Vote For Orrick’s Jurata and Patel for a Concurrences Antitrust Writing Award

Orrick Antitrust partner Jay Jurata and Managing Associate Amisha Patel have been nominated for a Concurrences Antitrust Writing Award for their article, “Taming the Trolls: Why Antitrust Is Not a Viable Solution for Stopping Patent Assertion Entities,” which appeared in the George Mason Law Review.

Concurrences picks its Antitrust Writing Award winners by vote, so we encourage you to cast yours! Please click here to do so by Friday, Feb. 27!

DOJ’s Approval of Revisions to IEEE’s Standard-Setting Policies Provides Guidance for SSOs, Patent Holders, Licensees and Courts

On Feb. 2, 2015, the U.S. Department of Justice (DOJ) issued a business review letter that effectively approved a proposal by the Institute of Electrical and Electronic Engineers (IEEE) to update the IEEE Standard Association’s Patent Policy (Policy) regarding standard-essential patents (SEPs) (the Update). The DOJ’s approval of IEEE’s Update is an important step in the development of policies that standard-setting organizations can adopt with respect to SEPs while reducing the risk of an enforcement action by the DOJ. Read More

China and U.S. Issue Joint Fact Sheet Addressing China’s Enforcement of the Anti-Monopoly Law and Intellectual Property Rights

On Dec. 29, 2014, the U.S. Department of Commerce posted a fact sheet on the 25th U.S.-China Joint Commission on Commerce and Trade. Portions of the fact sheet—which was jointly issued by the U.S. and Chinese governments—address competition issues and intellectual property rights, following substantial criticism of what many considered to be uneven enforcement of China’s Anti-Monopoly Law (AML) against non-Chinese companies. We described the nature of that criticism in October 2014. The main complaint has been that China undertakes selective enforcement of the AML with the goal of promoting Chinese companies or industries, and does the same with enforcement proceedings relating to intellectual property rights. The fact sheet states the following with respect to competition: Read More

Jiangsu High Court Upholds Dismissal of Administrative Lawsuit Involving USB 3.0 Connector Essential Patent Dispute

On Dec. 19, 2014, Jiangsu High People’s Court upheld the first instance ruling by Nanjing Intermediate People’s Court that dismissed an administrative lawsuit brought by Lotes Suzhou Co., Ltd. (Lotes Suzhou). Lotes Suzhou had appealed the decision of the Intellectual Property Office of Jiangsu Province (Jiangsu IPO) that found that the company’s USB 3.0 connector products infringed the patent CN200810128623.1 (CN’623) held by Foxconn Kunshan Computer Connector Co., Ltd. (Foxconn Kunshan).

In July 2012, Foxconn Kunshan filed a complaint before Jiangsu IPO asserting that Lotes Suzhou’s USB 3.0 connecters infringed the CN’623 patent. Jiangsu IPO issued a decision in July 2013 finding that Lotes Suzhou’s acts constituted infringement of Foxconn Kunshan’s patent rights and ordered Lotes Suzhou to stop manufacturing the infringing products, destroy infringing products in inventory, and destroy molds specially used for the manufacture of the infringing products. Read More

French Competition Authority Fines Wallpaper Producers for Anticompetitive Information Exchange

Following a request for leniency from seven wallpaper producers for engaging in anticompetitive conduct, the French Competition Authority (FCA) recently sanctioned them in the amount of 5.27 million euros (US$6.6 million).

The anticompetitive information exchange took place between wallpaper suppliers when they were asked by a wholesaler to create a common wallpaper catalog, according to the FCA. The competing suppliers met several times, either formally or via telephone conferences, to discuss commercially sensitive information. The type of information disclosed not only concerned commercial terms of the catalog, but also future market behavior such as foreseeable tariff trends and prospective data to fix prices. The FCA regarded these practices as restrictions of competition by object, but noted that it was occasional and unsophisticated, which had a mitigating effect on the outcome. Read More

Advocate General: Removal of the Only German Participant in a Cartel Damages Case From Litigation Does Not Prevent the Claim From Being Pursued in Germany

On Dec. 11, 2014, Advocate General Niilo Jääkinsen advised that a German court could retain jurisdiction over a cartel damages claim even after the only German defendant company has reached a settlement.

