PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCIT

_____________

Nos. 14-4174 & 14-4277

_____________

AVAYA INC., RP

 Appellant in 14-4174

v.

TELECOM LABS, INC.; TEAMTLI.COM CORP.,

CONTINUANT, INC., SCOTT GRAHAM;

DOUGLAS GRAHAM; BRUCE SHELBY

 Telecom Labs Inc., Continuant Inc.,

 Appellants in 14-4277

_______________

On Appeal from the United States District Court

for the District of New Jersey

(D.C. Civ. Action No. 1:06-cv-02490)

District Judge: Hon. Joseph E. Irenas

_______________

Argued

January 19, 2016

Before: JORDAN, HARDIMAN, and GREENAWAY, JR.,

Circuit Judges.
2

(Filed: September 30, 2016)

_______________

Seth P. Waxman [ARGUED]

Leon B. Greenfield

Danielle M. Spinelli

Catherine M.A. Carroll

David L. Sluis

Jonathan A. Bressler

Thomas G. Sprankling

Wilmer Cutler Pickering Hale and Dorr LLP

1875 Pennsylvania Avenue, NW

Washington, DC 20006

Robert T. Egan

Mark J. Oberstaedt

Archer & Greiner P.C.

One Centennial Square

33 E. Euclid Avenue

Haddonfield, NJ 08033

Jacob A. Kramer

Bryan Cave LLP

1155 F Street, NW

Washington, DC 20004

Lawrence G. Scarborough

Bryan Cave LLP

Two North Central Avenue – Ste. 2200

Phoenix, AZ 85004

 Counsel for Appellant/Cross-Appellee
3

Douglas F. Broder

K&L Gates LLP

599 Lexington Avenue

New York, NY 10022

Raymond A. Cardozo

Paul D. Fogel

Reed Smith LLP

101 Second Street – Ste. 1800

San Francisco, CA 94105

Kathy D. Helmer

Scott G. Kobil

Anthony P. LaRocco

John Marmora

Charles F. Rysavy

K&L Gates LLP

One Newark Center – 10th Fl.

Newark, NJ 07102

Richard L. Heppner, Jr.

James C. Martin [ARGUED]

Colin E. Wrabley

Reed Smith LLP

225 Fifth Avenue – Ste. 1200

Pittsburgh, PA 15222

 Counsel for Appellees/Cross-Appellants

_______________

OPINION OF THE COURT

_______________
4

Table of Contents

I. Introduction .....................................................................6

II. Background .....................................................................8

A. Factual Background ...................................................8

1. PBX Systems and Maintenance .............................9

2. PDS Systems and Maintenance............................14

3. The Dispute between Avaya and TLI ..................15

B. Procedural Background ...........................................19

III. Avaya’s Appeals............................................................24

A. Judgment as a Matter of Law on Avaya’s

Common Law Claims..............................................24

1. Evidence Supporting Avaya’s Common

Law Claims...........................................................26

2. Customer Contract Interpretation.........................36

3. Tortious Interference with Prospective

Business Advantage .............................................44

4. Unfair Competition...............................................54

5. Fraud.....................................................................57

6. Breach of Contract................................................61

7. Conclusion............................................................67

B. Prejudice on the Antitrust Verdict ...........................68

1. General Prejudice to Avaya’s Antitrust Defense .68

2. “Fear, Uncertainty, and Doubt” Letters ...............74

3. Interference with Defense and Cross-
5

Examination..........................................................76

4. Harmless Error Analysis ......................................78

C. Antitrust Issues ........................................................80

1. Tying in Antitrust Law.........................................80

2. PBX Attempted Monopolization Claim...............96

3. PDS Tying Claim ...............................................102

IV. TLI’s Cross-Appeals ...................................................109

A. Summary Judgment on TLI’s Common Law

Claims....................................................................109

B. Summary Judgment on PBX Upgrade Tying

Claim......................................................................113

C. Noerr-Pennington Ruling ......................................115

V. Conclusion...................................................................118
6

JORDAN, Circuit Judge.

I. Introduction

When asked why he was so intent on scaling Mount 

Everest, the ill-fated mountaineer George Mallory famously 

replied: “because it’s there.”1 The parties before us have put 

a twist on that philosophy: they have created their own

mountain of issues and have argued, appealed, and crossappealed nearly all of them.

2

 Unfortunately, if there had been 

a hope of bringing this matter to conclusion any time soon, 

that was dashed when, in the middle of trial, the District 

Court erroneously granted judgment as a matter of law 

against one side, tainting the entire trial and the ultimate 

verdict. We will therefore vacate the judgment of the District 

Court and remand with instructions for further proceedings. 

We do not take this step lightly, but the error of the District 

Court here was of such magnitude that we seriously doubt the

correctness of the ultimate verdict.

This case arises from the fractured relationship 

between a large communications equipment manufacturer, 

 

1 Climbing Mount Everest Is Work for Supermen, N.Y. 

Times, Mar. 18, 1923, at 11.

2 The District Court recognized the battle-every-issue 

character of the litigation. To one request from counsel to 

“make a record” of his objection, the Court responded: “Make 

a record, go ahead. The circuit will love it. It will be the 

5,927th error you have pointed out to them.” (J.A. 2397.)
7

Avaya Inc. (“Avaya”), and one of its dealers and service

providers, TLI.

3

 After they fell out, Avaya aggressively acted 

to block TLI from providing independent maintenance 

services for Avaya equipment. Meanwhile, the nowindependent TLI took a series of legally dubious actions to 

gain access to Avaya communications systems used by clients 

the parties once shared. Avaya filed suit, alleging several 

business torts and breach of contract; TLI counter-sued for 

antitrust violations. After years of pre-trial litigation, and in 

the midst of a months-long trial, the District Court granted

TLI’s motion under Federal Rule of Civil Procedure 50 for

judgment as a matter of law against Avaya on all of Avaya’s

affirmative claims. The Court later instructed the jury that 

none of TLI’s actions could be considered unlawful. With 

that instruction guiding it, the jury found Avaya liable for two 

antitrust violations and awarded substantial damages.

We conclude that the entry of judgment as a matter of 

law was erroneous. Given how intertwined the two sides’

claims are – and given that Avaya’s antitrust defense relied in 

large part on justifying Avaya’s conduct as a response to 

TLI’s conduct – we also conclude that the erroneous Rule 50 

 

3 We use “TLI” as shorthand for a group of small 

service providers that are under common ownership and 

control and are collectively the appellees/cross-appellants. 

They include Telecom Labs, Inc. (“TLI”), TeamTLI.com 

Corp., and Continuant, Inc., along with their common owners 

and managers Douglas Graham, Scott Graham, and Bruce 

Shelby. Although Continuant seemingly took over the 

businesses’ continuing interests beginning in 2005, TLI was 

the firm most involved in this dispute from the beginning, so 

we use that name for simplicity.
8

judgment infected the jury’s verdict. We must therefore 

vacate the judgment of the District Court. A tour of the 

mountain follows.

II. Background

A. Factual Background

Avaya, the appellant and cross-appellee, “designs, 

manufactures, sells, and maintains telecommunications 

equipment.” (Opening Br. at 7.) Two of its products in 

particular are the subject of this suit. The first is its private 

branch exchange (“PBX”), which “is essentially a specialpurpose computer ... that functions as a telephone 

switchboard” and is used by “[l]arge organizations needing an 

internal telephone network.” (Id.) The second product is its

predictive dialing system (“PDS”), which is an “automated 

telephone dialing system that uses a predictive algorithm to 

anticipate when the user ... will be able to reach someone, 

improving the chances a call will be answered.” (Id. at 7-8.) 

The PBX technology was invented in the 1980s by AT&T

Co., which in 1996 spun its PBX business off to Lucent 

Technologies, Inc., which in turn spun off Avaya in 2000. 

TLI and three individuals who operated it are the

appellees and cross-appellants. TLI sold post-warranty 

maintenance for Avaya PBXs and PDSs. At one point, TLI

was also part of Avaya’s Business Partner program, selling 

communications systems on Avaya’s behalf. When Avaya 

began downsizing from 1999 to 2001, it encouraged its 

Business Partners to hire laid-off Avaya maintenance 

technicians, even subsidizing that process. TLI made several 

such hires and began to offer maintenance services in 2001. 
9

Not long after, in 2003, TLI and Avaya acrimoniously 

severed their relationship,4 but TLI continued to provide 

maintenance services on Avaya products as an independent 

service provider. 

1. PBX Systems and Maintenance

Of the two types of systems at issue in this litigation, 

the PBX has a substantially larger market. Avaya 

characterizes PBX systems as durable goods with extended

longevity and high fixed costs. During much of the time 

relevant to this suit, PBX systems had a useful lifespan of

about eight years, though some could remain in use for

decades.5 They have many capabilities but were sold in a 

 

4 The reasons for the divorce are, of course, like 

everything else in this case, hotly contested, and they are 

elaborated in more detail below. Here is a thumbnail sketch: 

Avaya contends that TLI violated its obligations as an Avaya 

agent, whereas TLI alleges that Avaya imposed onerous 

surprise conditions to prevent a partner firm like TLI from 

recouping the investments it had made at Avaya’s request.

5 Those statistics are based on PBXs sold before 2000. 

In the 2000s, traditional PBXs were replaced with systems 

that use internet protocol telephony. Whereas with older 

“refrigerator-box-type PBXs, it was ... easy to identify and 

define what a ... life of a system was,” with the “IP PBXs ... 

any one server might come out of service, perhaps as quickly 

as after just a couple ... years.” (J.A. 4382.) Given the 

constant replacement of equipment on those modern PBXs, it 

is “very difficult to measure” what the lifetime of a system is. 

(Id.)
10

default mode without most of them activated. Customers 

could then license individual capabilities, depending on their 

needs. As one Avaya systems engineer explained it at trial, 

Avaya “provide[s] software to our customers that’s able to do 

a vast number of things, but customers don’t want to pay for 

all the things the software can do. ... They may not need all 

the capabilities ... . So we allow customers to purchase the 

right to use aspects of the software ... .” (J.A. 1886.)

One of those “aspects” is a set of maintenance 

features6that was and is licensed separately from the PBX 

system itself. Those features are accessed via on-demand 

maintenance commands (“ODMCs”). Users of the 

maintenance features – whether Avaya technicians, nonAvaya technicians, or customers themselves – access the 

pertinent software using login credentials. Each login is 

matched to the ODMCs that that specific user is authorized to 

use. In addition to controlling those logins, Avaya has a 

second way to regulate access to the ODMCs. The ODMCs 

are only useable on a given PBX system if Avaya has 

activated the corresponding maintenance software 

permissions (“MSPs”). Avaya’s PBX systems come with the 

MSPs disabled, but customers who execute a specific license 

agreement can have the MSPs, and hence the ODMCs,

 

6 The use of the word “feature” to describe elements of 

the software that enabled remote maintenance is legally 

relevant to questions of contract interpretation in this case. 

See infra Part II.A.2. We use the word here as a generic term, 

without implying anything about how it should be read in the 

specific context of Avaya’s contracts with its customers.
11

enabled. Later, when that license terminates, Avaya disables 

the MSPs. 

Avaya and its authorized Business Partners offer 

maintenance service, which is a profitable line of business. 

Avaya contends that the “margin on the initial sale of a PBX 

is ‘thin,’” whereas the rate of profit on maintenance work is 

much higher. (Opening Br. at 8.) It says that the profit the 

company earns from maintenance is an important source of 

funds for the improvement of PBX systems and the 

development of new models, which are released roughly 

every two years. According to Avaya, its major competitors 

in this market – Cisco, Siemens, and Microsoft – follow a 

similar business model of low-margin equipment and highmargin maintenance, and those firms compete with each other

and with Avaya over the “total cost of ownership” of both 

equipment and maintenance. (Opening Br. at 9.) 

During the time period covered by this litigation, 

Avaya offered three tiers of maintenance options for PBX 

customers. The highest-end, most expensive option was to 

buy maintenance from Avaya itself, whose technicians had 

full access to ODMCs and certain other Avaya software 

capabilities. 

The second, intermediate, option was to purchase 

maintenance from an authorized Avaya Business Partner. 

Business Partners could access a customer’s maintenance 

software through a login called “DADMIN,” once Avaya 

activated it on a customer’s PBX. As participants in Avaya’s 

maintenance program, Business Partners had to complete 

special training and were given access to engineering support. 

They also had to agree not to solicit maintenance contracts 
12

from existing Avaya maintenance customers. Avaya 

forthrightly admits that it thus imposed vertical restraints on 

maintenance through the Business Partner program to 

encourage the Business Partners to “expand sales of Avaya 

PBXs in the competitive primary market, rather than simply 

to cannibalize existing maintenance business.” (Opening Br.

at 13.)

Finally, Avaya offered a self-maintenance option to its 

customers. Prior to 2008, customers who undertook to 

maintain their own PBX systems would have to purchase a 

license to gain access to the necessary MSPs. In 2005, out of 

tens of thousands of Avaya PBX customers, about 270 of 

Avaya’s largest customers used the self-maintenance option, 

which allowed their in-house technology departments to 

perform maintenance on their PBX systems. With its 2008 

hardware release, Avaya began making MSPs part of the base 

package for all PBX purchasers, so that they no longer had to 

pay additional money for access to those maintenance 

features. They were, however, then subject to heightened

contractual restrictions against using independent service 

providers (“ISPs”).

7

 

ISPs in fact became a fourth source of maintenance for 

Avaya PBX systems, and – from Avaya’s perspective at least 

– a very unwelcome one. Avaya has made no secret of its

 

7 The Avaya expert who testified about the change in 

policy suggested that the reason for the change was that the 

features available for purchase on the PBXs had become so 

numerous that Avaya began including many of them by 

default. 
13

hostility to ISPs, and it acknowledges that it “has never given 

third parties the logins necessary to access the ODMCs 

needed to maintain PBXs.” (Opening Br. at 15.) As Avaya 

characterizes it, prior to 2003, there were no significant ISPs 

on the market, and they did not become noticeable market 

players until 2005. At that point, Avaya released an internal 

July 2005 bulletin affirming that “Avaya ... does not provide 

maintenance support for clients of or directly to unauthorized 

service providers” (J.A. 7043), and it recapitulated its policy 

that MSPs and self-maintenance licensing would not be 

available to customers who used ISPs. A 2006 federal court 

opinion rejected an antitrust suit challenging Avaya’s policy 

against giving ISPs maintenance software access.8 

In its campaign against ISPs, Avaya updated its 

customer agreements in 2008 to make explicit that PBX 

purchasers agreed not to use unauthorized third parties for 

 

8 See United Asset Coverage, Inc. v. Avaya Inc., 409 F. 

Supp. 2d 1008, 1046 (N.D. Ill. 2006). That court’s analysis 

was critical of the kind of monopolization and tying claims 

now brought by TLI. Because “the software built into 

Avaya’s PBXs to facilitate their maintenance and repair is 

proprietary,” the court rejected the argument that maintenance 

and hardware were separate antitrust markets. Id. at 1045-46. 

It also rejected the claim that Avaya had surprised its 

customers with a post-sale policy change, characterizing that 

monopolization claim as “border[ing] on the absurd” because 

“[n]o one has an unclouded crystal ball as to future events, 

nor does anyone have a vested right in the expectation that the 

future will remain the same as the present.” Id. at 1046.
14

any service that required MSPs. Specifically, one license 

restriction stated that the

Customer agrees not to ... allow any service 

provider or other third party, with the exception 

of Avaya’s ... resellers and their designated 

employees ... to use or execute any software 

commands that cause the software to perform 

functions that facilitate the maintenance or 

repair of any Product except ... those software 

commands that ... would operate if ... [MSPs] 

were not enabled or activated.

(J.A. 7283.)

2. PDS Systems and Maintenance9

The other Avaya equipment at issue in this case is the 

PDS system, the market for which is substantially smaller 

than the PBX market. Avaya presented evidence at trial that 

no more than 840 Avaya PDS systems were installed 

nationwide (about 20% of the total PDS market), with Avaya 

providing maintenance service to about 200 of those 

customers.10 PDS systems tend to induce less long-term

 

9 The phrase “PDS system” is redundant (because the 

“S” in PDS is “system”), but we use it for its colloquial ease, 

as the District Court did.

10 Because of the relatively small size of the PDS 

maintenance market, none of Avaya’s Business Partners has 

become a PDS maintenance provider. 
15

intra-brand reliance than PBXs because the cost of an entirely 

new PDS is similar to the cost of upgrading an existing 

system. 

The PDS market is similar to the PBX market in at 

least one important respect. In both, Avaya says, the profits

from maintenance contracts help fund the development of 

new systems and the upgrades of existing systems. Avaya 

regularly updates its PDS software with patches to “fix bugs 

or adapt the product to changing circumstances.” (Opening 

Br. at 14.) Prior to 2007, patches were available for free to 

PDS customers on Avaya’s website; after 2007, customers 

who purchased new PDS systems could only receive patches 

if they purchased a minimum of one year of software support 

from Avaya. 

3. The Dispute between Avaya and TLI

The two sides in this case present dramatically

different stories of their dispute, which began in 2003.11 

Avaya’s story is that it simply enforced long-standing policies

against a disloyal former contractor that was breaching

contractual duties and dishonestly undermining Avaya’s 

relationships with its customers. TLI’s version is that Avaya 

retroactively sprung an anticompetitive policy on its 

customers that prevented them from using ISPs, in order to 

 

11 Most issues before us are raised by Avaya, against 

whom the District Court entered judgment as a matter of law 

and against which a verdict was rendered. Nonetheless, both 

sides have appealed a variety of issues, and we endeavor to 

recount the facts neutrally.
16

vindictively force out of business a competitor who could 

provide better maintenance service at a lower cost.

From 1996 to 2003, TLI was an Avaya Business 

Partner and sold Avaya systems. Around 2000, Avaya 

launched a program to encourage Business Partners to offer 

maintenance services. TLI took the opportunity.

12

 It claims 

it “invested millions in building its maintenance capabilities,”

while continuing to loyally sell Avaya PBX systems –

reaching roughly five million dollars in sales in 2002. 

(Answering Br. at 5.)

The relationship between Avaya and TLI soured that 

same year, over TLI’s efforts to compete for maintenance 

contracts with other Business Partners and with Avaya

directly. Avaya had introduced a revised set of obligations

for its Business Partners, the new program being set forth in

what Avaya called the “Avaya One” agreement. The intent 

was to limit intra-brand competition and instead promote 

inter-brand competition by encouraging Business Partners to 

expand the total Avaya market rather than compete with each 

other. As TLI characterizes it, the Avaya One agreement was 

a malicious surprise sprung on the Business Partners who had 

invested in their maintenance business at Avaya’s 

encouragement and were now restricted in their ability to 

compete for customers to get a return on that investment. 

 

12 Avaya had laid off many of its service technicians 

and engineers, and it offered to subsidize their salaries if 

Business Partners would employ them and begin to offer 

maintenance services. 
17

The formal relationship between Avaya and TLI ended 

in 2003. TLI had refused to sign on to any agreement that 

would limit its ability to compete for maintenance clients. 

Instead, it negotiated a separate agreement with an Avaya 

agent, under which TLI was exempted from most of the rules 

against competing for existing maintenance business. When 

higher-ups at Avaya learned of this non-conforming deal, 

they invoked a termination provision of the contract in July 

2003 that allowed them to end the deal on 60-days’ notice.13 

The two sides’ accounts again diverge as to what happened 

next.

According to TLI, Avaya jumped the gun on the 60-

day notice period and began prematurely terminating TLI’s 

access to its clients’ systems, while notifying remaining 

Business Partners that they should poach TLI’s clients. TLI

says that Avaya then went on the warpath to sweep away 

ISPs, and that ODMC and MSP access restrictions were 

created to prevent ISPs from competing in the maintenance 

 

13 Formally, there were two Avaya One agreements in 

place, one between Avaya and TLI and one between Avaya 

and TeamTLI.com. For the TLI agreement, Avaya invoked 

the termination clause on July 31, 2003, so that it terminated 

on September 30. The TeamTLI.com agreement was 

finalized on July 24, Avaya served notice it was cancelling on 

September 24, and the termination was effective 

November 24. Because the agreement with TLI was the 

principal subject of Avaya’s breach of contract claims, and 

because the District Court analyzed the two contracts in 

tandem, for simplicity we do not address them separately 

because there is no substantive difference that we are aware 

of, and the difference in termination dates is irrelevant. 
18

market. It claims that Avaya would keep customers in the 

dark about restrictions on ISP service until after the customers 

had already purchased an expensive system and were “locked 

in,” at which point Avaya would deliberately misconstrue the

license contracts to assert that ISP maintenance was 

prohibited. TLI also accuses Avaya of other supposedly 

anticompetitive conduct, including shortening the PBX 

warranty period in an attempt to force customers to sign up 

for Avaya maintenance contracts and ending a program that 

allowed customers to gain MSP access without using an 

Avaya-authorized provider. TLI argues that it was the target 

of particularly hostile action by Avaya. First and foremost, 

TLI alleges that Avaya “sent threatening and misleading 

letters” to TLI’s “current and potential customers, 

discouraging them from doing business” with TLI based on a 

claim that “unauthorized access to the PDS/PBX system 

[was] a violation of federal and state laws,” a claim that TLI

considers to be “without legal basis.” (Answering Br. at 9-10 

(internal quotation and editorial marks omitted).) Throughout 

this litigation, TLI has styled those letters as sowing “fear, 

uncertainty, and doubt” among its customers, and it has 

dubbed that correspondence the “FUD letters” for short. 

Additionally, TLI accuses Avaya of “trespassing on [TLI’s]

customers’ systems and disabling their access to critical 

maintenance software” (Answering Br. at 10), as well as

punitively instituting this lawsuit against TLI.

In Avaya’s much different narrative, TLI engaged in 

underhanded tactics to peel off Avaya customers in ways that 

violated both tort law and the contractual obligations of TLI

and its customers. According to Avaya, that unlawful

conduct began when TLI, then still a Business Partner, 

improperly developed a disloyal commercial strategy based 
19

on poaching Avaya customers. After TLI was terminated as a 

Business Partner, it continued to provide maintenance by 

using improperly acquired login credentials – either 

DADMIN logins gleaned from co-opted Business Partners or 

logins from customers who had MSP license agreements. To 

gain those logins, TLI convinced complicit Avaya Business 

Partners deceptively to submit login credential requests for 

certain TLI customers. TLI would then disconnect PBX 

systems from phone lines to prevent Avaya from changing the 

login passwords or from deactivating MSPs. Avaya also 

argues that TLI hired two former Avaya technicians to assist 

in tortious activity, one to “crack” Avaya login passwords and 

one to circumvent security systems in the software. All told, 

Avaya suggests that TLI made $20-34 million in profit from 

PBX maintenance using unlawfully-acquired access. This 

lawsuit was initiated as part of Avaya’s efforts to halt TLI’s 

allegedly illicit conduct. 

