Static Control Components, Inc v. Lexmark Int'l, Inc. Opinion Summary: Lexmark manufactures printers and toner cartridges. Remanufacturers acquire used Lexmark cartridges, refill them, and sell them at a lower cost. Lexmark developed microchips for the cartridges and the printers so that Lexmark printers will reject cartridges not containing a matching microchip and patented certain aspects of the cartridges. SC began replicating the microchips and selling them to remanufacturers along with other parts for repair and resale of Lexmark toner cartridges. Lexmark sued SC for copyright violations related to its source code in making the duplicate microchips and obtained a preliminary injunction. SC counterclaimed under federal and state antitrust and false-advertising laws. While that suit was pending, SC redesigned its microchips and sued Lexmark for declaratory judgment to establish that the redesigned microchips did not infringe any copyright. Lexmark counterclaimed again for copyright violations and added patent counterclaims. The suits were consolidated. The Sixth Circuit vacated the injunction and rejected Lexmark’s copyright theories. On remand, the court dismissed all SC counterclaims. A jury held that SC did not induce patent infringement and advised that Lexmark misused its patents. The Sixth Circuit affirmed dismissal of federal antitrust claims, but reversed dismissal of SC’s claims under the Lanham Act and certain state law claims.

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RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 206 File Name: 12a0289p.06 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT _________________ X STATIC CONTROL COMPONENTS, INC., Plaintiff-Appellant/Cross-Appellee, Nos. 09-6287/6288/6449 v. > , LEXMARK INTERNATIONAL, INC., Defendant-Appellee/Cross-Appellant. N Appeal from the United States District Court for the Eastern District of Kentucky at Lexington. Nos. 02-00571; 04-00084—Gregory F. Van Tatenhove, District Judge. Argued: March 6, 2012 Decided and Filed: August 29, 2012 Before: KEITH, BOGGS, and MOORE, Circuit Judges. _________________ COUNSEL ARGUED: Seth D. Greenstein, CONSTANTINE & CANNON LLP, Washington, D.C., for Appellant/Cross-Appellee. Steven B. Loy, STOLL KEENON OGDEN PLLC, Lexington, Kentucky, for Appellee/Cross-Appellant. ON BRIEF: Seth D. Greenstein, CONSTANTINE & CANNON LLP, Washington, D.C., Joseph C. Smith, Jr., BARTLIT BECK HERMAN PALENCHAR & SCOTT, LLP, Denver, Colorado, William L. London III, STATIC CONTROL COMPONENTS, INC., Stanford, North Carolina, M. Miller Baker, Stefan M. Meisner, McDERMOTT WILL & EMERY LLP, Washington, D.C., W. Craig Robertson III, Mickey T. Webster, WYATT, TARRANT & COMBS, LLP, Lexington, Kentucky, for Appellant/Cross-Appellee. Steven B. Loy, Anthony J. Phelps, Christopher L. Thacker, STOLL KEENON OGDEN PLLC, Lexington, Kentucky, William J. Hunter, Jr., STOLL KEENON OGDEN PLLC, Louisville, Kentucky, Timothy C. Meece, Binal J. Patel, Matthew P. Becker, Jason S. Shull, Michael L. Krashin, BANNER & WITCOFF, LTD., Chicago, Illinois, Joseph M. Potenza, Christopher B. Roth, BANNER & WITCOFF, LTD., Washington, D.C., for Appellee/Cross-Appellant. 1 Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 2 _________________ OPINION _________________ KAREN NELSON MOORE, Circuit Judge. Lexmark International, Inc. (“Lexmark”) is a major producer of laser printers and toner cartridges for its laser printers. Other companies, called remanufacturers, acquire used Lexmark toner cartridges, refill them, and sell them to owners of Lexmark printers at a lower cost. Lexmark developed microchips for both the toner cartridges and the printers so that Lexmark printers will reject any toner cartridges not containing a matching microchip, and over time Lexmark has patented certain aspects of the cartridges. Static Control Components, Inc. (“Static Control”) has identified how to replicate the cartridge microchips and sells the microchips to the remanufacturers along with other parts to facilitate the repair and resale of Lexmark toner cartridges. Lexmark sued Static Control in 2002 (the “02 Action”) for copyright violations related to its source code in making the duplicate microchips and was given a preliminary injunction by the district court. Static Control counterclaimed under federal and state antitrust and false-advertising laws. While that suit was pending, Static Control redesigned its microchips and sued Lexmark for declaratory judgment in 2004 (the “04 Action”) to establish that the redesigned microchips did not infringe any copyright.1 Lexmark counterclaimed again for copyright violations and this time added patent counterclaims against Static Control and eventually three of the remanufacturers. The two suits were consolidated into the 04 Action. On appeal of the preliminary injunction, the Sixth Circuit vacated and rejected Lexmark’s copyright theories. Lexmark Int’l, Inc. v. Static Control Components, Inc., 387 F.3d 522 (6th Cir. 2004) (“Lexmark I”). On remand, Lexmark successfully moved to dismiss all of Static Control’s counterclaims. The case proceeded to trial, and the only issues ultimately submitted to the jury were Lexmark’s claim of patent inducement 1 Citations to the record herein are to the 04 Action unless designated with “02R.” Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 3 against Static Control and Static Control’s defense of patent misuse. The district judge instructed the jury that its findings on patent misuse would be advisory; the jury held that Static Control did not induce patent infringement and advised that Lexmark misused its patents. Lexmark renewed its earlier request for a judgment as a matter of law and also filed a motion for a retrial, which the district court denied. Both parties timely appealed. For the following reasons, we AFFIRM the district court’s dismissal of Static Control’s federal antitrust claims, but REVERSE the dismissal of Static Control’s claims under the Lanham Act and certain claims under state law. We AFFIRM the remainder of the judgment on appeal. I. BACKGROUND A. Factual Background Lexmark manufactures laser printers, which require toner cartridges to print. The market for printers and toner cartridges generally has many players, e.g., Xerox, Epson, Hewlett-Packard, and Canon, and Lexmark’s share of the overall printer market is less than 15%. Second Appellee Br. at 4. Each company generally manufactures its printers to work with only its own style of cartridges, and each company’s cartridges will work with only its brand of printers. Therefore, each company typically dominates the aftermarket for cartridges compatible with its brand of printers, although the primary market for printers is well populated. Remanufacturers are companies that participate in the toner-cartridge aftermarkets by acquiring used toner cartridges of all kinds of printers, repairing and refilling them, and selling them to owners of that kind of printer at a lower price.2 First Appellant Br. at 11. Lexmark also acquires and repairs its used toner cartridges for resale. In the 1990s, Lexmark started a “Prebate” program with certain large customers whereby Lexmark would sell new toner cartridges at an upfront discount of around 20% 2 Wazana Brothers International, Inc. d/b/a Micro Solutions Enterprises (“Wazana”), Pendl Companies, Inc. (“Pendl”), and NER Data Products, Inc. (“NER”) are three remanufacturers who have purchased microchips from Static Control for Lexmark toner cartridges and were once third-party defendants to the suit. They are not parties to the appeal. Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 4 if the end user agreed to (1) a single-use license and (2) a restriction that the cartridge be returned to Lexmark for remanufacturing or recycling and not to a third-party remanufacturer. Second Appellee Br. at 6. These terms were printed on several notices on the outside of the toner-cartridge box, which instructed the user that opening the box would indicate acceptance of the terms. Regular cartridges not subject to the Prebate terms are still sold, but at a higher price than the Prebate cartridges. According to Static Control, the price of Lexmark toner cartridges increased following the implementation of the program because of reduced competition from remanufacturers. First Appellant Br. at 16.3 Lexmark toner cartridges each contain a microchip that communicates with the printer once installed. Toner cartridges that are otherwise compatible with Lexmark printers will not function without the microchip. Lexmark obtains these microchips from a supplier that has allegedly agreed to sell microchips only to Lexmark. All Lexmark toner cartridges are initially manufactured with the necessary microchip, but the microchip for the Prebate cartridges is specifically designed to enforce the Prebate terms by disabling the cartridge for future use after the cartridge runs out of toner. To use the Prebate cartridge again, the microchip needs to be replaced. To use a non-Prebate cartridge again, the microchip does not need to be replaced unless it was damaged. Lexmark eventually obtained several patents relating to its toner cartridges. At issue on appeal are nine utility patents that the remanufacturers allegedly infringe (referred to as the “nine mechanical patents”) and two design patents relating to seven different toner cartridges. Static Control developed a microchip that could replace the microchip on the Prebate toner cartridges, permitting a third party to remanufacture and sell the toner cartridge again. Static Control also sent its customers a letter, referred to as an “Anti-Prebate kit,” consisting of information from Static Control’s general counsel regarding why the Prebate program is not valid under principles of contract law. Second Appellee Br. at 33. Remanufacturers buy these microchips from Static Control, along 3 In comparison, Static Control claims that the price of Hewlett Packard toner cartridges fell during the same period because Hewlett Packard does not employ a similar “Prebate” program and remanufacturers are able to occupy a larger share of the aftermarket for Hewlett Packard toner. Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 5 with other parts. Static Control does not manufacture, remanufacture, or sell toner cartridges of any kind, but it is the market leader on making and selling the components necessary to remanufacture Lexmark cartridges. First Appellant Br. at 11. Lexmark, on the other hand, sells toner cartridges but does not sell any of the component parts necessary to repair or remanufacture its toner cartridges, whether Prebate cartridges or not. B. Procedural Background Lexmark sued Static Control in December 2002 for violations of federal copyright laws and the Digital Millennium Copyright Act (“DMCA”), relating to two computer programs on its printer chips. Lexmark sought to halt Static Control’s sale of the allegedly infringing chips. Static Control responded, ultimately counterclaiming under federal and state antitrust and false-advertising laws. Static Control claimed that Lexmark’s Prebate program unlawfully excluded competition in the aftermarket for Lexmark-compatible cartridges, reducing competition and increasing prices, and that Lexmark falsely told remanufacturers that Static Control was infringing on Lexmark’s patents. Lexmark then counterclaimed in reply, adding remanufacturers as defendants and making additional claims under the DMCA and various state-law claims, but no patent claims. On January 8, 2003, Lexmark received a temporary restraining order in the 02 Action, and on January 24, 2003, the district court required Static Control to post an injunction bond of $75,000. On February 7, 2003, the district court increased the bond to $250,000 and extended relief for 21 days. On February 27, 2003, district court granted the preliminary injunction. Static Control appealed both the injunction and the bond amount, and in October 2004 the Sixth Circuit reversed the preliminary injunction, making no comment on the bond amount. Lexmark I, 387 F.3d at 551. Static Control sought rehearing on the issue of the bond amount, which we denied in a one-sentence order. Lexmark Int’l, Inc. v. Static Control Components, Inc., No. 03-5400 (6th Cir. Dec. 29, 2004) (unpublished order). In light of the ruling, the parties stipulated to Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 6 summary judgment against Lexmark on its DMCA claims. R. 216 (D. Ct. Order 2/23/06). Before the Sixth Circuit ruled, however, Static Control initiated the 04 Action seeking declaratory judgment under federal copyright laws and the DMCA that its newly modified chips did not infringe Lexmark’s copyrights. Lexmark counterclaimed raising patent infringement, DMCA violations, and tort claims, and added three remanufacturers as third-party defendants—Wazana, NER, and Pendl. Following the Sixth Circuit’s remand, Lexmark moved to dismiss Static Control’s counterclaims. The district court granted the motion in September 2006. During the course of the proceedings, which concluded in a jury trial, nine of Lexmark’s mechanical patents were held valid, see R. 1008 (D. Ct. Order 4/24/07), and summary judgment was granted to Lexmark on its claims of direct patent infringement against Wazana, NER, and Pendl, see R. 1203 (D. Ct. Order 5/25/07); R. 1245 (D. Ct. Order 5/31/07). All three defendant remanufacturers ultimately settled with Lexmark at various points before the verdict. The district court also granted summary judgment to Lexmark on the validity of its single-use license for Prebate cartridges, which the district court concluded prevented Lexmark’s patents from exhausting following the initial sale of the Prebate toner cartridges to end users. R. 1008 (D. Ct. Order 4/24/07). By the close of trial, the only remaining issues were Lexmark’s patentinfringement-inducement claims against Static Control and Static Control’s equitable defense of patent misuse. Because the district court had already ruled on summary judgment that three of the remanufacturers directly infringed, the jury was asked to decide whether the unnamed remanufacturers directly infringed as a class and whether Static Control induced any direct infringement. Because the district court determined that patent misuse was an equitable defense, the final jury instructions indicated that the jury’s findings with respect to misuse would be merely advisory. R. 1365 (Jury Instructions). The jury returned a verdict that Lexmark had failed to show that the remanufacturers as a class directly infringed Lexmark’s patents and failed to show that Static Control induced the direct infringement of the three named remanufacturers, Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 7 Wazana, NER, and Pendl. R. 1366 (Special Verdict Form at 1-3). The jury then advised that it found Static Control had proven by a preponderance of the evidence certain facts that supported Static Control’s defense that Lexmark misused its patents. Id. at 11-19; see also R. 1365 (Jury Instructions at 35-41) (defining misuse). Lexmark