A Diagnostics & Imaging Week

Applera (Norwalk, Connecticut) and Beckman Coulter (Fullerton, California) reported that they have established the terms of a settlement to resolve all legal disputes between them regarding claims to certain Beckman Coulter patented capillary electrophoresis technology and PCR instrumentation technology and Applera's allegations of breach of contract of certain licensed technology.

The parties will grant royalty-bearing licenses to each other. Beckman Coulter will grant Applera licenses to its patents for replaceable gels for capillary electrophoresis instruments and DNA sequencers and to its patent for a heated lid for thermal cyclers.

Applera will grant Beckman Coulter licenses conferring rights in the diagnostics market to its patents for nucleic acid sequencing and real time PCR thermalcycling. Additionally, Applera's Applied Biosystems (Foster City, California) group will make a $35 million special payment to Beckman Coulter on signing for release of any and all claims of infringement relating to DNA sequencer and thermal cycler products.

Beckman Coulter will make a $20 million payment over 10 quarters to Applera's Celera Genomics (Norwalk, Connecticut) group for rights in the diagnostics market to the referenced Applera technology.

"Based on recent external industry estimates, the worldwide market for molecular diagnostics testing is estimated to be about $2 billion, growing at more than 15% per year," said Scott Garrett, president and CEO. "Through this agreement with Applera, Beckman Coulter will be in a position to add nucleic acid sequencing to the menu of molecular diagnostic tests available on our recently launched Vidiera NsD capillary electrophoresis systems and CEQ family of instruments."

The U.S. District Court for the Central District of California said it will stay its proceedings for 90 days pending completion of definitive agreements based on these terms.

• On March 7, David Carter, U.S. district judge for the Central District of California, granted the SEC's motion for summary judgment and entered a final judgment against Anthony Sciuto, the president and CEO of BodyScan (Irvine, California), permanently enjoining Sciuto from violating sections of the Securities Exchange Act of 1934 and ordering him to pay $120,000, and barring him from serving as an officer or director of any company.

The court found that Sciuto had disseminated false statements concerning the number of imaging centers operated by BodyScan, the company's prospects for growth and anticipated earnings.

Previously, on March 17, 2005, the SEC filed a complaint against BodyScan and Sciuto, charging them with making a series of false and misleading statements. On Aug. 30, 2005, the court entered a final judgment by default against BodyScan, permanently enjoining it from violating the same antifraud provisions of the federal securities laws and ordering it to pay a civil penalty of $600,000.

In other legalities:

• Monitoring technology developer Masimo (Irvine, California) reported that Dolphin Medical (Hawthorne, California) has agreed that it will discontinue its Dolphin ONE product line. The discontinuation is part of an agreement between Dolphin and Masimo, in which Masimo has agreed to release Dolphin and its affiliates from certain patent infringement claims.

Dolphin is an OEM manufacturer of pulse oximetry sensors and digital pulse oximetry instruments.

• Varian Medical Systems (Palo Alto, California) and Resonant Medical (Montreal) reported that they have resolved the patent issues between them and settled their outstanding litigation in return for what they called "certain payments" to Varian. The amount of the payments will not be disclosed, they said.

The companies said they have taken steps to achieve interoperability between some of their radiotherapy products, providing for the testing of connectivity and data interchange between the 4D Integrated Treatment Console for Varian's Clinac and Trilogy medical linear accelerators, and Resonant's Restitu Platform.

In the fall of 2005, Varian and SAS Praxim filed a complaint against Resonant at the U.S. International Trade Commission as well as related litigation in the Federal District Court in the State of Washington. As part of this settlement, all patent and litigation between the companies have been settled.

• QuadraMed (Reston, Virginia) and MedCath (Charlotte, North Carolina) reported that the companies have reached an out-of-court agreement regarding the lawsuit pending between them.

With the settlement, QuadraMed has agreed to pay MedCath $2 million. Additionally, the companies said they will exchange mutual releases and dismiss their claims against each other.

QuadraMed will fund the settlement amount from its available cash.

In addition to amounts already recorded as of Dec. 31, 2005 and amounts covered by insurance, QuadraMed will record a charge of about $1 million related to this settlement in its three-month period ended March 31, 2006.

QuadraMed is a provider of healthcare information technology and services, from clinical and patient information management to revenue cycle and health information management.

MedCath, which is focused on the diagnosis and treatment of cardiovascular disease, owns and operates hospitals in partnership with cardiologists and cardiovascular surgeons.