VirnetX Accuses Apple of Seeking ‘Indefinite Delay’ with Latest Motions in Nine-Year Litigation

By Eileen McDermott
August 20, 2019

“[Apple] seeks indefinite delay to give PTO validity determinations absolute priority over Article III court validity determinations—no matter how far off those PTO decisions and no matter how long the odds Apple will prevail in those decisions.” – VirnetX Brief in Opposition

delay - https://depositphotos.com/129543946/stock-photo-yellow-road-signs.htmlOn August 1, the U.S. Court of Appeals for the Federal Circuit affirmed-in-part, vacated-in-part, and remanded a decision of the Patent Trial and Appeal Board (PTAB) in the case between VirnetX and Apple/ Cisco, and separately denied Apple’s request for rehearing en banc in its appeal from the U.S.  District Court for the Eastern District of Texas ruling awarding VirnetX nearly $440 million. In response, Apple quickly filed motions to stay and vacate those decisions, and requested leave to petition for a second rehearing. Most recently, on August 15, VirnetX filed its reply to Apple’s motions, arguing that the tech giant is merely trying to delay the case in order to give priority to continuing PTAB hearings.

Apple’s Request Could Result in Many More Years of Delay

VirnetX’s brief in opposition called Apple’s implication that Article III courts should give priority to PTAB validity determinations a “false notion” that the Federal Circuit had already dismissed in a previous ruling. VirnetX further argued that such an approach could have far-reaching and negative implications for patent owners:

In the 18-1751 case, claim 5 will be the subject of further PTO proceedings involving a complex question of whether the prior art discloses authentication of DNS queries. And on remand in the 17-1368 case, the PTO will have to go back to the drawing board with respect to the patents infringed by VPN on Demand, including having to revisit claim construction. Those decisions will themselves be subject to appeal. If any claims are ultimately cancelled at the end of those proceedings—and there is no guarantee they will be—such a result may be years away. How that far-off, speculative possibility supports the extraordinary relief of leave to file a second en banc petition in this case, or an indefinite stay of this already decided case, is a mystery.

[citations omitted]

One of Apple’s key arguments in its motions to stay and vacate was 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.”

As a refresher, here are the patents at issue:

  • S. Patent No. 6502135, titled Agile Network Protocol for Secure Communications with Assured System Availability. It claims a method of transparently creating a VPN between a client computer and a target computer in a way that overcomes security issues in distributed systems which aren’t solved by traditional firewalls.
  • S. Patent No. 7418504, titled Agile Network Protocol for Secure Communications Using Secure Domain Names. It protects a system for providing a domain name service for establishing a secure communication link, the system configured for storing a plurality of domain names and corresponding network addresses, receiving queries for network addresses and indicating whether the domain name service system supports secure communication links.
  • S. Patent No. 7490151, titled Establishment of a Secure Communication Link Based on a Domain Name Service (DNS) Request. It claims a data processing device comprising memory storing a module for intercepting DNS requests sent by a client and determining whether those intercepted requests correspond to a secure server.
  • S. Patent No. 7921211, same title as the ‘504 patent. It protects a system for providing a domain name service configured and arranged to be connected to a communication network in a way that allows message payloads to be encrypted into tunneled agile routing protocol (TARP) packets which can only be unlocked using a session key.

But VirnetX argued in its brief that Apple had already raised that issue in its previous motions, at oral argument, and in a supplemental brief, and that the court was therefore fully aware of its position but found the arguments “unpersuasive”.

“Apple should not be permitted to further prolong this suit through a successive rehearing petition to relitigate a position this Court has already rejected,” said the VirnetX brief.

Eight Times Too Many

The VirnetX brief also noted that this is Apple’s eighth request to stay the proceedings on the basis that courts should give priority to PTAB validity determinations over Article III courts. “[Apple] seeks indefinite delay to give PTO validity determinations absolute priority over Article III court validity determinations—no matter how far off those PTO decisions and no matter how long the odds Apple will prevail in those decisions,” the brief said.

