Paper No.
`Filed: October 4, 2013
`
`Filed on behalf of: VirnetX Inc.
`
`By:
`
`Joseph E. Palys
`Naveen Modi
`
`Finnegan, Henderson, Farabow,
`Garrett & Durmer, L.L.P.
`11955 Freedom Drive
`
`Reston, VA 20190-5675
`Telephone: 571-203-2700
`Facsimile: 202-408-4400
`
`E-mail: joseph.pa1ys@finnegan.com
`naveen.modi@finnegan.com
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`APPLE INC.
`
`Petitioner
`
`V.
`
`VIRNETX INC.
`
`Patent Owner
`
`Case IPR20 13-003 93
`
`Patent 7,418,504
`
`Patent Owner’s Preliminary Response
`to Petition for Inter Partes Review
`
`of U.S. Patent No. 7,418,504
`
`EXHIBIT 1006
`
`Black Swamp IP, LLC v. VirnetX, Inc.
`IPR of U.S. Patent No. 7,418,504
`
`

`
`Case No. IPR2013-00393
`
`Table of Contents
`
`I.
`
`II.
`
`Introduction.................................................................................................... ..I
`
`The Petition Fails to Meet the Requirements for Instituting an
`Inter Partes Review ....................................................................................... ..3
`
`A.
`
`The Petition Must Be Denied Under 35 U.S.C. § 315(b) ................... ..4
`
`1.
`
`2.
`
`3.
`
`Procedural History Relevant to § 315(b) .................................. ..5
`
`The Plain Meaning of § 315(b) and the Board’s
`Precedent Bar the Petition ......................................................... ..7
`
`The Legislative History Confirms that the Petition Is
`Barred ........................................................................................ ..9
`
`4.
`
`Denying the Petition Is Not Unjust ......................................... ..11
`
`B.
`
`The Petition Fails to Comply with 37 C.F.R. § 42.104(b)(4) ........... .. 12
`
`The Board Should Not Institute Based on the Petition’s
`
`Redundant Grounds ........................................................................... ..14
`
`D.
`
`The Petition Fails to Establish a Reasonable Likelihood of
`
`Prevailing as to Any Challenged Claim ............................................ .. I9
`
`1.
`
`The Two Documents Called “Aventail” Cannot
`
`Anticipate Claims 1-3, 5-8, and 14-60 .................................... ..19
`
`2.
`
`3.
`
`Avemfail and Beser Cannot Render Obvious Claims 3, 31,
`32, 55, and 56 .......................................................................... ..21
`
`Avemfail Cannot Render Obvious Claims 31, 32, 55, and
`56 ............................................................................................. ..21
`
`III.
`
`The Petition’s Claim Constructions Are Flawed and Should Be
`
`Rejected ....................................................................................................... ..22
`
`A.
`
`Overview of the ’504 Patent .............................................................. ..23
`
`B.
`
`“Domain Name” (Claims 1, 2, 15-18, 20, 21, 24-26, 35-37, 39,
`40, 42, 44, 45, 48-50, 59, and 60) ..................................................... ..27
`
`

`
`Case No. IPR201 3-003 93
`
`C.
`
`D.
`
`E.
`
`F.
`
`G.
`
`H.
`
`1.
`
`“Top-Level Domain Name” (Claims 2 and 3) .................................. ..28
`
`“Domain Name Service” (Claims 1 and 60) ..................................... ..31
`
`“Domain Name Service System” (Claims 1, 5, 7, 8, 14-17, 19-
`24, 27, 33, 35, 36, 41, 48, 51, 57, 59, and 60) ................................... ..33
`
`“Secure Communication Link” (Claims 1, 16-18, 22, 24, 26-29,
`33, 35, 36, 40-42, 46, 48, 50-53, 57, 59, and 60) .............................. ..35
`
`The “Indication” Phrases (Claims 1, 17, 24, 36, 48, and 60) ............ ..39
`
`“Transparently” (Claims 27 and 51) ................................................. ..42
`
`“Secure Name” (Claims 25 and 49) .................................................. ..43
`
`If Trial Is Instituted, VirnetX Requests an 18-Month Schedule ................. ..46
`
`.<
`
`Conclusion ................................................................................................... ..47
`
`

