Forge Fair 2021 will be upon us later this month, and it may be a good time to consider some regulations and rules regarding trade shows. Legal Ease touched on this very subject in 2019, concentrating on unscrupulous acts by competitors at and away from the trade-show floor.
This column is directed more toward communication between competing exhibitors and includes tips for avoiding some pitfalls that may not be frequently considered. As always, keep in mind that the Forge Fair prospectus, your participation terms and conditions, your booth-space rental contract and/or your exhibitor services manual can help you navigate some of the more frequent questions and problems. The following list of competitor communication issues is by no means exhaustive. It is in-tended to be a primer for exhibitors, and it includes common regulations that are sometimes over-looked.
Many problematic issues arise from American anti-trust laws. The anti-trust laws are typically laid out in three major pieces of legislation. First, the Sherman Antitrust Act of 1890 (or the Sherman Act) prohibits monopolies and conduct that restrains free trade, including such things as price fixing and bid rigging. In essence, the Sherman Act seeks to ensure that customers can receive the best products or services at the lowest possible cost.
Second, the Clayton Antitrust Act of 1914 (or the Clayton Act) bans specific practices that are not clearly prohibited by the Sherman Act. These include such things as certain mergers and having a single person making business decisions for competing companies. The Clayton Act also allows private parties to recover triple damages for violations of either the Clayton or Sherman Acts and to obtain a court order prohibiting a company from engaging in the anticompetitive practice in the future.
Third, the Federal Trade Commission Act of 1914 (or the FTC Act) outlaws unfair competition and un-fair or deceptive practices and acts. All violations of the Sherman Act also violate the FTC Act. The Federal Trade Commission brings legal suits against people or companies that violate the FTC Act.
The bottom line is that violation of antitrust laws could lead to fines and/or imprisonment. As such, exhibitors and competitors must be mindful to practice the following conduct:
- Discourage the restriction of free trading and healthy competition among businesses.
- Discourage a single business from dominating a market or from engaging in abusive practices that lead to a dominant position (including predatory pricing, price gouging and refusing to deal).
- Help ensure that mergers and acquisitions do not threaten the ability of other companies to compete fairly in the marketplace.
The rules of fair trade apply equally to industry suppliers and participants alike. Even if your forge is relatively small compared to other forging companies, antitrust laws can still be of considerable concern. For example, forges and their customers may also benefit from such things as mergers and exclusive distributorship agreements. Sometimes, however, these business arrangements harm competitors and become antitrust violations. The following suggestions may be helpful to limit your exposure to legal action while visiting Forge Fair 2021.
Avoid discussing pricing or pricing issues with any competitor. If you attend a trade show and other competitors are discussing pricing, walk away immediately. You have little to gain and everything to lose.
Avoid discussing allocating customers or markets to competitors in exchange for receiving “protected” customers or territories. The divide-and-conquer strategy can be a violation of antitrust laws.
Be careful with “exclusive” contracts that prohibit your suppliers from selling to anyone else or that require your dealers to only sell your product. These contracts can create antitrust violations if they make it more difficult for new businesses to break into the marketplace.
- Never make a sale contingent on a customer purchasing a second product from you. These tie-in purchases can violate antitrust laws if they restrict competition for the second item.
- Never charge different prices to customers who are in competition with each other. For example, do not charge Customer A higher prices than Customer B in an attempt to help Customer A be more competitive.
- Never make claims about a competitor’s products or services unless you can prove those claims.
Finally, if you plan on disclosing a new apparatus or invention at Forge Fair that you would like to protect through a patent, be aware that public disclosure of the invention starts a clock. In the United States, an inventor has one year from the date of disclosure of an invention within which to file a pa-tent application.
However, the inventor or company also needs to be wary of two additional complications regarding disclosures of inventions. First, if an American patent application is to be filed after disclosure at Forge Fair, subsequent disclosures by others describing similar features of an invention can become hurdles to patent protection. Second, the laws of many foreign countries require “absolute novelty” regarding the topics of patent applications. That is to say, inventions described in patent applications cannot have been disclosed at all. As such, disclosures of inventions in America can preclude later foreign patent applications. Here, the best advice is to file a patent application prior to any disclosures at Forge Fair 2021.
David Resser is a patent attorney with Cooper Legal Group LLC of Independence, Ohio. He has expertise as a mechanical engineer in foundry equipment manufacturing. He can be reached at DRessfirstname.lastname@example.org.