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Allied Orthopedic Appliances, Inc. v. Tyco Healthcare Group LP

United States Court of Appeals for the Ninth Circuit
592 F.3d 991 (2010)


Tyco Healthcare Group LP (Tyco) (defendant) was a monopolist manufacturer of a pulse-oximetry system that used sensors attached to a monitor and a patient’s body to examine the patient’s blood-oxygenation level. Tyco had a patent on its sensors. Upon expiration of the patent, competitors began manufacturing generic sensors that were compatible with Tyco’s monitors. Tyco patented a new pulse-oximetry system that moved calibration coefficients from the monitors to the sensors. Placing the calibration coefficients in the sensors facilitated sensor innovation because once there was a customer base with the new monitors, Tyco could continually introduce new sensors into the market without forcing customers to buy replacement monitors each time. Tyco’s new monitors, however, were incompatible with competitors’ generic sensors. Tyco discontinued its older system. A group of hospitals and healthcare providers (plaintiffs) brought an antitrust suit based on § 2 of the Sherman Act. The district court granted Tyco’s motion for summary judgment. The plaintiffs appealed.

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