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Exploring the Latest in Intellectual Property Law
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If Prior Art Discloses Ingredients and How to Mix Them, the “Cake” Is Anticipated

by | Apr 20, 2023 |

The US Court of Appeals for the Federal Circuit affirmed that challenged claims were invalid as anticipated based on principles of inherency where the disclosed prior art formulations and processes necessarily met a disputed claim limitation. Arbutus Biopharma Corp. v. ModernaTx, Inc., Case No. 20-1183 (Fed. Cir. April 11, 2023) (Reyna, Schall, Chen, JJ.)

Arbutus Biopharma owns a patent that matured from an application filed on March 9, 2015, that claims priority to a provisional application filed on June 30, 2010. The claimed invention provides stable nucleic acid-lipid particle (SNALP) formulations with a non-lamellar structure that function to increase the efficiency of nucleic acid entry into cells to promote the downregulation of gene expression. The non-lamellar morphology of a SNALP formulation was known to depend on two factors: the lipids incorporated into the SNALP formulation, and the process used to form the SNALPs. The patent disclosed five SNALP formulations of various compositions that can be used and incorporated by reference two US patent publications, which describe two methods that can be used to make SNALP formulations: the Direct Dilution Method (DDM) and the Stepwise Dilution Method (SDM). The representative independent claim recites a composition of SNALPs, wherein each particle in the plurality of SNALP particles comprises a nucleic acid and various lipid types. The claim also requires that at least 95% of the particles in the plurality of particles have a non-lamellar morphology (the Morphology Limitation).

Moderna filed a petition for inter partes review (IPR) asserting that all the claims of the Arbutus patent were anticipated by a prior art patent. The Patent Trial & Appeal Board found that although the Morphology Limitation was not expressly found in the prior art, the claims were anticipated. The Board determined that the Morphology Limitation was an inherent property (or natural result) of the prior art disclosures. On appeal, Arbutus challenged the Board’s inherent and express anticipation findings for many of the challenged claims, including for the Morphology Limitation.

A limitation is inherent if it is the natural result flowing from the prior art’s explicit disclosure. In other words, a limitation is inherent when the limitation is a property necessarily present in the invention and not actually an additional requirement imposed by the claims. In the IPR proceeding, Moderna argued that the Morphology Limitation was inherent because one skilled in the art would necessarily obtain formulations meeting this limitation by making formulations using the five formulations disclosed by the patent and using the DDM method (from the incorporated-by-reference disclosures) to prepare the formulations.

Both the challenged patent and the prior art disclosed five formulations that can be used to obtain the SNALP formulations. Evidence showed that any differences between the formulations disclosed in these patents would not impact the Morphology Limitation. The Federal Circuit found that substantial evidence supported a finding that the formulations disclosed in both the challenged patent and the prior art were the same or essentially the same.

The Federal Circuit further explained that both the challenged patent and the [...]

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Branding Function Patent Yet Another 1[01] to Bite the Dust

by | Apr 20, 2023 |

Addressing the patentability of claims directed to digital image branding functions, the US Court of Appeals for the Federal Circuit affirmed a district court’s determination that claims across three related patents were invalid under 35 U.S.C. § 101 for lacking patent-eligible subject matter. Sanderling Mgmt. Ltd. v. Snap Inc., Case No. 21-2173 (Fed. Cir. Apr. 12, 2023) (Chen, Cunningham, Stark, JJ.)

Sanderling owns three patents, each titled “Dynamic Promotional Layout Management and Distribution Rules.”  The three patents share a common specification and are generally directed to a method using distribution rules to load digital imaging branding functions to users when certain conditions are met. The specification explains that a distribution rule is “a rule used in determining how to target a group of end users, for instance, a rule that determines that only a group of end users having certain characteristics and/or match a certain requirement.”

Sanderling asserted each of the three patents against Snap in the Northern District of Illinois. Snap moved to transfer venue to the Central District of California and to dismiss the case under Fed. R. Civ. P. 12(b)(6) for failure to state a claim based on the allegation that the asserted patents’ claimed ineligible subject matter under § 101. After the case was transferred, the Central District of California found the claims patent ineligible and granted Snap’s motion to dismiss. Sanderling appealed.

