The opinion in Ovation (i.e. FTC v. Lundbeck) is now available.  The first footnote in Judge Ericksen’s opinion notes that “the FTC and Minnesota began their closing argument by disclaiming the notion that these cases were ‘about unhappiness about the high price of Indocin.’  Nevertheless, the FTC and Minnesota cited in their post-trial response a press release issued by the FTC to announce the action’s commencement.  The press release asserts that the acquisition of NeoProfen resulted in the increase of Indocin IV’s price by almost 1300%; characterizes the prices charged by Lundbeck as ‘artificially high;’ and notes one commissioner’s view that Lundbeck’s ‘profiteering on the backs of critically ill premature babies is not only immoral, it is illegal.”

Read the full piece here. 

There are some new developments in the Federal Trade Commission’s consummated merger case brought against Ovation.  Namely, the FTC has lost.  TOTM readers may recall that I spent some time criticizing the Federal Trade Commission’s complaint, back in 2008, in FTC v. Ovation in federal district court in Minnesota.  As I described the stylized facts back then…

Read the full piece here. 

Intel Chairman and CEO Paul Otellini recently gave the keynote address at the Technology Policy Institute’s Aspen Forum on the US regulation environment and its effect of innovation and economic growth (HT: CNET, WSJ).  The speech got some play in the media because of its overall depressing tone for the US, and its frank criticism of the current state of US regulatory affairs.

Read the full piece here.

In the WSJ, Scott Hemphill (Columbia) and Jeannie Suk (Harvard) defend Charles Schumer’s proposed bill, which would extend copyright protection to fashion design…

Read the full piece here. 

Earlier this year, the US Supreme Court granted a writ of certiorari to Costco in the case of OMEGA SA v. Costco Wholesale Corp. (541 F. 3d 982 (2008)).  At issue is whether the ‘first sale doctrine’ of US copyright law (17 U.S.C. § 109(a)), which limits the copyright owner’s ability to restrict distribution of its product after first sale, applies to foreign-manufactured products whose first sale was outside the U.S. and whose importation to the U.S. was not authorized by the manufacturer. (I happened to run across a July 31 op-ed by Eric Felten at the WSJ lamenting the potential for the case to limit the ability of libraries to lend books, particularly books originally published and purchased overseas.) The case raises some interesting issues about the role and purpose of copyright protection, segregated market price discrimination in a global economy, and the role of the gray markets in arbitraging global price disparities.

Read the full piece here. 

One of the first reactions I had when reading the settlement is that it is quite striking how much and at what level of detail the settlement micro-manages Intel’s business decisions.  Lets consider a just a handful of provisions and look at the language in the settlement.  Again, I think these provisions should be read with the benefit of some perspective in market performance during the relevant time period.

Read the full piece here. 

Let me add on a few brief observations on the Intel settlement to Dan’s earlier comments, with which I largely agree.  There is a lot to say about the settlement: the predatory design aspects, Section 5, the (I found) quite odd self-congratulatory settlement press conference and webcast, and of course, what the settlement means for consumers.  I’m very interested in all of these issues, but perhaps none is more important than the last.   We cannot simply assume that the settlement equates to a victory for consumers.  Readers of this blog will be very familiar with the argument that merely counting cases, or agency activity, and of course settlements, are not reliable measures of the quality of agency performance or meaningful from a consumer welfare perspective.  But problems with this case make that warning especially appropriate here.  Thus, before delving into some first reactions based on language in the settlement over the days and maybe weeks to come, some perspective is in order.

Read the full piece here. 

Connecticut AG Richard Blumenthal has reportedly contacted Apple and Amazon concerning their pricing arrangements with publishers (WSJ, CNN):

Mr. Blumenthal said he has sent letters to Amazon and Apple asking them to “meet with his office” to address his concerns that agreements in place may restrict rivals from offering cheaper e-books. For instance, he said, “both Amazon and Apple have reached agreements with the largest e-book publishers that ensure both will receive the best prices for e-books over any competitors.”

A “most favored nation” (MFN) clause is a contractual agreement between a supplier and a customer that requires the supplier to sell to the customer on pricing terms at least as favorable as the pricing terms on which that supplier sells to other customers.

Read the full piece here.

While Intel Corporation nears its settlement deadline with the Federal Trade Commission, it received good news from a federal district court in Delaware evaluating the evidence of alleged consumer harm from the discounts Intel offers to buyers.  It is also very important to note that this pass from a US court applying standards of consumer harm embedded in US Section 2 case law — that is, actual harm to consumers and the competitive process rather than allowing harm to competitors to serve as a sufficient condition for proof of the former — is the first to evaluate the consumer welfare effects of Intel’s conduct from this more rigorous perspective.  One has to wonder whether this ruling will shift settlement negotiations in favor of Intel.   Its true that the FTC can use Section 5 to evade this Section 2 competitive effects analysis.  But not without eventually testing their interpretation of Section 5 in front of a panel at the D.C. Circuit.

Read the full piece here.