Riverbed Technology, Inc.v.Silver Peak Systems, Inc.

Patent Trial and Appeal Board

Jun 9, 2015

11497026 (P.T.A.B. Jun. 9, 2015)

Trials@uspto.gov Paper No. 42
571-272-7822 Entered: June 9, 2015

UNITED STATES PATENT AND TRADEMARK OFFICE
_______________
BEFORE THE PATENT TRIAL AND APPEAL BOARD
_______________
RIVERBED TECHNOLOGY, INC.,
Petitioner,
v.
SILVER PEAK SYSTEMS, INC.,
Patent Owner.
_______________

Case IPR2014-00245
Patent 8,392,684 B2
_______________

Before DENISE M. POTHIER, JUSTIN T. ARBES, and HYUN J. JUNG,
Administrative Patent Judges.

JUNG, Administrative Patent Judge.

FINAL WRITTEN DECISION
35 U.S.C. § 318(a) and 37 C.F.R. § 42.73

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I. INTRODUCTION
Riverbed Technology, Inc. (“Petitioner”) filed a Petition (Paper 2,
“Pet.”) on December 11, 2013 requesting institution of an inter partes
review of claims 1–24 of U.S. Patent No. 8,392,684 B2 (“the ’684 patent”)
pursuant to 35 U.S.C. §§ 311–19. Silver Peak Systems, Inc. (“Patent
Owner”) did not file a preliminary response. Based on the Petition, we
instituted inter partes review of claims 1–24. Paper 12 (“Dec. on Inst.”).
After institution, Patent Owner did not file a Patent Owner Response,
and instead filed a Motion to Amend (Paper 16, “Mot.”) seeking to cancel
claims 1–24 and substitute claims 25–48 in their place. Petitioner filed an
Opposition (Paper 23, “Opp.”) to the Motion to Amend, and Patent Owner
filed a Reply (Paper 26, “Reply”). In addition, the parties rely upon
testimony from various declarants. Petitioner proffered the Declaration of
Steven W. Landauer (Ex. 1008) with the Petition. Patent Owner proffered
the Declaration of Geoff Kuenning, Ph.D. (Ex. 2001, “Kuenning Decl.”)
with its Motion to Amend and a Second Declaration of Dr. Kuenning (Ex.
2013, “2d Kuenning Decl.”) with its Reply. In addition, a transcript of Dr.
Kuenning’s deposition (Ex. 1010, “Kuenning Dep.”) was submitted by
Petitioner. No deposition transcript was filed for Mr. Landauer.
An oral hearing in this proceeding was held on February 5, 2015, and
a transcript of the hearing is included in the record (Paper 41, “Tr.”).
We have jurisdiction under 35 U.S.C. § 6(c). This Final Written
Decision is issued pursuant to 35 U.S.C. § 318(a) and 37 C.F.R. § 42.73.
For the reasons that follow, we grant Patent Owner’s Motion to Amend to
the extent that it requests to cancel claims 1–24 of the ’684 patent. We
determine that Patent Owner has not met its burden with respect to proposed
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substitute claims 25–48 and thus, the Motion is denied as to the substitute
claims. The Motion to Amend, therefore, is granted-in-part.
A. The ’684 Patent (Ex. 1001)
The ’684 patent, titled “Data Encryption in a Network Memory
Architecture for Providing Data Based on Local Accessibility,” issued on
March 5, 2013 from U.S. Patent Application No. 11/497,026 (“the ’026
application”) filed on July 31, 2006. The ’026 application is a continuation-
in-part of U.S. Patent Application No. 11/202,697, which issued as U.S.
Patent No. 8,370,583 B2, which was the subject of IPR2013-00403.
The ’684 patent relates to encrypting data in a network memory
architecture. Ex. 1001, 1:18. Figure 3 of the ’684 patent is reproduced
below:

Figure 3 illustrates an exemplary implementation of network memory
system 300. Id. at 4:62–63, 5:64–65. Network memory system 300 includes
branch office 310 and central office 320. Id. at 5:65–66. Branch office 310
has computers 340 and branch appliance 350, and branch office 310 is
coupled through router 360 to communication network 330. Id. at 5:66–6:2,
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4–7. Branch appliance 350 “comprises hardware and/or software elements
configured to receive data (e.g., email, files, and database[] transactions),
determine whether a portion of the data is locally accessible to an appliance
(e.g., central appliance 380), generate an instruction based on the
determination, and transfer the instruction to the appliance.” Id. at 6:38–43.
Central office 320 includes central appliance 380 that is coupled to
communication network 330 through router 390. Id. at 6:2–3, 7–10. Central
appliance 380 “comprises hardware and/or software elements configured to
receive data, determine whether a portion of the data is locally accessible to
an appliance (e.g., the branch appliance 350), generate an instruction based
on the determination, and transfer the instruction to the appliance.” Id. at
7:13–18. “In some embodiments, the instruction indicates an index within a
database for storing and retrieving the data.” Id. at 7:10–12.
In the exemplary embodiment, branch appliance 350 and central
appliance 380 intercept network traffic between computers 340 and central
servers 370. Id. at 7:29–32. Branch appliance 350 encrypts data, stores the
encrypted data within a local copy in branch appliance 350, and transmits
data to central appliance 380. Id. at 8:24–27. Branch appliance 350 also
retrieves encrypted response data from the local copy per an instruction from
central appliance 380, decrypts the response data, and forwards the response
data to computers 340. Id. at 8:27–31.
Central appliance 380 also can receive an instruction from branch
appliance 350 to store encrypted data in a local copy locally accessible to
central servers 370. Id. at 8:34–37. Central appliance 380 is configured to
determine whether the data is locally accessible to branch appliance 350 and
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to decrypt the data before transmitting the data to central server 370. Id. at
8:39–41, 43–45.
Figure 4 of the ’684 patent is reproduced below:

Figure 4 is a sequence chart for the network memory system where a
response to a data request is not accessible locally to a branch device. Id. at
4:64–67, 9:25–28.
Computer 340 transmits data request 410 through branch appliance
350 and central appliance 380 to central server 370. Id. at 9:25–31. Central
servers 370 generate response data 425 based on data request 410 and
transmit response data 425 to central appliance 380. Id. at 9:34–36, 39–41,
Fig. 4 (sequence 420). Central appliance 380 processes response data 425 to
determine whether a portion of response data 425 is accessible locally to
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branch appliance 350. Id. at 9:45–47, Fig. 4 (sequence 430). If central
appliance 380 determines that response data 425 is not accessible locally to
branch appliance 350, central appliance 380 generates store instruction 440
and attaches store instruction 440 to response data 425. Id. at 11:41–48,
Fig. 4 (sequence 435). However, if central appliance 350 determines that
response data is available locally to branch appliance 350, central appliance
380 generates retrieve instruction 640 that indicates to branch appliance 350
to retrieve the response data at an index within a database. Id. at 12:27–31,
Fig. 6.
In another embodiment, computer 340 transmits data request 710
through central appliance 380. Id. at 12:52–54, Fig. 7A. Central appliance
380 processes response data 725 to determine whether a portion of that data
is locally accessible to branch appliance 350. Id. at 12:59–62, Fig. 7A
(sequence 730). Central appliance 380 encrypts flow history pages 545 that
include pages, page state information, and data, and “will transmit the deltas
(i.e., the portion of the response data 725 that is not locally accessible) to the
branch appliance 350.” Id. at 9:51–63, 13:11–15. Central appliance 380 can
generate a store instruction that “indicates to the branch appliance 350 to
store the deltas at an index within the database.” Id. at 13:20–22. Branch
appliance 350 stores the deltas in accordance with the store instruction. Id.
at 13:42–45. “If the deltas are not encrypted, the branch appliance 350
further encrypts the deltas.” Id. at 13:45–47.
If retrieve instruction 640 is smaller in size than response data 625,
central appliance 380 transmits only retrieve instruction 640, but if retrieve
instruction 640 is larger than response data 625, central appliance 380
transmits response data 625 instead. Id. at 12:32–33, 35-39. Thus,
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according to the ’684 patent, central appliance 380 optimizes network traffic
over communication network 330. Id. at 12:33–35.
B. Status of the Claims
The ’684 patent has 24 claims, all of which are challenged. Claims 1–
7 recite a network memory system; claims 8–14 recite a method; and claims
15–24 recite a software product. Claim 1, for example, recites:
1. A network memory system for ensuring compliance,
comprising:
a source-site appliance comprising a first processor and a
first memory device, and configured to be coupled to a source-
site computer via a source-site local area network;
a destination-site appliance comprising a second
processor and a second memory device, and configured to be
coupled to a destination-site computer via a destination-site
local area network, the source-site computer in communication
with the destination-site computer via a wide area network;
the source-site appliance configured to intercept data sent
from the source-site computer to the destination-site computer,
encrypt the data, store the data in the first memory device,
determine whether the data exists in the second memory device,
and transmit a store instruction comprising the data if the data
does not exist in the second memory device; and
the destination-site appliance configured to receive the
store instruction from the source-site appliance, store the data in
the second memory device, subsequently receive a retrieve
instruction comprising an index at which the data is stored in
the second memory device, process the retrieve instruction to
obtain encrypted response data, and decrypt the encrypted
response data.

In its Motion to Amend, Patent Owner proposes a substitute claim for
each of the challenged claims. Mot. 1–7. Proposed substitute claim 25
recites, with underlined material indicating language added to original patent
claim 1:
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25. A network memory system for ensuring compliance,
comprising:
a source-site appliance comprising a first processor and a
first memory device, and configured to be coupled to a source-
site computer via a source-site local area network;
a destination-site appliance comprising a second
processor and a second memory device, and configured to be
coupled to a destination-site computer via a destination-site
local area network, the source-site computer in communication
with the destination-site computer via a wide area network;
the source-site appliance configured to intercept original
data sent from the source-site computer to the destination-site
computer, encrypt the original data to generate encrypted data,
store the encrypted data in the first memory device, determine
whether a representation of the original data exists in the second
memory device, and transmit a store instruction comprising the
original data if the representation of the original data does not
exist in the second memory device; and
the destination-site appliance configured to receive the
store instruction from the source-site appliance, encrypt the
original data received with the store instruction at the
destination-site appliance to generate encrypted received data,
store the encrypted received data in the second memory device,
subsequently receive a retrieve instruction comprising an index
at which the encrypted received data is stored in the second
memory device, process the retrieve instruction to obtain
encrypted response data comprising at least a portion of the
encrypted received data, and decrypt the encrypted response
data.

Mot. 1–2.

C. The Asserted Grounds of Unpatentability
We instituted the instant inter partes review on the following grounds
of unpatentability.

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Reference[s] Basis Claims challenged
McCanne1 § 102 1, 2, 7–9, 14–16, and 21–24
McCanne and Stein2 § 103 3, 10, and 17
McCanne and Rarick3 § 103 4, 11, and 18
McCanne and Anand4 § 103 5, 12, and 19
McCanne and
Gleichauf5
§ 103 6, 13, and 20
Dec. on Inst. 24–25.

II. ANALYSIS
A. Challenged Claims
As noted above, Patent Owner did not file a Patent Owner Response
to the Petition. In its Motion to Amend, Patent Owner “moves to cancel
claims 1–24 and to substitute claims 25–48 in their place.” Mot. 1; see
35 U.S.C. § 316(d); 37 C.F.R. § 42.121(a)(3) (“A motion to amend may
cancel a challenged claim or propose a reasonable number of substitute
claims.”). Patent Owner’s request to cancel claims 1–24 is not contingent on
the claims being determined to be unpatentable. We grant the request and
turn to the proposed substitute claims in the Motion to Amend.

1 U.S. Patent Application Publication No. 2004/0088376 A1, published May
6, 2004 (Ex. 1003).
2 U.S. Patent Application Publication No. 2003/0133568 A1, published July
17, 2003 (Ex. 1004).
3 U.S. Patent Application Publication No. 2004/0086114 A1, published May
6, 2004 (Ex. 1005).
4 U.S. Patent Application Publication No. 2003/0002664 A1, published Jan.
2, 2003 (Ex. 1006).
5 U.S. Patent Application Publication No. 2003/0149869 A1, published Aug.
7, 2003 (Ex. 1007).
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B. Proposed Substitute Claims
As the moving party, Patent Owner bears the burden of proof to
establish that it is entitled to the relief requested. See 37 C.F.R. § 42.20(c).
Entry of proposed amendments is not automatic, but occurs only upon the
patent owner having met the requirements of 37 C.F.R. § 42.121 and
demonstrated, by a preponderance of the evidence, the patentability of the
proposed substitute claims. See Idle Free Sys., Inc. v. Bergstrom, Inc., Case
IPR2012-00027, slip op. at 7–8 (PTAB June 11, 2013) (Paper 26, “Idle
Free”) (informative); Toyota Motor Corp. v. American Vehicular Scis. LLC,
Case IPR2013-00419, slip. op. at 4–5 (PTAB Mar. 7, 2014) (Paper 32,
“Toyota”). For the reasons explained below, we conclude that Patent Owner
has not met its burden with respect to claims 25–48.
1. Claim Construction
Patent Owner bears the burden in a motion to amend to show a
patentable distinction of each proposed substitute claim over the prior art.
See 37 C.F.R. § 42.20(c). Accordingly, a “patent owner should identify
specifically the feature or features added to each substitute claim, as
compared to the challenged claim it replaces, and come forward with
technical facts and reasoning about those feature(s).” Idle Free at 7. This
includes “construction of new claim terms, sufficient to persuade the Board
that the proposed substitute claim is patentable over the prior art of record,
and over prior art not of record but known to the patent owner.” Id.; Toyota
at 5. Further, consistent with the statute and legislative history of the Leahy-
Smith America Invents Act, Pub. L. No. 112–29, 125 Stat. 284 (2011), the
Board interprets claims using the “broadest reasonable construction in light
of the specification of the patent in which [they] appear[].” 37 C.F.R.
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§ 42.100(b); In re Cuozzo Speed Tech., LLC, 778 F.3d 1271, 1279–83 (Fed.
Cir. 2015).
In the Decision on Institution, we interpreted various claim terms of
the independent claims of the ’684 patent as follows.
Term Interpretation
“network memory” “device(s) in a network for storing information”
“appliance” “hardware and/or software elements applied to a particular use”
“instruction”
“a message or signal that indicates,
explicitly or implicitly, an action to
perform”

