The Public Patent Foundation has filed suit in federal court in the Southern District of New York seeking to invalidate, on antitrust and other grounds, more than twenty Monsanto Company patents involving genetically- modified seed. The suit was filed on behalf of numerous organic farmers, seed businesses, and agricultural groups that do not want to use genetically modified, or transgenic, seed. In addition to contending that Monsanto’s patents are invalid, the complaint asserts that Monsanto’s patents are unenforceable because the company misused them to achieve an anti-competitive benefit. Through its patents and acquisitions, the complaint alleges Monsanto has achieved control of the seed market “so high that over 85 to 90 percent of all soybeans, corn, cotton, sugar beets and canola grown in the U.S. contains Monsanto’s patented genes.” The suit also seeks to protect the plaintiffs against potential lawsuits by Monsanto when their property is inadvertently contaminated by Monsanto’s transgenic seed.
Organic Farmers Seek to Invalidate Monsanto’s Genetically-Modified Seed Patents
July 7, 2011 – 5:23 pm
Antitrust Counterclaim Vs. Nation’s Largest Milk Seller Survives
July 1, 2011 – 1:19 pm
Southern District of Florida Judge Marcia G. Cooke denied a motion to dismiss a counterclaim by milk distributor McCowtree Brothers Dairy Inc. that exclusive supply agreements between milk processor Dean Foods and milk producers violate the Clayton Act. The agreements are alleged to have resulted in Dean’s monopoly of the south Florida milk market, higher milk prices, and fewer choices for consumers. These allegations were filed by McCowtree as counterclaims against Dean Foods in a breach of contract suit by a Dean subsidiary against McCowtree.
McCowtree alleges that the exclusive supply agreements with Dairy Farmers of America, the largest milk cooperative in the U.S., and its subsidiary, Natonal Dairy Holdings, violate the U.S. Department of Justice’s instructions that conditioned Dean Foods’ 2001 merger with Suiza Foods Corp., which combined the two largest processed milk bottlers in the U.S. DOJ required Suiza and Dean to divest 11 milk bottling plants to National Dairy Holdings, and required Suiza Foods to modify its full supply agreement with Dairy Farmers of America to make sure the plants would compete to buy their raw milk. The court found that “McCowtree’s claims contain a sufficiently developed description of McArthur’s and Dean Food’s intent to monopolize through the sales and acquisition of milk processing plants and a dangerous probability of achieving monopoly power.” Judge Cooke dismissed McCowtree’s claim of conspiracy to monopolize.
Sixth Circuit Reinstates Claims for Continuing Conspiracy in Restraint of Carpet Trade
July 1, 2011 – 1:16 pm
The Sixth Circuit revived an antitrust suit brought by Tennessee carpet dealer Watson Carpet & Floor Covering Inc. alleging rival dealer Carpet Den Inc. and supplier Mohawk Industries Inc. have conspired for more than a decade to force Watson out of business.
The appeals court reversed the lower court’s ruling that Watson Carpet had failed to state a claim under the standard described by the Supreme Court in Bell Atlantic Corp. v. Twombly, finding instead that Watson Carpet had adequately pled its case by specifically alleging both an agreement to restrain trade and later acts that furthered the conspiracy.
The Sixth Circuit also found that Watson Carpet’s complaint sufficiently alleged a connection between an original conspiracy to force Watson out of business and later refusals by Mohawk to sell carpet to Watson. The appeals court held that a previous settlement Watson had reached with Carpet Den in a state court refusal-to-sell case did not bar its assertion of claims against Carpet Den based on Mohawk’s later refusal to sell. The court stated that the dealer could remain liable as co-conspirator with Mohawk because it “did not withdraw from the conspiracy . . . and conspiracies are presumptively ongoing.”
ECJ Upholds International Removals Cartel Ruling
July 1, 2011 – 11:47 am
The Court of Justice of the European Union has upheld the EC decision that competitors cartelized the Belgium international removals market. The Court, however, reduced the fine imposed on Gosselin and annuled the fine of imposed on Verhuizingen Coppens.
EC Investigates Automotive Safety Systems Companies
July 1, 2011 – 11:43 am
Suspecting anticompetitive practices, the European Commission inspected the offices of companies that supply automotive occupant safety systems, including car seatbelts, airbags and steering wheels.
