In Willow Creek Fuels Inc. v. Farm & Home Oil Co. et al., Eastern District of Pennsylvania Judge C. Darnell Jones II has dismissed antitrust claims brought by bankrupt Willow Creek Fuels Inc. in a $25 million lawsuit accusing a former supplier Farm & Home Oil Co., of breaking distribution contracts, merging with a Willow Creek rival, Buckeye Energy Holdings LLC, then targeting Willow Creek’s customers. In his ruling Judge Jones noted that while the plaintiff alleged an antitrust injury under the Sherman Act, the plaintiff failed to state a claim on which relief could be granted because “although Willow Creek refers to the defendants collectively in the amended complaint and alleges that all defendants terminated the [contracts], that clearly was not the case,” contracts were terminated prior to the purchase agreement between the defendants. Judge Jones also held that Willow Creek did not allege facts to support any relationship or communications between Farm & Home and any other defendant and tossed out a Clayton Act claim and another Sherman Act claim brought by Willow Creek for failure to establish a relevant market.
Failure to Disclose Patent to Standard Setting Organization Can Be Monopolization
October 15, 2009 – 11:44 am
In Actividentity Corp. v. Intercede Group PLC et al., Northern District of California Judge Vaugh R. Walker has refused to dismiss smart card maker Intercede Ltd.’s allegations that rival Actividentity Corp. monopolized the relevant market by failing to disclose to a standards-setting organization a patent covering technology for remotely updating the devices. The court held that Intercede sufficiently pled its antitrust claims, by alleging that 1) Actividentity created a monopoly by failing to disclose a patent to GlobalPlatform Inc., which created a “patent holdup,” whereby GlobalPlatform unknowingly set standards that incorporated Actividentity’s patented technology; and 2) such control of a patent has the ability to achieve monopoly power and either exclude competition or extract unwarranted monopoly profits from all competitors in the industry in violation of Section 2 of the Sherman Act.
FTC Probes Google/Apple Interlocking Directors
October 9, 2009 – 11:48 am
Update October 2009: Arthur Levison, an Apple director since 2000, has resigned his position on the Google board.
Update July 2009: Eric Schmidt resigned his seat on the Apple board citing increased competition between Apple and Google. The FTC applauded the decision but vowed to continue the investigation.
The FTC has launched a probe into whether Google CEO Eric Schmidt and former Genetech CEO Arthur Levinson presence as directors of both Apple and Google violates Section 8 of the Clayton Antitrust Act, which prohibits “interlocking directorates” of companies if the common link decreases competition between them. The link, however, is not considered illegal if the revenue from products in which the companies compete is less than two percent of either company’s sales.
EC Imposes One Billion Euro Fine on Intel
October 6, 2009 – 1:50 pm
Update Oct. 2009: Intel has appealed the EC’s fine to the European Court of First Instance.
Update Sept. 2009: The European Commission has published a non-confidential version of its May 13, 2009 Intel Decision that found that Intel violated Article 82 by excluding competitors from the market for computer chips.
Update July 2009: Intel has appealed this fine to the European Court of First Instance.
The European Commission has fined Intel Corporation €1.06bn for abusing its a dominant position by excluding competitors from the market for computer chips called x86 central processing units (CPUs). The Commission has also ordered Intel to stop engaging in these illegal practices.
FTC/DOJ to Revise Merger Guidelines
October 6, 2009 – 1:20 pm
For the first time since 1992, the U.S. Department of Justice, Antitrust Division, and the Federal Trade Commission plan to revise the merger guidelines that explain the federal government’s enforcement policy with respect to mergers between horizontal competitors. Originally drafted in 1968, the guidelines underwent major revisions in the 1980s and again in the early 1990s. Because of the dearth of Supreme Court merger cases since the 1970s, the guidelines have come to be the definitive word on merger enforcement, and have been cited by courts as if they were a source of law rather than just enforcement policy.
