R2 TECHNOLOGY AND ICAD ANNOUNCE SETTLEMENT OF
PATENT INFRINGEMENT SUITS
SUNNYVALE, CALIF. AND NASHUA, N.H., SEPT. 8, 2003 - R2 Technology, Inc.
and iCAD, Inc., (Nasdaq: ICAD) announced today the settlement of patent
infringement lawsuits filed by each party against the other. As a result of the
settlement, R2 will dismiss with prejudice Civil Action No. 02-472-GMS, R2
Technology, Inc. and Shih-Ping Wang v. Intelligent Systems Software, Inc., ISSI
Acquisition Corporation and iCAD, Inc., filed in the United States District
Court for the District of Delaware. iCAD will dismiss with prejudice Civil
Action No. C-03-280-B, iCAD, Inc. and Scanis, Inc. v. R2 Technology, Inc., filed
in the United States District Court for the District of New Hampshire.
Under the terms of the settlement, iCAD is granted a non-exclusive
license to the patents named in the suit filed by R2. In connection with
settlement of the suit, iCAD agreed to pay R2 an aggregate of $1.25 million,
with $250,000 deferred and payable on a quarterly basis through December, 2005.
In addition, iCAD will issue to R2 shares of iCAD Common Stock valued at
$750,000. iCAD also agreed to certain continuing royalties, which are based on
the category and configuration of products sold by iCAD. Further, iCAD has
granted R2 a partial credit against future purchase of iCAD digitizers worth up
to $2.5 million over five years to encourage R2 to purchase film digitizers
manufactured by iCAD. This partial credit is meant to provide a significant
purchasing advantage to R2, while maintaining a reasonable profit margin and
creating additional economies of scale for iCAD.
"We are pleased that our intellectual property has been validated in
the settlement of the patent suit against iCAD," said Michael Klein, president
and CEO, R2 Technology. "As we have said from the beginning, R2 welcomes
competition in the area of computer aided detection. However, we have a
significant investment in breakthrough technology designed to help detect cancer
earlier. As a result, R2 will vigorously protect its intellectual property and
fully enforce its patent rights against any form of infringement."
W. Scott Parr, iCAD's President and CEO, expressed similar
satisfaction, "This settlement provides benefits for both iCAD and R2, while
eliminating the enormous costs and distractions of continuing litigation both
parties would otherwise face. We are particularly pleased at the opportunity to
convert an adversarial relationship into one in which a mutual and continuing
business relationship may be formed." ABOUT R2 TECHNOLOGY, INC.
For more information about R2 Technology, visit www.r2tech.com.
ABOUT ICAD, INC.
For more information about iCAD, Inc., visit www.icadmed.com.
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Certain statements contained in this News Release constitute "forward-looking"
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Such forward-looking statements involve a number of known and unknown
risks, uncertainties and other factors that may cause actual results to differ
materially from such forward-looking statements. Such risks include, but are not
limited to, uncertainties associated with litigation and/or government
regulation, changes in Medicare reimbursement policies, competitive factors, and
other risks that are detailed in the Company's periodic filings with the
Securities and Exchange Commission. The words "believe", "demonstrate",
"intend", "expect", "estimate", "anticipate", "likely" and similar expressions
identify forward-looking statements. Readers are cautioned to avoid placing
undue reliance on such forward-looking statements, which speak only as of the
date the statements were made.
R2 MEDIA CONTACT: Chris K. Joseph, 408.481.5668, cjoseph@r2tech.com
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ICAD MEDIA CONTACT: R.J. Falkner & Company, Inc., Investor Relations Counsel,
(800) 377-9893 or via email at info@rjfalkner.com