The American Antitrust Institute (AAI) recently filed an amicus brief in Surgical Instrument Service Co., Inc. v. Intuitive Surgical, Inc. urging the Ninth Circuit to reverse the district court’s order requiring proof of the so-called “Kodak/Epic” lock-in factors for aftermarket tying claims when the defendant has a monopoly in the foremarket.
Plaintiff SIS alleged that the defendant Intuitive holds a near-total monopoly (99%) in the market for minimally invasive surgical robots. According to the complaint, Intuitive used that power to force hospitals to purchase Intuitive’s own expensive replacement parts for the robots, blocking SIS’s lower-cost repair and refurbishing services. The district court issued a ruling requiring SIS to show that the Kodak/Epic factors were satisfied. These include: (1) consumers in the foremarket must not generally be aware of the aftermarket restrictions; (2) consumers cannot price the aftermarket restrictions accurately because of significant information costs; (3) the cost of switching to a different brand in the foremarket is high; and (4) the aftermarket is itself a well-defined market.
AAI’s brief argues that the district court erred because the Kodak/Epic factors can logically apply only when anticompetitive behavior in the aftermarket is constrained by a robustly competitive foremarket. AAI explains that when the primary market is monopolized, requiring the Kodak/Epic factors is both redundant and illogical because customer choice is already constrained. In this scenario, customer coercion is inherent and aftermarket restrictions cannot be considered voluntary or informed. Accordingly, applying the Kodak/Epic factors in monopolized markets creates a dangerous loophole that allows entrenched monopolists to extend their dominance without meaningful antitrust scrutiny.
AAI’s brief also points out that common policy concerns about expanded aftermarket liability are not implicated in this scenario. Efforts to protect efficient lifecycle pricing, contractual remedies, and incentives to compete in the foremarket only make sense when foremarket competition exists—something absent in this case. As a result, there is no policy justification for requiring proof of the Kodak/Epic factors in a case like this. Worse, insisting on the Kodak/Epic factors in such a setting may incentivize monopolists to shift anticompetitive behavior to the aftermarket to evade scrutiny, effectively stripping vulnerable consumers—such as the surgery patients who are the ultimate customers here—of any antitrust protections.
The brief was written by Kathleen Bradish, AAI’s Vice President and Director of Legal Advocacy, with assistance from AAI President Randy Stutz.
Read the full brief: AAI Amicus Brief in Surgical Instrument Service Co., Inc. v. Intuitive Surgical, Inc.
