In Allergan Inc. v. Photomedex Inc. et al., Central District of California Judge James V. Selna partly dismissed Athena Cosmetics Inc.’s allegations accusing rival Allergan Inc. of monopolizing the relevant market in ongoing litigation that arose from a patent related to eyelash enhancement products. The judge tossed Athena’s counterclaims of unfair competition and monopolization as they related to the nonprescription market for eyelash enhancement products because Allergan has no market share in that area market and “the weight of authority holds that a company that does not, and here by definition, cannot, compete in relevant market cannot possess ‘monopoly power,’ or the ‘dangerous probability’ of achieving monopoly power in that market.” Judge Selna, however upheld some of Athena’s allegations, finding that Athena’s counterclaims sufficiently alleged substantial barriers, such as 1) large sunk costs; 2) the “lock in” effect; 3) high setup and switching costs; and 4) the difficulties and high costs associated with procuring the constituent chemical compounds. The presence of these barriers is a factor in monopoly power, therefore, there is a nexus between price and anti-competitive conduct.
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