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Supreme Court hears antitrust case
Court Feed News | 2007/03/27 15:49
The US Supreme Court heard oral arguments Monday in the case of Leegin Creative Leather Products, Inc. v. PSKS, Inc., 06-480, in which a clothing manufacturer requests the Court to overrule a 1911 Supreme Court decision, Dr. Miles Medical Co. v. John D. Park & Sons Co. that held any minimum price agreement to be per se illegal and anti-competitive. In the present case, manufacturer Leegin ceased supplying goods to retailer PSKS after PSKS lowered its prices beneath the minimum set by the manufacturer. Leegin argued that such agreements foster competition among smaller retailers by preventing large retailers from setting extremely low and predatory prices. The trial court found that Leegin's actions violated the Sherman Antitrust Act and awarded PSKS treble damages. The US Court of Appeals for the Fifth Circuit affirmed the decision in favor of PSKS. Associate Justice Stephen Breyer speculated that dropping the per se rule would raise prices, while Associate Justice Antonin Scalia suggested that some consumers prefer to pay more in return for greater customer service.


High court takes up price-fixing case
Court Feed News | 2007/03/25 17:04

When a family-owned retailer in Texas lowered prices on women's fashion accessories, the manufacturer cut off the store's supply. Phil and Kay Smith sued and won in a case now before the Supreme Court that asks whether price-fixing always is illegal. Arguments before the justices were scheduled for Monday. The manufacturer, Leegin Creative Leather Products Inc. in City of Industry, Calif., is challenging a 1911 Supreme Court ruling that automatically classifies agreements to set minimum prices as anticompetitive.

Leegin says that by maintaining price consistency among niche retailers it sells to, stores can offer improved customer service. That, says the manufacturer, enables smaller stores to compete against rival brands sold by bigger cut-rate competitors.

At issue is whether price floors such as Leegin's always should be treated as illegal or evaluated case by case to see if they are pro-competitive.

The Smiths say they lowered prices by up to 20 percent because several other retailers selling Leegin's Brighton brand also were lowering prices. The Smiths say they and the competing stores were threatened by Leegin with being cut off unless they raised their prices again. Alone among the threatened stores, the Smiths refused to cave in.

"When Leegin stopped shipping to us, my wife and I lost half our business," Phil Smith said in an interview. "Kay and I are back to the same size store we started with 21 years ago."

Discounters and consumer groups say consumers will suffer if the Smiths lose.

"In the Internet age, this is a dagger at the heart of the most consumer-friendly environment we've seen in generations," said Mark Cooper, a spokesman for the Consumer Federation of America.

"Would there ever have been a Sears & Roebuck, an A&P, a Walgreens, a Kmart or a Wal-Mart" absent a ban on minimum pricing agreements? the federation asked in court papers filed in support of Kay's Kloset.

In Leegin v. Kay's Kloset, the Bush administration says it is inappropriate to automatically prohibit price floor agreements when they are not necessarily anticompetitive.

Thirty-seven state attorneys general oppose the administration.



Pfizer loses court ruling on Norvasc patent
Court Feed News | 2007/03/23 16:53

Pfizer Inc. said Thursday that a federal appeals court has overturned a lower court decision that upheld the patent protecting its widely-prescribed hypertension drug Novasc, a move that opens the door to early generic competition.

In a statement, Pfizer said the U.S. Court of Appeals for the Federal Circuit reversed a lower court ruling in favor of Pfizer, which found the Norvasc patent to be valid and enforceable. The appeal was brought by Apotex, which has been seeking to have the Pfizer patent nullified in order to put out a generic version of the drug.

Pfizer added that it is "reviewing the decision and is considering all its options, including seeking reconsideration."
Other generic drugmakers have also been seeking to put out generic versions of the drug, including Mylan Laboratories (MYL) . Norvasc is slated to lose patent protection later this year.

Prudential analyst Timothy Anderson said in his note Thursday that the appeals ruling could allow for the introduction of generic versions of Norvasc as soon as next week.

