Monday, July 19, 2004

Inverness Medical to obtain injunction against Acon Labs

In the following, note the text:
...higher than anticipated expenses for legal matters and research and development and shifts in revenue mix, it expects results for the quarter to fall short of previous expectations.
so even when one wins in a patent litigation, it is costly.
from Inverness:
WALTHAM, Mass., July 19 /PRNewswire-FirstCall/ -- Inverness Medical Innovations, Inc. (Amex: IMA - News), a leading manufacturer and marketer of rapid diagnostics products for the consumer and professional markets, announced today that the United States District Court for the District of Massachusetts has granted Inverness' motion for a preliminary injunction against Acon Laboratories, Inc. Acon sells various immunoassay products throughout the world, and is a supplier of private label consumer diagnostics products to major retailers and other distributors. The injunction, when it goes into effect, is expected to cover Acon's sandwich-type immunoassay tests, including strep, pregnancy and ovulation tests, in the United States. In a Memorandum and Order issued on July 16, 2004, the Court also granted Inverness' motion for summary judgment of infringement, finding that Acon has infringed Claims 7 and 19 of U.S. Patent No. 6,485,982 (the "'982 patent"). In addition, the Court denied Acon's motion for summary judgment of invalidity of Claims 7 and 19, and found that on the basis of the record before her, Inverness had shown that it was likely to succeed in its arguments against Acon's invalidity contentions. The two claims of the '982 patent at issue were also the subject of recent Markman hearings in the lawsuit between Inverness and Quidel Corporation, now pending in U.S. District Court in San Diego. Inverness asserts in that case that Quidel is also infringing the '982 patent.

The Court's order directs Inverness to file a proposed form of injunction order, and gives Acon ten business days to propose an amount of a bond for the injunction. The Court's order also notes that certain issues relating to Acon's challenge to the validity of the claims can be heard at trial. Under the scheduling order currently in place, a trial is scheduled for early November 2004.
In a related case also pending in the District of Massachusetts against Acon, Inverness has accused Acon of infringing certain other patents owned by an Inverness subsidiary, and has moved separately for summary judgment of infringement of one of those patents as well. The motion is pending. Inverness, in its claims in both cases, is seeking both damages and permanent injunctive relief against Acon.
The favorable court ruling is likely to have a positive effect on sales, as Inverness may be able to acquire new accounts for products that were previously supplied by Acon. However, Inverness also cautioned investors that, due to revenues of approximately $88 million in the second quarter of 2004, higher than anticipated expenses for legal matters and research and development and shifts in revenue mix, it expects results for the quarter to fall short of previous expectations. Inverness expects to further discuss the impact of the Court's ruling and provide revised guidance during its next earnings conference call scheduled for Wednesday, July 28, 2004.
Ron Zwanziger, CEO of Inverness Medical Innovations, stated, "We are extremely pleased with this decision, which confirms the strength of our patent position, and we believe that this development and other positive developments in the area of IP litigation will, despite the issues discussed above, contribute to continued positive momentum towards our long term goals in 2005 and thereafter."


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