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Trueposition, Inc v. Lm Ericsson Telephone Company (Telefonaktiebolaget Lm Ericsson

January 6, 2012


The opinion of the court was delivered by: Robert F. Kelly, Sr. J.


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.



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").*fn1 (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"),*fn2 from standards promulgated by a SSO, Third Generation Partnership Project ("3GPP").*fn3 (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.*fn4

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*fn5 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.*fn6 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 updates are 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 accepted work items. (Id. ¶ 27.) Each TSG is broken down into one or more Working Groups that perform the technical work of evaluating proposed work items and developing the draft Specification. (Id.) The several Working Groups meet in Plenary sessions to determine the content of each Specification. (Id.) According to TruePosition, Working Groups may meet separately or in conjunction with the TSG Plenary meetings. (Id. ¶ 28.) The TSG that is primarily responsible for development of standards pertaining to mobile device positioning is the RAN TSG. (Id.) The RAN TSG has five Working Groups, RAN1 through RAN5. (Id.)

Each TSG has a Chairman and generally three Vice Chairmen, and each Working Group has a Chairman and generally two Vice Chairmen. (Id. ¶ 29.) TruePosition alleges that the position of Chairman is "extraordinarily powerful" in determining what technologies will be included in the Specification and that Chairmen effectively control the entire process of inclusion into the Specification and, therefore, the standard. (Id.) With this power, alleges TruePosition, also comes the potential for abuse, especially because Chairmen and Vice Chairmen positions are most often filled by major players in the telecommunications equipment market, including the Corporate Defendants. (Id. ¶¶ 29-30.)

TruePosition alleges that 3GPP has adopted "due process policies, procedures, and rules with respect to the development of 3GPP standards so as to ensure fairness in the process and compliance with antitrust and other laws (the "SSO Rules")." (Id. ¶ 31.) TruePosition alleges that the SSO Rules include the following requirements:

a. Technologies provided for in existing standards should be provided for in future standards, particularly where the technologies already have been deployed and are clearly applicable to the future work. See 3GPP Scope and Objectives for Third Generation Partnership Project Agreement at 2.3 (Aug. 31, 2007).

b. Technical work should proceed in a transparent manner according to specific rules and procedures. ETSI Guidelines for Antitrust Compliance, C.2.1.-C.2.2.

c. Chairmen are responsible to conduct meetings in accordance with policies and procedures; to maintain strict impartiality and act in the interests of the organization and its members; and not to conduct these procedures so as to bias or favor the business interests of a company they represent. See, ETSI Technical Working Procedures, 1.3.3; ETSI Guidelines for Antitrust Compliance, D.1.2 and D.1.4; 3GPP Working Procedures, Art. 23.

d. Technical contributions on which decisions will be based must be distributed to the Working Group members well in advance of meetings. See 3GPP Working Procedures, Art. 25.

e. The 3GPP specifications must provide technology options to satisfy regulator requirements of one or more nations or regions, without debate over the inclusion or rejection of such options. See 3GPP Working Procedures, Art.

3. (Id. ¶ 31(a)-(e).)*fn7 TruePosition further alleges that representatives of the Corporate Defendants held Chairmen and Vice Chairmen positions of the RAN TSG and Working Groups that made decisions concerning the standardization of its UTDOA positioning technology. (Id. ¶ 32.) Moreover, TruePosition alleges that the representatives abused the authority of these positions to "highjack" the standardization process to advance their companies' shared business interests by accelerating standardization of the technologies in which they held financial interests, and by impeding the standardization of UTDOA positioning technology for LTE networks. (Id.) According to the Complaint, this was specifically the case in standalone LMUs, which the Corporate Defendants viewed as a competitive threat. (Id.)

