Palomar Medical Technologies Inc announced recently it is restarting its patent infringement case against rival Candela Corp, saying in a quarterly earnings release that it’s in a much stronger position to pursue the litigation.

Earlier this summer, the US Patent and Trademark Office (USPTO) zapped an obstacle to Palomar’s patent infringement suit against Candela over its "Hair Removal Using Optical Pulses" patent.

Palomar and Massachusetts General Hospital accused Candela of infringing the patent, but the suit was stayed late last year to give the patent office time to reexamine the patent’s claims. The USPTO later confirmed the 30 original claims contained in the patent, as well as 26 new claims, disallowing only three.

And in a June decision that also came down in Palomar’s favor, the European Patent Office upheld the device maker’s patents as "novel and inventive" over its competitors."

Despite the legal victories, Palomar still struggled last quarter, as the economic downturn continued to affect the cosmetic laser market. Overall, the company took a 35% hit to its second-quarter bottom line, reversing nearly $600,000 in profits into a $783,000 loss for the three months ended June 30, 2009.

The company posted sales of $15 million for the quarter, down nearly 35% compared to $23 million for the same period last year.

But company officials pointed to the recent FDA approval of an over-the-counter anti-wrinkle device as a sign that Palomar is poised for future growth. The firm says it had $123 million in cash on hand at the end of the quarter, essentially unchanged from last year.

[Source: MassDevice]