Apples Reply 05142018 Apple PTAB Challenge of VirnetX Patents

Case: 17-1368 Document: 58 Page: 1 Filed: 05/14/2018
.
UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
VIRNETX INC.,
Appellant,
v.
THE MANGROVE PARTNERS MASTER FUND, LTD., APPLE INC.,
Appellees.
No. 2017-1368
Appeal from the United States Patent and Trademark Office, Patent Trial and
Appeal Board in No. IPR2015-01046.
VIRNETX INC.,
Appellant,
v.
THE MANGROVE PARTNERS MASTER FUND, LTD., APPLE INC.,
BLACK SWAMP IP, LLC
Appellees.
No. 2017-1383
Appeal from the United States Patent and Trademark Office, Patent Trial and
Appeal Board in No. IPR2015-01047.
BRIEF FOR APPELLEES
May 14, 2018 Counsel listed on inside cover.

WESLEY C. MEINERDING WILLIAM F. LEE

MARTIN & FERRARO, LLP MARK C. FLEMING
1557 Lake O’Pines Street, NE LAUREN B. FLETCHER
Hartville, OH 44632 WILMER CUTLER PICKERING
(330) 877-0700 HALE AND DORR LLP
60 State Street
AMEDEO F. FERRARO Boston, MA 02109
MARTIN & FERRARO, LLP (617) 526-6000
17383 Sunset Boulevard, Suite 380
Los Angeles, CA 90272 BRITTANY BLUEITT AMADI
(310) 286-9800 WILMER CUTLER PICKERING
HALE AND DORR LLP
Attorneys for Appellee Black 1875 Pennsylvania Avenue, NW
Swamp IP, LLC Washington, DC 20006
(202) 663-6000
JAMES T. BAILEY
LAW OFFICE OF JAMES T. BAILEY THOMAS G. SPRANKLING
504 W 136th Street, Suite 1B WILMER CUTLER PICKERING
New York, NY 10031 HALE AND DORR LLP
(917) 626-1356 950 Page Mill Road
Palo Alto, CA 94304
Attorney for Appellee The Mangrove (650) 858-6000
Partners Master Fund, Ltd.
Attorneys for Appellee Apple Inc.
CERTIFICATE OF INTEREST
Counsel for Appellee Apple Inc. certifies the following:
1. The full name of every party or amicus represented by us is:
Apple Inc.
2. The names of the real party in interest represented by us is:
Not applicable.
3. All parent corporations and any publicly held companies that own 10
percent or more of the stock of the party or amicus curiae represented by me are:
None.
4. The names of all law firms and the partners or associates that
appeared for the party or amicus now represented by me in the trial court or agency
or are expected to appear in this court (and who have not or will not enter an
appearance in this case) are:
SIDLEY AUSTIN: Jeffrey P. Kushan, Scott Border, Thomas A. Broughan III
5. The title and number of any case known to counsel to be pending in

this or any other court or agency that will directly affect or be directly affected by
this court’s decision in the pending appeal:
VirnetX Inc. v. Apple Inc., Nos. 17-1591, -1592, -1593 (Fed. Cir.)
VirnetX Inc. v. Iancu, Nos. 17-2593, -2594 (Fed. Cir.)
VirnetX Inc. v. Cisco Systems, Inc., No. 18-1197 (Fed. Cir.)
VirnetX Inc. v. Iancu, No. 18-1751 (Fed. Cir.)
VirnetX Inc. v. Apple Inc., No. 6:10-cv-00417-RWS (E.D. Tex.)
Inter Partes Reexamination No. 95/001,679 (PTO)
-i-
Dated: May 14, 2018 /s/ William F. Lee

WILLIAM F. LEE
WILMER CUTLER PICKERING
HALE AND DORR LLP
60 State Street
Boston, MA 02109
(617) 526-6000
- ii -
Counsel for Appellee Black Swamp IP, LLC certifies the following:
Black Swamp IP, LLC
Not applicable.
None.
MARTIN & FERRARO, LLP: Thomas H. Martin

- iii -
Dated: May 14, 2018 /s/ Wesley C. Meinerding

WESLEY C. MEINERDING
MARTIN & FERRARO, LLP
1557 Lake O’Pines Street NE
Hartville, OH 44632
(330) 877-0700
- iv -
Counsel for Appellee The Mangrove Partners Master Fund, Ltd. certifies the
following:
The Mangrove Partners Master Fund, Ltd.
Not applicable.
None.
WIGGIN AND DANA LLP: Abraham Kasdan; Michael J. Kasdan
LAW OFFICE OF JAMES T. BAILEY: James T. Bailey

-v-
Dated: May 14, 2018 /s/ James T. Bailey

JAMES T. BAILEY
LAW OFFICE OF JAMES T. BAILEY
504 W 136th Street, Suite 1B
New York, NY 10031
(917) 626-1356
- vi -
TABLE OF CONTENTS
Page
CERTIFICATES OF INTEREST ...............................................................................i
TABLE OF AUTHORITIES .....................................................................................x
STATEMENT OF RELATED CASES ..................................................................... 1
JURISDICTIONAL STATEMENT .......................................................................... 5
INTRODUCTION .....................................................................................................5
STATEMENT OF ISSUES .......................................................................................6
STATEMENT OF FACTS ........................................................................................7
A. Apple’s Initial Reexamination Requests And IPR

Petitions .................................................................................................7
B. The Board’s Institution And Joinder Decisions .................................... 8
C. The Board’s Unpatentability Determinations .....................................12
1. The Kiuchi prior art...................................................................12
2. VirnetX’s ’151 and ’135 patents ...............................................15
3. The Board’s findings.................................................................15
SUMMARY OF ARGUMENT ...............................................................................19
STANDARD OF REVIEW .....................................................................................20
ARGUMENT ...........................................................................................................21
I. SUBSTANTIAL EVIDENCE SUPPORTS THE BOARD’S

UNPATENTABILITY FINDINGS REGARDING THE ’151 PATENT
CLAIMS. ..........................................................................................................21
A. Substantial Evidence Supports The Board’s Finding That

Kiuchi Discloses A “DNS Proxy Module.” ........................................21
- vii -
1. VirnetX was not denied due process.........................................22
2. Substantial evidence supports the Board’s finding

that Kiuchi discloses a “DNS proxy module.” .........................27
B. The Board Consistently Mapped Kiuchi To The Claimed

“Secure Server.” ..................................................................................28
C. Substantial Evidence Supports The Board’s

Determination That Kiuchi Discloses A “Client.” ..............................30
1. Substantial evidence supports the Board’s

determination that Kiuchi’s “user agent” is the
claimed “client.”........................................................................30
2. Substantial evidence also supports the Board’s

alternative determination that Kiuchi’s “client-side
proxy” is the claimed “client.” ..................................................33
D. The Board’s Obviousness Determination Was Not

Deficient. .............................................................................................36
II. SUBSTANTIAL EVIDENCE SUPPORTS THE BOARD’S

UNPATENTABILITY FINDINGS REGARDING THE ’135 PATENT
CLAIMS. ..........................................................................................................37
A. Substantial Evidence Supports The Board’s

Determination That Kiuchi Discloses A “Client
Computer.” ..........................................................................................37
B. Substantial Evidence Supports The Board’s

Determination That Kiuchi Discloses A “VPN.”................................41
1. The Board correctly construed “VPN.” ....................................41
2. Kiuchi discloses initiating a VPN between the user

agent and origin server under VirnetX’s proposed
construction. ..............................................................................43
III. THE BOARD CORRECTLY REJECTED VIRNETX’S PROCEDURAL

CHALLENGES. .................................................................................................47
- viii -
A. The Board Acted Within Its Discretion In Granting

Apple’s Joinder Request......................................................................48
1. Section 315 allows the Board to join an otherwise

time-barred party to a timely-instituted IPR. ............................48
2. VirnetX has not established that § 315

unambiguously supports its construction..................................51
3. VirnetX suffered no cognizable prejudice from

Apple’s joinder..........................................................................57
B. The Board’s Conclusion That Mangrove Partners Was

Not A Real-Party-In-Interest Should Not Be Disturbed. ....................59
C. The Board Did Not Abuse Its Discretion By Denying

VirnetX’s Request For Additional Discovery Regarding
RPX. ....................................................................................................64
D. Even if Credited, VirnetX’s Procedural Objections Do

Not Require Remand. ..........................................................................67
E. VirnetX’s Constitutional Argument Has Been Rejected

By The Supreme Court And, In Any Event, Is Waived. .....................67
CONCLUSION ........................................................................................................68
CERTIFICATE OF SERVICE
CERTIFICATE OF COMPLIANCE
- ix -
TABLE OF AUTHORITIES
CASES
Page(s)
Achates Reference Publishing, Inc. v. Apple Inc.,
803 F.3d 652 (Fed. Cir. 2015) ............................................................................49
Anacor Pharmaceuticals, Inc. v. Iancu,

No. 2017-1947, __ F.3d __, slip op. (Fed. Cir. May 14, 2018) .................... 26-27
Arendi S.A.R.L. v. Google LLC,

882 F.3d 1132 (Fed. Cir. 2018) ..........................................................................43
Aylus Networks, Inc. v. Apple Inc.,

856 F.3d 1353 (Fed. Cir. 2017) ..........................................................................42
Bayer CropScience AG v. Dow Agro Sciences LLC,

851 F.3d 1302 (Fed. Cir. 2017) ..........................................................................65
Biogen Idec, Inc. v. GlaxoSmithKline LLC,

713 F.3d 1090 (Fed. Cir. 2013) ..........................................................................43
Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc.,
467 U.S. 837 (1984) ............................................................................................51
Cuozzo Speed Technologies, LLC v. Lee,
136 S. Ct. 2131 (2016) .................................................................................passim
Cybor Corp. v. FAS Technologies, Inc.,

138 F.3d 1448 (Fed. Cir. 1998) (en banc) ..........................................................43
Elbit Systems of America, LLC v. Thales Visionix, Inc.,

881 F.3d 1354 (Fed. Cir. 2018) ..........................................................................26
Fresenius USA, Inc. v. Baxter International, Inc.,

721 F.3d 1330 (Fed. Cir. 2013) ............................................................................ 9
Friskit, Inc. v. Real Networks, Inc.,

306 F. App’x 610 (Fed. Cir. 2009) (nonprecedential) ........................................34
Hakim v. Cannon Avent Group, PLC,

479 F.3d 1313 (Fed. Cir. 2007) ..........................................................................31
-x-
In re Affinity Labs of Texas, LLC,

856 F.3d 883 (Fed. Cir. 2017) ............................................................................20
In re Baxter International, Inc.,

678 F.3d 1357 (Fed. Cir. 2012) ..........................................................................35
In re Comiskey,
554 F.3d 967 (Fed. Cir. 2009) ............................................................................47
In re CSB-System International, Inc.,

832 F.3d 1335 (Fed. Cir. 2016) .................................................................... 20-21
In re Magnum Oil Tools International, Ltd.,

829 F.3d 1364 (Fed. Cir. 2016) ..........................................................................26
In re Mouttet,
686 F.3d 1322 (Fed. Cir. 2012) ..........................................................................20
In re Nuvasive, Inc.,
842 F.3d 1376 (Fed. Cir. 2016) ..........................................................................37
In re VirnetX Inc.,
No. 2016-119, ECF No. 39 (Fed. Cir. Mar. 18, 2016) .......................................11
IPR Licensing, Inc. v. ZTE Corp.,
685 F. App’x 933 (Fed. Cir. 2017) (nonprecedential) ..................................57, 63
Knowles Electronics LLC v. Cirrus Logic, Inc.,
883 F.3d 1358 (Fed. Cir. 2018) ..........................................................................67
Lowe v. Securities & Exchange Commission,
472 U.S. 181 (1985) ............................................................................................54
Marine Polymer Technologies, Inc. v. HemCon, Inc.,
672 F.3d 1350 (Fed. Cir. 2012) (en banc) ..........................................................42
Micrografx, LLC v. Google Inc.,

672 F. App’x 988 (Fed. Cir. 2016) (nonprecedential) ........................................31
Microsoft Corp. v. AT&T Corp.,
550 U.S. 437 (2007) ............................................................................................57
- xi -
Nidec Motor Corp. v. Zhongshan Broad Ocean Motor Co.,

868 F.3d 1013 (Fed. Cir. 2017) ....................................................................49, 50
Novartis AG v. Torrent Pharmaceuticals Ltd.,

853 F.3d 1316 (Fed. Cir. 2017) ....................................................................29, 37
Oil States Energy Services, LLC v. Greene’s Energy Group, LLC,

138 S. Ct. 1365 (2018) ..................................................................................56, 67
Pacific Gas & Electric Co. v. United States,

838 F.3d 1341 (Fed. Cir. 2016) ..........................................................................62
Paice LLC v. Ford Motor Co.,

881 F.3d 894 (Fed. Cir. 2018) ................................................................27, 36, 37
Polaris Industries, Inc. v. Arctic Cat, Inc.,

882 F.3d 1056 (Fed. Cir. 2018) ..........................................................................21
Rambus Inc. v. Rea,
731 F.3d 1248 (Fed. Cir. 2013) ..........................................................................20
Rovalma, S.A. v. Bohler-Edelstahl GmbH & Co.,
856 F.3d 1019 (Fed. Cir. 2017) ..........................................................................28
SAS Institute, Inc. v. ComplementSoft, LLC.,
825 F.3d 1341 (Fed. Cir. 2016) ..........................................................................26
SmithKline Beecham Corp. v. Apotex Corp.,
439 F.3d 1312 (Fed. Cir. 2006) ..............................................................32, 51, 60
State Farm Fire & Casualty Co. v. United States ex rel. Rigsby,
137 S. Ct. 436 (2016) ....................................................................................52, 53
Straight Path IP Group, Inc. v. Sipnet EU S.R.O.,
806 F.3d 1356 (Fed. Cir. 2015) ..........................................................................43
Tempo Lighting, Inc. v. Tivoli, LLC,

742 F.3d 973 (Fed. Cir. 2014) ......................................................................18, 42
Trivascular, Inc. v. Samuels,
812 F.3d 1056 (Fed. Cir. 2016) ..........................................................................38
- xii -
United States v. Atlantic Research Corp.,

551 U.S. 128 (2007) ............................................................................................55
VirnetX Inc. v. Apple Inc.,

665 F. App’x 880 (Fed. Cir. 2016) (nonprecedential) ..............................3, 12, 26

671 F. App’x 786 (Fed. Cir. 2016) (nonprecedential) .......................................... 2
VirnetX Inc. v. Apple, Inc.,

671 F. App’x 789 (Fed. Cir. 2016) (nonprecedential) ...................................... 2-3

715 F. App’x 1024 (Fed. Cir. 2018) (nonprecedential) ........................................ 2

No. 14-1395, ECF No. 34 (Fed. Cir. Feb. 24, 2015) ............................................ 1
No. 6:12-cv-855, 2016 WL 4063802 (E.D. Tex. July 29, 2016).......................... 2
VirnetX, Inc. v. Cisco Systems, Inc.,
767 F.3d 1308 (Fed. Cir. 2014) ...................................................................passim
VirnetX Inc. v. Cisco Systems, Inc.,
No. 6:10-cv-00417, Dkt. 1 (E.D. Tex. Aug. 11, 2010)......................................... 7
WesternGeco LLC v. ION Geophysical Corp.,
No. 2016-2099, __ F.3d __, 2018 WL 2090314 (Fed. Cir. May 7,
2018) .............................................................................................................27, 34
Whitman v. American Trucking Associations, Inc.,

