Yesterday, Judge Andrews in the District of Delaware issued an Order that denied InterDigital’s motion to dismiss Microsoft’s Complaint that alleged violation of antitrust laws based on InterDigital’s enforcement of patents alleged to be essential to 3G and 4G cellular ETSI standards and subject to commitments to license on fair, reasonable and non-discriminatory (“FRAND”) terms.  At this early procedural stage of the case, the issue was not whether Microsoft would prevail in the case or whether the allegations in the Complaint were true; rather, at this initial case stage Judge Andrews considered whether Microsoft had stated “plausible” claims against InterDigital upon which relief could be granted if what Microsoft alleged in the Complaint was true when viewing the Complaint in a light most favorable to Microsoft.  He decided that was the case and is allowing the case to proceed.

This ruling itself is not necessarily important as a precedential matter given the relatively low threshold for surviving a motion to dismiss and inability to challenge the factual assertions, but this will be an interesting case to follow as it matures because it is one of the few contemporary instances of a U.S. court considering the application of competition law to standard essential patents (“SEPs”) with sophisticated parties on both sides of the issue.


Following is a summary of the Complaint and briefing on the motion to dismiss, which can help put into context the relatively brief decision by the court.

Microsoft’s Complaint

In August 2015, Microsoft filed a Complaint against InterDigital in the District of Delaware federal court alleging that InterDigital’s “abusive licensing practices and unlawful monopolization in the relevant markets for third-generation (‘3G’) and fourth-generation (‘4G’) cellular technologies” violated Section 2 of the Sherman Act, including allegations that InterDigital made “false promises to make its technologies available” on FRAND terms.  Microsoft alleged that InterDigital’s “patents … have market power because they cover technology mandated by the standards.”  Microsoft alleged that InterDigital falsely promised to license its patents on FRAND terms “so that other members of the SSO [standing setting organization] would include InterDigital technologies in the standards”, and led the SSO to exclude alternative technologies in the standard.  Microsoft then listed nine ways it alleges that InterDigital has “exploited its unlawfully acquired power against Microsoft”:

  • refused to honor the obligation to license its patents on FRANd terms;
  • demanded excessive and discriminatory royalties from companies that sell 3G and 4G devices;
  • tied access to its U.S. patents to its foreign patents along with the requirement that licensees pay royalties on worldwide sales;
  • tied access to its SEPs to licensing of its admittedly non-essential patents;
  • transferred hundreds of SEPs to a controlled entity in order to “double dip” in its royalty demands;
  • misappropriated technical information submitted by other standards members so that it could obtain patents in its name and accordingly profit from technologies created by others;
  • discriminated in its pricing demands against Microsoft based on Microsoft’s smaller market share relative to Microsoft’s competitors;
  • tied access to its SEPs and any proposed license terms for them to prospective licensee’s agreement to enter mandatory non-disclosure terms while refusing to disclose license terms provided to Microsoft’s competitors in order to hide InterDigital’s discriminatory pricing; and
  • pursued baseless infringement actions and baseless demands for injunctive relief and exclusion orders designed to increase Microsoft’s costs and thereby coerce Microsoft to capitulate to InterDigital’s unreasonable, non-FRAND demands.

No Intent To Exclude. Microsoft alleges wrongdoing because InterDigital “spen[t] millions of dollars on litigation solely seeking exclusion of Microsoft products” even though InterDigital “concedes that it has no interest in actually excluding anything”; rather, Microsoft alleges that InterDigital was just looking for licensing negotiation leverage.

Relevant Market.  Microsoft alleges that InterDigital has “monopoly power” in the relevant markets and “is the sole supplier in those markets, has excluded all competition, and has the power to charge supra-competitive prices and is in fact doing so.”  Microsoft defines the relevant market, for purpose of its antitrust claim, to be “the markets for technologies covered by the InterDigital patents issued in the United States and elsewhere that are essential, or are alleged to be essential, to the 3G and 4G cellular standards … together with all other alternative technologies to the InterDigital patents that could have been used in the cellular standards.”  Microsoft alleges broadly that “Once ETSI adopts technology for a cellular standard, the owner of each essential patent used in that standard obtains monopoly power in a relevant technology market.”  Microsoft asserts that the relevant market “can … be identified from InterDigital’s licensing declarations to ETSI.”  Microsoft alleges that there were “companies with technology capable of performing the same or equivalent functions which could have been adopted by ETSI” or “could have been used in alternative cellular standards that were foreclosed” when ETSI adopted a standard with InterDigital’s technologies. Microsoft alleges that ETSI’s intellectual property rights (“IPR”) would have required it to cease work on the Standard “if InterDigital had been truthful about its unwilingness to license on FRAND terms and conditions” and that, “but for InterDigital’s deception, alternate technologies would have been adopted by ETSI or no particular technology would have been specified.”