`
`Table of Authorities
`
`Case No. IPR2013-00393
`
`Page(s)
`
`FEDERAL CASES
`
`Apple Inc. v. Int ’l Trade Comm ’n,
`No. 2012-1338, --- F.3d —---,
`2013 WL 4007535 (Fed. Cir. Aug. 7, 2013) .................................................... ..20
`
`Conn. Nat’l Bank v. Germain,
`503 U.S. 249 (1992) ............................................................................................ ..9
`
`Garmin Int 7, Inc. v. Cuozzo Speed Techs. LLC,
`IPR2012-00001 (Jan. 9, 2013) Paper No. 15 ........................................ .. 22-23, 37
`
`Graham v. John Deere Co. ofKansas City,
`383 U.S. 1 (1966) .............................................................................................. ..21
`
`In re Bigio,
`381 F.3d 1320 (Fed. Cir. 2004) ........................................................................ ..37
`
`In re Zletz,
`893 F.2d 319 (Fed. Cir. 1989) .......................................................................... ..22
`
`LaRose Indus., LLC v. Capriola Corp.,
`1PR2013-00120 (July 22, 2013) Paper No. 20 ........................................... ..14, 18
`
`Liberty Mut. Ins. Co. v. Progressive Cas. Ins. Co.,
`CBM2012-00003 (Oct. 25, 2012) Paper No. 7 ................................. ..4, 14, 15, 18
`
`Motorola Solutions, Inc. v. Mobile Scanning Techs., LLC,
`IPR2013-00093 (Apr. 29, 2013) Paper No. 28 ........................................... ..23, 37
`
`Phillips v. A WH Corp.,
`415 F.3d 1303 (Fed. Cir. 2005) (en banc) ........................................................ ..22
`
`Universal Remote Control, Inc. v. Universal Elecs., Inc.,
`IPR2013-00168 (Aug. 26, 2013) Paper No. 9 ........................................ ..4-5, 8, 9
`
`Xilinx, Inc. v. Intellectual Ventures I LLC,
`IPR2013-00112 (June 27, 2013) Paper No. 14 ................................................. ..37
`
`iii
`
`

`
`Case No. IPR20 1 3-003 93
`
`ZTE Corp. & ZTE (USA) Inc. v. Com‘entGuard Holdings Inc.,
`IPR2013-00134 (June 19, 2013) Paper No. 12 ................................................. ..37
`
`FEDERAL STATUTES
`
`35 U.S.C. § 103(a) ................................................................................................. ..21
`
`35 U.S.C. § 31103) ................................................................................................. ..20
`
`35 U.S.C. § 313 ........................................................................................................ ..1
`
`35 U.S.C. § 314(a) ................................................................................................. ..19
`
`35 U.S.C. § 315(b) .......................................................................................... ..passim
`
`35 U.S.C. § 316(a)(1) ............................................................................................. ..46
`
`FEDERAL REGULATIONS
`
`37 C.F.R. § 42.100(b) ............................................................................................ ..22
`
`37 C.F.R. § 42.100(c) ............................................................................................. ..46
`
`37 C.F.R. § 42.104(b)(4) .............................................................................. ..3, 12, 13
`
`37 C.F.R. § 42.107 ................................................................................................... ..1
`
`OTHER AUTHORITIES
`
`157 Cong. Rec. S5429 (daily ed. Sept. 8, 2011) .............................................. .. 10, 11
`
`Meeting of the H. Comm. on Judiciary, Transcript of Markup of H.R. 1249
`(Apr. 14,2011) .................................................................................................. ..11
`
`iv
`
`

