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Symbolic Control, Inc. v. International Business Machines Corp.

643 F.2d 1339 (1980)

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Symbolic Control, Inc. v. International Business Machines Corp.

United States Court of Appeals for the Ninth Circuit
643 F.2d 1339 (1980)

Facts

International Business Machines Corporation (IBM) (defendant) produced computer software, known as NC 360, that was used to program machining tools. NC 360 was designed to be used with certain IBM computers, and IBM distributed the software for free. Symbolic Control, Inc. (Symbolic) (plaintiff) developed competing software, APT/70, that was also designed for use with IBM computers. Symbolic was unable to sell its software and brought an antitrust action against IBM. Symbolic argued that, in giving away NC 360 for free, IBM had engaged in predatory pricing to monopolize the software market. The district court bifurcated the trial, dedicating the first phase to determining causation. The court assumed for the first phase that IBM had committed antitrust violations, and it asked Symbolic to show that IBM’s actions had adversely affected Symbolic’s business. After Symbolic presented evidence including testimony from NC 360 users concerning the amount they would be willing to pay for the software, the court dismissed the case. Finding that the testimony of the NC 360 users was irrelevant because it was speculative and because IBM had already placed the software in the public domain and therefore could not charge for it, the court ruled that IBM’s actions had no impact on Symbolic’s business. Symbolic appealed.

Rule of Law

Issue

Holding and Reasoning (Kennedy, J.)

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