Case: 21-1555 Document: 77 Page: 1 Filed: 11/04/2022
United States Court of Appeals
for the Federal Circuit
______________________
UNILOC USA, INC., UNILOC LUXEMBOURG S.A.,
Plaintiffs-Appellants
v.
MOTOROLA MOBILITY LLC,
Defendant-Appellee
______________________
2021-1555
______________________
Appeal from the United States District Court for the
District of Delaware in No. 1:17-cv-01658-CFC, Chief
Judge Colm F. Connolly.
-------------------------------------------------
UNILOC 2017 LLC,
Plaintiff-Appellant
v.
BLACKBOARD INC.,
Defendant-Appellee
______________________
2021-1795
______________________
Case: 21-1555 Document: 77 Page: 2 Filed: 11/04/2022
2 UNILOC USA, INC. v. MOTOROLA MOBILITY LLC
Appeal from the United States District Court for the
District of Delaware in No. 1:20-cv-00665-CFC, Chief
Judge Colm F. Connolly.
______________________
Decided: November 4, 2022
______________________
JEFFREY A. LAMKEN, MoloLamken LLP, Washington,
DC, argued for plaintiffs-appellants in 21-1555. Also ar-
gued by LUCAS M. WALKER for plaintiff-appellant in 21-
1795. Also represented by KENNETH E. NOTTER, III;
JORDAN RICE, Chicago, IL. Also represented in 21-1555 by
AARON JACOBS, Prince Lobel Tye LLP, Boston, MA; SEAN T.
O'KELLY, O'Kelly & O'Rourke, LLC, Wilmington, DE. Also
represented in 21-1795 by JAMES J. FOSTER, Prince Lobel
Tye LLP, Boston, MA.
LOUIS A. KLAPP, Riley Safer Holmes & Cancila LLP,
Chicago, IL, argued for defendant-appellee Motorola Mo-
bility LLC. Also represented by STEPHEN MAXWELL
HANKINS, San Francisco, CA.
PAUL WHITFIELD HUGHES, McDermott, Will & Emery
LLP, Washington, DC, argued for defendant-appellee
Blackboard Inc. Also represented by MICHAEL S. NADEL;
CHARLES M. MCMAHON, Chicago, IL.
COURTLAND L. REICHMAN, Reichman Jorgensen Leh-
man & Feldberg LLP, Redwood Shores, CA, for amicus cu-
riae Cirba Inc. in 21-1555. Also represented by ARIEL C.
GREEN ANABA; CHRISTINE E. LEHMAN, AISHA MAHMOOD
HALEY, Washington, DC.
______________________
Case: 21-1555 Document: 77 Page: 3 Filed: 11/04/2022
UNILOC USA, INC. v. MOTOROLA MOBILITY LLC 3
Before LOURIE, DYK, and HUGHES, Circuit Judges.
Opinion for the court filed by Circuit Judge DYK.
Additional views filed by Circuit Judge LOURIE.
DYK, Circuit Judge.
Uniloc USA, Inc. and Uniloc Luxembourg, S.A. (to-
gether, “the Unilocs”) sued Motorola in the District of Del-
aware for infringement of
U.S. Patent No. 6,161,134 (the
“Motorola case”). The asserted patent concerns, in part,
pairing a telephone with another device and using the
other device to make a telephone call using the telephone’s
cellular capabilities.
Motorola moved to dismiss, alleging the Unilocs lacked
standing because they lacked the right to exclude, having
granted Fortress Credit Co. LLC (“Fortress”) a license and
an unfettered right to sublicense the asserted patent. The
Unilocs argued that they had not granted such a license to
Fortress and, even if they had, the license would not elim-
inate the Unilocs’ standing. The district court dismissed,
agreeing that the Unilocs had granted a license and that
the existence of a license deprived the Unilocs of standing.
In a related case, the Unilocs sued Blackboard Inc. in
the Western District of Texas for infringement of U.S. Pa-
tents Nos. 6,324,578 and 7,069,293 which both concern
technology that facilitates access to customized and li-
censed applications on individual computers within dis-
tributed networks (the “Blackboard case”). Uniloc 2017
(which acquired the relevant patents from Uniloc Luxem-
bourg (“Uniloc Lux”)) was later substituted as the sole
plaintiff, and the case was transferred to the District of
Delaware. The district court then dismissed the Black-
board case for lack of subject matter jurisdiction, appar-
ently applying the Motorola case as a matter of collateral
estoppel.
