United States Court of Appeals
`for the Federal Circuit
`______________________
`
`VIRNETX INC.,
`Appellant
`
`v.
`
`APPLE INC., CISCO SYSTEMS, INC.,
`Appellees
`______________________
`
`2017-1591, 2017-1592, 2017-1593
`______________________
`
`Appeals from the United States Patent and Trademark
`Office, Patent Trial and Appeal Board in Nos. 95/001,788,
`95/001,789, 95/001,856.
`______________________
`
`Decided: August 1, 2019
`______________________
`
`STEPHEN BLAKE KINNAIRD, Paul Hastings LLP, Wash-
`ington, DC, argued for appellant. Also represented by
`NAVEEN MODI, JOSEPH PALYS, IGOR VICTOR TIMOFEYEV,
`MICHAEL WOLFE, DANIEL ZEILBERGER.
`
` WILLIAM F. LEE, Wilmer Cutler Pickering Hale and
`Dorr LLP, Boston, MA, argued for appellee Apple Inc. Also
`represented by REBECCA A. BACT, MARK CHRISTOPHER
`FLEMING, LAUREN B. FLETCHER, DOMINIC E. MASSA;
`BRITTANY BLUEITT AMADI, Washington, DC; SCOTT
`BORDER, JEFFREY PAUL KUSHAN, Sidley Austin LLP, Wash-
`ington, DC.
`
`

`

`2
`
`VIRNETX INC. v. APPLE INC.
`
`
`
`
` THEODORE M. FOSTER, Haynes & Boone, LLP, Dallas,
`TX, argued for appellee Cisco Systems, Inc. Also repre-
`sented by DAVID L. MCCOMBS, ANDREW S. EHMKE, DEBRA
`JANECE MCCOMAS.
`______________________
`
`Before PROST, Chief Judge, MOORE and REYNA,
`Circuit Judges.
`Opinion for the court filed by Chief Judge PROST.
`Opinion concurring in part and dissenting in part filed by
`Circuit Judge REYNA.
`PROST, Chief Judge.
`Appellant VirnetX Inc. (“VirnetX”) appeals from deci-
`sions of the Patent Trial and Appeal Board (“Board”) re-
`lated to three inter partes reexaminations maintained by
`Apple Inc. (“Apple”) and Cisco Systems, Inc. (“Cisco”). The
`United States Patent and Trademark Office (“PTO”) con-
`cluded that Apple was not barred from maintaining its
`reexams by the estoppel provision of the pre-America In-
`vents Act (“AIA”) version of 35 U.S.C. § 317(b) (2006). The
`Board affirmed the Examiner’s determination that the
`claims of U.S. Patent Nos. 7,418,504 (“the ’504 patent”) and
`7,921,211 (“the ’211 patent”) are unpatentable as antici-
`pated or obvious over the prior art of record. For the rea-
`sons below, we affirm-in-part, vacate-in-part, and remand.
`BACKGROUND
`I
`The ’504 and ’211 patents describe systems and meth-
`ods for “establishing a secure communication link between
`a first computer and a second computer over a computer
`network, such as the Internet.” ’211 patent col. 6 ll. 36–39.
`These systems and methods are “built on top of the existing
`Internet protocol (IP).” Id. at col. 6 ll. 17–20.
`
`

`

`VIRNETX INC. v. APPLE INC.
`
`3
`
`The Internet uses addressing systems for sending data.
`In such systems, physical computers can be identified by a
`unique IP address (e.g., 123.345.6.7). VirnetX Inc. v. Apple
`Inc., 665 F. App’x 880, 882 (Fed. Cir. 2016).
`Each IP address corresponds to a domain name (e.g.,
`www.Yahoo.com). See ’211 patent col. 38 ll. 58–61, col. 39
`ll. 13–14. A user on one computer can enter a domain name
`in a web browser to communicate with another computer
`or server. When the user does so, the computer sends a
`domain name service (“DNS”) request to the domain name
`server for the IP address corresponding to a given domain
`name. Id. at col. 38 l. 58–col. 39 l. 3. The domain name
`server then looks up the IP address of the requested do-
`main name and returns it to the requesting computer. Id.
`at col. 39 ll. 3–7.
`Both VirnetX patents claim systems, methods, and me-
`dia for creating secure communication links via DNS sys-
`tems. For example, claim 1 of the ’211 patent recites:
`1. A system for providing a domain name service
`for establishing a secure communication link, the
`system comprising:
`a domain name service system configured and ar-
`ranged to
`[1] be connected to a communication network,
`[2] store a plurality of domain names and corre-
`sponding network addresses,
`[3] receive a query for a network address, and
`[4] indicate in response to the query whether the
`domain name service system supports establishing
`a secure communication link.
`
`

