Virnetx Inc. v. Apple Inc. ( 2019 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
VIRNETX INC., LEIDOS, INC., FKA SCIENCE
APPLICATIONS INTERNATIONAL
CORPORATION,
Plaintiffs-Appellees
v.
APPLE INC.,
Defendant-Appellant
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - -
VIRNETX INC.,
Plaintiff-Appellee
v.
APPLE INC.,
Defendant-Appellant
______________________
2019-1050
______________________
Appeal from the United States District Court for the
Eastern District of Texas in Nos. 6:11-cv-00563-RWS, 6:12-
cv-00855-RWS, Judge Robert Schroeder, III.
______________________
Decided: November 22, 2019
2 VIRNETX INC. v. APPLE INC.
______________________
JEFFREY A. LAMKEN, MoloLamken LLP, Washington,
DC, argued for all plaintiffs-appellees. Plaintiff-appellee
VirnetX Inc. also represented by JAMES A. BARTA, MICHAEL
GREGORY PATTILLO, JR., LUCAS M. WALKER, RAYINER
HASHEM; ALLISON MILEO GORSUCH, Chicago, IL; LAUREN F.
DAYTON, JENNIFER ELIZABETH FISCHELL, New York, NY;
BRADLEY WAYNE CALDWELL, JASON DODD CASSADY, JOHN
AUSTIN CURRY, Caldwell Cassady & Curry, Dallas, TX.
DONALD SANTOS URRABAZO, Urrabazo Law, P.C., Los
Angeles, CA, for plaintiff-appellee Leidos, Inc.
WILLIAM F. LEE, Wilmer Cutler Pickering Hale and
Dorr LLP, Boston, MA, argued for defendant-appellant.
Also represented by MARK CHRISTOPHER FLEMING, LAUREN
B. FLETCHER; THOMAS GREGORY SPRANKLING, Palo Alto,
CA; BRITTANY BLUEITT AMADI, Washington, DC.
______________________
Before LOURIE, MAYER, and TARANTO, Circuit Judges.
TARANTO, Circuit Judge.
VirnetX Inc. and Leidos, Inc. (together, VirnetX)
brought this case against Apple Inc., alleging that Apple
infringed four VirnetX patents. The district court entered
summary judgment for VirnetX on invalidity, determining
that Apple was precluded from pressing its proposed inva-
lidity challenges because of previous litigation between the
parties. A jury found for VirnetX on infringement and
awarded roughly $503 million as a reasonable royalty,
equal to a rate of $1.20 for each device whose sale by Apple
infringed. The district court denied Apple’s post-trial mo-
tion for judgment as a matter of law and entered a final
judgment for VirnetX.
VIRNETX INC. v. APPLE INC. 3
Apple appeals. We affirm the district court’s determi-
nation that Apple is precluded by the prior litigation from
pressing its proposed invalidity challenges. We affirm the
judgment of infringement as to two of the patents but re-
verse as to two others. In light of our partial reversal on
infringement, we vacate the damages award and remand
for the district court to consider whether it can and should
enter a revised award without conducting a new trial and,
if not, to hold a new trial limited to damages.
I
A
VirnetX owns U.S. Patent Nos. 6,502,135, 7,418,504,
7,490,151, and 7,921,211, the patents asserted in this case.
Those patents are related to and claim improvements over
VirnetX’s U.S. Patent No. 7,010,604, which is not at issue
in this appeal. The ’604 patent describes Virtual Private
Network (VPN) techniques for securely and privately
transmitting communications over public networks. In
particular, it describes a method in which a data packet is
sent through a randomized series of servers before reach-
ing its final destination. ’604 patent, col. 3, lines 3–12. An
intermediate server in the series may send the packet to its
final destination or to another randomly selected server,
subject to the constraint that each packet must stop at a
minimum number of intermediate servers before being
sent to its final destination. Id., col. 3, lines 29–37. The
recipient’s identity is thereby obscured, enhancing privacy.
The ’135, ’151, ’504, and ’211 patents claim improve-
ments of existing VPN methods, such as the ’604 patent’s
method. The parties group the ’135 and ’151 patents to-
gether and the ’504 and ’211 patents together.
The ’135 patent teaches a method of automatically es-
tablishing a VPN in response to a domain name inquiry.
’135 patent, col. 47, lines 20–32. Claim 1 is representative
of the asserted claims of the ’135 patent:
4 VIRNETX INC. v. APPLE INC.
1. A method of transparently creating a virtual pri-
vate network (VPN) between a client computer and
a target computer, comprising the steps of:
(1) generating from the client computer a Do-
main Name Service (DNS) request that re-
quests an IP [internet protocol] address
corresponding to a domain name associated
with the target computer;
(2) determining whether the DNS request
transmitted in step (1) is requesting access to a
secure website; and
(3) in response to determining that the DNS re-
quest in step (2) is requesting access to a secure
target web site, automatically initiating the
VPN between the client computer and the tar-
get computer.
Id.; see also ’151 patent, col. 48, lines 18–29 (claim 13). The
’151 patent issued from a divisional of the ’135 patent’s ap-
plication, so the two patents share a specification.
Whereas the ’135 patent recites a method claim, the ’151
patent recites a “computer readable medium” capable of ex-
ecuting a set of instructions. ’151 patent, col. 48, lines 18–
29. Claim 13 is the only asserted claim of the ’151 patent:
13. A computer readable medium storing a domain
name server (DNS) module comprised of computer
readable instructions that, when executed, cause a
data processing device to perform the steps of:
(i) determining whether a DNS request sent by
a client corresponds to a secure server;
(ii) when the DNS request does not correspond
to a secure server, forwarding the DNS request
to a DNS function that returns an IP address
of a nonsecure computer; and
VIRNETX INC. v. APPLE INC. 5
(iii) when the intercepted DNS request corre-
sponds to a secure server, automatically creat-
ing a secure channel between the client and the
secure server.
Id.The ’504 patent and the ’211 patent make up the sec-
ond group of patents at issue in this case. The ’504 patent,
which issued from a continuation-in-part of the ’135 pa-
tent’s application, describes certain logistical aspects of a
secure communication link between computer nodes, in-
cluding a repository of names and network addresses. ’504
patent, col. 55, lines 49–56. Claim 1 is representative of
the asserted claims of the ’504 patent:
1. A system for providing a domain name service
for establishing a secure communication link, the
system comprising:
A domain name service system configured to be
connected to a communication network, to
store a plurality of domain names and corre-
sponding network addresses, to receive a query
for a network address, and to comprise an indi-
cation that the domain name service system
supports establishing a secure communication
link.
