Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: Semiconductor monopolization suit on hold pending resolution of patent infringement claims, (Dec 16, 2015)

By Greg Hammond, J.D.

A semiconductor developer was entitled to a stay of an attempted monopolization action against a fabless semiconductor company, pending resolution of a related patent infringement case. In granting the motion to stay, the federal district court in San Jose, California, concluded that (1) the fabless semiconductor company would not face hardship or inequity as a result of the stay; (2) the semiconductor developer could face potential hardship as a result of denying the stay; and (3) resolution of the patent infringement action is likely to “bear upon” this case (IPtronics Inc. v. Avago Technologies U.S., Inc., December 15, 2015, Freeman, B.).

IPtronics is a fabless semiconductor company and Avago is a developer and supplier of semiconductor products. IPtronics filed a complaint against Avago in December 2014, bringing claims for attempted monopolization. Avago moved to stay the antitrust litigation, however, pending resolution of an earlier filed patent infringement action.

Damage from granting stay. The court granted the motion to stay, finding first that the plaintiffs failed to sufficiently show that they would face hardship or inequity as a result of the stay. Despite IPtronics’ argument that a stay would prejudice them by delaying their remedy and by weakening the recollections of key witnesses, the court found that a stay until June 2016 would not significantly delay IPtronics’ remedy, if at all, and the witnesses IPtronics is concerned about are currently preparing for and will be testifying in the patent action trial.

Hardship, inequity from denying stay. Avago argued that denial of the stay could harm them by enabling IPtronics to circumvent the recent close of fact discovery in the patent action and by possibly forcing Avago to choose between protecting privileges in the patent action and defending the antitrust action by producing documents and evidence relating to its legal strategy in bringing a third related action before the U.S. International Trade Commission (ITC). The court concluded that a stipulation limiting cross-use of information between the antitrust action and the patent infringement action should allay any fears concerning circumvention of the close of discovery in the patent action. Nevertheless, the court recognized the potential hardship from denying the stay weighs slightly in favor of granting the motion.

Orderly course of justice. Lastly, in granting the motion to stay, the court found that resolution of the patent infringement action is likely to “bear upon” this case. Specifically, the patent infringement action’s finding concerning whether certain IPtronics products induced infringement of the patent-at-issue will inform the determination of whether Avago’s claim in the ITC action that those same products contributorily infringed the same patent were objectively baseless.

The case is No. 14-cv-05647-BLF.

Attorneys: Brian Parker Miller (Alston & Bird LLP) for IPtronics Inc. and Mellanox Technologies Denmark APS. Nancy L. Stagg (Foley & Lardner LLP) for Avago Technologies U.S., Inc., Avago Technologies General IP Singapore Pte. Ltd., Avago Technologies Trading Ltd., and Avago Technologies International Sales Pte. Ltd.

Companies: Avago Technologies U.S. Inc.; Avago Technologies General IP Singapore Pte. Ltd.; Avago Technologies Trading Ltd.; Avago Technologies International Sales Pte. Ltd.; IPtronics A/S; IPtronics Inc.; Mellanox Technologies Denmark APS

Cases: Antitrust CaliforniaNews