Microsoft alleges that, by “manipulat[ing] the standards-setting process,” InterDigital “now purports to control more than 1000 of the more than 40,000 patents that have been declared to be essential to the 3G UMTS standard and more than 800 of the 60,000 patents that have been declared to be essential to the 4G LTE standard.”  Microsoft alleges this allowed InterDigital to exclude alternative technologies “and unlawfully acquire[] market power” as “the sole supplier in the Relevant Technology Markets,” creating “high or insurmountable barriers to entry” into those markets.

Licensing Demands.  Microsoft alleges that InterDigital seeks supra-competitive royalties based on “an arbitrary percentage of the overall price of the cellular devices” that sell for hundreds of dollars, rather than being based on “chip components that implement the Standards” that sell for “just a few dollars.”  Microsoft further alleges that InterDigital’s royalty demands have created a “royalty stacking” problem, particularly given “hundreds of other entities [that] own thousands of patents declared essential to the Standards.”  Microsoft alleges royalty-stacking was further compounded by InterDigital creating new licensing entities and assigning them some of the relevant SEPs, thus adding another SEP owner seeking royalties.  Microsoft further alleges abuse by InterDigital seeking to license together its SEPs and non-SEPs, both domestic and foreign, rather than licensing “the few purported SEPs that it has asserted in litigation.”  In that regard, Microsoft alleges that InterDigital turned-down multi-million dollar checks that were tendered as royalty payments for U.S. sales–but not foreign sales–based on the royalty rate InterDigital had been seeking for worldwide sales.  Microsoft also alleges abuse of monopoly power by having volume discounts that “unfairly discriminates against Microsoft and other newer, lower-volume entrants in the cellular device industry.”  Further, Microsoft alleges that InterDigital transferred “hundreds” of patents to another licensing entity without reducing the licensing demand for its patent portfolio that no longer included those transferred patents, even though InterDigital previously licensed Microsoft’s competitors without charging more when those patents were part of InterDigital’s portfolio.

Non-Disclosure Agreements in Licensing Negotiations.  Microsoft alleges that InterDigital abused its monopoly power by  requiring all prospective licensees to “keep secret InterDigital’s licensing proposals” and by “refus[ing] to disclose the terms on which it has made its SEPs available to the competitors of would-be licensees.”  Microsoft asserts that “[t]ransparency in licensing of SEPs would, in contrast, enable prospective licensees to assess more effectively InterDigital’s non-compliance with its FRAND commitments.”

Harm To Competition.  Microsoft alleges that InterDigital’s conduct has harmed competition in the relevant market a number of ways:

  • excluded alternative technologies in the ETSI standards
  • obscured costs of including patented technologies in the Standard
  • prevented Microsoft from obtaining access to necessary technology on reasonable and non-discriminatory terms
  • customers, such as Microsoft, faced higher costs than they would have in a competitive market
  • transfer of patents to another entity added to cost for accessing the cellular technologies
  • consumers harmed by higher prices, reduced innovation and more limited choice for standard-compliant products and complementary cellular technologies
  • litigation fees and costs for avoiding supra-competitive licensing terms
  • uncertainty as to risk of an exclusion order from U.S. International Trace Commission (“ITC”) proceedings, threatening to erode customer loyalty, brand recognition and customer goodwill, and increasing Microsoft’s sales costs

Relief Sought.  The relief sought by Microsoft includes:

  • Patents that were declared essential should be rendered unenforceable
  • any agreements involving those patents (presumeably prior licenses with anyone) should be voided
  • Treble damages
  • An injunction that (1) “mak[es] available” to Microsoft in a non-confidential license on court-determined FRAND terms, (2) discloses to Microsoft the terms that InterDigital has licensed or offered to license it SEPs ,(3) bars InterDigital from taking any steps to enforce any ITC exclusion orders against Microsoft on an SEP; and (4) requires InterDigital to “re-assign any declared SEPs that it has assigned to controlled entities” (presumeably re-assing back to InterDigital so they are back in the same portfolio).

