UNITED STATES PATENT AND TRADEMARK OFFICE
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`APPLE, INC.,
`Petitioner,
`
`v.
`
`VIRNETX, INC.,
`Patent Owner.
`____________
`
`Case IPR2016-01585
`Patent 8,904,516 B2
`____________
`
`Record of Oral Hearing
`Held: November 2, 2017
`____________
`
`
`
`Before MICHAEL P. TIERNEY, Vice Chief Administrative Patent Judge,
`KARL D. EASTHOM and STEPHEN C. SIU, Administrative Patent
`Judges.
`
`
`
`____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`APPLE, INC.,
`Petitioner,
`
`v.
`
`VIRNETX, INC.,
`Patent Owner.
`____________
`
`Case IPR2016-01585
`Patent 8,904,516 B2
`____________
`
`Record of Oral Hearing
`Held: November 2, 2017
`____________
`
`
`
`Before MICHAEL P. TIERNEY, Vice Chief Administrative Patent Judge,
`KARL D. EASTHOM and STEPHEN C. SIU, Administrative Patent
`Judges.
`
`
`
`
`Case IPR2016-01585
`Patent 8,904,516 B2
`
`
`
`APPEARANCES:
`
`ON BEHALF OF THE PETITIONER:
`
`
`JEFFREY P. KUSHAN, ESQUIRE
`Sidley Austin, LLP
`1501 K Street Northwest
`Washington, D.C. 20005
`(202) 736-8914
`
`
`
`ON BEHALF OF PATENT OWNER:
`
`
`JOSEPH E. PALYS, ESQUIRE
`DANIEL ZEILBERGER, ESQUIRE
`Paul Hastings, LLP
`875 15th Street Northwest
`Washington, D.C. 20005
`(202) 551-1993
`
`
`
`
`
`The above-entitled matter came on for hearing on Monday, November
`
`2, 2017, commencing at 10:00 a.m., at the U.S. Patent and Trademark
`Office, 600 Dulany Street, Alexandria, Virginia.
`
`
`
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`2
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`Case IPR2016-01585
`Patent 8,904,516 B2
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`P R O C E E D I N G S
`- - - - -
`JUDGE EASTHOM: Good morning, everyone. This is Apple,
`Inc., Petitioner, versus Virnetx, Inc., Patent Owner. IPR2016-01585,
`patent 8,904,516 B2. The hearing order specifies an hour per side,
`and if you want to reserve rebuttal, please let us know. Petitioner, can
`you please introduce yourselves for the record?
`MR. KUSHAN: Good morning, Your Honors, Jeff
`Kushan and Anna Weinberg of Sidley.
`JUDGE EASTHOM: Welcome.
`MR. ZEILBERGER: Good morning, Your Honors,
`Joseph Palys joined with Daniel Zeilberger.
`JUDGE EASTHOM: Welcome. Ms. Weinberg, are
`you going to present today?
`MS. WEINBERG: Yes, I am. Your Honors, may I
`approach with hard copies of the demonstratives?
`JUDGE EASTHOM: Please.
`MS. WEINBERG: Good morning, Your Honors.
`May I please reserve ten minutes for rebuttal. Slide 2
`please, I'm here today to discuss whether certain claims of
`the '516 patent are obvious in view over Beser and
`RFC2041. Slide 8, please, I plan to focus my discussion on
`the issues that Patent Owner raises in its Patent Owner's
`response but I'm happy to answer any questions as we go.
`Slide 9, please. Briefly, Beser discloses a prior art
`system for tunneling between two devices, originating
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`device and terminating device, such to the protected
`device's anonymity over a public network. Beser does so
`by having a originating device send a request that contains a
`unique identifier to the terminating device. The request is
`received by a network device, 14, and forwarded to
`third-party devices, 30. Then that third-party device, 30,
`associates the unique identifier with a public IP address
`from the second network device.
