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Sunday, June 23, 2024 | Back issues
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Foreign Group Axed Off Telecom Conspiracy Suit

(CN) - A federal judge has tossed parts of a lawsuit alleging that big-name telecommuncations companies conspired with a European standards body to shut out a smaller company.

TruePosition, a cellphone technology developer, failed to show that federal courts have jurisdiction over the European Telecommunications Standards Institute, the court held. It also failed to demonstrate conspiracy, rather than independent action, in the conduct of Ericsson, Qualcomm, Alcatel-Lucent and other companies.

U.S. District Judge Robert Kelly Sr. nevertheless gave TruePosition limited discovery to pursue its claim against the standards institute and leave to amend its complaint against the telecoms.

In a federal lawsuit filed last July in the Eastern District of Pennsylvania, TruePosition claimed that the companies "hijacked" a process to develop new global mobile technology standards called the Third Generation Partnership Project (3GPP). Employees for the telecom giants allegedly circumvented deadlines and otherwise delayed standards development to give their companies' respective technologies a head start in the marketplace and edge out TruePosition's technology.

The European standards board and 3GPP stood by and let the companies manipulate the process even after TruePosition complained about multiple procedural violations at international working-group meetings, the suit says.

TruePosition's technology allows emergency services providers to pinpoint the geographic location of a cellphone, even when it is not in use, by measuring when signals from a handset bounce off various cellphone towers over the cellular network. Other location technologies require installation of software on the handset itself.

In motions to dismiss, the telecoms said TruePosition did not sufficiently allege the existence of an agreement to exclude TruePosition's technology, nor did it demonstrate any actual antitrust injury.

They also argued that it was too soon to tell if TruePosition's technology would be excluded from the 3GPP standards because the process is still underway.

Judge Kelly agreed, noting that TruePosition offered no smoking-gun evidence of an agreement between the parties. Even the circumstantial evidence did not hold up, since nine other companies in the working group would have had to consent if the telecoms excluded TruePosition's technology while adopting a standard for consideration.

The European Telecommunications Standards Institute claimed that the complaint did not prove it had sufficient activity in the United States to confer personal jurisdiction to U.S. courts.

Judge Kelly examined the institute's U.S. connections, including the fact the 51 of its member companies are based here, that it has sponsored working-group meetings here and that it maintains affiliations with American standards-setting organizations.

In the end, Kelly determined that none of these connections amounted to the "continuous and substantial" contacts required for a court to assert jurisdiction over a foreign entity.

"However, TruePosition has presented factual allegations that suggest with 'reasonable particularity' the possible existence of the requisite 'contacts between the party and the forum' based on these relationships," Kelly wrote, citing Toys R Us Inc. v Step Two SA.

Since TruePosition alleges that the institute's connections require ongoing maintenance, Kelly ordered jurisdictional discovery to further explore the organization's U.S. presence.

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