rivals like cisco microsoft and siemens a fire has a business model that is common in the industry and entirely legal it requires buyers of its equipment either to obtain mai via one of its business partners or to perform their own maintenance are priests explaining the multiple errors that occurred in the proceedings among other things the district court was wrong to take from the independent of any errors you think occurred in the end i trust instructions given to the jury the decision to grant judgment as a met along the common law claims ended up infecting the way the jury consider antitrust counterclaims that correct yes judge jordan that is also a clear our position for the reasons we stated in our blue and yellow briefs ok focusing just on the antitrust part for a moment sure liability although judge all the sort of long time ago from this court noted that it's a little bit of a bad joke because there are so many exception the the requirement that there be some kind of predatory action in addition to tying to make out a claim of the sort that was predatory well we don't think that the tying behavior here or for that matter the attempted monopolization behavior here is predatory and we think we're entitled to judgment though from the attempt you didn't anything about the facts of this case as a divorce from this case will be radically you've got a case a lot like us with what would he get what's that extra thing he would need if if first of all both of these claims were tried under the rule of reason but whether it was a rule of reason or a per se case the counter claim it was required of for me to flee to prove both that there was any competitive conduct that is conduct that rises to the level of a violation of the sherman act and that there was a relevant after market and with respect to the p b x claims we are entitled to a judge to judgment on both of those first of all the p b x verdict has to be reversed because both of t l wise primary theories of any competitive condo that is an unlawful  refusal to deal and so called failed letters that rise to the level of a sherman act violation fail as a matter of law and in any event even if that were true there was no as a matter of law there was no well of it any trust after market for p b s maintenance after may two thousand and eight when even t l i c e o concedes that the via began stating its maintenance policy in its customer contracts ok so if we said that were true and that you couldn't then tease out with the damages or the the result of that was then you  know all might be great it would have to go back but you'd still have to try to preach to thousand e bay you're right that's right we think that the appropriate well only if we're wrong on the failure to prove any competitive right if you disagree with us and think that there prove did establish any competitive conduct that rises to the level of a sherman to violation then we would be entitled to judgment for your conduct after one contracts after may two thousand on the post two thousand and eight and on the pre two thousand and you can't because because the jury was not properly instructed on what is required to find a relevant any and over our objection to the jury this could give you know however much weight it wanted to any of those factors without instructing the jury as the liberal priors that even if you walk in one of the factors so long as customers in the primary market under either understood that that software would not be available if the customer used it on an authorized independent service provider or that buyers in the primary market had no reason to think that they could obtain of vida's proprietary understood that they would not be able to get of via software if they were using an on off the rise service provider then by definition the primary market is disciplining pricing in the restriction for me and i trust challenge well i think this is because in queen city the french as you had notice i don't read that case the same or any other case to say it was wrong as you can show that the customer base kodak required a different result but i want to make clear screens i mean not only have at least five other circuits held but if if even if you have rocketed if customers in the primary market that's that's right he made that point but he didn't win the day well that's because in calling code at kodak was asking the court and prevail but row on a theory that if you have competition in the primary market then by definition you can never have an independent after market or monopoly power in the aftermarket and well to screw with the supreme court said is none of that's not necessarily true because you could have and in fact the evidence in that case tended to show that people who bought kodak acquit didn't understand that they wouldn't be able to get parts if they used that independent service provider and in fact queen city distinguished kodak i understand that there were there were other reasons for finding no n h s market but in response in a valid response to the argument that kodak required the finding of a market in this case markets fabric that it bargained for and many other circuits have cited this court's decisions particularly queen city pizza for the proposition that if you have a contract in the primary market that says here's the after market things about the p b s after an interest claim too but i think it's important to understand distinguish between the period of contract signed before may two thousand and eight and contracts signed after as the trial judge did  creating an injunction where as to the earlier period but not the later period but that sounds like a concession pretty a rate that will meet your i mean much stronger footing after a rate let me be very clear about this our position is that follows the as a matter of law we are entitled to judgment for all contracts signed after two thousand and eight and because that is the end because the jury that the court declined our requests that would jury make findings that distinguish between the two periods we were entitled to a new trial even as to the prior period but as of the prior period in the evidence that you're reflecting our contention is that our brief outlines this the evidence was very very substantial very substantial but i'm not asking for a judgment as a matter of will that customers that bought a via quit in the primary market ask when you say there was no basis for that via chose to