Kensington Antitrust Advisors Group

In Xerox Corp. v. Media Sciences International Inc. et al., Southern District of New York Judge Richard Holwell granted Xerox Corp.’s motion to dismiss remaining counterclaims that it maintained an unfair monopoly on the market for the ink used in its printers, in a patent infringement suit it brought against Media Sciences Inc.  Though Media Sciences, which makes generic ink for Xerox printers, contended that Xerox monopolized the ink stick market for its printers by consistently changing its designs and charging a high price for ink, the judge found that it had failed to present enough facts to warrant the monopoly claims making it to trial.  The court noted that although Xerox sells 90 to 97 percent of the ink used for its printers, it does not constitute a monopoly because ink stick sales are tied to the market for its printers and MSI has not proved Xerox has had an anticompetitive basis for raising prices on its ink.  The court further found that “while an abnormally high price-cost may signal the absence of competition under perfect market conditions […] MSI has not shown that Xerox’s low costs resulted in consumers being charged supracompetitive prices,” and MSI has not attempted to show why Xerox’s price-cost margin should be measured on the basis of ink-stick sales, rather than combined ink-stick and printer sales.”