Qualcomm SCOTUS Brief Charges Apple Has No Legal Leg to Stand On

“Without any concrete consequence flowing to Apple from the patents’ invalidation, the parties’ academic disagreement cannot support Article III standing.”

Qualcomm AntitrustOn January 19, Qualcomm filed a brief in opposition to Apple’s petition for certiorari to the U.S. Supreme Court, arguing Apple failed to make the requisite evidentiary showing to obtain Article III standing.

In 2017, Qualcomm filed suit against Apple, alleging 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 U.S. Patent No. 8,683,362 (the ‘362 patent). Apple counterclaimed, urging the court to invalidate those five patents. Additionally, Apple filed a simultaneous challenge to two of the patents through inter partes reviews (IPRs). Fast forward to 2019, where Qualcomm and Apple entered into a settlement agreement terminating “all the litigation worldwide between the parties and dismiss[ing] all the infringement claims with prejudice.”

The settlement agreement included the execution of a licensing 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 fee for rights to the patents outlined in the agreement. However, the agreement did not tie the royalty fee to any particular patent which would therefore leave the fee unchanged if one of the covered patents was invalidated. The agreement also provided that Qualcomm would not sue Apple for infringement of the covered patents during the six-year term of the agreement. Scheduled to expire in 2025, the parties may elect to renew the agreement for an additional two years.

The settlement did not preclude Apple from continuing to pursue IPRs before the Board on the patents covered by the license agreement. Apple opted to invoke its right to pursue IPRs for the two patents at issue. The Board issued a final written decision articulating why Apple did not invalidate either patent. Apple appealed the IPR rulings to the Federal Circuit which dismissed the Appeal citing to Apple’s lack of Article III standing. The Federal Circuit rejected Apple’s interpretation of MedImmune, Inc. v. Genentech, Inc., which Qualcomm argued “would grant a licensee standing to challenge any single licensed patent in a portfolio, even if the validity of any one patent would not affect the licensee’s payment obligation.” The Federal Circuit was also unpersuaded by Apple’s argument that standing should be granted since Qualcomm may sue Apple in the future after the license agreement expires. Following their unsuccessful appeal to the Federal Circuit, Apple petitioned for certiorari. Apple’s petition was supported by a number of amici. Amicus briefs for Qualcomm were due January 19.

Qualcomm Brief

In its brief, Qualcomm argued that the Federal Circuit correctly applied the MedImmune precedent to the facts of this case and that this is not a cert-worthy issue. Qualcomm asserted that, in MedImmune, the Supreme Court held “a licensee need not breach a license agreement to establish standing to challenge a licensed patent,” so long as “the licensee can demonstrate that a declaration of the patent’s invalidity would relieve it of a cognizable injury.” Unlike MedImmune, here, Qualcomm asserted that Apple failed to identify any cognizable injury it suffers or will suffer if denied Article III standing to challenge the patents at issue. Specifically, Qualcomm argued “Apple nowhere argues or provides evidence that the validity of the ‘037 patent or ‘362 patent, would affect its ongoing royalty payment obligation.”

In Qualcomm’s view, Apple could have avoided the standing issue if it presented evidence indicating that invalidation of the patents at issue would remedy an injury. However, absent such a showing, Qualcomm contended that “without any concrete consequence flowing to Apple from the patents’ invalidation, the parties’ academic disagreement cannot support Article III standing.” According to Qualcomm, Apple failed not only to show that the patents’ invalidation would alter their payment obligations, but also failed to show how any contractual dispute would be settled by an invalidity ruling or that Apple would no longer need its portfolio license if these patents were invalidated.

For Qualcomm, the central issue is whether and after what showing Article III standing is conferred to a licensee to challenge validity when a single license agreement provides rights to multiple patents. Apple urged the court to adopt the view that MedImmune endows licensees’ Article III standing without requiring a showing of evidence to link the patent’s invalidation to reduced royalties or some other articulable consequence for the licensee. Qualcomm finds this view offensive to precedent arguing that such an interpretation would “effectively exempt patent licensees from standard Article III principles.” Therefore, Qualcomm urged the Court to decline Apple’s request for certiorari alleging that granting such a request would amount to “nothing but an advisory opinion,” since it would not in Qualcomm’s view redress any injury.

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