Virnetx Appeal 192017 Vinertx v. Apple

Case: 15-1934 Document: 72 Page: 1 Filed: 01/09/2017
2015-1934, -1935
United States Court of Appeals

for the Federal Circuit
VIRNETX INC.,
Appellant,
v.
APPLE INC.,
Appellee.
Appeals from the United States Patent and Trademark Office,

Patent Trial and Appeal Board, in Nos. IPR2014-00237 and IPR2014-00238
APPELLANT VIRNETX INC.S

PETITION FOR REHEARING EN BANC
Naveen Modi
Joseph E. Palys
Igor V. Timofeyev
PAUL HASTINGS LLP
875 15th Street, N.W.
Washington, D.C. 20005
(202) 551-1700
naveenmodi@paulhastings.com
josephpalys@paulhastings.com
igortimofeyev@paulhastings.com
Counsel for Appellant VirnetX Inc.
JANUARY 9, 2017
CERTIFICATE OF INTEREST
Pursuant to Federal Circuit Rule 47.4, counsel of record for Patent Owner-
Appellant VirnetX Inc. certify as follows:
1. The full name of every party or amicus represented by us is:
VirnetX Inc.
2. The name of the real party in interest represented by us is:
VirnetX Inc.
3. All parent corporations and any publicly held companies that own 10
percent or more of the stock of the party or amicus curiae represented
by us are:
VirnetX Inc. is a wholly owned subsidiary of VirnetX Holding

Corporation (VHC). VHCs stock is publicly traded on the
New York Stock Exchange.
4. The names of all law firms and the partners or associates that
appeared for the parties represented by us in the trial court, or are
expected to appear in this Court, are:
Paul Hastings LLP:

Naveen Modi, Joseph E. Palys, Igor V. Timofeyev, Srikala P.
Atluri,* Daniel Zeilberger, and Danielle R.A. Susanj*
Finnegan, Henderson, Farabow, Garrett, & Dunner, LLP:

Jason Stach
*No longer with the firm.
Dated: January 9, 2017 /s/Naveen Modi

Naveen Modi
TABLE OF CONTENTS
STATEMENT OF COUNSEL .................................................................................. 1
INTRODUCTION .....................................................................................................2
STATEMENT OF THE CASE ..................................................................................4

REASONS FOR GRANTING EN BANC REHEARING ......................................... 8
I. THE PANELS DECISION CANNOT BE RECONCILED WITH

THIS COURTS PRECEDENT THAT THE BOARD CANNOT
SUBSTITUTE ITS EXPERTISE FOR THE REQUISITE EXPERT
EVIDENCE ESSENTIAL IN CASES OF COMPLEX
TECHNOLOGY. ...............................................................................................8
II. THE MAJORITYS ERRONEOUS DECISION WILL HAVE

SIGNIFICANT NEGATIVE CONSEQUENCES, AND THIS CASE
IS A PERFECT VEHICLE TO CONSIDER THE ISSUE
PRESENTED. ..................................................................................................13
CONCLUSION ........................................................................................................15
i
TABLE OF AUTHORITIES
Page(s)
Cases
A.C. Aukerman Co. v. R.L. Chaides Constr. Co.,
960 F.2d 1020 (Fed. Cir. 1992) ..........................................................................14
Alexsam, Inc. v. IDT Corp.,

715 F.3d 1336 (Fed. Cir. 2013) ..........................................................................11
Aspex Eyewear, Inc. v. Concepts in Optics, Inc.,

111 F. Appx 582 (Fed. Cir. 2004) .....................................................................11
Baltimore & Ohio R.R v. Aberdeen & Rockfish R.R.,
393 U.S. 87, 92 (1968)........................................................................................13
Belden Inc. v. Berk-Tek, LLC,
805 F.3d 1064 (Fed. Cir. 2015) ................................................................6, 10, 15
Brand v. Miller,
487 F.3d 862 (Fed. Cir. 2007) .....................................................................passim
Cardiac Pacemakers, Inc. v. St. Jude Med., Inc.,
576 F.3d 1348 (Fed. Cir. 2009) ..........................................................................14
Centricut, LLC v. Esab Group, Inc.,
390 F.3d 1361 (Fed. Cir. 2004) ...................................................................passim
Dynamic Drinkware, LLC v. Natl Graphics, Inc.,
800 F.3d 1375 (Fed. Cir. 2015) ..........................................................................12
Proveris Sci. Corp. v. Innovasystems, Inc.,

536 F.3d 1256 (Fed. Cir. 2008) ..........................................................................10
Purdue Pharma L.P. v. Depomed, Inc.,
643 F. Appx 960 (Fed. Cir. 2016) .....................................................................15
Wyers v. Master Lock Co.,
616 F.3d 1231 (Fed. Cir. 2010) ..........................................................................10
ii
TABLE OF AUTHORITIES
(Continued)
Page(s)
Statutes
35 U.S.C. 316(e) .............................................................................................12, 14
Other Authorities
DirecTV, LLC v. Qurio Holdings, Inc.,
IPR2015-02007, Paper No. 6 (P.T.A.B. Apr. 4, 2016).......................................15
iii
STATEMENT OF COUNSEL
In the inter partes review (IPR) proceedings below, involving complex
secure network communication technology, the Patent Trial and Appeal Board
relied on patent challengers extensive expert testimony regarding the challenged
claims and asserted references when instituting the proceedings. After that
testimony was exposed as unreliable, the Board disclaimed reliance on it in its final
decisions. The Board nevertheless invalidated the challenged claims despite the
absence of any expert testimony supporting the findings of invalidity, as to which
patent challenger bore the burden of proof. A divided panel of this Court affirmed.
Based on my professional judgment, I believe (1) the panel decision is
contrary to the following precedents of this Court: Brand v. Miller, 487 F.3d 862
(Fed. Cir. 2007), and Centricut, LLC v. Esab Group, Inc., 390 F.3d 1361 (Fed. Cir.
2004); and (2) this appeal requires an answer to a precedent-setting question of
exceptional importance: Whether, in a case involving undisputedly complex
technology and multiple references, the Board may properly conclude that the
patent challenger carried its burden of proof of establishing invalidity in the
absence of any supporting expert testimony as to how one of ordinary skill in the
art would have interpreted patent claims and asserted references.
/s/Naveen Modi
Naveen Modi
1
INTRODUCTION
This Court has stressed, time and again, that, as a general rule, expert
testimony will be necessary in cases involving complex technology. Centricut,
390 F.3d at 1370 (citation omitted). In the proceedings below, patent challenger
Apple Inc. (Apple) submitted over 400 pages of detailed expert testimony about
the multiple asserted references to support its invalidity contentions. The Board
relied extensively on this testimony when instituting the IPR proceedings. After
patent holder VirnetX Inc. (VirnetX) demonstrated that Apples expert was
unreliable, the Board switched course in its final decisions, disclaiming any need
for expert evidence in understanding the asserted references or determining
patentability. The Board then made detailed findings as to what these references
taught, implied, or suggested, and how one of ordinary skill in the art would have
understood the references and the patent terms. In doing so, the Board apparently
relied on the reasoning and conclusions in the expert testimony it ostensibly
disclaimed. The Board, applying a higher standard of proof than during institution,
invalidated all the challenged claims as either anticipated or obvious.
A divided panel of this Court affirmed. The panel majority did not contest
that the technology was complex. The majority nevertheless declared that,
irrespective of the technologys complexity, the Board can replace the requisite
2
expert testimony with its own analysis of the prior art and challenged patents,
excusing the patent challenger from his burden of proof.
The rule adopted by the panel majority is contrary to this Courts precedent
that, in making invalidity findings on the basis of asserted prior art, the Board may
not substitute[] its own opinion for evidence of the knowledge of one of ordinary
skill in the art. Brand, 487 F.3d 870. And the panels decision renders a nullity
this Courts repeated admonition that expert testimony is typically required to
understand patent claims and references, especially in cases of complex
technology. As Judge OMalley pointed out in dissent, the Court found expert
testimony unnecessary only in the exceptional case in which the references and
the invention are easily understandable. Dissenting Opinion (Dis. Op.) 2
(citation omitted) (emphasis added).
This is a question of exceptional importance that will affect numerous Board
proceedings and impede this Courts ability to meaningfully review the Boards
decisions. As Judge OMalley warned, the panels misguided ruling will spur the
Board, in any case where expert testimony is challenged, to simply disclaim[]
reliance on the only supporting expert testimony yet reach[] the exact same
conclusions, and then shroud these conclusions in a haze of so-called
expertise. Dis. Op. 4 (citations omitted). This Court, en banc, should answer the
question raised by this petition and correct the panels erroneous decision.
3
STATEMENT OF THE CASE

