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`Paper No.
`Filed: March 5, 2017
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`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
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`Filed on behalf of: VirnetX Inc.
`By:
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`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
`
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`UNITED STATES PATENT AND TRADEMARK OFFICE
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`BEFORE THE PATENT TRIAL AND APPEAL BOARD
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`BLACK SWAMP IP, LLC
`Petitioner
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`v.
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`VIRNETX INC.
`Patent Owner
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`Case IPR2016-00693
`Patent 7,418,504
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`Patent Owner’s Identification of New Issues in Petitioner’s Reply Brief
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`Case No. IPR2016-00693
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`Patent Owner identifies arguments presented in Black Swamp IP LLC’s
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`Reply Brief (Paper No. 12, “Reply Brief”) believed to be improper.1 Specifically,
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`as discussed below, the Reply Brief is improper at least because it presents a new
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`claim mapping and new claim interpretation that go beyond properly responding to
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`VirnetX’s Patent Owner Response (Paper No. 10, “Response”). The new
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`arguments contained in the Reply Brief should not be considered by the Board.
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`A petitioner’s reply “may only respond to arguments raised in the
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`corresponding . . . patent owner response.” 37 C.F.R. § 42.23(b). In its reply,
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`moreover, a petitioner may not “embark in a new direction with a new approach as
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`compared to the position originally taken in the Petition.” Apple Inc. v. e-Watch,
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`Inc., IPR2015-00412, Paper No. 50 at 44 (May 6, 2016). A reply brief will exceed
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`the scope permitted by § 42.23(b) if it, for example, introduces a new claim
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`mapping or new claim interpretation. See, e.g., In re NuVasive, 841 F.3d 966,
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`972–73 (Fed. Cir. 2016) (finding lack of requisite notice to patent owner where
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`1 In an email dated February 28, 2017, the Patent Trial and Appeal Board
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`authorized Patent Owner “to file a brief addressing the new issues alleged to be
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`raised by Petitioner in Petitioner’s reply brief,” which “clearly identif[ies] each
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`alleged new issue in Petitioner’s reply brief,” but that does not present any “new
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`arguments.”
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`1
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`petitioner’s reply provided a new claim mapping); cf. SAS Institute, Inc. v.
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`Case No. IPR2016-00693
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`ComplementSoft, LLC, 825 F.3d 1341, 1351 (Fed. Cir. 2016) (vacating a final
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`written decision where a party lacked notice as to a new claim interpretation).
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`As the Board has explained, “[a]ccepting such belatedly presented new
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`arguments would be unjust.” Apple, IPR2015-00412, Paper No. 50 at 44; see also
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`Altraire Pharm., Inc. v. Paragon Bioteck, Inc., PGR2015-00011, Paper No. 38 at 1
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`(May 18, 2016) (explaining that a petitioner’s reply may not “depart from the
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`position originally taken in the Petition and embark in a new direction with a new
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`approach”). For this reason, the Federal Circuit has stressed that “[i]t is of the
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`utmost importance that petitioners in the IPR proceedings adhere to the
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`requirement that the initial petition identify ‘with particularity’ the ‘evidence that
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`supports the grounds for the challenge to each claim.” Intelligent Bio-Systems, Inc.
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`v. Illumina Cambridge, Ltd., 821 F.3d 1359, 1369 (Fed. Cir. 2016) (citing 35
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`U.S.C. § 312(a)(3)). “Unlike district court litigation—where parties have greater
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`freedom to revise and develop their arguments over time and in response to newly
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`discovered material—the expedited nature of IPRs bring with it an obligation for
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`petitioners to make their case in their petition to institute.” Id. In fact, where a
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`petitioner’s reply exceeds the scope permitted by § 42.23(b), the Board need not
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`“parse the reply brief to determine which, if any, parts of that brief are responsive
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`2
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`and which are improper.” Id. (citing Office Patent Trial Practice Guide, 77 Fed.
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`Case No. IPR2016-00693
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`Reg. 48,756, 48,767 (Aug. 14, 2012)).
