Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Rival tire dealers settle competition suit, (Feb 19, 2015)

By Dan Selcke, J.D.

Sentaida International Inc., a tire dealer doing business as Sentury Tire Americas, settled an unfair competition lawsuit it filed against rival tire company Toyo Tire and Rubber Co., Ltd. The stipulation provides that the suit is dismissed with prejudice (Sentaida International Inc. v. Toyo Tire and Rubber Co., Ltd., February 18, 2015).

Sentury filed its original complaint against Toyo on September 9, 2014, bringing claims for unfair competition and violations of Section 1 of the Sherman Act as well as California’s Cartwright Act and Unfair Competition Law. Sentury accused Toyo of misusing a design patent it had on a certain kind of high performance tire to bully other tire manufacturers into not buying Sentury’s competing high performance tires.

According to the complaint, Toyo was able to sell its high performance sporting tires at a premium for several years because there was no competition. When foreign manufacturers, including Sentury, started selling high performance sporting tires at more affordable prices, Toyo took steps to keep them from horning in on its territory.

Specifically, Toyo filed complaints with the U.S. International Trade Commission and the federal district court against numerous domestic and foreign tire manufacturers for alleged infringement of a certain Toyo design patent, U.S. Design Patent No. 675,150 (the ‘150 patent). Rather than fight the suit, 15 of the manufacturer respondents entered into confidential settlement agreements under which they promised not to deal in certain kinds of tires or challenge the validity of the ‘150 patent. Sentury’s own Landsail brand high performance sporting tires, which it had been selling at affordable prices since 2011, made it onto the lists of forbidden tires, despite the fact that Sentury was not named as a respondent in either of Toyo’s lawsuits.

As a result, domestic tire distributors canceled any orders they had for Sentury’s Landsail tires and made it impossible for Sentury to offer its tires to U.S. consumers. Sentury filed suit, claiming that its Landsail tires did not actually violate the ‘150 patent and that it was therefore inappropriate for them to be included on the lists.

To settle the case, Toyo admitted that Sentury’s Landsail tires did not infringe the ‘150 patent. In return, Sentury dropped its claims as part of a February 13 covenant that led to the suit’s dismissal.

The case number is: SA CV14-1457 AG (ANx).

Attorneys: Felix T. Woo (Dentons US LLP) for Sentaida International, Inc.

William J. Robinson (Foley & Lardner LLP) for Toyo Tire and Rubber Co., Ltd.

Companies: Sentaida International, Inc.; Toyo Tire and Rubber Co., Ltd.

News: Antitrust CaliforniaNews