throbber
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:
`PH-VirnetX-IPR@paulhastings.com
`
`
`
`
`
`
`Paper No. _______
`Filed: January 8, 2016
`
`Naveen Modi
`Paul Hastings LLP
`875 15th Street NW
`Washington, DC 20005
`Telephone: (202) 551-1990
`Facsimile: (202) 551-0490
`E-mail:
`PH-VirnetX-IPR@paulhastings.com
`
`
`
`
`
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`____________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`____________________
`
`APPLE INC.
`Petitioner
`
`v.
`
`VIRNETX INC.
`Patent Owner
`
`____________________
`
`Case IPR2016-00062
`Patent 6,502,135
`____________________
`
`Patent Owner’s Preliminary Response
`to Petition for Inter Partes Review
`of U.S. Patent No. 6,502,135
`
`

`
`
`Table of Contents
`
`Case IPR2016-00062
`
`Introduction ..................................................................................................... 1
`
`
`
`I.
`
`II.
`
`Apple Remains Time-Barred and Institution Is Precluded by Statute ........... 1
`
`III. Apple’s Petition Should Be Denied Under 35 U.S.C. §§ 315(d)
`and 325(d), Consistent with Board Precedent and Policy .............................. 4
`
`A. Apple’s Petition Is the Ninth of Ten Inter Partes Office
`Challenges to the ’135 Patent ............................................................... 4
`
`B.
`
`Denial of the Petition Under 35 U.S.C. §§ 315(d) and 325(d) Is
`Authorized and Appropriate ................................................................. 7
`
`IV.
`
`Institution Would Prejudice VirnetX, Yet Denial of Institution Would
`Not Unduly Prejudice Apple ........................................................................ 12
`
`V.
`
`Conclusion .................................................................................................... 15
`
`
`
`i
`
`

`
`TABLE OF AUTHORITIES
`
`Case IPR2016-00062
`
` Page(s)
`
`Federal Cases
`Achates Reference Publ’g, Inc. v. Apple Inc.,
`803 F.3d 652 (Fed. Cir. 2015) .............................................................................. 2
`
`Butamax Adv. Biofuels LLC v. Gevo, Inc.,
`IPR2014- 00581, Paper No. 8 (Oct. 14, 2014) ..................................................... 3
`
`Conopco, Inc. v. Procter & Gamble Co.,
`IPR2014-00506, Paper No. 25 (Dec. 10, 2015) .................................................. 10
`
`Conopco, Inc. v. Procter & Gamble Co.,
`IPR2014-00628, Paper No. 21 (Oct. 20, 2014) .................................................. 10
`
`Conopco, Inc. v. Procter & Gamble Co.,
`IPR2014-00628, Paper No. 23 (Mar. 20, 2015) ................................................. 10
`
`Prism Pharma Co., Ltd. v. Choongwae Pharma Corp.,
`IPR2014-00315, Paper No. 14 (July 8, 2014) .................................................... 10
`
`SAS Institute, Inc. v. Complementsoft, LLC,
`IPR2013-00581, Paper No. 15 (Dec. 30, 2013) .................................................. 14
`
`Standard Innovation Corp. v. Lelo, Inc.,
`IPR2014-00907, Paper No. 10 (Dec. 1, 2014) .............................................. 10, 14
`
`Target Corp. v. Destination Maternity Corp.,
`IPR2014-00508, Paper No. 28, Dissent slip op. (Feb. 12, 2015) ......................... 3
`
`Unified Patents, Inc. v. Personal Web Technologies, LLC et al.,
`IPR2014-00702, Paper No. 13 (July 24, 2014) .................................................... 9
`
`VirnetX, Inc. v. Cisco Sys., Inc,
`767 F.3d 1308 (Fed. Cir. 2014) ............................................................................ 4
`
`Zhongshan Ocean Motor Co. v. Nidec Motor Corp.,
`IPR2015-00762, Paper No. 16 (Oct. 5, 2015) ...................................................... 2
`
`ii
`
`