See Dec. on Inst. 7–11. The parties do not dispute these interpretations in
their papers. We do not perceive any reason or evidence that now compels
any deviation from these interpretations. Accordingly, for purposes of
assessing the proposed substitute claims, we incorporate our previous
analysis. See id.
Patent Owner’s proposed substitute claims add limitations to the
original independent claims of the ’684 patent, and in its Motion to Amend,
Patent Owner states it “does not believe any terms of the proposed substitute
claims require construction because there are no new terms, the meaning of
which reasonably can be anticipated as subject to dispute.” Mot. 1–8.
We determine, however, that for purposes of assessing the proposed
substitute claims, the term “data” needs interpretation. Petitioner argues that
original claim 1 requires the source-site appliance to encrypt data before it is
sent and Patent Owner’s proposed substitute claims eliminate this feature,
thereby enlarging the scope of the claims. Opp. 1–4. Original claim 1
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recites, inter alia, “the source-site appliance configured to . . . transmit a
store instruction comprising the data if the data does not exist in the second
memory device; and the destination-site appliance configured to receive the
store instruction from the source-site appliance.” Original claim 1 also
recites that the source-site appliance is “configured to intercept data sent
from the source-site computer to the destination-site computer, encrypt the
data, store the data in the first memory device, [and] determine whether the
data exists in the second memory device.” Although claim 1 recites
“encrypt the data” before “transmit a store instruction comprising the data,”
the language of claim 1 does not require explicitly, as a matter of timing,
that the data is encrypted before it is transmitted as part of the store
instruction. See 2d Kuenning Decl. ¶¶ 6, 8. As Patent Owner points out, the
Specification of the ’684 patent supports interpreting “data” as unencrypted
data, and that the claims are broad enough to encompass any order. Reply 1;
Tr. 10:11–17:18; 2d Kuenning Decl. ¶¶ 4–9.
Patent Owner cites column 13, lines 45–47, of the ’684 patent, which
is part of a description of an embodiment illustrated in Figures 7A and 7B.
See Ex. 1001, 12:48–13:48; Reply 1. In that embodiment, the ’684 patent
describes that central appliance 380 processes response data 725 to
determine whether a portion of that data is locally accessible to branch
appliance 350 and “will transmit the deltas (i.e., the portion of the response
data 725 that is not locally accessible) to the branch appliance 350.” Id. at
12:59–62, 13:11–15. The ’684 patent also states that “[i]f the deltas are not
encrypted, the branch appliance 350 further encrypts the deltas.” Id. at
13:45–47. Thus, the ’684 describes an embodiment where data can be, but
need not be, encrypted before it is transmitted as part of the store instruction.
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As discussed above, the claims do not require encrypting data before
transmitting that data as part of the store instruction. Accordingly, we
decline to import into the claims a limitation based on a specific
embodiment in the Specification. See, e.g., SuperGuide Corp. v. DirecTV
Enters., Inc., 358 F.3d 870, 875 (Fed. Cir. 2004) (“[A] particular
embodiment appearing in the written description may not be read into a
claim when the claim language is broader than the embodiment.”). We
decline to read the exemplary disclosure of encrypting the data before
transmitting it with the store instruction into the broadest reasonable
interpretation of “data.”
Moreover, original claim 8 recites a method including the steps of
“encrypting the data” and “transmitting a store instruction comprising the
data.” Determining if the steps of a method claim that do not otherwise
recite an order, must be performed nonetheless in the order in which they are
written involves a two-part test. “First, we look to the claim language to
determine if, as a matter of logic or grammar, they must be performed in the
order written. If not, we next look to the rest of the Specification to
determine whether it ‘directly or implicitly requires such a narrow
construction.’ . . . If not, the sequence in which such steps are written is not
a requirement.” Altiris, Inc. v. Symantec Corp. 318 F.3d 1363, 1369–70
(Fed. Cir. 2003) (citation omitted); see also Loral Fairchild Corp. v. Sony
Corp., 181 F.3d 1313, 1321 (Fed. Cir. 1999) (holding that the claim
language itself indicated that the steps had to be performed in their written
order because the second step required the alignment of a second structure
with a first structure formed by the prior step); Mantech Envtl. Corp. v.
Hudson Envtl. Servs., Inc., 152 F.3d 1368, 1375–76 (Fed. Cir. 1998)
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(holding that the steps of a method claim had to be performed in their
written order because each subsequent step referenced something logically
indicating the prior step had been performed).
First, the language of claim 8 does not compel that the step of
“encrypting the data” must be performed before the step of “transmitting a
store instruction comprising the data” as a matter of logic or grammar.
Claim 8 recites, inter alia, “intercepting data,” “encrypting the data,”
“storing the data,” and “transmitting a store instruction comprising the data.”
Although the later recited steps refer to “the data,” neither logic nor
grammar compels finding a particular order of performing these later steps.
For example, the transmitting step could be performed before the encrypting
and storing steps.
Turning to whether the Specification of the ’684 patent directly or
implicitly requires a narrower construction in which the recited steps are
performed in a particular order, Patent Owner cites a portion of the ’684
patent that describes an embodiment illustrated in Figures 7A and 7B. As
discussed above, the ’684 patent states that “[i]f the deltas are not encrypted,
the branch appliance 350 further encrypts the deltas.” Ex. 1001, 13:45–47.
Thus, the ’684 patent describes an embodiment where data can be, but need
not be, encrypted before it is transmitted as part of the store instruction. In
the context of this description, we determine that the Specification of the
’684 patent does not require construing “data” in claim 8’s “transmitting a
store instruction comprising the data” to be “encrypted data.”
For the foregoing reasons, we interpret “data” in the original claims of
the ’684 patent to be “encrypted or unencrypted data.” The proposed
substitute claims include two modifiers for the term “data.” For example,
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proposed substitute claim 25 recites “encrypt[ing] the original data to
generate encrypted data.” Thus, the plain meaning of the proposed
substitute claims is that the “original data” is unencrypted and the
“encrypted data” is encrypted. See Tr. 13:6–10.
2. No Broadening of Scope
Proposed substitute claims in an inter partes review “may not enlarge
the scope of the claims of the patent.” 35 U.S.C. § 316(d)(3); see 37 C.F.R.
§ 42.121(a)(2)(ii). In its Motion to Amend, Patent Owner proposes
substituting one of claims 25–48 for one of claims 1–24. Mot. 1–7. Each
claim includes all the limitations of the corresponding claim for which it is a
substitute, and adds additional limitations. Proposed substitute claims 25,
27–29, 31, 32, 39, 41–43, and 45 recite “original data,” and proposed
substitute claims 34–36 recite “first original data.”
Petitioner argues that “original claim 1 of the ’684 patent requires that
‘the data’ transmitted by the source-site appliance to the destination-site
appliance be in encrypted form” and that proposed substitute claim 25
enlarges the scope of claim 1 because “the data flowing between the two
appliances is not encrypted.” Opp. 1–3; see also Tr. 34:5–44:19
(presenting similar arguments). Patent Owner replies that the original claims
“do not require that ‘the data’ transmitted by the source-site appliance is
encrypted.” Reply 1 (citing 2d Kuenning Decl.6 ¶¶ 4–12). Patent Owner
also argues that the Specification of the ’684 patent describes embodiments
in which transmitted data is unencrypted. Id. (citing Ex. 1001, 13:45–47; 2d
Kuenning Decl. ¶¶ 6, 8, 12); Tr. 10:11–17:18. For the reasons discussed
above, we interpret “data” in the original claims to be “encrypted or

