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30 million and I didn’t buy at .0001. I bought much higher so I actually have cash in it.
Not true as of one minute ago when I checked the docket. It is now 721 EDT
I hate to say it but what a really poorly written request. These lawyers look really lazy and unwilling to make a strong argument for anything. I am concerned. What’s the reason they need an extension? State it in the filing. Attach a declaration setting forth whose schedule is affected and why. You would think they would have learned their lesson from the last mishap. Apparently they didn’t. Now I’m stuck in this having to read briefs that look like they were written by a law student.
I’m not on social media. I do trials now and then and it creates too many problems with a jury to have social media.
You can add that I was a patent litigator at Kirkland & Ellis (now moved on). But hopefully that will help my credibility.
Great. I am not here to criticize. I just want to see this turn into something. Cozen is a fine firm. They can do it. They just need to execute.
Great. But this is all meaningless unless they actually present it to the Court.
The decision to grant the MTD is a disconcerting and depressing read. I drew three conclusions: (1) the judge is smart and paying attention, (2) Cozen is asleep and just made a mistake (which can be corrected), and (3) HCMC needs inside counsel to police Cozen here because there is nobody keeping Cozen straight based on what I am seeing. I commented on this back in March, before HCMC responded to the MTD, but HCMC's opposition should have been much more aggressive. Back in March, I noted that I would have expected some evidence showing evidence of combustion in HCMC's opposition, e.g., an expert declaration of some kind. None was presented. HCMC's opposition was underwhelming. Cozen is asleep. Cozen has the capabiity; they just need to wake up.
Here is the thing about this case. The claims require combustion. HCMC sued on a device, knowing full well that Exhibit J is out there which exhibit states that there is no combustion. Any good patent lawyer, and I would put Cozen in that category, would have done pre-suit due diligence, which means that they would have bought the infringing device, had an expert examine it and test it, and make sure that it does infringe the claim, including that combustion occurs. I assume all of that happened here because that is what good patent lawyers do and that is what the laws and the rules require. If Cozen did not do that, then Cozen and now HCMC have major problems. I said this back in March and I will say it again (and I hope someone at HCMC and Cozen is reading this), JUST PRESENT THE EVIDENCE AND DO IT NOW. PUT IN AN AMENDED COMPLAINT (OR MOTION FOR ONE RATHER) COUPLED WITH AN EXPERT DECLARATION DETAILING FOR THIS JUDGE THE FACT THAT THE EXPERT HAS RUN TESTS ON THE DEVICE, AND THAT THERE IS EVIDENCE OF COMBUSTION. If HCMC does that, if Cozen does that, then I would expect that this case will be allowed to move forward. If HCMC cannot do that, then this case should never have been brought in the first place. To file a case without already having that evidence in hand is wildly reckless and sanctionable under Fed R. Civ. P. 11 and other laws, so I would expect that HCMC has the evidence already. All they have to do is show it to the Court. Now I understand why they might have been hesitant to put it in in the first place - no lawyer loves to put expert declarations in at the complaint stage - but Cozen and HCMC made that bed when they added Exhibit J. I mentioned this back in March. It is textbook 101 in this situation.
Finally, I do not like the Judge's use of the word futile in terms of an amendment here. HCMC, IF YOU ARE READING THIS, THAT IS A SIGNAL TO COME FORWARD WITH YOUR BEST EVIDENCE. NOW IS NOT THE TIME FOR POSTURING AND BEING SHY.
The other recommendation I would make is for HCMC to hire an internal or external patent litigator to police Cozen here and force these things to happen. It would not cost much money; they could even just do it with shares. Holman is a lawyer, but he is not a patent lawyer so this is out of his wheelhouse. They need one seasoned patent lawyer to check Cozen throughout this process.
These are my opinions. I am frustrated as I think sleepiness has caused this when it could have been avoided altogether.
