Virnetx Inc. v. Apple Inc.

NOTE: This disposition is nonprecedential.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 Trade-
mark Office, Patent Trial and Appeal Board in Nos.
IPR2014-00237, IPR2014-00238.
______________________

Decided: December 9, 2016
______________________

IGOR VICTOR TIMOFEYEV, Paul Hastings LLP, Wash-
ington, 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.
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. (Vir-
netX 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) (cita-
tion 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).
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 pro-
vide the context necessary to understand the invention
claimed in the ’697 patent. Communications over the
Internet generally follow the Transmission Control Proto-
col/Internet Protocol, under which each computer con-
nected 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 particu-
lar 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
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 inven-
tion 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 repre-
sentative and recites
[a] method of connecting a first network device
and a second network device, the method compris-
ing:
intercepting, from the first network de-
vice, a request to look up an . . . [IP] ad-
dress 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 be-
tween the first network device and the
second network device based on a deter-
mination that the second network device
is available for the secure communications
service;
VIRNETX INC. v. APPLE INC. 5

wherein the secure communications ser-
vice 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 construc-
tion 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 inva-
lid, VirnetX does not dispute that the relevant prior art
references disclose, teach, or suggest “secure communica-
tion 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 find-
ings in VirnetX II. Accordingly, we will not construe
them. Cf. Hoffer v. Microsoft Corp., 405 F.3d 1326, 1329
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 nonin-
fringement.”).
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 con-
cluded 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, Vir-
netX 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.
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 anticipa-
tion 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 testi-
mony” 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 re-
quires . . . 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 con-
tends 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.
8 VIRNETX INC. v. APPLE INC.

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 accord-
ingly.” (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 proceed-
ings,” 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 imper-
missible 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 interpret-
ing 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 rec-
ord 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 conclu-
sions”). 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 testimo-
ny). 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.”).
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 Antici-
pated by, or Obvious over, the Prior Art
We next address the PTAB’s conclusions that the sub-
ject 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 pa-
tent . . . .” 35 U.S.C. § 102(e) (2006). 3 A prior art refer-
ence 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). “Antici-
pation 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 (“We-
singer”) 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.
10 VIRNETX INC. v. APPLE INC.

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 find-
ings 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 re-
sponse 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 argu-
ment. 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 con-
trolled 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 state-
ment 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
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 omit-
ted). 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 pro-
cess . . . performs . . . connection processing,” Wesinger
col. 16 ll. 66–67, col. 17 ll. 1–3 (emphases added), whereas
the disputed limitation in claim 1 recites “determin-
ing . . . 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 specifi-
cation 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 embodi-
ments similarly demonstrate that “available” encom-
passes “allowed.” See id. col. 41 ll. 14–32 (explaining an
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 comput-
er” and “the client’s DNS request would
be. . . forward[ed] . . . to gatekeeper” which “would estab-
lish 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 crite-
ria,” 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 antici-
pate the disputed limitation because Wesinger operates in
a manner different from the disputed limitation. Appel-
lant’s Br. 65–67. The disputed limitation in claim 1
requires that “determining . . . whether the second net-
work device is available” occurs “in response to the re-
quest” 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 re-
quest” that triggers a determination to allow or deny
connection. Appellant’s Br. 65, 66 (internal quotation
marks and citations omitted). VirnetX alleges that We-
singer does not anticipate the disputed limitation because
the second step in Wesinger does not occur in response to
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 ad-
dress . . . 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 sub-
stantial evidence does not support the PTAB’s finding
that Wesinger discloses a “notebook computer.” Appel-
lant’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 them-
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” en-
compasses 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 conclu-
sion, the PTAB permissibly relied upon its expertise and
the experience of its members to resolve the relatively
simple question of whether Wesinger’s “computer” disclo-
sure 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 evi-
VIRNETX INC. v. APPLE INC. 15

dence supports the PTAB’s finding that Wesinger antici-
pates 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 ordi-
nary 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.
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 uncontro-
verted 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 refer-
ence.” (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 prem-
ise of our adversarial system is that appellate courts do
not sit as self-directed boards of legal inquiry and re-
search, 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
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
 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 Trade-
mark 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 in-
adequate record, I dissent from today’s judgments. Alt-
hough 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 regard-
ing 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
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 re-
quirement 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 sound-
ly 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 communica-
tions 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 pag-
es 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 testimo-
ny was proven unreliable that Apple switched gears and
claimed that it had no obligation to present expert testi-
mony. Apple first contends that the Board actually did
rely on expert testimony to support its conclusions be-
cause 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 Argu-
ment at 20:49–20:58, available at http://oralarguments.
cafc.uscourts.gov/default.aspx?fl=2015-1934.mp3 (“The
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 ar-
ranged 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 to-
wards (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
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 ap-
proach”—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 there-
in—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 (quot-
ing 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.