9810237
UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
COMMISSIONERS:
- Timothy
J. Muris, Chairman
- Sheila
F. Anthony
- Mozelle
W. Thompson
- Orson
Swindle
- Thomas
B. Leary
In the Matter of
Asahi Chemical Industry Co., Ltd., a
corporation. |
Docket
No. C-4051
DECISION AND ORDER
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The Federal Trade Commission having
initiated an investigation of certain acts and practices of Respondent,
Asahi Chemical Industry Co., Ltd., and Respondent having been furnished
thereafter with a copy of the draft of Complaint that the Bureau of
Competition presented to the Commission for its consideration and which,
if issued, would charge Respondent with violations of Section 5 of the
Federal Trade Commission Act, as amended, 15 U.S.C. § 45; and
Respondent, its attorneys, and counsel for
the Commission having thereafter executed an Agreement Containing Consent
Order ("Consent Agreement"), containing an admission by respondent of all
the jurisdictional facts set forth in the aforesaid draft of Complaint, a
statement that the signing of said Consent Agreement is for settlement
purposes only and does not constitute an admission by respondent that the
law has been violated as alleged in such Complaint, or that the facts as
alleged in such Complaint, other than jurisdictional facts, are true, and
waivers and other provisions as required by the Commission's Rules; and
The Commission having thereafter considered
the matter and having determined that it had reason to believe that
respondent has violated the said Act, and that a Complaint should issue
stating its charges in that respect, and having accepted the executed
Consent Agreement and placed such Consent Agreement on the public record
for a period of thirty (30) days for the receipt and consideration of
public comments, now in further conformity with the procedure described in
Commission Rule 2.34, 16 C.F.R. § 2.34, the Commission hereby issues its
complaint, makes the following jurisdictional findings and issues the
following Order:
- 1. Respondent
Asahi Chemical Industry Co., Ltd. is a corporation organized and
existing under the laws of Japan, with its office and principal place of
business located at 1-2 Yurakucho 1-chome, Chiyoda-ku, Tokyo, Japan.
2. The Federal Trade Commission has
jurisdiction of the subject matter of this proceeding and of the
Respondent, and the proceeding is in the public interest.
ORDER
I.
IT IS ORDERED that, as
used in this Decision and Order, the following definitions shall apply:
- A. "Asahi
Chemical" or "Respondent" means Asahi Chemical Industry Co., Ltd., its
directors, officers, employees, agents, representatives, predecessors,
successors, and assigns; its subsidiaries, divisions, groups, and
affiliates controlled by Asahi Chemical Industry Co., Ltd.; and the
respective directors, officers, employees, agents, representatives,
successors, and assigns of each.
B. "Commission" means the Federal Trade
Commission.
C. "MCC" means microcrystalline cellulose, and
includes any product consisting in whole or in part of microcrystalline
cellulose. The term MCC shall not include a Drug Product. The term MCC
shall not include a food product in its finished form that is intended
for direct human consumption and not as an ingredient or input into
another product.
D. "Drug Product" means a finished dosage form
(for example, tablet, capsule, or solution) that contains an active drug
ingredient in association with inactive ingredients.
E. "Producer of MCC" means any person, firm,
company, corporation, partnership, joint venture, or other entity that
produces or manufactures MCC. The term Producer of MCC shall include
FMC.
F. "Excipient" means an inert or inactive
substance used in the production of pharmaceutical products, including
without limitation any product used as a binder, disintegrant, or super
disintegrant. The term Excipient shall include MCC.
G. "FMC" means FMC Corporation, its directors,
officers, employees, agents, representatives, predecessors, successors,
and assigns; its subsidiaries, divisions, groups, and affiliates
controlled by FMC Corporation; and the respective directors, officers,
employees, agents, representatives, successors, and assigns of each.
H. "License" means a written agreement between
Respondent and a Producer of MCC other than FMC that provides for the
license, cross-license, or other transfer of intellectual property that
is protected by patent, copyright, and/or trade secret law and that is
related to MCC.
I. "Joint Venture Agreement" means a written
agreement between Respondent and a Producer of MCC other than FMC that
provides that the parties to the agreement shall collaborate in the
production or distribution of MCC.
J. "Written Communication" means any non-oral
statement, information, comment, question, or answer, and includes any
letter, memorandum, fax, or electronic mail.
K. "United States" means the fifty states, the
District of Columbia, the Commonwealth of Puerto Rico, and all
territories, dependencies, and possessions of the United States of
America.
L. "Officers" means the President and all
Executive Vice Presidents of Asahi Chemical Industry Co., Ltd.
II.
IT IS FURTHER ORDERED that
Respondent shall cease and desist from, directly, indirectly, or through
any corporate or other device, in or affecting commerce, as "commerce" is
defined in the Federal Trade Commission Act, inviting, entering into or
attempting to enter into, organizing or attempting to organize,
implementing or attempting to implement, continuing or attempting to
continue, soliciting, or otherwise facilitating any combination,
agreement, or understanding, either express or implied, with any Producer
of MCC to allocate or divide markets, customers,
contracts, lines of commerce, or geographic territories in connection with
the sale of MCC.
