Trials@uspto.gov
`571.272.7822
`
`
`
`
`Paper No. 11
`Filed: October 7, 2015
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`THE MANGROVE PARTNERS MASTER FUND, LTD.,
`Petitioner,
`
`v.
`
`VIRNETX INC.,
`Patent Owner.
`____________
`
`Case IPR2015-01046
`Patent 6,502,135 B1
`____________
`
`Before MICHAEL P. TIERNEY, KARL D. EASTHOM, and STEPHEN C. SIU,
`Administrative Patent Judges.
`
`SIU, Administrative Patent Judge.
`
`
`DECISION
`Institution of Inter Partes Review
`37 C.F.R. § 42.108
`
`
`
`
`571.272.7822
`
`
`
`
`Paper No. 11
`Filed: October 7, 2015
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`THE MANGROVE PARTNERS MASTER FUND, LTD.,
`Petitioner,
`
`v.
`
`VIRNETX INC.,
`Patent Owner.
`____________
`
`Case IPR2015-01046
`Patent 6,502,135 B1
`____________
`
`Before MICHAEL P. TIERNEY, KARL D. EASTHOM, and STEPHEN C. SIU,
`Administrative Patent Judges.
`
`SIU, Administrative Patent Judge.
`
`
`DECISION
`Institution of Inter Partes Review
`37 C.F.R. § 42.108
`
`
`
`
`
`IPR2015-01046
`Patent 6,502,135 B1
`
`I.
`
`INTRODUCTION
`
`
`
`
`
`Background
`A.
`The Mangrove Partners Master Fund, Ltd. (“Petitioner”) filed a Petition
`(“Pet.”) on April 27, 2015 (Paper 5) requesting inter partes review of claims 1, 3,
`4, 7, 8, 10, and 12 of U.S. Patent No. 6,502,135 B1 (“the ’135 Patent,” Ex. 1001)
`pursuant to 35 U.S.C. §§ 311-319. VirnetX Inc. (“Patent Owner”) filed a
`Preliminary Response (“Prelim. Resp.”) on July 24, 2015. Paper 9.
`We have jurisdiction under 35 U.S.C. § 314. We determine based on this
`record that Petitioner has demonstrated, under 35 U.S.C. § 314(a), that there is a
`reasonable likelihood of showing unpatentability with respect to at least one of the
`challenged claims, claims 1, 3, 4, 7, 8, 10, and 12.
`Petitioner relies on the following prior art:
`
`Takahiro Kiuchi and Shigekoto Kaihara, C-HTTP-- The Development of a
`Secure, Closed HTTP-Based Network on the Internet, PROCEEDINGS OF THE
`SYMPOSIUM ON NETWORK AND DISTRIBUTED SYSTEM SECURITY, IEEE 64–75
`(1996) (Ex. 1002, “Kiuchi”).
`
`P. Mockapetris, Domain Names – Concepts and Facilities, Network
`Working Group, Request for Comments: 1034 (1987) (Ex. 1005,
`“RFC 1034”).
`
`
`
`Petitioner contends that the challenged claims are unpatentable under
`35 U.S.C. § 102 and/or § 103 based on the following specific grounds (Pet. 3–4,
`15–37):
`
`Reference(s)
`
`Kiuchi
`Kiuchi and RFC 1034
`
`
`Basis
`
`§ 102
`§ 103
`
`2
`
`
`Claims challenged
`
`1, 3, 4, 7, 8, 10, and 12
`8
`
`
`
`IPR2015-01046
`Patent 6,502,135 B1
`
`
`
`
`
`
`
`
`The Invention
`B.
`The ’135 Patent describes a system and method for securely communicating
`over the Internet. Ex. 1001, 2:66.
`Claim 1 of the ’135 Patent is reproduced below:
`
`
`1. A method of transparently creating a virtual private
`network (VPN) between a client computer and a target computer,
`comprising the steps of:
`(1) generating from the client computer a Domain Name
`Service (DNS) request that requests an IP address corresponding to a
`domain name associated with the target computer;
`(2) determining whether the DNS request transmitted in step (1)
`is requesting access to a secure web site; and
`(3) in response to determining that the DNS request in step (2)
`is requesting access to a secure target web site, automatically
`initiating the VPN between the client computer and the target
`computer.
