APPL Answer (ITC)

UNITED STATES INTERNATIONAL TRADE COMMISSION WASHINGTON, D.C. 20436 Before the Honorable Administrative Law Judge E.
James Gildea
In the Matter of CERTAIN DEVICES WITH SECURE COMMUNICATION CAPABILITIES, COMPONENTS THEREOF, AND PRODUCTS CONTAINING THE SAME Investigation No. 337-TA-858
RESPONSE OF RESPONDENT APPLE INC. TO THE COMPLAINT AND NOTICE OF INVESTIGATION
Counsel for Respondent Apple Inc.: Marcia H. Sundeen T. Cy Walker Kenyon & Kenyon LLP 1500 K Street, N.W. Washington, DC 20005 Tel: (202) 220-4200 Fax: (202) 220-4201 Megan Whyman Olesek Michelle N. McLeod Kenyon & Kenyon LLP 1801 Page Mill Road, Suite 210 Palo Alto, CA 94304-1216 Telephone: (650) 384-4700 Fax: (650) 384-4701 Danny L. Williams Terry D. Morgan Ruben S. Bains Christopher N. Cravey Kyung Kim Scott Woloson Richard Groseclose Williams, Morgan & Amerson, P.C. 10333 Richmond, Suite 1100 Houston, TX 77042 Telephone: (713) 934-7000 Fax: (713) 934-7011
Respondent Apple Inc. (Apple), by its undersigned attorneys and pursuant to Rule 210.13 of the Commissions Rules of Practice and Procedure, hereby submits this Response to the Complaint of Science Applications International Corporation (SAIC) and VirnetX, Inc. (VirnetX)(collectively referred to as Complainants) dated September 13, 2012. As an initial matter, Apple denies that it has engaged in unfair competition or violated Section 337 of the Tariff Act of 1930, as amended, by importing, selling for importation, or selling within the United States after importation any devices, products, or articles that infringe any valid and enforceable intellectual property rights at issue in this Investigation. To the extent Complainants rely on evidence not presented in Investigation No. 337-TA-818, or present a position not consistent with a position taken in that Investigation, Apple has not yet had sufficient time and opportunity to collect and review all of the information that may be relevant to those issues. Apple therefore reserves the right to amend or supplement its responses, including raising additional defenses. In this light, Apple denies each and every allegation in the Complaint that is not expressly admitted below. Any factual allegation admitted below is admitted only as to the specific admitted facts, and not as to any purported conclusions, characterizations, implications or speculations that might follow from the admitted facts. Additionally, to the extent the headings used in the Complaint contain any allegations, Apple hereby denies such allegations. Apple includes the headings from the Complaint in this Response solely for purposes of clarity.
I. 1.
INTRODUCTION Apple admits that Complainants have filed a Complaint under Section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337, to remedy allegedly unlawful importation into the United States, the sale for importation, and the sale within the United States after importation by certain entities, but Apple denies that it has engaged in any such unlawful activities as alleged. Apple denies that any Apple products infringe any asserted claim of the 181 patent.
2.
Apple admits that the Complaints name Apple as a proposed respondent in this Investigation.
3.
Apple admits that what appears to be a certified copy of the 181 patent was submitted by Complainants as Exhibit 1 to the Complaint. Apple admits that what purports to be a certified copy of the recorded assignments for the 181 patent was attached as Exhibit 2 to the Complaint, and that what appears to be a more recent certified copy of the same apparently was submitted on or about September 28, 2012. Apple admits that what appear to be copies of agreements between VirnetX and SAIC concerning the rights of each Complainant as to the patent in suit were attached as Confidential Exhibits 3C-6C. Apple admits that SAIC was found by the Commission to be a necessary party to an action asserting the 181 patent in Investigation No. 337TA-818.
4.
Apple denies that an industry under 19 U.S.C. 1337(a)(2) or (a)(3)(A), (B), or
(C) exists and/or is in the process of being established.
5.
Apple admits that Complainants seek an exclusion order and cease and desist
orders directed to certain Apple products, but Apple denies that there is any basis for granting any such orders. Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 5 and, therefore, denies them. II. THE PARTIES A. 6. Complainants
Apple admits that VirnetX purports that it is a corporation organized under the
laws of Delaware with its principal place of business at 308 Dorla Court, Suite 206, in Zephyr Cove, Nevada. Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 6 and, therefore, denies them. 7. Apple is without knowledge or information sufficient to form a belief as to the
truth of the allegations of Paragraph 7 and, therefore, denies them. 8. Apple is without knowledge or information sufficient to form a belief as to the
truth of the allegations of Paragraph 8 and, therefore, denies them. 9. Apple admits that VirnetX purports to have a patent portfolio of 20 U.S. and 26
international patents and over 120 patent applications. Apple admits that VirnetX purports to have licensed the asserted patent to the entities listed in Exhibit 7C. Apple is without knowledge or information sufficient to form a belief as to the truth of the allegations of Paragraph 9 and, therefore, denies them. 10. Apple is without knowledge or information sufficient to form a belief as to the
truth of the allegations of Paragraph 10 and, therefore, denies them.
11.
Apple admits that the Commission in Investigation No. 337-TA-818 determined
not to review the ALJs initial determination (Order No. 15) or Order No. 14. Apple admits that SAIC is identified as a co-complainant in the Complaint. B. 12. Proposed Respondent
Apple admits that it is a California corporation with its principal place of business
at 1 Infinite Loop in Cupertino, California. Apple admits that it designed, manufactures or has manufactured, and sells or has sold Mac computers with the Lion and Mountain Lion operating systems, iPhone 4, iPhone 4S, iPhone 5, iPad 2, The new iPad, iPad (4th generation), iPad mini, iPod touch (4th generation) and iPod touch (5th generation). Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 12 and, therefore, denies them. 13. Apple admits that it imports devices that contain the FaceTime application
including Mac computers with the Lion operating system, iPhone 4, iPhone 4S, iPhone 5, iPad 2, iPad (4th generation), iPad mini, iPod touch (4th generation) and iPod touch (5th generation). Apple denies that FaceTime is largely an entertainment application. It is unclear what Complainants mean by Apple pre-installs FaceTime on the infringing devices. Accordingly, Apple denies this allegation. 14. Apple admits that it designed, markets, and manufactures or has manufactured
iPhone, iPad, iPod, Apple TV, iOS, and Mac OSX operating systems. Apple admits that OS X Mountain Lion was made available in July 2012. Apple admits that Paragraph 14 contains quotations from Exhibit 8, a copy of Apples 2011 10K. Apple further admits that Paragraph 14 of the Complaint also contains a quotation from Exhibit 10, a printout of a www.apple.com website.
15.
Apple admits that the iPhone 4 was introduced in June 2010 and includes the
ability to make FaceTime video calls. Apple admits that the iPhone 5 was introduced in September 2012 and includes the ability to make FaceTime video calls. Apple admits that Paragraph 15 of the Complaint references Exhibit 26, a printout of a www.apple.com website. Apple denies that the quotation in Paragraph 15 is contained in Exhibit 8 as indicated. 16. Apple admits that the iPad 2 and new iPad included the ability to make FaceTime
video calls. Apple admits that Paragraph 16 of the Complaint references Exhibit 17, a printout of a www.apple.com website and Exhibit 27, a printout of a money.cnn.com article. Apple admits that the iPad (4th generation) and the iPad mini, announced in October 2012, have the ability to make FaceTime video calls. Apple is without knowledge or information sufficient to form a belief as to the truth of any remaining allegations of Paragraph 16 and, therefore, denies them. 17. Apple admits that it has an iPod line of products that includes the iPod touch.
Apple admits that the iPod touch has flash memory, a display, and a Multi-Touch user interface. Apple admits that the iPod touch introduced in September 2010 included features such as the ability to make FaceTime video calls. Apple admits that the 5th generation iPod touch, announced in September 2012, provides FaceTime video calling. Apple denies that the quotation in Paragraph 17 of the Complaint is contained in Exhibit 8 as indicated. Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 17 and, therefore, denies them. 18. Apple admits that FaceTime allows users to make video calls to iPad 2, iPhone 4,
iPod touch (4th and 5th generation) and some Mac computers. Apple denies that
FaceTime runs on all Mac computers. Apple admits that FaceTime allows users to video-chat. It is unclear what Complainants mean by allows FaceTime users to videochat by making a telephone call. Accordingly, Apple denies this allegation. Apple admits that Paragraph 18 of the Complaint contains quotations from Exhibits 9, 11 and 17, each a printout of a www.apple.com webpage. 19. 20. 21. Apple admits the allegations of Paragraph 19. Apple admits the allegations of Paragraph 20. Apple admits that it is involved in the manufacture, importation, sale for
importation, sale after importation, and distribution of various Apple products into the United States, including the iPhone 4, iPhone 4S, iPhone 5, iPad 2, iPad (4th generation), iPad mini, iPod touch (4th and 5th generation) and Mac computers. III. 22. THE TECHNOLOGY AND PRODUCTS AT ISSUE Apple is without knowledge or information sufficient to form a belief as to the
truth of the allegations of Paragraph 24 and, therefore, denies them. 25. Apple admits that Complainants have identified Apple products, including
Apples iPhones, iPads, iPods, and Mac computers, as allegedly infringing the Asserted Patent. Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 25 and, therefore, denies them. IV. THE ASSERTED PATENT U.S. PATENT NO. 8,051,181
A. 26.
Background and Ownership
Apple admits that, on its face, the 181 patent (i) is entitled Method for
Establishing Secure Communication Link Between Computers of Virtual Private Network, (ii) lists Victor Larson, Robert Dunham Short III, Edmund Colby Munger, and Michael Williamson as inventors, and (iii) identifies November 1, 2011, as its issue date. Apple admits that what purports to be a certified copy of the 181 patent is attached as Exhibit 1. Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 26 and, therefore, denies them. 27. Apple admits that, according to the face of the patent, the 181 patent reflects
application number 11/679,416 and a filing date of February 27, 2007. Apple admits that the 181 patent purports to be a continuation of U.S. Patent No. 7,188,180, filed on November 7, 2003, which in turn purports to be a divisional of application serial number 09/558,209, filed on April 26, 2000, which in turn purports to be a continuation-in-part of U.S. Patent No. 6,502,135 filed on February 15, 2000, which in turn purports to be a continuation-in-part of U.S. Patent No. 7,010,604, filed on October 29, 1999, which in turn purports to be based on provisional applications 60/106,261 and 60/137,704, respectively filed on October 30, 1998, and June 7, 1999. Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 27 and, therefore, denies them. 28. Apple admits that what purports to be a certified copy of the recorded
assignments for U.S. Patent No. 8,051,181 is attached as Exhibit 2 to the Complaint and that what appears to be a more recent certified copy of the same was submitted on or about September 28, 2012. Apple admits that what appear to be copies of agreements
between VirnetX and SAIC concerning the rights of each Complainant as to the patent in suit were attached as Confidential Exhibits 3C-6C. Apple denies the remaining allegations of Paragraph 28. 29. 30. Apple denies that the 181 patent is valid, enforceable, and in full force and effect. Apple admits that what purports to be a certified copy of the prosecution history
of the 181 patent was submitted in Appendices A and B to the Complaint and supplemented on or about September 28, 2012. Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 30 and, therefore, denies them. B. 31. Nontechnical Description of the 181 Patent
Apple denies the allegations of Paragraph 31 to the extent that they purport to
state conclusions of law or allegations of fact. Apple denies the allegations of Paragraph 31 to the extent they attribute to the 181 patent anything not claimed therein. Apple further denies that the 181 patent contains anything inventive or novel. Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations and/or characterizations of Paragraph 31 and, therefore, denies them. C. 32. Foreign Counterparts to the 181 Patent
Apple is without knowledge or information sufficient to form a belief as to the
truth of the allegations of Paragraph 33 and, therefore, denies them. D. Licensees
34.
Apple admits that Exhibit 7C purports to be a list of licensees of the 181 patent.
Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 34 and, therefore, denies them. V. 35. UNLAWFUL AND UNFAIR ACTS OF RESPONDENT Apple denies that Apple or any Apple product infringes any asserted claim of the
181 patent. Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 35 and, therefore, denies them. 36. 37. 38. Apple denies the allegations of Paragraph 36. Apple denies the allegations of Paragraph 37. Apple admits that Exhibit 13 purports to include a claim chart that attempts to
apply claims 1, 2, 24, 26, 28, and 29 of the 181 patent to certain Apple products. Apple denies the remaining allegations of Paragraph 38. 39. 40. 41. 42. 43. 44. Apple denies the allegations of Paragraph 39. Apple denies the allegations of Paragraph 40. Apple denies the allegations of Paragraph 41. Apple denies the allegations of Paragraph 42. Apple denies the allegations of Paragraph 43. Apple admits that a district court action was filed against Apple on November 1,
2011, alleging that certain Apple products infringe the 181 patent (Civil Action No. 6:11-cv-563). Otherwise, Apple denies the allegations of Paragraph 44. VI. 45. SPECIFIC INSTANCES OF UNFAIR IMPORTATION AND SALE Apple denies that any Apple products infringe any asserted claim of the 181
