Intellectual Ventures I LLC et al v. Capital One Financial Corporation et al
Filing
432
Memorandum Opinion and Order denying as moot 225 Motion to Strike; granting 362 Motion to Dismiss without prejudice; denying 296 Motion to Dismiss; granting 398 Motion to Seal; granting the original IV companies up to and including February 18, 2016 to file an amended answer; directing parties to submit any joint proposed modifications to the scheduling order by February 4, 2016. Signed by Judge Paul W. Grimm on 1/14/2016. (bus, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Southern Division
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INTELLECTUAL VENTURES I LLC,
et al.,
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Plaintiffs/Counter-Defendants,
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v.
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CAPITAL ONE FINANCIAL CORP.,
et al.,
Case No.: PWG-14-111
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Defendants/Counterclaimants/
Third Party Plaintiffs,
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v.
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INTELLECTUAL VENTURES
MANAGEMENT, LLC, et al.,
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Third Party Defendants.
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MEMORANDUM OPINION AND ORDER
Counterclaimants Capital One Financial Corp., Capital One Bank (USA), N.A., and
Capital One, N.A. (collectively, “Capital One companies”) lodged three antitrust counterclaims
in this patent litigation, alleging that Plaintiffs/Counter-Defendants Intellectual Ventures I LLC
and Intellectual Ventures II LLC (together, “original IV companies”), along with Intellectual
Ventures Management, LLC, Invention Investment Fund I, L.P., and Invention Investment Fund
II, LLC (collectively, “new IV companies”) have amassed monopoly power in violation of
Section 2 of the Sherman Act, 15 U.S.C. § 2, and Section 7 of the Clayton Act, 15 U.S.C. § 18.
ECF No. 107 (Third Amended Counterclaim); see ECF No. 196 (public redacted version). They
also filed a Third-Party Complaint against the new IV companies (referred to, collectively with
the original IV companies, as “Intellectual Ventures companies”). ECF No. 228. The ThirdParty Complaint includes the same three antitrust claims that the Capital One companies
presented as counterclaims, with small but, as discussed below, significant additions. Id.
The original IV companies filed a Motion to Dismiss the counterclaims, and I denied the
motion. July 1, 2015 Mem. Op. & Order, ECF No. 328. In doing so, I noted that, while largely
reiterating their opposition to the Capital One companies’ earlier motion to amend to add the
antitrust counterclaims, the original IV companies raised one new argument in their motion to
dismiss. Insisting that they “are separate legal entities,” and that the Capital One companies’
allegations of agency and alter ego are “conclusory,” insufficient, and should be stricken, the
original IV companies contended that the Capital One companies could not “establish the
existence of a single 3,500 patent portfolio,” that is, a monopoly, for purposes of stating an
antitrust claim. Counter-Defs.’ Mem. 9–10. The Capital One companies responded that the
original IV companies’ new argument “makes no sense” because “‘IV use[s] its 2,000 shell
companies to fraudulently conceal its acquisition and ownership of the vast majority of patents in
its financial-services portfolio.” Countercls.’ Opp’n 5 (quoting Third Am. Countercl. ¶ 216), but
they failed to explain the basis for their reference to the original IV companies as one entity.
I ordered the Capital One companies to brief the issue of whether the original IV
companies “are separate companies with separate portfolios” and permitted the original IV
companies to file a reply, and the motion to strike incorporated in the original IV companies’
motion to dismiss remained pending. July 1, 2015 Mem. Op. & Order 3–4. It is now ripe for
resolution. See ECF Nos. 225 (Counter-Defs.’ Mot.), 340 (Countercls.’ Br.), 362 (CounterDefs.’ Br.), 394 (Counter-Defs.’ Supp.), 397 (Countercls.’ Supp.). Additionally, in their brief,
the original IV companies renewed their request that the Court “dismiss the Sherman Act and
2
Clayton Act allegations because the counterclaims contain no allegations sufficient to treat the
Plaintiffs’ separate patent portfolios as a single portfolio that might constitute a monopoly.”
