Intellectual Ventures I LLC v. Capital One Financial Corp. (280 F. Supp. 3d 691, 2017)

MEMORANDUM OPINION

Paul W. Grimm, United States District Judge

The litigation history between the Intellectual Ventures companies (Plaintiffs, Counter-Defendants, Third-Party Defendants, and Joined Counter-Defendants to this action;, collectively referred to as “IV”) and the Capital One companies (Defendants, Counterclaimants, and Third-Party Plaintiffs' in this action; collectively referred to as “Capital One”) is protracted, beginning with a pátent infringement action that Intellectual Ventures I, LLC and Intellectual Ventures II, LLC (together, “IVI and II”) filed in the Eastern District of Virginia on June 19, 2013. In that case, as well as in this patent infringement action that IV I and II filed on January 15, 2014, Capital One brought antitrust counterclaims. The ■ Virginia court dismissed ‘Capital One’s antitrust claims for failure to state a claim, and IV now seeks summary judgment on very similar claims. ECF No. 656. Because Noerr-Pennington immunity and collateral estoppel both bar Capital One’s antitrust claims, I will grant IV’s motion.

Procedural Background

IV I and II filed suit .in this Court, alleging that Capital One infringed five of their patents. Compl., ECF No. 1. IV I and II ultimately voluntarily withdrew one patent infringement claim and proceeded with the others. ECF Nos. 80, 81. The parties engaged in extensive discovery and agreed to referral to a Special Master highly experienced in patent law, jointly selected by the parties and appointed pursuant to Fed. R. Civ. P. 53. ECF Nos. 134, 136, 143. He oversaw additional discovery, following , which the , parties extensively briefed the patent infringement claims. ÉCF Nos. 147,147-1, 169, 169-1, 227, 246, 297, 300, 303. The Special Master issued two reports and recommendations, ECF Nos. 298 and 315, in which he ruled in favor of IV with respect to two of its patents, United States Patent Nos. 7,984,-081 and 6,546,002 (“the ’081 Patent” and “the ’002 Patent”), and in favor of Capital One on the claims related to United States Patent Nos. 6,314,409 and 6,715,084 (“the ’409 Patent” and “the ’084 Patent”). Both parties challenged the Special Master’s rulings adverse to them, and further briefing ensued. ECF Nos. 307, 311, 312, 313, 319, 324, 325, 330, 335, 336, 344.

After reviewing the Special Master’s reports and recommendations and the parties’ extensive briefs, I overruled the Special Master with .respect to the ’081 Patent and the ’002 Patent, finding that they were unenforceable. ECF Nos. 377, 378. I also ruled that collateral estoppel ápplied regarding the ’409 Patent and the ’084 Patent, barring IV from bringing claims against Capital One for infringement of those patents, ECF No. 382. The net effect of my ruling was that each of the patents that IV claimed Capital One had infringed was unenforceable, two patents because I concluded that they were invalid pursuant to 35 U.S.C. § 101, and two patents because the United States District Court for the Southern District of New York in Intellectual Ventures v. JPMC, Case No. 13-3777-AKH, 2015 WL 1941331 (S.D.N.Y. Apr. 28, 2015), concluded that they were invalid, and issue preclusion barred me from reaching a different conclusion. On those grounds, I entered summary judgment in Capital One’s favor on those four remaining patent infringement claims. ECF Nos. 378, 382. And, finding no just reason for' delay, I entered a final judgment in favor of Capital One on the patent infringement claims, making that order immediately appealable. ECF No. 387. The Federal Circuit affirmed my rulings, Intellectual Ventures I LLC v. Capital One Fin. Corp., 850 F.3d 1332 (Fed. Cir. 2017), thereby ending the patent infringement claims against Capital One.

Meanwhile, Capital One had sought leave to file three antitrust counterclaims, claiming monopolization and attempted monopolization, in violation of Section 2 of the Sherman Act, 15 U.S.C. § 2, and unlawful asset acquisition, in violation of Section 7 of the Clayton Act, 15 U.S.C. § 18, as part of its Third Amended Answer, Defenses, and Counterclaims. ECF No. 106. IVI and II opposed the motion. ECF No. 118.1 granted Capital One leave to file its counterclaims,' ECF Nos. 194, 195, which it did, ECF No. 196;- see also Fourth Amended Answer, Defenses, and Counterclaims, ECF Nos. 438 (redacted), 439 (sealed). It also filed a Third Party Complaint against additional Intellectual Ventures companies: Invention Investment Fund II, LLC; Intellectual Ventures Management, LLC; Invention Investment Fund I, L.P. ECF Nos. 228 (sealed), 230 (redacted). Capital One alleges that IV has tried, without success, to license to Capital One its extensive patent portfolio, which includes the patents that IV has sued Capital One, in this suit and the Virginia suit, for infringing. Capital One believes that IV’s repeated claims against it are actionable under antitrust law.

I denied IV’s motions to dismiss the counterclaims and Third Party Complaint, ECF Nos. 225, 296, finding that Capital One had pled them sufficiently to proceed to, discovery. ECF No. 328. After another round of extensive (and expensive) discovery regarding liability on the antitrust counterclaims, I attended a tutorial involving the economic experts that the parties had identified. ECF No. 651. Also in attendance was the court technical advisor, Professor John M. de Figueiredo of Duke University Law and Business Schools, whose appointment the parties had confirmed on a status conference call, and who assisted the court in evaluating the economic evidence. ECF Nos. 606, 608. At the close of discovery, IV filed the pending Motion for Summary Judgment, which the parties fully briefed. In support of their positions, the parties jointly submitted.a 13,344 page Joint Record, comprising 286 exhibits in sixteen, 3-inch binders. Having reviewed the parties’ memoranda and- exhibits, I now rule.

Parties’ Arguments

The essence of Capital One’s antitrust claim is that IV is a “patent troll,” and not just any patent troll, but -a veritable Dovregubben. Capital One asserts that IVs business practice is to acquire a vast portfolio of thousands of patents that purportedly deal with technology essential to the types of services offered by commercial banks (such as ATM transactions, mobile banking, on-line banking, and credit card transactions). It then employs an aggressive marketing scheme whereby it makes an “offer” for banks to license (Capital One really would' prefer to say “extorts” banks to license) its entire portfolio for a period of years at a jaw-droppingly high price. But, Capital One insists, when the banks ask for details about the patents covered in the portfolio in order to determine whether their services infringe them, IV refuses to disclose sufficient information to enable them to make an intelligent decision about whether they should ágree to the license. And, if the bank balks at licensing the entire portfolio at IVs take-it-or-leave-it price, IV then, threatens' to file a patent infringement claim against the bank regarding only a few of the patents in the portfolio. Adding insult to injury, IV then makes it clear that should it lose the patent infringement case, it will’ simply file another (and if needed, another, and so on) regarding a different set of its patents, until the prospect of endless high-cost litigation forces the bank to capitulate and. license the entire portfolio.

