`
`No. 21-746
`
`IN THE
`Supreme Court of the United States
`
`
`APPLE INC.,
`
`v.
`
`QUALCOMM INCORPORATED,
`
`Petitioner,
`
`Respondent.
`
`
`ON PETITION FOR A WRIT OF CERTIORARI TO THE
`UNITED STATES COURT OF APPEALS
`FOR THE FEDERAL CIRCUIT
`
`SUPPLEMENTAL BRIEF FOR PETITIONER
`
`
`MARK C. FLEMING
` Counsel of Record
`WILMER CUTLER PICKERING
` HALE AND DORR LLP
`60 State Street
`Boston, MA 02109
`(617) 526-6000
`mark.fleming@wilmerhale.com
`
`CATHERINE M.A. CARROLL
`CLAIRE H. CHUNG
`THOMAS K. BREDAR
`WILMER CUTLER PICKERING
` HALE AND DORR LLP
`1875 Pennsylvania Ave., NW
`Washington, DC 20006
`(202) 663-6000
`
`LAUREN A. DEGNAN
`CHRISTOPHER W. DRYER
`FISH & RICHARDSON P.C.
`1000 Maine Ave., Suite 1000
`Washington, DC 20024
`(202) 783-5070
`
`
`
`
`
`
`
`TABLE OF CONTENTS
`
`Page
`TABLE OF AUTHORITIES ........................................... ii
`INTRODUCTION ............................................................... 1
`ARGUMENT ........................................................................ 2
`I. THE GOVERNMENT IGNORES OR
`MISINTERPRETS THIS COURT’S
`PRECEDENT, WHICH DEMONSTRATES
`THAT APPLE HAS STANDING ...................................... 2
`II. IF LEFT IN PLACE, THE FEDERAL
`CIRCUIT’S DECISION WILL BE
`INCREASINGLY DISRUPTIVE TO THE
`PATENT SYSTEM ........................................................... 8
`CONCLUSION ................................................................. 12
`
`
`
`
`
`
`ii
`
`TABLE OF AUTHORITIES
`
`CASES
`
`Page(s)
`Altvater v. Freeman, 319 U.S. 359 (1943) .................... 2, 4
`Apotex, Inc. v. Daiichi Sankyo, Inc.,
`781 F.3d 1356 (Fed. Cir. 2015) .................................... 7
`Apple Inc. v. Qualcomm Inc., 17 F.4th
`1131 (Fed. Cir. 2021) ................................................ 3, 7
`Cardinal Chemical Co. v. Morton
`International, Inc., 508 U.S. 83 (1993) ............ 2, 4, 10
`Consumer Watchdog v. Wisconsin Alumni
`Research Foundation, 753 F.3d 1258
`(Fed. Cir. 2014) ............................................................. 8
`Edward Katzinger Co. v. Chicago Metallic
`Manufacturing Co., 329 U.S. 394 (1947) ................... 9
`Lear, Inc. v. Adkins, 395 U.S. 653 (1969) ....................... 11
`Massachusetts v. EPA, 549 U.S. 497 (2007) .................... 8
`MedImmune, Inc. v. Genentech, Inc.,
`549 U.S. 118 (2007) ........................................... 2, 3, 4, 6
`Village of Arlington Heights v.
`Metropolitan Housing Development
`Corp., 429 U.S. 252 (1977) ........................................... 7
`
`DOCKETED CASES
`Apple Inc. v. Qualcomm Inc., No. 21-1327
`(U.S.)........................................................................... 1, 2
`
`STATUTORY PROVISIONS
`28 U.S.C. § 1295 ................................................................. 10
`35 U.S.C. § 315 ................................................................... 11
`
`
`
`
`
`
`
`IN THE
`Supreme Court of the United States
`
`No. 21-746
`
`
`APPLE INC.,
`
`v.
`
`QUALCOMM INCORPORATED,
`
`Petitioner,
`
`Respondent.
