Your firm, Ellis Pets Consolidated, has developed a state-of-the-art process for producing see-through plastic hamster cages. The plastic is thin, so it does not distort the pet owner’s view of the hamster, yet hard enough to resist the hamster’s gnawing, and is quite inexpensive in a market with great price elasticity. The Ellis process is strictly know-how. On advice of patent counsel, Ellis has not sought any patent protection. Ellis has achieved a dominant share in the U.S. market with its line of see-through hamster cages. Now, a large international plastics manufacturer headquartered in Lyon, France—Vivian Plastique, S.A.—wishes to license the process from Ellis to apply it to other uses.
1. Vivian sees the process as so valuable that it is willing to agree never to use the process for applications within the pet industry anywhere in the world. In fact, Vivian is willing to agree never to enter the pet industry in any way. Analyze for Ellis the enforceability of these proposed agreements by Vivian. Include in your analysis alternatives that would be preferable for Ellis.
2. The hamster cage manufacturers of Europe suddenly become aware of the threat posed by Ellis. They agree to apply concerted pressure on pet stores throughout Europe to shut Ellis out. Ellis brings an antitrust action in the U.S. District Court for the Southern District of Florida. Does the court have jurisdiction over the European hamster cage manufacturers? Will Ellis be able to enforce discovery requests in Europe?
