77 F. Supp.2d 189 (1999) | Cited 0 times | D. Massachusetts | November 30, 1999



Plaintiff Hewlett-Packard Company ("HP") brings thisaction1 against defendant Boston Scientific Corporation("BSC") alleging that BSC unlawfully monopolized, or attempted tomonopolize, the intravascular ultrasound ("IVUS") catheter andconsole markets in the United States, in violation of Section 2of the Sherman Antitrust Act, 15 U.S.C. § 2, and state law. AnIVUS catheter is a flexible tube-like device used in conjunctionwith a console to obtain sonographic images of arteries. HP alsoseeks a declaratory judgment that it is no longer obligated tomake payments under a licensing agreement which the two companiesentered into pursuant to a consent decree required by the FederalTrade Commission ("FTC") as a condition to allowing BSC's mergerwith two other medical technology companies.

BSC has filed a motion to dismiss all counts pursuant toFed.R.Civ.P. 12(b)(6) on the grounds, inter alia, that theantitrust claim is facially deficient because HP failed toallege: (1) that BSC has current monopoly power in the catheteror console markets in the United States; or (2) that BSCcommitted predatory acts that could reasonably be interpreted ascausing antitrust injury to competition. After hearing and areview of the excellent briefing by both sides, the motion isDENIED.


When all reasonable inferences are drawn in the non-movant'sfavor, HP's complaint alleges the following facts:

A. The Products: Catheters and Consoles

IVUS catheters are medical devices that are used to diagnoseand treat cardiovascular ailments. They are flexible tube-shapedobjects that are inserted into a blood vessel. A transducer,located at the forward end of the catheter, generates andtransmits ultrasound waves. These waves reflect off the arterialwalls, and a receiver measures the amount of returned energy. Thecatheter compares the transmitted and received energy and sends asignal to a console that displays a 360 degree image of the bloodvessel. The image allows physicians to assess the amount ofplaque deposits in blood vessels.

There are two types of IVUS catheters. Phased array cathetersuse several stationary transducers to create a 360 degree imageof the blood vessel. Mechanical catheters also create a 360degree image, but do so with a single transducer that is spun byan external motor drive unit. This case centers around mechanicalcatheters.

B. Market Conditions Prior to 1995

BSC, headquartered in Natick, Massachusetts, develops andmanufactures medical products. HP's headquarters is in Palo Alto,California, and its Medical Products Group is located in Andover,Massachusetts. Both companies have long been participants in IVUSmarkets — BSC sold catheters and HP sold consoles. Until 1995,they had a cooperative history and on occasion have engaged injoint ventures to design BSC catheters specifically to operate onHP consoles. As of mid-1994, BSC and Cardiovascular ImagingSystems, Inc. ("CVIS") were the market leaders with respect tothe development, manufacture, and sale of IVUS catheters. BSCheld 40% of that market, and CVIS held 50%. The market for IVUSconsoles was equally concentrated — CVIS controlled 40% and HPcontrolled 50%.

In August 1994, BSC dramatically shifted the balance of powerby seeking to acquire CVIS. Three months later, BSC took steps toacquire SCIMED Life Systems, Inc. ("SCIMED"), which was preparingto enter the IVUS catheter market within the next two to threeyears.

Believing that BSC's acquisitions would lessen competition andcreate monopoly power in the IVUS catheter market, in January1995 the Federal Trade Commission filed suit against BSC forviolation of the Clayton Act, 15 U.S.C. § 45, and the FederalTrade Commission Act, 15 U.S.C. § 18 & 21. The FTC sought aninjunction to prevent the CVIS acquisition.

C. The Licensing Agreement

As part of settlement negotiations with the FTC, BSC sought asuitable competitor in the IVUS catheter market. On February 21,1995, the company entered into a licensing agreement granting HPthe right to use BSC's IVUS technology ("Licensed Technology") inconjunction with the manufacture and sale of certain products("Licensed Products").

