Leading pelvic-health devices maker American Medical Systems (AMMD) has received a favorable court ruling related to its patent infringement dispute with Germany-based medical laser systems and optical fibers maker Biolitec AG.
The U.S. Court of Appeals for the Federal Circuit overruled a summary judgment of the District Court for the District of Massachusetts, which previously found that Biolitec did not infringe on American Medical’s patent.
American Medical sued Biolitec back in 2007, accusing the German firm for infringing its Davenport patent for methods and devices used in photoselective vaporization (a laser therapy) of tissues in patients with benign prostatic hyperplasia (enlarged prostates). The company alleged that Biolitec’s Evolve SLV laser system violated at least one U.S. patent relating to the use of a laser for treating this disease.
The District Court issued a summary judgment in 2009, stating that the Evolve SLV laser system did not perform photoselective vaporization of tissue, and consequently, did not infringe American Medical’s patent. American Medical had appealed the court order.
The Court of Appeals has now reversed the District Court’s initial ruling, quoting that the trial judge went astray in interpreting the term “photoselective” while giving the summary judgment. As such, the case now has been sent back to the District Court for follow-up proceedings.
Minnesota-based American Medical is a leader in manufacturing medical devices and procedures for treating health problems of both men and women. American Medical has a strong pipeline and remains focused on rolling out new products (including the recently unveiled GreenLight laser therapy for treating enlarged prostate) to drive growth.
American Medical derives nearly half of its revenues from its Men’s Health business, which comprises erectile restoration, male continence and prostate treatments. Revenues from Men’s Health continue to be boosted by higher demand for the erectile restoration and male continence product lines.
American Medical has a dominant position in both male and female incontinence markets. However, the company faces stiff competition from Boston Scientific (BSX) and C.R. Bard (BCR). Moreover, American Medical is exposed to a significant reimbursement risk and its European markets are yet to recover from the macroeconomic headwinds. Currently, we have a Neutral rating on the stock.
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