Capital One characterizes IV’s business model as comprised of three components: accumulate a vast portfolio of patents purportedly relating to essential commercial banking services, conceal the details of those patents so that the banks cannot determine whether their products infringe any of IV’s patents, and serially litigate to force the banks to capitulate and license the portfolio at exorbitant cost. This conduct, Capital One insists, constitutes monopolization under § 2 of the Sherman Act, 15 U.S.C. § 2, attempted monopolization under § 2 of the Sherman Act, and unlawful asset acquisition under § 7 of the Clayton Act, 15 U.S.C. § 18.

Nonsense, IV indignantly responds. It counters Capital One’s charges by arguing that it legitimately purchased or otherwise acquired its large portfolio of patents that relate to multiple technology markets. It then offers to license its portfolio to banks (and other types of businesses), beginning its negotiation with an opening offer, and expecting the bank to counteroffer, thereby initiating a back-and-forth exchange that it hopes will result in a mutually-agreeable licensing fee. IV vehemently denies that it conceals the details of its individual patents or that Capital One could not determine-what they relate to by reviewing publicly available information. As TV sees things, when Capital One declined to make a counter offer to its opening bid, it then selected a number of its patents and brought suit against Capital One, first in, the Eastern District of Virginia, and then, when that suit was unsuccessful, in this Court, with, respect to a different set of patents. Moreover, IV. claims that Capital One is, in essence, an “efficient infringer” — an entity that engages in its business without care for whether it infringes on patents held by others, with the knowledge that a patent infringement case is expensive to bring, and many patent holders lack the funds to do so to protect their rights. As such, Capital One can play the odds, infringing patents with near impunity until the rare patent holder with the resources to sue does so, and then negotiate a favorable license fee.

IV points out that each of its patents is presumptively valid, and that it has-an absolute right to file litigation to enforce them. And, in IV’s view, if enforcing its patents through litigation has any monopoly effect (which IV denies it does), it has immunity under the Noerr-Penning-ton doctrine. Moreover, IV argues that Capital One is barred by both claim and issue preclusion from asserting its antitrust counterclaims because it brought virtually the exact claims in the Eastern District of Virginia suit, lost, and elected not to appeal. Further, IV challenges Capital One’s definition of the relevant market for purposes of antitrust .analysis, insisting that its portfolio consists of numerous distinct technology markets, not some monolithic “financial services portfolio”, as claimed by Capital One.

IV ’also asserts that Capital One’s antitrust theory is fundamentally flawed, because no liability can attach unless Capital One can prove that IV exercises monopoly power within a relevant market. “Monopoly power is the power to control prices or exclude competition.” United States v. E. I. du Pont de Nemours & Co., 351 U.S. 377, 391, 76 S.Ct. 994, 100 L.Ed. 1264 (1956); see Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451, 481, 112 S.Ct. 2072, 119 L.Ed.2d 265 (1992) (quoting E.I. du Pont); United States v. Grinnell Corp., 384 U.S. 563, 571, 86 S.Ct. 1698, 16 L.Ed.2d 778 (1966) (same). IV insists that it does neither, because the correct market definition would recognize that what IV owns is a series of patents that relate to multiple, distinct technology markets. And IV could exercise monopoly power only if Capital One can show that its patents include those affecting alternative substitute technologies that Capital One otherwise could turn to in order to avoid having to license IV’s patents. Capital One has not made this showing, IV contends, entitling it to summary judgment.

Antitrust Analysis and Economic Theory

Underlying the legal issues in this case are two important but" competing policies. On one hand, we value innovation that leads to new inventions that advance science and technology, protecting that creative effort by issuing patents. A patent, by its very nature,'vests its owner with a type of legal monopoly, which it can enforce against anyone who infringes the patent. Enforcing a patent through litigation protects this monopoly, even though in other circumstances we view monopolies as harmful.

The other important policy implicated by this case, of course, is the strong desire to ensure vigorous competition in the marketplace, so that consumers (whether businesses or individuals) can purchase at the lowest possible price. To promote the benefits of robust competition, antitrust law aims to prevent a company from having the ability to control the price of its product or exclude competitors to the extent that it can charge sustained supracompeti-tive prices (prices substantially-above what a competitive price would be if consumers could simply buy a close substitute product from a competitor at lower cost).

The exercise of monopoly power with regard tó a single patent (or even a few patents) usually does not offend antitrust law. But it is another matter tó acquire a vast portfolio of patents that are essential to technology employed by an entire industry and then to compel its licensing at take-it-or-leave-it prices because it is not economically feasible to determine if alternative technologies, not covered by the accumulation of patents, are available. This acquisition and compelled licensing could amount to the ability to exercise monopoly power on an entirely different scale. ■

In a very real sense, antitrust law is founded on • economic theory about how efficient markets should operate. In ■ an ideally competitive market where there are no barriers to entry or exit by competing businesses, the availability of the same product (or a close substitute) from many sources will tend to drive the price downwards to a point slightly above the cost to make the product — the so-called “competitive price.” Think of pizzerias.- There are lots of them, and entry and exit from this business is relatively free and unrestricted. If one restaurant decides to charge too much for a slice of pizza, there are many others nearby where the consumer can buy at a lower cost. The ready supply of close substitutes keeps costs competitive— slightly above the cost of making the pizza.

But, if circumstances are such that one pizzeria can exclude competition or control prices by charging more than a competitive price because consumers are unable to avoid paying it by turning to lower-priced alternatives, then it has the ability to exercise market power. And the power to control prices or exclude competitions is the essence of monopoly power. See Grinnell Corp., 384 U.S. at 571, 86 S.Ct. 1698. Antitrust law is designed to prevent the acquisition and exercise of monopoly power. See id.) 15 U.S.C. § 2.

Each of the above important competing policies is at play in this case. Capital One argues, through its highly credentialed and impressive economic expert, Professor Fiona Scott Morton of Yale University, that IV possesses monopoly power in connection with its large financial services patent portfolio, which touches on essential technologies that commercial banks have heavily invested in and cannot realistically design around to avoid the reach of IV’s patents. Because of the size of this portfolio (between 7,725 and 35,000 patents, depending on whether Capital One or IV’s expert is correct), IV is able to charge supracompetitive prices to license the portfolio. And IV’s concealment of the details regarding the patents leaves Capital One unable (without incurring ruinous cost) to ferret out the particulars of each patent and assess whether it infringes any patents. Also at play is IV’s aggressive policy of threatening (and bringing) expensive serial patent infringement suits. IVs aggregation of such a large portfolio, combined with its concealment and aggressive litigation strategies will, according to Capital One, eventually force it to capitulate and pay IVs supracompetitive price to license the entire portfolio.

