3.9 Contingent assets and liabilities

Lawsuits and disputes

In October 2018, MED-EL Elektronische Geräte GmbH and MED-EL Corporation, US (together, “MED-EL”) filed a complaint against Advanced Bionics LLC (“AB”) in the US District Court for the District of Delaware for alleged patent infringement of two MED-EL patents related to ABʼs Ultra 3D product. In response, AB filed counterclaims alleging patent infringement by MED-EL of various AB patents. After years of litigation, in February 2023, the US district court granted summary judgment of non-infringement of the asserted MED-EL patents, effectively ending MED-ELʼs district court case – and any threat of damages or injunction – subject to appeal. In December 2023, Advanced Bionics won its counterclaim suit against MED-EL for two AB patents. The jury awarded AB USD 1.4 million, subject to increases for interest and the juryʼs finding of wilful infringement. In October 2024, the court issued a ruling on the post-trial motions: (1) upholding the juryʼs findings of infringement, wilful infringement, and damages; and (2) granting AB supplemental damages through patent expiration, as well as pre- and post-judgment interest. In November 2024, the Court entered a final judgment ordering MED-EL to pay AB damages in the amount of USD 2.1 million plus USD 267/day of interest. MED-EL subsequently posted a bond to stay payment of the judgment pending appeal, and filed a notice of appeal with the United States Court of Appeals for the Federal Circuit. In the beginning of April 2025, MED-EL filed its opening appeal brief, challenging various aspects of the summary judgment decision as well as the trial rulings and verdict.

In a related case brought by MED-EL in Germany, the Regional Court of Mannheim reached a first instance judgment in March 2022 which included an injunction enforced later by MED-EL. AB appealed that first instance judgement and after the European Patent Office substantially limited MED-ELʼs asserted European patent, the Higher Regional Court of Karlsruhe stopped MED-ELʼs enforcement of the injunction until its final decision. MED-EL asserted a second patent in the Higher Regional Court of Karlsruhe–and this second patent was recently narrowed by the European Patent Office to have similar scope as the first, in a decision in September 2024–and both of these patents will now proceed to a decision expected to be received in the second half 2025.

In further related proceedings in the Netherlands, ABʼs non-infringement of MED-ELʼs narrowed European patent has also been confirmed by the first instance court and is now under appeal by MED-EL. For additional national revocation and infringement proceedings related to the national part of a divisional patent of MED-EL a hearing has been conducted and the first instance decision is expected for Q2 2025. In the UK, the UK part of one of MED-ELʼs patents was invalidated by the High Court in June 2022, and this decision was upheld by the Court of Appeal in May 2023. MED-EL has since surrendered two further patents in the UK, thus abandoning the legal basis for further offensive action against AB in the UK.

In the newly formed Unified Patent Court (UPC), AB proactively filed a revocation action against a divisional patent of MED-EL in September 2023. In response, MED-EL filed an infringement action against AB based on that divisional patent. In the UPC revocation the divisional patent was upheld with amendments – this decision is currently subject of appeal proceedings. In the UPC infringement proceedings, the hearing has recently been conducted and the written decisions is expected for Q2 2025.

AB believes that the MED-EL complaints in Germany, the Netherlands and at the UPC are without merits and continues to strongly defend its position.

In August 2024, AB filed a complaint against MED-EL in the United States International Trade Commission for unlawful importation of sound processors and cochlear implant systems that infringe two Advanced Bionicsʼ patents. The investigation was instituted in September 2024 and has proceeded through fact and expert discovery. An evidentiary hearing in the investigation is scheduled for June 2025, with an Initial Determination from the Administrative Law Judge due in October 2025. For the German counterpart of one of these two Advanced Bionics patents, AB also filed a complaint against MED-EL in Germany.