Posts Tagged: "sherman act"

On Tuesday, January 11, the United States District Court for the District of Columbia denied Facebook’s motion to dismiss a complaint brought against it by the U.S.  Federal Trade Commission (FTC), holding that the FTC had stated a plausible claim for relief under Section 2 of the Sherman Act. The FTC filed a complaint on December 9, 2020, asserting one count of monopoly maintenance under Section 2 of the Sherman Act. Facebook moved to dismiss both this case, and a related state case. The district court dismissed the Commission’s complaint but granted the FTC the opportunity to amend. Following a leadership change from when the complaint was initially filed, the FTC filed an amended complaint in August of 2021. L

On September 20, 2021, Judge John Robert Blakey in the Northern District of Illinois issued an opinion in a Walker Process patent fraud antitrust case denying defendants’ motion for summary judgment on their statute of limitations defense. TCS John Huxley America, Inc. v. Scientific Games Corp., No. 1:19-cv-1846, 2021 WL 4264403 (N.D. Ill. Sept. 20, 2021). The opinion established important principles regarding application of the statute of limitations to the “discovery rule” in a Walker Process antitrust case. The author’s firm, Freeborn & Peters, was one of the firms representing the plaintiffs. The plaintiffs had sued Scientific Games Corp. alleging a violation of Section 2 of the Sherman Act. The complaint alleged that Scientific Games, through its acquired entity, SHFL Entertainment, brought patent infringement litigation in 2009 and 2012 based on fraudulently obtained patents for automatic card shufflers used in licensed casinos.

Last week, the attorneys general of 36 U.S. states and the District of Columbia filed a lawsuit in the Northern District of California against internet services and mobile operating system (OS) provider Google. The complaint lists various causes of action under the Sherman Antitrust Act and a number of state antitrust laws that have allegedly been violated by Google’s practices in leveraging its monopoly power in the mobile OS sector to maximize its revenues on app purchases through the Google Play Store through suppression of competing app platforms and charging exorbitant fees from app developers.

On June 21, the U.S. Supreme Court issued a unanimous ruling in National Collegiate Athletic Association v. Alston (Alston) in which the nation’s highest court affirmed an injunction entered by the Northern District of California prohibiting the NCAA from restricting education-related benefits that member schools can extend to student-athletes. Consolidated by the Supreme Court last December with related proceedings in American Athletic Conference v. Alston, this decision brings a close to the latest chapter in the ongoing skirmish between NCAA member schools and their student-athletes seeking a larger cut of revenues earned by colleges and NCAA athletic associations.

Standard Setting Organizations (SSOs) exist to identify and select the best innovations entire industries will build upon. Those contributing patented technologies are asked to provide fair, reasonable and non-discriminatory assurances. In essence, patent owners contributing technologies are committing to provide access to their Standard Essential Patents (SEPs). Whether one thinks it is good or bad, it is an inescapable truth that over the last decade the patent system in the United States has become weakened. The weakened patent system, and a patent grant the Supreme Court now considers to be a “government franchise,” has shifted leverage from patent owners to technology implementers. Amidst this uncertainty, in September IPWatchdog.com held a two-day symposium to discuss the state of standard essential patents in the United States. During this symposium, overwhelming consensus was achieved by the Patent Masters™ faculty and symposium attendees on a variety of principles and recommendations.

Commissioner Christine Wilson of the U.S. Federal Trade Commission (FTC) addressed the IPWatchdog Patent Masters Symposium on Tuesday, September 10, emphasizing three main points in her keynote: that Judge Lucy Koh’s decision in FTC v. Qualcomm was flawed, that antitrust analyses should be more focused on dynamic, rather than static effects, and that, despite the latter point, antitrust authorities routinely try and fail to integrate dynamic effects into antitrust law. She was clear up front that her views did not necessarily match those of her fellow commissioners. First, Wilson reiterated the ideas expressed in her May 28 op-ed for the Wall Street Journal, which she summarized by saying that U.S. District Court for the Northern District of California Judge Lucy Koh’s opinion in the FTC v. Qualcomm case “creates bad law and bad policy.” Wilson explained that Koh in her lengthy analysis took the opportunity to “radically expand a company’s legal obligation to help its competitors” by reviving a “discredited” 1985 Supreme Court case, Aspen Skiing Co. v. Aspen Highlands Skiing Corp. “My opposition to the court’s opinion does not stem from any desire to help or protect Qualcomm,” Wilson said. “I am focused on applying and preserving sound antitrust principles and this decision scares me.”