`
`Case No. IPR2013-00393
`
`I.
`
`Introduction
`
`Patent Owner VirnetX Inc. (“VimetX” or “Patent Owner”) respectfully
`
`submits this Preliminary Response in accordance with 35 U.S.C. § 313 and
`
`37 C.F.R. §42.107, responding to the Petition for Inter Partes Review (Paper
`
`No. 4, the “Petition”) filed by Apple Inc. (“Apple”).
`
`This Petition is one of seven inter partes reviews requested by Apple against
`
`VirnetX’s patents. In these inter partes reviews, Apple seeks its fourth opportunity
`
`to challenge the validity of U.S. Patent No. 7,418,504 (“the ’504 patent”). Apple’s
`
`first opportunity arose in litigation, where Apple and Cisco Systems, Inc. (“Cisco”)
`
`each challenged the validity of the ’504 patent in the Eastern District of Texas.
`
`The Apple and Cisco cases were tried before separate juries, and both juries upheld
`
`the validity of the asserted ‘S04 patent claims.
`
`(Ex. 2002, Jury Verdict Form
`
`Against Apple in Virm-;'tX, Inc. v. Apple Inc., Case No. 6:10-CV-417 (E.D. Tex.
`
`Nov. 6, 2012) (“the ’417 Litigation”); Ex. 2006, Jury Verdict Form as to Cisco in
`
`the ’417 Litigation (E.D. Tex. Mar. 14, 2013).) The court later entered final
`
`judgments upholding the validity of the ’504 patent.
`
`(Ex. 2007, Final Judgment
`
`Against Apple in the ’417 Litigation (E.D. Tex. Feb. 28, 2013); Ex. 2008, Final
`
`Judgment as to Cisco in the ’417 Litigation GED. Tex. Mar. 19, 2013).)
`
`

`
`Case No. IPR2013-00393
`
`Apple mounted its second validity challenge by requesting inter partes
`
`reexamination of the ’504 patent during the ’417 Litigation. That reexamination
`
`(Control No. 95/001,788) is ongoing.
`
`Despite having a validity challenge pending before the Office, Apple
`
`attempts to initiate its third and fourth validity challenges to the ’504 patent by
`
`filing two inter partes review petitions against the ’504 patent (this Petition and the
`
`petition in Case No. IPR2013-00394, “the ’394 Petition”). But, as explained
`
`below, institution of these proceedings is statutorily barred, and there is no reason
`
`to give Apple these additional opportunities.
`
`There are also two other ongoing proceedings at the Office against the
`
`‘S04 patent. One is an inter partes reexamination filed by Cisco (Control No.
`
`95/001,851).
`
`The Office merged that proceeding with Apple’s Control No.
`
`95/001,788. The second is an inter partes review requested by New Bay Capital,
`
`LLC (“New Bay”) (Case No. IPR20l3-00377). As a result, there are now five
`
`post-grant challenges before the Ofiice concerning the ’504 patent: Apple’s and
`
`Cisco’s inter partes reexaminations, New Bay’s inter partes review petition, and
`
`Apple’s inter partes review petitions. These proceedings are largely duplicative of
`
`one another, and instituting Apple’s inter partes reviews will only serve to
`
`duplicate efforts already undertaken in litigation and in pending reexamination of
`
`the ’504 patent.
`
`

`
`Case No. IPR20 1 3-003 93
`
`Apple’s petitions are also defective in a number of ways described below.
`
`Accordingly, the Board should not institute these proceedings.
`
`II.
`
`The Petition Fails to Meet the Requirements for Instituting an
`Inter Partes Review
`
`The Board need not waste its resources on Apple’s latest attempts to
`
`challenge the ’504 patent, because the Petition does not comply with the
`
`requirements for instituting inter partes review. Each ground will be discussed in
`
`more detail in the sections below, but in short, one defect that disposes of the entire
`
`Petition is that it is time-barred under 35 U.S.C. § 3l5(b). The Petition was filed
`
`more than one year after Apple was served with a complaint alleging infringement
`
`of the ’504 patent. Accordingly, the Petition should be denied based on the plain
`
`language of the statute, the Board’s precedent, and the relevant legislative history.
`
`Apple also violates 37 C.F.R. § 42.104(b)(4) because the Petition fails to
`
`“specify where each element of the claim is found in the prior art patents or printed
`
`publications relied upon.” 37 C.F.R. § 42.104(b)(4). It cites almost exclusively to
`
`a voluminous declaration (Ex. 1003) accompanying the Petition and not to the
`
`Aventail or Beser references themselves. Moreover, Apple fails to identify the
`
`features of Aventail and Beser that allegedly correspond to each ’504 patent claim
`
`feature.
`
`Instead, Apple broadly generalizes the disclosure of those references
`
`without discussing specific aspects of them.
`
`

