Antitrust Law Daily Wrap Up, ANTITRUST—D. Conn.: Thermal flexographic processor manufacturer unable to avoid damages award to former business partner, (Jan 21, 2015)

By Linda O’Brien, J.D., LL.M.

A manufacturer of thermal flexographic processors was unable to challenge a jury verdict which awarded damages to its former joint venture partner over the manufacturer’s alleged collusion with a competitor to unreasonably restrain trade and to transfer the former partner’s trade secrets, the federal district court in Hartford, Connecticut has held. The court also granted the former business partner’s motion for punitive damages (MacDermid Printing Solutions, LLC v. Cortron Corporation, January 20, 2015, Shea, M.).

In 2004, Cortron Corp. entered into a joint venture with MacDermid Printing Solutions to manufacture thermal flexographic processing machines—technology used for the creation of plates for labeling commercial packaging—designed by MacDermid. E.I. du Pont de Nemours and Company (DuPont), the first and only other company that developed and owned a thermal processing system at the time, filed suit against Cortron, alleging that Cortron’s manufacturing work with MacDermid violated one of DuPont’s patents. Cortron and DuPont subsequently entered into a settlement agreement, wherein Cortron agreed to cease manufacturing the machines and DuPont agreed to indemnify Cortron against any suit brought by MacDermid. Cortron also provided DuPont with technical information regarding MacDermid’s thermal processing technology.

In 2008, DuPont issued a press release, announcing the settlement and, five months later, Cortron ceased business operations. Subsequently, MacDermid filed suit against Cortron, alleging violations of federal and state antitrust laws, among other claims. MacDermid asserted that the press release discouraged customers from buying its thermal flexographic processors. Following a trial, a jury rendered a verdict in favor of MacDermid and awarded damages. Cortron moved for judgment as a matter of law notwithstanding the verdict and MacDermid filed a motion for punitive damages.

Judgment as matter of law. The court found that the jury verdict was based on legally sufficient evidence. The entry of a judgment as a matter of law is proper only in the complete absence of evidence supporting the verdict. Cortron’s argument that MacDermid failed to prove that it was injured in its business or property was rejected. At trial, MacDermid presented expert testimony that, based on data analysis, MacDermid’s sales would have been higher if not for the DuPont-Cortron conspiracy and press release, and the jury was entitled to credit his testimony.

Moreover, Cortron cited no authority for its argument that MacDermid was required to produce direct evidence of specific customers who were steered away from MacDermid by the press release. Indirect proof of damages was allowed when the nature of the defendant’s wrong made direct proof of damages difficult to obtain. MacDermid’s perceptions of how its customers and potential customers were reacting to the press release, together with the jury’s reasonable inference on how the press release was received, was an adequate basis for the jury to conclude that demand was suppressed by the conspiracy and ensuing press release, the court noted.

Additionally, there was sufficient evidence for the jury to find an adverse effect on competition under the rule-of-reason analysis. MacDermid presented evidence of DuPont’s market power and a reasonable jury could have found that the conspirators, through the press release, led consumers to believe that MacDermid’s technology was no longer available as an alternative product.

Compensatory damages. The court also found that the jury award of antitrust damages was not duplicative. A jury award is presumed valid and Cortron failed to show that a mistake was made. Moreover, the disparity between the award and the amount MacDermid had requested was not significant since the jury was within its rights to reasonably depart from MacDermid’s expert’s estimate.

Punitive damages. Finally, MacDermid’s motion for an award of punitive damages was granted. According to the court, federal and state antitrust statutes require the award of treble damages to successful plaintiffs and Cortron conceded that MacDermid was entitled to treble damages on its antitrust claims.

The case is No. 3:08-cv-01649 (MPS).

Attorneys: Ann H. Rubin (Carmody Torrance Sandak & Hennessey, LLP) for MacDermid Printing Solutions LLC. Craig A. Raabe (Robinson & Cole LLP), and Joshua S. Johnson (Vinnson & Elkins LLP) for Cortron Corp.

Companies: MacDermid Printing Solutions LLC; Cortron Corp.

Cases: Antitrust ConnecticutNews