by Dennis Crouch
Apple Inc. v. Qualcomm Inc. (Fed. Cir. 2021) [Apple En Banc]
In this Inter Partes Review, the PTAB sided with the patentee Qualcomm and issued a final written decision that the challenged claims had not been proven obvious. (Note – this was after Qualcomm disclaimed some of the more dubious claims). Apple appealed. (U.S. Patent No. 7,844,037).
Apple has a right to appeal under the statute, but Federal Courts will only hear cases involving an actual case-or-controversy that involves “an injury in fact.” “To establish injury in fact, the alleged harm must be ‘concrete and particularized and actual or imminent, not conjectural or hypothetical.'” Slip Op; quoting Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) and Lujan v. Defs. of Wildlife, 504 U.S. 555 (1992). The standing requirement is derived from Article III of the U.S. Constitution. Thus, although Congress purported provide a statutory right to appeal, no appeal is permitted unless the appellant can show some injury stemming from the outcome of the case below.
Apple and Qualcomm have a license deal, and Apple has licensed the patent at issue (along with at least 20,000 other patents). Typically, a licensee has standing to challenge a patent, because it will help it escape from paying royalties. Here, however, Apple did not allege that the patent’s invalidity would impact any ongoing royalty payments. Presumably, the rate is identical even if it is only 19,999 patents under the license. In other words, Apple did not show how it is injured by the ongoing validity of the one challenged patent. (Actually there are two parallel cases, so “two challenged patents.”)
Now, Apple has petitioned the Federal Circuit for en banc rehearing, arguing that the outcome is contrary to MedImmune Inc. v. Genentech, Inc., 549 U.S. 118 (2007); Cardinal Chem. Co. v. Morton Int’l Inc., 508 U.S. 83 (1993); and Altvater v. Freeman, 319 U.S. 359 (1943).
The Federal Circuit’s decision is a classic Judge Moore opinion that identifies and defines a particular rule (here the in-fact-injury) and then strictly applies the rule to that facts at issue. The problem though is that the Supreme Court’s constitutional analysis is not so cut-and-dry. Here, the petition argues that the court’s analysis provides “rigid, patent-specific rules” that the Supreme Court has previously rejected.
What is interesting here (albeit a bit of a tangent to the ongoing thrust of the case), is a reflection to past dialogues on the notion of “legislated standing.”
To wit, “Apple has a right to appeal under the statute, but Federal Courts will only hear cases involving an actual case-or-controversy that involves “an injury in fact.”
The phrase “under the statute” does NOT carry the openly implied weight for this statute .
While plain words would appear to indicate otherwise, knowing “the rest of the story” provides a necessarily other result.
It is well known that Article III standing cannot be legislated “whole cloth.”
It is also well known that in the formation of the AIA, Congress openly discussed and admitted that they were crafting a two-part mechanism in which it was desired to open to those who did not have Article III standing to be able to “have their day” in front of an administrative body that did not need to have Article III standing met.
Thus, this is a prime example of how legislation cannot be used to artificially create standing.
Less of a tangent here is that the court appears to not only readily grasp this, but then also moves on to analyze a particular instance in which a party putatively MAY possess Article III standing, but happens to lack that standing on the instant facts.
So, the lesson here is to always demand your licensing fees up-front. Ongoing royalties just gives the infringer a damages ceiling #EfficientBreach
When it comes to patent law, Judge Moore is like a latter-day Learned Hand. If she wrote the majority opinion, then the case almost certainly does not merit review. If she writes a dissent—or a concurrence calling for en banc or certiorari review—then it definitely merits review by a higher authority.
Regrettably, it does not appear that the SCotUS appreciates what a gem we have in Judge Moore. I could easily imagine the SCotUS falling for Apple’s argument here, and more’s the pity.
“Here, the petition argues that the court’s analysis provides “rigid, patent-specific rules” that the Supreme Court has previously rejected.”
Yup – spin this the way that you think that the anti-patent Supreme Court will find ‘offensive.’
It’s not as if the Supreme Court has not in the past created any Gordian Knots in their effort to remove any sense of bright line rules that (‘necessarily’) help those darn patent attorney scriviners….
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