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Apple Beats Claims That App Store Suppresses Competition

Dec. 1, 2020, 1:18 AM

Apple Inc. won’t face claims it manipulated search results in its iOS and MacOS App stores to suppress competition, after a federal judge in Delaware partially dismissed a lawsuit filed by email app maker Blitz Inc. on Monday.

Blix alleged Apple copied patented messaging technology for its “Sign In With Apple” feature, then removed the developers’ app, BlueMail, from its App Store. The tech giant uses App Store search results to push consumers toward Apple products, suppressing third-party competition, the suit said.

The U.S. District Court for the District of Delaware dismissed the antitrust claims without prejudice, concluding Blix failed to plead direct or indirect evidence of Apple’s monopoly power or anticompetitive conduct in violation of the Sherman Act.

Allegations that Apple has the power to restrict competition aren’t equivalent to allegations that the company actually did restrict competitors’ output, Judge Leonard P. Stark wrote. And even if Blix had plausibly alleged that Apple held a monopoly over apps, its failure to allege anticompetitive conduct provides an independent reason to dismiss its claims.

And Blix’s anticompetitive-conduct claims failed because the company itself demonstrated that the App Store isn’t essential to BlueMail’s success, Stark said. Blix alleged Blue Mail achieved success on multiple platforms and was sold in the market for five years before becoming available on the App Store.

Stark also dismissed patent infringement claims related to a single claim in Blix’s patent for BlueMail that was central to the parties’ briefings. A two-step process set out in 2012 by the U.S. Supreme Court in Mayo Collaborative Services v. Prometheus Laboratories Inc. should be used to determine whether an idea is patent-eligible, Stark said.

The challenged claim relies on the abstract idea of using a proxy to facilitate anonymous communications, Stark said. The claim doesn’t fall under an exception to patent eligibility that allows for abstract ideas to be patented if they describe a unique and inventive concept, he wrote.

Stark declined to decide the eligibility of other claims in the BlueMail patent and directed the parties to confer before informing the court whether additional motions regarding other claims will be filed.

Shaw Keller LLP and Quinn Emanuel Urquhart & Sullivan LLP represent Blix. Potter Anderson & Corroon LLP and Gibson, Dunn & Crutcher LLP represent Apple.

The case is Blix Inc. v. Apple Inc., D. Del., No. 1:19-cv-01869, 11/30/20.

To contact the reporter on this story: Maeve Allsup in San Francisco at mallsup@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Peggy Aulino at maulino@bloomberglaw.com

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