The apportionment of patent rights can be a tricky business—particularly where a plaintiff has pledged its patents as collateral, as just illustrated by a new precedential decision from the Federal Circuit. In May 2022, Western District of Texas Judge Alan D. Albright dismissed a case brought by Intellectual Tech LLC (IT) against Zebra Technologies due to lack of standing, holding that because the plaintiff’s default on a loan gave its lender the option to sell the plaintiff’s patent or assert the patent itself, the plaintiff had been deprived of all substantial rights in that patent. However, the Federal Circuit ruled on May 1 that Judge Albright had fallen into an increasingly familiar trap by confusing the jurisdictional issue of standing, which requires a mere injury; with the issue of whether the plaintiff is a “patentee” as required to bring an infringement suit under 35 USC § 281.

As reported more fully above, the Federal Circuit has ruled that collateral estoppel (based on a settlement with Apple before an underlying district court opinion was reversed or vacated) blocks the predecessors of Uniloc 2017 LLC from arguing that it had standing before May 2018 to sue under its agreements with Fortress Investment Group LLC—and that a May 2018 termination of those agreements reset the board, clearing the way for litigation of cases filed later to proceed. However, Federal Circuit Judge Alan David Lourie went further. While acknowledging that the appellate court normally does “not opine on issues that are not necessary to decide a case” and while agreeing that the panel decision “soundly affirms the district court on the ground of estoppel”, Judge Lourie expressed a belief that “the district court so misconstrued the license issue that something further needs to be said about it”, which Judge Lourie did—in a concurring opinion.

The Federal Circuit has now weighed in on the standing issues arising from a set of agreements governing the long relationship between Fortress Investment Group LLC and subsidiaries of Uniloc Corporation Pty. Limited. The first issue arose initially in a set of cases filed against Apple and later in other actions, among them suits filed against Blackboard and Lenovo (Motorola Mobility): whether one or more defaults under mid-relationship funding agreements robbed Uniloc of sufficient rights in patents subject to those agreements such that Uniloc no longer owned the patents and therefore could not sue for infringement of them. The Federal Circuit applied collateral estoppel to block Uniloc from arguing that it retained the right to sue, holding that a settlement ended the Apple litigation before a district court opinion to the contrary was reversed (or vacated). Yet this only ended Uniloc’s related appeals in other cases filed before Fortress and Uniloc terminated the earlier controversial agreements in May 2018. In a companion decision, the Federal Circuit has held that the May 2018 termination agreement killed any license or rights granted to Fortress previously, however characterized, clearing the way for suits filed thereafter, including a set of 11 of them filed against Alphabet (Google), to proceed.

Over the past few years, Uniloc 2017 LLC has been embroiled in several appellate battles over legal issues stemming from its complex relationship with parent Fortress Investment Group LLC and other affiliates. The Federal Circuit has just closed another chapter in one of those battles, this one focused on whether Uniloc would be forced to unseal the details of its licenses with third parties as a result of a dispute over standing. A divided panel of that court has answered that question in the negative, holding that the public does not have a broad interest in the consideration paid for patent licenses—ordering Northern District of California Judge William Alsup to revisit a sweeping unsealing order that had already been the subject of one appeal and remand. The decision prompted a heated dissent from Circuit Judge Haldane R. Mayer.

RPX detailed last week how the once-prolific litigant Uniloc 2017 LLC, a Fortress Investment Group LLC subsidiary, has ceased the active filing of litigation as it fights multiple appellate battles before the Federal Circuit. One of those appeals challenges a ruling that the NPE lacked standing in litigation with Google, while a second appeal deals with a related decision requiring Uniloc 2017 to disclose various details on its licensing activity. On December 6, oral arguments for the latter appeal took place before the Federal Circuit, with judges pressing counsel for Uniloc, defendant-appellee Apple, and intervenor Electronic Frontier Foundation (EFF) on the proper standard for weighing motions to seal third-party licensing information.

