104(a)
`A.
`Microsoft certifies that the ‘180 Patent is eligible for IPR. The present petition is be-
`
`ing filed within one year of service of a complaint against Microsoft in the 2013 VirnetX liti-
`
`gation.1
`
`VirnetX has asserted the ‘180 patent against Microsoft. Under the plain language of
`
`the statute, Microsoft’s petition is timely. Out of an abundance of caution, however, Mi-
`
`crosoft explains herein why VirnetX’s prior assertions do not impact Microsoft’s ability to
`
`bring the current IPR. Chief among these, (1) dismissal of Microsoft’s validity challenges in
`
`the prior disputes was without prejudice to Microsoft’s rights to challenge again; and (2) Mi-
`
`crosoft agreed to the prior dismissals in reliance upon VirnetX’s dismissal, settlement, re-
`
`lease and license (all of which VirnetX has ignored to sue Microsoft again).
`
`Contextually, in two prior instances, VirnetX asserted the ‘180 patent against Mi-
`
`crosoft: VirnetX Inc. v. Microsoft Corp., Docket Nos. 6:07CV80 and 6:10CV94 (“the 2007
`
`VirnetX litigation” and “the 2010 VirnetX litigation,” respectively)2. Neither these litigations
`
`
`1The complaint in the 2013 VirnetX litigation was served on April 23, 2013.
`
`2 The 2007 and 2010 VirnetX litigations accused Microsoft of infringement of both U.S. Pa-
`
`tent Nos. 6,502,135 and 7,188,180.
`
`3
`
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`Attorney Docket No. 38868-0002IP1
`IPR of U.S. Patent No. 7,188,180
`nor service of corresponding complaints bar Microsoft from petitioning for IPR of the ‘180
`
`patent under 35 U.S.C. § 315(b) for at least the following reasons.
`
`1) In agreeing to voluntarily dismiss the 2007 and 2010 VirnetX litigations, both par-
`
`ties stipulated that Microsoft’s defense of invalidity was dismissed without preju-
`
`dice, nullifying effect of the service of corresponding complaints for purposes of
`
`the applicable rules. See Ex. 1015, § 5.1. And, based on the “without prejudice”
`
`language, as well as on the licenses, releases, and other language of the settle-
`
`ments, Microsoft withdrew its challenges to the patent without prejudice to the
`
`right to bring them in the future.
`
`2) Independent of considerations relating to dismissal and nullification of the service
`
`in the 2007 and 2010 VirnetX litigations, proper interpretation of 35 U.S.C. §
`
`315(b) permits this IPR under the present circumstances.
`
`1. Voluntarily dismissal of invalidity without prejudice of the
`2007 and 2010 VirnetX litigations nullifies service of corre-
`sponding complaints for purposes of 35 U.S.C. § 315(b).
`In the 2007 and 2010 VirnetX litigations, VirnetX voluntarily dismissed its infringe-
`
`ment actions, pursuant to Fed. R. Civ. P. 41, before entry of a final judgment. The Board
`
`has previously found that, in appropriate circumstances, “a voluntary dismissal of an in-
`
`fringement action [nullifies] the effect of the alleged service of the complaint on the petition-
`
`er.” IPR2013-00175 (BAE Systems Information and Electronic Systems Integration, Inc. v.
`
`Cheetah Omni, LLC), Paper 15 at 3. Even voluntary dismissal of an infringement action
`
`4
`
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`Attorney Docket No. 38868-0002IP1
`IPR of U.S. Patent No. 7,188,180
`with prejudice – a situation that indicates a far more definitive resolution of an invalidity chal-
`
`lenge – has been found to nullify the legal effect of service of a corresponding complaint so
`
`long as there is a reason “why the dismissal with prejudice should be treated as a dismissal
`
`without prejudice.” IPR2013-00168 (Universal Remote Control, Inc. v. Universal Electron-
`
`ics, Inc.), Paper 9 at 6. Based on the facts of this case, the dismissals of the infringement
`
`actions in the 2007 and 2010 VirnetX litigations should indeed be treated as dismissals
`
`without prejudice as to invalidity for purposes of 35 U.S.C. § 315(b).