The technology here relates to the establishment of secure network
communications over public Internet networks, such as those involving business
travelers or local networks separated by public networks. The patent at issue, U.S.
Patent No. 8,504,697 (the 697 patent), discloses, inter alia, a novel method of
initiating secure communications over a network via a request to look up an
internet protocol address based on a domain name through the use of a proxy
domain name server. See Op. 3-5.
Apple commenced two IPR proceedings challenging the patentability of
certain claims of the 697 patent.1 Op. 2. In support of its invalidity contentions,
Apple submitted extensive expert declarationstotaling over 400 pages. See Dis.
Op. 2. Indeed, Apples IPR petitions relied exclusively on this expert testimony to
present and describe the asserted references, not citing even once the references
themselves.
The Board instituted both IPR proceedings. Op. 2. The Boards institution
decisions relied on the declarations of Apples expert for nearly every aspect of the
1
In the first proceeding (IPR2014-00237), Apple challenged these claims over two
references: U.S. Patent No. 6,496,867 (Beser) and RFC 2401 (S. Kent and R.
Atkinson, Security Architecture for the Internet Protocol, Request for Comments:
2401, BBN Corp., Nov. 1998). In the second proceeding (IPR2014-00238), Apple
asserted two different references: U.S. Patent No. 5,898,830 (Wesinger) and
RFC 2543 (H. Schulzrinne, et al., SIP: Session Initiation Protocol, Network
Working Group, Request for Comments: 2543, Bell Labs, Mar. 1999).
4
anticipation and obviousness analysis. Altogether, the Board cited the testimony of
Apples purported expert over 55 times in its institution decisions.
During trial, VirnetX presented evidence that Apples expert lacked the
requisite qualifications and was biased. The parties had agreed that, given the
complex technology, the level of skill required a masters degree in computer
science or engineering combined with a multi-year experience in computer
networking and computer security. See Appx279; Appx5917 Apples expert had
only a bachelors degree in information science and technology, and his experience
consisted of having occasionally reviewed computer networking products for a
technology publication. Moreover, after he was retained, this purported expert
publicly touted that his role was patent busting, Appx5914, and that he ha[s]
never concluded that claims were not obvious or not anticipated, Appx6118-6119,
among other proclamations evincing bias, Appx5911. Having exposed Apples
expert as unreliable, VirnetX argued that his testimony was not entitled to any
weight and, therefore, judgment should be entered against Apple.
The Boards response was ostensibly to disclaim any reliance on this
testimony in its final decisions. Appx55; Appx92. Having done so, the Board
proceeded to make detailed findings of anticipation and obviousness, including
numerous findings regarding how one skilled in the art would have read the
asserted references, see, e.g., Appx29; Appx48-54; Appx85-86; Appx89-91
5
findings that precisely follow[ed] the conclusions of Apples discredited expert,
Dis. Op. 3. The Board then found all the challenged claims to be either anticipated
or obvious over various asserted references. Op. 2; Appx55; Appx92.
On appeal, a divided panel affirmed. 2 The majority did not contest that the
technology at issue was complex, or that it is impermissible for the [PTAB] to
base its factual findings on its expertise, rather than on evidence in the record.
Op. 7-8 (quoting Brand, 487 F.3d at 869). The panel majority declared,
nevertheless, that even if the record contains expert testimony, the law does not
require the PTAB to rely upon it. Op. 8. The majority then heldin direct
contravention of Brandthat the Board can substitute its own analysis of the
asserted prior art for the experts. Op. 8-9.
Judge OMalley dissented, and would have reversed. This Courts
precedents, she observed, instruct that, as a general rule, expert testimony is
essential to prove invalidity, and particularly in cases involving complex
technology. Dis. Op. 1-2 (citing cases). This Court relaxed this requirement only
in the exceptional case in which the references and the invention are easily
understandable. Id. at 2 (quoting Belden Inc. v. Berk-Tek, LLC, 805 F.3d 1064,
1079 (Fed. Cir. 2015)) (selected internal quotation marks and citation omitted).
2
The panel affirmed the Board on the grounds stated in IPR2014-00238, without
addressing the grounds for the determination in IPR2014-00237.
6
ButJudge OMalley pointed outthis was manifestly not such a case: the
claims at issue cover more complex technology (establishing secure
communications between multiple network devices for video/audio data
transmission) and the Boards invalidity finding was premised on combinations of
multiple pieces of prior art. Dis. Op. 2. Moreover, Apple itself submitted over
four hundred pages of expert testimony below in support of its invalidity
contentions, apparently believing such a detailed record was necessary. Id.
Judge OMalley zeroed in on the majority opinions direct conflict with this
Courts decision in Brand. Brand instructed that while the Boards expertise
plays a role in interpreting record evidence, it may not act as a substitute for such
evidence. Dis. Op. 3 (quoting Brand, 487 F.3d at 869). Here, by contrast,
despite disclaiming any reliance on the only supporting expert testimony, the
Board made findings as to what the prior art implies, suggests, and teaches towards
(or away from), in addition to how certain terms or combinations of features
would have been understood by one of ordinary skill in the art. Dis. Op. 3-4
(citing examples). As Judge OMalley trenchantly observed, both here and in
Brand the detailed nature of the findings that the Board found necessary to make
demonstrates the inappropriateness of its approachit appears to have simply
substituted its own expertise for record evidence, with the panel majoritys
blessing. Id. at 4 (quoting Brand, 487 F.3d at 870).
7
REASONS FOR GRANTING EN BANC REHEARING

I. THE PANELS DECISION CANNOT BE RECONCILED WITH THIS
COURTS PRECEDENT THAT THE BOARD CANNOT
SUBSTITUTE ITS EXPERTISE FOR THE REQUISITE EXPERT
EVIDENCE ESSENTIAL IN CASES OF COMPLEX TECHNOLOGY.
The panels decision conflicts with this Courts precedents in two ways.
First, the majoritys holding is contrary to the rule set forth in Brand that,
although the Boards expertise appropriately plays a role in interpreting record
evidence, in the context of a contested case, it is impermissible for the Board to
base its factual findings on its expertise, rather than on evidence in the record.
487 F.3d at 869. In Brand, in the context of an interference proceeding, the Board
rejected as unconvincing the only relevant testimony supporting the contention
that the invention was derivative; as a result, there was no testimony from one
skilled in the art that the drawings communicated an enabling invention to a skilled
recipient. Id. at 870. The Board sought to fill that evidentiary gap by its own
detailed inferences as to how one skilled in the art would have recognized
how certain elements depicted in the prior art could have been arranged to perform
a claimed method. Id. This Court reversed, holding that the Board erred when it
substituted its own expertise for the record evidence that [the patent challenger]
was obligated to provide. Brand, 487 F.3d at 870; see also Dis. Op. 3.
The panel openly stated that it disagree[s] with the rule established in
Brand. Op. 8. In the majoritys view, as long as the Board reviews the complete
8
administrative record and explains its findings, it matters not that its findings
regarding the prior art are based solely on the Boards own expertise. Id.
(internal quotation marks and citation omitted). Under the panels opinionand
contrary to what this Court has said beforethe Board is free to substitute[] its
own analysis of the [prior art] references for the experts. Id. (internal quotation
marks and citation omitted).
As Judge OMalley noted, the majoritys opinion cannot be reconciled with
Brand. See Dis. Op. 3-4. Here, as in Brand, despite disclaiming any reliance on
the only supporting expert testimony, the Board made findings as to what the prior
art implies, suggests, and teaches towards (or away from), in addition to how
certain terms or combinations of features would have been understood by one of
ordinary skill in the art. Id. (citing examples). This is exactly the type of
freelancing that this Court declared impermissible in Brand. 787 F.3d at 869.
And, [a]s in Brand, the detailed nature of the findings that the Board found
necessary to make demonstrates the inappropriateness of its approachit appears
to have simply substituted its own expertise for record evidence. Dis. Op. 4
(quoting Brand, 487 F.3d at 870). Whereas a party could test an experts
conclusions through cross-examination, there is no mechanism for a party to test
the Boards own assessment of the patent claims and the references. The panels
opinion frees the Board from the constraints that this Court properly imposed in
9
Brand and will create confusion as to what is the permissible Board fact-finding in
contested proceedings. This Court, sitting en banc, should resolve this conflict.
Second, the panels decision cannot be squared with this Courts admonition
that expert testimony regarding matters beyond the comprehension of laypersons
is sometimes essential, particularly in cases involving complex technology.
Wyers v. Master Lock Co., 616 F.3d 1231, 1240 n.5 (Fed. Cir. 2010) (quoting
Centricut, 390 F.3d at 1369); see also Proveris Sci. Corp. v. Innovasystems, Inc.,
536 F.3d 1256, 1267 (Fed. Cir. 2008) (where the subject matter is sufficiently
complex to fall beyond the grasp of an ordinary layperson, it is proper to
requir[e] expert testimony in order to establish invalidity). The panel held, by
contrast, that even where the technology is undisputedly complex, the Board may
rely upon that evidencebut can also disregard it. Op. 7-8 (citation omitted).
The panels decision effectively renders a nullity a vast swath of this Courts
precedents on the importance of expert testimony to the understanding of prior art
and its relationship to the challenged patent claims, especially in instances of
complex technology. See Dis. Op. 1-2 (citing cases). As Judge OMalley noted,
the Court found expert testimony unnecessary only in the exceptional case in
which the references and the invention are easily understandable without expert
assistance. Dis. Op. 2 (quoting Belden, 805 F.3d at 1079) (additional internal
quotation marks and citation omitted) (emphasis added).
10
But this is not such an exceptional casequite the contrary. As Judge
OMalley observed, the claims at issue cover complex technology and the
Boards invalidity finding was premised on combinations of multiple pieces of
prior art. Dis. Op. 2. The requisite level of skill was exceedingly high.
Appx279; Appx5917; supra at 5. Tellingly, as Judge OMalley pointed out,
Apple itself submitted over four hundred pages of expert testimony in support
of its invalidity contentions, apparently believing such a detailed record was
necessary. Dis. Op. 2. 3 In sum, [t]his is not one of those rare cases where the
invention is so simple that expert testimony is not required. Aspex Eyewear, Inc.
v. Concepts in Optics, Inc., 111 F. Appx 582, 588 (Fed. Cir. 2004).
The panel majoritys departure from this Courts precedent cannot be
overstated. The panel did not contest that the technology involved is undisputedly
complex. Op. 7 (internal quotation marks and citation omitted). Nor did the
majority question that the interpretation of the asserted references required a highly
specialized level of skill. The panel nevertheless held that the Board can disregard
any and all expert evidence as to the meaning of these references and their bearing
on the challenged patent claims. If the Board is at liberty to dispense with expert
3
See also Alexsam, Inc. v. IDT Corp., 715 F.3d 1336, 1348 (Fed. Cir. 2013) (any
claim that the technology is simple is belied by the fact that both sides believed it
necessary to introduce extensive expert testimony regarding the content of the prior
art).
11
evidence in a case like this, this Courts case-law about the importance of expert
evidence in situations of complex technology now means nothing.
The panels decision also upends the requirement that it is the patent
challenger in IPR proceedings who bears the burden of proving unpatentability.
35 U.S.C. 316(e); Dynamic Drinkware, LLC v. Natl Graphics, Inc., 800 F.3d
1375, 1378 (Fed. Cir. 2015). If, as the majority opined, the Board itself concludes
that the technology is so complex that expert testimony is essential to understand
the asserted prior art, Op. 7 (internal quotation marks and citation omitted), the
patent challenger cannot conceivably meet his burden of proving that the prior art
anticipates the invention or renders it obvious without presenting expert evidence.
This is what this Court held in Centricut, where the defendant offer[ed] expert
testimony negating the plaintiffs contentions, and the plaintiff rel[ied] only on
testimony from those who are admittedly not expert in the field. 390 F.3d at
1370. The Court explained that a party that presents complex subject matter
without inputs from experts qualified on the relevant points in issue cannot carry
its burden of proof. Id. As in Centricut, the only possible conclusion here is that
there was inadequate competent evidence on the record to support the Boards
judgments. Dis. Op. 4. The panels decision eviscerates this requirement, and
needs to be corrected en banc.
12
II. THE MAJORITYS ERRONEOUS DECISION WILL HAVE

