A Diagnostic & Imaging Week

EP MedSystems (West Berlin, New Jersey) reported Monday that its board of directors had terminated Rein-hard Schmidt as CEO, president and COO in the wake of a report that certain sales by the company to Iran are being investigated by the Department of Commerce and the U.S. Attorney’s Office for the District of New Jersey.

The probe involves both the possible violation of U.S. law in the sales and the accuracy and completeness of voluntary statements filed with the Department of Commerce with respect to those sales.

Schmidt’s employment agreement also provided that his position as a director of the company ceases upon the termination of his employment.

David Jenkins, founder of EP MedSystems and its chairman, has been appointed by the board of directors to serve as president, CEO and COO. Jenkins previously served as CEO of the company from its inception in 1993 until August 2002 and as president from its inception until August 2001.

Jenkins had served as CEO of Transneuronix (Mt. Arlington, New Jersey), a privately held company engaged in the development and marketing of an implantable stomach pacemaker device to treat obesity, from 2002 until its sale to Medtronic (Minneapolis) this past summer (Medical Device Daily, June 30, 2005).

EP Medsystems said Schmidt’s termination resulted from his certification and authorization of such statements, some of which the company’s audit committee has discovered in its own investigation to have been inaccurate or incomplete. The committee’s investigation is ongoing.

The company said Schmidt’s termination did not result from the discovery of any financial or accounting irregularities by the audit committee.

EP MedSystems develops electrophysiology products used to diagnose and treat certain cardiac rhythm disorders. Its product line includes the EP-WorkMate Electrophysiology Workstation, the EP-4 Computerized Cardiac Stimulator, fixed and deflectable diagnostic electrophysiology catheters and related disposable supplies, the Alert System and Alert family of internal cardioversion catheters, and the ViewMate for use in intracardiac ultrasound catheter imaging.

BioGenex (San Ramon, California) said it has received a favorable ruling in its patent infringement litigation against Ventana Medical Systems (Tucson, Arizona). The Markman ruling limits the scope of Ventana’s patent for automated staining, BioGenex said.

Judge Raner Collins of the U.S. District Court for the District of Arizona issued the Markman ruling, which interprets the reagent-dispensing claims of Ventana’s U.S. patent No. 6,352,861 (the ’861 patent).

Ventana had alleged that BioGenex’s automated staining instruments infringe the dispensing claims of the ’861 patent, asserting that any automated staining device that uses bar codes to coordinate reagent dispensing onto samples infringes the ’861 claims.

BioGenex disagreed, maintaining that its automated staining systems, the OptiMax Plus and i6000 systems, which are used in histopathology labs worldwide, do not infringe because they dispense reagents differently from the dispensing method required by the ’861 patent.

Specifically, BioGenex contended that Ventana’s patent claims apply only to products using bar coding in conjunction with instruments that dispense reagent directly from the reagent container onto a slide. It said that direct dispensing requires positioning the reagent dispenser over the sample and applying the reagent directly from the dispenser onto the sample below it.

By contrast, BioGenex said its automated staining systems dispense reagent indirectly, by means of an intervening reagent transfer device, a robotic XYZ arm holding a micropipette. It said the micropipette aspirates, or “sips,” reagent from the reagent bottle, then moves over to and above the tissue sample and applies the reagent to the sample. This indirect dispensing procedure is known as “sip and spit” dispensing.

BioGenex said the court agreed with it, limiting the meaning of the term “dispensing,” as used in the ’861 patent, to direct dispensing, and excluding BioGenex’s “sip and spit dispensing” method.

BioGenex said the two companies have agreed that due to this ruling, the court should now enter summary judgment of non-infringement in favor of BioGenex.

BioGenex CEO Krishan Kalra, PhD, said, “This victory now allows [us] to focus on launching our exciting new platform, the Xmatrx System.” The Xmatrx is BioGenex’s latest instrument product offering that automates slide processing.