On November 10, 2021, in Apple Inc. v. Qualcomm Incorporated (Apple v. Qualcomm), the United States Court of Appeals for the Federal Circuit (“Federal Circuit”) dismissed Apple Inc.’s (“Apple”) consolidated appeal from four decisions made by the Patent Trial and Appeal Board (“PTAB”). The PTAB held that claims of patents owned by Qualcomm Incorporated (“Qualcomm”) were not proven to be unpatentable. Upon Apple’s appeal, the Federal Circuit dismissed the appeal due to their holding that Apple lacked standing under Article III of the US Constitution. Judge Newman, however, dissented from the Federal Circuit’s decision to dismiss.
Qualcomm originally brought a patent infringement suit against Apple in the Southern District of California. Apple then petitioned the PTAB to review the validity of the patents at issue. Qualcomm and Apple then settled and entered into a license agreement, which resulted in the infringement suit being dismissed with prejudice. The PTAB then issued final written decisions holding that the claims at issue were not proven to be unpatentable. Apple then appealed the PTAB’s decision.
These proceedings come on the heels of a previous Federal Circuit decision in Apple Inc. v. Qualcomm Inc., 992 F.3d 1378, 1385 (Fed. Cir. 2021) (“Apple I”), which was decided April 7, 2021. Apple I involved almost identical facts in terms of procedural posture of the case and how it made its way to the Federal Circuit. Just as in the present action, in Apple I the Federal Circuit also dismissed Apple’s appeal for lack of standing. In Apple I, Apple offered three theories of standing. First, Apple argued that it had standing by emphasizing that Apple had ongoing payment obligations that are a condition for certain rights in the license agreement. The Apple I court rejected this theory, noting that the validity of the patents at issue would not affect the contractual agreement and that there was no contractual dispute that could be resolved by determining validity of any of the patents at issue. Second, Apple argued that there was a threat that Apple would be sued for infringement after the expiration of the license agreement. The Apple I court also rejected this theory, writing that the evidence submitted by Apple was deficient. For example, the evidence submitted by Apple did not even mention the patents at issue or provide plans to engage in any potentially infringing conduct after the expiration of the license. Third, Apple argued that 35 U.S.C. § 315(e) (estoppel related to Inter Partes Review) would estop it from challenging the patents at issue in the future. The Apple I court also rejected this theory of standing due to the lack of sufficient evidence provided by Apple and rejected the notion that invocation of the estoppel provision is a sufficient basis for standing. Thus, the Apple I court dismissed the appeal.
The Federal Circuit notes that the present appeal must be assessed in view of the precedent provided by Apple I. To that point, Apple itself admits that the operative facts of Apple I and the present appeal are the same. Apple argues that the present appeal includes “nuance” not raised in Apple I. Apple further argues that Apple I “did not explain why the threat of liability, if Apple ceases the ongoing payment and the agreement is terminated, is not a sufficient injury to support standing.” However, Apple raised this issue in Apple I in a petition for the Federal Circuit to hear the case en banc. The Federal Circuit in the present action, notes that it is bound by the doctrine of stare decisis and, since the alleged “nuance” was raised in the previously denied petition for en banc hearing, the Federal Circuit dismisses this appeal in view of the dismissal in Apple I.
In the present appeal, Apple also raises the argument that if the Federal Circuit lacks jurisdiction to decide the case, it should vacate the PTAB’s decision “to eliminate any doubt about the applicability of estoppel.” In support of its argument, Apple cites case law which indicates that the court should “vacate the underlying decision in certain appeals that have become moot during their pendency.” The court notes the distinction between the standing and mootness doctrines, and thus concludes that Apple’s argument is “misplaced”. The Federal Circuit further notes in its decision that even if Apple’s issue could be considered a mootness issue rather than a standing issue, vacating the underlying PTAB decisions would be inappropriate since the “jurisdiction-destroying event” was a settlement which was voluntarily entered into by Apple.
Judge Newman dissents from the decision to dismiss the appeal and argues that Apple has standing to appeal the PTAB decisions to the Federal Circuit. Judge Newman further argues that if the appeal is denied, the PTAB decisions are required to be vacated.
Judge Newman contends that the controversy between Apple and Qualcomm is not eliminated by the license grant because Qualcomm refused to grant Apple a license for the life of the patents at issue. Rather, the license will expire prior to the expiration of the patents at issue. Judge Newman cited extensive precedent pointing to the fact that a patent licensee has standing to challenge the validity of the patents at issue.
Judge Newman also argues that the statutory estoppel of PTAB decisions reinforces the right of appeal. Both Inter Partes Review (“IPR”) and Post-Grant Review (“PGR”), which are two PTAB procedures to determine patent validity, include a statutory estoppel provision in which the petitioner is barred from asserting a claim in any civil action that was raised or reasonably could have been raised in the PTAB procedure should the PTAB issue a final written decision. Regardless of whether Apple faces an unresolved controversy, Judge Newman argues that the “estoppel provision of itself provides Apple with standing to appeal the PTAB decisions and provides this court with jurisdiction to receive the appeals.” Judge Newman points to 35 U.S.C. § 329 which provides a party dissatisfied with the decision of the PTAB the right to appeal the decision.
Lastly, Judge Newman argues that vacatur of the PTAB decision is appropriate if appeal is deemed barred by the Constitution. In support, Judge Newman notes that in United States v. Arthrex, Inc., 141 S. Ct. 1970 (2021), the court concluded that “PTAB decisions must be amenable to review by a principal agency officer, or the decisions must be vacated.” Judge Newman also cites precedent from similar cases in which PTAB decisions were vacated for various reasons.
Despite Judge Newman’s dissent, the Federal Circuit has dismissed the tech giant’s appeal of consolidated PTAB decisions related to patent validity. This is the second dismissal in 2021 of an appeal by Apple made under similar circumstances.