No. 14-641

IN THE

Supreme Court of the United States

ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

BRIEF IN OPPOSITION

SD-3C, LLC; PANASONIC CORPORATION; PANASONIC CORPORATION OF NORTH AMERICA;

TOSHIBA CORPORATION; TOSHIBA AMERICA ELECTRONICS COMPONENTS, INCORPORATED;

SANDISK CORPORATION,

Petitioners,

v.

DAN OLIVER, et al.,

Respondents.

MAX L. TRIBBLE JR.JOSEPH S. GRINSTEIN*ERIC J. MAYER

SUSMAN GODFREY L.L.P.1000 Louisiana, Suite 5100Houston, TX 77002(713) 651-9366jgrinstein@susmangodfrey.com

MARC M. SELTZER

AMANDA K. BONN SUSMAN GODFREY L.L.P.1901 Avenue of the StarsSuite 950Los Angeles, CA 90067(310) 789-3100

THOMAS H. BRILL

LAW OFFICE OF THOMAS H. BRILL

8012 State Line Road, Suite 102Leawood, KS 66208(913) 677-2004

February 27, 2015

Counsel for Respondents

*Counsel of Record

i

QUESTION PRESENTED

Whether the court of appeals erred when it reversed the district court’s dismissal under Federal Rule of Civil Procedure 12(b)(6) of a claim for injunctive relief for violations of § 1 of the Sherman Act, 15 U.S.C. § 1, under the doctrine of laches, where:

1. The complaint alleges that, beginning in August 2006 and continuing through the present, petitioners conspired to fi x what they deemed the “fair market price” of SD Cards, and that respondents purchased such price-fixed SD Cards indirectly from petitioners or their co-conspirators in the four years preceding the complaint, the statutory limitations period on an analogous damages claim, 15 U.S.C. § 15b;

2. Every circuit court to have decided when a cause of action accrues in a price-fi xing case has applied this Court’s precedent that in “a price-fi xing conspiracy that brings about a series of unlawfully high priced sales over a period of years . . . each sale to the plaintiff[] starts the statutory period running again,” Klehr v. A.O. Smith Corp., 521 U.S. 179, 189 (1997); and

3. Petitioners’ argument that laches should nonetheless bar respondents’ federal injunctive relief claim on a Rule 12(b)(6) motion was never raised below and relies on purported equitable considerations that are outside the pleadings.

ii

TABLE OF CONTENTS

Page

QUESTION PRESENTED . . . . . . . . . . . . . . . . . . . . . . . i

TABLE OF CONTENTS. . . . . . . . . . . . . . . . . . . . . . . . . ii

TABLE OF CITED AUTHORITIES . . . . . . . . . . . . . . iv

BRIEF IN OPPOSITION . . . . . . . . . . . . . . . . . . . . . . . . .1

COUNTERSTATEMENT . . . . . . . . . . . . . . . . . . . . . . . .4

REASONS FOR DENYING THE PETITION . . . . . .13

I. THE DECISION BELOW PRESENTS NO CONFLICT WITH THIS COURT’S PRECEDENTS OR ANY CIRCUIT

SPLIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13

A. The Dec is ion Below Cor rect ly Applies This Court’s Decisions in Zenith, Klehr, and Petrella to this

Price-Fixing Case. . . . . . . . . . . . . . . . . . . . .14

B. There Is No Circuit Spl it Over Whether a New Claim and a New Limitations Period Accrue With Each

Price-Fixed Sale . . . . . . . . . . . . . . . . . . . . . .16

C. There Is No Circuit Split in the “Continuing Violation” Cases Petitioners

Raised in Samsung. . . . . . . . . . . . . . . . . . . .18

iii

Table of Contents

Page

D. There Is No Circuit Spl it Over Whether Laches Bars an Injunctive Relief Claim the Plaintiff Would Have Lacked Article III Standing to Raise

Earlier. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

E. There is No Circuit Spl it Over Whether Injunctive Relief Claims Filed within Four Years of Price-Fixed Sales Present “Extraordinary Circumstances” Requiring a Rule

12(b)(6) Dismissal under Laches. . . . . . . . .26

II. THE DECISION BELOW PRESENTS NO ISSUE OF NATIONAL IMPORTANCE C ONCERN I NG PAT EN T P O OLS

OR STANDARD-SETTING . . . . . . . . . . . . . . . .31

III. IN ANY EVENT, THIS CASE IS A POOR VEHICLE FOR RESOLVING

THE QUESTIONS PRESENTED . . . . . . . . . .33

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35

iv

TABLE OF CITED AUTHORITIES

Page

CASES

Al George, Inc. v. Envirotech Corp., 939 F.2d 1271 (5th Cir. 1991). . . . . . . . . . . . . . . . . . . .19

Bridgestone/Firestone Research, Inc. v. Auto. Club, 245 F.3d 1359 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . .28

CE Design Ltd. v. Prism Business Media, Inc., 606 F.3d 443 (7th Cir. 2010), cert. denied, 131 S. Ct. 933 (2011) . . . . . . . . . . . . . . . . . . . . . . . . . . .25

Champagne Metals v. Ken-Mac Metals, Inc., 458 F.3d 1073 (10th Cir. 2006) . . . . . . . . . . . . . . . . . .22

Chirco v. Crosswinds Communities, Inc., 474 F.3d 227 (6th Cir. 2007). . . . . . . . . . . . . . . . . . . . .28

Conopco, Inc. v. Campbell Soup Co., 95 F.3d 187 (2d Cir. 1996) . . . . . . . . . . . . . . . . . . . . . .28

Costello v. United States, 365 U.S. 265 (1961) . . . . . . . . . . . . . . . . . . . . . . . . . . . .26

DXS, Inc. v. Siemens Med. Sys., Inc., 100 F.3d 462 (6th Cir. 1996) . . . . . . . . . . . . . . . . .19, 20

Fair Isaac Corp. v. Experian Info. Solutions, Inc., 650 F.3d 1139 (8th Cir. 2011) . . . . . . . . . . . . . . . . . . . .25

v

Cited Authorities

Page

Friends of the Earth, Inc. v. Laidlaw Env’l Servs. (TOC), Inc., 528 U.S. 167 (2000). . . . . . . . . . . . . . . . . . . . . . . . . . . .24

Funeral Consumers Alliance, Inc. v. Serv. Corp. Int’l, 695 F.3d 330 (5th Cir. 2012). . . . . . . . . . . . . . . . . . . . 25

Grand Rapids Plastics, Inc. v. Lakian, 188 F.3d 401 (6th Cir. 1999). . . . . . . . . . . . . . . . . . . . .22

Illinois Brick v. Illinois, 431 U.S. 720 (1977). . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

In re Cotton Yarn Antitrust Litig., 505 F.3d 274 (4th Cir. 2007). . . . . . . . . . . . . . . . . . . . .17

In re New Motor Vehicles Canadian Export Antitrust Litig., 522 F.3d 6 (1st Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . .25

In re Travel Agent Com’n Antitrust Litig., 583 F.3d 896 (6th Cir. 2009) . . . . . . . . . . . . . . . . . . . .17

In re Wholesale Grocery Products Antitrust Litig., 752 F.3d 728 (8th Cir. 2014). . . . . . . . . . . . . . . 17, 30, 32

Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc.,

677 F.2d 1045 (5th Cir. 1982). . . . . . . . . . .19, 20, 21, 22

vi

Cited Authorities

Page

Kansas v. Colorado, 514 U.S. 673 (1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . .26

Klehr v. A.O. Smith Corp., 521 U.S. 179 (1997) . . . . . . . . . . . . . . . . . . . . . . . passim

Kourtis v. Cameron, 419 F.3d 989 (9th Cir. 2005) . . . . . . . . . . . . . . . . . . . .28

Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992). . . . . . . . . . . . . . . . . . . . . . . . . . . .24

McCray v. Fidelity Nat’l Title Ins. Co., 682 F.3d 229 (3d Cir. 2012), cert. denied, 133 S. Ct. 1242 (2013). . . . . . . . . . . . . . . . . . . . . . . . . .25

Michoud v. Girod, 45 U.S. 503 (1846). . . . . . . . . . . . . . . . . . . . . . . . . . . . .27

