The merits of this case concern Kolon’s claim that DuPont attempted to wield, or did wield, monopoly power over the U.S. para-aramid fiber market in violation of Section 2 of the Sherman Act, 15 U.S.C. § 2. Para-aramid is a strong, complex synthetic fiber used in body armor, tires, fiber optic cables, and a variety of other industrial products. Three para-aramid producers--DuPont, Teijin Aramid (formerly a division of the Dutch company Akzo N.V.), and Kolon--sell their para-aramid fibers to U.S. consumers.
DuPont invented para-aramid fiber in 1965, and for a period controlled the entire U.S. para-aramid market with its Kevlar© fiber. Teijin introduced its competing Twaron© fiber to the U.S. market in 1987 and has chipped away at DuPont’s share of that market every year since 1990. According to one of Kolon’s expert witnesses, during 2006-2009 (the relevant time period), DuPont’s share of the U.S. para-aramid market (the relevant geographic and product markets) fell from a high of 59% in 2006 to 55% in 2009, with most of this loss going to Teijin.
The U.S. para-aramid market is highly concentrated between Dupont and Teijin, which together account for 99% of U.S. sales. This extreme market concentration owes at least in part to the industry’s high entry barriers. As Kolon showed, para-aramid production is time-intensive and expensive, and potential customers test and “qualify” each para-aramid product to ensure it meets their particular needs, a process that typically takes six months to three years. In addition to this evidence of market concentration and high barriers to entry, Kolon adduced evidence that DuPont, despite Teijin’s encroachment, earned profit margins of as high as 75% between 1997 and 2005 and had the ability to price discriminate among its customers.
Judge(s): Albert Diaz
Jurisdiction: U.S. Court of Appeals, Fourth Circuit
Related Categories: Antitrust , Civil Procedure
|Circuit Court Judge(s)|
|Trial Court Judge(s)|
|Appellant Lawyer(s)||Appellant Law Firm(s)|
|Daniel Goldman||Paul Hastings LLP|
|Stephen Kinnaird||Paul Hastings LLP|
|Samer Musallam||Paul Hastings LLP|
|Jeff Randall||Paul Hastings LLP|
|Igor Timofeyev||Paul Hastings LLP|
|Appellee Lawyer(s)||Appellee Law Firm(s)|
|David Cross||Crowell & Moring LLP|
|Kent Gardiner||Crowell & Moring LLP|
|Jeffrey Poston||Crowell & Moring LLP|
|Adam Charnes||Kilpatrick Townsend & Stockton LLP|