Case 6:10-cv-00417-LED Document 257 Filed 04/16/12 Page 1 of 25 PageID #: 7476
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TYLER DIVISION
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`§
`§
`§
`§
`§
`§
`§
`§ JURY TRIAL DEMANDED
`§
`
`Case No. 6:10-cv-417
`
`
`
`
`DEFENDANT APPLE INC.’S ORIGINAL ANSWER, AFFIRMATIVE DEFENSES, AND
`COUNTERCLAIMS TO PLAINTIFF’S THIRD AMENDED COMPLAINT
`
`Defendant Apple Inc. (“Apple”) files this Original Answer, Affirmative Defenses and
`
`Counterclaims
`
`to Plaintiff’s Third Amended Complaint for Patent Infringement (the
`
`“Complaint”) filed by VirnetX Inc. (“VirnetX”) and Science Applications International
`
`Corporation (“SAIC”).
`
`I.
`
`ANSWER
`
`THE PARTIES
`
`
`
`1. - 3. Apple is without sufficient information or knowledge to either admit or deny the
`
`allegations in paragraphs 1 - 3 and therefore denies the same.
`
`
`
`4.
`
`Apple admits that it is a California corporation organized and existing under the
`
`laws of California, with its principal place of business at One Infinite Loop, Cupertino,
`
`California 95014. Apple admits that it has conducted business in this district. Apple denies all
`
`other allegations contained in paragraph 4 of the Complaint.
`
`
`
`
`
`VirnetX Inc.
`
`
`
`
`
`
`Plaintiff,
`
`
`
`
`
`vs.
`
`
`
`
`
`
`Cisco Systems, Inc., et al.,
`
`
`
`
`
`Defendants.
`
`
`
`Page 1 of 25
`
`
`
`VIRNETX EXHIBIT 2003
`Apple v. VirnetX
`Trial IPR2016-00062
`
`

`
`Case 6:10-cv-00417-LED Document 257 Filed 04/16/12 Page 2 of 25 PageID #: 7477
`
`5. - 6. Apple is without sufficient information or knowledge to either admit or deny the
`
`allegations in paragraphs 5 and 6 and therefore denies the same.
`
`JURISDICTION AND VENUE
`
`
`
`7.
`
`Apple admits that VirnetX alleges a civil action for patent infringement under the
`
`laws of the United States, Title 35 United States Code §§ 101, et seq. Apple admits that this
`
`Court has subject matter jurisdiction over VirnetX’s claims for patent infringement. Apple
`
`denies all other allegations contained in paragraph 7 of the Complaint.
`
`
`
`8.
`
`To the extent the allegations in paragraph 8 relate to Apple, Apple admits that
`
`venue is proper in this Court, but Apple denies that this judicial district is the most convenient
`
`forum for this case. Apple denies all other allegations in this paragraph to the extent such
`
`allegations relate to Apple. To the extent the allegations in paragraph 8 relate to the other
`
`Defendants in this case, Apple is without sufficient information or knowledge to either admit or
`
`deny the allegations and therefore denies the same.
`
`
`
`9.
`
` To the extent the allegations in paragraph 9 relate to Apple, Apple admits that
`
`this Court has personal jurisdiction over Apple. Apple admits that it has conducted business in
`
`the State of Texas. Apple admits that it has and does sell products and provide services to
`
`persons within the State of Texas and this District, but it denies that it has committed any acts of
`
`infringement within this District or the State of Texas, and specifically denies any wrongdoing,
`
`infringement, inducement of infringement, or contribution to infringement. Apple denies all
`
`other allegations in this paragraph to the extent such allegations relate to Apple. To the extent
`
`the allegations in paragraph 9 relate to the other Defendants in this case, Apple is without
`
`sufficient information or knowledge to either admit or deny the allegations and therefore denies
`
`the same.
`
`
`
`2
`
`Page 2 of 25
`
`