Midwest Mach. Co. v. Nw. Airlines, Inc., 392 F.3d 265 (8th Cir. 2004) . . . . . . . . . . . . . . . . 28, 29

Morton’s Market, Inc. v. Gustafson’s Dairy, Inc., 198 F.3d 823 (11th Cir. 1999). . . . . . . . . . . . . . . . . . . .17

Nack v. Walburg, 715 F.3d 680 (8th Cir. 2013), cert. denied, 134 S. Ct. 1539 (2014) . . . . . . . . . . . . . . . . . . . . . . . . . .25

Nat’l Souvenir Ctr., Inc. v. Historic Figures, Inc., 726 F.2d 503 (D.C. Cir. 1984), cert. denied, 469 U.S. 825 (1984). . . . . . . . . . . . . . . . . . . . . . . . . . . .20

vii

Cited Authorities

Page

Pace Indus., Inc. v. Three Phoenix Co., 813 F.2d 234 (9th Cir. 1987) . . . . . . . . . . . . . . . . . . . .19

Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (2014) . . . . . . . . . . . . . . . . . . . . . passim

Pioneer Co. v. Talon, Inc., 462 F.2d 1106 (8th Cir. 1972). . . . . . . . . . . . . . . . . . . .20

Poster Exch. Inc. v. Nat’l Screen Serv. Corp., 517 F.2d 117 (5th Cir. 1975) . . . . . . . . . . . . . . 20, 32, 34

Powell v. Nevada, 511 U.S. 79 (1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26

Pro Football, Inc. v. Harjo, 565 F.3d 880 (D.C. Cir. 2009) . . . . . . . . . . . . . . . . . . .28

Samsung Electronics Co. v. Panasonic Corp., 83 U.S.L.W. 3311 (Jan. 20, 2015) (No. 14-540). passim

Samsung Electronics Co. v. Panasonic Corp., 747 F.3d 1199 (9th Cir. 2014), cert. denied, 83 U.S.L.W. 3311 (Jan. 20, 2015) (No. 14-540). . . . . .12

Securities & Exchange Comm’n v. Chenery Corp., 318 U.S. 80 (1943) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27

State Farm Mut. Auto Ins. Co. v. Ammann, 828 F.2d 4 (9th Cir. 1987) . . . . . . . . . . . . . . . . . . . . . .15

viii

Cited Authorities

Page

Taylor v. Sturgell, 553 U.S. 880 (2008) . . . . . . . . . . . . . . . . . . . . . . . . . . .28

Texaco, Inc. v. Dagher, 547 U.S. 1 (2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

U.S. Phillips Corp. v. Int’l Trade Comm’n, 424 F.3d 1179 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . .32

United Shoe Machinery Corp. v. United States, 258 U.S. 451 (1922) . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

United States Gypsum Co. v. Indiana Gas Co., 350 F.3d 623 (7th Cir. 2003) . . . . . . . . . . . . . . . . .29, 30

United States v. New Wrinkle, Inc., 342 U.S. 371 (1952) . . . . . . . . . . . . . . . . . . . . . . . . . . . .31

Varner v. Peterson Farms, 371 F.3d 1011 (8th Cir. 2004). . . . . . . . . . . . . .19, 21, 22

W. Penn Allegheny Health Sys., Inc. v. UPMC, 627 F.3d 85 (3d Cir. 2010) . . . . . . . . . . . . . . . . . . .20, 22

Youakim v. Miller, 425 U.S. 231 (1976) . . . . . . . . . . . . . . . . . . . . . . . . . . . .26

Z Techs. Corp. v. Lubrizol Corp., 753 F.3d 594 (6th Cir. 2014). . . . . . . . . . . . . . . . . .21, 29

ix

Cited Authorities

Page

Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321 (1971) . . . . . . . . . . . . . . . . . . . . . . passim

STATUTES AND OTHER AUTHORITIES

15 U.S.C. § 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1, 5

15 U.S.C. § 15b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

15 U.S.C. § 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29

15 U.S.C. § 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25

28 U.S.C. § 2342. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25

Fed. R. Civ. P. 12(b)(6). . . . . . . . . . . . . . . . . . . . . . . passim

II Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law ¶320c (4th ed. 2013) . . . . . . . . . . .15, 24

Daniel Quint, Pooling with Essential and Nonessential Patents , 6 A m. Econ. J.

Microeconomics 24 (2014) . . . . . . . . . . . . . . . . . . . . . .31

U.S. Dep’t of Justice & Fed. Trade Comm’n, Antitrust Guidelines for the Licensing of Intellectual Property Rights: Promoting

Innovation and Competition 34-35 (2007). . . . . . . .31

1

BRIEF IN OPPOSITION

Respondents, indirect purchasers of secure digital memory cards (“SD Cards”), respectfully submit this brief in opposition to the petition for a writ of certiorari fi led by petitioners Panasonic Corporation, Panasonic Corporation of North America (“Panasonic”), Toshiba Corporation, Toshiba America Electronics Components, Inc. (“Toshiba”), SanDisk Corporation (“SanDisk”), and SD-3C LLC (“SD-3C”). This Court has already denied certiorari, without dissent, in the related case where petitioners sought review of similar questions. Samsung Electronics Co. v. Panasonic Corp., 83 U.S.L.W. 3311 (Jan. 20, 2015) (No. 14-540). The same result is warranted here.

This Court has long held that in a continuing price-fi xing conspiracy, “each sale to the plaintiff[] starts the statutory period running again . . . .” Klehr v. A.O. Smith Corp., 521 U.S. 179, 189 (1997) (quotation marks omitted). The decision below properly found that respondents’ claim for injunctive relief to enjoin petitioners’ price-fi xing conspiracy in violation of § 1 of the Sherman Act, 15 U.S.C. § 1, is not barred by laches on a Rule 12(b)(6) motion where the complaint alleges respondents purchased price-fi xed SD Cards from defendants or their co-conspirators during the four years preceding the complaint, the statutory limitations period on an analogous damages claim, 15 U.S.C. § 15b. Petitioners do not dispute that this Court’s decision in Klehr, 521 U.S. at 189, governs the limitations analysis in price-fi xing cases, nor do they point to any circuit split in how the Klehr rule is applied in such cases. Pet. 17-18.

2

Instead, petitioners deny altogether that the complaint alleges a conspiracy to fi x SD Card prices. Pet. 17. But the court of appeals recognized that the complaint alleges “[d]efendants, who control 70 percent of the SD [Card] market, intended to agree upon and charge a ‘fair market price’ for their SD Cards, i.e. to fi x the price for SD cards in violation of federal and state antitrust laws.” Pet. App. 4a (quotations and alterations omitted). To the extent petitioners dispute the merits of respondents’ price-fi xing claim, the court of appeals deferred that question to the district court on remand. Pet. App. 4a. This Court should not grant review to address that question in the fi rst instance.

Petitioners repeat the same arguments from their petition in the related Samsung case. But this Court has since denied that petition. Samsung, 83 U.S.L.W. 3311. Here, as in Samsung, there is no division among the circuits in how to apply the “continuing violation” doctrine where the plaintiffs and defendants are parties to a pre-limitations contract. Instead, what petitioners describe as a confl ict is the same legal rule applied to different fact patterns.

Petitioners fare no better in challenging the court of appeals’ conclusion that respondents could not have sued earlier because “it would have been pure speculation whether [they] would have been harmed” before they purchased price-fixed SD Cards. Pet. App. 9a. That conclusion is consistent with this Court’s Article III standing jurisprudence and other circuit court decisions. Petitioners seek to avoid this result by mischaracterizing the decision below as concluding that “new ‘damages’” restarted the clock for respondents’ injunctive relief claim, Pet. 17, implying that respondents had suffered

3

“old damages” earlier and failed to sue. But the court of appeals never discussed “new damages,” instead holding that any earlier “harm” would have been “pure speculation.” Pet. App. 9a. This Court should not grant review merely to correct the court of appeals’ labeling of its decision as falling within the “speculative damages” doctrine rather than within this Court’s Article III standing jurisprudence.

