Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-15-01934/USCOURTS-ca13-15-01934-0/pdf.json

Parties Involved:
Apple Inc.
Appellee
VirnetX Inc.
Appellant

Document Text:

NOTE: This disposition is nonprecedential.

United States Court of Appeals 

for the Federal Circuit ______________________ 

VIRNETX INC.,

Appellant

v.

APPLE INC.,

Appellee

______________________ 

2015-1934, 2015-1935

______________________ 

Appeals from the United States Patent and Trademark Office, Patent Trial and Appeal Board in Nos. 

IPR2014-00237, IPR2014-00238.

______________________ 

Decided: December 9, 2016

______________________ 

IGOR VICTOR TIMOFEYEV, Paul Hastings LLP, Washington, DC, argued for appellant. Also represented by 

NAVEEN MODI, JOSEPH PALYS. 

JOHN C. O’QUINN, Kirkland & Ellis LLP, Washington, 

DC, argued for appellee. Also represented by NATHAN S.

MAMMEN; JEFFREY PAUL KUSHAN, SCOTT BORDER, THOMAS 

ANTHONY BROUGHAN, III, SAMUEL DILLON, RYAN C.

MORRIS, ANNA MAYERGOYZ WEINBERG, Sidley Austin LLP, 

Washington, DC; RAQUEL C. RODRIGUEZ, Houston, TX. 

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2 VIRNETX INC. v. APPLE INC. 

______________________ 

Before O’MALLEY, MAYER, and WALLACH, Circuit Judges.

Opinion for the court filed by Circuit Judge WALLACH. 

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 VirnetX 

II. 

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 (1938), but “less than the weight of the 

evidence,” Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 

620 (1966).

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VIRNETX INC. v. APPLE INC. 3

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. 6 ll. 23–25. As 

relevant here, the ’697 patent recites the use of a proxy 

DNS to establish a secure network. Id. col. 39 l. 29–col. 

42 l. 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 

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4 VIRNETX INC. v. APPLE INC. 

address of the second device. Id. col. 40 ll. 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 ll. 32–38, col. 41 ll. 6–16, col. 41 l. 47–

col. 42 l. 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 ll. 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. 40 ll. 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:

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;

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VIRNETX INC. v. APPLE INC. 5

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. 56 ll. 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 ll. 28–53 (claims 2–11), col. 56 l. 65–col. 57 

l. 3 (claims 14–15). Independent claim 16 covers a system 

configured to perform the method of claim 1. See id.

col. 57 ll. 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. 57 l. 21–col. 58 l. 10 (claims 17–25), col. 58 

ll. 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.

Two separate reasons counsel against construing the 

disputed limitations. First, in challenging the PTAB’s 

conclusion in VirnetX II that the subject claims are invalid, VirnetX does not dispute that the relevant prior art 

references disclose, teach, or suggest “secure communication link” and “virtual private network communication 

link.” See Appellant’s Br. 61–69. As a result, the proper 

construction of these limitations has no bearing on our 

review of the PTAB’s anticipation and obviousness findings in VirnetX II. Accordingly, we will not construe 

them. Cf. Hoffer v. Microsoft Corp., 405 F.3d 1326, 1329 

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6 VIRNETX INC. v. APPLE INC. 

(Fed. Cir. 2005) (“We review only the construction of the 

‘whereby’ clause, for the ‘interactive’ limitation therein 

suffices to support the district court’s finding of noninfringement.”).

Second, as to “determining . . . whether the second 

network device is available” in claims 1 and 16, VirnetX 

has waived its arguments on the construction of this 

limitation. The waiver doctrine “preclude[s] a party from 

adopting a new claim construction position on appeal.” 

Interactive Gift Express, Inc. v. Compuserve Inc., 256 F.3d 

1323, 1346 (Fed. Cir. 2001) (citations omitted). In its 

Patent Owner Response in IPR2014-00238, VirnetX noted 

its disagreement with the PTAB’s construction of the 

subject limitation in IPR2014-00237.1 J.A. 10296–300. 

