Case 6:10-cv-00417-RWS Document 289 Filed 05/18/12 Page 1 of 123 PageID #: 9462
`
` 1 THE UNITED STATES DISTRICT COURT
` FOR THE EASTERN DISTRICT OF TEXAS
` 2 TYLER DIVISION
` 3
` 4 VIRNETX, INC. )
` ) DOCKET NO. 6:10cv417
` 5 )
` -vs- )
` 6 ) Tyler, Texas
` ) 9:00 a.m.
` 7 CISCO SYSTEMS, INC., ET AL ) January 5, 2012
` 8
` 9 TRANSCRIPT OF MARKMAN HEARING
` BEFORE THE HONORABLE LEONARD DAVIS,
` 10 UNITED STATES DISTRICT JUDGE
` 11 A P P E A R A N C E S
` 12
` (SEE SIGN-IN SHEETS DOCKETED IN THIS CASE.)
` 13
` 14
` 15
` 16
` 17
` 18
` 19
` 20
` 21
` COURT REPORTER: MS. SHEA SLOAN
` 22 211 West Ferguson
` Tyler, Texas 75702
` 23
` Proceedings taken by Machine Stenotype; transcript was
` 24 produced by a Computer.
` 25
`
`VIRNETX EXHIBIT 2003
`Apple v. VirnetX
`Trial IPR2015-00(cid:27)(cid:25)(cid:28)
`
`Page 1 of 10
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`
`
` 1 THE UNITED STATES DISTRICT COURT
` FOR THE EASTERN DISTRICT OF TEXAS
` 2 TYLER DIVISION
` 3
` 4 VIRNETX, INC. )
` ) DOCKET NO. 6:10cv417
` 5 )
` -vs- )
` 6 ) Tyler, Texas
` ) 9:00 a.m.
` 7 CISCO SYSTEMS, INC., ET AL ) January 5, 2012
` 8
` 9 TRANSCRIPT OF MARKMAN HEARING
` BEFORE THE HONORABLE LEONARD DAVIS,
` 10 UNITED STATES DISTRICT JUDGE
` 11 A P P E A R A N C E S
` 12
` (SEE SIGN-IN SHEETS DOCKETED IN THIS CASE.)
` 13
` 14
` 15
` 16
` 17
` 18
` 19
` 20
` 21
` COURT REPORTER: MS. SHEA SLOAN
` 22 211 West Ferguson
` Tyler, Texas 75702
` 23
` Proceedings taken by Machine Stenotype; transcript was
` 24 produced by a Computer.
` 25
`
`VIRNETX EXHIBIT 2003
`Apple v. VirnetX
`Trial IPR2015-00(cid:27)(cid:25)(cid:28)
`
`Page 1 of 10
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`Case 6:10-cv-00417-RWS Document 289 Filed 05/18/12 Page 42 of 123 PageID #: 9503
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` 42
` 1 the addressing scheme that is used to achieve a virtual
` 2 private network.
` 3 Because, Your Honor, there was no disclaimer of an
` 4 indirect communication here, because this was in the context
` 5 of an explanation to the Patent Office why Aventail is not a
` 6 virtual private network, there was no change of the claim
` 7 terms. There was no change in the specification. This is not
` 8 a portion of the prosecution history that amounts to any kind
` 9 of unequivocal disclaimer. But it certainly is not any kind
` 10 of suggestion that a break in the directness of a
` 11 electromechanical connection from one wire to computer to
` 12 computer to the actual reality of modern networks is utterly
` 13 unwarranted.
` 14 THE COURT: Okay. Thank you.
` 15 Response, Mr. Desmarais?
` 16 MR. DESMARAIS: Yes, Your Honor. Thank you. Let me
` 17 just start right out and say that is not what we are arguing.
` 18 We are not arguing it has to be one wire, and we are not
` 19 arguing it has to be an electromechanical connection. Not at
` 20 all. These products go over the network, and we are not
` 21 disputing that.