As Professor Scott Morton sees it, antitrust analysis commonly used to determine whether a proposed merger will result in anticompetitive effects, simply does not work for the facts of this case. That is because merger analysis is ex ante, focusing on whether, if the merger is approved, the new entity will be able'to ‘charge a small but significant non-transitory increase in price (referred to as “SSNIP”) that it could maintain over time without competition from others making that price increase unsustainable. Put - differently, SSNIP analysis is best done before the entity of interest has acquired monopoly power. Scott Morton reasons that this case requires ex post analysis because Capital One already had incurred significant costs to acquire the technology to compete with other commercial banks in essential services such as on-line banking, remote banking, and ATM and credit card transactions when IV began licensing its massive financial services , patent portfolio. In other words, IV already had acquired monopoly power when ⅛ approached Capital One to license its patents. Because Capital One already had incurred substantial sunk costs in the technology in .which it had invested, it was .unable to design around IVs enormous portfolio to adopt non-infringing technologies the way it could have done if it knew of the breadth and scope of IV’s patents before it incurred the cost of the technologies it adopted.

Under her proposed ex post analysis, it is IV’s conduct after having acquired monopoly power that is critical to antitrust scrutiny. Through its trio of patent aggregation, concealment and litigation, IV has acquired insurmountable bargaining power enabling it to exercise “hold-up” power by demanding take-it-or-leave-it supracompet-itive prices to license its financial services portfolio. And even though it has resisted doing so to date, eventually Capital One will be forced to capitulate to the threat of exorbitantly expensive patent litigation to purchase a license that it does not want, despite the fact that IV’s singular lack of success in prosecuting any of its patent suits against IV (or other banks) suggests that its massive portfolio is in truth composed of nothing more than an amalgamation of weak patents. And, but for IV’s practice of accumulation, concealment and litigation, it could never command a price to license its portfolio of weak patents at anything near the supracompetitive price it sought from Capital One.

Scott Morton analogizes IV’s financial services patent portfolio to a “cluster market” that IV promotes as a single product (for which there are no close substitutes) at a supracompetitive price. And she asserts that IV exercises monopoly power, despite the fact that no bank (including Capital One) has agreed to purchase a license to the entire portfolio, and IV has yet to prevail in any of its patent suits against banks.

Pure humbug, counters IV, through its equally well-credentialed and impressive economic expert, Professor Richard Gilbert from the University of California, Berkley. He challenges Professor Scott Morton’s market definition, arguing that the proper definition is not a “cluster” of financial services patents constituting a single product, but rather a collection of patents that relate to multiple distinct technology markets. Professor Gilbert relies on the Antitrust Guidelines for the Licensing of Intellectual Property issued jointly by the U.S. Department of Justice and the Federal Trade Commission (“Guidelines”). See U.S. Dep’t of Justice & Fed. Trade Comm’n, Antitrust Guidelines for the Licensing of Intellectual Property (Jan. 12, 2017), available at https://www. justice.gov/atr/guidelines-and-policy-statements-0/2017-update-antitrust-guidelines-licensing-intellectual-property. The Guidelines state, relevantly, that “[a]l-though the intellectual property right confers the power to exclude with respect to the specific product, process, or work in question, there will often be sufficient actual or potential close substitutes for such product, process, or work to prevent the exercise of market power.” Id. § 2.2, at 4. The flaw in Capital One’s antitrust analysis, according to Professor Gilbert, is its failure to analyze the distinct technology markets for which IV does have patents to determine whether there are alternative close substitutes that Capital One could turn to in order to avoid having to license from IV.

As Professor Gilbert sees it, IV’s patents touch on a large number of distinct technology markets, each of which must be analyzed using SSNIP analysis, which Professor Scott Morton failed to do. Thus, he strongly disagrees that IV’s patent portfolio can be analyzed as a cluster market at all. And, even more fundamentally, he challenges Professor Scott Morton’s conclusions, arguing that proper market definition and analysis requires looking at actual prices (competitive price, market price and monopoly price). Here, he insists, there are no prices at all because IV’s licensing offer was only an opening bid in a negotiation, not a take-it-or-leave-it supra-competitive monopoly ultimatum. The negotiation did not progress to a point where a final demand was reached because Capital One refused to engage by making a counter-offer. Indeed, at least as of the time that discovery closed in this case, IV had not succeeded in selling a single license to its banking-related patents to Capital One or any other bank.

As IV and Capital One agree, the essential first step in analyzing the antitrust claims in this case is to define the relevant market by product(s) and geography. See United States v. Marine Bancorporation, Inc., 418 U.S. 602, 618, 94 S.Ct. 2856, 41 L.Ed.2d 978 (1974); Brown Shoe Co. v. United States, 370 U.S. 294, 324, 82 S.Ct. 1502, 8 L.Ed.2d 510 (1962); Buccaneer Energy (USA) Inc. v. Gunnison Energy Corp., 846 F.3d 1297, 1319-20 (10th Cir. 2017). “[M]arket definition is a deeply fact-intensive inquiry....” E.I. du Pont de Nemours & Co. v. Kolon Indus. Inc., 637 F.3d 435, 443 (4th Cir. 2011) (quoting Todd v. Exxon Corp., 275 F.3d 191, 199 (2d Cir. 2001)). In determining the relevant market, the Court must consider “the ‘commercial realities’ faced by consumers.” Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451, 482, 112 S.Ct. 2072, 119 L.Ed.2d 265 (1992). Where the facts are hotly disputed, as here, defining relevant market is “generally a question for the trier of fact.” ABA Section of Antitrust Law, Antitrust Law Developments 627-30 (ABA 8th ed. 2017), Ex. 127, Jt. Rec. 9557; see also Fineman v. Armstrong World Indus., Inc., 980 F.2d 171, 199 (3d Cir. 1992) (“[T]he determination of a relevant product market or submarket.. .is' a highly factual one best allocated to the trier of fact.”). The burden of proof lies with the antitrust plaintiff to prove relevant market. Spectrum Sports, Inc. v. McQuillan 506 U.S. 447, 455-56, 113 S.Ct. 884, 122 L.Ed.2d 247 (1993); Berlyn Inc. v. The Gazette Newspapers, Inc., 73 Fed.Appx. 576, 582 (4th Cir. 2003); Satellite Television & Associated Res., Inc. v. Cont’l Cablevision of Va., Inc., 714 F.2d 351, 355 (4th Cir. 1983). When the parties proffer competing economic experts on the proper definition of relevant market, summary judgment is inappropriate as long as each expert’s views could be found by the trier of fact to be reasonable. Spirit Airlines, Inc. v. Nw. Airlines, Inc., 431 F.3d 917, 945 (6th Cir. 2005) (“‘[I]ntellectual disagreement’ among the parties’ experts creates material factual disputes on the relevant market ... so as to preclude an award of summary judgment.” (quoting record)); Thompson v. Metro. Multi-List, Inc., 934 F.2d 1566, 1573-74 (11th Cir. 1991) (“The parameters of a given market are questions of fact, and therefore summary judgment is inappropriate if there are material differences of fact.” (internal citations omitted)).

