Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

BERKEY PHOTO, INC. v. EASTMAN KODAK CO.

June 16, 1978

BERKEY PHOTO, INC., Plaintiff,
v.
EASTMAN KODAK COMPANY, Defendant



The opinion of the court was delivered by: FRANKEL

MEMORANDUM ON POST-TRIAL MOTIONS

Defendant has moved under F.R.Civ.P. 50(b) for judgment notwithstanding the jury's verdicts. Plaintiff has moved for numerous and detailed kinds of injunctive relief, including some divestitures, provisions for predisclosure, and various restrictions on Kodak's business procedures and practices. It is convenient to treat both motions together and to record some pertinent observations on both in this single memorandum.

I. DEFENDANT'S MOTION FOR JUDGMENT N.O.V. *fn1"

 Many of the issues canvassed in the briefs on this motion were considered at length during the trial, in conversations on the record, and the resolutions reached by the court are largely reflected in the charges to the jury. It does not seem useful for Nisi prius purposes to rehearse all the problems again in this writing. Nor is it necessary to discuss the legal standard, not in dispute, for granting judgment notwithstanding the verdict. See National Auto Brokers Corp. v. General Motors Corp., 572 F.2d 953, at 956 (2d Cir. 1978). Accordingly, as to the portions of defendant's motion which are being denied, the court will limit its observations herein to a relatively few matters of possible further interest. On the claims with respect to which the motion is being granted, the result of which will be to reduce the total award from $ 37,620,130 to $ 27,154,700, the court will of course state the reasons why the jury's verdict is found now to be vulnerable to this extent.

 110 Cameras

 The largest single item of damages awarded by the jury was for Berkey's lost profits, $ 15,250,000, resulting from Kodak's unlawful monopolization and attempt to monopolize the amateur camera market. The predominant part of the evidence supporting this claim dealt with the introduction of the 110 camera line as part of a system of interdependent photographic products, without prior disclosure to competing camera manufacturers of the information about the new Kodacolor II film format that would have enabled these other manufacturers to enter the market at about the same time as, and compete on the merits with, Kodak's initial line of 110 cameras.

 For the most part, defendant's contentions on this score, as it observes, retrace ground plowed earlier in denying defendant's motion for summary judgment and formulating the charge to the jury. This reflects a superficially bemusing situation: that despite the length of the trial, the basic historical facts on this, as on many aspects of the case, are not in significant dispute. Without recounting these facts in detail, we may note that the jury undoubtedly found that defendant resolved some years before the 110 introduction to introduce the new camera and film, made to work with each other, and designed to displace with overwhelming suddenness huge segments of the market for 126 cameras. Defendant's responsible executives determined that the simultaneity of these introductions was to be the key weapon against competitors, brushing aside technical objections that the new film was unsatisfactory, inferior to the predecessor Kodacolor X in vital respects, and requiring further research and development to become a satisfactory product. The paramount strategy and goal were thus to use the film monopoly Kodak's power in a field where its market share consistently exceeded 80% as a lever for suddenly swelling defendant's power in the camera market, achieving there at least a temporary total monopoly of a vital new segment to be created by the system introduction. Some "responsible persons" within Kodak urged unsuccessfully that predisclosure concerning the new film format be given to camera competitors (as well as photofinishers and photofinishing equipment makers) so that they would not suffer in one blow the instant obsolescence of inventories and work in progress and the inability to compete at all with their cameras in the terrain of the newly announced system. The 110 announcement came substantially as a surprise, following some minimal predisclosures, for a price, two or three months earlier. And these events, it is worth mentioning, followed hard after a magicube coup in June of 1970, when Kodak gained a similar advantage of surprise and temporary exclusivity from what the jury found, and the court entirely agrees, was an unlawful combination in restraint of trade with Sylvania.

 Without dwelling further on the facts of a huge record leading to the jury's award, the court refers briefly to some recurrent arguments defendant has pressed on this subject and sketches the reasons why they have been, and are once again, rejected.

