Vermont District Court Judge Christina Reiss refused to dismiss attempted monopolization claims filed by dairy farmers against the Dairy Farmers of America, Inc. and Dean Foods Co. Although questions remained about the product market and whether the statute of limitations was met, the court found the allegations sufficient to move forward. The court did dismiss conspiracy claims on the ground that the complaint failed to allege that the defendants were sufficient separate entities to form an agreement under Section 1 of the Sherman Act.
En Banc Federal Circuit Narrows Patent Misuse Defense
August 31, 2010 – 3:38 pm
In a divided opinion, the en banc Federal Circuit has overturned a panel opinion that had permitted Princo to assert a patent misuse defense to a patent infringement action filed by Philips. Princo alleged that Philips had agreed with Sony not to license the relevant patent for non-standardized uses, reducing competition in the market. In a controversial decision that may lead to Supreme Court review, the Federal Circuit held that any anticompetitive effect was fully within the scope of the patent and thus could not constitute misuse.
Class Action Alleges Price Fixing in the Sale of Optical Disc Drives
August 31, 2010 – 3:17 pm
Classes of direct and indirect purchasers have filed suit in the Northern District of California alleging that optical disc drives. The complaint alleges that the defendants agreed to charge higher prices and rig electronic auctions to ensure that the certain price floors were maintained.
DOJ Signs Off on United-Continental Merger
August 31, 2010 – 3:06 pm
The Antitrust Division agreed not to challenge the United-Continental merger when the merging airlines agreed to lease 18 pairs of takeoff and landing slots at Newark Liberty International Airport to discount carrier Southwest Airlines. Aside from the concern about barrier to entry into Newark, which were alleviated by the leasing agreement, the Antitrust Division took the position that the merger was complementary and would benefit consumers. Eight states and the District of Columbia, however, continue to have open invesitgations involving the merger. Nevertheless, the parties stated an intent to close by October 1.
EC Investigating Marine Insurance Providers
August 31, 2010 – 2:57 pm
The EC is investigating a network of ship insurers known as the International Group of Proection & Indemnity Clubs exploring concerns about claim-sharing and joint-reinsurance agreements. The EC announced that it would look into whether the organization’s agreements with member insurers restrains competition. The investigation was triggered by the expiration of an exemption applicable to insurance agreement covering a large share of the market.
Drug Wholesalers Claim Dismissed for Lack of Evidence of Market Power or Conspiracy
August 31, 2010 – 12:10 pm
Update August 2010: The Second Circuit has affirmed this decision.
In RxUSA Wholesale Inc. v. Alcon Laboratories Inc. et al., Eastern District of New York Judge Denis R. Hurley has dismissed a $2.3 billion antitrust lawsuit accusing 16 pharmaceutical manufacturers and a group of drug distributors of conspiring to keep RxUSA Wholesale Inc., a secondary distributor, out of business. The suit accused the manufacturers and their authorized distributors of violating the Sherman Act by refusing to deal with RxUSA, which would purchase medications from authorized distributors and resell them. In dismissing the suit, Judge Hurley found that RxUSA had failed to allege that either the manufacturing defendants or the distributor defendants had monopoly power in the relevant market or show how they had acted in concert with one another.
Racetrack Simulcast Boycott Case Survives Motion to Dismiss
August 31, 2010 – 10:53 am
Update August 2010: The court granted summary judgment for the racetrack and broadcaster defendants on the ground that they could not question the no broadcast order. The case is still proceeding against the other defendants.
District of Maryland Judge Richard Bennett denied the defendants motion to dismiss in a case filed by a racetrack and off-track betting sight alleging that the defendants conspired to convince out of state racetracks to stop the plaintiff from simulcasting their races. The defendants argued that their actions with respect to simulcasting races were exempt from antitrust scrutiny under the Interstate Horse Racing Act of 1988. The court disagreed and will allow most of the antitrust claims to move forward.
Blood Reagent Price-Fixing MDL Moves Forward
August 27, 2010 – 4:03 pm
E.D. PA Judge Jan Dubois denied defendant Immucor Inc. & Johnson & Johnson subsidiary Ortho-Clinical Diagnostics Inc. motion to dismiss on the ground that the plaintiffs had failed to sufficiently allege an agreement. The judge cited the close timing of the defenants’ price increases for blood reagent; their cancellations of contracts with group purchasers; and their improving profit margins were sufficient to enable a reasonable fact finder to infer a conspiracy.
The court also denied a request to stay discover pending the outcome of a government criminal investigation. It did, however, dismiss Johnson & Johnson Health Care Systems because the amended complaint contained no specific allegations against it.
NCAA Standard for Lacrosse Stickhead Design Not Anticompetitive
August 27, 2010 – 3:54 pm
The Sixth Circuit has upheld the dismissal on the pleadings of lacrosse stick manufacturer Warrior Sports’s complaint alleging that the NCAA violated Section 1 of the Sherman Act by agreeing with Warrior’s competitors to adopt a new rule that prohibited the use of all of the stick models currently sold by Warrior. After meeting with Warrior, the NCAA had adopted a rule that would have required a stickhead design urged upon it by Warrior. After learning that Warrior had a patent on this design, the NCAA contacted Warrior and asked about its licensing policies for the patent. When Warrior refused to agree to license the patent, the NCAA adopted a new rule that permitted stick heads that conformed to Warrior’s as well as designs that did not. The court held that by alleging that the rule would permit competition from numerous manufacturers, Warrior confirmed that the rule was not anticompetitive.
New Merger Guidelines Released
August 19, 2010 – 3:30 pm
The United States Department of Justice, Antitrust Division, and the Federal Trade Commission have released new merger guidelines explaining how the enforcement agencies review horizontal mergers. The merger guidelines have existed in various forms since 1968. The last major revision was in the mid-1990s. The agencies announced last fall that they were planning to revise the guidelines. A series of workshops followed at which input was sought from the bar and the public. Draft guidelines were released for comment last spring. These guidelines constitute a substantial departure from previous guidelines, particularly with respect to the reduced role of market definition. The guidelines can be accessed on the Antitrust Division’s website and by clicking here.