Trials@uspto.gov
`571-272-7822
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`UNITED STATES PATENT AND TRADEMARK OFFICE
`_____________
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`____________
`
`BLACK SWAMP IP, LLC,
`Petitioner,
`
`v.
`
`VIRNETX INC.,
`Patent Owner.
`____________
`
`Case IPR2016-00693
`Patent 7,418,504 B2
`____________
`Case IPR2016-009571
`Patent 7,921,211 B2
`
`Before MICHAEL P. TIERNEY, Vice Chief Administrative Patent Judge, and
`KARL D. EASTHOM, and STEPHEN C. SIU, Administrative Patent Judges.
`
`SIU, Administrative Patent Judge.
`
`
`
`Paper 16
`Date: July 24, 2017
`
`DECISION
`Request for Rehearing
`37 C.F.R. § 42.71(d)
`
`1 This decision addresses an issue that is identical in each case. We, therefore,
`exercise our discretion to issue one Decision to be filed in each case. Unless
`otherwise authorized, the parties, however, are not authorized to use this style
`heading for any subsequent papers. Citations and page references in the Decision
`correspond to IPR2016-00693, unless otherwise indicated.
`
`

`

`
`
`IPR2016-00693, IPR2016-00957
`Patent 7,418,504 B2, Patent 7,921,211 B2
`
`
`
`
`
`VirnetX (“Patent Owner”), in its Request for Rehearing (“Req.” or
`“Request”), requests rehearing of the Board’s final determination (“Decision”) that
`Petitioner met its burden of showing by a preponderance of the evidence that
`claims 27 and 51 are anticipated by Takahiro Kiuchi and Shigekoto Kaihara, C-
`HTTP – The Development of a Secure, Closed HTTP-Based Network on the
`Internet, PROCEEDINGS OF THE SYMPOSIUM ON NETWORK AND DISTRIBUTED
`SYSTEM SECURITY, IEEE 64-75 (1996) (Ex. 1005, “Kiuchi”). See Req. Reh’g. 1.
`Claim 27 recites a secure communication link between a first location and a
`second location transparently to a user at the first location. Claim 51 recites a
`similar feature. Petitioner initially argued that Kiuchi discloses this feature. In
`particular, Petitioner initially argued in the Petition that “[t]he client-side proxy or
`the user agent associated with the client-side proxy can be considered a first
`location” and that “the end users at the user agents ‘do not even have to be
`conscious of using C-HTTP based communications.’” Pet. 32 (citing Ex. 1005
`68).
`
`In response, Patent Owner argued that “the client-side proxy . . . is a first
`location . . . [and a] user at a ‘user agent,’ not at the proxies themselves, sends a
`request.” Prelim. Resp. 40, see also PO Resp. 41. In response to Patent Owner’s
`contention that that the “user [is] at a ‘user agent,’ not at the [client-side proxy],”
`Petitioner reiterated that “[t]he client-side proxy or the user agent associated with
`the client-side proxy can be considered a first location.” Pet. Reply 26.
`Hence, Petitioner argued that the “user agent associated with the client-side
`proxy” is located at a first location, as recited in claim 27. Patent Owner refuted
`Petitioner’s claim mapping by asserting that a user is located at a “user agent” but
`
`2
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`

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`IPR2016-00693, IPR2016-00957
`Patent 7,418,504 B2, Patent 7,921,211 B2
`
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`is not located at a “client-side proxy” (i.e., that the “client-side proxy” cannot
`constitute a “first location,” as recited in claim 27). Notably, Patent Owner did
`not provide arguments regarding how the location of the user agent and the
`associated client-side proxy also differed from the claimed “first location.” We
`agreed with the Petitioner that the “user agent” and the “associated client-side
`proxy” are located at a “first location” (i.e., both located at an “institution,” as
`disclosed by Kiuchi) and, in response to Patent Owner’s subsequent arguments that
`the “client-side proxy” supposedly cannot be considered to be the “first location,”
`as recited in claim 27, for example, we further determined that, as Petitioner
`previously explained, the “user agent” and the associated “client-side proxy” are
`located at a “first location,” as recited in claim 27 (e.g., co-located at an
`“institution,” as disclosed by Kiuchi). See Decision 13.
`Patent Owner now argues that “[t]he Final Decision took an entirely new
`path to address the claimed ‘first location’” and relies on In re Magnum Oil Tools
`Int’l., Ltd., 829 F.3d 1364 (Fed. Cir. 2016) to support Patent Owner’s implied
`contention that the Final Decision may not address new arguments raised by Patent
`Owner in Patent Owner’s Preliminary Response and/or Patent Owner’s Response.
`Req. Reh’g. 6. We disagree. In the present matter and in accordance with
`Magnum Oil, the ultimate burden of proof remained with Petitioner and was never
`shifted to Patent Owner at any time during the proceedings and, as discussed
`above, at no time was an “entirely new path to address the claimed ‘first location’”
`introduced in the Decision.
`Patent Owner presented arguments supporting Patent Owner’s contention
`that Kiuchi’s “client-side proxy” is located at a location that differs from the
`claimed “first location” but failed to indicate in a meaningful way how the location
`at which Kiuchi’s “user agent” and associated “client-side proxy” (co-located at
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`3
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`

`
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`IPR2016-00693, IPR2016-00957
`Patent 7,418,504 B2, Patent 7,921,211 B2
`
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`the “institution,” according to Kiuchi) are located differs from the claimed “first
`location” (i.e., Petitioner’s original mapping of Kiuchi to the claimed “first
`location”). Hence, Patent Owner failed to demonstrate specific flaws in
`Petitioner’s mapping that would indicate Petitioner failed to meet its burden of
`proof. In view of the fact that Petitioner met its burden of proof of demonstrating
`by a preponderance of the evidence the unpatentability of claim 27 (and claim 51)
`and Patent Owner’s failure to demonstrate persuasively any specific flaws in
`Petitioner’s showing, we determined that Petitioner met its burden of proof. Patent
`Owner’s failure to demonstrate sufficiently that Petitioner failed to meet its burden
`of proof is not the same as shifting the burden of proof to Patent Owner.
`Patent Owner “suggests that an expanded panel that includes the Chief Judge
`consider this request for rehearing.” Req. Reh’g 9. A panel does not have
`authority to expand a panel; only the Chief Judge, acting on behalf of the Director,
`may act to expand a panel. See Standard Operating Procedure 1, rev. 14 § III
`(PTAB May 8, 2015). In this case, the suggestion to expand the panel was referred
`to the Chief Judge and considered, but was not adopted.
`Based on the foregoing discussion, Patent Owner’s Request is granted to the
`extent that the Board has reconsidered it Decision, but Patent Owner’s requested
`relief for a reversal of the Decision is denied because Patent Owner has not shown
`that the Decision overlooks or misapprehends a material point.
`
`
`ORDER
`
`
`
`For the reasons given, it is
`ORDERED that the Request for Rehearing is denied; and
`FURTHER ORDERED that a copy of this Decision be entered into the file
`of each of Case IPR02016-00693 and Case IPR2016-00957.
`
`4
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`

`
`
`IPR2016-00693, IPR2016-00957
`Patent 7,418,504 B2, Patent 7,921,211 B2
`
`
`
`
`
`
`PETITIONER:
`Thomas H. Martin
`Wesley C. Meinerding
`MARTIN & FERRARO
`tmartin@martinferraro.com
`docketing@martinferraro.com
`
`
`PATENT OWNER:
`
`Joseph E. Palys
`Naveen Modi
`PAUL HASTINGS LLP
`PH-VirnetX-IPR@paulhastings.com
`
`
`
`
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`5
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