`
`Here, the Court dismissed the 2007 and 2010 VirnetX litigations pursuant to a set-
`
`tlement agreement that expressly preserved Microsoft’s ability to later challenge the validity
`
`of the patents-in-suit. The settlement agreement states, “Microsoft’s affirmative defenses
`
`and counterclaims of (i) non-infringement and invalidity shall be dismissed without preju-
`
`dice”. Ex. 1015, at § 5.1. Consistent with this, the Court dismissed the 2007 case, com-
`
`plementing its indication that “[a]ll claims asserted [by VirnetX] against Microsoft . . . are
`
`dismissed with prejudice” with overt recognition of Microsoft’s continued ability to challenge
`
`validity. Ex. 1012, at p. 1 (“dismissal is without prejudice to Microsoft’s ability to assert, in
`
`future actions, (i) affirmative defenses and/or counterclaims of invalidity or non-
`
`infringement.” (emphasis added)).
`
`With regard to the 2010 case, invalidity had not yet been raised, as Microsoft had not
`
`yet filed an answer to VirnetX’s complaint at the time of its dismissal. See Ex. 1014, at pp.
`
`2-3. Without any affirmative defenses and/or counterclaims having been asserted by Mi-
`
`5
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`Attorney Docket No. 38868-0002IP1
`IPR of U.S. Patent No. 7,188,180
`crosoft, the Court had no basis to include the defenses and counterclaims in its dismissal
`
`order. Rather, the Court properly left untouched Microsoft’s ability to later raise invalidity
`
`challenges in accordance with the settlement agreement (which unambiguously recognizes
`
`that the voluntary dismissal was without prejudice on invalidity in both the 2007 and 2010
`
`VirnetX litigations). Congruently, the settlement agreement adds that Microsoft “does not
`
`release or discharge (or grant a covenant or hold harmless as to) its Claims that the Li-
`
`censed Patents are invalid.” Ex. 1015, § 3.2.
`
`In exchange for retaining its right to later challenge the validity of the ‘180 patent, Mi-
`
`crosoft agreed to discontinue all of its then-pending challenges to the patents-in-suit in the
`
`Patent Office. Microsoft agreed to stop its participation in the then pending inter partes
`
`reexamination of the ‘180 patent that Microsoft had requested. See Ex. 1015, § 7.16. To
`
`that end, and in accordance with the agreement, Microsoft filed “with the United States Pa-
`
`tent and Trademark Office notifications in the then-current reexamination proceedings of the
`
`Patents-In-Suit indicating that Microsoft Corporation will not participate in those reexamina-
`
`tion proceedings.” Ex. 1015, § 7.16. And, Microsoft has not challenged the validity of the
`
`‘180 patent since the settlement of the 2007 and 2010 VirnetX litigations. Only now, in re-
`
`sponse to VirnetX once again suing Microsoft, does Microsoft seek to exercise the right that
`
`it earlier preserved to challenge the validity of the ‘180 patent.
`
`Importantly, the “without prejudice” manner in which Microsoft’s affirmative defenses
`
`and counterclaims were dismissed placed Microsoft and VirnetX in the same position as to
`
`6
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`Attorney Docket No. 38868-0002IP1
`IPR of U.S. Patent No. 7,188,180
`invalidity that they would have been had the earlier invalidity action never been brought.
`
`See IPR2013-00168 (Universal Remote Control, Inc. v. Universal Electronics, Inc.), Paper 9
`
`at 6 Microsoft does not seek a broad ruling that automatically treats every voluntary dismis-
`
`sal as nullifying the effect of service for inter partes review purposes. Rather, Microsoft re-
`
`spectfully submits that the particular circumstances of this case simply warrant such treat-
`
`ment. Because the prior dismissals did not prejudice Microsoft’s right to challenge validity,
`
`and because VirnetX can hardly claim harassment by way of administrative challenges un-
`
`coordinated with litigation, the circumstances here – where a patentee has sued on the
`
`same patents again after settling prior disputes and granting a license – justify allowing Mi-
`
`crosoft to test the validity of the patents. Microsoft presently faces a third assertion by Vir-
`
`netX of the ‘180 patent, and Microsoft earlier withdrew its validity challenge based on an
`
`agreement in which VirnetX overtly acknowledged (and thus, preserved) Microsoft’s ability
`
`to later challenge the ‘180 patent. These facts make it appropriate to treat the dismissal of
`
`the 2007 and 2010 VirnetX litigations as nullifying earlier service for purposes of § 315(b),
`
`making IPR available to Microsoft in this instance.
