The OEM failed in an appeal against an injunction filed by former supplier Collins Ink.
The VL Versamark 2000
Both companies supply inkjet inks for the Versamark digital inkjet printing press, manufactured by Kodak. Collins’ manufactured inks for the Versamark were resold by Kodak under its own brand, but Kodak sued Collins after it “tried to end the decade-old supplier agreement” amid worries about Kodak’s financial situation, with Kodak claiming Collins “was just trying to steal Kodak ink customers”.
The case came to a head in November 2011 when a judge decided Collins had “prematurely exited” its agreement and ordered it to supply Kodak again, before the OEM filed for bankruptcy weeks later, leaving the supplier with $1.9 million (€1.4 million) in unpaid invoices. The enforced contract ended in May 2013 when Collins said it would “no longer” supply Kodak and would offer its own branded ink directly to customers.
Collins posted court papers in October 2013 stating that Versamark inks accounted for 70 percent of its output, and alleging that Kodak was “trying to elbow it out of the Versamark ink business by telling Versamark users that getting their printheads refurbished” – something that needs to be done regularly – will “cost more if they used non-Kodak-made inks”. Collins also claimed Kodak had “threatened certain customers with slow or no refurbished printheads if the customer continues to use Collins ink”.
A ruling in 2014 saw US District Judge Michael R. Barrett give Collins Ink a “preliminary injunction”, which banned Kodak from the “two-tier pricing”. It is this ruling that Kodak has appealed, and Rochester Business Journal reported that Collins is “likely to succeed”, according to a decision from the US Sixth Circuit Court of Appeals.
The temporary injunction arising from the 2014 court case was appealed by Kodak, but the three-judge appellate panel and the Sixth Circuit Court of Appeals upheld the ruling, stating that “the ban should stay in place while the case is being argued”, as well as “predict[ing] success for Collins”. The panel also noted that “the behaviour the injunction prevents is anticompetitive […] Collins has shown that it is sufficiently likely to succeed on the merits […] and that it faces a realistic possibility of irreparable harm absent a preliminary injunction”.
Rochester Business Journal surmised that Kodak “could still legally try to undercut Collins by simply dropping the price of its Versamark ink”, and would be “free to reap high profits” on the printheads “as long as it charged all customers the same price”.