moved for judgment as a matter of law both before and after the verdict and also filed a motion for a new trial on its patent inducement claim, arguing that the evidence was sufficient to establish direct infringement by Static Control’s customers as a class and that, with respect to inducement, the district court erroneously excluded evidence at trial. The district court denied the motions. R. 1430 (D. Ct. Op. 10/03/08); R. 1521 (D. Ct. Op. & Order 10/28/10). The district court subsequently reversed its prior ruling that Lexmark’s patents were not exhausted in its Prebate cartridges in light of recent Supreme Court precedent. R. 1443 (D. Ct. Op. & Order 3/31/09). Both parties filed timely appeals. II. JURISDICTION The parties did not state in their initial briefs the basis for this court’s appellate jurisdiction. We therefore asked the parties to submit letter briefs addressing whether we have jurisdiction over this appeal or whether the Federal Circuit has exclusive jurisdiction to review the case under 28 U.S.C. § 1295. After all, the entirety of Lexmark’s appeal requires us to resolve substantive issues of patent law. Static Control responds that this court has jurisdiction; Lexmark maintains that the Federal Circuit has exclusive jurisdiction. On review, we determine that 28 U.S.C. § 1295 does not require that the Federal Circuit hear this case on appeal. We have jurisdiction under 28 U.S.C. § 1291. The Federal Circuit has exclusive jurisdiction over appeals from final decisions of a district court “if the jurisdiction of that court was based, in whole or in part, on section 1338 of this title.” 28 U.S.C. § 1295(a)(1) (2000). Section 1338 gives federal district courts original jurisdiction exclusive of the state courts over “any civil action arising under any Act of Congress relating to patents.” 28 U.S.C. § 1338(a) (1999). Because Congress used the phrase “arising under,” the Supreme Court has held that Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 8 patent issues raised in relation to a defense or as counterclaims are insufficient to confer Federal Circuit jurisdiction. Holmes Grp., Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826, 831 (2002). Congress amended 28 U.S.C. §§ 1295 and 1338 in the LeahySmith America Invents Act to provide additionally for exclusive Federal Circuit jurisdiction over “any civil action in which a party has asserted a compulsory counterclaim arising under[] any Act of Congress relating to patents,” but the amendment is applicable only “to any civil action commenced on or after the date of the enactment of this Act.” Pub. L. 112-29, § 19(b), (e), 125 Stat. 333. The law was enacted on September 16, 2011. The civil actions here were commenced well before that date; therefore, the new provision does not apply. At first glance, this case appears clear cut: In both the 02 and the 04 Actions, the issues implicating patent law arose as counterclaims. However, the Supreme Court has suggested—but declined to decide—that the evolving circumstances of a case may create a situation wherein exclusive Federal Circuit appellate jurisdiction would follow. Holmes, 535 U.S. at 829 n.1 (“[T]his case does not call upon us to decide whether the Federal Circuit’s jurisdiction is fixed with reference to the complaint as initially filed or whether an actual or constructive amendment to the complaint raising a patent-law claim can provide the foundation for the Federal Circuit’s jurisdiction.”); Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 814-15 (1988) (“We need not decide under what circumstances, if any, a court of appeals could furnish itself a jurisdictional basis unsupported by the pleadings by deeming the complaint amended in light of the parties’ ‘express or implied consent’ to litigate a claim.”). Whatever those evolving circumstances may be, however, they are not present in this case. Lexmark can point to no actual or constructive amendment of either complaint. Constructive amendments typically occur when a specific claim is not raised, but the parties by their actions act as if they consent to making the claim a part of the proceedings. See Torry v. Northrop Grumman Corp., 399 F.3d 876, 878 (7th Cir. 2005) (Posner, J.); Sunbeam Prods., Inc. v. Wing Shing Prods. (BVI) Ltd., 153 F. App’x 703, 706-07 (Fed. Cir. 2005) (unpublished opinion), cert. denied, 546 U.S. 1095 (2006) Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 9 (holding Federal Circuit had jurisdiction because pretrial order that added patent issue debated by the parties constructively amended the complaint even though not raised as a claim). Here, the patent claims were raised ab initio by the interested party as counterclaims, and no amendment would be necessary to make them formally part of the suit. Furthermore, Lexmark sought actually to amend the complaint in the 02 Action to add its patent claims with the express purpose of assuring Federal Circuit jurisdiction. R. 456 (Lexmark’s Mot. to Amend). Static Control objected, and Lexmark’s motion was denied. R. 649 (D. Ct. Order 1/9/07). Constructive amendment typically requires express or implied consent of the parties, both of which are lacking. Lexmark’s best argument is that its patent counterclaims in the 04 Action added new parties, and that the district court’s jurisdiction over Lexmark’s third-party complaint potentially “arose under” the patent laws. Unfortunately for Lexmark, this too seems insufficient to make the case one “arising under” patent laws. Lexmark offers no law or case addressing whether a third-party complaint can render any part of the controversy “arising under” patent law. However, the Supreme Court in Holmes compared the “arising under” inquiry for 28 U.S.C. § 1338 to the “arising under” inquiry for original jurisdiction under 28 U.S.C. § 1331. And we know that third-party defendants may not remove a controversy to federal court solely because the original defendant filed related federal claims against them. First Nat’l Bank of Pulaski v. Curry, 301 F.3d 456, 461-67 (6th Cir. 2002). Lexmark has presented no compelling reason to treat this case any differently. The district court’s jurisdiction arose under 28 U.S.C. §§ 1331 and 1367, and not under § 1338. Therefore, we have appellate jurisdiction under 28 U.S.C. § 1291. Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 10 III. INJUNCTION-BOND AMOUNT Static Control appeals the amount of the injunction bond entered by the district court when the district court issued the preliminary injunction in 2002.4 The final bond amount entered by the district court was $250,000; Static Control sought estimated damages of over $17 million. When the preliminary injunction was entered in 2003, Static Control appealed both the injunction and the bond amount to the Sixth Circuit. We vacated the injunction, but we made no mention of the bond. Lexmark I, 387 F.3d 522. Static Control sought rehearing from the Sixth Circuit specifically on the issue of the proper injunction-bond amount, which we summarily denied. In November 2009, only a few days after filing its notice of appeal, Static Control filed a Motion for Wrongful Injunction Damages in the district court, seeking actual damages of $7-10 million, well in excess of the $250,000 injunction-bond amount. R. 1473 (Static Control’s Mot. to Vacate). Lexmark opposed, arguing that the bond amount should serve as the cap on damages. R. 1495 (Lexmark’s Opp. to Mot. to Vacate). As late as January 29, 2010, Static Control was imploring the district court to “recalculate the bond to reflect the projected damages and set an evidentiary hearing to allow Static Control to prove its actual damages.” R. 1503 (Static Control’s Reply Mot. to Vacate at 14). After oral argument in this appeal and prompting from Lexmark, the district court recently denied this motion and ordered the clerk to release the security bond to Static Control. R. 1530 (D. Ct. Order 4/24/12). Static Control has sent us a letter brief asking us to ignore this order because the district court lacked jurisdiction to decide this amount following the filing of Static Control’s notice of appeal, an argument which Static Control presented in its most recent papers before the district court but not in its initial motion seeking the very relief it now claims the district court lacks the jurisdiction to award. 