For what it is worth, there is no 90 day rule in the Federal Rules of Civil Procedure. There is no deadline for decision on a Motion to Dismiss under 12(b) of the Federal Rules of Civil Procedure. Unfortunately, the Court can take as long as the Court wants to take. This does not mean that the motion cannot be decided in 90 days. It just means that the motion does not have to be decided in 90 days. I do not like it either. I do not think the parties like it either. But it is the unfortunate reality of civil litigation in a federal court. It will come, but not on any timetable. As of one minute ago (11:49am EDT), the motion is still pending. In my experience, it has already taken too long. But that is my personal feeling which is really irrelevant. There have been cases where motions were pending for years. Unfortunately there is no schedule or timetable or rule that requires decision by a certain date. I am long by the way, so I too would like to see a decision in HCMC's favor.
I just checked the docket. A total fabrication and lie.
Correct. Plus PM already has another means of redress in the Court and asking the patent office for a do-over is a manifest waste of resources. Finally, an IPR is not the death knell. The claims of the HCMC patent can be affirmed. They can be amended and emerge even stronger from this process. (they can also be invalidated of course). However, with 27M in the bank, HCMC has the resources to capitalize here and to turn this into a potentially amazing and real benefit.
Here is a good strategy to turn the IPR petition into a positive in my opinion: Without the IPR, HCMC would not have any opportunity to amend and to strengthen the claims of the patents. There are always weaknesses that the patent owner cannot fix but recognizes when they get into a litigation. If an IPR were to be instituted here, the IPR process would provide some capability, if the circumstances present themselves, for HCMC to amend the claims, thereby strengthening the patent. In that way, the IPR process can actually backfire on PM in that sense. Usually a patent owner is left with no capability to change the claims of the patent. The IPR process allows for changes and HCMC can do that with some knowledge of how the accused product works. Here is a link to an article where a patent owner, faced with an IPR challenge, did just that, i.e., amended claims to fix issues that were present in a parallel litigation:
https://www.mintz.com/insights-center/viewpoints/2231/2019-12-ptab-allows-amending-claims-grounds-not-raised-petitioner
IPR Petition
Before letting anxiety set in here, I thought important to consider the following.
(1) As I suggested in my Feb 19, 2021 post (as well as my post last night), an IPR petition was always of medium likelihood in terms of expectations, so this event is really not all that surprising. HCMC is likely asking for billions of dollars here and if anyone thinks that PM is merely going to roll over and stroke a giant check without putting up a fight, then they are unrealistic. Of course they will defend themselves in whatever way they can. Nothing has been invalidated so far. PM was sued by HCMC. PM responded with a Motion to Dismiss and also filed an IPR petition based on prior art challenging validity of the patent in suit. PM would have challenged the validity in the Court anyway. Therefore, this is not an unexpected event and would have happened one way or another. The sky is not falling. These are very common course events.
(2) Even more interesting is the following. I took a peek at the IPR petition. While I have not reviewed the filing in great detail yet, I did review it enough in order to appreciate the following. PM's lead arguments on invalidity are based on prior art that the patent office had already looked at before the HCMC patent was granted. That is right. In the IPR petition, the first arguments are based in whole (first argument) or in part (second argument) on the "Robinson" reference. And PM admits in the IPR petition that the patent office examiner saw the Robinson reference before allowing the HCMC patent to issue:
Robinson was not used in a rejection or discussed by the Examiner during prosecution, but was briefly noted by the Examiner during the reasons for allowance.
PM is basically arguing that the patent examiner made a mistake. Therefore, this is not a situation where they are citing the Robinson reference to the patent office for the first time. They are citing a reference that the patent office has already seen and decided was not disqualifying in terms of the patent's allowability. The truth is that the Examiner might have made a mistake, but I hope everyone can appreciate the significance of the fact that PM's lead arguments are based on a reference that the patent office had already seen when reviewing HCMC's application for the patent in the first place.
Note that there are other arguments re invalidity that PM is making as well in the IPR petition, i.e., arguments in view of a different reference that appears to be new. But that is to be expected and does not take away from the fact that their lead arguments are based on the Robinson reference that the patent office was already aware of. Lead arguments are most typically the arguments that the lawyer feels are strongest and here, making that good assumption, PM's strongest argument is based on prior art that the patent office has already seen.
