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FTC Secures Partial Victory Requiring SEP Holder to License to All Comers in Antitrust Case

Recently, a federal district court in California granted partial summary judgment for the US Federal Trade Commission (FTC) in an important intellectual property and antitrust case involving standard essential patents (SEP). The court’s decision requires an SEP holder to license its SEPs for cellular communication standards to all applicants willing to pay a fair, reasonable and non-discriminatory (FRAND) rate, regardless of whether the applicant supplies components or end-devices. The decision represents a significant victory for the FTC in enforcing its views of an SEP holder’s commitments to license patents on FRAND terms. Access the full article.

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THE LATEST: FTC Challenges Retail Fuel Station and Convenience Store Transaction— Requires Ten Localized Divestitures in Wisconsin and Minnesota

WHAT HAPPENED: Alimentation Couche-Tard Inc. (ACT) and its subsidiaries (including Circle K Stores, Inc.) are engaged in the retail sale of gasoline and diesel fuel in the United States, as well as in the operation of convenience stores. ACT is the largest convenience store operator in terms of company-owned stores and is the second-largest chain overall in the United States. Pursuant to an Equity Purchase Agreements, dated July 10, 2017, ACT would acquire, through its wholly owned subsidiary Oliver Acquisition Corp., all of the equity interests of certain Holiday subsidiary companies. The FTC defined the relevant product markets as the retail sale of gasoline and the retail sale of diesel. The FTC defined local geographic markets, identifying ten separate geographic markets in Wisconsin (including Hayward, Siren and Spooner) and Minnesota (including Aitkin, Hibbing, Minnetonka, Mora, Saint Paul and Saint Peter). In its complaint, the FTC stated that the...

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Supreme Court Nominee Neil Gorsuch Has Significant Antitrust Experience

On January 31, 2017, President Trump nominated Neil Gorsuch to fill the vacant seat at the Supreme Court of the United States left by the late Justice Antonin Scalia. As a federal judge for the US Court of Appeals for the Tenth Circuit, a former private practitioner, and an adjunct professor of antitrust law at the University of Colorado, Gorsuch has an extensive background in antitrust. In 1996, Gorsuch joined the law firm Kellogg Huber Hansen Todd Evans & Figel, where his practice included both plaintiff and defense litigation in antitrust matters. Gorsuch and his co-counsel helped secure a judgment of $1.05 billion in trebled damages for tobacco company Conwood Co. after a jury found that defendant United States Tobacco Co. engaged in anticompetitive marketing practices. Gorsuch also defended telecommunications company SBC Communications, Inc. during his tenure at Kellogg when a rival company alleged that SBC set forth an illegal tying arrangement. The...

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Supreme Court Finds No Pre-emption in Natural Gas Act Case

The U.S. Supreme Court recently held in ONEOK Inc. v. Learjet, Inc., that the Natural Gas Act (NGA) does not pre-empt state-law antitrust suits over manipulation of natural gas indices.  The court’s decision has important ramifications for natural gas regulation and the regulation of the energy industry more broadly. In ONEOK, a group of direct-sales natural gas customers sued gas pipelines, alleging that the pipelines violated state antitrust laws by reporting false information to privately published market-based price indices, which are used as a tool to determine prices in contracting.  The pipelines, in response, argued that the NGA subjected the conduct to federal oversight that pre-empted the lawsuits.  The justices resolved the issue 7-2 in favor of the direct-sales customers, over a spirited dissent from Justice Scalia in which the Chief Justice joined. The majority based their reasoning upon Congressional intent in regulating the natural gas...

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FTC Asks Court to Reverse Payment Decision

On May 2, 2014, the Federal Trade Commission (FTC) filed an amicus brief with the U.S. Court of Appeals for the Third Circuit requesting that the court reverse the district court’s decision in Lamictal Direct Purchaser Antitrust Litigation, finding that a “no authorized generic” agreement between branded and generic drug makers does not qualify as a “payment,” and is therefore not an antitrust violation.  Such agreements arise in patent settlements when a branded drug maker agrees to not issue its own authorized-generic alternative when the generic company begins to compete. The FTC has taken the position that the “no authorized generic” agreements are akin to reverse payment settlements.  In FTC v. Actavis, Inc., the Supreme Court clarified that reverse payment settlements can violate the antitrust laws and are to be reviewed under the rule of reason.  In a reverse payment settlement, the branded drug maker pays the generic drug maker to drop its patent...

