3M 2013 Annual Report Download - page 115

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which remediation activity is largely ongoing, the Company cannot estimate a possible loss or range of loss in excess of the
associated established accruals for the reasons described above.
Other Matters
Commercial Litigation
3M completed its acquisition of Cogent, Inc. in December 2010. Several holders of Cogent shares, representing a total of
approximately 5.8 million shares, asserted appraisal rights under Delaware law. Trial in Delaware occurred in November
2012, and in July 2013, the Delaware Chancery Court decided that the fair value of Cogent’s shares on the closing date of
the acquisition was $10.87 per share (plus pre-judgment interest), slightly more than the $10.50 per share paid at closing.
The Court entered its final order on July 23, 2013. Neither party appealed, and the Company paid the holders of the
approximately 5.8 million shares the fair value determined by the Delaware Chancery Court (plus pre-judgment interest).
In October 2012, four plaintiffs filed purported class actions against Ceradyne, Inc., its directors, 3M, and Cyborg Acquisition
Corporation (a direct wholly owned subsidiary of 3M) in connection with 3M’s proposed acquisition of Ceradyne. Two suits
were filed in California Superior Court for Orange County, and two were filed in the Delaware Chancery Court. The suits
alleged that the defendants breached and/or aided and abetted the breach of their fiduciary duties to Ceradyne by seeking to
sell Ceradyne through an allegedly unfair process and for an unfair price and on unfair terms, and/or by allegedly failing to
make adequate disclosures to Ceradyne stockholders regarding the acquisition of Ceradyne. 3M completed its acquisition of
Ceradyne in November 2012. In November 2012, the parties reached a settlement with the California plaintiffs for an amount
that is not material to the Company, while the Delaware plaintiffs dismissed their complaints without prejudice. The
settlement will bind all former Ceradyne shareholders and has received preliminary approval from the California court. A final
approval hearing was held in July 2013, and the California Court denied approval of the settlement. The plaintiffs filed a
motion for reconsideration of the denial of approval of the settlement, which motion was denied by the California court. The
plaintiffs then filed a motion for leave to amend their complaint, which motion was denied without prejudice in January 2014.
Separately, one Ceradyne shareholder, who purports to hold 16,656 shares, filed a petition for appraisal rights under
Delaware law. In 2013, the parties reached a settlement of this matter for an amount that is not material to the Company.
The previously disclosed patent infringement litigation against Avery Dennison Corporation in the United States District Court
for the District of Minnesota relating to retroreflective sheeting products used on traffic signs, pavement markings and other
traffic control products was resolved in 2013 with the court entering a consent judgment in favor of 3M. Avery’s separate
claims of patent infringement and antitrust violations against 3M have been dismissed by the court with prejudice.
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 filter 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 U.S. 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. In November 2012, a 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. The special master’s recommendations were
forwarded to the court in September 2013. The court has not yet ruled on those recommendations or on 3M’s pending
motions seeking judgment in its favor on its claims and those of TransWeb. 3M intends to appeal if the court enters final
judgment against 3M.
In December 2010, Meda AB, the Swedish-based acquirer of 3M's European pharmaceutical business, filed a lawsuit
against 3M, and its subsidiaries, 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 sought compensatory damages in excess of $300 million (including prejudgment interest), punitive
damages, and attorneys' fees. A non-jury trial occurred in the U.S. District Court for the Southern District of New York in
January 2013. In September 2013, the Court issued a decision in 3M’s favor, rejecting all of Meda’s claims. In October
2013, 3M filed a motion seeking attorneys’ fees and costs. Also in October, Meda filed an appeal to the U.S. Court of
Appeals for the Second Circuit. In December 2013, Meda agreed to dismiss its appeal and 3M agreed to dismiss its
motion for fees and costs.