The Federal Circuit reviewed the decision by engaging in the two-step Alice framework for subject matter eligibility. Under step one, the Court determined that the claims were directed to the abstract idea of providing information—in this case, a processing function—based on meeting a condition (e.g., matching a GPS location indication with a geographic location). The Court explained that for computer-related inventions, the relevant question is whether the claims are directed to an improvement to computer functionality or to an abstract idea. The Court found that the claims in issue were not directed to an improvement in computer functionality, but instead to the use of computers as a tool—specifically, a tool to identify when a condition is met and then to distribute information based on satisfaction of that condition.

Even if directed to an abstract idea, patent claims may still be eligible under step two of the Alice framework if there are additional features that constitute an inventive concept. The Federal Circuit, however, found that the claims failed this step also. The Court explained that if a claim’s only inventive concept is the application of an abstract idea using conventional and well-understood techniques, the claim has not been transformed into a patent-eligible application of an abstract idea. The distribution rule of the asserted claims was just that: the application of the abstract idea using common computer components. Accordingly, the Court affirmed the district court’s decision that the patent claims were invalid under § 101.

Practice Note: On appeal, Sanderling argued that the district court erred at step one of the Alice analyses by failing to construe certain claim terms that were allegedly crucial to the determination. [...]

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Context Is Key in Claim Construction

by | Apr 20, 2023 |

The US Court of Appeals for the Federal Circuit reiterated that intrinsic evidence trumps extrinsic evidence in determining the meaning of claim terms. Sequoia Technology, LLC v. Dell, Inc. et al., Case Nos. 21-2263; -2264; -2265; -2266 (Fed. Cir. Apr. 12, 2023) (Stoll, Lourie, Dyk, JJ.)

Sequoia Technology owns a patent directed to data storage methods involving storing the same data across multiple physical disk drives to make up a virtual disk drive. Sequoia asserted the patent against several companies, all based on a product sold by Red Hat. During litigation, the parties disputed the construction of the terms “computer-readable recording medium,” “disk partition” and “logical volume.” Related to the latter two claim construction issues, the parties construed the term “used or not used” in the context of an extent’s usage in an “extent allocation table.”

The district court adopted Red Hat’s construction of “computer-readable recording medium” to include transitory media (i.e., signals or waves). The district court found no clear language in the specification that excluded transitory media and found Red Hat’s extrinsic evidence to be persuasive, “particularly given the lack of any substantive rebuttal from Sequoia’s expert.” For “disk partition” and “logical volume,” the district court agreed with Red Hat and construed “disk partition” to mean a “section of a disk that is a minimum unit of a logical volume” and “logical volume” to mean an “extensible union of more than one disk partition, the size of which is resized in disk partition units.” These constructions require that a logical volume is constructed by whole disk partitions, not subparts of disk partitions such as extents. The district court also construed the phrase “used or not used” in the limitation “extent allocation table for indicating whether each extent in the disk partition is used or not used,” adopting Red Hat’s construction that “used or not used” means that an extent “is or is not storing information.”

Following claim construction, the parties stipulated that under the district court’s claim construction of “logical volume” and “disk partition,” the accused products did not infringe the asserted claims. The parties also stipulated that under the district court’s construction of “computer-readable recording medium,” certain claims were subject matter ineligible under 35 U.S.C. § 101 as including transitory media. Sequoia appealed.

The Federal Circuit concluded that the district court erred in construing “computer-readable recording medium.” Starting with the claim language, the Court noted that the claim recited a “computer-readable recording medium storing instructions” and not simply a “computer-readable medium.” The Court reasoned that an ordinarily skilled artisan would understand transitory signals to be incompatible with the claimed invention because such fleeting signals would not persist for sufficient time to store instructions. Turning to the specification, the Court explained that although the specification did use open-ended “including” language to describe a computer-readable medium, the relevant portion of the specification defined computer-readable media as “including compact disc read only memory (CDROM), random access memory (RAM), floppy disk, hard disk, and magneto-optical disk,” all of which are non-transient [...]

