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Intel Says Firm’s Patent Assertions Break Antitrust Law (1)

Oct. 22, 2019, 1:20 PMUpdated: Oct. 22, 2019, 2:08 PM

Fortress Investment Group violates antitrust law by funding patent assertion entities that assert “weak patents” against tech companies including Apple and Google, according to a complaint filed by Intel Corp. in the Northern District of California.

Fortress invests in the entities on “terms so severe that the PAEs have no choice but to make aggressive and reckless patent assertions to attempt to generate the revenue required to meet their obligations,” Intel says.

SoftBank acquired Fortress in 2017, and Intel says the struggling firm “has tried to turn around its performance and justify SoftBank’s investment in it” by investing in patent assertion entities. Fortress has used its investments to “aggregate a massive portfolio of patents” related to high-tech electronics, Intel says.

Fortress means to “stretch the resources” of its targets by asserting multiple weak patents against tech companies to increase the possibility that a court will find infringement or the target will agree to a license, according to Intel.

“Fortress’s use of a web of separate PAEs to disperse and enforce the portfolio also ensures that there is no single entity that can offer a comprehensive license to the Fortress portfolio and thereby increases the number of transactions necessary for licensees to attempt to secure patent peace,” Intel says.

Intel says the litigation imposes “a tax on the electronics industry that increases prices, decreases output, and ultimately harms consumers.”

Causes of Action: Restraining competition in patent licensing, unlawful asset acquisitions, unfair competition, monopolization of Fortress’s portfolio market.

Relief: Damages, injunctive relief returning patents to the original transferors, cancellation of patents transferred to the defendants that violate antitrust law, costs and expenses.

Response: “We are confident in our business practices and our legal position and view this lawsuit as meritless, but we don’t comment on the specifics of litigation matters,” Fortress Managing Director Gordon E. Runté told Bloomberg Law.

Attorneys: Wilmer Cutler Pickering Hale & Dorr LLP represents Intel.

The case is Intel Corp. v. Fortress Inv. Group LLC, N.D. Cal., No. 5:19-cv-06856, complaint filed 10/21/19.

To contact the reporter on this story: Blake Brittain in Washington at bbrittain@bloomberglaw.com

To contact the editors responsible for this story: Jo-el J. Meyer at jmeyer@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com