sit at the market if i understand the record correctly they offered korea wait going back to their early days of two three you could buy the most expensive level of service which was from a buy you could buy service the day admin service from their business partners were you could in effect self insure by your  your lot again and then you would take quote maybe take care of yourself but that but this is soon as you create a market where you say you can self serve haven't you created a market an after market which implies you can have other people help you with your self service irrelevant judge jordan you're absolutely correct that via offered customers three options they could get full gold plated a viable mate nice they could get a lower level of maintenance from business partners who are in that are not rivals they are not independent they are they are partners quickly became rival well for one company they decided to cannibalize a viable business and that business partner relationship was terminated and they became a rival they were no longer cooperating with or never ever ever dealt directly with an authorized service providers it was never provided and seized on authorized service providers if they had a business model then i'm going to bring you back to my question which you don't have an answer to yet and since round time i want to get an answer to mr waxman can did your client not create the after market release running up to two thousand me by creating the so called maintenance assist program where people could have their own access which a reasonable person could think that doesn't mean i have to do it all by myself if i can find a contractor to help me do it i can do that right and they are answers that were very clear about this is we think that a properly influx struck the jury would find the answer that question to be no because v and again preferred the court to the portions of our brief that discuss the trumans all of the consumer sales contracts the consumer sales contracts even before two thousand and eight provided customers 't it is it very much a question for the jury and i think that's most revelatory here is that when when you know i was terminated in two thousand and three they sued of  were activated only through these fraudulent meetings and that is a we think a jury could certainly have found that that is a violation of their contract with us and obligation that survived the a feature of the system that is provided it is a feature specifically is the capability to maintain the system and then i think in any ver bachelor sense of the word it is both a feature a feature that provides a capability but our only submission to the court is that the trial judge had no business and no authority taking these questions of contract interpretation and for that meet but you could still have a market with high switching costs with high information costs where there could still be liability yet i'm required one is is there a rocket if there's no lock in by death and that is if if the customer in the secondary market could just as easily get rid of the primary equipment then by definition there's no market power about with an after market but even if you have walk in there is the issue of information costs that is could a reasonable but this court is called a reasonably diligent customer understand the policy and second of all was there a post primary market purchase change as there was in kodak and our submission is and i think we've cited the court to the other circuits that have cited this court this circuit's authority to the point that even where you have rocketed if there was as there was in this case no post sale price change or a policy change at least after may two thousand and eight with by definition that's the that's the question see that's the problem because it assumes that the two thousand and eight contract was so clear that no reasonable customer could have misunderstood it right i mean the assertion is that you were on notice why because our posture where that's something that the jury ought to be taking account of were these people on notice was a reasonable customer so thoroughly on notice that they should have understood and sure is your is your argument for judgment as a matter of law for the post in the two thousand and eight sales and its police because there's a question about the notice you gave so i agree with you judge jordan that if there if the evidence provided a reasonable juror to find that vet it's vet reasonably diligent buyers who did not ascertain the policy barring independent service providers from using our software commands testified under oath that the meaning of that language was that you could not get access to a biased proprietary software and so it's a sufficiency argue that or go to thanks very much as as is our argument with court's permission he please a court james martin for the pelleas and cross appellant i wonder if i might go straight to the two thousand and eight contract issue sure to give the court our perspective on that as it stacks up on the record here i'm pretty sure you disagree with this or what we do in almost every particular starting with whether the argument can be made the instructional way or the to be merged on appeal in support of the two thousand and eight contract is demand at a via made in the trial court it's a very different argument instruction offered in the trial court that related to two thousand and eight was that all the five factors had to be proven in a must fashion the instructional error that there are ging in a briefing on appeal is different but even if we get by the waiver point your honour's as was touched on in the discussion there is no support in the case law for the notion that the presence of notice in two thousand and eight would be in effect in and unity that disposes of the rest of the analysis of the kodak factors that produce throw certain factors that are dispositive and yes no right or standing i think from thirty thousand feet that's where the parties first separate but but how can it be the case as a matter of economic theory that if you've got if you have clearly unequivocally put your buyers on notice this is a sophisticated market these are people bumbling off the street deciding whether to buy gum or this is it these are large purchases made by so large sophisticated entities businesses and government right so if you've got clear notice to sophisticated parties that you buy