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4 UNILOC USA, INC. v. MOTOROLA MOBILITY LLC
On appeal, in addition to defending the district courts’
decisions, both Motorola and Blackboard assert that the
decision in another Uniloc case, Uniloc USA, Inc. v. Apple,
Inc., No. C 18-00358,
2020 WL 7122617 (N.D. Cal. Dec. 4,
2020) (the “Apple case”), (which has now become final by
the dismissal of Uniloc USA’s appeal), establishes that the
Unilocs and Uniloc 2017 lack standing as a matter of col-
lateral estoppel in the Motorola and Blackboard cases. We
agree and find the Apple decision is collateral estoppel in
those cases. We thus affirm the district courts’ determina-
tions that the Unilocs and Uniloc 2017 lack standing.
In a companion case, also issued today, we concluded
that a Termination Agreement entered into between the
Unilocs and Fortress on May 3, 2018 eliminated the For-
tress license and that Uniloc 2017 has standing going for-
ward once the Agreement was executed. Uniloc 2017 LLC
v. Google LLC, -- F.4th -- (Fed. Cir. 2022) (the “Google
case”).
BACKGROUND
The factual backgrounds of the Motorola and Black-
board cases are identical in all respects relevant to this ap-
peal. On December 30, 2014, Uniloc 2017’s predecessors,
the Unilocs, entered into a Revenue Sharing and Note and
Warrant Purchase Agreement (“RSA”) with Fortress in
connection with a loan Fortress made to the Unilocs. The
RSA stated:
[T]he [Unilocs] shall grant to [Fortress] . . . a non-
exclusive, royalty free, license (including the right
to grant sublicenses) with respect to the Patents,
which shall be evidenced by, and reflected in, the
Patent License Agreement. [Fortress] . . . shall
only use such license following an Event of Default.
Motorola J.A. 152, § 2.8. In other words, Fortress effec-
tively would obtain a license if there was an Event of
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UNILOC USA, INC. v. MOTOROLA MOBILITY LLC 5
Default. The Patent License Agreement, which formally
granted the license referenced in the RSA, stated that the
license was “non-exclusive, transferrable, sub-licensable,
divisible, irrevocable, fully paid-up, royalty-free and world-
wide.” 1 Motorola J.A. 174, § 2.1. The patents involved in
these cases were all included in the RSA and License
Agreement.
There were three enumerated Events of Default, one of
which was the failure “to perform or observe any of the cov-
enants or agreements contained in Article VI.” Motorola
J.A. 162, § 7.1.2. One such covenant was: “As of March 31,
2017 and the last day of each fiscal quarter thereafter, the
[Unilocs] shall have received at least $20,000,000 in Actual
Monetization Revenues during the four fiscal quarter pe-
riod ending on such date.” Motorola J.A. 156, § 6.2.2.
There was no dispute the Unilocs failed to reach the
$20,000,000 monetization target for the four quarters end-
ing in March 2017. Under the terms of the RSA, this ap-
peared to constitute an Event of Default resulting in an
effective license grant to Fortress.
I. The Motorola Case
Against this background, on November 15, 2017, the
Unilocs filed the Motorola case, a patent infringement suit
in the District of Delaware against Motorola, alleging in-
fringement of
U.S. Patent No. 6,161,134, which was in-
cluded in the License Agreement. In response, Motorola
moved to dismiss for lack of standing. Following briefing
1 Unlike the situation in Uniloc 2017 LLC v. Google,
-- F.4th -- (Fed. Cir. 2022), both the RSA and the Patent
License Agreement were in effect at the time the Unilocs
sued Motorola and Blackboard because both of these suits
were filed before May 3, 2018, the date the Termination
Agreement was signed.
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6 UNILOC USA, INC. v. MOTOROLA MOBILITY LLC
and oral argument on the motion, on December 6, 2020,
Motorola filed a Notice of Subsequent Authority alerting
the district court to the recently decided Apple case where
the district court had found lack of standing on virtually
identical facts. There, the court found that Uniloc USA
lacked standing because the asserted patent had been li-
censed to Fortress, and Fortress had the right to sublicense
the asserted patent to the alleged infringer. Apple
2020
WL 7122617 (N.D. Cal. Dec. 4, 2020). Motorola character-
ized the Apple decision as “not binding.” Motorola
J.A. 1076. On December 30, 2020, the district court
granted Motorola’s motion and dismissed the Motorola case
for lack of subject matter jurisdiction without reference to
the Apple case.
The district court concluded that the Unilocs commit-
ted at least one Event of Default sufficient to trigger For-
tress’s acquisition of the license and that this Event of
Default was neither cured nor annulled. Relying on cases
involving exclusive licensees, as opposed to patent owners,
the district court held that the Unilocs lacked standing to
sue for infringement because Fortress had the theoretical
right to sublicense the asserted patent to the alleged in-
fringer, and the Unilocs, as a result, lacked the exclusion-
ary right necessary to confer standing.
