UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`MICROSOFT CORPORATION,
`
`Petitioner,
`
`v.
`
`DAEDALUS BLUE, LLC,
`
`Patent Owner.
`
`Case No. IPR2021-00832
`U.S. Patent No. 8,381,209
`
`PETITIONER’S PRELIMINARY REPLY
`
`
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`MICROSOFT CORPORATION,
`
`Petitioner,
`
`v.
`
`DAEDALUS BLUE, LLC,
`
`Patent Owner.
`
`Case No. IPR2021-00832
`U.S. Patent No. 8,381,209
`
`PETITIONER’S PRELIMINARY REPLY
`
`
`
`TABLE OF CONTENTS
`
`Page
`The Balance of the Fintiv Factors Strongly Supports Institution. ........ 1
`
`I.
`
`i
`
`
`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`Cases
`Juniper Networks v. WSOU Investments, LLC,
`IPR2021-00538, Paper 9 (PTAB Aug. 18, 2021) ..................................... 1, 2, 3, 4
`Mahurkar v. C.R. Bard., Inc.,
`79 F.3d 1572 (Fed. Cir. 1996) .............................................................................. 4
`Nvidia Corp. v. Invensas Corp.,
`IPR2020-00603, Paper 11 (PTAB Sept. 3, 2020) ................................................. 4
`Statutes
`35 U.S.C. § 24 ............................................................................................................ 5
`Other Authorities
`37 C.F.R. §§ 42.52-53 ................................................................................................ 5
`
`ii
`
`
`
`EXHIBIT
`NO.
`1001
`1002
`
`1003
`
`1004
`1005
`
`1006
`
`1007
`
`1008
`
`1009
`
`1010
`
`LISTING OF EXHIBITS
`
`DESCRIPTION
`
`U.S. Patent No. 8,381,209 to Reumann et al. (the “209 Patent”)
`
`File History of U.S. Patent No. 8,381,209 (the “209 FH”)
`
`Declaration of Dr. Markus Jakobsson (“Jakobsson”) re U.S. Patent
`No. 8,381,209
`
`Curriculum Vitae of Dr. Markus Jakobsson
`
`U.S. Patent Publication No. 2007/0079307 to Dhawan et al.
`(”Dhawan”)
`
`C. Clark et al, Live Migration of Virtual Machines, NSDI ’05: 2nd
`Symposium on Networked Systems Design & Implementation
`(May 2-4, 2005) (“Clark”)
`
`Isolation of Shared Network Resources in XenoServers to Warfield
`et al. (“Warfield”)
`
`U.S. Patent No. 8,107,370 to Chandika et al. (“Chandika”).
`
`Declaration of Diana Friedrich, German National Library of
`Science and Technology re: Proceedings of the 2nd Symposium on
`Networked Systems Design & Implementation (NSDI ’05) (May 2-
`4, 2005)
`
`Complaint for Patent Infringement, Daedalus Blue, LLC v.
`Microsoft Corporation, Case No. 6:20-cv-01152-ADA (Dec. 16,
`2020 W.D. Tex.)
`
`1011
`
`U.S. Patent No. 7,484,208 to Nelson (“Nelson”)
`
`1012
`
`Chen et al., When Virtual Is Better Than Real, The Eighth IEEE
`Workshop on Hot Topics in Operating Systems, HotOS-VIII,
`pp.116-121 (May 20-23, 2001)
`
`1013
`
`U.S. Patent Application No. 2005/0268298 to Hunt (“Hunt”)
`
`iii
`
`
`
`EXHIBIT
`NO.
`1014
`
`1015
`
`1016
`
`1017
`
`1018
`
`1019
`
`1020
`
`1021
`
`1022
`
`1023
`
`1024
`
`DESCRIPTION
`
`U.S. Patent No. 6,397,242 to Devine (“Devine”)
`
`Karger, Multi-Level Security Requirements for Hypervisors, IBM
`Search Report, RC 23624 (W0506-041), June 6, 2005 (rev. Oct. 19,
`2005), 21st Annual Computer Security Applications Conference,
`Tucson, AZ (Dec. 5-9, 2005) (“Karger”).