Hope this helps provide some context. These are just preliminary opinions based on a very quick review of the IPR petition.
PM's IPR Petition
Good question on PM's petition for IPR (Inter Partes Review). It is to be expected these days. It is yet another tool in the kit provided by our Congress to help big corporations keep the smaller patent owners down. Here is an excerpt from my first post regarding this stock that I made on February 19, 2021:
The most likely options for [the answer deadline], in my opinion, from a patent litigation perspective, are the following:
(1) Answer and Counterclaims (sub medium likelihood);
(2) Motion to Dismiss (most likely);
(3) Motion for Summary Judgment (unlikely);
(4) Petition in the USPTO Patent Trial and Appeal Board for Inter Partes Review requesting a determination on validity of some or all of the claims of the patent (medium likelihood).
* * *
Number 4 (IPR) has become the all too familiar tactic of the patent defendant, made possible by big corporations having lobbied Congress hard to make available a less costly method to challenge the validity of the patent. That process can take a year or more and usually comes with a stay of the patent litigation until the Patent Office decides of the IPR petition issue. It can have negative and positive consequences for HCMC while also causing delay.
As I alluded to on February 19, 2021, basically, the IPR process allows a defendant to challenge the validity of a patent based on printed publications (what patent lawyers refer to as prior art). It is a validity review by the Patent Office (not a court). The court litigation is totally separate. At this point, PM has filed a petition alleging that the claims are invalid in light of some prior art. HCMC will have 90 days from June 14, 2021 to respond (if they want). And then the Patent Office needs to decide whether to institute a proceeding no more than 6 months after the petition was filed, so sometime in December 2021. If IPR is instituted, then a decision on validity has to come within a year of that institution decision from a three administrative judge panel sitting inside the patent office.
The IPR process has become a common tactic by big corporations to get a second chance to invalidate and to drain a plaintiff of resources. A company like PM can do all of these validity challenges through the already commenced court proceeding, but why not take this additional avenue to force a small company to pay twice as much to defend a patent (now in the court and also separately in the patent office). If PM loses in the court proceeding, then they have a second bite at the apple in the Patent Office IPR proceeding. Likewise, if PM loses in the Patent Office, then they get a second bite at the apple in the court proceeding. Plus PM forces HCMC to spend more money, something that would be hard for any small company. Make sure to thank your congressional representatives and your senators for making this possible for big corporate america.
But watch out PM. If PM loses in the IPR proceeding, that is yet further evidence that the patent is probably not invalid. So it can have a negative effect on PM's case as well.
These things usually come with a Motion to Stay, but it appears that PM wants the court to decide the MTD anyway. If the court denies the Motion to Dismiss, I would expect a Motion to Stay.
Finally, I am glad that HCMC did that rights offering and now has 27 million additional cash in its war chest. HCMC has more than enough cash now to sustain the lawsuit, the IPR proceeding and to bring additional cases. Just speculation here, but I think we see more lawsuits now on the other patents in the suite against other defendants, now that HCMC has the additional cash to sustain the monetization strategy.
It's too hard to say. There are many variables.
First, the patent(s) would be valuable to a company that is in a territorial battle with competitors. Here, we have PM fighting RJR and BAT and others for space in this new and valuable market. They are using patents as weapons against each other. In that event, it would be valuable for any of PM, RJR, BAT or another competitor to scoop up HCMC's patents to use as offensive weapons in their disputes with their competitors. That would drive a settlement (if it was by PM) or an acquisition of the patents (if by RJR or BAT or someone else). Then the patents can be used to force competitors out of the market or to tax them with a royalty.
Second and alternatively, there are other ways to challenge a patent, e.g., validity and non-infringement. Any of those, if successful, would make the patents or certain claims unenforceable. We have already seen the combustion issue which is a non-infringement defense. Given this, a defendant, like PM, might feel it is better to fight to invalidate or to prove non-infringement. That would probably not lead to an early settlement but would instead drive this to a trial.