`
`Case No. IPR20 l 3-00393
`
`Apple also proposes rejections that are redundant of one another and of the
`
`proposed rejections in Apple’s other inter paries review petition for the ’504 patent
`
`(the ’394 Petition). Apple does not explain any differences between its parallel
`
`proposed rejections, or explain how any particular proposed rejection improves on
`
`another in any way. Addressing these redundant grounds would significantly
`
`burden the Board and the Patent Owner, and it would cause unnecessary delay of
`
`the inter partes review proceedings, all without any added benefit. Liberty Mut.
`
`Ins. Co. v. Progressive Cas. Ins. Co., CBM2012-00003 (Oct. 25, 2012) Paper
`
`No. 7.
`
`A.
`
`The Petition Must Be Denied Under 35 U.S.C. § 315(b)
`
`The plain language of 35 U.S.C. § 315(b) compels dismissal of the Petition.
`
`The statute prohibits inter partes review of a patent based on a petition filed more
`
`than one year after the petitioner has been served with “a complaint” alleging
`
`infringement of the patent.
`
`It is undisputed that VirnetX served Apple with
`
`“a complaint” alleging infringement of the ’504 patent more than one year before
`
`the Petition was filed. Apple asks the Board to ignore this fact and instead focus
`
`on a later-served complaint, which Apple contends resets the one-year time period
`
`for filing a petition for inter partes review. The Board has already addressed this
`
`same issue in another proceeding, where it rejected Apple’s View and adopted
`
`VirnetX’s interpretation of § 315(b). Universal Remote Control, Inc. v. Universal
`
`

`
`Case No. IPR20 1 3-003 93
`
`Elecs., Inc., IPR2013-00168 (Aug. 26, 2013) Paper No. 9. As discussed below, the
`
`Board’s and VimetX’s interpretation is also supported by the relevant legislative
`
`history.
`
`Apple’s argument that dismissing the Petition would “unfairly foreclose use
`
`of the [PR system” also rings hollow given that Apple has repeatedly availed itself
`
`of the district court and the Office to challenge the ’504 patent, including in a
`
`still-pending inter partes reexamination proceeding}
`
`1. Procedural History Relevant to § 315(b)
`
`VimetX served2 its first complaint against Apple regarding the ’504 patent
`
`on February 4, 2011, in the ’417 Litigation, alleging infiingement of at least claims
`
`1, 2, 5, 6, 14-23, 26-28, 33-47, 49-52, and 57-60 of the ’504 patent (“the February
`
`2011 Complaint”).
`
`(Ex. 2009, VimetX Inc.’s First Amended Complaint in the
`
`’417 Litigation (E.D. Tex. Feb. 4, 2011).) As explained above, in the litigation
`
`1 Apple’s Petition should also not be joined with New Bay’s, if instituted, for
`
`the reasons discussed in VimetX’s Opposition to Apple’s Motion for Joinder, filed
`
`August 28, 2013.
`
`2 The February 2011 Complaint was electronically served on Apple via the
`
`Case Management/Electronic Case Files (CM/ECF) system.
`
`(See Ex. 2009 at 31,
`
`VimetX’s First Amended Complaint in the ’417 Litigation.)
`
`5
`
`

`
`Case No. IPR20 13-00393
`
`involving this complaint, which was amended3 at times throughout the case, Apple
`
`challenged the validity of the ’504 patent.
`
`It did not succeed. A jury upheld the
`
`validity of the asserted claims, and the district court entered judgment finding those
`
`claims valid. Gixs. 2002, 2007.)
`
`After obtaining the favorable jury verdict, VirnetX served Apple with
`
`another complaint (Ex. 1050) on December 31, 2012 (“the 2012 Complaint”).
`
`(Ex. 2010 at 2, Proof of Service of VirnetX Inc.’s Complaint in VirnetX Inc. v.
`
`Apple Inc., No. 6:12-CV-00855 (E.D. Tex. Dec. 31, 2012).) The 2012 Complaint
`
`asserts the same ’504 patent claims as asserted in the February 2011 Complaint,
`
`but it alleges infringement by several Apple products that were not included in the
`
`earlier complaint. (Ex. 1050 at 4-11.)
`
`Concurrent with the above litigations, Apple has also challenged the validity
`
`of the ’504 patent in the Office by initiating an inter partes reexamination Control
`
`No. 95/001,788, which remains pending. Although Apple has availed itself of
`
`several opportunities to challenge the validity of the ’504 patent, it now seeks two
`
`more opportlmities by filing the Petition at issue here and a separate petition for
`
`3 In the ’417 Litigation, VirnetX served Apple with a second amended
`
`complaint alleging infringement of the ’504 patent on April 5, 2011.
`
`(Ex. 2005,
`
`Plaintiff VirnetX Inc.’s Second Amended Complaint
`
`in the ’417 Litigation
`
`(E.D. Tex. Apr. 5, 2011).)
`
`

