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Strange Goings On In The VirnetX Vs. Apple Case

Now I'm not a lawyer and have never claimed to be one, but not having a membership to the guild does not mean that I cannot read a legal document and notice when something is out of the ordinary. In the case of VirnetX (NYSEMKT:VHC) vs. Apple (NASDAQ:AAPL) these irregularities show themselves with amazing frequency and some are worth talking/writing about.

Fine examples of these irregularities have come down from on high several times in the last month alone. Hopefully there is lawyer out there with patent experience (and maybe a SC case under his belt) that can set me straight on all of my musings.

Case 6:13-cv-00211-LED (I know the LED is just an identifier of the judge, but it is nice to remind everybody that we are dealing with the legal work of the Honorable Chief Justice of The Eastern District of Texas Federal Court Judge Leonard E. Davis) for example was deemed closed on Feb. 25th, 2014 without a corresponding document closing the case being filed on the public PACER system. Lo and behold, on March 6th we have PACER Docs No. 52 (ORDER granting in part and denying in part 51 Sealed Patent Motion to Unseal and Redact. The Court will maintain the original order under seal; however, it will republish its sealed order with the requested redactions) and 53 (The redacted Order itself). This Order is redacted in four spots all of which refer to Apple's business. The Order itself reads as having a very unfavorable opinion of Apple's conduct, IMHO. That opinion may also stem from having attended the trial and the post trial hearings. All of these things are at least a mite out of the ordinary and one or two might have an experienced legal practitioner or member of their support staff saying, "I've never seen that before".

And then yesterday evening, Apple's Notice of Appeal (Docket No. 58) arrives on our door step like an unexpected puppy (ok, everybody knew it was coming) and it contains the curious wording, "Defendant Apple Inc. hereby appeals the Court's Order granting in part and denying in part the motion of VirnetX, Inc. for an ongoing royalty (Dkt. 48 (under seal); Dkt. 53 (signed Feb. 25, 2014; filed Mar. 6, 2014)) and any judgment entered in this matter". "and any judgment entered in this matter", was Apple expecting something else? I think, obviously so. Now, obviously if the answer was out there in black and white I wouldn't be having all this speculative fun at my keyboard, but with redactions and sealed documents one can only speculate. That's what I'm here for.

Put yourself in their shoes, Apple is about to appeal before the CAFC an ongoing royalty rate order that implies that their court given testimony was a steaming pile of misguided facts, where they "grossly misrepresented" and had a "huge disparity" between pre-trial and post-trial costs and implementation time. It may not sound like much to the lay person, but my research suggests that this is a judge's way of "screaming" at Apple. So, here is Apple about to enter an appeal to the second highest court in the land of patents and the paperwork shows that the honorable judge is "screaming" at them. Kind of embarrassing and kind of hard to assume your appeal is going to be looked upon favorably by judge Davis's fellow judges. Ouch! So, what would any good lawyer do? File a sealed document (or even make a personal phone call??) asking for a little bit of toning down of the official "screaming" to kind of a loud admonition?? I don't know, but it never hurts to ask, does it.

Well, if that phone call was made or that sealed motion filed, I believe that Apple received their answer earlier today, a loud door slamming in their face reminiscent of those '70s cartoons where the recipient was a traveling salesman a.k.a. Wyle E. Coyote and the slammer was The Roadrunner. On 3/28/2104 before the noon lunch break (as it's called in east Texas towns) Docket No. 59 was filed on PACER, "ACKNOWLEDGMENT OF RECEIPT by USCA-Federal Circuit of [58] Notice of Appeal, [53] Order, [48] Sealed Order, and Certified Copy of Docket Sheet. (dlc, ) ". That little 'ol courthouse in east Texas had on the ready and shipped out to the CAFC all the paperwork needed to make the good judge's work finished on this case, no relief of any sort coming for Apple. Time clock started on your appeal, thank you very much!

All of this, of course, is just one man's speculation and may make better campfire stories that Seeking Alpha Instablog material, but as a VHC long, it does make an interesting tale and might just put a smile on your face.

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Disclosure: I am long VHC.

Additional disclosure: and may go longer still.