531 U.S. 457 (2001) ............................................................................................53
Wi-Fi One LLC v. Broadcom Corp.,

878 F.3d 1364 (Fed. Cir. 2018) (en banc) ....................................................49, 60
Wi-Fi One, LLC v. Broadcom Corp.,

887 F.3d 1329 (Fed. Cir. 2018) ...................................................................passim
- xiii -
STATUTES AND REGULATIONS
35 U.S.C.
§ 102....................................................................................................................48
§ 103....................................................................................................................48
§ 311........................................................................................................48, 52, 53
§ 311(a) .........................................................................................................48, 53
§ 311(b) ...............................................................................................................48
§ 311(c) .........................................................................................................48, 53
§ 312(a)(2) ..........................................................................................................59
§ 314(d) ...............................................................................................................59
§ 315.............................................................................................................passim
§ 315(b) ........................................................................................................passim
§ 315(c) ........................................................................................................passim
§ 315(e) ...............................................................................................................52
§ 316(a) ...............................................................................................................51
§ 316(a)(1) ..........................................................................................................52
§ 316(a)(4) ....................................................................................................49, 51
§ 316(a)(5) ..........................................................................................................64
§ 316(a)(10) ........................................................................................................51
§ 316(a)(12) ........................................................................................................55
§ 316(a)(13) ........................................................................................................51
§ 317(a) ...............................................................................................................52
§ 318(a) ...............................................................................................................52
37 C.F.R.
§ 42.51.................................................................................................................64
§ 42.122(b) ................................................................................................9, 10, 49
§ 42.123(a) ..........................................................................................................59
77 Fed. Reg. 48,690 (Aug. 14, 2012).......................................................................49
Office Practice Trial Guide, 77 Fed. Reg. 48,756 (Aug. 14, 2012)...................61, 62
ADMINISTRATIVE DECISIONS
Apple Inc. v. VirnetX, Inc.,
IPR2013-00354, Paper 20 (P.T.A.B. Dec. 13, 2013) ........................................... 8
Dell, Inc. v. Network-1 Security Solutions, Inc.,

IPR2013-00385, Paper 17 (P.T.A.B. July 29, 2013) .............................. 49-50, 52
- xiv -
Garmin International, Inc. v. Cuozzo Speed Technologies LLC,

IPR2012-00001, Paper 26 (P.T.A.B. Mar. 5, 2013) ..................................... 64-65
Microsoft Corp. v. ProxyConn, Inc.,

IPR2013-00109, Paper 15 (P.T.A.B. Feb. 25, 2013)....................................49, 67
RPX Corp. v. VirnetX Inc.,

IPR2014-00171, Paper 49 (P.T.A.B. June 5, 2014) ............................................. 8
LEGISLATIVE MATERIALS
154 Cong. Rec. S9988..............................................................................................53

H.R. Rep. No. 112-98, pt. 1 (2011)..........................................................................50
S. 3600, 110th Cong., § 5(c) (2008) ........................................................................53
OTHER AUTHORITIES
Scalia, Antonin & Bryan A. Garner, Reading Law (2012)......................................54
- xv -
STATEMENT OF RELATED CASES
The patents at issue in this appeal, U.S. Patent Nos. 6,502,135 (“the ’135
patent”) and 7,490,151 (“the ’151 patent”), were also the subject of proceedings in
the United States District Court for the Eastern District of Texas. A trial as to
Apple in VirnetX Inc. v. Cisco Systems, Inc., No. 6:10-cv-00417 (“the 417
matter”), resulted in a jury verdict and judgment that was appealed to this Court
(No. 2013-1489). This Court affirmed-in-part, reversed-in-part, vacated-in-part,
and remanded for further proceedings involving the ’135 and ’151 patents, as well
as two related patents, U.S. Patent Nos. 7,418,504 (“the ’504 patent”) and
7,921,211 (“the ’211 patent”). VirnetX, Inc. v. Cisco Sys., Inc., 767 F.3d 1308
(Fed. Cir. 2014) (Prost, C.J., joined by Chen, J.) (“VirnetX I”).
Before the appeal, the district court severed a proceeding limited to an
ongoing royalty, No. 6:13-cv-00211. After appeal, this Court vacated the ongoing
royalty order. VirnetX Inc. v. Apple Inc., No. 14-1395, ECF No. 34 (Fed. Cir. Feb.
24, 2015) (Hughes, J., joined by O’Malley & Wallach, JJ.). The remanded
proceedings in the 417 matter were consolidated with another proceeding in which
VirnetX had asserted the same patents against Apple, VirnetX Inc. v. Apple Inc.,
No. 6:12-cv-00855 (“the 855 matter”). That matter had previously been
consolidated with yet another case, VirnetX Inc. v. Apple Inc., No. 6:11-cv-00563.
A consolidated trial in that matter took place in January 2016, after which the
-1-
district court granted new, severed trials in both the 855 matter and the 417 matter.
VirnetX Inc. v. Apple Inc., No. 6:12-cv-855, 2016 WL 4063802 (E.D. Tex. July 29,
2016). A third trial in the 417 matter took place in September 2016, and the
district court entered final judgment on September 29, 2017. The appeal of the
remanded 417 matter is currently pending before this Court (No. 18-1197). Trial
in the 855 matter took place in April 2018, and the parties have not yet filed post-
trial motions. The 855 matter remains pending in the district court.
The patents at issue in this appeal are also the subject of inter partes
reexamination proceedings pending before the Patent Trial and Appeal Board (“the
Board”). See Reexamination Control Nos. 95/001,682 (the ’135 patent) and
95/001,697 and 95/001,714 (the ’151 patent).
Additionally, this Court has decided previous appeals regarding related
VirnetX patents, in each case affirming the Board’s findings that all claims of the
challenged patent were unpatentable. See VirnetX Inc. v. Apple Inc., Nos. 17-1131,
17-1132, 17-1186, 17-1274, 17-1275, 17-1276, 17-1291, 715 F. App’x 1024 (Fed.
Cir. 2018) (Newman, Mayer, & Lourie, JJ.) (U.S. Patent Nos. 8,458,341;
8,516,131; 8,560,705; 8,850,009; and 8,868,705); VirnetX Inc. v. Apple Inc., Nos.
16-1211, 16-1213, 16-1279, 16-1281, 671 F. App’x 786 (Fed. Cir. 2016)
(O’Malley, J., joined by Mayer & Wallach, JJ.) (U.S. Patent Nos. 7,188,180 (“the
’180 patent”) and 7,987,274 (“the ’274 patent”)); VirnetX Inc. v. Apple, Inc., No.
-2-
16-1480, 671 F. App’x 789 (Fed. Cir. 2016) (O’Malley, J, joined by Mayer &
Wallach, JJ.) (U.S. Patent No. 8,051,181 (“the ’181 patent”)); VirnetX Inc. v. Apple
Inc., Nos. 15-1934, 15-1935, 665 F. App’x 880 (Fed. Cir. 2016) (Wallach, J.,
joined by Mayer, J.; dissent by O’Malley, J.) (U.S. Patent No. 8,504,697).
Numerous other appeals of Board proceedings relating to VirnetX patents
are pending before this Court:
Federal Circuit Patent Trial and Appeal

