Voip-Pal.com, Inc. v. Twitter, Inc. CAFC
- Filed: 07/26/2018
- Closed: 03/25/2019
- Latest Docket Entry: 04/21/2020
May 1, 2020
The filing of new litigation in the sole campaign of VoIP-Pal.com Inc. within competing venues continued last week, the publicly traded NPE adding suits against AT&T (6:20-cv-00325) and Verizon (Cellco Partnership d/b/a Verizon Wireless) (6:20-cv-00327) in the Western District of Texas, followed several days later by a declaratory judgment action filed in the Northern District of California by AT&T (5:20-cv-02995). The motivation of declaratory judgment plaintiffs Apple, Twitter, and now AT&T appears to be to put the dispute, over the latest patent in a family with multiple members already invalidated under Alice, back in front of the judge that issued those orders, District Judge Lucy H. Koh. Its earlier 2020 cases against Alphabet (Google), Amazon, Apple, and Facebook (WhatsApp) already assigned to District Judge Alan D. Albright, VoIP-Pal appears interested in giving West Texas a try.
In Response to VoIP-Pal’s Turn to Texas, Prior Defendants Seek to Subject Newly Asserted Patent to California HeadwindsApril 12, 2020
March 2019 saw District Judge Lucy H. Koh of the Northern District of California invalidate under Alice the asserted claims of two patents asserted by publicly traded NPE VoIP-Pal.com Inc. in cases against Apple, AT&T, Twitter, and Verizon. VoIP-Pal rejected a takeover bid the next month, and then, last November, Judge Koh invalidated the asserted claims of four more patents from the same family, also under Alice. That order ended a suit against Amazon, as well as a second case against Apple. The decision has been appealed to the Federal Circuit, which just last month affirmed Judge Koh’s first Alice order. Undeterred, the NPE has filed four new suits, asserting the most recent patent to issue in the same family in a telling venue—the Western District of Texas—against both new and previous defendants; however, two of those previous defendants have taken steps that may put litigation over the new patent back in front of Judge Koh.
On April 8, prior defendant Twitter (5:20-cv-02397) sued VoIP-Pal, asking the Northern District of California for a declaratory judgment of noninfringement of the newly asserted patent (10,218,606). Its complaint notes last week’s affirmative suits filed against returning defendants Amazon (6:20-cv-00272) and Apple (6:20-cv-00275) and new defendants Alphabet (Google) (6:20-cv-00269) and Facebook (WhatsApp) (6:20-cv-00267) in that new venue—the Western District of Texas. Twitter also cites VoIP-Pal’s April 8 press release, announcing that, after a recent Federal Circuit decision affirming Alice invalidations in VoIP-Pal’s earlier cases, “VoIP-Pal is considering taking further action and ‘planning their next moves’”. “Our legal team is assessing our next moves regarding this Alice decision”, indicates VoIP-Pal’s CEO in that release, “and we expect to announce our intentions soon. I can tell you; we are not finished”.
Late last week, Apple also filed a declaratory judgment action against VoIP-Pal in the Northern District of California (5:20-cv-02460), this one seeking both a declaratory judgment of noninfringement of the ‘606 patent and a declaratory judgment of invalidity of the patent, in particular under Alice.
All of this district court activity has been arguably eclipsed by the twists and turns attending various inter partes review (IPR) proceedings concerning the two VoIP-Pal patents (8,542,815; 9,179,005) that Judge Koh invalidated last March. Apple challenged each patent in a set of two petitions filed back in June 2016. Dr. Thomas E. Sawyer, VoIP-Pal’s former CEO and chairman, sent a series of letters to the Patent Trial and Appeal Board (PTAB) (also copying various other government officials), letters that the Board, after much motion practice and a short trip up to the Federal Circuit, agreed were improper ex parte communications. Apple was permitted, as a “sanction” for VoIP-Pal’s prior conduct, to request a rehearing of a replacement panel’s final written decisions sustaining all of the claims that Apple had challenged.
