A Medical Device Daily
EP MedSystems (West Berlin, New Jersey) reportedexecuting a settlement with the Bureau of Industry and Security of the U.S. Department of Commerce to close issues related to its shipment of products to restricted countries in 2004 and earlier.
The company does not admit or deny guilt, but agrees to pay a fine of $244,000 with no restrictions on commercial or export activities. The company said it has accrued $345,000 for this penalty in its books as of June 30.
The company also said that it has made a settlement offer to the U.S. Department of the Treasury in connection with an investigation of these shipments and is awaiting a response. It said the Treasury Department has indicated to it “orally” that the maximum penalty it might seek would be $44,000.
Given that any investigations by the Treasury Department or the Securities and Exchange Commission have not been closed, the company said it could not rule out additional civil or administrative penalties. But it said it has made no provision for any future costs associated with these investigations or any costs associated with the “defense or negotiations” to resolve any outstanding issues.
David Bruce, new president/CEO of EP MedSystems, said, “We continue to cooperate with the other governmental entities in hopes that we can close any remaining issues as quickly as possible. “
EP MedSystems develops cardiac electrophysiology (EP) products used to diagnose and treat certain cardiac rhythm disorders.
In other legalities:
• IntraLase (Irvine, California), reported filing a lawsuit in the Superior Court for the State of California, County of Orange, against Carl Zeiss (Oberkochen, Germany), its subsidiary Carl Zeiss Meditec (Dublin, California/Jena, Germany) and certain affiliates.
The lawsuit alleges that Zeiss breached an intellectual property agreement with IntraLase by improperly using proprietary information of IntraLase which Zeiss wrongfully induced IntraLase to disclose. The suit seeks damages for breach of contract and payment to IntraLase of all revenues and profits derived by Zeiss from the sale and use of its laser.
Robert Palmisano, president/CEO of IntraLase, said, “We believe the marketplace rather than the courthouse is the appropriate arena for honest and spirited competition. However, we have a duty to protect our intellectual capital and feel we have no alternative but to take the necessary legal action to protect our interests and ensure that any competition we face is fair competition.”
Palmisano added: “The IntraLase FS laser has already been used for approximately one million corneal flap procedures, the first step to LASIK surgery, resulting in superior safety and clinical outcomes. We remain confident that our advanced technology will continue to be the technology of choice for corneal surgeons worldwide.”
IntraLase manufactures what it calls “an ultra-fast laser that is revolutionizing refractive and corneal surgery by creating safe and more precise corneal incisions.”
• RehabCare Group (St. Louis) reported that it has been notified by the Office of Inspector General (OIG) of the Department of Health and Human Services that the agency has closed, “without action,” its investigation of the company’s contract therapy (CT) business in New Jersey.
In April 2005, the OIG issued a subpoena requesting materials related to the company’s CT operations in that state. RehabCare said it received notice earlier this week that the OIG has closed its investigation and will not be taking further action in connection with the subpoena.
RehabCare provides rehabilitation program management services in partnership with more than 1,400 hospitals and skilled nursing facilities in 42 states, the District of Columbia and Puerto Rico. The company also operates freestanding rehabilitation hospitals and long-term acute care hospitals.