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Allegations in Complaint Prevail over Statements in Exhibit

by | Apr 20, 2023 |

The US Court of Appeals for the Federal Circuit, prioritizing specific allegations in the complaint over disclosures in exhibits to the complaint, reversed and remanded a district court decision dismissing an original complaint, denying leave to file an amended complaint. Healthier Choices Management Corp. v. Philip Morris USA, Inc.; Philip Morris Products S.A., Case Nos. 22-1268; -1563 (Fed. Cir. Apr. 12, 2023) (Taranto, Cunningham, Stoll, JJ.)

Healthier Choices Management (HCM) filed a complaint for patent infringement against two Philip Morris defendants in the Northern District of Georgia. The infringement allegation involved a patent for a nicotine delivery device. The relevant language from the claims focused on a heating element in the device “initiating . . . a combustion reaction . . . [with] the combustion reaction at least partially combusting the combustible material.” In its complaint, HCM alleged that the heating in the accused product resulted in at least partial combustion.

Philip Morris defended the claim by arguing that its accused product aerosolized the nicotine at a low temperature and, therefore, never combusted the tobacco. Philip Morris filed a motion under Fed. R. Civ. Pro. 12(b)(6) against HCM arguing that an exhibit to the complaint “conclusively demonstrated” that the accused product did not initiate a combustion reaction. The district court agreed and granted the motion to dismiss, prompting HCM to file a motion for leave to amend its complaint to more definitively allege infringement. The district court denied the motion and granted Philip Morris’s subsequent motion for attorneys’ fees under 35 U.S.C. § 285. HCM appealed.

Since the issues raised were not unique to patent law, the Federal Circuit addressed HCM’s appeal under the law of the relevant regional circuit, the Eleventh Circuit. The Court noted that in the Eleventh Circuit, exhibits attached to a complaint can be considered and the exhibit controls in the event of any conflict with allegations pertaining to the exhibit. However, when an exhibit is alleged to be factually false in some way and the allegations in a complaint are specific and well pleaded, then the allegations in the complaint control. The exhibit regarding the accused product in this case was alleged to be incorrect, as far as it stated that there was no combustion initiated by the “heat-not-burn” method described in the exhibit. HCM contended that combustion occurred despite the assertions in that document. Relying on several cases disavowing the truth of the exhibit, the Federal Circuit found Eleventh Circuit law to be both clear and in alignment with HCM. The Court concluded that in light of the detailed allegations as to the basis underlying HCM’s disagreement with the facts asserted in the exhibit, the complaint should not have been dismissed based on the exhibit.

The Federal Circuit next turned to HCM’s amended complaint. Noting that the amended complaint “superseded” the earlier complaint, the Court found that the amended complaint removed the offending exhibit and any references to the offending exhibit and included a declaration of a technical expert to further support HCM’s allegations. [...]

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Overlapping Ranges in Prior Art Put Burden on Patentee to Show Criticality

by | Apr 20, 2023 |

The US Court of Appeals for the Federal Circuit found that the challenged patents were invalid as anticipated and obvious in a case involving claimed ranges and prior art that included teachings with overlapping ranges. UCB, Inc. v. Actavis Laboratories UT, Inc., Case No. 21-1924 (Fed. Cir. Apr. 12, 2023) (Moore, C.J.; Chen, Stoll, JJ.)

UCB owns two prior art patents (the Mueller patents), one directed to methods for stabilizing rotigotine that covers a drug used in UCB’s Neupro® transdermal patches to treat Parkinson’s disease, and the other directed to the stable dispersions of rotigotine used in Neupro® transdermal patches.

Soon after UCB began marketing its original Neupro® transdermal patch in 2007, it discovered that rotigotine crystallized when the patch was kept at room temperature, which lowered the amount of rotigotine available to cross the skin/blood barrier and enter the patient’s circulation and reduced the product’s effectiveness. UCB recalled Neupro® from the market in the United States. In Europe, it marketed Neupro® only under “cold chain” conditions, which reduced the rotigotine crystallization.

