1037-00004 · Solstice Biomedical Devices Ltd · Closing

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CALDERWOOD & HARKNESS LLP Attorneys at Law

1201 Market Street, Suite 2500 Wilmington, DE 19801

Main Office: 299 Park Avenue, 35th Floor, New York, NY 10171

Marcus Delgado, Partner Telephone: (302) 555-4170 Facsimile: (302) 555-4171

Email: mdelgado@calderwoodharkness.com

June 17, 2025

Via Email and First-Class Mail

Sandra Keene Claims Adjuster Halcyon Specialty Insurance Co. 185 Asylum Street Hartford, CT 06103

Re: Settlement Reporting — Apex Surgical Innovations, Inc. v. Solstice Biomedical, Inc. Case No. 1:24-cv-00587-RGA (U.S. District Court for the District of Delaware) Policy No. HSI-IP-2023-04891 Calderwood & Harkness Matter No. 10294.0017 Insured: Solstice Biomedical Devices Ltd. / Solstice Biomedical, Inc.

Dear Ms. Keene:

I. Purpose and Introduction

This letter constitutes formal notice of the settlement of the above-captioned patent infringement action, Apex Surgical Innovations, Inc. v. Solstice Biomedical, Inc., Case No. 1:24-cv-00587-RGA, pending in the United States District Court for the District of Delaware. This letter is provided pursuant to the settlement reporting obligations set forth in intellectual Property Defense Liability Policy No. HSI-IP-2023-04891 (the "Policy") issued by Halcyon Specialty Insurance Co. ("Halcyon") to Solstice Biomedical Devices Ltd. and its subsidiaries.

Calderwood & Harkness LLP serves as outside defense counsel for the insured parties in this matter: Solstice Biomedical Devices Ltd., an Irish private limited company registered with the Companies Registration Office under CRO No. 648217, and its wholly-owned U.S. operating subsidiary, Solstice Biomedical, Inc., a corporation organized and existing under the laws of the State of Delaware (EIN: 84-3291056) (collectively, "Solstice" or the "Insured"). I serve as the Responsible Partner on this engagement.

As you are aware, Calderwood & Harkness provided Halcyon with an initial coverage notification letter on May 13, 2024, promptly following the filing of the underlying complaint. Halcyon acknowledged coverage under the Policy and issued its reservation of rights letter dated June 3, 2024. Throughout the pendency of this litigation, we have maintained regular communications with your office regarding the status of the proceedings, and we are grateful for Halcyon's cooperative engagement with respect to the defense of this matter.

The purpose of this letter is to report on the terms of the definitive settlement reached between the parties, provide a summary of the litigation proceedings and the defense fees and costs incurred, confirm the insurance coverage posture with respect to the settlement and defense costs, and outline the next steps necessary to close Halcyon's claim file in connection with this matter.

II. Background of the Litigation

On May 9, 2024, Apex Surgical Innovations, Inc. ("Apex"), a corporation organized and existing under the laws of the State of Delaware (EIN: 51-0483762), with its principal office located at 1220 North Market Street, Suite 550, Wilmington, Delaware 19801, filed a complaint for patent infringement against Solstice Biomedical, Inc. in the United States District Court for the District of Delaware. The action was assigned to Chief Judge Richard G. Andrews as Case No. 1:24-cv-00587-RGA. Apex was represented throughout the litigation by the law firm Hargrove, Tate & Bennington LLP, with Victoria Stanton serving as lead partner on the matter.

A. Patents-in-Suit. In its complaint, Apex alleged that Solstice's PrecisionEdge™ line of laparoscopic trocar assemblies infringed three Apex-owned United States utility patents. The named inventor on all three patents-in-suit is Dr. Raymond Szabo, Vice President of Engineering at Apex. The three asserted patents are as follows:

1. U.S. Patent No. 9,814,237 (the "'237 Patent"), entitled "Locking Seal Assembly for Minimally Invasive Surgical Access Device," issued on November 14, 2017, with a calculated expiration date of June 22, 2035. Apex asserted infringement of Claims 1, 3, 7, and 12 of the '237 Patent.

2. U.S. Patent No. 10,271,884 (the "'884 Patent"), entitled "Retractable Blade Deployment Mechanism for Trocar Systems," issued on April 30, 2019, with a calculated expiration date of September 15, 2036. Apex asserted infringement of Claims 1, 2, 5, 9, and 14 of the '884 Patent.

3. U.S. Patent No. 10,932,105 (the "'105 Patent"), entitled "Integrated Insufflation Valve and Seal for Laparoscopic Trocar," issued on March 2, 2021, with a calculated expiration date of January 10, 2038. Apex asserted infringement of Claims 1, 4, and 8 of the '105 Patent.

B. Accused Products

Apex's infringement allegations were directed at Solstice's PrecisionEdge™ product line, specifically the following three product series:

• The PrecisionEdge™ PE-5000 Series (5 mm trocar assembly);

• The PrecisionEdge™ PE-12000 Series (12 mm trocar assembly); and

• The PrecisionEdge™ PE-15000 Series (15 mm trocar assembly).

These products are manufactured by Solstice and distributed to hospitals, ambulatory surgical centers, and medical device distributors across the United States and internationally. The PrecisionEdge™ line represents a significant portion of Solstice's laparoscopic surgical access device revenue.

