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IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF DELAWARE

SILICON ECONOMICS. INC.,PlainlilT.

v.FINANCIAL ACCOUNTING FOUNDATION.and FINANCIAL ACCOUNTING STANDARDSBOARD.

Defendants.

CIVIL ACT ION

NO. 11-163

MEMORANDUM ON MOTION TO I>ISMISSB:lylson, J. August 17,2011

Silicon Economics. Inc. ("'SE''') filed this action seeking damages and clarification of itsownership interest in its invention, ' E

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I. Facluat and Pruccdunltl-listoryAcco rding to the Complaint in this matter. FASB is ' the principal organization in the

private sector for establishing standards of fi nancial accou llting which govern the preparation offinancial statements by public companies in the United States." (Compl., ECF No. I 9.) FAFis a private. non-governmental. non-profit fo undation that governs FAS B. iliL '14.)

SEI alleges that FASH "has at least 90% o f the market lor establishing an d decreeingfinancial accounting standards in the United States:' and the remainder of the market consists ofindividuals, academics. government bodies, corporations. and accounting firms that articu lateaccounting standards. as well as the Int ernational Accounting Standards Board. lliL. 10.)

SEI is one OfU1CSC other participants and is attempting to estab lish more efrectiveaccounting s tandards in direct competition with FASB. (llL. 13.) To tha t end. SEI dcvelopedlhe Invention. an equation tbat " improvles .l the acc uracy o f net income measurement andembraces mark-to-market acco unting of asset and liability values Ito1yic1dl1 accurate and currentba lance sheets:' (1..4" 4J 19.) SE I eOlllends the Invention reso lves the fu nd amental accountingproblem, i.c. either the balance sheet or the income sheet can be accurate and useful , but notboth. (Ill ' i l 14. 19 .)

Pertinent to thi s litigation. on July 6. 2006. FASB requested public comments"conccming the most basic objects tor fin ancial reporting and how to accomp lish such objects."(Jd . ' 120.) FA SB's invitation also stated that "all comments recei ved by the FASB arccons idered public infonnation. Those com ments will be posted 10 the FASB's website and willbe includcd in the project's public record." (kL. 21.) SEI provided com ments. includ ingbriefing on the Inv ention. (lei . '122.) SE I then participated in a roundtable discussion and SE J' s

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founder. Joel Jameson ('Jameson"). privately mcl with the FASB regarding the Invention. (llL.)Several months later. Jameson became aware of certain terms and conditions on FASB's

website. namely:"Any information or material you transmit . . . by . . . sending an e-mail . . . includinginformation such as personal data. comments and suggestions (whcther in responseto a specific query or otherwise) witl be treated as non-confidential and nOIl-proprietary .... Unless we agrce in writing in advance. anything you transmitwhether electronically or in hard copy may be used by the FAF/FASB and itsaffiliates for any purpose. including. but not limited to . reproduction. disclosure,transmission. publication, broadcast and posting. This means thallhe FAf-/FASBmay use the ideas, concepts. know-how or techniques you transmit . . . ,"

(ld:. 23) (the "Website Tcnns") . Unaware of the Website Terms prior to submi tting hiscomments in July 2006. Jameson contacted FAS13 to clarify and eonlirm FASI3 did not claim anyownership interest in the Invention. (Jd. 24.) Afier rece iving no response for more than twoyears. Jameson again co ntacted FASB through legal co unsel. ( ~ ' 1 2 5 . ) In response, FASB"claim ed that it ha[sl a royalty-free ownership interest in the SEllnvention . . . and categoricallyrefused to release

