The foundation, named for one of the inventors of cochlear implant technology, sued Australia-based Cochlear in 2007, alleging infringement of a pair of patents covering the hearing implant technology. The foundation licensed the patents to Advanced Bionics.
In January 2014, a jury in the U.S. District Court for Central California found that Cochlear infringed both patents and awarded $131.2 million in damages. Because the jury also found that the infringement was willful, Cochlear could have been on the hook for treble damages if Judge Fernando Olguin agreed.
Olguin in April 2015 vacated the damages award, ordered a new damages proceeding and invalidated three of four claims in the two patents, ruling that they failed to disclose key elements. Both parties appealed to the U.S. Court of Appeals, which also reversed the invalidity judgment for one of the patent claims and remanded the case for consideration on the damages issue and the willfulness infringement of two claims for the remaining patent.
In November 2016, a federal appeals court overturned a win for Cochlear over the technology, sending the case back to district court for reconsideration in light of the U.S. Supreme Court decision in Halo v. Pulse/Stryker v. Zimmer. That decision relaxed the standard for enhanced damages awards in patent infringement cases.
Olguin issued a decision this week denying Cochlear’s motion pleading no infringement of one of the patents, saying the company had waived its non-infringement argument by not raising it on appeal. The judge reinstated the original award and doubled it.
Cochlear plans to appeal the judgment and expects the case to continue another two years. The company set aside about $29.2 million (A$21.3 million) in December 2013 to cover the dispute.
Cochlear maintains that because the patents have expired, a decision in the case wouldn’t disrupt its U.S. business.
“We are surprised by the decision and do not agree with the reasons given by the judge,” said Cochlear president & CEO Dig Howitt in a prepared statement. “We will continue to defend this case and the next step in the litigation process is our appeal to the U.S. Court of Appeals. The case is likely to take years to finally resolve.”
To stay the execution of the judgment pending the outcome of the appeal, Cochlear will need to lodge a $335 million insurance bond with the court within 14 days of the entry of judgment to secure the judgment amount, and any interest and costs. Cochlear said it has debt and other facilities available to cover that amount.
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