the anti trust laws are intended to foster just that kind of behavior instead of offering competitive discounts cohen sought and received protection of the court so they did not have to discount the supreme court has held on multiple occasions that if the conduct is pricing behavior the plaintiff loses unless the price the defendants prices below cost it's the plaintiff's burden to prove that the accounts didn't meet that burden every time the lower courts upheld there an exception to the price cost rule the supreme court has held there is no exception following the supreme court decisions in nick saying this court said that the antitrust laws are not intended to protect the plaintiffs that could have protected itself by lowering its price applying the methodology in nixing and we showed that collins could have lowered its price profitably and retained say about seventy eight percent of its customers if both parties had been engaged in this county to understand why collins party can can't price below cost as long as the some of the competitors are able to still compete a below the defendant's cost is that what you're asking i may ask yes our our argument is that you should use both the defendant's costs and the plaintiff's cost in doing the analysis so your argument is that's not a first as far as below cost is concerned there is no evidence in this record understand but you're saying that's not the issue the issue is whether the whether whether collins can undercut whether  eleven if kodak's disk out had run the price down below the cost of producing the yes even if kodak had done that there would have been no violation here under nixon done that there was no evidence of that and i think that kodak prices below its cost it's not an a competitive if if kodak is in a position to subsidize or the market to get below its cost is a competitive satisfied the price cost nic sand i think is the key decision in this circuit in next thing and there is no discussion of whether the defendant has gone below cost what the what the court said was that nick sand could have discounted its own price and the and that there was no protection under the antitrust laws if nixon could have competed the courts have used two different standards the ortho standard which is the plaintiffs cost which was followed seem to be followed in the exam more courts have used the defendants the reason we think here that you should use both is because of the all rational customer test you know what the all rational customer test is asking is what irrational customers are going to do given the competitive situation that's likely to occur if if kodak was was lowering its price somehow and collins could lower its price as well and would rationally do so because it was profitable for collins to lower its price what we are saying is that seventy eight percent of the customers if both parties the discounted would not have switched and because collins would under normal competitive circumstances have done that then there can't be any violation of law so you're saying that most courts of looked at what in this case would be codex price cost rather than rather than collins yeah you assume that that's that we agree with that even though you disagree with that then how do you win because there is no evidence in the record that kodak was pricing below its cost and it is and i it is the burden of proof of plaintiff to show that kodak with pricing below call the other reasons we use the standard we use is because that was what the complaint said the complaint said that collins couldn't match these prices and it could so that's number one the all rational customer test is number two i should we take the the differential between the monopoly rents but presumably you can charge more because there are some they're the only ones who are selling the stuff right that the for furbish money well i won't say right to that because that's one of our arguments on me have something called monopolize the market ok it's not a pure monopoly because you know if you charge a million dollars i guess they would go and get a different printer or something like that right ok but to the extent that it has some monopoly money in there all right takes this money and uses it to  for a much lower price that's in effect what you're doing here and that would be ok is that right as long as we accept these assumptions about monopoly power is right as long as long as it is long as it passes the price cost has to pass the price are stated differently how is this injunction really causing you any harm if you can instead figure out and i've got accountants who can do this much more brilliantly than i can even state it but but it would be something along the lines of let's figure out the economic effect of these different things the the district court is telling us to do one way rather than the other way we argue that it's economically the same because it is the district court doesn't see that so why don't we just price it according to the way that the district court says we injunction does is and the court said so is it harms kodak's reputation that's number one and it means that the court in collins is running their reputation well the it's hurt because to say we disagree with  a in order to comply we're just we're going to charge the same thing the horn ink regardless of i mean we're going to charge the same thing for a furbish ing regardless of who's in but will lower the price of i believe the court didn't explain the harm to reputation but i believe what the court made was that kodak was concerned that it had if it had no control whatsoever over the ink going into its into its print heads that there could be damage that could be blamed on kodak so kodak was trying to at the basis that thing on the basis for the for overdue for saying that