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Still seeking clarity, SEt filed the instant Complaint asserting claims for restraint of tradeand monopolization in violation ofthc Shcnnan Act, 15 U.S.C. L 2: a claim fordcclaratoryrelief under Cali fornia law; and a claim lor unl::lir compctition undcr C lI i fornia law. (Comp\.28 -44.) On I\pril29. 20 11. Defendants filed the instant Motion to Di smi ss Plaintiff s ComplaintWith Prejudice for lack of urisdi ction and for failure Lo state a claim upon which re lie f can begranted. SEJ also filed a Mot ion for a Preliminary Injunction (MOL , ECF No.6). but agreed thcCo urt should fi rst rulc on Defcndants ' Motio ll to Di smiss (Ordcr, ECF No. \6 ).II . .Jurisdi ction l I I d St:tnd ard of Ilcyicw

A. .Jurisdi clionThe Court has jurisdiction over SE I's antitrust claims pu rsuant to 28 U.S.C. 1331 and

1337. and supplemental jurisdiction over its California law claims undcr 28 U.S.c. 1367(a).SEI contends venue is proper pursuant to 15 U.S.C. 22. Defendan ts ha ve not objected to venuein this Di strict.

B. S tandard of Rc yicwA Rule 12(b)( I) motion to di smiss fo r lack of subject matter jurisdiction presents either a

facial attack or a fac \LIal attack. CNA v. Uni ted States, 535 F.3d 132. 139 (3 d Cir. 2008); seeFed. R. Civ. P. 12(b)( I). A facial attack concerns an alleged plead ing deficiency. whereas afaelllal auack concerns th e actual failure ofa plaintilTs cla im to comport factually with thejurisdictional prerequisites. CNA. 535 F.3d at 139.

On a facial allack. the Court must consider the allegations oft11c co mplain l as true.Mortensen v. First Fed. Say. & Loan Ass ' n. 549 F.2d 884 , 891 (3d Cir. 1977). In contrast, thercare three important consequcnccs of a factual attack: (I ) there is no presumption oftruthf-ulness;

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(2) the plaintiff bears the burden ofpraving subject matter jurisdiction: and (3) the Court hasauthority 10 make f:lcLual findings on the issue. and can look beyond the pleadings to do so.CNA, 535 F.3d at 145. Derendants appear to be making a facial attack

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that the pleader is ent itled to re lief. W. I>enn Alleghenv Ilcahh Sys. v. UPM C, 627 F.3d 85. 98(3d eir. 20 I 0). The complaint must state factual allegations that. taken as a whole. render theplaintio-s entit lemcnt to relicfplausible. II I This does not impose a probability requirement. butinstead calls for enough facts to raise a reasonab le expectation lhat discovery will reveal evidenceo f the neccssary elements. liL A claim has facial plausibili ty when the plaintiffplcads factualconlent that allows the court to reasonably inter that the defendant is liable for the misco nductalleged. Gelman v. State Farm Mut. AlIto.lns. Co . 583 r.3d 187 , 190 (3d Ci r. 2009).

"[JJudging the suffi ciency ofa pleading is a context-dependent exercise. Some claimsrequire more factual explication than others to state a plausible claim for relief: UPMC, 627F.3d at 98 (reversing district court's applicat ion of heightened scru tiny in antitrust context)(ci tation omitted).

Accordingly. the Court considers the factual al legations in SE I's complaint as tn le fo r allpurposes of Defcndants' Motion.III. Discussion

Defendants arguc the Co urt should dismiss SE I's Comp laint because SE llacks standingunder Article III and has l i l c d to sufficiently plead its claims fo r relier. Defendants a.lso arguethe Co urt should decline to exercise supplemen tal jurisdiction over SEI s state law claims if theCourt dismisses SEI's federal claims.

A. Sianding

Defendants contend that SE I has failed to es tablish an act ual case or controversy exists inthis mailer because it cannot sa tisfy the "i njury-in-face and "fairly traceablc" clements ofco nstitutional standing. As stich, they argue the Court lacks jurisdiction over thi s casco SEI

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opposes Defendants' Motion and argucs its claims arc justiciable because Defendants' rcfllsal torelease its claimed ownership interest in SEI's patent has created uncertainty regarding SE l" sownership interest. In reply, Oerendants contend any alleged harm is only theoretical becausethey have not made any use of the Invention and that SEI has failed to sufficiently allege anyharm. The Court agrees with Defcndants.

