No. 2016-____
`
`
`
`IN THE
`UNITED STATES COURT OF APPEALS
`FOR THE FEDERAL CIRCUIT
`_______________
`
`IN RE VIRNETX INC.,
`Petitioner.
`_______________
`On Petition for a Writ of Mandamus
`to the United States Patent and Trademark Office,
`Patent Trial and Appeal Board in
`Nos. IPR2015-01046 & IPR2015-01047.
`_______________
`
`
`
`PETITIONER VIRNETX’S MOTION FOR A STAY
`PENDING THE CONSIDERATION OF
`ITS PETITION FOR A WRIT OF MANDAMUS AND
`A MOTION FOR AN INTERIM ADMINISTRATIVE STAY
`_______________
`
`
`
` Naveen Modi
`Joseph E. Palys
`Igor V. Timofeyev
`PAUL HASTINGS LLP
`875 15th St., N.W.
`Washington, D.C. 20005
`(202) 551-1700
`
`Counsel for Petitioner VirnetX Inc.
`
`
`
`March 4, 2016
`
`
`

`
`
`
`TABLE OF CONTENTS
`
`
`
`
`
`TABLE OF AUTHORITIES .................................................................................... ii 
`
`BACKGROUND ....................................................................................................... 5 
`
`ARGUMENT ............................................................................................................. 8 
`
`I.  VirnetX Has a Reasonable Likelihood of Prevailing on the
`Merits ......................................................................................................... 9 
`
`II.  VirnetX Will Suffer Irreparable Injury Absent a Stay ............................ 14 
`
`III.  A Modest Continuance Will Not Prejudice the Petitioners
`Below ....................................................................................................... 17 
`
`IV.  The Public Interest Favors a Stay To Conserve Agency
`Resources ................................................................................................. 19 
`
`CONCLUSION ........................................................................................................ 20 
`
`
`
`i
`
`

`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`Cases
`Allen v. Siebert,
`552 U.S. 3 (2007) ................................................................................................ 12
`
`Artuz v. Bennett,
`531 U.S. 4 (2000) ................................................................................................ 12
`
`Austin v. Dep’t of Commerce,
`742 F.2d 1417 (Fed. Cir. 1984) .......................................................................... 12
`
`Davis v. Michigan Dep’t of Treasury,
`489 U.S. 803 (1989) ............................................................................................ 13
`
`Eli Lilly & Co. v. Actavis Elizabeth LLC,
`No. 2010-1500, 2010 WL 3374123 (Fed. Cir. Aug. 26, 2010) ............................ 9
`
`In re EMC Corp.,
`677 F.3d 1351 (Fed. Cir. 2012) .................................................................... 16, 17
`
`Loughrin v. United States,
`134 S. Ct. 2384 (2014) ........................................................................................ 11
`
`Mohammed v. Reno,
`309 F.3d 95 (2d Cir. 2002) ................................................................................... 8
`
`In re Nintendo Co., Ltd.,
`544 F. App’x 934 (Fed. Cir. 2013) ..................................................................... 14
`
`Pace v. DiGuglielmo,
`544 U.S. 408 (2005) ............................................................................................ 12
`
`Standard Havens Prods., Inc. v. Gencor Indus., Inc.,
`897 F.2d 511 (Fed. Cir. 1990) .............................................................................. 8
`
`In re TS Tech USA Corp.,
`551 F.3d 1315 (Fed. Cir. 2008) .......................................................................... 16
`
`In re United States,
`877 F.2d 1568 (Fed. Cir. 1989) .......................................................................... 14
`
`ii
`
`

