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Law360 (July 29, 2020, 11:44 PM EDT ) Apple has urged a Texas federal court to delay its upcoming $700 million retrial with VirnetX, saying infection rates in the areas surrounding the courthouse are so high that it's "a virtual certainty that someone with COVID-19 will be at the trial," according to a motion unsealed Wednesday.
Apple Inc. is accused of infringing four VirnetX network security patents. In April 2018, a jury found that Apple infringed all four and ordered the company to pay more than $500 million in damages, which was later raised to $600 million with fees and interest. But the damages award was thrown out by the Federal Circuit, which ruled in November that Apple had only infringed two of the four patents.
The retrial over the bill for the trimmed infringement finding is set to kick off Aug. 17 at the Eastern District of Texas' courthouse in Tyler.
However, Apple Inc. said in its July 27 motion that holding the trial then "will create a health hazard for the participants and the Tyler community." The hearing should be pushed to November, Apple said, adding that the delay will provide time to get the virus under control.
"Trial lawyers, witnesses and clients will travel from around the country, interacting with countless individuals along the way, and then be put together in close quarters for two weeks," Apple said. "Many potential jurors will leave the safety of their home communities and be concentrated in a city that is in the midst of a COVID-19 outbreak."
The delay "is the only way to ensure the safety of all participants and to avoid an acutely-heightened risk of virus transmission," Apple said.
Apple's ability to try its case will also be seriously impaired if the trial goes forward in August, but a three-month delay won't impose "oppressive consequences" on VirnetX, it said. If certain witnesses end up needing to testify via video, the jurors will be left with the misimpression that the witnesses didn't believe the case was important enough to merit an in-person appearance, it said.
"That is manifestly unfair in a case where Apple faces a damages demand of over $700 million," the company said.
Additionally, a delay will allow the court and the parties to assess whether precautionary measures put in place in another upcoming patent trial in which the tech giant is involved are adequate, Apple said. In that case, Optis Wireless Technology LLC et al. v. Apple Inc., Apple is accused of infringing patents covering 4G LTE technology.
Eastern District of Texas Judge Rodney Gilstrap refused to delay that trial on July 21.
Apple pointed out that the state of Texas, the Western District of Texas and Smith County, Texas, have all suspended jury trials through the end of August, adding that the incidence of COVID-19 is currently higher in Tyler than it was in Houston when the Southern District continued jury trials through Sept. 8.
Apple also lodged a motion to expedite briefing on its motion to continue the trial, saying an expedited briefing schedule is warranted to "ensure the parties' positions are before the court at the pretrial conference."
VirnetX wants to proceed with the August trial but didn't oppose the motion for expedited briefing, according to those court filings.
Two weeks ago, Apple asked the court to hold a pretrial conference remotely amid a surge of COVID-19 cases. In that motion, Apple said an in-person hearing would needlessly risk the health of everyone involved, especially when the country as a whole — and Texas in particular — has had a "significant upsurge" in cases.
That same day, the Patent Trial and Appeal Board struck down parts of two VirnetX patents involved in the battle. The PTAB concluded that Apple and a hedge fund called Mangrove Partners Master Fund — both of which had requested the reviews — successfully showed that the challenged claims were rendered obvious by an earlier publication.
Apple representatives and counsel for the parties didn't immediately return requests for comment late Wednesday.
The patents-in-suit are U.S. Patent Nos. 6,502,135 and 7,490,151.
Apple is represented at the district court by Gregory S. Arovas, Robert A. Appleby, Jeanne M. Heffernan, Joseph A. Loy and Leslie M. Schmidt of Kirkland & Ellis LLP and Michael E. Jones of Potter Minton PC.
VirnetX is represented at the district court by Bradley W. Caldwell, Jason D. Cassady, John Austin Curry, Daniel R. Pearson, Hamad M. Hamad, Justin T. Nemunaitis, Chris S. Stewart, John F. Summers and Warren J. McCarty III of Caldwell Cassady & Curry PC, Robert M. Parker, R. Christopher Bunt and Charles Ainsworth of Parker Bunt & Ainsworth PC and T. John Ward Jr. of Ward Smith & Hill PLLC.
The district court case is VirnetX Inc. et al. v. Apple Inc., case number 6:12-cv-00855, in the U.S. District Court for the Eastern District of Texas.
--Additional reporting by Ryan Davis and Tiffany Hu. Editing by Emily Kokoll.
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