patent. Apple admits that Apple and Apples authorized agents manufacture, import into
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the United States, and sell Apple products. Apple denies the remaining allegations of Paragraph 45. 46. Apple admits that Exhibits 31-35 show certain Apple products are assembled in
China. Apple is without knowledge or information sufficient to form a belief as to the remaining allegations of Paragraph 46 and, therefore, denies them. VII. 47. TARIFF CLASSIFICATION UNDER THE HARMONIZED TARIFF SCHEDULE On information and belief, the Harmonized Tariff Schedule of the United States
item numbers may include 8471.30.01, 8471.49.00 and 8471.50.015 for computers, 8517.12.00 and 8517.12.005 for mobile phones and 8471.30.01 and 8528.59.15 for portable automatic processing machines. VIII. RELATED LITIGATION 48. Apple admits that, on August 11, 2010, VirnetX filed a complaint in the U.S.
District Court for the Eastern District of Texas against Apple, among others (Civil Action No. 6:10-cv-417). Apple admits that VirnetX alleges that Apple infringes U.S. Patent Nos. 6,502,135, 7,418,504, 7,490,151, and 7,921,211, but Apple denies that any Apple products infringe any claim of these patents. Apple admits that this case still is pending and trial began October 31, 2012. Otherwise, Apple denies the allegations of Paragraph 48. 49. Apple admits that there are no new developments in Civil Action No. 6:10-cv-417
with respect to the 181 patent; however, at least one patent in suit in Civil Action No. 6:10-cv-417 is in the same patent family as the 181 patent. 50. Apple admits that, on November 1, 2011, VirnetX filed a complaint in the U.S.
District Court for the Eastern District of Texas alleging that Apple infringes the 181
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patent, but denies that any Apple products infringe any claim of the 181 patent (Civil Action No. 6:11-cv-563). Apple admits that that action is currently stayed. Apple denies any remaining allegations of Paragraph 50. 51. Apple admits that, on November 4, 2011, VirnetX filed a complaint in the U.S.
International Trade Commission under Section 337 of the Tariff Act of 1930, as amended. Apple admits that on December 1, 2011, the Commission issued a Notice of Institution of an Investigation thereby instituting Investigation No. 337-TA-818. Apple admits that that investigation was terminated. Apple admits that SAIC is named as a cocomplainant in this Complaint. Apple denies any remaining allegations of Paragraph 51. 52. Apple admits that, on March 28, 2012, Apple filed an inter partes reexamination
request for the 181 patent. Apple admits that on June 4, 2012, a reexamination of the 181 patent was ordered and the examiner issued a non-final office action rejecting all claims of the 181 Patent. Apple admits that a decision on a petition for an extension of time to reply to the Office Action in reexamination was granted on June 27, 2012. Apple admits that the Patent Owners Response to the Office Action was filed on September 4, 2012. Apple filed a third-party comment after the non-final action on October 22, 2012. Apple admits that the reexamination of the 181 patent is pending. Apple denies any remaining allegations of Paragraph 52. 53. Apple identifies that on July 11, 2011, Apple filed an inter partes reexamination
request for U.S. Patent No. 6,502,135. A reexamination of this patent was ordered on October 3, 2011. Apple identifies that on July 8, 2011, Cisco filed an inter partes reexamination request for U.S. Patent No. 6,502,135. A reexamination of this patent was ordered on October 3, 2011. Additionally, Apple identifies that on October 25, 2011,
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Cisco filed an inter partes reexamination request for U.S. Patent No. 7,188,180. A reexamination of this patent was ordered on September 9, 2012. IX. DOMESTIC INDUSTRY A. 54. VirnetXs Activities and Investments in Plant and Equipment, or Employment of Labor or Capital
To the extent that Paragraph 54 contains conclusions of law, no response is
necessary. Apple denies that VirnetX has a domestic industry under 19 U.S.C. 1337(a)(2) and (a)(3)(A). Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 54 and, therefore, denies them. 55. Apple is without knowledge or information sufficient to form a belief as to the
truth of the allegations of Paragraph 55 and, therefore, denies them. 56. Apple denies that VirnetX has a domestic industry under 19 U.S.C. 1337(a)(2)
and (a)(3)(B). Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 56 and, therefore, denies them. 57. Apple is without knowledge or information sufficient to form a belief as to the
truth of the allegations of Paragraph 57 and, therefore, denies them. 58. To the extent that Paragraph 58 contains conclusions of law, no response is
necessary. Apple denies that VirnetX has a domestic industry under 19 U.S.C. 1337(a)(2) and (a)(3)(A) and/or (B). Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 58 and, therefore, denies them. 59. To the extent that Paragraph 59 contains conclusions of law, no response is
necessary. Apple denies that VirnetX has a domestic industry under 19 U.S.C.
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1337(a)(2) and (a)(3)(A) and/or (B). Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 59 and, therefore, denies them. 60. Apple is without knowledge or information sufficient to form a belief as to the
necessary. Apple denies that VirnetX has a domestic industry under 19 U.S.C. 1337(a)(3)(A) and/or (a)(3)(B). Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 61 and, therefore, denies them. B. 62. VirnetXs Engineering and Research and Development
necessary. Apple denies that VirnetX has a domestic industry under Section 227(a)(2) and (a)(3)(C). Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 62 and, therefore, denies them. 63. 64. Apple incorporates paragraphs 54 to 61 of this response by reference. Apple is without knowledge or information sufficient to form a belief as to the
necessary. Apple denies that VirnetX has a domestic industry under 19 U.S.C. 1337(a)(2) and (a)(3)(C). Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 65 and, therefore, denies them.
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66.
necessary. Apple denies that VirnetX has a domestic industry under 19 U.S.C. 1337(a)(3)(C). Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 67 and, therefore, denies them. C. The Activities and Investments of VirnetXs Licensees 1. 68. Microsoft Corporation
Apple admits that a copy of a purported agreement between VirnetX and
Microsoft is attached to the Complaint as Confidential Exhibit 42C. Apple is without knowledge or information sufficient to form a belief as to the truth of the allegations of Paragraph 68 and, therefore, denies them. 69. To the extent that Paragraph 69 contains conclusions of law, no response is
necessary. Apple denies that Complainants have a domestic industry under 19 U.S.C. 1337 (a)(3)(A), (B), and/or (C). Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 69 and, therefore, denies them. 70. Apple is without knowledge or information sufficient to form a belief as to the
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73.
necessary. Apple denies that Complainants have a domestic industry under 19 U.S.C. 1337 (a)(3)(A), (B), and/or (C). Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 78 and, therefore, denies them. 2. 79. Aastra USA Inc.
Apple admits that a copy of a purported agreement between VirnetX and Aastra is
attached to the Complaint as Confidential Exhibit 53C. Apple is without knowledge or information sufficient to form a belief as to the truth of the allegations of Paragraph 79 and, therefore, denies them. 80. To the extent that Paragraph 80 contains conclusions of law, no response is
necessary. Apple denies that Complainants have a domestic industry under 19 U.S.C. 1337 (a)(3)(A), (B), and/or (C). Apple is without knowledge or information sufficient to
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form a belief as to the truth of the remaining allegations of Paragraph 80 and, therefore, denies them. 81. Apple is without knowledge or information sufficient to form a belief as to the
necessary. Apple denies that Complainants have a domestic industry under 19 U.S.C. 1337 (a)(3)(A), (B), and/or (C). Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 89 and, therefore, denies them.
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3. 90.
Mitel Networks Corporation
Apple admits that a copy of a purported agreement between VirnetX and Mitel is
attached to the Complaint as Confidential Exhibit 72C. Apple is without knowledge or information sufficient to form a belief as to the truth of the allegations of Paragraph 90 and, therefore, denies them. 91. To the extent that Paragraph 91 contains conclusions of law, no response is
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98.
necessary. Apple denies that Complainants have a domestic industry under 19 U.S.C. 1337 (a)(3)(A), (B), and/or (C). Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 100 and, therefore, denies them. 4. 101. NEC Corporation and NEC Corporation of America
Apple admits that a copy of a purported agreement between VirnetX and NEC
and NEC Corporation of America is attached to the Complaint as Confidential Exhibit 91C. Apple is without knowledge or information sufficient to form a belief as to the truth of the allegations of Paragraph 101 and, therefore, denies them. 102. To the extent that Paragraph 102 contains conclusions of law, no response is
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105.
necessary. Apple is without knowledge or information sufficient to form a belief as to the truth of the allegations of Paragraph 110 and, therefore, denies them. 111. Apple denies that Complainants have a domestic industry under 19 U.S.C. 1337
(a)(3)(A), (B), and/or (C). Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 111 and, therefore, denies them. D. 112. VirnetXs Licensing of the 181 Patent
necessary. Apple denies that VirnetX has a domestic industry under Section 337(a)(2) and (a)(3)(C). Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 112 and, therefore, denies them.
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113.
truth of the allegations of Paragraph 114 and, therefore, denies them. 115. Apple admits that Paragraph 115 references Exhibit 40, which appears to be a
printout of a VirnetX press release, and Exhibit 41, which appears to be a printout related to Gabriel Licensing Guidelines. Apple is without knowledge or information sufficient to form a belief as to the truth of the allegations of Paragraph 115 and, therefore, denies them. 116. Apple denies that VirnetX has made a substantial investment and denies that any
nexus exists between any purported investments and the 181 patent, the licensing of the 181 patent, and the United States. Apple denies the remaining allegations of Paragraph 116. 117. To the extent that Paragraph 117 contains conclusions of law, no response is
necessary. Apple denies that VirnetX has a domestic industry under 19 U.S.C. 1337 (a)(3)(C). Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 117 and, therefore, denies them. X. 118. RELIEF REQUESTED Apple admits that Complainants filed with the Commission a Complaint dated
September 13, 2012, requesting that the Commission institute an investigation pursuant to Section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337, to remedy allegedly unlawful importation into the United States, the sale for importation, and the sale within the United States after importation by certain entities, but Apple denies that it
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has engaged in any such unlawful activities as alleged. Apple denies that any Apple products infringe any claim of the 181 patent. Apple is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations of Paragraph 118 and, therefore, denies them. 119. Apple admits that Complainants are requesting that the Commission determine
whether there has been a violation of Section 337, but Apple denies that it has engaged in any such unlawful activities as alleged. 120. Apple denies that Complainants are entitled to any relief against Apple or any
Apple products, including the relief requested in Paragraph 120. Apple denies that any Apple products infringe any claim of the 181 patent. 121. Apple denies that Complainants are entitled to any relief against Apple or any
Apple products, including the relief requested in Paragraph 121. Apple denies that any Apple products infringe any claim of the 181 patent. Apple denies that it has engaged in any unlawful activities as alleged. 122. Apple denies that Complainants are entitled to any relief against Apple or any
Apple products, including the relief requested in Paragraph 122. 123. Apple denies that Complainants are entitled to any relief against Apple or any
Apple products. RESPONSE TO NOTICE OF INVESTIGATION 1. Pursuant to Commission Rule 210.13, Apple responds to the Notice of Institution
of Investigation issued by the U.S. International Trade Commission on October 16, 2012, and published in the Federal Register on October 18, 2012 (77 Fed. Reg. 204), as follows:
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2.
Apple admits that, as set forth in the Notice of Investigation, Complainants filed
with the Commission an original Complaint on September 13, 2012, and submitted supplemental materials on or about September 28, 2012. Apple admits that the Complaint generally sets forth the allegations summarized in the Notice of Investigation, but Apple denies the substantive allegations of the Complaint. Apple denies that there has been any violation of 19 U.S.C. 1337 by Apple, and denies that a domestic industry as required by 19 U.S.C. 1337(a)(2) and defined by 19 U.S.C. 1337(a)(3) exists or is in the process of being established. 3. Apple admits that the Complainants have requested that an investigation be
instituted and that, after the investigation, an exclusion order and cease and desist orders be issued, as set forth in the Notice of Investigation, but Apple denies that Complainants are entitled to any relief as a result of this investigation. I. 4. ADDITIONAL INFORMATION REQUIRED UNDER COMMISSION RULE 210.13(B) Pursuant to Commission Rule 210.13(b), Apple provides the following
information. Apple specifically denies that any of the supplied data refers or relates to any unlawful act under Section 337 or otherwise. 5. The approximate statistical data related to the quantity and value of imported
