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: March 21, 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
`
`
`
`
`
`
`
`
`
`
`
`THE MANGROVE PARTNERS MASTER FUND, LTD. and APPLE INC.,
`Petitioner
`
`v.
`
`VIRNETX INC.,
`Patent Owner
`
`
`
`
`
`
`
`
`Case IPR2015-010461
`Patent 6,502,135
`
`
`
`
`
`
`
`
`Patent Owner’s Response
`
`
`1 Apple Inc., who filed a petition in IPR2016-00062, has been joined as a Petitioner
`in the instant proceeding.
`
`
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`CONFIDENTIAL - PROTECTIVE ORDER MATERIAL
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`I.
`
`II.
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`
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`Case No. IPR2015-01046
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`TABLE OF CONTENTS
`
`Introduction ...................................................................................................... 1
`
`Claim Construction .......................................................................................... 2
`
`A.
`
`B.
`
`“Virtual Private Network (VPN)” (Claims 1, 4, 7, 10, and 12) ............ 4
`
`“Domain Name Service (DNS) Request” (Claims 1, 3, 4, 8, 10,
`12) ........................................................................................................13
`
`C.
`
`“Client Computer” (Claims 1, 3, 4, 7, 10, 12) ....................................15
`
`D. Other Terms .........................................................................................17
`
`III. Kiuchi Does Not Anticipate Claims 1, 3, 4, 7, 8, 10, and 12 ........................18
`
`A. Kiuchi’s Disclosure .............................................................................18
`
`B. Kiuchi Does Not Anticipate Independent Claim 1 .............................20
`
`1.
`
`2.
`
`3.
`
`4.
`
`Kiuchi Does Not Disclose the Recited DNS Features ..............20
`
`The Alleged Request in Kiuchi Does Not “Request an IP
`Address Corresponding to a Domain Name Associated
`with the Target Computer” .......................................................22
`
`Kiuchi’s Client-Side Proxy and Server-Side Proxy Do
`Not Disclose the Claimed Client and Target Computers..........24
`
`Kiuchi Does Not Disclose the Claimed VPN ...........................29
`
`a)
`
`b)
`
`Network ..........................................................................29
`
`Direct Communication ...................................................31
`
`C. Kiuchi Does Not Anticipate Independent Claim 10 ...........................32
`
`1.
`
`2.
`
`3.
`
`Kiuchi Does Not Disclose the Recited DNS Features ..............32
`
`Kiuchi Does Not Disclose a DNS Proxy Server that
`Generates a Request to Create a VPN ......................................32
`
`Kiuchi Does Not Disclose a DNS Proxy Server that
`Returns an IP Address ...............................................................33
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`Case No. IPR2015-01046
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`D. Kiuchi Does Not Anticipate Dependent Claims 3, 4, 7, 8, and
`12 .........................................................................................................34
`
`1.
`
`2.
`
`Kiuchi Does Not Disclose the Features of Claim 4 ..................35
`
`Kiuchi Does Not Disclose the Features of Claim 7 ..................36
`
`IV. Kiuchi and RFC 1034 Do Not Render Obvious Claim 8 ..............................37
`
`V. Dr. Guerin’s Testimony Should be Accorded Little, If Any, Weight ...........38
`
`A. Dr. Guerin Did Not Properly Analyze the Claims ..............................38
`
`
`
`
`..............................................................39
`
`VI. Petitioners Have Failed to Prove All References Are Prior Art ....................41
`
`A.
`
`B.
`
`Petitioners Do Not Establish by a Preponderance of the
`Evidence that RFC 1034 Was Publicly Accessible ............................42
`
`The Additional Evidence Presented by Petitioner Apple Is
`Insufficient to Establish by a Preponderance of the Evidence
`that RFC 1034 Was Publicly Accessible ............................................43
`
`VII. Review is Barred by 35 U.S.C. §§ 312(a)(2) and 315(b)-(c) ........................45
`
`A.
`
`The Petition Filed by Mangrove Fails to Name All of the Real
`Parties-in-Interest ................................................................................46
`
`1.
