Optis Cellular Technology, LLC v. Apple Inc, decided June 16, 2025

Case Overview:

This document summarizes the key themes, ideas, and facts from the United States Court of Appeals for the Federal Circuit's decision in OPTIS CELLULAR TECHNOLOGY, LLC v. APPLE INC., issued on June 16, 2025. The case involves a patent infringement dispute where Optis (a collective of entities owning patents) sued Apple Inc. for infringing five Standard-Essential Patents (SEPs) related to Long-Term Evolution (LTE) technology.

Main Themes and Important Ideas/Facts:

I. Reversal and Vacatur of Infringement and Damages Judgments:

The Federal Circuit vacated both the initial infringement judgment and the subsequent damages retrial judgment, remanding the case for a new trial on both infringement and damages. This is the most significant outcome of the appeal.

• Jury Unanimity Violation: The primary reason for vacating the infringement judgment was the district court's use of a single infringement question on the verdict form covering all five asserted patents. This was deemed to violate Apple’s Seventh Amendment right to a unanimous jury verdict on each legal claim.

• Quote: "The problem with the district court’s single infringement question is that it deprived Apple of its right to a unanimous verdict on each legal claim against it related to infringement."

• Key Principle: Each asserted patent raises an independent cause of action, and infringement must be proved separately for each. The verdict form's question, "Did Optis prove by a preponderance of the evidence that Apple infringed ANY of the [a]sserted [c]laims?", was flawed because it allowed jurors to agree on infringement without agreeing on which specific patent was infringed.

• Quote: "As long as each juror believed some claim of some patent was infringed, the jury was required to answer “Yes”—even if the various jurors believed that Apple was infringing a different asserted patent."

• Damages Retrial Vacated: Consequently, the $300,000,000 lump sum awarded in the damages retrial was also vacated because it was based on an assumption of infringement across all five patents, which was not properly established.

• Quote: "The district court erred by instructing the jury to assume infringement of every asserted patent... Optis has been awarded damages for a scope of infringement that it has not proven and that the jury had not unanimously found."

• Original Damages Not Reinstated: Optis's cross-appeal to reinstate the initial $506,200,000 damages verdict was dismissed, as it suffered from the same unanimity issue as the second damages judgment.
  

II. Patent Eligibility and Claim Construction Rulings (for Remand Guidance):

The court also addressed several liability-related arguments that will impact the new trial:

• Claims 6 and 7 of the ’332 Patent (Patent Eligibility - § 101): The Federal Circuit reversed the district court's finding that these claims are not directed to an abstract idea.

• Holding: Claims 6 and 7 of the ’332 patent are directed to the abstract idea of a mathematical formula.

• Quote: "We conclude that claims 6 and 7 of the ’332 patent are directed to the abstract idea of a mathematical formula."

• Reasoning: The claims focus on using the equation "Yk=(A*Yk−1)mod D" and a modulo 'C' operation to calculate a start position for decoding information in a cellular network. This is considered an ineligible mathematical formula.

• Remand for Alice Step Two: The case is remanded for the district court to conduct the Alice step two analysis, which determines if the claims contain an "inventive concept" beyond the abstract idea that transforms it into a patent-eligible application. This factual determination requires assessing whether elements are "well-understood, routine, and conventional."

• Claim 8 of the ’833 Patent (Claim Construction): The Federal Circuit affirmed the district court’s construction of the mapping limitation in claim 8 of the ’833 patent.

• Specific Limitation: "the ACK/NACK control signals overwrite some of the multiplexed signals mapped to the 2-dimensional resource matrix from the last row of the specific columns."

• Construction Affirmed: The construction meant (1) some multiplexed signals from the last row are skipped and ACK/NACK signals are mapped, and (2) the total information length is maintained.

• Court's Reasoning: The claim language does not mandate that overwriting must start in the last row, nor does the specification require it.

• Claim 1 of the ’557 Patent (Indefiniteness - § 112 ¶ 6): The Federal Circuit reversed the district court's finding that "selecting unit" in claim 1 does not invoke 35 U.S.C. § 112 ¶ 6.

• Holding: The term "selecting unit" does invoke § 112 ¶ 6.

• Reasoning: The word "unit" is a "nonce term" that does not sufficiently connote structure, similar to "means." The modifying and surrounding terms are functional ("selecting," "configured to randomly select") and do not provide "sufficiently definite" structure.

• Remand for Second Step: The case is remanded for the district court to determine whether the patent specification discloses adequate corresponding structure for the "selecting unit" to avoid indefiniteness.
  

III. Admissibility of Apple-Qualcomm Settlement Agreement:

The Federal Circuit ruled that the district court abused its discretion by admitting the Apple-Qualcomm settlement agreement and related expert testimony by Mr. David Kennedy.

• Exclusion under FRE 403: The settlement agreement was deemed inadmissible because its probative value was substantially outweighed by the danger of unfair prejudice.

• Lack of Comparability: The agreement's scope was much broader than the five asserted patents, settling global litigation involving patent, antitrust, tortious-interference, and trade-secret claims. Mr. Kennedy failed to adequately account for these differences.

• Quote: "The scope of the patent rights under the settlement agreement was far greater than the hypothetical license to the five asserted patents in this case, and the agreement settled global litigation between Apple and Qualcomm, including matters spanning patent, antitrust, tortious-interference, and trade-secret claims. Mr. Kennedy failed to meaningfully account for these differences in scope."

• Unfair Prejudice: The repeated emphasis on the large, non-comparable settlement figure unfairly skewed the jury's damages horizon.

• Quote: "Additionally, it was highly prejudicial to Apple for Optis (and Mr. Kennedy) to repeatedly recite the large settlement figure given “the probative value of the [Apple-Qualcomm settlement agreement] is dubious.”"
  

Conclusion:

The Federal Circuit's decision significantly alters the trajectory of this patent dispute, requiring a complete do-over of the infringement and damages trials due to a fundamental flaw in the original verdict form related to jury unanimity. Furthermore, the court has provided critical guidance on patent eligibility for certain claims and claim construction, while also limiting the evidence that can be presented regarding prior settlement agreements in future proceedings.