accused products, insofar as Apple is able to understand which products Complainants accuse in this investigation, are set forth in Confidential Exhibit A. 6. The Harmonized Tariff Schedule item numbers for the accused products imported
into the United States are as follows: iPhone 4 iPhone 4S 8517.12.0050 8517.12.0050
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iPhone 5 iPad 2 The new iPad iPad (4th generation) iPad mini iPod touch (4th generation) iPod touch (5th generation) Mac computers
8517.12.0050 8471.30.0100 8471.30.0100 8471.30.0100 8471.30.0100 8528.59.1500 8471.30.0100 8471.30.0100, 8471.49.0000, 8471.50.0150
7.
Apple has relied on and currently relies on third parties to produce the iPhone 4,
iPhone 4S, iPhone 5, iPad 2, iPad (4th generation), iPad mini, iPod touch (4th and 5th generation) and Macintosh computer products. Apple does not have the capacity to produce the iPhone 4, iPhone 4S, iPhone 5, iPad 2, the new iPad, iPod touch and Macintosh computer products. The new iPad is no longer manufactured, nor imported into or sold in the United States. 8. The names and addresses of Apples suppliers of the iPhone 4, iPhone 4S, iPhone
5, iPad 2, the new iPad, iPad (4th generation), iPad mini, iPod touch (4th and 5th generation) and Macintosh computer products are set forth in Confidential Exhibit A. 9. Apples statement as to the significance of the United States market regarding the
accused products to its operations is set forth in Confidential Exhibit A. DEFENSES 10. Apple alleges and asserts the following defenses in response to the allegations set
forth in the Complaint. Apples inclusion of these defenses in this Response is not a concession that Apple bears the burden of proof with respect to any of them. Apple reserves the right to supplement and/or amend its defenses as the Investigation 24
progresses. Apple further states that it has not had a sufficient opportunity to collect and review any information not provided in connection with Investigation No. 337-TA-818 that is relevant to potentially available defenses against the allegations in the Complaint, and thus reserves the right to modify these defenses or to raise additional defenses as discovery proceeds in this Investigation. First Defense: Noninfringement 11. Apple has not directly infringed, indirectly infringed, contributed to or induced
infringement of any valid or enforceable claim of any of the 181 patent, and has not otherwise committed any acts in violation of 35 U.S.C. 271 and/or 19 U.S.C. 1337. 12. Apple further responds that the accused Apple products do not infringe the
asserted claims of the 181 patent for at least the following reasons: 13. The accused Apple products are not associated with a secure name and an
unsecured name, at least because the Apple products do not use names that require authorization for access. 14. The accused Apple products do not receive a message from a second device of the
desired to securely communicate with the first device. 15. The accused Apple products do not send a message over a secure communication
link, at least because they do not send a message over a link that is anonymous, encrypted or direct. 16. The accused Apple products do not communicate with a second device having a
secure name, at least because the Apple products do not use names that require authorization for access. 17. The accused Apple products do not send a message to a secure name service, at
least because Apple products do not use a secure name service. 25
18.
The accused Apple products do not send a message requesting a network address
associated with the secure name of the second device, at least because the Apple products do not use names that require authorization for access. 19. The accused Apple products do not receive a message containing the network
address associated with the secure name of the second device, at least because the Apple products do not use names that require authorization for access. 20. The accused Apple products do not send a message to the network address
associated with the secure name of the second device using a secure communication link, at least because the Apple products do not use names that require authorization for access and because they do not send a message over a link that is anonymous, encrypted or direct. 21. The accused Apple products do not include a second device that is capable of
supporting a secure communication link as well as a non-secure communication link, at least because the Apple products do not support a communication link that is anonymous, encrypted or direct. 22. The accused Apple products do not automatically initiate the secure
communication link after it is enabled, at least because the Apple products do not automatically initiate a communication link, they do not initiate a communication link that is anonymous, encrypted or direct, and they do not initiate a communication link after it has been enabled. 23. The accused Apple products do not support a plurality of services over the secure
communication link, at least because the Apple products do not provide, establish or use a communication link that is anonymous, encrypted or direct.
26
Second Defense: Invalidity 24. The 181 patent is invalid because it fails to comply with the requirements of at
least 35 U.S.C. 101, 102, 103 and 112. Below, Apple provides an identification of bases that support this defense. The bases provided herein are preliminary and should not be construed as limiting in any way the defenses that Apple will present in this Investigation. Apple notes that the reexamination of the 181 patent was undertaken by the U.S. Patent and Trademark Office and is ongoing. 25. The asserted claims of the 181 patent are invalid under 35 U.S.C. 102 and/or
103 as anticipated and/or rendered obvious taken alone or in combination over at least the following references: Prior Art Patents U.S. Pat. No. 5,548,646 U.S. Pat. No. 5,511,122 U.S. Pat. No. 5,530,758 U.S. Pat. No. 5,898,830 U.S. Pat. No. 5,974,454 U.S. Pat. No. 6,119,234 U.S. Pat. No. 6,131,121 U.S. Pat. No. 6,148,342 U.S. Pat. No. 6,178,505 U.S. Pat. No. 6,308,213 U.S. Pat. No. 6,496,867 U.S. Pat. No. 6,499,108 U.S. Pat. No. 6,557,037 U.S. Pat. No. 6,665,718 U.S. Pat. No. 6,829,242 U.S. Pat. No. 7,100,195 U.S. Pat. No. 7,249,377
Prior Art Publications RFC 1034 Network Working Group, Domain Names, Concepts and Facilities RFC 1123 Network Working Group, Requirements for Internet Hosts RFC 1738 Network Working Group, Uniform Resource Locators (URL)
27
RFC 1889 Network Working Group, RTP: A Transport Protocol for Real-Time Applications RFC 1945 Network Working Group, Hypertext Transfer Protocol HTTP/1.0 RFC 2065 Internet Engineering Task Force, Domain Name System Security Extensions RFC 2167 Network Working group, Referral Whois (RWhois) Protocol RFC 2246 Network Working Group, the TLS Protocol Version 1.0 RFC 2230 Network Working Group and Internet Engineering Task Force, Key Exchange Delegation Record for the DNS RFC 2401 Network Working Group, Security Architecture for the Internet Protocol RFC 2535 Network Working Group, Domain Name System Security Extensions RFC 2538 Network Working Group and Internet Engineering Task Force, Storing Certificates in the Domain Name System (DNS) RFC 2543 Network Working group and Internet Engineering Task Force, SIP: Session Initiation Protocol ITU-T Recommendation H.323 Packet based multimedia communication systems Lendenmann, Understanding OSF DCE for AIX, IBM International Technical Support Organization, 1995 E. Solana and J. Harms, Flexible Internet Secure Transactions Based on Collaborative Domains, Lecture Notes in Computer Science, 1997 T. Kiuchi and S. Kaihara, C-HTTP - The Development of a Secure, Closed HTTPbased Network on the Internet, IEEE Network and Distributed System Security, Proc. of the Symposium on Network and Distributed System Security, at 64-75, 1996 Cisco Systems, Inc., Overview of Access VPNs and Tunneling Technologies, 1999 H. Schulzrinne, Personal Mobility for Multimedia Services in the Internet, IDMS 96, 1996 H. Schulzrinne, The Session Initiation Protocol presentation, Columbia University, New York T Berners-Lee et al., Hypertext Transfer Protocol HTTP/1.0, IETF, May 1996 (RFC 1945) A. Freier, P. Karlton, and P. Kocher, The SSL Protocol Version 3.0, November 18, 1996. R. Braden, Requirements for Internet Hosts Application and Support, IETF, Oct. 1989 (RFC 1123) AutoSOCKS v2.1 Administrators Guide Aventail Connect 3.01/2.5 Administrators Guide Aventail Connect 3.1/2.6 Administrators Guide
Prior Art Systems
Trusted Information Systems (later Network Associates) Gauntlet System, comprising the Gauntlet Firewall and the Gauntlet PC Extender, described, for example, in Gauntlet Firewall Administrators Guide Version 4.2; Gauntlet Firewall for Unix Getting Started Guide Version 4.2; Gauntlet Firewall for Unix User Guide
28
Version 4.2; Gauntlet for IRIX Administrators Guide; and Netperm Table Reference Guide Version 4.2 Compatible Systems IntraPort System, comprising the IntraPort 2 VPN Access Server, CompatiView Software, and IntraPort Client Software, described, for example, in VPN: The Remote Access Solution, Compatible Systems; IntraPort 2 and IntrPort 2+ VPN Access Server Installation Guide, Version 1.1; IntraPort Access Server Installation Guide, Version 1.3; IntraPort 2 and IntraPort 2+ VPN Access Server Administrators Guide, Version 1.5; CompatiView Reference Guide, Version 4.0; CompatiView Reference Guide, Version 5.4; IntraPort Client Software Reference Guide, Version 3.8; and IntraPort Client Software Reference Guide, Version 1.0 Altiga Networks VPN System, comprising the Altiga VPN Concentrator and Altiga VPN Client, described, for example, in VPN 3000 Concentrator Series User Guide, Release 2.5; VPN 3000 Concentrator Series Getting Started, Release 2.5; VPN 3000 Client User Guide, Release 2.5; Altiga Proves Multi-Vendor Interoperability for Seamless VPN Deployment, VPN Workshop Marks Significant Development in the VPN Market; The Tolly Group: Altiga Networks, Inc.; Altiga VPN Concentrator Series (C50) versus Nortel Networks Contivity Extranet Switch 4000 and 4500 VPN Tunneling Competitive Evaluation; Altiga Concentrates on VPN Security Aventail, including Aventail Connect 3.1/2.6, Aventail Connect 3.01/2.51, AutoSocks v2.1, Aventail ExtraNet, and/or other prior version thereof Cisco Prior Art Systems, described, for example, in Multimedia Conference Manager, Release 11.3 NA; Cisco Systems, Inc.: Deploying H.323 Applications in Cisco Networks; Configuration Guide for the Cisco Secure PIX Firewall Version 5.0; PIX Firewall Series Configuration Guide Version 4.0; and Cisco Multimedia Conference Manager: Provides H.323 Gatekeeper And Proxy Services For Reliable And Scalable Videoconferencing And Voice-Over-IP Deployments; and Cisco H.323 Gateway Security and Accounting Enhancements The asserted claims of the 181 patent are invalid under 35 U.S.C. 112 at least
26.
with respect to the terms secure name, unsecured name, wherein the secure name indicates security, secure name service, the desired, when needed, after it is enabled, the device, automatically initiating the secure communication link after it is enabled, wherein the receiving and sending of messages through the secure communication link includes multiple sessions, through tunneling within the secure communication link, the plurality of services, obtaining registration of a secure name for the first device, requesting and obtaining registration of an unsecured name associated with the first device, requesting and obtaining registration of a secure name
29
associated with the first device, providing an unsecured name associated with the device, and a unique network address. 27. At least the asserted claims identified below do not comply with the definiteness
requirement of 35 U.S.C. 112(2), which requires that a claim particularly point out and distinctly claim the subject matter which the applicant regards as his invention, for at least the following reasons: 28. Claims 1-5, 8, 10-11, 21-29 are indefinite. Claims 1-5, 8, 10-11, 21-29 recite the
terms secure name or unsecure name. These terms appear only in the claims of the Asserted Patent. Some claims suggest that secure name may encompass a secure domain name and that the secure name may indicate security. Based on this limited information, one of ordinary skill in the art cannot ascertain the scope of the terms, other than to perhaps speculate that the terms may be synonymous with secure domain name and domain name, respectively. The Asserted Patent provides no objective measure to ascertain whether a particular name is secure or unsecure and/or what characteristics or qualities should be considered in making the determination. A person of ordinary skill in the art would not be able to understand the scope of the claims when the claims are read in light of the specification. Each of these terms fails to provide the public with notice of the patentees claimed right to exclude. 29. Claims 1, 24, 26, and 29 are indefinite. Claims 1, 24, 26, and 29 recite the phrase
receiving, at a first device, a message of the desired to securely communicate. The claims do not specify whether the desired to securely communicate is the desire of the second device or the user, therefore the phrase is indefinite. Moreover, the phrase appears to be based upon a purely subjective characteristic of a user, and no objective
30
standard is provided to otherwise delineate the scope of the claimed invention. For example, the message to securely communicate may be transmitted inadvertently from the second device. One of ordinary skill in the art could not look to the Asserted Patent to determine whether such a message constitutes a desired to securely communicate. One skilled in the art is left to speculate whether a message includes and/or conveys the desired to securely communicate. Presumably, though not specified, the use of the term the desire[d] in the claims of the 181 patent is referring to the emotional state of a person sending the message from the second device. Whether the person sending the message desires to securely communicate with the first device is a purely subjective inquiry. Even if the message includes some objective indicia used to initiate or establish a secure communication between the parties, the message is insufficient to ascertain whether the sender desires to securely communicate. For example, if the message is inadvertently sent, the message does not reflect the senders desire to securely communicate. As a consequence, a person of ordinary skill in the art cannot examine a particular message and objectively determine whether it reflects the senders desire to securely communicate. 30. Claims 2 and 22 are indefinite. Claims 2 and 22 specify the term secure name
