The world of robotic surgery sure is getting ugly, isn't it?
Soft tissue specialist Intuitive Surgical (NASDAQ:ISRG), for instance, has fallen more than 17% over the past month after the fallout of multiple negative industry reports, as well as a recent FDA inquiry into its procedure safety and surgeon training. Of course, few are convinced that this particular case presents any real trouble for Intuitive, but that's likely little solace for worried shareholders who have had to endure the pullback.
Then, just last month, Intuitive's orthopedic cousin MAKO Surgical (UNKNOWN:MAKO.DL) filed a lawsuit against one of its former sales managers, as well as his new employer -- which just so happens to be MAKO competitor Blue Belt Technologies. And yes, as you might recall, that's the same company that fellow Fool Dan Carroll pointed out recently received FDA approval to perform partial knee replacements using its unique NavioPFS system. According to the suit, MAKO is allegin that its former employee not only violated his non-compete agreement but also provided stolen client data and trade secrets to his new employer.
The sincerest form of flattery...
Now, MAKO just announced in a press release that it has filed complaints against U.K.-based Stanmore Implants, claiming that the company has violated three patents related to MAKO's computerized orthopedic surgical devices and software. Interestingly, just last month Stanmore received its own 510(k) clearance from the FDA to market its Sculptor Robotic Guidance Arm for partial knee resurfacing, and the company had intended to release the system to a select group a surgeons around the middle of this year.
The most ironic thing about Stanmore being given the go-ahead by the FDA, however, is that MAKO's RIO platform actually helped pave the way for its approval. Sure enough, just weeks before the FDA's final decision, the agency noted (link opens PDF) that the Sculptor RGA was shown to be "substantially equivalent" to the previously cleared device from MAKO "with respect to its intended use, indications for use, technological characteristics, and performance characteristics."
What's more, at first glance Stanmore's Sculptor RGA does look awfully similar to MAKO's RIO System:
In addition, here's how Stanmore's website describes its own platform:
The Sculptor RGA is a unique bone sculpting solution based on Stanmore's patent protected 'Active Constraint' technology. Dynamic 'Active Constraints' confine a bone cutting tool to a defined volume in space by integrated hardware and software. This 'safe area' in which the cutting tool operates is defined by the surgeon prior to the operation using Stanmore's proprietary planning software.
I don't know about you, but I'm fairly sure many folks would be none the wiser if someone were to simply replace the word "Stanmore" with "MAKO" in that description. And considering that Stanmore claims its technology was used in clinical studies as early as 2004 -- the same year MAKO Surgical was founded -- I'm amazed we haven't seen more significant public clashes between the two companies to date.
Of course, I'm no patent lawyer, and it'll surely take a lot more to prove MAKO's patents have indeed been violated, especially since Stanmore claims its technology is also "patent protected." As a result, MAKO investors will want to keep a close watch on what the powers that be have to say about the validity of this complaint.
Is it worth it?
With that said, even if MAKO is unsuccessful in defending its intellectual turf against Blue Belt and Stanmore, I can't help but wonder whether it would even matter in the end.
After all, MAKO received FDA clearance for its RESTORIS UniCompartmental Knee System in 2008, and more than 10,000 orthopedic procedures were performed using the RIO platform last year alone. With that kind of head start, unless MAKO finds itself unable to reach profitability on its own, or is instead completely shut down by a stunningly efficient up-and-coming rival, how could any other substantially similar robotic surgery system truly compete?
If Blue Belt, for one, can manage to overcome MAKO's legal challenges, I still think its Navio FPS system likely poses the greatest threat to MAKO, most notably given its open-source nature, which in theory would allow surgeons to use any implant they wish. That is, of course, assuming enough surgeons are unsatisfied with the high-tech, innovative implants provided to MAKO through its partnership with Pipeline Orthopedics.
Foolish final thoughts
When all is said and done, my money is still on MAKO Surgical as it fights these battles from a position of strength. In the end, while good old-fashioned competition is certainly healthy, you can't blame MAKO for wanting to make sure its rivals play by the rules.
Fool contributor Steve Symington owns shares of MAKO Surgical . The Motley Fool recommends Intuitive Surgical and MAKO Surgical . The Motley Fool owns shares of Intuitive Surgical. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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