4. TruePosition's Entry into the Positioning Market

TruePosition alleges that RAN equipment is situated on cellular telephone towers and connects the mobile device handset to the mobile phone network. (Id. ¶ 33.) TruePosition further alleges that Ericsson and ALU are the largest RAN vendors and are without close competition in the United States. (Id. ¶ 34.) RAN equipment is manufactured to meet standards intended to enable handset and network equipment from different vendors to interoperate with RAN equipment. (Id. ¶ 35.) TruePosition alleges that, in the late 1990s, ETSI introduced a standard for 2G mobile telecommunications technology known as Global System for Mobile Telecommunications ("GSM"), for which later standards were developed by 3GPP. (Id. ¶¶ 36-37.) TruePosition further alleges that the initial GSM release included several positioning technologies, Uplink Time of Arrival ("UL-TOA")*fn8 and Enhanced Observed Time Difference ("E-OTD").*fn9 Apparently, the GSM market at that time was dominated by RAN vendors, including Ericsson, who favored E-OTD. (Id. ¶ 38.) TruePosition offers two possible explanations for the RAN vendors' favoritism of E-OTD: (1) they held patents essential to EOTD and stood to receive substantial royalties; and (2) they could incorporate E-OTD into their RAN equipment, thereby eliminating competition from third party vendors. (Id.) UL-TOA was ultimately not picked up by carriers and was dropped from the 2000-2001 Releases of the ETSI GSM standard. (Id. ¶ 39.)

In 2001-2002, the E-OTD technology offered by Ericsson and other RAN vendors proved to be a failure because it did not meet FCC regulatory requirements.*fn10 (Id. ¶ 40.) As a result, major U.S. carriers that invested heavily in GSM RAN equipment required an alterative solution that would fulfill the FCC requirements. (Id.) However, no ETSI standard specified the method for interoperability with UL-TOA or UTDOA technology because those technologies had been dropped. (Id. ¶ 47.) TruePosition created a "work around" solution so that its LMUs could obtain from the GSM RAN equipment the information necessary to calculate a position. (Id. ¶ 48.) While this solution fulfilled the FCC requirements, it was costly for carriers. (Id. ¶ 49.) Accordingly, the carriers requested their RAN vendors join with TruePosition in a study group to create a standard interface for TruePosition's LMUs to interoperate with the RAN equipment. (Id.) Faced with this demand from the carriers, a study group was formed and it quickly formulated a standard that was submitted to ETSI within a year. (Id.) By 2004, UTDOA was included in the ETSI standard for GSM, including TruPosition's standalone LMUs. (Id.) In 2004, in response to a major U.S. carrier's request to interface TruePosition LMUs with Universal Mobile Telecommunications System ("UMTS"),*fn11 another study group was formed and UTDOA was incorporated in the 3GPP standard for UMTS, including TruePosition's standalone LMUs. (Id. ¶ 50.) As a result of the foregoing activities, UTDOA in standalone LMUs is currently supported in the 3GPP GSM and UMTS standards, and TruePosition has successfully marketed UTDOA-based standalone products. (Id. ¶ 51.)

Despite the commercial success of UTDOA with 3G technologies, TruePosition alleges that Defendants have conspired to "unlawfully exclude[] UTDOA and standalone LMU implementations from any 3GPP Release for LTE systems." (Id. ¶ 52.) TruePosition further alleges that this conspiracy foreclosed competition in the relevant positioning and RAN equipment markets and injured it by preventing it from marketing its innovative standalone LMU products. (Id.)


Throughout its lengthy Complaint, TruePosition alleges numerous acts and omissions on the part of the Corporate Defendants that it characterizes as "anticompetitive" and that it alleges are evidence of a conspiracy to wrongfully exclude UTDOA from Release 9.*fn12 Most of the alleged anticompetitive conduct took place within RAN Plenary meetings or TSG Working Groups. The first instance of such conduct is the allegedly improper exclusion of UTDOA from 3GPP's Release 9 of the LTE systems. (Id. ¶ 62.) According to TruePosition, under 3GPP's procedures and practices, technology that was previously included in a standard (i.e., UTDOA), should have automatically been carried forward in subsequent Releases and UTDOA's exclusion from the standard can only be explained by the existence of a conspiracy between the Corporate Defendants to exclude it.*fn13 (Id. ¶¶ 63-64.)

