The Federal Circuit has affirmed a Patent Trial and Appeal Board (PTAB) finding that two patents held by VirnetX Inc. are unpatentable. A 2020 verdict from an Eastern District of Texas jury had awarded VirnetX $502M for infringement of those patents by Apple, but, per the appeals court, “Now that we have affirmed the Board’s finding of unpatentability, VirnetX has lost its cause of action, and its dispute with Apple is moot”.

The Federal Circuit has hit the ground running in the early weeks of 2022, overturning two sizable damages verdicts on February 4: the California Institute of Technology’s (Caltech’s) $1.1B award against Apple and Broadcom and Quarterhill Inc. subsidiary Wi-LAN Inc.’s (WiLAN’s) $85.2M award against Apple. Now, recent activity suggests that at least the latter ruling could potentially have a ripple effect on other large damages awards currently on appeal. The ensuing weeks have seen the defendant-appellants in those cases cite the WiLAN opinion, which faulted a district court for allowing a flawed methodology that was “untethered to the facts of this case”, as relevant authority justifying similar reversals.

Eastern District of Texas Judge Robert W. Schroeder III has docketed an unredacted order denying Apple’s posttrial motions challenging the verdict from a jury awarding VirnetX Inc. in excess of $500M this past October based on a $0.84 per infringing unit royalty rate. The court refused to set aside the verdict or order a new trial, on damages or otherwise, endorsing the jury’s figures and imposing an ongoing royalty at the same rate. Judge Schroeder bookended his order with quotations concerning the seemingly never-ending case of “Jarndyce and Jarndyce” from Charles Dickens’s classic novel Bleak House, which sprawls (in most published forms) over 1,000 pages.

An Eastern District of Texas jury has issued a new verdict on damages in a retrial between VirnetX Inc. and Apple, just under a year after the Federal Circuit vacated a prior $502.6M damages award in that case and vacated part of the underlying finding of infringement. On October 30, the jury set a royalty rate of $0.84 per infringing device, which when multiplied by the total number of products resulted in a new damages award of $502.8M. The trial was among the first held before a jury in a patent case since the start of the COVID-19 pandemic, and it went forward after a debate over whether the trial could be held safely despite public health concerns.

In January 2020, the Federal Circuit sided with VirnetX Inc. in an appeal from a decision by the Patent Trial and Appeal Board (PTAB) in an inter partes reexamination triggered by Cisco. As VirnetX requested, the court vacated the decision and remanded the case back to the Board under its Arthrex decision: “Although this appeal arises out of an inter partes reexamination and not an inter partes review [IPR] as was at issue in Arthrex, we see no material difference in the relevant analysis. We therefore grant VirnetX’s motion”. Late last week, the same three judges denied a request for panel rehearing by Cisco and the Director of the USPTO (as intervenor), issuing an additional order “for the purpose of more fully explaining our rationale for rejecting” the argument that “administrative patent judges (‘APJs’) should be deemed constitutionally appointed officers at least when it comes to their duties reviewing appeals of inter partes reexaminations”.

The Federal Circuit has partly overturned an April 2018 infringement verdict for VirnetX Inc. in a suit against Apple, vacating a $600M judgment for the NPE (2019-1050). In a November 22 opinion, the appeals court declined to revisit a lower court ruling on issue preclusion with respect to invalidity but countermanded the jury’s finding that Apple’s FaceTime feature infringed two of the asserted patents. That reversal stemmed from the district court’s failure to properly construe a key claim term, with the Federal Circuit concluding that no reasonable jury could have found infringement through FaceTime under the correct construction.

The Federal Circuit has largely upheld an invalidity ruling for Cisco against a patent asserted by VirnetX, Inc. throughout its long-running litigation campaign. On June 28, the court reversed the invalidation of three claims cancelled in a Cisco inter partes reexamination, ruling that the Patent Trial and Appeal Board (PTAB) had erred by not considering certain arguments and by not making certain factual findings. It therefore remanded the case for further consideration of those claims (2018-1751), after affirming the PTAB’s invalidation of 33 other claims from the same patent, finding no reversible error in that portion of the Board’s analysis. The affected patent has been asserted in multiple VirnetX cases that have gone to trial, including one that led to a 2013 noninfringement verdict as to Cisco and several verdicts involving Apple, some of which have been overturned amidst an ongoing appellate battle between Apple and the NPE.

The Federal Circuit has declined to overturn a pair of final decisions by the Patent Trial and Appeal Board (PTAB) that cancelled claims from a VirnetX Inc. patent in an Apple inter partes review (IPR), holding that the NPE’s appeal was barred by issue preclusion. VirnetX had challenged the Board’s June 2017 decisions that certain claims from the challenged patent were invalid as obvious in light of a single prior art reference. However, in a December 10 opinion, the Federal Circuit held that VirnetX was collaterally estopped from disputing whether that reference was prior art, since in March 2017 the court had summarily affirmed multiple PTAB decisions that the same reference qualified as a printed publication in several other Apple IPRs against related patents (2017-2490, 2017-2494). Issue preclusion was applicable here in the Rule 36 context, the court ruled, because those decisions necessarily turned on a single issue: whether the aforementioned reference counted as prior art for the challenged patent family. The Federal Circuit also declined to allow VirnetX to proceed based on an alternative, constitutional argument, holding that it had failed to properly preserve the issue.

A Texas judge has upheld a pair of infringement verdicts issued in April for VirnetX Inc. against Apple, in which a jury found that the company had infringed claims from four patents through certain versions of the FaceTime and VPN on Demand features offered on iOS and macOS devices (6:12-cv-00855). In an order issued on August 30, District Judge Robert Schroeder III denied Apple’s motion judgment as a matter of law or for a new trial as to both verdicts, the first of which included a damages award of $502.6M and the second of which included a finding of willfulness. However, Judge Schroeder also declined to award VirnetX enhanced damages and denied the NPE’s request for an injunction. Meanwhile, each of the claims Apple was found to infringe was cancelled by the Patent Trial and Appeal Board (PTAB) before the trial in the -855 case, in inter partes reviews (IPRs) filed by Apple and other parties, and appeals of those decisions remain active before the Federal Circuit.

Throughout May 2018, the Patent Trial and Appeal Board (PTAB) saw activity in multiple long-running campaigns, including challenges brought against patents and plaintiffs with colorful and tangled litigation histories. The Board saw petitions for AIA review brought in May against Publishing Technologies LLC, an NPE controlled by patent attorney and frequent litigant Bradley D. Liddle; in the mobile devices campaign waged by AGIS Software Development LLC; and in the networking campaign brought by XR Communications, LLC. Also in May, the Board instituted trial for inter partes reviews (IPRs) against Iridescent Networks, Inc. and Oyster Optics, LLC. Final decisions issued in May include three against prolific plaintiff Realtime Data LLC, which saw claims cancelled from one of its data compression patents while another two survived unscathed, as well as final decisions cancelling claims from patents held by General Patent Corporation and VirnetX Holding Corporation.