Logic Process v. Bell & Howell Pub. Sys., Civ.A. 3:96CV2414L.

Citation162 F.Supp.2d 533
Decision Date04 April 2001
Docket NumberNo. Civ.A. 3:96CV2414L.,Civ.A. 3:96CV2414L.
PartiesLOGIC PROCESS CORPORATION, Plaintiff, v. BELL & HOWELL PUBLICATIONS SYSTEMS COMPANY, Defendant.
CourtUnited States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Northern District of Texas

Bruce E. Longenecker, Law Office of Bruce E. Longenecker, Dallas, TX, for Plaintiff.

Jane Makela, Tod Bruce Edel, Michael A. Birrer, Carrington, Coleman, Sloman & Blumenthal, Dallas, TX, Deborah A. Coleman, Sherrese M. Smith, Hahn, Loeser & Parks, Cleveland, OH, for Defendants.

John L. Estes, Locke, Liddell & Sapp, Dallas, TX, pro se.

MEMORANDUM OPINION AND ORDER

LINDSAY, District Judge.

Before the court is Defendant's Renewed Motion for Judgment as a Matter of Law, filed December 8, 1999. The court, after considering the motion, response, briefs of the parties, and the record, grants Defendant's motion for the reasons stated herein.

I. Procedural and Factual Back-ground1

The trial of this action commenced on November 1, 1999, and ended after sixteen days of trial on November 23, 1999. The jury, although given an Allen charge, informed the court that it still could not reach a verdict. After determining that the jury was deadlocked and could not reach a verdict, the court declared a mistrial on November 23, 1999.

This action was removed from state court to this court on August 26, 1996. Plaintiff Logic Process Corporation ("Logic Process" or "Plaintiff") sued Defendant Bell & Howell Publications Systems Company ("Bell & Howell" or "Defendant") for allegedly engaging in a "tying" arrangement in violation of federal and Texas antitrust laws [the Sherman Act § 1, Clayton Act § 3 and the Texas Free Enterprise Act § 15.05(c)], for tortious interference with a contract, and for tortious interference with prospective business relations. Logic Process' principal business is producing and selling computer equipment, equipment upgrades, support services and maintenance contracts relating to such equipment. Bell & Howell develops and sells software which can be used on equipment such as Plaintiff's, and also markets equipment competitive to that of Plaintiff. See Pl.'s First Am. Compl. ¶ 2. Logic Process contends that in 1996, Bell & Howell discontinued making and selling powersports price book updates on cassette tape in DB7 data format. Bell & Howell decided to sell price book updates only on CD-ROM, in a UDB data format that was not readable by computers manufactured by Logic Process. Logic Process also contends that this decision by Bell & Howell violated the Texas and federal antitrust laws because dealers who had Logic Process or "Pinnacle" computers could not use the CDs as they were published. If the dealers wanted to use the price book updates that Bell & Howell published on CD, they had to acquire new computers, which Bell & Howell supplied. Logic Process also contends that Bell & Howell's decision interfered with Logic Process' monthly maintenance contracts with its mutual customers and intentionally prevented Logic Process from obtaining further business from upgrades and repairs of Logic Process computers, in addition to any additional maintenance agreements.

In response, Bell & Howell contends that its discontinuation of price book updates in DB7 data format and its decision to distribute price book updates on CD in a UDB data format did not violate any law. Bell & Howell contends that it decided to stop making and selling price book updates on tape in DB7 data format in order to improve its efficiency and to provide customers a better product at a lower price. Bell & Howell contends that making and distributing price book updates on tape in DB7 format presented many problems and limitations. Bell & Howell contends that the DB7 database used by Lightspeed software compatible with Logic Process computers was limiting and out of date, and its decision not to produce price book updates compatible with the Logic Process computers was a reasonable business decision in light of the state of technology. Bell & Howell contends that customers who bought new IBM compatible computers had more options for computer repair and maintenance than they had with Logic Process computers. Finally, Bell & Howell contends that in 1996, Logic Process had no reasonable expectation of ongoing future revenues from its dealers using the Lightspeed Dealers Management System, and that Logic Process lost customers because of its own business decisions.

The parties did not agree on much in this case but some of the following facts were stipulated to by the parties. Those facts, which are set forth in the Joint Pretrial Order, filed December 30, 1997, provide necessary background information. The stipulated facts are:

1. Plaintiff Logic Process is a Texas corporation incorporated in 1986.

2. Logic Process' business has included the assembly and sale of computers, computer components and peripherals, and computer repair and maintenance services.