`
`Case IPR2016-00062
`
`Federal Statutes
`35 U.S.C. § 315(b) ............................................................................................passim
`
`35 U.S.C. § 315(c) ................................................................................................. 2, 3
`
`35 U.S.C. § 315(d) ............................................................................................passim
`
`35 U.S.C. § 325(d) ............................................................................................passim
`
`Regulations
`
`37 C.F.R. § 42.1(b) .................................................................................................. 11
`
`37 C.F.R. § 42.11 ..................................................................................................... 11
`
`Other Authorities
`
`157 Cong. Rec. S1041-42 (daily ed. Mar. 1, 2011) ................................................... 8
`
`
`
`iii
`
`
`
`

`
`Case IPR2016-00062
`
`I.
`
`Introduction
`
`Board decisions and sound policy support denying Apple’s Petition, which
`
`is the eleventh Office challenge to U.S. Patent No. 6,502,135 (“the ’135 patent”).
`
`Apple initiated six of these challenges (including the instant challenge), either by
`
`itself or, as the Board found, through its “proxy” RPX Corporation. IPR2014-
`
`00171, Paper No. 57 at 7 (redacted) (June 5, 2014) (finding that “RPX is Apple’s
`
`proxy”); IPR2014-00172, Paper No. 57 at 7 (redacted) (June 5, 2014) (same
`
`finding).
`
`Apple’s Petition here should be denied for at least two reasons. First, the
`
`Petition is time-barred under 35 U.S.C. § 315(b). Apple’s joinder motion should
`
`not alter the outcome dictated by § 315(b). Second, the Petition represents a serial
`
`attack on the ’135 patent that seeks to replicate issues and evidence already before
`
`the Office, and should be denied under 35 U.S.C. §§ 315(d) and 325(d).
`
`II. Apple Remains Time-Barred and Institution Is Precluded by Statute
`It is undisputed that VirnetX served Apple with “a complaint” alleging
`
`infringement of the ’135 patent more than one year before the Petition was filed.
`
`For this reason, Apple’s earlier petitions for inter partes review challenging the
`
`’135 patent in IPR2013-00348 and IPR2013-00349, along with the one filed by
`
`RPX in IPR2014-00171 and IPR2014-00172 (in both of which RPX was found to
`
`be Apple’s proxy), were correctly denied as time-barred under 35 U.S.C. § 315(b).
`
`
`
`

`
`Case IPR2016-00062
`
`IPR2013-00348, Paper No. 14 at 5 (Dec. 13, 2013), reh’g denied Paper No. 18
`
`(Feb. 12, 2014); IPR2013-00349, Paper No. 14 at 5 (Dec. 13, 2013) , reh’g denied
`
`Paper No. 18 (Feb. 12, 2014); IPR2014-00171, Paper No. 57 at 3 (redacted)
`
`(June 5, 2014); IPR2014-00172, Paper No. 57 at 3 (redacted) (June 5, 2014). This
`
`is a deficiency that Apple cannot cure by filing a further petition and motion for
`
`joinder in this matter.
`
`Apple’s joinder motion does not alter the outcome dictated by 35 U.S.C.
`
`§ 315(b). Although some Board panels have interpreted 35 U.S.C. § 315(b) to
`
`create an exception to the one year time-bar when an IPR petition is filed
`
`concurrently with a motion for joinder, see, e.g., Zhongshan Ocean Motor Co. v.
`
`Nidec Motor Corp., IPR2015-00762, Paper No. 16 at 5 (Oct. 5, 2015) (split
`
`expanded panel) (finding a § 315(b) time-bar not to apply because “§ 315(c)
`
`permits the joinder of any person who properly files a petition under § 311”),
`
`VirnetX respectfully submits that such an interpretation of § 315(b) is improper.
`
`See Zhongshan Ocean Motor Co. v. Nidec Motor Corp., IPR2015-00762, Paper
`
`No. 16, Dissent slip op. at 2 (Oct. 5, 2015) (“the majority’s position is misplaced
`
`because it reads too much into § 315(c)’s use of the word ‘any’”); but see Achates
`
`Reference Publ’g, Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015) (stating in dicta
`
`that “an otherwise time-barred party may nonetheless participate in an inter partes
`
`review proceeding if another party files a proper petition”). In particular, as
`
`2
`
`

