Apple dodges Optis patent payout for now as judge orders a do-over

Third time's a charm?

Apple has escaped a $300 million patent infringement damages penalty – for now – due to what a trio of judges said comes down to faulty jury instructions.

The Monday appeal victory [PDF] for Apple comes in its long-running case against "patent assertion entity" Optis, which has accused Apple of violating several patents it owns related to LTE cellular technology.

The original verdict, handed down in the Eastern District Court of Texas in 2020, saw Apple fined $506.2 million for allegedly violating patents Optis held. Apple managed to get the matter retried because the original case failed to take into account fair, reasonable, and non-discriminatory (FRAND) requirements for standards-essential patents in determining damages, leading to the $506 million fine being replaced with a $300 million one. 

Apple appealed against that decision too, which brings us to the latest decision [PDF], a precedential decision from a three-judge panel that vacated both fines because because jury instructions lumped all the patents together.

According to the judges, the lower court rendered both fines invalid by asking jurors in the first trial to issue a single decision on infringement of five Optis patents, rather than breaking the matter up into five separate findings. Notably, both Apple and Optis asked the court to have the jury decide each matter separately.

The court's choice to roll all five infringement claims into a single question to jurors, asking them if Apple infringed "any" of Optis's patents, meant that the verdict form violated Apple's right to jury unanimity for each claim against it. According to the appeals judges, that violated Apple's seventh amendment right to a jury trial.

The damages retrial must also be vacated, the Appeals judges concluded, because the court instructed the jury "to assume all five asserted patents are infringed and to determine a single damages amount," the opinion said. 

But because the original jury form didn't ask jurors to unanimously decide for each of the five infringement claims, the court didn't know whether the jurors would have agreed that all five were violated. Hence, "Optis has been awarded damages for a scope of infringement that it has not proven and that the jury had not unanimously found."

The matter isn't over, however, as the Appeals panel remanded the matter back to the District Court for yet another retrial that will have to conform with the decisions issued yesterday.

While we'll have to wait to find out whether Apple is forced to cough up money to Optis, it might come out slightly ahead if the Appeals Court's other decisions in the matter hold up.

Along with taking umbrage with the jury instructions, the Appeals panel also found that one of the patents in question was too abstract to be litigated as Optis proposed, as well as finding that the District Court erred in not properly analyzing a second patent to determine whether Optis's claims were too indefinite to meet a "means-plus-function" claim.

The Appeals Court also found that the District Court abused its discretion by allowing evidence to be admitted during the trial relating to Apple's 2019 Qualcomm settlement, which the judges said was likely to have prejudiced the jury in Optis's favor. 

In an email, Optis told us that none of its patents were invalidated as part of the appeal decision, and it remains optimistic that the third trial will come down in its favor.

"We remain highly confident the Court will establish fair compensation for the critical Optis patents that enable high-speed connectivity for millions of Apple devices," an Optis spokesperson told The Register in an email. "Nothing in this decision challenges the fundamental facts, which demonstrate that Apple is infringing Optis patents and permit a new trial on damages."

Apple did not respond to our request for comment. ®