* District Judge of the Western District of Louisiana, sitting by designation.

1 The summary judgment briefing included defendants Nokia, Motorola, T-Mobile, Ericsson,

Qualcomm, and Lucent. Subsequently the district court entered dismissals as to T-Mobile and Nokia,

so the only appellees to this action are Motorola, Ericsson, Qualcomm, and Lucent (“Appellees”).

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 07-40954

GOLDEN BRIDGE TECHNOLOGY INC

Plaintiff - Appellant

v.

MOTOROLA INC; ERICSSON INC; PANASONIC MOBILE

COMMUNICATIONS DEVELOPMENT CORP OF USA; QUALCOMM

INCORPORATED; LUCENT TECHNOLOGIES INC

Defendants - Appellees

Appeal from the United States District Court

for the Eastern District of Texas

Before GARZA and ELROD, Circuit Judges, and HICKS,* District Judge.

EMILIO M. GARZA, Circuit Judge:

Plaintiff Golden Bridge Technology, Inc. (“GBT”) appeals the district

court’s grant of summary judgment in favor of the defendants.1 The district

court granted summary judgment against GBT’s claim that the defendants

United States Court of Appeals

Fifth Circuit

F I L E D

October 23, 2008

Charles R. Fulbruge III

Clerk
No. 07-40954

2

unlawfully conspired notto deal with GBT in violation ofthe Sherman Antitrust

Act. For the following reasons, we affirm.

I

Golden Bridge Technology (“GBT”) develops wireless communications

technology for cellular networks. Along with the Appellees, GBT is a member

of a non-profit standard setting organization called Third Generation

Partnership Project (“3GPP”). 3GPP institutes uniform technology standards

for the telecommunications industry to ensure worldwide compatibility of

cellular devices and systems. More than 260 companies belong to 3GPP,

representing all levels of the cell phone industry. The 3GPP members are

responsible for creating and developing the 3GPP standard, which means

determining what technologies will be included in the standard as either

mandatory or optional features.

GBT owns patents to Common Packet Channel technology (“CPCH”),

which allows the transmittal of electronic information packets between cellular

phones and base stations. In 1999, 3GPP adopted CPCH as an optional feature.

Optional status meantthat manufacturers did not have to use CPCH, butifthey

chose to they had to follow the 3GPPstandard to ensure compatibility with other

equipment and networks. Since that time, two companies have obtained licenses

to use CPCH, but neither company has field tested or implemented the

technology.

Changes to the 3GPP standard occur through consensus of the individual

members. Individual members are divided into Working Groups, which have

different responsibilities related to developing the standard. Each Working

Group belongs to one of six Technical Specification Groups, and the Technical

Specification Groups are presided over at the top level by the Project

Coordination Group. The Working Groups propose changes to the 3GPP

standard by submitting change requests to the other Working Groups, which if
No. 07-40954

3

approved are submitted to the relevant Technical Specification Group for

decision. The opposition of a single individual member prevents approval of a

change request, unless 71% of individual members attending a subsequent

plenary meeting vote to adopt the change. Technical decisions are appealable

to the Project Coordination Group.

At the 2004 plenary meeting for the Technical Specification Group to

which GBT and the Appellees belonged, individual members wanted to simplify

the 3GPP standard by removing old and unused technologies. At a subsequent

Working Group meeting in Scottsdale, Arizona, two individual members

presented a proposed feature clean-up list that did not include CPCH. No

decision was reached, and the clean-up discussions continued via emails between

several companies in attendance at the Scottsdale meeting. These companies

(including Motorola, Ericsson, and Qualcomm, but notLucent) discussed adding

CPCH to the clean-up list. No agreement was reached and they ultimately

declined to include it, apparently due to concerns that its inclusion would

prevent consensus. GBT did not attend this meeting and was not included on

the emails. 

The next plenary meeting occurred in Tokyo, Japan. Appellees all

attended this meeting, but GBT did not. The proposed feature clean-up list was

presented, still notincluding CPCH. However, an Ericsson representative spoke

out in front of the entire group, suggesting adding CPCH to the clean-up list.

Cingular, a previous friend of CPCH, announced support for removal. No

objections arose. Discussion turned to other issues, and the chairperson of the

plenary meeting requested that the members hold an offline session to obtain

consensus on unresolved items. On the final day of the plenary meeting, the

members presented the revised clean-up list with CPCH included. No one

objected, so the Working Groups created change requests for each feature on the

list. These change requests were approved at a subsequent Working Group
No. 07-40954

4

meeting, which GBT failed to attend. At the following plenary meeting in

Quebec, the change requests obtained final unanimous approval and all of the

features on the revised clean-up list were removed from the 3GPP standard.

GBT also failed to attend this meeting and did not appeal CPCH’s removalto the

Project Coordination Group.

GBT filed this lawsuit prior to the Quebec meeting, alleging a violation of

the Sherman Antitrust Act, 15 U.S.C. § 1. GBT claimed that the defendants

conspired with each other to remove CPCH from the 3GPP standard, resulting

in the unlawful exclusion of GBT from the market. The district court granted

the defendants’ motion for summary judgment, finding that GBT had failed to

present any evidence of a conspiracy. GBT now appeals. 