Docket No. Board Case No. Patent No.
17-1591 Control No. 95/001,788 7,418,504
17-1592 Control No. 95/001,789 7,921,211
17-1593 Control No. 95/001,856 7,921,211
17-2490 IPR2016-00331 8,504,696
17-2494 IPR2016-00332 8,504,696
17-2593 IPR2016-00693 7,418,504
17-2594 IPR2016-00957 7,921,211
18-1751 Control No. 95/001,851 7,418,504
18-1872 IPR2016-01585 8,904,516
Three additional proceedings regarding the patents at issue in these
consolidated appeals are pending before the Board: Reexamination Control No.
95/001,682 (the ’135 patent) and Reexamination Control Nos. 95/001,679 and
95/001,714 (the ’151 patent). Still other cases regarding related VirnetX patents
are pending before the Board: Reexamination Control No. 95/001,746 (U.S. Patent
No. 6,839,759) and IPR2017-00337 (U.S. Patent No. 9,038,163). The Board has
also issued final decisions involving a related VirnetX patent from which no
-3-
appeals have been taken: IPR2015-01009 and IPR2015-01010 (U.S. Patent No.
8,843,643).
On April 11, 2018, this Court ordered that these proceedings be considered
companion cases with—and assigned to the same merits panel as—VirnetX Inc. v.
Apple, Inc., Nos. 2017-1591, -1592, -1593, and VirnetX Inc. v. Cisco Systems, Inc.,
No. 2018-1197.
-4-
JURISDICTIONAL STATEMENT
This Court lacks jurisdiction to review the Board’s determination that
Mangrove Partners Hedge Fund (“Mangrove Partners”) is not a real-party-in-
interest. See infra pp. 59-60.
INTRODUCTION
The Board declared every challenged claim of VirnetX’s ’135 and ’151
patents anticipated (and, for some claims, also obvious). Lacking any legitimate
critique of the Board’s substantive analysis, VirnetX tries to portray these run-of-
the-mill proceedings as more exciting than they are. VirnetX’s efforts fail.
VirnetX’s scattershot objections to the Board’s factual findings miss the
mark, as those findings were amply supported, and VirnetX’s claim that the Board
deprived it of due process founders on any fair reading of the record. There was no
surprise or inconsistency in the Board’s analysis. The Board simply accepted and
adopted Petitioners’ well-grounded positions, to which VirnetX had ample
opportunity to respond.
The Board’s decision to join Apple to the proceeding filed by The Mangrove
Partners Master Fund, Ltd. (“Mangrove”) rested on the statutory plain language
and was consistent with the view of every authority to consider the issue—
including five Members of this Court. Mangrove was not required to list
Mangrove Partners as a real-party-in-interest, because Mangrove Partners is
-5-
Mangrove’s agent, and Mangrove is ultimately in control over Mangrove Partners’
actions on its behalf. And even VirnetX concedes that its request for additional
discovery regarding RPX Corporation (“RPX”) presented at most a “possible
connection” between RPX and Mangrove (Br. 64), which does not satisfy the well-
established and unchallenged standard for additional discovery in an IPR
proceeding.
VirnetX’s conspiracy theories make for entertaining reading, but the reality
here is duller. The Board’s decisions should be affirmed.
STATEMENT OF ISSUES
1. Whether substantial evidence supports the Board’s factual findings
that Kiuchi renders the challenged ’151 patent claims anticipated and/or obvious.
2. Whether substantial evidence supports the Board’s factual findings
that Kiuchi anticipates the challenged ’135 patent claims.
3. Whether the Board was entitled to (a) join Apple to Mangrove’s IPR
under 35 U.S.C. § 315(b)-(c); (b) find that Mangrove Partners was not a real-party-
in-interest; and (c) deny VirnetX’s request for additional discovery into whether
RPX is a real-party-in-interest.
-6-
STATEMENT OF FACTS
A. Apple’s Initial Reexamination Requests And IPR Petitions
In 2010, VirnetX sued Apple for infringement of the ’135 and ’151 patents.
VirnetX Inc. v. Cisco Sys., Inc., No. 6:10-cv-00417, Dkt. 1 (E.D. Tex. Aug. 11,
2010). In July 2011, before Congress enacted the America Invents Act (“AIA”)
creating inter partes review (“IPR”), Apple requested inter partes reexamination of
both patents. See Reexamination Control Nos. 95/001,682, 95/001,697.1 Although
the PTO rejected every asserted claim as unpatentable, VirnetX successfully stalled
the reexaminations by seeking numerous extensions and exploiting the PTO’s
practice of suspending action while an administrative petition is pending. To this
day—after more than forty such petitions and nearly seven years later—the
reexaminations remain pending before the Board.
Apple also pursued review through the new IPR system, filing initial
petitions in June 2013. At that time, the Board had not decided whether
infringement complaints filed before the AIA’s enactment would trigger 35 U.S.C.
§ 315(b)’s time bar. The Board ultimately concluded that pre-AIA complaints did
bar later IPR petitions, but it did not deny that its novel interpretation was
“particularly unjust,” as it prevented defendants like Apple from filing a timely
1
VirnetX’s assertion that Apple’s “first” administrative challenge came
“almost three years” after VirnetX’s infringement complaint (Br. 14) is flat wrong.
-7-
IPR petition. E.g., Apple Inc. v. VirnetX, Inc., IPR2013-00354, Paper 20 at 3-4
(P.T.A.B. Dec. 13, 2013).2
B. The Board’s Institution And Joinder Decisions
In 2015, Mangrove petitioned for IPR of the ’135 and ’151 patents.
Appx231; Appx1987. Mangrove is an SEC-registered investment advisor and in
no way related to Apple. Appx5029. On October 7, 2015, the Board instituted
review on all petitioned grounds. Appx398-410; Appx2194-2206. The Board
determined that Mangrove had shown a reasonable likelihood that the challenged
claims were unpatentable, and rejected each of VirnetX’s arguments against
institution, including that Mangrove had failed to name other alleged real-parties-
in-interest, such as Mangrove Partners. The Board recognized that—even if
Mangrove Partners were a real-party-in-interest—nothing precluded Mangrove
from modifying the petition to list Mangrove Partners. E.g., Appx2201 (“[T]he
record [does not] indicate that any such modification would result in rendering this
proceeding improper.”). VirnetX declined Mangrove’s subsequent offer to add
Mangrove Partners as a real-party-in-interest. Appx3497.
2
VirnetX suggests that Apple caused RPX to file IPR petitions on Apple’s
behalf. Br. 15-16. Contrary to VirnetX’s dramatic narrative, the Board terminated
the RPX proceedings for a mundane reason: Apple had an existing contractual
relationship with RPX. See RPX Corp. v. VirnetX Inc., IPR2014-00171, Paper 49
at 4 (P.T.A.B. June 5, 2014).
-8-
The Board also rejected VirnetX’s request for discovery into whether RPX
was a real-party-in-interest because VirnetX’s discovery arguments amounted to
“no more than a mere allegation of some kind of general association between”
Mangrove and RPX, which was “insufficient to show beyond mere speculation that
such discovery would be in the interests of justice.” Appx448; Appx2243.
On October 26, 2015, Apple filed IPR petitions challenging the ’135 and
’151 patents, and requested that the Board join Apple to the Mangrove
proceedings. Appx1840-1900; Appx3698-3775.3 Apple timely filed its petitions
within one month of institution of the Mangrove IPRs. See 37 C.F.R. § 42.122(b);
Appx1891; Appx3766. Apple presented the same unpatentability grounds as the
Mangrove petitions. Appx1892; Appx3766. Apple’s petitions also included the
same exhibits as Mangrove, plus additional exhibits confirming that certain prior-
art references were publicly available before the claims’ earliest effective filing
date. Appx1895-1896; Appx3770-3771.
On November 6, 2015, Black Swamp, a member-run LLC with no relation
to Apple or Mangrove, also filed an IPR petition against the ’151 patent, and
3
Although this Court previously affirmed a jury verdict finding the ’135 and
’151 patents not invalid, related infringement and damages issues are still being
litigated. See VirnetX I, 767 F.3d 1308; Fresenius USA, Inc. v. Baxter Int’l, Inc.,
721 F.3d 1330, 1341 (Fed. Cir. 2013) (district court validity ruling does not bar
PTO reexamination unless there is “nothing for the court to do but execute the
judgment” in the litigation).
-9-
requested joinder to the Mangrove proceeding against that patent. Appx3867-
3868; Appx3965. The Board instituted IPR on that petition and joined Black
Swamp to the Mangrove IPR. Appx3971; Appx3970 (finding that adding Black
Swamp to the proceedings would have at most an “inconsequential” effect on
VirnetX). VirnetX does not appeal any aspect of Black Swamp’s joinder.
On January 25, 2016, the Board instituted trial on Apple’s petitions and
granted Apple’s requests to join the Mangrove IPRs. Appx1978-1986; Appx3853-
3862. The Board rejected VirnetX’s time-bar argument, explaining that 35 U.S.C.
§ 315(b) makes clear that “[t]he time limit … shall not apply [to] … a time-barred
petition [that] requests joinder.” Appx1981; Appx2322. The PTO’s regulation
interpreting § 315(b) “confirmed” this understanding by providing that the one-
year bar “‘shall not apply when the petition is accompanied by a request for
joinder.’” Appx1981; Appx2322; 37 C.F.R. § 42.122(b). The Board also held that
VirnetX had not established that joinder would “impact” the proceedings by, for
example, raising additional legal issues. Appx1981-1982; Appx2322-2323.
The Board took steps to ensure that neither VirnetX nor Mangrove would be
prejudiced by Apple’s joinder. For example, the Board ordered that “the grounds
on which [trial] was instituted are unchanged and no other grounds are included in
the joined proceeding[s].” Appx1984; Appx2325. The Board also held that Apple
would be bound by any existing discovery agreements and could not “seek any
- 10 -
discovery beyond that sought by” Mangrove. Appx1983; Appx2324. Finally, the
Board instructed that Mangrove—not Apple—would designate the attorneys to
cross-examine VirnetX’s witnesses and present at the oral hearing. Appx1983;
Appx2324.4
VirnetX sought rehearing by an expanded panel. Appx581; Appx2395. The
Board denied VirnetX’s motions, explaining that VirnetX’s arguments were
“unpersuasive to demonstrate that [the Board] misapprehended or overlooked any
points.” Appx582; Appx2396. This Court denied VirnetX’s petition for
mandamus. In re VirnetX Inc., No. 2016-119, Dkt. 39 at 2 (Fed. Cir. Mar. 18,
2016).
In its final written decisions, the Board reaffirmed its rejection of VirnetX’s
arguments that Mangrove failed to name other alleged real-parties-in-interest and
that Apple’s petitions were improperly joined. Appx41-45; Appx80-84. VirnetX
petitioned for rehearing on the real-party-in-interest issue, which the Board denied,
stating that VirnetX provided “insufficient evidence to demonstrate that an
agreement exists between Mangrove Partners … and [Mangrove], that Mangrove
Partners … controls the filing or preparation of the [IPR petitions] or that
4
These limits refute VirnetX’s suggestion (Br. 19-20) that Apple improperly
took an outsized role in the proceedings. Apple did only what Mangrove could
have done on its own, and it was Mangrove’s choice to involve Apple’s attorneys.
- 11 -
Mangrove Partners … , in fact, exerted control over the filing or preparation of the
petition.” Appx1764-1769, Appx3620-3625.
C. The Board’s Unpatentability Determinations
The Board found claims 1, 2, 6-8, and 12-14 of the ’151 patent anticipated
by Kiuchi and obvious over Kiuchi in view of RFC 1034 and/or Rescorla.
Appx55-78. The Board also found claims 1, 3, 4, 7, 8, 10, and 12 of the ’135
patent anticipated by Kiuchi, and claim 8 obvious over Kiuchi and RFC 1034.
Appx18-40.
1. The Kiuchi prior art
Internet communications use IP addresses (e.g., 123.45.678.9) to identify
devices connected to the Internet. VirnetX Inc. v. Apple Inc., 665 F. App’x 880,
882 (Fed. Cir. 2016) (nonprecedential). Because IP addresses are difficult to
remember, they are often associated with human-readable domain names (e.g.,
www.apple.com). Id. When one computer seeks to communicate with another, it
sends a domain name service request to the domain name server (“DNS”) for the
IP address corresponding to a given domain name. Id.; Appx152(37:22-29). The
DNS looks up the IP address corresponding to the requested domain name and
returns it to the requesting computer, which uses that IP address to communicate
with the receiving computer. Appx152(37:22-39).
- 12 -
Before VirnetX’s patents, “[a] tremendous variety of methods ha[d] been
proposed and implemented to provide security and anonymity for communications
over the Internet.” Appx134(1:15-17). One such reference was a 1996 paper
referred to as “Kiuchi.” Appx3976-3993. Kiuchi describes “a closed HTTP
(Hypertext Transfer Protocol)-based network (C-HTTP) which can be built on the
Internet.” Appx3982.
Kiuchi describes a system for securely transferring communications between
a “user agent” associated with a client-side proxy and an “origin server” associated
with a server-side proxy:
Appx5534; Appx7370. To participate in the C-HTTP network, a user must first
“install a client-side and/or server-side proxy on its firewall” and “register an IP
- 13 -
address … and hostname” in the C-HTTP network. Appx3983. To communicate
with a server in the C-HTTP network, a user selects a hyperlink URL (e.g.,
http://server.in.current.connection/sample.html) from an HTML document using
the user agent. Id. The client-side proxy associated with the user agent then sends
a request for the URL to the C-HTTP name server. Id. Upon receiving the
request, the C-HTTP name server determines “whether the requested server-side
proxy is registered in the closed network” and, if so, returns the IP address for the
requested URL. Id.
“When the C-HTTP name server confirms that the specified server-side
proxy is an appropriate closed network member, a client-side proxy sends a request
for connection to the server-side proxy.” Appx3983. The server-side proxy in turn
“asks the C-HTTP name server whether the client-side proxy is an appropriate
member of the closed network.” Appx3983-3984. If so, the C-HTTP name server
sends the IP address for the client-side proxy to the server-side proxy and “the
connection is established.” Appx3984. “[A] client-side proxy forwards HTTP/1.0
requests from the user agent in encrypted form” to the server-side proxy, which
forwards those requests to the origin server. Id. The origin server then sends an
encrypted response to the server-side proxy, which is “forwarded to the client-side
proxy” and on to the user agent. Id.
- 14 -
2. VirnetX’s ’151 and ’135 patents
The ’151 and ’135 patents, which share a common specification, describe
systems and methods for “automatic[ally] creati[ng]” a “virtual private network
(VPN) in response to a domain name server look-up function.” Appx152(37:19-
21). When a DNS request is sent to the DNS as in conventional Internet
communications, a DNS proxy “intercepts all DNS lookup functions” and
“determines whether access to a secure site has been requested” by, for example,
referencing “an internal table of such sites.” Appx152-153(38:14-27, 39:1-3). If
“access to a secure site has been requested” and the requesting computer “has
sufficient security privileges to access the site,” a VPN is established between the
requesting computer and the secure site. Appx152-153(38:25-33, 39:7-9, 39:42-
52). Each patent’s claim 1 is representative. Appx229(46:55-67) (’151 patent);
Appx157(47:20-32) (’135 patent).
3. The Board’s findings
The ’151 patent. Adopting and relying on the mappings identified in
Mangrove’s petition, the Board determined that Kiuchi anticipates all challenged
’151 patent claims. Appx57. In particular, the Board found that “Kiuchi discloses
… a data processing device, comprising memory storing a [DNS] proxy module
that intercepts DNS requests sent by a client.” Appx57 (citing Appx2016-2018;
Appx7370(¶18); Appx7372-7374(¶¶20–22); Appx7377-7379(¶¶27-28);
- 15 -
Appx7380-7381(¶31); Appx3982-3984). The Board also found that Kiuchi
discloses “determining whether the intercepted DNS request corresponds to a
secure server … and when the intercepted DNS request corresponds to a secure
server, automatically initiating an encrypted channel between the client and the
secure server.” Appx57 (citing Appx2019-2023; Appx7374-7377(¶¶23-26);
Appx7378-7381(¶¶28-31); Appx3982-3984).
The Board next addressed—and rejected—each of VirnetX’s arguments.
Appx58-Appx88. For example, the Board disagreed with VirnetX’s contention
that Petitioners’ identification of the “client-side proxy and C-HTTP name server”
as the claimed “DNS proxy module” amounted to a “new argument,” explaining
that “Petitioner[s] previously argued that the client-side proxy and the C-HTTP
name server perform the claimed determining step in the Petition.” Appx85-86.
The Board also observed that VirnetX did not dispute that Kiuchi discloses a C-
HTTP name server that “determines whether the DNS request corresponds to a
secure server.” Appx60-61.
Regarding the “client” limitations, the Board found that “Kiuchi discloses a
‘request’ from a user agent (i.e., ‘client’) that requests an IP address corresponding
to a domain name with subsequent formation of an encrypted channel (i.e., secure
communication link) between the user agent (i.e., ‘client’) and origin server (i.e.,
‘the secure server’).” Appx58-59. Addressing Petitioners’ alternative mapping
- 16 -
wherein Kiuchi’s “client-side proxy” is the “client,” the Board “assum[ed] … that
a ‘client’ … must be ‘associated with’ a user,” as VirnetX contended, and found
that the client-side proxy satisfied the “client” limitation as well. Appx62-63. The
Board further explained that the no-invalidity finding in VirnetX I was not
dispositive, because the district court’s decision was based on “different evidence,
arguments, and standards of proof.” Appx65; see Appx63-65.
Finally, the Board acknowledged Petitioners’ evidence that the challenged
claims were obvious over Kiuchi in view of Rescorla and/or RFC 1034. Appx67-
68. The Board rejected VirnetX’s challenge to Petitioners’ obviousness arguments
because Petitioners had shown that “the disputed claims are unpatentable over
Kiuchi.” Id. The Board nonetheless addressed and rejected VirnetX’s
nonobviousness contentions. Appx68-76.
The ’135 patent. Again adopting the mappings identified in Mangrove’s
petition, the Board determined that Kiuchi anticipates all challenged ’135 patent
claims. Appx21. The Board found that “Kiuchi discloses ‘a method of
transparently creating a [VPN] between a client computer and a target computer.’”
Appx21 (citing Appx260-261; Appx5534-5535(¶¶18-20); Appx5542-5543(¶¶30-
31); Appx3982-3983; Appx3987). The Board also found that Kiuchi discloses the
claimed steps of “generating from the client computer a [DNS] request”;
“determining whether the DNS request … is requesting access to a secure web
- 17 -
site”; and, if so, “automatically initiating the VPN between the client computer and
the target computer.” Appx21 (citing Appx261-262; Appx5535-5543(¶¶20-31);
Appx3983-3984; Appx4021-4022).
The Board next addressed—and again rejected—each of VirnetX’s
patentability arguments. Appx21-50. Although VirnetX sought to construe the
term “client computer” narrowly to mean a “user’s computer,” the Board found
that Kiuchi discloses a “client computer” even under VirnetX’s construction,
because Kiuchi’s “‘user agent makes [a] … request to connect to a host.’”
Appx25-26; see Appx26 & n.4 (noting that VirnetX “agree[d] that Kiuchi’s ‘user
agent’ is the same as the claimed ‘client computer’”). Additionally, the Board
rejected VirnetX’s contention that the “client-side proxy” could not also be a
“client computer” because it is not “associated with” a user, on grounds similar to
those articulated in the ’151 proceedings. Appx26-29; see supra pp. 16-17.
The Board also rejected VirnetX’s challenges to Petitioners’ evidence that
Kiuchi discloses the claimed “VPN.” Appx29-34. The Board explained that
VirnetX’s purported “disclaimer” of non-direct communications could not
overcome the claim language and specification, particularly given the Board’s
obligation to give terms their broadest reasonable interpretation and that disclaimer
“‘generally only binds the patent owner.’” Appx31-32; Appx34 (quoting Tempo
Lighting, Inc. v. Tivoli, LLC, 742 F.3d 973, 978 (Fed. Cir. 2014)).
- 18 -
SUMMARY OF ARGUMENT
1. Substantial evidence supports the Board’s findings that the ’151
patent claims are unpatentable over Kiuchi. Consistent with the arguments
advanced in the petitions (of which VirnetX was well aware), the Board found that
Kiuchi discloses a “DNS proxy module” that performs each claim step. The Board
properly mapped Kiuchi’s disclosure to the claimed “secure server”—a limitation
that VirnetX never disputed was taught by Kiuchi. Substantial evidence also
supports the Board’s finding that Kiuchi discloses the claimed “client” under two
alternative mappings—one that VirnetX does not dispute, and a second applying
VirnetX’s own interpretation. And the Board’s obviousness analysis—which
VirnetX concedes has no bearing on its appeal—fully considered (and rejected)
each of VirnetX’s arguments.
2. Substantial evidence likewise supports the Board’s unpatentability
determinations regarding the ’135 patent claims. The record amply supports the
Board’s finding that Kiuchi discloses the claimed “client computer,” also based on
two alternative mappings (only one of which VirnetX challenges). The Board also
properly rejected VirnetX’s attempt to import its own purported disclaimer into
the otherwise broad “VPN” limitation—an argument that fails in any event,
because Kiuchi discloses a VPN under any interpretation.
- 19 -
3. Recognizing the weakness of its substantive arguments, VirnetX falls
back on procedural ones. But the Board’s interpretation of the AIA’s joinder
provisions aligns with every authority to consider the issue. And Apple’s joinder
caused VirnetX no cognizable prejudice—Apple raised no new arguments and
Mangrove retained decision-making authority. The Board also applied the correct
legal standard and reached the correct result in determining that Mangrove’s agent
Mangrove Partners was not a real-party-in-interest. Finally, the Board acted within
its discretion by denying additional discovery into whether RPX is a real-party-in-
interest, given that the Board undisputedly applied the correct standard to the
relevant facts.
The Board’s decisions should be affirmed.
STANDARD OF REVIEW
This Court reviews “the Board’s factual findings for substantial evidence
and its legal conclusions de novo.” Rambus Inc. v. Rea, 731 F.3d 1248, 1251 (Fed.
Cir. 2013). “Substantial evidence is something less than the weight of the evidence
but more than a mere scintilla of evidence.” In re Mouttet, 686 F.3d 1322, 1331
(Fed. Cir. 2012). Anticipation is a question of fact reviewed for substantial
evidence. In re Affinity Labs of Tex., LLC, 856 F.3d 883, 894 (Fed. Cir. 2017).
This Court reviews the Board’s claim construction de novo, and “any
determinations involving extrinsic evidence for substantial evidence.” In re CSB-
- 20 -
System Int’l, Inc., 832 F.3d 1335, 1340 (Fed. Cir. 2016). During IPR proceedings,
the Board gives claims their “broadest reasonable interpretation in light of the
claim language and the specification.” Polaris Indus., Inc. v. Arctic Cat, Inc., 882
F.3d 1056, 1065 (Fed. Cir. 2018).
The Board’s administration of its procedural rules is reviewed for abuse of
discretion. Wi-Fi One, LLC v. Broadcom Corp., 887 F.3d 1329, 1339 (Fed. Cir.
2018).
ARGUMENT
I. SUBSTANTIAL EVIDENCE SUPPORTS THE BOARD’S UNPATENTABILITY

FINDINGS REGARDING THE ’151 PATENT CLAIMS.
A. Substantial Evidence Supports The Board’s Finding That Kiuchi

