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finding that plaintiff sufficiently alleged that it and defendant were the two significant producers in the relevant market, which allowed for a plausible inference that buyer preferences between the parties were entrenched
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Case No. 14-cv-02238-SI
12-02-2015
SIDENSE CORP., Plaintiff, v. KILOPASS TECHNOLOGY INC., Defendant.
ORDER DENYING DEFENDANT'S MOTION TO DISMISS
Re: Dkt. No. 44
Now before the Court is defendant Kilopass Technology Inc.'s motion to dismiss. Dkt. 44. Pursuant to Civil Local Rule 7-1(b), the Court finds this matter appropriate for resolution without oral argument and VACATES the hearing set for December 4, 2015. Having carefully considered the papers submitted, the Court hereby DENIES the motion.
BACKGROUND
The present dispute requires a summary of the litigation history between the parties.
1. The Patent Infringement Case
In 2010, Kilopass Technology Inc. ("Kilopass") brought suit against Sidense Corp. ("Sidense") alleging patent infringement and several other business torts. Kilopass Tech. Inc. v. Sidense Corp., No. 10-cv-02066 ("Patent Infringement Case"), Dkt. 1 (Complaint).
2. The Business Torts Case
In August 2011, Sidense filed a separate but related lawsuit against Kilopass alleging: (1) Defamation; (2) Unfair Competition under the Lanham Trade-Mark Act, § 43(a), as amended, 15 U.S.C. § 1125(a); (3) Intentional Interference with Contractual Relations; (4) Intentional Interference with Prospective Economic Advantage; and (5) Unfair Competition under California Business and Professions Code § 17200 ("UCL"). Sidense Corp. v. Kilopass Tech. Inc., No. 11-04112 ("Business Torts Case"), Dkt. 1 (Complaint); Dkt. 8 (Order Relating the Case). Several of the allegations in Sidense's original complaint in the Business Torts Case were based on the theory that Kilopass's patent infringement case was a baseless lawsuit. See id. at Dkt. 1.
Kilopass moved to dismiss the Business Torts Case complaint, arguing that it was protected by litigation privilege and that, like malicious prosecution claims, claims predicated on a baseless lawsuit were not ripe until after the underlying litigation had been concluded in the defendant's favor. Id. at Dkt. 10. In response, Sidense voluntarily filed an amended complaint withdrawing its allegations that the Patent Infringement Case was baseless. Id. at Dkt. 11 (First Amended Complaint).
The Court granted in part a second motion to dismiss filed by Kilopass, and Sidense twice amended its pleadings. Id. at Dkts. 35, 40, 56. This left the Third Amended Complaint. Id. at Dkt. 56.
On August 16, 2012, this Court granted in part and denied in part Kilopass's motion for summary judgment on the Third Amended Complaint in the Business Torts Case. Id. at Dkt. 99. This Court granted summary judgment in favor of Kilopass on Sidense's Defamation claims based on the allegations that (1) Kilopass made a statement to a potential customer that Sidense's technology was not commercially viable and (2) Kilopass threatened to sue Sidense's customers and potential customers as patent infringers. Id. at Dkt. 99 at 6-8, 10-11. The Court also granted summary judgment in favor of Kilopass on Sidense's (1) Lanham Trade-Mark Act false advertising claim based on the publishing of a "White Paper"; (2) Intentional Interference with Prospective Economic Advantage claim; and (3) Unfair Competition claim pursuant to the "unfair" and "fraudulent" prongs of the UCL. Id. at Dkt. 99 at 15-16, 19-20.
The Court referred to a second amended complaint its summary judgment order; it is clear, however, that the Court was in fact ruling on the Third Amended Complaint.
The following claims of the Business Torts Case survived summary judgment:
* Defamation with respect to allegations that Kilopass made statements (i) in a
PowerPoint presentation to third parties that Sidense was knowingly offering licenses on invalid patents (Third Amended Complaint ¶ 14); (ii) to Sidense customers informing them that Sidense wanted its licensees to be charged as direct infringers (Third Amended Complaint ¶ 19); and (iii) to customers that Sidense was not financially stable or commercially viable (Third Amended Complaint ¶ 18);Id. at Dkt. 99 at 10, 13-15, 18-20. 3. Completion of the Patent Infringement and Business Torts Cases
* False Advertising with respect to allegations concerning the PowerPoint presentation (Third Amended Complaint ¶ 14);
* Intentional Interference with Contractual Relations; and
* Unfair Competition pursuant to the "unlawful" prong of the UCL
That same day, August 16, 2012, the Court issued its non-infringement order in the underlying Patent Infringement Case, finding that Sidense did not infringe Kilopass's patents. Patent Infringement Case, Dkt. 272.