However, for purposes of IPR2014-00238, VirnetX concluded that the subject “claim language is plain on its 

face[] and . . . does not require construction.” J.A. 10299–

300. In VirnetX II, the PTAB acknowledged that VirnetX 

disputed the PTAB’s construction of the limitation in 

IPR2014-00237, but “decline[d] to construe the term” in 

IPR2014-00238 because VirnetX did “not specify how the 

construction of the term . . . is relevant in the present 

proceeding.” 2015 WL 2251196, at *3. On appeal, VirnetX now specifies how the construction of the disputed 

limitation purportedly bears on the issues before us. See 

Appellant’s Br. 64–65. Because VirnetX did not present 

these arguments to the PTAB, they are waived. See 

Interactive Gift, 256 F.3d at 1346. 

 

1 As stated above, the PTAB issued VirnetX I in 

IPR2014-00237 and VirnetX II in IPR2014-00238.

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VIRNETX INC. v. APPLE INC. 7

C. The PTAB May Make Factual Findings Absent Expert 

Testimony 

We next address VirnetX’s contention that the PTAB 

unlawfully made various factual findings in its anticipation and obviousness inquiries. According to VirnetX, the 

PTAB cannot “make factual findings regarding what [a 

person having ordinary skill in the art (‘PHOSITA’)]

would have understood with respect to the [prior art] 

references in the absence of any supporting expert testimony” except in cases involving “simple” technology. 

Appellant’s Br. 31, 34. And because “the technology 

involved is undisputedly complex,” VirnetX avers that the 

PTAB could not have made “unpatentability findings in 

the absence of any supporting expert evidence.” Id. at 31.

VirnetX’s argument ignores governing law. In Belden 

Inc. v. Berk-Tek LLC, we held that “[n]o rule requires . . . an expert [to] guid[e] the [PTAB] as to how it 

should read prior art.” 805 F.3d 1064, 1079 (Fed. Cir. 

2015). PTAB “members, because of expertise, may more 

often find it easier to understand and soundly explain the 

teachings and suggestions of prior art without expert 

assistance.” Id. Thus, to the extent that VirnetX contends that the PTAB must consider expert testimony, no 

authority supports that proposition.

Nevertheless, “what the [PTAB] can find without an 

expert depends on the prior art involved in a particular 

case.” Synopsys, Inc. v. Mentor Graphics Corp., 814 F.3d 

1309, 1320 (Fed. Cir. 2016) (internal quotation marks, 

brackets, and citation omitted). If the PTAB finds “that 

the technology in a particular case is sufficiently complex 

that expert testimony is essential,” it may rely upon that 

evidence. Id. (emphasis added). But even if the record 

contains such testimony, the PTAB must weigh that 

testimony against other record evidence in reaching its 

conclusion, and it may give that testimony less weight, so 

long as it supports its decision with substantial evidence. 

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See id.; see also Trs. of Columbia Univ. v. Illumina, Inc., 

620 F. App’x 916, 922 (Fed. Cir. 2015) (“The PTAB [is]

entitled to weigh the credibility of the witnesses in light of 

their qualifications and evaluate their assertions accordingly.” (citations omitted)). Thus, even if the record 

contains expert testimony, the law does not require the 

PTAB to rely upon it.

Finally, VirnetX alleges that, “in contested proceedings,” the PTAB may not “improperly substitute[] its own 

analysis of the [prior art] references” for the expert’s. 

Appellant’s Br. 33. We disagree. Although “it is impermissible for the [PTAB] to base its factual findings on its 

expertise, rather than on evidence in the record,”2 the 

PTAB’s “expertise appropriately plays a role in interpreting record evidence.” Brand v. Miller, 487 F.3d 862, 869 

(Fed. Cir. 2007). And to fulfill its duties, the PTAB must 

“make the necessary findings” based on a review of the 

complete “administrative record,” as well as provide “a 

full and reasoned explanation” in support of its decision. 

In re Lee, 277 F.3d 1338, 1342 (Fed. Cir. 2002) (citations 

 

2 At various points, the dissent alleges that the record contains no evidence to support the PTAB’s findings. 

See Dissent at 3 (arguing that the PTAB failed to “point to 

the actual evidence in the record to support its conclusions”). At others, it alleges that the record contains 

“inadequate competent evidence.” Id. at 4. As explained 

below in Section II.D, the record contains substantial 

evidence to support the PTAB’s findings. The dissent 

essentially objects to the weight that the PTAB afforded 

to one aspect of the record—i.e., the expert testimony. See 

generally id. (discussing the relevance of expert testimony). The weighing of that evidence against other valid 

evidence simply is not a role of this court. See In re 

Warsaw Orthopedic, Inc., 832 F.3d 1327, 1333 (Fed. Cir. 

