
USCA1 Opinion

	




                            United States Court of Appeals                            United States Court of Appeals                            ______________________________                                For the First Circuit                                For the First Circuit                                _____________________                                 ____________________                                 ____________________        No. 93-1637        ___________                          DATA GENERAL CORPORATION, ET AL.,                          _________________________________                                Plaintiffs, Appellees,                                ______________________                                          v.                                          __                         GRUMMAN SYSTEMS SUPPORT CORPORATION,                         ____________________________________                                Defendant, Appellant.                                _____________________                                 ____________________                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                     ____________________________________________                          FOR THE DISTRICT OF MASSACHUSETTS                          _________________________________                [Hon. Walter Jay Skinner, Senior U.S. District Judge]                ____________________________________________________                                 ____________________                                        Before                               Torruella, Cyr and Stahl,                                   Circuit Judges.                                   ______________                                 ____________________            Charles A. Gilman, with whom Cahill,  Gordon & Reindel, Robert  A.            _________________            _________________________  __________        Alessi,  Marshall Cox,  Allen  S. Joslyn,  Immanuel  Kohn, William  T.        ______   ____________   ________________   ______________  ___________        Lifland, Gerard M. Meistrell, Roy L. Regozin, Dean Ringel, Laurence T.        _______  ___________________  ______________  ___________  ___________        Sorkin, Goodwin, Procter &  Hoar, and Coudert Brothers, were  on brief        ______  ________________________      ________________        for appellant.            Robert S. Frank, Jr., with whom Robert M. Buchanan,Jr.,             ____________________            ______________________        Brian A. Davis,  Choate, Hall &  Stewart, Jacob  Frank, and Morris  G.        ______________   _______________________  ____________      __________        Nicholson, were on brief for appellees.        _________                                 ____________________                                  September 14, 1994                                 ____________________                      STAHL,  Circuit Judge.    Grumman  Systems  Support                      STAHL,  Circuit Judge.                              _____________            Corporation ("Grumman") assigns error to the district court's            handling  of litigation  arising from  Grumman's acquisition,            duplication,  and use  of  MV/Advanced  Diagnostic  Executive            System  ("ADEX"), a sophisticated  computer program developed            by Data  General Corporation  ("DG") to diagnose  problems in            DG's MV  computers.   DG claimed  that Grumman had  infringed            DG's  ADEX  copyrights  and  misappropriated   trade  secrets            embodied  in ADEX.  A jury agreed, awarding DG $27,417,000 in            damages (excluding prejudgment interest and attorney's fees).            Grumman   contends  that   the  district   court  prematurely            dismissed  its  affirmative  defenses and  counterclaims  and            committed several errors during and after the trial.                        While this case raises  numerous issues touching on            copyright   law,  Grumman's   most  intriguing   argument  --            presented  below as both a  defense and a  counterclaim -- is            that DG illegally maintained its  monopoly in the market  for            service of  DG computers by unilaterally  refusing to license            ADEX to Grumman and other competitors.   The antitrust claims            are  intriguing  because  they present  a  curious  conflict,            namely, whether (and  to what extent) the  antitrust laws, in            the absence of any  statutory exemption, must tolerate short-            term harm to the competitive process when such harm is caused            by the  otherwise lawful  exercise of an  economically potent            "monopoly" in a copyrighted work.                                         -2-                                          2                      After a careful analysis, we affirm  on all but one            relatively minor issue concerning the calculation of damages.                                          I.                                          I.                                          __                                     BACKGROUND1                                     BACKGROUND                                     __________                      DG and  Grumman are  competitors in the  market for            service  of computers  manufactured  by DG,  and the  present            litigation   stems  from   the  evolving   nature  of   their            competitive   relationship.     DG   not  only   designs  and            manufactures computers,  but also  offers a line  of products            and services for the maintenance and  repair of DG computers.            Although  DG has  no  more  than a  5%  share  of the  highly            competitive "primary market"  for mini-computers, DG occupies            approximately  90% of  the  "aftermarket" for  service of  DG            computers.   As  a group,  various "third  party maintainers"            ("TPMs") earn roughly 7% of the service revenues;  Grumman is            the  leading  TPM  with  approximately 3%  of  the  available            service business.  The remaining equipment owners  (typically            large  companies in  the high technology  industry) generally            maintain their own computers  and peripherals, although  they            occasionallyneed outsideservice ona"time andmaterials" basis.                                            ____________________            1.  Because  the bulk  of the  fact-related issues  on appeal            concern  the  district  court's  analysis of  the  record  on            summary  judgment, we  generally  present the  evidence in  a            light most favorable to  Grumman.  See, e.g., Levy v. FDIC, 7                                               ___  ____  ____    ____            F.3d  1054, 1056 (1st Cir. 1993).  Naturally, where the story            touches  on  matters  necessarily  decided by  the  jury,  we            present the evidence in a manner most favorable to DG.   See,                                                                     ___            e.g.,  Toucet v. Maritime Overseas Corp., 991 F.2d 5, 11 (1st            ____   ______    _______________________            Cir. 1993) (review of jury's damage award).                                         -3-                                          3            A.  Computer Service: Outputs and Inputs            A.  Computer Service: Outputs and Inputs            ________________________________________                      Support service for DG computers entails  a variety            of  activities  and  a   corresponding  array  of  goods  and            services.   The  principal  activities  are  maintenance  and            repair of  computer equipment.  Maintenance  includes care of            parts  subject to failure as well  as replacement of hardware            components to bring  equipment up to  date.  Repair  involves            the diagnosis  and correction  of hardware failure.   Service            technicians  remedy  equipment  problems either  by  actually            mending a malfunctioning part (e.g., reformatting a  "broken"            disk drive) or replacing the part.                      Each  of these  support  service "outputs"  benefit            from a range  of "inputs."   For example, engineering  change            orders,  along with  certain documentation  and parts,  allow            service technicians to make technological updates to computer            hardware.  In order to identify the existence and location of            a  malfunctioning   part,  a  service   technician  may   use            diagnostics   (now   increasingly  sophisticated   software),            schematics  (maps of  the location  and function  of hardware            elements), and various types  of documentation, together with            the  technician's  own   experience  acquired  by  diagnosing            equipment   problems.     In   order  to   actually  mend   a            malfunctioning part, a  technician might fix the  part on the            spot with  routine tools  or sophisticated software  (e.g., a            software diagnostic that  can reformat a disk drive), or send                                         -4-                                          4            the part to  a repair  depot run either  by the  technician's            employer  or another service  organization.  The  repair of a            malfunctioning part often  requires very detailed information            about  the   part  (such  as  the   information  provided  by            schematics and other documentation),  and may in turn require            smaller  replacement parts.   Finally,  replacement of  parts            naturally  requires the availability of  spares.  At the core            of  this litigation is  a dispute  about Grumman's  access to            software diagnostics and other service "tools" produced by DG            for  use  in the  repair,  upgrading, and  maintenance  of DG            equipment.            B.  TPM Access to Service Inputs            B.  TPM Access to Service Inputs            ________________________________                      DG's policies concerning TPM access to DG's service            tools have  developed over  time.   As described  below, DG's            policies have evolved through three stages.                      1.  Initial Suspicion                      _____________________                      TPMs  made their debut  in the  1970s while  DG was            still  relatively new  to the computer  manufacturing market.            DG  was  suspicious of  the ability  of  TPMs, often  run and            staffed  by former  DG technicians,  to service  DG computers            without running afoul of DG's intellectual property rights or            confidentiality agreements binding on former DG employees.                      In 1975,  DG  converted its  suspicions into  legal            claims, filing suit against Lloyd Root and Robert Montgomery,            two  of its  former employees,  as well  as  Computer Systems                                         -5-                                          5            Support  Corporation  ("CSSC"),   the  TPM   that  Root   and            Montgomery  had founded  after leaving  DG.2   DG's principal            allegations were that Root  and Montgomery had breached their            employment agreements by taking DG information with them when            they  left  DG,  and  that CSSC  personnel  had  been  making            unauthorized  use  of DG  proprietary  information.   It  was            unclear, however, whether the proprietary items that CSSC was            using  were  items  sold  or  licensed  to  equipment  owners            (pursuant to agreements which  arguably permitted some use by            TPMs),3  or  items  taken  directly  from   DG  by  Root  and            Montgomery.                      Lacking promising proof to  support its claims,  DG            proposed a settlement whereby CSSC would agree to return  any            proprietary  information that Root  and Montgomery unlawfully            took  from DG, and DG would expressly authorize CSSC (and its            successors)   to  use  DG   proprietary  information  in  the            maintenance and repair of DG computers.4   CSSC accepted, and                                            ____________________            2.  For the sake of simplicity, we will refer to all three of            the 1975 defendants as "CSSC."            3.  There is some evidence  that during the 1970s DG  sold or            licensed  proprietary information  to equipment  owners under            agreements which  permitted owners to allow  third parties to            use that information to service the owners' computers.             4.  DG and  Grumman (which acquired CSSC  in 1984) vigorously            dispute the precise  scope of this authorization.   See infra                                                                ___ _____            Sections II.C.1.a and III.A.3.                                         -6-                                          6            the  parties  signed a  settlement  agreement  in 1976  ("the            Settlement Agreement").5                      2.  Peaceful Coexistence                      ________________________                      From  1976 until  some point  in the  mid-1980s, DG            affirmatively encouraged the growth  of TPMs with  relatively            liberal policies concerning TPM access to service tools.   DG            sold or  licensed diagnostics  directly to TPMs,  and allowed            TPMs to  use  diagnostics sold  or licensed  to DG  equipment            owners. DG did  not restrict  access by TPMs  to spare  parts            manufactured by DG or other manufacturers.  DG allowed (or at            least  tolerated) requests by  TPMs for DG's  repair depot to            fix malfunctioning circuit boards,  the heart of a computer's            central  processing  unit ("CPU").    DG sold  at  least some            schematics and  other documentation  to TPMs.   DG  also sold            TPMs engineering change order kits.  And finally, DG training            classes  were open to TPM  field engineers.  Grumman suggests            that  DG's liberal  policies  were beneficial  to DG  because            increased capacity (and  perhaps competition) in  the service            aftermarket would be a selling point for DG equipment.6                      3.  Increased Restrictions                      __________________________                                            ____________________            5.  Another provision of the Settlement  Agreement prohibited            CSSC from  using DG proprietary information in  the design or            manufacture of  computer equipment.  That provision is not at            issue in this case.            6.  Grumman  acquired  CSSC  in   1984,  thereby  becoming  a            successor  in  interest  to  CSSC's  rights  under  the  1976            Settlement Agreement.                                         -7-                                          7                      In the  mid-1980s, DG  altered its strategy.   With            the goal of maximizing revenues from its service business, DG            began to  refuse to  provide many  service tools  directly to            TPMs.   DG would not allow  TPMs to use the  DG repair depot,            nor   would  it   permit   TPMs   to   purchase   schematics,            documentation, "change  order" kits, or certain  spare parts.            DG no longer  allowed TPM technicians  to attend DG  training            classes.   Finally, DG developed and  severely restricted the            licensing  of ADEX,  a  new software  diagnostic  for its  MV            computers.   The  MV series  was at  once DG's  most advanced            computer hardware  and an  increasingly  important source  of            sales and service revenue for DG.                      A number of items unavailable to TPMs directly from            DG  were  either  available  to all  equipment  owners  (even            customers  of TPMs) from DG,  or were available  to TPMs from            sources other than DG.  For example, DG depot service, change            order kits, and at least some documentation were available to            all equipment  owners.  There  is also evidence  that Grumman            had  its own repair depot and that  Grumman could make use of            repair depots  run by other service  organizations (sometimes            called  "fourth  party  maintainers").   Likewise,  there  is            evidence that  TPMs could purchase at least  some spare parts            from sources other than DG.                        The situation  was different with  respect to ADEX.            DG service  technicians would use ADEX  in performing service                                         -8-                                          8            for DG equipment owners.  DG would also license  ADEX for the            exclusive use of the in-house technicians of equipment owners            who  perform most of their  own service.7   However, DG would            not  license  ADEX to  its own  service  customers or  to the            customers  of  TPMs.   Nor was  ADEX  available to  TPMs from            sources other  than  DG.    At least  two  other  diagnostics            designed  to  service  DG's  MV  computers  may  have  become            available  as   early  as  1989,  but   no  fully  functional            substitute was available when this case was tried in 1992.                      Grumman  found  various  ways  to  skirt  DG's ADEX            restrictions.   Some  former  DG employees,  in violation  of            their employment agreements, brought copies of ADEX when they            joined Grumman.  In addition, DG field engineers often stored            copies  of ADEX at the work sites of their service customers,            who  were bound  to  preserve the  confidentiality of  any DG            proprietary information  in  their possession.   Although  DG            service customers had an obligation to return  copies of ADEX            to DG should they  cancel their service agreement and  switch            to a TPM, few customers did so.  It is essentially undisputed            that Grumman  technicians used and duplicated  copies of ADEX            left  behind   by  DG  field   engineers.    There   is  also            uncontroverted evidence that Grumman actually acquired copies            of  ADEX in  this manner  in order  to maintain  libraries of                                            ____________________            7.  This latter group is comprised of Cooperative Maintenance            Organizations ("CMOs").                                         -9-                                          9            diagnostics   so  that   Grumman  technicians   could  freely            duplicate  and use  any  copy  of  ADEX  to  service  any  of            Grumman's customers with DG's MV computers.                                         -10-                                          10            C.  The Present Litigation            C.  The Present Litigation            __________________________                      In  1988,  DG filed  suit  against  Grumman in  the            United   States   District   Court   for   the   District  of            Massachusetts.8    DG  patterned  its suit  after  a  similar            action it brought against Service & Training, Inc. ("STI") in            the  United  States  District   Court  for  the  District  of            Maryland.    See Service  &  Training, Inc.  v.  Data General                         ___ __________________________      ____________            Corp.,  737  F.  Supp. 334  (D.  Md.  1990),  aff'd on  other            _____                                         _____ __  _____            grounds,  963  F.2d 680  (4th Cir.  1992)  ("STI").   STI was            _______                                      ___            another  TPM  in  the  DG  aftermarket  and  a  successor  to            Montgomery's interest  in the 1976 Settlement  Agreement.  In            one count, DG  alleged that Grumman's use  and duplication of            ADEX infringed DG's ADEX copyrights, and requested injunctive            relief, 17 U.S.C.   502 (1988), as well as actual damages and            profits, 17 U.S.C.    504(b)  (1988).  In  another count,  DG            alleged that Grumman had violated Massachusetts trade secrets            law  by  misappropriating  copies  of ADEX  in  violation  of            confidentiality agreements binding on former DG employees and            DG service customers.   On  December 29,  1988, the  district            court issued  a  preliminary injunction  prohibiting  Grumman                                            ____________________            8.  Grumman subsequently filed an action in the United States            District  Court  for  the  Northern  District  of  California            alleging that DG  had violated  California's antitrust  laws.            See Grumman  Sys. Support  Corp. v.  Data General  Corp., 125            ___ ____________________________     ___________________            F.R.D.  160  (N.D. Cal.  1988).   That court  later dismissed            Grumman's  action  on  the  grounds  that  the  claim  was  a            compulsory counterclaim to DG's copyright infringement action            pending in the District of Massachusetts.  Id.                                                       ___                                         -11-                                          11            from  using ADEX.   See  Data General  Corp. v.  Grumman Sys.                                ___  ___________________     ____________            Support  Corp.,  No.  88-0033-S  (D.  Mass.  Dec.  29,  1988)            ______________            ("Grumman I").9  The parties then prepared for trial.10              _________                      1.  Pre-Trial Issues                      ____________________                      Grumman raised a host  of affirmative defenses  and            counterclaims, all eventually rejected  by the district court            in  response to  DG's motions  for partial  summary judgment.            Three  of  these  issues  play a  pivotal  role  in Grumman's            appeal.                           a.  1976 Settlement Agreement                           _____________________________                           Grumman  alleged  that  the   1976  Settlement            Agreement authorized it (as a successor to CSSC) to "acquire,            possess, copy  and use"  all DG diagnostics,  including ADEX.            Liberally construed, Grumman's allegation of a right to "copy            and use" ADEX fairly includes an allegation that  Grumman has                                            ____________________            9.  The jury subsequently found that Grumman continued to use            ADEX  in  violation  of  the  injunction.   That  finding  is            unchallenged on appeal.            10.  In the course of the pre- and post-trial litigation, the            district court  issued a series of  published and unpublished            opinions which  contain additional background material.  See,                                                                     ___            e.g., Data General  Corp. v. Grumman Sys. Support  Corp., 761            ____  ___________________    ___________________________            F. Supp.  185 (D.  Mass. 1991)  ("Grumman II"); Data  General                                              __________    _____________            Corp. v. Grumman Sys. Support  Corp., No. 88-0033-S (D. Mass.            _____    ___________________________            May 2, 1991) ("Grumman III");  Data General Corp. v.  Grumman                           ___________     __________________     _______            Sys.  Support  Corp.,  795  F.  Supp.  501  (D.  Mass.  1992)            ____________________            ("Grumman IV");  Data General  Corp. v. Grumman  Sys. Support              __________     ___________________    _____________________            Corp., 834 F. Supp.  477 (D. Mass. 1992) ("Grumman  V"); Data            _____                                      __________    ____            General Corp. v. Grumman Sys. Support Corp., 825 F. Supp. 340            _____________    __________________________            (D. Mass. 1993) ("Grumman VI"); Data General Corp. v. Grumman                              __________    __________________    _______            Sys.  Support  Corp.,  825  F.  Supp.  361  (D.  Mass.  1993)            ____________________            ("Grumman VII").               ___________                                         -12-                                          12            a  right  to  copy and  use  DG  diagnostic  software in  the            possession of  DG equipment  owners.  Judge  Skinner rejected            the Settlement Agreement defense by adopting the reasoning of            the  STI courts, which had  rebuffed the same  arguments on a                 ___            nearly identical record.  See Grumman V, 834 F. Supp. at 482-                                      ___ _________            83.   In  the  district court  decision  in STI,  Judge  Motz                                                        ___            analyzed the language of  the Settlement Agreement, testimony            from the  lawyers  who negotiated  it,  and evidence  of  the            parties' subsequent conduct.  737 F. Supp. at 339-41.  On the            basis  of  this  evidence,  Judge  Motz  concluded  that  the            Settlement  Agreement  did  not  require DG  to  license  any            proprietary information to CSSC or its customers, nor did the            Settlement Agreement  prevent DG  from prohibiting  CSSC from            copying and  using proprietary information in  the custody of            DG service customers.  Id.11                                    ___                           b.  Antitrust Defenses                           ______________________                      Grumman also claimed that DG could not maintain its            infringement action  because DG had used  its ADEX copyrights            to violate Sections 1  and 2 of the Sherman Antitrust Act, 15            U.S.C.     1 and  2 (1988 & Supp.  IV 1992).12  Specifically,            Grumman charged that  DG misused its copyrights  by (1) tying                                            ____________________            11.  Although   the   reasoning  of   the   Fourth  Circuit's            affirmance differed  from that of Judge Motz on other issues,            the  two courts appear to  have been in  total agreement with            respect to the Settlement Agreement issue.            12.  Grumman  presented the  antitrust claims  as independent            counterclaims as well.                                         -13-                                          13            the availability of ADEX to a  consumer's agreement either to            purchase DG  support services  (a "positive tie")  or not  to            purchase support  services from TPMs (a  "negative tie"), and            (2)   willfully  maintaining  its  monopoly  in  the  support            services  aftermarket by  imposing  the  alleged  tie-in  and            refusing to deal with TPMs.                      Concerning  the tying  claim,  the  district  court            again  adopted the reasoning  of the  Fourth Circuit  in STI,                                                                     ___            this  time for  the proposition  that there  was insufficient            proof  of a  tying agreement  to withstand  summary judgment.            Grumman V, 834  F. Supp. at 484-85.  The  Fourth Circuit held            _________            that there was  no positive tie for  two independent reasons.            First,  the court noted that DG did not actually license ADEX            to its service customers.  STI,  963 F.2d at 686-87.  Second,                                       ___            the  court held that there  was not enough  evidence to prove            that  any license to use ADEX was conditioned on the purchase            of DG  support services.  Id.  at 687.  The  court noted that                                      ___            there  was  no  explicit   tying  condition  in  any  written            agreement.   Id.    The  court  also  noted  that  there  was                         ___            insufficient evidence  of unwilling  purchases of  DG support            service  so  as  to  justify  an  inference  of  an  implicit            condition; customers may  simply prefer service supported  by            ADEX  diagnostics over service that  is not.   Id. at 687-88.                                                           ___            The court  further held that there  was insufficient evidence            of  a negative tie because,  on the record  before the court,                                         -14-                                          14            "[t]he  fact that CMOs do not  purchase repair services . . .            is at least as consistent with the legitimate and independent            business decision not to purchase  unneeded services as it is            with an agreement  not to  purchase such services."   Id.  at                                                                  ___            686.                      Judge Skinner conducted his own exhaustive analysis            of the  monopolization claim, concluding that  Grumman failed            to  "assert[]  any  facts  that would  indicate  that  DG has            engaged in  any unlawful exclusionary conduct."   Grumman II,                                                              __________            761  F. Supp.  at 192.   The  court essentially  narrowed the            question to whether DG's restrictive policies with respect to            TPMs  constitute   unlawful  unilateral  refusals   to  deal,            reasoning  that  DG's actions  do not  rise  to the  level of            unlawful exclusionary conduct for several reasons.  The court            agreed  with Grumman that this case, like Aspen Skiing Co. v.                                                      ________________            Aspen  Highlands Skiing  Corp., 472  U.S. 585  (1985), raises            ______________________________            "the issue of prior promotion of competition in a market that            is  later halted,"  Grumman II,  761  F. Supp.  at 190.   The                                __________            district court  nonetheless concluded that Grumman had failed            to   demonstrate   that   DG's   restrictive   policies  have            unreasonably harmed the competitive  process.  In particular,            the  court  noted that  DG's  policies with  respect  to most            service products  do not prevent  TPMs from competing  in the            service market  because "DG  will sell its  service products,            except  [ADEX  and  schematics],  to  any  ultimate  consumer                                         -15-                                          15            regardless of whether  [the consumer] now  or later use[s]  a            TPM."  Id. at 191.   The court also observed that  "TPMs have                   ___            demonstrated  the  ability  to develop  diagnostics  [without            schematics], even  if they are not as  efficient as MV/ADEX."            Id.  