Court Opinion

ID: 4412344
Source: CourtListenerOpinion
Date Created: 2019-06-28 15:00:54.921541+00
Date Added: 2024-06-11T14:27:49.585041
License: Public Domain

NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
                ______________________

                   VIRNETX INC.,
                      Appellant

                           v.

               CISCO SYSTEMS, INC.,
                       Appellee
                ______________________

                      2018-1751
                ______________________

    Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. 95/001,851.
                  ______________________

                 Decided June 28, 2019
                ______________________

    STEPHEN BLAKE KINNAIRD, Paul Hastings LLP, Wash-
ington, DC, argued for appellant. Also represented by
NAVEEN MODI, JOSEPH PALYS, IGOR VICTOR TIMOFEYEV,
MICHAEL WOLFE, DANIEL ZEILBERGER.

   THEODORE M. FOSTER, Haynes & Boone, LLP, Dallas,
TX, argued for appellee. Also represented by DAVID L.
MCCOMBS, ANDREW S. EHMKE, DEBRA JANECE MCCOMAS.
                ______________________

   Before CHEN, BRYSON, and HUGHES, Circuit Judges.
2                         VIRNETX INC. v. CISCO SYSTEMS, INC.

HUGHES, Circuit Judge.
     This is a patent case involving domain name service
systems. VirnetX Inc. appeals a decision of the Patent
Trial and Appeal Board in an inter partes reexamination of
U.S. Patent No. 7,418,504 B2, owned by VirnetX. See Cisco
Sys. Inc. v. VirnetX Inc., No. 95/001,851 (P.T.A.B. Sept. 12,
2016). The Board affirmed the Examiner’s rejection of
claims 1–35 and 60 as either anticipated or obvious. Be-
cause the Board failed to address VirnetX’s arguments and
failed to make necessary factual findings for the rejection
of claims 5, 12, and 13, we vacate the Board’s decision on
those claims and remand for further proceedings. Because
we find no reversible error in the Board’s rejections of
claims 1–4, 6–11, 14–35, and 60, we affirm.
                             I
                             A.
    The ’504 patent, entitled “Agile Network Protocol for
Secure Communications Using Secure Domain Names,” is
directed to a domain name service (DNS) system that facil-
itates secure communications over the internet. Commu-
nications over the internet typically employ the
Transmission Control Protocol/Internet Protocol, under
which each computer connected to the internet is assigned
a unique Internet Protocol (IP) address (e.g.,
123.34.567.89). Because IP addresses are difficult for users
to remember, they are commonly associated with a user-
friendly domain name (e.g., pbs.org). A DNS server links
IP addresses with their associated domain names. For ex-
ample, when a user types a domain name into her web
browser, the browser transmits a domain name request to
the DNS server. The DNS server then converts the domain
name into its corresponding IP address and returns the IP
address to the user’s browser. Finally, the browser uses
the IP address to establish contact with the destination
web site.
VIRNETX INC. v. CISCO SYSTEMS, INC.                        3

    The ’504 patent addresses security vulnerabilities of
prior art internet communications. For example, it ex-
plains that “nefarious listeners on the Internet could inter-
cept the DNS [request] and DNS [response] packets and
thus learn what IP addresses the user was contacting.”
’504 patent col. 39 ll. 24–27. The ’504 patent addresses this
by providing a
    specialized DNS server [that] traps DNS requests
    and, if the request is from a special type of user
    (e.g., one for which secure communication services
    are defined), the server does not return the true IP
    address of the target, but instead automatically
    sets up a virtual private network between the tar-
    get node and the user.
Id. col. 39 ll. 46–51.
    Independent claim 1 of the ’504 patent, reproduced be-
low, is representative of the rejected claims.
        1. A system for providing a domain name ser-
    vice for establishing a secure communication link,
    the system comprising:
        a domain name service system configured to be
    connected to a communication network, to store a
    plurality of domain names and corresponding net-
    work addresses, to receive a query for a network
    address, and to comprise an indication that the do-
    main name service system supports establishing a
    secure communication link.
Id. col. 55 ll. 49–56 (emphasis added).
    Claims 5, 12, and 13 depend from claim 1. Claim 5 re-
quires that “the domain name service system is configured
to authenticate the query using a cryptographic technique.”
Id. col. 55 ll. 65–67 (emphasis added). Claim 12 requires
that “the virtual private network is based on comparing a
value in each data packet transmitted between a first
4                         VIRNETX INC. v. CISCO SYSTEMS, INC.

