By Nathan Proctor
In an expansive 90-page ruling, a judge in Illinois ruled that a Right to Repair case against John Deere could move to trial, denying Deere’s motion to dismiss. This case will no doubt be closely watched in the medical device industry.
“These allegations are not mere legal conclusions,” wrote Judge Iain D. Johnston. “The complaint is chock-full of factual allegations to support this conclusion.”
The core argument made by the plaintiffs in this case, a group of farmers from across the country, is that John Deere uses the technology in Deere equipment to force farmers to purchase service exclusively from Deere-connected dealerships for certain repairs.
This is known as “tying.” Here’s an explanation of tying, posted on the Department of Justice website:
“Tying occurs when a firm sells a particular item (the tying good) only together with some other item (the tied good). In the United States, tying by a firm with market power in the tying good can be a per se violation of the antitrust laws.”
Sounds familiar to how health delivery organizations are pushed to purchase manufacturer service contracts to use their medical devices, doesn’t it? In fact, most Right to Repair issues resemble a form of tying: using a variety of technological and market mechanisms to prevent competition on repair, or force customers to buy services.
One of the big hurdles faced by bringing a tying claim is that to make such a claim, the firm in question must possess “market power.” Manufacturers claim that customers could simply buy another product, they have many choices in the market – that they don’t have market power needed to satisfy a tying claim.
Sometimes, the manufacturer’s market power is pretty convincing. This is the case in the recent jury decision against Google in their case against Epic, the maker of the mobile game “Fortnite.” That case centered around the fees Google charges for all purchases of apps or within apps downloaded in its mobile app store. That app store is the source of nearly all app downloads and purchases on those devices. This factor was important in the jury finding against Google.
However, there is another element which can satisfy the criteria for market power, outlined in a Supreme Court case “Eastman Kodak Co. v. Image Technical Services.” The relevant market in that case was not determined to be the new equipment market, but rather the specific market for repair and service of Kodak equipment. This is the precedent the judge in the John Deere case referenced:
“Because Plaintiffs’ case is based on a single brand aftermarket repair claim, the Court must start its analysis with Eastman Kodak Co. v. Image Tech. Servs. … In that case, Kodak sold photocopiers as well as service and replacement parts for its equipment. Photocopiers are expensive, large pieces of equipment, resulting in substantial up-front costs. In addition to Kodak, independent service organizations (ISO) also repaired Kodak copiers. The ISO also sold parts and reconditioned and sold used Kodak copiers. The ISO’s repair services were cheaper than Kodak’s and sometimes were better quality … After a few years, Kodak implemented a policy by which it would only sell replacement parts ‘to buyers of Kodak equipment who use Kodak service or repair their own machines.’ ”
The judge felt that the plaintiff’s case against Deere was close enough to these sets of facts to use this as a relevant precedent – while also noting that Deere has more market share of the primary market than did Kodak.
Reading this list of factors … it is hard not to see echoes of what biomeds go through with restrictions on access parts, service keys, documentation or training from manufacturers of medical devices.
Tying, despite the law against it, is pretty common in our current economy. Courts seemed to be hesitant to consider antitrust arguments, but in light of the high-profile cases I mention, some of those hesitancies will go away. What does this mean for biomeds?
First, I hope these cases convince manufacturers to work more collaboratively with their customers and ISOs around repair of their products. As the FDA noted in its landmark report on medical device servicing, we need the manufacturers, ISOs and in-house biomeds to keep equipment running.
Secondly, I believe we need to carefully document the technological measures used to prevent repairs. One of the reasons the judge in the Deere case decided to move forward is that the plaintiffs have detailed technical descriptions of how repair is restricted. The details matter.
That is why I am collecting more examples of technological restrictions to repair – but I need your help. Reach out and share how you have experienced equipment that locks out repair, especially when those locks involve software. You can submit comments here: tinyurl.com/mrycahfc.
