Apple Inc v. Voip-Pal.com, Inc.

Background

Apple sued VoIP-Pal.com, Inc. for declarations that Apple did not infringe U.S. Patent Nos. 10,218,606 and 9,935,872 and that the patents were invalid. The patents concern systems for routing communications over Internet Protocol.

VoIP-Pal moved to dismiss under Federal Rule of Civil Procedure 12(b)(1), arguing that the court lacked subject-matter jurisdiction because VoIP-Pal had given Apple a covenant not to sue. The initial covenant covered Apple’s products and services that Apple was making, using, selling, offering for sale, or importing at the time of the covenant or had used before then. In its reply, VoIP-Pal changed the covenant to expressly cover past products and services as well.

Court’s Analysis

A declaratory-judgment action requires an actual controversy— a substantial, immediate, and real dispute between parties with opposing legal interests. A patent owner’s covenant not to sue can sometimes eliminate that controversy, but the patent owner bears a “formidable burden” to show that it could not reasonably be expected to resume enforcement activities.

The court concluded that the controversy remained under all the circumstances. VoIP-Pal had sued Apple for patent infringement four times since 2016. The court also considered VoIP-Pal’s voluntary dismissal of its 2020 Texas infringement case without prejudice, its filing of another Texas lawsuit against Apple involving similar technology and the same accused products after providing the covenants, and statements indicating that VoIP-Pal preferred to litigate in the Western District of Texas rather than in this district.

The court also found that the reply covenant did not cover Apple’s customers. VoIP-Pal had previously alleged that Apple’s customers directly infringed the ’606 patent. Because the covenant did not assure Apple and its customers that VoIP-Pal would never assert the patents against them, it did not eliminate subject-matter jurisdiction.

Disposition

The court denied VoIP-Pal.com, Inc.’s motion to dismiss. The order did not decide whether Apple infringed the ’606 or ’872 patent, or whether either patent was invalid; it decided only that the court retained jurisdiction over Apple’s declaratory-judgment action.