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No Lift Off to Condom Maker’s Conspiracy Case

(CN) - A federal judge has ended a dispute over retail-shelf space between the makers of Trojan and Kimono condoms after three years of litigation that produced "15 million pages of documents and dozens of discoveries."

Though Mayer Laboratories claims that Church & Dwight violated antitrust laws, it failed to support these allegations, U.S. District Judge Edward Chen ruled Thursday.

Mayer, maker of Kimono condoms, argued that Church & Dwight offered retailers a wholesale price rebate in exchange for a commitment to devote certain condom shelf space to Trojan.

Retailers use "planogram agreements" to diagram product placement.

"Mayer alleges that C&D's planogram rebate program operates to foreclose competition from vital retail display space and hence sales," the San Francisco court summarized. "Mayer also alleges that C&D has engaged in other anticompetitive conduct, including abusing its position as category captain for certain retailers to exclude its rivals from, or at least disadvantage them in, the condom retail market."

While Church & Dwight's Trojan products account for 75 percent of retail condom sales nationally, Mayer's Kimono condoms hold a share of less than one-half of 1 percent.

The condom makers have been locked in litigation for more than three years after Chen had initially found that Mayer produced viable anticompetitive claims.

In addition to Church & Dwight's antitrust breach, Mayer claimed Trojan's "ultrathin" sheaths infringed on its latex condom mark.

"The parties have conducted extensive discovery of over 15 million pages of documents and dozens of depositions," Chen wrote.

But all this work will not lead to a trial.

"Despite this voluminous record, Mayer has been unable to proffer any direct, admissible evidence of retailers switching or removing rival condom brands from their shelves as a result of any coercive effect of C&D's planogram program," the 65-page decision states. "Nor has Mayer submitted any admissible evidence that C&D misused its category captain positions to the detriment of its rivals."

Chen noted that Mayer failed to take the deposition of, or obtain direct evidence from, retail employees or others regarding Church & Dwight's alleged coercive and anticompetitive conduct.

"Without any such direct evidence, the court is left largely with Mayer's (and its experts') own theory based largely on a rough correlation between C&D's moderately increasing market share and Mayer's moderately decreasing market share," Chen wrote (parentheses in original).

"Accordingly, having considered the parties' briefs, accompanying submissions, oral argument, and all evidence of record, the court denies [Church & Dwight's] motion for summary judgment as to tortious interference with contract, and grants the motion as to all other claims," he added.

Regarding the ultrathin trademark, Chen noted that "'microthin' is used by the parties merely as a type of Kimono condom and a descriptive phrase for certain Trojan condoms."

"Mayer has failed to establish a genuine issue of fact whether 'microthin' is a valid mark (given the lack of substantial evidence of secondary meaning) and whether its use by C&D is likely to cause consumer confusion," the decision states (parentheses in original).

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