4 Static Control concedes that “a party cannot recover more than the value of the bond for injunction-related damages.” First Appellant Br. at 25 & n.10 (citing Mich. AFSCME Council 25, Local 1640 v. Matrix Human Servs., 589 F.3d 851, 860 (6th Cir. 2009)). Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 11 Lexmark contends that this panel should not consider this argument because the Sixth Circuit necessarily rejected Static Control’s claim in declining to vacate the bond amount on the initial appeal. Static Control argues that this issue may be considered because it was never “squarely decided” on the first appeal. First Appellant Br. at 24 n.9 (internal quotation marks omitted). “Issues decided at an early stage of the litigation, either explicitly or by necessary inference from the disposition, constitute the law of the case.” Hanover Ins. Co. v. Am. Eng’g Co., 105 F.3d 306, 312 (6th Cir. 1997) (internal quotation marks omitted); see also Bowles v. Russell, 432 F.3d 668, 676-77 (6th Cir. 2005), aff’d, 551 U.S. 205 (2007). Static Control appears to have the better of the argument, because we do not see how the prior panel’s lack of commentary on the bond amount (and subsequent decision not to rehear the appeal on the bond amount) contains a necessary inference that we found the bond amount to be proper. Ultimately, however, whether our refusal to reconsider Static Control’s appeal of the bond amount constitutes the law of the case does not matter because the bond amount was not improper. A bond amount shall be set “in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained.” Fed. R. Civ. P. 65(c). District courts have broad discretion in setting the bond amount. Div. No. 1, Detroit, Bhd. of Locomotive Eng’rs v. Consol. Rail Corp., 844 F.2d 1218, 1226 (6th Cir. 1988). “[T]he court may order a bond that does not completely secure the enjoined party or the court may decline to order a bond, if necessary for the purpose of effecting justice between the parties.” Id. at 1227 n.15 (internal quotation marks omitted). At the preliminary injunction hearing, Static Control’s CEO testified that the company would lose $17,463,580 if forced to halt sales for two years. The CEO testified to the overall method his company used to calculate that number, but never presented any underlying calculations. Cross-examination revealed a number of assumptions underlying Static Control’s estimate, including the assumption that it would take six years for Static Control to regain its previous market position if enjoined. The fact that the ultimate bond amount selected by the district court was only two percent of Static Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 12 Control’s claimed damages therefore carries little weight. The district court was not required to credit Static Control’s testimony solely because Lexmark did not present evidence to the contrary. The district court received evidence from Static Control, weighed the evidence against the strength of Lexmark’s claims, which were deemed strong at the time, and accordingly raised the initial bond from $75,000 to $250,000. We decline to hold that the district court abused its discretion in setting the bond amount under these circumstances. IV. STATIC CONTROL’S FEDERAL ANTITRUST COUNTERCLAIMS Static Control counterclaimed in the 02 Action under §§ 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15, 26, for violations of §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2, seeking damages and injunctive relief. 02R. 172 (2d Am. Answer & Counterclaim). The district court granted Lexmark’s motion to dismiss on the basis that Static Control did not have standing to bring the federal antitrust claims for damages or injunctive relief. R. 392 (D. Ct. Order 9/28/06). A. Standard of Review We review de novo a district court’s decision to dismiss a counterclaim for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). United Ass’n of Journeymen & Apprentices of the Plumbing and Pipefitting Indus., Local No. 577 v. Ross Bros. Constr. Co., 191 F.3d 714, 716 (6th Cir. 1999). In reviewing a motion to dismiss, we accept all non-conclusory allegations of fact as true and decide whether the claimant has stated a plausible claim for relief. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). The pleading must state “enough facts to state a claim to relief that is plausible on its face”; failure to plead sufficient facts will lead to dismissal of the claim. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). B. Antitrust Standing for Counterclaims with Money Damages Pursuant to the Clayton Act, 15 U.S.C. § 15(a), private parties may bring private actions for violations of the Sherman Act. Section 1 of the Sherman Act prohibits conspiracies to restrain trade. 15 U.S.C. § 1. “A Section 1 conspiracy requires more Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 13 than a manufacturer’s unilateral refusal to deal. ‘There must be evidence that tends to exclude the possibility that the [conspirators] were acting independently.’” Watson Carpet & Floor Covering, Inc. v. Mohawk Indus., Inc., 648 F.3d 452, 457 (6th Cir. 2011) (internal citation omitted) (quoting Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 764 (1984)). Section 2 of the Sherman Act prohibits the illegal monopolization of a market. 15 U.S.C. § 2. To bring a claim under § 2, a claimant must show “‘(1) possession of monopoly power in the relevant market; and (2) the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen or historic accident.’” Tarrant Serv. Agency, Inc. v. Am. Standard, Inc., 12 F.3d 609, 613 (6th Cir. 1993) (quoting United States v. Grinnell Corp., 384 U.S. 563, 570-71 (1966)), cert. denied, 512 U.S. 1221 (1994). To bring a private claim for damages under either section of the Sherman Act, the claimant must first demonstrate that it has standing. Although required in all cases, standing in an antitrust case is more onerous than the conventional Article III inquiry. “[A]ntitrust standing is a threshold, pleading-stage inquiry and when a complaint by its terms fails to establish this requirement we must dismiss it as a matter of law . . . .” NicSand, Inc. v. 3M Co., 507 F.3d 442, 450 (6th Cir. 2007) (en banc). The district court decides whether a claimant has adequately pleaded antitrust standing by balancing five factors: (1) the causal connection between the antitrust violation and harm to the plaintiff and whether that harm was intended to be caused; (2) the nature of the plaintiff’s alleged injury including the status of the plaintiff as consumer or competitor in the relevant market; (3) the directness or indirectness of the injury, and the related inquiry of whether the damages are speculative; (4) the potential for duplicative recovery