`571.272.7822
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` Paper No. 8
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` Entered: Sept. 9, 2016
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`BLACK SWAMP IP, LLC,
`Petitioner,
`
`v.
`
`VIRNETX INC.,
`Patent Owner.
`____________
`
`Case IPR2016-00693
`Patent 7,418,504 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
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`IPR2016-00693
`Patent 7,418,504 B2
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`I.
`
`
`INTRODUCTION
`Background
`A.
`Petitioner, Black Swamp IP, LLC, filed a Petition (Paper 1, “Pet.”)
`requesting an inter partes review of claims 1, 2, 5, 6, 15, 16, 27, 33, 36, 37,
`39, 40, 51, 57, and 60 (the “challenged claims”) of U.S. Patent No.
`7,418,504 B2 (Ex. 1001, “the ’504 patent”). See Pet. 5. Patent Owner,
`VirnetX Inc., filed a Preliminary Response. Paper 6 (“Prelim. Resp.”).
`We have authority to determine whether to institute an inter partes
`review. 35 U.S.C. § 314(b); 37 C.F.R. § 42.4(a). The standard for
`instituting an inter partes review is set forth in 35 U.S.C. § 314(a), which
`provides that an inter partes review may not be instituted “unless the
`Director determines . . . there is a reasonable likelihood that the petitioner
`would prevail with respect to at least 1 of the claims challenged in the
`petition.”
`After considering the Petition and Preliminary Response, we
`determine that Petitioner has established a reasonable likelihood of
`prevailing in showing the unpatentability of at least one of the challenged
`claims. Accordingly, we institute inter partes review.
`
`
`Related Matters
`B.
`According to Petitioner, the ’504 patent is the subject of the following
`civil actions: Civ. Act. No. 6:13-cv-00211 (E.D. Tex.); Civ. Act. No. 6:12-
`cv-00855 (E.D. Tex.); Civ. Act. No. 6:10-cv-00417 (E.D. Tex.); Civ. Act.
`No. 6:11-cv-00018 (E.D. Tex.); Civ. Act. No 6:13-cv-00351 (E.D. Tex.);
`Civ. Act. No. 6:13-mc-00037 (E.D. Tex.); and Civ. Act. No. 9:13-mc-80769
`(E.D. Fla.). Petitioner also indicates that the ’504 patent is the subject of
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`IPR2016-00693
`Patent 7,418,504 B2
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`inter partes in reexamination 95/001,788 and 95/001,851 and inter partes
`review IPR2013-00377, IPR2013-00393, IPR2013-00394, IPR2014-00176,
`IPR2014-00177, IPR2014-00612, IPR2014-00613, IPR2014-00614,
`IPR2015-00188, and IPR2015-00189. Pet. 2–3.
`
`
`Asserted Ground of Unpatentability
`C.
`Petitioner challenges claims 1, 2, 5, 6, 15, 16, 27, 33, 36, 37, 39, 40,
`51, 57, and 60 of the ’504 patent under 35 U.S.C. § 102 as anticipated by
`Takahiro Kiuchi & Shigekoto Kaihara, C-HTTP––The Development of a
`Secure, Closed HTTP-Based Network on the Internet, PROC. SYMP. ON
`NETWORK & DISTRIBUTED SYS. SECURITY, Feb. 22–23, 1996, at 64 (Ex.
`1005, “Kiuchi”). Pet. 5.
`
`
`The ‘504 Patent
`D.
`The ’504 patent describes a secure mechanism for communicating
`over the internet. Ex. 1001, 3:14–15.
`
`
`Illustrative Challenged Claim 1
`E.
`Claim 1 reads as follows:
`1.
`A system for providing a domain name service for
`establishing a secure communication link, the system comprising:
`a domain name service system configured to be connected to a
`communication network, to store a plurality of domain names and
`corresponding network addresses, to receive a query for a network
`address, and to comprise an indication that the domain name service
`system supports establishing a secure communication link.
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`35 U.S.C. §§ 315(d) and 325(d) – The Thirteenth Challenge
`F.
`Patent Owner argues that the present case should not be instituted
`under 35 U.S.C. §§ 315(d) and 325(d) because the present challenge is “the
`thirteenth challenge.” Prelim. Resp. 3–9.
