TaxTMI 
TaxTMI 
1997 (8) TMI 510
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....s" to ISOs. Kodak filed a timely appeal, challenging the jury's verdict, the ISOs' evidence, the jury instructions, the damage awards and the permanent injunction. Kodak also seeks reversal on the basis of an alleged biased juror. This appeal raises questions relating to the application of antitrust principles upon a finding that a monopolist unilaterally refused to deal with competitors. We also address overlapping patent and copyright issues and their significance in the antitrust context. We have jurisdiction pursuant to 28 U.S.C § 1291 and we affirm in part, reverse in part and remand with instructions to amend the injunction. I Kodak manufactures, sells and services high volume photocopiers and micrographic (or microfilm) equipment. Competition in these markets is strong. In the photocopier market Kodak's competitors include Xerox, IBM and Canon. Kodak's competitors in the micrographics market include Minolta, Bell & Howell and 3M. Despite comparable products in these markets, Kodak's equipment is distinctive. Although Kodak equipment may perform similar functions to that of its competitors, Kodak's parts are not interchangeable wi....
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....eme Court, which affirmed the denial of summary judgment. The Court held that the record disclosed sufficient factual disputes to survive summary judgment on both the § 1 and § 2 claims. Eastman Kodak Co. v. Image Technical Serv., Inc., 504 U.S. 451, 112 S.Ct. 2072, 119 L.Ed.2d 265 (1992). The Supreme Court also held that Kodak's lack of market power in the market for high volume photocopiers and micrographic equipment did not preclude, as a matter of law, the possibility of market power in the derivative aftermarkets for parts and service. Id. at 477, 112 S.Ct. at 2087. The Court recognized that resolution of other key issues required a more complete record. The Court concluded: In the end, of course, Kodak's arguments may prove to be correct. It may be that its parts, service, and equipment are components of one unified market, or that the equipment market does discipline the aftermarkets so that all three are priced competitively overall, or that any anticompetitive effects of Kodak's behavior are outweighed by its competitive effects. But we cannot reach these conclusions as a matter of law on a record this sparse. 504 U.S. at 486, 112 S.Ct....
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....l Business Machines Corp., 613 F.2d 727, 736-37 (9th Cir.1979). To prevail on a § 2 monopoly claim the ISOs were required to prove that Kodak:  (1) possessed monopoly power in the relevant market and (2) willfully acquired or maintained that power. Kodak, 504 U.S. at 481, 112 S.Ct. at 2089-90 (citing United States v. Grinnell Corp., 384 U.S. 563, 570-71, 86 S.Ct. 1698, 1703-04, 16 L.Ed.2d 778 (1966)). Section 2 plaintiffs must also establish antitrust injury. See Cost Management Services, Inc. v. Washington Natural Gas Co., 99 F.3d 937, 949 (9th Cir.1996). Kodak primarily attacks the ISOs' monopoly claim because success would likely upset the "attempt" verdict as well. We now address Kodak's appeal against the background of the Supreme Court's opinion in Kodak and the extensive record developed at trial. A. Market Power  Kodak first attacks the ISOs' monopoly power theory and its supporting evidence. Monopoly power is "the power to control prices or exclude competition." Grinnell, 384 U.S. at 571, 86 S.Ct. at 1704 (quoting United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 391, 76 S.Ct. 994, 1005, 100 L.Ed. 1264 (1956))....
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....s proceeded on the theory that Kodak held monopolies over two relevant parts markets:  the Kodak photocopier parts market and the Kodak micrographic parts market. Both markets, the ISOs argued, consisted of the entirety of necessary Kodak parts for that field of equipment.  Kodak disagrees and argues that the district court erred in denying its renewed motion for judgment as a matter of law, because the ISOs' "all parts" market theory, upon which the jury relied to define the market, has no support in existing antitrust precedent. We review de novo the district court's denial of Kodak's renewed motion of judgment as a matter of law. Acosta v. City & County of San Francisco, 83 F.3d 1143, 1145 (9th Cir.), cert. denied, 519 U.S. 1009, 117 S.Ct. 514, 136 L.Ed.2d 403 (1996). We would be required to reverse the district court's denial of Kodak's motion if the evidence, construed in the light most favorable to the ISO's, permits only one reasonable conclusion, and that conclusion is contrary to that of the jury's. Id. On appeal and in their renewed motion for judgment as a matter of law, Kodak proposes a segmented parts market. It argues that....
