Trueposition, Inc. v. LM Ericsson Tel. Co.

844 F.Supp.2d 571

2012-1 Trade Cases P 77,821

TRUEPOSITION, INC., Plaintiff,

v.LM ERICSSON TELEPHONE COMPANY (Telefonaktiebolaget LM Ericsson), Qualcomm, Inc., Alcatel–Lucent USA, Inc., European Telecommunications Standards Institute, and Third Generation Partnership Project a/k/a 3GPP, Defendants.

Civil Action No. 11–4574.

United States District Court, E.D. Pennsylvania.

Jan. 6, 2012.

John G. Harkins, Jr., Colleen Healy Simpson, Evelyn Rose Marie Protano, Harkins Cunningham LLP, Philadelphia, PA, Alysia Solow, Gordon Schnell, Taline Sahakian, Constantine Cannon LLP, New York, NY, Aymeric Dumas-Eymard, David Golden, Douglas Rosenthal, Seth Greenstein, Constantine Cannon LLP, Washington, DC, for Plaintiff.

Steven E. Bizar, Buchanan Ingersoll & Rooney P.C., Robert N. Feltoon, Conrad O'Brien, Stephen W. Armstrong, Montgomery McCracken Walker & Rhoads LLP, Philadelphia, PA, Arman Y. Oruc, Conor A. Reidy, Simpson Thaher & Bartlett LLP, William S. Cravens, Bingham McCutchen LLP, Washington, DC, Kevin J. Arquit, Peri L. Zelig, Simpson Thatcher & Bartlett LLP, Gary A. Bornstein, Roger G. Brooks, Cravath Swaine & Moore LLP, Richard S. Taffet, Derek Care, Bingham McCutchen LLP, New York, NY, for Defendants.

MEMORANDUM

ROBERT F. KELLY, Senior District Judge.

Presently before the Court are Motions to Dismiss Plaintiff, TruePosition, Inc.'s (“TruePosition”) Complaint submitted by Defendants Qualcomm, Inc. (“Qualcomm”), LM Ericsson Telephone Company (Telefonaktiebolaget LM Ericsson) (“Ericsson”), Alcatel–Lucent USA, Inc. (“ALU”), and European Telecommunications Standards Institute (“ETSI”) (collectively, “Defendants”). Also before the Court are three Oppositions to the Motions to Dismiss submitted by TruePosition. The first of TruePosition's Oppositions to Motions to Dismiss is in response to the Motion to Dismiss submitted by Qualcomm only. The second of TruePosition's Oppositions to Motions to Dismiss is in response to the Motions to Dismiss of ALU, Ericsson, and ETSI. The third and final of TruePosition's Oppositions to Motions to Dismiss is in response to the Motion to Dismiss of ETSI only. Defendants have each submitted Replies, which are also before the Court. For the reasons provided below, the Defendants' Motions to Dismiss will be granted.

I. FACTSA. BACKGROUND

This action stems from the alleged anticompetitive conduct of major players in the international telecommunications market within the context of a standard-setting organization (“SSO”).¹ (Compl. ¶ 1.) TruePosition alleges that Ericsson, Qualcomm, and ALU (collectively, the “Corporate Defendants”) conspired to exclude its positioning technology, Uplink Time Difference of Arrival (“UTDOA”),² from standards promulgated by a SSO, Third Generation Partnership Project (“3GPP”).³ ( Id. ¶ 34.) According to TruePosition, the Corporate Defendants were able to exclude UTDOA by collaboratively manipulating 3GPP's processes and procedures. ( Id. ¶ 4.) TruePosition further alleges that ETSI and 3GPP (“SSO Defendants”) participated in the conspiracy to exclude UTDOA from 3GPP standards by failing in their obligations to ensure that the Corporate Defendants complied with 3GPP Rules. ( Id. ¶¶ 128–29.)

1. The Parties

TruePosition describes itself as a “leading innovator in developing and marketing high accuracy location products that operate over cellular telecommunications networks.” (Compl. ¶ 2.) It devotes substantial resources annually to research and development for positioning technology. ( Id. ¶ 41.) As of 2002, TruePosition's positioning technologies were being incorporated with Global System for Mobile Communications (“GSM”) networks, GSM networks being one of the 2G technologies.⁴

The Corporate Defendants are alleged “leader[s] in the development, manufacture, and sale of equipment” relating to mobile telecommunications. ( Id. ¶¶ 8–10.) According to TruePosition, Ericsson specializes in equipment (and related software) for mobile telephone communications, including the sales of network equipment to U.S. telecommunications carriers and handsets to such carriers and United States consumers. ( Id. ¶ 8.) TruePosition alleges that Qualcomm specializes in “semiconductor chips and software for use in mobile telephone handsets.” ( Id. ¶ 9.) TruePosition alleges that ALU specializes in “equipment and software for mobile telephone communications, including the sales of network equipment to U.S. telecommunications carriers.” ( Id. ¶ 10.)

