ORIGINAL UNITED STATES OF AMERICA 

BEFORE THE FEDERAL TRADE COMMISSION 

COMMISSIONERS:	 Wiliam E. Kovacic, Chairman
 

Pamela Jones Harbour
 

Jon Leibowitz
 

J. Thomas Rosch 

) In the Matter of )
 

) Docket No. 9327
 

Polypore International, Inc.,
 

a corporation.	 )

) PUBLIC DOCUMENT 

) 

ANSWER AND DEFENSES 

OF RESPONDENT POLYPORE INTERNATIONAL. INC. 

Pursuant to 16 C.F.R. § 3.12, Respondent Polypore International, Inc. ("Polypore"), by its 

attorneys, Parker Poe Adams & Bernstein LLP, answers the allegations of 
 the Complaint fied by 

the Federal Trade Commission ("FTC") as follows: 

COMPLAINT 

Pursuant to the provisions of 
 the Federal Trade Commission Act and of 
 the Clayton Act, and by virtue of the authority vested in it by said Acts, the Federal Trade Commission (the
 

"Commission"), having reason to believe that respondent Polypore International, Inc.
 

("Daramic"), a Delaware corporation subject to the jurisdiction of the Commission having its
 

principal place of 
 business in Nort Carolina, entered into an agreement, in violation of 
 Section 5
 

of the Federal Trade Commission Act, as amended, 15 D.S.C. § 45, pursuant to which Daramic 

purchased 100 percent of the stock of Microporous Holding Corporation, the parent company of 

Microporous Products L.P. ("Microporous"), headquarered in Piney Flats, Tennessee, from 

Industrial Growth Parers II L.P. ("IGP") and other stockholders in violation of Section 5 of 
 the Federal Trade Commission Act, as amended, 15 D.S.C. § 45, and Section 7 of 
 the Clayton Act, 

as amended, 15 D.S.C. § 18, and through conduct and agreements Daramic monopolized the
 

Nort American markets for deep-cycle, motive and DPS battery separators and otherwise 

restrained trade significantly in the North American automotive separators market, and it 

appearing to the Commission that a proceeding in respect thereof would be in the public interest, 

hereby issues its Complaint, stating and charges as follows: 

ANSWER: This paragraph is a mere characterization of the complaint to which no 

responsive pleading is required. To the extent that a response to this paragraph is deemed 

necessary, Respondent admits that it has its principal place of 
 business in North Carolina and that 

PP AB 1482368v3 
Microporous was headquarered in Piney Flats, IN. Respondent also admits that in Februar 

2008 Daramic Acquisition Corporation, a subsidiar of Respondent, acquired 100% of the 

outstanding stock of Microporous Holdings Corporation, the parent company of Microporous, 

from Industral Growth Parners II L.P. ("IGP") and other stockholders. Respondent denies the 

remaining allegations in this paragraph. 

I. RESPONDENT
 

1. Respondent Daramic manufactures a broad range of high-performance battery separator
 

membranes. DaramIc today develops, markets, and supplies more than 50 percent of 


the world's demand for high pedormance polyethylene ("PE") battery separators to the flooded lead-acid 

battery industry. Daramic operates 6 manufacturing facilities with a combined anual capacity 

of approximately 600 milion square meters of battery separator products. In the United States, 

Daramic has manufactuing plants in Owensboro, Kentucky and Corydon, Indiana. Daramic 

also has facilities in Selestat, France; Nordestedt, Germany; Potenza, Italy; a controllng interest 

in a joint venture with Nippon Sheet Glass located in Tianjin, China, and a newly expanded 

operation in Prachinburi, Thailand. With the acquisition of Microporous, Daramic also adds 

production lines in Piney Flats, Tennessee and Feistritz, Austria. 

