ALI-ABA Course of Study Product Distribution and Marketing June 22-24, 2011 Philadelphia, Pennsylvania

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1 1023 ALI-ABA Course of Study Product Distribution and Marketing June 22-24, 2011 Philadelphia, Pennsylvania True Grit: Dealer Determination and Refusal to Deal By Richard J. Wegener Fredrikson & Byron, P.A. Minneapolis, Minnesota

2 1024 FREDRIKSON & BYRON, P.A. OVERVIEW I. THE ANTITRUST FRAME WORK...1 A. Individual [ Unilateral ] Refusal to Deal...1 B. Vertical Refusal to Deal Refusal in Order to Enforce Vertical Restraints Refusal by Monopolist Refusal By Copyright Holder Refusal By Patent Holder...7 C. Refusal Involving Third Party Participation Seller s Termination of Buyer Buyer s Termination of Seller Group Boycott (Manufacturer and a Group of Other Parties at the Same Level of Trade)...11 D. Vertical Integration...13 E. Federal and State Regulation of Refusals To Deal Federal Regulation State Regulation...14 II. CHANGING THE RULES: THE CONTRACTUAL FRAMEWORK...17 A. Distribution Contracts Are Not Presumed...17 B. The Importance of a Distribution Agreement...18 C. Specific Contractual Provisions Amendment Arbitration Assignability Best Efforts Clause Choice of Governing Law Duration, Sales Quota Exclusivity - Territorial and Product Fee-Shifting Forum Selection Integration Location Release Suggested Resale Price Termination For Any Cause Whatsoever Termination Notice Trademarks Waiver...29 III. WHY REFUSE TO DEAL? LET ME COUNT THE REASONS WHY...30 i

3 1025 TABLE OF AUTHORITIES FEDERAL CASES 324 Liquor Corp. v. Duffy, 479 U.S. 335 (1987)...17 A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001)...6 Ace Beer Distributors, Inc. v. Kohn, Inc., 318 F.2d 283 (6th Cir.), cert. denied, 375 U.S. 922 (1963), reh g denied, 375 U.S. 982 (1964)...10 Alliance of Automobile Manufacturers v. Hull, 137 F. Supp. 2d 1165 (D. Ariz. 2001)...16 American Distributing Corp. v. ACS Communications, Inc., 990 F.2d 223 (5th Cir.), cert. denied, 114 S. Ct. 189 (1993)...11, 31 American Safety Equipment Corp. v. J.P. Maguire & Co., 391 F.2d 821 (2d Cir. 1968)...19 Amerisys, Inc. v. Panasonic Communications and Systems Co., 10 F.3d 806 (4th Cir. 1993)...25 Anti-Monopoly, Inc. v. Hasbro Inc., Trade Cas. (CCH) 71,095 (S.D.N.Y. 1995)...5 Ark Dental Supply Co. v. Cavitron Corp., 461 F.2d 1093 (3rd Cir. 1972)...2 Arnold Pontiac-GMC, Inc. v. Budd Baer, Inc., 826 F.2d 1335 (3rd Cir. 1987)...12 Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985)...5 Auburn News Co. v. Providence Journal Co., 659 F.2d 273 (1st Cir. 1981)...14 Axis, S.p.A. v. Micafil, Inc., 870 F.2d 1105 (6th Cir. 1989)...8 Bailey s v. Windsor American, Inc., 948 F.2d 1018 (6th Cir. 1991)...11 Banek, Inc. v. Yogurt Ventures U.S.A., Inc., 64 BNA ATRR 753 (6th Cir. 1993)...23 Bassett v. National Collegiate Athletic Association, 528 F.3d 426 (6th Cir. 2008)...13 Baxter International, Inc. v. Abbott Laboratories, 315 F.3d 829 (7th Cir. 2003)...20 In re Beer Antitrust Litigation, Trade Cas. (CCH) 73,671 (N.D. Calif. 2002)...11 Bellmore v. Mobil Oil Corp., 783 F.2d 300 (2d Cir. 1986)...17 Bennett Enterprises, Inc. v. Domino s Pizza, Inc., 45 F.3d 493 (D.C. Cir. 1995)...32