SIGNIFICANT NEGATIVE CONSEQUENCES, AND THIS CASE IS
A PERFECT VEHICLE TO CONSIDER THE ISSUE PRESENTED.
The panels misguided decision not only runs roughshod over this Courts
precedent, but will also negatively affect the transparency of the Boards decisions
and this Courts ability to meaningfully review them. The majoritys carte-blanche
to the Board to dispense with the requirement of sufficient (or any) expert
testimony in a patentability proceeding will encourage future Board panels, when
expert testimony is challenged, to simply disclaim that testimony and make their
own findings as to the prior art, even if they previously relied on the same
testimony to institute review. As Judge OMalley warned, [a]llowing the Board
to continue this practicedisclaiming reliance on the only supporting expert
testimony yet reaching the exact same conclusions propounded thereinwould
only exacerbate the trend towards a haze of so-called expertise that this court and
the Supreme Court have admonished against. Dis. Op. 4 (quoting Brand, 487
F.3d at 869; Baltimore & Ohio R.R v. Aberdeen & Rockfish R.R., 393 U.S. 87, 92
(1968)). Effective judicial review of administrative decisions depends on the
agency evaluating fully and fairly the entire administrative record.
This case illustrates the dangers of the majoritys misguided approach. The
Board relied extensively on the voluminous expert evidence submitted by Apple
when determining whether Apple established a reasonable likelihood that it will
13
prevail on its anticipation and obviousness grounds with respect to at least one
claim. See supra at 4. Yet, when that evidence was challenged as unreliable, the
Boardat a point when Apple had a higher burden of proving invalidity by a
preponderance of the evidence, 35 U.S.C. 316(e)declared that no expert
assistance was necessary to understand the patent claims and the references. As
Judge OMalley pointed out, that is simply inconceivable: the technology at issue
is complex, there are multiple prior art references that must be combined to support
the Boards invalidity conclusions, and there is substantial dispute regarding what
one of skill in the artat the relevant time framewould have gleaned from those
prior art references. Dis. Op. 3. Indeed, as Judge OMalley observed, [i]t is
telling that the Boards conclusions precisely follow the conclusions laid out in the
lengthy expert testimony the Board claimed to ignore. Id.
Although the panel designated its decision as non-precedential, that does not
alleviate the need for en banc review. The non-precedential designation is not an
inflexible bar to en banc consideration. See, e.g., Cardiac Pacemakers, Inc. v. St.
Jude Med., Inc., 576 F.3d 1348 (Fed. Cir. 2009); A.C. Aukerman Co. v. R.L.
Chaides Constr. Co., 960 F.2d 1020 (Fed. Cir. 1992). The panel majority purports
to apply this Courts decision in Brand, which is a precedential opinion. As the
majority opinion and Judge OMalleys dissent demonstrate, there is a radical
disagreement among Members of this Court as to what this and other precedents
14
require. See Op. 7-9; Dis. Op. 2-4. The Board, moreover, looks to this Courts
non-precedential decisions for guidance, and shapes its conduct accordingly. See,
e.g., DirecTV, LLC v. Qurio Holdings, Inc., IPR2015-02007, Paper No. 6 at 30-31
(P.T.A.B. Apr. 4, 2016) (citing Purdue Pharma L.P. v. Depomed, Inc., 643
F. Appx 960 (Fed. Cir. 2016) (non-precedential), for the appropriate standard in
assessing expert evidence). As Judge OMalley warned, in the wake of this
decision, other Board panels are likely to follow suit, to the detriment of
transparent decision-making. Dis Op. 4. The resulting trend to base invalidity
findings on the Boards expertise instead of careful assessment of the adduced
expert evidence will severely hamstring this Courts ability to review these
findings, especially given the substantial evidence standard.
This case presents a perfect opportunity for the full Court to address this
issue of exceptional importance. The issue is cleanly presented, since the Board
expressly disclaimed any reliance on the challenged expert testimony, the
technology is undisputedly complex, and the majority and the dissent laid out at
length the dueling interpretations of the Courts precedents. This Court will not
gain anything by waiting for another case, and meanwhile the majoritys erroneous
opinion will cause mischief. This Courts en banc review is needed.
CONCLUSION
This Court should grant en banc review.
15
January 9, 2017 Respectfully submitted,
/s/Naveen Modi
Naveen Modi
Joseph E. Palys
Igor V. Timofeyev
PAUL HASTINGS LLP
(202) 551-1700
16
ADDENDUM
N OTE : Th is disposit ion is n on pr eceden t ia l.

______________________
VI R N E T X I N C .,
Appella n t
v.
AP P L E I N C .,
Appellee
______________________
2015-1934, 2015-1935
______________________
Appea ls fr om t h e Un it ed St a t es P a t en t a n d Tr a de-
m a r k Office, P a t en t Tr ia l a n d Appea l Boa r d in Nos.
IP R2014-00237, IP R2014-00238.
______________________
Decided: Decem ber 9, 2016

______________________
I GOR VICTOR T IMOF E YE V, P a u l H a st in gs LLP , Wa sh -

in gt on , DC, a r gu ed for a ppella n t . Also r epr esen t ed by
N AVE E N M ODI , J OSE P H P ALYS .
J OH N C. OQ UIN N , Kir kla n d & E llis LLP , Wa sh in gt on ,

DC, a r gu ed for a ppellee. Also r epr esen t ed by N ATH AN S.
M AMME N ; J E F F RE Y P AUL K USH AN , S COTT B ORDE R , T H OMAS
ANTH ONY B ROUGH AN , III, S AMUE L D ILLON , R YAN C.
M ORRIS , ANNA M AYE RGOYZ W E IN BE RG , Sidley Au st in LLP ,
Wa sh in gt on , DC; R AQUE L C. R ODRIGU E Z, H ou st on , TX.
2 VIRNE TX INC . v. AP P LE INC .
______________________
Befor e OM ALLE Y, M AYE R , a n d W ALLACH , Cir cu it J u d ges.

Opin ion for t h e cou r t filed by Cir cu it J u d ge W ALLACH .
Dissen t in g opin ion filed by Cir cu it J u d ge OM ALLE Y.
W ALLACH , Cir cu it J u d ge.
In sepa r a t e pet it ion s, Appellee Apple In c. (Apple)
sou gh t in t er pa r t es r eview of cla im s 111, 1425, a n d 28
30 of U.S. P a t en t No. 8,504,697 (t h e 697 pa t en t ) befor e
t h e U.S. P a t en t a n d Tr a dem a r k Offices P a t en t Tria l a n d
Appea l Boa r d (P TAB). Th e P TAB in st it u t ed r eviews of
t h e su bject cla im s a nd, in sepa r a t e fin a l wr it t en decision s,
fou n d t h e su bject cla im s a n t icipa t ed by or obviou s over
va r iou s pr ior a r t r efer en ces. S ee Apple In c. v. Vir n etX In c.
(Vir n etX I), No. IP R2014-00237, 2015 WL 2251195
(P .T.A.B. Ma y 11, 2015); Apple In c. v. Vir n etX In c. (Vir -
n etX II), No. IP R2014-00238, 2015 WL 2251196 (P .T.A.B.
Ma y 11, 2015).
Appella n t Vir n et X In c. (Vir n et X), t h e a ssign ee of t h e
697 pa t en t , a ppea ls. We a ffir m , r esolvin g t h e su bject
a ppea ls on t h e gr ou n ds discu ssed by t h e P TAB in Vir n etX
II.
D ISCUSSION
I. Su bject Ma t t er J u r isdict ion a n d St a n da r d of Review
We possess su bject m a t t er ju r isdict ion pu r su a n t t o 28
U.S.C. 1295(a )(4)(A) (2012). We r eview t h e P TABs
fa ct u a l fin din gs for su bst a n t ia l eviden ce a n d it s lega l
con clu sion s de n ovo. Red lin e Detection , LLC v. S ta r
E n vir otech , In c., 811 F .3d 435, 449 (F ed. Cir . 2015) (cit a -
t ion om it t ed). Su bst a n t ia l eviden ce is m or e t h a n a m er e
scin t illa of eviden ce, Con sol. E d ison Co. v. NLRB, 305
U.S. 197, 229 (1938), bu t less t h a n t h e weigh t of t h e
eviden ce, Con solo v. F ed . Ma r . Com m n , 383 U.S. 607,
620 (1966).
VIRNE TX INC . v. AP P LE INC . 3
II. Th e P TAB P r oper ly F ou n d Cla im s 111, 1425, a n d

2830 of t h e 697 P a t en t In va lid
Vir n et X ch a llen ges va r iou s a spect s of Vir n etX II. In
pa r t icu la r , Vir n et X a lleges that the P TAB
(1) m iscon st r u ed va r iou s lim it a t ion s of cla im s 1, 3, a n d
1617 of t h e 697 pa t en t , Appella n t s Br . 3652; (2) m a de
u n pa t en t a bilit y fin din gs in t h e a bsen ce of su ppor t in g
exper t eviden ce, id . a t 3036; a n d (3) fa iled t o a pply t h e
pr oper lega l st a n da r d in it s a n t icipa t ion a n a lysis a n d
ot h er wise did n ot su ppor t it s a n t icipa t ion a n d obviou sn ess
fin din gs wit h su bst a n t ia l eviden ce, id . a t 6169. Aft er
br iefly discu ssin g t h e 697 pa t en t s con t en t s, we a ddr ess
t h e a r gu m en t s in t u rn .
A. Th e 697 P a t en t
A br ief r eview of In t er n et com m u n ica t ion s will pr o-
vide t h e con t ext n ecessa r y t o u n der st a n d t h e in ven t ion
cla im ed in t h e 697 pa t en t . Com m u n ica t ion s over t h e
In t er n et gen er a lly follow t h e Tr a n sm ission Con t r ol P r ot o-
col/In t er n et P r ot ocol, u n der wh ich ea ch com pu t er con -
n ect ed t o t h e In t er n et possesses a u n iqu e In t er n et
P r ot ocol (IP ) a ddr ess (e.g., 123.345.6.7) t h a t a llows ot h er
com pu t er s t o iden t ify t h a t com pu t er . A dom a in n a m e
ser ver (DNS) gen era lly lin ks a n IP a ddr ess t o a pa r t icu -
la r dom a in n a m e (e.g., www.pbs.or g).
E n t it led Syst em a nd Met h od E m ploying a n Agile
Net wor k P r ot ocol for Secu r e Com m u n ica t ion s Usin g
Secu r e Dom a in Na m es, t h e 697 pa t en t pr ovides key
t ech n ologies for im plem en t in g a secu r e vir t u a l In t er n et by
u sin g a n ew a gile n et wor k pr ot ocol t h a t is bu ilt on t op of
[a n ] exist in g IP a ddr ess. 697 pa t en t col. 6 ll. 2325. As
r eleva n t h er e, t h e 697 pa t en t r ecit es t h e u se of a pr oxy
DNS t o est a blish a secu r e n et wor k. Id . col. 39 l. 29col.
42 l. 16. Un der t h e pr ot ocol disclosed by t h e 697 pa t en t ,
a fir st device r equ est s a con n ect ion t o a secon d device
u sin g t h e dom a in n a m e of t h a t secon d device, a ft er wh ich
t h e pr oxy DNS r eceives t h e r equ est a n d looks u p t h e IP
a ddr ess of t h e secon d device. Id . col. 40 ll. 430. Befor e