ANSWER: Respondent Polypore admits that it develops, manufactures and markets 

battery separators, including PE separators, in a global market. Respondent fuher admits that it 

has manufacturing plants in Owensboro, Kentucky and Corydon, Indiana, and also has facilities 

in Selestat, France; Nordestedt, Germany; Potenza, Italy; and Prachinburi, Thailand. Polyp 


ore 

also admits that Daramic Acquisition Corporation's acquisition of Microporous Holdings 

Corporation, the parent company of Microporous, from IGP and other stockholders resulted in 

additional production lines in Piney Flats, Tennessee and Feistritz, Austria. Except as stated 

above, Polypore denies the allegations of 
 Paragraph 1. 

2. The former Microporous was headquarered in Piney Flats, Tennessee, with
 

manufacturing facilities in both Tennessee and Austria. Microporous had 170 employees, and 

had $37 milion in sales in 2007. Before it was acquired by Daramic, Microporous was owned 

by IGP, a private equity firm. Microporous' latest products included rubber separators, PE-


rubber separators, and PE separators. These products are stil produced in a 30,000 square-foot 

plant in Piney Flats, IN. Microporous had completed an expansion with a new Greenfield plant 

in Austria, consisting of two lines, one producing a PE-rubber separator and one a PE separator 

(although both lines can produce either product). These lines are now in full commercial
 

production under DaramIc's control. 

2 PP AB 1482368v3 
ANSWER: Respondent admits that until Februar 2008, Microporous Products L.P. 

was owned by IGP, a private equity firm, and was headquarered in Piney Flats, Tennessee with 

a manufacturing facilty in Tennessee. Polypore further admits that Microporous was in the
 

process of expanding its manufactuing facilties through a Greenfield expansion in Austria, 

which would add two lines for PE production. Except as stated above, Polypore denies the 

allegations of 
 Paragraph 2. 

II. JURISDICTION
 

3. Daramic is, and at all times relevant herein, has been engaged in "commerce" as defined 

in Section 1 of the Clayton Act, as amended, 15 U.S.c. § 12, and is a corporation whose
 

businesses are in or affect "commerce" as defined in Section 4 of 
 the Federal Trade Commission 

Act, as amended, 15 U.S.C. § 44. 

ANSWER: Polypore admits the allegations of 
 Paragraph 3. 

III. THE TRANSACTION
 

4. On February 29, 2008, Daramic acquired, pursuant to an agreement with Microporous,
 

IGP and other stockholders, 100 percent of 
 the stock of 
 Microporous Holdings Corporation, the parent company of 
 Microporous Products L.P. (Microporous), from Industrial Growth Parers II 

L.P. and other stockholders for approximately $76 milion. 

ANSWER: Polyp ore admits that on February 29, 2008, Daramic Acquisition 

Corporation, a subsidiar of Respondent Polypore, acquired 100 percent of the stock of
 

Microporous pursuant to an agreement with IGP and other stockholders for approximately $76 

milion, including assumed debt. Except as stated above, Polypore denies the allegations of 

Paragraph 4. 

IV. RELEVANT PRODUCT MARKTS
 

5. The relevant product areas in which to analyze the transaction are separators for flooded
 

lead-acid batteries in the following markets: 

(a) deep-cycle;
 

(b) motive;
 

(c) automotive;
 

3 

PPAB 1482368v3 
(d) uninterrptible power supply stationar ("UPS")
 

ANSWER: Polypore denies each and every allegation of Paragraph 5, including each 

subpar thereof. 

6. Alternatively, another market in which the transaction violates the antitrust laws is an all
 

PE separator market. 

ANSWER: Polypore denies the allegations of Paragraph 6. 

7. Battery separators are porous electrical insulators placed between positively and
 

negatively charged lead plates in flooded lead-acid batteries to prevent electrcal short circuits 

while allowing ionic curent to flow through the separators. 

ANSWER: Polypore admits that battery separators are porous electrcal insulators 

placed between two plates of opposing polarity in batteries to prevent electrical short circuits 

while allowing ionic curent to flow through the separators. Except as stated above, Polypore
 

denies the allegations of Paragraph 7. 