Lastly, the  court suggested that the Sherman  Act would            ___            not compel  DG to disclose  its schematics,  in part  because            such compulsory disclosure would  undermine the incentives of            copyright and patent laws.  Id. at 192.13                                        ___                      In rejecting Grumman's  motion for  reconsideration            of the grant of summary judgment on the monopolization claim,            the   district  court   also  directly   addressed  Grumman's            contention  that  DG's  refusal   to  license  ADEX  to  TPMs            constitutes exclusionary conduct.  The court stated that DG's            refusal to license ADEX to  TPMs was not exclusionary because            "DG  offers to  the public a  license to  use MV/ADEX  on any            computer  owned by the customer,"  and therefore DG "`did not            withhold from one member  of the public a service  offered to            the rest[.]'"   Grumman III,  slip op. at  5 (citing  Olympia                            ___________                           _______            Equip. Leasing Co. v.  Western Union Tel. Co., 797  F.2d 370,            __________________     ______________________            377 (7th Cir. 1986), cert. denied, 480 U.S. 934 (1987)).                                 _____ ______                           c.  Federal Preemption  of State Trade Secrets                           ______________________________________________                           Claim                           _____                                            ____________________            13.  The district court also held  that neither ADEX nor DG's            schematics   were  "essential  facilities"   that  DG  (as  a            monopolist in  the service  aftermarket) must share  with its            competitors.  Id. at  191-92.  Grumman does not  assign error                          ___            to this aspect of the district court's decision.                                         -16-                                          16                      Grumman  unsuccessfully  sought  to   convince  the            district court that Section 301 of the Copyright Act of 1976,            17 U.S.C.    301 (1988 & Supp. IV 1992),  preempts DG's state            law  action  for  misappropriation  of trade  secrets.    The            district court  held that  DG's trade  secrets claim  was not            preempted because DG did not simply allege conduct equivalent            to  the  copying  and   use  which  form  the  basis   of  an            infringement  claim;  instead, DG's  trade secrets  claim was            based  on  Grumman's  acquisition  of ADEX  in  violation  of            confidentiality agreements binding on former DG employees and            service customers.  Grumman IV, 795 F. Supp. at 507.                                __________                      2.  Trial Issues                      ________________                      Stripped  of  its  affirmative   defenses,  Grumman            proceeded to  trial.  Grumman focused  its defensive energies            in two areas.  Grumman attacked DG's proof of the prima facie            elements  of copyright  infringement and  misappropriation of            trade secrets, and   attempted to undermine DG's broad-gauged            request for compensation for lost profits and disgorgement of            Grumman's MV-related profits.                           a.  Validity of Copyright Registration                           ______________________________________                      During  the trial,  it became  evident that  DG had            made  several  errors  in  registering its  ADEX  copyrights.            After  Edward Gove,  a  DG official,  testified  that DG  had            deposited with  the Copyright Office the  correct excerpts of                                         -17-                                          17            human-readable "source code,"14  Grumman introduced  evidence            that there were  some errors  in the deposits  for the  first            three  versions  of  ADEX.     In  rebuttal  testimony,  Gove            confirmed  that there  were  a number  of minor,  inadvertent            errors in the deposits that would not affect the operation of            the programs.15                      Grumman argued to the district court that any error            in a copyright deposit  renders the registration invalid, and            requested  that the court so instruct the jury.  The district            court  refused,  instructing  the  jury  instead  that minor,            inadvertent  errors in  the deposit  of excerpts  of computer            code  do   not  threaten   the  validity  of   the  copyright            registration.   As  a fall-back  tactic, Grumman  renewed its            previous request that the district court compel DG to produce            the  entire human-readable  source code  for each  version of            ADEX so  that  Grumman could  more effectively  cross-examine            Gove about  the  significance of  the errors.   The  district            court refused to do so, and later explained its discretionary            decision by finding that "Grumman had an adequate opportunity                                            ____________________            14.  "Source  code" refers to an annotated text, written in a            programming  language intelligible to humans, that represents            the  set of  instructions  comprising a  particular  computer            program.  See Computer Assocs. Int'l, Inc. v. Altai, Inc., 22                      ___ ____________________________    ___________            F.3d 32, 33  n.1 (2d  Cir. 1994); Johnson  Controls, Inc.  v.                                              _______________________            Phoenix Control Sys., Inc., 886 F.2d 1173, 1175 n.2 (9th Cir.            __________________________            1989).  "Object code" refers  to the text of the same  set of            instructions, translated  into  binary form  (a  sequence  of            zeros and ones) intelligible to the computer itself.  See id.                                                                  ___ ___            15.  The errors are described infra, note 23.                                          _____                                         -18-                                          18            to  explore the  errors  contained in  the initial  copyright            deposits,  to challenge Data  General's explanation  of those            errors,  and to argue these issues before the jury."  Grumman                                                                  _______            VI,  825 F. Supp. at 352.   Using a special verdict form, the            __            jury found that DG  had properly registered each of  the ADEX            copyrights.                           b.  Actual Damages and Profits                           ______________________________                      Grumman argued that  the jury  should identify  and            ignore  that  portion  of  Grumman's profits  which  was  not            attributable  to Grumman's use of ADEX.  To this end, Grumman            introduced evidence  that some  of its revenues  were derived            from  servicing  DG computers  that  cannot  or need  not  be            serviced  with ADEX, and that  the value of  Grumman's use of            ADEX to service customers with MV computers was distinct from            the value of other products and services Grumman  provided to            those customers.                      In  contrast,  DG  offered  evidence  that  because            equipment  owners prefer  to  purchase all  service from  one            vendor, equipment owners with both MV  computers and other DG            computers  ("mixed-equipment  customers")   would  not   have            purchased service  from Grumman if Grumman  had lacked access            to ADEX.  DG also offered evidence tending to show that, even            if Grumman did not  always use ADEX in servicing  a computer,            Grumman could not have  attracted and retained its MV-related            business had  it not been  for Grumman's  use of ADEX.   DG's                                         -19-                                          19            expert witness opined that DG's damages totaled $28,003,000 -            -  $26,364,000  in  DG's   lost  profits  and  $1,639,000  in            nonduplicative  profits16 earned  by Grumman  as a  result of            its acquisition and use of ADEX.                      Attempting to blunt at  least part of DG's sweeping            "but  for"  theory,  Grumman  asked  the  district  court  to            instruct  the  jury to  discount  that  portion of  Grumman's            profits which was not attributable to the  infringement.  The            court instructed  the jury that DG could recover that portion            of   Grumman's  profits   that   was  "attributable   to  the            infringement,"  but did not  elaborate on the  jury's task in            this regard.   Left to choose between  the parties' theories,            the  jury apparently  accepted  the essence  of DG's  theory,            though   the  total   award  of   compensatory  damages   was            $27,417,000, somewhat less than DG requested.17                        3.  Post-Trial Issues                      _____________________                      Grumman sought relief from the judgment on a number            of grounds, two of which are most relevant to this appeal.                           a.  Actual Damages and Profits                           ______________________________                                            ____________________            16.  "Nonduplicative profits"  are  those profits  earned  by            Grumman  that  would not  have been  available  to DG  in the            absence  of Grumman's  wrongful  conduct.   See  17 U.S.C.                                                           ___            504(b) (providing that copyright owner may "recover . . . any            profits  of  the  infringer  that  are  attributable  to  the            infringement and  are not taken into account in computing the            actual damages").            17.  On  the verdict slip, the jury  assessed the same amount            of damages  -- $27,417,000 --  for Grumman's misappropriation            of trade secrets.                                         -20-                                          20                      Claiming that the jury's award  was speculative and            excessive,   Grumman  moved  for  a  new  trial  or,  in  the            alternative, remittitur.  See Fed. R.  Civ. P. 59(a).  As the                                      ___            district court related:                      Grumman complains that  the jury  awarded                      speculative and excessive damages because                      it  uncritically adopted  the plaintiff's                      damage analysis in its entirety which was                      built   on   theoretically  unsound   and                      factually  inaccurate assumptions.   More                      specifically, defendant contends that the                      plaintiff's  damage  analysis  failed  to                      identify  relevant  revenues,  failed  to                      apply  a  reasonable  profit margin,  and                      failed   to  apportion   service  profits                      between  infringing   and  non-infringing                      activities.            Grumman  VI, 825  F. Supp.  at 349  (footnote omitted).   The            ___________            district court denied the motion, ruling in essence that DG's            theory of  damages was proper and  that the jury was  free to            weigh the testimony of DG's experts more heavily than that of            Grumman's experts.  Id. at 349-51.                                ___                           b.  Attorney's Fees                           ___________________                      The district court  included in its  judgment order            an award of attorney's fees under the Copyright Act, although            it  appears  that the  court has  not  yet fixed  the amount.            Grumman  argued that  the court  should not  award attorney's            fees because  DG had "elected" only  those remedies available            under Massachusetts  trade secrets law, which  does not allow                                         -21-                                          21            an award of  attorney's fees.18   The  district court  denied            the motion, finding that DG had merely sought to maximize the            judgment  by selecting the most generous body of law for each            element of its  recovery.  Grumman  VI, 825 F. Supp.  at 346.                                       ___________            The district court reasoned further that because DG would not            receive  a double award of attorney's  fees, the judgment was            in no need of correction.  Id. at 346-47.                                       ___                      4.  Issues on Appeal                      ____________________                      Grumman  renews its  arguments concerning  the pre-            trial, trial, and post-trial issues described above.  Grumman            claims  that the  district  court erred  in entering  summary            judgment on its affirmative defenses, questions the propriety            of  certain  of  the   district  court's  jury  instructions,            maintains that the jury's  award of damages lacks evidentiary            support,  and insists  that  DG is  not  entitled to  recover            attorney's fees.   After reviewing the  procedural rules that            govern this appeal, we address each of Grumman's arguments in            turn.                                         II.                                         II.                                         ___                                PROCEDURAL PRINCIPLES                                PROCEDURAL PRINCIPLES                                _____________________                      Because this  appeal turns largely on  questions of            law,  we  outline  the  corresponding   standard  of  review.            Although  the reasoning  of  the court  below  may provide  a                                            ____________________            18.  Massachusetts  law   provides  for  a  higher   rate  of            prejudgment  interest  on  compensatory  damages   than  does            federal law.                                         -22-                                          22            useful starting point for analysis, the district court's view            of the  law  is not  binding  on a  court  of appeals.    See                                                                      ___            Williams  v. Poulos, 11 F.3d 271, 278 (1st Cir. 1993) (citing            ________     ______            Dedham Water Co.  v. Cumberland Farms  Dairy, Inc., 972  F.2d            ________________     _____________________________            453, 457 (1st Cir. 1992)).  Thus, we exercise our independent            judgment in evaluating the  legal correctness of the district            court's  jury instructions.  Likewise,  we must reach our own            conclusion as to a statute's correct construction.   See FDIC                                                                 ___ ____            v. Keating, 12 F.3d 314, 316 (1st Cir. 1993).               _______                      Similarly, in reviewing a district court's entry of            summary judgment, we determine  anew whether the moving party            has shown "that there is no genuine issue as  to any material            fact  and that  [it] is entitled  to judgment as  a matter of            law."   Fed. R. Civ. P.  56(c).  See also  Bird v. Centennial                                             ___ ____  ____    __________            Ins.  Co.,  11 F.3d  228,  231 (1st  Cir.  1993).   "In  this            _________            context, `genuine' means  that the evidence about the fact is            such  that a reasonable jury could resolve the point in favor            of  the nonmoving party and `material' means that the fact is            one  that  might affect  the outcome  of  the suit  under the            governing law."  Pagano v. Frank, 983 F.2d 343, 347 (1st Cir.                             ______    _____            1993)  (citations,  internal  quotation marks,  and  brackets            omitted).    Although "we  read  the record  and  indulge all            inferences  in  a  light  most favorable  to  the  non-moving            party,"   Rivera-Ruiz v.  Gonzalez-Rivera, 983 F.2d  332, 334                      ___________     _______________            (1st  Cir. 1993),  the adverse  party cannot  defeat  a well-                                         -23-                                          23            supported motion  by "rest[ing] upon the  mere allegations or            denials of [its] pleading,"   Fed. R. Civ. P. 56(e).   If the            nonmovant  bears  the  ultimate  burden  of  persuasion  with            respect  to  its  claim  or  defense,  it  may  avert summary            judgment only  if it  identifies issues genuinely  in dispute            and  advances convincing  theories as  to their  materiality.            See  Pagano,  983 F.2d  at  347 (citing  Anderson  v. Liberty            ___  ______                              ________     _______            Lobby, Inc., 477 U.S. 242, 247-48 (1986)).  Of course, it may            ___________            be difficult for a trial court to forecast  the reaction of a            reasonable jury  to an  intricate array of  complex theories.            Nonetheless,  Rule 56 applies equally to simple cases as well            as cases  involving complicated legal principles and theories            of recovery.  See,  e.g., Amerinet, Inc. v. Xerox  Corp., 972                          ___   ____  ______________    ____________            F.2d 1483, 1490 (8th Cir. 1992) ("In complex antitrust cases,            no different or heightened standard for the grant  of summary            judgment applies."), cert. denied, 113 S. Ct. 1048 (1993).                                   _____ ______                      Finally, we note that we are at liberty to affirm a            district  court's grant  of summary  judgment "on  any ground            supported  in the record even  if the issue  was not pleaded,            tried or  otherwise referred  to in the  proceedings below.'"            de Casenave v. United  States, 991 F.2d 11, 12  n.2 (1st Cir.            ___________    ______________            1993).                                         III.                                         III.                                         ____                                      DISCUSSION                                      DISCUSSION                                      __________            A.  DG's Intellectual Property Claims            A.  DG's Intellectual Property Claims            _____________________________________                                         -24-                                          24                      We first  examine the two arguments  that strike at            the heart of DG's right  to pursue its claims:   DG's alleged            failure   to   comply   with   the   copyright   registration            requirements and  the possible preemption of  the state trade            secrets claim by Section 301 of  the Copyright Act.  We  then            discuss  Grumman's  two  affirmative  defenses  --  the  1976            Settlement Agreement Defense and the "misuse" defense -- each            of  which is intended  to undermine both  the copyright claim            and the  trade secrets claim.   Finally, we  review Grumman's            challenges  to  the  award  of  actual  damages,  infringer's            profits, and attorney's fees.                      1.  Validity of Copyright Registration                      ______________________________________                      Registration of  a work  with the  Copyright Office            provides several  benefits to a plaintiff  in an infringement            action.  First,  although copyright  protection attaches  the            day original expression is fixed in a tangible medium, see 17                                                                   ___            U.S.C.   102(a) (1988 & Supp. IV 1992), and thus an infringer            may  be liable for infringement from that day forward, see 17                                                                   ___            U.S.C.     408(a)  (1988 &  Supp.  IV  1992) (providing  that            "registration is  not a condition of  copyright protection"),            registration of the copyright is a prerequisite to suit under            the Copyright Act, 17 U.S.C.   411(a) (1988 & Supp. IV 1992).            Second, upon accepting the registrant's application, fee, and            deposit of a representative copy of the work, see 17 U.S.C.                                                            ___            408,   the   Copyright  Office   issues   a  certificate   of                                         -25-                                          25            registration, which is  admissible in an infringement  action            as "prima facie evidence of the validity of the copyright and            of the facts stated  in the certificate," 17 U.S.C.    410(c)            (1988).19    In the  case  of computer  programs  which, like            ADEX, are  either unpublished  or published only  in machine-            readable form, the copyright  owner must deposit "identifying            portions of  the program,"  generally the  first and last  25            pages  of   the  human-readable  source  code   37  C.F.R.               202.20(c)(2)(vii) (1993).20   By questioning  DG's compliance            with  the registration  requirements, Grumman  is effectively            claiming that (1) DG may not claim infringement of those ADEX            copyrights for which DG tendered a defective deposit; and (2)            even  if DG is free to bring  such claims, it is not entitled            to  a presumption  as to  the validity  of the  copyrights at            issue.                                            ____________________            19.  To demonstrate copyright infringement, DG had the burden            of  demonstrating (1) that it  owns a valid  copyright in the            versions  of ADEX alleged to  have been copied,  and (2) that            Grumman copied  constituent, original elements of  ADEX.  See                                                                      ___            Feist  Publications, Inc. v. Rural Tel. Serv. Co., 111 S. Ct.            _________________________    ____________________            1282,  1296  (1991);  Concrete  Mach.  Co.  v.  Classic  Lawn                                  ____________________      _____________            Ornaments,  Inc.,  843  F.2d  600,  605 (1st  Cir.  1988);  3            ________________            Melville  B. Nimmer  &  David Nimmer,  Nimmer on  Copyright                                                     ____________________            13.01, at 13-5 to 13-6 (1993) (hereinafter "Nimmer").                                                          ______            20.  Where the  program contains  trade secret  material, the            copyright regulations permit some  portions of the deposit to            be blocked out,  and allow a portion of the  deposit to be in            machine-readable "object  code" (lines  of zeroes and  ones).            37 C.F.R.   202.20(c)(2)(vii)(A)(2).  If the deposit includes            no blocked-out portions and consists entirely of source code,            the first and  last ten  pages of the  program will  suffice.            Id.            ___                                         -26-                                          26                      Essentially,   Grumman's   argument  is   that  the            district  court erred  in  instructing the  jury that  minor,            inadvertent errors in material deposited with a  registration            application   do   not    affect   the   validity    of   the            registration.21     DG  admits  that  there were  inadvertent            errors  in  the  material  deposited  with  the  registration            application for  ADEX Revisions  0.0 to 2.0,22  but maintains            that  the errors  are  inconsequential.23   Grumman does  not                                            ____________________            21.  The district court instructed the jury as follows:                           Because the function or registration                      [with  respect  to computer  programs] is                      symbolic,   clerical    errors   in   the                      materials deposited  with the application                      for  registration  do   not  affect   the                      validity  of  the   registration.     For                      instance,  discrepancies  in  the  dates,                      filing the wrong pages, or partial pages,                      and  similar errors,  if accepted  by the                      Copyright  Office,  do  not  impeach  the                      validity and effect of  the registration.                      If the errors were  intentional, however,                      for purposes of  deceiving the  Copyright                      Office  and  perpetrating  a  fraud,  the                      errors invalidate the registration.            22.  Grumman does not question  the validity of the copyright            registration  for  the  last  five versions  of  ADEX,  which                                    ____            Grumman  also  admitted  it  copied  and  used.    Therefore,            Grumman's  argument, if  persuasive, would  not  constitute a            complete defense  to the infringement action;  the real issue            is the extent of infringement properly subject to suit.            23.  With  respect to ADEX  Revisions 0.0,  1.0, and  2.0, DG            attempted to deposit the  first and last ten pages  of source            code (with  no trade secrets blocked-out)  in accordance with            37 C.F.R.   202.20(c)(2)(vii)(A)(2).  In all three instances,            DG deposited the correct  last ten pages but did  not deposit            the correct first  ten pages.   Nonetheless, in  the case  of            ADEX Revisions  1.0 and  2.0, there was  only one  difference            between  the deposited  pages and  the pages  DG  intended to                                         -27-                                          27            quibble with DG's denial of intent, but argues in effect that            any  error,  however  minor,  precludes a  finding  that  the            ___            plaintiff  complied  with  Section  408(b).    Alternatively,            Grumman argues that an unintentional error in the deposit may            still  invalidate a  copyright registration  if the  error is            material.   Grumman contends further that  the district court            erred  in refusing  Grumman's request  for production  of the            entire  source code for each  of the first  three versions of            ADEX, a decision which allegedly prejudiced Grumman's ability            to  demonstrate  that the  defects  in the  deposit  were not            minor.  We address these contentions seriatim.                                                 ________                           a.  Immaterial Errors in the Copyright Deposit                           ______________________________________________                      It is well established that immaterial, inadvertent            errors in  an application  for copyright registration  do not            jeopardize the validity of  the registration.  See Masquerade                                                           ___ __________            Novelty,  Inc. v. Unique Indus., Inc., 912 F.2d 663, 667-68 &            ______________    ___________________            n.5  (3d Cir.  1990); Whimsicality,  Inc. v.  Rubie's Costume                                  ___________________     _______________            Co., 891 F.2d  452, 456 (2d Cir. 1989)  (citing Eckes v. Card            ___                                             _____    ____                                            ____________________            deposit:  the Primary  Label Block  on the  copyright deposit            designates "1982"  rather than "1983" as  the copyright date.            The same error occurred in the deposit for ADEX Revision 0.0,            although  there  were three  additional  errors:   two  other            discrepancies  concerning the  Primary Label  Block, and  one            line  of code missing from the deposited pages.  The district            court observed that "the  Primary Label Block, which contains            descriptive information about the  tape, does not instruct or            direct  the computer."  Grumman VI, 825  F. Supp. at 356.  In                                    __________            addition,  Mr.  Gove, DG's  expert,  testified  that the  few            errors  in the deposited pages  would have no  bearing on the            operation of the programs.                                         -28-                                          28            Prices Update, 736 F.2d  859, 861-62 (2d Cir.  1984)); Harris            _____________                                          ______            v. Emus Records Corp.,  734 F.2d 1329, 1335 (9th  Cir. 1984);               __________________            Original Appalachian  Artworks, Inc.  v. Toy Loft,  Inc., 684            ____________________________________     _______________            F.2d 821, 828  (11th Cir. 1982);  2 Nimmer    7.20, at  7-201                                                ______            ("[A]  misstatement  or  clerical error  in  the registration            application if unaccompanied by fraud will not invalidate the            copyright nor render  the registration certificate  incapable            of  supporting an  infringement  action.").   In general,  an            error  is immaterial if its  discovery is not  likely to have            led  the  Copyright Office  to refuse  the application.   See                                                                      ___            Eckes, 736 F.2d at 861-62.24            _____                      Grumman   observes   that   the   cases   approving            substantial compliance with registration requirements concern            errors in the application, not the deposit, and suggests that                          ___________          _______            we adopt a rule demanding strict compliance with  the deposit            requirement.   Although a  different rule for  deposit errors            might be warranted if the language and underlying purposes of            the deposit  requirement were  of  a significantly  different                                            ____________________            24.  