OAKLAND, Calif.—A federal judge in California ruled April 4 that Fresenius must stop making, using or selling its 2008K hemodialysis machine in addition to paying damages for infringing on Baxter's patents.
Judge Saundra Armstrong, of the U.S. District Court for the Northern District of California, said in her opinion that the decision against Fresenius will be effective Jan. 1, 2009. The judge also imposed a 10 percent royalty on each infringing machine Fresenius sold from Nov. 7, 2007, onward. In addition, Judge Armstrong set a 7 percent royalty on all disposable products used with the 2008K machines.
The patent fight centers around the user interface software for the 2008K's touch screen display. Baxter claims Fresenius infringed on its technology, whereas Fresenius argues Baxter's patents are invalid.
In Feb. 2007, Judge Armstrong upheld Baxter's patent validity claims saying Fresenius didn't provide enough evidence to prove invalidity. And in the latest opinion, Judge Armstrong said that much of the hardship Fresenius will face from the decision is because the company didn't design around the patents in question. "It is Fresenius's burden, and not Baxter's, to taste the bitter fruit of its own inaction," she wrote.
The ruling could cause quite a change in the renal community as a large majority of American clinics use the Fresenius 2008K dialysis machine. In a news release, Baxter's legal team said Fresenius' 2008K machine has a 90 percent market share in the United States. According to its 2007 annual report, Fresenius said their market share of dialyzers and machines in the independent market exceeded 70 percent. In addition, sales of the 2008K machine grew more than 14 percent last year, and more than 15,000 have been sold in the United States.
Fresenius, however, said it will appeal the ruling and will develop a back-up design while the legal process continues so it can continue to sell the 2008K machine in 2009. The dialysis provider said it expects no major impact on its dialysis machine business. In the appeal, Fresenius is looking to reinstate a July 2006 jury decision that patent claims against its touch-screen interfaces for dialysis machines were found to be invalid. Fresenius also notes the fact that the U.S. Patent and Trademark Office rejected claims that the Baxter patents are invalid, which the company believes will bolster its chances to appeal.