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  • Nidek, Visx Exchange Patent, Antitrust Allegations

Photonics Spectra
Feb 2000
Gaynell Terrell

SAN FRANCISCO -- Allegations of patent infringement by excimer laser manufacturer Visx Inc. against Nidek Inc. have been aired in multiple courts of law, but analysts say it's the technology that ultimately will decide who gets the biggest share of the vision-correction market.

"Lawsuits are normal business practice in medical technology," said David Gruber, analyst with Lehmann Brothers in New York. "The better technology wins."

To date, the lawsuits have been going Nidek's way. Nidek Co. Ltd., a privately owned company based in Gamagori, Japan, and parent of Fremont, Calif.-based Nidek Inc., has been sued by Visx in the US and abroad for patent infringement. Visx, of Santa Clara, Calif., brought similar complaints against Nidek in Canada and Great Britain and lost. A suit in France is pending, said Nidek spokesman Ray Sayano.

"As far as the doctors are concerned an excimer laser ... is an excimer laser," said Sayano. "It's the use of the laser system [that is being challenged as intellectual property]."

Last year, Nidek retaliated by accusing Visx of unfair trade practices in federal court in San Francisco. The antitrust action was stayed while the International Trade Commission considered a Visx patent suit. In December, the commission found not only that Nidek did not violate patent protection, but that certain Visx patents are invalid and unenforceable. Visx asked for a review of the finding. The judge in Nidek's antitrust suit lifted the stay, and that case is continuing.

Both companies operate in the crowded laser vision correction manufacturing field, developing excimer laser systems to correct nearsightedness and to diagnose and treat diseases of the eye. Another leading player, Summit Technology Inc. of Waltham, Mass., also sued Nidek for patent infringement in district court in Massachusetts. That case is ongoing. Summit brought a patent suit against Nidek in Japan and lost. In 1998, Summit and Visx dissolved a patent partnership after the Federal Trade Commission charged the two with price-fixing. A Summit spokesman declined comment.

License agreements

Visx, meanwhile, sued Winter Park, Fla.-based LaserSight Inc. for patent infringement in November. LaserSight agreed to a stay under which it would manufacture, but not sell, its laser system while the two companies work out a license agreement. Visx also is pursuing a license agreement with Bausch & Lomb Inc. of Rochester, N.Y. Visx has licensed six laser manufacturers outside the US.

Lola Wood, manager of investor relations at Visx, said that the company doesn't comment on its litigation strategy or licensing negotiations. She said the lawsuits involve different patents.

Analysts said there's a lot of buzz in the fast-growing vision-correction field about customized ablation, a better eye-mapping system that can correct vision to about 20/10, the best refraction level yet. At the same time, prices for laser surgery continue to fall as manufacturers such as Nidek waive the customary $250-per-procedure fee.

Visx controls about 80 percent of the US market with 435 units, according to a Nov. 15, 1999, report from investment firm PaineWebber. The domestic launch of Nidek's laser system has not significantly affected Visx or Summit in the market.

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