1037-00004 · Solstice Biomedical Devices Ltd · Engagement & Client Administration

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CALDERWOOD & HARKNESS LLP

1201 Market Street, Suite 2500 Wilmington, Delaware 19801

299 Park Avenue, 35th Floor New York, New York 10171

Marcus Delgado, Partner Intellectual Property Litigation Direct: (302) 654-7218 Facsimile: (302) 654-7300

Email: mdelgado@calderwoodharkness.com

May 13, 2024

VIA EMAIL AND CERTIFIED MAIL, RETURN RECEIPT REQUESTED

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

Re: Notice of Patent Infringement Claim — Policy No. HSI-IP-2023-04891

Insured: Solstice Biomedical Devices Ltd. (CRO No. 648217) and Solstice Biomedical, Inc. (EIN: 84-3291056)

Claimant: Apex Surgical Innovations, Inc.

Case: Apex Surgical Innovations, Inc. v. Solstice Biomedical, Inc., Case No. 1:24-cv-00587-RGA, U.S. District Court for the District of Delaware

Dear Ms. Keene:

I. Introduction and Purpose

This firm represents Solstice Biomedical Devices Ltd. ("Solstice Parent"), an Irish-domiciled private limited company (Company Registration Office No. 648217), and its wholly owned U.S. operating subsidiary, Solstice Biomedical, Inc. ("Solstice U.S." and, together with Solstice Parent, "Solstice" or the "Insured"), a Delaware corporation (EIN: 84-3291056), with principal U.S. offices at 3800 Concord Pike, Suite 410, Wilmington, Delaware 19803. Calderwood & Harkness LLP ("C&H") was engaged by Solstice effective May 10, 2024, in connection with the matter referenced above. Our internal matter number is 10294.0017, and the undersigned serves as the Responsible Partner on the engagement.

The purpose of this letter is to provide formal and timely notice of a patent infringement claim brought against the Insured by Apex Surgical Innovations, Inc. ("Apex"), thereby triggering Halcyon Specialty Insurance Co.'s ("Halcyon") coverage obligations under intellectual Property Litigation Insurance Policy No. HSI-IP-2023-04891 (the "Policy"). We write promptly upon the Insured's becoming aware of the filing of the underlying action and well within the time period required by the Policy's claim-reporting provisions. Solstice respectfully requests that Halcyon acknowledge coverage for the defense of this matter and designate a claims handler at the earliest opportunity.

II. Identification of the Policy

The coverage at issue is governed by the following policy:

This letter constitutes formal notice of a "Claim" as that term is defined in the Policy and is submitted in accordance with the Policy's claim-reporting provisions. Solstice expressly reserves all of its rights under the Policy, including, without limitation, the right to assert that additional provisions of the Policy afford coverage for the matters described herein. Nothing in this letter should be construed as a waiver, release, or limitation of any coverage rights, whether or not specifically referenced in this correspondence.

III. Description of the Underlying Claim

A. Filing of the Complaint

On May 9, 2024, Apex Surgical Innovations, Inc. ("Apex"), a Delaware corporation with principal offices at 1220 North Market Street, Suite 550, Wilmington, Delaware 19801, filed a Complaint for Patent Infringement (the "Complaint") in the United States District Court for the District of Delaware. The action has been assigned Case No. 1:24-cv-00587-RGA and is before the Honorable Chief Judge Richard G. Andrews.

As of the date of this letter, Solstice has not yet been formally served with the Complaint. However, Solstice has been made aware of the filing through electronic docket monitoring and anticipates that service will occur imminently through its registered agent, Pemberton Industries, located in Wilmington, Delaware. We are providing this notice in advance of formal service so that Halcyon may begin its coverage evaluation without delay and so that there is no question as to the timeliness of this notification under the Policy.

A complete copy of the Complaint, as filed, is enclosed herewith as Enclosure 1.

B. The Asserted Patents

The Complaint alleges infringement of three United States utility patents, each of which is identified below along with the specific claims asserted:

1. U.S. Patent No. 9,814,237 (the "'237 Patent") — entitled "Locking Seal Assembly for Minimally Invasive Surgical Access Device," issued November 14, 2017, with an expiration date of June 22, 2035. Apex asserts 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 April 30, 2019, with an expiration date of September 15, 2036. Apex asserts 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 March 2, 2021, with an expiration date of January 10, 2038. Apex asserts infringement of Claims 1, 4, and 8 of the '105 Patent.

