Apple Opponent Admits Ex Parte Contacts, Says They Weren't Improper
A patent holder at odds with Apple Inc. over internet calling technology has fired back at the tech giant's jaw-dropping allegation that it secretly lobbied the U.S. Patent and Trademark Office during an ongoing patent challenge. Apple said Voip-Pal prevailed on the Patent Trial and Appeal Board to substitute three new administrative judges into its case, who then upheld Voip-Pal's patent as valid. In opposing Apple's motion for sanctions Jan. 12, Bellevue, Washington-based Voip-Pal acknowledged that it had six ex parte contacts with PTO leadership last summer while Apple's inter partes review was pending. But it said none of the contact was improper. The company and its new attorney also point out that Apple knew about some of the contact as far back as May, but didn't complain until after losing the final written decision in November. "To grant petitioner a remedy now would reward petitioner for waiting and doing nothing," Kevin Malek of Malek Moss wrote in Voip-Pal's Jan. 12 opposition. Malek is a former Kirkland & Ellis and Quinn Emanuel Urquhart & Sullivan attorney whom Voip-Pal said is now its head IP litigator. The company also has been represented by Knobbe Martens and Alverson Taylor Mortensen & Sanders. The publicly traded company did make one concession Jan. 12: It acknowledged that Voip-Pal management knew about and worked with former CEO Thomas Sawyer on his letters to PTAB Chief Judge David Ruschke, Commerce Secretary Wilbur Ross, PTO interim leader Joseph Matal and others. The company corrected a September press release that said Sawyer had acted independently of the board. "Patent owner’s participation ensured that the technical merits [of the IPR] were not discussed," Malek wrote. He does not clarify whether the company's lawyers were involved, as Apple alleges and Sawyer's most recent letter indicates. Voip-Pal sued Apple, AT&T, Verizon and Twitter for infringing patents related to voice-over-internet protocol, demanding $2.8 billion in damages from Apple alone. Apple has filed four IPRs challenging the patents, while AT&T and Unified Patents also filed challenges. A three-judge panel of the PTAB instituted proceedings in two of Apple's IPRs, saying it appeared more likely than not the patents are invalid. The other challenges were turned away. Sawyer responded with the letters to Ruschke, Matal and Ross complaining at length about PTAB bias against patent owners generally and by the three judges in Voip-Pal's cases specifically. In particular his first letter, sent May 1, pointed out that PTAB Judge Stacy Margolies represented Apple in private practice in 2011; Judge Barbara Benoit previously worked at a law firm, Fish & Richardson, that represents Apple; and that Judge Lynne Pettigrew had worked at AT&T. The letter was copied to President Donald Trump, U.S. Supreme Court Chief Justice John Roberts and Margolies, Benoit and Pettigrew, among others. By June the PTAB had assigned three new judges to Apple's IPRs without explanation. Sawyer continued to write to Ruschke and Ross, arguing that new slate of judges wasn't enough. "It appears that only a judgment in the patent owner's favor or a dismissal of the action would make the patent owner whole," Sawyer wrote on July 11. The letters also quote liberally from various IP publications that have raised concerns about the high rate of cancellations— sometimes known as "kill rates"—in PTAB proceedings. Apple complains that neither Voip-Pal, its attorneys nor the PTAB disclosed any of these communications. By substituting new judges, the PTAB imbued them with a "reciprocal bias" against Apple, the company alleges. It's demanding that the PTAB enter judgment for Apple or start over with a new trial. In his opposition, Malek acknowledges the ex parte contact, but said there was nothing improper about it. PTAB rules bar ex parte contact over "substantive issues," but permit "reference" to a pending case "in support of a general proposition" such as systemic problems. That's what Voip-Pal did, Malek wrote. "All of the Sawyer letters illustrated systemic concerns about potential unfairness and bias of the inter partes review system," he wrote. The letters "scrupulously avoid discussion of all 'substantive issues' (prior art, nonobviousness or antedating)." Malek pointed out that Sawyer also copied his May 1 and Oct. 23 letters to U.S. District Chief Judge Gloria Navarro of Nevada, who's overseeing the Apple-Voip patent infringement lawsuits. Unlike the PTAB, her clerk posted Sawyer's letters to the docket, so Apple has been on notice of at least some of the contacts since May. "If [Apple] truly believed the Sawyer letters had impacted this proceeding, it could have (and would have) done something" before the PTAB ruled on the merits in November, Malek wrote. He added that there's no evidence the substitute judges received or read Sawyer's letters. Apple's claim that the correspondence creates an appearance of bias is "an unsupported and patronizing view that denigrates the competence and independence of the board," he wrote. It was Voip-Pal's new arguments and evidence, submitted after the institution of decision, that carried the day on the final written decision, Malek writes. Apple has until Jan. 26 to file its reply. Last month the PTAB placed all of the Sawyer letters in the evidentiary record and stayed the deadline for the parties to request rehearing.