Counter-Defs.’ Br. 6. The new IV companies also have moved to dismiss the Capital One
companies’ Third Party Complaint, ECF No. 296, and that motion also has been briefed fully,
ECF Nos. 296-1, 305 & 316.1
The new IV companies argue for dismissal on three grounds.2 First, they, like the
original IV companies, argue that the agency and alter ego allegations are not sufficient to
establish a single entity with a single portfolio, insisting that the “few new conclusions” that the
Third Party Complaint adds to the allegations in the Counterclaims do not cure this deficiency.
Third Party Defs.’ Mem. 7. Second, they assert issue preclusion, based on the finality of the
judgment in Intellectual Ventures I LLC v. Capital One Financial Corp. (“Intellectual Ventures
I”), No. 13-00740 AJT, 2013 WL 6682981 (E.D. Va. Dec. 18, 2013), “as a result of Capital
One’s abandonment of its appeal.” Id. at 1. Third, they argue that claim preclusion bars the
Clayton Act claim. Id. at 17. Because the Capital One companies sufficiently alleged that the
Intellectual Ventures companies are one entity for antitrust litigation purposes, and neither claim
nor issue preclusion bars the Third Party Complaint, I will deny the new IV companies’ motion.
Yet, because the allegations that the Intellectual Ventures companies are one entity do not appear
1
A hearing is not necessary with regard to either motion. See Loc. R. 105.6. The Capital One
companies also filed a Motion to Seal, ECF No. 398, requesting that their Supplement, which
contains confidential business information, be sealed. Given that the original IV companies do
not oppose the motion to seal; the opposition contains confidential business information; and the
Capital One companies filed a redacted version for the public, ECF No. 396, the Motion to Seal
IS GRANTED. Although the Supplement is sealed, I have determined, after reviewing this
Memorandum Opinion, that none of its contents warrants sealing this Memorandum Opinion.
2
They also “join the Plaintiffs’ Motion to Dismiss Amended Antitrust Counterclaims 12, 13, and
14,” ECF No. 225. Third Party Defs.’ Mem. 19–20. As noted, I denied that motion. July 1,
2015 Mem. Op. & Order. Consequently, the new IV companies’ Motion is denied insofar as it
incorporates the original IV companies’ Motion to Dismiss.
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in the Counterclaims, the antitrust counterclaims against the original IV companies will be
dismissed without prejudice to re-pleading to include allegations (such as those appearing in the
Third Party Complaint) that the Intellectual Ventures companies are the same entity.
Standard of Review
Dismissal is appropriate where a complaint “fails to state a claim upon which relief can
be granted.” Velencia v. Drezhlo, No. RDB-12-237, 2012 WL 6562764, at *4 (D. Md. Dec. 13,
2012) (citing Fed. R. Civ. P. 12(b)(6)). This means that a complaint must contain “a short and
plain statement of the claim showing that the pleader is entitled to relief,” Fed. R. Civ. P. 8(a)(2),
and must state “a plausible claim for relief,” as “[t]hreadbare recitals of the elements of a cause
of action, supported by mere conclusory statements, do not suffice,” Ashcroft v. Iqbal, 556 U.S.
662, 678–79 (2009); see Velencia, 2012 WL 6562764, at *4. “A claim has facial plausibility
when the plaintiff pleads factual content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678.
Issue Preclusion
The new IV companies argue that “Capital One cannot plead a violation of Section 2 of
the Sherman Act or Section 7 of the Clayton Act because the relevant market on which its
antitrust claims depend has been rejected as a cognizable antitrust market” by the Eastern District
of Virginia in Intellectual Ventures I, 2013 WL 6682981, at *5. Third Party Defs.’ Mem. 12.
There, the court concluded that “Capital One’s proposed market is not a ‘relevant market’ under
any recognized antitrust jurisprudence.” Id. Acknowledging that this Court already “decided
that res judicata (claim preclusion) was not a bar to the antitrust counterclaims,” the new IV
companies insist that issue preclusion is. Id. at 11–12 (emphasis added).
