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Lenovo Advances Antitrust Attack on InterDigital 4G Patents (1)

March 24, 2021, 9:05 PMUpdated: March 24, 2021, 9:40 PM

Lenovo and Motorola can move forward with antitrust claims over an alleged scheme by InterDigital Technology Corp. to have its intellectual property incorporated into 3G and 4G wireless technology by lying to a standards-setting organization, a federal judge in Delaware ruled Wednesday.

Judge Leonard P. Stark said the tech companies included a plausible monopolization claim based on allegations that InterDigital misled the European Telecommunication Standards Institute about its commitment to licensing its technology at “fair, reasonable, and nondiscriminatory,” or FRAND, rates.

The lawsuit adequately alleges that InterDigital’s misrepresentations let it “obtain and exploit market power and demand unlawful and artificially high rates,” Stark wrote.

The suit, filed last year in the U.S. District Court for the District of Delaware, alleges a “multi-pronged scheme” to fraudulently obtain “standard-essential patent” designation.

Because competitors have no choice but to use such patents if they want to participate in an industrywide standard like 3G or 4G, the holders of that intellectual property must generally license it on FRAND terms.

The suit accuses InterDigital of abusing that tradeoff. Although the company may make some network and video technology that’s essential to 3G and 4G phones, its number of legitimate patents doesn’t approach the “thicket” in its “artificially inflated portfolio” of thousands, the suit says.

Stark dismissed one of its counts, tentatively rejecting allegations of “concerted action between InterDigital and ETSI” or its members. It’s a stretch to link any alleged “lack of reasonable safeguards” in their agreement to a supposed “anti-competitive conspiracy,” the judge found.

That part of the ruling aligned him with the Justice Department, which intervened in the case last year to make that argument.

But the DOJ’s brief “actually supports” the suit’s separate monopolization claim, Stark said.

The judge ordered the case consolidated with a patent lawsuit brought by InterDigital, saying the infringement claims in that case are related to allegations that the company “overdeclared” the relevance of its patents to the 3G and 4G standards.

Lenovo and Motorola are represented by Morris, Nichols, Arsht & Tunnell LLP. InterDigital is represented by Smith, Katzenstein & Jenkins LLP and Wilson Sonsini Goodrich & Rosati PC.

The case is Lenovo (U.S.) Inc. v. InterDigital Tech. Corp., D. Del., No. 20-cv-493, 3/24/21.

(Updates with additional reporting throughout.)

To contact the reporter on this story: Mike Leonard in Washington at mleonard@bloomberglaw.com

To contact the editor responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com