Screenshot of VirnetX's website.

The Federal Circuit continued Monday to resuscitate a $440 million patent infringement judgment against Apple Inc.

For the second time in the last two weeks, the D.C.-based appellate court ordered the Patent Trial and Appeal Board to reconsider parts of decisions invalidating patent claims that VirnetX Inc. successfully asserted against Apple Inc. in a 2016 Eastern District of Texas trial.

Monday's decision gave VirnetX's stock a 4% jolt. Its market cap has more than doubled since the Federal Circuit first began surfacing its concerns about the PTAB decisions at January oral arguments. The cases involve four VirnetX patents on secure online communications.

The Federal Circuit summarily affirmed the trial court judgment in January. But Cisco Systems Inc. and other entities have for years been blanketing the Patent Trial and Appeal Board with challenges to the patents' validity. Apple has been pleading with the Federal Circuit not to declare the trial court appeal final until the validity challenges are resolved.

Monday's decision in VirnetX v. The Mangrove Partners means one of those validity challenges will at the very least have many more months to run. It's a win for a Paul Hastings team led by partner Naveen Modi. Also contributing were partners Stephen Kinnaird, Joseph Palys and Igor Timofeyev and associates Michael Wolfe and Daniel Zeilberger.

Wilmer Cutler Pickering Hale and Dorr represented Apple, while James Bailey of the Law Office of James T. Bailey represented The Mangrove Partners Master Fund Ltd.

The litigation dates to 2010, when VirnetX won a $368 million jury verdict. The Federal Circuit affirmed the validity of VirnetX's patents in a 2014 opinion but sent the case back due to claim construction issues and VirnetX's failure to apportion the damages for the value of the patents.

A retrial resulted in the $440 million judgment. (Another jury has since awarded an additional $503 million based on newer Apple products, though that award remains pending appeal.)

In the meantime, Apple tried to challenge the validity of the patents under the inter partes review procedures established in 2012 by the America Invents Act. But the PTAB ruled Apple's petitions untimely, because the AIA requires parties who've been sued to petition within one year of the lawsuit.

Other entities then began filing petitions, with VirnetX complaining that they are front groups doing Apple's bidding. The PTAB rejected RPX Corp. petitions when discovery showed that Apple had paid it $500,000 just before they were filed. But the Mangrove Partners' petitions, which challenge U.S. Patents 6,502,135 and the 7,490,151, got the green light. Apple was then allowed to join the proceedings, but not introduce new art or arguments.

On Monday, the court found the PTAB committed a series of errors. While not taking a position on RPX's relationship with Mangrove, the court ruled that VirnetX was at least entitled to more discovery into the relationship.

“The Board abused its discretion in denying VirnetX the ability to even file a motion,” Judge Kimberly Moore wrote for the court.

Moore found no prejudice in Apple's joinder, but “we leave open the question of whether prejudice could arise later.”

The court also found that the PTAB erred in construing claims of prior art used to invalidate VirnetX's claims and improperly discounted a disclaimer made by VirnetX during a previous inter partes reexamination. “Never have we authorized the Board to disregard clear and unmistakable statements of disclaimer from the prosecution history of a patent simply because it is the patent owner arguing for disclaimer,” Moore wrote.

Chief Justice Sharon Prost and Judge Jimmie Reyna concurred.

Last month the Federal Circuit partially reversed another PTAB judgment, ordering it to reconsider the validity of three claims of U.S. Patent 7,418,504, including one that underpins the $440 million judgment. The court also affirmed the invalidity of 33 other claims.

Several additional PTAB proceedings against VirnetX remain pending, presenting additional opportunities to invalidate patent claims, though maybe not in time to unwind VirnetX's first trial judgment.