All three asserted patents list Dr. Raymond Szabo, Vice President of Engineering at Apex, as the named inventor and are assigned on their face to Apex Surgical Innovations, Inc. According to publicly available prosecution records, the three patents are part of a larger patent family comprising fourteen issued U.S. patents and six pending continuation applications, suggesting the possibility that Apex may seek to assert additional patents as the litigation progresses.

C. The Accused Products

The Complaint identifies the following Solstice products as allegedly infringing the asserted patents:

The PrecisionEdge™ product line constitutes a core component of Solstice's commercial portfolio of laparoscopic trocars and minimally invasive surgical instruments. These products are manufactured at Solstice's production facilities in Ireland and are distributed throughout the United States by Solstice U.S. The PrecisionEdge™ line has been on the U.S. market since approximately 2019 and represents a material portion of Solstice's annual revenue.

D. Relief Sought by Apex

The Complaint seeks the following relief against Solstice:

• Damages in the form of a reasonable royalty for Solstice's alleged infringement of each asserted patent, in an amount not less than what would constitute adequate compensation under 35 U.S.C. § 284;

• Permanent injunctive relief enjoining Solstice from the continued manufacture, use, sale, offer for sale, and importation of the accused products;

• A finding of willful infringement and an award of enhanced (treble) damages pursuant to 35 U.S.C. § 284;

• An award of attorneys' fees and costs pursuant to 35 U.S.C. § 285, on the ground that this is an alleged "exceptional case"; and

• Such other and further relief as the Court may deem just and proper.

Apex's outside counsel in this matter is the firm of Hargrove, Tate & Bennington LLP, located at 900 North King Street, Suite 1200, Wilmington, Delaware 19801. Victoria Stanton, a partner in that firm's patent litigation practice, is identified as lead counsel for Apex.

E. Solstice's Preliminary Assessment and Intended Defenses

Solstice intends to vigorously defend against each of Apex's claims. While our investigation is at a preliminary stage, Solstice anticipates asserting defenses including, but not limited to, the following:

• Non-infringement: Solstice believes, based on its initial review, that its PrecisionEdge™ products do not practice the asserted claims of the '237, '884, or '105 Patents and that Apex's infringement theories are likely to rest on an impermissibly broad construction of the asserted claim terms.

• Invalidity under 35 U.S.C. §§ 102 and 103: Solstice has identified prior art references that it believes are highly relevant to the validity of the asserted patents. Calderwood & Harkness is coordinating with Solstice's patent prosecution counsel, Kendrick & Lau LLP, located at 601 Pennsylvania Avenue NW, Suite 820, Washington, D.C. 20004 (Dr. Jonathan Kendrick, Lead Partner), which has commenced prior art searches and prosecution history analysis in support of both litigation defenses and potential inter partes review proceedings before the United States Patent and Trademark Office.

• Inequitable conduct: Based on a preliminary review of the prosecution histories of the asserted patents, Solstice has identified potential omissions of material prior art during prosecution that may support a defense of inequitable conduct, including the failure to disclose certain European Patent Office publications that appear to be highly material to the patentability of the asserted claims.

We will provide Halcyon with further details regarding Solstice's defenses as our investigation continues and the litigation progresses.

IV. Coverage Requested

Solstice hereby requests that Halcyon acknowledge coverage for the defense of this patent infringement action under Policy No. HSI-IP-2023-04891. Specifically, Solstice seeks coverage for the following categories of defense costs:

1. Attorney fees and costs incurred by Calderwood & Harkness LLP in the defense of Apex Surgical Innovations, Inc. v. Solstice Biomedical, Inc., Case No. 1:24-cv-00587-RGA, in the U.S. District Court for the District of Delaware;

2. Expert witness fees and costs, including fees for technical experts in the fields of mechanical engineering, surgical device design, and patent claim construction, as well as damages experts who will be retained to rebut Apex's royalty and lost-profits theories;

3. E-discovery and litigation support vendor costs, including expenses associated with the collection, processing, hosting, review, and production of electronically stored information;

4. All other reasonable and necessary defense costs, including court reporter fees, deposition costs, travel expenses, filing fees, and any other costs ordinarily incurred in the defense of complex patent litigation of this nature.

Solstice acknowledges that the $250,000 self-insured retention under the Policy must be satisfied before Halcyon's coverage obligations attach. Solstice will track and document its defense expenditures and will notify Halcyon as the SIR is approached and ultimately satisfied so that Halcyon may prepare to assume its defense cost obligations in a seamless and timely manner.