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Collateral estoppel, or issue preclusion, bars relitigation of an issue or fact if
(1) the issue or fact is identical to the one previously litigated; (2) the issue or fact
was actually resolved in the prior proceeding; (3) the issue or fact was critical and
necessary to the judgment in the prior proceeding; (4) the judgment in the prior
proceeding is final and valid; and (5) the party to be foreclosed by the prior
resolution of the issue or fact had a full and fair opportunity to litigate the issue or
fact in the prior proceeding.
In re Microsoft Corp. Antitrust Litig., 355 F.3d 322, 326 (4th Cir. 2004) (emphasis added).
It is true that I considered claim preclusion, not issue preclusion, in my March 2, 2015
Memorandum Opinion, before the new IV companies were parties to this action. There, I
concluded that the Eastern District of Virginia’s conclusion regarding Capital One’s proposed
market did not preclude the Capital One companies’ Counterclaims. See Intellectual Ventures I
LLC v. Capital One Finance Corp., 99 F. Supp. 3d 610, 616–20 (D. Md. 2015).
I also
considered whether the Capital One companies sufficiently pled a relevant product market. Id. at
620–24. My observations in that regard are pertinent, as the allegations of relevant market are
the same in the Third Amended Counterclaim and the Third Party Complaint. Compare Third
Am. Countercl. ¶ 156 with Third Party Compl. ¶ 49.
In this case, the Capital One companies claim that the 3,500 patents in the Intellectual
Ventures companies’ financial services portfolio constitute the relevant market. Intellectual
Ventures I, 99 F. Supp. 3d at 621. Before the Virginia court, the Capital One companies claimed
that “the relevant market [was] the ‘market for technology enabling business processes common
throughout the commercial banking industry in the United States, where the relevant geographic
market is nationwide.’” Intellectual Ventures I, 2013 WL 6682981, at *5 (citation to E.D. Va.
record omitted). The court restated the relevant market as the Intellectual Ventures companies’
“‘portfolio of 3,500 or more patents,’” id., the same market alleged here.
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Nonetheless, as I observed last March, the factual allegations before me are not the same
as those presented in Virginia:
The [Virginia] court noted that in the cases that the Capital One companies
cited, “the relevant market was defined in terms of what was a business necessity
for the complaining businesses’ lawful operation.” [Intellectual Ventures I, 2013
WL 6682981, at *5.] The Virginia court opined that, in the case before it, “[t]he
only ‘business necessity’ alleged [was], in essence, the business need to avoid
future litigation,” and that “the actual technologies included within the proposed
market ... appear[ed] nearly irrelevant, since it is not the substantive, commercial
usefulness or the merits of the technology that defines the market; but simply the
patents in that market used to threaten Capital One, which consist entirely of IV’s
patent portfolio.” Id.
Yet, unlike in the earlier suit, Counterclaimants now allege:
IV's financial-services portfolio in the United States constitutes a
relevant licensing market because IV demands that banks license
this portfolio to continue their commercial-banking services (and
their redesigned alternatives), threatening and suing those banks
that resist. Because IV sought and obtained such a large portfolio,
banks do not have the option to license alternative portfolios,
because such an alternative license would not eliminate IV's threat
of ceaseless litigation. That is, there are no substitutes for a license
to IV's portfolio, because IV removed the original patentees from
the market and banks consequently cannot be free from IV's
licensing demands and lawsuits, no matter how they implement the
targeted features, products, and services, regardless of how great a
price IV may charge, and irrespective of any other patentees from
which banks might buy licenses. Capital One cannot avoid or
negate IV's infringement claims by licensing patents or
technologies from alternative sources. In short, IV has eliminated
banks' access to substitutes for IV's license, both in the form of
other patent licenses and banking-product designs, through a
carefully orchestrated campaign of patent aggregation,
concealment, and sham litigation.