`

`4
`
`VIRNETX INC. v. APPLE INC.
`
`Independent claims 36 and 60 of the ’211 patent are
`
`directed to a “machine-readable medium” and a “method,”
`respectively. Otherwise, they mirror the requirements of
`claim 1. Independent claims 1, 36, and 60 of the ’504 pa-
`tent are similar to the corresponding independent claims of
`the ’211 patent.
`
`II
`In 2010, VirnetX sued Apple in district court. VirnetX
`alleged infringement of four patents, including the ’504 and
`’211 patents.1 VirnetX asserted claims 1, 2, 5, 16, 21, and
`27 of the ’504 patent and claims 36, 37, 47, and 51 of the
`’211 patent. VirnetX Inc. v. Apple Inc., 925 F. Supp. 2d 816,
`824–25 (E.D. Tex. 2013).
`In October 2011, Apple filed requests for inter partes
`reexamination of the ’504 and ’211 patents with the PTO.
`In Apple’s Reexam Nos. 95/001,788 (“788 case”) and
`95/001,789 (“789 case”) (collectively, “Apple reexams”), Ap-
`ple challenged all claims as anticipated by the Provino ref-
`erence or rendered obvious by Provino in view of other prior
`art.2
`The district court action proceeded to trial in late 2012.
`A jury found the asserted claims infringed and not invalid.
`The jury awarded VirnetX $368 million in damages. Vir-
`netX, 925 F. Supp. 2d at 825. The district court denied Ap-
`ple’s motion for judgment as a matter of law (“JMOL”) or a
`new trial on these issues. Apple appealed.
`On appeal, we affirmed the jury’s finding of no invalid-
`ity for all four patents. VirnetX, Inc. v. Cisco Sys., Inc., 767
`F.3d 1308, 1323–24 (Fed. Cir. 2014) (“VirnetX I”). We also
`
`
`1 VirnetX also alleged that Apple infringed certain
`claims of U.S. Patent Nos. 6,502,135 (“the ’135 patent”) and
`7,490,151 (“the ’151 patent”).
`2 U.S. Patent No. 6,557,037 (“Provino”).
`
`

`

`VIRNETX INC. v. APPLE INC.
`
`5
`
`affirmed the jury’s finding of infringement for many of the
`claims of the two patents not related to the present appeal
`(’135 and ’151 patents).3 Id. at 1320–22. We reversed the
`district court’s construction of the “secure communication
`link” claim term, vacated the related infringement finding
`for the two patents in this appeal (’504 and ’211 patents),
`and vacated the damages award. Id. at 1317–19, 1319,
`1323–24, 1325–34. We then remanded for further proceed-
`ings.4 Id. at 1334.
`Apple did not file a request for rehearing on the inva-
`lidity or infringement issues affirmed in VirnetX I. Our
`mandate issued on December 23, 2014. Apple did not seek
`Supreme Court review. The 90-day period to file a petition
`for a writ of certiorari expired.
`Meanwhile, in the parallel PTO reexamination pro-
`ceedings, the Examiner had found all claims of the ’504 and
`’211 patents unpatentable. The Examiner issued Right of
`Appeal Notices (“RANs”) in May 2014. VirnetX appealed
`the Examiner’s decisions to the Board.
`VirnetX also petitioned the PTO to terminate the Apple
`reexams based on the estoppel provision of § 317(b). The
`PTO denied VirnetX’s petition in June 2015. J.A. 1659–67,
`3138–48.
`In September 2016, the Board affirmed the Examiner’s
`findings that all claims of the ’504 and ’211 patents were
`
`3 We reversed the district court’s conclusion related
`to the doctrine of equivalents for one claim of the ’151 pa-
`tent. See id. at 1322–23.
`4 On remand in 2016, a jury found that Apple in-
`fringed claims 1, 2, 5, and 27 of the ’504 patent and claims
`36, 47, and 51 of the ’211 patent, and awarded damages.
`VirnetX Inc. v. Apple Inc., 324 F. Supp. 3d 836 (E.D. Tex.
`2017). We recently affirmed. See VirnetX Inc. v. Cisco Sys.,
`Inc., No. 2018-1197, 748 F. App’x 332 (Fed. Cir. 2019).
`
`

