PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
This memorandum constitutes attorney work product and is protected from disclosure by the attorney work product doctrine, the attorney-client privilege, and all other applicable privileges. This document was prepared in anticipation of litigation and at the direction of counsel. It is not to be disclosed to any person outside of the attorney-client relationship without the express written consent of counsel.
INTERNAL MEMORANDUM
Date: October 21, 2024
TO: Marcus Delgado, Responsible Partner, intellectual Property Christy Bauer, Lead Associate, intellectual Property
FROM: Peter Vassiliev, Working Associate, intellectual Property
RE: Key Document Analysis — Review of Apex Surgical Innovations, Inc. Production (APEX-000001 through APEX-031450)
MATTER: Solstice Biomedical Devices Ltd. — Patent Infringement Defense, Case No. 1:24-cv-00587-RGA (D. Del.)
MATTER NO.: 10294.0017
CLIENT: Solstice Biomedical Devices Ltd. / Solstice Biomedical, Inc.
I. EXECUTIVE SUMMARY
This memorandum summarizes the key documents identified during my review of the document production served by Apex Surgical Innovations, Inc. ("Apex") on October 7, 2024. The production comprises 31,450 documents bearing Bates numbers APEX-000001 through APEX-031450, produced in response to Solstice Biomedical Devices Ltd.'s ("Solstice") First Set of Requests for Production of Documents (38 requests, served August 19, 2024).
The review was conducted using the technology-assisted review ("TAR") protocol implemented by DataVault Litigation Solutions, LLC ("DataVault"), our retained e-discovery vendor, and was supplemented by targeted manual review of prioritized custodial collections from three key Apex custodians. The TAR workflow was consistent with the TAR Protocol Memorandum dated August 12, 2024, which was previously circulated to this team and approved by Marcus Delgado.
The Apex production encompasses a broad range of document types, including prosecution correspondence with outside patent counsel, inventor laboratory notebooks, internal technical memoranda, prior art search reports and analyses, licensing files and related negotiation correspondence, commercial sales data, financial projections, marketing materials, and corporate communications. These documents relate primarily to the three patents-in-suit: U.S. Patent No. 9,814,237 ("the '237 Patent"), U.S. Patent No. 10,271,884 ("the '884 Patent"), and U.S. Patent No. 10,932,105 ("the '105 Patent"), each of which Apex asserts against Solstice's PrecisionEdge™ trocar product lines in this action.
The key findings from this review are organized into five thematic categories:
1. Prosecution Correspondence and PTO File Histories — Documents revealing the prosecution history of the three asserted patents, including narrowing amendments, examiner interview summaries, and internal strategy discussions that bear directly on claim construction and prosecution history estoppel.
2. Inventor Notebooks and Development Records of Dr. Raymond Szabo — Scanned laboratory notebooks and technical records documenting the conception, development, and reduction to practice of the claimed inventions, including references to prior art and competitor products that may not have been disclosed to the United States Patent and Trademark Office ("USPTO").
3. Prior Art References Known to Apex — Internal prior art search reports, duty-of-candor discussions, freedom-to-operate analyses, and post-issuance validity assessments that identify prior art references directly relevant to Solstice's invalidity defenses and inequitable conduct counterclaim.
4. Prior Licensing Agreements and Negotiations — Executed license agreements, term sheets, and negotiation correspondence involving the asserted patents, which provide comparable-license benchmarks critical to the damages analysis under the Georgia-Pacific reasonable royalty framework.
5. Commercial Documents Relevant to Damages — Internal sales reports, financial projections, marketing analyses, and corporate communications that bear on the reasonable royalty base, Apex's competitive motivations for filing this action, and the methodological soundness of Apex's claimed damages.
These findings have significant implications for Solstice's defenses of non-infringement, invalidity under 35 U.S.C. §§ 102 and 103, and inequitable conduct, as well as for Solstice's damages rebuttal. The production reveals prosecution history narrowing amendments that support estoppel-based limitations on claim scope, prior art references and inventor notebook entries that bolster invalidity arguments, internal discussions about the duty of candor that may support the inequitable conduct counterclaim, and licensing and commercial data that undermine the $31,800,000 reasonable royalty damages figure advanced by Apex's damages expert, Hugh Danaher.
Where applicable, this memorandum cross-references Solstice's own document production (Bates Nos. SBD-000001 through SBD-048217, produced on September 30, 2024) to identify overlapping documents, responsive counterparts, and documents that should be analyzed in conjunction with the Apex materials. This memorandum also identifies gaps and potential deficiencies in the Apex production that may require follow-up through a deficiency letter or supplemental discovery requests.
II. SCOPE AND METHODOLOGY OF REVIEW
A. Production Overview
Apex served its document production on October 7, 2024, via secure FTP transfer to DataVault Litigation Solutions, LLC. The production was made in response to Solstice's First Set of Requests for Production of Documents, comprising 38 individual requests served on August 19, 2024. The production contains a total of 31,450 documents, with Bates numbers running consecutively from APEX-000001 through APEX-031450.
The production was delivered in a mixed format, reflecting the varied nature of the underlying documents. Native-format files constitute the majority of the production and include email messages (in MSG and PST formats), spreadsheets (in XLSX format), word-processing documents (in DOCX format), and presentation files (in PPTX format). A substantial portion of the production was also produced as single-page TIFF images with accompanying extracted text files (in TXT format) and associated load files, consistent with the parties' agreed-upon ESI Protocol entered by the Court on July 15, 2024. A smaller but significant subset of the production consists of scanned hard-copy documents — most notably the inventor laboratory notebooks of Dr. Raymond Szabo, which were produced as multi-page PDF files with OCR-generated text layers.
The production was accompanied by a cover letter from Hargrove, Tate & Bennington LLP (counsel for Apex, attention Victoria Stanton and Derek Loomis) dated October 7, 2024, which identified the custodians whose files were searched and the search terms and date ranges applied. The cover letter also referenced Apex's privilege log, which Apex indicated would be served separately on a rolling basis, with the initial log expected by October 28, 2024. That privilege log has not yet been received as of the date of this memorandum and will be analyzed separately upon receipt.
