BOTHELL – SonoSite Inc. has declared victory in its four-year legal tussle over the patented technology used in its hand-carried ultrasound machines.
A ruling Tuesday by U.S. District Court in Houston granted SonoSite’s motion for a summary judgment. It also declared a patent infringement claim by Neutrino Development Corp. to be invalid, and dismissed Neutrino’s claims.
“This is a major victory for SonoSite, and we are very pleased that the judge agreed with us that our products do not infringe Neutrino’s patent,” said Kevin Goodwin, the Bothell company’s president and chief executive officer, in a statement.
“Our technology and products are based on years of innovation and dedication by our employees,” he added.
William Norvell, the attorney for Neutrino, said he filed a notice of appeal on Wednesday.
“We are highly optimistic (the judge) has erred, and we’re confident of a reversal of that, and we’ll move on to a trial,” he said.
The legal saga’s roots date to 1997, when Richard Redano, a Texas intellectual property lawyer and inventor, applied for a patent on a device that could stimulate and monitor blood flow in the body. He saw it as a possible tool to treat erectile dysfunction.
His patent was granted in 2001. His company, Neutrino, then sued SonoSite in July 2001, claiming that all of SonoSite’s ultrasound models infringed on Neutrino’s patent. Neutrino later filed lawsuits in two other states against SonoSite distributors.
Potentially large stakes were at risk, including sales royalties from SonoSite. In 2005, SonoSite’s revenue reached $147.5 million.
In September 2004, the court made a summary ruling that SonoSite had infringed on Neutrino’s patent. The two sides were ordered into mediation, and a jury trial was scheduled. That left the Texas company feeling confident.
“For SonoSite to get out of this, they have to have that patent declared invalid by the court,” William Norvell, lead attorney for Neutrino, told The Herald in 2004. “They have an enormous burden.”
But the company and its attorneys apparently met that burden. In this week’s ruling, the same judge reversed his earlier summary ruling for Neutrino and dismissed that company’s claims “with prejudice.”
The court found that Neutrino improperly amended its patent application to include a claim that covered a hand-held component. That amendment was not in the original patent application filed in 1999.
SonoSite has likely spent millions of dollars on its defense. The company reported in its most recent annual report that an increase in administrative expenses from $7.3 million in 2003 to $13.7 million last year included the cost of defending itself against Neutrino.
After SonoSite issued news of the legal ruling, its shares closed at $38.80, up 49 cents, on Wednesday.
Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.
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