ResMed settles with 3B Medical

Company believes it has ‘larger case’ with F&P
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Friday, February 3, 2017

SAN DIEGO – ResMed recognized an expense of $8.5 million in its second quarter fiscal year financial results, part of a global settlement of all litigation between the company and BMC and its U.S. distributor 3B Medical.

ResMed and 3B Medical announced a five-year settlement on Jan. 21 that involves ResMed making a one-time payment to 3B Medical to close ongoing litigation between the two companies in Florida.

“Obviously, one of the reasons you settle cases is to avoid the further ongoing expense and that was one of the reasons that motivated us to reach this settlement with BMC,” said David Pendarvis, global general counsel for ResMed, during a conference call on Jan. 23 to discuss the company’s finance results. “We’re very pleased with it.”

The settlement also entails 3B Medical being able to sell their existing products in exchange for making royalty payments to ResMed.

Pendarvis said the royalties, while not likely to be material to ResMed’s financial results going forward, are “helping to validate the strength of our intellectual property.”

Despite the settlement, ResMed expects to have “ongoing legal expenses,” Pendarvis said, due to litigation with a larger competitor, Fisher & Paykel Healthcare.

“We continue to have, frankly, a larger case against F&P,” he said.

F&P filed patent infringement proceedings against ResMed in the U.S. District Court for the Central District of California in August. It seeks judgment that ResMed’s AirSense10 and AirCurve10 range of flow generator products, its ClimateLineAir heated air tubing and its Swift LT and FX masks infringe patents that it holds.

ResMed counter-filed with actions against F&P in U.S., German and New Zealand courts, as well as the U.S. International Trade Commission, that same month. It seeks an injunction banning the import of F&P’s Simplus full-face mask, and Eson and Eson 2 nasal masks, asserting that the masks infringe on ResMed’s patents relating to modular mask systems, headgear design and cushion design.

ResMed’s settlement with 3B Medical also resolves all pending litigation before the U.S. International Trade Commission, lawsuits pending in district court in Florida and California, foreign litigation in China and Germany, and validity challenges pending in various patent offices around the world.

ResMed and 3B Medical have been volleying legal charges back and forth for years. At the crux of the battle: ResMed’s patent on its CPAP humidifier, and whether or not it was valid and whether or not 3B Medical was violating it with its own humidifier.