Optis Cellular Technology, LLC v. Apple Inc., Appeal Nos. 2022-1904, -1925 (Fed. Cir. June 16, 2025)

In this week’s Case of the Week, the Court of Appeals for the Federal Circuit vacated a jury decision awarding $300,000,000 in damages against Apple, Inc. for infringement of patents essential to practicing the Long-Term Evolution (“LTE”) standard, a global standard for telecommunications devices.  The Court’s decision turned largely on the propriety of a jury instruction querying whether Apple had infringed “any of the asserted claims”—which was held to be improper—and also addressed questions of, inter alia, patent eligibility, claim construction, indefiniteness, and damages in the standards licensing context.

In the telecommunications industry, global standards like the LTE standard ensure the interoperability of telecommunication devices, regardless of device maker. Standard development organizations, like the European Telecommunications Standards Institute (“ETSI”), are responsible for developing these standards. Standards often incorporate patented technology, known as standard-essential patents (“SEPs”). When they do, compliant devices necessarily infringe claims that cover technology incorporated into the standard. As a result, companies developing standard-compliant devices must obtain licenses from the owners of such SEPs. To ensure that patentees are fairly compensated for their contributions while fostering widespread adoption of SEPs,  ETSI has created an Intellectual Property Rights (“IPR”) Policy. Under the IPR policy, SEP owners commit to licensing their SEPs on fair, reasonable, and nondiscriminatory (“FRAND”) terms. Relevant to this case, Optis asserted five separate patents (collectively, “the asserted patents”) that are SEPs covering technology essential to the LTE standard. Optis contends that various Apple iPhones, iPads, and Watches implementing the LTE standard infringe the asserted patents, and sued Apple for patent infringement in the U.S. District Court for the Eastern District of Texas.

Significantly, despite both parties requesting that the district court include infringement verdict questions on a patent-by-patent basis, the district court sua sponte included only a single infringement question covering all five asserted patents on the verdict form: “Did Optis prove by a preponderance of the evidence that Apple infringed ANY of the [a]sserted [c]laims?”

The jury answered in the affirmative and returned a verdict that Apple infringed one of more claims of the asserted patents, awarding $506,200,000 as a reasonable royalty for past sales. Apple moved for a new trial, arguing, inter alia, that the jury didn’t hear evidence regarding Optis’s obligation to license the patents on FRAND terms. The district court granted a new trial on damages, explaining: “[T]he jury never had any evidence that Optis’s patents were in fact FRAND-encumbered, nor did the jury hear any evidence as to what royalties would or could be FRAND. As a result, the verdict does not necessarily represent a FRAND royalty.” The district court declined, however, to grant a new trial as to liability – the ultimate focus of the appeal at hand.

In the subsequent damages retrial, before the jury returned a verdict, Apple filed written objections concerning its objection to the previous verdict form. The district court granted Apple’s request for a running objection. The jury awarded Optis $300,000,000 as a lump sum for past and future sales, and the court entered judgment denying Apple’s post-judgment motions.

Apple timely appealed, raising several issues, including whether the single infringement question on the verdict form covering all the asserted patents violated Apple’s right to jury unanimity. According to Apple, asking whether Optis proved that Apple infringed any of the asserted claims would erroneously require an affirmative answer even in a situation where all jurors did not agree that the same patent was being infringed. The Federal Circuit agreed, writing:

As long as each juror believed some claim of some patent was infringed, the jury was required to answer “Yes” – even if the various jurors believed that Apple was infringing a different asserted patent. In other words, the question whether Apple infringed “ANY” of the asserted claims erroneously required an affirmative answer even in a situation where all jurors did not agree that the same patent was being infringed. The verdict form violated Apple’s right to jury unanimity on each legal claim against it…In the patent context, each patent asserted raises an independent and distinct cause of action, and therefore infringement must be separately proved as to each patent…Here, to announce the ultimate legal result of each cause of action and to ensure a unanimous verdict, the verdict form needed to have included, at the very least, separate infringement questions for each asserted patent, just as the parties jointly requested of the court.  (Cleaned up.)

Though the verdict form stated that the jury’s answers to all questions must be unanimous and the jury was instructed that infringement is assessed on a claim-by-claim basis, the Court found that nothing instructed the jury that, to answer “Yes” to the infringement question, all jurors had to unanimously agree that the same patent was infringed. Optis insisted that the Court could be confident that the jury was unanimous in finding all asserted claims were infringed because the specific damages award corresponded exactly to the sum of the five numbers that Optis’s damages expert gave as the measure of damages for each patent. But the Court was not persuaded, finding that the jury could have reasonably understood the verdict sheet and instructions as directing it to add up its damages valuations associated with each claim even a single juror found infringed.