`
`Sailer et al., Building a MAC-Based Security Architecture for the
`Xen Open-Source Hypervisor, Proceedings of the 21st Annual
`Computer Security Applications Conference (ASCAC 2005)
`
`U.S. Patent No. 6,182,226 to Reid et al. (“Reid”)
`
`Eck, Access Control Lists to Protect a Network from Worm/DoS
`Attacks, SANS Institute (2004)
`
`Huang et al., A Case for High Performance Computing with Virtual
`Machines, ICS ’06 June 28-30, Cairns, Queensland, Australia
`
`Keahey et al., Virtual Workspaces in the Grid, 11th International
`Euro-Par Conferences, Lisbon, Portugal (Sept. 2005)
`
`R. Siles, Real World ARP Spoofing, SANS Institute (August 2003)
`
`V. Antoine et al, Router Security Configuration Guide, Router
`Security Guidance Activity of the System and Network Attack
`Center (SNAC) (Sept. 27, 2002)
`
`Jiang et al., VIOLIN: Virtual Internetworking on Overlay
`Infrastructure, In: Cao J., Yang L.T., Guo M., Lau F. (eds) Parallel
`and Distributed Processing and Applications (ISPA 2004), Lecture
`Notes in Computer Science, vol 3358. Springer, Berlin, Heidelberg
`
`Karlin, PlanetLab: A Blueprint for Introducing Disruptive
`Technology into the Internet (Nov. 20, 2003), available at
`https://web.archive.org/web/20031208153742/http://www.planet-
`lab.org/pubs/2003-11-20-PlanetLab-IEEE.pdf
`
`iv
`
`
`
`EXHIBIT
`NO.
`
`DESCRIPTION
`
`1025
`
`1026
`
`1027
`
`1028
`
`1029
`
`1030
`
`1031
`
`1032
`
`1033
`
`1034
`
`Welcome to PlanetLab website (2002), available at
`https://web.archive.org/web/20021212060940/http:l/planet-
`lab.org/php/top.php
`
`PlanetLab – About, available at
`https://planetlab.cs.princeton.edu/about.html
`
`PlanetLab front page (2006), available at
`https://web.archive.org/web/20061007191534/http://www.planet-
`lab.org/
`
`Declaration of Dr. Timothy L. Harris regarding Isolation of Shared
`Network Resources in XenoServers to Warfield et al. (“Warfield”)
`
`PlanetLab Design Notes (2002), available at
`https://web.archive.org/web/20021212035424/http:/planet-
`lab.org:80/php/pdn.php
`
`PlanetLab Consortium (2006), available at
`https://web.archive.org/web/20061007234024/http://www.planet-
`lab.org/consortium/overview.php
`
`Email from Andrew Warfield submitting Isolation of Shared
`Network Resources in XenoServers to Warfield et al. (“Warfield”)
`to PlanetLab for publication (Oct. 30, 2002)
`
`PlanetLab Design Notes (PDNs) (2003), available at
`https://web.archive.org/web/20031002004416/http://planet-
`lab.org/php/pdn.php
`
`PlanetLab Design Note 02-2006 (2006), available at
`https://web.archive.org/web/20060129235541/http://www.planet-
`lab.org/PDN/PDN-02-006/
`
`Web capture from
`https://web.archive.org/web/20070715165444/http://planet-
`lab.org/files/pdn/PDN-02-006/pdn-02-006.pdf
`
`v
`
`
`
`EXHIBIT
`NO.