`
`Util. Air Regulatory Grp. v. EPA,
`134 S. Ct. 2427 (2014) ........................................................................................ 11
`
`VirnetX, Inc. v. Cisco Sys., Inc.,
`767 F.3d 1308 (Fed. Cir. 2014) .......................................................................... 18
`
`In re Volkswagen of Am., Inc.,
`545 F.3d 304 (5th Cir. 2008) .............................................................................. 16
`
`Adminstrative Decisions
`Coal. for Affordable Drugs X LLC v. Anacor Pharms., Inc.,
`IPR2015-01776, Paper 25 (P.T.A.B. Feb. 23, 2016) ............................................ 3
`
`Microsoft Corp. v. Proxyconn, Inc.,
`IPR2013-00109, Paper 15 (P.T.A.B. Feb. 25, 2013) .......................................... 20
`
`Target Corp. v. Destination Maternity Corp.,
`IPR2014-00508, Paper 31 (P.T.A.B. Feb. 12, 2015) .......................................... 19
`
`TD Bank, N.A., v. Global Session Holdings SRL,
`IPR2014-01350, Paper 11 (P.T.A.B. Dec. 22, 2014) ........................................... 3
`
`Unified Patents, Inc. v. Personalized Media Commc’ns, LLC,
`IPR2015-00521, Paper 14 (P.T.A.B. June 8, 2015) ........................................... 19
`
`Statutes
`
`28 U.S.C. § 2244(d)(2)............................................................................................. 12
`
`35 U.S.C. § 311 ........................................................................................................ 13
`
`35 U.S.C. § 315(b) ............................................................................................passim
`
`35 U.S.C. § 315(c) ............................................................................................passim
`
`35 U.S.C. § 316(a)(11) ............................................................................................. 19
`
`Rules and Regulations
`
`37 C.F.R. § 42.100(c) ............................................................................................... 19
`
`Fed. R. App. P. 21(b)(6) ...................................................................................... 4, 17
`
`iii
`
`

`
`Other Authorities
`
`154 Cong. Rec. S9988 (daily ed. Sept. 27, 2008) .................................................... 12
`
`House Judiciary Transcript for Mark-Up of H.R. 1249,
`The America Invents Act (Apr. 14, 2011) .......................................................... 13
`
`H.R. Rep. No. 112-98, reprinted in 2011 U.S.C.C.A.N. 67 (2011) ........................ 13
`
`iv
`
`

`
`Petitioner VirnetX Inc. (“VirnetX”) respectfully files this motion for a stay
`
`of the proceedings in the Patent Trial and Appeal Board (“the Board”) pending this
`
`Court’s consideration of VirnetX’s Petition for a Writ of Mandamus (“Petition for
`
`Mandamus”), which is being filed contemporaneously. Given the impending
`
`deadline of March 8, 2016 for VirnetX to file its Patent Owner’s Responses in the
`
`proceedings below, VirnetX also respectfully requests that this Court grant a short
`
`interim administrative stay to enable a panel of this Court to consider VirnetX’s
`
`stay request.
`
`As VirnetX’s Petition for Mandamus explains, the Board’s improper joinder
`
`of Apple Inc.’s (“Apple’s”) time-barred inter partes review petitions to existing
`
`proceedings before the Board is squarely contrary to the statute governing inter
`
`partes review proceedings, 35 U.S.C. § 315(b)-(c). The statute prohibits the Board
`
`from instituting an inter partes review proceeding if the petition requesting
`
`institution is filed more than one year after the petitioner was served with a
`
`complaint alleging infringement of the patent. 35 U.S.C. § 315(b). Here, Apple’s
`
`inter partes petitions were unquestionably time-barred, as they were filed over five
`
`years after VirnetX had served Apple with an infringement complaint. While the
`
`Board relied on a statutory exception from the time bar, that exception applies only
`
`to “a request for joinder”—not to a petition. In turn, the joinder provision,
`
`35 U.S.C. § 315(c), expressly reaffirms the statutory command that a party seeking
`
`1
`
`