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`The Reply Brief filed by Black Swamp presents at least two improper new
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`issues:
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`New Issue #1: The Reply Brief attempts to map the alleged prior art,
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`Kiuchi, to the claimed “secure communication link” in two different ways, one of
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`which is consistent with the Petition and one of which is not. Specifically, the
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`Reply Brief first argues, consistent with the Petition, that “Kiuchi discloses
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`establishing a secure communication link between the client-side proxy and the
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`server-side proxy.” Reply Brief at 21; see also Pet. at 23 (“the C-HTTP name
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`server facilitates the establishment and operation of a secure communication link
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`between the client-side proxy and the server-side proxy”); Response at 34–36
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`(explaining why this first mapping is wrong). But the Reply Brief then deviates
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`from the Petition, arguing that “the secure communication link could occur
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`between any of the entities in Kiuchi (not just between the server-side proxy and
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`the client-side proxy).” Reply Brief at 21. Moreover, the Reply Brief argues that
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`“because the client-side proxy and the C-HTTP name server communicate securely
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`with one another, there is a secure communication link therebetween.” Reply Brief
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`at 22. Neither the general mapping (that “the secure communication link could
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`occur between any of the entities in Kiuchi”) nor the more specific mapping (that a
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`3
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`“secure communication link” could occur between “the client-side proxy and the
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`Case No. IPR2016-00693
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`C-HTTP name server”) was presented in the Petition.
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`New Issue #2: The Reply Brief argues that independent claims 1, 36, and
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`60 should be interpreted such that “the ‘indication’ claim elements and the alleged
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`‘establishing’ claim elements are not separate claim elements.” Reply Brief at 14;
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`see also id. at 16 (“As discussed above, the ‘indication’ claim elements and alleged
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`‘establishing’ claim elements are not separate claim elements in independent
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`claims 1, 36, and 60.”). According to Black Swamp, this is so because (1) “the
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`preambles of independent claims 1 and 60 are clearly non-limiting statements of
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`intended use . . . [that] should be accorded no patentable weight,” and (2) “the
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`recitations of ‘supports establishing a secure communication link’ in the bodies of
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`independent claims 1, 36, and 60 are embedded in the ‘indication’ recitations
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`thereof.” Id. at 14. This interpretation of the independent claims departs from the
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`interpretation originally set forth in the Petition. Specifically, in contrast to the
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`Reply Brief, the Petition interpreted the two elements as separate claim elements.
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`For instance, in analyzing the preamble of independent claim 1, rather than treating
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`it as “non-limiting,” the Petition argued that “Kiuchi discloses establishment of ‘a
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`secure communication link’ as defined by the Board.” Pet. at 19–20. Moreover, in
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`addressing the claimed “indication that the domain name service system supports
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`establishing a secure communication link,” the Petition further argued that “the C-
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`4
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`HTTP name server facilitates the establishment and operation of a secure
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`Case No. IPR2016-00693
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`communication link between the client-side proxy and the server-side proxy.” Id.
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`at 23. Nothing in its Petition suggests in any way that Black Swamp intended to
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`interpret “the ‘indication’ claim elements and the alleged ‘establishing’ claim
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`elements [as] not separate claim elements,” as it does in the Reply Brief. Reply
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`Brief at 14.
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`Consistent with the Federal Circuit’s and the Board’s jurisprudence, the
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`improper new arguments presented in Black Swamp’s Reply Brief should not be
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`considered by the Board.2
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`Dated: March 5, 2017
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`Respectfully submitted,
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`By: /Joseph E. Palys/
`Joseph E. Palys
`Registration No. 46,508
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`Counsel for VirnetX Inc.
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`2 To the extent the Board is inclined to consider these new arguments, Patent
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`Owner should be afforded a full opportunity to respond to them, including with
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`expert evidence. In re NuVasive, 841 F.3d at 973.
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`5
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`CERTIFICATE OF SERVICE
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`I hereby certify that on this 5th day of March, 2017, a copy of Patent
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`Owner’s Identification of New Issues in Petitioner’s Reply Brief was served by
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`electronic mail, as agreed by the parties, upon the following Counsel for Black
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`Swamp IP, LLC:
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`Thomas H. Martin
`Wesley C. Meinerding
`MARTIN & FERRARO
`1557 Lake O’Pines Street, NE
`Hartville, Ohio 44632
`tmartin@martinferraro.com
`docketing@martinferraro.com
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`Respectfully submitted,
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` /Joseph E. Palys/
`Joseph E. Palys
`Counsel for VirnetX Inc.
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`Dated: March 5, 2017
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