Palomar Medical Technologies has announced the resolution of its on- going patent infringement and trade dress infringement lawsuit against Alma Lasers, Inc.
Palomar accused Alma's Harmony, Soprano, Soprano XL and Sonata Systems of infringing U.S. Patent Nos. 5,735,844 and 5,595,568 (the "Patents"). Palomar has an exclusive license to these patents from the General Hospital Corporation in Boston, Massachusetts. Palomar also accused Alma's Harmony System of infringing the distinctive trade dress of Palomar's StarLux System.
Alma has admitted to the infringement, validity and enforceability of the Patents and has agreed not to challenge them in the future. Alma has also agreed to change the trade dress of the Harmony and Aria Systems within the next six to nine months.
Alma will pay Palomar a 9.5% patent royalty plus interest on prior sales of their laser- and lamp-based hair removal systems beginning with their initial sales in 2003 and a 1.5% trade dress fee plus interest on prior sales of their Harmony and Aria systems. Those amounts will be determined based on an audit by an independent auditor that will be conducted over the next few months, and Palomar will recognize those amounts only after they are determined as part of that audit. In addition, Alma will pay Palomar for its legal costs incurred during the lawsuit. From March 28, 2007 through December 31, 2007, Alma will pay Palomar an 8.5% patent royalty and, beginning on January 1, 2008, Alma will pay Palomar a 7.5% patent royalty on future sales of current and any new light-based hair removal systems. The terms are in accordance with Palomar's standard license terms including combination systems that include multiple light sources for hair removal and other applications.
Patricia Davis, Senior Vice President and General Counsel of Palomar, commented, "The resolution of this lawsuit against Alma as well as the resolution last spring of the lawsuits against Cutera demonstrate the strength of Palomar's patent portfolio. As in the past, when forced to litigate, we will seek higher royalties than when competitors take a license on a voluntary basis. As we announced on November 7, 2006, our license agreement with Cynosure was on more favorable terms simply because we were not forced to sue Cynosure prior to executing the license. We have notified our unlicensed competitors that for now Palomar remains willing to offer licenses. Our willingness and the rates of such licenses, however, may change as competitors continue to wait for us to sue them for patent infringement."