Cochlear loses appeal over $268m in patent damages

The U.S. Court of Appeals for the Federal Circuit upheld a U.S. District Court decision that awarded $268 million in damages from Cochlear Ltd. (ASX:COH) to two competitors in a patent dispute.

Yesterday’s ruling comes after several years of legal battles over the patents for hearing implants, and likely won’t be the end, as Cochlear is reportedly seeking a full review by the Court of Appeals.

“We believe the amount of damages awarded is out of proportion with the limited application of the patented feature,” Cochlear CEO Doug Howitt said, according to the Sydney Morning Herald. “We are very disappointed with this decision, but inflated damages awards are a risk of patent disputes in the US.”

Reports also state that Cochlear plans to cover legal costs with bank loans that the company set aside in preparation for a potentially unsuccessful appeal.

In 2007, the Alfred E. Mann Foundation for Scientific Research sued Cochlear for infringing on two patents. The Mann Foundation had licensed its implants to Advanced Bionics, which soon joined in on the suit.

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.

However, in April 2015, Olguin vacated the damages award, ordered a news damages proceeding and invalidated 3 of 4 claims in the 2 patents, ruling that they failed to disclose key elements. But, in November 2016, a federal appeals court overturned Cochlear’s victory, sending the case back to district court for reconsideration in light of a recent U.S. Supreme Court decision.