The challenged patent in this case solved the problem of room temperature crystallization using dispersions in which the ratio of rotigotine to the stabilizer polyvinylpyrrolidone (PVP) ranged from “about 9.4 to about 9.6.” The original Neupro® formulation had a rotigotine to PVP ratio of 9:2, and the Mueller patents disclosed a partially overlapping range of 9:1.5 to 9:5, as shown in the following graphic from the Federal Circuit’s opinion:

The reformulated Neupro had a ratio of 9:4 rotigotine to PVP and exhibited stability for up to two years at room temperature.

The district court held that the Mueller patents anticipated all asserted claims because a person of ordinary skill in the art (POSA) would “readily envisage” a combination of 9% rotigotine with 4% to 5% of PVP. The district court also determined that all claims were obvious in light of the Mueller patents and other prior art.

Anticipation/Overlapping Ranges

The Federal Circuit first noted that although the prior art that discloses a point within a claimed range generally anticipates that claim, such was not the case here, and the district court committed legal error treating it thus.

Instead, the Federal Circuit treated this case as one of overlapping ranges. Under that legal rubric, once a patent challenger establishes a prima facie case of anticipation by showing that the claimed range partially overlaps with the cited art, the burden shifts to the patentee to show that the “claimed range is critical to the operability of the claimed invention.” The Court stopped short of ruling that UCB had not met its burden of showing the criticality of the range because it concluded that the two patents in question were obvious in light of the overlap between the claimed ranges and those of the Mueller patents.

Teaching Away

The Federal Circuit affirmed the district court’s rejection of UCB’s arguments that Tang, another [...]

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And All That Jazz: Trademark Used for One Service Doesn’t Permit Tacking for Others

by | Apr 13, 2023 |

Reversing the Trademark Trial & Appeal Board’s decision to dismiss an opposition, the US Court of Appeals for the Federal Circuit addressed the requirements for a trademark owner to employ “tacking” based on the use of a mark for one service in the context of a trademark application listing multiple services. Bertini v. Apple Inc., Case No. 21-2301 (Fed. Cir. Apr. 4, 2023) (Moore, C.J.; Taranto, Chen, JJ.)

Charles Bertini is a professional jazz musician who filed a notice of opposition to Apple’s application to register the mark APPLE MUSIC. Because the parties did not dispute that there was a likelihood of confusion between the two marks, the only disputed issue was which party’s mark was entitled to an earlier priority date. Bertini’s mark, APPLE JAZZ, had a priority date of June 13, 1985, for use in live music festivals and concerts. Apple’s mark, APPLE MUSIC, which was the subject of the opposition, had a priority date of June 8, 2015. In its application, Apple sought to register its mark for 15 broad service categories, including the production and distribution of sound recordings and the arranging, organizing, conducting and presenting of live musical performances.

Because Bertini’s mark had the earlier priority date, Apple attempted to use tacking to claim an earlier priority date to an APPLE mark used by Apple Corps. for gramophone records featuring music since August 1968. Apple purchased this mark from the Beatles’ Apple Corps. in 2007. Tacking allows a trademark owner to give a newly modified mark the priority date of its old mark, but only if both marks “create the same, continuing commercial impression so that consumers consider both as the same mark.” The Board found that Apple was entitled to tack back to use the 1968 date of use of the APPLE MUSIC mark and thus had priority over Bertini. The Board accordingly dismissed Bertini’s opposition. Bertini appealed.