`
`The Complex Web of Mangrove Entities .................................46
`
`a)
`
`b)
`
`c)
`
`The Mangrove Entities ...................................................47
`
`The Unnamed Investors ..................................................51
`
`Recent Representations to the United States
`Securities and Exchange Commission ............................51
`
`RPX Corporation.......................................................................52
`
`
`..................................................................54
`
`2.
`
`
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`Case No. IPR2015-01046
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`4.
`
`Failure to Identify All RPIs Prohibits Review ..........................56
`
`B.
`
`Review is Barred by 35 U.S.C. § 315(b)-(c) .......................................57
`
`VIII. Conclusion .....................................................................................................60
`
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`
`
`Case No. IPR2015-01046
`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`Cases
`Aceto Agricultural Chems. Corp. v. Gowan Co.,
`IPR2015-01016, Paper No. 15 (Oct. 2, 2015) .............................................. 56, 57
`
`Apple Inc. v. DSS Technology Management, Inc.,
`IPR2015-00369, Paper No. 9 (June 25, 2015); ................................................... 42
`
`Apple Inc. v. VirnetX Inc.,
`IPR2014-00237, Paper No. 15 (May 14, 2014) .................................................... 5
`
`Apple Inc. v. VirnetX Inc.,
`IPR2014-00404, Paper No. 42 (July 29, 2015) ............................................ 22, 24
`
`Apple Inc. v. VirnetX Inc.,
`IPR2015-00871, Paper No. 8 (Oct. 1, 2015) ...................................................... 10
`
`Aspex Eyewear, Inc. v. Concepts In Optics, Inc.,
`111 F. App’x 582 (Fed. Cir. 2004) ............................................................... 38, 39
`
`Atlanta Gas Light Co. v. Bennett Regulator Guards, Inc.,
`IPR2013-00453, Paper No. 88 (Jan. 6, 2015) ..................................................... 56
`
`Becton, Dickenson & Co. v. Tyco Healthcare Group, LP,
`616 F.3d 1249 (Fed. Cir. 2010) .......................................................................... 36
`
`In re Bigio,
`381 F.3d 1320 (Fed. Cir. 2004) ............................................................................ 9
`
`Biogen Idec, Inc. v. GlaxoSmithKline LLC,
`713 F.3d 1090 (Fed. Cir. 2013) ............................................................................ 9
`
`Brand v. Miller,
`487 F.3d 862 (Fed. Cir. 2007) ............................................................................ 38
`
`Bruckelmyer v. Ground Heaters, Inc.,
`445 F.3d 1374 (Fed. Cir. 2006) .......................................................................... 41
`
`Centricut, LLC v. Esab Group, Inc.,
`390 F.3d 1361 (Fed. Cir. 2004) .......................................................................... 38
`
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`
`
`In re Cuozzo,
`793 F.3d 1297 (Fed. Cir. 2015) ............................................................................ 4
`
`Case No. IPR2015-01046
`
`Cuozzo Speed Techs., LLC v. Lee,
`No. 15-446, 2016 WL 205946 (U.S. Jan. 15, 2016) ............................................. 3
`
`Cyber Corp. v. FAS Techs., Inc.,
`138 F.3d 1448 (Fed. Cir. 1998) ............................................................................ 9
`
`Dish Network L.L.C. v. Dragon Intellectual Property, LLC,
`IPR2015-00499, Paper No. 7 (July 17, 2015) .................................................... 42
`
`Elec. Frontier Found. v. Pers. Audio, LLC,
`IPR2014-00070, Paper No. 21 (Apr. 18, 2014) .................................................. 43
`
`Eon–Net LP v. Flagstar Bancorp.,
`653 F.3d 1314 (Fed. Cir. 2011) ............................................................................ 6
`
`Finnigan Corp. v. ITC,
`180 F.3d 1354 (Fed. Cir. 1999) .......................................................................... 45
`
`Galderma S.A. v. Allergan Industrie, SAS,
`IPR2014-01422, Paper No. 14 (Mar. 5, 2015) ................................................... 50
`
`Garmin Int’l, Inc. v. Cuozzo Speed Techs. LLC,
`IPR2012-00001, Paper No. 15 (Jan. 9, 2013) ..................................................... 10
`
`GEA Process Eng., Inc. v. Steuben Foods, Inc.,
`IPR2014-00041, Paper No. 15 (Dec. 23, 2014) .................................................. 56
`
`Google Inc. v. Art+Com Innovationpool GMBH,
