UNILOC USA, INC. v. MOTOROLA MOBILITY LLC

Uniloc sued Motorola for infringement of U.S. Patent No. 6,161,134 which district court dismissed because Uniloc had granted a license and the existence of the license deprived Uniloc of standing.  In a related case, Uniloc sued Blackboard Inc. for infringement of U.S. Patents Nos. 6,324,578 and 7,069,293 but the district court dismissed applying the Motorola case as a matter of collateral estoppel. Uniloc argues that the District Court erred in dismissing these two actions, but the CAFC holds that another Uniloc case, (Uniloc USA, Inc. v. Apple, Inc.), establishes that Uniloc lacks standing as a matter of collateral estoppel in the Motorola and Blackboard cases. The CAFC finds that collateral estoppel applies because: 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.  In response to Uniloc’s arguments, the CAF finds: that collateral estoppel can be applied based on a district court decision that is still pending on appeal; that Motorola did not waive its issue preclusion argument; unpersuasive Uniloc’s argument that it lacked the necessary incentive to litigate the Apple judgment through appeal because of a settlement opportunity that presented itself; that arguing that collateral estoppel should not apply because the decision in the Apple case is incorrect, is simply not a proper basis to deny collateral estoppel; and it does not matter that would have acted differently in settlement had it known that Motorola and Blackboard would assert issue preclusion arguments on appeal. Accordingly, the CAFC affirms the district court’s dismissal of these cases for lack of standing.  Judge Lourie presents additional views because the majority’s rationale is a regrettable understatement. While agreeing that Uniloc loses its appeal by being estopped from suing Motorola because it settled its suit with Apple rather than appealing, it is not because it lost the power to sue by granting a nonexclusive license with the right to sublicense.

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