`
`Case 6:10-cv-00417-LED Document 257 Filed 04/16/12 Page 3 of 25 PageID #: 7478
`
`ASSERTED PATENTS
`
`
`
`10.
`
`Apple admits that, according to the face of the patent, United States Patent No.
`
`6,502,135 (“the ‘135 patent”) is entitled “Agile Network Protocol for Secure Communications
`
`with Assured System Availability” and reflects an issue date of December 31, 2002. Apple
`
`admits that Edmund Colby Munger, Douglas Charles Schmidt, Robert Dunham Short, III, Victor
`
`Larson, and Michael Williamson are listed as inventors on the face of the patent. Apple admits
`
`that what appears to be a copy of the ‘135 patent is attached as Exhibit A to the Complaint.
`
`Apple denies all other allegations contained in paragraph 10 of the Complaint.
`
`
`
`11.
`
`Apple admits that, according to the face of the patent, United States Patent No.
`
`6,839,759 (“the ‘759 patent”) is entitled “Method for Establishing Secure Communication Link
`
`Between Computers of Virtual Private Network Without User Entering Any Cryptographic
`
`Information” and reflects an issue date of January 4, 2005. Apple admits that Victor Larson,
`
`Robert Dunham Short, III, Edmund Colby Munger, and Michael Williamson are listed as
`
`inventors on the face of the patent. Apple admits that what appears to be a copy of the ‘759
`
`patent is attached as Exhibit B to the Complaint. Apple denies all other allegations contained in
`
`paragraph 11 of the Complaint.
`
`
`
`12. Apple admits that, according to the face of the patent, United States Patent No.
`
`7,188,180 (“the ‘180 patent”) is entitled “Method for Establishing Secure Communication Link
`
`Between Computers of Virtual Private Network” and reflects an issue date of March 6, 2007.
`
`Apple admits that Victor Larson, Robert Dunham Short, III, Edmund Colby Munger, and
`
`Michael Williamson are listed as inventors on the face of the patent. Apple admits that what
`
`appears to be a copy of the ‘180 patent is attached as Exhibit C to the Complaint. Apple denies
`
`all other allegations contained in paragraph 12 of the Complaint.
`
`
`
`3
`
`Page 3 of 25
`
`

`
`Case 6:10-cv-00417-LED Document 257 Filed 04/16/12 Page 4 of 25 PageID #: 7479
`
`
`
`13.
`
`Apple admits that, according to the face of the patent, United States Patent No.
`
`7,418,504 (“the ‘504 patent”) is entitled “Agile Network Protocol for Secure Communications
`
`Using Secure Domain Names” and reflects an issue date of August 26, 2008. Apple admits that
`
`Victor Larson, Robert Dunham Short, III, Edmund Colby Munger, and Michael Williamson are
`
`listed as inventors on the face of the patent. Apple admits that what appears to be a copy of the
`
`‘504 patent is attached as Exhibit D to the Complaint. Apple denies all other allegations
`
`contained in paragraph 13 of the Complaint.
`
`
`
`14.
`
`Apple admits that, according to the face of the patent, United States Patent No.
`
`7,490,151 (“the ‘151 patent”) is entitled “Establishment of a Secure Communication Link Based
`
`on a Domain Name Service (DNS) Request” and reflects an issue date of February 10, 2009.
`
`Apple admits that Edmund Colby Munger, Robert Dunham Short, III, Victor Larson, and
`
`Michael Williamson are listed as inventors on the face of the patent. Apple admits that what
`
`appears to be a copy of the ‘151 patent is attached as Exhibit E to the Complaint. Apple denies
`
`all other allegations contained in paragraph 14 of the Complaint.
`
`
`
`15.
`
`Apple admits that, according to the face of the patent, United States Patent No.
`
`7,921,211 (“the ‘211 patent”) is entitled “Agile Network Protocol for Secure Communications
`
`Using Secure Domain Names” and reflects an issue date of April 5, 2011. Apple admits that
`
`Edmund Colby Munger, Robert Dunham Short, III, Victor Larson, and Michael Williamson are
`
`listed as inventors on the face of the patent. Apple admits that what appears to be a copy of the
`
`‘211 patent is attached as Exhibit F to the Complaint. Apple denies all other allegations
`
`contained in paragraph 15 of the Complaint.
`
`COUNT ONE
`
`ALLEGED PATENT INFRINGEMENT BY AASTRA
`
`
`
`4
`
`Page 4 of 25
`
`