`
`Case No. IPR20 1 3-00393
`
`inter partes review in Case No. IPR2013-00394. These two petitions were filed in
`
`July 2013, long after Apple was first served with a complaint alleging infringement
`
`of the ’504 patent.
`
`2. The Plain Meaning of § 315(b) and the Board’s Precedent Bar
`the Petition
`
`Under 35 U.S.C. § 315(b), “[a]n inter partes review may not be instituted if
`
`the petition requesting the proceeding is filed more than 1 year after the date on
`
`which the petitioner, real party in interest, or privy of the petitioner is served with a
`
`complaint alleging infringement of the patent.”
`
`35 U.S.C. §315(b) (emphasis
`
`added). The language “a complaint” is not restrictive, and Apple agrees that it
`
`means “any complaint.” (Petition at 2.) Thus, the directive of § 315(b) is clear: if
`
`a petition is filed more than one year after the petitioner is served with any
`
`complaint, inter partes review may not be instituted. Here, Apple filed its Petition
`
`in July 2013, more than one year after it was served with the February 2011
`
`Complaint. Under the plain language of § 3 15(b), therefore, an inter partes review
`
`may not be instituted and App1e’s Petition must be dismissed.
`
`Apple contends that VirnetX’s service of the later 2012 Complaint resets the
`
`clock for purposes of §3l5(b), making its Petition timely.
`
`(See id.) Apple’s
`
`proposed statutory construction, however, turns § 315(b) on its head. According to
`
`Apple, “a petition filed within 1 year of the date any complaint alleging
`
`infringement of the patent is served on a petitioner is timely .
`
`.
`
`. .” (Id., emphases
`
`7
`
`

`
`Case No. IPR20 l 3-00393
`
`added.) But § 315(b) does not perrnissively define when a petition “is timely.”
`
`Instead, it restrictively prohibits untimely petitions, stating that an inter parres
`
`review “may go_t be instituted” if the petition is “filed more than 1 year after” the
`
`petitioner has been served with a complaint alleging infringement. See 35 U.S.C.
`
`§ 315(b) (emphasis added). Apple’s attempt to rewrite § 315(b)’s statutory bar
`
`into a permissive, standing-creating provision is contrary to the statute’s plain
`
`language and structure.
`
`Apple also argues that Ҥ 315(b) does not specify a one-year deadline that
`
`runs from the date of the E complaint served on a petitioner.” (Petition at 2,
`
`emphasis added.) But the statute need not do so because it specifies that the one-
`
`year deadline runs fi'om service of “a complain ,” i.e., E; complaint. Apple’s
`
`proposed construction—i.e., the one-year period is reset each time a patent owner
`
`serves a comp1aint—would require rewriting § 315(b) to replace “a complaint”
`
`with “the most recent complaint.” This is not what the statute says, and Apple
`
`cannot rewrite it to say so.
`
`App1e’s argument also conflicts with the Board’s precedent construing
`
`§ 315(b).
`
`In Universal Remote Control, IPR20l3-00168 Paper No. 9, the Board
`
`considered whether the one-year bar under § 315(b) would be reset if a second
`
`infringement complaint was served by the patent owner on the petitioner. The first
`
`complaint was served in 2001 while the second complaint was served in 2012.
`
`8
`
`

`
`Case No. IPR20 1 3-003 93
`
`Id. at 3. Although the second complaint was served less than 12 months before the
`
`petitioner filed its petition for inter partes review, the first complaint was not. Id.
`
`The Board rejected the petition as time-barred under § 315(b).
`
`Id. at 4.
`
`In
`
`particular, the Board disagreed that “the one-year grace period applies only to the
`
`last of a chain of multiple lawsuits or that the filing of a later lawsuit renders the
`
`service of a complaint in an earlier lawsuit to be a nullity as Petitioner argues.” Id.
`
`Here, Apple’s request that the Board consider only the 2012 Complaint, and ignore
`
`the February 2011 Complaint,
`
`is directly contrary to the Board’s decision in
`
`Universal Remote Control.
`
`3. The Legislative History Confirms that the Petition Is Barred
`
`Apple also asserts that
`
`resetting the one-year period with each new
`
`complaint would be consistent with Congress’s design for the AIA. Because the
`
`plain language of the statute is clear, however,
`
`it
`
`is unnecessary to rely on
`
`legislative history or other extrinsic evidence to show congressional intent. Conn.
`
`Nat’! Bank v. Germain, 503 U.S. 249, 253-54 (1992) (“We have stated time and
`
`again that courts must presume that a legislature says in a statute what it means and
`
`means in a statute what
`
`it says there. When the words of a statute are
`
`unambiguous, then, this first canon is also the last: ‘judicial inquiry is complete.
`
`(citations omitted)).
`
`