Some courts  have suggested  that a defendant  must show            that  it  was  prejudiced  by a  fraudulent  misstatement  or                           __________            omission in  a registration  application, see,  e.g., Harris,                                                      ___   ____  ______            734 F.2d at  1335 ("Absent intent  to defraud and  prejudice,            inaccuracies in copyright  registrations do  not bar  actions            for infringement."), whereas others merely require proof that            an intentional error, if  discovered by the Copyright Office,            would have  been material to the  registration decision, see,                             ________                                ___            e.g.,  Eckes, 736 F.2d at 861-62.  Any substantive difference            ____   _____            in these standards has no bearing on our decision today.                                         -29-                                          29            character than that of the application requirement, we do not            find that to be the case.                      In  the first  place, the  registration application            described in Section 409, as well as the deposit described in            Section 408(b), are both  equally mandatory components of the            registration process  outlined in Section 408(a).   Likewise,            just as  Section 409  sets forth  what an application  "shall                                                                    _____            include,"  (emphasis  added), Section  408(b)  uses  the same            phrase  to prescribe the contents  of the deposit.   There is            nothing in this language  that would prevent our interpreting            both   the   application   requirements   and   the   deposit            requirements in a consistent and practical manner.                      Nor  do  the  apparent   purposes  of  the  deposit            requirement counsel a different  result.  Although related to            the deposit requirement in Section 407, which is  designed to            further the  acquisitions policy of the  Library of Congress,            the deposit  required by  Section 408(b) serves  the separate            purpose  of  providing the  Library's  Copyright Office  with            sufficient  material  to  identify  the  work  in  which  the            registrant  claims a copyright.   See H.R.  Rep. No. 94-1476,                                              ___            94th Cong., 2d Sess. 5 (1976), reprinted in 1976 U.S.C.C.A.N.                                           _________ __            5659,  5766-70;  see  also  37   C.F.R.     202.20(c)(2)(vii)                             ___  ____            (requiring deposit of "identifying portions" of programs that            are unpublished or published only in machine-readable  form).            In other words, a  key purpose of the Section  408(b) deposit                                         -30-                                          30            requirement  is to  prevent  confusion about  which work  the            author is attempting to register.                      A  second  apparent aim  of  Section  408(b) is  to            furnish the  Copyright Office  with an opportunity  to assess            the copyrightability  of the  applicant's work.   Pursuant to            the Copyright Act, the Register of Copyrights must register a            copyright claim and issue a registration certificate "[w]hen,            after  examination, the Register . . .  determines that . . .            the  material  deposited  constitutes  copyrightable  subject            matter."   17 U.S.C.    410(a) (1988).25   Some provisions of            the   copyright  regulations   seek  to  preserve   the  same            opportunity for examination  in relation to the  deposit of a            relatively small  subset of a computer program.   In adopting            regulations encouraging  source  code deposits  for  computer            programs,   the  Copyright   Office   explained  that   "[i]n            registering   all  copyright  claims,  the  Copyright  Office                                            ____________________            25.  Because Section  410(a) does  not specify the  nature of            the  "examination,"  and  because   there  is  evidence  that            Congress intended the government to  play a role in copyright            registration  that is  much more  limited than  its extensive            responsibilities  in  overseeing  patent   registration,  the            Copyright  Office  may  have  the  discretion  to  limit  its            examination  to the  facial validity  of the  application and            deposit.  See Midway Mfg. Co. v. Bandai-America, Inc., 546 F.                      ___ _______________    ____________________            Supp. 125,  143-44 (D.N.J. 1982) (citing,  inter alia, Donald                                                       _____ ____  ______            v.  Uarco Business  Forms, 478  F.2d 764,  765 n.1  (8th Cir.                _____________________            1973)).  Nevertheless,  any such  discretion  resides  in the            Copyright  Office, not  the  applicant,  for  Section  410(a)            suggests  that an  applicant must  always give  the Copyright            Office   an   opportunity   to   undertake   an   appropriate                          ___________            examination.                                         -31-                                          31            examines   the   deposit  to   determine  the   existence  of            copyrightable authorship."   54 Fed. Reg. 13,173 (1989).   In            order  to allow the Office to continue this practice, the new            regulations provide, for  example, that when  the applicant's            deposit  contains   portions  of   the  source  code   of  an            unpublished computer  program with blocked-out  trade secrets            the  deposit must  still "reveal[]  an appreciable  amount of            original    computer    code."        See   37    C.F.R.                 ________                              ___            202.20(c)(2)(vii)(A)(2) (emphasis added).  On the other hand,            where  there are  no  blocked-out portions  in the  deposited            portions  of  a  computer  program, the  regulations  do  not            specifically require that the deposit contain "an appreciable            amount  of  original computer  code."   In  other  words, the            Copyright Office seems to have assumed that in such cases the            deposited pages are likely  to contain sufficient elements of            original expression to determine the copyrightability  of the            work at issue.  At any rate,  it appears that Congress viewed            the deposit requirement as  a means of collecting information            that the Copyright Office  may use in resolving  the question            of copyrightability for the purposes of Section 410.26                                            ____________________            26.  Another  objective of  Section 408(b)  might be  to give            would-be  infringers  notice of  the  extent  of their  civil            liability.    Yet, this  can  hardly have  been  an important            legislative  goal  because  a  copyright  owner  is  free  to            register any time before  filing suit, even after the  act of                                                        _____            infringement.  See 17  U.S.C.   408(a); Twentieth Century-Fox                           ___                      _____________________            Film  Corp. v.  Dunnahoo,  637 F.2d  1338, 1342-43  (9th Cir.            ___________     ________            1981); see also Olan  Mills, Inc. v. Linn Photo  Co., 23 F.3d                   ___ ____ _________________    _______________            1345,  1349   (8th  Cir.   1994);  Konor  Enters.   v.  Eagle                                               ______________       _____                                         -32-                                          32                      Neither    of    these   objectives    differs   so            significantly from those of the application requirement as to            justify  a  departure  from  the  rule  governing application            errors.    Quite  naturally,  one  important  function  of  a            registration application is to identify the work in which the            applicant claims a  copyright.  See 17  U.S.C.   409 (1988  &                                            ___            Supp. IV 1992) (requiring application to include, inter alia,                                                              _____ ____            title  of work,  dates of  completion and  publication, along            with "any  other information  . .  . bearing upon  the .  . .            identification of the work").  Furthermore, like the deposit,            the    application   also    provides   some    evidence   of            copyrightability,  because it  must identify  any preexisting            work from which the author borrowed in creating a compilation            or derivative  work.  See  17 U.S.C.    409(9).   Indeed, the                                  ___            Copyright  Office may often be in a better position to assess            the  originality of the work  being registered by reviewing a                                            ____________________            Publications,  Inc., 878 F.2d 138,  140 (4th Cir.  1989).  In            ___________________            addition,  because   Congress  had  included   a  recordation            requirement elsewhere  in the copyright laws  until 1988, see                                                                      ___            17 U.S.C.A.   205(d)  (West 1977) (providing that recordation            of  transfer   of  copyright  ownership  is  prerequisite  to            infringement  suit by transferee), but  did not do  so in the            context of Section 408, we may infer that affording notice to            potential infringers was not Congress's primary motivation in            drafting   Section  408(b).      See  City   of  Chicago   v.                                             ___  __________________            Environmental Defense Fund, 114 S. Ct. 1588, 1593 (1994) ("It            __________________________            is generally presumed  that Congress  acts intentionally  and            purposely when it includes particular language in one section            of a statute but  omits it in another.")  (citation, internal            quotation marks, and brackets  omitted); United States ex rel                                                     ____________________            S.  Prawer & Co.  v. Fleet Bank,  24 F.3d 320,  329 (1st Cir.            ________________     __________            1994) (similar).                                         -33-                                          33            list  of  preexisting  works  than by  conducting  a  cursory            inspection  of   the  deposited   material.    And   yet,  an            inadvertent  failure  to  identify  preexisting  works  on an            application  is  treated   no  differently  from   any  other            application  error.   See, e.g.,  Toy Loft,  684 F.2d  at 828                                  ___  ____   ________            (analyzing in  similar fashion  failure to  mention co-author            and failure to mention preexisting works).                      We conclude  that  there is  no support  in law  or            reason for  a  rule that  penalizes  immaterial,  inadvertent            errors in a  copyright deposit.27   Accordingly,  we find  no            flaw in the district court's instruction that such errors "do            not impeach the validity and effect of the registration."                           b.  Material Errors in the Copyright Deposit                           ____________________________________________                                            ____________________            27.  Contrary to Grumman's vigorous assertions,  this court's            opinion in Unistrut  Corp. v.  Power, 280 F.2d  18 (1st  Cir.                       _______________     _____            1960),  does  not compel  a different  rule.   In  that case,            plaintiff  claimed infringement  of the  1942 edition  of its            catalog but apparently sought  to prove unauthorized  copying            at trial  by demonstrating the similarity  of the defendant's            work  to  the 1943  edition  of  plaintiff's catalog,  "which            admittedly contained  some, unspecified, additions."   Id. at                                                                   ___            23.   Because "there  was no proof that  copies of this later            edition were  deposited with the Copyright  Office, and there            was no proof that the infringed material was contained in the            1942  edition," we held that there  was insufficient proof of            infringement  of  the earlier  edition.    Id.   Unistrut  is                                                       ___   ________            distinguishable in at least two respects.  First, our opinion            in Unistrut  does not  suggest that the  plaintiff mistakenly               ________            deposited  the 1943  edition  when attempting  to register  a            copyright  claim concerning the 1942 edition; hence, Unistrut                                                                 ________            cannot  serve  as authority  on  the  legal ramifications  of            registration errors.  Second, in  this case there is evidence            that sections of source  code from ADEX Revisions 0.0  to 2.0            were  among the  pages deposited  with the  Copyright Office,            ____            even  if other portions  of the deposited  material came from            other computer programs.                                         -34-                                          34                      The law is not quite as settled as to the effect of            an application  error  that is  inadvertent  but  nonetheless            material.    No  court  has  suggested  that  a  registration            premised  in part  on an  unintentional material  error would            fail  to satisfy  the jurisdictional  requirement  of Section            411(a).  At the  same time, at least one court  has suggested            that in  such  instances  the proper  approach  might  be  to            prevent  the  plaintiff from  exploiting  the  presumption of            validity  that ordinarily attaches  to a registered copyright            under Section 410(c).   Masquerade Novelty,  912 F.2d at  668                                    __________________            n.5  (dictum).  We assume for argument's sake that a material            error  in a  copyright  deposit, even  if unintentional,  may            destroy the presumption of validity.                           c.   Refusal  to Compel  Production of  Source                           ______________________________________________            Code            ____                      Grumman  next argues that  it was unfairly deprived            of  an opportunity to prove  that the errors  in the deposits            were   material.    Specifically,  Grumman  claims  that  the            district court abused its  discretion when, during the trial,            it  refused to compel DG  to produce roughly  40,000 pages of            source code  (on approximately 33,000 floppy  disks) for each            of  the first  three  versions of  ADEX (0.0  to  2.0).   See                                                                      ___            Geremia v. First Nat'l Bank, 653 F.2d 1, 5-6  (1st Cir. 1981)            _______    ________________            (reviewing denial of mid-trial  discovery motion for abuse of            discretion).                                          -35-                                          35                      Grumman renewed its unsuccessful pre-trial requests            for the source code after Edward Gove, a DG witness, admitted            on  cross-examination  that  there  were  some  discrepancies            between the  source code deposited with  the Copyright Office            and  the actual  source code  for ADEX  0.0 to 2.0,  and then            explained in rebuttal testimony  that those errors were minor            and  of no  consequence to  the operation  of  the diagnostic            program  as a whole.  In response  to the renewed request, DG            provided Grumman  with those portions of the source codes for            ADEX Revisions 0.0 to  2.0 necessary to conduct  a character-            by-character  comparison of  the intended deposits  of source            code   with  those   portions   of   source   code   actually            deposited.28    Nonetheless,  Grumman insisted  that  it  was            entitled to the entire source code for all three versions.                      Grumman apparently sought the three  sets of source            code  because it believed that  analysis of the entire source            code would  permit a more effective  cross-examination of the            DG witness  about the  magnitude of the  discrepancies during            DG's rebuttal.  It seems that Grumman had one main  goal:  it            believed  it  might  be  able  to  show  that,  although  the            discrepancies  were  few in  number  and  seemingly minor  in            character,  ADEX would  not function  properly if  the source                                            ____________________            28.  In its brief, DG states that "Data General collected and            provided to Grumman copies  of the entire source code  of all            of  the sub-programs that were, or should have been, filed in            the  Copyright Office for  each of the  relevant revisions of            MV/ADEX."  Grumman does not challenge this assertion.                                         -36-                                          36            code deposited  with the  Copyright Office had  been inserted            into the versions of ADEX DG intended to register.                      The marginal  benefit to Grumman  of obtaining  the            balance  of the source code was at best highly uncertain, and            all  indications  were that  such  a  test would  produce  no            compelling results.   Even if Grumman  could demonstrate that            inserting  the errors would impair  the operation of ADEX, it            is  extremely  unlikely   that  this   would  establish   the            materiality  of the errors.  Grumman does not allege that any            of the errors,  if discovered, would  have led the  Copyright            Office  to refuse registration of DG's copyright claims.  Nor            does  Grumman contend  that the  Copyright Office  would have            been  unable to use the  correct portions of  the deposits to            identify  the  works  DG  intended  to  register  or  make  a            preliminary determination concerning the  copyrightability of            those  works.29    In  contrast, DG  produced  evidence  that                                            ____________________            29.  If a  showing  of prejudice  is  necessary to  enable  a            defendant  to use  a registration  error as  a defense  to an            infringement action, see supra note 24, Grumman has failed in                                 ___ _____            this  respect as well because  Grumman has not  shown that it            was misled as to  the copyrightability of ADEX  Revisions 0.0            to 2.0.  It appears that Grumman has always acted in a manner            consistent  with  the  belief  that  each  revision  of  ADEX            contains  copyrightable  elements.    In  these  proceedings,            moreover, Grumman  has never seriously argued  that the first            three  versions  of  ADEX  are entirely  devoid  of  original            computer  code, and  has consistently  admitted that  it made            identical copies  of the entire  contents of each  version of            ADEX at issue in this action.   Accordingly, we are unable to            see why Grumman  was disadvantaged by  bearing the burden  of            proving that there are no copyrightable elements in the first            three versions of  ADEX, a  task even Grumman  seems to  have            forsworn.                                         -37-                                          37            production of  the requested  material would be  an extremely            cumbersome process,  a point  Grumman does not  contest.   We            find no abuse of discretion  in the district court's decision            to deny Grumman's mid-trial discovery request.                      2.  Preemption of Trade Secrets Claim                      _____________________________________                      Seeking to avoid  the additional damages associated            with  the  trade secrets  remedies  selected  by DG,  Grumman            argues  that the state claim  is preempted by  Section 301 of            the Copyright Act, 17 U.S.C.   301(a).                      Section 301(a) precludes  enforcement of any  state            cause of action which is equivalent in substance to a federal            copyright infringement claim.30   See generally Gates  Rubber                                              ___ _________ _____________            Co. v. Bando  Chem. Indus.,  Ltd., 9 F.3d  823, 846-47  (10th            ___    __________________________            Cir.  1993); Trandes Corp. v.  Guy F. Atkinson  Co., 996 F.2d                         _____________     ____________________            655,  658-60 (4th Cir.), cert. denied, 114 S. Ct. 443 (1993);                                     _____ ______            1  Nimmer    1.01[B][h],  at 1-35  to  1-36.1.   Courts  have               ______            developed  a  functional  test  to  assess  the  question  of            equivalence.  "[I]f a state cause of action requires an extra            element,  beyond  mere  copying,  preparation  of  derivative            works, performance,  distribution or display, then  the state            cause  of action  is  qualitatively different  from, and  not                                            ____________________            30.  In  pertinent  part, Section  301(a) provides  that "all            legal or equitable rights  that are equivalent to any  of the            exclusive  rights within the general scope of copyright . . .            are  governed exclusively  by  this title.    [N]o person  is            entitled  to any such right  or equivalent right  in any such            work under the common law or statutes of any State."                                         -38-                                          38            subsumed within, a  copyright infringement claim and  federal            law will not preempt the state action."  Gates Rubber, 9 F.3d                                                     ____________            at 847 (citing  Computer Assocs. Int'l, Inc.  v. Altai, Inc.,                            ____________________________     ___________            982 F.2d 693, 716 (2nd Cir. 1992)).                      Not  every "extra  element" of  a state  claim will            establish a qualitative variance between the rights protected            by federal copyright  law and those  protected by state  law.            For  example, a  state  claim of  tortious interference  with            contractual  relations may require  elements of awareness and            intentional interference not necessary for proof of copyright            infringement.   And  yet, such  an  action is  equivalent  in            substance  to   a  copyright  infringement  claim  where  the            additional  elements  merely  concern  the  extent  to  which                                                   ___  ______  __  _____            authors and their licensees can prohibit unauthorized copying            by third parties.   Harper & Row, Publishers, Inc.  v. Nation                                ______________________________     ______            Enters., 723 F.2d  195, 201  (2d Cir. 1983),  rev'd on  other            _______                                       _____ __  _____            grounds,  471  U.S.  539  (1985).    Similarly, a  state  law            _______            misappropriation  claim  will  not  escape  preemption  under            Section  301(a) simply  because a  plaintiff must  prove that            copying was  not only  unauthorized but  also "commercial[ly]            immoral[,]"  a  mere "label  attached  to  [the same]  odious            business conduct."   Mayer v. Josiah  Wedgwood & Sons,  Ltd.,                                 _____    ______________________________            601  F. Supp.  1523, 1535  (S.D.N.Y. 1985).   Nonetheless,  a            trade secrets claim that requires proof of a breach of a duty            of  confidentiality  stands on  a  different  footing.   Such                                         -39-                                          39            claims are not preempted  because participation in the breach            of a duty of confidentiality -- an element that forms no part            of  a  copyright  infringement  claim  --  represents  unfair            competitive   conduct   qualitatively  different   from  mere            unauthorized copying.   See Gates  Rubber, 9 F.3d  at 847-48;                                    ___ _____________            Trandes Corp., 996 F.2d at 660; Computer Associates, 982 F.2d            _____________                   ___________________            at 717; S.O.S.,  Inc. v.  Payday, Inc., 886  F.2d 1081,  1090                    _____________     ____________            n.13 (9th Cir. 1989).31                      DG's  trade secrets  claim fits  comfortably within            this  category.   To  demonstrate misappropriation  of  trade            secrets  under Massachusetts  law,  DG must  prove that  "(1)            MV/ADEX is a  trade secret; (2) Data  General took reasonable            steps  to preserve  the secrecy of  MV/ADEX; and  (3) Grumman            used   improper   means,   in  breach   of   a   confidential            relationship, to acquire and use the trade secret."   Grumman                                                                  _______            VI, 825  F. Supp.  at 357 (citing,  inter alia, J.T.  Healy &            __                                  __________  _____________            Son, Inc. v.  James A. Murphy  & Son,  Inc., 260 N.E.2d  723,            _________     _____________________________            729-31 (Mass. 1970)).  The district court instructed the jury                                            ____________________            31.  Grumman  insists  that   acquisition  of   copyrightable            software  in  violation  of  confidentiality   agreements  is            equivalent to  unauthorized copying  where, as appears  to be            the  case here,  the defendant  does not  actually learn  the                                                               _____            trade  secrets embodied  in  the software.   The  qualitative            difference between unauthorized copying  and such acts as the            discovery  of  wrongfully  acquired  trade  secrets  and  the            illegal use of that  knowledge may be more striking  than the            difference    between    unauthorized   copying    and   mere            participation in  the breach of a  confidentiality agreement.            But  we cannot agree that  the latter relationship  is one of            equivalence.                                         -40-                                          40            that "wrongful acquisition" is  an element of a Massachusetts            trade  secrets  claim, and  that  "[a]cquisition  of a  trade            secret is wrongful .  . . if it is by theft of property known            to belong  to another,  or  by knowing  participation in  the                                           _______  _____________ __  ___            breach of an express or implied confidentiality agreement by,            ______ __ __ _______ __ _______ _______________ _________            for instance, a former employee or customer of Data General."            (Emphasis  added.)   Grumman does  not assign  error  to this            portion  of the  charge, which  thus becomes  the law  of the            case.  See United States v.  Connell, 6 F.3d 27, 30 (1st Cir.                   ___ _____________     _______            1993)  (explaining  that  unchallenged  legal  decisions  are            ordinarily  unassailable  at  later  stages  in  litigation).            Furthermore, DG's  theory was precisely that Grumman acquired            ADEX  by  participating  in  the  breach  of  confidentiality            agreements binding on former  employees and service customers            of  DG.32   Because the  Copyright Act  does not  prevent the            states from imposing liability for such conduct, the district            court was  correct  to spare  DG's trade  secrets claim  from            preemption under Section 301(a).                      3.  1976 Settlement Agreement Defense                      _____________________________________                      Grumman   denies   its   liability  for   copyright            infringement and  misappropriation of trade  secrets, arguing            that  the  Settlement Agreement  contains a  license allowing            Grumman to copy and use ADEX in the maintenance and repair of                                            ____________________            32.  The relevant contract language appears infra, note 37.                                                          _____                                                      -41-                                          41            DG computers.   The district  court granted  DG's motion  for            partial  summary  judgment on  this  issue,  and Grumman  now            appeals  that decision  on two  alternative grounds:  (1) the            Settlement Agreement unambiguously  grants Grumman a  license            to  use ADEX;  or (2)  the Settlement  Agreement is  at least            ambiguous, and conflicting extrinsic evidence about the scope            of  the   license  presents  a  factual   dispute  worthy  of            resolution by a jury.                              a.  Maryland Contract Law                           _________________________                      The  parties agree  that the  Settlement Agreement,            executed in  Maryland, is governed by  Maryland contract law.            Maryland  courts  do  not  follow the  subjective  theory  of            contracts, which aims  to discover the  actual intent of  the            parties even  at the expense  of unambiguous language  to the            contrary.  See Hershon  v. Gibraltar Bldg. & Loan  Ass'n, 864                       ___ _______     _____________________________            F.2d  848,  851 (D.C.  Cir.  1989)  (applying Maryland  law).            Instead, Maryland subscribes to  the objective approach.  See                                                                      ___            id.   Under that  approach, a  court  may consider  extrinsic            ___            evidence  only in  determining whether  contract  language is                                           _______            ambiguous.  See id. at  852.  However, as long as  the result                        ___ ___            is  objectively reasonable,  a  court may  not use  extrinsic            evidence  "to interpret facially explicit contractual terms."            Id. at 851-52.   