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Synergetics USA, Inc. v. Alcon Laboratories

February 23, 2009


The opinion of the court was delivered by: Denise Cote, District Judge

Plaintiff Synergetics USA, Inc. ("Synergetics"), a Delaware corporation that designs, manufactures, and markets products for surgical procedures, brings this antitrust action against defendants Alcon Laboratories, Inc. and Alcon, Inc. (collectively, "Alcon") for tying products in violation of Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 & 2, and Section 3 of the Clayton Act, 15 U.S.C. § 14, and engaging in predatory pricing in violation of 15 U.S.C. § 13a. Alcon now moves for judgment on the pleadings under Rules 12(b)(1) and 12(b)(6), Fed.R.Civ.P. For the reasons discussed below, the motion is granted.


The following facts are drawn from the amended complaint and assumed to be true for the purposes of deciding the motion to dismiss. Alcon makes instruments and accessories used in vitreoretinal surgery, a type of eye surgery in which the surgeon removes the vitreous (the gel-like substance in the eye) and operates on the inside of the eye. Approximately 85% of American vitreoretinal surgeons use Alcon's vitrectomy machine (or "VIT machine"), known as the Accurus. This expensive machine, which has a retail price of about $75,000, requires a disposable cassette that is inserted into the Accurus to collect vitreous material. Alcon makes and has patented the only cassettes that can be used with the Accurus.

Alcon and Synergetics compete in providing light sources and delivery systems for this surgery. Both companies make a stand-alone light source to illuminate the inside of the eye during surgery, and light pipes used to deliver light from the light source into the eye. Each company's light pipes work only with the light source sold by that same company.

Alcon sells its instruments and accessories in three separate packages. It sells an AccuPak, "which consists of either just a cassette with tubing or a cassette with tubing plus a surgical probe." It also sells a Total Plus pack, which is a "prepackaged . . . single-vitreoretinal surgery kit[]." The Total Plus pack sells for $400 and "includes an Alcon light pipe whether the doctor or hospital wants one or not." A Total Plus pack "without an Alcon light pipe can be obtained from Alcon, if at all, only at a price equal to or greater than the price of the Total Plus pack containing the light pipe." A Custom-Pak "consists of the standard Total Plus kit and additional items selected by the doctor or hospital." The Custom-Pak may be customized for the doctor or hospital, but the Total Plus portion of the Custom-Pak may not be customized.

Synergetics claims that Alcon ties the sale of its cassettes to the sale of its light pipes and thereby locks doctors into buying Alcon's light sources as well.*fn1 Synergetics makes four different allegations to support this claim. First, while the amended complaint acknowledges that Alcon manufactures and sells its cassette without any light pipe, in an AccuPak, it propounds a failure-to-market theory. It asserts that Alcon has "not marketed" this product to vitreoretinal surgeons and "tries to conceal their very existence from purchasers of vitreoretinal surgical instruments."

Second, Synergetics alleges that Alcon has refused to sell its Total Plus pack without a light pipe: "Vitreoretinal surgeons who have asked for a Total Plus without the Alcon light pipe have been told . . . that the Total Plus is not available without the light pipe." Third, Synergetics also alleges, more broadly, that Alcon has "outright deni[ed the] separate availability of the disposable cassette and the light pipe" and has "refus[ed] entirely . . . to sell its disposable cassette to vitreoretinal product purchasers unless the purchase also includes a certain amount of Alcon instruments and accessories, including . . . the Alcon light pipe."

Fourth, Synergetics claims Alcon has coerced customers to purchase Alcon light pipes and cassettes together by using a pricing scheme that makes purchasing these products together the only economically viable option. Alcon has allegedly "priced its cassette when purchased without a light pipe substantially higher than the price charged when the cassette is bundled with the light pipe."

In a similar vein, Synergetics claims that Alcon has engaged in predatory pricing of its light sources and light pipes. Synergetics asserts that Alcon sells its light sources for "free" or at "unreasonably low prices" and its light pipes for "free or at negative cost." By providing these products below cost, Alcon threatens to drive Synergetics out of the market. If it succeeds, Alcon will be able to charge monopoly prices for these products.

Synergetics filed this action on April 16, 2008. In its original complaint, Synergetics asserted that the Accurus cassette and light pipe could only be purchased together. As shown above, that allegation was omitted from its amended complaint filed on August 22. On October 14, Alcon moved to dismiss the amended complaint. In its opposition brief, Synergetics abandons its failure-to-market theory. On November 13, Synergetics moved to strike evidence Alcon had submitted with its motion to dismiss for the purpose of demonstrating that Alcon had sold many AccuPaks in the United States in the years prior to the filing of Synergetics's amended complaint.


A trial court considering a Rule 12(b)(6) motion must "accept as true all factual statements alleged in the complaint and draw all reasonable inferences in favor of the non-moving party." McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir. 2007). At the same time, "conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to defeat a motion to dismiss." Achtman v. Kirby, McInerney & Squire, LLP, 464 F.3d 328, 337 (2d Cir. 2006) (citation omitted).

Under the pleading standard set forth in Rule 8(a)(2), complaints must include a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). "[A] plaintiff is required only to give a defendant fair notice of what the claim is and the grounds upon which it rests." Leibowitz v. Cornell Univ., 445 F.3d 586, 591 (2d Cir. 2006). Rule 8 is fashioned in the interest of fair and reasonable notice, not technicality, and therefore is "not meant to impose a great burden upon a plaintiff." Dura Pharms., Inc. v. Broudo, 544 U.S. 336, 347 (2005).

A court considering a Rule 12(b)(6) motion applies a "flexible plausibility standard, which obliges a pleader to amplify a claim with some factual allegations in those contexts where such amplification is needed to render the claim plausible." Boykin v. KeyCorp, 521 F.3d 202, 213 (2d Cir. 2008) (citation omitted). "To survive dismissal, the plaintiff must provide the grounds upon which his claim rests through factual allegations sufficient to raise a ...

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