In its Opposition, SEI cannates Defendants' Article III and California declaratory reliefarguments, but California law regarding declaratory relief is inapposite to the question of Article111 standing. Article II I of the Constitution limits the exercise of federal judicial power toadjudication of actual cases or controversies. Toll Bros., Inc. v. Twp. of Readington. 555 F.3d131, 137 (3d eif. 2009). This limitat ion is enforced through several justiciability doctrines.including, standing, Illootness, ripeness, the po1iticnl-qucstion doctrinc, and the prohibi tion 011advisory opinions. kL.

Pcrhaps the Illo st important of these doctrines is standing. Id . The "irreducibleconstitutional minimum" of Article II I standing consists of three elements: ( I) the plaintiff musthave suffered

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the manner and degree of evidence required at the successive stages of the litigation:' llL. On amotion to dismiss, allegations may suffice because they are assumed true. Id. Thus, to slate aninj ury in-fact sufficient to survive a motion to dismiss, SET must sufficiently plead that it ha ssutTered some concrete harm because of Defendants' conduct. See N.J. Physicians. Inc. v.President of the United States. F . 3 d No.1 0-4600,2011 WL 3366340. at 3 (3d Cir.Aug. 3. 20 II) (noting "standing cannot be inferred argumentatively from avemlcnts in thepleadings bu rather must affi rmativel y appear in the record'") (quotations omitted).

To satisfy the injuryin.fact element. the plaintirfmust have suffered a palpable anddistinct harm that aflects the plaimiffin a persona l and individual way. Id. at 3; Toll Bros., 555F.3d at 138. In an action ror declaratory relief. the plaint iff need not suffer the full harmexpected, so long as there is a substantial controversy, between parties ha ving adverse lega lintere sts, of sufficient immediacy and reality to warralll issuance of a declaratory judgment.Khodara Envti., Inc. v. Blakev, 376 F.3d 187, 193-94 (3d Cir. 2004): 51. Thomas-51. John Hotel& Tourism Ass'n v. Virgin Islands. 2 18 F.3d 232. 240 (3d Cir. 2000).

The injury Illust be concrete and particularized, and actual or imminent. Lujan, 504 U.S.at 564 n.2: N.J. Physici

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Nonethel ess. "[!"Injury-ill-fact is not Mount Everest."' Danvers, 432 F.3d at 294. The con tours ofthe requirement. though not precisely defined. arc very generous. req uir ing only allega tions ofsome specific. identifiable trifle or injury. (cit ing Bowman v. Wilson, 672 F.2d 11 45. 1151(3d Cir. 1982.

In its Complaint. SEI alleges Defendants have eremed uncertainty regarding SE J' sexclusive rights in the invention, which has harmed SEI's replllation

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ofsllccessFul1y enforcing il. ' liL Thus. any cloud or uncertainty regarding enforceabilitydiminishes the property 's market value, and any party who seeks ajudicia l declaration tocl iminate that uncertainty can point to the diminution in value as an injury-in-facl. liL But if thatuncertainty is always deemed suffic ient. standin g would become a meaningless requirement. &

To exclude the possibility of rendering standing meaningless, Judge Ellis detemlincd thatstanding requires the cloud or uncertainty to consist of a sufficiently immediate, definite. andconcrete threat to the legal right at issue. liL Thus, the question is whether the defendant hastaken definite and concrete steps to assert a claim or ha s at least threatened to assert a claimadvcrse to the plaintilrs interests. Id. at 1150. In Robishaw, the Army took no firm position,only suggesting that it may have a royalty-free license. Id. The refo re ./udge Ellis concluded theplainti(fhad failed to sulIlcientl y allege an injury-in-fact based on a cloud on its patent. liL SEIhas similarly fail ed to sllilicicntl y allege an injury in fact.

