GE, Image Analysis end QCT legal dispute

Last month's settlement of the quantitative computed tomography(QCT) patent dispute between Image Analysis and GE Medical Systemstransformed the two competitors into future partners. The firmsreached a verbal agreement to form an alliance, according to BenA. Arnold, Image Analysis president.

Arnold sued GE in October 1990, alleging patent infringementin the design of a phantom used in converting standard CT systemsto measure bone mass. QCT competes with dual-energy x-ray absorptiometry(DEXA) systems in the diagnosis of osteoporosis.

Image Analysis of Irvine, CA, won a preliminary injunctionfrom Santa Ana, CA, Federal District Court in March prohibitingGE from marketing, using or selling its QCT phantom (SCAN 3/27/91).The ruling withstood GE's subsequent challenge.

"With that, it became clear to both sides that we oughtto be friends," Arnold said.

GE agreed to stop selling its own QCT systems in the U.S.,Japan and Europe, offering Image Analysis phantoms and softwareinstead, he said. A GE spokesperson verified that a preliminaryagreement had been reached. GE is withholding further commentuntil terms are finalized.

The settlement will be pivotal for the future of Image Analysis,a $3-million-a-year company. Domestic sales of the firm's $15,000QCT system slumped after GE's product was introduced in 1988,Arnold said.

Image Analysis has sold 700 systems since its formation in1984. It is responsible for the lion's share of the internationalinstalled base, according to Arnold. Siemens may have sold over500 systems, while GE's share is estimated at 300 to 400 systems.

"As of right now, I'm going to be offering my productto GE, and they're postponing their project worldwide. I'm reallyhappy about that," Arnold said.