`
`Case No. IPR20 13-003 93
`
`To the extent
`
`the Board considers the legislative history,
`
`it supports
`
`VirnetX’s interpretation, not Apple’s. When adopting the one-year bar in § 3 l5(b)
`
`instead of a proposed six-month deadline, Congress made clear that “it is important
`
`that the section 3l5(b) deadline afford defendants a reasonable opportunity to
`
`identifl and understand the patent claims that are relevant to the litigation.
`
`It is
`
`thus appropriate to extend the section 315(b) deadline to one year.” (Ex. 2011, 157
`
`Cong. Rec. S5429 (daily ed. Sept. 8, 2011) (statement of Sen. Kyl) (emphasis
`
`added).)
`
`Thus, Congress intended the one-year period to allow defendants a
`
`reasonable opportunity to identify and understand the relevant patent claims. Here,
`
`Apple has already litigated claims of the ’504 patent to a verdict based on the
`
`February 2011 Complaint and its subsequent amendment, and the 2012 Complaint
`
`involves those same ’504 patent claims.
`
`In addition, Apple filed inter partes
`
`reexaminations on all claims of the ’504 patent by October 2011. Apple carmot
`
`claim that it needed until its 2013 petition filing date to identify and understand the
`
`relevant claims of the ’504 patent.
`
`App1e’s arguments also contravene Congress’s intent. Congress sought to
`
`avoid an open-ended process in which a petitioner could harass a patent owner
`
`with serial challenges. Congress noted that “[t]he inter partes proceeding in H.R.
`
`1249 has been carefully written to balance the need to encourage its use While at
`
`10
`
`

`
`Case No. IPR20 1 3-003 93
`
`the same time preventing the serial harassment of patent holders.” (Ex. 2003 at 72,
`
`Meeting of the H. Comm. on Judiciary, Transcript of Markup of H.R. 1249
`
`(Apr. 14, 2011) (statement of Judiciary Committee Chairman Lamar Smith).)
`
`Congress was also mindful of the “enhanced estoppels” built into the new statute,
`
`and determined that one year from the date of service of a complaint
`
`for
`
`infringement was sufficient for a defendant to determine whether to seek an
`
`inter partes review. (See Ex. 2011, 157 Cong. Rec. S5429 (daily ed. Sept. 8, 2011)
`
`(statement of Sen. Ky1).)
`
`Nothing in the legislative history of § 315(b) suggests that Congress
`
`intended to reset the one-year clock every time a patent owner served a defendant
`
`with a new complaint involving the same patent. To the contrary, Congress
`
`wanted to provide a reasonable, but limited, time in which a defendant could elect
`
`to initiate an inter partes review proceeding after being accused of infringement.
`
`Apple’s more expansive view of § 315(b) conflicts with congressional intent.
`
`4. Denying the Petition Is Not Unjust
`
`Apple also argues that “reading § 315(b) to foreclose [these] petition[s]
`
`based on the August 2010 complaint4 would be particularly unjust in this case”
`
`4 Apple’s reference here to a complaint VimetX served in August 2010 is
`
`incorrect. That complaint alleged infringement against Apple of U.S. Patent Nos.
`
`6,502,135 (“the ’135 patent”) and 7,490,151 (“the ’151 patent). In February 2011,
`
`11
`
`