As for the alleged harm to reputation and goodwill. SEI offe rs on ly bald assertions oft ~ r y . SEI has not orfered any factual allegations o n which it bases its contention it has suffered

harm to reputation or goodwill. Failing to meet its burden of alleging stand in g aI this stage of thelitigation. the Court will dismiss SE I's Complaint without prejudice to SEI amending itsComplaint. !

The cases SEJ rel ies on do not persuade the Court otherwise. In Leonard Carder,LLP v. Patten, Faith & Sandrord. the Calirornia COLIrt of Appea ls fo und an actual controversyjust ifying ju risdiction over the claim ror state- law declaratory relief. 116 Cal. Rptr. 3d 652, 653(Cal. Ct. ApI'. 20 I 0). Two law finns were disputing the allocation oflegal fees fro m settlementof a class action . liL a1 654. The money was held in trust and the de rendant claimed it \ ...as owedforty percent based on a prior agreement. Jd . The plaintiff disputed the ex istence of theagreement and sent a check for the significantly lower lodestar amount , with a note that thepayment was in "final settlement. liL Before cashing the check, the defendant amended thememo lille to re nect the payment was "c redit toward final sett lemc nt." Id. Unlikc in this case.

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B. Antitrust ClaimsDefendants offer two arguments in favor of dismissal of SEI' s antitrust claims. First.

they contend they are not engaged in trade or commerce and. therefore, the Sherman Act does notapply to them. Defendants also argue SEI has failed to sufficiently plead a relevant productmarket because no market exists; it has nol sufficiently pled an antitrust injury becauseDefendants and SEI do not compete; Defendants maintain a monopoly through the Securities andExchange Commission ("SEC ') not any anti-competitive conduct in violation of 2: andDefendants have engaged in unilateral conduct, not any combination in violation of I.

In response. SEI foclises on establishing that Defendants' non-profit statliS is notdispositive of the trade or commerce issue. Further, SEI contends there is commerce involvedbecause Defendants allegedly misappropriated SEI's patent and SEI is a conunercial entity. Asfor the substance of the claims, SEI argucs it sufflcicntly pled antitrust injuries ofreduccdinnovation and excluded competition. As for the relevant market. SEI argues the Court must alsoconsider potential markets, and SEI could po tentially compete with Defendants. For its 2claim, SEI contends Defendants are unlawfully maintaining their monopoly by taking SEl 's

each party had taken a firm position on the amount due the defendant , which created an ongoingcontroversy warranting declaratory relief. See id . at 656-57.

In Principal Life Insurance Co. v. Robinson, the Ninth Circui t concluded an actualdispute existed regarding the calculation of rent under a lease agreement. 394 f..3d 665. 668 (9thCir. 2005). The plaintiff had previously attcmpted 10 sell its intercst in the lease. but the disputeregarding the rent calcul ation unden11ined the deal. .kL. The Ninth Circuit found this pastdilliculty suggested the plaintilTwould continue to have difficulty, which warranted declaratoryrelicf. Id. at 672. SE1, however, has not alleged any such past difJiculties or expcriences with theInvention, making only conclusory assertions that its tit le is uncertain and that is has sufferedharm to reputation and goodwilL Without more facts, SEI 's circumstances are distinguishablefro m those in Leonard Carder and Principal Life.

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property. and for the I claim. SEl argues the Website Tcnns may loml an agreement inrestraint of trade and both parties to an agreement need not share anti-competitive intent.

1.11 reply. Defendants argue they are not engaged in trade or commerce because theiraccounting standards arc freely available to anyone in the world and arc available without chargeaJld without paymcnt to Dcfendants. save for sa les of bounded volullles and unrelated licensi ngarrangements. They further contend that the challenged conduct i.e. adoption of and adherenceto the Website Terms. is not motivated by commercia l objectives or advantages despite receipt ofgovenuncnt funds. In addition. Defendants argue they are not participants in the commercialmarket for accounting standards and SEI only a lleges injuries to itself rather than 10 competition.Further. Defendants maintain they did not engage in concerted act ion. but unilaterally adoptedthe Website Terms.

