Federal Circuit Issues Favorable Decision in Line With AAI Amicus Brief

Ritz Camera & Image, LLC v. Sandisk Corp., No 12-1183 (Fed. Cir. Nov. 20, 2012). A panel of the Federal Circuit has held that direct purchasers have standing to bring Walker Process monopolization claims challenging a patent holder’s efforts to enforce a patent obtained by fraud. The court rejected an argument that would have limited antitrust standing for such claims to competitors of patent holders that have patent law standing to challenge the held patent’s validity or enforceability. Such a rule would have barred claims by the direct purchasers who pay the inflated prices that result from this type of forbidden monopolization. As the basis for its plaintiff-friendly holding, the court adopted several arguments very similar to those urged by AAI, including (1) an antitrust claim under Walker Process does not seek to “invalidate” a patent; (2) a Walker Process antitrust claim “is a separate cause of action from a patent declaratory judgment action” and “is governed by principles of antitrust law”; (3) the Federal Circuit in Hydril Co. v. Grant Prideco LP, 474 F.3d 1344 (Fed. Cir. 2007), “declined to apply limitations on patent invalidity suits to Walker Process antitrust actions”; and (4) the risk of vexatious lawsuits flowing from direct purchaser standing is mitigated by the demanding proof requirements associated with Walker Process claims. Slip op. at 9-10. Perhaps most importantly, the court quoted the same language that AAI quoted from Justice Harlan’s concurring opinion in Walker Process, which suggested that “antitrust remedies should be allowed room for full play” in cases involving improper patent monopolies. Slip op. at 6 (internal citation omitted). The court then held broadly that “[t]he ‘full play’ of antitrust remedies encompasses the standing requirements that apply in the antitrust setting, . . . including the recognition that direct purchasers are not only eligible to sue under the antitrust laws, but have been characterized as ‘preferred’ antitrust plaintiffs.” Id. (internal citations omitted). The AAI’s amicus brief  was written by AAI Advisory Board Member Doug Richards, with assistance from attorneys Michael Eisenkraft and David Kalow, Advisory Board Member Dan Gustafson, and AAI Director of Legal Advocacy Rick Brunell.