UNITED STATES PATENT AND TRADEMARK OFFICE
`
`––––––––––––––––––
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`––––––––––––––––––
`
`THE MANGROVE PARTNERS MASTER FUND, LTD., and APPLE INC., and
`BLACK SWAMP IP, LLC,
`Petitioners,
`
`v.
`
`VIRNETX INC.,
`Patent Owner.
`
`––––––––––––––––––
`
`Case No. IPR2015-010471
`U.S. Patent No. 7,490,151
`
`––––––––––––––––––
`
`PETITIONERS’ REPLY TO
`PATENT OWNER’S OPPOSITION TO MOTION TO EXCLUDE
`
`
`
`1 Apple Inc. and Black Swamp IP, LLC, who filed a petitions in IPR2016-00063
`and IPR2016-00167, respectively, have been joined as a Petitioner in the instant
`proceeding.
`
`
`
`
`––––––––––––––––––
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`––––––––––––––––––
`
`THE MANGROVE PARTNERS MASTER FUND, LTD., and APPLE INC., and
`BLACK SWAMP IP, LLC,
`Petitioners,
`
`v.
`
`VIRNETX INC.,
`Patent Owner.
`
`––––––––––––––––––
`
`Case No. IPR2015-010471
`U.S. Patent No. 7,490,151
`
`––––––––––––––––––
`
`PETITIONERS’ REPLY TO
`PATENT OWNER’S OPPOSITION TO MOTION TO EXCLUDE
`
`
`
`1 Apple Inc. and Black Swamp IP, LLC, who filed a petitions in IPR2016-00063
`and IPR2016-00167, respectively, have been joined as a Petitioner in the instant
`proceeding.
`
`
`
`
`IPR2015-01047
`
`
`
`Petitioners’ Reply to Mot. to Exclude
`
`Table of Contents
`
`I.
`
`II.
`
`Introduction ...................................................................................................... 1
`
`Argument ......................................................................................................... 1
`
`A.
`
`B.
`
`Exhibit 2050 Lacks Circumstantial Guarantees of Trustworthiness. .... 1
`
`Exhibit 2050 Is Not More Probative Than Any Other Evidence That
`Could be Reasonably Obtained. ............................................................ 4
`
`C.
`
`Attachments B-1 to B-5 of Exhibit 2050 are Inadmissible. .................. 5
`
`III. Conclusion ....................................................................................................... 5
`
`
`
`
`
`
`
`i
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`IPR2015-01047
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`
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`Petitioners’ Reply to Mot. to Exclude
`
`TABLE OF AUTHORITIES
`
`Cases
`
`Page(s)
`
`Bohler-Uddeholm Am., Inc. v. Ellwood Grp., Inc.,
`247 F.3d 79 (3d Cir. 2001) ................................................................................... 1
`
`Holmquist v. Farm Family Cas. Ins. Co.,
`800 F.Supp.2d 305 (D. Me. 2011) ........................................................................ 3
`
`ID Sec. Sys. Canada, Inc. v. Checkpoint Sys., Inc.,
`198 F. Supp. 2d 598 (E.D. Pa. 2002) .................................................................... 2
`
`Kirk v. Raymark Indus.,
`61F.3d 147, 168 (3d Cir. 1995) ............................................................................ 3
`
`LG Elecs. v. Whirlpool Corp.,
`No. 08 C 242, 2010 WL 3829644 (N.D. Ill. Sept. 27, 2010) ............................... 3
`
`Partido Revolucionario Dominicano (PRD) Seccional Metropolitana
`de Wash.-DC, Md. y Va. v. Partido Revolucionario Dominicano,
`Seccional de Md. y Va.,
`311 F. Supp. 2d 14 (D.D.C. 2004) ........................................................................ 5
`
`Schoolcraft Mem’l Hosp. v. Mich. Dep’t of Cmty. Health,
`570 F. Supp. 2d 949 (W.D. Mich. 2008) .............................................................. 4
`
`Tele Atlas N.V. v. NAVTEQ Corp.,
`No. C-05-01673 RMW, 2008 WL 4809441 (N.D. Cal. Oct. 28,
`2008) ..................................................................................................................... 2
`
`Other Authorities
`
`Fed. R. Evid. 803(17) ................................................................................................. 4
`
`Fed. R. Evid. 807 ..............................................................................................passim
`
`Fed. R. Civ. P. 32(a)(8) .............................................................................................. 4
`
`
`
`
`
`ii
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`
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`IPR2015-01047
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`Petitioners’ Reply to Mot. to Exclude
`
`Exhibit List
`
`1003
`1004
`1005
`
`1006
`1007
`1008
`1009
`
`1010
`
`1011
`
`Exhibit # Reference Name
`1001
`U.S. Patent No. 6,502,135 to Munger
`1002
`Takahiro Kiuchi and Shigekoto Kaihara, “C-HTTP - The
`Development of a Secure, Closed HTTP-based Network on the
`Internet,” published by IEEE in the Proceedings of SNDSS 1996
`Declaration of Dr. Roch Guerin
`[RESERVED]
`Mockapetris, P., RFC 1034, “Domain Names–Concepts and
`Facilities,” Nov. 1997
`[RESERVED]
`Patent Owner’s Preliminary Response, Paper 7, in IPR2014-00610
`Excerpts from Webster’s Third New International Dictionary (1971)
`VirnetX’s Reply Claim Construction Brief in VirnetX Inc. v. Cisco
`Systems, Inc. et al., 6:10-cv-417 (Dec. 19, 2011) (E.D. Tex.)
