Welcome to another episode of Skilled in the Art. I'm Law.com IP reporter Scott Graham, and this week I'll be checking in on two patent law soap operas, “The Young and the Ex Parte” and “As TC Heartland Turns.”

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Voip-Pal: Apple Waited Too Long to Complain About Our Innocent Conduct

Seldom has a reader so precisely captured the gist of one of my articles as Haynes and Boone partner Russ Emerson has with the above tweet. The clash between Apple and Voip-Pal.com over a remarkable series of ex parte contacts could be subtitled “Days of Our IPRs.” Or maybe “The Bold and the Broadest Reasonable.”

On Friday we got the latest chapter as Voip-Pal told its side of the story to the Patent Trial and Appeal Board. Part of it is laughable; part of it definitely has some merit. I'll get to that in a second. Most significant: The company fessed up to one of Apple's primary allegations—namely that former Voip-Pal CEO Thomas Sawyer was in fact coordinating his ex parte lobbying campaign with Voip-Pal management. The company even corrected a September press release that said Sawyer had been acting independently.

To briefly recap, Voip-Pal sued Apple, AT&T and others for infringing a patent related to voice-over-internet protocol, demanding $2.8 billion in damages. Apple responded with an IPR, and a three-judge panel of the PTAB instituted proceedings, saying it appeared more likely than not the patent was invalid.

That set off Sawyer, who began writing PTAB Chief Judge David Ruschke, PTO chief Joseph Matal and Commerce Secretary Wilbur Ross, complaining at length about PTAB bias against patent owners generally and by the three judges in his case specifically. The PTAB assigned three three new judges to Apple's IPR, without explaining why. Following a full trial, they disagreed with the original panel and ruled for Voip-Pal. Now Apple is crying bloody murder as only Apple can, demanding that the PTAB rip up the judgment as punishment for Voip-Pal's egregious misconduct.

Voip-Pal's first argument is that yes there was ex parte contact, but there was absolutely 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 all Voip-Pal did, Kevin Malek of Malek Moss writes in Voip-Pal's opposition. “All of the Sawyer Letters illustrated systemic concerns about potential unfairness and bias of the Inter Partes Review system,” he writes. The letters “scrupulously avoid discussion of all 'substantive issues' (prior art, non-obviousness or antedating).”

In fact, that's why Sawyer consulted with Voip-Pal on the letters: “Patent Owner's participation ensured that the technical merits were not discussed.”

That's the laughable part. Sawyer's first letter to Ruschke, issued May 1, begins, “re: Inter Partes Review of Apple v. Voip-Pal.com, IPR2016-00198 [and 2016-01201].” Thus, the entire six-page, single-space letter—which is copied to President Trump, Chief Justice John Roberts, and the three PTAB judges originally assigned to the panel—is about the Apple v. Voip-Pal IPR. And while it is true Sawyer doesn't address the merits of the case, he points to potential conflicts of interests and the high individual cancellation rates of each of three panel judges. Subsequent letters call explicitly for the dismissal of the IPR as a sanction for the judges' alleged bias.

But then Malek raises what could be the winning argument and/or the path of least resistance for PTAB. Sawyer also copied the May 1 letter to U.S. District Judge Gloria Navarro of Nevada, whose clerk posted them to the docket in the parties' infringement case. So Apple's known about at least some of the ex parte contact 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 writes. “To grant petitioner a remedy now would reward petitioner for waiting and doing nothing.”

Apple has a couple of weeks to file its reply. So we'll probably have to wait till February to find out Who Shot IPR.

Which Comes First: Venue or Injunction?

Since the Supreme Court issued its TC Heartland venue decision last May, the Federal Circuit has been wrestling with the fallout: What is a “regular and established place of business” in the Internet age? How soon does a defendant have to invoke TC Heartland to avoid waiving the venue defense?

Last week a new fact pattern reached the appellate court, and it's a doozy. Back in May, three days before the Supreme Court issued TC Heartland, U.S. Magistrate Judge John Love enjoined Telebrands Inc. from marketing its “Easy Einstein” water balloon product that allegedly infringes patents held by Tinnus Enterprises. Now it looks as if venue may be improper in the Eastern District of Texas, but Judge Love hasn't gotten around to deciding that issue yet.

In the meantime, Telebrands' appeal of the preliminary injunction reached the Federal Circuit on Thursday.

“Can you briefly explain why we don't have a venue decision yet?” Judge Raymond Chen asked Tinnus' counsel, Thomas Dunlap of Findlay Craft. “I would have thought it wouldn't have taken this long.”

It's complicated, of course. Telebrands—of “As seen on TV” fame—has been found repeatedly to infringe Tinnus and licensee Zuru Ltd.'s patents on filling many water balloons simultaneously. Tinnus and Zuru just won a $10.3 million jury verdict in the Eastern District of Texas in November on a previous Telebrands product.

