Appeals from the United States Patent and Trademark Office,
Patent Trial and Appeal Board in Nos. 95/001, 788, 95/001,
789, 95/001, 856.
Stephen Blake Kinnaird, Paul Hastings LLP, Washington, DC,
argued for appellant. Also represented by Naveen Modi, Joseph
Palys, Igor Victor Timofeyev, Michael Wolfe, Daniel
William F. Lee, Wilmer Cutler Pickering Hale and Dorr LLP,
Boston, MA, argued for appellee Apple Inc. Also represented
by Rebecca A. Bact, Mark Christopher Fleming, Lauren B.
Fletcher, Dominic E. Massa; Brittany Blueitt Amadi,
Washington, DC; Scott Border, Jeffrey Paul Kushan, Sidley
Austin LLP, Washington, DC.
Theodore M. Foster, Haynes & Boone, LLP, Dallas, TX,
argued for appellee Cisco Systems, Inc. Also represented by
David L. McCombs, Andrew S. Ehmke, Debra Janece McComas.
Prost, Chief Judge, Moore and Reyna, Circuit Judges.
VirnetX Inc. ("VirnetX") appeals from decisions of
the Patent Trial and Appeal Board ("Board") related
to three inter partes reexaminations maintained by Apple Inc.
("Apple") and Cisco Systems, Inc.
("Cisco"). The United States Patent and Trademark
Office ("PTO") concluded that Apple was not barred
from maintaining its reexams by the estoppel provision of the
pre-America Invents Act ("AIA") version of 35
U.S.C. § 317(b) (2006). The Board affirmed the
Examiner's determination that the claims of U.S. Patent
Nos. 7, 418, 504 ("the '504 patent") and 7,
921, 211 ("the '211 patent") are unpatentable
as anticipated or obvious over the prior art of record. For
the reasons below, we affirm-in-part, vacate-in-part, and
'504 and '211 patents describe systems and methods
for "establishing a secure communication link between a
first computer and a second computer over a computer network,
such as the Internet." '211 patent col. 6 ll. 36-39.
These systems and methods are "built on top of the
existing Internet protocol (IP)." Id. at col. 6
Internet uses addressing systems for sending data. In such
systems, physical computers can be identified by a unique IP
address (e.g., 123.345.6.7). VirnetX Inc. v. Apple
Inc., 665 Fed.Appx. 880, 882 (Fed. Cir. 2016).
address corresponds to a domain name (e.g., www.Yahoo.com).
See '211 patent col. 38 ll. 58-61, col. 39 ll.
13-14. A user on one computer can enter a domain name in a
web browser to communicate with another computer or server.
When the user does so, the computer sends a domain name
service ("DNS") request to the domain name server
for the IP address corresponding to a given domain name.
Id. at col. 38 l. 58-col. 39 l. 3. The domain name
server then looks up the IP address of the requested domain
name and returns it to the requesting computer. Id.
at col. 39 ll. 3-7.
VirnetX patents claim systems, methods, and media for
creating secure communication links via DNS systems. For
example, claim 1 of the '211 patent recites:
1. A system for providing a domain name service for
establishing a secure communication link, the system
a domain name service system configured and arranged to
 be connected to a communication network,
 store a plurality of domain names and corresponding
 receive a query for a network address, and
 indicate in response to the query whether the domain name
service system supports establishing a secure communication
claims 36 and 60 of the '211 patent are directed to a
"machine-readable medium" and a "method,"
respectively. Otherwise, they mirror the requirements of
claim 1. Independent claims 1, 36, and 60 of the '504
patent are similar to the corresponding independent claims of
the '211 patent.
2010, VirnetX sued Apple in district court. VirnetX alleged
infringement of four patents, including the '504 and
'211 patents. VirnetX asserted claims 1, 2, 5, 16, 21,
and 27 of the '504 patent and claims 36, 37, 47, and 51
of the '211 patent. VirnetX Inc. v. Apple Inc.,
925 F.Supp.2d 816, 824-25 (E.D. Tex. 2013).
October 2011, Apple filed requests for inter partes
reexamination of the '504 and '211 patents with the
PTO. In Apple's Reexam Nos. 95/001, 788 ("788
case") and 95/001, 789 ("789 case")
(collectively, "Apple reexams"), Apple challenged
all claims as anticipated by the Provino reference or
rendered obvious by Provino in view of other prior
district court action proceeded to trial in late 2012. A jury
found the asserted claims infringed and not invalid. The jury
awarded VirnetX $368 million in damages. VirnetX,
925 F.Supp.2d at 825. The district court denied Apple's
motion for judgment as a matter of law ("JMOL") or
a new trial on these issues. Apple appealed.
appeal, we affirmed the jury's finding of no invalidity
for all four patents. VirnetX, Inc. v. Cisco Sys.,
Inc., 767 F.3d 1308, 1323-24 (Fed. Cir. 2014)
("VirnetX I"). We also affirmed the
jury's finding of infringement for many of the claims of
the two patents not related to the present appeal ('135
and '151 patents). Id. at 1320-22. We reversed the
district court's construction of the "secure
communication link" claim term, vacated the related
infringement finding for the two patents in this appeal
('504 and '211 patents), and vacated the damages
award. Id. at 1317-19, 1319, 1323-24, 1325-34. We
then remanded for further proceedings. Id. at
did not file a request for rehearing on the invalidity or
infringement issues affirmed in VirnetX I. Our
mandate issued on December 23, 2014. Apple did not seek
Supreme Court review. The 90-day period to file a petition
for a writ of certiorari expired.
in the parallel PTO reexamination proceedings, the Examiner
had found all claims of the '504 and '211 patents
unpatentable. The Examiner issued Right of Appeal Notices
("RANs") in May 2014. VirnetX appealed the
Examiner's decisions to the Board.
also petitioned the PTO to terminate the Apple reexams based
on the estoppel provision of § 317(b). The PTO denied
VirnetX's petition in June 2015. J.A. 1659-67, 3138-48.