B. Procedural Background

Avaya filed suit on June 2, 2006, alleging a host of 

common law business torts, breach of contract, and violations 

of federal statutes, specifically the Digital Millennium 

Copyright Act and the Lanham Act. It sought both money

damages and injunctive relief to halt TLI’s practices. Those 

claims were refined over the following four years, eventually 

resulting in the Fourth Amended Complaint (the 

“Complaint”), filed in February 2010, which presented the 

claims as they went to trial.14 TLI filed counterclaims, 

 

14 By the time of that Complaint, Avaya’s claims 

against TLI were, in full, the following: misappropriation of 

trade secrets, tortious interference with contractual relations, 
20

alleging numerous common law and federal antitrust 

violations and seeking both money damages and injunctive 

relief against what it considered Avaya’s anticompetitive 

conduct.15 

 

tortious interference with prospective economic advantage, 

fraud/ misrepresentation, violations of the Digital Millennium 

Copyright Act, false advertising and violations of the Lanham 

Act, trade libel and commercial disparagement, breach of 

contract, unfair competition, unjust enrichment, breach of the 

duty of loyalty, aiding and abetting former Avaya employees’ 

misuse of proprietary information, and conspiracy 

15 Specifically, TLI alleged the following antitrust 

violations: monopolization and attempted monopolization of 

the PBX maintenance market in violation of § 2 of the 

Sherman Act, tying PBX maintenance and software patches 

in violation of § 1 of the Sherman Act, tying PBX upgrades 

and maintenance in violation of § 1 of the Sherman Act, 

monopolization and attempted monopolization of the PDS 

maintenance market in violation of § 2 of the Sherman Act, 

tying PDS maintenance and software patches in violation of 

§ 1 of the Sherman Act, tying PDS maintenance and upgrades 

in violation of § 1 of the Sherman Act, and conspiracy in 

violation of § 1 of the Sherman Act. TLI also asserted 

common law counterclaims: tortious interference with 

business/contractual relations, tortious interference with 

prospective business or economic advantage, injurious 

falsehood and trade libel/slander, and breach of the implied 

covenant of good faith and fair dealing.
21

Pretrial proceedings lasted for seven years, comprising 

extensive discovery and motions practice, during which many 

of the claims were resolved. In 2012, TLI’s common law 

claims were all dismissed by summary judgment. The 

District Court also dismissed TLI’s antitrust claims that 

alleged illegal tying between PBX system upgrades and 

maintenance. In addition, Avaya voluntarily dismissed its 

federal statutory claims and several of its common law claims 

before trial.16 

Some of the issues on appeal concern litigation 

conduct. TLI accuses Avaya of malicious litigation behavior, 

which allegedly cost TLI “millions of dollars in excess 

litigation costs and delayed resolution of the case for several 

years.” (Answering Br. at 13.) Specifically, TLI accuses 

Avaya of abusing the discovery process by making copious 

and unnecessary requests for documents and admissions and 

delivering an excessive number of documents to TLI late in 

the proceedings. TLI suggests that Avaya knowingly pursued

meritless claims, namely those that it voluntarily dismissed on 

the eve of trial. And TLI further alleges that Avaya 

“routinely produced inadequately-prepared corporate 

designees for deposition” (id. at 15), served excessively long 

expert reports, and litigated complex Daubert motions to be 

able to present experts, only to drop the experts and 

“substantial portions” of the expert reports at trial (id. 

(quoting J.A. 352)). Avaya denies any allegations of bad 

 

16 Those claims included misappropriation of trade 

secrets, tortious interference with contractual relations, 

violations of the Digital Millennium Copyright Act, 

violations of the Lanham Act, trade libel and commercial 

disparagement, and breach of the duty of loyalty. 
22

faith conduct and defends its actions as nothing more than

vigorous litigation in a complex case. 

The trial began on September 9, 2013, opening with 

Avaya’s remaining affirmative claims against TLI – for 

breach of contract, tortious interference with prospective 

economic gain, fraud, unfair competition, unjust enrichment, 

aiding and abetting former Avaya employees’ misuse of 

confidential information, and civil conspiracy. As the District 

Court described it, Avaya’s “jury presentation [] lasted two 

months, involved 35 witnesses, and spanned over 6,000 pages 

of transcript.” (J.A. 190.) 

TLI then moved for, and the District Court granted, 

judgment as a matter of law as to all of Avaya’s affirmative 

claims. The gist of the Court’s analysis was that TLI’s 

customers were authorized to use the maintenance commands 

and to give them to TLI, so that TLI could not have breached 

contractual or tort duties by gaining access to those 

commands. 

With Avaya’s affirmative case thrown out, TLI then 

proceeded to present its antitrust counterclaims to the jury, 

with that portion of the trial spanning nearly four months. 

When the presentation of evidence concluded, the Court held 

a fifteen-hour conference with the parties to reconcile their 

voluminous proposed jury instructions, eventually settling on 

a set of instructions that ran for 80 pages. Eight distinct

antitrust claims ultimately went to the jury. 

On March 27, 2014, the jury returned a verdict, finding 

Avaya liable on two of the eight claims: (1) attempted 

monopolization of the PBX maintenance market, in violation 
23

of § 2 of the Sherman Act, and (2) unlawfully tying PDS 

software patches to maintenance, in violation of § 1 of the 

Sherman Act. The jury awarded TLI $20 million in damages 

in a general verdict, which the Court trebled to $60 million in 

accordance with 15 U.S.C. § 15(a).

After trial, both sides filed post-trial motions, seeking

either judgment as a matter of law or a new trial on the claims 

now appealed to us, and the District Court denied those 

motions. TLI also requested an injunction ordering Avaya to 

allow its PBX customers to give ODMC access to ISPs. The 

Court granted that injunction, but it limited it to PBXs sold 

before May 2008 because Avaya had by then included in its 

sales contracts language to put customers on clear notice that 

they could not use ISPs for maintenance. Finally, the Court 

granted TLI’s motion for prejudgment interest under the 

Clayton Act, agreeing with TLI on several of its allegations 

that Avaya pursued non-meritorious claims in bad faith to 

prolong litigation. Ultimately, the District Court entered final 

judgment on September 16, 2014, awarding TLI

$62,613,052.10. Avaya timely appealed, and TLI

conditionally cross-appealed.

17

 

17 The District Court had jurisdiction under 28 U.S.C. 

§§ 1331, 1332, and 1367. We exercise jurisdiction pursuant 

to 28 U.S.C. § 1291.
24

III. Avaya’s Appeals

A. Judgment as a Matter of Law on Avaya’s 

Common Law Claims

We first take up Avaya’s appeal of the District Court’s 

grant of judgment as a matter of law on its common law 

claims against TLI for tortious interference with prospective 

business advantage, unfair competition, fraud, and breach of 

contract.18 Because all four claims are based on the same 

allegedly illicit conduct by TLI, we begin by providing a 

summary of the evidence of that conduct, as developed at 

trial. We then apply the state law relevant to each of the four

causes of action. For each claim, we conclude that judgment 

as a matter of law was inappropriate.

A motion for judgment as a matter of law under 

Federal Rule of Civil Procedure 50(a) “should be granted 

only if, viewing the evidence in the light most favorable to 

the nonmovant and giving it the advantage of every fair and 

reasonable inference, there is insufficient evidence from 

which a jury reasonably could find liability.” Lightning Lube, 

Inc. v. Witco Corp., 4 F.3d 1153, 1166 (3d Cir. 1993)

(citation omitted).

Credibility determinations, the weighing of the 

evidence, and the drawing of legitimate 

inferences from the facts are jury functions, not 

those of a judge. Thus, although the court 

 

18 Avaya does not appeal the grant of judgment as a 

matter of law against its claims for civil conspiracy, aiding 

and abetting a breach of loyalty, and unjust enrichment. 
25

should review the record as a whole, it must 

disregard all evidence favorable to the moving 

party that the jury is not required to believe.

Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 

150-51 (2000) (internal quotation marks and citations 

omitted). Given that the District Court heard two months of 

testimony on Avaya’s common law claims, judgment as a 

matter of law could only have been appropriate in the 

extraordinary circumstance that none of that evidence could 

lead a reasonable jury to find that TLI was liable on any one 

of the common law claims.

We exercise plenary review over the order granting the

motion for judgment as a matter of law, and we apply the 

same standard as the District Court should have. Lightning 

Lube, 4 F.3d at 1166. Though the District Court ably 

supervised the introduction of volumes of evidence and was 

attentive in managing this complex case, we cannot help but 

conclude that its decision to grant TLI’s motion for judgment 

as a matter of law was irretrievably flawed. Avaya provided 

ample proof of conduct that could support its common law 

claims, much of which was uncontroverted and came directly 

from the testimony of TLI executives themselves. While we 

have high regard for the fine jurist who was at the helm in the 

District Court, this case is a reminder that “judgment as a 

matter of law should be granted sparingly.” Goodman v. Pa.

Tpk. Comm’n, 293 F.3d 655, 665 (3d Cir. 2002).
26

1. Evidence Supporting Avaya’s 

Common Law Claims

Avaya presented evidence that TLI engaged in conduct 

that was at best ethically dubious, and quite possibly

unlawful. To summarize the conduct at issue, it is undisputed 

that TLI enlisted former Avaya employees to “hack” and

“crack” Avaya systems, that it submitted deceptive requests

for login access, and that it used Avaya’s proprietary 

knowledge – gained while still Avaya’s Business Partner – to

compete directly against Avaya. As a result, TLI was able to 

lure a significant amount of business away from Avaya and 

its Business Partners. TLI’s surreptitious business dealings

and its executives’ own admissions of secrecy belie any claim

that it thought its own conduct was fair and proper. 

a. Evidence of Unlawful Activity

i. Hacking and Cracking

The first method TLI used to hack into its clients’ 

Avaya systems was hiring former Avaya employee Dave 

Creswick to crack logins and passwords. Creswick knew that 

TLI needed the passwords “[t]o do their maintenance” in 

competition with Avaya. (J.A. 2277.) He would hack into 

systems and activate MSPs on TLI’s clients’ systems, and he

also activated DADMIN login access several times. 

The evidence introduced at trial of the Creswick 

hacking scheme was copious, and came mostly from the 

testimony of TLI executives themselves. Chief Technology 

Officer Scott Graham acknowledged that TLI paid Creswick 

to “enable some logins and MSPs” (J.A. 2292) and that it
27

began paying Creswick for this service while TLI was still

under contract as an Avaya Business Partner. CEO Douglas 

Graham acknowledged using Creswick as an “ex-Avaya 

employee [to] create a new password for the system[s].” 

(J.A. 2747.) Avaya introduced an email in which Douglas 

Graham offered Creswick “a flat rate of $300 a password for 

single situations and $200 a password if you do more [than] 

one password at a time.” (J.A. 6117.) In another email, 

Creswick bragged to Douglas Graham that “there has not 

been [an Avaya PBX] system created that I cannot get into.” 

(J.A. 6059.) TLI eventually developed additional means to 

access Avaya PBXs, and by 2008, it had begun to “read [] 

passwords” for itself, using a method similar to (but simpler 

than) Creswick’s. (J.A. 2361.)

TLI also hacked Avaya systems by hiring another 

former Avaya employee, Harold Hall, who used software

“provided by Avaya” during his time as an Avaya employee 

to “beat” Avaya’s security systems. (J.A. 2293). Hall had 

taken the software, called an “ASG key,” with him when he 

left Avaya’s employment. He acknowledged at trial that he 

did not receive permission from Avaya to do so. Scott 

Graham admitted that Hall’s method was necessary to 

overcome “an additional security method that was 

implemented by Avaya on certain releases of the ... PBX 

software.” (J.A. 2365.) He conceded that he knew “Hall had 

[software] provided to him by Avaya” and that he “believe[d] 

[Hall] used it through most of his career at Avaya” before 

using that software “subsequently as a contractor.” (J.A. 

2366.) In his own testimony, Hall estimated that he had used 

the ASG key for TLI “40 [to] 60” times. (J.A. 3057.)
28

ii. Deceptive Access 

Requests

The second way that TLI gained access to Avaya’s

PBX systems was to cajole Avaya Business Partners into 

submitting deceptive requests for login access. As Scott 

Graham characterized it, TLI would “work[] with several 

Business Partners” to have them “submit[] a DADMIN form 

at the customer’s request” – but, unbeknownst to Avaya, TLI

would be the ultimate user. (J.A. 2293.) Graham 

acknowledged that, if Avaya had known that TLI was behind 

the request, it would not have enabled the DADMINs because 

Avaya was “doing everything [it] could to put [TLI] out of 

the maintenance business.” (J.A. 2338.) Therefore, as 

Graham put it, the submissions “did not identify [TLI] on 

there” and “did not have [TLI’s] name on there to identify to 

Avaya that [the customer] was also a customer of [TLI’s].” 

(J.A. 2338.) In response to an interrogatory, TLI identified 

seven Business Partners who cooperated in the scheme to 

send access requests “that resulted in the activation of 

DADMIN logins” that were used by TLI. (J.A. 3041.) 

iii. Disloyal Use of 

Knowledge Gained As

Avaya Business Partner

TLI’s third method for surreptitiously gaining access 

to Avaya systems was to rely on proprietary information

learned when it was under contract as an Avaya Business 

Partner. Scott Graham testified that “108 locations or about 8 

percent” of the PBX systems that TLI serviced “were systems 

for which TLI provided maintenance using a login that it had 

obtained from Avaya when TLI was a Business Partner.” 
29

(J.A. 2423.) An additional “17 percent” of TLI’s 

maintenance business was for “systems that were ... using a 

default login or password.” (J.A. 2424.) TLI “did indeed 

learn of [those default passwords] during the time that [TLI

was] a Business Partner.” (J.A. 2332.)

iv. Subjective Knowledge of 

Wrongful Conduct

Avaya also presented evidence that TLI knew that

Avaya considered maintenance access to be proprietary and 

that TLI deliberately acted in secret to gain system access, 

from which a jury could infer malice or bad faith. Scott 

Graham admitted in his testimony that TLI “hid [its] activities 

from Avaya” and that the information about how TLI gained 

access was “carefully guarded” when dealing with customers 

– though he denied providing customers with affirmatively 

false information. (J.A. 2293-94.)

TLI actually went to great lengths to conceal its 

activities from Avaya. Scott Graham acknowledged that if 

Avaya knew that TLI was behind the vicarious DADMIN 

login requests, it would not have provided them. 

Accordingly, TLI would have customers sign blank request 

forms and would not disclose to them the identity of the 

Business Partner that would actually submit the form, because 

“if the Business Partner was identified to the customer, that 

could get back to Avaya.” (J.A. 2345.) TLI believed (no 

doubt rightly) that if Avaya learned of that practice, it would 

have intervened to stop the unauthorized access. 

As for the hacking schemes, Douglas Graham 

acknowledged that “it was very important to [TLI] that Avaya 
30

didn’t know about Mr. Creswick.” (J.A. 2748.) In an email, 

Graham wrote that one way TLI got “access to [Avaya]

systems” was “having an ex-Avaya employee create a new 

password for the system,” and he suggested that “[i]f [Avaya] 

knew of” the manner in which TLI was getting access, it 

“would probably be raising it” in litigation. (J.A. 6363-64.) 

TLI executive Bruce Shelby testified that TLI would make 

customers sign non-disclosure agreements before revealing 

who its subcontractors were, for fear that Avaya would find 

out and “put pressure on all the Business Partners that were 

on our subcontractor list not to work with us.” (J.A. 2986.) 

He also testified that TLI did not want Avaya “to find out ... 

how TLI was gaining access to the on-demand maintenance 

commands.” (J.A. 2997-98.)

Testimony also established that TLI acted to obfuscate 

its practices when dealing with its own customers. For 

example, when Avaya changed its customer contract 

language regarding DADMIN access, Scott Graham sent an 

email to TLI leadership suggesting a tactic to conceal the 

firm’s methods:

In light of Avaya’s recent changes in 

contract language regarding [DADMIN]

specifically, we want to eliminate that word 

from our vocabulary when talking to customers.

When we refer to logins - we want to 

simply refer to them as “service logins[.”] ...

Obviously, some customers will ask 

pointed enough questions, that we will need to 
31

be more descriptive, but as a default we want to 

change our message.

(J.A. 5817.) The obfuscation apparently worked; in fact, two

of TLI’s customers testified that they did not know that TLI

was not an authorized maintenance provider when they hired 

the firm. 

TLI also took preemptive actions to prevent Avaya 

from interrupting its activities. According to Scott Graham’s 

testimony, TLI knew that the MSPs were licensed by Avaya 

to each customer and that the licenses “all implied” that 

“Avaya could shut [the MSPs] off” at the end of a customer’s 

contractual relationship with Avaya. (J.A. 2382.) Therefore, 

as Douglas Graham put it in an email, TLI would “tak[e] over 

the system” of a customer it had successfully solicited,

“before Avaya ha[d] time to turn the [MSPs] off, or change 

the passwords,” which was “simply done by disconnecting 

the phone line that links Avaya to the customer’s system.” 

(J.A. 6363.) Similarly, Harold Hall testified that he would 

access the Avaya systems using the DADMIN logins he had

cracked with the software he had walked away with when he 

quit Avaya, and then he would change the DADMIN 

password. He testified that the practice was a “routine thing”

that TLI did, and that it ensured that “nobody other than [TLI 

could] access that [system] using the DADMIN login.” (J.A. 

3055.) One TLI employee testified that she was instructed to 

tell customers who were cancelling a contract with Avaya to 

“change the line that they had in place” and to “change a 

password,” all “so that Avaya couldn’t access the system.” 

(J.A. 2463.)
32

b. Harm to Avaya

All of the common law claims at issue have as an 

element that Avaya establish actual damages resulting from

TLI’s unlawful activity. At trial, Avaya presented evidence 

of several avenues through which TLI’s alleged

misappropriation of maintenance access caused it financial 

harm.

First, Avaya lost license revenue when TLI provided 

the misappropriated access to its customers, who would 

otherwise have had to license access from Avaya. Scott 

Graham testified that TLI provided customers with logins that 

went beyond the base customer logins. Douglas Graham 

testified to a specific instance in which TLI provided a highlevel password to a client so that the client would “not have to 

pay Avaya for MSPs.” (J.A. 2720.) Shelby testified that TLI

would “tell prospective customers that they did not need to 

pay for MSPs if they were to become a TLI maintenance 

customer,” “because [TLI] had another method to gain 

access.” (J.A. 3033.)

Second, TLI would itself sell passwords to customers, 

as was established by Douglas Graham’s testimony. He 

described how TLI charged “setup fees” for customers who 

needed a new password. (J.A. 2750.) Also, “[t]here was a 

time where [TLI] would charge customers if [TLI] had to get 

a second password.” (J.A. 2750.) That TLI revenue gained 

by selling Avaya’s proprietary information could be a basis 

for disgorgement damages.

Third, and most importantly, the allegedly 

misappropriated access enabled TLI to compete directly with 
33

Avaya for maintenance customers, costing Avaya profit in its 

high-margin maintenance business. Scott Graham testified 

that, from 2001 on, TLI competed with Avaya for 

maintenance dollars. Douglas Graham acknowledged that,

since that time, TLI “marketed ... its own maintenance, to 

existing Avaya maintenance customers,” and he identified 

one customer in particular that TLI “took over” from Avaya. 

(J.A. 2704-05.) Shelby acknowledged that TLI “targeted 

PBX owners with existing maintenance contracts because 

they were the ones ... who were most likely to spend money 

on PBX maintenance.” (J.A. 2983.) He also stated that, of 

those existing maintenance contracts, “[t]he vast majority 

were with Avaya.” (J.A. 2983.)

Avaya presented evidence that TLI’s ability to 

compete for that business depended on the maintenance 

access that Avaya contends was misappropriated. Scott 

Graham agreed that “unless [TLI] could access the 

maintenance commands built into the software, [it] couldn’t 

... do the maintenance.” (J.A. 2385.) He also stated that 

“[s]ome of the services” offered by TLI for the PBX 

maintenance at issue “do require the maintenance 

commands.” (J.A. 2294.) And he acknowledged that 

“generally” the commands at issue “can’t be executed by a 

customer level login with no MSPs,” hence requiring a 

higher-level login of the type that was gained by the various 

means just described. (J.A. 2294.)19

 

19 Avaya presented a specific example through the 

testimony of one maintenance client who was courted by TLI. 

That witness testified that his firm had traditionally used 

Avaya maintenance (either directly or through Business 

Partners), switched to TLI under the mistaken belief that it 
34

The competition for business was especially costly to 

Avaya because maintenance was a major driver of the profits

from its PBX and PDS systems.

20

 Avaya’s profit margin on 

the sale of PBX systems was substantially lower than its 

profit margin on the whole range of maintenance products. 

 

was a Business Partner, then terminated that arrangement 

upon discovering that TLI was not “able to provide [them] 

with the proper login credentials to support and administer the 

system” and thereafter “went back to Avaya for support.” 

(J.A. 2510.) Avaya therefore presented not only generalized 

evidence that TLI’s maintenance contracts were at Avaya’s 

expense, but a concrete example of how that substitution 

worked.

20 Indeed, Douglas Graham noted in an email that 

Avaya would frequently take losses in order to retain its 

extant maintenance contracts, another facet of TLI’s 

competitive strategy:

TLI continues to have significant success in 

taking over existing Avaya maintenance 

contracts. Even when TLI loses, in most cases 

Avaya has to take a significant loss to win the 

deal. For example, TLI just lost International 

Paper. At the time of TLI’s proposal, 

International Paper was paying Avaya over 

$4,000,000 a year. TLI’s proposal was for 

$2,800,000 a year. I have not gotten all the 

details, but I am confident that Avaya had to 

partner with a Business Partner and take a 

significant loss to keep TLI from winning this 

deal.

(J.A. 6363.)
35

Even if Avaya did not retain the customer as a direct service 

client, the two other authorized routes for customers to obtain

maintenance service – purchasing service from a Business 

Partner or purchasing licenses for self-maintenance – would

also have benefited Avaya financially. As an Avaya 

executive testified, when a customer signs on with a Business 

Partner, it becomes a “customer ... that [Avaya] can look to 

sell additional products to.” (J.A. 2065) In some cases, the 

Business Partner would in turn sell Avaya maintenance

service, providing direct revenue to Avaya. Even if the 

Business Partner sold its own branded maintenance, any such 

service was “going to ... include[] ... some Avaya content,”

hence yielding business for Avaya. (J.A. 2569.) 21

Moreover, if the jury credited Avaya’s case, it would 

have been able to apportion damages to different conduct, 

because it had evidence of TLI’s total maintenance earnings 

and the proportion of maintenance attributable to each form 

of allegedly unlawful access. Avaya’s accounting expert 

testified that, depending on which profit model was believed 

(the plaintiff’s or the defendant’s), TLI made between 

$20,260,092 and $31,160,190 from its maintenance of Avaya

PBX systems between 2003 and 2010. TLI’s own analysis 

concluded that its maintenance services were based on logins 

procured in the following proportions: 8% was “obtained 

 

21 Not incidentally, a maintenance relationship either 

directly with Avaya or with an authorized Business Partner 

also allowed Avaya to assert quality control over 

maintenance, which helped protect the value of Avaya’s 

brand reputation. When it came to independent providers, 

Avaya was “concerned about the quality of maintenance 

service that the customer receives.” (J.A. 2065.)
36

from Avaya when TLI was a Business Partner” (J.A. 2423);

1% was using “a well-known Business Partner password” 

(id.); 5% was based on deceptive requests from other 

Business Partners; 24% was “obtained through Mr. 

Creswick” (J.A. 2424); 28% was “using a login that the 

customer had provided it access to” (id.); 17% was obtained 

through a “default login or password” (id.); and 16% was 

“obtained internally,” including “through use of the known 

key with Mr. Hall” and TLI’s internally-developed cracking 

method (id.). If the jury found each of those courses of 

conduct to be unlawful, the total would account for 99% of 

the profit that TLI garnered from its Avaya PBX maintenance 

business. Even limiting the analysis to just the more 

obviously problematic conduct – deceptive log-in requests, 

hacking and cracking, and using passwords TLI gained as a 

Business Partner – it accounts for 53% of TLI’s business.

With all the foregoing considerations taken together, 

we conclude that Avaya presented substantial evidence that, 

but for TLI’s competition, made possible only by its alleged 

theft of proprietary information, Avaya would have received a 

significant portion of the money TLI’s clients spent on 

maintenance. Further, it would have been feasible for the 

jury to attribute particular losses to particular conduct.

2. Customer Contract Interpretation

In granting judgment as a matter of law to TLI on 

Avaya’s common law claims, the District Court largely relied 

on its ruling that Avaya’s contracts with its equipment 

customers entitled those customers to give TLI access to their 

systems to perform maintenance. The District Court ruled 

that, as a matter of law, “Avaya failed to prove the software 
37

licensing agreements entered into by TLI’s 470 customers 

upon purchasing their PBXs prohibited them from allowing 

TLI[] to access the ODMCs on their systems.” (J.A. 201.) 

Because that threshold legal determination was so central to 

the rest of the District Court’s analysis, we turn to considering 

whether it was correct.