Discloses A “DNS Proxy Module.”
Each challenged ’151 patent claim recites “a domain name server (DNS)
proxy module that intercepts DNS requests sent by a client” and performs several
steps. Appx229(46:55-67).5 VirnetX accuses the Board of changing theories
“midstream” and argues that the Board’s “new theory” lacks substantial evidence
support. Br. 31-32, 36-37. VirnetX’s arguments require several unwarranted leaps
and should be rejected.
5
Emphases are added unless otherwise indicated.
- 21 -
1. VirnetX was not denied due process.
VirnetX contends (Br. 31-34) that Petitioners initially argued that Kiuchi’s
client-side proxy was the claimed “DNS proxy module,” but then “shifted gears” to
rely on the combination of the client-side proxy and C-HTTP name server. That is
incorrect. Petitioners’ mapping was the same throughout.
In the IPR petitions, Mangrove and Apple repeatedly explained that
“Kiuchi’s client-side proxy – working in concert with the C-HTTP name server –
is a [DNS] proxy module.” Appx2016; Appx3724; see Appx2023-2024;
Appx3730-3731 (describing “client-side proxy described in Kiuchi, which works
in concert with the C-HTTP name server”). Mangrove and Apple also explained
that “the client-side proxy determines whether the request corresponds to a secure
server by asking ‘the C-HTTP name server whether it can communicate with the
host specified in a given URL.’” Appx2019-2020; Appx3727. Notably, VirnetX
admitted that Mangrove’s petition relied on “Kiuchi’s ‘client-side proxy’ and ‘C-
HTTP name server’ for allegedly disclosing” the claimed “DNS proxy module.”
Appx3932.6
6
Black Swamp’s petition focused on Kiuchi’s client-side proxy (Appx3879),
but VirnetX was hardly deprived of notice and an opportunity to be heard on this
issue; VirnetX itself pointed out the difference. Appx3932 (VirnetX arguing that
“Black Swamp relies on different portions of the references for the same claim
feature,” namely “Kiuchi’s ‘client-side proxy’ alone” and contrasting with
Mangrove’s position). As the Board concluded, “any alleged difference” in Black
Swamp’s petition was not “sufficiently different and complex to preclude joinder.”
- 22 -
VirnetX thus knew that Petitioners were relying on the client-side proxy and
C-HTTP name server for the “DNS proxy module” limitation. Despite several
opportunities to respond, VirnetX simply chose not to. VirnetX’s preliminary
response spent less than a page addressing the merits and offered no rebuttal to
Petitioners’ argument that the client-side proxy and C-HTTP name server together
satisfy the “DNS proxy module” limitation. Appx2157-2158. Given VirnetX’s
failure to challenge Petitioners’ mapping, the Board’s institution decision
unsurprisingly agreed that “Kiuchi discloses a ‘client-side proxy’ that ‘determines
whether the request corresponds to a secure server by asking the C-HTTP name
server whether it can communicate with the host specified in a given URL.’”
Appx2200 (quoting Appx2019-2020).
Following institution, VirnetX continued to leave Petitioners’ mapping of
the claimed “DNS proxy module” to Kiuchi’s client-side proxy and C-HTTP name
server unrebutted. VirnetX instead misstated Petitioners’ argument, claiming that
Petitioners identified “the client-side proxy [as] the alleged DNS proxy module”
while pointing to “the C-HTTP name server as performing the recited
‘determining’ step.” Appx3038 (citing Appx2016, which expressly identifies the
client-side proxy “working in concert with the C-HTTP name server” as the “DNS
Appx3968-3969. Black Swamp later joined a reply articulating mappings identical

to those in Mangrove’s and Apple’s petitions. See infra p. 67.
- 23 -
proxy module”). VirnetX nonetheless conceded that, regarding the “determining
whether” step, the C-HTTP name server “examines whether the server-side proxy
is registered in the closed network” (and accordingly corresponds to a “secure
server”). Appx3038.
In reply, Petitioners reiterated the position from their petitions, namely that
“the client-side proxy and C-HTTP name server ‘determin[e]’ whether access to a
secure website was requested.” Appx3199 (second emphasis in original); see also
id. (“[T]he client-side proxy works with the C-HTTP name server to resolve a
hostname …. [T]he client-side proxy and the C-HTTP server together
‘determin[e]’ that the HTTP GET request sent by the user agent was for a secure
destination.” (third emphasis in original)).
Even though VirnetX forfeited two opportunities to address Petitioners’
mapping of the client-side proxy and the C-HTTP name server to the claimed
“DNS proxy module,” the Board gave VirnetX a third chance: it authorized a sur-
reply for VirnetX to address issues it claimed not to have had “a fair opportunity to
respond to,” including Petitioners’ “DNS proxy module” argument. Appx3454;
see Appx3273-3274 (VirnetX identifying as alleged “new claim mapping”
Petitioners’ argument that the client-side proxy and C-HTTP name server together
satisfy the “determining whether” limitation); Appx3466-3468 (VirnetX’s sur-
reply addressing the “determining whether” limitation).
- 24 -
VirnetX’s assertion of a lack “notice” and “an opportunity to respond” (Br.
36) to Petitioners’ mapping of Kiuchi to the “DNS proxy module” limitation thus
fails in light of the three separate opportunities VirnetX had to address it.
The Board’s decision relied on Petitioners’ consistent mapping. As VirnetX
acknowledges (Br. 35), the Board recognized that “Petitioner … argued that the
client-side proxy and the C-HTTP name server perform the claimed determining
step in the Petition.” Appx86.7 The Board cited the very petition passages
discussed above (supra p. 22) in finding that Kiuchi discloses the claimed “[DNS]
proxy module that intercepts DNS requests” and “determin[es] whether the
intercepted DNS request corresponds to a secure sever.” Appx57 (citing
Appx2016-2020). The Board further explained that “Kiuchi discloses [that] the
‘client-side proxy asks the C-HTTP name server whether it can communicate with
the host specified in a given URL” and that the C-HTTP name server “examines
whether the requested server-side proxy … is permitted to accept the connection
from the client-side proxy.” Appx58 (citing Appx2020). While the Board focused
on the C-HTTP name server’s role in “determining whether” the request is for a
secure site (Appx60-61), it did so because VirnetX’s sur-reply focused on the C-
7
The Board did not “equat[e] ‘Kiuchi’s C-HTTP name server (and not the
client-side proxy) with the claimed DNS proxy module.’” Br. 35. In the passage
VirnetX cites, the Board merely discussed its view of Black Swamp’s petition.
Appx62. Ultimately, the Board adopted the positions in Mangrove’s petition
(Appx57), which Black Swamp adopted in reply (Appx3199-3200).
- 25 -
HTTP name server, arguing that it was not part of the claimed “DNS proxy
module” because it is “centralized”—an argument VirnetX abandons on appeal.
Appx3467-3468.8
VirnetX’s cited cases do not justify disturbing the Board’s decision. Br. 31,
35-36. In the “fact-specific circumstance” of SAS Institute, Inc. v.
ComplementSoft, LLC, 825 F.3d 1341, 1350-1351 (Fed. Cir. 2016), rev’d on other
grounds, 138 S. Ct. 1348 (2018), the Board adopted a construction that neither
party advocated for a term whose meaning was never disputed. Similarly, in In re
Magnum Oil Tools International, Ltd., 829 F.3d 1364, 1381 (Fed. Cir. 2016), the
Court held that the Board is not “free to adopt arguments on behalf of petitioners
that could have been, but were not, raised by the petitioner.” Here, there was no
change of claim construction or adoption of arguments not made by Petitioners.
Rather, the Board expressly agreed with the petition’s mappings after granting
VirnetX three opportunities to address this precise issue. There was no due
process violation. See Anacor Pharms., Inc. v. Iancu, No. 2017-1947, slip op. 15
8
VirnetX improperly reads (Br. 35) the Board’s statement that “Kiuchi
discloses … a [DNS] proxy module (i.e., C-HTTP name server)” (Appx60) in
isolation, rather than in the context of the Board’s acceptance of—and reliance
on—Petitioners’ mapping in the petition. See Elbit Sys. of Am., LLC v. Thales
Visionix, Inc., 881 F.3d 1354, 1359 (Fed. Cir. 2018) (“[W]e will not find legal
error based upon an isolated statement stripped from its context.” (citation
omitted)); VirnetX Inc. v. Apple Inc., 665 F. App’x 880, 886 (Fed. Cir. 2016)
(nonprecedential) (same).
- 26 -
(Fed. Cir. May 14, 2018) (no due process violation where “Board did not
materially deviate from the theory … in the petition,” which patentee “had ample
notice of and an opportunity to respond to”); WesternGeco LLC v. ION
Geophysical Corp., No. 2016-2099, __ F.3d __, 2018 WL 2090314, at *13 (Fed.
Cir. May 7, 2018) (“Having put [the limitation] at issue, [patentee] was well aware
that the Board could alter its [position] in the final written decision.”).
2. Substantial evidence supports the Board’s finding that

Kiuchi discloses a “DNS proxy module.”
VirnetX’s sufficiency challenge regarding the “DNS proxy module”
limitation rests on the (incorrect) assertion that the “C-HTTP name server alone
performs all the claimed steps of the DNS proxy module.” Br. 36. But as
discussed above (supra pp. 22-27), Petitioners argued and the Board found that
“Kiuchi’s client-side proxy – working in concert with the C-HTTP name server –
is a [DNS] proxy module.” Appx2016; Appx57 (citing Appx2016-2019); Appx85-
86 (citing Appx2020); see Paice LLC v. Ford Motor Co., 881 F.3d 894, 905 (Fed.
Cir. 2018) (Board’s decision supported where Board “cit[ed] to the relevant
portions of [petitioner’s] briefing that explain how the prior art discloses the
relevant claim limitations”).
The Board also explained how Kiuchi’s components performed each
function of the claimed “DNS proxy module.” E.g., Appx60-61 (“Kiuchi discloses
‘[t]he C-HTTP name server determin[es] whether the host in the C-HTTP name
- 27 -
request … is part of the closed network and whether the connection is permitted,
and if so, returns an IP address and public key.’” (quoting Appx3199)). The
Board relied on VirnetX’s own admissions, finding it undisputed that Kiuchi
discloses a “DNS proxy module” that “determines whether the DNS request
corresponds to a secure server”—a finding unchallenged by VirnetX on appeal (Br.
36-37). Appx60-61 (citing Appx3038); see Rovalma, S.A. v. Bohler-Edelstahl
GmbH & Co., 856 F.3d 1019, 1028 (Fed. Cir. 2017) (“[A] tribunal may use a
party’s own submissions against it, even if the opposing party bears the burden of
persuasion.”).
B. The Board Consistently Mapped Kiuchi To The Claimed “Secure

Server.”
VirnetX next asserts (Br. 37-38) that the Board applied an “inconsistent
mapping” of Kiuchi’s components to the claimed “secure server.” That is
incorrect. The Board again adopted the petition’s arguments, which were
undisputed by VirnetX and fully supported.
VirnetX attempts (Br. 37) to manufacture inconsistency for the “secure
server” limitation by citing the Board’s discussion of a different limitation—the
“DNS request” limitation in the claim’s preamble, which does not even recite a
“secure server.” Appx58-59; see Appx229(46:55-58) (reciting “a [DNS] proxy
module that intercepts DNS requests sent by a client and, for each intercepted DNS
request, performs the steps of …”); cf. Appx60-61 (separately addressing the
- 28 -
“secure server” limitation). The Board’s reference to Kiuchi’s “origin server”
when discussing that “DNS request” limitation is irrelevant to the Board’s separate
analysis of the “secure server” limitation.
Moreover, VirnetX ignores the petition’s explanation that Kiuchi’s “origin
server” and “server-side proxy” are both “secure server[s],” because the
“encrypted channel” extends to each. Appx2019 (“[B]oth the server-side proxy
and origin server are … secure servers[.]”); Appx2022-2023 (“Kiuchi discloses
that the client-side proxy automatically initiates an encrypted channel between the
user agent (acting as a client) and the origin server (a secure server) via the server-
side proxy (also a secure server).”); see Appx7379-7380(¶29) (“Both the server-
side proxy and origin server are secure servers[.]”). VirnetX never disputed that
Kiuchi’s origin server and server-side proxy are both “secure server[s].” See
Appx3034-3045; Appx3460-3461; see also Novartis AG v. Torrent Pharms. Ltd.,
853 F.3d 1316, 1327-1328 (Fed. Cir. 2017) (inappropriate “to find fault” where
Board’s treatment of argument “was at least commensurate with” patent owner’s
own treatment).
The Board agreed with Petitioners’ mapping of Kiuchi to the “secure sever”
limitation. Appx57 (citing Appx2016-2020; Appx2021-2023; Appx7374-
- 29 -
7381(¶¶23-26, 28-31)). 9 And the Board’s discussion of the “determining whether”
and “automatically initiating” limitations was also entirely consistent with mapping
both Kiuchi’s origin server and server-side proxy to the claimed “secure server.”
See Appx60-61. VirnetX’s complaint of inconsistency thus fails.
C. Substantial Evidence Supports The Board’s Determination That

Kiuchi Discloses A “Client.”
Each challenged ’151 patent claim requires “automatically initiating an
encrypted channel between the client and the secure server.” Appx229(46:66-67).
VirnetX accuses (Br. 38) the Board of not “explicitly construing” the term “client.”
But the Board made two findings regarding the claimed “client”: (1) that Kiuchi’s
“user agent” is a “client” regardless of which proposed construction applied
(Appx58-59); and (2) that Kiuchi’s “client-side proxy” is a “client” even as
interpreted by VirnetX (Appx62-63). The Board did not need to “explicitly”
construe “client” to make these fully-supported findings.
1. Substantial evidence supports the Board’s determination