C. Responsive Pleadings

Solstice was served with the complaint on May 23, 2024. On June 14, 2024, Calderwood & Harkness filed an Answer, Affirmative Defenses, and Counterclaims on behalf of Solstice. The responsive pleading asserted, among other defenses, non-infringement of all asserted claims of the three patents-in-suit, invalidity of the asserted claims under 35 U.S.C. §§ 102 and 103, and inequitable conduct before the United States Patent and Trademark Office during the prosecution of the patents-in-suit.

III. Summary of Litigation Proceedings

A. Scheduling and discovery

Following an initial case management conference, the Court entered its Scheduling Order on July 2, 2024. The parties filed their Joint discovery Plan on July 15, 2024, which set forth the agreed-upon framework for the phased exchange of discovery materials.

Fact discovery was extensive. Solstice produced a total of 48,217 documents in response to Apex's document requests, bearing Bates numbers SBD-000001 through SBD-048217. Apex, in turn, produced 31,450 documents, bearing Bates numbers APEX-000001 through APEX-031450. Given the volume of electronically stored information at issue, the parties engaged DataVault Litigation Solutions, LLC to conduct technology-assisted review. DataVault processed approximately 1.2 terabytes of data, encompassing a universe of approximately 312,000 documents, which were reviewed for relevance, privilege, and responsiveness through a combination of predictive coding models and manual attorney review.

The parties also exchanged interrogatories, requests for admission, and conducted depositions of key fact witnesses from both sides, including representatives from Solstice's engineering, product development, and sales departments, as well as Dr. Raymond Szabo and other Apex personnel.

B. Claim Construction

Claim construction proceedings were conducted in accordance with the Court's scheduling order and the requirements of Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996). The parties submitted opening and responsive claim construction briefs, along with supporting declarations, addressing the proper construction of disputed claim terms across the three patents-in-suit.

The Markman hearing was held before Chief Judge Andrews on November 18, 2024. Following the hearing, the Court issued its Claim Construction Order on December 6, 2024. A total of nine disputed claim terms were construed by the Court. Of these nine constructions, five were favorable to Solstice's positions and four were favorable to Apex's positions. The claim construction results were mixed but provided a generally constructive foundation for Solstice's non-infringement defense, particularly with respect to the PE-5000 Series products, while certain constructions strengthened Apex's infringement arguments with respect to the PE-12000 Series.

C. Expert discovery

Expert discovery opened on January 13, 2025. Both parties retained technical and damages experts, and the following reports were served:

Solstice's Experts:

• Dr. Miriam Ostrowski, Professor of Biomedical Engineering at Halford University, was retained to provide expert opinions on invalidity of the asserted patent claims and on claim construction. Dr. Ostrowski's opening expert report was served on January 27, 2025. Her report identified multiple prior art references that, in her opinion, anticipated or rendered obvious the asserted claims of all three patents-in-suit.

• Dr. Elena Marchetti, Managing Director of Pinnacle Economics Group LLC, was retained to provide expert analysis on damages. Dr. Marchetti's opening damages report was served on February 14, 2025. Her report opined that, in the event liability were established, the appropriate reasonable royalty would be substantially below the figures calculated by Apex's damages expert.

Apex's Experts:

• Dr. Calvin Ng was retained by Apex to provide an expert infringement opinion. Dr. Ng's opening infringement report was served on February 10, 2025, and set forth his opinions that each of the accused PrecisionEdge™ product series infringed the asserted claims of the '237, '884, and '105 Patents.

• Hugh Danaher, CFA, of Keystone Valuation Advisors LLC, was retained by Apex to provide expert damages analysis. Mr. Danaher's opening damages report, served on February 14, 2025, calculated reasonable royalty damages in the amount of $31,800,000, based on a hypothetical negotiation analysis and application of the Georgia-Pacific factors.

Rebuttal expert reports were exchanged by both parties on March 3, 2025. Dr. Ostrowski's rebuttal addressed Dr. Ng's infringement opinions, and Dr. Marchetti's rebuttal addressed Mr. Danaher's damages methodology and conclusions. Expert depositions were conducted during the weeks following the exchange of rebuttal reports.

D. Settlement Efforts and Dispositive Motions

The parties participated in a court-ordered mediation on March 17, 2025, before the Honorable Margaret Forsythe (Ret.) at Amberstone ADR Services in Wilmington, Delaware. Despite good-faith efforts by both sides, the mediation did not result in a resolution of the dispute.

On April 1, 2025, Solstice filed a Motion for Summary Judgment of Non-Infringement with respect to the PE-5000 Series products, arguing that the Court's claim constructions compelled a finding that the PE-5000 Series did not satisfy certain limitations of the asserted claims. On April 14, 2025, Apex filed a Cross-Motion for Partial Summary Judgment of Infringement with respect to the PE-12000 Series products, contending that certain structural features of the PE-12000 met all claim limitations as a matter of law.

On May 5, 2025, the Court denied both motions without prejudice, finding genuine issues of material fact remaining with respect to each motion. The Court simultaneously ordered the parties to participate in a second settlement conference.

The second settlement conference was held on May 12, 2025, before Magistrate Judge Colleen Pratt. While this conference did not immediately produce a final agreement, it served as a catalyst for renewed settlement discussions between the parties.

