Paper No.
`Filed: September 19, 2013
`
`
`Filed on behalf of: VirnetX Inc.
`By:
`Joseph E. Palys
`
`Naveen Modi
`Finnegan, Henderson, Farabow,
` Garrett & Dunner, L.L.P.
`11955 Freedom Drive
`Reston, VA 20190-5675
`Telephone: 571-203-2700
`Facsimile: 202-408-4400
`E-mail: joseph.palys@finnegan.com
` naveen.modi@finnegan.com
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
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`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`
`
`
`APPLE INC.
`Petitioner
`
`v.
`
`VIRNETX INC.
`Patent Owner
`
`
`
`
`
`
`
`Case IPR2013-00354
`Patent 7,490,151
`
`
`
`
`
`
`
`
`
`
`
`
`Patent Owner’s Preliminary Response
`to Petition for Inter Partes Review
`of U.S. Patent No. 7,490,151
`
`
`
`
`
`
`
`1
`
`MICROSOFT 1019
`
`Petitioner Apple Inc. - Exhibit 1019, p. 1
`
`

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`Case No. IPR2013-00354
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`Table of Contents
`
`I.
`
`II.
`
`Introduction ...................................................................................................... 1
`
`The Petition Fails to Meet the Requirements for Instituting an
`Inter Partes Review ......................................................................................... 3
`
`A.
`
`The Petition Must Be Denied Under 35 U.S.C. § 315(b) ..................... 5
`
`B.
`
`C.
`
`D.
`
`1.
`
`2.
`
`3.
`
`Procedural History Relevant to § 315(b) .................................... 6
`
`The Plain Meaning of § 315(b) and the Board’s
`Precedent Bar the Petition ........................................................... 7
`
`The Legislative History Confirms that the Petition Is
`Barred ........................................................................................10
`
`4.
`
`Denying the Petition Is Not Unjust ...........................................12
`
`The Petition Fails to Comply with 37 C.F.R. § 42.104(b)(4) .............12
`
`The Board Should Not Institute Based on the Petition’s
`Redundant Grounds .............................................................................15
`
`The Petition Fails to Establish a Reasonable Likelihood of
`Prevailing as to Any Challenged Claim Based on Aventail or
`BinGO ..................................................................................................19
`
`1.
`
`2.
`
`3.
`
`4.
`
`5.
`
`The Two Documents Called “Aventail” Cannot
`Anticipate Claims 1-16 .............................................................19
`
`Aventail and RFC 1035 Cannot Render Obvious Claims
`3, 9, and 15 ................................................................................21
`
`Aventail and Reed Cannot Render Obvious Claims 5 and
`11 ...............................................................................................21
`
`The Two Documents Called “BinGO” Cannot Anticipate
`Claims 1-16 ...............................................................................22
`
`BinGO and Reed Cannot Render Obvious Claims 5 and
`11 ...............................................................................................24
`
`
`
`i
`
`2
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`Petitioner Apple Inc. - Exhibit 1019, p. 2
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`

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`Case No. IPR2013-00354
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`III. The Petition’s Claim Constructions Are Flawed and Should Be
`Rejected .........................................................................................................24
`
`A. Overview of the ’151 Patent ................................................................26
`
`B.
`
`C.
`
`D.
`
`E.
`
`F.
`
`G.
`
`H.
`
`I.
`
`J.
`
`K.
`
`L.
`
`M.
`
`N.