or equipment you're buying or service to  and the software patches or upgrade these are coming from us and only from us and other words if you've got that upfront bundling and everybody knows it  isn't there isn't the import of queen city and harrison here if not the explicit holding that you've got a an extraordinary hurdle to overcome because you haven't been able to  cirrus an a or there wasn't one says the moment what is queen city mean if it doesn't mean hey you could buy any franchise you want there's lots of them out there domino's is not the only pizza franchise available to you you know you're going to be by domino's don't you buy domino's franchise so don't come crying to us what is it about queen city that you think would support the notion that that kind of clear notice doesn't cut you off so first of all the notic sidney was in the primary market we're talking here about issues that relate to the after market second queen city the analysis was in light of all the intuition in kodak hold on to second so we're on the same page i want to keep her son post may two thousand and eight but i so we're we're in the primary market as i understand it right it for the for that period because you're this is supposedly telling people as they so there's a whole basis to affirm this verdict on the preety thousand eight conduct as a matter of fact and as a matter of law under this court's presumptions but but moving straight to queen city city suggests on its facts that the notice is dispositive because of what the customer knew in the primary market relative to the notice that was given and relevant to the rest of the factors that might be in play in kodak because notice doesn't mean that you can dispose of high switching costs lack of information cost unless you have a record that establishes that the customers actually understood the notice that way it and therefore responded accordingly so wait your c e o did it well let me focus on this for a minute on this record because this is a very important point here there's no support for this instruction in this record because there isn't any evidence that there was this clarion call in two thousand and eight with this notice stuart with the evidence well you've just had one   use it is that not indicative of understanding and knowledge in the market or only your own c e o submissions it certainly could be but i'm not even sure it's relevant to it because he wasn't a contracting party his contract in evidence from three pm now if we're talking about notice relative to that contract the three am customer said i'm going to use an independent service provider namely t l c i see so if would agree with all that and actually get how to how do we do that assuming that we disagree with you on the import of the weight change how does the verdict survive ok so it couple more things just on the factual record on  none of the contracts are in evidence there's no testimony from customers that those contracts were regularly used there's evidence in the record that they were not regularly lose use so for an instruction n supported by the evidence it would be reversible error to give it where else did they go for the notice when you when you say there's there's nothing in the record there is there certainly is  old way contracts in the record right when contracts right and the character of the market is amply represented in the market right i mean in the record that these are sophisticated buyers well represented making roche ticket purchases but then we have to take two other steps that that a way contract was in fact regularly used and second that it it was understood by the customers to be ok that's a jury issue in this case then how can it be that you can say the verdict survives it because we are talking about your honor a claim an instructional layer for instruction that was not given in this case allow the jury to consider that issue which they did sure but if they didn't instruct even if even if it's not even if we were to not accept the argument that after market should the jury know that that's at least a highly salient factor which is something that a plaintiff ought to be able to be expected to come forward with serious evidence that overcome not just that it's one of five things you can throw in a grab bag and think about well i would say two things first of all if we look at the instructions in this case it allowed the jury to traverse a path and evaluate the significance of that notice in the manner th six twenty and destructions that applied to damages which deal directly with this point the first is that the jury was instructed to evaluate the lawfulness and unlawfulness of the conduct as as it relate was was relevant to the liability calculus then the jury was told specifically that it couldn't award damages where it found the conduct was lawful it could only award damages for unlawful conduct and further that if the jury couldn't sort between the two when that is a portion then it couldn't award damages at all so the jury was given much more specific direction here than just the f factors in on the factors it was specifically told that we had to provide evidence for all of that in order to get the jury's consideration for this and that they if they disproved one of them the jury could go against them so under the controlling law the jury hands would be needed in order to make this determination in a via had the platform to argue with your honor which it did if that jay mohr was improvidently or in quickly granted that that undermines the entire verdict i would disagree with that my true that again comes as no surprise but how do you see how do you save the verdict on your answer trust counterclaims if the if the if it was incorrect for the court to take the common want claims away and tell the jury they couldn't even think about those  and i trust claims in the full awarded damages preach to all wait and so the first place to start is that the presumptions in favor of the verdict substantiate that the twenty million dollars properly could have been awarded on the evidence that was admissible supported by d m egyptian unstick came in so we can you speak they'll respond to very assertion which i'm not here so far but i might just miss it their assertion as i understand it from the briefing is the judge instructed that jury don't consider any of the back and forth behavior that that the  damages in the verdict is that this it now has to be a claim of