throbber
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
`
`
`
`Paper No. ____
`Filed: May 23, 2016
`
`Naveen Modi
`Paul Hastings LLP
`875 15th Street NW
`Washington, DC 20005
`Telephone: (202) 551-1990
`Facsimile: (202) 551-0490
`E-mail: naveenmodi@paulhastings.com
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`
`
`
`
`
`
`
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`
`
`
`
`
`
`
`
`
`
`
`
`APPLE INC.,
`Petitioner
`
`v.
`
`VIRNETX INC.
`Patent Owner
`
`
`
`
`
`
`
`Case IPR2015-00871
`Patent No. 8,560,705
`
`
`
`
`
`
`
`
`
`
`PATENT OWNER’S MOTION TO EXCLUDE
`
`

`
`Case IPR2015-00871
`Patent No. 8,560,705
`
`
`Table of Contents
`
`Precise Relief Requested ................................................................................. 1
`
`Legal Standard ................................................................................................. 1
`
`
`I.
`
`II.
`
`III. Exhibits 1001-1004, 1006, 1007, 1017, 1019, 1022-1041, 1044-1049,
`1051-1054, 1057-1060, 1063-1065, 1067, 1069, 1071, and Portions of
`Exhibit 1005 Should be Excluded from the Record ........................................ 1
`
`A.
`
`B.
`
`C.
`
`Exhibits 1022, 1023, 1043, and 1057-1059 Constitute
`Inadmissible Hearsay ............................................................................ 2
`
`Exhibits 1060 and 1063-1065 Constitute Inadmissible Hearsay .......... 6
`
`Exhibits 1001-1004, 1006, 1007, 1017, 1019, 1024-1041, 1044-
`1049, 1051-1054, 1067, 1069, and 1071 Lack Relevance .................... 9
`
`D.
`
`Portions of Exhibit 1005 Lack Relevance ...........................................10
`
`IV. Conclusion .....................................................................................................11
`
`
`
`
`
`i
`
`

`
`TABLE OF AUTHORITIES
`
`Case IPR2015-00871
`Patent No. 8,560,705
`
`
`Page(s)
`
`Cases
`Conoco Inc. v. Dep’t of Energy,
`
`
`
`99 F.3d 387 (Fed. Cir. 1996) ........................................................................ 4, 6, 9
`
`Actifio, Inc., v. Delphix Corp.,
`
`
`
`IPR2015-00108, Paper No. 56 (Apr. 29, 2016) .................................................... 9
`
`Federal Regulations
`
`Federal Rule of Evidence 401 .............................................................................. 9-10
`
`Federal Rule of Evidence 402 .......................................................................... 1, 9-10
`
`Federal Rule of Evidence 403 .............................................................................. 9-10
`
`Federal Rule of Evidence 801 ............................................................................ 1, 2, 6
`
`Federal Rule of Evidence 802 ............................................................................ 1, 2, 6
`
`Federal Rule of Evidence 807 .................................................................... 3, 4, 7, 8, 9
`
`37 C.F.R. 42.62(a) ...................................................................................................... 1
`
`37 C.F.R. § 42.51(b)(1)(ii) ......................................................................................... 6
`
`Other
`
`Office Patent Trial Practice Guide,
` 77 Fed. Reg. 48758 .............................................................................................. 1
`
`
`
`
`
`ii
`
`

`
`I.
`
`Precise Relief Requested
`
`Case IPR2015-00871
`Patent No. 8,560,705
`
`
`Pursuant to 37 C.F.R. § 42.64, Patent Owner VirnetX Inc. (“Patent Owner”)
`
`moves to exclude certain Exhibits submitted by Apple Inc. (“Petitioner”). This
`
`motion is timely filed in accordance with the Board’s Scheduling Order (Paper No.
`
`9). In particular, Patent Owner requests that Exhibits 1001-1004, 1006, 1007,
`
`1017, 1019, 1022-1041, 1044-1049, 1051-1054, 1057-1060, 1063-1065,1067,
`
`1069, 1071 and portions of Exhibit 1005 be excluded from the record.
`
`II. Legal Standard
`The Federal Rules of Evidence apply to inter partes review proceedings. 37
`
`C.F.R. § 42.62(a), Office Patent Trial Practice Guide, 77 Fed. Reg. 48758. Under
`
`Federal Rule of Evidence 402, “irrelevant evidence is not admissible.” Fed. R.
`
`Evid. 402. Also, unless an exception applies, an out of court statement offered for
`
`the truth of the matter asserted is inadmissible. Fed. R. Evid. 801, 802.
`
`III. Exhibits 1001-1004, 1006, 1007, 1017, 1019, 1022-1041, 1044-1049, 1051-
`1054, 1057-1060, 1063-1065, 1067, 1069, 1071, and Portions of Exhibit
`1005 Should be Excluded from the Record
`
`The Board should exclude Exhibits 1001-1004, 1006, 1007, 1017, 1019,
`
`1022-1041, 1044-1049, 1051-1054, 1057-1060, 1063-1065, 1067, 1069, 1071
`
`because one or more of these exhibits includes evidence that is inadmissible
`
`hearsay, evidence that is irrelevant to the instant proceeding, or evidence that lacks
`
`authentication. The Board should also exclude portions of Exhibit 1005 because
`
`1
`
`