There is no dispute that New Jersey law governs this 

issue, according to the choice of law provision in the 

customer contracts, and under New Jersey law, “discerning 

contractual intent is a question of fact unless the provisions of 

a contract are wholly unambiguous.” Jaasma v. Shell Oil 

Co., 412 F.3d 501, 507 (3d Cir. 2005) (interpreting New 

Jersey law) (internal quotation marks and modifications 

omitted) (quoting In re Barclay Indus., Inc., 736 F.2d 75, 78 

n.3 (3d Cir. 1984)). “An ambiguity in a contract exists if the 

terms of the contract are susceptible to at least two reasonable 

alternative interpretations.” M.J. Paquet, Inc. v. N.J. Dep’t of 

Transp., 794 A.2d 141, 152 (N.J. 2002) (quoting Nester v. 

O’Donnell, 693 A.2d 1214, 1220 (N.J. Super. Ct. App. Div. 

1997)). When that is so, it is permissible to look to evidence 

outside the contract “as an aid to interpretation.” Chubb 

Custom Ins. Co. v. Prudential Ins. Co. of Am., 948 A.2d 1285, 

1289 (N.J. 2008) (citation omitted).

Two sets of license agreements are in dispute, those 

before and those after 2007. Each is the subject of a distinct 

question. For the pre-2007 agreements, the question is 

whether it was ambiguous that they permitted licensees – i.e., 

Avaya customers – to provide access to ISPs. The post-2007 

agreements unambiguously barred giving such access, but it 

is disputed whether Avaya’s customers actually entered into 

those agreements. We conclude that, for both sets of 
38

agreements, Avaya presented sufficient evidence to at least 

create disputes of material fact, so that those questions should 

have been answered by the jury, not the Court.

In ruling that PBX license agreements unambiguously 

gave purchasers a right to use maintenance commands and to 

provide access to third parties, the District Court relied on 

language from the “Purchase/Service Agreement.” The 

Court’s conclusion was based on a provision in “[l]icensing 

agreements used from 1990 to 2003,” which “granted the 

purchaser ‘a personal, non-transferable and non-exclusive 

right to use ... all software and related documentation 

furnished under this agreement.’” (J.A. 204 (quoting license 

agreement, an example of which is at J.A. 5856).) In the 

District Court’s reading, that language gave Avaya PBX 

customers a “personal ... right” to use MSPs, which the Court 

viewed as “software ... furnished under this agreement.” In 

the Court’s view, that right to use MSPs extended to the 

customer’s maintenance provider, whether an employee or an 

independent contractor such as TLI.

22

 

22 In 2003, Avaya updated the agreements. It left the 

quoted language in place but added a new clause stating that 

the “[c]ustomer will make the Software available only to 

employees, contractors, or consultants with a need to know, 

who are obligated to comply with all license restrictions 

contained in the Agreement and to maintain the secrecy of the 

Software.” (E.g., J.A. 5241.) The District Court interpreted 

the language about “contractors[] or consultants” to be 

“consistent with the ... construction of licensing agreements 

that allow third-party use for the licensee’s benefit.” (J.A. 

205 n.26.) It therefore considered that contract term to be 

evidence that PBX owners were permitted to use independent 
39

Avaya challenges the District Court’s interpretation of 

those agreements, arguing that the MSPs required to perform 

maintenance were not in fact “furnished under” the 

Purchase/Service Agreement, so that customers did not have a 

“right to use” them. (Opening Br. at 30.) Instead, MSPs 

were “licensed separately through an MSP Addendum ... or 

Maintenance Assist agreement.” (Id.) “Avaya delivered new 

equipment with MSPs turned off, enabled them only if 

customers signed a separate ... agreement, and disabled them 

if that agreement expired.” (Id.) Although customers could 

maintain their PBX systems without MSPs, it was “just not as 

efficient” to do so without the remote access that MSPs 

allowed (J.A. 1995) – hence the value of executing an 

agreement to activate MSPs.

We do not need to answer who has the better reading 

of the contracts because, at a minimum, they are ambiguous, 

and the District Court erred in ruling that Avaya’s reading is 

untenable. MSPs may have been embedded in the software 

given to customers, but customers’ ability to access them 

required a separate purchase from Avaya. If the District 

Court’s interpretation were correct, then any time a customer 

downloaded a piece of software that had components 

requiring additional payment and permissions, courts would

treat the entire software and all its components as having been 

“furnished” to the customer in the original purchase. That is 

questionable, and the contrary interpretation is, at the very 

least, plausible. Moreover, given that Avaya’s business 

model was dependent on selling base equipment and then 

licensing and enabling additional features such as MSPs, the 

 

contractors for maintenance and to provide them with system 

access.
40

conclusion that those features were unambiguously meant to 

be “furnished” in the base purchase is far from clear. As 

Avaya points out, “[h]undreds of self-maintenance customers 

paid Avaya for ... access commands,” which would “make no 

sense if the Purchase/Service Agreements already entitled 

customers” to them. (Opening Br. at 32.) Avaya, its 

customers, and even TLI did not read the agreements that way 

before the lawsuit, and the District Court erred in declaring 

that the terms were unambiguously contrary to all the parties’

understandings.

Avaya also notes that in 1999, the agreements were 

modified to include a provision that a customer “will not 

enable or attempt to permit any third party to enable software 

features or capacity (e.g. additional storage hours, ports, or 

mailboxes) which Avaya licenses as separate products 

without Avaya’s prior written consent.” (J.A. 205 n.24.) 

Based on that language, Avaya argues that customers were 

barred from allowing an ISP to enable features, such as 

MSPs, without Avaya’s consent. The District Court, 

however, did not consider that provision to apply to MSPs. It 

read the list of enumerated examples – “storage hours, ports 

..., and voice mailboxes” – to be “clearly incongruous” with 

MSPs. (Id.) Accordingly, the Court ruled that MSPs were 

unambiguously not a “feature[] or capacity” subject to the 

provision’s restrictions.

For much the same reasons that we disagree with the 

District Court’s construction of the “furnished under”

language, we also conclude that it was improper to determine 

that terms “features or capacit[ies]” were unambiguous and 

did not apply to MSPs. Storage hours, additional ports, and 

mailboxes are some examples of the add-ons that Avaya 
41

licensed separately, but MSPs and ODMCs that provided

remote maintenance access might rationally be viewed by a 

jury as being just as much “features” that enhance a 

customer’s use of a PBX system.

23

 Not only did customers’

behavior provide some corroboration of Avaya’s 

interpretation of the contract, TLI’s did as well. If the 

agreements unambiguously permitted customers to give TLI

access to MSPs, there would have been little reason for its 

secretive efforts to gain maintenance access. Indeed, Scott 

Graham was asked at trial whether he “knew that MSPs were 

not part of the original sale of the PBX to the customers,” and 

he responded: “Yes, and that was one of the big problems.” 

(J.A. 2303.) In light of the imprecision of the words 

“features” and “capacity” and the extrinsic evidence 

 

23 TLI argues that, in Avaya’s “detailed ‘feature’ 

manuals,” Avaya “did not once identify MSPs as a ‘feature.’” 

(Answering Br. at 84 (citing J.A. 2407).) We agree that 

testimony about those features manuals, and the absence of 

any mention of MSPs in them, would be relevant for the jury 

to consider in interpreting the meaning of the 1999 

modifications. But, as an Avaya system engineer put it at 

trial, the PBX software is “able to do a vast number of 

things,” and customers could pick and choose which “aspects 

of the software” to purchase. (J.A. 1886.) That Avaya chose 

to highlight more glamorous capacities in its features manuals 

– instead of intermediate commands and functions that 

allowed remote-access maintenance – does not foreclose a 

jury determination that such access was indeed a feature of 

the product. Given that so few customers performed their 

own maintenance, that lack of emphasis may make perfect 

sense to a jury.
42

supporting Avaya’s interpretation of the contract, we 

conclude that the District Court erred in ruling as a matter of 

law that the 1999 additions to Avaya’s PBX contracts 

unambiguously did not apply to MSPs.

Having resolved that the District Court erred in 

construing the pre-2007 customer contracts to be

unambiguously contrary to Avaya’s interpretation, we turn to 

the post-2007 agreements.24 The District Court 

acknowledged that the 2007 version of the licensing 

agreement clearly “obligated the purchaser to refrain from 

using a third-party maintenance provider,”

25 but it ruled that

“Avaya did not introduce any evidence indicating that [TLI’s]

 

24 The District Court made note of the fact that only 

“eight out of [TLI’s] 470 customers purchased their PBXs in 

2007 or after,” and that the 2007 contract modification “came 

into existence well after Avaya initiated the instant suit in 

June of 2006.” (J.A. 206-07 n.27.) Although allegedly 

unlawful access to post-2007 systems may not have been a 

large contributor of TLI’s business or the motivation for 

Avaya’s suit, that goes to the question of damages, not 

liability.

25 The agreement provided that the “[c]ustomer agrees 

not to ... allow any service provider or third party, with the 

exception of Avaya’s authorized channel resellers and their 

designated employees ... to use or execute any software 

commands that cause the software to perform functions that 

facilitate the maintenance or repair of any Product except that 

a service provider ... may execute those software commands 

that ... would operate if ... [MSPs] were not enabled or 

activated.” (J.A. 7283.)
43

customers signed such a licensing agreement, and 

consequently this iteration of the agreement cannot be used to 

prove that [TLI’s] customers were prohibited from granting 

TLI[] access to the ODMCs on their PBXs.” (J.A. 206.) 

Again, the Court was wrong.

Avaya did present sufficient evidence to establish a 

dispute of material fact, which should have gone to the jury. 

The form agreement itself was in evidence, and an Avaya 

employee testified that the standard form agreements as of 

2008 included the specific reference restricting use of MSPs. 

That employee also explained that the forms were crafted by 

a “forms committee” that ensured that uniform terms and 

conditions were “incorporated into the templates,” which 

were then incorporated into “procedures under which [Avaya] 

used form agreement[s]” for PBX equipment, software, and 

maintenance sales. (J.A. 2615.) Given the evidence of

Avaya’s centralized form-drafting procedure, an example of 

an actual prototypical form, and examples of earlier 

generations of forms that were in fact signed by customers, a 

jury could have reasonably found that the post-2007 form 

agreements were in fact reflective of PBX purchasers’ license 

obligations. It was thus improper for the District Court to 

resolve the question as a matter of law rather than leave it to 

the jury.
44

3. Tortious Interference with Prospective 

Business Advantage

We now turn to the specific claims that Avaya asks us 

to revive. We first consider count three of its Complaint, in 

which Avaya set forth a claim for tortious interference with 

prospective economic advantage. 

As a federal court sitting in diversity, and as is 

undisputed by the parties, we are obligated to apply New 

Jersey’s law to the tort claims. See Lorenzo v. Pub. Serv. 

Coordinated Transp., 283 F.2d 947, 948 (3d Cir. 1960) (per 

curiam). In Printing Mart-Morristown v. Sharp Electronics 

Corp., the Supreme Court of New Jersey held that, in a claim 

of tortious interference with prospective business advantage, 

“[w]hat is actionable is ‘[t]he luring away, by devious, 

improper and unrighteous means, of the customer of 

another.’” 563 A.2d 31, 36 (N.J. 1989) (quoting Louis 

Kamm, Inc. v. Flink, 175 A. 62, 66 (N.J. 1934)). To prevail 

on such a claim, Avaya “was required to show [1] that it had 

a reasonable expectation of economic advantage, [2] which 

was lost as a direct result of [TLI’C’s] malicious interference, 

and [3] that it suffered losses thereby.” Ideal Dairy Farms, 

Inc. v. Farmland Dairy Farms, Inc., 659 A.2d 904, 932 (N.J. 

Super. Ct. App. Div. 1995) (citation omitted).

26

 

26 We earlier parsed New Jersey law to further 

subdivide the tort, essentially by breaking out the second part 

of the Ideal Dairy Farms formulation into three elements. As 

we put it then, the tort comprised five elements:

1) a plaintiff’s reasonable expectation of 

economic benefit or advantage, (2) the 

defendant’s knowledge of that expectancy, (3) 
45

In terms of the first element – protectable economic 

expectations – the Supreme Court of New Jersey has held that

“[i]t is not necessary that the prospective relation be expected 

to be reduced to a formal, binding contract,” and that such 

prospective relations include “the opportunity of selling or 

buying land or chattels or services, and any other relations 

leading to potentially profitable contracts.” Printing Mart,

563 A.2d at 39 (quoting Restatement (Second) of Torts 

§ 766B cmt. c (1979)). Courts have found “a reasonable 

expectation of economic gain in as slight an interest as 

prospective public sales.” Id. at 38 (collecting cases).

Protectable economic expectations can arise from both 

existing and potential customers. “Tortious interference 

developed under common law to protect parties to an existing 

or prospective contractual relationship from outside 

interference.” Id. at 38 (emphasis added) (citation omitted). 

Satisfaction of the first element does not turn on whether the 

customer is characterized as current or prospective, but rather 

whether the facts of the case “giv[e] rise to some ‘reasonable 

 

the defendant’s wrongful, intentional 

interference with that expectancy, (4) in the 

absence of interference, the reasonable 

probability that the plaintiff would have 

received the anticipated economic benefit, and 

(5) damages resulting from the defendant’s 

interference.

Fineman v. Armstrong World Indus., Inc., 980 F.2d 171, 186 

(3d Cir. 1992) (citing Printing Mart, 563 A.2d at 37; 

Restatement (Second) of Torts § 766B)).
46

expectation of economic advantage.’” Id. at 37 (quoting 

Harris v. Perl, 197 A.2d 359, 363 (N.J. 1964)).27

The second element – malicious interference – requires 

only “the intentional doing of a wrongful act without 

justification or excuse.” Id. at 39 (quoting Louis Schlesinger 

Co. v. Rice, 72 A.2d 197, 203 (N.J. 1950)). Wrongful 

conduct, always viewed in the specific context of the case 

presented, is generally defined by reference to custom in the 

industry. It is conduct that “would not be sanctioned by ‘the 

rules of the game.’” Id. at 40. “[T]he line must be drawn 

where one competitor interferes with another’s economic 

advantage through conduct which is fraudulent, dishonest, or 

illegal.” Ideal Dairy Farms, 659 A.2d at 936 (citation 

omitted). A benign, or pro-competitive, motive does not 

absolve misconduct. “While competition may constitute 

justification, a defendant-competitor claiming a business-

 

27 Printing Mart illustrates how broad a protectable 

prospective economic advantage may be. The corporate 

plaintiff had performed printing services for Sharp 

Electronics for several years. When Printing Mart submitted 

a bid on the latest Sharp project, there was evidence that

Sharp employees rigged the bidding process to enable a 

Printing Mart competitor to win the contract. Printing Mart 

sued Sharp, three of its employees, and three competitors for

intentional interference with prospective economic relations. 

The trial court dismissed the complaint on the basis that no 

contract obligated Sharp to do business with Printing Mart. 

The Supreme Court of New Jersey reversed, holding that, 

although a complaint based on tortious interference must 

allege facts that show a protectable right, the right “need not 

equate with that found in an enforceable contract.” Printing 

Mart, 563 A.2d at 37.
47

related excuse must justify not only its motive and purpose 

but also the means used.” Id. at 933 (citation omitted).

In Lamorte Burns & Co. v. Walters, the Supreme 

Court of New Jersey held that the “taking of plaintiff’s 

confidential and proprietary property and then using it 

effectively to target plaintiff[’s] clients, is contrary to the 

notion of free competition that is fair.” 770 A.2d 1158, 1172 

(N.J. 2001). In that case, two of Lamorte’s employees 

collected information on its clients with the purpose of using 

it to start their own business in direct competition with 

Lamorte. Id. at 1162. The court held that such conduct was 

sufficient to make out a claim of tortious interference, so that

the targeting of a company’s current clients was sufficient to 

ground a tortious interference claim. Id. at 1172.

For a plaintiff to establish the third element, loss and 

causation, there must be “proof that if there had been no 

interference there was a reasonable probability that the victim 

of the interference would have received the anticipated 

economic benefits.” Printing Mart, 563 A.2d at 41 (quoting 

Leslie Blau Co. v. Alfieri, 384 A.2d 859, 865 (N.J. Super. Ct. 

App. Div. 1978)). As the Appellate Division of the New 

Jersey Superior Court has explained, “[i]t is sufficient that

plaintiff prove facts which, in themselves or by the inferences 

which may be legitimately drawn therefrom, would support a 

finding that, except for the tortious interference by the 

defendant with the plaintiff’s business relationship with 

[another party], plaintiff would have consummated the sale 

and made a profit.” McCue v. Deppert, 91 A.2d 503, 505-06 

(N.J. Super. Ct. App. Div. 1952).

The District Court here decided that TLI’s access was 

not itself wrongful and that, therefore, Avaya’s tortious 
48

interference claim must fail. That conclusion rested on two

propositions: first, that Avaya had previously allowed TLI to 

provide maintenance, and, second, that “customers’ licensing 

agreements specifically allow[ed] for third-party service 

providers.” (J.A. 226.) Both those propositions are 

problematic in ways that undermine the District Court’s 

decision.

As to the first point, the District Court was wrong to 

conclude that TLI was entitled to access ODMCs merely 

because it had been allowed to do so while it was an Avaya 

Business Partner. Of course TLI was permitted access when 

it was a contractual partner of Avaya’s, but the District Court

provided no rationale to explain why that access survived the 

termination of that relationship. By close analogy, former 

employees in Lamorte were entitled to use their employer’s 

proprietary customer information while they were working 

for that employer, but they were not entitled to use that 

information when they left to become competitors. 770 A.2d 

at 1172. Likewise, TLI was entitled to access ODMCs when 

it was an authorized Avaya Business Partner, but there is no 

reason it could expect that its access to proprietary software 

and logins would survive when it struck out on its own to 

compete directly against Avaya.

As to the second point, we have already explained in 

detail why the District Court erred in concluding that Avaya 

customers were unambiguously entitled to give TLI remote 

access to perform maintenance. Even if the District Court 

were correct, however, that would not immunize TLI from a 

tortious interference claim when it comes to stealing away 

customers who had service contracts with Avaya. In WearEver Aluminum, Inc. v. Townecraft Industries, Inc., the 
49

Chancery Division of the New Jersey Superior Court 

emphasized that, even though the plaintiff company’s 

contracts with its employees were terminable at will, that did 

not permit a third party to interfere with the employment 

relationship. 182 A.2d 387, 393 (N.J. Super. Ct. Ch. Div. 

1962). Even if the contract in question permits an act 

eventually taken by a customer, “a stranger to the contract 

may not exercise his will in substitution for the will of either 

of the parties to the contract.” Id. Moreover, even if TLI

could have lawfully obtained access to MSPs and ODMCs 

from Avaya’s customers, that did not insulate it from tort 

liability for the methods it actually used to access the 

maintenance commands. If a homeowner gives a neighbor 

permission to borrow tools, the neighbor is not thereby 

insulated from a trespass suit if he chooses to break into the

garage to get them. 

Having rejected the District Court’s assessment of 

those two threshold matters, we turn next to its application of 

a multifactor test for tortious interference from the 

Restatement (Second) of Torts § 767 (1979).28 Assuming for 

the moment that the Court was applying the right test – and 

 

28 The District Court cited Printing Mart, 563 A.2d at 

752, for the proposition that New Jersey courts have adopted 

the multi-factor test from the Restatement. In fact, Printing 

Mart adopted § 766B, but subsequent case law from the 

Supreme Court of New Jersey suggests that § 767 is also 

persuasive. See Nostrame v. Santiago, 61 A.3d 893, 901 (N.J. 

2013) (“In determining whether the conduct complained of is 

improper, the Restatement offers general guidance, 

identifying a variety of relevant considerations.” (citing 

Restatement (Second) of Torts § 767)).
50

we think looking to the case law may have been more 

productive – the District Court nonetheless misstepped in its 

legal ruling. Section 767 lists the following factors for 

consideration:

(a) the nature of the actor’s conduct,

(b) the actor’s motive,

(c) the interests of the other with which the 

actor’s conduct interferes,

(d) the interests sought to be advanced by the 

actor,

(e) the social interests in protecting the freedom 

of action of the actor and the contractual 

interests of the other,

(f) the proximity or remoteness of the actor’s 

conduct to the interference and

(g) the relations between the parties.

The factors in that test are laden with subjective value 

judgments that will rarely be answerable as a matter of law. 

Nonetheless, and in the face of the already-recounted 

unflattering evidence against TLI, the District Court 

concluded that “[e]very single factor strongly indicates that 

[TLI’s] conduct d[id] not rise to the level ... the law 

proscribes.” (J.A. 227.) We disagree.

First, the District Court stated that TLI acted with 

proper competitive motive and interest.

29

 But, even assuming 

 

29 Although the District Court was not explicit in 

enumerating which factors of the Restatement’s seven-factor 

test it was considering, we infer from its argument that it here 

considered factors (a), (b), and (d) together – respectively, the 
51

that were true, a pro-competitive motive or interest does not 

absolve misconduct that falls afoul of the first factor’s 

consideration of the nature of the conduct. Again, “[w]hile 

competition may constitute justification, a defendantcompetitor claiming a business-related excuse must justify 

not only its motive and purpose but also the means used.” 

Ideal Dairy Farms, 659 A.2d at 933.

Second, the Court considered the nature of the 

protected interest, and it observed – without further comment 

or citation to authority – that “the law does not protect as 

forcefully a firm’s economic interest in possible, future 

customers as it does interests in contracting parties.” (J.A.

228.) Whether or not that is true, TLI was in fact interfering 

with Avaya’s relationships with then-existing maintenance 

customers. There was nothing speculative, or 

underwhelming, about that economic interest.

Third, in considering society’s interest, the District 

Court found that TLI’s conduct “brought greater competition 

to the market and challenged widespread and vexatious 

threats of litigation.” (J.A. 228.) We do not believe the 

District Court was in a position to weigh the relative social 

merits of TLI’s conduct with Avaya’s proprietary interests in 

its software and its legitimate business expectations with its 

maintenance customers. That is exactly the kind of factual 

and ethical determination meant for the jury rather than the 

Court.

 

nature of TLI’s conduct, its motive, and the interests it sought 

to advance.
52

Fourth, in considering the proximity of TLI’s conduct 

to the interference, the District Court emphasized that TLI’s 

“interference was far removed from their allegedly improper 

conduct” because it only accessed the ODMCs after the 

customer in question had left Avaya. (J.A. 229.) But the 

customers never would have left Avaya if TLI had not been 

able to promise ODMC access. The allegedly tortious 

conduct that enabled that access was therefore the sine qua 

non of TLI’s business.

Finally, in considering the relations of the parties, the 

District Court determined that that factor “counsels for a 

finding of lawful conduct, as a mere four months after it 

signed the modified Avaya One agreement, and not long after 

originally encouraging TLI to invest in its maintenance 

business, Avaya cancelled the contract, thereby jeopardizing 

[TLI’s] monetary investment and business model.” (J.A. 229-

30.) That TLI chose to compete against Avaya rather than 

accept the standard Business Partner arrangement – and 

therefore prompted Avaya to terminate their relationship –

cannot insulate TLI’s allegedly tortious conduct. Avaya’s 

supposed bad acts and predatory conduct may end up

supporting TLI’s antitrust counterclaims, but the District 

Court provided no authority to suggest that those acts 

permitted TLI to engage in hacking or fraud in retaliation for 

its termination as a Business Partner.

