Date Announced: 17 Dec 2013
Cynosure to Receive $10 Million and Royalties in Exchange for Non-Exclusive Licenses to Hair Removal Patents.
WESTFORD, Mass., Dec. 16, 2013 /PRNewswire/ -- Cynosure, Inc. (CYNO), which develops and markets laser- and light-based aesthetic treatment systems for high-volume applications, today announced that it will receive $10 million plus future royalty payments under a comprehensive settlement agreement with Tria Beauty, Inc. that ends the patent infringement litigation between Tria and Palomar Medical Technologies, which Cynosure acquired in June 2013.
"This agreement resolves the litigation involving certain Palomar patents, eliminating potential future legal expense to enforce those patents," said Michael R. Davin, Cynosure's President and CEO.
"Equally important, the settlement fully values our intellectual property rights by fairly compensating Cynosure and its shareholders for sales of products based on our proprietary hair-removal technology."
The settlement includes two non-exclusive patent license agreements between Cynosure and Tria:
• The first agreement grants Tria a non-exclusive, worldwide license to U.S. Patent Nos. 5,735,844 and 5,595,568 and foreign counterparts for consumer hair removal products. These patents were acquired from Palomar by Cynosure. As part of the agreement, Tria will pay Cynosure $8.5 million.
The first payment of $3.4 million is to be made by December 20, 2013. The second payment of $5.1 million is to be made on the earlier of September 15, 2014 or five business days following an initial public offering by Tria or a change of control of Tria. In addition, Cynosure will receive a royalty-free license to certain Tria patents outside the consumer field.
• The second agreement grants Tria a non-exclusive, royalty bearing, worldwide license to the claims of certain Palomar patents, including but not limited to U.S. Patent Nos. 8,182,473, 8,328,794, and 8,328,796, for consumer hair removal products.
These patent claims cover the hair removal products that were the subject of the second lawsuit between Palomar and Tria. As part of the agreement, Tria will pay Cynosure $1.5 million covering sales made prior to October 1, 2013. The first payment of $600,000 is to be made by December 20, 2013.
The second payment of $900,000 is to be made on the earlier of December 20, 2014 or five business days following an initial public offering by Tria or a change of control of Tria. In addition, Cynosure will receive a 3% royalty on U.S. sales made after October 1, 2013 through September 30, 2021 with respect to U.S. Patent Nos. 8,182,473, 8,328,794, and 8,328,796 or through the expiration of any other licensed Palomar patent if such expiration is after September 30, 2021, unless the second agreement is terminated earlier.
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