Paper No.
`Filed: December 3, 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
`
`
`
`
`Filed on behalf of: VirnetX Inc.
`By:
`
`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
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`__________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`__________________
`
`APPLE INC.
`Petitioner
`
`v.
`
`VIRNETX INC.
`Patent Owner
`
`__________________
`
`Case No. IPR2015-00187
`U.S. Patent No. 7,490,151
`
`__________________
`
`
`
`PATENT OWNER’S OPPOSITION TO
`APPLE’S MOTION FOR JOINDER
`
`
`Filed: December 3, 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
`
`
`
`
`Filed on behalf of: VirnetX Inc.
`By:
`
`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
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`__________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`__________________
`
`APPLE INC.
`Petitioner
`
`v.
`
`VIRNETX INC.
`Patent Owner
`
`__________________
`
`Case No. IPR2015-00187
`U.S. Patent No. 7,490,151
`
`__________________
`
`
`
`PATENT OWNER’S OPPOSITION TO
`APPLE’S MOTION FOR JOINDER
`
`
`
`Case No. IPR2015-00187
`
`TABLE OF CONTENTS
`
`
`INTRODUCTION .......................................................................................... 1
`
`PRECISE RELIEF REQUESTED ................................................................. 1
`
`STATEMENT OF FACTS ............................................................................. 1
`
`
`I.
`
`II.
`
`III.
`
`IV. ARGUMENT .................................................................................................. 3
`
`A. Granting Apple’s Motion for Joinder Is Statutorily Barred ................. 3
`
`B.
`
`Apple Will Not Be Prejudiced if the Board Denies Joinder ................ 6
`
`V.
`
`CONCLUSION ............................................................................................... 7
`
`
`
`
`
`i
`
`
`
`
`
`Case No. IPR2015-00187
`
` Page(s)
`
`TABLE OF AUTHORITIES
`
`FEDERAL CASES
`
`Apple Inc. v. VirnetX Inc.,
`IPR2013-00354, Paper No. 5 (June 17, 2013) ...................................................... 3
`
`Apple Inc. v. VirnetX Inc.,
`IPR2013-00354, Paper No. 20 (Dec. 13, 2013) .................................................... 3
`
`Dell Inc. v. Network-1 Security Solutions, Inc.,
`IPR2013-00385, Paper No. 17 (July 29, 2013) .................................................... 6
`
`Microsoft Corp. v. Surfcast Inc.,
`IPR2014-00271, Paper No. 20 (June 13, 2014) .................................................... 4
`
`RPX Corp. v. VirnetX Inc.,
`IPR2014-00173, Paper No. 56 (July 14, 2014) .................................................... 3
`
`VirnetX, Inc. v. Cisco Sys., Inc.,
`767 F. 3d 1308 (Fed. Cir. 2014) ........................................................................... 2
`
`FEDERAL STATUTES
`
`35 U.S.C. § 311 .......................................................................................................... 6
`
`35 U.S.C. § 315(b) ............................................................................................passim
`
`35 U.S.C. § 315(c) ............................................................................................passim
`
`
`
`
`
`ii
`
`
`
`
`
`Case No. IPR2015-00187
`
`I.
`
`INTRODUCTION
`For the third time, Apple has been responsible for filing a petition for inter
`
`partes review of U.S. Patent No. 7,490,151 (“the ’151 patent”). Its first petition, in
`
`IPR2013-00354, was denied as untimely under 35 U.S.C. § 315(b). Apple had
`
`RPX Corporation file its next petition in IPR2014-0173, but it was also dismissed
`
`as untimely. Apple then filed yet another petition, IPR2015-00187 (“the ’187
`
`proceeding”). This time Apple accompanied its petition with a motion for joinder
`
`with IPR2014-00610 (“the ’610 proceeding”), filed by Microsoft. Apple’s
`
`repeated filings and its request for joinder are an attempt to evade the time bar of
`
`§ 315(b) and should be rejected. Not only does the plain language of § 315(b)
`
`require this result, § 315(c) and Congress’s express intent to avoid serial
`
`harassment of patent owners confirms it. Thus, Patent Owner VirnetX respectfully
`
`requests that the Board deny Apple’s motion requesting joinder of the ’187
`
`proceeding with the ’610 proceeding.
`
`II.
`
`PRECISE RELIEF REQUESTED
`
`VirnetX requests that the Board deny Apple’s motion for joinder (“Mot.”).
`
`III. STATEMENT OF FACTS
`On August 11, 2010, VirnetX served Apple with a complaint alleging
`
`infringement of the ’151 patent and other VirnetX patents. (Ex. 2001, VirnetX
`
`Inc.’s Original Complaint in VirnetX Inc. v. Cisco Sys., Inc. et al., Case No. 6:10-
`
`cv-00417 (E.D. Tex. Aug. 11, 2010) (“the ’417 litigation”).) In response, Apple
`
`1
`
`
`
`Case No. IPR2015-00187
`
`alleged, among other things, noninfringement, invalidity, and unenforceability of
`
`the ’151 patent. (Ex. 2002, Apple’s Answer in the ’417 Litigation at ¶¶ 37, 43-45,
`
`122-123, counterclaim ¶¶ 6-10, 12, 15, 31-37 (E.D. Tex. April 16, 2012).) Prior to
`
`trial, Apple also requested inter partes reexamination of the ’151 patent. The
`
`proceeding was assigned Control No. 95/001,697 (“the ’1,697 reexamination”) and
`
`is ongoing.