`
`joinder must have “properly file[d] a petition” in the first place—a requirement
`
`that Congress specifically intended to encompass timely filing.
`
`VirnetX contests the joinder of Apple’s two time-barred petitions to the
`
`existing inter partes review proceedings brought by Mangrove Partners Master
`
`Fund, Ltd. (“Mangrove”). These proceedings challenge the validity of VirnetX’s
`
`U.S. Patent No. 6,502,135 (“the ’135 patent”) and U.S. Patent No. 7,490,151 (“the
`
`’151 patent”). Apple’s petitions are unquestionably untimely under the governing
`
`statute, 35 U.S.C. § 315(b)—a fact that neither Apple nor the Board contests.
`
`Nonetheless, on January 25, 2016, the Board instituted the proceedings on Apple’s
`
`time-barred petitions, and joined them to the Mangrove proceedings. Exs. 1 & 2.1
`
`The deadline for VirnetX’s Patent Owner Responses to the petitions filed by
`
`all three entities in the proceedings below—Mangrove, Apple, and Black
`
`Swamp—is Tuesday, March 8, 2016. On February 25, 2016, with the response
`
`date approaching, VirnetX requested that the Board stay the proceedings pending
`
`its ruling on VirnetX’s request for rehearing, filed on February 8, 2016. VirnetX
`
`also requested that, in the event the Board denied its request for rehearing, the
`
`Board stay the proceedings to enable VirnetX to seek a writ of mandamus from
`
`1 On February 4, 2016, the Board also instituted inter partes review based on a
`petition filed by Black Swamp IP, LLC in IPR2016-00167, challenging the ’151
`patent, and joined that petition with IPR2015-01047. Black Swamp was formed as
`a corporate entity six days before Mangrove filed its petitions.
`
`2
`
`

`
`this Court. The next day, on February 26, 2016, the Board denied VirnetX’s
`
`request for rehearing. Exs. 3 & 4. On March 1, 2016, the Board dismissed
`
`VirnetX’s request for a stay pending rehearing as moot and denied VirnetX’s
`
`request to stay the proceedings pending a petition for mandamus to this Court. The
`
`Board opined that VirnetX “has failed to identify a sufficient rationale as to why a
`
`stay is necessary based on the facts of this particular proceeding.” Ex. 5. The
`
`Board’s own rules, however, require a party to seek the Board’s authorization via
`
`an email before submitting any motion not previously authorized, such as a stay
`
`motion, and further prohibit a party (under threat of sanctions) from presenting any
`
`substantive argument in such an email request. See Coal. for Affordable Drugs X
`
`LLC v. Anacor Pharms., Inc., IPR2015-01776, Paper 25 at 5 (P.T.A.B. Feb. 23,
`
`2016) (a “party seeking to file a non-preauthorized motion should request a
`
`conference to obtain authorization to file the motion” and “an email requesting a
`
`conference call . . . may not contain substantive argument”); TD Bank, N.A., v.
`
`Global Session Holdings SRL, IPR2014-01350, Paper 11 at 11 (P.T.A.B. Dec. 22,
`
`2014) (emails to the Board containing arguments “may result in sanctions”).
`
`The harm to VirnetX of having to defend its patents against a party whose
`
`presence in an agency proceeding is ultra vires is irreparable. This is not a harm
`
`that could be remedied upon the proceeding’s conclusion, even if this Court
`
`eventually reverses the Board’s patently erroneous statutory interpretation on final
`
`3
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`

`
`appeal. By then, the harm would have been done, and it would be next to
`
`impossible to disentangle Apple’s participation in the inter partes proceedings. By
`
`contrast, none of the petitioners below would be prejudiced. The Federal Rules
`
`prioritize mandamus proceedings over ordinary appeals, see Fed. R. App. P.
`
`21(b)(6), and this Court considers mandamus petitions in an expedited fashion.
`
`Mangrove and Black Swamp will not suffer any prejudice. VirnetX has not
`
`asserted the patents at issue against those entities, nor, to VirnetX’s knowledge,
`
`does either entity practice either the ’135 or the ’151 patent. Nor can Apple
`
`credibly claim prejudice, given that it has challenged the validity of these patents
`
`several times and has no right to participate in the proceedings below in the first
`
`place. Further, a stay would be in the public interest because it would prevent the
`
`expenditure of the Board’s resources on proceedings that do not accord with the
`
`applicable statutory command.
`
`For these reasons, the Court should order a stay of the Board proceedings
`
`while the Court considers VirnetX’s Petition for Mandamus. Given the impending
`
`deadline of March 8, 2016, for VirnetX’s Patent Owner Responses, this Court
`
`should also grant a short interim administrative stay so a full panel can consider
`
`VirnetX’s stay motion.
`
`As required by Federal Circuit Rule 18(c)(1), VirnetX informed counsel for
`
`Apple, Mangrove, and Black Swamp that it will be filing this motion, including a
`
`4
`
`

