• On August 3, 2011, the United States Court of Appeals for the Second Circuit affirmed the Southern District of New York’s dismissal of Siti-Sites.com’s antitrust suit against, among others, Verizon Communications and Allied Security Trust for allegedly conspiring to block companies from licensing or selling products using certain telecommunications patents in which Siti-Sites has a financial interest. Pursuant to a settlement agreement with MLR LLC, Siti-Sites had acquired 40 percent of the gross proceeds that would be earned by MLR LLC through the sale or licensing of the patents in question. In its suit, Siti-Sites alleged that the telecommunications companies were consolidating patents under Allied Security Trust in an effort to freeze out smaller patent holders like MLR and Siti-Sites. The Second Circuit agreed that such a derivative financial interest was not enough to give Siti-Sites standing to sue for alleged antitrust violations relating to MLR’s patents. The court ruled that “it is plain from its pleadings that any alleged antitrust injury Siti suffered is derivative” in that “Siti owns only the contractual right to a percentage of MLR’s gross proceeds.” Siti-Sites, Inc. v. Verizon Commc’ns, Inc., No. 11-65 (2d Cir.).
  • On July 29, 2011, the United States District Court for the District of Columbia dismissed the complaint of Sandwich Isles Communications against the National Exchange Carrier Association (NECA) on the ground that it lacks jurisdiction over the case. Sandwich Isles had sued NECA for its refusal to include certain costs in NECA’s Traffic Sensitive Pool. But it already had filed a Petition for Declaratory Ruling at the FCC Wireline Competition Bureau on the same matter. The Bureau agreed that NECA should have included some, but not all, of the costs, and Sandwich Isles then filed a petition for reconsideration in October 2010, to seek full reimbursement of those costs. In the federal suit, the district court agreed with NECA that “plaintiffs are seeking review of an FCC order, and since the court of appeals has exclusive jurisdiction to review final orders of the agency, this Court lacks jurisdiction to hear the case.” The court found it immaterial that the court case “raises different claims, … includes new parties, and much of the relief sought cannot be obtained in the FCC proceeding.” The court also held that, even if it had jurisdiction, it would still have dismissed the case under the doctrine of primary jurisdiction. The dismissal was without prejudice, in that Sandwich Isles may bring future claims “should they be viable, after the FCC proceedings, and any appeals, are final.” Sandwich Isles Commc’ns, Inc. v. Nat’l Exch. Carrier Ass’n, No. 10-02341 (D.D.C.).