8. Deep-cycle separators are made of either rubber or a blend of rubber and PE and are a
 

necessary component that enables deep-cycle batteries to be frequently exhausted then recharged 

again. Deep-cycle separators are primarily used in golf car and floor scrubber batteries. 

ANSWER: Polypore admits that so called "deep-cycle" batteries regularly discharge 

to up to 80 percent of their capacity before recharging and are designed to deliver a consistent 

voltage as the battery discharges. Polypore fuher admits that separators used in "deep-cycle"
 

applications can be made of rubber, PE, a blend of rubber and PE, and other materials, including 

AGM. Polypore fuher admits that deep-cycle batteries are used in golf cars and floor 

scrubbers. Except as stated above, Polypore denies the allegations of Paragraph 8. 

9. Motive separators are made ofPE, a blend of 
 rubber and PE, or sometimes PVC, and are primarly used in forklift batteries. 

ANSWER: Polypore admits that separators used in motive applications can be made 

of PE, a blend of rubber and PE, PVC, or other materials, including AGM. Polypore also admits 

4 PPAB 1482368v3 
that, among other applications, motive batteries can be used in forklifts. Except as stated above, 

Polypore denies the allegations of Paragraph 9. 

10. Automotive separators are made ofPE and are used in cars for starer, lighter and ignition 

("SLI") power. While Microporous has made and can make PE for this application, its 

CellForce, a blend of rubber and PE, is a potential substitute. 

ANSWER: Polypore admits that automotive batteries are used in cars for staring, 

lighting and ignition ("SLI") power and are designed for shallow-cycle operations. Polypore 

fuher admits that separators used in automotive applications can be made of PE, a blend of
 

rubber and PE, PVC, or other materials, including AGM. Except as stated above, Polypore 

denies the allegations of Paragraph 10. 

11. UPS separators are made of PE, and a blend of rubber and PE. These separators are used 

in batteries for the uninterrptible power supply market that supply short term power to critical 

data centers and buildings in the event of a power outage. 

ANSWER: Polypore admits that uninterrptible power supply ("UPS") batteries are used 

to supply short term power in the event of power outages. Polypore also admits that separators 

used in UPS applications can be made of PE, a blend of rubber and PE, and other materials, 

including AGM. Except as stated above, Polypore denies the allegations of Paragraph 11. 

12. PE separators are made of either pure PE or a blend of PE and rubber. Manufactuers of 

PE separators for UPS, motive, or deep-cycle applications can easily and quickly switch 

production to automotive separators. Conversely, there are signficant barers to switching PE 

production to UPS, motive or deep-cycle applications. 

ANSWER: Polypore admits that PE separators can be made from pure PE or a blend 

ofPE and rubber. Except as stated above, Polypore denies the allegations of 
 Paragraph 12. 

13. Battery separators manufactured for a paricular application canot be effectively used
 

for other applications. 

ANSWER: Polypore denies the allegations of 
 Paragraph 13. 

5 

PPAB 1482368v3 
V. RELEVANT GEOGRAPHIC MARKT
 

14. The relevant geographic market in which to analyze the effects of this transaction is 

North America. 

ANSWER: Polypore denies the allegations of Paragraph 14. 

15. There are only two other manufactuers of motive and UPS separators in the world of any
 

significance. Amer-Sil makes PVC separators in Europe and has negligible sales in Nort 

America. Nippon Sheet Glass makes PE motive separators in Japan, has no sales in North 

America, and has refused to sell any PE separators to North American customers. 

ANSWER: Polypore is without sufficient information to either admit or deny the 

allegations of Paragraph 15 as they relate to the sales and manufactung abilties of unelated 

companies. Tö the extent a response is required; Polypore denies the allegations of 


Paragraph 15. 

