Federal Circuit Finds that Challenger Lacks Standing to Appeal Decision on Validity of Licensed Patents

In Apple Inc. v. Qualcomm Inc., No. 2020-1561 (Fed. Cir. Apr. 7, 2021), the Federal Circuit held that Apple lacked standing to appeal a Patent Trial and Appeal Board decision upholding two Qualcomm patents that were part of a licensing agreement between the parties.  Qualcomm had sued Apple for infringing two of its patents, which Apple subsequently unsuccessfully attempted to invalidate through an IPR challenge.  Despite reaching a settlement in the litigation inclusive of a “covenant-not-to-sue” clause with respect to the two disputed patents, Apple appealed the PTAB decision.  Apple argued it had standing to be heard in the Federal Circuit because it had an obligation to pay royalties on the challenged patents.  However, the Federal Circuit found that Apple lacked standing on that ground because the validity of the two patents would not affect Apple’s payment obligations as the licensee, and thus there was no injury-in-fact over which Apple could reasonably sue.  Further, the Federal Circuit found no basis for standing based on the possibility of Qualcomm suing Apple for infringement after the license expires because such an outcome is too speculative, and Apple failed to present evidence of plans to make, use, offer to sell, or sell the infringing product after the expiration of the license.

Link to case is as follows:  http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/20-1561.OPINION.4-7-2021_1759839.pdf