2/6/2024 0 Comments Motion to dismiss illinoisShearman & Sterling (London) LLP is a limited liability partnership organized under the laws of the State of Delaware for the practice of law in the United Kingdom. Although the Court held that plaintiffs did not adequately plead a relevant product market in their complaint, it did not foreclose the possibility that a different relevant product market might be pled.Ĭopyright © 2024 Shearman & Sterling LLP is a limited liability partnership organized under the laws of the State of Delaware. The Court noted that plaintiffs’ bare allegations failed to explain “what the CMMI product is, why the product is useful, what market it operates in, what products might have reasonable interchangeability” The Court further agreed with defendant’s argument that the relevant product, as alleged, was “simply company’s own product,” and plaintiffs failed to allege an exception to the general rule that a company’s own product generally cannot constitute a relevant market. The Court held that plaintiffs failed to adequately plead facts plausibly showing a relevant product market, which is a necessary element of the antitrust claims plaintiffs were pursuing. Ultimately, the Court agreed with defendant, and dismissed the claims without prejudice. Defendant argued that plaintiffs failed to allege a relevant market, claiming the Seventh Circuit has held that it is rare for a relevant product to be comprised of a company’s own product and that, as a matter of law, a relevant market cannot exist where a “single brand, franchise, institution, or comparable entity competes with potential substitutes.” They argued that this enabled defendant to “impact completely the consumer and US market” for CMMI Model licenses. Plaintiffs argued that defendant had a “100%” monopoly of the CMMI Licensing Business, which in itself was a relevant market, because “no other organization in the world” owned “CMMI Maturity Model Certification … Document … or Trademark” abilities. Defendant moved to dismiss for failure to state a claim, on the grounds that plaintiffs failed to plead facts sufficient to show that the CMMI Licensing Business was a relevant product market. Plaintiffs alleged that defendant had a monopoly over the CMMI Licensing Business market following its purchase from CMU, and arbitrarily denied plaintiff CLAs access to the market by unilaterally terminating their license to be CMMI Model appraisers. The CLAs sued after ISACA allegedly ended its contracts with plaintiff CLAs. Plaintiffs allege that the CMMI Licensing Business was eventually purchased by defendant. According to the complaint, companies would then use this rating to help compete on bids of government contracts, as a better rating could supposedly help them score “points” to win contracts.Īccording to the complaint, the CMMI Licensing Business was alleged to have been in use since the 1980s until 2016, under the ownership of alleged co-conspirator Software Engineering Institute of Carnegie Mellon University (“CMU”), with funding from the Department of Defense. Defendant’s alleged business model (“CMMI Licensing Business”) was to license the CMMI Model to other businesses, so that those business could themselves be appraised by a CLA for determination of the business’s Organizational Maturity Level Rating. Plaintiffs claim CMMI Models are “best practice” models used to assess a company’s effectiveness in carrying out certain business processes. The Court held that plaintiffs failed to allege a relevant product market because the alleged market only consisted of defendant’s product, and a company’s own product generally “do not comprise a relevant product market.”Īccording to the complaint, plaintiffs are three individual third-party Certified Lead Appraisers (collectively “CLAs” and individually “CLA”) who performed Capability Maturity Model Integration (“CMMI Model”) appraisals for defendant ISACA. The Court granted defendant’s motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. Plaintiffs asserted claims under Sections 1 and 2 of the Sherman Act and Section 7 of the Clayton Act alleging that defendant monopolized or conspired to monopolize the market for certain business process appraisals using defendant’s proprietary methods. Kendall of the United States District Court for the Northern District of Illinois dismissed without prejudice consolidated private antitrust actions brought against Information Systems Audit and Control Association, Inc.
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