Third Am. Countercl. ¶ 156 [see also Third Party Compl. ¶ 49 (same)]. On the
factual allegations that Counterclaimants now make, their business necessity is
not only to avoid litigation but also to continue to provide the online services they
already offer without paying the cost-prohibitive licensing fees to the Intellectual
Ventures companies—the only source of such licenses—, and, at this prediscovery stage in the litigation, Counterclaimants adequately have alleged a
plausible relevant market.
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Intellectual Ventures I, 99 F. Supp. 3d at 622–23. Thus, the facts pled pertaining to the relevant
market are not “identical to the one previously litigated,” and whether the Capital One
companies sufficiently pled a relevant market on the augmented facts present in the pending
counterclaims was not “actually resolved in the prior proceeding.” See In re Microsoft Corp.
Antitrust Litig., 355 F.3d at 326. Therefore, collateral estoppel does not bar litigation of whether
the Capital One companies sufficiently pled a relevant market.3 See id.
Claim Preclusion
The new IV companies alternatively argue that claim preclusion, or res judicata, bars the
Clayton Act claim. Id. at 17. Res judicata “‘prevents litigation of all grounds for, or defenses to,
recovery that were previously available to the parties, regardless of whether they were asserted
or determined in the prior proceeding.’” Meekins v. United Transp. Union, 946 F.2d 1054, 1057
(4th Cir. 1991) (quoting Peugeot Motors of Am., Inc. v. E. Auto Distribs., Inc., 892 F.2d 355, 359
(4th Cir. 1989) (quoting Brown v. Felsen, 442 U.S. 127, 131 (1979) (internal quotation marks
deleted)) (emphasis added)). I already ruled in my March 2, 2015 Memorandum Opinion, with
regard to the equivalent claims in the Third Amended Counterclaim, that res judicata does not
bar the Capital One companies’ Clayton Act claim and that they stated a claim under the Section
7 of Clayton Act. Intellectual Ventures I, 99 F. Supp. 3d at 620, 630. Specifically, I noted that
the Capital One companies identified new facts that were not previously available to them. See
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“Capital One’s abandonment of its appeal” of the Eastern District of Virginia’s ruling, which
included the court’s conclusion that “Capital One’s proposed market is not a ‘relevant market’
under any recognized antitrust jurisprudence,” Third Party Defs.’ Mem. 1, 12, does not affect
this outcome, as even assuming finality, the facts are not identical. See In re Microsoft Corp.
Antitrust Litig., 355 F.3d at 326. Indeed, the pending appeal did not lessen the finality of the
Eastern District of Virginia ruling. See Guinness PLC v. Ward, 955 F.2d 875, 898 (4th Cir.
1992) (“[T]he existence of a pending appeal does not render a judgment unenforceable nor
suspend its preclusive effects absent a party obtaining a stay from either the rendering or
enforcing court.”).
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id. at 618 (“‘Capital One’s proposed antitrust counterclaims derive from new conduct, including
… acquiring more patents secretly through shell companies.’” (quoting Counterclaimants’ Mem.
14)).
Undeterred, the new IV companies observe that I concluded that the Capital One
companies stated a claim “‘at least insofar as they base their allegation on patent acquisitions
other than Plaintiffs’ initial financial-services patent acquisitions.’”
Id. at 17–18 (quoting
Intellectual Ventures I, 99 F. Supp. 3d at 630). On this basis, the new IV companies insist that
res judicata is, indeed, a bar because “Capital One does not allege a single patent acquisition
after the filing of its counterclaims in the Eastern District of Virginia and merely identifies
Plaintiffs’ prior financial-services patent acquisitions,” id. at 18 (citing Third Party Compl.
¶ 108), such that “[t]here are no ‘new’ or ‘far more robust factual allegations’ of patent
acquisition by either Plaintiffs that occurred after . . . Capital One filed its antitrust counterclaims
in the Eastern District of Virginia,” id.
