Tech Transfer eNews Blog

WARF asks Supreme Court to overturn Fed Circuit, reinstate $506M judgment against Apple

By Jesse Schwartz
Published: July 17th, 2019

The Wisconsin Alumni Research Foundation (WARF), UW-Madison’s tech transfer arm, is asking the U.S. Supreme Court to reinstate a $506 million infringement judgment against Apple Inc. in a case that could set limits on how much leeway the nation’s top patent court has in reviewing lower court decisions.

WARF is asking the Court to overturn the Fed Circuit’s ruling that Apple didn’t infringe a key computer processing patent with its iPhone and iPad chips, claiming the three-judge panel overstepped its authority by deciding the case as if it were a trial court and jury.

Though the stakes in the case are huge for WARF, it could have even greater implications for all patent holders. Critics of the Fed Circuit says the Supreme Court should reverse, or risk leaving in place a bad precedent that allows the patent court to overturn decisions without regard to established rules on how appellate courts operate.

“Arguably, the Federal Circuit went outside the bounds of traditionally reviewing appealed District Court decisions,” said patent attorney Tyson Benson, of counsel at Bejin Bieneman PLC. “The appellate court is limited by the evidence and findings of the lower court to determine whether the lower court applied the correct law. In this event, the Federal Circuit arguably replaced the findings of the District Court with their own.”

If the Supreme Court does reverse, it could rein in the Fed Circuit, which has a reputation for setting its own rules regardless of lower court reasoning, observers say.

The Federal Circuit “usurped the role of the district court,” by deciding on new patent language, applying it to the lower court record and flipping the verdict, asserts Morgan Chu, a partner at Irell & Manella LLP who’s representing WARF. The three Fed Circuit judges who overturned the verdict “were, in part, playing the role of a district court and, in part, playing the role of a jury,” Chu maintains.

In the original verdict, a district court jury found that Apple committed literal infringement of the patent, and the court awarded WARF $234 million in damages. Later, it denied an Apple petition to overturn the verdict and upped the award to about $506 million for continued infringement.

On appeal, the Federal Circuit ruled that a reasonable juror couldn’t have found literal infringement, citing its own interpretation of the patent’s language. WARF, in its Supreme Court petition filed June 5, said the panel should have sent the case back to the trial court for further proceedings, taking into account the Fed Circuit’s interpretation. Apple has until Aug. 7 to respond to WARF’s petition.

Paul Michel, a retired Federal Circuit chief judge, also takes issue. Appellate courts can’t overturn verdicts “based on simply disagreeing with the jury’s plain meaning construction, based on witness testimony of opposing experts,” he said. “If the appellate court alters the jury’s presumed construction, then the case should be sent back for a new trial so the jury can decide infringement, applying the higher court’s new construction, possibly with new evidence,” Michel added.

Much of the dispute revolved around interpretation of the term “particular” in claim construction. Saurabh Vishnubhakat, associate professor of law at Texas A&M University, said the panel may have concluded that the jury misunderstood the meaning of the term “particular” in the patent claims. If so, then the Federal Circuit may have been within its authority to toss the verdict.

Randall Rader, a retired Federal Circuit Chief Judge, said that generally, the panel “often reviews facts and law more extensively than a normal regional circuit, precisely because they would feel they have a responsibility to set national policy.”

Still, the judges who vacated the Apple judgment failed to point to any errors in the trial record when it reinterpreted the term “particular,” raising a question about the proper function of a federal appeals court, Benson said.  “You don’t want appellate courts just substituting what their judgments are with what the facts are on the record, or trying to substitute their own judgment of what they think something actually is. The case is Wisconsin Alumni Research v. Apple Inc., C.C.W.D. Wis., 02265, 7/17.

Source: Bloomberg Law

Posted under: Tech Transfer e-News

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