Those final written decisions, as well as the procedural route to their issuance, are the subject of a separate appeal to the Federal Circuit, in which USPTO Director Andrew Iancu has intervened. In its opening papers, among other things, Apple has argued that the Board violated the Administrative Procedure Act by “departing from the sanctions authorized in advance by regulation” and that through its failure to order a new “constitutionally correct proceeding”, the Board violated the Due Process Clause of the US Constitution.
Apple contends that VoIP-Pal “embarked on a campaign of intimidation designed to influence the outcome of the IPR proceedings” in response to which the right to request a rehearing before a new panel—a right that Apple already enjoyed—was an inadequate sanction not permitted under operative regulations. Apple seeks judgment in its favor as the only authorized sanction. In its responsive brief, VoIP-Pal, and in its intervenor brief, Director Iancu, both disagree, arguing, among other things, that the Board has the discretion to impose appropriate sanctions in individual proceedings. A date for oral argument has yet to be set.
The VoIP-Pal patent now in litigation—the ‘606 patent—issued in February 2019 as the most recent member of the family that includes the ‘815 and ‘005 patents, as well as the four patents that Judge Koh subsequently also invalidated under Alice (9,537,762; 9,813,330; 9,826,002; 9,948,549). The family shares an estimated priority date in November 2006, with prosecution of additional related applications continuing before the USPTO.
The original development for VoIP-Pal’s patents was conducted by Digifonica, a Canadian VoIP services provider that VoIP-Pal acquired in 2013. Emil Malak, VoIP-Pal’s current CEO (and sole employee), was one of Digifonica’s cofounders. VoIP-Pal itself was formed in Nevada in December 1997. Its current chairman is Dr. Colin Tucker, formerly an executive at telecommunications companies Hutchison 3G and Orange plc. In 2018, in the wake of the issuance of two of its patents, Malak commented that “[t]he meter is still running on our patents with the possibility of increased damages owed to the Company as a result of willful infringement”. Any increase would not have applied to a conservative assessment of alleged damages, as VoIP-Pal has not been shy about identifying figures ranging into the billions, at least in relation to the now dismissed cases against Apple, AT&T, Twitter, and Verizon. In a press release roughly one year ago, after Judge Koh’s first Alice order, Malak stated, “We are currently focused on our legal appeal to the recent Alice 101 decision as well as finalizing our strategy to move forward in Europe . . . In the meantime we are working diligently to add to our patent portfolio with patent continuation applications. Patience is a virtue.”
A much more detailed background concerning VoIP-Pal, this campaign, and its lofty damages figures, as well as the unique twists and turns of its time before the PTAB, can be reviewed at “Apple Seeks Rehearing from a Third PTAB Panel After Partial Grant of Sanctions over Improper Ex Parte Communications” (January 2019).
Judge Koh entered judgment in response to a consolidated set of Rule 12 motions brought by the first set of defendants—Apple, AT&T, Twitter, and Verizon—and a consolidated set of Rule 12 motions brought by the second set—Amazon and Apple. The new cases against Amazon, Apple, Facebook/WhatsApp, and Google have been assigned in the Western District of Texas to District Judge Alan D. Albright. Judge Albright has expressed a heavy skepticism of the kind of early motions that prompted Judge Koh’s Alice opinions.
In a January 2020 order denying such a motion, Judge Albright summarized his approach as follows: “. . . because an issued patent enjoys the presumption of validity which requires clear and convincing evidence to prove otherwise, because claim construction and fact discovery can completely change the Court’s § 101 analysis, and because the Court gains a greater understanding of the patents and the technology by delaying the resolution of eligibility, the Court believes that delaying the determination of a patents § 101 eligibility is the wisest course of action”. Further details about that decision can be reviewed at “Recent Alice Order in Delaware Invites Comparison with the Western District of Texas” (April 2020).