`
`Following a five day trial, the district court upheld the validity of the ’151
`
`patent. (Ex. 2003, Jury Verdict Form in the ’417 litigation (E.D. Tex. Nov. 6,
`
`2012); Ex. 2004, Final Judgment in the ’417 litigation (E.D. Tex. Feb. 28, 2013).)
`
`Apple appealed to the U.S. Court of Appeals for the Federal Circuit, which
`
`affirmed that “none of the asserted claims are invalid[.]” VirnetX, Inc. v. Cisco
`
`Sys., Inc., 767 F. 3d 1308, 1313-14 (Fed. Cir. 2014).
`
`After trial, in November 2012, VirnetX served Apple with a related
`
`complaint involving the ’151 patent and three other VirnetX patents. (Ex. 2005,
`
`VirnetX Inc.’s Original Complaint in VirnetX Inc. v. Apple Inc., Case No. 6:12-cv-
`
`00855 (E.D. Tex. Nov. 6, 2012) (“the ’855 litigation”).) In response, Apple again
`
`alleged, among other things, noninfringement and invalidity of the ’151 patent.
`
`(Ex. 2006, Apple’s Answer in the ’855 Litigation at ¶¶ 16-18, 37-38, counterclaim
`
`¶¶ 7, 9 (E.D. Tex. Jan. 23, 2013).)
`
`2
`
`
`
`Case No. IPR2015-00187
`
`Almost three years after the ’151 patent was first asserted against Apple,
`
`Apple submitted a petition for inter partes review of the ’151 patent. See Apple
`
`Inc. v. VirnetX Inc., IPR2013-00354, Paper No. 5 (June 17, 2013). The Board
`
`denied this petition because it was “not filed within the time limit imposed by 35
`
`U.S.C. § 315(b).” See id., Paper No. 20 at 5 (Dec. 13, 2013).
`
`RPX Corporation then filed a petition for inter partes review of the ’151
`
`patent, but the Board found that Apple was an unidentified real party-in-interest
`
`and denied institution under § 315(b)’s time bar. See RPX Corp. v. VirnetX Inc.,
`
`IPR2014-00173, Paper No. 56 (July 14, 2014) (redacted Decision Denying
`
`Institution).
`
`IV. ARGUMENT
`The Board should not grant Apple’s motion because § 315(b) statutorily
`
`prohibits joinder and because denial will not prejudice Apple.
`
`A. Granting Apple’s Motion for Joinder Is Statutorily Barred
`Institution of Apple’s petition is barred by 35 U.S.C. § 315(b) because Apple
`
`was served with a complaint more than one year before it filed its petition. See,
`
`e.g., Apple v. VirnetX, IPR2013-00354, Paper No. 20 at 5 (Dec. 13, 2013). Joinder
`
`is only permitted if the Board first determines that Apple’s petition warrants
`
`institution. 35 U.S.C. § 315(c) (“the Director . . . may join . . . any person who
`
`properly files a petition under section 311 that the Director . . . determines warrants
`
`3
`
`
`
`Case No. IPR2015-00187
`
`the institution of an inter partes review under section 314”). Because Apple’s
`
`untimeliness precludes institution under § 315(b), it also precludes joinder under
`
`§ 315(c). The Board, however, has interpreted the last sentence of § 315(b) to
`
`mean that “the one-year time bar does not apply” if a party filing a time-barred
`
`petition requests joinder. See Microsoft Corp. v. Surfcast Inc., IPR2014-00271,
`
`Paper No. 20 at 7 (June 13, 2014). VirnetX respectfully disagrees.
`
`The last sentence of 35 U.S.C. § 315(b) states that “[t]he time limitation set
`
`forth in the preceding sentence shall not apply to a request for joinder under
`
`subsection (c).” The AIA, and indeed § 315 itself, distinguishes between petitions
`
`for inter partes review and requests for joinder. The last sentence of § 315(b)
`
`provides an exception to the one-year bar only for a request for joinder, not for a
`
`petition for inter partes review. Thus, the one-year bar continues to apply to all
`
`petitions, even in the joinder context. The request-for-joinder exception of
`
`§ 315(b) applies only when two timely petitions are filed, but the request for
`
`joinder is made more than a year after being served with a complaint.
