Antitrust Law Blog

The antitrust litigation against Rambus for failing to disclose patents to JEDEC, a standard setting body (SSO), took another twist last week.  In Rambus v. FTC, No. 07-1086 (D.C. Cir. 2008), the court unanimously set aside the FTC decision holding that Rambus' conduct constituted monopolization under Section 2 of the Sherman Act.  The D.C. Circuit held that the FTC failed to carry its burden to show the conduct was exclusionary.  In dicta, the court also suggested that the FTC had taken "an aggressive interpretation of rather weak evidence" to conclude that the failure to disclose was a violation of JEDEC disclosure rules.

Competitors of a copier equipment provider, IKON Office Solution ("IKON") alleged that defendant IKON used "fraudulent practices" to secure and lengthen its customer contracts, and thus reducing the ability of competing copier equipment providers to contest for "aftermarket" business.  The district court granted a motion to dismiss pursuant to FRCP 12(b)(6), on the ground that IKON did not have market power over a "unique" product or service, and that any control that it had acquired over its customers was a function of contract, and not market power.  The district court distinguished Eastman Kodak Co. v. Image Technical Services, Inc.,[1] and relied on the decision of the Third Circuit in Queen City Pizza, Inc. v. Domino's Pizza, Inc.[2]  The court held that the parties copier equipment was interchangeable, and thus within the same relevant market.  It was only the defendant's customer contracts that prevented plaintiffs from attempting to gain aftermarket business from defendant's customers.

On March 31, 2008, a federal district court in Ohio granted summary judgment after finding insufficient evidence to support a claim that Respironics, Inc., a manufacturer of positive airway pressure devices ("PAPs") and masks used to treat obstructive sleep apnea ("OSA"), entered into exclusive deals with sleep labs and durable medical equipment suppliers ("DMEs") to prescribe Respironics' products to the exclusion of others.  Invacare Corp. v. Respironics, Inc., No. 1:04 CV 1580 (N.D. Ohio 3-31-2008). 

Over the last several months, Canada's head federal antitrust enforcer, the Commissioner of Competition, has lost three rounds of disputes with Labatt Brewing Company Limited.  Labatt is the second largest brewery in Canada.  The first two losses relate to the Commissioner's attempt to temporarily block Labatt from completing its merger with Lakeport Brewing Limited Partnership in order to give the Commissioner more time to review the deal.  The third involved a Federal Court quashing "enormous" document subpoenas the Commissioner obtained against Labatt, Lakeport and fifteen other breweries.  This marked the first time a "section 11" order has been struck down in a merger case.

On May 5, the European Commission announced that it had sent a statement of objections to a number of suppliers of marine hoses.  Marine hoses are used by customers in the oil and defense industries to transport oil and petroleum products between tankers and storage facilities.  The statement of objections sets out the Commission's allegations that the companies have participated in a cartel in breach of Article 81 of the EC Treaty and Article 53 of the EEA Agreement.  It follows the Commission's announcement that it carried out dawn raids in the sector in May 2007.  The companies will now have an opportunity to respond to the allegations and evidence set out in the statement of objections. They will have access to the Commission's file and may request an oral hearing.  The Commission's dawn raids were coordinated with the US Department of Justice (DOJ) in the context of a suspected worldwide cartel concerning marine hoses and, in the UK, the Office of Fair Trading (OFT) has also been carrying out a criminal cartel investigation under the Enterprise Act 2002.  In December 2007, DOJ announced that three UK individuals had agreed to plead guilty to their participation in a cartel in the supply of marine hoses in the US, and the OFT announced that it had brought criminal charges under the Enterprise Act against those individuals on their return to the UK.