Acuson and Diasonics settle ultrasound patent dispute

Acuson pays undisclosed sum to Diasonics

Ultrasound competitors Acuson and Diasonics Ultrasound last weekannounced that they have settled a long-running patent infringementlawsuit that began in 1991. Under the terms of the deal, Acusonwill pay Diasonics an undisclosed sum and the companies will enterinto a cross-licensing agreement for certain patents.

Diasonics initiated the litigation in September 1991 when itfiled a patent infringement suit in U.S. District Court in SanFrancisco against Acuson (SCAN 8/11/93). Diasonics of Milpitas,CA, charged Mountain View, CA-based Acuson with infringing onpatents Diasonics acquired from Varian Associates in the 1980s.

The patents related to real-time B-mode imaging with simultaneoustime-motion recording of a preselected region and simultaneousdisplay of ECG. Diasonics claimed that Acuson's 128 and 128XPsystems infringed on the patents.

Diasonics received favorable verdicts on some of its claimsafter a seven-week jury trial that ended in April of last year.U.S. District Court Judge Lowell Jensen threw out some of theverdicts, however, because of "irreconcilable inconsistencies"in the jury's reasoning and because evidence in the trial didnot support the jury's verdict regarding the date of inventionof one of the patents in question.

The two sides wrangled for the following year about which verdictsfrom the first trial should stand, as well as the size of thedamage amount Diasonics should be awarded. At one point, Diasonicsclaimed damages of $22 million.

Both sides were facing the prospect of another long trial toresolve the remaining issues in the case, a situation that undoubtedlymade a settlement attractive.

Under the terms of the settlement, all existing litigationwill be dismissed with prejudice, meaning it cannot be filed again.In addition, Diasonics and Acuson will refrain from patent litigationfor three years.

While Diasonics declined to disclose the size of the sum itreceived from Acuson, the company said it will register the paymenton its second quarter financial results.

Diasonics Ultrasound this month also reported its financialnumbers for the first quarter of this year (end-March). The vendorreported net sales of $44.9 million, down 5% from $47.5 millionrecorded in the first quarter of 1993. The company's red ink isebbing, however. Diasonics posted a net loss of $47,000 for thequarter, compared to $3.6 million in the same period last year.

The company's financial results are in line with expectations,according to president and CEO Bruce Moore. Diasonics expectsto continue improving its quarterly results this year, althoughthe company does not expect the ultrasound market to recover in1994, Moore said.