A straightforward application of New Jersey’s test for 

tortious interference with prospective economic advantage 

leads, we believe, to the conclusion that Avaya presented 

sufficient evidence from which a reasonable jury could 

conclude that TLI tortiously interfered with Avaya’s 

prospective business advantage. Avaya had a reasonable 
53

expectation of ongoing business with its own customers, who 

are the targets of TLI’s sales efforts. As to the “malicious 

interference” element, we hold that a jury could reasonably 

have concluded that TLI’s methods – including, as examples, 

its hacking, dishonest login requests, and use of proprietary 

information learned while an Avaya Business Partner – were 

fraudulent, dishonest, or otherwise contrary to the ethical 

standards of the industry. TLI presented no evidence that its 

actions were consistent with industry norms, and we would be 

loath to hold that there was no jury question here, even if it 

had. That leaves only the loss and causation element. The 

evidence could support a conclusion that TLI’s interference 

resulted in Avaya losing direct maintenance contracts with 

customers. Moreover, even if customers independently 

terminated their direct service contracts with Avaya, if they 

had turned to other authorized maintenance methods instead 

of using TLI – whether using a Business Partner or selfmaintaining – Avaya would still have profited because, as 

earlier noted, those methods also produced revenue for 

Avaya. Avaya thus presented sufficient evidence from which 

a jury could conclude that Avaya suffered damages, given 

that any money earned by TLI must have come from Avaya’s 

pockets to at least some extent.

In sum, the District Court improperly made inferences

in favor of the moving party, TLI, as to both contract 

interpretation and tortious interference with prospective 

economic advantage, and it failed to recognize the sufficiency 

of the evidence Avaya had adduced. If the jury had been 

allowed to draw its own inferences from the evidence, it may 

have agreed with the District Court that TLI’s conduct was

somehow permitted by Avaya’s customer contracts. But the 

jury may very well have determined that TLI’s actions were 
54

not shielded by the customer contracts and were instead

unethical, against the public interest, and ultimately tortious. 

We express no opinion on the correct answer in this dispute, 

holding only that the matter was for the jury to decide.

4. Unfair Competition

Next, we consider Avaya’s unfair competition claim. 

New Jersey law is not precise about what constitutes unfair 

competition. But while “[t]he amorphous nature of unfair 

competition makes for an unevenly developed and difficult 

area of jurisprudence,” at heart it “seeks to espouse some 

baseline level of business fairness.” Coast Cities Truck Sales, 

Inc. v. Navistar Int’l Transp. Co., 912 F. Supp. 747, 786 

(D.N.J. 1995) (interpreting New Jersey law) (citations 

omitted).

30

 New Jersey courts have deliberately kept the 

standard of liability somewhat adaptable, so that it may fit

changing circumstances: “the purpose of the law regarding 

unfair competition is to promote higher ethical standards in 

the business world. Accordingly, the concept is deemed as 

flexible and elastic as the evolving standards of commercial 

morality demand.” Ryan v. Carmona Bolen Home for 

Funerals, 775 A.2d 92, 95 (N.J. Super. Ct. App. Div. 2001)

(internal quotation marks and citations omitted) (quoting N.J. 

 

30 Other business torts – including tortious interference 

– can themselves support an unfair competition claim. Coast 

Cities, 912 F. Supp. at 786. Our conclusion that the tortious 

interference claim should have proceeded to the jury is itself 

sufficient to overturn the judgment as a matter of law on the 

unfair competition claim. Our analysis here focuses on those 

aspects of unfair competition that are distinct from tortious 

interference.
55

Optometric Ass’n v. Hillman-Kohan, 365 A.2d 956 (N.J. 

Super. Ct. Ch. Div. 1976)).

In New Jersey, unfair competition is commonly 

invoked for claims similar to misappropriation of trade 

secrets or commercial identity. An unfair competition claim, 

however, protects more information than a traditional trade 

secret claim. See Torsiello v. Strobeck, 955 F. Supp. 2d 300, 

314 (D.N.J. 2013) (“Under New Jersey law, to be judicially 

protected, misappropriated information need not rise to the 

level of the usual trade secret, and indeed, may otherwise be 

publicly available.” (quoting Platinum Mgmt., Inc. v. Dahms, 

666 A.2d 1028, 1038 (N.J. Sup. Ct. Law Div. 1995))). For 

example, in the Lamorte case, the Supreme Court of New 

Jersey reinstated summary judgment against the plaintiff’s exemployees who took their former employer’s “client names, 

addresses, phone and fax numbers, file numbers, claim 

incident dates, claim contact information, and names of the 

injured persons.” 770 A.2d at 1162. The court endorsed the 

statement “that an agent must not take ‘unfair advantage of 

his position in the use of information or things acquired by 

him because of his position as agent or because of the 

opportunities which his position affords.’” Id. at 1167 

(quoting Restatement (Second) of Agency § 387 cmt. b

(1958)). The court emphasized that “the [client-specific] 

information was available to defendants for their use in 

servicing clients on behalf of Lamorte only,” and that 

“defendants also knew that Lamorte had an interest in 

protecting that information.” Id. at 1167. Collectively, those 

facts established that the “information taken by defendants 

was confidential and proprietary information belonging to 

plaintiff.” Id. at 1168.
56

What constitutes misappropriation is somewhat vague. 

“It is not possible to formulate a comprehensive list of the 

conduct that constitutes ‘improper’ means of acquiring a trade 

secret.” Restatement (Third) of Unfair Competition § 43 cmt 

c. (1995). Generally, however, “‘[i]mproper’ means ...

include theft, fraud, unauthorized interception of 

communications, inducement of or knowing participation in a 

breach of confidence, and other means either wrongful in 

themselves or wrongful under the circumstances of the case.” 

Id. § 43. Even a legitimate business purpose will not excuse 

otherwise tortious conduct if the means used are improper. 

See Lamorte, 770 A.2d at 1171. As another court has put it, 

[t]he key to determining the misuse of the 

information is the relationship of the parties at 

the time of disclosure, and its intended use. 

This tort tends to arise where an ex-employee 

uses confidential information to assist a 

competitor. A court may look to whether the 

information is public, whether it was provided 

in the course of employment for the sole 

purpose of servicing clients, how detailed the 

information is, and whether the party using the 

information is aware of the information holder’s 

interest in protecting the information ... . 

Torsiello, 955 F. Supp. 2d at 314 (internal quotation marks 

and citations omitted).

For a plaintiff to establish damages, New Jersey law 

allows recovery under a disgorgement theory in cases of 

unfair competition. See Castrol, Inc. v. Pennzoil Quaker 

State Co., 169 F. Supp. 2d 332, 345-46 (D.N.J. 2001) (ruling 
57

that the plaintiff in that case was “entitled to disgorgement of 

[the defendant’s] profits” for its “claims under the New Jersey 

Common Law of Unfair Competition ... .”).31 Therefore, in 

place of proving specific damages, Avaya could properly seek

disgorgement of TLI’s profits from any conduct the jury 

found tortious.

We hold that Avaya presented sufficient evidence that

a reasonable jury could have concluded that there was unfair 

competition under a misappropriation theory. The District 

Court’s grant of judgment as a matter of law was thus 

erroneous. TLI gained access to proprietary information –

namely ODMC login passwords – using hacking, the 

solicitation of disloyal former Avaya employees, and 

information learned during TLI’s own time as an Avaya 

Business Partner. A jury could have determined that TLI’s 

methods of gaining Avaya’s proprietary information

constituted misappropriation. Likewise, Avaya could show

damages under either a lost profit theory or a disgorgement 

theory. Given that such a large proportion of TLI’s wellaccounted profits resulted from conduct that Avaya alleges 

was rooted in the misappropriation or proprietary 

information, the disgorgement theory may have been simple 

for the jury to apply to determine damages.

5. Fraud

 

31 See also Restatement (Third) of Unfair Competition 

§ 45 (1995) (“One who is liable to another for an

appropriation of the other’s trade secret ... is liable for the 

pecuniary loss to the other caused by the appropriation or for 

the actor’s own pecuniary gain resulting from the 

appropriation, whichever is greater ... .”).
58

We next consider Avaya’s common law fraud claim. 

Under New Jersey law,

proof of common law fraud requires the 

satisfaction of five elements: [1] a material 

misrepresentation by the defendant of a 

presently existing fact or past fact; [2] 

knowledge or belief by the defendant of its 

falsity; [3] an intent that the plaintiff rely on the 

statement; [4] reasonable reliance by the 

plaintiff; [5] and resulting damages to the 

plaintiff.

Liberty Mut. Ins. Co. v. Land, 892 A.2d 1240, 1247 (N.J. 

2006). A jury must find fraud by clear and convincing 

evidence, a standard which demands “evidence so clear, 

direct and weighty and convincing as to enable the factfinder 

to come to a clear conviction, without hesitancy, of the 

precise facts in issue.” N.J. Div. of Youth & Family Servs. v. 

I.S., 996 A.2d 986, 1000 (N.J. 2010) (quoting In re Seaman,

627 A.2d 106, 100 (N.J. 1993)).Proof of damages can be 

supported by a jury inference that a defendant’s actions 

“reduced the plaintiff’s profits, although by an uncertain 

amount.” Nappe v. Anschelewitz, Barr, Ansell & Bonello, 

477 A.2d 1224, 1233 (N.J. 1984).

Based on the trial record, there was ample evidence 

from which a reasonable jury could have found for Avaya on 

the fraud claim. The evidence for the first element –

fraudulent conduct – is straightforward. TLI had its

customers fill out forms requesting login permissions but 

instructed those customers to leave the “Business Partner”
59

component of the form blank, to be filled in later by TLI. TLI

would then insert the name of an authorized Business Partner

so that Avaya would provide the requested login information. 

TLI therefore willfully misrepresented who was making the 

request for the login credentials and acknowledged the 

materiality of that misrepresentation by confirming that it did 

not want Avaya to find out what they were doing, because 

Avaya would otherwise not provide the logins. 

The evidence also satisfies the second element, 

knowledge, in that it supports a conclusion that TLI knew it

was operating under false pretenses. The form at issue, by its 

very language, is a request from a customer to Avaya for 

delivery of information to a specifically named Business 

Partner. The form provided that the login Avaya furnished 

would allow “the Business Partner listed above ... to perform 

additions, changes, moves and/or upgrades.” (J.A. 5313.) 

Yet TLI submitted the form knowing full well that the 

“Business Partner listed above” would not be performing 

those tasks, because TLI would be.

As to the third element, the reasonableness of relying 

on the representation, TLI filled out the form with the name 

and information of an existing, authorized Business Partner. 

A jury could find that Avaya acted reasonably by providing 

access information when it believed such access was being 

delivered to a provider with whom it had an existing contract.

The final element, damages, is what most concerned 

the District Court. As established above, however, Avaya 

presented strong evidence – sufficient for the clear and 

convincing standard – that every dollar made by TLI in its 

maintenance of Avaya products was necessarily to some 
60

degree at Avaya’s expense. A jury could have reasonably 

concluded that each time TLI used a fraudulently obtained 

login to win or keep a maintenance contract, that cost Avaya

profit. As the Supreme Court of New Jersey confirmed in 

Nappe, such an inference is enough to sustain a finding of 

damages, even where the exact amount may be uncertain. 

477 A.2d at 1233.

Avaya thus presented sufficient evidence to send the 

fraud claim to the jury, based on TLI’s deceptive login

requests.
61

6. Breach of Contract

Finally, we turn to Avaya’s breach of contract claims 

against TLI. As developed at trial, Avaya contended that TLI

breached two contracts: the 1998 dealer agreement between 

Lucent and TLI, and the 2003 Avaya One agreement that was 

effective until TLI’s participation as a Business Partner was 

terminated.

32

 In both cases, the District Court did not contest 

the existence of the contract or damages, but instead granted 

judgment as a matter of law on the ground that “Avaya ha[d] 

failed to introduce evidence from which a reasonable jury 

could find that TLI breached either of the contracts.” (J.A. 

210.) Once again, there is not a sound basis for that holding.

a. 1998 Dealer Agreement

The 1998 contract’s choice of law provision provides 

that it is governed by Delaware law. In Delaware, the 

elements of a breach of contract claim are: “[1] the existence 

of the contract, whether express or implied; [2] the breach of 

an obligation imposed by that contract; and [3] the resultant 

damage to the plaintiff.” VLIW Tech., LLC v. HewlettPackard Co., 840 A.2d 606, 612 (Del. 2003).

 

32 Whereas the customer contracts referenced above in 

Part II.A.2 were for PBX systems, the dealer agreements 

between Avaya and TLI are worded broadly enough to reach 

both the PBX and PDS markets. Insofar as Avaya’s breach of 

contract allegations rely primarily on improper access to 

ODMCs and MSPs, however, the breach of contract claim is 

principally focused on the larger PBX market.
62

The signature page of the 1998 agreement evidences a 

contract between Lucent (Avaya’s predecessor) and TLI

(referred to in the contract as the “Dealer”), satisfying the first 

element of the cause of action. Section 2.8 of the 1998 

agreement provides, in part, as follows:

Dealer may not market or sell Lucent Products 

to any Lucent BCS Global Account, or ... the 

United States Government, and will use its best 

efforts to ensure that Dealer does not market to

present direct customers of Lucent who are 

under warranty or with existing maintenance 

contracts for Lucent products or to any entity 

that is considering a proposal from Lucent for 

products or maintenance services, except that 

Dealer may respond to a request for competitive 

bids, proposals, or quotations even if Lucent is 

also responding.

(J.A. 5905 (emphases added).)

Avaya claims that TLI breached that “best efforts”

clause by marketing and selling maintenance services to 

existing Lucent/Avaya customers. At trial, Douglas Graham 

admitted that TLI “marketed ... to existing Avaya 

maintenance customers” in 2001, while the firm “was 

operating under the terms of the 1998 Lucent dealer 

agreement.” (J.A. 2704.) He also acknowledged a particular 

client to whom TLI had “marketed ... maintenance to replace 

existing Avaya maintenance.” (J.A. 2705.)

In spite of what is arguably a clear violation of § 2.8 of 

the agreement, the District Court concluded that TLI’s 
63

conduct “does not constitute a breach” because the Court 

interpreted § 2.8 to prohibit only the marketing of “Lucent 

Products,” a defined term that did not include maintenance. 

(J.A. 212.) That, however, is an overly cramped 

interpretation of the provision. Although a jury could perhaps 

import the “Lucent Products” language into the “best efforts”

clause, that clause could just as easily support an 

interpretation that generally bars the marketing of 

maintenance to Lucent/Avaya customers. Indeed, the best 

efforts clause specifically prohibits marketing to 

Lucent/Avaya customers “with existing maintenance 

contracts ... or to any entity that is considering a proposal 

from Lucent for ... maintenance services,” which strongly 

suggests that maintenance was part of the prohibition. (J.A. 

5905.) The District Court therefore erred in assuming that 

“no reasonable jury” could have found a breach of § 2.8. 

(J.A. 213.)

As to the final element, damages, we conclude that the 

same analysis for the earlier causes of action would have 

supported a jury finding that any profit that TLI gained by its 

breach of contract must have come, at least in part, at Avaya’s 

expense. Therefore, we conclude that a jury could reasonably 

have found all three elements of a breach of contract, and

judgment as a matter of law was not proper.

b. 2003 Avaya One Agreement

The choice of law clause in the Avaya One agreement, 

§ 18.1, provides that New York law governs. Under New 

York law, the elements of a breach of contract claim are

similar to Delaware’s: “[1] the existence of a contract, [2] the 

plaintiff’s performance pursuant to the contract, [3] the 
64

defendant’s breach of his or her contractual obligations, and 

[4] damages resulting from the breach.” Neckles Builders, 

Inc. v. Turner, 986 N.Y.S. 2d 494, 496 (N.Y. App. Div. 

2014).

The signature page of the Avaya One agreement 

evidences a contract between Avaya and TLI, satisfying the 

first element. Section 7.3 of the Avaya One agreement 

provides, in part, as follows:

[TLI] agrees not to reverse engineer, decompile 

or disassemble software furnished to it in object 

code form or permit any third party to do so. 

For any software included as part of the 

Licensed Materials which inherently includes 

the capability of being remotely enabled, [TLI] 

expressly agrees that it shall not enable, or 

permit or assist any third party to enable, such 

features or capabilities without Avaya’s express 

written permission.33

(J.A. 6953.) That obligation was clearly intended to survive

the termination of the Avaya One agreement.34 Both an 

 

33 As an Avaya executive testified at trial, the purpose 

of that provision was “to protect [Avaya’s] software assets 

going forward if there is information that a Business Partner 

gets, [and] also to make sure that nothing gets turned on 

subsequent[ to] termination.” (J.A. 2116.)

34 Section 17.6 of the agreement provided that “the 

termination of the Agreement shall not prejudice or otherwise 

affect ... any ... obligations of the parties, such as those arising 
65

Avaya executive and a systems engineer testified that MSPs 

and the DADMIN logins were capable of being remotely 

enabled.

The agreement also included, at § 4.1, a general 

morality clause that bound TLI for the duration of the 

agreement:

[TLI] shall: (a) conduct its business in a manner 

that reflects favorably on the Products and on 

the good name, goodwill and reputation of 

Avaya; (b) avoid deception, misleading or 

unethical practices; and (c) use best efforts to 

promote, market, and further the interest of 

Avaya, its name and Products.

(J.A. 6951 (emphases added).)

Although Avaya’s performance – the second element 

of a breach of contract claim – was not part of the District 

Court’s analysis, the record provides sufficient evidence for a 

jury to conclude that Avaya did perform. TLI was operating 

as a Business Partner under the Avaya One agreement from

its execution until the business relationship between the 

parties was terminated. Douglas Graham acknowledged that 

the relationship was “mutually beneficial” and that, “[a]s an 

Avaya Business Partner ... TLI was authorized by Avaya to 

resell certain Avaya products and services.” (J.A. 2699.) 

 

under [Section 7], which by their nature continue beyond 

termination of the Agreement and which shall survive such 

termination.” (J.A. 6959.)
66

Indeed, Avaya equipment was “by far [the] leading 

manufacturer product that [TLI] sold.” (J.A. 2700.)

The District Court’s analysis focused on the third 

element – the actual breach of a contractual obligation. 

Avaya’s claim for breach of § 7.3 is straightforward. Insofar 

as MSPs and DADMINs were “licensed Materials which 

inherently include[d] the capability of being remotely 

enabled,” a jury could find that TLI breached its contractual 

obligations when it “enable[d] ... or assist[ed] any third party 

to enable, such features or capabilities without Avaya’s 

express written permission.” (J.A. 6953.) Even though the 

District Court acknowledged that the meaning of those terms 

was “less than perfectly clear,” it nonetheless concluded that

the term “features and capabilities” unambiguously excluded

MSPs and DADMIN logins. (J.A. 218-19.) Yet the 

activation of MSPs and use of DADMIN logins allowed 

customers to perform remote maintenance, for which 

customers were willing to pay additional licensing fees, 

suggesting that the customers considered them to be features 

or capabilities. Even if a reasonable jury could have agreed 

with the District Court’s reading of the contract, there was at 

least sufficient ambiguity in the Avaya One agreement that 

the jury could have seen it the other way and agreed with 

Avaya that MSPs and DADMIN logins are “features and 

capabilities,” the unauthorized activation of which by TLI

amounted to a breach of contractual obligations. 

As to the morality clause in § 4.1, Avaya contended

that TLI breached its obligations when it began its allegedly

unethical business practices during the term of the contract, in 

preparation for soliciting maintenance customers away from 

Avaya. Those activities included hacking logins and enlisting 
67

Business Partners to obtain ODMC access. As early as May 

2003, while still bound by the Avaya One agreement, TLI

solicited Creswick to “pull ... password[s].” (J.A. 2281.) In 

September, during the contract term, TLI began to seek a

“discreet Avaya Business Partner ... [to] submit DADMIN 

request forms on our behalf.” (J.A. 5813.) A reasonable jury 

could have concluded that, by engaging Creswick and 

recruiting Business Partners to submit deceptive DADMIN 

login request forms, TLI was violating its contractual 

obligations to “avoid deception [and] misleading or unethical 

practices” and to “use best efforts to promote, market, and 

further the interest of Avaya.” (J.A. 6951.)

Analysis of damages – the final element of the cause 

of action – was not central to the District Court’s grant of 

judgment as a matter of law. However, the analysis for 

damages is as straightforward as for the tort claims, because

PBX and PDS maintenance business gained by TLI as a result 

of its breach must have come, to some extent, at Avaya’s 

expense.

7. Conclusion

Based on the foregoing analysis, we conclude that the 

District Court’s grant of judgment as a matter of law was 

erroneous for the four affirmative common law claims that 

Avaya addresses in this appeal.

35

 We will therefore vacate 

 

35 Although our dissenting colleague’s “assessment of 

Avaya’s case-in-chief is the same as the District Court’s” 

(Dissenting Op. at 3-4), he has sufficient “doubt about the 

propriety of the District Court’s decision” that he focuses his 

opinion on other issues (id. at 4). We therefore let our 
68

the District Court’s judgment and remand for further 

proceedings on those four claims. That does not, however, 

end our inquiry. Given the District Court’s instruction to the 

jury that all of TLI’s conduct was lawful, we must also 

consider whether the several errors associated with the 

District Court’s handling of the common law claims also

infected the remainder of the trial.

B. Prejudice on the Antitrust Verdict

Avaya, of course, argues that the error did spill over 

into the antitrust verdict. It presents three bases for

concluding that the judgment as a matter of law prejudiced 

the jury’s consideration of the antitrust counterclaims: first, it 

undermined Avaya’s defense that its responses to TLI’s 

conduct were reasonable and pro-competitive; second, it lent

false credence to TLI’s assertion that Avaya knew there was 

no truth to its letters (the so-called “FUD” letters described 

above) telling customers that using ISPs would be unlawful;

and third, it led the District Court to wrongly restrict Avaya’s 

cross-examinations of TLI witnesses. We agree that those

problems, all resulting from the erroneous grant of judgment 

as a matter of law, did indeed likely affect the antitrust 

verdict.

1. General Prejudice to Avaya’s 

Antitrust Defense

All of the antitrust counterclaims against Avaya were 

presented under the “rule of reason,” which gives effect to the

 

analysis of the District Court’s error speak for itself as a 

response to that portion of the Dissent.
69

Supreme Court’s instruction that the Sherman Act “only 

means to declare illegal any [restraint] which is in 

unreasonable restraint of trade.” United States v. TransMissouri Freight Ass’n, 166 U.S. 290, 327 (1897) (emphasis 

added). “Under this rule, the factfinder weighs all of the

circumstances of a case in deciding whether a restrictive 

practice should be prohibited as imposing an unreasonable 

restraint on competition.” Cont’l T. V., Inc. v. GTE Sylvania 

Inc., 433 U.S. 36, 49 (1977). Therefore, limitations on

Avaya’s ability to explain the reasonableness of its actions 

had the potential to harm its defense.

For the Sherman Act § 2 monopolization claims, for 

example, TLI had to establish that Avaya’s allegedly

predatory conduct was performed with monopolistic intent. 

“To prevail on an attempted monopolization claim under § 2 

of the Sherman Act, a plaintiff must prove that the defendant 

(1) engaged in predatory or anticompetitive conduct with (2) 

specific intent to monopolize and with (3) a dangerous 

probability of achieving monopoly power.” Queen City 

Pizza, Inc. v. Domino’s Pizza, Inc., 124 F.3d 430, 442 (3d 

Cir. 1997) (emphasis added) (internal quotation marks 

omitted). “Liability turns ... on whether valid business 

reasons can explain [a defendant’s] actions.” Eastman Kodak 

Co. v. Image Tech. Servs., Inc., 504 U.S. 451, 483 (1992) 

(internal quotation marks omitted). As the District Court 

instructed the jury, “acts or practices that result in the 

acquisition or maintenance of monopoly power must 

represent something more than the conduct of business that is 

part of the normal competitive process” and must be actions 

that are “taken for no legitimate business reasons.” (J.A. 

621.) Insofar as Avaya was limited in explaining why its 
70

actions were not predatory or lacked a monopolistic intent, 

those limitations would of course harm its defense.36 

The District Court’s instructions in light of its 

erroneous Rule 50 decision on the common law claims may 

well have affected the jury’s assessment of the reasonableness 

and purpose of Avaya’s actions. The jury was prevented 

from deciding the antitrust claims and the common law 

claims in concert and from evaluating whether TLI’s 

allegedly tortious conduct provided a legitimate business 

justification for the things Avaya’s did. Specifically, the 

Court instructed the jury that

Avaya’s claim[s] against TLI[] ... have been 

resolved and are no longer before you. ... 