16. Producers of battery separators for motive, UPS, and automotive applications outside of
 

North America are at a cost disadvantage in the supply of these separators to North American 

customers. Producers outside of Nort America canot economically compete with Daramic in 

North America. 

ANSWER: Polypore denies the allegations of Paragraph 16. 

17. North American battery makers have a strong preference for their nearest source of 

supply and do not import separators from abroad. Long supply chain logistics increase the 

chances that a battery factory could be shut down if separators are not on hand when needed. 

Consequently, even if there were an otherwise viable alternative source of supply, Nort 

American battery manufactuers would strongly prefer domestic sources for separators. 

Moreover, PE separator manufactuers from abroad, such as Asia, wil not find it practical to 

compete in North America at either pre-merger or post-merger prices. 

ANSWER: Polyp ore denies the allegations of 
 Paragraph 17. 

VI. COMPETITION & CONCENTRATION
 

18. Each of the relevant product markets is highly concentrated in Nort America. 

ANSWER: Polypore denies the allegations of Paragraph 18. 

19. Since the acquisition of Microporous by Daramic, there are just two battery separator
 

companies that supply North America. Entek International LLC, the sole remaining competitor, 

operates only in the automotive market. 

ANSWER: Polypore denies the allegations of 
 Paragraph 19. 

6 PPAB 1482368v3 
20. Daramic and Microporous were competitors in each relevant market. Microporous, 

therefore, was uniquely situated to compete with Daramic for North American customers by 

virte of its location and breadth of product offerings.
 

ANSWER: Polypore denies the allegations of Paragraph 20. 

21. Daramic and Microporous were direct competitors in the deep-cycle market. There are 

no other deep-cycle battery separator competitors in the world. Prior to the transaction, 

Microporous had approximately 89 percent of the deep-cycle market, while Daramic had 

approximately 11 percent. Post-acquisition, Daramic has a monopoly in this market. 

ANSWER: Polypore denies the allegations of 
 Paragraph 21. 

22. Daramic and Microporous were direct competitors in the motive market. Microporous 

sold PE-rubber separators, while Daramc sold PE separators. Microporous and Daramic were 

the only competitors in motive separators in Nort America. Microporous had won 

approximately 46 percent of the motive separator contracts for 2009 in the Nort American 

market when it was acquired. 

ANSWER: Polypore admits that prior to the acquisition MIcroporous sold PE-rubber 

separators and Polypore sold PE separators and PE-rubber separators. Except as stated above, 

Polypore denies the allegations of Paragraph 22, including the characterization of a "motive 

market" as a distinct market. 

23. Daramic and Entek are direct competitors and the only companies curently sellng SLI 

battery separators in North America. In 2005, Microporous had produced PE separators for the 

automotive market. Although Microporous was not producing automotive separators at the time 

of the acquisition, it was preparng to compete actively in this market and was already marketing 

and testing its products with customers. 

ANSWER: Polypore admits that Polypore and Entek both sell SLI battery separators 

in North America. Polypore furter admits that Microporous had produced limited samples of
 

PE separators in 2003 or 2004, but has never commercially produced automotive separators
 

either before or at the time of the acquisition. Except as stated above, Polypore denies the
 

allegations of Paragraph 23, including the characterization of an "automotive market" as a 

distinct market. 

24. Daramic and Microporous sold separators in different segments of the UPS market. 

Microporous sold a rubber product to this market, while Daramic sells PE and phenolic resin 

separators. Microporous and Daramic were the only separator manufacturers selling into the 

7 PPAB 1482368v3 
Nort American UPS market. Microporous had developed a new product to compete directly 

with Daramic's PE and phenolic resin products and was testing its new product with customers 

at the time of the acquisition. 

ANSWER: Polypore admits that Polypore sells PE and phenolic resin separators for 

use in UPS applications, and Microporous sold rubber separators for use in UPS applications 

prior to the acquisition in Nort America and elsewhere in the world. Except as stated above, 

Polypore denies each and every allegation of Paragraph 24, including the characterization of a 

"UPS market" as a distinct market. 

