Johnson & Johnson's monopoly dispute

    June 01, 2012 | BY

    clpstaff &clp articles

    Pharmaceutical and medical giant Johnson & Johnson has won its vertical price fixing dispute in the first private litigation to challenge resale price maintenance

    In March 2008, Johnson & Johnson found Rainbow Medical Equipment & Supplies, which had been distributing J&J's suturing products for 15 years under annually-renewed distribution agreements, was selling the products below the minimum contracted price and winning business outside its allocated region of Beijing. J&J terminated Rainbow's distribution rights in July that year and ceased delivery in August 2008.

    Rainbow subsequently filed a lawsuit alleging that J&J engaged in resale price maintenance, violating Article 14 of the Law, which prohibits setting a minimum price and claimed damages of Rmb14.4 million ($2.3 million).

    Price maintenance is just one type of restriction placed on distributors. It is common in manufacturer and distributor agreements. From the manufacturer's perspective, they need to protect a minimum price for products, ensuring its correct place in the market. Johnson & Johnson

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