Id.; see also ’211 patent, col. 57, lines 38–46 (claim 36). The
’211 patent issued from a continuation of the ’504 patent’s
application, so the two patents share a specification.
Whereas the ’504 patent recites a system claim, the ’211
patent claims a “machine-readable medium” comprising in-
structions for establishing the system. ’211 patent, col. 57,
lines 38–46.
B
Apple designs and sells mobile devices. Over time, var-
ious such devices have used different versions of Apple’s
6 VIRNETX INC. v. APPLE INC.
iOS operating system. Many of the devices at issue here
included a VPN on Demand application. All the devices at
issue included a FaceTime application.
VPN on Demand allows an Apple device to communi-
cate with a secure website, generally one hosted by a pri-
vate server and protected by a firewall, by establishing a
VPN between the device and the private server. Before Ap-
ple released iOS 7, VPN on Demand had two modes of op-
eration: “Always” and “If Needed.” For both modes, a user
created a list of websites, indicated by domain names, that
the user wanted to be able to access, at least some of the
time, through a VPN. If the user selected “Always” mode,
VPN on Demand established a VPN connection any time
the user requested access to a domain name on the list. By
contrast, if the user selected “If Needed” mode, VPN on De-
mand first attempted to connect to any requested website,
including one on the list, without a VPN; only if the request
failed—commonly, because a firewall stopped the re-
quest—did VPN on Demand establish a VPN.
FaceTime allows Apple devices to have secure audio
and video communication sessions (calls) between devices
in which the FaceTime application is installed. Before Ap-
ple released iOS 7, a user (the caller) initiated a FaceTime
call by selecting another user (the receiver) from the
caller’s list of contacts. The calling device constructed a
message—containing the calling device’s IP address and
certificate, the receiving device’s Apple ID, and a push to-
ken—and sent that message to a dedicated FaceTime
server. When the FaceTime server received the message,
it used the calling device’s certificate to confirm that the
calling device was registered with FaceTime and used the
receiving device’s Apple ID to obtain the receiving device’s
IP address. Then, the server constructed a message with
information about the calling device—its IP address and a
session token—and sent that message to the receiving de-
vice. If the receiver accepted the call, the receiving device
constructed a new message containing information about
VIRNETX INC. v. APPLE INC. 7
itself—its IP address, its certificate, a push token, and a
session token—and sent that message back to the
FaceTime server. Finally, the FaceTime server sent the
receiving device’s IP address and certificate to the calling
device, which allowed the two devices to establish a secure
communication.
C
In 2010, VirnetX sued Apple for patent infringement
based on Apple’s use and sale of mobile devices running on
iOS (the “417” litigation, reflecting the district court’s
docket number). VirnetX relied on the “Always” mode of
VPN on Demand to allege that Apple infringed the ’135 and
’151 patents and on FaceTime to allege that Apple in-
fringed the ’504 and ’211 patents. Apple counterclaimed
that each asserted claim was invalid. The case proceeded
toward trial and in September 2012, VirnetX and Apple
submitted a proposed joint final pretrial order. In that or-
der, Apple indicated that it intended to press several inva-
lidity theories at trial: anticipation, obviousness, written
description, enablement, derivation, double patenting, and
non-joinder of an alleged co-inventor. Apple submitted nu-
merous prior-art references and extensive expert reports
on invalidity. On October 22, 2012, the district court
granted VirnetX partial summary judgment rejecting the
derivation and non-joinder challenges. J.A. 25476, 25486.
On October 25, 2012, a week before trial was set to
begin, Apple filed a motion to voluntarily dismiss the re-
mainder of its invalidity counterclaims. J.A. 25487–90.
The district court denied Apple’s motion. See J.A. 25591–
92. Then, at trial, Apple informed the court that it would
present only one invalidity challenge—an anticipation
challenge based on a 1996 article by Takahiro Kiuchi and
Shigekoto Kaihara (Kiuchi). Thereafter, the court entered
judgment as a matter of law rejecting all of Apple’s other
invalidity counterclaims.
8 VIRNETX INC. v. APPLE INC.
On November 6, 2012, a jury found that Apple had in-
fringed all asserted claims. The jury also found that Apple
had failed to establish by clear and convincing evidence
that the claims were anticipated by Kiuchi. Based on Vir-
netX’s evidence at trial, the jury awarded VirnetX
$368,160,000 as a reasonable royalty for Apple’s use of Vir-
netX’s inventions.
D
On the day the jury returned a verdict in the 417 liti-
gation, VirnetX filed the present infringement action
against Apple. This case (the “855” litigation, again reflect-
ing the district court’s docket number) involves redesigned
versions of VPN on Demand and FaceTime.
The redesigned version of VPN on Demand, found in
iOS 7 and later versions of iOS, replaced the “Always” and
“If Needed” modes with different sets of rules defining op-
tions for the user. One of the new features, “EvaluateCon-
nection,” is similar to the “Always” mode. To operate
“EvaluateConnection,” a user puts into the “Domains” list
websites for which the user desires a secure connection.
Later, when the user enters a domain name in a standard
web browser, VPN on Demand checks whether the name is
on the “Domains” list. Whereas the “Always” mode would
have established a VPN connection at this step, “Evaluate
Connection” causes the redesigned version to go through
additional steps. Before establishing a VPN, the rede-
signed version sends a domain name request to the local
domain name server on the network to which the device is
connected. If this request fails, and the user has enabled
the “ConnectIfNeeded” option—one of the choices within
the “EvaluateConnection” feature—VPN on Demand es-
tablishes a VPN. But if the request succeeds, VPN on De-
mand does not establish a VPN. Evidence at trial
explained the logic: whether a VPN is necessary for a se-
cure connection turns on the user device’s “location” vis-à-
vis a private network. In particular, a failed request for
VIRNETX INC. v. APPLE INC. 9
the IP address of a server hosted on a private network in-
dicates that the user device is outside that private network,
so a VPN is required for secure, private communications;
in contrast, a successful request for such a server’s IP ad-
dress indicates that the user device is inside the private
network and thus does not need a VPN for secure, private
communications.
The redesigned version of FaceTime operates in largely
the same way as the earlier version already found to in-
fringe, but with one change that Apple contends is signifi-
cant to the question of infringement of the ’504 and ’211
patents. In the redesigned version, the final message from
the FaceTime server to the calling device does not include
the receiving device’s IP address. Because the receiving
device knows the address of the calling device but not vice
versa, the receiving device must initiate the communica-
tion through what Apple calls the “ICE protocol.” The re-
ceiving device sends encrypted data packets to the calling
device, and those data packets include the receiving de-
vice’s IP address. Once the calling device decrypts the data
packets, the two devices can establish a secure communi-
cation.