TruePosition alleges that Qualcomm improperly submitted a work item that was cosponsored by ALU and Ericsson at a RAN Plenary, held in Athens, Greece, in December of 2008 ("2008 Work Item"). (Id. ¶ 65.) The 2008 Work Item proposed to include positioning technologies in the LTE standard, incorporating OTDOA and expressly excluding UTDOA. (Id.) TruePosition further alleges that the work item was submitted well beyond the deadline for making technical submissions and that it was intentionally deprived of any meaningful opportunity to review or object to it. (Id. ¶¶ 67-68.) Moreover, TruePosition alleges that the late submission was not only accepted but also made the sole topic of discussion at the Plenary under the leadership of the Chair of the RAN Plenary - an ALU employee. (Id. ¶ 67.)

TruePosition alleges that it was again subjected to unlawful conduct at the next RAN Plenary, held in Biarritz, France, which occurred in March of 2009. (Id. ¶ 69.) At this RAN Plenary, TruePosition submitted a proposal to add UTDOA to the existing work item on positioning, which had been assigned to the RAN2 Working Group. (Id.) However, according to TruePosition, a representative of Ericsson insisted that evaluation of UTDOA be assigned to RAN1, allegedly because the same Ericsson representative was the Chairman of RAN1 and could ensure that UTDOA standardization would be delayed while OTDOA gained a substantial "headstart" in the standardization process. (Id. ¶¶ 69-70.) As a result of the proposal's assignment to RAN1, UTDOA was pushed into a separate work item. (Id. ¶ 70.)

TruePosition further alleges that, when its proposal was finally taken under consideration in RAN1, the RAN1 Chairman/Ericsson representative imposed "double standards" against UTDOA. (Id. ¶ 71.) First, the RAN1 Chairman required TruePosition to prove that UTDOA would deliver added benefits over other technologies to be considered for inclusion in the LTE standard. (Id. ¶ 70a.) Second, the RAN1 Chairman delayed evaluation of the UTDOA proposal for three months, allegedly to ensure OTDOA a solid "headstart" in the standardization process. (Id. ¶ 70b.) TruePosition alleges a host of other acts by the Corporate Defendants within the RAN1 Working Group including: (1) shuffling evaluation of UTDOA inclusion proposal between RAN Work Groups under the control of one or more of the Corporate Defendants (Id. ¶ 78); (2) imposing discriminatorily high technical performance demands on UTDOA (Id. ¶ 80); and (3) submitting sham simulation reports on the performance ability of UTDOA at a Plenary held in Jeju, South Korea. (Id. ¶ 80e).

Allegedly, at the March 2010 Plenary, held in Vienna, Austria, due to the controversy surrounding UTDOA's performance ability generated by the "sham" simulation results, UTDOA was not included in the Specifications for Release 9 and was pushed back to Release 10. (Id. ¶¶ 81-82.) Several months after the decision to push UTDOA back to Release 10, OTDOA officially became a part of Release 9 in June of 2010. (Id. ¶ 82.)

According to the allegations of the Complaint, the Corporate Defendants were not satisfied by UTDOA's exclusion from Release 9 and continued in their conspiratorial efforts to thwart UTDOA's standardization at a September 2010 RAN Plenary held in San Antonio, Texas. (Compl. ¶¶ 83-84.) TruePosition alleges that Ericsson was an especially vocal objector to UTDOA's standardization at that Plenary. (Id.) Ericsson allegedly continued to press for UTDOA simulations that would be conducted under more rigorous standards than other positioning technology and it spoke out strongly against moving UTDOA from the preliminary evaluation phase in RAN1 to the specification work of RAN2 and RAN3. (Id.) TruePosition also alleges that the Ericsson representative improperly attended planning meetings of the RAN Group leadership even after its RAN1 Chairmanship ended to lobby the leadership to delay and prejudice the standardization of UTDOA. (Id. ¶ 85.)

At an October 2010 RAN1 Working Group meeting held in Xi'an, China, TruePosition alleges that ALU and Ericsson "persisted in their joint efforts to stymie progress on UTDOA." (Id. ΒΆ 86.) At this meeting, it is alleged that TruePosition presented simulation results, which it timely submitted prior to the meeting. (Id.) However, shortly after TruePosition's presentation, TruePosition asserts that Ericsson informed the ALU Chair that it posted its own revised contribution just moments earlier, which the ALU Chair accepted in violation of 3GPP Rules. (Id.) TruePosition alleges that Ericsson surreptitiously included a new "Way Forward" in its contribution outlining a new process for future evaluations and standardization that ...

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