r et u r n in g a n IP a ddr ess t o t h e fir st device, t h e pr oxy DNS
det er m in es wh et h er t h e fir st device is r equ est in g a ccess
t o a secu r e dom a in n a m e a n d h a s su fficien t secu r it y
pr ivileges befor e r et u r n in g a n IP a ddr ess t o t h e fir st
device. Id . col. 40 ll. 3238, col. 41 ll. 616, col. 41 l. 47
col. 42 l. 16. If it does, t h e pr oxy DNS in it ia t es a secu r e
con n ect ion t o cr ea t e a vir t u a l pr iva t e net wor k (VP N)
bet ween t h e fir st a n d secon d devices. Id . col. 40 ll. 3149.
Wh en t h e pr oxy DNS est a blish es t h e VP N, t h e pr oxy DNS
does n ot r evea l t h e a ct u a l IP a ddr ess of t h e t a r get device,
t h u s pr ovidin g t h e secu r e com m u n ica t ion t h a t t h e in ven -
t ion cla im s. Id . col. 40 ll. 120.
Th e in st a n t a ppea ls con cer n cla im s 111, 1425, a n d
2830 of t h e 697 pa t en t . In depen den t cla im 1 is r epr e-
sen t a t ive a n d r ecit es
[a ] m et h od of con n ect in g a fir st n et wor k device
a n d a secon d n et wor k device, t h e m et h od com pr is-
in g:
in t er cept in g, fr om t h e fir st n et wor k de-
vice, a r equ est t o look u p a n . . . [IP ] a d-
dr ess of t h e secon d n et wor k device ba sed
on a dom a in n a m e a ssocia t ed wit h t h e
secon d n et wor k device;
det er m in in g, in r espon se t o t h e r equ est ,
wh et h er t h e secon d n et wor k device is
a va ila ble for a secu r e com m u n ica t ion s
ser vice; a n d
in it ia t ing a secu r e com m u n ica t ion lin k be-
t ween t h e fir st n et wor k device a n d t h e
secon d n et wor k device ba sed on a det er -
m in a t ion t h a t t h e secon d n et wor k device
is a va ila ble for t h e secu r e com m u n ica t ion s
ser vice;
wh er ein t h e secu r e com m u n ica t ion s ser -

vice u ses t h e secu r e com m u n ica t ion lin k t o
com m u n ica t e a t lea st on e of video da t a
a n d a u dio da t a bet ween t h e fir st n et wor k
device a n d t h e secon d n et wor k device.
Id . col. 56 ll. 1127. Depen den t cla im s 211 a n d 1415
depen d dir ect ly or in dir ect ly fr om cla im 1 a n d pr ovide
a ddit ion a l lim it a t ion s t o t h e m et h od disclosed in cla im 1.
S ee id . col. 56 ll. 2853 (cla im s 211), col. 56 l. 65col. 57
l. 3 (cla im s 1415). In depen den t cla im 16 cover s a syst em
con figu r ed t o per for m t h e m et h od of cla im 1. S ee id .
col. 57 ll. 421. Depen den t cla im s 1725 a n d 2830
a ddit ion a l lim it a t ion s t o t h e syst em disclosed in cla im 16.
S ee id . col. 57 l. 21col. 58 l. 10 (cla im s 1725), col. 58
ll. 2131 (cla im s 2830).
B. Th e Con st r u ct ion of t h e Su bject Cla im s
We begin wit h t h e con st r u ct ion of va r ious cla im s in
t h e 697 pa t en t . Vir n et X ch a llen ges t h e P TABs con st r u c-
t ion of t h r ee lim it a t ion s in t h e su bject cla im s: secu r e
com m u n ica t ion lin k in cla im s 1 a n d 16, Appella n t s Br .
3648; det er m in ing . . . wh et h er t h e secon d n et wor k
device is a va ila ble in t h e sa m e cla im s, id. a t 4952, 64
65; a n d vir t u a l pr iva t e n et wor k com m u nica t ion lin k in
cla im s 3 a n d 17, id . a t 4849.
Two sepa r a t e r ea son s cou n sel a ga in st con st r u in g t h e
dispu t ed lim it a t ion s. F ir st , in ch a llen gin g t h e P TABs
con clu sion in Vir n etX II t h a t t h e su bject cla im s a r e inva -
lid, Vir n et X does n ot dispu t e t h a t t h e r eleva n t pr ior a r t
r efer en ces disclose, t ea ch , or su ggest secur e com m u n ica -
t ion lin k a n d vir t u a l pr iva t e n et wor k com m u n ica t ion
lin k. S ee Appella n t s Br . 6169. As a r esu lt , t h e pr oper
con st r u ct ion of t h ese lim it a t ion s h a s n o bea r in g on ou r
r eview of t h e P TABs a n t icipa t ion a n d obviou sn ess fin d-
in gs in Vir n etX II. Accor din gly, we will n ot con st r u e
t h em . Cf. H offer v. Micr osoft Cor p., 405 F .3d 1326, 1329
(F ed. Cir . 2005) (We r eview on ly t h e con st r u ct ion of t h e

wh er eby cla u se, for t h e in t er a ct ive lim it a t ion t h er ein
su ffices t o su ppor t t h e dist r ict cou r t s fin din g of n on in -
fr in gem en t .).
Secon d, a s t o det er m in in g . . . wh et h er t h e secon d
n et wor k device is a va ila ble in cla im s 1 a n d 16, Vir n et X
h a s wa ived it s a r gum en t s on t h e con st r u ct ion of t h is
lim it a t ion . Th e wa iver doct r in e pr eclu de[s] a pa r t y fr om
a dopt in g a n ew cla im con st r u ct ion posit ion on a ppea l.
In ter a ctive Gift E xpr ess, In c. v. Com pu ser ve In c., 256 F .3d
1323, 1346 (F ed. Cir . 2001) (cit a t ion s om it t ed). In it s
P a t en t Own er Respon se in IP R2014-00238, Vir n et X n ot ed
it s disa gr eem en t wit h t h e P TABs con st r u ct ion of t h e
su bject lim it a t ion in IP R2014-00237. 1 J .A. 10296300.
H owever , for pu r poses of IP R2014-00238, Vir n et X con -
clu ded t h a t t h e su bject cla im la n gu a ge is pla in on it s
fa ce[] a n d . . . does n ot r equ ir e con st r u ct ion . J .A. 10299
300. In Vir n etX II, t h e P TAB a ckn owledged t h a t Vir n et X
dispu t ed t h e P TABs con st r u ct ion of t h e lim it a t ion in
IP R2014-00237, bu t declin e[d] t o con st r u e t h e t er m in
IP R2014-00238 beca use Vir n et X did n ot specify h ow t h e
con st r u ct ion of t h e t er m . . . is r eleva n t in t h e pr esen t
pr oceedin g. 2015 WL 2251196, a t *3. On a ppea l, Vir -
n et X n ow specifies h ow t h e con st r u ct ion of t h e dispu t ed
lim it a t ion pu r por t edly bea r s on t h e issu es befor e u s. S ee
Appella n t s Br . 6465. Beca u se Vir n et X did n ot pr esen t
t h ese a r gu m en t s t o t h e P TAB, t h ey a r e wa ived. S ee
In ter a ctive Gift, 256 F .3d a t 1346.
1As st a t ed a bove, t h e P TAB issu ed Vir n etX I in

IP R2014-00237 a n d Vir n etX II in IP R2014-00238.
C. Th e P TAB Ma y Ma ke F a ct u a l F in din gs Absen t E xper t

Test im on y
We n ext a ddr ess Vir n et Xs con t en t ion t h a t t h e P TAB
u n la wfu lly m a de va r iou s fa ct u a l fin din gs in it s a n t icipa -
t ion a n d obviou sn ess in qu ir ies. Accor din g t o Vir n et X, t h e
P TAB ca n n ot m a ke fa ct u a l fin dings r ega r din g wh a t [a
per son h a vin g or din a r y skill in t h e a r t (P H OSITA)]
wou ld h a ve u n der st ood wit h r espect t o t h e [pr ior a r t ]
r efer en ces in t h e a bsen ce of a n y su ppor t in g exper t t est i-
m on y except in ca ses in volving sim ple t ech n ology.
Appella n t s Br . 31, 34. An d beca u se t h e t ech n ology
in volved is u n dispu t edly com plex, Vir n et X a ver s t h a t t h e
P TAB cou ld n ot h a ve m a de u n pa t en t a bilit y fin din gs in
t h e a bsen ce of a n y suppor t in g exper t eviden ce. Id . a t 31.
Vir n et Xs a r gu m en t ign or es gover n in g la w. In Beld en
In c. v. Ber k-Tek LLC, we h eld t h a t [n ]o r u le r e-
qu ir es . . . a n exper t [t o] gu id[e] t h e [P TAB] a s t o h ow it
sh ou ld r ea d pr ior a r t . 805 F .3d 1064, 1079 (F ed. Cir .
2015). P TAB m em ber s, beca u se of exper t ise, m a y m or e
oft en fin d it ea sier t o u n der st a n d a n d sou n dly expla in t h e
t ea ch in gs a n d su ggest ion s of pr ior a r t wit h ou t exper t
a ssist a n ce. Id . Th u s, t o t h e ext en t t h a t Vir n et X con -
t en ds t h a t t h e P TAB m u st con sider exper t t est im on y, n o
a u t h or it y su ppor t s t h a t pr oposit ion .
Never t h eless, wh a t t h e [P TAB] ca n fin d wit h ou t a n
exper t depen ds on t h e pr ior a r t in volved in a pa r t icu la r
ca se. S yn opsys, In c. v. Men tor Gr a ph ics Cor p., 814 F .3d
1309, 1320 (F ed. Cir. 2016) (in t er n a l quot a t ion m a r ks,
br a cket s, a n d cit a t ion om it t ed). If t h e P TAB fin ds t h a t
t h e t ech n ology in a pa r t icu la r ca se is su fficien t ly com plex
t h a t exper t t est im on y is essen tia l, it m a y r ely u pon t h a t
eviden ce. Id . (em ph a sis a dded). Bu t even if t h e r ecor d
con t a in s su ch t est im on y, t h e P TAB m u st weigh t h a t
t est im on y a ga in st ot h er r ecor d eviden ce in r ea ch in g it s
con clu sion , a n d it m a y give t h a t t est im on y less weigh t , so
lon g a s it su ppor t s it s decision wit h su bst a n t ia l eviden ce.
S ee id .; see a lso Tr s. of Colu m bia Un iv. v. Illu m in a , In c.,