The licensing agreement defined Licensed Technology as all BSC,SCIMED, and CVIS patents used for the "development, manufactureand sale of Licensed Products . . . and all existing know-how"relating to the manufacture, sale, and distribution of thoseproducts. Licensed Products included "ultrasound imagingcatheters, imaging cores and imaging guide wires which aredesigned for diagnostic or therapeutic use, or both, in the humanheart and/or in the human coronary and peripheral vascularsystem."

The Licensed Products definition also referenced Exhibit A,stating that it "includes and is no narrower than the collectiveclaims of the patents . . . listed on Exhibit A." Among severalpatents listed on Exhibit A was BSC's "pullback patent."2This technology allows physiciansto retrieve an inserted catheter at a fixed rate of speed,enabling the physician to measure plaque accumulations moreaccurately.

The licensing agreement also included an "open interface"provision that required both parties to ensure that theirconsoles were able to be used with the other party's existingcatheters. Each party assumed a responsibility to "cooperate . .. in furthering this open interface objective," but retained theoption of upgrading its consoles. To facilitate this provision,prior to introducing a new IVUS product, the parties agreed toshare technical information relating to new products.

The licensing agreement also contained an "interim supplycommitment," which was designed to allow HP to compete in thecatheter market while developing its own line of catheters. BSCagreed to supply HP with all BSC catheters at a below marketprice (average manufacturing cost plus 40%) for resale by HP. Theagreement also required BSC, immediately after acquiring CVIS, tointroduce its new "Spy" catheter, which was specificallydeveloped for use with HP consoles.

In exchange for the right to use BSC's technology, HP agreed topay a substantial fee. The parties agreed that one-third of thetotal fee was to be paid within 30 days of the agreement'seffective date. The remaining fee was to be paid in three equalinstallments payable in May 1998, 2000, and 2002. To date, HP hasmade the initial payment and the May 1998 installment.

D. The FTC Consent Order

The FTC agreed to withdraw its suit and allow the CVISacquisition only after BSC entered into the licensing agreementwith HP. On February 23, 1995, the FTC and BSC entered into aConsent Order, requiring BSC to license its IVUS technologyportfolio to HP "pursuant to, and in accordance with, theFebruary 21, 1995 agreement" between BSC and HP "which agreementis appended to this Order in Confidential Appendix II." (Pl.Exh.B at 12.) The order's stated purpose was to create an"independent competitor in the development, production and saleof IVUS catheters and to remedy the lessening of competitionresulting from the CVIS acquisition and the SCIMED acquisition asalleged in the Commission's Complaint." (Id. at 5.) IVUScatheters were defined as "intravascular ultrasound catheters,intracardiac ultrasound catheters, removable imaging cores usedin intravascular or intracardiac ultrasound imaging, andintravascular imaging guidewires." (Id. at 3).

The FTC's order contained four primary provisions. First, itrequired BSC to license its "IVUS Technology Portfolio" to HP oranother suitable company. It defined IVUS technology portfolio toinclude: a) all rights to BSC, CVIS, and SCIMED United States andforeign IVUS catheter patents; b) all CVIS and SCIMED tradesecrets, technology and know-how relating to IVUS catheters; andc) all IVUS catheter customer lists. Second, it required BSC toprovide technical assistance to the licensee in manufacturing thecatheters and obtaining regulatory approval. Third, BSC wasrequired to provide HP with a supply of catheters for resale.Finally, the order prohibited BSC from entering into anyarrangement that would make BSC's catheters compatible with onlycertain consoles.

In exchange for these commitments, the FTC withdrew its suitand request for an injunction. BSC acquired CVIS and SCIMED.

E. Alleged Unlawful Acts

HP claims that BSC "consciously and willfully thwarted thepurposes of the Consent Order and the License Agreement," and bydoing so secured a "monopoly over IVUS catheters and acquired orattempted to acquire a monopoly over IVUS consoles."HP alleges the following predatory conduct:

1. Refusal to Provide Complete and Accurate Interface Specifications

Prior to acquiring CVIS, BSC produced a line of catheters named"Sonicath." These catheters were designed to operate on HPconsoles. At the same time, CVIS produced a line of cathetersnamed "Microline" that were designed to operate on CVIS consoles.After the merger, BSC replaced these catheters with a new linecalled "Ultracross" that combined the features of the Microlineand Sonicath catheters.