Shortly thereafter, Sidense stipulated to voluntarily dismiss its remaining claims in the Business Torts Case with prejudice. Business Torts Case, Dkt. 115. In its stipulation, Sidense noted that the Court had adjudicated the underlying patent infringement claim and granted Kilopass's motion for summary judgment on many of Sidense's alleged business torts, thus substantially reducing Sidense's potential damages recovery compared to the cost of continued litigation. Id.
4. The Present Antitrust Lawsuit
Sidense initiated the present antitrust suit on May 14, 2014, alleging that Kilopass "weaponized" the litigation process in the Patent Infringement Case to monopolize, or attempt to monopolize, the market for complimentary metal-oxide-semiconductor logic ("CMOS") embeddable antifuse one-time programmable ("OTP") nonvolatile memory ("NVM") technology. Kilopass Techn. Inc. v. Sidense Corp., No. 14-cv-02238 ("Antitrust Case"), Dkt. 1. In its complaint, Sidense alleged that Kilopass initiated a series of baseless lawsuits in a coordinated campaign to monopolize the CMOS OTP NVM technology market. See id. at Dkt. 1 ¶¶ 8-9, 12, 104. Sidense later amended its antitrust complaint, but the claims against Kilopass remained substantially the same: attempted and actual monopolization of the market pursuant to Section 2 of the Sherman Act, 15 U.S.C. § 2. Id. at Dkt. 37.
Kilopass filed the present motion to dismiss on October 2, 2015, arguing that the claims in Sidense's First Amended Complaint ("FAC") are barred by res judicata because they repeat claims that arise from the same common nucleus of facts as the Business Torts Case that Sidense filed and then dismissed with prejudice. Id. at Dkt. 44 at 7-12.
Kilopass additionally contends that Sidense has not pled sufficient facts establishing a legally cognizable market. Id. at Dkt. 44 at 13-20.
The Court will address each of these arguments in turn.
LEGAL STANDARD
Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint if it fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). This "facial plausibility" standard requires the plaintiff to allege facts that add up to "more than a sheer possibility that a defendant has acted unlawfully." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The Court must assume that the plaintiff's allegations are true and must draw all reasonable inferences in the plaintiff's favor. Usher v. City of L.A., 828 F.2d 556, 561 (9th Cir. 1987). However, "recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 555). As a general rule, the Court may not consider materials beyond the pleadings when ruling on a Rule 12(b)(6) motion. Lee v. City of L.A., 250 F.3d 668, 688 (9th Cir. 2001). Moreover, it is improper for a court to assume "the [plaintiff] can prove facts that [it] has not alleged." Associated Gen. Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 526 (1983).
If the Court dismisses a complaint, it must decide whether to grant leave to amend. The Ninth Circuit has "repeatedly held that a district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts." Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (citations and internal quotation marks omitted).
DISCUSSION
Kilopass argues that Sidense attempts to avoid res judicata on its monopolization claims by strategically amending its complaint and deleting any allegations that overlap with allegations made in the Business Torts Case. Antitrust Case, Dkt. 47 at 6-7. In the alternative, Kilopass contends that Sidense has not sufficiently pled a legally cognizable market or facts establishing barriers to market entry. Id. at Dkt. 44 at 13-19.
Sidense argues that its claims are not barred by res judicata because the claims in the Business Torts Case involved non-litigation conduct during the pendency of the Patent Infringement Case, whereas the claims asserted in the present suit allege that Kilopass initiated the Patent Infringement Case as a sham lawsuit in an effort to monopolize the market. Id. at Dkt. 46 at 13-14. Sidense contends that "any slight [factual] overlap with some of the amended business tort allegations is merely superficial and contextual." Id. at Dkt. 46 at 13. Additionally, Sidense argues that it has properly pled a relevant product market and that any refinement of the market should await factual development. Id. at Dkt. 46 at 14-20.
