Double Trouble – Apple’s Recent Legal Setbacks Highlight Key Lessons in Global IP Strategy

Apple Inc. continues to sit at the forefront of global innovation, but even the most sophisticated technology companies are not immune to complex legal challenges. In recent weeks, Apple has faced two significant intellectual property (IP) setbacks, one in the United States and one in the United Kingdom, each with far-reaching implications for companies navigating patent litigation, standards licensing, and global IP enforcement.

This blog examines two recent decisions that have put Apple’s IP practices under scrutiny: one involving the use of Applicant Admitted Prior Art (AAPA) in a U.S. case before the Federal Circuit, and another concerning royalty obligations for standard-essential patents (SEPs) in the UK.

Federal Circuit Reverses PTAB Decision: AAPA Misapplied

In April 2025, the U.S. Court of Appeals for the Federal Circuit overturned a favorable ruling for Apple by the Patent Trial and Appeal Board (PTAB). The case centered on Apple’s challenge to a patent using a combination of a printed publication and Applicant Admitted Prior Art (AAPA), statements made in the challenged patent’s own specification acknowledging the existence of certain prior art.

The PTAB had sided with Apple, holding that the combination was valid grounds to invalidate the claims. However, the Federal Circuit disagreed, clarifying that AAPA alone does not constitute “prior art consisting of patents or printed publications” as required under the America Invents Act (AIA) for inter partes review (IPR) proceedings. The court ruled that while AAPA may inform a skilled artisan’s understanding, it cannot be the primary basis for an obviousness challenge.

Implications:

  • Limits of IPR Strategy: Companies seeking to invalidate patents at the PTAB must ensure their arguments rely primarily on statutory prior art. Internal admissions, even when found in the patent under review, are not enough.
  • Importance of Procedural Precision: This case reinforces how procedural interpretation can outweigh substantive arguments. Understanding statutory language is critical to litigation success.
  • Drafting Risk Awareness: While not directly at issue in this case, the broader takeaway for patent applicants is to be cautious when characterizing prior art in their applications, as such language can be used in litigation, though with limits.
  • Increased Scrutiny of PTAB Practices: The ruling may prompt changes in how PTAB applies AAPA going forward, potentially raising the bar for IPR petitioners more broadly.

UK Court of Appeal Orders Apple to Pay $502 Million in FRAND Dispute
Just days later, Apple received another legal setback, this time from the UK Court of Appeal. On May 1, 2025, the court affirmed a judgment requiring Apple to pay $502 million to Optis Cellular Technology LLC for a global license to its 4G standard-essential patents. The case, which began when Optis sued Apple in 2019, centered on the appropriate amount Apple must pay under fair, reasonable, and non-discriminatory (FRAND) licensing obligations, which are required under global standards-setting agreements.

The decision dramatically increased the damages from the UK High Court’s 2023 estimate of just over $56 million which was made by the judge at the High Court of England and Wales without reliance on experts from either company. The UK Court of Appeals found that a lump-sum license more accurately reflected the global nature of Apple’s 4G usage and the market value of Optis’s portfolio when awarding $502 million based on a $0.15 per unit royalty. Apple had previously indicated that it would not accept a license on terms set by the UK court and may appeal this decision.

Implications for large IP holders and the broader IP landscape:

  • FRAND Licensing as a Global Risk: The case signals a shift in how courts outside the U.S. are willing to impose significant global licensing terms, even where the jurisdictional scope is limited.
  • Litigation Forum Strategy: SEP holders may increasingly look to the UK and other jurisdictions as favorable venues for global FRAND determinations.
  • Financial Exposure in SEP Disputes: The magnitude of the damages awarded suggests that SEP enforcement remains a serious financial risk for tech companies, especially those reliant on standard essential patents.

Strategic Takeaways for Technology Companies
Taken together, these rulings offer several lessons for companies navigating the increasingly complex world of IP litigation:

  • Global IP Planning is Essential: Legal decisions in one country can have global implications. Multinationals must anticipate and coordinate litigation strategies across multiple jurisdictions.
  • Proactive Legal Audits: Regular reviews of patent drafting practices and litigation exposure are crucial. Ensuring that internal admissions in patents does not open doors for unintended invalidity risks is now more important than ever.
  • Valuation and Licensing Readiness: As courts impose large-scale licensing obligations, companies must be prepared to defend or justify the value of their own and others’ patent portfolios, especially under FRAND regimes.

Conclusion
Apple’s recent legal setbacks illustrate the challenges even the most sophisticated companies face in managing global intellectual property. The Federal Circuit’s reversal and the UK’s expanded damages ruling in the Optis case serve as timely reminders that patent strategy must be tightly integrated with legal, technical, and business planning.

