Paper No. 12
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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`____________________
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`___________________
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`APPLE INC.
`Petitioner,
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`v.
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`VIRNETX, INC.,
`Patent Owner
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`Patent No. 6,502,135
`____________________
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`Inter Partes Review No. IPR2016-00062
`__________________________________________________________________
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`PETITIONER’S REPLY IN SUPPORT OF ITS MOTION FOR JOINDER
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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`____________________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`___________________
`
`APPLE INC.
`Petitioner,
`
`v.
`
`VIRNETX, INC.,
`Patent Owner
`
`Patent No. 6,502,135
`____________________
`
`Inter Partes Review No. IPR2016-00062
`__________________________________________________________________
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`PETITIONER’S REPLY IN SUPPORT OF ITS MOTION FOR JOINDER
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`Petitioner’s Reply on Joinder in IPR2016-00062
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`I.
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`INTRODUCTION
`In its opposition, VirnetX identifies no actual effect of granting Apple’s
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`motion, and instead contends the Board has no authority to join Apple. But that
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`assertion conflicts not only with the statutory language, but with the Board’s rules
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`and prior decisions. VirnetX also complains that Apple had its chance to challenge
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`the ’135 patent via an ongoing inter partes reexamination. But VirnetX conceals its
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`unprecedented campaign to prevent conclusion of that same proceeding. Granting
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`Apple’s motion will actually mitigate the harm caused by VirnetX’s actions in the
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`reexamination, which were made possible by the systemic flaws in that system
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`which Congress sought to fix with the IPR system. Joinder here is proper.
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`II. ARGUMENT
`A. The Merits Warrant Joinder
`In its motion, Apple presented a petition with identical grounds and a nearly
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`identical record of evidence, and agreed to conditions including: (i) agreeing to
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`follow the existing schedule, (ii) not advancing independent expert testimony, and
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`(iii) coordinating its participation with Mangrove. Paper 2 at 2. In numerous cases
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`presenting similar circumstances, the Board has found joinder appropriate. Dell
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`Inc. v. Network-1 Sec. Soln. Inc., IPR2013-00385, Paper 17 (July 29, 2013);
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`Oracle v. Crossroads, IPR2015-00825, Paper 20 (Sept. 17, 2015); Perfect World
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`Ent., Inc. v. Uniloc USA, Inc., IPR2015-01026, Paper 10 (Aug. 3, 2015); LG Elec.
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`Inc. v. Innovative Display Tech., IPR2015-00493, Paper 10 (July 10, 2015).
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`Petitioner’s Reply on Joinder in IPR2016-00062
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`VirnetX ignores these considerations, and instead states in a conclusory
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`fashion that “joining Apple will have an impact on the ‘046 proceeding.” Opp. at 8.
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`But it nowhere reveals what that “impact” might be. It then, without any
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`justification, asks the Board to impose additional, draconian restrictions on Apple’s
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`participation, including, perversely, supplemental briefing by both parties. Id. at 9-
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`10. VirnetX’s restrictions are a transparent attempt to simply prevent Apple from
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`participating in the proceedings, while its call for supplemental briefing is both
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`inefficient and ignores the independent interests of the Board. There is simply no
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`basis for imposing such constraints in this case.
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`B. VirnetX’s “Permanent Ban” Theory Conflicts with the Statute
`VirnetX’s principal challenge to joinder is its theory that a party is
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`“permanently” barred from participating in any inter partes review under any and
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`all circumstances if its petition is filed more than a year after service of a complaint
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`for infringement. The Board has already rejected that theory, and for good reason –
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`it is contrary to the statute. IPR2015-00825, Paper 20 at 10-12; see Target v.
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`Destination Maternity, IPR2014-00508, Paper 28 (Feb 12, 2015) (expanded panel).
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`Under § 315(b), the Director is prohibited from instituting an inter partes
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`review on the basis of petition filed by a party more than a year after that party was
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`served with a complaint for infringment. But, if the Director has already instituted
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`an inter partes review, she is authorized to join any party to that instituted
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`- 2 -
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`Petitioner’s Reply on Joinder in IPR2016-00062
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`proceeding as long as: (i) that party files a petition that complies with § 311 and
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`(ii) institution on the basis of that petition is warranted under § 314. See 35 U.S.C.
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`§ 315(c). And that is precisely how both the Office and the Board have read the
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`statute. For example, Rule 122(b) waives the one year deadline in Rule 101(b)
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`where the party filing the petition seeks to join an instituted proceeding. See 37
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`C.F.R. § 42.122(b). The Board’s joinder decisions hold likewise. See, e.g.,
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`IPR2014-00385, Paper 17; IPR2015-00825, Paper 20 at 10-12. The “authority”
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`VirnetX cites in its opposition is actually a dissent in a Board decision holding
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`precisely the opposite of what VirnetX contends. Opp. at 5. Thus, under the
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`statute, joinder is proper because: (i) the Board found Apple’s petition to comply
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`with § 311, see Paper 4, and (ii) the grounds in Apple’s petition warrant institution
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`as they are the same as those upon which trial has already been instituted.
