December 7, 2012 – 5:37 pm
In TruePosition Inc. v. LM Ericsson Telephone Co. et al., Eastern District of Pennsylvania Judge Robert F. Kelly refused to dismiss TruePosition Inc.’s antitrust suit against Qualcomm Inc., LM Ericsson Telephone Co., and Alcatel-Lucent SA. TruePosition accused the defendants of conspiring to use their influence within two standard setting organizations (SSOs), the European Telecommunication Standards Institute and Third Generation Partnership Project (3GPP), to prevent the adoption of TruePosition’s technology into the standards set for 4G wireless networks.
3GPP moved to dismiss, arguing that at most, 3GPP may be guilty of inaction, since TruePosition failed to show that the SSO conspired with Qualcomm, Ericsson, and Alcatel. TruePosition countered that 3GPP was liable not because of its inaction, but because Qualcomm, Ericsson, and Alcatel executives acted as organization representatives. The court agreed with TruePosition, holding that the majority of the allegations specifically involve the actions of the corporate defendants as chairmen of 3GPP’s committees thwarting and using its standardization process to disadvantage a competitor. And because of their apparent authority as chairmen of pertinent 3GPP subcommittees, the corporate defendants were supposedly able to abuse 3GPP’s standardization process. The court further held that the 3GPP cannot consider itself as separate and distinct from the actions of the corporate defendants when they were acting with 3GPP’s apparent authority. According to the decision, an SSO “cannot avoid liability by ensuring that it remains ignorant of its agents’ conduct and the antitrust laws because it would encourage an SSO to do as little as possible to oversee its agents, resulting in an increasing likelihood that a SSO’s reputation would be used for anticompetitive ends.”
December 7, 2012 – 5:36 pm
In The Vaccine Center LLC v. GlaxoSmithKline LLC et al., a Nevada clinic has sued in the District of Nevada alleging that GlaxoSmithKline LLC, nonprofit Apexus Inc., and a public health agency conspired to violate the antitrust laws by abusing a federal drug-discount program. The plaintiffs claim that the Southern Nevada Health District abuses its nonprofit status to obtain reduced-cost drugs that it resells to the general population instead of the intended beneficiaries, low income patients. As a result, the plaintiffs allege, private sector competition has been restrained because private providers need to pay substantially more for the needed drugs. In addition, the poor remain under-served because the discounted drugs are not going to them.
November 30, 2012 – 1:42 pm
In In re: TFT-LCD Flat Panel Antitrust Litigation, Northern District of California Judge Susan Illston denied two motions for partial summary judgment, filed by several electronics makers in order to nix LCD multidistrict litigation price-fixing claims against them. Some of the largest electronics retailers in theU.S., such as Target Corp., Best Buy Co. Inc., and Sears Roebuck & Co., sued a slew of LCD makers, claiming they paid inflated prices for electronics that incorporated LCD panels that were allegedly price-fixed.
Defendants moved for partial summary judgment, arguing that pursuant to the Ninth Circuit ruling in Royal Printing v. Kimberly-Clark Corp., plaintiffs lacked standing to pursue their claims under the Sherman and Clayton Acts because they purchased finished products and not LCD panels directly. The court denied defendants’ motion, holding that in July, the Ninth Circuit clarified an exception to the Royal Printing v. Kimberly-Clark Corp. ruling when it decided In re: ATM Fee Antitrust Litigation. The ATM Fee ruling contains language allowing indirect purchasers antitrust standing when they can show “parental control” between direct purchasers and the alleged conspirators. According to Judge Illston, ATM Fee didn’t “purport to change the Royal Printing standard, but rather applied it to the complicated facts of that case,” which refutes defendants’ argument that the ownership exception can only apply “downstream.” The court also pointed out that “the ATM Fee discussion recognized that the touchstone question is ownership or control, and clarified that the ‘realistic possibility of suit’ inquiry outlined in Royal Printing is not a separate exception — it is an analysis to be done in connection with the ownership/control exception.”