In May 2006, the European Commission fined the members of a hydrogen peroxide cartel. Several companies that claimed to have suffered damages as a result of this cartel assigned their rights to any damages from actions against the cartel members to a Belgian company called Cartel Damages Claims Hydrogen Peroxide SA (CDC). CDC brought a claim before a German regional court against six of the cartel members, one of which was a German company. Read More

Court of Justice Scrutinizes Right of the European Commission to Conduct Raids on Companies Suspected of Breaking Antitrust Rules

On Dec. 4, 2014, the Court of Justice of the European Union heard Deutsche Bahn’s appeal against a September 2013 judgment by the General Court that 2011 inspections of its premises were legal.

Deutsche Bahn argued that EU inspection procedures were subject to insufficient oversight by the courts. The company stated that raids should be authorised by a judge prior to taking place, and argued that because opposition to an inspection could lead to substantial fines, there was no real right to oppose. Deutsche Bahn stated that any challenges to the legality and process of the raids would not repair the damage that they had suffered as a result of an unlawful raid, as officials would already have viewed any potentially incriminating evidence. Read More

European Commission Clears Holcim/Lafarge Merger at Phase I

The European Commission cleared the merger of cement companies Holcim and Lafarge by a Phase I decision on Dec. 15, 2015, despite their positions as the first and second-largest such companies in the European Union. The merger will create the largest cement manufacturer in the world, and the new company, LafargeHolcim, will be active in over 90 countries.

The EC decision on the Lafarge-Holcim merger followed a lengthy period of pre-notification discussions between the companies and the Commission, during which the Commission expressed its concerns that the merger would have a detrimental effect on competition. Read More

French Supreme Court Dismisses Appeal by Orange Against €60 Million Fine for Subsidiary’s Abuse of Dominant Position in Overseas French Territories

On Jan. 6, 2015, the French Supreme Court dismissed an appeal by Orange against the decision of the Paris Court of Appeal of July 2013, which confirmed the decision of the French Competition Authority (FCA) to fine telecoms operator Orange 60 million euros (US$68.8 million). The fine resulted from Orange’s abuse of a dominant position in French overseas territories French Guiana, Martinique and Guadeloupe. The original decision by the FCA had found that between 2000 and 2005, Orange’s wholly owned subsidiary, Orange Caraïbe, had attempted to prevent competitors from entering the market and to limit the growth of other operators. Orange Caraïbe’s anticompetitive behaviour was found to include signing exclusivity agreements with suppliers and using loyalty programs to encourage customers to sign longer-term contracts. Orange Caraïbe’s market share in these overseas territories is estimated to have been around 75 percent. Read More

European Commission Publishes Competition Policy Brief on New Damages Directive

On Jan. 13, 2015, the European Commission published a competition policy brief on Commission Directive 2014/14. Competition policy briefs are occasionally issued by the Competition Directorate-General of the European Commission to explain and discuss key cases and policy issues. This brief is designed to explain the background of the Directive and to explain the reasons for the changes that it has made.

The policy brief can be viewed here. For further newsletter reporting on the Directive, see here and here.

U.S. Supreme Court Clarifies Application of Final Judgment Rule in Multidistrict Antitrust Case

On Jan. 21, 2015, the U.S. Supreme Court issued a unanimous decision clarifying the appealability of a ruling in a case that has been consolidated for pretrial purposes with others in a multidistrict litigation (MDL) proceeding. Gelboim v. Bank of Am. Corp., 135 S.Ct. 8971174 (2015).

Plaintiff Ellen Gelboim filed a class action alleging that the defendant banks violated federal antitrust law by conspiring to fix a measure of interest rates. The case was consolidated with 60 others for pretrial purposes. Although some of the other cases also contained additional claims, Gelboim’s complaint raised only the single antitrust claim. The defendant banks moved to dismiss Gelboim’s complaint on the ground that the plaintiffs had suffered no antitrust injury. The district court granted the motion, dismissing Gelboim’s case in its entirety while those cases in the MDL presenting additional claims remained before the court. When Gelboim appealed, the 2nd U.S. Circuit Court of Appeals, acting on its own motion, dismissed the appeal for want of appellate jurisdiction. Because the MDL was ongoing, the court ruled, there was no “final decision of the district court” as required for appellate jurisdiction under 28 U.S.C. § 1291. Read More