I. "Trade or Commerce"The purpose of antitrust law is 10 regulate commcrce. which entails detennining the

applicability of antitrust laws by considering the nature of the activity being challenged. not thenature of the organization engaged in the activity. 1B Phillip E. Arceda & Ilerbert HovenkaJllp,AntitnJst Law 260, nt 158, 161 (3d cd, 2006); sec Apex Hosiery Co, v, Leader, 310 U,S, 469 ,493 n, IS, 495 (1940); sec also United States v, Brown Univ" 5 F.3d 658, 665 (3d Cir, 1993)(finding antitrust laws apply to non-profit organizations engaged in commerce). Thus. thethreshold issue is whether the antitrust laws even apply to thc challenged conduct. Brown Univ .

5 F.3d at 665.Il is axiomatic that antitrust laws rcgul

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conduct in light or th e totality orthe surrounding circumstances. ld.. at 666; see Arecda &Ilovenkamp, supra'i 262a. at 177 (endorsing object ive test whi ch asks whcther antitrustde rend ants are likely to receive direct economic benefit as a result of any reduction incom peti tion in markct in which targct firms operate). An efrec t on prices is not essential. Klor 's ,Inc. v. Broadway-Hale Sto res, Inc., 359 U.S. 207. 2 13 n.7 (1959). The Third Circuit's approachdoes not encompass restraints that result in incidental economic effects. See Pocono InvitationalSports Camp, Inc, v, NCAA, 317 F, Supp, 2d 569, 584 (E,D, Pa. 2004) (I3rod)', J.).

On a motion to dismiss, th e Court should determine whether the cha ll enged conduct iscom mercial based on the faClual allega tions in the complaint. See Hamilton Chapter ofAlphaDelta Phi. Inc. v. Hamilton Co lI.. 128 F.3d 59, 66 (2d Cir. 1997). in lhis case, SE I is cha llengingDefendants' adoption or and adherence to the Website Term s. pa rticularly the reserva tion ofrights to use any submiucd idcas for any purpose, and subsequent refusal to release anyownership interest. (CampI. ~ ' I 20, 27.f SE I alleges that Defendants have unlawfully claimed aproprietary interes t for the purpose of exclud ing SEI as a competitor in the market forestablishi ng accounting stand a rds in the United States. M 37.) SEI contend s Derendants'conduct lessens competition, discourages public comment. disco urages innovation, andentrenches Defendants' monopoly. (ld.. 38 , 40.)

It is important at the outset to define the apparent scope or SEl' s antitrust claims againstDefendants. SEI is not challenging FASB's conduct in setting standards, which is a marccommon subject of antitrust review. Instead, SEI is challenging Defendants' Website Te rm s

2 As noted below. Defendants' counsel's unconditional recantation oran ownershipinterest at o ral argument must be given some weight in assessing Plaintiffs allegations, whichwill presumably be clarified in an amended complaint.

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which apply to voluntary submissions of solicited comments.Federal courts have exper ience with the " trade or commercc" issue, particularly in the

context of the NCAA's regulation of student athletics. Courts have concluded that when thechallenged conduct consists of academic rules or player-eligibility requirements. the conduct isnon-commercial in nature. E. g. , Smith v. NCAA. 139 F.3d 180. 185-86 (3d Cir. 1998) (holdingSherman Act does not apply to NCAA rules and cJigibility requirements that primarily seek toensure rair competition in collegiate sports. not to provide the NCAA with a commercialadvantage). rcv'd on other grounds. NCAA v. Smith, 525 U.S. 459 (1999); Pocono Invitational,317 F. Supp. 2d at 583-84 (concluding rules relating to recruitment at summer camps are likeeligibility rules and were enacted in spirit or promoting amateurism in keeping with NCAA 'sgeneral goals): Collcgiatc Athletic Placement ServoInc. V. NCAA. No. 74-1144. 1974 WL 998,at *4-5 (O.N.J . Aug. 22, 1974) (finding NCAA policy against for-profit companies that findathletic scholarships for student-athletes was motivated by intent to ensure academic standardsand amateurism, not by anti-competitive Illotive or intent ).