`
`“DNS Request” (Claims 1, 4, 7, 10, 13, and 16) ................................28
`
`“Domain Name” (Construe as Part of “Domain Name Server
`(DNS) Proxy Module” or “Domain Name Server (DNS)
`Module”) .............................................................................................29
`
`“Domain Name Server” (Construe as Part of “Domain Name
`Server (DNS) Proxy Module” or “Domain Name Server (DNS)
`Module”) .............................................................................................31
`
`“DNS or Domain Name Service” (Construe “DNS” in the
`Context of Other Terms Containing “DNS”) ......................................33
`
`“Domain Name Server (DNS) Proxy Module” (Claims 1 and 7) .......34
`
`“Domain Name Server (DNS) Module” (Claim 13) ...........................36
`
`“Secure Server” (Claims 1-3, 5-9, and 11-15) ....................................38
`
`“IP Address Hopping Scheme” (Claims 5 and 11) .............................39
`
`“Automatically Initiating an Encrypted Channel” /
`“Automatically Creating a Secure Channel” (Claims 1, 5-7, and
`11-13) ..................................................................................................41
`
`“Client” (Claims 1-16) ........................................................................42
`
`“Determining” (Claims 1, 2, 7, 8, 13, and 14) ....................................45
`
`“Forwarding the DNS Request to a DNS Function” (Claims 1,
`7, and 13) .............................................................................................46
`
`“Intercepts DNS Requests / Intercepting a DNS Request /
`Intercepted DNS Request” (Claims 1, 7, and 13) ...............................47
`
`IV.
`
`If Trial Is Instituted, VirnetX Requests an 18-Month Schedule ...................49
`
`V.
`
`Conclusion .....................................................................................................50
`
`ii
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`3
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`Petitioner Apple Inc. - Exhibit 1019, p. 3
`
`

`
`Table of Authorities
`
`Case No. IPR2013-00354
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`Page(s)
`
`
`FEDERAL CASES
`
`Advanced Display Sys., Inc. v. Kent State Univ.,
`212 F.3d 1272 (Fed. Cir. 2000) .......................................................................... 23
`
`Apple Inc. v. Int’l Trade Comm’n,
`No. 2012-1338, --- F.3d ----, 2013 WL 4007535
`(Fed. Cir. Aug. 7, 2013) ................................................................................ 20, 23
`
`Baldwin Graphic Sys., Inc. v. Siebert, Inc.,
`512 F.3d 1338 (Fed. Cir. 2008) .......................................................................... 31
`
`Conn. Nat’l Bank v. Germain,
`503 U.S. 249 (1992) ............................................................................................ 10
`
`Garmin Int’l, Inc. v. Cuozzo Speed Techs. LLC,
`IPR2012-00001 (Jan. 9, 2013) Paper No. 15 ...................................................... 25
`
`Graham v. John Deere Co. of Kansas City,
`383 U.S. 1 (1966) ................................................................................................ 21
`
`In re Zletz,
`893 F.2d 319 (Fed. Cir. 1989) ............................................................................ 25
`
`LaRose Indus., LLC v. Capriola Corp.,
`IPR2013-00120 (July 22, 2013) Paper No. 20 ............................................. 16, 18
`
`Liberty Mut. Ins. Co. v. Progressive Cas. Ins. Co.,
`CBM2012-00003 (Oct. 25, 2012) Paper No. 7 ............................................passim
`
`Motorola Solutions, Inc. v. Mobile Scanning Techs., LLC,
`IPR2013-00093 (Apr. 29, 2013) Paper No. 28 ................................................... 25
`
`Phillips v. AWH Corp.,
`415 F.3d 1303 (Fed. Cir. 2005) (en banc) .................................................... 25, 33
`
`Universal Remote Control, Inc. v. Universal Elecs., Inc.,
`IPR2013-00168 (Aug. 26, 2013) Paper No. 9 .................................................. 5, 9
`
`iii
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`4
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`Petitioner Apple Inc. - Exhibit 1019, p. 4
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`

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`Case No. IPR2013-00354
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`FEDERAL STATUTES
`
`35 U.S.C. § 102 ........................................................................................................ 18
`
`35 U.S.C. § 103(a) ................................................................................................... 21
`
`35 U.S.C. § 311(b) ............................................................................................. 20, 23
`
`35 U.S.C. § 313 .......................................................................................................... 1
`
`35 U.S.C. § 314(a) ............................................................................................... 4, 19
`
`35 U.S.C. § 315(b) ............................................................................................passim
`
`35 U.S.C. § 316(a)(1) ............................................................................................... 49
`
`FEDERAL REGULATIONS
`
`37 C.F.R. § 42.100(b) .............................................................................................. 24
`
`37 C.F.R. § 42.100(c) ............................................................................................... 49
`
`37 C.F.R. § 42.104(b)(4) ......................................................................... 4, 12, 13, 15
`
`37 C.F.R. § 42.107 ..................................................................................................... 1
`
`OTHER AUTHORITIES
`
`157 Cong. Rec. S5429 (daily ed. Sept. 8, 2011) ................................................ 10, 11
`
`Meeting of the H. Comm. on Judiciary, Transcript of Markup of H.R. 1249
`(Apr. 14, 2011) .................................................................................................... 11
`
`
`
`
`
`iv
`
`5
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`Petitioner Apple Inc. - Exhibit 1019, p. 5
`
`

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`Case No. IPR2013-00354
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`I.
