Luther Medical Patent Suit Settled : * Litigation: Two competitors agree to stop making and selling a device invented by the Tustin company.

Two competitors of Luther Medical Products Inc. have settled a 3-year-old patent lawsuit by agreeing to stop making and selling a medical device invented by Luther.

Tustin-based Luther Medical had sued Gesco International of San Antonio and K-Tube Corp. of San Diego in federal court in San Diego for patent infringement. The companies now have agreed to quit marketing the product--a special needle used in medical catheters--by July 10.

The so-called “splittable needle” is used to insert hollow tubing, called catheters, into patients for intravenous feeding. Once the catheter is in the body, the needle peels off so it can be discarded. The splittable needles are designed to protect health care workers against accidental needle pricks--a concern that has grown increasingly important because of the AIDS epidemic.

Financial terms of the settlement were not disclosed.

Luther Medical Chairman Ronald Luther wasn’t satisfied with the settlement.

“Anything short of incarceration is too low,” said Luther, who developed the needle. “. . . If someone steals your car, you don’t charge the guy 5% for the use of it. You lock the bastard up.”

In the lawsuit, filed almost three years ago, Luther Medical claimed that its needle was used in Gesco’s Per-Q-Cath catheter device. The suit claimed that Gesco originally got the needles from Luther Medical but began making the identical product through an agreement with K-Tube, a hypodermic-needle manufacturer.

Gesco has captured an estimated 60% to 70% share of the market for “stickless” catheter needles, Luther said. Luther Medical has only about 10%, he said.

Meanwhile, Luther has begun marketing a new product that incorporates the splittable needle with its own catheter device. Last month, the company signed a contract to supply Pharmacia Deltec of St. Paul, Minn., with at least 20,000 catheters in the first year of a five-year agreement. Luther estimated that the deal would generate sales of $780,000 the first year, with revenue doubling by the third year.

Gesco President George E. Sinko would not comment on the settlement, saying he was not certain that the details were final.

“We haven’t received anything yet,” he said. “I don’t know what is good, bad or indifferent.”

However, he said Gesco had planned to stop using the needle anyway and will begin marketing a new product, called the Excalibur Introducer, in about a month.

“There is no sense in litigating when it is a dying type of product,” Sinko said. “The damn thing’s obsolete.”

Sinko called his company’s new product “safer and superior” because it will remove the needle before the catheter is inserted in the patient.

“I guess it is obsolete to them because they can no longer use the needle,” Luther said.