` 22 What we are arguing is exactly what they said to the
` 23 Patent Office, so let me show you that.
` 24 Slide 23, please.
` 25 After Your Honor's patent order, the Patent Office
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`Case 6:10-cv-00417-RWS Document 289 Filed 05/18/12 Page 43 of 123 PageID #: 9504
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` 1 rejected all the claims on the '135 and '180 patents. Those
` 2 patents were dead on arrival. They were rejected over this
` 3 Aventail reference, which I have shown a picture of here on
` 4 Slide 23.
` 5 VirnetX, if they wanted to get these patents out of
` 6 the Patent Office, had to distinguish their VPN from what you
` 7 see in that picture. That is what they did, and they did it
` 8 unequivocally.
` 9 If you look on Slide 24, this is what VirnetX said
` 10 to the Patent Office to get these patents issued. Third,
` 11 Aventail has not been shown to disclose a VPN because
` 12 computers connected according to Aventail do not communicate
` 13 directly with each other.
` 14 And if you look at the picture down below, Your
` 15 Honor, before we go on, it is not the Internet cloud in
` 16 between the target and the client that we are talking about.
` 17 It is that server that I made yellow. Okay. So we are not
` 18 saying that these products don't go over the Internet. Of
` 19 course, they do.
` 20 Let's look at what VirnetX said they meant by
` 21 directly. They said -- and we can jump down to the yellowed,
` 22 red-underlined part. "All communications between the client
` 23 and target stop and start at the intermediate SOCKS server."
` 24 That is the one I colored yellow in the photo -- in the
` 25 picture.
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`Case 6:10-cv-00417-RWS Document 289 Filed 05/18/12 Page 44 of 123 PageID #: 9505
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` 44
` 1 The client cannot open a connection with the target
` 2 itself. Therefore, one skilled in the art would not have
` 3 considered the client and target to be virtually on the same
` 4 private network. Instead, the client computer and target
` 5 computer are deliberately separated by an intermediate SOCKS
` 6 server. There is a huge difference between what happens in
` 7 the Internet and a terminating server.
` 8 In the Internet -- the Internet is connected -- and
` 9 I am going to show you some photos of that -- some diagrams of
` 10 that -- by a bunch of routers that just take in a packet and
` 11 send a packet out. A server actually receives a communication
` 12 and processes it. It is two very different functions.
` 13 THE COURT: But are you saying that the firewall or
` 14 routers or switches would be included?
` 15 MR. DESMARAIS: I can show you exactly if we look at
` 16 Slide 28, please.
` 17 THE COURT: Would that prevent a direct
` 18 communication?
` 19 MR. DESMARAIS: Not the Internet, not routers, not
` 20 things that are -- if you look at Slide 28 we can sort of talk
` 21 about it more concretely.
` 22 If you look at Slide 28, what VirnetX told the
` 23 Patent Office is, in fact, entirely consistent with what they
` 24 show in their patent. So the top two figures here on Slide
` 25 28, Your Honor, are from the patent; and the bottom figure is
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`Case 6:10-cv-00417-RWS Document 289 Filed 05/18/12 Page 45 of 123 PageID #: 9506
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` 1 from Aventail, the prior art. So you see in that figure on
` 2 the top left where I colored it in yellow, those are all
` 3 Internet routers.
` 4 And you see the VirnetX box 100 at the top left is
` 5 the client set and the box 110 at the bottom right is the
` 6 target set. So you see the client and the target are the only
` 7 two computer-type apparatuses in between the Internet. So the
` 8 client calls up the target. They certainly use the Internet
` 9 and they get routed across the Internet. But coming out of
` 10 the Internet on the other side is the target. There is not an
` 11 intermediate server that the client had targeted. Instead,
` 12 they target the target computer. That is the difference --
` 13 THE COURT: Are you talking about an intermediate
` 14 server that does something?