September 2016, the Board affirmed the Examiner's
findings that all claims of the '504 and '211 patents
were unpatentable. The Board denied VirnetX's requests
appealing the Board's decisions in the Apple reexams to
this court, VirnetX moved to remand. It argued that this
court's 2014 opinion was a "final decision" on
Apple's attempt to prove invalidity under § 317(b).
ECF No. 27. In June 2017, a motions panel denied the motion
and directed the parties to address the issue in their merits
briefing. ECF No. 36.
December 2011, Cisco also filed a request for inter partes
reexamination with the PTO. Cisco's Reexam No. 95/001,
856 ("856 case" or "Cisco reexam")
challenged claims 1-60 of the '211 patent based on
multiple grounds of invalidity. Cisco based several of its
arguments on the Lendenmann reference.
extensive proceedings, the Examiner issued a RAN in January
2015. The RAN rejected claims 36-60 of the '211 patent as
either anticipated or obvious. VirnetX appealed to the Board.
In September 2017, the Board affirmed the Examiner, finding
claims 36-54 and 57-60 anticipated by Lendenmann and claims
55 and 56 obvious over Lendenmann and another reference. J.A.
88. VirnetX moved for rehearing, which was denied. VirnetX
jurisdiction under 28 U.S.C. § 1295(a)(4)(A).
appeal proceeds in two parts. First, VirnetX argues as a
threshold matter that Apple was estopped from maintaining its
reexams under the pre-AIA version of 35 U.S.C. § 317(b)
(2006). Second, VirnetX challenges the merits of the
Board's conclusions in both the Apple and Cisco reexams
that the '504 and '211 patents are invalid. We
address each in turn.
contends that Apple's reexams were barred by §
317(b). The PTO refused to terminate Apple's reexams
based on the conclusion that the provision did not apply. In
VirnetX's view, the PTO's decision was inconsistent
with controlling case law, the statutory text, and
Congress's intent. We agree.
applicability of § 317(b) is a question of statutory
interpretation. See Bettcher Indus., Inc. v. Bunzl USA,
Inc., 661 F.3d 629, 639, 642-48 (Fed. Cir. 2011).
Statutory interpretation is an issue of law we review de
novo. Unwired Planet, LLC v. Google Inc., 841 F.3d
1376, 1379 (Fed. Cir. 2016).
Patent Act requires that the PTO terminate a reexamination
once there has been a final decision on the patent
challenger's invalidity case in federal court. 35 U.S.C.
§ 317(b) (2006). Specifically, pre-AIA § 317(b)
Once a final decision has been entered against a party in a
civil action arising in whole or in part under section 1338
of title 28, that the party has not sustained its burden
of proving the invalidity of any patent claim in suit .
. . then neither that party nor its privies may thereafter
request an inter partes reexamination of any such patent
claim on the basis of issues which that party or its privies
raised or could have raised in such civil action or inter
partes reexamination proceeding, and an inter partes
reexamination requested by that party or its privies on the
basis of such issues may not thereafter be maintained by the
Office, notwithstanding any other provision of this chapter.
issue here is very narrow. Apple does not dispute the
underlying procedural facts relevant to § 317(b), which
highlight the advanced stage of these proceedings.
2010, Apple was sued for patent infringement. There is no
dispute that in that "civil action arising . . .
under" 28 U.S.C. § 1338, Apple raised an
affirmative defense of invalidity on multiple grounds. 35
U.S.C. § 317(b). Thus, Apple had the "burden of
proving the invalidity" of the asserted claims of both
the '504 and '211 patents. Id.
2012, Apple presented its invalidity defenses to a jury.
After a week-long trial, the jury concluded Apple failed to
sustain its burden of proving the invalidity of any asserted
claim of the '504 or '211 patent.
2013, the district court determined that in light of the
record at trial, substantial evidence supported the
jury's finding. The district court entered final
2014, Apple pursued an appeal of that decision here.
Specifically, Apple argued that "the asserted claims are
anticipated by the Kiuchi reference." VirnetX
I, 767 F.3d at 1323. After considering Apple's
challenges, we affirmed the district court's decision on
the issue of invalidity. Id. at 1323-24. Apple did
not file a request for rehearing. Apple elected not to seek
Supreme Court review. The 90-day period to file a petition
for certiorari expired.
2015, VirnetX petitioned the PTO to terminate Apple's
pending reexaminations based on the estoppel provision of
§ 317(b). The PTO refused, accepting Apple's
argument that there was not yet a final decision on validity.
appeal, the sole issue is whether there has been a
"final decision" entered against Apple that it
"has not sustained its burden of proving"
invalidity, triggering estoppel of ...