Capital One Seeking to Revive Intellectual Ventures Antitrust Case
The bank goes before the Federal Circuit on Monday, contending that IV's massing of thousands of financial services patents and threatening "endless litigation" is anti-competitive. A district judge ruled the acquisitions can't be separated from IV's assertion activities, which are constitutionally protected.
May 31, 2019 at 06:17 PM
3 minute read
Capital One's novel antitrust case against Intellectual Ventures was the buzz of the Silicon Valley patent bar a couple of years ago, but the bank's loss on summary judgment combined with IV's less aggressive acquisitions has cooled the chatter. However, Intellectual Ventures v. Capital One will be back on the front burner Monday when it lands for a hearing at the U.S. Court of Appeals for the Federal Circuit.
IV comes in with some momentum—a $43 million jury verdict against Ericsson and T-Mobile in March. Department of Justice antitrust chief Makan Delrahim had been scheduled to make an amicus appearance, but will yield to one of his colleagues.
The five-year-old case began with Intellectual Ventures suing a number of large financial institutions for patent infringement. Capital One counterclaimed, accusing IV of aggregating thousands of poor-quality patents that tread on financial services and then threatening “endless litigation” if its license demands—according to Capital One, an opening bid of $131 million for a five-year global license—weren't met. U.S. District Judge Paul Grimm of the District of Maryland ruled that while it's “hard to deny that there is something concerning from an antitrust perspective,” IV's suit was immunized from attack by the Noerr-Pennington doctrine.
Latham & Watkins partner Matthew Moore will argue for Capital One that IV's acquisition strategy alone, which he says leaves banks no options for designing around or licensing alternative technology from others, is anti-competitive and not protected by Noerr-Pennington.
Robert Freitas of Freitas & Weinberg argues that Capital One's case is “a fantasy”—that IV holds only a tiny fraction of the patents in the relevant class, and that in any event a would-be monopolist would have nothing to gain from amassing patents without any plan for asserting them. He also argues the number IV presented was not a licensing demand, and that other banks engaged in extended negotiations with IV while Capital One snubbed them.
The Justice Department filed an amicus brief agreeing with Capital One that Noerr-Pennington does not protect anti-competitive patent acquisitions from antitrust liability, without expressing further views about the case. Deputy Assistant Attorney General Michael Murray subbed in for Delrahim on Wednesday and will present the DOJ's amicus argument.
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