2016) (“We may not reweigh th[e] evidence on appeal.”). 

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VIRNETX INC. v. APPLE INC. 9

omitted). VirnetX’s view of the law would require the 

PTAB to abandon these duties.

D. The PTAB Properly Found the Subject Claims Anticipated by, or Obvious over, the Prior Art

We next address the PTAB’s conclusions that the subject claims are anticipated by, or would have been obvious 

over, various prior art references. VirnetX challenges 

both the PTAB’s anticipation and obviousness findings, so 

we address them in turn.

1. Anticipation

“A person shall be entitled to a patent unless,” inter 

alia, “the invention was described in . . . a patent granted 

on an application for patent by another filed in the United 

States before the invention by the applicant for patent . . . .” 35 U.S.C. § 102(e) (2006).3 A prior art reference anticipates a patent’s claim under § 102(e) “when the 

four corners of [that] . . . document describe every element 

of the claimed invention, either expressly or inherently, 

such that a [PHOSITA] could practice the invention 

without undue experimentation.” Spansion, Inc. v. Int’l 

Trade Comm’n, 629 F.3d 1331, 1356 (Fed. Cir. 2010) 

(internal quotation marks and citation omitted). “Anticipation is a question of fact that we review for substantial 

evidence.” Blue Calypso, LLC v. Groupon, Inc., 815 F.3d 

1331, 1341 (Fed. Cir. 2016) (citation omitted).

The PTAB found that U.S. Patent No. 5,898,830 (“Wesinger”) anticipates claims 1–3, 8–11, 14–17, 22–25, and 

 

3 Congress amended § 102 when it passed the 

Leahy-Smith America Invents Act (“AIA”). Pub. L. No. 

112-29, § 3(b)(1), 125 Stat. 284, 285–87 (2011). However, 

because the application that led to the ’697 patent was 

filed before March 16, 2013, the pre-AIA § 102 applies. 

Id. § 3(n)(1), 125 Stat. at 293.

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28–30 of the ’697 patent. VirnetX II, 2015 WL 2251196, 

at *3–6. Entitled “Firewall Providing Enhanced Network 

Security and User Transparency,” Wesinger generally 

“provides a firewall that achieves maximum network 

security and maximum user convenience.” Wesinger, 

Abstract.

VirnetX challenges the PTAB’s anticipation findings

as to claims 1, 8–9, and 22–23, grouping its arguments 

into two categories. The first concerns the PTAB’s findings as to claim 1 and the second concerns the PTAB’s 

findings as to claims 8–9 and 22–23. Appellant’s Br. 62–

68. We address them in turn.

a. Claim 1

Claim 1 recites in relevant part “determining, in response to the request, whether the second network device 

is available for a secure communications service.” ’697 

patent col. 56 ll. 16–18. VirnetX avers that the PTAB 

erred in finding that Wesinger discloses this limitation. 

Appellant’s Br. 64–67. 

As an initial matter, VirnetX contends that the PTAB 

“employed a ‘substantial difference’ test,” rather than 

“conduct[ing] a proper anticipation inquiry,” when it 

found that Wesinger anticipates the disputed limitation. 

Id. at 62, 63. The PTAB decision belies VirnetX’s argument. Although the PTAB stated that it did “not discern 

a substantial difference between” Wesinger and the 

disputed limitation, VirnetX II, 2015 WL 2251196, at *4, 

it neither stated that a “substantial difference” test controlled its inquiry, nor repeated “substantial difference” in 

the remainder of its anticipation analysis, see id. at *3–6. 

We will not find legal error based upon an isolated statement stripped from its context.

VirnetX next argues that substantial evidence does 

not support the PTAB’s finding that Wesinger discloses 

the disputed limitation. According to VirnetX, the PTAB

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VIRNETX INC. v. APPLE INC. 11

improperly premised its finding on the assertion that a 

PHOSITA “would have understood that if a connection 

with a virtual host is determined to be allowed if all rules 

are satisfied (as Wesinger discloses), then the virtual host 

would be determined to be ‘available’ for the connection,” 

as claim 1 recites. Appellant’s Br. 65 (emphases added) 

(internal quotation marks, brackets, and citation omitted). We disagree.