`
`Introduction
`
`Patent Owner VirnetX Inc. (“VirnetX” or “Patent Owner”) respectfully
`
`submits this Preliminary Response in accordance with 35 U.S.C. § 313 and
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`37 C.F.R. § 42.107, responding to the Petition for Inter Partes Review (Paper
`
`No. 5, the “Petition”) filed by Apple Inc. (“Apple”).
`
`This is one of seven inter partes reviews requested by Apple against
`
`VirnetX’s patents. In these inter partes reviews, Apple seeks its third opportunity
`
`to challenge the validity of U.S. Patent No. 7,490,151 (“the ’151 patent”). Apple’s
`
`first opportunity arose in litigation, where it challenged the validity of certain
`
`claims of the ’151 patent in the Eastern District of Texas. But the court entered
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`final judgment in VirnetX’s favor, and Apple has appealed that ruling. (Ex. 2002,
`
`Jury Verdict Form Against Apple in VirnetX, Inc. v. Apple Inc., Case No. 6:10-CV-
`
`417 (E.D. Tex. Nov. 6, 2012) (“the ’417 Litigation”); Ex. 2006, Final Judgment
`
`Against Apple in the ’417 Litigation (E.D. Tex. Feb. 28, 2013).)
`
`Apple mounted its second validity challenge by requesting inter partes
`
`reexamination of the ’151 patent during that litigation. That reexamination
`
`(Control No. 95/001,697) is ongoing. Despite having a validity challenge pending
`
`before the Office, Apple attempts to initiate its third validity challenge by filing
`
`this Petition for inter partes review against the ’151 patent. But, as explained
`
`
`
`1
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`6
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`Petitioner Apple Inc. - Exhibit 1019, p. 6
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`

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`Case No. IPR2013-00354
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`below, institution based on the Petition is statutorily barred, and there is no reason
`
`to give Apple this additional opportunity.
`
`There are also two other ongoing proceedings at the Office against the ’151
`
`patent. One is an inter partes reexamination filed by Cisco (Control No.
`
`95/001,714). The Office merged that proceeding with Apple’s Control No.
`
`95/001,697. The second is an inter partes review requested by New Bay Capital
`
`(Case No. IPR2013-00376). As a result, there are now four post-grant challenges
`
`before the Office concerning the ’151 patent: Apple’s and Cisco’s inter partes
`
`reexaminations, New Bay’s inter partes review petition, and Apple’s Petition.
`
`These proceedings are largely duplicative of one another, and instituting
`
`Apple’s inter partes review will only serve to duplicate efforts already undertaken
`
`in litigation and in pending reexamination of the ’151 patent. Indeed, Apple’s
`
`Petition proposes rejections based on Aventail alone or in combination with
`
`RFC 1035, on BinGO, and on Beser alone or in combination with RFC 2401.
`
`These references are also asserted in Apple’s ongoing reexamination of the ’151
`
`patent. (Compare Petition with Ex. 2007, Request for Inter Partes Reexamination
`
`Under 35 U.S.C. § 311, filed July 25, 2011, in Control No. 95/001,697.)
`
`Apple’s Petition is also defective in a number of ways described below. As
`
`one example, Apple proposes several defective claim constructions that do not
`
`represent the broadest reasonable interpretation of the claims in light of the
`
`2
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`7
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`Petitioner Apple Inc. - Exhibit 1019, p. 7
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`

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`Case No. IPR2013-00354
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`specification. Because its proposed rejections are based on incorrect constructions,
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`Apple cannot demonstrate a reasonable likelihood of prevailing for any claim of
`
`the ’151 patent. Accordingly, the Board should not institute this proceeding.
