Prior settlement scuppers Apple appeal over Qualcomm patents

Apple cannot appeal a final inter partes review (IPR) decision upholding claims in two Qualcomm voice messaging patents because of a prior settlement between the companies, said a US Court of Appeals for the Federal Circuit decision on Wednesday, April 7.

The Californian tech giant sought to appeal a Patent Trial and Appeal Board (PTAB) decision that dismissed Apple’s arguments that the claims were obvious.

The claims in dispute were 1-14 and 16-18 of Qualcomm’s US7,844,037 patent and claims 1-6 and 8-20 of its US8,683,362 patent.

The Federal Circuit dismissed the request to appeal, claiming that Apple failed to establish its standing for the appeal in light of the fact that both parties had already settled litigation relating to the patents in April 2019.

“Ultimately, Apple’s assertions amount to little more than an expression of its displeasure with a licence provision into which it voluntarily entered,” wrote Federal Circuit Judge Kimberly Moore.

Qualcomm had initially sued Apple in the US District Court for the Southern District of California infringing claims of the ‘037 and ‘362 patents in 2017. Apple had sought an IPR of the claims of both patents, with the PTAB ruling that Apple did not prove the challenged claims in either patent as obvious.

Prior to filing appeals, Apple and Qualcomm settled all litigation between them. As part of the agreement, Qualcomm dismissed its district court action and Apple entered into a six-year license agreement to license the patents, which is set to expire in 2025.

Arguing standing

Apple argued that it had standing to appeal the PTAB decision based on three circumstances: its ongoing payment obligations that are a condition for certain rights in the license agreement; the threat that it will be sued for infringing the patents after the expiration of the agreement; and the fear that 35 U.S.C. § 315(e) would bar it from arguing the obviousness of the patents in future disputes.

Qualcomm challenged Apple’s argument for standing due to their prior settlement.

The Federal Circuit relied on MedImmune v Genentech in its dismissal of Apple’s payment obligations argument, saying:

“In Apple’s view, a licensee’s obligations to pay royalties for a license to 100,000 patents would provide standing to challenge the validity of any single licensed patent, even if the validity of any one patent would not affect the licensee’s payment obligations… MedImmune does not require us to find standing here.”

It also dismissed Apple’s argument for standing under fear of further litigation, claiming the argument was “too speculative to confer standing”.

Finally, the Circuit did not agree that 35 USC § 315(e) would estop Apple from arguing the validity of the patent claims in further disputes. It claimed the harm Apple may face from estoppel is insufficient to provide standing.

The judges presiding were Moore, Jimmie Reyna and Todd Hughes.

WIPR has approached Apple for comment.

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