• Aug 1 2019
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  • Category: CAFC Updates

After VirnetX sued Apple in district court alleging infringement of U.S. Patent Nos. 7,418,504 and 7,921,211 (both relating to systems and methods for establishing a secure communication link between a first computer and a second computer over a computer network, such as the Internet), Apple requested inter partes reexamination of the patents. Cisco also filed a request for inter partes reexamination with the PTO. The district court action proceeded to trial and a jury found the asserted claims infringed and not invalid. Apple appealed that decision and in that previous appeal the CAFC affirmed the jury’s finding of no invalidity for all four patents, but reversed the district court’s construction of the “secure communication link” claim term, vacated the related infringement finding and related damages award, and remanded for further proceedings. Meanwhile, in the parallel PTO reexamination proceedings, the Examiner found all claims of the patents unpatentable. VirnetX petitioned the PTO to terminate the Apple reexams based on the estoppel provision of § 317(b), but the Patent Office concluded that Apple was not barred from maintaining its reexams by the estoppel provision of the pre-America Invents Act (“AIA”) version of 35 U.S.C. § 317(b). The Board affirmed the determinations in both reexam proceedings that claims of the patents are unpatentable as anticipated or obvious over the prior art of record. VirnetX appeals, arguing Apple was estopped from maintaining its reexams under the pre-AIA version of 35 U.S.C. § 317(b); and challenging the merits of the Board’s conclusions that the patents are invalid.  With respect to estoppel, the CAFC finds that § 317(b) estoppel applies to the Apple reexams, noting, inter alia, that § 317(b) applies despite the fact that issues unrelated to invalidity were remanded, and that it is doubtful Congress created an estoppel provision that would allow a PTO proceeding to press forward even after all appellate deadlines have elapsed merely because there is a potential that the Supreme Court may one day reconsider the invalidity issue—in many cases, years later—while examining the rest of the case. With respect to invalidity, VirnetX argues that the Board decisions incorrectly construe certain claims, shift the burden to the patent owner to prove patentability, and lack substantial evidence, however the CAFC finds these arguments unpersuasive. The CAFC 1) vacates the Board’s decisions in the Apple reexams and remands with instructions to terminate; 2) affirms the Board’s decisions in the Apple reexams that certain claims of the patents are unpatentable; and affirms the Board’s decision in the Cisco reexam that certain claims of the ’211 patent are unpatentable. Judge Reynaconcurs-in-part but does not agree that reexamination is precluded and so dissents-in-part.

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