Masimo Corp. v. Tyco Health Care Group, L.P.

MEMORANDUM *

This appeal involves antitrust challenges to three of Tyco’s business practices in the pulse oximetry market: (1) sole source agreements, (2) market share discounts, and (3) bundled discounts. Masimo appeals the district court’s decision to vacate the jury’s liability verdict insofar as it related to Tyco’s bundling agreements. Alternatively, Masimo argues it is entitled to a new trial to prove Tyco’s bundling practices fail the discount attribution test established by this court in Cascade Health Solutions v. PeaceHealth, 515 F.3d 883 (9th Cir.2008). Masimo also appeals the district court’s decision to limit damages to pre-July 2001 and its decision to deny Masimo’s motion for a permanent injunction. Tyco crossappeals, arguing it is entitled to JMOL on all claims. Tyco also appeals the district court’s decision granting Masimo damages for lost sensors after July 2001. We have jurisdiction pursuant to 28 U.S.C. § 1291 , and we affirm.

First, the district court did not err in vacating the jury’s verdict regarding Tyco’s bundling agreements under § 2 of the Sherman Act. The Supreme Court’s reasoning in Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209…

concurring in part and concurring in the judgment.

I concur in the result, and with the majority’s reasoning except for the way in which the majority affirms the district court’s grant of judgment as a matter of law (“JMOL”) to Tyco on Masimo’s bundling claim.

I agree that bundled discounts are not per se illegal so long as, after applying the discount-attribution test, the discounted price is above cost. Cascade Health Solutions v. PeaceHealth, 502 F.3d 895 (9th Cir.2007), amended 515 F.3d 883 (9th Cir.2008). I also think that Tyco’s “bundled discounts” were multi-product market- *99 share discounts, because a condition of obtaining such “bundled discounts” was that Tyco’s customers had to purchase 90-95% of their requirements of those products from Tyco. Therefore, this is a case where the PeaceHealth standard should not apply because we stated in that ease that the test would be inappropriate “outside the bundled pricing context, for example in tying or exclusive dealing cases.” Id. at 916 n. 27.

I would conclude, however, that we must nonetheless affirm the district court’s grant of JMOL to Tyco on Masimo’s claim Tyco’s bundling contracts amounted to exclusive dealing…