that Kiuchi’s “user agent” is the claimed “client.”
VirnetX’s entire argument regarding the “client” limitation rests on the
Board’s purported finding that “Kiuchi’s client-side proxy meets the ‘client’
limitation.” Br. 38. But VirnetX ignores the Board’s separate finding that
9
The Board did not “disclaim[] any reliance” on Apple’s expert Dr. Guerin’s
testimony. Br. 37 n.8. Rather, the Board found the testimony “helpful” and
“entitled to due weight.” Appx78.
- 30 -
Kiuchi’s “user agent” is the claimed “client.” Appx58-59 (“Kiuchi discloses a
‘request’ from a user agent (i.e., ‘client’)[.]”). That determination was not
dependent on construing “client,” as VirnetX never disputed that Kiuchi’s “user
agent” was a “client” under any proposed construction. VirnetX’s appeal brief
even admits the point. Br. 10 (describing Kiuchi’s “client (also referred to as a
user agent)”); see Appx3038-3040 (not disputing that Kiuchi’s “user agent” is a
“client”); Hakim v. Cannon Avent Grp., PLC, 479 F.3d 1313, 1318-1319 (Fed. Cir.
2007) (“When there is no dispute as to the meaning of a term that could affect the
disputed issues … , ‘construction’ may not be necessary.”); see also Micrografx,
LLC v. Google Inc., 672 F. App’x 988, 991 (Fed. Cir. 2016) (nonprecedential)
(claim construction error harmless where prior art “unquestionably” disclosed
limitation under correct construction).
The Board’s decision tracked Petitioners’ mapping of Kiuchi’s “user agent”
to the claimed “client.” See Appx2017, Appx3725 (“The user agent is a ‘client,’
under that term’s broadest reasonable interpretation, because the user agent is a
computer or program from which a data request to a server is generated.”);
Appx3880 (“[B]ecause the user agent is a computer and/or computer program from
which a resource request is made, the user agent is a ‘client’ under the broadest
reasonable construction of that term.”). The Board agreed with Petitioners that
Kiuchi’s “user agent” is a “client,” explaining that “Kiuchi discloses … DNS
- 31 -
requests sent by a client” (Appx57 (citing Appx2016-2019; Appx7370-7381(¶¶18,
20-22, 27, 28, 31))) because “Kiuchi discloses a ‘request’ from a user agent (i.e.,
‘client’) that requests an IP address corresponding to a domain name” (Appx58).
VirnetX’s response below only involved claims 1 and 7, arguing that
“Kiuchi does not disclose an ‘encrypted channel between the user agent and the
origin server via the server side proxy,’” because “encryption does not extend to
Kiuchi’s user agent.” Appx3039; Appx3045-3046. The Board rejected that
argument, explaining that “claim 1 does not recite ‘end-to-end encryption’ or that
encryption must extend to the user agent.” Appx61; see Appx3203-3204;
Appx7379-7381(¶¶29-31); see also Appx3984 (communications are “encrypted in
C-HTTP format”). VirnetX said nothing as to claim 13, which recites
automatically initiating a “secure channel,” rather than an “encrypted channel.”
Appx3046; see Appx3205.
By not challenging the Board’s findings on appeal, VirnetX has waived any
argument that Kiuchi’s “user agent” is not a “client” or that Kiuchi lacks an
“encrypted channel” or “secure channel” between the user agent and secure server.
SmithKline Beecham Corp. v. Apotex Corp., 439 F.3d 1312, 1319 (Fed. Cir. 2006)
(“[A]rguments not raised in the opening brief are waived.”). In any event, as
described above, substantial evidence supports the Board’s determination that
- 32 -
Kiuchi’s “user agent” is the claimed “client.” Either avenue is independently
sufficient to affirm the Board’s decision on this limitation.10
2. Substantial evidence also supports the Board’s alternative

determination that Kiuchi’s “client-side proxy” is the
claimed “client.”
Since VirnetX never disputed that Kiuchi’s “user agent” is a “client,” the
Board focused its analysis on VirnetX’s challenges to Petitioners’ alternative
argument: that Kiuchi’s “client-side proxy” is also a “client.” Appx62-65; see
Appx3200-3203. In addressing that argument, the Board assumed that VirnetX’s
proposed construction of “client” was correct, finding that Kiuchi’s client-side
proxy was a “client” even under VirnetX’s interpretation. Appx62 (“[E]ven
assuming Patent Owner to be correct that a ‘client[]’ … must be ‘associated with’ a
user, we are not persuaded by Patent Owner that Kiuchi fails to disclose that the
client-side proxy is ‘associated with’ a user.”); Appx63 (“[E]ven assuming Patent
Owner’s proposed definition to be correct that a ‘client’ must be ‘associated with’
a user, Patent Owner does not demonstrate sufficient differences between a ‘client-
10
Indeed, the Board’s final written decision regarding the ’135 patent (see
infra pp. 37-40), which was issued by the same panel, on the same day, and
addressed nearly identical claims, observed with respect to the “client computer”
limitation that VirnetX apparently agreed “that Kiuchi’s ‘user agent’ is the same as
the claimed ‘client computer,’” which neither party differentiated from the “client”
recited in the ’151 patent claims. Appx25-26. VirnetX also does not challenge
that finding on appeal. Br. 44-45.
- 33 -
side proxy’ of Kiuchi that is ‘associated with’ a user … and the claimed
‘client[.]’”).
As the Board explained, Kiuchi’s client-side proxy is associated with a
“user” as VirnetX defined it, because the “‘client-side proxy’ receives a request for
access from a user agent” and a skilled artisan would understand that, for a user “to
provide a request to access information, the ‘user agent’ … would be ‘associated
with the ‘client-side proxy’ to which the user agent sends a request.” Appx62-63.
The Board did not need to formally construe “client” to make that finding.
WesternGeco, 2018 WL 2090314, at *13 (affirming where construction “did not
affect the unpatentability outcome because the Board concluded that the
challenged claims were unpatentable even under [patentee’s] construction”);
Friskit, Inc. v. Real Networks, Inc., 306 F. App’x 610, 612 (Fed. Cir. 2009)
(nonprecedential) (formal claim construction unnecessary where “the prior art
technology … satisfies [the disputed] limitation even under [patentee’s]
definition”). 11
11
VirnetX’s contentions (Br. 40, 42) that Kiuchi’s disclosure of a “user agent”
and a “client-side proxy” requires “separation as a necessary feature of [Kiuchi’s]
system” and that the ’151 patent “discloses that a client and a proxy server are
distinct” also miss the mark. As the Board explained, “even assuming that Kiuchi
refers to a ‘client’ and ‘client-side proxy’ separately,” there are no “sufficient
differences between the ‘client-side proxy’ of Kiuchi and a ‘client,’ as recited in
claim 1.” Appx63. Similarly, the ’151 patent’s discussion of both a “client” and a
“proxy server” does not preclude Kiuchi’s client-side proxy from being a “client”
as claimed. See Appx3203 (“[T]here can be multiple clients and servers in a
- 34 -
Moreover, the Board explicitly rejected VirnetX’s contention (Br. 40-42)
that VirnetX I compels a finding that Kiuchi’s “client-side proxy” cannot be the
claimed “client.” As the Board explained (Appx63-64), this Court considered only
whether substantial evidence supported the jury’s verdict that invalidity was not
proven “by clear and convincing evidence.” VirnetX I, 767 F.3d at 1323-1324.
While the Court ruled that the jury heard evidence that “the ‘client’ of Kiuchi is
actually a web browser,” id. at 1324, it did not hold that the record compelled the
conclusion that Kiuchi’s client-side proxy cannot meet the “client” limitation—
and it certainly did not “reject[] Apple’s argument ‘that the “client-side proxy” of
Kiuchi meets th[at] limitation’” (Br. 41). See Appx64. As this Court has
explained, “the PTO … and the court system in patent infringement actions take
different approaches in determining validity and on the same evidence could quite
correctly come to different conclusions.” In re Baxter Int’l, Inc., 678 F.3d 1357,
1364 (Fed. Cir. 2012) (internal quotation marks omitted). Acknowledging VirnetX
I, the Board accordingly explained that the district court proceeding involved
“different evidence, arguments, and standards of proof,” and therefore did not
system, and … a device can sometimes act as a client and sometimes as a server.”).
The ’151 patent itself explains that processes can be distributed across multiple
computers or integrated onto a single computer. See, e.g., Appx225(38:30-35).
- 35 -
prevent the Board from reaching an unpatentability determination on this record.
Appx65.12
D. The Board’s Obviousness Determination Was Not Deficient.
VirnetX assails the Board’s obviousness analysis (Br. 43-44), while
conceding that obviousness is not relevant here because the secondary references
(Rescorla and RFC 1034) addressed only claim limitations that VirnetX does not
dispute on appeal are disclosed by Kiuchi. Moreover, as the Board recognized,
reliance on obviousness was unnecessary because there were no “deficiencies” in
Kiuchi. Appx67.13
12
The Board’s statement that its construction of “client” was “slightly”
broader than the district court’s construction was neither “vague” nor erroneous
(Br. 39); the Board had already construed “client” in a separate IPR proceeding
involving the ’151 patent. See Appx4146-4147 (“a device, computer, system, or
program from which a data request to a server is generated”); see also Appx2006
(Petitioners advocating for same construction in the proceedings at issue). That
construction was fully supported by the specification, which describes “client”
broadly. See Appx2006. Given the Board’s extensive history with VirnetX’s
patents and the ’151 patent in particular, there was nothing unreasonable about
that. See, e.g., Paice, 881 F.3d at 905 (affirming Board decision where technology
was “familiar based in part on [the patentee’s] repeated arguments in related
proceedings and the Board’s hundreds of pages of analysis in these six
proceedings,” and where the Board’s findings “flow[ed] directly from its rejection
of [the patentee’s] arguments”).
13
Rescorla and/or RFC 1034 were asserted in case the Board determined that
Kiuchi did not disclose “automatically initiating an encrypted [or secure] channel”
and/or that Kiuchi’s client-side proxy and/or C-HTTP name server did not perform
certain tasks. Appx2028-2048; Appx3735-3754; Appx3891-3892. VirnetX states
that those points “are not at issue in this appeal” (Br. 9 n.1, 43-44), and has thus
abandoned any argument that Kiuchi does not disclose them. See also supra
- 36 -
In any event, VirnetX never argued that a skilled artisan would not have
combined Kiuchi with Rescorla and, regarding RFC 1034, argued only that
“Kiuchi expressly states that the C-HTTP name server does not use DNS
functionality” (Appx3049)—an argument the Board rejected (Appx58-60) and
VirnetX abandons on appeal. See also Appx2029-2037 (explaining why it would
have been obvious to combine Kiuchi with Rescorla and/or RFC 1034);
Appx3736-3743 (same). VirnetX’s only nonobviousness contentions involved
secondary considerations, which the Board addressed at length. Appx69-76. The
Board was not obligated to address arguments VirnetX did not raise. Novartis, 853
F.3d at 1328; see Paice, 881 F.3d at 905 (Board’s obviousness analysis sufficient
where it “flow[ed] directly from its rejection of [patentee’s primary] arguments”
and was “commensurate with [those] arguments”); cf. In re Nuvasive, Inc., 842
F.3d 1376, 1382 (Fed. Cir. 2016) (“[T]he PTAB must make a finding of a
motivation to combine when it is disputed.”).
II. SUBSTANTIAL EVIDENCE SUPPORTS THE BOARD’S UNPATENTABILITY

FINDINGS REGARDING THE ’135 PATENT CLAIMS.
A. Substantial Evidence Supports The Board’s Determination That

Kiuchi Discloses A “Client Computer.”
Each challenged ’135 patent claim requires “creating a virtual private
network (VPN) between a client computer and a target computer.” E.g.,
pp. 31-32 (explaining that VirnetX abandoned its “encrypted channel” argument on
appeal).
- 37 -
Appx157(47:20-32). Though VirnetX ignores the Board’s similar finding in the
’151 IPR (supra pp. 30-33), VirnetX concedes that the Board in the ’135 IPR
relied on Kiuchi’s “user agent” as the claimed “client computer” (Br. 44), and does
not dispute that Kiuchi’s “user agent” is a “client computer” even under VirnetX’s
proposed construction. Instead, VirnetX alleges it had no opportunity to respond
to that mapping because it supposedly “departs … from the Board’s institution
decision.” Br. 44-45.
Of course, “the Board is not bound by any findings made in its Institution
Decision. At that point, the Board is considering the matter preliminarily without
the benefit of a full record. The Board is free to change its view of the merits after
further development of the record, and should do so if convinced its initial
inclinations were wrong.” Trivascular, Inc. v. Samuels, 812 F.3d 1056, 1068 (Fed.
Cir. 2016) (emphasis in original). The relevant question is thus not whether the
Board’s final decision differs from its institution decision, but whether VirnetX
had notice and an opportunity to respond to the Board’s ultimate position. The
record is clear that it did. 14
14
Moreover, the Board’s institution decision did acknowledge Petitioners’
position that the “user agent” was the claimed “client computer.” E.g., Appx403
(“As Petitioner explains, Kiuchi discloses, for example, that the ‘C-HTTP name
server evaluates … whether the connection between the user agent and the origin
server is permitted.’” (quoting Appx261-262)).
- 38 -
VirnetX admitted in its Patent Owner Response that Petitioners identified
the “user agent” as the claimed “client computer.” Appx1222 (“Petitioners …
appear to advance two alternative theories, pointing to: (1) a request sent by the
user agent to the client-side proxy, and (2) a C-HTTP request to be sent by the
client-side proxy to the C-HTTP name server.”); Appx1226 (acknowledging that
Petitioners rely “in some instances on Kiuchi’s user agent and origin server for the
claimed ‘client computer’ and ‘target computer,’ respectively”). The petitions
show the correctness of VirnetX’s concession. Appx260-261, Appx1870 (“The
proxy servers automatically initiate the secure connection to encrypt any traffic
sent over the Internet between the user agent and the origin server.”); Appx263,
Appx1872 (“Data is securely transmitted between the user agent and origin server
because the proxy servers automatically encrypt any traffic sent between them.”);
see also Appx1365 (“The Petition explained how two different aspects of the
Kiuchi system met the ‘client computer’ and ‘target computer’ elements of the
claims: (1) the client-side and server-side proxies, and (2) the user agent and
origin server.” (emphasis in original)); Appx1370 (“Petitioners explained Kiuchi
discloses two ‘client computer[s]’: (1) the user agent … and (2) the client-side
proxy[.]” (emphasis in original)). Thus, VirnetX had ample notice and opportunity
to respond to the Board’s finding—based on the petitions—that Kiuchi’s “user
agent” is a “client computer.”
- 39 -
Despite this notice, VirnetX never disputed this point. See Appx1226-1230
(acknowledging Petitioners’ alternative mappings, but addressing only whether the
“client-side proxy” is a “client computer”); Appx1227 (“In Kiuchi, the user’s
computer is the user agent[.]”); see also Appx26 (Board recognizing that “Patent
Owner agrees that Kiuchi’s ‘user agent’ is the same as the claimed ‘client
computer.’”); Appx1370 (“Patent Owner concedes Kiuchi’s user agent is a ‘user’s
computer’ and thus satisfies its own, narrow construction of ‘client computer.’”
(second emphasis in original)). VirnetX does not even acknowledge, much less
refute, these findings that it conceded the point. See Br. 10 (noting Kiuchi’s
“client” is “also referred to as a user agent”). It cannot walk away from those
admissions now.15
Recognizing that the Board alternatively relied on Kiuchi’s “client-side
proxy,” VirnetX also claims (Br. 44) that the “client-side proxy” mapping “fails for
the same reasons” as in the ’151 IPR. But as in the ’151 IPR (supra pp. 33-36), the
Board assumed that VirnetX’s proposed construction of “client computer” was
correct, concluding that Kiuchi’s client-side proxy was a “client computer” even
under VirnetX’s interpretation. Appx26 (“[A]ssuming that a ‘client computer’
must be ‘associated with’ a user, we are not persuaded by Patent Owner that
15
VirnetX’s suggestion (Br. 45) that the “user agent” fails to “perform the
functions of the client computer” merely repackages its arguments regarding the
VPN limitation, which should be rejected. See infra pp. 41-47.
- 40 -
Kiuchi fails to disclose this feature.”); Appx27 (“Patent Owner does not
demonstrate sufficient differences between a ‘client-side proxy’ of Kiuchi that is
‘associated with’ a user … and the claimed ‘client computer[.]’”); see also
Appx26-27 (explaining that a skilled artisan would understand Kiuchi’s “client-
side proxy” to be associated with a “user” as VirnetX contended).
The Board also properly rejected VirnetX’s contention that VirnetX I
compels a finding that Kiuchi’s “client-side proxy” cannot be the claimed “client
computer,” explaining that the district court proceedings involved “different
evidence, arguments, and standards of proof.” See Appx27-29; see also supra pp.
35-36.
B. Substantial Evidence Supports The Board’s Determination That

