Next week the Federal Circuit will hear arguments in VirnetX Inc. v. Apple Inc. For the third time in a series of cases brought by VirnetX, Apple is appealing a judgment of infringement. As explained in VirnetX’s brief, “[i]n this action . . . a jury found infringement by revised versions of VPN on Demand and FaceTime,” “finding . . . that VirnetX was entitled to $502 million in damages.”
In Apple’s opening brief, Apple makes a number of non-infringement arguments related to VPN on Demand and FaceTime, contends that “[t]he district court erred by barring Apple’s invalidity defenses and counterclaims,” argues the district court “erred in refusing to enter judgment that iMessage does not infringe,” and highlights that “[t]he PTO has found each asserted claim of the four patents-in-suit unpatentable in inter partes review and reexamination proceedings.”
In its response brief VirnetX rejects Apple’s non-infringement arguments, arguing that “[s]ubstantial evidence supports the jury’s finding that redesigned VPN on Demand infringes” and that “[t]he jury properly found that redesigned FaceTime infringes.” VirnetX goes on to contend that “[i]ssue preclusion barred Apple from relitigating the validity of claims it unsuccessfully challenged” in prior litigation, “Apple’s request for a declaratory judgment of non-infringement as to iMessage is moot because VirnetX has covenanted not to sue for iMessage’s infringement of the asserted patents,” and “Apple’s arguments contingent on other cases are premature.”
Apple’s reply brief rejoins VirnetX’s arguments on these issues.
Most recently, the parties filed supplemental briefs disputing the relevance of recent decisions by the Federal Circuit under the doctrine of collateral estoppel. Apple argues that “[i]n the past two months, this Court has issued two decisions in reexamination appeals that make plain that all asserted claims for two of those patents—the ’504 and ’211 patents—are unpatentable.” But VirnetX responds that, “while this Court has held that the PTO’s cancellation of a patent claim can extinguish a cause of action based on that claim, . . . none of the claims asserted here has been cancelled.”
This case is interesting not only because of the large jury verdict in play, but also because of the issues raised in the supplemental briefs—the extent to which collateral estoppel applies to limit Apple or VirnetX’s arguments in this appeal. In the post-AIA world of parallel invalidity proceedings, district court v. inter partes review, the issue of collateral estoppel is likely going to be a recurring topic in patent cases.