4 1026 Berkey Photo, Inc. v. Eastman Kodak Co., 603 F.2d 263 (2d Cir. 1979)...4 Berliner Foods Corporation v. The Pillsbury Company, [ New Developments] Bus. Franchise Guide (CCH) 8566 (D. Md. 1986)...21 Big Apple BMW, Inc. v. BMW of North America, Inc., 974 F.2d 1358 (3d Cir. 1992)...12, 31 Blonder Tongue Labs. v. Univ. Illinois Found., 402 U.S. 313 (1971)...7 Bloor v. Falstaff Brewing Corporation, 601 F.2d 609 (2d Cir. 1979)...22 Borschow Hospital & Medical Supplies, Inc. v. Cesar Castillo, Inc., 882 F. Supp. 236 (D.P.R. 1995)...19 Burdett Sound, Inc. v. Altec Corp., 515 F.2d 1245 (5th Cir. 1975)...2, 10 Business Electronics Corporation v. Sharp Electronics Corporation, 485 U.S. 717 (1988)...10 Byars v. Bluff City News Co., 609 F.2d 843 (6th Cir. 1980)...3, 14 C. Pappas Co., Inc. v. E. & JU. Gallo Winery, 610 F. Supp C.P. Bourg, Inc. v. Wittco Systems, Inc., Bus. Fran. Guide (CCH) 9685 (D. Mass. 1990)...22 C.R. Bard, Inc. v. M3 Systems, Inc., 157 F.3d 1340 (Fed. Cir. 1998)...9 C.R. Bard, Inc. v. Medical Electronics Corp., 529 F. Supp (D. Mass. 1982)...14 California Computer Products Inc. v. International Business Machines Corp., 613 F.2d 727 (9th Cir. 1979)...4 Carlock v. The Pillsbury Company, 719 F. Supp. 791 (D. Minn. 1989), superseded on other grounds by statute, Minn. Stat. 80C.21, as noted in Twin Cities Galleries, LLC v. Media Arts Group, Inc., 415 F.Supp.2d 967 (2006), rev d 476 F.3d 598 (2007)...26 Cavalier Telephone, LLC v. Verizon Virginia, Inc., 330 F.3d 176 (4th Cir. 2003)...3 C.K. Smith & Co., Inc. v. Motiva Enterprises LLC, 81 BNA ATRR 401 (1st Cir. 2001)...32 Chroma Lighting v. GTE Products Corp., 11 F.3d 653 (1997)...4 Clorox Co. v. Sterling Winthrop, Inc., 117 F.3d 50 (2d Cir. 1997)...30

5 1027 Cohen v. Stratis Business Centers, Inc., 2005 WL (D.N.J. 2005)...27 Conner v. Hardee s Food Systems, Inc., 2003 WL (6th Cir. 2003)...27 Consumers Petroleum Co. v. Texaco Inc., 804 F.2d 907 (6th Cir. 1986)...17 Continental Enters. Inc. v. AmOil Co., 808 F.2d 24 (8th Cir. 1986)...17 Cosmetic Gallery, Inc. v. Schoeneman Corp., 495 F.3d 46 (3d Cir. 2007)...13 Costco Wholesale Corp. v. Hoen, 407 F. Supp. 2d 1234 (W.D. Wash. 2005)...17 Costco Wholesale Corp. v. Hoen, No. C04-360P, 2006 WL (W.D. Wash. Apr. 21, 2006)...17 Cousins Subs Systems, Inc. v. McKinney, 59 F. Supp. 2d 816 (E.D. Wis. 1999)...27 Data General Corp. v. Grumman Systems Support, 36 F.3d 1147 (1st Cir. 1994)...6 Dawson Chem. Co. v. Rohn & Haas Co., 448 U.S. 176 (1980)...8 In re E.I. dupont de Nemours & Co., 96 F.T.C. 653 (1980)...8 ES Development, Inc. v. RWM Enterprises, Inc., 939 F.2d 547 (8th Cir. 1991)...12 Eden Electrical, Ltd. v. Amana Company, L.P., 258 F. Supp. 2d 958 (N.D. Iowa 2003), aff d 370 F.3d 824 (8th Cir. 2004)...27 Esso Standard Oil Co. v. Dep t of Consumer Affairs, 793 F.2d 431 (1st Cir. 1986)...17 Ethyl Gasoline Corp. v. United States, 309 U.S. 436 (1940)...7 Exxon Corp. v. Governor of Maryland, 437 U.S. 117 reh g denied, 439 U.S. 884 (1978)...17 FCC Computer Centers of Illinois v. Entre Computer Centers, Inc., 597 F. Supp (N.D. Ill. 1984)...23 FTC v. Superior Court Trial Lawyers Ass n., 493 U.S. 411 (1990)...2 In re Fair Allocation System, 126 F.T.C. 626 (Oct. 22, 1998)...12 Faulkner s Auto Body Center, Inc. v. Covington Pike Toyota, Inc., Trade Cas. 73,771 (6th Cir. 2002)...13 Ford Motor Co. v. Texas Dep t of Transportation, 106 F. Supp. 2d 905 (W.D. Tex. 2000)...16

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