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22 September 2021PatentsMuireann Bolger

Next USPTO director should review IPR decisions in Apple dispute: VirnetX

Rehearings of inter partes review decisions should be stayed until the next permanent director of the US Patent and Trademark Office (USPTO) has been appointed, according to a request filed by tech company VirnetX.

On Monday, September 20, the company asked that the office’s next director reviews the PTAB’s invalidation of a pair of patents in its $576m dispute with Apple.

The move comes in the wake of the US Supreme Court’s decision in US v Arthrex, which handed power to the USPTO director to assess IPR decisions.

Challenged authority

In June, the US commissioner of patents, Drew Hirshfeld, announced that he would be making decisions concerning director review following the Arthrex ruling.

However, the lack of clarity around the position held by Hirshfel has attracted controversy.

In August, Hirshfeld rejected bids by  Google and Solas OLED to overturn the final decisions of the PTAB, the first Arthrex-based requests issued to the USPTO seeking a review of PTAB decisions since the Supreme Court’s rulings.

But according to Brent Babcock, chair of Loeb & Loeb’s PTAB Trials Practice Group in Los Angeles, speculation has mounted around the scope of his power to review and/or rehear IPR cases.

“His authority to do so has been challenged at the US Court of Appeals for the Federal Circuit and he is neither the presidentially appointed director, nor the acting director,” he explained.

Scott Hejny, a principal in the Dallas office of McKool Smith, echoed this concern, contending that “the situation has prompted confusion over his authority to consider requests for Director review post-Arthrex”, he said.

“It seems that the simplest solution would be to acknowledge Hirshfeld as acting director. But the question is whether that will be enough, even though the Supreme Court in Arthrex held that ‘the appropriate remedy is a remand to the acting director’, a statement that points to Commissioner Hirshfeld.

“At the end of the day, this continued uncertainty will not be put to rest until President Joe Biden pushes through a nominee for the director vacancy.”

Background

VirnetX Holding Corporation is an Internet security software and technology company with patented technology for secure communications including 4G LTE and 5G security.

In October 2020, a trial jury in a federal court in Texas found that Apple infringed two VirnetX patents related to secure networks used by the owners of iPhones and iPads.

VirnetX is now challenging a decision from July 2020, in which the PTAB found once again that the company’s patents, US numbers 6,502,135 and 7,490,151 were unpatentable.

“We strongly disagree with the PTAB's findings in the decisions issued today," said Kendall Larsen, VirnetX CEO and president in a statement released at the time. “We intend to consider all available options to rectify the PTAB's decisions.”

A year earlier, the US Court of Appeals for the Federal Circuit vacated and remanded the PTAB’s earlier decisions invalidating the patents, agreeing with VirnetX that the board abused its discretion in denying VirnetX the opportunity to file a motion for additional discovery; that many of the board’s positions regarding the prior art lacked substantial evidence; and that the board misconstrued the claims.

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More on this story

Patents
9 December 2020   Apple is fighting to overturn a $503 million damages award to VirnetX in a long-running patent dispute.
Patents
31 August 2018   Apple hit another roadblock in its litigation with licensing company VirnetX yesterday, when a federal judge denied the company a new trial in the patent dispute over FaceTime.