We respectfully request that Halcyon designate a claims handler for this matter (or confirm that Ms. Keene will serve in that capacity) and provide written acknowledgment of coverage at the earliest opportunity. To the extent Halcyon requires any additional information or documentation to complete its coverage evaluation, please advise the undersigned promptly so that we may respond without delay.

V. Defense Counsel and Billing

Calderwood & Harkness LLP has been retained as defense counsel effective May 10, 2024. The C&H engagement team assigned to this matter consists of the following attorneys:

Our internal matter number is 10294.0017. All invoices and billing statements will reference this matter number as well as Policy No. HSI-IP-2023-04891.

We respectfully request that Halcyon confirm that it consents to Calderwood & Harkness LLP's engagement as defense counsel in this matter. In addition, we ask that Halcyon provide us with any applicable billing guidelines, litigation management protocols, invoice submission procedures, or reporting requirements that govern the Policy so that we may ensure full compliance from the outset of the engagement. We are prepared to comply with reasonable billing and reporting requirements, including the provision of periodic status reports, detailed task-based invoicing, and advance notice of significant litigation events.

VI. Preliminary Budget Estimate

A detailed phased litigation budget is currently being prepared and will be provided separately. We expect to deliver a comprehensive Budget & Fee Estimate Memorandum to Solstice and Halcyon on or about May 15, 2024, which will set forth anticipated costs by litigation phase in accordance with industry-standard phased budgeting conventions.

Based on our initial assessment of the scope and complexity of this matter, we anticipate that the case will proceed through the following phases: initial pleadings and case management; fact discovery (including extensive e-discovery of engineering design files, product specifications, and related technical documents); claim construction proceedings (commonly referred to as a Markman hearing); expert discovery (including the retention of at least two technical experts and a damages expert); summary judgment and other dispositive motions; and trial. Trial is currently anticipated for late 2025, consistent with the District of Delaware's standard scheduling practices for patent cases, although no scheduling order has yet been entered.

Our preliminary estimate is that total defense costs through trial could potentially approach or exceed the Policy's $5,000,000 per-occurrence limit, depending on the complexity of discovery, the number of asserted claims that survive early motion practice, and the scope of expert work required. This estimate includes the anticipated costs of Calderwood & Harkness's fees, expert witness fees, and e-discovery vendor costs. We intend to manage costs as efficiently as possible, including through the strategic use of technology-assisted review ("TAR" or "predictive coding") for e-discovery, the judicious delegation of tasks to associates and paralegals where appropriate, and early engagement with Apex's counsel regarding proportionality limitations on discovery.

We will keep Halcyon apprised of budgetary developments and will promptly notify Halcyon if actual costs are trending materially above or below our initial estimates.

VII. Background on the Insured

To assist Halcyon in its evaluation, we provide the following background information regarding the Insured:

Solstice Biomedical Devices Ltd. is an Irish-domiciled private limited company founded in 2011, with its registered office at Unit 14, Clonskeagh Business Park, Clonskeagh Road, Dublin 14, D14 YF28, Ireland. The company designs and manufactures a range of minimally invasive surgical instruments, including laparoscopic trocars (the PrecisionEdge™ product line at issue in this litigation), endoscopic graspers, and electrosurgical hand instruments. Solstice serves hospital systems and surgical centers in the United States, Europe, and select markets in the Asia-Pacific region.

Solstice Biomedical, Inc. is the company's Delaware-incorporated U.S. operating subsidiary (EIN: 84-3291056), with principal U.S. offices at 3800 Concord Pike, Suite 410, Wilmington, Delaware 19803. Solstice U.S. is responsible for the distribution, sales, marketing, and regulatory affairs of Solstice products in the United States.

For fiscal year 2023, the Solstice group reported consolidated revenue of approximately €187.4 million (unaudited). The group employs approximately 620 people worldwide, including engineering, manufacturing, regulatory, and commercial personnel.

The senior management of Solstice includes:

• Dr. Fiona Tierney — Chief Executive Officer

• Eamon Rourke — General Counsel

• Niamh Cassidy — Vice President, Regulatory & intellectual Property

• Brendan Molloy — Chief Financial Officer

The key client contacts for all insurance-related matters are Eamon Rourke, General Counsel, and Brendan Molloy, Chief Financial Officer, both of whom may be reached at Solstice's U.S. offices at the Wilmington address identified above.

