Healthcare Industry News:  Procter & Gamble 

Devices Dermatology Litigation

 News Release - November 18, 2008

Palomar's Hair Removal Lawsuit Against Candela Stayed Pending Re-Examination By United States Patent Office

BURLINGTON, Mass., Nov. 18 (Healthcare Sales & Marketing Network) -- Palomar Medical Technologies, Inc. (Nasdaq: PMTI ) today announced that, yesterday, its lawsuit against Candela Corporation for infringement of hair removal patents, specifically U.S. Patent Nos. 5,595,568 and 5,735,844, was stayed pending reexamination by the United States Patent and Trademark Office (the "Patent Office"). Generally, a reexamination proceeding is one which re-opens patent prosecution to insure that the claims in an issued patent are valid over prior art references.

Palomar has sought to license companies throughout the industry, and the filing of the request for reexamination was likely a response to these efforts. Although many companies have licensed and agreed to the validity of these patents, others continue to make arguments that the patents are invalid. Palomar welcomes this opportunity to put these allegations to rest and have the Patent Office review these patents again.

Requests for reexamination of patents are common and granted by the Patent Office 92% of the time. The granting of a request for reexamination does not indicate that the claims of the patents will be cancelled or altered in any way.

In this particular instance, an anonymous third party filed the request for reexamination and cited only a single prior art reference which was previously cited during the prosecution of U.S. Patent No. 5,735,844. Neither Candela nor any of the other parties that Palomar has previously sued has relied on this reference. Palomar believes the arguments regarding invalidity in the request for reexamination are baseless as well as factually and legally incorrect. Palomar will respond to the reexamination, including by citing all prior art which Candela and others have relied upon. At the end of process, it should be clear, as Palomar and many of its licensees have already concluded, that the patents are valid and cover fundamental technology.

The lawsuit will be delayed until the reexamination is complete.

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. In December 2006, Palomar became the first company to receive a 510(k) over-the-counter (OTC) clearance from the United States Food and Drug Administration (FDA) for a new, patented, home use, light-based hair removal device. OTC clearance allows the product to be marketed and sold directly to consumers without a prescription. 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 focused on developing proprietary light-based technology for introduction to the mass markets. Palomar has granted The Procter & Gamble Company a non-exclusive License Agreement to certain patents, technology and FDA documents related to the home-use, light-based hair removal field for women. In addition, Palomar has an exclusive development and license 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.

This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on the Company's current expectations, plans, intentions, beliefs or predictions. These forward-looking statements are neither promises nor guarantees, but 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, including patent infringement lawsuits, difficulties in collecting royalties, potential infringement of third-party intellectual property rights, factors affecting the Company's future income and resulting ability to utilize its NOLs, 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, 2007 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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