124 F.4th 555
9th Cir.2024Background
- Teradata Corporation sued SAP SE, alleging unlawful tying of SAP's ERP software (S/4HANA) to its HANA database engine and misappropriation of Teradata's trade secrets related to a data aggregation method.
- The technical partnership, "Bridge Project," led to sharing confidential technical information and eventual development of rival products; the venture dissolved after SAP released its own EDW product (HANA).
- SAP required customers to purchase HANA alongside S/4HANA, with most opting for a limited "runtime" license.
- Teradata relied on economic expert Dr. Asker to define relevant markets and establish anticompetitive effects.
- The district court granted summary judgment to SAP, excluding much of Asker's testimony as unreliable and ruling that Teradata failed to designate its trade secret as confidential.
- The Ninth Circuit reviewed the decision after the Federal Circuit found no jurisdiction due to lack of compulsory patent claims.
Issues
| Issue | Plaintiff’s Argument | Defendant’s Argument | Held |
|---|---|---|---|
| Exclusion of expert economic testimony | Asker’s methodologies reliable | Methodology unreliable | District court abused discretion; testimony admissible |
| Definition of relevant antitrust markets | Markets sufficiently defined | Market definitions arbitrary | Sufficiently reliable for jury consideration |
| Anticompetitive effects of tying arrangement | Tie distorts competition | No substantiated harm | Genuine dispute of fact; summary judgment improper |
| Confidentiality/trade secret designation | Marked information as confidential | Insufficient detail/labeling | Marking sufficient for jury to decide confidentiality |
| Contractual right to use trade secret | Agreements reserved rights | License covered SAP’s use | Factual dispute; question for jury |
Key Cases Cited
- Ohio v. American Express Co., 585 U.S. 529 (per se rule and rule of reason in antitrust law)
- Northwest Wholesale Stationers, Inc. v. Pacific Stationery & Printing Co., 472 U.S. 284 (per se illegality of certain antitrust restraints)
- Jefferson Par. Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2 (per se rule for tying arrangements)
- Illinois Tool Works Inc. v. Independent Ink, Inc., 547 U.S. 28 (modification of per se rule in tying cases)
- Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451 (market power and tying in antitrust)
- Kumho Tire Co. v. Carmichael, 526 U.S. 137 (admissibility and evaluation of expert testimony)
- Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (standard for admitting expert scientific testimony)
- Times-Picayune Pub. Co. v. United States, 345 U.S. 594 (antitrust market definition standards)
- Tampa Elec. Co. v. Nashville Coal Co., 365 U.S. 320 (scope of relevant markets in antitrust)
- Dalton v. Educational Testing Serv., 663 N.E.2d 289 (implied covenant of good faith and fair dealing under NY law)