service. This term appears only in the claims of the Asserted Patent. The term is indefinite because the Asserted Patent fails to disclose the characteristics that render a service a secure name service. The term secure name service is not disclosed by the 181 patent, other than by post-filing amendments of the claims during prosecution, and the term is ambiguous because it purports to expand the scope of the claims to something beyond the confines of the Internet domain name system. Presumably, the term secure
31
name service connotes something that is broader than a secure domain name service. However, with no assistance provided by the patent specification and limited treatment given in the prosecution history, there is no way to determine with any reasonable precision the scope of the claims that contain the term secure name service. While the patentee has offered in the prosecution history that the term secure name service connotes a non-conventional system that includes functionality that cannot be accomplished by a standard domain name service, these limited comments provide insufficient guidance to one of ordinary skill in the art to ascertain with any precision the defining characteristics or scope of a secure name service. One of ordinary skill in the art could not look to the Asserted Patent to determine the scope of the claimed invention. Use of the term fails to provide the public with notice of the patentees claimed right to exclude. 31. Claim 7 is indefinite. Claim 7 calls for establishing a non-secure communication
link when needed. The claim is indefinite because the claim fails to bound the scope of the phrase when needed with sufficient explanatory limitations. Further, the term is purely subjective because when needed may vary from one user to another. As a consequence, the scope of claim 7 depends solely on the subjective opinion of a particular individual communicating with the second device. The 181 patent provides no guidance as to when a non-secure communication link may be needed with the second device. Rather, the claim is drafted entirely from the subjective perspective of the user, and the standard of when a non-secure communication link is needed is undefined in the 181 patent. Thus the Asserted Patent fails to disclose any objective standard for
32
determining the scope of the claimed invention. One of skill in the art is left to speculate when a secure communication link may or may not be needed. 32. Claim 9 is indefinite. Claim 9 recites automatically initiating the secure
communication link after it is enabled. Claim 9 is indefinite for lacking antecedent basis for the phrase after it is enabled. The claim does not disclose the it that is enabled, but seems to suggest that the secure communication link was enabled in claim 2 then automatically initiated in claim 9. Thus, the claim is indefinite because it is inoperative as written, as the claim does not disclose how the secure communication link is automatically initiated after it is enabled. For these reasons, one of ordinary skill in the art could not look to the Asserted Patent to determine the scope of the claimed invention. 33. Claim 13 is indefinite. Claim 13 recites wherein the receiving and sending of
messages through the secure communication link includes multiple sessions. Claim 13 is indefinite because claim 2, from which claim 13 depends, does not recite any messages being received through the secure communication link. 34. Claim 17 is indefinite. Claim 17 recites wherein the plurality of services
comprises audio, video, or a combination thereof. Claim 17 is indefinite because it cannot be reconciled with the definition previously set forth in claim 15 for the term plurality of services. That is, the scope of claim 17 cannot be ascertained because it cannot be determined if the plurality of services comprises a plurality of communication protocols, a plurality of application programs, multiple sessions, or a combination thereof (claim 15) or whether the plurality of services comprises audio, video or a combination thereof (claim 17). For these reasons, the language employed in claim 17 fails to provide the public with notice of the patentees claimed right to exclude.
33
35.
Claim 21 is indefinite. Claim 21 recites providing an unsecured name associated
with the device. The claim is indefinite because the recited phrase does not specify whether the unsecured name is associated with the first device or the second device. Accordingly, the claim fails to provide the public with notice of the patentees claimed right to exclude. 36. The claims of the Asserted Patent identified below do not comply with the
written description requirements of 35 U.S.C. 112(1), and are therefore invalid. Where such claims are invalid, the claims depending therefrom also are invalid for the same reasons. 37. Claims 1-5, 8, 10-11, 21-29 are invalid for lack of written description. The term
secure name does not appear in the specification and was not part of the original filing of the application that became the 181 patent. The specification fails to set forth sufficient information to convey with reasonable clarity to those skilled in the art that, as of the effective filing date, the inventors were in possession of the full scope of the claimed invention. 38. Claims 2 and 22 are invalid for lack of written description. The term secure
name service does not appear in the patent specification and was not part of the original filing of the application that became the 181 patent. The specification fails to set forth sufficient information to convey with reasonable clarity to those skilled in the art that, as of the effective filing date, the inventors were in possession of the full scope of the claimed invention. 39. Claim 9 is invalid for lack of written description. Claim 9 recites automatically
initiating the secure communication link after it is enabled. Assuming that claim 9 is
34
referring to a system that automatically initiates a secure communication link that is already enabled, the specification of the Asserted Patent fails to disclose, teach, or suggest this feature. The specification of the Asserted Patent would not lead a person having ordinary skill in the art to conclude that the inventors were in possession of a system which automatically initiated a secure communication link that was already enabled. 40. Claim 10 is invalid for lack of written description. Claim 10 calls for receiving a
message containing the network address associated with the secure name through tunneling within the secure communication link. The specification of the Asserted Patent never discloses or suggests an embodiment where the network address associated with the secure name is returned through the secure communication link that is referenced in claim 2. The specification of the Asserted Patent would not lead a person having ordinary skill in the art to conclude that the inventors were in possession of this feature. 41. Claim 24 is invalid for lack of written description. Claim 24 calls for the first
device, i.e., the recipient or target of a secure communication request, obtaining registration of a secure name for the first device. The specification of the Asserted Patent never discloses or suggests an embodiment where the first device registers its own secure name. The specification of the Asserted Patent would not lead a person having ordinary skill in the art to conclude that the inventors were in possession of this feature. 42. Claim 25 is invalid for lack of written description. Claim 25 calls for the first
device, i.e., the recipient or target of a secure communication request, obtaining registration of a secure name for the first device. The specification of the Asserted
35
Patent never discloses or suggests an embodiment where the first device registers its own secure name. The specification of the Asserted Patent would not lead a person having ordinary skill in the art to conclude that the inventors were in possession of this feature. 43. Claim 26 is invalid for lack of written description. Claim 26 calls for the first
device, i.e., the recipient or target of a secure communication request, requesting and obtaining registration of an unsecure name associated with the first device. The specification of the Asserted Patent never discloses or suggests an embodiment where the first device registers its own unsecure name. The specification of the Asserted Patent would not lead a person having ordinary skill in the art to conclude that the inventors were in possession of this feature. Claim 26 also calls for the first device requesting and obtaining registration of a secure name associated with the first device. The specification of the Asserted Patent never discloses or suggests an embodiment where the first device registers its own secure name. The specification of the Asserted Patent would not lead a person having ordinary skill in the art to conclude that the inventors were in possession of this feature. 44. Claim 27 is invalid for lack of written description. Claim 27 calls for the first
device, i.e., the recipient or target of a secure communication request, requesting and obtaining registration of an unsecure name associated with the first device. The specification of the Asserted Patent never discloses or suggests an embodiment where the first device registers its own unsecure name. The specification of the Asserted Patent would not lead a person having ordinary skill in the art to conclude that the inventors were in possession of this feature. Claim 27 also calls for the first device requesting and obtaining registration of a secure name associated with the first device. The
36
specification of the Asserted Patent never discloses or suggests an embodiment where the first device registers its own secure name. The specification of the Asserted Patent would not lead a person having ordinary skill in the art to conclude that the inventors were in possession of this feature. 45. Claims 1 and 29 of the 181 patent are invalid, pursuant to 35 U.S.C. 112, para.
2, for improper combination of two statutory classes of invention, methods and articles of manufacture. 46. The claims of the 181 patent are invalid pursuant to 35 U.S.C. 101 for failure to
recite patent-eligible subject matter. 47. The 181 patent is invalid as a result of derivation. Under 35 U.S.C. 102(f), a
patent may be found invalid under the principle of derivation if the named inventor did not himself invent the subject matter sought to be patented, but rather derived that subject matter from the invention of another. 48. Dr. Schulzrinne is the author of RFC 2543, the Session Initiation Protocol (SIP),
which was publicly available as of March 1999. Several of the named inventors of the 181 patent met with Dr. Schulzrinne in September 1999 to discuss collaborating on a project concerning the setup of virtual private networks over the Internet. Following that meeting, three of the named inventors - Edmund Colby Munger, Victor Larson, and Robert Short III allegedly first conceived of several of the inventions claimed in the 181 patent. The remaining inventions were allegedly conceived thereafter. 49. RFC 2543 (SIP) - which Dr. Schulzrinne co-authored - and Dr. Schulzrinnes
May 21, 1999 SIP Presentation render the independent claims of the 181 patent invalid as anticipated under 35 U.S.C. 102 and/or obvious under 35 U.S.C. 103. Therefore
37
the independent claims of the 181 patent are invalid under 35 U.S.C. 102(f) because Dr. Schulzrinne conceived of the inventions of the 181 patent and communicated those inventions to the named inventors of the 181 patent prior to the named inventors alleged conception. Third Defense: Lack of Domestic Industry 50. Complainants cannot establish the existence of a domestic industry for the 181
patent as required by 19 U.S.C. 1337(a)(2) and defined by 19 U.S.C. 1337(a)(3). Additionally, Complainants cannot establish that a domestic industry under 19 U.S.C. 1337(a)(2) and (a)(3) is in the process of being established. Specifically, on information and belief, Complainants cannot establish that they (or their licensees) have made significant investment in plant, equipment, labor, or capital relating to articles protected by at least one claim of the 181 patent. Furthermore, Complainants cannot establish a substantial investment in licensing, research and development, or other qualifying activities related to any of the 181 patent. Fourth Defense: No Unfair Act 51. Apple has committed no unfair act. Fifth Defense: Sales to the United States Government 52. Complainants claims against Apple, to the extent they concern importations for,
and sales to, the United States government, are outside the scope of this proceeding. Sixth Defense: Prosecution History Estoppel 53. Upon information and belief, VirnetX is estopped by virtue of the cancellations,
amendments, representations and concessions made to the Patent and Trademark Office during the pendency of the applications for the 181 patent and for related patents and
38
applications, from construing any asserted claim to have been infringed by any Apple product. Seventh Defense: Unenforceability 54. The 181 patent is unenforceable due to inequitable conduct committed by
VirnetX, its prosecution counsel, including, but not limited to, Toby H. Kusmer, Hasan M. Rashid, Atabak R. Royaee, and/or others substantively involved in the prosecution of the 181 patent (collectively VirnetX). The particular circumstances constituting the inequitable conduct and the factual bases for this defense are detailed in the paragraphs below. 55. The 181 patent is one of several patents belonging to a patent family that
includes provisional application Nos. 60/106,261 and 60/137,704. The 181 patent is a continuation of U.S. Patent No. 7,188,180 (the 180 patent). The specifications and figures of the 181 and 180 patents are substantially the same. 56. The 180 patent was previously litigated by VirnetX against Microsoft
Corporation in the Eastern District of Texas, Tyler Division, Case No. 6:07-cv-00080LED (the Microsoft Litigation). During the Microsoft Litigation, Microsoft contended that the asserted claims of the 180 patent were anticipated and/or rendered obvious by a publication related to a VPN computer system known as Aventail, specifically the Aventail Connect v3.1/2.6 Administrators Guide (hereafter Aventail). 57. Aventail was considered by the U.S. Patent and Trademark Office (Patent
