Antitrust Law Blog : Antitrust Lawyer & Attorney : Sheppard Mullin Law Firm : Antitrust Law Blog

California has a strict code section that declares that covenants not to compete are unlawful except in limited circumstances.California Business and Professions Code Section 16600:

“Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.”

Section 16600 has some statutory exceptions (e.g., qualifying sale of a business (Section 16601)), but often operates as a per se rule against noncompete clauses in contracts.

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After nearly two years of vigorously disputing the competitive impact of Whole Foods Market Inc.'s acquisition of Wild Oats Market, Inc., on March 6, 2009, the Federal Trade Commission announced a settlement with Whole Foods that will substantially restore competition allegedly eliminated by Whole Foods' 2007 acquisition of Wild Oats and resolves the antitrust regulator's charges that the acquisition violated federal antitrust laws.

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Judge Oliver W. Wanger of the Eastern District of California granted plaintiff grape growers leave to amend their antitrust and declaratory relief claims against the California Table Grape Commission (CTGC) based on an allegedly anticompetitive and fraudulent "patent and licensing" scheme by the CTGC and US Department of Agriculture (USDA) in connection with three new varieties of table grapes. Delano Farms Co. v. Cal. Table Grape Commission, No. 1:07-cv-1610 OWW SMS (E.D. Cal. filed Feb. 18, 2009).

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Meyer v. Qualcomm, Inc., Case No. 08cv655 WQH (LSP) (S.D. Cal., March 9, 2009)

On March 3, 2009, the District Court for the Southern District of California granted for lack of standing Qualcomm’s motion to dismiss federal and state antitrust and unfair competition law claims brought against Qualcomm by an end consumer alleging that Qualcomm’s anticompetitive licensing practices resulted in higher prices of a particular type of GSM-based cellular device technology that plaintiff purchased. GSM stands for “global system for mobility” and is one of “two technology paths or families of standards [that] are in widespread use today” in wireless communication. Id. at 2. The other is CDMA or “code division multiple access.” Id.

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On March 2, 2009, the Korean National Assembly passed new legislation, the Foreign Legal Consultant Act (FLCA), permitting foreign lawyers to register as "foreign legal consultants (FLCs)" and foreign law firms to open offices in Korea, which are called "foreign legal consulting offices (FLCOs)" under the Act, provided that the countries of jurisdiction where they are licensed have signed and ratified free trade agreements (FTAs) with Korea, including liberalization of the legal services market. The Act is to take effect September 26, 2009, six months after its promulgation, so foreign law firms from countries that are parties to effective FTAs with Korea will now be able to operate foreign legal consultancy businesses in Korea.
 

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Canada has given its competition and foreign investment laws its first major makeover in more than twenty years. On March 12, 2009, Canada's Parliament gave Royal Assent to Bill C-10, the Budget Implementation Act, 2009, and thereby adopted fundamental, significant amendments to the Competition Act and Investment Canada Act. Hard core cartels, for example, will be subject to a per se standard of illegality. Those who violate the per se laws will be liable for penalties of up to $25 million and prison sentences of up to 14 years. Further, Canada's premerger notification and review process has been refashioned to resemble the United States' premerger review system. Additionally, resale price maintenance has been decriminalized and can only be scrutinized on a showing of anticompetitive effects. These and other transformations of Canadian competition law are described in greater detail below.

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