On January 28, 2025, U.S. District Judge Araceli Martínez-Olguín granted judgment as a matter of law for defendant Intuitive Surgical, Inc. (“Intuitive” or “defendant”) on all claims brought by plaintiff, Surgical Instruments Service Co. Inc. (“SIS” or “plaintiff”). The Court’s ruling from the bench concluded a three-week jury trial at the eleventh hour before closing arguments. In her ruling, Judge Martínez-Olguín relied on the Ninth Circuit’s recent decision in Epic Games, Inc. v. Apple, Inc., 67 F.4th 946, 977 (9th Cir. 2023) to conclude that SIS could not prove an antitrust aftermarket and therefore could not proceed with its antitrust claims. The Court stayed proceedings on defendant’s counterclaims pending resolution of any appeal of SIS’s claims.
Plaintiff SIS offers repair services for robotic surgical equipment. These services allow hospitals to extend the life of their equipment rather than buying replacements from manufacturers. Among the products SIS services is a robotic system called the EndoWrist, sold by defendant Intuitive. In 2021, plaintiff sued Intuitive for allegedly leveraging its dominant position in the foremarket for minimally invasive soft-tissue surgical robots to force hospital customers into exclusive dealing arrangements. It claimed that these agreements unlawfully “tie” the sale of replacement equipment to the purchase of Intuitive’s robots and eliminate the need for SIS’s refurbishment services.
According to SIS, Intuitive’s conduct reduced competition in the aftermarket for the repair of EndoWrist systems and amounted to violations of both Sections 1 and 2 of the Sherman Act for unlawful tying, exclusive dealing, monopolization, and attempted monopolization. SIS additionally brought claims for unfair competition under the Lanham Act. In all, SIS sought $140 million in damages along with injunctive relief. Defendant twice attempted to dismiss the case by dispositive motion, but the Court allowed plaintiff’s claims to proceed to a jury.
Three weeks into the jury trial—with closing arguments set for the following morning—SIS objected to a jury instruction based on the Ninth Circuit’s recent decision in Epic v. Apple. This instruction would direct the jury to apply a four-part test set forth in Epic v. Apple to determine whether SIS proved the existence of an EndoWrist repair aftermarket in the United States—a necessary element of SIS’s Sherman Act claims. Specifically, SIS would need to demonstrate: “(1) the challenged aftermarket restrictions are ‘not generally known’ when consumers make their foremarket purchase; (2) ‘significant’ information costs prevent accurate life-cycle pricing; (3) ‘significant’ monetary or non-monetary switching costs exist; and (4) general market-definition principles regarding cross-elasticity of demand do not undermine the proposed single-brand market.” 67 F.4th at 977.
But the morning of closing arguments, plaintiff conceded that it lacked sufficient evidence to satisfy the Epic v. Apple test, and instead argued that the standard is inapplicable in the context of this case. The Court disagreed but was inclined to send the case to the jury regardless. SIS, in an effort to avoid an advisory opinion by the jury that could weigh against it on appeal, agreed to a joint proposal entering judgment for Intuitive on the Sherman Act counts in its Complaint. Shortly thereafter, the Court dismissed the jury, informing them that they would not be deliberating and thanking them for their service.
The case is Surgical Instrument Serv. Co., Inc. v. Intuitive Surgical, Inc., 3:21-cv-03496-AMO, (N.D. Cal.).
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