Category: Monopolization

Under the Biden Administration, the FTC and DOJ have voiced a commitment to an expansive enforcement of antitrust law.  The recent confirmation of Judge Ketanji Brown Jackson to assume Justice Breyer’s position on the Supreme Court raises the question of how antitrust jurisprudence might develop against that backdrop.  Those questions loom particularly large given that Justice Breyer’s antitrust opinions have not reflected a predictable theoretical approach to antitrust issues facing the Court; instead, they have tended to manifest the pragmatism that guides his judicial philosophy.

The Supreme Court is the only avenue left for JELD-WEN Inc. after the Fourth Circuit denied the door manufacturer’s motion for rehearing en banc of a panel’s decision in Steves & Sons, Inc. v. JELD-WEN, Inc., 988 F.3d 690 (4th Cir. 2021), to affirm an order directing JELD-WEN to sell a plant it acquired in 2012.  That leaves intact a District Court’s divestiture order—a remedy typically obtained only by government entities—in a suit brought by a “private attorney general” pursuant to § 7 of the Clayton Act. 

Intel and Apple’s challenge to Fortress’s allegedly anticompetitive practice of patent “aggregation,” which we discussed previously on this blog, suffered another setback earlier this month.  The Northern District of California dismissed the plaintiffs’ first amended complaint, although it granted them leave to amend again. 

For years, antitrust commentators have warned of threats to innovation and competition posed by “thickets” of patents—the “dense web[s] of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology.”  See Carl Shapiro, “Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard-Setting” (March 2001), available at https://www.nber.org/chapters/c10778.pdf. At least one judge on the Federal Circuit has also noted concern about this issue.  E.g. Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1328-29 (Fed. Cir. 2016) (Mayer, J., concurring) (calling for elimination of “generically-implemented software patents” to “clear the patent thicket”).

With the Democratic primary process in full swing, we thought it fitting to take a look at where the candidates stand with respect to antitrust issues.  As it turns out, this is a fairly active election cycle for antitrust, with most Democratic candidates invoking antitrust laws (and proposed laws) in connection with their visions for the future.  The increased focus on antitrust has not been lost on other observers.

2019 witnessed a number of developments in challenges to reverse-payment settlements.  In its first decision on a pay-for-delay settlement since the Supreme Court’s seminal 2013 decision in FTC v. Actavis, the FTC took an aggressive approach to evaluating a plausible restraint on trade and analyzing proffered procompetitive benefits, reversing the ALJ who heard the case.  In the Southern District of New York, an attempt by direct purchasers to plead a conspiracy arising out patent-infringement settlements without an alleged reverse payment failed.  And, in the class certification context, district courts grappled with Rule 23(b)(3)’s predominance requirement.  These notable cases in antitrust actions concerning the pharmaceutical industry are discussed below.

Public discourse about antitrust law has been expanded to include a wider range of ideas about the purpose of antitrust law.  “New Brandeisians” believe that the consumer welfare standard, which prioritizes end-user prices over most other considerations, does not account for all the harms caused by a lack of competitive markets.  They contend that this standard is particularly ill-suited for policing the large technology companies that dominate their markets.  As previously discussed here and here and here, certain American regulators, legislators, and presidential candidates appear to be listening.

The Supreme Court has granted certiorari and will hear, next term, an appeal from Ninth Circuit’s decision in In re Apple iPhone Antitrust Litigation, a case we previously reported on. In In re Apple iPhone, the Ninth Circuit held that...

On January 10, 2018, in In re Lantus Direct Purchaser Antitrust Litig., the District Court for the District of Massachusetts dismissed the antitrust case against Sanofi-Aventis U.S. LLC (“Sanofi”), the manufacturer of Lantus and Lantus SoloSTAR, which use the insulin product glargine to treat Type I and Type II diabetes.  The plaintiffs in the multi-district litigation, a group of purchasers of the Lantus products, alleged that Sanofi unlawfully prolonged its monopoly for the glargine products after the expiration of the relevant patent in two ways.  First, the plaintiffs alleged that Sanofi improperly listed six patents in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (the “Orange Book”).  Second, the plaintiffs alleged that Sanofi pursued sham litigation against Eli Lilly in which Sanofi asserted claims of patent infringement without any reasonable basis. That litigation was settled by Sanofi and Lilly shortly before trial.

On August 29, 2017, the D.C. Circuit affirmed the district court’s decision dismissing a suit filed by 2012 third-party presidential candidates Gary Johnson and Jill Stein, their running mates, their campaigns, and the parties they represented (together, “Plaintiffs”) against the Commission on Presidential Debates.  Plaintiffs alleged that Johnson and Stein were improperly excluded from nationally televised general-election presidential debates in violation of the Sherman Act.

Last Monday, the court denied Qualcomm, Inc.’s motion to dismiss the Federal Trade Commission’s suit against it for allegedly using anticompetitive tactics to maintain a monopoly in baseband modem chips for cell phones.  The FTC contends that Qualcomm is using its standard-essential patents (SEPs) to extract monopoly prices from cell phone and other cellular device manufacturers in violation of its commitment to license its patents on a “fair, reasonable, and non-discriminatory” (FRAND) basis.

In a split decision, on April 28, 2017, the Court of Appeals for the District of Columbia Circuit affirmed the district court’s decision to issue a permanent injunction blocking the merger of Anthem, Inc. and Cigna Corp., two of the nation’s largest health insurance providers.  As we’ve previously written, in July 2016, the Department of Justice and attorneys general from multiple states sued to halt the merger pursuant to Section 7 of the Clayton Act, alleging that it would substantially lessen competition in the market for employers purchasing insurance for more than 5,000 employees ( “national accounts”) in multiple states and employers purchasing insurance for more than 50 employees (“large group employers”) in Richmond, Virginia.  After a six-week bench trial, the district court enjoined the merger on the basis of its likely substantial anticompetitive effects in both markets.