`IPR2015-00788, Paper No. 7 (September 2, 2015); ........................................... 42
`
`Idle Free Sys., Inc. v. Bergstrom, Inc.,
`IPR2012-00027, Paper No. 26 (June 11, 2013) .................................................... 3
`
`Kinetic Technologies, Inc. v. Skyworks Solutions, Inc.,
`IPR2014-00690, Paper No. 43 (October 19, 2015) ............................................ 41
`
`In re Klopfenstein,
`380 F.3d 1345 (Fed. Cir. 2004) .......................................................................... 41
`
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`Koito Mfg. Co. v. Turn-Key-Tech LLC,
`381 F.3d 1142 (Fed. Cir. 2004) .......................................................................... 38
`
`Case No. IPR2015-01046
`
`Lantech Inc. v. Keip Machine Co.,
`32 F.3d 542 (Fed. Cir. 1994) .............................................................................. 36
`
`Loughrin v. United States,
`134 S. Ct. 2384 (2014) ........................................................................................ 59
`
`Microsoft Corp. v. Proxyconn, Inc.,
`789 F.3d 1292 (Fed. Cir. 2015) .............................................................. 10, 11, 12
`
`Motorola Solutions, Inc. v. Mobile Scanning Techs., LLC,
`IPR2013-00093, Paper No. 28 (Apr. 29, 2013) .................................................. 10
`
`Oshkosh Truck Corp. v. United States,
`123 F.3d 1477 (Fed. Cir. 1997) .......................................................................... 60
`
`Power Integrations, Inc. v. Lee,
`797 F.3d 1318 (Fed. Cir. 2015) .......................................................................... 27
`
`Proveris Scientific Corp. v. Innovasystems, Inc.,
`536 F.3d 1256 (Fed. Cir. 2008) .................................................................... 38, 39
`
`Richardson v. Suzuki Motor Co.,
`868 F.2d 1226 (Fed. Cir. 1989) .......................................................................... 21
`
`In re Robertson,
`169 F.3d 743 (Fed. Cir. 1999) ............................................................................ 36
`
`RPX Corp. v. VirnetX, Inc.,
`IPR2014-00171, Paper No. 52 (June 23, 2014) .................................................. 51
`
`Samsung Elecs. Co. v. Rembrandt Wireless Techs., LP,
`IPR2014-00514, Paper No. 18 (Sep. 9, 2014) .................................................... 43
`
`Schumer v. Lab. Computer Sys., Inc.,
`308 F.3d 1304 (Fed. Cir. 2002) .................................................................... 38, 39
`
`In re Skvorecz,
`580 F.3d 1262 (Fed. Cir. 2009) ............................................................................ 3
`
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`Square Inc. v. Unwired Planet, LLC,
`CBM2014-00156, Paper No. 22 (Feb. 26, 2015) ............................................... 42
`
`Case No. IPR2015-01046
`
`Straight Path IP Grp., Inc. v. Sipnet EU S.R.O.,
`806 F.3d 1356 (Fed. Cir. 2015) .............................................................. 10, 11, 12
`
`Symantec Corp. v. Trustees of Columbia Univ. in the City of N.Y.,
`IPR2015-00371, Paper No. 13 (July 17, 2015). ................................................. 42
`
`Taylor v. Sturgell,
`553 U.S. 880 (2008) ............................................................................................ 51
`
`Tempo Lighting, Inc. v. Tivoli, LLC,
`742 F.3d 973 (Fed. Cir. 2014) ...................................................................... 10, 11
`
`Titanium Metals Corp. v. Banner,
`778 F.2d 775 (Fed. Cir. 1985) ............................................................................ 21
`
`In re Translogic Tech., Inc.,
`504 F.3d 1249 (Fed. Cir. 2007) ............................................................................ 2
`
`Typeright Keyboard Corp. v. Microsoft Corp.,
`374 F.3d 1151 (Fed. Cir. 2004) .......................................................................... 45
`
`In re VirnetX Inc.,
`No. 2016-119, slip op. (Fed. Cir. Mar. 18, 2016) ............................................... 58
`
`VirnetX Inc. v. Cisco Systems, Inc.,
`767 F.3d 1308 (Fed. Cir. 2014) ...................................................................passim
`
`Ex Parte Weideman,
`Appeal No. 2008-3454, Decision on Appeal (BPAI Jan. 27, 2009) .................. 36
`
`Xilinx, Inc. v. Intellectual Ventures I LLC,
`IPR2013-00112, Paper No. 14 (June 27, 2013) .................................................. 10
`
`In re Yamamoto,
`740 F.2d 1569 (Fed. Cir. 1984) ............................................................................ 3
`
`ZTE Corp. & ZTE (USA) Inc. v. ContentGuard Holdings Inc.,