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Sixth Circuit Vacates Class Certification in Detroit Nurses Antitrust Case

On January 6, 2014, the Sixth Circuit vacated a class certification order for reconsideration in light of the Supreme Court’s 2013 decision in Comcast v. Behrend, 133 S. Ct. 1426 (2013).  In re VHS of Michigan, Inc., No. 13-0013 (6th Cir. Jan. 6, 2014).  In Comcast, the Supreme Court reversed a grant of class certification on the ground that the plaintiffs had failed to demonstrate that damages could be proven on a classwide basis because their damages model was inconsistent with their theory of liability. Pre-Comcast, the plaintiffs in VHS filed a class action complaint alleging two theories of liability under the Sherman Act: (1) a “per se” claim that the defendant hospitals conspired to depress the wages of the plaintiff nurses, and (2) a “rule-of-reason” claim that the defendants exchanged information about nurse wages in order to reduce competition.  Subsequently, the district court granted the defendants’ motion for summary judgment on the per se claim....

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Keeping Third Party Communications Protected by the Attorney-Client Privilege

A recent Pennsylvania federal court decision highlights the difficulty in keeping third party communications privileged.  (King Drug Co. of Florence, Inc. v. Cephalon, Inc., No. 06-CV-1797, 2013 WL 4836752 (E.D. Pa. Sept. 11, 2013)).  In Cephalon, the court found third party communications privileged because the third party performed a role for Cephalon substantially identical to that of Cephalon employees.  The Federal Trade Commission (FTC) had sought an order requiring Cephalon to produce documents shared with or created by its third party consultants in connection with work the consultants performed for Cephalon that Cephalon withheld or redacted based upon the attorney-client privilege. In keeping the documents protected, the court followed other courts and adopted the broader “functional equivalent” approach to third party communications.  According to the court, this approach “reflects the reality that corporations increasingly conduct their business...

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Detroit Nurses Object to Sixth Circuit Reviewing Class Certification Decision

On October 11, 2013, the plaintiffs in the Detroit nurses litigation who have accused Detroit-area hospitals of conspiring to suppress their wages opposed VHS of Michigan, D/B/A Detroit Medical Center’s (DMC) petition to the Sixth Circuit for leave to appeal the district court’s decision granting class certification. DMC had asked the Sixth Circuit to do an interlocutory appeal of a September ruling certifying a class of more than 20,000 registered nurses seeking more than $1.7 billion in damages based on a purported antitrust conspiracy among Detroit-area hospitals to reduce nurse wages. The lawsuit was first filed in December 2006 and accuses the Detroit area hospitals of conspiring with one another to keep registered nurses’ wages low.  In particular, the lawsuit alleges that the hospitals agreed to exchange compensation information to reduce wages and competition to hire and retain Detroit nurses.  DMC is the only remaining defendant in the case.  The...

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Judge Refuses to Suspend Previous Apple, Inc. Ruling; Considers Limiting E-Book Negotiations

by Young Cynn On Friday, August 9, 2013, Judge Denise Cote of the U.S. District Court for the Southern District of New York denied Apple’s request to suspend pending appeal a previous ruling that it had violated antitrust laws by conspiring with publishers to raise the price of e-books. Judge Cote also proposed a remedy which includes a two year prohibition on any contracts which would restrict Apple’s ability to discount e-books.  Apple would then be required to negotiate with publishers on a staggered timeline.  Judge Cote also stated that she would prefer Apple to instate a “vigorous” in-house antitrust compliance program, rather than follow the Justice Department’s proposal to hire a full-time internal compliance officer alongside court monitoring for 10 years.  “I don’t want to do more than is necessary here,” said Judge Cote, recognizing the risk of disrupting innovation. Judge Cote remained concerned about the “continuing danger of collusion,”...

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Supreme Court Hears Oral Argument in “Pay-for-Delay” Patent Settlement Antitrust Case

by Jeffrey Brennan and Glenn Engelmann The Supreme Court’s ruling in Federal Trade Commission v. Actavis, Inc., will almost certainly have major implications for the viability of Federal Trade Commission and private suits alleging that pay-for-delay settlements are anticompetitive, and for the level of antitrust risk facing companies that enter into such settlements. Click here to view Jeff Brennan discuss the case on PBS' “Nightly Business Report.”  To read the full article, click here.

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