In its new complaints now before Judge Albright, VoIP-Pal has targeted the defendants over communication systems; for Amazon, over its “calling and messaging system”—provided through the Amazon Alexa virtual assistant—and Amazon Echo devices, Amazon Fire devices with Alexa support, and Google Android and Apple iOS mobile devices with the Alexa app; for Apple, over Facetime and its messaging platform; for Google, over the Duo and Hangouts messaging platforms, Google Home system, and related Google Home and Google Nest-branded devices; and for Facebook, over the WhatsApp messaging service. Twitter seeks a declaratory judgment that communications within its social media platform do not infringe the ‘606 patent.
In its 10-Q for the quarter ended December 31, 2019, VOIP-Pal disclosed cash of $390K. During that same quarter, the company used $570K of cash in its operations. At its recent price of $0.0125 per share, VOIP-Pal’s market value is approximately $25M. 4/2, Facebook (WhatsApp) 4/3, Google, 4/6 Amazon, 4/7, VoIP-Pal v. Apple, Western District of Texas; 4/8, Twitter, 4/10, Apple v. VoIP-Pal, Northern District of California.
April 18, 2019
Publicly traded NPE VoIP-Pal.com Inc. announced on April 16 that its board of directors had rejected a formal offer led by Gil Amelio and “his associates” to take over management of the company. Part of that offer, according to VoIP-Pal, “provided options to purchase only the stock owned by VoIP-Pal’s CEO, Emil Malak”. While the company reportedly rejected the bid, it says it is “actively pursuing the sale of all of Voip-Pal’s shares, on behalf of the more than 4500 shareholders, not just the shares owned by Mr. Malak". Monday’s announcement follows an Alice ruling last month that ended VoIP-Pal's cases against AT&T, Twitter, and Verizon, and one of the NPE's cases against Apple.
March 31, 2019
The sole litigation campaign of VoIP-Pal.com, Inc. has hit another snag. District Judge Lucy H. Koh has ended the Northern District of California cases that the publicly traded NPE filed against Apple, AT&T, Twitter, and Verizon with a March 25, 2019 order invalidating the asserted claims of both patents-in-suit under Alice. Judge Koh characterized the patents as generally related to “the process of routing calls (either voice or video) between a caller and a callee, in which calls are classified as either public network calls or private network calls”, adopting the parties’ division of the asserted claims into “multi-network claims” and “single network claims” before choosing a representative claim for each category. Her order culminates in the invalidation of both the “multi-network” and “single network” claims as patent-ineligibly drawn to the abstract idea of “routing a call based on characteristics of the caller and callee”.
Apple Seeks Rehearing from a Third PTAB Panel After Partial Grant of Sanctions over Improper Ex Parte CommunicationsJanuary 10, 2019
Apple has filed—with a third panel assigned to the proceeding—a request for rehearing of its inter partes review (IPR) of two patents held and asserted by publicly traded VoIP-Pal.com, Inc. The original panel was replaced midstream after Dr. Thomas E. Sawyer, VoIP-Pal’s former CEO and chairman, sent the first of a series of letters to the Patent Trial and Appeal Board (PTAB) (also copying various other government officials), letters that the Board now agrees were improper ex parte communications. The replacement panel issued final written decisions sustaining all of the claims that Apple had challenged. Apple then learned about all six, improperly sent letters and asked for permission to file a motion seeking sanctions against VoIP-Pal. That permission was granted. Apple sought entry of judgment in its favor or, in the alternative, vacatur of those final written decisions. Just before Christmas, the third panel—comprising the Board’s Acting Chief Administrative Patent Judge (APJ), its Acting Deputy Chief APJ, and its Vice Chief APJ—agreed that VoIP-Pal’s communications violated Board rules but stopped short in its sanctions, leaving Apple to file with that third panel its current request for rehearing of the replacement panel’s final written decisions.