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`VirnetX nonetheless argues that “[o]nce a petitioner like Apple ‘is time-
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`barred under § 315(b) with respect to a particular patent, it is always time-barred.”
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`Opp. at 5. But that argument conflicts with the plain language of § 315(b), which
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`states “the time limitation set forth in the preceding sentence shall not apply to a
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`request for joinder under subsection (c).” (emphases added). VirnetX’s reading of
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`§ 315(b) would render its second sentence a legal nullity – it would never apply, as
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`no petition filed more than a year after service could ever be the basis of
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`participation in any proceeding. U.S. v. Atl. Research, 551 U.S. 128, 137 (2007).
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`- 3 -
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`Petitioner’s Reply on Joinder in IPR2016-00062
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`C. VirnetX’s Equities Argument Is Baseless
`VirnetX also complains about the number of petitions filed against the ’135
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`patent, seeking to portray itself as an aggrieved party unfairly subjected to serial
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`challenges to its ’135 patent. Nothing could be further from the truth.
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`VirnetX started this dispute by suing Apple in 2010. Apple promptly
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`requested inter partes reexamination of the ’135 patent, and the Office started that
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`reexamination in 2011, finding all of the challenged claims unpatentable. In 2012,
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`a jury found certain claims of the ’135 patent infringed; at that point, VirnetX
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`switched gears, and began
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`its unprecedented campaign
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`to paralyze
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`the
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`reexamination. To do so, VirnetX exploited the Office’s practice of suspending
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`party deadlines and not issuing further Office actions while a petition filed by a
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`party remains undecided. To date, VirnetX has filed at least 21 such petitions in
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`the ’1682 proceeding alone. Many are plainly frivolous – one sought to stop the
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`reexamination simply because a jury had found infringement. 95/001,682, Petition
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`(Feb. 15, 2013). Others sought reconsideration of denials of earlier petitions,
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`waivers of page and time limits, or opposed merger, etc.1 It is simply remarkable
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`that VirnetX suggests now, after doing everything in its power for the past four
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`1
`The ’1682 proceeding has entered the PTAB appeal phase, and, consistent
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`with its past practice, VirnetX filed a 109 page appeal brief, nearly three times the
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`limit allowed by the rules, along with yet another petition to waive those rules.
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`- 4 -
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`Petitioner’s Reply on Joinder in IPR2016-00062
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`years to prevent the Office from concluding the ’1682 proceeding, that proceeding
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`is Apple’s fair opportunity to address the merits of the ’135 patent.
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`Finally, VirnetX’s depiction of the history of IPR petitions against the ’135
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`patent is both wrong and irrelevant. For example, Apple’s first petitions were filed
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`within 1-year of being served with a complaint for infringement after enactment of
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`the inter partes authority. At that time, the Board had not yet interpreted § 315(b)
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`to apply to actions initiated before enactment of the statute, an interpretation Apple
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`could not appeal to the Federal Circuit. VirnetX also asserts “Apple had RPX
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`Corporation file” petitions – this grossly misrepresents those proceedings. What
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`the Board actually found was that Apple was a real-party-in-interest due to a
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`contractual relationship with RPX, not that it had anything to do with RPX’s
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`filings of the petitions. See, e.g., IPR2014-00171, Paper 49. But most importantly,
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`none of these prior decisions addressed the merits of the ’135 patent, and none
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`gave Apple an opportunity to join an instituted proceeding. The prior IPR petitions
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`VirnetX identifies are simply irrelevant to the question whether Apple may be
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`properly joined to this instituted inter partes review proceeding.
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`III. CONCLUSION
`Under the statute, the Board’s rules and prior decisions, and based on the
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`facts presented here, joinder of IPR2016-00062 to IPR2015-01046 is warranted.
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`Apple’s motion should be granted.
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`Petitioner’s Reply on Joinder in IPR2016-00062
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`Dated: January 15, 2016
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`Respectfully Submitted,
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`/Jeffrey P. Kushan/
`Jeffrey P. Kushan (Reg No. 43,401)
`Sidley Austin LLP
`1501 K Street NW
`Washington, DC 20005
`jkushan@sidley.com
`Attorney for Petitioner
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`Petitioner’s Reply on Joinder in IPR2016-00062
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`CERTIFICATE OF SERVICE
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`I hereby certify that on this 15th day of January, 2016, a copy of this
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`Petitioner’s Reply in Support of Joinder, has been served in its entirety by e-mail
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`on the following counsel of record for patent owner:
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`Joseph E. Palys
`Paul Hastings LLP
`875 15th Street NW
`Washington, DC 20005
`Telephone: (202) 551-1996
`E-mail: josephpalys@paulhastings.com
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`Naveen Modi
`Paul Hastings LLP
`875 15th Street NW
`Washington, DC 20005
`Telephone: (202) 551-1990
`E-mail: naveenmodi@paulhastings.com
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`
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`Respectfully submitted,
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`/Jeffrey P. Kushan/
`Jeffrey P. Kushan
`Reg. No. 43,401
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`
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`Dated: January 15, 2016
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