Apple loses standing to appeal PTAB decision when it settles with Qualcomm. APPLE v. QUALCOMM

When an inventor seeks a patent, the invention must meet several requirements for a patent to be granted but the fundamental requirements are that the invention is new, useful and not obvious. An invention is obvious if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time a patent application is filed describing the invention.

Prior art is anything known to a person skilled in the field of technology to which the patent is related. If an invention is described in a piece of prior art then the invention is obvious. Also if multiple pieces of prior art combined describe the features of an invention and a motivation to combine the prior art can be demonstrated, the invention is considered obvious. If prior art cannot be found which describes all the aspects of an invention, then the invention is not considered obvious and, assuming all the other requirements are met, the patent can be granted.

After a patent is granted, the patent can still be invalidated if evidence the invention was obvious is discovered. Any member of the public can institute an Inter Partes Review of a patent based on sections 35 U.S.C. § 102 (novelty requirement) and 35 U.S.C. § 103 (nonobviousness requirement). An Inter Partes Review is a trial proceeding conducted at the Patent Trial and Appeal Board to review the patentability of one or more claims of an issued patent. The Patent Trial and Appeal Board can accept new prior art from the public and modify or cancel a patent based on that prior art.

If a patent owner does not like a decision from the Patent Trial and Appeal Board, they can appeal the ruling to the Court of Appeals for the Federal Circuit. Whether the opposing party may appeal a Patent Trial and Appeal Board decision is a more complex question. Frequently, an Inter Partes Review is initiated by a defendant in a patent infringement case because the Patent Trial and Appeal Board move much faster than a federal court. The defendant can get the patent invalidated faster and the patent infringement case dismissed. In that case if the defendant does not like the Patent Trial and Appeal Board’s decision, they can appeal the decision to the Federal Circuit.

A settlement in a court case is more likely than a final verdict. Parties prefer to settle a case because it gives them more control over the outcome. The question then becomes, if a defendant in a patent infringement case loses an inter partes review and the case is settled, can a the defendant appeal the decision of the Patent Trial and Appeal Board to the Court of Appeals for the Federal Circuit?

APPLE INC. v. QUALCOMM INC., 20-1561 (C.A.F.C. 2021) is a case which deals with the issue of standing to maintain an inter partes review after a patent infringement case has been settled.

This case centers around U.S. Patent No. 7,844,037 and U.S. Patent No. 8,683,362 owned by Qualcomm. Qualcomm sued Apple for infringing claims of the ’037 patent and the ’362 patent in federal district court. Apple sought inter partes review of claims on the grounds of obviousness. The Patent Trial and Appeal Board found that Apple failed to establish that the patents were obvious. Meanwhile the patent infringement case was settled. Apple attempted to appeal the PTAB decision to the Court of Appeals for the Federal Circuit. Qualcomm responded that Apple lacked standing to appeal.

The Federal Circuit noted that to have standing in a federal court a party must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the opposing party, and (3) that is likely to be redressed by a favorable judicial decision. That definition of standing does not always apply to administrative agencies such as the PTAB. The Patent Act permits any person “who is not the owner of the patent” to file a petition for inter partes review. However, to appeal a PTAB decision, in a federal court, an appellant must demonstrate proof of an injury in fact. In this case since Apple and Qualcomm settled in federal court, Apple was no longer in danger of being sued for patent infringement and it lacked standing to appeal the PTAB’s decision.

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