Distribution, Competition, and Antitrust / IP Law

Obscure New York Law Does Not Render Resale Price Maintenance Illegal

This is from a few months back, but I haven’t mentioned it yet on this blog.

Resale Price Maintenance (RPM) is no longer per se unlawful under federal law.  Nor is it per se lawful.  Since Leegin, 551 U.S. 877 (2007), some states have been stepping up their own RPM enforcement efforts.  New York, for one, had been advocating that New York law automatically barred RPM agreements.

In making this argument, The New York Attorney General did not rely upon the Donnelly Act, New York’s version of the Sherman Act, but rather upon Section 369-a of the N.Y. General Business Law and Section 63(12) of the N.Y. Executive Law.  The AG’s arguments were rejected in New York v. Tempur-Pedic Int’l, No. 0400837 (N.Y. Super. Ct., Jan. 14, 2011).  The court held that Section 369-A makes contracts for resale price maintenance unenforceable and not actionable, but not illegal.  The court also held that Tempur-Pedic’s minimum advertised pricing program was not a retail price agreement.  This despite the fact that the program was part of a contract with retailers, and n0t a unilateral policy.

Tempur-Pedic aside, it remains generally advisable to structure MAP programs as unilateral policies, rather than agreements, precisely to avoid debates about whether or not RPM agreements are involved.

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About Howard Ullman

Antitrust, competition, and IP law enthusiast.

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