Yet, as the new IV companies noted, the Third Party Complaint alleges patent
acquisitions as late as 2012, which certainly is later than “Plaintiffs’ initial financial-services
patent acquisitions,” even if it predates the October 2013 counterclaims in Virginia. In any
event, my discussion of the required allegations of later patent acquisitions pertained to stating a
claim, not res judicata. See Intellectual Ventures I, 99 F. Supp. 3d at 630 (citing United States v.
E. I. du Pont de Nemours & Co., 353 U.S. 586, 597 (1957)). Moreover, as the new IV
companies acknowledge, “Capital One alleges that ‘IV began revealing its ownership of such
patents incrementally in 2013 and 2014,” starting around the summer of 2013.” Id. at 19 (citing
Third Am. Compl. ¶ 109). This is the pivotal fact for res judicata purposes, a fact that extends
beyond the October 2013 date of the Virginia counterclaims. With this allegation, it is plausible
that the Capital One companies learned information not previously available, namely, the full
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extent of the Intellectual Ventures companies’ patent ownership, after they filed their
counterclaims in the Virginia suit in October 2013. See Third Am. Compl. ¶ 109. Their lateracquired knowledge could be the facts necessary to push the quantity of the Intellectual Ventures
companies’ patents over the line to a Section 7 violation. See Intellectual Ventures I, 99 F. Supp.
3d at 630 (“[I]t may be that Plaintiffs’ first 10, or 100, or 1,000 patent acquisitions did not violate
§ 7. But, at some point, the acquisitions, as alleged, created a monopoly and crossed the line to
actionable under § 7.”); E. I. du Pont de Nemours & Co., 353 U.S. at 597 (stating that the
Clayton Act “seeks to prohibit and make unlawful certain trade practices … and thus, by making
these practices illegal, to arrest the creation of monopolies” at “any time when the acquisition
threatens to ripen into a prohibited effect”).
Certainly, it is curious that the Capital One companies alleged a 3,500-patent portfolio in
the Virginia litigation, see E.D. Va. Countercl. ¶ 89, ECF No. 296-2, and a 3,500-patent portfolio
in their Third Party Complaint at ¶ 108. Consequently, it does not appear that the Capital One
companies included their later-acquired factual knowledge in their pleading in this case. Yet, the
details regarding the facts that the Capital One companies have alleged (if the alleged facts
themselves are otherwise sufficient to state a plausible claim) are better left to discovery than to a
motion to dismiss, where the question of factual sufficiency must be examined in light of the
requirements of notice pleading. If discovery reveals flaws in the Capital One companies’
antitrust theory, summary judgment will allow them to be explored. See Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 556 (2007) (holding that “stating … a claim requires a complaint with
enough factual matter (taken as true) to suggest that [the elements of the cause of action exist]”;
noting that there is no “probability requirement at the pleading stage,” as the notice pleading
requirements “simply call[] for enough fact to raise a reasonable expectation that discovery will
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reveal evidence of [the elements]”). Thus, the earlier counterclaim is not a bar to the Clayton
Act claim in the Third Party Complaint. See Meekins, 946 F.2d at 1057.
Allegations that the Intellectual Ventures Companies Are a Single Entity
Monopolization under Section 2 of the Sherman Act involves “‘independent activity by a
single entity,’” as opposed to “a concerted effort by more than one entity to fix prices or
otherwise restrain trade,” for which § 1 of the Sherman Act applies. See Va. Vermiculite, Ltd. v.
Historic Green Springs, Inc., 307 F.3d 277, 281 (4th Cir. 2002) (quoting Fisher v. Berkeley, 475
U.S. 260, 266 (1986)). Likewise, Section 7 of the Clayton Act limits the acquisitions of a single
entity, stating that “[n]o person engaged in commerce or in any activity affecting commerce shall
acquire, directly or indirectly, the whole or any part of the stock or other share capital . . . where
. . . the effect of such acquisition may be substantially to lessen competition, or to tend to create a
monopoly.” 15 U.S.C. § 18 (emphasis added). Without pleading that the Intellectual Ventures
companies are the same entity, the Capital One companies cannot state a claim against the
Intellectual Ventures companies under Section 2 or Section 7. See id.