In contrast to the Corporate Defendants, TruePosition alleges that 3GPP and ETSI are “not-for-profit” SSOs located in France. ( Id. ¶¶ 11–12.) TruePosition alleges that the membership of 3GPP comprises hundreds of international companies through six associations of telecommunications companies (each association referred to as an “organizational partner).” ( Id. ¶ 11.) The alleged business of 3GPP is “fairly and impartially to create global standards for mobile telecommunications technologies that are designed to be implemented in equipment sold internationally, including in the United States.” ( Id.) According to TruePosition, 3GPP is responsible for managing the conduct of its standard-setting activities and to assure that its mandate is properly performed by its participating members. ( Id.) TruePosition asserts that the Corporate Defendants exert strong influence over 3GPP through their control of the Chair positions of key committee groups and through their general industry dominance. ( Id.) TruePosition alleges that ETSI is comprised of more than 700 member companies from 62 countries, including countries outside of Europe. ( Id. ¶ 12.) According to TruePosition, “[t]he business of ETSI is fairly and impartially to create standards within Europe and globally for information and telecommunications technologies, including for mobile telecommunications.” ( Id.) TruePosition asserts that ETSI is an “organizational partner” of 3GPP and that it is “the primary provider of office space, staffing, and administrative support for 3GPP.” ( Id.) TruePosition further alleges that the Corporate Defendants similarly “are members of, and actively participate in, and exert strong influence over ETSI.” ( Id.)

2. TruePosition's Technology

According to TruePosition, “more than 55 million cellular callers in the United States each year are located by [its] products, assisting police, fire, and ambulance services in saving lives and enabling law enforcement to combat criminal activity and terrorist threats.” ( Id. ¶ 2.) TruePosition's positioning technology, called UTDOA, works by using equipment located at multiple cell towers (referred to as “location measurement units” or “LMUs”), which collaboratively collect timing information necessary to calculate a mobile handset's location by measuring the difference in the time they receive a signal sent over a cellular network in the ordinary course from the handset. ( Id. ¶ 19.) This aspect of UTDOA is exclusive to TruePosition. ( Id.) Other positioning technologies depend on the handset to perform calculations. ( Id.) TruePosition asserts that UTDOA is uniquely well-suited for locating mobile handsets in difficult areas such as indoor areas and so-called “urban canyons.” ( Id. ¶¶ 19a, 21.) TruePosition further asserts that, because its technology does not rely on calculations performed in the handset, it can locate any phone, not just those that are equipped with positioning technology, and that it can locate the phone even when it is not in use. ( Id. ¶ 22.)

TruePosition does not manufacture Radio Access Network (“RAN”) equipment. ( Id. ¶ 42.) TruePosition sells high accuracy positioning and networking technology as a standalone LMU. ( Id.) These standalone LMUs are collocated with, and must interoperate (work correctly together) with, the RAN equipment at a cell site. ( Id.) Therefore, the ability of an LMU to interoperate with multiple vendors' RAN equipment is crucial to the ability of TruePosition to compete in the markets for positioning equipment. ( Id. ¶ 43.) TruePosition also offers products with supplemental location technologies, including A–GPS ⁵ and other technologies in combination with UTDOA. ( Id. ¶ 45.) To ensure that its technologies will interoperate with RAN equipment, TruePosition has been actively participating in organizations that set operability standards for mobile telecommunications, including ETSI and 3GPP, since the 1990's. ( Id. ¶ 43.)

3. SSOs for Mobile Phone Services

TruePosition alleges that 3GPP and ETSI are “SSOs that develop standards for wireless and mobile telecommunications services.” ( Id. ¶ 24.) Apparently, each of the SSOs “includes as members companies that compete against each other for the development, manufacture, and sale of products and services relating to mobile telecommunication.” ( Id.) TruePosition alleges that 3GPP is currently in the process of setting standards for the next generation of mobile telecommunications systems known as LTE, which is a fourth generation (“4G”) mobile telephone technology. ( Id. ¶ 3.) TruePosition further alleges that “inclusion in the 3GPP standard is vital to commercial success.⁶ Exclusion from the standard guarantees commercial failure and, in most cases, absolute foreclosure from the market.” ( Id.)

The conduct that forms the basis of TruePosition's claims occurred within 3GPP during the process of setting standards for LTE technology. TruePosition describes 3GPP's standardization procedure as follows: 3GPP's standards are embodied in a series of technical documents known as “Specifications,” to which updatesare issued sequentially in a series of “Releases.” ( Id. ¶ 26.) TruePosition alleges that “[o]nce a Release is completed by 3GPP, it is adopted and promulgated as a standard by 3GPP's regional organizational partners, including ETSI.” ( Id.)

TruePosition describes 3GPP's organizational structure as comprised of four Technical Specification Groups (“TSGs”) that are responsible for creating Specifications for...