The Senate Judiciary Committee has voted to overturn the Supreme Court decision that gave the green light to resale price maintenance.

The Committee has passed S. 148, the “Discount Pricing Consumer Protection Act.”  This bill would reverse the Supreme Court’s decision in Leegin Creative Leather Products, Inc. v. PSKS, Inc., 551 U.S. 887 (2007).  Leegin overruled a 1911 Supreme Court decision holding that resale price maintenance was per se illegal.

Under Leegin, resale price maintenance is judged under the rule of reason.  Under S. 148, resale price maintenance would again be treated as a per se violation.   

A link to the archived webcast of the Senate Judiciary Committee’s markup can be found here. 

On January 13, 2010, the House Judiciary Committee passed similar legislation, H.R. 3190, by voice vote.  

A link to the archived webcast of the House Judiciary Committee’s markup can be found here.  At this time neither the House nor the Senate has scheduled floor action on the respective bills. 

For further information on Leegin repeal legislation, see our earlier posts.

Will a federal court of appeals send modern antitrust analysis diving into the deep end of a patent pool case to determine whether a jointly-developed standard should be considered patent misuse?

On March 3, the U.S. Court of Appeals for the Federal Circuit sat en banc to consider how to apply the patent misuse doctrine to patent pooling arrangements for standardized technologies, including the significance of evidence of anticompetitive effects such as the blocking the development of new technologies.

At issue in Princo v. U.S. International Trade Commission is whether it was patent misuse for a patent pool established by Philips, Sony and others to both include a potentially blocking patent that was not actually used in the standard and preclude that patent from being licensed outside the pool. 

Philips and Sony agreed to jointly develop a standard for recordable and rewritable compact discs (known as the “Orange Book”).  In developing the standard, they did not jointly develop any technology.  Rather, they used technologies each independently had developed.  In one instance, they chose one of two competing methods.  The Sony patent not chosen was, by some accounts, not commercially feasible.  However, an independent patent analyst believed one claim of the Sony patent could read more generally on the standard and, thus, block Orange Book adopters from practicing the standard.  Therefore, Philips determined to include the Sony patent in the pool, and subjected Sony to the pool’s requirement not to license the patent for use outside the Orange Book standard. click here for more »

While consideration of health care may be dominating the halls of Congress, state officials are reminding health insurers that the Feds don’t have a monopoly in regulation.

Connecticut Attorney General Richard Blumenthal has announced that his office is investigating the merger of UnitedHealthcare and Health Net Inc.

UnitedHealthcare agreed in July to pay approximately $510 million to buy Health Net’s northeastern licensed subsidiaries.  As part of the deal, UnitedHealthcare agreed to buy the rights from Health Net to acquire its commercial members as they renew their coverage.  The deal was recently approved  by Thomas Sullivan, the Connecticut State Insurance Commissioner.

Health Net provides health benefits to approximately 6.6 million individuals across the United States.  It serves 578,000 members in New York, New Jersey and Connecticut and it is estimated that Health Net’s northeast operations have generated $2.7 billion in revenues for 2009.  

UnitedHealthcare provides health care benefits to 25 million consumers and has contracts with 600,000 physicians and over 5,000 hospitals and 60,000 pharmacies throughout the United States.

Blumenthal released a statement that the deal could violate antitrust laws and that “one of our concerns is whether the merger will cause excessive concentration in some segments of the health insurance market and thereby unlawfully restrain competition.” click here for more »

The chairman of the House Judiciary Committee, Rep. John Conyers (D.-Mich.), has announced that the Committee will meet to consider H.R. 3190 (the “Discount Pricing Consumer Protection Act of 2009”) tomorrow.  The bill would reverse the effects of the Supreme Court’s decision in Leegin Creative Leather Products, Inc. v. PSKS, Inc., 551 U.S. 887 (2007).  Leegin overruled a 1911 Supreme Court decision holding that resale price maintenance was per se illegal.  Under Leegin, resale price maintenance would be judged under the rule of reason. 

The notice of the markup can be found here.

The Committee’s Subcommittee on Courts and Competition Policy passed the bill by voice vote on July 30, 2009. 

For further information on the legislative history of the bill, see our earlier post here.

The outlook for regulatory action seemed to improve last year when the regulatory climate in Washington changed.  It now appears that the improved outlook may only have been illusory as the Government Accounting Office proves just as adept at punting as Congress.

As part of the Credit Card Accountability Responsibility and Disclosure Act (or “Credit CARD Act”) of 2009, Congress directed the GAO to study the issue.  At the time, cynics schooled in the ways of Washington saw the GAO study as a way to defer and ultimately postpone any serious action on this issue.  Based on the GAO’s recently disclosed report, they were right. 

The report begins with the entirely antiseptic title — Rising Interchange Fees Have Increased Costs for Merchants, but Options for Reducing Fees Pose Challenges — and then manages to go downhill from there.  The GAO identifies the real reasons why Congress (or the Federal Reserve) should take action regarding interchange: that the system reflects Visa and MasterCard’s market power over merchants; that interchange is not tethered to any efficiency rationale; and that it regressively imposes a hidden tax on all consumers, including the cash customer, while subsidizing the more affluent customers and their use of rewards cards.  And then it punts by making no real attempt to analyze these issues or address the serious ways they can be fixed. click here for more »