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Resale Price Maintenance

Feature Work:
Antitrust Vertical Myopia: The Allure of High Prices, Arizona Law Review 50: 261-287 (2008)

Collection

Year Landmark Notes
1889 Fowle v. Park, 131 U.S. 88 (1889) The Supreme Court dismisses the argument that RPM agreements are unreasonable restraints of trade.
1902 E. Bement & Sons v. National Harrow Co., 186 U.S. 70 (1902) The Supreme Court holds that RPM agreements related to patented products are legal, because the very object of intellectual property laws monopoly.
1908 Bobbs-Merrill Co. v. Straus, 210 U.S. 339 (1908) The Supreme Court refuses to enforce a retail-price notice printed in the book, when the publisher and the retailer have no agreement.  The Court chooses not to address the legality of RPM agreements.
1912 Henry v. A.B. Dick, 224 U.S. 1 (1912) Patents convey the right to impose restrictions on the right to resale the patented items, so long as these restrictions are related only to the patented items.
1913 Bauer & Cie v. O’Donnell, 229 U.S. 1 (1913) Selling below minimum prices stated in a patent license agreement does not constitute patent infringement.
1917 Straus v. Victor Talking Mach. Co., 243 U.S. 490 (1917) The Supreme Court restates the per se prohibition against RPM in light of common confusions.
1918 Boston Store of Chicago v. American Graphophone Co., 246 U.S. 8 (1918) The Supreme Court clarifies again the per se illegality of RPM.
1919 U.S. v. Colgate & Co., 250 U.S. 300 (1919) Manufacturers may unilaterally refuse to deal with retailers that do not follow suggested retail pricing.
1926 United States v. General Electric Co., 272 U.S. 476 (1926)

Manufacturers may fix retail prices on goods delivered to the retailers on consignment or sold by agents.

The Supreme Court upholds the right of a patent holder to limit the methods of resale and resale prices.
1931 California’s Fair Trade Act, 1931 Cal. Stat. 278 Allowing RPM for branded goods in California
1933 Amendment to the California Fair Trade Act, 1933 Cal. Stat. 260

Allowing RPM for all goods.