 1. The claim of immunity per se for product introductions

 Throughout the case, defendant has urged, and it urges once more, that a company's introduction of a new product though the company be a huge one like Kodak with monopoly power in a mosaic of interconnected markets, and though the introduction be designed deliberately to employ monopoly power in one market to create or enhance such power in another must "as a matter of law" be immune from attack under the antitrust laws. If this is sound law, defendant should indeed be relieved of the verdict with respect to 110 camera damages. The court remains persuaded, however, that there is no such enclave for "product introductions," and that the mode, purpose, and impact of product introductions may, as in this case, play central parts in findings of unlawful monopolization and attempts to monopolize, no less than other, ordinarily lawful and "normal" business activities like leasing rather than selling machinery, United States v. United Shoe Machinery Co., 110 F. Supp. 295, 344 (D.Mass.1953), aff'd per curiam 347 U.S. 521, 74 S. Ct. 699, 98 L. Ed. 910 (1954), the creation of useful resources for added productive capacity, United States v. Aluminum Co. of America, 148 F.2d 416, 430-31 (2d Cir. 1945), or the discount offered on used equipment and the adoption of separate charges for separate services condemned as exclusionary in Greyhound Computer Corp. v. International Business Machines Corp., 559 F.2d 488, 499-503 (9th Cir. 1977), cert. denied, 434 U.S. 1040, 98 S. Ct. 782, 54 L. Ed. 2d 790 (1978).

 Before United Shoe and Alcoa, arguments similar to Kodak's could have been mounted with respect to the practices of defendants there involved leasing, building capacity, etc. Indeed, they were made. Thus, in the United Shoe case, seeking reversal of Judge Wyzanski's historic ruling, the appellant company accepted the restrictions the Alcoa case had placed upon it as a dominant firm but assailed bitterly the notion that leasing of machinery could be the basis for a judgment against it. United Shoe complained of being condemned for its decision merely "to continue a business policy which it found in existence at its birth." *fn2" It noted that this was "the policy of its more important American competitors," *fn3" that it was among United's familiar practices "which are traditional, natural and normal," *fn4" and that allowing such practices to be outlawed after years of use would subject every dominant company to the threat of unpredictable, retrospective, destructive judgments by judges and juries. *fn5" That plea was unavailing; leasing practices were held subject to scrutiny and capable of being proscribed in a proper case as exclusionary techniques in the hands of a company with monopoly power. Kodak accepts that, as it must, but would draw the line now at product introductions. To reject that position does not mean, of course, that Kodak's product innovation techniques are Ipso facto to be denounced. It means merely that they were open to informed inspection in this case, in the setting of all the circumstances of Kodak's power and practices, and that the jury could well have found (as the court would have found) anticompetitive uses by Kodak of its monopoly power in the manner and timing of its product system introductions.

 There are few mechanical rules to take the place of informed judgment in the enforcement of the antitrust laws. While Per se rules Of liability are useful and comfortable where they exist, the task usually is to weigh "all of the circumstances of a case" to determine whether a company has engaged in unlawfully anticompetitive practices. Continental T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36, 49, 97 S. Ct. 2549, 2557, 53 L. Ed. 2d 568 (1977). The ultimate judgment, as in the cited case, must commonly rest "upon demonstrable economic effect rather than . . . upon formalistic line drawing." Id. at 59, 97 S. Ct. at 2562. So, here, the jury was commissioned and instructed to appraise all the facts and circumstances and decide whether the manner, timing, and effects of the 110 introduction amounted to the anticompetitive employment of monopoly power not merely "to gain a competitive advantage," United States v. Griffith, 334 U.S. 100, 107, 68 S. Ct. 941, 92 L. Ed. 1236 (1948), but to attempt unlawfully to monopolize, and to monopolize, another market. The court is compelled to conclude that the record and the law wholly justified the verdict in this aspect against Kodak.

 Under the law, generally speaking, the inquiry required appraisal of all Kodak's relevant behavior to determine whether that behavior should be accepted as no more than

 
"the use of accessible resources, the process of invention and innovation, and the employment of those techniques of employment, financing, production, and distribution, which a competitive society must foster,"

 United Shoe, supra, 110 F. Supp. at 344, or whether Berkey had shown by a preponderance of the evidence that Kodak had proceeded by

 
"contracts, arrangements, and policies which, instead of encouraging competition based on pure merit, further(ed) the dominance of a particular firm."