So Telebrands is trying to get this latest case out of ED-Tex. It filed a motion to dismiss for improper invenue May 26, just four days after TC Heartland came down. Telebrands doesn't have a facility in the Eastern District. But Tinnus argues that Telebrands agents work with Walmart and other stores to display its products in specific store locations, giving rise to venue locally.

In October, Judge Love ruled that Telebrands hadn't been fully forthcoming with discovery about those arrangements, so new depositions will be taken next month. Meanwhile, Telebrands remains enjoined from selling Easy Einstein.

Boies Schiller Flexner partner Michael Underhill said he doesn't think temporary shelf space “has a thing in the world to do with venue.” It didn't sound as if the Federal Circuit judges disagree.

But as Dunlap pointed out, venue isn't presently before the court. Judge Love had jurisdiction to enter the injunction. “And venue is separate from jurisdiction,” Dunlap pointed out.

Judge Jimmie Reyna seemed incredulous. He asked if a judge could wait until after a jury verdict to decide venue. “It seems to me that there's some sort of argument—reasonableness—whether a preliminary injunction should remain in place,” Reyna said.

It does seem like that, but we're not going to find out. Instead, the Federal Circuit summarily affirmed the preliminary injunction earlier today.

Zombie Patents and Good 'Housekeeping'

Usually, when a Federal Circuit judge begins an argument with a “housekeeping” question, there's no need to get on the defensive.

Not so on Thursday when Jeffrey Eichmann rose to argue SimpleAir v. Google. A moment later Eichmann had to assure Judge Chen that zombie patents wouldn't be invading the court.

Some history is in order. Simpleair sued Google in 2011 for infringing its 6,021,433 push notification patent and won an $85 million judgment. But the Federal Circuit threw out the verdict, saying Google could not have infringed under a proper claim construction. By then SimpleAir had obtained continuations of the '433 and sued Google again, but lost a jury trial. Simpleair obtained yet more continuations and sued a third time, before Judge Rodney Gilstrap said enough, and barred SimpleAir's suit under the doctrine of claim preclusion.

So, Chen asked at the outset of Thursday's argument, “How many patents are lurking here?”

Ten, Eichmann told him, and at this point they've all expired.

“However this case gets resolved,” Chen said, “are we going to be in this continuing Night of the Living Dead situation, where there's going to be MORE PATENTS coming out of this spec that might be used to sue Google again?”

“No, your honor,” Eichmann assured him. He told Chen that, despite being continuation patents, the new claims have different language and different meaning. “And this court never previously ruled on this claim language,” he told the court.

Google's lawyer, Quinn Emanuel Urquhart & Sullivan partner Charlie Verhoeven, said it's way past time to put down these undead patents. “This is now the fourth round in which they're asserting the same invention against the same accused product,” he told the court.

Eichmann might be laughing last— or at least temporarily—as Chen and Reyna suggested they might have to send the case back to Gilstrap for further analysis. “The fact that there are multiple lawsuits swirling around here doesn't prove they all arise from the same nucleus of operative facts,” Reyna told Verhoeven.

But Chen also suggested the ultimate result is likely to be the same—no more lawsuit.

Packaging Cases Criss-Cross in the Night

Meanwhile, lawyers from Morrison & Foerster and Latham & Watkins have managed to fly patent infringement cases between two packaging companies across the country: One from California to Ohio, and the other from Ohio to California.

Free-Flow Packaging International (FPI) and Automated Packaging Systems (APS) are in the business of filling the empty space in boxes with material that protects package contents. FPI, whose principal place of business is in Fremont, California, sued APS in California for infringing its patents. U.S. Magistrate Judge Michael Fitzgerald sent it to the Northern District of Ohio in November. That's APS's home base and where APS filed its own patent suit against FPI three years ago.

It looked as if U.S. District Judge Sara Lioi might handle both cases together, but now a Latham team led by partner Richard Frenkel has prevailed on her to send APS's case to the Northern District of California.

APS's case has mostly been on hold during IPR proceedings, and FPI acted promptly as soon as the Supreme Court ruled in TC Heartland, Lioi wrote in a 22-page opinion issued Friday.

APS and Calfee, Halter & Griswold argued that venue is proper in Ohio because FPI loans some of its equipment to customers in Ohio and services it for them there. But Lioi turned away this “rather creative argument” in the wake of the Federal Circuit's In re Cray decision on venue.

“Servicing a customer at the customer's facility cannot transform that facility into the patent defendant's place if the defendant does not hold such place out as its own,” she concluded.

The decision highlights a new feature of the post-TC Heartland landscape. When competitors from two different judicial districts sue each other for patent infringement, the cases may often be tried separately.

“We're pleased with the very thorough and thoughtful opinion from Judge Lioi,” said Frenkel, who was assisted by Latham partners Max Grant and others. “In re Cray and In re Micron, as well as TC Heartland, are having a big impact on how and where patent cases are being litigated.”

In closing, I wish that none of your patents join the undead, nor that they star in an infringement soap opera. And now for a quick programming note …

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