6 See Paper 28 (Order renumbering Ex. 2007 as Ex. 2013).
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unencrypted data.” Thus, we are not persuaded by Petitioner’s arguments
that proposed substitute claim 25 enlarges the scope of claim 1, for which
claim 25 is a proposed substitute.
Petitioner also argues that proposed substitute claim 38 enlarges the
scope of claim 14, which claim 38 is proposed to replace. Opp. 4; Paper 30.
As issued, claim 14 depends from claim 9. Ex. 1001, 18:61–63. Proposed
substitute claim 38 depends from proposed substitute claim 32, which is
proposed to replace claim 8. Mot. 3. In other words, the dependency of
proposed substitute claim 38 has changed. Patent Owner replies that
“[a]lthough the ’684 patent shows claim 14 depending from original claim 9,
this dependency is a printing error.” Reply 1; see also Paper 29 (arguing
that the dependency of claim 14 is a printing error). Patent Owner also filed
a request for certificate of correction. Exs. 3001, 3002; see also Paper 34
(granting Patent Owner’s motion for authorization to file a certificate of
correction). A certificate of correction for the ’684 patent issued during this
proceeding and states that the ’684 patent is corrected so that “[i]ssued claim
14 should depend from issued claim 8.” Ex. 3003. In view of the certificate
of correction issued for the ’684 patent, Petitioner’s argument that proposed
substitute claim 38 enlarges the scope of claim 14 is not persuasive.
Accordingly, for the foregoing reasons, we determine that the
proposed substitute claims do not enlarge the scope of the original patent
claims.
3. Written Description Support
Pursuant to 37 C.F.R. § 42.121(b), a motion to amend in an inter
partes review must set forth “[t]he support in the original disclosure of the
patent for each claim that is added or amended” and “[t]he support in an
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earlier-filed disclosure for each claim for which benefit of the filing date of
the earlier filed disclosure is sought.”
In its Motion to Amend, Patent Owner explains how the subject
matter of its proposed substitute claims have written description support in
the Specification of the ’026 application, which issued as the ’684 patent.
Mot. 8–9. Regarding the added limitations, Patent Owner relies on Figures
4, 6, and 7 and paragraphs 56–58, 66–71, and 76 of the ’026 application. Id.
Patent Owner states that the cited portions describe “store and retrieve
operations including encrypting flow history pages (FHPs) at the source-site
appliance using AES, DES, 3DES,” “that the destination-site appliance can
encrypt received data,” and “decrypting encrypted response data and
transmitting the decrypted response data.” Id. Patent Owner also provides
citations for other limitations of the proposed substitute claims. Id. (citing
¶¶ 39–49, 79–81, 94–96; Figs. 3, 8, 9, 12, 13 of the ’026 application).
Petitioner in its Opposition does not argue that the claims lack sufficient
written description support.
Upon review of Patent Owner’s arguments and the disclosures of the
application that issued as the ’684 patent, we conclude that Patent Owner has
made a sufficient showing that proposed claims 25–48, as a whole, have
written description support in the disclosure of the application as filed.
4. Proposed Substitute Claims
Having interpreted the language of the claims and having determined
that Patent Owner’s proposed substitute claims do not enlarge the scope of
the claims of the ’684 patent and have sufficient written description support,
we turn to the claims specifically to determine if Patent Owner has met its
burden of proof.
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In a motion to amend, the patent owner bears the burden of proof to
demonstrate patentability of its proposed substitute claims over the prior art
and, thus, entitlement to the claims. Idle Free at 7. This does not mean that
the patent owner is assumed to be aware of every item of prior art known to
a person of ordinary skill in the art. The patent owner, however, should
explain in its motion why the proposed substitute claims are patentable over
not just the prior art of record, but also prior art not of record but known to
the patent owner:
A patent owner should identify specifically the feature or
features added to each substitute claim, as compared to the
challenged claim it replaces, and come forward with technical
facts and reasoning about those feature(s), including
construction of new claim terms, sufficient to persuade the
Board that the proposed substitute claim is patentable over the
prior art of record, and over prior art not of record but known to
the patent owner. The burden is not on the petitioner to show
unpatentability, but on the patent owner to show patentable
distinction over the prior art of record and also prior art known
to the patent owner. Some representation should be made about
the specific technical disclosure of the closest prior art known
to the patent owner, and not just a conclusory remark that no
prior art known to the patent owner renders obvious the
proposed substitute claims.

Id. This includes addressing the basic knowledge and skill set possessed by
a person of ordinary skill in the art even without reliance on any particular
item of prior art. Id. at 7–8; Toyota at 4–5. The petitioner then has the
opportunity, in its opposition, to argue any deficiency in the patent owner’s
motion and “come forward with specific evidence and reasoning, including
citation and submission of any applicable prior art,” to rebut the patent
owner’s position on patentability. Idle Free at 8.
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Proposed substitute claim 25 adds that the source-site appliance is
configured to intercept original data sent from the source-site
computer to the destination-site computer, encrypt the original data to
generate encrypted data, store the encrypted data in the first memory
device, determine whether a representation of the original data exists
in the second memory device, and transmit a store instruction
comprising the original data if the representation of the original data
does not exist.

Proposed substitute claim 25 also adds that the destination-site
appliance is
configured to . . . encrypt the original data received with the store
instruction at the destination-site appliance to generate encrypted
received data, store the encrypted received data in the second memory
device, subsequently receive a retrieve instruction comprising an
index at which the encrypted received data is stored . . . , [and]
process the retrieve instruction to obtain encrypted response data
comprising at least a portion of the encrypted received data.

Patent Owner asserts that the “prior art does not disclose or suggest
the claimed feature of ‘encrypt[ing] the original data received with the store
instruction at the destination-site appliance to generate encrypted received
data’ and ‘stor[ing] the encrypted received data in the second memory
device.’” Mot. 9–10 (citing Kuenning Decl. ¶¶ 45–76). Patent Owner also
states that “a system having the claimed features could be configured to
independently encrypt . . . data stored at each source-site and each
destination-site appliance,” which “would enable appliances at different
locations to meet their own specific compliance and/or performance
requirements.” Id. Patent Owner also states that “a system having the
claimed features could be configured to independently encrypt data in transit
and data in storage.” Id. at 10–11 (citing Kuenning Decl. ¶ 22).
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Patent Owner contends that McCanne “represents the closest prior art
known to the Patent Owner.” Mot. 11 (citing Kuenning Decl. ¶ 54).
a. McCanne
McCanne relates to systems for moving data efficiently through
limited-bandwidth channels. Ex. 1003 ¶ 2. In networked-file systems,
applications may use files stored in another location. Id. ¶ 4. An example of
a transaction involving such files can include a client sending a request for
the file to a server, and the server sending the file as a response to the client.
Id. ¶¶ 43, 45. McCanne describes a networked client-server system 10,
where such transactions can occur, as shown in Figure 1, reproduced below.
Id. ¶ 48.