IPWatchdog has written about the VirnetX case for many years, including how the PTAB has acted as a veritable death squad for the company. As we noted in 2017 in reference to the Federal Circuit’s 2014 affirmation of an Eastern District of Texas jury’s findings that none of the asserted VirnetX patent claims were invalid and that many of the asserted claims of the ‘135 and ‘151 patents were infringed by Apple’s VPN On Demand product:

Obviously, the patent claims VirnetX has used to pursue infringers such as Apple and Microsoft are not the weak patents that opponents of the patent system claim are the scourge of the system. Well — not so fast! Just because an Article III federal district court confirms the validity of a patent doesn’t mean anything anymore. Indeed, federal courts have become subordinate to the PTAB, which is as ridiculous as it sounds but sadly true. A patent is not valid until an Article I executive tribunal says so, and absolutely no deference is paid to Article III judges of the United States federal courts.

From June 2013 through November 2016, VirnetX faced a barrage of 68 inter partes review (IPR) challenges at the PTAB. Apple is listed as a petitioner on 42 of those IPR petitions. Other parties filing petitions include Microsoft, RPX Corporation, Black Swamp IP, LLC, and The Mangrove Partners Master Fund, Ltd. Only one of those petitions resulted in a final written decision finding all claims patentable. 18 final written decisions found that all claims were unpatentable.

Apple Responds

On August 19, Apple filed a reply in support of its August 7 motions, in which it stated that VirnetX’s opposition brief focuses chiefly on procedural, rather than substantive, arguments. Apple also said that VirnetX’s contention that Apple’s latest rehearing request is based on arguments that have already been made is incorrect and that granting its requests is a matter of “basic due process” rather than indefinite delay, as VirnetX contends.

The Federal Circuit is expected to rule on these latest motions soon.

 

Image Source: Deposit Photos
Image ID: 129543946
Copyright: gustavofrazao 

 

 

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 5 Comments comments. Join the discussion.

  1. Josh Malone August 20, 2019 4:18 pm

    This is the most important dispute in patent law, and has significant implications for our entire judicial system. Simply put, unethical lawyers, special interests, and bureaucrats are working to destroy the Judicial Branch of government. VirnetX is one of many cases including my own where the the Executive Branch overruled the Judicial Branch. Most of the the 1,900 patents eliminated by the PTAB would survive a jury trial in a real court. Only a few of us get the chance to prove it. The PTAB is a blight and shame on our nation.

    Separation of Powers – GONE.
    Appointments Clause – GONE
    5th Amendment – GONE
    7th Amendment – GONE

  2. angry dude August 20, 2019 10:10 pm

    inventors better live longer than regular folks to see the justice

    disgusting

  3. Silicon Valley Death Squad August 21, 2019 8:22 am

    We all know how Google and other Silicon Valley companies killed off patent rights. Michelle Lee Googles patent lawyer was sworn in by Obama to become the head of the USPTO their she helped bring in the AIA Act and the PTAB and stacked the judges who have worked for FAANG to vote against any pro patent case, conflict of interest does not apply when you are worth billions and bought out the politicians on both side of the floor. 101needs to be fixed and from what leaks we are hearing, it seems Sen. Tillis is carving out a back door for Silicon Valley to continue their theft of patents in order to keep the profits for them selves. These never ending appeals that are set up to bleed the small patent holder from getting paid for their IPthat has been stollen and capitalized on is the greatest injustice of patent rights since its inception. Billionaires stealing from small inventors with no justice it’s disgusting. America has become a true Corporatocracy and is killing off what made it so great. It’s no coincidence Silicon Valley has shut the door on patent protection and seen their stock price skyrocket , only the elites can invent a patent and get protection in America. It’s game over for inventors and it’s time they look to Germany and China to build their product when patent protection still exists for small inventors. Greed will kill it self and America is showing the rest of the world how that’s done.

  4. Fanc Bilburgh August 21, 2019 9:56 am

    @Josh Malone

    Its time people forget about the United States and look to Europe and Asia to file for patent protection. The Silicon Valley Mafia runs the American Government, patent holders have no chance in getting paid for their patents which have been stolen and profited on. Its disgusting!! NO hope they will fix 101 all the votes have been bought and paid for long ago by the Silicon Valley Mafia thieves.

  5. anonymous August 21, 2019 10:58 am

    Keep in mind that Apple’s infringement was willful. The potential for enhanced damages is still not enough to keep Apple from infringing. Willful patent infringement is now just a routine part of Apple’s business model.

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