Antitrust Law Daily Wrap Up, ANTITRUST—EDNY: Conspiracy, Monopoly Claims Against Chrysler, Licensing Agent Fail, (Feb 4, 2013)

By Jeffrey May, J.D.

Chrysler Group LLC and its licensing agent were incapable of conspiring to restrain trade by allegedly interfering with a business that sold aftermarket replacement automotive decorative trim pieces, the federal district court in Central Islip, New York, has ruled. Monopoly claims against Chrysler were also dismissed (Bill's Birds Inc. v. Trademarketing Resources , Inc., January 31, 2013, Wexler, L.).

According to the complaining business owner, because auto makers were not interested in making replacement decorative trim parts, such as emblems, trunk lock covers, and radio plates, he started a business to fill the void. Chrysler's licensing agent allegedly threatened criminal and civil action if the business owner did not stop manufacturing or selling the aftermarket parts that Chrysler retained the exclusive right to manufacture. The complaining business owner attempted to obtain a license to use the Chrysler trademark and manufacture trademarked items; however, the license request was denied.

The business owner attempted to allege a conspiracy between Chrysler and its licensing agent to interfere with his business. The conspiracy claim failed because the licensing agent was not an independent, separate economic entity from Chrysler, the court ruled.

All evidence showed that the licensing agent acted consistently to further the interests of Chrysler, and not its own. There was no allegation or indication that the agent had any decision-making capacity. The agent was merely the conduit of communication between Chrysler and its licensees or potential licensees. There was no allegation that the licensing agent had any input on whether and under what terms a license would be granted. Apparently, Chrysler alone was in full control of the licensing arrangements, the court explained.

Claims against Chrysler for monopolizing the aftermarket replacement decorative trim parts market throughout the United States were dismissed for failure to allege a plausible relevant market or the existence of any monopoly power. The business owner did not include interchangeability or cross-elasticity of demand in its definition of the relevant market. Although the business owner contended that its products were functional substitutes for Chrysler’s original trim pieces, it failed to allege how these products were interchangeable from the consumer's perspective, in the court's view.

The case is CV 11-3888.

Attorneys: Harold G. Furlow for plaintiffs. Lisa Pearson (Kilpatrick Townsend & Stockton LLP) for defendants.

Companies: Chrysler Group LLC; Bill's Birds Inc.

Cases: Antitrust NewYorkNews