Figure 1 depicts clients 12 coupled to servers 14 over network 16 via
client-side transaction accelerators 20 (“CTAs”) and server-side transaction
accelerators 22 (“STAs”). Id. The CTAs and STAs each may be
implemented as a single program with data memory, program memory, and
a processor. Id. ¶ 64. CTA 20 and STA 22 can each include a persistent
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segment store (“PSS”). Id. ¶ 61. McCanne describes that when client 12
sends a request for data, the request passes through CTA 20 and is routed to
the appropriate STA 22. Id. ¶¶ 52, 56. Server 14 receives the request,
formulates a response to the request, and sends the response toward the
client 12 via STA 22 to which server 14 is coupled. Id. ¶ 57.
The STA examines the payload of the transaction and stores strings or
other sequences of data (i.e., segment data) derived from those payloads. Id.
¶ 69. If the STA can expect that the CTA would have the segment data, the
STA may replace the segment data in the payload with references to the
segment data. Id. McCanne describes that the sending accelerator (the STA
in the example above) determines “whether or not to replace the segment
data with a reference” either because it appeared in an earlier transaction or
was previously sent through other processes to the receiving accelerator (the
CTA in the example above). Id. McCanne describes “a bindings table of a
simple PSS” and “the bindings table stores a plurality of bindings.” Id. ¶ 87.
“The binding records might include other fields . . . such as those listed in
Table 1.” Id. Table 1 includes “encoding method identifier (e.g., unencoded
raw data, run-length encoded, MD5, encoded, encrypted).” Id. Table 1. The
sending transaction accelerator (“TA”) can also “transmit invertible
functions of the segments, e.g., forward correction encoded blocks of
segments, encryptions of segments, signatures of segments, or the like.” Id.
¶ 89.
The CTA that receives the reference to the segment data substitutes
the reference with the segment data before sending the reconstructed file to
the client that made the request. Id. ¶ 70. “By sending references instead of
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segment data, the total traffic between T[ransaction] A[ccelerators] during
the transaction is reduced.” Id. ¶ 75.
b. Patentability over McCanne
Patent Owner acknowledges that McCanne discloses encryption, but
argues that McCanne “does not substantively discuss or contemplate data
security or implementing policies for regulatory compliance through
application data security to WAN optimization data.” Id. (citing Kuenning
Decl. ¶ 46; Ex. 1003 ¶¶ 87–89). Patent Owner also argues that McCanne
“does not disclose performing encryption at the receiving TA, as recited in
the proposed substitute claims.” Id. (discussing Ex. 1003 ¶¶ 87–89). Patent
Owner further argues that other prior art fails to disclose the recited
encryption features. Id. at 11–12 (citing Kuenning Decl. ¶ 54).
Patent Owner asserts that the “proposed substitute claims are not
rendered obvious in view of the prior art.” Mot. 12 (citing Kuenning Decl.
¶ 50). Patent Owner argues that, at the time of invention, an ordinarily
skilled artisan would have understood “data could be secured using
encryption when it is being stored in files and that data could be secured
using encryption when being transmitted between servers and clients” but
“would not have appreciated the data security risks and vulnerabilities posed
by WAN optimization devices.” Id. (citing Kuenning Decl. ¶¶ 51–66).
Patent Owner argues that “data security risks in the context of data stored at
WAN optimization devices were generally unaddressed prior to the
invention of the proposed substitute claims.” Id.
Patent Owner argues that McCanne “mentions ‘security’ only in its
‘Background’ section in the context of very generally explaining that a
conventional non-accelerated network configuration may include security
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measures to control access to servers” but “does not once mention data
security in the context of describing its transaction accelerator system.”
Mot. 14 (citing Kuenning Decl. ¶¶ 69, 70). Patent Owner also argues that,
although McCanne mentions that data can be stored encrypted, McCanne
“does not teach that encryption is desirable for the purpose of securing data
stored at the TAs.” Id. Patent Owner further argues that the embodiment of
McCanne, in which encryption-based encoding is applied, would have
practical problems with “key management, distribution, and revocation and,
increased risk of potentially catastrophic data breaches.” Id. Patent Owner,
thus, argues that McCanne “would not have led a person of ordinary skill in
the art to the security features of the proposed substitute claims.” Id. at 14–
15 (citing Kuenning Decl. ¶ 75). Patent Owner further argues that McCanne
“only teaches encoding of segments according to a reversible function
(which may be encryption)” but a “person of ordinary skill in the art would
have found it most efficient to perform such encoding only at the sending
TA” because “it was much simpler, less expensive, and more efficient from
a processing standpoint to encode the data only once at the sending TA
instead of encoding at each receiving TA.” Id. at 15.
Petitioner argues that McCanne anticipates proposed substitute claims
25, 26, 31–33, 38–40, and 45–48. Opp. 8–12. Petitioner asserts that
McCanne discloses “the STA (source-site appliance) intercepts data
(original data) sent from the server (source-site computer) to the client
(destination-site computer).” Id. at 8–9 (citing Ex. 1003 ¶¶ 60, 69, 89, 94).
Petitioner also contends that the STA encrypts the original data and stores
the encrypted data in its persistent segment store (“PSS”) or first memory
device. Id. (citing Ex. 1003 ¶¶ 87–89, 94, 95, Table 1, claims 4, 5).
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Petitioner further argues that the STA determines whether the original data
exists in the PSS of a CTA or destination-site appliance. Id. (citing Ex. 1003
¶¶ 69, 78, 90). Petitioner also argues that the STA transmits encoded data or
a store instruction that includes the original data in the form of “bindings” to
the CTA. Id. (citing Ex. 1003 ¶¶ 69, 78, 88, 90, 94, Table 1).
Petitioner argues that McCanne discloses that the CTA is configured
to receive the encoded data or store instruction that includes original data.
Opp. 9 (citing Ex. 1003 ¶¶ 78, 87–89, 94–97, 101, Table 1). Petitioner also
argues that McCanne discloses encrypting the received data and storing the
encrypted data in the PSS or second memory device of the CTA. Id. (citing
Ex. 1003 ¶¶ 78, 87–89, 101, Table 1, claims 4, 5).
Petitioner argues that Patent Owner acknowledges that McCanne
discloses disk encryption at the sending TA but incorrectly asserts that
McCanne does not disclose encryption at the receiving TA. Opp. 10 (citing
Mot. 10). Petitioner contends that Patent Owner’s declarant acknowledges
that either accelerator 20 or 22 can be a receiver, and both can store segment
data. Id. at 11 (citing Kuenning Dep. 24–25). Petitioner also argues that
McCanne discloses encrypting segment data when it is stored. Id. (citing
Ex. 1003 ¶¶ 87–89, claims 4, 5). Petitioner, thus, argues McCanne discloses
that the receiving TA stores data and that, when the data is stored, it is
encrypted. Id. at 11–12 (citing Ex. 1003 ¶¶ 87–89, claims 4, 5).
Petitioner also argues that McCanne renders obvious proposed
substitute claims 25, 26, 31–33, 38–40, and 45–48. Opp. 12–15. In
particular, Petitioner argues that McCanne renders obvious modifying a
receiving WAN optimization device to encrypt and store data. Id. at 12.
Petitioner asserts that Patent Owner’s declarant acknowledges McCanne
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discloses that the receiving WAN optimization device stores segment data,
states that “encryption techniques could be used to secure it,” and states that
it was known to skilled artisans to “‘implement disk encryption both on the
sending side and the receiving side.’” Id. at 12–13 (citing Kuenning Dep. 7,
24–25; Kuenning Decl. ¶¶ 51, 58, 76). Petitioner also asserts that modifying
McCanne “to encrypt data at both the sending and receiving side device
would have been a predictable result,” the proposed modification addresses a
concern of those skilled in the art regarding “security of data stored on WAN
optimization devices,” and “as acknowledged by Patent Owner’s expert, it
was known how to implement disk encryption on a receiving side device.”
Id. at 14.
Patent Owner replies that “it would not have been obvious to apply
encryption on a receiving side of a WAN optimization appliance.” Reply 4
(citing 2d Kuenning Decl. ¶¶ 40–43; Mot. 9–15). Patent Owner also argues
that McCanne does not teach encrypting received data and storing the
encrypted received data in the PSS of the CTA. Id. (citing 2d Kuenning
Decl. ¶¶ 44–51). Patent Owner asserts that McCanne “exclusively
contemplates performing encryption at a sending TA” because “[f]or any
given transaction, only the sender, and not the receiver, may perform
encryption.” Id. at 5. Patent Owner relies on its declarant’s testimony to
argue that “it would not have been obvious to encrypt the data in an
optimization appliance” and the Kuenning Declarations “explain why at
length.” Id. (citing Kuenning Decl. ¶¶ 51–76; 2d Kuenning Decl. ¶¶ 52–54).
Patent Owner only disputes Petitioner’s assertion that McCanne
discloses that the destination-site appliance is configured to “encrypt the
original data received with the store instruction at the destination-site
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appliance to generate encrypted received data” and “store the encrypted
received data in the second memory device,” recited in proposed substitute
claim 25 and similarly recited in the other proposed substitute independent
claims. See Reply 4–5. We agree with Patent Owner that McCanne does
not disclose explicitly that its receiving TA is configured to “encrypt the
original data received with the store instruction . . . to generate encrypted
received data” and “store the encrypted received data in the second memory
device.” See id. at 5. Thus, we are not persuaded that McCanne anticipates
the proposed substitute claims, as asserted by Petitioner, because McCanne
fails to describe each and every element as set forth in the proposed
substitute claims, either expressly or inherently. See Opp. 8–12; Verdegaal
Bros., Inc. v. Union Oil Co. of Cal., 814 F.2d 628, 631 (Fed. Cir. 1987).
Patent Owner, however, has not shown sufficiently that the proposed
substitute claims would not have been obvious over McCanne. McCanne
discloses “a bindings table of a simple PSS” and “the bindings table stores a
plurality of bindings.” Ex. 1003 ¶ 87 (describing Fig. 3). McCanne also
states that “[t]he binding records might include other fields . . . such as those
listed in Table 1.” Id. Table 1 includes “encoding method identifier (e.g.,
unencoded raw data, run-length encoded, MD5, encoded, encrypted).” Ex.
1003, Table 1 (emphasis added). Thus, in view of paragraph 87 and Table 1,
McCanne teaches that the bindings table of its PSS stores data with a field
that identifies the data encoding method by which the stored data is encoded,
such as “encrypted.” Also, as Petitioner points out (Opp. 11), McCanne
claims “when segment data is to be stored as part of a segment reference,
transforming the segment data via an invertible function of the segment data,
and storing the results of this transformation” and “the invertible function is
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one or more of a forward error correction function, an encryption function,
and a signature function.” Ex. 1003, claims 4, 5 (emphasis added). Thus,
claims 4 and 5 also teach, when segment data is to be stored, transforming
the segment data via an encryption function and storing the results of the
transformation.
McCanne also states that the “elements of CTA 20 . . . include . . . a
persistent segment store (PSS) 36.” Ex. 1003 ¶ 61. As discussed above, the
bindings table of a PSS stores a plurality of bindings and encoding method
identifier, such as “encrypted.” See Ex. 1003 ¶ 87, Table 1. McCanne
further states that the “receiver can obtain the segment data for inclusion in
its persistent store” and the “receiving TA can obtain segment data for
storage in its PSS from a side channel or as part of the traffic from the
sending TA.” Ex. 1003 ¶¶ 73, 76. McCanne also states that “[a]t the
receiving TA (the CTA . . . ), . . . for the new, changed segments, the
references are resolved from bindings included in the stream from the
sender” and “[t]hose bindings can then be stored . . . into the receiver’s
PSS.” Id. ¶ 78. As Petitioner points out (Opp. 9), McCanne further states
“the sending TA can transmit invertible functions of the segments, e.g.,
forward error correction encoded blocks of segments, encryptions of
segments, signature of segments, or the like.” Id. ¶ 89 (emphases added).
Thus, McCanne teaches that Petitioner’s asserted destination-site appliance,
the CTA, can store encrypted data in its PSS, the asserted second memory
device, as Dr. Kuenning acknowledges. See Kuenning Dep. 24:15–25,
25:5–13. The testimony cited by Petitioner from the deposition of Dr.
Kuenning is reproduced below:
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Q. Now, assuming a person in the field knew how to
implement disk encryption, whether that was by writing an
algorithm or using commercially available software, it would
have been known to implement -- it would have been known
how to implement disk encryption both on the sending side and
the receiving side?
A. The knowledge existed, yes.
. . .
Q. Both transaction accelerators, 20 and transaction accelerator
22 [in McCanne], has it’s own storage medium; right?
A. That’s correct.
Q. That storage medium is the persistent segment storage;
right?
A. Yes.
Q. Or PSS; correct?
A. Yes.
Q. And those are marked by 36 and 46; correct?
A. Yes.
Q. Both sides store segmented data in it’s respective PSS;
correct?
A. That’s correct.