`
`Case No. IPR20 1 3-003 93
`
`because inter partes review proceedings were unavailable prior to September 16,
`
`2012. (Petition at 3.) Apple’s cries of injustice lack merit because Apple has, and
`
`continues to avail itself of, multiple avenues to challenge the ’504 patent, including
`
`those in district court and in pending inter partes reexamination. Given its
`
`ongoing inter partes reexamination—the pre-AIA counterpart
`
`to inter partes
`
`review—Apple cannot claim that dismissing its Petition would be unjust or leave it
`
`without recourse.
`
`B.
`
`The Petition Fails to Comply with 37 C.F.R. § 42.l04(b)(4)
`
`Apple’s Petition is also defective for reasons apart from the time bar. A
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`petition for inter partes review “must specify where each element of the claim is
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`found in the prior art patents or printed publications relied upon.”
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`37 C.F.R.
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`§42.l04(b)(4). Apple’s Petition fails to satisfy this requirement.
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`Far from
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`identifying where claim elements are found in the asserted prior art, the Petition
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`almost never cites the asserted references.
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`Instead, the Petition discusses almost
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`exclusively its accompanying declaration (Ex. 1003). This voluminous body of
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`declarant
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`testimony serves to obscure rather than “specify” the grounds of
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`invalidity asserted in the Petition.
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`VirnetX amended the complaint
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`to allege infringement against Apple of the
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`’504 patent.
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`(Compare Ex. 2001, VirnetX’s Original Complaint
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`in the ’417
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`Litigation (E.D. Tex. Aug. 11, 2010), with Ex. 2009.)
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`12
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`Case No. IPR2013-00393
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`Further obscuring the grounds of invalidity,
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`the proposed rejections
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`improperly rely on broad generalities about what each asserted reference allegedly
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`teaches. For example, the Petition asserts that Aventail discloses the “secure
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`communication link” recited in independent claims 1, 36, and 60. But the Petition
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`does not explain what particular features in Aventail teach a secure communication
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`link.
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`(See Petition at 16-21.)
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`Instead,
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`the Petition discusses Aventail
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`in
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`generalities that paraphrase the claim language.
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`(See, e.g.,
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`id. at 17, “[T]he
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`Extranet Server would facilitate the establishment of an anonymous and encrypted
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`communication link between the client computer and the destination computer.”)
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`The Petition does not identify what in Aventail constitutes the purported secure
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`communication link.
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`Accordingly, the Petition fails to comply with § 42.104(b)(4). The Petition
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`itself does not specify where each element of the claims is found in each prior art
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`reference, nor does the Petition’s general discussion of the references identify what
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`aspects of the prior art
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`it
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`relies on.
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`Because the Petition contravenes
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`§ 42.104(b)(4), it does not demonstrate a reasonable likelihood of showing that any
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`of claims 1-3, 5-8, and 14-60 are anticipated or rendered obvious by Aventail or
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`Beser.
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`Case No. IPR2013-00393
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`C.
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`The Board Should Not Institute Based on the Petition’s
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`Redundant Grounds
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`In addition to its pending inter partes reexamination of the ’504 patent,
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`Apple has filed two petitions requesting inter partes review of the same claims of
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`the ’504 patent (this Petition and the one in Case No. IPR20l3-00394). The Board
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`should reject this Petition because it raises grounds of rejection that are internally
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`redundant and redundant in View of the proposed grounds in the "394 Petition. The
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`Board has held that it will not consider redundant grounds of rejection like App1e’s
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`because the Board must issue a final written decision in inter partes review
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`proceedings within one year of institution (or 18 months for good cause). Liberty
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`Mutt, CBM2012—00003 Paper No. 7.5 Redundant grounds place a significant
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`burden on the Board and the patent owner, and they cause unnecessary delay that
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`jeopardizes completing the inter partes review by the statutory deadline. Id.
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`In Liberty Mutual, the Board identified two types of redundant rejections:
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`(1) “horizontally” redundant rejections and (2) “vertically” redundant rejections.
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`5 Although Liberty Mutual is a decision in a covered business method
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`review, the Board has applied its reasoning to inter partes reviews based on the
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`similar considerations that apply in both types of proceedings. See, e.g., LaRose
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`Indus, LLC v. Capriola Corp., IPR20l3-00120 (July 22, 2013) Paper No. 20 at 4
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`(citing Liberty Mut., CBM2012-00003 Paper No. 7 at 2-12).
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`14
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`Case No. IPR20 1 3-00393
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`Id. at 3.
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`The Board explained that horizontally redundant rejections apply
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`“a plurality of prior art references .
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`.
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`. not in combination to complement each other
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`but as distinct and separate alternatives.”
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`Id.
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`In this type of redundancy, the
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`references “provide essentially the same teaching to meet
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`the same claim
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`limitation, and the associated arguments do not explain why one reference more
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`closely satisfies the claim limitation at
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`issue in some respects than another
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`reference, and vice versa.” Id.
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`Vertical redundancy “exists when there is assertion of an additional prior art
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`reference to support another ground of unpatentability when a base ground already
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`has been asserted against the same claim without the additional reference and the
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`Petitioner has not explained what are the relative strength and weakness of each
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`ground.” Id. at 12. Thus, an example of vertical redundancy is when a proposed
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`rejection is based on one reference alone while another proposed rejection against
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`the same claim is based on that same reference plus another reference. Apple’s
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`petitions contain both types of redundancy.
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`In the ’394 proceeding, Apple proposed four grounds of rejection against the
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`’504 patent claims:
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`Pl-1. Beser allegedly anticipates claims 1-3, 5-8, and 14-60;
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`Pl-2. Beser in view of RFC 2401 allegedly renders obvious claims 1-3,
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`5-8, and 14-60;
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`15
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`

