Thursday, March 01, 2007

Battle of the press releases following a judicial decision in patent case

Further to the Iridex suit against Synergetics over "Optical Fiber With Electrical Encoding," US 5,085,492 (look at Iridex Corp. is suing O'Fallon, Missouri-based Synergetics USA Inc. in the U.S. District Court for the Eastern District of Missouri and Iridex states that it has received favorable results in a Markman hearing in a patent infringement suit , a press release by Synergetics USA is used to put a favorable spin on a judicial decision and to counteract previous spinning:

The Court issued an order Feb. 27 [Feb. 28] that has cleared Synergetics' current connector design. This ruling is significant in two respects. It caps Synergetics' potential liability to sales primarily predating mid-2006 and it allows Synergetics to continue selling probes and related products for use on Iridex lasers with the new connector system without threat of infringement under the Court's order.

The press release addressed issues of potential damages:

The Court has also ruled that Synergetics' old product design infringes some claims of the Iridex patent, but not all. Thus, the broad issue remaining in the case is whether Iridex is entitled to any damages for the use of the old connector design. Synergetics still has what it believes to be substantial defenses to the damage claim, including defenses which would preclude Iridex from obtaining any damages or which would at least drastically reduce the amount of damages that Iridex could obtain.

These defenses include "laches" and "estoppel." Under laches, Iridex could only obtain damages from between the time the lawsuit was filed in October 2005 on, but only for sales with the old connector design. Under estoppel, Iridex would be precluded from obtaining any damages. Synergetics believes that the Court's ruling as to the new connector design further strengthens its position under the doctrines of laches and estoppel because had Iridex brought its suit in 1999 or in the early 2000 timeframe, Synergetics could have switched to its current connector design back then and avoided further potential liability. The Court has already ruled that a trial must be held on the laches and estoppel issues because facts are in dispute.

The press release disagreed with statements of a previous announcement by Iridex:

Synergetics also seeks to correct what it believes are several inaccuracies contained in the Iridex announcement relating to the Court's rulings of February 27, 2007. Nothing in the Court's rulings make the prospect of an injunction more likely to be granted as Iridex claimed in its release. In fact, the opposite is true. There is no chance under the Court's order that Synergetics could be enjoined from using its current connector system. Thus, Synergetics will be able to continue to sell its product lines with the current connector system moving forward. The vast majority of Synergetics' current laser probe sales utilize the current connector system. Likewise, the Court's ruling can only potentially affect one aspect of Synergetics' new motion for an antitrust counterclaim, but has no effect on that portion of the claim that relates to laches and estoppel fraud. Iridex has also misrepresented in its announcement that the issues of laches and estoppel may not be heard at trial. Those issues will indeed be heard and resolved at trial. (Case Number 4:05-cv-01916-CDP, Document #247 in the pleadings and #282 on the website.)

The press release got into willful infringement / treble damages issues:

Synergetics also disagrees with Iridex's statement that it is more likely to prevail on the issue of treble damages for willful infringement. Synergetics obtained a competent opinion of counsel prior to selling its old connector product in 1999 and still believes that the non-infringement opinion is valid. Iridex has internal emails that confirm that even it did not think that Synergetics' old connector design infringed. The fact that Iridex knew about Synergetics' old connector design but did not sue for over six years underscores that Iridex had serious doubts about its infringement claim. Given how hard fought these issues have been, Synergetics believes it highly unlikely that it could be found a willful infringer or that damages would be increased given the circumstances of this case.

Finally, the Court has not ruled on the summary judgment briefing that encompasses the issue of invalidity. The invalidity issues also offer another potential complete defense to Iridex's claim for damages. The primary basis of Synergetics' invalidity defense rests on a pre-existing patent owned by a competitor that shows the essential features of Iridex's patent claims, namely the use of a resistor to encode attached instruments to the laser.

The press release quoted the attorney:

"Synergetics views the Court's ruling as a significant victory," said Rudy Telscher, the Company's intellectual property attorney with Harness, Dickey and Pierce. "The Court's ruling removes any chance of an injunction against the sale of Synergetics probes and related products moving forward and limits any claim by Iridex for damages to products sold using the old connector design, subject only of course to either party's rights to appeal the decision. Synergetics still has substantial defenses to any damage claims and believes that it will either be liable to Iridex for no damages or damages far below what Iridex seeks. Synergetics' claims against Iridex are still in the case and Synergetics believes that it will still obtain damages against Iridex for false advertising, defamation, and injurious falsehood. Synergetics also still has antitrust claims pending before the court as well, at least a portion of which is not affected by the Court's ruling."


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