Litigation

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Thursday, September 30, 2004

CLEVELAND - Five months after Respironics filed a patent infringement lawsuit over Invacare’s SoftX CPAP technology, Invacare has countered with a suit of its own, charging the world’s largest manufacturer of sleep therapy products with monopolization, restraint of trade and violations of the Sherman and Clayton Acts.

The lawsuit seeks a court order to stop Respironics from product bundling, predatory price and price discrimination, as well as compensatory damages and punitive damages.

The attractive sleep therapy market is notoriously rife with lawsuits. For some, it’s no surprise that Invacare’s bold entry into the sleep therapy products market has precipitated a couple of lawsuits in short order.

“They’re going to do the same thing that Respironics and ResMed ended up doing, which is suing each other for eight million things and then they go in the corner office and work it out,” said one sleep supplier.

Last March, Respironics called on a U.S. District Court in Pennsylvania to stop Invacare from making the Polaris EX CPAP, which features SoftX, a technology that lowers a CPAP’s pressure during exhalation. Respironics began marketing a similar technology, C-Flex, about a year before Invacare introduced SoftX. In its lawsuit, Respironics claims that Invacare has violated one or more of 11 patents cited in the lawsuit.

In its Aug. 6 complaint, Invacare has cast Respironics as a monolithic force in the sleep market, owning more than 50% share of the U.S. CPAP market and a 30% to 44% share of the mask market.

“Because of its dominant position in the market for these devices, Respironics has been able to maintain prices for them at levels higher than they would in competitive markets, and to impede and exclude competition that otherwise would exist in competitive markets for the sale of CPAPs,” Invacare wrote in its complaint. “There is not now and has not been downward pressure on prices for these devices.”

Invacare also takes exception to Respironics influence in the sleep lab where, the complaint charges, Respironics sells equipment “well below its average variable costs.” By providing equipment at such low costs, Invacare says Respironics is inducing sleep labs to prescribe Respironics brand equipment.

While some suppliers say this practice is tantamount to giving away drug samples to physicians, and quite common, one sleep industry source wrote in an e-mail that this lawsuit could “potentially change the way sleep labs deal with manufacturers in a big way!”

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