In a predatory pricing case between rival newspapers, a California state appellate court affirmed most of the verdict favoring the plaintiff. It rejected the defendant’s argument that the plaintiff had failed to show that the defendant could recoup its losses. The court held that although federal antitrust law requires a recoupment standard, California state law does not. Rather, it focuses on the intent of the defendant, distinguishing between price cuts undertaken for legitimate business reasons and those that are predatory.
California Appeals Court Distinguishes Federal Law in Upholding Predatory Pricing Verdict
August 19, 2010 – 12:54 pm
DOJ Attack on Milk Processing Plant Merger to Move Forward
August 18, 2010 – 1:18 pm
E.D. Wisconsin Judge J.P. Stadtmueller held that the Department of Justice’s complaint seeking to undo a consumated merger between milk processing plants adequately stated a claim despite less than precise allegations of the relevant geographic market. The court nevertheless expressed disappointment with the lack of specificity in the complaint.
Fraud on Patent Office Claim to Move Forward
August 18, 2010 – 1:06 pm
District of Delaware Judge Joel Pisano refused to dismiss antitrust counterclaims filed by Daewoo in a patent infringement action filed by LG. LG alleged that Daewoo and other washer manufacturers were infringing four LG owned patents. Daewoo counterclaimed, arguing that the patents are invalid and their enforcement constitutes an antitrust violation because the patents were obtained through fraud on the patent office. Specifically, Daewoo alleges that LG failed to disclossed prior art that surfaced in patent prosecution in Japan. The court held that Daewoo’s allegations were specific enough to survive a motion to dismiss.
Patent Challenge Dismissed Because Brand Market Too Narrow
August 18, 2010 – 12:58 pm
S.D. NY Judge Paul Gardephe has dismissed antitrust claims alleging that Bayer had used patents on the drugs Yasmin and Yaz anticompetitively. The court dismissed on the ground that the plaintiff’s alleged relevant markets based on the active ingredients in the drugs were irrationally narrow.
Processed Milk Conspiracy Case to Move Forward
August 17, 2010 – 3:21 pm
E.D. Tennessee Judge Ronnie Greer granted summary judgment in favor of the defendants, Dairy Marketing Services and Southern Marketing Agency on monopolization and raw milk conspiracy counts, but denied summary judgment with respect to processed milk conspiracy claims. The case filed by Food Lion and Fidel Breto, dba Family Foods, will now proceed on the remaining claims.
Intel & FTC Settle Case
August 17, 2010 – 3:10 pm
Following up on a high profile EU action, in December 2009, the Federal Trade Commission sued Intel alleging violations of Section 5 of the FTC Act. The Commission and Intel agreed to settle the action in an agreement that will prevent Intel from restricting competition or limiting competitors sales of CPUs and GPUs by compeling computer makers to use Intel chips exclusively through threats, bundled prices, or other special offers. Intel is also prohibited from deceiving computer manufacturers about the performance of its rival’s products, and it must alter its IP agreements with AMD, Via Technologies, and Nvidia to allow those companies to consider mergers without fear of infringing Intel’s patents. FTC Chairman Jon Leibowitz stated that the settlement goes beyond previous actions by covering GPUs as well as CPUs and provides immediate consumer benefits. An Intel spokesman emphasized that the company did not admit wrong-doing and that the settlement would allow it to continue to innovate and price its products competitively.
Medical Imaging Conspiracy Case to Move Forward
August 17, 2010 – 11:06 am
Eastern District of NY Judge Leonard Wexler has denied a motion to dismiss filed by defendant CoareCore in a suit alleging that the company entered exclusive agreements with most large health insurance plans in the region, effectively excluding the plaintiff from a large portion of the market. The defendant argued that the case was time barred and, in any event, the agreements were not anticompetitive. According to the defendant, the court believed that discovery was necessary to properly consider the claims.
Magazine Distribution Boycott Case Dismissed
August 17, 2010 – 10:42 am
Southern District of NY Judge Paul Crotty dismissed a suit filed by bankrupt magazine wholesaler Anderson News against magazine publishers, including Time, Rodale, and American Media. The case arose out of a decision by Anderson to impose a 7% surcharge on magazines to discourage suppliers from shipping excess copies. Rather than accept the surcharge, a number of publishers pulled their business from Anderson, driving it out of business. Anderson alleged a concerted refusal to deal. The court dismissed the claim for failing to sufficiently allege a conspiracy. Eliminating a wholesaler, and thus reducing competition to sell the defendants’ magazines, ran counter to the defendants economic interests and thus inferring a conspiracy from the available evidence was deemed implausible.
EC Raids Polyurethane Foam Manufacturers
August 17, 2010 – 10:33 am
In late July, the EC conducted unannounced inspections of several polyurethane foam manufacturers, marking the first step toward investigating anticompetitive conduct in the industry.
California Rejects Pass-on Defense
August 17, 2010 – 10:04 am
The California Supreme Court has followed federal law in rejecting the pass-on defense, i.e. the argument that a defendant is not liable to a direct purchasing plaintiff for anticompetitive overcharges because the plaintiff passed on the overcharge to indirect purchasers. The court recognized two exceptions: (1) for cost-plus contracts that essentially require the direct purchaser to pass on all costs to indirect purchasers; and (2) as needed to guard against double recovery.
Although federal law has long rejected the pass-on defense, federal law also prohibits indirect purchasers from recovering damages. California, like a number of states, permits indirect purchasers to sue for damages. This decision could therefore lead to complicated litigation.