Intellectual Property News and Reports

Optis Cellular Technology, LLC, Optis Wireless Technology, LLC, PanOptis Patent Management, LLC, Unwired Planet International, Ltd., and Unwired Planet, LLC (collectively, “Optis”) sued Apple Inc. (“Apple”) for patent infringement in the U.S. District Court for the Eastern District of Texas. Relevant here, Optis asserted U.S. Patent Nos. 9,001,774 (“the ’744 patent”), 8,019,332 (“the ’332 patent”), 8,385,284 (“the ’284 patent”), 8,102,833 (“the ’833 patent”), and 8,411,557 (“the ’557 patent”) (collectively, “the asserted patents”). The asserted patents are standard-essential patents (“SEPs”) that cover technology essential to the Long-Term Evolution (“LTE”) standard. Optis contends various Apple iPhones, iPads, and Watches implementing the LTE standard infringe the asserted patents. The jury returned a verdict that Apple infringed certain claims of the asserted patents and awarded $506,200,000 as a reasonable royalty for past sales.1 Apple moved for a new trial arguing that the jury did not hear evidence regarding Optis’s obligation to license the patents on fair, reasonable, and nondiscriminatory (“FRAND”) terms. The district court granted a new trial only on damages as to the amount of a FRAND royalty for the use of the asserted patents. In the subsequent damages retrial, the jury awarded Optis $300,000,000 as a lump sum.

For the reasons below, we vacate both the infringement and second damages judgments and remand for proceedings consistent with this opinion, including a new trial on infringement and damages. We dismiss Optis’s cross-appeal to reinstate the original damages verdict and need not reach those arguments. We also reverse the district court’s finding that (1) claims 6 and 7 of the ’332 patent are not directed to an abstract idea under 35 U.S.C. § 101; and (2) claim 1 of the ’557 patent does not invoke 35 U.S.C. § 112 ¶ 6. We affirm the district court’s construction of claim 8 of the ’833 patent. Last, we conclude that the district court abused its discretion under Federal Rule of Evidence 403 by admitting into evidence the Apple-Qualcomm settlement agreement and Optis’s damages expert’s testimony concerning that agreement.

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