Wednesday, June 23, 2021

Apple withdraws from antitrust action against Fortress Investment and multiple Fortress-funded companies--now Intel is the sole remaining plaintiff

After reporting last week on Apple and Intel's response to Fortress Investment's motion to dismiss their second amended antitrust complaint in the Northern District of California, I noted on Twitter that "[t]his is that (nowadays quite rare) case in which Apple is an antitrust plaintiff, not defendant." Since then, Apple has had another antitrust investigation to add to the list of cases in which it's being investigated: the German Bundeskartellamt (Federal Cartel Office) is looking into the App Store's gatekeeper position.

At this point, Apple is exclusively an antitrust defendant. On Monday, Apple filed the following notice of dismissal with the United States District Court for the Northern District of California (this post continues below the document):

21-06-21 Apple Notice of Di... by Florian Mueller

The actual notice is so short--just two paragraphs--that I'll also provide it here:

"Plaintiff Apple Inc., pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(i), hereby gives notice that it (1) dismisses from this action with prejudice its claims against defendants Fortress Investment Group LLC; Fortress Credit Co. LLC; Uniloc 2017 LLC; Uniloc USA, Inc.; Uniloc Luxembourg S.A.R.L.; INVT SPE LLC; Inventergy Global, Inc.; and IXI IP, LLC, and (2) dismisses from this action without prejudice its claims against defendant VLSI Technology LLC.

"None of the defendants have filed an answer to the Second Amended Complaint (or as to any prior complaint) or for summary judgment as to these claims. Dismissal under Rule 41(a)(1)(i) is therefore appropriate."

The fact that only the claims against VLSI are dismissed without prejudice, but all others with prejudice, makes it a possibility that some infringement disputes have been settled. It could also be that Apple determined it simply had no antitrust claims against those other entities, but is not so sure about VLSI.

One important Fortress-funded company is presumably still suing Apple in Munich: VoiceAge EVS. But VoiceAge wasn't a party to the California antitrust case anyway.

For Apple, the key benefit from this strategic retreat is that it's now consistently an antitrust defendant that argues intellectual property right holders should not be restricted in how they exploit their assets. That's what we heard from Apple's lead counsel toward the end of the recent Epic Games v. Apple closing arguments. In that case, Apple attempts to draw an analogy to FTC v. Qualcomm, as does Fortress in the case from which Apple is now dropping out.

Intel was prepared to take on Fortress all by itself: it sued in October 2019. Then Intel withdrew that complaint only to refile a joint complaint with Apple the following month. Now Intel is the sole plaintiff again, more than a year and a half later.

Apple's withdrawal from the Fortress case is just the latest example of partnerships between Apple and Intel coming to an end. The two companies were the key U.S. complainants over Qualcomm's business model until Apple felt it couldn't rely on Intel's ability to deliver competitive 5G baseband chips in time. Intel still filed an amicus brief in FTC v. Qualcomm at a time when Apple had settled. Apple then bought Intel's baseband chipset division and many related patents. In late 2020, "Apple began the transition from Intel processors to Apple silicon in Mac computers."

Share with other professionals via LinkedIn: