Antitrust Law Daily Wrap Up, ANTITRUST—Fed. Cir.: Capital One’s monopolization claims stick against patent portfolio companies, (Mar 11, 2016)

By Greg Hammond, J.D.

The U.S. Court of Appeals for the Federal Circuit has rejected Intellectual Ventures I LLC’s petition for writ of mandamus seeking to direct the federal district court in Greenbelt, Maryland, to vacate its January 14, 2016, order and to dismiss antitrust claims filed by Capital One Financial Corp. The appellate court concluded that mandamus relief cannot be used as a substitute for appeal (In re Intellectual Ventures I LLC, March 10, 2016, Hughes, T.).

Capital One’s antitrust claims arose in response to patent litigation brought by Intellectual Ventures I LLC and related company Intellectual Ventures II LLC (the IV companies). The IV companies—purportedly operating as a patent assertion entity—allegedly acquired a portfolio of patents and then engaged in a “patent holdup” by using a patent suit to force payment of excessive license fees. Capital One brought antitrust counterclaims against the original IV companies and a Third-Party Complaint against other IV companies. Capital One contended that combined, the related companies acquired a “single 3,500 patent portfolio” of financial services patents.

The district court concluded, in its January 14 order, that Capital One sufficiently alleged that patent portfolio company Intellectual Ventures Management, LLC and related companies were a single entity for purposes of pursuing claims that they amassed monopoly power in violation of Section 2 of the Sherman Act and Section 7 of the Clayton Act by acquiring financial services patents. In addition, the court rejected assertions of issue preclusion and claim preclusion, and concluded that “the time has come to move forward with discovery.”

The IV companies then sought a petition for writ of mandamus to direct the lower court to vacate its January 14 order and to dismiss Capital One’s antitrust claims on the basis of issue preclusion. However, the IV companies failed to show why the issues raised were appropriate for mandamus relief and why they could not raise their alleged challenges to the lower court’s order on appeal, the appellate court found. Rather, the IV companies merely cited the cost and inconvenience of discovery, which the appellate court noted were generally insufficient to warrant mandamus relief. Noting that the extraordinary writs could not be used as substitutes for appeals, the appellate court denied the IV companies’ petition.

The case is No. 2016-113.

Attorneys: Robert E. Freitas (Freitas Angell & Weinberg LLP) for Intellectual Ventures I LLC, Invention Investment Fund I, LP, and Invention Investment Fund II, LLC. Mary Catherine Zinsner (Troutman Sanders LLP) for Capital One Financial Corp., Capital One Bank USA, N.A., and Capital One, N.A.

Companies: Intellectual Ventures I LLC; Invention Investment Fund I, LP; Invention Investment Fund II, LLC; Capital One Financial Corp.; Capital One Bank USA, N.A.; Capital One, N.A.

Cases: Antitrust FedCirNews