throbber
Paper No.
`Filed: February 8, 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
`
`
`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
`
`
`
`
`
`
`
`
`
`
`
`THE MANGROVE PARTNERS MASTER FUND, LTD., and APPLE INC.,
`Petitioner
`
`v.
`
`VIRNETX INC.,
`Patent Owner
`
`
`
`
`
`
`
`
`Case IPR2015-010461
`Patent No. 6,502,135
`
`
`
`
`
`
`
`
`Patent Owner’s Request for Rehearing Under 37 C.F.R. § 42.71(d)(1) of
`Institution Decision in IPR2016-00062
`
`
`1 Apple Inc., who filed a petition in IPR2016-00062, has been joined as a Petitioner
`in the instant proceeding.
`
`
`
`
`
`

`
`
`
`I.
`
`II.
`
`
`
`Case No. IPR2015-01046
`
`Table of Contents
`
`INTRODUCTION AND PRECISE RELIEF REQUESTED ......................... 1
`
`BACKGROUND ............................................................................................. 2
`
`III. LEGAL STANDARD ..................................................................................... 5
`
`IV. STATEMENT OF REASONS FOR RELIEF REQUESTED ........................ 6
`
`A.
`
`B.
`
`The Decision Incorrectly Applied § 315(b) in Failing to
`Conclude Apple Is Time-Barred ........................................................... 6
`
`The Decision Incorrectly Applied § 325(d) and Ignored Apple’s
`Numerous Serial and Concurrent Attacks to Validity ........................10
`
`V.
`
`PATENT OWNER REQUESTS REHEARING BY AN EXPANDED
`PANEL THAT INCLUDES THE CHIEF JUDGE .......................................12
`
`VI. CONCLUSION ..............................................................................................14
`
`
`
`
`
`i
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`

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`
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`Case No. IPR2015-01046
`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`Cases
`Achates Reference Publishing, Inc. v. Apple Inc.,
`803 F.3d 652 (Fed. Cir. 2015) .............................................................................. 9
`
`Apple Inc. v. DSS Technology Management, Inc.,
`IPR2015-00369, Paper No. 14 (Aug. 12, 2015) ................................................... 6
`
`Butamax Adv. Biofuels LLC v. Gevo, Inc.,
`IPR2014-00581, Paper No. 8 (Oct. 14, 2014) ...................................................... 7
`
`Chevron U.S.A. Inc. v. Natural Res. Def. Council Inc.,
`467 U.S. 837 (1984) .............................................................................................. 8
`
`Conopco, Inc. v. Procter & Gamble Co.,
`IPR2014-00506, Paper No. 25 (Dec. 10, 2015) .................................................. 10
`
`Conopco, Inc. v. Procter & Gamble Co.,
`IPR2014-00628, Paper No. 21 (Oct. 20, 2014) .................................................. 11
`
`Google Inc. v. SimpleAir, Inc.,
`CBM2015-00019, Paper No. 15 (Aug. 19, 2015) .............................................. 12
`
`Oshkosh Truck Corp. v. United States,
`123 F.3d 1477 (Fed. Cir. 1997) ............................................................................ 9
`
`Prism Pharma, Co., Ltd. v. Choongwae Pharma Corp.,
`IPR2014-00315, Paper No. 14 (July 8, 2014) .................................................... 11
`
`Standard Innovation Corp. v. Lelo, Inc.,
`IPR2014-00907, Paper No. 10 (Dec. 1, 2014) .................................................... 10
`
`Target Corp. v. Destination Maternity Corp.,
`IPR2014-00508, Paper No. 28 (Feb. 12, 2015) .............................................. 8, 13
`
`Unified Patents, Inc. v. Personal Web Techs., LLC,
`IPR2014-00702, Paper No. 13 (July 24, 2014) .................................................. 11
`
`VirnetX, Inc. v. Cisco Sys., Inc,
`767 F.3d 1308 (Fed. Cir. 2014) ............................................................................ 5
`
`ii
`
`

