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UNITED STATES OF AMERICA 511'195& 

BEFORE THE FEDERAL TRADE COMMISSION
 

In the Matter of
 )
 

) Docket No. 9327
 

)


Polypore International, Inc. ) PUBLIC
 

a corporation )
 

)
 

RESPONDENT'S RESPONSE TO INTERVENOR HOLLINGSWORTH & VOSE 

COMPANY'S BRIEF ON REMEDIES AFFECTING ITS CONTRACTUAL RIGHTS 

Respondent, Polypore International, Inc. ("Polypore"), respectfully submits this 

Memorandum in Response to Intervenor Hollngsworth & VoseCompany's Brief on Remedies 

Affecting its Contractual Rights and Proposed Findings of Fact. 

ARGUMENT 

In its brief and proposed findings of fact, Intervenor Hollngsworth & V ose Company 

("H& V") asserts to this Court the fundamental point that Respondent has advanced through its 

evidence at the hearing: the Cross Agency Agreement between Daramic and H&V (the 

"Agreement") was a proper, lawful agreement, serving legitimate business needs of both 

companies as they attempted to expand their sales of their respective products. As H& V itself 

notes: 

The Agreement provided that f 

L H&V FOF ii 3. 

H&V fuher notes: 

Since the cross-agency relationship would f 

PPAB 1615371vl 

., ., 
L H&V FOF ii 

6.1 

H&V's proposed findings demonstrate the propriety and validity of the Agreement and further 

undermine Complaint Counsel's claim that the Agreement "unlawflly restrained trade." 

Of course, H&V's ariculation of the purpose of the non-compete provisions in the 

Agreement is entirely consistent with the evidence advanced by Respondent during the hearing. 

Daramic's evidence showed that the Agreement was entered into for valid business purposes and 

in fact promoted the business of both companies. 

. The Agreement provided Daramic and H& V the platform to counter the allance
 

formed between Entek (one of Daramic' s competitors in PE) and Dumas (one of 

H&V's competitors in AGM). f 

(RFOF 1125). f 

l. (RFOF 1125). 

. The Agreement allowed Daramic the benefit of adding an AGM product to its
 

portfolio and allowed H&V access to PE technology. (RFOF 1124). f 

L (PX0917 (Cullen, Dep. at 90-91), in camera). 

. Additionally, the Agreement facilitated joint sales and promotional efforts which
 

were successful in opening doors in regions of the world where Daramic or H& V 

had little or no presence. (RFOF 1126). f 

l. (PX0917 (Cullen, Dep. at 77), in 

camera). As a result of Daramic's sales efforts in South America, f 

L (H&V FOF ii 10). 

· f 

l. (PX0917 (Cullen, Dep. at 86, 91), in camera). f 

l. 

(PX0917 (Cullen, Dep. at 86, 91), in camera). 

i These two reciprocal non-competition provisions are set forth in Sections 4(a) and 4(b) of 
 the Agreement. 

., 
. The Agreement faciltated joint efforts to better service existing customers in the 

United States. f 

) (PX0917 (Cullen, Dep. at 61-63), in camera). 

Specifically, f 

). 

(PX0917 (Cullen, Dep. at 63), in camera). f 

). (PX0917 (Cullen, Dep. at 65), in camera). f
 

). (PX0917 (Cullen, Dep. at 68), in
 

camera). 

. The Agreement also encouraged Daramic and H&V to explore joint research and
 

development opportunities, f 

). (RFOF 1127). 

And while H&V's findings and brief focus on the confidential information H&V shared 

with Daramic, the exchange of confidential information was certainly not a one-way street. 

Daramic also shared with H& V valuable confidential information f 

). (PX0917 (Cullen, Dep. at 90-91, 94-95), in 

camera). The exchange of this confidential information facilitated the joint activities, which 

included significant joint marketing and promotional efforts as well as joint exhibits at trade 

shows and conventions. (RFOF 1126). These efforts were successful in opening doors in regions 

of the world where Daramic or H&V had little or no presence. (RFOF 1126). As such, the 

agreement with its restrictions is proper. See e.g. Universal Studios Inc. v. Viacom, Inc., 705 

A.2d 579 (DeL. Ch. 1997) (finding a non-compete provision in a joint venture agreement 

enforceable); Piercing Pagoda, Inc. v. Hoffner, 351 A.2d 207 (Pa. 1975) (finding a non-compete 

provision in a franchise agreement enforceable). 