`
`Case 6:10-cv-00417-LED Document 257 Filed 04/16/12 Page 5 of 25 PageID #: 7480
`
`
`
`16.
`
`Apple incorporates by reference paragraphs 1-15 above as if fully set forth herein.
`
`Apple is without sufficient information or knowledge to either admit or deny the allegations in
`
`paragraph 16 regarding Aastra and the ‘135, ‘504, and ‘211 patents and therefore denies the
`
`same.
`
`
`
`16. – 36. Apple is without sufficient information or knowledge to either admit or deny
`
`the allegations in paragraphs 16-36 and therefore denies the same.
`
`COUNT TWO
`
`ALLEGED PATENT INFRINGEMENT BY APPLE
`
`
`
`37.
`
`Apple incorporates by reference paragraphs 1-36 above as if fully set forth herein.
`
`Apple denies that it has infringed or continues to infringe the ‘135, ‘151, ‘504, or ‘211 patents.
`
`
`
`
`
`
`
`38.
`
`39.
`
`40.
`
`Denied.
`
`Denied.
`
`Apple admits that it provides or has provided the iPhone, iPhone 3G, iPhone 3GS,
`
`iPhone 4, iPod touch, iPad, and iPad 2 to others in the United States. Apple denies that these or
`
`any other Apple products infringe any asserted claims of the ‘135 patent. Apple further denies
`
`all other allegations contained in paragraph 40 of the Complaint.
`
`
`
`
`
`
`
`41.
`
`42.
`
`43.
`
`Denied.
`
`Denied.
`
`Apple admits that it makes or has made, uses or used, sells or sold, offers for sale
`
`or offered for sale, imports or imported, exports or exported, supplies or supplied, and/or
`
`distributes or distributed within and from the United States the iPhone, iPhone 3G, iPhone 3GS,
`
`iPhone 4, iPod touch, iPad and iPad 2, but it denies that these or any other Apple products
`
`
`
`5
`
`Page 5 of 25
`
`

`
`Case 6:10-cv-00417-LED Document 257 Filed 04/16/12 Page 6 of 25 PageID #: 7481
`
`infringe any asserted claims of the ‘151 patent. Apple further denies all other allegations
`
`contained in paragraph 43 of the Complaint.
`
`
`
`44.
`
`Apple admits that it makes or has made, uses or used, sells or sold, offers for sale
`
`or offered for sale, imports or imported, exports or exported, supplies or supplied, and/or
`
`distributes or distributed within and from the United States the iPhone, iPhone 3G, iPhone 3GS,
`
`iPhone 4, iPod touch, iPad, and iPad 2, but it denies that these or any other Apple products
`
`infringe any asserted claims of the ‘151 patent. It is not clear what is referenced by “Apple’s
`
`servers, master discs, and other media that store, cache, or distribute iPhone OS.” As such,
`
`Apple denies allegations in paragraph 44 regarding the foregoing statement. Apple further
`
`denies all other allegations contained in paragraph 44 of the Complaint.
`
`
`
`45.
`
`Apple admits that it provides or has provided the iPhone, iPhone 3G, iPhone 3GS,
`
`iPhone 4, iPod touch, iPad, and iPad 2 to others in the United States. Apple denies that these or
`
`any other Apple products infringe any asserted claims of the ‘151 patent. It is not clear what is
`
`referenced by “media that store, cache, or distribute iPhone OS.” As such, Apple denies
`
`allegations in paragraph 45 regarding the foregoing statement. Apple further denies all other
`
`allegations contained in paragraph 45 of the Complaint.
`
`
`
`
`
`
`
`
`
`46.
`
`47.
`
`48.
`
`49.
`
`Denied.
`
`Denied.
`
`Denied.
`
`Apple admits that it makes or has made, uses or used, sells or sold, offers for sale
`
`or offered for sale, imports or imported, exports or exported, supplies or supplied, and/or
`
`distributes or distributed within and from the United States the iPhone 4, iPod touch, iPad 2, and
`
`Apple computers, but it denies that these or any other Apple products infringe any asserted
`
`
`
`6
`
`Page 6 of 25
`
`