9th and 7th Circuits Issue Amended Opinions Suggesting Narrowing of Differences in Application of the “Domestic Effects” Test Under the FTAIA

The past year has seen somewhat conflicting decisions from 7th Circuit (Motorola Mobility) and 9th Circuit (Hsiung) regarding the scope and application of the U.S. Foreign Trade Antitrust Improvements Act, 15 U.S.C. § 6a to preclude Sherman Act liability for conduct that takes place outside the United States. Specifically, the 7th and 9th Circuits have disagreed regarding the meaning of the statutory “domestic effects” test used to determine whether Sherman Act claims would be blocked by the FTAIA. However, in January 2015, both Circuits issued amended opinions in cases stemming from the TFT-LCD price-fixing case—after reviewing each other’s original opinion and a lot of commentary and criticism by outsiders—suggesting that they be moving closer in how their different formulations of the test apply to foreign anticompetitive conduct that has an effect in the United States. Read More

5th Circuit Rejects Claim That Horse Association Violated Sherman Act by Voting to Block Registration of Horses Created Through Cloning

On Jan. 14, 2015, the 5th U.S. Circuit Court of Appeals reversed a district court’s order rejecting the American Quarter Horse Association’s (AQHA) motion for judgment as a matter of law after a jury found that it violated the Sherman Act by adopting new rules the block the registration of horses created through cloning. Abraham & Veneklasen Joint Venture v. Am. Quarter Horse Assoc., No. 13-11043, 2015 U.S. App. LEXIS 582 (5th Cir. Jan. 14, 2015). While the court assumed that the association could be liable for violating Section 1 under the U.S. Supreme Court’s joint venture decision in American Needle, Inc. v. NFL, 560 U.S. 183 (2010), it found that there was insufficient evidence to permit an inference of a conspiracy . The Court also rejected plaintiffs Section 2 claim that the association had monopolized an alleged market for “elite Quarter Horses.” Read More

1st Circuit Clarifies Class Composition Rules for Reverse Payment Pharmaceutical Actions

On Jan. 21, 2015, a split 1st U.S. Circuit Court of Appeals panel upheld a district court order certifying a class of payors, union health and welfare funds, and individual consumers, in a reverse payment pharmaceutical class action, even though the class, when certified, contained more than a small number of uninjured class members. AstraZeneca AB v. UFCW (In re Nexium Antitrust Litig.), Nos. 14-1521, 14-1522, 2015 U.S. App. LEXIS 968 (1st Cir. Jan. 21, 2015).

In this Hatch-Waxman case, AstraZeneca—the manufacturer of the gastroesophageal reflux disease drug Nexium—entered into settlement agreements with several generics companies (Ranbaxy, Teva and DRL), after first suing each for patent infringement when the companies sought to market a generic form of Nexium. AstraZeneca agreed to pay each company a significant sum—a combination of cash and debt-forgiveness—in exchange for the company agreeing to 1) not challenge the validity of the Nexium patents, and 2) delay any launch of a competing generic products until the Nexium patents expired in May 2014. Pursuant to the U.S. Supreme Court’s 2013 decision in Federal Trade Commission v. Actavis, 133 S. Ct. 2233 (2013), reverse payment arrangements, when challenged, are properly evaluated under the rule of reason. Read More

5th Circuit Affirms Dismissal of Monopolization Claim Against General Motors

On Jan. 27, 2015, the 5th U.S. Circuit Court of Appeals affirmed the dismissal of a lawsuit brought by an auto parts retailer, Felder’s Collision Parts, against General Motors and its distributor, All Star, alleging that GM attempted to monopolize the market for collision parts through an unlawful predatory pricing scheme. Felder’s Collision Parts, Inc. v. All Star Adver. Agency, Inc. et al., Case No. 14-30410, 2015 U.S. App. LEXIS 1253 (5th Cir. Jan. 27, 2015).