`
`
`ON PETITION FOR A WRIT OF CERTIORARI TO THE
`UNITED STATES COURT OF APPEALS
`FOR THE FEDERAL CIRCUIT
`
`SUPPLEMENTAL BRIEF FOR PETITIONER
`
`
`INTRODUCTION
`Petitioner Apple Inc. respectfully submits this
`supplemental brief in light of the invitation brief filed
`by the United States in this matter.
`The government does not deny that this case pre-
`sents an important issue of Article III standing that
`has already produced a dissent in the court of appeals
`in a follow-on case, see Pet., Apple Inc. v. Qualcomm
`Inc., No. 21-1327 (U.S. Apr. 1, 2022), and that the ques-
`tion presented is only going to recur if this Court does
`not resolve it, see Leahy & Issa Br. 17; Engine Advoca-
`cy Br. 22. The government’s recommendation that the
`Court nonetheless deny certiorari is based on a regret-
`table disregard of this Court’s governing precedent—
`
`
`
`
`
`2
`
`indeed, the government does not even cite Altvater v.
`Freeman, 319 U.S. 359 (1943), or Cardinal Chemical
`Co. v. Morton International, Inc., 508 U.S. 83 (1993),
`and confines MedImmune, Inc. v. Genentech, Inc., 549
`U.S. 118 (2007), so narrowly as to render it virtually
`meaningless in the portfolio licensing context. When
`those cases are properly applied, they show that Apple
`has standing to challenge the validity of patents that—
`but for the parties’ license agreement—Qualcomm
`would unquestionably accuse Apple of infringing.
`While the government ventures that Apple could
`have introduced certain hypothetical categories of evi-
`dence in support of standing, no such evidence is need-
`ed under this Court’s precedent. In any event, the
`Federal Circuit was clear that what doomed Apple’s
`standing was one thing and one thing only: “the validi-
`ty of the challenged patents would not impact Apple’s
`ongoing payment obligations” given other patents in
`the portfolio, Pet. App. 8a—a statement that would de-
`scribe countless portfolio licensees. If nothing else,
`therefore, the government’s brief demonstrates the
`sharp disagreement over an important issue with broad
`real-world impact. The Court should grant certiorari
`and resolve it.
`
`ARGUMENT
`I. THE GOVERNMENT IGNORES OR MISINTERPRETS THIS
`COURT’S PRECEDENT, WHICH DEMONSTRATES THAT
`APPLE HAS STANDING
`A. No one disputes the predicament Apple faces: it
`must either continue to pay royalties even while believ-
`ing the two patents at issue are invalid, or stop making
`payments and face an infringement suit, with its at-
`tendant risk of “‘actual
`[and] treble damages.’”
`
`
`
`
`
`3
`
`MedImmune, 549 U.S. at 132 (brackets in original). In
`other words, if Apple were to repudiate the license
`agreement based on its conviction that the ’037 and ’362
`patents are invalid, Qualcomm would sue and seek to
`impose the same “serious consequences” that this
`Court has held a licensee need not endure to satisfy Ar-
`ticle III jurisdiction. Id. at 122. After all, Qualcomm
`has not denied that it would sue if Apple stopped mak-
`ing payments, and Qualcomm is highly likely to sue
`given that it has sued on these very patents before and
`refused to grant Apple an irrevocable license through
`the patents’ expiration. That provides a “concrete and
`particularized injury” that satisfies Article III under
`MedImmune (U.S. Br. 10). Even Qualcomm has con-
`ceded that MedImmune recognized Article III injury
`based on “the near-certainty of an infringement action
`if [a licensee] repudiated the agreement.” Opp. 9.
`The only difference between the coercive circum-
`stances that Apple faces and those at issue in MedIm-
`mune is that, in the words of the Federal Circuit, “the
`license agreement [here] involves tens of thousands of
`patents.” Pet. App. 7a. But as Judge Newman ex-
`plained in the follow-on decision involving the same
`parties, Apple’s “concern is with the patents here on
`appeal, not a portfolio of patents for which no infringe-
`ment charge has been made,” and in that situation “ex-
`tensive precedent” shows that “a patent licensee has
`standing to challenge validity of the patents to which it
`is licensed, including challenge in federal court on ap-
`peal from [IPR] decisions.” Apple Inc. v. Qualcomm
`Inc., 17 F.4th 1131, 1140-1141 (Fed. Cir. 2021) (“Apple
`II”) (Newman, J., dissenting), pet. for cert. filed, No. 21-
`1327 (U.S. Apr. 1, 2022).
