Antitrust Law Daily Wrap Up, ANTITRUST—D. Ohio: Ink producer granted preliminary injunction against Kodak in illegal tying suit, (Mar 11, 2014)

By Linda O’Brien, J.D., LL.M.

The federal district court in Cincinnati has granted an ink producer a preliminary injunction, restoring the nondifferential pricing of printhead refurbishment services using the producer’s ink and Kodak’s ink, in the producer’s illegal tying, Lanham Act unfair competition, and Ohio deceptive trade practices action against Eastman Kodak, a manufacturer of printers and printer ink (Collins Inkjet Corporation v. Eastman Kodak Company, March 10, 2014, Barrett, M.).

Eastman Kodak manufactures Versamark printers that it sells to printing companies. Kodak also manufactures printheads for Versamark printers and provides refurbished printheads. Collins Inkjet Corporation is a producer of ink for use with Kodak’s Versamark printers.

From 1989 until 2001, Collins competed with Kodak in the sale of Versamark ink. In 2001, however, the companies entered into an agreement under which Kodak would be the exclusive reseller of Collins’ Versamark ink. Collins provided both ink branded as “Collins” and ink branded as “Kodak,” while Kodak produced some ink that was also branded as “Kodak.” Customers could order Collins ink through either Collins or Kodak. In 2011, Collins developed concerns about Kodak’s financial stability and terminated the agreement. In July 2013, Kodak announced a new policy that increased the price disparity between printheads used with Kodak ink and those used with Collins ink.

Collins filed a complaint against Kodak, alleging that Kodak unlawfully tied the purchase of ink to the purchase of refurbished printheads for Versamark printers and engaged in deceptive trade practices and unfair competition in coercing customers into purchasing Kodak ink and in making false and misleading statements about the producer’s ink. Collins moved for a preliminary injunction against Kodak’s (1) tying of its ink to its refurbished printheads, (2) enforcement of its provisions increasing the cost of refurbished printheads used with Collins’ ink, and (3) against failing to provide printheads to customers using Collins’ ink under the same terms and conditions as it provided printheads to customers using Kodak’s ink.

Following the issuance of a sealed opinion and order, the court granted Collin’s motion for a preliminary injunction, which is to remain in effect for six months. In its supplemental order, Kodak is required to maintain non-differential pricing of its Versamark printhead refurbishment services for customers purchasing either Collin-brand ink or Kodak-brand ink. Additionally, a bond of $100,000 was set.

The case is No. 10-cv-02516-WJM-KLM.

Attorneys: Christopher D. Stock (Markovits, Stock & DeMarco LLC) for Collins Inkjet Corporation. James Eugene Burke (Keating Muething & Klekamp PLL) for Eastman Kodak Company.

Companies: Collins Inkjet Corporation; Eastman Kodak Company

Cases: Antitrust OhioNews