"We did not anticipate this ruling, but it will probably only have a muted impact on Pfizer which is already a washed-out, low valuation name," wrote Anderson.

"Earlier generic entry is a negative and could cost the company $1 billion in sales or so in 2007, but given Pfizer's size and cash generation this it not very material to the company's future outlook, in our opinion," Anderson added.



Court supports FCC in VoIP regulation
Court Feed News | 2007/03/22 16:17

A federal appeals court upheld a decision by the Federal Communications Commission that barred states from regulating Internet-based phone services, an Associated Press report said. The Associated Press report said a three-judge panel of the 8th Circuit Court of Appeals agreed with the FCC's determination in 2004 that companies like Vonage Holdings provide an interstate service that puts them outside state control.

Vonage uses VoIP, which involves converting the sound of a voice into packets of data and reassembling them into sound at the other end of the call. In 2003, Minnesota's Public Utilities Commission tried to register Vonage as a phone company, which would have subjected it to state tariffs and rate regulations, the report said. A federal judge barred Minnesota from doing so, and a year later at Vonage's request the FCC ruled that the company's services could not be regulated by the states.

Regulatory agencies in a number of states, including Minnesota, appealed that ruling, the report said. In the decision authored by Fargo, N.D.-based 8th Circuit Judge Kermit Bye, the court agreed with the FCC's determination that the nature of VoIP telephone calls allows customers to place "home" phone calls from nearly anywhere, irrespective of state lines, the report added.

When the FCC issued its ruling in 2004, officials with the agency indicated that they believed streamlined regulation was key to the growth of the fledgling industry.

The report further quoted Vonage CEO Mike Snyder as saying that the decision was good news for the company's 2.2 million subscribers.



US court rules Pringle chips are not satanic
Court Feed News | 2007/03/22 11:58

Pringles appear to be safe from demonic association after a US court ruled that the devil is not in league with global consumer brand Procter & Gamble (P&G). The ruling brought an end to a 12-year lawsuit purused by P&G against four distributors of rival Amway, over rumours tying P&G to Satanism

P&G won the $19M lawsuit when the court concluded that the four had spread a false accusation that P&G subsidised Satanic cults.

The rumour had proved popular with evangelicals in the US. During the 1960s, a story began circulating that the corporation was controlled by Satan worshipers. A moon-star symbol was used by the company on many of its products from 1882 to 1985, which was considered suspect.

The stars in fact stand for the thirteen original American colonies. But the arrangement of stars in the symbol was said to secretly spell out the Revelation 13:18 "number of the beast": 666.

Without examining the facts, many people, most notably evangelicals, signed petitions against Procter & Gamble and boycotted their products in the 1980s and 1990s.

This latest case is one of several unfair competition suits P&G has brought refuting the Satanism slurs.

According to P&G, the four distributors had passed on to customers the notion that its logo - featuring a bearded man looking over a field of 13 stars - was a symbol of Satan.

"This is about protecting our reputation," said Jim Johnson, P&G's chief legal officer.

Amway pointed out that it had successfully defended itself in an earlier case brought by P&G that had been connected with the rumours.

It had also, it said, done everything it could to get the rumour stamped out.



Supreme Court blocks Ohio execution
Court Feed News | 2007/03/22 02:17

The execution of a man who killed a woman and scattered her remains across two states was blocked Tuesday by the U.S. Supreme Court.

Inmate Kenneth Biros had waited for the decision hours past his 10 a.m. scheduled execution time at Ohio's death house.

Prisons director Terry Collins said the execution would not happen Tuesday.

The execution team had been waiting in a holding pattern while the court decided, ready to administer the lethal injection if the court had granted to the state's request to go ahead with the execution.

The justices' one-sentence decision agreed with two lower courts that had ruled to delay the execution, including the 6th U.S. Circuit Court of Appeals that refused earlier Tuesday to allow a hearing before the full court to consider a state appeal.



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