`IPR2013-00134, Paper No. 12 (June 19, 2013) .................................................. 10
`
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`
`
`Statutes
`
`Case No. IPR2015-01046
`
`28 U.S.C. § 1746 ...................................................................................................... 39
`
`35 U.S.C. § 311(b) ............................................................................................. 41, 43
`
`35 U.S.C. § 311(c) ................................................................................................... 60
`
`35 U.S.C. § 312(a)(2) ........................................................................................passim
`
`35 U.S.C. § 314(b) ................................................................................................... 60
`
`35 U.S.C. § 315(b) ............................................................................................passim
`
`35 U.S.C. § 315(c) ............................................................................................passim
`
`35 U.S.C. § 316(e) ..................................................................................................... 1
`
`Other Authorities
`
`37 C.F.R. § 11.18(b) ................................................................................................ 41
`
`37 C.F.R. § 42.2 ....................................................................................................... 39
`
`37 C.F.R. § 42.6(a)(4) .............................................................................................. 41
`
`37 C.F.R. § 42.65(a) ........................................................................................... 42, 44
`
`37 C.F.R. § 42.100(b) ................................................................................................ 2
`
`37 C.F.R. § 42.122(b) .............................................................................................. 60
`
`154 Cong. Rec. S9988 (daily ed. Sept. 27, 2008) .................................................... 59
`
`77 Fed. Reg. 157 (Aug. 14, 2012)...................................................................... 50, 51
`
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`Case No. IPR2015-01046
`
`LIST OF EXHIBITS
`
`Exhibit
`No.
`2001 Mangrove Partners Brochure, filed with the Securities and
`Exchange Commission, March 27, 2015
`2002 Mangrove Partners Schedule A, filed with the Securities
`and Exchange Commission,
`Cayman Islands Search Report of Mangrove Partners
`Form 13-F for Mangrove Partners, filed with the
`Securities and Exchange Commission, February 17, 2015
`Excerpt of Dictionary of Finance and Investment Terms,
`Fifth Edition
`Form 13-F for Mangrove Partners, filed with the
`Securities and Exchange Commission, May 15, 2015
`Schedule 13G filed with the Securities and Exchange
`Commission, for issuer Asta Funding, Inc., June 10, 2013
`Schedule 13G filed with the Securities and Exchange
`Commission, for issuer JGWPT Holdings, Inc.,
`November 8, 2013
`Schedule 13G filed with the Securities and Exchange
`Commission, for issuer JGWPT Holdings, Inc., December
`31, 2013
`Schedule 13G filed with the Securities and Exchange
`Commission, for issuer Asta Funding, Inc., December 31,
`2013
`Schedule 13G filed with the Securities and Exchange
`Commission, for issuer The First Marblehead
`Corporation, December 31, 2013
`Schedule 13G filed with the Securities and Exchange
`Commission, for issuer Asta Funding, Inc., December 31,
`2014
`Schedule 14A filed with the Securities and Exchange
`Commission, reporting Mangrove Partners Press Release,
`February 9, 2015
`Schedule 14A filed with the Securities and Exchange
`Commission, reporting Mangrove Partners Press Release,
`February 12, 2015
`2015 Hedge Fund Regulation (2nd Edition), Scott J Lederman,
`
`2003
`2004
`
`2005
`
`2006
`
`2007
`
`2008
`
`2009
`
`2010
`
`2011
`
`2012
`
`2013
`
`2014
`
`Description
`
`ix
`
`Previously
`Submitted
`X
`
`X
`X
`X
`
`X
`
`X
`
`X
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`X
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`X
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`X
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`X
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`X
`
`X
`
`X
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`X
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`CONFIDENTIAL - PROTECTIVE ORDER MATERIAL
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`Case No. IPR2015-01046
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`Exhibit
`No.
