The American Antitrust Institute (AAI) recently filed an amicus brief in Innovative Health, LLC v. Biosense Webster, LLC, No. 25-6024, urging the Ninth Circuit to affirm jury verdicts that a Johnson & Johnson Company, Biosense Webster, violated Sections 1 and 2 of Sherman Act and the Cartwright Act through unlawful tying, monopolization, and attempted monopolization.
Biosense manufactures cardiac mapping machines, which are used by electrophysiologists to help treat irregular heart rhythms. Biosense also provides clinical support for the machines and sells catheters needed for mapping procedures. The FDA permits used catheters to be reprocessed for re-use. Innovative is a reprocessor that competes against Biosense by selling what the evidence showed are lower-priced, higher-quality catheters.
Biosense adopted a tying policy conditioning its provision of clinical support on a hospital’s purchase of Biosense catheters. Innovative alleged that Biosense’s conduct excluded reprocessors from the catheter market, thus depriving hospitals of the choice to buy superior catheters on better terms. In finding that Biosense’s policy represented an unlawful tie, the jury agreed with Innovative that clinical support for Biosense’s mapping machines, the tying product, represented a single-brand aftermarket under the so-called Kodak/Epic lock-in standards. The jury awarded Innovative over $147 in damages for lost sales, an amount subject to trebling under the Clayton Act.
On appeal, Biosense argues that courts extremely rarely define single-brand aftermarkets due to a legal presumption against them, and that the damages award should be disaggregated to remove conduct that Biosense claimed was lawful.
AAI’s brief pushes back on Biosense’s challenges to the jury verdicts. AAI showed that there is no such presumption against single-brand markets in aftermarkets, and that courts regularly recognize such markets where, as here, real-world economic evidence demonstrates that competition in a foremarket fails to discipline anticompetitive conduct in the aftermarket. On the issue of damages disaggregation, AAI showed that Biosense’s position lacked both factual and legal support given the jury’s finding that hospitals were coerced into purchasing Biosense catheters and the jury’s conclusion that all of Biosense’s conduct was unlawful.
The brief was written by AAI General Counsel Mark S. Hegedus with assistance from AAI President Randy M. Stutz.
Read the full amicus brief: AAI Amicus Brief in Innovative Health, LLC v. Biosense Webster, LLC
