Question-and-Answer Session
Robert S. Weiss - Executive Vice President, Chief Executive Officer of The Cooper Companies and President of CooperVision
Okay. Operator, can you open up the lines for questions?
Operator
Sure. [Operator Instructions].
B. Norris Battin - Vice President of Investor Relations and Communications
Gerard Holtz [ph].
Unidentified Analyst
Just a couple of quick questions and I will jump off here. Can you just talk about the cannibalization of Dk 100 to two week, what it can do? Because I know you are not including in your guidance for next year. But if you look at J&J, which basically dictates the market at this point, moving over to a two-week, could eventually just blow Biofinity away. Meaning, Biofinity goes away and you just go with a two-week? And then just on the royalty payments, is that going to... are those royalty payments for the silicone hydrogel lenses going to be excluded from your earnings numbers?
Robert S. Weiss - Executive Vice President, Chief Executive Officer of The Cooper Companies and President of CooperVision
I will pick both of those questions. First of all on cannibalization, the... certainly the U.S. market is much more about the two-week market whereas the rest of the world is much more about a 1 month particularly as it relates to silicone hydrogel. So I don't... while the work course clearly will be the two-week going forward, there is a large niche market as we can see from pure vision and night and day and in the 30-day space. So I think Biofinity given if perception in the marketplace will have its place, we look five years down the road there is no doubt that the two-week will be the much larger market. But we don't... given the number of alliance we have and amount of capacity, we probably can address the market needs from that perspective.
As far as... so the answer is, well, a long way from being able to meet the market needs in both spaces; the one day... the two-week and the 30-day marketplace and it's not one size to tell globally.
As far as the royalty, the royalty is baked into the numbers that are not called out, its not a call-out going forward and from the perspective of expectation down the road as we look down the road at silicone hydrogel space, we will still have attractive gross margins. By attractive I mean if we look two or three years down the road, north of 70% addressing that. So it was a win-win from the company's prospective and time to move on and stop as you can see from the legal fees we created in the quarter, it was time to move beyond making the lawyers that rich and do more productive things
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