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Virnetx Inc. v. Mangrove Partners Master Fund, Ltd.

United States Court of Appeals for the Federal Circuit

July 8, 2019, Decided

2017-1368, 2017-1383

Opinion

 [*900]  Moore, Circuit Judge.

VirnetX Inc. appeals two inter partes review decisions holding claims 1, 3-4, 7-8, 10 and 12 of U.S. Patent No. 6,502,135 and claims 1-2, 6-8, and 12-14 of U.S. Patent No. 7,490,151 unpatentable. VirnetX raises multiple procedural challenges, including that the Patent Trial and Appeal Board ("Board") erred by joining Apple Inc. to the proceedings, that substantial evidence does not support the Board's finding that The Mangrove Partners Master Fund, Ltd. ("Mangrove"), named all real parties in interest, and that the Board abused its discretion in denying its request for authorization to file a motion for additional discovery. VirnetX also challenges the merits of the Board's decision holding the claims unpatentable. For the following reasons, we vacate and remand.

Background

VirnetX is the owner of the '135 and '151 patents ("Challenged Patents"). These patents have been the subject [**3]  of ongoing litigation between VirnetX and Apple Inc. and multiple petitions for inter partes review. VirnetX served Apple with a complaint alleging infringement of claims of the Challenged Patents in 2010. In June 2013, Apple filed petitions for inter partes review of the Challenged Patents, which the Board denied as time-barred under 35 U.S.C. § 315(b). E.g., Apple Inc. v. VirnetX Inc., IPR2013-00354, Paper 20 at 5 (P.T.A.B. Dec. 13, 2013). In November 2013, RPX Corporation petitioned for inter partes review of the Challenged Patents. The Board again denied institution as time-barred based on evidence that Apple was a real party in interest. E.g., RPX Corp. v. Vir-netX Inc., IPR2014-00171, Paper 57 at 3. In April 2015, Mangrove petitioned for inter partes review of the Challenged Patents, and the Board instituted review. Following institution, Apple filed  [*901]  its own petitions asserting the same grounds of unpatentability as Mangrove's petitions along with requests for joinder to the instituted proceedings. The Board granted Apple's requests with certain conditions to Apple's involvement.1

Each challenge to claims of the Challenged Patents was based at least in part on a 1996 article by Kiuchi, et al., titled [**4]  "The Development of a Secure, Closed HTTP-Based Network on the Internet" ("Kiuchi"). For the '151 patent, the Board held that claims 1-2, 6-8, and 12-14 were anticipated by Kiuchi and rendered obvious by Kiuchi in view of other prior art references not at issue. For the '135 patent, it held that claims 1, 3-4, 7-8, 10, and 12 were anticipated by Kiuchi and claim 8 was rendered obvious by Kiuchi in view of another prior art reference not at issue. VirnetX timely filed notices of appeal, and the appeals were consolidated. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(4)(A).

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778 Fed. Appx. 897 *; 2019 U.S. App. LEXIS 20142 **; 2019 U.S.P.Q.2D (BNA) 250290; 2019 WL 2912776

VIRNETX INC., Appellant v. THE MANGROVE PARTNERS MASTER FUND, LTD., APPLE INC., Appellees;VIRNETX INC., Appellant v. THE MANGROVE PARTNERS MASTER FUND, LTD., APPLE INC., BLACK SWAMP IP, LLC, Appellees

Notice: THIS DECISION WAS ISSUED AS UNPUBLISHED OR NONPRECEDENTIAL AND MAY NOT BE CITED AS PRECEDENT. PLEASE REFER TO FEDERAL RULES OF APPELLATE PROCEDURE RULE 32.1 GOVERNING THE CITATION TO UNPUBLISHED OPINIONS.

Prior History:  [**1] Appeal from the United States Patent and Trademark Office, Patent Trial and Appeal Board in No. IPR2015-01046.

Appeal from the United States Patent and Trademark Office, Patent Trial and Appeal Board in No. IPR2015-01047.

Disposition: VACATED AND REMANDED.

CORE TERMS

proxy, server, client-side, user, patent, corresponding, module, real party in interest, additional discovery, argues, inter partes, server-side, petitions, target, disclaimer, requests, anticipation, communicate, discloses, intercepted, proceedings, substantial evidence, network, proposed construction, challenges, authorization, encrypted, functions, joinder, prior art

Administrative Law, Judicial Review, Standards of Review, De Novo Standard of Review, Governments, Legislation, Interpretation, Standards of Review, Business & Corporate Compliance, US Patent & Trademark Office Proceedings, Patent Law, US Patent & Trademark Office Proceedings, Patent Law, Jurisdiction & Review, De Novo Review, Substantial Evidence, Nonobviousness, Evidence, Fact & Law Issues, Anticipation & Novelty, Elements, Formal Adjudicatory Procedure, Hearings, Evidence, Official Notice, Infringement Actions, Claim Interpretation, Prosecution History Estoppel