On May 3, 2018, Uniloc 2017 acquired all relevant pa-
tents from Uniloc Lux. On December 11, 2018, the Unilocs
filed a motion to substitute Uniloc 2017 as a party. After
deciding that Uniloc USA and Uniloc Lux lacked standing,
the district court dismissed the motion to substitute as
moot.
II. The Blackboard Case
At about the same time as the filing of the Motorola
case, on August 11, 2017, the Unilocs filed the Blackboard
case, a patent infringement suit in the Western District of
Texas against Blackboard, alleging infringement of U.S.
Case: 21-1555 Document: 77 Page: 7 Filed: 11/04/2022
UNILOC USA, INC. v. MOTOROLA MOBILITY LLC 7
Patent Nos. 6,324,578 and 7,069,293, both of which were
included in the License Agreement. On January 10, 2020,
Uniloc 2017 having acquired all relevant patents, the court
granted the Unilocs’ motion to substitute Uniloc 2017 as
plaintiff. The Western District of Texas transferred the
case to the District of Delaware on May 15, 2020. After the
decision in the Motorola case, see Uniloc USA, Inc. v.
Motorola Mobility, LLC, 17-1658,
2020 WL 7771219 (D.
Del. Dec. 30, 2020), the district court dismissed the Black-
board case for lack of standing, apparently on grounds of
collateral estoppel based on the Motorola decision.
The Unilocs appealed the decision in the Motorola case,
and Uniloc 2017 appealed the decision in the Blackboard
case. We have jurisdiction under
28 U.S.C. § 1295(a)(1).
We review a dismissal for lack of subject matter jurisdic-
tion de novo. Microsoft Corp. v. GeoTag, Inc.,
817 F.3d
1305, 1311 (Fed. Cir. 2016).
DISCUSSION
Uniloc2 argues that the Delaware District Court erred
in dismissing these two actions for lack of standing. Uniloc
maintains that even if it granted a license and right to sub-
license to Fortress, the district courts’ rulings are not con-
sistent with our decisions in Aspex Eyewear, Inc. v Miracle
Optics, Inc.,
434 F.3d 1336 (Fed. Cir. 2006) and Alfred E.
Mann Found. for Sci. Rsch. v. Cochlear Corp.,
604 F.3d
1354 (Fed. Cir. 2010). There we held that the patentee’s
grant of a license that includes the right to sublicense did
not deprive the patent owner of Article III standing. Aspex
Eyewear,
434 F.3d at 1339–44; Alfred E. Mann Found. for
Sci. Rsch.,
604 F.3d at 1358–63. Uniloc distinguishes cases
2 For simplicity, we hereinafter refer collectively to
the Unilocs (that is, Uniloc USA and Uniloc Lux) and
Uniloc 2017 as Uniloc.
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8 UNILOC USA, INC. v. MOTOROLA MOBILITY LLC
relied on by the district court as involving the standing of
licensees (rather than patentees) who lacked an exclusive
license.
We recognize there is considerable force to Uniloc’s ar-
gument that, even if Fortress had been granted a license
and an unfettered right to sublicense, Uniloc would have
Article III standing. Patent owners and licensees do not
have identical patent rights, and patent owners arguably
do not lack standing simply because they granted a license
that gave another party the right to sublicense the patent
to an alleged infringer. But, we need not resolve the ques-
tion of whether a patent owner who granted a right to sub-
license lacks standing here. We hold that, in light of Apple
2020 WL 7122617, Uniloc is collaterally estopped from as-
serting that it has standing in these cases.
The patent at issue in the Apple case was included in
the License Agreement between the Unilocs and Fortress.
Apple,
2020 WL 7122617, at *1. The district court reached
three conclusions in the Apple case: (1) the Unilocs commit-
ted an Event of Default and failed to cure or annul said
Event, granting Fortress a license, including a right to sub-
license, to the asserted patent,
id. at *4–6; (2) a patent
plaintiff must have exclusionary rights in the patent to
have standing to sue for infringement,
id. at *2–4; and
(3) Uniloc USA lacked exclusionary rights in the asserted
patent because Fortress had the ability to license the as-
serted patent to the alleged infringer (Apple), which de-
prived Uniloc USA of standing.
Id. *7–8.
On January 25, 2021, Uniloc USA’s appeal of the Apple
decision was docketed, and on May 25, 2021, Uniloc filed
its opening appeal brief in the Apple case requesting rever-
sal on the issue of standing. On June 22, 2021, Uniloc and
Apple moved jointly to voluntarily dismiss the Apple ap-
peal pursuant to settlement but did not request that we va-
cate the lower court decision or remand the case to the
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UNILOC USA, INC. v. MOTOROLA MOBILITY LLC 9
district court to vacate the decision. We dismissed the Ap-
ple appeal on June 29, 2021. The district court decision
was not vacated.