`
`request for an interim administrative stay. Counsel for VirnetX has previously
`
`conferred with counsel for Apple, Mangrove, and Black Swamp regarding its
`
`request for a stay pending this Court’s consideration of the mandamus petition, and
`
`they indicated that they oppose the stay request.
`
`BACKGROUND2
`The inter partes review petitions at issue here are just the latest in Apple’s
`
`long-running attempt to avoid the statutory time bar of 35 U.S.C. § 315(b). Apple
`
`filed its first two inter partes review petitions against the ’135 patent on June 12,
`
`2013, but the Board denied both these petitions because Apple was time-barred
`
`under 35 U.S.C. § 315(b). See Pet’n Ex. 3 at 5; Pet’n Ex. 4 at 5.3 Apple filed an
`
`inter partes review petition against the ’151 patent on July 1, 2013, which was also
`
`denied as time-barred. Pet’n Ex. 5 at 5. After the Board dismissed Apple’s own
`
`inter partes review petitions, Apple had its proxy—an entity called RPX
`
`Corporation (“RPX”)—file new petitions. After VirnetX uncovered evidence that
`
`Apple was a real party-in-interest, see Petn. Ex. 9 at 5-7; Petn. Ex. 10 at 5-7; Petn.
`
`Ex. 11 at 6-8, the Board found that RPX was acting as a proxy for Apple, and that
`
`Apple was a real party-in-interest for all of RPX’s petitions. The Board therefore
`
`2 VirnetX’s Petition for Mandamus provides a more comprehensive factual and
`procedural background.
`3 “Petn. Ex.” refers to exhibits to VirnetX’s Petition for Mandamus, which is being
`filed concurrently.
`
`5
`
`

`
`dismissed these petitions given Apple’s time-barred status. Petn. Ex. 12 at 3, 10;
`
`Petn. Ex. 13 at 3, 10; Petn. Ex. 14 at 3, 10. Apple then sought unsuccessfully to
`
`join in Microsoft’s inter partes review petition, before that petition was dismissed
`
`based on VirnetX and Microsoft’s joint motion. Petn. Ex. 15; Petn. Ex. 16 at 2-3.
`
`On April 14, 2015, Mangrove—a hedge fund entity—filed inter partes
`
`review petitions challenging the ’135 and the ’151 patents. VirnetX has never
`
`served Mangrove with a complaint alleging infringement of either patent, nor, to
`
`VirnetX’s knowledge, does Mangrove practice VirnetX’s patents. On October 7,
`
`2015, the Board instituted the proceedings based on Mangrove’s petitions. Petn.
`
`Ex. 17; Petn. Ex. 18. VirnetX uncovered evidence that linked Mangrove to RPX—
`
`the entity that had filed the prior inter partes review petitions where Apple was an
`
`undisclosed real party-in-interest—and sought discovery into Mangrove’s ties to
`
`RPX. Specifically, VirnetX uncovered evidence that: (1) with respect to any
`
`proceedings before the Board, Mangrove’s backup counsel has worked only on
`
`these two inter partes review proceedings and a set of inter partes reviews
`
`explicitly filed by RPX; (2) during the pendency of the Mangrove proceedings,
`
`Mangrove has steadily gained increasing equity, into the millions, in RPX; and (3)
`
`RPX’s own public documents stated that it was seeking partnerships with financial
`
`companies like Mangrove, a hedge fund. See Petn. Ex. 39 at 7-9, 12-14. VirnetX
`
`also noted “the relationship between RPX and Apple” that was established in the
`
`6
`
`

