A Medical Device Daily

Baxter International (Deerfield, Illinois) reported that it has won a long-running battle in a patent infringement battle vs. Fresenius Medical Care (Bad Homburg, Germany), involving Fresenius' hemodialysis machine in the U.S.

It said that U.S. District Court for the Northern District of California issued opinions permanently enjoining Fresenius from manufacturing its flagship product, ruling that it infringes on Baxter's technology and awarding damages to Baxter.

The order, written by Judge Saundra Armstrong, requires that Fresenius stop making, using or selling the 2008K hemodialysis machine, effective Jan. 1, 2009. Armstrong also imposed a 10% royalty on the price of each infringing machine sold from now until Jan. 1, 2009 and imposed a 7% royalty on all disposable products used with the infringing 2008K hemodialysis machines.

Baxter said that Armstrong noted that much of the hardship that Fresenius will face from the injunction is its own doing because it did not take any steps to design around the patents-in-suit.

In a February 2007 ruling, Armstrong upheld the validity of Baxter's patents that had been challenged by Fresenius in a 2003 law suit, ruling that Fresenius failed to introduce substantial evidence of invalidity.

In response to Baxter's statement, Fresenius said it continues to believe these patent claims are invalid as determined by the U.S. Patent Office in recent reexaminations and so will appeal the court decision.

In June 2006, Fresenius prevailed in a trial relating to patent claims regarding touch screen interfaces for hemodialysis machines when the jury found all of the patent claims asserted against Fresenius to be invalid.

The trial court overturned that jury's verdict and ordered a new trial to determine damages. In October 2007 a second jury, in the trial to determine damages, rejected Baxter's demand that Fresenius pay more than $149 million and instead awarded damages of $14.3 million on sales of more than $2 billion of hemodialysis machines and disposables through October 2007.

In other court news: The law firm of Coughlin Stoia Geller Rudman & Robbins (New York) said that a class action has been commenced in the U.S. District Court for the Southern District of Florida on behalf of purchasers of ArthroCare (Austin, Texas) common stock between Aug. 4, 2006, and Jan. 23, 2008.

The complaint charges ArthroCare and certain of its officers and directors with violations of securities violations, alleges that, during the class period, Arthrocare issued false and misleading statements and failed to disclose adverse facts which were known to defendants or recklessly disregarded by them: that its financial results were materially overstated due to the improper inclusion and recognition of revenue attributable to "purchases" of medical devices by DiscoCare (Margate, Florida), an ArthroCare sales agent. Specifically, it said that ArthroCare violated generally accepted accounting practices in various ways.

According to the complaint, during the class period, the company's stock price rose, reaching a high of $64.84 on Oct. 31, 2007, but following various adverse news stories, the company's stock price decreased to about $38.11 by Jan. 25.

Plaintiff seeks to recover damages on behalf of all purchasers of ArthroCare common stock during the class period.

Arthrocare is a developer of Coblation therapy.