`
`2016
`
`2017
`
`2018
`
`2019
`
`2020
`
`2021
`
`2022
`
`2023
`
`Chapter 2, Form Over Substance: Hedge Fund Structures
`EDGAR Search Results, Mangrove Partners Fund
`(Cayman), Ltd.
`EDGAR Search Results, Mangrove Partners Master Fund,
`Ltd.
`Cayman Islands Search Report of The Mangrove Partners
`Fund (Cayman), Ltd.
`Cayman Islands Search Report of The Mangrove Partners
`Master Fund, Ltd.
`Form D for Mangrove Partners Fund, L.P., filed with the
`Securities and Exchange Commission
`Complaint For Civil Extortion, Malicious Prosecution,
`and Unfair Business Practices Arising From U.S. Patent
`Laws, Allergan, Inc. v. Ferrum Ferro, Capital, LLC, case
`no. 8:15-cv-00992 (C.D. Cal. June 19, 2015)
`“New Hedge Fund Strategy: Dispute the Patent, Short the
`Stock,” The Wall Street Journal, April 7, 2015
`Cayman Islands Search Report of Hayman Credes Master
`Fund L.P.
`2024 Website of Maples and Calder, available at
`http://www.maplesandcalder.com/offices-
`contacts/cayman-islands/
`2025 Memorandum Opinion and Order in VirnetX Inc. v. Mitel
`Networks Corp. et al., Case No. 6:11-CV-00018 (E.D.
`Tex. Aug. 1, 2012)
`2026 Declaration of Dr. Fabian Monrose in IPR2014-00237
`2027 Glossary for the Linux FreeS/WAN Project
`Excerpts from McGraw-Hill Computer Desktop
`2028
`Encyclopedia (9th ed. 2001)
`2029 Microsoft’s Responsive Claim Construction Brief in
`VirnetX, Inc. v. Microsoft Corp., Case No. 6:07-CV-80
`(E.D. Tex. Jan. 20, 2009)
`2030 Defendants’ Responsive Claim Construction Brief in
`VirnetX Inc. v. Cisco Systems, Inc., et al., Case No. 6:10-
`CV-417 (E.D. Tex. Dec. 7, 2011)
`2031 Defendants’ Responsive Claim Construction Brief in
`VirnetX Inc. v. Mitel Networks Corp. et al., Case No.
`
`Description
`
`x
`
`Previously
`Submitted
`
`X
`
`X
`
`X
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`X
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`X
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`X
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`X
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`X
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`X
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`X
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`X
`X
`X
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`X
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`X
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`X
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`CONFIDENTIAL - PROTECTIVE ORDER MATERIAL
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`Case No. IPR2015-01046
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`Description
`
`Exhibit
`No.
`
`2032
`
`2035
`
`2036
`
`2037
`2038
`2039
`2040
`2041
`
`6:11-CV-00018 (E.D. Tex. June 11, 2012)
`Plaintiff VirnetX Inc.’s Opening Brief in Support of Its
`Construction of Claims in VirnetX, Inc. v. Microsoft
`Corp., Case No. 6:07-CV-80 (E.D. Tex. Dec. 30, 2008)
`2033 Memorandum Opinion and Order in VirnetX, Inc. v.
`Microsoft Corp., Case No. 6:07-CV-80 (E.D. Tex. July
`30, 2009)
`2034 Memorandum Opinion and Order in VirnetX Inc. v. Mitel
`Networks Corp. et al., Case No. 6:11-CV-00018 (E.D.
`Tex. Aug. 1, 2012)
`Excerpts from Markman Hearing Transcript in Case No.
`6:10-CV-417 (E.D. Tex. Jan. 5, 2012)
`Response of Office Action in Reexamination, Control No.
