Healthcare Industry News:  Procter & Gamble 

Devices Litigation

 News Release - August 10, 2006

Palomar Sues Candela for Patent Infringement

BURLINGTON, Mass., Aug. 10 (HSMN NewsFeed) -- Palomar Medical Technologies, Inc. (Nasdaq: PMTI ), a leading researcher and developer of light-based systems for cosmetic treatments, announced that yesterday it filed a lawsuit in the U.S. District Court for the District of Massachusetts against Candela Corporation (Nasdaq: CLZR ) for patent infringement. In this lawsuit, Palomar has accused Candela's light-based hair removal systems, including the GentleLase and GentleYag, of infringing U.S. Patent No. 5,735,844 ("the '844 Patent"). Palomar has an exclusive license to the '844 Patent from the General Hospital Corporation in Boston, Massachusetts. The patent claims asserted against Candela in this lawsuit include the same claims that Palomar successfully asserted against Cutera, Inc. (Nasdaq: CUTR ) as well as additional patent claims.

Palomar is seeking an injunction against further infringement, as well as monetary damages. If Palomar prevails at trial, Candela may be ordered to pay tens of millions in damages for past sales and ordered to stop selling infringing products. Palomar also alleges that Candela's activities constitute willful infringement of the '844 Patent. If Palomar prevails on such a claim, Candela could be forced to pay up to triple the amount of the original damages assessment.

Patricia Davis, Senior Vice President and General Counsel of Palomar, commented, "For over 7 years, Palomar has sent Candela letters notifying Candela that its products need a license to the '844 Patent and offering to grant Candela such a license. We initiated this litigation to protect our rights only after we determined that further negotiations would not provide positive results. The '844 Patent has been tested in two prior lawsuits and we are confident of its strength. In Palomar's lawsuit against Cutera, the Court's rulings, including the Markman Ruling and the Summary Judgment ruling, confirmed the breadth and validity of the '844 Patent. We intend to continue our strategy of vigorously enforcing our patent position against Candela, Alma Lasers, Inc. and other infringing competitors who refuse to take a license."

Joseph P. Caruso, President and Chief Executive Officer of Palomar, commented, "Many companies have taken advantage of the high growth of the light-based cosmetic industry by offering products covered by the '844 Patent and its parent U.S. Patent No. 5,595,568. Palomar intends to license such companies or prevent continued infringement. This strategy has and should continue to provide significant financial benefit to Palomar and its shareholders."

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. 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 uniquely focused on developing proprietary light-based technology for introduction to the mass markets. Palomar has an agreement with The Gillette Company to develop and potentially commercialize a patented home-use, light-based hair removal device for women (please note that in October 2005, Procter & Gamble Company completed its acquisition of Gillette. Under the Development and License Agreement, Procter & Gamble, as the acquiring party, assumed all of Gillette's rights and obligations.) Palomar also has an agreement with Johnson & Johnson Consumer Companies 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, and was awarded a contract by the Department of the Army to develop a light-based self- treatment device for Pseudofolliculitis Barbae ("PFB").

For more information on Palomar and its products, visit Palomar's website at http://www.palomarmedical.com. 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.

With the exception of the historical information contained in this release, the matters described herein contain forward-looking statements, including but not limited to statements relating to new markets, development and introduction of new products, and financial projections that 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, difficulties in collecting royalties, potential infringement of third-party intellectual property rights, 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, 2005 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.


Source: Palomar Medical Technologies

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