Intensive settlement negotiations ensued between May 19 and June 4, 2025, during which the parties exchanged multiple proposals and counterproposals. These negotiations involved direct communications between counsel, as well as consultations with the parties' respective business principals. Trial in this matter had been scheduled to commence on September 30, 2025.

IV. Settlement Terms

A. Execution of Settlement Documents

The parties executed a binding Term Sheet on June 10, 2025, memorializing the material terms of their agreement. A Definitive Settlement Agreement and Mutual Release (the "Settlement Agreement"), together with ancillary exhibits, was fully executed by all parties on June 16, 2025. An executed copy of the Settlement Agreement is enclosed with this letter, marked as confidential and subject to the settlement confidentiality provisions discussed below.

B. Principal Terms

The principal terms of the Settlement Agreement are summarized as follows:

1. Lump-Sum Payment. Solstice has agreed to pay Apex a total lump-sum settlement payment of Eight Million Seven Hundred Fifty Thousand Dollars ($8,750,000.00), payable in two tranches:

(a) Tranche 1: Five Million Two Hundred Fifty Thousand Dollars ($5,250,000.00), due and payable within ten (10) business days of the execution of the Settlement Agreement (i.e., on or before June 30, 2025).

(b) Tranche 2: Three Million Five Hundred Thousand Dollars ($3,500,000.00), due and payable on or before September 15, 2025.

All payments are to be deposited into an escrow account established at Tidewater Fiduciary Services, Inc. (located at 300 Delaware Avenue, Suite 1400, Wilmington, Delaware 19801; contact: Jennifer Hsu, Vice President, Escrow Services) and released to Apex within three (3) business days following confirmation of deposit.

2. Running Royalty. In addition to the lump-sum payment, Solstice has agreed to pay Apex a running royalty of three and three-quarters percent (3.75%) of Net Sales (as defined in the Settlement Agreement) of Licensed Products for the remaining life of the Licensed Patents. The Licensed Products encompass the PrecisionEdge™ PE-5000, PE-12000, and PE-15000 series products and their successors. The running royalty is subject to the following parameters:

(a) An annual royalty floor of Five Hundred Thousand Dollars ($500,000.00), commencing with calendar year 2026.

(b) An annual royalty cap of One Million Eight Hundred Thousand Dollars ($1,800,000.00) per calendar year.

3. License Grant. The Settlement Agreement provides for a non-exclusive, non-transferable, worldwide license to Solstice under the '237 Patent, the '884 Patent, and the '105 Patent, including any continuations, divisionals, or reissues thereof, solely in the field of laparoscopic surgical access devices. Solstice's right to sublicense is limited to sublicenses granted to Solstice's contract manufacturers for the purpose of manufacturing Licensed Products on Solstice's behalf.

4. Covenant Not to Sue. Apex has provided a covenant not to sue, pursuant to which Apex covenants that it will not assert any patent in the Apex Trocar Patent Family — comprising fourteen (14) issued United States patents and six (6) pending continuation applications — against Solstice or any of its subsidiaries for products within the licensed field during the term of the license.

5. Most-Favored Licensee. The Settlement Agreement includes a most-favored licensee provision, under which, if Apex enters into a license agreement with any third party at a running royalty rate below 3.75% for products within the same licensed field, Solstice's running royalty rate shall be adjusted prospectively to match the lower rate.

6. Mutual Release. The parties have agreed to a full mutual release of all claims, counterclaims, and defenses asserted in Case No. 1:24-cv-00587-RGA, effective upon execution of the Settlement Agreement and the filing of the Stipulation of Dismissal.

7. Dismissal. The parties will file a Stipulation of Dismissal with Prejudice pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii), with each party bearing its own costs and attorneys' fees. The target filing date for the Stipulation of Dismissal is on or about July 1, 2025.

8. Confidentiality. The terms and conditions of the settlement are subject to mutual confidentiality obligations. The parties have agreed that any joint public statement regarding the resolution of the matter shall be limited to the following: "The matter has been resolved on mutually agreeable terms."

9. Governing Law. The Settlement Agreement is governed by and construed in accordance with the laws of the State of Delaware, without regard to conflict of laws principles.

V. Insurance Coverage Analysis and Confirmation

As you are aware, Policy No. HSI-IP-2023-04891 provides coverage for patent infringement defense costs, including attorneys' fees and litigation expenses incurred in the defense of covered claims. Importantly, however, the Policy does not extend coverage to settlement payments, royalty obligations, or other amounts paid to a plaintiff in resolution of the underlying patent infringement claims.

Accordingly, we confirm that the $8,750,000.00 lump-sum settlement payment and the ongoing running royalty obligations described above are borne entirely by Solstice and are not being submitted for coverage or reimbursement under the Policy.

For purposes of completeness, we note the following Policy parameters relevant to this matter:

• Self-Insured Retention (SIR): $250,000.00. The SIR was exhausted during the initial months of the defense, at which point Halcyon's coverage obligations for defense costs commenced.

• Policy Limits: $5,000,000.00 per occurrence / $10,000,000.00 aggregate.

As detailed in Section VI below, the total defense costs incurred by Calderwood & Harkness in this matter, net of the SIR, are well within the per-occurrence and aggregate limits of the Policy.

