Iridex settles with Synergetics

May 1, 2007

S

Synergetics USA Inc. has agreed to pay IRIDEX Corp. $6.5 million as part of an agreement that settled patent dispute litigation on the eve of a trial.

The agreement resolves a long-standing dispute over the type of connector used to attach probes used on its handheld probes for laser surgery. IRIDEX had asserted that Synergetics used its patented technology to create the connector for handheld probes it sold between 1999 and mid-2006. Synergetics denied that it had done anything wrong, but a judge ruled before trial that the design did infringe some portions of the patent.

If a jury had determined Synergetics' infringement was "willful," damages could have ranged as high as $24 million.

Another dispute settled, too

The agreement also settles another patent dispute pending in Pennsylvania regarding Synergetics' directional laser probe technology and an IRIDEX patent-pending application on intuitive laser probe technology. Synergetics had claimed that the IRIDEX technology, which it had acquired from Innovatech Surgical Inc., infringed its patent.

Under the settlement agreement, both sides will hold a royalty-free, worldwide cross-licensing agreement to these patents.

IRIDEX President and Chief Executive Officer Barry G. Caldwell said he believes the settlement is fair. Neither side wanted to spend the money it would require to go to trial.

"You never know what the jury's going to decide," Caldwell said in an interview with Ophthalmology Times. "In this situation, we both did give a little, and we came to a conclusion that what we could live with as a holder of the patent, and that ended all litigation between the companies."

Under the agreement, Synergetics will become an OEM manufacturer for IRIDEX and will manufacture and supply various disposable probes for directional surgery.

The 5-year agreement could create $3 million in sales for Synergetics.

Pamela G. Boone, chief financial officer for Synergetics, did not return telephone calls seeking comment on the agreement.

Although he said he does not like the contentious nature of the litigation process, Caldwell said he feels strongly that IRIDEX needed to protect its patent.

"There are points in time where you have to send a signal to competitors that, if you invest in patents and you think they're being infringed upon, you have to go out and take the appropriate action," he said. "We could not convince the other party they were infringing, and we had to go down a long and unpleasant path."