`
`Case 6:10-cv-00417-LED Document 257 Filed 04/16/12 Page 7 of 25 PageID #: 7482
`
`claims of the ‘504 patent. It is not clear what is referenced by “Apple’s servers, master discs,
`
`and other media that store, cache, or distribute iPhone OS.” As such, Apple denies the same.
`
`Apple further denies all other allegations contained in paragraph 49 of the Complaint.
`
`
`
`
`
`50.
`
`51.
`
`Denied.
`
`Apple admits that it provides or has provided the iPhone 4, iPod touch, iPad 2,
`
`and Apple computers to others in the United States. Apple denies that these or any other Apple
`
`products infringe any asserted claims of the ‘504 patent. Apple further denies all other
`
`allegations contained in paragraph 51 of the Complaint.
`
`
`
`
`
`
`
`
`
`52.
`
`53.
`
`54.
`
`55.
`
`Denied.
`
`Denied.
`
`Denied.
`
`Apple admits that it makes or has made, uses or used, sells or sold, offers for sale
`
`or offered for sale, imports or imported, exports or exported, supplies or supplied, and/or
`
`distributes or distributed within and from the United States the iPhone 4, iPod touch, iPad 2, and
`
`Apple computers, but it denies that these or any other Apple products infringe any asserted
`
`claims of the ‘151 patent. It is not clear what is referenced by “Apple’s servers, master discs,
`
`and other media that store, cache, or distribute iPhone OS.” As such, Apple denies allegations in
`
`paragraph 55 regarding the foregoing statement. Apple further denies all other allegations
`
`contained in paragraph 55 of the Complaint.
`
`
`
`
`
`56.
`
`57.
`
`Denied.
`
`
`
`Apple admits that it provides or has provided the iPhone 4, iPod touch, iPad 2,
`
`and Apple computers to others in the United States. Apple denies that these or any other Apple
`
`products infringe any asserted claims of the ‘211 patent. It is not clear what is referenced by
`
`
`
`7
`
`Page 7 of 25
`
`

`
`Case 6:10-cv-00417-LED Document 257 Filed 04/16/12 Page 8 of 25 PageID #: 7483
`
`“media that store, cache, or distribute iPhone OS.” As such, Apple denies allegations in
`
`paragraph 57 regarding the foregoing statement. Apple further denies all other allegations
`
`contained in paragraph 57 of the Complaint.
`
`
`
`
`
`
`
`
`
`
`
`58.
`
`Denied.
`
`59. Denied.
`
`60.
`
`61.
`
`62.
`
`Denied.
`
`Denied.
`
`Apple admits that it received notice of infringement after the filing of this lawsuit
`
`but denies that any Apple products infringe the ‘135 ,‘151, ‘504, or ‘211 patents. Apple further
`
`denies all other allegations contained in paragraph 62 of the Complaint.
`
`COUNT THREE
`
`ALLEGED PATENT INFRINGEMENT BY CISCO
`
`
`
`63.
`
`Apple incorporates by reference paragraphs 1-62 above as if fully set forth herein.
`
`Apple is without sufficient information or knowledge to either admit or deny the allegations in
`
`paragraph 63 regarding Cisco and the ‘135, ‘759, ‘180, ‘504, ‘211, and ‘151 patents and
`
`therefore denies the same.
`
`
`
`64. – 100. Apple is without sufficient information or knowledge to either admit or deny
`
`the allegations in paragraphs 64 - 100 and therefore denies the same.
`
`COUNT THREE
`
`ALLEGED PATENT INFRINGEMENT BY NEC
`
`
`
`101. Apple incorporates by reference paragraphs 1 - 100 above as if fully set forth
`
`herein. Apple is without sufficient information or knowledge to either admit or deny the
`
`
`
`8
`
`Page 8 of 25
`
`

`
`Case 6:10-cv-00417-LED Document 257 Filed 04/16/12 Page 9 of 25 PageID #: 7484
`
`allegations in paragraph 101 regarding NEC and the ‘135, ‘504, and ‘211 patents and therefore
`
`denies the same.
`
`
`
`102. - 121. Apple is without sufficient information or knowledge to either admit or deny
`
`the allegations in paragraphs 102 - 121 and therefore denies the same.
`
`DEMAND FOR JURY TRIAL
`
`Apple also demands a trial by jury.
`
`PRAYER FOR RELIEF
`
`Apple opposes VirnetX’s requested relief against Apple or any other relief VirnetX
`
`requests against Apple, including those specified in paragraphs 1-19 of this Section of the
`
`Complaint.
`
`DENIAL OF ANY REMAINING ALLEGATIONS
`
`
`
`Except as specifically admitted herein, Apple denies any remaining allegations in the
`
`Complaint that are directed at Apple.
`
`II.
`
`AFFIRMATIVE DEFENSES
`
`Apple asserts the following Affirmative Defenses.
`
`FIRST AFFIRMATIVE DEFENSE
`(No Infringement)
`
`122. Apple does not infringe and has not infringed any valid and enforceable claim of
`
`the ‘135, ‘151, ‘504, and ‘211 patents.
`
`SECOND AFFIRMATIVE DEFENSE
`(Invalidity)
`
`123. Claims of the ‘135, ‘151, ‘504, and ‘211 patents are invalid for failure to satisfy
`
`the conditions for patentability set forth in Title 35 of the United States Code, including without
`
`limitation §§ 101, 102, 103 and 112.
`
`
`
`9
`
`Page 9 of 25
`
`