`
`
`Zhongshan Ocean Motor Co. v. Nidex Motor Corp.,
`IPR2015-00762, Paper No. 16 (Oct. 5, 2015) ................................................ 8, 13
`
`Case No. IPR2015-01046
`
`Statutes
`35 U.S.C. § 315(b) ............................................................................................passim
`
`35 U.S.C. § 315(c) ............................................................................................. 6, 7, 8
`
`35 U.S.C. § 325(d) ............................................................................................passim
`
`Other Authorities
`
`37 C.F.R. § 42.71(c) ................................................................................................... 5
`
`37 C.F.R. § 42.71(d) .................................................................................................. 5
`
`37 C.F.R. § 42.122(b) ............................................................................................ 6, 8
`
`157 Cong. Rec. S1041 (daily ed. Mar. 1, 2011) ................................................ 10, 14
`
`Standard Operating Procedure 1, Rev. 14 ............................................................ 2, 12
`
`
`
`
`
`iii
`
`

`
`
`
`I.
`
`
`
`Case No. IPR2015-01046
`
`INTRODUCTION AND PRECISE RELIEF REQUESTED
`
`Patent Owner VirnetX Inc. requests rehearing of the Patent Trial and Appeal
`
`Board’s Institution Decision entered January 25, 2016 (Paper No. 28 in
`
`IPR2015-01046, “Decision”), granting Apple Inc.’s petition and instituting trial in
`
`IPR2016-00062 and joining that proceeding with IPR2015-01046.
`
`The patent-at-issue has been subjected to eleven office challenges—six of
`
`the eleven challenges were either filed directly by Apple or, worse, filed on
`
`Apple’s behalf by RPX Corporation in an attempt to evade the one-year statutory
`
`bar under 35 U.S.C. § 315(b). (Prelim. Resp. in IPR2016-00062 at 4-7.) The
`
`Decision discounted VirnetX’s argument that Apple’s Petition is barred under
`
`§ 315(b) without any substantive analysis of VirnetX’s statutory interpretation.
`
`(Decision at 4.) However, as discussed in the Preliminary Response and below,
`
`strong dissenting opinions by Members of the Board suggest that VirnetX’s
`
`statutory interpretation is correct and that joining Apple to IPR2015-01046, despite
`
`the one-year bar, is not only improper but also an ultra vires action.
`
`Setting aside § 315(b), if there was ever a case where the Board should deny
`
`institution under 35 U.S.C. § 325(d), it is this case. Despite the extreme facts, with
`
`Apple actively trying to evade the statutory one-year bar, the Decision completely
`
`omits any discussion of § 325(d). Previous decisions dictate the Board should
`
`have exercised its discretion to deny Apple’s Petition. The Decision took the
`
`1
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`

`
`
`opposite approach, and has even allowed Apple to take the driver’s seat in
`
`Case No. IPR2015-01046
`
`IPR2015-01046.
`
`VirnetX requests rehearing by an expanded panel that includes the Chief
`
`Judge in deciding this request. Standard Operating Procedure 1, Rev. 14, Section
`
`III.D (“When a judge, a merits panel, or an interlocutory panel . . . receives a
`
`suggestion for an expanded panel, the judge, merits panel, or interlocutory panel
`
`shall notify the Chief Judge, Deputy Chief Judge, and the Vice Chief Judges of the
`
`suggestion, in writing.”). An expanded panel that includes the Chief Judge is
`
`necessary given the exceptional importance of, and the need for uniformity relating
`
`to, the § 315(b) and § 325(d) issues in this proceeding.
`
`In short, VirnetX requests that rehearing be granted and Apple’s petition be
`
`denied.
`
`II. BACKGROUND
`Apple’s Petition in IPR2016-00062 is one of eleven challenges to the
`
`validity of U.S. Patent No. 6,502,135 (“the ’135 patent”) in inter partes
`
`proceedings before the Office. These challenges have included three inter partes
`
`reexamination proceedings and eight IPRs. They began over six years ago when
`
`Microsoft filed a request for inter partes reexamination of the ’135 patent on
`
`December 8, 2009, which the Office assigned Control No. 95/001,269 and in
`
`which the Office confirmed the patentability of all the challenged claims. Cisco
`
`2
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`