25. Daramic, Entek and Microporous were the only manufactuers ofPE separators in North
 

America. While Microporous' share of 
 this market was small, its expansion in Europe had freed 

up additional U.S. capacity, which had previously been exported to Europe. Microporous also 

had plans to expand its Nort American PE capacity in 2008 and 2009. 

ANSWER: Polypore admits that Polypore and Entek manufactued PE separators and 

Microporous manufactued PE-rubber separators, and all three had manufacturng facilties both 

in the United States and elsewhere in the world. Except as stated above, Polypore denies each 

and every allegation of 
 Paragraph 25. 

26. In the end, Daramic's fundamental purose in acquiring Microporous was to restrain
 

competition uneasonably. The acquisition also allows Daramic to exert market power. 

ANSWER: Polypore denies the allegations of 
 Paragraph 26. 

VII. ACTUAL AND POTENTIAL COMPETITION
 

27. Microporous was entering the market for automotive separators prior to its acquisition by 

Daramic. Specifically, Microporous had signed a memorandum of understanding with an 

automotive battery manufactuer for the supply of its PE automotive separators to begin in 

Januar 2010. Microporous had already acquired the technology to make these separators, and 

its entry into the North American automotive separators market would have occurred but for the 

acquisition of Microporous by Daramic. In fact in 2005, Microporous had successfully
 

manufactured and sold PE automotive separators in North America. 

ANSWER: Polypore admits that Microporous signed a non-binding MOU with an 

automotive battery manufacturer and refers to the terms thereof. Except as stated above,
 

Polypore denies each and every allegations of Paragraph 27. 

8 

PPAB 1482368v3 
28. Alternatively, customers, competitors and other industry paricipants in automotive
 

separators perceived Microporous to be a uniquely positioned potential entrant that had a 

tempering, pro 
 competitive effect in the automotive separator market. 

ANSWER: Polypore is without sufficient information to either admit or deny the 

allegations of Paragraph 28 as they relate to the perceptions of unrelated companes, customers 

and undentified "industr paricipants." To the extent a response is required, Polypore denies
 

the allegations of Paragraph 28. 

29. The acquisition hars the market for automotive separators in North America by
 

eliminating Microporous as a futue source of separators for automotive lead-acid batteries. 

ANSWER: Polypore denies the allegations of 
 Paragraph 29. 

30. Microporous had also developed a new separator that would directly compete with 

Daramic's separators for the UPS market in which Daramic was the predominant supplier. A 

major customer has been testing this new product and had contracted with Microporous for the 

supply of this product. Microporous had secured significant market share as a result of this 

contract. 

ANSWER: Polyp ore denies the allegations of 
 Paragraph 30. 

31. The acquisition hars the market for UPS battery separators by eliminating this 

competition. 

ANSWER: Polypore denies the allegations of 
 Paragraph 31. 

VIII. ENTRY 

32. Entr into each relevant product markets (sic) would not be timely, likely or suffcient in
 

its magntude scope, or character to deter or counteract the anti 
 competitive effects arsing from this acquisition. 

ANSWER: Polypore denies the allegations of 
 Paragraph 32. 

33. Testing and qualification present a significant barrier to entry. The testing 'required by 

U.S. battery manufacturers is comprehensive and lengthy. Because the individual battery makers 

often have their own design and testing requirements, there are no one-size- fits-all separators that 

can be used from one customer to the next without appropriate testing. This means that even an 

incumbent in the battery separator market would have to submit its product to testing, lasting 

from a few months to more than two years, before it could be qualified by an additional battery 

manufacturer. 

ANSWER: Polypore denies the allegations of 
 Paragraph 33. 