`Then, through negotiation, it determines a private IP
`address for the terminating device, 26. Slide 10 please, the
`only limitation in the independent claims that Patent Owner
`challenges in its response to limitation, a request to look up
`an IP address. Slide 11, please. As we've explained, both
`in our petition and our reply, Beser discloses limitation
`because in response to the request from the originating
`device, 24, the third-party device looks up two IP addresses.
`First, it looks up the public IP address of network
`device, 16, and second it looks up the private IP address of
`terminating device, 26. Slide 12, please, in response Patent
`Owner disputes whether Beser does this look up of the
`public IP address in response to request, but Beser's
`disclosures bilie Patent Owner's assertion. For example,
`figure 5, in a company disclosure at column 11, explain at
`step 116 Beser's third-party device associates a public IP
`address with the unique identifier.
`It does so in response to step 114 which is receiving a
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`request from the originating device. Slide 13, please, it's
`not the first time the Board has heard these arguments from
`Patent Owner. In fact in IPR2014-237 Patent Owner made
`substantively the same arguments and the Board rejected
`them holding that tunneling request in Beser is a request to
`look up an IP address. I will note that '237 proceedings
`were appealed to Federal Circuit. They were affirmed and
`the mandate has issued so that decision is final. In addition
`if you'll go to slide 7, please.
`In addition the Board has held in several subsequent
`proceedings that Beser discloses the same limitation. This
`slide captures those final written decisions that are currently
`on appeal before the Federal Circuit. I will note that for
`several of those proceedings briefing has completed and
`they're waiting oral argument, and in the briefs Patent
`Owner did not challenge the Board's finding on this issue.
`JUDGE EASTHOM: What did the Patent Owner
`challenge in those proceedings, primarily?
`MS. WEINBERG: Yes, the only issue with respect
`to Beser that Patent Owner challenged is the public
`availability of RFC2401. So, Patent Owner doesn't present
`any new evidence, doesn't present any new arguments, so
`for the same reasons the Board previously found Petitioner
`requests the Board finds that Beser disclosed this limitation.
`JUDGE EASTHOM: Can you mention -- address
`Patent Owner's argument here about the look up? It seems
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`there are -- I thought they were making a distinction about
`an association versus a look up but I'm not sure if I'm
`understanding.
`MS. WEINBERG: Yes, one of the arguments that
`Patent Owner makes is that it's association not a look up,
`but I would submit that that '516 patent specification
`discloses the same process that Beser follows in describing
`a look up, and therefore Beser's system is analogous.
`Turning to slide 14, the second issue that Patent Owner
`raises is whether a person of ordinary skill would combine
`Beser and RFC2401. Slide 15, please, we've explained in
`our petition, and as supported by Dr. Tamassia's expert
`testimony, a person of ordinary skill in the art would
`combine these two references to provide encryption in
`Beser.
`First, Beser explicitly describes encryption and
`references the IP sec protocol. That protocol is described in
`RFC2401. With reference to figure 9, page 25 of the
`RFC2041 protocol, in the lower corner of the slide
`describes an architecture that's analogous to Beser. There
`are two end devices and there are two gateway devices and
`it describes end-to-end encryption between the two end
`devices. A person of ordinary skill in the art would
`therefore, noticing similarity of these architectures,
`incorporate the end-to-end encryption into Beser's system.
`JUDGE EASTHOM: Your friends on the other side
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`argue that encryption -- Beser teaches away from
`encryption because there would be jitter and things would
`happen with the computer power supply, I think?
`MS. WEINBERG: Yes, that's right, and I'll turn to
`slide 15 -- slide 16 which contained their arguments. Beser
`makes that disclosure with respect to only one specific type
`of data, streaming data, and in the same disclosure it
`provides a solution, more computer power. And both Dr.
`Tamassia, our expert, and Patent Owner's expert have
`admitted that it would of been within the skill of one of
`ordinary skill to incorporate more computer power into
`Beser which would solve these concerns.