prejudicial error to overturn a verdict that was fully supported and can be affirmed now as to of my is making this argument reason i am saying that is because a claim of prejudicial error which this court case in her early says it applies to any argument no matter hell intuitively a strong it might be  requires a development of how it would have been different if we were entitled to know that before we wrote our briefs the only reason actually that this argument is is developed by us at all is that we responded to it despite the fact that they didn't make it ok so so so just for the sake of discussion we didn't think it was right what's your response so turning to the lawfulness instruction that the court focused on that was only one small instruction in a package of broader instructions it was separated the liability instructions and it was not as all encompassing as the court destroyed there were two pieces to it the first was  that that the jury was told that of vi's state law claims had been resolved now as we pointed out in our briefing that certainly did us no favors because resolved to didn't say rejected it didn't say dismissed and for practical purposes the front half of that a jury instruction was as consistent with them being right as us being wrong the second half of the instruction was very narrow and it wasn't directed at a vice conduct at all it was directed at tio i seen this conduct as it related to using the o d m cs and all it said in a single sentence was that conduct was war for now when we have it over to the end i trust issues which was the source of your audience questions that's not the issue on me and i trust coins the issue in the end i trust cl i have pro competitive intent when it acted the way it did throughout this case we submit the answer to that is no but looking at the flood letter specifically which became the focus of this they got to make the argument without objection uninhibited that those flood letters were sent for pro competitive reasons that issue went to the jury and the jury rejected it properly be assessed by the jury after being told by the court don't look at the deal i see piece of this but that's that's maybe i'm being too simplistic but that's kind of what i understand our get up they'll tell me if i'm wrong but i get their argument that the there's two sides to this fight and if the judge says don't pay any attention to the punches being thrown over here just look there you don't have a fair assessment going on the jury room right  coming in assessment of the five letters so your honor again to refocus the inquiry first of all the instruction didn't go that far second of all it's pure speculation on their part that it would have overcome the rest of the proper instructions that the jury received in third in terms of pro competitive intent which was the crucial issue avaya was able to argue that without objection and not only that it  argument when i made a i made a poor choice what i meant was this instruction came up after via had been able to make its full argument on the two work claims concerning  conduct and why t l i ceased conduct in fact entitle that to a business justification defense under lee and i trust laws which included all of the conduct that we are accused of relative to the conduct that was engaged in it didn't relate to the access to the password specifically and of course they had more conduct it and the jury heard that but so that is as i hear you're saying  but they will be right a lot to characterize it as weekly actionable well they're not in the final argument but they certainly done it up to that point and the jury heard it as it related to the state law claims and had it in front of it as it related to the anti talking about prejudicial error here isolating those flood letters as a path a reversal of this verdict at the end of the day also pieced on this instruction that they're over reading and speculating about what would be an poison in a bucket of water it's unfair because so much of that water spirit if they are correct that it poisoned the water how is it any justice of the first order to say go back and do it again and this time make sure you don't poison  it i would put that slightly differently your honor in terms of the way the air should be looked at and the way i would say it is this you have to have in front of you a compelling record that demonstrates that by virtue giving of that instruction alone a different result would have been or the absence of that instruction or the presence of the state more claims a different result would have been reached and back to where i started here we have a fully supported set of ian i trust claims that exist independently with different defense is supported by the evidence in the notion that this one instruction or that the absence of the state law cl market so i would see two things first of all that argument isn't being advanced as a reason to reverse this verdict no but i mean certainly like i you know neuer stand out i just want to make sure that that's clear second  consistent with attempted monopolization which is what the jury found on in terms of the relevant presumptions that apply to this court's review you look at the evidence if it substantiates that prong of the jury's verdict then they knew you were firm you don't will look to me maybe it's one of the things i feel like we're responsible for is the not and you pick this up and some of the case wise is to not allow things to move forward on an economically rational basis that's why i'm asking this question ok if there is for there to be an effective ta in an after market does there have to matter of watch you help me with that i think you can as a matter of law and as far as the logic is concerned if the tie itself is viewed as an eon a competitive act in support of the attempted monopoly claim then i think you can have both and consistently really competitive back in an otherwise competitive market that's your point well it's an anti competitive act under kodak which sent both claims to the  jury and said that became a jury issue we have a jury verdict that can be read consistently with both claims and that's seemingly where we should end up because there's no argument being made here that some fundamental inconsistency in th verdict is a matter of practical logic or law compels a reversal so if this is in that sense the functional equivalent of kodak in kodak didn't start sorting between work claims the