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Android Makers Still Can't Escape NPE Boycott Suit

Alex Lawson | Law 360

A California federal judge on Tuesday refused to toss an antitrust suit accusing patent aggregator RPX Corp. and several Android device makers of conspiring to refuse patent licenses from Cascades Computer Innovation LLC, finding that Cascades had sufficiently bolstered its previously dismissed complaint.

U.S. District Judge Yvonne Gonzalez Rogers said that Cascades, a nonpracticing entity, had altered its suit to adequately claim that HTC Corp., Samsung Electronics Co. and Motorola Mobility Inc. conspired with RPX to boycott its attempts to license a patent aimed at optimizing the use of the Android operating system.

“The court concludes that Cascades' amended complaint, unlike its initial complaint, alleges specific facts raising a reasonable inference that the manufacturing defendants and RPX engaged in a so-called 'hub-and-spoke' conspiracy to force sub-competitive pricing for Cascades' patent licenses,” Judge Rogers wrote. “In light of the revised allegations, and the procedural posture of this case, the court denies both motions to dismiss.”

Judge Rogers rejected Cascades' initial complaint in January, finding that the company's antitrust and conspiracy complaints were not plausible, but allowed for an amended complaint to be filed with more detailed allegations.

Cascades responded by providing the court with more information about its patent licensing negotiation history with RPX and internal communications between the Android device makers, prompting dismissal motions from both sets of defendants.

RPX and the companies attempted, this time unsuccessfully, to convince the court that Cascades' complaint was still faulty. Among other arguments, it said that the reason it decided not to take a license on behalf of its corporate members was that Cascades had overpriced the licenses.

Judge Rogers said that the issues of whether Cascades priced its patents the way RPX described and whether that valuation was realistic were “questions for another day” and were not enough to warrant dismissal.

Raymond P. Niro, a partner at Niro Haller & Niro Ltd. who represents Cascades, welcomed the court's decision and said he looked forward to proceeding with the case.

“Our client is ecstatic that we are going to be able to conduct discovery from RPX and the others to prove our case of a conspiracy and a concerted refusal to deal,” Niro told Law360. “So we now have an opportunity to do that, and we are grateful that the court is giving us that opportunity under the law.”

The order from Judge Rogers also indicated that she was considering putting a stay on the case while a Cascades infringement suit against some of the same device makers proceeds in Illinois. She then asked the parties to brief her on why the stay should be put in place.

An attorney for RPX did not immediately respond to a request for comment Thursday.

RPX is represented by Latham & Watkins LLP. HTC is represented by Wilson Sonsini Goodrich & Rosati PC. Samsung is represented by Sheppard Mullin Richter & Hampton LLP. Motorola is represented by Kilpatrick Townsend & Stockton LLP.

Cascades is represented by Raymond P. Niro, Daniel R. Ferri, Gabriel I. Opatken and Ashley LaValley of Niro Haller & Niro Ltd., as well as Martin L. Fineman of Davis Wright Tremaine LLP.

The case is Cascades Computer Innovation LLC v. RPX Corp., et al., case number 4:12-cv-01143, in the U.S. District Court for the Northern District of California.