Healthcare Industry News:  Femoral Nail 

Devices Orthopaedic Litigation

 News Release - October 3, 2006

Smith & Nephew Announces Favorable Court Ruling Against Synthes

MEMPHIS, Tenn., Oct. 3 (HSMN NewsFeed) -- Smith & Nephew Inc., (NYSE: SNN ; LSE: SN ), the global medical technology business, announced today that the Federal District Court for the Western District of Tennessee granted the company's request for a permanent injunction directed at Synthes' Trochanteric Fixation Nail (TFN) and Proximal Femoral Nail (PFN) products. The ruling prevents Synthes from promoting, distributing or selling its TFN and PFN products indicated for treatment of intertrochanteric fractures in the United States.

The Court had previously ruled on August 28, 2005, that the Synthes TFN and PFN products infringed upon U.S. patents 5,167,663 and 5,312,406, owned by Smith & Nephew, and upheld the validity of the patents. On September 28, 2006, the Court concluded that Synthes' infringement caused Smith & Nephew to lose sales for its competing products and damaged Smith & Nephew's market share for orthopaedic implants in ways that cannot be fully compensated by monetary damages alone. The damage inflicted on Smith & Nephew satisfied the U.S. Supreme Court's recently announced, more stringent, standard for granting permanent injunctions in patent infringement cases.

Mark Augusti, president of Smith & Nephew Orthopaedic Trauma & Clinical Therapies division, said, "We believe the Court's ruling recognizes the strength and merit of Smith & Nephew's case as innovators in trauma surgery. We will continue to vigorously defend our intellectual property rights as we develop new and innovative products."

Smith & Nephew filed the suit against Synthes in November 2002. A non-jury trial that began in December 2004 concluded in March of 2005, with Judge Samuel H. Mays, Jr. issuing his findings supporting the injunction order on September 28, 2006.

Editors note

Intramedullary nails are placed inside the bone to aid in the healing of bone fractures. Smith & Nephew's TRIGEN(TM) Nail system is used in the healing of proximal femoral fractures (upper leg bone fractures).

About us

Smith & Nephew is a global medical technology business, specializing in Orthopaedic Trauma & Clinical Therapies, Orthopaedic Reconstruction, Endoscopy and Advanced Wound Management products. Smith & Nephew is a global leader in arthroscopy and advanced wound management and is one of the leading global orthopaedics companies.

Smith & Nephew is dedicated to helping improve people's lives. The Company prides itself on the strength of its relationships with its surgeons and professional healthcare customers, with whom its name is synonymous with high standards of performance, innovation and trust. The company has over 8,500 employees and operates in 33 countries around the world generating annual sales in excess of $2.6 billion.

Forward-Looking Statements

This press release contains certain "forward-looking statements" within the meaning of the US Private Securities Litigation Reform Act of 1995. In particular, statements regarding planned growth in our business and in our trading margins discussed under "Outlook" are forward-looking statements as are discussions of our product pipeline. These statements, as well as the phrases "aim," "plan," "intend," "anticipate," "well-placed," "believe," "estimate," "expect," "target," "consider" and similar expressions, are generally intended to identify forward-looking statements. Such forward- looking statements involve known and unknown risks, uncertainties and other important factors (including, but not limited to, the outcome of litigation and regulatory approvals) that could cause the actual results, performance or achievements of Smith & Nephew, or industry results, to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Please refer to the documents that Smith & Nephew has filed with the U.S. Securities and Exchange Commission under the U.S. Securities Exchange Act of 1934, as amended, including Smith & Nephew's most recent annual report on Form 20F, for a discussion of certain of these factors.

All forward-looking statements in this press release are based on information available to Smith & Nephew as of the date hereof. All written or oral forward-looking statements attributable to Smith & Nephew or any person acting on behalf of Smith & Nephew are expressly qualified in their entirety by the foregoing. Smith & Nephew does not undertake any obligation to update or revise any forward-looking statement contained herein to reflect any change in Smith & Nephew's expectation with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

(TM) Trademark of Smith & Nephew. Certain names registered at the US Patent and Trademark Office.

Source: Smith & Nephew

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