`
`Case IPR2015-00871
`Patent No. 8,560,705
`
`they are irrelevant to the instant proceeding. Patent Owner timely objected to these
`
`exhibits stating the precise grounds under which these exhibits are inadmissible.
`
`(Paper Nos. 12, 15, 28.)
`
`A. Exhibits 1022, 1023, 1043, and 1057-1059 Constitute Inadmissible
`Hearsay
`
`Exhibits 1022, 1023, 1043, 1057-1059 should be excluded as inadmissible
`
`hearsay. See Fed. R. Evid. 801-802. Patent Owner previously objected to these
`
`exhibits on this ground. (Paper No. 12 at 1; Paper No. 15 at 1.) Petitioner has
`
`failed to rebut Patent Owner’s objections. As such, these exhibits should be
`
`excluded.
`
`Specifically, absent an applicable exception, the rule against hearsay
`
`operates to prohibit out-of-court statements from being offered to prove the truth of
`
`the matter asserted. Fed. R. Evid. 801-802. Here, Petitioner submitted out-of-
`
`court declarations, i.e., declarations that were not made for purposes of the present
`
`proceeding, in an attempt to establish that Aventail (Ex. 1009), RFC 2401 (Ex.
`
`1008), and RFC 2543 (Ex. 1013) qualify as printed publications. For instance,
`
`Petitioner contends that “Aventail is a printed publication that was distributed to
`
`the public without restriction no later than January 31, 1999.” (Pet. at 18.) In
`
`attempting to prove the truth of this statement, Petitioner relies on out of court
`
`statements by three individuals—Christopher Hopen (Ex. 1023), Michael Fratto
`
`2
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`

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`Case IPR2015-00871
`Patent No. 8,560,705
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`(Ex. 1043), and James Chester (Ex. 1022). (Pet. at 18.) After institution,
`
`Petitioner submitted additional out-of-court statements, i.e., statements not
`
`proffered in the present proceeding, relating to the Hopen’s statements (Ex. 1023).
`
`(See Paper No. 17 at 5-8, citing Exs. 1057 (deposition transcript of Chris Hopen),
`
`1058 (declaration of Mr. Hopen from Control No. 95/011,682), and 1059 (jury trial
`
`transcript including excerpts from Mr. Hopen’s deposition).) In its reply to the
`
`Patent Owner response, Petitioner further relied on the above exhibits to support its
`
`assertion regarding Aventail. (Reply, Paper No. 26 at 17-18, citing Ex. 1023 at 1-
`
`4, 7, 10, 94, 293, 295, 424; Ex. 1022 at 2-3; Ex. 1043 at 2-3; Ex. 1057 at 79:25-
`
`80:9, 83:10-84:16, 91:20-92:2, 100:2-104:7; Ex. 1059 at 20-32.) Because
`
`Petitioner relies on the alleged truth of the above out-of-court statements to attempt
`
`to prove that Aventail qualifies as a printed publication as of January 1999, these
`
`out-of-court statements constitute hearsay and are inadmissible unless an exception
`
`applies.
`
`Petitioner has yet to assert that these out-of-court statements are admissible
`
`under any hearsay exception. In a related proceeding, Petitioner has argued that
`
`these exhibits are admissible under the residual exception set forth in Rule 807. To
`
`fall under this exception, the statement must: 1) have equivalent circumstantial
`
`guarantees of trustworthiness; 2) be offered as evidence of a material fact; 3) be
`
`more probative on the point for which it is offered than any other evidence that the
`
`3
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`

