Antitrust Advocate

Antitrust Advocate

News, Developments and Practical Advice from Antitrust Leaders

Patent Defeats Antitrust in Latest Test at Supreme Court

Posted in Patents

Patent147631712In Kimble v. Marvel Entertainment, 576 U.S. ____ (2015), the U.S. Supreme Court considered whether to overturn Brulotte v. Thys, 379 U.S. 29 (1964), its 1964 decision holding that it was per se unlawful for a patent owner to charge royalties for use of a patented invention after the licensed patent has expired. In a 6-3 decision by Justice Elena Kagan, the court in Kimble concluded that it was required by stare decisis to affirm the Brulotte rule.

Petitioner Stephen Kimble had obtained a patent in 1990 on a Spider-Man-inspired toy that allowed the user to shoot “webs” made of foam string from his or her palm. After Marvel began marketing a similar product, Kimble sued for patent infringement. The case eventually settled. Under the terms of the settlement, Marvel purchased Kimble’s patent for a lump sum payment and a 3 percent royalty in perpetuity on future sales of any products covered by the patent. Though, apparently, neither party knew about the Brulotte decision during settlement negotiations, Marvel later discovered it and successfully obtained a declaratory judgment that its obligation to pay royalties to Kimble would end upon patent expiration in 2010. Continue Reading

“Ain’t Wastin’ Time No More”* — Doctors, Vets, and Lawyers in the Antitrust Crosshairs

Posted in Antitrust Litigation

Antitrust_bigstock-Anticipation-And-Strategy-44442919Supreme Court Decision in North Carolina State Board of Dental Examiners v. Federal Trade Commission Prompts Legal Challenges to State Professional Boards

Earlier this month a Texas federal district court judge granted a motion by Teladoc, Inc. (Teladoc) for a preliminary injunction enjoining the Texas Medical Board (TMB) “from taking any action to implement, enact, and enforce” a TMB rule requiring doctors to conduct an in-person exam prior to telephonic diagnosis and treatment of patients, regardless of whether the exam is medically necessary. (Background on this and other disputes involving Teladoc and TMB is available here and here.

Read more.


Collusion Course: The Limits of Hot Documents

Posted in Antitrust Compliance, Class Action Litigation

Cell phonesDiscovery in antitrust cases often involves a search for smoking-gun documents. Those documents can consist of emails proving that competitors conspired to raise prices, removing the difficulties faced by prosecutors or civil plaintiffs in proving actual injury to competition. Such precious nuggets lead inexorably to near-automatic liability for the defendants. But what if the nugget turns out to be fool’s gold?

Such a not-so-hot document underpinned the recent affirmance of summary judgment for the defendants by the United States Court of Appeals for the Seventh Circuit, in a class action alleging price-fixing by the major providers of mobile telephone text messaging services.[1] Continue Reading

Join BakerHostetler Partners Edmund Searby and Danyll Foix for Webinar on Ethical Considerations in Class Action Litigation

Posted in BakerHostetler, Events

SEARBY_Edmund_CAM_1_11168FOIX_Danyll_CAM_1_3402BakerHostetler partners Edmund Searby and Danyll Foix will present during an upcoming webinar, “Ethical Considerations in Class Action Litigation Part 1: Pre-certification Concerns,” scheduled for Wednesday, June 10, 1:00pm-2:15pm EDT.

The presentation is the first half of a two-part series concerning ethical issues prior to certification of putative class action and those that must be overcome to ensure successful settlement.

FTC Failure to Adopt Section 5 Guidelines Still Hot-Button Issue

Posted in Articles

Antitrust_bigstock-Anticipation-And-Strategy-44442919Section 5 of the FTC Act gives the Federal Trade Commission the authority to take action against “unfair methods of competition.” The act was enacted over 100 years ago, and its legislative history indicates that it was left to the FTC to provide specific content to this broad and general language. However, there is still little clarity today regarding what conduct qualifies and does not qualify as an “unfair method of competition” that might subject an actor to enforcement proceedings, litigation, and/or monetary penalties. It is generally agreed that “unfair methods of competition” was intended to cover conduct that would violate the Sherman Act or Clayton Act, as well as some additional conduct. In recent years, the scope of the FTC’s “standalone” Section 5 enforcement authority—addressing conduct that would not necessarily violate the Sherman Act or Clayton Act—has been a volatile topic, with many in the antitrust community calling for the agency to provide formal guidance addressing the boundaries of this authority.

