Takeaway: Where a party does not sufficiently demonstrate that a proposed construction will bear on the outcome of the issues in the inter partes review, the Board may decline to adopt such a construction.

In its Final Written Decision, the Board determined that Petitioner had shown by a preponderance of the evidence that claims 1-5, 7, 8, 10, 12, 15, and 17 of the ’274 patent are unpatentable. The ’274 patent describes method for communicating over the Internet. Trial had been instituted on both §§ 102 and 103 grounds.

The Board first addressed its prior claim constructions under a broadest reasonable construction. The Board did not modify its previous constructions, and declined to adopt certain constructions where Patent Owner did not “demonstrate sufficiently” that the proposed construction “will bear on the outcome of the issues in this inter partes review.”

The Board then briefly addressed Patent Owner’s argument that the proceeding should be terminated because “the Board relies on the host server’s IP address and not the host server, meaning Kiuchi’s origin server, respectively.” However, under 35 U.S.C. § 314(d), “the determination . . . whether to institute an inter partes review . . . shall be final and nonappealable.” See also In re Cuozzo Speed Techs., 778 F.3d 1271, 1277 (Fed. Cir. 2015). Therefore, the Board found that “even if we relied on ‘Kiuchi’s origin server,’ we disagree with Patent Owner that such an alleged reliance would indicate that ‘the proceeding should be terminated.’”

The Board then turned to asserted grounds of unpatentability. The Board found that claims of the internet security patent were anticipated, stating:

[A]ssuming one of ordinary skill in the art would have understood that a ‘client computer’ must include specific reference to a ‘user,’ as Patent Owner appears to contend, [a paper from the 1996 proceedings of SNDSS] discloses this feature. [The paper] discloses, for example, a ‘user agent’ and ‘communication between a client-side proxy and user agent.’ . . . Patent Owner does not demonstrate persuasively a difference between the ‘user agent’ of [the paper] and the ‘client computer’ that is also ‘connected to a communication network,’ as recited in claim 15.

In sum, the Board found claims 1-4, 7, 8, 10, 12, and 17 of the ’274 patent anticipated by Kiuchi or unpatentable as obvious over Kiuchi and Bhatti, and claim 5 unpatentable as obvious over the combination of Kiuchi and Lindblad or the combination of Kiuchi, Lindblad, and Bhatti.

Apple Inc. v. VirnetX Inc., IPR2014-00404
Paper 42: Final Written Decision
Dated: July 29, 2015
Patent: 7,987,274 B2
Related Proceedings: IPR2014-00484 (joined)
Before: Michael P. Tierney, Karl D. Easthom, and Stephen C. Siu
Written by: Siu