See also General Motors Acceptance  Corp. v.            ___              ___ ____ ________________________________            Daniels, 492 A.2d 1306, 1310 (Md. 1985).            _______                                         -42-                                          42                      Where  contract  terms are  ambiguous, a  court may            look  to  extrinsic  evidence   in  order  to  ascertain  the            intention of  the parties  and, if successful,  interpret the            contract  as a matter of  law.  See  Collier v. MD-Individual                                            ___  _______    _____________            Practice  Ass'n, 607  A.2d 537,  541 (Md.  1992); Truck  Ins.            _______________                                   ___________            Exch. v. Marks Rentals, Inc., 418 A.2d 1187, 1190 (Md. 1980).            _____    ___________________            If,  after such  examination,  the meaning  of the  ambiguous            terms remains in genuine dispute, and the dispute is material            to  the outcome  of  the  claim  or  defense  at  issue,  the            ambiguity  must be resolved by  the trier of  fact.  See id.;                                                                 ___ ___            Monumental  Life Ins. Co.  v. United States  Fidelity & Guar.            _________________________     _______________________________            Co., 617 A.2d  1163, 1174  (Md. Ct. Spec.  App.) ("Only  when            ___            there  is a bona fide ambiguity in the contract's language or                        ____ ____            legitimate   doubt   as   to  its   application   under   the            circumstances  is the contract submitted to  the trier of the            fact for  interpretation."), cert. denied, 624  A.2d 491 (Md.                                         _____ ______            1993).33                                            ____________________            33.  Grumman asserts that  any ambiguity must  be interpreted            against  DG  as  the  drafter of  the  Settlement  Agreement.            However, because  the Settlement Agreement is  the product of            negotiations by sophisticated parties represented by counsel,            this "`secondary rule  of construction .  . . perhaps  should            have  but  slight force.'"    Acme  Markets, Inc.  v.  Dawson                                          ___________________      ______            Enters., 251  A.2d  839, 847  (Md.  1969) (quoting  Rossi  v.            _______                                             _____            Douglas,  100 A.2d  3, 6  (Md. 1953)).    In any  event, this            _______            interpretive presumption has  no application where, as  here,            the record contains extrinsic evidence sufficient to discover            the  intention of  the parties  to the  Settlement Agreement.            See Pacific Indem. Co. v. Interstate Fire & Casualty Co., 488            ___ __________________    ______________________________            A.2d 486,  497 (Md. 1985); St. Paul Fire & Marine Ins. Co. v.                                       _______________________________            Pryseski, 438 A.2d 282, 288 (Md. 1981).            ________                                         -43-                                          43                           b.  Areas of Agreement                           ______________________                      In order to focus  our analysis of DG's entitlement            to  summary  judgment,  we   first  determine  the  reach  of            Grumman's  contentions  in light  of  the  existing areas  of            agreement.                      In  the first  place,  the parties  agree that  the            existence  and scope of a  license turn on the interpretation            of  the  "maintenance or  repair"  exception  to the  general            prohibition  of paragraph four  of the  Settlement Agreement,            which provides that Grumman's predecessor "will not, directly            or indirectly, copy  or utilize `Proprietary  Information' of            DG  for the design or  manufacture of computers  or any other            purpose."34    In addition,  DG  admits  that the  Settlement            Agreement  gives  Grumman  a  right   to  use  some  of  DG's                                            ____________________            34.  In its entirety, paragraph four reads as follows:                           4.    Defendants [CSSC,  Lloyd Root,                      and Robert Montgomery] agree, jointly and                      severally, that they  will not,  directly                      or    indirectly,    copy   or    utilize                      "Proprietary Information" of DGC  for the                      design or manufacture of computers or any                      other purpose except  [i] maintenance  or                      repair    of    DGC    equipment,    [ii]                      installation and integration of equipment                      manufactured or sold  by companies  other                      than   DGC,   or  [iii]   other  purposes                      permitted    by   any    proprietary   or                      confidentiality  legends  accompanying or                      made  part of  any data  or documentation                      comprising    Proprietary    Information.                      "Proprietary  Information"  of DGC  shall                      mean  data  and  documentation  which  is                      marked confidential or proprietary to DGC                      by appropriate legend.                                         -44-                                          44            proprietary  information  for  some  purposes.   Although  DG            denies that  the Settlement  Agreement allows Grumman  to use            ADEX  itself,  DG  nonetheless  admitted in  its  answers  to            Grumman's  request  for  admissions  "that, as  part  of  the            settlement of  the CSSC litigation, Data  General agreed that            CSSC could use Data  General proprietary information that was            defined in the  Agreement and  the nature of  which was  then            understood  by and agreed to  by the parties,  to maintain or            repair  Data  General  computers."    While   the  Settlement            Agreement does not bear  many of the traits of  a traditional            licensing  agreement, it  does grant  some permission  to use            DG's   intellectual    property,   at   least    in   certain            circumstances,   and   therefore   creates   some   type   of            "license."35   Consequently, Grumman's  defense turns  on the            scope of the license.36            _____                                            ____________________            35.  Because neither party has  offered a legal definition of            a  license, we  will regard  the term  as carrying  its usual            definition:    permission to  use  the  property of  another.            Black's  Law Dictionary 829-30 (5th ed. 1979).  A license can            _______________________            be general,  with few or  no restrictions, or  quite limited.            The  use of  the  word "license"  in  a contract  is  clearly            evidence of an intent  to permit use, but the  absence of the            word  is not dispositive, as long  as other contract language            grants some permission  to use.  Cf. 3 Nimmer    10.03[A], at                                             ___   ______            10-38  (explaining  that  "[a] nonexclusive  license  may  be            granted  orally,  or  may  even  be  implied  from  conduct")            (footnotes omitted).            36.  DG argues that the Settlement Agreement was not intended            to  apply  to proprietary  information  created  by DG  after            settlement  of the  1975  lawsuit.   We  cannot agree.    The            language  "`Proprietary Information'  of  DGC" strikes  us as            unambiguous,  and unqualifiedly  embraces all  DG proprietary                                                      ___                                         -45-                                          45                      Also worthy of note are undisputed facts concerning            the nature of Grumman's acquisition and use of ADEX.  Grumman            did not  simply gain  access to  copies of  ADEX left  at the                                  ______            sites of  former DG service customers solely  for the purpose            of using  on-site maintenance  tools to service  computers at            that  site.   Rather,  Grumman acquired  copies of  ADEX from                                           ________            former  service  customers in  an  effort to  expand  its own            library of MV diagnostic software,  which Grumman technicians            freely copied  and used  in servicing  the  computers of  any            Grumman customer with  MV equipment.   Moreover, there is  no            evidence that Grumman acquired  ADEX from equipment owners at            a time when those equipment owners were also customers of DG.            Nor  is there  evidence that  Grumman acquired  ADEX directly            from  DG,  or  from current  or  former  CMO  customers.   In            addition, the  record reveals that DG  service customers were            contractually bound  both to  prevent ADEX from  falling into            the hands of third parties such as  TPMs and to return copies            of ADEX to DG  after the termination of the  relevant service            agreement.37    Thus,  Grumman   acquired  ADEX  from   those                                            ____________________            information, whether in  existence in 1976 or not.   However,            even  if the  phrase were  ambiguous, an  examination  of the            extrinsic  evidence  reveals  that  DG  would  still  not  be            entitled to summary judgment on  this basis because there  is            extrinsic evidence that would allow a reasonable jury to find            that  the  Settlement  Agreement  was intended  to  apply  to            information in the future.            37.  For  example, in  one  version of  DG's On-Call  Service            Agreement, service customers agreed  "NOT TO DISCLOSE OR MAKE            AVAILABLE TO ANY THIRD PARTY THE PROPRIETARY ITEMS [installed                                         -46-                                          46            customers who no longer had lawful  possession of the program            and had no right to transfer it.38                       The  question  we  must  resolve  is  whether   the            "maintenance  or repair" exception authorized Grumman both to            gain access to and  acquire copies of ADEX in  the possession            of former  DG service customers  despite the fact  that these            customers  had agreed  not only  to prevent  such third-party            access but  also to  return copies  of ADEX  to DG after  the            termination of their service contract.                                            ____________________            at customer  locations by DG;]  AND . .  . TO RETURN  ALL THE            PROPRIETARY    ITEMS    TO    [DG]    UPON    EXPIRATION   OR            CANCELLATION/TERMINATION OF THIS AGREEMENT."            38.  Grumman  also acquired  copies  of ADEX  from former  DG            employees who brought  copies of  the program  with them,  in            violation of  their employment agreements.   Grumman does not            maintain  that the Settlement Agreement gives it the right to            duplicate and use copies of ADEX acquired in this manner.                                         -47-                                          47                           d.  Scope of the License                             ________________________                      The plain language of the Settlement Agreement does            not answer our question.  Despite the fact that the exception            anticipates  that   Grumman  will   "copy   or  utilize"   DG            proprietary information  for the  "maintenance and repair  of            DGC  equipment," the  Settlement Agreement  does not  specify            whether it merely refers to Grumman's right to gain access to            maintenance tools it finds at a customer  site (including the            routine  copying  and  use inherent  in  the  operation  of a            computer program),  or whether the  exception somehow  allows            Grumman to acquire such tools for the service of DG computers            at other sites.  Similarly, the Settlement Agreement contains            no prescription for resolving potential conflicts between the            "maintenance  or repair"  exception  and  provisions in  DG's            Service Agreement  prohibiting third-party access  during the            term  of  the  Agreement  and  retention  of  DG  proprietary            information  thereafter.     Accordingly,  we   turn  to  the            extrinsic evidence in the record in an attempt to resolve the            ambiguity.                      Even  when  viewed in  a  light  most favorable  to            Grumman, the record evidence makes  clear that the parties to            the   Settlement  Agreement  intended  the  "maintenance  and            repair" exception to function as what we shall call a "third-            party access agreement," allowing CSSC, Grumman's predecessor            in interest,  to gain access to  proprietary information that                                         -48-                                          48            DG sold, licensed,  or otherwise  entrusted to  owners of  DG            equipment.   For example, when  called to testify  in the STI                                                                      ___            litigation,  Edward Canfield,  CSSC's  attorney at  the time,            used these words  to describe his  contemporary understanding            of the  "maintenance and repair" exception:  "If the customer            had it,  [CSSC] had a right  to use it."39   In addition, the            language of DG licensing  agreements in the 1970s as  well as            the pleadings in the 1975 litigation strongly corroborate the            view  that the  settlement  negotiations primarily  concerned            CSSC's right to use  proprietary information in the  hands of            DG  equipment  owners.     As  late  as  1976,   DG  licensed            proprietary maintenance information to equipment owners under            an agreement  which specifically  allowed licensees  to grant            access  to   third  parties  "on  LICENSEE's   premises  with            LICENSEE's  permission for  purposes specifically  related to            LICENSEE's use of  the Licensed Program."   Moreover, in  its            1975  counterclaim,  CSSC  intimated  that DG  had  begun  to            undermine the ability of  TPMs to gain access to  maintenance            information in  the hands of equipment  owners, alleging that            DG  had attempted  "to prevent  owners of  DGC Mini-computers            from having  their equipment  serviced and maintained  by any            competitor of DGC  . . . by restricting the  use those owners            make of their owner maintenance information."                                            ____________________            39.  The district  court accepted a transcript  of Canfield's            testimony  in STI as part  of the summary  judgment record in                          ___            this case.                                          -49-                                          49                      There is also specific evidence that the parties to            the  Settlement  Agreement  were  not  negotiating about  the            ongoing transfer of proprietary information directly from  DG            to CSSC.   For example, during the  STI trial, counsel for DG                                                ___            asked Canfield  whether, under  the Settlement Agreement,  DG            had  an "obligation  to  give [CSSC]  something."   "No sir,"            replied  Canfield, "Data General was  not offering to give us            anything."                      The   nature  of   the  "maintenance   and  repair"            exception  as  a  third-party  access  agreement  has several            ramifications.  As  a provision designed to ensure  access to            Grumman,  the  exception  was arguably  intended  to override            contrary    restrictions    in   proprietary    legends   and            confidentiality agreements.   Indeed, there is  evidence that            this was the case.  A  letter to Canfield from Carl Kaplan, a            lawyer who  represented  DG in  the settlement  negotiations,            outlined  the  proposed  settlement,  stating  that  improper            utilization of  DG proprietary information "would  be the use            of  that information other than  as marked by  DGC or without                                                               __            DGC's express written permission."  (Emphasis added.)  Kaplan            added  that "[u]se  of  DGC proprietary  information for  the            maintenance of DGC equipment would expressly be permitted the            defendants."    Id.    In  addition,   Canfield's  deposition                            ___            testimony suggests  that his primary  concern was  for DG  to            guarantee  CSSC's  right   to  use  proprietary   information                                         -50-                                          50            distributed  to DG  equipment owners,  notwithstanding future            restrictions  on  third-party  access  to  such  information.            Thus, a  jury could  reasonably conclude that  the Settlement            Agreement allowed  Grumman to  gain access to  information in            the  hands  of  DG  equipment   owners  for  the  purpose  of            maintaining DG computers, even  if equipment owners generally            could  not  allow  third  parties access  to  DG  proprietary            information.                      Characterizing  the  exception  as   a  third-party            access  agreement  also means  that  Grumman's  right to  use            copies  of ADEX in the  possession of DG  equipment owners is            necessarily  derivative of  the  rights  of  those  equipment            owners.   As  a consequence,  Grumman only  has the  right to            operate a customer's  copy of  ADEX for the  benefit of  that            _______            customer; there is no basis for the proposition  that Grumman            can use its  third-party access rights  to acquire copies  of                                                       _______            ADEX for unlimited copying  and use in the service of  any MV            computer.    Indeed,  this   was  the  import  of  Canfield's            testimony in STI.  Referring to a CSSC customer as a "party,"                         ___            Canfield stated  that he understood the  Settlement Agreement            to  allow  "[CSSC]  to  use whatever  [was]  on  the  party's            equipment  . .  .  for the  repair  and maintenance  of  that                                                                     ____            party's equipment."    (Emphasis added).40   Furthermore,  to            _______ _________                                            ____________________            40.  We note in passing that STI appeared to adopt Canfield's            statement  in the course of  the STI trial.   When Judge Motz                                             ___            characterized   Canfield's   testimony   as    stating   that                                         -51-                                          51            the extent that an equipment owner no longer has the right to            possess copies of ADEX, as in the case of a former DG service            customer,   Grumman's   rights   as   a   third   party   are            extinguished.41                      In   summary,  we  conclude   that  the  Settlement            Agreement  merely grants Grumman the right  to gain access to            copies  of ADEX lawfully possessed by a DG equipment owner in            order to  service the computers of  that particular equipment            owner.   Because Grumman's copying  and use of  ADEX does not            fall within this category,  the Settlement Agreement does not                                            ____________________            proprietary  maintenance   tools  in  the  hands   of  CSSC's            customers  "were to  be used  . .  . for  the  customer's own            computers,"   counsel  for  STI responded,  "I  don't have  a            problem with that."            41.  Our   conclusion  that   the  "maintenance   or  repair"            exception was  intended to be a  third-party access agreement            also  disposes of  Grumman's  assertion  that the  Settlement            Agreement  somehow obligates DG to distribute its proprietary            maintenance  information  either  to  Grumman's  customers or            directly  to  Grumman.   As  explained  above, the  extrinsic            evidence demonstrates  that the Agreement  concerns Grumman's            right  to  gain access  to  proprietary  information that  DG            distributes to equipment owners.   Nowhere does the Agreement            say   that  DG   will  distribute   to  Grumman   proprietary            information DG  chooses to distribute  only to its  own field            engineers.   Further, it  would be unreasonable  to interpret            the   Agreement  as   providing  for   direct   licensing  of            proprietary  information on demand  given that  the Agreement            did not even  allow the individual  parties to the  Agreement            (Root and Montgomery, both former  DG employees) to retain or            purchase any  proprietary  information they  acquired  during            their employment with DG.   And finally, a mere  agreement to            agree to an unspecified future license would be unenforceable            as  a matter of contract  law.  See STI,  737 F. Supp. at 339                                            ___ ___            (citing First Nat'l Bank  v. Burton, Parsons & Co.,  470 A.2d                    ________________     _____________________            822,  828 (Md. Ct. Spec.  App.), cert. denied,  475 A.2d 1201                                             _____ ______            (Md. 1984)).                                         -52-                                          52            serve as a defense  either to the infringement action  or the            trade  secrets claims.   The  district court  did not  err in            granting  partial  summary  judgment  for  DG  on   Grumman's            Settlement Agreement defense.                                         -53-                                          53            4.  Misuse Defense            __________________                      Grumman claims  that DG is not  entitled to enforce            its copyrights  or its rights  under state trade  secrets law            because it has "misused" those property rights by engaging in            anti-competitive  behavior in violation  of federal antitrust            laws.   DG argues that there is no "copyright misuse" defense            to a  federal copyright infringement claim  and no applicable            "unclean   hands"   defense   to   the    state   claim   for            misappropriation of trade secrets.  Alternatively,  DG argues            that it did not violate the antitrust laws.                      A "copyright misuse"  defense is not  without legal            support.  In a carefully reasoned opinion, the Fourth Circuit            recently  approved such  a defense after  noting that  it has            long  been  recognized in  the  analogous  context of  patent            infringement.   See Lasercomb America, Inc.  v. Reynolds, 911                            ___ _______________________     ________            F.2d 970, 976  (4th Cir. 1990) ("[S]ince copyright and patent            law  serve  parallel  public  interests,  a  `misuse' defense            should apply  to infringement  actions  brought to  vindicate            either right."); see also  3 Nimmer   13.09[A], at  13-269 to                             ___ ____    ______            13-276  (collecting conflicting  decisions of  lower courts);            Ramsey  Hanna,  Note,  Misusing  Antitrust:  The  Search  for                                   ______________________________________            Functional Copyright Misuse Standards,  46 Stan. L. Rev. 361,            _____________________________________            404-10 (1994)  (charting  the development  of  the  copyright            misuse defense).  Although DG correctly notes that the misuse            in   Lasercomb  (conditioning   a  copyright  license   on  a                 _________                                         -54-                                          54            noncompetition  agreement)  is not  identical  to  the misuse            alleged in this case (tying access to ADEX to the purchase of            DG  service  and  refusing  to license  ADEX  to  TPMs),  the            reasoning of  Lasercomb does not turn on  the particular type                          _________            of anti-competitive behavior alleged.   DG also suggests that            the policy rationale for a copyright misuse defense is weaker            than  in the case of patent misuse because an exclusive right            to express an  idea in  a particular way  (a copyright) is  a            lesser threat to competition  than an exclusive right to  use            the  idea itself (a patent).  We acknowledge that it is often            more difficult to prove an antitrust violation when the claim            rests  on the  questionable  market power  associated with  a            copyright,  but  that would  not be  a  reason to  prohibit a            defendant from  attempting to meet  its burden of  proof, and            would be a poor reason to refrain entirely from recognizing a            copyright misuse defense.                      Nevertheless,  this case  does  not require  us  to            decide  whether the  federal copyright  law permits  a misuse            defense.     Nor  need  we  determine  whether  Massachusetts            recognizes  an   unclean  hands   defense  to  a   claim  for            misappropriation of  trade secrets.   Grumman does  not claim            that  DG misused  its copyright or  acted inequitably  in any            fashion  other than  through  its alleged  violations of  the                                         -55-                                          55            Sherman  Act.42   And,  because  we  conclude infra,  Section                                                          _____            III.B.,  that there  is  insufficient evidence  to justify  a            trial  on   either  of  Grumman's   antitrust  counterclaims,            Grumman's misuse  and  unclean  hands  defenses  are  equally            devoid of merit.43                      5.  Damages                      ___________                      Grumman's principal assault on  the jury's award of            $27,417,000  in  damages  (DG's  lost profits  and  Grumman's                                            ____________________            42.  Note  that the  Lasercomb  court held  that a  copyright                                 _________            misuse  defense  does  not  require  proof  of  an  antitrust            violation,  only proof that "the copyright is being used in a            manner violative of  the public policy embodied in  the grant            of a copyright."  911 F.2d at 978.              43.  Even if Grumman's antitrust counterclaims  could survive            summary judgment,  Grumman  would not  necessarily  have  the            privilege  of  interposing  its  counterclaims  as  defenses.            Lasercomb explains  that copyright misuse  and its  ancestor,            _________            patent  misuse, are equitable defenses.  See 911 F.2d at 976-                                                     ___            77.  If copyright misuse is an equitable defense, a defendant            that  has itself  acted inequitably  may  not be  entitled to            raise such a defense.  Cf. 3 Nimmer   13.09[B],  at 13-278 to                                   ___   ______            13-279 (noting the possible propriety of denying a defense of            unclean hands "when the defendant has been  guilty of conduct            more  unconscionable and  unworthy  than  the  plaintiff's").            Mere  infringement may  not  be inequitable  in this  context            because a  misuse defense would  appear to sanction  at least            some infringement as a  necessary measure of self-help.   But            violation of  a valid injunction against further infringement            issued   pursuant  to  a   court's  equitable   powers  would            constitute blatantly  inequitable behavior.   Here,  the jury            specifically found that Grumman violated the district court's            1988  injunction against the use  of ADEX.   Grumman does not            appeal that finding.  Accordingly, while Grumman may be  free            to pursue antitrust  counterclaims, cf. Perma Life  Mufflers,                                 _____________  ___ _____________________            Inc.  v.  International Parts  Corp.,  392  U.S. 134,  138-40            ____      __________________________            (1968) (holding that  doctrine of  in pari delicto  is not  a                                               __ ____ _______            defense to  an antitrust suit),  it would not  necessarily be            entitled to raise a defense of copyright misuse predicated on                                _______            antitrust violations.                                         -56-                                          56            nonduplicative profits) is that  the district court failed to            give  the jury adequate guidance to find the necessary causal            connection between  Grumman's infringement and  DG's damages.            Because the calculus of causation is partly a function of the            particular theory  of damages  advanced by the  plaintiff, we            divide our discussion accordingly.                           a.  Actual Damages                           __________________                      A successful plaintiff in an infringement action is            entitled to "actual damages suffered by [it] as result of the            infringement."    17 U.S.C.     504(b).   Actual  damages are            generally calculated with  reference to the loss in  the fair            market value of the copyright,  often measured by the profits            lost as  a result of the  infringement.  See,  e.g., Eales v.                                                     ___   ____  _____            Envtl. Lifestyles, Inc., 958 F.2d  876, 880 (9th Cir.), cert.            _______________________                                 _____            denied,  113  S. Ct.  605 (1992);  see  generally 3  Nimmer              ______                             ___  _________    ______            14.02[A], at 14-8 to 14-9.                      