On March 2, 2020, Judge Gilstrap issued an Order granting-in-part Apple’s motion to dismiss a declaratory judgment claim by Optis to the extent the claim related to FRAND commitments for foreign standard essential patents (SEPs).   But he maintained the action as to FRAND commitments for U.S. patents.  This decision may be part of a trend for U.S. courts respecting comity with other countries by limiting disputes over SEPs and FRAND commitments to U.S. patents in the absence of consent by both parties to adjudicate issues concerning foreign SEPs.

Background

Optis sued Apple on February 25, 2019, filing an amended complaint on May 13, 2019. Optis alleges that it owns “patents essential to various standards, including for example, LTE.”  Optis states that the original assignees of the patents made declarations to license the patents on FRAND terms, forming a contract with implementers under French Law. Optis alleges Apple is not licensed to practice these patents and has acted in bad faith during efforts to agree upon a global FRAND license to the patents.  

Optis currently also is seeking a worldwide FRAND determination from the High Court of England and Wales.  Optis is asking the U.S. court for a declaration, to the extent necessary beyond the UK proceeding, that they have complied with FRAND obligations as to Apple in the U.S.  Optis argues that (1) they are not liable under U.S. competition law for a failure to comply with FRAND obligations and (2)  Apple cannot rely on a FRAND defense in the U.S.  

Apple moved to dismiss this count for lack of subject matter jurisdiction, arguing that the Court does not have jurisdiction over Optis’ claim as it relates to foreign patents and that no justiciable controversy remains once those portions of the claim are gone. 

Decision

Judge Gilstrap agreed with Apple that the court would chose not to exercise jurisdiction over FRAND commitments arising under foreign laws or pertaining to foreign patents: 

[A]ny portion of Count VIII that seeks a declaration that Plaintiffs have complied with their obligations under foreign laws or as they relate to foreign patents, or that [defendant] may not raise a FRAND defense in a foreign jurisdiction, are dismissed — because the Court elects not to exercise its jurisdiction under these facts. 

Judge Gilstrap, however, denied Apple’s motion to the extent an actual case and controversy remains as to Optis’ FRAND obligations concerning U.S. patents:

⁠[Defendant] asserts that because the licensing offers alleged by Plaintiffs were global licenses, any determination of whether a hypothetical offer for a U.S.-only license complied with FRAND obligations would be an advisory opinion. However, while such a global license would involve foreign patents subject to foreign FRAND obligations, they would also involve U.S. patents subject to U.S. FRAND and anti-competition obligations. The Court is not prepared to conclude, at this early stage, that the U.S. components of the license offers could not be extricated from the foreign components in any meaningful way.