R2 Technology, iCAD settle counter patent infringement suits

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Computer-aided detection (CAD) technology firms  R2 Technology Inc. and iCAD Inc. this week came to a settlement in their patent infringement lawsuits against each other.

Under terms of the agreement, R2 and iCAD both will dismiss "with prejudice" the civil actions cases against each other. iCAD also will receive a non-exclusive license to the patents named in the suit filed by R2 against iCAD. In addition, iCAD will pay R2 a total of $1.25 million -- with $250,000 deferred and payable on a quarterly basis through December 2005 - and will issue $750,000 worth of iCAD common stock to R2. iCAD also has agreed to certain continuing royalties, which are based on the category and configuration of products sold by iCAD. iCAD has granted R2 a partial credit toward future purchase of iCAD film digitizers worth up to $2.5 million over five years. The partial credit, the companies said, is meant to provide a "significant purchasing advantage to R2, while maintaining a reasonable profit margin and creating additional economies of scale for iCAD."

R2 President and CEO Michael Klein said the company is "pleased" that its intellectual property "has been validated in the settlement of the patent suit against iCAD."

Meanwhile, W. Scott Parr, iCAD's President and CEO, added that the settlement "provides benefits for both iCAD and R2, while eliminating the enormous costs and distractions of continuing litigation both parties would otherwise face."

The Sunnyvale, Calif. company filed its patent infringement suit against iCAD in June 2002, alleging that iCAD infringed on R2's products scan, process and display images. iCAD, based in Nashua, N.H., filed a counter patent infringement suit against this last June.