IV does not dispute this authority, but contends that it is entitled to summary judgment despite the substantial disagreement between Professor Scott Morton and Professor Gilbert on the definition of relevant market (as well as other antitrust elements) because the methodology used by Professor Scott Morton is so far removed from commonly employed antitrust analysis that it must be rejected as unreasonable as a matter of-law. It is true that Professor Gilbert’s analysis of relevant market is firmly grounded in commonly used antitrust analysis, as evidenced by its rebanee on the Department of Justice and Federal Trade Commission’s Antitrust Guidelines for the Licensing of Intellectual Property! But, in support of their alternative analysis, Capital One and Professor Scott Morton have cited authority for -the application of cluster market analysis to the definition of a relevant antitrust market. See United States v. Phila. Nat’l Bank, 374 U.S. 321, 355-56, 83 S.Ct. 1715, 10 L.Ed.2d 915 (1963) (citing Brown Shoe); United States v. Grinnell Corp., 384 U.S. 563, 572-73, 86 S.Ct 1698, 16 L.Ed.2d 778 (1966) (citing Brown Shoe); Brown Shoe, 370 U.S. at 324-25, 82 S.Ct. 1502; and Fed. Trade Comm’n v. Staples, Inc., 190 F.Supp.3d 100, 116-17 (D.D.C. 2016) (citing Brown Shoe); see also Ian Ayres, -.Rationalizing Antitrust Cluster Markets, 95 Yale L. J. 109 (1985). And, Professor Scott Morton has noted that the Department of Justice Horizontal Merger Guidelines that Professor Gilbert referenced do recognize that “[e]vidence of competitive effects can inform market definition, just as market definition can be informative regarding competitive effects.” Horizontal Merger Guidelines § 4.

With respect to cluster markets, Professor Ayres, one of the early scholars to study such, markets in antitrust law, was critical of the courts’ failure to articulate “a sound justifying theory” of when cluster analysis is appropriate, opting instead for a series of “ad hoc” standards. He noted:

The lack of a justifying theory apparent in Philadelphia National Bank and Grinnell has left lower courts virtually unconstrained to develop additional criteria for cluster definitions. Lower courts have based cluster definitions on the existence of trade associations; census classifications; functional complementarity; common technology, distribution or marketing; a unique product group; and other market characteristics. .While courts, have a plethora of standards from which to choose,, they currently have no basis for distinguishing .the good from the bad (and the ugly). In sum, while some cluster markets have been defined correctly, the lack of a sound justifying theory has led courts to adopt conflicting and ad hoc standards. In a world in which antitrust defendants are usually multiproduct firms, the problem of deciding when to cluster a group of products needs to be formally addressed.

Ayres, supra, at 112-14. He advocated using a standard he called “transactional complementarity,” meaning:

Goods are transactional complements if buying them from a single firm significantly reduces consumers’ transaction costs. In other words, given equal prices, consumers prefer to buy transactional complements from a single firm. If consumers strongly prefer to purchase a group of goods from a single firm, firms selling only part of this group will not compete effectively with firms supplying the full line.

Id. at 114-15.

Applying Ayres’s standard for using cluster markets to define a relevant antitrust market in this case would be problematic for Capital One, because Professor Scott Morton’s analysis rests on the notion that Capital One (and other banks to which IV has pitched its portfolio) does not want the cluster of products that IV offers. In such circumstances, it would be difficult to argue that consumers (banks) “strongly prefer to purchase a group of goods” (IV’s patent portfolio) from a single firm (IV). Nevertheless, the parties do not cite, nor have I located, any controlling legal authority that Professor Ayres’s test for the use of cluster markets must be used instead of any others that courts that have employed cluster market analysis in antitrust cases have used. While factfinders ultimately might reject Scott Morton’s reliance on cluster markets to justify her antitrust market analysis, I cannot' conclude that as a matter of law it is unreasonable.

. But, neither is Professor Gilbert’s analysis immune from criticism. His contention that it would be economically feasible for Capital One to discern the particulars of each of IV’s thousands of patents to determine whether there are close substitutes to which Capital One could turn in order to avoid IV’s portfolio, even if all of the information needed to do so was readily available, stretches plausibility to the near breaking point. Capital One has produced evidence that IV does conceal a significant amount of information regarding its patent holdings, which has been confirmed by others. See, e.g., Robin Feldman & Tom Ewing, The Giants Among Us, 2012 Stan. Tech. L. Rev. 1 (2012). Feldman and Ewing concluded:

Much.,about Intellectual Ventures is shrouded in secrecy. Intellectual Ventures has acknowledged that it intentionally withholds the true scope and nature of its IP portfolio. Its licensing transactions and interactions are protected by strict nondisclosure agreements, and the structure of its business activities makes it difficult to get a handle on the full extent of its activities. For example, or research has identified more than a thousand shell companies that intellectual Ventures has used to conduct its intellectual property acquisitions, and it has taken considerable effort to identify these. The range and scope of its activities are so vast that it is difficult to conceptualize the reach of Intellectual Ventures’.

Id. at 3.

The sheer scope of IV’s patent holdings 'calls into question how it would be feasible to perform the analysis of available •substitutes that Professor Gilbert calls for to determine whether there are close substitutes to which Capital One could turn to avoid the reach of IV’s portfolio. And while the Antitrust Guidelines for the Licensing of Intellectual Property do apply the SSNIP analysis favored by Professor Gilbert, there is nothing in the Guidelines that seems to recognize the near impossibility of doing so with a collection of intellectual property as massive as TV’s (despite the fact that it was revised and reissued on January 12, 2017).

