Trials@uspto.gov
`571.272.7822
`
`Paper No. 12
`
` Filed: February 4, 2016
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`BLACK SWAMP IP, LLC,
`Petitioner,
`
`v.
`
`VIRNETX INC.,
`Patent Owner.
`____________
`
`Case IPR2016-00167
`Patent 7,490,151 B2
`____________
`
`
`
`Before MICHAEL P. TIERNEY, KARL D. EASTHOM, and
`STEPHEN C. SIU, Administrative Patent Judges.
`
`SIU, Administrative Patent Judge.
`
`
`
`DECISION
`Institution of Inter Partes Review
`37 C.F.R. § 42.108
`
`
`
`I.
`
`INTRODUCTION
`Black Swamp, LLC. (“Petitioner” or “Black Swamp”) filed a Petition
`(“Pet.”) on November 6, 2015 (Paper 1) requesting inter partes review of
`claims 1, 2, 6–8, and 12–14 of U.S. Patent No. 7,490,151 B2 (“the ’151
`
`
`571.272.7822
`
`Paper No. 12
`
` Filed: February 4, 2016
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`BLACK SWAMP IP, LLC,
`Petitioner,
`
`v.
`
`VIRNETX INC.,
`Patent Owner.
`____________
`
`Case IPR2016-00167
`Patent 7,490,151 B2
`____________
`
`
`
`Before MICHAEL P. TIERNEY, KARL D. EASTHOM, and
`STEPHEN C. SIU, Administrative Patent Judges.
`
`SIU, Administrative Patent Judge.
`
`
`
`DECISION
`Institution of Inter Partes Review
`37 C.F.R. § 42.108
`
`
`
`I.
`
`INTRODUCTION
`Black Swamp, LLC. (“Petitioner” or “Black Swamp”) filed a Petition
`(“Pet.”) on November 6, 2015 (Paper 1) requesting inter partes review of
`claims 1, 2, 6–8, and 12–14 of U.S. Patent No. 7,490,151 B2 (“the ’151
`
`
`
`
`
`IPR2016-00167
`Patent 7,490,151 B2
`
`
`Patent,” Ex. 1001). Along with the Petition, Petitioner filed a Motion for
`Joinder (Paper 2, “Mot.”) with IPR2015-01047, Mangrove Partners Master
`Fund, Ltd. v. VirnetX Inc. (the “Mangrove proceeding”), a pending inter
`partes review involving the ’151 patent.
`VirnetX Inc. (“Patent Owner” or “VirnetX”) filed a Preliminary
`Response (Paper 10, “Prelim. Resp.”) on January 22, 2016 and an Opposition
`to the Motion for Joinder (Paper 7, “Opp.”) on December 7, 2015. For the
`reasons described below, we institute an inter partes review of all the
`challenged claims and grant Petitioner’s Motion for Joinder.
`
`II. ANALYSIS
`An inter partes review may be joined with another inter partes review,
`subject to the provisions of 35 U.S.C. § 315(c), which governs joinder of inter
`partes review proceedings:
`(c) JOINDER. – If the Director institutes an inter partes review,
`the Director, in his or her discretion, may join as a party to that
`inter partes review any person who properly files a petition
`under section 311 that the Director, after receiving a
`preliminary response under 313 or the expiration of the time for
`filing such a response, determines warrants the institution of an
`inter partes review under section 314.
`
`As the moving party, Petitioner bears the burden of proving that it is
`entitled to the requested relief. 37 C.F.R. § 42.20(c). A motion for joinder
`should: (1) set forth the reasons joinder is appropriate; (2) identify any new
`grounds of unpatentability asserted in the petition; and (3) explain what
`impact (if any) joinder would have on the trial schedule for the existing
`review.
`
`2
`
`
`
`
`IPR2016-00167
`Patent 7,490,151 B2
`
`
`
`
`
`The Petition in this proceeding has been accorded a filing date of
`November 6, 2015 (Paper 4), which satisfies the joinder requirement of
`being filed within one month of our instituting a trial in IPR2015-01047
`(i.e., within one month of October 7, 2015). 37 C.F.R. § 42.122.