`Bradner, S., RFC 2026, “The Internet Standards Process – Revision
`3,” Oct. 1996
`Decision to Institute Inter Partes Review, Paper 9, in IPR2014- 00610
`(Oct. 15, 2014)
`[RESERVED]
`[RESERVED]
`Berners-Lee et al., RFC 1945, “Hypertext Transfer Protocol --
`HTTP/1.0,” May 1996
`Patent Owner’s Preliminary Response, Paper 10, in IPR2013- 00348
`Eastlake, D., RFC 2535, “Domain Name System Security
`Extensions,” Mar. 1999
`Patent Owner’s Comments in Response to Examiner’s Determination
`in Inter Partes Reexamination 95/001,792 (March, 11, 2015)
`VirnetX’s Opening Claim Construction Brief in VirnetX Inc. v. Cisco
`Systems, Inc. et al., 6:10-cv-417 (Dec. 19, 2011) (E.D. Tex.)
`Memorandum Opinion and Order in VirnetX Inc. v. Cisco Systems,
`iii
`
`1012
`1013
`1014
`
`1015
`1016
`
`1017
`
`1018
`
`1019
`
`
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`IPR2015-01047
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`
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`Petitioners’ Reply to Mot. to Exclude
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`1020
`1021
`1022
`
`1023
`1024
`1025
`1026
`
`1027
`1028
`
`1029
`
`Exhibit # Reference Name
`Inc. et al., 6:10-cv-417 (April 25, 2012) (E.D. Tex.)
`Petition for Inter Partes Review in IPR2013-00349
`Patent Owner’s Preliminary Response, Paper 11, in IPR2014- 00558
`Decision to Institute Inter Partes Review, Paper 15, in IPR2014-
`00237
`“Glossary for the Linux FreeS/WAN project,” (Feb. 21, 2002)
`[RESERVED]
`Declaration of Dr. Roch Guerin in IPR2014-00401
`Petitioner’s Proposed Revisions of Patent Owner’s Requests for
`Production
`Petitioner’s Proposed Revisions of Patent Owner’s Interrogatories
`Declaration of Scott M. Border in Support of Petitioner Apple’s
`Motion for Pro Hac Vice Admission
`Declaration of Sandy Ginoza on behalf of the RFC Publisher for the
`Internet Engineering Task Force, dated January 23, 2013, submitted in
`Investigation No. 337-TA-858
`Mockapetris, P., RFC 1034, “Domain Names – Concepts and
`Facilities,” bearing Bates Nos. 337-TA-858-IETF00022 through
`00073
`Transcript of Feb. 8, 2013 deposition of Sandy Ginoza, ITC Inv. No.
