Latest Federal Court Cases - September 2020 #2

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PATENT CASE OF THE WEEK 

Apple Inc. v. Voip-Pal.com, Inc., Appeal No. 2018-1456, -1457 (Fed. Cir. Sept. 25, 2020)

In our Case of the Week, the Federal Circuit addressed two novel issues following inter partes review proceedings concerning two patents that were asserted against Apple and other large technology companies including Twitter.

The patents in suit concern voice over IP technology. After being sued, Apple filed two petitions for inter partes review of the two patents, asserting the patents were obvious. During the IPR proceedings, the former CEO of Voip-Pal sent six letters to various parties, copying members of Congress, the President, federal judges, and administrative patent judges on the Board (not copying Apple), complaining about and criticizing the IPR system, and requesting that the Board dismiss Apple’s petition or render judgment in favor of Voip-Pal. The Board thereafter issued its final written decision holding that Apple had failed to prove that the patents were invalid as obvious.

Apple thereafter moved for sanctions against Voip-Pal based on the ex parte communications with the Board and the PTO. Apple sought a sanction of either entering adverse judgment or assigning a new panel to preside over new proceedings going forward. The PTAB assigned a new panel to hear the sanctions motion. That panel determined that the letters constituted sanctionable ex parte communications, but settled on an alternate remedy: the new panel would preside over Apple’s petition for rehearing.

After briefing, the new panel denied Apple’s petition for rehearing on the merits. Apple then appealed 

While the case was pending on appeal, a new issue emerged. In a lawsuit against Twitter, a district court judge had found that representative independent claims from each patent were invalid for claiming ineligible subject matter under Section 101. The decision affected a number of claims from each patent, some of which were at issue in the IPRs. Prior to oral argument in the IPR appeal, the Federal Circuit affirmed that finding without opinion. At oral argument, Apple argued that this mooted the IPR appeal with respect to all claims.

The Federal Circuit agreed with Apple that the district court appeal decision mooted the IPR appeal with respect to claims that overlapped between the district court proceeding and the IPRs. The Court held that 15 non-overlapping claims were not mooted, notwithstanding Apple’s argument that Voip-Pal would be subject to an argument of claim preclusion with respect to those claims. The Court held that the effect of claim preclusion can only be decided in a subsequent action, and it would be premature for the court in this case to find mootness based on speculation that a future court would find non-overlapping claims to be subject to claim preclusion. The Court held that it continued to have jurisdiction over the non-overlapping claims.

With respect to the issue of sanctions, the Court affirmed the new IPR panel’s disposition of the sanctions motion. Apple had argued that the sanctions remedy was not one of the remedies provided in 37 C.F.R. 42.12(b). The Court held that the list of sanctions remedies provided in that section was non-exhaustive, based on the language in the regulation itself. The Court also rejected Apple’s argument that the sanctions remedy did not provide Apple with due process, finding a critical part of its argument there waived on appeal. The Court also noted that the Board had placed the six ex parte letters in the record and gave Apple the opportunity to respond to those letters, which it chose not to do.

On the merits, the Court affirmed the PTAB’s obviousness ruling, finding them supported by substantial evidence in a short, two page portion of the decision.

The opinion can be found here.

By Nika F. Aldrich

ALSO THIS WEEK  

Network-1 Technologies, Inc. v. Hewlett-Packard Company, Appeal Nos. 2018-2338, -2339, -2395, -2396 (Fed. Cir. Sept. 24, 2020)

In this case, the Federal Circuit vacated the district court’s post-trial determination that defendant Hewlett-Packard Co. was estopped under 35 U.S.C. § 315(e) from raising invalidity grounds not raised in an inter partes review proceeding that HP had joined as a party, and affirmed the district court’s summary judgment determination that an asserted claim had not been impermissibly broadened during re-examination proceedings, which would have rendered it invalid under 35 U.S.C. § 305. Because the Court also found the jury’s verdict of non-infringement to be based on an erroneous claim construction, the case was remanded for new proceedings on infringement and invalidity.

On § 315(e) estoppel, the Court held that under its own precedent, a joined party to an already-instituted IPR was not permitted to assert new grounds for unpatentability that were not already instituted. Where HP was time-barred from bringing its own IPR petition and joined an already-instituted IPR, it therefore could not have reasonably raised grounds not instituted in that IPR and was not estopped from asserting them at trial. On the § 305 claim-broadening question, an asserted independent claim required a “main” and “secondary” power source, which multiple district courts had construed to refer to physically separate devices. On re-examination, patentee Network-1 had added independent claims, not asserted at trial and also statutorily disclaimed, wherein the main and secondary power sources were the same device. The Federal Circuit found that the asserted independent claim had not been amended and so clearly had the same scope after re-examination, and if the new independent claims resulted in a broader claim scope, then it would have been those unasserted claims and not the independent claim that was invalid.

The opinion can be found here.

By Jason A. Wrubleski

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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