Thursday, May 24, 2018
Business

St. Petersburg prosthetics manufacturer endures decade-old patent fight

ST. PETERSBURG

For 20 years, ALPS South has focused on making liners that cushion prosthetics for amputees, controlling a sizable share of a $100 million-a-year niche market.

For almost half that time, the small manufacturer has been snarled in a legal death match with its principal competitor, which claimed the Florida company stole the rights to some of its products. Rather than settle, ALPS fought back.

Now, the tables have turned.

ALPS' legal nightmare began in late 2004, when Ohio WillowWood, a century-old industry leader in prosthetics, sued it for infringing on patents for certain liners worn by people who have lost a limb.

ALPS founder and president Aldo Laghi argued that manufacturers had been making the same liners long before the patent was filed in 1996.

"Our first reaction was, 'How did they get a patent on this?' " said ALPS' attorney, Ron Christaldi. "They didn't invent it."

The next year, WillowWood filed a second patent lawsuit in U.S. District Court in Columbus, Ohio, setting the stage for a legal fight so costly it stunted ALPS' growth.

To mount a defense, ALPS interviewed former workers and contacted other manufacturers to prove the products existed long before WillowWood's patent. ALPS employees traveled to a research center in Scotland to comb through documents about liner products made in the 1990s, before records were stored online.

Over time, the legal fight shifted from distraction to devourer of time and resources. Kevin McLoone, vice president of marketing and business development, set status meetings with Christaldi every Wednesday. Sales of liners grew, but with so much energy focused on legal matters, plans to add new products stalled.

"We had no option but to fight," McLoone said. "There were plenty of sleepless nights."

Christaldi, a lawyer in the Tampa office of Shumaker, Loop & Kendrick, contended the patents were not valid and asked the U.S. Patent and Trademark Office to re-examine their issuance, a process that stayed the lawsuits. Then he went on the offensive.

"Aldo is a not a litigious person, but I told him, 'These people are going to come after us again and again,' " he said. "Their goal was to put us out of business."

• • •

Laghi, 64, founded ALPS in 1988 in Saratoga, N.Y., and moved it to St. Petersburg in 1994. The name stands for advanced liquid polymer systems, but the company goes by ALPS, a nod to the mountains in Laghi's native Italy. The company provides prosthetic liners, socks, skin-care gels and braces to amputees in 47 countries.

A paratrooper in the Italian army, Laghi immigrated to the United States in 1974. He spent 12 years with General Electric, working as a chemical engineer developing silicone products for medical uses and in the areas of defense and aerospace. He holds more than 50 patents for items that improve the mobility and comfort of amputees.

A U.S. citizen since 1987, his office along 42nd Avenue N is a shrine to his patriotism and support of the Second Amendment. A gold bust of George Washington overlooks his desk. Patent plaques cover the walls. Inventing is his passion.

In 2008, ALPS, still entangled in legal issues, licensed a set of patents from a San Francisco inventor who created a polymer that strengthens fabric used in prosthetic liners. In doing so, the company learned WillowWood was using the product without authorization, Christaldi said.

As a result, ALPS filed its own lawsuit in U.S. District Court in Tampa alleging WillowWood was violating the patents. In 2012, a jury ruled in ALPS' favor and awarded the company $4 million, with some of that going to the San Francisco inventor.

ALPS said WillowWood continued to infringe on one of the patents even after the ruling and asked the judge for an injunction and to increase the judgment amount. Last month, federal Judge Mary S. Scriven awarded ALPS a total of $15.5 million in damages, not including an estimated $1.9 million in attorney fees, which are pending.

WillowWood has appealed the ruling to the Federal Circuit Court of Appeals in Washington, D.C., where patent appeals are heard. No hearing date has been set.

Company officials referred comment on the lawsuits to their attorney, who did not respond to messages. ALPS declined to provide financial information, citing the pending litigation.

Meanwhile, WillowWood's lawsuit against ALPS continues to slog through the system, as is standard with complex patent cases. The U.S. Patent Office determined one of the patents should be modified, therefore ending one of WillowWood's claims against ALPS. Still at issue, however, is ALPS' argument that WillowWood obtained one of the patents using misleading information. A trial for that is scheduled for July in U.S. District Court in Columbus.

But, with victory in sight, ALPS has jump-started its research and development and hired about 20 employees, bringing its total staff to about 120. Work is moving forward on sleep apnea masks and external breast prostheses, products with huge market potential. Also on the horizon are a device that picks up an electrical signal from a muscle to control a prosthetic ankle or knee and a pressure sensor that works through a phone app to ensure a prosthesis fits properly.

Christaldi says the company could be 10 to 30 times larger than it is today if it weren't for the legal challenges. Still, the fight has been worth it.

"The company would likely not exist at all now if it did not stand firm in defending itself in these suits," he said. "The legal process worked."

Laghi has few words about the legal mess, except that "it was a real pain in the neck." He is relieved he didn't have to lay off workers and looks forward to refocusing on his products and filing his next patent.

Susan Thurston can be reached at [email protected] or (813) 225-3110.

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