Wille, it was no accident VHC this dropped today. A lot of good people I now in the legal world were waiting on yesterdays Teva SCOTUS argument and it was a good one.
The transcript I read on Teva and the blunt questions from multiple different Justices (who usually hate each others political leanings) seems to suggest that SCOTUS is not at all happy with appeals courts who basically are ignoring lower courts decisions and the process itself.
David Boies in VRNG en banc said it best, (I paraphrase) if we are going to ignore the district court, the district court judge, the jury, the experts, the verdict and the 8 USPTO examiners we may as well just send the patent application and prior art to CAFC so they can make a decision on it before we file patents. It certainly would streamline the process!!!!
My theory is - much of this started because of the ambiguity SCOTUS had on Alice, CAFC wanted a clear delineation and did not get it - so their job is hard and EVERYONE appeals EVERYTHING. So they are basically rejecting everything, regardless of trial evidence and using the de novo standard to #$%$ on SCOTUS. Even larger tech is concerned about this as it gets more industry press.
The crazy thing in this case is Apple tried to patent this technology themselves and were denied because of SAIC \ VHC prior art. They even were sanctioned for not allowing the engineer on the denied patents to answer questions like "were you aware of Virnetx prior art when you filed the patent? C'mon man!!!!
Problem is CAF are using de novo review and not considering the trial evidence as it was heard by the Jury. CAFC ARE CLEARLY BEYOND their mandate and SCOTUS is taking notice. CAFC are not supposed to re-try cases, not to mention ignore fact as questions of law. Not only are they doing that but now they are making technical decisions without the assistance of technical experts!
Ground control, we may have a problem - don't worry I have CAFC judge that says gravity is not real.
For those interested on SCOTUS perspective you should read the Teva case.
SCOTUS made is very clear that if deference is not given to a lower court then why bother even having a lower court? This is a similar argument made by Boies for the en banc when he said if the decisions stands then SCOTUS will definitely have an issue with it and pandoras box is opened. Paraphrase - We should just send the patents and prior art directly to CAFC for their review before we even bother a district trial, district judge, jury or PTO for that matter. This argument may have legs. Here is what SCOTUS said and there are tons of examples in todays transcript ....
20 JUSTICE KENNEDY: When they do have expert
21 testimony, you want it to say that that's it doesn't
22 involve any findings of fact to which the court of
23 appeals must defer.
JUSTICE SCALIA: So what do you want the
16 district court to do? Do you want the district court,
17 nonetheless, even though what it finds is not going to
18 be given any deference, do you want them to listen to
20 MR. PHILLIPS: Of course.
JUSTICE GINSBURG: The same way it's
12 different from obviousness because the other side said,
13 well, why shouldn't the fact law division for claim
14 construction be the same as it is for obviousness.
15 MR. PHILLIPS: Right. And the reason is, is
16 that obviousness carries with it a whole slew of
17 additional factual questions that ultimately will
18 predominate whereas and also begins with the
19 proposition this is what the claim means. All right.
20 So you start with that as a given, which is a pure
21 question of law.
22 The obviousness issue at that point can turn
23 on the success of the of the product, can turn on how
24 the market responded to it. Those are lots and lots of
25 pure factual issues that this Court had already recognized in John Deere Graham v. John Deere.
Unfortunately this has no bearing on VRNG unless we become a SCOTUS case. However, it is interesting to see VERY partisan SCOTUS members (they basically hate each-others political leanings) agree and realize what is going on in the lower courts is just legally WRONG.
While SCOTUS are a VERY smart bunch they are not known for their agility :-) HOWEVER, it looks like they may set a new speed record in seeing how "they screwed the pooch" on IP protection. The CAFC courts are now out of control after less than a year - so lets hope this spurs more en banc review!.
The silence from SCOTUS, on the ambiguity in Alice vs CLS - in terms of what is obvious or not - created chaos across appellate courts. Good USPTO patents are being rejected without detailed analysis by the courts because they are lazy and feel a mandate (without due process). Big companies (including Apple \ Google) are noticing. Even the USPTO is upset.
This hurts our companies \ country because ITC standards are now MUCH higher (due to Alice's impact in the appeals court). Alll these domestic LARGE TECH need solid IP here before they get it overseas (for obvious bureaucratic reasons). Read my other posts on this issue, we are talking about maybe a TRILLION USD of lost IP vs maybe 5B of new legal business - it is NOT a wash!!!! .... and big tech knows when they are getting the shaft - even when they cause it. No one is safe now.