The plaintiff bears the  burden of proving that the            infringement  was  the cause  of its  loss  of revenue.   See                                                                      ___            Harper & Row,  Publishers, Inc. v.  Nation Enters., 471  U.S.            _______________________________     ______________            539, 567 (1985);  Frank Music  Corp. v. MGM,  Inc., 772  F.2d                              __________________    __________            505, 514 n.8 (9th Cir. 1985) (citing Shapiro, Bernstein & Co.                                                 ________________________            v. 4636  S. Vermont Ave., Inc.,  367 F.2d 236, 241  (9th Cir.               ___________________________            1966)).   In  defining that  burden, it  is useful  to borrow            familiar  tort law principles of causation  and damages.  See                                                                      ___            Deltak,  Inc. v. Advanced Sys.,  Inc., 574 F.  Supp. 400, 403            _____________    ____________________                                         -57-                                          57            (N.D.  Ill.  1983)  (Posner,  J.,   sitting  by  designation)            (referring to "normal tort damages principles"  in discussion            of copyright damages), vacated on other grounds, 767 F.2d 357                                   _______ __ _____ _______            (7th Cir. 1985); 3 Nimmer   14.02[A], at 14-11, 14-20  to 14-                               ______            21 n.49.8  (alluding to  notions of  "but for"  and proximate            causation).  Thus, the  plaintiff should first establish that            the infringement was the cause-in-fact of its loss by showing            with  reasonable  probability that,  but for  the defendant's            infringement, the plaintiff would not have suffered the loss.            See,  e.g., Robert R. Jones  Assocs. v. Nino  Homes, 858 F.2d            ___   ____  ________________________    ___________            274, 281 (6th Cir. 1988); 3  Nimmer,   14.02[A], at 14-9; cf.                                         ______                       ___            Harper  & Row,  471  U.S. at  567  (noting that  in  rebuttal            _____________            defendant  may "show  that  this damage  would have  occurred            [anyway]   had   there   been  no   taking   of   copyrighted            expression");  Aro  Mfg. Co.  v. Convertible  Top Replacement                           _____________     ____________________________            Co.,  377 U.S. 476, 507 (1964) (noting that actual damages in            ___            patent  infringement  case are  based  on  "what [the  patent            holder's] condition  would have been if  the infringement had            not  occurred")  (citation   and  internal  quotation   marks            omitted).     The   plaintiff  must   also  prove   that  the            infringement   was  a   proximate  cause   of  its   loss  by            demonstrating that the existence and amount of the loss was a            natural and  probable consequence  of the infringement.   See                                                                      ___            Big Seven Music Corp. v.  Lennon, 554 F.2d 504, 509  (2d Cir.            _____________________     ______            1977)  ("[D]amages  may be  recovered  only  if  there  is  a                                         -58-                                          58            necessary, immediate and direct causal connection between the            wrongdoing  and  the  damages.").     A  plaintiff  may  seek            compensation for  both direct and "indirect"  losses, as long            as  the losses  claimed  are  not  unduly speculative.    See                                                                      ___            Business Trends Analysts, Inc.  v. Freedonia Group, Inc., 887            ______________________________     _____________________            F.2d  399, 404  (2d  Cir. 1989)  (recognizing possibility  of            recovery  for  loss  of  "enhanced  good  will"  and  "market            recognition"); Abeshouse  v.  Ultragraphics, Inc.,  754  F.2d                           _________      ___________________            467,  471  (2d  Cir.  1985)  (ruling  that  claimed  harm  to            "reputation"  and "marketability"  of copyrighted  poster was            "too speculative  to support  any award of  actual damages");            Sunset Lamp Corp.  v. Alsy  Corp., 749 F.  Supp. 520,  524-25            _________________     ___________            (S.D.N.Y. 1990) (recognizing possibility of recovery for lost            sales of noninfringed  items); 3 Nimmer    14.02[A], at 14-11                                             ______            to 14-21.  At the same time, the plaintiff need not prove its            loss  of revenue  with  mathematical precision.   See,  e.g.,                                                              ___   ____            Stevens Linen Assocs. v. Mastercraft  Corp., 656 F.2d 11,  14            _____________________    __________________            (2d Cir. 1981) ("In  establishing lost sales due to  sales of            an infringing product, courts must necessarily engage in some            degree of speculation.").                      DG  argued  at  trial   that  ADEX  capability  was            essential both to service MV computers and attract customers,            and therefore nearly all of Grumman's MV customers would have            remained  with DG  (or would  have switched  back to  DG) had            Grumman  not touted  its  possession and  use  of ADEX.    In                                         -59-                                          59            opposition,  Grumman  introduced evidence  that  ADEX  was of            little  use to  Grumman's field  engineers  and only  a minor            factor  in consumer's  selection  of a  service  vendor.   In            effect, Grumman  argued that,  even  without ADEX,  customers            would have switched to (or remained with) Grumman in order to            take  advantage of  its  lower prices  and allegedly  higher-            quality service.                      In  its  objections  to  the jury  charge,  Grumman            expressed   concerns  about   the  court's   instructions  on            causation in the  lost profits  context.   Grumman asked  the            court  to  instruct the  jury that  it  was free  to consider            whether  factors other  than  Grumman's infringement  enabled            Grumman  to  win  customers  from  DG.    On  appeal, Grumman            continues to  challenge the adequacy of  the district court's            instructions on causation, and raises several questions about            the sufficiency of the evidence.                           (1)  Jury Instructions                                _________________                      The district  court's charge, relevant  portions of            which  are set  forth  in the  margin,  invited the  jury  to            consider  the "diverse  factors"  that make  up a  customer's            choice of  a service  organization, and properly  allowed the            jury to consider whether the majority of MV equipment  owners            would have turned to DG for service had Grumman not possessed                                         -60-                                          60            and used ADEX.44   The instructions also introduced  the jury            to  the  concept of  proximate cause.    The charge  not only            mentioned the concept  by name  but also gave  it content  by            explaining, among other things, that the plaintiff "bears the            burden  of proving  its  damages to  a  reasonable degree  of            certainty," may  not be compensated for  "purely speculative"            damages, and is  entitled only to  "reasonable" damages.   We            conclude  that the  charge  adequately equipped  the jury  to            determine  whether or  not DG  had established  the requisite            causal link between Grumman's infringement and the profits DG            claimed to have lost.45                                            ____________________            44.  In its charge, the district court stated:                      If  you conclude  that Grumman  would not                      have been in the business of servicing MV                      computers but for its possession  and use                      of  MV/ADEX,  or  that  some  or  all  of                      Grumman's customers would not  have hired                      Grumman  to  maintain  or   repair  their                      computers  if  Grumman had  not infringed                      Data   General's  copyrights,   then  you                      should consider what percentage  of those                      customers would have  done business  with                      Data General instead.                           You  may take  into account  all the                      diverse factors which . . . might bear on                      the   determination,   including   price,                      customer  loyalty  and level  of customer                      satisfaction.            45.  Grumman's  other challenges to the jury instructions are            either meritless  or moot.   First,  Grumman  claims that  an            apportionment  instruction  (the  subject  of  the  following            section) would have affected the outcome  of the lost profits            analysis.    As we  explained  above,  however, the  district            court's instructions enabled the  jury to make findings about            the relative role of  infringing and noninfringing factors in                                         -61-                                          61                           (2)  Sufficiency of the Evidence                                ___________________________                      Grumman's  challenge to  the evidentiary  basis for            the  jury's award  of actual  damages is  less developed  and            equally  unavailing.   Upsetting a jury's  damage award  is a            daunting  task  for  any  appellant, for  we  must  draw  all            reasonable inferences in favor  of the verdict, upholding the            award if it  derives from "any rational appraisal or estimate            of the damages that could be based on the evidence before the            jury."   Anthony v. G.M.D.  Airline Servs., 17  F.3d 490, 493                     _______    ______________________            (1st  Cir.  1994)  (citations  and  internal  quotation marks            omitted).     The  likelihood  of  a   victorious  appeal  is            especially remote in the  absence of rigorous  argumentation.            Cf. Chakrabarti v. Cohen,  ___ F.3d ___, ___ (1st  Cir. 1994)            ___ ___________    _____            [Nos. 92-1987 and  92-1988, slip op. at  8] (suggesting that,            when  challenging  the   sufficiency  of   the  evidence,   a                                            ____________________            customers' selection of Grumman over DG.  Further examination            of the value added  by Grumman to its own products would have            been  unnecessary.   Second,  Grumman  contends  that it  was            impermissible for DG to  calculate its lost profits based  on            its  monopoly  prices.   This  argument  is untimely  because            Grumman did not  raise this  issue in its  objections to  the            jury instructions.  In any event, Grumman has not established            that DG's  exploitation of  its monopoly is  unlawful, infra,                                                                   _____            Section III.B.2., and  has not provided any authority for the            proposition that actual  damages cannot be based  on the loss            of lawful monopoly profits.  Third, Grumman suggests that the               ______            damage  award was  inflated because  the jury  was improperly            forbidden  from  considering the  extent  to  which the  1976            Settlement  Agreement  authorized  Grumman's  use   of  ADEX.            However, as illustrated supra, Section III.A.3.,  Grumman did                                    _____            not   present  trialworthy   evidence  that   the  Settlement            Agreement authorized the  acquisition and use of ADEX  in any            meaningful sense.                                         -62-                                          62            defendant-appellant  must  make a  "serious effort  . .  . to            analyze the evidence taking it in the light most favorable to            [the  plaintiff] and  resolving  credibility issues  in  [the            plaintiff's]  favor").   Moreover,  the  calculation of  lost            profits  will always  involve "some  degree  of speculation."            Stevens Linen Assocs., 656 F.2d at  14.  As a result, we rely            _____________________            on the appellant to specify with some precision the manner in            which unduly speculative reasoning is likely to have infected            the jury's verdict.                      Grumman raises several  specific concerns.   First,            Grumman complains that the jury had no basis to conclude that            Grumman would not be  in the MV business because  DG's damage            expert,  Alan   Friedman,  did  not  consider   the  relative            infrequency of  Grumman's use of  ADEX, or the  value Grumman            added  to  its product  through "substantially  lower prices,            superior service and higher level of  customer satisfaction."            Grumman's   ultimate  concern   is   that  "no   attempt   at            apportionment was made."   But  Friedman did not  set out  to            show that there was  nothing attractive about Grumman service                                 _______            apart  from  its possession  and use  of  ADEX.   Instead, he            reported --  and the  jury apparently  believed --  that, for            most owners of MV equipment, ADEX capability was the critical            attribute  in  a  service  vendor.   As  a  result,  Friedman            concluded, ADEX capability was the sine qua non  of Grumman's                                               ____ ___ ___            success  in its  chosen  niche as  a  national vendor  of  MV                                         -63-                                          63            service.  Drawing all  reasonable inferences in favor  of DG,            we conclude that a reasonable jury was free to agree.                      Grumman  also  argues  that  the  jury  must   have            improperly  followed Friedman's  lead in  adding to  the lost            profits  figure all  of  the service  and  hardware needs  of            Grumman's  MV  customers  that  DG was  capable  of  filling.            Grumman notes  that Friedman based his  testimony on evidence            that customers prefer to have a single vendor of service, but            claims that  this  evidence deserves  little  weight  because            "customers   that  had   gone   to  [Grumman]   had   already            demonstrated  their  particular  price/service  sensitivity."            Viewed in a light most favorable to the verdict, however, the            record   evidence  adequately  supports  the  inference  that            Friedman invited the  jury to  draw.  For  example, while  MV            equipment owners  may have switched  to Grumman in  search of            lower prices  and better service, the  evidence suggests that            none of them had to give up  a preference for single sourcing            to  do so.    Indeed, the  evidence  suggests that  Grumman's            drawing  power was due in part to  its ability to be a single            source of  service, particularly for customers  with multiple            brands of  computer equipment.   Nor  did Grumman  attempt to            rebut Friedman's  view with  evidence of MV  equipment owners            who  sacrificed  their  preference  for  single  sourcing  in                                         -64-                                          64            certain  circumstances.46   More  importantly,  Friedman  did            not presume  that customers would be  entirely insensitive to            issues  of  price and  quality.    In calculating  DG's  lost            profits, he reduced the figure by an estimate of the business            DG  would  itself  have  lost  to  competition  from  TPMs.47            Finally, we note that DG did not seek compensation for a loss            in "goodwill"  or "market recognition" that  was difficult to            ascertain, cf. Business Trends, 887  F.2d at 404, but  rather                       ___ _______________            for the loss of  a reasonably verifiable number of  customers            with a limited  and predictable  set of service  needs and  a            demonstrated  tendency to satisfy those needs by turning to a            single  vendor.  In short, the evidence does not suggest that            the jury's  award of actual damages falls  outside the "`wide            range  of arguable  appropriateness.'"    Toucet v.  Maritime                                                      ______     ________                                            ____________________            46.  Such rebuttal evidence, if  it existed, should have been            easily  within Grumman's  reach.   For example,  the evidence            suggests that  purchasers of  DG equipment generally  used DG            service in the initial  warranty period.  Thus, owners  of DG            equipment  might  periodically  upgrade a  portion  of  their            equipment, and therefore there would be times when one  owner            will have some newly  upgraded equipment still under warranty            and some older  equipment no longer under  warranty.  Grumman            could  readily have  introduced evidence  that some  of these            equipment  owners ignored  their single-vendor  preference by            turning to a TPM for service of equipment not under warranty.            Similarly, it would  not have been  difficult for Grumman  to            discredit  Friedman's  opinion  by  showing  that  DG  had  a            significant  number of price-conscious  service customers who            regularly   turned  to  other  vendors  when  purchasing  new            equipment, or  that customers who  purchased DG service  on a            "time and materials" basis often used TPMs as well.             47.  In estimating this "volume loss," Friedman assumed that,            without  ADEX, Grumman  would not  have  been among  the TPMs            competing for MV-related business.                                         -65-                                          65            Overseas  Corp.,  991 F.2d  5,  11 (1st  Cir.  1993) (quoting            _______________            Wagenmann v. Adams, 829 F.2d 196, 216 (1st Cir. 1987)).            _________    _____                           b.  Infringer's Profits                           _______________________                      In   addition  to   actual  damages,   a  copyright            plaintiff may  also  recover the  infringer's  nonduplicative            profits,  i.e.,  "any  profits  of  the  infringer  that  are            attributable  to  the infringement  and  are  not taken  into            account  in  computing  the  actual damages."    17  U.S.C.              504(b).  In the context of infringer's profits, the plaintiff            must  meet only a minimal burden of proof in order to trigger            a  rebuttable presumption  that the defendant's  revenues are            entirely attributable  to the  infringement; the burden  then            shifts to the  defendant to demonstrate  what portion of  its            revenues represent  profits, and what portion  of its profits            are not traceable to the infringement.  See id.; Frank Music,                                                    ___ ___  ___________            772  F.2d at 514; Cream Records, Inc. v. Jos. Schlitz Brewing                              ___________________    ____________________            Co.,  754  F.2d  826,  828 (9th  Cir.  1985).   Specifically,            ___            Section 504(b) provides:                      In establishing  the infringer's profits,                      the  copyright  owner   is  required   to                      present  proof  only  of the  infringer's                      gross  revenue,  and  the   infringer  is                      required to  prove his or  her deductible                      expenses  and  the  elements   of  profit                      attributable  to  factors other  than the                      copyrighted work.48                                            ____________________            48.  Contrary to DG's unsupported assertions, a  defendant in            a Massachusetts trade secrets action appears to have the same            right  to ask for apportionment along with the same burden of            proof.  Citing  17 U.S.C.    504(b) as persuasive  authority,                                         -66-                                          66                      DG  introduced  evidence that,  of  Grumman's gross            revenue from  MV-related business  during the period  1984 to            1990, $5.4 million consisted  of business eliminated from the            calculation of DG's lost profits.  Although no further  proof            was required,  DG accepted Grumman's estimates  of its profit            margin, and  concluded that Grumman's  nonduplicative profits            amounted  to  approximately  $1.6  million.49    Anticipating            Grumman's  attempt to  prove the  need for  apportionment, DG            also argued that, without  ADEX, Grumman would not have  been            in  the MV  service business  on a  national scale,  and that                                            ____________________            the Massachusetts  Supreme Judicial  Court has set  forth the            following rule for apportionment in trade secrets cases:                      Once  a  plaintiff  demonstrates  that  a                      defendant made a profit  from the sale of                      products  produced by  improper use  of a                      trade  secret, the  burden shifts  to the                      defendant  to   demonstrate  those  costs                      properly to be offset against  its profit                      and   the   portion    of   its    profit                      attributable  to  factors other  than the                      trade secret.            USM  Corp. v.  Marson Fastener  Corp., 467 N.E.2d  1271, 1276            __________     ______________________            (Mass. 1984).  See  also Jet Spray Cooler, Inc.  v. Crampton,                           ___  ____ ______________________     ________            385  N.E.2d 1349,  1358-59 n.14  (Mass. 1979)  (citing, inter                                                                    _____            alia, Sheldon  v. Metro-Goldwyn Pictures Corp.,  106 F.2d 45,            ____  _______     ____________________________            48 (2d Cir. 1939), aff'd, 309 U.S. 390 (1940)).                               _____            49.  This amount  included DG's estimated  "volume loss"  and            "excluded revenue."  "Volume  loss" represents the MV-related            business  that DG  would have lost  in competition  with TPMs            even  if  DG  had been  the  only  service  vendor with  ADEX            capability.   "Excluded  revenue" represents  the  MV-related            business that DG did not  have the capacity or the desire  to            seek,  such as service contracts for  certain systems with at            least  one non-DG CPU or service contracts for certain non-DG            peripheral equipment attached to DG CPUs.                                         -67-                                          67            therefore Grumman would not have earned  the remainder of its            MV-related profits.   In  other words, DG's  theory was  that            because ADEX  capability was generally  essential to  attract            customers with  MV computers,  few such customers  would have            chosen Grumman as a service  vendor, causing Grumman to leave            (or  perhaps never enter) the national  market for service of            MV-related  equipment.    Thus, according  to  DG,  Grumman's            nonduplicative profits were  the indirect result of  consumer            choices distorted by Grumman's infringement.                      It is unclear whether Grumman contested DG's theory            on  the merits,  although Grumman  did introduce  some expert            testimony  that   owners  of  MV  equipment  were  relatively            indifferent to  the ADEX  issue  in their  choice of  service            vendors.  As  amplified by its arguments  on appeal, however,            Grumman's primary  strategy was to  invite the  jury to  take            Grumman's  infringement as a given,  and focus instead on why            its  customers  were  willing  to pay  for  Grumman  service.            Grumman argued that factors other than its possession and use            of ADEX contributed to its customers' willingness to pay, and            that it was entitled  to retain a corresponding share  of the            resulting profits.  Grumman  introduced some evidence tending            to show that its  customers attached high value to  the price            and quality of Grumman service,  as well as Grumman's ability            to service non-DG equipment in a mixed-equipment system.                                         -68-                                          68                      Recognizing that DG's "but for" theory focused on a            different   aspect  of   consumer  behavior   than  Grumman's            "contributing factors" theory, Grumman argued below that  the            court's  instructions should  leave  the jury  free to  adopt            either  line of  reasoning.   Grumman's  suggested method  of            doing  so  was for  the  court to  instruct the  jury  on the            concept of apportionment of  infringer's profits set forth in            Section 504(b).    The district  court agreed  that the  jury            could adopt  the approach  best suited to  the circumstances,            but refused to give an explicit instruction on apportionment.                      Assuming for the  moment that Grumman  was entitled            to invite the jury  to adopt its analytical framework,  we do            not   believe  that   the   court's   instruction   "properly            apprise[d]" the  jury of  the validity  of such  an approach.            Joia v. Jo-Ja Serv. Corp., 817 F.2d 908, 912 (1st Cir. 1987),            ____    _________________            cert. denied, 484  U.S. 1008 (1988).   Although the  district            _____ ______            court  instructed  the  jury  to  include  among  infringer's            profits   only   those    revenues   "attributable   to   the            infringement,"  at  no point  did the  court fully  reveal or            explain   the  relatively  difficult   statutory  concept  of            "elements of  profit attributable  to factors other  than the            copyrighted work."   17  U.S.C.    504(b).   As noted  in the            preceding  section, the  court  did refer  (at  least in  its            instruction  on actual  damages)  to "diverse  factors" which            might have  influenced customers' choice of  Grumman over DG,                                         -69-                                          69            but the  court did not  inform the jury  that there  may have            been  many  reasons for  customers'  willingness  to pay  for            Grumman service  apart from  the fact that  Grumman possessed            and used ADEX.  Cf. Walker v. Forbes, Inc., No. 93-1273, 1994                            ___ ______    ____________            WL  287173, at *7 (4th Cir. June 30, 1994) (praising district            court's  "rich and detailed instructions . . . explaining . .            .  the correct  apportionment of  profit attributable  to the            infringement,  [and]  faithfully  explaining  the  rules  and            procedures set out in the statute").                      It is unclear why,  if the district court  chose to            reject Grumman's proposed instruction, it did not simply read            to the jury the language of Section 504(b).   We may overlook            its failure to do so only if there is no basis in law or fact            for  the application of Grumman's theory.  See Joia, 817 F.2d                                                       ___ ____            at 912 (holding that "all parties are entitled to an adequate            jury instruction upon the  controlling issues"); cf. Allen v.                                                             ___ _____            Chance Mfg. Co., 873  F.2d 465, 470 (1st Cir.  1989) (holding            _______________            that remand  on basis of instructional error is required only            if   error   "may   have   unfairly   affected   the   jury's            conclusions").  For  the reasons set forth below,  we believe            that  Grumman's  theory  is  firmly  rooted  in  the  law  of            copyright and the record of this case.                      The  defendant's  burden  under  the  apportionment            provision of  Section 504(b) is primarily  to demonstrate the            absence  of a causal link between the infringement and all or                                         -70-                                          70            part  of the profits claimed  by the plaintiff.   See Walker,                                                              ___ ______            1994 WL 287173, at *3-4 (describing Section 504(b) as "a rule            of  causation").    Because  the  rebuttable  presumption  of            causation represents a  presumption as to  both cause-in-fact            and  proximate  cause,  there   are  two  avenues  of  attack            available to a copyright defendant.  First, the defendant can            attempt  to  show that  consumers  would  have purchased  its            product even without the infringing element.   See, e.g., id.                                                           ___  ____  ___            at  *4  (holding that  district  court  properly allowed  the            defendant  to show  that  an unauthorized  reproduction of  a            photograph in an issue of its magazine had no causal relation            to "amounts  of revenue .  . . committed  to the  issue sight            unseen").50   Alternatively, the defendant may  show that the            existence and amount of  its profits are not the  natural and            probable consequences of the infringement alone, but are also            the result of  other factors which either add intrinsic value            to the product or have  independent promotional value.   See,                                                                     ___            e.g., Sheldon v. Metro-Goldwyn  Pictures Corp., 309 U.S. 390,            ____  _______    _____________________________            407-08  (1940)  (approving  apportionment  where  profits  of            defendant's  film  were  largely   attributable  not  to  the            plaintiff's pirated  story but rather to  the "drawing power"            of the star performers and the artistry of others involved in                                            ____________________            50.  