B. Review Protocol
The review of the Apex production followed the workflow established in the TAR Protocol Memorandum dated August 12, 2024, which was developed in consultation with DataVault and approved by Marcus Delgado. The review proceeded in the following stages:
Stage 1: Ingestion and Processing. DataVault ingested the full production into its Relativity workspace on October 8, 2024. All documents were processed, de-duplicated (where exact duplicates existed within the production), and indexed for full-text searching. Documents were coded with basic metadata fields, including custodian, date, document type, and file format.
Stage 2: TAR-Assisted Review. The TAR model was initialized using a seed set of 500 documents, which I manually reviewed and coded for relevance between October 9 and October 11, 2024. The seed set was selected using a stratified random sampling methodology, with oversampling of documents from the three key Apex custodians: Dr. Raymond Szabo (Vice President, Engineering; Named Inventor on all three asserted patents), Dr. Priya Chandrasekaran (Chief intellectual Property Officer), and Martin Hale (General Counsel). Three iterative training rounds were conducted between October 11 and October 14, 2024, with each round refining the TAR model's predictive coding based on my coding decisions on successive batches of documents. By the conclusion of the third training round, the TAR model achieved a recall rate of approximately 91% and a precision rate of approximately 87%, which DataVault confirmed is consistent with industry-accepted benchmarks for predictive coding in patent litigation.
Stage 3: Prioritized Manual Review. The TAR model flagged approximately 4,200 documents as "highly relevant" (confidence score exceeding 85%). These documents were subjected to a full manual review, which I conducted between October 14 and October 19, 2024. During this review, each document was coded for relevance to specific defense themes (non-infringement, invalidity, inequitable conduct, damages), assigned a priority level (High, Medium, or Low), and tagged with issue-specific codes corresponding to the five thematic categories described in this memorandum.
Stage 4: Targeted Manual Review. In addition to the TAR-flagged documents, I conducted a targeted manual review of approximately 1,800 documents that fell within specific document-type categories identified as high-priority regardless of their TAR confidence scores. These categories included: (a) licensing agreements and related negotiation correspondence; (b) prosecution file correspondence (including any documents classified as relating to USPTO communications); and (c) documents authored by or sent to Dr. Szabo relating to product development or prior art. The targeted review was completed between October 18 and October 20, 2024.
Stage 5: Spot-Check Review. Christy Bauer conducted spot-check reviews of approximately 200 documents from both the TAR-flagged set and the targeted review set to verify coding accuracy and consistency. No material coding discrepancies were identified during the spot-check process.
In total, approximately 6,000 documents were subjected to detailed manual review (4,200 TAR-flagged documents plus 1,800 targeted-review documents, with some overlap between the two sets). The remaining documents in the production — those that received low relevance scores from the TAR model and did not fall within the targeted review categories — have been preserved in the Relativity workspace and remain available for additional review if future developments in the case warrant.
C. Organization of This Memorandum
The substantive findings of this review are organized into five thematic categories, as outlined in the Executive Summary. Each category section follows a consistent structure: (i) an overview of the document set within that category; (ii) identification of specific key documents by Bates number, with descriptions of their content and significance; (iii) an analysis of the documents' relevance to Solstice's defense strategy; and (iv) recommended follow-up actions.
Appendix A to this memorandum provides a consolidated table of key documents, listing each document by Bates number range, approximate date, custodian or author, document type, summary description, relevance category, and priority level. This table is intended to serve as a quick-reference guide for the litigation team and for our retained experts.
Appendix B provides summary statistics regarding the production and the review process.
III. CATEGORY 1: PROSECUTION CORRESPONDENCE AND PTO FILE HISTORIES
A. Overview. The Apex production includes a substantial volume of internal and external correspondence relating to the prosecution of the three asserted patents — the '237 Patent, the '884 Patent, and the '105 Patent — before the USPTO. These documents encompass communications between Apex's in-house intellectual property team, led by Dr. Priya Chandrasekaran (Chief IP Officer), and Apex's outside prosecution counsel. The production also includes file wrapper materials beyond what is publicly available through the USPTO's Patent Application Information Retrieval ("PAIR") system, including internal strategy memoranda, draft claim amendments, and correspondence reflecting Apex's deliberations regarding how to overcome examiner rejections and how to characterize the prior art during prosecution.
These documents are of central importance to several aspects of Solstice's defense. They provide intrinsic evidence bearing on claim construction, particularly for disputed claim terms that are the subject of the parties' joint claim construction statement filed on October 1, 2024. They also reveal narrowing amendments and arguments made during prosecution that may give rise to prosecution history estoppel, limiting Apex's ability to assert infringement under the doctrine of equivalents. Additionally, certain prosecution documents contain characterizations of the prior art that bear on Solstice's invalidity defense and may inform the analyses being conducted by Dr. Miriam Ostrowski and Kendrick & Lau LLP.
The prosecution-related documents are distributed across several Bates ranges within the production. The key documents for each patent are discussed below.
B. Key Documents — '237 Patent (U.S. Patent No. 9,814,237)
The '237 Patent, titled "Locking Seal Assembly for Minimally Invasive Surgical Access Device," was issued on November 14, 2017, with an expiration date of June 22, 2035. Apex asserts Claims 1, 3, 7, and 12 of the '237 Patent against Solstice's PrecisionEdge™ PE-5000 and PE-12000 Series trocar products. The '237 Patent is the earliest-issued of the three asserted patents and has the broadest claim scope with respect to sealing mechanisms.