The literal quote from the Jones Case says it all "a judge cannot substitute his judgment for one already made by a jury on a FINDING OF FACT".
For VRNG one lazy judge tossed it to Alice without appropriate analysis, but for the other? He ruled WITHOUT evidence to prove obviousness? You still need FINDINGS OF FACT For WHY A JURY \ COURT WAS WRONG - he gave none.
No evidence of facts mean there was no mistake, judgement should remain intact. The bar is set very high at CAFC and that was Chen's dissent - it is good to see diverse SCOTUS judges agree.
On 10/2 VRNG filed for a dismal with prejudice of the Belkin case. We should see a notice of the settlement soon. I have no idea of the financial details but Belkin are a leader in Consumer Home Monitoring and their Home Automation business in the DIY market is growing quickly. Positive news.
sorry also to be fair they were critical of VHC experts method for the smallest salable unit because he did not consider the $29 mac OS upgrade costs in the SSU. They also did not have an issue with the Royalty Rate of 1% based on the 6 licensing examples - it ends up basically being a FRAND license.
Yes the parts of the trial that were affirmed are done, the parts that were remanded will be heard again, the ones that are reversed are out. So Apple are still in violation of multiple patents and claims - that was affirmed however the damages were vacated because CAFC felt the judge did not explain the market rule properly to the Jury - this PART of the trial must be done again.
Correct. Facetime DOES STILL infringe on the 211 and 504 patents. The first argument on anonymity is going to be heard again with the new claims construction but the second argument will not - the CAFC court agreed with VHC. Apple using NAT (Network Address Translation) still create a "direct communications link" - we only need one not both - multiple claims are still infringed.
Not only for Enterprise computing!. The VPN on demand features were made part of the the operating systems network stack in IOS, they cannot just remove it. Why? Because they opened it up for 3rd party developers that needed VPN functionality using an API. So all the people developing not only Enterprise Software BUT ALSO Apps for the App store MAY use VPN on demand features in call back systems. What are "call back" systems - things like users usage, access to credentials, access to shared data (used a lot in gaming) access to shared storage, virtual wallets, getting unique server generated tokens for tokenization, accessing encryption keys in PKI applications and the list goes on and on. The only way to remain secure is to encrypt your data via a VPN. The question know is how many people use it? I hope Apple are asked to provide that number, I think most IOS programmers do because its easier to just use Apples API than write another VPN client from scratch.
Please see my post - "FT stills infringes the 504 and 211 - just not all claims" for a detailed breakdown.
The claims construction changes MIGHT impact the first argument on anonymity if Apple do prove to a lower court they DO NOT USE anonymity. This is ironic because if Apple did implement (it is not) without it, it would mean that Facetime is not secure or anonymous by Apples own definition - a strange argument to make.
However even if they do win the first argument on anonymity they still loose the second argument and are infringing on the claim of Direct Communication Link. CAFC said in their ruling yesterday that Network Address translation NAT used by Apples infrastructure routers does not mean they no longer have a direct communication link. So the second argument is still valid for VHC and admissible in court (this went against Apple) and so are any claims on the 504 and 211 that support the direct communication link.
Direct communication is one of the claims - if we get it it will not matter about the new claims construction for the first argument, get my point? VHC just need one and the claims construction language did not change on the second argument thus making it still valid for the lower court.
Not correct - CAFC did not argue the RR they agreed wit the 1% its the basis thats needs to be determined. They also DID NOT say a $29 upgrade costs should be that base only that it was not considered by VHC. They are leaving that to the lower court. VHC may need to introduce market comparisons from other security companies that provide software NAC's and with management servers. Enterprise security is actually very expensive software.
Anyway my point was on the Patnets not the damages. The 504 and 211 re not being tossed out, only ONE aspect needs to be reconsidered by the lower court and not both, as I stated below even if Apple do win on the first argument how will they win on the second when their own experts and the CAFC court agree with VHC. This is a direct quote from CFAC on the 504 and 211 second argument...
"The district court concluded that there was substantial evidence to support the jury’s finding that the NAT routers used by FaceTime do not impede direct communication, VirnetX, 925 F. Supp. 2d at 831, and we agree. As the district court noted, VirnetX’s expert testified that the NAT routers still allow for “end-to-end communication between the two devices,” J.A. 1565, because they merely translate addresses from the public address space to the private address space, but do not terminate the connection. J.A. 1465, 1536–37.