For a reference to anticipate, it “need not satisfy an 

ipsissimis verbis test.” In re Gleave, 560 F.3d 1331, 1334 

(Fed. Cir. 2009) (citation omitted). Wesinger discloses 

that “[i]f all the rules are satisfied, then the connection 

[with the virtual host] is allowed” and that, “[o]nce the 

connection has been allowed, the virtual host process . . . performs . . . connection processing,” Wesinger 

col. 16 ll. 66–67, col. 17 ll. 1–3 (emphases added), whereas 

the disputed limitation in claim 1 recites “determining . . . whether the second network device is available,” 

’697 patent col. 56 ll. 16–17 (emphasis added). The PTAB 

found that “allowed” in Wesinger discloses “available” in 

claim 1 for at least three reasons, one of which we find 

adequate to support the conclusion. See VirnetX II, 2015 

WL 2251196, at *4–5. Specifically, the PTAB found that 

various passages in the specification equate “allowed” in 

Wesinger with “available” in claim 1, such that Wesinger 

discloses the disputed limitation. See id. at *5. VirnetX 

does not contest this aspect of the PTAB’s analysis. 

Appellant’s Br. 64–67.

Substantial evidence supports the PTAB’s finding. 

For example, one embodiment in the ’697 patent’s specification discloses that “DNS proxy . . . determines whether 

the user has sufficient security privileges to access the 

site. If so, DNS proxy . . . request[s] that a [VPN] be 

created between user computer . . . and secure target 

site . . . .” ’697 patent col. 40 ll. 36–40. Other embodiments similarly demonstrate that “available” encompasses “allowed.” See id. col. 41 ll. 14–32 (explaining an

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12 VIRNETX INC. v. APPLE INC. 

embodiment in which a check is made “to determine 

whether the user is authorized to connect to the secure 

host” by “reference to an internally stored list” and “if the 

user has sufficient security privileges, then . . . a secure 

VPN is established between the user’s computer and the 

secure target site”), 47–51 (explaining an embodiment in 

which a “[c]lient has permission to access target computer” and “the client’s DNS request would 

be. . . forward[ed] . . . to gatekeeper” which “would establish a VPN between the client and the requested target”), 

57–61 (explaining an embodiment in which a “[c]lient 

does not have permission to access target computer” and 

the “gatekeeper would reject the request”). Thus, because 

the subject patent’s specification does not disclose “an 

embodiment . . . in which the availability of the second 

network device is determined by other methods or criteria,” VirnetX II, 2015 2251196, at *5, substantial evidence 

supports the PTAB’s finding that “available” means 

“allowed” and, thus, that Wesigner discloses the disputed 

limitation.

VirnetX argues further that Wesinger does not anticipate the disputed limitation because Wesinger operates in 

a manner different from the disputed limitation. Appellant’s Br. 65–67. The disputed limitation in claim 1 

requires that “determining . . . whether the second network device is available” occurs “in response to the request” to “look up an [IP] address of the second network

device based on a domain name associated with the 

second network device.” ’697 patent col. 56 ll. 13–17. By

contrast, VirnetX avers that Wesinger “discloses two 

types of requests”—first, a “DNS query (i.e., a request to 

look up an IP address)” and, second, a “connection request” that triggers a determination to allow or deny 

connection. Appellant’s Br. 65, 66 (internal quotation 

marks and citations omitted). VirnetX alleges that Wesinger does not anticipate the disputed limitation because 

the second step in Wesinger does not occur in response to 

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VIRNETX INC. v. APPLE INC. 13

a request to look up an IP address based on a domain 

name, as the disputed limitation requires. See id. at 66–

67.

Substantial evidence supports the PTAB’s finding 

that the second step in Wesinger occurs in response to a 

request to look up an IP address. For example, Wesigner 

discloses that, in response to a “connection request” for a 

domain name, the DNS “in effect says to the requestor 

‘Use virtual host X.X.X.X.,’ where X.X.X.X. represents an 

IP address.” Wesinger col. 10 ll. 58–61. As the PTAB 

explained, this passage in “Wesinger explicitly discloses 

that, responsive to the ‘connection request,’ an IP address . . . of a network device is provided based on a 

domain name . . . that is included in the ‘connection 

request.’” VirnetX II, 2015 WL 2251196, at *3 (internal 

citations omitted). VirnetX does not challenge this aspect 

of the PTAB’s finding. See Appellant’s Br. 66–67. Thus, 

the record supports the PTAB’s finding that Wesinger 

discloses the disputed limitation.