The following key prosecution documents were identified in the production:
APEX-004312 through APEX-004387. This range comprises a series of internal email communications between Dr. Priya Chandrasekaran and Apex's outside prosecution counsel, spanning approximately January 2016 through October 2017. The emails discuss the prosecution strategy for the '237 Patent application in detail, with particular focus on narrowing amendments to independent Claim 1. Several of these emails reflect deliberations about how to amend the "locking seal assembly" limitation in response to examiner rejections. Of particular significance, the email at APEX-004338 (dated approximately April 2016) contains a candid acknowledgment by Dr. Chandrasekaran that the original claim language was "too broad to survive in light of [the examiner's cited] prior art" and recommends narrowing the claim to specify a particular structural configuration of the locking seal. This acknowledgment is relevant both to prosecution history estoppel and to our claim construction arguments, as it suggests that Apex itself understood the original claim scope to encompass structures that were ultimately disclaimed.
APEX-004401 through APEX-004415. This range contains draft office action responses showing multiple iterations of claim amendments prepared during prosecution of the '237 Patent. Of greatest significance, the drafts at APEX-004407 through APEX-004410 show a substantive amendment narrowing the scope of the "resilient sealing member" element of Claim 1. In the original application, the "resilient sealing member" was defined broadly to encompass any elastomeric component capable of forming a seal around an inserted instrument. The amendment, as ultimately filed, added language specifying that the resilient sealing member must be "configured to exert a radially inward compressive force" and must be "disposed within a recessed channel of the housing." These added limitations are directly relevant to Solstice's prosecution history estoppel arguments, as Solstice's PrecisionEdge™ products employ a sealing member that does not sit within a recessed channel but rather is affixed to the exterior surface of the housing — a configuration that was arguably within the scope of the original claim language but that was surrendered during prosecution. The evolution of the claim language across the multiple drafts in this Bates range provides a clear narrative of progressive narrowing that should be central to our claim construction briefing.
APEX-004520. This document is an internal memorandum from Dr. Chandrasekaran to Martin Hale (General Counsel), dated approximately March 2017. The memorandum discusses prior art cited by the patent examiner during prosecution of the '237 Patent and outlines Apex's strategy for distinguishing the claims from that prior art. Notably, the memorandum identifies and discusses specific prior art patents, including at least two references that overlap with references identified in Solstice's Preliminary Invalidity Contentions served on September 25, 2024. Dr. Chandrasekaran's characterizations of these references — and her assessment of the ways in which the '237 Patent claims were distinguishable — will need to be carefully analyzed in connection with the Prosecution History Analysis Memorandum dated September 5, 2024. Any admissions in this memorandum regarding the scope or teaching of the prior art references could be used to support Solstice's invalidity arguments or, conversely, could be used by Apex to argue that the prior art was already considered and distinguished during prosecution. This document should be reviewed in conjunction with the publicly available prosecution file history to determine whether the characterizations in the internal memorandum are consistent with the arguments actually presented to the examiner.
Relevance. Taken together, the '237 Patent prosecution documents strongly support Solstice's prosecution history estoppel defense. The narrowing amendments to the "resilient sealing member" and "locking seal assembly" limitations, documented across multiple drafts and internal deliberations, provide a compelling basis for arguing that Apex surrendered claim scope during prosecution and cannot now recapture that scope under the doctrine of equivalents. These documents complement and significantly strengthen the analysis in the separate Prosecution History Analysis Memorandum dated September 5, 2024, which was based solely on the publicly available file history.
C. Key Documents — '884 Patent (U.S. Patent No. 10,271,884)
The '884 Patent, titled "Retractable Blade Deployment Mechanism for Trocar Systems," was issued on April 30, 2019, with an expiration date of September 15, 2036. Apex asserts Claims 1, 2, 5, 9, and 14 of the '884 Patent against Solstice's PrecisionEdge™ PE-5000, PE-12000, and PE-15000 Series trocar products. The '884 Patent is the most commercially significant of the three asserted patents, as it covers the core blade deployment mechanism that Apex contends is embodied in all three of Solstice's accused product lines.
The following key prosecution documents were identified in the production:
APEX-007891 through APEX-007934. This range contains prosecution correspondence showing that Apex overcame a prior art rejection under 35 U.S.C. § 103 (obviousness) during prosecution of the '884 Patent by adding a specific limitation to the claims relating to the "spring-biased retraction" feature of the blade deployment mechanism. The examiner had initially rejected the claims as obvious in view of a combination of two prior art references. In response, Apex amended the claims to require that the retractable blade be "urged to a retracted position by a spring-biased retraction element," and argued that neither prior art reference — alone or in combination — disclosed or suggested this specific feature. The correspondence at APEX-007912 through APEX-007918 contains Apex's detailed arguments distinguishing the claims from the cited prior art on the basis of the spring-biased retraction feature.
This prosecution history is directly relevant to Solstice's non-infringement position with respect to the PE-5000 Series. As established in the Preliminary Claim Charts dated July 22, 2024, the PE-5000 Series employs a pneumatic retraction mechanism rather than a spring-biased retraction element. If the "spring-biased retraction" limitation is construed to require a mechanical spring (as opposed to any biasing force), the PE-5000 Series does not literally infringe the asserted claims. Moreover, because Apex added this limitation to overcome a prior art rejection, prosecution history estoppel may foreclose Apex from arguing that a pneumatic retraction mechanism is equivalent to a spring-biased retraction element. The prosecution correspondence in this Bates range provides the evidentiary foundation for both arguments.
APEX-008010. This document is a declaration of Dr. Raymond Szabo, submitted during prosecution of the '884 Patent under 37 C.F.R. § 1.132, in which Dr. Szabo attests to the specific technical advantages of the retractable blade mechanism over the prior art. In his declaration, Dr. Szabo describes the spring-biased retraction feature as a "critical innovation" that provides "superior reliability and tactile feedback" compared to prior blade deployment mechanisms. Dr. Szabo further states that the spring-biased approach "avoids the complexity and failure modes associated with alternative retraction mechanisms, including pneumatic and hydraulic systems." This statement constitutes an admission by the named inventor that spring-biased retraction is distinct from — and was understood to be different from — pneumatic retraction mechanisms. This admission directly supports Solstice's claim construction position and may be used to rebut any argument by Apex that the "spring-biased retraction" limitation should be construed broadly to encompass non-spring biasing forces.