 Id. at 344-45. In other words, the jury was required to appraise whether Kodak's conduct represented what Judge Learned Hand labeled "exclusionary" practices. Alcoa, supra, 148 F.2d at 431. The charge to the jury was framed to define the inquiry along the lines of the important Alcoa and United Shoe precedents. *fn6"

 Beyond that, the case came into a sharper, more specific focus, so to speak, because the evidence tended powerfully to support plaintiff's theory of unlawful "leveraging." It is unnecessary to speculate whether plaintiff might have been entitled to a directed verdict on this score. It is sufficient to say that the evidence showed a carefully orchestrated program by defendant to use its film monopoly so as to obstruct and frustrate competition on the merits in the camera market. The 110 introduction was timed and arranged so that when the new film format appeared, no other camera manufacturer would be in a position to offer the consumer a camera other than Kodak's for use with that film. Kodak was to be, and in the event was, alone in the field, with its competitors paralyzed and consumers deprived of choice. This may not be, as Kodak stresses, an exact duplicate of United States v. Griffith, supra. But it seems to this court to fall squarely within the principles of that authority. Other precedents are to similar effect. Otter Tail Power Co. v. United States, 410 U.S. 366, 377, 93 S. Ct. 1022, 35 L. Ed. 2d 359 (1973); Sargent-Welch Scientific Co. v. Ventron Corp., 567 F.2d 701, 713 (7th Cir. 1977). And plaintiff is on the mark, in this court's view, in invoking the tie-in cases as cognate authority, to accentuate the fundamental animus of the antitrust law against the "use of economic power in one market to restrict competition on the merits in another regardless of the source from which the power is derived . . . ." Northern Pacific Railway Co. v. United States, 356 U.S. 1, 11, 78 S. Ct. 514, 521, 2 L. Ed. 2d 545 (1958).

 It does not advance the inquiry, but only begs the question, to protest, as defendant has throughout, that product introductions involve "necessary commercial decisions," "natural advantages," or "normal and lawful business practice." *fn7" The contentions so phrased assume facts contrary to what the jury could, and probably did, find. The charge left the jury to decide whether such characterizations fairly described what Kodak had done. The verdict implies, and the court would have given, a negative answer.

 Defendant is not helped by protesting that under the law applied in this case "all product announcements by companies with large market positions are at risk without any legal standards to guide the businessman as to when and how and under what circumstances to bring out new products to market." *fn8" It is at least a little demure for defendant to describe itself as a mere company with a "large market position." Kodak is, as the jury found and its counsel early observed, a "giant," with a nearly unique agglomeration of enormous powers over adjoining markets in a huge industry. Thus, the problem does not arise here in a way that ought to be of desperate concern to some uncertain class of "companies with large market positions. . . ." Overlooking that it has been found on compelling evidence to be a monopolist in an array of markets, Kodak also overlooks that monopolies are not darlings of the antitrust laws. Whatever supposed uncertainties inhere in the standards applied in this case and it must be conceded surely that there are some these standards would appear to be, if anything, more lenient toward Kodak than the stringent rule of Alcoa, allowing a monopolist to avoid illegality only if it could show that the disfavored position of power had been "thrust upon" it as a result of its superior business acumen or skill in the relevant market. Far from approaching a showing to satisfy that standard, the evidence reveals a monopolist in one market (film) engineering that power to thrust itself into a monopoly position in a second market (cameras). The result was a world away from being "economically inevitable," United Shoe, 110 F. Supp. at 345; it was plainly avoidable, and the means Kodak chose to employ were plainly to be shunned.

 Kodak's complaint at root is that it faces liability for conduct which other business firms, lacking monopoly power, engage in regularly with impunity. Even if the factual premise were to be credited, the short answer is that the antitrust laws do not permit willful maintenance of monopoly power by conduct that might for a company without such power be deemed "honestly industrial." Alcoa, supra, 148 F.2d at 431; United Shoe, supra, 110 F. Supp. at 344. The present case illustrates the now settled rule that "(t)here are kinds of acts which would be lawful in the absence of monopoly but, because of their tendency to foreclose competitors from access to markets or customers or some other inherently anticompetitive tendency, are unlawful under § 2 if done by a monopolist . . . ." Sargent-Welch Scientific Co. v. Ventron Corp., 567 F.2d 701, 711-12 (7th Cir. 1977).

