Failure to Disclose Patent to Standard Setting Organization Can Be Monopolization

In Actividentity Corp. v. Intercede Group PLC et al., Northern District of California Judge Vaugh R. Walker has refused to dismiss smart card maker Intercede Ltd.’s allegations that rival Actividentity Corp. monopolized the relevant market by failing to disclose to a standards-setting organization a patent covering technology for remotely updating the devices.  The court held that Intercede sufficiently pled its antitrust claims, by alleging that 1) Actividentity created a monopoly by failing to disclose a patent to GlobalPlatform Inc., which created a “patent holdup,” whereby GlobalPlatform unknowingly set standards that incorporated Actividentity’s patented technology; and 2) such control of a patent has the ability to achieve monopoly power and either exclude competition or extract unwarranted monopoly profits from all competitors in the industry in violation of Section 2 of the Sherman Act. 

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