In the 855 litigation before us, Apple again counter-
claimed that the asserted patents are invalid under 35
U.S.C. §§ 101, 102, 103, and 112. In August 2014, the dis-
trict court granted VirnetX’s motion for summary judg-
ment on Apple’s invalidity counterclaims. J.A. 5–9. The
district court held that issue preclusion prevented Apple
from pursuing its invalidity challenges because Apple had
already lost on the invalidity challenges in the 417 litiga-
tion. The only invalidity challenges Apple places in issue
on appeal are obviousness and non-joinder of an alleged co-
inventor. Brief for Appellant at 58; Reply Brief at 25.
In April 2018, a jury found that Apple’s redesigned ver-
sion of VPN on Demand infringed all asserted claims of the
’135 and ’151 patents and that Apple’s redesigned version
10 VIRNETX INC. v. APPLE INC.
of FaceTime infringed all asserted claims of the ’504 and
’211 patents. Based on VirnetX’s evidence at trial, the jury
awarded VirnetX $502,567,709 as a reasonable royalty for
Apple’s use and sale of VirnetX’s inventions. Apple filed a
motion for judgment as a matter of law, and the district
court denied the motion and entered judgment for VirnetX.
Apple timely appealed to this court. We have jurisdic-
tion pursuant to 28 U.S.C. § 1295(a)(1).
II
We review the district court’s ruling on issue preclusion
de novo, following the Fifth Circuit. Wills v. Arizon Struc-
tures Worldwide, LLC, 824 F.3d 541, 545 (5th Cir. 2016);
Voter Verified, Inc. v. Election Systems & Software LLC,
887 F.3d 1376, 1382 (Fed. Cir. 2018) (applying regional cir-
cuit law). We review the grant of summary judgment de
novo and apply the “same criteria employed by the district
court.” Waste Mgmt. of Louisiana, L.L.C. v. River Birch,
Inc., 920 F.3d 958, 964 (5th Cir. 2019); Eli Lilly & Co. v.
Hospira, Inc., 933 F.3d 1320, 1327 (Fed. Cir. 2019) (apply-
ing regional circuit law). We review the denial of a motion
for judgment as a matter of law de novo and ask whether
the underlying jury findings were supported by substantial
evidence. See Apache Deepwater, L.L.C. v. W&T Offshore,
Inc., 930 F.3d 647, 652–53 (5th Cir. 2019); Elbit Systems
Land & C4I Ltd. v. Hughes Network Systems, LLC, 927
F.3d 1292, 1296 (Fed. Cir. 2019) (following Fifth Circuit
law). We review a claim construction de novo and any un-
derlying factual findings based on extrinsic evidence for
clear error. Teva Pharm. USA, Inc. v. Sandoz, Inc., 135 S.
Ct. 831, 841 (2015).
A
We begin with Apple’s challenge to the district court’s
conclusion that, because of what transpired in the earlier
417 litigation, issue preclusion bars Apple from presenting
the invalidity challenges it raised in this litigation—
VIRNETX INC. v. APPLE INC. 11
specifically, an obviousness challenge and a non-joinder
challenger. We agree with the district court. We follow
regional circuit law on the non-patent-specific matter of
whether issue preclusion’s requirement of “actual litiga-
tion” is satisfied when, in an earlier case, the party has
taken a vigorously contested claim through extensive dis-
covery all the way to trial, then lost on the issue after
choosing not to present evidence on it. See Voter Verified,
887 F.3d at 1382–83 (applying regional circuit’s law to non-
patent-specific aspect of preclusion law).
The doctrine of issue preclusion prevents “successive
litigation of an issue of fact or law actually litigated and
resolved in a valid court determination essential to the
prior judgment, whether or not the issue arises on the same
or a different claim.” New Hampshire v. Maine, 532 U.S.
742, 748–49 (2001). Only the requirement of actual litiga-
tion and resolution is contested here. We conclude that
each of the invalidity challenges Apple now asserts was ac-
tually litigated and resolved in the 417 litigation. We
therefore affirm the district court’s determination that Ap-
ple is precluded from raising these invalidity challenges in
the present case.
In the 417 litigation, Apple asserted that VirnetX’s four
patents are invalid based on 35 U.S.C. §§ 101, 102, 103,
and 112. See, e.g., Apple’s Answer, Affirmative Defenses,
and Counterclaims to Plaintiff’s Third Amended Complaint
at 9, Dkt. # 257 (Apr. 16, 2012). Just a month before trial,
moreover, after extensive discovery and the submission of
expert reports, the parties jointly submitted a pretrial or-
der. Apple there continued to assert invalidity challenges
based on anticipation, obviousness, written description, en-
ablement, double patenting, derivation, and non-joinder.
J.A. 25452–53 (pretrial order).
The district court granted summary judgment rejecting
Apple’s non-joinder challenge (along with its derivation
challenge). J.A. 25476, 25486. Although Apple then tried
12 VIRNETX INC. v. APPLE INC.
to voluntarily dismiss the remaining invalidity challenges
without prejudice on the eve of trial, the district court de-
nied the request, telling Apple that it could dismiss those
challenges only with prejudice. J.A. 25591–92. Apple de-
clined to do so, and the invalidity challenges (besides non-
joinder and derivation) were still alive when trial began.
J.A. 25592. At trial, Apple informed the district court and
VirnetX that it intended to present only an anticipation
claim based on the Kiuchi reference. J.A. 25980. When the
district court asked Apple if this decision meant that Apple
was “dismissing” the rest of its invalidity claims, VirnetX
interjected and reminded the district court that Apple’s de-
cision not to pursue the other claims at trial did not mean
that Apple could dismiss those claims. J.A. 25981. VirnetX
informed the court that it would be “filing a JMOL on any
theory that [Apple was] not going forward with.” J.A.
25981–82. At the close of trial and after VirnetX formally
submitted a motion for judgment as a matter of law, the
court entered “judgment as a matter of law on theories of
invalidity, other than anticipation over the Kiuchi refer-
ences as to the asserted claims of the VirnetX patents.”
J.A. 26113.
The record just recited is one of actual litigation of the
invalidity issues Apple now wants to raise. Apple contends
otherwise, asserting that it did not “actually litigate” any
invalidity challenge except anticipation by Kiuchi simply
because it chose to present to the jury no evidence on any
other invalidity issue. We disagree.
