San Diego, CA – March 29, 2006 – DexCom, Inc. (NASDAQ: DXCM) today announced that the U.S. Patent and Trademark Office ("USPTO") has granted its requests for reexamination of four patents owned by Abbott Diabetes Care, Inc. ("Abbott"). The four patents in question were acquired by Abbott in its 2004 acquisition of TheraSense, Inc. and currently serve as the basis of a patent infringement claim filed by Abbott against DexCom in the United States District Court for the District of Delaware.
DexCom filed a request to reexamine U.S. Patent No. 6,565,509 with the USPTO on January 25, 2006. DexCom filed requests to reexamine U.S. Patent Nos. 6,175,752; 6,329,161 and 6,284,478 on February 1, 2006. DexCom's reexamination requests were based on prior art patents and publications -- many of which were not considered by the USPTO during its initial review of the applications that resulted in the four patents -- that may render the claims of Abbott's patents invalid under U.S. patent laws.
In response to DexCom's requests, the USPTO issued an order granting reexamination of the '478 and '161 patents on February 24, 2006 and February 28, 2006, respectively. On March 27, 2006, the USPTO issued its order granting reexamination of both the '509 and '752 patents. In granting the reexamination requests, the USPTO determined that the prior art cited by DexCom raised "substantial new questions of patentability" as to all four asserted patents.
There are three potential outcomes in a reexamination proceeding. The USPTO can cancel all of a patent's claims, or it can affirm all of a patent's originally issued claims. Both of these potential outcomes are relatively rare. Most frequently, the USPTO either cancels or requires a patent owner to change some of the original patent's claims. Of the patents reexamined by the USPTO between 1981 and 2004, 74 percent resulted in a cancellation or narrowing of all or some of the patent's original claims, according to the USPTO. Although it is impossible to predict with certainty how long the USPTO's reexamination of the asserted patents will take, the average duration of reexaminations, according to the USPTO, is approximately 21 months.
On February 22, 2006, DexCom filed a motion to stay the Delaware patent case pending completion of the USPTO's reexamination proceedings on all four patents. In its motion, DexCom relied on the USPTO's own statistics that the outcome of the reexamination proceedings would likely render moot some or all of the patent claims that currently form the basis of Abbott's lawsuit against DexCom. Given that likelihood, DexCom believes that a stay of the case until the patent office concludes its reexamination would simplify any remaining issues for trial, conserve the resources of the Court and parties, and avoid inconsistent rulings on the asserted patents from the USPTO and the Court. The motion is fully briefed and awaiting a decision.
About DexCom, Inc.
DexCom, Inc., headquartered in San Diego, California, is developing continuous glucose monitoring systems for people with diabetes.
Cautionary Statement Regarding Forward Looking Statements
This press release contains certain forward-looking statements concerning our beliefs regarding the patent infringement claims asserted against DexCom. Actual results could differ materially from any forward-looking statements due to risks and uncertainties. There can be no certainty that the USPTO will invalidate or narrow the claims of any of the patents asserted by Abbott or that the court will stay the litigation pending the reexamination process. Even if the patent claims are invalidated or narrowed, there can be no assurance of the outcome of the litigation. Whether a product infringes a patent involves complex legal and factual issues, the determination of which is often uncertain. Infringement claims against DexCom could cause us to incur significant costs, could place significant strain on our financial resources, divert management's attention from our business and harm our reputation. If we were found to infringe, we could be prohibited from selling our product that is found to infringe unless we could obtain a license or are able to design around the relevant patents. A court could also order us to pay damages.
CONTACT:
Investors:
DexCom, Inc.
Steve Kemper
Chief Financial Officer
858-200-0200
Media:
Citigate Sard Verbinnen
Lesley Bogdanow, 212-687-8080; or
Paul Kranhold, 415-618-8750