The Federal Circuit first addressed the tacking standard in the context of trademark registration. The Court explained that in order to obtain an earlier priority date through tacking, an applicant must show that the old mark was associated with all of the goods and/or services listed in its application as of the proposed earlier priority date. The Court found that Apple failed to meet this burden. As of 1968, the APPLE mark was not associated with the service of “arranging, organizing, conducting, and presenting live musical performances.” Because this service was listed in Apple’s trademark application, the APPLE MUSIC mark application was not entitled to claim priority back to the priority date of the Apple Corps. APPLE mark. The Court noted that Bertini only needed to show priority of use of APPLE JAZZ for any service listed in Apple’s application to succeed in his opposition. Because the Court rejected Apple’s attempt to tack back to the 1968 priority date for all of Apple’s listed services where Apple could only show priority for one service listed in its application, Bertini met this burden. The Court also concluded [...]

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Console Yourself: Patent Owner Bears IPR Estoppel Burden

by | Apr 13, 2023 |

Addressing for the first time the standard and burden of proof for the “reasonably could have raised” requirement for inter partes review (IPR) estoppel to apply, the US Court of Appeals for the Federal Circuit concluded that a patent owner bears the burden of proving that an IPR petitioner is estopped from using invalidity grounds that a skilled searcher conducting a diligent search reasonably could have been expected to discover. Ironburg Inventions Ltd. v. Valve Corp., Case Nos. 21-2296; -2297; 22-1070 (Fed. Cir. Apr. 3, 2023) (Lourie, Stark, JJ.) (Clevenger, J., dissenting).

Ironburg sued Valve for infringing Ironburg’s video game controller patent. Valve responded by filing an IPR petition in 2016. The Patent Trial & Appeal Board partially instituted on three grounds but declined to institute on two other grounds (the Non-Instituted Grounds), as was permitted prior to the Supreme Court’s 2018 decision in SAS Institute Inc. v. Iancu. Valve did not seek remand pursuant to SAS, which would have allowed the Board to consider the Non-Instituted Grounds. In the district court litigation, Valve alleged invalidity based on the Non-Instituted Grounds and grounds Valve learned of from a third party’s IPR filed after Valve filed its IPR (the Non-Petitioned Grounds). Ironburg filed a motion asserting that Valve was estopped, pursuant to 35 U.S.C. § 315(e)(2), from asserting both the Non-Instituted Grounds and the Non-Petitioned Grounds. The district court granted Ironburg’s motion in full, removing all of Valve’s invalidity defenses. After trial, the jury returned a verdict finding that Valve willfully infringed the patent. Valve appealed.

35 U.S.C. § 315(e)(2) precludes an IPR petitioner from asserting invalidity during a district court proceeding based on “any ground that the petitioner raised or reasonably could have raised during that [IPR].” The Federal Circuit first addressed the legal standard needed to meet the “reasonably could have raised” requirement for IPR estoppel. The Court found that the “skilled searcher” standard used by several district courts is appropriate, as opposed to a higher “scorched earth” search standard. The “skilled searcher” standard is consistent with the § 315(e)(2) statutory requirement of discovering prior art references that “reasonably could have been raised.”

The Federal Circuit next addressed which party has the burden to prove what prior art references a skilled searcher reasonably would, or would not, have been expected to discover. The district court placed the burden on Valve, the party challenging the patent’s validity, and determined that Valve did not show how difficult it was to find the Non-Petitioned Grounds that Valve did not initially uncover. The Court noted that the third party that did find the Non-Petitioned Grounds may have used a “scorched earth” search, which would make its discovery of the Non-Petitioned Grounds irrelevant to estoppel. The Court concluded that the patent owner has the burden of proving what a skilled searcher reasonably would have found because the patent holder is looking to benefit from estoppel. The Court explained that this conclusion is consistent with the practice of placing the burden on the party asserting [...]

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It’s All in the Grammar: “A” Still Means “One or More,” but Single Component Must Perform All Claimed Functions

by | Apr 13, 2023 |

The US Court of Appeals for the Federal Circuit affirmed a jury’s noninfringement verdict, finding that the district court correctly interpreted the article “a” and antecedent “said” in the asserted claims to require that a single microprocessor be capable of performing every one of the recited microprocessor functions. Salazar v. AT&T Mobility LLC et al., Case No. 21-2320; -2376 (Fed. Cir. Apr. 5, 2023) (Stoll, Schall, Stark, JJ.)

