In TruePosition Inc. v. LM Ericsson Telephone Co. et al., Eastern District of Pennsylvania Judge Robert F. Kelly refused to dismiss TruePosition Inc.’s antitrust suit against Qualcomm Inc., LM Ericsson Telephone Co., and Alcatel-Lucent SA. TruePosition accused the defendants of conspiring to use their influence within two standard setting organizations (SSOs), the European Telecommunication Standards Institute and Third Generation Partnership Project (3GPP), to prevent the adoption of TruePosition’s technology into the standards set for 4G wireless networks.
3GPP moved to dismiss, arguing that at most, 3GPP may be guilty of inaction, since TruePosition failed to show that the SSO conspired with Qualcomm, Ericsson, and Alcatel. TruePosition countered that 3GPP was liable not because of its inaction, but because Qualcomm, Ericsson, and Alcatel executives acted as organization representatives. The court agreed with TruePosition, holding that the majority of the allegations specifically involve the actions of the corporate defendants as chairmen of 3GPP’s committees thwarting and using its standardization process to disadvantage a competitor. And because of their apparent authority as chairmen of pertinent 3GPP subcommittees, the corporate defendants were supposedly able to abuse 3GPP’s standardization process. The court further held that the 3GPP cannot consider itself as separate and distinct from the actions of the corporate defendants when they were acting with 3GPP’s apparent authority. According to the decision, an SSO “cannot avoid liability by ensuring that it remains ignorant of its agents’ conduct and the antitrust laws because it would encourage an SSO to do as little as possible to oversee its agents, resulting in an increasing likelihood that a SSO’s reputation would be used for anticompetitive ends.”