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.... In re British Oxygen Co., 86 F.T.C. 1241 (1975), rev'd on other grounds, BOC Intern., Ltd. v. F.T.C., 557 F.2d 24 (2nd Cir.1977), analogizes to the automotive supplies market, arguing that the fact that automobile owners need tires, oil and gasoline does not mean that these elements constitute a single relevant market. The market for Kodak parts is distinguishable. First, Kodak parts, unlike tires, oil or gasoline, are not interchangeable with parts for other brands or equipment:  the market for Kodak parts is a highly limited and specialized one. Second, the commercial reality for auto parts consumers does not necessitate that a retailer of tires, for example, also sell either gasoline or oil, or both. In the market for Kodak parts, a ready supply of all parts is needed to satisfy service contracts. See, e.g., Grinnell, 384 U.S. at 572, 86 S.Ct. at 1704 ("Central station companies recognize that to compete effectively, they must offer all or nearly all types of service."). The ISOs argue that through its anticompetitive conduct Kodak has ensured that it will possess the only inventory of all parts for Kodak high volume photocopiers and micrographic equipment. Kodak&....
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....s, 509 F.Supp. 357, 369 (N.D.Cal.1981)). In that holding, we rejected the plaintiff's efforts to define the relevant market more narrowly as relating to specific beauty products at either the wholesale or the retail level. Id. at 1016. We commented that a "cluster approach is appropriate where the product package is significantly different from, and appeals to buyers on a different basis from, the individual products considered separately." Id. at 1016-17. The market for Kodak parts is similarly amenable to this "cluster approach." Kodak service customers view service providers with the assumption that such providers will be able to obtain any part necessary to complete the needed repairs. Kodak argues that the "cluster market" theory is inapplicable because in the market for Kodak parts no single competitor or manufacturer produces all the parts for Kodak photocopiers or micrographic equipment and thus "all parts" is not a relevant market.4 This argument is unpersuasive. Both ISOs and Kodak inventory and sell parts to self-service customers. Even if this were not true, that all providers do not offer the same "package" or cluster of goods or services is irrelevant. In Unite....
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.... power in thousands of markets would be both unduly burdensome and pointless. See id. at 327, 82 S.Ct. at 1525 ("Further division does not aid us․"). Moreover, aggregation does not prejudice Kodak because service providers need all parts to compete in the service market, and Kodak's 100% monopoly power over the 30% of parts it manufactures suggests the same potential for control of the service market under an individual part market theory that the jury found using the "all parts" market. Kodak "can point to no advantage it would enjoy were finer divisions ․ employed." Id. Last, Kodak suggests that measuring market share in an "all parts" market could prove significantly over or under inclusive. Kodak argues that a firm believed to be monopolist could have a high aggregate share of the market that disguises the availability of alternative sources, or its seemingly small market share could conceal monopoly power over one crucial part. This argument, however, only demonstrates why the Supreme Court in Kodak emphasized the factual nature of the relevant market inquiry. 504 U.S. at 482, 112 S.Ct. at 2090. Each case is burdened with its unique facts that affect the par....
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....ricted original-equipment manufacturers to Kodak's market share.  We need not consider Kodak's challenge to Jury Instruction No. 27, the controlling instruction, as Kodak failed to object to that instruction and thus did not preserve this argument for appeal. Failure to object to an instruction waives review. Hammer v. Gross, 932 F.2d 842, 847-48 (9th Cir.1991) (no plain error exception exists in civil cases in this circuit). Instruction No. 27 states in relevant part: Among other factors [indicative of monopoly power], you may wish to consider ․ whether Kodak restricts, directly or indirectly, the ability of its supplier to sell to others․ Instruction No. 27 allows for the aggregation of Kodak's market share with the market shares of the restricted original-equipment manufacturers. Kodak also agreed to Instruction No. 26, which required the jury to find a 65% market share in order to find monopoly power.  We review Kodak's sufficiency of the evidence claim under the controlling instruction. We review a jury's verdict for substantial evidence. Davis v. Mason County, 927 F.2d 1473, 1486 (9th Cir.1991). Substantial evidence is suc....
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....nclude that the oft-used term "proprietary" covered most if not all parts made for Kodak. ISO owners and employees testified that they could not purchase parts from independent original-equipment manufacturers. Several testified that they could not obtain any parts for post-1986 photocopiers and micrographic equipment. Kodak's argument that its tooling and engineering clauses were routine and legal is irrelevant. Legal actions, when taken by a monopolist, may give rise to liability if anticompetitive. See Greyhound Computer v. International Business Machines, 559 F.2d 488, 499 (9th Cir.1977). Kodak correctly argues that the ISOs never precisely quantified Kodak's parts market shares. In his closing, counsel for the ISOs based Kodak's market share on its 30% manufacturing share, its 20% share controlled by tooling clauses and an unquantified share of production which was restricted by engineering clauses. Nonetheless, given the state of the record, a reasonable jury could conclude that Kodak had a share of the markets for photocopier and micrographic equipment parts of 65% or more. Moreover, even if the ISOs only succeeded in proving a share near 50%, this would suffi....