`The Petition in this proceeding asserts the same grounds as those on
`which we instituted review in IPR2015-01047. On October 7, 2015, we
`instituted a trial in the IPR2015-01047 matter on the following grounds:
`Reference(s)
`Basis
`Claims challenged
`
`§ 102
`§ 103
`§ 103
`§ 103
`
`1, 2, 6–8, and 12–14
`1, 2, 6–8, and 12–14
`1, 2, 6–8, and 12–14
`1, 2, 6–8, and 12–14
`
`Kiuchi1
`Kiuchi and RFC 10342
`Kiuchi and Rescorla3
`Kiuchi and RFC 1034 and
`Rescorla
`
`Mangrove Partners Master Fund, Ltd. v. VirnetX Inc., Case IPR2015-01047,
`slip. op. at 12 (PTAB October 7, 2015) (Paper 11) (’1047 Decision); see also
`IPR2015-01047, slip. op. at 1–2 (PTAB December 10, 2015) (Paper 24)
`(’1047 Errata).
`In view of the identity of each of the challenges in the instant Petition
`to at least one challenge presented in the petition in IPR2015-01047, we
`
`
`1 Takahiro Kiuchi and Shigekoto Kaihara, C-HTTP – The Development of a
`Secure, Closed HTTP-Based Network on the Internet, PROCEEDINGS OF THE
`SYMPOSIUM ON NETWORK AND DISTRIBUTED SYSTEM SECURITY, IEEE 64–75
`(1996) (Ex. 1002, “Kiuchi”).
`2 P. Mockapetris, Domain Names – Concepts and Facilities, Network
`Working Group, Request for Comments: 1034 (1987) (Ex. 1005,
`“RFC1034”).
`3 E. Rescorla and A. Schiffman, The Secure HyperText Transfer Protocol,
`Internet Draft (Feb. 1996) (Ex. 1004, “Rescorla”).
`3
`
`
`
`
`IPR2016-00167
`Patent 7,490,151 B2
`
`
`
`institute an inter partes review in this proceeding on the same grounds as those
`on which we instituted inter partes review in IPR2015-01047.
`Patent Owner argues that “[g]iven the number of serial challenges filed
`against the ’151 patent, and the fact that several are currently pending at the
`Office, the board should invoke its authority under 35 U.S.C. §§ 315(d) and
`325(d) to deny institution of this challenge.” Prelim. Resp. 1. Patent Owner
`also argues that the instant petition is “duplicative” and presents a “burden for
`the Board and the parties.” Prelim. Resp. 4; See also, Id. 5–7. We have
`considered carefully Patent Owner’s arguments but decline to exercise our
`authority to deny institution on this ground.
`Patent Owner argues that institution should be denied because
`Petitioner’s “Petition is entirely devoid of any expert testimony in support of
`its analysis” and has, therefore, allegedly “fail[ed] to meet its burden of
`demonstrating a reasonably likelihood of prevailing in proving
`unpatentability of any challenged claim.” Prelim. Resp. 8. Patent Owner
`also argues that Petitioner’s “analysis does not rely on any expert
`testimony.” Opp. 3. Patent Owner does not demonstrate sufficiently that
`reliance on expert testimony is required or that the absence of expert
`testimony alone indicates the failure to demonstrate a reasonable likelihood
`of prevailing in proving unpatentability of a challenged claim. We are not
`persuaded by Patent Owner’s argument.
`Patent Owner argues that joinder would “increase the complexity” of
`the proceeding because “[w]hile the primary reference, Kiuchi, remains the
`same, the analyses differ throughout.” Opp. 2. In particular, Patent Owner
`argues that Petitioner “rel[ies] on Kiuchi’s ‘client-side proxy’” but that
`petitioner in IPR2015-01047 “relies on Kiuchi’s ‘client-side proxy’ and ‘C-
`
`4
`
`
`
`
`
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`IPR2016-00167
`Patent 7,490,151 B2
`
`
`HTTP name server’ for allegedly disclosing the same feature.” Opp. 2.
`According to Patent Owner, the alleged “differences . . . . would require
`VirnetX additional time to respond.” Opp. 6. We have considered carefully
`Patent Owner’s argument but are not persuaded. For example, Patent Owner
`does not demonstrate sufficiently that any alleged difference in rationale
`presented by Petitioner would be sufficiently different and complex to
`preclude joinder. Nor does Patent Owner demonstrate adequately that the
`alleged “additional time to respond,” if any, would be prohibitive.