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`Case IPR2015-00871
`Patent No. 8,560,705
`
`proponent can obtain through reasonable efforts; and 4) be in the interests of
`
`justice to admit. Fed. R. Evid. 807. The residual exception to the hearsay rule is to
`
`be reserved for “exceptional cases,” and is not “a broad license on trial judges to
`
`admit hearsay statements that do not fall within one of the other exceptions.”
`
`Conoco Inc. v. Dep’t of Energy, 99 F.3d 387, 392 (Fed. Cir. 1996), as amended on
`
`reh’g in part (Jan. 2, 1997) (internal quotations omitted). Here, Petitioner cannot
`
`show that all of the conditions for admissibility under FRE 807 are met.
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`The statements have no circumstantial guarantees of trustworthiness because
`
`they fail to corroborate one another, were prepared long after the events they
`
`purport to memorialize and are unsubstantiated.
`
`Mr. Hopen baldly “estimate[s]” that “thousands of” copies of Aventail were
`
`distributed in the first six months of 1999. (Ex. 1023 at ¶ 16.) The time lapse of
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`over ten years between Aventail’s alleged distribution and Mr. Hopen’s statement
`
`cuts against the trustworthiness of his statements. See, e.g., Conoco 99 F.3d at
`
`392-394 (district court erred in admitting summaries prepared long after events at
`
`issue, in part, because they did not possess “circumstantial guarantees of
`
`trustworthiness.”) His vague recollection about
`
`the
`
`timing of Aventail’s
`
`distribution at some point during the first six months of 1999 has no
`
`“circumstantial guarantees of trustworthiness.” He failed to provide a single piece
`
`of evidence (e.g., an e-mail showing the distribution of Aventail to a customer)
`
`4
`
`

`
`supporting his assertion. (Ex. 1057 at 189:1-191:6.)
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`Case IPR2015-00871
`Patent No. 8,560,705
`
`
`In addition, Mr. Hopen’s statements (Exs. 1023, 1057-1059) about
`
`“thousands of” copies of Aventail being distributed at some point during the first
`
`six months of 1999 is uncorroborated. The documents attached to Mr. Hopen’s
`
`declaration (Exhibits A, B, D, H, and J) say nothing about the dissemination
`
`activities in the time frame before the Patent’s priority date and some of them do
`
`not even refer to the correct version of Aventail at issue, i.e., Aventail Connect
`
`v3.01 and AEC v3.0. (Ex. 1023 at 10, 94, 293, 295, 424.)
`
`Mr. Chester’s declaration (Ex. 1022) describing AEC products allegedly
`
`deployed within IBM during July 1998 (Ex. 1022 at ¶ 19), contradicts Mr. Hopen’s
`
`assertion that Aventail was not distributed until the first six months of 1999. (Ex.
`
`1023 at ¶ 16.) Mr. Fratto states that he received a single copy of Aventail. (Ex.
`
`1043 at ¶ 14.) The receipt of a single copy of Aventail does not corroborate Mr.
`
`Hopen’s statements regarding “thousands of” copies being distributed. (Ex. 1043
`
`at ¶¶ 8-14.)
`
`Mr. Fratto has repeatedly demonstrated bias against Patent Owner’s patents.
`
`(Paper No. 25 at 51, citing Exs. 2023-2035.) Both he and his co-declarants, Mr.
`
`Hopen and Mr. Chester, were retained by Apple and thus are predisposed toward
`
`supporting Apple’s position about the alleged publication date of Aventail.
`
`However, since these statements were not prepared for purposes of this inter partes
`
`5
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`

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`Case IPR2015-00871
`Patent No. 8,560,705
`
`review, cross-examination of the declarants was not provided as routine discovery
`
`under 37 C.F.R. § 42.51(b)(1)(ii).
`
`Significantly, the FRE are not silent with respect to the admission of a
`
`declarant’s former statements. The rules permit the introduction of former
`
`testimony, but only if the declarant is unavailable. Fed. R. Evid 804(b)(1); cf.
`
`Conoco at 393 (concluding that the residual exception does not apply to evidence
`
`that nearly falls into a specific exception). Thus, the rules recognize that former
`
`statements carry credibility risks that must be guarded against. It follows that
`
`when an otherwise available declarant’s former statements are presented, the
`
`former statements are hearsay with no exception.
`
`For at least the above reasons, the Board should exclude Exhibits 1022,
`
`1023, 1043, and 1057-1059 because they constitute inadmissible hearsay.
`
`B. Exhibits 1060 and 1063-1065 Constitute Inadmissible Hearsay
`Exhibits 1060 and 1063-1065 should be excluded as inadmissible hearsay.
`
`See Fed. R. Evid. 801-802. Patent Owner previously objected to these exhibits on
`
`this ground. (Paper No. 15 at 2.) Petitioner has failed to rebut Patent Owner’s
`
`objections. As such, these exhibits should be excluded.
`
`In its Petition, Petitioner made the naked assertion that RFC 2401 “was
`
`published in November 1998” and that RFC 2543 “was published in March 1999.”
`
`(Paper No. 1 at 27, 29.) After trial was instituted, Petitioner submitted additional
`
`6
`
`