Whether the law of the regional circuit—in this case
the Third Circuit—governs principles of issue preclusion or
whether we apply our own law, the same principles of col-
lateral estoppel apply. So, we need not decide which law
governs. 3
3 This court has developed its own law with respect
to res judicata (including collateral estoppel) in non-patent
cases. See, e.g., Jet, Inc. v. Sewage Aeration Sys.,
223 F.3d
1360, 1365–66 (Fed. Cir. 2000). But in patent cases, de-
spite our exclusive jurisdiction, we have generally stated
that we look to regional circuit law for general principles of
res judicata and to our own law for principles that are re-
lated to patent law. See Aspex Eyewear, Inc. v. Zenni Opti-
cal Inc.,
713 F.3d 1377, 1380 (Fed. Cir. 2013). This
distinction leads to the potential anomaly of a single judg-
ment of this court having different consequences in later
cases depending on the regional circuit in which the later
case arose. This anomaly is illustrated by the facts of this
case in which the effect of the Apple judgment was litigated
in cases from both the Northern District of California (the
Google case) and the District of Delaware (the Motorola
and Blackboard cases). Moreover, our cases have hardly
been consistent in determining which aspects of res judi-
cata are governed by regional circuit law, and which are
governed by Federal Circuit law. Compare Foster v. Hallco
Mfg. Co.,
947 F.2d 469, 475–77 (Fed. Cir. 1991) (applying
Federal Circuit law to determine whether a decision was
sufficiently final for issue preclusion to apply), with Intell.
Ventures I LLC v. Capital One Fin. Corp.,
850 F.3d 1332,
1337–38 (Fed. Cir. 2017) (applying regional circuit law to
determine whether a decision was sufficiently final);
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10 UNILOC USA, INC. v. MOTOROLA MOBILITY LLC
There are four requirements for collateral estoppel to
apply:
(1) the issue sought to be precluded must be the
same as the one involved in the prior action;
(2) the issue must have been actually litigated;
(3) the issue must have been determined by a valid
and final judgment; and
(4) the determination must have been essential to
the prior judgment. 4
In re Docteroff,
133 F.3d 210, 214 (3d Cir. 1997) (formatting
changed); see also Tex. Instruments Inc. v. Cypress Semi-
conductor Corp.,
90 F.3d 1558, 1568 (Fed. Cir. 1996) (simi-
lar).
In general, collateral estoppel is applied against the
losing party in the original action even in situations where
Compare also Pharmacia & Upjohn Co. v. Mylan Pharms.,
Inc.,
170 F.3d 1373, 1379–80 (Fed. Cir. 1999) (applying
Federal Circuit law to determine whether a party had a full
and fair opportunity to litigate such that issue preclusion
should apply), with Dana v. E.S. Originals, Inc.,
342 F.3d
1320, 1323–25 (Fed. Cir. 2003) (applying regional circuit
law to determine whether a party had a full and fair oppor-
tunity to litigate). Here, as in other cases, see, e.g., Foster,
947 F.2d at 477 n.7, we need not resolve which circuit’s law
should govern because our law and Third Circuit law are
in relevant respects the same.
4 The party against whom preclusion is asserted
must also have been a party or been in privity with a party
to the prior adjudication. Doe v. Hesketh,
828 F.3d 159, 171
(3d Cir. 2016); Lee by Lee v. United States,
124 F.3d 1291,
1296 (Fed. Cir. 1997), amended by
129 F.3d 1482 (Fed. Cir.
1997). There is no issue of lack of privity here.
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UNILOC USA, INC. v. MOTOROLA MOBILITY LLC 11
the party asserting collateral estoppel was not a party to
the original action. In other words, non-mutual collateral
estoppel is available. Blonder-Tounge Labs., Inc. v. Univ.
of Ill. Found.,
402 U.S. 313, 334 (1971); Hartley v. Mentor
Corp.,
869 F.2d 1469, 1470–71 (Fed. Cir. 1989); Peloro v.
United States,
488 F.3d 163, 175 (3d Cir. 2007). “For de-
fensive collateral estoppel . . . to apply, the party to be pre-
cluded must have had a ‘full and fair’ opportunity to litigate
the issue in the first action.” Peloro,
488 F.3d at 174–75
(citing Parklane Hosiery Co. v. Shore,
439 U.S. 322, 328,
332 (1979)); Blonder-Tongue Labs.,
402 U.S. at 331, 333);
Banner v. United States,
238 F.3d 1348, 1354 (Fed. Cir.
2001); Restatement (Second) of Judgments § 29 (Am. L.
