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Synergetics USA, Inc. v. Alcon Laboratories

June 4, 2009


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


Defendants Alcon Laboratories, Inc. and Alcon, Inc. (collectively, "Alcon") move to dismiss plaintiff Synergetics USA, Inc.'s ("Synergetics") second amended complaint ("SAC") under Rule 12(b)(6), Fed.R.Civ.P. For the following reasons, the motion is granted in part.


Much of the relevant background is provided in this Court's Opinion and Order of February 23, 2009, Synergetics USA, Inc. v. Alcon Laboratories, Inc., 2009 WL 435299 (S.D.N.Y. Feb. 23, 2009) ("February Opinion"), familiarity with which is assumed. Only the facts necessary to a resolution of the pending motion are described here.

Both Synergetics and Alcon make instruments and accessories used in vitreoretinal surgery, which is surgery on the inside of the eye. Alcon makes a vitrectomy machine used in this surgery that requires a new Alcon disposable cassette to be inserted for each operation. Alcon supplies 85% of the vitrectomy machines used by American vitreoretinal surgeons. Alcon and Synergetics compete in providing light sources and light pipes that deliver the light to the inside of the eye for vitreoretinal surgery. Alcon sells its instruments and accessories alone and in packages. Its packages include: a Total Plus pack, which contains all instruments and accessories a surgeon needs for vitreoretinal surgery, including a cassette and a light pipe; an AccuPak, which contains either primarily a cassette or a cassette plus a surgical probe; and a "Small Parts" Kit, which includes accessories for surgery but neither a cassette nor light pipe.

Synergetics claims that Alcon has tied the sale of its cassettes to the sale of its light pipes in two ways. First, Synergetics alleges that Alcon has refused to sell its cassettes without its light pipes. Synergetics identifies two customers who were allegedly told by Alcon that they could not purchase a cassette without a light pipe. Synergetics also identifies over thirty customers whom Alcon allegedly told "could not buy a vitreoretinal surgical pack without a light pipe in some or all of the gauges needed for vitreoretinal surgery."

Second, Synergetics claims that Alcon ties cassettes and light pipes together by using a pricing scheme that makes purchasing them together the only economically viable option. Synergetics alleges that Alcon's Total Plus pack costs $500, its light pipe costs $112, an AccuPak that includes a vitrectomy probe costs $400, an Alcon "Small Parts" Kit costs $110, and a Synergetics light pipe costs $73. Synergetics does not plead a price for the cassette-only AccuPak.

Synergetics also alleges that Alcon engaged in predatory pricing of both its light source (named the "Xenon") and its light pipes. The SAC alleges that Alcon sells its light pipes below cost, based on the assertion that an AccuPak and "Small Parts" Kit together cost more than a Total Plus pack, which includes all of the components of the AccuPak and "Small Parts" Kit plus a light pipe. Synergetics also names ten customers to whom Alcon has given the Xenon for free. By increasing the price of other products, according to Synergetics, Alcon is able to recoup losses it would otherwise suffer from giving away the Xenon. Synergetics alleges that sales of its own light source (named the "Photon") have declined since 2006 because of Alcon's strategy,*fn1 and that if Alcon succeeds in driving Synergetics out of the stand-alone light source market, it will be free to charge monopoly prices.

Synergetics filed this action on April 16, 2008, and filed its first amended complaint ("FAC") on August 22. Alcon's October 14 motion to dismiss the FAC was granted in the February Opinion. On March 27, 2009, Alcon filed this motion, which became fully submitted on May 1.


"Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a 'short and plain statement of the claim showing that the pleader is entitled to relief.'" Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (citation omitted). This rule "does not require 'detailed factual allegations,'" id. (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)), but "[a] pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.'" Id. (quoting Twombly, 550 U.S. at 555); see also Achtman v. Kirby, McInerney & Squire, LLP, 464 F.3d 328, 337 (2d Cir. 2006). "Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Iqbal, 129 S.Ct. at 1949 (quoting Twombly, 555 U.S. at 557).

A court considering a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) must "accept as true all factual statements alleged in the complaint and draw all reasonable inferences in favor of the non-moving party." Vietnam Ass'n for Victims of Agent Orange v. Dow Chemical Co., 517 F.3d 104 (2d Cir. 2008) (citation omitted). To survive such a motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 129 S.Ct. at 1949 (quoting Twombly, 555 U.S. at 570). This "plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (citation omitted).

The Supreme Court in Iqbal summarized the "[t]wo working principles that underlie" Twombly: "First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Id. "Second, only a complaint that states a plausible claim for relief survives a motion to dismiss." Id. at 1950. Applying this second principle "will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. Thus, the Supreme Court set out a "two-pronged" approach for courts deciding a motion to dismiss:

[A] court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. . . . When there are well-pleaded factual allegations, a court should assume their veracity and then ...

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