620 F . Appx 916, 922 (F ed. Cir . 2015) (Th e P TAB [is]
en t it led t o weigh t h e cr edibilit y of t h e wit nesses in ligh t of
t h eir qu a lifica t ion s a n d eva lu a t e t h eir a sser t ion s a ccor d-
in gly. (cit a t ion s om it t ed)). Th u s, even if t h e r ecor d
con t a in s exper t t est im on y, t h e la w does n ot r equ ir e t h e
P TAB t o r ely u pon it .
F in a lly, Vir n et X a lleges t h a t , in con t est ed pr oceed-
in gs, t h e P TAB m a y n ot im pr oper ly su bst it u t e[] it s own
a n a lysis of t h e [pr ior a r t ] r efer en ces for t h e exper t s.
Appella n t s Br . 33. We disa gr ee. Alt h ough it is im per -
m issible for t h e [P TAB] t o ba se it s fa ct u a l fin din gs on it s
exper t ise, r a t h er t h a n on eviden ce in t he r ecor d,2 t h e
P TABs exper t ise a ppr opr ia t ely pla ys a r ole in in t er pr et -
in g r ecor d eviden ce. Br a n d v. Miller , 487 F .3d 862, 869
(F ed. Cir . 2007). An d t o fu lfill it s du t ies, t h e P TAB m u st
m a ke t h e n ecessa r y fin din gs ba sed on a r eview of t h e
com plet e a dm in ist r a t ive r ecor d, a s well a s pr ovide a
fu ll a n d r ea son ed expla n a t ion in su ppor t of it s decision .
In r e Lee, 277 F .3d 1338, 1342 (F ed. Cir . 2002) (cit a t ion s
2 At va r iou s poin t s, t h e dissen t a lleges t h a t t h e r ec-

or d con t a in s n o eviden ce t o su ppor t t h e P TABs fin din gs.
S ee Dissen t a t 3 (a r gu in g t h a t t h e P TAB fa iled t o poin t t o
t h e a ct u a l eviden ce in t h e r ecor d t o su ppor t it s con clu -
sion s). At ot h er s, it a lleges t h a t t h e recor d con t a in s
in a dequ a t e com pet en t eviden ce. Id . a t 4. As expla in ed
below in Sect ion II.D, t h e r ecor d con t a in s su bst a n t ia l
eviden ce t o su ppor t t h e P TABs fin din gs. Th e dissen t
essen t ia lly object s t o t h e weigh t t h a t t h e P TAB a ffor ded
t o on e a spect of t h e r ecor di.e., t h e exper t t est im on y. S ee
gen er a lly id . (discu ssin g t h e r eleva n ce of exper t t est im o-
n y). Th e weigh in g of t h a t eviden ce a ga in st ot h er va lid
eviden ce sim ply is not a r ole of t h is cou r t . S ee In r e
Wa r sa w Or th oped ic, In c., 832 F .3d 1327, 1333 (F ed. Cir .
2016) (We m a y n ot reweigh t h [e] eviden ce on a ppea l.).
om it t ed). Vir n et Xs view of t h e la w would r equ ir e t h e

P TAB t o a ba n don t h ese du t ies.
D. Th e P TAB P r oper ly F ou n d t h e Su bject Cla im s An t ici-
pa t ed by, or Obviou s over , t h e P r ior Ar t
We n ext a ddr ess t h e P TABs con clu sion s t h a t t h e su b-
ject cla im s a r e a n t icipa t ed by, or wou ld h a ve been obviou s
over , va r iou s pr ior a r t r efer en ces. Vir n et X ch a llen ges
bot h t h e P TABs a n t icipa t ion a n d obviou sn ess fin din gs, so
we a ddr ess t h em in t u r n .
1. An t icipa t ion
A per son sh a ll be en t it led t o a pa t en t un less, in t er
a lia , t h e in ven t ion wa s descr ibed in . . . a pa t en t gr a n t ed
on a n a pplica t ion for pa t en t by a n ot h er filed in t h e Un it ed
St a t es befor e t h e in ven t ion by t h e a pplica n t for pa -
t en t . . . . 35 U.S.C. 102(e) (2006). 3 A pr ior a r t r efer -
en ce a n t icipa t es a pa t en t s cla im u n der 102(e) wh en t h e
fou r cor n er s of [t h a t ] . . . docu m en t descr ibe ever y elem en t
of t h e cla im ed in vent ion , eit h er expr essly or in h er en t ly,
su ch t h a t a [P H OSITA] cou ld pr a ct ice t h e in ven t ion
wit h ou t u n du e exper im en t a t ion . S pa n sion , In c. v. In tl
Tr a d e Com m n , 629 F .3d 1331, 1356 (F ed. Cir . 2010)
(in t er n a l qu ot a t ion m a r ks a n d cit a t ion om it t ed). An t ici-
pa t ion is a qu est ion of fa ct t h a t we r eview for su bst a n t ia l
eviden ce. Blu e Ca lypso, LLC v. Gr ou pon , In c., 815 F .3d
1331, 1341 (F ed. Cir . 2016) (cit a t ion om it t ed).
Th e P TAB fou n d t h a t U.S. P a t en t No. 5,898,830 (We-
sin ger ) a n t icipa t es cla im s 13, 811, 1417, 2225, a n d
3 Con gr ess a m en ded 102 wh en it pa ssed t h e

Lea h y-Sm it h Am er ica In ven t s Act (AIA). P u b. L. No.
112-29, 3(b)(1), 125 St a t . 284, 28587 (2011). H owever ,
beca u se t h e a pplica t ion t h a t led t o t h e 697 pa t en t wa s
filed befor e Ma r ch 16, 2013, t h e pr e-AIA 102 a pplies.
Id . 3(n )(1), 125 St a t . a t 293.
2830 of t h e 697 pa t en t . Vir n etX II, 2015 WL 2251196,

a t *36. E n t it led F ir ewa ll P r ovidin g E n h a n ced Net wor k
Secu r it y a n d User Tr a n spa r en cy, Wesin ger gen er a lly
pr ovides a fir ewa ll t h a t a ch ieves m a xim u m n et wor k
secu r it y a n d m a xim u m u ser con ven ien ce. Wesin ger ,
Abst r a ct .
Vir n et X ch a llen ges t h e P TABs a n t icipa t ion fin din gs
a s t o cla im s 1, 89, a n d 2223, gr ou pin g it s a r gu m en t s
in t o t wo ca t egor ies. Th e fir st con cer n s t h e P TABs fin d-
in gs a s t o cla im 1 a n d t h e secon d con cer n s t h e P TABs
fin din gs a s t o cla im s 89 a n d 2223. Appella n t s Br . 62
68. We a ddr ess t h em in t u r n .
a . Cla im 1
Cla im 1 r ecit es in r eleva n t pa r t det er m in in g, in r e-
spon se t o t h e r equ est , wh et h er t h e secon d n et wor k device
is a va ila ble for a secu r e com m u n ica t ion s ser vice. 697
pa t en t col. 56 ll. 1618. Vir n et X a ver s t h a t t h e P TAB
er r ed in fin din g t h a t Wesin ger discloses t h is lim it a t ion .
Appella n t s Br . 6467.
As a n in it ia l m a t t er , Vir n et X con t en ds t h a t t h e P TAB
em ployed a su bst a n t ia l differ en ce t est , r a t h er t h a n
con du ct [in g] a pr oper a n t icipa t ion in qu ir y, wh en it
fou n d t h a t Wesin ger a n t icipa t es t h e dispu t ed lim it a t ion .
Id . a t 62, 63. Th e P TAB decision belies Vir n et Xs a r gu -
m en t . Alt h ou gh t h e P TAB st a t ed t h a t it did n ot discer n
a su bst a n t ia l differ en ce bet ween Wesin ger a n d t h e
dispu t ed lim it a t ion , Vir n etX II, 2015 WL 2251196, a t *4,
it n eit h er st a t ed t h a t a su bst a n t ia l differ en ce t est con -
t r olled it s inqu ir y, n or r epea t ed su bst a n t ia l differ en ce in
t h e r em a in der of it s a n t icipa t ion a n a lysis, see id . a t *36.
We will n ot fin d lega l er r or ba sed u pon a n isola t ed st a t e-
m en t st r ipped fr om it s con t ext .
Vir n et X n ext a r gu es t h a t su bst a n t ia l eviden ce does
n ot su ppor t t h e P TABs fin din g t h a t Wesin ger discloses
t h e dispu t ed lim it a t ion . Accor din g t o Vir net X, t h e P TAB
im pr oper ly pr em ised it s fin din g on t h e a sser t ion t h a t a

