In November 2012, the Federal Circuit held that a direct purchaser of a product is not precluded from bringing a Walker Process claim against the patentee, simply because the direct purchaser would not have standing to seek declaratory relief under the patent laws. The case is Ritz Camera & Image v. SanDisk Corp., No. 2012-1183 (Fed. Cir. Nov. 20, 2012).

In the usual case, an alleged infringer can assert an antitrust claim alleging that the patentee obtained its patent fraudulently from the U.S. Patent and Trademark Office; this is known as a Walker Process claim. In addition to showing that the patentee procured the patent fraudulently, the alleged infringer also must show all the other elements of a monopolization claim. In Ritz Camera, Ritz filed a Walker Process claim as a direct purchaser of SanDisk products, claiming that SanDisk enforced fraudulently obtained patents against its competitors and customers, which caused direct purchasers of SanDisk products, like Ritz, to pay more than they would have paid in a competitive market. SanDisk moved to dismiss the complaint, arguing that since Ritz did not face the possibility of an infringement action, it had no standing to assert a Walker Process claim.

The district court rejected SanDisk’s argument and the Federal Circuit agreed, holding that “Ritz’s status as a direct purchaser gives it standing to pursue its Walker Process claim even if it could not have sought a declaratory judgment of patent invalidity or unenforceability.” In sum, the ruling allows direct purchasers to assert Walker Process claims even if they are not sued, or threatened with suit, in an infringement action. The decision, coupled with similar decisions, presents risks for patent holders seeking to enforce patents, and enables purchasers of the products to seek antitrust damages for overcharges they may have paid. The Federal Circuit’s decision relied in part on the 2nd U.S. Circuit Court of Appeals’s decision, In re DDVAP Direct Purchaser Antitrust Litigation, 585 F.3d 677, 689-92 (2d Cir. 2009), in which the court held that direct purchasers have standing to pursue Walker Process claims despite the fact that, as purchasers, they could not directly challenge the patent’s validity. In November 2012, the district court ruled that indirect purchasers also have standing to pursue Walker Process claims, and further ruled that those claims were not pre-empted by federal law. The decision is available here.