Court Opinion

ID: 6351752
Source: CourtListenerOpinion
Date Created: 2022-06-21 18:01:23.875134+00
Date Added: 2024-06-11T12:49:11.847655
License: Public Domain

Case: 20-11032    Document: 00516363496        Page: 1    Date Filed: 06/21/2022

                                    REVISED

          United States Court of Appeals
               for the Fifth Circuit                                 United States Court of Appeals
                                                                              Fifth Circuit

                                                                            FILED
                                                                        June 21, 2022
                                No. 20-11032
                                                                       Lyle W. Cayce
                                                                            Clerk

   Continental Automotive Systems, Incorporated, a
   Delaware corporation,

                                                         Plaintiff—Appellant,

                                    versus

   Avanci, L.L.C., a Delaware corporation; Avanci Platform
   International Limited, an Irish company; Nokia
   Corporation, a Finnish corporation; Nokia of America
   Corporation, a Delaware corporation; Nokia Solutions and
   Networks U.S., L.L.C., a Delaware corporation; Nokia
   Solutions and Networks Oy, a Finnish corporation; Nokia
   Technologies Oy, a Finnish corporation; Optis UP Holdings,
   L.L.C., a Delaware corporation; Optis Cellular Technology,
   L.L.C., a Delaware corporation; Optis Wireless Technology,
   L.L.C., a Delaware corporation; Sharp Corporation, a Japanese
   corporation,

                                                     Defendants—Appellees.

                 Appeal from the United States District Court
                     for the Northern District of Texas
                          USDC No. 3:19-CV-2933

                  ON PETITION FOR REHEARING
Case: 20-11032        Document: 00516363496             Page: 2      Date Filed: 06/21/2022

                                         No. 20-11032

   Before Stewart, Ho, and Engelhardt, Circuit Judges.
   Per Curiam:*
           Auto-parts      supplier     Continental      Automotive       Systems,      Inc.
   (“Continental”) sued several standard-essential patent (“SEP”) holders
   (“Patent-Holder Defendants”) and their licensing agent Avanci,1 seeking
   declaratory and injunctive relief. Before the district court, Continental
   asserted that Patent-Holder Defendants and Avanci’s refusals to license
   SEPs to the supplier on fair, reasonable, and nondiscriminatory (“FRAND”)
   terms violated Sections 1 and 2 of the Sherman Antitrust Act of 1890 (“the
   Sherman Act”), as well as associated state law. The district court dismissed
   Continental’s claims at the pleading stage, and Continental appealed.
           Section 1 of the Sherman Act prohibits every “contract, combination
   in the form of trust or otherwise, or conspiracy, in restraint of trade or
   commerce.” 15 U.S.C. § 1. Continental alleges that Patent-Holder
   Defendants and Avanci conspired to license exclusively down the chain to
   original-equipment manufacturers based on their underlying patent pool
   licensing agreement, and that Continental’s inability to obtain FRAND
   licenses through the pool from Avanci and outside of the pool from individual
   Patent-Holder       Defendants      demonstrates       that    the    agreement       has
   unreasonably restrained trade.
           Section 2 of the Sherman Act makes it unlawful to “monopolize, or
   attempt to monopolize, or combine or conspire with any other person or
   persons, to monopolize.” 15 U.S.C. § 2. Continental alleges that Patent-
   Holder Defendants deceived standard-setting organizations into adopting

           *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.
           1
            Patent-Holder Defendants are certain Nokia Corporation entities, PanOptis
   Equity Holdings entities, and Sharp Corporation. Avanci collectively refers to Avanci, LLC
   and Avanci Platform International Limited, both of which are parties to this lawsuit.

                                               2
Case: 20-11032     Document: 00516363496             Page: 3   Date Filed: 06/21/2022

                                      No. 20-11032

   technical standards reliant on their SEPs by promising to license those
   patents on FRAND terms and reneged on this promise, and that Patent-
   Holder Defendants and Avanci abused monopoly power thereby acquired in
   the standardization process to exclude certain implementers and extract
   supra-competitive royalty rates.
          Having reviewed the district court’s detailed order, and considered
   the oral arguments and briefs filed by the parties and amicus curiae, we
   AFFIRM the judgment of the district court that Continental failed to state
   claims under Sections 1 and 2 of the Sherman Act. See Cont’l Auto. Sys., Inc.
   v. Avanci, LLC, 485 F. Supp. 3d 712 (N.D. Tex. 2020).

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