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AST anti-trust case dismissed by Delaware court

One of the most read stories on this blog during 2010 concerned an anti-trust suit launched by a company called SITI-Sites against defensive patent aggregator Allied Security Trust (AST), its member companies Verizon, Cisco Systems and Ericsson Inc-Sony Ericsson Mobile Communications, current CEO Dan McCurdy, and the man he succeeded Brian Hinman. SITI claimed that AST, the companies and the named individuals were engaged in behaviour that prevented small NPEs operating in the telecoms sector from exploiting their patents effectively. It sought an injunction and damages of up to $500 million. 

Well, it looks like the action is now very close to failing. On 29th December, Judge Denise Cote rejected all SITI's arguments, dismissed the complaint and ordered the case closed, having found that SITI did not have the legal standing to bring the action. SITI had previously amended its claims to allege "collusion to achieve devaluation of patents, concerted refusals to deal, and deceptive price-fixing". Having done that my undersanding is that it now has no further ability to submit amended claims, which means that unless SITI appeals, the case is over. 

Joff Wild
IAM Magazine
09 January 2011

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Competition/antitrust, Licensing, IP litigation, Patents


RE: AST anti-trust case dismissed by Delaware court

Joff --

Interesting case, and probably one that RPX (among others) has been watching closely. As I read the opinion, the judge isn't saying that AST didn't break the antitrust laws, only that SITI (by having sold its patents) no longer has a redressable injury. Unless an appeal is successful, it sounds like the patent owners will need to bring these actions directly.

Patrick Anderson, Patrick R Anderson PLLC on 10 Jan 2011 @ 15:37

RE: AST anti-trust case dismissed by Delaware court

The key point is that it is an anti-competitive restrictive "catch and release" plan, designed to distort the market. AST only has 18 members and by any measure they are the Big Boys. The club membership is restricted by large entry fees and a problem that smaller entities even if they could stump up the fees cannot engage with the plan on the same scale. Same for PatentFreedom.

Now if they were to "catch and abandon" that would look very different. All within the sector could benefit rather than the powerful few.

The model has not been tested with this case, but lets see what comes next.

Nicholas White, Tangible IP on 19 Jan 2011 @ 14:58

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