`
`RPX proceedings, and “[t]he pattern of filing of companies that are coming out of
`
`nowhere, challenging these patents [belonging to VirnetX], yet they have no
`
`relationship other than relationships with other companies that seem to have
`
`statutory bar issues.” Id. at 13. The Board, however, did not permit VirnetX even
`
`to file a motion for additional discovery into these issues. See Petn. Ex. 40.
`
`On October 26, 2015, shortly after the Board had instituted review in the
`
`Mangrove proceedings—and over five years after VirnetX first served Apple with
`
`a complaint alleging infringement of the patents at issue—Apple filed new inter
`
`partes review petitions challenging the ’135 and ’151 patents. Apple also filed
`
`requests for joinder, seeking to be joined in the two Mangrove proceedings. Apple
`
`claimed that the grounds and declarations submitted with its petitions were the
`
`same as those in the Mangrove petitions. Petn. Ex. 41 at 4; Petn. Ex. 42 at 4. Both
`
`petitions, however, also raised new issues and introduced new evidence. See Petn.
`
`Ex. 43 at 39-42; Petn. Ex. 44 at 54-59. As an example, the petitions introduced
`
`new arguments as to the alleged public availability of references at-issue in the
`
`Mangrove proceedings, including arguments based on a declaration from a
`
`declarant not present in the Mangrove proceedings. See id. VirnetX challenged
`
`Apple’s joinder requests, arguing that because of Apple’s time-barred status under
`
`section 315(b), such joinder was impermissible. See Petn. Ex. 45 at 1-3; Petn.
`
`Ex. 46 at 1-3. The Board, however, adopted a contorted view of the applicable
`
`7
`
`

`
`statute and granted Apple’s joinder requests. Petn. Ex. 47 at 4; Petn. Ex. 48 at 4.
`
`The Board subsequently denied VirnetX’s request for rehearing of those decisions,
`
`and then denied VirnetX’s request for a stay pending this Court’s consideration of
`
`its mandamus petition. See Ex. 5.
`
`ARGUMENT
`
`A stay is warranted here. This Court applies four factors in deciding
`
`whether to grant a stay pending appeal: “(1) whether the stay applicant has made a
`
`strong showing that he is likely to succeed on the merits; (2) whether the applicant
`
`will be irreparably injured absent a stay; (3) whether issuance of the stay will
`
`substantially injure the other parties interested in the proceeding; and (4) where the
`
`public interest lies.” Standard Havens Prods., Inc. v. Gencor Indus., Inc., 897 F.2d
`
`511, 512 (Fed. Cir. 1990) (internal quotation marks omitted). “Each factor,
`
`however, need not be given equal weight.” Id. “When harm to applicant is great
`
`enough, a court will not require a strong showing that applicant is likely to succeed
`
`on the merits.” Id. at 513 (internal quotation marks omitted). “Simply stated,
`
`more of one excuse less of the other.” Mohammed v. Reno, 309 F.3d 95, 101 (2d
`
`Cir. 2002) (internal quotation marks omitted).
`
`All of these factors strongly favor a stay of the proceedings before the
`
`Board.
`
`8
`
`

`
`I.
`
`VirnetX Has a Reasonable Likelihood of Prevailing on the Merits
`
`VirnetX respectfully submits that it has at least a reasonable likelihood of
`
`prevailing on the merits of its Petition. The “likelihood of success” prong is
`
`satisfied where the movant can “demonstrate a substantial case on the merits
`
`provided that the harm factors militate in its favor.” Eli Lilly & Co. v. Actavis
`
`Elizabeth LLC, No. 2010-1500, 2010 WL 3374123, at *1 (Fed. Cir. Aug. 26, 2010)
`
`(citing Hilton v. Braunskill, 481 U.S. 770, 778 (1987)). The Board’s joinder to a
`
`proceeding of a party that is expressly time-barred under the controlling statute
`
`presents an exceptional circumstance warranting immediate relief. VirnetX’s
`
`Petition for Mandamus demonstrates that the Board’s decisions permitting joinder
`
`of the time-barred Apple at least demonstrates “a substantial case on the merits” as
`
`to whether the Board misread the statute and impermissibly augmented its
`
`authority.
`
`As explained more fully in VirnetX’s Petition for Mandamus, the America
`
`Invents Act imposes a mandatory time bar on the institution of inter partes review
`
`proceedings:
`
`An inter partes review may not be instituted if the
`petition requesting the proceeding is filed more than 1
`year after the date on which the petitioner, real party in
`interest, or privy of the petitioner is served with a
`complaint alleging infringement of the patent.
`
`9
`
`

