Wednesday, April 29, 2009

Possible Rival Lacked Antitrust Standing to Sue Veterinary Products Maker

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

Antitrust claims against the dominant manufacturer and seller of veterinary diagnostic products in the United States, which were brought by a potential new entrant in the market, were properly dismissed because the complaining company lacked standing to bring the claims, the U.S. Court of Appeals in San Francisco has ruled.

Summary judgment in favor of the defending manufacturer (2008-1 Trade Cases ¶76,078) was affirmed by a not-for-publication decision.

Antitrust Injury

In order to establish antitrust standing, a plaintiff must adequately allege and prove antitrust injury, the court explained. Only an actual competitor or one ready to be a competitor can suffer antitrust injury.

Intent, Preparedness to Enter Market

The complaining company failed to show that it had a genuine intent to enter the market and a preparedness to do so, the court ruled. The company had meager background or experience in the animal testing services industry. Its founder and chief executive officer had no background education or experience in molecular diagnostic testing, or in the relevant science, technology, and business generally.

Moreover, the complaining company operated through a skeleton crew of part-time outside consultants who lacked any background or experience in the prospective business. It had taken only preliminary steps to engage in its proposed business.The company submitted no specific evidence of its ability to finance its nascent enterprise.

Absence of Contracts

There was no evidence of consummated contracts between the company and distributors or end-users and no evidence of other types of contracts that one might expect from a business that was ready to enter the marketplace, in the court’s view.

The not-for-publication decision in Cyntegra, Inc.v. Idexx Laboratories, Inc. appears at 2009-1 Trade Cases ¶76,574.

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