Kuenning Dep. 24:1–7, 24:15–25:7. Petitioner also cites the
following from the deposition of Dr. Kuenning:
Q. In 2005, it was known to those of ordinary skill in the art
that there were benefits to encrypting data on both sending-side
disks and receiving-side disks?
A. It was generally known to people of ordinary skill in the art
that in certain circumstances where data as at risk. Encryption
was one of the solutions available for protecting that data, so if
the data is on the source side residing on a static disk, then yes,
encrypting that data on that disk would be known to people of
ordinary skill in the art and, similarly, for data on the
destination side.

Kuenning Dep. 7:9–20. Also, in his first declaration, Dr. Kuenning
states:
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51. At the time of the invention, a person of ordinary skill in the
art would have understood that data could be secured when it is
being stored in files on servers and recognized that encryption
techniques could be used to secure it. Such a person would
have some understanding of circumstances when it would be
desirable to secure this data and also would have understood or
perceived that there were potential negative performance
impacts of encryption in terms of processing resources for the
(en)(de)cryption operations, system response time, and
administrative overhead for key management, replication,
backup and recovery.

52. A person of ordinary skill in the field would have known
about various disk-based encryption technologies for data in
storage (e.g., to protect against theft). A person of ordinary
skill in the art furthermore would have understood the security
benefits provided by such technologies in the context of a
conventional network system. Examples of such known
technologies are discussed in the various secondary references
cited in the Petition for . . . IPR2014-00245 (Paper 2 or
“Petition”) and are also discussed in the Declaration of Steven
Landauer . . . These references include Stein . . . , Rarick . . . ,
Anand . . . , and Gleichauf . . . .