■ After all,' the phenomenon of applying antitrust doctrine to intellectual property rights on the scale presented by IV’s holdings is a new challenge. As noted by Feld-man and Ewing:

The patent world is quietly undergoing a change of seismic proportions. In a few short years, a handful of entities have amassed vast treasuries- of patents on an unprecedented scale. To give a sense of the -magnitude of this change, our research shows that in little more than five years, the most massive of these has accumulated 30,000-60,000 patents worldwide, which would make it the 5th largest patent portfolio of any domestic US company and the 15th largest of any company in the world....

These entities, which, we call mass aggregators, do not engage in the manufacturing of products nor-do they conduct much research. Rather, they pursue other goals of interest to their founders and investors. Non-practicing entities have been around the patent world for some time, and in the past they have fallen into two broad categories. The first category includes universities and research laboratories, which tend to have scholars engaged in basic research and license out inventions rather than manufacturing products on their own. The second category includes individuals or small groups who purchase patents to assert them against existing, successful products. Those in the second category have been described colloquially as ‘trolls,’ which appears to be a reference to the children’s tale of the three billy goats who must pay a toll to the troll waiting under the bridge if they wish to pass. Troll activity is generally reviled by operating companies as falling somewhere between extortion and drag on innovation. In particular, many believe that patent trolls often extract a disproportionate return, far beyond the value that their patented invention adds to the commercial product, if it adds at all.

The new mass aggregator, however, is an entirely different beast. To begin with, funding sources for mass aggrega-tors include some very successful and respectable organizations, including manufacturing companies such as Apple, eBay, Google, Intel, Microsoft, Nokia, and Sony, as well as some academic institutions such as the University of Pennsylvania and Notre Dame....

Id. at 1.

And even if cluster market analysis ultimately is not considered the appropriate framework for analyzing the relevant antitrust market in cases such as this one (despite the fact that Capital One has cited abundant facts that a jury reasonably could conclude supports its contention that IV does, in fact, market its patents as a portfolio, rather than a collection of individual patents relating to a number of discrete technology markets), it is hard to deny that there is something concerning from an antitrust perspective about the way in which IV engages in its licensing business. See, e.g., Michelle Miller & Jan-usz Ordover, Intellectual Ventures v. Capital One: Can Antitrust Law and Economics Get Us Past the Trolls?, Competition Policy Int’l: Antitrust Chronicle (Jan. 19, 2015), available at https://www.competition policyinternational.com/intellectual-ventures-v-capital-one-can-antitrust-law- and-economics-get-us-past-the-trolls (“[M]any PAEs [Patent Assertion Entities] exploit the lack of transparency in patent ownership to amass huge portfolios of ‘secret’ patents that are then asserted against manufacturers. Manufacturers faced with a royalty demand based on a large number of unidentified patents cannot determine an appropriate royalty, or even whether any royalty is owed at all. That uncertainty may lead to manufactures paying supra-competitive royalties that can depress product innovation.”).

If the only issue raised in TVs summary judgment motion was whether there are genuine disputes of material fact that would entitle it to judgment as a matter of law on the issues of possession of monopoly power in a relevant market and the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superi- or product, business acumen, or historic accident, see Eastman Kodak, 504 U.S. at 481, 112 S.Ct. 2072, I would deny the motion and allow the case to proceed to trial. This is because I have concluded from the record before me that Capital One has identified admissible evidence to establish a genuine dispute as to these issues, precluding summary judgment. But as next will be seen, there are further legal issues which, when resolved, require the granting of TVs motion.

Standard of Review

Summary judgment is proper when the moving party demonstrates, through “particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations..., admissions, interrogatory answers, or other materials,” that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a), (c)(1)(A); see Baldwin v. City of Greensboro, 714 F.3d 828, 833 (4th Cir. 2013). If the party seeking summary judgment demonstrates that there is no evidence to support the nonmoving party’s case, the burden shifts to the nonmoving party to identify evidence that shows that a genuine dispute exists as to material facts. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585-87 & n.10, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The existence of only a “scintilla of evidence” is not enough to defeat a motion for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Instead, the evidentiary materials submitted must show facts from which the finder of fact reasonably could find for the party opposing summary judgment. Id.

Noerr-Pennington Immunity

Antitrust law proscribes the willful acquisition or maintenance of monopoly power within a market, as well as attempts to monopolize. See 15 U.S.C. § 2; Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 456, 113 S.Ct. 884, 122 L.Ed.2d 247 (1993); United States v. Grinnell Corp., 384 U.S. 563, 570-571, 86 S.Ct. 1698, 16 L.Ed.2d 778 (1966). In contrast, a patent creates a legal monopoly. Fed. Trade Comm’n v. Actavis, Inc., 570 U.S. 136, 133 S.Ct. 2223, 2231, 186 L.Ed.2d 343 (2013). Additionally, “[tjhose who petition government for redress are generally immune from antitrust liability” under what is known as Noerr-Pennington immunity. Prof'l Real Estate Inv’rs, Inc. v. Columbia Pictures Indus., Inc. (“PREI”), 508 U.S. 49, 56, 113 S.Ct. 1920, 123 L.Ed.2d 611 (1993) (citing E. R.R. Presidents Conf. v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961); United Mine Workers of Am. v. Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965)). This holds true for parties who file suit in court. See id. at 57, 113 S.Ct. 1920 (noting that California Motor Transport Co. v. Trucking Unlimited (“California Motor”), 404 U.S. 508, 510, 92 S.Ct. 609, 30 L.Ed.2d 642 (1972), “extended Noerr to ‘the approach of citizens... to courts’ ”). And, patent holders that believe that their patents have been infringed may seek to enforce their rights under the patent through patent litigation. 35 U.S.C. § 281 (“A patentee shall have remedy by civil action for infringement of his patent.”). Thus, when a party challenges a patent holder’s- efforts to enforce its patents through litigation, the court must determine whether the patent holder is exercising “the lawful restraint oh trade of the patent monopoly” or “the illegal restraint prohibited broadly by the Sherman Act.” United States v. Line Material Co., 333 U.S. 287, 310, 68 S.Ct. 550, 92 L.Ed. 701 (1948). To do so, courts must “balance the privileges of [a patent holder] under [its] patent grants with the prohibitions of the Sherman Act against combinations and attempts to monopolize.” United States v. U.S. Gypsum Co., 333 U.S. 364, 390-91, 68 S.Ct. 525, 92 L.Ed. 746 (1948).