`
`Case IPR2015-00871
`Patent No. 8,560,705
`
`evidence (Exs. 1060-1065) as supplemental information in support of its
`
`contention that RFCs 2401 and 2543 were publically accessible by their alleged
`
`publication dates (November 1998 and March 1999, respectively). (Paper No. 14
`
`at 9-13.) Exhibit 1060 is a declaration from Sandy Ginoza, a representative of the
`
`IETF, submitted in litigation before the International Trade Commission (337-TA-
`
`858) and Exhibit 1063 is a “transcript of Ms. Ginoza’s February 8, 2013 deposition
`
`that was taken as part of the ITC action.” (Id. at 5-6.) Exhibit 1064 is allegedly
`
`“an article from InfoWorld magazine (dated August 16, 1999)” and Exhibit 1065 is
`
`allegedly “an article from NetworkWorld magazine (dated March 15, 1999).” (Id.
`
`at 6-7.) In its reply to the Patent Owner response, Petitioner further relied on the
`
`above exhibits to support its assertion regarding the publication date of RFCs 2401
`
`and 2543. (Reply, Paper No. 26 at 19-22.) Each of Exhibits 1060 and 1063-1065
`
`include out-of-court statements, i.e., statements that were not made for purposes of
`
`the present proceeding, and because Petitioner relies on the alleged truth of these
`
`out-of-court statements they constitute hearsay and are inadmissible. Furthermore,
`
`in none of the papers that it has submitted so far in this proceeding has Petitioner
`
`explained that these out-of-court statements are admissible under a hearsay
`
`exception. In a related proceeding, Petitioner has argued that these exhibits are
`
`admissible under the residual exception under rule 807, which does not apply for
`
`the reasons set forth below.
`
`7
`
`

`
`Case IPR2015-00871
`Patent No. 8,560,705
`
`For example, Ms. Ginoza’s statements in Exhibits 1060 and 1063, and the
`
`statements in Exhibits 1064 and 1065 have no circumstantial guarantees of
`
`trustworthiness. There is no evidence corroborating Ms. Ginoza’s statements. She
`
`has no personal knowledge to support the assertions that RFC 2401 became
`
`publicly available in November 1998 and RFC 2543 became publicly available in
`
`March 1999. She was not involved with the RFC editor’s publication process until
`
`June of 1999. (Ex. 1063 at 14 (page 50, lines 17-25).) Worse she not only failed
`
`to produce the RFC Editor records that formed the basis of her opinions, but she
`
`also could not even explain what existed in those records formed the basis of her
`
`statements with respect to RFC 2401. (Ex. 1060 at ¶ 107; Ex. 1063 at 11 (p. 40, ll.
`
`2-5).) Therefore, her blanket assertion that “RFC 2401 has been publicly available
`
`through the RFC editor’s web site or through other means since its publication in
`
`November 1998” (Ex. 1060 at ¶ 107) has no “circumstantial guarantee[] of
`
`trustworthiness.” Further, there is no evidence having “circumstantial guarantees
`
`of trustworthiness” for the statements in Exhibits 1064 and 1065 (Ex. 1064 at 9;
`
`Ex. 1065 at 3) relating to the availability of RFCs from the IETF website that
`
`Petitioner relies on for their truth. Reply, Paper No. 29 at 23-24.
`
`In addition to lacking indicia of trustworthiness required by Rule 807, Ms.
`
`Ginoza’s statements and Exhibits 1064 and 1065 are not more probative than other
`
`evidence reasonably available to Petitioner, as required by FRE 807. As just one
`
`8
`
`