Petitioners’ remaining laches arguments—which seek mere error correction and identify no circuit split—were not raised below and rely on facts outside the pleadings. Petitioners never argued to the panel below that respondents’ federal injunctive relief claim is barred by laches even if an analogous damages claim would be timely, Pet. 14, nor did petitioners present the equitable considerations they raise for the fi rst time here. C.A.9 Answering Br. 32-33. Moreover, this Court has held that only in “extraordinary circumstances” will laches bar injunctive relief at the outset when an analogous damages claim would have been timely. Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962, 1977 (2014). Petitioners cannot establish such “extraordinary circumstances” under Rule 12(b)(6) because (1) they fail to credit the complaint’s allegations of a continuing price-fi xing conspiracy and (2) they depend on facts that are absent from, or contradicted by, the complaint.

Finally, even if the questions presented warranted review (they do not), this case is a poor vehicle for resolving them.

First, the only purported circuit split petitioners attempt to identify involves claims for damages where the plaintiff and defendant had a pre-limitations relationship,

4

such as a contract, governing their interactions. This case is a poor vehicle to resolve any such circuit split because (1) the statute of limitations is, as petitioners admit, not dispositive of laches and (2) there are no allegations that petitioners and respondents had any pre-limitations relationship.

Second, granting review will not affect the outcome in this case. Respondents allege that petitioners rebuffed Samsung’s request in April 2007—after the limitations period began—to license certain SD Card intellectual property unless it agreed to their 2006 License and its “fair market price” provision. Pet. App. 73a. Even under petitioners’ preferred cases, Pet. 16, these allegations suffi ce to establish a continuing violation. Furthermore, petitioners only seek review of respondents’ claim for injunctive relief under federal law, but raise no question as to respondents’ pending state-law claims for damages and injunctive relief.

Third, this case is on appeal from a Rule 12(b)(6) dismissal, and many of the arguments on which petitioners rely are either absent from or, worse, contrary to the complaint. The record is therefore insuffi ciently developed to warrant review of petitioners’ proposed equitable considerations.

This Court should deny the petition.

COUNTERSTATEMENT

Respondents are indirect purchasers who bought price-fi xed SD Cards in the four years preceding their complaint, filed on March 15, 2011. Pet. App. 23a,

5

75a-75a. Respondents seek injunctive relief, alleging that petitioners conspired to restrain trade and fi x prices in the market for SD Cards, in violation of § 1 of the Sherman Act, 15 U.S.C. § 1. Id. Respondents also seek damages and injunctive relief under the antitrust, consumer protection, and unfair competition laws of various states and the District of Columbia that have repealed Illinois Brick v. Illinois, 431 U.S. 720 (1977), and its bar against indirect purchasers’ antitrust suits for damages. Pet. App. 76a-96a.

In the early 1990s, petitioners SanDisk, Panasonic, and Toshiba developed competing fl ash memory card formats. Pet. App. 115a-16a. In 1998, sixteen companies formed the MultiMediaCard Association (“MMCA”) to promote the MMC Card as the industry standard. Pet. App. 44a-45a. All MMCA members could manufacture MMC Cards on a royalty-free basis. Id.

Prior to 1999, Panasonic, SanDisk, and Toshiba were major horizontal competitors in the fl ash memory card technology and product markets. Pet. App. 118a. In 1999, however, these three former competitors abandoned MMCA, an open standard-setting body, and began to develop a modifi ed version of the MMC Card in a closed process that excluded other industry participants. Pet. App. 118a. This modifi ed version of the MMC Card became known as fi rst generation SD Cards. Pet. App. 44a.

SD Cards have become the de facto fl ash memory card standard format in the United States and are widely used for data storage in a variety of consumer electronic devices, including cameras, “netbooks,” and mobile phones. Pet. App. 43a. An SD Card is a small, roughly postage-stamp-sized container that houses controller

6

circuitry and NAND fl ash memory circuits (also called chips).1 Pet. App. 38a.

SanDisk, Panasonic, and Toshiba hold nearly all of the essential patents necessary to manufacture NAND fl ash memory. Pet. App. 44a. Panasonic and Toshiba were both major manufacturers and sellers of host devices employing fl ash memory storage—indeed, Panasonic was the largest manufacturer of consumer electronic devices in the world. Pet. App. 45a. Petitioners were therefore well positioned to push the adoption of any standard they jointly developed. Id.

Since 2003, petitioners have required their downstream rivals in the SD Card market to enter into a license agreement (the “2003 License”) with their jointly-controlled licensing affi liate, SD-3C, which charges a six percent royalty for a limited subset of the patents petitioners claim are necessary to manufacture SD Cards, calculated based on the net sales of the SD Cards. Pet. App. 24a-25a, 47a-48a. Petitioners exempt themselves from this six percent royalty by granting each other royalty-free cross licenses, thereby giving themselves a pricing buffer against their other licensees who are also their downstream rivals in the SD Card markets. Id.

Petitioners exploited Panasonic and Toshiba’s market power in consumer devices and offered royalty-free licenses to other host device manufacturers to make such devices compatible with SD Cards, ultimately succeeding

1. There are two main types of fl ash memory, NAND and NOR fl ash memory. Pet. App. 43a. SD Cards use NAND fl ash memory. Id.

7

in “tipping” the fl ash memory card market in favor of SD Cards as the dominant format by late 2006. Pet. App. 26a. After achieving 70 percent market penetration in SD Cards, petitioners amended the SD Card license in August 2006 (the “2006 License”), extending their licensing regime to cover second generation SD Card products with even smaller form factors. Pet. App. 26a, 53a-54a, 73a, 77a; 150a.

The 2006 License for the fi rst time stated that (1) SanDisk, Panasonic, and Toshiba, acting through their licensing affi liate SD-3C, would collectively agree upon the “fair market price” of SD Cards and (2) they could use this “fair market price” to extract higher royalties from their licensee-rivals if their sales prices for SD Cards were too low. Pet. App. 26a. This term had not been included in the 2003 License, but was added to the 2006 License after petitioners had acquired market power in SD Cards. Id.

Respondents allege that this “fair market price” provision is evidence that three horizontal competitors—who collectively account for 70 percent of the SD Card market and who have a built-in pricing buffer of at least six percent against their downstream licensee rivals—agreed to determine among themselves what they deemed the “fair market price” for their own SD Cards. Id. It is also evidence that petitioners conspired to fi x prices with their downstream licensees who account for the remaining 30 percent of the SD Card market. Id. Petitioners and their licensees kept this “fair market price” provision secret and confi dential through non-disclosure agreements, so it was impossible as a practical matter for consumers to discover its terms through reasonable diligence until Samsung fi led suit against Panasonic and SD-3C on October 14, 2010. Pet. App. Pet. App. 73a-74a.

8

Petitioners argue that this provision has not been “enforced” against their downstream licensee rivals since 2006. Pet. 7 at n.2. But whether the provision was “enforced” in order to collect higher royalties is beside the point. The mere threat of so-called “enforcement” infl uences licensee-rivals not to price below the “fair market price.” See, e.g., United Shoe Machinery Corp. v. United States, 258 U.S. 451, 458 (1922) (“The fact that the lessor in many instances forebore to enforce these provisions does not make them any less agreements within the condemnation of the Clayton Act.”). Indeed, the lack of so-called “enforcement” is consistent with the “fair market price” agreement having been effective in infl uencing prices; after all, the provision cannot be enforced unless the sales price charged is less than the “fair market price.”

Petitioners’ conspiracy to fix the “fair market price” for SD Cards, while beginning in 2006, continues to the present. Pet. App. 23a, 27a, 73a. Respondents allege that petitioners have continued to impose this provision on licensees through the present and that they have engaged in other overt acts during the four years preceding the complaint. Respondents allege that in April 2007, Samsung, one of petitioners’ licensees and their competitor in the SD Card market, attempted to renegotiate the terms of the “fair market price” provision and to license the essential patent rights to manufacture SD Cards individually from each petitioner. Pet. App. 73a. Petitioners rebuffed Samsung and continued to act pursuant to the 2006 License throughout the limitations period. Id.