APEX-008045 through APEX-008052. This range includes an examiner interview summary and Apex's follow-up letter to the USPTO clarifying the meaning of the term "deployment mechanism" as used in the claims of the '884 Patent. The examiner interview summary, at APEX-008045, reflects that during a telephone interview conducted on approximately February 14, 2019, Apex's prosecution counsel and the examiner discussed the scope of the "deployment mechanism" limitation and agreed that the term should be understood to refer to the integrated assembly of components that collectively accomplish blade extension and retraction — as opposed to any individual component within that assembly. Apex's follow-up letter, at APEX-008048 through APEX-008052, memorializes this understanding and includes additional clarifying statements about the structural requirements of the "deployment mechanism."
The term "deployment mechanism" is one of the disputed claim terms identified in the parties' Joint Claim Construction Statement filed on October 1, 2024. Apex has proposed a construction that defines "deployment mechanism" broadly, while Solstice has proposed a narrower construction consistent with the examiner interview summary. The documents in this Bates range are critical intrinsic evidence for Solstice's proposed construction and should be featured prominently in the claim construction briefing.
D. Key Documents — '105 Patent (U.S. Patent No. 10,932,105)
The '105 Patent, titled "Integrated Insufflation Valve and Seal for Laparoscopic Trocar," was issued on March 2, 2021, with an expiration date of January 10, 2038. Apex asserts Claims 1, 4, and 8 of the '105 Patent against Solstice's PrecisionEdge™ PE-12000 and PE-15000 Series trocar products. The '105 Patent claims are directed to an integrated valve-and-seal configuration for maintaining pneumoperitoneum during laparoscopic surgery.
The following key prosecution documents were identified in the production:
APEX-011203 through APEX-011278. This range contains the complete internal prosecution file for the '105 Patent application, including all internal correspondence, draft responses, and strategy memoranda maintained by Apex's IP department. Significantly, these documents confirm that the '105 Patent application was filed as a continuation of the application that matured into the '884 Patent, and the two applications share significant overlap in their specification language. The internal file reveals that during prosecution, Apex's counsel expressly relied on the '884 Patent specification as the basis for written description support for several of the '105 Patent claims. This relationship between the two patents is relevant to Solstice's invalidity analysis, as prior art that is effective against the '884 Patent may also be effective against the '105 Patent to the extent the claims share common subject matter and priority dates.
APEX-011290. This document is an email from Dr. Priya Chandrasekaran to outside prosecution counsel, dated approximately August 2020, in which Dr. Chandrasekaran notes her concern about potential double-patenting issues between the '105 Patent and the '884 Patent. In the email, Dr. Chandrasekaran observes that certain claims of the '105 Patent application appear to overlap with claims of the already-issued '884 Patent and instructs outside counsel to file a terminal disclaimer to obviate any obviousness-type double-patenting rejection. The terminal disclaimer was subsequently filed and is reflected in the public file history. While the terminal disclaimer resolved the double-patenting issue for prosecution purposes, it is relevant to Solstice's invalidity analysis in at least two respects. First, the filing of the terminal disclaimer constitutes Apex's admission that the claims of the two patents are not patentably distinct, which may affect the scope of the asserted claims. Second, the terminal disclaimer ties the enforceability of the '105 Patent to the '884 Patent, meaning that if the '884 Patent is found invalid or unenforceable, the '105 Patent cannot be separately enforced.
APEX-011345. This document is a draft set of claims for the '105 Patent application that were prepared during prosecution but ultimately abandoned in favor of narrower claims. The abandoned draft claims originally covered a broader scope that encompassed single-valve configurations — i.e., configurations in which a single integrated valve performs both the insufflation and sealing functions. The claims as ultimately issued, however, are limited to a dual-valve integrated configuration in which separate insufflation and sealing valve components are integrated within a single housing. The existence of these abandoned broader claims supports the argument that the issued claims of the '105 Patent are limited to the specific dual-valve configuration and do not cover single-valve designs. This distinction is relevant to the non-infringement analysis for the PE-15000 Series, which employs a single-valve configuration for certain models.
E. Recommended Follow-Up
Based on the prosecution documents identified above, I recommend the following actions:
1. Cross-reference with prior art analysis. The prosecution documents should be cross-referenced with the prior art analysis being conducted by Dr. Jonathan Kendrick of Kendrick & Lau LLP. In particular, the prior art references discussed in APEX-004520 (the Chandrasekaran-to-Hale memorandum regarding the '237 Patent) should be compared against the references already identified in our Preliminary Invalidity Contentions to identify overlaps and gaps.
2. Prioritize for claim construction briefing. The following documents should be flagged as priority exhibits for claim construction briefing in advance of the Markman hearing scheduled for November 18, 2024:
• APEX-004401 through APEX-004415 (draft claim amendments for the '237 Patent, relevant to "resilient sealing member" and "locking seal assembly" construction);
• APEX-007891 through APEX-007934 (prosecution correspondence for the '884 Patent, relevant to "spring-biased retraction" construction);
• APEX-008045 through APEX-008052 (examiner interview summary and follow-up letter, relevant to "deployment mechanism" construction).
3. Coordinate with invalidity expert. The prior art references identified in the prosecution correspondence — particularly those discussed in APEX-004520 and in the '884 Patent prosecution file — should be provided to Dr. Miriam Ostrowski (Halford University), our retained invalidity expert, for incorporation into her expert report. Dr. Ostrowski should assess whether Apex's characterizations of the prior art during prosecution are accurate and whether the prior art, properly understood, is more closely analogous to the claimed inventions than Apex represented to the examiner.
IV. CATEGORY 2: INVENTOR NOTEBOOKS AND DEVELOPMENT RECORDS OF DR. RAYMOND SZABO
A. Overview. The Apex production includes scanned copies of laboratory notebooks and technical development records authored by Dr. Raymond Szabo, the named inventor on all three asserted patents. Dr. Szabo has served as Apex's Vice President of Engineering since approximately 2011 and led the team responsible for developing the locking seal, blade deployment, and insufflation valve technologies that are the subject of this litigation.
