On November 18, 2014, LifeCell Corporation (“LifeCell”), a wholly-owned subsidiary of Acelity L.P. Inc., received a jury verdict from the United States District Court for the Eastern District of Virginia, Norfolk Division in a patent infringement suit filed by LifeNet Health (“LifeNet”) against LifeCell in 2013. The jury found that LifeNet’s U.S. Patent 6,569,200 was not invalid and was infringed by certain accused LifeCell regenerative tissue matrix products, and further awarded LifeNet a lump sum damages amount of $34.7 million. We expect that LifeNet will seek pre-judgment interest on the damages amount. Any damages award that is maintained after appeal would be additionally subject to post-judgment interest. At this time we are unable to estimate the range of damages related to pre- and post-judgment interest, or any further amounts LifeNet may seek in post-trial motions through costs, attorneys fees or otherwise. It is important to note that there will be no change in the supply or availability of LifeCell products as a result of this verdict, and LifeNet has not sought an injunction in the case. We disagree with the result at this stage in the litigation and believe that LifeCell’s defenses to the claims are meritorious. LifeCell will continue to vigorously assert its defenses during the post-trial and appeal stages of this litigation and intends to defend any further claims by LifeNet. Judgment has not yet been entered in this case. If the verdict remains unchanged when the final judgment is entered, LifeCell plans to appeal to the U.S. Federal Circuit Court of Appeals in Washington D.C. on multiple grounds.
