Transport Room
Transport Room
Transport Room
No. 2018-1197
On Appeal from the United States District Court for the Eastern District of Texas,
No. 6:10-cv-00417-RWS, Judge Robert Schroeder, III
CERTIFICATE OF INTEREST
Apple Inc.
Not applicable.
3. All parent corporations and any publicly held companies that own 10
percent or more of the stock of the party or amicus curiae represented by me are:
None.
4. The names of all law firms and the partners or associates that appeared
for the party or amicus now represented by me in the trial court or agency or are
expected to appear in this court (and who have not or will not enter an appearance
in this case) are:
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• VirnetX Inc. v. Apple Inc., Nos. 17-1591, -1592, -1593 (Fed. Cir.)
(VirnetX’s appeals from Apple and Cisco reexaminations holding
unpatentable claims of U.S. Patent Nos. 7,418,504 (“the ’504 patent”) and
7,921,211 (“the ’211 patent”))
• VirnetX Inc. v. Iancu, Nos. 17-2593, -2594 (Fed. Cir.) (VirnetX’s appeals
from IPRs holding unpatentable claims of ’504 and ’211 patents) (stayed
pending resolution of Appeal Nos. 17-1591, -1592, -1593)
• VirnetX Inc. v. Cisco Systems, Inc., No. 18-1751 (Fed. Cir.) (VirnetX’s
appeal from Cisco reexamination holding unpatentable claims of ’504
patent)
• VirnetX Inc. v. Apple Inc., No. 19-1050 (Fed. Cir.) (Apple’s appeal from
district court judgment awarding damages in related case involving ’504
and ’211 patents and U.S. Patent Nos. 6,502,135 (“the ’135 patent”) and
7,490,151 (“the ’151 patent”))
• VirnetX Inc. v. Cisco Systems, Inc., No. 19-1671 (Fed. Cir.) (VirnetX’s
appeal from Cisco reexamination holding unpatentable claims of ’135
patent)
• VirnetX Inc. v. The Mangrove Partners Master Fund, Ltd., Nos. IPR2015-
01046, IPR2015-01047 (P.T.A.B.) (IPRs regarding claims of ’135 and
’151 patents, on remand from Nos. 17-1368, -1383 (Fed. Cir.))
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TABLE OF CONTENTS
Page
CERTIFICATE OF INTEREST .................................................................................i
ARGUMENT .............................................................................................................1
THE COURT SHOULD VACATE THE DENIAL OF REHEARING AND
CONSIDER APPLE’S SECOND PETITION FOR REHEARING AND/OR
SUPPLEMENTAL BRIEF. ..........................................................................................1
CONCLUSION ........................................................................................................12
CERTIFICATE OF SERVICE
CERTIFICATE OF COMPLIANCE
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TABLE OF AUTHORITIES
CASES
Page(s)
County of Sacramento v. Lewis,
523 U.S. 833 (1998) ............................................................................................11
VirnetX Inc. v. Apple Inc., Nos. 17-1591, -1592, -1593 (Fed. Cir.) .......................... 7
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VirnetX Inc. v. Cisco Systems, Inc., No. 18-1751 (Fed. Cir.) ................................2, 3
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Apple respectfully submits this reply in support of its motion to vacate the
denial of rehearing and for leave to file a second petition for rehearing and rehearing
en banc and/or a supplemental brief, ECF No. 99-1 (“Motion”). This relief is
affirmed based on patent claims that, under this Court’s own decisions, either stand
ARGUMENT
VirnetX’s 21-page opposition (“Opp.”) is notable for what it does not say.
VirnetX does not deny that, under this Court’s decisions in the last two months, none
of the patent claims asserted against FaceTime is actually patentable. It also does
not deny that it is estopped from arguing patentability of those claims in at least two
other appeals currently before this Court. And it does not deny that the
unpatentability of the claims asserted against FaceTime, if given effect in this appeal,
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FaceTime is actually patentable. This Court’s recent decisions now show the
following:
- Asserted claims 36, 47, and 51 of the ’211 patent were affirmed as
indistinguishable from claim 5 of the ’211 patent, which was also affirmed as
in a separate decision issued June 28. VirnetX Inc. v. Cisco Sys., Inc., No. 18-
Decision”). 1
VirnetX does not offer any argument that these claims are actually patentable over
2. VirnetX also does not dispute Apple’s showing (Motion 11-17) that the
17-1591 Decision bars VirnetX from defending the patentability of claim 5 of the
1
VirnetX did not petition for rehearing of the 18-1751 Decision, despite
suggesting in this case that it would (VirnetX Supp. Br., ECF No. 92, at 5, 7) and
receiving an extension of time for doing so.
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’504 patent in two other appeals in which that claim’s patentability is directly at
issue:
First, Cisco petitioned for rehearing from the 18-1751 Decision itself, making
just that point regarding claim 5 of the ’504 patent. ECF No. 66 at 6-10, 13-16 (No.