So it is hard to say. There are too many variables. Anything is a good possibility whether it is settlement or a trial. The longer this carries on though, the higher the damages and the higher the cost to settle.
Third and finally, I would also expect HCMC to sue other manufacturers when those manufacturers come on line, e.g., BAT is developing a device and when that device gets sold in the US, they could be infringers. If BAT's device infringes any of the patents, HCMC will probably sue them also. Same goes for RJR and any other competitors. I do not see it as a real possibility that HCMC lets BAT and RJR and others enter the market without filing additional infringement lawsuits. That possibility makes the patent suite very valuable. That is a long window.
So again, many outcomes and too many variables.
It gets even more complicated. The judge probably won’t even read the papers. The judge likely
has 2 law clerks (recent law school grads although sometimes more experienced). One of those clerks is assigned to this case and that clerk will read the papers and prepare a bench memo or summary of the points of the submissions. The judge will probably make a decision from that summary. It’s just too much work for one judge to read everything him or herself.
Anyway, we wait. I have been holding since February.
It doesn’t work that way. The only thing holding this up is the judge’s workload and docket load. At any given moment, a federal judge probably has 150 or more cases pending. Look at the civil action number in this case. It ends with 4816 or something. That means that when this case was filed, there had already been more than 4800 cases filed in this one court in Georgia in 2020. And it wasn’t even the end of the year. I think there are only about 15 judges in this court so do the math, 4816 divided by 15. And that’s just for 2020. Add to that all of the cases pending from the prior years that remain unresolved. Plus Batten is the chief judge so he has other administrative responsibilities on top of everything. My point is that the judge isn’t holding or waiting on anything. The judge is working so many other cases, that it just takes time to get through them all. All the motions, the hearings, the trials, the stipulations, sentencing hearings, conferences, etc. This is normal. A motion to dismiss in a patent case is not an emergency. The judge will get to it when he gets to it.
MOTION TO DISMISS DECISION TIMING
I thought it would make sense to revisit or re-post the following post that I made on April 20, 2021. My initial yet crude analysis of decisions showed there to be a cluster of decisions on Motions to Dismiss from Judge Batten around 6-8 weeks from submission, which in this case, would put the possible decision timing at mid-June. It is not a guarantee because the Judge can take whatever time the Judge wants, but we are still well within the window that I suggested was a good guess, i.e., through mid June. Expecting a decision on the pending Motion to Dismiss before today is quite frankly: unrealistic. This is what I wrote on April 20, 2021:
It is hard to say when Judge Batten might decide the pending Motion to Dismiss. A survey of some, but not all, of Judge Batten's written opinions on Motions to Dismiss in patent-related cases shows a wide distribution of times to decision. Some opinions came within days (even 3 or 4 days). Others came in months (even 9 or 10 months). However, there appears to be a cluster around 6 to 8 weeks. The pending Motion to Dismiss was submitted to Judge Batten yesterday, April 19, 2020. Therefore, the clock started yesterday. Anything is a guess here, but sometime between now and mid-June would be a good guess in my opinion. But that is all it is, a guess and an opinion. Judge Batten also does not appear to write many opinions on Motions to Dismiss in patent-related cases. Therefore, the timing found in the decision survey might be skewed to later dates because writing opinions takes time. If a judge issues a decision without an opinion, there is no time involved in writing the decision and one could expect those decisions - ones without written opinions - to come more quickly. But that is also speculation based on logic as well.
Everyone should be aware that a federal judge is not required to decide a Motion to Dismiss in any particular time frame and can take as long as the Judge requires. I have seen situations where a Motion to Dismiss was pending up until trial (which can be years after the filing of the motion itself).
For what it is worth, I bought more shares today.
Hope it helps. Good luck.
Patent litigator.
A patentee is not entitled to an injunction unless the patentee is also making a product under the patent and can show that the infringer is taking sales of the product away. I do not think, at this point, HCMC can make that showing. I am not sure the Q-Cup is even covered by the patent and even if it is, that there are enough sales and capacity to justify an injunction. That’s likely why HCMC has not sought an injunction. The Court just wouldn’t give one.