June 16, 2018
Publicly traded VoIP-Pal.com, Inc. has followed its recently filed, second case against Apple with a first case filed against Amazon (2:18-cv-01076), both in the District of Nevada. Each complaint asserts the same four patents, all issued within the last year or so and all generally related to routing messages between private and public networks based on stored caller profiles. At issue in the Amazon complaint are Alexa’s calling and messaging features, together with various other devices either provided by Amazon (e.g., Amazon Echo, Amazon Tap) or equipped with the Alexa app (e.g., certain Android mobile phones, Apple iOS mobile phones). This recent activity seems to have been triggered by final written decisions in two inter partes reviews (IPRs) of patents previously asserted against Apple (and others), sustaining all of the claims challenged. However, those proceedings have yet to conclude, with Apple seeking to reverse those judgments as a sanction against VoIP-Pal for allegedly improper communications with the Patent Trial and Appeal Board (PTAB).
VoIP-Pal Sues Apple with Newer Patents as the PTAB Considers Sanctions Under “Extraordinary Circumstances”May 26, 2018
Publicly traded VoIP-Pal.com, Inc. has filed a second District of Nevada case against Apple (2:18-cv-00953), asserting four, more recent patents in the same family as those at issue in the NPE’s previous, February 2016 suit. The patents generally relate to routing messages between private and public networks based on stored caller profiles, with Apple once more accused of infringement through its devices’ iMessage and WiFi calling features. The new complaint follows by six months final written decisions in two inter partes reviews (IPRs) of the previously asserted patents, sustaining all of the claims challenged by Apple. In both of those proceedings, Apple has since asked the Patent Trial and Appeal Board (PTAB) to enter judgment against VoIP-Pal (or, alternatively, vacate those decisions and restart “a constitutionally correct process going forward”) in light of allegedly improper ex parte communications with the Board (also copied to various other government officials), Apple beginning its brief by noting that “[e]xtraordinary circumstances call for extraordinary measures”.
December 9, 2017
The Patent Trial and Appeal Board (PTAB) saw the number of petitions for AIA review in November hold fairly steady at 111 (compared to October’s 128) as the US Supreme Court continued its review of the constitutionality of inter partes review (IPR) in Oil States v. Greene’s Energy Services, for which oral arguments were held on November 27. Among the NPEs targeted by petitions brought in November were publicly traded Quarterhill Inc. and Xperi Corporation, prolific litigant Brian Yates, and several privately held NPEs waging networking campaigns, including Alacritech, Inc.; Iridescent Networks, Inc.; Monument Patent Holdings, LLC; MyMail Ltd.; and Oyster Optics LLC. The PTAB also instituted trial in November for other IPRs against Alacritech and Quarterhill and for an IPR against Plectrum LLC. Final decisions issued by the Board in November include one in the automotive campaign waged by Paice LLC and in IPRs against InfoGation Corporation and VoIP-Pal.com, Inc., both of which saw their patents survive review.
June 1, 2017
The Patent Trial and Appeal Board (PTAB) saw 54 petitions for AIA review brought against NPEs in May, up from 20 such petitions filed in April. May PTAB filings included a resurgence in petitions against publicly traded NPEs, including Acacia Research Corporation; Pendrell Corporation; Quest Patent Research Corporation; VoIP-Pal.com, Inc.; Xperi Corporation (f/k/a Tessera Holding Corporation); and Wi-LAN Inc. (WiLAN) (which was renamed to Quarterhill Inc. on June 1). A variety of private litigants were also hit by PTAB petitions in May, including Blackbird Tech LLC, Global Equity Management (SA) Pty. Ltd., General Patent Corporation, Realtime Data LLC, and Uniloc Corporation Pty. Limited.
October 10, 2016
Publicly traded NPE VoIP-Pal.com, Inc. has added Twitter (2:16-cv-02338) to its sole litigation campaign, alleging that the company’s direct message, reply, and re-tweet features infringe two related patents (8,542,815; 9,179,005) generally relevant to routing messages between private and public networks based on stored caller profiles. VoIP-Pal began its campaign in February, accusing Apple (2:16-cv-00260) of infringing the same two patents through its messaging features, including iMessage, and AT&T and Verizon (2:16-cv-00271) through their respective landline and wireless VoIP and messaging services. The NPE has not provided a rationale for joining the two carriers in a single action.
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