Leegin v. PSKS: New Standard, New Challenges

Abstract

In Leegin Creative Leather Products, Inc v. PSKS, Inc., the Supreme Court, taking heed of years of economic research identifying procompetitive benefits of vertical resale price maintenance (RPM), declared that the practice shall be evaluated under the rule of reason analysis. In a 5-4 split, the Court explicitly overruled Dr. Miles Medical Co. v. John D. Park & Sons Co., in which ninety-six years ago, the Court pronounced RPM to be per se illegal. This paper argues that the Court's decision was correct, but notes that the new standard creates a whole host of new problems, from uncertainty for market players, to a potential adverse interaction with the First Sale Doctrine in patent law.