Respondents allege that petitioners’ conspiracy to fi x the “fair market price” of SD Cards cannot be justifi ed

9

as reasonably ancillary to a pro-competitive joint venture because petitioners’ joint venture itself is anticompetitive under the rule of reason. Texaco, Inc. v. Dagher, 547 U.S. 1, 7 (2006). Petitioners allege that the licensing scheme fails under the rule of reason because its anticompetitive effects (including charging what amounts to a double-royalty on fl ash memory, coercing licensees into taking a package license rather than negotiating individual licenses, increasing transaction costs by failing to include all of petitioners’ purportedly essential patents to manufacture SD Cards in the pool, and imposing unequal grant-back provisions, among others) are not outweighed by any of the pro-competitive aspects of legitimate patent pools, which are absent here. Pet. App. 49a-54a, 74a.

Petitioners moved to dismiss the first amended complaint on several grounds, challenging both the timeliness and the merits of respondents’ claims. The district court addressed the former but not the latter. Pet. App. 11a-19a. The district court misinterpreted the complaint as only “challeng[ing] the standard-setting process created in the late 1990s that resulted in the SD Memory Card Specifi cation,” Pet. App. 12a, and alleging that such standard-setting activity “caused permanent cost differentials at that time,” Pet. App. 16a. This was a fundamental misreading of the complaint, which included allegations regarding the history of competition in the fl ash memory industry in order to demonstrate why petitioners’ continuing price-fi xing conspiracy cannot be justifi ed as ancillary to a pro-competitive joint venture. Furthermore, the district court rejected the argument that price-fi xing claims are examples of “continuing violations,” or that the limitations period re-starts with each sale of a price-fi xed product, citing an inapposite treatise section on

10

monopolies rather than price-fi xing conspiracies. Pet. App. 17a-18a. Based on these erroneous conclusions, the district court dismissed respondents’ federal antitrust claim for injunctive relief as “fall[ing] outside the statute of limitations period,” without mentioning laches.2 Pet. App. 18a.

In a unanimous decision, the Ninth Circuit (Paez, J., joined by Gould, J. and Ezra, D.J.) reversed and remanded for further proceedings. Pet. App. 1a-10a. The court held that “[t]aking Plaintiffs’ allegations in the First Amended Complaint . . . as true, as we must at this stage of the litigation, we conclude that they are suffi cient to establish that laches is not a bar to Plaintiffs’ federal antitrust claim.” Pet. App. 2a. In so holding, the court noted the “fair market price” provision in the 2006 License and observed that “Plaintiffs allege that this provision shows that Defendants, who control 70 percent of the SD market, intended to ‘agree upon and charge a ‘fair market price’ for their SD [c]ards,’ i.e., to fi x the price for SD cards in violation of federal and state antitrust laws.” Pet. App. 4a. Although petitioners argued “that the allegations regarding the fair market price provision are not suffi cient to establish the existence of a price-fi xing conspiracy,” the court of appeals “express[ed] no opinion on this issue” and left it “for the district court to address on remand.” Pet. App. 4a at n.2.

2. The district court also dismissed respondents’ state-law claims, holding that “Plaintiffs’ state antitrust claims fall outside the statute of limitations period for all of the same reasons applicable to its federal antitrust claims.” Pet. App. 18a.

11

Based on respondents’ price-fi xing allegations, the court applied the “continuing violation” exception to the Clayton Act’s four-year statute of limitations, noting that “[i]n the context of a continuing conspiracy to violate the antitrust laws, each time a plaintiff is injured by an act of the defendant[ ] a cause of action accrues to him to recover the damages caused by that act.” Pet. App. 6a-7a (quoting Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 338 (1971)). The court noted that the application of the “continuing violation” doctrine depends on whether the alleged overt act “(1) is ‘new and independent . . . [and] not merely a reaffi rmation of a previous act,’ and (2) ‘infl ict[s] new and accumulating injury on the plaintiff.’” Pet. App. 7a (citation omitted).

The court of appeals observed that “the Supreme Court and federal appellate courts have recognized that each time a defendant sells its price-fi xed product, the sale constitutes a new overt act causing injury to the purchaser and the statute of limitations runs from the date of the act.” Pet. App. 7a (citing Klehr, 521 U.S. at 189, and collecting cases from the Fourth, Eleventh, and Ninth Circuits adopting the same standard). Under this test, the court held that “[b]ecause Plaintiffs allege that they were injured within the four-year limitations period, Plaintiffs have alleged suffi cient facts to show that laches does not bar their federal antitrust claim.” Pet. App. 8a.

In addition, the court held that respondents could not have fi led suit before they purchased price-fi xed SD Cards in the four years preceding the complaint, as “it would have been pure speculation whether Plaintiffs would have been harmed” earlier. Pet. App. 9a (citing Zenith, 401 U.S. at 341-42). The court rejected petitioners’ argument that

12

their “continued sales of SD cards at supracompetitive prices were but unabated and inertial consequences of their pre-limitations” standard-setting activities. Pet. App. 8a (quotation marks and bracket omitted). Instead, the court of appeals held that “the license itself did not permanently and fi nally control the acts” of petitioners, who “could have ceased charging the price-fi xed price at any time.”3 Pet. App. 8a-9a.

Petitioners sought rehearing en banc. Although the court called for a response, not a single judge called for a vote. Pet. App. 20a-21a.

This case is related to Samsung Electronics Co. v. Panasonic Corp., 747 F.3d 1199, 1201 (9th Cir. 2014), cert. denied, 83 U.S.L.W. 3311 (Jan. 20, 2015) (No. 14-540). In that case, as here, the district court dismissed Samsung’s state and federal antitrust claims as time-barred, and the court of appeals reversed. Samsung, 747 F.3d at 1203-05. Petitioners urged this Court to grant certiorari in both cases and to consolidate them for oral argument. Pet. 6. On January 20, 2015, this Court denied certiorari in Samsung. 83 U.S.L.W. 3311.

3. The court of appeals also vacated the district court’s dismissal of respondents’ state-law claims and remanded for further consideration in light of certain precedents the district court had not considered. Pet. App. 10a.

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REASONS FOR DENYING THE PETITION

I. THE DECISION BELOW PRESENTS NO CONFLICT WITH THIS COURT’S PRECEDENTS OR ANY CIRCUIT SPLIT.

Petitioners’ argument that the decision below confl icts with this Court’s jurisprudence and decisions of other circuits rests on three fundamental mischaracterizations of the record.

First, the petition denies that this case alleges a naked price-fi xing conspiracy. Pet. 19-20. It does so because there is no circuit split regarding how to determine timeliness in price-fi xing cases: the statute begins to run anew each time the plaintiff purchases the price-fi xed product.

Second, the petition mischaracterizes the decision below as resting on the conclusion that Respondents suffered “new ‘damages’” during the limitations period. Pet. 23. It does so because the court of appeals’ actual holding—that it would have been “pure speculation” whether petitioners “would have been harmed” at all before they purchased SD Cards, Pet. App. 9a—is a straightforward application of this Court’s “speculative damages” exception and Article III standing jurisprudence.

Third, the petition mischaracterizes the decision below as ignoring equitable considerations and treating statute of limitations principles as “dispositive” on the question of laches. Pet. 27. It does so because the court of appeals’ actual decision—which used the limitations period as a “guideline” and deferred merits questions to the district court, Pet. App.—is not in confl ict with this Court’s decisions or those of any other circuit.

14

The petition engages in such misdirection because the decision below does not implicate any confl ict with this Court’s precedent or any circuit split that this Court should resolve.

A. The Decision Below Correctly Applies This Court’s Decisions in Zenith, Klehr, and Petrella to this Price-Fixing Case.

A plaintiff’s antitrust claim generally “accrues and the statute begins to run when a defendant commits an act that injures a plaintiff’s business.” Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 338 (1971). “Thus, if a plaintiff feels the adverse impact of an antitrust conspiracy on a particular date, a cause of action immediately accrues to him to recover all damages incurred by that date and all provable damages that will fl ow in the future . . . .” Id. at 339.

This Court more recently explained that

in the case of a “continuing violation,” say, a price-fixing conspiracy that brings about a series of unlawfully high priced sales over a period of years, each overt act that is part of the violation and that injures the plaintiff, e.g., each sale to the plaintiff, starts the statutory period running again, regardless of the plaintiff’s knowledge of the alleged illegality at much earlier times.