P H OSITA would h a ve u n der st ood t h a t if a con n ect ion
wit h a vir t u a l h ost is det er m in ed t o be a llowed if a ll r u les
a r e sa t isfied (a s Wesin ger discloses), t h en t h e vir t u a l h ost
wou ld be det er m in ed t o be a va ila ble for t h e con n ect ion ,
a s cla im 1 r ecit es. Appella n t s Br . 65 (em ph a ses a dded)
(in t er n a l qu ot a t ion m a r ks, br a cket s, a n d cit a t ion om it -
t ed). We disa gr ee.
F or a r efer en ce t o a n t icipa t e, it n eed n ot sa t isfy a n
ipsissim is ver bis t est . In r e Glea ve, 560 F .3d 1331, 1334
(F ed. Cir . 2009) (cit a t ion om it t ed). Wesin ger discloses
t h a t [i]f a ll t h e r u les a r e sa t isfied, t h en t h e con n ect ion
[wit h t h e vir t u a l h ost ] is a llowed a n d t h a t , [o]n ce t h e
con n ect ion h a s been a llowed , t h e vir t u a l h ost pr o-
cess . . . per for m s . . . con n ect ion pr ocessin g, Wesin ger
col. 16 ll. 6667, col. 17 ll. 13 (em ph a ses a dded), wh er ea s
t h e dispu t ed lim it a t ion in cla im 1 r ecit es det er m in -
in g . . . wh et h er t h e secon d n et wor k device is a va ila ble,
697 pa t en t col. 56 ll. 1617 (em ph a sis a dded). Th e P TAB
fou n d t h a t a llowed in Wesin ger discloses a va ila ble in
cla im 1 for a t lea st t h r ee r ea son s, on e of wh ich we fin d
a dequ a t e t o su ppor t t h e con clu sion . S ee Vir n etX II, 2015
WL 2251196, a t *45. Specifica lly, t h e P TAB fou n d t h a t
va r iou s pa ssa ges in t h e specifica t ion equ a t e a llowed in
Wesin ger wit h a va ila ble in cla im 1, su ch t h a t Wesin ger
discloses t h e dispu t ed lim it a t ion . S ee id . a t *5. Vir n et X
does n ot con t est t h is a spect of t h e P TABs a n a lysis.
Appella n t s Br . 6467.
Su bst a n t ia l eviden ce su ppor t s t h e P TABs fin din g.
F or exa m ple, on e em bodim en t in t h e 697 pa t en t s specifi-
ca t ion discloses t h a t DNS pr oxy . . . det erm in es wh et h er
t h e u ser h a s su fficien t secu r it y pr ivileges t o a ccess t h e
sit e. If so, DNS pr oxy . . . r equ est [s] t h a t a [VP N] be
cr ea t ed bet ween u ser com pu t er . . . a n d secu r e t a r get
sit e . . . . 697 pa t ent col. 40 ll. 3640. Ot h er em bodi-
m en t s sim ila r ly dem on st r a t e t h a t a va ila ble en com -
pa sses a llowed. S ee id . col. 41 ll. 1432 (expla in ing a n
em bodim en t in wh ich a ch eck is m a de t o det er m in e

wh et h er t h e u ser is a u t h or ized t o con n ect t o t h e secu r e
h ost by r efer en ce t o a n in t er n a lly st or ed list a n d if t h e
u ser h a s su fficien t secu r it y pr ivileges, t hen . . . a secu r e
VP N is est a blish ed bet ween t h e u ser s com pu t er a n d t h e
secu r e t a r get sit e), 4751 (expla inin g a n em bodim en t in
wh ich a [c]lien t h a s per m ission t o a ccess t a r get com pu t -
er and t h e clien t s DNS r equ est wou ld
be. . . for wa r d[ed] . . . t o ga t ekeeper wh ich wou ld est a b-
lish a VP N bet ween t h e clien t a n d t h e r equ est ed t a r get ),
5761 (expla in ing a n em bodim en t in wh ich a [c]lien t
does n ot h a ve per m ission t o a ccess t a r get com pu t er a n d
t h e ga t ekeeper wou ld r eject t h e r equ est ). Th u s, beca u se
t h e su bject pa t en t s specifica t ion does n ot disclose a n
em bodim en t . . . in wh ich t h e a va ila bilit y of t h e secon d
n et wor k device is det er m in ed by ot h er m et h ods or cr it e-
r ia , Vir n etX II, 2015 2251196, a t *5, su bst a n t ia l eviden ce
su ppor t s t h e P TABs fin din g t h a t a va ila ble m ea n s
a llowed a n d, t h u s, t h a t Wesign er discloses t h e dispu t ed
lim it a t ion .
Vir n et X a r gu es fu r t h er t h a t Wesin ger does n ot a n t ici-
pa t e t h e dispu t ed lim it a t ion beca u se Wesinger oper a t es in
a m a n n er differ en t fr om t h e dispu t ed lim it a t ion . Appel-
la n t s Br . 6567. Th e dispu t ed lim it a t ion in cla im 1
r equ ir es t h a t det er m in in g . . . wh et h er t h e secon d n et -
wor k device is a va ila ble occu r s in r espon se t o t h e r e-
qu est t o look u p a n [IP ] a ddr ess of t h e secon d n et wor k
device ba sed on a dom a in n a m e a ssocia t ed wit h t h e
secon d n et wor k device. 697 pa t en t col. 56 ll. 1317. By
con t r a st , Vir n et X a ver s t h a t Wesin ger discloses t wo
t ypes of r equ est sfir st , a DNS qu er y (i.e., a r equ est t o
look u p a n IP a ddr ess) a n d, secon d, a con n ect ion r e-
qu est t h a t t rigger s a det er m in a t ion t o a llow or den y
con n ect ion . Appella n t s Br . 65, 66 (in t er n a l qu ot a t ion
m a r ks a n d cit a t ion s om it t ed). Vir n et X a lleges t h a t We-
sin ger does n ot a n t icipa t e t h e dispu t ed lim it a t ion beca u se
t h e secon d st ep in Wesin ger does n ot occu r in r espon se t o
a r equ est t o look u p a n IP a ddr ess ba sed on a dom a in

n a m e, a s t h e dispu t ed lim it a t ion r equ ir es. S ee id . a t 66
67.
Su bst a n t ia l eviden ce su ppor t s t h e P TABs fin din g
t h a t t h e secon d st ep in Wesin ger occu r s in r espon se t o a
r equ est t o look u p a n IP a ddr ess. F or exa m ple, Wesign er
discloses t h a t , in r espon se t o a con n ect ion r equ est for a
dom a in n a m e, t h e DNS in effect sa ys t o t h e r equ est or
Use vir t u a l h ost X.X.X.X., wh er e X.X.X.X. r epr esen t s a n
IP a ddr ess. Wesin ger col. 10 ll. 5861. As t h e P TAB
expla in ed, t his pa ssa ge in Wesin ger explicit ly discloses
t h a t , r espon sive t o t h e con n ect ion r equ est , a n IP a d-
dr ess . . . of a n et wor k device is pr ovided ba sed on a
dom a in n a m e . . . t ha t is in clu ded in t h e con n ect ion
r equ est . Vir n etX II, 2015 WL 2251196, a t *3 (in t er n a l
cit a t ion s om it t ed). Vir n et X does n ot ch a llen ge t h is a spect
of t h e P TABs fin din g. S ee Appella n t s Br . 6667. Th u s,
t h e r ecor d su ppor t s t h e P TABs fin din g t h a t Wesin ger
discloses t h e dispu t ed lim it a t ion .
b. Cla im s 89 a n d 2223
Cla im s 8 a n d 22 r equir e t h a t a t lea st on e of t h e fir st
n et wor k device a n d t h e secon d n et wor k device r ecit ed in
cla im s 1 a n d 16 is a m obile device, a n d cla im s 9 a n d 23
fu r t h er r equ ir e t h a t t h e m obile device be a n ot ebook
com pu t er . 697 pa t en t col. 56 ll. 4347 (cla im s 89),
col. 58 ll. 15 (cla im s 2223). Vir n et X a rgu es t h a t su b-
st a n t ia l eviden ce does n ot su ppor t t h e P TABs fin din g
t h a t Wesin ger discloses a n ot ebook com pu t er . Appel-
la n t s Br . 6768. Accor din g t o Vir n et X, t h e P TAB
a ckn owledged t h a t Wesin ger discloses on ly a com pu t er ,
bu t n ever t h eless pr oceeded t o specu la t ewit h ou t a n y
eviden ce wh a t soevert h a t a P H OSITA wou ld ha ve
fou n d t h a t Wesin ger a lso discloses a n ot ebook com pu t er .
Id . a t 68.
[T]h e disclosu r e of a sm a ll gen u s m a y a nt icipa t e t h e
species of t h a t gen u s even if t h e species a r e n ot t h em -
selves r ecit ed. Br istol-Myer s S qu ibb Co. v. Ben Ven u e

La bs., In c., 246 F .3d 1368, 1380 (F ed. Cir . 2001) (cit a t ion
om it t ed). Wh et h er a sm a ll gen u s a n t icipa t es a species
wit h in t ha t gen u s depen ds on t h e fa ct u a l a spect s of t h e
specific disclosu r e a n d t h e pa r t icu la r pr odu ct s a t issu e.
S a n ofi-S yn th ela bo v. Apotex, In c., 550 F .3d 1075, 1083
(F ed. Cir . 2008) (cit a t ion om it t ed). [H ]ow [a P H OSITA]
wou ld u n der st a n d t h e r ela t ive size of a genu s or species in
a pa r t icu la r t ech n ology is a fa ct u a l qu est ion of cr it ica l
im por t a n ce. OS RAM S ylva n ia , In c. v. Am . In d u ction
Tech s., In c., 701 F .3d 698, 706 (F ed. Cir . 2012).
Su bst a n t ia l eviden ce su ppor t s t h e P TABs fin din g
t h a t Wesin ger s disclosu r e of t h e gen u s com pu t er en -
com pa sses t h e n ot ebook com pu t er species. Wesin ger
u n dispu t edly discloses a com pu t er . S ee, e.g., Wesin ger
col. 14 ll. 78; see a lso id . col. 14 ll. 2123 (expla in in g t h a t
t h e soft wa r e su ppor t in g t h e cla im ed fir ewa ll cou ld r u n on,
in t er a lia , a su per -m in icom pu t er ). Th e P TAB r ea son ed
t h a t , a t t h e t im e of t h e in ven t ion (i.e., wh en t h e in ven t or
filed t h e a pplica t ion lea din g t o Wesin ger in 1996), a
P H OSITA would h a ve u n der st ood t h a t a n ot ebook
com pu t er is a com pu t er a n d im m edia t ely wou ld h a ve
en vision ed Wesin ger a s descr ibin g bot h deskt op a n d
n ot ebook com pu t er s a s bot h t ypes of com pu t er s wou ld
h a ve been u sed t o con n ect t o n et wor ks. Vir n etX II, 2015
WL 2251196, a t *6; see P h illips v. AWH Cor p., 415 F .3d
1303, 1313 (F ed. Cir . 2005) (en ba n c) (descr ibing t h e t im e
of t h e in ven t ion a s t h e effect ive filin g da t e of t h e pa t en t
a pplica t ion (cit a t ion s om it t ed)). In r ea ch in g t h a t con clu -
sion , t h e P TAB per m issibly r elied u pon it s exper t ise a n d
t h e exper ien ce of it s m em ber s t o r esolve t h e r ela t ively
sim ple qu est ion of wh et h er Wesin ger s com pu t er disclo-
su r e en com pa sses a n ot ebook com pu t er . S ee Beld en , 805
F .3d a t 1079. In so doin g, t h e P TAB did not a ddr ess m or e
com plex qu est ion s a bou t com pu t er t ech n ology wh ose
r esolu t ion wou ld benefit fr om essen t ia l exper t t est im on y.
S ee S yn opsys, 814 F .3d a t 1320. Th u s, su bst a n t ia l evi-
den ce su ppor t s t h e P TABs fin din g t h a t Wesin ger a n t ici-

