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.

The COVID-19 pandemic has forced courts to rethink many aspects of the patent litigation process. While a number of district judges have moved hearings and other procedures online, the nation’s top patent venues effectively suspended jury trials through most of the summer—until District Judge Rodney Gilstrap of the Eastern District of Texas resumed patent trials in August after local infection rates began to fall. However, as the pandemic moves further into its second wave, Judge Gilstrap has now taken the notable step of halting all jury trials before him after a coronavirus outbreak during a trial under another judge in the Eastern District. Judge Gilstrap stated that he was doing so “reluctantly” but asserted that he had no alternative—arguing that the face-to-face aspect of in-person trials is essential for due process.

At the end of October, another Texas jury returned a $500M-plus verdict in favor of VirnetX Inc. against Apple. While 2020 has not been all roses for patent plaintiffs—recall that a few weeks earlier, Roku won a noninfringement verdict in litigation filed by inventor-controlled NPE MV3 Partners LLC in District Judge Alan D. Albright’s first patent jury trial since he took the bench—the most recent VirnetX verdict does join a string of high-dollar awards in patent infringement cases this year.

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.

District Judge Alan D. Albright has moved forward with his recently announced plan to resume jury trials in the Waco Division of the Western District of Texas despite the ongoing COVID-19 pandemic. On October 1, he presided over jury selection for what will be his first-ever patent jury trial, in litigation filed by inventor-controlled MV3 Partners LLC against Roku (6:18-cv-00308). While the decision to hold this trial is significant on its own, the leadup to jury selection in this case was not without its own intrigue. Shortly before the pretrial conference, Judge Albright ruled on a series of pending motions in limine, barring any characterization of the plaintiff as an NPE as well as any discussions of alleged forum shopping, among other topics, during voir dire and opening arguments. The ruling comes as the Federal Circuit, also last week, declined to rehear a recent decision that faulted Judge Albright for denying a convenience transfer in another campaign, amidst a broader debate over whether his treatment of such motions has unduly encouraged plaintiffs to pack the Waco Division with patent cases.

The nation’s top patent venues have adapted to the COVID-19 pandemic in markedly different ways, diverging most dramatically with respect to jury trials. While the Eastern District of Texas recently held the nation’s first patent jury trial since the start of the pandemic under District Judge Rodney Gilstrap, the Northern and Central Districts of California have issued orders suspending all such trials. However, until recently, both the Western District of Texas and the District of Delaware—the first- and second-most popular venues for NPE litigation, respectively—took a middle ground by giving presiding judges the discretion over whether to hold jury trials, effectively on a case-by-case basis. Now, District Judge Alan D. Albright has issued an order stating that the Western District’s Waco Division is ready to move forward with jury trials in patent cases, citing declining infection rates within that division and measures designed “to ensure trials can be conducted safely”.

The COVID-19 pandemic has forced courts and litigants alike to rethink some of the core mechanics of patent cases—perhaps most notably, triggering disputes over the timing and format of jury trials. As recently reported by RPX, this has led the nation’s top patent venues to diverge in their approach to such trials. In particular, District Judge Rodney Gilstrap of the Eastern District of Texas has bucked the trend and pushed forward with the nation’s first patent jury trial since the start of the pandemic, which ended on August 11 in a $506.2M infringement verdict against Apple in litigation brought by several subsidiaries of PanOptis Holdings, LLC. However, another judge in the same district has now signaled a more conservative approach: the day before that verdict, District Judge Robert W. Schroeder III continued a planned retrial in litigation between VirnetX Inc. and Apple at the defendant’s request. By so ruling, Judge Schroeder has aligned himself with courts in other popular venues that have also opted not to proceed with jury trials—including some that also leave such decisions up to the presiding judge and others that have halted trials district-wide.

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”.