VirnetX Loses Latest Patent Battle at CAFC

“We are disappointed and disagree with the Federal Circuit’s decisions in light of its past rulings on these same patents.” – Kendall Larsen, VirnetX

VirnetXThe U.S. Court of Appeals for the Federal Circuit on Thursday upheld two Patent Trial and Appeal Board (PTAB) decisions finding VirnetX’s patent claims unpatentable in inter partes review (IPR) challenges brought by Apple, Inc. and Mangrove Partners.

The dispute relates to VirnetX’s U.S. Patent Nos. 6,502,135 and 7,490,151, which are directed to a “secure mechanism for communicating over the internet.” Mangrove Partners challenged several claims of the ‘135 patent at the PTAB, alleging they were anticipated by a 1996 article authored by Kiuchi and Kaihara, entitled “C-HTTP – The Development of a Secure, Closed HTTP-based Network on the Internet,” and that another claim was obvious based on Kiuchi in view of Mockapetris, Request for Comment 1034, “Domain Names – Concepts and Facilities.”

Mangrove also petitioned for IPR of the ‘151 patent, arguing the challenged claims were anticipated by Kiuchi and obvious based on (a) Kiuchi in view of RFC 1034, (b) Kiuchi in view of a 1996 reference by Rescorla and Schiffman, entitled “The Secure Hypertext Transfer Protocol” (“Rescorla”), and (c) Kiuchi in view of RFC 1034 and in further view of Rescorla. Apple was joined to both proceedings and Black Swamp IP was joined to the ‘151 IPR.

On appeal, the CAFC found that substantial evidence supported the PTAB’s finding that the Kiuchi reference teaches a “direct-communication VPN and is therefore within the scope of the claims of VirnetX’s ’135 patent, and not an indirect-communication VPN,” which would have brought Kiuchi within the scope of a disclaimer made by VirnetX during reexamination of the ‘135 patent that “disclaimed any virtual private networks and virtual private network communication links that are not direct” in order to distinguish another prior art reference.

As to the ‘151 patent, VirnetX argued on appeal that “Kiuchi does not teach a DNS proxy module capable of performing the determining, forwarding, and creating steps of the challenged claims,” but the Federal Circuit adopted the PTAB’s view “Kiuchi teaches a domain name server (‘DNS’) module and, therefore, anticipates claims 13 and 14 of the ’151 patent.” While the CAFC had previously vacated and remanded a Board decision that found Kiuchi’s C-HTTP name server alone taught the determining, forwarding, and creating limitations of claim 13, in the present appeal it said substantial evidence supported the PTAB’s adoption of the petitioners’ argument Kiuchi’s “client-side proxy, working with the C-HTTP name server, acts as the claimed DNS proxy module.”

VirnetX also challenged the PTAB’s decision to join Black Swamp to the IPR of the ‘151 patent, and asked the CAFC to vacate and remand based on Facebook, Inc. v. Windy City Innovations, LLC. The court said that VirnetX forfeited this issue when it failed to raise it in a previous appeal of a PTAB decision on the ‘151 patent.

The decision puts a 2020 jury award of $502 million to VirnetX at risk. In a statement, VirnetX CEO and President Kendall Larsen said: “We are disappointed and disagree with the Federal Circuit’s decisions in light of its past rulings on these same patents. We are evaluating all of our available options, including potentially seeking rehearing or certiorari review.”

The CAFC separately issued an opinion today dismissing VirnetX’s appeal of the U.S District Court for the Eastern District of Texas as moot in light of its Thursday ruling.


Image Source: Deposit Photos
Image ID: 159708306
Author: lightsource


Warning & Disclaimer: The pages, articles and comments on do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of

Join the Discussion

7 comments so far.

  • [Avatar for Anonymous]
    April 3, 2023 03:08 pm

    The PTAB is nothing more than a jury nullification movement, run amok. The PTAB should never trump a jury verdict, where an infringer already tried and failed to invalidate.

    Exercising one’s constitutional right to invent must not require that the inventor waive his right to trial by jury.

    There’s no doubt this is going to SCOTUS. The PTAB has made inventor access to a jury evaporate, along with a $500M jury verdict.

    I support juries over the PTAB, and so should everyone who still values the Constitution.

  • [Avatar for Anon]
    April 3, 2023 12:44 pm


    I did not ask how you feel about my question – I asked what your experience IS.

    Your refusal to answer is an answer, albeit, one that does not reflect well on you.

    (and yes, I am not surprised)

  • [Avatar for Addy]
    April 3, 2023 09:24 am

    I suspect my experience doesn’t really matter given your expressed opinion of my comment, “You toss about legal terms of art in such a self-confident manner that it is apparent that you are not understanding the legal terrain here.”

    I will agree that my comment was flippant and not intended to be helpful; it was in response to the previous flippant comments.

  • [Avatar for Anon]
    April 1, 2023 09:40 am


    I have to ask – do you have any legal training whatsoever?

    You toss about legal terms of art in such a self-confident manner that it is apparent that you are not understanding the legal terrain here.

    Not the first time.
    And certainly not helpful.

  • [Avatar for Addy]
    March 31, 2023 03:30 pm

    Another overly broad functional claim set falls prey to prior art. Color me shocked.
    It’s weird to think that a big money defendant would go look for such prior art.

  • [Avatar for Pro Se]
    Pro Se
    March 31, 2023 11:32 am

    Pro Se will repeat Pro Say:

    The fix is in.


  • [Avatar for Pro Say]
    Pro Say
    March 31, 2023 11:30 am

    The fix is in.