9 

PPAB 1482368v3 
34. Reputation presents a significant barier to entry. The original equipment manufacturers
 

that buy batteries from the customers of Daramic and Microporous demand waranties from the 

battery makers. Battery manufactuers are reluctant to seek supply from an unown separator 

manufactuer because the quality of the battery is largely dependent on the quality of the 

separators. A new entrant into the market for flooded lead-acid battery separators would have to 

overcome the obstacle of convincing battery makers that its product is reliable and wil be 

available when and where promised. 

ANSWER: Polypore denies the allegations of Paragraph 34. 

35. A new entrant into any of the relevant markets would lack Microporous' reputation for 

sound quality and timely delivery. Although gaining such a reputation is possible over time, it 

could not reasonably be obtained within two years. .
 

ANSWER: Polypore denies the allegations of 
 Paragraph 35. 

36. In addition, new entry into the relevant market is not likely due to the capital
 

requirements and intellectual property required to do so. 

ANSWER: Polypore denies the allegations of 
 Paragraph 36. 

37. Even the most likely future entrant would not successfully, or in a timely manner, enter 

any of 
 the relevant markets within two years. Nor would any potential entrant replace the loss of 

Microporous' wilingness, ability, and incentive to enter the automotive or UPS flooded leadacid battery separator markets. 

ANSWER: Polypore denies the allegations of 
 Paragraph 37. 

ix. ANTICOMPETITIVE EFFECTS
 

38. The acquisition and Daramic's conduct substantially lessened competition II the 

following ways: 

a. it has eliminated actual, actual potential, and perceived potential competition
 

between Daramic and Microporous as well as other potential competition such as Hollngswort
 

& V ose ("H& V");
 

b. it removes Microporous, the only alternative source of separator supply in the
 

deep-cycle, motive and UPS markets; 

c. it creates a monopoly in deep-cycle and motive markets and increases the level of
 

concentration in the automotive market; 

d. it has led and wil lead to increased prices for the relevant products; 

e. it increases Daramic's market power in the deep-cycle, motive and automotive 

markets; 

10 PPAB 1482368v3 
f. it allows Daramic to unilaterally exercise its market power II the relevant 

markets; 

g. it removes a rapidly expanding actual, actual potential, or perceived potential
 

competitor in the automotive market; and 

h. it makes coordination more likely in the automotive market.
 

ANSWER: Polyp ore denies each and every allegation of 
 Paragraph 38, including each 

subpar thereof. 

X. MONOPOLIZATION
 

39. Prior to the acquisition identified in Paragraph 1 above, Daramic attempted though
 

anti competitive means to maintain monopoly power against a challenge from Microporous in the 

markets for (1) deep-cycle battery separators; (2) motive battery separators; (3) automotive 

battery separators; and (4) UPS battery separators; or alternatively all PE separators. 

ANSWER: Polypore denies the allegations of 
 Paragraph 39. 

40. During 2006-2007, while negotiating contractual terms with certain large customers, 

Daramic imposed conditions on the availability of its products that tended to exclude rivals and 

har the competitive process. Daramic threatened to withhold volumes of separators requested
 

by certain customers to pressure them to enter exclusive supply agreements with Daramic, and 

thereby foreclose Microporous from expanding its business with those customers. 

ANSWER: Polyp ore denies the allegations of 
 Paragraph 40. 

41. In addition, Daramic has entered into an ilegal agreement to prevent entry from another
 

potential competitor, H&V, and attempted to do the same with Microporous. 

ANSWER: Polypore denies the allegations of Paragraph 41. 

42. In automotive, motive, UPS and all PE markets Daramic has historically maintained
 

monopoly power. 

ANSWER: Polypore denies the allegations of Paragraph 42, including the 

characterization of "automotive, motive, UPS and all PE markets" as distinct and proper markets. 

43. In supplying these relevant markets, Daramic's remaining rival, Entek, is capacity
 

constrained. Furthermore, high entry barriers make it unlikely that any new entrant could 

constrain the exercise ofDaramic's monopoly power in any of 


the relevant products. 

