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Paul, Weiss Wins Dismissal with Prejudice of Antitrust Claim Against DVD Licensor

Paul, Weiss won a major victory for its client DVD FLLC in achieving the dismissal, with prejudice, of a complaint by EcoDisc AG alleging violations of the antitrust laws and false advertising.

The plaintiff, EcoDisc, is a promoter of a brand of "thin DVDs," which are half the thickness of standard DVDs. DVD FLLC licenses the standard DVD formats developed and promulgated by The DVD Forum. EcoDisc alleged that DVD FLLC violated the Sherman Act, the Lanham Act and various state laws by announcing to its licensees that "thin" discs do not comply with the standard DVD specifications and that manufacture of such discs could be a breach of the license agreement.

Earlier this year, Paul, Weiss successfully moved Judge Mariana Pfaelzer of the U.S. District Court for the Central District of California to dismiss the complaint on the ground that DVD FLLC's communications with its licensees were constitutionally protected litigation-related activity and therefore entitled to immunity under the Noerr-Pennington doctrine. The court, however, granted EcoDisc leave to amend to attempt to plead that DVD FLLC's conduct was a "sham," i.e., that DVD FLLC had no reasonable basis for objecting to its licensees making EcoDiscs.

On July 20, the court dismissed the amended complaint with prejudice, ruling that EcoDisc had failed to meet its pleading burden, and that further amendment would be futile. In her opinion, Judge Pfaelzer also held that the Noerr-Pennington doctrine, originally developed in the antitrust context, provides similar immunity from liability under the Lanham Act, and dismissed EcoDisc's Lanham Act claim accordingly.

Involved in the defense was partner Joe Simons and counsel Steven Herzog.

July 22, 2010

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