Takeaway: Arguments that rely on claim constructions not adopted by the Board will not persuade the Board that challenged claims are patentable.

In its Final Written Decision, the Board found that claims 1-7 and 32-42 of the ’704 Patent (all challenged claims) are unpatentable. The ’704 Patent relates generally to establishing a point-to-point communication link.

The Board began with claim construction, stating that the terms of an unexpired patent are interpreted according to their broadest reasonable construction in light of the patent specification. It further stated that, under the broadest reasonable construction standard, claim terms 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. The Board then addressed disputes concerning the proper construction of: “connected to the computer network,” “following connection to the network,” and “point-to-point communication link.”

Petitioner argued that “connected to the computer network,” under the broadest reasonable construction, means “being on-line” and simply requires registration with the server. Patent Owner agreed that the term means “being on-line” but argued that registration alone was not enough to be “on-line” because a computer could go off-line after registering. The Board was not persuaded that the specification and claims limited the scope of the claim term as proposed by the Patent Owner. Instead, it construed the term to mean “active and on-line at registration.”

With respect to the second term — which concerned transmitting an address “following connection to the network” — Patent Owner argued that this phrase required dynamic address allocation. Petitioner argued that limiting the term as proposed by Patent Owner would reads a limitation into the claims, which do not include the word “dynamic.” The Board was persuaded by Petitioner’s argument, particularly in view of other claims in the patent which recited “dynamically assigned . . . addresses.”

Finally, Petitioner argued that “point-to-point communication link” encompasses “communications between two processes over a computer network that are not intermediated by a connection server.” The Board found that Patent Owner did not provide persuasive evidence or rationale to dispute Petitioner’s construction and then it adopted Petitioner’s proposed construction, which it determined to be consistent with the plain and ordinary means of the words in the term.

The Board next addressed Patent Owner’s argument that Petitioner was estopped from initiating the proceedings on the grounds that Petitioner’s third party vendor (who was subject to a bar against initiating IPR proceedings) should have been named as a real-party-in-interest. Petitioner argued that the third party did not control the proceedings but merely had provided prior art to Petitioner at its request. The Board determined that there was no evidence that the third party controlled the proceeding, rejected the argument that the third party should have been named as a real-party-in-interest, and was not persuaded that Petitioner was barred from initiating the proceeding.
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Turning to the merits of the claims, the Board then addressed whether claims 1-7, 32, and 38-42 were anticipated by NetBIOS. Patent Owner argued that NetBIOS queried whether a computer was registered, not whether it was online, and therefore did not disclose a limitation relating to querying whether a second process was online. The Board was not persuaded by the argument because, as discussed above, it rejected Patent Owner’s argument that a computer was not “connected to a computer network” if it went offline after registration. The Board further stated that the Patent Owner agreed that the second process was “active and on-line” at least at registration. Patent Owner next argued that NetBIOS did not teach dynamic address allocation, which the Board did not persuade the Board that the claims were not anticipated in view of its claim construction that rejected Patent Owner’s argument that dynamic address allocation was a claim limitation. Finally, Patent Owner also argued at the hearing that the claims require an “application layer software” not disclosed by NetBIOS, but the Board rejected this argument on several grounds. It first determined that the argument was new and untimely, then determined that the claims did not include limitations distinguishing “application layer software” from the “transport layer construct” disclosed in NetBIOS, and finally determined that NetBIOS also disclosed “application layer software.” Ultimately, the Board concluded that Petitioner demonstrated by a preponderance of the evidence that claims 1–7, 32, and 38–42 were anticipated by NetBIOS.

The Board then analyzed whether claims 1-7 and 32-42 were anticipated by WINS. The Board began by rejecting Patent Owner’s contention that Petitioner did not establish that WINS was prior art. Then, the Board considered the parties’ substantive arguments. The Board essentially found that Patent Owner’s arguments concerning WINS were not persuasive for the same reasons that its arguments concerning NetBIOS were not persuasive. Accordingly, the Board determined that claims 1-7 and 32-42 were anticipated by WINS.

After addressing the anticipation arguments, the Board considered whether claims 33-37 were obvious over NetBIOS and WINS. The Board was not persuaded by Patent Owner’s arguments that “there is no ‘assurance’ in NetBIOS and WINS that registered computers are connected to the computer network” and noted that it had already determined that “NetBIOS and WINS describe nodes or computers that are connected to the computer network” and that the nodes and computers are running processes that are used to create a point-to-point communication link.” The Board then stated that it agreed with Petitioner that the combination of NetBIOS and WINS discloses all of the limitations of claims 33-37.

In summary, the Board determined that (1) claims 1–7, 32, and 38–42 are anticipated by NetBIOS, (2) claims 1-7 and 32–42 are anticipated by WINS, and (3) claims 33–37 are obvious over NetBIOS and WINS and held all challenged claims unpatentable.

Sipnet EU S.R.O. v. Straight Path IP Group, Inc., IPR2013-00246
Paper 24: Final Written Decision
Dated: October 9, 2014
Patent 6,108,704
Before: Kalyan K. Deshpande, Thomas L. Giannetti, and Trenton A. Ward
Written by: Deshpande
Related Proceedings: Net2Phone, Inc. v. eBay Inc., Skype Inc., Civil Action No. 06-2469 (D.N.J.) and Innovative Communications Technologies, Inc. v. Stalker Software, Inc., Civil Action No. 2:12-cv-00009-RGD-TEM (E.D.Va.); Ex partereexamination No. 90/010,416