Judge Douglas Ginsburg of the U.S. Court of Appeals for the D.C. Circuit, Professor Joshua Wright, and attorney Lindsey Edwards of Wilson Sonsini Goodrich & Rosati, have condemned the decision in FTC v. Qualcomm Inc. (N.D. Cal. May 21, 2019) in the George Mason University Law & Economics Research Paper Series. In their paper, “Section 2 Mangled: FTC v. Qualcomm on the Duty to Deal, Price Squeezes, and Exclusive Dealing,” the authors characterize the decision as being a part of “the misguided trend of using antitrust law to intervene in contract disputes between sophisticated parties negotiating over intellectual property rights.”

In a decision published in redacted form on January 29, Judge Beth Labson Freeman of the Northern District of California denied ASUSTek Computer Inc.’s and ASUS Computer International’s (collectively, ASUS’s) motion for summary judgment that InterDigital, Inc.’s (InterDigital’s) standard essential patent (SEP) licensing practices breached its FRAND obligations. The court also granted-in-part and denied-in-part InterDigital’s motion for summary judgment, rejecting a request to dismiss ASUS’s Sherman Antitrust Act claim but granting summary judgment as to issues relating to judicial and promissory estoppel and as to a California competition law claim. ASUS Computer Int’l v. InterDigital, Inc., Case No. 5:15-cv-01716-BLF, ECF No. 367 (N.D. Cal. Jan. 29, 2018). The court’s ruling comes as the case is progressing toward a jury trial, presently scheduled for May 2019. Several of the issues addressed are fact-specific to the case, but the rulings relating to breach of contract, most favorable licensees, and the Sherman Act are of particular interest for SEP licensing and illustrate how the legal landscape continues to evolve.

Secure cloud communications provider Ribbon Communications announced it would continue to enforce its intellectual property rights in the face of what it called “baseless attacks” by its UK-based cloud competitor Metaswitch Networks. Ribbon decried a recent antitrust lawsuit filed against it by Metaswitch and charged its competitor with continuing to infringe upon Ribbon’s patent claims despite earlier jury verdicts in district court which found that Metaswitch was infringing upon those asserted claims. Ribbon Communications’ announcement follows a lawsuit filed by Metaswitch Networks on November 19th in the Southern District of New York. “It is disappointing that Metaswitch is attempting to relitigate claims that it already lost in federal court,” said Ribbon CEO Franklin “Fritz” Hobbs. “Ribbon will not be deterred by these actions, and we look forward to having Ribbon’s intellectual property rights vindicated and Metaswitch finally paying for its misappropriation of Ribbon technology.”

Barcode reading solutions provider Code Corporation of Salt Lake City, UT, announced that it had filed antitrust actions against engineering conglomerate Honeywell International (NYSE:HON) at both the U.S. International Trade Commission and in the Eastern District of Texas. Code, which is seeking an injunction on the importation and sale of barcode readers marketed by Honeywell for the healthcare industry, alleges that Honeywell engaged in a campaign to mislead distributors about the legitimacy of Code’s barcode reader products as part of an effort to monopolize that market.

Last month, after a multi-year antitrust investigation, the United States Federal Trade Commission filed a complaint in federal district court charging Qualcomm with using anticompetitive business practices in violation of Section 5 of the Federal Trade Commission Act. The FTC’s decision to charge Qualcomm with violating Section 5 of the FTC Act, in lieu of alleging that Qualcomm’s conduct violated the Sherman Act appears to be the tactical equivalent of the government’s 1930’s decision to pursue Capone for tax evasion… Section 5 should not be used as a fallback device to challenge conduct actionable under the Sherman Act, but where the enforcement agency is unable or unwilling to meet the evidentiary rigor required by case law under the Sherman Act.