`
`Case 6:10-cv-00417-LED Document 257 Filed 04/16/12 Page 10 of 25 PageID #: 7485
`
`THIRD AFFIRMATIVE DEFENSE
`(Laches)
`
`124. VirnetX’s claims are barred in whole or in part by laches.
`
`FOURTH AFFIRMATIVE DEFENSE
`(Waiver)
`
`125. VirnetX’s claims are barred in whole or in part by waiver.
`
`FIFTH AFFIRMATIVE DEFENSE
`(Estoppel)
`
`126. VirnetX’s claims are barred in whole or in part by estoppel.
`
`SIXTH AFFIRMATIVE DEFENSE
`(Notice, Damages, and Costs)
`
`127. VirnetX’s claims for damages, if any, against Apple are statutorily limited by 35
`
`U.S.C. § 286 and/or § 287.
`
`128. VirnetX is barred from recovering costs in connection with this action under 35
`
`U.S.C. § 288.
`
`SEVENTH AFFIRMATIVE DEFENSE
`(Sales to Government)
`
`129. VirnetX’s claims are limited by 28 U.S.C. § 1498.
`
`EIGHTH AFFIRMATIVE DEFENSE
`(Unclean Hands and Inequitable Conduct)
`
`130. As more fully outlined in Apple’s Count III, specifically paragraphs 10-46 in
`
`Apple’s Counterclaims, which are hereby incorporated by reference, the claims of the ‘135, ‘151,
`
`‘504, and ‘211 patents are unenforceable due to inequitable conduct, infectious unenforceability,
`
`and/or unclean hands committed by the inventors, their counsel, SAIC, VirnetX, and/or others
`
`substantively involved in the prosecution of the ‘135, ‘151, ‘504, or ‘211 patents.
`
`
`
`10
`
`Page 10 of 25
`
`

`
`Case 6:10-cv-00417-LED Document 257 Filed 04/16/12 Page 11 of 25 PageID #: 7486
`
`RESERVATION OF AFFIRMATIVE DEFENSES
`
`131. Apple hereby reserves the right to supplement additional affirmative defenses as
`
`discovery proceeds in this case.
`
`III. COUNTERCLAIMS
`
`Apple asserts the following counterclaims against VirnetX and SAIC.
`
`PARTIES
`
`1.
`
`Counterclaim plaintiff is a California Corporation with its principal place of
`
`business at One Infinite Loop, Cupertino, California 95014.
`
`2.
`
`On information and belief based on the Complaint, Counterclaim Defendant
`
`VirnetX Inc. (“VirnetX”) is a Delaware corporation, having a place of business located at 5615
`
`Scotts Valley Drive, Suite 110, Scotts Valley, California.
`
`3.
`
`On information and belief based on the Complaint, Counterclaim Defendant
`
`Science Applications International Corporation (“SAIC”) is a Delaware corporation, having a
`
`place of business located at 1710 SAIC Drive, McLean, Virginia 22102.
`
`JURISDICTION AND VENUE
`
`4.
`
`These counterclaims arise under the patent laws of the United States as enacted
`
`under Title 35 of the United States Code and the provisions of the Federal Declaratory Judgment
`
`Act. The jurisdiction of this Court is proper under 28 U.S.C. §§ 1331, 1338, 2201 and 2202.
`
`5.
`
`Venue is proper in this District pursuant to 28 U.S.C. §§ 1391 and 1400.
`
`COUNT I – DECLARATION OF NON-INFRINGEMENT
`
`6.
`
`Based on VirnetX’s filing of this action, Apple’s Affirmative Defenses, SAIC’s
`
`ownership interest in the patents asserted against Apple (see Dkt. No. 236), and the addition of
`
`SAIC as a party to this action, an actual controversy has arisen and now exists between (a)
`
`
`
`11
`
`Page 11 of 25
`
`