Inst. 1982).
There is no question here that the Apple case addressed
and decided the very same issues as are presented here;
those issues were actually litigated; the issues were deter-
mined by a valid and final judgment; and the determina-
tion of all three issues was essential to the prior judgment.
On its face, collateral estoppel would appear to apply. To
be sure, there is some discretion to deny the application of
non-mutual collateral estoppel, see Restatement (Second) of
Judgments § 29; Nat’l R.R. Passenger Corp. v. Pa. Pub.
Util. Comm’n,
288 F.3d 519, 528 (3d Cir. 2002), but this
discretion is confined to defined situations where applica-
tion of collateral estoppel is not appropriate under various
rules established by case law, such as when one party lacks
a full and fair opportunity to litigate. The discretion is not
unbounded discretion to apply collateral estoppel when-
ever the court thinks that outcome might be desirable.
Uniloc argues collateral estoppel should not apply for
several reasons, none of which we find persuasive. First,
Uniloc argues that Motorola and Blackboard forfeited their
collateral estoppel argument by failing to raise the argu-
ment in the district court. The Apple case was decided by
the district court on December 4, 2020. Although the
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12 UNILOC USA, INC. v. MOTOROLA MOBILITY LLC
primary briefing and oral argument in the Motorola case
were completed by October 1, 2020, a decision was not ren-
dered until December 30, 2020. A decision was not ren-
dered in the Blackboard case until January 28, 2021.
Thus, both decisions were rendered by the district court af-
ter the decision in the Apple case. The parties debate
whether Motorola and Blackboard had the opportunity to
raise the collateral estoppel issue before the district court,
but even assuming the issue could have been raised, there
was no forfeiture.
To be sure, collateral estoppel can be applied based on
a district court decision that is still pending on appeal, 5 and
we have affirmed the application of issue preclusion even
when the preclusive judgment was pending appeal. Phar-
macia & Upjohn Co. v. Mylan Pharms., Inc.,
170 F.3d 1373,
1380–81 (Fed. Cir. 1999). Further, the general rule is that
issue preclusion must be “raised at the first reasonable op-
portunity after the rendering of the decision having the
5 See SSIH Equip. S.A. v. U.S. Int’l Trade Comm’n,
718 F.2d 365, 370 (Fed. Cir. 1983) (“[T]he law is well settled
that the pendency of an appeal has no affect on the finality
or binding effect of a trial court’s holding.” (citing Deposit
Bank v. Frankfort,
191 U.S. 499 (1903))); United States v.
5 Unlabeled Boxes,
572 F.3d 169, 175 (3d Cir. 2009) (“[T]he
pendency of an appeal does not affect the potential for res
judicata flowing from an otherwise-valid judgment.”); 18A
Charles Alan Wright, Arthur R. Miller, & Edward H.
Cooper, Federal Practice & Procedure § 4433, at 66 (3d ed.
2017) (“[I]t is . . . held in federal courts that the preclusive
effects of a lower court judgment cannot be suspended
simply by taking an appeal that remains undecided.”); Re-
statement (Second) of Judgments § 13, cmt. f (“[A] judg-
ment otherwise final remains so despite the taking of an
appeal . . . .”).
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UNILOC USA, INC. v. MOTOROLA MOBILITY LLC 13
preclusive effect.” Mendenhall v. Barber-Greene Co.,
26
F.3d 1573, 1579–80 n.8 (Fed. Cir. 1994); see also Arizona v.
California,
530 U.S. 392, 410 (2000) (“[R]es judicata [is] an
affirmative defense ordinarily lost if not timely raised.”).
So while it is true that, in general, issue preclusion cannot
be raised for the first time on appeal, see SimpleAir, Inc. v.
Google LLC,
884 F.3d 1160, 1170–71 (Fed. Cir. 2018), we
have not had occasion to address whether issue preclusion
must be raised before the preclusive judgment ceases to be
subject to further appeal. The Third Circuit in 5 Unlabeled
Boxes (a decision with which we agree) concluded that the
failure to raise collateral estoppel before the appeal process
in the preclusive case has concluded should not necessarily
be a work of forfeiture. United States v. 5 Unlabeled Boxes,
572 F.3d 169 (3rd Cir. 2009).
5 Unlabeled Boxes involved two parallel proceedings in-
volving the same facts between the same parties (the
United States and Hi-Tech Pharmaceuticals, Inc.), one in
the Northern District of Georgia and one in the Western
District of Pennsylvania.
Id. at 173. The Georgia district
court was the first to reach a decision and ruled in favor of
the United States on August 15, 2007.
Id. On September
13, 2007, Hi-Tech filed a notice of appeal to the Eleventh
Circuit.