Joe Salazar owns a patent directed to technology for wireless and wired communication, including command, control and sensing systems for two-way communications. In 2016, Salazar sued HTC, alleging that HTC infringed the patent by selling certain phones that allegedly embodied the asserted claims. A jury returned a verdict finding that HTC did not infringe. In 2019, Salazar sued AT&T, Sprint, T-Mobile and Verizon (collectively, the Telecom Providers) asserting the same patent against the same HTC products. HTC intervened, arguing that the accused products did not infringe. The district court severed HTC and stayed that portion of the case.

At claim construction, the parties disputed limitations that required “a microprocessor for generating, . . . said microprocessor creating . . . , a plurality of parameter sets retrieved by said microprocessor . . . , [and] said microprocessor generating.” The essence of the dispute was “whether the claims require one microprocessor that is capable of performing the recited ‘generating,’ ‘creating,’ ‘retrieving,’ and ‘generating’ functions.” The district court answered the question in the affirmative and construed the term to mean “one or more microprocessors, at least one of which is configured to perform the generating, creating, retrieving, and generating functions.” The district court further reasoned that “at least one microprocessor must satisfy all the functional (and relational) limitations recited for ‘said microprocessor.’” At trial, the jury found that the accused products did not infringe and that the patent was not invalid. Salazar appealed, and the Telecom Providers cross-appealed.

Salazar argued that the district court erred in construing “a” microprocessor and “said” microprocessor and that the court should have interpreted the claim terms to require one or more microprocessors, any one of which may be capable of performing the “generating,” “creating” and “retrieving” functions recited in the claims. Put another way, in Salazar’s view, the correct claim construction would encompass one microprocessor capable of performing one claimed function and another microprocessor capable of performing a different claimed function, even if no single microprocessor could perform all of the recited functions.

The Federal Circuit rejected Salazar’s argument. Generally, the indefinite article “a” means “one or more” in open-ended claims containing the transitional phrase “comprising.” An exception to the general rule arises where the language of the claims themselves, the specification or the prosecution history necessitates a departure from the rule. The Court found that while the claim term “a microprocessor” does not require that there be only one microprocessor, the subsequent limitations referring to “said microprocessor” require that at least one microprocessor be capable of performing each of the claimed functions. The Court further explained that [...]

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Press Pause: De Novo Review Not Always Required for Obviousness

by | Apr 6, 2023 |

A divided panel of the US Court of Appeals for the Federal Circuit affirmed the Patent Trial & Appeal Board’s finding that certain challenged claims were nonobvious after applying the substantial evidence test to resolve a dispute regarding the scope and content of the prior art that the Board had resolved as a purely factual question. Roku, Inc. v. Universal Elec’s, Inc., Case No. 2022-1058 (Fed. Cir. Mar. 31, 2023) (Reyna, Stoll, JJ.) (Newman, J., dissenting). In her dissent, Judge Newman stated that even though the issue on appeal related to an underlying factual finding, the ultimate issue of obviousness remains a question of law that requires de novo review.

Universal Electronics owns a patent directed to a universal control engine (within a universal remote) that allows for communication between a “controlling device” (i.e., remote) and an “intended target appliance” (e.g., TV, DVD player). The universal control engine uses different communication methods “according to the optimal method of communication for each target appliance and command,” such as Consumer Electronic Control (CEC) commands or infrared (IR) commands.

The Federal Circuit majority first noted that the disposition of the appeal rested on a single, narrow factual issue: whether the prior art’s list of command codes that are formatted to be transmitted via different communication methods is the same as the list of different communication methods recited in the challenged claims.

The panel majority began by recognizing two relevant standards of review to be used when resolving an obviousness inquiry. First, the Federal Circuit noted that it reviews “underlying factual findings” for “substantial evidence.” Substantial evidence review considers whether a “reasonable fact finder could have arrived at the [Board’s] decision.” The Court specified that the underlying findings of fact relevant to an obviousness inquiry include the Graham factors, which comprise “the scope and content of the prior art,” among others. Next, the Court acknowledged that “[t]he ultimate question of obviousness is a legal question that it reviews de novo.”

