April 15 (Bloomberg) -- Intuitive Surgical Inc., a maker of surgical robots used in more than 300,000 U.S. operations last year, faces its first trial over claims it marketed the devices to doctors without providing adequate training.
A state court jury in Port Orchard, Washington, is scheduled to hear opening arguments tomorrow afternoon about whether Intuitive properly trained a physician who, in his first unassisted surgery using the company’s da Vinci surgical system, removed the prostate gland of a patient who later died.
After seven hours of robotic surgery in September 2008, complications developed and the physician, Scott Bildsten, and other doctors turned to traditional surgery and then emergency care to repair a rectal laceration. The patient, Fred Taylor, died last August of heart failure resulting from injuries caused by Intuitive’s inadequate training of Bildsten, lawyers for Taylor’s family claim.
“A jury could reasonably conclude that the mistakes he made in this robotic procedure were a result of the poor training and lack of warnings he received from Intuitive,” lawyers for the family argue in court filings.
The lawsuit is one of at least a dozen filed against Intuitive since 2011 alleging injuries tied to the robot-surgery systems. Intuitive’s robots, which cost about $1.5 million each, are used in 1,371 U.S. hospitals, the company has said. The robots and related products generated most of the company’s $2.2 billion revenue in 2012.
Intuitive has no duty to train doctors on the da Vinci system under Washington law, the company has said in its court filings.“We take legal claims seriously and trust in the legal system as the appropriate place to resolve these disputes,” Angela Wonson, a spokeswoman for the Sunnyvale, California-based company, said in an e-mailed statement.
Kitsap County Superior Court Judge Jay Roof last month rejected Intuitive’s bid to throw out the suit and scheduled the trial to conclude in May. The judge found the state’s product-liability laws require medical-device makers to properly train physicians who buy their products.
Investors are so far unconcerned with what the trial result might mean for Intuitive, said Andrew S. Zamfotis, an analyst at evaDimensions in New York. The company is “practically printing money with these robots,” and for shareholders the trial “hasn’t moved the needle yet,” he said in a phone interview.
Zamfotis said evaDimensions calculates the “economic value added,” or economic profit, of companies by evaluating a company’s assets on its balance sheets. Intuitive has a profit margin of more than 25 percent compared with 2.5 percent for other medical equipment companies, said Zamfotis, who said he has a “hold” rating on Intuitive shares and doesn’t own any.
‘Room for Surprise’
“The market does not yet seem fazed by what’s happening here,” Zamfotis said, referring to the trial, adding that “there’s always room for surprise.”
Bildsten is identified in court documents as a possible primary witness at the trial. Richard Friedman, the lawyer representing Taylor’s family, declined to comment on the case.
Bildsten, who had performed 100 successful prostatectomies using a traditional procedure, and hadn’t used the da Vinci system on a patient without being supervised, failed in Taylor’s surgery to create a watertight seal between the bladder and the urethra when the prostate was removed, inflating Taylor’s abdomen with carbon dioxide pressure which led to a stroke, according to court filings.
In robotic surgery, a doctor sits at console several feet from the patient and peers into a high-definition display. Foot pedals and hand controls maneuver mechanical arms equipped with surgical tools, guided by a 3-D camera that shows the work as it is done inside a patient.
According to court filings, Bildsten said Intuitive’s training didn’t inform him of the need to create the watertight seal or warn of the risk of abdomen inflation. After reading Food and Drug Administration documents about the “learning curve to obtain basic competency” with the da Vinci system, Bildsten said, “I believe I likely would not have agreed to begin training on the robot had I been given this information,” according to the filing.
Bildsten said Intuitive told him he could achieve “basic competency” after two assisted surgeries, and that the company did not tell him that consultants paid by Intuitive reported that such proficiency couldn’t be reached “until twenty or more operations were complete,” according to the filing. Bildsten didn’t return a call seeking comment on the trial.
Intuitive has argued in court documents that lawyers for Taylor’s family are attempting to create a “totally new cause of action” against medical device manufacturers -- the “duty to train” -- under the Washington Product Liability Law.
Under the state law, Intuitive had no duty to train Bildsten or warn him of the risk of the surgery, according to the filing.
“Dr. Bildsten, a board-certified, licensed surgeon was responsible for making sure he could perform the surgery he chose to perform and to do so safely,” Intuitive argues in the filing.
Arguing that Taylor’s death of heart disease four years after the prostate surgery wasn’t caused by the da Vinci, Intuitive argues in a court filing that Taylor’s lawyers concede that before the surgery, Taylor had been diagnosed with diabetes, coronary artery disease, hypertension and high cholesterol. His treatment had included bypass surgery in 2002.
Taylor weighed 280 pounds and had a body mass index of 39, which Bildsten said made him obese, according to the filing. Intuitive claims it told Bildsten that for his early procedures with the da Vinci -- at least the first four to six surgeries -- he should choose simple cases and patients with a low body mass index.
Intuitive also argues that Taylor’s rectal injury happened after the da Vinci was turned off, disconnected and removed from Taylor, according to the filing. Bildsten has testified that Taylor’s injury “occurred after the procedure was converted” to traditional surgery, “and was not related to the use of the da Vinci robot,” according to the filing.
Michael Matson, an analyst at Mizuho Securities USA in New York, said the case isn’t particularly meaningful for shareholders.
“What investors really care about most is if there’s going to be a change to the longer term growth profile of the company, and I don’t think this individual case by itself is going to cause that,” Matson said in a phone interview.
Much of the case “boils down to the surgeon not being adequately trained,” Matson said.
“Whether that’s Intuitive’s responsibility is another question,” he said, adding that it’s “up to the jury to determine who’s at fault.”
The case is Estate of Fred E. Taylor v. Intuitive Surgical Inc., 09-2-03136-5, Superior Court, State of Washington, Kitsap County (Port Orchard).