Id. The United States did not notify the Pennsyl-
vania district court of the Georgia district court’s decision.
On October 15, 2007, the Pennsylvania district court also
ruled in favor of the United States, and Hi-Tech promptly
appealed.
Id. On October 7, 2008, the Eleventh Circuit
affirmed the decision of the Georgia District Court.
Id.
One week later, the United States raised the defense of is-
sue preclusion in the Third Circuit case for the first time.
Id.
Despite Hi-Tech’s argument that the government
“waived [forfeited] the res judicata defense by not asserting
it until [a] ‘late hour,’” the Third Circuit found that collat-
eral estoppel applied.
Id. at 175-76. Although the court
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14 UNILOC USA, INC. v. MOTOROLA MOBILITY LLC
noted that “the pendency of an appeal does not affect the
potential for res judicata flowing from an otherwise-valid
judgment,” the court found no forfeiture by the delay of
raising the issue until the resolution of the appeal because
of the problems that can be created “if a first judgment, re-
lied on in a second proceeding, is reversed on appeal.”
Id.
at 175 (citing 18A Charles Alan Wright, Arthur R. Miller
& Edward H. Cooper, Federal Practice & Procedure, § 4433
(2d ed. 2002)).
As recognized in 5 Unlabeled Boxes, the rule that a de-
cision is final for the purposes of preclusion while that de-
cision is pending appeal creates “[s]ubstantial difficulties.”
18A Charles Alan Wright, Arthur R. Miller & Edward H.
Cooper, Federal Practice and Procedure § 4433, at 79 (3d
ed. 2017) [hereinafter 18A Wright & Miller]. “The major
problem is that a second judgment based upon the preclu-
sive effects of the first judgment should not stand if the
first judgment is reversed.” Id. (footnote omitted); see also
Restatement (Second) of Judgments § 13, cmt. f. If preclu-
sion is raised while the preclusive judgment is pending ap-
peal, it is possible the final outcome will be “the grotesque
result of perpetuating a judgment that rests on nothing
more than a subsequently reversed judgment.”
18A Wright & Miller § 4433, at 83. Therefore, there are
strong policy reasons supporting a finding of no forfeiture
of collateral estoppel when the argument was first raised
after the appeal process of the preclusive case was con-
cluded, and we conclude that forfeiture is not appropriate
here.
In any event, courts of appeals have discretion to en-
tertain a party’s res judicata (including issue preclusion)
argument when it is raised for the first time on appeal, es-
pecially “when the res judicata defense rests on a judgment
entered pending appeal.” 18 Charles Alan Wright, Arthur
R. Miller & Edward H. Cooper, Federal Practice and Proce-
dure § 4405, at 107–08 (3d ed. 2016) (footnote omitted); see
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UNILOC USA, INC. v. MOTOROLA MOBILITY LLC 15
also 5 Unlabeled Boxes,
572 F.3d at 175–76. In cases in-
volving res judicata, “there is more at stake than relitiga-
tion between the parties.” Bechtold v. City of Rosemount,
104 F.3d 1062, 1068 (8th Cir. 1997). Res judicata also pro-
tects the public interest in avoiding inconsistent results
and conserving judicial resources. Clements v. Airport
Auth.,
69 F.3d 321, 330 (9th Cir. 1995). In some cases, “if
the Court were to fail to raise the issue of res judicata, then
[it] would threaten the public interest in avoiding judicial
waste and inconsistent judgments.” Akanthos Cap. Mgmt.,
LLC v. Atlanticus Holdings Corp.,
734 F.3d 1269, 1272
(11th Cir. 2013) (citing Arizona,
530 U.S. at 412–13). We
conclude that there was no forfeiture and, even if there
were, we have discretion to excuse any forfeiture.
Second, the Unilocs argue that Motorola waived its is-
sue preclusion argument when, in a Notice of Subsequent
Authority made to the district court, Motorola stated:
On Friday, December 4, 2020, . . . the Northern
District of California granted a pending Motion to
Dismiss for Lack of Standing by Apple, Inc., . . . be-
cause “[Plaintiffs’] patent licensing scheme di-
vested them of exclusionary rights and, thus, of
Article III standing.” . . .
Although not binding on this Court, as the par-
ties have previewed in the past, [the California
District Court’s decision is] based on roughly the
same set of facts as Motorola’s pending Motion to
Dismiss.
Motorola J.A. 1076 (first set of brackets in original) (quot-
ing Apple,
2020 WL 7122617. The Unilocs argue that “a
judgment’s ‘binding’ effect includes both precedential and
preclusive effect.” Motorola Appellants’ Reply Br. 17 (em-
phasis in original). However, we think, in the context of
the Notice of Subsequent Authority, Motorola used “not
Case: 21-1555 Document: 77 Page: 16 Filed: 11/04/2022
16 UNILOC USA, INC. v. MOTOROLA MOBILITY LLC
binding” only in the sense that the Apple decision was not
binding as a matter of stare decisis. We see no waiver.