InterDigital’s Motion To Dismiss

In October 2015, InterDigital filed a Motion to Dismiss and Strike Microsoft’s Complaint.  InterDigital discussed the history of negotiations at issue, which originally involved negotiations with Nokia starting in 2005 and continued after Microsoft’s acquisition of Nokia’s mobile phone business in 2014.  InterDigital states that Nokia (and then Microsoft) refused to enter a license, even after all administrative law judges in three separate ITC investigations “rejected Nokia’s and Microsoft’s assertions that InterDigital failed to comply with FRAND commitments” and “Microsoft was determined by [one] ALJ to be an unwilling licensee who refuses to take a license.” (see our July 30, 2013 post re 337-TA-800;  July 2, 2014 post re 337-TA-868 and May 12, 2015 post re 337-TA-613). InterDigital suggests that, given the timing of this Complaint around the same time an ITC decision was due, Microsoft filed the complaint “simply as a tactic to gain leverage in the event of an adverse ITC decision.”  InterDigital further noted that this same district court already had dismissed similar allegations by Microsoft in prior and still pending (but stayed) lawsuits between the parties.

No Alleged Market Power. InterDigital argues that Microsoft failed to allege the requisite market power in a relevant market as required for a violation of Section 2 of the Sherman Act.  Rather, Microsoft alleges market power based on “each essential patent” used in the standard, but “nowhere asserts that InterDigital has an essential patent.”  The closest Microsoft comes are InterDigital declarations to ANSI, but those declarations merely state that InterDigital has patents that “may be or become essential.”  Microsoft’s failure to plead this essential element requires dismissing the Complaint.

No Exclusionary Conduct. Further, InterDigital argues that Microsoft failed to allege the required exclusionary conduct.  Microsoft’s alleges exclusion of alternative technologies that ETSI could have adopted in the standard, but does not identify any such alternative technology.  This too requires dismissing the Complaint.

Fraud Not Pled With Particularity.  InterDigital also argues that Microsoft failed to plead the alleged fraudulent acts underlying the antitrust claim with the particularity required to plead fraud.   For example, Microsoft alleged no facts to support its conclusory allegation that InterDigital “had a fraudulent intent because it knew at the time it made ETSI declarations that it had no intention of licensing on FRAND terms.”  Such conclusory allegations do not sufficiently plead fraud.

Noerr-Pennington Immunity.  InterDigital argued that the Noerr-Pennington Doctrine provides immunity from the alleged antitrust claim based on actions take to enforce patents.   This stems from the U.S. Constitution First Amendment right to petition the government for redress of grievances, such as filing lawsuits in the courts.  This First Amendment rights extends not only to the lawsuit itself, but activity “reasonably and normally attendant upon effective litigation” such as threats of litigation, pre-suit demand letters and settlement offers.  But Microsoft’s allegations are premised on litigations and threats of litigation, which are afforded Noerr-Pennington immunity.  There are only narrow exceptions to this immunity, such as “sham litigation”, which must be pled with particularity.  But Microsoft has not done so here.

For example, Microsoft pled no allegation that the 613 ITC investigation was objectively baseless when it was filed in 2007, and a mere ultimate lack of success on the merits is not grounds to find the litigation “objectively baseless.”  Further, Microsoft’s assertion that baseless lawsuits could coerce “capitulation to … abusive licensing demands” is “not plausible” because “there is no reason for a defendant to agree to an unfavorable settlement of a baseless lawsuit in which it is certain to prevail”–e.g., Microsoft did not explain how it, being a multi-billion dollar company, could be coerced by the “comparatively minor expenses of lawsuits” and Microsoft did not allege that it actually was coerced into taking a license (it took no license).  The risk of “patent holdup” could not exist for “sham litigation”, but “could only arise where the patent owner can assert at least a colorable, non-baseless patent lawsuit” and such non-baseless lawsuits have Noerr-Pennington immunity.

Further, InterDigital argues that Microsoft has not sufficiently alleged a Walker Process antitrust claim exempt from Noerr-Pennington immunity based on fraudulent procurement of a patent.  Microsoft alleged that InterDigital engineers participating in the SSO process sought and obtained a patent based on inventions actually made and disclosed by others during the SSO process.  But Microsoft did not plead that with specificity, only conclusory allegations.  Further, if Microsoft could show that its allegations were true, then no exclusion order or injunction could be obtained on the patent and there would be no “hold up”.  Further, Microsoft has not pled the other elements required for an antitrust violation based on the alleged fraudulently obtained patent.