The lawsuit challenged GM’s “Bump the Competition” program. Under the program, GM provided rebates to dealers like All Star that sold GM-manufactured parts at a consumer price 33 percent below the prevailing price of equivalent generic parts. This retail price was also below the price All Star and other dealers paid GM for the part. However, the rebates allowed the participating dealers to ultimately make a 14 percent profit on the sale, despite initially selling the part at below cost. Read More

Settlement Reached in High-Tech Employees Non-Solicitation Cases

On Jan. 15, 2015, plaintiffs filed a motion for preliminary approval of a $415 million settlement for claims brought by employees of Silicon Valley technology companies alleging that the defendants had entered into agreements not to solicit each other’s employees. In re: High Tech Emp. Antitrust Litig., No. 5:11-cv-02509-LHK (N.D. Cal. Jan. 15, 2015), Dkt No. 1032. The class settlement amount of $415 million is an increase of $90.5 million over the original $324.5 million settlement that Judge Lucy Koh had rejected as being insufficient. In re: High Tech Emp. Antitrust Litig., 2014 U.S. Dist. LEXIS 110064 (N.D. Cal. Aug. 8, 2014).

Plaintiffs filed complaints against certain high-tech companies, and in October 2013 the court granted class certification as to a narrowed class of employees. In March 2014, the court denied the defendants’ summary judgment motion. Shortly before the trial was set to begin, the parties informed the court that they had reached a settlement. Plaintiffs filed a motion for preliminary approval of a settlement totaling $324.5 million, and one class member objected to the settlement. Read More

9th Circuit Applies Antitrust Exemption in San Jose MLB Team Relocation Case

In City of San Jose v. Office of the Commissioner of Baseball, Case No. 14-15139 (9th Cir. Jan 15, 2015), the 9th U.S. Circuit Court of Appeals applied the judge-made antitrust exemption for baseball to bar a challenge by the City of San Jose, California to a rule adopted by Major League Baseball (MLB) that three-quarters of MLB teams must approve a baseball franchise relocation.

San Jose planned to welcome the Oakland A’s to a new stadium in San Jose, which is within the geographic territory allocated by MLB to the San Francisco Giants. That fact required, under league rules, approval of the relocation by three-quarters of MLB’s members. After MLB―in San Jose’s view―delayed a vote, San Jose sued MLB, arguing, among other things, that the delay was an attempt to stymie the relocation and preserve the Giants’ local monopoly. MLB argued that the baseball exemption barred San Jose’s suit. Read More

Massachusetts State Court Deals Significant Blow to Partners Healthcare Hospital Mergers

On Jan. 29, 2015, Massachusetts Superior Court Judge Janet Sanders rejected a proposed consent judgment that would have allowed Partners Healthcare—a 10-hospital and 6,000-physician system (and the largest health system and private employer in Massachusetts)—to acquire three of its direct-competitor hospitals just north and south of Boston, while adding hundreds of doctors to the Partners network. Commonwealth v. Partners Healthcare Sys., Inc., No. SUCV2014-02033-BLS2, 2015 Mass. Super. LEXIS 4 (Mass. Super. Court, Suffolk County, Jan. 29, 2015). Read More

FTC Releases Annual Threshold Updates for Premerger Notification Filings and Interlocking Directorates

The U.S. Federal Trade Commission announced its annually revised filing thresholds on Jan. 15, 2015. The size-of-transaction threshold for reporting proposed mergers and acquisitions subject to antitrust enforcement under the Hart-Scott-Rodino Antitrust Improvements Act will increase from $75.9 million to $76.3 million.

The FTC also revised the thresholds that trigger prohibitions on certain interlocking directorates under Section 8 of the Clayton Act. The new 2015 thresholds for the Act’s prohibition on interlocking directorates are $31,084,000 for Section 8(a)(l) and $3,108,400 for Section 8(a)(2)(A).

A full listing of current thresholds can be found on the FTC’s website, which will be updated once the revised thresholds go into effect on Feb. 20.

Clarity And Confusion: FTAIA Developments In 2014

This article originally appeared in Law360 on Jan. 16, 2015. A pdf version is available here

The Foreign Trade Antitrust Improvements Act[1] has confounded practitioners and courts alike for years. This past year brought long-anticipated decisions from the Second (Lotes),[2] Seventh (Motorola Mobility II)[3] and Ninth (Hsiung)[4] Circuits regarding four important issues: (1) whether the FTAIA is substantive or jurisdictional; (2) the scope of the exclusion for conduct affecting “import commerce”; (3) the appropriate standard for the “domestic effects” test; and (4) the increasing importance of the “gives rise to a claim” test. This article summarizes these recent circuit court opinions and offers some thoughts about issues to watch going forward.

Read More