18-1751). The panel in the 18-1751 appeal called for a response from VirnetX,
which is due August 28. ECF No. 70 (No. 18-1751). Should that panel accept
Cisco’s argument and affirm the Board’s finding that claim 5 of the ’504 patent is
unpatentable claim 5 of the ’504 patent (among others)—a case in which briefing
was stayed pending issuance of the 17-1591 Decision. VirnetX Inc. v. Iancu, Nos.
17-2593, -2594 (Fed. Cir.). The 17-1591 Decision estops VirnetX from challenging
the Board’s unpatentability finding regarding claim 5 of the ’504 patent in that
appeal as well.2
3. VirnetX also does not deny that the unpatentability of the asserted
claims of the ’504 and ’211 patents makes affirmance of the district court’s
2
Apple also intends to seek rehearing of the aspect of the 17-1591 Decision
that divided this panel regarding the Board’s authority to find claim 5 of the ’504
patent unpatentable in the reexamination requested by Apple. Motion 15.
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include millions of Mac and OS X units that were accused of infringing those patents
only, not the ’135 and ’151 patents asserted against VPN On Demand (which the
conclusion that none of the claims asserted against FaceTime is patentable, and that
settled precedent. The Court should therefore vacate the denial of rehearing,
warranted by this Court’s recent 17-1591 decision—and vacate and remand the
Unable to suggest any substantive reason why the asserted ’504 and ’211
claims are patentable over the prior art, VirnetX advances a collection of procedural
Apple offered the Court two avenues for considering the effect of the 17-1591
Decision in this appeal: either through a second petition for rehearing, or through a
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further supplemental brief. Motion 8-9. VirnetX does not address the second option
Court can and should vacate the prior denial of rehearing and consider Apple’s
petition. Opp. 9. VirnetX does not deny that the Court retains jurisdiction and can
grant a second petition for rehearing. See Gaia Techs., Inc. v. Reconversion Techs.,
Inc., 104 F.3d 1298 (Fed. Cir. 1997) (granting leave to file second petition for
rehearing to address intervening authority). The standard for panel rehearing is met
because the panel’s Rule 36 affirmance, issued January 15, 2019, could not possibly
have taken account of the results of the 17-1591 Decision issued on August 1, 2019.
The Court thus necessarily “overlooked or misapprehended” the legal effects of the
17-1591 Decision, which was not available to the panel when it rendered its decision.
Fed. Cir. R. 40(a)(4). VirnetX’s assertion that Apple cites no “change in law here
that renders this Court’s summary affirmance … incorrect” (Opp. 10-11) is likewise
law,” and Apple explained at length—and VirnetX does not deny—that, after the
17-1591 Decision issued on August 1, 2019, all asserted claims of the ’211 and ’504
patents (or claims indistinguishable therefrom) are unpatentable. Motion 9-17. This
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result bars affirmance here, because the accused Mac and OS X products do not
whether the Court may in fact affirm infringement and damages judgments when it
contradict the Supreme Court’s and this Court’s precedent. ECF 99-2 at 1. Contrary
to VirnetX’s assertion (Opp. 10), Fresenius USA, Inc. v. Baxter Int’l Inc., 721 F.3d
1330 (Fed. Cir. 2013), did not permit such an outcome (see Motion 13-14, 17-18;
see also infra pp. 8-11), and VirnetX points to no case that did. At a minimum,
petition/supplemental brief on the merits; they are not a reason to refuse leave to
VirnetX suggests (Opp. 11) that this Court “already rejected” on August 1,
2019, an argument that Apple could not have made before August 1, 2019.
At oral argument on January 8, 2019, Apple was clear that the three appeals
argued that day created “a variety of different possible results.” Oral Arg. 03:00-
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03:50. The Court’s questioning indicated that it was interested at the time only in
the effect of affirmance of the Cisco reexamination decision regarding the ’211
appeal alone (38:40-41:20 (Apple)), not in the combined effect of the future 17-1591
Decision and the separate 18-1751 appeal. Apple was certainly not asked what
would happen if this Court affirmed the unpatentability of all but one of the asserted
’504 and ’211 claims and a claim of the ’211 patent that VirnetX does not deny is
After the 18-1751 Decision issued, Apple filed a supplemental brief in the 17-
1591 case explaining the collateral estoppel effect of the 18-1751 Decision alone.
ECF No. 95 (No. 17-1591). VirnetX responded by asserting inter alia that collateral
estoppel did not apply in the 17-1591 case for reasons that VirnetX conspicuously
does not assert here—namely that 35 U.S.C. § 317(b) barred the Board from
conducting Apple’s reexaminations at all (ECF No. 105 at 5-9), the claims at issue
were patentably distinct across the patents (id. at 10-14), and VirnetX lacked the
incentive to fully litigate the claims at issue (id. at 14-18). Thus, when this Court
stated in a footnote in the 17-1591 Decision that Apple “failed to show why collateral
3483194, at *11 n.15, 3 it was not referring to “circumstances” that apply here. 35
3
All emphases are added.