`337-TA-858
`The Reality of Virtual Private Networks, InfoWorld, Aug. 16, 1999
`(Advertising Supplement)
`Gibbs, M., IP Security: Keeping Your Business Private, Network
`World (March 15, 1999)
`Proposed Protective Order
`[RESERVED]
`Deposition Transcript of Dr. Fabian Monrose (April 28, 2016)
`Malkin, G., RFC 1983, “Internet Users’ Glossary,” Aug. 1996
`Plaintiff VirnetX Inc.’s Opening Brief in Support of its Constructions
`
`1030
`
`1031
`
`1032
`
`1033
`
`1034
`1035
`1036
`1037
`1038
`
`iv
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`IPR2015-01047
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`Petitioners’ Reply to Mot. to Exclude
`
`Exhibit # Reference Name
`of Claims Pursuant to P.R. 4-5, VirnetX Inc. v. Microsoft Corp., Case
`No. 6:07-cv-00080-LED, ECF No. 194 (E.D. Tex. Dec. 30, 2008).
`Guerin, R., RFC 2676, “QoS Routing Mechanisms and OSPF
`Extensions,” Aug. 1999
`Guerin, R., Internet Draft, “QoS Routing Mechanisms and OSPF
`Extensions,” Nov. 5, 1996, draft-guerin-qos-routing-ospf-00.txt
`Huitema, C., RFC 1602, The Internet Standards Process – Revision 2,
`Mar. 1994
`Chapin, L., RFC 1310, The Internet Standards Process, Mar. 1992
`Microsoft Computer Dictionary (4th Ed. 1999)
`Transcript of Trial, November 1, 2012 Afternoon Session, VirnetX
`Inc. v. Apple Inc., Case No. 6:07-cv-00417-RWS, ECF No. 612 (E.D.
`Tex. Nov. 9, 2012)
`E-mail exchange regarding request for Dr. Short’s deposition between
`Counsel for Petitioners and Counsel for Patent Owner from March 25,
`2016 to April 11, 2016.
`
`1045
`[NEW]
`
`v
`
`
`
`
`
`1039
`
`1040
`
`1041
`
`1042
`1043
`1044
`
`
`
`IPR2015-01047
`
`I.
`
`Introduction
`
`
`
`Petitioners’ Reply to Mot. to Exclude
`
`The evidence of record establishes that Exhibit 2050 is inadmissible hearsay.
`
`Therefore, the Board should grant Petitioners’ motion to exclude Exhibit 2050.
`
`II. Argument
`
`Patent Owner does not dispute that Exhibit 2050, the declaration of Dr.
`
`Short from a reexamination proceeding four years ago, which Patent Owner relies
`
`on to establish secondary considerations, is hearsay. Paper 69 (“Opp.”) at 1.
`
`Rather, Patent Owner argues that Exhibit 2050 should be admissible under Federal
`
`Rule of Evidence 807 (“Rule 807”) for the same reasons that Petitioners argue
`
`Exhibits 1029 and 1031-1033 should be admissible. Opp., 1-4. But, Exhibit 2050
`
`differs from Petitioners’ exhibits in several key respects that render it inadmissible.
`
`A. Exhibit 2050 Lacks Circumstantial Guarantees of
`Trustworthiness.
`
`Exhibit 2050 lacks the “circumstantial guarantees of trustworthiness”
`
`required to be admitted under Rule 807. Fed. R. Evid. 807(a)(1).
`
`First, Dr. Short was Patent Owner’s Chief Technology Officer at the time he
`
`executed Exhibit 2050, is a named inventor on the ’151 patent, and had a financial
`
`interest in the outcome of the reexamination proceeding for which he prepared the
`
`declaration. Ex. 2050, ¶¶1-2. His inherent bias as an employee and named
`
`inventor render his testimony about commercial success and industry praise
`
`untrustworthy. See, e.g., Bohler-Uddeholm Am., Inc. v. Ellwood Grp., Inc., 247
`
`1
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`IPR2015-01047
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`Petitioners’ Reply to Mot. to Exclude
`
`F.3d 79, 113 (3d Cir. 2001) (considering affidavit trustworthy under Rule 807 if
`
`“the declarant was not employed by the plaintiff at the time of the statements”);
`
`Tele Atlas N.V. v. NAVTEQ Corp., No. C-05-01673 RMW, 2008 WL 4809441, at
`
`*5 (N.D. Cal. Oct. 28, 2008) (“the trustworthiness of the statements is questionable
`
`since they are offered through an employee of the party who has an interest in the
`
`contents of the statements”); ID Sec. Sys. Canada, Inc. v. Checkpoint Sys., Inc.,
`
`198 F. Supp. 2d 598, 626 (E.D. Pa. 2002) (affidavit of president and member of
`
`Board of Directors of party untrustworthy because declarant “was employed by the
`
`party on whose behalf he filed the affidavits and therefore had a ‘financial interest’
`
`in the outcome of the case”). For this reason alone, Exhibit 2050 is inadmissible.