`95/001,269, April 15, 2010
`Transcript of Teleconference of November 10, 2015
`Transcript of Teleconference of November 18, 2015
`Patent Owner’s Requests for Production
`Patent Owner’s Interrogatories
`Schedule D filed with the Securities and Exchange
`Commission
`Transcript of Teleconference of November 24, 2015
`2042
`2043 Declaration of Dr. Fabian Monrose
`2044 Memorandum Opinion and Order in VirnetX Inc. v. Cisco
`Systems, Inc. et al., Case No. 6:10-CV-417 (E.D. Tex.
`Apr. 25, 2012)
`2045 Office Action Response filed January 10, 2011, in
`application no. 11/839,987
`Transcript of Deposition of Dr. Roberto Tamassia in
`IPR2015-00810, IPR2015-00812
`Transcript of Deposition of Dr. Roch Guerin
`Transcript of Trial, Morning Session, VirnetX, Inc. v.
`Apple, Inc., Case No. 6:10-CV-417 (E.D. Tex. Nov. 5,
`2012)
`CONFIDENTIAL Mangrove Production Bates Numbered
`000001-000011
`Form 13-F for Mangrove Partners, filed with the
`Securities and Exchange Commission, August 14, 2015
`
`2046
`
`2047
`2048
`
`2049
`
`2050
`
`xi
`
`Previously
`Submitted
`
`X
`
`X
`
`X
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`X
`
`X
`X
`X
`X
`X
`X
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`X
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`CONFIDENTIAL - PROTECTIVE ORDER MATERIAL
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`
`Case No. IPR2015-01046
`
`Description
`
`Previously
`Submitted
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`
`
`Exhibit
`No.
`2051
`
`2052
`
`2053
`
`2054
`2055
`
`2056
`
`Form 13-F for Mangrove Partners, filed with the
`Securities and Exchange Commission, November 16,
`2015
`Form 13-F for Mangrove Partners, filed with the
`Securities and Exchange Commission, February 16, 2016
`RPX Client Relations, http://www.rpxcorp.com/rpx-
`client-relations (last visited Jan. 23, 2014)
`RPX Corp., Annual Report (Form 10-K) (Mar. 11, 2013)
`RPX Why Join, http://www.rpxcorp.com/why-join-rpx
`(last visited Jan. 24, 2014)
`Transcript filed in IPR2014-00946, IPR2014-00947,
`IPR2014-00948
`Schedule 13D, filed with the Securities and Exchange
`Commission on March 17, 2016, available at:
`http://www.sec.gov/Archives/edgar/data/1509432/000101
`359416000896/rpx13d-031716.htm
`Letter to RPX Corporation, filed with the Securities and
`Exchange Commission on March 17, 2016, available at:
`http://www.sec.gov/Archives/edgar/data/1509432/000101
`359416000896/rpxex991-031716.pdf
`2059 Office Action dated February 15, 2012 in inter partes
`reexamination control no. 95/001,679
`Right of Appeal Notice dated September 15, 2015 in inter
`partes reexamination control no. 95/001,679
`CONFIDENTIAL Mangrove Production Bates Numbered
`000012-000063
`CONFIDENTIAL Petitioner Mangrove Partner’s Master
`Fund Ltd.’s Objections and Responses to VirnetX
`Interrogatory No. 1
`
`2057
`
`2058
`
`2060
`
`2061
`
`2062
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`
`
`I.
`
`
`Introduction
`
`
`
`Case No. IPR2015-01046
`
`Patent Owner VirnetX Inc. respectfully submits this Response to the Board’s
`
`decisions to institute inter partes review (“IPR”) in IPR2015-01046 (Paper No. 11,
`
`the “Decision”) and in IPR2016-00062 (Paper No. 28, the “00062 Decision”); and
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`the petitions for IPR filed by The Mangrove Partners Master Fund, Ltd. in
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`IPR2015-01046 (the “Petition”), and by Apple Inc. in IPR2016-00062 (the “Apple
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`Petition”). The Board should enter judgment against Petitioners for several
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`reasons.
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`For one, each of the claims-at-issue of U.S. Patent No. 6,502,135 (“the ’135
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`patent”) should be confirmed because Petitioners have not carried their “burden of
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`proving . . . unpatentability by a preponderance of the evidence” under 35 U.S.C.
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`§ 316(e). The asserted references fail to disclose each of the claimed features.
