After Multiple Failures: Apple Finds its Way Around the One Year Statute of Limitations for IPR Filings

by Dennis Crouch

The Federal Circuit has ordered further briefing on VirnetX’s recently filed petition for writ of mandamus stemming from two pending inter partes review petitions filed by Mangrove Partners against the patentee.[1]  The case involves the statute-of-limitations that bars a third party petitioner from filing an inter partes review petition more than one year after that petitioner (or a privy) was “served with a complaint alleging infringement of the patent”[2]; the IPR joinder provision[3]; and, of course, the prohibition against appealing the Director’s decision to grant or deny a petition.

According to the VirnetX’s petition, prior to the filing of these inter partes review proceedings: “Apple previously filed (directly or through a proxy) seven inter partes review petitions against the same patents, in addition to having challenged their validity in two reexamination proceedings and (unsuccessfully) in district court litigation and on appeal before this [Appellate] Court.”  The Board previously dismissed Apple’s petitions as well as those of its proxy (RPX) as time barred by the statute of limitations since Apple had previously been served an infringement complaint.

These two latest IPRs were filed by the hedge fund Mangrove Partners who had apparently shorted VirnetX stock just prior to the filing and is also an investor in RPX.   Following the IPRs filed by Mangrove, Apple again filed its own set of IPR petitions[4] that were obviously time barred, but also simultaneously requested joinder with the Mangrove petitions.  This final posturing worked and the Board granted the Apple Petitions and the Joinder request – after reading Section 315(b)’s statement that the statute of limitations noted above “shall not apply to a request for joinder.”

35 U.S.C. §315(b) Patent Owner’s Action.—

An inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent. The time limitation set forth in the preceding sentence shall not apply to a request for joinder under subsection (c).

35 U.S.C. §315(c) Joinder.—

If the Director institutes an inter partes review, the Director, in his or her discretion, may join as a party to that inter partes review any person who properly files a petition under section 311 that the Director, after receiving a preliminary response under section 313 or the expiration of the time for filing such a response, determines warrants the institution of an inter partes review under section 314.

In the mandamus action, VirnetX argues that the Board misinterpreted the statute.  Rather, according to the petition, the statute-of-limitations applies to all petitions and may not be waived by the Director.  According to the argument, the exception for joinder is only relevant to indicate that joinder of properly instituted proceedings can be requested even beyond the one-year deadline.  “The timing exemption … mak[es] clear that the one-year time limitation shall not apply to a joinder request.”

[T]he Board treated the terms “petition” and “request for joinder” as interchangeable. But there is no basis for such a reading. Section 315(b), as well as the overall statute, carefully distinguishes between the terms “petition” and “request for joinder.” When Congress uses a particular statutory term, it does so advisedly, and an agency impermissibly departs from the statute when it disregards Congress’ intentional use of different statutory terms. . . . Section 315(b) imposes a mandatory one-year time bar on any “petition requesting the [inter partes] proceeding.” 35 U.S.C. § 315(b). It then exempts “a request for joinder” made under section 315(c)—and only such a request— from that timing prohibition. But section 315(b) does not extend that exemption to “a petition,” even though Congress clearly knew how to apply such an exemption to a petition, as demonstrated elsewhere in the statute. The Board’s interpretation of section 315(b) effectively re-writes the statute by expanding the statutory exemption for joinder requests from a mandatory time bar to petitions.

VirnetX explains the prejudice caused by the joinder:

The joinder has already prejudiced VirnetX in concrete ways. VirnetX now has to defend itself against new issues and evidence introduced by Apple—issues and evidence that were not presented by Mangrove in the original proceedings. VirnetX is also being systematically disadvantaged because it is limited to a single response of a constrained length, while Apple, Mangrove, and Black Swamp submitted three separate petitions each presenting unique issues. Thus, VirnetX has to prepare its Patent Owner’s Responses to invalidity issues raised in three separate petitions, yet the Board denied VirnetX’s request for extra pages in order to be able to fully address all these multiple arguments.

It will be interesting to See how Apple responds.  The court asked for responses from Apple, Mangrove, and Director Lee to be filed next week.

= = = = =

[1] IPR2015-01046 & IPR2015-01047 covering U.S. Patent No. 6,502,135 (“the ’135 patent”) and U.S. Patent No. 7,490,151 (“the ’151 patent”).

