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US District Court sides with Smith & Nephew; rules that it will issue injunction that will prohibit Arthrex Inc. from selling infringing medical devices

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US District Court sides with Smith & Nephew; rules that it will issue injunction that will prohibit Arthrex Inc. from selling infringing medical devices

ANDOVER, Mass., OCTOBER 29, 2008 – A US District Court judge in Oregon yesterday ruled that it will grant Smith & Nephew (NYSE:SNN; LSE:SN) Endoscopy’s request for an injunction that will prohibit privately held Arthrex Inc. of Naples, Fla., from manufacturing or selling medical devices that infringe a patent exclusively licensed to Smith & Nephew by Dr. John O. Hayhurst of Portland, Ore.

A jury determined in June that Arthrex willfully infringed this patent by marketing and selling Bio-SutureTak, PEEK SutureTak, Bio-PushLock and PEEK PushLock suture anchors (see Editors Note) used in various minimally invasive soft tissue repair surgeries, and awarded Smith & Nephew Endoscopy $14.7 million for past infringement through 2005.

The court ruled in our favor, and effective 60 days after the Court enters final judgment -- expected sometime around the end of the year -- Arthrex must stop manufacturing and selling the infringing Bio-SutureTak and PEEK SutureTak anchors.

The injunction will not affect sales of current Arthrex PushLock anchors. During the case Arthrex stopped selling the infringing first generation PushLock anchors and replaced them with modified PushLock Anchors. Smith & Nephew and Dr. Hayhurst have filed a second lawsuit against Arthrex seeking an injunction against the newer versions of PushLock anchors as well as Arthrex’s Bio-Composite SutureTak anchors.

“We are pleased that the judge has granted our request for an injunction,” said Michael Frazzette, president of Smith & Nephew Endoscopy. “Smith & Nephew remains committed to defending its intellectual property and the hard work of the surgeons who partner with us in developing and commercializing these innovative tools and techniques for the ultimate benefit of the patient.”

In addition to granting Smith & Nephew’s injunction, the judge:
• Granted prejudgment interest in the amount of $1.5 million
• Ruled that the court will award additional damages for Arthrex’s infringement after 2005
• Also ruled that the Oregon federal district court will not stay the injunction pending Arthrex’s appeal

Editors note:

The disputed patent covers use of Smith & Nephew’s BIORAPTOR◊, TAG◊ WEDGE, and TAG ROD suture anchors, which are designed to help repair instability in the shoulder as well as other soft tissue tears. The Arthrex products that were found to infringe these patents are: Bio-SutureTak, PEEK SutureTak, and Bio-PushLock and PEEK PushLock suture anchors which are used in various soft tissue repair surgeries, including shoulder repair surgery.

Contact

Joe Metzger
Sr. Vice President, Corporate Communications
Smith & Nephew Endoscopy
+1 (978) 749-1330
joe.metzger@smith-nephew.com