A leading treatise states that, as a general rule, “pre-
clusion applies to any issue framed by the pleadings and
not withdrawn, even though it has not been raised at trial
in any way.” 18A CHARLES ALAN WRIGHT ET AL., FEDERAL
PRACTICE AND PROCEDURE § 4419 (3d ed.) (Wright and Mil-
ler). The Fifth Circuit has concluded that an issue is “ac-
tually litigated” when the “issue is raised and the party
who has the burden fails in his proof and the issue is de-
cided against him.” Santopadre v. Pelican Homestead &
VIRNETX INC. v. APPLE INC. 13
Sav. Ass’n, 937 F.2d 268, 274 (5th Cir. 1991) (citing United
States v. Silliman, 167 F.2d 607, 617 (3d Cir. 1948)). Here,
in the 417 litigation, Apple asserted invalidity under 35
U.S.C. §§ 101, 102, 103, and 112 from the outset, and the
issues were extensively developed in discovery. Apple ex-
pressly included a host of invalidity issues, as enumerated
above, in the pretrial order, which “supersede[d] all prior
pleadings” and governed the proceedings to come. Meaux
Surface Protection, Inc. v. Fogleman, 607 F.3d 161, 167 (5th
Cir. 2010); see In re Pirani, 824 F.3d 483, 493 n.1 (5th Cir.
2016). That framing of the issues in the trial-governing
pleadings, together with full pretrial engagement on the is-
sues and the eventual judicial rulings resolving the issues
based on evidentiary insufficiency, is enough to constitute
actual litigation.
Preclusion in this scenario serves important interests
protected by preclusion principles. One is the judicial sys-
tem’s interest in avoiding duplication caused by an earlier
bypassing of a present and adequate opportunity for con-
clusive resolution after fully prepared development of the
issue. Another is the related reliance interest of the oppos-
ing party: “once an issue has been framed, the opposing
party has a right to rely on the expectation that it will be
resolved conclusively in that action.” Wright and Mil-
ler § 4419. When the adversarial litigation of the issue has
proceeded as far as it did in the 417 matter, preclusion
serves the interests in “conserving judicial resources” and
“avoiding oppression or harassment of the adverse party.”
Restatement (Second) of Judgments § 27 comment e.
Here, VirnetX expended “considerable effort . . . in pre-
paring to meet a case that [was] never made” when the
time came for presentation of evidence. Wright and Miller
§ 4419. VirnetX prevailed by summary judgment on two of
the invalidity issues, including non-joinder. Then, only one
week before trial, Apple informed the district court and
VirnetX, in an “Emergency Motion to Dismiss,” that it
14 VIRNETX INC. v. APPLE INC.
would prefer not to pursue the remaining invalidity chal-
lenges, but it proposed to dismiss them only if it could save
them, unimpaired, for future litigation. J.A. 25487. In re-
sponse, VirnetX explained to the court:
VirnetX has spent well over a million dollars in this
case defending the validity of the patents. There
were more than 100 references asserted by Apple
in this case in their invalidity contentions. We had
to deal with all of those.
We have had extensive motion practice in this
Court on invalidity issues. We filed expert reports
in this Court. We have taken depositions in this
Court directed to invalidity.
J.A. 25585–86. When the district court denied the motion
to dismiss, Apple knew that the issues remained in the
case. But Apple bypassed the opportunity to try the issues
then and there, choosing to present no evidence on those
issues. Judgment as a matter of law for failure of proof
followed. Apple’s choice to present no evidence does not
change the character of the judgment as a resolution of is-
sues actually litigated.
Apple relies for its contrary position on our decision in
Voter Verified, but that decision did not hold that there is
no actual litigation in a situation involving adversarial en-
gagement on an issue as extensive in scope and duration,
in a costly course of litigation, as the validity dispute in the
417 matter. In Voter Verified, there had been an earlier
case in which Voter Verified, Inc. sued Election Systems &
Software LLC for patent infringement and Election Sys-
tems counterclaimed that the asserted claims were invalid
under §§ 101, 102, 103, and 112. 887 F.3d at 1379. But
that was all Election Systems did in pressing the § 101
counterclaim. Indeed, when Voter Verified moved for sum-
mary judgment, “Election Systems failed to present any ar-
guments or evidence regarding invalidity of these claims.”
Id. In that circumstance, when Voter Verified sued
VIRNETX INC. v. APPLE INC. 15
Election Systems a second time, we applied Eleventh Cir-
cuit preclusion law to reject issue preclusion of a § 101 chal-
lenge. In addition to concluding that Voter Verified had
not shown that the § 101 ruling in the first case was neces-
sary to the judgment in that case, we concluded that inva-
lidity under § 101 was not “actually litigated” in the first
case because the “district court disposed of the § 101 issue
when Election Systems chose not to respond.” Id. at 1383.
Voter Verified thus involved such a “feeble effort” at
presenting an issue that the case could be characterized as
not involving actual litigation of the issue. Wright and Mil-
ler § 4419 n.11; see id. (calling Voter Verified a “close call”).
How much litigation is enough to constitute actual litiga-
tion for preclusion purposes requires some judgment calls,
but Voter Verified occupies a place on the spectrum far from
a true adversarial contest and only a step away from bare
pleading followed by consensual resolution, which is distin-
guished from actual litigation. See Restatement (Second)
of Judgments § 27 Comment e. In the circumstances of
Voter Verified, moreover, preclusion was not meaningfully
supported by the policies of protecting the judicial system
and opposing parties that weigh so heavily here.
Apple also contends that the district court in the 417
litigation never actually entered judgment on the invalid-
ity defenses that Apple did not present to the jury. We dis-
agree. Apple relies on the fact that, after the verdict in the
417 litigation, VirnetX moved for “judgment against Apple
on Apple’s late-abandoned counterclaims and defenses, in-
cluding all of Apple’s alleged prior art references,” 417 liti-
gation, Dkt. 625, and the district court, in denying the
motion, said:
The Court cannot and will not enter judgment upon
claims and defenses that were not presented for
consideration to the jury. There is no basis to enter
such a judgment, no more than there is a basis to
16 VIRNETX INC. v. APPLE INC.
enter judgment of non-infringement for Apple as to
VirnetX’s unasserted claims.
J.A. 22396. Apple effectively reads “defenses” as independ-
ent from “claims” in relying on this passage to support its
contention. We reject Apple’s argument.
During the trial, as we have noted, the court had al-
ready formally granted judgment on the invalidity defenses
other than anticipation based on Kiuchi. See J.A. 25523
(“Court granted” “Plaintiff’s JMOL on invalidity other than
anticipation regarding Kiuchi”). The court did so after Vir-
netX succeeded in persuading the district court not to per-
mit Apple to dismiss its invalidity challenges voluntarily
without prejudice, which would free Apple to reassert those
challenges in future litigation. It is unreasonable to under-
stand the district court as having suddenly reversed itself
on those decisions. In any event, the mid-trial JMOL, to-
gether with the pretrial partial summary judgment, stand
as judgments on the challenges now at issue. The refusal
to enter a further judgment does not undo those already-
entered judgments.
