Unwired Planet LLC

The Federal Circuit has hit the ground running in the early weeks of 2022, overturning two sizable damages verdicts on February 4: the California Institute of Technology’s (Caltech’s) $1.1B award against Apple and Broadcom and Quarterhill Inc. subsidiary Wi-LAN Inc.’s (WiLAN’s) $85.2M award against Apple. Now, recent activity suggests that at least the latter ruling could potentially have a ripple effect on other large damages awards currently on appeal. The ensuing weeks have seen the defendant-appellants in those cases cite the WiLAN opinion, which faulted a district court for allowing a flawed methodology that was “untethered to the facts of this case”, as relevant authority justifying similar reversals.

District Judge Rodney Gilstrap has just overturned the $506.2M damages award returned as part of an August 2020 jury verdict against Apple in standard essential patent (SEP) litigation brought by several subsidiaries of PanOptis Holdings, LLC (collectively, “PanOptis”). The court partly granted Apple’s motion for a new trial, as to damages alone, faulting PanOptis for requesting a separate bench trial for issues related to its fair, reasonable, and non-discriminatory (FRAND) licensing obligations—and Apple for not objecting to that plan. Due to that bench trial, the jury ultimately set its damages award without hearing any mention of FRAND principles at all, arriving at an unacceptably ambiguous verdict—a result that Judge Gilstrap saw coming.

The COVID-19 pandemic has forced courts to rethink many aspects of the patent litigation process. While a number of district judges have moved hearings and other procedures online, the nation’s top patent venues effectively suspended jury trials through most of the summer—until District Judge Rodney Gilstrap of the Eastern District of Texas resumed patent trials in August after local infection rates began to fall. However, as the pandemic moves further into its second wave, Judge Gilstrap has now taken the notable step of halting all jury trials before him after a coronavirus outbreak during a trial under another judge in the Eastern District. Judge Gilstrap stated that he was doing so “reluctantly” but asserted that he had no alternative—arguing that the face-to-face aspect of in-person trials is essential for due process.

District Judge Alan D. Albright has moved forward with his recently announced plan to resume jury trials in the Waco Division of the Western District of Texas despite the ongoing COVID-19 pandemic. On October 1, he presided over jury selection for what will be his first-ever patent jury trial, in litigation filed by inventor-controlled MV3 Partners LLC against Roku (6:18-cv-00308). While the decision to hold this trial is significant on its own, the leadup to jury selection in this case was not without its own intrigue. Shortly before the pretrial conference, Judge Albright ruled on a series of pending motions in limine, barring any characterization of the plaintiff as an NPE as well as any discussions of alleged forum shopping, among other topics, during voir dire and opening arguments. The ruling comes as the Federal Circuit, also last week, declined to rehear a recent decision that faulted Judge Albright for denying a convenience transfer in another campaign, amidst a broader debate over whether his treatment of such motions has unduly encouraged plaintiffs to pack the Waco Division with patent cases.

Optis Wireless Technology, LLC; Optis Cellular Technology, LLC; Unwired Planet, LLC; Unwired Planet International Limited; and PanOptis Patent Management, LLC (collectively, Optis Wireless) have sued Tesla (2:20-cv-00310) over the provision of automobiles—including the Tesla Model S, 3, X, and Y—that communicate over the 4G/LTE cellular networking standard. The plaintiffs also seek a declaratory judgment “that its negotiation toward a FRAND license with Tesla—both directly and via patent pool Avanci—complied with FRAND” and “that Tesla has acted in bad faith and has lost its right to obtain a FRAND license”. The case has been assigned to Judge Rodney Gilstrap in the Eastern District of Texas, who just tried an Optis Wireless case to a jury that returned a $506.2M verdict against Apple.

The nation’s top patent venues have adapted to the COVID-19 pandemic in markedly different ways, diverging most dramatically with respect to jury trials. While the Eastern District of Texas recently held the nation’s first patent jury trial since the start of the pandemic under District Judge Rodney Gilstrap, the Northern and Central Districts of California have issued orders suspending all such trials. However, until recently, both the Western District of Texas and the District of Delaware—the first- and second-most popular venues for NPE litigation, respectively—took a middle ground by giving presiding judges the discretion over whether to hold jury trials, effectively on a case-by-case basis. Now, District Judge Alan D. Albright has issued an order stating that the Western District’s Waco Division is ready to move forward with jury trials in patent cases, citing declining infection rates within that division and measures designed “to ensure trials can be conducted safely”.

The COVID-19 pandemic has forced courts and litigants alike to rethink some of the core mechanics of patent cases—perhaps most notably, triggering disputes over the timing and format of jury trials. As recently reported by RPX, this has led the nation’s top patent venues to diverge in their approach to such trials. In particular, District Judge Rodney Gilstrap of the Eastern District of Texas has bucked the trend and pushed forward with the nation’s first patent jury trial since the start of the pandemic, which ended on August 11 in a $506.2M infringement verdict against Apple in litigation brought by several subsidiaries of PanOptis Holdings, LLC. However, another judge in the same district has now signaled a more conservative approach: the day before that verdict, District Judge Robert W. Schroeder III continued a planned retrial in litigation between VirnetX Inc. and Apple at the defendant’s request. By so ruling, Judge Schroeder has aligned himself with courts in other popular venues that have also opted not to proceed with jury trials—including some that also leave such decisions up to the presiding judge and others that have halted trials district-wide.

