VIRNETX INC., v. APPLE, INC.

Before Newman, O’Malley, and Chen. Appeal from the PTAB.

Summary: Patent Owner Vertnetx Inc. (“Virnetx”) was collaterally estopped from arguing that a reference was not a printed publication because the Federal Circuit had already determined the reference was a printed publication in a Rule 36 judgement in a separate but related appeal.

Apple, Inc. (“Apple”) filed multiple IPR petitions against Virnetx’s patents. Many of Apple’s petitions relied on the same reference (RFC 2401). In each of the cases, Virnetx argued that the RFC 2401 reference was not a printed publication. During the pendency of this case, the Federal Circuit affirmed, via a Rule 36 judgment, the Board’s decision in a related case that the RFC 2401 reference was a printed publication as of the relevant priority date.

The Federal Circuit found that Virnetx was collaterally estopped from arguing the printed publication issue because the issue was necessary or essential to the prior judgment. The Federal Circuit found that each ground of unpatentability in the prior appeal relied on RFC 240, and found that Virnetx even conceded during oral argument that the printed publication issue was a threshold issue in the prior case.

Virnetx, in the alternative, then pointed to a “single, generic paragraph” and argued that it preserved in its opening brief the separate issue of whether IPR procedures apply retroactively to patents that were filed before Congress enacted the AIA. The Federal Circuit found that Virnetx conceded in oral argument that it “didn’t specifically brief” the retroactivity issue and that Virnetx’s actions to preserve this issue suggested that Virnetx’s actions were “likely less than sincere.”

Thus, the Federal Circuit found that Virnetx’s did not preserve the retroactivity issue and that Virnetx’ was collaterally estopped from raising the printed publication issue, which resolved all other issues on appeal.