August 10, 2010

Franchise Report

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Chambers USA 2010:
Nationwide - Franchising
Chambers USA 2010 recognizes Baker Botts for its Franchising Practice for the first time in the firm's history, calling the growing eight-partner interdisciplinary team “quick and responsive” and “a top-drawer team that is tapped into legislative changes in DC and is at the forefront of franchise issues.” Further information is available here.

Leegin: All Bark, No Bite?

In the summer 2010 issue of The Franchise Lawyer, Baker Botts’ lawyers Victor Vital and Elizabeth Wirmani write about the case Leegin Creative Leather Products, Inc. v. PSKS, Inc. The authors discuss the uncertain future of the “rule of reason” standard for minimum resale price maintenance and the franchise community’s reluctance to embrace Leegin.

Three years ago this summer, the U.S. Supreme Court abandoned the 100 year-old Dr. Miles doctrine that established a rule of per se illegality for minimum resale price maintenance (RPM) agreements in favor of the more lenient “rule of reason” test. Leegin Creative Leather Products, Inc. v. PSKS, Inc., 551 U.S. 877 (2007). Under the rule of reason standard, courts are forced to consider the pro-competitive effects of vertical price restraints, only striking down such restrictions where the anti-competitive effects outweigh the competitive advantages. The Leegin decision—heralded by those favoring economic analysis of vertical price restraints—bookends an earlier opinion, State Oil v. Khan, where the Court declared that maximum RPM agreements should be reviewed under the rule of reason standard. State Oil v. Khan, 522 U.S. 3 (1997).

To read the full article, please click here.

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