After three years of trial, in the final verdict yesterday, Shang Higher People's Court ordered Johnson & Johnson Medical China Ltd. and Johnson & Johnson Medical Shanghai Ltd. to compensate its Chinese dealer 530,000 yuan (85,800 USD) for manipulating prices of surgical suture and violating China's anti-monopoly laws.  

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Rainbow Medical Equipment & Supply Company is the former dealer of Johnson & Johnson (JNJ) to sell medical devices such as surgical sutures and anastomats for JNJ. The two companies had 15 years of cooperation previously. In January 2008, Rainbow Medical and JNJ signed a sales contract, which specified that Rainbow Medical should sell JNJ's products in designated areas. During the contract period, Rainbow Medical shouldn't sell JNJ's products at the prices that were lower than what JNJ had set.

In March 2008, in a public surgical suture tender held by Peking University People Hospital, Rainbow Medical won the bid with the lowest quotation. However, JNJ gave Rainbow Medical a warning for its low price. Later, JNJ stopped supplies of surgical suture products to Rainbow Medical completely. In 2009, JNJ didn't renew its contract with Rainbow Medical any more.

In August 2010, Rainbow Medical sued Johnson & Johnson Medical China Ltd. and Johnson & Johnson Medical Shanghai Ltd. in Shanghai No.1 Intermediate People's Court. This is also the first civil case on monopoly contract that is heard by China's court since China implemented the antimonopoly law. So the lawsuit is also called "China's first vertical monopoly case".

Rainbow Medical demanded compensation of 14 million yuan for its economic losses as the company suffered from the termination of the contract. In May 2012, Shanghai No.1 Intermediate People's Court revoked the lawsuit of Rainbow Medical in the first verdict because the judge deemed the sales contract was not a monopoly agreement as stipulated in China's anti-monopoly law.   

Rainbow Medical appealed to Shang Higher People's Court later. Yesterday, Shanghai Higher People's Court ruled that JNJ's acts have violated China's anti-monopoly law, and JNJ should compensate the losses of Rainbow Medical. The court orders JNJ to pay Rainbow Medical 530,000 yuan within 10 days after the sentencing takes effect.