Kiuchi Discloses A “VPN.”
Each challenged ’135 patent claim requires “automatically initiating the
VPN between the client computer and the target computer.” E.g., Appx157(47:29-
32). VirnetX does not dispute that Kiuchi discloses a “VPN” as construed by the
Board. Instead, VirnetX seeks to import a “direct communication” requirement by
pointing to its own purported disclaimer. This is not only improper, but futile—
Kiuchi discloses a VPN even under VirnetX’s (erroneous) narrower construction.
1. The Board correctly construed “VPN.”
VirnetX contends (Br. 46) that the Board erred by failing to construe “VPN”
to require “direct” communication. VirnetX’s sole argument for its narrow
- 41 -
construction is VirnetX’s own disclaimer, during reexamination, of
communications that are not “direct.” Br. 46-47. But “prosecution disclaimer
ensures that claims are not ‘construed one way in order to obtain their allowance
and in a different way against accused infringers.’” Aylus Networks, Inc. v. Apple
Inc., 856 F.3d 1353, 1360 (Fed. Cir. 2017). It does not provide a mechanism for a
patentee to avoid invalidity without engaging in the formal process of amendment
where, as here, the claims would otherwise be construed more broadly. 16
The Board recognized that the claims require “‘initiating the VPN between
the client computer and the target computer,’ but [do] not recite or otherwise
require a ‘direct communication’ between the client computer and target
computer.” Appx30. Similarly, “none of the examples [of VPNs in the
specification] … disclose that a VPN must have a ‘direct communication’ between
any specific components.” Appx30-31. VirnetX advances no argument to the
contrary. Br. 46-48. Under these circumstances, “the PTO is under no obligation
to accept a claim construction proffered as a prosecution history disclaimer, which
generally only binds the patent owner.” Tempo Lighting, Inc. v. Tivoli, LLC, 742
F.3d 973, 978 (Fed. Cir. 2014).
16
Indeed, claims that are effectively amended through argument alone are not
subject to intervening rights. Marine Polymer Techs., Inc. v. HemCon, Inc., 672
F.3d 1350, 1365 (Fed. Cir. 2012) (en banc).
- 42 -
VirnetX’s cited cases (Br. 46) are not to the contrary. Straight Path IP
Group, Inc. v. Sipnet EU S.R.O., 806 F.3d 1356, 1362 (Fed. Cir. 2015), referenced
the prosecution history only as “confirm[ing]” what the claim language and
specification required. And in Arendi S.A.R.L. v. Google LLC, 882 F.3d 1132,
1136 (Fed. Cir. 2018), the applicant actually amended the claims during
prosecution to narrow them. Neither case holds that a patentee may leverage its
own purported “disclaimer” to avoid unpatentability of otherwise broad claims. 17
To hold otherwise would allow patentees like VirnetX to narrow the scope of
otherwise invalid claims through argument, without the consequences that attach to
formal amendment. The Board correctly determined that “the collective evidence
outweighs” such a result. Appx32.
2. Kiuchi discloses initiating a VPN between the user agent

and origin server under VirnetX’s proposed construction.
Even accepting VirnetX’s requirement of “direct” communication, Kiuchi
still discloses a VPN. VirnetX’s contrary argument applies only where Kiuchi’s
user agent and origin server are mapped to the claimed “client computer” and
“target computer”; it has no impact on the Board’s alternative mapping involving

17
While the Court in Biogen Idec, Inc. v. GlaxoSmithKline LLC, 713 F.3d
1090, 1095-1097 (Fed. Cir. 2013), “assum[ed] without deciding that neither the
claims nor the specification compel[led] a [narrow] construction,” the Court
applied prosecution history disclaimer against the patentee, not in its favor.
Similarly, the accused infringer—not the patentee—relied on prosecution history
disclaimer in Cybor Corp. v. FAS Technologies, Inc., 138 F.3d 1448, 1457 (Fed.
Cir. 1998) (en banc).
- 43 -
the client-side and server-side proxies. See Br. 45, 48 (arguing only that the user
agent and origin server are precluded from directly communicating). Thus, if the
Court agrees—as it should—that substantial evidence supports the Board’s
determination that the client-side proxy is a “client computer” (supra pp. 40-41), it
should affirm without more.
With respect to the user agent/origin server mapping, VirnetX contends (Br.
48-49) that Kiuchi lacks direct communication because “the C-HTTP proxy
servers preclude the user agent and origin server from directly communicating by
stopping communication at the proxies, wrapping/unwrapping messages,
encrypting/decrypting their contents, re-formatting, and ultimately re-sending
messages.” But the ’135 specification discloses embodiments that include those
same operations, which apparently do not impede “direct” communication.18 For
example, in one embodiment illustrated in Figure 29 (reproduced below), host
computers 2900 and 2902 communicate over the Internet through a path that
includes Internet service provider (“ISP”) 2901. Appx154(41:23-25). Host
computer 2900 maintains a separate connection with ISP 2901, which “encrypt[s]
and decrypt[s] the VPN packets” and “translates packets arriving at the ISP into
18
As the Board acknowledged (Appx34), VirnetX repeatedly failed to “explain
clearly how to interpret ‘direct,’” likely attempting to avoid undermining its
infringement arguments in parallel litigation. See, e.g., Appx4601-4602(262:11-
263:20) (VirnetX’s expert acknowledging he failed to identify what is required for
“direct” communication).
- 44 -
packets having a different IP header before they are transmitted to host computer
2900.” Appx154(41:56-65).
Appx130.
Similarly, in the TARP embodiment detailed in the specification, the packets
transferred between communicating computers are “encrypted” and “wrapped with
an IP header” before being transferred to “the next hop or destination” (i.e., TARP
router) along the route, where the next TARP router “decrypt[s]” the packet and
“perform[s] a selected operation on some data included with the clear IP header
attached to the encrypted TARP packet” before routing it to the next hop.
- 45 -
Appx139-140(12:58-13:38); see also Appx138(10:48-51) (“[E]ach entire TARP
packet 340 … is encrypted using the link key for communication with the first-
hop-TARP router.”); Appx143(20:52-56) (“[I]f there is a match, the packet is
unwrapped, the inner header is evaluated, and if the inner header indicates that the
packet is destined for that machine then the packet is forwarded to the IP stack[.]”);
Appx125(Fig. 24); Appx151(36:26-31); VirnetX I, 767 F.3d at 1318 (describing
TARP embodiment, which the patent identifies “as a key part of the novel solution
to the specific problem identified in the prior art”).
Kiuchi’s client-side and server-side proxies perform operations that are
virtually indistinguishable from those performed by the ’135 patent’s “TARP
routers.” Once the connection is established between Kiuchi’s user agent and
origin server, the “client-side proxy forwards HTTP/1.0 requests from the user
agent in encrypted form using C-HTTP format.” Appx3984; see Appx5543-
5544(¶32); VirnetX Br. 13. The server-side proxy similarly “forwards requests to
the origin server.” Appx3984; see Appx5544(¶33); VirnetX Br. 13. Responses
sent from the origin server are received by the server-side proxy, “encrypted in C-
HTTP form,” and “forwarded to the client-side proxy” where they are “decrypted
and the HTTP/1.0 response extracted” and “sent to the user agent.” Appx3984; see
- 46 -
Appx5544(¶33); VirnetX Br. 13. 19 Accordingly, the only reasonable result on this
record is that Kiuchi discloses “direct” communication even under VirnetX’s
proposed construction. See, e.g., VirnetX I, 767 F.3d at 1319 (noting in discussing
related ’504 and ’211 patents, that “computer 3301 can establish a VPN
communication link 3323 with secure server computer 3320 through proxy
computer 3315”). This Court may affirm on that basis as well. See In re
Comiskey, 554 F.3d 967, 974 (Fed. Cir. 2009).
III. THE BOARD CORRECTLY REJECTED VIRNETX’S PROCEDURAL

CHALLENGES.
Unable to show reversible error in the Board’s unpatentability
determinations, VirnetX ends its brief with procedural objections. But VirnetX’s
arguments are doubly misguided—the Board acted properly and, regardless, any
error was harmless.
19
VirnetX’s contention that Kiuchi’s client-side and server-side proxies “stop
communication,” “re-format[],” and “re-send[] messages” is incorrect. Rather, as
the Board found, messages are merely “encrypted in C-HTTP format” and
“forwarded” to the user agent and/or origin server. Appx3984; see Appx20
(“[T]he client-side proxy forwards ‘requests from the user agent in encrypted form
using C-HTTP format.’” (quoting Appx3984)). Indeed, this Court previously held
that “direct communication” was not impeded by devices that “merely translate
addresses from the public address space to the private address space, but do not
terminate the connection,” noting that “routers, firewalls, and similar servers ... do
not impede ‘direct’ communication.” VirnetX I, 767 F.3d at 1320.
- 47 -
A. The Board Acted Within Its Discretion In Granting Apple’s

Joinder Request.
1. Section 315 allows the Board to join an otherwise time-

barred party to a timely-instituted IPR.
Joinder requests are governed by 35 U.S.C. § 315(c), which grants the PTO
Director discretion to “join as a party to [an] inter partes review any person who
properly files a petition under section 311[.]” Apple’s petitions undisputedly
satisfied § 311’s requirements: Apple is not the patent owner; the petitions
requested cancellation under 35 U.S.C. § 102 or 103; and the petitions were filed
over nine months after patent issuance. 35 U.S.C. § 311(a)-(c). The Board was
accordingly entitled to join Apple as a party to Mangrove’s IPRs.
Section 315(b)’s one-year time bar does not provide otherwise. Its text is
clear:
An 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. The time
limitation set forth in the preceding sentence shall not apply to a
request for joinder under subsection (c).
Every authority that has considered subsections 315(b) and (c) together has
reached the same conclusion—a person who would otherwise be time-barred may
be “join[ed] as a party” to an IPR instituted on another petitioner’s timely-filed
petition. Two Members of this Court explained that “the exception to the time bar
for request[s] for joinder was plainly designed to apply where time-barred Party A
- 48 -
seeks to join an existing IPR timely commenced by Party B when this would not
introduce any new patentability issues.” Nidec Motor Corp. v. Zhongshan Broad
Ocean Motor Co., 868 F.3d 1013, 1020 (Fed. Cir. 2017) (Dyk, J., joined by
Wallach, J., concurring). Similarly, the panel in Achates Reference Publishing,
Inc. v. Apple Inc., 803 F.3d 652, 657 (Fed. Cir. 2015), concluded that “timeliness
issue[s can] be[] avoided if” a time-barred petitioner requests to join an identical
and timely petition filed by another party, because § 315(b) permits “an otherwise
time-barred party [to] nonetheless participate in an inter partes review proceeding
if another party files a proper petition.”20
The PTO reads the statute similarly. Exercising the broad authority
Congress granted to “prescribe regulations … establishing and governing inter
partes review” (35 U.S.C. § 316(a)(4)), the PTO determined that § 315(b)’s time
bar “shall not apply when the petition is accompanied by a request for joinder.”
37 C.F.R. § 42.122(b). As the PTO stated in issuing the rule, “[t]his [approach] is
consistent with the last sentence of 35 U.S.C. 315(b).” 77 Fed. Reg. 48,690 (Aug.
14, 2012). The PTO has regularly followed this rule. E.g., Microsoft Corp. v.
ProxyConn, Inc., IPR2013-00109, Paper 15 at 4-5 (P.T.A.B. Feb. 25, 2013); Dell,
20
The en banc Court overruled Achates’ holding that time-bar rulings under
§ 315(b) are unreviewable, but did not address the panel’s interpretation of § 315’s
joinder rules. Wi-Fi One LLC v. Broadcom Corp., 878 F.3d 1364 (Fed. Cir. 2018)
(en banc). Achates is no longer “precedential” (VirnetX Br. 52 n.12), but remains
persuasive on this point.
- 49 -
Inc. v. Network-1 Security Solutions, Inc., IPR2013-00385, Paper 17 at 4-6
(P.T.A.B. July 29, 2013).
The consensus reading of § 315 fully accords with the statute’s purpose.
The House Committee Report explained that, while IPR “must be sought by a
party within 12 months of the date when the party is served with a complaint for
infringement,” § 315(c) grants the PTO authority to “allow other petitioners to join
an inter partes or post-grant review.” H.R. Rep. No. 112-98, pt. 1, at 76 (2011);
see also Nidec, 868 F.3d at 1020 (Dyk, J., joined by Wallach, J., concurring) (“the
legislative history for the joinder provision” supports this view).
More generally, allowing an otherwise time-barred party to join an instituted
IPR aligns with a key congressional goal: helping “protect the public’s ‘paramount
interest in seeing that patent monopolies … are kept within their legitimate
scope.’” Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2144 (2016). The
“basic purpose” of IPR is to give the PTO a “second look at an earlier
administrative grant of a patent.” Id. The consensus interpretation of § 315
advances that purpose by permitting the PTO—in its discretion—to add parties to
an ongoing proceeding to ensure a full and fair “second look” at the agency’s
original decision.
Even if the statutory text were not clear, any ambiguity would be resolved
through deference to the PTO’s reasonable interpretation. “[W]here a statute
- 50 -
leaves a gap or is ambiguous,” an agency with rulemaking authority has “leeway to
enact rules that are reasonable in light of the text, nature and purpose of the
statute.” Cuozzo, 136 S. Ct. at 2142 (alterations and internal quotation marks
omitted). Here, Congress has given the PTO authority “to issue rules ‘governing
inter partes review,’” and the joinder regulation “is a rule that governs inter partes
review.” Id. (quoting 35 U.S.C. § 316(a)(4)). 21 The PTO’s interpretation is clearly
reasonable; indeed, VirnetX does not seriously argue that the PTO’s regulation is
irrational, arbitrary and capricious, or otherwise not “a reasonable accommodation
of manifestly competing interests.” Chevron, U.S.A. Inc. v. NRDC, Inc., 467 U.S.
837, 865 (1984) (internal quotation marks omitted). 22
2. VirnetX has not established that § 315 unambiguously

