U.S. District Court refuses to dismiss antitrust claims against Samsung

On 14 May 2012 the United States District Court for the Northern District of California denied Samsung’s motion to dismiss Apple’s claims that Samsung engaged in unlawful monopolization by failing to disclose certain essential patents and to license them on fair, reasonable and non-discriminatory (“FRAND”) terms. According to Apple, these deceptive practices allowed Samsung to unlawfully acquire monopoly power in relevant markets for technologies essential for the Universal Mobile Telecommunications Standard (“UMTS”) and subsequently to exploit the monopoly power in various anti-competitive ways.

In late October 2011 the court initially dismissed the monopolization claims as Apple did not sufficiently allege facts to support the claimed antitrust violations (see Newsletter 6/2011 p. 3), but allowed Apple to remedy this deficiency by amending its claim.

In the instant case, the court found that Apple’s amended monopolization claims sufficiently allege specific facts to withstand a motion to dismiss. First, as to Apple’s claim that Samsung’s false FRAND licensing commitment constituted monopolization, the court found that Apple’s amended claims sufficiently specify when, by whom and for which patents false FRAND declarations were made so as to meet the heightened pleading standard applicable to allegations of fraud.

Second, as to Apple’s claim that Samsung’s failure to disclose its essential patents constituted monopolization, the court found that Apple presented viable alternative technologies to each of Samsung’s essential technologies at issue and that the standard-setting organization would have adopted a different technology had Samsung’s rights been known.

The court also rejected Samsung’s arguments that Apple did not plead a relevant antitrust market and that Samsung possessed monopoly power on that market. Therefore, the court found that Apple had stated a claim for a violation of Section 2 of the Sherman Act (and corresponding California state law claims). [Juha Vesala]