November 30, 2012 – 1:18 pm
After the Federal Trade Commission’s investigation of Hertz Global Holdings, Inc.’s purchase of Dollar Thrifty Automotive Group Inc., the FTC announced that the parties entered into a settlement, where Hertz will sell some of its holdings in order to relieve FTC’s antitrust concerns. FTC began its investigation of the purchase out of fears that the merger would eliminate head-to-head competition in certain airports by eliminating one of Hertz’ close competitors. According to the FTC, the merger would make it easier for the combined company to increase rates by reducing the U.S. major car rental agencies from four to three, making anti-competitive coordinated conduct amongst them more likely. Under the settlement, Hertz will have to sell its entire Advantage Rent A Car business and 16 Dollar Thrifty airport locations to Macquarie Capital Inc. and Franchise Services of North America, and will sell another 13 Dollar Thrifty airport locations after the deal closes. This settlement will enable Advantage to become U.S.’s fourth-largest car rental company, thereby stimulating more competition in the market.
November 28, 2012 – 11:10 am
In Jeld-Wen Inc. v. AGC America et al., Western District of Pennsylvania Judge Donetta W. Ambrose denied AGC America Inc. and Guardian Industries Corp.’s motion for summary judgment, allowing door and window manufacturer Jeld-Wen Inc. to present its price-fixing claims to the jury. Jeld-Wen sued AGC and five other flat glass manufacturers, claiming that between July 1, 2002 and December 31, 2006, defendants, while controlling approximately 75 percent of the U.S. construction flat glass market, agreed to implement bogus energy surcharges and other price increases to unlawfully fix flat glass prices. Defendants moved for summary judgment. In opposing defendants’ motion, Jeld-Wen presented communications between the defendants suggesting that pricing for flat glass was low during the relevant period, along with expert witness testimony that the surcharges and price increases were coordinated and not the result of increased manufacturing costs and other market conditions. In denying defendants summary judgment, the court held that although plaintiff’s evidence of alleged collusion is weak, it would be up to the jury to decide whether the price hikes were the result of a price-fixing conspiracy.
The allegations in this suit mirror a class action brought by six other direct purchasers of glass products, where the defendants reached settlements totaling more than $22.3 million. Jeld-Wen opted out of this class action prior to filing its own suit.
November 28, 2012 – 10:44 am
In Hero Nutritionals LLC v. Nutraceutical Corp. et al., Central District of California Judge Andrew J. Guilford denied Nutraceutical Corp.’s motion for summary judgment, holding that there was enough of a dispute to keep alive Hero Nutritionals LLC’s trademark infringement and unfair competision claims against Nutraceutical. Hero sued Nutraceuticals for trademark infringement and unfair competition, claiming that Nutraceutical’s use of “Yummy Greens” to market bear-shaped vitamins wrongfully infringes Hero’s trademarks on “Yummi Bears” vitamins and free-rides on the substantial efforts and expenditures Hero invested to establish its reputation and goodwill through public recognition of the “Yummi” brand. Nutraceutical moved for summary judgment, arguing that consumer confusion as to the source of its products is highly unlikely and that it had been using the term “yummy” on chewable children’s supplements for 14 years with Hero’s acquiescence and without a single instance of actual confusion. In denying Nutraceuticals’ motion for summary judgment, the court held that although the court is not certain that consumers were likely to be confused as to the source of Nutraceuticals’ products, there still exist genuine issues of fact that should be settled at trial.
November 17, 2012 – 12:39 pm
In Patrick Dang v. San Francisco Forty Niners Ltd., the plaintiff has filed a putative class action in the Northern District of California alleging that the exclusive license between the NFL, NFL teams, and sports apparel maker Reebok International Ltd. monopolized the market for team apparel. Although that agreement has expired, the NFL currently has an exclusive arrangement with Nike.
In a 2010 decision, the U.S. Supreme Court held that the NFL’s agreement with Reebok could constitute a horizontal agreement among NFL teams, potentially violating the antitrust laws. That case, filed by American Needle, a competitor of Reebok, is currently on-going.
