Nine Antitrust Developments You Should Know About Today

1. Nine Antitrust Developments You Should Know About Today

2. Independent Ink, Inc. v. Illinois Tool Works, Inc, 396 F.3d 1342 (Fed. Cir. 2005) • Patent holder requires purchase of non-patented product as prerequisite to purchasing patented product in its licensing agreement with buyers • Federal Circuit (reversing district court) rules that the plaintiff did not need to prove market power in the relevant market as part of its tying claim • Market power is presumed based solely on the existence of the patent on the tying product and the market is defined by the patent

3. U.S. v. Dentsply, 3rd Circuit 2005 • 75-85% of denture market • Need dealers to compete • Dentsply refused to open its dealer network to competitors • At-will relationship • Circuit reverses and orders a Section 2 injunction

4. Supplier-Customer Preferences “Bundled” discounts after LePages v. 3M • LePages: above-cost, multi-product “bundled” discounts can violate Section 2 • Little practical impact to date The Newest Frontier? • Cases attacking discounts, rebates & advertising allowances • Category management strategies

5. Evanston Northwestern Healthcare Corp. and ENH Medical Group, Inc., FTC Docket No. 9315 • FTC challenges acquisition of one hospital by hospitals in a similar product and same geographic market • Pricing policies for hospital services • Price fixing for physician services • FTC seeks to divest the acquired hospital • FTC seeks an elaborate consent decree regulating ENH’s negotiating tactics into the future • Consent decree entered prohibiting ENH’s negotiating on behalf of physicians

6. HSR Rule Changes HSR Act now applies to many more deals involving partnerships & LLCs, which are treated more like corporations (1) reporting point moved from 100% to “control” • right to 50% of assets • right to 50% of profits upon dissolution • (2) transaction value based on acquisition price or fair market value of interests • instead of underlying assets

7. HSR Rule Changes Good News . . . • More exemptions will apply to voting security acquisitions • Expansion of intra-person exemption • Exemption for financing vehicles . . .and don’t forget . . . Increase in filing thresholds . . . • $50 million is now $53.1 million

8. Healthcare Quagmire

9. Union Oil Co. of Cal., FTC Docket No. 9305 (July 7, 2004) • The effects of deceptive conduct in a state regulatory proceeding on a related patent • Unocal suggested a path for the CARB on standards for low emission fuels • At the same time that it petitioned the CARB, and unbeknownst to anyone else in the process, Unocal was seeking patents on the very path suggested • When the patents issued, Unocal demanded royalty payments from others who adopted the path

10. Bankruptcy Creditors • General rule is creditors can cooperate – Sharon Steel (2nd Cir. 1982) • Complaint re United Airlines airplane lessors • Can continuing creditors cooperate? • If so, when? • Relevant market?

11. Antitrust Modernization Commission • Created to examine the U.S. antitrust laws, identify whether “modernization” is necessary and “solicit views of all parties concerned with the operation of the antitrust laws” • 12 members • Public hearings to begin Summer 2005 • Report expected April 2007

12. AMC -- Nine “Study” Groups Robinson-Patman Act “New Economy” Issues Enforcement Institutions Merger Enforcement International Issues Exclusionary Conduct Immunities & Exemptions Regulated Industries Remedies

13. Hot Issues at the Agencies Exemptions & Immunities • State action doctrine • Noerr-Pennington Merger Review Process • Merger guidelines commentary • FTC task force • HSR enforcement “Criminal” Issues