A Medical Device Daily

In an ongoing licensing dispute, Escalon Medical (Wayne, Pennsylvania) reported filing a complaint against IntraLase (Irvine, California) in a chancery court in the state of Delaware charging “bad faith” and “multiple breaches” of a laser technology agreement between them.

Escalon said it licensed its intellectual laser properties to IntraLase in 1997 in exchange for an equity interest in IntraLase as well as royalties on future product sales. Escalon remains a holder of the common stock of IntraLase, and in April it demanded to inspect certain of IntraLase’s records. IntraLase rejected the demand, Escalon said.

Escalon said it has not received the royalty payments owed it and that it seeks declaratory relief, damages and performance of its rights, including its right for independent accounting of IntraLase records.

Escalon also said that the U.S. District Court for the Central District of California, Southern District, in early May entered a judgment concerning IntraLase’s interpretation of royalty terms. The court, Escalon said, ruled that IntraLase must pay it royalties on revenue from maintenance contracts and one-year warranties. Further, Escalon said the court rejected IntraLase’s argument that it is entitled to deduct the value of non-patented components of its ophthalmic products, which it sells as an integrated unit, from the royalties due Escalon.

It said that the court rejected IntraLase’s assertion that account receivables are not “consideration received” under the agreement and that IntraLase must pay Escalon royalties on IntraLase’s account receivables. It said the court agreed, however, that IntraLase “is not required to pay royalties on research grants.”

Escalon said that the court ruled that IntraLase’s default in the payment of royalties must be remedied within 15 days of written notice of the default.

Escalon is a provider of ophthalmic diagnostic, surgical and pharmaceutical products as well as vascular access devices.

In other legalities, deCode Genetics (Reykjavik, Iceland) reported class-action and derivative lawsuits filed last year in September and October against it and certain of its officers and directors have been voluntarily dismissed by the plaintiffs. The plaintiffs did not receive any payment or fees in connection with the dismissal, deCode said.

deCode applies its discoveries in genetics to the development of drugs for common diseases.