`
`explained in Target Corp. v. Destination Maternity Corp., IPR2014-00508, Paper
`
`No. 28, Dissent slip op. at 18 (Feb. 12, 2015):
`
`Case IPR2016-00062
`
`[S]uch an interpretation “effectively rewrites the second
`sentence of § 315(b) as follows, with added material
`underlined: The time limitation set forth in the preceding
`sentence shall not apply to a petition accompanied by a
`request for joinder under subsection (c) if that request is
`granted.
`
`Such an “interpretation of § 315(b) converts the statutory bar set forth therein into
`
`a discretionary bar in certain circumstances, including those present in this
`
`proceeding.” Id. Once a petitioner like Apple “is time-barred under § 315(b) with
`
`respect to a particular patent, it is always time-barred.” Id. at 19 (emphasis added).
`
`In fact, the Board has acknowledged that “[t]he statute does . . . set forth at least
`
`one circumstance in which we do not have the discretion to join a party: if the
`
`Board determines that the second petition does not warrant institution.” Butamax
`
`Adv. Biofuels LLC v. Gevo, Inc., IPR2014- 00581, Paper No. 8 at 7 (Oct. 14, 2014)
`
`(emphasis in original). Because Apple remains time-barred to challenge the ’1355
`
`patent via inter partes review, its Petition does not warrant institution generally
`
`and so institution is impossible under 35 U.S.C. § 315(c). Therefore, Apple’s
`
`Petition must be denied.
`
`3
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`

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`Case IPR2016-00062
`
`III. Apple’s Petition Should Be Denied Under 35 U.S.C. §§ 315(d)
`and 325(d), Consistent with Board Precedent and Policy
`
`Given the number of serial challenges filed against the ’135 patent, and the
`
`fact that several are currently pending at the Office—including one initiated by
`
`Apple itself—the Board should invoke its authority under 35 U.S.C. §§ 315(d)
`
`and 325(d) to deny institution of this challenge.
`
`A. Apple’s Petition Is the Ninth of Ten Inter Partes Office
`Challenges to the ’135 Patent
`
`Apple challenged the validity of the ’135 patent in a litigation that included a
`
`jury trial. In that litigation, VirnetX Inc. v. Cisco Sys. Inc. et al., Case No. 6:10-cv-
`
`00417 (E.D. Tex.), Apple failed to establish that any claim of the ’135 patent was
`
`invalid. (Ex. 2004, Jury Verdict Form (E.D. Tex. Nov. 6, 2012).) Apple appealed
`
`to the U.S. Court of Appeals for the Federal Circuit, which affirmed that “none of
`
`the asserted claims are invalid[.]” VirnetX, Inc. v. Cisco Sys., Inc, 767 F.3d 1308,
`
`1313-14 (Fed. Cir. 2014). In addition to these litigation challenges involving the
`
`’135 patent, eleven inter partes challenges have been filed within the Office—six
`
`by Apple itself—as discussed below.
`
`Microsoft filed a request for inter partes reexamination of the ’135 patent on
`
`December 8, 2009, which the Office assigned Control No. 95/001,269 (“the ’1,269
`
`reexamination”) – the USPTO confirmed the patentability of claims 1-10 and 12 of
`
`the ’135 patent in this ’1,269 reexamination. Cisco filed a second request for inter
`
`4
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`

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`Case IPR2016-00062
`
`partes reexamination of the ’135 patent on July 8, 2011, which the Office assigned
`
`Control No. 95/001,679 (“the ’1,679 reexamination”), and remains pending. The
`
`’1,679 reexamination involves the same Kiuchi reference asserted in Apple’s
`
`Petition here and in Mangrove’s IPR2015-01046 proceeding. Soon after, Apple
`
`filed a third request for inter partes reexamination of the ’135 patent on July 11,
`
`2011, which
`
`the Office assigned Control No. 95/001,682 (“the ’1,682
`
`reexamination”), and which also remains pending.
`
`Apple concurrently filed its first two IPR petitions against the ’135 patent on
`
`June 12, 2013, in IPR2013-00348 and IPR2013-00349, respectively. The Board
`
`denied both these petitions because Apple was time-barred under 35 U.S.C. §
`
`315(b). IPR2013-00348, Paper No. 14 at 5 (Dec. 13, 2013), reh’g denied Paper
`
`No. 18 (Feb. 12, 2014); IPR2013-00349, Paper No. 14 at 5 (Dec. 13, 2013) , reh’g
`
`denied Paper No. 18 (Feb. 12, 2014).
`
`The third IPR petition against the ’135 patent was filed by New Bay Capital,
`
`LLC on June 23, 2013. That proceeding was terminated in favor of VirnetX,
`
`pursuant to New Bay’s request for adverse judgment. IPR2013-00375, Paper No.
`
`16 (Nov. 12, 2013).
`
`RPX Corporation, which the Board found was acting as a proxy for time-
`
`barred Apple, concurrently filed another two IPR petitions against the ’135 patent
`
`on November 20, 2013, in IPR2014-00171 and IPR2014-00172 (i.e., the fourth and
`
`5
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`

