Discovery time recommended in dispute between Ventracor and Heartware

An initial recommendation has been made in the patent infringement dispute between Sydney artificial heart firms Ventracor (ASX:VCR) and Heartware (ASX:HTW).

Late last year, VentrAssist, a subsidiary of Ventracor, issued a lawsuit alleging that Heartware's left-ventricular assist device (HVAD) infringed on the patents underlying Ventracor's ventricular assist device. Both devices are designed to aid the heart's ventricles in pumping blood around the body.

"The judge has said that the case can't be summarily dismissed," said Ventracor CEO Colin Sutton. "Heartware have asserted that our actions were frivolous and the suit should be dismissed on the basis of that. The judge has said essentially that it's not frivolous."

US District Court Magistrate Judge Seltzer has recommended that Ventracor be permitted a period of time to conduct discovery. The recommendation can be appealed before it is passed higher up the legal chain to US District Court Judge Marra who will then decide whether or not to follow Seltzer's recommendation.

Heartware CFO David McIntyre that taking various factors into consideration, it could still take several months before the extent of discovery is determined.

However, McIntyre stressed that the recommendation made by Seltzer had not dealt with the issue of patent infringement or the infringement exemption that Heartware believes it has open to it.

Heartware is seeking to rely on the safe-harbour exemption in section 271(e)(1) of the Patents Act (USA). This section provides that the manufacture or use of a patented invention is not an infringement so long as this manufacture or use is necessary to support an application for US Food and Drug Administration (FDA) approval prior to commercialisation.

"Ventracor has alleged we are infringing their patents. Irrespective of whether there is an infringement or not, the safe-harbour categorically makes you immune, so there is no claim," said McIntyre. "The issue of infringement now is irrelevant because we don't have an FDA approved product."

Heartware will also seek to rely on a recent decision in the US Supreme Court in the Merck v Integra case which it said has broadened the patent infringement immunity under section 271(e)(1).

"The company will continue to pursue the exemption and, given the favourable outcome in the US Supreme Court in the Merck v Integra case, is firmly of the belief that the exemption will ultimately be granted," said Heartware CEO Stuart McConchie in a statement.

"The Integra case, and the safe-harbour, is an issue," said Sutton. "But we believe they are still infringing, irrespective of that."

Ventracor names US heart transplant centres

Meanwhile, Ventracor has named the five American transplant centres that will take part in its previously announced feasibility study leading up to a full scale trial of its cardiac assist device as a bridge-to-transplant.

"The feasibility trial comrpises only 10 patients and we expect to complete recruitment of those 10 patients by the end of this year," said Sutton.

The sites in the feasibility study involving the 10 patients are Columbia University, University of Maryland, University of Minnesota, University of Pittsburgh Medical Center plus one other unnamed site.

Prof Eric Ross of Columbia University will be the principal investigator of the study and Prof Robert Kormos of the University of Pittsburgh Medical Centre will be chairman of the steering committee.