Corporate & Securities Law

Vizio Files Monopolization Suit Against Funai

This looks like an interesting suit involving antitrust, patents, and standard setting:

VIZIO, Inc., America’s HDTV Company, announced today that it has filed an antitrust and unfair competition lawsuit in the United States District Court, Central District of California, against Funai Electronics Co., Ltd., a Japanese distributor of digital televisions and related components. In the suit, VIZIO, a U.S. company based in Irvine, California, alleges that its competitor, Funai, acting alone and in concert with others, unlawfully restrained trade and monopolized the market for the licensing of technology used to interpret and retrieve information from a digital television broadcast signal, as well as the market for digital television sets and receivers.  In the federal complaint, VIZIO alleges that Funai unlawfully acquired the rights to U.S. patent No. 6,115,074 (the “‘074 patent”), which is subject to a standards setting organization overseeing digital television manufacturers, and has since unlawfully and unfairly discriminated against VIZIO in the licensing and enforcement of the ‘074 patent, to the detriment of trade and commerce. VIZIO’s suit alleges that, in so doing, Funai has violated the federal Sherman Antitrust Act, the Clayton Act, and numerous provisions of California’s unfair competition and antitrust laws.

“VIZIO, as America’s HDTV Company, has been instrumental in making high quality flat panel TVs more affordable for Americans. Especially in light of the nation’s digital TV transition, we won’t allow a foreign competitor to divert us from our mission to bring affordable high quality HDTVs to millions of Americans,” stated Laynie Newsome, VIZIO Co-Founder and VP Sales & Marketing Communications.  VIZIO’s antitrust suit against Funai follows news yesterday that the International Trade Commission (”ITC”) has invalidated a related patent that Funai had attempted to enforce against VIZIO (U.S. patent 5,329,369), and decided to review an administrative law judge’s prior decision that VIZIO infringed on a portion of the ‘074 patent.

Interesting.  Tangentially, I do wonder if VIZIO’s slightly xenophobic press release is the right way to go here.

For more on standard setting and antitrust, see Kobayashi and Wright on Federalism, Substantive Preemption and Limits on Antitrust: An Application to Patent Holdup, forthcoming in the Journal of Competition Law and Economics.

Full post as published by Truth on the Market on February 15, 2009 (boomark / email).