Ventracor, Heartware settle patent dispute

Artificial heart firms Ventracor (ASX:VCR) and HeartWare (ASX:HTW) have settled a year-long patent dispute.

In a joint statement to the ASX, the companies said: "Each of Ventracor, the University of Sydney as well as HeartWare have entered into covenants not to sue one another for infringement of certain patents."

Ventracor CEO Colin Sutton told Australian Biotechnology News the resolution was welcomed by the firm.

"To get it behind us in a positive way is very good," he said. "It has removed potential uncertainty around the IP for both parties. Neither party will have to pay royalties -- it has strengthened our IP position. This settles the dispute definitively and removes distractions so that we can fully commercialise our product."

HeartWare's director of corporate development, Howard Leibman, said the company was very pleased to have resolved the dispute, but added that it had not disrupted HeartWare's clinical trial progress.

"We remain on track to achieving our first human implants in the first quarter of next year," he said. "With the dispute behind us we can now focus all our efforts on achieving this critical near-term milestone. We are certain that the settlement is in the best interests of all our stakeholders."

Late last year, VentrAssist, a subsidiary of Ventracor, issued a lawsuit alleging that HeartWare's HVAD device 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 legal battle intensified in August with HeartWare filing a strong rebuttal to the patent infringement action in the US District Court for the Southern District of Florida, which "emphatically denied" patent infringement.

In addition to denying the infringement, HeartWare filed six counterclaims against Ventracor, including counterclaims seeking damages and costs based on unfair competition and violation of US antitrust laws.

But all of the companies' claims have now been dropped.

"We are approaching 40 implants globally," said Ventracor's Sutton. "As the first company with a third-generation product in US clinical trials we have plenty to do -- we are focusing on knocking over those clinical trials.

"We will be reporting significant revenues in our first-half results because in the US our implants have been reimbursed, and we also have reimbursement in Europe from our initial implants." At the beginning of November HeartWare announced the completion of animal studies in the lead-up to its first clinical trials.