Argument Preview

As we mentioned yesterday, four cases being argued in June at the Federal Circuit attracted amicus briefs. One of those cases is Teradata Corp. v. SAP SE. In this case, the Federal Circuit will review a district court’s grant of summary judgment dismissing tying and trade secret claims. This is our argument preview.

Teradata in its opening brief argues that, “in excluding testimony of Teradata’s economics expert, the district court misapplied antitrust law and misapprehended its gatekeeping role.” Teradata also contends “the court committed legal error in excluding [the expert’s] testimony based on its disagreement with [the expert’s] conclusions rather than the reliability of his methodologies.” Teradata further asserts that, “with or without Asker’s testimony, Teradata proffered evidence requiring a trial.” It also maintains the district court’s “trade-secret ruling misinterpreted governing agreements and improperly resolved factual disputes.” Lastly, Teradata asserts, the Federal Circuit “has jurisdiction because SAP’s patent counterclaims were compulsory.”

SAP SE, in its response brief, argues the “district court correctly granted summary judgment to SAP on Teradata’s tying claim” because the claim was “appropriately analyzed under the rule of reason,” the claim “depended on an unreliable expert opinion,” and it “failed to present evidence of substantial anticompetitive effects within the ‘tied’ market.” As for the trade-secret claim, SAP contends “the district court also correctly granted summary judgment to SAP” because “Teradata failed to comply with the confidentiality provisions” in certain agreements and those “agreements authorize SAP to use the supposed ‘batched merge method’ in any product.”

Teradata, in its reply brief, argues “SAP largely attempt[ed] to defend summary judgment with factual arguments based on skewed interpretations of the evidence.” It also contends “[n]othing in the [relevant agreement] requires reducing a trade secret to writing to protect it.” Lastly, it asserts that “determining whether Batched Merge is a ‘tool’ or ‘input’ requires resolving disputed facts.”

Two amicus briefs were filed in this appeal. Both support reversal.

The United States and the Federal Trade Commission filed an amicus brief in support of neither party and in support of reversal based on alleged legal errors in the court’s market definition. They argue “the determination of the relevant market necessitates ‘careful consideration based upon the entire record.'” And, they contend, “the district court appear[ed] to have adopted an overly rigid approach [to market definition] instead of the flexible inquiry supported by precedent.”

Numerous economists filed an amicus brief in support of plaintiffs-appellants and reversal. The brief argues “[u]nderstanding the relevant markets in an antitrust case is not a one-size-fits-all exercise,” and instead “[t]he appropriate method for defining the relevant product market of necessity depends on the unique economics of each case and the available data.” The brief then focuses “on the economic issues in this case” and emphasizes “that (1) qualitative analysis is central to defining relevant markets and (2) aggregate diversion ratio (‘ADR’) analysis is an appropriate methodology for implementing the hypothetical monopolist test.”

This case will be argued on Thursday, June 8. We will report on any developments.