`

`6
`
`VIRNETX INC. v. APPLE INC.
`
`unpatentable. The Board denied VirnetX’s requests for re-
`hearing.
`After appealing the Board’s decisions in the Apple reex-
`ams to this court, VirnetX moved to remand. It argued that
`this court’s 2014 opinion was a “final decision” on Apple’s
`attempt to prove invalidity under § 317(b). ECF No. 27. In
`June 2017, a motions panel denied the motion and directed
`the parties to address the issue in their merits briefing.
`ECF No. 36.
`
`III
`In December 2011, Cisco also filed a request for inter
`partes reexamination with the PTO.5 Cisco’s Reexam No.
`95/001,856 (“856 case” or “Cisco reexam”) challenged
`claims 1–60 of the ’211 patent based on multiple grounds
`of invalidity. Cisco based several of its arguments on the
`Lendenmann reference.6
`After extensive proceedings, the Examiner issued a
`RAN in January 2015. The RAN rejected claims 36–60 of
`the ’211 patent as either anticipated or obvious. VirnetX
`appealed to the Board. In September 2017, the Board af-
`firmed the Examiner, finding claims 36–54 and 57–60 an-
`ticipated by Lendenmann and claims 55 and 56 obvious
`over Lendenmann and another reference. J.A. 88. VirnetX
`moved for rehearing, which was denied. VirnetX then ap-
`pealed.
`We have jurisdiction under 28 U.S.C. § 1295(a)(4)(A).
`
`
`5
`In 2010, VirnetX also sued Cisco in district court,
`alleging inter alia infringement of claim 1 of the ’211 pa-
`tent.
`6 Rolf Lendenmann, Understanding OSF DCE 1.1
`for AIX and OS/2, IBM International Technical Support
`Organization, pp. 1–45 (Oct. 1995) (“Lendenmann”).
`
`

`

`VIRNETX INC. v. APPLE INC.
`
`7
`
`DISCUSSION
`I
`VirnetX’s appeal proceeds in two parts. First, VirnetX
`
`argues as a threshold matter that Apple was estopped from
`maintaining its reexams under the pre-AIA version of
`35 U.S.C. § 317(b) (2006). Second, VirnetX challenges the
`merits of the Board’s conclusions in both the Apple and
`Cisco reexams that the ’504 and ’211 patents are invalid.
`We address each in turn.
`
`II
`VirnetX contends that Apple’s reexams were barred by
`
`§ 317(b). The PTO refused to terminate Apple’s reexams
`based on the conclusion that the provision did not apply.
`In VirnetX’s view, the PTO’s decision was inconsistent with
`controlling case law, the statutory text, and Congress’s in-
`tent. We agree.
`The applicability of § 317(b) is a question of statutory
`interpretation. See Bettcher Indus., Inc. v. Bunzl USA,
`Inc., 661 F.3d 629, 639, 642–48 (Fed. Cir. 2011). Statutory
`interpretation is an issue of law we review de novo. Un-
`wired Planet, LLC v. Google Inc., 841 F.3d 1376, 1379 (Fed.
`Cir. 2016).
`The Patent Act requires that the PTO terminate a reex-
`amination once there has been a final decision on the pa-
`tent challenger’s invalidity case in federal court. 35 U.S.C.
`§ 317(b) (2006). Specifically, pre-AIA § 317(b) provides:
`Once a final decision has been entered against a
`party in a civil action arising in whole or in part
`under section 1338 of title 28, that the party has not
`sustained its burden of proving the invalidity of any
`patent claim in suit . . . then neither that party nor
`its privies may thereafter request an inter partes
`reexamination of any such patent claim on the ba-
`sis of issues which that party or its privies raised
`
`