`
`Case 6:10-cv-00417-LED Document 257 Filed 04/16/12 Page 12 of 25 PageID #: 7487
`
`VirnetX and SAIC and (b) Apple as to whether Apple has infringed or is infringing one or more
`
`claims of U.S. Patent Numbers 6,502,135 (“the ‘135 patent”), 7,490,151 (“the ‘151 patent”),
`
`7,418,504 (“the ‘504 patent”) and 7,921,211 (“the ‘211 patent”).
`
`7.
`
`Pursuant to the Federal Declaratory Judgment Act, 28 U.S.C. § 2201 et seq.,
`
`Apple requests the declaration of the Court that Apple does not infringe and has not infringed
`
`any valid and enforceable claim of the ‘135, ‘151, ‘504, and ‘211 patents.
`
`COUNT II – DECLARATION OF PATENT INVALIDITY
`
`8.
`
`Based on VirnetX’s filing of this action, Apple’s Affirmative Defenses, SAIC’s
`
`ownership interest in the patents asserted against Apple (see Dkt. No. 236), and the addition of
`
`SAIC as a party to this action, an actual controversy has arisen and now exists between (a)
`
`VirnetX and SAIC and (b) Apple as to the validity of the claims of the ‘135, ‘151, ‘504, and ‘211
`
`patents.
`
`9.
`
`Pursuant to the Federal Declaratory Judgment Act, 28 U.S.C. § 2201 et seq.,
`
`Apple requests the declaration of the Court that the ‘135, ‘151, ‘504, and ‘211 patents are
`
`invalid.
`
`COUNT III – DECLARATION OF UNENFORCEABILITY
`
`10.
`
`Based on VirnetX’s filing of this action, Apple’s Affirmative Defenses, SAIC’s
`
`ownership interest in the patents asserted against Apple (see Dkt. No. 236), and the addition of
`
`SAIC as a party to this action, an actual controversy has arisen and now exists between (a)
`
`VirnetX and SAIC and (b) Apple as to the enforceability of the ‘135, ‘151, ‘504, and ‘211
`
`patents.
`
`
`
`12
`
`Page 12 of 25
`
`

`
`Case 6:10-cv-00417-LED Document 257 Filed 04/16/12 Page 13 of 25 PageID #: 7488
`
`11.
`
`The ‘135 patent, which issued on December 31, 2002, was filed with the United
`
`States Patent and Trademark Office (“Patent Office”) on February 15, 2000 as U.S. Patent
`
`Application No. 09/504,783 (“the ‘783 application”).
`
`12.
`
`The ‘151 patent, which issued on February 10, 2009, was filed with the Patent
`
`Office on September 30, 2002 as U.S. Patent Application No. 10/259,494 (“the ‘494
`
`application”).
`
`13.
`
`The ‘504 patent, which issued on August 26, 2008, was filed with the Patent
`
`Office on November 18, 2003 as U.S. Patent Application No. 10/714,849 (“the ‘849
`
`application”).
`
`14.
`
`The ‘211 patent, which issued on April 5, 2011, was filed with the Patent Office
`
`on August 17, 2007 as U.S. Patent Application No. 11/840,560 (“the ‘560 application”).
`
`15.
`
`On information and belief, the applications that matured into the ‘135 and ‘151
`
`patents were assigned to Science Application International Corporation (“SAIC”). On
`
`information and belief, SAIC assigned to VirnetX certain rights in the ‘135 patent after issuance
`
`and certain rights in the application that matured into the ‘151 patent. On information and belief,
`
`the applications that matured into the ‘504 and ‘211 patents were assigned to VirnetX.
`
`A. The ‘135 Patent
`
`16.
`
`The ‘135 patent is unenforceable due to inequitable conduct. Based on a review
`
`of the file history and based on Apple’s understanding of the allegations by VirnetX and SAIC,
`
`one or more of the people substantively involved in the prosecution of the application leading to
`
`the ‘135 patent, including a reexamination, were aware of information material to the
`
`patentability of the claims of the ‘135 patent, but withheld that information from the Patent
`
`Office with the intent to deceive.
`
`
`
`13
`
`Page 13 of 25
`
`

