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From Antitrust Law Daily, October 2, 2014

Attempted monopolization finding, $113.5M verdict against medical device maker stands

By Jeffrey May, J.D.

A jury’s finding that Becton, Dickinson and Company (BD) attempted to monopolize the safety syringe market and an award of over $113.5 million in damages to complaining rival Retractable Technologies, Inc. (RTI) will not be disturbed by the federal district court in Marshall, Texas. The jury’s determination that BD engaged in false advertising in violation of the Lanham Act also was reasonable and supported by substantial evidence. Therefore, BD's motion for judgment as a matter of law, or for new trial, was denied (Retractable Technologies, Inc. v. Becton, Dickinson and Co., September 30, 2014, Davis, L.).

There was ample evidence of BD's anticompetitive conduct to support the jury’s verdict on RTI's attempted monopolization claim, the court ruled. In addition, RTI proved the remaining elements of its attempted monopolization claim: (1) BD's specific intent to monopolize; (2) a dangerous probability of BD achieving monopoly power, and (3) injury to RTI's business or property caused by BD’s violation.

BD is a large medical supplier that manufactures and sells, among other things, safety syringe products and conventional syringe products. Safety syringes generally serve the same purpose as conventional syringes, but have various mechanisms to reduce the chance of accidental needlesticks. The needle retracts into the syringe following injection. RTI competes with BD in the safety syringe market by manufacturing and selling its VanishPoint safety syringe.

With respect to anticompetitive conduct, RTI presented sufficient evidence that BD “tainted” the segment of the market for retractable syringes by making and selling poorly-functioning retractable syringes, that BD infringed RTI's patents, and that BD made false statements about its products, such as its “World’s Sharpest Needle” claims. The court ruled that there was evidence that BD knowingly engaged in the challenged conduct. In addition, RTI presented evidence suggesting that BD deceived its customers through misleading contract terms and suppression of information about its safety syringes, according to the court. BD unsuccessfully argued that the false advertising and patent conduct could not, as a matter of law, ever constitute anticompetitive conduct.

The court also ruled that there was sufficient evidence to support the jury’s finding of specific intent and a dangerous probability of BD achieving monopoly power. Specific intent did not require a “smoking gun,” the court explained. The jury could infer specific intent to monopolize where, as here, the overall evidence logically and circumstantially led to that conclusion, according to the court.

Even though BD might have lost market share during the relevant time period, there was sufficient evidence for the jury to conclude that BD had a dangerous probability of success, the court decided. Expert testimony suggested that when paired with BD’s relatively high pricing in the safety syringe market, a very small decline of market share was probative of monopoly power or dangerous probability of achieving that power. The court noted that the jury's decision to reject separate monopolization claims suggesting that the jury considered the small decline in market share alleged by BD, but found that decline insufficient to defeat RTI’s claim of attempted monopolization. Further, “the presence and power of hospitals and their group purchasing organizations” did not negate BD’s dangerous probability of success.

Injury and damages. The evidence presented at trial was sufficient to show an antitrust injury and injury in fact to RTI that was attributable to BD. BD argued that RTI failed to show market harm because it only offered evidence of its own lost sales. However, this was an entirely logical way to show market harm, because BD and RTI were the only relevant retractable syringe manufacturers during the pertinent time period, in the court's view.

The court also rejected BD's challenge to the jury’s damages award. Having proved that BD caused damages to RTI, RTI needed only to provide a just and reasonable estimate of the damages. BD failed to convince the court that the “benchmark” analysis offered by RTI's expert was improper. The expert constructed a reasonable model to compare RTI’s actual performance to what its performance would have been but for BD’s anticompetitive conduct.

A remittitur was inappropriate because BD failed to show that the damages award exceeded the bounds of a reasonable recovery. The damages only pertained to the antitrust claim, because the jury was not asked for any relief with regard to the Lanham Act, the court explained.

False advertising. The court refused to set aside the jury’s finding that BD engaged in false advertising in violation of the Lanham Act regarding the amount of waste space in the needles and needle sharpness. RTI identified two allegedly false advertisements that were the subject of jury trial: (1) BD’s advertisements claiming RTI’s VanishPoint had 0.185 mL of waste space volume; and (2) BD’s advertisements claiming BD’s syringes as the “World’s Sharpest Needle.” According to the court, the evidence at trial showed that BD’s claims were objectively measurable, and that those objective measurements showed the claims to be literally false. RTI also produced evidence sufficient to support a conclusion that BD’s literally false claims were materially deceptive and injured RTI. In addition, the court ruled that the claims were not barred by the doctrine of res judicata or a release in an earlier lawsuit between the companies.

The case is Civil Action No. 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 Antitrust Advertising TexasNews

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