F&P Healthcare's Simplus face mask is one of the products at the heart of a long-running, multi-million dollar patent infringement case with US competitor ResMed. Photo: supplied.

Fisher & Paykel Healthcare expects the cost of contesting the latest patent infringement allegations from rival ResMed will cut annual earnings by as much as $10 million. It’s the latest episode in a multi-million-dollar dispute over competing sleep apnea face masks, which has seen the two companies fighting for two years in the US, the UK, Europe, and Australasia.

The Auckland-based maker of hospital equipment and personal sleep apnea products says it will contest complaints in the US International Trade Commission (ITC) and US District Court for the Southern District of California. F&P Healthcare cut its forecast profit to $205 million-$210 million for the year ending March 31 2019, from a previous forecast of $215 million, due to the cost of defending the litigation.

“Fisher & Paykel Healthcare respects the valid intellectual property rights of others, and we are confident in our position with respect to ResMed’s patents given the rigorous clearance we conduct before any product is released to market,” managing director Lewis Gradon said. “We are well prepared to vigorously contest these claims.”

ResMed filed a petition in the ITC seeking to ban the importation and sale of F&P Healthcare’s Simplus full face mask, Eson nasal mask and Eson 2 nasal mask in the US. It separately lodged a new suit in the US district court accusing the Kiwi firm of patent infringement and seeking damages plus an injunction against future sales of the masks.

The companies have been locked in litigation since 2016, with the fight spanning the US, UK, Europe, New Zealand and Australia. F&P Healthcare spent $15.6 million on litigation in the year ended March 31, down from $20.7 million a year earlier. It had previously signalled those costs would be a similar level in the 2019 financial year.

The New York Stock Exchange-listed company withdrew a complaint to the US ITC last year, saying at the time it still planned to file a new action.

“ResMed provides millions of consumers with high-quality products, which are the direct result of substantial and sustained investments in research and development, as well as a focus on each consumer’s therapy needs,” said ResMed global general counsel and chief administrative officer David Pendarvis. “We will defend our intellectual property wherever necessary to ensure that patients worldwide continue to receive the high-quality care they deserve, and are confident that when the ITC and the district court hear all the evidence, ResMed will prevail in these cases.”

F&P Healthcare’s profit warning comes a little over a week after the company raised its full-year earnings forecast by about $5 million, as a weak New Zealand dollar increased the value of overseas sales.

F&P Healthcare shares fell to $15.55, from a close of $16.39 on Friday. They have risen 14 percent so far this year.


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