A Diagnostics & Imaging Week

Masimo (Irvine, California) on Tuesday reported the settlement of all existing patent litigation between itself and Nellcor (Pleasanton, California), a settlement apparently serving to end a five-year legal battle between the two companies concerning key pulse oximetry technology patents.

With the settlement, Nellcor has paid Masimo $265 million for damages through Jan. 31, and all pending patent litigation between the companies will be dismissed.

In addition, Nellcor made an advance royalty payment of $65 million to Masimo related to sales of Nellcor's new products during the remainder of calendar 2006. After Jan. 31, Nellcor will no longer ship its current pulse oximetry platform but will continue to provide service and sensors for previously sold products.

Masimo also has granted Nellcor the right to sell Nellcor's new line of pulse oximetry products in exchange for an ongoing royalty.

A U.S. appeals court last September upheld a $164.2 million verdict against Nellcor, in a dispute over oximetry testing technology (Diagnostics & Imaging Week, Sept. 15, 2005.)

Escalon Medical (Wayne, Pennsylvania) reported that a federal judge in California declined jurisdiction over a second lawsuit filed by IntraLase (Irvine, California) involving the terms of a license agreement existing between the parties for laser technology. The suit, initiated by IntraLase in the U.S. District Court for the Central District of California, Southern Division, was dismissed without prejudice on the grounds that much of the suit sought a ruling on issues already raised by Escalon in a case it filed against IntraLase in the Court of Chancery of the State of Delaware.

Escalon said the court "held that retaining jurisdiction would likely result in duplicative litigation and an unnecessary entanglement between the federal and state court actions."

Escalon develops ophthalmic diagnostic, surgical and pharmaceutical products, as well as vascular access devices.

In other legalities, HemoCue AB (Angelheim, Sweden), a privately held manufacturer of medical diagnostic systems and HemoCue Inc. (Lake Forest, California) reported that HemoCue Inc. has sued Stanbio Laboratory (Boerne, Texas), the U.S. distributor for EKF diagnostic (Muenster, Germany), for violations of California's Unfair Competition Law and Unfair Practices Act, as well as for tortious interference with contract, tortious interference with prospective business advantage and trade libel.

The complaint, filed in Orange County Superior Court, alleges that Stanbio has engaged in improper marketing promotions, which offer incentives to HemoCue distributors and customers to relinquish their HemoCue testing equipment.

HemoCue manufactures point-of-care testing systems, including hemoglobin, glucose and urine albumin POC testing systems. HemoCue is owned by EQT, a leading European private equity group.

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