`
`II. The Petition Fails to Meet the Requirements for Instituting an
`Inter Partes Review
`
`The Board need not waste its resources on Apple’s latest attempt to
`
`challenge the ’151 patent because the Petition does not comply with the
`
`requirements for instituting inter partes review. Each ground will be discussed in
`
`more detail in the sections below, but in short, one defect that disposes of the entire
`
`Petition is that it is time-barred under 35 U.S.C. § 315(b). The Petition was filed
`
`more than one year after Apple was served with a complaint alleging infringement
`
`of the ’151 patent. Accordingly, the Petition should be denied based on the plain
`
`language of the statute, the Board’s precedent, and the relevant legislative history.
`
`Apple also asks the Board to find anticipation based on combinations of
`
`references that are not incorporated by reference into each other, which is contrary
`
`to basic principles of anticipation law. What Apple calls “Aventail” (Ex. 1007) is
`
`actually two separate documents, as even Apple’s declarant acknowledges. And
`
`what Apple calls “BinGO” (Ex. 1008) is also two separate documents, improperly
`
`merged by Apple under an unsupported claim of incorporation by reference.
`
`Apple’s mischaracterization of Aventail and BinGO as unitary references also
`
`dooms its obviousness positions based on those references because Apple never
`
`3
`
`8
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`Petitioner Apple Inc. - Exhibit 1019, p. 8
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`Case No. IPR2013-00354
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`takes into account the separateness of each reference or the differences between
`
`each reference and the ’151 patent claims. Thus, Apple cannot establish a
`
`reasonable likelihood of prevailing as to any ground based on Aventail or BinGO.
`
`35 U.S.C. § 314(a).
`
`Apple also violates 37 C.F.R. § 42.104(b)(4) because the Petition fails to
`
`“specify where each element of the claim is found in the prior art patents or printed
`
`publications relied upon.” 37 C.F.R. § 42.104(b)(4). It cites exclusively to three
`
`voluminous declarations accompanying the Petition and not to the Aventail,
`
`BinGO, Beser, RFC 1035, Reed, Blum, or Hoke references themselves. Moreover,
`
`Apple fails to identify the features of these references that allegedly correspond to
`
`each ’151 claim feature. Instead, Apple broadly generalizes the disclosure of each
`
`reference without discussing specific aspects of them.
`
`Apple also proposes grounds of rejection that are redundant of one another.
`
`Apple does not explain any differences between its parallel proposed rejections, or
`
`explain how any particular proposed rejection improves on another in any way.
`
`Addressing these redundant grounds would significantly burden the Board and the
`
`Patent Owner, and it would cause unnecessary delay of the inter partes review
`
`proceedings, all without any added benefit. Liberty Mut. Ins. Co. v. Progressive
`
`Cas. Ins. Co., CBM2012-00003 (Oct. 25, 2012) Paper No. 7.
`
`4
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`9
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`Petitioner Apple Inc. - Exhibit 1019, p. 9
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`

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`Case No. IPR2013-00354
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`A. The Petition Must Be Denied Under 35 U.S.C. § 315(b)
`
`The plain language of 35 U.S.C. § 315(b) compels dismissal of the Petition.
`
`The statute prohibits inter partes review of a patent based on a petition filed more
`
`than one year after the petitioner has been served with “a complaint” alleging
`
`infringement of the patent. It is undisputed that VirnetX served Apple with
`
`“a complaint” alleging infringement of the ’151 patent more than one year before
`
`the Petition was filed. Apple asks the Board to ignore this fact and instead focus
`
`on a later-served complaint, which Apple contends resets the one-year time period
`
`for filing a petition for inter partes review. The Board has already addressed this
`
`same issue in another proceeding, where it rejected Apple’s view and adopted
`
`VirnetX’s interpretation of § 315(b). Universal Remote Control, Inc. v. Universal
`
`Elecs., Inc., IPR2013-00168 (Aug. 26, 2013) Paper No. 9. As discussed below, the
`
`Board’s and VirnetX’s interpretation is also supported by the relevant legislative
`
`history.