device and a second device to a moving window of valid val-
ues.” Id. col. 56 ll. 19–22. Claim 13 requires that “the vir-
tual private network is based on a comparison of a
discriminator field in a header of each data packet to a ta-
ble of valid discriminator fields maintained for a first de-
vice.” Id. col. 56 ll. 23–26.
                               B.
     Cisco Systems, Inc. requested inter partes reexamina-
tion of claims 1–60 of the ’504 patent on multiple grounds
of invalidity. The patent office granted Cisco’s request in
March 2012 and issued a non-final office action, rejecting
all claims.
     During reexamination, the parties were engaged in in-
fringement litigation involving the ’504 patent in the East-
ern District of Texas. In March 2013, the district court
entered final judgment upholding the validity of claims 36,
47, and 51 of the ’504 patent. VirnetX Inc. v. Cisco Sys.
Inc., No. 6:10-cv-417 (E.D. Tex. Mar. 19, 2013). After Cisco
failed to appeal that judgment, VirnetX filed a petition to
terminate the reexamination “at least regarding claims 36,
47, and 51” under 35 U.S.C. § 317(b). J.A. 1479. The pa-
tent office granted VirnetX’s petition and terminated reex-
amination as to claim 36 and its dependent claims 37–59.
Reexamination proceeded on claims 1–35 and 60.
    The Examiner issued a Right of Appeal Notice in Feb-
ruary 2015 and found claim 11 patentable but all other
claims unpatentable as either anticipated or obvious. Vir-
netX appealed the Examiner’s rejections to the Board, and
Cisco filed a cross appeal on claim 11. The Board affirmed
the Examiner’s rejection of claims 1–10, 12–35, and 60 in
September 2016. The Board reversed the Examiner’s deci-
sion on claim 11 and entered a new ground of rejection on
that claim.
VIRNETX INC. v. CISCO SYSTEMS, INC.                        5

    The Board found claims 1 and 24 anticipated under 35
U.S.C. § 102(b) by prior art references Lendenmann 1 and
Aziz 2 and dependent claims 5 and 23 anticipated by Lend-
enmann. The Board found dependent claims 12 and 13 ob-
vious under 35 U.S.C. § 103 over the combination of
Lendenmann, Gazpoz, 3 and RFC 793. 4 Finally, the Board
noted that VirnetX failed to present additional arguments
in support of any of the remaining claims, so it affirmed the
rejections of claims 2–4, 6–10, 14–22, 25–35, and 60.
    VirnetX requested to reopen prosecution for claim 11
under 37 C.F.R. § 41.77(a) following the Board’s new
ground of rejection. The Board granted VirnetX’s request
and remanded to the Examiner. On remand, the Examiner
agreed with the Board that claim 11 was unpatentable.
VirnetX appealed the rejection, and the Board affirmed.
VirnetX then requested rehearing, arguing that the
Board’s 2016 decision “inconsistently indicated whether it
adopted the Examiner’s rejections” of claims 24 and 26.
J.A. 2662. In response, the Board issued an erratum
amending its 2016 decision to clarify that it affirmed the
Examiner’s rejections of claims 24 and 26, and it denied
VirnetX’s rehearing request.
   VirnetX now appeals. We have jurisdiction under 28
U.S.C. § 1295 (a)(4)(A).

    1   Rolf Lendenmann, IBM Int’l Technical Support
Org., Understanding OSF DCE 1.1 for AIX and OS/2 1–
245 (1995).
    2   U.S. Patent No. 6,119,234.
    3   Jean-Paul Gazpoz, VPN on DCE: From Reference
Configuration to Implementation, IS&N ’95: 3d Int’l Conf.
on Intelligence in Broadband Servs. and Networks 250–60
(“Gazpoz”).
    4   DARPA Internet Program Protocol Specification,
Transmission Control Protocol, 793 (1981).
6                          VIRNETX INC. v. CISCO SYSTEMS, INC.