Klehr v. A.O. Smith Corp., 521 U.S. 179, 189 (1997) (quotation marks omitted) (emphasis added). However, this Court clarifi ed that “the commission of a separate new overt act generally does not permit the plaintiff to

15

recover for the injury caused by old overt acts outside the limitations period.” Id. at 189-90. Thus, “a cause of action accrues when new overt acts occur within the limitations period, even if a conspiracy was formed and other acts were committed outside the limitations period.” State Farm Mut. Auto Ins. Co. v. Ammann, 828 F.2d 4, 5 (9th Cir. 1987) (Kennedy, J., concurring). See also II Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law ¶320c (4th ed. 2013) (“Areeda”).

As the court of appeals correctly observed, the complaint alleges that petitioners “violated federal and state antitrust laws by conspiring to fi x the price for SD cards,” Pet. App. 1a-2a, and that respondents were injured when they purchased price-fi xed SD Cards “on or after March 15, 2007, which is within four years of March 15, 2011, the date on which this lawsuit was fi led.” Pet. App. 8a. As a result, the court of appeals correctly held that “[b]ecause Plaintiffs allege that they were injured within the four-year limitations period, Plaintiffs have alleged suffi cient facts to show that laches does not bar their federal antitrust claim.” Id.

Petitioners go to great lengths to deny that this case alleges a “[n]aked price-fixing conspirac[y],” Pet. 19, arguing “the only price ‘fi xed’ is SD-3C’s royalty rate” rather than SD Card prices, Pet. 11. Petitioners do so because even they cannot conjure a circuit split on the question whether the sale of a price-fi xed good to the plaintiff during the limitations period falls within the “continuing violation” doctrine.

Contrary to petitioners’ assertions, the complaint is replete with allegations that petitioners conspired to fi x SD Card prices, as evidenced by their agreement to

16

determine the purported “fair market price” of SD Cards. See, e.g., Pet. App. 24a, 26a, 31a, 32a, 36a, 49a, 53a, 61a. The court of appeals properly acknowledged respondents’ price-fixing allegations and applied the appropriate rule for determining when such claims accrue, while remanding to the district court to determine in the fi rst instance whether such allegations suffi ce to state a price-fi xing claim on the merits. Pet. App. 4a.

The court of appeals did not err in declining to dismiss respondents’ injunctive relief claim under the equitable doctrine of laches when it would have been timely under the limitations period. This Court recently confi rmed that only in “extraordinary circumstances” will “delay in commencing suit . . . be of suffi cient magnitude to warrant, at the very outset of the litigation, curtailment of the relief equitably awardable.” Petrella, 134 S. Ct. at 1977. Petitioners failed to argue before the panel below that respondents’ injunctive relief should be time-barred based on “equitable considerations” even if an analogous damages claim would be timely. C.A.9 Answering Br. 32-33. In any event, the purported facts they rely upon to support this proposition now are either outside, or directly contrary to, the complaint.

B. There Is No Circuit Split Over Whether a New Claim and a New Limitations Period Accrue With Each Price-Fixed Sale.

Petitioners’ sole argument for a circuit split on the question whether the sale of a price-fi xed product to the plaintiff falls within the “continuing violation” doctrine is that “[m]ost circuits . . . do not read Klehr to establish a rule that every sale of a product by a conspirator

17

restarts the limitations period . . . .” Pet. 19-20 (emphasis in original). Tellingly, petitioners fail to cite any circuit court decisions in support of that proposition. Pet. 20. That is because circuit courts uniformly recognize that, under Zenith and Klehr, a new claim and new limitations period accrue with each price-fi xed sale.

The Eighth and Sixth Circuits—which petitioners wrongly claim are opposite a split with the Ninth Circuit, Pet. 17—both recognize that Klehr restarts the limitation period for each price-fi xed sale. See In re Wholesale Grocery Products Antitrust Litig., 752 F.3d 728, 734 (8th Cir. 2014) (emphasizing that under Klehr, “‘each sale to the plaintiff, starts the statutory period running again’” (quoting Klehr, 521 U.S. at 189) (emphasis in original)); In re Travel Agent Com’n Antitrust Litig., 583 F.3d 896, 902 (6th Cir. 2009) (“Klehr simply reiterates that the antitrust laws recognize continuing violations and, more precisely that a new § 1 claim arises each time a company sells a price-fi xed product.”). The Eleventh Circuit has held that “when sellers conspire to fi x the price of a product, each time a customer purchases that product at the artifi cially infl ated price, an antitrust violation occurs and a cause of action accrues.” Morton’s Market, Inc. v. Gustafson’s Dairy, Inc., 198 F.3d 823, 828 (11th Cir. 1999) (as amended) (citing Klehr, 521 U.S. at 189). And the Fourth Circuit has applied Klehr similarly in a case where plaintiffs purchased price-fi xed yarn during the limitations period set forth in an arbitration agreement. In re Cotton Yarn Antitrust Litig., 505 F.3d 274, 291 (4th Cir. 2007) (holding “[u]nder Klehr . . . the plaintiff’s claims would be timely . . . so long as the plaintiffs made a purchase from the Defendants” within the arbitration agreement’s limitation period) (emphasis added). Petitioners do not cite a single

18

case in which a court has dismissed as time-barred price-fi xing claims brought within four years of the offending sales, let alone offer any evidence for their assertion that “[m]ost circuits” would have decided this issue differently, Pet. 20.

In a fi nal attempt to conjure a confl ict, petitioners argue that respondents purchased their SD Cards from some other party rather than directly from petitioners during the limitations period. Pet. 13, 18. Of course that is true by definition—respondents are indirect purchasers. But respondents allege that they “purchased SD Cards indirectly from defendants and their co-conspirators” during the limitations period. Pet. App. 75a-76a (emphasis added). See also Pet. 27a-30a, 37a. The court of appeals recognized that petitioners thus made “continued sales of SD cards at supracompetitive prices” during the limitations period. Pet. App. 8a. Petitioners offer no reason why plaintiffs who purchased price-fi xed products “indirectly from defendants” in the four years preceding the complaint should be treated any differently from plaintiffs who do so directly when it comes to the question of timeliness of an injunctive relief claim. Nor do petitioners cite any circuit decision (let alone circuit split) on this issue.

C. There Is No Circuit Split in the “Continuing Violation” Cases Petitioners Raised in Samsung.

Because there is no circuit split on whether each price-fi xed sale constitutes an overt act, petitioners largely rehash the same illusory circuit splits they cited in their Samsung petition, Pet. 16-20, which this Court has since denied. Samsung, 83 U.S.L.W. 3311 (No. 14-540).

19

Here, as in Samsung, Petitioners claim that the Eighth, Sixth, and Fifth Circuits follow a rule that “merely continuing to collect money under an existing contract does not restart the clock,” while the Ninth and Third Circuits purportedly adhere to “minority position” in which “the limitations [period reopens even when the acts that occurred within the limitations period were reaffi rmations of decisions originally made outside the limitations period.” Pet. 17 (quotations omitted). This supposed split, however, merely refl ects application of the same legal rule to different fact patterns.

Petitioner’s claimed circuit split between the Ninth Circuit on the one hand and the so-called majority position of the Eight, Sixth, and Fifth Circuits on the falls apart. The Ninth Circuit that fi rst held that “two elements characterize an overt act which will restart the statute of limitations: 1) It must be a new and independent act that is not merely a reaffi rmation of a previous act; and 2) it must infl ict new and accumulating injury on the plaintiff.” Pace Indus., Inc. v. Three Phoenix Co., 813 F.2d 234, 237 (9th Cir. 1987). The other circuits petitioners claim to be confl icting in fact have adopted the Ninth Circuit’s rule from Pace. See Varner v. Peterson Farms, 371 F.3d 1011, 1019 (8th Cir. 2004) (quoting Pace and its “new and independent act” test for overt acts); DXS, Inc. v. Siemens Med. Sys., Inc., 100 F.3d 462, 467-68 (6th Cir. 1996) (same); Al George, Inc. v. Envirotech Corp., 939 F.2d 1271, 1274 (5th Cir. 1991) (agreeing “with the Ninth Circuit’s reasoning” in Pace).