`
`Ex. 1001, 47:20–32.
`
`
`We note that the ’135 Patent is presently the subject of co-pending actions,
`as follows:
`1) Civ. Act. No 6:13-cv-00211-LED (E.D. Tex.), filed February 26, 2013;
`2) Civ. Act. No. 6:12-cv-00855-LED (E.D. Tex.), filed November 6, 2012;
`3) Civ. Act. No. 6:10-cv-00417-LED (E.D. Tex.), filed August 11, 2010.
`See Pet. 1.
`
`
`
`
`
`3
`
`
`
`
`IPR2015-01046
`Patent 6,502,135 B1
`
`
`
`II. ANALYSIS
`Cited References
`A.
`
`
`
`
`
`
`
`1) Overview of Kiuchi
`Kiuchi discloses a closed HTTP-based network (“C-HTTP”) for a closed
`group of institutions, in which each member is protected by its own firewall. Ex.
`1002, 64. Communication is made possible with a client-side proxy (for one
`institution), a server-side proxy (for another institution), and a C-HTTP name
`server that provides both client-side and server-side proxies with each peer’s public
`key and Nonce values for both request and response. Id. at 64–65.
`The client-side proxy asks the C-HTTP name server whether it can
`communicate with the host specified in a given URL. If the connection is
`permitted, the C-HTTP name server sends the IP address and public key of the
`server-side proxy and both request and response Nonce values, which are
`encrypted and certified using asymmetric key encryption and digital signature. Id.
`at 65.
`The client-side proxy then sends an encrypted request (including the client-
`side proxy’s IP address, hostname, request Nonce value and symmetric data
`exchange key for request encryption) to the server-side proxy, which then asks the
`C-HTTP name server if the query from the client-side proxy is legitimate. Id. If
`the request is confirmed to be legitimate and access is permitted, the C-HTTP
`name server sends the IP address and public key of the client-side proxy and both
`request and response Nonce values to the server-side proxy. After receiving the
`client-side proxy’s IP address, hostname and public key, the server-side proxy
`generates and sends a connection ID to the client-side proxy. After the client-side
`
`4
`
`
`
`
`IPR2015-01046
`Patent 6,502,135 B1
`
`
`proxy accepts the connection ID from the server-side proxy, the connection is
`established. Id. at 66.
`
`
`
`
`2) Overview of RFC 1034
`RFC 1034 discloses a name server that answers standard queries in recursive
`mode or non-recursive mode. Ex. 1005, 22. In non-recursive mode, the server is
`unable to provide an answer to the request and refers to “some other server ‘closer’
`to the answer.” In recursive mode, the server “returns either an error or the
`answer, but never referrals.” Id.
`
`Claim Construction
`B.
`We interpret claims of an unexpired patent using the broadest reasonable
`construction in light of the specification of the patent in which they appear. 37
`C.F.R. § 42.100(b); see In re Cuozzo Speed Techs., LLC, 793 F.3d 1268, 1275–79
`(Fed. Cir. 2015). We presume a claim term carries its “ordinary and customary
`meaning,” which is “the meaning that the term would have to a person of ordinary
`skill in the art in question” at the time of the invention. In re Translogic Tech.,
`Inc., 504 F.3d 1249, 1257 (Fed. Cir. 2007) (citation and quotations omitted).
`Petitioner and Patent Owner each proffer proposed constructions of several
`claim terms. For purposes of this decision, we determine that no claim terms
`require express construction.
`
`Kiuchi - Anticipation
`C.
`Based on the present record at this preliminary stage of the proceedings, we
`agree that Petitioner has established that there is a reasonable likelihood of
`unpatentability of at least one claim as anticipated by Kiuchi. For example,
`
`5
`
`
`
`
`
`
`IPR2015-01046
`Patent 6,502,135 B1
`
`
`Petitioner provides evidence and arguments in support of the proposed ground of
`unpatentability of claims 1, 3, 4, 7, 8, 10, and 12 as anticipated by Kiuchi. Pet. 26–
`35; Ex. 1001, 38:30–33; Ex. 1002, 64–66, 69; Declaration of Dr. Roch Guerin, Ex.