In Avaya’s direct claims against all the 

defendants, Avaya asserted that [TLI’s] use of 

 

36 Moreover, as we explain in more detail below, under 

the specific theory of antitrust liability pressed by TLI, if 

Avaya’s sales contracts had established that using 

independent service providers was prohibited, then any 

remedy to infirmities in that arrangement would lie “in 

contract, not under the antitrust laws.” Queen City Pizza, 124 

F.3d at 441. Therefore, to the extent that Avaya’s 

interpretation of its customer contracts was correct, that 

would have added a very potent weapon to Avaya’s arsenal to 

combat the specific theory of antitrust liability argued by TLI. 

But Avaya was precluded from making that argument 

because the District Court erroneously adopted a definitive 

construction of those contracts, as a matter of law, in service 

of its Rule 50 decision.
71

and access to the maintenance software 

embedded in the Avaya PBXs and PDSs, such 

as the on-demand maintenance commands, was, 

for a variety of reasons, unlawful. I now 

instruct you that [TLI’s] use of and access to 

such maintenance software may not be 

considered by you as unlawful when deciding 

[TLI’s] claims against Avaya asserted in the 

counterclaim. To the extent Avaya has alleged 

that TLI[] engaged in illegal or unlawful 

conduct, in connection with its business 

operations, such allegations should be 

disregarded.

(J.A. 4739 (emphasis added).)

Not only did the District Court so instruct the jury, but 

TLI itself repeatedly emphasized that instruction in its closing 

argument in order to undercut Avaya’s defense that there was 

a reasonable business justification for its actions. Consider 

this passage from TLI’s summation:

When TLI started to compete with Avaya, it 

had the right to do so; and, yes, [the District 

Court] will instruct you tomorrow, you should 

not consider TLI’s ... use of and access to the 

maintenance software that’s embedded in these 

Avaya PBX systems and dialers, do not 

consider it in any way unlawful. And this is 

critically important for you to understand. You 

are not to consider TLI’s actions in that regard 

unlawful.
72

(J.A. 4732.)37

The District Court’s erroneous instruction, combined 

with TLI’s repeated hammering of the point, highlights how 

important the lawfulness or unlawfulness of TLI’s actions 

could have been to the jury’s deliberations. Avaya’s entire 

affirmative case alleged that TLI’s conduct was tortious and 

in breach of contractual obligations. If true, Avaya’s 

defensive response could be seen as substantially more 

reasonable, and its intentions substantially less predatory. By 

instructing the jury that it could not consider TLI’s conduct to 

be unlawful – an instruction premised on the flawed grant of 

judgment as a matter of law – the District Court improperly 

prevented the jury from weighing Avaya’s defenses in light of 

the rule of reason standard for both the § 1 and § 2 Sherman 

Act claims.38

 

37 At least twice more, TLI strongly emphasized the 

importance of the District Court’s jury instructions. For 

instance, it told the jury that “[w]hen TLI started to compete 

with Avaya, it had every right to do so. TLI’s use and access 

to maintenance software that’s embedded in these systems, 

you should not consider to be unlawful. You will hear that 

instruction from the judge tomorrow.” (J.A. 4733.) Later, it 

reminded the jury: “Again, you will be instructed by the 

Court tomorrow, that you are not to consider TLI’s access to 

or use of the maintenance software, including MSPs and 

ODMs, called ODMCs and maintenance software 

permissions, as in any way unlawful use of that maintenance 

software.” (J.A. 4734.)

38 As we read the Dissent, its objection to our 

conclusion comes down to its premise that “Avaya had ample 
73

 

opportunity to present the jury with legitimate and 

procompetitive defenses for its actions.” (Dissenting Op. at 

10.) To be sure, Avaya mounted a vigorous defense 

notwithstanding the limitations it faced as a result of the Rule 

50 ruling, but we lack the Dissent’s confidence that it is 

“highly probable that the error did not affect the outcome of 

the case.” Glass v. Phila. Elec. Co., 34 F.3d 188, 191 (3d Cir. 

1994) (quotation marks and citation omitted). A jury may 

well have evaluated Avaya’s conduct differently if Avaya 

were simply enforcing its contractual rights or combating 

tortious activity, as TLI itself recognized by its repeated 

emphasis in its summation that its actions could not be 

considered unlawful. The Dissent betrays the importance of 

the lawfulness determination when it says that Avaya’s 

“defenses did not depend on whether TLI’s conduct was so 

egregious as to be against the law.” (Id.) The special 

egregiousness of unlawful conduct is precisely the argument 

that Avaya wanted to make – and was deprived from making 

– to the jury.

This is also where the Dissent’s “David and Goliath” 

analogy breaks down. Avaya was certainly the bigger 

competitor, but TLI was no plucky little company armed only 

with the business equivalent of a sling and a few stones. It 

was a sophisticated and aggressive company, which, at least 

according to Avaya and a great deal of the evidence at trial, 

was prepared to, and did, engage in what even the Dissent 

acknowledges were “deceitful and/or unethical” business 

methods. (Id. at 2.) Since those methods were such that the 

jury could have found them unlawful, the Rule 50 error was

not harmless.
74

2. “Fear, Uncertainty, and Doubt”

Letters

Beyond the general infection of the jury’s 

consideration of the reasonableness of Avaya’s actions, the 

District Court’s grant of judgment as a matter of law also 

undercut a specific portion of Avaya’s antitrust defense.

Among the evidence put forward by TLI to prove 

predatory conduct were the FUD letters. Those letters told 

customers that MSPs “are not available to customers of 

Unauthorized Service Providers,” that “Unauthorized 

Maintenance Service Providers do not have rights to receive 

[MSP] benefits, nor do they have rights to use Avaya logins,”

and that “[u]se of MSPs, or any Avaya Login ... without a 

license from Avaya, is an infringement of Avaya’s 

intellectual property rights.” (J.A. 7303-04.)

Whether those letters could constitute monopolistic 

conduct turned on whether they were true. As the District 

Court instructed the jury, “the law does not allow [TLI’s]

injury to be based on ... Avaya’s dissemination of truthful 

statements.” (J.A. 621.) The jury’s assessment of the letters’

truthfulness was surely influenced by the District Court’s

instruction that TLI’s “use of and access to such maintenance 

software may not be considered by you as unlawful” and that 

“[t]o the extent Avaya has alleged that TLI[] engaged in 

illegal or unlawful conduct, in connection with its business 

operations, such allegations should be disregarded.” (J.A. 

615.)

That instruction all but told the jury that the letters 

were false in their allegation that TLI’s access was unlawful. 
75

TLI’s trial counsel then connected those closely adjacent dots

when he took advantage of the instruction to argue to the jury 

that Avaya’s FUD letters were untruthful and therefore 

monopolistic:

Even though it acknowledged that it had no 

legal basis to do so,[39] Avaya sent FUD letters 

to TLI’s customers ... .

As the Court will instruct you tomorrow, you 

are not to consider ... TLI’s access to the 

maintenance commands or the maintenance 

software as unlawful, but Avaya’s FUD 

campaign simply did not convey truthful 

information.

(J.A. 4736.)40

 

39 We have been shown nothing in the record 

suggesting that Avaya acknowledged that it had “no legal 

basis” to send the so-called FUD letters. To the contrary, 

Avaya’s entire affirmative case relied in large part on a belief 

that TLI’s unauthorized provision of maintenance services did 

lead customers to breach their contracts with Avaya. On 

appeal, Avaya continues to argue that the FUD letters were 

truthful. 

40 The Dissent contends that “[e]ven if the jury had not 

been instructed that unauthorized access to Avaya software 

was not illegal, it is unlikely that it would have reached a 

different verdict.” (Dissenting Op. at 13.) The Dissent says 

that Avaya seemed to concede that the FUD letters included 

some “over-the-top” prose (id.), but be that as it may, the 
76

3. Interference with Defense and CrossExamination

Avaya also contends that the District Court’s grant of 

judgment as a matter of law hindered its ability to present 

evidence in its defense against the antitrust claims. It points 

to two examples in particular.

First, during Avaya’s cross-examination of TLI’s 

CEO, Avaya’s counsel asked about how TLI got access to 

Avaya brand PBX systems. At a sidebar, the District Court 

told counsel that, “[i]f you’re trying to tell the jury they’re 

illegal, I have a problem with that.” (J.A. 4440.) The Court 

did allow the line of questions but under the restriction that 

counsel could not imply that TLI’s actions were unlawful.

Second, when Avaya was examining its own 

economics expert, it presented evidence that restrictions it 

placed on its Business Partners actually ended up “clearing

the field” in a way that advantaged TLI competitively.41 

 

degree to which those letters were legitimate surely depended 

on the truth of the legal assertions in them. If Avaya was 

correct in its assertions that unauthorized access was unlawful 

– a question taken away from the jury by virtue of the Rule 50 

decision – then the letters arguably contain defensible 

statements of law. That could make a world of difference to a 

jury in evaluating the truthfulness and competitive legitimacy 

of the letters.

41 The basis for the field-clearing argument was that 

because Avaya restricted its Business Partners from 

competing with it for maintenance business, when TLI sought 
77

Before the Rule 50 decision, the expert was planning to 

include analysis predicated on the illegality of TLI’s conduct, 

but – after the judgment as a matter of law – the District 

Court reminded counsel in a sidebar to “[s]tay away from 

trying to ... contradict anything I’ve already decided,” in 

reference to the Rule 50 decision. (J.A. 4587.)

Those specific examples speak to a broader point. 

They highlight that, if Avaya had been able to argue that 

TLI’s conduct was unlawful, that argument would likely have 

been a key and repeated part of its defense to the antitrust 

claims. Each argument by TLI’s counsel to the contrary 

could have been met with a forceful response. Avaya’s claim 

that it was “hamstrung in its ability to justify its supposedly 

anticompetitive conduct” is therefore a fair and accurate one. 

(Third Step Br. at 19.)42

 

to lure customers from Avaya, it did not have to compete with 

any of those Business Partners, who were precluded from 

seeking that business. In that way, the expert opined, TLI 

benefited from much of the allegedly anticompetitive conduct 

over which it filed suit because that conduct restricted TLI’s 

competition as much as it did Avaya’s.

42 The Dissent suggests that any limitations placed on 

Avaya’s defense as a result of the Rule 50 ruling were merely 

“rhetorical,” and that being able to argue the illegality of 

TLI’s conduct “would not have changed the substance of 

Avaya’s procompetitive-justification argument.” (Dissenting 

Op. at 12.) We disagree. It is one thing to explain to a jury 

that sharp-elbowed tactics were taken to retaliate against 

aggressive but completely lawful activities of a competitor. It 

is altogether different to be able to argue that the restraints of 
78

4. Harmless Error Analysis

Having concluded that the judgment as a matter of law 

on Avaya’s common law claims was an error, and that that 

error likely affected the jury’s consideration of the antitrust 

claims, we must now consider whether that effect was 

harmless. “An error will be deemed harmless only if it is 

highly probable that the error did not affect the outcome of 

the case,” and, in that same vein, an error cannot be said to be

harmless unless there is a high probability “that the result 

would have been the same had the jury been correctly 

instructed.” Hill v. Reederei F. Laeisz G.M.B.H., Rostock, 

435 F.3d 404, 411 (3d Cir. 2006) (internal quotation marks 

omitted). We have held, when interpreting this “highly 

probable” standard, that an error is not harmless if it could 

have “reasonably ... affected the outcome of the trial,” id. at 

411, or if the jury “quite possibly” relied on an erroneous 

instruction, see Hirst v. Inverness Hotel Corp., 544 F.3d 221, 

228 (3d Cir. 2008).

In this case, we cannot say that it was “highly 

probable” that the District Court’s erroneous Rule 50 decision 

and resulting erroneous jury instruction about the lawfulness 

of TLI’s conduct did not affect the outcome of the antitrust 

claims.43 On the contrary: we think it probable that they did

 

trade at issue were necessary to enforce Avaya’s contractual 

rights and to deter fraudulent and tortious interference with 

Avaya’s legitimate business interests.

43 The Dissent would not even reach the question of 

whether the District Court’s erroneous Rule 50 order infected 

the antitrust verdict, on the ground that Avaya forfeited any 
79

affect the outcome. The judgment as a matter of law, the 

concordant limitations on Avaya’s antitrust defense, and the 

ultimate jury instruction about lawfulness all seriously 

hampered Avaya’s ability to argue that its conduct was a 

 

argument of spill-over prejudice. That position seems to us to 

result from the Dissent’s separate (and, in our estimation, 

incorrect) view that any prejudicial effect on the jury’s 

consideration of the antitrust counterclaims was tangential 

and minor. We agree with our dissenting colleague that, “[i]f 

a claim of error is unaccompanied by developed argument, it 

is forfeited.” (Dissenting Op. at 6 (internal quotation marks 

and citation omitted).) In this case, however, the claim of 

error – that the District Court’s Rule 50 decision was 

improper – was indisputably fully briefed and argued. 

Avaya’s position that the erroneous Rule 50 ruling tainted the 

antitrust verdict was made as a request for a particular form of 

relief to correct that error. The request was brief but the 

brevity is unsurprising, given how inextricably linked 

Avaya’s rule of reason antitrust defense was to its claims that 

TLI’s actions were unlawful. Avaya could reasonably have 

expected TLI’s answer simply to contest Avaya’s claim of 

error as to the Rule 50 ruling, as TLI in fact did contest at 

length. As it happened, however, TLI also raised a separate 

argument, as an alternative basis to affirm, that any error was 

harmless as to the antitrust verdict. Avaya then provided a 

rebuttal to that assertion of harmlessness with exactly the kind 

of responsive argumentation we would expect in a reply brief. 

Cf. Becker v. ARCO Chem. Co., 207 F.3d 176, 205 (3d Cir. 

2000) (considering and rejecting a harmless error argument 

raised for the first time by the appellee at oral argument and 

only then countered by the appellant).
80

justifiable and reasonable response to TLI’s underhanded 

methods of acquiring Avaya’s proprietary business 

information. That TLI used the District Court’s errors to 

pound home its own case only compounded the problem and 

further undermines our confidence in the verdict. Because

the errors “quite possibly” affected the judgment, we must 

vacate it. Hirst, 544 F.3d at 228.

44

C. Antitrust Issues

Avaya does not simply seek vacatur, however. It 

argues that we should reverse the judgment and hold that it is 

entitled to judgment on the antitrust counterclaims because 

TLI adduced insufficient evidence to support them. We begin 

our analysis of that argument by reviewing how the antitrust 

laws treat product tying. We then turn to Avaya’s claimspecific contentions and conclude that the PBX attempted 

monopolization counterclaim is legally invalid for PBXs sold 

after 2008 and that the PDS tying counterclaim must fail as a 

matter of law.

1. Tying in Antitrust Law

TLI’s antitrust counterclaims against Avaya are based 

on an allegedly unlawful use of tying to restrain and 

monopolize the market for PBX and PDS maintenance

services. “[A] tying arrangement may be defined as an 

agreement by a party to sell one product [or service] but only 

 

44 The parties also dispute the propriety of the 

injunctive relief ordered by the District Court. Because we 

will vacate the verdict and judgment of liability, we must also 

vacate the resulting injunction.
81

on the condition that the buyer also purchases a different (or 

tied) product [or service], or at least agrees that he will not 

purchase that product [or service] from any other supplier.” 

Northern Pacific Ry. Co. v. United States, 356 U.S. 1, 5-6 

(1958). For a pair of products or services to be distinct, and 

therefore capable of being tied together, “there must be 

sufficient consumer demand so that it is efficient for a firm to 

provide [them] separately.” Kodak, 504 U.S. at 462. Tying 

can support a Sherman Act claim either under § 1, as an 

unlawful restraint on trade, or under § 2, as an unlawful act of 

monopolization or attempted monopolization. See Phillip E. 

Areeda & Herbert Hovenkamp, Fundamentals of Antitrust 

Law (“Fundamentals”) § 17.01, at 17-13 (4th ed. Supp.

2015); see also 15 U.S.C. §§ 1-2.45 Under the antitrust 

theories presented by TLI, Avaya unlawfully tied its PBX and 

PDS systems to maintenance services by conditioning access 

to equipment and software on the purchase of such services 

from Avaya or its Business Partners.

Not all ties are illegal, however. To declare otherwise

would risk making practically every product the subject of an 

antitrust suit, because, in theory at least, most any product can 

be deconstructed into component parts that could be sold 

separately. For that reason, “[i]t is clear ... that every refusal 

to sell two products separately cannot be said to restrain 

 

45 TLI secured verdicts against Avaya under both §§ 1 

and 2 of the Sherman Act. Section 1 declares illegal “[e]very 

contract, combination ..., or conspiracy, in restraint of trade or 

commerce.” 15 U.S.C. § 1. Section 2 makes unlawful any 

act to “monopolize, or attempt to monopolize, or combine or 

conspire ... to monopolize any part of the trade or commerce.” 

15 U.S.C. § 2.
82

competition.” Jefferson Par. Hosp. Dist. No. 2 v. Hyde, 466 

U.S. 2, 11 (1984) partially abrogated on other grounds by Ill. 

Tool Works Inc. v. Indep. Ink, Inc., 544 U.S. 28 (2006). 

Instead,

the essential characteristic of an invalid tying 

arrangement lies in the seller’s exploitation of 

its control over the tying product to force the 

buyer into the purchase of a tied product that 

the buyer either did not want at all, or might 

have preferred to purchase elsewhere on 

different terms. When such “forcing” is present, 

competition on the merits in the market for the 

tied item is restrained and the Sherman Act is 

violated.

Id. at 12. Therefore, “[w]hen ... the seller does not have ... the 

kind of market power that enables him to force customers to 

purchase a second, unwanted product in order to obtain the 

tying product, an antitrust violation can be established only 

by evidence of an unreasonable restraint on competition in the 

relevant market.” Id. at 17-18.

In this case, nobody contends that the primary market 

for PBX and PDS systems is anything other than competitive, 

or that Avaya’s main competitors in that market – large firms 

such as Cisco, Siemens, and Microsoft – cannot use prices to

discipline Avaya in that primary market. As to the primary 

market, then, TLI’s position is not that Avaya’s “share of the 

market is high” or that it “offers a unique product that 

competitors are not able to offer.” Id. at 17. Rather, TLI has 

proceeded under a specialized theory of tying developed in a 

Supreme Court case called Eastman Kodak Company v. 
83

Image Technical Services, Inc., 504 U.S. 451 (1992). Review 

of the Kodak opinion and our Court’s elaboration of its 

principles is essential, then, because TLI’s counterclaims rise 

or fall based on whether they comport with a Kodak theory of 

antitrust liability.

a. The Kodak Theory of Antitrust 

Tying Liability

Kodak presented the Supreme Court with a situation

similar to the one before us, consisting of a primary market 

for complex durable goods and an aftermarket for 

maintenance service. Kodak sold photocopier equipment, as 

well as maintenance service and replacement parts. Id. at 

455. The parts were of proprietary design and were not 

interchangeable with other manufacturers’ parts. Id. at 456-

57. Kodak sold both parts and service, using different 

contract arrangements to charge different prices to different 

customers. Id. at 457. When Kodak attempted to prevent the 

sale of its parts to independent maintenance service providers 

– thereby restricting their ability to service Kodak machines –

a group of those independent providers filed suit, alleging 

unlawful tying of parts and service in violation of §§ 1 and 2 

of the Sherman Act. Id. at 458-59.

On ultimate appeal from the district court’s grant of 

summary judgment for Kodak, the Supreme Court ruled that 

the plaintiffs had put forward a strong enough case to proceed 

to trial. The Court accepted Kodak’s argument that the 

primary equipment market was competitive, id. at 465 n.10, 

but it nonetheless ruled that the plaintiffs could proceed under 

a § 1 tying theory of antitrust liability. It refused to endorse 

Kodak’s assertion that competition in the primary market 
84

would necessarily discipline the maintenance aftermarket,

preferring not to adopt “[l]egal presumptions that rest on 

formalistic distinctions rather than actual market realities.” 

Id. at 466. Instead, the Court insisted on a context-specific 

factual analysis of whether “the equipment market does 

discipline the aftermarkets so that [both] are priced 

competitively overall, or that any anti-competitive effects of 

Kodak’s behavior are outweighed by its competitive effects.” 

Id. at 486. “The fact that the equipment market imposes a 

restraint on prices in the aftermarkets” does not, on its own,

“disprove[] the existence of power in those markets.” Id. at 

471 (citation omitted).

In explaining how a seller facing a competitive 

primary equipment market could nonetheless exercise market 

power in the parts and maintenance aftermarkets, the Court 

expounded a theory whereby high information and switching 

costs would allow the seller to exploit customers who had 

already purchased the equipment and were then “locked in” to 

the aftermarkets. Id. at 476. It explained that “[l]ifecycle 

pricing of complex, durable equipment is difficult and 

costly,” and that the information needed for such lifecycle 

pricing “is difficult – some of it impossible – to acquire at the 

time of purchase.” Id. at 473. Because “[a]cquiring the 

information is expensive[, i]f the costs of service are small 

relative to the equipment price, ... [consumers] may not find it 

cost efficient to compile the information.” Id. at 474-75. 

Additionally, competitors may not provide that information, 

either because they do not have it themselves or because they 

may wish to collusively engage in the same behavior with 

their own customers so that “their interests would [not] be 

advanced by providing such information to consumers.” Id.
85

at 474 & n.21 (citation omitted). Customers’ information 

limitations could be paired with high switching costs so that

consumers who already have purchased the 

equipment, and are thus “locked in,” will 

tolerate some level of service-price increases 

before changing equipment brands. Under this 

scenario, a seller profitably could maintain 

supracompetitive prices in the aftermarket if the 

switching costs were high relative to the 

increase in service prices, and the number of 

locked-in customers were high relative to the 

number of new purchasers.

Id. at 476. In other words, tying liability may exist in an 

aftermarket where the seller can exploit customers who have 

already purchased the equipment and cannot easily shift to 

another brand.

The Supreme Court also posited that the threat of 

anticompetitive exploitation of aftermarkets in light of high 

information and switching costs would be particularly severe 

in cases where the seller could engage in price discrimination,

i.e., charging different prices to different types of consumers. 

With respect to information costs, “if a company is able to 

price discriminate between sophisticated and unsophisticated 

consumers, the sophisticated will be unable to prevent the 

exploitation of the uninformed.” Id. at 475. With respect to 

switching costs, “if the seller can price discriminate between 

its locked-in customers and potential new customers,” it can

exploit locked-in customers with supracompetitive

aftermarket prices while simultaneously charging low prices 

to new customers. Id. at 476. Those forms of price 
86

discrimination could allow a savvy monopolistic seller to 

create a market tiered like a pyramid. While charging lower 

lifecycle prices to sophisticated customers in the primary 

market, the seller could dupe low-information customers into 

paying a deceptively low upfront cost for the equipment, to 

lock them in due to high switching costs and set them up for 

supracompetitive prices in the aftermarkets for parts and 

service. In the meantime, it could continue to make a normal 

competitive profit from sales to sophisticated new customers 

by charging them lower lifecycle prices through lower-priced

long-term contracts. Price discrimination thus allows a seller 

to run a multi-tier market dividing more sophisticated 

consumers from less sophisticated ones, while lock-in snares

the unsophisticated customers once the proverbial trap has 

been sprung.

Not only was that theory sufficient to support § 1 

liability, the Court also held that it could support § 2 liability 

for unlawful monopolization. In that analysis, the Court 

incorporated the § 1 analysis for whether the equipment

market and the service and parts aftermarkets were distinct 

for antitrust purposes. Id. at 481. It was comfortable with 

defining a single-brand market as relevant for antitrust 

purposes as long as such a market was justified by “the 

choices available to ... equipment owners,” as “determined ... 

after a factual inquiry into the ‘commercial realities’ faced by 

consumers.” Id. at 482 (quoting United States v. Grinnell 

Corp., 384 U.S. 563, 572 (1966)). A successful plaintiff had 

to prove more, however, to succeed on a § 2 claim, because 

simply proving monopoly power in the aftermarket was not 

enough. A § 2 claim additionally requires showing the use of 

that monopoly power “to foreclose competition, to gain a 

competitive advantage, or to destroy a competitor.” Id. at 
87

482-83 (quoting United States v. Griffith, 334 U.S. 100, 107

(1948)). Therefore, in defending against a § 2 claim, the 

seller has the opportunity to justify its actions so that 

“[l]iability turns ... on whether ‘valid business reasons’ can 

explain [its] actions.” Id. at 483 (quoting Aspen Skiing Co. v. 