Kuenning Decl. ¶¶ 51–52.
Although “‘the [obviousness] analysis need not seek out precise
teachings directed to the specific subject matter of the challenged claim,’”
“‘there must be some articulated reasoning with some rational underpinning
to support the legal conclusion of obviousness.’” KSR Int’l Co. v. Teleflex
Inc., 550 U.S. 398, 418 (2007). Also, “[t]he combination of familiar
elements according to known methods is likely to be obvious when it does
no more than yield predictable results.” KSR, 550 U.S. at 416. Petitioner
contends that modifying McCanne “to encrypt data at both the sending and
receiving side device would have been a predictable result.” Opp. 14.
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McCanne describes TAs or WAN optimization devices, a transmitting TA
communicating with a receiving TA, providing each TA with its own PSS,
and storing encrypted segment data in a PSS of the transmitting TA. Ex.
1003 ¶¶ 48, 61, 87, Table 1, Figs. 1, 2; Kuenning Dep. 8:16–19, 10:12–22.
Providing the receiving TA with the encrypting and storing of data
performed at the transmitting TA uses elements and methods taught by
McCanne. Therefore, we determine that Petitioner’s proposed modification
combines the elements of McCanne in accordance with its teachings to yield
the predictable result of securing data–the well-known function of
encryption, which Patent Owner acknowledges (see Mot. 12)–stored on both
sending and receiving WAN optimization devices, as argued by Petitioner.
See Opp. 14.
Petitioner also contends that one of ordinary skill in the art would
have had reason to modify McCanne so that its receiving TA encrypts
received data and stores the encrypted, received data in its PSS because of
security concerns for the data stored on WAN optimization devices. See
Opp. 14. As discussed above, McCanne describes that the bindings table of
its PSS stores data with a field that identifies the data encoding method as
“encrypted.” Ex. 1003 ¶ 87, Table 1. McCanne, thus, suggests or motivates
providing security to data stored in its PSS because McCanne describes that
the data encoding method can be “encrypted.” See id. McCanne further
describes that the same data may be stored in the PSS’s of both transmitting
and receiving TAs. See Ex. 1003 ¶ 70 (“Because the segments can be
uniquely named and the names can be independent of the transaction, a
segment appearing in one transaction can be stored at both TAs and used for
accelerating other transactions.”). Therefore, if security of data stored in the
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PSS of a transmitting TA is a concern as suggested by McCanne, then
security of the same data stored in the PSS of a receiving TA may also be a
concern. Thus, we determine that McCanne suggests or motivates providing
security to the same data stored in PSS’s of the transmitting and receiving
TA.
Petitioner cites a reference in support of its rationale for its proposed
modification. See Opp. 14 (citing Ex. 1013). Patent Owner argues that the
reference is not a printed publication and is not prior art under 35 U.S.C.
§ 102. See Reply 2–4 (discussing Exs. 1012, 1013). A particular prior art
reference used to show motivation for a proposed modification, however, is
not required as part of an obviousness case. See KSR, 550 U.S. at 419.
Also, we determine that McCanne itself provides a suggestion or motivation
for Petitioner’s proposed modification.
Importantly, Patent Owner acknowledges that “[a]t the time of the
invention, a person of ordinary skill in the art would have understood that
data could be secured using encryption when it is being stored in files and
that data could be secured using encryption when being transmitted between
servers and clients.” Mot. 12 (citing Kuenning Decl. ¶¶ 51–53). Patent
Owner argues that an ordinarily skilled artisan “would not have appreciated
the data security risks and vulnerabilities posed by WAN optimization
devices” and “data security risks in the context of data stored at WAN
optimization devices were generally unaddressed prior to the invention of
the proposed substitute claims.” Id. (citing Kuenning Decl. ¶¶ 54–66).
Patent Owner cites U.S. Patent No. 8,613,071 to Day (Ex. 2002, “Day”)7,

7 Patent Owner states that “Day . . . discloses a WAN optimization system
that performs encryption at the receiving TA, but does not write this
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which Patent Owner does not concede to have a filing date or claimed
priority date that is earlier than Patent Owner’s date of invention. Id. at 12–
13 (citing Day, 8:50–9:3, Kuenning Decl. ¶ 55); see also Tr. 31:17–33:5
(acknowledging that no evidence or analysis has been presented to verify
Patent Owner’s position). Patent Owner also argues that “there was little to
no recognition by those ordinarily skilled in the field, of data security risks
posed by unencrypted data in optimization appliances” and “optimization
appliances were not perceived to pose the same risk as databases or other
long-term storage.” Id. at 13 (citing Kuenning Decl. ¶¶ 19, 66).
Although McCanne may not disclose explicitly that security of data
stored at WAN optimization devices was a concern, McCanne suggests

encrypted data to the storage of [the] receiving TA” and “the receiving TA
encrypts only the outgoing re-assembled data (i.e., the decoded data after all
store/retrieve instructions are processed) to the client/server.” Mot. 12–13
(citing Day 8:50–9:3, Kuenning Decl. ¶ 55); see also Tr. 22:13–25:9
(discussing Day). Patent Owner appears to be relying on Day to
demonstrate patentability of the proposed substitute claims, even though
Patent Owner contends that Day is not prior art. Nevertheless, to address
fully the patentability of the proposed substitute claims, we note that Day
discloses encryption of data received at a destination-site appliance. See Ex.
2002, col. 8, l. 66–col. 9, l. 3 (“Client-side transaction accelerator 320c de-
optimizes the received network traffic and applies the appropriate encryption
to the de-optimized network traffic before sending it via secure connection
312b to client 310c.”). In response to this particular disclosure, Patent
Owner argued at the oral hearing that the proposed substitute claims are
distinguishable from Day based on Patent Owner’s understanding of Day’s
description of the type of encryption performed and the purpose of the
encryption of data received at a destination-site appliance. Tr. 25:10–31:16.
We are not persuaded, however, that Day supports Patent Owner’s
understanding, as the reference expressly discloses the encryption of
received data at the destination-site appliance—the same feature that Patent
Owner contends is lacking in McCanne.
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encrypting data stored at a WAN optimization device, because it describes
that the data segments stored in a PSS of a transmitting TA can be stored
with a field that identifies the data encoding method as “encrypted.” See
Ex. 1003 ¶ 87, Table 1. The cited portions of Dr. Kuenning’s testimony also
do not refer to any support for the assertion that those skilled in the art did
not perceive data stored in a WAN optimization device to be at risk, like the
data in a database or other long-term storage. Thus, Patent Owner’s
arguments regarding recognition in the art of a security concern in WAN
optimization devices are not persuasive.
Patent Owner also argues that “it was generally thought that
encryption and decryption of stored data came with a performance tradeoff
that were undesirable and ran counter to the purpose of WAN optimization
devices, which are intended to accelerate network transactions.” Mot. 13–14
(citing Kuenning Decl. ¶¶ 67–68). A proposed modification may have
simultaneous advantages and disadvantages, but that does not necessarily
obviate any or all reasons to combine teachings. See Winner Int’l Royalty
Corp. v. Wang, 202 F.3d 1340, 1349 n.8 (Fed. Cir. 2000) (“The fact that the
motivating benefit comes at the expense of another benefit, . . . should not
nullify its use as a basis to modify the disclosure of one reference with the
teachings of another. Instead, the benefits, both lost and gained, should be
weighed against one another.”). Thus, we are not persuaded that a tradeoff
between performance and security necessarily obviates a reason to modify
McCanne.
Petitioner states, and we agree, that “Patent Owner does not
individually argue the patentability of any of the proposed substitute claims
other than the above discussed portions of claim 25.” Opp. 15; see also Mot.
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9–15 (arguing allowability of proposed substitute claims), Reply 2–5
(arguing patentability over McCanne). For the foregoing reasons, we
determine that Patent Owner has not met its burden of proof to demonstrate
patentability of its proposed substitute claim 25, or the other proposed
substitute claims, over the prior art. Therefore, we deny Patent Owner’s
Motion to Amend as to proposed substitute claims 25–48 under 37 C.F.R.
§ 42.121(a)(2)(i).
5. Proposed Substitute Claims 39–45 and 48
As explained above, Patent Owner bears the burden of proof to show
that it is entitled to the relief it requests—namely, entry of the proposed
substitute claims. See supra Section II.B; 37 C.F.R. § 42.20(c). This
requires that Patent Owner make a sufficient showing of patentability over
the prior art under 35 U.S.C. §§ 102 and 103, but also that the proposed
substitute claims be patent-eligible in the first place. See Ariosa Diagnostics
v. Isis Innovation Ltd., Case IPR2012-00022, slip op. at 50–53 (PTAB Sept.
2, 2014) (Paper 166) (denying the patent owner’s motion to amend in an
inter partes review for failure to demonstrate that the proposed substitute
claims recited patent-eligible subject matter under 35 U.S.C. § 101);
Volusion, Inc. v. Versata Software, Inc., Case CBM2013-00017, slip op. at
4–5 (PTAB Dec. 20, 2013) (Paper 19) (concluding, in a covered business
method patent review where the sole ground was eligibility under 35 U.S.C.
§ 101, that the patent owner was required to demonstrate patentability over
the prior art); id., slip op. at 2–5 (PTAB Jan. 27, 2014) (Paper 24). In many
cases, particularly where a proposed amendment merely adds limitations to
an original patent claim, patent eligibility will be clear. With respect to
proposed substitute claims 39–45 and 48, in addition to the reasons
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discussed above regarding patentability, we are not persuaded that these
claims recite patent-eligible subject matter under 35 U.S.C. § 101.
Proposed substitute claim 39 recites:
39. A software product for ensuring compliance in
network memory comprising:
software operational when executed by a processor to
direct the processor to intercept original data sent from a
source-site computer to a destination-site computer, encrypt the
original data in a source-site appliance to generate encrypted
data, store the encrypted data in a first memory device within
the source-site appliance, determine whether a representation of
the original data exists in a destination-site appliance, transmit a
store instruction comprising the original data from the source-
site appliance based on the determination that the representation
of the original data does not exist in the destination-site
appliance, receive the store instruction into the destination-site
appliance, encrypt the original data received with the store
instruction at the destination-site appliance to generate
encrypted received data, store the encrypted received data in a
second memory device within the destination-site appliance,
subsequently receive a retrieve instruction into the destination-
site appliance, the retrieve instruction comprising an index at
which the encrypted received data is stored, process the retrieve
instruction to obtain encrypted response data in the destination-
site appliance, the encrypted response data comprising at least a
portion of the encrypted received data, and decrypt the
encrypted response data in the destination-site appliance; and
a storage medium that stores the software.

