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Avaya v. TLI Gives New Life to Aftermarket Monopolization Litigation A-La-Kodak
On March 27, 2014, in Avaya, Inc. v. Telecom Labs, Inc., 1:06-cv-2490(JEI) (D.N.J., 2006), a jury sitting in the District Court in Camden, New Jersey found for Telecom Labs, Inc. and Continuant, Inc. (TLI/C) and awarded it $20 million in damages (before trebling). Avaya, a descendent of AT&T, produces enterprise level PBXs as well as maintenance services for them. TLI/C competes in the market for post-warranty maintenance for Avaya PBXs. Avaya sued TLI/C alleging that TLI/C illegally accessed the maintenance commands in Avaya PBXs. Judge Irenas dismissed these claims noting “Avaya appears determined to put TLI/C out of the market for post-warranty maintenance of Avaya PBXs, even though TLI/C occupies only a tiny sliver of that market. Yet, Avaya has not met its burden of proving that anything TLI/C did was illegal, nor has it proven that TLI/C aided its customers in breaking their contracts with Avaya.” TLI/C countersued on antitrust grounds alleging monopolization and attempted monopolization of the post-warranty maintenance markets for Avaya PBXs and for Avaya Predictive Dialer Systems (PDSs), anticompetitive tying of patches and upgrades to Avaya PBX and PDS maintenance, as well as damages arising from anticompetitive behavior.  After six and a half months of trial, the jury found that relevant antitrust markets exist for post-warranty maintenance of both PBXs and PDSs irrespective of the degree of competition