`
`35 U.S.C. § 315(b) (emphasis added). Section 315(b) also provides an exception
`
`from this time bar, but only for “a request for joinder”:
`
`The time limitation set forth in the preceding sentence
`shall not apply to a request for joinder under subsection
`(c).
`
`Id. Thus, under the statutory scheme, if a party “properly files a petition” within
`
`the one-year deadline specified in section 315(b), and then files “a request for
`
`joinder under subsection (c)” after the one-year deadline, section 315(b) would
`
`permit the Board to grant the joinder request. 35 U.S.C. § 315(b)-(c) (emphasis
`
`added). The requirement that the petition be “properly filed” is the predicate
`
`requirement for the consideration of both the petition and the joinder request, and it
`
`encompasses the requirement that the petition would have been filed within the
`
`one-year period authorized under section 315(b).
`
`The Board has acknowledged that Apple’s petitions in IPR2016-00062 and
`
`IPR2016-00063 were time-barred under section 315(b) because they were filed
`
`long after the one-year period from the service of VirnetX’s complaint alleging
`
`infringement has run its course. In fact, the Board has previously denied as time-
`
`barred Apple’s petitions challenging claims of the ’135 and the ’151 patents. The
`
`Board, however, interpreted the last sentence of section 315(b), which states that
`
`“[t]he time limit … shall not apply to a request for joinder,” 35 U.S.C. § 315(b), to
`
`10
`
`

`
`permit the filing and institution of a time-barred petition, if the party requests
`
`joinder.
`
`The Board treated the terms “petition” and “request for joinder” as
`
`interchangeable. But there is no basis for such a reading. Section 315(b), as well
`
`as the overall statute, carefully distinguishes between the terms. When Congress
`
`uses a particular statutory term, it does so advisedly, and an agency impermissibly
`
`departs from the statute when it disregards Congress’ intentional use of different
`
`statutory terms. See Loughrin v. United States, 134 S. Ct. 2384, 2390 (2014). The
`
`Board’s interpretation of section 315(b), which effectively re-writes the statute, is
`
`plainly erroneous. Util. Air Regulatory Grp. v. EPA, 134 S. Ct. 2427, 2445 (2014).
`
`The Board’s interpretation ignores altogether section 315(c)’s requirement
`
`that the petition with respect to which joinder is sought be “properly file[d].”
`
`35 U.S.C. § 315 (c) (emphasis added). The legislative history of section 315(c)
`
`makes clear both that the term “properly file[d]” was meant to encompass the
`
`timing requirement of section 315(b), and that section 315(b)’s timing exemption
`
`was not intended to alter that requirement. The statute’s sponsor, Senator Kyl,
`
`explained that the phrase “properly filed” had been interpreted three times in
`
`Supreme Court cases, where “[t]he gist of these decisions is that a petition is
`
`properly filed when it is delivered and accepted in compliance with applicable
`
`rules governing filings, though particular claims within filings be barred on other
`
`11
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`

`
`procedural grounds, and that time deadlines for filing petitions must be complied
`
`with in all cases.” 154 Cong. Rec. S9988 (daily ed. Sept. 27, 2008) (statement of
`
`Sen. Kyl) (emphasis added).
`
`The Supreme Court decisions on which Congress relied when using the term
`
`“properly file[d]” in section 315(c) examined the meaning of 28 U.S.C.
`
`§ 2244(d)(2), which tolled the limitation period for federal habeas upon “a properly
`
`filed application for State post-conviction collateral review.” As the Supreme
`
`Court explained, “an application is ‘properly filed’ when its delivery and
`
`acceptance are in compliance with the applicable laws and rules governing
`
`filings,” including “the time limits upon its delivery.” Artuz v. Bennett, 531 U.S. 4,
`
`8 (2000) (footnote omitted) (emphasis added); see also Pace v. DiGuglielmo, 544
`
`U.S. 408, 413 (2005); Allen v. Siebert, 552 U.S. 3, 6-7 (2007) (reaffirming that
`
`“time limits generally establish ‘conditions to filing’”). Given the Supreme
`
`Court’s construction of the term “properly filed,” Congress’ deliberate use of that
`
`term in section 315(c) demonstrates that it meant to encompass “the time deadlines
`
`for filing petitions” prescribed by 35 U.S.C. § 315(b). Austin v. Dep’t of
`
`Commerce, 742 F.2d 1417, 1419 (Fed. Cir. 1984) (“The legislative history makes
`
`clear that prior judicial interpretations of the term … should be applied ….”).
`
`The overall statutory scheme further supports reading the term “properly
`
`file[d]” in section 315(c) as encompassing section 315(b)’s one-year bar with
`
`12
`
`