For consulting firms advising clients on IP strategy and valuation, these cases reinforce the value of forward-looking risk assessments, cross-border legal coordination, and ongoing patent portfolio management. As courts refine the rules around prior art and FRAND licensing, staying ahead of evolving jurisprudence will be key to maintaining competitive advantage and avoiding costly surprises.

Demystifying the ITC: A Guide on the Role of the ITC in Patent Disputes

The International Trade Commission (ITC) received a lot of media attention in December of 2023 due to the patent dispute between Apple and Masimo resulting in a temporary ban on the importation and sale of certain models of the Apple Watch. While many people are familiar with State and Federal courts, most people are not familiar with ITC so Foresight created this primer to better understand the role of the ITC in patent disputes.

The ITC stands as a critical resource for patent holders, offering a unique avenue to counter patent infringements by preventing the importation of infringing products at U.S. ports of entry. However, the ITC’s procedures are distinct from those of Federal courts where patent disputes are normally litigated, demanding a nuanced understanding, especially for startups.

Filing a Complaint and Building Your Case

Initiating an ITC investigation is akin to commencing a lawsuit in Federal court. A formal complaint, known as a Section 337 action, is submitted, alleging that products arriving in the U.S. violate a valid patent. Simultaneously, the complaint must demonstrate the presence of a “domestic industry” linked to the allegedly infringed patented products.

Proving a “domestic industry” involves showcasing substantial investments in areas like labor, facilities, or research and development that support both the infringing products and the complainant’s own products. Following the complaint, the ITC evaluates whether to commence an investigation, typically within 30 days. Once initiated, the investigation becomes official and is documented in the Federal Register. Concurrently, any ongoing court cases dealing with the same issues and involving the same parties are temporarily paused during the ITC’s investigation.

The Role of the Judge and Special Staff

Throughout the investigation, an Administrative Law Judge (ALJ) assumes a central role as the fact-finder. The ALJ presides over hearings, issues decisions on motions, and substantially influences the investigation’s course. Adding to the complexity is the “Staff,” an attorney appointed from the Office of Unfair Import Investigations (OUII), who maintains an independent role during the investigation.

Timetables and Procedural Rules

The ITC strives for expedited investigations, determining an ultimate “target date” for the final decision, usually within 16 months of commencement. The ALJ establishes a procedural schedule encompassing deadlines for various aspects such as discovery, claim interpretation, motions, and hearings.

Collecting Evidence and Safeguarding Sensitive Information

After the investigation begins, both parties embark on evidence gathering, adhering to the established schedule. They employ tools like questions, document requests, and interviews. It is worth noting that in the ITC, responses to discovery requests must be provided within a shorter timeframe, just 10 days, in contrast to the more extended periods typically allowed in standard court proceedings. Renowned for its efficiency, an ITC investigation often concludes in months rather than the year or more typical in district court cases.

To safeguard sensitive information revealed during discovery, protective orders are issued, requiring attorneys to adhere to specific guidelines. Confidential business information (CBI) remains accessible only to specific individuals, including outside lawyers, experts, the Staff, ALJ, and the Commission.

Hearings and Witness Testimonies

ITC hearings depart significantly from traditional court trials. A jury is absent, and the ALJ serves as the fact-finder. Additionally, many ALJs opt for written witness statements instead of live testimony, with cross-examinations conducted during the hearing.

Initial and Final Decisions and Post-Investigation Remedies

Following the hearing and post-hearing arguments, the ALJ delivers an initial determination (ID). This document determines whether a violation of Section 337 occurred, based on evidence and the presence of a domestic industry. It also scrutinizes patent claims individually. Once the ITC’s determination has been finalized, and if a violation is established, remedies specified in the final determination (FD) become accessible.

Typically, the ITC offers exclusion orders or cease and desist orders. Exclusion orders direct U.S. Customs and Border Protection to block infringing products at ports of entry, with two types available – general (applicable to all infringing products) and limited (specific to identified manufacturers or importers). Cease and desist orders prohibit respondents from selling infringing products already within the U.S.

Presidential Review and Appellate Processes

Given that the ITC is a government agency, the President reviews exclusion orders within 60 days of the FD’s issuance. If no action is taken during this period, the ITC’s decision becomes final. Subsequently, either party can launch an appeal to the United States Court of Appeals for the Federal Circuit.

Conclusion

The ITC is an important forum for startups to become familiar with due to the impact of an exclusion order. Patent infringement is a common issue that startups are dealing with, the ITC is an important venue to addressing infringement involving products imported into the U.S. For a recent example of the role of the ITC in patent disputes and the impact of an exclusion order, please see our next blog focused on the ITC dispute between Apple and Masimo.

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