Dorsey partner Michael Lindsay discussed in Antitrust magazine the continuing ripple effect of the Supreme Court's recent Leegin v. PSKS decision. For nearly 100 years, any agreement permitting a manufacturer, supplier, or licensor to control the price at which others would resell its products was "per se" illegal under the so-called Dr. Miles rule. Ten years ago, the U.S. Supreme Court eliminated that rule for maximum prices, and in Leegin the Court overturned the "per se" prohibition on minimum price agreements.
Lindsay suggests that Leegin provides an opportunity for businesses to reconsider their distribution policies. He cautions, however, that counsel and clients must consider the circumstances in which resale price maintenance (RPM) agreements might still be illegal under federal law, as well as the role that a thicket of state antitrust laws will play. After providing a series of options for business to consider in re-evaluating their distribution models, Lindsay concludes with the observation that even after Leegin, the strongest defense against free-riding discounters may well be the same as it has always been: avoid dealing with discounters in the first place.
Read the full Antitrust article (PDF link)
"Resale Price Maintenance and the World After Leegin" was published by Antitrust magazine, Vol.22, No. 1, Fall 2007. Republished under rights reserved to the author.