But when the challenged conduct rcstrains revenue, output, or sa larics. the rules arealmost always cOlllmercial. E.g.. NCAA v. Bd . of Regents ()f Univ. of Okla . 468 U.S. 85. 11 3(1984) (finding NCAA's television plan amounted to unlawful horizontal re straint on members'ability to se ll television rights to their games because it operated to raise prices and reduceoutput): Law V. NCAA, 34 F3d 10 IO. 101 2 (10th Cir. 1998) (affinning injunction againstNCAA's enforccment of rule that limited salaries of entry-level coaches as unlawful horizontalrestraint on trade). The Court finds these cases usefu l in this case because they suggest aspectrum of conduct to evaluate Defendants' alleged conduct.

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Compared to this range of conduct. SEI has not sufficiently alleged that Defendants 'conduct is commercial in nature. Considering the totality or circumst;mces and SEl's allegations,FASB sought volunta ry comments from the public in an efTort to establish and promulgateaccounting standards for public companies within the United States. wh ich is FAS B's exclusiveprerogative. ) Defendants also adopted the Website Terms to reserve FASB's right to use anysubmissions for any purpose. including reproduction. disclosure. and publication. SEl' sallegat ions do not suggest conduct that is commercial in nature - there is no sale, no exchange.and no production. Compare. e.g., Brown lJniv ., 5 F.3d at 668 (determining financial assistancefor students is part and parcel of pricesetting process and. thus, is a commercial transaction).wi th . e.g. , Apex Hos ierv. 310 U.S. at 50102 (concluding labor union strike intended to co mp elcompany to accede to demands nol trade or commerce despite delaying interstate shipment orgoods); Marjorie Webster Junior Coil., Inc. v. Middle Siaies Ass ' n of Coils. & Secondary Schs.,432 F.2d 650, 654-55 (D.c. C ir . 1970) (finding non-profit organization's decision to denyaccreditation to for.profit school not commcrcial absent intent or purpose to affect commercialaspects).

J The SEC has recognized FASB as the only entity \vhose work product can berecognized as "generally accepted" for the purpose of public companies' financial reporting.Commission Statement of Po!icy Rcaffirming the Status of the FASB as a Designated Pri vatcSector Standard Seller, 68 Fed . Reg. 23 ,333. 23.333-34 (May 1. 2003); see SarbanesOxley Actor 2002, Pub. L. No. 107-204, 108, 116 SIal. 745, 768-69 (codi fi ed al 15 U.s.C. 77s).Congress also ensured FASB would remain independent from the targets of its standards bycreating an independent source of funding f-or FASI3 so that it no longer had to depend onvolunt ary contributions or sales of its standards. Donna M. Nagy, Playing Peckaboo wilhConstitutional Law: The rCADB and Its Public/Private Status. 80 Notre Dame L Rev. 975. 98789 (2005): sec Sarbanes-Oxley Acl 109 (codified al 15 U.S.C. 72 19).

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SEI contends FASS's conduct is commercial because SEI itself is a commercialenterprise and Defendants misappropriated its patented Invention. But it is the naturc or lhecond uct thai controls. not the nature orlhe organizalions. The alleged conduct enab les FASS tosolicit voluntary submissions or accounting-standard proposals. and then perform its function ofes tabli shing and promulgating those standards without being hamstrung by subsequentin tellectual property claims. Any economic consequence is an indirect by-product of theseefforts. SEI ha s not alleged lhat Defendants derive any eco nomi c benefit from the WebsiteTerms - il docs not allow them to control production, innovation, or qU

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IV. Cou.-t'sRcview of Discussion li t O.-al ArgulIlen'Prior to oral argument. the Court posed quesiions in a letter to counsel, including whether

the parties wou ld agree to expedi te the hearing on the declaratory judgment aspect orthe caseand stay the antitrust claims. PlaintifT's counsel indicated that Plaintirrwas interested in such aproposal. Defendants would prefe r a decision on the grounds stated in its Motion to Dismissbefore entertaining stich an agreemenl.