Note, however, that if the plaintiff cannot prove actual            damages  and the  defendant shows  that none  of its  gain is            attributable to  the infringement, the plaintiff  would still            be entitled to elect statutory damages.  See 17 U.S.C. 504(c)                                                     ___            (1988); see generally 3 Nimmer   14.04, at 14-47 to 14-79.                    ___ _________   ______                                         -71-                                          71            the creation of the film); Abend v. MCA, Inc., 863 F.2d 1465,                                       _____    _________            1480  (9th  Cir.  1988)  (remanding  for apportionment  where            factors other  than the underlying story  -- particularly the            talent and popularity of Alfred Hitchcock, Jimmy Stewart, and            Grace Kelly  -- "clearly contributed"  to the success  of the            film "Rear  Window"), aff'd on  other grounds,  495 U.S.  207                                  _____ __  _____ _______            (1990); Sygma Photo  News, Inc. v. High Soc'y Magazine, Inc.,                    _______________________    _________________________            778  F.2d 89, 96  (2d Cir.  1985) (apportioning  profits from            sales  of "Celebrity Skin"  magazine where  promotional cover            contained not only infringing  photograph of Raquel Welch but            also  a list  of other  nude celebrity  photographs contained            within);  Cream   Records,  754  F.2d  at  828-29  (upholding                      _______________            apportionment of  profits from  malt liquor  sales apparently            based on popularity of  noninfringing product and promotional            value of  noninfringing elements of  defendant's commercial);            cf. USM Corp., 467 N.E.2d at 1277 (trade secrets; recognizing            ___ _________            that apportionment  would have  been proper if  defendant had            demonstrated that  factors  such  as  "management  skill"  or            "capital investment"  had contributed  to the success  of its            product).   Grumman  apparently  wished to  tread the  second            path, and it was unquestionably entitled to do so.                      Grumman  also  suggests  on  appeal that  the  jury            should have  been instructed  that it  could not  accept DG's            theory  on the apportionment issue because  DG gave little or            no weight to  Grumman's contributions.  But the only argument                                         -72-                                          72            presented to the district court was that the court should add                                                                      ___            an  instruction to inform the  jury that it  was permitted to                                                             _________            apportion Grumman's profits.   It is usually  imprudent for a            court of appeals  to pass on  an issue not  presented to  the            district court in the first instance, and we decline to do so            in  these  circumstances.    See, e.g.,  Mariani  v.  Doctors                                         ___  ____   _______      _______            Assocs.,  983 F.2d  5,  8  n.4  (1st  Cir.  1993)  ("We  have            _______            repeatedly warned  that we will not  entertain arguments made            for  the first time on appeal.") (citing FDIC v. World Univ.,                                                     ____    ____________            Inc.,  978 F.2d  10, 13  (1st Cir.  1992)); United  States v.            ____                                        ______________            Zannino,  895 F.2d  1, 17  (1st Cir.)  ("[A] litigant  has an            _______            obligation   to  spell   out  its   arguments   squarely  and            distinctly, or else forever  hold its peace.") (citations and            internal  quotation marks  omitted), cert.  denied, 494  U.S.                                                 _____  ______            1082 (1990).                      We   are  compelled  to   add,  however,   that  an            instruction on apportionment would not rob DG's theory of all            possible meaning.   In the first place, DG  was free to argue            that  Grumman's  infringement  was   a  "but  for"  cause  of            Grumman's nonduplicative  profits, even  if the  court should            have explained to  the jury that Grumman  could still satisfy            its  burden  by   demonstrating  the  absence  of   proximate            causation.    In addition,  DG  was  entitled to  argue  that            Grumman's  infringement  should  be  viewed as  the  sole  or            overriding cause of  Grumman's profits.  Cf. Frank Music, 772                                                     ___ ___________                                         -73-                                          73            F.2d at  518 (noting that  "no one  element was  the sole  or            overriding reason" for the success of  defendant's infringing            "Hallelujah Hollywood" stage show).                      Moreover, although  apportionment primarily depends            on  questions  of  causation,  it is  ultimately  a  delicate            exercise informed  by considerations  of fairness  and public            policy, as well as  fact.  The doctrine of  apportionment was            "established  upon  equitable  principles"  in  the analogous            context of  patent infringement.   Sheldon, 309 U.S.  at 401.                                               _______            And, in adopting the principle of apportionment for copyright            cases, the  Court observed  that "[e]quity is  concerned with            making a fair  apportionment so that neither  party will have                     ____            what  justly belongs  to the  other."   Id. at  408 (emphasis                                                    ___            added).  See also 3 Nimmer    14.03[C], at 14-42 (noting that                     ___ ____   ______            Copyright Act of  1976 "expressly adopted" the  apportionment            principle  announced  in  Sheldon).   In  fact,  the  burden-                                      _______            shifting  rule in Sheldon  (and Section 504(b))  is itself an                              _______            equitable  response to  an infringer  who has  frustrated the            task of  apportionment by co-mingling profits.   See Sheldon,                                                             ___ _______            309  U.S. at 401 ("[T]he defendant, being responsible for the            blending  of the lawful with  the unlawful, had  to abide the            consequences,  as in  the  case  of  one who  has  wrongfully            produced a  confusion of goods.") (referring  to Callaghan v.                                                             _________            Myers,  128 U.S.  617  (1888)).   Equitable factors  may also            _____            affect  the substance  of  the apportionment  analysis.   For                                         -74-                                          74            example, where the plaintiff  cannot prove actual damages and            the   defendant's  profits  are  only  from  the  sale  of  a            noninfringing  product,  the  only  way  to  prevent   unjust            enrichment  may  be  to  place  more  weight  on  the profit-            generating effect of an infringing sales tool used to promote            that   product.     See,   e.g.,  Konor   Enters.  v.   Eagle                                ___    ____   _______________       _____            Publications,  Inc.,  878  F.2d  138,  140  (4th  Cir.  1989)            ___________________            (suggesting that defendant may not be entitled  to retain any            of the profits  from sale  of advertising space  where it  is            "plausible  . . . that  all profits were  a direct result" of            infringing  marketing  information  distributed to  potential            advertisers).                      Similarly,  the  policies underlying  the Copyright            Act may play some role in  the apportionment of profits.  For            example, Sheldon and  its progeny suggest that  apportionment                     _______            is  almost  always available  in  the  context of  infringing            derivative works, perhaps in part because original expression            added  by  the  infringer  is itself  entitled  to  copyright            protection.   Furthermore, where the plaintiff  is seeking to            vindicate its right  to exclude others rather than  its right            to collect a licensing fee, see 17 U.S.C.   106 (1988 & Supp.                                        ___            IV 1992) (describing  rights of copyright  owner), it may  be            more appropriate to view  the infringement as an "overriding"            cause  of  the  defendant's  profits. In  such  cases,  rigid            isolation  of the value of  the infringement to the defendant                                         -75-                                          75            (which would approximate a "reasonable"  licensing fee) would            effectively condone  a license the plaintiff  never wished to            grant.  Lastly, we note that an unjust enrichment theory aims            to  strip the defendant of its ill-gotten gains, see, e.g., 3                                                             ___  ____            Nimmer    14.01[A],  at 14-6,  encourage compliance  with the            ______            Copyright  Act, see,  e.g.,  Walker, 1994  WL  287173, at  *2                            ___   ____   ______            (noting  that  an award  of  infringer's  profits "makes  the            infringer  realize that it is cheaper to buy than to steal"),            and perhaps  "compensate" a plaintiff unable  to prove actual            damages, see Sheldon, 309 U.S. at 399 (describing the goal of                     ___ _______            an award of infringer's profits as "just compensation for the            wrong").  Therefore, apportionment of infringer's profits may            be  particularly  appropriate  where a  concurrent  award  of            actual damages significantly serves all three purposes.51                      In  light of  the  discussion above,  we hold  that            Grumman was  entitled to  an instruction on  apportionment in            order  to allow  the jury  to determine  whether and  to what                                            ____________________            51.  Our discussion of equitable and policy considerations is            intended  to  aid courts  in  apportioning  profits when  the            parties submit the issue of infringer's profits to the court,            see  Sid  &  Marty  Krofft Television  Productions,  Inc.  v.            ___  ____________________________________________________            McDonald's Corp., 562 F.2d 1157, 1175 (9th Cir. 1977) (noting            ________________            that  parties  may  stipulate  to  bench  trial on  issue  of            infringer's   profits),  and   to   provide   some   rational            explanation  for the  discordant aspects  of the case  law on            apportionment.   While  a court  may instruct  the jury  that            damages should be "reasonable" (as the court in this case did            without objection from either  party), we do not hold  that a            court  may ask the jury itself to weigh matters of equity and            public policy.                                         -76-                                          76            extent   apportionment  of  its  nonduplicative  profits  was            reasonable under the circumstances of this case.                      Whether  a  remand  is  necessary  is  a  different            question,  but  one   readily  resolved.     Grumman  clearly            introduced evidence that would have  permitted a jury to find            that  Grumman's customers  were  willing to  pay for  Grumman            service for reasons  beyond its possession  and use of  ADEX.            Indeed, we believe  that Grumman's  evidence is  sufficiently            compelling that Grumman is  entitled to some apportionment as            a  matter of  law.    Because  the  absence  of  an  explicit            instruction  on apportionment "may have unfairly affected the            jury's conclusions,"  Allen, 873 F.2d  at 470, we  remand the                                  _____            case to  the district court for an  appropriate resolution of            theissue ofapportionment ofGrumman's nonduplicativeprofits.52                                            ____________________            52.  In  order  to  avoid  undue  confusion  and  unnecessary            proceedings, we add the  following procedural notes to assist            the district court in resolving the issue of apportionment of            Grumman's nonduplicative profits.                 Cognizant of our authority  to take whatever action "may            be  just  under  the circumstances,"  28  U.S.C.     2106, we            believe that remittitur would  provide the most equitable and            efficient means of remedying  the error.  The  factual record            was  highly developed  at  trial on  the  issue of  Grumman's            profits, leaving a trail adequate to allow the district court            to approximate the effect of the erroneous instruction on the            jury's  verdict.   See 6A  James Wm.  Moore, et  al., Moore's                               ___                                _______            Federal  Practice     59.08[7],   at  59-207  (2d  ed.  1994)            _________________            (explaining that if "the effect of [an erroneous instruction]            can be reasonably approximated  to a definite portion of  the            amount of the verdict, the  appellate court may condition its            affirmance  on the  plaintiff  remitting that  amount of  the            verdict which  is apparently traceable to  the error below").            Moreover,  Grumman  requested  remittitur  as  an alternative            remedy in its Rule 59 motion.                                         -77-                                          77                      6.  Attorney's Fees                      ___________________                      Because it appears that an award of attorney's fees            has not been quantified, see Grumman VII, 825 F. Supp. at 370                                     ___ ___________            (ordering DG  to  resubmit  its  application  for  attorney's            fees), the merits of such an award are not before this court.            Nonetheless,  Grumman mounts  a procedural  attack that  does            appear  to be ripe  for review.   Grumman claims that  (1) DG            "elected"  the state  trade  secrets remedy  over any  remedy            available under  the Copyright Act, and  (2) since attorney's            fees  are  only available  under the  Copyright Act,  and not                                            ____________________                 We  are aware  that the  jury  did not  separately award            actual  damages and  infringer's profits.   Nevertheless, the            verdict is relatively close to the amount DG requested and it            is  extremely unlikely that  the jury  would not  have relied            primarily  on  one  or  the  other  of  the  competing expert            theories.  DG requested $28,003,000 in damages, consisting of            $26,364,000 in lost profits and $1,639,000 in  nonduplicative            profits.    The jury  awarded DG  a  total of  $27,417,000 in            damages -- $586,000  less than  the requested amount.   As  a            result,  DG appears  to have  won  infringer's profits  of at            least  $1,053,000  ($27,417,000  - $26,364,000)  and  at most            $1,639,000.    While  we   do  not  mandate  this  particular            analysis, we are confident that the district  court, with its            superior understanding of the voluminous record, will be able            to estimate either the relevant figures or, if necessary, the            "maximum effect" of the error on the jury's verdict.  See id.                                                                  ___ ___              59.09[7], at 59-207 to 59-208 ("Even when the effect of the            error cannot  be  allocated  to  a distinct  portion  of  the            verdict, remittitur may  still be used if the  maximum effect            of the error can be established.").                 If  DG were to refuse remittitur  in favor of a new jury            trial   on   the   issue  of   apportionment   of   Grumman's            nonduplicative   profits,  we  hope  that  the  parties  will            negotiate in good faith to settle the remanded portion of the            case or at least agree to a more expeditious procedure.  See,                                                                     ___            e.g., Sid & Marty Krofft, 562 F.2d at 1175 (noting that right            ____  __________________            to  jury   trial  extends   to  adjudication  of   claim  for            infringer's profits  but that parties may  stipulate to bench            trial).                                         -78-                                          78            state trade secrets law, DG is not entitled to any attorney's            fees.   Grumman is wrong in both respects.  DG did not simply            elect  state law  remedies.   DG  proposed  a judgment  form,            wholly adopted  by the district court, that  included (1) the            compensatory  damages awarded  by the  jury,53 (2)  state law            statutory damages,  (3) state  law prejudgment  interest, and            (4)  federal law  attorney's fees.   Nor  was DG  required to            forsake nonduplicative elements  of the  various federal  and            state  law remedies.   See Foley v. City  of Lowell, 948 F.2d                                   ___ _____    _______________            10,  17  (1st Cir.  1991) (suggesting  that,  as long  as the            damages are "segregated  into federal and  state components,"            plaintiff need not  choose one  body of law  under which  all            damages  will be paid); cf. Freeman v. Package Mach. Co., 865                                    ___ _______    _________________            F.2d 1331,  1343-45 (1st  Cir. 1988) (holding  that plaintiff            may not receive award based on federal and state law so as to            receive   double  recovery  for   same  element  of  relief);            Schroeder v. Lotito, 747  F.2d 801, 802 (1st Cir.  1984) (per            _________    ______            curiam) (approving  judgment  for  state  law  accounting  of            profits and federal law attorney's fees).  Because DG has not            requested a  double award  of attorney's fees,  there was  no            error in the award of attorney's fees under federal law.                                            ____________________            53.  The jury awarded the same amount of compensatory damages            for  both the  federal copyright  infringement claim  and the            state trade secrets claim.                                         -79-                                          79            B.  Grumman's Antitrust Counterclaims            B.  Grumman's Antitrust Counterclaims            _____________________________________                      The district court granted DG's motions for summary            judgment with respect to  Grumman's tying claim under Section            1  of the  Sherman Act  as well  as its  monopolization claim            under  Section  2.    We affirm  both  rulings,  although  on            somewhat different grounds.                      1.  Illegal Tying                           _________________                      Section  1 of  the Sherman  Act prohibits  a seller            from  "tying" the sale  of one product  to the  purchase of a            second product  if the  seller thereby avoids  competition on            the merits  of the "tied" product.  See 15 U.S.C.   1 ("Every                                                ___            contract  . . . in  restraint of trade  or commerce .  . . is            declared to be illegal."); Jefferson Parish Hosp. Dist. No. 2                                       __________________________________            v. Hyde, 466 U.S. 2, 9-18 (1984); Lee v. Life  Ins. Co. of N.               ____                           ___    ____________________            Am., 23 F.3d 14, 16 (1st Cir. 1994); Grappone, Inc. v. Subaru            ___                                  ______________    ______            of  New England, Inc., 858  F.2d 792, 794-97  (1st Cir. 1988)            _____________________            (Breyer, J.); Wells Real Estate,  Inc. v. Greater Lowell  Bd.                          ________________________    ___________________            of Realtors, 850 F.2d  803, 814-15 (1st Cir.), cert.  denied,            ___________                                    _____  ______            488 U.S. 955  (1988).   In addition  to outlawing  "positive"            ties likely  to restrain competition, Section  1 also forbids            "negative" ties -- arrangements  conditioning the sale of one            product on an agreement not to purchase a second product from                                    ___            competing  suppliers.    See   Eastman  Kodak  Co.  v.  Image                                     ___   ___________________      _____            Technical Servs., Inc., 112 S. Ct. 2072, 2079  (1992) (citing            ______________________                                         -80-                                          80            Northern  Pac.  Ry. Co.  v. United  States,  356 U.S.  1, 5-6            _______________________     ______________            (1958)); Lee, 23 F.3d at 16.                     ___                      There are  essentially four elements of  a per se54                                                                 ___ __            tying  claim:  (1) the  tying and tied  products are actually            two  distinct   products;  (2)  there  is   an  agreement  or            condition, express  or implied,  that establishes a  tie; (3)            the entity accused  of tying has sufficient economic power in            the  market  for  the  tying product  to  distort  consumers'            choices with respect  to the  tied product; and  (4) the  tie            forecloses a substantial amount of commerce in the market for            the tied product.   See, e.g., Kodak, 112 S.  Ct. at 2079-81;                                ___  ____  _____            Grappone, 858 F.2d at 794; see also STI, 963 F.2d at 683.            ________                   ___ ____ ___                      Grumman  claims  that   DG  unlawfully   restrained            competition in the sale of MV service by tying access to ADEX            (the tying product) to an equipment owner's promise to either            purchase service  from DG  (a positive  tie) or not  purchase            service  from any  other vendor  (a negative  tie).   While a            substantial  amount of commerce is potentially involved, DG's            motions for summary judgment claimed that  there was no proof            of  any of the  first three elements  of a tying  claim.  The            district court denied DG's  first motion for summary judgment                                            ____________________            54.  Grumman does  not argue at  this stage that  DG violated            the "rule of reason" and proceeds  only on a "per se" theory.                                                          ___ __            See  Jefferson  Parish, 466  U.S.  at 29-31  (noting  that in            ___  _________________            absence of  per se liability, antitrust  plaintiff must prove                        ___ __            that  defendant's conduct  had an  "actual adverse  effect on            competition").                                         -81-                                          81            but  then  granted its  renewed motion,  stating in  a sparse            opinion that, as in  STI, there was "no evidence  which would                                 ___            warrant a  finding of  the existence  of a  tying agreement."            Grumman  V, 834 F. Supp.  at 485.  See also  STI, 963 F.2d at            __________                         ___ ____  ___            686 ("[STI's]  evidence at bottom  shows nothing more  than a            unilateral  decision by  Data General  to license  MV/ADEX to            CMOs  but not  to  others.").   We  agree with  the  district            court's conclusion  that there is insufficient  evidence of a            negative  tying arrangement, but  believe that the allegation            of a positive tie falters at an earlier step.                           a.  Two Products                           ________________                      To   establish  the   existence  of   two  separate            products, Grumman must identify the products at issue in each            tie and demonstrate that "there is `sufficient demand for the            purchase  of  [the tied  product]  separate  from [the  tying            product] to identify a distinct product market in which it is            efficient to  offer [the  tied product] separately  from [the            tying  product].'"    STI,  963  F.2d  at  684  (brackets  in                                  ___            original) (quoting Jefferson Parish, 466 U.S.  at 21-22.  See                               ________________                       ___            also  Jefferson  Parish,  466   U.S.  at  40  (O'Connor,  J.,            ____  _________________            concurring) ("When the economic advantages of joint packaging            are substantial  the package  is not appropriately  viewed as            two  products,  and  that should  be  the  end  of the  tying            inquiry."); Lee, 23 F.3d at 16 n.6 (noting that there must be                        ___            evidence of "sufficient  consumer demand for  each individual                                                               __________                                         -82-                                          82            product,  and  not merely  as part  of an  integrated product            `package'") (emphasis in original).                        While Grumman  has characterized the  tying product            in  general  terms  as  "access to  ADEX,"  Grumman  actually            identifies  two  different  tying products:  ADEX  service (a            service) and ADEX  software (a  good).  With  respect to  the            positive  tie, Grumman alleges that  DG will not provide ADEX            service (i.e., use  of ADEX  by a DG  service technician)  to            _______            equipment  owners  unless  they  also  purchase   DG  support            services.  With respect to the  negative tie, Grumman alleges            that  DG will not  license ADEX software  to equipment owners                                            ________            unless they  agree not  to purchase  support services  from a            TPM.                      Grumman  has  not  introduced  evidence  that  ADEX            service  is  a  product  separate from  other  components  of            service.    There  is  no  evidence  that  any  customer  has            purchased, or would wish to purchase, ADEX service separately            from the purchase  of other  components of service.   Nor  is            there evidence that it  would be efficient for any  entity to            provide  ADEX service  separately  from  other components  of            service.55                                              ____________________            55.  The  Fourth Circuit  came to a  similar conclusion  on a            nearly identical record when it rejected STI's tying claim:                      If   "access   to"  MV/ADEX   and  repair                      services   are   considered  to   be  the                      products  in  question,  appellants  have                      clearly  failed   to  produce  sufficient                                         -83-                                          83                      In contrast, the record does  contain evidence that            ADEX software  is a  product separate from  support services.            It  is undisputed that CMO  customers wish to  license -- and            have licensed  -- ADEX  software  without purchasing  support            services from  DG or a TPM.  There is also evidence that some            of Grumman's customers would  consider licensing ADEX from DG            so that Grumman could continue to service their MV computers.            In  addition, the  summary  judgment record  would support  a            finding that for many years DG provided diagnostics and other            service "tools" to computer purchasers as  part of a computer            equipment package,  regardless  whether the  owner  performed            self-maintenance  or  hired  DG  or a  TPM  to  maintain  the            computers.  In fact, there is evidence that through the early            1980s, DG  provided service  "tools" --  including diagnostic            software other than ADEX -- directly to TPMs.  Finally, there            is some  evidence  that other  computer  manufacturers  (IBM,            Digital  Equipment Corporation,  and  Wang) have  licensed or            sold diagnostics to those other than their service customers.                                            ____________________                      evidence  that the  products are  in fact                      separate.    On  the  record  before  us,                      demand  for mere "access  to" MV/ADEX, in                      contrast  to demand  for licenses  to use                      MV/ADEX, is indistinguishable from demand                      for  repair  services.   Appellants  have                      introduced  no  evidence  that there  are                      customers  who  would  purchase  MV/ADEX-                      assisted  diagnostic services  separately                      from all other  repair services for  Data                      General equipment.            STI, 963 F.2d at 685 n.9.            ___                                         -84-                                          84            Viewed  in  a light  most  favorable to  Grumman,  the record            reveals a  genuine dispute  as to whether  ADEX software  and            support services  for DG computers are  distinct products for            the  purposes of  a tying analysis.56   Consequently,  we may            proceed  to   determine   whether  Grumman   has   introduced            sufficient  proof that  DG has  conditioned the  licensing of            ADEX  to  CMOs on  the agreement  of  these customers  not to            purchase service from TPMs.                           b.  