Brattle academic advisor and Miami University professor John Bowblis provided expert testimony in the Collins v. Kodak tying case before the U.S. District Court in Cincinnati. The court’s finding in that case was recently affirmed by the U.S. Court of Appeals for the Sixth Circuit. Dr. Bowblis’ report was directly cited in the appellate court’s decision.
The issue in this case is similar to the one in the Kodak tying case decided by the U.S. Supreme Court in 1992. In that case, Kodak provided 100% of aftermarket parts necessary for photocopy machines, and Kodak implemented a policy under which it would sell aftermarket parts only if the aftermarket service were performed by Kodak. This resulted in what was effectively a contractual tying arrangement.
In the current case, Kodak sold Versamark commercial printers which required two aftermarket products unique to the Versamark printer: ink and printheads. Kodak provided 100% of the aftermarket printheads but competed with Collins Inkjet for sales of ink. Kodak implemented a pricing policy under which customers paid more for the printheads if they did not use a Kodak-branded ink, which is tantamount to a tying arrangement. Collins sought a preliminary injunction against the policy, which was granted by the court in early 2014. Kodak appealed, and the appellate court decision affirmed the lower court’s decision.
Dr. Bowblis provided testimony on behalf of Collins to demonstrate that customers were forced to accept the pricing policy because high switching costs and a lack of information locked them into their Versamark printers. These switching costs include the price of new printers, the need for compatibility with other existing equipment, the transaction costs of switching suppliers, the cost of learning and training workers to use new brands, and the uncertainty about quality of untested brands.
Additionally, Dr. Bowblis opined that Collins would suffer from irreparable harm without a preliminary injunction. The Court’s opinion, as well as additional details about Dr. Bowblis’ involvement, can be downloaded using the links below.