Danish Showdown: The Shot Heard Round the World?

Big Drama engulfs the Big 6 lately as top US management of hearing aid companies are forced out, either falling on their swords or doing the walk of shame for apparent lapses in corporate accountability  The dramas are cliffhangers, a plot ploy to keep us on the edge of our seats, excitedly waiting for a grand finale that resolves all the unknowns.  Somebody should write a play.

“Make ’em cry, make ’em laugh, make ’em wait – exactly in that order.” (Wilkie Collins, 19th century author)

Cliffhangers in the corner office are exciting, titillating, sometimes tragic, but life goes on.  The real Big 6 drama is a slow, fight-to-the-death extravaganza currently playing in US and Danish courtrooms, starring two Danish hearing aid manufacturers in a total patent war.  Last month, David Capithorne’s excellent post at Hearing Mojo sounded the alarm:

This is one patent war worth watching as ReSound and Oticon go to the mat over ownership of wireless technologies that will likely form the core of future hearing aid devices. (paraphrased from Hearing Mojo post)

As Shakespeare said, the play’s the thing.  In sneak previews in Denmark, court records and media are hailing it  “an extraordinarily big case,”  a “global legal showdown” of hearing aid giants.

Synopsis

 

In litigation filed first in Denmark and now in the US, Oticon claims that some GN ReSound products using wireless technologies (e.g., antennae technology), are infringing on two Oticon patents.  Devices in question run the gamut, including LinX.  Oticon wants its patents protected and has filed for injunction to block GN from putting products that use them on the market.

GN estimates an injunction in Denmark alone would hurt them to the tune of 100M (DKK) in market loss.   One Danish court verdict decided the patent was valid, that GN had infringed,  but ruled against Oticon’s request for injunction.  Further, it slapped Oticon with 3M (DKK) in costs and damages, payable to GN.  Both sides claimed limited victory in the long view of a protracted legal war:

  •  Oticon saw it as a sequential step in which the judgement gave them a 2 out of 3 win:  They lost the injunction request but gained important rulings that their patent was protected, valid and violated by GN.
  • GN’s CEO, Anders Hedegaard, took a narrower view: the case wasn’t in a patent court, so GN is not in patent violation.  By rejecting the injunction request, the court awarded total victory to GN.

“We firmly believe that we are not violating the patent and the Maritime and Commercial High Court is not a patent court.”

GN argues that Oticon’s position is too little, too late:

  •  Oticon didn’t object when GN came out with a commercial product with antenna technology in 2011.
  • Oticon didn’t make a commercial product, regardless of its patent.
  • Oticon’s didn’t decide to try to enforce its rights until after GN launched its LinX product line,  which also contains antenna technology.

Consequently, GN’s position is one of  first-come-first-serve:

“the case therefore concerned whether Oticon was in fact trying to eliminate the first mover advantage obtained by GN ReSound having launched its iPhone compatible products before Oticon”

On August 14, the Danish High Court upheld the patent validity and infringement judgements but reversed the lower court’s injunction decision,thereby blocking GN from selling the products in question, at least in the interim. It also awarded 4M (DKK) to Oticon.

Oticon’s next move is to sue GN for damages pursuant to patent infringement and not just in Denmark.  To which GN’s counter is to minimize, trivialize, and bring its own lawsuit in a different court system{{1}}[[1]]Not discussed in this post, but interested readers can read about GN Resound vs Oticon A/S, before the US Patent Trial and Appeal Board, Case IPR2015-00103 regarding patent 8300863.[[1]] In the words of their CEO:

Oticon is “sort of wasting our time with this [technology that’s] back from the 40s.”

It’s a cliffhanger.