 2. Predisclosure

 Plaintiff's theory on the camera monopoly claim included the contention that if defendant had given them advance information about the size and other pertinent qualities of the new Kodakcolor II film, other camera manufacturers, including plaintiff, could have geared up to be ready to compete on the merits with Kodak in offering cameras suitable for use with the new film. Treating this aspect of the claim, the court cautioned the jury that a company normally has a perfect right to keep its secrets, winning competitive advantages by launching new and better products in its own way and in its own time. Undertaking, however, to apply the teachings of the authorities on section 2 of the Sherman Act, the court went on to instruct that Kodak's monopoly power in film, if it was found to disable competitors who could not offer cameras comparable to Kodak's, might lead the judges of the facts to decide that the failure to give camera makers the necessary predisclosure concerning film should in all the circumstances be deemed anticompetitive. *fn9" These instructions applied to a record on which the jury could readily have found among other things: (1) that Kodak timed the 110 system to cope with the inroads its competition was making in the 126 camera market, not as a result of the pace of design evolution; (2) that the simultaneous offering of a new color print film was a use of the film monopoly to gain a competitive jump, not a genuine improvement or benefit to consumers; (3) that the anticompetitive purpose and effect of the introduction could be inferred from evidence that the new products were inferior in important respects, including, notably, the "red eye" problems, which Kodak took pains to conceal, beginning with the carefully planned lighting arrangements at the gala press conference called to launch the new system; and (4) that the highly publicized new Kodacolor II was restricted for a critical interval of time to the 110 format, for which only Kodak could supply cameras, for that anticompetitive purpose alone, not because of any technological or legitimately commercial concerns counseling this timetable.

 Without disputing the foregoing facts and others from which the jury could have found the 110 introduction a scheme contrived almost wholly to crush competitors, and scarcely or not at all to compete by serving consumers better, defendant preserves its position that failure to predisclose could not as a matter of law go before the jury as a possibly material factor. The argument, characteristically robust and uncompromising, is that "the law," according to Kodak, "leaves to Kodak, acting in its own commercial interest, the decision when and how to bring its products to market." *fn10"

 That extends the line Kodak has sought to have drawn throughout the case. The court adheres to the view that defendant is in error. *fn11" Again, the court perceives the principles of the Sherman Act and the pertinent precedents as demanding a frequently subtle, inevitably comprehensive appraisal of actions by a company like Kodak wielding enormous monopoly power. Given such power, we were reminded not long ago, it becomes an essential question whether the evidence shows "the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident." United States v. Grinnell Corp., 384 U.S. 563, 570-71, 86 S. Ct. 1698, 1704, 16 L. Ed. 2d 778 (1966). Here, then, plaintiff was entitled to have the triers of fact consider whether, in the total setting portrayed by a long record, an inference of "willful acquisition or maintenance" might be promoted or strengthened by the deliberate decision to keep secret the plan to use the combination of monopoly powers so that camera makers would be blocked for a substantial time from competing at all for the custom of amateurs who would want the "remarkable new" Kodacolor II film and would be forced to deal with Kodak alone as the purveyor of "the film that was made for the camera that was made for the film."

 3. Business decisions and product quality

 On legal reasoning essentially like that affecting predisclosure, the court continues to reject defendant's thesis that the jury should not have been permitted to appraise "business judgments" as to whether a new product is adequate and when to introduce it. As we approach the Sherman Act's centennial, it seems extraordinary to suggest that conduct questioned under that broad enactment may be shielded from scrutiny because it results from "business judgments." This was not so for the decision to lease rather than sell in United Shoe or for the countless business decisions that have been evaluated, whether to condemn or absolve, in antitrust cases. It seems equally clear that there is no legal shield covering questions of product quality. Turning no farther back than the quotation just above from Grinnell, we see it was a material question in the present case, as in others, whether Kodak's accession of increased monopoly power through the 110 system could be attributed to a "superior product." The jury was properly permitted, the court reaffirms, if not required, to appraise the 110 system for this purpose: to think whether the new film was somehow superior, and to evaluate in that light the new camera as well whether It was "superior," or whether, perhaps, the ultimately decisive thing about the camera was its being designed to be protected in the market from any direct comparisons or competition of any kind.

 The jury was cautioned at some length that it did not sit to second-guess business judgments as such, and that the quality of Kodak's products was not a concern in the case for its own sake. *fn12" The only question in this quarter given to the triers of fact was the possibly difficult, but seemingly appropriate one of determining if the relative character of the products in question might cast light on whether the securing of monopoly power in the camera market was a natural and innocent business development or the kind of willful acquisition condemned by Grinnell and other cases.

