Reexaminations and Final Decision Estoppel

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.

13 thoughts on “Reexaminations and Final Decision Estoppel

  1. 6

    I am not sure that this decision will have impact on inter partes review (IPR) proceedings under the AIA. As Dennis mentions, the inter partes reexamination statute (former 317(b)) had a unique statutory provision prohibiting the Office from “maintaining” any inter partes reexamination after a “final decision” on invalidity was reached with respect to any claim, in a civil action. There is no comparable statutory provision in the AIA’s estoppel provision, in other words, no provision that bars the PTO from continuing an IPR/PGR after a court judgment. For IPR/PGR, the old Fresinius case from 2013 should control.

    The PTAB could of course exercise discretion to terminate an IPR/PGR after a court judgment, but this is less likely if the IPR/PGR has progressed to advanced stages, or there are claims in the IPR/PGR that were not asserted at trial in the civil action.

    1. 6.1

      Let’s not forget that even with the recent Board change to mirror the standard used in Article III courts (re: notBroadest Reasonable Interpretation), there are STILL substantive differences between the NON-Article III forum and the Article III forum.

  2. 5

    Hey Repuk -k-k-Kes-: f—k off and die. That includes the dOoshbag down the hall.

    Meanwhile, white supremacist 6chan is still with us. He’s a very serious person. Just like Bildo.

    Innocent people shot to death. But what’s really important is Bildo’s feefees. And gosh forbid there is an impression of bias here. That would be a national tragedy.

    1. 5.1

      Wow – your non-patent law rants are wiped out – and you just don’t Fn care that this is just not the forum for those types of views, so you double down AGAIN with the same schlock?

      That’s a special kind of Stu p1d.

  3. 4

    … and Malcolm adds to his “impressive” lead of most posts expunged for being appropriate.

    1. 4.1

      Go F—k yourself, Bildo.

      1. 4.1.1

        Stay classy, San Diego.

  4. 3

    Totally off-topic, but it does not appear that there are any discussions on this post to interrupt: the other day, Paul Morgan asked a very good question about the announced plan to import drugs from Canada. Namely, “Who is going to sell it to them?”.

    I think that I have found an answer.

    1. 3.1

      [Actually, my question was about what legal or practical obstacles might the pharma industry have to prevent this if this was a genuine proposal? The best practical answers I got were, I think, delaying FDA approval and if possible limiting drug sales to Canada sufficient only for Canadians themselves, so that they would not allow selling much of it it to U.S. visitors.]

      1. 3.1.1

        Not sure that the quantity approach would work with a “first come first serve” middleman of a pharmacy. You would need to incentivize the pharmacy to determine and select sales based on the citizenship of the end buyer. Not sure if that is even possible under Canadien law today.

    1. 2.1

      Once all said and done, can you imagine the family tree for Hyatt?

  5. 1

    This is another example of why this slow three-step inter partes reexamination proceedings system was eliminated by the AIA. [Almost all AIA post-grant proceedings are concluded before D.C. patent suits get to trial, even if they are not stayed well before then.]
    P.S. I wonder if the non-litigated claims finally eliminated in rem here are dependent claims depending from successfully litigated claims? If so, how realistically could they ever be asserted against anyone else?

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