Third, Uniloc argues that collateral estoppel should not
apply because Uniloc lacked the necessary incentive to lit-
igate the Apple judgment through appeal because of the
settlement opportunity that presented itself. 6 Uniloc ar-
gues: “Given the opportunity to resolve litigation and re-
duce numerous dockets, Uniloc lacked the ‘incentive to
litigate’ the Apple judgment ‘to the finish’ . . . .” Blackboard
Appellant’s Br. 27 (citations omitted). Essentially, Uniloc
argues that collateral estoppel should not apply here be-
cause Uniloc lacked the incentive to litigate when con-
fronted with a desirable settlement opportunity. While it
is proper to decline to apply collateral estoppel if a party
lacked sufficient incentive to litigate the preclusive case,
see Kaiser Indus. Corp. v. Jones & Laughlin Steel Corp.,
515 F.2d 964, 977 (3d Cir. 1975), amended by
524 F.2d 1154
(3d Cir. 1975), we find Uniloc’s argument unpersuasive.
The standing issues were central to the Apple case on
appeal. They were indeed 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, see Oren Techs., LLC v. Proppant Express
Invs. LLC, 2019-1778,
2021 WL 3120819, at *3 (Fed. Cir.
2021) (per curiam), i.e., a situation in which Uniloc “will be
bound in unforeseen ways by half-hearted litigation of an
apparently trivial claim.” 18A Wright & Miller § 4465.1, at
726 (footnote omitted); see also Mackris v. Murray, 397
6 The settlement agreement resolved not only the
Apple case but also included an agreement between Uniloc
and Apple that other infringement actions would be dis-
missed; Apple would withdraw inter partes review-related
challenges to Uniloc patents; and Apple would dismiss an-
titrust claims against Uniloc.
Case: 21-1555 Document: 77 Page: 17 Filed: 11/04/2022
UNILOC USA, INC. v. MOTOROLA MOBILITY LLC
17
F.2d 74, 81 (6th Cir. 1968). Nor is this a situation in which
the issues sought to be precluded were embodied in a deci-
sion not subject to immediate appeal. The fact that Uniloc
was able to resolve numerous other disputes in an overall
settlement with Apple is not relevant to the determination
of whether Uniloc had sufficient incentive to litigate the is-
sues in the Apple case itself.
Fourth, to the extent Uniloc argues that collateral es-
toppel should not apply because the decision in the Apple
case is incorrect, this is simply not a proper basis to deny
collateral estoppel. Generally, collateral estoppel cannot
be denied because the decision was incorrect. See
18A Wright & Miller § 4465.2, at 750–51 (“[P]reclusion
cannot be defeated simply by arguing that the prior judg-
ment was wrong.”). 7
Fifth, Uniloc argues that application of issue preclu-
sion in this case would prejudice Uniloc because Uniloc
would have acted differently in settlement had it known
that Motorola and Blackboard would assert issue preclu-
sion arguments on appeal. This argument has no merit.
Parties are charged with knowledge of the law and, partic-
ularly in the case of a sophisticated litigant like Uniloc, are
presumed to know background legal principles like collat-
eral estoppel. Uniloc should have known about the
7 In Blonder-Tongue Labs., the Supreme Court found
that estoppel cannot be used against a party unless that
party has had “a full and fair chance to litigate” and that a
party may not have had that chance if “the prior case was
one of those relatively rare instances where the courts
wholly failed to grasp the technical subject matter and is-
sues in suit.”
402 U.S. at 333. That is not alleged to be the
situation here.
Case: 21-1555 Document: 77 Page: 18 Filed: 11/04/2022
18 UNILOC USA, INC. v. MOTOROLA MOBILITY LLC
potential for the Apple case to have preclusive effects and
cannot argue now that it was ignorant of this possibility.
In conclusion, Uniloc is collaterally estopped from ar-
guing that it did not grant a license, including a right to
sublicense, to Fortress, and that the existence of that li-
cense deprived Uniloc of standing. We therefore affirm the
district court’s dismissal of these cases for lack of stand-
ing. 8
AFFIRMED
8 We deny the Unilocs’ request to substitute Uniloc
2017 as moot.
Case: 21-1555 Document: 77 Page: 19 Filed: 11/04/2022
United States Court of Appeals
for the Federal Circuit
______________________
UNILOC USA, INC., UNILOC LUXEMBOURG S.A.,
Plaintiffs-Appellants
v.