`
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`filed a second request for inter partes reexamination of the ’135 patent on July 8,
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`Case No. IPR2015-01046
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`2011, which
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`the Office assigned Control No. 95/001,679 (“the ’1,679
`
`reexamination”), and remains pending. The ’1,679 reexamination involves the
`
`same Kiuchi reference asserted in Apple’s Petition and in Mangrove’s IPR2015-
`
`01046 proceeding. Soon after, Apple filed a third request for inter partes
`
`reexamination of the ’135 patent on July 11, 2011, which the Office assigned
`
`Control No. 95/001,682 (“the ’1,682 reexamination”), and which also remains
`
`pending.
`
`Apple filed its first two IPR petitions against the ’135 patent on June 12,
`
`2013, in IPR2013-00348 and IPR2013-00349, respectively. The Board denied
`
`both these petitions because Apple was time-barred under 35 U.S.C. § 315(b) as it
`
`had been served with a complaint alleging infringement of the ’135 patent in
`
`August 2010, more than a year before it filed its IPR petitions. IPR2013-00348,
`
`Paper No. 14 at 5 (Dec. 13, 2013), reh’g denied Paper No. 18 (Feb. 12, 2014);
`
`IPR2013-00349, Paper No. 14 at 5 (Dec. 13, 2013), reh’g denied Paper No. 18
`
`(Feb. 12, 2014).
`
`The third IPR petition against the ’135 patent was filed by New Bay Capital,
`
`LLC on June 23, 2013. That proceeding was terminated in favor of VirnetX,
`
`pursuant to New Bay’s request for adverse judgment. IPR2013-00375, Paper No.
`
`16 (Nov. 12, 2013).
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`3
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`Case No. IPR2015-01046
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`RPX Corporation, which the Board found was acting as a proxy for time-
`
`barred Apple, concurrently filed two other IPR petitions against the ’135 patent on
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`November 20, 2013, in IPR2014-00171 and IPR2014-00172 (i.e., the fourth and
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`fifth IPR petitions). As VirnetX explained, Apple tried to hide its involvement in
`
`the RPX proceedings in several ways, giving the false impression that Apple and
`
`RPX were unconnected entities without a privity or real party-in- interest
`
`relationship. IPR2014-00171, Paper No. 55 at 5-7 (redacted) (Mar. 6, 2014);
`
`IPR2014-00172, Paper No. 55 at 5-7 (redacted) (Mar. 6, 2014). Despite these
`
`efforts, the Board found that Apple was a real party-in-interest for both of RPX’s
`
`petitions, and accordingly denied institution given Apple’s time-barred status.
`
`IPR2014-00171, Paper No. 57 at 3 (redacted) (June 5, 2014); IPR2014-00172,
`
`Paper No. 57 at 3 (redacted) (June 5, 2014).
`
`Microsoft then filed a sixth IPR petition in IPR2014-00558 on March 31,
`
`2014 challenging the ’135 patent. The Board denied the petition because
`
`Microsoft was time-barred under 35 U.S.C. § 315(b). IPR2013-00558, Paper No.
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`13 at 8 (July 23, 2014), reh’g denied Paper No. 16 (Sep. 5, 2014).
`
`The Mangrove Partners Master Fund, Ltd. filed the seventh IPR petition in
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`IPR2015-01046 on April 14, 2015 challenging the ’135 patent. The Board
`
`instituted the proceeding. IPR2015-01046, Paper No. 11 (Oct. 7, 2015). Apple
`
`filed the eighth IPR petition in IPR2016-00062, which is at issue in this request.
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`4
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`