`
`Apple’s argument that dismissing the Petition would “unfairly foreclose use
`
`of the IPR system” also rings hollow given that Apple has repeatedly availed itself
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`5
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`10
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`Petitioner Apple Inc. - Exhibit 1019, p. 10
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`

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`Case No. IPR2013-00354
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`of the district court and the Office to challenge the ’151 patent, including in a still-
`
`pending inter partes reexamination proceeding.1
`
`1. Procedural History Relevant to § 315(b)
`
`VirnetX filed its first complaint against Apple on August 11, 2010, in the
`
`’417 Litigation, alleging infringement of claims 1, 3, 6-10, 12, and 13 of the ’151
`
`patent (“the August 2010 Complaint”). (Ex. 2001, VirnetX Inc.’s Original
`
`Complaint in the ’417 Litigation (E.D. Tex. Aug. 11, 2010.) VirnetX served the
`
`complaint on Apple on August 18, 2010. (Ex. 2008, Proof of Service of VirnetX’s
`
`Original Complaint on Apple in the ’417 Litigation (E.D. Tex. Aug. 18, 2010).)
`
`As explained above, in the litigation involving this complaint, which was
`
`amended2 at times throughout the case, Apple challenged the validity of the ’151
`
`
`1 Apple’s Petition should also not be joined with New Bay’s, if instituted, for
`
`the reasons discussed in VirnetX’s Opposition to Apple’s Motion for Joinder, filed
`
`August 28, 2013.
`
`2 In the ’417 Litigation, VirnetX served Apple with amended complaints
`
`alleging infringement of the ’151 patent on February 4, 2011, and April 5, 2011.
`
`(Ex. 2009, Plaintiff VirnetX Inc.’s First Amended Complaint in the ’417 Litigation
`
`(E.D. Tex. Feb. 4, 2011); Ex. 2005, Plaintiff VirnetX Inc.’s Second Amended
`
`Complaint in the ’417 Litigation (E.D. Tex. Apr. 5, 2011).)
`
`6
`
`11
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`Petitioner Apple Inc. - Exhibit 1019, p. 11
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`Case No. IPR2013-00354
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`patent. It did not succeed. A jury upheld the validity of the asserted claims, and
`
`the district court entered judgment finding those claims valid. (Exs. 2002, 2006.)
`
`After obtaining the favorable jury verdict, VirnetX served Apple with
`
`another complaint (Ex. 1050) on December 31, 2012 (“the 2012 Complaint”).
`
`(Ex. 2010 at 2, Proof of Service of VirnetX Inc.’s Complaint in VirnetX Inc. v.
`
`Apple Inc., Case No. 6:12-CV-00855 (E.D. Tex.Dec. 31, 2012).) The 2012
`
`Complaint asserts the same ’151 patent claims as asserted in the August 2010
`
`Complaint, but it alleges infringement by several Apple products that were not
`
`included in the earlier complaint. (Ex. 1050 at 4-11.)
`
`Concurrent with the above litigations, Apple has also challenged the validity
`
`of the ’151 patent in the Office by initiating inter partes reexamination Control No.
`
`95/001,697, which remains pending. Although Apple has availed itself of these
`
`previous opportunities to challenge the validity of the ’151 patent, it now seeks a
`
`further opportunity by filing the present Petition. The Petition was filed in
`
`June 2013, long after Apple was first served with a complaint alleging
`
`infringement of the ’151 patent.
`
`2. The Plain Meaning of § 315(b) and the Board’s Precedent Bar
`the Petition
`
`Under 35 U.S.C. § 315(b), “[a]n 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
`
`7
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`12
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`Petitioner Apple Inc. - Exhibit 1019, p. 12
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`Case No. IPR2013-00354
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`complaint alleging infringement of the patent.” 35 U.S.C. § 315(b) (emphasis
`
`added). The language “a complaint” is not restrictive, and Apple agrees that it
`
`means “any complaint.” (Petition at 2.) Thus, the directive of § 315(b) is clear: if
`
`a petition is filed more than one year after the petitioner is served with any
`
`complaint, inter partes review may not be instituted. Here, Apple filed its Petition
`
`in June 2013, more than one year after it was served with the August 2010
`
`Complaint. Under the plain language of § 315(b), therefore, an inter partes review
`
`may not be instituted and Apple’s Petition must be dismissed.
