3M 2012 Annual Report Download - page 115
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on pending motions for summary judgment on certain matters filed by both parties. Avery has sought reexamination of the
five 3M patents in suit. The U.S. Patent and Trademark Office (US PTO) granted reexamination and issued a first Office
Action rejecting all claims for two of the patents in suit. The US PTO denied in whole Avery's request for reexamination of
one of the patents in suit.
Fact discovery is also complete in the antitrust case and expert discovery is ongoing. Fact discovery is ongoing in the
declaratory judgment case involving Avery’s patents and the parties are beginning the claim construction process. Avery
filed a motion to join all three cases for trial, a motion that the Court denied. Accordingly, the 3M patent infringement case
is expected to go to trial late in 2013.
3M sued TransWeb Corporation in Minnesota in 2010 for infringement of several 3M patents covering fluorination and
hydrocharging of filter media used in 3M’s respirators and furnace filters. TransWeb does not make finished goods, but
sells media to competitors of 3M’s respirator and furnace filter businesses. TransWeb filed a declaratory judgment action
in and successfully moved the litigation to the United States District Court for the District of New Jersey, seeking a
declaration of invalidity and non-infringement of 3M’s patents, and further alleging that 3M waited too long to enforce its
rights. TransWeb also alleged 3M obtained the patents through inequitable conduct and that 3M’s attempt to enforce the
patents constitutes a violation of the antitrust laws. On November 30, 2012, the jury returned a verdict in favor of
TransWeb on all but one count, including findings that 3M’s patents were invalid and not infringed, and that 3M had
committed an antitrust violation by seeking to enforce a patent it had obtained fraudulently. The jury also recommended
that the court find 3M had committed inequitable conduct in obtaining the patents, and that the patents were therefore
unenforceable. Since the vast majority of TransWeb’s claim for treble antitrust damages is in the form of its attorneys’ fees
and expenses in connection with the defense of the patent case, the parties agreed that the measure of damages would
not go to the jury, but rather would be submitted to a special master after the trial. It is expected this process will take
several months, and the special master’s recommendations would then be forwarded to the court for review and entry of a
final judgment. 3M intends to appeal.
In December 2010, Meda AB, the Swedish-based acquirer of 3M's European pharmaceutical business, filed a lawsuit
against 3M, 3M Innovative Properties Company, and Riker Laboratories, Inc. (collectively, "3M"). Meda initially asserted
claims against 3M for breach of contract and breach of the implied covenant of good faith and fair dealing. In October
2011, Meda amended its pleading to assert a claim for fraud. All three claims are based on allegations that 3M did not
inform Meda about certain information relating to the pricing of a particular drug in France prior to the acquisition. Meda
seeks to recover compensatory damages in excess of $300 million (including prejudgment interest), punitive damages,
and attorneys' fees. In September 2012, 3M filed a motion for summary judgment on the grounds that Meda cannot
establish a breach of any duty owed by 3M. A non-jury trial started in the United States District Court for the Southern
District of New York in January 2013. The court is expected to issue its decision in the first quarter of 2013.
Shurtape Technologies, LLC sued 3M in the United States District Court for the Western District of North Carolina,
alleging that 3M’s ScotchBlue™ Painter’s Masking Tape with Edge-Lock™ Paint Line Protector, which was introduced in
late 2009, infringes Shurtape’s U.S. patent describing masking tape having an absorbent coating applied to the edge of
the tape and several of Shurtape’s trademarks. 3M requested reexamination of the Shurtape patent, and in November
2012, the US PTO issued an office action adopting many of 3M’s invalidity arguments and rejecting all claims in the
Shurtape patent. 3M has also filed a motion with the district court asking that the litigation be stayed pending resolution of
the reexamination. Shurtape has opposed that motion and the court has not yet ruled. Trial is anticipated in late 2013 or
early 2014.
For commercial litigation matters described in this section for which a liability, if any, has been recorded, the Company
believes the amount recorded, as well as the possible loss or range of loss in excess of the established accrual is not
material to the Company’s consolidated results of operations or financial condition. For those matters for which a liability
has not been recorded, the Company believes that such liability is not probable and estimable and the Company is not
able to estimate a possible loss or range of loss at this time.
Product Liability Litigation
Électricité de France (EDF) filed a lawsuit against 3M France in the French courts in 2006 claiming commercial loss and
property damage after experiencing electrical network failures which EDF alleges were caused by so-called defective 3M
transition splices. The French Court of Appeals at Versailles affirmed the commercial trial court’s decision that the
transition splices conformed to contract specifications which were thoroughly analyzed and tested by EDF before
purchase and installation. The Court of Appeals, however, ordered a court-appointed expert to study the problem and
issue a technical opinion on the cause of the network failures. In spite of considerable testing of 3M’s splices over several
years, the court-appointed expert has been unable to identify a defect in the 3M splices and to determine the definitive
cause of the network failures. The court-appointed expert is expected to submit his final report to the commercial court by
June 30, 2013. Thereafter, the commercial court may take from six months to one year to render its decision.