ArthroCare Licenses Coblation Technology to Stryker; Stryker Licenses ArthroCare's Patents in Arthroscopy.

Business Editors/Health & Medical Writers

SUNNYVALE, Calif.--(BW HealthWire)--July 6, 2000

ArthroCare Corporation (Nasdaq:ARTC) today announced that Stryker Corporation (NYSE:SYK) has agreed to license ArthroCare's patents for Coblation(R) technology. The license, which is worldwide and non-exclusive, covers single electrode bipolar devices in arthroscopy.

Under the terms of the agreement, Stryker will pay ArthroCare an initial license fee and ongoing royalty payments on worldwide sales of its SERFAS arthroscopy product set. The license agreement also establishes a procedure for resolution of certain potential intellectual property disputes in this market without litigation. Further details were not disclosed.

"Our intellectual property portfolio is a reflection of the investment our shareholders have made in developing our proprietary technology and we are committed to making sure they receive an appropriate return on that investment," said Michael A. Baker, ArthroCare's president and chief executive officer. "We are pleased we have accomplished that in this case without the necessity of prolonged legal activity, and we look forward to competing with Stryker in the marketplace."

ArthroCare's products allow surgeons to operate with a high level of precision and control, limiting damage to surrounding tissue and thereby potentially reducing pain and speeding recovery for the patient. The company's products operate at lower temperatures than traditional electrosurgical or laser surgery tools and enable surgeons to remove, shrink or sculpt soft tissue and to seal bleeding vessels.

ArthroCare is a medical device company that develops, manufactures and markets products based on its patented Coblation technology. ArthroCare's soft-tissue surgery systems consist of a controller unit and an assortment of single-use disposable devices that are specialized for specific types of surgery. The company believes its Coblation technology can replace the multiple surgical tools traditionally used in soft-tissue surgery with one multi-purpose surgical system. Coblation technology is applicable across many soft-tissue surgical markets. The company's strategy includes applying its patented Coblation technology to a broad range of soft-tissue surgical markets, including arthroscopic surgery, cosmetic surgery, ear, nose and throat surgery, spinal surgery, neurosurgery, general surgery, and various cardiology applications. The company's website is at www.arthrocare.com.

Stryker Corporation develops, manufactures and markets specialty surgical and medical products, including orthopaedic reconstructive, trauma, spinal and craniomaxillofacial implants, powered surgical instruments, endoscopic systems, patient care and handling equipment for the global market and provides outpatient physical therapy services in the United States. The Company's common stock is traded on the New York Stock Exchange under the symbol SYK.

Except for historical information, this press release includes forward-looking statements including, but not limited to, success of certain product lines and strategies, the strength of the company's intellectual property position, and other statements that involve risks and uncertainties. These risks and uncertainties are detailed from time to time in the company's Securities and Exchange Commission filings, including ArthroCare's Form 10-K for the year ended January 1, 2000 and Form 10-Q for the quarter ended April 1, 2000. Forward-looking statements are indicated by words or phrases such as "anticipates", "estimates", "projects", "believes", "intends", "expects", and similar words and phrases. Actual results may differ materially from management expectations. The company disclaims any obligation to update any of the forward-looking statements contained herein to reflect future events or developments.