or complex apportionment of damages; and (5) the existence of more direct victims of the alleged antitrust violation. Southaven Land Co., Inc. v. Malone & Hyde, Inc., 715 F.2d 1079, 1085 (6th Cir. 1983) (citing Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 14 (“AGC”), 459 U.S. 519, 537-45 (1983)). No one factor controls. Peck v. Gen. Motors Corp., 894 F.2d 844, 846 (6th Cir. 1990). Static Control alleges that Lexmark conspired with unidentified microchip suppliers and resellers of Lexmark-manufactured printers to restrain trade and otherwise monopolize “the relevant markets,” thereby reducing output, increasing prices, and maintaining Lexmark’s monopoly. Static Control defines the “relevant markets” as including three distinct but related aftermarkets for Lexmark-specific products: (1) the market for Lexmark replacement toner cartridges, (2) the market for component parts for Lexmark cartridges, and (3) the market for microchips for Lexmark cartridges.5 02R. 172 (2d Am. Answer & Countercl. at ¶¶ 17-18). The allegations repeatedly refer to the “relevant markets” as a group when the specific facts relate only to the market for replacement cartridges. For example, Static Control alleges that Lexmark has “an 85% share in each of the relevant markets,” id. at ¶ 18, but on closer examination the counterclaim alleges that Lexmark competes only in the market for toner cartridges, id. at ¶¶ 12, 24. Static Control alleges that Lexmark’s anticompetitive chips “exclude competition, restrict output, and increase end-user prices in the relevant markets,” id. at ¶ 47, but the counterclaim never identifies any change in competition, output, or prices in the market for component parts or microchips as a result of Lexmark’s conduct. The only specific allegations as to price and output relate to the market for toner cartridges. Id. at ¶¶ 50-52, 58. Therefore, although we read the allegations of the counterclaim in the light most favorable to Static Control, we must carefully consider the actual factual allegations underlying such conclusory allegations. Twombly, 550 U.S. at 556-57. In its counterclaim, Static Control’s allegations can be categorized into five practices by Lexmark that Static Control claims constitute anticompetitive conduct: 5 Lexmark argued below that the relevant market was the larger primary market for all brands of laser printer cartridges and parts, not just the aftermarket for Lexmark products. The jury in its advisory findings sided with Static Control. R. 1366 (Special Verdict Form at 15). On appeal, Lexmark does not concede its position on the relevant market, but argues against standing using the aftermarket. Second Appellee Br. at 40. Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 15 (1) the Prebate program;6 (2) using “lock-out” microchip technology in its printers, causing them to disable when any non-Lexmark replacement cartridge is inserted; (3) requiring Lexmark’s microchip supplier to refuse to sell replacement chips to anyone but Lexmark; (4) redesigning its microchips specifically to render cartridges that used Static Control’s microchips incompatible; and (5) filing the 02 Action targeting Static Control. First Appellant Br. at 12-15; 02R. 172 (2d Am. Answer & Countercl. at ¶¶ 32, 44-46, 54-56). When the allegations are read for specificity and plausibility, these actions target and affect the different markets in different ways. We therefore examine each of these alleged violations separately to see if Static Control has standing to pursue any of them. 1. Prebate Program Static Control alleges that the Prebate Program, through its lower prices and misleading statements that the end user committed to a license agreement when no such license existed, cajoled end users into purchasing fewer remanufactured cartridges and thereafter returning them primarily to Lexmark. As a result, Static Control was also harmed because it lost profits from the decline in sales of microchips and components for Lexmark-compatible cartridges following the decline in sales of remanufactured cartridges. First Appellant Br. at 16. As alleged, the Prebate Program targets only the market for remanufactured cartridges. No part of the Prebate Program relates to the market for microchips or components, even though the allegations support the Prebate Program’s incidental effects in the other markets. Static Control itself states that “Lexmark specifically launched its Prebate program to intimidate and to exclude competition from remanufacturers.” 02R. 172 (2d Am. Answer & Countercl. at ¶ 33) (emphasis added). And as discussed above, although Static Control’s allegations often refer to the “relevant markets,” the specific factual allegations explain only Prebate’s impact on the market 6 Specifically, Static Control complains that Lexmark engaged in anticompetitive conduct by creating two classes of otherwise identical cartridges, Prebate and non-Prebate, selling the non-Prebate cartridges at artificially inflated prices, falsely invoking patent rights to prevent remanufacturers from repairing Prebate cartridges, and engaging in other threatening behavior. Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 16 for remanufactured cartridges. For example, when Static Control alleges that Lexmark used Prebate to “effect[] its deliberate, unlawful, anticompetitive intent to raise prices and exclude competition,” id., we can conclude only that this allegation relates to the market for toner cartridges because of the lack of any allegations that the prices were raised in other markets. Having identified the proper market, we easily conclude that all five of the AGC factors are lacking with respect to the Prebate program. Although causation in the traditional sense appears properly alleged—the implementation of the Prebate program decreased the number of remanufactured Lexmark cartridges, which in turn decreased Static Control’s sales—Static Control fails to allege plausibly that the Prebate program was intended to harm Static Control. As the district court correctly held, the intended targets of Lexmark’s Prebate Program were the end users and the remanufacturers, not Static Control. R. 392 (D. Ct. Order 9/28/06 at 9). Static Control asserts that these conclusions erroneously rely on factual averments and that the district court failed to accept its facts as alleged, but Static Control itself alleges this: “Lexmark specifically launched its Prebate program to intimidate and to exclude competition from remanufacturers.” 