Fisher & Paykel Healthcare's share price fell by 3.3 per cent this morning after the Munich Regional Court found that headgear for two of its masks used in the treatment of obstructive sleep apnea infringed a patent held by its main competitor, ResMed of the US.
F&P said the ruling would not impact on the sale or supply of the affected masks.
The court ruled that ResMed patent EP'368 was infringed by the headgear for Fisher & Paykel Healthcare's Simplus and Eson 2 masks.
The decision can be appealed to the Higher Regional Court in Munich, the company said.
F&P Healthcare had earlier appealed a decision of the European Patent Office (EPO) regarding the validity of these patent claims.
If successful, that appeal will invalidate the claims that the Munich Regional Court has found to be infringed.
"While we are disappointed with today's outcome, this decision will not impact the sale or supply of our current Simplus and Eson 2 masks to our customers in Germany," F&P Healthcare managing director and chief executive Lewis Gradon said.
"Furthermore, we continue to anticipate our earlier challenge to the validity of this patent with the EPO," he said.
F&P's share price fell by 47 cents to $13.56 while the market overall was soft.
"The market does hate this uncertainty around patent cases," Matt Goodson, managing director at Salt Funds, said.
"This is German specific but the question is whether there might be other implications for other markets or not," he said.
The company has several other outstanding patent-related cases involving ResMed in the United States and in other jurisdictions.
In September, F&P Healthcare said its net profit after tax for the 2019 financial year will be in the range of about $205 to $210m, down from a previous guidance of $215 million, due to expected litigation costs.