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Paper No. 8
Entered: Sept. 9, 2016

UNITED STATES PATENT AND TRADEMARK OFFICE

____________
BEFORE THE PATENT TRIAL AND APPEAL BOARD
____________
BLACK SWAMP IP, LLC,
Petitioner,
v.
VIRNETX INC.,
Patent Owner.
____________
Case IPR2016-00693
Patent 7,418,504 B2
____________

Before MICHAEL P. TIERNEY, KARL D. EASTHOM, and STEPHEN C.

SIU, Administrative Patent Judges.
SIU, Administrative Patent Judge.

DECISION
Institution of Inter Partes Review
37 C.F.R. 42.108

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Patent 7,418,504 B2
I.

INTRODUCTION
A.

Background

Petitioner, Black Swamp IP, LLC, filed a Petition (Paper 1, Pet.)

requesting an inter partes review of claims 1, 2, 5, 6, 15, 16, 27, 33, 36, 37,
39, 40, 51, 57, and 60 (the challenged claims) of U.S. Patent No.
7,418,504 B2 (Ex. 1001, the 504 patent). See Pet. 5. Patent Owner,
VirnetX Inc., filed a Preliminary Response. Paper 6 (Prelim. Resp.).
We have authority to determine whether to institute an inter partes
review. 35 U.S.C. 314(b); 37 C.F.R. 42.4(a). The standard for
instituting an inter partes review is set forth in 35 U.S.C. 314(a), which
provides that an inter partes review may not be instituted unless the
Director determines . . . there is a reasonable likelihood that the petitioner
would prevail with respect to at least 1 of the claims challenged in the
petition.
After considering the Petition and Preliminary Response, we
determine that Petitioner has established a reasonable likelihood of
prevailing in showing the unpatentability of at least one of the challenged
claims. Accordingly, we institute inter partes review.

B.

Related Matters

According to Petitioner, the 504 patent is the subject of the following

civil actions: Civ. Act. No. 6:13-cv-00211 (E.D. Tex.); Civ. Act. No. 6:12cv-00855 (E.D. Tex.); Civ. Act. No. 6:10-cv-00417 (E.D. Tex.); Civ. Act.
No. 6:11-cv-00018 (E.D. Tex.); Civ. Act. No 6:13-cv-00351 (E.D. Tex.);
Civ. Act. No. 6:13-mc-00037 (E.D. Tex.); and Civ. Act. No. 9:13-mc-80769
(E.D. Fla.). Petitioner also indicates that the 504 patent is the subject of
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Patent 7,418,504 B2
inter partes in reexamination 95/001,788 and 95/001,851 and inter partes
review IPR2013-00377, IPR2013-00393, IPR2013-00394, IPR2014-00176,
IPR2014-00177, IPR2014-00612, IPR2014-00613, IPR2014-00614,
IPR2015-00188, and IPR2015-00189. Pet. 23.

C.

Asserted Ground of Unpatentability

Petitioner challenges claims 1, 2, 5, 6, 15, 16, 27, 33, 36, 37, 39, 40,
51, 57, and 60 of the 504 patent under 35 U.S.C. 102 as anticipated by
Takahiro Kiuchi & Shigekoto Kaihara, C-HTTPThe Development of a
Secure, Closed HTTP-Based Network on the Internet, PROC. SYMP. ON
NETWORK & DISTRIBUTED SYS. SECURITY, Feb. 2223, 1996, at 64 (Ex.
1005, Kiuchi). Pet. 5.

D.

The 504 Patent

The 504 patent describes a secure mechanism for communicating

over the internet. Ex. 1001, 3:1415.

E.

Illustrative Challenged Claim 1

Claim 1 reads as follows:

1.
A system for providing a domain name service for
establishing a secure communication link, the system comprising:
a domain name service system configured to be connected to a
communication network, to store a plurality of domain names and
corresponding network addresses, to receive a query for a network
address, and to comprise an indication that the domain name service
system supports establishing a secure communication link.

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Patent 7,418,504 B2
F.