Aspen Highlands Skiing Corp., 472 U.S. 585, 605 (1985)). 

The Court was willing to consider as valid business reasons

both controlling inventory costs and ensuring high quality 

maintenance service, but it did not consider the record in 

Kodak as sufficient to warrant summary judgment. Id. at 

483-86.

b. Third Circuit Elaboration of 

Kodak

Since Kodak, our Court has had the opportunity to 

develop that case’s theory of antitrust liability, most notably 

in a pair of cases called Queen City Pizza, Inc. v. Domino’s 

Pizza, Inc., 124 F.3d 430 (3d Cir. 1997), and Harrison Aire, 

Inc. v. Aerostar International, Inc., 423 F.3d 374 (3d Cir. 

2005).

In Queen City Pizza, we considered a Kodak-style 

claim by a group of franchisees against Domino’s Pizza,

alleging that Domino’s had used its monopoly power over the 

market for franchise rights and proprietary pizza dough to

restrain trade in the market for approved pizza supplies. 124 

F.3d at 434. We affirmed the district court’s dismissal of the 

claims under Federal Rule of Civil Procedure 12(b)(6) 

because we did not consider the contractual requirement for 

franchisees to purchase pizza ingredients from Domino’s to 

implicate the concerns raised in Kodak. Id. at 444. We 

observed “that Domino’s approved supplies and ingredients 
88

are fully interchangeable in all relevant respects with other 

pizza supplies” so that they were not unique in the way that 

Kodak parts were. Id. at 440. The plaintiffs were not, 

therefore, forced to purchase approved supplies because of 

the uniqueness of any Domino’s goods, but instead only 

“because they [were] bound by contract to do so.” Id. at 441. 

In distinguishing that contractual obligation from the Kodak

situation, we explained that, where the defendant’s forcing 

power “stems not from the market, but from plaintiffs’

contractual agreement ..., no claim will lie.”

46

 Id. at 443. “If 

 

46 In Queen City Pizza, we talked, in part, of the 

defendant forcing “plaintiffs to purchase the ... tying

product.” 124 F.3d at 443 (emphasis added). That language 

was a result of the idiosyncratic nature of one of the tying 

theories alleged in that case. Under that theory, the primary 

market was for restaurant franchise agreements, which in turn 

contractually bound franchisees to purchase the alleged 

“tying” product, fresh dough. The franchisees contended that 

Domino’s “refused to sell fresh dough to [them] unless [they] 

purchased other ingredients and supplies from Domino’s,” id.

at 434, so that the “other ingredients and supplies” were the 

“tied” product.

The analogy here would be an argument that the 

primary market was for PBX systems, which “forced” the 

purchase of ODMCs and MSPs as the “tying” products, 

which were in turn allegedly used to force purchase of 

maintenance as the “tied” service. No matter how many 

intermediate steps are alleged, however, in the end our 

concern is whether the defendant forced purchases of a tied 

product using power in some distinct market. Jefferson 

Parish, 466 U.S. at 12. Queen City Pizza stands for the 

proposition that if the supposed forcing is entirely the result 
89

Domino’s ... acted unreasonably when ... it restricted 

plaintiffs’ ability to purchase supplies from other sources, 

plaintiffs’ remedy, if any, is in contract, not under the 

antitrust laws.” Id. at 441.

We also emphasized in Queen City Pizza that “[t]he 

Kodak case arose out of concerns about unilateral changes in 

Kodak’s parts and repairs policies.” Id. at 440. Because 

Kodak’s change in policy against independent maintenance 

providers “was not foreseen at the time of sale, buyers had no 

ability to calculate these higher costs at the time of purchase 

and incorporate them into their purchase decision.” Id. The 

Domino’s franchisees, on the other hand, “knew that 

Domino’s Pizza retained significant power over their ability 

to purchase cheaper supplies from alternative sources because 

that authority was spelled out in ... the ... franchise 

agreement,” so the “franchisees could assess the potential 

costs and economic risks at the time they signed the franchise 

agreement.” Id. If the franchisees found the contractual 

requirements “overly burdensome or risky at the time they 

were proposed, [they] could have purchased a different form 

of restaurant, or made some alternative investment,” id. at 

441, so that the transaction was “subjected to competition at 

the pre-contract stage,” id. at 440. We thus characterized 

Kodak as concerned largely with the threat of unfair surprise 

for customers in the aftermarket, a threat ameliorated if the 

aftermarket terms were made clear in a primary market 

contract.

 

of a transparent contractual agreement, then that is not the 

concern of the antitrust laws. A plaintiff cannot avoid that 

outcome merely by crafting a complaint to allege 

intermediate steps.
90

In Harrison Aire, our Court’s second major case 

elaborating Kodak, we affirmed summary judgment against 

the Kodak-style claims of a hot air balloon operator that

alleged that the balloon manufacturer had monopolized the 

aftermarket for replacement balloon fabric by tying the 

purchase of its own branded fabric to its balloons. 423 F.3d 

at 379, 386. We explained that, in general, “[i]f the primary 

market is competitive, a firm exploiting its aftermarket 

customers ordinarily is engaged in a short-run game – for 

when buyers evaluate the ‘lifecycle’ cost of the product, the 

cost of the product over its full service life, they will shop 

elsewhere.” Id. at 382. The Kodak case is an exception to 

that general rule, based on a “market failure” in which 

“lifecycle pricing information is particularly difficult or 

impossible for primary market customers to acquire, as in the 

case of a unilateral change in aftermarket policy targeting 

‘locked in’ customers.” Id. We emphasized that “Kodak

does not transform every firm with a dominant share of the 

relevant aftermarket into a monopolist,” and that a Kodakstyle “plaintiff must produce ‘hard evidence dissociating the 

competitive situation in the aftermarket from activities 

occurring in the primary market.’” Id. at 383 (quoting SMS 

Sys. Maint. Servs., Inc. v. Digital Equip. Corp., 188 F.3d 11, 

17 (1st Cir. 1999)).

In evaluating the evidence in Harrison Aire, we 

cautioned that, although “[o]ne important consideration is 

whether a unilateral change in aftermarket policy exploits 

locked-in customers,” id. at 383, “an ‘aftermarket policy 

change’ is not the sine qua non of a Kodak claim,” id. at 384. 

Other factors to consider include “evidence of (1) 

supracompetitive pricing, (2) [the seller’s] dominant share of 

the relevant aftermarket, (3) significant information costs that 
91

prevent[] lifecycle pricing, and (4) high ‘switching costs’ that 

serve[] to ‘lock in’ [the seller’s] aftermarket customers.” Id. 

Applying those factors to the specific circumstances of the 

Harrison Aire case, we concluded that “[n]either information 

costs nor a unilateral change in aftermarket policy prevented 

[the plaintiff] from shopping for competitive lifecycle balloon 

prices when it purchased the ... balloon at issue.” Id. at 384-

85. Without “other evidence dissociating competitive 

conditions in the primary balloon market from conditions in 

the aftermarket for replacement fabric,” it was “clear that [the 

plaintiff] got precisely the balloon and the aftermarket fabric 

that it bargained for in the competitive primary market.” Id.

at 385. Therefore, summary judgment against the 

monopolization claim was appropriate.47

c. Synthesizing the Kodak Case 

Law

Kodak makes clear that, in certain limited 

circumstances, a competitive primary market will not insulate 

a defendant from antitrust liability. But neither that case nor 

our subsequent case law overturns the more general principle 

that a plaintiff’s theory of antitrust liability must be 

economically plausible. Thus, in the summary judgment 

context, “‘antitrust law limits the range of permissible 

 

47 We also affirmed summary judgment against the § 1 

tying claim raised in Harrison Aire because “[t]ying requires 

appreciable economic power in the tying product market,” 

and the plaintiff “fail[ed] to produce any evidence of 

appreciable market power in the tying product market” for hot 

air balloons. 423 F.3d at 385 (citations and internal quotation 

marks omitted).
92

inferences’ that can be drawn ‘from ambiguous evidence.’” 

Harrison Aire, 423 F.3d at 380 (quoting Matsushita Elec. 

Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588 (1986)).

That “higher threshold” for summary judgment “is 

imposed in antitrust cases to avoid deterring innocent conduct 

that reflects enhanced, rather than restrained, competition.” 

In re Flat Glass Antitrust Litig., 385 F.3d 350, 357 (3d Cir. 

2004). As the Supreme Court put it plainly in Kodak itself, 

“[i]f [a] plaintiff’s theory is economically senseless, no 

reasonable jury could find in its favor, and summary 

judgment should be granted.” 504 U.S. at 468-69. The

requirement that a plaintiff make out an economically 

coherent theory of antitrust liability applies just as much to 

the pleading stage, where, to “make a § 1 claim,” a plaintiff 

must “identify[] facts that are suggestive enough to render a 

§ 1 [violation] plausible,” with sufficient “context” to “raise[] 

a suggestion” of unlawful anticompetitive conduct. Bell Atl. 

Corp. v. Twombly, 550 U.S. 544, 556-57 (2007). The

requirement that a plaintiff provide an economically plausible 

theory for its antitrust claims applies no less at trial than when 

a case is resolved by summary judgment or on the pleadings. 

With that in mind, we do not read – and have never 

read – Kodak to modify the requirement that a plaintiff in a 

tying case prove that the defendant has market power 

sufficient “to force a purchaser to do something that he would 

not do in a competitive market.” Jefferson Parish, 466 U.S. 

at 14. In general, we expect a vibrant and competitive 

primary market to discipline and restrain power in related 

aftermarkets. What Kodak stands for is the principle that 

there can be some exceptions to that expectation, when a 

plaintiff can produce a plausible economic theory of market 
93

failure, supported by sufficient evidence. In evaluating the 

issues in this case, we must consider just how broadly that

Kodak exception should be read.

A leading antitrust treatise seems to suggest that

Kodak should be read as confined to the lock-in situation that 

was that opinion’s focus. As that treatise distills the Kodak

analysis: “Kodak could exploit locked-in customers with 

supracompetitive prices only if it could profitably (1) 

dispense with sophisticated new customers or (2) could 

discriminatorily overcharge only those existing customers 

whose exploitation would not affect new sales.” Areeda & 

Hovenkamp, Fundamentals, supra, § 5.12, at 5-102 (Supp. 

2016).

48

 Those conditions will rarely obtain, and “[m]uch 

 

48 As that treatise explains those two elements in 

greater detail:

when a defendant has no power in the [primary] 

market, it cannot profitably charge 

supracompetitive prices for unique [aftermarket 

products] to “locked in” users unless:

1. it can profitably abandon selling new 

machines to sophisticated new 

customers who would understand that 

the machine’s cost is the sum of its 

nominal price plus the excess 

[maintenance] charges later ...; or

2. it can price discriminate by 

identifying and overcharging only 

unsophisticated users and thus 

assuring competitive ... prices for 

new, sophisticated customers.
94

more typically, high aftermarket prices are explained as an 

offset to more intense competition in the foremarket good.” 

Id. at 5-103. In that scholarly view, then, Kodak identified a 

pair of possible conditions in which primary market 

competition will not discipline aftermarket prices, but it 

should not be read as embracing any broader economic theory 

of tying liability.

We have not read Kodak quite so narrowly. The 

Supreme Court emphasized that “[l]egal presumptions that 

rest on formalistic distinctions rather than actual market 

realities are generally disfavored in antitrust law” and that 

 

Unless one of these conditions is satisfied, the 

defendant without power in the [primary] 

market also lacks the power to charge 

supracompetitive prices for unique [aftermarket 

products].

Areeda & Hovenkamp, Fundamentals, supra, § 5.12, at 5-102 

to 103.

In a companion treatise, those scholars suggest going 

even further to limit the reach of Kodak in circumstances of 

competitive primary markets:

Kodak does not foreclose a rebuttable 

presumption that lack of power in the relevant 

primary market (such as equipment) implies a 

lack of substantial power in derivative markets 

(such as parts or service). Indeed, Kodak may 

even allow a conclusive presumption to this 

effect in order to simplify administration of the 

antitrust laws.

Phillip E. Areeda & Herbert Hovenkamp, 10 Antitrust Law 

¶ 1740, at 133 (3d ed. 2011).
95

antitrust claims should be resolved “on a case-by-case basis, 

focusing on the particular facts disclosed by the record.” 

Kodak, 504 U.S. at 466-67 (citations and internal quotation 

marks omitted) (quoting Maple Flooring Mfrs. Ass’n v. 

United States, 268 U.S. 563, 579 (1925)). In Harrison Aire, 

we declined to read Kodak as applying narrowly to only cases 

involving “[a]n aftermarket policy change,” because Kodak

mandated that courts look at “several relevant factors.” 

Harrison Aire, 423 F.3d at 384. The test is more broad: a

plaintiff pursuing a Kodak-style claim must present evidence 

to support a plausible economic explanation that competition 

in the primary market is “dissociat[ed] ... from conditions in 

the aftermarket.” Id.

Showing exploitation of locked-in customers, as 

detailed in Kodak, is one way to satisfy that burden, but our 

own case law prevents us from concluding in the abstract that 

it is the only way to do so. Therefore, we interpret Kodak as 

standing for two propositions: (1) that firms operating in a 

competitive primary market are not thereby categorically 

insulated from antitrust liability for their conduct in related 

aftermarkets; and (2) that exploitation of locked-in customers 

is one theory that courts will recognize to justify such 

liability. Kodak identified factors to evaluate alleged 

anticompetitive aftermarket behavior, and it is possible that 

those factors may support a theory of antitrust liability that is 

not necessarily predicated on lock-in exploitation. But any 

such alternative theory must satisfy the more general rule that 

an antitrust theory needs to “make[] ... economic sense” and 

be supported by the evidence. Matsushita, 475 U.S. at 587.

Having laid out the applicable principles of law for 

Kodak-style tying and monopolization claims, we turn to their 
96

application in the two surviving antitrust counterclaims in this 

case.

49

2. PBX Attempted Monopolization 

Claim

Avaya argues that we should reverse the PBX 

attempted monopolization judgment on two grounds. First, it 

says that, once it introduced contract language in 2008 that 

made clear to customers that they would not be able to use

ISPs, no Kodak claim could lie as a matter of law. Second, it 

asserts that, as a matter of law, TLI’s evidence of predatory 

conduct is insufficient to support a § 2 attempted 

monopolization claim. We agree that Avaya cannot be liable 

for PBX systems sold after the 2008 contracts were 

introduced, but we cannot conclude that there was insufficient 

evidence to support a verdict of liability for the pre-2008 

period.

 

49 As a reminder, those surviving antitrust 

counterclaims are for attempted monopolization in the PBX 

maintenance services market, in violation of § 2 of the 

Sherman Act; and tying PDS software patches to maintenance 

services, in violation of §1 of the Sherman Act. Given the

arguments before us, ours is not to reason why the jury found 

those particular counterclaims compelling while rejecting the 

rest.

“We exercise plenary review” over a district court’s 

decision on whether to grant judgment as a matter of law 

against a jury verdict, but we “must not weigh evidence, 

engage in credibility determinations, or substitute [our]

version of the facts for the jury’s.” Pitts v. Delaware, 646 

F.3d 151, 155 (3d Cir. 2011).
97

a. Post-2008 Sales Contracts

According to Avaya, by May 2008, all purchasers of 

new PBX systems were on notice that they were contractually 

barred from using ISPs, so that there could be no antitrust 

aftermarket for maintenance. It points out that the sales

agreement that accompanied PBX systems at that point 

expressly provided for “[l]icense [r]estrictions” that made it

clear to purchasers – sophisticated and unsophisticated alike –

that they could not use ISPs for maintenance. (J.A. 7283.) 

Specifically, § 6.2 of the sales agreement provided that the

Customer agrees not to ... allow any service 

provider or other third party, with the exception 

of Avaya’s ... resellers and their designated 

employees ... to use or execute any software 

commands that cause the software to perform 

functions that facilitate the maintenance or 

repair of any Product except ... those software 

commands that ... would operate if ... [MSPs] 

were not enabled or activated[.]

(Id.) Even TLI’s CEO, Douglas Graham, testified that when 

Avaya introduced that version of the sales contract for its new 

PBX systems, it was “making it clear that ... part of buying [a 

PBX] is the customer giving up the ability to access an 

[ISP].” (J.A. 2746.)

In its post-trial opinion granting TLI’s request for an 

injunction, the District Court endorsed that view, even 

quoting Graham’s language. Accordingly, it limited the
98

injunction against Avaya’s restraints on ISPs to cover only 

those PBX systems purchased prior to May 2008.50 

We agree that no antitrust liability for a Kodak-style 

attempted monopolization claim could lie after May 2008 

when customers were put on clear notice that purchasing an 

Avaya PBX precluded use of ISP maintenance. As we 

explained in Queen City Pizza, when the defendant’s power

“stems not from the market, but from plaintiffs’ contractual 

agreement,” then “no claim will lie.” 124 F.3d at 443. By

May 2008, PBX customers were on clear notice that Avaya 

“retained significant power over their ability to purchase 

cheaper [maintenance] from alternative sources because that 

authority was spelled out in detail in section [6.2] of the 

standard [customer] agreement.” Id. at 440. If the customers 

viewed those terms as “overly burdensome ... at the time they 

were proposed, [they] could have purchased a different 

[brand] of [PBX].” Id. at 441. Avaya was therefore 

“subjected to competition at the pre-contract stage” in the 

primary market, id. at 440, which was undeniably

competitive. Absent a new and compelling economic theory 

to justify antitrust liability that reaches beyond Kodak –

 

50 TLI seeks to downplay the effect of the post-2008 

customer agreements by arguing that they were “boilerplate” 

and “ambiguous” (Answering Br. at 36), and by arguing that 

there was “no evidence that any post-May 2008 Avaya PBX 

purchasers signed the form contracts” (id. at 38). We 

conclude that there is no reason to disturb the District Court’s 

factual findings or legal conclusion on this point. The 

contractual language is unambiguous, and TLI’s own CEO 

acknowledged the language’s clarity and its use beginning 

with the new PBX systems introduced in 2008. 
99

which TLI has not provided – Avaya cannot be liable under 

the antitrust laws for enforcing a transparent contract freely 

agreed to in a competitive market.

“The purpose of the [Sherman] Act is not to protect 

businesses from the working of the market; it is to protect the 

public from the failure of the market.” Spectrum Sports, Inc. 

v. McQuillan, 506 U.S. 447, 458 (1993). For PBX systems 

sold after May 2008, TLI could not credibly claim that Avaya 

was abusing its market power over locked-in customers. 

Instead, TLI’s complaint was with its potential customers, 

who had agreed to Avaya’s terms forbidding ISP maintenance

in a competitive market. TLI may wish that the PBX 

customers had demanded access to ISPs when negotiating 

with Avaya, but that is not a complaint cognizable under the 

antitrust laws. Therefore, any PBX systems sold during and 

after May 2008 cannot be a basis for holding Avaya liable for 

attempted monopolization.

b. Sufficiency of Evidence of 

Predatory Conduct

The Supreme Court has established that

[t]he offense of monopoly under § 2 of the 

Sherman Act has two elements: (1) the 

possession of monopoly power in the relevant 

market and (2) the willful acquisition or 

maintenance of that power as distinguished 

from growth or development as a consequence 

of a superior product, business acumen, or 

historic accident.
100

Grinnell, 384 U.S. at 570-71. The purpose of that twoelement test for monopolization is to avoid imposing liability 

when a firm has come to possess a dominant market position 

in procompetitive fashion by simply out-competing its rivals

with a superior product or service. Therefore, even a firm 

with dominant market share will be liable only when its 

actions are predatory or anticompetitive in nature. More 

specifically, a § 2 claim will lie only when “(1) ... the 

defendant has engaged in predatory or anticompetitive 

conduct with (2) a specific intent to monopolize and (3) a 

dangerous probability of achieving monopoly power.” 

Spectrum Sports, 506 U.S. at 456. Phrased another way, the 

would-be monopolist must make “use of monopoly power ‘to 

foreclose competition, to gain a competitive advantage, or to 

destroy a competitor.’” Kodak, 504 U.S. at 482-83 (quoting 

Griffith, 334 U.S. at 107).

Avaya argues that, as a matter of law, there was 

insufficient evidence of predatory conduct to sustain the 

conclusion that the second element of a § 2 claim had been 

proven. According to Avaya, the allegedly predatory acts –

e.g., terminating dealings with TLI; sending “fear, doubt, and 

uncertainty” letters to TLI’s maintenance customers; and 

trespassing and spying on TLI’s customers – cannot support a 

verdict of antitrust liability. We find some merit to Avaya’s 

arguments that those individual acts may be justifiable and 

not anticompetitive, but we need not resolve this particular 

argument because it misses the forest for the trees.

It is true that, in a traditional § 2 claim, a plaintiff 

would have to point to specific, egregious conduct that 

evinced a predatory motivation and a specific intent to 

monopolize. See Spectrum Sports, 506 U.S. at 456. But in 
101

the context of a Kodak claim, any proof that the primary 

market and the aftermarket are separate for antitrust purposes 

will necessarily include substantial evidence of predatory 

conduct. The basis of a prototypical Kodak claim is that 

through some combination of price discrimination and postsale surprise in the aftermarket, the defendant has managed to 

dissociate a competitive primary market from an aftermarket 

that the defendant dominates. In Kodak, that domination was 

through control over proprietary parts; here, it is alleged to 

exist through control of proprietary software. If a Kodak

defendant has managed to create a relevant antitrust 

aftermarket, then, it has necessarily acted to “foreclose 

competition,” Griffith, 334 U.S. at 107, or to achieve the 

“willful acquisition ... of monopoly power,” Kodak, 504 U.S. 

at 483. In this case, there is no question that Avaya 

dominates the market for maintenance services on its system, 

or that control over the maintenance market was the express 

intent of its efforts to exclude ISPs. Its every action giving 

rise to this litigation evinces an intent to dominate the 

maintenance market. The central antitrust question, then, is 

whether that market is dissociated from the primary PBX 

market in a way that makes such domination anticompetitive.

Without itself resolving whether a Kodak claim will 

necessarily include significant evidence of predation, the 

Supreme Court’s analysis in Kodak suggested that our 

approach is the right one. In considering the predation prong 

of § 2 claims, the Court in Kodak merely incorporated its 

prior analysis of market separation to conclude that the 

plaintiffs had “presented evidence that Kodak took 

exclusionary action to maintain its parts monopoly and used 

its control over parts to strengthen its monopoly share of the 

Kodak service market.” Id. If we substitute “Avaya” for 
102

“Kodak” and “ODMCs/MSPs” for “parts,” we can write the 

same sentence in this case. Rather than requiring some proof 

of additional predatory conduct in the maintenance market, 

that portion of the Kodak opinion focused instead on Kodak’s 

affirmative defense that “‘valid business reasons’ [could] 

explain [its] actions.” Id. (quoting Aspen Skiing, 472 U.S. at 

605).