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`Case IPR2016-00062
`
`fifth IPR petitions). As VirnetX explained, Apple tried to hide its involvement in
`
`the RPX proceedings in several ways, giving the false impression that Apple and
`
`RPX were unconnected entities without a privity or real party-in- interest
`
`relationship. IPR2014-00171, Paper No. 55 at 5-7 (redacted) (Mar. 6, 2014);
`
`IPR2014-00172, Paper No. 55 at 5-7 (redacted) (Mar. 6, 2014). Despite these
`
`efforts, the Board found that Apple was a real party-in- interest for both of RPX’s
`
`petitions, and accordingly denied institution given Apple’s time- barred status.
`
`IPR2014-00171, Paper No. 57 at 3 (redacted) (June 5, 2014); IPR2014-00172,
`
`Paper No. 57 at 3 (redacted) (June 5, 2014).
`
`Microsoft then filed a sixth IPR petition in IPR2014-00558 on March 31,
`
`2014 challenging the ’135 patent. The Board denied the petition because
`
`Microsoft was time-barred under 35 U.S.C. § 315(b). IPR2013-00558, Paper No.
`
`13 at 8 (July 23, 2014), reh’g denied Paper No. 16 (Sep. 5, 2014).
`
`The Mangrove Partners Master Fund, Ltd. filed the seventh IPR petition in
`
`IPR2015-01046 on April 14, 2015 challenging the ’135 patent. The Board
`
`instituted trial, IPR2015-01046, Paper No. 11 (Oct. 7, 2015), and Apple now seeks
`
`to join the Mangrove proceeding. According to Apple, the grounds and
`
`declarations submitted in each proceeding are the same. (Paper No. 2 at 4; Exs.
`
`1003 in each proceeding.) Thus, for Apple’s own sixth Office challenge to the
`
`6
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`Case IPR2016-00062
`
`’135 patent—the eleventh challenge overall—Apple replicates issues and evidence
`
`that the Office is considering in ongoing proceedings.
`
`B. Denial of the Petition Under 35 U.S.C. §§ 315(d) and 325(d) Is
`Authorized and Appropriate
`
`In situations less duplicative, with fewer prior challenges, and with less
`
`burden for the Board and the parties, the Board has exercised its discretion
`
`under 35 U.S.C. §§ 315(d) and 325(d) to deny IPR petitions. The Board should
`
`likewise do so here.
`
`Discretionary authority to avoid an avalanche of proceedings comes from
`
`35 U.S.C. § 315(d), which allows the Board to “terminat[e]” one proceeding when
`
`another proceeding “involving the patent is before the Office.” Under 35 U.S.C.
`
`§ 325(d), the Board has similar authority to “terminate[e]” a serial proceeding, and
`
`may also consider, as part of “determining whether to institute” a proceeding,
`
`whether “the same or substantially the same prior art or arguments previously were
`
`presented to the Office.”
`
`The Board’s discretionary authority to deny institution of this Petition is
`
`amply justified. Not one, but at least three pending proceedings are in progress
`
`before the Office involving the ’135 patent. These three proceedings include two
`
`inter partes reexaminations (the ’1,679 and ’1,682 reexaminations) and one IPR
`
`trial (IPR2015-01046). Moreover, according to Apple, the grounds advanced in its
`
`7
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`Case IPR2016-00062
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`petition are “identical” to those involved in the pending IPR2015-01046 trial.1 The
`
`’1,679 reexamination also involves one of the same primary references, Kiuchi,
`
`that Apple identifies in its petition. Accordingly, each of §§ 315(d)’s and 325(d)’s
`
`preconditions for the Board to deny Apple’s Petition is present. Declining to do so
`
`will encourage serial challenges to the same patent through inter partes reviews—
`
`as Apple has done here—which unnecessarily burdens the resources of the Board
`
`and patent owners. See 157 Cong. Rec. S1041-42 (daily ed. Mar. 1, 2011)
`
`(statement of Sen. Kyl) (the purpose of § 325(d) is to avoid “serial challenges” and
`
`the resulting burden on the patent owner and Office in managing multiple
`
`proceedings involving the same patent).
`
`This case presents even more compelling reasons for the Board to exercise
`
`its discretion than in prior cases where the Board has denied institution. Here,
`
`there is (i) a longer line of serial Office challenges to the ’135 patent, (ii) more
`
`involvement by the petitioner (Apple) itself in those previous challenges, and
`
`(iii) more duplicative proposed grounds than in prior cases where the Board has
`
`denied serial petitions.
`
`
`1 Apple’s Petition raises new issues and introduces new exhibits. (Pet. at 39-
`
`42.) To the extent Apple is joined to the ’046 proceeding, these issues and exhibits
`
`should not be introduced into the ’046 proceeding.
`
`8
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`