you're harmed by this injunction now the sole give you and let me give you an example of another home so if someone came  injunction can't let them switch printers switched to switch to a competitor kodak is wants to prevent them from switching to a competitor the the the customer goes to kodak and says lower your price of refurbishment to me or you're just you're just fighting the hypothetical that i'm hypothesizing that there's something like a monopoly power over this that there's that there's cost restrictions on that sure if used if you charge a million dollars they're going to get a different printer going to get i have they can buy a different printer firmin a million dollars i'm saying within a range i'm hypothesizing within a range they're stuck with these but what i'm saying is under the injunction at present prices assuming they're competitive prices kodak cannot lower its price for bushman to an individual customer who is threatening to go to the competition that's what the problem is with this injunction well but the injunction i thought the injunction said you had just charge the same price to to to people regardless of what ink they're using not regardless of something else i don't think i am concerned that what if we say that well if they are all happy well but if it's but if it's if it's code x it but if it's a in we can just say in the opinion if it's a good understand that this means if it's a what it seems the name sorry your honor i didn't mean to drop it on if it's a customer that using kodak seek and it lowers the price to be cost the customer went to it and say lower your price of ink or else i think it's a prime  facial problem because it's not allowed to lower its price to someone who is using kodak ink so i i don't think i would recommend to kodak that they do something like that under those circumstances  want to get to a nother point your time's expired oh i'm sorry i've been i've been immersed in this economics law of the economist may not trusting him but the law draws a major distinction between the exploitation of monopoly power in one market is raising the price on refurbishment or using that market power in another market in this case in jefferson parish the supreme court that's a huge distinction and that's a distinction that's an issue here they can raise their prices on refurbishment they can raise the price on refer bushman and use that money to lower ink prices across the board exactly they can compete nick they can compete on the merits in the ink market that's the competition that this this injunction allows there's nothing preventing they do economically the same thing what would be the sense of if it's economically the same thing to have differential prices for refer based on w you use and the council could get it out and figure out that it's economically the same thing what sense does it make for us to interpret the and i trust laws to say you can do it one way and you can't do it the other way here's the difference around and this gets to the knicks an case if you're looking at a single product market the end i trust was generally say as long as you're pricing above cost go to a discount compete on the merits because the consumer benefits right that's not the case here so it depends on whether the price is above market them i mean is is below price is a bit below cost kodak can compete in the market as long as they're both cost it does depend if there is and they do it can they i should've qualified my pathetically by saying and they're doing it and they're meeting the a price attribution then why can't they do it if they can do economically the same thing by raising as you i think agreed by raising their refer bushman costs across the board and then using the money that they get from that raising to reduce the costs and thereby compete with collinson by the lower cost and if they can do that why why can't they why can't they price it exactly the same but do it by means of having differential prices for the refer bushman's there's actually a song is there meeting the as long as they're meeting the price attribution test and that's the huge difference  their pricing above cost but let's let you would agree that's ok then i would agree that they can raise their price uniformly in the refurbished market and exploit their monopoly the reason the case is generally allow that is because it will attract interest in whatever and in whatever but they year they can do that it can do the and then they can use that money to sell ink at one cent over cost yes and here's why they c the consumer benefits and that's the my question is what if there is an economically indistinguishable way of doing it which is too much which is to do what you accuse them of doing in this case which is to is to let me think now have a differential price for refer bushman based on what ink you use all right let me explain the difference and  perhaps i can provide a concrete example let me provide an example from one of the defense experts charts we don't agree with his analysis but i'll take his chart on seven fifty five in the appendix and i'll use a company  and kodak is it three hundred thirty thousand if we have competition on the merits collins is going to win because it's lower priced but because of the penalty of two hundred twenty thousand now that customer has to pay four hundred fifty thousand if they're going to use collins for three hundred thirty thousand if they're going to use kodak they're going to use code what's kodak response you should compete and i put competing quote there because it's not competition what they're saying is you should lower our human been done answer my question here's how i'm about to answer your question i hope which is the competition they're talking about is to that collins should lower its priced average