HCMC is probably better off letting PM sell the IQOS and taking a royalty on their sales. It’s like having a sales army that is probably more effective than HCMCs sales team. That’s just an opinion.
My guess is two months from submission. That’s just a guess. There is no rule on timing .
Nothing has been docketed in this case since April 19, 2021. The Motion to Dismiss remains pending as of 6:58pm EDT today, April 23, 2021 which is the last time I checked the docket.
MOTION TO DISMISS DECISION TIMING
It is hard to say when Judge Batten might decide the pending Motion to Dismiss. A survey of some, but not all, of Judge Batten's written opinions on Motions to Dismiss in patent-related cases shows a wide distribution of times to decision. Some opinions came within days (even 3 or 4 days). Others came in months (even 9 or 10 months). However, there appears to be a cluster around 6 to 8 weeks. The pending Motion to Dismiss was submitted to Judge Batten yesterday, April 19, 2020. Therefore, the clock started yesterday. Anything is a guess here, but sometime between now and mid-June would be a good guess in my opinion. But that is all it is, a guess and an opinion. Judge Batten also does not appear to write many opinions on Motions to Dismiss in patent-related cases. Therefore, the timing found in the decision survey might be skewed to later dates because writing opinions takes time. If a judge issues a decision without an opinion, there is no time involved in writing the decision and one could expect those decisions - ones without written opinions - to come more quickly. But that is also speculation based on logic as well.
Everyone should be aware that a federal judge is not required to decide a Motion to Dismiss in any particular time frame and can take as long as the Judge requires. I have seen situations where a Motion to Dismiss was pending up until trial (which can be years after the filing of the motion itself).
For what it is worth, I bought more shares today.
Hope it helps. Good luck.
It's 30 calendar days. See Federal Rules of Civil Procedure Rule 6(a)(1). The Court counts every day, including intermediate Saturdays, Sundays, and legal holidays. But the Court does not count a Saturday, Sunday or legal holiday if it is the last day of the period. The last day of this stay period is May 1st, but since May 1st is a Saturday, we jump to Monday May 3rd.
No. The April 12, 2021 date for the Preliminary Report is not valid anymore. On April 1, 2021, the Court granted the parties' Joint Motion to Stay all deadlines for thirty (30) days from April 1, 2021. With PM's reply now due on April 16, 2021, it certainly does not leave much time (count 30 days from April 1) for the Court to resolve the MTD or for the parties to resolve the dispute (if that is being contemplated) before the deadlines pick back up again.
Nothing has been filed yet today. When something gets filed, Pacer will update immediately. But HCMC has until 11:59 pm EDT to file a response, technically.
Article III judges are not obligated to decide motions in any particular time frame. However, typically the case will not be stalled or delayed while that motion remains sub judice (pending), meaning the case should still proceed to discovery and the next stages. I have seen the decisions come quickly and I have seen some judges take a while and let the case proceed. To get a better prediction, I would usually review the particular judge's decisions to see if I can get a sense of the average time to decision for this judge. I have not done that exercise yet but will try to do it on the weekend. No matter what, the judge has discretion to take whatever time the judge desires. If it carries on too long, then one party might file a petition in the court of appeals for a writ of mandamus, directing the judge to decide the motion. But that is very rare.
In fact, the parties are required to have a meeting and conference on or before Monday, March 15 and then to file a report and plan a month later (see my earlier post). Those dates do not change even though the time has been extended on the MTD. To delay that would require a separate motion to extend time. Something the parties have not yet requested.
Revisionist history on your part. We know. They have money. Do you have any comments on the actual merits or is that it? In any event, good luck.
That's not my point. You're redirecting. My point was that you chose to criticize someone for suggesting $5M is sufficient, when the data shows that it can be more than sufficient.
Instead of responding to that, you choose to respond with nebulous fear inspiring overtures about being buried in mountains of paper. Yes, no kidding. Litigation is document intensive. We know. Thank you for your useless input. For what it is worth, discovery is actually done electronically now, so there is not actually any mountain of paperwork, generally.