`

`8
`
`VIRNETX INC. v. APPLE INC.
`
`or could have raised in such civil action or inter
`partes reexamination proceeding, and an inter
`partes reexamination requested by that party or its
`privies on the basis of such issues may not thereaf-
`ter be maintained by the Office, notwithstanding
`any other provision of this chapter.
`The issue here is very narrow. Apple does not dispute
`the underlying procedural facts relevant to § 317(b), which
`highlight the advanced stage of these proceedings.
`In 2010, Apple was sued for patent infringement. There
`is no dispute that in that “civil action arising . . . under”
`28 U.S.C. § 1338, Apple raised an affirmative defense of in-
`validity on multiple grounds. 35 U.S.C. § 317(b). Thus,
`Apple had the “burden of proving the invalidity” of the as-
`serted claims of both the ’504 and ’211 patents. Id.
`In 2012, Apple presented its invalidity defenses to a
`jury. After a week-long trial, the jury concluded Apple
`failed to sustain its burden of proving the invalidity of any
`asserted claim of the ’504 or ’211 patent.
`In 2013, the district court determined that in light of
`the record at trial, substantial evidence supported the
`jury’s finding. The district court entered final judgment.
`In 2014, Apple pursued an appeal of that decision here.
`Specifically, Apple argued that “the asserted claims are an-
`ticipated by the Kiuchi reference.” VirnetX I, 767 F.3d at
`1323. After considering Apple’s challenges, we affirmed
`the district court’s decision on the issue of invalidity. Id.
`at 1323–24. Apple did not file a request for rehearing. Ap-
`ple elected not to seek Supreme Court review. The 90-day
`period to file a petition for certiorari expired.
`In 2015, VirnetX petitioned the PTO to terminate Ap-
`ple’s pending reexaminations based on the estoppel provi-
`sion of § 317(b). The PTO refused, accepting Apple’s
`argument that there was not yet a final decision on valid-
`ity. J.A. 1661–63.
`
`

`

`VIRNETX INC. v. APPLE INC.
`
`9
`
`On appeal, the sole issue is whether there has been a
`“final decision” entered against Apple that it “has not sus-
`tained its burden of proving” invalidity, triggering estoppel
`of its parallel PTO reexam proceedings.
`Apple does not dispute that since it first raised the is-
`sue in 2010, it has now lost on invalidity before the jury,
`the district court, and this court. Nor does it dispute that
`it allowed the time to petition for certiorari of the validity
`issues in the first appeal to lapse. Instead, Apple takes the
`position that there was no final decision due to a hypothet-
`ical future appeal.
`Apple’s argument proceeds as follows. In VirnetX I, we
`vacated and remanded other issues unrelated to invalidity,
`including infringement and damages. In Apple’s view, af-
`ter those issues are decided on remand and reviewed in a
`second appeal, it may choose to file a petition for certiorari
`of those non-validity issues. In so doing, it may also ask
`the Supreme Court to look at any issues from the first ap-
`peal—including the validity determination.
`Thus, the Court might elect to examine the validity is-
`sues at some point in the future. The Court has the ability
`to consider not only those issues “‘before the court of ap-
`peals upon the second appeal,’” but also the “questions
`raised on the first appeal.” Mercer v. Theriot, 377 U.S. 152,
`153–54 (1964) (per curiam) (quoting Hamilton-Brown Shoe
`Co. v. Wolf Bros. & Co., 240 U.S. 251, 257 (1916)); see also
`Major League Baseball Players Ass’n v. Garvey, 532 U.S.
`504, 508 n.1 (2001) (per curiam) (noting Supreme Court
`has “authority to consider questions determined in earlier
`stages of the litigation where certiorari is sought from the
`most recent of the judgments of the Court of Appeals”). Ac-
`cording to Apple, the decision is only final when there is no
`potential that the Supreme Court might some day examine
`the invalidity issue during a second appeal.
`
`

