Michael W. Scarborough

Scarborough is chair of the global antitrust & competition group at Sheppard Mullin, where he represents clients including Samsung Electronics Co. Ltd., Continental Automotive Systems and Mastercard Inc.

In August 2019 he persuaded U.S. District Judge Beth Labson Freeman of San Jose to dismiss Sherman Act and Cartwright Act antitrust accusations brought by Texas cybersecurity product testing firm NSS Labs Inc. over anti-malware standing setting and testing issues. Among the defendants was Scarborough's client, San Diego-based ESET LLC, a maker of security software. The plaintiff contended that the defendants conspired with an independent testing standards group to deny it business because their products allegedly could not stand up to stricter testing scrutiny. NSS Labs Inc. v. ESET LLC, 3:18-cv-05711 (N.D. Cal., filed Sept. 18, 2018).

It was one skirmish in an ongoing battle over technology standards setting that Trump Administration regulators have joined with warnings against overly broad interpretations of existing law that, if adopted by courts, would arguably weaken the Standards Development Organization Advancement Act of 2004.

"The DoJ got involved in this civil litigation," Scarborough said, referring to the U.S. Department of Justice. "The DoJ cares a lot about standard setting, and the relationship between antitrust and intellectual property matters is a big agenda item for this administration."

Scarborough has opposed DoJ positions regarding the law. He's currently lead antitrust attorney on the team representing telematics supplier Continental Automotive Systems in its suit against three large holders of patents essential to cellular phone standards, accusing them of colluding via patent pool Avanci LLC to artificially inflate royalties. Continental Automotive Systems Inc. v. Avanci, 19-cv-02933 (N.D. Texas, transferred from N.D. Cal. Dec. 12. 2019).

Department of Justice antitrust lawyers intervened to contend that Continental's complaint does not accuse Avanci of unlawful exclusionary conduct because its alleged "deception" about its licensing rates does not amount to law-breaking. The government also argued that imposing antitrust liability for violating fair, reasonable and non-discriminatory (FRAND) rates would amount to over-deterrence.

Wrote Scarborough in court papers opposing government intervention, "these recently promulgated policy positions by DOJ's current leadership run directly counter" to a broad consensus on the standard setting issue that has existed for more than a decade. He cited a letter from 77 former government enforcement officials and professors of law, economics and business observing that "patentees that obtain or maintain monopoly power as a result of breaching a FRAND commitment present a standard monopolization case."

"There's been no decision on DoJ's position yet," Scarborough said. "What happens with our Continental case could give guidance."

-- John Roemer