Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Sexed bovine semen producer seeks judgment that it did not create monopoly, exclude competitors, (Sep 4, 2014)

By Linda O’Brien, J.D., LL.M.

A processor of sexed bovine semen is seeking declaratory relief that it did not create a monopoly or engage in exclusionary conduct in the sexed bovine semen processing market and an award of damages for anticipatory breach of its contract with a producer of bovine semen to provide semen sorting services, according to a complaint filed in the federal district court in Houston (Inguran, LLC v. ABS Global, Inc., September 3, 2014).

Inguran, d/b/a Sexing Technologies, is in the business of producing sexed bovine semen, which is processed so the resulting dose will selectively produce either a male or female calf. Inguran’s subsidiary developed and obtained several patents on a highly successful sorting technique and Inguran licensed the patents for use in its semen sorting services. ABS Global sells bovine semen produced by its inventory of bulls to dairy farmers and cattle producers.

The complaint states that, beginning in 2006, Inguran entered into a series of agreements with ABS to provide semen sorting services. In 2012, the parties negotiated another successor contract which defined their respective rights and obligations. The agreement contained an integration clause, a Texas choice-of-law clause, and confidentiality provisions. The agreement also expressly provides that each party was represented by counsel and determined the terms of the contract to be fair and reasonable.

In July 2014, nearly two years into the agreement, ABS filed suit against Inguran in Wisconsin, asserting a monopolization claim under Section 2 of the Sherman Act and unfair competition claims, and seeking declarations regarding the 2012 agreement. Prior to the filing of the suit, the parties maintained an amicable and productive relationship, and ABS never indicated any dispute or misunderstanding regarding the agreement to Inguran, the complaint alleged.

According to the complaint, Inguran has not engaged in anticompetitive or exclusionary conduct. The parties entered into the 2012 agreement based largely on ABS’ representations that it wanted a long-term deal as well as a significant increase in the volume of Inguran’s sorting services. Inguran negotiated the contract that ABS acknowledged was fair and reasonable and continues to provides a service that companies like ABS desire, using a patented, highly effective technique.

ABS allegedly manufactured its Wisconsin suit to pressure Inguran into renegotiating the contract’s terms. ABS, which continues to receive benefits under the 2012 agreement, never intended to perform for the contract’s full term. Inguran seeks to protect its rights under the 2012 agreement and recover for the harm caused by ABS’ conduct.

The plaintiff asserts claims for fraudulent inducement and anticipatory breach. The action seeks declaratory relief, rescission, liquidated, exemplary and actual damages, pre- and post-judgment interest, costs of suit, attorney fees, and any other just and proper relief.

The case is No. 4:14-cv-02535.

Attorneys: James L. Duncan III, Kirt S. O’Neill, and Fairly Spillman (Akin Gump Strauss Hauer & Feld, L.L.P.) for Inguran, LLC.

Companies: Inguran, LLC; ABS Global, Inc.

News: Antitrust TexasNews