pa t es cla im s 89 a n d 2223.
2. Obviou sn ess
F in a lly, we t u r n t o t h e P TABs obviou sn ess fin din gs.
A pa t en t cla im is inva lid if t h e differ en ces bet ween t h e
su bject m a t t er sou gh t t o be pa t en t ed a n d t h e pr ior a r t a r e
su ch t h a t t h e su bject m a t t er a s a wh ole wou ld h a ve been
obviou s a t t h e t im e t h e in ven t ion wa s m a de t o a
[P H OSITA] t o wh ich sa id su bject m a t t er per t a in s. 35
U.S.C. 103(a ) (2006). 4 Obviou sn ess is a qu est ion of la w
ba sed on u n der lyin g fin din gs of fa ct , In r e Ga r tsid e, 203
F .3d 1305, 1316 (F ed. Cir . 2000), in clu ding (1) t h e scope
a n d con t en t of t h e pr ior a r t , (2) differ en ces bet ween t h e
pr ior a r t a n d t h e cla im s a t issu e, (3) t he level of or di-
n a r y skill in t h e per t in en t a r t , a n d (4) t h e pr esen ce of
secon da r y con sider a t ion s of n on obviou sn ess su ch a s
com m er cia l su ccess, lon g felt bu t u n solved n eeds, fa ilu r e
of ot h er s, a n d u n expect ed r esu lt s. Gr a h a m v. J oh n Deer e
Co. of Ka n . City, 383 U.S. 1, 17 (1966); see Un ited S ta tes v.
Ad a m s, 383 U.S. 49, 5052 (1966).
Th e P TAB fou n d t h a t cla im s 47 a n d 1821 would
h a ve been obviou s over a com bin a t ion of t wo pr ior a r t
r efer en cesWesin ger a n d M. H a n dley et a l., S IP : S ession
In itia tion P r otocol (Net wor k Wor kin g Gr p. Requ est for
Com m en t s: 2543, Ma r ch 1999) (RF C 2543) (J .A. 2566).
Vir n etX II, 2015 WL 2251196, a t *68. Depen den t cla im s
47 depen d dir ect ly or in dir ect ly fr om cla im 1 a n d pr ovide
S ee 697 pa t en t col. 56 ll. 3342. Depen den t cla im s 1821
4 Con gr ess a m en ded 103 wh en it pa ssed t h e AIA.

P u b. L. No. 112-29, 3(c), 125 St a t . a t 287. H owever ,
beca u se t h e a pplica t ion t h a t led t o t h e 697 pa t en t wa s
filed befor e Ma r ch 16, 2013, t h e pr e-AIA 103 a pplies.
Id . 3(n )(1), 125 St a t . a t 293.

S ee id . col. 57 ll. 2332.
In st ea d of a ddr essin g t h e P TABs pa r t icu la r fin din gs
a s t o t h e com bin a t ion of Wesin ger a n d RF C 2543, Vir n et X
a r gu es t h a t it pr esen t ed exper t t est im on y on t h e pr ior a r t
r efer en ces a n d t h a t , ra t h er t h a n a ccept in g t h is u n con t r o-
ver t ed exper t t est im on y, t h e [P TAB] r ea ched t h e opposit e
con clu sion . Appella n t s Br . 69. Vir n et X a r gu es a n ew
t h a t t h e P TAB m a y n ot m a ke fa ct u a l fin din gs in t h e
a bsen ce of a n y su ppor t in g r ecor d exper t t est im on y. Id .
Vir n et Xs a r gu m en t s do n ot dem on st r a t e a la ck of
su bst a n t ia l eviden ce in su ppor t of t h e P TABs obviou sn ess
fin din gs. As st a t ed a bove in Sect ion II.C, t h e P TAB m a y
m a ke fa ct u a l fin din gs a bsen t exper t t est im on y. H er e, t h e
P TAB exa m in ed Wesin ger a n d RF C 2543 a n d fou n d t h a t
t h e r efer en ces do n ot t ea ch a wa y fr om on e a n ot h er , cit in g
va r iou s a spect s of Wesin ger a n d RF C 2543 t o su ppor t it s
con clu sion . S ee Vir n etX II, 2015 WL 2251196, a t *68; see
a lso Wa r sa w, 832 F .3d a t 1333 (A r efer en ce t ea ch es a wa y
wh en a [P H OSITA], u pon r ea din g t h e r efer en ce, wou ld be
discou r a ged fr om followin g t h e pa t h set ou t in t h e r efer -
en ce. (in t er n a l qu ot a t ion m a r ks, br a cket s, a n d cit a t ion
om it t ed)). Beca u se Vir n et X does n ot con t est t h e P TABs
specific fin din gs, we declin e t o r eview t h em . S ee Ca r d u cci
v. Rega n , 714 F .2d 171, 177 (D.C. Cir . 1983) (Th e pr em -
ise of ou r a dver sa r ia l syst em is t h a t a ppella t e cou r t s do
n ot sit a s self-dir ect ed boa r ds of lega l in qu ir y a n d r e-
sea r ch , bu t essen t ia lly a s a r bit er s of lega l qu est ion s
pr esen t ed a n d a r gu ed by t h e pa r t ies befor e t h em .).
C ON CLUSION
Th e P TAB fou n d t h e su bject cla im s of t h e 697 pa t en t
in va lid for ot h er r ea son s. S ee gen er a lly Vir n etX I, 2015
WL 2251195. H owever , beca u se we a ffir m t h e P TABs
con clu sion s in Vir n etX II, we do n ot a ddr ess t h e P TABs
det er m in a t ion s in Vir n etX I. S ee Glea ve, 560 F .3d a t 1338
(declin in g t o a ddr ess a lt er n a t ive gr ou n ds of in va lidit y

wh en t h e cou r t u ph olds on e su ch gr ou n d). Th u s, for t h e
for egoin g r ea son s, t he F ina l Wr it t en Decision s of t h e U.S.
P a t en t a n d Tr a dem a r k Offices P a t en t Tr ia l a n d Appea l
Boa r d a r e
AF F I R ME D
N OTE : Th is disposit ion is n on pr eceden t ia l.

______________________
VI R N E T X I N C .,
Appella n t
v.
AP P L E I N C .,
Appellee
______________________
2015-1934, 2015-1935
______________________
Appea ls fr om t h e Un it ed St a t es P a t en t a n d Tr a de-
m a r k Office, P a t en t Tr ia l a n d Appea l Boa r d in Nos.
IP R2014-00237, IP R2014-00238.
______________________
OM ALLE Y, Cir cu it J u d ge, dissen t in g.

Beca u se t h e Boa r d ba sed it s fa ct u a l fin din gs on a n in -
a dequ a t e r ecor d, I dissen t fr om t oda ys ju dgm en t s. Alt -
h ou gh t h er e is n o per se r equ ir em en t t h a t t h e Boa r d r ely
on exper t t est im on y t o r ea ch a fin din g of in va lidit y, t h is
cou r t h a s lon g r ecogn ized t h a t exper t t est im on y r ega r d-
in g m a t t er s beyon d t h e com pr eh en sion of la yper son s is
som et im es essen t ia l, pa r t icu la r ly in ca ses in volvin g
com plex t ech n ology. Wyer s v. Ma ster Lock Co., 616 F .3d
1231, 1240 n .5 (F ed. Cir . 2010) (qu ot in g Cen tr icu t, LLC v.
E sa b Gr p., In c., 390 F .3d 1361, 136970 (F ed. Cir . 2004));
see a lso P er fect Web Tech s., In c. v. In foUS A, In c., 587 F .3d
1324, 1330 (F ed. Cir. 2009) (If t h e r eleva n t t ech n ology

wer e com plex, t h e cou r t m igh t r equir e exper t opin ion s.);
P r over is S ci. Cor p. v. In n ova system s, In c., 536 F .3d 1256,
1267 (F ed. Cir . 2008) (a ffir m in g t h e dist r ict cou r t s r e-
qu ir em en t of exper t t est im on y t o pr ove in va lidit y wh er e
t h [e] su bject m a t t er [wa ]s su fficien t ly com plex t o fa ll
beyon d t h e gr a sp of a n or din a r y la yper son ).
Th is m a t t er is n ot , a s Apple su ggest s, t h e except ion a l
ca se in wh ich t h e r efer en ces a n d t h e in ven t ion a r e ea sily
u n der st a n da ble, su ch t h a t Boa r d m em ber s, beca u se of
exper t ise, m a y . . . find it ea sier t o u n der st a n d a n d sou n d-
ly expla in t h e t ea ch in gs a n d su ggest ions of pr ior a r t
wit h ou t exper t a ssist a n ce. Beld en v. Ber k-Tek LLC, 805
F .3d 1064, 1079 (F ed. Cir . 2015) (qu ot in g Wyer s, 616 F .3d
a t 1242). Beld en , for exa m ple, in volved on ly a sim ple
poin t in a m ech a n ica l field a n d on e ver y close piece of
pr ior a r t . Id . a t 1074. H er e, t h e cla im s a t issu e cover
m or e com plex t ech n ology (est a blish in g secu r e com m u n ica -
t ion s bet ween m u lt iple n et wor k devices for video/a u dio
da t a t r a n sm ission ) a n d t h e Boa r ds in va lidit y fin din g wa s
pr em ised on com bin a t ion s of m u lt iple pieces of pr ior a r t .
In deed, Apple it self su bm it t ed over fou r h u n d r ed pa g-
es of exper t t est im on y below in su ppor t of it s in va lidit y
con t en t ion s, a ppa r en t ly believin g su ch a det a iled r ecor d
wa s n ecessa r y. It wa s on ly on ce it s own exper t s t est im o-
n y wa s pr oven u n r elia ble t h a t Apple swit ch ed gea r s a n d
cla im ed t h a t it h a d n o obliga t ion t o pr esen t exper t t est i-
m on y. Apple fir st con t en ds t h a t t h e Boa r d a ct u a lly did
r ely on exper t t est im on y t o su ppor t it s con clu sion s be-
ca u se it cit ed t o a dm ission s fr om Vir n et Xs exper t t o
su ppor t it s con clu sion s. Th a t a r gu m en t is a n on st a r t er .
Apple pr ovides on ly a h a n dfu l of exa m ples on t h is poin t ,
cover in g a sin gle fa ct u a l fin din g, r eleva n t t o on ly on e
a spect of on e of t h e t wo pr oceedin gs befor e u s, a poin t
Apples cou n sel con ceded a t or a l a r gu m ent . Or a l Ar gu -
m en t a t 20:4920:58, a va ila ble a t h t t p://or a la r gu m en t s.
ca fc.u scou r t s.gov/defa u lt .a spx?fl=2015-1934.m p3 (Th e
Boa r d specifica lly r efer r ed t o Vir n et Xs exper t on t h e

