NIR Diagnostics withdraws from patent infringement suit



    TSX Venture: NID

    CAMPBELLVILLE, ON, Aug. 27 /CNW/ - NIR Diagnostics Inc. (TSX Venture:
NID), an innovator in the development of handheld medical diagnostic devices
today announced it has entered into a settlement agreement, effective August
20, 2008, to dismiss its remaining claims in the patent infringement action
against Masimo Corporation filed in the United States District Court by
Shaklee Corporation.
    Shaklee initially filed suit against Masimo in July, 2007 in the Central
District of California, alleging infringement of U.S. Patent No. 6,651,015 and
U.S. Patent No. 6,611,777, naming NIR Diagnostics as an involuntary plaintiff.
    The asserted patents were licensed by NIR Diagnostics to Shaklee under
The Second Amended and Restated Exclusive License Agreement effective August
9, 2006 ("License Agreement"). A copy of the License Agreement is available
publicly on www.sedar.com under NIR Diagnostics and dated August 18, 2006. NIR
Diagnostics agreed to be a co-plaintiff pursuant to Section 14 of the License
Agreement.
    On August 9, 2008, Shaklee entered into a unilateral settlement agreement
with Masimo in which Shaklee agreed that it would not continue litigation
against Masimo and would not fund continued litigation by NIR Diagnostics. The
agreement was reached on the eve of the expiry date of Shaklee rights that
were required to settle the claim. NIR Diagnostics immediately advised Shaklee
that the commitment made in its settlement not to fund NIR Diagnostics'
continued litigation against Masimo, was a breach of its August 9, 2006
License Agreement, Shaklee dispute a breach occurred. On August 11, 2008,
pursuant to the Shaklee-Masimo settlement agreement, Shaklee instructed NIR
Diagnostics to dismiss its claims against Masimo.
    Under the terms of NIR Diagnostics' settlement with Masimo, as with the
Shaklee-Masimo settlement that preceded it, the case has been dismissed
without either party incurring financial liability to the other.

    About NIR Diagnostics

    NIR Diagnostics is an innovator in the development of near-infrared,
spectroscopic medical diagnostics. The Company has an extensive portfolio of
optical, electronic and algorithm related patents in the field of in-vitro and
in-vivo blood analysis.

    Forward-looking Statements

    This press release contains information that is forward-looking
information within the meaning of applicable securities laws. In some cases,
forward-looking information can be identified by the use of terms such as
"may", "will", "should", "expect", "plan", "anticipate", "believe", "intend",
"estimate", "predict", "potential", "continue" or the negative of these terms
or other similar expressions concerning matters that are not historical facts.
Particularly, statements about the planned development of diagnostic devices,
the potential efficacy of such devices, the expected timing of product sales
and the sufficiency of funds available to finance ongoing operations are
forward-looking information.
    Forward-looking information, by its nature necessarily involves risks and
uncertainties including, without limitation, the difficulty of predicting
regulatory approvals, market acceptance and demand for new products, the
protection of intellectual property connected with devices, the impact of
competitive products, and other similar or related risks and uncertainties.
Additional risks and uncertainties affecting the Company are discussed in the
Risks and Uncertainties section of the MD&A for the year ended December 31,
2007 available on SEDAR at www.sedar.com. If any of these risks or
uncertainties were to materialize or if the factors and assumptions underlying
the forward-looking information were to prove incorrect, actual results could
vary materially from those that are expressed or implied by the
forward-looking information contained herein. The Company disclaims any
intention or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.

    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.





For further information:

For further information: Duncan MacIntyre, President, CEO and Executive
Vice Chairman, NIR Diagnostics Inc., (905) 854-5727, (905) 854-5729 Fax,
E-mail: info@nirdiagnostics.com, Internet: www.nirdiagnostics.com; Ross
Marshall, Investor Relations, (416) 815-0700 ext. 238, (416) 815-0080 Fax,
E-mail: rmarshall@equicomgroup.com, Internet: www.equicomgroup.com

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NIR DIAGNOSTICS INC.

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