In context, the reference to “claims and defenses” must
be understood as referring to the defenses Apple asserted
against the patent claims that VirnetX ultimately excluded
from its infringement assertions. Indeed, in responding to
VirnetX’s motion, Apple noted that it was “not requesting
to dismiss its invalidity claim in its entirety,” stating: “Ap-
ple only seeks to dismiss those claims as to which VirnetX
has not asserted infringement.” J.A. 25552 n.18. Moreo-
ver, during the trial, after the district court had entered
JMOL, Apple pointed out that VirnetX had initially “only
asserted a subset of the claims,” had subsequently “limited
those asserted claims to 18 claims,” and then had finally
narrowed those claims even further at trial. J.A. 26122.
The district court, in response, noted that it “ha[d] already
granted [VirnetX’s] motion as to the asserted claims” but
would “make note of [Apple’s] motion as to the unasserted
VIRNETX INC. v. APPLE INC. 17
claims and all of the patents” and would “take that under
advisement.” J.A. 26122. The post-trial ruling that Apple
now quotes is where the court addressed the unasserted
claims.
For the foregoing reasons, we affirm the district court’s
determination that Apple is precluded from pressing the
invalidity challenges it proposed to press in this case.
B
We next address Apple’s appeal of the finding of in-
fringement of the ’151 and ’135 patents based on the rede-
signed VPN on Demand software in the mobile devices
Apple sold. The jury found that Apple infringed the
method claims of the ’135 patent and the computer reada-
ble medium claim of the ’151 patent by developing, testing,
and selling to its customers—with detailed instructions
about how to perform the method—mobile devices with
VPN on Demand installed. We reject Apple’s challenges,
conclude that the jury had substantial evidence to support
its verdict, and affirm the judgment of infringement.
1
We affirm the judgment of infringement of the asserted
claims of the ’135 patent.
The record contains substantial evidence that the rede-
signed version of VPN on Demand performs every step of
the methods claimed in the asserted claims of the ’135 pa-
tent. See J.A. 10079, 10114–21 (Apple’s guide for configur-
ing VPN on Demand); J.A. 1328–52 (VirnetX’s expert
testimony); J.A. 2343–47 (Apple’s expert testimony). Vir-
netX used Apple’s configuration guide to show that the
“EvaluateConnection” mode begins to operate when a user
enters a domain name and, in response, the Apple device
requests an IP address corresponding to that domain
name. J.A. 10118–19; J.A. 1335. VPN on Demand “com-
pares the requested domain against the domains listed in
the Domains array,” thereby determining whether the
18 VIRNETX INC. v. APPLE INC.
request was for a secure website. J.A. 10118, 10120; see
also J.A. 1335; J.A. 2345. If VPN on Demand finds that the
requested domain is listed in the Domains array, it checks,
by sending a request to a local DNS server, whether the
user device is connected to the private network that hosts
the requested website. J.A. 10121; J.A. 1335; J.A. 2344. If
VPN on Demand determines that the user device is not con-
nected to the private network, it automatically sets up a
VPN between the user device and the website. J.A. 10121;
J.A. 1335; J.A. 2344–45. Therefore, substantial evidence
supports the jury’s determination that VPN on Demand
practices each limitation of the asserted claims.
Apple argues that use of its VPN on Demand software
does not infringe the asserted claims of the ’135 patent be-
cause the “location check”—the DNS request that deter-
mines whether the user device is connected to the private
network—does not correspond to a step in the claimed
method and sometimes prevents VPN on Demand from es-
tablishing a VPN. Apple does not dispute that, as a general
matter, an additional step does not defeat an infringement
finding for a “comprising” claim because “[i]nfringement
arises when all of the steps of a claimed method are per-
formed, whether or not the infringer also performs addi-
tional steps.” Smith & Nephew, Inc. v. Ethicon, Inc., 276
F.3d 1304, 1311 (Fed. Cir. 2001). But Apple nevertheless
argues that the claims at issue here exclude VPN on De-
mand.
In particular, Apple argues that the “automatically in-
itiating” limitation adds the following two requirements:
(1) that there are no intervening steps between the “deter-
mining” step and the “initiating” step and (2) that a VPN
must be initiated every time the requested domain name
corresponds to a secure website. The first requirement ex-
cludes VPN on Demand, Apple says, because after VPN on
Demand determines whether the requested domain name
is listed in the Domains array, it performs the “location
check” before initiating a VPN connection. The second
VIRNETX INC. v. APPLE INC. 19
requirement excludes VPN on Demand, Apple says, be-
cause the “location check” often prevents VPN on Demand
from initiating a VPN, even when the requested domain
name is listed in the Domains array: if VPN on Demand
determines that the device is connected to the private net-
work that hosts the website, it does not initiate a VPN.
We reject Apple’s argument in light of the agreed-on
claim construction of “automatically initiating the VPN” as
meaning, simply, “initiating the VPN without involvement
of a user.” J.A. 15046. Under that construction, the “auto-
matically initiating” limitation does not exclude a method
just because, after determining that the domain request
corresponds to a secure website, it performs extra steps be-
fore establishing a VPN and sometimes does not establish
a VPN at all. The limitation precludes post-determination
further user action to initiate the VPN, but the operation
of VPN on Demand accused of infringing does not involve
such action.
The presumption of claim differentiation and the spec-
ification’s description of a particular embodiment bolster
this conclusion. Contrary to Apple’s suggestion that claim
1 forbids any steps between determining that a request is
for a secure website and initiating the VPN, claims depend-
ent on claim 1—which must be consistent with claim 1—
involve such intermediate steps. For example, claim 4
adds the step of “prior to automatically initiating the VPN
between the client computer and the target computer, de-
termining whether the client computer is authorized to es-
tablish a VPN with the target computer.” Id., col. 47, lines
42–45. Similarly, claim 5 adds the step of “prior to auto-
matically initiating the VPN between the client computer
and the target computer, determining whether the client
computer is authorized to resolve addresses of non secure
target computers.” ’135 patent, col. 47, lines 48–51. Fur-
thermore, the specification provides that in one embodi-
ment, “if access to a secure host was requested, then . . . a
further check is made to determine whether the user is
20 VIRNETX INC. v. APPLE INC.
authorized to connect to the secure host.” Id., col. 39, lines
7–9. Apple has not provided any reason that we should
read these claims or this embodiment out of the patent.
