The Fifth Circuit has ordered the dismissal of a lawsuit filed by automotive component supplier Continental against Internet of Things (IoT) licensing platform Avanci, LLC and several licensing partners. On February 28, the court determined that the plaintiff was not an “intended beneficiary” of the Avanci patent owners’ contractual commitments to license their standard essential patents (SEPs) on fair, reasonable, and nondiscriminatory (FRAND) terms. As a result, the Fifth Circuit ruled that the company had not suffered a sufficient injury from the defendants’ refusal to grant it a license, which in turn deprived it of Article III standing.

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.

Late last week, Optis Cellular Technology LLC; Optis Wireless Technology, LLC; and PanOptis Patent Management, LLC (collectively, PanOptis) and Huawei notified District Judge Rodney Gilstrap of the Eastern District of Texas that they have finalized and executed “an agreement that settles all matters in controversy between them”, concurrently moving the court to vacate both its March 2019 final judgment in the case and its November 2019 opinion finding the case exceptional and awarding attorney fees. The filing seeks an additional 37-day stay to facilitate “certain performance” to “occur by the end of March 2020”. The closure of the case will leave open in the PanOptis campaign only the February 2019 suit against Apple, in which Judge Gilstrap held a claim construction hearing late last week as well.

Over the past year, District Judge Rodney Gilstrap has dealt a series of setbacks to three subsidiaries of PanOptis Holdings, LLC—Optis Cellular Technology LLC; Optis Wireless Technology, LLC; and PanOptis Patent Management, LLC (collectively, PanOptis)—in their litigation asserting certain standard essential patents (SEPs). Last August, Judge Gilstrap ruled that PanOptis could not seek a declaratory judgment that its global license offer to Huawei, involving patents from various jurisdictions, had been fair, reasonable, and nondiscriminatory (FRAND), ruling that the NPE could only request such a judgment for its US patents. In March of this year, Judge Gilstrap also denied PanOptis’s request as to the US patents alone, holding that the record—reflecting license terms that did not give Huawei the option of a US-only license—lacked any evidence that would allow the court to rule on a US-only FRAND license. Apple has now made a similar set of arguments in a recently filed PanOptis lawsuit, asking that Judge Gilstrap dismiss the NPE’s claim seeking a declaratory judgment that global licensing offers made to Apple were FRAND for some of the same reasons cited by the court in March.