IP Law Daily, PATENT—Fed. Cir.: Uniloc had standing to sue Google but not Motorola, (Nov 4, 2022)

By Brian Craig, J.D.

Uniloc is collaterally estopped in bringing suit against Motorola, but termination of a license agreement restored Uniloc’s standing to sue Google.

In two related appeals, the U.S. Court of Appeals for the Federal Circuit has concluded that Uniloc lacked standing to sue Motorola for infringement of a telephone-related patent, but that Uniloc had standing to sue Google for infringement of other technology patents. In a case against Motorola and also Blackboard, the Federal Circuit affirmed the decision of the federal district courts in Delaware and Texas in finding Uniloc is collaterally estopped from bringing suit based on a previous court’s interpretation of the sublicense for the patent. But in Uniloc’s suit against Google, the Federal Circuit reversed the decision of the federal district court in California and concluded that termination of a license agreement restored Uniloc’s standing to sue Google (Uniloc USA, Inc. v. Motorola Mobility LLC;Uniloc 2017 LLC v. Google LLC, November 4, 2022, Dyk. T.).

In Uniloc’s case against Motorola, the asserted patent concerns pairing a telephone with another device and using the other device to make a telephone call using the telephone’s cellular capabilities. The federal district court in Delaware granted Motorola’s motion to dismiss based on lack of standing. The district court in Delaware concluded that a previous case involving Uniloc and Apple case, a licensee (Fortress) acquired a license to the asserted patent. Therefore, the license deprived Uniloc of standing to sue. In a related case involving the same patent brought by Uniloc against Blackboard, the federal district court in Texas also concluded that Uniloc lacked standing.

In a separate case, Uniloc sued Google over patents related to multimedia content delivery, IT security, high-resolution imaging, network connectivity, video conferencing, image searching, and text searching. In the case against Google, the federal district court in California also granted Google’s motion to dismiss for lack of standing based on the license agreement. Uniloc appealed the decisions to the Federal Circuit. The Federal Circuit issued two separate but related opinions.

Collateral estoppel. In the cases involving Motorola and Blackboard, the Federal Circuit held that Uniloc was collaterally estopped in bringing suit; and therefore, lacked standing. The federal appeals court concluded that as a matter of collateral estoppel from the earlier case between Uniloc and Apple, decided in 2020, Fortress acquired a license to the asserted patents. This license deprived Uniloc of standing. The Apple case addressed and decided the very same issues as are presented here; those issues were actually litigated; the issues were determined by a valid and final judgment; and the determination of all three issues was essential to the prior judgment.

The Federal Circuit rejected all of Uniloc’s arguments on why collateral estoppel should not be applied. Even though the Apple case is being appealed, collateral estoppel can be applied based on a district court decision that is still pending on appeal. The Federal Circuit also rejected Uniloc’s argument that Motorola waived its issue preclusion argument. Furthermore, the appeals court found the standing issues were central to the Apple case on appeal. In fact, the standing issues were the only issues on appeal. This is not a situation in which potentially preclusive issues were overshadowed on appeal by issues to which preclusion would not apply. Because collateral estoppel applied, the Federal Circuit affirmed the dismissal of the cases against Motorola and Blackboard for lack of standing.

License termination. In Uniloc’s case against Google, the Federal Circuit concluded that termination of a license agreement extinguished the licensee’s right to sue and thus restored Uniloc’s standing to bring suit. The Federal Circuit based the opinion on interpretation of contract law under New York law. The panel found that the term “irrevocable” did not suggest that the license could not be eliminated by mutual agreement. Cases construing the term “irrevocable” agree that the term means only that the irrevocable thing cannot be unilaterally revoked by the party that granted the benefit.

Here, the Federal Circuit held the only reasonable interpretation of the “rights . . . which by their nature survive” language found in the termination agreement was that those rights did not include a bare unexercised license. Because the license did not survive termination, Fortress did not have the ability to sublicense the patents at issue when Uniloc brought suit against Google. Because Uniloc had standing to Google, the Federal Circuit reversed the decision of the federal district court in California and reinstated the case.

The Case is Nos. 21-1498 and 21-1555.

Attorneys: Jeffrey A. Lamken (MoloLamken LLP) for Uniloc 2017 LLC and Uniloc USA, Inc. Dan L. Bagatell (Perkins Coie LLP) for Google LLC. Louis A. Klapp (Riley Safer Holmes & Cancila LLP) for Motorola Mobility LLC.

Companies: Uniloc USA, Inc.; Uniloc Luxembourg, S.A.; Uniloc 2017 LLC; Motorola Mobility LLC; Blackboard Inc.; Google LLC; Fortress Credit Co. LLC; Apple Inc.

Cases: Patent FedCirNews GCNNews CaliforniaNews DelawareNews TexasNews