Office) to be highly material to the patentability of the application that ultimately led to the 181 patent. During prosecution of the 181 patent, the examiner rejected all pending claims in the application in view of Aventail. Specifically, in an Office Action dated December 7, 2010, the examiner found that: 39
Claims 2-30 are rejected under 35 U.S.C. 102(b) as being anticipated by Aventail connect v3.1/v2.6 administrators Guide References (hereafter Aventail). 58. In an effort to overcome the December 7, 2010, rejections, VirnetX made material
misrepresentations to the Patent Office, deceptively stating that Aventail was not prior art because there was no evidence of a publication date. See e.g., Response and Request for Reconsideration, June 6, 2011. As one example, VirnetX made the following false and misleading statement concerning the trial transcript from the Microsoft Litigation: The trial transcript from the Microsoft case does not discuss anything about a publication date for the Aventail reference. Exhibit F. While the trial transcript references the Aventail product, it does not mention anything about a publication date. See e.g., Response and Request for Reconsideration, June 6, 2011. VirnetXs erroneous statements concerning Aventail and its publication date were made to the Patent Office notwithstanding that VirnetX was aware of contrary testimony and evidence presented during the Microsoft Litigation. The contrary testimony and evidence includes, among other things, depositions of witnesses and the exhibits used therein. For example, Chris Hopen, co-founder of Aventail Corp. and Chief Technical Officer from 1996 to 2007, testified that the Aventail Administrators Guide was distributed to end customers as part of materials packaged with the Aventail ExtraNet Center product: QUESTION: I'd like to mark our first exhibit. I guess we'll mark it Hopen Exhibit 1. It's labeled AVEN 1 through AVEN 124. And I'd like to ask you, Mr. Hopen, to take a look at Hopen Exhibit 1 and let me know if you recognize what that document is. ANSWER: Yes. This is -- this is the Administrator's Guide that we shipped with the Aventail Connect and Aventail ExtraNet Center product. QUESTION: How was the -- well, was the Aventail Connect Administrator's Guide distributed to anyone?
40
ANSWER: It was part of the product distribution that we would distribute to any prospect or -- or end customer. See, e.g., VirnetX v. Microsoft, Dkt. No. 398, pp. 22-23. Mr. Hopen then testified that the Aventail ExtraNet Center product went on-sale in June 1999: QUESTION: And if you look at the second sentence there, you see where it says: Aventail ExtraNet Center 3.1 will be available in June, price starting the $7,995? ANSWER: Yes. QUESTION: And to the best of your knowledge, that's when Aventail started to offer to sell Aventail ExtraNet Center 3.1? ANSWER: Yes. See id. at 27. VirnetX sought to conceal the true publication date of Aventail from the Patent Office by asserting false and misleading representations that the trial transcript does not discuss anything about a publication date for the Aventail reference and by deceptively burying Mr. Hopens testimony in voluminous prior art submissions and string citations. See e.g., Response and Request for Reconsideration, June 6, 2011 (The trial transcript from the Microsoft case does not discuss anything about a publication date for the Aventail reference. See e.g. Exhibit F-2, pp. 112, 146; Exhibit F-3, pp. 115, 119-20; Exhibit F-10 pp. 21-40; Exhibit F-11, pp. 21-32, 120-150.). 59. VirnetXs intentional concealment and misconduct with respect to Aventail is
further evidenced by its failure to submit Mr. Hopens deposition transcript to the Patent Office. Mr. Hopens deposition was taken in the Microsoft Litigation on July 29, 2009, more than two years prior to the close of prosecution of the 181 patent. Even though Mr. Hopens deposition testimony, along with the deposition exhibits, unequivocally demonstrates the public availability of Aventail as early as June 1999, VirnetX did not disclose Mr. Hopens deposition transcript to the Patent Office. Instead, VirnetX
41
deliberately maneuvered to obfuscate the public availability of the Aventail Administrators Guide by mischaracterizing the June 1999 publication date as merely unsubstantiated allegations by defendants in a lawsuit: As an aside, the Applicant notes that the present assignee (VirnetX Inc.) and its prosecution counsel have been accused of inequitable conduct during the 269 Reexam in a litigation proceeding, VirnetX Inc. v. Cisco systems, Inc., et al., United States District Court for The Eastern District of Texas, Tyler Division, Case No. 6:10-cv-417. In its Original Answer, Affirmative Defenses, and Counterclaims to the VirnetXs Original Complaint, the Defendant Apple Inc. (Apple) alleges that evidence of Aventails publication as early as June 1999 was presented in a different trial involving Microsoft Corporation. Exhibit C at 2 (p.14). Apple further alleges that VirnetX was aware that the Aventail reference may have been published at least as early as June 1999. Exhibit C at 23. Defendants Aastra Technologies Limited and Aastra USA Inc. (Aastra) have made similar allegations in their responsive pleadings. Exhibit D at 86 (p. 19); Exhibit E at 86 (p. 19). Thus, although an allegation of knowledge has been made by a third party, the applicants, the assignee and applicants prosecution counsel have not had and do not have such knowledge. See Response and Request for Reconsideration, June 7, 2011. 60. VirnetXs statements concerning the publication date of Aventail were false and
misleading. At the time of filing the June 7, 2011 Response and Request for Reconsideration with the Patent Office, VirnetX was in possession of, and fully aware of, Mr. Hopens testimony and corroborating documents, conclusively establishing the public availability of both the Aventail ExtraNet Center 3.1 product and the Aventail Administrators Guide as early as June 1999. See Response and Request for Reconsideration, June 7, 2011, Ex. F-11 pp. 22-23, 27. Yet, VirnetX purposely misled the Patent Office to give the false impression that such evidence did not exist. See e.g., Response and Request for Reconsideration, June 6, 2011 (The trial transcript from the Microsoft trial does not discuss anything about a publication date for the Aventail reference.). 42
61.
As demonstrated above, while prosecuting the 181 patent, and certainly as early
as June 7, 2011, VirnetX knew that defendants Apple and Aastra were alleging inequitable conduct; specifically that VirnetX was aware that Aventail has been published as early as June 1999 and failed to disclose such information to the Patent Office during the re-examination of one of its patents (the 269 Reexam). Yet, VirnetX continued to prosecute the 181 patent without caution or any regard to the accuracy of defendants allegations with its repetitive and unequivocal assertions that Aventail is not prior art. See Response and Request for Reconsideration, June 7, 2011. Rather than point the Patent Office to evidence contrary to its position, VirnetX continued to mislead the Patent Office with false assertions that no evidence existed concerning Aventails publication date. See e.g., Response and Request for Reconsideration, June 6, 2011 (To the contrary, the applicants are unaware of any evidence establishing Aventails publication date, and specifically are unaware of the June 1999 publication data alleged by Apple and Aastra in their pleadings.) 62. VirnetX engaged in additional misdirection concerning the publication date of the
Aventail Administrators Guide. VirnetX did not submit the deposition transcript of Aventails co-founder and Chief Technology Officer, Chris Hopen, to the Patent Office. Mr. Hopens deposition transcript, along with the exhibits thereto, conclusively establishes the publication date of Aventail as early as June 1999. Rather than submit Mr. Hopens deposition transcript, VirnetX only disclosed the deposition transcript of Gary Tomlinson, a former employee of Aventail. Mr. Tomlinsons employment at Aventail began in February 2003. As a result, Mr. Tomlinson was less familiar with the business practices of Aventail in 1998-1999. By focusing attention on Mr. Tomlinsons deposition
43
transcript, VirnetX was able to mislead the Patent Office and convey the false impression that the publication date of the Aventail Administrators Guide could not be conclusively determined: The deposition of Gary Tomlinson (former employee of Aventail) taken during discovery prior to the Microsoft trial is inconclusive, at best. Exhibit H at pp. 3336. Thus, although an allegation of knowledge has been made by a third party, the applicants, the assignee and applicants prosecution counsel have not had and do not have such knowledge. See Response and Request for Reconsideration, June 7, 2011. 63. Despite knowing that Aventail ExtraNet Center v3.1 went on sale in June 1999,
and that the Aventail Administrators Guide was distributed with this product, VirnetX made material misrepresentations to the Patent Office that Aventail was not prior art and that there was no evidence of its publication date. For example, during prosecution, VirnetX stated: As a preliminary matter, Aventail has not been shown to be prior art to all pending claims in the present application, including claim 2. In fact, Aventail is not prior art. To the contrary, the applicants are unaware of evidence establishing Aventails publication date, and specifically are unaware of the June 1999 publication date alleged by Apple and Astra in their pleadings. The trial transcript from the Microsoft trial transcript does not discuss anything about a publication date for the Aventail reference. See Response and Request for Reconsideration, June 7, 2011 (emphasis added). VirnetXs representations to the Patent Office concerning Aventail were false and misleading. 64. Moreover, upon information and belief, during the 181 patent prosecution,
VirnetX was aware of a Seattle News Wire article dated August 9, 1999 that shows that Aventail ExtraNet Center products were being shipped to customers as of the date of the article, i.e., August 9, 1999. Accordingly, VirnetXs statements before the Patent Office
44
that it was unaware of any evidence of publication date were material, misleading, and inaccurate. 65. Additionally, instead of directing the examiner to the sale, distribution, and
publication evidence relating to Aventail, VirnetX intentionally buried material information related to Aventail, such as the trial transcript from the Microsoft Litigation, in numerous boxes of documents and repetitive submissions to the Patent Office. 66. During prosecution of the 181 patent, VirnetX intentionally submitted an
unmanageable volume of information to the U.S. Patent and Trademark Office (USPTO) related to, among other things, the Microsoft Litigation. In one particular instance, VirnetX provided the Patent Office with 6 Boxes of cited references B1000-B1002 and C998-C1226. See Transmittal Letter, May 4, 2009. In addition to the voluminous May 4, 2009, disclosure, VirnetX continued to endeavor to overwhelm the examiner in charge of the 181 patent prosecution with further disclosures dated June 1, 2009, September 8, 2009, October 6, 2009, November 6, 2009, December 14, 2009, April 2, 2010, October 11, 2010, February 18, 2011, March 29, 2011, and July 11, 2011. 67. Early in the prosecution of the 181 patent, the Patent Office indicated to VirnetX
that the volume of information then submitted for consideration was excessive and unmanageable. Specifically, in response to the size of VirnetXs May 4, 2009, submission, the examiner sought assistance from the party most knowledgeable about the contents of the information [submitted for consideration]: The information disclosure statement filed 5/04/09 (there is a least 102 pages of just a list of the references), 11/13/07 and 12/16/08 fails to comply with 37 CFR 1.98(a)(3) because it does not include a concise explanation of the relevance, as it is presently understood by the individual designated in 37 CFR 1.56(c) most knowledgeable about the contents of
45
the information. It has been placed in the application file, but the information referred to therein has not been considered. See Non-Final Rejection, June 8, 2009 (emphasis original). Despite VirnetXs superior knowledge and familiarity with the materials submitted to the Patent Office, VirnetX declined to provide the Patent Office with any assistance in its consideration of the boxes of information submitted: The Applicant respectfully submits that, to the best of Applicants knowledge, these Information Disclosure Statements list references written in English language which are outside the purview of 1.98(a)(3). Accordingly, because the references are in the English language, the Applicant respectfully requests consideration of these references in the Examiners review of the subject application. See Amendment A, December 8, 2009. Indeed, rather than provide assistance, VirnetX continued to dump information on the Patent Office without providing any meaningful guidance or assistance to the patent examiner. In doing so, VirnetX was successful in effectively concealing from the Patent Office material information relevant to the prosecution of the 181 patent, including material from the Microsoft Litigation most pertinent to Aventail. 68. Thus, VirnetX concealed and misrepresented material information with an intent
to deceive the Patent Office. In view of this course of conduct, VirnetX engaged in inequitable conduct before the Patent Office, which renders the 181 patent unenforceable. 69. VirnetX engaged in inequitable conduct in connection with Aventail Connect
Version 3.1. For example, evidence submitted during the Microsoft Litigation established that Aventail Connect Version 3.1 was a component of the Aventail ExtraNet Center product: QUESTION: What was Aventail Connect Version 3.1? 46
ANSWER: Aventail connect 3.1 was a piece of software that would run on an end user's PC that would provide additional secure communications services to applications running on that PC. It would -- it was a client in a pair of a client/server solutions that we sold. So it was one component of what we referred to as Aventail ExtraNet Center. And so Aventail Connect was the component that was the client-side software that would be distributed and run on individual users' systems. QUESTION: What was the name of the other component of the -- of the Aventail ExtraNet Center? ANSWER: Yeah. So, typically, ExtraNet Center was sort of the umbrella name, if you will, for the entire product. See, e.g., VirnetX v. Microsoft, Dkt. No. 398, p. 21. 70. Mr. Hopen testified to three separate public uses, demonstrations, and/or