Customers advised HP that the Ultracross catheters did not spinproperly when used with HP consoles. Similar problems werereported with BSC's Microview, Microrail, and Discoverycatheters. HP claims this is a violation of the licensingagreement which required BSC to disclose "all necessary technicalspecifications, regulatory information and the like" for HP toensure its consoles were compatible with BSC catheters. (Pl.Exh.C. at 8.) HP further alleges that BSC sales representativesexploited these problems to discourage customers from purchasingconsoles or catheters from HP.

2. BSC Threatened to Sue HP and HP's Customers for Patent Infringement

HP marketed a catheter with an automatic pullback device thatwas based on the pullback patent listed in Exhibit A of thelicensing agreement, which was referenced in the LicensedProducts definition. The HP catheter directly competed with a BSCcatheter that had a pullback device. BSC claimed that HP was notauthorized to use the pullback patent and threatened to sue HPfor patent infringement. BSC also told customers that HP'spullback device infringed on a BSC patent and threatened to suecustomers who continued to use the HP automatic pullback device.HP alleges that the BSC's threats caused some potential customersto decide not to purchase HP catheters or consoles. HP claimsBSC's actions violated its agreement not to assert any of itspatent rights in "a way that would prevent HP from practicing anyof the Licensed Technology to manufacture, use, or sell LicensedProducts." (Pl.Exh. C at 2-3.)

3. BSC Refused to Create a Console Interface for the HP Scout Catheter

HP designed and developed a new catheter called "Scout" andprovided its technical specifications to BSC so that BSC couldensure that the catheter would operate with BSC consoles. BSC didnot create the requested interface. HP alleges that by not makinga meaningful effort to do so, BSC sought to make the cathetercommercially unsuccessful in furtherance of BSC's objective tomonopolize the catheter and console markets. HP claims thisrefusal violated BSC's obligation to "provide on all its IVUSconsoles . . . open interfaces to the IVUS products of the otherparty." (Pl.Exh. C at 7.)

4. BSC Discontinued the Sonicath Catheter, Refused to Provide HP with BSC's Discovery Catheter, and Failed to Sell its Spy Catheters

In 1992, BSC and HP entered into a joint development agreementto design and market BSC's Sonicath catheters which were intendedto be used exclusively with HP consoles. After the CVISacquisition, BSC developed a new line of catheters called"Discovery" and decided to discontinue the Sonicath line. BSC didnot supply HP with the Discovery catheter for resale, and decidednot to introduce the Spy catheter line. HP claims this violatesBSC's obligation to "make available to HP all BSC IVUSCatheters," (Pl.Exh. C. at 8), and "to begin sales of the `Spy'catheter immediately upon consummation of the CVIS acquisition,"(Id. at 11).

HP alleges that these decisions dramatically reduced the numberof catheters that were compatible with HP consoles anddiscouraged customers from purchasing HP consoles.

5. BSC Failed to Provide HP With the Required Notice of Its Redesign of an IVUS Catheter Hub

A hub is the fitting that connects the catheter to the console.It allows the console to spin the catheter at a fixed rate ofspeed. After acquiring CVIS, BSC redesigned the Sonicath hub tofit its (formerly CVIS's) consoles. BSC did not provide thetechnical specifications of the redesigned hub to HP prior tointroducing it into the market. HP claims that BSC willfullybreached the licensing agreement which required a partyintroducing a new product to provide the product's technicalspecifications to the other party "no later than 180 days priorto . . . commercial introduction" of that product. (Pl.Exh. C at8.)