`
`Apple contends that VirnetX’s service of the later 2012 Complaint resets the
`
`clock for purposes of § 315(b), making its Petition timely. (See Petition at 2.)
`
`Apple’s proposed statutory construction, however, turns § 315(b) on its head.
`
`According to Apple, “a petition filed within 1 year of the date any complaint
`
`alleging infringement of the patent is served on a petitioner is timely . . . .”
`
`(Petition at 2, emphases added.) But § 315(b) does not permissively define when a
`
`petition “is timely.” Instead, it restrictively prohibits untimely petitions, stating
`
`that an inter partes review “may not be instituted” if the petition is “filed more
`
`than 1 year after” the petitioner has been served with a complaint alleging
`
`infringement. See 35 U.S.C. § 315(b) (emphasis added). Apple’s attempt to
`
`rewrite § 315(b)’s statutory bar into a permissive, standing-creating provision is
`
`contrary to the statute’s plain language and structure.
`
`8
`
`13
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`Petitioner Apple Inc. - Exhibit 1019, p. 13
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`Case No. IPR2013-00354
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`Apple also argues that Ҥ 315(b) does not specify a one-year deadline that
`
`runs from the date of the first complaint served on a petitioner.” (Petition at 2.)
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`But the statute need not do so because it specifies that the one-year deadline runs
`
`from service of “a complaint,”
`
`i.e., any complaint.
`
` Apple’s proposed
`
`constructioni.e., the one-year period is reset each time a patent owner serves a
`
`complaintwould require rewriting § 315(b) to replace “a complaint” with “the
`
`most recent complaint.” This is not what the statute says, and Apple cannot
`
`rewrite it to say so.
`
`Apple’s argument also conflicts with the Board’s precedent construing
`
`§ 315(b). In Universal Remote Control, IPR2013-00168 Paper No. 9, the Board
`
`considered whether the one-year bar under § 315(b) would be reset if a second
`
`infringement complaint was served by the patent owner on the petitioner. The first
`
`complaint was served in 2001 while the second complaint was served in 2012. Id.
`
`at 3. Although the second complaint was served less than 12 months before the
`
`petitioner filed its petition for inter partes review, the first complaint was not. Id.
`
`The Board rejected the petition as time-barred under § 315(b). Id. at 4. In
`
`particular, the Board disagreed that “the one-year grace period applies only to the
`
`last of a chain of multiple lawsuits or that the filing of a later lawsuit renders the
`
`service of a complaint in an earlier lawsuit to be a nullity as Petitioner argues.” Id.
`
`Here, Apple’s request that the Board consider only the 2012 Complaint, and ignore
`
`9
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`14
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`Petitioner Apple Inc. - Exhibit 1019, p. 14
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`

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`Case No. IPR2013-00354
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`the August 2010 Complaint, is directly contrary to the Board’s decision in
`
`Universal Remote Control.
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`3. The Legislative History Confirms that the Petition Is Barred
`
`Apple also asserts that resetting the one-year period with each new
`
`complaint would be consistent with Congress’s design for the AIA. Because the
`
`plain language of the statute is clear, however, it is unnecessary to rely on
`
`legislative history or other extrinsic evidence to show congressional intent. Conn.
`
`Nat’l Bank v. Germain, 503 U.S. 249, 253-54 (1992) (“We have stated time and
`
`again that courts must presume that a legislature says in a statute what it means and
`
`means in a statute what it says there. When the words of a statute are
`
`unambiguous, then, this first canon is also the last: ‘judicial inquiry is complete.’”
`
`(citations omitted)).