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`According to Apple, the grounds and declarations submitted with its Petition are
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`Case No. IPR2015-01046
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`the same as those in the Mangrove petition, (Paper No. 2 in IPR2016-00062 at 4;
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`Exs. 1003 in each proceeding), although Apple’s Petition also raises new issues
`
`and introduces new exhibits (Paper No. 1 in IPR2016-00062 at 39-42).
`
`Apple’s challenges to the validity of the ’135 patent have not been limited to
`
`challenges before the Office. Apple also challenged the validity of the ’135 patent
`
`in a litigation that included a jury trial. In that litigation, VirnetX Inc. v. Cisco Sys.
`
`Inc. et al., Case No. 6:10-cv-00417 (E.D. Tex.), Apple failed to establish that any
`
`claim of the ’135 patent was invalid. (Ex. 2004 in IPR2016-00062, Jury Verdict
`
`Form (E.D. Tex. Nov. 6, 2012).) 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).
`
`III. LEGAL STANDARD
`“A party dissatisfied with a decision may file a request for rehearing.”
`
`37 C.F.R. § 42.71(d). “The request must specifically identify all matters the party
`
`believes the Board misapprehended or overlooked, and the place where each
`
`matter was previously addressed in a motion, an opposition, or a reply.” Id.
`
`Institution decisions are reviewed on rehearing for an abuse of discretion.
`
`See 37 C.F.R. § 42.71(c). An abuse of discretion occurs when a “decision [i]s
`
`based on an erroneous conclusion of law or clearly erroneous factual findings, or
`
`5
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`

`
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`. . . a clear error of judgment.” Apple Inc. v. DSS Technology Management, Inc.,
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`Case No. IPR2015-01046
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`IPR2015-00369, Paper No. 14 at 3 (Aug. 12, 2015) (citing PPG Indus. Inc. v.
`
`Celanese Polymer Specialties Co., 840 F.2d 1565, 1567 (Fed. Cir. 1988)).
`
`IV. STATEMENT OF REASONS FOR RELIEF REQUESTED
`A. The Decision Incorrectly Applied § 315(b) in Failing to Conclude
`Apple Is Time-Barred
`
`Just like the first two IPRs filed by Apple, and the two IPRs filed by RPX on
`
`Apple’s behalf, Apple’s Petition in IPR2016-00062 should have been denied under
`
`§ 315(b). (Prelim. Resp. in IPR2016-00062 at 1-3.) The Board, relying on 37
`
`C.F.R. § 42.122(b), instead found that “the one-year time limit [in § 315(b)] ‘shall
`
`not apply when the petition is accompanied by a request for joinder.’” (Decision at
`
`4.) The Board’s Decision is inconsistent with the statutory language in §§ 315(b)
`
`and (c), which provide:
`
`(b) Patent Owner’s Action. –
`
`An inter partes review may not be instituted if the
`petition requesting the proceeding is filed more than 1
`year after the date on which the petitioner, real party in
`interest, or privy of the petitioner is served with a
`complaint alleging infringement of the patent. The time
`limitation set forth in the preceding sentence shall not
`apply to a request for joinder under subsection (c).
`
`(c) Joinder. –
`
`If the Director institutes an inter partes review, the
`
`6
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`Case No. IPR2015-01046
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`Director, in his or her discretion, may join as a party to
`that inter partes review any person who properly files a
`petition under section 311 that the Director, after
`receiving a preliminary response under section 313 or the
`expiration of the time for filing such a response,
`determines warrants the institution of an inter partes
`review under section 314.
`
`35 U.S.C. §§ 315(b), (c) (emphasis added). As a result of these provisions, before
`
`a request for joinder may be considered, the Board must first determine that the
`
`petition accompanying the request for joinder warrants institution. Id.; see also
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`Butamax Adv. Biofuels LLC v. Gevo, Inc., IPR2014-00581, Paper No. 8 at 7 (Oct.
`
`14, 2014). If a party “properly files a petition” within the one-year deadline, and
`
`then files a “request for joinder under subsection (c)” after the one-year deadline,
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`§ 315(b) would permit the Board to grant the request for joinder. 35 U.S.C. §§
`
`315(b), (c). This is so because the petition, assuming it is otherwise sufficient,
`
`would have warranted institution. Id. A petition filed after the one-year deadline
`
`does not warrant institution—in fact, it is expressly barred by statute, see 35 U.S.C.
`
`§ 315(b)—and so a request for joinder associated with such a petition cannot be
`
`properly considered. Id.
`
`That a petition is not a request for joinder is clear from the language of the
`
`statute. Within § 315(b) itself, the statute uses the terms “petition” and “request
`
`for joinder” separately. Even the Office’s own rules distinguish between petitions
`
`7
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`