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...."[y]ou could get in my business tomorrow if you had the expertise." That witness, however, also identified capital and consumer demand as other significant barriers to market entry. Although some new entry was possible, the record reflects substantial evidence of entry barriers sufficient to prevent Kodak's monopoly share from self-correcting. See Rebel Oil, 51 F.3d at 1440-41 ("Barriers may still be 'significant' if the market is unable to correct itself despite the entry of small rivals."). Kodak claims that the same witness testified that he could make any part if ISOs servicing a total of 2,000 machines would buy the part. The witness actually only agreed that he would "supply more Kodak parts," if there were 2,000 machines needing them. We reject Kodak's sufficiency of the evidence claim. B. Use of Monopoly Power The second element of a § 2 monopoly claim, the "conduct" element, is the use of monopoly power "to foreclose competition, to gain a competitive advantage, or to destroy a competitor." Kodak, 504 U.S. at 482-83, 112 S.Ct. at 2090 (quoting United States v. Griffith, 334 U.S. 100, 107, 68 S.Ct. 941, 945, 92 L.Ed. 1236 (1948)). The ISOs proce....
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....§ 2 of the Sherman Act on a theory of monopoly leveraging involving a firm which used "its monopoly power in one market to gain a competitive advantage in another, albeit without an attempt to monopolize the second market." 603 F.2d at 275. In Alaska Airlines, we held that "monopoly leveraging" could not exist as a basis for § 2 liability in the absence of the defendant using its monopoly in one market to monopolize or attempt to monopolize the downstream market. 948 F.2d at 547. We characterized Berkey Photo 's downstream monopoly requirement-"to gain a competitive advantage"-as too "loose." Alaska Airlines, 948 F.2d at 546. Kodak accuses the district court of incorporating Berkey Photo 's repudiated language into the court's instructions. We disagree. Instruction No. 29 required the jury to find that Kodak's monopoly conduct be undertaken "in order to maintain a monopoly" in the downstream market. Berkey Photo 's watered-down standard does not go this far. Instruction No. 29 makes clear that the monopolies at issue are Kodak's alleged service monopolies and the Instruction required the jury to find that Kodak act....
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...." if it is otherwise unavailable and cannot be "reasonably or practically duplicated." Anaheim v. Southern California Edison Co., 955 F.2d 1373, 1380 (9th Cir.1992). In Otter Tail Power Co. v. United States, the Supreme Court held that the defendant, Otter Tail Power, used its electrical utility equipment, an "essential facility," to gain monopoly power over all commercial electrical services. 410 U.S. at 377-79, 93 S.Ct. at 1029-30. Otter Tail Power generally sold both wholesale and retail electrical services. Later it refused to provide only wholesale electrical services to several municipalities which intended to supply retail electrical services to the ultimate customers. The Court held that Otter Tail Power's refusal to supply "only wholesale" services eliminated competition in the downstream market for retail services as Otter Tail Power owned the only "facility" capable of supplying these services. The Court held that such "exclusionary" conduct violated § 2 of the Sherman Act. Id. In Alaska Airlines, we interpreted Otter Tail as requiring plaintiffs proceeding under the "essential facilities" doctrine to establish that the controlled facility "carries wi....
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....ities' doctrine․"). The Supreme Court began its analysis in Aspen Skiing with a discussion of the "right to refuse to deal," a right the Court characterized as highly valued but not "unqualified." Id. at 601, 105 S.Ct. at 2856. The Court, quoting extensively from Lorain Journal Co. v. United States, 342 U.S. 143, 155, 72 S.Ct. 181, 187, 96 L.Ed. 162 (1951), held that the right to refuse to deal was "neither absolute nor exempt from regulation" and when used "as a purposeful means of monopolizing interstate commerce" the exercise of that right violates the Sherman Act. Aspen Skiing, 472 U.S. at 602, 105 S.Ct. at 2857. Thus "the long recognized right ․ [to] freely [ ] exercise [one's] own independent discretion as to parties with whom he will deal" does not violate the Sherman Act "[i]n the absence of any purpose to create or maintain a monopoly." Id. (quoting Lorain Journal 342 U.S. at 155, 72 S.Ct. at 187) (emphasis in the original) (citations omitted). In Aspen Skiing the Court noted that a defendant's refusal to deal was evidence of its' intent "relevant to the question whether the challenged conduct is fairly characterized as 'exclusionary' or 'ant....