VI. Summary of Defense Fees and Costs

Total fees and costs billed by Calderwood & Harkness LLP through June 1, 2025, in connection with the defense of this matter are as follows:

A breakdown of the principal cost categories within the $235,839.42 in disbursements is provided below:

Please note that the separate engagement fees of Kendrick & Lau LLP, in the amount of $184,500.00, incurred for prior art search and freedom-to-operate analysis, were billed directly by that firm to Solstice and are not included in the Calderwood & Harkness fee and cost totals set forth above. We understand that those fees have been submitted separately for coverage consideration under the Policy.

Coverage Summary. Of the total $2,847,319.42 billed by Calderwood & Harkness, Halcyon Specialty Insurance Co. has covered $2,597,319.42, representing the total amount billed less the $250,000.00 self-insured retention. The remaining $250,000.00 (the SIR) was borne directly by Solstice.

Given the settlement of this matter, no further defense fees are anticipated. However, we note that a final invoice reflecting any remaining unbilled time through June 17, 2025 — including time associated with the preparation of this letter, the finalization of settlement documentation, and the preparation of the Stipulation of Dismissal — will be submitted separately if applicable, and any such amounts will be subject to the terms and conditions of the Policy.

VII. Confirmation of Billing Rate Information

For the avoidance of doubt and for the completeness of Halcyon's claim file, we confirm the Calderwood & Harkness LLP billing rates applicable during this engagement (2024–2025), which have been consistent with the rates previously approved by Halcyon:

The engagement team for this matter consisted of the following attorneys:

• Marcus Delgado, Responsible Partner

• Catherine Bloom, Billing Partner

• Christy Bauer, Lead Associate

• Peter Vassiliev, Working Associate

Additional attorneys and paralegals were staffed on the matter from time to time as required by the demands of the case, and their time is reflected in the periodic invoices previously submitted to Halcyon.

VIII. Request for Confirmation and Next Steps

We respectfully request that Halcyon take the following actions in connection with the resolution of this matter:

1. Acknowledgment of Receipt. Please acknowledge receipt of this settlement reporting letter at your earliest convenience.

2. File Closure Confirmation. We request that Halcyon confirm that its claim file for Claim/Policy No. HSI-IP-2023-04891 may be closed upon the filing of the Stipulation of Dismissal with Prejudice, which is targeted for on or about July 1, 2025.

3. Stipulation of Dismissal. Calderwood & Harkness will provide Halcyon with a copy of the filed Stipulation of Dismissal once it has been entered by the Court.

4. Additional Information. Should Halcyon require any additional information, documentation, or clarification in order to close its claim file, we are happy to provide the same promptly upon request.

5. Confidentiality of Settlement Terms. We confirm that all settlement documentation provided with this letter is subject to the confidentiality provisions of the Settlement Agreement. We respectfully request that Halcyon maintain the confidentiality of the settlement terms in accordance with its obligations under the Policy and applicable law, and that access to the enclosed Settlement Agreement within Halcyon's organization be limited to those individuals with a need to know for claims administration purposes.

IX. Reservation of Rights

This letter is provided for informational and settlement reporting purposes only. Nothing contained herein is intended to, nor shall it be construed to, waive any rights of the Insured under the Policy, including, without limitation, any right to seek coverage for additional defense-related costs that may hereafter be identified or that may arise in connection with the finalization and dismissal of this action. Solstice expressly reserves all rights and remedies available to it under the Policy.

We wish to express our sincere appreciation for Halcyon's cooperation and timely processing of coverage throughout the course of this matter. Your responsiveness and professionalism in administering the defense cost obligations under the Policy contributed meaningfully to the efficient management of this litigation.

Should you have any questions regarding the foregoing, or if you would like to discuss any aspect of this letter or the settlement in further detail, please do not hesitate to contact me directly at the number or email address listed below.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Marcus Delgado Partner

Telephone: (302) 555-4170

Email: mdelgado@calderwoodharkness.com

cc:

Eamon Rourke, General Counsel, Solstice Biomedical Devices Ltd. Brendan Molloy, Chief Financial Officer, Solstice Biomedical Devices Ltd. Catherine Bloom, Billing Partner, Calderwood & Harkness LLP

Enclosures:

1. Copy of Executed Settlement Agreement and Mutual Release (Execution Version, dated June 16, 2025) — marked "CONFIDENTIAL — Subject to Settlement Confidentiality Provisions"

2. Final Fee and Cost Summary through June 1, 2025 (Matter No. 10294.0017)

Category	Amount
Attorney Fees	$2,611,480.00
Costs and Disbursements	$235,839.42
Total Fees and Costs	$2,847,319.42
Disbursement Category	Amount
Expert Fees — Dr. Miriam Ostrowski (invalidity/claim construction; $750/hr)	$127,500.00
Expert Fees — Dr. Elena Marchetti / Pinnacle Economics Group LLC (damages; $850/hr)	$89,250.00
E-discovery Vendor — DataVault Litigation Solutions, LLC (1.2 TB processed)	$141,200.00
Court Reporter Fees, Travel, and Miscellaneous Costs	Balance
Timekeeper Level	Hourly Rate
Partners	$1,250.00/hr
Senior Associates	$875.00/hr
Associates	$725.00/hr