InterDigital argued that First Amendment protection under Noerr-Pennington is particularly important here to protect the patent owner’s right to exclude that is fundamental to the patent right.  That right is enforced by “Courts serv[ing] a gatekeeping function that ensures that no purported ‘patent hold-up’ can occur … because any defenses to exclusionary relief based on FRAND obligations will be considered and adjudicated” before the court would grant any exclusionary relief.

No Alleged Causal Injury-In-Fact.  InterDigital argued that “Microsoft fails to allege an injury that it suffered caused by InterDigital’s alleged anticompetitive actions.”  Microsoft did not allege that it actually ever paid any alleged unreasonably high or discriminatory royalties.  Quit the opposite, because Microsoft has continued to sell 3G/4G devices without paying royalties while Microsoft’s competitors paid royalties.  The closest Microsoft gets to alleging actual harm is its litigation costs, but a complaint on such harm is barred by the Noerr-Pennington doctrine.

Strike Prayers for Relief.  InterDigital argues that Microsoft’s far-reaching request for relief should be stricken.  Microsoft has no standing to have thousands of patents declared unenforceable or have third-party contracts voided.  Microsoft also has not alleged sufficient facts to show a concrete dispute that all the SEPs are unenforceable or all contracts should be voided.  Further, Microsoft should not be allowed to rifle through confidential licensing agreements with Microsoft’s competitors–Microsoft itself has asserted that its licensing agreements are “highly sensitive and cannot be disclosed to competitors.”  Further, InterDigital argues that the statute of limitations precludes relief for any injury arising more than 4 years before the Complaint was filed.

Microsoft’s Opposition

In December, Microsoft filed its Opposition to the motion to dismiss, arguing that its allegations are similar to controlling Third Circuit precedent (where the Delaware court resides) in Broadcom v. Qualcomm, 501 F.3d 297 (3d Cir. 2007).

Monopoly Power.  Microsoft argues that it has sufficiently pled market power.    Microsoft’s claim is based upon a false FRAND commitment that does not require “alleging the essentiality of specific patents.”  Further, the Complaint does allege that the standards “include technologies over which [InterDigital] claims to have patents.”  In the Broadcom case, the Third Circuit did not require that the “patents were essential”, but only that the defendant patent owner “claimed them to be.”

Exclusionary Conduct.  Microsoft alleged exclusionary conduct and did not need to identify specific alternative technologies that were excluded from the standard based on InterDigital’s conduct.  Rather, the Third Circuit in Broadcom found adequate an allegation that, but for the false FRAND commitment, ETSI would not have selected the patented technology “even if that technology was the only candidate.”  Microsoft specifically alleges that, absent the anticompetitive conduct, ETSI would have adopted a different standard “or no standard at all.”

Sufficient Pleading of Fraud.  Microsoft argues that it meets the specificity requirement for pleading fraud by pleading “date, place or time”, which is what it did in identifying the patents subject to the FRAND commitment, to whom the commitment was made and when the commitments were made.  Further, it was sufficient for Microsoft to allege generally, rather than with specific facts, that InterDigital knew its FRAND commitment was false at the time the commitment was made.

Noerr-Pennington Not Applicable.  Microsoft argues that its complaint did not rely solely on litigation conduct.  Rather, it relied on false statements that led to InterDigital’s patented technology being adopted into the standard and then abusing the monopoly power so obtained by seeking high royalties, tying U.S. patents to foreign patents and non-SEPs.  InterDigital’s litigation conduct–even if  in good faith– could then be considered as part of the overall anticompetitive scheme.

Further, Microsoft argues its allegations are that the”FRAND commitments were intended to guarantee that [InterDigital] would not attempt to prevent implementers from using its patented technology by seeking injunctions, but would instead proffer licenses on FRAND terms, which [InterDigital] has not done.”  Microsoft argues that this is consistent with judicial and regulatory statements that FRAND commitments “foreclose the pursuit of injunctive relief except in circumstances where an implementer is unwilling or unable to take a license on FRAND terms.”    Microsoft had tendered royalty payments for InterDigital’s “U.S. sales”, but InterDigital declined.

Microsoft also argues that InterDigital’s litigations fell under the “sham exception” to Noer-Pennington.   Under Third Circuit law, a more flexible standard is used “when dealing with a pattern of petitioning,” where the issue is not if any one action has merit, but whether the litigations were brought under “a policy of starting legal proceedings without regard to the merits and for the purpose of injuring a market rival.”  Here, Microsoft alleges bad faith is shown by InterDigital filing ITC actions that can only aware exclusionary relief even though InterDigital has said that the goal was not to get exclusionary relief; rather, Microsoft alleges the goal was to get leverage to get high royalty rates from Microsoft continuing to practice the invention (not excluding Microsoft from practicing the invention).  Further questions about the litigation arise because Microsoft prevailed in the ITC cases, the ALJ statements were dicta not binding on the court and were rendered moot by subsequent full ITC Commission review.