`
`Case 6:10-cv-00417-LED Document 257 Filed 04/16/12 Page 14 of 25 PageID #: 7489
`
`17.
`
`The withheld information includes U.S. Patent Application No. 09/399,753 (“the
`
`Miller Application”), which was pending during the prosecution of the ‘135 patent. The
`
`pendency of the Miller Application was information material to patentability of the ‘135 patent
`
`based on Apple’s understanding of the allegations by VirnetX. The withheld information also
`
`includes RFC 2401-Security Architecture for the Internet Protocol (“RFC 2401”) and
`
`information concerning the publication date of the Aventail Administrator’s Guide (“Aventail”),
`
`which are material to patentability based upon Apple’s understanding of the allegations by
`
`VirnetX. This withholding of information material to patentability with the intent to deceive the
`
`Patent Office constitutes inequitable conduct.
`
`18.
`
`The Miller Application, RFC 2401, and the Aventail reference are not cumulative
`
`to the prior art made of record during prosecution of the ‘135 patent. On information and belief,
`
`there is a substantial likelihood that a reasonable examiner would have considered this art in
`
`determining whether to allow the ‘135 patent to issue.
`
`19.
`
`During the prosecution of the application leading to the ‘135 patent, one or more
`
`of the people substantively involved in its prosecution (including Ross Dannenburg) were aware
`
`of the Miller Application. Mr. Dannenburg was involved in the prosecution of the Miller
`
`Application at least as early as June 14, 2002, when he signed an Amendment / Response in the
`
`prosecution history of the Miller Application. Mr. Dannenburg was involved in the prosecution
`
`of the ‘135 patent at least as early as January 28, 2002, when he signed a Transmittal Form for an
`
`Amendment / Response in the prosecution file history of the ‘135 patent. Therefore, Mr.
`
`Dannenburg was involved in the prosecution of the Miller Application while he was prosecuting
`
`the ‘135 patent. Based on Apple’s understanding of the allegations by VirnetX, the pendency of
`
`the Miller Application is information material to patentability. Nonetheless, those substantively
`
`
`
`14
`
`Page 14 of 25
`
`

`
`Case 6:10-cv-00417-LED Document 257 Filed 04/16/12 Page 15 of 25 PageID #: 7490
`
`involved in the prosecution of the application intentionally failed to disclose this material
`
`information to the Patent Office at any time during the prosecution of the ‘135 patent with intent
`
`to deceive. Moreover, the materiality of the Miller Application leads to an inference of intent to
`
`deceive. This withholding of information material to patentability with the intent to deceive the
`
`Patent Office constitutes inequitable conduct.
`
`20.
`
`During the prosecution of the application leading to the ‘135 patent, one or more
`
`of the people substantively involved in its prosecution were aware of RFC 2401, including Mr.
`
`Dannenburg, because it is mentioned in the specification of the ‘135 patent. Based on Apple’s
`
`understanding of the allegations by VirnetX, RFC 2401 is material prior art. Nonetheless, those
`
`substantively involved in the prosecution of the application intentionally failed to submit this
`
`material prior art reference to the Patent Office as required by 37 C.F.R. 1.56 and 37 C.F.R. 1.97,
`
`with intent to deceive. Moreover, in mentioning RFC 2401 in the application, those
`
`substantively involved in the prosecution of the application described RFC 2401 in a way that
`
`concealed its materiality, with intent to deceive. Moreover, the materiality of RFC 2401 leads to
`
`an inference of intent to deceive. This conduct, undertaken with the intent to deceive the Patent
`
`Office, constitutes inequitable conduct.
`
`21.
`
`On or about February 15, 2007, VirnetX filed a lawsuit against Microsoft
`
`Corporation (“Microsoft”) in the Eastern District of Texas, Tyler Division, C.A. No. 6:07-CV-80
`
`(the “Microsoft Case”), alleging that Microsoft infringed certain VirnetX patents, including the
`
`‘135 patent.
`
`22.
`
`In December 2009, Microsoft filed a reexamination request with the Patent Office
`
`requesting reexamination of claims 1-10 and 12 of the ‘135 patent, citing, among other
`
`
`
`15
`
`Page 15 of 25
`
`

`
`Case 6:10-cv-00417-LED Document 257 Filed 04/16/12 Page 16 of 25 PageID #: 7491
`
`references, the Aventail reference as prior art under 35 U.S.C. § 102(a). Microsoft asserted that
`
`the Aventail reference anticipated claims 1-10 and 12 of the ‘135 patent.
`
`23.
`
`On or about December 31, 2009, the Patent Office ordered reexamination of
`
`claims 1-10 and 12 of the ‘135 patent, finding, in part, that the Aventail reference raised a
`
`substantial new question of patentability of all of the requested claims of the ‘135 patent.
`
`24.
`
`On or about January 15, 2010, the Patent Office issued a non-final action rejecting
`
`claims 1, 3, 4, 6-10, and 12 of the ‘135 patent as being anticipated by the Aventail reference.
`
`25.
`
`On or about February 22, 2010, VirnetX filed a petition to extend its deadline for
`
`responding to the office action, pointing out, in part, that it needed additional time to investigate
`
`whether the Aventail reference was proper prior art, including investigating the dates of
`
`conception and reduction to practice of the inventions claimed in the ‘135 patent as well as
`
`diligence there between. The petition also cited as a basis for extension that the Microsoft Case
`
`was causing a “significant drain” on VirnetX’s resources. Moreover, the petition stated that the
`
`extension “would likely also permit consideration of any court conclusions regarding the claims
`
`presently under reexamination.” The petition was filed by Toby Kusmer of McDermott Will &
`
`Emery, the same firm that represented VirnetX in the Microsoft Case until 2009. The Patent
`
`Office responded on or about February 24, 2010, granting an extension, setting the deadline for
`
`response as April 15, 2010.
`
`26.
`
`On or about March 8, 2010, trial of the Microsoft Case (“Microsoft Trial”)
`
`commenced. During the Microsoft Trial, one or more witnesses for VirnetX, including inventor
`
`Edward Munger, testified that the claims of the ‘135 patent were conceived no earlier than three
`
`months after September 23, 1999, placing the date of conception for claims 1-10 and 12 on or
`
`about December 23, 1999. During the Microsoft Trial, Microsoft alleged, in part, that claims 1-
`
`
`
`16
`
`Page 16 of 25
`
`

