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Palomar Successful in U.S. Patent Office Re-Examination of Hair Removal Patent

Palomar to Seek Re-Start of Patent Infringement Lawsuit Against Candela

BURLINGTON, Mass., June 15 /PRNewswire-FirstCall/ -- Palomar Medical Technologies, Inc. (Nasdaq: PMTI), a leading researcher and developer of light-based systems for cosmetic treatments, announced today that the U.S. Patent and Trademark Office ("the Patent Office") has confirmed the validity of 56 claims in the re-examination of U.S. Patent No. 5,735,844 ("the '844 patent"), entitled "Hair Removal Using Optical Pulses".

Rejecting Candela's and another company's arguments to the contrary, the U.S. Patent Office confirmed that claims 1-3, 6-8, 11, 17-20, 27, 28, 30, 32 of the '844 patent are valid and patentable. As part of the re-examination process, Palomar added 26 new claims (33-59) to the '844 patent, and the Patent Office also confirmed these new claims as valid and patentable. The Patent Office rejected only independent claim 12 and related dependent claims 13-14 as unpatentable. Palomar has cancelled these claims 12-14 from the '844 patent in order to expedite the re-examination proceeding. Claims 4, 5, 9, 10, 15, 16, 21-26, 29 and 31 are not under re-examination. Consequently, all currently pending claims are valid.

Palomar and Massachusetts General Hospital ("MGH") are suing Candela for willful infringement of the '844 patent in the U.S. District Court for the District of Massachusetts. On November 17, 2008, the lawsuit was stayed by the Court pending the outcome of the re-examination proceeding of the '844 patent and the re-examination proceeding of U.S. Patent No. 5,595,568 ("the '568 patent"). Palomar will seek a re-start of the lawsuit given the allowance of all currently pending claims in the '844 patent.

The re-examination of the '568 patent is ongoing and no office action has yet been issued.

This light-based hair removal patent family has already been licensed to ten competitors and is also the subject of a patent infringement lawsuit against Syneron, Inc. in the United States.

Chief Executive Officer Joseph P. Caruso commented, "We are very pleased with the office action issued by the U.S. Patent Office as we have always believed in the strength of this patent family. We are especially pleased with the speed with which this re-examination was handled. Defendants often request re-examination purely to cause long delays of patent infringement lawsuits. We look forward to re-starting the patent infringement lawsuit against Candela as quickly as possible."

Mr. Caruso continued, "Palomar exclusively licensed the '844 and '568 patents from Massachusetts General Hospital in 1995. Palomar was the first company to receive FDA clearance and bring a high powered light-based hair removal system to market. Palomar was later the first company to receive FDA clearance for permanent hair reduction and the first company to receive over-the-counter clearance from the FDA for a hair removal device. After establishing light-based hair removal as a viable treatment option, many competitors began to use our technology. Several properly took licenses while others opted not to at their own risk. Unauthorized taking of technology is what the patent system is designed to prevent. We intend to continue our aggressive patent enforcement strategy both to protect our own investment in research and market development as well as the investment of our competitor licensees."

Patricia Davis, Palomar's General Counsel and a registered patent attorney, commented, "We are pleased but not surprised by the U.S. Patent Office's position which supports our belief in the strength of the '844 patent. The cancellation of claims 12-14 will have no effect on our current licensees or on our ability to enforce and license the '844 patent. Importantly, the addition of 26 new claims to the '844 patent further strengthens our patent position. We remain confident in our ability to successfully enforce the '844 patent against both Candela and Syneron, Inc."

Ms. Davis continued, "If Palomar prevails at trial, Candela and Syneron may be ordered to pay significant amounts in damages for past sales and ordered to stop selling infringing products. Palomar also alleges that Candela's and Syneron's activities constitute willful infringement. If Palomar prevails on such claims, Candela and Syneron could be forced to pay up to triple the amount of the original damages assessment and Palomar's legal fees."

About Palomar Medical Technologies Inc: Palomar is a leading researcher and developer of light-based systems for cosmetic treatments. Palomar pioneered the optical hair removal field, when, in 1997, it introduced the first high-powered laser hair removal system. Since then, many of the major advances in light-based hair removal have been based on Palomar technology. In December 2006, Palomar became the first company to receive a 510(k) over-the-counter (OTC) clearance from the United States Food and Drug Administration (FDA) for a new, patented, home use, light-based hair removal device. OTC clearance allows the product to be marketed and sold directly to consumers without a prescription. There are now millions of light-based cosmetic procedures performed around the world every year in physician offices, clinics, spas and salons. Palomar is testing many new and exciting applications to further advance the hair removal market and other cosmetic applications. Palomar is focused on developing proprietary light-based technology for introduction to the mass markets. Palomar has granted The Procter & Gamble Company a non-exclusive License Agreement to certain patents, technology and FDA documents related to the home-use, light-based hair removal field for women. In addition, Palomar has an exclusive development and license agreement with Johnson & Johnson Consumer Companies, Inc., to develop and potentially commercialize home-use, light-based devices for reducing or reshaping body fat including cellulite, reducing the appearance of skin aging, and reducing or preventing acne.

For more information on Palomar and its products, visit Palomar's website at To continue receiving the most up-to-date information and latest news on Palomar as it happens, sign up to receive automatic e-mail alerts by going to the Investor Relations' section of the website.

This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on the Company's current expectations, plans, intentions, beliefs or predictions. These forward-looking statements are neither promises nor guarantees, but involve risk and uncertainties that may individually or mutually impact the matters herein, and cause actual results, events and performance to differ materially from such forward-looking statements. These risk factors include, but are not limited to, results of future operations, technological difficulties in developing or introducing new products, the results of future research, lack of product demand and market acceptance for current and future products, the effect of economic conditions, challenges in managing joint ventures and research with third parties and government contracts, the impact of competitive products and pricing, governmental regulations with respect to medical devices, including whether FDA clearance will be obtained for future products and additional applications, the results of litigation, including patent infringement lawsuits, difficulties in collecting royalties, potential infringement of third-party intellectual property rights, factors affecting the Company's future income and resulting ability to utilize its NOLs, and/or other factors, which are detailed from time to time in the Company's SEC reports, including the report on Form 10-K for the year ended December 31, 2008 and the Company's quarterly reports on Form 10-Q. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

    Kayla Castle
    Investor Relations Manager
    Palomar Medical Technologies, Inc.

SOURCE Palomar Medical Technologies, Inc.
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