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....;  and there are two markets at issue, rather than only one. Further, unlike most essential facilities cases and this case, Aspen Skiing did not involve the effects of a supplier's refusal to deal with its customers in order to control a downstream market. Notwithstanding these distinctions, both the analysis in Aspen Skiing and Kodak footnote 32 suggest that Aspen Skiing applies here. Like the First Circuit in Data General v. Grumman Systems Support, 36 F.3d 1147 (1st Cir.1994), we believe the Supreme Court, in Aspen Skiing, endorsed a more general application of § 2 principles to refusal to deal cases. See Data General, 36 F.3d at 1183-84 (plaintiff alleging § 2 refusal to deal claim "need not tailor its argument to a preexisting 'category' of unilateral refusals to deal."). The district court's Jury Instruction No. 29 was proper. 3.  Kodak next attacks the jury's verdict on the grounds that the ISOs failed to present a theory of aftermarket monopoly that makes economic sense as required by Kodak. Kodak contends that at trial the ISOs dropped the economic theory they advanced before the Supreme Court, and under their new theory th....
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....1986 models survive. Kodak equipment customers experienced the "lock-in" and information imperfections as described in Kodak, 504 U.S. at 477, 112 S.Ct. at 2087-88 ("there is a question of fact whether information costs and switching costs foil the simple assumption that the equipment and service markets act as pure complements to one another."). Kodak's market share in the equipment market further limits choices by consumers. Finally, although Kodak criticizes their methodology, the ISOs presented evidence that Kodak earns supracompetitive profits in service, and overall. Substantial evidence supports the jury's verdict on the issue of Kodak's service market monopoly. III  Our conclusion that the ISOs have shown that Kodak has both attained monopoly power and exercised exclusionary conduct does not end our inquiry. Kodak's conduct may not be actionable if supported by a legitimate business justification. When a legitimate business justification supports a monopolist's exclusionary conduct, that conduct does not violate § 2 of the Sherman Act. See Kodak, 504 U.S. at 483, 112 S.Ct. at 2090-91;  Oahu Gas, 838 F.2d at 368. A plaintiff ma....
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....district court's refusal to use Kodak's requested language and Kodak's disagreement with the "unnecessarily excludes or handicaps competitors" language of Jury Instruction Nos. 29 and 34. As a result of this combination, Kodak argues, the ISOs were able to argue a "necessity" standard and ask the jury to weight what Kodak did "against the alternatives." As discussed above, the "unnecessarily excluded or handicaps" language was permissible under Aspen Skiing. Moreover, the district court's instruction here, Instruction No. 28, was very similar to both the language proposed by Kodak and the language endorsed by the Supreme Court in Aspen Skiing, 472 U.S. at 597, 105 S.Ct. at 2854-55. Jury Instruction No. 28 defines "exclusionary conduct" as impairing "the efforts of others to compete for customers in an unnecessarily restrictive way." The district court also instructed that:  (1) Kodak could refuse to deal if valid business reasons existed and (2) the jury could not "second guess whether Kodak's business judgment was wise or correct in retrospect." Under these instructions the jury could not consider "less restrictive alternatives" without "second guessi....
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....y "rights" or "privileges" based on its patents and copyrights:  all parts are treated the same. In Jury Instruction No. 37, the court told the jury: [i]f you find that Kodak engaged in monopolization or attempted monopolization by misuse of its alleged parts monopoly ․ then the fact that some of the replacement parts are patented or copyrighted does not provide Kodak with a defense against any of those antitrust claims. In Jury Instruction No. 28, the court stated, over Kodak's objection, that: [s]uch [exclusionary] conduct does not refer to ordinary means of competition, like offering better products or services, exercising superior skill or business judgment, utilizing more efficient technology, or exercising natural competitive advantages. Kodak proposed to include "exercising lawful patents and copyrights" amongst the list of non-exclusionary conduct in Instruction No. 28, but the district court rejected that language. Kodak's challenge raises unresolved questions concerning the relationship between federal antitrust, copyright and patent laws. In particular we must determine the significance of a monopolist's unilateral refusal to sell ....
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....S.Ct. 546, 547, 76 L.Ed. 1010 (1932));  see Stewart v. Abend, 495 U.S. 207, 228-29, 110 S.Ct. 1750, 1764, 109 L.Ed.2d 184 (1990)("nothing in the copyright statutes would prevent an author from hoarding all of his works during the term of the copyright.") Clearly the antitrust, copyright and patent laws both overlap and, in certain situations, seem to conflict. This is not a new revelation. We have previously noted the "obvious tension" between the patent and antitrust laws:  "[o]ne body of law creates and protects monopoly power while the other seeks to proscribe it." United States v. Westinghouse Electric Corp., 648 F.2d 642, 646 (9th Cir.1981) (citations omitted). Similarly, tension exists between the antitrust and copyright laws. See Data General, 36 F.3d at 1187. Two principles have emerged regarding the interplay between these laws:  (1) neither patent nor copyright holders are immune from antitrust liability, and (2) patent and copyright holders may refuse to sell or license protected work. First, as to antitrust liability, case law supports the proposition that a holder of a patent or copyright violates the antitrust laws by "concerted and contract....
