Court Rejects Patent Deal Between Inamed, J&J; Unit

Inamed Corp. said Tuesday that a U.S. District Court rejected an agreement the company and a Johnson & Johnson unit made in 2000 to settle a patent dispute over Inamed’s “Lap-Band” obesity treatment.

The patent and royalty dispute now moves to the pretrial discovery phase, said Peter Nicholson, a spokesman for Inamed. The company said it would appeal.

The court determined that the 2000 agreement Inamed made with Dr. Lubomyr Kuzmak, who holds patents he says cover the Lap-Band’s technology, was unenforceable. Kuzmak later sold some of his patent rights to Ethicon, a Johnson & Johnson unit, Nicholson said.

“We think there are very strong grounds for appeal,” Nicholson said. “At the same time we are vigorously pursuing the patent litigation” to challenge Kuzmak’s intellectual property rights, he added.

The Food and Drug Administration approved the Lap-Band last year. The obesity device is an inflatable band looped around the upper stomach during minimally invasive surgery.

The company collaborated with Kuzmak while it was researching obesity treatments and both Kuzmak and Inamed have filed patents they say pertain to the Lap-Band device, Nicholson said.

Lap-Band sales for the second half of 2001 were about $3.6 million in the U.S., Nicholson said.

Inamed sells the device to doctors for about $3,000. Under the agreement rejected by the court, the company would pay Kuzmak or Ethicon about $36 for each model sold, Nicholson said.

Shares of the Santa Barbara-based maker of breast implants and other plastic-surgery products closed off 95 cents at $30.23 on Nasdaq. The company announced the decision after U.S. markets closed.