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PHT, invivodata, CRF Settle Lawsuit

By Mark D. Uehling

May 12, 2006 | PHT, the Boston-based electronic patient diary company, has settled two patent lawsuits. The first salvo in the legal battle was fired in January 2004, and the case was just about to go to trial when the settlement was announced early in April.

Phil Lee, PHT’s president and CEO, sounds gratified that he can now give a little less of his time to legal matters. “PHT was really trying to get compensated for its intellectual property,” Lee says. “At the end of the day, we felt we accomplished that. We never wanted to put anyone out of business or cause anyone pain.”

“This does clear the way for all of us to be solving customer issues and not arguing about intellectual property,” Lee adds. “It should help the electronic patient-reported outcome (ePRO) industry. Adoption should see a nice little acceleration as a result of this.” As a matter of record, PHT says its technology has been used in 210 trials. In 2005, the company reports, its revenues surged 72 percent, thanks in part to 17 new clients.

It turns out that one of PHT’s competitors, Pittsburgh’s invivodata, had countersued PHT. Both those cases are now dropped; PHT and invivodata have paid-up licenses to each other’s patents. Separately, the Finnish e-diary company CRF also settled with PHT.

No one is saying what sort of money changed hands. It could be millions or even zero if PHT was worried about how it would fare in the next stage of the legal fight. Or it’s possible that $750,000 was in the ballpark for these three fast-growing e-diary companies.

One of the plaintiffs in the PHT case, North Carolina’s etrials, settled with PHT last year. Once again, there was no mention of the settlement’s dollar amount. But in a recent SEC filing, without mentioning PHT or patient diaries or Palm or anything identifiable, etrials disclosed certain legal costs.

It’s intriguing to wonder if these costs may be the PHT settlement, or some other legal matter. Here’s a quote from the etrials statement: “The 2005 net loss was impacted by the legal costs for a patent infringement lawsuit settled in 2005 of approximately $420,000, lawsuit settlement and quarterly royalty costs of approximately $320,000.”

There was also relief outside PHT and etrials. “We are very pleased with the settlement and are looking forward to growing both our business and the ePRO market in the coming year,” says Doug Engfer, founder, president and CEO of invivodata. “This is good news for both companies and, more importantly, for customers who require high-quality data from the subjects in their clinical trials.”

At CRF, CEO Pam McNamara had similar sentiments. “We are very pleased with this settlement,” says McNamara, who is based out of the company’s Waltham, Mass., office. “Putting these lawsuits behind us is a win for the whole e-diary sector. We are now all able to fully focus our efforts on growing our industry and meeting the needs of our pharmaceutical clients, clinical sites, and patients around the world.”

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