The U.S. Court of Appeals for the Federal Circuit ruled that a party did not have Article III appeals to seek revision of a final decision by the Patent Trial & Appeal Board because the underlying district court was biased over after a settlement and license agreement became reached. Apple Inc. v. Qualcomm Inc., case numbers 20-1561; -1642 (Fed. Cir. April 7, 2021) (Moore, J.)
After Qualcomm sued Apple, Apple filed petitions for inter partes review (IPR) of the alleged patent claims. The board filed for both petitions, but found that Apple did not prove the disputed claims were clear. Apple appealed the Council’s final written decisions, finding nothing obvious.
While the IPR proceedings were pending, the parties have settled their disputes worldwide. The settlement included a license to Apple and royalty payments to Qualcomm. The parties filed a joint motion to bias the action of the Qualcomm court, which the court upheld.
On the Federal Circuit, Qualcomm argued that Apple relinquished any argument to confirm its appeal by not addressing or submitting supporting evidence in its opening letter. However, the Federal Circuit exercised its discretion to get to the status issue, explaining that the status issue had been fully briefed, there was no bias towards Qualcomm, and the status issue affected this. and other professions. Qualcomm requested permission to file a sur response addressing Apple’s evidence and arguments about Apple’s standing, and agreed that if its motions to file a sur response should not be prejudiced, and that evaluation of the evidence may resolve the status in other pending cases. The court granted Qualcomm permission to file a sur-reply.
Apple argued that it was appealing on the basis of its ongoing payment obligations that stipulated certain rights in the license agreement, the threat that Apple would be sued for infringement of the two patents in question after the expiration of the license agreement, and the foreclosure effects of 35 USC § 315 on future challenges to the validity of the alleged patents. The Federal Circuit disagreed.
Distinctive in the Supreme Court’s 2007 MedImmune v. Genentech case (where status was found based on license payment obligations after analyzing evidence for actual damages or recoverability), the Federal Circuit explained that Apple did not claim the validity of the issue would affect its contract rights and ongoing royalty obligations. The licensing agreement between the parties includes tens of thousands of patents. Apple has not argued or provided evidence that the validity of a single patent (including the two patents involved) would affect its ongoing payment obligations, or identified any related contractual dispute that could be resolved by the validity of the patents in question. . Accordingly, the Court concluded that Apple Art. III standing under MedImmune.
THREAT OF POST LICENSE SUITS
Apple’s second argument was based on the possibility that Qualcomm would sue Apple for infringement of the patents in question after the license expired. The Federal Circuit found the mere possibility of such a lawsuit too speculative to be regarded as too speculative, as Apple provided no evidence that it intended to engage in activities that could give rise to an infringement case. The court noted that none of Apple’s supporting statements mentioned the patents in question or outlined plans to engage in post-license behavior that could lead to litigation. None of the statements contained any indication that Apple intended to make, use, offer, or sell products or features that are accused of infringement by the court. Apple asked the Court to give notice that Apple is and will continue to sell smartphone products, but the Court declined to act as “fortune tellers” of “[w]The products and product features Apple may sell after the expiration of the license agreement over a number of years, ”which it considered reasonably questionable – not undisputed facts. Without such evidence, the court could only speculate on what activity Apple might engage in after the expiration of the license agreement that would lead to a potential Qualcomm lawsuit.
Apple also argued based on Qualcomm’s refusal to grant Apple an irrevocable license or other perpetual rights in the patents in question, and Qualcomm’s history of claiming patents against Apple after certain royalty deals expired. Again, the Federal Circuit concluded that Apple’s allegations were merely speculation and conjecture about Qualcomm’s propensity to assert its patent rights in general, without the specificity required to show that Qualcomm would likely assert the patents against certain products. that may be sold after the license agreement has expired.
Therefore, the Federal Circuit concluded that Apple’s professed injuries did not meet the Lujan standard for demonstrating “actual or imminent, not suspected or hypothetical damage.”
35 USC § 315 (E) ESTOPPEL
Finally, Apple argued that its harm would be aggravated by the likelihood that 35 USC § 315 (e) exclusion would prevent it from claiming that the two patents involved would have been apparent in future litigation. Referring to its 2019 decision in AVX v. Presidio Components, the Federal Circuit reiterated its rejection of the lockout provision as a sufficient, independent basis for status.
Finding no status, the Court dismissed Apple’s appeals without reaching the merits.
Practice Note: If there is a chance that an appeal process will be challenged, an appellant is advised to stay ahead of such arguments in his opening briefing. When in doubt about status, statements or other evidence in support of appeal status should be presented in appellants’ opening letter. Such evidence may include the effect of patents in question on business contracts or licensing agreements, likely future commercial activity, and other elements that could support certain, non-speculative, imminent harm if the parties’ agreement fails or a lawsuit is filed after the filing a proceeding. the expiration of any license (s).