jury would alternately find on in we evaluate jury verdict by looking at whether the claims that they did find on are supported which these are not you mentioned inconsistency a moment ago isn't the district court s pennington ruling inconsistent with the pre judgment interest well are two things there first of all it could be he would that way but again in terms of value winning the verdict it need not be the legal standard speak tween the two are different and very different although the conduct which supports welch can be the same well if you look at the three factors on the the verdict or the decisions that the judge made is on whether the evidence supports the pre judgment interest statutory factors and as we've demonstrated in our brief of why is abusive litigation tactics on the one hand and the delay for purposes of cost on the other fit the purposes of the sherman accept ssion perfectly according to congressional intent as far as the sham exception was concerned the judge found an independent taking a via is more importantly meet minutes along with the patches is that meet minutes it ends up being the critical issue and notwithstanding that they might have been available for free the record zero seven i would point the court to the testimony from allen meehan j a six nine four five witness testimony at three one five six three two zero two two zero zero six three two six eight and customers who testified they were concerned about the policy at three one seven seven and seven two nine eight and finally if we want to know if customers moved as a result of the threats a pre teen will seven i would point the court to ga three two one zero three four zero three and ga three four one two now as to after chose a writer so that isn't actually what happened but they wanted to use t l i c and had selected t l i c and switched to of my of because of the coercion from the patches when they went to get the maintenance upgrade after two thousand and eight so it's a perfect illustration of it in addition there were two other customers in the record who also were opposed to zero seven and all of that evidence is sufficient under the fortner case to me that the ministry shoulda let me provide some record cites there too if i can your honor as to how this all unfolded a g a three one seven two to three one seven three three one seven four and finally as to the customers and the result of it and sun trust saying we didn't go because we are to merely settled on a via take a look at three one seven two to three one eight one three two five one and finally three one two one two three one two three and i think what you'll see there your honor is that there is full substantiation for tying claims in both those time periods now as to the desegregation claim that follows that which is their argument that's also waived they never asked for any kind of a jew three verdicts with this up and of course thank you i do want to i guess i'll address my friend's points in the reverse order talking first about the eighty competitive contest and then the affirmative claims and the harm to our any trust monopolization and the p d s tie that we were entitled to judgment as a matter of law because the there is no any competitive conduct that was properly demonstrated with respect to the p b x they have hung their hats on two of the two of the weakest theories of sherman act conduct that is unlawful refusal to deal and so called fraud letters and they have failed their evidence absolutely fails to establish the predicates of both that is with respect to unlawful refusal to deal they absolutely had to prove that we  a years long practice of dealing with rifles and where in fact we had never ever dealt with a rifle and second of all they had to prove that we sacrifice we did so sacrificing short term profits in order to get a wrong gain by eliminating rivals and they certainly didn't do that you're either judged heart of it asked about the twelve to eighteen million dollars of maintenance business the loss they say well they obviously sacrifice short term profits because we had sold five million dollars worth of a quiet quit but the fact that we would no longer have them as a business partner in no way suggests that that people who wanted to buy a at quitting it wouldn't have bought it from a viable one of the many other business partners and in any event the evidence showed that we reasonably believed that we would lose at least twelve million dollars per year of a very high margin maintenance profits and i apologise i'm forgetting with the words and hoping maybe you remember i i mean there were two i don't remember the instruction myself either a we don't have a claim of instructional error on under trade go and pacific bell versus link white it is absolutely clear that in order to establish the rear instead standard which refusal to deal with a rival violates the a trust laws you have to prove that there was and a voltage change in a year's normal practice of dealing with rivals that's the aspen skiing case if you have to prove that it was done so to sacrifice that doing if i'm remembering that right even if they didn't prove that you are acting against your short term interest but they prove that other thing after the war they should win right well no no the one of the instruction was back or not wh error in this appeal or not it is the last letter sherman act laws that it is doesn't violate the sherman act or refused to deal with a rifle and unless you've had a year's run practice of doing so were making the point about sort of economic common sense that the relevant question is whether or not competition in the primary market is disciplining pricing in the aftermarket and it is other common sense that if you have a highly competitive primary market and if customers in the primary market if you reasonably diligent customers in the primary market have no reason to believe that they can in fact you get a virus software with the use of an independent authorized independent service provider just as a matter of sherman act then economic small amount of what was really going on it wouldn't matter even if it were true but their damages as expert testified the percentage of the damage award that he calculated the damages that he calculated attributable to post two thousand eight hundred this was very very substantial and we give the relevant cite in our brief as to what customers understood after two thousand and eight first of all