March 28, 2006

Antitrust Update: CAFA and Antitrust - A Mismatch?

In this issue of the Drinker Biddle & Reath Antitrust Update, we address the Court’s recent decisions in Texaco v. Dagher and Illinois Tool Works v. Independent Ink. As Bob Skitol explains, the Court in Dagher rescued a joint venture between Texaco and Shell from a holding of per se illegal price-fixing. In the process, the Court has removed some of the fog over the antitrust treatment of restraints within or upon horizontal joint ventures of many varieties. And as Ken Vorrasi and Paul Saint-Antoine explain in Independent Ink, the Court clarified the rules applicable to tying patents with products, holding that there should be no presumption of market power from intellectual property. Their article also addresses an important recent decision of the U.S. Court of Appeals for the Federal Circuit, Philips v. International Trade Commission, which distinguishes patent-to-patent ties from patent-to-product ties, or package licensing. The two decisions show that the courts will be more receptive to tying arrangements that are procompetitive, but also make clear that tying by firms with market power causing significant foreclosure of competition may still be condemned.

This issue also reviews the state of class action litigation in antitrust cases one year after adoption of the Class Action Fairness Act or "CAFA". The article by DB&R litigators Michael Daly, Alicia Hickok and Mark Sosnowsky summarizes key provisions in CAFA and their importance to antitrust class actions.

In an article by Joanne Lewers, we highlight important reforms to the Hart-Scott-Rodino review process recently announced by Federal Trade Commission Chairman Deborah Majoras. Mergers that are subject to a thorough review by the government face what are known as "Second Requests" or "Requests for Additional Information and Documentary Material" – which substantially delay consummation of transactions and impose huge costs on merging parties. As Joanne explains, the announced reforms are aimed at reducing the time and expense of compliance and reflect a serious agency effort to streamline the Second Request process. Most of the reforms require merging parties to cooperate with the government to reduce Second Request burdens, and so businesses will still need to work closely with counsel to navigate their way through the review process.

Finally, Bryan Sgrignoli highlights four new faces at the antitrust enforcement agencies: two new Commissioners and a new Bureau Director at the FTC, and a new Assistant Attorney General at the DOJ’s Antitrust Division.

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