Having concluded that the devices at issue perform the
claimed steps, we also conclude that substantial evidence
supports a finding that Apple infringed the asserted
method claims of the ’135 patent both directly through test-
ing and indirectly by inducing users to perform the meth-
ods. As to the former, there was sufficient evidence of a
test plan that the jury could infer was carried out. As to
the latter, there was sufficient evidence for the jury to find,
for example, that the method covered by those claims, as
embodied in the redesigned VPN on Demand, was im-
portant to customers generally as a replacement for the
earlier version’s Always mode, that Apple provided instruc-
tions to customers for how to use the functionality in the
redesigned VPN on Demand, and that Apple intended such
use.
2
We also affirm the judgment of infringement of the as-
serted claim of the ’151 patent.
The jury had sufficient evidence to conclude that Ap-
ple’s sale of mobile devices constituted direct infringement
of claim 13 of the ’151 patent, which is directed to a com-
puter readable medium capable of executing the steps re-
quired to set up a VPN. That claim includes the
“automatically creating” language that Apple treats as in-
distinguishable from the “automatically initiating” lan-
guage of the ’135 patent claims. Having rejected Apple
argument for the ’135 patent’s language, we reject the ar-
gument for the ’151 patent’s language as well. But Apple
has an additional challenge to the infringement finding for
claim 13 of the ’151 patent. We also reject this separate
challenge.
VIRNETX INC. v. APPLE INC. 21
Claim 13 requires a computer readable medium, not
the underlying process itself, so infringement “do[es] not
require the performance of any method steps.” Finjan, Inc.
v. Secure Computing Corp., 626 F.3d 1197, 1204 (Fed. Cir.
2010). When it is “undisputed that software for performing
the claimed functions existed in the products when sold,”
infringement occurs when the party sells those products.
Id. at 1205. Accordingly, VirnetX was not required to prove
that Apple or its customers actually executed VPN on De-
mand, just that Apple sold devices with VPN on Demand
installed. There is no dispute that Apple did so.
Apple nevertheless contends that the devices with VPN
on Demand installed could not reasonably be found to come
within claim 13—specifically, its requirement that the
“computer readable instructions, when executed, cause a
data processing device” to perform the specified steps—be-
cause too much alteration is needed for the instructions to
run to perform those steps. We disagree.
The “when executed” language does not preclude the
need for any activation action to enable the execution, any
more than the language in Finjan—i.e., “storage medium
storing program code for causing” performance of specified
steps—required that the relevant code be “active” without
the need for any user action to activate it. See Finjan, 626
F.3d at 1205 (concluding that such language “does not re-
quire that the program code be ‘active,’ only that it be writ-
ten ‘for causing’” a computer to “perform certain steps”).
We have held, moreover, that “an accused device may be
found to infringe if it is reasonably capable of satisfying the
claim limitations, even though it may also be capable of
noninfringing modes of operations,” id. at 1204–05, and
that a device sold in a noninfringing mode of operation may
still be found to infringe if the mode that infringes can be
enabled “without significant alterations,” Ericsson, Inc. v.
D-Link Systems, Inc., 773 F.3d 1201, 1217 (Fed. Cir. 2014).
More specifically, we have upheld a finding of infringement
based on a company’s provision of instructions to users on
22 VIRNETX INC. v. APPLE INC.
how to operate the company’s product in the infringing
mode. See, e.g., Versata Software, Inc. v. SAP America,
Inc., 717 F.3d 1255, 1262–63 (Fed. Cir. 2013) (“Versata’s
expert did not alter or modify SAP’s code in order to achieve
the claimed functionality. Rather, he followed SAP’s own
directions on how to implement pricing functionality in its
software and activated functions already present in the
software.”); Ericsson, 773 F.3d at 1217 (“In Versata, we
found that the patentee presented evidence that, if a user
followed the accused infringer’s own instructions, the sys-
tem would operate in an infringing manner.”).
The jury could find those standards met in this case.
VirnetX used publicly available Apple documents—specifi-
cally, the “Configuration Profile Reference”—to show that
a user could reasonably follow the directions contained in
those documents to enable “EvaluateConnection.” J.A.
10118–21 (instructions); J.A. 1332–33 (VirnetX’s expert ex-
plaining instructions). There is no evidence that customers
would need to “modify the underlying code to unlock” the
infringing mode. Finjan, 626 F.3d at 1205. And the jury
did not have to find it significant that an “IT person,” and
not the user, would perform the configuration. J.A. 2218.
In Finjan, we considered whether certain products in-
fringed the asserted claims where the infringing software
modules were “‘locked’ when the [products] [we]re sold, re-
quiring a customer to purchase a separate key to activate
each individual module.” Finjan, 626 F.3d at 1202. We
explained that the “fact that users needed to ‘activate the
functions programmed’ by purchasing keys does not de-
tract from or somehow nullify the existence of the claimed
structure in the accused software.” Id. at 1205. The need
for help from an “IT person,” who did not need to rewrite
underlying code, could reasonably be treated the same as
the need to secure a key in Finjan.
VIRNETX INC. v. APPLE INC. 23
C
We now address Apple’s appeals of the verdict of in-
fringement of the system claims of the ’504 patent and the
computer readable medium claims of the ’211 patent based
on Apple’s sale of mobile devices with FaceTime installed.
We agree with Apple that the claim term “domain name
service system” in all the asserted claims at issue, when
properly construed, requires that the system include what
a “domain name service” requires under its construction
(not challenged on appeal). That is, we conclude that the
district court erred as a matter of law in ruling that “the
construction of ‘domain name service system’ does not in-
corporate the construction of ‘domain name service.’” J.A.
26684. Because no reasonable jury could find infringement
under the correct construction, we hold that Apple is enti-
tled to judgment as a matter of law of non-infringement as
to those two patents. 1
1
In the 417 litigation, the district court construed the
term “domain name service” as “a lookup service that re-
turns an IP address for a requested domain name to the
1 For ease of reference, we again quote claim 1 of the
’504 patent, which is representative:
1. A system for providing a domain name service
for establishing a secure communication link, the
system comprising:
A domain name service system configured to be
connected to a communication network, to
store a plurality of domain names and corre-
sponding network addresses, to receive a query
for a network address, and to comprise an indi-
cation that the domain name service system
supports establishing a secure communication
link.
24 VIRNETX INC. v. APPLE INC.
requester.” J.A. 22214. The parties “provided no reason to
modify” that construction in the present litigation—they
incorporated by reference their arguments from the 417 lit-
igation. J.A. 15064. And the construction of “domain name
service” is not in dispute before us.