`
`DESCRIPTION
`
`1035
`
`1036
`
`1037
`
`1038
`
`1039
`
`1040
`
`1041
`
`1042
`
`1043
`
`PlanetLab Design Notes (2008), available at
`https://web.archive.org/web/20081021030221%20/http://www.plan
`et-lab.org/doc/pdn
`
`PlanetLab Design Notes (2014), available at
`https://web.archive.org/web/20140531154741/http://www.planet-
`lab.org/doc/pdn
`
`Planet Law Design Notes (2021), available at
`https://planetlab.cs.princeton.edu/doc/pdn.html
`
`Cocciarini, Meccanismi Scalabili di Accesso a Content Distribution
`Network: Uno Studio Speriomentale, Undergraduate Thesis
`submitted at the University of Bologna, Italy (2005)
`
`University of Bologna’s listing of Cocciarini, Meccanismi Scalabili
`di Accesso a Content Distribution Network: Uno Studio
`Speriomentale, Undergraduate thesis submitted to the University of
`Bologna, Italy (2005), available at
`http://www.cs.unibo.it/~ghini/tesisti/MarcoCocciarini/
`
`University of Cambridge, listing of NetOS publications (2003),
`available at web.archive.org/web/2003112410371
`O/http://www.cl.cam.ac.uk/Research/SRG/netos/papers/
`
`University of Cambridge, listing of NetOS publications (2004),
`available at web.archive.org/web/200411230357
`40/http://www.cl.cam.ac.uk/Research/SRG/netos/papers/
`
`University of Cambridge, listing of NetOS publications (2006),
`available at
`http://web.archive.org/web/20061008131740/http://www.cl.cam.ac.
`uk/research/srg/netos/papers/#2002
`
`University of Cambridge, listing of NetOS publications (2021),
`available at https://www.cl.cam.ac.uk/research/srg/netos/papers/
`
`vi
`
`
`
`EXHIBIT
`NO.
`
`DESCRIPTION
`
`1044
`
`University of Cambridge, listing of Xenoservers publications
`(2021), available at
`https://www.cl.cam.ac.uk/research/srg/netos/projects/archive/xeno/
`publications.html
`1045 Warfield, Virtual Devices for Machines, Ph.D. dissertation
`submitted to the University of Cambridge (May 5, 2006)
`
`1046
`
`1047
`
`1048
`
`1049
`
`1050
`
`1051
`
`Varian, VM and the VM Community: Past, Present, and Future,
`Office of Computing and Information Technology, Princeton
`University, Princeton, NJ, 1, 19-22 (April 1991) (“Varian”)
`
`Email from Jun Zheng dated May 4, 2021 in Daedalus Blue, LLC
`v. Microsoft Corporation, Case No. 6:20-cv-01152-ADA (W.D.
`Tex.)
`
`Declaration of Jared Bobrow in support of Petitioner’s Motion for
`Admission Pro Hac Vice (August 26, 2021).
`
`Scott McKeown, “WDTX ‘Implausible Schedule’ & Cursory
`Markman Order Highlighted,” Ropes & Gray, Patents Post-Grant,
`Inside Views & News Pertaining to the Nation’s Busiest Patent
`Court, June 2, 2021.
`
`Dani Kass, Judge Albright Now Oversees 20% of New U.S. Patent
`Cases, Law360, March 10, 2021.
`
`Daedalus Blue, LLC’s Preliminary Infringement Contentions;
`Daedalus Blue, LLC v. Microsoft Corporation, Case No. 6:20-cv-
`01152-ADA (served May 20, 2021).
`
`vii
`
`
`
`I. The Balance of the Fintiv Factors Strongly Supports Institution.
`Patent Owner’s contention that the Fintiv factors favor denial of institution
`
`in this proceeding (POPR, 42-52) is groundless. Petitioner has acted diligently in
`
`pursuing this IPR, having filed its petition even before Patent Owner had identified
`
`the claims it intended to assert in District Court. Petitioner presents a strong
`
`showing on the merits that the ’209 patent is invalid. A final decision in this
`
`proceeding will issue before November 25, 2022, which is only a few days after
`
`the District Court’s estimated trial date of November 14, 2022. Finally, Petitioner
`
`is willing to enter into a stipulation that, if this proceeding is instituted and not later
`
`terminated, Petitioner will not rely in the District Court on the same grounds as
`
`instituted. Thus, the balance of the Fintiv factors clearly supports institution.