`
`respect to petitions. See Davis v. Michigan Dep’t of Treasury, 489 U.S. 803, 809
`
`(1989). Section 315(c) requires compliance with the requirements of section 311.
`
`See 35 U.S.C. § 315(c) (requiring that the person seeking joinder “properly file[] a
`
`petition under section 311”). Section 311, in turn, requires compliance with the
`
`other provisions of Title 35, Chapter 31 of the U.S. Code, which include section
`
`315(b)’s timeliness requirement. See 35 U.S.C. § 311 (“Subject to the provisions
`
`of this chapter, a person who is not the owner of a patent may file with the Office a
`
`petition to institute an inter partes review of the patent.”) (emphasis added).
`
`The Board’s interpretation also upends the careful balance that Congress
`
`achieved between “the need to encourage [the] use [of the inter partes review] and
`
`preventing the serial harassment of patent holders.” House Judiciary Transcript for
`
`Mark-Up of H.R. 1249, The America Invents Act, at 72 (Apr. 14, 2011) (statement
`
`of Cong. Smith). Congress wanted to ensure that the inter partes review
`
`proceedings “are not to be used as tools for harassment … through repeated
`
`litigation and administrative attaches on the validity of a patent. Doing so would
`
`frustrate the purpose of the section as providing quick and cost effective
`
`alternatives to litigation.” H.R. Rep. No. 112-98, at 48 (2011), reprinted in 2011
`
`U.S.C.C.A.N. 67, 78. The one-year time bar provision of section 315(b) protects
`
`patent owners from belated challenges to the validity of the patents they had
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`13
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`asserted in a federal court against potential infringers—such as the challenges that
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`the time-barred Apple brought in the proceedings below.
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`Because the Board’s construction is plainly incorrect, given the statute’s
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`text, history, and purpose, VirnetX is likely to succeed on its mandamus petition.
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`Indeed, this Court has granted mandamus in similar situations, where parties have
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`been wrongfully joined or where a governmental entity acted outside of its
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`authority. See, e.g., In re United States, 877 F.2d 1568, 1571 (Fed. Cir. 1989)
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`(granting mandamus where Article I court acted outside of the authority granted by
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`the “plain language” of the statute, as confirmed by the legislative history); In re
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`Nintendo Co., Ltd., 544 F. App’x 934 (Fed. Cir. 2013) (granting mandamus where
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`parties were not “properly joined”).
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`II. VirnetX Will Suffer Irreparable Injury Absent a Stay
`Absent a stay of the Board proceedings, VirnetX would suffer irreparable
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`injury from having to participate in inter partes review proceedings that include a
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`party that is statutorily barred from that proceeding.
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`The Board’s erroneous joinder decision confers upon Mangrove, Apple, and
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`Black Swamp advantages they would not otherwise have had, in ways that will
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`harm VirnetX and cannot be undone if Apple’s joinder is reversed only after the
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`proceeding is over. These include ability to access documentary or expert
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`evidence submitted by the other petitioner; to benefit from additional invalidity
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`theories raised by the other petitioner; to utilize arguments and positions of other
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`petitioners that may not be public knowledge to avoid an adverse decision; to
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`obtain relief faster because the other proceeding is further advanced; and to pool
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`resources (or share costs). For example, once VirnetX files its Patent Owner’s
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`Responses, presently due on March 8, 2016, Apple will be able to work together
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`with the other petitioners (Mangrove and Black Swamp) on how to respond.
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`Apple has already assumed a leading role in the proceedings below, and
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`(despite VirnetX’s request) the Board has placed no real limits on the extent of
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`Apple’s involvement. While VirnetX cannot fully know the extent of Apple’s
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`direct involvement in the formulation of petitioners’ strategy (and the preparation
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`of the actual filings), the outward signs demonstrate that Apple is in the driver’s
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`seat. Apple’s counsel has taken over communications between petitioners and
