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Hollywood Tans and Laughlin Products Settle Patent Dispute
February 1, 2004
Hollywood Tanning Systems, Inc. (“HTS”, NJ) and Laughlin Products, Inc. (“LPI”, TX) have entered into a non-exclusive licensing agreement for the manufacturing and marketing of HTS’ sunless spray booth under LPI’s patent portfolio. The license puts HTS under the same license umbrella currently shared by Mystic Tan, Inc. (TX), Jean Paul’s Tanning, LLC. (Ireland) and Mist-On Systems, Inc. (“MSI”, TX).

Although the financial terms of the agreement are confidential, the license agreement will cover all HTS-manufactured booths. In addition to direct spray booth sales to its franchisees under the label Instant Tan, HTS manufactures and distributes its spray booths under private labels. These labels include Sun Spritz, Summer Image, Miracle Mist, and Omega Pro. Ralph Venuto, Sr., Chairman of HTS explained, “I believe our new agreement will significantly increase our worldwide spray booth sales, as our perspective spray booth purchasers will no longer be faced with the stigma or threat of potential patent litigation.”

It was also disclosed that HTS will contribute to the LPI license umbrella, and enhance its own position, by assigning to LPI all its patents and patent rights relating to sunless spray booths. According to Dr. Tom Laughlin, president of LPI and MSI, “This license arrangement will be a valuable asset to LPI in defense of patent rights that it has granted to HTS and other licensees.”

Dr. Laughlin was issued the pioneering patent for the sunless spray booth in 1999. That patent is assigned to LPI along with his 16 subsequent patents. Following a lengthy, exhaustive and highly publicized re-examination process, the U.S. Patent Office recently confirmed the validity of Dr. Laughlin’s pioneering patent.

“The sunless spray booth market has grown from one booth in 1999 to over 5,000 booths worldwide today. It’s now one of the the fastest growing segment of the tanning industry, with over $120,000,000 in retail sales in 2004” noted Dr. Laughlin. Most of these booths are licensed by LPI.

LPI has aggressively defended its patent rights and the rights it has granted to others. Since 2001, it has filed patent infringement suits against more than 130 manufacturers, distributors and owners of allegedly infringing sunless spray booths. About 30 of these suits have been settled. The remaining suits have been consolidated in the U.S. District Court for the Eastern District of Pennsylvania.

HTS was designated a lead defendant in that case, as was Magic Tan, LLC (OH). All suits relating to the HTS booth have been dismissed as part of this new license agreement.