Federal Circuit Permits Purchasers to Assert Walker Process Antitrust Claims Even When Not Threatened With a Patent Infringement Action: The Federal Circuit Concludes That a Party Asserting a Walker Process Antitrust Claim, Which Is Premised on Obtaining a Patent by Fraud, Need Not Have Standing to Challenge the Validity of the Patent

Sullivan & Cromwell LLP - November 27, 2012

On November 20, 2012, a three-judge panel of the U.S. Court of Appeals for the Federal Circuit issued an opinion in Ritz Camera & Image, LLC v. SanDisk Corp., addressing, for the first time, the issue of whether a direct purchaser of goods has standing to bring a Walker Process antitrust claim even where the purchaser “faces no threat of an action for patent infringement and has no other basis to seek a declaratory judgment holding the patent invalid or unenforceable.” A Walker Process antitrust claim requires a plaintiff to prove (i) that the defendant procured the patent through “knowing and willful fraud on the” U.S. Patent and Trademark Office (“PTO”), and (ii) all elements of a Sherman Act monopolization charge. Although these claims are often brought in response to an actual or potential claim of patent infringement, the Federal Circuit in Ritz held that “a direct purchaser is not categorically precluded from bringing a Walker Process antitrust claim, even if it would not be entitled to seek declaratory relief against the patentee under the patent laws.” As a result, patent-holders may be sued by any number of parties who can allege that they paid inflated prices for goods protected by patents.