I think this is best explanation of what could happen, posted a few days ago by Lucy K:
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.
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