Federal Circuit dismisses VirnetX’s appeal in win for Apple
The US Court of Appeals for the Federal Circuit yesterday sided with Apple in a patent appeal brought by licensing company VirnetX.
In 2017, the Patent Trial and Appeal Board (PTAB) backed Apple in an inter partes review (IPR) it had instigated against VirnetX’s patent number 8,504,696, finding that multiple claims of the patent were unpatentable as obvious.
The patent, which claims a priority date of 1998, covers a system and method of connecting network devices for secure communications, using secure domain names.
VirnetX claimed that the prior art that Apple had relied on—a memo called Security Architecture for the Internet Protocol, published in 1998—was not “a threshold matter” and did not count as a printed publication, as defined by statute.
However, the PTAB found that the protocol memo did constitute a printed publication, and VirnetX appealed against the decision.
Although VirnetX again raised the printed publication argument on appeal, the Federal Circuit noted that, in March, it had already confirmed that the protocol counts as a printed publication in another patent dispute between VirnetX and Apple.
As a result, VirnetX is collaterally estopped by this judgment from relitigating this issue, the court said, as the issue of printed publication had been “necessary or essential” to the earlier decision.
The licensing company then claimed that, even if it were collaterally estopped, there is a “separate issue” of whether IPRs apply retroactively to patents which were filed before the America Invents Act.
But yesterday, the Federal Circuit said that VirnetX did not provide “any arguments specifically preserving the retroactivity issue”, and the licensing company had even conceded that it did not “specifically brief” the matter.
VirnetX’s insistence on the issue is “likely less than sincere”, the court determined.
As the licensing company is collaterally estopped from raising the printed publication issue, and it failed to preserve the issue of whether IPRs apply retroactively, the appeal must be dismissed, the Federal Circuit concluded.
The court awarded costs of the proceedings to Apple.
Apple and VirnetX are not strangers in the same court room.
In 2012, VirnetX accused Apple of infringing patents related to video communications technology at the US District Court for the Eastern District of Texas. The licensing company had filed a similar complaint, targeting older versions of Apple’s technology, in 2010.
Multiple trials and re-trials took place, resulting in two sets of proceedings between the parties.
In 2016, the jury found that Apple had infringed two patents and awarded $302.4 million to VirnetX, although the court increased the amount payable to $439.7 million in 2017 for wilful infringement, attorneys’ fees, and interest.
In the second trial, earlier this year, the jury awarded $502.6 million to VirnetX, after finding that Apple infringed four patents. Apple’s request for a new trial was later denied.
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