SonoSite fires legal shot across bow of ultrasound industry

Editor's Note: This is the first in a two-part series examining the significance and reasons behind the legal battle between hand-carried ultrasound developers SonoSite and Zonare Medical Systems.

In late February,SonoSite - the first company to commercialize a modern hand-carried ultrasound unit - filed a lawsuit alleging patent infringement in the U.S. District Court for the Central District of California, Southern Division. This lawsuit, while specific to Zonare Medical Systems, holds extraordinary significance for all developers of hand-carried ultrasound systems, putting the industry on notice that SonoSite will vigorously defend its intellectual property.

"It's important in this industry that the other manufacturers are aware that we intend to enforce our intellectual property," SonoSite vice president and general counsel Kathy Surace-Smith told DI SCAN in an exclusive interview. "If they are not already aware of it, I think this lawsuit will do that."

Zonare's response to the lawsuit, a counterclaim filed last week alleging infringement by SonoSite, raises the profile of the intellectual property behind hand-carried ultrasound even further. Zonare president and CEO Don Southard said in an exclusive interview with DI SCAN that he believes the SonoSite suit has no merit, as his company's z.one technology is fundamentally different from that of any competitor.

"But in looking at our response to this claim, as we reviewed our own patent portfolio, we realized there was a patent which is being infringed on by them," he said.

The stakes are very high, not just for vendors but also providers. Industry engineers have been miniaturizing ultrasound scanners for the better part of a decade, packing more and more power into ever smaller packages. Ultrasound analyst Harvey Klein believes GE Medical Systems, SonoSite, and Zonare will drive hand-carried ultrasound to $1 billion in worldwide revenues in the next five years (DI SCAN, 2/7/07, Hand-carried ultrasound heads for over $1B in five years). But that growth could be jeopardized if the battle over IP distracts SonoSite and Zonare or - worse yet - spills into the rest of the industry.

Some of the anticipated growth in hand-carried ultrasound will come from increasing sales in expanding markets, Klein said. Much of it, however, will come at the expense of cart-based sales, as miniaturization boosts the performance of hand-carried systems to compete more effectively with their larger kin.

At present, the litigation filed by SonoSite and the counterclaim filed by Zonare are relatively confined. If the past is any guide, however, this status may be short-lived. Patent fights can spread to other parties with unpredictable results.

The current situation erupted when SonoSite filed its claim last month against Zonare, seeking unspecified monetary damages and a court injunction against future infringement of patent number 5,722,412. The underlying premise of this patent, which addresses portable ultrasound systems weighing less than 10 pounds, demands the attention of the rest of the industry, as well as Zonare.

"There are certain characteristics spelled out in the patent," Surace-Smith said. "But it is also very broad and probably would cover most hand-carried digital ultrasound units weighing less than 10 pounds."

Surace-Smith noted that SonoSite monitors the market for other products that might violate its patents, and it will take appropriate action, if necessary.

"Our patent portfolio is a key asset for us, the foundation of the company in many ways, and we have to defend it or it ceases to be valuable," she said.

Three weeks after SonoSite filed its suit against Zonare, that company, the developer of the first ultrasound platform that converts from a cart-based to a hand-carried configuration, filed its response in the same court, alleging infringement by SonoSite of patent number 6,980,419, entitled "Portable Ultrasound Unit and Docking Station."

As in the case of the SonoSite patent, Zonare's patent spells out many specific criteria yet casts a wide net.

"Our patent talks about a portable ultrasound unit and associated docking cart," Southard said.

Like the litigation filed by SonoSite, Zonare's lawsuit asks for monetary damages and seeks an injunction against future infringement.

It is the way of the modern world of medicine, Southard laments.

"Many companies in the med tech space have pending litigation, not just IP but other litigation, as well," he said. "Unfortunately, it's the way business works these days."