35 U.S.C. 315(d) and 325(d) The Thirteenth Challenge

Patent Owner argues that the present case should not be instituted
under 35 U.S.C. 315(d) and 325(d) because the present challenge is the
thirteenth challenge. Prelim. Resp. 39.
Under the specific circumstances involved at this juncture, the Kiuchibased ground would not place a significant burden on the parties or the
Board. Accordingly, Patent Owner has not shown a sufficient reason to
deny this Petition, and we decline to exercise our discretion to deny
institution of the present proceedings based on this ground. See 37 C.F.R.
42.108(a) (stating that the Board has discretion to proceed . . . on all or
some of the grounds of unpatentability asserted).

G.

Non-reliance on Expert Testimony

Patent Owner argues that Petitioners proposed ground of

unpatentability is wholly unsupported by expert testimony and that expert
testimony is required. Prelim. Resp. 9, 1316. Even assuming Petitioner
does not rely upon expert testimony, Patent Owner does not demonstrate
sufficiently that reliance on expert testimony is required or that the absence
of expert testimony alone in this matter indicates the failure to demonstrate a
reasonable likelihood of prevailing in proving unpatentability of a
challenged claim. We are not persuaded by Patent Owners argument.

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II.
A.

ANALYSIS

Claim Construction

In an inter partes review, the Board construes claims by applying the

broadest reasonable interpretation in light of the specification. 37 C.F.R.
42.100(b). Under this standard, absent any special definitions, claim terms
or phrases are given their ordinary and customary meaning, as would be
understood by one of ordinary skill in the art, in the context of the entire
disclosure. In re Translogic Tech., Inc., 504 F.3d 1249, 1257 (Fed. Cir.
2007).
Petitioner and Patent Owner each proffer proposed constructions of
several claim terms. At this stage of the proceeding, and on this record, we
determine that no claim term needs express construction at this time. See
Vivid Techs., Inc. v. Am. Sci. & Engg, Inc., 200 F.3d 795, 803 (Fed. Cir.
1999) (only those terms that are in controversy need to be construed and
only to the extent necessary to resolve the controversy).

B.

Overview of Prior Art Kiuchi (Exhibit 1005)

Kiuchi discloses closed networks (HTTP (Hypertext Transfer

Protocol)-based network (C-HTTP)) of related institutions on the Internet.
Ex. 1005, 64. A client and client-side-proxy asks the C-HTTP name server
whether it can communicate with the [specified] host and, if the query is
legitimate and if the requested server-side proxy is registered in the closed
network and is permitted to accept the connection, the C-HTTP name
server sends the [requested] IP address. Id. at 65. After confirmation by
the C-HTTP name server that the specified server-side proxy is an

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Patent 7,418,504 B2
appropriate closed network member, a client-side proxy sends a request for
connection to the server-side proxy, which is encrypted. Id.
The server-side proxy accepts [the] request for connection from [the]
client-side proxy (Ex. 1005, 65) and, after the C-HTTP name server
determines that the client-side proxy is an appropriate member of the closed
network, that the query is legitimate, and that the client-side proxy is
permitted to access . . . the server-side proxy, the C-HTTP name server
sends the IP address [of the client-side proxy] (id. at 66). Upon receipt of
the IP address, the server-side proxy authenticates the client-side proxy
and sends a connection ID to the client-side proxy. After the client-side
proxy accepts and checks the connection ID, the connection is
established after which time, the client-side proxy forwards requests from
the user agent in encrypted form using C-HTTP format. Id.

C. Analysis of Anticipation Grounds Based on Kiuchi

Claim 1, for example, recites a domain name service system
configured to comprise an indication that the domain name service system
supports establishing a secure communication link. Petitioner contends that
Kiuchi discloses all material limitations of the challenged claims and states
that Kiuchi discloses that [i]f the C-HTTP name server determines that the
query is legitimate . . . the C-HTTP name server facilitates the establishment
and operation of a secure communication link and that [t]he establishment
and operation of a secure communication link in Kiuchi between the clientside proxy and the server-side proxy is in and of itself an indication that the
domain name service system supports establishing a secure communication
link. Pet. 2223.