Even Apple’s expert admitted that the connection does not stop at the NAT routers. [THATS A HUGE ISSUE - ITS THEIR EXPERT]. Apple argues that this testimony cannot support a finding of infringement because it is inconsistent with the court’s claim construction that required “direct addressability.” Appellant’s Br. 43–45. But the district court considered this argument and disagreed, noting that its claim construction expressly provided that “routers, firewalls, and similar servers . . . do not impede ‘direct’ communication,” and VirnetX presented evidence that NATs operate like routers or firewalls. VirnetX, 925 F. Supp. 2d at 831.
Thus, we do not think the district court erred in finding that there was substantial evidence on which the jury
could have relied to reach its finding of infringement on this element. [CAFC JUST GAVE VHC THEIR CLAIM AND WE ONLY NEED ONE NOT BOTH].
People really need to start reading the legal briefs. There is more good news for longs on FT. I put my commnets in [ ] the rest is from the court brief...
’504 and ’211 Patents Apple argues that there was not substantial evidence to support the jury’s verdict that its FaceTime servers infringe the asserted claims of the ’504 and ’211 patents.
[FIRST ARGUMENT] Apple insists that FaceTime does not infringe the “secure communication link” claim term for two reasons: first,because when properly construed it requires anonymity, which the FaceTime servers do not provide, and [SECOND ARGUMENT] second, because they do not provide “direct” communication, as required by the district court’s claim construction [THIS IS STILL A PROBLEM FOR APPLE - REMEMBER WE ONLY NEED ONE CLAIM NOT BOTH].
With respect to the first argument, we have now construed the disputed claim term so as to require anonymity.
See supra at 13. However, the jury was not presented with the question of whether FaceTime infringes
the asserted claims under a construction requiring anonymity. Thus, we remand for further proceedings to
determine whether Apple’s FaceTime servers provide anonymity. [APPLE WINS THAT ONE] but...
With respect to the second argument, Apple argues that FaceTime servers do not provide “direct” communication because the communications are addressed to a NAT, rather than to the receiving device. Appellant’s Br. 43. The district court concluded that there was substantial evidence to support the jury’s finding that the NAT routers used by FaceTime do not impede direct communication, VirnetX, 925 F. Supp. 2d at 831, and we agree. As the district court noted, VirnetX’s expert testified that the NAT routers still allow for “end-to-end communication between the two devices,” J.A. 1565, because they merely translate addresses from the public address space to the private address space, but do not terminate the connection. J.A. 1465, 1536–37.
See my next post.
The USCAFC affirmed the jury's finding that all 4 of VirnetX's patents are valid, confirmed the jury's finding of infringement of VPN on Demand under many of the asserted claims of the '135 and '151 patents, and confirmed the district's court's decision to allow evidence concerning the VirnetX's licenses and royalty rates in connection with the determination of damages.
That is not a legal argument or valid analysis and many people would step in before that happens. Please provide a valid argument how Apple will overcome multiple AFFIRMED infringing claims on the 135 patent? How will Apple defend willful infringement in the second case? We still know there will be damages VHC just need a better argument for the entire market value damages argument. Apple also will need to provide something. I bet VHC use Samsung case which would put the PPU at around $6.
On the RR. The 1% RR is basically a FRAND license and will most likely be argued as such, please read pages 32, 33 and 34 and make your case against the 1%.
Read pages 32,33 and 34 and tell me your legal analysis on royalty rate. The market is reacting to the damages now going to be lower. However the damages will still be very significant for a tiny company BUT WHAT MATTERS to APPLE is the royalty rate of 1% is HUGE and that all their products ARE STILL infringing the 135. Not good for future suits because VHC now knows what will hold up at CAFC.
People are missing it, the royalty rate is GOOD - see pages 32, 33 and 34 of the decision. This means CAFC are upholding a 1% royalty and cited case law to say why it makes sense in this case.
"With those principles in mind, we conclude that the district court here did not abuse its discretion in permitting
Weinstein to rely on the six challenged licenses. To begin with, four of those licenses did indeed relate to the
actual patents-in-suit, while the others were drawn to related technology. Moreover, all of the other differences
that Apple complains of were presented to the jury, allowing the jury to fully evaluate the relevance of the licenses. See J.A. 1600, 1650, 1678–82. No more is required in these circumstances (a lot of case law cited and then....Thus, we do not believe the district court abused its discretion by permitting Weinstein’s testimony regarding the proper royalty rate based on these allegedly comparable licenses."