(RTTNews) - Monday, medical device maker SonoSite, Inc. (SONO: News ) said it settled a patent litigation with General Electric, Co. (GE: News ) for $21 million related to its hand-carried ultrasound systems.

Under the agreement, GE will make an up front payment of $21 million to SonoSite and pay royalties on US sales and production of Sonosite's point-of-care hand-carried ultrasound or HCU systems. This is in exchange for a worldwide license on the HCU product, which belongs to the U.S. 412 patent family.

The worldwide license is perpetual, nontransferable and pertains to HCU systems, weighing less than ten pounds. SonoSite would receive royalties on the HCU systems until the 412 patent expires in 2016.

The dispute started when General Electric filed a lawsuit in 2008 in the federal district court in Madison, Wisconsin to invalidate SonoSite's U.S. '412' Patent and an appeal was made in the Federal Circuit on certain rulings in a patent infringement case filed by GE in the same Wisconsin court in 2007.

The settlement also resolves a revocation action filed by GE in the Federal Patent Court in Germany relating to the '412 patent.
The agreement provides for the dismissal of all pending legal actions between SonoSite and GE as well as a cross-license to the other party's patents asserted in the lawsuits.

The companies have also agreed to form a new foundation to fund clinical research, education and training of best practices for point-of-care ultrasound. Other terms of the settlement are confidential, said SonoSite.

SonoSite President and CEO, Kevin M. Goodwin said, "The agreement with GE is an important milestone in the development of point-of-care ultrasound. It not only affirms the value of our patents, but also will enable the expansion of our research program for point-of-care ultrasound in medicine."

SonoSite (SONO) stock is currently trading at $28.68, up $0.26, on the NASDAQ, while General Electric (GE) stock trades at $15.92, down $0.15, on the NYSE.

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by RTT Staff Writer

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