variable cost of one hundred ten thousand and then if you take that hundred ten thousand and they add on the penalty of two hundred ten they're a  little lower they're at three twenty and kodak is at three thirty they can keep that customer that's not competition on the merits that's the exploitation of market power that timing is allowed to exploit market no they're not no they're whale and they're exploiting market power every time they raise the price of a product that they have monopoly power over it but there's a difference between exploiting market power in the refurbished market refurbishment or taking that but they can using that paper and do that by exploiting the power in the refer bushing market and taking that money and using it to subsidize there as long as they don't go out of the cost subsidizing their script there's all there is that true or not that is true they can say that's exploiting their market power so it's using the revenues from them are right if a well i'm going to use every time i say exploit i mean using the revenues there's a distinct difference your honor because in the evil  principle evil of time that set out in the case is that you're using market power in one market to exploit another market or as some of the cases stay to shelter an inferior or overpriced product that's what you're doing when you're taking money that you have available to you from this in my have to third a call from this quasi i'm a novelty over refer bushman and using it to subsidize hearing productions that case in every situation where the where the kodak drops its price to rate above cost who benefits the consumer and that's why it's allow i shouldn't be allowed because in in this case who benefits kodak when carnes is forced to drop its price to keep customers because of this penalty the only i'm talking about the price that kodak offers i just want to ask a question you can still answer that but but looking at codex pricing policy isn't it really a bundle discount rather than the not explicit tie that your honor no we it could be both it could be viewed as a bundle discount and there are a number of cases you may have seen in the brief all based on the same set of facts and what the case law says and what the commentators say is you analyze them under different structural requirements right you have the same set of facts discount thing and a policy rather and how does that affect columns if it were analyzed under bundling should still the preliminary injunction would still be of should still be affirm and explain why the council has said there's no evidence in the record that kodak is pricing the low cost and that's what they said in their reply would no citation kodak is price and above cost they are not by their admission let me explain why a number of times in their appellate briefs and in the court below they they make the argument kodak is financially better off kodak is financially better off if the customer stay with collins under the policy and don't switch the only way that's possible is if their pricing below cost under the attribution test that may not be intuitively obvious let me explain with a little more detail the attribution says test says you take the penalty for the differential and you apply to the competitive good ink plant meaning subtracting and see if they're pricing below cost the only way codex argument is correct that they're financially better off if the customer stays with collins is if they fail their attribution test under bundling analysis this isn't a bundling case they're saying that analysis should apply but even if you were to apply that analysis the judgment of the district court should be affirmed on that basis i'll provide an example if kodak is pricing it ten and they have profit of three that means their costs are separate the only way they're better off if the customer stays with koans is if they can get more than their profit of three so let's assume it's for from the refurbishment printing if they can get four from the refurbishment penalty fine the customer say's with collins kodak is better off but if you apply the  attribution test and take that for penalty subtracted from the price of ten then they're at six they're below cost works no matter what numbers you use as a matter of math as a matter of economics as a matter of la logic that's another basis for after months here which is that by their own admission they are pricing below cost if you believe cost if you include the differential that it's that's attributable to that purchaser if you if you if the policies in effect and you know legally the question of whether the court below apply the proper law with regard to applying  pricing there's no support if the prop if if we went through that formula you just stated and it turned out that they were slightly above cost they were seven dollars and one having trouble seeing how you have a claim at that's if it's above cost because seems like it's inconsistent with an interest doc basically no it's not your honor problem having i see the problem you're having but let me see if i can see if it all depends on whether you're pricing above cost or not and we can argue about whether this record adequately shows that for a preliminary injunction etc but it but you seem to be making a stronger argument that it doesn't matter as long as as long as collinses wealthy enough to to deal with the argument i'm making is that under the law as it exists today that bundling is analyzed one way and timing is analyzed a different way and there's the recommendation the antitrust modernization committee came out with a recommendation which was the basis for the cascade price cost test they came in they recommended that it be applied in a bundling context and not in a time context and that's what the cascade court did they