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Federal Circuit Finds Insufficient Evidence to Establish Standing to Appeal IPR Decisions in Apple Inc. v. Qualcomm Inc. | Haug Partners LLP

On April 7, 2021, the Federal Circuit in Apple Inc. v. Qualcomm Inc., No. 20-1561, – F.3d -, 2021 WL 1287437, * 1, * 5 (Fed. Cir. April 7, 2021), ruled Apple failed to appeal against inter-partes review (IPR) decisions of the Patent Trial and Appeal Board (PTAB), which ruled that Apple did not prove Qualcomm’s patents clear. The decision was based on the Federal Circuit Panel finding that, among other things, Apple’s settlement of a worldwide patent dispute with Qualcomm and the license for the patents at issue in the IPRs (as well as many other patents) meant that there were not a case or controversy sufficient to support standing.

As a background, Qualcomm sued Apple in court for infringing certain claims of US patent numbers 7,844,037 and 8,683,362. ID card. re 1. After that, Apple filed IPR petitions against those claims. ID card. Ultimately, the PTAB decided that Apple had not proven that the disputed claims would have been clear. ID card. Prior to the current appeals, both companies settled all disputes between them and jointly decided to dismiss Qualcomm’s lawsuit against Apple regarding the same patents with bias. ID card. As part of the settlement, both parties entered into a six-year license agreement that included a license to the affected patents and, as Apple admitted, a covenant-not-to-sue with respect to those patents. ID card. at 2 o’clock. Nonetheless, Apple continued to file the current appeals of the Board’s IPR decisions. ID card. at 1.

To establish reputation, “an appellant must have (1) actually sustained an injury, (2) that is reasonably traceable to the disputed behavior of the [appellee], and (3) likely to be reinstated by a favorable court decision. ID card. At * 1 (citation omitted). The settled issue on appeal focused primarily on whether Apple could in fact determine an injury, that is, damage that was “concrete and specific and current or imminent,” not speculative or hypothetical. ”ID card. (citation omitted) Although status is not required to seek a contradictory assessment under the Patent Act, the Panel noted that“ an appellant ”provided the required evidence of an injury when he wants to review an agency’s latest action in federal court. “” Id. op * 1 (quoting Phigenix, Inc. v. Immunogen, Inc., 845 F.3d 1168, 1171-72 (Fed Cir. 2017)).

Waiver of any challenge to status as a preliminary matter

Before resolving the permanent issue on its merits, the panel addressed Qualcomm’s allegation that Apple renounced any claim regarding status because Apple failed to provide evidence or support the position in its opening assignment. serve. Apple, 2021 WL 1287437 at * 2. The panel noted that the court in Phigenix had ruled that “an appellant must identify the relevant evidence demonstrating his status ‘at the first appropriate’ time, either in response to a motion of rejection,” either in the opening command. ” ID card. (quoting Phigenix, 845 F.3d in 1173 (Fed. Cir. 2017)). And the panel went on to argue that because of “the global settlement between the parties”, Apple should have put forward its solid arguments and evidence to support its position in its opening statement. However, the panel emphasized that the court “has consistently held that waiver is a matter of discretion” and that the court has exercised this discretion to deal with issues remotely “where, among other factors, the matter has been fully informed by the parties. ID card. (Quoting Ericsson Inc. v. TCL Commc’n Tech. Holdings Ltd., 955 F.3d 1317, 1322-23 (Fed. Cir. 2020) (quotes omitted)).

Here, the panel found that the issue of Apple’s status had already been fully briefed, that there was no bias that Qualcomm was considering the matter, and that the issue of status was affecting these and other appeals. ID card. at 2 o’clock. Interestingly, in its motion to file a sur-response to Apple’s evidence and arguments on standing, Qualcomm admitted that if the motions were granted, it would suffer no harm. ID card. In addition, Qualcomm admitted that evaluating the evidence would resolve status in other pending cases. ID card. Thus, the panel exercised its discretion to assess the ongoing issue. ID card.

Licensee stands on earnings

On merit, Apple argued that it was based on (1) its ongoing payment obligations under the license agreement; (2) the threat that it would be sued for infringement of the relevant patents after the expiry of the agreement; and (3) because of the foreclosure effects of 35 USC § 315 on any future challenges that Apple may raise against the validity of the patents in question.

