by Dennis Crouch
The high-stakes patent dispute between VirnetX and Apple continues with VirnetX’s new petition asking the Supreme Court to review two important Federal Circuit rulings. The VirnetX petition focuses on the Federal Circuit’s interpretation of the inter partes review (“IPR”) joinder provisions and the requirements of the Federal Vacancies Reform Act (“FVRA”).
The AIA Question: IPR Joinder Time Limits
Under the AIA, parties sued for patent infringement generally must seek inter partes review within one year of being served with the complaint. 35 U.S.C. § 315(b). But the provision goes on to permit joinder to an already-instituted IPR proceeding, stating that the one-year time limit “shall not apply to a request for joinder” under § 315(c). VirnetX argues that while the one-year limit does not apply to the joinder request itself, a party still must have “properly file[d] a petition”—including within the one-year period—to be eligible for joinder. This argument stems from the text of Section 315(c) that permits the Director to join a party “who properly files a petition…”
In the litigation below, VirnetX sued Apple for infringing patents on secure communications technology. Apple sought to challenge the patents’ validity through IPR, but its petitions were filed more than a year after VirnetX’s complaint and thus denied as untimely. Apple then joined IPRs filed by other challengers, and the Patent Trial and Appeal Board (“PTAB”) allowed that joinder despite the time-bar. VirnetX contends this contravenes § 315(b)’s time limit, as Apple never “properly file[d] a petition” within the statutory window.
The Federal Circuit upheld Apple’s joinder, construing § 315(b)’s time limit as inapplicable to a joinder request. VirnetX argues this nullifies § 315(b)’s clear time bar, allows defendants to evade the limit through improper joinder requests, and facilitates serial attacks on patents already upheld in court.
(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 … 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).
(c)Joinder.— If the Director institutes an inter partes review, the Director … may join as a party to that inter partes review any person who properly files a petition under section 311 …
In addition to the direct statutory interpretation, VirnetX argues that the joinder work-around improperly enables Apple—with vast resources—to take control of the challengers’ invalidity case. It also contravenes the AIA’s purpose of providing an efficient and streamlined alternative to litigation. VirnetX contends the Federal Circuit’s reading warrants review given the importance of properly construing the AIA’s protections for patent owners.
The FVRA Question: Acting PTAB Officials
The second question concerns the Federal Circuit’s interpretation of the Federal Vacancies Reform Act, which governs temporary appointments to vacancies in Senate-confirmed offices. The FVRA establishes exclusive mechanisms for designating acting officials. 5 U.S.C. §§ 3345, 3347.
When VirnetX requested Director review of the PTAB’s decisions invalidating its patents, as required by Arthrex, Inc. v. Smith & Nephew, Inc., 141 S. Ct. 1970 (2021), the Director position was vacant. VirnetX’s request was denied by the Commissioner of Patents purportedly exercising the Director’s authority based on an agency succession order. However, at the time the Commissioner was neither the Director nor even the Acting Director. The FVRA includes a mechanism for the President to put into place a temporary officer, but that was not done. Rather, the PTO itself had created a succession plan authorizing the Commissioner to act. The problem with this approach is that it violates the FVRA on its terms.
In order to cut the knot, the Federal Circuit interpreted the FVRA to allow temporary performance of a Senate-confirmed officer’s duties if those duties could have been delegated by a USPTO Director. An example of this might be Section 132 that requires the Director to “notify the applicant” of any rejection or objection to a pending application.
VirnetX argues that the Federal Circuit’s interpretation construes FVRA into virtual nonexistence, since nearly all agency heads’ duties are delegable. It also undermines the Appointments Clause by allowing agencies to bypass the FVRA’s exclusive temporary appointment mechanisms.
VirnetX contends the Federal Circuit misread the FVRA’s text and precedent by importing a limited definition of “function or duty” from one FVRA provision into the entire statute. This important Appointments Clause issue, which arises frequently during presidential transitions, merits the Supreme Court’s review.
The petition notes that this has been growing across the Federal Government for more than a decade and these “fake” acting heads of agencies have been used ever more frequently in the past two administrations.
Further reading:
- Arthrex, Inc. v. Smith & Nephew, Inc., 35 F.4th 1328 (Fed. Cir. 2022), cert. denied, 143 S. Ct. 2493 (2023). This is the case that most extensively discusses the FVRA issue.
- Anne Joseph O’Connell, Actings, 120 Colum. L. Rev. 613 (2020). Outside of the patent context, this article provides substantial background on vacancies in Senate-confirmed offices and acting appointments.
- H. Comm. on Oversight & Reform, 116th Cong., Policy and Supporting Positions (Comm. Print 2020).
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Counsel of record Naveen Modi of Paul Hastings LLP represents VirnetX.