In determining whether to dismiss a complaint for failure tostate a claim upon which relief may be granted under Fed.R.Civ.P. 12(b)(6), the Court must accept as true "thewell-pleaded facts as they appear in the complaint, extending[the] plaintiff every reasonable inference in his favor." Coynev. City of Somerville, 972 F.2d 440, 442-43 (1st Cir. 1992)(citing Correa-Martinez v. Arrillaga-Belendez, 903 F.2d 49, 51(1st Cir. 1990)); see also Hospital Bldg. Co. v. Trustees of RexHosp., 425 U.S. 738, 740, 96 S.Ct. 1848, 48 L.Ed.2d 338 (1976).The complaint may not be dismissed unless "`it appears beyonddoubt that the plaintiff can prove no set of facts in support ofhis claim which would entitle him to relief.'" Roeder v. AlphaIndus., Inc., 814 F.2d 22, 25 (1st Cir. 1987) (quoting Conleyv. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80(1957)).

This standard applies to an antitrust claim. See Caribe BMW,Inc. v. Bayerische Motoren Werke Aktiengesellschaft,19 F.3d 745, 748 (1st Cir. 1994). In antitrust cases "where the proof islargely in the hands of the [defendant], dismissals prior togiving the plaintiff ample opportunity for discovery should begranted sparingly." Hospital Bldg. Co., 425 U.S. at 746, 96S.Ct. 1848. However, sparingly does not mean never. A plaintiffmust allege sufficient facts in order to state each element ofthe antitrust violation. See C.R. Bard, Inc. v. MedicalElectronics Corp., 529 F. Supp. 1382, 1389 (D.Mass. 1982).

A. Monopoly Power

BSC argues that the complaint fails to allege its currentmarket power or define the market conditions during the relevanttime period. The antitrust law makes it unlawful for a firm to"monopolize, or attempt to monopolize, . . . any part of thetrade or commerce among the several States." Sherman Act § 2,15 U.S.C. § 2. To state a claim of monopolization, a plaintiff mustallege: 1) that the defendant possesses monopoly power in therelevant market; and 2) that the defendant willfully acquired,maintained or used that power by exclusionary means. See UnitedStates v. Grinnell, 384 U.S. 563, 570-71, 86 S.Ct. 1698, 16L.Ed.2d 778 (1966); Town of Concord v. Boston Edison Co.,915 F.2d 17, 21 (1st Cir. 1990). The two elements will be discussedseparately.

1. Monopoly Power

Monopoly power is often defined as "the power to raise pricesand exclude competition." United States v. E.I. du Pont deNemours & Co., 351 U.S. 377, 391, 76 S.Ct. 994, 100 L.Ed. 1264(1956); see also Aspen Skiing Co. v. Aspen Highlands SkiingCorp., 472 U.S. 585, 596 n. 20, 105 S.Ct. 2847, 86 L.Ed.2d 467(1985) (same). "The existence of such power ordinarily may beinferred from the predominant share of the market." Grinnell,384 U.S. at 571, 86 S.Ct. 1698. For pleading purposes,an allegation of market share of 70 percent has been held to bean adequate basis for an inference of power in a relevant market.International Audiotext Network, Inc. v. American Telephone andTelegraph Co., 893 F. Supp. 1207, 1217 (S.D.N.Y. 1994)(suggesting that a conclusory allegation of predominant marketshare, without more, would support dismissal, but dismissing onother grounds), aff'd, 62 F.3d 69 (2d Cir. 1995).

With respect to the IVUS catheter market, HP asserts that, onceBSC acquired CVIS, BSC controlled 90% of the IVUS cathetermarket. (Compl. at ¶¶ 2, 38.) Now that HP has left that marketsupposedly because of BSC's anti-competitive behavior, HP allegesthat BSC currently accounts for "substantially all" of the IVUScatheters sold in the market. (Id. ¶ 107).