IV contends that “[u]nder the First Amendment and the Noerr-Pennington doctrine, Intellectual Ventures I and Intellectual Ventures II, like other patent owners,... are entitled to petition a court for a redress of their grievances,” that is, IV may sue corporations like Capital One for patent infringement without being sued under the antitrust laws for bringing suit. IV Mem. 12. On that basis, it argues that, for Capital One to proceed on its antitrust claims against IV based on IV’s patent litigation activities, Capital One must establish that an exception to Noerr-Pennington exists such that IV was not entitled to exercise its right to sue. Id. According to IV, Capital One has failed to prove that IV’s claims were “objectively baseless,” ■ as it had to do to prove that IV was not exempt from antitrust liability. Id. at 13. IV asserts that Capital One instead tried to prove that IV’s claims were “unsuccessful,” which IV insists is not enough. Id.

Applicability ofNoerr-Pennington immunity

• Capital One' counters that Noerr-Pen-nington immunity simply does not apply because the-“litigation conduct is part of a broader monopolistic scheme,” and “Noerr does not insulate the entire scheme.” Capital One Opp’n 19; see also id. at 21 (“IV’s lawsuits against Capital One (and other banks) are part of its overall, multi-step scheme to force a.portfolio license at a supracompetitive price.”). Insofar as- Capital One argues that “IV’s aggregation of patents to create market power would support substantial Section 2 and Section 7 claims on its own,” and that “the concealment and misdirection at the heart of IV’s extortive licensing strategy would be anti-competitive even if IV had never filed a lawsuit,” id., this contention is contrary to Capital One’s pleadings. Capital One alleges that “IV has eliminated banks’ access to substitutes for IV’s license, both in the form of other patent licenses and banking-product designs, through a carefully orchestrated campaign of patent aggregation, concealment, and sham litigation,” Fourth Am. Countercl. (Redacted) ¶157, and'that “IV’s use of patent accumulations to cut off banks’ design and license choices, as weapons in negotiation, and to provide fuel for repeated sham litigation, violates Section 2 of the Sherman Act,” id. ¶ 125. See also id. ¶ 171 (“IV’s actions in secretly aggregating 3,500 financial-services patents through shell companies, subjecting Capital One to sham litigation, demanding nine-figure sums.for a limited and temporary patent respite, and refusing to disclose many of the patents that IV demanded Capital One pay more than $100 million for are all part of a carefully orchestrated plan to achieve monopoly power in the relevant technology-licensing market and wield it against the banking industry.”); id. ¶ 177 (“Even though the patents in its portfolio are individually of little or no worth, IV can and does acquire monopoly power by amassing them as a source of serial sham litigation threats,”); Third Party Compl. (Redacted) ¶¶ 17, 49, 63, 69 (same).

And, while patent acquisition and aggregation is the focus of the Clayton Act claim, acquisition is actionable under the Clayton Act only where “the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly.” 15 U.S.C. § 18. To establish this effect, Capital One relies on IV’s purported “campaign,” which could not succeed absent the allegedly sham litigation. See Third Am. Countercl. (Sealed) ¶218..(“IV combines [its patent acquisitions] in a way that ‘gives [IV] market power,’ because, now that IV has eliminated alternative licensing sources by acquiring the patents, banks ‘can not avoid’ paying a hold-up demand (which IV styles as a ‘license’) if .they want to avoid repeated meritless litigation and uncertainty.”); see also Third Party Compl. (Sealed) ¶ 110 (same). Clearly, the allegation of sham litigation is an integral component of IV’s alleged strategy underlying all of Capital One’s claims. See Third Am. Countercl. ¶¶ 125, 157, 171, 177, 218; Third Party Compl. ¶¶ 17, 49, 63, 69, 110.

Moreover, even if the sham litigation allegations could be excised from its pleadings, Capital One does not cite any controlling authority in support of its position that Noerr-Pennington immunity does not apply because sham litigation is only one component of a larger scheme, and I am not persuaded by the authority it cites from other circuits. Capital One includes a quote from California Motor as indirect support for its argument: “First Amendment rights are not immunized from regulation when they are used as an integral part of conduct which violates a valid statute.... If the end result is unlawful, - it matters not that the means used in violation may be lawful.” Capital One Opp’n 19 (quoting California Motor, 404 U.S. at 514-15, 92 S.Ct. 609). These two sentences that Capital One pairs together (with the effect that it appears, from the quote, that California Motor provides that an exception exists to Noerr-Pennington immunity when the litigation is part of a broader scheme to violate the law) actually bookend a section of the opinion that has nothing to do with litigation as part of a broader scheme. Rather, on pages 514 and 515 of its California Motor opinion, the Supreme Court explained the principles underpinning Noerr-Pennington .immunity and the sham litigation exception (which I discuss further, below). First, it observed that citizens are not always immune from legal consequences when exercising their First Amendment rights and that the First Amendment does not protect the press from antitrust laws. California Motor, 404 U.S. at 514, 92 S.Ct. 609. It then noted that “First Amendment rights may not be used as the means or the pretext for achieving ‘substantial evils’ which the legislature has the power to control.” Id. -at 515, 92 S.Ct. 609 (internal citation omitted). And it concluded that when businesses combine efforts to “harass and deter their competitors,” even'when their actions are in litigation that otherwise would be protected under Noerr-Penning-ton, their actions violate the antitrust laws. Id.

Capital One also cites Fed. Trade Comm’n v. Actavis, Inc., 570 U.S. 136, 133 S.Ct. 2223, 186 L.Ed.2d 343 (2013), as stating that “anticompetitive effects [that] fall within the scope of the exclusionary potential of the patent” do not “immunize [conduct] from antitrust attack.” Capital One Opp’n 19 (quoting Actavis, 133 S.Ct. at 2230). But, a holding that, when the validity and preclusive scope of a patent are in question, the patent holder can be sued under antitrust laws for activities that may be permissible under the patent (such as charging supra-competitive prices) does not mean that a patent holder can be sued under antitrust laws for filing suit to enforce the patent, and Capital One has not identified any binding authority extending the Supreme Court holding in this manner.

Exceptions to Noerr-Pennington immunity

Alternatively, Capital One argues that IV • is not immune to suit under Noerr-Pennington bécause a party loses its immunity if it brings a series of “petitions. . .‘pursuant to a policy of starting legal proceedings without regard to the merits’ and for the purpose of injuring competition,” which is what, in Capital One’s view, IV did when it “brought its ten patent claims against Capital One without regard to the merits and for the purpose of restraining trade.” Capital One Opp’n 22-25 (quoting USS-POSCO Indus. v. Contra Costa Cty. Bldg. & Constr. Trades Council, AFL-CIO, 31 F.3d 800, 811 (9th Cir. 1994)).