`
`In contrast, Ms. Ginoza, the declarant in Exhibits 1029 and 1031, is a third
`
`party representative who does not have a financial interest in the litigation between
`
`Apple and Patent Owner and has no motivation to lie. Her declaration addresses a
`
`straightforward factual issue—the publication practices of the IETF—that has no
`
`bearing on the IETF’s finances or her own.
`
`Second, Petitioners requested to take Dr. Short’s deposition, but Patent
`
`Owner refused to make him available, even though he currently is employed with
`
`Patent Owner. See Paper 64 at 2; Ex. 2060, 4:7-23, 5:20-6:16; Ex. 1045 at 6. The
`
`lack of a previous opportunity to cross-examine a declarant can weigh heavily in
`
`analyzing the circumstantial guarantees of trustworthiness because admitting
`
`2
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`IPR2015-01047
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`Petitioners’ Reply to Mot. to Exclude
`
`evidence without the opportunity for cross-examination “implicates many of the
`
`dangers the hearsay rule is designed to prevent.” Kirk v. Raymark Indus., 61F.3d
`
`147, 168 (3d Cir. 1995); see LG Elecs. v. Whirlpool Corp., No. 08 C 242, 2010
`
`WL 3829644, at *3 (N.D. Ill. Sept. 27, 2010) (declaration inadmissible under Rule
`
`807 because declarant “was not subject to cross examination when he made the
`
`declaration”); see also Ex. 2060 at 9:4-7, 19:17-20 (“little or no weight may be
`
`given to a declaration where cross-examination was not provided”).
`
`Dr. Short was never cross-examined on the topics in his declaration in the
`
`reexamination proceeding. Patent Owner attempts to bootstrap prior trial
`
`testimony by Dr. Short in an earlier litigation between Apple and Patent Owner to
`
`justify admitting Exhibit 2050, but the cross-examination testimony does not
`
`address secondary considerations—the topic of his declaration—because Apple
`
`only advanced an anticipation theory at trial. Opp., 2; see Holmquist v. Farm
`
`Family Cas. Ins. Co., 800 F.Supp.2d 305, 311 (D. Me. 2011) (refusing to admit
`
`prior testimony because “he did not face cross-examination on the very issues now
`
`most relevant”). Moreover, neither of the other Petitioners—Mangrove Partners
`
`Masterfund and Black Swamp IP—were parties to the prior litigation and thus
`
`neither had the opportunity to cross-examine Dr. Short. Ex. 2060, 16:16-17:10.
`
`Patent Owner asserts that Apple cross-examined Dr. Short about secondary
`
`considerations and his reexamination declaration during a deposition in the
`
`3
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`IPR2015-01047
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`Petitioners’ Reply to Mot. to Exclude
`
`litigation. Ex. 1045 at 8. Petitioners requested Patent Owner to produce that
`
`transcript, which Patent Owner marked under the protective order in the litigation,
`
`but Patent Owner refused to do so and instead provided Petitioners with Dr.
`
`Short’s public record trial testimony. Id. at 2-7. The lack of cross-examination of
`
`Dr. Short on the relevant statements in his declaration suffices to exclude Exhibit
`
`2050. See Schoolcraft Mem’l Hosp. v. Mich. Dep’t of Cmty. Health, 570 F. Supp.
`
`2d 949, 963 n.10 (W.D. Mich. 2008) (“there will be no opportunity… to cross-
`
`examine [Mr. Daly]. This alone is sufficient reason to exclude [his] letters”).
`
`In contrast, Patent Owner cross-examined Ms. Ginoza on the declaration that
`
`was filed in this proceeding, and Petitioner’s submitted that testimony (Ex. 1031).
`
`In fact, Patent Owner has relied on that testimony in its Response, see Resp., 43-
`
`44, and its motion to exclude, Paper 66. Where the opponent has had the
`
`opportunity to cross-examine the declarant, such testimony is widely regarded as
`
`trustworthy and admissible. See Fed. R. Civ. P. 32(a)(8) (a “Deposition Taken in
`
`an Earlier Action… may be used in a later action involving the same subject matter
`
`between the same parties… to the same extent as if taken in the later action.”).