Tying Arrangement                           _____________________                      Proof  of  a tying  arrangement  generally requires            evidence that  the supplier's  sale of the  tying product  is            conditioned upon  the unwilling purchase of  the tied product            from the supplier or an unwilling promise not to purchase the            tied product from  any other supplier.   See, e.g., Jefferson                                                     ___  ____  _________            Parish, 466 U.S. at 12 ("[T]he essential characteristic of an            ______            invalid  tying arrangement lies  in the seller's exploitation            of its control over the tying product to force the buyer into            the purchase of a tied product that the buyer either did  not            want at all, or might have preferred to purchase elsewhere on            different  terms.");  Wells  Real  Estate, 850  F.2d  at  814                                  ___________________            ("Tying  arrangements involve  the use  of leverage  over the            market for one product . . . to coerce purchases  of a second            product  . .  . .").   In  the absence  of an  explicit tying                                            ____________________            56.  Again, the  Fourth Circuit reached  a similar conclusion            for similar reasons.  See STI, 963 F.2d at 684-85.                                  ___ ___                                         -85-                                          85            agreement,  conditioning  may   be  inferred  from   evidence            indicating  that  the  supplier  has  actually   coerced  the            purchase or  non-purchase of another product.   See Amerinet,                                                            ___ _________            Inc. v. Xerox  Corp., 972  F.2d 1483, 1500  (8th Cir.  1992),            ____    ____________            cert.  denied,  113 S.  Ct.  1048  (1993); Advanced  Computer            _____  ______                              __________________            Servs.,  Inc.  v.  MAI Sys.  Corp.,  845  F.  Supp. 356,  368            _____________      _______________            (E.D.Va. 1994) (citing John H. Shenefield & Irwin M. Stelzer,            The Antitrust Laws: A Primer 72 (1993) ("In the absence of an            ____________________________            explicit agreement  requiring the purchase as  a condition of            the sale, courts  will accept  proof suggesting  any kind  of            coercion  by the seller  or unwillingness to  take the second            product by the buyer.")); see  also Tic-X-Press, Inc. v. Omni                                      ___  ____ _________________    ____            Promotions  Co., 815 F.2d 1407, 1418 (11th Cir. 1987) ("It is            _______________            well established that coercion  may be established by showing            that the facts and circumstances  surrounding the transaction            as a practical  matter forced the  buyer into purchasing  the            tied  product.").   In essence,  whether the  conditioning is            explicit  or  implicit,  we   will  not  consider  the  anti-            competitive effects of a tie to be unreasonable per se unless                                                            ___ __            there  is evidence that the supplier of the tying product has            actually used its market power to impose the condition.                      Grumman points to  only one alleged negative  tying            arrangement,  asserting  that  DG's  Cooperative  Maintenance            Agreement  ("CMO  Agreement")   contains  an  explicit  tying            condition.  The  CMO Agreement indeed states that DG designed                                         -86-                                          86            the  CMO  program  for   "customers  who  perform  their  own            maintenance" and that one qualifying criterion for CMO status            is  that  the  customer  "[m]aintain[]  systems  which   were            purchased either for  itself or for  resale to its  customers            [as an official  DG distributor]."  And,  although the record            suggests  that  CMOs  may  still  purchase  DG  service  (and            presumably TPM  service) on  a "time and  materials" basis,57            CMOs  do not  enter  contracts with  either  DG or  TPMs  for            ongoing  support services.   DG  and Grumman both  agree that            CMOs  cannot allow TPMs to  use copies of  ADEX licensed by a            CMO.                      Grumman's allegation of an illegal tie cannot go to            a  jury  on  a  record so  sparse.    Before  turning to  the            principal flaw  in Grumman's case,  we note that  these facts            lend only  modest support to  the accusation  that CMOs  have            actually promised not to purchase support services from TPMs.            The  CMO Agreement  does  require that  participants maintain            their own  computers, but  nowhere does the  agreement define            self-maintenance  status   in  detail  or  elaborate  on  the            consequences to a CMO if it enters a  service contract with a                                            ____________________            57.  Frederick Raley,  Jr., a  DG official, testified  at his            deposition  that "self-maintaining" CMO customers would still            be able to use  DG service, except that  "they wouldn't be  a            contract  customer,  they  would  be  a  time  and  materials            customer."   This portion of Raley's  deposition was actually            placed in the  record by Grumman as part of  an exhibit to an                                     _______            affidavit  supporting Grumman's  opposition  to one  of  DG's            motions for summary judgment.                                         -87-                                          87            TPM.   In fact, as we  have noted, there is  some evidence in            the  record that CMOs  are free to  purchase support services            from others without adverse consequences, at least on a "time            and materials" basis.                      More  importantly, there  is virtually  no evidence            that  any CMO  has  unwillingly chosen  to  maintain its  own                                ___________            computers.  Although there is some evidence that DG officials            designed  the CMO  program  in part  to  prevent loss  of  DG            revenue to TPMs, there  is no evidence that consumers  became            CMO customers for any reason other than their belief that the            CMO program was a "product" superior to TPM service.  Indeed,            while Grumman has argued tirelessly that DG service customers                                                        _______            are  forced  to  swallow   overpriced  and  inferior  support            service, Grumman  has offered no evidence  that CMO customers                                                            ___            are similarly disadvantaged.  There is not a single affidavit            in the  record  in  which a  CMO  customer  expresses  either            displeasure with the CMO program or an  unfulfilled desire to            switch to a  TPM.58  Nor is there any  other type of evidence            that  DG equipment  owners capable  of maintaining  their own            equipment  would be more  satisfied as TPM  customers than as            CMO  customers.   Consequently,  the evidence  in the  record                                            ____________________            58.  Likewise, there is no evidence in the record that former            TPM customers have reluctantly terminated  their relationship            with Grumman in  order to  participate in the  CMO program.              Cf. Kodak, 112 S.  Ct. at 2081 (noting that  record contained            ___ _____            evidence that "consumers have  switched to Kodak service even            though they preferred [TPM] service").                                         -88-                                          88            would  not allow  a  reasonable jury  to  find that  the  CMO            program is "an inferior or overpriced product," Amerinet, 972                                                            ________            F.2d at 1501, protected from competition by DG's exploitation            of its control over ADEX.                      In  conclusion, Grumman's allegation  of a positive            tie between ADEX service and DG support services fails in the            absence  of proof that these  services are truly two distinct            products.   Grumman's  allegation of  a negative  tie between            ADEX software and non-purchase  of TPM support services fails            in the absence of  proof that DG coerced consumers  to accept            such an arrangement.  Accordingly, the district court did not            err in granting DG's motion for summary judgment on Grumman's            tying counterclaim.                      2.  Monopolization                      __________________                      In  addition to  alleging  unlawful tying,  Grumman            accused  DG  of willfully  maintaining  its  monopoly in  the            aftermarket  for  service of  DG  computers  in violation  of            Section 2 of the Sherman Act, 15 U.S.C.   2, which  prohibits            the  monopolization  of "any  part of  the trade  or commerce            among  the several States."   To survive  summary judgment on            its  willful maintenance  claim, Grumman  must demonstrate  a            genuine dispute about the existence of two elements: (1) DG's            possession  of monopoly  power  in the  market59 for  support                                            ____________________            59.  DG does not seriously  dispute Grumman's contention that            the  aftermarket for  service of  DG computers  comprises the            "relevant  market"  for   purposes  of  antitrust   analysis.                                         -89-                                          89            services of DG  computers; and (2)  DG's maintenance of  that            power  through "exclusionary  conduct."   Town of  Concord v.                                                      ________________            Boston Edison Co., 915  F.2d 17, 21 (1st Cir.  1990) (Breyer,            _________________            C.J.) (citing,  inter alia, United States  v. Grinnell Corp.,                            _____ ____  _____________     ______________            384  U.S. 563,  570-71 (1966)),  cert. denied,  499 U.S.  931                                             _____ ______            (1991).  The district court assumed the existence of monopoly            power  but  granted  summary  judgment on  the  grounds  that            Grumman  had not  demonstrated the  need for  a trial  on the            element of exclusionary conduct.  We follow suit.60                      "Exclusionary  conduct"  is  defined as  "`conduct,            other than competition on the merits or restraints reasonably            "necessary"  to competition  on the  merits,  that reasonably            appears  capable  of  making a  significant  contribution  to            creating or  maintaining monopoly power.'"   Town of Concord,                                                         _______________            915  F.2d at 21 (quoting  Barry Wright Corp.  v. ITT Grinnell                                      __________________     ____________            Corp., 724 F.2d  227, 230 (1st Cir. 1983) (Breyer, J.), and 3            _____            Phillip Areeda & Donald F. Turner, Antitrust Law   626, at 83                                               _____________                                            ____________________            Accordingly, and in view  of our disposition of this  case on            other grounds, we need not consider this issue.            60.  We note, however, that  the record does contain evidence            of DG's monopoly power in the assumed service aftermarket for            DG  computers.  In addition to DG's monopoly share (over 90%)            of the  service aftermarket, the record  contains evidence of            barriers  to   entry  (e.g.,  costs  to   TPMs  of  obtaining            diagnostics and other  service "tools"), market imperfections            (e.g.,  high information  costs for  computer  purchasers and            high  switching  costs for  DG  equipment  owners), and  more            importantly,  supracompetitive  service   prices  and   price            discrimination among DG service customers.                                         -90-                                          90            (1978)  (hereinafter  "Areeda  &  Turner")).    We  label  as                                   _________________            improper that conduct which harms the competitive process and                                                              _______            not  conduct  which simply  harms  competitors.   Id.    That                                                              ___            process is harmed when  conduct "obstructs the achievement of            competition's basic goals --  lower prices, better  products,            and more efficient production  methods."  Id. at 21-22.   Cf.                                                      ___             ___            Olympia Equip.  Leasing Co.  v. Western  Union Tel. Co.,  797            ___________________________     _______________________            F.2d  370,  375  (7th  Cir. 1986)  (describing  shift  in the            emphasis  of "antitrust policy .  . . from  the protection of            competition  as  a process  of rivalry  to the  protection of            competition  as a  means of promoting  economic efficiency"),            cert. denied, 480 U.S. 934 (1987).  In contrast, exclusionary            _____ ______            conduct does not include behavior which poses no unreasonable            threat to consumer  welfare but is merely  a manifestation of            healthy competition, an absence  of competition, or a natural            monopoly.  See,  e.g., United States  v. Grinnell Corp.,  384                       ___   ____  _____________     ______________            U.S. 563, 570-71 (1966) (holding that Section 2 punishes only            "willful  acquisition or  maintenance [of monopoly  power] as            distinguished from growth or  development as a consequence of            a superior product, business acumen, or historic accident").                      Grumman's   primary   contention   is   that   DG's            unilateral  refusal  to license  ADEX  to  anyone other  than            qualified    self-maintainers     constitutes    exclusionary                                         -91-                                          91            conduct.61    Grumman  also  attacks   as  exclusionary  DG's            refusal  to provide other service tools directly to TPMs.  We            first  review  the principles  governing  the  analysis of  a            monopolist's unilateral  refusal to  deal,  and then  discuss            whether a  unilateral refusal  to license a  copyrighted work            might  ever deserve to be condemned as exclusionary.  We hold            below that the  desire of an author to  be the exclusive user            of its  original work is a  presumptively legitimate business            justification   for  the  author's   refusal  to  license  to            competitors.  We hold further that  Grumman has not presented            sufficient proof to rebut  this presumption and thereby avert            summary  judgment.    In  particular, we  find  no  merit  in            Grumman's contention that DG acted in an exclusionary fashion            in discontinuing its liberal  policies allowing TPM access to            diagnostic software.  Finally, we conclude that no reasonable            jury could find that DG's restrictions on TPM access to other            service tools amount to exclusionary conduct.                           a.  Unilateral Refusals to Deal                           _______________________________                      Because  a  monopolization claim  does  not require            proof of concerted activity, even the unilateral actions of a            monopolist  can  constitute  exclusionary conduct.    See  15                                                                  ___                                            ____________________            61.  Grumman also  seeks to portray the  alleged positive and            negative tying arrangements as exclusionary conduct violative            of Section  2.  We do  not consider this argument  because of            our  determination in  the  previous section  that DG's  ADEX            policies  cannot   properly  be  described   as  arrangements            conditioning  the sale of one product on the purchase or non-            purchase of another.                                         -92-                                          92            U.S.C.   2 (referring to "[e]very person who shall monopolize            . . . or combine or  conspire with any other person . .  . to                  __            monopolize") (emphasis  added); Moore  v. Jas. H.  Matthews &                                            _____     ___________________            Co.,  473 F.2d  328,  332  (9th  Cir. 1973)  (observing  that            ___            "section 2 is not  limited to concerted activity").   Thus, a            monopolist's unilateral refusal to  deal with its competitors            (as long as  the refusal harms  the competitive process)  may            constitute prima facie  evidence of  exclusionary conduct  in            the context  of a Section 2 claim.  See  Kodak, 112 S. Ct. at                                                ___  _____            2091 n.32 (citing Aspen Skiing Co.  v. Aspen Highlands Skiing                              ________________     ______________________            Corp.,  472  U.S. 585,  602-05  (1985)).    A monopolist  may            _____            nevertheless  rebut  such  evidence by  establishing  a valid            business justification for  its conduct.   See Kodak, 112  S.                                                       ___ _____            Ct.  at 2091 n. 32  (suggesting that monopolist  may rebut an            inference of exclusionary conduct by establishing "legitimate            competitive reasons for the refusal"); Aspen Skiing, 472 U.S.                                                   ____________            at  608  (suggesting  that  sufficient evidence  of  harm  to            consumers  and  competitors triggers  further  inquiry as  to            whether  the monopolist  has "persuade[d]  the jury  that its            [harmful]  conduct  was  justified  by  [a]  normal  business            purpose").  In general, a  business justification is valid if            it  relates  directly or  indirectly  to  the enhancement  of            consumer welfare.   Thus,  pursuit of efficiency  and quality            control  might  be  legitimate  competitive  reasons  for  an            otherwise exclusionary  refusal to deal, while  the desire to                                         -93-                                          93            maintain  a  monopoly market  share  or thwart  the  entry of            competitors  would  not.   See  Kodak,  112  S.  Ct. at  2091                                       ___  _____            (discussing the validity and sufficiency of various  business            justifications); Aspen Skiing, 472 U.S. at 608-11 (same); see                             ____________                             ___            generally 7  Areeda &  Turner   1504,  at 377-83; 9  Areeda &            _________    ________________                        ________            Turner    1713, 1716-17,  at 148-61, 185-239.  In  essence, a            ______            unilateral  refusal to  deal is  prima facie  exclusionary if            there is evidence of harm to the competitive process; a valid                                 ____            business  justification  requires  proof   of  countervailing            benefits to the competitive process.             ________                      Despite  the  theoretical  possibility, there  have            been relatively  few cases in  which a unilateral  refusal to            deal  has formed the basis  of a successful  Section 2 claim.            Several  of the cases commonly  cited for a  supposed duty to            deal  were actually  cases  of joint  conduct  in which  some            competitors joined to frustrate others.  See Associated Press                                                     ___ ________________            v.  United  States,  326  U.S.  1  (1945); United  States  v.                ______________                         ______________            Terminal R.R. Ass'n,  224 U.S.  383 (1912).   Prior to  Aspen            ___________________                                     _____            Skiing, the case that  probably came closest to  condemning a            ______            true unilateral refusal to  deal was Otter Tail Power  Co. v.                                                 _____________________            United  States,  410 U.S.  366  (1973),  which condemned  the            ______________            refusal  of  a  wholesale   power  supplier  either  to  sell            wholesale power to municipal systems or to "wheel power" when            Otter   Tail's   retail    franchises   expired   and   local            municipalities   sought  to   supplant  Otter   Tail's  local                                         -94-                                          94            distributors.  The case not only involved a capital-intensive            public  utility facility  -- which  could not  effectively be            duplicated and occupied a distinct separate market -- but the            Supreme  Court  laid  considerable  emphasis  on  "supported"            findings in the district court "that Otter Tail's refusals to            sell  at  wholesale  or  to  wheel  were  solely  to  prevent            municipal  power  systems   from  eroding  its   monopolistic            position."  410 U.S. at 378.                      In   Aspen   Skiing,   the   Court   criticized   a                           ______________            monopolist's unilateral  refusal to deal in  a very different            situation, casting serious doubt  on the proposition that the            Court has adopted any single  rule or formula for determining            when a unilateral refusal to deal is unlawful.  In that case,            an "all-Aspen" ski ticket -- valid at any mountain in Aspen -            -  had been  developed  and jointly  marketed when  the three            (later four)  ski areas  in Aspen  were owned by  independent            entities.  472  U.S. at 589.   Some  time after Aspen  Skiing            Company  ("Ski Co.") came into  control of three  of the four            ski areas, Ski Co. refused to continue a joint agreement with            Aspen Highlands Skiing Corp.  ("Highlands"), the owner of the            fourth  area.    Id.  at  592-93.    Although  there  was  no                             ___            "essential facility"  involved, the  Court found that  it was            exclusionary  for Ski  Co.,  as a  monopolist,  to refuse  to            continue a presumably efficient "pattern of distribution that                                         -95-                                          95            had originated in a competitive market  and had persisted for            several years."  Id. at 603.                             ___                      It is not entirely clear whether the Court in Aspen                                                                    _____            Skiing merely  intended to  create a category  of refusal-to-            ______            deal cases different from  the essential facilities  category            or whether  the Court was  inviting the  application of  more            general   principles  of  antitrust  analysis  to  unilateral            refusals  to deal.  We  follow the parties'  lead in assuming            that Grumman  need not tailor  its argument to  a preexisting            "category" of unilateral refusals to deal.                           b.  Unilateral Refusals to License                           __________________________________                      DG attempts to  undermine Grumman's  monopolization            claim  by proposing  a powerful  irrebuttable presumption:  a            unilateral  refusal   to  license   a  copyright   can  never            constitute exclusionary conduct.  We agree that some  type of            presumption is in order, but reach that conclusion only after            an exhaustive  inquiry touching  on the general  character of            presumptions, the  role of  market analysis in  the copyright            context,  existing  responses  to  the  tension  between  the            antitrust  and patent laws, the nature of the rights extended            by  the  copyright  laws,  and  our  duty  to  harmonize  two            conflicting statutes.                           (1)  The Propriety of a Presumption                                ______________________________                      We  begin  our   analysis  with  two  observations.            First, DG's rule of  law could be characterized as  either an                                         -96-                                          96            empirical assumption or a policy preference.  For example, if            we were convinced that refusals to license a copyright always            have a  net positive  effect on  the competitive  process, we            might adopt a presumption to this effect in order to preclude            wasteful litigation about a  known fact.  On the  other hand,            if we  were  convinced  that  the rights  enumerated  in  the            Copyright    Act    should   take    precedence    over   the            responsibilities set forth in  the Sherman Act, regardless of            the realities of the market, we might adopt a blanket rule of            preference.     DG's  argument  contains   elements  of  both            archetypal categories of presumptions.                        Second,  we  note   that  the  phrase  "competitive            process" may need some refinement in order to evaluate either            an empirical  assumption or  a policy  presumption concerning            the  desirability  of   unilateral  refusals  to  license   a            copyright.    Antitrust law  generally  seeks  to punish  and            prevent harm to consumers in particular markets, with a focus            on relatively  specific time  periods.  See,  e.g., Jefferson                                                    ___   ____  _________            Parish,  466 U.S. at 18  (holding that "any  inquiry into the            ______            validity of a tying  arrangement must focus on the  market or            markets in which the two products are sold, for that is where            the  anticompetitive  forcing has  its  impact").   Thus,  in            determining whether conduct is exclusionary in the context of            a monopolization  claim, we ordinarily  focus on harm  to the            competitive process  in the relevant market  and time period.                                         -97-                                          97            See generally 3 Areeda & Turner    517-28, at 346-88,    533-            ___ _________   _______________            36,  at 406-431.   Confining the competitive  process in this            way  assists courts  in  deciding particular  disputes  based            primarily  on  case-specific adjudicative  facts  rather than            generally-applicable "legislative" facts or assumptions.  The            use   and  protection   of   copyrights   also  affects   the            "competitive process," but it may not be appropriate to judge            the effect of the use  of a copyright by looking only  at one            market or one time period.                      We  now consider  what appears  to be  an empirical            proclamation  from   DG:    "[T]he  refusal   to  make  one's            innovation  available  to rivals  .  .  . is  pro-competitive            conduct."62    As support,  DG  cites Grinnell,  384  U.S. at                                                  ________            570-71, in which  the Court held that  willful maintenance of            monopoly  does  not  include  "growth  or  development  as  a            consequence   of  a  superior  product."     It  is  not  the            superiority of  a  work that  allows  the author  to  exclude            others, however,  but rather the limited  monopoly granted by            copyright law.   Moreover, one reason  why the Copyright  Act            fosters  investment and innovation  is that it  may allow the            author to earn monopoly profits by licensing the copyright to            others or reserving the  copyright for the author's exclusive                                            ____________________            62.  Elsewhere in its brief, DG adds  that DG's "refus[al] to            allow Grumman to  use MV/ADEX is  . . .  the precise  conduct            that  the  antitrust  and  copyright  laws  are  designed  to            encourage."                                         -98-                                          98            use.  See Sony Corp. of Am. v. Universal  City Studios, Inc.,                  ___ _________________    _____________________________            464  U.S.  417,  429  (1984)  (explaining  that  the  limited            copyright  monopoly "is  intended  to motivate  the  creative            activity  of  authors and  inventors  by the  provision  of a            special  reward").  Thus, at least in a particular market and            for a particular period of time, the Copyright  Act tolerates            behavior  that may harm both  consumers and competitors.  Cf.                                                                      ___            SCM Corp. v. Xerox  Corp., 645 F.2d 1195, 1203 (2d Cir. 1981)            _________    ____________            ("[T]he primary  purpose of the antitrust laws -- to preserve            competition --  can be  frustrated, albeit temporarily,  by a            holder's exercise of the patent's inherent exclusionary power            during its term."), cert. denied, 455 U.S. 1016 (1982).                                _____ ______                      DG does not in fact argue that consumers are better            off in  the short term  because of  the inability of  TPMs to            license ADEX.   Instead, DG suggests  that allowing copyright            owners  to exclude others from the use of their works creates            incentives which ultimately work  to the benefit of consumers            in the DG service  aftermarket as well  as to the benefit  of            consumers generally.  In other words, DG seeks to justify any            immediate  harm to  consumers by  pointing to  countervailing            long-term  benefits.   