Uniloc 2017 LLC was a notably prolific litigant around three years ago, but the NPE has since ceased the active filing of litigation as it fights appellate battles on multiple fronts. Late last month, one of those appeals ended adversely for the Fortress Investment Group LLC subsidiary, when the Federal Circuit affirmed a consolidated Patent Trial and Appeal Board (PTAB) decision for Apple, Facebook and WhatsApp, Huawei, and LG Electronics (LGE) that invalidated claims from a Uniloc patent and ordered the PTAB to reconsider two additional claims previously upheld. Meanwhile, that same court is weighing Uniloc’s challenges of two rulings with an already sweeping impact: an order finding that Uniloc lacked standing when it sued Alphabet (Google) based on a provision from its funding agreements with Fortress, and another in litigation against Apple that forced the NPE to unseal a swath of documents detailing its licensing activity.

Since late 2019, Apple and Intel have pursued claims against Fortress Investment Group LLC and a variety of affiliated NPEs, arguing in part that they have violated antitrust and unfair competition laws by aggregating and asserting a “massive but obscured” patent portfolio in order to charge supracompetitive royalty rates. The plaintiffs have now filed a second amended complaint (SAC) in that case, addressing certain pleading deficiencies flagged earlier this year by Northern District of California Judge Edward Chen but also adding a variety of additional facts providing context for the defendants’ alleged anticompetitive “scheme”. Perhaps the most significant newly disclosed information pertains to the 2018 deal in which Fortress acquired the assets and monetization business of Australian NPE Uniloc Corporation Pty. Limited—including key financial terms that Fortress and Uniloc had previously fought to keep under seal in other litigation.

RPX’s latest report on the patent ecosystem details how the Western District of Texas became the most popular patent venue in 2020, buoyed by efforts from District Judge Alan D. Albright of the Waco Division to attract such litigation. However, the past year also saw a rift develop between Judge Albright and the Federal Circuit over certain issues related to venue; specifically, his treatment of motions to transfer for convenience. After reversing Judge Albright’s denial of several such motions throughout 2020, the appellate court issued a split decision in November that granted Apple’s mandamus petition challenging one such ruling in litigation filed by Fortress Investment Group LLC subsidiary Uniloc 2017 LLC. The full Federal Circuit has now summarily rejected Uniloc’s petition for en banc review of that holding, known as In re: Apple, prompting Judge Albright to transfer the case to the Northern District of California. Uniloc, meanwhile, has indicated that it may seek further review from the US Supreme Court.

The COVID-19 pandemic has led most of the nation’s top patent venues to push scheduled jury trials back due to public health risks, with the notable exception of Texas. While District Judge Rodney Gilstrap of the state’s Eastern District recently halted jury trials after resuming them in August, District Judge Alan D. Albright of the Western District has not done so—even moving a scheduled trial from Austin, where the courthouse remains closed, to Waco, in an attempt to proceed with a scheduled January trial between VLSI Technology LLC and Intel. However, the Federal Circuit ruled on December 23 that Judge Albright moved the trial without proper authority and that doing so would require a complete convenience analysis to determine whether the entire case could be transferred to Waco. On December 31, Judge Albright granted plaintiff VLSI’s emergency motion for such a transfer, also announcing that he would push the trial back to mid-February to give Intel time to appeal.

Last month, District Judge William Alsup of the Northern District of California dismissed one of the many cases filed against Apple by subsidiaries of Uniloc Corporation Pty. Limited, holding that the NPE lacked standing because it had relinquished certain patent rights to funder Fortress Investment Group LLC by defaulting on a financing agreement. Judge Alsup has now dealt Uniloc another blow, in a related battle over confidentiality. After previously rejecting Uniloc’s attempt to seal a wide swath of information about its patent assertion business, Judge Alsup has ordered the NPE to disclose further information about its licenses with third parties, ruling on remand after the Federal Circuit, while largely upholding his earlier decision, directed him to revisit that issue. Meanwhile, Judge Alsup’s order on the plaintiff’s standing defects has continued to ripple through Uniloc’s other campaigns, triggering the dismissal of another set of cases, against Google.