`1003 ¶¶ 18–31, 34. We have reviewed the evidence Petitioner cites, and we find
`that evidence persuasive of a reasonable likelihood that Petitioner would prevail
`with respect to this asserted ground of unpatentability.
`For example, claim 1 recites generating from the client computer a Domain
`name Service (DNS) request that requests an IP address corresponding to a domain
`name associated with the target computer. As Petitioner explains, Kiuchi discloses
`a client-side proxy that receives a request and sends a request to a C-HTTP name
`server to resolve the hostname in the request into an IP address. Pet. 27 (citing
`Ex. 1002, 65; Ex. 1003, ¶¶ 20-22).
`Claim 1 also recites determining whether the DNS request transmitted in
`step (1) is requesting access to a secure web site. As Petitioner explains, Kiuchi
`discloses, for example, that the “C-HTTP name server evaluates the request to
`determine if the hostname specifies a destination that is part of the closed network
`and whether the connection between the user agent and the origin server is
`permitted.” Pet. 27-28 (citing Ex. 1002, 65-66; Ex. 1003, ¶¶ 22-26).
`Claim 1 also recites that in response to a determination that the DNS request
`is requesting access to a secure target web site, automatically initiating the VPN
`between the client computer and the target computer. As Petitioner explains,
`Kiuchi discloses that “if a connection is permitted, the C-HTTP name server
`initiates the connection by returning an IP address and public key associated[d]
`with the hostname” and that “[t]he client-side proxy sends an encrypted connection
`request to the server-side proxy.” Pet. 28-29 (citing Ex. 1002, 65-66; Ex. 1003,
`¶¶ 23, 24, 27).
`
`6
`
`
`
`
`
`
`
`
`IPR2015-01046
`Patent 6,502,135 B1
`
`
`
`
`D. Kiuchi and RFC 1034
`Based on the present record at this preliminary stage of the proceedings, we
`agree that Petitioner has established that there is a reasonable likelihood of
`unpatentability of at least one claim as obvious over the combination of Kiuchi and
`RFC 1034. For example, Petitioner provides evidence and arguments in support of
`the proposed grounds of unpatentability of claim 8 over Kiuchi and RFC 1034.
`Pet. 35–37; Ex. 1001 Fig. 26; Ex. 1002, 64–65, §§ 2.1–2.3; Ex. 1003 ¶¶ 18, 19,
`23–26, 34, 35, and 37–40; Ex. 1005. We have reviewed the evidence Petitioner
`cites, and we find that evidence persuasive of a reasonable likelihood that
`Petitioner would prevail with respect to this asserted ground of unpatentability.
`For example, claim 8 recites passing through the request to a DNS server if
`it determined that access is not being requested to a secure target web site. As
`Petitioner explains, Kiuchi discloses “[w]hen the client-side proxy receives a
`request from a user agent, it determines whether the requested hostname in the
`URL specifies a secure server by sending to a C-HTTP name server a request to
`resolve the hostname,” that “[i]f the C-HTTP name server returns an error code,
`the client-side proxy determines the URL specifies a non-secure destination” and
`“sends the hostname to a conventional DNS server for resolution.” Pet. 32-33
`(citing Ex. 1002, 65; Ex. 1003 ¶¶ 23-26; Ex. 1001, 38:43-47).
`
`Real-parties-in-interest
`E.
`Patent Owner argues that the Petitioner fails to name all of the real parties-
`in-interest. Prelim. Resp. 2. In particular, Patent Owner argues that “[t]he petition
`names The Mangrove Partners Master Fund, Ltd. . . . as the only RPI” but fails to
`
`7
`
`
`
`
`
`
`IPR2015-01046
`Patent 6,502,135 B1
`
`
`name other alleged real parties-in-interest, namely, “(1) the Mangrove Partners
`Hedge Fund; (2) Nathaniel August (President and majority owner of the Mangrove
`Partners Hedge Fund); (3) The Mangrove Partners Fund, L.P. (‘the US Feeder’);
`(4) The Mangrove Partners Fund (Cayman), Ltd. (‘the Cayman Feeder’); (5)
`Mangrove Capital (the General Partner of the US Feeder); and (6) the unnamed
`investors in the US Feeder and the Cayman Feeder.” Id. at 2–13.
