Sony Electronics, Inc. v. Soundview Technologies

• Decision Date: 28 August 2003
• Docket Number: No. 3:00CV754 (JBA).,3:00CV754 (JBA).
• Citation: 281 F.Supp.2d 399
• Court: Connecticut Supreme Court
• Parties: SONY ELECTRONICS, INC., et al. v. SOUNDVIEW TECHNOLOGIES, INC.

281 F.Supp.2d 399

SONY ELECTRONICS, INC., et al. v. SOUNDVIEW TECHNOLOGIES, INC.

No. 3:00CV754 (JBA).

United States District Court, D. Connecticut.

August 28, 2003.

Jacqueline D. Bucar, S. Peter Sachner, Timothy P. Jensen, Tyler, Cooper & Alcorn, New Haven, CT, Richard L. DeLucia, Richard S. Gresalfi, Elizabeth A. Gardner, Thomas R. Makin, Kenyon & Kenyon, New York, NY, Gary M. Hoffman, Kenneth W. Brothers, Jorge Kotelanski, Dickstein, Shapiro, Morin & Oshinsky, Washington, DC, Richard M. Steuer, Mayer Brown Rowe & Maw LLP, New York, NY, Jaime A. Siegel, Park Ridge, NJ, Stephen P. Sachner, Sachner & O'Connor, Middlebury, CT, for plaintiffs.

Amy S. Owen, Miles & Stockbridge, McLean, VA, Garrard Russ Beeney, Jeffrey Scott, Sullivan & Cromwell, John M. DiMatteo, Michael Stacchini, Neal Feivelson, Patterson, Belknap, Webb & Tyler, New York, NY, James Sicilian, Eric L. Sussman Day, Berry & Howard, Hartford, CT, for consolidated plaintiffs.

Joseph L. Clasen, Robinson & Cole, Stamford, CT, John J. Bogdanski, David S. Monastersky, Howd & Ludorf, Amy S. Owen, Miles & Stockbridge, McLean, VA, Raymond P. Niro, Paul C. Gibbons, John C. Janka, Robert P. Greenspoon, Niro, Scavone, Haller & Niro, Eugene M. Cummings, David M. Mundt, Cook, Alex, McFarron, Manzo, Chicago, IL, John-Henry McKim Steele, Middlefield, CT, Kenneth A. Votre, Hurwitz, Cooper, Silverman & Votre, New Haven, CT, for defendant.

Richard M. Steuer, Mayer Brown Rowe & Maw LLP, New York, NY, Michael S. Culver, Oliff & Berridge, Alexandria, VA, John E. Coffey, Reed, Smith, Hazel & Thomas, Falls Church, VA, for consolidated defendants.

Jacqueline D. Bucar, S. Peter Sachner, Timothy P. Jensen, Tyler, Cooper & Alcorn, New Haven, CT, Richard L. DeLucia, Richard S. Gresalfi, Elizabeth A. Gardner, Thomas R. Makin, Kenyon & Kenyon, New York, NY, Gary M. Hoffman, Kenneth W. Brothers, Jorge Kotelanski, Dickstein, Shapiro, Morin & Oshinsky, Washington, DC, Richard M. Steuer, Mayer Brown Rowe & Maw LLP, New York, NY, Jaime A. Siegel, Park Ridge, NJ, Stephen P. Sachner, Sachner & O'Connor, Middlebury, CT, Joseph L. Clasen, Robinson & Cole, Stamford, CT, John J. Bogdanski, David S. Monastersky, Howd & Ludorf, Amy S. Owen, Miles & Stockbridge, McLean, VA, Raymond P. Niro, Paul C. Gibbons, John C. Janka, Robert P. Greenspoon, Niro, Scavone, Haller & Niro, Eugene M. Cummings, David M. Mundt, Cook, Alex, McFarron, Manzo, Chicago, IL, John-Henry McKim Steele, Middlefield, CT, Kenneth A. Votre, Hurwitz, Cooper, Silverman & Votre, New Haven, CT, for counter-defendant.

