, a partner in Orrick’s Antitrust & Competition practice in Washington, D.C., recently spoke with The American Lawyer
[subscription required] regarding Capital One’s decision to file antitrust claims against Intellectual Ventures (IV). IV sued Capital One and other financial institutions for infringing patents related to banking technology. However, tighter eligibility standards for software patents has resulted in many of these patents being invalidated, with the banks filing numerous petitions for inter partes
or covered business review at the U.S. Patent and Trademark Office.
Now, Capital One is accusing IV of breaking antitrust laws by monopolizing all of the patents related to this technology – technology that is necessary for the banks to conduct business. In order to succeed, Capital One will have to prove that IV is engaging in “sham litigation” stemming from baseless claims. According to Jay, success for Capital One is a long shot. "I can count on one hand the cases that have been successful on that theory," he said.
The case has led to disagreements about what information is protected by attorney-client privilege, such as emails detailing IV’s use of litigation to assert its patents. Jay noted that these kinds of disputes often arise in licensing cases, where lawyers frequently make the business decisions. A lawyer's gut reaction might be that documents should be shielded because they're written by or to an attorney, he said, but "when you actually take a look at why they were created, it's for a business function."
According to Jay, Capital One’s antitrust claims are "difficult claims to pursue, and I think Capital One's lawyers have done a nice job keeping them alive," he said. The claims could provide useful leverage if IV files yet more patent claims and Capital One wants to strike a licensing deal "to make IV go away," he added.
Jay pointed out that for 30 years, antitrust claims similar to Capital One's were stopped in their tracks by SCM v. Xerox
, a Federal Circuit case that held "where a patent has been lawfully acquired, subsequent conduct permissible under the patent laws cannot trigger any liability under the antitrust laws." However, the Supreme Court’s 2013 decision in Actavis
may have put a crack in the underlying reasoning of the Xerox ruling. Jay concluded, "The antitrust IP space for the next few years will continue to be an active area."