[2] 35 U.S.C. § 315(b).

[3] 35 U.S.C. § 315(c).

[4] IPR2016-00062 and IPR2016-00063.

About Dennis Crouch

Law Professor at the University of Missouri School of Law. Co-director of the Center for Intellectual Property and Entrepreneurship.

26 thoughts on “After Multiple Failures: Apple Finds its Way Around the One Year Statute of Limitations for IPR Filings

  1. . . . while wearing proudly their Michele Lee-awarded Innovation Death Squad medals.

  2. ” hedge fund Mangrove Partners”

    No Article III standing. If they lose, they cannot appeal to a court of law.

    But Apple can.

    Another way VirnetX is prejudiced.

    But recall that Achates was decided the way it was because it was assumed that Apple’s barred petitition there would be properly joinable with a petition filed by someone not barred. In other words, the Federal Circuit has already decided this issue.

    Recall also, Achates apparently settled and will not pursue its petition to the Supreme Court. Notably, MCM has not.

  3. Claim 1 of the ‘151 patent:

    1. A data processing device, comprising memory storing a domain name server (DNS) proxy module that intercepts DNS requests sent by a client and, for each intercepted DNS request, performs the steps of:

    (i) determining whether the intercepted DNS request corresponds to a secure server;

    (ii) when the intercepted DNS request does not correspond to a secure server, forwarding the DNS request to a DNS function that returns an IP address of a nonsecure computer, and

    (iii) when the intercepted DNS request corresponds to a secure server, automatically initiating an encrypted channel between the client and the secure server.

    Just in case folks are having difficulty seeing the problem with this junk, here’s the method with the abstract information content omitted:

    1. A data processing device [with a server]… that intercepts requests from a client and …. performs the steps of:

    (i) determining whether … the intercepted request [corresponds to some pretedermined criteria];

    (ii) when the … request does not [meet content criteria X], [perform step that is old in the art], and

    (iii) when the intercepted … request [meets content criteria X], [perform step that is old in the art].

    Where’s the “technology”? I see some extraordinarly basic information processing logic (if information = X, then Y; if information is not = X, then Z) but that’s about it.

    If I’m mistaken about the prior art recited in steps (ii) and (iii) respectively, I’m happy to be corrected about that. But if those steps are new then the question arises: what the heck is the point of all the other “limitations” in the claim? Note that nobody anywhere has ever taught away from basic logic like this (how could they?) and there is nothing remotely “unexpected” by the result.

    So what’s been going on at the PTO and in the district court(s), other than the usual dust-kicking and goalpost moving by the patentee and the compromised defendant’s inability to make the arguments it needs to make?

  4. It’s deeply disturbing that a panel of officials who are well versed in the law could make such an obvious mistake. Anyone of average intelligence who takes a few moments to consider the situation can determine that the waiver of time limitation for joinder only applies to parties who have already PROPERLY FILED A PETIITION, not some party who failed to do so who now wants skirt the regulations. Is it incompetence or something worse?

  5. Claim 1 of the ‘135 patent:

    1. A method of transparently creating a virtual private network (VPN) between a client computer and a target computer, comprising the steps of:

    (1) generating from the client computer a Domain Name Service (DNS) request that requests an IP address corresponding to a domain name associated with the target computer;

    (2) determining whether the DNS request transmitted in step (1) is requesting access to a secure web site; and

    (3) in response to determining that the DNS request in step (2) is requesting access to a secure target web site, automatically initiating the VPN between the client computer and the target computer

    It’s an unbelievable travesty that this claim ever got out of the PTO.

    1. MM has hijacked another thread!!! Instead of discussing the merits of Dennis’ post, i.e. Apple avoiding the SOL, she raises her own issues regarding the patent claim.

      MM – Do you have a specific comment about Apple’s actions or about the CAFC’s requesting additional briefing on these actions?

      1. Do you have a specific comment about Apple’s actions


        I applaud the efforts of any and all parties attempting to slap the patent office so it wakes up and expunges this unbelievable junk from the patent system.

          1. Doesn’t it feel good to make a comment on the subject matter of the post!!

            How would you possibly know given that you’ve contributed nothing?