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Patent 7,418,504 B2
Patent Owner argues that Petitioner provides no . . . basis for
addressing the indication limitation [so] Kiuchi cannot anticipate claim 1.
Prelim. Resp. 35. However, as discussed above, Petitioner argues that [t]he
establishment and operation of a secure communication link in Kiuchi
between the client-side proxy and the server-side proxy is in and of itself an
indication . . . . Pet. 23. We disagree with Patent Owners contention that
Petitioner provides no basis for addressing the indication limitation in
view of this explicit claim mapping of this claim feature, for example.
Claim 1 recites a domain name service system configured to store a
plurality of domain names and corresponding network addresses. Petitioner
states that Kiuchi discloses this feature. Pet. 2021. Patent Owner argues
that Kiuchi fails to disclose this claim feature because Kiuchis URL (the
alleged domain name) does not correspond to the server-side proxy.
Prelim. Resp. 36 (emphasis omitted). Claim 1 recites a system configured to
store a domain name. Patent Owner does not assert or demonstrate
persuasively that claim 1 also recites that the domain name must correspond
to any specific component, much less that the domain name must correspond
to a server-side proxy.
Claim 1 recites a system for establishing a secure communication link,
the system comprising a domain name service system configured to
comprise an indication that the domain name service system supports
establishing a secure communication link. Petitioner argues that Kiuchi
discloses this feature. See, e.g., Pet. 2224. Patent Owner argues that
Kiuchi fails to disclose this claim feature because the Federal Circuit held
that a secure communication link requires a direct communication link
and Kiuchis connection is not direct. Prelim. Resp. 37 (emphasis
omitted). However, a trial is needed in order to ascertain the precise nature
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Patent 7,418,504 B2
of the holding by the Federal Circuit on this issue, the nature of the
applicability or relevance of a specific holding or conclusion drawn by the
Federal Circuit on this proceeding, and the precise nature of Kiuchis
disclosed connection. Therefore, Petitioner has met its burden of
demonstrating by a preponderance of the evidence a reasonable likelihood of
prevailing in proving unpatentability of the challenged claim.
Petitioner argues that Kiuchi discloses the features recited in claim 27.
See, e.g., Pet. 31. Patent Owner argues that Kiuchi fails to disclose that the
domain name service system is configured to enable establishment of a
secure communication link between a first location and a second location,
as recited in claim 27, because [a] user at a user agent, not at the proxies
themselves, sends a request that the client-side proxy processes and that
Petitioner fails to demonstrate, or even allege, that there is a user at the
client-side proxy. Prelim. Resp. 40. Claim 27 recites that the domain name
service system is configured to enable establishment of a secure
communication link between a first location and a second location. Patent
Owner does not demonstrate persuasively that claim 27 also recites that a
user must be located at any specific location, much less located at the
client-side proxy.
Petitioner persuasively maps the remaining claim elements and claims
to Kiuchis disclosure. See Pet. 19-32. Based on the foregoing discussion
and preliminary record, Petitioner establishes a reasonable likelihood of
prevailing in showing that Kiuchi anticipates claims 1, 2, 5, 6, 15, 16, 27, 33,
36, 37, 39, 40, 51, 57, and 60.

III. CONCLUSION

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Patent 7,418,504 B2
For the foregoing reasons, we determine that the information
presented in the Petition establishes that there is a reasonable likelihood that
Petitioner would prevail with respect to the challenged claims of the 504
patent. The Board has not made a final determination on the patentability of
any challenged claims. The Boards final determination will be based on the
record as fully developed during trial.

IV. ORDER
In consideration of the foregoing, it is hereby ORDERED that an inter
partes review is instituted with respect to unpatentability of claims 1, 2, 5, 6,
15, 16, 27, 33, 36, 37, 39, 40, 51, 57, and 60 as anticipated by Kiuchi; and
FURTHER ORDERED that pursuant to 35 U.S.C. 314(c) and
37 C.F.R. 42.4, notice is hereby given of the institution of a trial.
PETITIONER:
Thomas H. Martin
Wesley C. Meinerding
MARTIN & FERRARO, LLP
tmartin@martinferraro.com
wmeinerding@martinferraro.com
PATENT OWNER:
Joseph E. Palys
Naveen Modi
PAUL HASTINGS LLP
PH-VirnetX-IPR@paulhastings.com