3B Medical, the U.S. distributor for Chinese respiratory mask maker BMC Medical, sued arch-rival ResMed (NYSE:RMD) last week, alleging anti-trust violations by San Diego-based ResMed.
"ResMed is a monopolist in the market for sleep apnea masks and has used its monopoly position in masks to achieve market power in the flow generator market," according to the lawsuit, filed in the U.S. District Court for Middle Florida.
"Specifically, ResMed has entered and enforced exclusive or de facto exclusive contracts in which customers have been threatened with substantial price increases on masks unless they purchased all or virtually all (e.g., 90%) of their masks and flow generator needs from ResMed," the lawsuit alleges. "The effect of ResMed’s coercive practices on 3B Medical is best described by a potential 3B Medical customer asked by a 3rd-party analyst about 3B Medical’s low-cost entry: ‘We haven’t tried 3B yet. It’s hard to switch to a low-cost provider because ResMed will shut down anyone who gets near their business.’"
The lawsuit also accuses ResMed of interfering with 3B Medical’s existing and potential customers "by using its sales force to make false and disparaging statements.”
“For example, ResMed told customers that 3B Medical’s flow generators had been, or would be, barred from importation, that 3B Medical would not stay in business as a result of expensive patent litigation (which cost more than $5 million to defend), and, thus, that 3B Medical would not remain in the market to service their flow generators or fulfill the products’ two-year warranty," according to the lawsuit.
"This action is intended to restore competition, increase patient choice, and lower product pricing for sleep disordered breathing products," 3B attorney Daniel Kotchen said in prepared remarks. "We look forward to an opportunity to present the existence and effect of ResMed’s sales practices to a jury."
ResMed general counsel David Pendarvis told MassDevice.com via email that there’s "no substance" to the allegations.
"ResMed conducts business in an ethical and lawful manner. Physicians, customers, and patients prefer our products because they are better. We expect to win this case if it is brought to trial," Pendarvis wrote. "We recently filed – and won – a case for patent infringement against 3B and its Chinese-based manufacturer, BMC Medical Co. The International Trade Commission agreed with us and found that BMC and 3B had infringed ResMed’s mask patents. In their complaint, 3B concedes they have had very limited success in the marketplace."
Last December BMC claimed a win in a related proceeding in Germany. Last August ResMed and BMC each declared victory after the International Trade Commission issued a mixed decision, ruling that 9 of BMC’s products each violated at least 1 of ResMed’s patents and that certain of ResMed’s patents were invalid.
ResMed in June 2013 filed a lawsuit against BMC and 3B for alleged infringement of patents pertaining to CPAP devices, a nasal mask and a nasal pillow interface.
ResMed is also entrenched in a long-running battle with another rival, APEX Medical, which took a hit in August when the ITC ruled that the company must prove that its products don’t infringe on ResMed’s patents.