The produced notebooks and development records span the period from approximately 2012 through 2020 and document the conception, experimentation, and reduction to practice of the inventions claimed in the '237, '884, and '105 Patents. The notebooks are handwritten and have been produced as scanned PDF images with OCR-generated text layers of varying quality. Six volumes of notebooks were produced, spanning Bates numbers APEX-014001 through APEX-014287, with each volume corresponding to a roughly chronological segment of Dr. Szabo's research and development work.
These materials are significant for multiple reasons. They provide contemporaneous evidence of the inventive process, which bears on questions of conception, reduction to practice, and the scope of the claimed inventions. They also reveal prior art references and competitor products of which Dr. Szabo was aware during the development period, some of which may not have been disclosed to the USPTO during prosecution. The notebooks therefore have implications for both Solstice's invalidity defense and its inequitable conduct counterclaim.
B. Key Documents
APEX-014001 through APEX-014287 (Complete Notebook Series). The six volumes of Dr. Szabo's laboratory notebooks constitute the most extensive set of technical development records in the Apex production. The notebooks are organized chronologically and contain a combination of handwritten narrative entries, experimental data, technical sketches and diagrams, meeting notes, and references to external technical literature. The entries document Dr. Szabo's work on multiple aspects of trocar design, including the locking seal assembly, the retractable blade deployment mechanism, and the integrated insufflation valve.
While the entire notebook series should be provided to Dr. Ostrowski for comprehensive analysis, the following specific entries and ranges within the notebooks are of particular significance:
APEX-014045 through APEX-014062. These notebook entries, dated approximately 2013 through 2014, document early-stage design concepts for the locking seal assembly that is the subject of the '237 Patent. The entries include multiple technical sketches showing various configurations of the seal mechanism. Of critical importance, several of these sketches appear to incorporate design elements that are substantially similar to features described in publicly available prior art references. Specifically, the sketches at APEX-014051 and APEX-014053 depict a recessed-channel sealing configuration that closely resembles the configuration described in at least two of the prior art references identified in Solstice's Preliminary Invalidity Contentions (served September 25, 2024). If Dr. Szabo's design concepts were derived from or inspired by these prior art references, this would strengthen Solstice's argument that the '237 Patent claims are anticipated by or obvious in view of the prior art. Conversely, if the sketches represent independent conception, they may still be useful in demonstrating that the claimed features were not as inventive as Apex has characterized them, since the same inventor arrived at similar configurations through routine experimentation.
Additionally, the entry at APEX-014058 (dated approximately February 2014) contains a handwritten note referencing "prior designs in Karlsson and Whitmore" — which appear to be references to prior art publications or patents. These references should be investigated to determine whether they correspond to any of the prior art references already identified by Kendrick & Lau LLP or whether they represent additional prior art that should be incorporated into our invalidity contentions.
APEX-014123. This notebook entry, dated approximately June 2015, is of particular significance. The entry contains a reference to a published journal article describing a similar insufflation valve mechanism to that claimed in the '105 Patent. Dr. Szabo's notes indicate that he reviewed this article and found its description of the valve mechanism to be "relevant" to his own design work. The article referenced appears to be published in a peer-reviewed medical device engineering journal, though the precise citation is partially illegible in the scanned image and will require further investigation to confirm. Critically, the publication date of this article — June 2015 or earlier — predates the earliest effective priority date of the '105 Patent (which claims priority to a provisional application filed on January 10, 2018). If this article describes the insufflation valve mechanism claimed in the '105 Patent, or discloses one or more elements of the claimed invention, it may constitute anticipating prior art under 35 U.S.C. § 102 or may be combined with other references in an obviousness analysis under 35 U.S.C. § 103. The significance of this reference is heightened by the fact that it appears from the publicly available prosecution file history that this article was not cited in any Information Disclosure Statement filed during prosecution of the '105 Patent application.
APEX-014201 through APEX-014218. These notebook entries document the design iteration process for the retractable blade deployment mechanism that is the subject of the '884 Patent. The entries reveal that the "spring-biased retraction" feature — which Apex added to the '884 Patent claims during prosecution to overcome a prior art rejection (as discussed in Section III.C above) — was not part of Dr. Szabo's original conception of the blade deployment mechanism. Rather, Dr. Szabo's early designs employed a different retraction approach (described in the notebooks as a "cam-actuated return" mechanism), and the spring-biased retraction feature was introduced later, in approximately mid-2016, as an improvement over the original design. This design evolution history is relevant in at least two respects. First, it undermines any argument by Apex that the spring-biased retraction feature was an integral and indispensable part of the invention from its inception, which could affect the scope and priority of Claims 1 and 2 of the '884 Patent. Second, it provides additional context for the prosecution history, confirming that the spring-biased feature was not merely a clarification of the original claims but rather a substantive addition reflecting a distinct design choice.
APEX-014255. This document is an email from Dr. Szabo to Dr. Chandrasekaran, dated approximately 2018, in which Dr. Szabo references a competitor product and acknowledges that the competitor's product has a "similar sealing approach" to the technology covered by Apex's patent portfolio. The email does not identify the specific competitor by name in the portion produced (the email may have been redacted in part under the Protective Order), but based on context, it appears to refer to a product marketed by one of the companies identified in Apex's own freedom-to-operate analysis (discussed in Section V below). Dr. Szabo's acknowledgment that a competitor product employed a "similar sealing approach" is potentially significant for Solstice's inequitable conduct defense. Under the duty of candor set forth in 37 C.F.R. § 1.56, individuals involved in patent prosecution are required to disclose to the USPTO information that is material to patentability. If the competitor product referenced by Dr. Szabo constituted material prior art — or if Dr. Szabo was aware of publications or patents describing the competitor's technology — and this information was not disclosed during the prosecution of the asserted patents, it could support a finding of inequitable conduct. This document must be analyzed in conjunction with the Information Disclosure Statements filed during prosecution of each of the three asserted patents to determine whether the competitor product or related references were disclosed.