The incentive is high to identify a Sherman Act violation in your competitor’s conduct—three times higher, to be precise, than to bring a claim for an ordinary business tort or even a false advertising claim under the Lanham Act.  But as we noted in December, the Fifth Circuit recently refused to recognize a claim for attempted monopolization under Section 2 based on a defendant’s false advertising “absent a demonstration that [the] false advertisements had the potential to eliminate, or did in fact eliminate, competition.”  The court relied on a prior decision in which it expressed “extreme reluctance to allow a treble damage verdict to rest upon business torts alone.”  The case is Retractable Technologies, Inc. v. Becton Dickinson & Co.

In a recent decision, the Third Circuit held that a public university and its non-profit partner were immune from antitrust liability after the university enacted a student residency policy that benefitted on-campus dormitories at the expense of off campus housing.  Absent evidence that a university is controlled by participants in the housing market, it is entitled to a presumption that is acting in the public interest and therefore enjoys more deference than a state board composed of active market participants.  The takeaway is that state universities seeking immunity from alleged anti-competitive actions must show that their conduct complies with a clearly articulated state policy but need not show active supervision of the university by the state.

In the past month, the DOJ and several state governments scored two trial wins in their challenges to mergers among some of the country’s largest health insurers.  First, Judge Bates of the District of Columbia blocked the combination of Aetna and Humana, finding that the “proffered efficiencies do not offset the anticompetitive effects of the merger.”  Weeks later, Judge Jackson of the same district scuttled a deal between Anthem and Cigna, which she found “likely to lessen competition substantially” in the relevant market. 

Last week, the FTC filed a complaint against Qualcomm, a manufacturer of baseband processors, which are chips included in cell phones and other products with cellular connectivity that allow the devices to connect to cell networks.  Qualcomm holds patents to technologies incorporated in the standards that allow all cell phones to communicate with one another, referred to as standard-essential patents or SEPs.  Qualcomm’s patents mostly relate to older, 3G-CDMA cellular technologies, which are still necessary for modern cell phones to work as consumers expect.  As a condition of declaring its patents standard-essential, Qualcomm committed to the telecommunications industry’s standard-setting organizations that it would license its patents on a “fair, reasonable, and non-discriminatory” (FRAND) basis.

In a recent decision denying the defendant’s motion to dismiss, Judge Mitchell Goldberg of the Eastern District of Pennsylvania allowed the manufacturer of a generic version of Suboxone to proceed upon an interesting theory of attempted monopolization by the brand-name manufacturer Indivior (formerly, Reckitt).  Amneal, the generic manufacturer, alleges that Indivior purposefully delayed what was supposed to be a joint effort to develop a combined risk management strategy for all versions of Suboxone.

It has been over three years since the Supreme Court’s Actavis decision.  Since then, numerous putative class actions alleging harm to competition as a result of “reverse-payment” settlements have flooded the courts.  The complexity of these cases, along with the vague guidance provided by the Supreme Court, has given rise to intricate questions about how courts should apply Actavis and scrutinize settlements of Hatch-Waxman litigation.

On September 27, the U.S. Court of Appeals for the Third Circuit handed the Federal Trade Commission a big win, overturning the Middle District of Pennsylvania’s denial of an injunction to block the proposed merger of Penn State Hershey Medical Center and PinnacleHealth System, two major healthcare providers in central Pennsylvania.

The Federal Trade Commission has made clear that it considers the regulation of competition in health care markets one of its top priorities, but in recent weeks the FTC has been dealt a string of tough losses in its healthcare merger challenges.  Here, we examine some of the key takeaways from the FTC’s recent defeats in this area.

As we have reported previously, the Federal Trade Commission recently has taken an aggressive stance in regulating mergers in the healthcare sector.  The Commission has racked up a string of victories, but last week the Middle District of Pennsylvania dealt a blow to that track record by denying the Commission’s request for a preliminary injunction to block a merger of two major healthcare providers in central Pennsylvania: Penn State Hershey Medical Center and PinnacleHealth Systems.  The FTC is pursuing an emergency appeal to the Third Circuit, but this loss could signal a waning in the FTC’s enforcement authority in the healthcare sector.

Earlier today, the Third Circuit Court of Appeals upheld the decision of the District of New Jersey trial court dismissing the antitrust claims lobbed against Sanofi-Aventis by its rival pharmaceutical company Eisai.

On Monday, Staples and the Federal Trade Commission began presenting arguments in the D.C. District Court on whether the FTC should be entitled to a preliminary injunction to halt a potential merger between Staples and Office Depot.  We previously reported on the Staples-Office Depot merger here and here.  Judge Emmet G. Sullivan, who is overseeing the bench trial, presided over a similar hearing just a few months ago related to the DOJ’s attempt to stop General Electric from selling its appliances division to Electrolux, a transaction that GE eventually abandoned.

Minnesota Timberwolves season ticket holders unhappy with the team’s 20-45 record and hoping to resell their tickets have filed a putative class-action lawsuit over the team’s “draconian” ticketing policy.

On January 12, 2016, Judge Engelmayer of the Southern District of New York dismissed a lawsuit against JP Morgan which alleged the bank (and some of its subsidiaries) monopolized silver futures spread trading in late 2010 and early 2011.