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....in one market through patents and copyrights may violate § 2 if the monopolist exploits that dominant position to enhance a monopoly in another market. Although footnote 29 appears in the Court's discussion of the § 1 tying claim, the § 2 discussion frequently refers back to the § 1 discussion, and the Court's statement that "exploit[ing][a] dominant position in one market to expand [the] empire into the next" is broad enough to cover monopoly leveraging under § 2. Id.8 By responding in this fashion, the Court in Kodak supposed that intellectual property rights do not confer an absolute immunity from antitrust claims. The Kodak Court, however, did not specifically address the question of antitrust liability based upon a unilateral refusal to deal in a patented or copyrighted product. Kodak and its amicus correctly indicate that the right of exclusive dealing is reserved from antitrust liability. We find no reported case in which a court has imposed antitrust liability for a unilateral refusal to sell or license a patent or copyright.9 Courts do not generally view a monopolist's unilateral refusal to license a patent a....
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....nsing fees from Southeastern and other ISOs․ Id. at 1337. Rather than merely requiring Southeastern to pay for future use, the district court enjoined Southeastern from servicing the computers that had licensed software. See id. at 1334. We never reached Southeastern's antitrust counterclaims, as they had not yet been tried. Id. at 1338 (district court properly bifurcated the copyright and antitrust claims). Neither did we refer to antitrust principles in defining the reach of Triad's copyright. Parts and service here have been proven separate markets in the antitrust context, but this does not resolve the question whether the service market falls "reasonably within the patent [or copyright] grant" for the purpose of determining the extent of the exclusive rights conveyed. Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700, 708-09 (Fed.Cir.1992). These are separate questions, which may result in contrary answers. At the border of intellectual property monopolies and antitrust markets lies a field of dissonance yet to be harmonized by statute or the Supreme Court. When an owner of intellectual property takes concerted action in violation of § 1, this....
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....wsuits based upon the effect, on an arguably separate market, of their refusal to sell or license. The cost of such suits will reduce a patent holder's "incentive ․ to risk the often enormous costs in terms of time, research, and development." Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 480, 94 S.Ct. 1879, 1885, 40 L.Ed.2d 315 (1974). Such an effect on patent and copyright holders is contrary to the fundamental and complementary purposes of both the intellectual property and antitrust laws, which aim to "encourag[e] innovation, industry and competition." Atari Games Corp. v. Nintendo of America, Inc., 897 F.2d 1572, 1576 (Fed.Cir.1990) (citing Loctite Corp. v. Ultraseal Ltd., 781 F.2d 861, 876-77, (Fed.Cir.1985)).11 3.   We now resolve the question detailed above. Under the fact-based approaches of Aspen Skiing and Kodak, some measure must guarantee that the jury account for the procompetitive effects and statutory rights extended by the intellectual property laws. To assure such consideration, we adopt a modified version of the rebuttable presumption created by the First Circuit in Data General, and hold that "while exclusionary conduct can include a monopo....
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..... at 2092. The Supreme Court held that preventing the ISOs from "exploit[ing] the investment Kodak has made in product development, manufacturing and equipment sales" does not suffice as a business justification. Id. ("This understanding of free-riding has no support in our case law."). Given the interplay of the antitrust and intellectual property laws discussed above, Kodak's contention that its refusal to sell its parts to ISOs was based on its reluctance to sell its patented or copyrighted parts was a presumptively legitimate business justification. See Data General, 36 F.3d. at 1187. Kodak may assert that its desire to profit from its intellectual property rights justifies its conduct, and the jury should presume that this justification is legitimately procompetitive. Nonetheless, this presumption is rebuttable. See id. at 1188. In Data General, the First Circuit reasoned that the plaintiff did not rebut the presumption by drawing an analogy to Aspen Skiing, where a monopolist made an important change in a its practices, which had both originated in a competitive market and persisted for several years. See Data General, 36 F.3d at 1188. Because competitive conditions....