`
`This reading makes sense because joinder is not available until after a
`
`petition has been instituted. 35 U.S.C. § 315(c). Since an institution decision can
`
`take up to six months, it is likely that many requests for joinder will occur more
`
`than one year after being served with a complaint. The statutory language
`
`addresses this concern. It does not, however, provide a backdoor for time-barred
`
`4
`
`
`
`Case No. IPR2015-00187
`
`petitions to be effectively instituted through joinder. Such a view would be
`
`contrary to Congress’s intent to “prevent[] the serial harassment of patent
`
`holders[,]” which particularly applies to parties like Apple who have already had
`
`ample opportunity to present validity challenges in district court, appellate court,
`
`and in reexamination. (Ex. 2007, House Judiciary Transcript for Mark-Up of H.R.
`
`1249, The America Invents Act at 72 (Apr. 14, 2011).)
`
`Apple’s petition in the ’187 proceeding represents its sixth attack on the
`
`’151 patent in the last four years and is indicative of the type of “serial harassment”
`
`Congress intended to avoid. Granting the relief that Apple requests here gives
`
`Apple the opportunity to participate in an inter partes review more than four years
`
`after first receiving a complaint and after having had opportunities to challenge the
`
`patent before a jury, the Federal Circuit, and the Office, contrary to what Congress
`
`intended.
`
`Permitting untimely petitions to be instituted through joinder is also contrary
`
`to the joinder statute. Under 35 U.S.C. § 315(c), a party may be joined if it has
`
`“properly file[d] a petition under section 311.” (Emphasis added.) Senator Kyl
`
`addressed the meaning of the phrase “properly file[d],” stating that “time deadlines
`
`for filing petitions must be complied with in all cases.” (Ex. 2008, 154 Cong. Rec.
`
`S9982, S9988 (daily ed. Sep. 27, 2008) (statement of Sen. Kyl).) Section 315(c) is
`
`consistent with this view, because it requires compliance with § 311, which in turn
`
`5
`
`
`
`Case No. IPR2015-00187
`
`requires compliance with the other provisions of Title 35, Chapter 31 of the
`
`U.S. Code, including the timeliness provisions. 35 U.S.C. § 311 (“Subject to the
`
`provisions of this chapter, a person who is not the owner of a patent may file with
`
`the Office a petition to institute an inter partes review of the patent.”).
`
`The Board has recognized that § 311 limits joinder under § 315(c), but
`
`disregards the portion of § 311 that also requires compliance with other provisions
`
`of Chapter 31. See, e.g., Dell Inc. v. Network-1 Security Solutions, Inc.,
`
`IPR2013-00385, Paper No. 17 at 5-6 (July 29, 2013). This interpretation is
`
`incorrect, as it disregards the plain statutory language. The Board’s interpretation
`
`would also mean that other provisions of Chapter 31 do not apply to petitions when
`
`joinder is requested, such as the petition requirements of § 312(a). This is not what
`
`the statutory language permits, and is certainly not what Congress intended, yet it
`
`is what the Board’s statutory interpretation would permit.
`
`Under the plain language of §§ 315(b) and (c), joinder of Apple’s untimely
`
`petition is prohibited.
`
`B. Apple Will Not Be Prejudiced if the Board Denies Joinder
`Contrary to Apple’s arguments, its petition is not simply an “effective
`
`resolution of the validity of all the ’151 claims that VirnetX has asserted.” (See
`
`Mot. at 4.) Rather, it is in addition to (and adding additional expense to) an issue
`
`already resolved in litigation (Exs. 2003, 2004) and already being considered
`
`6
`
`
`
`Case No. IPR2015-00187
`
`before the Office. To the extent Apple desires a less-expensive and different
`
`mechanism from district court litigation to challenge the validity of the ’151 patent,
`
`it is currently enjoying that opportunity with the ongoing ’1,697 reexamination
`
`proceeding.
`
`Apple has had and continues to have ample opportunity to present validity
`
`challenges relating to the ’151 patent. It does not need and is not entitled to yet
`
`another serial attempt to challenge the ’151 patent. Even if joinder is denied, the
`
`’610 proceeding will continue against the ’151 patent. Therefore, denying Apple
`
`another attempt at challenging the validity of the ’151 patent will not prejudice it.
`
`V. CONCLUSION
`For these reasons, the Board should deny Apple’s motion for joinder.
`
`Dated: December 3, 2014
`
`
`
`Respectfully submitted,
`
`By: /Joseph E. Palys/
`Joseph E. Palys
`Registration No. 46,508
`
`Counsel for VirnetX Inc.
`
`
`
`7
`
`
`
`Case No. IPR2015-00187
`
`CERTIFICATE OF SERVICE
`
`I certify that I caused to be served on the counsel identified below a true and
`
`correct copy of the foregoing Patent Owner’s Opposition to Apple’s Motion for
`
`Joinder and supporting materials by electronic means on December 3, 2014:
`
`Counsel for Apple Inc.:
`
`Jeffrey P. Kushan (jkushan@sidley.com)
`Joseph A. Micallef (jmicallef@sidley.com)
`Sidley Austin LLP
`1501 K Street, N.W.
`Washington, DC 20005
`
`Respectfully submitted,
`
`
`
` /Joseph E. Palys/
`Joseph E. Palys
`Counsel for VirnetX Inc.
`
`
`
`Dated: December 3, 2014
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