Saturday, May 13, 2006

ENTERING THE PATENT ZONE: The Volatile History of Medical Laser Patents

This column was originally published in the June 1994 issue of Medical Laser Report.


The Volatile History of Medical Laser Patents

Industry Update

Irving J. Arons
Managing Director
Spectrum Consulting

A U.S. Patent conveys the rights to an inventor (or his/her assignee) to prevent others from making, selling, or licensing a process, method, or material invention, as described in the claims of a letter patent, for 17 years from the time of issue. And, as it is in every other field of endeavor, so it is in the laser field -- where wars have been fought and battles won or lost over patents. Thus we introduce a regular feature to appear occasionally in our column, describing some of the battles and patents issued and fought over in the medical laser field.

In this initial look, we will introduce you to Patlex, Pillco, and Pillar Point Partners -- as well as to Dr. R. Srinivasan of IBM. We will tell you about some of the past battles, and those yet to be fought. And in doing so, tell you about some of the pertinent patents in the field and those issued over the past 18 months.

So sit back and get ready for an exciting ride through the "Patent Zone".

Gordon Gould and Patlex

The Gordon Gould story is an interesting one. While a graduate student in physics at Columbia University, studying under Charles Townes (the inventor of the "maser"), in November 1957 he conceived of the idea for making a laser, wrote his idea into a notebook and had the pages notarized. However, mistakenly believing that he had to have a working model before filing for a patent, he failed to do so at the time. He was beaten to the patent office with a laser patent application by his professor, Dr. Townes and Townes' brother-in-law Arthur Schawlow, then working for IBM. In 1975, Gould turned to patent attorney Richard Samuel, who after studying the situation for about a year, decided to take on the case, and formed Patlex to fight for the Gould patents.

Several months later, in October 1977, the first patent was issued to Gordon Gould. And then the fight began, as Samuels and his partners at Patlex began to license the Gould patents (with Gould retaining a 20% interest in all royalties). Over the years, four laser patents were issued to Gould, and assigned to Patlex for licensing. The four patents were the "gas discharge" patent (U.S. 4,704,583) issued in 1987 and covering most gas lasers -- HeNe, CO2, Ar, and Kr; the "optically pumped amplifier" patent (U.S. 4,053,845) issued in 1977 and covering most YAG, ruby and dye lasers; the "use" patent (U.S. 4,161,436) issued in 1979 and covering the applications of lasers to materials; and the "brewster angle window" patent (U.S. 4,746,201) issued in 1988 and covering the use of a brewster angle window in lasers. To date, more than 200 laser users and manufacturers have signed on to license one or more of the patents, with patent royalties exceeding $60 to $65 million, making Gordon Gould a millionaire several times over. What was most fortuitous was the delay in getting the patents through the patent office in the face of the "first filed" Townes and Schawlow patent. By the several years delay, when the Gould patents finally issued in 1977, 1979, 1987, and 1988, they were worth considerably more than if they had issued in 1959 or 1960, as the laser field was by then a mature business!

Ken Fox, Arthur Coster and Pillco Limited Partners

Sensing the opportunity represented by Patlex and the Gould patents, Ken Fox and Arthur Coster tried to follow suit with a series of four patents that issued to them in 1988, 1989 and 1991. Their patents concern the method and apparatus of using pulsed laser energy within a body lumen to remove tissue. They formed Laser Research Associates (later renamed Pillco Limited Partnership) to "manage" their four patents (U.S. 4,784,132 (11/15/88); U.S. 4,800,876 (1/31/89); U.S. 4,848,336 (7/18/89); and U.S. 5,041,108 (8/20/91)). Pillco then took aim at the various laser companies that it believed infringed their patents. These included the companies producing lasers used in lithotripsy for breaking up stones, and those used for cardio-revascularization. Among the laser companies to accede to royalty demands were Candela, Technomed, and after a court battle, Advanced Interventional Systems. In addition Spectranetics and Laser Photonics have also signed on. The company has now licensed the above five firms and is in negotiation with several others.

Summit Technology, VISX, and Pillar Point Partners

It started with the patents issued to Fran L'Esperance, assigned to Taunton Technologies. It continued with patents issued to Steve Trokel and Charles Munnerlyn, assigned to Visx. Rather than a prolonged fight in the courts over these patents having to do with the methods and means for performing removal of corneal tissue to correct various eye ailments, Taunton acquired Visx, with the new entity renamed Visx, under the management of the former Visx management team. Enter David Muller and Summit Technology. Summit had its own patents for photorefractive keratectomy (PRK), and rather than going through the vagaries of another potential lengthy court battle, the management of both firms met over a game of golf at the Pillar Point Inn in South San Francisco. There they worked out the initial details to form Pillar Point Partnership, an entity that would be the exclusive licensee of the key patents from both firms and would have the right to sub-license the technology and collect a royalty from the distributors and/or manufacturers using the patented technology, i.e., the two firms selling equipment based on the patents, while charging a "per use fee" to each licensee on each use of the equipment that fell within the protected technology, for performing PRK (or PTK).

Alan McMillen (Visx CEO) and David Muller (Summit CEO) are co-managing directors of Pillar Point, with earnings of the company distributed to Summit and Visx according to a complicated formula. Twelve Visx (and Taunton) patents and four Summit patents make up the technology bank, with both companies describing the partnership as a win-win relationship for each. However, time will tell if the ophthalmic community will accept the payment of an additional $100 to $300 per-procedure fee for the right to operate the lasers (to kick in upon one of the Company's lasers receiving FDA marketing approval) after paying such a high price ($400,000 to $450,000) for the equipment.

Dr. R. Srinivasan and "Big Blue" (IBM)

While all the wrangling between Summit and VISX noted above was going on, Dr. Rangaswamy Srinivasan and two associates at IBM quietly were issued a patent (U.S. 4,784,135 -- 11/15/88), covering the basic use of ultraviolet energy to ablate tissue. Those of you familiar with the history of "corneal sculpting" will recall that the first experiments using an excimer laser to attempt to reshape an eye were done in 1983 by Stephen Trokel and Dr. Srinivasan in Srinivasan's laboratory at IBM. Dr. Srinivasan had been experimenting with the excimer laser as a tool to trim plastic materials (e.g.Kapton), and had also conducted experiments to show the precise cuts that could be made on human aortic tissue and hair. This had attracted Stephen Trokel’s attention and led to the first ablation experiments on bovine eyes as mentioned above. Since the issuance of the IBM patent, just about all excimer laser (and solid-state laser) companies operating in the UV on tissue have taken a license to the IBM patent.

With this introduction to the "Patent Zone", next month we will tell you about some of the more interesting medical laser patents of the 50 plus issued in 1993, and the 14 issued in first few months of 1994. Then, periodically, we will update you on significant patents (and patent battles) in the medical laser field.


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