`
`2. Independent of considerations relating to dismissal of the
`2007 and 2010 VirnetX litigations, proper interpretation of 35
`U.S.C. § 315(b) permits this IPR under the present circum-
`stances
`If for any reason the Board decides that the dismissal of the prior litigations does not
`
`nullify the effect of service, the Board should nevertheless interpret 35 U.S.C. § 315(b) as
`
`permitting this IPR since the Petition is being filed within one year of service of a complaint.
`
`7
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`Attorney Docket No. 38868-0002IP1
`IPR of U.S. Patent No. 7,188,180
`Notably, § 315(b) does not specify a one-year deadline that runs from the date of the first
`
`complaint served on a petitioner. Rather, it states “[a]n inter partes review may not be insti-
`
`tuted if the petition requesting the proceeding is filed more than 1 year after the date on
`
`which the petitioner, real party in interest, or privy of the petitioner is served with a complaint
`
`alleging infringement of the patent.” 35 U.S.C. § 315(b).
`
`Microsoft appreciates that the Board may have found otherwise in Universal Remote
`
`Control (IPR2013-00168), but Microsoft seeks further consideration of the issue because
`
`statutory inclusion of the indefinite article “a” before the subject—“complaint”—creates an
`
`ambiguity in the application of § 315(b) to the current situation – where an IPR is filed within
`
`one year of service of a subsequent complaint alleging infringement of the patent, but after
`
`one year from service of an initial complaint(s) alleging infringement of the same patent.
`
`See IPR2013-00168 (Universal Remote Control, Inc. v. Universal Electronics, Inc.), Paper 9
`
`at 5. Here, multiple complaints alleging infringement by Microsoft of the same patent un-
`
`questionably creates multiple dates of service from which the preclusive effect of § 315(b)
`
`may be measured, and the later date is within one year of the present Petition in compliance
`
`with §315(b), if the most recent complaint is recognized as “a complaint alleging infringe-
`
`ment of the patent.”
`
`The Universal Remote Control Board acknowledged that “the plain language of the
`
`statute does not address the subject of multiple lawsuits involving the same patent.” Id. at
`
`p. 4. Yet, that Board declined an invitation to interpret the statute, suggesting to the contra-
`
`8
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`Attorney Docket No. 38868-0002IP1
`IPR of U.S. Patent No. 7,188,180
`ry that statute was in fact not subject to interpretation, despite the ambiguity inherent in the
`
`language of § 315(b).
`
`In as much as the § 315(b) language is open to competing interpretations that mate-
`
`rially impact its application to the present case, Microsoft believes that § 315(b) is neces-
`
`sarily open to interpretation, and Microsoft hereby requests the same. In doing so, Mi-
`
`crosoft advances the potential for at least the following two interpretations, while submitting
`
`that the second is more appropriate under the circumstances:
`
`(1) If “a complaint” is interpreted to mean “a first complaint,” then § 315(b) would be
`
`read: “An inter partes review may not be instituted if the petition requesting the
`
`proceeding is filed more than 1 year after the date on which the petitioner, real
`
`party in interest, or privy of the petitioner is served with a first complaint alleging
`
`infringement of the patent.”
`
`(2) If “a complaint” is interpreted to mean “any complaint” including “a latest filed
`
`complaint,” then § 315(b) would be read: “An inter partes review may not be insti-
`
`tuted if the petition requesting the proceeding is filed more than 1 year after the
`
`date on which the petitioner, real party in interest, or privy of the petitioner is
`
`served with a latest complaint alleging infringement of the patent.”
`
`In any event, as can be seen from each potential interpretation, “a complaint” leaves
`
`§ 315(b) open to various competing interpretations, and thus, is not sufficient to avoid the
`
`need for interpretation.
