Update May 2011: The court has granted summary judgment for Harley-Davidson on the ground that it is permitted to protect its rights in its trademark by limiting the companies that may sell bags bearing the Harley mark.
In Packaging Supplies Inc. v. Harley-Davidson Inc., Northern District of Illinois Judge Robert M. Dow Jr. refused to toss out an antitrust suit against Harley Davidson alleging that Harley illegally tied the purchase of motorcycles to the purchase of shopping bags. Harley allegedly instructed its dealerships to sever their relationship with other shopping bag makers and to purchase bags only from Harley. PSI further alleged that after this notice was sent, Harley dealerships that liked its products over Harley’s refused to buy them, fearing repercussions from Harley for continuing a relationship with PSI. Harley moved to dismiss, arguing that PSI did not sufficiently show that both 1) a tying arrangement existed and 2) Harley would acquire power in the market for plastic shopping bags. The court rejected Harley’s argument, holding that “what matters for purposes of the sufficiency of PSI’s complaint is that PSI alleges that the dealers were coerced,” since tying can be shown by the fact that a buyer did not want to take both products from the same vendor. The court also held that Harley’s claim that it merely acted to protect its intellectual property rights could not be resolved on a motion to dismiss and is more properly resolved on a motion for summary judgment.