b. Claims 8–9 and 22–23

Claims 8 and 22 require that “at least one of the first 

network device and the second network device” recited in 

claims 1 and 16 “is a mobile device,” and claims 9 and 23 

further require that the “mobile device” be a “notebook 

computer.” ’697 patent col. 56 ll. 43–47 (claims 8–9), 

col. 58 ll. 1–5 (claims 22–23). VirnetX argues that substantial evidence does not support the PTAB’s finding 

that Wesinger discloses a “notebook computer.” Appellant’s Br. 67–68. According to VirnetX, the PTAB 

acknowledged that Wesinger discloses only a “computer,” 

but nevertheless “proceeded to speculate—without any 

evidence whatsoever”—that a PHOSITA would have 

found that Wesinger also discloses a “notebook computer.” 

Id. at 68.

“[T]he disclosure of a small genus may anticipate the 

species of that genus even if the species are not themCase: 15-1934 Document: 71-2 Page: 13 Filed: 12/09/2016
14 VIRNETX INC. v. APPLE INC. 

selves recited.” Bristol-Myers Squibb Co. v. Ben Venue 

Labs., Inc., 246 F.3d 1368, 1380 (Fed. Cir. 2001) (citation 

omitted). Whether a small genus anticipates a species 

within that genus “depends on the factual aspects of the 

specific disclosure and the particular products at issue.” 

Sanofi-Synthelabo v. Apotex, Inc., 550 F.3d 1075, 1083 

(Fed. Cir. 2008) (citation omitted). “[H]ow [a PHOSITA]

would understand the relative size of a genus or species in 

a particular technology is” a factual question “of critical 

importance.” OSRAM Sylvania, Inc. v. Am. Induction 

Techs., Inc., 701 F.3d 698, 706 (Fed. Cir. 2012).

Substantial evidence supports the PTAB’s finding 

that Wesinger’s disclosure of the genus “computer” encompasses the “notebook computer” species. Wesinger 

undisputedly discloses a “computer.” See, e.g., Wesinger 

col. 14 ll. 7–8; see also id. col. 14 ll. 21–23 (explaining that 

the software supporting the claimed firewall could run on, 

inter alia, “a super-minicomputer”). The PTAB reasoned 

that, at the time of the invention (i.e., when the inventor 

filed the application leading to Wesinger in 1996), a 

PHOSITA “would have understood that a ‘notebook 

computer’ is a ‘computer’ and immediately would have 

envisioned Wesinger as describing both desktop and 

notebook computers as both types of computers would 

have been used to connect to networks.” VirnetX II, 2015 

WL 2251196, at *6; see Phillips v. AWH Corp., 415 F.3d 

1303, 1313 (Fed. Cir. 2005) (en banc) (describing “the time 

of the invention” as “the effective filing date of the patent 

application” (citations omitted)). In reaching that conclusion, the PTAB permissibly relied upon its expertise and 

the experience of its members to resolve the relatively 

simple question of whether Wesinger’s “computer” disclosure encompasses a “notebook computer.” See Belden, 805 

F.3d at 1079. In so doing, the PTAB did not address more 

complex questions about computer technology whose 

resolution would benefit from essential expert testimony. 

See Synopsys, 814 F.3d at 1320. Thus, substantial eviCase: 15-1934 Document: 71-2 Page: 14 Filed: 12/09/2016
VIRNETX INC. v. APPLE INC. 15

dence supports the PTAB’s finding that Wesinger anticipates claims 8–9 and 22–23.

2. Obviousness

Finally, we turn to the PTAB’s obviousness findings. 

A patent claim is invalid “if the differences between the 

subject matter sought to be patented and the prior art are 

such that the subject matter as a whole would have been 

obvious at the time the invention was made to a 

[PHOSITA] to which said subject matter pertains.” 35 

U.S.C. § 103(a) (2006).4 Obviousness is a question of law 

based on underlying findings of fact, In re Gartside, 203 

F.3d 1305, 1316 (Fed. Cir. 2000), including (1) “the scope 

and content of the prior art,” (2) “differences between the 

prior art and the claims at issue,” (3) “the level of ordinary skill in the pertinent art,” and (4) the presence of 

secondary considerations of nonobviousness such “as 

commercial success, long felt but unsolved needs, failure 

of others,” and unexpected results. Graham v. John Deere 

Co. of Kan. City, 383 U.S. 1, 17 (1966); see United States v. 