`Insofar as the government focuses on the fact that
`the parties in MedImmune had a contractual dispute
`
`
`
`
`
`4
`
`over whether royalties were owing in light of patent
`invalidity (U.S. Br. 13-15), this Court explained that the
`contractual claim “probably makes no difference to the
`ultimate issue of subject-matter jurisdiction.” 549 U.S.
`at 123. The “relevant coercion” supporting jurisdiction
`was “not compliance with the claimed contractual obli-
`gation, but rather the consequences of failure to do so,”
`meaning the potential infringement suit and its reme-
`dies. Id. at 130 n.9 & 132. The government offers no
`response to the Court’s emphasis on those consequenc-
`es, even while speculating what the Court might have
`meant in disavowing the relevance of any contractual
`dispute (U.S. Br. 18).
`For all its attempt to harmonize the decision below
`with MedImmune, moreover, the government is nota-
`bly silent on Altvater and Cardinal Chemical, which, as
`Apple explained, reinforce its standing. See Pet. 16-17;
`Reply Br. 6. In Altvater, this Court upheld jurisdiction
`based on the “risk” that, if the licensees stopped mak-
`ing payments, they would face “not only actual but tre-
`ble damages in infringement suits.” 319 U.S. at 365.
`And in Cardinal Chemical, this Court explained that
`“[i]f, in addition to th[e] desire [to avoid patent en-
`forcement], a party has actually been charged with in-
`fringement of the patent, there is, necessarily, a case or
`controversy adequate to support jurisdiction.” 508 U.S.
`at 96. Apple faces the same risk as in Altvater, and its
`standing to challenge the ’037 and ’362 patents is fur-
`ther supported by Cardinal Chemical because Qual-
`comm has already sued Apple for infringement of those
`patents. That the government fails to address either
`case at all speaks volumes about the unsoundness of its
`doctrinal analysis.
`B. The thrust of the government’s argument is that
`Apple lacks standing because of the “evidentiary rec-
`
`
`
`
`
`5
`
`ord.” U.S. Br. 10-11; see also id. 16, 18, 19-20. But the
`government’s demand that Apple have proffered par-
`ticular evidence only begs the question whether such
`evidence was required in the first place, which is pre-
`cisely the issue this Court should grant certiorari to de-
`cide. The fact that the government disagrees with Ap-
`ple on the answer to that question is not a reason to de-
`ny review of the important and recurring question it-
`self. And in any event, the government is wrong that
`such evidence is needed.
`First, to the extent the government, like the Fed-
`eral Circuit, believes Article III requires proof that in-
`validating the patents-in-suit would change Apple’s
`royalty payments (e.g., U.S. Br. 10), Apple has already
`explained above why that is incorrect. The injury-in-
`fact that MedImmune, Altvater, and Cardinal Chemi-
`cal require is the coercion stemming from the near-
`certainty of an infringement suit and the serious conse-
`quences it could impose; they do not require a specific
`effect on royalty payment obligations.
`Second, the government’s insistence on evidence
`that, “but for the ’037 and ’362 patents, [Apple] would
`not have signed (or would now repudiate) its license
`agreement” (U.S. Br. 10) is baffling. That is simply not
`how portfolio licensing works in practice. Indeed, the
`whole point of portfolio licensing is to avoid the burden-
`some task of evaluating and negotiating over each indi-
`vidual patent and its claimed technology, to create effi-
`ciency and certainty for the licensee. Pet. 28-29. More-
`over, the evidence the government demands is not re-
`quired to show that the patents cause an injury-in-fact
`to Apple that would be redressed by their invalidation.