 4. Intent

 The final quarrel to be mentioned in connection with the 110 camera award is that it was error to allow the jury to consider evidence of Kodak's intent as reflected in statements of its responsible people. In treating this matter, the court recalls the sharply limited extent and purpose for which the jury was permitted to examine intent, if it reached this subject at all. Under the court's charge, evidence of this nature was to be scrutinized only if it was not feasible otherwise to decide whether particular conduct on Kodak's part should be deemed "either honestly industrial or anticompetitive." *fn13"

 The court finds it difficult on the authorities to comprehend the claimed impropriety of this limited reference to motivation and purpose as a potentially relevant circumstance in determining whether conduct should be held unlawfully restrictive or anticompetitive under the Sherman Act. At least since Chicago Board of Trade v. United States, 246 U.S. 231, 238, 38 S. Ct. 242, 244, 62 L. Ed. 683 (1918), as reaffirmed no longer ago than Continental T.V., Inc., v. GTE Sylvania Inc., supra, 433 U.S. at 49 n. 15, 97 S. Ct. at 2558, we have been taught in this setting that "knowledge of intent may help the court to interpret facts and to predict consequences." We are to look, or the jury is to look, as noted repeatedly herein, for evidences of "willful acquisition" of monopoly power. And these quotations reflect an elementary premise that pervades the law, criminal and civil that intent, motive, or purpose is often a prime clue to adequate understanding and characterization of conduct otherwise equivocal. See also Sargent-Welch Scientific Co., supra, 567 F.2d at 712.

 The limited reference to motive or purpose in this case is entirely consistent with the law that intent need not be proved to establish an unlawful monopoly. Alcoa, supra, 148 F.2d at 431-32. It is a primitive logical fallacy to infer from this that "subjective intent" (Kodak's phrase) May not be shown to illumine conduct which, apart from purpose and the market power of the party, may appear, in Kodak's contrasting phrase, to have "violated none of the objective precepts of the antitrust laws." *fn14"

 Judge Hand did not hesitate to consult indicia of intent when faced with the need to evaluate equivocal conduct in Alcoa. See 148 F.2d at 432-33. That approach, properly understood, leaves ample room for the view, for which defendant cites Professors Areeda and Turner, that a company with monopoly power is not barred from competing, or from intending to do so:

 
"There is at least one kind of intent that the proscribed "specific intent' clearly cannot include: the mere intention to prevail over one's rivals. To declare that intention unlawful would defeat the antitrust goal of encouraging competition on the merits, which is heavily motivated by such an intent."

  *fn15"

 The court agrees indeed, with deference, deems it obvious that "the mere intention to prevail over one's rivals" is "one kind of intent" outside the "specific intent" required to show an attempt to monopolize proscribed by section 2. *fn16" But the very quotation thus invoked by defendant (referring to "one kind of intent") reminds us that there are other kinds of "intent" that are, or may well be, germane in deciding what conduct is "anticompetitive" (a question arising under section 1 or section 2) and what is the forbidden goal or purpose of an attempt under section 2. The species of "mere intention" referred to by Messrs. Areeda and Turner was not permitted to be held wrongful, or the basis for adverse inferences, in the instructions defendant attacks.

 Without pursuing further the lesser issues tendered again on this topic, the court records that the verdict for lost profits on 110 cameras will be sustained.

 Kodacolor II photofinishing damages

 The jury found, on unquestionably sufficient evidence, that defendant had used its film monopoly itself unlawfully maintained, as the jury also found to injure plaintiff as a photofinisher. Under the court's charge, it was essential to this finding that the jury condemned "Kodak's mode of introducing the 110 system without predisclosure to photofinishers . . . (as) exclusionary or anticompetitive conduct unlawfully affecting Berkey and other competing photofinishers . . . ." That determination emerged from circumstances that included a pattern of dealing with photofinishers by which Kodak kept these enterprises relatively small, numerous, dependent upon Kodak, subject to shocks and shifts of their business resulting from sudden changes in Kodak's film operations, and almost inevitably inferior to, and less informed than, Kodak's own Color Print and Processing organization ("CP&P").

 Without disputing the factual basis for this finding of liability, and the award of $ 55,700 in damages for this, defendant argues two grounds of law for setting aside this portion of the verdict:

 
(1) That the failure to predisclose, notwithstanding the circumstances in which it was shown, could not in law be a basis for liability.
 
(2) That the finding of illegality cannot stand in the face of the jury's findings that Kodak had neither monopolized nor attempted to monopolize the photofinishing market.

 The legal issue as to predisclosure, though its factual cast is different, is largely the same in this connection as in the dispute about 110 cameras. Like the camera manufacturers, photofinishers lived under the shadow, and at the mercy, of Kodak's omnipotent film monopoly. Like defendant's camera manufacturing division, its processing organization was secretly informed, and specially prepared, to process the new film promptly after its arrival on the market. Other finishers were left to scramble to catch up; were offered only equipment markedly inferior to CP&P's; *fn17" continued to be kept ignorant of technical facts and developments needed for maximally effective performance of the finishing service; were barred from competing while CP&P enjoyed a temporary monopoly; and had to watch helplessly as CP&P's reputation for preeminence was enhanced, not only by being first and best informed, but also by being needed for some time to process the other finishers' Kodacolor II orders and by being enabled to employ this opportunity to stuff these competitors' return envelopes to customers with Kodak CP&P advertising literature. Once more, the general proposition that predisclosure of new products is not required is subject to modification, as the jury found, when it is tested by circumstances of market power like Kodak's, capable of paralyzing impacts upon adjoining sectors of the economy.