Adams, 383 U.S. 49, 50–52 (1966). 

The PTAB found that claims 4–7 and 18–21 would 

have been obvious over a combination of two prior art 

references—Wesinger and M. Handley et al., SIP: Session 

Initiation Protocol (Network Working Grp. Request for 

Comments: 2543, March 1999) (“RFC 2543”) (J.A. 2566). 

VirnetX II, 2015 WL 2251196, at *6–8. Dependent claims 

4–7 depend directly or indirectly from claim 1 and provide 

additional limitations to the method disclosed in claim 1. 

See ’697 patent col. 56 ll. 33–42. Dependent claims 18–21 

 

4 Congress amended § 103 when it passed the AIA. 

Pub. L. No. 112-29, § 3(c), 125 Stat. at 287. However, 

because the application that led to the ’697 patent was 

filed before March 16, 2013, the pre-AIA § 103 applies. 

Id. § 3(n)(1), 125 Stat. at 293.

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16 VIRNETX INC. v. APPLE INC. 

depend directly or indirectly from claim 16 and provide 

additional limitations to the method disclosed in claim 16. 

See id. col. 57 ll. 23–32.

Instead of addressing the PTAB’s particular findings

as to the combination of Wesinger and RFC 2543, VirnetX 

argues that it presented expert testimony on the prior art 

references and that, rather than accepting “this uncontroverted expert testimony, the [PTAB] reached the opposite 

conclusion.” Appellant’s Br. 69. VirnetX argues anew

that the PTAB may not make factual findings “in the 

absence of any supporting record expert testimony.” Id.

VirnetX’s arguments do not demonstrate a lack of 

substantial evidence in support of the PTAB’s obviousness 

findings. As stated above in Section II.C, the PTAB may 

make factual findings absent expert testimony. Here, the 

PTAB examined Wesinger and RFC 2543 and found that 

the references do not teach away from one another, citing 

various aspects of Wesinger and RFC 2543 to support its 

conclusion. See VirnetX II, 2015 WL 2251196, at *6–8; see 

also Warsaw, 832 F.3d at 1333 (“A reference teaches away 

when a [PHOSITA], upon reading the reference, would be 

discouraged from following the path set out in the reference.” (internal quotation marks, brackets, and citation 

omitted)). Because VirnetX does not contest the PTAB’s 

specific findings, we decline to review them. See Carducci 

v. Regan, 714 F.2d 171, 177 (D.C. Cir. 1983) (“The premise of our adversarial system is that appellate courts do 

not sit as self-directed boards of legal inquiry and research, but essentially as arbiters of legal questions 

presented and argued by the parties before them.”).

CONCLUSION

The PTAB found the subject claims of the ’697 patent 

invalid for other reasons. See generally VirnetX I, 2015 

WL 2251195. However, because we affirm the PTAB’s 

conclusions in VirnetX II, we do not address the PTAB’s 

determinations in VirnetX I. See Gleave, 560 F.3d at 1338

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VIRNETX INC. v. APPLE INC. 17

(declining to address alternative grounds of invalidity 

when the court upholds one such ground). Thus, for the 

foregoing reasons, the Final Written Decisions of the U.S.

Patent and Trademark Office’s Patent Trial and Appeal 

Board are

AFFIRMED

Case: 15-1934 Document: 71-2 Page: 17 Filed: 12/09/2016
NOTE: This disposition is nonprecedential.

United States Court of Appeals 

for the Federal Circuit ______________________ 

VIRNETX INC.,

Appellant

v.

APPLE INC.,

Appellee

______________________ 

2015-1934, 2015-1935

______________________ 

Appeals from the United States Patent and Trademark Office, Patent Trial and Appeal Board in Nos. 

IPR2014-00237, IPR2014-00238.

______________________ 

O’MALLEY, Circuit Judge, dissenting. 

Because the Board based its factual findings on an inadequate record, I dissent from today’s judgments. Although there is no per se requirement that the Board rely 

on expert testimony to reach a finding of invalidity, this 

court has long recognized 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, LLC v. 

Esab Grp., Inc., 390 F.3d 1361, 1369–70 (Fed. Cir. 2004)); 

see also Perfect Web Techs., Inc. v. InfoUSA, Inc., 587 F.3d 

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2 VIRNETX INC. v. APPLE INC. 