supports its construction.
Having failed to develop any argument that the PTO’s construction is
unreasonable, VirnetX can only prevail by showing that the statute unambiguously
21
Contrary to VirnetX’s amici’s argument (BIO/PhRMA Br. 11-12), Congress
gave the PTO broad authority in § 316(a)(4) to “prescribe regulations …
establishing and governing inter partes review under this chapter.” Other
subsections of § 316(a) merely outline points that Congress wanted to make sure
were addressed through rulemaking. E.g., § 316(a)(10) (“providing either party
with the right to an oral hearing as part of the proceeding”); § (a)(13) (“providing
the petitioner with at least 1 opportunity to file written comments”). If the PTO’s
rulemaking authority were limited to those narrow issues, subsection (a)(4) would
be superfluous.
22
VirnetX cannot develop a “Chevron step two” argument in its reply; the
issue is waived on appeal. SmithKline, 439 F.3d at 1319.
- 51 -
forbids the Board from joining an otherwise time-barred party to an instituted IPR.
See Cuozzo, 136 S. Ct. at 2142. It has failed to do so.
VirnetX’s primary argument is that § 315(c)’s requirement that a party
seeking joinder “properly file a petition under section 311” means the party must
comply with § 315(b)’s time limit. Br. 50-51, 58. That strained reading makes
little sense. If Congress had intended for § 315(b)’s one-year bar to apply to
joinder, “it would have said so.” State Farm Fire & Cas. Co. v. United States ex
rel. Rigsby, 137 S. Ct. 436, 443 (2016). Congress could have expressly referenced
§ 315(b) or required that the petition be properly filed “under this chapter”—
language Congress used elsewhere. See, e.g., 35 U.S.C. § 315(e) (referencing IPR
“of a claim in a patent under this chapter”); § 316(a)(1) (“proceeding under this
chapter”); § 317(a) (“instituted under this chapter”); § 318(a) (“dismissed under
this chapter”). Instead, Congress required only a petition properly filed “under
section 311”—a provision that includes no one-year bar. See, e.g., Dell, IPR2013-
00385, Paper 17 at 5 (“Section 311 includes various requirements, … but does not
include the one-year bar, which is part of Section 315(b).”).
VirnetX argues that the words “properly filed” signal that the PTO can only
grant joinder requests accompanied by a petition filed within § 315(b)’s one-year
time limit. Br. 55-58. VirnetX tellingly provides no explanation for why Congress
would have imposed an important restriction in such a backhanded manner. See
- 52 -
Whitman v. American Trucking Ass’ns, Inc., 531 U.S. 457, 468 (2001) (Congress
“does not, one might say, hide elephants in mouseholes.”). VirnetX’s only direct
support for its assertion is a few sentences from Senator Kyl’s 2008 statement
originally made in reference to an earlier bill never enacted into law. Br. 56.
Senator Kyl’s statement did not mention § 315(b)’s time bar; he spoke only of
unspecified “time deadlines for filing petitions” (154 Cong. Rec. S9988), which
could refer equally to the “Filing Deadline” that eventually became § 311(c). See
S. 3600, 110th Cong., § 5(c) (2008). Even if Senator Kyl’s statement had clearly
referenced § 315(b)’s time bar, the equivocal words of a single member of
Congress on a different bill three years earlier cannot override the plain text of
§ 315(b) as enacted. State Farm, 137 S. Ct. at 444.23
VirnetX similarly contends that § 311 implicitly incorporates the one-year
time bar, because § 311(a) states that a “person who is not the owner of a patent
may file … a petition” so long as they do so “[s]ubject to the provisions of this
chapter.” Br. 58. But such a reading renders § 315(b)’s specific reference to § 311
superfluous. It also highlights the incongruity of VirnetX’s position, which
requires believing that Congress obscurely communicated an important restriction
23
VirnetX also cites Supreme Court decisions interpreting a very different
phrase: “a properly filed application for State post-conviction or other collateral
review.” Br. 55-56. Unlike that open-ended language, the provision here refers
narrowly to a party who “properly files a petition under 35 U.S.C. § 311.” See
supra p. 53.
- 53 -
using a cross-reference to another cross-reference, rather than simply saying so
clearly.
VirnetX’s reading has another significant problem—it violates the principle
that courts “must give effect to every word that Congress used in the statute.”
Lowe v. SEC, 472 U.S. 181, 207 n.53 (1985); see also Scalia & Garner, Reading
Law 176 (2012). By its terms, § 315(b)’s time bar only applies to “petitions”
requesting IPR; it does not apply to joinder requests. If VirnetX were correct that a
party may only seek joinder if it files a petition within the one-year time limit, then
§ 315(b)’s second sentence would be deprived of all meaning, because the first
sentence’s time bar effectively would “apply to a request for joinder under
subsection (c).”
VirnetX argues that its reading treats § 315(b)’s second sentence as a
clarification that a joinder request may be filed after the one-year time limit,
though the accompanying petition may not. Br. 52, 54-55. But that still treats
§ 315(b)’s second sentence as mere surplusage, because § 315(b)’s first sentence
nowhere places a time limit on joinder requests—Congress would not have sought
to “clarify” something that is clear to begin with. The only conceivable reason to
mention joinder in the second sentence is if Congress assumed that a joinder
request would be accompanied by an out-of-time petition that—absent an express
statutory carve-out—would run afoul of § 315(b)’s time bar. Notably, VirnetX’s
- 54 -
sole authority for reading a provision as redundant did so only because the
alternative would have been to “adopt a textually dubious construction that
threatens to render the entire provision a nullity.” United States v. Atlantic
Research Corp., 551 U.S. 128, 137 (2007). That is not the case here. See supra
pp. 48-51. 24 And while VirnetX relatedly argues (Br. 54) that § 315(c) only gives
the PTO discretion to permit joinder and not discretion to waive § 315(b)’s
mandatory time bar, the argument presupposes the correctness of VirnetX’s
reading of § 315(b)’s second sentence. See supra pp. 48-51.
VirnetX also invokes the meaning of “joinder” as used in district court
litigation. Br. 52-53. “The problem with [VirnetX’s] argument, however, is that
… inter partes review is less like a judicial proceeding and more like a specialized
agency proceeding.” Cuozzo, 136 S. Ct. at 2143. Many other district court rules
have no application in PTO proceedings—for example, “[p]arties that initiate the
proceeding … may lack constitutional standing” and “the Patent Office may
continue to conduct an inter partes review even after the adverse party has settled.”
Id. at 2143-2144. That is because IPR is intended to “‘protect[] the public’s
24
VirnetX’s amici argue that (1) even a timely-filed petition may not be
instituted until months after the one-year bar has expired, and thus (2) a joinder
request may not be filed within the time allotted under § 315(b). BIO/PhRMA Br.
11. This variation on VirnetX’s theme runs into the same problem as VirnetX’s
argument—§ 315(b)’s time-bar places no limit on the time in which to request
joinder. Indeed, as amici recognize (id.), Congress dealt with joinder timing in a
different subsection (§ 316(a)(12)).
- 55 -
paramount interest in seeing that patent monopolies are kept within their legitimate
scope.’” Oil States Energy Servs., LLC v. Greene’s Energy Group, LLC, 138 S.
Ct. 1365, 1374 (2018). VirnetX points to nothing in the statute indicating that
Congress intended § 315’s use of “joinder” to mirror its exact meaning in district
court litigation.
Finally, VirnetX asserts that the PTO’s interpretation of § 315 “opens the
floodgates” for the harassment of patent owners via repetitive IPR proceedings.
Br. 58-59; see also BIO/PhRMA Br. 18. But joinder does not create a new
proceeding; it only adds a party to an existing proceeding. Moreover, “patent
claims are granted subject to the qualification that the PTO has ‘the authority to
reexamine—and perhaps cancel—a patent claim.’” Oil States, 138 S. Ct. at 1374.
Congress addressed risks of agency overload and patentee harassment by giving
the PTO the discretion to decide, on a case-by-case basis, whether joinder is
appropriate. 35 U.S.C. § 315(c). So limited, the joinder provision advances
Congress’s goal of “providing quick and cost effective alternatives to litigation.”
VirnetX Br. 59 (internal quotation marks omitted). This case shows that the PTO’s
interpretation opens no “floodgates” at all; by joining Apple to Mangrove’s IPRs,
- 56 -
the Board ensured that VirnetX defended no more IPR proceedings than if
Mangrove had been the sole petitioner.25
3. VirnetX suffered no cognizable prejudice from Apple’s

joinder.
Even if the Board somehow exceeded its discretion in granting Apple’s
joinder request—though it did not—VirnetX has shown no cognizable prejudice.
Apple’s petitions involved the same patents, claims, prior art, expert declaration,
and arguments as Mangrove’s. Apple met its burden of proof, which included
establishing that Apple’s participation would have scant impact on the
proceedings. E.g., Appx1980-1982. Accordingly, any error in joining Apple was
harmless. See IPR Licensing, Inc. v. ZTE Corp., 685 F. App’x 933, 936 (Fed. Cir.
2017) (nonprecedential) (“[T]he party challenging an agency decision on appeal
[must] demonstrate the harmfulness of the asserted error[.]”).
VirnetX ventures two instances of purported prejudice, but neither
withstands scrutiny. First, it argues that Apple “assumed a leading role in,” and
brought “its considerable financial and legal resources” to, the proceedings. Br.
25
VirnetX’s amici assert “policy implications” and identify select cases that
they believe show “dubious joinder practices.” BIO/PhRMA Br. 5-9, 14-22. Even
were these concerns meritorious, they would be best addressed in those cases, or
by Congress. E.g., Microsoft Corp. v. AT&T Corp., 550 U.S. 437, 458-459 (2007)
(“If the patent law is to be adjusted …, the alteration should be made after focused
legislative consideration, and not by the Judiciary[.]”).
- 57 -
60. But the Board’s joinder order carefully protected VirnetX’s time and
resources. It provided that:
• Apple was bound by existing “discovery agreements, including
deposition arrangements.”
• Apple was not permitted to “seek any discovery beyond that
sought by” Mangrove.
• VirnetX could not “be required to provide any additional discovery
or deposition time.”
• Mangrove, not Apple, had the authority to “designate attorneys to
conduct the cross-examination” of VirnetX’s witnesses “and the
redirect examination of any other witnesses.”
• Neither Mangrove nor Apple would receive “any additional cross-
examination or redirect examination time.”
• Mangrove, not Apple, had the authority to “designate the attorneys
to be present at the oral hearing.”
Appx1983.
Second, VirnetX insists it had to “defend itself against new issues and
evidence introduced by Apple” (Br. 60), but it does not explain—or offer any
citation explaining—what those new issues were, nor did it do so before the Board.
E.g., Appx1981 (Board noting that VirnetX “does not provide details about any
- 58 -
specific ‘additional issue’ that is allegedly raised” by Apple’s petitions). As for
“new evidence,” VirnetX cites without analysis five new exhibits related to a prior-
art issue already implicated in the proceedings. Appx1881-1884; Appx3754-3759;
see also, e.g., Appx1982 (Board noting that VirnetX had already raised the prior-
art issue). As Apple explained, Mangrove could have submitted those exhibits—
even after Apple filed its petitions—pursuant to 37 C.F.R. § 42.123(a), which
permits a petitioner to file supplemental information one month after institution.
Appx1897. VirnetX had no response below, and has none now. Accordingly,
VirnetX has shown no cognizable prejudice from the joinder decision.
B. The Board’s Conclusion That Mangrove Partners Was Not A

Real-Party-In-Interest Should Not Be Disturbed.
VirnetX asserts that the Board applied a “legally erroneous” test for
identifying a real-party-in-interest. Br. 63. That is incorrect for at least four
reasons.
First, this Court lacks jurisdiction to review the Board’s real-party-in-
interest analysis, which is a threshold inquiry conducted at the institution stage. 35
U.S.C. § 312(a)(2) (“A petition … may be considered only if … the petition
identifies all real parties in interest.”). A ruling on a “minor statutory technicality
related to [the] preliminary decision to institute inter partes review” is
nonappealable. Cuozzo, 136 S. Ct. at 2140; see 35 U.S.C. § 314(d) (institution
decision is “final and nonappealable”).
- 59 -
This Court confirmed as much in Wi-Fi One, LLC v. Broadcom Corp., 878
F.3d 1364, 1374 (Fed. Cir. 2018) (en banc), by explaining that the reviewability of
§ 315(b) time-bar determinations does not extend to “preliminary procedural
requirements,” like whether a petition named all real-parties-in-interest. The
dissent agreed: “[N]o one disputes that [the Board’s] decision on real party in
interest is unreviewable” when the Board rejects the patent owner’s argument that
“an unidentified third-party, who has not been sued for infringement, is a real party
in interest to the petition.” Id. at 1381 (Hughes, J., dissenting). That scenario fits
this case like a glove. VirnetX does not allege that Mangrove Partners was time-
barred or that treating it as a real-party-in-interest would otherwise affect the
Board’s authority to decide the case. Rather, VirnetX merely contends that
Mangrove Partners should have been listed as an administrative matter, a point
regarding which no appellate jurisdiction lies.26
Second, the Board applied the proper legal standard. Whether an entity is a
real-party-in-interest “is a highly fact dependent question that takes into account
how courts generally have used the term[] to ‘describe relationships and
considerations sufficient to justify applying conventional principles of estoppel and
26
VirnetX has not briefed—and thus waived—any argument that RPX is a
real-party-in-interest. See, e.g., Appx44; see also SmithKline, 439 F.3d at 1319.
Its sole appellate argument regarding RPX has to do with the Board’s discretionary
discovery ruling. See infra pp. 64-67.
- 60 -
preclusion.’” Appx452 (quoting Office Practice Trial Guide, 77 Fed. Reg. 48,756,
48,759 (Aug. 14, 2012)). While a “‘common consideration is whether the non-
party exercised or could have exercised control over a party’s participation in a
proceeding,’” “‘rarely will one fact, standing alone, be determinative of the
inquiry.’” Id. (quoting 77 Fed. Reg. 48,759). Indeed, the Guide empowers the
Board to conduct the real-party-in-interest analysis “on a case-by-case basis,”
relying on the principle that “at a general level, the ‘real party-in-interest’ is the
party that desires review of the patent.” 77 Fed. Reg. 48,759; see Wi-Fi One, 887
F.3d at 1336 (quoting Guide approvingly and noting that real-party-in-interest test
boils down to whether “some party other than the petitioner is the ‘party or parties
on whose behest the petition has been filed’”).
VirnetX identifies no error in the Board’s application of the real-party-in-
interest standard. It concedes that the Guide governs the inquiry, but contends that
the Guide required the Board to consider whether Mangrove Partners “could have
exercised control” over Mangrove’s IPR filings. Br. 62-63. But the Guide
recognizes “no bright-line test” for determining the “necessary quantity or degree
of participation to qualify as a [real-party-in-interest] … based on the control
concept.” 77 Fed. Reg. 48,759. For that reason, “the rules do not enumerate
particular factors regarding a ‘control’ theory of ‘real-party-in-interest’ … under
- 61 -
the statute.” Id.; see also Wi-Fi One, 887 F.3d at 1338 (Board ruling employing
Guide’s real-party-in-interest test “did not apply a legally erroneous standard”).
Third, substantial evidence supports the finding that Mangrove Partners is
not a real-party-in-interest. See Appx41-43 (original denial); Appx3621-3626
(rehearing denial). VirnetX’s factual assertions leave out a crucial detail:
Mangrove Partners is Mangrove’s agent, not Mangrove’s boss. Appx7045-7055
(principal/agent agreement); Appx3497 (Mangrove’s attorney explaining this to
the Board). As this Court has explained, “an essential element of agency is the
principal’s right to control the agent’s actions.” PG&E v. United States, 838 F.3d
1341, 1359 (Fed. Cir. 2016) (internal quotation marks omitted). Viewed through
this lens, VirnetX’s accusation that Mangrove Partners (the agent) controlled or
even had the ability to control Mangrove (the principal) is not credible.
VirnetX seizes on Mangrove Partners’ role as investment manager for
Mangrove’s assets and authorization to handle legal filings on Mangrove’s behalf.
Br. 61. But those responsibilities spring from the principal-agent agreement, under
which Mangrove Partners is a fiduciary, and which Mangrove can terminate if
Mangrove Partners acts contrary to Mangrove’s interests. Appx7045; Appx7048.
Mangrove Partners wiring money to pay Mangrove’s filing fee (Br. 61-62)
likewise makes perfect sense: Mangrove Partners (the agent) carried out the
ministerial task of transferring Mangrove’s (the principal’s) money to Mangrove’s
- 62 -
attorneys. Neither point suggests that Mangrove Partners “desires review” of
VirnetX’s patents or controls Mangrove’s decisions in the IPR. See supra pp. 60-
61.
VirnetX also asserts that Mangrove Partners’ officers “commented
extensively” on Mangrove’s petitions. Br. 62. As the Board explained, VirnetX’s
strongly-worded accusations have little grounding in fact. Appx3623. The officers
merely offered a “few small nits” and raised a question over “the use of the term
see.” Id. (internal quotation marks omitted). Such “minor” suggestions do not
demonstrate control or even the ability to control the petition. Id. 27
Fourth, VirnetX again fails to show cognizable prejudice. IPR Licensing,
685 F. App’x at 936. Even if it had been necessary to add Mangrove Partners as a
real-party-in-interest, there was no reason why “any such modification [to the
petitions] would result in rendering this proceeding improper.” Appx405.
Mangrove offered to add Mangrove Partners as a real-party-in-interest to resolve
VirnetX’s lingering concerns (Appx3497), an offer that VirnetX rejected but
concedes would have been procedurally proper. See Br. 61 (“The Board may
27
Cross-referencing its statement of facts, VirnetX repeats its allegations that
Mangrove Partners modified an expert’s declaration after it was signed. Br. 62
(citing Br. 20-22). The Board addressed that accusation, which is of “insubstantial
importance” because the Board only relied on the declaration for information about
how a specific type of document was formatted—information “clear on simple
inspection of the … document itself.” Appx1769. VirnetX has not shown that the
Board’s decision on this point was unsupported by substantial evidence.
- 63 -
allow the petitioner to cure inadvertent non-compliance with th[e real-party-in-
interest] provision.”). VirnetX does not credibly try to justify its refusal to add
Mangrove Partners, nor does it explain what harm VirnetX could possibly have
suffered therefrom. 28
C. The Board Did Not Abuse Its Discretion By Denying VirnetX’s