ANSWER: Polypore denies the allegations of 
 Paragraph 43. 

11 PP AB 1482368v3 
44. The conduct described above cared the dangerous probabilty that, if successful, it 

would give Daramic the abilty to lessen or destroy competition in the Nort American market 

for PE separators. Daramic' s coercive bargaining tactics posed a threat to the viabilty of
 

Microporous and a significant theat to competition generally in the relevant markets. 

ANSWER: Polypore denies the allegations of 
 Paragraph 44. 

45. Daramic has the market/monopoly power to exclude competition and/or increase prices 

and reduce innovation and has ilegally and wrongfully maintained its market power. 

ANSWER: Polypore denies the allegations of 
 Paragraph 45. 

46. Daramc engaged in the conduct described above to preclude or deter Microporous from 

expanding or otherwse achieving sufficient scale, and thereby destroy competition and increase 

its market dominance. 

ANSWER: Polypore denies the allegations of 
 Paragraph 46. 

XI. UNFAIR METHODS OF COMPETITION
 

47. Daramic entered into a 
 joint marketing agreement in 2001 with Hollngsworth & Vose, a firm that manufactures absorbed-glass-mat battery separators, in order to prevent them from 

entering the PE separator market. This agreement is, at a minimum, an overbroad agreement in 

restraint of trade, and may be an ilegal market allocation agreement that is not justified by any 

legitimate business purpose. 

ANSWER: Polypore denies the allegations of 
 Paragraph 47. 

XII. VIOLATIONS
 

COUNT I - ILLEGAL ACQUISITION 

48. The allegations contained in Paragraphs 1-47 are repeated and realleged as though fully 

set out here. 

ANSWER: Polypore repeats its responses to the allegations contained in Paragraphs 

1-47 and realleges them as if fully set out here. 

49. The effect of the Acquisition may be substantially to lessen competition or tend to create 

a monopoly in violation of Section 7 of the Clayton Act, 15 U.S.C. § 18, and Section 5 of the 

Federal Trade Commission Act, 15 U.S.C. § 45. 

ANSWER: Polypore denies the allegations of 
 Paragraph 49. 

12 PPAB 1482368v3 
COUNT II - UNFAIR METHOD OF COMPETITION
 

50. The allegations contained in Paragraphs 1-47 are repeated and realleged as though fully 

set out here. 

ANSWER: Polypore repeats its responses to the allegations contained in Paragraphs 

1-47 and realleges them as if fully set out here. 

51. Daramic has, through the acquisition of Microporous, and the other conduct alleged 

herein, engaged in unfair methods of competition in or affecting commerce in violation of 

Section 5 of 
 the Federal Trade Commission Act, 15 U.S.C. § 45. 

ANSWER: Polypore denies the allegations of Paragraph 51. 

COUNT III - MONOPOLIZATION 

52. The allegations contained in Paragraphs 1-47 are repeated and realleged as though fully 

set out here. 

ANSWER: Polypore repeats its responses to the allegations contained in Paragraphs 

1-47 and realleges them as if fully set out here. 

53. Daramic has, though the acquisition of Microporous, and the other conduct alleged 

herein, engaged in unfair methods of competition in or affecting commerce in violation of 

Section 5 of 
 the Federal Trade Commission Act, 15 U.S.C. § 45. 

ANSWER: Polypore denies the allegations of 
 Paragraph 53. 

NOTICE AND NOTICE OF CONTEMPLATED RELIEF 

Ths section does not contain any factual averments; therefore it does not require any 

response, except that Polypore denies that the Commission is entitled to any relief as set forth in 

more detail herein. 

AFFIRMTIVE DEFENSES
 

Without assuming any burden that it would not otherwise bear, Respondent Polypore 

asserts the following affirmative defenses: 

13 

PPAB 1482368v3 
FIRST AFFIRMATIVE DEFENSE
 

The Complaint, in whole or in par, fails to state a claim upon which relief can be 

granted. 

