Intuitive Surgical and Computer Motion Merge to Create Concentrated Robotics Play

For many companies trying to get innovative technology accepted in the marketplace, intellectual property becomes a critical battleground. But when it becomes the primary battleground, IP litigation can divert and distort the companies from their main goal: gaining adoption for their technology. That, at least, is what happened in surgical robotics, a highly promising, but to date poorly penetrated innovation. And now, tired of fighting each other in court, the two leading robotics companies, Sunnyvale, CA-based Intuitive Surgical Inc. and Santa Barbara, CA-based Computer Motion Inc. , have decided to render their IP differences moot through a merger of the two companies [See Deal].

Discussing the deal, Lonnie Smith, Intuitive's CEO who will run the combined company, noted that "Clearly, we were both pouring a ton of time, energy, and resources into IP battles." And the continuing litigation was "a huge cash drain and not without risk for both companies," he went on. Even Intuitive felt the stress, though it had, of late, been faring better in its court battles—it won a summary judgment in a Delaware court last July over voice-control technology, which would have required Computer Motion to pay Intuitive a royalty, and more recently, the firm won a summary judgment motion in a California court. (Dismissal of the patent litigation on the part of Computer Motion is one of the conditions of the merger.) Indeed, in part because of the continuing litigation, Intuitive has been losing money and Computer Motion ran out of cash. The merger is, in some measure, recognition by executives from both companies that they needed to stop spending money on things other than product development and sales and marketing