`The present record does not reflect that Petitioner is precluded from
`modifying the named real-parties-in-interest to include any of the entities (or
`subset thereof) cited by Patent Owner. Nor does the record indicate that any such
`modification would result in rendering this proceeding improper. Given these
`observations, non-institution of these proceedings at this preliminary stage based
`solely on this potential issue is premature as Petitioner has not had the opportunity
`to either provide evidence whether the additional entities are real-parties-in-interest
`and/or modify the named real-parties-in-interest if it is determined that any of the
`additional entities are, in fact, real-parties-in-interest.
`
`
`Alleged attempts to manipulate the financial markets
`F.
`Patent Owner argues that “[t]he Board should . . . refuse to institute this
`IPR” because “[t]his proceeding was filed in an apparent attempt to manipulate the
`financial markets.” Prelim. Resp. 13, 15 (citing Ex. 2004, 2; Ex. 2006, 2).
`Profit is at the heart of nearly every patent and nearly every inter partes
`review. As such, an economic motive for challenging a patent claim does not itself
`raise abuse of process issues. We take no position on the merits of Petitioner’s
`investment strategy.
`In any event, the AIA sought to establish a more efficient and streamlined
`patent system that improved patent quality, while at the same time limiting
`
`8
`
`
`
`
`IPR2015-01046
`Patent 6,502,135 B1
`
`
`unnecessary and counterproductive litigation costs. The AIA was designed to
`encourage the filing of meritorious patentability challenges, by any person who is
`not the patent owner, in an effort to further improve patent quality. H.R. Rep. No.
`112-98, pt. 1, at 85 (2011). Patent Owner does not allege that Petitioner filed a
`non-meritorious patentability challenge.
`
`
`
`
`Alleged clashes with the Federal Circuit
`G.
`Patent Owner argues that “each of [Petitioner’s] proposed rejections rely on
`a view of Kiuchi that clashes with the Federal Circuit’s view of Kiuchi.” Prelim.
`Resp. 17.
`This proposed issue is best resolved during trial to ascertain, for example,
`what the specific determinations or holdings of the Federal Circuit are, the precise
`nature of these determinations or holdings, and how such determinations or
`holdings would affect the present proceeding, given the nature of the specific
`issues that may present themselves during the course of the (as yet to occur) trial.
`For example, Patent Owner argues that the Federal Circuit determined that
`“Kiuchi’s proxy servers at least do not teach ‘direct communication’ between a
`client and target computer.’” Prelim. Resp. 15-16. As an initial matter, we note
`that claim 1, for example, does not recite a “direct communication.” Also, at this
`preliminary stage of the proceeding, Patent Owner has not clearly shown that claim
`1, for example, requires a “direct communication,” as one of ordinary skill in the
`art would have understood, under a broadest reasonable construction in light of the
`Specification or that the Federal Circuit determined that claim 1 requires a “direct
`communication,” under a broadest reasonable construction in light of the
`Specification. Patent Owner does not appear to provide any statement at all
`
`9
`
`
`
`
`
`
`IPR2015-01046
`Patent 6,502,135 B1
`
`
`regarding what standard was used to determine the alleged lack of a “direct
`communication,” even assuming that such a requirement actually exists.
`Also, while Patent Owner argues that the Federal Circuit determined that
`“there was ‘substantial evidence that . . . Kiuchi’s proxy servers at least do not
`teach ‘direct communication’ between a client and target computer’” (Prelim.
`Resp. 15-16), Patent Owner does not indicate what the “substantial evidence” was
`and whether the “substantial evidence” pertained to the determination of a broadest
`reasonable construction of claim terms in light of the Specification, for example.
`Hence, at this early stage of the proceeding, particularly in view of the decision
`from the Federal Circuit, the record lacks necessary evidence to demonstrate
`definitively that Kiuchi, in fact, fails to disclose the features recited in claim 1.
`Patent Owner also argues that the Federal Circuit “explained that . . . there
`was evidence that the ‘client’ of Kiuchi is actually a web browser, a component
`that is distinguishable from the client-side proxy.” Prelim. Resp. 16. As discussed
`previously, Patent Owner does not specify what the alleged “evidence” was,
`whether the alleged “evidence” was considered under a broadest reasonable
`standard in light of the Specification, and under a broadest reasonable standard, the
`relevance of the Federal Circuit’s determination that “Kiuchi is actually a web
`browser” as it pertains to specifically (as yet to be argued) claim limitations.
