Apple Inc. v. Qualcomm Incorporated, 20-1561 – 2021-04-07
The Federal Circuit held that a petitioner for inter partes review, who had been sued for patent infringement in district court but settled that litigation, lacked Article III standing to appeal an adverse result in IPR. The appeal stems from a suit that Qualcomm brought against Apple in the United States District Court for the Southern District of California for infringing claims of two patents. Apple subsequently sought an IPR and the Board issued a final Written Decision that Apple did not prove that the challenged claims in both patents were obvious. Following the decision, Apple and Qualcomm entered into a global settlement of all worldwide litigation between them, and Apple and entered into a six-year license agreement. The parties jointly moved to dismiss Qualcomm’s district court action with prejudice, which the district court granted but Apple appealed the Board’s final Written Decisions.
Standing to appeal, similar to standing to sue, is a jurisdictional constraint derived from Article III of the U.S. Constitution. Although the IPR statute confers a right to file an IPR, an appellant must still satisfy the requirements of Article III standing in order to appeal an adverse decision of the Board. Article III standing requires that the plaintiff must personally have: 1) suffered some actual or threatened injury; 2) that injury can fairly be traced to the challenged action of the defendant; and 3) that the injury is likely to be redressed by a favorable decision.
Apple argued that it had standing to appeal based on 1) ongoing payments as a condition in the license agreement; 2) the likelihood that they may be sued once the license agreement expires; and 3) the fact that the IPR statute contains an estoppel provision that would bar Apple from raising the arguments it made in IPR in a later proceeding. The Federal Circuit rejected Apple’s arguments, holding that the outcome of the IPR would not affect Apple’s payment obligations under the license, and that whether Qualcomm would sue Apple for infringement of the patents after the license expires was too speculative to give rise to standing. Finally, the Federal Circuit found that estoppel under 35 U.S.C. § 315(e) was not a sufficient injury to provide standing. The Federal Court concluded although Article III standing is not required to appear before an administrative agency, an appeal from an agency’s final action to a federal court requires the appellant to show an injury in fact which Apple failed to show.
Key Takeaway
While nearly any person may seek an inter partes review, an appellant must ‘supply the requisite proof of an injury in fact when it seeks review of an agency’s final action in a federal court. Standing at the federal courts is an issue a petitioner should consider both prior to filing a post-grant review at the PTAB and when appealing from the PTAB to the Federal Circuit.
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