III.
IT IS FURTHER ORDERED that
Respondent shall cease and desist from, directly, indirectly, or through
any corporate or other device, in or affecting commerce, as "commerce" is
defined in the Federal Trade Commission Act, inviting, entering into or
attempting to enter into, implementing or attempting to implement,
continuing or attempting to continue, soliciting, or otherwise
facilitating any combination, agreement, or understanding, either express
or implied, with any Producer of MCC that Respondent and/or such Producer
of MCC shall refrain in whole or in part from producing, selling, or
marketing MCC.
IV.
IT IS FURTHER ORDERED
that:
- A. For a period of ten (10) years after
the date on which this Decision and Order becomes final, Respondent
shall cease and desist from, directly, indirectly, or through any
corporate or other device, in or affecting commerce, as "commerce" is
defined in the Federal Trade Commission Act, inviting, entering into or
attempting to enter into, implementing or attempting to implement,
continuing or attempting to continue, soliciting, or otherwise
facilitating any combination, agreement, or understanding, either
express or implied, that FMC shall distribute, sell, merchandise, or
otherwise market in the United States MCC produced by Respondent.
B. For a period of five (5) years after the date on which this Decision
and Order becomes final, Respondent shall cease and desist from,
directly, indirectly, or through any corporate or other device, in or
affecting commerce, as "commerce" is defined in the Federal Trade
Commission Act, inviting, entering into or attempting to enter into,
implementing or attempting to implement, continuing or attempting to
continue, soliciting, or otherwise facilitating any combination,
agreement, or understanding, either express or implied, that FMC shall
distribute, sell, merchandise, or otherwise market in the United States
any Excipient produced by Respondent.
V.
IT IS FURTHER ORDERED
that:
- A. It shall not, of itself, constitute a
violation of Paragraph II. or Paragraph III. of this Decision and Order
for Respondent to enter into, attempt to enter into, or comply with a
written agreement that is reasonably related to a lawful License or
lawful Joint Venture Agreement and that is reasonably necessary to
achieve its procompetitive benefits.
B. It shall not, of itself, constitute a violation of Paragraph II. or
Paragraph III. of this Decision and Order for Respondent to enter into,
attempt to enter into, or comply with a written agreement that: (1)
licenses a Producer of MCC to use, on an exclusive basis and in any
geographic area, any trademark owned by Respondent, or (2) licenses
Respondent to use, on an exclusive basis and in any geographic area, a
trademark owned by a Producer of MCC.
C. It shall not, of itself, constitute a violation of Paragraph II. or
Paragraph III. of this Decision and Order for Respondent to threaten,
initiate, or settle litigation to protect its intellectual property that
is protected by patent, copyright, and/or trade secret law, provided
that there is a reasonable basis in law and in fact for the claims
alleged by Respondent in such litigation.
D. It shall not, of itself, constitute a violation of Paragraph IV. of
this Decision and Order for Respondent to enter into, attempt to enter
into, or comply with an agreement to sell to FMC, on a temporary basis,
any grade of MCC produced by both Respondent and FMC, provided that
FMC's production of such grade of MCC is insufficient to meet FMC's
actual or forecast demand due to plant closure, governmental action,
health or safety hazards, a mechanical failure or a failure in the
chemical reaction process in FMC's production facility, Act of God or
Force Majeure.
E. It shall not, of itself, constitute a violation of Paragraph IV. of
this Decision and Order for Respondent to enter into, attempt to enter
into, or comply with an agreement to sell MCC to FMC for use by
customers in food products only (hereinafter referred to as a
"Distribution Agreement"). Provided, however, that for a period of ten
(10) years after the date on which this Decision and Order becomes
final, this exclusion shall not apply to any agreement that authorizes
FMC to distribute, sell, merchandise or otherwise market MCC for use in
pharmaceutical products or other tablets.
F. It shall not, of itself, constitute a violation of Paragraph IV. of
this Decision and Order for Respondent to sell to FMC MCC meeting the
current specifications of Ceolus, Grade KG-801, as set forth in
confidential Exhibit A, attached to this Decision and Order, provided
that such product is re-sold by FMC to the single customer identified in
confidential Exhibit B, attached to this Decision and Order.
G. It shall not, of itself, constitute a violation of Paragraph II. or
Paragraph III. of this Decision and Order for Respondent to enter into,
attempt to enter into, or comply with a written Distribution Agreement
providing FMC with the right to be Respondent's sole or exclusive
re-seller of MCC for use by customers in food products only. Provided,
however, that for a period of ten (10) years after the date on which
this Decision and Order becomes final, this exclusion shall not apply to
any agreement that authorizes FMC to distribute, sell, merchandise or
otherwise market MCC for use in pharmaceutical products or other
tablets.