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`VirnetX, and has prepared and defended the deposition of petitioners’ expert—
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`even though that expert was originally engaged by Mangrove. See Petn. Ex. 49;
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`Petn. Ex. 50. Given Mangrove and Black Swamp’s apparent willingness to let
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`Apple take control, there is little doubt they will continue to follow Apple’s lead as
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`proceedings before the Board continue.
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`The joinder has already prejudiced VirnetX in concrete ways. VirnetX now
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`has to defend itself against new issues and evidence introduced by Apple, which
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`were not presented by Mangrove in the original proceedings. Petn. Ex. 43 at 39-
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`42; Petn. Ex. 44 at 54-59; supra at 7-8. VirnetX is also being systematically
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`disadvantaged because it is limited to a single response of a constrained length
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`while Apple, Mangrove, and Black Swamp submitted three separate petitions each
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`presenting at least some unique issues. Thus, VirnetX has to prepare its Patent
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`Owner’s Responses to issues raised in three separate petitions,4 yet the Board
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`denied VirnetX’s request for extra pages in order to be able to fully address all
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`these issues. See Ex. 5.
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`This Court has repeatedly recognized that the erroneous refusal to transfer
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`venue warrants immediate correction in the form of mandamus because a petitioner
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`has no other means of relief. See, e.g., In re TS Tech USA Corp., 551 F.3d 1315,
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`1322 (Fed. Cir. 2008) (citing In re Volkswagen of Am., Inc., 545 F.3d 304, 318-19
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`(5th Cir. 2008)); see also In re EMC Corp., 677 F.3d 1351, 1355 (Fed. Cir. 2012).
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`The harm from failure to transfer “will already have been done by the time the case
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`is tried and appealed, and the prejudice suffered cannot be put back in the bottle.”
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`In re Volkswagen, 545 F.3d at 318-19.
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`Likewise, here, the harm from an improper party’s directing the case will be
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`done (and cannot be effectively undone) before VirnetX is able to appeal that
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`4 In IPR2015-01046/IRP2016-00062, VirnetX has to respond to the petitions filed
`by Mangrove
`and Apple, while
`as
`in
`IPR2015-01047/IPR2016-
`00063/IPR2016/00167, VirnetX has to respond to the petitions filed by Mangrove,
`Apple, and Black Swamp.
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`joinder. Nor can this harm be disregarded because an inter partes proceeding
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`based on the Mangrove petitions may nevertheless continue. It will be difficult, if
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`not impossible, to untangle the prejudice from participation of one party among
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`several joined parties in an inter partes proceeding, once the proceeding is
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`underway or concluded. Cf. In re EMC Corp., 677 F.3d at 1355 (“a defendant
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`would not have an adequate remedy for an improper failure to transfer or sever the
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`case by way of an appeal from an adverse final judgment because the defendant
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`would be unable to demonstrate that it would have won the case had it been tried in
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`a convenient venue” (internal quotation marks, citation, and alteration omitted)).
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`Without a stay, VirnetX will incur irreparable harm.
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`III. A Modest Continuance Will Not Prejudice the Petitioners Below
`By contrast, none of the petitioners in the proceedings before the Board will
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`be substantially prejudiced by a stay.
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`First, as the Federal Rules of Appellate Procedure require, the mandamus
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`petition will have precedence over ordinary civil appeals, so any stay is likely to be
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`of short duration. See Fed. R. App. P. 21(b)(6) (“The proceeding must be given
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`preference over ordinary civil cases.”).
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`Second, Apple cannot credibly claim prejudice given multiple opportunities
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`to challenge VirnetX’s patents at issue. As discussed above