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California company Varian to pay Pitt $35M to settle patent infringement lawsuit

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Sunday, April 13, 2014, 9:00 p.m.

A California company agreed to pay the University of Pittsburgh $35 million to settle a patent infringement lawsuit, officials said.

Pitt sued Varian Medical Systems Inc. of Palo Alto in 2007, claiming the company infringed on a university patent for radiotherapy equipment used in cancer treatment.

Varian turned a profit of almost $1 billion on related products during a 10-year period, court documents show.

A federal judge in April 2012 ordered Varian to pay Pitt $73.6 million plus interest, legal fees and ongoing royalties for patent infringement.

“Varian will pay a lump sum of approximately $35 million to fully settle this matter,” the company said in a release.

Pitt officials said they were happy with an appeals court decision last week that resolved the case.

“The university looks forward to receiving a final damage award in a case which has been in litigation for seven years,” said spokesman Ken Service.

In the original suit, Pitt alleged that Varian infringed on two patents pertaining to the university's image-guided radiology technology. It uses X-ray imaging that allows physicians to spot tumors and direct radiation more accurately. One patent deals with equipment that responds to patient movement during diagnosis and treatment, and the other allows the matching of X-ray images with previous images.

The settlement was contingent on a federal appeals court ruling issued last week, which upheld the judge's decision, but said the infringement was not “willful.”

Under the settlement, Varian will not owe any royalty payments and Varian customers will continue to be able to use the products, company officials said in the statement.

The lawsuit was the latest in a growing string of patent victories for universities.

A jury in 2013 awarded Carnegie Mellon University $1.17 billion because a Bermuda-based computer chip manufacturer, Marvell Technology Group, appropriated CMU research for a chip used in high-speed drives.

The University of Minnesota won a 1999 patent licensing case that was expected to generate $300 million for the school, and a federal jury in 2008 ordered Hewlett-Packard to pay New York's Cornell University $184 million in an infringement case.

The Bayh-Dole Act, a 1980 federal law designed to funnel the fruits of federally funded research to the marketplace, stipulated that money from licensing and royalties should flow to the researcher and the university to encourage innovation and fund research.

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