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Biotech / Medical : VISX -- Ignore unavailable to you. Want to Upgrade?

To: Andrew Abrams who wrote (563)	5/13/1998 12:07:00 AM
From: John Binford, Jr.	Read Replies (1) \| Respond to of 1754

During Visx's 1Q conference call Mark Logan had an excellent reply concerning the FTC alleged patent fraud. I'm not restating Logan's response as I don't have a written account of it. Here is my view of the patent issue: For one thing the FTC and the Patent offices are separate departments of Government, and the FTC should have no authority to challenge the Patent office's decisions six years after the fact. The Patent office was totally aware of the interference decisions and the disclosure of the prior art. Experts were brought in as consultants to help to resolve the patent interference claims at the time and the issues were properly worked with the patent office. And the patents in question total 5 out of the 41 U.S. patents held by Visx covering LVC. Even if the patents were lost, which is not likely, Visx still has fundamental patents covering LVC that other manufacturers infringe. And Visx will still be able to collect fees on their own machines. The patent issue should have little impact on Visx even if the patents were not valid. The patents in question are only a subset of the Visx patent portfolio. Visx is working the issues with the help of their local representatives. Hopefully, with the help of sane government servants, the rabid trophy hunting unethical FTC lawyers can be put back in the hole where they belong. My belief is the FTC position is they didn't want Visx to get the "credit" for breaking up PPP, so they quickly file a complaint. And they state outrageous claims ($30 million in overcharging, no competition in equipment sales, and patent fraud) to put the heat on Summit and Visx to capitulate into agreeing to breakup PPP. Many if not most royalty fees charged by companies are fixed in dollars a on per item basis. The fact that Summit and Visx got together to decide how to split the fee is just the way it had to be. Summit and Visx have blocking patents. Neither could bring LVC to the market without the other's patents. So they had to get together or the public would still be without LVC. Remember, LVC is an elective procedure. People can choose whether or not to have it. Visx and Summit could charge $5000/eye in royalties if they want. This is a free country. You don't have to get the procedure if you consider the price too high. The inventors can set their fee. How much of the cost of the new Viagre pill is manufacturing? And how much is a royalty? As with drugs, LVC patents expire. The manufactures only have a fixed window to collect on the fundamental LVC patents that cover all manufacturers. In the long run, each company will continue to charge a per use fee based on the patents for their new technology, but the fundamental patents will expire and Visx and Summit will not get a fee from the other manufacturers. So, since this is a free country and it does have laws to protect the inventor's inventions, the FTC is way overstepping their bounds with these ludicrous charges. But then again, I believe the FTC would settle for PPP to be broken up. Which for Visx would be a very good thing. The fee would also stay at $250/use or very near it.