In Church & Dwight Co. Inc. v. Mayer Laboratories Inc., Northern District of California Judge Edward M. Chen granted Trojan condommakerChurch & Dwight Co. Inc.’s motion for summary judgment, tossing antitrust claims made against it by rival Mayer Laboratories Inc. Mayer claimed that C&D abused its dominant market position to squeeze out other competitors through its rebate program, where it offered retailers a discount on wholesale prices, if they agreed to shelve its condoms in more visible areas. In granting C&D’s motion for summary judgment, the court held that Mayer has been unable to proffer any evidence of retailers switching or removing rival condom brands from their shelves as a result of any coercive effect of C&D’s rebate program, or that C&D misused its dominant position to the detriment of its rivals. In fact, the evidence showed that the program has little, if any, effect on retailers’ shelf-space allocations. And because C&D’s two other main competitors were not affected by the program, Mayer was unable to show any basis for attributing its own misfortune to C&D, rather than other forces.
Wellbutrin Class Certification Ruling Upheld
April 29, 2012 – 9:02 pm
In Wellbutrin XL Antitrust Litigation, Eastern District of Pennsylvania Judge Mary A. McLaughlin denied a motion for reconsideration, filed by defendants GlaxoSmithKline PLC and Valeant Pharmaceuticals International, challenging the court’s earlier class certification ruling. In their suit, a class of indirect purchasers of depression medication Wellbutrin XL, and its generic equivalent, accused GlaxoSmithKline and Valeant of filing meritless litigation, and a baseless citizen petition with the FDA, to delay the entry of generic competitors for Wellbutrin XL into the American market.
In August, Judge McLaughlin certified the eligible class of indirect purchasers as all persons or entities in California, Florida, Nevada, Tennessee, New York, and Wisconsin, who bought an AB-rated generic equivalent of Wellbutrin XL at any time between Nov. 14, 2005, and April 29, 2011, along with everyone in the six states that purchased 150-milligram or 300-mg Wellbutrin XL before an AB-rated generic equivalent was available, and purchased generic XL in the same state after generic XL became available. This certification follows an earlier certification of a nationwide group of direct purchasers of the antidepressants.
In its ruling on defendants’ motion for reconsideration, the court held that although defendants made excellent points in their argument, the motion fell short of convincing the court to reverse its previous class certification ruling.
Jury Finds No Evidence of Antitrust Violations in Emergency Spine Surgery Suit
April 23, 2012 – 1:46 pm
In Alan Moelleken v. Cottage Hospital et al., a California Superior Court jury returned a verdict for the defendants in a suit, filed by orthopedic surgeon Alan Moelleken against Santa Barbara’s Cottage Health System and four doctors, alleging unfair business practices and violations of California’s Cartwright Act. In his suit, plaintiff claimed that in order to increase their business, four neurosurgeons teamed up with Cottage Hospital to exclude orthopedic surgeons, such as himself, from performing emergency spine surgeries. This move led to a monopoly that degraded the quality of patient care. After a seven-week trial, the jury of 11 women and one man did not find enough evidence to support plaintiff’s claim, and returned a verdict for the defendants.
Court Tosses Body Armor Antitrust Case, Finding Lack of Power to Monopolize the Thriving Market
April 23, 2012 – 1:16 pm
In Kolon Industries v. E.I. du Pont de Nemours, Eastern District of Virginia Judge Robert E. Payne threw out an antitrust suit brought by Kolon Industries Inc., accusing E.I. Du Pont De Nemours and Co. of monopolizing the market for synthetic body armor fiber. The court granted Du Pont’s motion for summary judgment, holding that Du Pont did not monopolize the market because it “clearly lacks the power to control prices and exclude competition” in the thriving para-aramid fiber industry. The court also held that Du Pont’s supply agreements with some of its customers did not foreclose the market to Kolon, because the non-exclusive and short-term nature of the agreements allowed for DuPont’s competitors to conduct business with all such customers.
This ruling is the latest development in the legal battle between Kolon and DuPont that began in 2009. DuPont has already been awarded $920 million in damages in a trade secrets suit. Du Pont has more pending motions, including a motion for injunctive relief, requesting Kolon to stop making products using allegedly stolen technology.
Court Grants FTC’s Preliminary Injunction Request, Temporarily Blocking Hospital Merger
April 22, 2012 – 2:59 pm
In Federal Trade Commission v. OSF Healthcare Systems et al., Northern District of Illinois Judge Frederick J. Kapala, granted the Federal Trade Commission’s move for a preliminary injunction, temporarily blocking a proposed merger of two Illinois hospitals. The FTC filed suit to challenge a proposed merger between OSF Healthcare System and Rockford Health System, claiming that the deal violates Section 7 of the Clayton Act because it would result in the merged entity controlling a substantial share of the general acute care inpatient services market in the Rockford, Illinois area. The hospitals challenged the FTC’s claims, arguing that the existence of another rival in the area would negate the anti-competitive effects by acting as a formidable competitor in the market. In granting the preliminary injunction, the court held that the existence of one strong competitor following a merger does not necessarily reduce the probability that the proposed merger would substantially lessen competition in the future. The court also held that the merger would give the combined entity significant bargaining leverage, which would in turn allow it to extract higher prices from insurance companies.