MOTOROLA MOBILITY LLC,
Defendant-Appellee
______________________
2021-1555
______________________
Appeal from the United States District Court for the
District of Delaware in No. 1:17-cv-01658-CFC, Chief
Judge Colm F. Connolly.
-------------------------------------------------
UNILOC 2017 LLC,
Plaintiff-Appellant
v.
BLACKBOARD, INC.,
Defendant-Appellee
______________________
2021-1795
______________________
Case: 21-1555 Document: 77 Page: 20 Filed: 11/04/2022
2 UNILOC USA, INC. v. MOTOROLA MOBILITY LLC
Appeal from the United States District Court for the
District of Delaware in No. 1:20-cv-00665-CFC, Chief
Judge Colm F. Connolly.
______________________
LOURIE, Circuit Judge, additional views.
I join the opinion of the court in all respects, except
that I believe the paragraph at page 8, lines 11–23, begin-
ning “[w]e recognize there is considerable force to Uniloc’s
argument that, even if Fortress had been granted a license
and an unfettered right to sublicense, Uniloc would have
Article III standing,” is a regrettable understatement. In
my view, there is more than considerable force to the argu-
ment; it is clear that Uniloc still had the right to sue unli-
censed infringers after it granted the license.
We normally do not opine on issues that are not nec-
essary to decide a case, and our panel soundly affirms the
district court on the ground of estoppel. But here, I believe
the district court so misconstrued the license issue that
something further needs to be said about it.
The district court, respectfully, incorrectly dealt
with this issue as one of determining what is an exclusive
license, citing cases on whether an exclusive licensee alone
has standing to sue without joining the owner of a patent.
That is not the case before us. The court began its analysis
by citing the Rite-Hite decision. See Rite-Hite Corp. v. Kel-
ley Co.,
56 F.3d 1538 (Fed. Cir. 1995) (en banc). But Rite-
Hite wasn’t even a case involving a licensee; it involved dis-
tributors. We held that distributors had no standing to
pursue an infringement claim because the relevant agree-
ments conveyed rights to sell products covered by the as-
serted patents and did not convey exclusive patent rights.
See
id. at 1553–54.
The court went on to discuss our Mars, Textile, and
WiAV cases, which did involve exclusive licenses and
Case: 21-1555 Document: 77 Page: 21 Filed: 11/04/2022
UNILOC USA, INC. v. MOTOROLA MOBILITY LLC 3
whether the exclusive licensee could sue. See Mars, Inc. v.
Coin Acceptor, Inc.,
527 F.3d 1359 (Fed. Cir. 2008) (holding
that a subsidiary was not the exclusive licensee of patents,
and therefore did not have standing to bring infringement
action); Textile Prods. Inc. v. Mead Corp.,
134 F.3d 1481
(Fed. Cir. 1998) (holding that plaintiff was not an exclusive
licensee under the asserted patent and thus lacked stand-
ing to bring an infringement action); WiAV Sols. LLC v.
Motorola, Inc.,
631 F.3d 1257, 1267 (Fed. Cir. 2010) (hold-
ing that “an exclusive licensee does not lack constitutional
standing to assert its rights under the licensed patent
merely because its license is subject not only to rights in
existence at the time of the license but also to future li-
censes that may be granted only to parties other than the
accused”).
Those cases are not on point either, as our case here
is not concerned with exclusive licenses, but with non-ex-
clusive licenses. The question is whether by granting those
licenses the patent owner was precluded from suing parties
not licensed. The cited cases do not support that conclu-
sion.
The grant of a non-exclusive license with the right to
sublicense, as here, gives the licensee the right to subli-
cense others. But the patentee still retains the right to sue
unlicensed infringers. A non-exclusive license only grants
a licensee freedom from suit; it does not divest the licensor
of its right to sue or license other parties, or to practice the
patent itself. See 14B Chisum on Patents 6240 (2022) (“A
license may amount to no more than a covenant by the pa-
tentee not to sue the licensee for making, using or selling
the patented invention, the patentee reserving the right to
grant others the same right.”) (internal quotation marks
and citation omitted).
It is true that the licensee could preempt such a suit
by granting a sublicense, immunizing the purported
Case: 21-1555 Document: 77 Page: 22 Filed: 11/04/2022
4 UNILOC USA, INC. v. MOTOROLA MOBILITY LLC
infringer. But that is a far cry from holding that the patent
owner, simply by having granted a non-exclusive license
with the right to sublicense, loses the power to sue an un-
licensed infringer.
Thus, while agreeing in full that Uniloc loses its appeal
by being estopped from suing Motorola because it settled
its suit with Apple rather than appealing it, it is not be-
cause it lost the power to sue by granting Fortress a non-
exclusive license with the right to sublicense.
