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Last May, when we talked to a New Jersey lawyer-turned-entrepreneur named Lawrence Powers about his audacious suit against the patent aggregator Allied Security Trust and four telecom giants, we focused on Powers’s allegations that Allied and the telecoms were engaged in an vast conspiracy to drive down the cost of tech patents. In passing, we noted that Powers’s tiny company, the bankrupt SITI-Sites, “shares an interest” in 18 wireless spectrum technology patents with a patent holding company called MLR LLC. That tenuous connection to MLR’s patents turned out to be SITI-Sites undoing. Last week, Manhattan federal district court judge Denise Cote dismissed Powers’s case with prejudice, finding that SITI did not have standing to bring an antitrust claim because the company couldn’t show it suffered harm as a result of the alleged conspiracy. “The direct victim of the alleged antitrust violations outlined in the complaint is MLR,” Judge Cote wrote, noting that SITI’s own public filings clearly disavow any ownership rights to the MLR patents. “Because SITI does not own the patents at issue…its injury is derivative of any injury sustained by MLR. SITI has only a contractual right to receive a percentage of MLR’s gross proceeds, and thus has an interest as a creditor in the success of MLR’s business. This economic interest is too indirect to constitute an antitrust injury and to confer standing upon SITI.” Powers and his counsel, Gary Gilliam Cooper of Cooper & McCann, faced quite a formidable lineup of defense counsel. Kellogg, Huber, Hansen, Todd, Evans & Figel represented Verizon and Allied Security execs Daniel McCurdy and Brian Hinman. Morrison & Foerster represented Allied Security. Simpson Thacher & Barltett was counsel to Cisco, Ericsson, and Sony Ericsson. Kellogg Huber took the lead on the joint defense motion to dismiss, which challenged Powers’s conspiracy theory as well as his standing; Judge Cote ruled on the motion to dismiss without hearing oral argument. “Certainly standing was one of the keys,” said Cisco counsel Henry Gutman of Simpson. “It’s a threshold issue.” Aaron Panner of Kellogg Huber declined to comment. Allied Security CEO McCurdy told us the defendants were “obviously very pleased” with Judge Cote’s dismissal of the suit. “It’s always been our view that there is no basis of any kind for the complaint,” he said. “It was ludicrous.” Powers declined comment when we asked if he planned to appeal the dismissal. “I haven’t lost confidence in the merits of our case,” he said.

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