Court Finds No Inference Of Conspiracy Arising From Members Of Standard Setting Organization Pursuing Self Interest In Refusing To Approve Plaintiff's Competing Technology

The Massachusetts United States District Court granted a Rule 12(b)(6) motion dismissing antitrust claims brought under Section 1 of the Sherman Act by a company that had invented a new technology for testing metallic materials. Plaintiff alleged that defendant horizontal competitors, whose technology allegedly was inferior, had conspired to "stack the vote" and take other steps to prevent plaintiff's product from gaining approval by a standard setting organization ("SSO") and an International Standards Organization ("ISO") of which they were voting members. The Court found that plaintiff had failed to plead a plausible conspiracy because each defendant unilaterally would choose to "decline[] to support a standard that would promote another competitor's technology." Advanced Technology Corp. v. Instron, Inc., Civil Action No. 12-10171-JLT, slip op. at 12 (D. Mass. Feb. 26, 2013) ("Instron"). In the Court's view, there was no reason, therefore, to believe that a conspiracy had taken place.

The Court held that plaintiff had pleaded nothing more than parallel behavior in an oligopolistic market, and so plaintiff's Section 1 claim failed. The Court relied primarily on Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), in reaching that result. Instron, slip op. at 10 ("parallel conduct, even conscious parallelism, 'could just as well be independent action.'"), citing Twombly, 550 U.S. at 553 quoting Theatre Enters., Inc. v. Paramount Film Distr. Corp., 346 U.S. 537, 540 (1954).1

Plaintiff alleged that it had developed a new and innovative patented technique for measuring the tensile properties of metallic materials, such as in pipelines and bridges. Plaintiff asserted that its product was superior to defendants' equipment, which employed a conventional destructive testing technique, because plaintiff's method was non-destructive and allowed testing of in-service pipelines, and because the testing was faster.

The relevant SSO's regulations allowed "a single negative vote [to] stop the progress of any draft standard." Slip op. at 4. All three defendants voted against SSO approval of plaintiff's product, and then variously engaged subsequently in a number of asserted "procedural irregularities" to ensure non-approval by the SSO. Slip op. at 15. Plaintiff also went to the ISO for approval, where one defendant assertedly employed procedural irregularities to manipulate the ISO into refusing to approve...