Virnetx Inc. v. Apple Inc.

665 F. App'x 880
Court of Appeals for the Federal Circuit·Decided December 9, 2016·No. 2015-1934, 2015-1935·Unpublished·Cited by 9 cases

Opinions

Dissenting opinion filed by Circuit Judge O’Malley.

Wallach, Circuit Judge.

In separate petitions, Appellee Apple Inc. (“Apple”) sought inter partes review of claims 1-11, 14-25, and 28-30 of U.S. Patent No. 8,504,697 (“the ’697 patent”) before the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (“PTAB”). The PTAB instituted reviews of the subject claims and, in separate final written decisions, found the subject claims anticipated by or obvious over various prior art references. See Apple Inc. v. VirnetX Inc. (VirnetX I), No. IPR2014-00237, 2015 WL 2251195 (P.T.A.B. May 11, 2015); Apple Inc. v. VirnetX Inc. (VirnetX II), No. IPR2014-00238, 2015 WL 2251196 (P.T.A.B. May 11, 2015).

Appellant VirnetX Inc, (“VirnetX”), the assignee- of the ’697 patent, appeals. We affirm, resolving the subject appeals on the grounds discussed by the PTAB in Vir-netX II.

[882] Discussion

I. Subject Matter Jurisdiction and Standard of Review

We possess subject matter jurisdiction pursuant to 28 U.S.C. § 1295(a)(4)(A) (2012). “We review the PTAB’s factual findings for substantial evidence and its legal conclusions de novo.” Redline Detection, LLC v. Star Envirotech, Inc., 811 F.3d 435, 449 (Fed. Cir. 2015) (citation omitted). “Substantial evidence is more than a mere scintilla” of evidence, Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938), but “less than the weight of the evidence,” Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966).

II. The PTAB Properly Found Claims 1-11, 14-25, and 28-30 of the ’697 Patent Invalid

VirnetX challenges various aspects of VirnetX II. In particular, VirnetX alleges that the PTAB (1) misconstrued various limitations of claims 1, 3, and 16-17 of the ’697 patent, Appellant’s Br. 36-52; (2) made unpatentability findings in the absence of supporting expert evidence, id. at 30-36; and (3) failed to apply the proper legal standard in its anticipation analysis and otherwise did not support its anticipation and obviousness findings with substantial evidence, id, at 61-69. After briefly discussing the ’697 patent’s contents, we address the arguments in turn.

A. The’697 Patent

A brief review of Internet communications will provide the context necessary to understand the invention claimed in the '697 patent. Communications over the Internet generally follow the Transmission Control Protocol/Internet Protocol, under which each computer connected to the Internet possesses a unique Internet Protocol (“IP”) address (e.g., 123.345.6.7) that allows other computers to identify that computer. A domain name server (“DNS”) generally links an IP address to a particular domain name (e.g., www.pbs.org).

Entitled “System and Method Employing an Agile Network Protocol for Secure Communications Using Secure Domain Names,” the ’697 patent “provides key technologies for implementing a secure virtual Internet by using a new agile network protocol that is built on top of [an] existing” IP address. ’697 patent col. 611. 23-25. As relevant here, the ’697 patent recites the use of a proxy DNS to establish a secure network. Id. col. 39 1. 29-col. 42 1. 16. Under the protocol disclosed by the ’697 patent, a first device requests a connection to a second device using the domain name of that second device, after which the proxy DNS receives the request and looks up the IP address of the second device. Id. col. 4011. 4-30. Before returning an IP address to the first device, the proxy DNS determines whether the first device is requesting access to a secure domain name and has sufficient security privileges before returning an IP address to the first device. Id. col. 40 11. 32-38, col. 4111. 6-16, col. 41 1. 47-col. 42 1. 16. If it does, the proxy DNS initiates a secure connection to create a virtual private network (“VPN”) between the first and second devices. Id. col. 40 11. 31-49. When the proxy DNS establishes the VPN, the proxy DNS does not reveal the actual IP address of the target device, thus providing the secure communication that the invention claims. Id. col. 4011.1-20.

The instant appeals concern claims 1-11, 14-25, and 28-30 of the ’697 patent. Independent claim 1 is representative and recites

[a] method of connecting a first network device and a second network device, the method comprising:
[883] intercepting, from the first network device, a request to look up an ... [IP] address of the second network device based on a domain name associated with the second network device; determining, in response to the request, whether the second network device is available for a secure communications service; and
initiating a secure communication link between the first network device and the second network device based on a determination that the second network device is available for the secure communications service;
wherein the secure communications service uses the secure communication link to communicate at least one of video data and audio data between the first network device and the second network device.

Id. col. 5611.11-27. Dependent claims 2-11 and 14-15 depend directly or indirectly from claim 1 and provide additional limitations to the method disclosed in .claim 1. See id. col. 56 11. 28-53 (claims 2-11), col. 561. 65-eol. 571. 3 (claims 14-15). Independent claim 16 covers a system configured to perform the method of claim 1. See id. col. 57 11. 4-21. Dependent claims 17-25 and 28-30 depend directly or indirectly from claim 16 and provide additional limitations to the system disclosed in claim 16. See id. col. 571. 21-col. 58 1.10 (claims 17-25), col. 5811.21-31 (claims 28-30).

B. The Construction of the Subject Claims

We begin with the construction of various claims in the ’697 patent. VirnetX challenges the PTAB’s construction of three limitations in the subject claims: “secure communication link” in claims 1 and 16, Appellant’s Br. 36-48; “determining ... whether the second network device is available” in the same claims, id. at 49-52, 64-65; and “virtual private network communication link” in claims 3 and 17, id. at 48-49.

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Virnetx Inc. v. Apple Inc., 665 F. App'x 880 (Fed. Cir. 2016).

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