`
`Case IPR2015-00871
`Patent No. 8,560,705
`
`example, Petitioner could have contacted the authors of RFCs 2401 and 2543 to
`
`obtain declarations regarding their personal knowledge of the publication of RFCs
`
`2401 and 2453. Petitioner’s failure to submit such in court testimony not only
`
`shows that the evidence currently of record is not “more probative on the point for
`
`which it is offered than any other evidence that the proponent can obtain through
`
`reasonable efforts” but also shows that admitting this evidence is not “in the
`
`interests of justice,” as required by FRE 807. Indeed, this is simply not one of
`
`those “exceptional” cases where admitting hearsay evidence under the residual
`
`exception is warranted. Conoco Inc., 99 F.3d at 392.
`
`For at least the above reasons, the Board should exclude Exhibits 1060 and
`
`1063-1065 because they constitute inadmissible hearsay and no exception applies.
`
`C. Exhibits 1001-1004, 1006, 1007, 1017, 1019, 1024-1041, 1044-1049,
`1051-1054, 1067, 1069, and 1071 Lack Relevance
`
`Exhibits 1001-1004, 1006, 1007, 1017, 1019, 1024-1041, 1044-1049, 1051-
`
`1054, 1067, 1069, and 1071 should be excluded because they lack relevance. Fed.
`
`R. Evid. 401-403; see also Actifio, Inc., v. Delphix Corp., IPR2015-00108, Paper
`
`No. 56 at 57 (Apr. 29, 2016) (excluding exhibits that were not relied upon). Patent
`
`Owner previously objected to these exhibits on this ground. (Paper No. 12 at 1, 2;
`
`Paper No. 15 at 1, 2; Paper No. 28 at 1.)
`
`Each of these exhibits is inadmissible because Petitioner has not established
`
`9
`
`

`
`Case IPR2015-00871
`Patent No. 8,560,705
`
`that they are relevant. Fed. R. Evid. 401-403. For instance, Petitioner does not
`
`even cite to these exhibits in either the Petition or the Petitioner Reply. (Paper No.
`
`1; Paper No. 26) Accordingly, each of these exhibits should be excluded from the
`
`record.
`
`D. Portions of Exhibit 1005 Lack Relevance
`Portions of Exhibit 1005 should be excluded because they lack relevance.
`
`Fed. R. Evid. 401-403. Patent Owner previously objected to these portions on this
`
`ground. (Paper No. 12 at 1.) Petitioner has failed to rebut Patent Owner’s
`
`objections. As such, these portions should be excluded.
`
`Specifically, when Petitioner filed Exhibit 1005, which is the declaration of
`
`its alleged expert, Dr. Roberto Tamassia, Petitioner made the strategic choice of
`
`filing a single declaration for not one but six proceedings (IPR2015-00866, 867,
`
`868, 869, 870, 871) that covered three patents (U.S. Patent Nos. 8,458,341,
`
`8,516,131, and 8,560,705). (See generally Ex. 1005.) Accordingly, vast portions
`
`of Exhibit 1005 are simply irrelevant to the instant proceeding. For instance, the
`
`current proceeding is based on Aventail as the primary reference, but Dr.
`
`Tamassia’s declaration includes several pages focusing on Beser, which is
`
`irrelevant to the current proceeding. (See, e.g., Ex. 1005 at ¶¶ 184, 185, 312-383,
`
`421-441, 452-455, 461.) Such irrelevant sections of Dr. Tamassia’s declaration
`
`should be excluded under FRE 401-403.
`
`10
`
`

`
`IV. Conclusion
`For the reasons set forth above, the Board should exclude Exhibits 1001-
`
`Case IPR2015-00871
`Patent No. 8,560,705
`
`
`1004, 1006, 1007, 1017, 1019, 1022-1041, 1044-1049, 1051-1054, 1057-1060,
`
`1063-1065, 1067, 1069, 1071 and portions of Exhibit 1005 from the record.
`
`
`
`Dated: May 23, 2016
`
`Respectfully submitted,
`
`By: /Joseph E. Palys/
`Joseph E. Palys
`Reg. No. 46,508
`
`Counsel for VirnetX Inc.
`
`
`
`11
`
`

`
`CERTIFICATE OF SERVICE
`
`Case IPR2015-00871
`Patent No. 8,560,705
`
`
`I hereby certify that on this 23rd day of May 2016, a copy of the foregoing
`
`Patent Owner’s Motion to Exclude was served electronically, pursuant to
`
`agreement, upon the following:
`
`iprnotices@sidley.com
`Sidley Austin LLP
`1501 K Street NW
`Washington, DC 20005
`
`
`
`
`
`
`
`Respectfully submitted,
`
`By: /Joseph E. Palys/
`Joseph E. Palys
`Reg. No. 46,508
`
`Counsel for VirnetX Inc.
`
`
`Counsel for Apple Inc.:
`
`
`Dated: May 23, 2016

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