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`Case IPR2016-00062
`
`For example, the Board denied a serial petition in Unified Patents, Inc. v.
`
`Personal Web Technologies, LLC et al., IPR2014-00702, Paper No. 13 at 2-3
`
`(July 24, 2014). The Board considered whether to institute an IPR where three
`
`other IPR petitions, and one request for ex parte reexamination, had previously
`
`been filed by other parties. Id. Like Apple did here, the petitioner in Unified
`
`Patents filed a motion seeking joinder to an instituted IPR. Id. at 3. The Board
`
`denied institution under 35 U.S.C. § 325(d), reasoning that the prior IPRs involved
`
`“the same reference being asserted in this proceeding,” and that one or more of the
`
`prior IPRs would thus address the same issues. Id. at 7-8.
`
`While one of the IPRs addressed in Unified Patents was already at the
`
`appeal stage, the facts present here provide even stronger reasons to deny
`
`institution. First, Apple’s petition is one of eleven Office challenges to the ’135
`
`patent—significantly more than the number of serial proceedings addressed in
`
`Unified Patents. Id. at 2-3. And while the petitioner in Unified Patents had not
`
`filed any of the prior serial petitions itself, here Apple itself filed five of the prior
`
`Office challenges involving the ’135 patent. Just as the petition in Unified Patents
`
`was denied in view of “the efficient administration of the Office,” here the same
`
`factors present a stronger basis for denying Apple’s Petition.
`
`The Board has also exercised its discretion under 35 U.S.C. § 325(d) to deny
`
`IPR petitions based on prior examination (as opposed to reexamination or IPR) of
`
`9
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`
`Case IPR2016-00062
`
`the challenged patent. See, e.g., Prism Pharma Co., Ltd. v. Choongwae Pharma
`
`Corp., IPR2014-00315, Paper No. 14 at 2, 12-13 (July 8, 2014) (denying IPR
`
`petition under 35 U.S.C. § 325(d) because “[t]he same prior art . . . and arguments
`
`substantially the same as Petitioner’s current contention” were raised during
`
`prosecution.) Here, an even stronger basis to invoke 35 U.S.C. §§ 315(d)
`
`and 325(d) is present, as the previous Office proceedings involving the ’135 patent
`
`were all inter partes in nature, permitting the challenger, including Apple itself in
`
`its ongoing reexamination, a full opportunity to participate in the proceedings and
`
`be heard.
`
`The Board has further noted that “the interests of fairness, economy, and
`
`efficiency support” denying institution (though it is not statutorily barred) where a
`
`petitioner, in similar situations, files a second petition relying on references and
`
`arguments it could have raised in a first, unsuccessful petition. See Conopco, Inc.
`
`v. Procter & Gamble Co., IPR2014-00628, Paper No. 21 at 11 (Oct. 20, 2014); see
`
`also Conopco, Inc. v. Procter & Gamble Co., IPR2014-00628, Paper No. 23 at 3
`
`(Mar. 20, 2015) (explaining the decision to deny institution was based, in part, on
`
`the need to protect the patent owner “from multifarious challenges to the same
`
`patent claims”); Conopco, Inc. v. Procter & Gamble Co., IPR2014-00506, Paper
`
`No. 25 at 3-4 (Dec. 10, 2015) (designated informative); Standard Innovation Corp.
`
`v. Lelo, Inc., IPR2014-00907, Paper No. 10 at 4 (Dec. 1, 2014) (denying institution
`
`10
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`Case IPR2016-00062
`
`where “[n]either the Petition nor the Motion for Joinder presents cogent argument
`
`or evidence to explain why the grounds of unpatentability asserted in the Petition
`
`could not have been asserted in the [previous] IPR.”). To allow otherwise would
`
`encourage the filing of requests that “hold[] back prior art for use in successive
`
`attacks, should the first petition be denied.” Conopco, IPR2014-00628, Paper No.
`
`21 at 11. This is Apple’s sixth successive Office attack on the ’135 patent, not
`
`counting the other five attacks on the same patent by non-Apple parties. Here too,
`
`“the interests of fairness, economy, and efficiency” support denying institution.
`
`In exercising its discretion whether to institute a trial here, the Board should
`
`also consider Apple’s conduct in the prior proceedings filed by RPX. Not only
`
`was Apple not named as a real party-in-interest in the RPX petitions, it tried to
`
`hide its involvement in those proceedings. IPR2014-00171, Paper No. 55 at 5-7
`
`(redacted) (Mar. 6, 2014); IPR2014-00172, Paper No. 55 at 5-7 (redacted) (Mar. 6,
`
`2014). Denial of Apple’s new petition pursuant to the Board’s discretionary
`
`authority would further the Office’s policies requiring candor by parties and
`
`accuracy in parties’ mandatory notices under 37 C.F.R. § 42.11, and promote the
`
`goal of “just” proceedings stated in 37 C.F.R. § 42.1(b).
`
`Given the extreme facts present here, the Board should exercise its
`
`discretion to deny institution.
`
`11
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`Case IPR2016-00062
`
`IV.
`
`Institution Would Prejudice VirnetX, Yet Denial of Institution
`Would Not Unduly Prejudice Apple
`
`Instituting this proceeding would prejudice VirnetX in several ways. First,
`
`allowing another party (especially one who is time-barred) to join the already
`
`instituted IPR2015-01046 proceeding would further tip the scale of resources in
`
`favor of the petitioner. Second, the public interests regarding the patentability of
`
`the patent are being addressed through the three challenges pending before the
`
`Office. Apple and the public’s interests regarding the patentability of the patent
`
`will be served through those avenues. And given Apple’s challenges in its petition
`
`track those of Mangrove’s, joining Apple here would be nothing more than piling
`
`on the stack of challenges VirnetX faces for this patent – forcing VirnetX to devote
`
`more time and money to yet another challenge to the same patent. Third, by
`
`joining Apple despite the time-bar of 35 U.S.C. § 315(b), an unjust outcome could
`
`occur where Mangrove is terminated from the proceeding, leaving Apple as sole
`
`petitioner. This is not permitted by statute for the reasons VirnetX explained
`
`above and in its opposition to Apple’s motion for joinder. This is all despite
`
`Apple’s previous jury trial, Federal Circuit appeal, inter partes reexamination, and
`
`three IPR petitions, and its inability to pursue its own IPR proceeding because it is
`
`time-barred.
`
`If Congress’s statements about avoiding serial harassment of patent owners
`
`are to have any meaning, given the extreme facts of this case, the Board must
`
`12
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`Case IPR2016-00062
`
`utilize the tools Congress gave it to deny this IPR. As the Board recognized when
`
`denying Apple’s previous IPR petitions filed by RPX, underlying the AIA is
`
`“express legislative intent concerning the need for quiet title.” IPR2014-00171,
`
`Paper No. 57 at 10 (redacted) (June 5, 2014); IPR2014-00172, Paper No. 57 at 10
`
`(redacted) (June 5, 2014). With Apple now filing its sixth inter partes Office
`
`challenge to the ’135 patent, Apple asks for its private interests to trump
`
`Congressional intent.
`
`Although VirnetX would be unduly prejudiced, Apple would face no undue
`
`prejudice from denial of the Petition. Apple has now filed at least six inter partes
`
`Office challenges to the ’135 patent, either by itself or as a real party-in-interest
`
`through proxy RPX. One of these proceedings (the ’1,682 reexamination) is
`
`ongoing. Apple also deployed a litigation attack to the validity of the ’135 patent,
`
`but Apple’s validity arguments were rejected by both the jury and the Federal
`
`Circuit.
`
`While Apple contends that denial of institution would prejudice Apple, its
`
`assertion is irrational. Apple asserts prejudice based on being “unable to
`
`participate” in IPRs involving the ’135 patent. Paper No. 2 at 4. This could only
`
`make sense if Apple had some right to participate in the IPRs, which it does not,
`
`given its time-barred status. The Board has rejected similar arguments of prejudice
`
`based on a petitioner’s inability to challenge certain claims of a patent. See, e.g.,
`
`13
`
`

