Opinion ID: 676997
Heading Depth: 3
Heading Rank: 2

Heading: Alleged Lack of Demand for Third-Party Installation

Text: 102 The district court additionally supported its finding of lack of demand for AMI-installed upgrades by referring to evidence that, on the rare occasions when IBM had made SWRPQ pricing available for MIPS upgrades, there were few such upgrades sold without IBM labor. The court reasoned as follows: 103 There is insufficient evidence of demand for upgrade labor at prices AMI would have to charge to support a conclusion that a competitive market for 308X upgrade labor does or could exist. Leasing companies have purchased virtually no 308X model, memory, or channel upgrades without IBM labor included (in order, for instance, to have AMI install the upgrade) when such upgrades were available on an SWRPQ basis (which roughly equals the price IBM would be entitled to charge for its parts). Every J to K upgrade purchased by CMI and Comdisco was bought with IBM installation service included even though IBM also sold the feature on an SWRPQ basis. 104 Id. at 290-91 (footnotes and record citations omitted). In a footnote, the court responded to AMI's argument that the reason there were so few SWRPQ orders was that the unbundled prices were not well-publicized: 105 Witnesses from CMI and Comdisco testified that neither company knew that IBM sold upgrades (including the J to K) without IBM labor included. I do not credit such testimony, as there was documentary evidence (requests for IBM SW prices) to the contrary. Further, the SWRPQ procedure has existed since 1975. SWRPQ prices are readily available from IBM. AMI acknowledged that SWRPQ prices are made available from IBM when specifically requested. 106 Id. at 291 n. 74 (record citations omitted). AMI argues that this determination was based on insupportable impeachments of witnesses and was clearly erroneous. 107 Mr. Lewis, vice president of Comdisco, the largest leasing company, admitted that, as of the trial date, he knew that IBM installation was not mandatory. He was then cross-examined on the issue of one particular 308X MIPS upgrade, the J to K model conversion. He then stated that he acquired nine such upgrades in the past, all with IBM labor included. But when asked whether he knew that IBM installation was optional at the time he purchased the J to K upgrades, he said he did not. Quite simply, Lewis' admission does not impeach his testimony that he was unaware of SWRPQ pricing during the relevant time period. 108 The district court then used certain documentary evidence to impeach Lewis. DX 2260 is a request from Lewis for SWRPQ pricing on three upgrades, J16-J24, K16-K24 and G16-G24. None of these are the J to K upgrade that Lewis testified about at trial. Moreover, their designations are consistent with memory upgrades, not MIPS upgrades. 20 DX 2266 is more explicit, specifically stating that memory upgrades are involved. 308X memory was usually neither TCM-based nor subject to net pricing and is thus not at issue. Accordingly, the conclusion to be drawn from this evidence is that Lewis was unaware that MIPS upgrades were SWRPQ-priced, although he had purchased some unrelated memory upgrades without IBM installation in the past. Lewis' testimony that he was unaware of SWRPQ pricing for 308X MIPS upgrades was not impeached. Therefore, nothing can be concluded from Comdisco's failure to purchase MIPS upgrades under SWRPQ terms other than it was unaware they were available. 109 The district court also noted the testimony of Mr. Loria, a CMI Vice-President. He testified that, to his knowledge, IBM would not sell upgrades without a labor charge. Much of this testimony centered on the year 1976, which was several years before IBM introduced the 308X series of computers. He also stated that he thought that SWRPQ terms meant simply that IBM did not retain the old parts. Except for the J-K upgrade, the only SWRPQ upgrades he testified about were not MIPS upgrades. 110 The district court believed that this testimony was impeached by three exhibits, DX 2261, DX 2262 and DX 2263. DX 2261, however, is just a 1986 request for SWRPQ pricing on a 96 to 128 megabyte memory upgrade; Loria never testified that non-net priced memory upgrades did not exist. DX 2262 and DX 2263 are IBM's responses to CMI requests for SWRPQ-priced memory upgrades. None of these documents tend to show that Loria knew that a few MIPS upgrades were available without IBM installation; accordingly, his testimony to the contrary was not impeached by this evidence. 111 Another Vice-President of CMI, a Mr. Smith, testified similarly to Loria, stating that he was not aware that the J to K MIPS upgrade was available without IBM installation. The district court found that DX 2265 impeached Smith's testimony. That document is a computer printout of requests for price quotations (RPQs) with the name Gary Smith handwritten at the top. Some of these RPQs were for SWRPQ terms, but none were for MIPS upgrades. Once again, this evidence does not impeach Smith's testimony. 112 In short, that to which the district court refers does not bear out its conclusion that these witnesses were untruthful when they claimed not to know of a few MIPS upgrades without IBM installation. 21 Thus, the fact that a few MIPS upgrades were sold under SWRPQ terms does not prove that there was no separate demand for installation services, particularly considering that IBM had every economic incentive to protect its revenues and avoid widely publicizing the existence of such upgrades. 113