Replies to post #49553 on Decision Diagnostics Corp (DECN)

[IPwatcher]

Could you explain how you came to the conclusion that the outcome of the current infringement case (as yet unresolved ) has "little or no bearing on the sale of the Lifescan franchise" when a significant portion of the revenues are derived from sales of the strips whose patents are in question?

I am in no way implying that DECN is on the verge of winning $400 million based on this case. The current share price of 0.05 says the market agrees. My point is that if there was historical infringement by JNJ of a patent that was valid at that time it would seem to imply that going forward they may not have the same leverage/tools available to them to maintain market dominance. If the current case were to be decided against JNJ (wouldn't be the fist time they lost) why wouldn't that impact the value of the franchise regardless of who owns it?
Thanks for your insight.
regards

Happy to oblige.
The patents have expired.
The infringement is historical.
The DECN claim (such as it is) on the Tall Oaks IP they purchased (for around $500,000) relates to royalities that potentially could have been due to Tall Oaks in relation to the patents that are in dispute, covering the period that those patents were in force, on the basis that JnJ WERE allegedly infringing those patents without a licence at the time they were in force.
Effectively DECN are after a share of the cash that JnJ has already banked, and that Tall Oaks felt they should have been entitled to a piece of.
(JnJ did not concur, obviously).
Basically Tall oaks will have knocked at JnJ's door with patents in one hand and a collecting tin in the other asking for a consideration towards a 'licence' on said patents. To use an analigy, Tall oaks wil have effectiveky said:
"You've parked your car on my parking space, so you need to buy a ticket off me !"
JnJ sent them packing saying "I'm not on your space. I rent the adjoining space and my car is parked there legally. Go away"
Now DECN are knocking at the same door with the same patents (That they bought off tall oaks) and a lawyer in tow, as well as a bigger collecting tin.
"You didn't buy a ticket when you parked in my space, so you need to pay this penalty notice".
JnJ are saying "I wasn't on your space. Prove it: Bet you can't! I rented the adjoining space and my car was parked there legally. "
DECN are taking JnJ to court to try and make them pay up for parking in the space, while JnJ are saying that they were legally parked one space along all the time.
Thus far, DECN have conceeded that JnJ weren't actually in their space (literal infringement), but claim that JnJ may have been blocking their access to it, so should pay for it as if they were! (doctrine of equivalents).
And since the alleged infraction, the parking lot has now been designated a free parking zone. Anyone can park there now!
Pursuing the analogy even further, the situation today is that JnJ happen to be selling the car that DECN alleges was - once upomn a time - parked in violation.
Since its now a free parking zone, DECN can't clamp the car, whoever owns it.
The best they can hope is that a Judge might order some owner of the car to pay the ticket they claim they are owed.

These patents have zero leverage over the sales proceeds of the same test strips being sold today.

The patents are now expired. It is a free for all with regard to those strips.
You want to make a test strip yourself that works in an OTU meter? Be my guest!
Neither JnJ nor DECN can stop you on the basis of these patents.
So fill your boots.
You might find that the JnJ franchise - with their knowledge base - can make it cheaper that you can make it.
You might even find that they can - with their established brand and knowledge base - sell them for more than you can achieve.
(Platinum obviously believe this! I personally am equivocal)

But have a go by all means!
Because I doubt that JnJ can now stop you from making a test strip that works in an OTU meter.
And DECN CERTAINLY can't!