Feb 28 2007
IntraLase Corp. has announced that it has entered into an agreement with Escalon Medical Corp. to settle all outstanding disputes and litigation between the parties.
Under the settlement agreement, IntraLase will make a lump sum payment to Escalon of $9.6 million, in exchange for which all pending litigation between the parties will be dismissed, the parties will exchange general releases, full ownership of all patents and intellectual property formerly licensed from Escalon will be obtained by IntraLase, and all IntraLase obligations under the parties' license agreement will terminate. In addition, the payment will satisfy any outstanding royalties owed or alleged to be owed by IntraLase to Escalon, including disputed royalties, fourth quarter 2006 royalties and all future royalties.
A portion of the settlement will be expensed in the fourth quarter of 2006, in accordance with FASB No. 5, Accounting for Contingencies and FASB Interpretation No. 14, Reasonable Estimation of the Amount of a Loss, which guides that the expensed portion of a settlement entered into after year end, but before issuance of the annual financial statements, is accrued in the prior year.
"With this settlement our disputes with Escalon are completely resolved," said Robert J. Palmisano, President and Chief Executive Officer of IntraLase Corp. "We are pleased to put this matter behind us and believe that sole ownership of the Escalon patents will further strengthen our already robust intellectual property portfolio."