Gyrus to fight patent infringement claim

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Gyrus Group, the Wokingham-based biotechnology and medical devices developer, is set to defend itself against a claim for patent infringement made against it yesterday by its US rival Arthrocare Corporation. The claim relates to several Gyrus products including jPlasmaKnife and Plasma Trissector, developed in order to simplify keyhole surgery procedures.

Gyrus is thought to have been approached by Arthrocare several weeks ago and has been aware of a potential claim for some time. Financial details of the claim were not made public.

The UK group released a strongly worded riposte to the claim, unusual in patent infringement cases. In a statement made to the Stock Exchange, Gyrus said that the claim was "entirely without merit" and that it would "defend itself vigorously". Broker Investec, not Gyrus's house broker, told investors that the claim is "at best tenuous" and "opportunistic".

Arthrocare says that Gyrus has infringed its patent which aides keyhole surgery by using a saline solution as a conductive fluid. Analysts believe that it has not infringed any patent because Gyrus's technology uses fluids found naturally in the human body.

In a note to clients, broker Numis Securities said: "Litigation is not unusual in the medical device industry and the claimant has not applied for an immediate injunction. We believe the timing is no coincidence given Gyrus's launch of PlasmaCision into a resurgent ENT business unit for tonsillectomies. The claimant has annualised sales of $50m (£24m) in tonsillectomy which we believe PlasmaCision products can compete directly."

Although shares in Gyrus Group were sharply lower in early trade, analysts also pointed out that the revenue generated for Gyrus through these products amounts to less than 10 per cent of its total revenue. By the close of trade the shares had largely recovered their initial losses and closed just 3.25p worse at 400p.