knowledge of the Aventail ExtraNet Center product on or prior to June 9, 1999, including beta testing: QUESTION: Okay. Did Aventail ever give betas of Aventail Connect 3.1 to the press for evaluation? ANSWER: Yes. Yes. QUESTION: Can you take a look, please, at Hopen Exhibit 2, and let me know what it is? ANSWER: This looks like a Network Computing article that was written to outline features -- new features and benefits of the Aventail ExtraNet Center solution. QUESTION: Can you go down to the fourth paragraph? Do you see the one that starts Network Computing? ANSWER: Yes. QUESTION: So going through that sentence, it says: Network computing conducted an exclusive test of AEC 3.1 ANSWER: Yes. QUESTION: -- and Connect 3.1 betas ANSWER: Yes.
47
QUESTION: -- in our real-world labs (R) at Syracuse University. ANSWER: Yes. QUESTION: Do you see that? ANSWER: Yes. See id. at 25. The Network Computing article (Exhibit 2), referenced in the testimony above, is dated June 28, 1999, and discloses that Aventail ExtraNet Center, was publicly used by Mike Fratto, a reporter for Network Computing, on or before June 28, 1999. For example, in the Network Computing article, Mr. Fratto reported that: Network Computing conducted an exclusive test of [Aventail ExtraNet Center] 3.1 and Connect 3.1 betas in our Real-World Labs at Syracuse University. See Network Computing, Aventail ExtraNet Center 3.1: Security With Sold Management, June 28, 1999. 71. Mr. Hopen also testified to a public demonstration of the Aventail ExtraNet
Center product at the Las Vegas Interop trade show in May 1999: QUESTION: Was there ever a point in time that Aventail Connect 3.1 was demonstrated at either trade shows or conferences? ANSWER: Yes. Yeah, that was commonplace. QUESTION: Let me mark another document as Hopen Exhibit 3. Mr. Hopen, if you will, please, take a look at Hopen Exhibit 3 and let me know if you recognize what it is. ANSWER: This looks like a press release, basically, that we would put out there saying ahead of time, prior to -- looks like this show was the Networld+Interop show. We would put that out prior so that people would see it, and if they were going to the show, that they would know that we were going to be there and stop by and see whatever the latest and greatest was. QUESTION: Did you go to these Interop shows? ANSWER: Yes. Yes.
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QUESTION: Do you see underneath there it says: Live demonstrations at Aventail ExtraNet Center will be featured at NetWorld+Interop at the Las Vegas Convention Center from May 11 through 13th at the Aventail Booth No. 953 and at the Extranet hot spot Booth No. 8469? ANSWER: Yes. QUESTION: Do you -- do you recall whether, in fact, there was a live demonstration of Aventail ExtraNet Center? ANSWER: Yeah. I believe I was at this actual event. We had this running both -there was an Aventail booth, which is, you know, a traditional kind of corporate booth that you would see at any trade show. We would have workstations out front with salespeople standing by those workstations. Typically, they would show the Connect client itself in operation, and then they would also show like the Aventail ExtraNet Center Management console and -- and, you know, the user interface and those kinds of things and talk with customers about how they would use it, how they would deploy it, pricing, I mean, you know, any question under the sun. The hot spot booth was more of a multi-vendor area where people who had different VPN, Extranet kind of solutions could come and customers could see them side by side and kind of compare and contrast them. See id. at 26-27. 72. The date of the press release, referenced in the testimony above, was May 12,
1999. VirnetX, despite having knowledge that the Aventail ExtraNet Center product was in beta release, on-sale, publicly tested and reported on by Mr. Fratto, and demonstrated live at the Interop trade show on and before August 9, 1999, misrepresented to the Patent Office that Aventail was not prior art. Moreover, evidence related to these highly material activities was buried in boxes and boxes of information submitted to the Patent Office, effectively rendering it concealed from consideration. 73. Thus, with respect to at least these activities, VirnetX concealed and
misrepresented material information with an intent to deceive the Patent Office. In view of this course of conduct, VirnetX engaged in inequitable conduct before the Patent Office, which renders the 181 patent unenforceable.
49
74.
In addition, during prosecution of the 181 patent, VirnetX made false
representations to the Patent Office that if it obtained any information regarding the publication date of Aventail, it would notify the Patent Office: To be sure, the Applicants will notify the USPTO immediately if it becomes aware of evidence of Aventails publication date. See Response and Request for Reconsideration, June 7, 2011. Notwithstanding these assurances, VirnetX did possess information regarding the publication date of Aventail, but chose to withhold it from the Patent Office. 75. On July 11, 2011, Apple served notice of the filing of a reexamination of U.S.
Patent No. 6,502,135 (the 135 patent). The 135 patent and the 181 patent are part of the same patent family. As part of the reexamination request, Apple provided the Patent Office with declarations that further verified the publication date of Aventail to be as early as April 1999, but no later than June 1999. Specifically, attached to the reexamination request were the declarations of Chris A. Hopen, former CTO and Vice President of Aventail, James Chester, former IBM Vice President for Strategy and Strategic Initiatives, and Michael Fratto, Editor of Network Computer magazine. 76. In his declaration, Mr. Hopen declared upon penalty of perjury that the Aventail
product (i.e., Aventail Extranet Center v3.1) and the Aventail Administrators Guide were publicly distributed in April 1999, but no later than June 1999: 17. Aventail announced version 3.1 of the Aventail Extranet Center product in May of 1999. This version of AEC included Aventail Extranet Serve v3.1 and Aventail Connect v3.1/v2.6. Exhibit G is a May26, 1999 Aventail press release announcing the AEC v3.1 product. Exhibit H is a copy of an August 9, 1999 Aventail press release reporting that Aventail had begun shipping the AEC v3.1 product to customers. 18. I recall that Aventail began distributing the AEC v3.1 product to its larger customers in June and July of 1999. Two such customers that I recall having
50
received the AEC v3.1 product in June or July of 1999 were IBM and Morgan Stanley. 19. Exhibit I is a copy of the Administrators Guide for the Aventail Connect v3.1/v2.6 product that was distributed with the Aventail Connect V3.1/v2.6 client software. This document was distributed without any confidentiality restrictions. See Hopen Declaration, May 27, 2011. 77. In his declaration, Mr. Chester declared under penalty of perjury that in June of
1999 IBM received installations discs for the Aventail Connect v3.1/v2.6 client software, which included the Aventail Connect v3.1/2.6 Administrators Guide: 21. I recall receiving the AEC v3.1 product no later than the end of June of 1999. The product I received included the installation discs for the Aventail Connect v3.1/2.6 client software and v3.1 of the Aventail Extranet Server software. It also included printed manuals for these products, including the Aventail Connect v3.1/2.6 Administrators Guide, a copy of which is shown in Exhibit D. 22. At the time I received Exhibit D, I was under no obligation to keep this document secret or to not distribute it to others. Again, as was the case with earlier Aventail products, we distributed copies of the AutoSOCKS Administrators Guide along with other printed materials that came with the Aventail AutoSOCKS/VPN Server to IBM clients to whom we deployed VEPN solutions, and to IBM employees that were using Aventail Connect v3.1/2.6 client. By the summer of 1999, this product was routinely packaged with IBM offerings in all business sectors worldwide. Competitors were deploying this product as well in the same timeframe. See Chester Declaration, June 30, 2011. 78. In his declaration, Mr. Fratto declared under penalty of perjury that in April of
1999 he received installations discs for the Aventail Connect v3.1/v2.6 client software, along with product documentation that included the Aventail Connect v3.1/2.6 Administrators Guide: 15. Exhibit J is a copy of the Aventail Connect v3.1/v26 Administrators Guide (Aventail Connect v3.1). Exhibit J was distributed with the Aventail Extranet Center (AEC) v3.1 product. 16. Aventail announced that they had begun shipping the AEC v3.1 product in August of 1999. See, Exhibit K (Aventail Ships Directory-enabled Extranet
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Solution; Aventail Extranet Center v3.1 available at www.aventail.com, Business Wire (August 9, 1999)). 17. I recall receiving a pre-release copy of the AEC v3.1 product sometime during April of 1999. The AEC v3.1 product I received included installation media for the Aventail Extranet Server, Aventail Connect and Aventail Management Server and Config Tool software packages. It also included printed administrator guides for the three software packages. 18. The AEC v3.1 product and the Aventail Connect v3.1 Administrators Guide that I received in April of 1999 was not marked as being confidential, no restrictions were imposed on my use of it or the information in it. See Fratto Declaration, July 7, 2011. 79. Concomitant to the filing of Apples 135 patent reexamination request, a copy of
the request, including the Hopen, Chester, and Fratto declarations, further verifying the publication date of Aventail, were served upon counsel for VirnetX. The Hopen, Chester, and Fratto declarations were served upon counsel for VirnetX a second time with the filing of Apples 151 patent re-examination request, on July 25, 2011. After having possession of the declarations as of mid-July 2011, VirnetX failed to disclose this material information to the Patent Office before the November 2011 issuance date of the 181 patent. On information and belief, VirnetX purposefully withheld the highly material declarations from the Patent Office to gain allowance of the 181 patent. 80. Thus, VirnetX failed to disclose material information and made related
misrepresentations to the Patent Office with an intent to deceive. In view of this course of conduct, VirnetX engaged in inequitable conduct before the Patent Office, which renders the 181 patent unenforceable. 81. VirnetXs misleading conduct toward the Patent Office and purposeful
withholding of material information concerning the public availability of the Aventail product (e.g., Aventail ExtraNet Center v3.1) and the Aventail Administrators Guide,
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has been repetitive and ongoing. In December 2009, Microsoft filed a reexamination request with the Patent Office requesting reexamination of claims 1-10 and 12 of U.S. Patent No. 6,502,135 (the 135 patent). The 135 patent is related to the 181 patent. On or about December 31, 2009, the Patent Office ordered reexamination of claims 1-10 and 12 of the 135 patent, finding, in part, that Aventail raised a substantial new question of patentability of all of the requested claims of the 135 patent. On or about January 15, 2010, the Patent Office issued a non-final action rejecting claims 1, 3, 4, 6-10, and 12 of the 135 patent as being anticipated by Aventail. 82. On or about February 22, 2010, VirnetX filed a petition to extend its deadline for
responding to the office action, pointing out, in part, that it needed additional time to investigate whether Aventail was proper prior art, including investigating the dates of conception and reduction to practice of the inventions claimed in the 135 patent as well as diligence there between. The petition also cited as a basis for extension that the Microsoft Litigation was causing a significant drain on VirnetXs resources. Moreover, the petition stated that the extension would likely also permit consideration of any court conclusions regarding the claims presently under reexamination. The petition was filed by Toby Kusmer of McDermott Will & Emery, the same firm that represented VirnetX in the Microsoft Litigation until 2009. The Patent Office responded on or about February 24, 2010, granting an extension, setting the deadline for response as April 15, 2010. 83. On or about March 8, 2010, trial in the Microsoft Litigation commenced. During
trial, one or more witnesses for VirnetX, including inventor Edward Munger, testified that the claims of the 135 patent were conceived no earlier than three months after September 23, 1999, placing the date of conception for claims 1-10 and 12 on or about
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December 23, 1999. At trial, Microsoft alleged, in part, that claims 1-10 and 12 of the 135 patent were anticipated by Aventail. Microsoft presented evidence, including testimony from Aventails co-founder Chris Hopen, that Aventail was publicly available at least as early as June 1999. Based on a review of the trial record, VirnetX did not dispute the publication date of Aventail. Therefore, at least as of March 16, 2010, VirnetX was aware that Aventail was published at least as early June 1999, which is prior to the filing date of the application that matured into the 135 patent, and also, the earliest conception date alleged by the inventors of the 135 patent. Further, on information and belief, on or about July 29, 2009, VirnetX was aware of Chris Hopens deposition testimony conclusively establishing that Aventail was publicly available as early as June 1999. 84. VirnetX never told the Patent Office that Aventail was in fact publicly available