A patentee who brings an infringement suit may [lose its Noerr-Pennington immunity and] be subject to antitrust liability for the anti-competitive effects of that suit if the alleged infringer (the antitrust plaintiff) proves (1) that the asserted patent was obtained through knowing and willful fraud within the meaning of Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp., 382 U.S. 172, 177 [86 S.Ct. 347, 15 L.Ed.2d 247] (1965), or (2) that the infringement suit was “a mere sham to cover what is actually nothing more than an attempt to interfere directly with the business ..relationships of a competitor.”

Nobelpharma AB. v. Implant Innovations, Inc., 141 F.3d 1059, 1068 (Fed. Cir. 1998) (quoting Noerr, 365 U.S. at 144, 81 S.Ct. 523); see also Actavis, 133 S.Ct. at 2239 (Roberts, C.J., dissenting) (“If its actions are within the scope of the patent, they are not subject to antitrust scrutiny, with two exceptions concededly not applicable here: (1) when the parties settle sham litigation, cf. [PREI, 508 U.S. at 60-61, 113 S.Ct. 1920]; and (2) when the litigation involves a patent obtained through fraud on the Patent and Trademark Office. Walker Process Equipment, supra, at 177, 86 S.Ct. 347”).

1. Exception for litigation of patents procured by fraud

Walker Process held narrowly that “the enforcement of a patent procured by fraud on the Patent Office may be violative of § 2 of the Sherman Act provided the other elements necessary-to a § 2 case are present.” 382 U.S. at 174, 86 S.Ct. 347. Thus,- “ ‘to strip: [a patentee] of its exemption from the antitrust laws’ because of its attempting to enforce its, patent monopoly, an antitrust plaintiff is first required to prove that the patentee ‘obtained the .patent by knowingly and willfully misrepresenting facts to the [Patent and Trademark Office]’ ” and that the patent holder seeking to enforce its patent through litigation was “aware of the fraud when bringing suit.” Nobelpharma, 141 F.3d at 1068-69 (citing Walker, 382 U.S. at 177 & n.6, 86 S.Ct. 347) (footnote omitted). For Walker Process purposes, “fraud is a more serious offense than inequitable conduct.” Id. at 1070. Where, as here, there is no evidence that the Patent Office was tricked by fraud or that IV (which later acquired the patents) was aware of any such fraud, Walker Process’s holding has no application.

2. Sham litigation exception ■

Because Walker Process is inapplicable, to determine whether IV is immune from antitrust liability stemming from its patent litigation, I must determine whether the “sham litigation exception to Noerr-Pennington immunity” applies. See Tyco Healthcare Grp. LP v. Mut. Pharm. Co., 762 F.3d 1338, 1343 (Fed. Cir. 2014). The Supreme Court first observed that “[t]here may be situations in which a publicity campaign, ostensibly directed toward influencing governmental action, is a mere sham to cover up what is actually nothing more than an attempt to interfere directly with the business relationships of a competitor and the application of the Sherman Act would be justified” in Noerr, 365 U.S. at 144, 81 S.Ct. 523. The sham litigation exception has been extended to patent litigation, in which a patentee’s “conduct in the prosecution of a patent” may be “sufficient to strip [the] patentee of its immunity from the antitrust laws.” Nobelpharma, 141 F.3d at 1067. But this exception to Noerr-Pennington immunity is narrow, “[g]iven the presumption of patent validity and the burden on the patent challenger to prove invalidity by clear and convincing evidence.” Tyco Healthcare, 762 F.3d at 1343. Consequently, rarely will “a patentee’s assertion of its patent in the face of a claim of invalidity ... be so unreasonable as to support a claim that the patentee has engaged in sham litigation.” Id.

As for what qualifies as sham litigation, PREI, 508 U.S. 49, 113 S.Ct. 1920, 123 L.Ed.2d 611, and California Motor, 404 U.S. 508, 92 S.Ct. 609, 30 L.Ed.2d 642, provide guidance. In California Motor, a group of trucking companies brought antitrust claims against another group of trucking companies, alleging that the defendants “conspired to monopolize trade and commerce in the transportation of goods” through “a concerted action. ..to institute state and federal proceedings [including rehearings, reviews, and appeals from agency and -court orders] to resist and defeat applications by [the plaintiffs] to acquire operating rights or to transfer or register those rights.” 404 U.S. at 509, 92 S.Ct. 609. As noted, the California Motor Court extended Noerr-Pennington immunity, holding that an antitrust claim cannot be based upon “the approach of citizens or groups of them to administrative agencies... [or] to courts.” Id. at 510, 92 S.Ct. 609. But, the Court concluded that the allegations in the case before it, that the defendants “sought to bar their competitors from meaningful access to adjudicatory tribunals and so to usurp that deci-sionmaking process” and “‘instituted the proceedings and actions.. .with or without probable cause, and regardless of the merits of the cases,’” fell “within the ‘sham’ exception in the Noérr case, as adapted to the adjudicatory process.” Id. at 512, 516, 92 S.Ct. 609. It reasoned that, when a party’s legal actions reflect “a pattern of baseless, repetitive claims” that “leads the factfinder to conclude that the administrative and judicial processes have been abused,” that party “cannot acquire immunity by seeking refuge under the umbrella of ‘political expression.’” Id. at 513, 92 S.Ct. 609.

In PREI, the operators of a resort hotel (“PRE”) “sought to develop a market for the sale of videodisc players to other hotels wishing to offer in-room viewing of prerecorded material.” Columbia Picture Industries, Inc. (“Columbia”) “held copyrights to the motion pictures recorded on the videodiscs that PRE purchased” and, like PRE, “licensed the transmission of copyrighted motion pictures to hotel rooms.” 508 U.S. at 51-52, 113 S.Ct. 1920. Columbia sued PRE for copyright infringement, and PRE counterclaimed in antitrust, claiming that “Columbia’s copyright action was a mere sham that cloaked underlying acts of monopolization and conspiracy to restrain trade.” Id. at 52, 113 S.Ct. 1920. Notably, Columbia only initiated one suit against PRE, id., unlike the “pattern of baseless, repetitive claims” that defeated the antitrust defendants’ immunity claim in California Motor, 404 U.S. at 513, 92 S.Ct. 609. It is also significant that in PREI, the district court case was in the same posture as this case, with, a summary judgment motion pending, and the court decided the case on summary judgment. PREI, 508 U.S. at 53, 113 S.Ct. 1920.