3. The central processing unit ("server" or "computer") that Logic Process sold for use by motorcycle dealers uses a Motorola 680X0 processor.

4. The "Pinnacle" name was and is associated with some computers serviced by Logic Process because Pinnacle Systems, Inc., a sister company of Logic Process, sold computers based on a Motorola 680X0 processor from the mid '80's to mid 1990.

5. Logic Process and Pinnacle Systems, Inc. are both corporations owned by Logic Holdings, Inc., a corporation that is, in turn, owned by David Winstanley.

6. Logic Holdings and its subsidiaries share employees, equipment and the same leased offices in Dallas.

7. Bell & Howell is a Delaware corporation with its principal place of business in Cleveland, Ohio.

8. Bell & Howell is a subsidiary of Bell & Howell Corporation.

9. Bell & Howell develops, publishes and distributes specialized computer software, including manufacturers' parts price data in electronic form.

10. Bell & Howell acquired assets of Lightspeed Dealer Management Systems, Inc. ("Lightspeed") in August, 1994.

11. Lightspeed Dealer Management Systems, Inc. began selling application software for powersports dealerships in the mid-1980's.

12. In the mid-1980's, Lightspeed Dealer Management Systems ("LDMS") software was written to run on a computer running a "P system" operating system.

13. Beginning some time in the mid 1980's, Lightspeed, as a reseller for Pinnacle Systems, Inc., sold computers with Motorola 680X0 processors to motorcycle dealers to run its Lightspeed Dealer Management Systems. From approximately 1990-1991, Lightspeed provided similar equipment to motorcycle dealers, supplied by Logic Process.

14. Those motorcycle motorsport dealers who, as of January 17, 1996, were using LDMS software for Logic Process on Logic Process computers are sometimes referred to as "mutual customers" of Bell & Howell and Logic Process.

15. No contract ever existed between Bell & Howell and Logic Process.

Joint Pretrial Order at 7-9; Court's Charge to the Jury at 6-8.

The court ordered the parties to agree on a glossary of terms to facilitate the jury's understanding of technical words and phrases used in the field of high technology. That glossary is set forth in the Court's Charge to the Jury, filed November 23, 1999, and restated herein for convenience of the court and the parties:

1. The Lightspeed Dealer Management Systems is an integrated application sold to motorcycle dealers and other powersports retailers to keep track of their inventory, current parts price information and accounting information, as well as other relevant business information and records.

2. Lightspeed Dealer Management Systems, Inc. (sometimes called "Lightspeed Company") originated the Lighspeed Dealer Management Systems. Its assets were purchased by Bell & Howell in August 1994.

3. Pinnacle Systems, Inc. is a sister corporation of Logic Process. Pinnacle Systems originally sold servers to Lightspeed Dealer Management Systems, Inc. for resale with the Lightspeed Dealer Management Systems software.

4. A price book update is current information about the prices charged to dealers by a given manufacturer of powersports equipment, parts or accessories. Price book updates may be distributed in electronic form, formatted to be compatible with specific dealer management system software. Bell & Howell published price book updates on tape until early 1997, and on CD thereafter.

5. "Mutual customer" is a term Plaintiff used to refer to a dealership that sold motorcycles and accessories and who used the Lightspeed Dealer Management Systems in combination with a Pinnacle or Logic Process server.

6. A "personal computer" or "PC" is a digital information processing device designed for use by one person at a time. A typical PC consists of central processing components (e.g., a microprocessor and main memory) and mass data storage (such as a hard disk).

7. A "server" is a computer designed to provide data, services and functionality through a digital network to multiple users. A PC, with additional components, may be used as a server in certain applications, such as the Lightspeed Dealer Management Systems.

8. An "operating system" is a software program that controls the allocation and use of computer resources (such as central processing unit time, main memory space, disk space and input/output channels). The operating system also supports the functions of software programs, called "applications," that perform specific user-oriented tasks.

9. A "database" is a file data storage system from which stored information is obtained by command from the application software for use in a particular process.

10. An "application" or "application software" is a software program that performs specific user-oriented tasks.

11. The "P-system" is an operating system implemented by Logic Process Corporation for use with its servers.

12. A "tape" is a medium used in the computer industry for storing and transmitting data.

13. A "CD-ROM...

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