`Patent Owner also argues that if joinder is granted, “an altogether new
`ground would be added to the Mangrove proceeding” and that the
`“altogether new ground would be added in the proceeding necessitating
`significant additional time for Patent Owner to respond.” Opp. 3, 4. Patent
`Owner’s argument is moot in view of the Errata issued on December 10,
`2015 (Paper 24) in IPR2015-01047.
`Patent Owner argues that joinder should be denied because “[this]
`petition represents the tenth attempt to challenge the validity of the ’151
`patent at the Office” and would, therefore, allegedly prevent “a just, speedy,
`and inexpensive review of a patent.” Opp. 6, 7 (citing IPR2013-00354,
`IPR2013-00376, IPR2014-00173, IPR2014-00610, IPR2015-00187,
`IPR2015-01047, IPR2016-00063, and IPR2016-00167). We have
`considered carefully Patent Owner’s arguments but find them unpersuasive.
`For example, even assuming Patent Owner is correct that there have been
`nine previous challenges to the patentability of the claims of the ’151 patent,
`Patent Owner does not assert or demonstrate sufficiently that any of the
`alleged matters involve Black Swamp at all.
`
`5
`
`
`
`
`IPR2016-00167
`Patent 7,490,151 B2
`
`
`
`
`Patent Owner argues that joinder would “prejudice VirnetX because it
`appears that Black Swamp’s purpose for filing its petition is nothing more
`than an attempt at extortion.” Opp. 7. Aside from conjecture and
`speculation, Patent Owner does not provide sufficient evidence to indicate
`the purpose of this petition. Moreover, even if such evidence were to be
`presented, Patent Owner does not demonstrate persuasively that the purpose
`of filing a petition bears on whether to institute or whether to grant or deny
`joinder.
`Patent Owner argues that “allowing another party to join . . . would
`further tip the scale of resources in favor of the petitioner.” Prelim. Resp.
`10. Patent Owner does not provide sufficient detail as to how joining
`Petitioner would “tip the scale of resources” or how much “tipping of the
`scale,” if any, would occur. Without such a showing, we can only surmise
`that any “tipping of scales,” assuming there would be any “tipping” at all,
`would be inconsequential for purposes of determining joinder. Hence, we
`are unpersuaded by Patent Owner’s argument.
`As a Petitioner in IPR2015-01047, Black Swamp shall adhere to the
`existing schedule of IPR2015-01047. All filings by Black Swamp in
`IPR2015-01047 shall be consolidated with the filings of the IPR2015-01047
`petitioner (i.e., Mangrove), unless the filing involves an issue unique to
`Black Swamp or states a point of disagreement related to the consolidated
`filing. In such circumstances, Black Swamp may make a separate filing of
`no more than five pages, without prior authorization of the Board. The page
`limits set forth in 37 C.F.R. § 42.24 will apply to all consolidated filings.
`Black Swamp is bound by any discovery agreements, including
`deposition arrangements, between Patent Owner and the IPR2015-01047
`
`6
`
`
`
`
`
`
`IPR2016-00167
`Patent 7,490,151 B2
`
`
`petitioner and shall not seek any discovery beyond that sought by the
`IPR2015-01047 petitioner (i.e., Mangrove). Patent Owner shall not be
`required to provide any additional discovery or deposition time as a result of
`joinder. The IPR2015-01047 petitioner shall designate attorneys to conduct
`the cross-examination of any witness produced by Patent Owner and the
`redirect examination of any other witness, within the timeframes set forth in
`37 C.F.R. § 42.53(c) or agreed to by Patent Owner and the IPR2015-01047
`petitioner (i.e., Mangrove). No individual petitioner will receive any
`additional cross-examination or redirect examination time. Moreover, if an
`oral hearing is requested and scheduled, the IPR2015-01047 petitioner (i.e.,
`Mangrove) shall designate attorney(s) to present at the oral hearing in a
`consolidated argument.
`The Board expects Black Swamp and Patent Owner to resolve any
`disputes between them and/or with the IPR2015-01047 petitioner (i.e.,
`Mangrove) or with Apple, Inc., and to contact the Board only if such matters
`cannot be resolved.