The panel majority noted that both Roku and Universal persuasively argued their positions related to the scope and content of the prior art, that “the factual dispute . . . was highly contested and closely decided,” and that substantial evidence supported the Board’s finding. On that basis, the Federal Circuit affirmed the Board’s holding that Roku failed to show that the challenged claims were obvious. The Court declined to perform de novo review of the ultimate question of obviousness, reasoning that because Roku only raised factual questions on appeal (i.e., whether the prior art taught a particular claim element), the Court only needed to consider whether the Board’s determination on that issue was supported by substantial evidence.

In her dissent, Judge Newman disagreed with the majority decision to abstain from a de novo review of obviousness notwithstanding the majority’s conclusion that the underlying findings of fact were supported by substantial evidence. Judge Newman argued that both forms of review are appropriate—and required—in cases such as this. In her de novo review, Judge Newman concluded [...]

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Disclaiming Claim Scope: Could the Patentee Have Anticipated This?

by | Apr 6, 2023 |

In the most recent decision in the Apple/VirnetX saga, the US Court of Appeals for the Federal Circuit affirmed a remand ruling from the Patent Trial & Appeal Board finding the challenged claims of VirnetX’s patents unpatentable. VirnetX Inc. v. Mangrove Partners Master Fund, Ltd., Case No. 2020-2271 (Fed. Cir. Mar. 30, 2023) (Moore, C.J.; Hughes, Stark, JJ.) (nonprecedential).

VirnetX owns two patents relating to a “secure mechanism for communicating over the internet.” The patents relate to a system in which a DNS module “intercepts . . . and determines whether [a] request is for a secure site.” The system creates a VPN if the proxy determines that the request is for a secure site. If the proxy determines that the request is not for a secure site, it forwards the request to a conventional DNS.

Mangrove, Apple and Black Swamp (collectively, Mangrove) petitioned for inter partes review (IPR) challenging various claims of the patents. The Board found that all the challenged claims were unpatentable as anticipated by Kiuchi or obvious in view of Kiuchi and other references. VirnetX appealed to the Federal Circuit (Mangrove Appeal). In that appeal, the Federal Circuit determined that, contrary to the Board’s finding, when VirnetX distinguished Aventail during reexamination of one of the patents, VirnetX disclaimed “a system in which a client computer communicates with an intermediate server via a singular, point-to-point connection.” As a consequence of the prosecution disclaimer, the Court found that the claims “require[s] direct communication between the client and target computers.” The Court vacated the Board’s decision and remanded the case for the Board to determine further factual questions regarding Kiuchi because “substantial evidence does not support the Board’s finding that the C-HTTP name server of Kiuchi performs the functions of the claimed DNS proxy module.”

Following the Mangrove Appeal, the Board again found that Kiuchi—the only prior art reference at issue in the present appeal—discloses a “secure network” for the transfer of patient information in a hospital setting and teaches a “direct-communication VPN between the client and target.” As a result, the Board concluded that Kiuchi anticipates all the challenged claims. VirnetX again appealed.

The Federal Circuit first addressed the Board’s conclusion that “Kiuchi teaches a direct-communication VPN and is therefore within the scope of the claims of VirnetX’s … patent, and not an indirect-communication VPN, which would have brought Kiuchi within the scope of VirnetX’s disclaimer.” The Court agreed with the Board that “Kiuchi discloses direct communication that satisfies the claimed VPN.” Specifically, “Kiuchi’s user agent does not communicate with the client-side proxy using a singular, point-to-point connection because the user agent addresses the desired endpoint, and the VPN provides the required message routing for the user agent to receive a response from the desired endpoint.” Moreover, the Court reasoned that Kiuchi’s proxy servers forward data packets and that Kiuchi teaches “the ability to address data to a particular computer,” consistent with the scope of the claims.

Next, the Federal Circuit addressed the Board’s [...]

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