A Medical Device Daily

Stratagene (La Jolla, California) has agreed to pay Third Wave Technologies (Madison, Wisconsin) $10.75 million in cash in an out-of-court settlement regarding issues litigated in U.S. District Court in Wisconsin in September 2005 and appealed to the Federal Circuit in Washington.

The companies said they also have agreed to stay any further litigation for nine months.

The companies also said they will seek either a dismissal without prejudice or an extension of the trial date for Stratagene's lawsuit against Third Wave in U.S. District Court in Delaware, and they also reported agreeing to a process to resolve that case, or any other disputes, through an agreement that enables either company to seek arbitration of a patent dispute or to resolve it through a royalty-bearing license.

Dr. Joseph Sorge, chairman/CEO of Stratagene, said, "With this settlement, we will be able to redeem our $21 million appeal bond and strengthen our balance sheet by $10.25 million." Additionally, he said it will enable company focus "on executing our long-term growth strategy in molecular diagnostics, including the pursuit of additional partnerships and product development opportunities."

Kevin Conroy, president/CEO of Third Wave, said, "The settlement has the dual benefit of increasing Third Wave's cash balance to more than $50 million and allowing us to avoid the multi-million-dollar expense of ongoing litigation. The settlement also gives Third Wave the freedom to expand our molecular diagnostic product menu and [focus on] bringing to market innovative, high-value molecular diagnostics like our FDA-approved HPV products."

A year ago, Statagene posted a $21 million bond in Third Wave's name securing the damages and attorneys' fees awarded to Third Wave ensuring coverage of an award of willful infringement, pending the appeal. A federal jury in the fall of 2006 found that Stratagene infringed two key Third Wave patents covering its molecular methods and found willful patent infringement, originally set at $5.3 million in damages and tripling the damages to $15.9 million (Medical Device Daily, Jan. 30, 2006).

Stratagene manufacture life research and diagnostic products in fields ranging across molecular biology, genomics, proteomics, drug discovery and toxicology. Third Wave develops reagents for a variety of DNA and RNA analysis applications.

In other legalities:

• DaVita (El Segundo, California) reported that the Civil Division of the U.S. Attorney's Office for the Eastern District of Pennsylvania has informed it that it has closed its investigation of the company.

The company said it was first notified of the investigation in early 2001 and received a formal subpoena in May 2002 and that it then "fully cooperated" with the investigation.

Kent Thiry, CEO and chairman of DaVita, expressed satisfaction with the close of the investigation of the company's business practices, adding: "We are proud of our culture of regulatory compliance."

DaVita operates kidney dialysis centers and home peritoneal dialysis programs domestically in 42 states and Washington. It said that as of Dec. 31, 2006, it operated or managed 1,300 outpatient facilities serving about 103,000 patients.

• Archus Orthopedics (Redmond, Washington) reported that the European Patent Office has confirmed the validity of its patent, No. EP-B-1223872, following an Opposition that concluded with oral proceedings on Jan. 10 in Munich, Germany.

It said that the patent, issued to Archus in late 2004, discloses a surgical method for replacing the natural facet joint with a prosthesis carried by the pedicle.

European patent law allows a nine-month period after the grant of a patent during which third parties can challenge the patent. An Opposition requires the opposing party to file written briefs and make oral arguments before a three-member board.

Jim Fitzsimmons, chairman/CEO of Archus, said, "Since the pedicle is the preferred site for fixation of posterior spine implants, this patent extends our leading intellectual property position in the facet joint replacement market worldwide."

In August 2006, Archus reported receiving a U.S. Patent disclosing the surgical method of removing some or all of a natural facet joint and replacing it with a prosthesis anchored in the pedicle. It said it is currently conducting a U.S. clinical trial of its Total Facet Arthroplasty System, TFAS, an implant designed to treat spinal stenosis, in which degenerative changes in the facet joints result in compression of spinal nerves and neurological symptoms in the legs. The TFAS replaces the degenerative facet joints with an implant intended to restore stability and normal motion to the spine, eliminating need for fusion. TFAS and competing devices have received CE marking, Archus said.

"To our knowledge, all currently available facet replacement devices attach to the spine through the pedicles," said Fitzsimmons. "We intend to vigorously defend our patent rights and this decision bodes well for that strategy."