Microsoft Alleged Injury.  Microsoft argues that it need not have actually “capitulated” to non-FRAND demands, but it was sufficient that such harm was “threatened”.  Microsoft also argues injury-in-fact because it “has been denied the ability to obtain a license to [InterDigital’s] SEPs on FRAND terms, which negatively affects its competitive position” and Microsoft has borne litigation expenses.  Further, the statute of limitations do not apply because the alleged misconduct falls under the continuing violation doctrine.

Prayers for Relief.  Microsoft argues its pled prayer for relief is sufficient, particularly at this early stage.

InterDigital’s Reply

No Alleged Market Power.  InterDigital replied that Microsoft’s allegations are missing what was required in the Third Circuit Broadcom case on which Microsoft relies.  That case required an allegation that “the defendant possesses standards-essential patents that the SSO included in the standard in reliance on a FRAND commitment.” [emphasis in original].  Thus, “[p]atents that were not included in a standard cannot, of course, even theoretically have market power based on standardization.”  Rather than alleging that such patents actually exist, Microsoft alleges the different, insufficient point that InterDigital “claims to have patents” covering the standard.  Further, the InterDigital declarations on which Microsoft relies only show that InterDigital believed it had patents that “may be” or “may become” essential, not that they were essential  In the Broadcom case, the plaintiff did specifically allege that the patent owner “induc[ed] the relevant SDOs to adopt 3G standards that incorporate [the patent owner’s] patents as an essential element.”  This missing link in this case–i.e., not alleged to actually be essential to the standard–is fatal to Microsoft’s claims.

No Alleged Exclusionary Conduct.  InterDigital argued that Microsoft wrongly asserts that there need not be alternative technology that the SSO would have adopt into the standard absent the misrepresentation.  Microsoft’s allegation that ETSI rules require it to “cease” standard development if no FRAND commitment is made omits the rest of the rule, which outlines a discretionary procedure that permits the SSO to adopt patented technology without a FRAND commitment when there is no alternative.

Insufficient Fraud Pleading.  InterDigital argues that Motorola did not sufficiently plead fraud, because it did not identify which patents were subject to false declarations.  This is particularly troublesome given the important condition precedent that the FRAND commitment is made only “to the extent the IPRs disclosed … are or become, and remain ESSENTIAL.”  Patents not included in the standard and, hence, not essential, are not subject to the FRAND commitment.

Noerr-Pennington Immunity Applies.  InterDigital argues that Microsoft’s allegations that are not directly premised on litigation are at least premised on litigation enforcement related activity, such as its licensing demands.  This litigating-related activity is protected by Noerr-Pennington.  Further, “if the alleged ‘false FRAND promise’ … was part of a scheme to allow … enforc[ment] of patents” at non-FRAND rates, than it is not “separate and distinct” from the patent enforcement conduct.

InterDigital argues that the FRAND commitment did not preclude seeking injunctive relief–indeed, the commitments “do not mention injunctions, much less express any intention whatsoever to forego the right to sue for injunctive relief.”  Further, Federal Circuit law, not Third Circuit law, should apply to the issue whether enforcing a patent can strip a patent owner of Noerr-Pennington immunity, and Microsoft’s pleadings do not meet the stricter standard that the Federal Circuit has indicated it would apply.

No Injury-In-Fact.  InterDigital argued that Microsoft has not shown how any supposed “threat” of harm that plausibly could have been realized.  Nokia/Microsoft refused to pay royalties for nearly a decade and Microsoft has not alleged that it has changed its products to avoid InterDigital’s patents.

Judge Andrew’s’ Decision

Judge Andrews generally observed that “it is difficult to discern any material differences between Microsoft’s complaint and the complaint which the Third Circuit found sufficient in Broadcom.”  He then walked through the analysis.