The PREI Court held that, to qualify as “sham litigation,” a lawsuit “must be objectively' baseless in the sense that no reasonable litigant could realistically expect success on the merits,” and “the litigant’s subjective motivation” must be “to interfere directly with the business relationships of a competitor.” PREI, 508 U.S. at 60-61, 113 S.Ct. 1920; see Tyco Healthcare, 762 F.3d at 1343 (noting that a lawsuit qualifies as “sham litigation” under the PREI test when it “(1) is ‘objectively baseless in the sense that no reasonable ■litigant could realistically expect success on the merits’ (the objective element), and (2) is motivated by a desire ‘to interfere directly with the business relationships of a competitor’ (the subjective element)” (quoting PREI, 508 U.S. at 60-61, 113 S.Ct. 1920)). Because “the antitrust defendant admittedly had probable cause to institute [its copyright suit],” the Court concluded that its suit against PREI was not objectively baseless and therefore could not qualify as sham litigation to defeat Noerr-Pennington immunity. PREI, 508 U.S. at 51, 113 S.Ct. 1920. Thus, although both factors must be present to establish that litigation is a sham, a finding of “an objectively reasonable effort to litigate” is sufficient to show that the litigation was not a sham, “regardless of subjective intent.” Id. at 51, 113 S.Ct. 1920. Simply put, if the court concludes that the antitrust defendant had probable cause to file suit (which it can determine as a matter of law if, as here, “there is no dispute over the predicate facts of the underlying legal proceeding”), it cannot find that the defendant engaged in sham litigation, even .if ■ the litigant filed suit without any expectation of success. See id. at 62, 63,113 S.Ct. 1920.

The PBEI Court analogized to the common law tort of wrongful civil proceedings (often erroneously referred to as malicious prosecution, a tort that involves wrongful criminal proceedings) to define probable cause for purposes of determining whéther litigation is objectively baseless. Id. at 62, 113 S.Ct. 1920.

The notion of probable cause.. .requires the plaintiff to prove that the defendant lacked probable cause to institute an unsuccessful civil lawsuit and that the defendant pressed the action for an improper, malicious purpose. Stewart v. Sonneborn, 98 U.S. 187, 194. . . (1878); Wyatt v. Cole, 504 U.S. 158, 176. . .(1992) (REHNQUIST, C.J., dissenting); T. Cooley, Law of Torts. Cf. Wheeler v. Nesbitt, 24 How. 544, 549-50, [65 U.S. 544] 16 L.Ed. 765 (1860)] Probable, cause to institute civil proceedings requires no more than a “reasonable] belie[f] that there is a chance that [a] claim may be held valid upon adjudication” (internal quotation marks omitted). Hubbard v. Beatty & Hyde, Inc., 343 Mass. 258, 262, 178 N.E.2d 485, 488 (1961); Restatement (Second) of Torts § 675, Comment e, pp. 454-455 (1977). Because the absence of probable cause is an essential element of the tort, the existence of probable cause' is an absolute defense. See Crescent City Live Stock Co. v. Butchers’ Union Slaughter-House Co., 120 U.S. 141, 149. . .(1887); Wheeler, supra, 24 How. at 551; Liberty Loan Corp. of Gadsden v. Mizell, 410 So.2d 45, 48 (Ala. 1982). .. .When a court’has found that an antitrust defendant claiming Noerr immunity had probable cause to sue, that finding compels the conclusion that a reasonable litigant in the defendant’s position could realistically expect success on the merits of the challenged lawsuit. .., [Therefore, a proper probable, cause determination irrefutably demonstrates that an antitrust plaintiff has not proved the objective prong of the sham exception and that the defendant is accordingly entitled to Noerr immunity.

Id. at 62-63,113 S.Ct. 1920 (some internal citations omitted).

In his concurrence, Justice Stevens “agreed with the Court’s disposition of [PBEI] and with its holding that ‘an objectively reasonable effort to litigate cannot be sham regardless of subjective intent,’ ” but he wrote separately because he believed that the majority’s opinion included “unnecessarily broad dicta” that the Court “might regret when confronted with a more complicated case.” Id. at 67-68,113 S.Ct. 1920. Justice Stevens distinguished cases like PBEI in which a single lawsuit is alleged to be a sham, from cases like California Motor that involved “repetitive filings.” Id. at 67-73, 113 S.Ct. 1920., He noted that “[t]here might well be lawsuits” in which “ ‘reasonable litigant[s] could realistically expect success on the merits,’” but the litigation could “be objectively unreasonable” nonetheless, “and thus shams.” Id. at 68, 113 S.Ct. 1920. Justice Stevens observed that “more complicated cases [previously before, the Supreme Court], in which, for example, the alleged competitive injury has involved something more than the threat of an adverse outcome in a single lawsuit, have produced less definite .rules.” Id. at 72-73, 113 S.Ct. 1920. Citing California Motor, he stated that “Repetitive filings, some of which are successful and some unsuccessful, may support an inference that the process is being misused.” Id. at 73, 113 S.Ct. 1920. Moreover, he said, “[i]n such a case, a rule that a single meritorious action can never constitute a sham cannot be dispositive,” and “a simple rule may be hard to apply when there is, evidence that the judicial process has been used as part of a larger program to control a market and to interfere with a potential competitor’s financing without any interest in the outcome of the lawsuit itself....” Id. at 78, 113 S.Ct. 1920. But, notably, the majority did not modify its opinion to address the concerns Justice Stevens raised, and his views regarding how Noerr-Pennington immunity should apply do not limit the majority opinion.

Similarly, in Waugh Chapel S., LLC v. United Food & Commercial Workers Union Local 27, the Fourth Circuit, considering a series of proceedings in the labor context, observed that “[i]t is unclear whether PREI [and its two-step standard] distinguished or displaced the sham litigation test first propounded in California Motor” for analyzing the proceedings on the record before it. 728 F.3d 354, 363 (4th Cir. 2013). The . Fourth Circuit noted that, under the California Motor standard, “the focus is not on any single case. Rather a district court should' conduct a holistic evaluation of whether ‘the administrative and judicial processes have been abused.’ ” Id. (quoting Cal. Motor, 404 U.S. at 513, 92 S.Ct. 609). It is “[t]he pattern of the legal proceedings, not their individual merits,” that the court considers to determine “whether the- [antitrust defendant] indiscriminately filed.. .-a series of legal proceedings without regard for the merits and for the purpose of violating federal law.” Id. As with the PREI standard, “the subjective motive of the litigant and the objective merits of the suits are relevant,” but the California Motor standard is different because “other signs of bad-faith litigation. . .may also be probative of an abuse of the adjudicatory process.” Id.

The Fourth Circuit adopted the Second and Ninth Circuits’ approach in reading PREI and California Motor “as applying to different situations. Professional Real Estate Investors provides a strict two-step analysis to assess whether a single action constitutes sham petitioning... .California Motor Transport deals with the case where the defendant is accused of bringing a whole series of legal proceedings.” Id. (q