`
`To the extent the Board considers the legislative history, it supports
`
`VirnetX’s interpretation, not Apple’s. When adopting the one-year bar in § 315(b)
`
`instead of a proposed six-month deadline, Congress made clear that “it is important
`
`that the section 315(b) deadline afford defendants a reasonable opportunity to
`
`identify and understand the patent claims that are relevant to the litigation. It is
`
`thus appropriate to extend the section 315(b) deadline to one year.” 157 Cong.
`
`Rec. S5429 (daily ed. Sept. 8, 2011) (statement of Sen. Kyl) (emphasis added).
`
`10
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`15
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`Petitioner Apple Inc. - Exhibit 1019, p. 15
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`Case No. IPR2013-00354
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`Thus, Congress intended the one-year period to allow defendants a
`
`reasonable opportunity to identify and understand the relevant patent claims. Here,
`
`Apple has already litigated claims of the ’151 patent to a verdict based on the
`
`August 2010 Complaint and its subsequent amendments, and the 2012 Complaint
`
`involves those same ’151 patent claims. In addition, Apple filed inter partes
`
`reexaminations on all claims of the ’151 patent in July 2011. Apple cannot claim
`
`that it needed until its 2013 petition filing date to identify and understand the
`
`relevant claims of the ’151 patent.
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`Apple’s arguments also contravene Congress’s intent. Congress sought to
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`avoid an open-ended process in which a petitioner could harass a patent owner
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`with serial challenges. Congress noted that “[t]he inter partes proceeding in H.R.
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`1249 has been carefully written to balance the need to encourage its use while at
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`the same time preventing the serial harassment of patent holders.” Ex. 2003 at 72,
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`Meeting of the H. Comm. on Judiciary, Transcript of Markup of H.R. 1249
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`(Apr. 14, 2011) (statement of Judiciary Committee Chairman Lamar Smith).
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`Congress was also mindful of the “enhanced estoppels” built into the new statute,
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`and determined that one year from the date of service of a complaint for
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`infringement was sufficient for a defendant to determine whether to seek an inter
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`partes review. See 157 Cong. Rec. S5429 (daily ed. Sept. 8, 2011) (statement of
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`Sen. Kyl).
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`11
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`16
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`Petitioner Apple Inc. - Exhibit 1019, p. 16
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`Case No. IPR2013-00354
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`Nothing in the legislative history of § 315(b) suggests that Congress
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`intended to reset the one-year clock every time a patent owner served a defendant
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`with a new complaint involving the same patent. To the contrary, Congress
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`wanted to provide a reasonable, but limited, time in which a defendant could elect
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`to initiate an inter partes review proceeding after being accused of infringement.
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`Apple’s more expansive view of § 315(b) conflicts with congressional intent.
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`4. Denying the Petition Is Not Unjust
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`Apple also argues that “reading § 315(b) to foreclose this petition based on
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`the August 2010 complaint would be particularly unjust in this case” because IPR
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`proceedings were unavailable prior to September 16, 2012. (Petition at 3.)
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`Apple’s cries of injustice lack merit because Apple has, and continues to avail
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`itself of, avenues to challenge the ’151 patent, including those in district court and
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`in pending inter partes reexamination.
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` Given its ongoing
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`inter partes
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`reexamination—the pre-AIA counterpart to inter partes review—Apple cannot
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`claim that dismissing its Petition would be unjust or leave it without recourse.
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`B.
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`The Petition Fails to Comply with 37 C.F.R. § 42.104(b)(4)
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`Apple’s Petition is also defective for reasons apart from the time bar. A
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`petition for inter partes review “must specify where each element of the claim is
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`found in the prior art patents or printed publications relied upon.” 37 C.F.R.
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`§ 42.104(b)(4). Apple’s Petition fails to satisfy this requirement. Far from
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`12
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`17
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`Petitioner Apple Inc. - Exhibit 1019, p. 17
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`Case No. IPR2013-00354
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`identifying where claim elements are found in the asserted prior art, the Petition
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`never cites the asserted references.3 Instead, the Petition discusses only its three
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`accompanying declarations. This voluminous body of declarant testimony serves
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`to obscure rather than “specify” the grounds of invalidity asserted in the Petition.
