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Re: Hey Terekhov: Wallace lost. Who'd guess.... ;)
From: |
Alexander Terekhov |
Subject: |
Re: Hey Terekhov: Wallace lost. Who'd guess.... ;) |
Date: |
Tue, 16 May 2006 22:35:45 +0200 |
Alexander Terekhov wrote:
[...]
> See "STANDING ON SHAKY GROUND: THE STRANGELY ELUSIVE DOCTRINE OF
> ANTITRUST INJURY":
>
> http://www.rdantitrustlaw.info/shaky.pdf "More generally, competitors
> may never be heard to complain of artificially low prices unless they
> are predatory, because it is only predatorily low prices that threaten
> injury to competition.94 94) Id. at 33940. The Court's discussion was
> consistent with the Brunswick dictum on predatory pricing. See
> Brunswick, 429 U.S. at 489 n.14 (where there is true predation (not
> just uncomfortably aggressive price cutting), a competitor's lost
> profits do count as antitrust injury, even though the predatory
> practice temporarily benefits consumers)."
>
> http://www.justia.us/us/495/328/case.html
>
> "Although a vertical, maximum-price-fixing agreement is unlawful under
> 1 of the Sherman Act, it does not cause a competitor antitrust injury
> unless it results in predatory pricing." -- U.S. Supreme Court
>
> And Judge Tinder clearly erred.
>
> Hopefully Judge Young will do better.
Judge Young also erred.
-----
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
DANIEL WALLACE,
Plaintiff,
vs.
INTERNATIONAL BUSINESS
MACHINES CORPORATION; RED HAT,
INC.; and NOVELL, INC.,
Defendants.
)))
) 1:05-cv-678 RLY-VSS
)))))
ENTRY ON DEFENDANTS MOTIONS TO DISMISS
In his Second Amended Complaint, Plaintiff Daniel Wallace (Wallace)
brings a claim against International Business Machines Corporation, Red
Hat, Inc., and Novell, Inc. (collectively, Defendants) for restraint
of trade by way of a licensing scheme to fix the prices of computer
software. (See Second Amended Complaint at 1). This matter is before
the court on Defendant International Business Machines Corporations
Motion to Dismiss, in which Defendants Red Hat and Novell join, and on
Defendants Red Hat and Novells joint Motion to Dismiss.
I. Background
Wallace accuses Defendants of conspiring with Free Software Foundation,
Inc.,1 [1 Wallaces claims against Free Software Foundation, Inc. were
dismissed in a separate cause of action, Wallace v. Free Software
Foundation, Inc., 1:05-cv-0618-JDT-TAB (S.D.Ind. 2006) (Tinder, J.).]
and others, to pool and cross license their copyrighted intellectual
property in computer programs that are collectively known as the Linux
(or GNU/Linux) operating system. (Second Amended Complaint at 2). The
result of this conspiracy, according to Wallace, is the foreclosure of
competition in the market for computer operating systems and the
prevention of Wallace from marketing his own computer operating system.
(Id. at 2-3). Wallace brings his action pursuant to 15 U.S.C. § 26 (§
16 of the Clayton Act).2 [2 In his Response to Red Hat and Novells
Motion to Dismiss, Wallace also claims to bring his action under 15
U.S.C. § 1 (§ 1 of the Sherman Act).] The General Public License, or
GPL, that is the subject of Wallaces complaint is part of the
framework commonly known as open source software. (Brief in Support
of Red Hat and Novells Motion to Dismiss at 2). Licensees of computer
programs that are licensed pursuant to the GPL are not charged for the
license, but are required to license any derivative works that they
create using the licensed software under the same terms and
conditions . . . . (Id.; see also Ex A (GPL)). Wallace argues that
the GPL fixes the price of all derivative works at zero, or free, and
he claims that this amounts to predatory price fixing. (Response to Red
Hat and Novells Motion to Dismiss at 5).
II. Motion to Dismiss Standard
When considering a motion to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(6), the court examines the sufficiency of the complaint,
not the merits of the lawsuit. Fed. R. Civ. P. 12(b)(6); United States v.