`

`10
`
`VIRNETX INC. v. APPLE INC.
`
`In response, VirnetX contends there is a “final deci-
`sion” on a party’s attempt to prove invalidity after the
`party fails to petition for certiorari within the 90-day pe-
`riod.
`Two reasons compel the conclusion that there has been
`a final decision on validity in this case. First, our decision
`in Fairchild (Taiwan) Corp. v. Power Integrations, Inc., 854
`F.3d 1364 (Fed. Cir. 2017), controls and holds that there is
`a “final decision” under § 317(b) once the time to file a cer-
`tiorari petition has passed. Second, even if Fairchild did
`not foreclose Apple’s argument, the plain language of the
`statute and its purpose advise against Apple’s definition of
`a “final decision” on the issue of invalidity.
`A
`Since the PTO’s decision in 2016, we have ruled on this
`very issue. Fairchild directly addressed a situation in
`which validity was affirmed but other issues in the case
`were remanded. Fairchild holds that if a finding of no in-
`validity has been affirmed on appeal and remand of other
`issues will not “have any affect” on validity, the decision is
`“final” once the 90-day deadline for a certiorari petition on
`the validity determination has passed. Id. at 1366.
`Fairchild announced this holding despite the fact that
`there is always some “potential” for future Supreme Court
`review if the entire case is taken up. Accordingly, Fairchild
`requires we reject Apple’s position.
`In Fairchild, we began our analysis by restating our
`earlier holding in Bettcher that estoppel “applies when ‘all
`appeals have terminated.’” Id. at 1365 (quoting Bettcher,
`661 F.3d at 646). We then concluded that is “precisely the
`situation here.” Id. Namely, the district court “entered
`judgment against Power Integrations, holding that it failed
`to prove claims 6, 7, 18, and 19 were obvious over [the cited
`prior art]. This court affirmed the holding, and the time to
`
`

`

`VIRNETX INC. v. APPLE INC.
`
`11
`
`petition for a writ of certiorari has passed.” Id. at 1365–66
`(emphasis added).
`As in Fairchild, the district court here entered judg-
`ment against Apple on the issue of invalidity, we affirmed
`the no-invalidity finding on appeal in VirnetX I, and the
`time to file a petition for certiorari on the issue has long
`since passed. Under Fairchild, that constitutes “a final de-
`cision” under § 317(b) with respect to Apple’s failure to
`prove invalidity.
`Resisting this conclusion, Apple argues that if any non-
`invalidity issues remain in the district court case related to
`the patent, then the validity decision cannot be final under
`§ 317(b). Since VirnetX I vacated and remanded other is-
`sues (i.e., infringement and damages) on both patents at
`issue, Apple contends that it waited until all the issues
`with this patent case are decided before bundling it up in a
`petition for certiorari. Consequently, Apple’s position re-
`quires resolution of the entire case—or at least all issues on
`each patent, including infringement, invalidity, and dam-
`ages—before a validity decision is considered “final.”
`Fairchild rejected such arguments under almost iden-
`tical circumstances. There, we had also vacated and re-
`manded other parts of the case for additional proceedings.
`Id. at 1365 (explaining prior appeal upheld obviousness but
`reversed jury’s findings on infringement, and “remanded
`for further proceedings unrelated to the ’972 patent
`claims”). In turn, we rejected the argument that this ren-
`ders the decision not “final” under § 317(b). Id. at 1366.
`We reasoned:
`While it is true that in [the prior appeal] this court
`vacated and remanded for additional proceedings,
`we cannot agree with Power Integrations that this
`renders the decision not “final” for § 317(b) pur-
`poses. Critically, those proceedings are unrelated
`to the ’972 patent. By its terms, § 317(b) is
`
`

