Court Rejects Appeal by KodakRICHARD CARELL , Associated Press
Apr. 27, 1998 10:26 AM ET
WASHINGTON (AP) _ The Supreme Court today left intact a $71.8 million antitrust award against Eastman Kodak Co. won by competitors who repair Kodak equipment.
The court, without comment, rejected an appeal in which Kodak argued, among other things, that its legal defeat threatens the right of all patent and copyright owners to refuse to do business with rivals.
``Competition is increasingly driven by technological innovation,'' Kodak's lawyers told the justices. ``The relationship between the laws promoting innovation, principally patent and copyright law, and the proscriptions of antitrust law is therefore more important than ever.''
A federal jury in California concluded in 1995 that Kodak had violated federal antitrust law when it stopped selling copier and microfilm equipment parts to 11 companies _ called independent service organizations _ that compete with it in the equipment-repair business.
The Supreme Court had cleared the way for that trial when in 1992 it ruled that a jury _ not just a judge _ should rule on the allegations against Kodak.
A three-judge panel of the 9th U.S. Circuit Court of Appeals upheld the jury verdict last August. The appeals court noted that only 65 of the thousands of parts required by Kodak equipment are patented, and that the company's blanket refusal to supply competitors with parts included patented and non-patented products.
While acknowledging that protecting patents and copyrights is a legitimate reason for refusing to deal with competitors, the appeals court said evidence in the Kodak case made it ``more probable than not that the jury would have found Kodak's presumptively valid business justification rebutted on grounds of pretext.''
In other words, Kodak's refusal had been motivated by a desire to monopolize the equipment-repair business and the company cited its concern about patents and copyrights only after being sued.
Kodak's Supreme Court appeal said the appeals court ruling makes the legality of its refusal to share some protected products conditioned by its intent. ``Federal courts ought not to be balancing antitrust and intellectual property interests'' in such a way, the appeal said.
The case is Eastman Kodak vs. Image Technical Services, 97-1298.