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IP Alert: Again, Federal Circuit Holds Apple Lacked Standing to Appeal IPRs It Initiated

November 16, 2021

On November 10, in Apple Inc. v. Qualcomm Incorporated, for the second time, and in a 2-1 decision by a different panel, the Federal Circuit held that Apple lacked standing to appeal final decisions in inter partes review (IPR) proceedings it initiated against Qualcomm patents, because of the license agreement between Apple and Qualcomm. Losing standing to appeal an unfavorable Patent Trial and Appeal Board (PTAB) decision is a counterintuitive side-effect of settling patent litigation, worth noting when entering global license agreements.

As with the first appeal in this matter (“Apple I”), which we previously reported here, the IPR decisions appealed in this case were filed by Apple in response to Qualcomm’s 2017 lawsuit against Apple in the Southern District of California. The parties settled and reached a license agreement, resulting in dismissal of the district court action with prejudice. In both cases, the PTAB issued a final written opinion upholding the validity of various claims. Apple appealed, and Qualcomm moved to dismiss for lack of standing.

Before turning to Apple’s arguments, the court noted the writing was already on the wall for this appeal, because, as Apple admitted, the operative facts in this case were the same as Apple I.

In attempting to obtain a different decision from Apple I, Apple first argued that Apple I did not address the nuance of why the threat of liability, in case of a termination of the agreement, is not sufficient injury to support standing. The court was unconvinced, stating that the “nuance” does not allow the court to turn back the clock on Apple I and defy the earlier decision by dealing differently with its double.

Apple further argued that the PTAB’s decision should be vacated to eliminate any doubt about the applicability of estoppel, citing United States v. Munsingwear, Inc. The court rejected this argument, stating that Munsingwear concerns mootness and not standing. The court further noted even if mootness is at issue, vacatur is still inappropriate because Apple voluntarily entered the jurisdiction-destroying license agreement. Effectively, Apple surrendered its claim to the equitable remedy of vacatur.

Judge Newman, in dissent, noted that the life of some of the licensed patents extends beyond the term of the license agreement and opined that such concerns provide standing, citing Medimmune v. Genentech. She also agreed with Apple’s argument that Apple is suffering concrete and present harm by having to pay royalty for a patent it believes to be invalid.

This decision stands as another interesting exception to Medimmune v. Genetech. Both patent owners and licensees should take note of the effect a large portfolio license agreement can have on the issue of standing for challenging individual patents in the portfolio on appeal at the Federal Circuit.

For more information on this topic, please contact Fitch Even partner Karen J. Wang, author of this alert.

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