Monopoly Power.  Judge Andrews concluded, without explanation, that the Complaint’s allegations “are sufficient to show monopoly power” after citing the following allegations:

The complaint defines the relevant markets as “the markets for technologies covered by the InterDigital patents … that are essential, or alleged to be essential, to the 3G and 4G cellular standards …, together with all other alternative technologies to the InterDigital patents that could have been use in the cellular standards.”  This “technology was not interchangeable with or substitutable for other technologies and adherents to the [relevant] standard have become locked in.”  [InterDigital] “had the power to extract supracompetitive prices, it possessed a dominant market share, and the market had entry barriers.” [internal citations omitted]

Anticompetitive Conduct.  Judge Andrews next addressed anticompetitive conduct, finding that was sufficiently pled after citing allegations from the Complaint without further explanation:

The complaint alleges that [InterDigital] made an “intentional false promise that [it] would license its … technology on FRAND terms, on which promise [ETSI] relied in choosing the … technology for inclusion in the” relevant standards.  This conduct “induced” ETSI to adopt a technology “that they would not have considered absent a FRAND commitment.”  Following the incorporation of its technology, the complaint alleges, [InterDigital] refused to comply with its FRAND licensing obligations.

Injury.  Judge Andrews stated that “Microsoft must plead more than injury to itself”, but “must show that [InterDigital’s] conduct harms competition.”  He found this issue “entwined” with the Noerr-Pennington issues.  He found that Microsoft’s alleged injury went beyond just InterDigital seeking to enforce its patents and the attorneys fees /litigation costs attendant with that.  Rather, Microsoft’s alleged harm further includes other harm:

[Allegations that InterDigital’s] wrongful conduct “prevented Microsoft from obtaining access to necessary technology” in the relevant markets; that “there is a substantial threat that Microsoft will be forced to capitulate to InterDigital’s supra-competitive licensing demands;” that “the artificial imposition of higher costs on Microsoft threatens further loss of market share, as does the threat of an exclusion order;” that the “downstream market” is injured in the form of “higher prices, reduced innovation, and more limited choice[s] … for such Standard-compliant products;” that “an exclusion order creates uncertainty as to Microsoft’s line of cellular devices,” which “threaten[s] to erode customer loyalty, brand recognition, and customer goodwill;” and that Microsoft “is threatened with additional harm in the form of the loss of customers and potential customers, the loss of product image and goodwill, and other irreparable harm to its line of cellular devices.”

Judge Andrews found this allegation sufficient to allege harm.    In doing so, he quotes favorably from a treatise that states “if the antitrust violation is intentional deception of the standard-setting organization, the fact that one of the ways that causes harm is that the patentee sues adopters and seeks an injunction shouldn’t defeat the antitrust claim based on conduct before the standard-setting organization.” (quoting Herbert Hovenkamp et al., IP and Antitrust § 35.5b2 (2d ed. Supp. 2013)).

Judge Andrews then considered whether the litigation-related conduct could be considered.  He noted that courts have reached different conclusions on whether litigation may be included as part of a scheme to violate antitrust law.  He ruled that Federal Circuit law, not regional circuit law, applies to this issue.  But the Federal Circuit has not decided the issue.  Another district court had ruled that the Federal Circuit “would choose a middle ground ‘causal connection’ test.” (quoting Hynix Semiconductor v. Rambus, 527 F. Supp. 2d, 1084, 1095-97 (N.D. Cal. 2007)).  That standard is as follows:

“[B]efore otherwise protected litigation can be part of an ‘anticompetitive scheme’ claim, the court must first find that the other aspects of the scheme independently produce anticompetitive harms,” and upon so concluding, “the court should ask whether the accused patent litigation was causally connected to these anticompetitive harms.”

Having already found that the other conduct states an antitrust claim, Judge Andrews concluded there was a causal connection to the litigation-related conduct where the litigation “to enforce [InterDigital’s] purported SEPs are part of the way in which [InterDigital] accomplishes its alleged anticompetitive scheme,” stating that “[t]he entire scheme ‘is ineffective without the threat of litigation.'”

Fraud Pleading Standard.  Judge Andrews ruled that Microsoft’s allegations must meet the fraud pleading standard that requires specificity.  But he found the allegations were sufficient because InterDigital’s declarations to ETSI attached to the Complaint showed the “date, place or time” of the fraud by identifying “when the false FRAND declarations were made, by whom and for which patents.”

Prayer for Relief.  Judge Andrews found that the statute of limitations did not bar relief for conduct prior to four years ago, because “the complaint alleges misrepresentations that occurred [after the four-year period], and that [InterDigital] is engaged in an ongoing scheme that has resulted in continuing injury.”  He also declined to exercise his discretion to strike the various other requests for relief because that’s “an extreme measure”, there was “no value” in granting the motion now and striking the claims now would be “premature.”

Based on the foregoing, Judge Andrews denied InterDigital’s motion to dismiss, which allows the case to continue proceeding at this early stage.