Petitioners’ reliance on a D.C. Circuit decision to show a split with the Eighth, Sixth, and Fifth Circuits, Pet. 17-18, is similarly misplaced. The D.C. Circuit relied on Kaiser, the Fifth Circuit case petitioners cite, for

20

the proposition that the plaintiff must “show an ‘overt act’ pursuant to the original tying arrangement by the appellees within the limitations period which caused them an antitrust injury,” and concurred that “mere receipt of payments under an agreement . . . does not constitute a continuing antitrust violation.” Nat’l Souvenir Ctr., Inc. v. Historic Figures, Inc., 726 F.2d 503, 509-510 (D.C. Cir. 1984), cert. denied, 469 U.S. 825 (1984) (citing Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1055-56 (5th Cir. 1982)).

Petitioners’ citation to a Third Circuit decision, Pet. 17, is equally unavailing. There, the defendants conspired to maintain “artifi cially depressed reimbursement rates” during the limitations period and “refused” to raise them at plaintiff’s request, citing their agreement “not to do anything to benefi t [plaintiff] fi nancially.” W. Penn Allegheny Health Sys., Inc. v. UPMC, 627 F.3d 85, 94 (3d Cir. 2010). This decision is in accord with cases from the Eighth, Sixth, and Fifth Circuits. See, e.g., DXS, 100 F.3d at 468 (holding post-limitations enforcement of pre-limitations policy constituted “new and independent acts that infl icted new and accumulating injury on DXS,” restarting the limitations period); Poster Exch. Inc. v. Nat’l Screen Serv. Corp., 517 F.2d 117, 128-29 (5th Cir. 1975) (requiring “some specifi c act or word precluding [plaintiff] from obtaining supplies” during the limitations period, rather than a mere absence of dealing);4 Pioneer Co. v. Talon, Inc., 462 F.2d 1106, 1108-09 (8th Cir. 1972)

4. The Third Circuit cited this Fifth Circuit case in support of its decision, undermining petitioners’ argument that such circuits are on opposite sides of a divide. W. Penn, 627 F.3d at 107-08 (quoting Poster Exch., 517 F.2d at 127-28).

21

(“Here, to maintain their manufacturers’ price, Talon and Donahue were obliged to continue their violation of the antitrust laws by refusing to sell to Pioneer on its request.”).

Petitioners complain that the Third Circuit rejected the argument that “reaff irmations” of an earlier conspiracy cannot restart the limitations period and that this decision is somehow at odds with decisions of other circuits. Pet. 17. That is wrong. In any “continuing” violation, the subsequent overt acts can be characterized, in some sense, as “reaffi rmations” of the pre-limitations conspiracy—indeed, that is the very definition of “continuing.” Even under petitioners’ preferred cases, Pet. 17, the question is not whether the “continuing violations” are “reaffi rmations” of earlier conspiracies. Instead, the question is whether the alleged overt act is “merely a reaffi rmation of a previous act” or whether, instead, it “infl ict[s] a new and accumulating injury on the plaintiff.” Z Techs. Corp. v. Lubrizol Corp., 753 F.3d 594, 599 (6th Cir. 2014) (quotation marks omitted) (emphasis added); see also Varner, 371 F.3d at 1019 (holding overt act not “merely a reaffi rmation of a previous act” but “must infl ict new and accumulating injury”) (emphasis added); Kaiser, 677 F.2d at 1053 (contrasting “merely the abatable but unabated inertial consequences of some pre-limitations action” with “some injurious act actually occurring during the limitations period”) (quotation marks omitted) (emphasis added). The Third Circuit rejected the defendant’s argument that “the acts that allegedly occurred within the limitations period were merely manifestations of decisions made or acts done outside the limitations period,” concluding instead that “defendants performed injurious acts in furtherance of the conspiracy

22

within the limitations period.” W. Penn, 627 F.3d at 106-07. Nothing in that decision confl icts with Eighth, Sixth, or Fifth Circuit precedents.

The remaining cases petitioners cite do not show a circuit split but instead refl ect the application of the same legal rule to fact patterns where defendants simply “s[a]t back and watch[ed],” Champagne Metals v. Ken-Mac Metals, Inc., 458 F.3d 1073, 1089 (10th Cir. 2006), as their pre-limitations conduct harmed the plaintiff without taking any new anticompetitive acts. See Varner, 371 F.3d at 1019 (no overt act where plaintiffs bought supplies and facilities from defendants under pre-limitations contract); Grand Rapids Plastics, Inc. v. Lakian, 188 F.3d 401, 405-06 (6th Cir. 1999) (no overt act where sole continuing violations were payments required by pre-limitations conspiracy); Kaiser, 677 F.2d at 1053 (no overt act where pre-limitations contract “had fi xed price, quantity, and delivery schedule terms” and established “[t]he rights and liabilities of both parties”).

Petitioners concede that “the court below purported to apply the rule that an overt act that is ‘new and independent’ and ‘not merely a reaffi rmation of a previous act’ is necessary to restart the limitations period.” Pet. 19. Petitioners do not seriously complain that the Ninth Circuit employed the wrong legal rule, or a legal rule that confl icts with other circuits. Instead, petitioners take issue with the Ninth Circuit’s application of their preferred rule to the facts of this case. This court should not grant review to tinker with the court of appeals’ factual analysis under a long-settled legal rule.

23

D. There Is No Circuit Split Over Whether Laches Bars an Injunctive Relief Claim the Plaintiff Would Have Lacked Article III Standing to Raise Earlier.

Petitioners next argue that the court of appeals erred in applying the “speculative damages” exception from Zenith in determining that respondents’ claim for injunctive relief was not barred by laches. Pet. 22-27. In so doing, petitioners repeatedly assert that the decision below held “the accrual of new ‘damages’ [would] restart[] the clock for injunctive relief,” Pet. 5, notwithstanding that indirect purchaser plaintiffs would lack standing to sue for damages under federal law. See also Pet. 4, 23, 24.

But the court of appeals did not say anything about respondents having suffered “new ‘damages’” during the four-year period preceding the suit—which presumably would imply that they had suffered “old” damages earlier and failed to sue. Instead, the court of appeals held that it “would have been pure speculation whether Plaintiffs would have been harmed” before they purchased SD Cards. Pet. App. 9a (emphasis added). In other words, the court of appeals held that respondents had not suffered any actual injury and any “threatened” injury would have been speculative at an earlier date.

The court of appeals framed its holding as one falling within the “speculative damages” exception from Zenith, Pet. App. 9a. Petitioners argue it was wrong to do so because indirect purchasers lack standing to sue for damages. Pet. 22-23. This argument is inconsistent with petitioners’ urging this Court to resolve a purported circuit split on the statute of limitations for damages suits.

24

Pet. 16-22. There is simply no persuasive argument why the court of appeals was free to consider the “continuing violations” doctrine, which also arises in damages cases, but must disregard the “speculative damages” rule when using the statute of limitations as a guideline for laches.

In any event, the decision below would have been equally correct had the court of appeals labeled it a ruling on Article III standing. This Court has held that “to satisfy Article III’s standing requirements” a plaintiff must show “it has suffered an ‘injury in fact’ that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical . . . .” Friends of the Earth, Inc. v. Laidlaw Env’l Servs. (TOC), Inc., 528 U.S. 167, 181 (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). Petitioners ignore the fact that while petitioners may lack statutory standing to sue for damages, the question when they fi rst suffered harm is relevant to the constitutional standing inquiry on their injunctive relief claim. Areeda, supra ¶ 326a (“[T]he courts have generally imposed similar standing tests on plaintiffs, whether seeking equitable or damage relief.”). The court of appeals correctly rejected petitioners’ argument that respondents’ claims are forever barred by laches because they did not fi le suit for injunctive relief at a time when they could not have established Article III standing. Pet. App. 9a (“Plaintiffs should not be penalized for failing to foresee earlier that they would enter the market for SD cards and would therefore be harmed by Defendants’ conduct.”).

Petitioners do not claim that there is any circuit split as to whether a plaintiff is required to sue for injunctive relief under the Clayton Act at a time when it is “pure speculation” whether “he would have been harmed,” Pet.

