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From Antitrust Law Daily, November 12, 2014

$340M was sufficient disgorgement for attempted monopolization of safety syringes

By Greg Hammond, J.D.

A safety syringe manufacturer must pay $340 million in trebled damages, after a jury found it liable for attempting to monopolize the market for safety syringes through deception and for false advertising under the Lanham Act. The federal district court in Marshall, Texas partially granted motions to recover profits, for injunctive relief, and for attorney fees, ultimately finding that the trebled damages and partial injunctive relief were adequate compensation (Retractable Technologies, Inc. v. Becton, Dickinson and Co., November 10, 2014, Davis, L.).

Background. Becton, Dickinson and Co. (BD) is a large medical supplier that manufactures and sells safety syringe and conventional syringe products. Retractable Technologies, Inc. (RTI) competes with BD in the safety syringe market, and sued BD for antitrust violations and false advertising. Specifically, RTI asserted claims for—in part—attempted monopolization and false advertising under the Lanham Act.

Following an eight-day trial, a jury found BD liable for attempting to monopolize the safety syringe market, awarding RTI over $113 million in damages. The damages were then trebled under the Sherman and Clayton Acts to $340 million. In addition, BD was found liable for false advertising under the Lanham Act with regard to representations regarding waste space and the “World’s Sharpest Needle.” RTI filed three motions: (1) to recover BD’s profits; (2) for injunctive relief; and (3) for attorney fees.

Profits. RTI argued that BD should forfeit $260 million in alleged profits the company made on its syringe products, in addition to the $340 million in trebled damages. Conversely, BD argued that: (1) RTI failed to show BD’s profits were attributable to the two advertising claims at issue; (2) disgorgement of profits would not be appropriate under the equitable factors established by the Fifth Circuit; and (3) RTI miscalculated the amount of profits it requested.

However, the court determined that RTI met its burden of showing that BD gained profits through the use of false advertisements, often at the expense of RTI. In addition, it found that four factors (intent to deceive or confuse; diversion; unreasonable delay; and public interest) favored an accounting of profits. In calculating the profits, the court found that the $340 million in trebled damages was a sufficient disgorgement. Consequently, the court granted RTI’s request for an accounting of profits, but denied its request for an additional $260 million.

Injunctive relief. Injunctive relief was also deemed appropriate in this case, because damages alone could not make RTI whole or serve the public interest in fostering competition in the marketplace. Consequently, BD was prohibited from advertising that its safety syringes have the “World’s Sharpest Needle, or that its syringes save medication as compared to RTI’s syringes. In addition, BD must notify its customers that it wrongly or falsely claimed: its syringe needles were sharper than competitors’; it had “data on file” proving the sharpness claim; and that its syringes save medication as compared to RTI’s syringes.

Attorney fees. Lastly, the court found that attorney fees for antitrust claims were appropriate in this case, as they were mandatory under the Clayton Act. Consequently, given the close relationship between RTI’s prevailing antitrust claims and the claims in its original complaint, RTI was found entitled to fees for 50 percent of the time spent on prosecuting its antitrust claims from 2007 through post trial. However, RTI was not entitled to attorney fees for its Lanham Act claims.

The case number is 2:08-CV-16.

Attorneys: Bradley Carroll Weber (Locke Lord LLP) for Retractable Technologies, Inc. Robert A. Atkins (Paul Weiss Rifkind Wharton & Garrison) for Becton Dickinson and Co.

Companies: Retractable Technologies, Inc.; Becton, Dickinson and Co.

MainStory: TopStory Advertising Antitrust TexasNews

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