`
`Case 6:10-cv-00417-LED Document 257 Filed 04/16/12 Page 17 of 25 PageID #: 7492
`
`10 and 12 of the ‘135 patent were anticipated by the Aventail reference, which on information
`
`and belief bears a copyright date 1996 – 1999. Microsoft presented evidence indicating that the
`
`Aventail reference may have been published as early as June 1999. Based on a review of the
`
`trial record, VirnetX did not dispute the publication date of the Aventail reference. The
`
`Microsoft Trial concluded on or about March 16, 2010. Therefore, at least as of March 16, 2010,
`
`VirnetX was aware that the Aventail reference may have been published at least as early as June
`
`1999, which is prior to the February 15, 2000, filing date of the application that matured into the
`
`‘135 patent and prior to the earliest conception date of December 1999 claimed by the inventor
`
`of the ‘135 patent.
`
`27.
`
`On or about March 25, VirnetX gave notice to the Patent Office of the outcome of
`
`the case and submitted the jury verdict form from the case. On or about March 29, 2010,
`
`VirnetX filed a petition requesting that the reexamination proceeding be suspended. The Patent
`
`Office did not respond to the request until after the date set for VirnetX’s response to the non-
`
`final office action rejection.
`
`28.
`
`On or about April 15, 2010, VirnetX responded to the office action rejection, in
`
`part, by asserting that the Aventail reference should not be considered prior art because no
`
`evidence had been submitted by Microsoft that established the actual publication date of the
`
`Aventail reference. Moreover, VirnetX did not provide the result of any investigation it may
`
`have made with respect to the publication date of the Aventail reference or the dates of
`
`conception or reduction to practice of the ‘135 patent that it indicated it would make in its
`
`petition for an extension of time, nor did VirnetX provide any information that it learned from
`
`the Microsoft Trial that related to the publication date of the Aventail reference. Based on a
`
`review of the prosecution history, VirnetX did not disclose that its conception date for the claims
`
`
`
`17
`
`Page 17 of 25
`
`

`
`Case 6:10-cv-00417-LED Document 257 Filed 04/16/12 Page 18 of 25 PageID #: 7493
`
`of the ‘135 patent was no earlier than December 1999, nor did VirnetX disclose that the Aventail
`
`reference may have been published as early as June 1999, as it was made aware of during the
`
`Microsoft Trial.
`
`29.
`
`On June 16, 2010, the Patent Office issued an Action Closing Prosecution. In the
`
`action, the examiner recites that he made an attempt to determine the publication date of the
`
`Aventail reference, but was unsuccessful. Based on the lack of evidence of the publication date,
`
`the examiner withdrew all of the rejections that had been based on the Aventail reference.
`
`30.
`
`VirnetX and/or its representatives, agents, and attorneys who were substantively
`
`involved in the prosecution of the reexamination knew or should have known of the Microsoft
`
`trial and the evidence presented regarding the publication date of the Aventail reference. For
`
`example, Mr. Kusmer specifically referenced the Microsoft Trial and the potential for additional
`
`material information to come to light during that trial when seeking an extension to respond to an
`
`office action, as set forth in paragraph 25 above. VirnetX and/or its representatives, agents, and
`
`attorneys withheld this information with the intent to deceive, either willfully or with such gross
`
`negligence or recklessness as constituting an act of willfulness amounting to inequitable conduct.
`
`Moreover, the materiality of the Aventail publication and the aforementioned evid