Cochlear loses US patent appeal

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ASX-listed Australian hearing implant manufacturer Cochlear has lost a court case in the US over two disputed hearing aid patents.

In a ruling delivered last Thursday, the [US] Court of Appeals for the Federal Circuit ruled in favour of the Alfred E. Mann Foundation (AMF), confirming that defendants Cochlear infringed on two claims of AMF patents and remanded the matter to the Federal District Court for the Central District of California to award damages.

Additionally, the Circuit Court vacated the District Court’s Order setting aside a jury finding of willful infringement on both infringed patent claims. Finally, the Circuit Court affirmed the District Court’s Order sustaining the Cochlear Defendants’ defense of indefiniteness with respect to two claims of AMF’s US Patents.

AMF’s US patents describe a system comprised of an external wearable processor (WP) and headpiece, as well as an internal implantable cochlear stimulator (ICS). Sound is transmitted from the headpiece to the WP, which processes the transmissions before sending them to the ICS.

The ICS processes the sound to stimulate the cochlea––the organ that converts sound to nerve impulses––via implanted electrodes, thereby allowing the user to hear. The case, which has been pending since 2007, was tried before a jury in January 2014.

The jury returned a verdict of infringement and validity on all four patent claims, determining in each case the infringement was willful.

It awarded compensatory damages of approximately $US131.2 million to AMF. In April 2015 a Californian District Court Judge overturned three of four of the AMF patent claims and ruled the infringement was not willful.

This latest ruling has reversed the judgment of invalidity as to one claim in the other patent. Cochlear has reported a net profit of $US188.9 million as at 30 June this year.