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Federal Judge Stays Certain Antitrust Counterclaims against Patent Assertion Entity
Practical Law Legal Update 0-605-9428 (Approx. 4 pages)
Federal Judge Stays Certain Antitrust Counterclaims against Patent Assertion Entity
by Practical Law Antitrust
| Published on 24 Mar 2015 • USA (National/Federal) |
A federal district court in Intellectual Ventures I LLC v. Toshiba Corporation stayed Toshiba's patent misuse defense and certain antitrust counterclaims and allowed other antitrust counterclaims to proceed in Intellectual Ventures' suit charging Toshiba with infringing on multiple patents.
On March 20, 2015, Judge Sue L. Robinson of the US District Court for the District of Delaware in Intellectual Ventures I LLC v. Toshiba Corporation stayed Toshiba's patent misuse defense and certain antitrust counterclaims, while allowing other antitrust counterclaims to proceed (No. 13-453-SLR (D. Del. Mar. 20, 2015)). Toshiba filed its counterclaims in response to patent assertion entity Intellectual Ventures' (IV) claim that Toshiba infringed on ten of IV's patents.
In its patent misuse defense, Toshiba alleged that IV unlawfully:
- Requires Toshiba to pay for irrelevant or invalid patents that comprise part of its 3,700 patent portfolio.
- Monopolized the market for the patents in its portfolio by:
- aggregating thousands of patents in a hold-up portfolio; and
- charging Toshiba monopoly prices to license those patents.
In its antitrust counterclaims, Toshiba alleged that IV:
- Violated Section 7 of the Clayton Act by acquiring thousands of otherwise inconsequential patents to create a patent licensing monopoly in the semiconductor patent market.
- Violated Section 1 of the Sherman Act by conspiring with other companies to restrain trade in the semiconductor patent market by asserting its semiconductor patents against companies that refused to comply with its direct hold-up demands.
- Violated Section 2 of the Sherman Act by willfully acquiring thousands of semiconductor patents to achieve and maintain monopoly power in the semiconductor market.
Judge Robinson reasoned that the patent misuse defense and any antitrust counterclaims regarding the validity of IV's patent portfolio are related to the scope of the underlying patent litigation, and should therefore be stayed pending the results of the patent litigation. However, Judge Robinson held that the antitrust counterclaims regarding the numerosity and value of the patent portfolio could proceed, as those issues are unrelated to whether the patents themselves are valid.
For more on patent assertion entities and non-practicing entities, see Practice Note, Patent Litigation: Litigating Against a Non-practicing Entity and Article, Addressing the Patent Assertion Entity Problem.