EU Investigates Motorola’s Smartphone Patent Conduct for Antitrust Violations
April 20, 2012 – 9:29 pm
The European Union’s antitrust regulator opened two formal investigations to determine whether Motorola Mobility Inc. violated its FRAND commitment to EU’s patent standard-setting organizations by disrupting competition in the EU market with its standard-essential patents for smartphones and other devices. The EC launched these investigations in response to Apple and Microsoft accusing Motorola of unfairly seeking and enforcing injunctions against Apple’s and Microsoft’s flagship products on the basis of patents Motorola had declared essential to produce standard-compliant products.
The EC’s first investigation will examine whether Motorola’s behavior constitutes an abuse of a dominant market position in violation of Article 102 of the Treaty on the Functioning of the EU. The EC’s second investigation will evaluate whether Motorola further violated Article 102 by offering unfair licensing terms for its standard-essential patents for 2G and 3G wireless telecommunications systems, H.264 video compression, and wireless local area network technologies.
Sirius/XM Launches Antitrust Attack on Music Licensors
April 3, 2012 – 2:11 pm
Sirius/XM has filed suit in New York federal court against SoundExchange, Inc., a copyright collective that represents thousands of labels and artists. The plaintiff asks the court to dissolve SoundExchange or put in place a long-term oversight program. The suit comes amid negotiations over rates that the Copyright Royalty Board (CRB) will set for a five-year period beginning in 2013. The CRB, part of the Library of Congress, is an impartial panel of judges that sets royalty rates in various industries when negotiating parties can’t strike deals on their own.
Sirius prefers to strike its own licensing deals with music labels, and alleges that SoundExchange has organized a boycott to prevent individual deals; monopolize the licensing market; and raise licensing fees.
The plaintiff alleges numerous incidents of collusion, including mailings and media statements. In some cases, label executives reported to Sirius that they were told not to engage in direct-licensing talks. In addition, SoundExchange’s board is alleged to include representatives of the top four record companies, which control 70% of the market, as well as representatives of independent record companies.
Court Grants TRO Blocking Reebok’s Sale of Tebow NYJ Jerseys
April 3, 2012 – 11:46 am
New York federal court judge, Kevin Castel, granted a temporary restraining order barring Reebok, a unit of Adidas AG, from selling Tim Tebow New York Jets jerseys. “The public demand for such Tebow-Jets products spans the entire U.S.,” plaintiff Nike alleged, has led Reebok “to illegitimately seize on this unique and short-lived consumer opportunity.” Nike alleges that only it has agreements with Tebow individually and the licensing arm of the NFL Players Association, allowing the manufacture of jersey’s bearing the quarterback’s name. Reebok’s license with the players association, Nike claims, expired on March 1 — almost three weeks before Tebow was traded, and thus Reebok’s rights should be limited to Tebow apparel bearing his former team’s, the Denver Broncos’, logo.
A hearing is set for April 4.
EU Court Upholds Telefonica Fine
April 3, 2012 – 11:33 am
The EU’s second-highest court agreed with the European Commission’s 2007 findings that Telefonica charged its competition excessive prices to access its broadband network. The price squeeze forced rivals to charge inflated retail prices or loss money.
The General Court rejected Telefonica’s position that commission erred. “In the absence of distortions resulting from the margin squeeze,” the court explained, “the competition would have probably been stronger in the retail market, which would have benefited the consumers in terms of price, choice and innovation.”
The court also denied the Spanish government’s appeal, claiming that the Commission exceeded its authority. Complaince with Spanish law, the court explained, could not immunize Telefonica from European law.
Airport Services Anttirust Case Rejected
April 3, 2012 – 11:27 am
Judge Richard P. Matsch granted summary judgment to Montrose County rejecting JetAway’s allegation that the county acted anticompetitively in awarding rival Jet Center Partners LLC a contract to operate the county’s small airport. The plaintiff alleged the count engaged in bid rigging by awarding the contract before issuing the RFP. But the court held that sort of conduct does not violate the Sherman Act. “The plaintiff admits,” the court explained “that the size of the business opportunity at the airport limits that market to a single … operator.” The antitrust laws do not restraint one monopolist “from the aggressive efforts” to replace another.
Judge Matsch also wrote that the Sherman Act distinguished “between the purpose of the antitrust laws to protect competition in the business world and the political decisions of governmental officials, even when those decisions have been infected by selfishly motivated agreement with private interests.”