                                II
                               A.
     VirnetX argues that the Board erred in finding that ei-
ther Lendenmann or Aziz anticipates claims 1 and 24 of the
’504 patent. According to VirnetX, neither Lendenmann
nor Aziz discloses an “indication that the domain name ser-
vice system supports establishing a secure communication
link” as required by the claims. ’504 patent col. 55 ll. 55–
56, col. 57 ll. 5–7. VirnetX also argues that the Board failed
to conduct a proper claim construction analysis for the “in-
dication” limitation and introduced new arguments for the
first time in its 2016 decision.
    We have considered VirnetX’s arguments, and we find
no reversible error in the Board’s analysis and rejections of
claims 1 and 24. Accordingly, we affirm the Board’s deci-
sion on claims 1–4, 6–11, 14–35, and 60.
                               B.
    VirnetX also argues that the Board erred in its rejec-
tions of claims 5, 12, and 13 because it failed to address
VirnetX’s argument regarding Lendenmann’s Remote Pro-
cedure Call (RPC) mode of communication. 5 We agree.

    5   VirnetX’s opening brief initially claims that this is-
sue affects the Board’s rejection of claims 5, 11, and 12. Ap-
pellant’s Br. at 42. The remainder of VirnetX’s briefing,
however, addresses the Board’s rejections of claims 5, 12,
and 13. See id. at 42–44; Reply Br. at 20–23. This is con-
sistent with the Board’s treatment of the claims in its deci-
sion, which considered the patentability of claims 12 and
13 together. See J.A. 29–30. Thus, we understand Vir-
netX’s challenge on appeal to relate solely to claims 5, 12,
and 13, notwithstanding the apparently erroneous state-
ment in its opening brief.
VIRNETX INC. v. CISCO SYSTEMS, INC.                       7

    Claim 5 requires that the DNS system is “configured to
authenticate the query using a cryptographic technique.”
’504 patent col. 55. ll. 66–67 (emphasis added). The Exam-
iner found that Lendenmann teaches that limitation be-
cause “a query from a client to a directory service (CDS)
server 6 is made by a RPC,” and “RPC calls rely upon well
known authentication algorithms.” J.A. 2242. On appeal
to the Board, VirnetX argued that Lendenmann’s “CDS
does not use the remote procedure calls to communicate
with clients.” J.A. 2342. And it repeated this argument in
support of the patentability of claim 5 specifically.
    The Board failed to meaningfully address VirnetX’s ar-
gument. It merely noted that claim 5 does not “recite[] that
the domain name service system is configured to . . . ‘use
the RPC [Remote Procedure Call] mode of communica-
tion.’” J.A. 28. Although true, that observation does not
speak to VirnetX’s argument.
     Claim 5 does not require the use of RPC; it requires
“authentic[ation of] the query using a cryptographic tech-
nique.” ’504 patent col. 55 ll. 66–67. The Examiner’s rejec-
tion of that claim was premised on: (1) the finding that
Lendenmann’s RPC is a cryptographic technique because
it uses “well known authentication algorithms;” and (2) the
finding that “a query from a client to a directory service
(CDS) server is made by a RPC.” J.A. 2242. Both of those
findings are necessary to support the Examiner’s rejection.
Thus, if Lendenmann does not use RPC when sending a
query to the DNS server, the Examiner’s rejection of claim
5 must fail. But even though VirnetX contested this point,
the Board did not address whether Lendenmann uses RPC
in this manner.

    6   The parties agree that Lendenmann’s Cell Direc-
tory Service (CDS) server performs the functions of a DNS
server.
8                          VIRNETX INC. v. CISCO SYSTEMS, INC.