as early as June 1999. Instead, once reexamination of the 135 patent resumed, VirnetX responded to the pending office action rejection, in part, by asserting that Aventail should not be considered prior art because no evidence had been submitted by Microsoft that established the actual publication date: B. Aventail has not been shown to be prior art under 102(a) The Office Action and the Request both fail to demonstrate the actual publication date of Aventail necessary to establish a prima facie showing that Aventail is prior art. Both the Office Action and the Request assert that Aventail was published between 1996 and 1999 without any stated support. Request at 5; Office Action at 2. The Patent Owner can only presume that this assertion arises from the copyright date range printed on the face of the reference. See Aventail at i. This copyright date range is not, however, the publication date of Aventail. Thus, the Patent Owner respectfully submits that the Office Action has failed to establish that Aventail is prior art to the rejected claims. Accordingly, the Patent Owner respectfully requests that the 102(a) rejection over Aventail be withdrawn, and the rejected claims 1 and 10, as well as claims 3, 4, 6-9 and 12 depending thereupon, be confirmed. 54
See Response to Office Action in Reexamination, 95/001,269, April 15, 2010. Similar misleading arguments were advanced by VirnetX during the reexamination of U.S. Patent No. 7,188,180 (the 180 patent), which is the parent of the 181 patent. For example, during the reexamination of the 180 patent VirnetX argued as follows: The Patent Owner respectfully traverses this rejection because (i) Aventail has not been shown to be prior art under 102(a) . Further, the closeness of proximity of the alleged publication date of Aventail to the April 26, 2000 priority date of the 180 Patent raises further doubt as to the availability of Aventail as prior art. Suppose the relied upon sections of the Aventail reference were created on December 31, 1999, and the copyright date range accordingly amended to read 1996-1999. Under these circumstances, it is possible that the document was not disseminated until after the filing date of the 180 Patent, a mere four months later. Under these circumstances, Aventail clearly would not be eligible to be relied upon as prior art to the 180 patent. Thus, the Patent Owner respectfully submits that the Office Action has failed to establish that Aventail is prior art and requests all rejections based on Aventail be withdrawn. See Response to Office Action in Reexamination, 95/001,270, April 19, 2010. 85. VirnetXs arguments were misleading and contrary to information learned and
evidence presented during the Microsoft Litigation. VirnetX did not provide the result of any investigation it may have made with respect to the publication date of the Aventail reference or the dates of conception or reduction to practice of the 135 patent that it indicated it would make in its petition for an extension of time. Significantly, in both reexaminations, VirnetX did not disclose any information that it learned from the Microsoft Litigation concerning the publication date of Aventail, including the deposition testimony of Chris Hopen, and exhibits thereto, that conclusively establish the public availability of Aventail as early as June 1999.
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86.
As a result of VirnetXs misleading arguments and withholding of information
related to the publication of Aventail, the Patent Office withdrew its rejections based on Aventail:
Patent owner argues that the rejection of claims 1, 3, 4, 6-10, and 12 as anticipated by Aventail should be withdrawn because Aventail is not prior art to the patent under reexamination, US Patent No. 6,502,135 (the 135 patent). Specifically, Patent Owner argued that the request and the 1/15/2010 office action did not show that Aventail was published prior to the priority date of the '135 patent. The request asserts that Aventail was published between 1996 and 1999. This assertion was based on the document's copyright date. The request did not set forth any further evidence of the date of publication. A search was conducted to determine the publication date of the Aventail reference. However, no evidence was found that established the publication date. Accordingly, Aventail cannot be relied upon as prior art to the 135 patent and all rejections based upon Aventail are hereby withdrawn and not adopted. See Transmittal of Communication to Third Party Requester Inter Partes Reexamination, 95/001,269, June 16, 2010. 87. VirnetXs misconduct before the Patent Office, including its withholding of
information related to the public availability of Aventail continued into the prosecution of the 181 patent. Indeed, VirnetX relied on the withholding of Aventail related information during the reexaminations of the 135 patent and the 180 patent, to mislead the patent examiner during the prosecution of the 181 patent and artificially bolster arguments to discredit Aventail: The present application claims priority to U.S. Patent Nos. 6,502,135 (hereinafter the 135 patent) and 7,188,180 (hereinafter the 180 patent). The 135 and 180 Patents were subject to inter partes reexamination proceedings, Control Nos. 95/001,269 (hereinafter the 269 Reexam) and 95/001,270 (hereinafter the 270 Reexam), respectively (collectively Reexams). In both Reexams, the USPTO determined that Aventail cannot be relied upon as prior art to the [patents]. See Reexamination Control No. 95/001,269, Action Closing Prosecution, June 16, 2010, p. 3 (Exhibit A); Reexamination Control No. 95/001,270, Action Closing Prosecution, June 16, 2010, p 3 (Exhibit B). This
56
sound determination was based on the fact that no evidence was found to establish Aventails publication date. See Response and Request for Reconsideration, June 7, 2011. These misleading arguments were only possible because VirnetX withheld information concerning the public availability of Aventail from the Patent Office during the reexaminations of the 135 patent and the 180 patent. VirnetX relied on this ill-gotten advantage to mislead the Patent Office during the prosecution of the 181 patent. In view of this course of conduct, VirnetX engaged in inequitable conduct before the Patent Office, which renders the 181 patent unenforceable. 88. VirnetX has continued a pattern of inconsistent statements and misleading
conduct. For example, in connection with the Markman hearing and briefing in VirnetX v. Cisco Systems, Inc., et al., VirnetX made the following arguments concerning the meaning of the term domain name service system: 1. VirnetX argued that, as the claim defines the requirements for the term, no construction is necessary. Alternatively, VirnetX proposed that the term be construed to be a computer system that includes a domain name service (DNS). VirnetX argued that this alternative, proposed construction was a straightforward adaptation of the Courts prior construction of domain name service" (which the court had construed in the Mircosoft litigation as a conventional DNS, i.e., a lookup service that returns an IP address for a requested domain name). 2. VirnetX further argued that the Defendants proposed construction would require every domain name service system to have the ability to differentiate between, and respond to, both standard and secure top-level domain names. 3. VirnetX complained that Defendants assumed, without any intrinsic support, that the word system must connote an extra something. 4. VirnetX stated that the domain name service system holds a list of domain names and IP addresses.
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89.
During the reexamination of the 504 patent, VirnetX responded to the examiners
rejection of all claims in the 504 patent by making the following statements concerning the claimed domain name service system: 1. [The domain name service system of the '504 patent is] a novel, specialized DNS server [that] receives a traditional DNS request, and the DNS server automatically facilitates the establishment of a secure communication link between a target node and a user. 2. This specialized DNS server is different from a conventional DNS server known at the time of the invention for at least the reason that the specialized DNS server supports the establishment of a secure communication link beyond merely [returning] a requested IP address or public key. 3. [The domain name service system of the '504 patent] determines whether the target site is a secure site. 4. [The domain name service system of the '504 patent] determines whether the target site is a secure site. If access to a secure site has been requested, [it] determines whether the computer 2601 is authorized to access the site. 5. [The domain name service system of the '504 patent] transmits a message to gatekeeper 2603 to facilitate the creation of a VPN link.... See Patent Owner's Response to non-Final OA ('504 Re-exam), pp. 3-4. 90. In each of the six items above, VirnetX told the patent office that the domain
name service system of the 504 patent does something extra or that it, in fact, DOES differentiate between secure and unsecure sites, contrary to what argued during Markman before the district court. 91. Additionally, VirnetX pointed the examiner to Figures 26 and 27 and,
specifically, to the DNS proxy server embodiment, which is claimed in the 135 patent, and told the examiner that the DNS proxy server embodiment is an example of the domain name service system of the 504 patent. The DNS proxy embodiment determines whether the DNS request is requesting access to a secure website and does NOT store IP addresses, contrary to VirnetXs argument to the district court. Id. at 3-4.
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Moreover, VirnetX failed to alert the examiner that it had offered and obtained a DIFFERENT construction of DNS proxy server than it offered and obtained for the domain name service system from the district court, indicating that the two are not the same. VirnetX also failed to point the examiner to Figure 33 and the SDNS embodiment as an embodiment of the domain name service system, like it pointed the district court. 92. VirnetX made equally inconsistent statements with respect to the term
indication, which appears in each independent claim of the 504 patent. VirnetX told the district court that the indication could be as simple as the domain name service system responding to the software modules that initiated the query to say we are good to go and have our secure communication now. See Markman Transcript (draft version), p. 105. VirnetX told the patent office that, in order for an indication to be the indication, it must provide the capabilities of the DNS server; otherwise, it is not an indication. See, e.g., VirnetX Re-exam Response, pp. 33, 37, 53, 55, 57. 93. VirnetX then asserted in the 818 Investigation that secure name in the 181
patent means an authenticated name that can be resolved by a secure name service and be used to establish a secure communication link. If indeed VirnetX believes this, then VirnetX failed to fully disclose to the patent office RFC 2535. RFC 2535 authenticates names stored in the public Internet DNS system and distributes public keys that were used to establish VPN links. See, e.g., 181 patent at 39:14-22 (admitting RFC 2535 teaches distributing public keys used to establish VPNs). 94. RFC 2535 teaches resolution of authenticated names. See, e.g., RFC 2535 at 4, 7,
and 17. VirnetXs failure to fully disclose to the examiner a highly relevant prior art
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publication and failing to explain its significance mislead the patent office as to its relevance. Eighth Defense: Other Defenses 95. Apple further reserves the right to amend its Response to include other affirmative
defenses that Apple may learn of during the course of this Investigation. V. RELIEF REQUESTED
Wherefore, BY REASON OF THE FOREGOING, Apple requests that the ITC: (a) find that Apple has not violated Section 337 and terminate this Investigation; (b) find that Apples products should not be subject to an exclusion or cease and desist order; (c) find that Complainants demands for relief are barred under 19 U.S.C. 1337(d)(1), (f)(1) and (g)(1) because of the reliefs effect upon the public health and welfare, competitive conditions in the United States economy, the production of like or directly competitive articles in the United States, and United States consumers; (d) impose such sanctions upon Complainant as deemed appropriate and just, including attorneys fees; and (e) issue such other and further relief as is deemed equitable.
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Dated: November 4, 2012
Respectfully submitted, /s/ Marcia H. Sundeen Marcia H. Sundeen T. Cy Walker Kenyon & Kenyon LLP 1500 K Street, N.W. Washington, DC 20005 Tel: (202) 220-4200 Fax: (202) 220-4201 Megan Whyman Olesek Michelle McLeod Kenyon & Kenyon LLP 1801 Page Mill Road, Suite 210 Palo Alto, CA 94304-1216 Telephone: (650) 384-4700 Fax: (650) 384-4701 Danny L. Williams Terry D. Morgan Ruben S. Bains Christopher N. Cravey Kyung Kim Scott Woloson Richard Groseclose Williams, Morgan & Amerson, P.C. 10333 Richmond, Suite 1100 Houston, TX 77042 Telephone: (713) 934-7000 Fax: (713) 934-7011 Counsel for Respondent Apple Inc.
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Certain Devices With Secure Communication Capabilities, Components Thereof and Products Containing the Same CERTIFICATE OF SERVICE
337-TA-858
I hereby certify that copies of the foregoing Response of Respondent Apple Inc. to the Complaint and Notice of Investigation were served upon the following parties as indicated on November 7, 2012
Lisa R. Barton, Acting Secretary U.S. International Trade Commission 500 E Street, S.W., Room 112 Washington, D.C. 20436 Via Hand Delivery Via Overnight Federal Express Delivery Via First Class Mail Via Facsimile Via Electronic Service Via Hand Delivery Via Overnight Federal Express Delivery Via First Class Mail Via Facsimile Via Electronic Mail
The Honorable E. James Gildea U.S. International Trade Commission 500 E Street, S.W., Room 317 Washington, D.C. 20436 Email: sarah.zimmerman@usitc.gov kenneth.schopfer@usitc.gov Counsel for Complainant VirnetX, Inc. Benjamin Levi MCKOOL SMITH P.C. 1999 K Street, N.W., Suite 600 Washington, DC 20006 Email: VirnetX_AppleITC@mckoolsmith.com
Via Hand Delivery Via Overnight Federal Express Delivery Via First Class Mail Via Facsimile Via Electronic Mail
Counsel for Complainant Science Applications International Corporation Donald S. Urrabazzo Urrabazo Law, P.C. 2029 Century Park East, 14th Floor Los Angeles, CA 90067 Email: durrabazo@ulawpc.com Via Hand Delivery Via Overnight Federal Express Delivery Via First Class Mail Via Facsimile Via Electronic Mail
/s/ Bernard B. Pound

