Argument Recap

Last week, the Federal Circuit heard oral argument in Uniloc USA, Inc. v. Motorola Mobility LLC, a patent case we have been tracking because it attracted an amicus brief. In this case, Uniloc appeals a district court’s decision to dismiss its patent infringement action. In particular, Uniloc challenges the district court’s ruling that a license precluded Article III standing because the patent holder no longer held all of the patent’s exclusionary rights. This is our argument recap.

Jeffrey Lamken argued for Uniloc. He began by asserting Motorola waived its collateral estoppel argument when it said the decision in Uniloc’s prior litigation with Apple was not binding. One judge asked why Uniloc did not appeal the prior determination of lack of standing in the prior case. Lamken explained that, because the case ended with Uniloc settling with Apple, Uniloc had no motive to try to vacate the district court’s decision.

In the alternative, even if the prior decision was preclusive when settlement was reached, Lamken argued that Motorola forfeited the argument. As a result, he maintained, the court may accept Motorola’s argument only if there are exceptional circumstances, and he said none are not present. Lamken argued that Motorola has not given any reason that would excuse it from not raising the argument.

One of the judges asked Lamken to explain for purposes of Article III standing what the legally-protected interest is and, in particular, whether it is the right to exclude. Lamken responded that 35 U.S.C. § 154 gives patentees the right to exclude, but he highlighted that that right does not go away when the patentee grants licenses. Lamken cited cases to support the idea that a party may grant licenses and still exercise the right to exclude. Further, Lamken explained, the licensee, Fortress, said it did not own the right to exclude and did not become an owner of the patent.

Louis Klapp appeared for Motorola. Klapp began by arguing that the court did not even need to address Uniloc’s Article III standing argument because Motorola did not waive nor forfeit its collateral estoppel defense. Klapp went on to stress the timing of the Apple decision. Specifically, he highlighted that it was decided just before the court’s decision in this case on Motorola’s motion to dismiss and that Motorola promptly filed a notice of subsequent authority.

One of the judges pointed out that, if there was a subsequent decision that precluded Uniloc’s arguments, Motorola had the right to file a dispositive motion based on that decision. Klapp responded by arguing that Uniloc’s timeliness defense relates only to Uniloc’s forfeiture argument, and, he said, Motorola’s delay was reasonable given the timing of the Apple decision. Further, he argued, Motorola did give notice that was intended to supplement its existing briefing. Moreover, Klapp explained, for waiver, Motorola would have had to knowingly and intentionally relinquish the collateral estoppel argument, and he said Motorola did no such thing.

The questioning then transitioned from waiver to the effect of the settlement in the Apple case. Klapp claimed the “magic moment” was the settlement, which gave preclusive effect because Uniloc did not appeal the case. Klapp argued that the real question is whether Uniloc had a full and fair opportunity to litigate the issue in the previous case, and he said it did. Klapp pointed out that Uniloc could have reached a settlement agreement and still argued the Article III standing issue.

In rebuttal, Lamken argued that Motorola’s delay in asserting collateral estoppel should fail because the whole purpose of the doctrine is judicial economy. Further, he said, non-mutual collateral estoppel is a doctrine of equity and whenever a settlement sacrifices a final decision, the court should be free to deny collateral estoppel. He also asserted that, given the lack of coherence in the field of patent exclusivity rights, the court should resolve the question of standing presented in this case.

We will continue monitoring this case and report on developments.