Diasonics sues Acuson on patents

November 6, 1991

Diasonics filed a patent infringement suit in September againstultrasound competitor Acuson in San Francisco Federal DistrictCourt. The suit involves patents related to simultaneous M-mode andB-mode display. This is a common feature in cardiology

Diasonics filed a patent infringement suit in September againstultrasound competitor Acuson in San Francisco Federal DistrictCourt.

The suit involves patents related to simultaneous M-mode andB-mode display. This is a common feature in cardiology ultrasoundsystems and may also relate to other applications such as generalradiology, said Allan W. May, Diasonics senior vice presidentand general counsel.

Acuson maintains that the technology under question is overa decade old and is no longer used in its ultrasound scanners.Diasonics purchased the patents from Varian in the early 1980s,according to an Acuson news release.

"Acuson does not use any of the older technology coveredby these patents. Moreover, the patents are of questionable validityeven in relation to the older ultrasound technology. Acuson intendsto vigorously defend the suit," said Charles H. Dearborn,Acuson general counsel.

Diasonics would have preferred to keep the litigation low-key.The vendor is not after marketing points, May said.

"We didn't issue a press release. Our attitude is thatwe are either right or wrong. Either we have the basic patentor we don't. That is why we are in court. We are comfortable havingthe court make this determination. We believe it is an asset ofthe company and that they are infringing upon it," May said.

Diasonics has not licensed this technology to other vendors.However, the company is in discussions with other parties relatedto this technology, May said.

Separately, Diasonics said it had an increase in bookings andshipments of its high-end Spectra radiology ultrasound duringthe third quarter (end-September). The vendor's overall revenuesincreased 8% in the quarter from $61.7 million during the sameperiod last year to $66.9 million. Net income for continuing operationsincreased 45% from $3 million in the third quarter of 1990 to$4.4 million in the same period this year.

"We are encouraged by these results; however, competitivepricing pressures continue and we have yet to achieve our profitobjectives in this (ultrasound) division," said presidentRod Young.

Acuson, which sells only ultrasound equipment, had a 17% increasein sales for the third quarter (also end-September) from $73.2million last year to $85.6 million. Net income for the quarterrose 22% from $12.5 million last year to $15.2 million.

ATL, another ultrasound competitor, also reported increasesin sales of its high-end Ultramark 9 scanner, upgraded earlierthis year. Revenues and bookings for the UM9 product line increased35% and 45% respectively, according to the financial statementof parent Westmark International of Seattle.

Overall revenues increased 2% for ATL and 13% for its sistercompany Spacelabs, a patient monitor supplier. Total revenuesfor Westmark rose 6.3% from $118.8 million in the third quarterof last year to $126.3 million in the same period this year.