`That injury instead is shown by Qualcomm’s demon-
`strated willingness to sue on the patents, but for the
`license agreement. If the government is doubting
`
`
`
`
`
`6
`
`whether Qualcomm would bring an infringement suit
`based on the ’037 and ’362 patents, as opposed to other
`patents in the portfolio, that doubt is dispelled by the
`fact that, out of all the patents in its portfolio, Qual-
`comm chose to assert these two patents in its previous
`suit against Apple before and has not denied that it
`would sue Apple on them again.
`Contrary to the government’s argument, moreover,
`Apple does not need to show that Qualcomm’s “owner-
`ship of the ’037 and ’362 patents is coercing [Apple] to
`maintain a license agreement that it would otherwise
`decline” (U.S. Br. 10). In MedImmune, the Court in-
`quired whether MedImmune’s payment of royalties
`eliminated an otherwise live case or controversy, and
`answered no. 549 U.S. at 128. The same question aris-
`es here, only in the added context of portfolio licensing:
`given Qualcomm’s prior suit, do Apple’s ongoing pay-
`ments under the license agreement extinguish Apple’s
`standing to challenge the validity of the licensed pa-
`tents merely because other patents are also licensed?
`The answer, as in MedImmune, is no.
`Third, although the government argues (U.S. Br.
`10) that there is “no evidence that the ’037 and ’362 pa-
`tents are constraining [Apple’s] manufacturing or sales
`choices,” that is true of any licensee that has not repu-
`diated the license agreement, including the licensee in
`MedImmune. Again, the “serious consequences” that
`supported Article III jurisdiction in MedImmune were
`consequences of failure to pay, not of continued pay-
`ments. 549 U.S. at 122, 131-132.
`C. As Apple explained, the Federal Circuit did not
`deny that, had the parties entered into two individual
`licenses with separate royalties for the two asserted
`patents, Apple would have had Article III standing to
`
`
`
`
`
`7
`
`maintain its appeals under MedImmune. The court’s
`analysis thus effectively limits MedImmune to single-
`patent licenses. The government purports to disclaim
`that result (U.S. Br. 18-20), but its arguments lack mer-
`it and, if adopted, would discourage portfolio licenses.
`At the outset, the government concedes that, under
`its approach, “standing generally will be obvious” in
`cases involving single-patent licenses but “less clear”
`where, as here, “a license agreement covers a large
`number of patents and royalties are not set on a patent-
`by-patent basis.” U.S. Br. 19. Although the govern-
`ment asserts that portfolio licensees can overcome that
`hurdle by introducing “specific evidence” discussed
`above, such evidence is not necessary for the reasons
`just explained and, at any rate, undeniably burdens
`portfolio licensees, thereby disincentivizing the use of
`such licenses. See also infra Part II.
`The government’s acknowledged burden on portfo-
`lio licensees is particularly unjustified because, as this
`Court recognized in Village of Arlington Heights v.
`Metropolitan Housing Development Corp., a party has
`standing to press a challenge that would remove one
`legal barrier to obtaining relief, notwithstanding other
`independent barriers, so long as there is a “‘substantial
`probability’” of obtaining the relief with the removal of
`the barrier at issue. 429 U.S. 252, 264 (1977). Judge
`Newman recognized as much, explaining in the follow-
`on decision that “a licensee has standing to challenge
`validity even though other barriers to commercial ac-
`tivity remain in place.” Apple II, 17 F.4th at 1141
`(Newman, J., dissenting) (citing Apotex, Inc. v. Daiichi
`Sankyo, Inc., 781 F.3d 1356, 1364-1365 (Fed. Cir.
`2015)).
