Apple Takes Another Bite with Motions to Stay, Vacate Federal Circuit’s Denial of Rehearing in VirnetX Case

By Eileen McDermott
August 9, 2019

Apple and VirnetX have been at war for nine years—and there’s no end in sight.

Apple - https://depositphotos.com/19011327/stock-photo-stages-of-eating-an-apple.htmlIn the latest stage of the nine-year VirnetX/ Apple patent saga, Apple has filed a Motion to Stay the Mandate and a Motion to Vacate in relation to the U.S. Court of Appeals for the Federal Circuit’s August 1 order denying Apple’s petition for rehearing and rehearing en banc. That petition related to the Federal Circuit’s previous Rule 36 judgment upholding a district court decision ordering Apple to pay VirnetX nearly $440 million.

Apple argues in its Motion to Stay the court’s mandate, which was set to issue Thursday, August 8, that the Federal Circuit should delay its mandate until it has considered Apple’s concurrently-filed Motion to Vacate the denial of rehearing. Apple is asking the court to allow it to file a second petition for rehearing and/ or supplemental brief or to stay the mandate until the Supreme Court has considered its petition for certiorari. Apple argues that the case “presents an extraordinary collision of judicial and PTO proceedings concerning the four patents-in-suit” and that the court’s August 1 decision finding claim 5 of patent number 7,921,211 (“the ’211 patent”) unpatentable must mean that claim 5 of patent number 7,418,504 (“the ’504 patent”) is also unpatentable because the two claims are “indistinguishable.” The Motion adds:

That conclusion means that all claims asserted against FaceTime are unpatentable, thus warranting vacatur of the infringement judgment for those patents and vacatur of the damages to be redetermined to reflect only units that contain the VPN On Demand feature.

Queuing Up to Petition the Supreme Court

The Motion goes on to state that the case implicates “substantial questions that merit Supreme Court review”, which further weighs in favor of delaying the mandate. These questions include:

  • “Whether damages testimony based on assertedly comparable licenses automatically satisfies (or is otherwise exempt from) the requirement in Garretson v. Clark, 111 U.S. 120 (1884), that “in every case” damages must be apportioned to the incremental value the patented invention adds to the accused products;
  • Whether prejudgment interest on damages awarded as a running royalty can be calculated as though the entire amount accrued on the date of first infringement, rather than when the accused sales actually occurred;
  • Whether [the Federal Circuit] applied the wrong legal standard when assessing anticipation, either by conflating the legal question of claim meaning with the factual question of anticipation, or by ruling that a claim is anticipated only if each element is found within a single prior art reference and the elements are arranged in the same manner as recited in the asserted claim; and
  • Whether [the Federal Circuit] may affirm an infringement and damages judgment where it has already held unpatentable asserted claims of the patents-in-suit or claims indistinguishable therefrom.”

Apple Claims a “Manifest Injustice”

In its Motion to Vacate, Apple takes issue with the fact that the Federal Circuit released its August 1 decision 30 minutes before denying the petition for rehearing on the same day and claims that refusal to vacate the decision would represent a “manifest injustice”. Because the August 1 decision found unpatentable certain claims of the VirnetX patents that the district court found Apple had infringed, “at the very least this requires that the underlying infringement judgment be vacated and the case remanded for the district court to remove those portions adjudging Apple of infringing the ‘211 patent and claims 1, 2, and 27 of the ‘504 patent,” said the Motion.

For its part, the internet security and software technology company VirnetX viewed the Federal Circuit’s August 1 decision and denial of rehearing as a win in a protracted and expensive battle. In a press release, the company noted that the judgment issued on August 1 included an instruction to the Patent Trial and Appeal Board to terminate the pending reexamination proceedings relating to claims 1–35 of the ’504 patent and claims 36–59 of the ’211 patent. VirnetX said it was “extremely pleased with the Federal Court’s decisions,” and that it believes “that Apple clearly and willfully infringed the claims upheld by the Federal Court.”

A Bloomberg report last week indicated that recent favorable decisions from the Federal Circuit for VirnetX have “led investors to triple the company’s stock price this year.”

For more on this case, see IPWatchdog’s past coverage:

March 21, 2019:

Apple is Afraid of Inventors, Not Patent Trolls

February 5, 2019:

Federal Circuit Rule 36 Judgment in VirnetX v. Cisco and Apple: A Look at the Oral Arguments

January 6, 2019:

Federal Circuit Affirms Apple IPR Victory over VirnetX Patent

October 2, 2018:

Apple to pay VirnetX $93.4 million in costs and interest for patent infringement

April 12, 2018:

VirnetX Awarded $502.6 Million in Fourth Jury Trial against Apple

November 25, 2017:

Three rounds of IPR petitions invalidates VirnetX patent after Apple gets around statute of limitations

October 21, 2017:

VirnetX wins nearly $440 million verdict against Apple, including willful infringement damages

June 25, 2017:

The PTAB Killing Fields: VirnetX patents worth more than $1 billion in district court lost at PTAB

 

Image Source: Deposit Photos
Image ID: 19011327
Copyright: elly_l 

 

The Author

Eileen McDermott

Eileen McDermott is the Editor-in-Chief of IPWatchdog.com. Eileen is a veteran IP and legal journalist, and no stranger to the intellectual property world, having held editorial and managerial positions at several publications and industry organizations. She has acted as editorial consultant for the International Trademark Association (INTA), chiefly overseeing the editorial process for the Association’s twice-monthly newsletter, the INTA Bulletin. Eileen has also served as a freelance editor for the World Intellectual Property Organization (WIPO); as senior consulting editor for the Intellectual Property Owners Association (IPO) from 2015 to 2017; as Managing Editor and Editor-in-Chief at INTA from 2013 to 2016; and was Americas Editor for Managing Intellectual Property magazine from 2007 to 2013.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 3 Comments comments. Join the discussion.

  1. Pro Say August 9, 2019 1:37 pm

    The only manifest injustice present here is the manner in which Apple has conducted itself over all these many years in order to avoid doing the good, right, and moral thing by licensing the inventions of VirnetX.

    I have never and will never buy or own an Apple product.

  2. Steve B. August 10, 2019 5:22 am

    Apple’s Motion was filed at the 11th hour (you failed to mention that) and then complained that the CAFC basically rushed out their decision within 30 minutes. Come on, pay attention!

  3. Dan August 10, 2019 8:21 am

    Apple is the most immoral and disrespectful company in America. I will never buy anything from this greedy company that is a cancer on democracy, innovation and honest business practices.

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