Bernard B. Pound Litigation Paralegal Manager

APPL Answer (ITC)

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UNITED STATES INTERNATIONAL TRADE COMMISSION WASHINGTON, D.C. 20436 Before the Honorable Administrative Law Judge E.

RESPONSE OF RESPONDENT APPLE INC. TO THE COMPLAINT AND NOTICE OF INVESTIGATION

Apple denies that an industry under 19 U.S.C. 1337(a)(2) or (a)(3)(A), (B), or

(C) exists and/or is in the process of being established.

truth of the allegations of Paragraph 10 and, therefore, denies them.

Apple admits that the Commission in Investigation No. 337-TA-818 determined

Background and Ownership

Apple is without knowledge or information sufficient to form a belief as to the

truth of the allegations of Paragraph 33 and, therefore, denies them. D. Licensees

To the extent that Paragraph 54 contains conclusions of law, no response is

To the extent that Paragraph 62 contains conclusions of law, no response is

Apple is without knowledge or information sufficient to form a belief as to the

Apple admits that a copy of a purported agreement between VirnetX and

truth of the allegations of Paragraph 72 and, therefore, denies them.

Apple is without knowledge or information sufficient to form a belief as to the

Mitel Networks Corporation

truth of the allegations of Paragraph 97 and, therefore, denies them.

Apple is without knowledge or information sufficient to form a belief as to the

truth of the allegations of Paragraph 104 and, therefore, denies them.

Apple is without knowledge or information sufficient to form a belief as to the

To the extent that Paragraph 112 contains conclusions of law, no response is

Apple is without knowledge or information sufficient to form a belief as to the

least because Apple products do not use a secure name service. 25

Prior Art Systems

Claim 21 is indefinite. Claim 21 recites providing an unsecured name associated

In addition, during prosecution of the 181 patent, VirnetX made false

As a result of VirnetXs misleading arguments and withholding of information

Dated: November 4, 2012

/s/ Bernard B. Pound

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