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Antitrust Keyed to Areeda, 8th Ed.
Dr. Miles Medical Co. v. John D. Park & Sons, Co.
Citation:
220 U.S. 373 (1911)Facts
Dr. Miles Medical Company manufactured proprietary medicines using secret formulas and sold them through a network of wholesalers and retailers. To maintain uniform prices, Dr. Miles established two types of contracts: “Consignment Contracts” with over 400 wholesalers and “Retail Agency Contracts” with approximately 25,000 retailers. These contracts required distributors to sell only to authorized agents at fixed minimum prices. The defendant, John D. Park & Sons Company, refused to enter into these restrictive agreements. Instead, Park allegedly induced Dr. Miles’ distributors to violate their contracts by selling the medicines to Park, which then sold them at cut-rate prices. Dr. Miles claimed this undermined its business model, as retailers were unwilling to stock and promote its products if they couldn’t earn sufficient profits due to price competition. Dr. Miles sued Park for inducing breach of contract, seeking an injunction and damages.
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