SAN DIEGO--(BUSINESS WIRE)--Aug. 18, 2006--DexCom, Inc. (NASDAQ:DXCM - News) today announced that the U.S. District Court for the District of Delaware has granted DexCom’s motion to stay the patent infringement case brought against it by Abbott Diabetes Care, Inc., a subsidiary of Abbott Laboratories, Inc. (NYSE:ABT - News), and also said that the court has dismissed one significant claim in Abbott’s lawsuit.
In granting DexCom’s motion to stay the litigation pending reexamination of the patents by the United States Patent and Trademark Office (“USPTO”), the court noted that granting the stay will “simplify the issues and focus the litigation,” particularly if some or all of the claims of the four patents currently undergoing reexamination by the USPTO are found to be invalid, which would render many issues in the litigation moot. The court further noted that the stay will conserve the resources of both parties and the court and it will reduce the risk of inconsistent rulings by the court.
“We are extremely pleased by the court’s ruling as it has always been our view that Abbott’s legal tactics are merely an attempt by a much larger and established company to intimidate and distract DexCom, a small company, from commercializing our STS(TM) Continuous Glucose Monitoring System, which is a new and important technology for people with diabetes,” stated Andy Rasdal, DexCom’s president and chief executive officer.
The USPTO had previously granted DexCom’s request for reexamination of all four Abbott patents cited in the litigation. Although it is impossible to predict with certainty the outcome or timing of the reexamination process, according to the USPTO, seventy-four percent (74%) of the patents reexamined by the USPTO between 1981 and 2004 resulted in a cancellation or narrowing of all or some of the patent’s original claims and the average duration of the reexamination process was twenty-one (21) months.
DexCom expects that the court’s rulings will suspend further activity in the litigation until late 2007, or until the reexamination process is completed.
In approving the stay, the court also granted DexCom’s motion to strike, or disallow, Abbott’s amended complaint in which Abbott had sought to add three additional patents to the litigation. However, subsequent to the court’s ruling, Abbott filed a separate action in the U.S. District Court for the District of Delaware alleging patent infringement of those same three additional patents. DexCom believes this complaint, like the first, is also without merit and intends to vigorously contest the action. To that end, DexCom has filed requests with the USPTO to reexamine each of the three new patents cited by Abbott. DexCom’s reexamination requests are based on prior art patents and publications - many of which were not considered by the USPTO during its initial review of the applications that resulted in the issuance of the three patents - that may render the claims of Abbott’s patents invalid under U.S. patent laws. DexCom continues to believe that its technology, which was developed independently, is clearly differentiated from that described in the three additional patents cited by Abbott.
“We believe the court’s decision to stay the case until the Patent Office completes its review is especially appropriate given the frequency of patent invalidations and amendments resulting from reexamination,” Rasdal added. “With these rulings, DexCom can now concentrate our resources more fully on developing and commercializing innovative continuous glucose monitoring products to help people with diabetes live fuller and longer lives. We remain committed to fighting passionately to overcome any future obstacles that threaten the introduction of our products to patients suffering from diabetes.”
About DexCom, Inc.
DexCom, Inc., headquartered in San Diego, California, is developing and marketing continuous glucose monitoring systems for people with diabetes.
Cautionary Statement Regarding Forward Looking Statements
This press release contains certain forward-looking statements concerning our beliefs regarding the patent infringement claims asserted against DexCom. Actual results could differ materially from any forward-looking statements due to risks and uncertainties. There can be no certainty that the USPTO will invalidate or narrow the claims of any of the patents asserted by Abbott. Even if the patent claims are invalidated or narrowed, there can be no assurance of the outcome of the litigation. Whether a product infringes a patent involves complex legal and factual issues, the determination of which is often uncertain. Infringement claims against DexCom could cause us to incur significant costs, could place significant strain on our financial resources, divert management’s attention from our business and harm our reputation. If we were found to infringe, we could be prohibited from selling our product that is found to infringe unless we could obtain a license or are able to design around the relevant patents. A court could also order us to pay damages.
DexCom is a medical device company with a limited operating history. The company received approval from the FDA for its STS continuous glucose monitor on March 24, 2006, and has only recently launched the sale of this product throughout the United States. Successful commercialization of the company’s products is subject to numerous risks and uncertainties, including a lack of acceptance in the marketplace by physicians and patients, the inability to manufacture products in commercial quantities at an acceptable cost, possible delays in the company’s development programs, the inability of patients to receive reimbursements from third-party payors and inadequate financial and other resources. Certain of these risks and uncertainties, in addition to other risks, are more fully described in the company’s quarterly report on Form 10-Q for the period ending June 30, 2006, as filed with the Securities and Exchange Commission on July 21, 2006.
Contact: DexCom, Inc. Steve Pacelli (Investors) Vice President of Legal Affairs 858-200-0200 or Citigate Sard Verbinnen (Media) Lesley Bogdanow, 212-687-8080 Paul Kranhold, 415-618-8750
Source: DexCom, Inc.