H. Where, pursuant to a lawful Joint Venture Agreement, Respondent and a
Producer of MCC other than FMC collaborate in the creation of new MCC
manufacturing capacity, it shall not, of itself, constitute a violation
of Paragraph II. or Paragraph III. of this Decision and Order for
Respondent to enter into, attempt to enter into, or comply with a
written agreement to distribute, sell, merchandise or otherwise market,
on an exclusive or non-exclusive basis, the MCC that is the output of
such new manufacturing capacity.
I. In any action by the Commission alleging violations of this Decision
and Order, Respondent shall bear the burden of proof in demonstrating
that its conduct satisfies the conditions of Paragraph(s) V.A., V.B.,
V.C., V.D., V.E., V.F., V.G., and/or V.H. of this Decision and Order.
VI.
IT IS FURTHER ORDERED that
for a period of six (6) years after the date on which this Decision and
Order becomes final:
- A. Respondent shall retain, for a period
of three (3) years from the date of delivery or receipt thereof, a copy
of each Written Communication between Respondent and FMC relating to the
pricing, marketing, or sale of MCC in or into the United States.
-
- B. Upon written request from any duly
authorized representative of the Commission, Respondent shall produce to
the Commission, at its offices in Washington D.C. and within a
reasonable period of time: (1) a copy of each Written Communication
between Respondent and FMC, and (2) copies of all other documents
reasonably necessary for the purpose of determining or securing
compliance with this Decision and Order. The requirements of this
Paragraph VI.B. shall apply to all documents in the possession or under
the control of Respondent without regard to whether the documents are
physically located in the United States or in another jurisdiction.
VII.
IT IS FURTHER ORDERED
that:
- A. Within sixty (60) days after the date
this Decision and Order becomes final, Respondent shall submit to the
Commission a verified written report setting forth in detail the manner
and form in which that Respondent has complied and is complying with
this order.
-
- B. One (1) year after the date this
Decision and Order becomes final, annually for the next nine (9) years
on the anniversary of the date this Decision and Order becomes final,
and at other times as the Commission may require, Respondent shall file
with the Commission: (1) a verified written report setting forth in
detail the manner and form in which it has complied and is complying
with this Decision and Order.
C. Respondent shall file with the Commission, within thirty (30) days
after its effective date: (1) a copy of each written agreement entered
into by Respondent and FMC that relates to MCC or any Excipient, (2) a
copy of each License or Joint Venture Agreement affecting commerce as
"commerce" is defined in the Federal Trade Commission Act, and (3) a
copy of each written agreement between Respondent and a Producer of MCC
that is ancillary or related to a License or Joint Venture Agreement
affecting commerce as "commerce" is defined in the Federal Trade
Commission Act.
VIII.
IT IS FURTHER ORDERED that
Respondent shall notify the Commission at least thirty (30) days prior to
any proposed change in the corporate respondents such as dissolution,
assignment, sale resulting in the emergence of a successor corporation, or
the creation or dissolution of subsidiaries or any other change in the
corporation that may affect compliance obligations arising out of the
order.
IX.
IT IS FURTHER ORDERED
that, for the purpose of determining or securing compliance with this
order, upon written request, Respondent shall permit any duly authorized
representative of the Commission:
- A. Access, during office hours and in
the presence of counsel, to all facilities and access to inspect and
copy all books, ledgers, accounts, correspondence, memoranda and other
records and documents in the possession or under the control of
Respondent relating to any matters contained in this Decision and Order;
and
-
- B. Upon five days' notice to Respondent
and without restraint or interference from it, to interview officers,
directors, or employees of Respondent.
X.
IT IS FURTHER ORDERED that
Respondent shall:
- A. Within thirty (30) days after the
date on which this Decision and Order becomes final, send by first class
mail a copy of this Decision and Order and a Japanese translation
thereof to all directors, Officers, and management employees with
responsibility for the pricing, marketing or sale of MCC (hereinafter
referred to as "Management Employees");
-
- B. Mail by first class mail a copy of
this Decision and Order and a Japanese translation thereof to each
person who becomes a director, Officer, or Management Employee, within
thirty (30) days of the commencement of such person's employment or
affiliation with Respondent; and
-
- C. Require each of its directors,
Officers, and Management Employees to sign and submit to Respondent
within thirty (30) days of the receipt thereof a statement that: (1)
acknowledges receipt of the Decision and Order; (2) represents that the
undersigned has read and understands the Decision and Order; and (3)
acknowledges that the undersigned has been advised and understands that
non-compliance with the order may subject Asahi Chemical Industry Co.,
Ltd. to penalties for violation of the order.
XI.
IT IS FURTHER ORDERED that
this Decision and Order shall terminate on June 12, 2022, except as
otherwise provided in this Decision and Order.
By the Commission, Chairman Muris not
participating.
Donald S. Clark
Secretary
ISSUED: June 12, 2002
SEAL
Confidential Exhibits A and B
[Redacted From Public Record Version]
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