“Any anticompetitive activities of corporations and their wholly owned subsidiaries
meriting antitrust remedies may be policed adequately without resort to an intra-enterprise
conspiracy doctrine. . . . [T]he enterprise is fully subject to § 2 of the Sherman Act . . . .”
Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 777 (1984). And, “[w]hen the
parent controls, directs, or encourages the subsidiary’s anticompetitive conduct, the parent
engages in sufficient independent conduct to be held directly liable as a single enterprise with the
subsidiary under the Sherman Act.” Nobody in Particular Presents, Inc. v. Clear Channel
Commc’ns, Inc., 311 F. Supp. 2d 1048, 1070 (D. Colo. 2004); see also Copperweld, 467 U.S. at
770–71 (“[T]here can be little doubt that the operations of a corporate enterprise organized into
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divisions must be judged as the conduct of a single actor. . . . Antitrust liability should not
depend on whether a corporate subunit is organized as an unincorporated division or a wholly
owned subsidiary.” (discussing § 1 of the Sherman Act and the insusceptibility of a parent and its
wholly owned subsidiary to antitrust liability for conspiracy under § 1)). Thus, the Capital One
companies’ antitrust counterclaims and third party claims are sufficient if they allege that one
Intellectual Ventures company is a parent company, controlling or directing the anticompetitive
conduct of the other Intellectual Ventures companies. See Copperweld, 467 U.S. at 770–71, 777;
Nobody in Particular, 311 F. Supp. 2d at 1070.
Considering first the Third Party Complaint, it describes the Intellectual Ventures
companies’ corporate structure sufficiently to withstand dismissal. Specifically, the Capital One
companies allege that Intellectual Ventures Management, LLC “‘through some complicated set
of LLCs and limited partnerships’ manages IV I,” and “[t]he same is true of Intellectual Ventures
Management LLC’s control of IV II.” Third Party Compl. ¶ 11 (quoting Myhrvold Dep.).
Nathan Myhrvold, CEO for Intellectual Ventures, also testified that “that IV I ‘is an entity that
we set up primarily to be the plaintiff for lawsuits,’” and ‘it basically holds the patent assets to be
filed in patent lawsuits.’” Id. (quoting Myhrvold Dep.). Moreover, the Third Party Complaint
explicitly states that “Intellectual Ventures Management, LLC controls all IV entities,” and
provides a chart to “summarize[] Intellectual Ventures’ corporate structure,” in which all
Intellectual Ventures entities, directly or indirectly, report to Intellectual Ventures Management,
LLC. Id. ¶ 12. These allegations suffice at the pleading stage to allege that Intellectual Ventures
Management, LLC is the parent company, the other Intellectual Ventures companies are
subsidiaries, and the parent company controls the subsidiaries. See Nobody in Particular, 311 F.
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Supp. 2d at 1070. Therefore, this is not a basis for dismissal of the third party claims. See Fed.
R. Civ. P. 12(b)(6); Velencia, 2012 WL 6562764, at *4.
The outcome is different with regard to the Counterclaims, however. The Capital One
companies insist that, for purposes of pleading monopolization, they “only had to allege that the
entities are commonly owned and controlled,” and the original IV companies “do[] not dispute
that Capital One has met that requirement.” Countercls.’ Br. 1; see id. at 7. Yet, the original IV
companies do dispute this. They contend:
There are no allegations in the counterclaims plausible to allege common
ownership or control. Capital One wrongly relies on testimony submitted in
connection with its new brief and allegations from Capital One’s Third Party
Complaint against Intellectual Ventures Management, LLC, Invention Investment
Fund I, L.P., and Invention Investment Fund II, LLC, not the Plaintiffs, to support
the existence of plausible common ownership or control allegations.