For the claim phrase “domain name service system,”
the district court ruled, in the 417 litigation, that the
phrase required no construction because the “claim lan-
guage itself provides a description of the domain name ser-
vice system.” J.A. 22219. VirnetX had proposed that no
construction was necessary but argued that if the court
were inclined to construe it, the phrase should be construed
as “a computer system that includes a domain name service
(DNS).” J.A. 22218. For its part, Apple proposed that the
phrase should be construed as “a DNS that is capable of
differentiating between, and responding to, both standard
and secure top-level domain names.” J.A. 21303 (emphasis
added). Thus, both parties proposed that a “domain name
service system” includes a “DNS.” The district court re-
jected Apple’s proposal for adding a specific capability of
“handl[ing] both secure and non-secure domain names.”
J.A. 22219. But the court left “domain name service sys-
tem” without a claim construction.
Before trial in the present case, VirnetX filed an
“Emergency Motion to Clarify” in response to a claim con-
struction argument that Apple had made in a motion to ex-
clude certain expert testimony. Specifically, VirnetX asked
the court to confirm that “domain name service” and “do-
main name service system” are separate terms with sepa-
rate definitions. At the pre-trial conference, the court
agreed with VirnetX’s argument and determined that “do-
main name service” and “domain name service system” are
“two different terms used in different context[s].” J.A.
26684. The district court explained that it is “not a tenet
of patent law that similar terms necessarily incorporate
the constructions of one another.” Id. On that basis the
court concluded that “the construction of ‘domain name
VIRNETX INC. v. APPLE INC. 25
service system’ does not incorporate the construction of ‘do-
main name service.’” Id.That conclusion, we hold, is legally incorrect. The
phrase “domain name service system” consists of a noun
modified by the adjectival phrase, “domain name service.”
The ordinary meaning of such a phrase is that the noun is
characterized by the adjectival phrase—here, that the sys-
tem includes a “domain name service” according to that
term’s unchallenged meaning. See, e.g., Shire Develop-
ment, LLC v. Watson Pharms., Inc., 787 F.3d 1359, 1365
(Fed. Cir. 2015) (regarding the phrase “inner lipophilic ma-
trix,” the court held: “‘lipophilic’ is an adjective that modi-
fies matrix. The parties stipulated that ‘lipophilic’ means
‘poor affinity towards aqueous fluids.’[] Thus, the matrix—
not just an excipient within the matrix—must exhibit the
stipulated-to lipophilic characteristic.”) (internal citations
omitted). Indeed, as already noted, in the 417 litigation,
VirnetX agreed that a domain name service system “in-
cludes a domain name service (DNS).” J.A. 22218; see also
J.A. 20024.
Although a single claim term sometimes can bear dif-
ferent meanings when used in different contexts, we gen-
erally presume that a “word or phrase used consistently
throughout a claim should be interpreted consistently.”
Phonometrics, Inc. v. N. Telecom Inc., 133 F.3d 1459, 1465
(Fed. Cir. 1998). Here, there is no inconsistency between
the use of the phrase “domain name service” when standing
alone (in the preamble of claim 1) and when embedded in
the phrase “domain name service system” (in the body of
claim 1). The strong inference, supported as well by the
natural meaning of the language itself, is that “domain
name service system” requires a “domain name service” as
defined by its unchallenged claim construction.
VirnetX argues that incorporating the construction of
“domain name service” would render the rest of the claim
language surplusage. But VirnetX has not shown
26 VIRNETX INC. v. APPLE INC.
surplusage. The term “domain name service” requires
simply that the system return an IP address to a requester.
It does not dictate how the system communicates with the
requester, how the system obtains the IP address, or what
the system sends to the requester other than an IP address.
According to the district court’s construction of the “indi-
cate” limitation, the indication must be something “other
than the mere returning of requested DNS records, such as
an IP address or key certificate.” J.A. 15052. The phrase
“domain name service” specifies that the system must re-
turn an IP address, and the “indicate” limitation specifies
that the system must return something more. That the
claim provides additional specific requirements says noth-
ing to negate the core requirement of the phrase “domain
name service”: the return of an IP address to the requester.
To the extent that VirnetX’s argument is that “domain
name service” has a different meaning as an adjective than
as a noun, the argument is unpersuasive. While there are
situations in which adjectives do not “reflect the meaning
of corresponding nouns,” this situation is not one of them.
FCC v. AT&T Inc., 562 U.S. 397, 402 (2011). For example,
“[t]he noun ‘crab’ refers variously to a crustacean and a
type of apple, while the related adjective ‘crabbed’ can refer
to handwriting that is ‘difficult to read.’” Id. (citing Web-
ster’s Third New International dictionary 527 (2002)).
Here, however, VirnetX does not point to any difference be-
tween the contexts in which “domain name service” is used
as a noun and as an adjective, much less a difference point-
ing away from simple incorporation of the noun’s meaning
when used to modify “system.” VirnetX in fact fails to pro-
vide any alternative definition for the adjectival version of
“domain name service,” let alone one that removes the
characteristic of “returning an IP address.”
VirnetX’s position goes beyond departing from the or-
dinary role of the adjectival phrase as meaning the same
thing as when that phrase is used as a noun. VirnetX’s
position reduces the adjectival version of “domain name
VIRNETX INC. v. APPLE INC. 27
service” to a nullity. Under VirnetX’s approach, the phrase
does not modify “system” in any meaningful way, because
in VirnetX’s view the “system” is defined entirely by the
subsequent listed functions. An interpretation that ren-
ders language superfluous is strongly disfavored. See, e.g.,
Becton, Dickinson and Co. v. Tyco Healthcare Group, LP,
616 F.3d 1249, 1257 (Fed. Cir. 2010); Elekta Instrument
S.A. v. O.U.R. Scientific Int’l, Inc., 214 F.3d 1302, 1305–07
(Fed. Cir. 2000). Nothing about the particular phrase at
issue here suggests an exception to that important princi-
ple—suggests, in other words, that the words that provide
essentially all the substantive content of the phrase “do-
main name service system” should be treated as a nullity.
The specification provides no support for VirnetX’s nul-
lifying construction. To the contrary, the specification de-
scribes the invention as a system that includes a “domain
name service.” ’504 patent, col. 7, lines 27–29; id., col. 49,
lines 1–2. There is no indication of some special meaning
of “domain name service” when that service is part of the
system.
VirnetX points to portions of the specification that dif-
ferentiate between a “secure domain name service” (an
“SDNS”) and a “standard domain name service” (an “STD
DNS”). ’504 patent, col. 50, lines 40–44; id., col. 50, lines
48–51. One embodiment requires a “secure network” that
“includes an internal router 3312, a secure domain name
service (SDNS) 3313, a VPN gatekeeper 3314 and a secure
proxy 3315.” Id., col. 50, lines 45–48. The secure network
can also include “other network services, such as e-mail
3316, a plurality of chatrooms . . . and a standard domain
name service (STD DNS) 3318.” Id., col. 50, lines 48–51.