A recent ruling in a Düsseldorf lawsuit filed by Unwired Planet International Limited may signal a dramatic shift in how Germany approaches fair, reasonable, and nondiscriminatory (FRAND) licensing disputes. On April 5, the Higher Regional Court of Düsseldorf issued an opinion after a February hearing in which it criticized Unwired Planet and other NPEs that acquire standard essential patents (SEPs) to seek higher licensing rates, asserting that such behavior is a “flagrant violation of the ban on discrimination under the FRAND rules”. That ruling, combined with a nascent legislative reform effort over injunctive relief, indicates that Germany may soon start to become less friendly toward patent plaintiffs overall. This is the second time in the past year that the Unwired Planet campaign has played a significant role in the development of European SEP jurisprudence, following the UK Court of Appeal’s ruling in Unwired Planet v. Huawei. Meanwhile, Chinese courts have only just begun to telegraph their posture toward international FRAND disputes, and a pending US appeal in litigation between two operating companies may soon provide further clarity on how American courts will approach these issues.

Weeks after the announcement of its acquisition by private equity firm Brevet Capital, PanOptis Holdings, LLC (through various litigating affiliates) has filed its first new infringement case in two years, suing Apple in the Eastern District of Texas over a group of patents declared essential to the LTE standard (2:19-cv-00066). Apple is accused of infringing the patents-in-suit—each of which originated with Ericsson, LG Electronics (LGE), Panasonic, or Samsung—through provision of “all [its] products capable of implementing the LTE standard”, including all “LTE-capable models” of Apple’s iPhone, iPad, Watch products. Three of the patents-in-suit have been previously asserted by PanOptis in a campaign that has also hit BlackBerry, Huawei, Kyocera, and ZTE.

Brevet Capital, a private equity firm based in New York, issued a press release on February 11 announcing that it has purchased multiple entities affiliated with Leslie Ware’s PanOptis Holdings, LLC, including litigating NPEs Optis Cellular Technology LLC; Optis Wireless Technology, LLC; and Unwired Planet, LLC. While terms of the deal remain confidential, a recent disclosure in a PanOptis suit against Huawei—the NPE’s last litigation filed since joining the Marconi Group in March 2017—provides details about which entities are now owned by Brevet.

European NPE litigation has begun to see a shift toward the UK for litigation of standard essential patents (SEPs) and fair, reasonable, and non-discriminatory (FRAND) licensing disputes in the wake of the UK High Court of Justice’s decision in Unwired Planet v. Huawei. Meanwhile, NPEs litigating in Germany have seen mixed success in their pursuit of injunctive relief, against frequent defendants, in recent weeks, with multiple German NPE suits also ending in settlement in campaigns waged by publicly traded American NPEs.

The Federal Circuit has rejected the Patent Trial and Appeal Board’s (PTAB’s) standard for what constitutes a “covered business method” (CBM) patent as overly broad (2015-1812). In an opinion issued on November 21, the court ruled that the PTAB had exceeded its authority by implementing a definition of a CBM patent that exceeds the statutory requirements established by the America Invents Act (AIA). By allowing CBM review of patents with subject matter “incidental to” or “complementary to” a financial activity, the court held, the Board has “render[ed] superfluous the limits” set by Congress. The Federal Circuit’s opinion stemmed from Unwired Planet LLC’s appeal of a final decision in a CBM review filed by Google (CBM2014-00006) against a location services patent (7,203,752).

The Federal Circuit has affirmed the Patent Trial and Appeal Board’s (PTAB’s) cancellation of a location-based services patent (7,024,205) asserted in district court by Unwired Planet LLC against Google (2015-1810). In an opinion issued on November 15, the court held that the PTAB had correctly found that all six claims from the ‘205 patent are invalid as obvious over prior art in an inter partes review filed by Google (IPR2014-00036). In light of that decision, the court also dismissed as moot an appeal of the Board’s final ruling in a Google covered business method (CBM) review (CBM2014-00005) against the ‘205 patent (2015-1811). Unwired Planet’s sole lawsuit against Google (3:12-cv-00504) remains stayed pending the outcome of the PTAB proceedings against the ‘205 patent here resolved by the Federal Circuit, with the other nine patents-in-suit already dropped from the case.

The Federal Circuit has overturned a judgment of non-infringement in Unwired Planet LLC’s infringement suit against Apple (2015-1725). In a precedential opinion issued on July 22, 2016, the court partially vacated multiple summary judgment orders handed down in April and May 2015 by District Judge Vince Chhabria, who had ruled that Apple did not infringe four of the patents-in-suit (6,317,831; 6,321,092; 6,532,446; 6,647,260). However, the Federal Circuit reversed as to three of the asserted patents, holding that Judge Chhabria had relied on improper constructions of certain terms from the ‘446 and ‘260 patents, and that he had applied the wrong legal standard with respect to the ‘092 patent.