02R. 172 (2d Am. Answer & Countercl. at ¶ 33); see also id. at ¶ 42 (“Lexmark’s sole purpose for deceiving end-users to believe they are contractually bound by [the Prebate Program] is to preserve, maintain, and enhance its unlawful monopoly power in the relevant markets.”). Static Control also fails sufficiently to identify its role in the relevant market for remanufactured cartridges. Traditionally, only claimants who are competitors or consumers within the injured market have standing to sue. Southaven, 715 F.2d at 1086. However, claimants who are not direct players in the relevant market may nonetheless have standing if their injury is “‘inextricably intertwined’ with the injury sought to be inflicted upon the relevant market or participants therein.” Id. The “inextricably intertwined” exception, however, is narrow. See Blue Shield of Va. v. McCready, 457 U.S. 465, 483-84 (1982). This exception was not designed to give standing to claimants whose injuries are a tangential byproduct of monopolistic conduct in a related market. Southaven, 715 F.2d at 1086. To succeed, the claimant must show that the Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 17 defendants “manipulated or utilized [the claimant] as a fulcrum, conduit or market force to injure competitors or participants in the relevant product and geographical markets.” Id. Static Control must therefore have alleged that an injury in Lexmark’s market—the market for replacement toner cartridges—is inextricably intertwined with the injuries Static Control claims to be suffering in the market for component parts and microchips. The district court rejected Static Control’s argument, because Static Control failed adequately to allege that it was “manipulated or utilized by the defendant as a fulcrum, conduit or market force to injure competitors or participants in the relevant product and geographical market.” R. 392 (D. Ct. Order 9/28/06 at 10) (quoting Province v. Cleveland Press Publ’g Co., 787 F.2d 1047, 1052 (6th Cir. 1986) (internal quotation marks and brackets omitted)). “If anyone is being manipulated according to [Static Control’s] allegations, it is the end consumer.” Id. at 10-11. We agree. Static Control’s counterclaim makes no mention of being used by Lexmark as a fulcrum, and Static Control does not allege that it was harmed because it was manipulated into harming the remanufacturers. Static Control on appeal argues that Lexmark used Static Control as a fulcrum to injure the remanufacturers by (1) falsely telling remanufacturers that using Static Control’s products would constitute infringement; (2) redesigning its microchips, thus forcing Static Control to redesign its microchips to remain compatible; (3) threatening legal action against Static Control; (4) and suing Static Control for baseless copyright claims. First Appellant Br. at 39. But, although these specific allegations are sprinkled in various sections of the counterclaim to support other arguments, we can find no allegations in the counterclaim that Lexmark manipulated Static Control in any way to carry out its anticompetitive Prebate Program in the market for remanufactured cartridges. “An inextricably intertwined injury is one that results from the manipulation of the injured party as a means to carry out the restraint of trade in the product market.” Province, 787 F.2d at 1052. Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 18 Static Control’s allegations establish that it was negatively affected by Lexmark’s manipulation of the end users into buying Prebate cartridges, but that Static Control itself was not used as a conduit to achieve the alleged anticompetitive effect in the remanufactured cartridge market. See Southaven, 715 F.2d at1086 (harm from tangential effects of anticompetitive conduct not enough to convey standing). Indeed, the allegations make very clear that Lexmark is using the end users to obtain the desired anticompetitive effects, rather than using Static Control. Static Control specifically alleges that Lexmark “fraudulently induces customers’ use of Prebate cartridges” and “exploit[s] consumers’ lack of information about choices in replacement cartridges” to reduce the number of non-Prebate cartridges on the market. 02R. 172 (2d Am. Answer & Countercl. at ¶ 37); see also id. at ¶ 38 (“Lexmark’s anticompetitive exploitation of consumers’ and end-users’ lack of adequate information increases prices and reduces output in the relevant markets.”) (emphasis added). No such allegations of exploitation or manipulation exist with respect to Static Control. The level of manipulation of the claimant—and the necessity of the success of such manipulation to achieve the anticompetitive conduct—is simply not present in this case with respect to Static Control. See Peck, 894 F.2d at 847. Even if we were to consider Static Control’s injury in the market for components and microchips sufficiently related to the harm caused by the Prebate Program in the remanufactured cartridges market, Static Control still lacks standing due to its failure to satisfy the remaining AGC factors. See Fallis v. Pendleton Woolen Mills, Inc., 866 F.2d 209, 211 (6th Cir. 1989) (holding no antitrust standing despite assuming claimant was used as a fulcrum in relevant market), abrogated on other grounds by Humphreys v. Bellaire Corp., 966 F.2d 1037 (6th Cir. 1992). Antitrust causation is much more limited than Article III standing. Here, Static Control’s injury is too attenuated to qualify. “[Static Control’s] injury is derivative; it is simply a side effect of [Lexmark’s] alleged antitrust violations.” Fallis, 866 F.2d at 210. Static Control also fails to establish the final three AGC factors, which all relate to the directness of Static Control’s injuries relative to potentially more-direct victims. Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 19 Static Control’s injuries as a result of the Prebate program are clearly a “byproduct” of the alleged antitrust violation. Province, 787 F.2d at 1053; Fallis, 866 F.2d at 211. The more-direct victims are the end users, who according to the allegations had to pay more for their cartridges as a result of the allegedly anticompetitive conduct, and the remanufacturers, who were unable to compete in the market for Lexmark-compatible toner cartridges after Lexmark’s Prebate program undercut their prices and reduced supply. Although the end users may have little incentive to sue, two of the remanufacturers raised (and ultimately settled) antitrust claims against Lexmark in the same action. R. 392 (D. Ct. Order 9/28/06 at 12). Where there are more-direct victims of the anticompetitive conduct, those victims have the standing to sue, rather than those affected indirectly. Southaven, 715 F.2d at 1087; Province, 787 F.2d at 1053-54. The existence of this clear class of direct victims increases the danger of duplicative recovery should Static Control be given antitrust standing to pursue the Prebate Program and receive treble damages.7 Static Control may seek only the damages from its own losses, but the concern of duplicative recovery relates more broadly to the issue of requiring a defendant to pay treble damages to parties both directly and indirectly injured from the same antitrust violation. See Ill. Brick Co. v. Illinois, 431 U.S. 720, 731 n.11 (1977) (discussing risk of duplicative recovery between direct and indirect purchasers). Finally, we agree with the district court that Static Control’s calculation of over $18 million in damages is speculative. R. 392 (D. Ct. Order 9/28/06 at 11). Static Control’s argument for directness of its injury relies heavily on the Second Circuit case Crimpers Promotions, Inc. v. Home Box Office, Inc., 724 F.2d 290, 294-95 (2d Cir. 1983), cert. denied, 467 U.S. 1252 (1984), as does much of its argument on standing. The plaintiff in Crimpers had standing because HBO and Showtime colluded to prevent his tradeshow from serving as a middleman between television show producers and cable operators, which was the only alternative forum for them to communicate. Crimpers had standing because “[i]njury to Crimpers was the precisely 7 The district court did not explicitly discuss the potential for duplicative recovery. Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 20 intended consequence of defendants’ boycott,” even more than the resulting injury to the tradeshow participants. Id. at 294. Here, the allegations of both intent and injury are less direct. The Prebate program reduced the number of cartridges available for remanufacture, which in turn reduced the number of microchips sold by Static Control to the remanufacturers. Static Control’s allegations resemble a classic case of a supplier seeking standing to recover for indirect damages following anticompetitive conduct directed at its customers’ market. Crimpers is simply inapposite. We agree that Static Control lacks standing to pursue its antitrust claims as they relate to the Prebate program. 