`Under the specific circumstances involved at this juncture, the Kiuchi-
`based ground would not place a significant burden on the parties or the
`Board. Accordingly, Patent Owner has not shown a sufficient reason to
`deny this Petition, and we decline to exercise our discretion to deny
`institution of the present proceedings based on this ground. See 37 C.F.R.
`§ 42.108(a) (stating that the Board has discretion “to proceed . . . on all or
`some of the grounds of unpatentability asserted”).
`
`G. Non-reliance on Expert Testimony
`Patent Owner argues that Petitioner’s “proposed ground of
`unpatentability is wholly unsupported by expert testimony” and that “expert
`testimony is required.” Prelim. Resp. 9, 13–16. Even assuming Petitioner
`does not rely upon expert testimony, Patent Owner does not demonstrate
`sufficiently that reliance on expert testimony is required or that the absence
`of expert testimony alone in this matter 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.
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`II.
`
`ANALYSIS
`
`Claim Construction
`A.
`In an inter partes review, the Board construes claims by applying the
`broadest reasonable interpretation in light of the specification. 37 C.F.R.
`§ 42.100(b). Under this standard, absent any special definitions, claim terms
`or phrases are given their ordinary and customary meaning, as would be
`understood by one of ordinary skill in the art, in the context of the entire
`disclosure. In re Translogic Tech., Inc., 504 F.3d 1249, 1257 (Fed. Cir.
`2007).
`Petitioner and Patent Owner each proffer proposed constructions of
`several claim terms. At this stage of the proceeding, and on this record, we
`determine that no claim term needs express construction at this time. See
`Vivid Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200 F.3d 795, 803 (Fed. Cir.
`1999) (only those terms that are in controversy need to be construed and
`only to the extent necessary to resolve the controversy).
`
`
`
`Overview of Prior Art – Kiuchi (Exhibit 1005)
`B.
`Kiuchi discloses closed networks (HTTP (Hypertext Transfer
`Protocol)-based network (C-HTTP)) of related institutions on the Internet.
`Ex. 1005, 64. A client and client-side-proxy “asks the C-HTTP name server
`whether it can communicate with the [specified] host” and, if “the query is
`legitimate” and if “the requested server-side proxy is registered in the closed
`network and is permitted to accept the connection,” the “C-HTTP name
`server sends the [requested] IP address.” Id. at 65. After confirmation by
`the C-HTTP name server “that the specified server-side proxy is an
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`appropriate closed network member, a client-side proxy sends a request for
`connection to the server-side proxy, which is encrypted.” Id.
`The server-side proxy “accepts [the] request for connection from [the]
`client-side proxy” (Ex. 1005, 65) and, after the C-HTTP name server
`determines that “the client-side proxy is an appropriate member of the closed
`network,” that “the query is legitimate,” and that “the client-side proxy is
`permitted to access . . . the server-side proxy,” the “C-HTTP name server
`sends the IP address [of the client-side proxy]” (id. at 66). Upon receipt of
`the IP address, the server-side proxy “authenticates the client-side proxy”
`and sends a connection ID to the client-side proxy. After the client-side
`proxy “accepts and checks” the connection ID, “the connection is
`established” after which time, the client-side proxy forwards “requests from
`the user agent in encrypted form using C-HTTP format.” Id.
`
`
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`C. Analysis of Anticipation Grounds Based on Kiuchi
`Claim 1, for example, recites a domain name service system
`configured to comprise an indication that the domain name service system
`supports establishing a secure communication link. Petitioner contends that
`Kiuchi discloses all material limitations of the challenged claims and states
`that Kiuchi discloses that “[i]f the C-HTTP name server determines that the
`query is legitimate . . . the C-HTTP name server facilitates the establishment
`and operation of a secure communication link” and that “[t]he establishment
`and operation of a secure communication link in Kiuchi between the client-
`side proxy and the server-side proxy is in and of itself ‘an indication that the
`domain name service system supports establishing a secure communication
`link.’” Pet. 22–23.
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`Patent Owner argues that Petitioner “provides no . . . basis for
`addressing the ‘indication’ limitation [so] Kiuchi cannot anticipate claim 1.”
