A legal battle between Nu Skin Enterprises and a Salt Lake City company over license rights to a medical scanning technology, and where it can be used, was quietly settled.

The Provo company, on March 7, acquired Caroderm Inc.’s license rights to the University of Utah Research Foundation’s patented technology — which measures the level of carotenoids in human skin — for an undisclosed sum. Carotenoids are antioxidants found in fruit and vegetables that reduce the risk of cancer and heart disease.

In 2002, Nu Skin received partial license rights to the university’s scanning technology, and its Pharmanex nutritional supplements division developed the BioPhotonic scanner. These scanners — which measure the body’s level of antioxidants by scanning the palm of the hand with a low-energy laser — are used by Nu Skin distributors to market Pharmanex’s nutritional supplements.

Nu Skin, which to date leased 5,000 BioPhotonic scanners worldwide, derives nearly 50 percent of its total revenues from the sale of Pharmanex supplements.

“We won the jury trial verdict last June. But Caroderm appealed the verdict a few months later,” said Tyler Whitehead, Nu Skin’s general counsel. “So we re-entered into negotiations with them and ended up buying Caroderm and its partial rights to the license in March. And their appeal was dismissed.”

At the heart of the lawsuit was a dispute between Nu Skin and Caroderm — both of which had licensing agreements with the University of Utah — over where and for what purpose the scanning technology can be used.

Caroderm sought to stop Nu Skin’s distributors, some of whom were doctors, from marketing BioPhotonic scanners in clinics, hospitals and other medical centers nationwide.

That, the suit said, was an infringement of Caroderm’s exclusive license to market the university’s scanning technology to physicians for “medical diagnostic purposes or in a medical clinical setting.”

Caroderm also accused Nu Skin of jeopardizing its efforts to market its technology to Nidek Ltd., a Japanese maker of ophthalmic and optometric diagnostic equipment, and also a producer of artificial skin for burn victims.

But 3rd District Court Judge Ann Boyden denied Caroderm’s claims. In a final judgment on June 9, 2005, Boyden ruled Nu Skin and its distributors are entitled to use the technology for promotion and sale of nutritional supplements exclusively.

“Any of Nu Skin’s licensed independent distributors who are members of the professional medical community may use the technology for the promotion and sale of nutritional supplements as long as it is not used in a medical clinical setting or for medical diagnostic purposes,” Boyden wrote in the ruling.

With the acquisition of Caroderm’s license rights, Nu Skin now plans to broaden technical applications of the BioPhotonic scanner in nutrition science.

This story appeared in The Daily Herald on page D6.