II

We review the district court’s grant of summary judgment de novo,

applying the same standard as the district court. Fabela v. Socorro Indep. Sch.

Dist., 329 F.3d 409, 414 (5th Cir. 2003). We view all facts in the light most

favorable to the non-movant, and affirm only when the evidence “show[s] that

there is no genuine issue as to any material fact and that the movant is entitled

to judgment as a matter of law.” FED R. CIV.P. 56(c); see also Coury v. Moss, 529

F.3d 579, 584 (5th Cir. 2008).

The Supreme Court has specified what a plaintiff must show to avoid

summary judgment on a Sherman Act § 1 claim:

To survive a motion for summary judgment . . . a plaintiff seeking

damages for a violation of § 1 must present evidence ‘that tends to

exclude the possibility’ that the alleged conspirators acted

independently. Respondents . . . must show that the inference of

conspiracy is reasonable in light of the competing inferences of

independent action or collusive action that could not have harmed

respondents.

See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-

88 (1986). Accordingly, we reverse the district court’s grant of summary
No. 07-40954

5

judgment only where the evidence is strong enough to reasonably exclude the

possibilities of independent action and conduct consistent with permissible

competition. See Tunica Web Adver. v. Tunica Casino Operators Ass’n, 496 F.3d

403, 409 (5th Cir. 2007).

III

Section 1 of the Sherman Act states: “Every contract, combination in the

form of trust or otherwise, or conspiracy, in restraint of trade or commerce

among the several States, or with foreign nations, is declared to be illegal.” 15

U.S.C. § 1. Although § 1 could be read to outlaw all contracts, it has long been

interpreted to only proscribe unreasonable restraints. See Leegin Creative

Leather Prods. v. PSKS, Inc., 127 S. Ct. 2705, 2712 (2007). To establish a § 1

violation, a plaintiff must prove that: (1)the defendants engaged in a conspiracy;

(2)that restrained trade; (3) in the relevant market. See Apani Sw., Inc. v. CocaCola Enter., Inc., 300 F.3d 620, 627 (5th Cir. 2002). Once a plaintiff establishes

that a conspiracy occurred, whether it violates § 1 is determined by the

application of either the per se rule or the rule of reason. See Spectators’

Commc’n Network, Inc. v. Colonial Country Club, 253 F.3d 215, 222-23 (5th Cir.

2001). If the court determines that the defendant’s conduct “would always or

almost always tend to restrict competition and decrease output,” the restraint

is per se illegal and no further inquiry occurs. See Leegin, 127 S. Ct. at 2713.

However, if the conduct is not deemed per se unreasonable,the plaintiff will also

have to prove that the conduct unreasonably restrains trade in light of actual

market forces under the rule of reason. Id.

Regarding the conspiracy element, the Supreme Court recently observed

that “the crucial question [in a § 1 claim] is whether the challenged

anticompetitive conduct stems from independent decision or from an agreement.”

Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955, 1964 (2007) (internal quotations

omitted). The plaintiff must present evidence that the defendants engaged in
No. 07-40954

6

concerted action, defined as having “a conscious commitment to a common

scheme designed to achieve an unlawful objective.” Monsanto Co. v. Spray-Rite

Serv. Corp., 465 U.S. 752, 764 (1984). Concerted action may be shown by either

direct or circumstantial evidence. Direct evidence explicitly refers to an

understanding between the alleged conspirators, while circumstantial evidence

requires additional inferences in order to support a conspiracy claim. See

Tunica, 496 F.3d at 409. Independent parallel conduct, or even conduct among

competitors that is consciously parallel, does not alone establish the contract,

combination, or conspiracy required by § 1. See Bell Atlantic, 127 S. Ct. at 1964.

GBTargues that email communications between the Appellees and others

following the Scottsdale meeting show a conspiracy, in the form of a group

boycott, to eliminate CPCH from the 3GPP standard. The district court

disagreed, granting summary judgment because GBT failed to present any

evidence supporting the inference of a conspiracy. We agree.

As a threshold matter, GBT has presented only circumstantial evidence

of a conspiracy. None of the emails, or any other evidence GBT presents, show

an explicit understanding between the Appellees to collude and unlawfully

eliminate CPCH from the standard. Compare Tunica, 496 F.3d at 410 (finding

that email communications show conspiracy because they contain direct evidence

stating that the parties entered into a “gentlemen’s agreement” not to deal with

another company). Unlike Tunica, here the emails actually reveal disagreement

among the Appellees. The Appellees disliked CPCH for different reasons and

wanted to remove it at different times. They disagreed about the very action

GBT claims constituted the conspiracy—whether to add CPCH to the clean-up

list being presented at the Tokyo meeting. Viewing the evidence favorably to

GBT, the emails do reveal a common dislike for CPCH among some of the

Appellees and other companies. However, common dislike is not the same as an
No. 07-40954

7

explicit understanding to conspire, so we accordingly review GBT’s claim under

the stricter standard required for circumstantial evidence.