CALDERWOOD & HARKNESS LLP Attorneys at Law
1201 Market Street, Suite 2500 Wilmington, DE 19801
Main Office: 299 Park Avenue, 35th Floor, New York, NY 10171
Marcus Delgado, Partner Telephone: (302) 555-4170 Facsimile: (302) 555-4171
Email: mdelgado@calderwoodharkness.com
June 17, 2025
Via Email and First-Class Mail
Sandra Keene Claims Adjuster Halcyon Specialty Insurance Co. 185 Asylum Street Hartford, CT 06103
Re: Settlement Reporting — Apex Surgical Innovations, Inc. v. Solstice Biomedical, Inc. Case No. 1:24-cv-00587-RGA (U.S. District Court for the District of Delaware) Policy No. HSI-IP-2023-04891 Calderwood & Harkness Matter No. 10294.0017 Insured: Solstice Biomedical Devices Ltd. / Solstice Biomedical, Inc.
Dear Ms. Keene:
I. Purpose and Introduction
This letter constitutes formal notice of the settlement of the above-captioned patent infringement action, Apex Surgical Innovations, Inc. v. Solstice Biomedical, Inc., Case No. 1:24-cv-00587-RGA, pending in the United States District Court for the District of Delaware. This letter is provided pursuant to the settlement reporting obligations set forth in intellectual Property Defense Liability Policy No. HSI-IP-2023-04891 (the "Policy") issued by Halcyon Specialty Insurance Co. ("Halcyon") to Solstice Biomedical Devices Ltd. and its subsidiaries.
Calderwood & Harkness LLP serves as outside defense counsel for the insured parties in this matter: Solstice Biomedical Devices Ltd., an Irish private limited company registered with the Companies Registration Office under CRO No. 648217, and its wholly-owned U.S. operating subsidiary, Solstice Biomedical, Inc., a corporation organized and existing under the laws of the State of Delaware (EIN: 84-3291056) (collectively, "Solstice" or the "Insured"). I serve as the Responsible Partner on this engagement.
As you are aware, Calderwood & Harkness provided Halcyon with an initial coverage notification letter on May 13, 2024, promptly following the filing of the underlying complaint. Halcyon acknowledged coverage under the Policy and issued its reservation of rights letter dated June 3, 2024. Throughout the pendency of this litigation, we have maintained regular communications with your office regarding the status of the proceedings, and we are grateful for Halcyon's cooperative engagement with respect to the defense of this matter.
The purpose of this letter is to report on the terms of the definitive settlement reached between the parties, provide a summary of the litigation proceedings and the defense fees and costs incurred, confirm the insurance coverage posture with respect to the settlement and defense costs, and outline the next steps necessary to close Halcyon's claim file in connection with this matter.
II. Background of the Litigation
On May 9, 2024, Apex Surgical Innovations, Inc. ("Apex"), a corporation organized and existing under the laws of the State of Delaware (EIN: 51-0483762), with its principal office located at 1220 North Market Street, Suite 550, Wilmington, Delaware 19801, filed a complaint for patent infringement against Solstice Biomedical, Inc. in the United States District Court for the District of Delaware. The action was assigned to Chief Judge Richard G. Andrews as Case No. 1:24-cv-00587-RGA. Apex was represented throughout the litigation by the law firm Hargrove, Tate & Bennington LLP, with Victoria Stanton serving as lead partner on the matter.
A. Patents-in-Suit. In its complaint, Apex alleged that Solstice's PrecisionEdge™ line of laparoscopic trocar assemblies infringed three Apex-owned United States utility patents. The named inventor on all three patents-in-suit is Dr. Raymond Szabo, Vice President of Engineering at Apex. The three asserted patents are as follows:
1. U.S. Patent No. 9,814,237 (the "'237 Patent"), entitled "Locking Seal Assembly for Minimally Invasive Surgical Access Device," issued on November 14, 2017, with a calculated expiration date of June 22, 2035. Apex asserted infringement of Claims 1, 3, 7, and 12 of the '237 Patent.
2. U.S. Patent No. 10,271,884 (the "'884 Patent"), entitled "Retractable Blade Deployment Mechanism for Trocar Systems," issued on April 30, 2019, with a calculated expiration date of September 15, 2036. Apex asserted infringement of Claims 1, 2, 5, 9, and 14 of the '884 Patent.
3. U.S. Patent No. 10,932,105 (the "'105 Patent"), entitled "Integrated Insufflation Valve and Seal for Laparoscopic Trocar," issued on March 2, 2021, with a calculated expiration date of January 10, 2038. Apex asserted infringement of Claims 1, 4, and 8 of the '105 Patent.
B. Accused Products
Apex's infringement allegations were directed at Solstice's PrecisionEdge™ product line, specifically the following three product series:
• The PrecisionEdge™ PE-5000 Series (5 mm trocar assembly);
• The PrecisionEdge™ PE-12000 Series (12 mm trocar assembly); and
• The PrecisionEdge™ PE-15000 Series (15 mm trocar assembly).
These products are manufactured by Solstice and distributed to hospitals, ambulatory surgical centers, and medical device distributors across the United States and internationally. The PrecisionEdge™ line represents a significant portion of Solstice's laparoscopic surgical access device revenue.
C. Responsive Pleadings
Solstice was served with the complaint on May 23, 2024. On June 14, 2024, Calderwood & Harkness filed an Answer, Affirmative Defenses, and Counterclaims on behalf of Solstice. The responsive pleading asserted, among other defenses, non-infringement of all asserted claims of the three patents-in-suit, invalidity of the asserted claims under 35 U.S.C. §§ 102 and 103, and inequitable conduct before the United States Patent and Trademark Office during the prosecution of the patents-in-suit.
III. Summary of Litigation Proceedings
A. Scheduling and discovery