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U.S.C. § 317(b) has no effect in this appeal, and VirnetX does not dispute Apple’s
showing (Motion 11-17) that claim 5 of the ’504 patent is indistinguishable from
claim 5 of the ’211 patent, which VirnetX had every incentive to—and in fact did—
The Court has not previously decided, and could not have decided, the
combined effect of the 18-1751 and 17-1591 Decisions in this case. That issue first
became ripe on August 1, 2019. It could not have been presented sooner and should
be decided now.
VirnetX argues that it can escape its claims’ unpatentability “because VirnetX
is not relitigating validity in this appeal.” Opp. 14. Again, VirnetX’s argument
determination, VirnetX, Inc. v. Cisco Sys., Inc., 767 F.3d 1308, 1323-1324 (Fed. Cir.
2014), this Court must “apply intervening legal developments affecting the asserted
patent’s validity, even if the court of appeals already decided the validity issue the
other way,” Fresenius, 721 F.3d at 1342. Contrary to VirnetX’s argument, this
Court’s “precedent holds that the defense of collateral estoppel based on a final
judgment of patent invalidity in another suit can be timely made at any stage of the
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VirnetX does not even cite Mendenhall, much less seek to distinguish it. And
its attempt to carve out of XY, LLC v. Trans Ova Genetics, L.C., 890 F.3d 1282 (Fed.
Cir. 2018), situations in which validity was addressed in a prior appeal (Opp. 14-15)
pending actions involving the patent.” 890 F.3d at 1294; see Fresenius, 721 F.3d
at 1343-1344 (holding that even though “there had been an appellate decision
entirely resolving” the invalidity claims, “[t]he intervening decision invalidating the
patents unquestionably applies in the present litigation, because the judgment in this
Nor should the Court wait until the PTO formally cancels the claims. Opp.
15-16. This Court regularly vacates or reverses judgments upon this Court’s
are formally cancelled. See, e.g., Imperium IP Holdings (Cayman), Ltd. v. Samsung
4
VirnetX’s argument that Fresenius involves not collateral estoppel, but
“extinguish[ing]” the cause of action (Opp. 15), is self-defeating. Whether through
estoppel or extinguishment, the asserted claims of the ’504 and ’211 patents can no
longer sustain VirnetX’s cause of action. The infringement and damages judgments
against FaceTime can thus no longer stand.
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Elecs. Co., 757 F. App’x 974, 980 (Fed. Cir. 2019) (nonprecedential) (holding that
Tech., Inc. v. Hitachi, Ltd., 250 F. App’x 988 (Fed. Cir. 2017) (nonprecedential)
(vacating district court judgment based on panel decision affirming Board’s rejection
of asserted claims); see also Prism Techs. LLC v. Sprint Spectrum L.P., 757 F. App’x
980, 987 (Fed. Cir. 2019) (nonprecedential) (district court properly vacated
judgment after panel affirmed unpatentability). And whether the PTO has formally
cancelled claim 5 of the ’504 patent does not matter, because VirnetX does not deny
that it is indistinguishable from claim 5 of the ’211 patent, which will be cancelled.
VirnetX has shown no reason for treating claim 5 of the ’504 patent as
patentable where indistinguishable claim 5 of the ’211 patent is not. See Motion 11-
management” (id.) that it rails against. Specifically, VirnetX seeks to benefit from
the fact that this Court (A) issued a Rule 36 affirmance in this case months before it
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decided the co-pending unpatentability appeals, and (B) denied Apple’s petition for
rehearing 30 minutes after issuing an opinion that—as Apple has explained without
contradiction from VirnetX—now makes plain that all claims asserted against
Apple has moved quickly to inform the Court of the consequences of the
decisions in these multiple intertwined cases. VirnetX should not be able to reap an
advantage from the fact that this one appeal, which was noticed months after the 17-
1591 and 17-1368 appeals, was put on a faster track for argument and decision. This
case should be decided based on the law—including this Court’s opinions regarding
the claims’ unpatentability and settled precedent regarding the effect of co-pending
Sacramento v. Lewis, 523 U.S. 833, 845-846 (1998) (“[T]he touchstone of due
Therefore, even if this Court does not vacate the district court judgment now, it
should at least vacate the denial of rehearing and grant the motion for leave to file a
second petition for rehearing and rehearing en banc or a supplemental brief, and hold
5
VirnetX did not complain when this Court sua sponte delayed holding oral
argument in the 17-1591 and 17-1368 appeals for months in order to hear them in
conjunction with this case. See ECF No. 78 at 6, 16.
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patents-in-suit.
CONCLUSION
The Court should vacate the denial of rehearing and grant Apple leave to file
a second petition for rehearing and rehearing en banc and/or supplemental brief.
Respectfully submitted,
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CERTIFICATE OF SERVICE
I hereby certify that, on this 19th day of August, 2019, I filed the foregoing
with the Clerk of the United States Court of Appeals for the Federal Circuit via the
CM/ECF system, which will send notice of such filing to all registered CM/ECF
users.
CERTIFICATE OF COMPLIANCE
Pursuant to Fed. R. App. P. 32(g), the undersigned hereby certifies that this
Microsoft Word 2010 in 14 point Times New Roman font. As permitted by Fed. R.
App. P. 32(g), the undersigned has relied upon the word count feature of this word