1. Res Judicata
Kilopass contends that the complaint in this case alleges the same nucleus of facts alleged in the Business Torts Case. Id. at Dkt. 44 at 8-11; Dkt. 47 at 3-4. In support of its argument, Kilopass examines the evolution of Sidense's allegations from the Original Complaint in the Business Torts Case, the Original Complaint in the Antitrust Case, and the First Amended Complaint in the Antitrust Case. Sidense argues that the claims are different and that any overlap is merely superficial and intended to provide context. Id. at Dkt. 46 at 13. The Court agrees with Sidense and finds that the claims brought here are not barred by res judicata.
It is unclear to the Court why Kilopass does not refer to the operative complaint in the Business Torts Case which served as the basis of the summary judgment motion, i.e., the Third Amended Complaint.
A claim barred by res judicata requires "(1) an identity of claims, (2) a final judgment on the merits, and (3) identity or privity between parties." Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 713 (9th Cir. 2001) (internal quotations and citation omitted).
A. Final Judgment and Identity of Parties
The second and third elements are not in dispute. A final judgment on the merits occurred when Sidense voluntarily dismissed the Business Torts Case with prejudice. See Stewart v. U.S. Bancorp, 297 F.3d 953, 956 (9th Cir. 2002) ("The phrase 'final judgment on the merits' is often used interchangeably with 'dismissal with prejudice.'"). The parties are identical: Sidense is the plaintiff and Kilopass the defendant in both the present Antitrust Case and the Business Torts Case. The issue is whether there is an identity of claims.
B. Identity of Claims
"The central criterion in determining whether there is an identity of claims between the first and second adjudications is whether the two suits arise out of the same transactional nucleus of facts." Frank v. United Airlines, Inc., 216 F.3d 845, 851 (9th Cir. 2000) (internal quotations and citation omitted). Although the common nucleus test is often outcome determinative under the first res judicata element, there are other criteria a court may examine in determining whether two suits involve the same claim: (1) whether rights or interests established in the prior judgment would be destroyed or impaired by prosecution of the second action; (2) whether the two suits involve infringement of the same right; and (3) whether substantially the same evidence is presented in the two actions. Mpoyo v. Litton-Electro-Optical Sys., 430 F.3d 985, 987-88 (9th Cir. 2005).
To begin, the Court can see no reason to compare the allegations made in the Original Complaint in the Business Torts Case to the allegations made in the First Amended Complaint in the Antitrust Case, as Kilopass did in its motion. See, e.g., Antitrust Case, Dkt. 44 at 9. As mentioned above, Sidense amended its complaint in the Business Torts Case to remove any references to "baseless lawsuits" because it agreed with Kilopass that the claims were not ripe while the underlying Patent Infringement Case was still pending. See Business Torts Case, Dkt. 14-3 (showing the changes made to the Original Complaint in the Business Torts Case to make it the First Amended Complaint in the Business Torts Case). The Court has instead compared the operative Third Amended Complaint in the Business Torts Case ("BTAC") to the First Amended Complaint in the Antitrust Case ("ATAC").
That comparison yields the conclusion that there is not an identity of claims between the BTAC and the ATAC. The BTAC alleges that Kilopass engaged in unlawful conduct that was not directly related to litigation: Kilopass allegedly made false statements to Sidense's customers and others regarding Sidense's business liability and threatened, in several instances, to sue those customers. See, e.g., BTAC ¶¶ 7-19. The ATAC, on the other hand, alleges that Kilopass "weaponized" the litigation process in an effort to monopolize the market by "forc[ing] Sidense to divert millions of dollars away from its marketplace and technological competition with Kilopass." ATAC ¶ 11. While it mentions scaring away customers, the bulk of the ATAC addresses the alleged sham litigation itself and its effect on Sidense's presence in the market. ATAC ¶¶ 10, 11, 41, 43, 108. Furthermore, as Sidense points out, Kilopass's Motion to Dismiss only takes exception to the supposed "factual overlap" in paragraphs 11, 43, 55, 88, and 101 of the ATAC (and these comparisons were all made against the Original Complaint in the Business Torts Case). Antitrust Case, Dkt. 44 at 5, 9-13.
