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Apple, VirnetX Spar In Fed. Circ. Over Patent Appeal Remand
Share us on: By Matt Bernardini
Law360 (January 8, 2019, 8:46 PM EST) -- Counsel from both Apple Inc. and VirnetX Inc. on Tuesday received tough questions from a Federal Circuit panel regarding whether the U.S. Patent Trial and Appeal Board has the authority to re-examine two pre-America Invents Act VirnetX patents that were ruled invalid after Apple challenged them.
Federal Circuit Judge Jimmy Reyna seemed skeptical of VirnetX’s argument that the court should terminate several inter partes reviews of its network security patents because the Federal Circuit’s Fairchild Corp. v. Power Integrations Inc. decision prohibits reexamination of patents already found to be valid.
“In Fairchild the remand was not related to the patent, and here we do have issues that are related to the patent,” Judge Reyna said. “One of the reasons why the court in Fairchild found finality was that all the issues had been resolved.”
Stephen Kinnaird of Paul Hastings LLP, representing VirnetX, argued that it doesn’t matter if other issues are outstanding, but only whether or not the patent has been found to be valid.
“If the other issues concern a different patent or infringement, that’s just a difference of facts,” Kinnaird said. “Really, Fairchild is on all fours here.”
The patents at issue cover secure network communications over the internet, according to filings. A jury trial in 2012 found that Apple had infringed the patents in 2012. The Federal Circuit upheld much of the infringement finding two years later and rejected Apple's argument that the patents were invalid.
PTAB invalidated VirnetX's patents in inter partes reviews, some requested by Apple and some by a hedge fund called Mangrove Partners Master Fund.
Although PTAB rejected Apple's petition challenging the patents for being time-barred because they weren't filed within a year of VirnetX's complaint, the board allowed the technology giant to join the fund's reviews after they were instituted.
Bill Lee of WilmerHale, representing Apple, argued that since litigation on issues of infringement and damages remains to be resolved, Fairchild does not apply in this case because there is no final decision.
Lee cited a statement by a senator during a congressional hearing that all appeals must be terminated before Fairchild applies.
Federal Circuit Judge Kimberly Moore challenged Lee’s evidence, saying that one remark by a senator does not necessarily constitute solid evidence.
“Would you agree that a single statement by a senator is entitled to less weight than a senate report?” Moore said.
“Yes,” Lee replied.
But Lee also added that a senator’s statement combined with other precedents that say all issues must be resolved, constitutes a consistent interpretation of that statute.
Judges Kimberly Moore, Sharon Prost and Jimmy Reyna sat on the panel.
The patents-in-suit are U.S. Patent Numbers 6,502,135 and 7,490,151.
VirnetX is represented by Stephen Kinnaird.
Apple is represented by William F. Lee.
The cases are VirnetX v. Apple Inc., case numbers 17-1591, 18-1197 and 17-1368, in the U.S. Court of Appeals for the Federal Circuit.
--Additional reporting by Tiffany Hu and Ryan Davis. Editing by Peter Rozovsky.
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