`
`
`
`
`
`8
`
`The government hardly engages with Arlington
`Heights, claiming only that Apple has not “even alleged
`a ‘substantial probability’” of relief. U.S. Br. 18. To the
`contrary, Apple explained in its petition that the Fed-
`eral Circuit’s invalidation of the ’037 and ’362 patents
`would remove a significant barrier to eliminating Qual-
`comm’s threat, since invalidation would reduce the
`magnitude of Apple’s potential liability and the scope of
`any potential injunction. Pet. 21. Apple was not re-
`quired to also establish, as the government contends
`(U.S. Br. 20), that its challenges to the patents at issue
`are “part of a broader effort to eliminate its need for
`the license agreement.” The relevant question under
`Arlington Heights (as informed by MedImmune, Alt-
`vater, and Cardinal Chemical) is whether a licensee
`faces a threat of an infringement suit that can be elimi-
`nated one patent at a time. Apple unquestionably does,
`given that Qualcomm chose to enforce the ’037 and ’362
`patents among the tens of thousands in the portfolio
`and does not deny that it will do so again if Apple stops
`making royalty payments.1
`
`II. IF LEFT IN PLACE, THE FEDERAL CIRCUIT’S DECISION
`WILL BE INCREASINGLY DISRUPTIVE TO THE PATENT
`SYSTEM
`As this Court has explained, “our competitive
`economy” depends on “keeping open the way for inter-
`
`1 The government’s argument that invalidation of the ’037 and
`’362 patents would not “redress any injury to” Apple (U.S. Br. 11)
`fails for the same reasons. Further, as the Federal Circuit has ex-
`plained, where, as here, “Congress has accorded a procedural right
`to a litigant,” “certain requirements of standing,” including re-
`dressability, “may be relaxed.” Consumer Watchdog v. Wisconsin
`Alumni Rsch. Found., 753 F.3d 1258, 1261 (Fed. Cir. 2014) (citing
`Massachusetts v. EPA, 549 U.S. 497, 517-518 (2007)).
`
`
`
`
`
`9
`
`ested persons to challenge the validity of patents which
`might be shown to be invalid.” Edward Katzinger Co.
`v. Chicago Metallic Mfg. Co., 329 U.S. 394, 400-401
`(1947). Yet based on a misapplication of this Court’s
`precedent, the Federal Circuit’s decision significantly
`restricts licensees’ ability to challenge questionable pa-
`tents. The Court should correct this mistake before it
`inflicts further harm. See Leahy & Issa Br. 17-18 (not-
`ing that the “Federal Circuit’s errors in this case are
`not limited to Apple and Qualcomm or even the elec-
`tronics industry” and that “[w]ithin months, the Feder-
`al Circuit applied the precedent of this case” in another
`context).
`Patent owners such as Qualcomm often demand li-
`censing of entire portfolios, rather than individual pa-
`tents. While the government surmises (U.S. Br. 20)
`that, under the Federal Circuit’s standard, “there are
`various ways in which licensees operating under multi-
`patent licenses can seek to establish standing to chal-
`lenge particular patents covered by the license,” not
`only are the government’s purported “ways” unjusti-
`fied, but the licensor-licensee dynamic could make such
`alternatives practically difficult, if not impossible, to
`achieve. For example, licensees presented with take-it-
`or-leave-it portfolio license agreements are not in a po-
`sition to insist that royalty payments be calculated on a
`patent-by-patent basis. And even if a portfolio licensee
`could somehow structure a license agreement such that
`invalidation of one or more covered patents would alter
`royalty payments, Article III standing should not de-
`pend on the happenstance of how parties structure
`portfolio licenses. See Reply Br. 8-9. The government
`largely turns a blind eye to that reality, thereby allow-
`ing patent owners to negotiate themselves out of Arti-
`
`
`
`
`
`10
`
`cle III jurisdiction by licensing patents in bulk, rather
`than one-by-one.
`Nor does the government engage with the broad
`impact this evasion of MedImmune would have. First,
`the Federal Circuit has exclusive jurisdiction over pa-
`tent appeals, 28 U.S.C. § 1295(a)(1), (4), and therefore
`its narrow approach to standing has “special im-
`portance to the entire Nation,” Cardinal Chem., 508
`U.S. at 89. Second, portfolio licensing is increasingly
`common. See Leahy & Issa Br. 17 (“Multi-patent and
`entire-portfolio licenses like Apple’s and Qualcomm’s
`are increasingly common.”); Engine Advocacy Br. 22
`(“Portfolio licensing has proliferated over the last two
`decades and is currently a very common practice.”).