Specifically, comparison of the roughly analogous allegations in the two complaints demonstrates the following:
| Third Amended Compl., Business TortsCase ("BTAC") | First Amended Compl., Antitrust Case("ATAC") |
|---|---|
| "KILOPASS and CHENG began contactingSIDENSE customers and potential customersthreatening to imminently sue them as patentinfringers . . . falsely asserting that its [patents]were broad enough to cover SIDENSE's 1TTMFuse memory products." BTAC ¶ 17. | No corresponding allegation regarding threatsmade against Sidense customers. |
| "KILOPASS . . . published [the "WhitePaper"] . . . implying that the bit cellsillustrated therein depicted 'the Kilopass 1Tand 2T' patented antifuse cells. However, thebit cell illustration . . . actually depictedSidense's 1T bit cell." BTAC ¶ 11 (alterationsomitted). | No corresponding allegation regardingmisleading publications. |
| Kilopass made a statement that was "false,misleading and designed to make it appear thatSidense, which was founded in 2004, enteredinto business to copy Kilopass'[s] 1Ttechnology." BTAC ¶ 12. Kilopass made a"false, misleading statement [] designed tomake it appear that Sidense . . . entered intobusiness to copy Kilopass'[s] 1T technology,which is demonstrably untrue." Id. | No corresponding allegations regarding falseor misleading statements. |
| "KILOPASS and CHENG began publishingstatements falsely indicating that SIDENSE's[patent was invalid] . . . , thereby foreclosingSIDENSE from challenging the validity of thatpatent." BTAC ¶ 15. | No corresponding allegations regarding falsestatements made about Sidense's patents. |
| "KILOPASS and CHENG began tellingcustomers and potential customers thatSIDENSE was refusing to take responsibilityfor its costumers' allegedly infringing chipsand that SIDENSE was telling the Court thatits customers, rather than SIDENSE, should besued for patent infringement." BTAC ¶ 19. | No corresponding allegations regardingSidense's refusal to take responsibility for itscustomers' alleged patent infringement. |
| "KILOPASS'[s] and CHENG's acts [may havedeceived Sidense's customers and potentialcustomers] and were material in that they werelikely to influence the purchasing decisions ofthose in the marketplace." BTAC ¶ 29. | No corresponding allegation regardingpurchasing decisions and, contrary toKilopass's contention, BTAC ¶ 29 was notalleged in the context of patent litigation. SeeAntitrust Case, Dkt. 47 at 2. |
| Kilopass's conduct described in the complaint"is malicious, fraudulent, knowing, willful, anddeliberate." BTAC ¶ 30. | "Kilopass initiated and maintained patentinfringement litigation against Sidense in badfaith knowing there was no infringement."ATAC ¶ 86 (though the conduct the BTACdescribes is statements made about Sidense'spatents, not pursuit of underlying patentinfringement). |
| "[T]hat Kilopass would imminently file suitagainst Sidense's customers if they would use,or continue to use, Sidense's technology . . . . | "Kilopass began plotting to block Sidense'sprogress with its patent portfolio." ATAC ¶ 5.Allegations that Kilopass was advised that |
| that Sidense refused to take responsibility forits customers' chips that contain the embeddedSidense OTP in Kilopass'[s] lawsuit againstSidense." BTAC ¶ 22. | Sidense did not infringe Kilopass's patents.ATAC ¶¶ 18-24. |
| Kilopass made false statements regardingSidense's business "with the knowledge thatthey were false, and with spite, hatred, and illwill toward SIDENSE." BTAC ¶ 23. | Allegations that (1) Kilopass was advised thatSidense did not literally infringe Kilopass'spatents, (2) how Kilopass hired a new CEOlooking to use the litigation process to preventSidense from competing and stifling entryfrom other would-be competitors, (3) Kilopasscontinued pursing litigation even after it lostthe patent infringement suit on the merits in anattempt to interfere with Sidense's business.ATAC ¶¶ 5-10. "Kilopass knew, or shouldhave known, that Sidense did not infringe . . .Kilopass lacked probable cause or good faithbelief for its assertion of literal patentinfringement . . . Kilopass also plainly lackedprobable cause for the assertion of patentinfringement by equivalence . . ." ATAC¶¶ 39-41. |