1324, 1330 (Fed. Cir. 2009) (“If the relevant technology 

were complex, the court might require expert opinions.”); 

Proveris Sci. Corp. v. Innovasystems, Inc., 536 F.3d 1256, 

1267 (Fed. Cir. 2008) (affirming the district court’s requirement of expert testimony to prove invalidity where 

“th[e] subject matter [wa]s sufficiently complex to fall 

beyond the grasp of an ordinary layperson”). 

This matter is not, as Apple suggests, the exceptional 

case in which “‘the references and the invention are easily 

understandable,’” such that “Board members, because of 

expertise, may . . . find it easier to understand and soundly explain the teachings and suggestions of prior art 

without expert assistance.” Belden v. Berk-Tek LLC, 805 

F.3d 1064, 1079 (Fed. Cir. 2015) (quoting Wyers, 616 F.3d 

at 1242). Belden, for example, involved only “a simple 

point in a mechanical field and one very close piece of 

prior art.” Id. at 1074. Here, the claims at issue cover

more complex technology (establishing secure communications between multiple network devices for video/audio 

data transmission) and the Board’s invalidity finding was 

premised on combinations of multiple pieces of prior art. 

Indeed, 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. It was only once its own expert’s testimony was proven unreliable that Apple switched gears and 

claimed that it had no obligation to present expert testimony. Apple first contends that the Board actually did 

rely on expert testimony to support its conclusions because it cited to admissions from VirnetX’s expert to 

support its conclusions. That argument is a nonstarter. 

Apple provides only a handful of examples on this point, 

covering a single factual finding, relevant to only one 

aspect of one of the two proceedings before us, a point 

Apple’s counsel conceded at oral argument. Oral Argument at 20:49–20:58, available at http://oralarguments.

cafc.uscourts.gov/default.aspx?fl=2015-1934.mp3 (“The 

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VIRNETX INC. v. APPLE INC. 3

Board specifically referred to VirnetX’s expert on the 

issue of teaching away. . . . On some other issues, the 

Board found that VirnetX’s expert was not credible.”). 

The Board’s opinions, of course, go significantly farther 

than that single issue.

Apple next contends that the Board was free to reach 

conclusions about what one of skill in the art would glean 

from the multiple prior art references at issue in the 

absence of expert testimony because it could rely on its 

own expertise to assess those references. That argument 

also fails. While it is certainly true, as the majority notes, 

that the Board’s expertise “plays a role in interpreting 

record evidence,” it may not act as a substitute for such 

evidence. Maj. Op. at 8 (quoting Brand v. Miller, 487 F.3d 

862, 869 (Fed. Cir. 2007)). Where, as here, the technology 

at issue is complex, there are multiple prior art references 

that must be combined to support the Board’s invalidity 

conclusions, and there is substantial dispute regarding 

what one of skill in the art—at the relevant time frame—

would have gleaned from those prior art references, the 

Board must point to actual evidence in the record to 

support its conclusions. It is telling that the Board’s 

conclusions precisely follow the conclusions laid out in the 

lengthy expert testimony the Board claimed to ignore. 

In particular, this case bears a striking resemblance 

to Brand, where the Board “rejected as unconvincing the 

only relevant testimony,” but nevertheless found that “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. Brand, 487 F.3d at 

870. Here, 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.” Apple Inc. v. VirnetX 

Inc., No. IPR2014-00238, 2014 WL 1995380 at *3, 7–8, 14 

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4 VIRNETX INC. v. APPLE INC. 

(P.T.A.B. May 14, 2014); Apple Inc. v. VirnetX Inc., No. 

IPR2014-00237, 2014 WL 1995379 at *15–16, 19–20 

(P.T.A.B. May 14, 2014). As in Brand, “the detailed 

nature of the findings that the Board found necessary to 

make demonstrates the inappropriateness of its approach”—it appears to have simply “substituted its own 

expertise for record evidence.” Brand, 487 F.3d at 870. 

Allowing the Board to continue this practice—disclaiming 

reliance on the only supporting expert testimony yet 

reaching the exact same conclusions propounded therein—would only exacerbate the trend towards a “haze of 

so-called expertise” that this court and the Supreme Court 

have admonished against. Brand, 487 F.3d at 869 (quoting Baltimore & Ohio R.R. Co., 393 U.S. 87, 92 (1968)). 

Because there was inadequate competent evidence on the 

record to support the Board’s judgments, I would reverse.

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