`In addition, Patent Owner argues that encryption in
`Beser are two alternatives, and that's far from true if you
`read Beser's disclosure and have an appreciation for data
`security and providing security in communication. Data
`security is provided though encryption and that protects the
`data being transported between two devices, whereas Beser
`addresses protecting the identifies of the two devices doing
`the communications. Therefore these two technologies or
`types of security are complimentary to one another.
`In fact, Beser explicitly criticizes prior art systems
`that don't provide for encryption, and Beser discloses using
`encryption, at least during the initiation of tunneling, to
`protect the user-identifiable data. Slide 17 please, in fact,
`the Board has addressed these same arguments and rejected
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`them several times. For example, in the '237 proceeding the
`Board held that persons of ordinary skill would of
`recognized the combination of Beser and RFC2041 would
`of provided for encryption of audio and video data and that
`Beser does not teach away.
`Again, we're turning to slide 7, the Board made the
`same finding in several other IPRs including those that are
`on appeal, and as I mentioned earlier that's not an issue that
`Patent Owner's disputing on appeal. If I could please go to
`slide 18, the next issues that Patent Owner disputes is with
`respect to certain dependent claims. Slide 19, the first set of
`dependent claims are 2, 12, 16 and 26. They provide for
`audio -- encrypting audio and video data as well as
`end-to-end encryption.
`As already explained combining RFC2041 which
`provides end-to-end encryption into Beser would encrypt
`Beser's data transfer, and that includes audio and video data.
`Slide 20, in response Patent Owner essentially reiterates the
`same argument it makes for Beser teaching away to the
`combination. Slide 21, the Board has rejected those
`arguments and has rejected those arguments in the context
`of the substantively similar dependent claims in other
`proceedings, such as the '868. Patent Owner doesn't present
`any new evidence or any new arguments, so for the same
`reasons the Board has held previously we submit that these
`claims are obvious.
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`Slide 22, please, the next set of dependent claims that
`Patent Owner challenges are messaging claims. Slide 23
`please, specifically claims 3, 4, 17, and 18 provide for a
`messaging service and specifically an e-mail service. Slide
`24, please, Petitioner has submitted Dr. Tamassia's
`testimony found at paragraph 174 of his declaration.
`Stating that it was well-known to a person of ordinary skill
`in the art at the time to use tunneling to transmit e-mail
`data. Moreover, Beser explicitly discloses using its system
`to transmit audio and video data.
`Therefore it would of been an obvious design choice
`to do the same with respect to textual communication, such
`as e-mail. Slide 25, Patent Owner essentially makes two
`arguments. First, it disputes our reliance of Exhibit 1052 to
`show what was known in the art at the time and as this
`Board has previously recognized in the Federal Circuit
`(inaudible) diagnostics have recognized it's perfectly
`appropriate to rely on this prior art to establish what was
`known to one of ordinary skill in the art.
`The second argument that Patent Owner makes is in
`respect to our assertion that it was an obvious design
`choice. Although, they really just quibble with the term
`rather than challenging any of our basis for getting there. In
`particular they don't provide contrary evidence to Dr.
`Tamassia testimony. Slide 26, please, the Board has
`considered very similar dependent claims and in
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`considering them they've accredited the same testimony that
`Dr. Tamassia makes here today.
`Patent Owner hasn't presented any new arguments or
`any new evidence, so for the same reasons the Board has
`previously held we urge the Board to find that these claims
`are obvious. Slide 27, please, the last issue that Patent
`Owner raises is status of RFC2401 as prior art. We submit
`the Petitioner has submitted ample evidence to establish that
`it is prior art. First, RFC2401, on its face states November
`1998 as the publication date and it says it's available for
`unlimited distribution.
`Dr. Tamassia has testified on the record in paragraphs
`118 to 124 of his declaration that he's familiar with the RFC
`process and that RFCs typically contain the publication date
`in their upper right corner, and at paragraph 124 that
`RFC2401 was publically available as of November 1998.
