Judge puts DexCom patent case on hold, shares soar

CHICAGO, Aug 19 (Reuters) A US federal judge has delayed a decision in a patent dispute between Abbott Laboratories Inc. and DexCom Inc.

over patents for a device to help diabetics monitor their blood glucose levels, said DexCom.

News of the delay sent shares of San Diego, California-based DexCom up more than 15 per cent yesterday. Abbott's shares dipped about 1 per cent.

Abbott, which is developing a continuous glucose monitor, last year had asked the court to decide whether DexCom's device violated four of Abbott's patents. DexCom had asked the court to dismiss Abbott's lawsuit.

A judge from the US District Court for the District of Delaware on Thursday put the case on hold until the US Patent and Trademark Office could reexamine Abbott's patents.

DexCom said it expects the court's rulings will suspend further activity in the litigation until late next year, or until the reexamination process is completed.

DexCom said the court noted that granting the stay would ''simplify the issues and focus the litigation,'' in the event that some or all of the four patents were found to be invalid.

Abbott spokesman Jonathon Hamilton said the company was pleased that the court had denied DexCom's motion to dismiss the patent infringement portion of the case.

''Abbott believes DexCom's product infringes our patents regarding continuous glucose monitoring technology, and we will vigorously protect our intellectual property,'' Hamilton said.

DexCom, which went public in April 2005, launched its continuous glucose monitor, its first product, in March.

Abbott is developing a similar product. The devices are designed to help diabetics better control fluctuations in their blood sugar levels by providing more frequent glucose readings than current finger-stick tests.

The court also granted DexCom's motion to disallow Abbott's amended complaint in which Abbott had sought to add three patents to the litigation.

Abbott subsequently filed a separate action in the US District Court for the District of Delaware alleging patent infringement of those same patents.

DexCom said it will fight the action and has filed requests with the patent office to reexamine each of the three patents cited by Abbott.

''It has always been our view that Abbott's legal tactics are merely an attempt by a much larger and established company to intimidate and distract DexCom, a small company, from commercializing our STS Continuous Glucose Monitoring System,'' said Andy Rasdal, DexCom's president and chief executive, in a statement.

Medical device maker Medtronic Inc., a major player in the diabetes device market, also makes a continuous glucose monitor.

DexCom shares were up 14.4 per cent or 1.76 dollars to 13.98 dollars in afternoon trading on Nasdaq; they soared as high as 14.35 dollars earlier. Abbott shares were down 39 cents or 0.8 per cent to 48.74 dollars on the New York Stock Exchange after trading as low as 48.64 dollars earlier.

REUTERS MS RAI0951