 While the subject is not wholly free from doubt, the court also concludes, not only under United States v. Griffith, 334 U.S. 100, 68 S. Ct. 941, 92 L. Ed. 1236 (1948), but on broader principles of tort and antitrust law, that Kodak could properly be held answerable in damages for the proximate injuries to Berkey in photofinishing despite the decision that Kodak had not monopolized or attempted to monopolize this market. Griffith, in explicit language and ultimate implications, denounces use of monopoly power, even when lawfully acquired, nor merely "to beget monopoly," 334 U.S. at 108, 68 S. Ct. 941, but also "to foreclose competition . . . (or) to gain a competitive advantage," Id. at 107, 68 S. Ct. at 945. Beyond that, it accords with general principles of law that the offense of unlawful monopolization or attempted monopolization should entail liability for proximate consequences. See Hanover Shoe, Inc. v. United Shoe Machinery Corp., 392 U.S. 481, 488-89, 88 S. Ct. 2224, 20 L. Ed. 2d 1231 (1968). Cf. Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 485-89, 97 S. Ct. 690, 50 L. Ed. 2d 701 (1977); Restatement (Second) of Torts § 431 (1965). Accordingly, the jury's finding that these violations in the film market caused Berkey's photofinishing injuries sustains the award for the latter. And that, finally, is merely a literal and standard application of section 4 of the Clayton Act, 15 U.S.C. § 15, which provides that anyone

 
"injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor . . . and shall recover threefold the damages by him sustained . . . ."

 The photofinishing award will, therefore, be sustained.

 The magicube award

 The jury awarded a total of $ 1,747,330 on Berkey's claims of lost profits in 1970 and 1971 resulting from the joint development program between Kodak and Sylvania culminating in the simultaneous introduction in June 1970 of Sylvania's magicube and Kodak's cameras, unique for at least the time being, constructed to employ the magicube. The award is attacked both on the ground that there could be no liability as a matter of law and on the further ground that the evidence was insufficient to sustain the damage award. The latter contention is sustained to the extent that the court now finds no sufficient evidence on which the jury, answering question 5 on damages, should have been permitted to make its award for the year 1971 in the amount of $ 1,417,330. The prior award of $ 330,000 on this branch of the case, for 1970, is left to stand.

 As for liability, under both section 1 and section 2 of the Sherman Act, plaintiff defends on several theories. Without reviewing them all, the court notes a central core of scarcely disputed facts upon which the jury must have found, and the court itself would surely have found, a restraint to be denounced under the rule of reason and a form of exclusionary conduct supporting the finding of liability under section 2. It is hardly crucial, though it is much discussed by defendant, whether and to what extent Kodak and Sylvania were potential competitors. The heart of the matter, to summarize very briefly the compelling evidence on this subject, begins with Kodak's commanding position of monopoly power over key components of the amateur photographic industry the cameras (to use the proposed flash devices), film, and color print paper. It was that dominant position, the jury could have found, that brought Sylvania to Kodak, ready to share its secrets and, under Kodak's pressure, to withhold them from Kodak's competitors in the manufacture of cameras. The jury could scarcely have failed to find, from the documentary and other evidence, that Kodak employed its power to pressure Sylvania and postpone the latter's explicit desire to furnish information concerning the flash device to other camera makers so that they might be less far behind or, as Kodak effectively meant to avoid, abreast of Kodak when the race to sell cameras fitted for the magicube began. Sylvania's yearning to be more forthcoming was heightened by its prior flashcube experience and the bitterness of Kodak's competitors when a similar regime of secrecy was enforced with respect to that earlier device. Kodak's insistence was effective. Sylvania's responses to inquiries from equipment manufacturers were carefully limited, thus helping defendant further to entrench its monopoly position by coming forth first, and remaining alone in the field for crucial months, in the sale of magicube cameras.

 Adding to this central core of sharply and deliberately restrictive behavior in its combination with Sylvania, Kodak extracted patent rights in Sylvania inventions broader than Sylvania wished to give, and more ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.