| "As a result of KILOPASS'[s] and CHENG'sdefamatory statements, SIDENSE has sufferedloss of customers, harm to its reputation andwas exposed to contempt." BTAC ¶ 24. | As a "result of Kilopass'[s] anticompetitiveconduct, and sham litigation, Sidense has . . .sustained a loss of goodwill." ATAC ¶ 105,121 (the harm is similar but the allegedunderlying conduct is different). |
| "[S]tating in a press release that [the '751patent was affirmed] foreclose[ing] SIDENSEfrom challenging the validity of that patent."BTAC ¶ 28; see also supra BTAC ¶¶ 29-30."KILOPASS and CHENG acted bothoppressively and maliciously with intent tocause injury to SIDENSE," BTAC ¶ 40, inmaking statements "designed to interfere withand disrupt SIDENSE's relationships withexisting and prospective customers." BTAC¶ 39. | "The purpose of Kilopass'[s] sham patentinfringement suit was not to win on the meritsbut to interfere directly with Sidense's actualand prospective business relationships."ATAC ¶ 42 (in contrast, the BTAC alleges thestatement made in the press release washarmful to Sidense rather than the shamlawsuit). |
|---|---|
| Kilopass offered to pay for an editor, Mr. CliveMaxfield, to write an article "to make it falselyappear that the information and viewpointsappearing in the article were independent andunbiased observations of . . . the EE Times . . .implying that . . . the EE Times hadindependently, and without bias, concludedthat companies whose products embodySIDENSE's technology could be exposed tocostly litigation." BTAC ¶ 16. | No corresponding allegation regarding eitherthe EE Times or its editor, Mr. Clive Maxfield. |
| Kilopass emailed to customers and potentialcustomers falsely stating that, "US and PatentTrademark Office Invalidates All Claims ofSidense's Key Patent." BTAC ¶ 13. See alsosupra, BTAC ¶¶ 15, 17, 19. | The Patent Infringement Case "forcedKilopass'[s] only significant competitor,Sidense, to divert [resources] away fromdeveloping technology and marketplacecompetition to defend the lawsuit and respondto customer concerns engendered byKilopass'[s] aggressive lawsuit publicity.ATAC ¶ 43. "Kilopass'[s] disinformationcampaign is not protected petitioning activity." |
| ATAC ¶ 88. "Kilopass'[s] baseless patentlitigation scare[d] customers away from doingbusiness with Sidense." ATAC ¶ 11."Kilopass'[s] conduct has additionally causedSidense to incur substantial internal costs . . .to specifically deal with customer concernsregarding Kilopass'[s] patent litigation."ATAC ¶ 101. | |
| Kilopass told "Sidense customers and/orpotential customers that, based uponKilopass'[s] own 'in silicon' evaluation,Sidense's technology was not commerciallyviable, whereas Kilopass knew or should haveknown that these representations were false"BTAC ¶ 10. | "Kilopass told prospective customers thatKilopass had built and tested the Sidensetechnology and found it could not becommercially viable, even though Kilopasshad never conducted tests on a Sidense productthat might lead to such a conclusion." ATAC¶ 31 (this was provided for context surroundingthe antitrust claims). |
| Kilopass made false statements that Sidense'spatents were invalid, Sidense's customers wereat risk of being sued, and Kilopass's conductinfluenced the purchasing decisions of buyersin the marketplace. See supra BTAC ¶¶ 15,19, 29 | "Kilopass'[s] illegal conduct preventedprospective competitors from entering therelevant market." ATAC ¶ 91. "Kilopass'[s]baseless patent litigation scare[d] customersaway from doing business with Sidense."ATAC ¶ 11 (similar harm, different conduct)."Kilopass'[s] conduct has harmed competitionin the market by checking customers andpotential customers . . . from doing businesswith Sidense out of concern that use of theSidense technology would cause them andtheir end user customers to become liable forpatent infringement." ATAC ¶ 97 (against,similar harm based upon different conduct).Allegations regarding Kilopass's price listsestablished during the Patent InfringementCase and direct evidence that Kilopass hadmarket power. ATAC ¶ 68-70. |
|---|
The highlighted portion above is the only instance where, cosmetically at least, the ATAC appears to overlap on the facts of the BTAC. But Sidense urges, this factual overlap appears merely to provide context for the causes alleged in the Antitrust Complaint. While the resulting harm might be similar if all of the allegations were true — a loss of business to Sidense — the claims do not arise from the same transactional nucleus of facts.