Defendant argues that the market share prior to the licensingagreement is irrelevant because it is outdated, and that theseallegations concerning today's market shares are insufficient. Itasserts that the four year old market no longer exists, that theagreement substantially changed the competitive landscape, andthat a third party (EndoSonics Corporation) has developed into astronger competitor. Because BSC's allegations that its marketshare is declining and EndoSonics' share is growing are beyondthe four corners of the complaint, they cannot be considered inresolving this motion — although they will certainly be relevantat another stage of the litigation. See Data Gen. Corp. v.Grumman Sys. Support Corp., 36 F.3d 1147, 1184 (1st Cir. 1994)("Antitrust law generally seeks to punish and prevent harm toconsumers in particular markets, with a focus on relativelyspecific time periods."); United States v. Sargent,785 F.2d 1123, 1127 (3d Cir. 1986) (discussing changes in market sharebetween an indictment and trial); and Richter Concrete Corp. v.Hilltop Concrete Corp., 691 F.2d 818, 826 (6th Cir. 1982)(stating that a decline in an antitrust defendant's market shareduring the relevant period "belies whatever inference of capacityto monopolize that may be drawn from the size of its marketshare").

In light of the allegations concerning the pre-agreement marketshare, the high barriers to entry in the marketplace posed by thepatents, the regulatory clearance requirements, the need fortechnological expertise, and HP's precipitous withdrawal, theseallegations that BSC controls "substantially all" the cathetermarket are more than ample to meet pleading requirements withrespect to monopoly power in the IVUS catheter market in theUnited States. See International Audiotext, 893 F. Supp. at1217; C.R. Swaney Co., Inc. v. Atlas Copco North America, Inc.,CIV.A. No. 85-587-N, 1987 WL 33025, *13 (D.Mass. 1987) ("While itmay have been preferable to make more specific allegations as tomarket share, at this early stage of the litigation an allegationof `market dominance' is sufficient to survive a motion todismiss." (citation omitted)); but cf. Walker Distributing Co.v. Lucky Lager Brewing Co., 323 F.2d 1, 9 (9th Cir. 1963)(finding the allegation that defendant "was one of the largestmanufacturers of beer in the west" was deficient because nothingwas said about its position in the market in question).

A somewhat closer issue involves the console market. Thecomplaint states that as of 1995, HP controlled 50% of theconsole market, making it the market share leader, and CVIScontrolled 40%. There were no other significant competitors.(Compl. ¶¶ 33-34.) Once BSC merged with CVIS, it gained control ofover 40% of this market. (Id.) The complaint alleges that HPwas prevented from competing in that console market, and that BSCnow accounts for "substantially all of the IVUS consoles sold inthe United States." (Id. ¶ 107). Because HP was the marketleader in the manufacture of IVUS consoles, it is less clearwhether its withdrawal from the market now catapults BSC into thecurrent position of having monopoly powerin that market. For example, nothing is alleged with respect toBSC's current activities in manufacturing IVUS consoles. However,the Court need not determine whether the complaint edges over thelow pleading barrier with respect to the monopolization claimbecause plaintiff also asserts a claim of attemptedmonopolization, which easily salvages this claim.

2. Willful Acquisition and Maintenance of Monopoly Power

The second element of a Section 2 claim is the acquisition ormaintenance of monopoly power by other than such legitimate meansas patents, "superior product, business acumen, or historicaccident." Barry Wright Corp. v. ITT Grinnell Corp.,724 F.2d 227, 230 (1st Cir. 1983) (citing Grinnell, 384 U.S. at 570-71,86 S.Ct. 1698). The complaint must allege that the monopolistacquired or maintained that monopoly through exclusionaryconduct. See id. "`Exclusionary conduct is conduct, other thancompetition on the merits, that reasonably appears capable ofmaking a significant contribution to creating or maintaining amonopoly.'" Id. (quoting 3 P. Areeda & D. Turner, AntitrustLaw ¶ 626, at 83 (1978)). Conduct is exclusionary if it exceedsthe needs of ordinary business dealings and unnecessarilyexcludes competition from the relevant market. Id. The FirstCircuit succinctly framed the question: "Was [defendant's]conduct reasonable in light of its business needs or did itunreasonably restrict competition?" Id.

