Cengage Advantage Books: Business Law Today, The Essentials 10th Edition by Roger LeRoy Miller

تمرين 9

I. du Pont de Nemours and Co. v. Kolon Industries, Inc.
COMPANY PROFILE DuPont, founded in 1802, started as a gunpowder manufacturer. Today, it operates in ninety countries in the fields of agriculture, apparel, communications, electronics, home construction, nutrition, and transportation. Its latest major investment was in a biodegradable ingredient used in cosmetics, liquid detergents, and antifreeze.
FACTS DuPont manufactures and sells para-aramid fiber, which is a complex synthetic fiber used to make body armor, fiber-optic cables, and tires, among other things. Only three producers of this fiber-DuPont (based in the United States), Teijin (based in the Netherlands), and Kolon Industries, Inc. (based in South Korea)-sell it in the U.S. market. DuPont is the industry leader, accounting for more than 70 percent of all para-aramid fibers purchased in the United States. In 2009, DuPont brought a lawsuit against Kolon for misappropriation of trade secrets. Kolon counterclaimed that DuPont had monopolized and attempted to monopolize the para-aramid market in violation of Section 2 of the Sherman Act.
Kolon claimed that DuPont illegally used multiyear supply agreements requiring its high-volume para-aramid fiber customers to purchase from 80 to 100 percent of their needs from DuPont. Kolon alleged that these agreements limited the other producers' ability to compete. DuPont moved to dismiss the counterclaim, arguing, in part, that Kolon's allegations of unlawful exclusionary conduct were insufficient. A federal district court agreed and dismissed Kolon's counterclaim. Kolon appealed. The U.S. Court of Appeals for the Fourth Circuit examined the trial court's reasoning.
ISSUE Did Kolon present sufficient evidence that DuPont possessed monopoly power in the para-aramid market to maintain a claim for monopolization and attempted monopolization?
DECISION Yes. The U.S. Court of Appeals for the Fourth Circuit reversed the district court's decision, finding that Kolon had alleged sufficient facts to show that DuPont's behavior violated Section 2 of the Sherman Act.
REASON The federal appellate court reasoned that DuPont's control of more than 70 percent of the U.S. para-aramid fiber market showed its monopoly power. "A monopolist is not free to take certain actions that a company in a competitive... market may take because there is no market constraint on a monopolist's behavior." The multiyear contracts that DuPont imposed on its highest-volume purchasers severely limited Kolon from competing for the most important customers. "DuPont's conduct has had a direct, substantial, and adverse effect on competition... [and] has constrained the only potential entrant [Kolon] to the United States in decades from effectively entering the market." Because DuPont's conduct reduced or eliminated additional competition, and preserved DuPont's monopoly position, the court concluded that it violated Section 2.
WHAT IF THE FACTS WERE DIFFERENT? Assume that DuPont had 45 percent of the market and Kolon, along with numerous other competitors, had the remaining 65 percent. Would the appellate court have ruled the same? Why or why not?