`
`The situation presented here is substantially the same as in Juniper Networks
`
`v. WSOU Investments, LLC, IPR2021-00538, Paper 9 (PTAB Aug. 18, 2021),
`
`where the Board found that the Fintiv factors favored institution. There, as here,
`
`Patent Owner contended that the Western District of Texas’s allegedly aggressive
`
`trial schedule should trump the USPTO’s role in deciding unpatentability. Juniper
`
`Networks, IPR2021-00538, Paper 9, at 8. The Board rejected this position, holding
`
`that because petitioner acted promptly in filing its IPR (there, within one month
`
`after receiving the Patent Owner’s preliminary infringement contentions), this
`
`factor favored institution. Id. at 12. Because there was also a strong showing on
`
`1
`
`
`
`the merits and the rest of the factors were either neutral or favored institution, the
`
`Board instituted review notwithstanding the allegedly aggressive trial schedule. Id.
`
`at 11-12, 18.
`
`Under Juniper, the Fintiv factors strongly favor institution here.
`
`The first Fintiv factor is the chance of a stay. Pet. 11. Patent Owner
`
`speculates that no stay will issue. POPR, 44. The Board, however, does not
`
`speculate about future actions of the District Court, such as entry of a stay. Juniper
`
`Networks, IPR2021-00538, Paper 9, at 8; Pet. 5. This factor is neutral.
`
`The second Fintiv factor is the district court trial date. Pet. 12. Contrary to
`
`Patent Owner’s plainly false statement, the District Court’s scheduling order states
`
`that trial date has not been set: “Jury Selection/Trial. The Court expects to set
`
`these dates at the conclusion of the Markman Hearing.” EX2004, 5. Plainly,
`
`these dates are estimated at this point in time. Regardless, the District Court’s
`
`estimated trial date is unlikely to hold given the volume of cases pending in the
`
`Waco Division. Ex. 1049 (analysis of Judge Albright’s “implausible schedule” for
`
`setting trials); Ex. 1050 (indicating that Judge Albright has 20% of all new patent
`
`cases filed in the US). Furthermore, the difference between the estimated trial date
`
`and the Board’s deadline for issuing a final written decision is only eleven days.
`
`Thus, there is a reasonable possibility that the Board’s decision will issue before
`
`the end of the district court trial (or even prior to the start of the trial). This factor
`
`2
`
`
`
`favors institution, or at least is neutral. Juniper Networks, IPR2021-00538, Paper
`
`9, at 9-10; Pet. 12.
`
`The third Fintiv factor is the court’s investment in the district court action
`
`relative to the invalidity issues at the PTAB. Pet. 12. Where a petitioner is diligent
`
`in filing an IPR, this factor strongly favors institution. Juniper Networks,
`
`IPR2021-00538, Paper 9, at 12. Here, Petitioner filed this IPR on May 7, 2021,
`
`which was before Petitioner even received Patent Owner’s preliminary
`
`infringement contentions (on May 20, 2021). Ex. 1051.
`
`Patent Owner contends that the District Court has made “substantial”
`
`investments related to invalidity. POPR, 45-47. This is simply untrue. Patent
`
`Owner fails to identify any specific discovery directed to invalidity issues that has
`
`occurred or will occur prior to institution. Id. Moreover, no party has filed a
`
`motion relating to invalidity, and the current deadline for filing dispositive motions
`
`is in August 2022 -- long after the deadline for addressing institution. EX2004, 4.
`
`Juniper Networks, IPR2021-00538, Paper 9, at 12.
`
`The fourth Fintiv factor is the overlap of issues between this proceeding and
`
`the district court case. Pet. 12. Petitioner will stipulate that, if this proceeding is
`
`instituted and not later terminated, it will not assert the same grounds for invalidity
`
`in the District Court that are instituted here. With this stipulation, this factor favors
`
`institution.