HP claims that BSC willfully acquired a monopoly by acquiringCVIS and SCIMED, and violating in bad faith the FTC's consentdecree imposed as a condition of the merger. HP contends that BSCduped the FTC into allowing the acquisitions by licensing itstechnology to HP, and then, by systematically breaching thelicensing agreement, BSC completely undercut any possibleremedial effect of the consent decree. The complaint sets forth alitany of alleged breaches that HP contends were done with thecalculated desire to exclude HP from the IVUS console andcatheter markets. The alleged breaches are that BSC: unreasonablyand in bad faith refused to provide accurate interfacespecifications for its catheters; threatened to sue customers whoused HP's pullback device; refused to create an interface for anHP catheter; reduced the number of catheters that are compatiblewith HP consoles; and failed to provide notice of the re-designof a catheter hub.

Defendant argues that by entering into the licensing agreementit released its monopoly position. However, the licensingagreement is a shield only if defendant acts in good faith tocomply with its terms. See CVD, Inc. v. Raytheon Co.,769 F.2d 842, 851 (1st Cir. 1985) ("[I]t is well established that anagreement which purports to license trade secrets, but inreality, is no more than a sham, or device designed to restrictcompetition, may violate antitrust laws.").

BSC argues that HP has presented a laundry list of minorcontract skirmishes under provisions of the licensing agreementwhich are not specifically mandated by the consent order, and donot rise to the level of predatory conduct. It relies on OlympiaEquip. Leasing Co. v. Western Union Telegraph Co., 797 F.2d 370,374-76 (7th Cir. 1986), which provides false consolation,although it provides a useful comparison. In Olympia, a federalregulatory agency (the Federal Communications Commission) hadrequired defendant to allow competition, and defendantvoluntarily undertook acts to "foster competition by subsidizingits competitors' selling costs." Id. at 375. The SeventhCircuit rejected an antitrust claim generated when defendantstopped these affirmative steps not required by any antitrustobligation, stating: "A firm that voluntarily encourages newcompetition in a tributary market should not be penalized bybeing made to pay damages under the antitrust laws." Id.

In contrast to Olympia, the steps to promote competition herewere not voluntary. They were contractual obligations which wereincorporated into a FTC Consent Order as a remedy for thelessening of competition caused by the acquisitions. At thispleading stage, the allegation of a bad faith violation of thelicensing agreement, specifically designed to promote a viable,independent competitor in the catheter market, permits aninference of exclusionary conduct.

BSC makes the fair point that the FTC's order was not designedto promote competition in the console market. It hints thatHP's design of the Scout catheter was unreasonable because it hada new console interface that would not run on either party'sinstalled base of consoles, and therefore, the breach of theagreement was not unreasonably restrictive. Again, BSC's argumentthat its refusal to provide an open interface was based onlegitimate business reasoning might be a fair defense on anexpanded record. The allegations of an unreasonable refusal tocooperate on the console interface are sufficient to support aninference of exclusionary conduct in the console market. SeeAspen Skiing, 472 U.S. at 603, 105 S.Ct. 2847 (affirming thejury finding that defendant's refusal to cooperate, where somecooperation was indispensable to effective competition, was notbased on legitimate business reasons and supported an "inferencethat the monopolist made a deliberate effort to discourage itscustomers from doing business with its smaller rival.").

B. Attempted Monopolization

To state a claim for attempted monopolization, a plaintiff mustallege: 1) that the defendant engaged in exclusionary conduct; 2)with the specific intent to obtain monopoly power; and 3) adangerous probability exists that the attempt will succeed. SeeSpectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 456, 113 S.Ct.884, 122 L.Ed.2d 247 (1993); CVD, Inc., 769 F.2d at 851 ("[A]specific intent to monopolize or restrain competition can oftenbe inferred from a finding of bad faith."). As shown above,allegations concerning the first two elements are sufficient.

