LEWIS A. KAPLAN, District Judge.
This case reflects the competitive struggle between two powers in the sale of test products used in screening the blood supply for the presence of viruses. Defendant Abbott Laboratories, Inc. ("Abbott"), in the period at issue, was stronger than plaintiff Ortho Diagnostic Systems, Inc. ("Ortho"), a subsidiary of Johnson & Johnson, in the sense that Abbott alone manufactured all five of the commonly used tests and its market shares generally were higher. The controversy involves Ortho's claim that Abbott violated the antitrust laws by entering into a contract with the Council of Community Blood Centers ("CCBC") pursuant to which CCBC members were entitled to advantageous pricing if they purchased a package of four or five tests from Abbott. Ortho contends that the pricing scheme improperly took advantage of Abbott's alleged monopoly position in some of the tests to foreclose or impair competition by Ortho in the sale of those tests available from both companies and violated Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1-2, Section 3 of the Clayton Act, 15 U.S.C. § 14, and the Donnelly Act, N.Y. GEN. BUS. L. § 340 (McKinney 1988).
Not to be outdone in using litigation as a competitive weapon, Abbott has interposed counterclaims against Ortho, claiming that Ortho was guilty of unfair competitive practices in the procurement of the Red Cross contract and of involvement in an alleged theft of Abbott trade secrets. The matter is before the Court on motions by Abbott for summary judgment dismissing the claims against it and by Ortho for partial summary judgment dismissing Abbott's Lanham Act and tortious interference claims.
The principal products involved in this dispute are five blood screening tests, or assays, that are used to test blood for the presence of viruses: (1) HBsAg tests for hepatitis B surface antigen; (2) HBc, also known as Anti-Core or Core, tests for the core of the hepatitis B virus; (3) HCV tests for the hepatitis C virus; (4) HTLV tests for a form of virus associated with leukemia; and (5) HIV-1/2 tests for two strains of the human immunodeficiency virus ("HIV"). The five assays each perform a unique function and thus are not interchangeable. It should be noted also that different manufacturers employ different technology, at least for certain of the assays. Abbott's is referred to as bead and Ortho's as microtiter technology.
The other product relevant to this case is data management systems ("DMS"). Blood tests are performed by blood donor centers, or BDCs, and plasma centers. Some collate and coordinate the test results manually. Others use a DMS, which consists of computer hardware and software, to perform that function.
The users of these assays fall into three groups: BDC, plasma centers, and hospitals and laboratories.
BDCs collect whole blood from donors, each unit of which is subjected to all five assays. The largest BDC operator is the American Red Cross. A significant number of other BDC operators are members of the CCBC, which engages in joint purchasing activities on behalf of participating members. There also are some smaller, unaffiliated blood centers. The Red Cross and CCBC members, however, together collect 85 to 90 percent of the blood gathered by BDCs.
Plasma centers, unlike BDCs, collect blood plasma rather than whole blood.
As they process the plasma in ways thought to kill some viruses, they do not use the HTLV or Anti-Core assays.
Hospitals and laboratories test blood samples drawn from patients for diagnostic purposes. While they use the assays at issue here, they perform a far broader range of tests, both on blood and other bodily substances, and they are served by a distribution network entirely separate from that serving the BDCs and plasma centers. The parties have ignored them in briefing these motions, and the Court follows suit.
The parties disagree as to whether sales of assays to both BDCs and plasma centers are within the market, Ortho claiming that the sole relevant focus is sales to BDCs. As will become apparent, it is unnecessary to resolve this disagreement in order to dispose of these motions.
Abbott is an Illinois corporation having its principal place of business in Abbott Park, Illinois. In March 1993, Abbott was the only company that made all five of the blood assays here at issue, one of which --HCV-- it made under license from Ortho. Moreover, according to Ortho, whose figures are accepted for purposes of this motion, Abbott then accounted for approximately 70 to 90 percent of the sales of all of the assays except HCV:
Test Share to BDCs Combined Share to BDCs
and Plasma Centers
Units Dollars Units Dollars
HTLV 91% 90% same same
HIV-1/2 86% 87% 77% 81%
HBsAg 75% 73% 69% 67%
Anti-Core 70% 69% same same
HCV 21% 20% 35% 33%
© 1992-2004 VersusLaw Inc.