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`Petitioners makes vague assertions of unpatentability that, when unobscured,
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`reveal inaccuracies, inconsistencies, and contradictions with past holdings from the
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`Board and the Federal Circuit. Petitioners’ positions are also based on expert
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`testimony that should be given little to no weight because it fails to describe how
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`any of the claim features are allegedly taught or suggested in the asserted
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`references. In addition, Petitioners have not established at least one of the
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`references, RFC 1034, as a prior art printed publication. As such, Petitioners have
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`not established by a preponderance of the evidence that any claim is anticipated or
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`rendered obvious by Kiuchi and/or RFC 1034.
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`Case No. IPR2015-01046
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`In addition, review of the Petitions is barred by statute. Petitioner Mangrove
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`Partners Master Fund, Ltd. failed to name all of the real-parties-in-interest
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`associated with its Petition, in violation of 35 U.S.C. § 312(a)(2). Moreover,
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`review is time-barred under 35 U.S.C. § 315(b)-(c).
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` Claim Construction II.
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`Petitioners identified six terms for construction. The Decision found that
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`“no claim terms require express construction.” (Decision at 5.) Patent Owner
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`respectfully disagrees and addresses construction of the terms below.
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`In IPR, claims are given their “broadest reasonable construction in light of
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`the specification.” 37 C.F.R. § 42.100(b). Under this standard, terms are
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`“generally given their ordinary and customary meaning,” which is the meaning that
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`the term would have to a person of ordinary skill2 at the time of the invention. See
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`In re Translogic Tech., Inc., 504 F.3d 1249, 1257 (Fed. Cir. 2007) (quoting
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`Phillips v. AWH Corp., 415 F.3d 1303, 1312, 1313 (Fed. Cir. 2005) (en banc)).
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`VirnetX acknowledges
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`that
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`this Board applies
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`the broadest
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`reasonable
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`interpretation (BRI) standard, and VirnetX’s constructions represent the BRI of the
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`2 A person of ordinary skill in the art would have had a master’s degree in
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`computer science or computer engineering and approximately two years of
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`experience in computer networking and computer security. (Ex. 2043 at ¶ 13.)
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`claims in light of the specification and prosecution history. Nevertheless, VirnetX
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`submits that the Board should apply the claim construction standard applied by the
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`courts, especially given the litigations and prosecution histories of the ’135 patent
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`and patents in the same family as the ’135 patent. The BRI standard “is solely an
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`examination expedient, not a rule of claim construction.” In re Skvorecz, 580 F.3d
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`1262, 1267-68 (Fed. Cir. 2009). It is justified in examination because applicant
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`has the opportunity to amend the claims during prosecution. In re Yamamoto, 740
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`F.2d 1569, 1571 (Fed. Cir. 1984). But IPR is “more adjudicatory than
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`examinational, in nature.” Idle Free Sys., Inc. v. Bergstrom, Inc., IPR2012-00027,
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`Paper No. 26 at 6 (June 11, 2013).
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`The ability to amend claims during IPR is so severely restricted that the
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`rationale underpinning the BRI—the ability to freely amend claims—does not
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`apply especially given the litigations and prosecution histories of the ’135 patent
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`and patents in the same family as the ’135 patent. As a result, to the extent the
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`Board would have adopted a narrower construction under the courts’ claim
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`construction standard than it has adopted here, it should adopt the narrower
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`construction because the BRI standard should not apply to this proceeding.
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`The Supreme Court recently granted certiorari to consider the application of
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`the BRI standard in Board proceedings. Cuozzo Speed Techs., LLC v. Lee, No. 15-
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`446, 2016 WL 205946, at *1 (U.S. Jan. 15, 2016). VirnetX respectfully submits
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`that, given “the adjudicative nature and the limited amendment process of IPRs,”
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`claims in IPR proceedings should be given their “actual meaning.” In re Cuozzo,
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`793 F.3d 1297, 1299, 1301-02 (Fed. Cir. 2015) (Prost, C.J., dissenting from denial
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`of en banc rehearing). Should the Supreme Court hold that the Board must apply
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`the standard applied by the courts (i.e., the Phillips standard), the challenged
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`claims of the ’135 patent must be confirmed, since the Federal Circuit has
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`confirmed the validity of the subject claims over Kiuchi based on such claim
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`constructions. VirnetX Inc. v. Cisco Systems, Inc., 767 F.3d 1308, 1313-14, 1323-
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`24 (Fed. Cir. 2014); see also Ex. 2044 at 5-8, 14-17, 31.