Proposed substitute claims 40–45 and 48, which depend from
proposed substitute claim 39, likewise recite a “software product,” and
further limit the steps performed by software when executed by a processor
and limit the “destination-site computer.” Mot. 6–7.
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A claim directed to a transitory, propagating signal is not statutory
subject matter under any of the four categories of 35 U.S.C. § 101: “process,
machine, manufacture, or composition of matter.” In re Nuijten, 500 F.3d
1346, 1357 (Fed. Cir. 2007). “If a claim covers material not found in any of
the four statutory categories, that claim falls outside the plainly expressed
scope of § 101 even if the subject matter is otherwise new and useful.” Id. at
1354. Terms like “machine-readable storage medium,” when given their
broadest reasonable interpretation, may encompass a transitory signal,
particularly when the specification is silent on the issue. See Ex parte
Mewherter, No. 2012-007692, 2013 WL 4477509, at *2–7 (PTAB May 8,
2013) (precedential) (“Mewherter”); U.S. Patent & Trademark Office,
Subject Matter Eligibility of Computer Readable Media, 1351 Off. Gaz. US
Pat. Off. 212 (Feb. 23, 2010) (“The broadest reasonable interpretation of a
claim drawn to a computer [readable] medium (also called machine readable
medium and other such variations) typically covers forms of non-transitory
tangible media and transitory propagating signals per se in view of the
ordinary and customary meaning of computer readable media, particularly
when the specification is silent.”); see also Allvoice Developments US, LLC
v. Microsoft Corp., No. 2014-1258, 2015 WL 2445055, at *8 (Fed. Cir. May
22, 2015) (“instructions, data, or information alone, absent a tangible
medium, is not a manufacture”).
Proposed substitute claims 39–45 and 48 each recite a “software
product” comprising “software,” which will be executed by a processor, and
a “storage medium that stores the software.” Mot. 5–7. The language of the
claims themselves does not preclude the storage medium from being a
transitory signal. Nor does the Specification of the ’684 patent define the
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terms or limit the claim language to a non-transitory embodiment. Instead,
the Specification provides that “software” is simply an example of
“executable instructions,” and describes examples of “storage media” where
such instructions may be stored:
The above-described functions can be comprised of
executable instructions that are stored on storage media. The
executable instructions can be retrieved and executed by a
processor. Some examples of executable instructions are
software, program code, and firmware. Some examples of
storage media are memory devices, tape, disks, integrated
circuits, and servers. The executable instructions are operational
when executed by the processor to direct the processor to
operate in accord with the invention. Those skilled in the art are
familiar with executable instructions, processor(s), and storage
media.
The above description is illustrative and not restrictive.
Many variations of the invention will become apparent to those
of skill in the art upon review of this disclosure. The scope of
the invention should, therefore, be determined not with
reference to the above description, but instead should be
determined with reference to the appended claims along with
their full scope of equivalents.

Ex. 1001, 17:23–39. Applying the broadest reasonable interpretation of
claims 39–45 and 48, we interpret the claims as encompassing both
transitory and non-transitory media, and as a result, conclude that the claims
do not recite patent-eligible subject matter under 35 U.S.C. § 101. The
situation is akin to that presented in Mewherter, where the claims recited a
“machine readable storage medium having stored thereon a computer
program, . . . the computer program comprising a routine set of instructions
for causing [a] machine to perform” certain steps, and the Specification did
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not limit the claimed storage medium to being non-transitory. 2013 WL
4477509, at *1.
Patent Owner does not address in its Motion to Amend whether
proposed substitute claims 39–45 and 48 recite patent-eligible subject matter
under 35 U.S.C. § 101. At the oral hearing, Patent Owner argued that no
reasonable interpretation of these claims would read on a purely transitory
medium. Tr. 33:6–19. In addition to the fact that Patent Owner’s argument
was not raised in its papers, we are not persuaded that the Specification
limits the claims to solely a non-transitory medium, as it only discloses non-
limiting examples of storage media. See Ex. 1001, 17:23–39.
Patent Owner’s Motion to Amend is denied as to proposed substitute
claims 39–45 and 48 because Patent Owner has not shown that the claims
recite patent-eligible subject matter under 35 U.S.C. § 101.

III. ORDER
Based on the record presented in this proceeding, Patent Owner has
not met its burden with respect to proposed substitute claims 25–48.
In consideration of the foregoing, it is hereby:
ORDERED that Patent Owner’s Motion to Amend is granted to the
extent it requests cancellation of claims 1–24 of the ’684 patent;
FURTHER ORDERED that Patent Owner’s Motion to Amend is
denied as to proposed substitute claims 25–48;
FURTHER ORDERED that Exhibit 2015 is expunged from the record
in accordance with Paper 36; and
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FURTHER ORDERED that, because this is a final written decision,
the parties to the proceeding seeking judicial review of the decision must
comply with the notice and service requirement of 37 C.F.R. § 90.2.

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PETITIONER:
David M. O’Dell
Kyle Howard
John Russell Emerson
Andrew S. Ehmke
HAYNES AND BOONE, LLP
david.odell.ipr@haynesboone.com
kyle.howard.ipr@haynesboone.com
russell.emerson.ipr@haynesboone.com
andy.ehmke.ipr@haynesboone.com

PATENT OWNER:
Darren E. Donnelly
Jason Amsel
FENWICK & WEST LLP
ddonnelly-ptab@fenwick.com
jamsel-ptabr@fenwick.com