`
`
`
`III. ORDER
`For the reasons given, it is
`ORDERED that Petitioner’s Motion for Joinder is granted;
`
`FURTHER ORDERED that IPR2016-00167 is instituted and joined
`
`with IPR2015-01047;
`FURTHER ORDERED that the grounds on which IPR2015-01047
`was instituted are unchanged and no other grounds are included in the joined
`proceeding;
`
`7
`
`
`
`
`
`
`IPR2016-00167
`Patent 7,490,151 B2
`
`
`
`FURTHER ORDERED that the Scheduling Order entered in
`IPR2015-01047 (Paper 12) as modified by the Order changing due date 1
`(Paper 20) and the Order changing due date 1 and 2 (Paper 34) remain
`unchanged and shall govern the schedule of the joined proceedings;
`FURTHER ORDERED that, throughout the joined proceeding,
`Mangrove will file papers, except for motions that do not involve the other
`party or parties, as a single, consolidated filing; that the filing party
`(Mangrove) will identify each such filing as a Consolidated Filing;
`FURTHER ORDERED that any separate filing by Black Swamp in
`IPR2015-01047 must not exceed five pages, without prior authorization of
`the Board;
`FURTHER ORDERED that Black Swamp is bound by any discovery
`agreements between Patent Owner and the other petitioner in IPR2015-
`01047 (i.e., Mangrove) and that Black Swamp shall not seek any discovery
`beyond that sought by the other petitioner in IPR2015-01047 (i.e.,
`Mangrove);
`FURTHER ORDERED that all petitioners in IPR2015-01047 (i.e.,
`Mangrove, Apple, Inc., and Black Swamp) shall collectively designate
`attorney(s) to conduct the cross-examination of any witness produced by
`Patent Owner and the redirect examination of any other witness; within the
`timeframes set forth in 37 C.F.R. § 42.53(c) or agreed to by the parties;
`FURTHER ORDERED that all petitioners in IPR2015-01047 (i.e.,
`Mangrove, Apple, Inc., and Black Swamp) shall collectively designate
`attorney(s) to present at the oral hearing, if requested and scheduled, in a
`consolidated argument;
`FURTHER ORDERED that IPR2016-00167 is terminated under
`
`8
`
`
`
`
`
`
`IPR2016-00167
`Patent 7,490,151 B2
`
`
`37 C.F.R. § 42.72 and all further filings in the joined proceedings are to be
`made in IPR2015-01047;
`FURTHER ORDERED that a copy of this Decision will be entered
`into the record of IPR2015-01047; and
`FURTHER ORDERED that the case caption in IPR2015-01047 shall
`be changed to reflect joinder with this proceeding in accordance with the
`attached example.
`
`For PETITIONER:
`Abraham Kasdan
`James T. Bailey,
`WIGGIN AND DANA LLP
`akasdan@wiggin.com
`jtb@jtbaileylaw.com
`
`Jeffrey P. Kushan
`Thomas A. Broughan, III
`Scott M. Border
`SIDLEY AUSTIN LLP
`jkushan@sidley.com
`tbroughan@sidley.com
`sborder@sidley.com
`
`Thomas H. Martin
`Wesley C. Meinerding
`MARTIN & FERRARO, LLP
`1557 Lake O’Pines Street, NE
`Hartville, OH 44632
`
`For PATENT OWNER:
`
`Joseph E. Palys
`Naveen Modi
`PAUL HASTINGS LLP
`
`9
`
`
`
`
`
`
`
`
`IPR2016-00167
`Patent 7,490,151 B2
`
`josephpalys@paulhastings.com
`naveenmodi@paulhastings.com
`
`
`
`10
`
`
`
`
`Trials@uspto.gov
`571.272.7822
`
`
`
`
`Example Case Caption for Joined Proceeding
`
`Paper No. 12
`Filed: February 4, 2016
`
`
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`THE MANGROVE PARTNERS MASTER FUND, LTD., APPLE, INC., and
`BLACK SWAMP, LLC,
`Petitioner,
`
`v.
`
`VIRNETX INC.,
`Patent Owner.
`____________
`
`Case IPR2015-010474
`Patent 7,490,151 B2
`____________
`
`
`
`
`
`
`
`
`
`4 Apple, Inc. and Black Swamp, LLC, who filed petitions in IPR2016-00063 and
`IPR2016-00167, respectively, have been joined as Petitioners in the instant
`proceeding.
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