C. Relevance to Defense Strategy
The inventor notebook entries and development records identified above are relevant to Solstice's defense in several interconnected ways:
Invalidity. The notebook entries at APEX-014045 through APEX-014062 and APEX-014123 identify prior art references and design concepts that support arguments that the asserted patent claims are anticipated under 35 U.S.C. § 102 or rendered obvious under 35 U.S.C. § 103. The journal article referenced at APEX-014123 is of particular importance, as it may constitute a § 102 reference that was not considered by the examiner during prosecution.
Claim Scope. The design evolution records at APEX-014201 through APEX-014218 undermine Apex's efforts to construe the asserted claims broadly. By demonstrating that key claim limitations — particularly the "spring-biased retraction" feature — were late additions to the inventive concept rather than original design elements, these records support a narrow construction of the claims consistent with the specific embodiment ultimately developed and patented.
Inequitable Conduct. The email at APEX-014255 raises the possibility that Dr. Szabo, a named inventor who was involved in the prosecution of the asserted patents, was aware of material prior art (in the form of a competitor product with a "similar sealing approach") that was not disclosed to the USPTO. This evidence, if corroborated by additional documents and by the prosecution file history, could support Solstice's inequitable conduct counterclaim. The strength of the inequitable conduct argument will depend on (i) the materiality of the undisclosed information and (ii) the intent to deceive the USPTO, both of which require further investigation.
A cross-reference analysis should be conducted to compare the prior art references identified in the notebooks with the results of the public prior art search conducted by Kendrick & Lau LLP. Any references that appear in both the notebooks and our own prior art search results are of heightened significance, as they demonstrate that the prior art was known to the inventor and independently identified as relevant by our own experts.
D. Recommended Follow-Up
1. Expert analysis. The complete notebook series (APEX-014001 through APEX-014287) should be provided to Dr. Miriam Ostrowski for detailed technical analysis. Dr. Ostrowski should be instructed to focus on (a) the design concepts at APEX-014045 through APEX-014062 and their relationship to known prior art, (b) the journal article referenced at APEX-014123 and its potential as an anticipatory reference, and (c) the design evolution of the spring-biased retraction feature documented at APEX-014201 through APEX-014218.
2. Prior art investigation. The journal article referenced at APEX-014123 must be identified, located, and reviewed in full. Efforts should be made to obtain a complete copy of the article and to confirm its publication date. If the publication date is prior to the earliest effective filing date of the '105 Patent, the article should be analyzed for its disclosure of claimed elements and incorporated into the invalidity contentions.
3. Inequitable conduct assessment. The email at APEX-014255 should be assessed for its implications for Solstice's inequitable conduct counterclaim. This assessment should include (a) determining whether the referenced competitor product or any associated publications or patents were disclosed in any Information Disclosure Statement during prosecution of the '237, '884, or '105 Patents; (b) identifying the specific competitor product referenced and analyzing its technical features; and (c) evaluating whether the undisclosed information meets the materiality and intent standards required under Brightmoor & Co., Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011) (en banc).
V. CATEGORY 3: PRIOR ART REFERENCES KNOWN TO APEX
A. Overview. The Apex production includes a category of documents relating to prior art references that were known to Apex during the prosecution of the asserted patents and in the post-issuance period. These documents include internal prior art search reports commissioned by Apex, communications within Apex's IP department discussing the relevance of identified prior art and whether it needed to be disclosed to the USPTO, and collections of third-party patent documents and technical publications compiled in connection with Apex's freedom-to-operate analyses. This category of documents is distinct from the prosecution correspondence discussed in Section III, although there is some overlap, as certain prior art references are discussed in both the prosecution files and the internal search reports.
The documents in this category are among the most significant in the production for purposes of Solstice's invalidity defense and its inequitable conduct counterclaim. They reveal that Apex was aware of prior art references that are directly relevant to the patentability of the asserted claims and, in some instances, engaged in internal deliberations about whether those references should be disclosed to the USPTO.
B. Key Documents
APEX-016500 through APEX-016578. This range contains an internal prior art search report prepared for Apex's IP department in approximately 2014. The report was commissioned in connection with the prosecution of the '237 Patent and identifies 23 prior art references — including both U.S. patents and published technical articles — that the search firm identified as relevant to the claims of the '237 Patent application. The search report includes summaries of each reference and an assessment of its relevance to specific claim elements. Of the 23 references identified in the search report, a preliminary comparison against the '237 Patent's prosecution file history indicates that several were not cited in any Information Disclosure Statement filed by Apex during prosecution. This discrepancy is significant because, under 37 C.F.R. § 1.56, patent applicants and their representatives have a duty to disclose to the USPTO all information known to them that is material to patentability. The failure to disclose references identified in a commissioned prior art search report — references that the applicant's own search firm deemed relevant to the claims — may constitute a breach of this duty. The specific references that were not disclosed need to be cataloged and compared to our own invalidity contentions.
Furthermore, several of the references identified in the search report overlap with prior art references independently identified by Kendrick & Lau LLP as part of their prior art search for Solstice. This overlap corroborates the relevance of these references and strengthens the argument that they are material to the patentability of the '237 Patent claims.
APEX-016612. This document is an email chain within Apex's IP department, involving Dr. Chandrasekaran and at least one other Apex IP staff member, discussing whether certain prior art references needed to be disclosed to the USPTO under the duty of candor. The email chain, which spans several messages exchanged over a period of approximately two weeks in 2015, reflects an internal debate about whether specific references identified in the prior art search report (discussed above at APEX-016500 through APEX-016578) were sufficiently "material" to require disclosure. In one message, a member of the IP staff expresses the view that at least two of the references are "arguably cumulative" of prior art already of record in the prosecution file and therefore need not be separately disclosed. Dr. Chandrasekaran's response, however, suggests a more cautious approach, noting that "we should err on the side of disclosure." The email chain does not definitively resolve whether the references were ultimately disclosed, but the fact that there was an internal debate about the duty of candor — and that at least some participants advocated against disclosure — is highly significant for the inequitable conduct counterclaim. This document should be treated as a critical exhibit in connection with that counterclaim.