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....strict court should have allowed the jury to reach this conclusion. Kodak photocopy and micrographics equipment requires thousands of parts, of which only 65 were patented. Unlike the other cases involving refusals to license patents, this case concerns a blanket refusal that included protected and unprotected products. Cf. Westinghouse, 648 F.2d at 647 (refusal to license patents);  SCM Corp., 645 F.2d at 1197 (same);  Miller Insituform, 830 F.2d at 607 (claim based on termination of license agreement). From this evidence, it is more probable than not that the jury would have found Kodak's presumptively valid business justification rebutted on the grounds of pretext.12 Kodak argues that the existence of some patented and copyrighted products undermines ISOs "all parts" theory. To the contrary, as discussed above, the "all parts" market reflects the "commercial realities" of the marketplace and the lack of identifiable separate markets for individual parts. The fact that Kodak did not differentiate between patented and nonpatented parts lends further support to the existence of these commercial realities. The jury accepted the "all parts" theory and found a ....
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....ts a chance to speak for themselves. Bushong also indicated that his negative memories of Kodak were "not coming back stronger. They are actually subsiding." Consequently, the judge denied Kodak's motion to dismiss Bushong for cause.  Kodak can only succeed on a challenge for cause by showing that Bushong was actually biased. Ward v. United States, 694 F.2d 654, 665 (11th Cir.1983). Actual bias involves an inability to act impartially or a refusal to weigh the evidence properly. Id. A juror's initial impressions or initial bias may be irrelevant, at the trial judge's discretion, when that juror commits to lay aside those feelings and reach a verdict based on the evidence presented and the court's instructions. See United States v. Claiborne, 765 F.2d 784, 800 (9th Cir.1985), abrogated on other grounds, Ross v. Oklahoma, 487 U.S. 81, 108 S.Ct. 2273, 101 L.Ed.2d 80 (1988). The trial judge, who observes the demeanor and credibility of a juror, is best suited to determine a juror's impartiality. See Thompson v. Keohane, 516 U.S. 99, ---- - ----, 116 S.Ct. 457, 464-65, 133 L.Ed.2d 383 (1995). The district judge determined that Juror Bushon....
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....ical free economic market and what the plaintiff actually made in spite of the anticompetitive activities."). Whether that "unaffected" business properly compares to the relevant market presents a question of fact for the jury. Syufy Enterprises v. American Multicinema, Inc., 793 F.2d 990, 1003 (9th Cir.1986). A. Service Damages  The ISOs' damage expert employed two basic yardsticks in determining damages:  "1) plaintiffs' own non-Kodak revenues, and 2) the composite growth of other plaintiff ISOs' non-Kodak revenue." The ISOs' expert, Thomas Neches, found that ten of the eleven plaintiffs had sufficient non-Kodak revenues to justify using the first yardstick. Seven ISOs had insufficient non-Kodak revenues, so Neches calculated damages by comparing ISO's growth to the averaged annual composite growth of the other ISOs' non-Kodak revenues, the second yardstick. Neches used other methods in determining damages for plaintiffs MSI, CPO and ITS. Neches based MSI's lost profits on the statements of MSI's president to the effect that MSI would have earned 50% more "but for" the Kodak parts policy. For CPO and ITS copier service, Neche....
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....the smaller ISOs. Kodak highlights the distinction between the two groups:  the larger ISOs had access to parts and profited, while the smaller ISOs often gave up the search for parts. That the larger ISOs earned profits, however, does not preclude them from recovering damages to compensate any losses stemming from Kodak's anticompetitive behavior. Juries may award damages to profitable businesses for lost sales as the result of anticompetitive behavior. See Great Western Directories, Inc. v. Southwestern Bell Telephone Co., 63 F.3d 1378, 1387-88 (5th Cir.1995), superseded in part on other grounds, 74 F.3d 613, cert. dismissed, 518 U.S. 1048, 117 S.Ct. 26, 135 L.Ed.2d 1120 (1996);  see also Pierce v. Ramsey Winch Co., 753 F.2d 416, 436-37 (5th Cir.1985) (plaintiff can establish antitrust injury by showing that it would have earned an even higher profit but for antitrust injury). MSI and CPO, though profitable, showed that Kodak's parts policy handicapped their growth.  Kodak also claims that it was not responsible for the losses of ASI, which went out of business, as those losses resulted from ASI's inability to adapt to Kodak's conduct. ASI....
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....conspiracy claims invalidates the study. In the conspiracy and tying claims the ISOs alleged a different legal theory for the same harm that the jury found at trial:  exclusionary conduct leading to the monopolization of the service market. The jury found that Kodak's conduct deprived the ISOs of service contracts they would otherwise have obtained. That Kodak accomplished this through its parts policy and restrictions on original-equipment manufacturers and not through overt tying or conspiracy does not affect the total damages. Section 4 of the Clayton Act provides for damages upon a showing of antitrust injury. 15 U.S.C. § 15;  Datagate, 941 F.2d at 868 (citations omitted). Kodak argues that the ISOs' damages do not comport with the impact of a hypothetical open sale policy on parts. Neches agreed that if Kodak increases its parts prices, the ISOs' service profits would decrease in the "but for" world without Kodak parts policy. These changes could decrease the ISOs' profit margins. For most ISOs, however, the jury was asked to compare revenues from service on equipment brands not restricted by a parts policy.15 These competitive market....
