Matsushita Electrical Industrial Co., Ltd. v. Cinram International, Inc.

299 F. Supp. 2d 370 (2004)

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Matsushita Electrical Industrial Co., Ltd. v. Cinram International, Inc.

United States District Court for the District of Delaware
299 F. Supp. 2d 370 (2004)

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Facts

Matsushita Electrical Industrial Co., Ltd. (MEI) (plaintiff) held patents relating to the manufacture of DVDs. MEI created the 6C patent pool with five other companies, all of which also held DVD-related patents. Each member of the pool contributed one or more of its DVD patents, and the members collectively agreed to offer a nonexclusive license to the pooled patents to nonmember companies interested in replicating DVDs in compliance with 6C’s standards. Potential licensees could also negotiate with 6C members to obtain individual licenses for their patents. MEI and the 6C members publicized nonlicensees’ ability to negotiate individual licenses through letters, press releases, brochures, and in the application form for a 6C pool license. Cinram International, Inc. (defendant), one of MEI’s competitors in the DVD space, engaged in some communications with the 6C pool, with one of Cinram’s executives attending a 6C presentation at which the executive was informed that Cinram could negotiate individual licenses. MEI also provided Cinram with letters and other written documentation detailing Cinram’s ability to negotiate with 6C or its members individually. Later, MEI sued Cinram for patent infringement, and Cinram filed counterclaims, asserting that the 6C patent pool unreasonably restrained trade in violation of Sherman Act §§ 1 and 2. Cinram claimed that MEI purposefully delayed responding to inquiries about individual patent licenses and that individual licenses were too expensive, making negotiating a pool license from 6C Cinram’s only realistic option. MEI filed a motion for summary judgment, arguing that there was no genuine issue of material fact regarding whether individual licenses were a realistic alternative to the 6C pool license. MEI pointed to its efforts to communicate with Cinram about its ability to negotiate with 6C members on an individual basis. MEI also argued that although the 6C pool license was cheaper than negotiating individual licenses, the individual licenses were priced reasonably compared to the value of the intellectual-property rights being conveyed.

Rule of Law

Issue

Holding and Reasoning (Robinson, C.J.)

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