ResMed Up on ITC Judge's Patent Invasion Ruling - Analyst Blog


ResMed Inc .'s ( RMD ) shares rallied following an International Trade Commission (ITC) judge's ruling that Taiwanese devices maker APEX has infringed its patent. The RMD patent protects an integrated humidifier used in flow generator devices.

ResMed's shares were up as much as 2.5% in the trading session following the news release.  The stock eventually closed at $51.29 yesterday, gaining around 2.2%.

Per the ruling, the APEX XT and iCH flow generators with infringing humidifiers can now no longer be imported or sold in the U.S.

A CA-based leading medical equipment manufacturer and distributor, ResMed will also ask the ITC to inflict a fine on APEX for any infringing products that the latter has sold in the U.S. to date.

At present, ResMed manufactures hundreds of innovative therapy products including airflow generators, diagnostic products, mask systems, headgear products and ventilation devices for the treatment of sleep-disordered breathing. Per management, the innovative and diverse nature of these products accounts for the superiority of ResMed's therapy comfort over its peers.

Management at ResMed is confident that the Commission will agree with the judge's decision and will continue to impose the company's intellectual property against those who infringe it.

The original ITC action was filed by ResMed in Mar 2013. It declared patent infringement by APEX iCH and XT Fit CPAP devices.

On Aug 8, 2013, APEX abided by an order that forbid it from importing and selling infringing products in the U.S. Subsequently, APEX redesigned its products and sought a ruling that its redesigned CPAP devices had avoided ResMed's patents.

However, in the latest judgment, the ITC judge ruled in favor of ResMed holding that APEX continues to infringe and that the July 2013 order prohibits APEX from importing and selling the redesigned products in the U.S.

In a companion ruling, the judge has found that APEX's remodeled WiZard 220 mask - which APEX redesigned based on the original ITC ruling - does not infringe ResMed's patent. ResMed will appeal this decision to the Commission soon.

ResMed currently carries a Zacks Rank #3 (Hold).

Better-ranked Medical Product stocks that warrant a look include Cardica Inc. ( CRDC ), Exactech Inc. ( EXAC ) and NeuroMetrix Inc . ( NURO ). All these stocks carry a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: ITC , RMD , EXAC , NURO , CRDC

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