    The issue above applies equally to the Board’s treat-
ment of claims 12 and 13. Like claim 5, the Examiner’s
rejection of those claims is premised on finding that Lend-
enmann uses RPC to communicate with its DNS server.
See J.A. 2244 (“The Examiner agrees with the third party
requester that CDS uses the PRC [sic] model of communi-
cations and RPC operate over TCP, where RFC 793 teaches
that TCP verifies that received data falls within a moving
window of accepted sequence number as is notoriously well
known in the art of TCP communications.”). Again, Vir-
netX challenged this finding before the Board, but the
Board failed to even mention RPC in its discussion of
claims 12 and 13.
    Cisco does not contest VirnetX’s claim that the Board
did not sufficiently address its argument on RPC. Instead,
Cisco argues that we should affirm because the Examiner
explicitly made the finding on RPC, and the Board gener-
ally affirmed the Examiner’s rejection. We disagree.
     “We review Board decisions using the standard set
forth in the Administrative Procedure Act (APA).” Novar-
tis AG v. Torrent Pharms. Ltd., 853 F.3d 1316, 1323 (Fed.
Cir. 2017). Under the APA, “the Board is required to set
forth in its opinions specific findings of fact and conclusions
of law adequate to form a basis for our review.” Gechter v.
Davidson, 116 F.3d 1454, 1460 (Fed. Cir. 1997). The Board
may adopt and incorporate the Examiner’s findings from a
Right of Appeal Notice. Icon Health & Fitness, Inc. v.
Strava, Inc., 849 F.3d 1034, 1043 (Fed. Cir. 2017). But “[t]o
incorporate material by reference, the host document must
identify with detailed particularity what specific material
it incorporates and clearly indicate where that material is
found in the various documents.” Advanced Display Sys.,
Inc. v. Kent State Univ., 212 F.3d 1272, 1282 (Fed. Cir.
2000).
   Here, the Board failed to make a factual finding that
Lendenmann uses RPC to communicate with the CDS
VIRNETX INC. v. CISCO SYSTEMS, INC.                         9

server, and the Board failed to effectively incorporate the
Examiner’s finding. Nowhere in the Board’s decision does
it “identify with detailed particularity” the Examiner’s
finding on RPC, nor does it “indicate where that material
is found” in the Examiner’s Right of Appeal Notice. Id. The
Board’s broad statement that “[t]he Examiner did not err
in rejecting claims 1–3, 5–10, 12–35, and 60,” J.A. 30, is
insufficient to incorporate the Examiner’s factual findings
by reference, 7 cf. Icon Health, 849 F.3d at 1043 (holding
that the Board incorporated the Examiner’s findings by ref-
erence because it particularly identified the Right of

    7    Cisco’s reliance on 37 C.F.R. § 41.77(a) and In re
Nielson, 816 F.2d 1567 (Fed. Cir. 1987), is misplaced. Sec-
tion 41.77(a) provides that “[t]he affirmance of the rejection
of a claim on any of the grounds specified constitutes a gen-
eral affirmance of the decision of the examiner on that
claim, except as to any ground specifically reversed.” This
court relied on that regulation in In re Nielson to reach the
merits of a ground for rejection not addressed by the Board
because the Board affirmed “for generally the reasons set
forth in the examiner’s answer.” See 816 F.2d at 1571. Nei-
ther Nielson nor § 41.77(a) speak to the situation here,
where the Board specifically addressed the grounds of re-
jection for claims 5, 12, and 13 but failed to make or incor-
porate the necessary factual findings to support affirmance
of the rejection. Section 41.77(a) and Nielson do not ab-
solve the Board of its duty to “set forth in its opinions spe-
cific findings of fact and conclusions of law adequate to
form a basis for our review.” Gechter, 116 F.3d at 1460.
Furthermore, it appears the Board did not even under-
stand the Examiner’s rejection it was affirming. Instead of
substantively addressing the Examiner’s factual finding
that Lendenmann’s disclosure of RPC taught the features
of dependent claims 5, 12, and 13, the Board appeared to
dismiss this analysis as unnecessary by responding that
the claim did not require RPC.
10                        VIRNETX INC. v. CISCO SYSTEMS, INC.

Appeal Notice and the specific page ranges where the in-
corporated material could be found).
    Accordingly, we vacate the Board’s decision on claims
5, 12, and 13. On remand, the Board should consider
whether the system described in Lendenmann uses the
RPC mode of communication for communications between
a user and the CDS.
                               III
     We find no reversible error in the Board’s analysis and
rejection of claims 1 and 24 of the ’504 patent. Accordingly,
we affirm the Board’s decision on claims 1 and 24, and we
affirm the Board’s decision on claims 2–4, 6–11, 14–23, 25–
35, and 60 because VirnetX failed to present separate ar-
guments for the patentability of those claims. Because the
Board failed to address VirnetX’s arguments and make
necessary factual findings for the rejection of claims 5, 12,
and 13, however, we vacate the Board’s decision on those
claims. On remand, the Board should consider whether the
Lendenmann reference discloses the use of its RPC mode
of communication for communications between a user and
the CDS as found by the Examiner.
     AFFIRMED IN PART, VACATED IN PART, AND
                 REMANDED
     No costs.