APEX-016780 through APEX-016802. This range contains a collection of third-party patent documents and technical publications that Apex compiled in connection with a freedom-to-operate ("FTO") analysis. The FTO analysis appears to have been conducted in approximately 2016–2017, during the period when Apex was developing its commercial trocar products and seeking to ensure that its products did not infringe the intellectual property rights of third parties. The collection includes references by Veridian Medical Technologies, Inc. and other competitors in the trocar and surgical access device market. Several of the Veridian references describe seal and valve mechanisms that bear similarities to the technologies claimed in the '237 and '105 Patents. Notably, some of these Veridian references overlap with prior art references identified by Kendrick & Lau LLP in their prior art search for Solstice, which further corroborates their relevance to the invalidity analysis.
The inclusion of competitor references in Apex's own FTO analysis is relevant in two ways. First, it demonstrates that Apex was aware of the prior art landscape and recognized that similar technologies existed in the field. Second, to the extent that these references were known to individuals involved in the prosecution of the asserted patents and were not disclosed to the USPTO, they may support the inequitable conduct counterclaim.
APEX-016850. This document is an internal memorandum summarizing Apex's post-issuance review of the '884 Patent's validity. The memorandum appears to have been prepared in approximately 2022, in anticipation of potential enforcement of the '884 Patent against competitors (including, possibly, Solstice). The memorandum contains a candid internal assessment of the '884 Patent's vulnerability to challenge based on certain prior art combinations. Specifically, the memorandum acknowledges that a combination of two prior art references — which appear to correspond to references already identified in Solstice's invalidity contentions — "presents a non-trivial risk to the validity of Claims 1 and 2" of the '884 Patent. The memorandum goes on to discuss potential arguments for distinguishing these references but concedes that the arguments are "not without risk."
This document is extraordinarily significant. Apex's own internal assessment acknowledges the vulnerability of the '884 Patent to the same prior art challenges that Solstice is asserting. This admission can be used to undermine Apex's litigation positions on validity and may be persuasive to the Court or jury in demonstrating that Apex itself had doubts about the strength of its patent portfolio. The document may also be relevant to damages, as a patentee's own doubts about validity may affect the hypothetical negotiation analysis under the Georgia-Pacific framework.
C. Relevance. The documents in this category bear directly on three aspects of Solstice's defense:
Invalidity. The prior art references identified in APEX-016500 through APEX-016578 and APEX-016780 through APEX-016802 supplement the prior art already identified by Kendrick & Lau LLP and Dr. Ostrowski. To the extent that any of these references anticipate the asserted claims under 35 U.S.C. § 102 or, in combination, render the claims obvious under 35 U.S.C. § 103, they strengthen Solstice's invalidity defense. The fact that some of these references were identified by Apex's own search firm and FTO analysis further corroborates their relevance.
Inequitable Conduct. The internal discussions about duty-of-candor obligations at APEX-016612 are directly relevant to Solstice's inequitable conduct counterclaim. These discussions suggest that Apex's IP team was aware of potentially material prior art and engaged in deliberations about whether to disclose it to the USPTO. If any of the undisclosed references are found to be material — that is, if they would have been relevant to the examiner's determination of patentability — the failure to disclose them, coupled with evidence of deliberate decision-making about whether to disclose, could satisfy both the materiality and intent elements of the inequitable conduct standard under Brightmoor & Co..
Validity Assessment. Apex's own post-issuance validity assessment at APEX-016850 provides powerful evidence that even Apex's internal team recognized the vulnerability of the '884 Patent to prior art challenges. This document can be used to undermine Apex's litigation positions on validity and may also affect the damages analysis, as discussed above.
D. Recommended Follow-Up
1. Cross-reference with Kendrick & Lau LLP. The prior art references in APEX-016500 through APEX-016578 should be cross-referenced against the prior art references already identified by Kendrick & Lau LLP and incorporated into the invalidity contentions. Any new references identified in the Apex search report that were not previously known to us should be analyzed for their relevance and added to the invalidity contentions as appropriate.
2. Inequitable conduct analysis. APEX-016612 should be flagged as a critical document for the inequitable conduct counterclaim. A detailed analysis should be prepared comparing the prior art references discussed in the email chain against the Information Disclosure Statements filed during prosecution of each asserted patent, to determine which references were and were not ultimately disclosed.
3. Coordination with invalidity contentions. These materials should be incorporated into the Invalidity Contentions, supplementing the Prior Art Analysis Memorandum dated September 18, 2024. Christy Bauer should coordinate with Kendrick & Lau LLP and Dr. Ostrowski on updating the invalidity charts to reflect the newly identified references.
4. Veridian subpoena. The Subpoena Duces Tecum issued to Veridian Medical Technologies, Inc. on September 12, 2024, may yield additional documents that corroborate the prior art references identified in Apex's FTO analysis. The return date for that subpoena is approaching, and we should follow up to confirm compliance.
VI. CATEGORY 4: PRIOR LICENSING AGREEMENTS AND NEGOTIATIONS
A. Overview. The Apex production includes license agreements and related negotiation correspondence involving the asserted patents and the broader Apex Trocar Patent Family, which encompasses 14 issued patents and 6 pending patent applications. These documents were produced in response to Solstice's requests for production of all licensing agreements, term sheets, negotiation correspondence, and related documents pertaining to the asserted patents or any patents in the same patent family. The licensing documents are critical for two purposes: (1) they provide the factual foundation for the damages analysis under the Georgia-Pacific Corp. v. United States Plywood Corp., 318 F. Supp. 1116 (S.D.N.Y. 1970), reasonable royalty framework, which relies in significant part on evidence of comparable licenses; and (2) they inform Solstice's ongoing settlement negotiations with Apex by establishing the range of royalty rates and commercial terms that Apex has historically accepted or demanded.