`
`9
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`Attorney Docket No. 38868-0002IP1
`IPR of U.S. Patent No. 7,188,180
`It has been noted that “because most of the elements of these new proceedings are
`
`required to be implemented through regulations, the USPTO also has substantial discretion
`
`in construing and applying the statutory text of chapters 31 and 32.” Joe Matal, A Guide to
`
`the Legislative History of the America Invents Act: Part II of II, 21 Fed. Cir. Bar J. 539, 604-5
`
`(2012). Given this authority, the Board should adopt the second potential interpretation of §
`
`315(b), which would permit institution of an IPR where the petition is filed within one year of
`
`service of any complaint alleging infringement of the patent. This interpretation is consistent
`
`with the legislative history, which reveals Congresses mutual goals of preventing “abusive
`
`serial challenges to patents” while “coordinat[ing] inter partes and post-grant review with liti-
`
`gation.” 157 Con. Rec. S1041 (daily ed. Mar. 1, 2011) (statement of Sen. Kyl). Indeed, un-
`
`der this proposed interpretation, a patentee would only be subject to challenge when bring-
`
`ing a complaint against a party, leaving them in full control over the situation, and preventing
`
`the kind of abusive challenges that Congress intended to shut down. To the point, when
`
`considering the various post-grant challenges included in the proposed legislation, the
`
`House of Representatives’ Committee on the Judiciary more specifically reported:
`
`The Committee recognizes the importance of quiet title to patent owners to
`ensure continued investment resources. While this amendment is intended to
`remove current disincentives to current administrative processes, the chang-
`es made by it are not to be used as tools for harassment or a means to pre-
`vent market entry through repeated litigation and administrative attacks on the
`validity of a patent. Doing so would frustrate the purpose of the section as
`providing quick and cost effective alternatives to litigation. Further, such ac-
`
`10
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`Attorney Docket No. 38868-0002IP1
`IPR of U.S. Patent No. 7,188,180
`tivity would divert resources from the research and development of inven-
`tions. As such, the Committee intends for the USPTO to address potential
`abuses and current inefficiencies under its expanded procedural authority.
`H.R. Rep. No. 112-98, 112th Cong., at 76 (2011).
`
`And yet, the patentee’s interests were not the only interests of Congressional con-
`
`cern. Congress also clearly intended to provide a quick and cost effective tool for defend-
`
`ants to use as an alternative to litigation. Congress didn’t express any intent to limit the use
`
`of this tool by defendants, other than to prevent the aforementioned harassment of patent-
`
`ee. Thus, the Board should interpret the statutory limits on IPRs (e.g., the limits imposed by
`
`§ 315(b)) as safe guards against abusive challenges aimed at harassing a patent owner and
`
`not as a means of precluding defendants from using otherwise available tools when con-
`
`fronted with new assertions of infringement, especially when patentees can hardly proclaim
`
`harassment when their new complaint of infringement triggers the availability of the tool.
`
`Adopting the proposed interpretation of § 315(b) satisfies these legislative goals. In
`
`particular, the proposed interpretation would prevent an IPR from being instituted more than
`
`one year after service of a first complaint, unless patentee brings new allegations of in-
`
`fringement against a defendant. By barring an IPR more than a year after service of a first
`
`complaint, without regard to service of subsequent complaints, a third party is disincentiv-
`
`ised from settling in a manner that promotes dismissal with prejudice; indeed, since such a
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`bar may prevent a party seeking to settle with prejudice from being able to settle without
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`jeopardizing their ability to later use USPTO tools to defend themselves if patentee dishon-
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`Attorney Docket No. 38868-0002IP1
`IPR of U.S. Patent No. 7,188,180
`ors the settlement terms. On the other hand, allowing an IPR to be filed within a year of
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`service of any subsequent complaints would coordinate IPR with subsequent litigation and
`
`provide the third party with the cost-effective alternative intended by Congress.
`
`Applying the proposed interpretation of § 315(b) to the facts of this case provides a
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`model of how the proposed interpretation aligns with Congressional intent. As described
`
`above, the settlement agreement that was mutually reached by the parties in the 2007 and
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`2010 VirnetX litigations specifically preserved Microsoft’s right to challenge the validity of
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`the ‘180 patent in future proceedings. In other words, the Patent Owner in this case specifi-
`
`cally consented to future challenges to the validity of the ‘180 patent. Therefore, the institu-
`
`tion of an IPR as a result of this petition cannot be considered abusive or harassing, be-
`
`cause the patent owner has implicitly consented to such a challenge.
`
`One can easily imagine other situations that unjustly frustrate Congressional intent if
`
`§315(b) were interpreted inconsistent with Microsoft’s proposed interpretation. For exam-
`
`ple, consider a situation in which a patent owner brings a first complaint alleging infringe-
`
`ment of a patent by a defendant’s first product. The defendant determines that it has a very
`
`strong argument for non-infringement with regard to the first product. To conserve re-
`
`sources, the defendant decides to focus its defense exclusively on non-infringement. How-
`
`ever, the patent owner subsequently brings a second complaint alleging infringement of the
`
`same patent by a second product produced by the defendant. In analyzing the patent with
`
`regard to the second product, the defendant determines that it does not have a strong ar-
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`Attorney Docket No. 38868—0002lP1
`IPR of US. Patent No. 7,188,180
`
`gument for non-infringement this time.
