Bates White provides economic analysis in DuPont/Kolon antitrust counterclaims suit
- June 14, 2012
Working with law firm Crowell and Moring on behalf of E.I. du Pont de Nemours and Company, Bates White Economic Consulting, led by testifying expert Scott Thompson, assessed the competitive effects of DuPont’s para-aramid supply agreements, in response to an antitrust suit brought by Kolon Industries. Kolon alleged, in antitrust counterclaims filed after DuPont sued Kolon for theft of trade secrets (a case it later won), that DuPont illegally maintained a monopoly in the U.S. para-aramid fiber market through the use of exclusive or near-exclusive contracts with some customers. Para-aramid fiber, such as Kevlar®,1 is a strong heat-resistant synthetic fiber used for body armor and in aerospace and military applications, among many other uses.
The Bates White team conducted an extensive study of the para-aramid industry to understand the relevant market and potential barriers to entry, the manufacturing process and associated constraints, and the nature of sales, pricing, customer relationships, and servicing agreements. By closely reviewing market data and industry documents, Bates White was able to show that competition among para-aramid producers is robust and that DuPont’s supply agreements enhance that competition. The research-based, analytical approach clearly demonstrated the errors in Kolon’s theory of harm and its calculation of damages.
On April 5, the US District Court for the Eastern District of Virginia granted DuPont’s motion for summary judgment and dismissed Kolon’s antitrust counterclaim with prejudice. In his opinion, U.S. District Judge Robert E. Payne ruled that DuPont did not have monopoly power in a U.S. para-aramid fiber market, nor were its supply contracts exclusionary, both central points in Dr. Thompson’s expert report. “DuPont clearly lacks the power to control prices and exclude competition - otherwise, it would have been able to prevent the decrease in its market share and the rise of one of its major competitors,” Judge Payne wrote in the memorandum.
Crowell & Moring Chairman and Antitrust Group partner Kent Gardiner said that the contributions from Dr. Thompson and Bates White were invaluable. “Dr. Thompson’s expert report and testimony offered a level of detail, accuracy and insight that was critical to the case outcome. The Bates White team enabled us and our client to make more informed decisions about our legal strategy.”
1 Kevlar is a registered trademark of E.I. du Pont de Nemours and Company
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