` 15 MR. DESMARAIS: Exactly. Yes. So, for instance,
` 16 let me give you an example. I am a client, and I want to call
` 17 Mr. Williams. If I send a message to Your Honor and I say --
` 18 I call you up, I transfer the message to you, and then you get
` 19 the message, you open it, you process it, and you decide I'm
` 20 going to send it to Mr. Williams, then I have opened up a
` 21 communication with you. It goes to Mr. Williams, but I opened
` 22 up the communication to you.
` 23 If I am sending a communication to Mr. Williams, it
` 24 is addressed to Mr. Williams and I send it and all you do is
` 25 grab it and give it to him and don't do anything to it, then
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`Case 6:10-cv-00417-RWS Document 289 Filed 05/18/12 Page 89 of 123 PageID #: 9550
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` 89
` 1 the user's web browser transmits a request to a DNS, which
` 2 converts the name into a four-part IP address that is returned
` 3 to the user's browser and then used by the browser to contact
` 4 the destination web site.
` 5 That is what happens even if there is some other use
` 6 put to that IP address for some purpose prior to returning.
` 7 But if it is not returned to the requester, the requester
` 8 cannot do what it is trying to do in the first place and that
` 9 is contact the target.
` 10 That is all I have, Your Honor.
` 11 THE COURT: Okay. Thank you.
` 12 Mr. McLeroy?
` 13 MR. McLEROY: Very brief response. Could you put
` 14 the slide up that Mr. Williams just had on the board?
` 15 Your Honor, I just want to point out that this
` 16 portion of the specification that Mr. Williams referred to is
` 17 referring to conventional domain name servers. And we
` 18 acknowledge that many conventional DNS servers will return an
` 19 IP address to the requester. But in this case, in this patent
` 20 VirnetX has described a specialized DNS server with a
` 21 different operation where the IP address is provided instead
` 22 to the gatekeeper computer, and the Court's construction must
` 23 account for VirnetX's invention. We should not exclude any
` 24 preferred embodiments.
` 25 THE COURT: Okay. Thank you.
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`Case 6:10-cv-00417-RWS Document 289 Filed 05/18/12 Page 90 of 123 PageID #: 9551
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` 90
` 1 What is next?
` 2 MR. DESMARAIS: Thank you, Your Honor, it is John
` 3 Desmarais for Cisco. We will handle the "secure domain name
` 4 service." Counsel's comments just then is actually a good
` 5 entree because he just said that the patent doesn't deal with
` 6 a conventional or standard DNS service, and that is one of the
` 7 grappling issues here because we want to actually put that in
` 8 the construction.
` 9 So if we look at Slide 84.
` 10 This is one of those situations that after your
` 11 prior Markman, in the reexam VirnetX told the Patent Office
` 12 that the prior construction was, in fact, a faulty position
` 13 because the "secure domain name service" is not a conventional
` 14 DNS server. Your can see your construction versus what they
` 15 told the PTO right there on Slide 84.
` 16 So both sides here agree that the construction
` 17 should be redone, and you see that on Slide 85 right from
` 18 VirnetX's opening brief. Both of us are proposing a brand new
` 19 construction.
` 20 When you look at what the issue is on the next
` 21 slide, here are the two competing constructions, Your Honor,
` 22 presented on Slide 86. What I put in red-underline the
` 23 parties have both added, so we agree on that. And that was
` 24 added by both of us.
` 25 What is in yellow under defendants' proposed
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`Case 6:10-cv-00417-RWS Document 289 Filed 05/18/12 Page 91 of 123 PageID #: 9552
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` 91
` 1 construction are the two things we are still disputing. And
` 2 that first point is it needs to be a nonstandard look-up, as
` 3 Counsel for VirnetX just said, because the conventional is not
` 4 what this patent is about. I will show you why.