`
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`and requests for joinder. See 37 C.F.R. § 42.122(b) (“. . . the petition is
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`Case No. IPR2015-01046
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`accompanied by a request for joinder”). As Members of the Board have observed
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`in analogous circumstances, the Decision’s interpretation “effectively rewrites the
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`second sentence of § 315(b) as follows with added material underlined: The time
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`limitation set forth in the preceding sentence shall not apply to a petition
`
`accompanied by a request for joinder under subsection (c) if that request is
`
`granted.” Target Corp. v. Destination Maternity Corp., IPR2014-00508, Paper No.
`
`28, Dissent slip op. at 18 (Feb. 12, 2015) (emphasis original). This is improper.
`
`The Office is not permitted to modify the clear intent of Congress. See Chevron
`
`U.S.A. Inc. v. Natural Res. Def. Council Inc., 467 U.S. 837, 842 (1984) (“If the
`
`intent of Congress is clear, that is the end of the matter; for the court, as well as the
`
`agency, must give effect to the unambiguously expressed intent of Congress.”).
`
`The Office may not “convert[] the statutory bar set forth [in § 315(b)] into a
`
`discretionary bar in certain circumstances.” Target, Dissent slip op. at 18.
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`Allowing Apple to participate in this proceeding is an ultra vires action by
`
`the Board. Zhongshan Ocean Motor Co. v. Nidex Motor Corp., IPR2015-00762,
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`Paper No. 16, Dissent slip op. at 1 (Oct. 5, 2015) (“the majority’s determination
`
`that 35 U.S.C. §§ 315(b) and 315(c) provide discretion to join time-barred issues to
`
`an inter partes review proceeding is ultra vires”). Even if the Decision is correct
`
`that its finding as to Apple is consistent with 37 C.F.R. § 42.122(b) (Decision at 4),
`
`8
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`

`
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`§ 315(b) should control. Oshkosh Truck Corp. v. United States, 123 F.3d 1477,
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`Case No. IPR2015-01046
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`1481 (Fed. Cir. 1997) (agency regulation receives no deference where it is at odds
`
`with the statutory language). The Decision should have denied Apple’s Petition.
`
`The Decision states that it “considered Patent Owner’s arguments” regarding
`
`this interpretation of § 315(b), but does “not find these arguments persuasive for at
`
`least the reasons set forth by Petitioner.” (Decision at 4.) However, the only
`
`“reason” provided by Apple (other than reliance on an interpretation of the
`
`Office’s rules and non-precedential Board decisions) is that “VirnetX’s reading of
`
`§ 315(b) would render its second sentence a legal nullity – it would never apply, as
`
`no petition filed more than a year after service could ever be the basis of
`
`participation in any proceeding.” (Reply in IPR2016-00062 at 3 (emphasis
`
`original) (citing U.S. v. Atl. Research, 551 U.S. 128, 137 (2007).) Apple’s reason
`
`is simply not true; § 315(b)’s second sentence would apply when a petition is filed
`
`before the one-year deadline, but a request for joinder is filed after the one-year
`
`deadline.2 The Decision’s adoption of Apple’s argument was legal error. Just like
`
`Apple’s first four attempts at evading the statutory one-year bar, Apple’s Petition
`
`2 The Federal Circuit’s observation, in dicta in Achates Reference Publishing, Inc.
`
`v. Apple Inc., 803 F.3d 652, 657 (Fed. Cir. 2015), that “an otherwise time-barred
`
`party may nonetheless participate in an inter partes review proceeding if another
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`party files a proper petition” is consistent with this principle.
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`9
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`

