Legal Journals

J. Whyte Navigates GPS Patent Tying Case.

Tele Atlas NV v. NAVTEQ, 5:05-CV-1673 (N.D. Cal. 10/28/2008).

To win share in the dashboard GPS device market requires functional software and up-to-date mapping data.  With both, men need never to stop and ask directions.
Allegedly, Navteq tied licenses for key map display patents with purchases of its map databases. Judge Whyte’s decision charts the gauntlet against an antitrust plaintiff in the NDCal.  Rigor is added by the burden of production, and of proving a competitor’s private sales conduct, as well as, actual or threatened impacts on the marketplace, and on customers.  Although Tele-Atlas plausibly could prove tying, it lacked evidence of market power by Navteq.
On the front end, challenges to ’sur-rebuttal’ expert opinion, and to hearsay in Rule 56 affidavits were decided.  A 2005 case management order “determined which party gets to have the last word on expert testimony,” and it was enforced, against plaintiff, to bar expert opinion on market power - the issue on which Tele-Atlas came up short.  Navteq?s summary judgment motion prompted Tele-Atlas to move for leave to file a further expert report.  That “change of heart,” when plaintiff “realized it had failed to produce evidence on” essential points was one ground to deny leave.  CMO deadlines, like the NDCal limits on preliminary infringement or validity contentions, are treated seriously and can foreclose later-refined factual and legal theories.
Difficulties discovering marketplace facts can leave an antitrust plaintiff with a too-thin, pretrial evidential showing.  Parties are reluctant to target coveted customers depositions.  Tele-Atlas argued for an “indulgent” reading of affidavits that recounted hearsay statements from non-party deponents who were tight-lipped about the alleged tying.  The “indulgent” view was rejected along with “many of the exhibits? that were ?flagrant hearsay” that was “polluting the record.” Judge Whyte did ?sympathize[] with the difficult decision” to compel customers to testify fully.
At its heart, the contest was over multiple intangibles - patent scope, licensed data, perceived tying, and market power - all conceptually definable, but existent only as legal constructs.  The tying claim was weakened by an express permission in the patent license to use map data from other sources.  Even so, marketplace perceptions “that a tying condition exists,” where the “belief stems from the seller’s conduct,” can prove that “a tying condition” existed.  Navteq?s suits against users of un-licensed data, and none against licensed purchasers of its mapping data was just enough for the tying allegations to survive the motion.
Next, Tele-Atlas argued that licensing patents and mapping data conferred “market power” on Navteq, but those facts were not enough to show “that Navteq possessed the power to manipulate price or output.”  Tele-Atlas could not rely on the late-submitted expert opinion on market share.  Last, the Judge felt that Tele-Atlas should have developed evidence “that the personal navigation devices on the market infringe” the licensed patents, which might bear on “how Navteq could exclude competition or control quantity …or price.”
In toto, what Tele-Atlas offered was not “sufficient evidence that Navteq possesses market power,” and as a result, summary judgment was granted against the antitrust plaintiff. 

-By Guest blawger, Lee Thomason - patent attorney & litigator in the Southeast is blawging here while preparing to teach IP law courses next year.

Full post as published by Tech Law Forum on November 24, 2008 (boomark / email).