Ansell's Australia condom suit portends global battle versus Durex maker Reckitt

By Byron Kaye

SYDNEY, Feb 3 (Reuters) - World No.2 condom maker Ansell Ltd (Other OTC: ANSLY - news) has accused larger rival Reckitt Benckiser Group PLC of infringing a patent for non-latex contraceptives, kicking off what could be a global legal battle over one of the pair's biggest drivers of growth.

Australia's Ansell, in a complaint filed at Sydney's federal court, wants its London-listed peer to stop selling the Durex RealFeel condom, saying it copied the synthetic material that gives Ansell's quick-selling SKYN range an invisible feel.

Reckitt said it would defend itself and not comment further.

For Ansell, which reports half-year earnings on Monday, a win in its relatively small home market would likely spur similar action in other jurisdictions, putting Reckitt's share of the $2.5 billion global condom market under threat, legal experts said.

"You can see why they're protecting it. They see SKYN as their growth engine," said a Sydney-based analyst covering Ansell, who asked not to be identified as court action is in its early stages. "They're actually losing market share ex-SKYN."

The comparatively low cost of patent suits in Australia - at about a quarter that of the United States - has made the country a test bed for several cases that went global, said Melbourne-based patent attorney Mark Summerfield.

Smartphone giant Apple Inc (NasdaqGS: AAPL - news) picked Australia as one of the first jurisdictions in what became a worldwide patent case against rival Samsung Electronics Co Ltd.

"Success in one country does give a strong indication of what might happen elsewhere," said Summerfield. "If (Reckitt) were unable to market that product in Australia ... they're at risk of action being taken elsewhere."

Ansell launched SKYN in 2008 and gained an Australian patent in 2012. It has been counting on the line to revive its sexual wellness unit, where earnings are suffering from competition in emerging markets like Brazil and China. In 2014, SKYN sales grew 22 percent versus a 7 percent fall in Ansell's broader condom range.

In its suit filed in November, Ansell demanded Reckitt destroy all RealFeel stock and pay yet-to-be-determined damages for lost sales.

Ansell "has made significant R&D investments in this technology and related patents and this lawsuit seeks to protect these investments," Jeyan Heper, president and general manager of Ansell's sexual wellness division, said in a statement. (Editing by Christopher Cushing)