Counter-Defs.’ Br. 2. Moreover, the Capital One companies continue to assert that the alter ego
and agency allegations, see Third Am. Countercl. ¶¶ 10–12, are “irrelevant to whether Capital
One adequately pled monopolization, attempted monopolization, and unlawful asset acquisition
by the IV entities.” Countercls.’ Br. 1. Therefore, I will not consider them in assessing the
sufficiency of the claims. The original IV companies’ Motion to Strike IS DENIED AS MOOT.
Yet, even were I to consider (in the interest of justice under Fed. R. Civ. P. 1) the alter
ego and agency allegations that original IV companies ask me to disregard, there is no reference
in the Counterclaims to a parent company or subsidiaries. The allegations of management and
control, present in the Third Party Complaint, are nowhere to be found. Rather, Paragraphs 11–
13 only allege “agency relationships,” with the original IV companies acting “solely as the agent
of” and “mere vessels for” the new IV companies, and with their “actions . . . imputed” to the
new IV companies. Third Am. Countercl. ¶¶ 11–13. Unlike in the Third Party Complaint, they
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do not allege that one of the new IV companies is the parent company that controls all of the
other Intellectual Ventures companies. Compare Third Party Compl. ¶¶ 11–12, with Third Am.
Countercl. ¶¶ 11–13. Consequently, the Capital One companies have not alleged “‘independent
activity by a single entity.’” See Va. Vermiculite, 307 F.3d at 281 (citing Fisher, 475 U.S. at
266); Copperweld, 467 U.S. at 777; Nobody in Particular, 311 F. Supp. 2d at 1070. Therefore,
they have failed to state a claim for a Section 2 violation. See Va. Vermiculite, 307 F.3d at 281;
Sun Dun, Inc. of Wash. v. Coca-Cola Co., 740 F. Supp. 381, 391–92 (D. Md. 1990) (dismissing
Section 2 claim based on allegations that “two or more competitors conspire[d] to create a
market environment in which competition and market entry is improperly restricted, but in which
market power continues to be shared among these otherwise unrelated entities”). Nor have they
stated an antitrust claim under the Clayton Act. See 15 U.S.C. § 18; see also Copperweld, 467
U.S. at 770–71. Therefore, the antitrust counterclaims against the original IV companies will be
dismissed without prejudice to re-pleading to include allegations (such as those determined to be
sufficient in the Third Party Complaint) that the original IV companies are the same entity. See
Fed. R. Civ. P. 12(b)(6); Velencia, 2012 WL 6562764, at *4.
Given that I have determined that the third party claims against the new IV companies do
state antitrust claims under both the Sherman and Clayton Acts, I have little doubt that the
Capital One companies will state a plausible counterclaim sufficiently by including the
additional allegations of the third party claims in an amended counterclaim. While the original
IV companies will have an opportunity to file an amended answer, it would be unwise for them
to look at this as an opportunity to seek leave to file another motion to dismiss. The time has
come to move forward with discovery.
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To that effect, the parties will meet and confer to discuss the current pretrial schedule and
to discuss a discovery plan. If having a Rule 16 conference with me would be helpful, counsel
should let me know and I will schedule one.
ORDER
Accordingly, it is, this 14th day of January, 2016, hereby ORDERED that
1. The original IV companies’ Motion to Strike, ECF No. 225, IS DENIED AS MOOT;
2. The original IV companies’ renewed Motion to Dismiss, ECF No. 362, IS
GRANTED without prejudice to the Capital One companies re-pleading on or before
February 4, 2016 to include allegations that the original IV companies are the same
entity;
3. The original IV companies may file an amended answer on or before February 18,
2016;
4. The new IV companies’ Motion to Dismiss, ECF No. 296, IS DENIED;
5. The Capital One companies’ Motion to Seal, ECF No. 398, IS GRANTED; and
6. The parties will meet and confer to discuss the current pretrial schedule and to discuss
a discovery plan by January 28, 2016 and submit any joint proposed modifications to
the Scheduling Order by February 4, 2016.
/S/
Paul W. Grimm
United States District Judge
lyb
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