Published: 4/13/16
In this case, the court denied InterDigital’s motion to dismiss a Microsoft complaint alleging that InterDigital monopolized markets for SEPs that InterDigital owns. Microsoft alleged that InterDigital fraudulently induced the European Telecommunications Standards Institute (“ETSI”) to incorporate certain InterDigital patents into its standards by committing to license those patents on FRAND terms, and then subsequently breached its FRAND commitments. InterDigital’s breaches, according to Microsoft, included refusing to honor its licensing commitments, transferring certain SEPs to other entities to “double dip” on royalty demands, conditioning licenses to SEPs on licensee’s agreement to license InterDigital’s non-essential patents, tying U.S. patents to foreign patents, and bringing baseless infringement actions and demands for injunctive relief.
InterDigital argued that Microsoft’s monopolization claim should be dismissed because Microsoft’s sole injury consisted of patent litigation costs and therefore it is barred by the Noerr-Pennington doctrine, which immunizes the initiation of litigation unless it constitutes a “sham.” Although the court assumed (without making a finding) that InterDigital’s lawsuit against Microsoft did not constitute “sham” litigation, it concluded that Microsoft had stated a viable claim. It held that Microsoft’s allegations of deceptive conduct before ETSI were sufficient to make out a monopolization claim and that InterDigital’s “suits to enforce its purported SEPs are part of the way in which [InterDigital] accomplishes its alleged anticompetitive scheme,” and therefore not immunized from antitrust liability. Under this approach, lawsuits brought as part of an anticompetitive scheme to breach FRAND commitments need not constitute sham litigation to be deemed monopolizing acts.