LifeScan Wins Big

LifeScan scored a pre-trial victory in its patent infringement suit against Polymer Technology, makers of generic test strips for use in LifeScan’s One Touch Blood Glucose Monitoring System.

In a January 3rd ruling, the Federal District Court in Seattle, WA found that Polymer’s First Choice off-brand test strips intended for use in LifeScan’s One Touch meters infringed on three LifeScan patents, and ordered Polymer to immediately stop manufacturing and selling test strips intended for use in the One Touch meters.

A Polymer press release insisted that Judge Barbara Rothstein’s decision applies only to Polymer, and not to any of its customers, distributors, or independent and chain retailers.

A copy of the injunction order states that, “Polymer, and all those acting in concert or in privity with it, are enjoined pending the final hearing and determination of this action from infringing on United States Letters Patent No. 5,304,468 … by manufacturing, using or selling, or inducing others to manufacture, use, or sell, blood glucose test strips, including First Choice test strips, for use with One Touch meters.”

Dave Detmers, LifeScan’s marketing communications manager, suggested that retailers “may want to check with an attorney to see if this order applies to them.” However, Mike Sherman, director of sales and marketing at Polymer, insisted that LifeScan’s statement is just a “scare tactic,” and that the ruling clearly does not effect anyone but Polymer. He added that major distributors have shown the ruling to their lawyers, who confirmed that no one is bound by the ruling but Polymer.

The Court’s decision has no effect on the settlement made between LifeScan and, Can-Am Care, another low-cost strip distributor, who entered into a licensing agreement with LifeScan in December.

The injunction should not be a concern to First Choice strip users according to Sherman who said that “Polymer is confident that through its increased capacity and recent month’s shipping activities, most of its customer base has sufficient inventories to last until the end of the trial period.” The trial, at which both parties will seek “substantial damages,” is set to begin in Seattle February 6, and should last two to four weeks.

Following the judge’s injunction to stop the sale of the strips, Polymer requested permission to continue their manufacturing so that they could keep their employees working. Though the judge was made aware that the company would have to lay off employees if they were not permitted to continue the manufacturing of the strips, the request was denied.

In response to the decision, Polymer has temporarily laid off more than 400 employees, including manufacturing and support staff. Even in the aftermath of this decision, Sherman said that he is “very confident” that Polymer will ultimately win the suit.

“Johnson & Johnson offered to buy up Polymer inventory from the field (retailers and wholesalers). If they are so sure they are going to win, then why buy it up now?,” he asked, concluding that “They may feel they have a weak case.”

LifeScan is offering retailers $18 credit towards the purchase of LifeScan One Touch test strips for each box of 50 First Choice strips the stores send to LifeScan. Detmers said that this is not an attempt to buy out Polymer’s product, but, instead, is a courtesy to the retailers who do not want to carry an infringing product or do not see a future in Polymer’s products.

In order to be able to continue the sale and manufacture of the strips, Polymer will have the burden of proof in showing that all three of LifeScan’s patents are invalid.

LifeScan recently settled out of court with another off-brand test strip manufacturer, Diagnostic Solutions, Inc., and their distributor Can-Am Care Corporation. In the settlement, the companies admitted that they had infringed on the patents LifeScan has on its system, and subsequently entered into a licensing agreement under which they can still manufacture and distribute their strips. Detmers said that LifeScan has no plans to give Polymer a license to manufacture the strips.

Can-Am President Robert Oringer, said that they would continue to increase production to meet the demand for low-cost test strips for the One Touch meters. “There may be a shortage for the next few months, but at present we have a good stockpile of strips and will be able to fill the rush of orders that has already begun.”

Oringer said that “despite the confusion recent legal developments have caused, the fact is that as a result of our settlement with LifeScan, we are licensed to continue marketing clinically proven value-priced test strips for use in all One Touch meters.”

LifeScan does not support the use of off-brand strips in its meter, according to Detmers who said that the company has published clinical research showing that Can-Am’s alternative strips are not as accurate as the LifeScan strips. LifeScan has not published any such findings about the accuracy of Polymer’s strips.

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