[1] The reason was that it was possible that, once customers were committed to the particular brand by having purchased a unit, they were "locked in" and no longer had any realistic alternative to turn to for repair parts.

The effect of these practices is to bar sales of parts required to repair and maintain Kodak copiers and imaging equipment to the ISOs.

[9] Turning to the monopolization claim, the Ninth Circuit concluded that there were material issues of fact concerning whether Kodak fell within one of the exceptions to the principle that a firm generally has no duty to deal with competitors.

[13] Kodak argued that it could not have the power to raise prices of service and parts above the level that would be charged in a competitive market, because any increase in profits from a higher price in the aftermarkets at least would necessarily be offset by a corresponding loss in profits from lower equipment sales as consumers began purchasing equipment with more attractive service costs from other sellers.

It urged the Court to adopt an irrebuttable presumption or substantive legal rule that "equipment competition precludes any finding of monopoly power in derivative aftermarkets.

[16]The real underlying problem with Kodak's theories, echoed by the United States (Antitrust Division) as amicus curiae, is that it unrealistically postulates an all-knowing equipment purchaser: [Copier equipment] consumers must inform themselves of the total cost of the "package"—equipment, service, and parts—at the time of purchase; that is, consumers must engage in accurate life-cycle pricing.

In order to arrive at an accurate price, a consumer must acquire a substantial amount of raw data and undertake sophisticated analysis.

The necessary information would include data on price, quality, and availability of products needed to operate, upgrade, or enhance the initial equipment, as well as service and repair costs, including estimates of breakdown frequency, nature of repairs, price of service and parts, length of "downtime," and losses incurred from downtime.Much of this information is difficult—some of it impossible—to acquire at the time of purchase.

Kodak contended, however, that as a matter of law a single brand of a product or service can never be a relevant market under the Sherman Act.

He explained, "Though that power can plainly work to the injury of certain consumers, it produces only a brief perturbation in competitive conditions—not the sort of thing the antitrust laws do or should worry about.

"[24] The Court should not condemn out of hand "such potentially procompetitive arrangements simply because of the antitrust defendant's inherent power over the unique parts for its own brand.

The court held that rights under patents and copyrights are a rebuttably presumed legitimate business justification for refusing to deal with competitors.

In addition, significant barriers to entry existed in the parts and service markets, and "Kodak has 220 patents and controls its designs and tools, brand name power and manufacturing ability[,] .

"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."

[30] The court concluded it should use this test to resolve the question of whether one in Kodak's position should be held liable: "while exclusionary conduct can include a monopolist's unilateral refusal to license a [patent or] copyright," or to sell its patented or copyrighted work, a monopolist's "desire to exclude others from its [protected] work is a presumptively valid business justification for any immediate harm to consumers."

After reviewing the evidence, the court said that "it is more probable than not that the jury would have found Kodak's presumptively valid business justification rebutted on grounds of pretext.

[32] In this case, however, it would be sufficient that the prices be nondiscriminatory and therefore the Ninth Circuit modified the district court's injunction order to eliminate the reasonableness requirement.

[33] In his 2015 book Federal Antitrust Policy, The Law of Competition and Its Practice, he said: Twenty years of litigation under Kodak had expended millions of dollars in legal fees and not produced a single defensible decision finding market power on the basis of lock–in.

[36] In both cases the Court found that the organizations were tampering with price mechanisms by using the unavailability of information to prevent "the functioning of markets."

Patterson sees Kodak as an extension of these decisions and "thus a step toward providing a more economically supportable and judicially consistent antitrust treatment of information.

Their explicit goal was judicial economy through the rejection, as a matter of law, of the position that consumer welfare can be harmed if manufacturers of complex durable equipment are allowed to recover monopoly profits in aftermarkets (like service or software) of their products.

"[39][40] A paper by three economists—Borenstein, MacKie-Mason, and Netz—agrees with the Kodak Court that "market imperfections can keep economic theories about how consumers will react from mirroring reality."

While such rapid growth does occur at times, it is generally short-lived and is then followed by a period of slowly growing or declining equipment sales.

The reason is that a manufacturer's aftermarket pricing policies can raise the cost of switching by lowering the market value of a customer's used equipment.

The result is that the customer "is unable to avoid the costs of supracompetitive aftermarket pricing, and the possibility of switching to another equipment brand does not solve the problem, as defendants argue."

Accordingly: "Even under the most favorable assumptions-perfect competition in the equipment market and perfect information on the part of consumers-firms have the ability and incentive to price aftermarket products above cost.

Instead, Kodak is required to withstand trial, and prove that its economic theory is indeed representative of reality in order to successfully defend its replacement parts policy.

[47]The Comment sees Kodak as "clearly a setback for Chicago School adherents who seek to fully integrate their economic theory into antitrust law," and instead a coming era in which "parties will be forced to factually demonstrate the effect on competition caused by the challenged conduct" and where "reliance on economic theory alone will not suffice.

"[59] Relying on the Supreme Court's 1908 decision in Continental Paper Bag Co. v. Eastern Paper Bag Co.,[60] in which the Court stated that arbitrary "exclusion may be said to have been of the very essence of the right conferred by the patent, as it is the privilege of any owner of property to use or not use it, without question of motive,"[61] McCullen argues that the Federal Circuit correctly concluded that subjective motivation for the refusal to license is irrelevant and should not be inquired into.

"[62] ● Seungwoo Son, in an article in the University of Illinois Journal of Law, Technology & Policy,[63] expands on the comparison between the Kodak remand and the Federal Circuit's Intergraph[64] decisions to include the FTC's proceeding against Intel over use of monopoly power in the microprocessor market to force customers to grant Intel royalty-free licenses to their own microprocessor technology[65] and the Federal Circuit's decision in the Independent Service Organizations (or Xerox) case.