Image Technical Services, Inc. v. Eastman Kodak Co.

Eastman Kodak Co. (Kodak) (defendant) sold photocopiers. Kodak also participated in the related market for photocopier servicing and repair work. In the servicing and repair market, Kodak competed with independent service organizations (ISOs). To compete with Kodak, ISOs needed to buy photocopier replacement parts from Kodak and Kodak’s equipment manufacturers. Kodak owned intellectual property rights in some of the replacement parts. Starting in 1985, Kodak refused to sell replacement parts to the ISOs. Kodak also convinced its equipment manufacturers to stop selling replacement parts to the ISOs. Image Technical Services, Inc. (Image) and 10 other ISOs (plaintiffs) sued Kodak, alleging monopolization of the photocopier services-and-repair market in violation of § 2 of the Sherman Act. 15 U.S.C. § 2. Image contended that Kodak engaged in monopoly leveraging by using its dominant position in the market for replacement parts to gain monopoly power in the market for repair services. At trial, a Kodak parts manager testified that intellectual property did not factor into the decision to withhold parts from ISOs. Image also presented evidence that Kodak refused to sell both patented and unpatented parts. The district court declined to instruct the jury that Kodak’s protection of its intellectual property could provide a legitimate business justification for its exclusionary conduct. The jury returned a verdict for Image and the ISOs. Kodak appealed.