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`“Virtual Private Network (VPN)” (Claims 1, 4, 7, 10, and 12)3
`A.
`Patent Owner’s Proposed
`Petitioners’ Proposed
`Decision’s Construction
`Construction
`Construction
`A network of computers
`A secure network that
`which privately and
`includes portions of a
`directly communicate
`public network
`with each other by
`encrypting traffic over
`insecure communication
`paths between the
`computers
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`No construction proposed
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`The term “virtual private network (VPN),” as used in the ’135 patent claims,
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`refers to “a network of computers which privately and directly communicate with
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`3 Patent Owner identifies only challenged claims that expressly recite the terms at
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`issue. Claims that depend from these claims may also implicitly contain the terms.
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`each other by encrypting traffic over insecure communication paths between the
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`computers.” Petitioners incorrectly allege that their construction “was previously
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`adopted by the PTAB in IPR2014-00237” (“the ’237 proceeding”). (Pet. at 7.)
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`There, the Board preliminarily construed “VPN” as part of the claim term “VPN
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`communication link” to have a different construction than Petitioners’ proposed
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`construction here. Apple Inc. v. VirnetX Inc., IPR2014-00237, Paper No. 15 at 11-
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`12 (May 14, 2014).4 Moreover, Petitioners point to nothing in the ’135 patent
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`specification or elsewhere that supports their overly vague and ambiguous
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`construction.
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`Petitioners’ proposed construction and their application of that construction
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`raises at least three additional issues: (1) whether a VPN requires encryption, (2)
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`whether a VPN requires that the computers within the VPN have the capability to
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`directly communicate with each other, and (3) whether a VPN requires a network.
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`For the reasons discussed below, encryption, direct communication capability, and
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`a network, are required.
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`Encryption: The specification “repeatedly and consistently” explains that a
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`4 In IPR2014-00237, the Board preliminarily construed “a VPN . . . to mean a
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`‘secure communication link’ with the additional requirement that the link includes
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`a portion of a public network.” Apple, IPR2014-00237, Paper No. 15 at 11-12. In
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`addition, the Board’s constructions are currently subject to appeal.
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`virtual private network requires encryption. See Eon–Net LP v. Flagstar Bancorp.,
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`653 F.3d 1314, 1321–23 (Fed. Cir. 2011). For instance, the ’135 patent
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`specification teaches that “data security is usually tackled using some form of data
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`encryption,” and it repeatedly discusses using encryption. (Ex. 1001 at 1:37-38;
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`see also id. at 2:66-3:2, 3:18-19, 3:57-59, 7:59-60, 9:11-19, 32:29-31; Ex. 2043 at
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`¶¶ 15-17.) Petitioners agree that the specification discloses techniques for
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`implementing a VPN using encryption. (Pet. at 8; Ex. 1001 at 2:66-3:67.) The
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`specification also discloses that its later discussed embodiments can use the earlier-
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`discussed principles of encryption, identifying “different embodiments or modes
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`that can be employed using the aforementioned principles.” (Id. at 22:61-62; see
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`also id. at 32:29-31.)
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`The specification also refers to the “FreeS/WAN” project as a conventional
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`scheme of creating a “VPN.” (Ex. 1001 at 37:50-62; Ex. 2043 at ¶ 18.) Petitioners
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`assert that Patent Owner’s reference to RFC 2535 (the “FreeS/WAN” protocol)
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`does not define a VPN. (Pet. at 9.) However, the FreeS/WAN glossary of terms in
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`the ’135 patent’s prosecution history does define VPN, and the definition requires
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`encryption. It explains that a VPN is “a network which can safely be used as if it
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`were private, even though some of its communication uses insecure connections.
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`All traffic on those connections is encrypted.” (Ex. 2027 at 24, Glossary for the
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`Linux FreeS/WAN Project.) A contemporaneous dictionary similarly explains that
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`“VPNs enjoy the security of a private network via access control and encryption .
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`Case No.