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`Moreover, for many claim features, the Petition broadly generalizes the asserted
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`prior art, and in doing so, fails to identify the specific aspects of the references
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`relied upon. The Board and Patent Owner are left to piece together, or simply
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`guess at, the specific grounds of invalidity.
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`The Petition contains no citations to the Aventail, RFC 1035, Reed, BinGO,
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`Beser, RFC 2401, Blum, and Hoke references themselves. Instead, the Petition
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`relies almost entirely on three accompanying expert declarations (Exs. 1003, 1005,
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`1006), totaling 371 pages. For each of claims 1-16, the Petition merely provides
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`commentary based on the declarations. Thus, the Petition does not “specify where
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`each element of the claim is found in the prior art . . . relied upon.” 37 C.F.R.
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`§ 42.104(b)(4).
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`The Petition’s deficient proposed rejections, aside from failing to cite any
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`particular aspect of the prior art in many instances, further improperly rely on
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`3 The references to “Ex. 1007 (‘Aventail’) at ¶ 277” on pages 11 and 15 of
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`the Petition appear to be citations to one of Apple’s declarations (Ex. 1003), not
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`citations to Aventail.
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`13
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`18
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`Petitioner Apple Inc. - Exhibit 1019, p. 18
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`Case No. IPR2013-00354
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`broad generalities about what each asserted reference allegedly teaches. For
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`example, the Petition asserts that Aventail discloses the “encrypted channel”
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`recited in independent claims 1, 7, and 13. But the Petition does not explain what
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`particular features in Aventail teach an “encrypted channel.” ( See Petition at 13,
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`14, 17, 18.) Instead, the Petition discusses Aventail in generalities that paraphrase
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`the claim language. (See, e.g., id. at 13, “[I]f an intercepted DNS request contained
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`a domain name that matched a redirection rule, the request would trigger a
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`sequence of steps that would establish a VPN between the client computer and the
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`secure destination.”; id. at 14, “Aventail explains that communications between the
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`client and the private network are automatically encrypted/decrypted.”) The
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`Petition does not identify what in Aventail constitutes the purported encrypted
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`channel.
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`The Petition provides similar generalities in its discussion of BinGO and
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`Beser. Here again, the Petition’s commentary regarding the “encrypted channel”
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`of independent claims 1, 7, and 13 lacks specificity. The Petition generally asserts
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`that “BinGO explains the BinGO! router could be configured to handle both
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`authentication of the requesting user and encryption of the network traffic.” (Id. at
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`29.) The Petition also asserts that “Beser also teaches that IP traffic sent over the
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`public network in an IP tunneling association ordinarily is encrypted.” (Id. at 41.)
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`14
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`19
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`Petitioner Apple Inc. - Exhibit 1019, p. 19
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`Case No. IPR2013-00354
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`Here again, the Petition fails to specify anything in BinGO and Beser deemed to
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`constitute the purported encrypted channel.
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`Accordingly, the Petition fails to comply with § 42.104(b)(4). The Petition
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`itself does not specify where each element of the claims is found in each prior art
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`reference: Aventail, RFC 1035, Reed, BinGO, Beser, RFC 2401, Blum, and Hoke.
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`Nor does the Petition’s general discussion of the references identify what aspects
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`of the prior art it relies on. Apple’s Petition instead invites the Board and the
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`Patent Owner to guess at the proposed basis for instituting an IPR proceeding.
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`Because the Petition contravenes § 42.104(b)(4), it does not demonstrate a
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`reasonable likelihood of showing that any of claims 1-16 is anticipated or rendered
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`obvious by Aventail, RFC 1035, Reed, BinGO, Beser, RFC 2401, Blum, and Hoke.
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`C. The Board Should Not Institute Based on the Petition’s
`Redundant Grounds
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`In addition to its pending inter partes reexamination of the ’151 patent,
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`Apple has filed the present Petition requesting inter partes review of the same
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`claims of the ’151 patent. The Board should reject this Petition because it raises
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`grounds of rejection that are internally redundant. The Board has held that it will
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`not consider redundant grounds of rejection like Apple’s because the Board must
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`issue a final written decision in inter partes review proceedi