After discussing whether Plaintiff sufficiently pleaded its claims, it became obvious to theCourt Ihat PlaintilT would welcome the chance to amend the complaint, if only to provide morefactual allegations. as now required by Twombly and Iqbal. The Court indicated it would grantthat reiief.

The argument contained many good points about the value of standard-setti ngorganizations having an open mind to suggestions and ideas put forward by segments of theindustry the organization serves. Defendants assert vigorously that it must have the ability tolearn from submissions, such as those made by PlaintilT, and to consider and possibly use them inevolving fonnulations of industry stillldards. The Court believes that this is sou nd public policyand that the antitrust laws were not designed to interfere wilh sllch a process.

It also become clear that PlaintilT. as of yet. has notlried to gain commercial value fromits patent, but understandably reserved the ri ght to do so ill the future.

At the argument, defense counsel unconditionally renounced anyownership interest by

Defendants in Plaintifrs Invention. After the argument, the Court indicated it would grant leaveto Plaintiff to amend its Complaint. The Court also noted that the positions of the parties shouldbe amenab le to a sett lement of this dispute, and that a prolonged litigation over such issues as

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standing, rclevant markets, and anti.colllpetitive intent do not seem to be necessary forDefendants to continue their work, and for Plaintirrto. if it so desires, usc its patent in acommercial selling. The Court encouraged the parties to work towards a written agreement and.if requested. the undersigned will be available after September 18th to meet with counsel.assuming they have made some progress towards agreement on a written statement and both arcdesirous of completing the agreement as a means of settling this case.

ro r the above reasons, Plaint iff is granted leave to file an amended complaint bySeptember 30. 20 11.V. Conclusion

For the foregoing reasons. the Court wi ll grant in part and deny in part Defendants'Motion to Dismiss. The Court ,..,jll grant SEl leave to amend its Complaint in confonnity wi ththis Memorandum by Septcmber 30, 201 1.

An appropriate Order will fbllow.O: \C1V1L 1112\11163 Silocon v. Financial Accounting\SEI - MTD Memo 8 17ll.wpd

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IN THE UN ITED STATES I)ISTRICT COURTFOR H IE I)ISTlUCT OF I)ELAWARESILICON ECONOMICS . INc..

Plaintiff.v.

FINANCIAL ACCOLINTING FOUNDATION.and FINANCIAL ACCOLINTING STANDARDS[lOARD.

Defendants.ORDER

CIVIL ACTION

NO. 11-163

AND NOW , on this day of August, 2011 , upon carefu l cons idera tion ofDefendants' Motion to Dismiss (ECF No. 18 ). the parties' briefing, and oral argument on theMo tion, it is hereby ORDERED as follows:

I. Defendants' Motion is GRANTED in part and DENIED in part in accordancewith the accompanying Memorandulll .

2. Plaintiff Si licon Economics, Inc. is granted leave to rile an amended complai nt \0cu re the deficiencies ide ntified in the accompanying Memorandum by September30,2011,

3. Defendants shall have t\-venly-one (21) days from service of an amendedcomplaint to answer, move, or otherwise plead.

4. Plaintin' shall respond to any defense motion or other pleading within twenty-one(2 1) days of service of such motion or pleading.

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5. Defendants shall reply. if at a ll. wi th in fou rteen (14) days of service.

O:\DE Cases\ ! t-163 Silicon v. Financial\SE I - MTD Ordcr.wpd