To show conspiracy, circumstantial evidence must tend to exclude the

possibility that the Appellees acted independently. See Matsushita, 475 U.S. at

587-88. However, GBT has presented no evidence refuting the possibility that

the Appellees found CPCH outdated and independently supported its removal.

Viewed mostfavorably to GBT,the evidence indicates that some ofthe Appellees

communicated their dislike of CPCH to each other, and that each Appellee

hoped CPCH would eventually be removed from the standard. However, at least

one Appellee (Lucent) only expressed a desire to remove CPCH in internal

company emails, and was not part of the group email discussions. This evidence

amounts to an exchange of information, followed by parallel conduct when the

Appellees (and over 100 other companies) unanimously voted to remove CPCH,

and it does not refute the likelihood of independent action. See Consol. Metal

Prods., Inc. v. Am. Petroleum Inst., 846 F.2d 284, 294 n.30 (5th Cir. 1988) (noting

that the mere exchange of information, or even consciously parallel action, is

insufficient to establish a conspiracy under § 1). Moreover, the action that GBT

alleges implemented the conspiracy—when the Ericsson representative moved

to place CPCH on the clean-up list at the Tokyo meeting—occurred

independently before the entire plenary body, and GBT offers no evidence

indicating it resulted from any explicit agreement. On the contrary, the

evidence indicates that Ericsson’s action was in opposition to what some of the

other Appellees wanted, due to their concerns about Cingular’s allegiance to

CPCH.

GBT argues that the Appellees’ had economic motives to remove CPCH,

demonstrating that they did not act independently. These purported motives

include avoiding the payment of royalty fees to use CPCH and promoting their

own competing technology. The first motive finds no support in the evidence,
No. 07-40954

8

because none of the Appellees, and in fact no company at all, had ever paid

royalties to GBTfor CPCH. Further, CPCH was an optional feature in the 3GPP

standard. There was no rational reason for the Appellees to conspire to

unlawfully remove CPCH to avoid paying royalties, when they could simply opt

notto use it. Regarding the alleged competing-technology motive, such evidence

does not exclude the possibility of independent conduct. Appellees could still

support CPCH’s removal because they disliked it, even if they owned competing

technology. In fact, the existence of an independent financial motive to remove

CPCH might be an independent reason for each Appellee company to support

CPCH’s removal. It is not sufficient under Matsushita for GBT to simply

propose conceivable motives for conspiratorial conduct; GBT’s evidence must

tend to show that the possibility of independent conduct is excluded. See

Matsushita, 475 U.S. at 587-88. GBT’s evidence does not tend to exclude the

possibility that the Appellees acted independently, motivated by a desire to

improve the 3GPP standard by removing outdated and underused technologies.

Moreover,the Appellees presented evidence showing that these informal

communications are an important part ofthe standard setting process, and that

the 3GPP standards are beneficial to the market. We have maintained that “it

has long been recognized that the establishment and monitoring of trade

standards is a legitimate and beneficial function.” Consol. Metal Prods., 846

F.2d at 293-94 (finding that though a trade association naturally involves

collective action by competitors, it is not by its nature a “walking conspiracy”).

The standards 3GPP sets allow the numerous necessary components of cellular

communications to operate compatibly. Potential procompetitive benefits of

standards promoting technological compatibility include facilitating economies

of scale in the market for complementary goods, reducing consumer search

costs, and increasing economic efficiency. See ABASECTION OFANTITRUST LAW,

HANDBOOK ON THE ANTITRUST ASPECTS OF STANDARD SETTING 10 (2004). We
No. 07-40954

2 Accordingly, though we affirm the district court’s ruling, our opinion should not be

construed to endorse its conclusion that if GBT had shown an agreement in restraint of trade,

the Appellees’ conduct would be considered per se illegal. A proper review of that conclusion

would consider whether it conflicts with Consol. Metal Prods., where we held that a standard

setting organization’s decision not to certify a particular product did not pe se violate Sherman

Act § 1. See 846 F.2d at 292.

9

have found it “axiomatic” that a standard setting organization must exclude

some products, and such exclusions are notthemselves antitrust violations. See

Consol. Metal Prods., 846 F.2d at 294. To hold otherwise would stifle the

beneficial functions of such organizations, as “fear of treble damages and

judicial second-guessing would discourage the establishment of useful industry

standards.” Id. at 297. Accordingly, we decline to infer conspiratorial action on

the basis of limited circumstantial evidence, particularly where this evidence

is at least as consistent with permissible competition, and with independent

action, as with unlawful conspiracy. See Matsushita, 475 U.S. at 588. 

As GBT has not met the threshold requirement of demonstrating the

existence of an agreement in restraint of trade, we need not review the district

court’s findings as to the remaining requirements of a § 1 violation.2

IV

For the foregoing reasons, we AFFIRM the district court’s grant of

summary judgment.