`
`Alleged excessive burden and redundancy under 35 U.S.C. § 325(d)
`H.
`Patent Owner argues that “[n]either the Board nor Patent Owner should be
`forced to assume the burden of handling duplicative proceedings challenging the
`’135 patent involving a common set of prior art references” such that “the Board
`should exercise its discretion and deny the Petition under 35 U.S.C. § 325(d).”
`Prelim. Resp. 19–20.
`
`10
`
`
`
`
`IPR2015-01046
`Patent 6,502,135 B1
`
`
`
`Notwithstanding Patent Owner’s stated concerns, we determine that, given
`the specific facts of the present proceeding, that institution of this proceeding
`would not pose an excessive burden on the Board or the parties. We decline to
`exercise our discretion to deny the Petition solely under 35 U.S.C. § 325(d) in this
`matter.
`
`
`
`
`Printed publications
`I.
`Patent Owner argues that “Petitioner has . . . failed to meet its burden to
`establish that RFC 1034 is a printed publication.” Prelim. Resp. 26.
`The determination of whether a given reference qualifies as a prior art
`“printed publication” involves a case-by-case inquiry into the facts and
`circumstances surrounding the reference’s disclosure to members of the public. In
`re Klopfenstein, 380 F.3d 1345, 1350 (Fed. Cir. 2004). We acknowledge Patent
`Owner’s argument regarding RFC 1034. On its face, however, RFC 1034 is a
`dated “Request for Comments” from the “Network Working Group,” discussing a
`standard of the Domain Name System (DNS) including an “official protocol” that
`“includes standard queries and their responses and most of the Internet class data
`formats.” Ex. 1005, 1. These indicia suggest that there is a reasonable likelihood
`the document was made available to the public (over the Internet), in order to
`obtain feedback prior to implementation of the standard it describes.
`On this record,1 we are persuaded that Petitioner has made a threshold
`showing that RFC 1034 constitutes a prior art printed publication. Accordingly,
`we consider the disclosure of RFC 1034 for the purposes of this decision.
`
`
`1 To the extent that Patent Owner continues to assert that Petitioner has not met its
`burden of showing that RFC 1034 is a “printed publication,” it will have the
`opportunity to make this argument in its Patent Owner Response.
`11
`
`
`
`
`
`
`
`
`IPR2015-01046
`Patent 6,502,135 B1
`
`
`III. CONCLUSION
`We institute an inter partes review of claims 1, 3, 4, 7, 8, 10, and 12 under
`35 U.S.C. § 102 as anticipated by Kiuchi and claim 8 under 35 U.S.C. § 103 as
`obvious over the combination of Kiuchi and RFC 1034.
`
`IV. ORDER
`For the reasons given, it is
`ORDERED that an inter partes review is instituted as to claims 1, 3, 4, 7, 8,
`
`10, and 12 on the ground of anticipation by Kiuchi, and as to claim 8 on the ground
`of obviousness in view of Kiuchi and RFC 1034;
`FURTHER ORDERED that pursuant to 35 U.S.C. § 314(a), inter partes
`
`review of the ’135 Patent is hereby instituted commencing on the entry date of this
`Order, and pursuant to 35 U.S.C. § 314(c) and 37 C.F.R. § 42.4, notice is hereby
`given of the institution of a trial.
`
`FURTHER ORDERED that the trial is limited to the grounds stated above.
`
`
`
`
`
`12
`
`
`
`
`
`
`
`
`
`
`IPR2015-01046
`Patent 6,502,135 B1
`
`For PETITIONER:
`Abraham Kasdan
`James T. Bailey
`WIGGIN AND DANA LLP
`akasdan@wiggin.com
`jtb@jtbaileylaw.com
`
`For PATENT OWNER:
`
`Joseph E. Palys
`Naveen Modi
`PAUL HASTINGS LLP
`josephpalys@paulhastings.com
`naveenmodi@paulhastings.com
`
`13
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