Request For Additional Discovery Regarding RPX.
Congress granted the PTO authority to set the “standards and procedures for
discovery of relevant evidence” in IPRs. 35 U.S.C. § 316(a)(5). The PTO
exercised that power in 37 C.F.R. § 42.51, which allows a party to seek “additional
discovery”—beyond “mandatory initial disclosures” and “routine discovery”—if it
shows “that such additional discovery is in the interests of justice.” Five
considerations govern the “interests of justice” standard, including the movant’s
showing of “more than a possibility and mere allegation” of finding something
useful. Garmin Int’l, Inc. v. Cuozzo Speed Techs. LLC, IPR2012-00001, Paper 26
28
VirnetX notes that Mangrove’s offer was conditioned on VirnetX’s
agreement “not to challenge the proceedings’ compliance with the statutory
requirements.” Br. 18. But there was nothing to challenge, because it was
procedurally appropriate to add Mangrove Partners as a real-party-in-interest.
Appx3492 (VirnetX’s attorney agreeing with Board that “there is no 315(b) issue
… at this point” in adding Mangrove Partners as a real-party-in-interest);
Appx3493 (VirnetX’s attorney agreeing that the one-year bar issue only affects
RPX and Apple). Tellingly, VirnetX’s only citation to explain its refusal of
Mangrove’s offer indicates that VirnetX wanted to raise a “315(b) issue relating to
RPX.” Appx3502-3503.
- 64 -
at 6 (P.T.A.B. Mar. 5, 2013) (precedential); see also Wi-Fi One, 887 F.3d at 1339
(discussing the “interests of justice” standard approvingly).
VirnetX does not challenge this discovery standard, only the Board’s finding
that VirnetX failed to satisfy it. But the Board was amply justified in finding that
VirnetX’s assertions regarding RPX amount to “speculation.” Appx448;
Appx2243. As the Board explained, VirnetX’s supposed evidence that RPX is a
real-party-in-interest consists of claims that (1) Mangrove has an equity stake in
RPX, (2) a Mangrove attorney “allegedly represents RPX,” and (3) “publicly
available documents supposedly imply a connection between [Mangrove] and
RPX.” Appx448; Appx2243. The Board found these statements reflect a “mere
allegation of some kind of general association between” Mangrove and RPX—they
certainly do not show anything beyond a “mere possibility” that additional
discovery might yield something useful. Appx448; Appx2243. 29
VirnetX makes no attempt to show that the Board “made a clear error of
judgment in weighing relevant factors or in basing its decision on an error of law
or on clearly erroneous factual findings.” Bayer CropScience AG v. Dow Agro
Sciences LLC, 851 F.3d 1302, 1306 (Fed. Cir. 2017) (internal quotation marks
29
On appeal, VirnetX suggests it sought to determine whether RPX was a real-
party-in-interest or a privy (Br. 65), but VirnetX made no privy argument below
and thus waived it. E.g., Appx448 (VirnetX only requested discovery regarding
real-party-in-interest). VirnetX’s brief elsewhere recognizes that the only
discovery issue presented involves a “real party-in-interest relationship.” Br. 3.
- 65 -
omitted). VirnetX does not suggest that the Board overlooked or misunderstood
any evidence. (One bizarre exception concerns an interaction between RPX and
Mangrove that occurred in March 2016—months after the Board issued its
discovery ruling and almost a year after Mangrove filed its petition. Compare Br.
63-64, with Appx447, Appx1386, and Appx2242. The Board cannot have abused
its discretion by failing to grant discovery based on events that had not yet
happened.) Indeed, VirnetX concedes that it showed a mere “possible connection”
between RPX and Mangrove. Br. 64. “Given that the Board explored the
discovery issue in detail and applied the proper legal test for finding … [real-party-
in-interest] status under section 315(b),” it did not abuse its discretion “when it
concluded that additional discovery was not warranted.” Wi-Fi One, 887 F.3d at
1340.
Moreover, VirnetX has again not shown prejudice. VirnetX could have
received the information it sought just by asking; Mangrove told VirnetX it was
willing to submit a declaration stating that (1) RPX is not—and has never been—
an investor in Mangrove, (2) to the best of Mangrove’s knowledge, no one
affiliated with RPX is now or was ever an investor in Mangrove, (3) none of
Mangrove’s investors was aware of these proceedings before the petition was filed,
and (4) Mangrove alone bore Mangrove’s costs. Appx2286-2287. VirnetX
declined this offer. The logical conclusion is that—as with the real-party-in-
- 66 -
interest issue—VirnetX was more interested in raising meaningless procedural
challenges than in defending its patent claims on the merits.
D. Even if Credited, VirnetX’s Procedural Objections Do Not

Require Remand.
While VirnetX raises (flawed) procedural challenges regarding Apple’s and
Mangrove’s petitions, VirnetX does not assert any such issues with Black
Swamp’s petition regarding the ’151 patent, further diminishing any harm from
VirnetX’s alleged procedural errors. Cf. Knowles Elecs. LLC v. Cirrus Logic, Inc.,
883 F.3d 1358, 1368 (Fed. Cir. 2018) (new entities that joined inter partes
reexamination permitted to press appeal despite withdrawal of original petitioners).
In a footnote, VirnetX asserts without elaboration that, by seeking joinder to
the Mangrove proceeding, Black Swamp somehow took on any procedural
infirmity in the Mangrove proceeding. Br. 63 n.15; see also Appx3901-3902.
VirnetX cites no authority for that assertion, which would discourage parties from
seeking to reduce litigation burden, contrary to the statute’s purpose. See
Microsoft, IPR2013-00109, Paper 15 at 4 (invoking joinder to ensure “just, speedy,
and inexpensive resolution of [the] proceeding”).
E. VirnetX’s Constitutional Argument Has Been Rejected By The

Supreme Court And, In Any Event, Is Waived.
VirnetX’s undeveloped constitutional challenge (Br. 65) was rejected in Oil
States, 138 S. Ct. at 1379. And VirnetX’s argument—raised in a Rule 28(j) letter
- 67 -
filed over two weeks later—that Oil States did not address the specific facts of this
case is beside the point, because VirnetX neither raised any constitutional
challenge before the PTO nor developed one in its opening brief or Rule 28(j)
letter. Whatever “constitutional concerns” VirnetX harbors are forfeited.
CONCLUSION
The Board’s final written decisions should be affirmed.
- 68 -
Respectfully submitted,
/s/ Wesley C. Meinerding /s/ William F. Lee

WESLEY C. MEINERDING WILLIAM F. LEE
MARTIN & FERRARO, LLP MARK C. FLEMING
1557 Lake O'Pines Street, NE LAUREN B. FLETCHER
Hartville, OH 44632 WILMER CUTLER PICKERING
(330) 877-0700 HALE AND DORR LLP
60 State Street
AMEDEO F. FERRARO Boston, MA 02109
MARTIN & FERRARO, LLP (617) 526-6000
17383 Sunset Boulevard, Suite 380
Los Angeles, CA 90272 BRITTANY BLUEITT AMADI
(310) 286-9800 WILMER CUTLER PICKERING
HALE AND DORR LLP
Attorneys for Appellee Black 1875 Pennsylvania Avenue, NW
Swamp IP, LLC Washington, DC 20006
(202) 663-6000
/s/ James T. Bailey THOMAS G. SPRANKLING

JAMES T. BAILEY WILMER CUTLER PICKERING
LAW OFFICE OF JAMES T. BAILEY HALE AND DORR LLP
504 W 136th Street, Suite 1B 950 Page Mill Road
New York, NY 10031 Palo Alto, CA 94304
(917) 626-1356 (650) 858-6000
Attorney for The Mangrove Attorneys for Appellee Apple Inc.

Partners Master Fund, Ltd.
May 14, 2018
- 69 -
ECF-3(B)(2) REPRESENTATION
Pursuant to this Court’s Administrative Order Regarding Electronic Case
Filing, the undersigned represents under ECF-3(b)(2) that counsel for Appellee
Black Swamp IP, LLC and Appellee The Mangrove Partners Master Fund, Ltd.
have consented to their signatures on this Brief and their respective Certificates of
Interest.
Dated: May 14, 2018 /s/ William F. Lee

WILLIAM F. LEE
HALE AND DORR LLP
60 State Street
Boston, MA 02109
(617) 526-6000
CERTIFICATE OF SERVICE
I hereby certify that, on this 14th day of May 2018, I filed the foregoing
Brief for Appellees with the Clerk of the United States Court of Appeals for the
Federal Circuit via the CM/ECF system, which will send notice of such filing to all
registered CM/ECF users.
/s/ William F. Lee

WILLIAM F. LEE
HALE AND DORR LLP
60 State Street
Boston, MA 02109
(617) 526-6000
CERTIFICATE OF COMPLIANCE
Pursuant to Fed. R. App. P. 32(g), the undersigned hereby certifies that this
brief complies with the type-volume limitation of Circuit Rule 32(a).
1. Exclusive of the exempted portions of the brief, as provided in Fed. R.
App. P. 32(f), the brief contains 13,996 words.
2. The brief has been prepared in proportionally spaced typeface using
Microsoft Word 2010 in 14 point Times New Roman font. As permitted by Fed.
R. App. P. 32(g, the undersigned has relied upon the word count feature of this
word processing system in preparing this certificate.
/s/ William F. Lee

WILLIAM F. LEE
HALE AND DORR LLP
60 State Street
Boston, MA 02109
(617) 526-6000
May 14, 2018

Apples Reply 05142018 Apple PTAB Challenge of VirnetX Patents

Enviado por

Dados do documento

Título original

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

Apples Reply 05142018 Apple PTAB Challenge of VirnetX Patents

Enviado por

Direitos autorais:

Formatos disponíveis

Case: 17-1368 Document: 58 Page: 1 Filed: 05/14/2018

BRIEF FOR APPELLEES

May 14, 2018 Counsel listed on inside cover.

WESLEY C. MEINERDING WILLIAM F. LEE

Counsel for Appellee Apple Inc. certifies the following:

1. The full name of every party or amicus represented by us is:

2. The names of the real party in interest represented by us is:

SIDLEY AUSTIN: Jeffrey P. Kushan, Scott Border, Thomas A. Broughan III

5. The title and number of any case known to counsel to be pending in

VirnetX Inc. v. Iancu, Nos. 17-2593, -2594 (Fed. Cir.)

VirnetX Inc. v. Cisco Systems, Inc., No. 18-1197 (Fed. Cir.)

VirnetX Inc. v. Iancu, No. 18-1751 (Fed. Cir.)

VirnetX Inc. v. Apple Inc., No. 6:10-cv-00417-RWS (E.D. Tex.)

VirnetX Inc. v. Apple Inc., No. 6:12-cv-00855-RWS (E.D. Tex.)

Inter Partes Reexamination No. 95/001,679 (PTO)

Inter Partes Reexamination No. 95/001,682 (PTO)

Inter Partes Reexamination No. 95/001,697 (PTO)

Inter Partes Reexamination No. 95/001,714 (PTO)

Dated: May 14, 2018 /s/ William F. Lee

1. The full name of every party or amicus represented by us is:

Black Swamp IP, LLC

2. The names of the real party in interest represented by us is:

MARTIN & FERRARO, LLP: Thomas H. Martin

5. The title and number of any case known to counsel to be pending in

VirnetX Inc. v. Iancu, Nos. 17-2593, -2594 (Fed. Cir.)

VirnetX Inc. v. Cisco Systems, Inc., No. 18-1197 (Fed. Cir.)

VirnetX Inc. v. Iancu, No. 18-1751 (Fed. Cir.)

VirnetX Inc. v. Apple Inc., No. 6:10-cv-00417-RWS (E.D. Tex.)

VirnetX Inc. v. Apple Inc., No. 6:12-cv-00855-RWS (E.D. Tex.)

Inter Partes Reexamination No. 95/001,679 (PTO)

Inter Partes Reexamination No. 95/001,682 (PTO)

Inter Partes Reexamination No. 95/001,697 (PTO)

Inter Partes Reexamination No. 95/001,714 (PTO)

Dated: May 14, 2018 /s/ Wesley C. Meinerding

1. The full name of every party or amicus represented by us is:

The Mangrove Partners Master Fund, Ltd.

2. The names of the real party in interest represented by us is:

WIGGIN AND DANA LLP: Abraham Kasdan; Michael J. Kasdan

LAW OFFICE OF JAMES T. BAILEY: James T. Bailey

5. The title and number of any case known to counsel to be pending in

VirnetX Inc. v. Iancu, Nos. 17-2593, -2594 (Fed. Cir.)

VirnetX Inc. v. Cisco Systems, Inc., No. 18-1197 (Fed. Cir.)

VirnetX Inc. v. Iancu, No. 18-1751 (Fed. Cir.)

VirnetX Inc. v. Apple Inc., No. 6:10-cv-00417-RWS (E.D. Tex.)

VirnetX Inc. v. Apple Inc., No. 6:12-cv-00855-RWS (E.D. Tex.)

Inter Partes Reexamination No. 95/001,679 (PTO)

Inter Partes Reexamination No. 95/001,682 (PTO)

Inter Partes Reexamination No. 95/001,697 (PTO)

Inter Partes Reexamination No. 95/001,714 (PTO)

Dated: May 14, 2018 /s/ James T. Bailey

TABLE OF AUTHORITIES .....................................................................................x

STATEMENT OF RELATED CASES ..................................................................... 1

JURISDICTIONAL STATEMENT .......................................................................... 5

STATEMENT OF ISSUES .......................................................................................6

STATEMENT OF FACTS ........................................................................................7

A. Apple’s Initial Reexamination Requests And IPR

B. The Board’s Institution And Joinder Decisions .................................... 8

C. The Board’s Unpatentability Determinations .....................................12

1. The Kiuchi prior art...................................................................12

2. VirnetX’s ’151 and ’135 patents ...............................................15

3. The Board’s findings.................................................................15

SUMMARY OF ARGUMENT ...............................................................................19

STANDARD OF REVIEW .....................................................................................20