As the evidence from both Daramic and H& V proves, the Agreement was a reasonable 

means of facilitating joint sales efforts and product development efforts between Daramic and 

H&V and had neither the intent not the effect of either eliminating or restraining competition 

between the two companies. Indeed, as the evidence demonstrates, Daramic had no plans to 
produce AGM separators and f L when the parties
 

entered into the Agreement. (PX0925 (Porter, Dep. at 39), in camera; PX0200). Complaint 

Counsel's claim that the Agreement "unlawflly restrained trade" is based entirely on 

supposition, not fact, and is without merit. This Cour should find for Respondent and against 

Complaint Counsel on Counts n and in of the Complaint. 

Respondent submits the Agreement is lawfl and was entered into for a valid business 

purpose, which the evidence amply supports. Respondent implores this Court not to eliminate 

parties' continuing obligations designed to protect against the use of the shared confidential
 

information. Should the Cour, however, find the Agreement to be an unlawfl restraint of 
 trade, 

Respondent respectfully submits that the Agreement must be considered a nullty and the parties 

must both be relieved of 
 their obligations under sections 4(a) and 4(b). While H&V requests that 

the Court only nullfy the limitations imposed on H& V under Section 4(b), Respondent has 

found no case law or authority supporting such a piecemeal remedy, and H&V has cited none. 

Again, Respondent submits that the Agreement is proper but if this Cour finds that not to be the 

case, then the Agreement as a whole must fall. 

CONCLUSION 

Respondent respectfully submits for the reasons previously stated that this Court find the 

Agreement to be valid and enforceable. Respondent further submits that should this Court find 

otherwise, that this Court nullfy the Agreement in its entirety. 
Dated: October 9, 2009 Respectfully Submitted, 

ci?J tuA.
 

Wiliam L. Rikard, Jr. 

Eric D . Welsh 

PARKR POE ADAMS & BERNSTEIN, LLP 

Three Wachovia Center 

401 South Tryon Street, Suite 3000 

Charlotte, NC 28202 

Telephone: (704) 372-9000 

Facsimile: (704) 335-9689 

wiliamrikardêparkerpoe.com 

ericwelshêparkerpoe.com 

John F. Graybeal 

PARKR POE ADAMS & BERNSTEIN, LLP 

150 Fayettevile Street 

Raleigh, NC 27602 

Telephone: (919) 835-4599 

Facsimile: (919) 828-0564 

johngraybealêparkerpoe.com 

Attorneys for Respondent 
CERTIFICATE OF SERVICE 

I hereby certify that on October 9, 2009, I caused to be filed via hand delivery and 

electronic mail delivery an original and two copies of the foregoing Respondent's Response to 

Intervenor Hollngsworth & Vose Company's (H& V), Brief on Remedies Affecting its 

Contractual Rights (Public), and that the electronic copy is a true and correct copy of 
 the paper 

original and that a paper copy with an original signature is being fied with: 

Donald S. Clark, Secretary 

Office of the Secretary 

Federal Trade Commission 

600 Pennsylvania Avenue, NW, Rm. H-135 

Washington, DC 20580 

secretaryêftc. gov 

I hereby certify that on October 9, 2009, I caused to be served one copy via electronic 

mail delivery and two copies via overnight delivery of the foregoing Respondent's Response to 

Intervenor Hollngsworth & Vose Company's (H& V), Brief on Remedies Affecting its 

Contractual Rights (Public) upon:
 

The Honorable D. Michael Chappell 

Administrative Law Judge 

Federal Trade Commission 

600 Pennsylvania Avenue, NW 

Washington, DC 20580 

oaljêftc.gov 

I hereby certify that on October 9,2009, I caused to be served via electronic mail delivery 

and one copy via First Class mail delivery a copy of the foregoing Respondent's Response to 

Intervenor Hollngsworth & Vose Company's (H& V), Brief on Remedies Affecting its 

Contractual Rights (Public) upon:
 

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

Federal Trade Commission Federal Trade Commission 

600 Pennsylvania Avenue, NW 600 Pennsylvania Avenue, NW 

Washington, DC 20580 Washington, DC 20580 

rro bertsonêftc. gov sdahmêftc.gov 

6~ iLb 

Brian R. Weyhrich S 

Parker Poe Adams & Bernstein LLP 

Three Wachovia Center 

401 South Tryon Street, Suite 3000 

Charlotte, NC 28202 

Telephone: (704) 372-9000
 

Facsimile: (704) 334-4706 

.,