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Image Tech. Servs. v. Eastman Kodak Co.

United States Court of Appeals for the Ninth Circuit

September 19, 1996, Argued, Submitted, San Francisco, California, ; August 26, 1997, Filed

Nos. 96-15293, 96-15296, Nos. 96-15293, 96-15296

Opinion

 [***1066]   [*1200]  OPINION

BEEZER, Circuit Judge:

Plaintiffs-Appellees Image Technical Services, and ten other independent service organizations ("ISOs") that service Kodak photocopiers and micrographic equipment sued the Eastman Kodak Co. ("Kodak") for violations of the Sherman Act. The ISOs alleged that Kodak used its monopoly in the market for Kodak photocopier and micrographic parts to create a second monopoly in the equipment service [**2]  markets. A jury verdict awarded treble damages totaling $ 71.8 million. The district court denied Kodak's post trial motions and entered a ten year permanent injunction requiring Kodak to sell "all parts" to ISOs. Kodak filed a timely appeal, challenging the jury's verdict, the ISOs' evidence, the jury instructions, the damage awards and the permanent injunction. Kodak also seeks reversal on the basis of an alleged biased juror.

This appeal raises questions relating to the application of antitrust principles upon a finding that a monopolist unilaterally refused to deal with competitors. We also address overlapping patent and copyright issues and their significance in the antitrust context.

We have jurisdiction pursuant to 28 U.S.C § 1291 and we affirm in part, reverse in part and remand with instructions to amend the injunction.

Kodak manufactures, sells and services high volume photocopiers and micrographic (or microfilm) equipment. Competition in these markets is strong. In the photocopier market Kodak's competitors include Xerox, IBM and Canon. Kodak's competitors in the micrographics market include Minolta, Bell & Howell and 3M. Despite comparable products in these markets,  [**3]  Kodak's equipment is distinctive. Although Kodak equipment may perform similar functions to that of its competitors, Kodak's parts are not interchangeable with parts used in other manufacturers' equipment.

Kodak sells and installs replacement parts for its equipment. Kodak competes with ISOs in these markets. Kodak has ready access to all parts necessary for repair services because it manufactures many of the parts used in its equipment and purchases the remaining necessary parts from independent original-equipment manufacturers. In  [*1201]  the service market, Kodak repairs at least 80% of the machines it manufactures. ISOs began servicing Kodak equipment in the early 1980's, and have provided cheaper and better service at times, according to some customers. ISOs obtain parts for repair service from a variety of sources, including, at one time, Kodak.

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125 F.3d 1195 *; 1997 U.S. App. LEXIS 22608 **; 44 U.S.P.Q.2D (BNA) 1065 ***; 1997-2 Trade Cas. (CCH) P71,908; 97 Cal. Daily Op. Service 7197; 97 Daily Journal DAR 11153

IMAGE TECHNICAL SERVICES, INC.; J-E-S-P COMPANY, INC.; SHIELDS BUSINESS MACHINES, INC.; MICRO-GRAPHIC SERVICES, INC.; OMNI MICRO-GRAPHIC SERVICES, INC.; ATLANTA GENERAL MICROFILM CO., INC.; DATEK LTD; B.C.S. TECHNICAL SERVICES, INC.; CPO LTD, INC.; ADVANCED SYSTEMS SERVICE, INC.; AMTECH EQUIPMENT MAINTENANCE, INC., Plaintiffs-Appellees, v. EASTMAN KODAK CO., Defendant-Appellant. IMAGE TECHNICAL SERVICES, INC.; J-E-S-P COMPANY, INC.; SHIELDS BUSINESS MACHINES, INC.; MICRO-GRAPHIC SERVICES, INC.; OMNI MICRO-GRAPHIC SERVICES, INC.; ATLANTA GENERAL MICROFILM CO., INC.; DATEK LTD; B.C.S. TECHNICAL SERVICES, INC.; CPO LTD, INC.; ADVANCED SYSTEMS SERVICE, INC.; AMTECH EQUIPMENT MAINTENANCE, INC., Plaintiffs-Appellees, v. EASTMAN KODAK CO., Defendant-Appellant.

Subsequent History:  [**1]  As Corrected September 8, 1997. Certiorari Denied April 27, 1998, Reported at: 1998 U.S. LEXIS 2831.

Prior History: Appeal from the United States District Court for the Northern District of California. D.C. No. CV-87-01686-AWT. A. Wallace Tashima, District Judge, Presiding.

CORE TERMS

injunction, monopoly, patent, manufacturers, damages, district court, monopoly power, micrographic, argues, relevant market, monopolization, monopolist, markets, antitrust, photocopiers, license, Skiing, prices, customers, successors, market share, competitors, award damages, original-equipment, instructions, exclusionary, sales, intellectual property rights, unilateral, barriers

Antitrust & Trade Law, Sherman Act, Scope, Monopolization Offenses, Regulated Practices, Monopolies & Monopolization, General Overview, Attempts to Monopolize, Sherman Act, Conspiracy to Monopolize, Conspiracy to Monopolize, Governments, Legislation, Interpretation, Claims, Evidence, Inferences & Presumptions, Actual Monopolization, Monopoly Power, Price Discrimination, Competitive Injuries, Market Definition, Relevant Market, Civil Procedure, Trials, Jury Trials, Province of Court & Jury, Appeals, Standards of Review, De Novo Review, Judgment as Matter of Law, Courts, Judicial Precedent, Clayton Act, Scope, Estate, Gift & Trust Law, Trusts, Plain Error, Criminal Law & Procedure, Reviewability, Preservation for Review, Failure to Object, Jury Instructions, Objections, Reviewability of Lower Court Decisions, Preservation for Review, Particular Instructions, Allen Charges, Standards of Review, Substantial Evidence, Sufficiency of Evidence, Relevance, Relevant Evidence