CAN-AM/LIFESCAN SETTLEMENT ALLOWS CONTINUED SALE OF GENERIC TEST STRIPS
This article was originally published in The Tan Sheet
Executive Summary
CAN-AM/LIFESCAN SETTLEMENT ALLOWS CONTINUED SALE OF GENERIC TEST STRIPS through a licensing arrangement. The deal is part of a Dec. 1 out-of-court settlement resolving patent litigation between Johnson & Johnson subsidiary LifeScan and the distributor, Can-Am Care, and manufacturer, Diagnostic Solutions, of Quick Check ONE blood glucose test strips. The Quick Check strips are marketed for use with LifeScan's One Touch blood glucose meters.
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CAN-AM/LIFESCAN SETTLEMENT ALLOWS CONTINUED SALE OF GENERIC TEST STRIPS through a licensing arrangement. The deal is part of a Dec. 1 out-of-court settlement resolving patent litigation between Johnson & Johnson subsidiary LifeScan and the distributor, Can-Am Care, and manufacturer, Diagnostic Solutions, of Quick Check ONE blood glucose test strips. The Quick Check strips are marketed for use with LifeScan's One Touch blood glucose meters. Under the agreement, Can-Am and Diagnostic Solutions will pay royalties to LifeScan. The J&J subsidiary also will receive licenses to certain technologies belonging to Diagnostic Solutions. LifeScan estimated that over the past year, sales of the Quick Check ONE test strips were equivalent to less than 2% of its One Touch strip sales. As part of the settlement, Can-Am Care and Diagnostic Solutions also admitted infringing LifeScan's patents and that LifeScan's patents are valid and enforceable. The agreement covers the test strips as they currently exist and does not take into consideration future technological changes in LifeScan's glucose monitoring meters. Another distributor of Quick Check ONE test strips, Minneapolis-based Chronimed, was also granted the right to continue distributing the test strips under the licensing agreement. Chronimed was not a party in the litigation with LifeScan. Milpitas, Calif.-based LifeScan first filed suit against Can- Am in federal court for the Northern District of California in June 1993, immediately following the introduction of the Quick Check ONE strips. LifeScan's suit alleged patent infringement, unfair competition and false advertising. In July 1993, Can-Am countersued, accusing LifeScan of restraint of trade and monopolization and attempted monopolization of the test strip market. In a subsequent ruling, the court concluded that the sale of generic test strips could be allowed in LifeScan meters sold before the company began placing licensing restriction stickers on the products ("The Tan Sheet" June 20, p. 13). Can-Am Care is based in Chazy, N.Y.; Diagnostic Solutions is based in Irvine, Calif. A similar patent infringement case by LifeScan is pending against Polymer Technology International of Issaquah, Wash., a company with a substantially larger business in generic test strip sales than Can-Am Care. Polymer's test strip sales are equivalent to approximately 25% of One Touch sales, according to LifeScan. LifeScan is charging that Polymer's First Choice test strips infringe the same patents involved in the Can-Am case. The trial is set to begin in January. Citing Towne-Oller figures, Can-Am Care estimated the size of the retail market for low-cost glucose test strips at $25 mil. during the 12 months ended in September. Sales for the entire strip market, including both low-cost and branded products, during the same period were approximately $251 mil., the company said. |