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Research in Motion Ltd. v. Motorola, Inc.

United States District Court for the Northern District of Texas, Dallas Division

December 11, 2008, Decided; December 11, 2008, Filed

CIVIL ACTION NO. 3:08-CV-0284-G; 3:08-CV-0317-G

Opinion

 [*790]  MEMORANDUM OPINION AND ORDER

Before the court are various motions of the defendant Motorola, Inc. ("Motorola" or "the defendant"). Motorola moves to dismiss all of the claims brought by the plaintiffs, Research in Motion Limited and Research in Motion Corporation  [**2] (collectively, "the plaintiffs" or "RIM"). Motorola also moves, in the alternative, to bifurcate and stay RIM's antitrust and contract claims. Finally, Motorola seeks to dismiss, stay, or transfer RIM's declaratory judgment actions. For the reasons discussed below, all of the motions are denied.

I. BACKGROUND

A. Factual Background

This is an action brought by RIM against Motorola for patent infringement, breach of contract, and violations of the antitrust laws. See generally Complaint. Both Motorola and RIM are in the business of developing and marketing mobile wireless communication devices. To work properly, these devices must connect to a network provided by a mobile wireless carrier. Complaint P 15. These carriers enable consumers to place and receive telephone calls, send and receive e-mails, and connect to the Internet through mobile wireless handsets. Id. New wireless technologies are constantly in development. But before they can be broadly commercialized, service providers and device manufacturers must agree on common technology specifications. In other words, standards must be set. Id. P 16.

Standards are important for several reasons. First, they facilitate the adoption and  [**3] advancement of technology as well as the development of products that can interoperate with one another. Id. P 20. Standards also lower costs by increasing product manufacturing volume, and they increase price competition by eliminating "switching costs" for consumers who desire to switch from products manufactured by one firm to those manufactured by another. Id. P 21. They also lead to earlier adoption of new technology. Id. There is, however, one downside to standards: they create "essential patents." See id. P 23. The term "essential patents" refers to patents that are essential to a standard -- i.e., patents that claim technologies selected by a standards development organization ("SDO"). Id. P 1. Once a patent becomes an essential patent, it gains undue significance as a result. Id. P 5. Companies that produce products governed by a standard become "locked in" to the technologies  [*791]  included in the standard. Id. P 23. Customers have no practical choice other than to buy products that comply with the standard. Thus, the owners of essential patents gain market power.

In order to reduce the likelihood that owners of essential patents will abuse their market power, SDOs have adopted  [**4] rules, policies, and procedures that control the disclosure and licensing of essential patents. Id. P 25. These rules, policies, and procedures are known as intellectual property rights policies ("IPR policies"). Id. IPR policies usually require owners of essential patents to commit to license those patents on fair, reasonable, and nondiscriminatory ("FRAND") terms. Id. PP 1, 27. These "FRAND commitments" are intended to prevent owners of essential patents from acquiring too much of the market power that would otherwise be inherent in owning an essential patent. Id. P 28.

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644 F. Supp. 2d 788 *; 2008 U.S. Dist. LEXIS 101241 **; 2009-2 Trade Cas. (CCH) P76,852

RESEARCH IN MOTION LIMITED, ET AL., Plaintiffs, VS. MOTOROLA, INC., Defendant. MOTOROLA, INC., Plaintiff, VS. RESEARCH IN MOTION LIMITED, ET AL., Defendants.

CORE TERMS

patents, antitrust, license, technology, monopoly, anticompetitive, Declaratory, negotiate, steel, manufactured, bifurcate, wireless, pled, infringement, electrical

Civil Procedure, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Antitrust & Trade Law, Monopolies & Monopolization, Actual Monopolization, Claims, Sherman Act, Business & Corporate Compliance, Defenses, Inequitable Conduct, Anticompetitive Conduct, Clayton Act, Remedies, Damages, Scope, General Overview, Regulated Practices, Regulated Industries, Communications