I am known to some here as Mr. Sensitivity. I used to post widely on Investors Hub until the threats and bashing got out of control. Several people from this message board asked me to write a report about the Federal Circuit Court hearing last Wednesday. This is volume 1 of 2.
I have followed the battles between DECN and J&J for 8 years. I did not start out being an expert in glucose sensor devices, but I believe I am now. When DECN was sued by J&J in 2011 for patent infringement, and then later for Trade Dress violations, I at first thought that J&J was employing overkill. At that point I did not know Mr. Berman, but have met him since. I asked myself why would a $170 billion corporation with a price setting oligopolistic position in a vital sector, want to put that position at risk by trying to crush a company that had no money, no viable product (at that point), and was burdened with, unfortunately, a partner who added nothing to the equation. It seemed to me leaving well enough alone was the better path to take. That is not what happened.
The first case in Federal District Court, the Federal Circuit Court and then again in the Federal District Court pointed out some very interesting things to investigate, such as, why had J&J not followed up on its technology with new technology in an effort to protect market share. The answer was, they tried and failed, multiple times. My next question was, if J&J was unable to develop new technology why did they not acquire a company that could help them. The answer to that was, they tried and failed. J&J had a terrible merger/acquisition profile. They would acquire a company and even before the ink was dry, they would fire the people involved at the target company. So, in what turned out to be a very insular industry, J&J had earned a terrible reputation. That in turn answered my questions about their virulent treatment of DECN. J&J knew that their Lifescan division was on a downward slope and by attacking DECN it would send a message to the industry that they were not to be messed with by big or smaller companies. This as it turns out was the first of a big series of mistakes.
The first litigations with J&J ended when DECN decided it was better for all that the Defendant DECN accept an olive branch and some money. However, as talks of a settlement progressed, DECN acquired two patents, using J&J money, and then sued J&J for patent infringement. That is the case that was further adjudicated in the Appeals Court last Wednesday. DECN also filed what is called an IPR and crushed J&J’s main test strip patent. That was a big win. So as the DECN patent infringement case progresses J&J is left without any real viable defenses --- a few technicalities they can exploit, a few good lies they can use, but all in all a nothingburger. The presentation by J&J’s counsel last Wednesday was wilted lettuce on that nothingburger, a presentation totally void of passion, emotion or desire. Will this feeble performance in front of the highest court that hears patent matters carry the day in DECN’s favor?
Perhaps, because it seems that the judges assigned to hear the case were not acquainted with either the arguments or the technology, but I think that DECN’s counsel did a brilliant job in educating the judges, especially given he was only was allowed 15 minutes to make his lasting impression. I believe he succeeded. I noticed this morning that one of the four cases heard last Wednesday has already been Rule 36ed. I thought that was a terrible case to bring in the first place involving old, old VCR technology and some Mickey Mouse remote control software. This was not lost on the judges. I also think that the fourth of four cases will be Rule 36ed too, perhaps as early as Monday morning. I believe strongly that DECN’s case will survive the cut, primarily due to the tactics employed by DECN’s counsel, where he educated the judges instead of preaching at them.
This will be the first of two postings I will make today. I will close this one by saying that based on J&J’s performance, they were convinced that they would win. This is a high court. Not being prepared is very arrogant. So, if a week or 10 days goes by and DECN is not Rule 36ed, which means their claims are not thrown out by the judges sans a review and ruling, the entire complexion of the case will change. J&J, in my opinion will not want to take this case to trial. The publicity will be terrible. Already Law360 should be asking both sides for interviews. And with that I will follow up after lunch with my conclusions.
I have followed the battles between DECN and J&J for 8 years. I did not start out being an expert in glucose sensor devices, but I believe I am now. When DECN was sued by J&J in 2011 for patent infringement, and then later for Trade Dress violations, I at first thought that J&J was employing overkill. At that point I did not know Mr. Berman, but have met him since. I asked myself why would a $170 billion corporation with a price setting oligopolistic position in a vital sector, want to put that position at risk by trying to crush a company that had no money, no viable product (at that point), and was burdened with, unfortunately, a partner who added nothing to the equation. It seemed to me leaving well enough alone was the better path to take. That is not what happened.
The first case in Federal District Court, the Federal Circuit Court and then again in the Federal District Court pointed out some very interesting things to investigate, such as, why had J&J not followed up on its technology with new technology in an effort to protect market share. The answer was, they tried and failed, multiple times. My next question was, if J&J was unable to develop new technology why did they not acquire a company that could help them. The answer to that was, they tried and failed. J&J had a terrible merger/acquisition profile. They would acquire a company and even before the ink was dry, they would fire the people involved at the target company. So, in what turned out to be a very insular industry, J&J had earned a terrible reputation. That in turn answered my questions about their virulent treatment of DECN. J&J knew that their Lifescan division was on a downward slope and by attacking DECN it would send a message to the industry that they were not to be messed with by big or smaller companies. This as it turns out was the first of a big series of mistakes.
The first litigations with J&J ended when DECN decided it was better for all that the Defendant DECN accept an olive branch and some money. However, as talks of a settlement progressed, DECN acquired two patents, using J&J money, and then sued J&J for patent infringement. That is the case that was further adjudicated in the Appeals Court last Wednesday. DECN also filed what is called an IPR and crushed J&J’s main test strip patent. That was a big win. So as the DECN patent infringement case progresses J&J is left without any real viable defenses --- a few technicalities they can exploit, a few good lies they can use, but all in all a nothingburger. The presentation by J&J’s counsel last Wednesday was wilted lettuce on that nothingburger, a presentation totally void of passion, emotion or desire. Will this feeble performance in front of the highest court that hears patent matters carry the day in DECN’s favor?
Perhaps, because it seems that the judges assigned to hear the case were not acquainted with either the arguments or the technology, but I think that DECN’s counsel did a brilliant job in educating the judges, especially given he was only was allowed 15 minutes to make his lasting impression. I believe he succeeded. I noticed this morning that one of the four cases heard last Wednesday has already been Rule 36ed. I thought that was a terrible case to bring in the first place involving old, old VCR technology and some Mickey Mouse remote control software. This was not lost on the judges. I also think that the fourth of four cases will be Rule 36ed too, perhaps as early as Monday morning. I believe strongly that DECN’s case will survive the cut, primarily due to the tactics employed by DECN’s counsel, where he educated the judges instead of preaching at them.
This will be the first of two postings I will make today. I will close this one by saying that based on J&J’s performance, they were convinced that they would win. This is a high court. Not being prepared is very arrogant. So, if a week or 10 days goes by and DECN is not Rule 36ed, which means their claims are not thrown out by the judges sans a review and ruling, the entire complexion of the case will change. J&J, in my opinion will not want to take this case to trial. The publicity will be terrible. Already Law360 should be asking both sides for interviews. And with that I will follow up after lunch with my conclusions.
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