25

App. 9a, or else forever be barred by laches. Pet. 22-26. The First and Eighth Circuits have noted that “Section 16’s requirement of ‘threatened injury,’ 15 U.S.C. § 26, dovetails with Article III’s requirement that in order to obtain forward-looking relief, a plaintiff must face a threat of injury that is both real and immediate and not conjectural and hypothetical.” Fair Isaac Corp. v. Experian Info. Solutions, Inc., 650 F.3d 1139, 1146 (8th Cir. 2011) (quoting In re New Motor Vehicles Canadian Export Antitrust Litig., 522 F.3d 6, 14 (1st Cir. 2008) (quotation marks omitted)). The Third Circuit has held that plaintiffs lacked Article III standing to pursue an antitrust claim for injunctive relief because their allegations did not “indicate that a named party has ‘actual or imminent’ plans to purchase” price-fi xed title insurance in the future. McCray v. Fidelity Nat’l Title Ins. Co., 682 F.3d 229, 243 (3d Cir. 2012), cert. denied, 133 S. Ct. 1242 (2013). And the Fifth Circuit has held a plaintiff lacked Article III standing to pursue an injunctive relief claim under § 16 where “the chance of one of the Consumer Appellants purchasing another Batesville casket or his or her family purchasing a Batesville casket upon the Consumer Appellant’s death did not create a real immediate or potential future injury.” Funeral Consumers Alliance, Inc. v. Serv. Corp. Int’l, 695 F.3d 330, 342 (5th Cir. 2012) (quotation marks omitted). Rather than acknowledge such cases, petitioners instead cite inapposite cases, Pet. 26, in which circuit courts held they lacked jurisdiction, by virtue of the Hobbs Act, 28 U.S.C. § 2342, to “entertain[] challenges to [a] regulation other than on appeals arising from agency proceedings . . . .” Nack v. Walburg, 715 F.3d 680, 682 (8th Cir. 2013), cert. denied, 134 S. Ct. 1539 (2014); CE Design Ltd. v. Prism Business Media, Inc., 606 F.3d 443, 450 (7th Cir. 2010), cert. denied, 131 S. Ct. 933 (2011).

26

Petitioners argue that respondents’ claims nevertheless should be barred by laches before they accrued because similar claims were “available to someone” at an earlier date. Pet. 24 (emphasis added). This Court has long held that “[t]he defense of laches ‘requires proof of (1) lack of diligence by the party against whom the defense is asserted, and (2) prejudice to the party asserting the defense.’” Kansas v. Colorado, 514 U.S. 673, 687 (1995) (quoting Costello v. United States, 365 U.S. 265, 282 (1961)) (emphasis added). Petitioners cite no authority for the proposition that in a price-fi xing case, consumers who purchased price-fi xed products in the four years preceding the complaint should be barred from bringing suit simply because someone else may have had a claim even earlier. To the extent petitioners wish this Court to announce a new rule of law, one in which a plaintiff’s claims may be barred by laches not because of his own lack of diligence but merely because someone else could have fi led suit earlier, they have waived that argument by failing to raise it below, C.A.9 Answering Br. 32-33. Powell v. Nevada, 511 U.S. 79, 85 (1994) (“Because the issue was not raised, argued, or decided below, we should not settle it here.”); Youakim v. Miller, 425 U.S. 231, 234 (1976) (“Ordinarily, this Court does not decide questions not raised or resolved in the lower court.”).

E. There is No Circuit Split Over Whether Injunctive Relief Claims Filed within Four Years of Price-Fixed Sales Present “Extraordinary Circumstances” Requiring a Rule 12(b)(6) Dismissal under Laches.

Petitioners argue that the decision below confl icts with this Court’s decision in Petrella, 134 S. Ct. at 1971, because the court of appeals supposedly treated “its analysis of

27

federal statute of limitations principles as dispositive of the issue of laches . . . .” Pet. 27 (emphasis omitted). In reality, the court of appeals used “section 4B’s four-year statute of limitation” as a “guideline” in assessing laches. Pet. App. 6a. This Court has long countenanced precisely that approach. Michoud v. Girod, 45 U.S. 503, 561 (1846) (“[A]lthough the statutes of limitations do not apply to any equitable demand, courts of equity adopt them; or at least generally take the same limitations for their guide, in cases analogous to those in which the statutes apply at law.”), distinguished on other grounds by Securities & Exchange Comm’n v. Chenery Corp., 318 U.S. 80, 87-88 (1943). Petitioners concede that “[t]he analogous statute of limitations is a helpful guide for whether a delay in bringing suit is prejudicial,” and fail to cite any circuit split on this issue. Pet. 27.

Nevertheless, petitioners fault the court of appeals for supposedly failing to consider “broader equitable considerations,” Pet. 27, including (1) petitioners’ claimed substantial investments in SD Card technology and manufacturing, Pet. 30-31, and (2) particular interests in repose in merger cases, Pet. 28. This argument fails for several reasons.

First, petitioners never raised such equitable considerations to the panel below, nor did they argue that respondents’ injunctive relief claim would be barred by laches even if an analogous damages claim were timely. C.A.9 Answering Br. 32-33. As such, that argument is waived.

Second, the petition ignores the procedural posture of this case, which is on appeal from dismissal under Rule 12(b)(6). The laches defense, as petitioners concede,

28

involves fact-intensive equitable inquiries, Pet. 30-31. It should therefore come as little surprise that nearly all of the laches cases petitioners cite, Pet. 28-30, arose after summary judgment or trial. Petrella, 134 S.Ct. at 1971 (summary judgment); Pro Football, Inc. v. Harjo, 565 F.3d 880, 882-83 (D.C. Cir. 2009) (summary judgment); Chirco v. Crosswinds Communities, Inc., 474 F.3d 227, 229 (6th Cir. 2007) (summary judgment); Midwest Mach. Co. v. Nw. Airlines, Inc., 392 F.3d 265, 277 (8th Cir. 2004) (summary judgment); Bridgestone/Firestone Research, Inc. v. Auto. Club, 245 F.3d 1359, 1362-3 (Fed. Cir. 2001) (decision of the United States Patent and Trademark Offi ce Trial and Appeal Board, where party asserting defense of laches “presented testimony” and “evidence” of prejudice that “was not challenged”); Conopco, Inc. v. Campbell Soup Co., 95 F.3d 187, 189 (2d Cir. 1996) (judgment on partial fi ndings). “At the motion to dismiss phase, the obstacle to asserting a successful laches defense is even greater because the defendant must rely exclusively upon the factual allegations set forth in the complaint.” Kourtis v. Cameron, 419 F.3d 989, 1000 (9th Cir. 2005), abrogated on other grounds by Taylor v. Sturgell, 553 U.S. 880, 891 & n.3, 904 (2008). The court of appeals was not required to consider equitable arguments that petitioners never raised and that were outside the pleadings, in any event.

Third, this case is not a merger case, and thus the decision below does not confl ict with the decisions of other circuits addressing timeliness in merger cases. Pet. 30-31. Respondents do not raise a stand-alone challenge to “the formation of the SD Group, the SD Association and SD-3C,” Pet. 26, but rather attack petitioners’ later and continuing conspiracy to fi x prices for SD Cards. Petitioners implicitly acknowledge that this is not a merger

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case by arguing that a “joint venture” among horizontal competitors “must be challenged at their inception,” Pet. 26, a proposition that is, in any event, wrong.

In fact, the supposedly confl icting cases petitioners cite from the Eighth and Sixth Circuits, Pet. 20, 29, recognize the crucial distinction between merger cases and cartel cases, confirming that there is no circuit split to resolve. “Section 7 of the Clayton Act prohibits acquisitions that serve ‘substantially to lessen competition, or tend to create a monopoly,’” and “exists primarily to arrest, at their incipiency, mergers that could produce anti-competitive results.” Midwest Mach., 392 F.3d at 269 (citing 15 U.S.C. § 18). As a result, a § 7 claim “challenging the initial acquisition of another company’s stocks or assets accrues at the time of the merger or acquisition.” Id. (quotation marks and citation omitted). “Unlike a conspiracy . . . a merger is a discrete act, not an ongoing scheme.” Id. at 271. “In a conspiracy, each price increase requires further collusion between multiple parties to maintain the monopoly; in a merger-acquisition case, however, the cause of harm is the merger itself.” Z Techs. Corp. v. Lubrizol Corp., 753 F.3d 594, 599 (6th Cir. 2014).