`Prelim. Resp. 35. However, as discussed above, Petitioner argues that “[t]he
`establishment and operation of a secure communication link in Kiuchi
`between the client-side proxy and the server-side proxy is in and of itself ‘an
`indication . . . .’” Pet. 23. We disagree with Patent Owner’s contention that
`Petitioner provides “no basis for addressing the ‘indication’ limitation” in
`view of this explicit claim mapping of this claim feature, for example.
`Claim 1 recites a domain name service system configured to store a
`plurality of domain names and corresponding network addresses. Petitioner
`states that Kiuchi discloses this feature. Pet. 20–21. Patent Owner argues
`that Kiuchi fails to disclose this claim feature because “Kiuchi’s URL (the
`alleged domain name) does not correspond to the server-side proxy.”
`Prelim. Resp. 36 (emphasis omitted). Claim 1 recites a system configured to
`store a domain name. Patent Owner does not assert or demonstrate
`persuasively that claim 1 also recites that the domain name must correspond
`to any specific component, much less that the domain name must correspond
`to a server-side proxy.
`Claim 1 recites a system for establishing a secure communication link,
`the system comprising a domain name service system configured to
`comprise an indication that the domain name service system supports
`establishing a secure communication link. Petitioner argues that Kiuchi
`discloses this feature. See, e.g., Pet. 22–24. Patent Owner argues that
`Kiuchi fails to disclose this claim feature because “the Federal Circuit held
`that a secure communication link requires ‘a direct communication link’”
`and “Kiuchi’s connection is not direct.” Prelim. Resp. 37 (emphasis
`omitted). However, a trial is needed in order to ascertain the precise nature
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`of the holding by the Federal Circuit on this issue, the nature of the
`applicability or relevance of a specific holding or conclusion drawn by the
`Federal Circuit on this proceeding, and the precise nature of Kiuchi’s
`disclosed connection. Therefore, Petitioner has met its burden of
`demonstrating by a preponderance of the evidence a reasonable likelihood of
`prevailing in proving unpatentability of the challenged claim.
`Petitioner argues that Kiuchi discloses the features recited in claim 27.
`See, e.g., Pet. 31. Patent Owner argues that Kiuchi fails to disclose that the
`domain name service system is “configured to enable establishment of a
`secure communication link between a first location and a second location,”
`as recited in claim 27, because “[a] user at a ‘user agent,’ not at the proxies
`themselves, sends a request that the client-side proxy processes” and that
`Petitioner “fails to demonstrate, or even allege, that there is a user at the
`client-side proxy.” Prelim. Resp. 40. Claim 27 recites that the domain name
`service system is configured to enable establishment of a secure
`communication link between a first location and a second location. Patent
`Owner does not demonstrate persuasively that claim 27 also recites that a
`user must be located at any specific location, much less located “at the
`client-side proxy.”
`Petitioner persuasively maps the remaining claim elements and claims
`to Kiuchi’s disclosure. See Pet. 19-32. Based on the foregoing discussion
`and preliminary record, Petitioner establishes a reasonable likelihood of
`prevailing in showing that Kiuchi anticipates claims 1, 2, 5, 6, 15, 16, 27, 33,
`36, 37, 39, 40, 51, 57, and 60.
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`III. CONCLUSION
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`For the foregoing reasons, we determine that the information
`presented in the Petition establishes that there is a reasonable likelihood that
`Petitioner would prevail with respect to the challenged claims of the ’504
`patent. The Board has not made a final determination on the patentability of
`any challenged claims. The Board’s final determination will be based on the
`record as fully developed during trial.
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`IV. ORDER
`
`In consideration of the foregoing, it is hereby ORDERED that an inter
`partes review is instituted with respect to unpatentability of claims 1, 2, 5, 6,
`15, 16, 27, 33, 36, 37, 39, 40, 51, 57, and 60 as anticipated by Kiuchi; and
`FURTHER ORDERED that pursuant to 35 U.S.C. § 314(c) and
`37 C.F.R. § 42.4, notice is hereby given of the institution of a trial.
`
`PETITIONER:
`Thomas H. Martin
`Wesley C. Meinerding
`MARTIN & FERRARO, LLP
`tmartin@martinferraro.com
`wmeinerding@martinferraro.com
`
`PATENT OWNER:
`Joseph E. Palys
`Naveen Modi
`PAUL HASTINGS LLP
`PH-VirnetX-IPR@paulhastings.com
`
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