Retractable Technologies, Inc. v. Becton Dickinson & Co.
2016 U.S. App. LEXIS 21556
| 5th Cir. | 2016Background
- BD and RTI compete in the U.S. safety-syringe market; RTI’s VanishPoint is a retractable syringe protected by patents; BD marketed the Integra retractable syringe and other safety syringes.
- RTI previously sued BD (settled 2004 for $100M with a broad mutual release). Afterward RTI sued again (2007) alleging patent infringement, §2 antitrust violations, Lanham Act false advertising, and state torts; the patent claim later succeeded in part.
- At a 2013 trial, the jury found BD liable only for attempted monopolization under §2 (safety syringes) and for Lanham Act false advertising (claims: “world’s sharpest needle” and “low waste space”), awarding $113.5M in deception damages (trebled to ~$340M) and finding liability on the advertising claims.
- The district court trebled antitrust damages, awarded fees, declined to disgorge Lanham profits (finding disgorgement subsumed by treble damages), and enjoined BD to notify market participants about the false ads.
- On appeal the Fifth Circuit (Jones, J.) reversed the §2 attempted-monopolization verdict as a matter of law (false advertising and patent infringement do not constitute anticompetitive conduct here), affirmed Lanham Act liability, vacated the disgorgement determination for reconsideration, and vacated/remanded the injunction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether BD’s conduct (patent infringement, false ads, and alleged market “tainting”) constituted predatory or anticompetitive conduct supporting an attempted monopolization claim under §2 | BD engaged in anticompetitive conduct via patent workarounds, sustained false advertising, and deliberate "tainting" of retractable market to exclude RTI | Patent infringement is not anticompetitive; false advertising alone (absent other exclusionary mechanisms) does not support a §2 claim; the "tainting" theory is unsupported and incoherent | Reversed: as a matter of law §2 attempt-to-monopolize verdict cannot stand; patent infringement and the false-advertising/tainting theories do not prove exclusionary conduct here |
| Whether RTI’s Lanham Act claim was barred by res judicata or laches | Advertising claims continued post-2004 settlement and thus are new causes of action; laches not established | Prior settlement and delay barred later Lanham claims | Affirmed: res judicata inapplicable because complained-of ads occurred after settlement; laches defense rejected (no undue prejudice found) |
| Whether disgorgement of BD’s profits for Lanham Act violations was appropriate and, if so, in what amount | Disgorgement appropriate to remedy false advertising and punish deception; some profits traceable to false ads | Disgorgement improper or speculative; district court already addressed remedies by trebling antitrust award | Affirmed that disgorgement is an available remedy but reversed district court’s refusal to disgorge on equitable grounds tied to treble antitrust award; remanded to determine attributable profits and reweigh equitable factors |
| Whether the district court’s injunction requiring BD to notify market participants and stop ads was proper | Injunction necessary to prevent future deception and protect competition | Injunction rested in part on the now-reversed §2 verdict and was overly broad | Vacated and remanded: injunction relied on erroneous legal basis (antitrust verdict); may be reconsidered narrowly under Lanham Act standards on remand |
Key Cases Cited
- Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447 (Sup. Ct.) (defines elements of attempted monopolization)
- Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209 (Sup. Ct.) (antitrust protects competition not competitors)
- Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (Sup. Ct.) (example of exclusionary conduct lacking business justification)
- Stearns Airport Equipment Co. v. FMC Corp., 170 F.3d 518 (5th Cir.) (false or aggressive sales pitches are competition on the merits and generally not §2 predatory conduct)
- Kinnear-Weed Corp. v. Humble Oil & Ref. Co., 214 F.2d 891 (5th Cir.) (patent infringement is not a basis for antitrust liability)
- Page Airways, Inc. v. Associated Radio Services Co., 624 F.2d 1342 (5th Cir.) (business torts may support §2 liability in extreme cases but are exceptional)
- United States v. Line Material Co., 333 U.S. 287 (Sup. Ct.) (patentee extending monopoly to unpatented products can violate antitrust law)
- Pebble Beach Co. v. Tour 18 I Ltd., 155 F.3d 526 (5th Cir.) (discretionary factors for awarding profits under Lanham Act)