`
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`in the present proceeding should have been rejected under § 315(b).
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`Case No. IPR2015-01046
`
`B.
`
`The Decision Incorrectly Applied § 325(d) and Ignored Apple’s
`Numerous Serial and Concurrent Attacks to Validity
`
`Even if the Board concludes that Apple’s Petition is not statutorily barred,
`
`Apple’s past conduct and the numerous challenges to the ’135 patent nonetheless
`
`compel that the Petition be denied under § 325(d).
`
` (Prelim. Resp. in
`
`IPR2016-00062 at 4-11.) The Decision incorrectly overlooked VirnetX’s analysis
`
`of § 325(d), not even discussing it in any manner at all.
`
`In enacting § 325(d), Congress had a clear intent to provide the Board a tool
`
`to discourage serial challenges to the same patent through inter partes reviews,
`
`which unnecessarily burden the resources of the Board and patent owners. See 157
`
`Cong. Rec. S1041-42 (daily ed. Mar. 1, 2011) (statement of Sen. Kyl) (the purpose
`
`of § 325(d) is to avoid “serial challenges” and the resulting burden on the patent
`
`owners and Office in managing multiple proceedings involving the same patent).
`
`The Board has defined the contours of how § 325(d) should be applied in
`
`numerous past cases. See, e.g., Conopco, Inc. v. Procter & Gamble Co., IPR2014-
`
`00506, Paper No. 25 at 3-4 (Dec. 10, 2015) (designated informative) (not allowing
`
`a petitioner to file a “follow-on” second petition to “correct deficiencies noted” as
`
`to a first petition, since doing so would “tax Board resources, and force patent
`
`owners to defend multiple attacks”); Standard Innovation Corp. v. Lelo, Inc.,
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`IPR2014-00907, Paper No. 10 at 4 (Dec. 1, 2014) (denying institution where
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`10
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`“[n]either the Petition nor the Motion for Joinder presents cogent argument or
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`Case No. IPR2015-01046
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`evidence to explain why the grounds of unpatentability asserted in the Petition
`
`could not have been asserted in the [previous] IPR”); Conopco, Inc. v. Procter &
`
`Gamble Co., IPR2014-00628, Paper No. 21 at 11 (Oct. 20, 2014) (noting that “the
`
`interests of fairness, economy, and efficiency support” denying institution where a
`
`petition files a second petition relying on references and arguments it could have
`
`raised in a first unsuccessful petition); Unified Patents, Inc. v. Personal Web
`
`Techs., LLC, IPR2014-00702, Paper No. 13 at 2-3, 7-8 (July 24, 2014) (declining
`
`to institute an IPR where three other IPR petitions, and one request for ex parte
`
`reexamination, had previously been filed by other parties); Prism Pharma, Co.,
`
`Ltd. v. Choongwae Pharma Corp., IPR2014-00315, Paper No. 14 at 2, 12-13 (July
`
`8, 2014) (denying IPR petition under § 325(d) because “[t]he same prior art . . .
`
`and arguments substantially the same as Petitioner’s current contention” were
`
`raised during prosecution).
`
`To name just a few of the facts compelling application of § 325(d) in this
`
`case, discussed in more detail above in Section II: (1) the ’135 patent has been
`
`subjected to eleven inter partes challenges at the Office (Prelim. Resp. in
`
`IPR2016-00062 at 1, 4, 7, 9); (2) six of the eleven challenges were either filed
`
`directly by Apple or on Apple’s behalf by RPX in an attempt to evade the one-year
`
`statutory bar under § 315(b) (id. at 1, 4-6); (3) Apple already tried to establish that
`
`11
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`

`
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`any claim of the ’135 patent was invalid in litigation, but Apple’s validity
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`Case No. IPR2015-01046
`
`arguments were rejected by both the jury and the Federal Circuit (id. at 4, 13); (4)
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`Apple is a third-party requester in a pending inter partes reexamination of the ’135
`
`patent (id. at 5); and (5) the same Kiuchi reference at issue in Apple’s Petition is
`
`also at issue in another pending inter partes reexamination of the ’135 patent (id. at
`
`4-5). The Decision’s non-application of § 325(d) cannot be reconciled with the
`
`decisions of numerous other panels, such as those noted above. Apple’s Petition
`
`should have been denied under § 325(d).
`
`V.
`
`PATENT OWNER REQUESTS REHEARING BY AN EXPANDED
`PANEL THAT INCLUDES THE CHIEF JUDGE
`
`Patent Owner requests that an expanded panel that includes the Chief Judge
`
`consider this request for rehearing. See Standard Operating Procedure 1, Rev. 14
`
`(May 8, 2015), Section III.C; see also Google Inc. v. SimpleAir, Inc., CBM2015-
`
`00019, Paper No. 15 at 8 (Aug. 19, 2015) (considering a request for expanded
`
`panel review under Standard Operating Procedure 1, Rev. 14). Patent Owner is
`
`making this request because (1) the proceeding “involves an issue of exceptional
`
`importance,” and (2) “[c]onsideration by an expanded panel is necessary to secure
`
`and maintain uniformity of the Board’s decisions, such as where different panels of
`
`the Board render conflicting decisions on issues of statutory interpretation . . ., or a
`
`substantial difference of opinion among judges exists on issues of statutory
`
`interpretation.” Standard Operating Procedure 1, Rev. 14, Section III.A.
`
`12
`
`