Lawful Conduct Cannot Be Used to Prove Anticompetitive Intent
June 30, 2011 – 4:57 pm
Central District of California Judge Cormac J. Carney has held that an antitrust plaintiff in a Section 2 case may not use evidence of lawful conduct to bolster claims that other allegedly predatory conduct constituted unlawful monopolization. Judge Carney certified the ruling for interlocutory appeal. The plaintiff, Arminak, a household products packaging company alleged that Calmar entered unlawful exclusive contracts with purchasers that restrained competition in the market for trigger sprayers that dispense liquid household products. The challenged agreements required the purchaser of a full line of Calmar products exclusively for periods at least three years. They also contained a right of first refusal, further hindering Calmar’s competitors in their ability to compete. Arminak further alleged that Calmar engaged in legal conduct that nonetheless helped provide anti-competitive intent. This conduct included (1) initiating low-cost pricing, (2) creating a “value group” division that produced a new trigger sprayer product intended to compete with Arminak offerings, (3)launching patent litigation against Arminak, (4) buying IP rights including trigger sprayer molds and production lines, and (5) entering deals designed to block Arminak from luring away its customers.
Judge Carney held that Arminak could not embue “sinister motives” to this lawful conduct. “It would be repugnant to the antitrust laws,” the judge explained, “to let Arminak present evidence of these five lawful categories of conduct to the jury to prove Calmar’s allegedly anti-competitive intent to acquire or maintain a monopoly. All of Calmar’s conduct was beneficial to competition. The antitrust laws were enacted to promote and protect Calmar’s conduct. Their purpose is certainly not to penalize it.” Arminak has stated its inten
DC Circuit Upholds FCC Rule on Channel Access
June 30, 2011 – 4:43 pm
The DC Circuit rejected cable company arguments that the FCC had exceeded its statutory authority in closing the so-called terrestrial loophole that allowed cable providers to retain exclusive access to non-satellite channels, which often include local sports programing. AT&T intervening on the FCC’s behalf argued that foreclosing competitive TV providers from access to local sports restrained competition. The DC Circuit agreed that the FCC had authority to apply access rules to terrestrial channels, but it disagreed with the FCC that exlusive deals were per se anticompetitive. The deals must be examined in the context of a particular market and are more likely to be pr
Supreme Court Upholds Cost Based Access to Incumbant Phone Network
June 30, 2011 – 4:35 pm
The U.S. Supreme Court upheld the FCC interpretation of the 1996 Telecommunications Act requiring that incumbent local telephone networks provide access to competitors at cost. AT&T had argued that cost-based access was no longer required and the Sixth Circuit agreed. The high court, however, sided with the Federal Communications Commission, which argued that cost based access remained essential to competition in local phone markets.
DOJ Proseuction of Blue Cross of Michigan to Move Forward
June 30, 2011 – 1:41 pm
Update June 2011: Eastern District of Michigan Judge Denise Page Hood has denied a motion to dismiss the U.S. Department of Justice’s lawsuit against Blue Cross Blue Shield of Michigan. The antitrust suit alleges that the most-favored-nation clauses in the health insurance company’s contracts with hospitals have effectively immunized Blue Cross Blue Shield of Michigan from competition by guaranteeing that no other health insurer can secure a better rate from a particular hospital. In addition to the DOJ’s suit, the health insurer is facing a proposed antitrust class action over the contracts, in a case that also names 21 Michigan hospitals as having conspired with the insurer to drive up prices. BCBSM and the hospitals have also filed motions to dismiss that suit. The court has not yet ruled on those motions.
Original Post: The Antitrust Division, joined by the Michigan attorney general, has sued Blue Cross of Michigan in the Eastern District of Michigan alleging that the most-favored-nations provisions in its contracts with hospitals anticompetitively increase health care costs. Blue Cross is by far the largest provider of health insurance in Michigan, requiring hospitals to reach an agreement with it. Blue Cross has insisted, upon threats of dramatically lower reimbursement rates, that the hospital must agree not to accept lower rates from any other insurance provider. The provision has required competitive providers to increase their rates by up to 40%. Blue Cross counters that the MFNs provisions work to reduce health care costs.