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`Case No. IPR20 1 3-003 93
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`P1-3. Provino allegedly anticipates claims 1-3, 5-8, and 15-60; and
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`P1-4. Provino in view of Beser allegedly renders obvious claims 3, 25,
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`29-32, 49, and 53-56.
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`Here, Apple proposes additional grounds of rejection,
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`including the
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`following three:
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`P2—1. Aventail allegedly anticipates claims 1-3, 5-8, and 14-60;
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`P2-2. Aventail in view of Beser allegedly renders obvious claims 3, 31,
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`32, 55, and 56; and
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`P2-3. Aventail allegedly renders obvious claims 31, 32, 55, and 56.
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`These examples demonstrate horizontal redundancy. For example, the ’394
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`Petition’s proposed rejections of claims 1-3, 5-8, and 14-60 based on Beser and
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`Provino individually (Pl-1 and Pl-3) are horizontally redundant of one another
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`and of this Petition’s proposed Aventail rejection (P2-1). The rejections challenge
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`the same claims, but neither petition explains how any of Aventail, Beser, or
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`Provino purportedly provides a better unpatentability position than any other in
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`any respect.
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`As another example, the ’394 Petition’s proposed rejections of claims 1-3,
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`5-8, and 14-60 based on Beser (Pl-1), of claims 1-3, 5-8, and 14-60 based on Beser
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`in view of RFC 2401 (P1—2), and of claims 3, 25, 29-32, 49, and 53-56 based on
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`Provino in view of Beser (Pl-4) are horizontally redundant of this Petition’s
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`Case No. IPR2013-00393
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`proposed rejection of claims 3, 31, 32, 55, and 56 based on Aventail in view of
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`Beser (P2-2), at least for the common claims. Neither petition explains how any of
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`the ’394 Petition’s Beser, Beser—RFC 2401, or Provina-Beser proposed rejections
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`provides a better unpatentability position than this Petition’s Aventail-Beser
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`proposed rejection, or vice versa.
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`As yet another example, the ’394 Petition’s proposed rejection of dependent
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`claims 3, 25, 29-32, 49, and 53-56 based on Provino in view of Beser (Pl-4) is
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`horizontally redundant of this Petition’s proposed rejections of claims 3, 31, 32,
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`55, and 56 based on Aventail in view of Beser alone (P2-2) and on Aventail alone
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`(P2-3), at least for common claims 3, 31, 32, 55, and 56. (See ’394 Petition at 55-
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`58.) Neither Petition explains how either of the proposed Aventail-Beser or
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`Avemfail-only rejections of the dependent claims improves upon the Provino-Beser
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`rejection of the dependent claims proposed, or vice versa.
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`The above examples also demonstrate vertical redundancy. For example,
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`the Petition’s proposed Aventail anticipation rejections (P2-1) are vertically
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`redundant of the proposed Aventail-Beser and Aventail obviousness rejections
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`(P2-2 and P2-3), at least for common claims 31, 32, 55, and 56. Apple does not
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`explain how Aventail alone provides a better unpatentability position for claims 31,
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`32, 55, and 56 than Aventail-Beser, or vice versa. Thus, either proposed rejection
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`is just an “assertion of an additional prior art reference to support another ground
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`17
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`Case No. IPR201 3-00393
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`of unpatentability when a base ground already has been asserted against the same
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`claim without the additional reference,” and “the Petitioner has not explained what
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`a