`

`12
`
`VIRNETX INC. v. APPLE INC.
`
`concerned with a final decision ‘that the party has
`not sustained its burden of proving the invalidity
`of any patent claim.’ And here, Power Integrations
`does not suggest, nor is there any reason to believe,
`that any unresolved issue on remand would have
`any effect on the now-final ’972 patent validity de-
`terminations.
`Id. (emphasis added) (quoting 35 U.S.C. § 317(b)).
`Likewise, here, Apple does not point to any issue in the
`VirnetX I remand that substantively bears on the finding
`of no invalidity. Nor could it. Indeed, the only difference
`here is that VirnetX I remanded some infringement and
`damages issues related to the ’504 and ’211 patents. But
`Apple fails to explain how any of these unresolved issues
`would “have any effect on the now-final . . . validity deter-
`minations” involving those patents.7 Id. Accordingly,
`Fairchild’s reasoning leaves no doubt that § 317(b) estop-
`pel applies.
`Finally, Apple contends Fairchild cannot control be-
`cause no party in that case expressly argued that the Su-
`preme Court might still take up the invalidity issue on a
`future appeal under Mercer. But Fairchild’s reasoning im-
`plicitly forecloses such an argument. Fairchild concluded
`that “all appeals” had terminated, 854 F.3d at 1365,
`
`
`7 At oral argument, Apple could not point to a single
`example illustrating how an aspect of the infringement re-
`mand might meaningfully affect or implicate the invalidity
`ruling this court affirmed in 2014 in VirnetX I. Instead,
`Apple offered only speculation. Its argument boiled down
`to the general conjecture that the district court “could”
`have a motion to set aside a validity determination even
`after the mandate issues based on arguments made about
`infringement. Oral Argument at 29:20–51, No. 2017-1591,
`http://www.cafc.uscourts. gov/oral-argument-recordings.
`
`

`

`VIRNETX INC. v. APPLE INC.
`
`13
`
`despite the fact that other issues in that case remained
`pending for potential appeal and petition for certiorari. Ap-
`ple can disagree with that conclusion, but that is not a ba-
`sis for ignoring binding authority. We are bound to follow
`the decision of a prior panel, and its reasoning does not
`leave the question open.
`In sum, § 317(b) applies here despite the fact that is-
`sues unrelated to invalidity were remanded.
`The dissent takes the view that Fairchild is inapplica-
`ble. But it relies on reasons that were not material to the
`outcome in Fairchild. In addition, the dissent’s attempt to
`distinguish Fairchild suffers from several additional infir-
`mities.
`According to the dissent, in Fairchild “Power Integra-
`tions did not appeal the court’s favorable ruling on infringe-
`ment because it prevailed on that issue.” Opinion
`concurring in part and dissenting in part (“dissent”) at 4
`(emphasis added). In turn, the dissent leaps to the conclu-
`sion that Power Integrations could not have realistically
`pursued certiorari review of the ’972 patent’s validity be-
`cause it “prevailed” on infringement. Id. In the dissent’s
`view, “once Power Integrations prevailed on infringement,
`the case against it was concluded” and the potential for any
`further Supreme Court review was eliminated. Id. at 4–5.
`There is no support for these statements.
`Fundamentally, infringement and invalidity are sepa-
`rate “issues.” Pandrol USA, LP v. Airboss Ry. Prod., Inc.,
`320 F.3d 1354, 1364 (Fed. Cir. 2003) (“Supreme Court prec-
`edent and our cases make clear that patent infringement
`and patent validity are treated as separate issues.”).
`Fairchild never held that resolving infringement resolves
`invalidity. Indeed, Fairchild was interpreting an estoppel
`statute triggered by a decision on invalidity, not infringe-
`ment.
`
`

`

`14
`
`VIRNETX INC. v. APPLE INC.
`
`Moreover, the dissent’s position unravels in light of the
`procedural posture in Fairchild. Power Integrations did
`not simply argue that it did not infringe the ’972 patent.
`Nor did it merely raise invalidity as an affirmative defense
`to liability. Rather, Power Integrations advanced a sepa-
`rate counterclaim for declaratory judgment that the ’972
`patent was invalid. See Plaintiff’s Fourth Amended An-
`swer and Counterclaims at 23, Power Integrations, Inc. v.
`Fairchild Semiconductor Int’l, Inc. et al, No. 1:08–cv–
`00309–LPS (D. Del. July 7, 2011) (Dkt. No. 409). There-
`fore, to say it “prevailed” and its case “concluded” on that
`issue due to a non-infringement ruling is not correct.
`It is black letter law that non-infringement does not
`moot a counterclaim regarding invalidity. “A party seeking
`a declaratory judgment of invalidity presents a claim inde-
`pendent of the patentee’s charge of infringement.” Cardi-
`nal Chem. Co. v. Morton Int’l, 508 U.S. 83, 96 (1993). Thus,
`“appellate affirmance of a judgment of noninfringement,
`eliminating any apprehension of suit, does not moot a de-
`claratory judgment counterclaim of patent invalidity.”
`MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 132 n.11
`(2007); see also Telcordia Techs., Inc. v. Cisco Sys., Inc., 612
`F.3d 1365, 1375 (Fed. Cir. 2010) (“[T]his court’s affirmance
`of the district court’s non-infringement findings as to the
`’306 patent does not moot Cisco’s invalidity counterclaim
`on cross-appeal.”).
`In addition, the dissent speculates as to why the litigant
`chose not to seek further review. The dissent appears to
`assume that if a party is found not liable for certain ac-
`cused products infringing a patent, as in Fairchild, that
`party no longer has the incentive to challenge the underly-
`ing property right’s validity. Dissent at 5–6. This assump-
`tion fails for several reasons. First, inferring the subjective
`intent of the litigants—either on remand or in petitioning
`for certiorari—is inappropriate. Fairchild never made
`such fact findings. Fairchild never relied on such infer-
`ences either. Put simply, Fairchild did not base its decision
`
`

