February 2, 2023

Volume XIII, Number 33

Advertisement

February 02, 2023

Subscribe to Latest Legal News and Analysis

February 01, 2023

Subscribe to Latest Legal News and Analysis

January 31, 2023

Subscribe to Latest Legal News and Analysis

January 30, 2023

Subscribe to Latest Legal News and Analysis
Advertisement

Don’t Stand for It—Collateral Estoppel and Standing

In a series of related cases, the US Court of Appeals for the Federal Circuit affirmed two decisions from the US District Court for the District of Delaware regarding collateral estoppel on standing issues and reversed a decision from the US District Court for the Northern District of California regarding the effect of license termination on standing. Uniloc 2017 LLC v. Google LLC, Case No. 21-1498 (Fed. Cir. Nov. 4, 2022) (Lourie, Dyk, Hughes, JJ.); Uniloc USA, Inc. v. Motorola Mobility LLC, Case No. 21-1555 & Uniloc LLC v. Blackboard Inc., Case No. 21-1795 (Fed. Cir. Nov. 4, 2022) (Lourie, Dyk, Hughes, JJ.)

These actions arose out of a series of patent suits filed by various Uniloc entities against tech companies in the Eastern District of Texas, the Western District of Texas and the District of Delaware involving several different patents. The Eastern District of Texas case against Google was transferred to the Northern District of California, and the Western District of Texas case against Blackboard was transferred to the District of Delaware. All three cases were dismissed for lack of standing due to a prior license agreement.

In 2014, a Uniloc entity entered into a Revenue Sharing and Note and Warrant Purchase Agreement with Fortress regarding a loan Fortress made to Uniloc. Under the terms of this agreement, if Uniloc defaulted, Fortress would receive a royalty-free license with the ability to sublicense. Uniloc defaulted in March 2017. In May 2018, Uniloc and Fortress entered into a Payoff and Termination Agreement, which explicitly terminated the patent licenses.

Uniloc sued several companies, including Motorola, Blackboard and Apple, in the period between the default and the Termination Agreement. In the Apple case, the district court found Uniloc lacked standing because it had granted a royalty-free license with the ability to sublicense to Fortress. The cases involving Motorola and Blackboard were subsequently dismissed for lack of standing. Uniloc appealed the decision in the Apple case but later settled with Apple. The settlement did not address vacatur of the district court decision. When Uniloc appealed the Motorola and Blackboard decisions, Motorola and Blackboard raised collateral estoppel. Given the virtually identical factual circumstances, the Federal Circuit held that collateral estoppel applied and that Uniloc could not relitigate the standing issues.

Unlike the cases involving Motorola and Blackboard, Uniloc filed the action against Google after it entered into the Termination Agreement with Fortress. At the district court, Google argued that Uniloc lacked standing because the Termination Agreement could not terminate the irrevocable license provision and that as a consequence of the grant under the Termination Agreement Uniloc lacked standing. Applying New York law (as the law governing the contract), the district court held that the Termination Agreement could not terminate the irrevocable license and therefore dismissed the case for lack of standing. The Federal Circuit, reviewing the issue of law de novo, held that “irrevocable” referred to whether Uniloc could unilaterally terminate an agreement, and not to whether the parties could mutually agree to terminate the agreement. The Federal Circuit reversed the decision and remanded the case.

Based on the limited issues before the court, Judge Dyk’s opinions did not reach the issue of whether Uniloc’s license to Fortress would have deprived Uniloc of standing. Judge Lourie, writing as an additional viewpoint in the Motorola and Blackboard decisions, affirmatively stated that Uniloc’s sublicense did not deprive it of standing but that collateral estoppel prevented the suit from going forward.

Practice Note: In drafting settlement agreements where there have been adverse final decisions by courts, consider whether to seek vacatur of those decisions. Be aware, however, that courts may decline a request for vacatur, notwithstanding the parties’ wishes. Additionally, under New York Law, an “irrevocable” license can still be terminated by mutual agreement.

© 2023 McDermott Will & EmeryNational Law Review, Volume XII, Number 314
Advertisement
Advertisement
Advertisement

About this Author

Associate

Sarah J. Fischer focuses her practice on intellectual property patent litigation and patent licensing disputes, particularly for life-science, pharmaceutical and high-tech clients, in district court and before the PTAB, on behalf of both patent holders and defendants/petitioners. She handles all facets of pretrial discovery, case management and trial preparations. Sarah also counsels clients on due diligence, pre-suit matters and claim drafting strategies.

Sarah clerked for Chief Judge Ron Clark of the United States District Court for the Eastern District of Texas.

+1 617 535 5981
Advertisement
Advertisement
Advertisement