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....the ISOs point to no basis in the record for quantifying lost sales of used equipment caused by Kodak's service monopoly. The ISOs' evidence consists only of complaints by individual ISO owners that they could not sell used equipment because they could not find anyone to service that equipment besides Kodak, who effectively refused. Kodak's used equipment service policy could not properly be presented to the jury as an anticompetitive practice given the district court dismissed the ISOs' used equipment monopolization claim. The ISOs counter that they explained the causation issue to the jury, which did not award all the damages requested. Nonetheless, any damages awarded were speculative. Maintaining that all damages were caused by Kodak's anticompetitive conduct, the ISOs argue that disaggregation is required only where some damage has been caused by lawful activity. This argument renders the distinction between conduct not adjudicated unlawful and "purely lawful competitive action" illusory.16 In the context of a § 2 monopolization claim, conduct is unlawful because of its anticompetitive effects on the relevant market. Yet conduct found anticompe....
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....d thus the ISOs are free-riding. Further, the injunction requires Kodak to sell all parts for Kodak equipment, whether or not Kodak manufactures those parts, and forbids Kodak from interfering with sales to ISOs by original-equipment manufacturers.18 Through these two provisions, the injunction allows the ISOs to choose between purchasing from Kodak, which must warehouse parts, or from individual suppliers. Because the ISOs have an alternative source for these parts, the "no interference with [original-equipment manufacturers]" requirement is unnecessary and anticompetitive. It promotes free-riding by requiring Kodak to pay for keeping a massive inventory of parts for the ISOs. This "all parts" requirement creates barriers for non-Kodak original-equipment manufacturers by requiring them to price replacement parts at levels necessary to attract ISOs away from Kodak's parts counter. It also unnecessarily entrenches Kodak as the only parts supplier to ISOs. Consequently, we direct the injunction to require Kodak to sell only Kodak-manufactured parts. In order to avoid confusion over combinations of parts made from some elements manufactured by Kodak and some by original-equipme....
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.... L.Ed.2d 184 (1971) ("While ․ any individual threatened with injury by an antitrust violation may ․ sue for injunctive relief ․ one injunction is as effective as 100.");  Bresgal v. Brock, 843 F.2d 1163, 1170-72 (9th Cir.1987) (relief in favor of nonparties appropriate where same defendant enjoined and where broad scope is necessary to give prevailing parties relief). Relief in favor of all ISOs prevents entrenching the ISOs as service or parts oligopolists. Likewise, the district court had ample authority for ordering forced sale or licensing of patented or copyrighted products. See Glaxo Group, 410 U.S. at 62, 93 S.Ct. at 867. We direct the following modifications to the injunction: 1. DEFINITION OF TERMS As used in this permanent injunction, the following terms shall have the following meanings: (a)"Kodak" shall mean the defendant Eastman Kodak Company, its officers, agents, servants, employees, attorneys and all persons in active concert or participation with any of them who receive notice of this injunction [, and Kodak's successors and assigns]. (b)"Kodak equipment" shall refer to all past, present and future micrographi....
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.... To the extent Kodak offers to its own technicians, for their use in repairing and maintaining Kodak equipment, individual Kodak parts as well as subassemblies containing numerous Kodak parts, or to the extent it is reasonable to do so, Kodak will offer to sell to any interested party on [reasonable and] nondiscriminatory terms and prices such individual parts and subassemblies, even though doing so gives the prospective purchaser the option of obtaining a particular part by itself or as a component of a subassembly. (d) The provisions of this Injunction apply to equipment models which Kodak will introduce during the term of this Injunction as well as to the equipment models which Kodak has already introduced. (e)"Sell" as used in paragraph 2(a), above, includes, at Kodak's option, "license" with respect to any copyrighted "parts," on [reasonable and] nondiscriminatory terms. 3. ISO ACCESS TO THIRD PARTY SOURCES OF PARTS (a) Kodak shall not interfere with the ISOs' purchase of parts from third party vendors (including the purchase of parts from Kodak parts suppliers), so long as the ISOs or vendors are not causing the breach of any obligation of t....