`

`VIRNETX INC. v. APPLE INC.
`
`15
`
`on speculation as to whether remand would impact a
`party’s subjective “decision” to pursue certiorari review or
`whether its decisions regarding petitioning were “reasona-
`ble,” id. at 5–6. Second, such speculation is irrelevant. The
`controlling inquiry is mandated by statute, which makes
`no mention of a party’s motives for petitioning for certiorari
`review. Third, it is inaccurate. Regardless of a finding of
`no liability on the presently accused products, an accused
`infringer may well have reasons for trying to invalidate the
`patent (e.g., to guarantee its freedom to operate).
`But the dissent suffers from a more fundamental flaw.
`The dissent appears to suggest that in Fairchild, “potential
`future review” by the Supreme Court was not an option.
`Id. at 4. In light of Mercer, there is no basis for that posi-
`tion. Indeed, it runs headlong into the dissent’s own insist-
`ence that the Supreme Court’s discretion to take up
`certiorari review of earlier issues in a case is broad. On the
`one hand, the dissent acknowledges that a “petition for writ
`of certiorari can expose the entire case to review,” id. at 10
`(quoting Christianson v. Colt Indus. Operating Corp., 486
`U.S. 800, 817 (1988)), and the Supreme Court has “juris-
`diction to consider all of the substantial federal questions
`determined in the earlier stages of the litigation,” id. (quot-
`ing Reece v. Georgia, 350 U.S. 85, 87 (1955)). On the other
`hand, the dissent contends that the litigant’s decision in
`Fairchild “all but foreclosed the possibility that the inva-
`lidity issue could be subject to potential future review by
`the Supreme Court.” Id. at 4. A plain reading of Fairchild,
`however, confirms it never presumed to curtail the Su-
`preme Court’s discretion under Mercer to review issues
`raised earlier in a case.
`Finally, the dissent is concerned that the majority opin-
`ion somehow “intrudes on the Supreme Court’s constitu-
`tional prerogative whether to take up the invalidity issue.”
`Id. at 11. It does not. Like Fairchild, our decision concerns
`estoppel of duplicative administrative proceedings before
`the PTO. It has no bearing on the Supreme Court’s
`
`

`

`16
`
`VIRNETX INC. v. APPLE INC.
`
`discretion to accept or reject a petition for certiorari on any
`issue—nor could it.
`In sum, we disagree with the dissent’s efforts to rewrite
`Fairchild. Fairchild speaks for itself. The controlling stat-
`ute is trained on a “final decision” that the party has not
`sustained its “burden of proving the invalidity” of the pa-
`tent claim. Fairchild, 843 F.3d at 1366. As the dissent
`acknowledges, the reasoning at the heart of the Fairchild
`decision is that estoppel applied to the duplicative PTO
`reexam because there was “no suggestion,” dissent at 6,
`that “any unresolved issue on remand would have any ef-
`fect on the now-final patent validity determinations” from
`the district court, Fairchild, 854 F.3d at 1366. That is, the
`remand would have no substantive effect on the validity
`determination. The record is clear that is the same situa-
`tion here.
`
`B
`Even if Fairchild did not control, the statutory text and
`purpose of § 317(b) compels us to reject Apple’s theory that
`the entire case must be resolved. Apple essentially asks us
`to rewrite the statute, triggering estoppel only when there
`is a “final judgment” on all issues in a case.
`But the statute’s text is clear. The statute only re-
`quires “a final decision” on a precise issue—whether the
`party has “sustained its burden of proving the invalidity of
`any patent claim in suit.” 35 U.S.C. § 317(b). The statute
`makes no mention of resolving the entire case. Nor does it
`require resolution of all other issues related to a patent
`(e.g., infringement or damages). Instead, the plain lan-
`guage of the statute demands a party cease duplicative in-
`validity challenges via reexams in the PTO once “a final
`decision” has been reached on an invalidity challenge in a
`civil action.
`This reading of the plain text is further reinforced by
`the statute’s purpose. The statute is intended to protect
`
`

