Cynosure Announces Successful Settlement of Patent Infringement Lawsuits Against Tria Beauty
Cynosure to Receive $10 Million and Royalties in Exchange for Non-Exclusive Licenses to Hair Removal Patents
WESTFORD, Mass., Dec. 16, 2013 /PRNewswire/ -- Cynosure, Inc. (Nasdaq: CYNO), which develops and markets laser- and light-based aesthetic treatment systems for high-volume applications, today announced that it will receive $10 million plus future royalty payments under a comprehensive settlement agreement with Tria Beauty, Inc. that ends the patent infringement litigation between Tria and Palomar Medical Technologies, which Cynosure acquired in June 2013.
"This agreement resolves the litigation involving certain Palomar patents, eliminating potential future legal expense to enforce those patents," said Michael R. Davin, Cynosure's President and CEO. "Equally important, the settlement fully values our intellectual property rights by fairly compensating Cynosure and its shareholders for sales of products based on our proprietary hair-removal technology."
The settlement includes two non-exclusive patent license agreements between Cynosure and Tria:
- The first agreement grants Tria a non-exclusive, worldwide license to U.S. Patent Nos. 5,735,844 and 5,595,568 and foreign counterparts for consumer hair removal products. These patents were acquired from Palomar by Cynosure. As part of the agreement, Tria will pay Cynosure $8.5 million. The first payment of $3.4 million is to be made by December 20, 2013. The second payment of $5.1 million is to be made on the earlier of September 15, 2014 or five business days following an initial public offering by Tria or a change of control of Tria. In addition, Cynosure will receive a royalty-free license to certain Tria patents outside the consumer field.
- The second agreement grants Tria a non-exclusive, royalty bearing, worldwide license to the claims of certain Palomar patents, including but not limited to U.S. Patent Nos. 8,182,473, 8,328,794, and 8,328,796, for consumer hair removal products. These patent claims cover the hair removal products that were the subject of the second lawsuit between Palomar and Tria. As part of the agreement, Tria will pay Cynosure $1.5 million covering sales made prior to October 1, 2013. The first payment of $600,000 is to be made by December 20, 2013. The second payment of $900,000 is to be made on the earlier of December 20, 2014 or five business days following an initial public offering by Tria or a change of control of Tria. In addition, Cynosure will receive a 3% royalty on U.S. sales made after October 1, 2013 through September 30, 2021 with respect to U.S. Patent Nos. 8,182,473, 8,328,794, and 8,328,796 or through the expiration of any other licensed Palomar patent if such expiration is after September 30, 2021, unless the second agreement is terminated earlier.
About Cynosure, Inc.
Cynosure develops and markets aesthetic treatment systems that enable plastic surgeons, dermatologists and other medical practitioners to perform non-invasive and minimally invasive procedures to remove hair, treat vascular and benign pigmented lesions, remove multi-colored tattoos, revitalize the skin, liquefy and remove unwanted fat through laser lipolysis, reduce cellulite, treat toe fungus and ablate sweat glands. Cynosure's product portfolio is composed of a broad range of energy sources including Alexandrite, diode, Nd: YAG, picosecond, pulse dye, and Q-switched lasers and intense pulsed light. Cynosure sells its products globally under the Cynosure, Palomar and ConBio brand names through a direct sales force in the United States, Canada, Mexico, France, Germany, Spain, the United Kingdom, Australia, China, Japan and Korea, and through international distributors in approximately 100 other countries. For corporate or product information, visit Cynosure's website at www.cynosure.com.
Any statements in this press release relating to the settlement agreement between the Company and Tria Beauty, Inc. constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors including risks related to, among other things, the amount of future payments the Company expects to receive in connection with its settlement of its patent litigation, the date through which such payments may be received by the Company, the Company's ability to avoid future legal expenses as a result of the settlement, and the enforceability of the Company's intellectual property as well as other factors discussed in Cynosure's most recent Annual Report on Form 10-K and subsequently filed Quarterly Report on Form 10-Q for the third quarter of 2013, which are filed with the Securities and Exchange Commission. In addition, the forward-looking statements included in this press release represent Cynosure's views as of the date of this press release. Cynosure anticipates that subsequent events and developments will cause its views to change. However, although Cynosure may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so.
SOURCE Cynosure, Inc.
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