We apply the same analysis here. The evidence that 

convinced the jury that Avaya has dissociated the primary 

market from the aftermarket is sufficient to show

exclusionary conduct for purposes of § 2. For that reason, we 

reject Avaya’s request for judgment as a matter of law 

because it asks for proof of additional predatory conduct that 

is unnecessary in a case like this.51

3. PDS Tying Claim

Avaya also asks us to reverse the judgment against it 

for unlawfully tying PDS patches to maintenance, arguing

that there was insufficient evidence to support any finding 

that there was a distinct aftermarket for patches. Before 

 

51 Our reading of Kodak further bolsters our conclusion 

that the District Court’s judgment as a matter of law on 

Avaya’s common law claims necessarily prejudiced the 

antitrust verdict. Protecting itself from tortious forms of 

competition may well have been a valid business reason to 

engage in defensive exclusionary conduct, and that kind of 

affirmative defense was the crux of the Kodak opinion’s § 2 

analysis. That Avaya was not able to make such an argument 

to the jury improperly hindered its defense against TLI’s § 2 

claims.
103

October 2007, Avaya argues, it “made patches freely 

available to all Avaya PDS owners without requiring them to 

purchase Avaya maintenance.” (Opening Br. at 75.) The 

patches were available on Avaya’s website for any PDS 

owner to access, irrespective of who provided system

maintenance. At trial, TLI’s CEO agreed with that, and a 

representative of SunTrust – the one customer that TLI put on 

as evidence for its PDS tying claim – testified that TLI was 

able to provide patches during the entire period that SunTrust 

hired TLI for maintenance. For PDS hardware sold from 

October 2007 onward, Avaya did restrict access to its PDS 

patches to users of Avaya’s own support services, but the 

requirement to purchase Avaya support with the PDS 

hardware was made clear at the time of sale. Indeed, the 

SunTrust representative testified that when the firm purchased 

a new Avaya PDS after October 2007, it was informed that it

would be required to purchase Avaya support and, if it wished 

to receive patches, could not use an ISP. 

TLI does not challenge those basic facts, but it argues 

that the PDS verdict can nonetheless stand. As to the pre2007 period, it argues that “Avaya used the threat of 

withholding patches to coerce PDS owners into purchasing 

maintenance from Avaya” (Answering Br. at 64), so that,

even though the patches were formally available for free, 

Avaya still effected a tie. TLI points, as an example, to a 

letter sent in 2005 to PDS customers telling them that they 

risked losing access to a host of services, including patches, if 

they “ch[o]se to engage an Unauthorized Service Provider for 

services,” and threatening that “Avaya will take all necessary 

legal action against violators in order to protect Avaya 

proprietary intellectual property.” (J.A. 6945.) As to the 

post-2007 period, TLI argues that “Avaya PDS owners were 
104

not made aware of ... Avaya’s policies.” (Answering Br. at 

67.) Moreover, even if the policy was transparent, TLI argues 

that there was nonetheless sufficient evidence that the 

“patches aftermarket ... was not disciplined by the primary 

PDS market.” (Id. at 66.)

The 2005 letter to PDS customers, like the PBX FUD 

letters, was no doubt a frustration to TLI in its own efforts to 

build its business. Avaya was indeed intent on dominating its

own intra-brand market. But that does not mean that Avaya 

fell afoul of the antitrust laws, which “were enacted for ‘the 

protection of competition not competitors.’” Brunswick 

Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 488 (1977) 

(quoting Brown Shoe Co. v. United States, 370 U.S. 294, 320 

(1962)). It is undisputed that Avaya’s patches were freely 

available to customers on its website without any strings 

attached before 2007, and the only witness put forward by 

TLI to prove the efficaciousness of Avaya’s threats 

acknowledged that his firm was freely able to receive patches 

through TLI. “[W]here the buyer is free to take either 

product by itself there is no tying problem even though the 

seller may also offer the two items as a unit at a single price.” 

Northern Pacific, 356 U.S. at 6 n.4. Given that Avaya 

offered the patches freely to PDS customers, TLI needed to 

put forward compelling evidence that Avaya was somehow 

nevertheless effecting a de facto tie between patches and 

maintenance. Were TLI to prevail on vague allegations that a 

strongly-worded letter was as effective as a technological or 

contractual tie, that would dramatically expand the reach of 

tying liability. The Kodak standard demands more, and we 

accordingly agree that the evidence before the jury was 

insufficient as a matter of law to sustain a tying claim 
105

pertaining to PDS systems sold before October 2007, while 

patches were still freely available.

As for PDS systems sold after Avaya’s October 2007 

policy went into effect, TLI’s tying claim runs into the same 

problems as did its claim for antitrust injury in the post-2008

PBX market – Avaya introduced clear contractual language in 

the primary market prohibiting ISP use. If new PDS

customers considered the requirements to purchase Avaya 

software support and to refrain from using ISPs “overly 

burdensome ... at the time they were proposed, [the buyers] 

could have purchased a different [brand] of [PDS].” Queen 

City Pizza, 124 F.3d at 441. Where the primary market is 

indisputably competitive – and there is no dispute here that it 

was and is – a plaintiff must show special circumstances, such 

as Kodak-style lock-in, to overcome the inference that such 

competition will discipline any related intra-brand 

aftermarkets. Given that post-2007 PDS customers were 

required to purchase an Avaya service plan with their PDS, 

the link of PDS and maintenance service was fully transparent 

in the primary market. That undermines any argument for

Kodak-style lock-in or aftermarket surprise that TLI could 

make. Having no alternative theory, its PDS tying claim also 

fails as a matter of law for the post-October 2007 period.

We therefore reverse the jury’s entire PDS tying 

verdict and remand with instructions for the District Court to 

enter judgment for Avaya on that claim. Given that result, we 

pause briefly to note that our reversal of the PDS verdict 

would endanger the validity of the damages award, even if we 

were not otherwise vacating it because of the District Court’s 

errors regarding the common law claims. “Where a jury has 

returned a general verdict and one theory of liability is not 
106

sustained by the evidence or legally sound, the verdict cannot 

stand because the court cannot determine whether the jury 

based its verdict on an improper ground.” Wilburn v. 

Maritrans GP Inc., 139 F.3d 350, 361 (3d Cir. 1998)

(citations omitted); see also Avins v. White, 627 F.2d 637, 646 

(3d Cir. 1980) (Where “[i]t is ... impossible to determine if 

the jury based its verdict on all” the allegedly unlawful acts 

“or ... on only one,” then “there is the distinct possibility that 

if we affirm the jury’s verdict, we may do so on the basis of” 

lawful acts.); Albergo v. Reading Co., 372 F.2d 83, 86 (3d 

Cir. 1966) (“Where, as here, a general verdict may rest on 

either of two claims – one supported by the evidence and the 

other not – a judgment thereon must be reversed.”).

In this case, the verdict form merely asked the jury to 

name “the total amount of damages, if any, that ... TLI[] has 

proven ... were caused by Avaya’s violation(s) of the antitrust 

laws.” (J.A. 640.) There is therefore no way to discern 

which portion of the damages the jury attributed to the PDS 

tying claim, and which to the PBX attempted monopolization 

claim. It is true that the PBX market is substantially larger, 

but if we affirmed the damages verdict on the basis of the pre2008 PBX claim alone, we would nonetheless risk the 

“distinct possibility that ... we may do so on the basis of” 

damages attributable to a liability theory that is invalid. 

Avins, 627 F.3d at 646. Moreover, the jury lacked a cogent 

way to disaggregate the PBX and PDS damages in the first 

place because TLI’s expert offered testimony based on 

combined damages.

52

 We therefore have no way to know

 

52 Moreover, the damages expert’s two models 

projected damages of between $133 million and $147 million, 

a far cry from the jury’s finding of $20 million in damages. 
107

what portion of the damages verdict is attributable to the 

invalid PDS tying liability theory, which independently 

requires vacatur of the damages award.53

 

In trying to figure out what portion of that award was 

attributable to which systems, we would have a hard time 

reasoning how the jury came to its number in the first place, 

much less how much is attributable to a liability theory that 

survives this appeal. 

53 The parties also fight over the jury instructions, but 

those are arguments we need not resolve because we are 

vacating the verdict on other grounds. Some comment is 

nevertheless in order. Avaya complains that the District 

Court simply gave the jury a list of factors to consider in an 

“uncabined” manner to determine whether the primary market 

was dissociated from the maintenance aftermarket. (Opening 

Br. at 52.) Although there is some merit to that complaint, 

there is also much to applaud in the District Court’s efforts to 

distill and describe this complex area of law for the jury. In 

particular, we appreciate that the Court properly identified 

from Kodak and our precedents relevant factors for the jury’s 

consideration. 

We agree, however, that – if there is a retrial – the 

Court should consider describing to the jury a logical path for 

it to follow in evaluating whether the primary market is 

dissociated from the aftermarket. For example, with respect 

to the PBX attempted monopolization claim, a theory of 

dissociation by aftermarket surprise in this case might run as 

follows:

1. If you find that customers could not have predicted 

that Avaya would condition their use of MSPs and 

ODMCs on customers’ refusal to use ISPs, you may 
108

 

conclude that Avaya enacted a surprise aftermarket 

policy change.

2. If you determine that Avaya enacted such an 

aftermarket policy change, you must then evaluate 

whether Avaya had the ability to exercise market 

power in the aftermarket. To reach such a conclusion, 

you must conclude that Avaya and its Business 

Partners were able to exclude competitors in the 

aftermarket, and that switching costs in the primary 

market locked in customers.

3. If you determine that Avaya enacted a surprise 

aftermarket policy change and that it had market 

power in the aftermarket, you may then decide whether 

it was possible for Avaya to use that market power to 

exploit customers. To find the possibility of 

exploitation, you must conclude that Avaya had the 

ability to charge supracompetitive prices in the 

aftermarket.

4. If, and only if, you reach all three of the prior 

conclusions, may you find that the PBX maintenance 

market was a relevant antitrust aftermarket.

The foregoing example is not meant as a directive that the 

District Court must follow, but rather as one proposed 

approach to “channel” – as Avaya puts it – the jury’s 

consideration of the factors identified in Kodak. (Opening Br. 

at 53.)

Avaya also appealed the District Court’s decision to 

grant TLI prejudgment interest on the basis of what it 

determined to be Avaya’s vexatious litigation strategy. 

Because we vacate the verdict and the corresponding 

damages award, the issue of prejudgment interest is moot, and 
109

IV. TLI’s Cross-Appeals

Having resolved Avaya’s appeals, we turn now to 

TLI’s cross-appeals. It challenges the District Court’s grant 

of summary judgment against two of its tort counterclaims 

and against one of its antitrust counterclaims. It also 

challenges the District Court’s decision under the NoerrPennington doctrine that TLI could not use Avaya’s litigation 

conduct as evidence of anticompetitive behavior. All of those 

rulings are sound, and TLI’s arguments are not.

54

A. Summary Judgment on TLI’s Common Law 

Claims

We begin with the District Court’s grant of summary 

judgment against TLI’s counterclaims for trade libel and for

tortious interference with prospective economic advantage. 

Both claims were based on the so-called FUD letters that 

Avaya sent to existing and prospective TLI customers. The 

tortious interference claim was also based on Avaya’s 

 

we decline to address it. The question may be considered 

afresh, if necessary, following retrial.

54 Our review of a district court’s grant of summary 

judgment is plenary. Boyle v. Cty. of Allegheny Pa., 139 F.3d 

386, 393 (3d Cir. 1998). “[S]ummary judgment may be 

granted if the movant shows that there exists no genuine issue 

of material fact that would permit a reasonable jury to find for 

the nonmoving party. All facts and inferences are construed 

in the light most favorable to the non[]moving party.” Id. 

(internal citation and quotation marks omitted).
110

deactivation of TLI customers’ MSPs. The District Court 

granted summary judgment against TLI on those claims on 

the ground that TLI did not present sufficient evidence to 

create a dispute of material fact over whether Avaya’s 

conduct actually caused TLI any loss in business.55

 

55 The parties dispute whether the District Court 

applied the correct legal standards for the tort claims. For 

tortious interference, “New Jersey law requires that a plaintiff 

... present proof that but for the acts of the defendant, the 

plaintiff would have received the anticipated economic 

benefits.” Lightning Lube, 4 F.3d at 1168 (internal quotation 

marks omitted). TLI disputes whether the District Court 

actually applied that “but for” test, suggesting that it 

improperly demanded that TLI prove that Avaya’s actions 

were the sole cause of injury. Despite some potentially 

confusing language, the District Court’s opinion did apply the 

“but for” test as explicated in Lightning Lube. TLI also 

argues that the District Court should have instead applied a 

test evaluating whether Avaya’s conduct was a “substantial 

factor” in causing TLI’s injury. See Verdicchio v. Ricca, 843 

A.2d 1042, 1056 (N.J. 2004) (applying the “substantial 

factor” test in a medical malpractice case). Because a 

“substantial factor” causation test would not have altered the 

result, we need not consider whether it was more appropriate.

With regard to the legal standard for trade libel, both 

parties agree that TLI had to prove special damages. TLI 

wanted the Court to apply a “material and substantial part” 

test for causation of those damage, see Patel v. Soriano, 848 

A.2d 803, 835 (N.J. Super. Ct. App. Div. 2004), whereas 

Avaya supports the “natural and direct result” standard that 

the District Court did apply, see Mayflower Transit, LLC v. 

Prince, 314 F. Supp. 2d 362, 378 (D.N.J. 2004). Again, we 
111

The District Court provided a detailed explanation of 

the deficiency of the evidence before it. As to the MSP 

deactivations, the Court observed that MSP access was not 

required to provide maintenance, citing TLI’s own 

interrogatory responses about alternative methods that it in 

fact used to provide service to customers. As the Court 

explained, TLI “used ... default passwords or hired a third 

party to determine active passwords,” so that “whether MSPs 

were activated had little bearing on whether [TLI] could 

provide maintenance to customers.” (J.A. 105.)56 Those 

alternative methods were sufficiently successful, in fact, that 

they led Avaya to bring suit against TLI, alleging that they

were unlawful and resulted in the loss to Avaya of significant 

business.

As to the FUD letters, the District Court decided that 

TLI had not “come forth with sufficient evidence that the 

Avaya letters were the de facto cause of the loss of current 

and prospective maintenance contracts.” (J.A. 105.) TLI’s 

examples of lost contracts were not at all persuasive. For 

instance, TLI suggested that the State of Michigan was one 

such lost contract, but an employee of that state testified that 

there were “numerous reasons” not to use TLI – unrelated to 

 

need not resolve which standard is correct because the 

outcome is the same under either.

56 At trial, Scott Graham validated the District Court’s 

conclusion when he testified that he was “[n]ot ... aware of” a 

case in which TLI was not able to get “into the maintenance 

software” of a prospective customer. (J.A. 2443.) In fact, it 

is “[c]orrect” that TLI was “always successful.” (Id.)
112

Avaya, and some directly caused by TLI – and that she was 

not under any “impression that Avaya would sue the State of 

Michigan if it awarded the contract to [TLI].” (J.A. 106.)57 

The only specific example TLI provided of a customer who 

declined its services because of a FUD letter was 

substantiated only by an email – inadmissible as hearsay –

sent by a TLI employee complaining about the lost contract. 

Finally, the Court refused to draw any inferences from the 

report of TLI’s damages expert on the grounds that it was 

“not supported ... by affidavits or any other evidence that 

would be admissible at trial.” (J.A. 108.)

In this appeal, TLI relies principally upon that expert 

report and contests the District Court’s characterization of it, 

arguing vaguely that the report was based on “business 

records [and] excerpts from depositions of customers and 

TLI[] employees.” (Answering Br. at 93.) In support of that 

contention, TLI cites the expert’s certification, in which he 

declared that he “relied upon facts, data and work typically 

relied upon by experts in the economic/accounting industry.” 

(Suppl. App. 10.) TLI also cites 93 pages of inscrutable 

spreadsheets in which the expert – without explanation –

assigned various damages to contracts that TLI allegedly lost 

due to Avaya’s conduct. 

 

57 Other examples provided by TLI were similarly 

unimpressive. For instance, TLI relied on a cease and desist 

letter that it sent to Avaya in 2010. The District Court 

concluded that the mere existence of such a letter “is no more 

helpful to the Court on summary judgment than ... pleadings,” 

without additional “evidence sufficient to prove that the 

allegations made in the ... letter are in fact true.” (J.A. 107.)
113

The District Court’s rejection of TLI’s argument was 

thoroughly justified. The evidence TLI offered in opposing 

summary judgment consisted of naked accusations that 

Avaya’s conduct cost it business. That the allegations were

recited by an expert witness or by TLI employees does not 

bolster them.

58

 See Advo, Inc. v. Phila. Newspapers, Inc., 51 

F.3d 1191, 1198 (3d Cir. 1995) (“[E]xpert testimony without 

... a factual foundation cannot defeat a motion for summary 

judgment.”). Even now on appeal, after a decade of 

litigation, TLI cannot point to one specific example where it 

has credible evidence that Avaya’s allegedly tortious conduct 

harmed its business. We therefore agree with the District 

Court that TLI failed to present sufficient evidence to create a 

material dispute of fact about whether Avaya’s MSP 

deactivations or FUD letters caused injury to TLI. Summary 

judgment was appropriate on both the tortious interference 

and the trade libel claims.

B. Summary Judgment on PBX Upgrade Tying

Claim

The jury rejected TLI’s § 1 tying claim for the PBX 

market and found that there was no relevant antitrust 

aftermarket for PBX patches, but TLI nonetheless asks us to 

revive a separate § 1 tying claim. It appeals the District 

 

58 The expert’s credibility is further undermined by the 

fact that at a subsequent Daubert hearing, the District Court 

determined that he was “‘[c]learly ... not competent’ to testify 

about an individual customer’s motivations.” (Third Step Br. 

at 62 (alteration and omission in original) (quoting J.A. 

4071).)
114

Court’s grant of summary judgment against its claim that

Avaya unlawfully tied PBX upgrades and maintenance.

Before addressing the reasoning of the District Court, 

we note that, in light of our already-set-forth explanation of 

Kodak-style tying claims, we are skeptical of the tying claim 

regarding PBX upgrades, especially given the jury’s rejection 

of the tying claim related to PBX software patches. 

Upgrading a PBX system requires a customer to step back 

into the competitive primary PBX market, thereby at least 

partially ameliorating any lock-in concern and making it less 

likely that Avaya could dissociate the primary market from an 

aftermarket. We acknowledge that in the PBX upgrade 

market there may still be some reliance on past investments in 

an old Avaya system, but if the jury rejected the notion that 

PBX patches satisfied the Kodak theory – when patches are

strictly aftermarket products – we doubt that it would have 

been more sympathetic to an argument that upgrades were 

unlawfully used as a tie.

Antitrust theory aside, the District Court granted 

summary judgment for the simple reason that TLI had failed 

to present any substantial evidence that Avaya’s alleged 

threats to withhold upgrades had actually affected “a 

substantial amount of interstate commerce,” as required to

make out a § 1 claim. (J.A. 165.) It characterized TLI’s 

proffered evidence as consisting of “little more than 

assertions,” which the “Court [found] insufficient.” (Id.) 

That evidence – which TLI presses upon us anew on appeal –

again consists of expert reports arguing that Avaya used 

upgrades as part of a scheme to foreclose competition in the 

maintenance market. Avaya defends the District Court by 
115

arguing that that “evidence” was merely unsupported

assertions filtered through TLI’s experts. 

Reviewing the record ourselves, and drawing all 

reasonable inferences in favor of TLI, we find ourselves in 

agreement with Avaya and the District Court. In opposing 

summary judgment, TLI presented no evidence to raise an 

issue of material fact about whether Avaya was able to harm 

TLI by using PBX upgrades to restrain competition in the 

maintenance market. We will therefore also affirm that aspect 

of the District Court’s summary judgment order.

59

C. Noerr-Pennington Ruling

The final issue we consider is TLI’s cross-appeal of 

the District Court’s ruling, under the Noerr-Pennington

doctrine, that TLI could not present evidence at trial of 

Avaya’s litigation conduct as a basis for the accusation of

monopolistic conduct. “Under the Noerr-Pennington doctrine 

– established by Eastern Railroad Presidents Conference v. 

Noerr Motor Freight, Inc., 365 U.S. 127 (1961), and United 

Mine Workers v. Pennington, 381 U.S. 657 (1965) –

defendants are immune from antitrust liability for engaging in 

conduct (including litigation) aimed at influencing 

 

59 We note, however, that insofar as TLI may have 

later developed more evidence on the use of upgrades to tie, 

that evidence remains relevant to TLI’s attempted 

monopolization claim. There is nothing to prevent TLI from 

presenting the upgrade tying theory to the jury as part of its 

surviving § 2 claim on remand, but that does not ameliorate 

the fact that its evidence at the summary judgment stage was 

so scant.
116

decisionmaking by the government.” Octane Fitness, LLC v. 

ICON Health & Fitness, Inc., 134 S. Ct. 1749, 1757 (2014)

(citation omitted). In Professional Real Estate Investors, Inc. 

v. Columbia Pictures Industries, Inc., 508 U.S. 49 (1993), the 

Supreme Court explained that “sham” litigation – unlike 

ordinary litigation – is not off limits as a source of antitrust 

liability. The Court gave a two-part test for identifying a 

lawsuit as a sham: “First, the lawsuit must be objectively 

baseless in the sense that no reasonable litigant could 

realistically expect success on the merits. ... [S]econd[,] ... 

the baseless lawsuit conceals ‘an attempt to interfere directly 

with the business relationships of a competitor,’” id. at 60-61 

(emphasis removed) (quoting Noerr, 365 U.S. at 144), 

“through the ‘use of the governmental process – as opposed 

to the outcome of that process – as an anticompetitive 

weapon,’” id. at 61 (alteration and emphases removed) 

(quoting City of Columbia v. Omni Outdoor Advert., Inc., 499 

U.S. 365, 380 (1991)).

TLI challenges the District Court’s contention that “the 

whole case has to be a sham” for the sham exception to apply. 

(Suppl. App. 190.) Instead, TLI argues, the sham exception 

should be applied on a claim-by-claim basis. Avaya responds 

by citing the language in Professional Real Estate that refers 

to a “lawsuit” rather than a claim, and which references the 

“governmental process” rather than any specific action in a 

suit. It also argues that, as a policy matter, adopting a claimby-claim “approach would introduce extraordinary 

complexity into jury deliberations” by forcing juries to not 

only decide the merits of each claim but also decide which are 

objectively reasonable or not. (Third Step Br. at 66.) As the 

District Court noted when ruling on the issue, cases often

involve claims of varying degrees of merit, many of which 
117

are weeded out pre-trial, and it would be impractical to run a 

litigation system that made those kinds of claims subject to 

antitrust suits. 

We agree with that conclusion. True, one might

imagine a situation where a single claim, separated from an 

otherwise arguably meritorious suit, is so harmful and costly 

to a defendant that it might impose anticompetitive harm on 

the defendant in a way that triggers the sham litigation 

exception to Noerr-Pennington. But the Supreme Court’s 

elaboration of the “sham” exception suggests that we should 

not go hunting for that example, and this case is not it. Some

of Avaya’s claims that were dismissed before trial may have 

been weak, but they were part and parcel of a course of 

litigation that proceeded to two months of substantial 

evidence and argument to a jury. We do not consider 

Avaya’s affirmative claims to be frivolous or unsubstantiated; 

in fact, we are vacating the Rule 50 judgment that was 

entered against them. TLI may consider Avaya’s litigation 

conduct vexatious – as the District Court did in awarding

prejudgment interest – but its suit against TLI was not a 

“sham.”60 We therefore affirm the District Court’s ruling that 

Avaya’s litigation conduct was protected from antitrust 

liability by the Noerr-Pennington doctrine.

 

60 Which is not to say that we endorse the District 

Court’s determination that the award of prejudgment interest 

was appropriate in this case. Again, Avaya’s present 

challenge to that award has been mooted by our disposition 

with respect to the other claims presented.
118

V. Conclusion

For the foregoing reasons, we will vacate the judgment 

of the District Court and remand for further proceedings 

consistent with this opinion. We will also reverse the 

judgment of liability on the entire PDS tying claim and on the 

PBX attempted monopolization claim as to the post-2008 

time period and will remand with instructions to enter 

judgment as a matter of law for Avaya on those claims. We 

will affirm the orders of the District Court as to all issues 

raised by TLI’s cross-appeal.
1

Avaya, Inc. v. Telecom Labs, Inc.; TeamTLI.com Corp.; 

Continuant, Inc.; Scott Graham; Douglas Graham; Bruce 

Shelby, Nos. 14-4174, 14-4277 

HARDIMAN, Circuit Judge, concurring in part and 

dissenting in part. 