SECOND AFFIRMTIVE DEFENSE
 

The acquisition is a pro-competitive response to market dynamics and will result in 

substantial merger-specific efficiencies in the manufacture, distrbution and sale of battery 

separators that far outweigh any alleged anticompetitive effects and, as a result, wil benefit
 

consumers. 

THIRD AFFIRMATIVE DEFENSE 

The alleged relevant product and geographic market definitions fail as a matter of law. 

FOURTH AFFIRMTIVE DEFENSE
 

The complaint fails to comply with the requirements of 


Section 5(b) of the Federal Trade 

Commission Act, 15 U.S.C. § 45(b), because the issuance of 
 the complaint and the relief sought 

are not in the public interest. 

FIFTH AFFIRMTIVE DEFENSE 

Polypore has not knowingly or intentionally waived any applicable affirmative defenses. 

Polypore presently lacks sufficient knowledge or information on which to form a belief as to 

whether it may have available additional, as yet unstated, affirmative defenses, and reserves the 

right to assert such additional defenses. 

WHEREFORE, Polypore respectfully requests that the Commission: 

(i) dismiss the complaint in its entirety with prejudice;
 

(ii) award Polypore its costs of suit, including attorneys' fees; and 

(iii) award such other or further relief as the Commission may deem just and proper.
 

14 

PPAB 1482368v3 
Dated: October 15,2008 Respectfully Submitted, 

Wiliam L. Rikard, Jr. 

Eric D. Welsh 

PARR POE ADAMS & BERNST
 

Three Wachovia Center 

401 South Tryon Street, Suite 3000 

Charlotte, NC 28202 

Telephone: (704) 372-9000 

Facsimile: (704) 335-9689 

willamkardtÉparkerpoe.com 

ericwelshtÉparkerpoe.com 

John F. Graybeal 

PARKR POE ADAMS & BERNSTEIN LLP 

150 Fayettevile Street 

Raleigh, NC 27602 

Telephone: (919) 835-4599 

Facsimile: (919) 828-0564 

j ohngraybealtÉparkerpoe.com 

Attorneys for Respondent 

15 

PPAB 1482368v3 
CERTIFICATE OF SERVICE 

I hereby certify that on October 15, 2008, I caused to be fied via hand delivery and 

electronic mail delivery an original and two copies of the foregoing Answer and Defenses of 

Respondent Polypore International, Inc., and that the electronic copy is a true and correct copy 

of the paper original and that a paper copy with an original signatue is being filed on the same 

day by other means with: 

Donald S. Clark, Secretar 

Office of the Secretar 

Federal Trade Commission 

600 Pennsylvania Avenue, NW, Rm. H-135 

Washington, DC 20580 

secretartÉftc.gov 

I hereby certify that on October 15, 2008, I served one copy via hand delivery and two 

copies via overnight mail delivery of the foregoing Answer and Defenses of Respondent 

Polypore International, Inc. with: 

The Honorable D. Michael Chappell 

Administrative Law Judge 

Federal Trade Commission 

600 Pennsylvana Avenue, NW 

Washington, DC 20580 

I hereby certify that on October 15, 2008, I served via first-class mail delivery and 

electronic mail delivery a copy of the foregoing Answer and Defenses of Respondent Polypore 

International, Inc. with: 

J. Robert Robertson, Esq. Steven Dah, Esq. 

Federal Trade Commission Federal Trade Commission 

600 Pennsylvania Avenue, NW 600 Pennsylvana Avenue, NW 

Washington, DC 20580 

rrobertsontÉftc.gov 

Washington, DC 20580

sdahtÉftc.gov

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Adam C. Shearer 

Parker Poe Adams & Bernstein LLP 

Three Wachovia Center 

401 South Tryon Street, Suite 3000 

Charlotte, NC 28202 

Telephone: (704) 335-9050 

Facsimile: (704) 334-4706 

PPAB 1482368v3