When Kodak Tried To Squeeze Our Client, MSD Took The Fight To Kodak
Collins Inkjet Corp. v. Eastman Kodak Company
MSD prevailed when the court sided with Collins and granted the preliminary injunction. Kodak appealed this decision to the United States Court of Appeals for the 6th Circuit and to the U.S. Supreme Court – but the decision and MSD held.
Kodak and Collins were competitors in the specialized ink market for Kodak’s Versamark printers. Over time, Collins came to dominate this specialized ink market by making higher quality inks at a lower cost. Rather than rise to the competition, however, Kodak attempted to push Collins out of the market by rigging the game.
Kodak issued a new pricing guide to all Versamark printer owners stating that they would receive deep discounts on the purchase of refurbished printheads – a necessity for the printers – if they purchased Kodak ink. Because Versamark customers were forced to go to Kodak for the refurbished printheads, the new policy made it economically infeasible for customers to continue to purchase Collins ink. If left unchallenged, Kodak’s new policy would essentially force all of Collins’ customers to abandon Collins ink. For Collins, the stakes couldn’t have been any higher: stop Kodak from implementing this policy or close its doors. So MSD got to work.
MSD prevailed by digging up an old, little-used legal theory and repackaging it in the context of a modern David and Goliath story.
Digging in, we were able to identify an old legal theory developed to prevent a firm from using its monopoly power in one market to force competitors out of another. The added benefit was that the seminal case on this legal theory was a U.S. Supreme Court case that actually tagged Kodak for engaging in this kind of behavior previously. With our legal theory in hand, we did a thorough investigation to make certain that the facts and the law complemented one another.
Within days of getting the call from Collins, MSD had filed a verified complaint and a motion for preliminary injunction seeking to stop Kodak from implementing this policy and pushing Collins out of the market. The parties engaged in expedited discovery, exchanging hundreds of thousands of documents, and taking dozens of depositions over the course of approximately six weeks (a process that can take years). The court then held a several day hearing on our preliminary injunction motion. The court sided with Collins and MSD and granted the preliminary injunction. Kodak appealed this decision to the United States Court of Appeals for the 6th Circuit and to the U.S. Supreme Court – but the decision and MSD held. And to this day, Collins remains a leading provider of innovative inkjet solutions.
Winning this case combined three traits we pride ourselves on at MSD: Creativity, innovative strategy and more than a little hard work. We dug deep, found the theory, ensured it would work here – and then we outworked a team of highly paid corporate lawyers. We happily worked 20 hour days for months, but we earned a spectacular result for a client who still sings our praises.
“As a small, family-owned company, the prospect of entering into complex litigation against a large company like Kodak is unnerving,” said Collins’ CEO Lawrence Gamblin, “but less so with the MSD team behind you. In our case, MSD offered compassionate, realistic counsel which allowed us to make rational informed decisions. MSD guided us through the process, but followed our lead. It was a true partnership. In the end, MSD’s commitment, diligence, and obvious expertise made the difference between a successful and unsuccessful outcome.”