Following an initial case management conference, the Court entered its Scheduling Order on July 2, 2024. The parties filed their Joint discovery Plan on July 15, 2024, which set forth the agreed-upon framework for the phased exchange of discovery materials.
Fact discovery was extensive. Solstice produced a total of 48,217 documents in response to Apex's document requests, bearing Bates numbers SBD-000001 through SBD-048217. Apex, in turn, produced 31,450 documents, bearing Bates numbers APEX-000001 through APEX-031450. Given the volume of electronically stored information at issue, the parties engaged DataVault Litigation Solutions, LLC to conduct technology-assisted review. DataVault processed approximately 1.2 terabytes of data, encompassing a universe of approximately 312,000 documents, which were reviewed for relevance, privilege, and responsiveness through a combination of predictive coding models and manual attorney review.
The parties also exchanged interrogatories, requests for admission, and conducted depositions of key fact witnesses from both sides, including representatives from Solstice's engineering, product development, and sales departments, as well as Dr. Raymond Szabo and other Apex personnel.
B. Claim Construction
Claim construction proceedings were conducted in accordance with the Court's scheduling order and the requirements of Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996). The parties submitted opening and responsive claim construction briefs, along with supporting declarations, addressing the proper construction of disputed claim terms across the three patents-in-suit.
The Markman hearing was held before Chief Judge Andrews on November 18, 2024. Following the hearing, the Court issued its Claim Construction Order on December 6, 2024. A total of nine disputed claim terms were construed by the Court. Of these nine constructions, five were favorable to Solstice's positions and four were favorable to Apex's positions. The claim construction results were mixed but provided a generally constructive foundation for Solstice's non-infringement defense, particularly with respect to the PE-5000 Series products, while certain constructions strengthened Apex's infringement arguments with respect to the PE-12000 Series.
C. Expert discovery
Expert discovery opened on January 13, 2025. Both parties retained technical and damages experts, and the following reports were served:
Solstice's Experts:
• Dr. Miriam Ostrowski, Professor of Biomedical Engineering at Halford University, was retained to provide expert opinions on invalidity of the asserted patent claims and on claim construction. Dr. Ostrowski's opening expert report was served on January 27, 2025. Her report identified multiple prior art references that, in her opinion, anticipated or rendered obvious the asserted claims of all three patents-in-suit.
• Dr. Elena Marchetti, Managing Director of Pinnacle Economics Group LLC, was retained to provide expert analysis on damages. Dr. Marchetti's opening damages report was served on February 14, 2025. Her report opined that, in the event liability were established, the appropriate reasonable royalty would be substantially below the figures calculated by Apex's damages expert.
Apex's Experts:
• Dr. Calvin Ng was retained by Apex to provide an expert infringement opinion. Dr. Ng's opening infringement report was served on February 10, 2025, and set forth his opinions that each of the accused PrecisionEdge™ product series infringed the asserted claims of the '237, '884, and '105 Patents.
• Hugh Danaher, CFA, of Keystone Valuation Advisors LLC, was retained by Apex to provide expert damages analysis. Mr. Danaher's opening damages report, served on February 14, 2025, calculated reasonable royalty damages in the amount of $31,800,000, based on a hypothetical negotiation analysis and application of the Georgia-Pacific factors.
Rebuttal expert reports were exchanged by both parties on March 3, 2025. Dr. Ostrowski's rebuttal addressed Dr. Ng's infringement opinions, and Dr. Marchetti's rebuttal addressed Mr. Danaher's damages methodology and conclusions. Expert depositions were conducted during the weeks following the exchange of rebuttal reports.
D. Settlement Efforts and Dispositive Motions
The parties participated in a court-ordered mediation on March 17, 2025, before the Honorable Margaret Forsythe (Ret.) at Amberstone ADR Services in Wilmington, Delaware. Despite good-faith efforts by both sides, the mediation did not result in a resolution of the dispute.
On April 1, 2025, Solstice filed a Motion for Summary Judgment of Non-Infringement with respect to the PE-5000 Series products, arguing that the Court's claim constructions compelled a finding that the PE-5000 Series did not satisfy certain limitations of the asserted claims. On April 14, 2025, Apex filed a Cross-Motion for Partial Summary Judgment of Infringement with respect to the PE-12000 Series products, contending that certain structural features of the PE-12000 met all claim limitations as a matter of law.
On May 5, 2025, the Court denied both motions without prejudice, finding genuine issues of material fact remaining with respect to each motion. The Court simultaneously ordered the parties to participate in a second settlement conference.
The second settlement conference was held on May 12, 2025, before Magistrate Judge Colleen Pratt. While this conference did not immediately produce a final agreement, it served as a catalyst for renewed settlement discussions between the parties.
Intensive settlement negotiations ensued between May 19 and June 4, 2025, during which the parties exchanged multiple proposals and counterproposals. These negotiations involved direct communications between counsel, as well as consultations with the parties' respective business principals. Trial in this matter had been scheduled to commence on September 30, 2025.