The Court vacated both the infringement judgment and the second damages retrial judgment awarding Optis $300,000,000. It wrote: “Unless and until Optis proves infringement at a new trial, there is no infringement finding on which any damages can be awarded.”

The Court went on to address some of Apple’s other liability-related arguments that may impact proceedings on remand, including: (1) whether the district court correctly held that some of one of the asserted patent’s claims are not directed to an abstract idea; (2) whether the district court correctly construed one claim of another of the asserted patents; and (3) whether one claim of a third asserted patent invokes § 112 ¶ 6.

The opinion can be found here.

By Julia Davis

ALSO THIS WEEK

Realtek Semiconductor Corporation v. International Trade Commission, Appeal No. 2023-1187 (Fed. Cir. June 18, 2025)

The Federal Circuit dismissed an appeal from an International Trade Commission (“ITC”) decision declining to impose sanctions on a Section 337 complainant, holding that it lacked jurisdiction to review ITC orders not affecting any determination on the merits.  Appellant Realtek sought sanctions from complainant Future Link Systems, LLC, after learning that Future Link had entered into a third-party license agreement under which it had undertaken to file a lawsuit against Realtek.  Future Link voluntarily dismissed its Section 337 complaint shortly after filing, the assigned administrative law judge declined Realtek’s request for sanctions, and the Commission adopted the ALJ’s decision.  On review, the Court explained that its appellate jurisdiction was circumscribed by 19 U.S.C. § 1337(c), which provided for Federal Circuit review of final determinations under § 1337(d), (e), (f), or (g), but not sanctions decisions under subsection (h).  The Federal Circuit also lacked ancillary jurisdiction because the decision had not affected any reviewable determination.  However, § 1337(c) expressly provides that subjection (h) determinations are reviewable under the Administrative Procedures Act, and the panel suggested (without deciding) that Realtek’s petition for review could potentially be heard by a federal district court.

The opinion can be found here.

By Jason A. Wrubleski

Ancora Technologies, Inc. v. Roku, Inc., Appeal Nos. 2023-1674, -1701 (Fed. Cir. June 16, 2025)

Also this week, the Federal Circuit vacated an obviousness finding by the Board, finding that the Board’s obviousness analysis did not give sufficient weight to license agreements involving the patent at issue.

Ancora Technologies, Inc.’s (“Ancora”) Patent No. 6,411,941 was subject to two separate inter partes reviews, and the Board found the ‘941 patent to be obvious in both.  On appeal, Ancora argued that: (1) the Board erred in construing the term “agent”; (2) that if the Board did properly construe “agent,” the Board otherwise erred in determining obviousness based on prior art; and (3) the Board erred in its analysis of objective indicia of nonobviousness. Regarding Ancora’s first two arguments, the Federal Circuit found that substantial evidence supported the Board’s findings.  Regarding the third argument, the Board had found no nexus between the challenged claims of the ‘941 patent, and licenses that Ancora used to settle similar claims of infringement against third parties for substantial license fees, because Ancora “d[id] not establish whether these licenses resulted directly from the unique characteristics of the claimed subject matter of the ’941 patent.”  The Federal Circuit found that the Board incorrectly applied a heightened nexus standard, explaining that when it comes to evaluating objective indicia of obviousness, licenses are subject to a less exacting nexus standard than are products, because unlike products, which may incorporate parts and features unrelated to a patent at issue, licenses for a patent are by their nature directly tied to the patented technology.  Licenses, unlike other forms of objective evidence of obviousness, do not require a nexus to the specific claims at issue, and the patent at issue does not need to be the only patent subject to the license or the sole motivation for the license.  The Federal Circuit found that clear evidence that substantial license fees were paid late in litigation for the patent at issue should be given significant, if not controlling, weight, as an objective indicia of nonobviousness.  On the other hand, the Federal Circuit also suggested that other lower-value licenses that Ancora had entered into should also be considered, as possibly countervailing evidence that the patent at issue is obvious.

The full opinion can be found here.

By Tyler Hall

This article summarizes aspects of the law and does not constitute legal advice. For legal advice with regard to your situation, you should contact an attorney.