Drop Visx Patent Fraud Case, FTC Lawyers Advise Agency

The Federal Trade Commission should drop its patent fraud complaint against Visx Inc. because the government is expected to grant the largest U.S. maker of vision-correction lasers an amended patent that will make the issue moot, the agency’s lawyers have recommended.

The FTC lawyers said in documents submitted to the commissioners this month that, although they still believe Visx acted improperly, the U.S. Patent and Trademark Office is likely to grant the Santa Clara, Calif.-based company a revised patent to supersede the patent at the heart of the complaint. Visx has denied allegations of patent fraud.

The case involves excimer laser technology, a method of cutting the cornea that’s crucial to the popular Lasik vision-correction procedure.

Administrative Law Judge Stuart Levin dismissed the FTC patent fraud case in June, rejecting the agency’s allegations that Visx violated antitrust laws by withholding crucial information from U.S. patent examiners in winning the patent that has fueled the company’s success.

The FTC had said it would appeal Levin’s ruling.

On the day of Levin’s ruling, Visx shares hit what was then an all-time high. Visx shares fell 75 cents Wednesday to close at $50.88 on Nasdaq. They are down 51% from their 1999 peak.

Although the patent office agreed with the FTC that the contested patent claims were invalid, the office is reviewing Visx’s revised claim after the company submitted new information in November, the documents said.

The documents didn’t indicate whether the FTC might file a new complaint if Visx gets the revised patent. In what they described as the “unlikely” event that Visx doesn’t get the new patent, FTC lawyers recommend that the commission either proceed with its current complaint or defer further action.