The culmination of possibilities in the causa J&J – DECN is in a way fascinating. Reading this it shows that it ain’t over until the fat lady sings. Reminds me of a statement in a closed forum from a “professional” who clearly was in opposition of the offers J&J made and finished his lecture by saying: If DECN plays the game right and is using all Jokers, the amount on the table would be closer to the 100 Mio figure than to a 10 Mio figure. Now this is rather a wide spread I would then say, but when reading this verdict of payments for compensatory damages and punitive damages who would have given a dime 1 year ago for C.P. to get that kind of rewards.
In the causa DECN – J&J will have another problem: It is not on DECN to proof how much they lost by being sued for patent infringement, it is the statistic (see further below) of the test strips market, that will do the proof for them. IF a market is closed for you, you cannot negotiate deals and if you cannot negotiate deals you cannot sell and if you cannot sell you have no revenues and worse, you cannot plan for the future which means, even if you win, you lost all those years from the time you were stopped from selling and the lost years due to not planning for the time after. I would call this: Missed opportunities covering 4 to 6 years.
But by suing DECN, J&J has send out signals, that if they would not have sued DECN, then DECN would have taken them away a rather nice market share and if it would not be so, why bother then to sue? I guess a judge will follow this logic as well. And what market share could then a judge award: 5 % - 10 % - 15 %? If J&J would then argue, that this is too much and try get away with 1 %, then the judge could be in a mood to ask: Why then all the costs, pain and bad publicity to sue a company for only taking a 1% share out of the market?
So the judge would be served with a statistic from the DECN lawyers that would show, that the Strip market generated revenues around 9 billion and LifeScan controls roughly 30 % of it and that this market is a fast growing market and if you are stripped from being part of it for at least a period of 2 years and stripped of planning for the future, the possible percentage of loss could be based on an estimated market share of 5 %. If Lifescan generates roughly $ 2.5 billion plus then a 5 % share would amount to $ 125 Mio. (Maybe after all the guy with the 100 Mio figure was not that far away)
The judge would then read as well: The Blood Glucose Device (SMBG) (Test Strips, Lancet, Meter) Market & Forecast - Worldwide research report says that by the end of 2013 there was 382 Million people suffering from diabetes and this figure is expect to rise further to 592 Million by 2035. Blood glucose monitoring devices market is very lucrative business with enormous future potential. Self-monitoring blood glucose market is primarily dependent on number of diabetic patients. So with the growth in diabetic patients blood glucose monitoring devices market is set to grow many folds. . According to GlobalData, the entire monitoring market will reach $12.2 billion by the year 2017. As a point of reference, in 2010, the test strips themselves accounted for close to 90% of the total market value. Therefore, over $11 billion will be up for grabs in 2017 on the sale of test strips alone.
Conclusion:
The judge would clearly understand, why J&J wanted to have DECN out of this lucrative market and would then present them a nice bill for compensatory damages and punitive damages. All in all, what a diamond of a company: On one hand they are moving ahead – see recent press-release with the execution of a new executive summary which will generate revenues and then with “hidden-reserves” from a settlement that will come one way or another.