Clark County, Ind., 113 F.Supp.2d 1286, 1290 (S.D. Ind. 2000). The court
will dismiss a complaint for failure to state a claim only if it
appears beyond doubt that the plaintiff can prove no set of facts in
support of his claim which would entitle him to relief. Hamlin v.
Vaudenberg, 95 F.3d 580, 583 (7th Cir. 1996) (quoting Conley v. Gibson,
355 U.S. 41, 45-46 (1957)). In making its determination, the court
accepts the allegations in the complaint as true, and it draws all
reasonable inferences in favor of the plaintiff. Mallett v. Wisconsin
Div. of Vocational Rehabilitation, 130 F.3d 1245, 1248 (7th Cir. 1997);
Porter v. DiBlasio, 93 F.3d 301, 305 (7th Cir. 1996). The court will
also consider facts presented in exhibits attached to the complaint.
See, Zinermon v. Burch, 494 U.S. 113.
III. Analysis
Wallace alleges that the Defendants predatory price-fixing scheme
prevents [him] from marketing his own computer operating system as a
competitor. His complaint fails because it fails to allege
anticompetitive effects in an identifiable market. Car Carriers, Inc.
v. Ford Motor Company, 745 F.2d 1101 (7th Cir. 1984) (affirming dismissal
based on failure to allege an anticompetitive effect).
Antitrust laws are for the protection of competition, not competitors.
Brunswick Corp. v. Pueblo Bowl-o-Mat, Inc., 429 U.S. 477, 488 (1977). In
this case, the GPL benefits consumers by allowing for the distribution of
software at no cost, other than the cost of the media on which the
software is distributed. (Ex. A at ¶ 1). When the plaintiff is a poor
champion of consumers, a court must be especially careful not to grant
relief that may undercut the proper functions of antitrust. Ball Meml
Hosp., Inc. v. Mutual Hosp. Ins., Inc., 784 F.2d 1325, 1334 (7th Cir.
1986). Because he has not identified an anticompetitive effect, Wallace
has failed to allege a cognizable antitrust injury.
Wallace has had two chances to amend his complaint, after Defendants
highlighted the deficiencies discussed herein. His continuing failure to
state an antitrust claim indicates that the complaint has inherent
internal flaws. Car Carriers, Ic, 745 F.2d at 1105. Wallace will not be
granted further leave to amend his complaint because the court finds
that such amendment would be futile. See Shanahan v. Chicago, 82 F.3d
776 (7th Cir. 1996).
IV. Conclusion
Defendant International Business Machines Corporations Motion to
Dismiss (Docket #51) and Defendants Red Hat, Inc. and Novell, Inc.s
Motion to Dismiss (Docket #53) are granted. Wallaces complaint is
hereby dismissed with prejudice.
Dated: May 16, 2006.
-----
regards,
alexander.
- Re: Hey Terekhov: Wallace lost. Who'd guess.... ;),
Alexander Terekhov <=
- Re: Hey Terekhov: Wallace lost. Who'd guess.... ;), Alexander Terekhov, 2006/05/16
- Re: Hey Terekhov: Wallace lost. Who'd guess.... ;), Alexander Terekhov, 2006/05/16
- Re: Hey Terekhov: Wallace lost. Who'd guess.... ;), Miles Bader, 2006/05/16
- Re: Hey Terekhov: Wallace lost. Who'd guess.... ;), David Kastrup, 2006/05/17
- Re: Hey Terekhov: Wallace lost. Who'd guess.... ;), Alexander Terekhov, 2006/05/17
- Re: Hey Terekhov: Wallace lost. Who'd guess.... ;), David Kastrup, 2006/05/17
- Re: Hey Terekhov: Wallace lost. Who'd guess.... ;), Alexander Terekhov, 2006/05/17
- Re: Hey Terekhov: Wallace lost. Who'd guess.... ;), David Kastrup, 2006/05/17
- Re: Hey Terekhov: Wallace lost. Who'd guess.... ;), Alexander Terekhov, 2006/05/17
- Re: Hey Terekhov: Wallace lost. Who'd guess.... ;), David Kastrup, 2006/05/17