2. Restraints on Microchips in Lexmark Printers and Cartridges Static Control also argues that the existence of microchips in the cartridges in the first place and Lexmark’s exclusive distribution agreement with its own microchip supplier are anticompetitive acts. These acts differ from the Prebate program because they directly target the microchip market in which Static Control is a competitor. Although Lexmark does not compete in the market for microchips, the allegations suggest that Lexmark uses its influence to restrain trade in the microchip market in order to restrain trade in the remanufactured cartridge market. Here, however, Static Control again lacks standing because it has failed to allege how Lexmark’s actions caused any antitrust injury. Static Control objects to the initial creation of the “anticompetitive microchips,” but fails to allege how the existence of a microchip requirement alone caused Static Control any injury. See 02R. 172 (2d Am. Answer & Countercl. at ¶ 44). Static Control makes no allegations at all relating to the change in prices for components and microchips as a result of Lexmark’s use of microchips in its toner cartridges, and Static Control makes no allegations regarding how a microchip requirement affected Static Control’s share of the market for components and microchips. Indeed, Static Control fails to allege plausibly how the creation of a microchip requirement hurt Static Control’s share of the microchip market, because without the requirement that market would not exist. It is possible that, without the microchips, Static Control would be able to sell more component parts, but Static Control does not make this allegation. Static Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 21 Control has failed to allege how the existence of a microchip requirement injured Static Control or otherwise gave Lexmark a monopoly in the related market for Lexmark component parts. Static Control’s allegations relating to Lexmark’s microchip supplier’s refusal to compete with third parties fares no better. As a self-proclaimed “leading supplier to toner cartridge remanufacturers,” id. at ¶ 30, Static Control fails to allege how the removal of one of its direct competitors from the components and microchips market following an exclusive distributorship agreement with a single customer caused any damage to Static Control’s position within those markets or profits. See New Albany Tractor, Inc. v. Louisville Tractor, Inc., 650 F.3d 1046, 1052 (6th Cir. 2011) (“Merely demonstrating the existence of an exclusive distributorship in a market area does not violate Robinson–Patman—or any other antitrust provision.”). In general, the removal of a competitor increases (not decreases) the remaining suppliers’ market share, and Static Control has not alleged that Lexmark was a former customer or that absent the exclusive agreement Lexmark would have purchased from Static Control. “Antitrust injury does not arise for purposes of § 4 of the Clayton Act until a private party is adversely affected by an anticompetitive aspect of the defendant’s conduct.” Atl. Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 339 (1990) (citation and emphasis omitted). Cases have routinely rejected claims of antitrust violations that may very well be violations when the claimants stood to gain from the anticompetitive conduct. Therefore, “[Static Control] cannot recover for a conspiracy to impose nonprice restraints that have the effect of either raising market price or limiting output.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 583 (1986); Datagate, Inc. v. Hewlett-Packard Co., 941 F.2d 864, 868-69 (9th Cir. 1991) (“As an existing competitor, [claimant] would have benefitted from any chilling of new entry into the market. Therefore, [claimant] can claim no injury as a result of such chilling.”) (citation omitted), cert. denied, 503 U.S. 984 (1992). Static Control has failed plausibly to allege any antitrust injury stemming from Lexmark’s decision to use microchips in its cartridges and to remove its own supplier from the market for microchips. Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 22 3. Redesigning Microchips to Circumvent Static Control’s product Once the market for microchips was created, however, the issue becomes whether Lexmark can engage in a conspiracy to eliminate that market or stifle competition within that market. If Lexmark were able to maintain a monopoly on remanufactured toner cartridges by making cartridge parts wholly unavailable, Static Control might have standing to pursue an antitrust violation. See Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451, 463-64 (1992). The allegations, however, do not sufficiently allege such behavior. Static Control does not specifically allege a tying scheme under § 1 of the Sherman Act, as was the case in Eastman Kodak, nor does Static Control allege any facts to suggest that the prices for parts increased as a result of being illegally tied to the market for cartridges. Static Control alleges that Lexmark continuously redesigned its microchips “to exclude competitors from the relevant markets, restrict output, and increase end-user prices.” 02R. 172 (2d Am. Answer & Countercl. at ¶ 45). But Static Control does not allege how Lexmark’s redesign decreased competition in the markets in which Static Control competes, the market for microchips or parts. Static Control does not even identify in its pleading who competes in the microchip or parts markets, what their market share is, whether they are controlled by Lexmark, what their prices were, or how their prices were affected by Lexmark’s redesign (or any of Lexmark’s conduct for that matter). See CBC Companies, Inc. v. Equifax, Inc., 561 F.3d 569, 572 (6th Cir. 2009) (holding allegations insufficient to establish antitrust injury in part due to failure to identify other market players). The counterclaim lacks other supporting allegations such as the nature and frequency of Lexmark’s redesigns and how quickly replacement products were able to adapt to the changes. Nor does Static Control make any non-conclusory allegations to refute the possible business explanation that Lexmark, like most companies, continuously updates its products over the years for legitimate competitive reasons. Twombly, 550 U.S. at 553. Static Control’s allegations with respect to the microchip redesign therefore also fail to establish antitrust standing for any cognizable antitrust injury. Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 23 4. Filing Suit Lexmark further correctly observes that the act of filing suit generally does not constitute an antitrust injury under the Noerr-Pennington doctrine.8 Second Appellee Br. at 47; see E. R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961); United Mine Workers v. Pennington, 381 U.S. 657 (1965). Although exceptions are made when the filing is a sham for interfering with competition, the first inquiry for identifying sham litigation is objective reasonableness: “Only if challenged litigation is objectively meritless may a court examine the litigant’s subjective motivation.” Prof’l Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49, 60 (1993). We cannot say that Static Control has plausibly alleged that the 02 Action was “objectively meritless.” See 02R. 172 (2d Am. Answer & Countercl. at ¶ 56). Static Control’s allegations focus solely on Lexmark’s intent behind bringing the copyright action; Static Control does not offer any allegations upon which we can plausibly conclude that the copyright action was “objectively meritless.” The Sixth Circuit’s ultimate conclusion that Lexmark lacked a valid copyright claim is not determinative of whether the initial suit was reasonable. Prof’l Real Estate, 508 U.S. at 60 n.5. We agree with Lexmark that its efforts in federal court, as alleged, should be immune from antitrust suit. C. Antitrust Standing for Counterclaims Seeking Injunctive Relief The Clayton Act also permits a private party to obtain injunctive relief “against threatened loss or damage by a violation of the antitrust laws.” 15 U.S.C. § 26. The district court did not distinguish between Static Control’s request for injunctive relief and its request for monetary damages when dismissing the counterclaim for lack of standing. See R. 392 (D. Ct. Order 9/28/06 at 12). Static Control argues that the district court separately erred in dismissing its claim for equitable relief because the last three AGC factors are inapplicable to whether a claimant has standing to seek injunctive relief. 8 Static Control claims Lexmark’s Noerr-Pennington argument is waived as it was not raised below and was raised on appeal only in a footnote. Third Appellant Br. at 7 n.3. However, “standing is a jurisdictional requirement that cannot be waived, and such may be brought up at any time in the proceeding.” Zurich Ins. Co. v. Logitrans, Inc., 297 F.3d 528, 531 (6th Cir. 2002). Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 24 First Appellant Br. at 51. Lexmark argues that the standing requirements for obtaining injunctive relief are no different from the standing requirements for obtaining monetary relief when, as here, Static Control also seeks money damages. Second Appellant Br. at 56 (“The requirements for antitrust standing are the same whether the antitrust plaintiff seeks damages only or damages and injunctive relief.”). The Clayton Act does not “authorize a private plaintiff to secure an injunction against a threatened injury for which he would not be entitled to compensation if the injury actually occurred.” Cargill, Inc. v. Monfort of Colo., Inc., 479 U.S. 104, 112 (1986). The only difference between a claim for equitable relief and one for damages is that equitable relief is available at the mere threat of antitrust injury. Because we have held that Static Control has failed to plead an antitrust injury, we affirm the dismissal of Static Control’s claim for equitable relief. See Valley Prods. Co. v. Landmark, 128 F.3d 398, 402 (6th Cir. 1997). V. STATIC CONTROL’S LANHAM ACT COUNTERCLAIM Static Control contends that Lexmark violated the Lanham Act by engaging in false advertising. Static Control alleges that Lexmark “falsely informed customers that SCC’s products infringe Lexmark’s purported intellectual property,” and “misled . . . customers of SCC’s products that license agreements prohibit remanufacturing Lexmark toner cartridges, when no license agreements actually exist,” causing Static Control’s customers to believe that Static Control is engaging in illegal conduct and thereby damaging Static Control’s business and reputation.9 02R. 172 (2d Am. Answer & 9 The Lanham Act provides: Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which (A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or (B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 25 Countercl. at ¶¶ 2, 84-90). The district court dismissed Static Control’s counterclaim for lack of Lanham Act standing because Static Control lacked antitrust standing, holding that “[m]ultiple courts have held that the factors” for antitrust standing are the same as for Lanham Act standing. R. 392 (D. Ct. Order 9/28/06 at 13) (citing Fifth and Third Circuit cases). Static Control maintains that the test “[i]n this Circuit” is “not the same as the . . . test for antitrust standing.” First Appellant Br. at 53 (citing Frisch’s Rests., Inc. v. Elby’s Big Boy of Steubenville, Inc., 670 F.2d 642, 649-50 (6th Cir.), cert. denied, 459 U.S. 916 (1982)). Frisch’s Restaurants held that a Lanham Act claimant need not demonstrate actual losses as a result of the defendant’s misleading use of the claimant’s trademarks in its advertisements, only a “‘likelihood of injury and causation.’” Id. at 650 (quoting Johnson & Johnson v. Carter-Wallace, Inc., 631 F.2d 186, 190 (2d Cir. 1980)). Since Frisch’s Restaurants, the Second Circuit has further described its approach, called the “reasonable interest” approach, as finding that the claimant has standing if the claimant can demonstrate “(1) a reasonable interest to be protected against the alleged false advertising and (2) a reasonable basis for believing that the interest is likely to be damaged by the alleged false advertising.” Famous Horse, Inc. v. 5th Ave. Photo Inc., 624 F.3d 106, 113 (2d Cir. 2010). We have not addressed Lanham Act standing since Frisch’s Restaurants. Lexmark urges us to follow one of the narrower approaches adopted by our sister circuits. The Seventh, Ninth, and Tenth use a categorical test, permitting Lanham Act suits only by an actual competitor making an unfair-competition claim. L.S. Heath & Son, Inc. v. AT & T Info. Sys., Inc., 9 F.3d 561, 575 (7th Cir. 1993); Waits v. Frito-Lay, Inc., 978 F.2d 1093, 1108-09 (9th Cir. 1992), cert. denied, 506 U.S. 1080 (1993); Stanfield v. Osborne Indus., Inc., 52 F.3d 867, 873 (10th Cir.), cert. denied, 516 U.S. 920 (1995). These circuits, however, have distinguished the standing inquiry between claims of false association under 15 U.S.C. § 1125(a)(1)(A) and false advertising under to be damaged by such act. 15 U.S.C. § 1125(a)(1). Nos. 09-6287/6288/6449 Static Control v. Lexmark Int’l Page 26 § 1125(a)(1)(B) and do not require direct competition for claims of false association. See e.g., Waits, 978 F.2d at 1108-09. Static Control’s claim is for false advertising and would fail under this stricter standard, because Static Control and Lexmark are not actual competitors. The Third, Fifth, Eighth, and Eleventh Circuits all reference antitrust standing or the AGC factors in deciding Lanham Act standing. Conte Bros. Auto., Inc. v. Quaker State-Slick 50, Inc., 165 F.3d 221, 233-34 (3d Cir. 1998) (Alito, J., authoring); Procter & Gamble Co. v Amway Corp., 242 F.3d 539, 562-63 (5th Cir.), cert. denied, 534 U.S. 945 (2001); Gilbert/Robinson, Inc. v. Carrie Beverage-Missouri, Inc., 989 F.2d 985, 990-91 (8th Cir.), cert. denied, 510 U.S. 928 (1993); Phoenix of Broward, Inc. v. McDonald’s Corp., 489 F.3d 1156, 1162-64 (11th Cir. 2007), cert. denied, 552 U.S. 1275 (2008). The Third Circuit nominally uses a “reasonable interest” approach, but applies it by looking to the five AGC factors. Conte Bros., 165 F.3d at 233-34. The Third Circuit has also rejected any distinction in standing between the two types of Lanham Act claims. Id. at 232. The Second Circuit’s more recent cases reject the Third Circuit’s conflation of the reasonable-interest test with the AGC factors as “unnecessarily complicat[ing] the inquiry,” Famous Horse, 624 F.3d at 115 n.3, setting its approach apart. Therefore, Lexmark’s statement that the reasonable interest test and the AGC test are not “conceptually different,” Second Appellee Br. at 60, is not correct. Although the claimant in