For litigation that has lasted some fifteen years, this 

appeal involves remarkably few disputed facts. The trouble 

began soon after Plaintiff Avaya (the Goliath of this saga)

laid off many of its workers because of a downturn in the 

telecommunications market in 2000. Those layoffs gave rise 

to independent companies that offered aftermarket 

maintenance on the Private Branch Exchanges (PBXs) sold 

by Avaya. In fact, Avaya provided training and subsidies to 

companies that hired its former employees, and some 

companies became authorized Avaya dealers or business 

partners. Defendant TLI (the David of the saga) became one 

of those official business partners. 

TLI obtained its first customer in 2001 and invested 

millions in its maintenance business. For whatever reason, 

Avaya reversed course in 2002 and began limiting the ability 

of its business partners, customers, and independent 

(unauthorized) providers to perform PBX maintenance. This 

change in strategy resulted in the creation of the Avaya One 

contract, which required Avaya business partners to promise 

not to solicit maintenance business from selected Avaya 

customers. Some 300 Avaya One contracts were signed and 

TLI signed its contract on March 21, 2003. Unlike all of 

Avaya’s other business partners, however, TLI negotiated a 

handwritten modification to its covenant not to compete that 

expressly authorized TLI to solicit maintenance business from 

certain Avaya customers. This modification was the spark 
2

that ignited the forest fire that continues to rage twelve years 

later.

When Avaya’s Head of Global Sales, Linda 

Schumacher, learned of the carve-out TLI had negotiated, she 

was “shocked” and quickly took steps to cancel TLI’s 

contract just four months after it was signed. On July 31, 

2003, Avaya gave the required 60 days’ notice that it was 

terminating the contract and spent the months of August and 

September notifying TLI’s customers that it soon would no 

longer be an Avaya business partner. Claiming antitrust 

violations, TLI went to federal court seeking an injunction 

requiring Avaya to allow TLI access to the codes necessary to 

maintain its customers’ machines. The court denied the 

injunction and TLI dropped the case. 

Undeterred, TLI used a variety of methods to access its 

customers’ PBXs in order to perform maintenance. TLI 

accessed some machines by using passwords and logins it had 

received previously and it obtained others from the internet. 

Some of TLI’s customers had purchased permissions for the 

life of their machines, which enabled TLI to provide 

maintenance by using those logins. Other methods used by 

TLI were deceitful and/or unethical. For example, some 

Avaya business partners acted as conduits for TLI by posing 

as the maintenance provider, only to pass along the 

credentials to TLI. TLI also employed two former Avaya 

employees, David Creswick and Harold Hall, who used what 

they had learned to “hack and crack” the PBXs of TLI’s 

customers to obtain the credentials necessary to service them.

In short, even after TLI was terminated as an Avaya business 

partner, TLI used various methods to provide aftermarket 

maintenance—a service that purchasers of Avaya’s PBXs 
3

were expressly authorized by contract to provide for 

themselves or to hire third parties like TLI to provide.

Avaya sued TLI in federal court in 2006, alleging 

numerous causes of action under federal and state law. After 

seven years of scorched-earth litigation, Avaya withdrew six 

claims just days before the trial began. For almost two 

months, Avaya put on evidence in support of its seven 

remaining claims. At the conclusion of Avaya’s case-in-chief, 

TLI moved for judgment as a matter of law under Rule 50 of 

the Federal Rules of Civil Procedure. The District Court 

granted TLI’s motions, throwing out Avaya’s case in its 

entirety. 

My colleagues on the panel, both experienced former 

trial lawyers and trial judges, conclude that the District Court 

committed legal error when it granted TLI’s Rule 50 motions. 

Although I had far less experience as a trial lawyer and trial 

judge than my distinguished colleagues, my visceral reaction 

to the Court’s Rule 50 decision is consistent with theirs. The 

question looms large: Why, after seven years of discovery 

and two months of trial, did a jurist with 22 years of 

experience not allow any of Avaya’s claims go to the jury? 

To ask the question implies the imprudence of the decision, at 

least on an instinctual level. But visceral reactions aren’t 

always correct, and I must say that after reading the entire 

transcript of the trial, I agree with Judge Irenas’s 52-page 

opinion explaining his reasons for throwing out Avaya’s case. 

After seven years, Avaya finally withdrew almost all of its 

federal claims. The seven state-law claims that remained—

which involved breach of contract, fraud, and unfair 

competition—simply were not proven at trial. At the end of 

the day, my assessment of Avaya’s case-in-chief is the same 
4

as the District Court’s: full of sturm und drang, but 

insubstantial.

Having expressed my opinion on that score, I confess 

enough doubt about the propriety of the District Court’s 

decision to grant the Rule 50 motion that the focus of my 

partial dissent presumes the correctness of my colleagues’ 

opinion on that point. Instead, I take issue with the decision to 

vacate the judgment TLI earned on two of its counterclaims 

arising under the antitrust laws. Even assuming, arguendo, 

that the District Court erred when it granted TLI’s Rule 50 

motions, I remain convinced that any error had little or no 

impact on the verdicts in favor of TLI. In my estimation, 

David struck Goliath right between the eyes and should not 

be deprived of his hard-earned victory on the counterclaims.

The crux of my partial dissent is that I cannot agree 

that the District Court’s rejection of Avaya’s claims “taint[ed] 

the entire trial and the ultimate verdict.” Majority Op. 6. 

Perhaps I would find greater assurance in the Majority’s taint

analysis if Avaya had adequately raised it. I have serious 

doubts that it did. Even still—without the benefit of 

developed adversarial briefing on the issue—I do not believe 

the District Court’s judgment as a matter of law so impaired 

Avaya’s ability to defend itself against TLI’s allegations of 

anticompetitive conduct that we cannot have confidence in 

the jury verdict as a whole. For that reason, I would affirm the 

verdict with respect to Avaya’s pre-2008 attempted 

monopolization of the PBX maintenance aftermarket and I 
5

respectfully dissent from the Majority’s holding to the 

contrary.1

 

1 Although I believe the jury was properly instructed as 

to the factors for finding a relevant antitrust aftermarket for 

Avaya PBX system maintenance and could have reasonably 

found Avaya liable for attempted monopolization of that 

aftermarket prior to its introduction of transparent sales 

contracts in May 2008, I agree with the Majority that Avaya 

cannot be held liable for PBX systems sold after that time. I 

also agree that the jury could not have reasonably found 

Avaya liable for tying PDS patches to maintenance either 

before 2007 (the patches were free, so there was no coercion) 

or after (the conditions were clear upfront, so there was no 

relevant antitrust aftermarket). Moreover, because the general 

verdict did not dissociate damages stemming from attempted 

monopolization of the PBX maintenance aftermarket from 

those attributable to the alleged PDS tying, I agree that the 

damages award must be vacated and that we therefore need 

not reach the issue whether the District Court abused its 

discretion in granting TLI’s motion for prejudgment interest 

under the Clayton Act. I also join the Majority’s rejection of 

TLI’s cross-appeals. 

Finally, I commend Judge Jordan for his rigorous 

synthesis of the Eastman Kodak Company v. Image Technical 

Services Inc. branch of antitrust law, which has bedeviled 

litigants and courts alike. I agree with his analysis 

wholeheartedly. Because the District Court’s jury instructions 

comport with the principles outlined by Judge Jordan, I would 

hold that they were sufficient to “properly apprise[] the jury 

of the issues and the applicable law.” Smith v. Borough of 

Wilkinsburg, 147 F.3d 272, 275 (3d Cir. 1998) (quotation 
6

I

Under both the Federal Rules of Appellate Procedure 

and our Local Rules, “appellants are required to set forth the 

issues raised on appeal and to present an argument in support 

of those issues in their opening brief.” Kost v. Kozakiewicz, 1 

F.3d 176, 182 (3d Cir. 1993). A “passing reference to an 

issue . . . will not suffice to bring that issue before this court.” 

Laborers’ Int’l Union of N. Am. v. Foster Wheeler Energy 

Corp., 26 F.3d 375, 398 (3d Cir. 1994) (omission in original) 

(quotation marks omitted) (quoting Simmons v. City of 

Philadelphia, 947 F.2d 1042, 1066 (3d Cir. 1991)). And the 

argument must include the “appellant’s contentions and the 

reasons for them, with citations to the authorities and parts of 

the record on which the appellant relies.” F.R.A.P. 

28(a)(8)(A); see also Simmons, 947 F.2d at 1065 (explaining

that “briefs must contain statements of all issues presented for 

appeal, together with supporting arguments and citations”). 

Casual assertions supported only by “cursory treatment” do 

not suffice. Kost, 1 F.3d at 182. If a claim of error is 

“unaccompanied by developed argument,” it is forfeited. 

Rodriguez v. Municipality of San Juan, 659 F.3d 168, 175 

(1st Cir. 2011); Kost, 1 F.3d at 182. 

2

 

marks omitted) (quoting Limbach Co. v. Sheet Metal Workers 

Int’l Ass’n, AFL-CIO, 949 F.2d 1241, 1259 n.15 (3d Cir. 

1991) (en banc)).

2

“Forfeiture” and “waiver” are often treated as 

interchangeable terms. As I have explained elsewhere, they 

are not. See Tri-M Grp., LLC v. Sharp, 638 F.3d 406, 432 n.1 

(3d Cir. 2011) (Hardiman, J., concurring) (“Whereas 

forfeiture is the failure to make the timely assertion of a right, 
7

This requirement is not a mere formality. As my 

esteemed colleague recently wrote: “[t]here is good reason for 

this [rule]. Brief, casual references to arguments do not put 

the opposing party on adequate notice of the issue, nor do 

they develop it sufficiently to aid our review.” NLRB v. 

FedEx Freight, Inc., 2016 WL 4191498, at *11 (3d Cir. Aug. 

9, 2016) (Jordan, J., concurring).3Indeed, this “is particularly 

true ‘where important and complex issues of law are 

presented, [making] a far more detailed exposition of [an] 

argument’” necessary to avoid forfeiting it. Id. (second 

alteration in original) (quoting Frank v. Colt Indus., Inc., 910 

F.2d 90, 100 (3d Cir. 1990)). This appeal presents just such a 

situation.

Avaya’s opening brief mentioned the taint issue only 

in passing. The matter received no mention in Avaya’s issues 

section of the brief, which I find significant because the 

question of whether the District Court erred in granting 

judgment as a matter of law against Avaya’s common law 

claims is an issue distinct from whether such error tainted the 

verdict on TLI’s antitrust claims—something the structure of 

the Majority opinion rightly makes clear. See United States v. 

Joseph, 730 F.3d 336, 341–42 (3d Cir. 2013) (distinguishing 

between “issues” and “arguments”). Then, on the three 

occasions Avaya did mention tainting in its brief, its 

 

waiver is the intentional relinquishment or abandonment of a 

known right.”) (quoting United States v. Olano, 507 U.S. 725, 

733 (1993) (internal quotation marks omitted)).

3 See also Rodriguez, 659 F.3d at 175 (“Judges are not 

mind-readers, so parties must spell out their issues clearly, 

highlighting the relevant facts and analyzing on-point 

authority.”).
8

argumentation was skeletal at best.4 This was not lost on TLI, 

which—in Avaya’s words—“crie[d] waiver” in its response 

brief. Avaya Reply Br. 18 n.4 (citing TLI Br. 87). Rightly so. 

As TLI put it, Avaya failed to “advance [its] conclusory 

 

4 Two of these instances were little more than ipse 

dixits. See Avaya Br. 4 (“The erroneous dismissal of Avaya’s 

claims and the court’s instruction that TLI[’s] conduct was 

not unlawful also tainted the jury’s consideration of TLI[’s] 

antitrust counterclaims.”); id. at 72 (“In any event, the 

erroneous instructions that tainted the jury’s consideration of 

TLI[’s] “FUD” allegations require a new trial.”). Neither of 

these assertions was supported by any reasoning or citation to 

legal authority or record evidence. The third mention of 

tainting offered a few sentences of additional bluster—

accusing the trial judge of “discredit[ing] Avaya in the jury’s 

eyes” and “crippl[ing] Avaya’s ability to respond to TLI[’s] 

antitrust claims by showing that it had legitimate and 

procompetitive business reasons” for its actions—but was 

purely skeletal. Id. at 43 (introductory paragraph to antitrust 

argument section). Avaya again offered no development of its 

theory or citation to case law or the trial record. Passing 

references like these should be deemed forfeited. See Bryant 

v. Gates, 532 F.3d 888, 898 (D.C. Cir. 2008) (holding that a 

claim was forfeited where it was made only in a “conclusory” 

manner because “[i]t is not enough merely to mention a 

possible argument in the most skeletal way, leaving the court 

to do counsel’s work” (quoting N.Y. Rehab. Care Mgmt., LLC 

v. NLRB, 506 F.3d 1070, 1076 (D.C. Cir. 2007))); Donahue v. 

City of Boston, 304 F.3d 110, 122 (1st Cir. 2002) 

(determining that an argument was forfeited where the “main 

brief devote[d] only three sentences to the issue” that were 

“half-hearted” and “poorly developed”).
9

‘taint’ contention in a freestanding and developed argument.”

TLI Br. 86. Because Avaya merely floated the taint idea 

“without squarely arguing it,” FedEx Freight, 2016 WL 

4191498, at *11 (Jordan, J., concurring), I would deem it 

forfeited.

The three-point tainting theory on which the Majority 

bases its decision comes not from Avaya’s opening brief but 

from its reply brief. See Avaya Reply Br. 18–19; Majority

Op. 67–79. But the black-letter rule is that “[w]e will not 

revive a forfeited argument simply because” an appellant 

finally develops “it in its reply brief.” Republic of Argentina 

v. NML Capital, Ltd., 134 S. Ct. 2250, 2255 n.2 (2014); see 

also In re Surrick, 338 F.3d 224, 237 (3d Cir. 2003). This 

dooms at least two taint-related arguments developed only on 

reply: (1) that judgment as a matter of law against Avaya’s 

common law claims undermined Avaya’s ability to present 

pro-competitive justifications for its conduct, and (2) the 

related point that the District Court erroneously limited 

witness testimony to that effect.

Avaya did not couch its argument regarding the effects 

of the District Court’s instructions about the lawfulness of 

TLI’s access to maintenance commands on the jury’s 

consideration of the “fear, uncertainty, and doubt” (FUD)

letters in terms of tainting until its reply brief. It did, however,

raise this alleged instructional error in its separate argument 

that the jury could not have properly found that Avaya 

engaged in anticompetitive conduct in the PBX maintenance 

aftermarket. I address this argument below. As for the other 

grounds on which the Majority deems the antitrust verdict

improper, I would hold them forfeited.

II
10

Even had Avaya adequately developed all three prongs 

of its taint argument, I would not conclude that the District 

Court’s errors constituted reversible error. First, the Majority 

concludes that the District Court’s instructions after its 

dismissal of Avaya’s common law claims undermined the 

jury’s ability to assess the reasonableness of Avaya’s actions 

in light of TLI’s allegedly unlawful conduct. It highlights the 

trial judge’s instruction that TLI’s “use of and access to 

[Avaya’s] maintenance software may not be considered by 

you as unlawful when deciding TLI[’s] claims against Avaya 

asserted in the counterclaim.” App. 4739. 

Despite this instruction, Avaya had ample opportunity 

to present the jury with legitimate and procompetitive 

defenses for its actions, and those defenses did not depend on 

whether TLI’s conduct was so egregious as to be against the 

law. Indeed, Avaya’s persistent refrain to the jury was that the 

actions Avaya took against TLI were reasonable because TLI 

was an “unauthorized” PBX servicer undermining Avaya’s 

“procompetitive” Business Partners program. App. 4569–71.5

 

5

In its closing argument, after explaining to the jury 

that it would be instructed that “TLI’s use of and access to 

Avaya’s maintenance software may not be considered by you 

to have been unlawful” Avaya explained that “what remains 

is a series of decisions by you, as to whether Avaya’s conduct 

was a reasonable competitive reaction to the events Avaya 

confronted in the marketplace.” Trial Transcript (“Tr.”) 

3/19/14, 15752. It then proceeded to make the case that 

Avaya’s actions were nothing more than “legitimate efforts to 

protect its software and its business model,” id. at 15756; that 

the law “allows for fierce, fierce competition,” id. at 15757; 

that Avaya’s practices were consistent with industry practices 
11

Avaya made a thorough, sustained case for the legitimacy and 

procompetitiveness of its actions and did not pull any punches 

in lambasting TLI’s conduct. Accordingly, I think it quite 

unlikely that labeling TLI’s conduct “unlawful” on top of all 

this would have changed the result.

In a similar vein, the Majority finds taint in the 

constraints the District Court imposed on the evidence Avaya 

presented at trial. The Majority notes that Avaya “points to 

two examples in particular” of how the District Court’s 

judgment as a matter of law “hindered its ability to present 

evidence in its defense against the antitrust claims.”6 Majority

Op. 75. The first is the District Court’s warning that Avaya 

could not “tell the jury” that TLI’s means of accessing Avaya 

PBX systems was “illegal” during its cross-examination of

TLI’s CEO. App. 4440. My colleagues concede that “the 

Court did allow the line of questions,” Majority Op. 75, 

which was not directed toward criticizing TLI’s access 

practices, but rather, was offered to demonstrate that Avaya’s 

policy toward unauthorized service providers was consistent 

 

and business realities and that the Business Partner program 

enhanced competition in the marketplace; that its concerns 

about unauthorized PBX maintenance providers with no 

relationship to Avaya were legitimate because poor-quality 

servicing of Avaya PBX’s could damage the Avaya brand; 

and that TLI was the party with questionable practices given 

its choice to pursue Avaya maintenance customers without 

authorization rather than “play” by the “rules,” id. at 15767. 

6

In doing so, it fails to mention that these two 

examples are drawn exclusively from Avaya’s reply brief—

the first time Avaya mentioned them in this appeal. Compare

Majority Op. 75, with Avaya Reply Br. 19.
12

with industry practice and did not cause TLI any 

anticompetitive harm. Second, the Majority is troubled by the 

trial judge’s rather innocuous caveat to Avaya when 

examining its economics expert to “[s]tay away from trying 

to, in effect, contradict anything I’ve already decided.” App. 

4587. The Court again allowed Avaya’s line of questioning, 

deeming it “fair game” and unrelated to any allegations of 

illegality. App. 4586. This is unsurprising, given that the

expert’s testimony was directed toward showing that TLI had 

in fact benefited from Avaya’s allegedly anticompetitive 

conduct because its Business Partners program made TLI the 

only independent game in town. I am at a loss to see how the 

ability to call TLI’s conduct “illegal” would have 

meaningfully advantaged Avaya in these lines of inquiry. And

even if there were instances in which this characterization 

would have been of rhetorical benefit to Avaya, it would not 

have changed the substance of Avaya’s procompetitivejustification argument.

Finally, I am not persuaded that the District Court’s 

instruction that it was not “unlawful,” App. 615, for TLI to 

access Avaya’s maintenance software tainted the jury’s 

consideration of whether the FUD letters constituted 

anticompetitive conduct. Among other things, these letters 

told Avaya customers that accessing PBX and PDS systems 

through unauthorized service providers “is a violation of 

federal and state laws and could result in civil and criminal 

liability and penalties” and that Avaya would “take all 

necessary legal action against violators.” App. 6945; see also

App. 3904–05, 3940, 4057–58, 7307. And with respect to 

these letters, the Court instructed the jury that “the law does 

not allow [TLI’s] injury to be based on . . . Avaya’s 

dissemination of truthful statements.” App. 621. 
13

Even if the jury had not been instructed that 

unauthorized access to Avaya software was not illegal, it is 

unlikely that it would have reached a different verdict. 

Avaya’s own witnesses admitted that they had no idea 

whether there was any legal basis for the letters Avaya sent to 

its PBX customers stating that unauthorized use of 

maintenance service permissions and logins “violat[es] . . . 

federal and state laws” and “could result in civil and criminal 

penalties.” And they conceded that Avaya did not actually 

plan to sue its customers. App. 3904–05, 3940, 4057–58.

Even if some of the threats Avaya issued in its FUD letters 

might have been rooted in truth (the fact that use of an 

unauthorized service provider could result in the loss of 

certain services only provided by Avaya and its Business 

Partners certainly was), the jury’s inescapable conclusion was 

that at least some of these threats were not true. Indeed, in 

defending the letters, Avaya focused on the obvious truths 

(Avaya-exclusive benefits, TLI’s unauthorized status, etc.) 

yet conceded “the fact that a private party can’t possibly 

pursue criminal liability,” which is “for the public 

authorities.” Tr. 15871. Avaya characterized this 

misstatement of law as “unfortunate language,” id.; the jury 

surely recognized this as a euphemism for “not true.” Simply 

put, it was obvious to any fair-minded reader that the FUD 

letters were over-the-top, at least partially baseless, and 

threats that couldn’t fairly be described as “legal opinion.” 

Avaya Br. 66. I do not perceive a high probability that the 

jury would have found them kosher had it known that a 

customer’s hiring an unauthorized service provider might 

amount to a breach of contract. After all, it was instructed that 

even if “a truthful statement is coupled or limited with an 
14

untruthful statement, the truthful statement loses its protection 

and can underlie an injury.” App. 621.7

 

7 Avaya’s primary attack on the FUD issue is that the 

jury instructions misstated the law by failing to inform the 

jury of “a presumption” assigning de minimis competitive 

effect to false statements that antitrust plaintiffs “must 

overcome” by meeting a six-factor test if they are to show a 

FUD practice to be anticompetitive. Avaya Br. 64 (citing 

American Prof’l Testing Serv. v. Harcourt Brace Jovanovich 

Legal & Prof’l Publ’ns, 108 F.3d 1147, 1152 (9th Cir. 1997)). 

Because our Court is not among those that have adopted this 

presumption and six requirements, see, e.g., Maurice E. 

Stucke, How Do (and Should) Competition Authorities Treat 

A Dominant Firm’s Deception?, 63 SMU L. Rev. 1069, 1086 

(2010), I would hold that the instructions were fine. I would 

also conclude that there was sufficient evidence for the jury to 

find the FUD letters anticompetitive, especially given that 

such a finding has stronger foundation “when . . . combined 

with other anticompetitive acts” by Avaya. W. Penn 

Allegheny Health Sys., Inc. v. UPMC, 627 F.3d 85, 109 n.14 

(3d Cir. 2010).

To the extent that sufficient evidence also needed to 

support TLI’s other theory of liability (anticompetitive refusal 

to deal) given that the general verdict form does not indicate 

which of Avaya’s allegedly anticompetitive acts formed the 

basis for the verdict, I would hold—with some reservation—

that it does. The District Court’s instructions were consistent 

with the Supreme Court’s precedents setting forth the 

“limited circumstances in which a firm’s unilateral refusal to 

deal with its rivals can give rise to antitrust liability,” Pac. 

Bell Tel. Co. v. Linkline Commc’ns, Inc., 555 U.S. 438, 448 
15

* * *

The Majority upends a sound verdict—reached after a 

decade of litigation and seven months of trial—based on a 

few snippets mentioned only in passing in Avaya’s opening

brief. The Majority picks up the dropped ball and runs with it, 

imbuing Avaya’s taint argument with force it never pressed in 

its opening brief. And even had it done so, I would not hold 

that any error the District Court may have committed in the 

second month of the trial was fatal to the whole enterprise. 

Accordingly, I respectfully dissent from the decision to vacate 

the judgment in favor of TLI on its counterclaim for Avaya’s 

pre-2008 attempted monopolization of the PBX maintenance 

aftermarket.

 

(2009), and my review of the record leads me to conclude that 

TLI provided that “minimum quantum of evidence from 

which a jury might reasonably afford relief.” Starceski v. 

Westinghouse Elec. Corp., 54 F.3d 1089, 1095 (3d Cir. 1995)

(quoting Rotondo v. Keene Corp., 956 F.2d 436, 438 (3d Cir. 

1992)).