To satisfy the last element of this claim, plaintiff mustallege facts to show that there was a dangerous probability thatBSC would achieve a monopoly as a result of the alleged actions.See Colorado Interstate Gas Co. v. Natural Gas Pipeline Co. ofAmerica, 885 F.2d 683, 693 (10th Cir. 1989). The probability ofsuccessfully monopolizing a market is usually assessed throughmarket share. See id. at 694. The greater share a defendantinitially controls, the greater the probability of achievingmonopoly status. See id. ("[A] 41% market share typicallyindicates that a firm has substantial economic power in themarket, and, therefore, has the tools at its disposal to elevateits market share to monopolistic levels."). However, "proximityto monopoly status is not enough; the defendant must also havethe ability to propel itself to monopolistic control over themarket." Id. at 694.

HP alleges that after acquiring CVIS, BSC purposely leveragedits IVUS catheter monopoly and engaged in anti-competitiveconduct to monopolize or attempt to monopolize the IVUS consolebusiness as well. BSC's alleged 90 percent market share ofcatheters and 40 percent market share of consoles, together withthe other allegations, are sufficient to demonstrate a dangerousprobability that an attempted monopolization would succeed ineither the catheter or console markets.

C. Antitrust Injury

Antitrust plaintiffs face an additional requirement to allegean "antitrust injury." See SAS of Puerto Rico v. Puerto RicoTel. Co., 48 F.3d 39, 43-44 (1st Cir. 1995); Caribe BMW, Inc.v. Bayerische Motoren Werke Aktiengesellschaft, 19 F.3d 745, 752(1st Cir. 1994). Failure to make such a pleading is a fataldefect. See SASPuerto Rico, 48 F.3d at 46 (affirming the dismissal of acomplaint that failed to allege an antitrust injury). The SupremeCourt defined this term as an "injury of the type the antitrustlaws were intended to prevent and that flows from that whichmakes the defendants' conduct unlawful." Brunswick Corp. v.Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489, 97 S.Ct. 690, 50L.Ed.2d 701 (1977).

Antitrust laws were designed to protect the "competitiveprocess that brings to consumers the benefits of lower prices,better products, and more efficient production methods."Clamp-All Corp. v. Cast Iron Soil Pipe Institute, 851 F.2d 478,486 (1st Cir. 1988). Based on this objective, the "presumptive[]`proper' plaintiff is a customer who obtains services in thethreatened market or a competitor who seeks to serve thatmarket." SAS Puerto Rico, 48 F.3d at 44. When a defendantengages in anticompetitive acts in an attempt to gain a monopoly,the competitor who is being driven out of the market hasstanding. See Wojcieszek v. New England Tel. & Tel. Co.,977 F. Supp. 527, 535 (D.Mass. 1997).

HP claims that BSC injured the competitive process by engagingin predatory acts which drove HP out of the market for bothconsoles and catheters, depriving consumers of a meaningfulchoice of competing innovative products. If proven, theseallegations are sufficient to show that BSC injured competition,which is exactly the type of injury the antitrust laws weredesigned to prevent.

D. State Claims

The motion to dismiss the state claims is DENIED.


For the reasons discussed herein, the Court DENIES motion todismiss (Docket No. 10).

1. The complaint (corrected) alleges that BSC has unlawfullymonopolized, or attempted to monopolize, the market for IVUScatheters and consoles in the United States in violation ofSection 2 of the Sherman Antitrust Act, 15 U.S.C. § 2 (Count I);violated Mass.Gen.L. ch. 93A (Count II); breached the licensingagreement (Count III); breached the implied covenant of goodfaith and fair dealing (Count IV); and has been unjustly enriched(Count V). The complaint seeks a declaratory judgment that HP isno longer required to make payments under the licensing agreement(Count VI), as well as treble damages and attorneys fees.

2. U.S. Patent No. 5,361,768. Patents for relatedtechnologies, U.S. Patent Nos. 5,485,846; 5,592,942; and5,759,153, have since been issued.

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