`
`Thus, unlike Ms. Ginoza’s testimony, Dr. Short’s testimony in exhibit 2050 lacks
`
`the circumstantial guarantees of trustworthiness required by Rule 807(a)(1).
`
`B.
`
`Exhibit 2050 Is Not More Probative Than Any Other Evidence
`That Could be Reasonably Obtained.
`
`Rule 807(a) also requires that Exhibit 2050 be “more probative on the point
`4
`
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`IPR2015-01047
`
`
`
`Petitioners’ Reply to Mot. to Exclude
`
`for which it is offered than any other evidence that a proponent can obtain through
`
`reasonable efforts.” Fed. R. Evid. 807(a)(3). Here, a declaration from Dr. Short in
`
`this proceeding and a deposition would have been more probative than a
`
`declaration from a prior reexamination proceeding; both could have been obtained
`
`through reasonable efforts by Patent Owner, who is Dr. Short’s employer. Patent
`
`Owner simply refused to do so. See Ex. 1045, 2-7. Because Patent Owner could
`
`have easily obtained more probative evidence, Exhibit 2050 is inadmissible.
`
`Partido Revolucionario Dominicano (PRD) Seccional Metropolitana de Wash.-
`
`DC, Md. y Va. v. Partido Revolucionario Dominicano, Seccional de Md. y Va., 311
`
`F. Supp. 2d 14, 20 (D.D.C. 2004) (without providing a justification for withholding
`
`or evidence of unavailability of the witness or offering the witness for deposition
`
`so he could be cross examined “the residual exception cannot be invoked”).
`
`C. Attachments B-1 to B-5 of Exhibit 2050 are Inadmissible.
`
`These attachments are inadmissible because the declaration is inadmissible,
`
`and they do not corroborate Dr. Short’s testimony. The attachments are vague and
`
`do not stand for the propositions that Dr. Short and Patent Owner attribute to them.
`
`III. Conclusion
`
`For the foregoing reasons, the Board should grant Petitioners’ Motion.
`
`
`
`
`
`5
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`IPR2015-01047
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`
`
`Petitioners’ Reply to Mot. to Exclude
`
`
`
`Dated: June 20, 2016
`
`/Jeffrey P. Kushan/
`Jeffrey P. Kushan
`Reg. No. 43,401
`Sidley Austin LLP
`Attorney for Petitioner Apple
`
`/Thomas H. Martin/
`Thomas H. Martin
`Reg. No. 34,383
`MARTIN & FERRARO, LLP
`Attorney for Petitioner Black Swamp
`
`Respectfully Submitted,
`
`/Abraham Kasdan/
`Abraham Kasdan
`Reg. No. 32,997
`Wiggin & Dana LLP
`
`James T. Bailey
`Reg. No. 44,518
`The Law Office of James. T. Bailey
`Attorneys for Petitioner Mangrove
`
`6
`
`
`
`IPR2015-01047
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`
`
`Petitioners’ Reply to Mot. to Exclude
`
`CERTIFICATE OF SERVICE
`
`Pursuant to 37 C.F.R. § 42.6(e), I hereby certify that on this 20th day of
`
`June, 2016, I caused to be served a true and correct copy of the foregoing brief and
`
`of Exhibit 1045 by e-mail on the following counsel:
`
`Joseph E. Palys
`E-mail: josephpalys@paulhastings.com
`
`Naveen Modi
`E-mail: naveenmodi@paulhastings.com
`
`
`
`
`
`
`Dated: June 20, 2016
`
`/Jeffrey P. Kushan/
`Jeffrey P. Kushan
`Reg. No. 43,401
`Sidley Austin LLP
`Attorney for Petitioner Apple
`
`/Thomas H. Martin/
`Thomas H. Martin
`Reg. No. 34,383
`MARTIN & FERRARO, LLP
`Attorney for Petitioner Black Swamp
`
`
`Respectfully Submitted,
`
`/Abraham Kasdan/
`Abraham Kasdan
`Reg. No. 32,997
`Wiggin & Dana LLP
`
`James T. Bailey
`Reg. No. 44,518
`The Law Office of James. T. Bailey
`Attorneys for Petitioner Mangrove
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