Motorola Mobility, which is currently pursuing a US price-fixing lawsuit against overseas suppliers, found itself on the back foot after a three-judge panel of the 7th US Circuit Court of Appeals raised doubts on whether the claims in the lawsuit had enough connection to the United States to be heard in US courts.

The company, which is now owned by China's Lenovo, sued multiple Asian firms including AU Optronics, LG Display, Samsung Electronics, Samsung SDI, Sharp, and Toshiba in a Chicago federal court in 2009, saying they colluded to fix prices on LCD panels. The company claims this resulted in some of its overseas subsidiaries overpaying for the component for almost a decade, paying the LCD makers more than $5 billion from 1996 to 2006.

During the hearing, Judge Richard A. Posner raised questions on the consistency of Motorola's legal positions, asking whether it intends to seek the benefits of US antitrust protection while shifting its tax burden to countries with lower taxes. "For tax purposes, you treat the foreign subsidiaries as separate, but for antitrust purposes, you treat them as part of Motorola", he said.

Motorola Mobility lawyer Thomas Goldstein, however, argued that since a former Chicago-based parent negotiated the company's supply contracts, it should be allowed to sue under US law.

Back in March, the appeals court, led by Posner, ruled against Motorola Mobility, but the company won a second chance after its appeal for rehearing was supported by the US government, which said the ruling threatened its ability to prosecute global price-fixing.

Image credit: Android Central