Court Upholds Diomed's Claim for Trade Secret Misappropriation Against Vascular Solutions.

ANDOVER, Mass. -- Diomed, Inc., a subsidiary of Diomed Holdings, Inc. (AMEX: DIO), a leading developer and marketer of minimally invasive medical technologies, including EVLT(R) products for the laser treatment of varicose veins, announced that the Court has allowed its pending case for trade secret misappropriation against Vascular Solutions, Inc. and its former employee Nancy Arnold to proceed to trial. Vascular Solutions had sought summary judgment dismissing the entire case. Today, that motion was denied. Summary judgment was allowed on certain secondary claims in the case, but the core claim for trade secret theft was allowed to proceed.

At a hearing before the Court in July, Vascular Solutions conceded that it would desist from any further use of the mark ELT, which Diomed alleged infringes Diomed's federally-registered EVLT(R) trademark. In today's decision the Court refused to dismiss Diomed's action against Vascular Solutions for trade secret misappropriation and certain related claims, ruling that:

"A reasonable jury could conclude from this evidence that Arnold and VSI misappropriated information confidentially disclosed to Arnold by (Diomed's former CEO Peter) Klein."

By issuing this decision the Court has allowed Diomed's claim for theft of trade secrets to proceed to trial. Secondary counts relating to breach of contract and tortious interference were removed from the case as part of the ruling.

This case is unrelated to Diomed's separate patent suits which are pending against Vascular Solutions, AngioDynamics, Inc., Total Vein Solutions, LLC, and CoolTouch, Inc. for infringement of Diomed's United States Patent Number 6,398,777 covering the endovascular laser treatment of varicose veins. Diomed acquired exclusive rights to that patent from the five inventors of the procedure in September 2003.

"Diomed is pleased that the Court has upheld Diomed's right to proceed with its claim for trade secret misappropriation against Vascular Solutions and its former employee," stated James Wylie, President and Chief Executive Officer of Diomed Holdings, Inc. "Diomed values its intellectual property rights in which it has invested more than $20 million over the last three years, and we will continue to aggressively protect this investment," Mr. Wylie said.

About Diomed

Diomed develops and commercializes minimal and micro-invasive medical procedures that use its proprietary laser technologies and disposable products. Diomed's EVLT(R) laser vein ablation procedure is used in varicose vein treatments. Diomed also provides photodynamic therapy (PDT) for use in cancer treatments, and dental and general surgical applications. The EVLT(R) procedure and the Company's related products were cleared by the United States FDA in January of 2002. Along with lasers and single-use procedure kits for its EVLT(R) laser vein treatment, the Company provides its customers with state of the art physician training and practice development support. Additional information is available on the Company's website: www.evlt.com.

EVLT(R) is a registered trademark of Diomed Inc., Andover, MA.

Safe Harbor statements under the Private Securities Litigation Reform Act of 1995: Statements in this news release looking forward in time involve risks and uncertainties, including the risks associated with trends in the products markets, reliance on third party distributors in various countries outside the United States, reoccurring orders under OEM contracts, market acceptance risks, technical development risks and other risk factors. These statements relate to our future plans, objectives, expectations and intentions. These statements may be identified by the use of words such as "may," "will," "should," "potential," "expects," "anticipates," "intends," "plans," "believes" and similar expressions. These statements are based on our current beliefs, expectations, and assumptions and are subject to a number of risks and uncertainties. Our actual results could differ materially from those discussed in these statements. Our Annual Report on Form SEC 10-KSB (the "Annual Report") contains a discussion of certain of the risks and uncertainties that affect our business. We refer you to the "Risk Factors" on pages 22 through 37 of the Annual Report for a discussion of certain risks, including those relating to our business as a medical device company without a significant operating record and with operating losses, our risks relating to our commercialization of our current and future products and applications and risks relating to our common stock and its market value. Diomed disclaims any obligation or duty to update or correct any of its forward-looking statements.