Enzymotec Ltd. Provides Update on Patent Litigation With Neptune
April 01 2014 - 8:00AM
Enzymotec Ltd. (Nasdaq:ENZY) ("Enzymotec" or the "Company"), a
developer, manufacturer and marketer of innovative bio-active lipid
ingredients, announced today that following a mediation process
with Neptune Technologies & Bioressources, Inc. (Nasdaq:NEPT)
("Neptune"), in conjunction with litigation in the U.S.
International Trade Commission ("ITC"), and based on latest
developments regarding Neptune's patents in the U.S. Patent and
Trademark Office ("USPTO"), it has decided that it will not
continue its efforts to negotiate a final settlement agreement with
Neptune.
"Our belief that Neptune's patents can be invalidated was
recently reinforced by the USPTO institution, on March 24, 2014, of
an inter partes review of Neptune's U.S. Patent No. 8,278,351. The
USPTO concluded that there is reasonable likelihood that the
petitioner will prevail in demonstrating unpatentability of the
claims at issue. In addition, since no progress has been achieved
during mediation, we have decided that it is not in our best
interest to continue our efforts to try to negotiate a final
settlement agreement with Neptune," said Dr. Ariel Katz, President
and Chief Executive Officer of Enzymotec. "We believe we have
meritorious defenses to all Neptune's patent claims, and we intend
to continue to vigorously contest the complaints and to further
challenge Neptune's patents."
As previously disclosed by Enzymotec, it is a party to a number
of actions initiated by Neptune in the United States District Court
for the District of Delaware, in which Neptune has claimed that
Enzymotec's krill oil products infringe certain of its patents,
namely U.S. Patent Nos. 8,030,348, 8,278,351 and 8,383,675, (the
"'348 patent," the "'351 patent" and the "'675 patent,"
respectively).
Additionally, in April 2013, Enzymotec received notice of an
investigation by the ITC following complaints filed by Neptune and
its subsidiary, Acasti Pharma Inc., alleging a violation of section
337 of the Tariff Act of 1930 by reason of alleged infringement of
the '351 patent and the '675 patent. In December 2013, the parties
entered into a non-binding settlement term sheet and the ITC case
was stayed. On February 11, 2014, the parties informed the ITC
Administrative Law Judge that they would request mediation and
would be filing a motion for a further stay of ITC proceedings. The
motion was granted and the stay was extended until April 14,
2014.
The current status of Neptune's patents at the USPTO is as
follows:
'348 Patent: In May 2013, the USPTO issued a Non-Final Action
Closing Prosecution rejecting all of the claims in the '348
patent.
'351 Patent: In January 2014, the USPTO issued a Non-Final
Office Action rejecting all the claims of the '351 patent in an ex
parte reexamination. In addition, in March 2014, the USPTO issued a
decision instituting an inter partes review of the '351 Patent
filed by Aker BioMarine AS, concluding that there is reasonable
likelihood that Aker will prevail in demonstrating unpatentability
of the '351 patent claims at issue.
'675 Patent: In February 2014 Enzymotec filed a petition with
the USPTO for inter partes review of the '675 Patent. That petition
has not yet been decided by the USPTO.
About Enzymotec Ltd.
Enzymotec is a leading global supplier of specialty lipid-based
products and solutions. The Company develops, manufactures and
markets innovative bio-active lipid ingredients, as well as final
products, based on sophisticated processes and technologies. For
more information, visit www.enzymotec.com.
Forward-Looking Statement
This release may contain forward-looking statements, which
express the current beliefs and expectations of Company management,
including with respect to the outcome of litigation and the
Company's ability to estimate the likelihood of financial loss.
Such statements involve a number of known and unknown risks and
uncertainties that could cause our future results, performance,
achievements or the outcome of litigation to differ significantly
from the results, performance, achievements or outcomes expressed
or implied by such forward-looking statements. Important factors
that could cause or contribute to such differences include the
following risks: if any claim of the patents is found to be
infringed, valid and enforceable by the District Court, the
District Court could award damages against us, including monetary
damages in the form of lost profits or a reasonable royalty, as
determined by the District Court (with the possibility of interest
and fees). Treble damages may also be awarded if the applicable
requirements are found; calculating the measure of lost profits or
a reasonable royalty is complex and would depend in part on aspects
of Neptune's business that are not known to us; we have agreed to
indemnify and be financially responsible for any damages awarded
against certain of our customers resulting from the purchase,
importation, sale, use or offer to sell of our products in the
event such products are found to infringe certain of Neptune's
patent rights; an injunction by the District Court or an exclusion
order by the ITC could also be issued against us, either of which
could prevent us from selling the allegedly infringing products in
the United States, a significant market for our krill oil products;
the District Court or ITC could also order other actions that could
impose additional costs and expenses upon us; we could suffer
significant reputational harm from any adverse ruling in these
actions, which could significantly affect our market value, and
such harms and negative effects could also occur from the mere
expectation that an adverse ruling could be issued; and other
factors discussed under the heading "Risk Factors" in the Company's
final prospectus for its public offering filed with the Securities
and Exchange Commission on March 3, 2014. Forward-looking
statements in this release are made pursuant to the safe harbor
provisions contained in the Private Securities Litigation Reform
Act of 1995. These forward-looking statements are made only as of
the date hereof, and the company undertakes no obligation to update
or revise the forward-looking statements, whether as a result of
new information, future events or otherwise.
CONTACT: ICR, LLC
Katie Turner
646-277-1228
-or-
John Mills
310-954-1105
John.Mills@icrinc.com
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