Apple’s first argument focused on its ongoing license payment obligations, given the Supreme Court’s interest in MedImmune, Inc. v. Genentech, Inc., 549 US 118 (2007). Specifically, Apple argued on the basis of MedImmune that its “ongoing payment obligations are a condition of certain rights [under the license agreement] provid[ed] standing. ID card. At 3 a.m. Because it found MedImmune’s facts distinctive and the company less broad in scope, the Federal Circuit disagreed. See id. MedImmune was about whether royalties were due under a license agreement while the patent at issue in that case was invalid according to Medimmune and did not relate to his product. See id. (quoting MedImmune, 549 US at 121-22). After payment of royalties under protest , Medimmune had filed a declaratory judgment asking the court to rule that it did not owe royalties because its product did not violate any valid claim of the affected Genentech patents. Apple, 2021 WL 1287437 at * 3 (quoting MedImmune, 549 US at 122-23) According to Medimmune’s reasoning, the panel concluded that the fatal flaw in Apple’s argument was that Apple made no claim to affect the validity of the ‘037 or’ 362 patent. its contractual rights, including its pending royalty obligations. ID card. At 3 o’clock. The licensing agreement between Qualcomm and Apple covered “tens of thousands of patents,” and Apple did not provide “evidence that the validity of a single patent … would affect ongoing payment obligations.” ID card. Therefore, the panel found that Apple’s established argument, rooted in its ongoing payment obligations, failed. ID card.

As for Apple’s second argument, Apple claimed it held up due to the possibility that Qualcomm would sue Apple for infringing the ‘037 and’ 362 patents after the license expired. ID card. om 4. According to the panel, numerous factors weighed against the adequacy of this argument, making the “possibility of a suit too speculative to confer status”. ID card. Apple has not provided evidence that it intended to engage in any infringing activity after the license expires. ID card. In fact, the statement filed as proof of status did not even mention the ‘037 and’ 362 patents. ID card. Furthermore, there was no indication in the statement that Apple intended to engage in infringing behavior after the expiration of the license, such as plans to make or use the alleged infringing products in the original court proceedings (e.g., the iPhone 4 , 5, 6, and 7). ID card. According to the panel, the statements were “devoid of the specificity necessary to actually establish an injury”. ID card.

Referring to Grit Energy Sols., LLC v. Ears Techs., LLC, 957 F.3d 1309, 1320 (Fed. Cir. 2020), Apple argued that the original Qualcomm court proceedings for infringement of the ‘037 and 362 patents provided proof of standing. ID card. But this did not help. The panel pointed out that unlike Grit Energy, which involved a dismissal without prejudice, the court’s case here was dismissed with prejudice. ID card.

Likewise, Apple’s claim that status should exist due to Qualcomm’s refusal to grant Apple permanent rights to the patents in question and Qualcomm’s history of enforcing patents against Apple after the agreements expire was also insufficient . ID card. The panel found that Apple’s claim was at best “speculation and conjecture about Qualcomm’s propensity to assert its patent rights in general.” ID card. But the allegation was “devoid of the specificity necessary to demonstrate that Qualcomm is likely to enforce these specific patents against certain products” when the license agreement expires. ID card. Thus, Apple had “in fact not shown any harm based on possible future allegations that its products infringe the ‘037 patent or the’ 362 patent.” ID card.

Finally, the third basis for Apple’s status put forward was that 35 USC § 315 (e) prevents it from claiming that the patents in question would be obvious in future litigation. ID card. The panel quickly dismissed this claim, replying: “[w]e have already rejected an appeal to the exclusion clause as a sufficient basis for status. ID card. (Quoting AVX Corp. v. Presidio Components, Inc., 923 F.3d 1357, 1362-63 (Fed. Cir. 2019)).

Because Apple failed to gain a reputation, the Federal Circuit ultimately dismissed the appeal. ID card. at 5 o’clock.

Conclusion

This decision provides an interesting discussion of waiver and ongoing issues that may arise when appealing IPR decisions involving a licensee and licensor. Given the worldwide settlement of all disputes between the parties, the dismissal subject to the Qualcomm District Court proceedings and the numerous patents covered by the license agreement beyond those covered by intellectual property rights, stated The Federal Circuit noted that there was no case or controversy that remained in support of the right to hear the appeal of the IPR decisions. Indeed, the panel seemed somewhat surprised that Apple continued the appeal. As one possible reason, the panel described the situation as “Apple’s displeasure with a licensing provision it has voluntarily entered into.” ID card. At 3 o’clock. The panel further suggested that Apple’s argument that “canceling the ‘362 patent would restore its pending payment obligations because it would remove a significant barrier” may have provided a different theory. ID card. at * 3 n.4. But as the panel noted, Apple did not explain why the ‘362 patent created a barrier, nor did it provide a reason why its cancellation was likely to affect its payment obligations. ID card. The panel decision thus provides guidance for practitioners who structure licensing and settlement agreements and who may wish to stand up for future appeals against IPR decisions. In addition, the discussion of the waiver provides insight to those informing such appeals.

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