In June 2013, FTC commissioner Joshua Wright issued a proposed policy statement that would have defined the agency’s standalone Section 5 authority as covering acts or practices that harm or will likely harm competition and lack cognizable efficiencies. Since that time, no action was taken by the commission regarding the proposed guidance. In February of this year, at the Baker & Hostetler-sponsored Symposium on Section 5, Wright again called for the commission to adopt formal Section 5 guidelines. He proposed three possible definitions—differing only in their treatment of efficiencies—and announced that he would ask his fellow commissioners to vote on which of the three to adopt. (Recordings of the symposium can be found here.) Continue Reading

Product Hopping and Antitrust: Mylan Court Dismisses Claims on Summary Judgment, Citing Need to Avoid Chilling Pharmaceutical Innovation

Posted in Antitrust Litigation, Patents, Sherman Act 1, Sherman Act 2

Drug - 100852326A recent summary judgment opinion from the Eastern District of Pennsylvania breaks new ground in the developing antitrust law on “product hopping” claims. “Product hopping” refers to the practice of changing the form or dosage of a branded drug without changing its underlying composition. Though drug manufacturers often make such changes for legitimate business reasons, they may also – thanks to the vagaries of the Hatch-Waxman Act and the Food and Drug Administration’s (FDA) approval processes – have the effect of preventing a generic competitor from entering the market as soon as it otherwise could have.

Back in February, this blog explained this dynamic and the resulting antitrust concerns about product hopping by branded drug manufacturers. We also surveyed the cases that had addressed such claims up to that time, noting that the only reported decisions were from district courts in the context of a motion to dismiss. With District Judge Paul Diamond’s April 16 opinion in Mylan Pharmaceuticals, Inc. v. Warner Chilcott Public Limited Company, Civ. No. 12-3824 (E.D. Pa.) – which granted summary judgment for the defendant branded drug manufacturer on all counts – we have the first extended analysis of antitrust liability for product hopping based on a fully developed factual record. The court’s reasoning is worth pondering, not least because the decision takes a clear stand on the proper relationship between innovation and antitrust law. Continue Reading

Join BakerHostetler’s Carl Hittinger for Webinar Presentation on Antitrust Risks for Trade Associations and Members

Posted in Antitrust Compliance, BakerHostetler, Events

HittingerBakerHostetler antitrust partner Carl Hittinger will be a panelist on an upcoming live webinar, “Antitrust Risks for Trade Associations and Members: Ensuring Compliance Amid Intense Federal Scrutiny,” scheduled for Wednesday, June 3, 1:00pm-2:30pm EDT.  Continue Reading

‘Actavis’ Still Raising More Questions Than It Answers

Posted in Antitrust Litigation, Patents

FDA_78466110Nearly two years after the U.S. Supreme Court’s decision in Federal Trade Commission v. Actavis, 133 S. Ct. 2223 (2013), “reverse payment” settlements in patent litigation between brand-name drug manufacturers and potential generic entrants remain a hot topic in the antitrust world. At the American Bar Association’s Antitrust Law Spring Meeting, held in Washington, D.C., last month, reverse payments were discussed at numerous sessions, including one session devoted exclusively to the topic.

Reverse payments are payments made in connection with the settlement of patent litigation between the manufacturer of a brand-name drug and a competitor seeking to market a generic version of that drug. They are called reverse payments because they flow in the opposite direction from that expected in a litigation settlement. They are payments from the brand-name manufacturer plaintiff (the party claiming patent infringement) to the generic competitor defendant (the party accused of patent infringement). Continue Reading

Fit to Be Tied: Appeals Court Redefines Tying Arrangements Based on Bundled Pricing

Posted in Antitrust Compliance, Sherman Act 2

bigstock-Dollars-Background-from-packs-45251779Corporate antitrust compliance programs often spotlight the dangers of tying arrangements. Those risks arise when a seller with a dominant position in one product coerces its customers by offering that must-have product only if customers buy a second product that they don’t want (or at least would rather buy elsewhere).

Tying arrangements are easy for risk managers to spot when the link between the two products is explicit – if you want product A, you have to buy product B too. A recent federal court of appeals decision focuses on a different kind of linkage: when a company sells product A by itself, but offers deep discounts if customers buy product B as well. Continue Reading

Apple’s Streaming Music Service Under Investigation

Posted in Government Investigations

Modern communication technology mobile phoneIt has been a busy several months for antitrust regulators and the tech giants whose alleged conduct has recently drawn their ire. Just a few weeks ago, Google formally became the subject of a European investigation into its alleged skewing of Google search results to favor other Google products and the tying of its apps to developers’ use of the Android OS. Now, Apple is reportedly under scrutiny, this time by U.S. and European officials, over its soon-to-be-launched streaming music platform. Continue Reading