William M. Bloss, Alinor Clemans Sterling, Jacobs, Grudberg, Belt & Dow, P.C., New Haven, CT, U.S. Mickey Gill, Nixon & Vanderhye, Arlington, VA, Richard M. Steuer, Mayer Brown Rowe & Maw LLP, New York, NY, Michael S. Culver, Oliff & Berridge, Alexandria, VA, Jacqueline D. Bucar, S. Peter Sachner, Timothy P. Jensen, Tyler, Cooper & Alcorn, New Haven, CT, Richard L. DeLucia, Richard S. Gresalfi, Elizabeth A. Gardner, Thomas R. Makin, Kenyon & Kenyon, New York, NY, Gary M. Hoffman, Kenneth W. Brothers, Jorge Kotelanski, Dickstein, Shapiro, Morin & Oshinsky, Washington, DC, Richard M. Steuer, Mayer Brown Rowe & Maw LLP, New York, NY, Jaime A. Siegel, Park Ridge, NJ, Stephen P. Sachner, Sachner & O'Connor, Middlebury, CT, for counter-claimants.

Ruling on Motion for Summary Judgment [Doc. # 442]

ARTERTON, District Judge.

The Court granted summary judgment of non-infringement in favor of Sony and other television manufacturers ("the Non-Soundview Parties"), concluding that there was no genuine issue of material fact for trial and the Non-Soundview Parties were entitled to judgment as a matter of law on their assertion that the parental control feature of the televisions they manufacture does not infringe Soundview's patent on a similar parental control feature. See Sony Elecs., Inc. v. Soundview Techs., Inc., 225 F.Supp.2d 164 (D.Conn.2002). Specifically, the Court determined that the separate rating signal lines for each possible program content rating required by Soundview's patent were not present in any of the accused televisions, which used processors with either 8- or 16-bit internal data buses and had no set of lines or conductors in which each line corresponded to one rating. Id. at 176-177. The Non-Soundview Parties have now moved for summary judgment on Soundview's antitrust and unfair trade practices counterclaims, asserting that these claims fail as a matter of law in light of the summary judgment of non-infringement. For the reasons set out below, the Court agrees.

I. Background

Soundview's antitrust counterclaims assert that the Non-Soundview Parties (pejoratively termed "the R4.3 cartel" by Soundview) engaged in a conspiracy to fix licensing fees for Soundview's patent and to refuse to deal with Soundview altogether. See Sony Elecs., Inc. v. Soundview Techs., Inc., 157 F.Supp.2d 180, 181-183 (D.Conn.2001). The Court denied the Non-Soundview Parties' motion to dismiss, concluding that "the counterclaims adequately allege the requisite elements of an antitrust violation, including antitrust injury, and that the conduct alleged in those counterclaims is not protected by the First Amendment." Id. at 190. Soundview's opposition to the instant motion for summary judgment relies heavily on this conclusion and asserts that nothing has transpired that would change the antitrust analysis or adversely affect the validity of its counterclaims:

Just one thing has changed in the sixteen months since [the ruling denying the motion to dismiss]: one (and only one) of the forty-three patents against whom the R4.3 cartel's conspiracy was directed was found not to be infringed— and that ruling is limited to televisions manufactured by Sharp, Toshiba and Mitsubishi. * * * [T]he remaining forty-two patents ... still threaten the R4.3 cartel. That cartel remains just as active now as it was sixteen months ago, even though this Court's July 16, 2001 decision drove its activities underground.

Mem. Opp'n [Doc. # 444] at 2-3.

The important change omitted by Soundview, however, is the procedural posture of this motion: Soundview cannot rest on the allegations in its pleadings in the face of a properly-supported motion for summary judgment. See generally Fed. R.Civ.P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). As the movants have pointed to Soundview's absence of evidence that "any television sold in the United States contains V-chip functionality having separate rating signal lines as required by the '584 patent," Mem. Supp. [Doc. # 443] at 2 n. 3, and Soundview has failed to come forward with evidence showing that a jury could find in its favor on that point, it is established for summary judgment purposes that no television manufacturer in the United States (including the Non-Soundview Parties) manufactures a product which would require licensing of Soundview's patent. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ("there is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party"); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ("Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial.") (citation and internal quotation omitted). This conclusion is, of course, predicated on the Court's earlier claim construction.

In summary, at the summary judgment stage, Soundview can only prevail if it is correct in its legal theory that a patent holder is entitled to an antitrust remedy from a price-fixing cartel which refused to license its patent even though no television manufacturer produces a product requiring a license under the patent. The Court concludes that no recovery is permitted under such circumstances, as the patent holder Soundview cannot establish all the necessary elements of an antitrust claim.

II. Analysis

A. Antitrust

In addition to proving the substance of its antitrust claim, a private plaintiff must establish four elements of antitrust standing:

(1) that the acts violating the antitrust laws caused—or, in an equity case, threatened to cause—the private plaintiff injury in fact to its business or property; (2) that this injury is not too remote or duplicative of the recovery of a more directly injured person; (3) that such recovery is "antitrust injury," which...