Stages Set, Curtains Rising:  Here’s a Programme, Take a Seat

 

Cast of Characters

 


WhoWhatWhere
Oticon A/SDanish corporationKongebakken 9, DK-2765 Smorum, Denmark
Oticon, Inc.US corporation (organized under California laws)580 Howard Ave, Somerset, NJ 08873
GN ReSound A/SDanish corporationLautrupbjerg 7, DK-2750 Ballerup, Denmark
GN Hearing Care CorporationUS corporation (organized under California laws)8001 E. Bloomington Fwy, Bloomington, Minnesota 55420

Elements of Conflict

 

WHENWHOWHAT  WHICH IS
12/27/2007 (effective date)Oticon A/SDK patent Utility Model{{2}}[[2]]In Denmark, an exclusive right to a creation may be obtained through the filing of a utility model application with the Danish Patent and Trademark Office. The exclusive right applies from the date of filing of a utility model application with the Danish Patent and Trademark Office. The exclusive right applies from the date of filing the utility model application onwards for up to 10 years. To obtain a utility model for a creation, the creation must: 1) Be new (global novelty), 2) Differ distinctly from the prior art, 3) Be industrially applicable.  paraphrased from iprights.  [[2]] DK 201300096Hearing aid for a wireless receiving and/or sending data
7/01/2009Oticon A/S DK/EP patent awarded #2076065 Hearing and method for the wireless receipt and/or transmission of data
10/30/2012Oticon A/SUS patent awarded #8300863Hearing device and method for a wireless receiving and/or sending  of data

 

 The Danish Play

Stagecraft

 

The Danish Court System
The Danish Court System

Act I, Scenes 1 and 2

 

WhenWhoRegardingWhereDecision
week of 1/05/15Oticon

v

GN Resound

Patent infringement

Application for interim relief

(DK utility model 201300096 & DK/EP patent 2076065)

 Maritime and Commercial  Court Interim relief request denied (“incompatible with the basic tenet of proportionality”)
6/30/15Oticon

v

GN Resound

Patent infringement

Request for preliminary injunction

 Maritime and Commercial High Court1) patents are valid

2) GN infringed

3)   preliminary injunction refused{{3}}[[3]]”the conditions for granting interim relief were not fulfilled despite the fact that Oticon had proved that its rights were valid and infringed by Resound.”[[3]]

4) 3M DKK to GN ReSound

8/14/15Oticon

v

GN Resound

Appealed denial of injunction Danish High Court{{4}}[[4]] Media reports differ on whether decision came from Eastern or Western High Court.[[4]]1.  Confirm patent validity and infringement.

2.  Decision reversed:  interim injunction in order{{5}}[[5]]Reversal based on “the presumption that Oticon would suffer a loss of rights if an interim injunction could not be granted because of the fact that Oticon was in direct competition with GN Resound in the market for hearing aids.”[[5]] on 4 GN  products.

3.   4M DKK to Oticon

 


 

The US Play — The Curtain’s Still Rising

Stagecraft

US Federal Court System
US Federal Court System

Act 1, Scene 1

 

WhenWhoRegarding WhereDecision
4/21/15Oticon A/S v

GN ReSound

Willful patent infringement US patent #8300863 and request for injunction{{6}}[[6]]at least the ReSound Linx2 LS9ITE and Linx2 LS9ITC, and all in-the-ear (“ITE”) and in-the canal (“ITC”) hearing aid devices that employ wireless radio frequency (RF) communication 4 technology materially similar to that employed in these devices.”[[6]]US District Court District of Minnesotapending
6/25/15Oticon A/S v

GN ReSound

Willful patent infringement, US patent #8995699US District Court District of Minnesotapending

 

 

About Holly Hosford-Dunn

Holly Hosford-Dunn, PhD, graduated with a BA and MA in Communication Disorders from New Mexico State, completed a PhD in Hearing Sciences at Stanford, and did post-docs at Max Planck Institute (Germany) and Eaton-Peabody Auditory Physiology Lab (Boston). Post-education, she directed the Stanford University Audiology Clinic; developed multi-office private practices in Arizona; authored/edited numerous text books, chapters, journals, and articles; and taught Marketing, Practice Management, Hearing Science, Auditory Electrophysiology, and Amplification in a variety of academic settings.

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