Accordingly, the claims brought by Sidense in the present suit are not barred by res judicata.
Having found that res judicata does not bar Sidense's antitrust claims, the Court need not address whether or not Kilopass acquiesced to Sidense's right to reassert them. See Antitrust Case, Dkt. 46 at 6-7. --------
2. Relevant Market
Kilopass argues that Sidense has failed to plead facts that establish a legally cognizable market. Antitrust Case, Dkt. 44 at 13-16. As with its res judicata argument, Kilopass makes several references to the Original Complaint in the Business Torts Case and the Original Complaint in the Antitrust Case. Id. at Dkt. 44 at 13-16. Kilopass contends that Sidense's amendments do not express any actual changes to the relevant market. Id. at Dkt. 44 at 14. It further argues that the artificially narrowed market should be rejected. Id. at Dkt. 47 at 13. Sidense contends that it has alleged the "market for CMOS embeddable antifuse OTP NVM intellectual property" as a recognized market. Id. at Dkt. 46 at 15.
On a Rule 12(b)(6) motion, "the validity of the 'relevant market' is typically a factual element rather than a legal element." Newcal Indus., Inc. v. Ikon Office Solution, 513 F.3d 1038, 1045 (9th Cir. 2008). "[A]lleged markets may survive scrutiny under Rule 12(b)(6) subject to factual testing by summary judgment or trial." Id. Drawing all reasonable inferences in Sidense's favor, and assuming that all of its allegations are true, the Court need not determine what the relevant market should be. The Court need only determine if Sidense's market allegations are plausible as pled.
The Court finds that Sidense has sufficiently pled the relevant market for its antitrust claims. See generally Antitrust Case, Dkt. 37 ¶¶ 61-65. Sidense alleges that the relevant market is "for CMOS embeddable antifuse OTP intellectual property." Id. at Dkt. 37 ¶ 57. Sidense describes the technologies that embeddable NVM products are based on. Id. at Dkt. 37 ¶ 61. It then explains how different technologies are chosen, and the factors affecting the market. Id. at Dkt. 37 ¶ 61-62. Simply put, Sidense has plausibly alleged a technology market in which Kilopass and Sidense compete.
Taken as true, Sidense has sufficiently pled a relevant market.
3. Barriers to Entry
Insofar as Kilopass is arguing that Sidense has failed to plead facts sufficient to establish barriers to market entry, the Court is also unpersuaded. Kilopass argues that Sidense does not allege any barriers to market entry that fit neatly into the categories set forth in Rebel Oil Co., Inc. v. Atlantic Richfield Co.:
Entry barriers are "additional long-run costs that were not incurred by incumbent firms but must be incurred by new entrants," or "factors in the market that deter entry while permitting incumbent firms to earn monopoly returns." The main sources of entry barriers are: (1) legal license requirements; (2) control of an essential or superior resource; (3) entrenched buyer preferences for established brands; (4) capital market evaluations imposing higher capital costs on new entrants; and, in some situations, (5) economies of scale.51 F.3d 1421, 1439 (9th Cir. 1995) (internal citations omitted) (emphasis added). However, Kilopass appears to interpret Rebel Oil's list of factors as the only sources of barriers to entry rather than the main sources. "In evaluating entry barriers, we focus on their ability to constrain not 'those already in the market, but . . . those who would enter but are prevented from doing so.'" Id. at 1439 (citations omitted) (alterations in original).
Sidense alleges that entering the CMOS embeddable antifuse OTP NVM intellectual property market requires a substantial cost that would deter many firms from entering the market. Antitrust Case, Dkt. 37 ¶ 80. Furthermore, the time investment required in evaluating the technologies — incorporating the risk that the technology is defective, leading to financial failure or ruin — likely also deters new entrants to the market. Id. at Dkt. 37 ¶ 81. Moreover, Sidense has alleged that it and Kilopass are the two significant producers in the current relevant market allowing for a plausible inference that buyer preferences between the parties have been entrenched. Therefore, Sidense has sufficiently pled barriers to market entry.
CONCLUSION
For the foregoing reasons and for good cause shown, the Court hereby DENIES Kilopass's motion to dismiss.
IT IS SO ORDERED. Dated: December 2, 2015
/s/_________
SUSAN ILLSTON
United States District Judge