issu e of t ea ch in g a wa y. . . . On som e ot h er issu es, t h e
Boa r d fou n d t h a t Vir n et Xs exper t wa s n ot cr edible.).
Th e Boa r ds opin ion s, of cou r se, go sign ifica n t ly fa r t h er
t h a n t h a t single issu e.
Apple n ext con t en ds t h a t t h e Boa r d wa s fr ee t o r ea ch
con clu sion s a bou t wh a t on e of skill in t h e a r t wou ld glea n
fr om t h e m u lt iple pr ior a r t r efer en ces a t issu e in t h e
a bsen ce of exper t t est im on y beca u se it cou ld r ely on it s
own exper t ise t o a ssess t h ose r efer en ces. Th a t a r gu m en t
a lso fa ils. Wh ile it is cer t a in ly t r u e, a s t h e m a jor it y n ot es,
t h a t t h e Boa r ds exper t ise pla ys a r ole in in t er pr et in g
r ecor d eviden ce, it m a y n ot a ct a s a su bst it u t e for su ch
eviden ce. Ma j. Op. a t 8 (qu ot in g Br a n d v. Miller , 487 F .3d
862, 869 (F ed. Cir . 2007)). Wh er e, a s h er e, t h e t ech n ology
a t issu e is com plex, t h er e a r e m u lt iple pr ior a r t r efer en ces
t h a t m u st be com bined t o su ppor t t h e Boa r ds in va lidit y
con clu sion s, a n d t h er e is su bst a n t ia l dispu t e r ega r din g
wh a t on e of skill in t h e a r t a t t h e r eleva n t t im e fr a m e
wou ld h a ve glea n ed fr om t h ose pr ior a r t r efer en ces, t h e
Boa r d m u st poin t t o a ct u a l eviden ce in t h e r ecor d t o
su ppor t it s con clu sion s. It is t ellin g t ha t t h e Boa r ds
con clu sion s pr ecisely follow t h e con clu sion s la id ou t in t h e
len gt h y exper t t est im on y t h e Boa r d cla im ed t o ign or e.
In pa r t icu la r , t h is ca se bea r s a st r ikin g resem bla n ce
t o Br a n d , wh er e t h e Boa r d r eject ed a s u n con vin cin g t h e
on ly r eleva n t t est im on y, bu t n ever t h eless fou n d t h a t on e
skilled in t h e a r t . . . wou ld h a ve r ecogn ized h ow cer t a in
elem en t s depict ed in t h e pr ior a r t cou ld h a ve been a r -
r a n ged t o per for m a cla im ed m et h od. Br a n d , 487 F .3d a t
870. H er e, despit e discla im in g a n y r elia nce on t h e on ly
su ppor t in g exper t t est im on y, t h e Boa r d m a de fin din gs a s
t o wh a t t h e pr ior a rt im plies, su ggest s, a n d t ea ch es t o-
wa r ds (or a wa y fr om ), in a ddit ion t o h ow cer t a in t er m s or
com bin a t ion s of fea t ur es wou ld h a ve been u n der st ood by
on e of or din a r y skill in t h e a r t . Apple In c. v. Vir n etX
In c., No. IP R2014-00238, 2014 WL 1995380 a t *3, 78, 14
(P .T.A.B. Ma y 14, 2014); Apple In c. v. Vir n etX In c., No.

IP R2014-00237, 2014 WL 1995379 a t *1516, 1920
(P .T.A.B. Ma y 14, 2014). As in Br a n d , t h e det a iled
n a t u r e of t h e fin din gs t h a t t h e Boa r d fou n d n ecessa r y t o
m a ke dem on st r a t es t h e ina ppr opr ia t en ess of it s a p-
pr oa ch it a ppea r s t o h a ve sim ply su bst it u t ed it s own
exper t ise for r ecor d eviden ce. Br a n d , 487 F .3d a t 870.
Allowing t h e Boa r d t o con t in u e t h is pr a ct icediscla im in g
r elia n ce on t h e on ly su ppor t in g exper t t est im on y yet
r ea ch in g t h e exa ct sa m e con clu sion s pr opou n ded t h er e-
in wou ld only exa cer ba t e t h e t r en d t owa r ds a h a ze of
so-ca lled exper t ise t h a t t h is cou r t a n d t h e Su pr em e Cou r t
h a ve a dm on ish ed a ga in st . Br a n d , 487 F .3d a t 869 (qu ot -
in g Ba ltim or e & Oh io R.R. Co., 393 U.S. 87, 92 (1968)).
Beca u se t h er e wa s in a dequ a t e com pet en t eviden ce on t h e
r ecor d t o su ppor t t h e Boa r ds ju dgm en t s, I wou ld r ever se.
CERTIFICATE OF SERVICE
I, Naveen Modi, hereby certify that on January 9, 2017, the foregoing
Appellant VirnetX Inc.s Petition for Rehearing En Banc was filed using the
Courts CM/ECF system and served on the parties counsel of record via ECF.
Additionally, 16 paper copies of the Petition for Rehearing En Banc will
be filed with the Court within the time provided in the Courts rules.
Date: January 9, 2017 BY: /s/Naveen Modi

Naveen Modi
PAUL HASTINGS LLP
Tel.: (202) 551-1700
Fax: (202) 551-1705

Virnetx Appeal 192017 Vinertx v. Apple

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Virnetx Appeal 192017 Vinertx v. Apple

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Case: 15-1934 Document: 72 Page: 1 Filed: 01/09/2017

United States Court of Appeals

Appeals from the United States Patent and Trademark Office,

APPELLANT VIRNETX INC.S

Counsel for Appellant VirnetX Inc.

1. The full name of every party or amicus represented by us is:

2. The name of the real party in interest represented by us is:

VirnetX Inc. is a wholly owned subsidiary of VirnetX Holding

Paul Hastings LLP:

Finnegan, Henderson, Farabow, Garrett, & Dunner, LLP:

*No longer with the firm.

Dated: January 9, 2017 /s/Naveen Modi

STATEMENT OF COUNSEL .................................................................................. 1

STATEMENT OF THE CASE ..................................................................................4

I. THE PANELS DECISION CANNOT BE RECONCILED WITH

II. THE MAJORITYS ERRONEOUS DECISION WILL HAVE

Alexsam, Inc. v. IDT Corp.,

Aspex Eyewear, Inc. v. Concepts in Optics, Inc.,

Proveris Sci. Corp. v. Innovasystems, Inc.,

relied on patent challengers extensive expert testimony regarding the challenged

absence of any expert testimony supporting the findings of invalidity, as to which

Based on my professional judgment, I believe (1) the panel decision is

2004); and (2) this appeal requires an answer to a precedent-setting question of

exceptional importance: Whether, in a case involving undisputedly complex

patent challenger carried its burden of proof of establishing invalidity in the

art would have interpreted patent claims and asserted references.

testimony will be necessary in cases involving complex technology. Centricut,

for expert evidence in understanding the asserted references or determining

relied on the reasoning and conclusions in the expert testimony it ostensibly

invalidated all the challenged claims as either anticipated or obvious.

excusing the patent challenger from his burden of proof.

this Courts repeated admonition that expert testimony is typically required to

understand patent claims and references, especially in cases of complex

the invention are easily understandable. Dissenting Opinion (Dis. Op.) 2

(citation omitted) (emphasis added).

This is a question of exceptional importance that will affect numerous Board

Board, in any case where expert testimony is challenged, to simply disclaim[]

conclusions, and then shroud these conclusions in a haze of so-called

STATEMENT OF THE CASE

communications over public Internet networks, such as those involving business

initiating secure communications over a network via a request to look up an

domain name server. See Op. 3-5.

Apple commenced two IPR proceedings challenging the patentability of

Apples purported expert over 55 times in its institution decisions.

complex technology, the level of skill required a masters degree in computer

science or engineering combined with a multi-year experience in computer

consisted of having occasionally reviewed computer networking products for a

technology publication. Moreover, after he was retained, this purported expert

among other proclamations evincing bias, Appx5911. Having exposed Apples

weight and, therefore, judgment should be entered against Apple.

The Boards response was ostensibly to disclaim any reliance on this

proceeded to make detailed findings of anticipation and obviousness, including

asserted references, see, e.g., Appx29; Appx48-54; Appx85-86; Appx89-91

findings that precisely follow[ed] the conclusions of Apples discredited expert,

or obvious over various asserted references. Op. 2; Appx55; Appx92.

technology at issue was complex, or that it is impermissible for the [PTAB] to

asserted prior art for the experts. Op. 8-9.

Judge OMalley dissented, and would have reversed. This Courts

precedents, she observed, instruct that, as a general rule, expert testimony is

essential to prove invalidity, and particularly in cases involving complex

claims at issue cover more complex technology (establishing secure

communications between multiple network devices for video/audio data

transmission) and the Boards invalidity finding was premised on combinations of

four hundred pages of expert testimony below in support of its invalidity