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

October 4, 2012

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.



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

MEMORANDUM

Presently before the Court is the Motion to Dismiss Plaintiff TruePosition, Inc.'s ("TruePosition") Amended Complaint by Defendant Third Generation Partnership Project a/k/a 3GPP ("3GPP"), TruePosition's Response in Opposition to 3GPP's Motion to Dismiss, as well as 3GPP's Reply Brief. For the reasons provided below, the Motion to Dismiss will be denied.

I. BACKGROUND *fn1

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"). (Am. Compl. ¶¶ 1-9.) TruePosition describes itself as a "leading innovator in developing and marketing high accuracy location products that operate over cellular telecommunications networks." (Id. ¶ 3.) TruePosition alleges that LM Ericsson Telephone Company (Telefonaktiebolaget LM Ericsson), Qualcomm, Inc. and Alcatel-Lucent USA, Inc. (collectively, the "Corporate Defendants") abused their positions of authority within 3GPP by violating its rules and procedures in order to conspire to exclude TruePosition's positioning technology, *fn2 Uplink Technology ("UTDOA"), from the newest and most advanced 4th generation ("4G") global standard for mobile telecommunications technologies, known as Long Term Evolution ("LTE"). (Id. at ¶ 1.) This global standard is created by 3GPP, a SSO, which "establishes global standards for mobile communications technologies, including mobile phone location technologies." *fn3 (Id.)

According to TruePosition, "[m]ore than 55 million cellular callers in the United States each year are located by TruePosition products, assisting police, fire, and ambulance services in saving lives and enabling law enforcement to combat criminal activity and terrorist threats." (Id. at ¶ 3.) In the United States, the Federal Communications Commission ("FCC") has set regulatory requirements mandating that all mobile voice networks be able to locate 911 callers. (Id.) UTDOA, TruePosition's positioning technology, "has been successfully deployed on more than 90,000 cell tower sites in the United States to meet FCC requirements." (Id.) TruePosition states that "inclusion in the 3GPP standard is vital to commercial success" because "[e]xclusion from the standard guarantees commercial failure and, in most instances, absolute foreclosure from the market." (Id. ¶ 4.)

TruePosition alleges that all of the Defendants' actions violated federal antitrust law, specifically Section 1 of the Sherman Act, 15 U.S.C. § 1. *fn4 (Id. ¶¶ 139-153.) The Corporate Defendants jointly moved to dismiss the Amended Complaint in its entirety. On August 21, 2012, this Court issued a Memorandum Opinion and Order denying the motion deciding that the Amended Complaint plausibly states a claim against the Corporate Defendants for violation of Section 1 of the Sherman Act under the dismissal standard announced in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and clarified in Ashcroft v. Iqbal, 556 U.S. 662 (2009). 3GPP now moves for dismissal of the Amended Complaint arguing that TruePosition has failed to state a claim against it for which relief can be granted. *fn5 We deny 3GPP's Motion to Dismiss concluding that dismissal is not warranted at this time.

II. LEGAL STANDARD

Pursuant to Federal Rule of Civil Procedure 12(b)(6), a complaint may be dismissed for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). When reviewing a motion to dismiss pursuant to Rule 12(b)(6), the complaint must be construed in the light most favorable to the plaintiff. Burtch v. Milberg Factors, Inc., 662 F.3d 212, 220 (3d Cir. 2011) (citing In re Ins. Brokerage Antitrust Litig., 618 F.3d 300, 314 (3d Cir. 2010)). Federal Rule of Civil Procedure 8(a)(2) requires "only 'a short and plain statement of the claim showing the pleader is entitled to relief' in order to 'give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'" Twombly, 550 U.S. at 555 (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)).

"[A] plaintiff's obligation to provide the grounds of his entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of the cause of action will not do." Twombly, 550 U.S. at 555. In Twombly, the United States Supreme Court "set forth the 'plausibility' standard for overcoming a motion to dismiss and refined the approach in Iqbal." Burtch, 662 F.3d at 220 (citing Twombly, 550 U.S. at 557; Iqbal, 556 U.S. at 680). In other words, Rule 8 requires that a complaint contain factual allegations that, taken as a whole, render the plaintiff's entitlement to relief plausible. W. Penn Alleg. Health Sys., Inc. v. UPMC, 627 F.3d 85, 98 (3d Cir. 2010). "This 'does not impose a probability requirement at the pleading stage,' but instead 'simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element.'" Id. (quoting Phillips v. County of Alleg., 515 F.3d 224, 234 (3d Cir. 2008); Twombly, 550 U.S. at 556).

When deciding the sufficiency of a complaint "courts should disregard the complaint's legal conclusions and determine whether the remaining factual allegations suggest that the plaintiff has a plausible - as opposed to merely conceivable - claim for relief." Id. (citing Iqbal, 129 U.S. at 1949-50; Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009)). Under both Twombly and Iqbal, a court must take the following three steps in order to determine the sufficiency of a complaint:

First, the court must take note of the elements a plaintiff must plead to state a claim. Second, the court should identify the allegations that, because they are no more than conclusions, are not entitled to the assumption of truth. Finally, where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement of relief.

Burtch, 662 F.3d at 221 (quoting Santiago v. Warminster Twp., 629 F.3d 121, 130 (3d Cir. 2010)). "It is, of course, true that judging the sufficiency of a pleading is a context-dependent exercise." W. Penn, 627 F.3d at 98 (citing Iqbal, 129 S. Ct. at 1950; Twombly, 550 U.S. at 567-68; Phillips, 515 F.3d at 232).

III. DISCUSSION

Section 1 of the Sherman Act states that "[e]very 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 hereby declared to be illegal." 15 U.S.C. ยง 1. Under Section 1 of the Sherman Act, a plaintiff must plausibly allege the following three elements: (1) an agreement; (2) imposing an unreasonable restraint of trade within a relevant product market; and (3) resulting in antitrust injury, that is "injury of the type the ...


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