Medical Device Daily

Diomed Holdings (Andover, Massachusetts), a developer of minimally invasive medical technologies, including its EndoVenous Laser Treatment (EVLT ) for varicose veins, reported that, in its trial to prosecute its U.S. EVLT Patent No. 6,398,777, the jury found both AngioDynamics (Queensbury, New York) and Vascular Solutions (Minneapolis) liable for infringement with their laser systems.

The case, initiated on March 12, concluded on March 28, with the jury verdict finding each defendant liable for both inducing infringement and contributory infringement of Diomed's patent, and awarding it a total of $12.46 million.

"We are thrilled that the jury has recognized the value of Diomed's pioneering patent," said James Wylie Jr., president/CEO of Diomed. "We plan to immediately file for a permanent injunction against AngioDynamics and Vascular Solutions which, if granted, will require both companies to cease marketing their infringing products."

Diomed said it acquired exclusive rights to the EVLT patent from the five inventors of the procedure in September 2003.

In January 2004, Diomed filed suit in U.S. Federal District Court for the District of Massachusetts against AngioDynamics, seeking injunctive relief and damages for infringement of U.S. Patent Number 6,398,777 which covers EVLT to treat varicose veins (Medical Device Daily, Jan. 27, 2004).

Diomed initiated similar actions against Vascular Solutions, CoolTouch (Roseville, California) and Total Vein Solutions (Houston) later in 2004. These actions are still pending under the jurisdiction of the same court and are slated to move to trial later this year, it said.

"This decision radically alters the competitive landscape in the treatment of venous disease and is expected to have a significant impact on our financial performance going forward," said David Swank, CFO of Diomed. "At existing growth rates, AngioDynamics and Vascular Solutions sales represent about $20 [million] to $25 million in annual customer demand, and we have already initiated plans to maximize our share of that business. We also expect that the ability to recover royalty payments and the elimination of the legal burden associated with the '777 litigation to assist in improving our financial performance."

AngioDynamics, on the hook for $8.36 million of the total verdict, said it will file a motion to overturn the verdict within 10 days, and, if denied, will file an appeal "promptly."

Eamonn Hobbs, AngioDynamics CEO, said, "AngioDynamics strongly disagrees with the verdict reached by the jury today and we will immediately ask the court to overturn it, and, if necessary, appeal the decision. We firmly believe our VenaCure procedure falls outside the scope of the Diomed patent, and are confident this will be established through the court's review of the verdict or the appeal process."

In September 2006, a federal judge dismissed AngioDynamics' claim that two of Diomed's patents were invalid, non-infringed and unenforceable. Those patents dealt with Diomed's "marked sheath" products, including the EndoVenous laser treatment for varicose veins.

AngioDynamics said that, regardless of the final outcome of the lawsuit, the company believes it will be fully indemnified according to the terms of the company's supply and distribution agreement with its laser system sub-supplier.

Vascular Solutions acknowledged the jury award of $4.1 million in damages against it and also indicated a potential appeal.

"While we are disappointed with the jury's verdict and plan to bring post-trial motions and then appeal, if necessary, on a number of grounds, we are also prepared to move forward," said Howard Root, CEO of Vascular Solutions. "The amount of damages awarded is within Vascular Solutions' existing capital resources and is not expected to affect our on-going operations, even if judgment stands as awarded by the jury."

Root said that if an injunction is ruled against it the company has prepared a workaround for the Vari-Lase.

"We prepared for this possibility by developing a new version of our Vari-Lase fiber which Diomed admitted in this litigation prevents the vein wall contact that was the essence of Diomed's patent," said Root. "Our 510(k) application for this 'bright tip' version of the Vari-Lase fiber was approved by the FDA in late March, and we have already observed successful initial clinical evaluations."

Root said his company expects to transition to the bright tip version in all of its Vari-Lase products sold in the U.S. during the month of April.

While victorious in this round, Diomed is itself the target of a lawsuit over its EVLT technology by VNUS Medical Technologies (San Jose, California), filed in July 2005 (MDD, July 25, 2005). AngioDynamics and Vascular Solutions are also targets of that lawsuit and were added as defendants in October 2005 (MDD. Oct. 12, 2005).

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