Eastman Kodak Co. v. Image Technical Services, Inc., 504 U.S. 451 (1992)

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certiorari to the united states court of appeals for the ninth circuit

No. 90-1029. Argued December 10, 1991—Decided June 8, 1992

After respondent independent service organizations (ISO's) began servicing copying and micrographic equipment manufactured by petitioner Eastman Kodak Co., Kodak adopted policies to limit the availability to ISO's of replacement parts for its equipment and to make it more diffi-cult for ISO's to compete with it in servicing such equipment. Respondents then filed this action, alleging, inter alia, that Kodak had unlawfully tied the sale of service for its machines to the sale of parts, in violation of 1 of the Sherman Act, and had unlawfully monopolized and attempted to monopolize the sale of service and parts for such machines, in violation of 2 of that Act. The District Court granted summary judgment for Kodak, but the Court of Appeals reversed. Among other things, the appellate court found that respondents had presented sufficient evidence to raise a genuine issue concerning Kodak's market power in the service and parts markets, and rejected Kodak's contention that lack of market power in service and parts must be assumed when such power is absent in the equipment market.

Held: 1. Kodak has not met the requirements of Federal Rule of Civil Procedure 56(c) for an award of summary judgment on the 1 claim. Pp. 461-479. (a) A tying arrangement—i. e., an agreement by a party to sell one product on the condition that the buyer also purchases a different (or tied) product, or at least agrees that he will not purchase that product from any other supplier—violates 1 only if the seller has appreciable economic power in the tying product market. Pp. 461-462. (b) Respondents have presented sufficient evidence of a tying arrangement to defeat a summary judgment motion. A reasonable trier of fact could find, first, that service and parts are two distinct products in light of evidence indicating that each has been, and continues in some circumstances to be, sold separately, and, second, that Kodak has tied the sale of the two products in light of evidence indicating that it would sell parts to third parties only if they agreed not to buy service from ISO's. Pp. 462-463.


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