applied it a price cost test to bundling and not time the last this case i want to address that because there's a  is correct but that's not what he did what he did was he adopted a recommendation from a special and i trust panel that recommended that yes in bundling let's use a cascade price cost attribution test but for timing will use a standard tying analysis of whether there's market power and whether there is some coercion and that recommendation was adopted and the order that issued drew that distinction i don't know if this will help but let me quote kodak cites a lot to read in paragraph seven hundred fifty eight and maybe this will get at the issue that you're raising where professor reid has said it might seem anomalous to conclude the conduct could be counted as exclusionary under a time test under section one of the sermon act but not under a pricing test under section two of course the structural requirements are different that's the case here the courts thus far and there's even a split in the circuit and on this point on whether you need to apply a price cost test to a bundling or whether above cost activities can still be unlawful in bundling context third circuit endorses that few second and ninth apply the price cost test but there's no split in the circuit with regard to tie every court that has considered the issue says we of evidence that was contemporaneous that was candid evidence there was internal evidence from kodak's own analyses and e mails and the contrary evidence was primarily from pricing no excuse me your standard time case where there's a contract saying you have to buy it from somebody this is coercion that comes from a differential in the price and the pricing of them for bush that's correct but even the cascadia make it more like it makes it's not exactly like bundling but it makes it a lot more like bottling the it makes it more like bundling but again any court that has considered it has rejected a price cost test applied to not even applied to non explicit time the cascade court applied price cost test bundling but for the tying claim reversing summary judgment they applied it they said look there's a fair inference that a rational customer wouldn't be buying peace hells over priced product absent the tie so they applied a standard timing approach to the tying claim in that case again based on the same set of facts let me start with cascade that's not what cascade did kaskade said in a footnote that it thought that timing should be tested under the price cost has but since it had not been argued as to that point it sent it back to the district court for further determination but they were very explicit about that there is no court of appeals time in case i know of that turns around and says and nine explicit tying the price cost test is not relevant the argument that it's different if it's two products is is incorrect under a link line the supreme court decision in link line which was a two product case there is just every time a court of appeals has said this is different the supreme court has said it is not a court of appeals a set of what is different the supreme court well so for example in link lines me to identify my pronoun yes so so for example in lincoln line the court of appeals said this is different because it's a price squeeze and prices are going up in one market and the and the supreme court said no it doesn't matter that it's there's two markets involved it doesn't matter that prices are going up in one of the markets no matter what the conduct is the price cost test as always been applied by the supreme court i wanted to give a and the problem below was that the district court just didn't use the test at all he just he you know we kept arguing for the test and the court just rejected it and didn't use it at all in any of this and they did not meet their burden of proof the argument you heard today as to why we are prices below cost kotak prices below cost is not an argument that was made below is not even an argument made in the in the briefs here and i didn't follow it at all so i there can't be irreparable harm if if if if collins could avoid that harm entirely by lowering its price which it could have done and it would have and would have in seventy eight percent of the cases that would have really been able to retain its customers if it did that so there is no irreparable harm at all here and that's another reason to use the plaintiffs cause as well the and so and so that another point is as you said your honor whichever way you do it it's economically the same in fact that was the testimony below that there is no difference and that's because this is not explicit and not explicit timing there is a tremendous difference between those two things and in not explicit timing you have to turn around and if you say that what's clearly legal is indistinguishable from what's being challenged here that benefits you because it suggests that there's no basis for the claim that it also cuts against you because it shows you could do you not hurt all you have to do the structure your pricing that way while while this case gets litigated well except that show you examples where kodak is bound in when it wants and there is that there's no split on on on using not these costs as well and one more point i want to make in my last thirteen seconds is if no one was discounting further then we already saw in the record eighty percent of the time eighty percent of the time collins prices were such so that the bundle in terms of purchasing kodak sync excuse me codecs referred me to collins inc collins would win that eighty percent of the time without for without and you don't even need they are for to go to this point thank you your honor that was interesting case of the submitted the other cases are on the brief so you