“Without any concrete consequences flowing to Apple from the invalidation of the patents, the academic disagreement of the parties cannot justify the status of Article III.”
On January 19, Qualcomm filed a brief opposing Apple’s petition for certiorari to the U.S. Supreme Court, arguing that Apple had failed to provide the evidence required to obtain standing in court. under Article III.
In 2017, Qualcomm filed a lawsuit against Apple, alleging that Apple’s mobile devices infringed five of its patents, two of which are at issue here, U.S. Patent No. 7,844,037 (the ‘037 patent) and the No. 8,683,362 (the ‘362 patent). Apple filed a counterclaim, urging the court to invalidate these five patents. Additionally, Apple filed a simultaneous challenge to two of the patents through inter partes examination (IPR). Fast forward to 2019, where Qualcomm and Apple reached a settlement agreement ending “all litigation worldwide between the parties and dismissing[ing] all claims of infringement with prejudice.
The settlement agreement included the execution of a license agreement that covered tens of thousands of Qualcomm patents, including the two at issue in this case. The agreement required Apple to pay a royalty for the rights to the patents described in the agreement. However, the agreement did not tie the royalty to any particular patent, thus leaving the royalty unaffected if any of the patents covered were invalidated. The agreement also provided that Qualcomm would not sue Apple for infringement of covered patents during the six-year term of the agreement. Scheduled to expire in 2025, the parties can choose to renew the agreement for two additional years.
The settlement did not prevent Apple from continuing to assert intellectual property rights before the Commission over the patents covered by the license agreement. Apple chose to invoke its right to sue IPRs for the two patents at issue. The Board issued a final written decision explaining why Apple did not invalidate either patent. Apple appealed the IPR rulings to the Federal Circuit, which denied the appeal citing Apple’s lack of Article III standing. The Federal Circuit rejected Apple’s interpretation of MedImmune, Inc. v. Genentech, Inc., which Qualcomm says “would grant a licensee the right to challenge any single-licensed patent in a portfolio, even if the validity of a patent would not affect the licensee’s payment obligation.” The Federal Circuit was also unconvinced by Apple’s argument that standing should be granted since Qualcomm could sue Apple in the future after the license agreement expires. Following their unsuccessful appeal to the Federal Circuit, Apple sought certiorari. Apple’s petition has been supported by a number of friends. Amicus’ briefs for Qualcomm were due Jan. 19.
In its brief, Qualcomm argued that the Federal Circuit correctly applied the MedImmune precedent to the facts of this case and that it is not a matter worthy of certification. Qualcomm claimed that in MedImmune, the Supreme Court ruled that “a licensee need not breach a license agreement to establish that it has standing to challenge a licensed patent”, as long as “the licensee can show that a statement of invalidity of the patent would relieve him of a recognizable prejudice”. contrary to MedImmune, here Qualcomm asserted that Apple has not identified any recognizable harm it suffers or will suffer if it is denied Article III to challenge the patents at issue. Specifically, Qualcomm argued that “Apple does not argue or provide any evidence that the validity of the ‘037 patent or the ‘362 patent would affect its ongoing royalty payment obligation.”
In Qualcomm’s view, Apple could have avoided the standing issue had it presented evidence that invalidating the patents at issue would remedy harm. However, in the absence of such a demonstration, Qualcomm argued that “without any concrete consequences flowing to Apple from the invalidation of the patents, the academic disagreement of the parties cannot justify the status of Article III”. According to Qualcomm, Apple not only demonstrated that invalidating the patents would alter its payment obligations, but also failed to demonstrate how any contractual disputes would be resolved by an invalidity ruling or that Apple would no longer have need its portfolio license if these patents have been invalidated.
For Qualcomm, the central question is whether and after which the ability to show Article III is granted to a licensee to challenge validity when a single license agreement grants rights to multiple patents. Apple urged the court to take the view that MedImmune confers on licensees standing under Article III without requiring the submission of evidence to tie invalidation of the patent to reduced royalties or some other explicit consequence for the licensee. Qualcomm finds this view offensive to precedents, saying such an interpretation “would effectively exempt patent licensees from standard Article III principles.” Consequently, Qualcomm urged the Court to deny Apple’s request for certiorari, alleging that granting such a request would amount to “nothing more than an advisory opinion” because, according to Qualcomm, it wouldn’t repair any harm.
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