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....irections as may be necessary or appropriate for the construction, modification or termination of any of the provisions herein, or for enforcement and compliance with its terms or for the punishment of violations. VII We AFFIRM as to all liability issues;  REVERSE all damages awarded to ASI and those damages awarded for lost sales of used equipment and REMAND for a new trial on used equipment damages. We AFFIRM on the remaining damage awards and AFFIRM the injunction as modified. Additionally, we award partial attorney's fees for the ISOs to be determined by the district court. AFFIRMED in part, REVERSED in part, and REMANDED for further proceedings. I join in the majority opinion affirming in part, reversing in part and remanding for further proceedings, with the exception of two modifications to the permanent injunction of the district court. Both modifications concern the applicability of the injunction to Kodak's successors. The first is the deletion of the provision in paragraph 1(a) of the injunction specifying that the injunction applies to "Kodak's successors and assigns." The second modification with which I do not agree is the addition to pa....
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.... Cattle Co., 967 F.2d 1280, 1298 (9th Cir.1992). The Supreme Court has recognized that a successor of a party may be in privity with that party for purposes of Rule 65(d). Golden State Bottling, 414 U.S. at 179, 94 S.Ct. at 422-23. The district court had authority to enjoin Kodak's successors and assigns from continuing Kodak's violations of the antitrust laws. A provision extending application of an injunction to the successors and assigns of a named party is often essential to the effectiveness of the injunction. As was noted in Gallo, without such a provision, "the injunction theoretically might be defeated by assignment;  at the very least an avenue for further litigation would be left open." Gallo, 967 F.2d at 1298. If an injunction does not apply to the defendant's successors, the defendant could nullify the injunction by assigning a portion of its business operations to a third party, which would then be free to resume the enjoined activity. Even where assignment is not the product of intentional collaboration by the defendant and the assignee to avoid the impact of the injunction, assignment permits the assignee to resume the enjoined conduct and force....
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....t did. Although an appellate court may modify an injunction when such action is "necessary to assure that the relief will be effective," see Glaxo, 410 U.S. at 64, 93 S.Ct. at 868, it appears that the majority's modifications will drastically reduce the effectiveness of the injunction. The Supreme Court noted in Glaxo that the "purpose of relief in an antitrust case is 'so far as practicable, [to] cure the ill effects of the illegal conduct, and assure the public freedom from its continuance.' " Id. (quoting United States v. United States Gypsum Co., 340 U.S. 76, 88, 71 S.Ct. 160, 169, 95 L.Ed. 89 (1950)). The majority's modifications contravene this purpose by eliminating crucial elements of the relief obtained by the ISOs and by eliminating the injunction's prohibition on a continuation of anticompetitive conduct. The district court attempted to fashion an injunction that would provide effective relief for the ISOs and prevent the continuation of Kodak's anticompetitive policies. The two modifications addressed herein drastically reduce the effectiveness of the injunction. I would affirm the district court's decision to apply the injunction to Kod....
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....entitled to relief for infringement ․ of a patent shall be denied relief or deemed guilty of misuse or illegal extension of the patent right by reason of ․ (4) [the patent owner's] refus[al] to license or use any rights to the patent." 35 U.S.C. § 271(d) (1988).The First Circuit has observed that this amendment "may even herald the prohibition of all antitrust claims ․ premised on a refusal to license a patent." Data General, 36 F.3d at 1187 (citing Richard Calkins, "Patent Law:  The Impact of the 1988 Patent Misuse Reform Act and Noerr-Pennington Doctrine on Misuse Defenses and Antitrust Counterclaims," 38 Drake L.Rev. 175, 192-97 (1988-89)). The amended statutory language does not compel this result, and Calkins and other commentators agree that § 271(d)(4) merely codified existing law. See Calkins, 38 Drake L.Rev. at 197;  5 Donald S. Chisum, Patents, § 19.04[1] at 19-295 (1992) ( "The 'refusal to license' provision received little attention in the floor statements, primarily because the provision was intended to codify existing law."). The amendment does, however, indicate congressional intent to protect the core....
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....d not presume that it was found. 11. That antitrust claims may cut into the core rights conferred by patents and copyrights is illustrated by the injunction imposed by the district court here. The injunction requires that Kodak supply all ISOs with its patented and copyrighted materials at "reasonable prices." Even the ISOs do not dispute that Kodak is entitled to reap monopoly prices from the sale or licensing of these materials. 12. In Jury Instruction No. 34, the jury was instructed that, if they "find that any Kodak business reason" is a legitimate business reason, in that it "furthers competition on the merits, reduces prices, enhances the quality or attractiveness of a product, increases efficiency by reducing costs or otherwise benefits consumers," they "should then consider whether each such reason is pretextual-in other words, not a genuine reason for Kodak's conduct." 13. Kodak does not point to evidence showing that MSI's president based his 50% earnings growth estimate on pre-1986 equipment. 14.Although Neches' calculation of the equipment available to service in different markets might have been skewed by failing to take equipment under point-of....