A Medical Device Daily

BioGenex (San Ramon, California) reported filing a lawsuit in the U.S. District Court for the Northern District of California alleging that Ventana Medical Systems (Tucson, Arizona) is infringing BioGenex's U.S. Patent No. 6,632,598. The complaint seeks monetary damages and injunctive relief.

The '598 Patent was the subject of a motion for leave to amend BioGenex's complaint in a pending patent infringement action vs. Ventana. On Feb. 24, 2005, the court denied BioGenex's motion for leave to amend, but noted that BioGenex retained the right to file a separate action.

The '452 Patent also was the subject of the court's Feb. 24, 2005, ruling in which the court found certain of the '452 Patent's claims invalid for purposes of the pending action. BioGenex said that the court did not rule that all claims of the '452 Patent were invalid, and the court's ruling does not prevent BioGenex from further enforcing the '452 Patent against Ventana or others. The court also ruled that certain claims of BioGenex's U.S. Patent No. 6,451,551 were not infringed.

BioGenex said that it "disagrees with the procedural rulings of the court and intends to aggressively pursue its rights and remedies."

The court's Feb. 24 ruling, BioGenex said, did not involve its pending allegations that Ventana is infringing BioGenex's U.S. Patent No. 5,244,787. In addition, there is a separate pending motion for an order to show cause why Ventana should not be found in contempt for violating a prior court order precluding further infringement of the '787 Patent.

BioGenex and Ventana compete in the development of systems that automate cell and tissue testing.

In other legalities:

• The Federal Trade Commission has issued a consent order vs. Preferred Health Services, a physician-hospital organization consisting of more than 100 doctors, and the Oconee Memorial Hospital in northwestern South Carolina, barring those organizations from collectively negotiating and fixing the prices charged payers on behalf of its doctor members.

FTC said that Preferred Health acts as a "contracting representative" for its member doctors, developing pricing contracts with health plans and other payers. Because the organization's doctors make up about 70% of the independent practicing physicians in and around Seneca, South Carolina, health plans must have access to many of its members to provide services for consumers.

Accordingly, the FTC contends, the plans are forced to pay higher, collectively negotiated prices for healthcare services.

While Preferred Health claims that it operates as a "messenger model" – an arrangement the commission says does not facilitate horizontal price agreements for its members – the FTC contends that it does orchestrate such price agreements. The FTC complaint states that in negotiating contracts with payers, Preferred Health uses a physician fee schedule created by its executive director and approved by its board.

Doctors who are part of Preferred Health sign a membership agreement that binds them to contracts using the fee schedule approved by the board. If a health plan rejects the agreed-upon fee schedule, the complaint states, the executive director can negotiate a contract with a "comparable" fee schedule. If this comparable fee schedule is approved by the board and the organization's doctors, the only way a physician member can reject the contract is to leave the organization.

"The FTC will continue to stand strongly for consumers when the evidence shows that rival physicians have negotiated collectively for the fees to charge health plans," said Susan Creighton, director of the FTC's Bureau of Competition. "Such collective negotiation is not only illegal but may lead to higher healthcare costs and limited physician access."

• CBR Systems (for Cord Blood Registry; San Bruno, California), a provider of services for storing and processing newborn cord blood stem cells, said that it filed a complaint against ViaCell (Boston) and its wholly owned subsidiary Viacord (Cambridge), for false advertising promoting their umbilical cord blood stem cell services.

Other complaints alleged in the suit include false statements by Viacord concerning pricing and consumer guarantee, as well as unsubstantiated claims about their cell recovery rates and storage systems.

Stephen Grant, vice president of communications for CBR. "Viacord's unfounded claims in these areas are damaging to the CBR brand and misleading to consumers." Grant added: "we would have preferred to handle this outside of the legal system, [but]Viacord failed to correct the information in a timely and effective manner," said Grant.

The stem cells preserved by CBR are collected immediately after the birth of a newborn and are then available to treat the newborn, siblings and any compatible genetic family member.