Sounds of Discord

In many respects, the cochlear implant industry has served as a model for the entire neurotech industry. The devices address a neurological disorder that has not been met with other therapies, including drugs, and hundreds of thousands of deaf individuals have had at least partial hearing restored. There is robust competition in the industry, with at least three major players vying for share worldwide. The industry has undergone steady technological advancement, with continuing progress in electrode design, sound processing, and aesthetics. And, as we report on page 1 of this issue, there is now a realistic possibility of devising a fully implantable cochlear implant that would take advantage of continuing miniaturization of sound processing chips as well as the middle ear’s capacity to serve as a natural microphone.

That being said, however, there are signs that all is not well in the cochlear implant industry. Earlier this year, a trial in U.S. District Court found that Cochlear Ltd., the Australian market leader, had willfully infringed on patents held by the Alfred Mann Foundation. The jury awarded damages of $131 million in the case. Although Cochlear will almost certainly appeal the decision, the company has already written down $15 million in its financial report for the first half of fiscal year 2014. The case was filed in 2007 and stems from the Mann Foundation’s early work on cochlear implants. After failed licensing discussions with Cochlear Ltd. in 1992, the foundation formed Advanced Bionics to manufacture cochlear implants, and exclusively licensed its patents to Advanced Bionics. Mann sold Advanced Bionics first to Boston Scientific in 2004, and then to European firm Sonova in 2009, after buying back the cochlear implant portion of Advanced Bionics from Boston Scientific in 2007.

This was not the first area of contention between the Australian and California neurotech competitors. In 2002, when Advanced Bionics faced a recall caused by a meningitis scare, Cochlear went on the offensive, pointing out to the media the inherent vulnerability of the Advanced Bionics device and a positioner used in the implantation procedure.

The discord between the two contingents may well resurface in the emerging retinal implant market. Second Sight Medical Products, another of Mann’s companies, expects to be competing down the road with a commercial device emerging from Bionic Vision Australia, a consortium of research institutions that has received funding from the Australian government.

Intense competition and litigation are commonplace in many industries and no one should expect the neurotechnology business to be any different. We only hope that when it comes to patient safety, vendors will seek ways to work together, rather than tear their competitors apart.

James Cavuoto

Editor and Publisher

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