`
`In this situation, the defendant would not be barred
`
`from asserting invalidity of the patent at the second trial, and, for similar reasons, the de-
`
`fendant should not be precluded from pursuing an IPR of the patent owner’s patent.
`
`For at least these reasons, Microsoft submits that §315(b) is ambiguous when ap-
`
`plied to the situation where multiple lawsuits involve the same patent and therefore should
`
`be interpreted as permitting this Petition in light of congressional intent.
`
`B.
`
`Challenge Under 37 C.F.R. § 42.104(b) and Relief Requested
`
`Microsoft requests an IPR of the Challenged Claims on the grounds set forth in the
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`table shown below, and requests that each of the Challenged Claims be found unpatenta-
`
`ble. An explanation of how these Challenged Claims are unpatentable under the statutory
`
`grounds identified below is provided in the form of detailed description and claim charts that
`
`follow,
`
`indicating where each element can be found in the cited prior art, and the relevance
`
`of that prior art. Additional explanation and support for each ground of rejection is set forth
`
`in Exhibit MSFT-1011, the Declaration of Dr. Roch Guerin (“Guerin Declaration”), refer-
`
`enced throughout this Petition.
`
`Ground
`
`‘180 Patent Claims
`
`Basis for Rejection
`
`and 33 4, 6, 20, 22, 35, and 37
`
`1, 10, 12-15, 17, 26, 28-31, Anticipated under§ 102 by Provino
`
`Obvious under§ 103 based on Provino in
`view of Guillen and Kosiur
`
`The ‘180 patent issued from a string of applications dating back to an original appli-
`
`cation filed on October 30, 1998. However, the effective filing date for the embodiments re
`
`Page 17 of 62
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`13
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`Attorney Docket No. 38868-0002IP1
`IPR of U.S. Patent No. 7,188,180
`cited by Challenged Claims is no earlier than April 26, 2000, as explained below in Section
`
`IV(C).
`
`Provino qualifies as prior art under 35 U.S.C § 102(e). Specifically, Provino was filed
`
`on May 29, 1998, and issued on April 29, 2003, and therefore qualifies as prior art under 35
`
`U.S.C § 102(e), as the ‘180 patent is entitled to a priority date no earlier than April 26, 2000.
`
`See, supra, Section IV(C). Provino was not considered by the Examiner during the original
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`prosecution of the ‘180 patent, though it was submitted by VirnetX during reexamination of
`
`the ‘180 patent in an information disclosure statement that included thirty seven other refer-
`
`ences. See Ex. 1023, p. 322 (Information Disclosure Statement filed Apr. 2, 2010). At pre-
`
`sent, Provino has not been part of an instituted Patent Office rejection involving the ‘180 pa-
`
`tent, and has never even been specifically discussed on the record with regard to the ‘180
`
`patent, by either of the Patent Office or VirnetX.
`
`Guillen qualifies as prior art under 35 U.S.C § 102(b). Specifically, Guillen was pub-
`
`lished in October 1993, and therefore qualifies as prior art under 35 U.S.C § 102(b), as the
`
`‘180 patent is entitled to a priority date no earlier than April 26, 2000. See, supra, Section
`
`IV(C). Guillen has never before been considered by the Patent Office.
`
`Claim Construction under 37 C.F.R. §§ 42.104(b)(3)
`C.
`A claim subject to IPR is given its “broadest reasonable construction in light of the
`
`
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`Attorney Docket No. 38868-0002IP1
`IPR of U.S. Patent No. 7,188,180
`specification of the patent in which it appears.” 3 37 C.F.R. § 42.100(b). Accordingly, for
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`purposes of this proceeding only, Microsoft submits constructions for the following terms. All
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`remaining terms should be given their plain meaning.
`
`Under the law applicable to construction in IPR proceedings, the following claim
`
`terms should be construed applying the broadest reasonable interpretation to be broad
`
`enough to encompass the corresponding definition:
`
`Claim Term
`
`“virtual private network”
`
`“virtual private network communication link”
`
`“secure computer network address”
`
`“secure domain name”
`
`“secure domain name service”
`
`Definition Encompassed by Broadest
`Reasonable Interpretation
`a network of computers that privately com-
`municate with each other by encrypting traf-
`fic on insecure communication paths be-
`tween the computers
`any communication link between two end
`points in a virtual private network
`a network address that requires authoriza-
`tion for access and is associated with a
`computer configured to be acces