`
`Case IPR2016-00062
`
`Standard Innovation Corp. v. Lelo, Inc., IPR2014-00907, Paper No. 10 at 10
`
`(Dec. 1, 2014). Moreover, Apple has participated all along in its reexamination of
`
`the ’135 patent, so denying institution here would not leave Apple without its own
`
`challenge to the ’135 patent.
`
`Apple also argues it would be prejudiced because denying institution would
`
`not allow “Apple to ensure the Board does not resolve an issue in this proceeding
`
`that would impact” the pending reexaminations involving the ’135 patent. Paper
`
`No. 2 at 5. Apple’s supposition that it may “ensure” the Board does or does not do
`
`something is both an affront to the Board and incorrect. .
`
`Beyond the prejudice VirnetX would suffer from institution and Apple’s
`
`lack of prejudice, “the efficient administration of the Office” and the strong
`
`concern about “serial petitions challenging claims already involved in an instituted
`
`proceeding” underpinning 35 U.S.C. §§ 315(d) and 325(d) should control in this
`
`case. See SAS Institute, Inc. v. Complementsoft, LLC, IPR2013-00581, Paper No.
`
`15 at 22-23 (Dec. 30, 2013). Consistent with these principles and the cases
`
`applying them discussed above, Apple’s Petition should be denied.
`
`14
`
`