Certainly, a  monopolist's refusal  to            license others to use a commercially successful patented idea                                                                     ____            is likely to have more profound anti-competitive consequences            than  a refusal to allow others  to duplicate the copyrighted            expression of an  unpatented idea (although  such differences            __________                                         -99-                                          99            may  become  less   pronounced  if   copyright  law   becomes            increasingly  protective  of  intellectual  property  such as            computer  software).   But  by  no  means is  a  monopolist's            refusal  to  license a  copyright  entirely "pro-competitive"            within the  ordinary economic  framework of the  Sherman Act.            Accordingly, it  may be  inappropriate to adopt  an empirical            assumption  that  simply  ignores  harm  to  the  competitive            process  caused  by  a  monopolist's  unilateral  refusal  to            license a copyright.  Even if it is  clear that exclusive use            of a  copyright can have  anti-competitive consequences, some            type  of presumption  may  nevertheless be  appropriate as  a            matter of either antitrust law or copyright law.                           (2)  Antitrust Law and the Accommodation of                                   ______________________________________                                Patent Rights                                _____________                      Antitrust  law is  somewhat instructive.   Although            creation and  protection of original works  of authorship may            be a  national pastime, the  Sherman Act does  not explicitly            exempt  such  activity  from antitrust  scrutiny  and  courts            should  be wary of creating implied exemptions.  See Square D                                                             ___ ________            Co. v.  Niagara Frontier Tariff  Bureau, Inc., 476  U.S. 409,            ___     _____________________________________            421  (1986)  ("[E]xemptions  from  the  antitrust  laws   are            strictly construed and  strongly disfavored."); cf.  Flood v.                                                            ___  _____            Kuhn,  407 U.S.  258  (1972) (holding  that the  longstanding            ____            judicially  created exemption  of professional  baseball from            the  Sherman  Act is  an  established  "aberration" in  which            Congress has  acquiesced).   The Supreme Court  has suggested                                        -100-                                         100            that an  otherwise reasonable  yet anti-competitive use  of a            copyright should not  "be deemed  a per se  violation of  the                                                ___ __            Sherman Act,"  Broadcast  Music, Inc. v. CBS, Inc.,  441 U.S.                           ______________________    _________            1,  19 (1979),  but a monopolistic  refusal to  license might            still violate the rule of reason, see Rural Tel. Serv. Co. v.                                              ___ ____________________            Feist Publications,  Inc., 957  F.2d 765, 767-69  (10th Cir.)            _________________________            (analyzing reasonableness of monopolist's  unilateral refusal            to  license  copyrighted telephone  listings  to  a competing            distributor  of telephone directories),  cert. denied, 113 S.                                                     _____ ______            Ct. 490 (1992).63   Should an antitrust plaintiff  be allowed                                            ____________________            63.  It is  in  any event  well  settled that  concerted  and            contractual behavior that threatens competition is not immune            from  antitrust  inquiry  simply  because   it  involves  the            exercise of copyright privileges.   See, e.g., Kodak, 112  S.                                                ___  ____  _____            Ct. at  2089 n.29 ("The Court has  held many times that power            gained  through some  natural and  legal advantage such  as a            patent,  copyright,  or  business  acumen can  give  rise  to            liability if `a seller exploits his  dominant position in one            market to expand his empire into the next.'") (quoting Times-                                                                   ______            Picayune Publishing Co.  v. United States, 345 U.S.  594, 611            _______________________     _____________            (1953) (tying  case)); United  States v. Paramount  Pictures,                                   ______________    ____________________            Inc.,  334  U.S. 131,  143  (1948)  (holding that  horizontal            ____            conspiracy to engage in price-fixing in copyright licenses is            illegal per se);  id. at 159  (holding that block-booking  of                    ___ __    ___            motion  pictures  --  "a  refusal  to  license  one  or  more            copyrights  unless another  copyright is  accepted" --  is an            illegal  tying arrangement);  Straus v.  American Publishers'                                          ______     ____________________            Ass'n, 231 U.S.  222, 234  (1913) ("No more  than the  patent            _____            statute   was  the  copyright   act  intended   to  authorize            agreements in unlawful restraint of trade . . . ."); Digidyne                                                                 ________            Corp.  v. Data General Corp.,  734 F.2d 1336  (9th Cir. 1984)            _____     __________________            (affirming   finding  of  illegal   tie  between  copyrighted            software and  computer hardware), cert. denied,  473 U.S. 908                                              _____ ______            (1985); cf.  Miller Insituform, Inc. v. Insituform of N. Am.,                    ___  _______________________    _____________________            Inc.,  830 F.2d 606, 608-09 & n.4 (6th Cir. 1987) (describing            ____            ways in which patent holder may  violate the antitrust laws),            cert.  denied,  484  U.S.   1064  (1988);  United  States  v.            _____  ______                              ______________            Westinghouse  Elec. Corp.,  648  F.2d 642,  646-47 (9th  Cir.            _________________________            1981) (same).                                        -101-                                         101            to demonstrate the anti-competitive effects of a monopolist's            unilateral refusal to  grant a copyright license?   Would the            monopolist then  have to  justify its  refusal to  license by            introducing evidence  that the  protection  of the  copyright            laws  enabled the  author  to create  a  work which  advances            consumer welfare?                      The  courts  appear  to   have  partly  settled  an            analogous conflict between the  patent laws and the antitrust            laws,  treating the  former  as creating  an implied  limited            exception  to the latter.   In Simpson v.  Union Oil Co., 377                                           _______     _____________            U.S.  13, 24  (1964), the  Supreme  Court stated  that "[t]he            patent laws which give a  17-year monopoly on `making, using,            or  selling the  invention'  are  in  pari materia  with  the                                              __  ____ _______            antitrust laws  and modify  them pro  tanto."   Similarly, we                                             ___  _____            have suggested  that  the  exercise  of patent  rights  is  a            "legitimate means" by  which a firm may maintain its monopoly            power.  Barry  Wright, 724 F.2d  at 230.   Other courts  have                    _____________            specifically held that  a monopolist's unilateral  refusal to            license  a  patent  is  ordinarily  not  properly  viewed  as            exclusionary conduct.  See Miller Insituform, 830 F.2d at 609                                   ___ _________________            ("A patent  holder who lawfully  acquires a patent  cannot be            held  liable   under  Section  2  of  the   Sherman  Act  for            maintaining  the  monopoly  power  he  lawfully  acquired  by            refusing to  license the patent  to others.");  Westinghouse,                                                            ____________            648  F.2d  at 647  (finding  no  antitrust violation  because                                        -102-                                         102            "Westinghouse  has done no more  than to license  some of its            patents and refuse  to license others"); SCM Corp.,  645 F.2d                                                     _________            at  1206 (holding  that  "where a  patent  has been  lawfully            acquired,  subsequent  conduct permissible  under  the patent            laws cannot trigger any liability under the antitrust laws");            see also  3 Areeda  & Turner    704, at  114 ("The  patent is            ___ ____    ________________            itself a  government grant  of monopoly  and is therefore  an            exception  to usual  antitrust rules.").   This  exception is            inoperable  if the  patent  was unlawfully  "acquired."   SCM                                                                      ___            Corp.,  645 F.2d  at 1208-09  (analyzing legality  of Xerox's            _____            acquisition  of plain-paper  copier patent); see  generally 3                                                         ___  _________            Areeda & Turner     705-707, at 117-45  (discussing effect of            _______________            patent  acquisition, internal  development  of  patents,  and            improprieties  in  patent  procurement  on  applicability  of            antitrust laws).                      The  "patent  exception"  is  largely  a  means  of            resolving  conflicting rights  and responsibilities,  i.e., a            policy presumption.   See, e.g., Miller  Insituform, 830 F.2d                                  ___  ____  __________________            at  609  (declaring summarily  that  "[t]here  is no  adverse                                                           __            effect  on competition  since, as  a patent  monopolist, [the                                    _____            patent holder] had [the] exclusive right to manufacture, use,            and sell  his invention.")  (emphasis  added).   At the  same            time, the  exception is  grounded in an  empirical assumption            that  exposing patent  activity  to wider  antitrust scrutiny            would weaken  the incentives  underlying  the patent  system,                                        -103-                                         103            thereby  depriving  consumers of  beneficial products.   See,                                                                     ___            e.g., SCM Corp., 645 F.2d at 1209 (holding that imposition of            ____  _________            antitrust liability  for an arguably  unreasonable refusal to            license  a lawfully  acquired patent "would  severely trample            upon  the incentives  provided by  our patent  laws and  thus            undermine the entire patent system").                           (3)  Copyright Law                                _____________                      Copyright  law  provides further  guidance.     The            Copyright  Act  expressly grants  to  a  copyright owner  the            exclusive right to distribute the protected work by "transfer            of ownership, or by rental, lease,  or lending."  17 U.S.C.              106.   Consequently, "[t]he owner  of the copyright,  if [it]            pleases, may  refrain from  vending or licensing  and content            [itself] with  simply exercising the right  to exclude others            from using [its]  property."   Fox Film Corp.  v. Doyal,  286                                           ______________     _____            U.S. 123, 127  (1932).  See also  Stewart v. Abend,  495 U.S.                                    ___ ____  _______    _____            207,  229  (1990).   We may  also venture  to infer  that, in            passing the Copyright Act,  Congress itself made an empirical            assumption that allowing copyright holders to collect license            fees  and exclude  others from  using  their works  creates a            system of  incentives that  promotes consumer welfare  in the            long  term  by  encouraging  investment in  the  creation  of            desirable artistic  and functional works of  expression.  See                                                                      ___            Feist  Publications, Inc. v. Rural Tel. Serv. Co., 111 S. Ct.            _________________________    ____________________            1282,  1290 (1991) ("The primary  objective of a copyright is                                        -104-                                         104            not to reward  the labor  of authors, but  `[t]o promote  the            Progress   of  Science  and   useful  Arts.'")  (brackets  in            original)  (quoting U.S.  Const. art.  I.    8, cl.  8); Sony                                                                     ____            Corp., 464 U.S.  at 429 (discussing  goals and incentives  of            _____            copyright  protection);  Twentieth  Century  Music  Corp.  v.                                     ________________________________            Aiken, 422 U.S. 151, 156 (1975) ("The immediate effect of our            _____            copyright  law is to secure  a fair return  for an `author's'            creative  labor.  But the ultimate aim is, by this incentive,            to  stimulate  artistic  creativity  for  the general  public            good.").  We cannot require antitrust defendants to prove and            reprove the  merits of  this legislative assumption  in every            case  where a  refusal to  license a  copyrighted work  comes            under  attack.    Nevertheless,   although  "nothing  in  the            copyright statutes would prevent  an author from hoarding all            _________ ________            of  his works during the term of the copyright," Stewart, 495                                                             _______            U.S.  at 228-29 (emphasis added),  the Copyright Act does not            explicitly  purport to limit  the scope  of the  Sherman Act.            And, if the Copyright Act is silent on the subject generally,            the silence is particularly acute in cases where a monopolist            harms  consumers in  the  monopolized market  by refusing  to            license a copyrighted work to competitors.                      We acknowledge that Congress has  not been entirely            silent on the relationship between antitrust and intellectual            property laws.  Congress  amended the patent laws in  1988 to            provide that "[n]o patent  owner otherwise entitled to relief                                        -105-                                         105            for infringement . . . of a patent shall be  denied relief or            deemed  guilty of misuse  or illegal extension  of the patent            right by reason of [the  patent owner's] refus[al] to license            or use any rights to the patent."  35 U.S.C.   271(d) (1988).            Section  271(d) clearly  prevents an  infringer from  using a            patent misuse defense when  the patent owner has unilaterally            refused a license, and may even herald the prohibition of all            antitrust claims  and counterclaims premised on  a refusal to            license  a patent.    See Richard  Calkins,  Patent Law:  The                                  ___                    ________________            Impact  of  the  1988 Patent  Misuse  Reform  Act and  Noerr-            _____________________________________________________________            Pennington   Doctrine  on   Misuse  Defenses   and  Antitrust            _____________________________________________________________            Counterclaims,   38   Drake   L.   Rev.   192-97   (1988-89).            _____________            Nevertheless,   while   Section  271(d)   is   indicative  of            congressional  "policy"  on the  need  for  antitrust law  to            accommodate  intellectual  property  law,  Congress  did  not            similarly amend the Copyright Act.                           (4)  Harmonizing the Sherman Act and the                                      ___________________________________                                Copyright Act                                _____________                      Since neither the Sherman Act nor the Copyright Act            works a  partial  repeal  of  the other,  and  since  implied            repeals  are disfavored, e.g., Watt  v. Alaska, 451 U.S. 259,                                     ____  ____     ______            267 (1981), we  must harmonize the two  as best we  can, id.,                                                                     ___            mindful of the legislative and judicial approaches to similar            conflicts created by the patent laws.  We must not lose sight            of the need to preserve the economic incentives fueled by the            Copyright Act, but neither may  we ignore the tension between                                        -106-                                         106            the two very different policies embodied in the Copyright Act            and  the Sherman Act, both designed ultimately to improve the            welfare of consumers in  our free market system.   Drawing on            our discussion above, we hold that while exclusionary conduct            can include  a monopolist's  unilateral refusal to  license a            copyright,  an author's desire to exclude  others from use of            its  copyrighted  work  is  a  presumptively  valid  business            justification for any immediate harm to consumers.64                             c.  DG's Refusal to License ADEX to non-CMOs                            ____________________________________________                      Having arrived at  the applicable legal  standards,            we may resolve Grumman's principal allegation of exclusionary            conduct.   Although there  may be  a genuine  factual dispute            about  the effect on DG  equipment owners of  DG's refusal to            license  ADEX to  TPMs, DG's  desire to  exercise its  rights            under  the Copyright  Act is  a presumptively  valid business            justification.                       Apparently   sensing  the  uphill   nature  of  its            allegation of  an exclusionary  refusal  to license,  Grumman            seeks to overcome any  obstacles primarily by  characterizing            DG's  licensing  policies  as  a   monopolist's  exclusionary            withdrawal  of  assistance  within  the  framework  of  Aspen                                                                    _____                                            ____________________            64.  Wary of  undermining the Sherman Act, however, we do not            hold  that  an  antitrust  plaintiff  can  never  rebut  this            presumption, for there  may be rare  cases in which  imposing            antitrust liability  is unlikely to frustrate  the objectives            of the Copyright Act.                                        -107-                                         107            Skiing.   Citing  Aspen  Skiing, Grumman  contends that  DG's            ______            _____  ______            refusal to license ADEX to TPMs, in light of the fact that DG            previously   allowed  TPMs   to   use  DG   diagnostics,   is            exclusionary  conduct because "[a] monopolist that has helped            a  market  develop  may  not  withdraw  its  support  without            legitimate business justifications."                      Assuming  that  such  a   claim  can  overcome  the            presumption that a refusal to license is not exclusionary, we            nevertheless hold that Aspen Skiing cannot apply to the facts                                   ____________            of this case.  The reasoning of Aspen Skiing has little to do                                            ____________            with the fact that defendant Ski Co. withdrew assistance upon            which competitors  may have relied when  entering the market.            Rather, the decision turns on a comparison of the behavior of            firms in a competitive  market (the Aspen ski market)  with a            monopolist's  behavior once  competition has  been curtailed.            The  Court  noted that  the  rich  soil  of  competition  had            produced  the   all-mountain  ticket  in   Aspen  and   other            multimountain  areas, justifying  an  "infer[ence] that  such            tickets satisfy consumer demand in free competitive markets."            472 U.S.  at 603.  See  also Olympia Equip., 797  F.2d at 377                               ___  ____ ______________            (suggesting  that the  facts  in Aspen  Skiing indicate  that                                             _____________            "competition  required some cooperation among competitors" in            the Aspen ski market).   Ski Co.'s decision to  eliminate the            ticket in later years was  a sign that the weeds  of monopoly            had begun to take hold, to the possible detriment of consumer                                        -108-                                         108            welfare.   Aspen  Skiing, 472  U.S. at  604.   Finally, after                       _____________            canvassing evidence of consumer preferences concerning skiing            options  at Aspen,  the Court  concluded that  Ski Co.'s  new            policies did in  fact harm consumers.   Id. at  605-607.   In                                                    ___            short, instead of prescribing  a categorical approach,  Aspen                                                                    _____            Skiing  ultimately calls  for an  inquiry that  is relatively            ______            routine   in  antitrust   analysis:   namely,   whether   the            monopolist's  actions  unjustifiably  harm   the  competitive            process  by  frustrating  consumer preferences  and  erecting            barriers to competition.  Cf. Olympia Equip., 797 F.2d at 379                                      ___ ______________            ("If [Aspen Skiing] stands for any principle that goes beyond                  ____________            its  unusual facts, it is that  a monopolist may be guilty of            monopolization if  it refuses to cooperate  with a competitor            in circumstances  where some cooperation is  indispensable to            effective competition.").                      Grumman  attempts to analogize  this case  to Aspen                                                                    _____            Skiing  by focusing on the fact that DG once encouraged firms            ______            to  enter  the DG  service  aftermarket  by allowing  liberal            access  to service  tools,  but  no  longer  does  so.    The            analytical framework of Aspen Skiing cannot function in these                                    ____________            circumstances, however,  because we  are unable to  view DG's            market  practices  in  both  competitive  and  noncompetitive            conditions.  While TPMs  have made inroads in the  market for            service of DG computers,  DG has always been a  monopolist in            that market, and competitive conditions have never prevailed.                                        -109-                                         109            Therefore, it would not  be "appropriate to infer"  from DG's            change of  heart that  its former policies  "satisfy consumer            demand in free competitive markets."   Aspen Skiing, 472 U.S.                                                   ____________            at 603.                      Nor does  it appear that  Grumman would be  able at            trial to overcome the presumption on any other theory.  There            is  no evidence that DG  acquired its ADEX  copyrights in any            unlawful  manner;  indeed,   the  record  suggests  that   DG            developed all its software internally.  Cf. 3 Areeda & Turner                                                    ___   _______________               706,  at  127-28  (arguing  that  although  an  internally            developed  patent may be as exclusionary as one acquired from            outside a  firm, labelling  the former as  exclusionary would            "discourage  progressiveness  by monopolists").    And, while            there is evidence that DG knew that developing a "proprietary            position" in  the area of  diagnostic software would  help to            maintain its monopoly  in the aftermarket  for service of  DG            computers, there is also evidence that DG set out to create a            state-of-the-art  diagnostic that  would help to  improve the            quality of DG service.   Cf. id.   706, at 128-29 (suggesting                                     ___ ___            that  "nearly all commercial  research rests on  a mixture of            motivations" and that a search for an overriding "antisocial"            motivation  would  be unilluminating).    In  fact, there  is            clearly some evidence  that ADEX is a  significant benefit to            owners of DG's MV computers.   ADEX is a better  product than            any  other  diagnostic for  MV computers.    The use  of ADEX                                        -110-                                         110            appears to have increased the efficiency and reduced the cost            of  service  because  technicians  can  locate problems  more            quickly  and,  through  the  use of  the  software's  "remote            assistance" capability, can  arrive at customer  sites having            determined  ahead   of  time   what  replacement  parts   are            necessary.   In addition to  the possibility of  lower prices            occasioned by such gains in efficiency, ADEX also promises to            lower prices  through gains  in effectiveness.   For example,            customers may  save the cost of  replacing expensive hardware            components because the use of advanced diagnostics  increases            the  possibility that  technicians can  locate a  problem and            repair the component.                      d.  DG's Other Restrictive Policies                      ___________________________________                      Grumman's other allegations of exclusionary conduct            are equally devoid of merit and require no extended analysis.            It  is essentially undisputed that  DG will not provide spare            parts,  depot repair services,  certain documentation, change            order kits, or schematics to TPMs.  But there is no  evidence            of any resulting harm  to DG equipment owners.  DG makes most            of  these  items  available  directly  to  equipment  owners.            Equipment owners "may  purchase . . .  depot repair services,            rev-ups [change  order kits],  and spare parts  directly from            DG, regardless of whether their computers are serviced by DG,            TPMs, or themselves."   Grumman II, 761 F. Supp.  at 189.  We                                    __________            cannot presume that elimination  of an intermediate seller of                                        -111-                                         111            such items  harms consumers; indeed, consumers  are likely to            benefit by not having  to accept TPMs' mark-up of  DG prices.            Further,  a direct sales policy does not act as a significant            barrier to market entry  by competitors offering lower prices            for  higher quality  support services.   TPM  technicians may            identify broken parts for the customer to send to DG's repair            depot,  use the  change order  kits to  upgrade  a customer's            computer, and  install spare  parts the customer  has ordered            from DG.                      Neither  equipment owners  nor  TPMs  may  purchase            schematics  (blueprints  of  equipment  that   often  contain            manufacturing  secrets),  but   Grumman  has  not  introduced            sufficient evidence that this policy constitutes exclusionary            conduct.   Grumman's theory  below was  that DG's  refusal to            sell  schematics to  TPMs prevented  TPMs from  acquiring the            information   necessary   to   develop    fully   competitive            substitutes  for  ADEX.   Even  a  monopolist, however,  "may            normally keep  its innovations secret from its rivals as long            as it wishes."   Berkey Photo, Inc. v. Eastman Kodak Co., 603                             __________________    _________________            F.2d 263, 281  (2d Cir.  1979), cert. denied,  444 U.S.  1093                                            _____ ______            (1980).  DG's policy  might be exclusionary if DG  had sought            to  alter  its   equipment  (and  therefore  the   schematics            describing that equipment) in order to  prevent technological            advances by TPMs.  But, as the district court noted, "Grumman            .  . . makes no allegations that  DG has in fact attempted to                                        -112-                                         112            subvert  competitors'  efforts   to  develop  and   implement            competing diagnostics."  Grumman II, 761 F. Supp. at 191.                                     __________                      In  conclusion, Grumman  has not  produced evidence            from  which a jury could find that DG engaged in exclusionary            conduct  by unilaterally  refusing  to license  ADEX or  sell            schematics to  TPMs, or by  only selling other  service tools            directly to equipment  owners.  Therefore, there was no error            in  the  district  court's   entry  of  summary  judgment  on            Grumman's monopolization claim.                                         IV.                                         IV.                                         ___                                      CONCLUSION                                      CONCLUSION                                      __________                      For the foregoing reasons,  we affirm the  district            court in every respect  save for its failure to  instruct the            jury on its duty to consider Grumman's plea for apportionment            of Grumman's  nonduplicative profits.65   We remand  the case            to  the district court for the sole purpose of resolving that            issue.                      So ordered.                      ___________                                            ____________________            65.  We have considered all of Grumman's other arguments, and            find none of sufficient merit to alter our conclusions.                                        -113-                                         113
