VirnetX Faces Follow-on IPR Petition from a Different Petitioner After Settling Previously Instituted IPR

In IPR2014-00614, Microsoft filed a petition for IPR against US Patent No. 7,418,504 (“the ‘504 patent) owned by VirnetX, which was instituted based upon anticipation grounds over Kiuchi (see institution decision). This IPR later settled, and the PTAB granted termination before a final written decision. Yesterday, a new entity (Black Swamp IP, LLC) filed a petition for IPR against the ‘504 patent, raising the same grounds of anticipation based on Kiuchi used by Microsoft in the earlier instituted IPR. This latest development highlights several strategic considerations for patent owners seeking to enforce their patents in the post-AIA world and defendants seeking to avoid them.

Before the latest petitions by Microsoft and Black Swamp IP, LLC, several prior petitions for IPR were filed against the VirnetX ‘504 patent by various entities with varying outcomes:

(1) IPR2013-00377 by Petitioner New Bay Capital, LLC – terminated
prior to institution;

(2) IPR2013-00393 and IPR2013-00394 by Petitioner Apple
Inc. – not instituted;

(3) IPR2014-0017 6 and IPR2014-00177 by Petitioner RPX
Corp. – not instituted;

( 4) IPR2014-00612 by Petitioner Microsoft Corp. – not
instituted;

(5) IPR2015-00188 and IPR2015-00189 by Apple Inc. – not
instituted.

Also, other VirnetX patents are currently involved in parallel litigation and IPR proceedings. See “High Stakes Race Between Apple and VirnetX: Will PTAB Trump The Texas Jury’s Award of $625M?”

Enforcing A Patent Against Multiple Defendants May Encourage Multiple IPR Petitions

The more litigation there is, the more that individual defendants may seek to file IPR petitions, as did Microsoft and Apple. Also, the value of the potential damages awards appears to have attracted investor interest, such as the IPR petitions filed by New Bay Capital LLC and Black Swamp IP, LLC. After several denials, Microsoft found a reference that led to an institution decision.

Settling An IPR May Not Prevent Independent Petitioners From Filing On The Same Grounds

While the PTAB has discretion to deny an IPR petition based on arguments previously presented to it, a new petition from an independent petitioner, even if it presents identical grounds, would not necessarily be denied on this basis. In fact, the PTAB has instituted in some cases even where the same petitioner has filed follow-on petitions after an earlier denial. See “Estoppel Versus Discretion: How is the PTAB Deciding Multiple Petitions Against the Same Patent?“

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