Judge Baylson: Motion to Dismiss GRANTED

In Silicon Economics, Inc. v. Financial Accounting Foundation, C.A. No. 11-163 (D. Del. August 17, 2011), Judge Baylson granted a motion to dismiss for lack of standing, after the plaintiff failed to show an actual injury.

The originates from the terms of service of the website of the Financial Accounting Standards Board (“FASB”). The founder of plaintiff Silicon Economics, Inc (“SEI”), Joel Jameson, apparently submitted comments to the FASB via its website; those comments included the idea that resulted in the patent at issue, which covers an accounting “equation.” Id. at 2. Later, Jameson realized that the terms and conditions of the website included a clause granting the FASB a license to use information and ideas submitted “for any purpose.” Id. at 3.

After noticing the terms, Jameson contacted the FASB; SEI now alleges that the FASB claimed an ownership interest in the patent. In response, SEI filed the present action (after attempting one in California), and asserts Sherman act claims, as well as California law unfair competition claims.

The Court dismissed all of the claims. SEI has no standing, because it cannot show any actual injury — the only alleged injury was to its reputation, but it provided no specifics. Further, it failed to allege sufficient facts in favor of its anti-trust claim, because it failed to show that the challenged conduct (the seeking of public comment) was commercial in nature. The Court did, however, grant leave to amend the complaint to address these issues.

Interestingly, the Court noted that counsel for the Defendants has “unconditionally renounced any ownership interest” in the patent. Id. at 17-18. Therefore, according to the Court, the “positions of the parties should be amenable to a settlement,” and that “prolonged litigation . . . do[es] not seem to be necessary.” Id.

Silicon (11-163)

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