B. Key Documents
APEX-019200 through APEX-019245. This range contains an executed license agreement between Apex and a third-party medical device company, dated 2020, granting a non-exclusive license under the '237 and '884 Patents. The identity of the licensee has been redacted from the produced version of the agreement pursuant to the Stipulated Protective Order entered by the Court on June 28, 2024. Based on contextual references within the agreement and accompanying correspondence, the licensee is believed to be a mid-size competitor in the surgical access device market. The key terms of the agreement are as follows:
• Royalty Rate: 4.5% of net sales of licensed products.
• Licensed Field: Surgical access devices generally, which is a broader field than the laparoscopic-only field contemplated in the current settlement discussions between Apex and Solstice.
• Lump-Sum Payment: $2,000,000, payable upon execution of the agreement.
• Term: Co-extensive with the life of the licensed patents.
• Exclusivity: Non-exclusive.
• Sublicensing: No right to sublicense without Apex's prior written consent.
This agreement is the most directly relevant comparable license for purposes of the Georgia-Pacific analysis. The royalty rate of 4.5% of net sales is significant because it is higher than the 3.75% rate currently being discussed in the settlement term sheet, but it is substantially lower than the effective royalty rate implied by Apex's damages expert Hugh Danaher's claimed $31,800,000 in reasonable royalty damages. Danaher's damages figure, when applied to Solstice's U.S. sales of the PrecisionEdge™ product line, implies an effective royalty rate of approximately 8.2% of net sales — nearly double the rate that Apex actually accepted in a comparable arm's-length transaction. The 2020 license also covers a broader field of use than the current dispute, which, under Georgia-Pacific factor 4 (licensor's established policy and marketing program to maintain its patent monopoly), may suggest that a license covering only laparoscopic devices would command a lower rate.
APEX-019310 through APEX-019358. This range contains the negotiation correspondence leading up to the execution of the 2020 license agreement described above. The correspondence reveals that Apex's initial royalty demand was 7% of net sales, with a lump-sum payment of $5,000,000. The licensee countered at 3% with no lump sum. The parties exchanged multiple counteroffers over a period of approximately four months before ultimately agreeing on the 4.5% rate with a $2,000,000 lump-sum payment. This negotiation history is relevant for several reasons. First, it demonstrates that Apex's initial licensing demands are significantly higher than the rates it is ultimately willing to accept, which undermines the credibility of Apex's damages expert to the extent his analysis is based on Apex's initial demands rather than final agreed-upon rates. Second, the negotiation range (3% to 7%, settling at 4.5%) provides a concrete benchmark for the hypothetical negotiation analysis under Georgia-Pacific.
APEX-019400 through APEX-019412. This range contains a second license agreement, dated 2022, involving the '105 Patent only. The licensee is a different entity from the 2020 licensee, and its identity has similarly been redacted under the Protective Order. The key terms of this agreement are:
• Royalty Rate: 2.8% of net sales of licensed products.
• Licensed Field: Insufflation-related devices.
• Lump-Sum Payment: None.
• Term: Co-extensive with the life of the '105 Patent.
• Exclusivity: Non-exclusive.
This agreement is relevant as a benchmark for the value attributable specifically to the '105 Patent, as opposed to the '237 and '884 Patents. The 2.8% royalty rate for the '105 Patent alone, compared to the 4.5% rate for the combined '237 and '884 Patent license, suggests that the market attributes a lower incremental value to the insufflation valve technology covered by the '105 Patent relative to the sealing and blade deployment technologies covered by the other two patents. This relative valuation is important for apportioning damages among the three asserted patents and for assessing the reasonableness of Apex's overall damages claim.
APEX-019450 through APEX-019478. This range contains a term sheet and draft license agreement from a negotiation in 2023 between Apex and another competitor in the trocar market. The negotiation ultimately failed, and no license was executed. The key terms of Apex's proposal in the failed negotiation were:
• Royalty Rate: 6% of net sales.
• Lump-Sum Payment: $5,000,000 upfront.
• Licensed Patents: All three asserted patents plus additional patents in the Apex Trocar Patent Family.
The negotiation correspondence at APEX-019465 through APEX-019478 reveals that the counterparty rejected Apex's terms and instead chose to design around the patented technology. The counterparty's letter at APEX-019470 specifically states that the proposed royalty rate was "not commercially viable" and that the counterparty had identified "feasible alternative design approaches" that would avoid the need for a license. The fact that the counterparty elected to design around rather than accept Apex's licensing terms is significant evidence that the market does not support Apex's high royalty demands. Under Georgia-Pacific factor 9 (the advantages of the patented invention over prior art alternatives), the availability of design-arounds is relevant to assessing the incremental value of the patented technology and, consequently, the appropriate royalty rate.
C. Relevance to Damages and Settlement
The licensing documents identified in this category are among the most important evidence in this case with respect to damages. Under the Georgia-Pacific framework, comparable licenses are the most probative evidence of a reasonable royalty rate, as they reflect actual arm's-length negotiations between willing parties in the real market. The key takeaways from the licensing documents are:
1. The 4.5% rate in the 2020 license and the 2.8% rate in the 2022 license provide concrete benchmarks for rebutting Apex's damages expert Hugh Danaher's claimed $31,800,000 in reasonable royalty damages. Danaher's figure implies an effective royalty rate of approximately 8.2%, which is nearly double the highest rate Apex has actually accepted in a comparable transaction and nearly triple the rate for the '105 Patent alone.
2. The failed 2023 negotiation demonstrates that the market does not support Apex's high royalty demands. The counterparty's decision to design around the patents rather than accept a 6% royalty rate and $5,000,000 lump sum underscores that Apex's initial demands are not reflective of the true market value of the technology.
3. The negotiation history from the 2020 license (initial demand of 7%, ultimate agreement at 4.5%) reveals Apex's pattern of demanding significantly higher rates than it is ultimately willing to accept, which should inform both the damages analysis and the settlement negotiations.
These documents should be provided to Dr. Elena Marchetti at Pinnacle Economics Group LLC, Solstice's retained damages expert, for integration into her Georgia-Pacific reasonable royalty analysis and for preparation of her rebuttal to Danaher's report.
D. Recommended Follo