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Ritz Camera & Image, LLC v. Sandisk Corporation

Summarized by: 

Date Filed: 11-20-2012
Case #: 2012-1183
Bryson, Dyk, Moore
Full Text Opinion: http://scholar.google.com/scholar_case?case=8075920634024442399&hl=en&as_sdt=2&as_vis=1&oi=scholarr

Patents: Parties that purchase patented goods have standing to assert a Walker Process antitrust claim against the patentee, alleging the patent was obtained by fraud on the PTO.

Opinion (Bryson): SanDisk holds patents on NAND technology, which it uses to manufacture flash memory. SanDisk also licenses the patents to other manufacturers, and allegedly controls about three-quarters of the NAND market. A retailer, Ritz Camera & Image, LLC (“Ritz”) purchases flash memory from Sandisk and its licensees. Ritz filed suit alleging that Sandisk had fraudulently obtained the #338 and #517 patents by failing to disclose prior art and by making affirmative misrepresentations to the PTO. Ritz also alleged SanDisk created a monopoly by enforcing these patents against competitors, leading to inflated prices. Because Ritz was only a purchaser of flash memory, and not a competitor, SanDisk moved to dismiss the complaint. SanDisk alleged Ritz faced no threat of patent infringement action, and therefore lacked sufficient standing to take patent declaratory action. The trial court granted SanDisk’s motion to dismiss in part, and SanDisk sought interlocutory appeal. The Court of Appeals found that the rules for patent standing do not dictate the rules for antitrust standing. SanDisk further protested that allowing direct purchasers to bring Walker Process anti-trust challenges would amount to an end-run around the patent laws. The Court disagreed, stating that the fraudulent procurement of a patent was but one element of the antitrust claim, and the action does not directly seek the patent’s annulment. Ritz did have standing to pursue its Walker Process claim. Judgment was AFFIRMED.