Background
Intuitive Surgical manufactures the da Vinci robot for minimally invasive soft-tissue surgery and the EndoWrist instruments that attach to it. Surgical Instrument Service Company, or SIS, began offering hospitals a lower-cost service in 2019 that involved inspecting and refurbishing EndoWrists while another company reset their use counters. After Intuitive warned participating hospitals that using unauthorized refurbished instruments breached their agreements and could affect service for their da Vinci systems, every hospital stopped using SIS’s service.
SIS sued under Sections 1 and 2 of the Sherman Act, alleging tying, exclusive dealing, monopolization, and attempted monopolization. It presented evidence that Intuitive held more than 99% of the market for surgical robots used in minimally invasive soft-tissue surgery—the foremarket—and 100% of the aftermarket for EndoWrists. After the district court decided to instruct the jury that SIS had to prove four factors derived from Eastman Kodak and Epic Games to establish a valid single-brand aftermarket, SIS acknowledged that it had not offered evidence on those factors and stipulated to judgment for Intuitive.
The Court’s Holding
The Ninth Circuit held that the proposed Kodak/Epic instruction misstated the law as applied to SIS’s claims. Those factors apply when a defendant lacks market power in a competitive foremarket and a plaintiff instead seeks to establish market power in a downstream, single-brand aftermarket. SIS pursued a different theory: that Intuitive used its near-total power in the foremarket for surgical robots to obtain and maintain complete control of the EndoWrist aftermarket. That was a standard foremarket-to-aftermarket tying theory governed by ordinary antitrust market principles, so SIS did not have to prove the Kodak/Epic factors.
The panel also rejected Intuitive’s alternative request for judgment as a matter of law. Intuitive waived its argument that SIS failed to prove market power before 2019 by omitting that contention from its Rule 50(a) motions, and the trial evidence was sufficient in any event for a reasonable jury to find pre-2019 market power. Viewing the evidence favorably to SIS, a reasonable jury also could find that Intuitive’s process for approving third-party EndoWrist services was illusory. The court therefore reversed the judgment and remanded for further proceedings without deciding the ultimate merits of SIS’s antitrust claims.
Key Takeaways
- A plaintiff alleging that a defendant leveraged foremarket power into an aftermarket need not prove the Kodak/Epic factors when it presents evidence that the defendant already possessed market power in the foremarket.
- The Kodak/Epic framework is reserved for claims based on power in a single-brand aftermarket downstream from a competitive foremarket.
- The panel held only that the jury instruction was erroneous and that Intuitive was not entitled to judgment as a matter of law; it did not rule that Intuitive committed an antitrust violation.
Why It Matters
The opinion clarifies an important boundary in Ninth Circuit aftermarket litigation. A company with substantial power over a durable-goods foremarket cannot require plaintiffs challenging a related aftermarket restraint to satisfy the additional Kodak/Epic test merely because the aftermarket involves that company’s own brand.
The decision also preserves SIS’s opportunity to have its tying, exclusive-dealing, and monopolization theories evaluated under ordinary antitrust principles. Questions concerning patient safety, FDA approval, and the ultimate reasonableness or legality of Intuitive’s restrictions remain unresolved on remand.