According to various publicly available surveys, the average cost of a patent litigation in the United States is between $2.3M and $4M. I just thought you ought to know that before you start criticizing people. They can be more. They can also be less. Take a look for yourself:
https://apnews.com/press-release/news-direct-corporation/a5dd5a7d415e7bae6878c87656e90112
https://news.bloomberglaw.com/business-and-practice/cost-of-patent-infringement-litigation-falling-sharply
To close out the issue on whether the Motion was granted or not, here is Docket Entry 35 from PACER (was docketed around 3pm EDT today):
ORDER granting 33 Motion for Extension of Time re 31 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM . Deadline for Plaintiff Healthier Choices Management Corp. to file its Response to Defendants' Motion to Dismiss Under Fed. R. Civ. P. 12(b)(6) is March 22, 2021, and the deadline for Defendants Philip Morris USA, Inc. and Philip Morris Products S.A. to file their Reply is April 16, 2021. Signed by Judge Timothy C. Batten, Sr. on 3/10/21. (rsh) (Entered: 03/10/2021)
To be clear, it wasn’t signed and docketed until 3pm, so any post before that saying it was granted was wrong.
No problem. I saw the other posts too. Those were all wrong. The order wasn’t signed until about 3 or 330 pm EDT.
Not sure what you’re referring to. I’m a patent lawyer. I checked the docket myself. My posts are accurate and informed.
Motion to Extend Time to respond to PM's MTD has been granted. The order has been signed and is available on PACER.
Upcoming events through beginning of May 2021:
(1) HCMC's Opposition to PM's MTD (March 11, 2021): Absent an extension of time to respond, HCMC's opposition to PM's MTD is due on or before March 11, 2021. I would expect some form of opposition that includes arguments that (a) dismissal is not warranted because discovery has not happened yet and discovery is needed in order to determine whether combustion is a process that occurs in the accused devices, (b) dismissal is not warranted without a claim construction that construes, amongst other terms, the term "combustion", and (c) testimony, by way of a declaration, explaining that it is not dispositive, based on the documentary evidence presented by PM's MTD, that there is no combustion. A well written opposition brief hitting those points will likely result in denial of the MTD. I would also expect that there be a request by HCMC to correct any defects in their complaint, should the court deem there to be any defects. That request is granted liberally and would overcome the MTD for the time being.
(2) Rule 26(f) Meet and Confer (March 15, 2021): This is held in private between lead counsel for all parties. The parties are required to confer in person in an effort to settle the case, discuss discovery, limit issues, and discuss other matters.
(3) PM's Reply to HCMC's Opposition (March 25, 2021): Absent an extension of time, PM will have the opportunity to reply to HCMC's opposition brief regarding the MTD.
(4) Joint Preliminary Report and Discovery Plan (April 12, 2021). Absent an extension of time, the parties will file this report and plan that results from the parties' Rule 26(f) meeting and conference and sets forth numerous details including, amongst other things, the progress of settlement discussions, a proposed schedule of the case for fact discovery, motion practice, expert discovery, and trial.
(5) Infringement Contentions (May 12, 2021): HCMC is due to serve contentions showing infringement where HCMC will identify (these are usually exchanged between the parties and not made public or filed publicly with sensitive information redacted): (a) Each claim of each patent in suit that is allegedly infringed by each opposing party; (b) Separately for each asserted claim, each accused apparatus,method, composition or other instrumentality (“Accused Instrumentality”) of each accused party of which the claiming party is aware.
Right now I am holding 1,000,000 shares and I am in the red. My plan, at this time, is to wait until the stock drops after Friday to buy some more. I am guessing that PM will file a MTD and it will freak everyone out and bring the panic selling, but in my experience, a MTD at this stage is not case ending. A MTD at this stage is usually just gamesmanship. I am not a stock analyst and I cannot predict what the stock will do, but that is what I would expect for Friday as a probably scenario. I think it is highly unlikely that PM would do a straight settlement at this stage, unless they saw the acquisition of the patent as a useful tool in their fight against Reynolds. Remember, Reynolds is trying to shut PM's IQOS down in the ITC using a Reynolds patent, so it would not be unusual for a company in PM's situation to acquire a patent as an offensive weapon to use against Reynolds in that situation in my opinion.
