Fischer files new patent lawsuit against Trex over biopsy technology

New litigation relates to digital systems

Fischer Imaging has added a second lawsuit to its ongoing litigation against Trex Medical over technology used in breast biopsy systems. Denver-based Fischer is asking for damages as well as a court order that would prevent Trex of Danbury, CT, from selling its StereoGuide table biopsy systems, which Fischer claims infringe on its patents.

Fischer initially filed litigation in 1992 charging that the StereoGuide biopsy system manufactured by Lorad infringed on a patent covering technology used in Fischer's Mammotest table biopsy product (SCAN 4/8/92). Trex bought Lorad in 1992.

That lawsuit is based on a patent Fischer received for using Mammotest as a film-based stereotactic biopsy system. Both Fischer and Trex have subsequently developed biopsy guidance units that employ digital images rather than film, and Fischer received a patent for the digital technology on April 7. Shortly thereafter, Fischer filed the second lawsuit in U.S. District Court for the District of Colorado, the same venue where the original suit was filed.

Litigation in the first lawsuit is scheduled to begin later this year, with a pretrial conference set to begin in October. The district court had delayed the litigation as it awaited the outcome of another case before the U.S. Supreme Court, Werner-Jenkinson Company vs. Hilton Davis Chemical. A decision was rendered in that case in March 1997, allowing the Fischer lawsuit to go forward.

If successful, Fischer's lawsuit could have a major impact on Trex sales, as well as those of Trex's partner, U.S. Surgical, which sells StereoGuide as part of its ABBI biopsy system. If Fischer wins the suit, Trex could be liable for treble damages and would probably require a license from Fischer to continue sales.

As of Sept. 27, 1997, Trex had recognized aggregate revenues of approximately $107.1 million from StereoGuide sales, according to Trex filings with the Securities and Exchange Commission. Some $34.4 million of these sales were recorded prior to October 1995, when Lorad was transferred to Trex, and Trex parent ThermoTrex has agreed to compensate Trex for StereoGuide sales prior to that date.

Both Fischer and Trex may experience other patent battles in addition to the litigation over stereotactic biopsy patents. Trex could see legal action regarding another technology in its portfolio-its high-transmission cellular (HTC) grid used in its mammography systems to improve contrast resolution. A former Trex employee has received two patents for the technology and is asserting them against Trex. If the company is found to be infringing the patents, Trex could be subject to damages and enjoined from selling the HTC grid, according to SEC filings. The grid was introduced in 1995 (SCAN 10/11/95).

For its part, Fischer reports that it has been notified by another company that has patent claims that cover technology used in one of Fischer's former products and in one of its current products. The company has offered Fischer a license to the patents under terms that Fischer claims are unacceptable. Fischer believes, however, that if it were required to pay licensing fees, the payments would not have a material adverse impact on the company.