MP3 Maker Claim Against Apple Dismissed
October 6, 2009 – 12:56 pm
In Luxpro Corp. v. Apple Inc., Western District of Arkansas Judge Harry F. Barnes handed down an order dismissing Taiwanese MP3 player maker Luxpro Corp.’s claims against Apple Inc., for attempted common law monopolization and for interfering with Luxpro’s business partners by sending letters demanding that they cease all business relations with Luxpro and filing groundless litigation. The court held that 1) Apple’s litigation in Germany and Taiwan was protected under Noerr-Pennington immunity – which exempts a party’s efforts to procure government action from antitrust scrutiny; (the claim was also barred by the applicable statute of limitations); and 2) attempted common law monopolization was not a cause of action under either Arkansas or California law.
Hospitals May Maintain Exclusive Practice & Exclude Outside Doctors
October 6, 2009 – 12:53 pm
In Four Corners Nephrology Associates PC et al. v. Mercy Medical Center, Tenth Circuit Court of Appeals has affirmed a lower court’s decision, ruling that Colorado’s Mercy Medical Center did not break federal or state antitrust laws when it gave a single provider exclusive rights to in-house nephrology services, because the hospital had no antitrust duty to share its facilities with outside doctors at the expense of its own nephrology practice. The court further held that plaintiff’s claims were misplaced because he was seeking to join, rather than undo, the hospital’s putative monopoly – an action that runs counter to very purpose of antitrust laws seeking to advance competition rather than advantage competitors.
Dole Not a Pineapple Monopoly
October 6, 2009 – 12:49 pm
In In Re: Pineapple Antitrust Litigation, Southern District of New York Judge Richard M. Berman handed Del Monte Fresh Produce Co. an emphatic victory against retailers and consumers that had accused the company of exploiting monopoly power in the market for extra sweet pineapple by using sham patent litigation since 1996 to gain a stranglehold and raise prices. The court held that 1) Fresh Del Monte Gold, or MD-2 pineapples did not constitute appropriately a separate sub-market, and plaintiffs did not argue that defendants had monopoly power in the broader pineapple market; and 2) plaintiffs failed to substantiate claims that Del Monte threatened to sue competitors like Dole and Maui for infringing a patent for MD-2 pineapple while knowing the fruit was not patented or that the threats prevented other companies from entering the market.
Chicago Nurses Can’t Show Classwide Injury
October 1, 2009 – 2:21 pm
In Reed v. Advocate Health Care et al., Northern District of Illinois Judge John F. Grady, has denied class certification to a group of nurses who had sued four separate hospital systems in the greater Chicago area alleging that the institutions colluded to suppress their wages. In their suit, the nurses claimed that five Chicago-area hospitals regularly exchanged detailed and nonpublic information through methods, such as obtaining and participating in compensation surveys disseminated by the Metropolitan Chicago Healthcare Council, concerning pay for registered nurses. According to the suit the survey was a violation of federal guidelines for the lawful sharing of compensation data in the health care industry issued by the U.S. Department of Justice and the Federal Trade Commission. In denying class certification, the court cited In re Hydrogen Peroxide Antitrust Litigation in holding that testimony from an expert witness employed by the nurses to prove their case, University of California at Berkeley economist Dr. Gordon Rausser, was unreliable to the point of being inadmissible. The court was thus persuaded that plaintiffs could not meed their burden of demonstrating that they have a viable method of showing classwide injury with common proof.
Court Permits Antitrust Attack on County Imposition of Exclusive Ambulance Territories
October 1, 2009 – 2:18 pm
In Patriot Ambulance Service Inc. et al. v. Genesee, County of et al., and Swartz Ambulance Service Inc. v. Genesee County of et al., Eastern District of Michigan Judge Marianne O. Battani dismissed several defendants and the monetary damages claims, but permitted federal antitrust claims to proceed. Two ambulance service companies’ are challenging a Michigan county’s ordinance dividing the region into two zones with exclusive emergency transport providers. Although the court noted that the Local Government Antitrust Act prevents the plaintiffs from recovering money damages under federal antitrust law, it ruled that the plaintiffs could still seek a declaratory judgment under the Sherman Act. However, the judge dismissed the complaints’ state antitrust claims, ruling that the Michigan Antitrust Reform Act allows local governments to act in areas they are authorized to regulate, including ambulance operations.