` 5 And then in the second part, "and performs its
` 6 services accordingly," are the exact words that VirnetX told
` 7 the Patent Office at the same time they told them that part
` 8 which is in red. So VirnetX changed their construction to add
` 9 what is in red-underlining, as we did, based on a sentence
` 10 they said to the Patent Office. But they left out the second
` 11 half of the sentence, which is what we show in yellow, and I
` 12 can show you that.
` 13 The first issue, the nonstandard, if you look on
` 14 Slide 88, time and time again through the reexam this was
` 15 highlighted to the Patent Examiner. This is excerpts from
` 16 VirnetX's response to the Patent Office. The specification of
` 17 the '180 patent clearly teaches that the claim "secure domain
` 18 name service" is unlike the conventional domain name service.
` 19 They go on. It is in contrast to a conventional. It is a
` 20 nonstandard domain name. It is not available with the
` 21 traditional systems. There are drawbacks to the conventional
` 22 system.
` 23 Every time they spoke about it, including just a few
` 24 moments ago, they said it is nonstandard. All we are doing is
` 25 trying to put that into the construction to differentiate it
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`Case 6:10-cv-00417-RWS Document 289 Filed 05/18/12 Page 92 of 123 PageID #: 9553
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` 92
` 1 from standard.
` 2 And if you look at the parties' construction of
` 3 "secure domain name," they have already agreed to that for
` 4 "secure domain name." Their proposed construction has
` 5 nonstandard domain name. Ours does too. This term is "secure
` 6 domain name service." It should be likewise.
` 7 The second part of what we wanted to add is the rest
` 8 of the statement that they left off. And this is on Slide 91.
` 9 To support the language that both parties have added, we both
` 10 cited to this excerpt here, which is Paragraph 12. That is
` 11 from what VirnetX told the Patent Office.
` 12 And you can see they said: A secure domain name
` 13 service of the '180 patent instead recognizes that a query
` 14 message is requesting a secure network address.
` 15 That first part they put into their construction,
` 16 and so did we. Then they left off the second part, "and
` 17 performs its services accordingly." We would submit that if
` 18 you are going to put in the first part, you need the second
` 19 part.
` 20 The omission that they took out puts ambiguity into
` 21 the construction, and they have got no basis for putting half
` 22 of the argument in and half out. They told the Patent Office
` 23 that this is what their domain name service was. That is what
` 24 they should be held to. The patent issued as a result of
` 25 this, and they need to take account of what they said to the
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`Case 6:10-cv-00417-RWS Document 289 Filed 05/18/12 Page 93 of 123 PageID #: 9554
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` 93
` 1 Patent Office to get the patent issued. They should not be
` 2 taking a different position here in Federal Court.
` 3 THE COURT: Okay.
` 4 Mr. McLeroy?
` 5 MR. McLEROY: Your Honor, first of all, I would like
` 6 to correct one thing Mr. Desmarais said. During reexamination
` 7 VirnetX never argued that this Court got a claim construction
` 8 incorrect. Instead, Your Honor, we simply explained to the
` 9 Examiner that his application of the construction was wrong,
` 10 and we clarified that.
` 11 On Slide 44 here, we see the parties' competing
` 12 constructions. And we submit, Your Honor, that the
` 13 defendants' additions of "nonstandard" and "performs its
` 14 services accordingly" are just unnecessary because we
` 15 explicitly state what makes the look-up service nonstandard,
` 16 and we explicitly state what services are performed by the
` 17 secure DNS.
` 18 So let's look at "nonstandard" a little bit closer.
` 19 We included, Your Honor, in the construction the two
` 20 characteristics of a "secure domain name service" that make it
` 21 nonstandard. First, we say that the "secure domain name
` 22 service" recognizes that a query message is requesting a
` 23 secure computer address. And, second, it returns a secure
` 24 computer network address for a requested secure domain name.
` 25 Rather than using the ambiguity of what is standard
`
`Page 10 of 10
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