California Computer Products, Inc. v. International Business Machines Corp.

613 F.2d 727 (1979)

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California Computer Products, Inc. v. International Business Machines Corp.

United States Court of Appeals for the Ninth Circuit
613 F.2d 727 (1979)

Facts

California Computer Products, Inc. (CalComp) (plaintiff) was a manufacturer of disk drives, memory units, and other peripheral products for computers. Part of CalComp’s business model involved reverse engineering peripheral computer products that were created by International Business Machines Corporation (IBM) (defendant) for use with IBM’s mainframe computers and central processing units. In 1971, IBM released a new line of computer products that fully integrated many of the peripheral elements that had previously been sold separately. The new IBM computers featured integrated disk drives and memory functions within the same physical unit, which ended the need for customers to purchase many of the peripheral products offered by CalComp. IBM also offered the integrated computers at a lower price than the cost of the individual components that were sold separately. Believing that IBM’s new product represented an attempt by IBM to establish or maintain a monopoly, CalComp brought a claim against IBM for violating § 2 of the Sherman Act. The district court found for IBM, and CalComp appealed the decision.

Rule of Law

Issue

Holding and Reasoning (Choy, J.)

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