Petitioners argue that “joint ventures” should be treated identically to mergers when it comes to applying the “continuing violations” doctrine. Pet. 26. But there is an important distinction between a merger and a joint venture: while “[a] merger may be complete at closing . . . a joint venture or a cartel is a continuing cooperative activity that may be discontinued, or amended, from time to time.” United States Gypsum Co. v. Indiana Gas Co., 350 F.3d 623, 628 (7th Cir. 2003) (Easterbrook, J.). “The parties’ decision to keep a joint venture in operation or manage

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the operations in ways that may violate the antitrust rules is one that may be challenged when adverse effects are felt.” Id. That is because “[c]ooperative ventures may begin innocently but acquire market power (or begin to exercise it) afterward . . . .” Id. As a result, when a claim challenges the anticompetitive activities of horizontal competitors engaged in a joint venture, the statute of limitations “runs from the most recent injury caused by the defendants’ activities rather than from the cartel’s inception.” Id. at (citing Zenith, 401 U.S. at 321; Klehr, 521 U.S. at 188-91).

Petitioners argue that barring respondents’ injunctive relief claim on a motion to dismiss is necessary to place “some limit (any limit) on the timeliness of antitrust suits . . . .” Pet. 26 (emphasis omitted). But the court of appeals recognized there is in fact such a limit: petitioners “could have ceased charging the price-fi xed price at any time.” Pet. 9a. By contrast, if petitioners’ “logic were accepted, two parties could agree to form” a joint venture, “wait four years to [fi x] prices, then reap the profi ts of their illegal agreement with impunity because any antitrust claims would be time barred” by virtue of their having formed a joint venture years earlier. Wholesale Grocery Prods., 752 F.3d at 734. “That is not the law.” Id.

This Court in Petrella criticized the decision below for “summarily dispos[ing] of Petrella’s case based on laches, preventing adjudication of any of her claims on the merits, and foreclosing the possibility of any form of relief,” where her damages claims were timely. 134 S. Ct. at 1977. In so doing, the Court noted it was only in “extraordinary circumstances” that “laches may bar at the very threshold the particular relief requested by the plaintiff.” Id. at 1967. Petitioners offer no persuasive reason why such

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“extraordinary circumstances” compelled dismissal under Rule 12(b)(6) here.

II. THE DECISION BELOW PRESENTS NO ISSUE OF NATIONAL IMPORTANCE CONCERNING PATENT POOLS OR STANDARD-SETTING.

Petitioners’ discussion of patent pools and standard-setting organizations, Pet. 31-34, fails to justify granting review in this case. The court below “express[ed] no opinion,” Pet. App. 4a, on the merits of respondents’ claims, and this Court should not grant review in order to do so in the fi rst instance.

Petitioners’ cited authorities make clear that patent pools, like any other collaboration among competitors, may violate the antitrust laws depending on their characteristics. For example, “[w]hen cross-licensing or pooling arrangements are mechanisms to accomplish naked price fi xing or market division, they are subject to challenge under the per se rule.” U.S. Dep’t of Justice & Fed. Trade Comm’n, Antitrust Guidelines for the Licensing of Intellectual Property Rights: Promoting Innovation and Competition 34-35 (2007) (citing United States v. New Wrinkle, Inc., 342 U.S. 371 (1952)), cited in Pet. 32.5 Indeed, patent pools have “been used to eliminate competition between rival technologies, facilitate collusion, and even administer cartels.” Daniel Quint, Pooling with Essential and Nonessential Patents, 6 Am. Econ. J. Microeconomics 24 (2014) (citing examples of such pools), cited in Pet. 33. That is precisely what Respondents allege here.

5. http://www.justice.gov/atr/public/guidelines/0558.htm#t55.

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Petitioners argue patent pools are pro-competitive because they “clear patent thickets by allowing a manufacturer to license all underlying inventions at once.” Pet. 33 (citing U.S. Phillips Corp. v. Int’l Trade Comm’n, 424 F.3d 1179, 1193 (Fed. Cir. 2005)). But the complaint alleges this patent pool does precisely the opposite—it includes only a small subset of the purportedly essential patents necessary to manufacture SD Cards, while nevertheless requiring licensees to negotiate separate licenses with each cartel member individually and effectively pay a double royalty for fl ash memory patents. Pet. App. 25a, 49a-54a. Petitioners claim that because this patent pool “contain[s] only essential patents,” it is necessarily “welfare increasing.” Pet. 33. But nowhere does the complaint allege that SD-3C licenses only “essential patents”—only that it purports to do so. Pet. App. 26a, 47a, 49a, 51a-52a, 57a.

This case should not be treated differently than any other antitrust case merely because it involves patent pools. As set forth above, this case is not limited to challenging a long-ago “open standards-setting effort,” Pet. 32, but rather claims that petitioners began a price-fi xing conspiracy in 2006 that continues to the present. There is no reason to apply special accrual rules that would forever immunize participants in patent pools and standard-setting organizations from claims that they later colluded to fi x prices in the products they manufacture and sell. Wholesale Grocery Prods., 752 F.3d at 734. Adopting petitioners’ argument would “improperly transform the limitations statute,” and thus the laches bar, “from one of repose to one of continued immunity,” thereby creating a “confl ict[] with the policies of vigorous enforcement of private rights through private actions.” Poster Exch., 517 F.2d at 127-128 (citing, inter alia, Zenith, 401 U.S. at 340).

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III. IN ANY EVENT, THIS CASE IS A POOR VEHICLE FOR RESOLVING THE QUESTIONS PRESENTED.

Even if there were a confl ict between the decision below and authorities from other circuits (there is not), review should nevertheless be denied because this case is a poor vehicle to resolve it.

First, this case is a poor vehicle for resolving any purported circuit splits in the statute-of-limitations cases petitioners cite. Petitioners acknowledge that the statute of limitations is not dispositive of laches. Pet. 27. Furthermore, petitioners’ cited cases involve mergers, monopolies, and tying claims stemming from pre-limitations contracts between the parties. Pet. 16-19, 25 (citing cases). This case, by contrast, involves a price-fi xing conspiracy and there are no allegations that petitioners and respondents had any relationship prior to the price-fi xed sales.

Second, adopting petitioners’ proposed rule would not change the outcome. Respondents allege independent overt acts within the limitations period infl icting new and accumulating injury, including that (1) on “April 14, 2007, SD-3C’s representative, Mr. Quackenbush refused to provide Samsung with the logo guidelines for second generation SD Cards” unless they accepted the terms of the 2006 License with its “fair market price” provision and (2) petitioners and their co-conspirators continued to sell price-fi xed SD Cards pursuant to the “fair market price” provision throughout the limitations period. Pet. App. 72a-74a. Such overt acts would be suffi cient to restart the limitations period (and thus preserve

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respondents’ claim under laches) even under petitioners’ preferred cases. See, e.g., Poster Exch., 517 F.2d at 128-29 (claim timely if complaint alleged defendant made “some specifi c word or act” refusing to deal with plaintiff during limitations period, even where conspiracy pre-dated limitations period). In addition, petitioners raise no issue concerning respondents’ pending state-law claims for both damages and injunctive relief, which claims may still proceed regardless of the outcome of respondents’ federal injunctive relief claim.

Third, this case is a poor vehicle to address equitable arguments concerning patent pools because the record is undeveloped. Neither the district court nor the court of appeals has opined on the merits of petitioners’ patent pool, and, indeed, the court of appeals has deferred that question to the district court on remand. Many of the arguments petitioners raise in support of their laches argument are either absent from or contradicted by the complaint, revealing that their question presented cannot properly be resolved on a motion to dismiss.

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CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted,

MAX L. TRIBBLE JR.JOSEPH S. GRINSTEIN*ERIC J. MAYER

SUSMAN GODFREY L.L.P.1000 Louisiana, Suite 5100Houston, TX 77002(713) 651-9366jgrinstein@susmangodfrey.com

MARC M. SELTZER

AMANDA K. BONN SUSMAN GODFREY L.L.P.1901 Avenue of the StarsSuite 950Los Angeles, CA 90067(310) 789-3100

THOMAS H. BRILL

LAW OFFICE OF THOMAS H. BRILL

8012 State Line Road, Suite 102Leawood, KS 66208(913) 677-2004

February 27, 2015

Counsel for Respondents

*Counsel of Record