`
`V. Conclusion
`For all of the above reasons, VirnetX respectfully requests that the Board
`
`Case IPR2016-00062
`
`deny Apple’s Petition.2
`
`
`
`
`Dated: January 8, 2016
`
`
`
`
`
`
`
`Respectfully submitted,
`
`By: /Joseph E. Palys/
`Joseph E. Palys
`Registration No. 46,508
`
`Counsel for VirnetX Inc.
`
`
`2 If trial is instituted, VirnetX reserves its rights to raise additional arguments
`
`as to why Petitioner has failed to carry its burden and why the claims should be
`
`confirmed.
`
`15
`
`

`
`Case IPR2016-00062
`
`CERTIFICATE OF SERVICE
`
`Pursuant to 37 C.F.R. § 42.6(e), I certify that I caused to be served on the
`
`counsel for Petitioner a true and correct copy of the foregoing Patent Owner’s
`
`Preliminary Response to Petition for Inter Partes Review of U.S. Patent No.
`
`6,502,135 by electronic means on the date below at the following address of
`
`record:
`
`Counsel for Apple Inc.:
`
`Jeffrey P. Kushan
`Scott Border
`Thomas A. Broughan III
`Sidley Austin LLP
`1501 K Street NW
`Washington, DC 20005
`iprnotices@sidley.com
`
`
`
`
`
`
`
`
`
`Respectfully submitted,
`
`By: /Joseph E. Palys/
`Joseph E. Palys
`Counsel for VirnetX Inc.
`
`Dated: January 8, 2016

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