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ResMed and Fisher & Paykel Healthcare settle patent infringement disputes

The ResMed Inc. (ASX: RMD) share price and the Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) share price will be on watch on Thursday after the two companies announced an agreement to settle all their outstanding patent infringement disputes in all venues around the world.

According to the release, the settlement involves no payment or admission of liability by either party.

Under the agreement, all ongoing infringement proceedings will be dismissed, and each party will bear its own attorney fees and costs incurred in the global proceedings. All other terms remain confidential.

ResMed’s CEO, Mick Farrell, was pleased that these disputes were resolved.

He said: “This agreement supports the best interests of ResMed, and all of our stakeholders, including patients, providers, physicians, and shareholders. ResMed will continue to lead with innovative products, services and solutions for sleep apnea, COPD, and out-of-hospital healthcare software. We will defend our intellectual property wherever necessary to ensure that our mask, device and software customers receive the innovative solutions they deserve.”

Fisher & Paykel Healthcare’s CEO, Lewis Gradon, was equally pleased.

He said: “We are pleased to bring these disputes to a close and we appreciate the support of our customers and shareholders throughout the process.”

Before adding: “The intellectual property we have generated through our investment in R&D over the past 50 years has enabled us to positively impact the lives of many millions of patients. We have an ongoing commitment to improve patient care and outcomes through inspired and world-leading healthcare solutions and this resolution supports that commitment.”

Fisher & Paykel Healthcare also confirmed separately that this settlement will not have a material impact on its net profit after tax guidance for the 2019 financial year.

Should you invest?

I think this is a very positive development for both companies and was the right thing to do. Now they can both focus entirely on their respective businesses and developing new products.

Whilst I’m not a buyer of Fisher & Paykel Healthcare shares at current levels, I see a lot of value in ResMed’s shares right now and believe it would be a good investment along with Cochlear Limited (ASX: COH) and CSL Limited (ASX: CSL).

As well as ResMed, I think these blue chips are in the buy zone right now.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Cochlear Ltd. and ResMed Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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