Most respondents have already waived their right to respond to VirnetX’s petition. The PTO Director, has waived her right to respond through DOJ counsel. Apple likewise waived response through counsel Mark Fleming of WilmerHale. And respondent Mangrove Partners Master Fund waived response through counsel James Bailey.
Only Black Swamp IP, LLC, which the PTAB allowed to join one of the IPR proceedings as an additional challenger to VirnetX’s patents, has not yet indicated whether it will file a response before the October 27 deadline.
Free AI generations, microsoft footing the bill to the tune of millions to offer this to public for awhile. If anon and MM want to see some masterpiece tier pieces people made online I can drop them in an imagur.
link to bing.com
To the tune of millions….?
Yeah, no.
That’s what the reported cost it was costing them to do it was. Not sure why you’d think differently. You’ll note that the service is routinely over-burdened due to popularity.
All of my pieces I’ve made so far are basically top tier productions only an medium+ accomplished artist could begin produce. And none of them have extra long arms or extra fingers etc. Tho not all the faces are super detailed, some are.
Lol – you really don’t think some loss-leader is not accounted for in their business plan?
Just because something is a loss leader or just a promotion doesn’t mean it doesn’t cost money derpa herpa
Try again — maybe you do not understand the concept of loss leader does NOT mean that the entire development costs are merely written off.
There just is no “millions and millions” lost in their ‘free’ provisions.
Bada Bing!
Anyone want to estimate the legal fees Virtex has spent to make sure that a “properly appointed” PTO Director will deny their request for review?
Appeals aren’t all that expensive and a quick glance at the most recent Federal Circuit decision in this litigation suggests that they didn’t spend all that much time briefing that specific issue.
Given the $500 million judgment that the IPRs wiped out, no brainer to petition for cert.
VirnetX is correct that USPTO flagrantly violated the law on both issues, but I don’t think the Supreme Court cares. Their contempt for patents outweighs their duty to interpret the laws.
Yes, that.
Don’t have the cert petition handy, but the PTAB’s interpretation of the statute (and the Federal Circuit’s consistent affirmance of it) is reasonable. The parade of horribles that VirnetX puts forth really aren’t an issue in practice. For example:
The Federal Circuit upheld Apple’s joinder, construing § 315(b)’s time limit as inapplicable to a joinder request. VirnetX argues this nullifies § 315(b)’s clear time bar
The text of the statute is pretty clear here: the time bar doesn’t apply to a Petition for Joinder.
allows defendants to evade the limit through improper joinder requests
VirnetX’s whole argument is based on a misreading of the statute. And I’m not sure that this is the kind of result plaintiffs want. VirnetX appears to be arguing that a party can only join an instituted IPR if it has filed its own Petition. Forces Petitioners to file IPR Petitions just to be able to join other Petitions.
and facilitates serial attacks on patents already upheld in court
The concern about serial attacks is overblown, because the PTAB has been absolutely brutal on serial petitions by the same Petitioner.
VirnetX argues that the joinder work-around improperly enables Apple—with vast resources—to take control of the challengers’ invalidity case.
The Board requires that parties seeking joinder agree to participate in an understudy role and not be involved so long as the original Petitioner hasn’t settled. And they actually enforce this rule.
No, VirnetX’s interpretation forces parties to join already-filed petitions before the one-year bar to a party’s own filing of a petition has run its course. VirnetX’s gripe seems legitimate: if party A missed the deadline to file an IPR, it shouldn’t be able to do an end-run on the statute by joining the already-filed petition of party B.
That’s not what VirnetX is arguing:
The one-year time limit for filing a petition does not extend to the “request for joinder”; the joinder request can be filed later. §315(b). But that does not free defendants from their obligation to file a “proper[]” IPR “petition” as a condition of seeking joinder. Cert. Petition at 15
Nor can it: the statute expressly states that the one year bar doesn’t apply to requests for joinder.
What VirnetX is saying is that eligibility for joinder requires previously filing an IPR Petition and that Petition can’t be time barred.
Don’t think they’re right, but it’s a very well-written and creative reading of the statute.
And, obviously, Apple didn’t forget about the deadline. They chose to fight in district court…then changed their mind for some reason. No idea what triggered that change, but it’s probably not something we should encourage.
They couldn’t. The VirnetX cases were filed in 2010, and IPRs were introduced in 2013. They filed IPRs that were kicked because of the one-year bar.
Mister SS – whether or not I agree here, I applaud you for a nice on-point post.
I have not dug in here, but does this attempt distinguish over what Arthrex attempted (but could not accomplish)?
+1
“ Black Swamp IP, LLC”
LOL
You laugh! But for short they call themselves BS IP.
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