Opinion ID: 196987
Heading Depth: 2
Heading Rank: 3

Heading: Antitrust Claim--Tying Arrangement

Text: 46 Asserting a per se violation of Section One of the Sherman Act, Borschow contends that Becton Dickinson threatened to withhold sale of its patented Deseret line of medical products (the tying product) unless Borschow dropped the Monoject product and carried instead its own syringe line (the tied product). 5 Contending that this is the case of the tie that didn't bind, Becton Dickinson argues that a threat alone is insufficient to constitute an illegal tying arrangement. We agree. 47 Section 1 of the Sherman Act prohibits a seller from 'tying' the sale of one product to the purchase of a second product if the seller thereby avoids competition on the merits of the 'tied' product. See 15 U.S.C. § 1 ('Every contract ... in restraint of trade or commerce ... is declared to be illegal.') Data General Corp. v. Grumman Systems Support Corp., 36 F.3d 1147, 1178 (1st Cir.1994). There are essentially four elements to a per se tying claim: (1) the tying and the tied products are actually two distinct products; (2) there is an agreement or condition, express or implied, that establishes a tie; (3) the entity accused of tying has sufficient economic power in the market for the tying product to distort consumers' choices with respect to the tied product; and (4) the tie forecloses a substantial amount of commerce in the market for the tied product. Id. at 1178-79. 6 48 The fatal flaw in Borschow's tying claim is that Becton Dickinson never withheld its Deseret line. Although Borschow has adduced evidence of various threats by Becton Dickinson, it is undisputed that these threats were not carried out. Permitted to carry both the Deseret line and the Monoject line, Borschow was never injured by the threat. See Wells Real Estate, Inc. v. Greater Lowell Board of Realtors, 850 F.2d 803, 814 (1st Cir.) (holding that plaintiff must have been injured by anticompetitive act to have standing under antitrust laws), cert. denied, 488 U.S. 955, 109 S.Ct. 392, 102 L.Ed.2d 381 (1988). 49 As a result, the second key element discussed above--evidence of a tie--is missing: 50 [T]he essential characteristic of an invalid tying arrangement lies in the seller's exploitation of its control over the tying product to force the buyer into the purchase of a tied product that the buyer either did not want at all, or might have preferred to purchase elsewhere on different terms. When such forcing is present, competition on the merits in the market for the tied item is restrained and the Sherman Act is violated. 51 Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 12, 104 S.Ct. 1551, 1558, 80 L.Ed.2d 2 (1984); see also T. Harris Young & Assoc., Inc. v. Marquette Electronics, Inc., 931 F.2d 816, 822-23 (11th Cir.) ([F]or a tie to exist a seller must withhold product A unless the buyer also selects product B. Only after the existence of a tie is shown is it necessary to determine whether an illegal tying arrangement exists.) (footnote omitted), cert. denied, 502 U.S. 1013, 112 S.Ct. 658, 116 L.Ed.2d 749 (1991); Cia Petrolera Caribe, Inc. v. Avis Rental Car Corp., 576 F.Supp. 1011, 1016 (D.P.R.1983) (Coercion is an essential element of any tying arrangement, i.e., forcing the purchaser or lessor to take the unwanted tied product along with the tying product.), aff'd, 735 F.2d 636 (1st Cir.1984). 52 Where a tying product has not been withheld, there is no tie. There is no tie for any antitrust purpose unless the defendant improperly imposes conditions that explicitly or practically require buyers to take the second product if they want the first one. 10 Phillip E. Areeda et al., Antitrust Law: An Analysis of Antitrust Principles and their Application p 1752b, at 280 (1996). Thus we hold that there is no genuine issue of material fact with respect to Borschow's tying claim. 7