Sixteen states follow California: Arizona (1936), Illinois (1935), Iowa (1935), Kentucky (1936), Louisiana (1936), Maryland (1935), New Jersey (1935), New York (1935), Ohio (1935), Oklahoma (1936), Oregon (1935), Pennsylvania (1936), Rhode Island (1936), Virginia (1936), Washington (1935), and Wisconsin (1935)
1936 Old Dearborn Distrib. Co. v. Seagram Distillers Corp., 299 U.S. 183 (1936) The Supreme Court upholds the constitutionality of pro-RPM state statutes.
1942 U.S. v. Univis Lens Co., 316 U.S. 241 (1942)  
1948 United States v. Paramount Pictures, Inc., 334 U.S. 131 (1948) Copyrights do not convey the right to set resale prices.
1951 Schwegmann Bros. v. Calvert Distillers Corp, 341 U.S. 384 (1951) state laws cannot extend the Miller-Tydings exemption to enforce RPM agreements against third parties.
1952 The McGuire Act, 66 Stat. 631 (1952) Congress addresses Schwegmann Bros and extend the scope of the Miller-Tydings Act to enforcements of RPM agreements against third parties.
1964 Simpson v. Union Oil Co., 377 U.S. 13 (1964) Consignment (narrowing GE).
1967 United States v. Arnold, Schwinn & Co., 388 U.S. 365 (1967) The Supreme Court extends the per se prohibition to non-price vertical restraints, such as exclusive distribution territories.
1968 Albrecht v. Herald Co., 390 U.S. 145 (1968) The Supreme Court holds that maximum RPM is per se illegal, like other forms of RPM.
1975 The Consumer Goods Pricing Act Congress Repeals the Miller-Tydings and McGuire Acts.
1977 Continental T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36 (1977) The Supreme Court overrules Arnold, Schwinn & Co. (1967), holding that such non-price vertical restraints would be reviewed under the rule of reason.
1980 California Liquor Dealers v. Midcal Aluminum, 445 U.S. 97 (1980). The Supreme Court Reaffirms the RPM per se illegality rule.
1982 Rice v. Norman Williams, 458 U.S. 654 (1982) The Supreme Court reaffirms the per se illegality rule.
1984 Monsanto Co. v. Spray-Rite Serv. Corp, 465 U.S. 752 (1984) The Supreme Court reaffirms the per se illegality rule, despite the urging of the Solicitor General.
1988 Business Electronics Corp. v. Sharp Electronics Corp., 485 U.S. 717 (1988) An agreement between a manufacturer and a retailer to terminate price-cutting retailer is lawful, so long as the parties do not set prices for the remaining retailer.
1997 State Oil Co. v. Khan, 522 U.S. 3 (1997) The Supreme Court overrules Albrecht (1968), holding that maximum RPM should be examined under the rule of reason.
2007 Leegin Creative Leather Products, Inc. v. PSKS, Inc., 127 S.Ct. 2705 (2007) The Supreme Court overrules Dr. Miles, holding that all RPM agreements should be examined under the rule of reason.
  • Adams, Walter, Resale Price Maintenance: Fact and Fancy, Yale Law Journal 64: 967-990 (1955).
  • Bowman, Ward S., The Prequisites and Effects of Resale Price Maintenance, University of Chicago Law Review 22: 825-873 (1955).
  • Butz, David A., Does the Per Se Rule Deter Vertical Price Fixing?, Economic Inquiry 34: 770-780 (1996).
  • Butz, David A., Vertical Price Controls with Uncertain Demand, Journal of Law and Economics 40: 433-459 (1997).
  • Butz, David A. and Andrew N. Kleit, Are Vertical Restraints Pro- or Anticompetitive? Lessons from Interstate Circuit, Journal of Law and Economics 44: 131-159 (2001).
  • Comanor, William S., Vertical Price-Fixing, Vertical Market Restrictions, and the New Antitrust Policy, Harvard Law Review 98: 983-1002 (1985).
  • Correia, Edward O., Resale Price Maintenance – Searching for a Policy, Journal of Legislation 18: 187-248 (1992).
  • Deneckere, Raymond et al., Demand Uncertainty and Price Maintenance: Markdowns as Destructive Competition, American Economic Review 87: 619-641 (1997).
  • Ewald T. Grether, Price Control Under Fair Trade Legislation (1939).
  • Goldberg, Victor P., The Free Rider Problem, Imperfect Pricing, and the Economics of Retailing Services, Northwestern University Law Review 79: 736-757 (1984).
  • Grimes, Warren S., The Seven Myths of Vertical Price Fixing: The Politics and Economics of a Century-Long Debate, Southwestern University Law Review 21: 1285-1316 (1992).
  • Haring, Albert, Retail Price Cutting and its Control by Manufacturers (1935).
  • Ippolito, Pauline M., Resale Price Maintenance: Empirical Evidence from Litigation, Journal of Law and Economics 34: 263-294 (1991).
  • Johnson, Roy W. et. al, The Control of Resale Prices: Merchandising and Legal Phases of Price-Cutting, Price Maintenance and Quantity Discounts (1936).
  • Kleit, Andrew N., Efficiencies without Economists: The Early Years of Resale Price Maintenance, Southern Economic Journal 54: 597-619 (1993).
  • Klein, Benjamin and Keith Leffler, The Role of Market Forces in Assuring Contractual Performance, Journal of Political Economy 89: 615-641 (1981).
  • Klein, Benjamin and Kevin M. Murphy, Vertical Restraints as Contract Enforcement Mechanisms, Journal of Law and Econoics 31: 265-297 (1988).
  • Marvel, Howard P., The Resale Price Maintenance Controversy: Beyond the Conventional Wisdom, Antitrust Law Journal 63: 59-92 (1994).
  • Marvel, Howard P. and Stephen McCafferty, Resale Price Maintenance and Quality Certification, Rand Journal of Economics 15: 346-359 (1984).
  • Marvel, Howard P. and Stephen McCafferty, The Welfare Effects of Resale Price Maintenance, Journal of Law and Economics 28: 363-379 (1985).
  • Joseph Cornwall Palamountain, The Politics of Distribution (1955).
  • Peritz, Rudolph J.R., The Genealogy of Vertical Restraints Doctrine, Hastings Law Journal 40: 511-576 (1989).
  • Peritz, Rudolph J.R., Dr. Miles Medical Company, in Antitrust Stories 61-90 (Eleanor M. Fox and Daniel A. Crane eds., 2007).
  • Pitofsky, Robert, In Defense of Discounters: The No-Frills Case for a Per Se Rule Against Vertical Price Fixing, Georgetown Law Journal 71: 1487-1495 (1983).
  • Posner, Richard A., The Next Step in the Antitrust Treatment of Restricted Distribution: Per Se Legaility, University of Chicago Law Review 48: 6-26 (1981).
  • Seligman, Edwin R.A. and Robert A. Love, Price Cutting and Price Maintenance: A Study in Economics (1932).
  • Silcock, T. H., Some Problems of Price Maintenance,

    The Economic Journal 48: 42-51 (1938).

  • Springer, Robert F. and H.E. Frech III, Deterring Fraud: The Role of Resale Price Maintenance, Journal of Business 59: 433-447 (1986).
  • Taussig, Frank W., Price Maintenance, American Economic Review 6: 170-184 (1916).
  • Telser, Lester G., Why Should Manufacturers Want Fair Trade, Journal of Law and Economics 3: 86-105 (1960).
  • Tosdal, H. R., Price Maintenance, American Economic Review 8: 28-47 (1918).
  • Tosdal, H. R., Price Maintenance, American Economic Review 8: 283-305 (1918).
  • Yamey, Basil Selig, The Economics of Resale Price Maintenance (1954).