If PM does something like an IPR petition or brings a challenge under 101 under "Alice" then I will need to give it some thought. If they do not bring an IPR petition, I would take that as an indication that they do not have a lot of strong invalidating prior art which would be a good sign. But that would be somewhat speculative too.
In my experience, a settlement at this stage for any meaningful sum is highly unlikely. I am playing this long term. Early settlements happen, but they happen less often in these situations. And the earlier the settlement, the lower the settlement amount, unless there is some intangible perceived additional value, such as the scenario that I mentioned above where PM might want the patent to fight Reynolds. But who knows, Reynolds might also want the patent to bring further pressure on PM. Think about that? Reynolds is already trying to shut PM down. How about they acquire HCMC's patent and it is a further advantage over PM. If I worked at Reynolds that is what I would be doing. In doing that, Reynolds would gain an asset to bolster its fight against PM AND would also avoid a litigation by HCMC against Reynolds.
Again, just my thoughts here. I cannot tell the future. I am holding long.
I am holding some shares long so I need the stock to go up like a lot of us. But some of the comments on here are so wildly speculative and uninformed.
PM is not going to settle the case next Friday. The reason I do not think a settlement is coming Friday is because before PM pays anything, they are going to put HCMC and Cozen to the test. There is little to be gained by settlement today and a lot to be gained by dragging the case out. Large corps do not settle patent cases early because it invites more patent litigation. The most likely options for next Friday, in my opinion, from a patent litigation perspective, are the following:
(1) Answer and Counterclaims (sub medium likelihood);
(2) Motion to Dismiss (most likely);
(3) Motion for Summary Judgment (unlikely);
(4) Petition in the USPTO Patent Trial and Appeal Board for Inter Partes Review requesting a determination on validity of some or all of the claims of the patent (medium likelihood).
Here is the thing. Number 1 (Answer and Counterclaims) would have no real immediate effect on the case. It would mean that the case just moves forward without the Court having to decide a motion to dismiss. It is really not positive or negative. Number 2 (MTD) would likely be perceived as a negative, but it shouldn't be. This is a very typical defensive strategy. However, a MTD at this stage is unlikely to be granted without leave to amend the complaint or otherwise to bring the case back. Meaning a MTD at this stage would not end HCMC's fight with PM. At the most it would cause some delay. Even if dismissed, HCMC would be allowed to bring the case back after correct of any defects. So even a MTD should not be perceived as a negative event, but it will be because people don't understand patent litigation. Number 3 (MSJ) would be premature and easily defeated by HCMC because there has not been discovery and therefore likely that the Court would not decide such a Motion as there would be a need for discovery. Also critical issues of fact are in dispute that preclude decision on a MSJ. Number 4 (IPR) has become the all too familiar tactic of the patent defendant, made possible by big corporations having lobbied Congress hard to make available a less costly method to challenge the validity of the patent. That process can take a year or more and usually comes with a stay of the patent litigation until the Patent Office decides of the IPR petition issue. It can have negative and positive consequences for HCMC while also causing delay.
My point is that all of this talk about something big happening Friday is just preparing people to be let down. And that is bound to be reflected negatively in the stock price because in my opinion, not a lot that is good can happen Friday. I want the stock to go up too. But this is a long term play. Patent litigation takes time. Cozen has a decent reputation in the area. Weil (PM's lawyers) do too. This is a buy and hold opportunity for a while in my opinion. We don't even have a scheduling order and there hasn't even been a Rule 16/26 discovery scheduling conference.
What keeps me up at night for now? that ITC case by Reynolds to prevent PM from importing the IQOS. If Reynolds gets that, then PM cannot sell in the US and there are no patent damages.
In any event, for what it is worth, I'm a semi-retired patent attorney. I litigated patent cases for and against American's largest corporations for almost 20 years. Do your own diligence. But these are my thoughts. I am holding a long position for now and not expecting anything good to happen Friday.