`And if this Court were to signal that MedImmune can
`be circumvented with multi-patent licenses by denying
`review in this case, licensors will only be more embold-
`ened to insist on them in the future. This will unfairly
`undermine licensees’ ability to rely on a valuable tool
`that produces efficiencies for everyone. Pet. 28-29. As
`the amici explain, the practical consequences of such an
`outcome are severe. See Engine Advocacy Br. 4 (ex-
`plaining the “stark” “practical consequences”); Leahy &
`Issa Br. 2 (the Federal Circuit’s approach to standing
`“threatens to undermine one of the major achievements
`of” the Leahy-Smith America Invents Act); Unified Pa-
`tents Br. 4-10 (the question presented is a recurring
`issue); Thales Br. 2 (patent owners “are likely to seize
`on the Federal Circuit’s decision” to “restrict the abil-
`ity” of portfolio licensees to challenge questionable pa-
`tents). And the impact will hit smaller companies par-
`ticularly hard. See Engine Advocacy Br. 4 (“Startups,
`small businesses, and the broader public bear the bur-
`den of wrongly-granted patents which unjustly ob-
`
`
`
`
`
`11
`
`struct innovation, competition, and access to technolo-
`gy.”).
`The standing rule supported by the government
`here is also bad policy. It would mean that a portfolio
`licensee who settles a suit would effectively lose the
`right to appeal an unfavorable IPR decision, even
`though, as this Court explained, “[l]icensees may often
`be the only individuals with enough economic incentive
`to challenge the patentability of an inventor’s discov-
`ery,” Lear, Inc. v. Adkins, 395 U.S. 653, 670 (1969).
`And as Qualcomm has indicated it will argue, statutory
`estoppel might prevent the licensee from reasserting
`invalidity if the patent owner sues again after the li-
`cense expires. See 35 U.S.C. § 315(e); Pet. 24-25. Un-
`der the Federal Circuit’s approach, then, the only way
`for a portfolio licensee to be sure it can challenge patent
`validity is to repudiate the portfolio license agreement
`and face the consequences of an infringement suit—a
`result that this Court expressly rejected in MedIm-
`mune.
`At bottom, the government’s contention that the
`Federal Circuit’s decision is only a “case-specific de-
`termination” based on “the particular terms of the li-
`cense agreement between the parties” (U.S. Br. 8)
`rings hollow. Qualcomm and the government essential-
`ly concede that, under the Federal Circuit’s rule, stand-
`ing will be far more difficult to demonstrate under a
`portfolio license than under a single-patent license. See
`Opp. 18; U.S. Br. 19. This is contrary to MedImmune
`and the strong federal policy of allowing challenges to
`questionable patents in court. Given the widespread
`and growing use of portfolio licenses, this Court should
`grant review and decide the question presented now.
`
`
`
`
`
`12
`
`CONCLUSION
`The petition for a writ of certiorari should be
`granted.
`
`Respectfully submitted.
`
`MARK C. FLEMING
` Counsel of Record
`WILMER CUTLER PICKERING
` HALE AND DORR LLP
`60 State Street
`Boston, MA 02109
`(617) 526-6000
`mark.fleming@wilmerhale.com
`
`CATHERINE M.A. CARROLL
`CLAIRE H. CHUNG
`THOMAS K. BREDAR
`WILMER CUTLER PICKERING
` HALE AND DORR LLP
`1875 Pennsylvania Ave., NW
`Washington, DC 20006
`(202) 663-6000
`
`LAUREN A. DEGNAN
`CHRISTOPHER W. DRYER
`FISH & RICHARDSON P.C.
`1000 Maine Ave., Suite 1000
`Washington, DC 20024
`(202) 783-5070
`
`JUNE 2022
`
`
`
`
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