Cutera Admits Infringement and Validity of Palomar Patents for Both Laser
and Lamp Products
BURLINGTON, Mass., June 5 /PRNewswire-FirstCall/ -- Palomar Medical
Technologies Inc. (Nasdaq: PMTI) announced today the resolution of its
on-going patent infringement lawsuits against Cutera, Inc. (Nasdaq: CUTR).
In the first lawsuit, Palomar accused Cutera's CoolGlide Laser Systems,
including the CoolGlide CV, Excel, Vantage and Xeo, of infringing U.S.
Patent No. 5,735,844. In the second lawsuit, Palomar accused Cutera's Lamp
Systems, including the CoolGlide Xeo and Solera Opus platforms using the
PW770 handpiece, of infringing both the 5,735,844 Patent as well as U.S.
Patent No. 5,595,568 (the "Anderson Patents"). Palomar has an exclusive
license to these patents from the General Hospital Corporation in Boston,
Massachusetts.
Cutera has admitted to the infringement, validity and enforceability of
the Anderson Patents and agreed not to challenge them in the future.
Cutera will pay Palomar $15.5 million as an 8.5% royalty on sales of
their laser- and lamp-based hair removal systems beginning with their
initial sales in 2000 through March 31, 2006, $2.5 million in interest on
past sales, and $4 million to cover Palomar's legal costs incurred while
enforcing these patents. Beginning April 1, 2006, Cutera will pay Palomar a
7.5% royalty on future sales of these systems and any new light-based hair
removal systems later developed.
Patricia Davis, Senior Vice President and General Counsel of Palomar,
commented "The Court's rulings throughout this lawsuit, including the
Markman Ruling and the Summary Judgment ruling, confirmed the breadth and
validity of Palomar's patent position. This favorable resolution with
Cutera further substantiates the strength of these patents. Palomar intends
to continue its strategy of vigorously enforcing our patent position."
Joseph P. Caruso, President and Chief Executive Officer of Palomar,
commented, "Palomar pioneered the cosmetic light-based industry with the
first high powered light-based hair removal system in 1997. Since then,
this industry has become one of the fastest growing segments in the medical
industry with hair removal procedures being the most popular cosmetic
light-based procedure performed today. Many companies have taken advantage
of this high growth by offering products covered by the Anderson Patents,
and Palomar intends to license such companies or prevent continued
infringement. This strategy has and should continue to provide significant
financial benefit to Palomar and its shareholders."
In the Patent License Agreement with Cutera, the 7.5% royalty rate is
applicable to all light sources for hair removal. When systems include
light sources not for hair removal, the 7.5% royalty rate is applied to the
hair removal portion of the entire system. For a system with two or more
light sources for hair removal and one or more other light sources not for
hair removal, the 7.5% royalty is applied to 70% of the total sale price
and for systems with one light source for hair removal and one or more
other light sources not for hair removal, the 7.5% royalty is applied to
50% of the total sale price.
Under Palomar's license agreement with the General Hospital
Corporation, Palomar will pay to the General Hospital Corporation 40% of
all payments from Cutera excluding reimbursement of Palomar's legal costs.
For more information, please see the Settlement Agreement, the License
Agreement, the Consent Judgments and Stipulations of Dismissal filed as
Exhibits 99.1, 99.2, 99.3 and 99.4 to a Current Report on Form 8-K filed
today.
About Palomar Medical Technologies Inc.: Palomar is a leading
researcher and developer of light-based systems for cosmetic treatments.
Palomar pioneered the optical hair removal field, when, in 1997, it
introduced the first high-powered laser hair removal system. Since then,
many of the major advances in light-based hair removal have been based on
Palomar technology. There are now millions of light-based cosmetic
procedures performed around the world every year in physician offices,
clinics, spas and salons. Palomar is testing many new and exciting
applications to further advance the hair removal market and other cosmetic
applications. Palomar is uniquely focused on developing proprietary
light-based technology for introduction to the mass markets. Palomar has an
agreement with The Gillette Company to develop and potentially
commercialize a patented home-use, light-based hair removal device for
women (please note that in October 2005, Procter & Gamble Company completed
its acquisition of Gillette. Under the Development and License Agreement,
Procter & Gamble, as the acquiring party, assumed all of Gillette's rights
and obligations.) Palomar also has an agreement with Johnson & Johnson
Consumer Companies to develop and potentially commercialize home-use,
light-based devices for reducing or reshaping body fat including cellulite,
reducing the appearance of skin aging, and reducing or preventing acne, and
was awarded a contract by the Department of the Army to develop a
light-based self-treatment device for Pseudofolliculitis Barbae ("PFB").
For more information on Palomar and its products, visit Palomar's
website at http://www.palomarmedical.com. To continue receiving the most
up-to-date information and latest news on Palomar as it happens, sign up to
receive automatic e-mail alerts by going to the Investor Relations' section
of the website.
With the exception of the historical information contained in this
release, the matters described herein contain forward-looking statements,
including but not limited to statements relating to new markets,
development and introduction of new products, and financial projections
that involve risk and uncertainties that may individually or mutually
impact the matters herein, and cause actual results, events and performance
to differ materially from such forward-looking statements. These risk
factors include, but are not limited to, results of future operations,
technological difficulties in developing or introducing new products, the
results of future research, lack of product demand and market acceptance
for current and future products, the effect of economic conditions,
challenges in managing joint ventures and research with third parties and
government contracts, the impact of competitive products and pricing,
governmental regulations with respect to medical devices, including whether
FDA clearance will be obtained for future products and additional
applications, the results of litigation, difficulties in collecting
royalties, potential infringement of third-party intellectual property
rights, and/or other factors, which are detailed from time to time in the
Company's SEC reports, including the report on Form 10-K for the year ended
December 31, 2005 and the Company's quarterly reports on Form 10-Q. Readers
are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The Company undertakes
no obligation to release publicly the result of any revisions to these
forward-looking statements that may be made to reflect events or
circumstances
Contacts: Investor Relations
Kayla Castle
Investor Relations Manager
Palomar Medical Technologies Inc.
781-993-2411
ir@palomarmedical.com
SOURCE Palomar Medical Technologies Inc.
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Related links:
http://www.palmed.com
http://www.prnewswire.com/comp/107555.html/
CONTACT:
Kayla Castle, Investor Relations Manager of
Palomar Medical Technologies Inc., +1-781-993-2411,
ir@palomarmedical.com
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