A Swarm of Gnats and Injury-In-Fact

by Dennis Crouch

A swarm of gnats (midges) can be annoying.  Although each bug is almost too small to be seen or felt, 20,000+ of the critters buzzing around can cause some to panic or at least release a curse.  I’d advise you to just act gnaturally. But imagine for a second that you are able to capture two of the creatures that were part of the swarm.  Are you then able to pass judgment on those two captured individuals for the harm of the swarm?  Will killing those two gnats provide any relief from the swarm? (I know you are thinking revenge, but that is gnot the kind of concrete and particularized relief I’m talking about.)

In Apple Inc. v. Qualcomm Inc., 992 F.3d 1378 (Fed. Cir. 2021), the Federal Circuit refused to pass judgment on the two without some evidence that they were the particular cause of any harm.  OK, we’re really talking about patents, and Apple is seeking to cancel two patents out of the 20,000+ that it has licensed from QualcommId.

MedImmune Licensee Standing Does not Apply to Portfolio License

The Case: After some litigation, Apple eventually licensed 20,000+ Qualcomm patents in a six-year-deal.* Meanwhile, Apple also pursued inter partes review (IPR) of two of the licensed patents. US7844037 and US8683362.  The PTAB granted the IPR petitions but eventually sided with Qualcomm–holding that the challenged claims had not been proven obvious.  Apple then appealed, but the Federal Circuit dismissed the appeal for lack of standing.  The court held that Apple had not shown any “injury-in-fact” associated with the continued existence of the two challenged patents.

The en banc petition focuses on the Supreme Court’s patent-licensee standing decision in MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007). In MedImmune, the Supreme Court rejected Federal Circuit precedent that a “licensee in good standing cannot establish an Article III case or controversy.”  Although the facts of MedImmune are some what different, Apple argues that the case should be read broadly based upon the Supreme Court’s repeated promotion of patent challenges.

  • Lear, Inc. v. Adkins, 395 U.S. 653 (1969) (abolishing doctrine of licensee estoppel)
  • Blonder-Tongue Laboratories, Inc. v. U. of Illinois Found., 402 U.S. 313 (1971) (expanding issue preclusion against a patent previously determined invalid).
  • Cardinal Chem. Co. v. Morton Intern., Inc., 508 U.S. 83 (1993) (holding that courts may retain jurisdiction over invalidity counterclaims even after a determination of noninfringement).

Apple correctly argues that the IPR situation has unique circumstances that push toward standing: (1) estoppel tied to unsuccessful IPR; and (2) statutory right to appeal.  In the case, Unified Patents has filed a brief in support of en banc rehearing. And, the Federal Circuit has shown some interest by inviting a response from Qualcomm. That response is due June 9.

En Banc on Standing for IPR Challenge Appeals

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The panel noted in its opinion (and especially in oral arguments) that case involved a lack of evidence regarding the injury-in-fact.  That situation exists, in part, because the issue of standing was not addressed by the USPTO.  Rather, Article III standing only applies once a case moves into Federal Court, and so here addressed for the first time by the appellate court.  Usually the court has a nice tight record to work from, but no record exists for this issue.  Perhaps the court should have held an evidentiary hearing in order to elucidate this injury-in-fact. 

= = = = =

* Note – most of the deal has been kept confidential.

29 thoughts on “A Swarm of Gnats and Injury-In-Fact

  1. 5

    There are two issues that I guess I see with the panel opinion in the case. The first is that it essentially means a portfolio license renders all of the patents immune to IPR if the license fee is not dependent on the number of patents. That is, it seems Apple could have standing if it had challenged all 10,000 patents, but not 1 or 2. Maybe in Apple’s case that is not a problem, but I think about the hypothetical situation of a licensee under a 10-patent or 20-patnet license, who decides they want to challenge them one at a time. Would you lack standing then under the panel opinion, because you didn’t challenge every one at once?

    The other issue I see with the panel opinion is that I think Apple probably has done enough to establish that it has standing due to apprehension of suit after the license expiration (unless these patents expire before then). The previous lawsuit is a pretty good reason to think there’s a risk of future litigation over future products (which cannot be covered by a dismissal with prejudice). Maybe there were more facts they could have alleged, but ultimately I think this case is just following some overly-narrow opinions on apprehension of future suit as a basis for IPR appeal standing. If you look at those cases, they essentially seem to require the potential infringer to allege facts establishing that they will infringe – that puts you in an impossible position. Or they force you to show investments in infringing technology rather than evidence that you intend to use the patented technology if the patents are invalidated.

    In general, I think the line that the Federal Circuit has taken on IPR appeal standing has been too narrow, and at some point it may get fixed by the Supreme Court, but it’s possible that this isn’t the case to do that.

    1. 5.1

      How does “apprehension of suit after the license expiration” satisfy a present requirement of standing?

      Future concerns appear to be the epitome of conjecture.

      1. 5.1.1

        Yes, I recall something called the “ripeness doctrine” from law school. Essentially that means that maybe in the future you will have standing, but you don’t now.

    2. 5.2

      >The other issue I see with the panel opinion is that I think Apple probably has done enough to establish that it has standing due to apprehension of suit after the license expiration (unless these patents expire before then).

      I can’t imagine Apple agreeing to anything less than a worldwide, irrevocable license to “all Licensee Patents having a priority date before the Effective Date of this Agreement.”

