GE loses appeal in Fonar patent case

May 28, 1997

The U.S. Court of Appeals for the Federal Circuit has turned down a request by GE Medical Systems to review the court's decision against the Milwaukee vendor in an MRI patent infringement case against Fonar. The court's refusal to rehear the case means

The U.S. Court of Appeals for the Federal Circuit has turned down a request by GE Medical Systems to review the court's decision against the Milwaukee vendor in an MRI patent infringement case against Fonar. The court's refusal to rehear the case means that GE's only recourse is to appeal the case to the U.S. Supreme Court.

Fonar, of Melville, NY, filed suit against GE in 1992 and won a multimillion-dollar jury award three years later. The U.S. Court of Appeals for the Federal Circuit upheld that ruling earlier this year, and reinstated some of the jury's award against GE (SCAN 3/5/97). GE now owes Fonar $103 million, not counting interest.

GE had requested that the three Appeals Court judges who heard the appeal review the case again, but that request was denied. GE must now appeal the case to the U.S. Supreme Court, which rarely hears appeals of patent cases, according to legal experts. GE, however, said in a statement that it intends to carry its appeal to the Supreme Court.

The Fonar case has taken its toll on the profitability of GE Medical Systems, which took a one-time charge in the first quarter as a provision for the litigation, according to the company's 10-Q filing with the Securities and Exchange Commission. The filing declined to state the size of the charge, but The Wall Street Journal last month reported that it was $50 million, in addition to a $50 million reserve taken last year.