IV. Settlement Terms
A. Execution of Settlement Documents
The parties executed a binding Term Sheet on June 10, 2025, memorializing the material terms of their agreement. A Definitive Settlement Agreement and Mutual Release (the "Settlement Agreement"), together with ancillary exhibits, was fully executed by all parties on June 16, 2025. An executed copy of the Settlement Agreement is enclosed with this letter, marked as confidential and subject to the settlement confidentiality provisions discussed below.
B. Principal Terms
The principal terms of the Settlement Agreement are summarized as follows:
1. Lump-Sum Payment. Solstice has agreed to pay Apex a total lump-sum settlement payment of Eight Million Seven Hundred Fifty Thousand Dollars ($8,750,000.00), payable in two tranches:
(a) Tranche 1: Five Million Two Hundred Fifty Thousand Dollars ($5,250,000.00), due and payable within ten (10) business days of the execution of the Settlement Agreement (i.e., on or before June 30, 2025).
(b) Tranche 2: Three Million Five Hundred Thousand Dollars ($3,500,000.00), due and payable on or before September 15, 2025.
All payments are to be deposited into an escrow account established at Tidewater Fiduciary Services, Inc. (located at 300 Delaware Avenue, Suite 1400, Wilmington, Delaware 19801; contact: Jennifer Hsu, Vice President, Escrow Services) and released to Apex within three (3) business days following confirmation of deposit.
2. Running Royalty. In addition to the lump-sum payment, Solstice has agreed to pay Apex a running royalty of three and three-quarters percent (3.75%) of Net Sales (as defined in the Settlement Agreement) of Licensed Products for the remaining life of the Licensed Patents. The Licensed Products encompass the PrecisionEdge™ PE-5000, PE-12000, and PE-15000 series products and their successors. The running royalty is subject to the following parameters:
(a) An annual royalty floor of Five Hundred Thousand Dollars ($500,000.00), commencing with calendar year 2026.
(b) An annual royalty cap of One Million Eight Hundred Thousand Dollars ($1,800,000.00) per calendar year.
3. License Grant. The Settlement Agreement provides for a non-exclusive, non-transferable, worldwide license to Solstice under the '237 Patent, the '884 Patent, and the '105 Patent, including any continuations, divisionals, or reissues thereof, solely in the field of laparoscopic surgical access devices. Solstice's right to sublicense is limited to sublicenses granted to Solstice's contract manufacturers for the purpose of manufacturing Licensed Products on Solstice's behalf.
4. Covenant Not to Sue. Apex has provided a covenant not to sue, pursuant to which Apex covenants that it will not assert any patent in the Apex Trocar Patent Family — comprising fourteen (14) issued United States patents and six (6) pending continuation applications — against Solstice or any of its subsidiaries for products within the licensed field during the term of the license.
5. Most-Favored Licensee. The Settlement Agreement includes a most-favored licensee provision, under which, if Apex enters into a license agreement with any third party at a running royalty rate below 3.75% for products within the same licensed field, Solstice's running royalty rate shall be adjusted prospectively to match the lower rate.
6. Mutual Release. The parties have agreed to a full mutual release of all claims, counterclaims, and defenses asserted in Case No. 1:24-cv-00587-RGA, effective upon execution of the Settlement Agreement and the filing of the Stipulation of Dismissal.
7. Dismissal. The parties will file a Stipulation of Dismissal with Prejudice pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii), with each party bearing its own costs and attorneys' fees. The target filing date for the Stipulation of Dismissal is on or about July 1, 2025.
8. Confidentiality. The terms and conditions of the settlement are subject to mutual confidentiality obligations. The parties have agreed that any joint public statement regarding the resolution of the matter shall be limited to the following: "The matter has been resolved on mutually agreeable terms."
9. Governing Law. The Settlement Agreement is governed by and construed in accordance with the laws of the State of Delaware, without regard to conflict of laws principles.
V. Insurance Coverage Analysis and Confirmation
As you are aware, Policy No. HSI-IP-2023-04891 provides coverage for patent infringement defense costs, including attorneys' fees and litigation expenses incurred in the defense of covered claims. Importantly, however, the Policy does not extend coverage to settlement payments, royalty obligations, or other amounts paid to a plaintiff in resolution of the underlying patent infringement claims.
Accordingly, we confirm that the $8,750,000.00 lump-sum settlement payment and the ongoing running royalty obligations described above are borne entirely by Solstice and are not being submitted for coverage or reimbursement under the Policy.
For purposes of completeness, we note the following Policy parameters relevant to this matter:
• Self-Insured Retention (SIR): $250,000.00. The SIR was exhausted during the initial months of the defense, at which point Halcyon's coverage obligations for defense costs commenced.
• Policy Limits: $5,000,000.00 per occurrence / $10,000,000.00 aggregate.
As detailed in Section VI below, the total defense costs incurred by Calderwood & Harkness in this matter, net of the SIR, are well within the per-occurrence and aggregate limits of the Policy.
VI. Summary of Defense Fees and Costs
Total fees and costs billed by Calderwood & Harkness LLP through June 1, 2025, in connection with the defense of this matter are as follows:
A breakdown of the principal cost categories within the $235,839.42 in disbursements is provided below:
Please note that the separate engagement fees of Kendrick & Lau LLP, in the amount of $184,500.00, incurred for prior art search and freedom-to-operate analysis, were billed directly by that firm to Solstice and are not included in the Calderwood & Harkness fee and cost totals set forth above. We understand that those fees have been submitted separately for coverage consideration under the Policy.
Coverage Summary. Of the total $2,847,319.42 billed by Calderwood & Harkness, Halcyon Specialty Insurance Co. has covered $2,597,319.42, representing the total amount billed less the $250,000.00 self-insured retention. The remaining $250,000.00 (the SIR) was borne directly by Solstice.
Given the settlement of this matter, no further defense fees are anticipated. However, we note that a final invoice reflecting any remaining unbilled time through June 17, 2025 — including time associated with the preparation of this letter, the finalization of settlement documentation, and the preparation of the Stipulation of Dismissal — will be submitted separately if applicable, and any such amounts will be subject to the terms and conditions of the Policy.
VII. Confirmation of Billing Rate Information
For the avoidance of doubt and for the completeness of Halcyon's claim file, we confirm the Calderwood & Harkness LLP billing rates applicable during this engagement (2024–2025), which have been consistent with the rates previously approved by Halcyon:
The engagement team for this matter consisted of the following attorneys:
• Marcus Delgado, Responsible Partner
• Catherine Bloom, Billing Partner
• Christy Bauer, Lead Associate
• Peter Vassiliev, Working Associate
Additional attorneys and paralegals were staffed on the matter from time to time as required by the demands of the case, and their time is reflected in the periodic invoices previously submitted to Halcyon.
VIII. Request for Confirmation and Next Steps
We respectfully request that Halcyon take the following actions in connection with the resolution of this matter:
1. Acknowledgment of Receipt. Please acknowledge receipt of this settlement reporting letter at your earliest convenience.
2. File Closure Confirmation. We request that Halcyon confirm that its claim file for Claim/Policy No. HSI-IP-2023-04891 may be closed upon the filing of the Stipulation of Dismissal with Prejudice, which is targeted for on or about July 1, 2025.
3. Stipulation of Dismissal. Calderwood & Harkness will provide Halcyon with a copy of the filed Stipulation of Dismissal once it has been entered by the Court.
4. Additional Information. Should Halcyon require any additional information, documentation, or clarification in order to close its claim file, we are happy to provide the same promptly upon request.
5. Confidentiality of Settlement Terms. We confirm that all settlement documentation provided with this letter is subject to the confidentiality provisions of the Settlement Agreement. We respectfully request that Halcyon maintain the confidentiality of the settlement terms in accordance with its obligations under the Policy and applicable law, and that access to the enclosed Settlement Agreement within Halcyon's organization be limited to those individuals with a need to know for claims administration purposes.
IX. Reservation of Rights
This letter is provided for informational and settlement reporting purposes only. Nothing contained herein is intended to, nor shall it be construed to, waive any rights of the Insured under the Policy, including, without limitation, any right to seek coverage for additional defense-related costs that may hereafter be identified or that may arise in connection with the finalization and dismissal of this action. Solstice expressly reserves all rights and remedies available to it under the Policy.
We wish to express our sincere appreciation for Halcyon's cooperation and timely processing of coverage throughout the course of this matter. Your responsiveness and professionalism in administering the defense cost obligations under the Policy contributed meaningfully to the efficient management of this litigation.
Should you have any questions regarding the foregoing, or if you would like to discuss any aspect of this letter or the settlement in further detail, please do not hesitate to contact me directly at the number or email address listed below.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Marcus Delgado Partner
Telephone: (302) 555-4170
Email: mdelgado@calderwoodharkness.com
cc:
Eamon Rourke, General Counsel, Solstice Biomedical Devices Ltd. Brendan Molloy, Chief Financial Officer, Solstice Biomedical Devices Ltd. Catherine Bloom, Billing Partner, Calderwood & Harkness LLP
Enclosures:
1. Copy of Executed Settlement Agreement and Mutual Release (Execution Version, dated June 16, 2025) — marked "CONFIDENTIAL — Subject to Settlement Confidentiality Provisions"
2. Final Fee and Cost Summary through June 1, 2025 (Matter No. 10294.0017)
Category | Amount
Attorney Fees | $2,611,480.00
Costs and Disbursements | $235,839.42
Total Fees and Costs | $2,847,319.42
Disbursement Category | Amount
Expert Fees — Dr. Miriam Ostrowski (invalidity/claim construction; $750/hr) | $127,500.00
Expert Fees — Dr. Elena Marchetti / Pinnacle Economics Group LLC (damages; $850/hr) | $89,250.00
E-discovery Vendor — DataVault Litigation Solutions, LLC (1.2 TB processed) | $141,200.00
Court Reporter Fees, Travel, and Miscellaneous Costs | Balance
Timekeeper Level | Hourly Rate
Partners | $1,250.00/hr
Senior Associates | $875.00/hr
Associates | $725.00/hr

CALDERWOOD & HARKNESS LLP Attorneys at Law

CALDERWOOD & HARKNESS LLP

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