`
`3
`
`
`
`The fifth Fintiv factor favors institution. Where the Board is “likely to reach
`
`the merits at or around the same time as the district court case,” institution is
`
`favored. Nvidia Corp. v. Invensas Corp., IPR2020-00603, Paper 11 at 23 (PTAB
`
`Sept. 3, 2020); Pet. 13. As noted above, the Court’s trial date is still only an
`
`estimated date, which is unlikely to hold given the Court’s heavy patent docket.
`
`Supra, at 2-3. Furthermore, even were the trial to commence on the estimated
`
`date, trial would occur within days of the Board’s deadline for a final written
`
`decision. Indeed, the Board could issue its decision prior to even the estimated
`
`trial date, and thus it is unclear which proceeding will conclude first. Pet. 13;
`
`Juniper Networks, IPR2021-00538, Paper 9, at 16.
`
`The sixth Fintiv factor, the merits of the IPR, strongly favors institution.
`
`Pet. 13. Patent Owner contends, without any support, that Dhawan, Clark and
`
`Chandika are somehow not prior art because of an alleged but unidentified prior
`
`conception date for the ’209 patent. POPR, 50. Patent Owner then engages in
`
`pure speculation that discovery in the district court may somehow unearth evidence
`
`to support its contentions. Id. This is hardly sufficient to justify non-institution
`
`here. It is Patent Owner’s burden to present evidence of conception, if it wishes to
`
`attempt to swear behind Petitioner’s prior art. Mahurkar v. C.R. Bard., Inc., 79
`
`F.3d 1572, 1577 (Fed. Cir. 1996). Of course, if any additional discovery were
`
`needed by Patent Owner (or Petitioner), such discovery is available in this
`
`4
`
`
`
`proceeding, including subpoenas if justified. 35 U.S.C. § 24; 37 C.F.R. §§ 42.52-
`
`53. Thus, Patent Owner is fully able to seek in this proceeding any discovery it
`
`believes is justified. Furthermore, Petitioner’s strong showing on the merits further
`
`supports institution here.1
`
`Dated: September 17, 2021
`
`ORRICK, HERRINGTON & SUTCLIFFE LLP
`
`/Don Daybell/
`By:
`Don Daybell
`Lead Counsel for Petitioner
`Reg. No. 50,877
`2050 Main Street, Suite 1100
`Irvine, CA 92614-8255
`T: (949) 567-6700
`F: (949) 567-6710
`Email: D2DPTABDocket@orrick.com
`
`Jared Bobrow
`Pro Hac Vice
`1000 Marsh Road
`Menlo Park, CA 94025-1015
`T: (650) 614-7400
`F: (650) 614-7401
`Email: PTABDocketJ3B3@orrick.com
`Attorneys for Petitioner Microsoft Corporation
`
`1 Out of respect for the scope of the reply authorized by the Board, Petitioner
`
`reserves its substantive arguments on the lack of merit of Patent Owner’s POPR for
`
`its post-institution Reply.
`
`5
`
`
`
`CERTIFICATE OF SERVICE
`
`The undersigned certifies that on September 17, 2021, a copy of
`
`PETITIONER’S PRELIMINARY REPLY was served in its entirety by filing
`
`through the Patent Trial and Appeal Board End to End System, as well as via
`
`electronic mail, upon the following attorneys of record for the Patent Owner:
`
`Lauren N. Robinson
`Brenda Entzminger
`BUNSOW DE MORY LLP
`701 El Camino Real
`Redwood City, CA 94063
`
`lrobinson@bdiplaw.com
`bentzminger@bdiplaw.com
`BDIP_DaedalusMsftIPR@bdiplaw.com
`
`Attorneys for Patent Owner Daedalus Blue, LLC
`
`/Karen Johnson/
` Karen Johnson
`
`
`
`6
`
`
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