      1. 5.2.1

        You’re overlooking the fact that Qualcomm only gave Apple a six-year license. There will still be several years of term on these patents after the license expires, at which point Apple can be sued on them. I think Dennis is right here, Apple did made a sufficient showing of standing, given that it was actually sued on these two patents, and the patents were asserted against longstanding smartphone features that aren’t going away anytime soon.

        1. 5.2.1.1

          With emphasis:

          at which point Apple [THEN] can be sued on them.

          Come back THEN when you may have standing.

  2. 4

    First, I can see the reasons to analogize to gnats, but cicadas would have been more topical 😎

    Second, I’m not sure how an evidentiary hearing would even work. Is there any precedent for that at the appellate level? Can the court just appoint a special master and farm it out that way? It seems unlikely. At the PTAB level there’s no provision for that, it’s outside the purview of IPRs, the APJs correspondingly have no special expertise on the subject, and it would defeat the timing requirements of IPRs. Anyway, Apple is the one that possesses any other relevant facts for the most part. But those would have to do with its pipeline products, so I’m not sure why it would want to get that sensitive info in the record.

    Third, it is a strange posture to be in for this case given that you have IPRs that predate the ostensibly “global” settlement, but yet they weren’t resolved somehow as part of that. You get the sense the CAFC panel was a little annoyed by that—it noted that Apple “nevertheless” appealed the PTAB decisions. It seems like a subject that should have been addressed in the settlement. Qualcomm obviously can’t waive standing, but I think it could waive the estoppel in subsequent litigation. If Apple didn’t secure that as part of the settlement, then it may have to live with that.

    1. 4.1

      Probably no cicadas where the professor lives; that’s my guess. Where I live in historic Manassas there is nothing, but go a few miles north and there is that incessant hum of cicadas doing their thing.

      1. 4.1.1

        My undisclosed neck (gneck) of the woods is also cicada-free, so I just witness the buzz in the news reports.

        In terms of gnat-related expressions that might be used in judicial opinions, these are the only ones I can find:

        “straining at gnats”

        “using a sledgehammer to kill a gnat”

        1. 4.1.1.1

          Currently, we too are cicada free.

          But we did have a recent invasion of midges.

          Gnaturally, the invasion did not last long.

          1. 4.1.1.1.1

            I think you’ve developed quite a gnack for these puns.

            1. 4.1.1.1.1.1

  3. 3

    Re: “the Federal Circuit has shown some interest by inviting a response from Qualcomm. That response is due June 9.”
    Not to support Apple, but I wonder if that Fed. Cir. request reflects some concern by the Fed. Cir. that this case might be close enough to get Sup. Ct. cert interest? This case is not quite like prior Fed. Cir. rejected IPR appeals where no patent litigation or license at all was involved re the appellant. What is it about these two patents that made Apple think they were more important than all the others to the Qualcomm license payments, and would invalidating them arguably benefit more than just Apple [a Lear factor]?

    1. 3.1

      It certainly is a closer case, no question.

      These two patents (gnatents?) are of particular interest because they were among those initially asserted by Qualcomm in its litigation against Apple that ultimately resulted in the settlement. Apple didn’t just choose them at random.

      1. 3.1.1

        Are you thinking there to be estoppel?

        1. 3.1.1.1

          I didn’t think that point was even disputed, but yes. As to how much difference it should make, I haven’t thought about it enough to say.

  4. 2

    Gno way!

    1. 2.2

      People have been tarred and feathered for less.

  5. 1

    How can the CAFC have jurisdiction to rule in any substantive fashion if there is no injury in fact to support standing? As an Article III court, it has no business ruling on anything but cases and controverseries, requiring standing.

    1. 1.1

      Nobody disputes the basic standing requirement. It’s what sort of factual circumstances give rise to standing or not that’s at issue here.

      1. 1.1.1

        Not sure I understand your reply.

        One has – or does not have – standing.

        What ‘question of fact’ is it that you think is the ‘case at point’ that might require a judge to make a decision in order to figure out IF a judge even has authority to make a decision?

        1. 1.1.1.1

          I (mis)shot a bit from the hip on my initial response. Let me rephrase slightly. What I meant to say is, how does stating the trivially true proposition that lack of IiF = no standing resolve any issues in this case? I’m not seeing that.

          1. 1.1.1.1.1

            If (that trivially true) proposition is in fact true, then the attempt to use a forum for the purpose of an advisory opinion is stopped in its tracks.

            Which circles back to the binary, either you have standing or you do not.

            1. 1.1.1.1.1.1

              Yes, I suppose a party alleging a lack of standing would certainly want to characterize the other party’s motives that way, but again (1) I’m not sure what that gets you and (2) this seems to have little to do with the actual disputed issues in this particular case.

              1. 1.1.1.1.1.1.1

                It removes any “disputed issues” precisely because it removes the case from the forum.

                You have to reach “disputed issues” that are properly IN the forum in the first instance.

                We have our judicial branch (and in truth, ALL of the branches) being of limited reach as part of a basic set-up of our government.

                Granted, this might be (vastly) under appreciated in the age of the “Fourth Branch,” and proclivities for government social control, but such lack of appreciation does not change the actual structure of authority.

    2. 1.2

      You mean besides the 200+ years of precedent of federal courts retaining jurisdiction to determine the threshold question of whether they have subject-matter jurisdiction?

      1. 1.2.1

        +1

      2. 1.2.2

        No. I do not mean “besides.”

        I do mean that “threshold” means exactly that ( and certainly not any type of ‘sneak some other issue in).

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