VirnetX contends that because the specification refers to
an STD DNS as an optional feature, it is not automatically
covered by claim 1’s “domain name service system.” But
the STD DNS discussion does not suggest that the domain
name service system of claim 1 fails to return an IP ad-
dress. Nothing in the specification indicates that the
28 VIRNETX INC. v. APPLE INC.
difference between an SDNS and a STD DNS is related to
the IP address function; indeed, the specification describes
the secure DNS as “built on top of the existing Internet pro-
tocol (IP).” Id., col. 6, lines 21–24. The distinction on which
VirnetX focuses therefore cannot support VirnetX’s posi-
tion on the point at issue.
What remains is VirnetX’s brief claim-differentiation
argument. VirnetX points to claims 14, 15, and 35 of the
’504 patent, which depend on claim 1, and argues that they
suggest, by what they add to claim 1, that “domain name
service system” in claim 1 cannot by itself require a “do-
main name service” according to that phrase’s unchal-
lenged claim construction. VirnetX does not suggest that
claim 14, 15, or 35 requires something inconsistent with
the construction of “domain name service,” only that each
adds requirements that already appear in that construc-
tion, suggesting a redundancy disfavored in claim con-
struction. We are not persuaded. VirnetX, in its largely
unelaborated argument on this point, has not established
a clear redundancy, if a redundancy at all, in claim 14’s re-
quirement of configuring the system to respond to an ad-
dress inquiry, claim 15’s requirement of a certain source of
the network address information, or claim 35’s require-
ment of a domain name database. In any event, in the cir-
cumstances of this case, we conclude, the bases for the
claim construction we have set forth are so strong that the
thin case for claim differentiation does not support a differ-
ent result. See, e.g., Wi-LAN USA, Inc. v. Apple Inc., 830
F.3d 1374, 1391–92 (Fed. Cir. 2016); American Calcar, Inc.
v. American Honda Motor Co.., 651 F.3d 1318, 1337 (Fed.
Cir. 2011); Laitram Corp. v. Rexnord, Inc., 939 F.2d 1533,
1538 (Fed. Cir. 1991).
2
VirnetX does not dispute that the redesigned version of
FaceTime does not return an IP address to the caller de-
vice. At trial, VirnetX’s expert, testifying about the
VIRNETX INC. v. APPLE INC. 29
operation of FaceTime, agreed that when the FaceTime
server creates the final message, it excludes the receiving
phone’s IP address from that message. J.A. 1362. The
message contains a push token, a certificate, and a session
token, but it does not include an IP address. Id.Thus, under the proper claim construction, a reasona-
ble jury could not conclude that redesigned FaceTime is a
“domain name service system.” We hold that Apple is en-
titled to judgment as a matter of law of noninfringement of
the asserted claims of the ’504 and ’211 patents. We re-
verse the district court’s contrary ruling.
D
The jury’s verdict provided that VirnetX was entitled
to a damages award of $502,567,709.00 but did not indicate
which portions of the award were allocated to which pa-
tents. We have affirmed the judgment of infringement by
VPN on Demand but reversed the judgment of infringe-
ment by FaceTime. Those rulings raise the question of
whether a new trial must or should be held because of the
reduced basis of liability. We see no difficulty with limiting
any such trial to damages, but there is a question whether
a limited retrial need or should be held at all.
We will not decide that question. We have said that
“where the jury rendered a single verdict on damages,
without breaking down the damages attributable to each
patent, the normal rule would require a new trial as to
damages.” Verizon Servs. Corp. v. Vonage Holdings Corp.,
503 F.3d 1295, 1310 (Fed. Cir. 2007); see also Memphis
Cmty. Sch. Dist. v. Stachura, 477 U.S. 299, 312 (1986)
(“When damages instructions are faulty and the verdict
does not reveal the means by which the jury calculated
damages, the error in the charge is difficult, if not impossi-
ble, to correct without retrial, in light of the jury’s general
verdict.”); WesternGeco L.L.C. v. ION Geophysical Corp.,
913 F.3d 1067, 1074 (Fed. Cir. 2019) (invalidating all but
one asserted claim and determining that “the award can be
30 VIRNETX INC. v. APPLE INC.
sustained if there was undisputed evidence that the tech-
nology covered by [the remaining claim] was necessary to
perform the [infringing method]”). We have not received
full briefing on the issue of whether, despite the normal
rule, this is a case in which a new trial on damages is un-
necessary.
It appears to be undisputed that the jury used a per-
unit royalty of $1.20 and adopted the calculation of Vir-
netX’s expert to reach its damages figure—$1.20 per unit,
with over 384 million units having both FaceTime and VPN
on Demand and over 34 million units having only
FaceTime. J.A. 1811–12; J.A. 1852–53; J.A. 2571–73. It
appears, therefore, that the jury found that FaceTime by
itself was worth $1.20 per unit. But because the jury found
infringement by FaceTime as well as VPN on Demand, and
Facetime was installed on all units, the jury did not have
to decide whether the $1.20-per-unit figure would be cor-
rect if only VPN on Demand infringed. VirnetX’s expert
did assert that the same figure would apply, J.A. 1854–55
(explaining calculation based on licensing), but the jury did
not have to decide that issue. Apple’s expert, for his part,
asserted that VPN on Demand was vastly more valuable
than FaceTime, J.A. 2569–73 (testifying that VPN on De-
mand was worth about 6 cents per unit, FaceTime about 1
cent per unit), but neither Apple nor VirnetX has suggested
to us that the jury accepted that testimony.
We do not go further in exploring the law, the facts, and
any admissions that might be relevant to an inquiry into
the need for a new damages trial. We remand for further
proceedings in the district court. We leave it to the parties
and the district court to consider in the first instance rele-
vant aspects of whether to hold a limited damages-only re-
trial given the reduced basis of liability, including what
discretion there might be to hold such a retrial without con-
clusively determining whether one is needed, especially if
doubt remains as to the application of the above-quoted
standards to this case. We do not prejudge these issues.
VIRNETX INC. v. APPLE INC. 31
III
We affirm the district court’s judgments that Apple is
precluded from making certain invalidity arguments and
that Apple infringed the ’135 and ’151 patents. We reverse
the district court’s judgment that Apple infringed the ’504
and ’211 patents. We remand the case for proceedings on
damages consistent with this opinion.
The parties shall bear their own costs.
AFFIRMED IN PART, REVERSED IN PART, AND
REMANDED