Federal Circuit Issues Opinion After Apple Challenged PTAB Decision

On Friday, the Federal Circuit issued an opinion in Apple’s two consolidated appeals challenging the Patent Trial and Appeal Board’s (PTAB) decision “that certain claims of (appellee) Voip-Pal.com, Inc.’s patents were not invalid for obviousness.” The Federal Circuit vacated the Board’s determination that the overlapping claims are not invalid as obvious and remands to the Board to dismiss those claims as moot, affirmed the Board’s non-obviousness determinations for the remaining claims, and affirmed the Board’s sanctions.

The two consolidated appeals were heard before Chief Judge Prost and Circuit Judges Reyna and Hughes; Circuit Judge Reyna issued the court’s opinion. The Federal Circuit stated, “we find no error in the Board’s non-obviousness determinations or in its sanctions rulings. We vacate and remand the Board’s final written decisions as to nineteen claims on mootness grounds. We affirm as to the remaining claims.”

Voip-Pal owns U.S. Patent Nos. 8,542,815 (the ’815 patent) and 9,179,005 (the ’005 patent), which describe “voice over IP communications and methods and apparatus for routing and billing.” Voip-Pal sued Apple in February 2016 for infringing the patents-in-suit. Apple was sued again in 2020 for purportedly infringing a similar patent.

Apple petitioned for an inter partes review (IPR) in June 2016 for some claims of the asserted patents and argued the “claims were obvious over the combination of U.S. Patent No. 7,486,684 B2 (Chu ’684) and U.S. Patent No. 8,036,366 (Chu ’366).” Apple allegedly “relied” on the Chu patents for infrastructure, among other things. The PTAB panel found “all claims to be not invalid as obvious over Chu ’684 and Chu ’366,” and that Apple did not support its claims sufficiently. 

Apple pointed to the Federal Circuit’s “recent ineligibility determination” in Voip-Pal’s suit against Twitter, which “renders the instant appeals moot.” In the Twitter suit, the Federal Circuit agreed with the district court’s determination that representative claims of the same patents were ineligible and denied Voip-Pal’s request for a rehearing. The Federal Circuit agreed that the overlapping claims are moot in these appeals and vacated in part the Board’s decision as it pertained to the overlapping claims.

As for the non overlapping claims, Apple alleged that the obviousness question is moot and “Apple faces no liability for infringing these claims.” Apple added that Voip-Pal is also precluded from asserting these non overlapping claims “because they are ‘essentially the same’ as the claims held patent ineligible in the Twitter appeal.” However, the Federal Circuit disagreed with Apple’s arguments for claim preclusion stating the issue is not moot for the non overlapping claims. 

Next the Federal Circuit addressed the Board’s sanction, which Apple claimed violated due process rights and the Administrative Procedures Act (APA) in its decision and erroneously said claims were not invalid for obviousness. The Federal Circuit determined that Apple’s due process rights were not violated, stating “Apple did not identify any property interest in the course of its due process arguments.” The court did not find that “the Board’s sanctions orders deprived Apple of due process.”

In response to Apple’s argument that the Board “exceeded its authority” when issuing a sanction, the Federal Circuit stated that the Board is not limited to the sanctions listed in that particular section and did not commit an APA violation. The Federal Circuit found the sanction “a reasonable course of action.” The Federal Circuit also stated that the Board did not err in determining that Apple did not have motivation to combine Chu ’684 with Chu ’366. Instead it “held Apple to the proper evidentiary standard.” 

Apple is represented by Gibson, Dunn & Crutcher LLP and Erise IP. VOIP-Pal is represented by Hudnell Law. The intervenor, Andrei Iancu, Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, is represented by the Civil Division of the Department of Justice and the Office of the Solicitor for the United States Patent and Trademark Office.