I'll bet on Olympus to kill GIVN market hold in about 2 years from now. GIVN is WAY overpriced.
YOQNEAM, ISRAEL--(MARKET WIRE)--May 23, 2006 -- Given Imaging (NasdaqNM:GIVN - News) announced today that it has received notice that Olympus Corporation and its subsidiaries Olympus Medical System Corporation and Olympus America Inc. filed a complaint in the United States District Court for the Eastern District of Pennsylvania against Given Imaging Ltd. and Given Imaging, Inc. for alleged infringement by Given Imaging of U.S. Patent 5,010,412 entitled "High Frequency, Low Power Light Source for Video Camera." The '412 patent, which expires in December 2008, was bought by Olympus Medical from The Boeing Company in July 2005.
In November 2002, Boeing approached Given Imaging offering to grant it a license to the '412 patent. Given Imaging believes that its PillCam capsule neither infringes nor utilizes any invention claimed under any valid claim in the '412 patent. Following communications between Boeing and Given Imaging, Boeing abandoned its pursuit of this issue early in 2004.
In the same document, Olympus seeks a declaratory judgment that its capsule endoscopy system, which it plans to sell in the United States, does not infringe Given Imaging U.S. Patent 5,604,531. Olympus has not yet completed its clinical trials for its product nor does it have the FDA clearance necessary to market its product in the United States.
The filing by Olympus follows a decision of the United States Patent and Trademark Office (USPTO) on April 7, 2006 confirming the validity of 13 of the original 17 claims of Given Imaging's patent '531. Given Imaging believes this complaint is without merit and will take the necessary actions to protect its interest.
Given Imaging does not expect its customers to be affected by the Olympus complaint.
Given Imaging has built a broad patent estate including over four hundred patent applications worldwide and forty three issued patents in the United States, Europe, Japan, Australia, South Korea and Israel. These patents and patent applications include thousands of claims addressing various aspects of current and future capsule endoscopes and capsule endoscopy systems as well as other technologies.
"We were aware of this patent from Boeing which we addressed in 2003 that expires in 2008. We are confident about the strength of our broad IP portfolio and our leadership position," said Homi Shamir, president and CEO of Given Imaging.
About Given Imaging
Given Imaging is redefining gastrointestinal diagnosis by developing, producing and marketing innovative, patient-friendly products for detecting gastrointestinal disorders. The company is developing a complete line of PillCam(TM) video capsules for detecting disorders of the gastrointestinal tract. The company's technology platform is the Given� System, featuring the PillCam video capsule, a disposable, miniature video camera contained in a capsule, which is ingested by the patient. The PillCam SB capsule is a naturally ingested method for direct visualization of the entire small intestine. It is currently marketed in the United States and in more than 50 other countries and has benefited more than 340,000 patients worldwide. The PillCam ESO video capsule, which provides visual examination of the esophagus, has been cleared for marketing by the FDA. Additional capsules for visualization of the stomach and colon are under development. Given Imaging's headquarters, manufacturing, and R&D facilities are located in Yoqneam, Israel; it has direct sales and marketing operations in the United States, Germany and France, and local offices in Japan, Spain, and Australia.
The article infers that Olympus does not want to challenge Given in the USA unless and until it can establish a patented right to market its technology. I have recently read a number of news releases about Given which I would characterize as bad news. This article does not appear to be one. Further, if Boeing chose not to enforce the patent in 2002-2004, the case sounds weak.
Something to think about.Patents are a barrier to competition.Given paid 30 mil$ to Rafael in 1998 for Exclusive rights for their assigned patent.Now Olympus realizes that Given has openly said that they will exercize that exclusivity to keep others out.Another way of saying,we will charge you 50 mil$ to allow entry.Olympus first asked for ReExam of Given patent on 12/30/2003 and 4 key claims were rejected on 4/3/2006.In Israel,recently patent dept.ruled that where an independent claim is disqualified,all the dependent claims are disqualified as well.(Michael Factor,an Israel patent attorney considers it WRONG). I think that Olympus is trying to remove this barrier out(save paying 30 to 50 mil$ to Given)and willing to spend 3 to 10 million$ in this lawsuits.This means that Given will have to spend on lawyers also--short term extra legal expenses that lowers profit margins. Another barrier is patent# 7039453--if Olympus gets that,then Given loses out.Hope Given people understand the recent Ebay vs MercExchange ruling(Ebay was using "Buy IT NOW" button of MercExchange)--judge gave 29.5 mil.$ plus restraint on using the patent which is being reconsidered based on Supreme Court guidelines.This case is going on for over 4 years.Everyone knows the arrogance of Research In Motion(Blackberry) against NPT and the outcome. First Volley of fire was ReExam(small cost for Olympus),2nd Volley of attack is this lawsuit(big money involved).Olympus is gathering other armament to attack if this lawsuit fails.Olympus will keep attacking Given with their big money.
Correction: I meant Olympus will pay the legal costs of 3 to 5 million$.Wrote Boeing instead of Olympus. Olympus has a big stake.Boeing got its fees upfront for Exclusivity to Olympus. Boeing is out of the scene.Their patent belongs to Olympus.
Regarding why Boeing did not enforce?These days legal fees for a minor case run over 3 million$.That is what top lawyers charge as a minimum and it takes 2 years or more.(source Wall street Journal article). Boeing sold the patent to Olympus and Boeing will pay the legal costs.Olympus lawyers Kenyon& Kenyon are top in this country.They succeeded in disclaiming the 4 claims from Given's owned patent. Olympus is fighting on Patents where they are weak.Olympus,I am sure is trying to strengthen its position and I would not be surprised if they get Exclusive to patent# 7039453 which is pretty broad.Remember these inventors claimed 157 claims and Paterra.com had this application translated in Japanese and Chinese.I saw it on Google search website.You can read the original 157 claims by reading the application-the inventors seem to be genious.USPTO took 5/6 years and finally approved 17 claims--first 12 plus claim 32 and claims 79 to 83.THIS in my judgement is the most important patent--and if Olympus gets it,then Given's Patent trump card becomes weak.Olympus can outspend Given.Japanese take the long view and win.That is how Sony,Toyoto,Olympus,Fuji won against RCA/Zenith,GM,Kodak.This lawsuit is the opening card of their intention to remove the Given's dominance in Patents.That is why they are willing to spend 3 to 5 million$ on lawyers.