This case alleges that the exclusive agreement has inflated prices paid by consumers for NFL team apparel. Prior to the current era of exclusive licensing, the plaintiff alleges, the NFL licensed multiple apparel companies that competed to provide a selection of products. The exclusive license, plaintiffs claim, ended that competition to the detriment of consumers. “Absent this exclusive agreement,” the complaint alleges, “rival licensees manufacturing and distributing apparel bearing the intellectual property of any NFL team would have competed against one another, thereby providing consumers like plaintiff and the class members with the benefits of such market competition, including lower prices and increased quality and selection.” For example, the complaint alleges that prices for popular items like caps and jerseys increased by more than 1/3 when the exclusive deal took effect.
November 17, 2012 – 12:36 pm
In Rock v. National Collegiate Athletic Association, a class of former college athletes filed suit in the Southern District of Indiana arguing that they have corrected the defects in a prior case and alleged facts sufficient to establish a relevant antitrust market in student athlete labor. The complaint alleges that the NCAA restrained competition in this market by reducing scholarship awards to student athletes. In particular, the former student athletes challenge a former ban on multiyear scholarships and a cap on the number of scholarships that a school may award.
The plaintiffs describe the market as “a ‘nationwide market for the labor of student athletes.’” Although the Seventh Circuit recently dismissed a similar case, the players contend that the court signaled that such a market allegation would support a case against the NCAA.
The NCAA has argued that the alleged market is “simultaneously too broad and too narrow.” Opportunities to play sports at one college are not necessarily a substitute for playing elsewhere, the NCAA contends, thus making the allegation too broad. Yet, the alleged market is also too narrow because non-NCAA colleges and professional leagues are substitutes for NCAA sport opportunities.
The case is currently pending.
November 17, 2012 – 12:34 pm
In Millennium Laboratories Inc. v. Ameritox Ltd., Southern District of California judge Michael M. Anello refused to dismiss a trademark infringement and unfair competition suit against drug-testing firm Ameritox Ltd. Millennium Laboratories Inc., Ameritox’s competitor, filed the action alleging that Ameritox intentionally copied Millennium’s diagnostic report format. The reports are used to notify physicians of the results of drug testing. Because of the similarity in the appearance of the reports, Millennium contended, doctors could mistakenly conclude that Ameritox offered the same services as Millennium.
Although it described the infringement allegations as “barely” adequate, the court allowed the case to move forward on the ground that Ameritox infringed the plaintiff’s trade dress. An image of the allegedly infringed trade dress, according to the court, was not necessary to survive the motion to dismiss, nor was a more definite statement. As Judge Anello explained, the plaintiffs alleged “the essential characteristics of its trade dress, and the necessary elements of a trade dress infringement claim.”
November 16, 2012 – 4:16 pm
In Radio Music Licensing Committee Inc. v. SESAC Inc. et al., plaintiffs have filed suit in the Eastern District of Pennsylvania alleging that performing rights organization SESAC Inc. monopolized thousands of songs and charged supra-competitive royalties for blanket licenses. The case is the second antitrust challenge to these licensing practices.
The plaintiff alleges that SESAC has been able to adopt anticompetitive licensing practices because a government consent decree restricting the licensing activities of the competitive performing rights groups the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music Inc. (BMI) does not apply to SESAC. This competitive advantage enables SESAC, the plaintiffs allege, to share its supra-competitive profits with songwriters, thereby ensuring that they do not switch to a competitor performing rights group.
The plaintiff accuses SESAC of “strategically hand-picking” the song writers to establish exclusive control over essential copyright licenses for radio stations. SESAC then allegedly hampered radio station efforts to determine the songs that are in its repertoire by offering only blanket licenses. The plaintiff asks the court to impose on SESAC the same sort of competitive oversight currently applied to ASCAP and BMI.
In March 2011, a similar suit survived a motion to dismiss and litigation is on-going.