`

`VIRNETX INC. v. APPLE INC.
`
`17
`
`patent holders against “harassment” from duplicative liti-
`gation on the issue of invalidity. See 145 Cong. Rec. 29,276
`(Nov. 9, 1999) (Conference Report on H.R. 1554) (“Subtitle
`F creates a new section 317 which sets forth certain condi-
`tions by which inter partes reexamination is prohibited to
`guard against harassment of a patent holder.”); see also
`Function Media, L.L.C. v. Kappos, 508 F. App’x 953, 955–
`56 (Fed. Cir. 2013) (“This provision existed to prevent du-
`plicative, harassing actions against a patentee. If a defend-
`ant brought an invalidity challenge in a district court
`litigation and was unsuccessful, it is not permitted to bring
`the same challenge in an inter partes reexamination.”).
`Apple concedes that § 317(b) was intended to prevent
`duplicative litigation. Apple’s Br. 40–41. Yet Apple’s posi-
`tion increases the likelihood duplicative litigation will oc-
`cur. If no decision on invalidity is “final” until any
`“prospect of future Supreme Court review” is eliminated,
`Apple’s Br. 36, estoppel will rarely apply. In light of the
`legislative intent, it is doubtful Congress created an estop-
`pel provision that would allow a PTO proceeding to press
`forward even after all appellate deadlines have elapsed
`merely because there is a potential that the Supreme Court
`may one day reconsider the invalidity issue—in many
`cases, years later—while examining the rest of the case.8
`Accordingly, the statutory purpose confirms that “a fi-
`nal decision” triggers estoppel when the invalidity chal-
`lenge is decided on appeal and the time for petitioning for
`certiorari has passed—regardless of the fact review of the
`
`
`8 Moreover, there is no indication that Congress con-
`sidered the type of review contemplated in Mercer as part
`of the definition of a regular appeals process for reaching a
`“final decision” on invalidity. This is of no surprise given
`the statute is trained on the finality of a particular issue,
`rather than finality of the entire case.
`
`

`

`18
`
`VIRNETX INC. v. APPLE INC.
`
`entire case could occur at some point in the future under
`Mercer.
`
`C
`Apple’s remaining arguments against the application
`of § 317(b) here are unpersuasive. Apple first suggests that
`Fairchild is inconsistent with Bettcher. Apple’s Br. 32–33,
`37. In Apple’s view, Bettcher held that § 317(b) is not sat-
`isfied until the Supreme Court can no longer review a case.
`Bettcher never reached such a holding. Bettcher con-
`cerned a different estoppel provision, pre-AIA 35 U.S.C.
`§ 315(c) (2006).9 The question was whether § 315(c) estop-
`pel attaches at a far earlier stage (before any appeal is pur-
`sued). In Bettcher, the district court concluded that
`estoppel barred further civil litigation “as soon as the ex-
`aminer finished the reexamination and the Right of Appeal
`Notice was sent to the patentee”—i.e., before there is even
`an appeal to the Board, let alone an appeal to the Federal
`Circuit. Id. at 636. On appeal, we rejected that conclusion.
`We held that “the estoppel provision of § 315 is triggered
`not when examination is completed but only after all ap-
`peal rights have been exhausted.” Id. at 642–43.
`The panel then rejected the argument that § 317(b)
`somehow showed that § 315(c) estoppel must apply as soon
`as the examiner finishes the reexam. See id. at 643. The
`panel observed that like § 315(