FTC, Justice Department file amicus brief in antitrust case

Michael P. Tremoglie May 30, 2012, 7:00am

WASHINGTON (Legal Newsline) - The Federal Trade Commission has approved the filing of a joint amicus brief with the U.S. Department of Justice in an antitrust case involving Ritz Camera.

The case, currently in the U.S. Court of Appeals for the Federal Circuit, concerns whether the appeals court should affirm a district court's holding that Ritz camera, a direct purchaser of the defendant's products, has standing under the antitrust laws to seek damages.

According to the FTC, the claim is "for overcharges resulting from a monopoly obtained through the enforcement of patents secured through fraud."

According to court documents, Ritz claims that SanDisk monopolized the market for NAND flash memory products in violation of the Sherman Act, enabling SanDisk to charge higher prices for NAND flash memory.

Ritz alleges that SanDisk's founder tortiously converted flash memory technology from his former employer and obtained the patents at issue by intentionally failing to disclose invalidating prior art and making affirmative misrepresentations to the PTO.

Ritz also alleges that SanDisk brought infringement actions based on these invalid patents "so as to exclude competition."

SanDisk asked for a dismissal of the monopolization claim for failure to state a claim. It argued that Ritz lacks antitrust standing and that the complaint fails to allege a relevant antitrust market.

The federal district court denied the motion to dismiss. The district court rejected SanDisk's contention that granting the claim by Ritz would result in "an avalanche of patent challenges."

The FTC and DOJ state the government has an interest in this case to the extent that they have a strong interest in the enforcement and litigation of antitrust laws. Their filing said, "This interest includes the proper interpretation of Section 4 of the Clayton Act, 15 U.S.C. § 15, which authorizes civil damages claims by 'any person who shall be injured in his business or property' by an antitrust violation. This brief addresses the circumstances in which Section 4 authorizes direct purchasers to recover overcharge damages resulting from a monopoly obtained and maintained through enforcement of a fraudulently procured patent."

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