`
`
`
`Case No. IPR2015-01046
`
`For example, as discussed above in Section IV.A, the correct interpretation
`
`of § 315(b) is hotly debated within the Board itself. Two previous expanded
`
`panels considering (among other issues) whether § 315(b)’s one-year bar applies to
`
`a petition accompanied by a request for joinder have resulted in closely split
`
`decisions; the Target decision (4-3) and the Zhongshan decision (3-2), neither of
`
`which is precedential, demonstrate that an expanded panel that includes the Chief
`
`Judge should consider the issue, which is critical to the proper scope of the Board’s
`
`statutory authority. Given that the Board’s willingness to join a time-barred party
`
`has been viewed as ultra vires (i.e., beyond the Board’s legal authority) by at least
`
`some judges, this is an issue of tremendous importance. Zhongshan Ocean Motor
`
`Co., IPR2015-00762, Paper No. 16, Dissent slip op. at 1.
`
`An expanded panel is also needed because the Decision’s application of
`
`§ 325(d) is inconsistent with that of many past panels. See supra Section IV.B.
`
`The ’135 patent is at issue in three separate pending office challenges (including
`
`IPR2015-01046 and Control Nos. 95/001,679 and 95/001,682), had its validity
`
`confirmed in one office challenge (Control No. 95/001,269), had its validity
`
`confirmed by a jury and the Federal Circuit, and was at issue in six IPRs that were
`
`dismissed. Apple itself has been associated with six of the office challenges to the
`
`’135 patent, including two in which Apple improperly hid its involvement to try to
`
`sidestep its time-barred status. The Decision’s grant of Apple’s Petition and
`
`13
`
`

`
`
`joinder of Apple is inconsistent with Congress’s intent for § 325(d) and previous
`
`Case No. IPR2015-01046
`
`decisions by the Board applying § 325(d).
`
`VI. CONCLUSION
`When Congress established the inter partes review process, it had a clear
`
`concern that patent owners would be subjected to serial attacks. 157 Cong. Rec.
`
`S1041-42 (daily ed. Mar. 1, 2011) (statement of Sen. Kyl). It is no mistake that
`
`§§ 315(b) and 325(d) appear in the statute; both provide tools to alleviate the
`
`concern for harassment. The proper and consistent application of these provisions
`
`is necessary. For at least these reasons, VirnetX respectfully requests rehearing of
`
`the Decision and denial of Apple’s Petition.
`
`
`
`Respectfully submitted,
`
`
`
`By: /Joseph E. Palys/
`Joseph E. Palys
`Registration No. 46,508
`
`Counsel for VirnetX Inc.
`
`Dated: February 8, 2016
`
`14
`
`

`
`
`
`
`
`Case No. IPR2015-01046
`
`CERTIFICATE OF SERVICE
`
`Pursuant to 37 C.F.R. § 42.6(e), I certify that I caused to be served on the
`
`counsel for Petitioner a true and correct copy of the foregoing Patent Owner’s
`
`Request for Rehearing Under 37 C.F.R. § 42.71(d)(1) of Institution Decision in
`
`IPR2016-00062 by electronic means on the date below at the following addresses
`
`of record:
`
`Abraham Kasdan (akasdan@wiggin.com)
`James T. Bailey (jtb@jtbaileylaw.com)
`IP@wiggin.com
`
`Jeffrey P. Kushan
`Scott Border
`Thomas A. Broughan III
`iprnotices@sidley.com
`
`By: /Joseph E. Palys/
`Joseph E. Palys
`Registration No. 46,508
`
`Counsel for VirnetX Inc.
`
`
`
`
`
`
`
`Dated: February 8, 2016

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