Apple asks appeals court to overturn $502 mln verdict in VPN patent case

Apple asks appeals court to overturn $502 mln verdict in VPN patent case

The Apple logo is seen at an Apple Store in Brooklyn, New York, U.S. October 23, 2020. REUTERS/Brendan McDermid
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  • Judge says Apple brought damages argument too late in VirnetX case
  • Apple could still win if PTO patent-validity ruling stands

(Reuters) – A long-running dispute between Apple Inc and patent licensing company VirnetX Inc over privacy-software technology went back to a U.S. appeals court on Thursday for a panel of judges to hear Apple’s new challenges to a $502 million jury loss in Texas.The U.S. Court of Appeals for the Federal Circuit heard Apple’s request to toss the jury verdict, as well as VirnetX’s appeal of a U.S. Patent Office tribunal decision to cancel its virtual private network (VPN) patents that also would negate the award if it stands.The 12-year fight has included five trials and three trips to the appeals court.Register now for FREE unlimited access to Reuters.comRegister“I’m pretty sure this dispute will never end between these two companies,” Chief U.S. Circuit Judge Kimberly Moore said during Thursday oral arguments.VirnetX sued Apple in 2010, alleging that VPN technology in Apple’s iPhones, iPads and computers infringed its patents. After several trials and appeals, a jury awarded VirnetX $502 million in damages in 2020.Apple’s attorney Bill Lee of Wilmer Cutler Pickering Hale and Dorr argued Thursday that the verdict should be thrown out because the jury’s royalty rate was based on flawed calculations by VirnetX’s damages expert.Lee said there was no evidence that any Apple customers used VirnetX’s patented technology, which is “disabled by default” in Apple’s software, and that the calculation failed to take this into account.But Moore said Apple brought the argument too late, even though it was “very simple and persuasive.””That argument was sitting there to be made as part of your last appeal, and you didn’t make it,” Moore said.Both Lee and VirnetX’s attorney Jeff Lamken of MoloLamken acknowledged that Apple would win the case if Patent Trial and Appeal Board rulings invalidating VirnetX’s patents are upheld. VirnetX asked the Federal Circuit to overturn the PTAB decisions in a separate oral argument Thursday.VirnetX attorney Stephen Kinnaird of Paul Hastings argued that the board misinterpreted the patents.Moore sat on the panels in both cases with Circuit Judges Leonard Stark and Todd Hughes.VirnetX separately won $440 million from Apple on allegations that the tech giant used its internet-security technology in features like FaceTime video calls, which Apple said it has paid.The appeals are VirnetX Inc v. Apple Inc, U.S. Court of Appeals for the Federal Circuit, No. 21-1672 and VirnetX Inc v Mangrove Partners Master Fund Ltd, U.S. Court of Appeals for the Federal Circuit, No. 20-2271.For Apple: Bill Lee of Wilmer Cutler Pickering Hale and DorrFor VirnetX: Jeff Lamken of MoloLamken; Stephen Kinnaird of Paul HastingsRead more:Apple fails to overturn VirnetX patent verdict, could owe over $1.1 billionVirnetX patent win against Apple vacated by U.S. appeals courtRegister now for FREE unlimited access to Reuters.comRegisterOur Standards: The Thomson Reuters Trust Principles.Blake BrittainThomson ReutersBlake Brittain reports on intellectual property law, including patents, trademarks, copyrights and trade secrets. Reach him at [email protected] .

FDA regulation of premium cigars ‘arbitrary and capricious,’ judge finds

FDA regulation of premium cigars ‘arbitrary and capricious,’ judge finds

  • Judge finds agency ignored evidence in deeming premium cigars subject to same law as cigarettes
  • Cigar groups, FDA will submit briefs on remedy

(Reuters) – The U.S. Food and Drug Administration’s decision to regulate premium cigars under the same federal law as other tobacco products like cigarettes was arbitrary and capricious, a federal judge ruled Tuesday.U.S. District Judge Amit Mehta in Washington, D.C., said the agency had ignored relevant data about the health risks of premium cigar use. He asked the FDA and the industry groups challenging the regulations — the Premium Cigar Association and Cigar Rights of America — to submit briefs on whether he should vacate the FDA’s decision or simply remand the matter back to the agency.”The family-owned manufacturers and retailers that make and sell premium cigars have long believed the FDA mishandled its decision to regulate premium cigars,” said Michael Edney of Steptoe & Johnson, a lawyer for the plaintiffs. “We are grateful for the court’s decision and the opportunity for further proceedings in this matter.”Register now for FREE unlimited access to Reuters.comRegisterThe FDA could not immediately be reached for comment.The litigation focuses on the so-called Deeming Rule adopted by the agency in 2016, in which it identified a wide range of tobacco products, including premium cigars, to be subject to its regulatory authority along with cigarettes under the Family Smoking Prevention and Tobacco Control Act.The plaintiffs said that the agency considered, and rejected, a carve-out for premium cigars, both before adopting the final rule and again in 2017 and 2018 when it solicited additional comments.They said FDA rules requiring cigar makers to register their products annually and provide ingredient lists for each product, and requiring all products be submitted for laboratory testing, were impractical for hand-made, “artisan” premium cigars.The industry groups said that, unlike cigarettes and e-cigarettes, premium cigars do not appeal to young people and are not associated with addiction. They cited studies showing that young people are unlikely to use premium cigars, that users of premium cigars are unlikely to smoke them frequently and that infrequent cigar use is not associated with increased mortality.Mehta on Monday agreed that the FDA had not adequately considered the studies cited by the plaintiffs, instead asserting that there was “no evidence” that premium cigars were less harmful without directly addressing them.”Where, as here, an agency speaks in absolute terms that there is no evidence, it acts arbitrarily and capriciously when there is in fact pertinent record evidence and the agency ignores or overlooks it,” the judge wrote.The case is Cigar Association of America v. U.S. Food and Drug Administration, U.S. District Court, District of Columbia, No. 16-cv-01460.For Premium Cigar Association and Cigar Rights of America: Michael Edney of Steptoe & JohnsonFor FDA: Garrett Coyle of the U.S. Department of JusticeRead more:Premium tobacco cos tell judge FDA rules don’t apply to artisan productsMedical associations back FDA in lawsuit over premium cigar rulesRegister now for FREE unlimited access to Reuters.comRegisterReporting By Brendan Pierson in New YorkOur Standards: The Thomson Reuters Trust Principles.Brendan PiersonThomson ReutersBrendan Pierson reports on product liability litigation and on all areas of health care law. He can be reached at [email protected]. .