DECN Assesses Its Recent Landmark Legal Victories Over Diabetes Division Of Johnson & Johnson

Jan 28, 2016, 09:57 ET from Decision Diagnostics Corp.

LOS ANGELES, Jan. 28, 2016 /PRNewswire/ -- Decision Diagnostics Corp. (OTC PINK: DECN), the manufacturer, quality plan administrator and the exclusive worldwide sales, service and regulatory processes agent for the popular GenStrip™ 50, the FDA cleared Green Glucose Test Strip, specifically designed to work with the market leading Johnson & Johnson's ("J&J") LifeScan OneTouch Ultra family of glucose testing meters, today publishes the first of three detailed analyses concerning: 1) the legal history and current situation of the litigation with the division of J&J, 2) the most recent rulings and upcoming events and their implications to the company, and finally 3) the sea change in the business landscape brought about by the recent ruling. To summarize the current topics:

  • J&J has exhausted all fertile avenues to continue their questionable behavior toward DECN's customers and the customers of DECN's customers, based on strong suggestion and vague legal opinion concerning J&J's centerpiece '105 patent. J&J's use of this patent to intimidate DECN's customers during the litigation process will be part of DECN's overall forward legal strategy that will shortly be pursued.
  • DECN is now in an unequivocal position to pursue damages originally anticipated when the district court judge ordered a $12.7 million bond be lodged.
  • While J&J still has a single older patent it may continue to pursue, DECN believes J&J's position is even weaker with this patent because it is believed that this older patent (known as the '862 patent) is not practiced by J&J or DECN and more importantly in our opinion this patent discusses technical features that were impossible to achieve when the patent was granted, and even today many years later, are still impossible to achieve. Further, DECN has a pending Summary Judgment Motion in front of the California trial judge, which will be heard in mid-February.

To review. The company's product Genstrip received regulatory market clearance from the US FDA in November, 2012, over a year after J&J/Lifescan brought the first of its patent infringement suits.  Nonetheless, this clearance in turn triggered a successful product launch and a rapid broad market product acceptance. Initial orders and revenue overwhelmed projections and exceeded market expectations. As a result, J&J sought and was unjustly granted a preliminary injunction through their monopolistic use of their '105 patent, preventing the continued sale of Genstrip in the marketplace.

The Federal Circuit Court of Appeals (the high court just beneath the U.S. Supreme Court) reversed that injunction in November 2013, precedentially ruling that the existing and central '105 patent applied to the glucose meter rather than the test strips. The appeals court specifically found that the '105 patent was exhausted once its OneTouch Ultra glucose meters were distributed to customers.

The United States Patent and Trademark Office (USPTO) in August, 2014 determined the '105 patent used by J&J to perpetuate their blood glucose test market monopoly was invalid as obvious and functionally unpatentable; thereby terminating the '105 patent, pending a final appeal. J&J/LifeScan appealed and in doing so contended in the appeal to the Federal Circuit Court that the USPTO's final written decision and conclusion were "replete with legal errors" and the conclusion that the claims of U.S. Patent Number 7,250,105 are obvious, lacked substantial evidentiary support. J&J also argued that the IPR (court) proceeding itself was procedurally flawed, saying that only the Director of the U.S. Patent and Trademark Office, or her proper delegate, were able to institute IPRs.

Last week the Federal Circuit Court affirmed the Final Ruling of the USPTO court.  The Federal Circuit's unanimous rejection of J&J/Lifescan's appeal through a Rule 36 summary affirmation unambiguously denies the J&J/Lifescan appeal and mitigates further legal challenge.  Rule 36 decisions are rarely challenged or appealed.

This final ruling by the Circuit Court concludes the illegitimate accusations of infringement against DECN/Pharma Tech and its product, Genstrip 50. The allegations related to centerpiece '105 patent which have been repeatedly voiced by J&J and their lawyers have now been conclusively proven to be false. Each Pharma Tech company assertion communicated by public announcement, affidavit, expert testimony, deposition, direct testimony and cross examination has now proven to be absolutely and entirely true. It has been apparent from the outset that the strategy adopted by J&J and their legal counsel had little to do with pursuit of victory through truth and justice. Their relentless personal attacks, accusations and open court allegations coupled with capitalizing on every available legal delay clearly suggests the embrace of scorched earth tactics intended to prejudice lower courts and an obvious attempt to use their superior legal reserves in the misguided hope that the company would be unable to fund a cogent legal defense thereby granting to J&J a further monopoly and the resultant overburden on the US healthcare system.

Their strategy has failed.  DECN can conclusively convey that they have won an unconditional victory. J&J and their central '105 patent have been vanquished.

Keith Berman, Principal Executive of Decision Diagnostics commented, "This decisive higher court ruling has altered the legal landscape and ended J&J's test strip monopoly. We have prepared for this landmark event through the addition of an offshore supplemental test strip manufacturer that will enable our fulfillment of the expected global demand for our Genstrip technology.  All of our loyal shareholders can now expect the immediate resumption of all marketing and distribution activity that we were forced to abandon, through the illegitimate actions of J&J. "

At this stage, DECN would like to convey their first act following this embarrassment to J&J. As noted, the court imposed the mandatory posting of a $12.7 million bond related to the injunction. That bond was required to compensate Pharma Tech in the event that the court of appeals overturned the injunction and/or the lower court judge erred in his 2013 rulings. The higher courts have not only reversed the injunction but J&J's basis for seeking the injunction, infringement of the '105 patent, has been routed in the US Court of Appeals for the Federal Circuit. The company will quickly and aggressively move to attack that bond and seek the justice that it so clearly deserves.

Mr. Berman concluded, "We should also note and emphasize that we will not be satisfied to solely resume our prior activities.  We will seek punishment in the courts for J&J's actions and behavior.  We believe the best way to accomplish this is through a combination of success and court ordered financial compensation."

Forward-Looking Statements:

This release contains the Company's forward-looking statements which are based on management's current expectations and assumptions as of January 20, 2016, regarding the Company's business and performance, its prospects, current factors, the economy and other future conditions and forecasts of future events, circumstances and results.

Decision Diagnostics Corp.
Keith Berman
(805) 446-2973


SOURCE Decision Diagnostics Corp.