`Patent Owner disputes the date on the document as hearsay
`but we submit that there is evidence to establish that that
`date falls within at least the residual exception. Notably,
`Patent Owner, in its reply to this motion to exclude, does
`not dispute any of the underlining evidence we've set forth
`to indicate that it satisfies that residual exception. In
`addition Petitioner has provided amble other evidence, for
`example, the testimony of IETF corporate representative --
`JUDGE EASTHOM: I'm sorry, I thought -- I may be
`mistaken, I thought you were trying to get the document in
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`on a business record exception, but --
`MS. WEINBERG: We put it -- we suggested that it
`could fall under either the business record exception or the
`residual exception.
`JUDGE EASTHOM: Okay.
`MS. WEINBERG: Yeah, under both.
`JUDGE EASTHOM: That's in your reply on the
`motion to exclude?
`MS. WEINBERG: That is in our response, yes.
`JUDGE EASTHOM: It's in your reply itself, or?
`MS. WEINBERG: No, our response to the motion to
`exclude.
`JUDGE EASTHOM: Thank you, ma'am.
`MS. WEINBERG: I could provide you the page
`numbers, I don't have that handy.
`JUDGE EASTHOM: That's fine.
`MS. WEINBERG: As I was saying, in addition to
`the RF itself and Dr. Tamassia's testimony we've provided
`the testimony of Ms. Ginoza, who has testified that
`RFC2401 was publically available after it's date of
`publication, November 1998, and maintained on the website
`by IETF. In addition, we submitted two articles from 1999,
`found in Exhibits 1064 and 1065. Each document, each
`article references RFC2401 and indicates that a person of
`ordinary skill, that they could find this article on the IETF
`website as of that date, prior to the critical date.
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`JUDGE EASTHOM: So, you're saying those articles
`aren't being -- they're being used for a non-hearsay purpose?
`MS. WEINBERG: Yes, we believe that they're being
`offered for a non-hearsay purpose establishing what a
`person of ordinary skill would know how to find the
`RFC2401 document. But even to the extent that the Board
`considers that hearsay it falls within the residual exception
`indeed. And I believe it was IPR2016-331 the Board found
`that it fell under the residual exception. In addition we've
`also presented one new piece of evidence in this proceeding
`that wasn't presented in prior proceedings. Mainly Exhibit
`1072, a 1999 book which describes the IP security protocol
`and in it's appendix contains a full copy of RFC2401
`bearing the date November 1998.
`JUDGE EASTHOM: Did Patent Owner move to
`exclude 1072 also?
`MS. WEINBERG: Yes, they did, Your Honor, and
`we believe it falls under the residual exception. Based on
`all this evidence taken together, each of which corroborates
`each other and each of which independently satisfies proof
`that we need to establish that RFC2401 was publicly
`available, we submit that this reference should be
`considered as prior art.
`JUDGE EASTHOM: Thank you. Do you have any
`questions?
`MS. WEINBERG: If not I'd like to reserve the
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`remainder of my time.
`JUDGE EASTHOM: You have 15 minutes.
`MS. WEINBERG: Thank you.
`JUDGE EASTHOM: Mr. Zeilberger, welcome.
`MR. ZEILBERGER: Thank you, Your Honor. As a
`point of clarification I would like to note I believe that
`Apple characterized the Federal Circuit's decision citing the
`'237 proceedings having affirmed the '237 decision and in
`Patent Owner's view the Federal Circuit actually didn't
`opine on any of the merits of the issues in the '237 decision
`because they actually relied on the '238 decision, which
`didn't involve Beser.
`JUDGE EASTHOM: Right, that provided Provino?
`MR. ZEILBERGER: That's right, Your Honor.
`JUDGE EASTHOM: They cited In re: Gleave, is
`that right?
`MR. ZEILBERGER: Sorry, Your Honor?
`JUDGE EASTHOM: They cited In re Gleave from
`the '237 and they took the cite that said they don't have to
`decide that issue because they've already decided it. With
`respect to Provino I believe is what they were . . . .
