The AIPLA Antitrust News

A jury recently found that an accused patent infringer attempted to monopolize in a case where the alleged anticompetitive conduct included infringement. The verdict in Retractable Technologies, Inc. v. Becton Dickinson1 came after the district court's summary judgment holding that patent infringement could provide an anticompetitive conduct basis for an antitrust claim.2 According to the court, this was the first decision expressly holding that infringement could be an anticompetitive act for monopolization, but the decision was consistent with prior precedent. As a result, accused patent infringers may face additional allegations of antitrust violations based on their alleged patent infringement.

Alleged Anticompetitive Conduct

The patent owner plaintiff, Retractable Technologies (RT), sued the accused infringer, Becton Dickinson (BD), for allegedly infringing RT's patents on safety syringes, which are medical syringes in which the needle retracts. RT added claims of monopolization and attempted monopolization based on asserted patent infringement, exclusive dealing, bundling, false advertising, and other anticompetitive conduct, as well as other alleged torts.3 For example, RT alleged:

BD also combined these contracting practices with the offer of its infringing Integra syringes, compounding their effects with the tort of patent infringement that essentially allowed BD to say to customers: "We have a retractable syringe–no need to look at the VanishPoint®." This essentially allowed BD to use Retractable's own technology to make its market share discounting, rebates and bundling even more compelling and exclusionary.4

After an initial patent trial, the Federal Circuit upheld infringement of one of the patents.5 The case then proceeded to resolution of the antitrust claims and other alleged torts.

Summary Judgment Denied

To attempt to eliminate the infringement basis for the antitrust claim, BD sought partial summary judgment that, "as a matter of law, patent infringement is not anticompetitive conduct and, thus, cannot be the basis for a monopolization claim under Section 2 of the Sherman Act."6 The court, however, rejected BD's arguments that no court had previously found patent infringement to be an anticompetitive act for purposes of Sherman Act § 2, and that the courts that have considered similar antitrust claims based on infringement have denied them.7

The court cited no cases expressly holding that patent infringement either was or was not exclusionary conduct under Section 2. But, it explained citing Supreme Court precedent, "the Sherman Act covers 'every conceivable act which could possibly come within the spirit or purpose of the prohibitions of the law without regard to the garb in which such acts were clothed.'"8 The court noted that in the "vast majority of cases patent infringement might fail as an antitrust theory" because "it traditionally increases competition and benefits the end consumer despite its harm to a given competitor."9 However, the court pointed out that in this case the allegations were the opposite, that "BD used patent infringement to suppress, impede, and impair any rapid adoption of [retractable syringes] by purposefully keeping bad ones in the market."10

The court also did not accept BD's second argument, that other courts have denied similar claims. It reasoned that while an appellate court had said that patent infringement is not an injury to the public cognizable under the Sherman Act, that did not mean that patent infringement may never, as a matter of law, serve as anticompetitive conduct where there is injury to competition.11 The court also found as inapposite district court cases that turned on the specific pleadings.12

In the trial following the denial of BD's summary judgment motion, the jury found BD liable for attempted monopolization of the relevant market for safety syringes. It awarded damages of over $11 million.13

Conclusion

The decision in Retractable Technologies expressly rejected the argument that patent infringement cannot, as a matter of law, constitute anticompetitive conduct under the Sherman Act. In light of that decision and the subsequent jury verdict, alleged patent infringers must be especially cautious to ensure that their accused acts of infringement do not provide a basis for additional allegations of antitrust violations. This will especially be an issue for alleged infringers that have substantial market share.