            Fyi, the post concerned efforts to tank two patents using the PTO’s IPR system. I posted the independent claim of one of those patents. That’s a billion times more relevant and informative than the gxrbage you posted. Try harder next time.

            1. MM – The post was about Apple’s attempts to initiate an IPR more than a year after being served with a complaint. The language of a claim at issue has absolutely no relevance to the jurisdictional issues being raised. So, your post has no value.

              Keep trying!!

              1. The language of a claim at issue has absolutely no relevance to the jurisdictional issues being raised

                You should work for the Veteran’s Administration. They need deep thinkers like you.

              2. BC: The language of a claim at issue has absolutely no relevance to the jurisdictional issues being raised

                The specific names of the involved parties are also not relevant. Yet Dennis post is littered with references to their names! And he identified the patent numbers as well — also “irrelevant to the jurisdictional issues.”

                How ashamed he must feel about that. And how proud you must be to have such awesome insights. Please go on! It’s endlessly fascinating.

                1. MM – Why are you bringing up the VA? Have they done anything to you? Are you a military vet who needs their services? If you are military, please share with everyone your service record. I, for one, was with the 1st Ranger Battalion, 75th Ranger Regiment.

                  1. I, for one, was with the 1st Ranger Battalion, 75th Ranger Regiment.

                    I’m saluting you! If only you could see it.

                    Why are you bringing up the VA?

                    Because they need super focused guys like you to keep 90 year old WW2 veterans like Emilio Palomer from receiving benefits. Rules is rules, after all. And its just irresponsible to discuss anything else, not to mention all the hurt to your precious fee-fees.

                  2. ^^^ the blight continues.

                    Wake up Prof. Malcolm’s ad hominem has nothing to do with anything here. It is beyond ludicrous that anything short of Malcolm’s “anything and everything” is so unthinkingly tarred with his Decade of Decadence.

          2. any and all

            To Malcolm, the Ends justify the Means – ANY means.

            Any attorney worth their salt knows just how wrong and corrupt that is.

        1. You apparently don’t understand the function and value of the patents.

          Are you aware that the technology concerns automated establishment of a VPN (zero-click or one-click, no passwords) ?

          Are you aware that they are declared as essential patents to the 3GPP for 4GLTE security requirements?

          Are you aware that the technology was developed for the Pentagon and CIA under SAIC ? BH

    2. MM — I take it you are not a geek or otherwise technology savvy. Otherwise, you would have seen the value in these patents. Without the VHC technology, Apple’s VPN on demand, FaceTime, and iMessage would not operate securely. Companies use VPN on demand to communicate with employees all over the world, where such communiques often contain company secrets. As Tim Cook has said, “Security if our #1 concern!”. Two events will tell you how valid these patents are: 1) when designing the guts of Apple’s IOS, an Apple engineer tried to patent the very same technology, only to learn that VHC had already done so; and 2) Apple tried to implement a work-around of the VHC’s patents using exchange servers, which ended up eliciting over 500,000 customer complaints in service quality in just two months. In short, MM, the patents are valid and valuable, which explains why Apple is pulling out all the stops (legal and otherwise) in trying to litigate VHC out of existence.

      1. MC (and BH),

        Malcolm just does not care.

        He is on record as stating that “any and all” software is PER SE patent ineligible.

        He does not care that software is a manufacture created by the hand of man with the sole purpose of being a machine component.

        He does not care that software is equivalent to hardware (and equivalent to firmware).

        He does not care – even after volunteering an admission against his interests – about the exceptions to the judicial doctrine of printed matter.

        NONE of that will stop him from his blatantly dishonest drive-by monologue propaganda efforts.

      2. “1) when designing the guts of Apple’s IOS, an Apple engineer tried to patent the very same technology, only to learn that VHC had already done so”

        I mean, “because Apple tried to patent it, too” hardly means it is valid. Especially if the patent system does grant a lot of bad patents.

        With this particular patent, I don’t know the state of the art.

        However, I’ve seen multiple patent applications on the same subject matter (claims have same scope) in my area, and someone mistakenly allowed one of them (there’s 102 art for the claims in the NPL). The others had PG-PUBs but were abandoned.

        But, according to you, because multiple people filed for it, that suggests it’s valid?

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