`MR. ZEILBERGER: Your Honor, to be honest with
`you I don't recall the case that they cited for that --
`JUDGE EASTHOM: That doesn't matter, pardon
`me, I was just trying --
`MR. ZEILBERGER: Your Honor, I believe I just got
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`-- in the '238 proceeding it was actually the Wessenger
`reference.
`JUDGE EASTHOM: The 23 --
`MR. ZEILBERGER: 238 proceedings.
`JUDGE EASTHOM: Thank you.
`MR. ZEILBERGER: Other than that, Your Honor,
`Patent Owner is prepared to rest on its papers today unless
`your Honors have any questions.
`JUDGE EASTHOM: Can you just help, is there any
`other issue here that's different than what's gone on before
`that we should consider by you?
`MR. ZEILBERGER: Yes, your Honor, so in our
`view each proceeding stands on its own. This is its own
`patent and in that perspective we believe that Your Honors
`should provide an independent opinion. Having said that
`some of the issues certainly are similar with respect to
`Beser which arguments we've made in the past. I will say
`that our arguments, with respect to the motion to exclude,
`we have presented some argument that we didn't present
`before and those arguments are new.
`JUDGE EASTHOM: I understand. So basically the
`hearsay argument about the date, that's one of your primary
`arguments with RFC2401?
`MR. ZEILBERGER: Your Honor, so with respect to
`the motion to exclude, without minimizing some of the
`other ones, so Exhibit 1008 we have alleged that the date is
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`hearsay. We've also noted how Exhibit 1036, which is
`RFC2026 which Apple also relies on for some of the
`alleged procedures associated with the RFC -- that the
`context of that RFC is also hearsay.
`JUDGE EASTHOM: What's the main reason with
`respect to Exhibit 1008, RFC2401, that you contend that
`residual exception is faulty on Apple's part?
`MR. ZEILBERGER: Your Honor, I think that there
`really are two main arguments. One is with respect to the
`lack of corroboration. Much of the evidence that Apple
`relies on is itself hearsay and they're really trying to boot
`strap hearsay on top of hearsay to get it in under the residual
`exception. The second point is that Apple never established
`that there were alternative pieces of evidence that they
`could of relied with reasonable means. In fact, they could
`of gotten testimony from the authors, for example, about the
`purported publication.
`Maybe they didn't try to do that and that's a critical
`element to the residual exception. In fact, I'd say as a third
`point -- I know I said two but there's actually a third -- the
`residual exception's intended for exceptional cases and it is
`actually Federal Circuit precedent that finds that even when
`you meet all four factors if you find that the case itself is
`not an exceptional case then the residual exception is
`inappropriate.
`JUDGE EASTHOM: Okay. Thank you. Does
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`anyone have any questions?
`JUDGE TIERNEY: No questions.
`JUDGE EASTHOM: Thank you.
`MS. WEINBERG: Your Honor, I'll keep my rebuttal
`brief. I'd just like to address a few points that my colleague
`made. One, they've stated some reasons why RFC2401
`doesn't satisfy the residual exception. As he was talking
`about those I actually looked at pages 3 to 5 where they
`address residual exception and I don't see any of those
`arguments in their reply. In addition I will just note that
`RFC2401's date on its face, is the best source of evidence of
`the publication of that date. And in addition we've also
`provided Dr. Tamassia's testimony corroborating that which
`they don't challenge as hearsay or other reasons exclude it.
`JUDGE EASTHOM: Thank you. Well, we
`appreciate the parties input on this and we're adjourned.
`(Hearing adjourned at 10:23 a.m.)
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`PETITIONER:
`
`Jeffrey Kushan
`Thomas Broughan
`Scott Border
`SIDLEY AUSTIN, LLP
`jkushan@sidley.com
`tbroughan@sidley.com
`sborder@sidley.com
`
`
`PATENT OWNER:
`
`Joseph Palys
`Naveen Modi
`PAUL HASTINGS, LLP
`josephpalys@paulhastings.com
`naveenmodi@paulhastings.com
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`
`
`17
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`
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