by Dennis Crouch
VirnetX v. Cisco Systems (Fed. Cir. 2019)[Decision]
This one here stems from a set of longstanding inter partes reexamination proceedings that Apple and Cisco filed against VirnetX’s U.S. Patent Nos. 7,418,504 and 7,921,211 (establishing a secure internet connection). The examiner found the claims obvious/anticipated and the PTAB affirmed.
In the parallel infringement litigation, a jury sided with VirnetX with a $368 million dollar verdict. In the litigation, the Federal Circuit affirmed on validity questions, but vacated the opinion based upon an overly broad claim construction.
When is there a final decision: Pre-AIA law included an estoppel provision that barred the USPTO from maintaining a reexamination proceeding after “a final decision has been entered against [the reexamination requester] in a civil action … that the [requester] has not sustained its burden of proving the invalidity of any patent claim in suit.” 35 U.S.C. 317(b).
In this case, the district court entered a not-invalid final judgment. However, the Federal Circuit has previously ruled that such judgment doesn’t count as a “final decision” for 317(b) until appeals have been exhausted. Fairchild.
Here, Apple argues that there still has not been a “final decision” because the case is still ongoing in district court. On appeal though, the Federal Circuit rejected that analysis — finding that its prior appeal in the case foreclosed future validity questions — and thus was the final decision for the statute (once the mandate issued and time for Supreme Court petition passed). “In sum, § 317(b) applies here despite the fact that issues unrelated to invalidity were remanded.”
The result then is that the Apple reexamination decision was vacated and sent back to the PTAB for dismissal — but only for the claims associated with the infringement action.
The reexamination by Cisco had some overlapping claims — and those cancellations were affirmed as were the Apple reexamination cancellation of claims that were not part of the litigation decisions:
We affirm the Board’s decision on all remaining claims of both patents in the Apple reexam not subject to § 317(b) estoppel and fully affirm the Board’s decision regarding the claims of the ’211 patent in the Cisco reexam.
I want to note here, that this post scratches the surface on the issues in this case that were raised both by the majority decision and by the well written dissent by Judge Reyna. The particular statutory question is going away because of the new statutory regime, but it will be of particular interest to review the court’s discussion of what counts as a “final decision” and when the USPTO should be given deference.