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

Tuesday, November 18, 2008 General News
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BURLINGTON, Mass., Nov. 18 Palomar MedicalTechnologies, Inc. (Nasdaq: PMTI) today announced that, yesterday, its lawsuitagainst Candela Corporation for infringement of hair removal patents,specifically U.S. Patent Nos. 5,595,568 and 5,735,844, was stayed pendingreexamination by the United States Patent and Trademark Office (the "PatentOffice"). Generally, a reexamination proceeding is one which re-opens patentprosecution to insure that the claims in an issued patent are valid over priorart references.

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

Requests for reexamination of patents are common and granted by the PatentOffice 92% of the time. The granting of a request for reexamination does notindicate that the claims of the patents will be cancelled or altered in anyway.

In this particular instance, an anonymous third party filed the requestfor reexamination and cited only a single prior art reference which waspreviously cited during the prosecution of U.S. Patent No. 5,735,844. NeitherCandela nor any of the other parties that Palomar has previously sued hasrelied on this reference. Palomar believes the arguments regarding invalidityin the request for reexamination are baseless as well as factually and legallyincorrect. Palomar will respond to the reexamination, including by citing allprior 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 alreadyconcluded, 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 researcherand developer of light-based systems for cosmetic treatments. Palomarpioneered the optical hair removal field, when, in 1997, it introduced thefirst high-powered laser hair removal system. Since then, many of the majoradvances in light-based hair removal have been based on Palomar technology. InDecember 2006, Palomar became the first company to receive a 510(k)over-the-counter (OTC) clearance from the United States Food and DrugAdministration (FDA) for a new, patented, home use, light-based hair removaldevice. OTC clearance allows the product to be marketed and sold directly toconsumers without a prescription. There are now millions of light-basedcosmetic procedures performed around the world every year in physicianoffices, clinics, spas and salons. Palomar is testing many new and excitingapplications to further advance the hair removal market and other cosmeticapplications. Palomar is focused on developing proprietary light-basedtechnology for introduction to the mass markets. Palomar has granted TheProcter & Gamble Company a non-exclusive License Agreement to certain patents,technology and FDA documents related to the home-use, light-based hair removalfield for women. In addition, Palomar has an exclusive development and licenseagreement with Johnson & Johnson Consumer Companies to develop and potentiallycommercialize home-use, light-based devices for reducing or reshaping body fatincluding cellulite, reducing the appearance of skin aging, and reducing orpreventing acne.

This press release contains forward-looking statements within the meaningof the U.S. Private Securities Litigation Reform Act of 1995. Forward-lookingstatements are based on the Company's current expectations, plans, intentions,beliefs or predictions. These forward-looking statements are neither promisesnor guarantees, but involve risk and uncertainties that may individually ormutually impact the matters herein, and cause actual results, events andperformance to differ materially from such forward-looking statements. Theserisk factors include, but are not limited to, results of future operations,technological difficulties in developing or introducing new products, theresults of future research, lack of product demand and market acceptance forcurrent and future products, the effect of economic conditions, challenges inmanaging joint ventures and research with third parties and governmentcontracts, the impact of competitive products and pricing, governmentalregulations with respect to medical devices, including whether FDA clearancewill be obtained for future products and additional applications, the resultsof litigation, including patent infringement lawsuits, difficulties incollecting royalties, potential infringement of third-party intellectualproperty rights, factors affecting the Company's future income and resultingability to utilize its NOLs, and/or other factors, which are detailed fromtime to time in the Company's SEC reports, including the report on Form 10-Kfor the year ended December 31, 2007 and the Company's quarterly reports onForm 10-Q. Readers are cautioned not to place undue reliance on theseforward-looking statements, which speak only as of the date hereof. TheCompany undertakes no obligation to release publicly the result of anyrevisions to these forward-looking statements that may be made to reflectevents or circumstances after the date hereof or to reflect the occurrence ofunanticipated events.Contacts: Kayla Castle Investor Relations Manager Palomar Medical Technologies, Inc. 781-993-2411

SOURCE Palomar Medical Technologies, Inc.

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