VIII. Reservation of Rights

Solstice expressly reserves all of its rights under Policy No. HSI-IP-2023-04891, including, without limitation, the right to seek coverage for any and all defense costs and indemnity obligations arising from the claims asserted in Apex Surgical Innovations, Inc. v. Solstice Biomedical, Inc., Case No. 1:24-cv-00587-RGA. This reservation includes, but is not limited to, the right to seek coverage for any additional claims, counterclaims, cross-claims, or amended allegations that may arise in connection with this matter.

Nothing in this notice, nor in any prior or subsequent correspondence between the parties, is intended to limit, waive, or release any coverage rights that Solstice may have under the Policy. Solstice's provision of this notice and its cooperation with Halcyon in the claims process shall not be deemed an admission of any kind, whether as to the merits of the underlying claim, the applicability of any exclusion, or any other matter.

To the extent that Halcyon intends to issue a reservation of rights letter or to deny coverage in whole or in part, Solstice respectfully requests that any such communication be provided promptly in writing, with a full explanation of the grounds therefor, so that the parties may address any coverage issues in a timely and cooperative manner.

IX. Enclosures

The following documents are enclosed with this letter for Halcyon's review:

1. Copy of the Complaint filed May 9, 2024, in Apex Surgical Innovations, Inc. v. Solstice Biomedical, Inc., Case No. 1:24-cv-00587-RGA, U.S. District Court for the District of Delaware;

2. Copy of the Civil Cover Sheet (Form JS 44) filed in connection with the Complaint; and

3. Copy of the relevant portions of Policy No. HSI-IP-2023-04891, including the Declarations Page and applicable coverage provisions (Insuring Agreement, Conditions, and Exclusions sections).

As the litigation progresses, we will provide Halcyon with copies of all significant filings, court orders, and correspondence relevant to the defense of this matter, including, without limitation, any responsive pleadings filed by Solstice, scheduling orders entered by the Court, and any motions practice.

X. Request for Prompt Response and Contact Information

We respectfully request that Halcyon provide written acknowledgment of this notice and confirmation of coverage within ten (10) business days of receipt of this letter. In addition, we request that Halcyon assign a dedicated claims adjuster to this matter, or confirm that Ms. Sandra Keene will continue to serve in that capacity, so that we may establish a direct line of communication for ongoing case updates, billing submissions, and coverage-related correspondence.

All coverage-related correspondence should be directed to the undersigned at the address below, with copies to Eamon Rourke, General Counsel, at Solstice Biomedical, Inc.:

Marcus Delgado, Partner Calderwood & Harkness LLP 1201 Market Street, Suite 2500 Wilmington, Delaware 19801 Direct: (302) 654-7218 Facsimile: (302) 654-7300

Email: mdelgado@calderwoodharkness.com

Eamon Rourke, General Counsel Solstice Biomedical, Inc. 3800 Concord Pike, Suite 410 Wilmington, Delaware 19803 Direct: (302) 477-3910

Email: erourke@solsticebiomedical.com

We are available at your convenience to discuss this matter by telephone or in person. We look forward to working cooperatively with Halcyon throughout the defense of this claim and appreciate your prompt attention to this notice.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Marcus Delgado Partner, intellectual Property Litigation

1201 Market Street, Suite 2500 Wilmington, Delaware 19801 Direct: (302) 654-7218

Email: mdelgado@calderwoodharkness.com

cc: Eamon Rourke, General Counsel, Solstice Biomedical Devices Ltd. Brendan Molloy, Chief Financial Officer, Solstice Biomedical Devices Ltd. Catherine Bloom, Partner, Calderwood & Harkness LLP Niamh Cassidy, Vice President, Regulatory & IP, Solstice Biomedical Devices Ltd.

Encl: (3 enclosures as described above)

Policy Element	Detail
Policy Number	HSI-IP-2023-04891
Issuing Carrier	Halcyon Specialty Insurance Co.
Named Insured	Solstice Biomedical Devices Ltd. and Solstice Biomedical, Inc.
Type of Coverage	Patent Infringement Defense
Per-Occurrence Limit	$5,000,000
Aggregate Limit	$10,000,000
Self-Insured Retention (SIR)	$250,000
Accused Product	Description	Patents Allegedly Infringed
PrecisionEdge™ PE-5000 Series	5 mm trocar assembly	'237 Patent; '884 Patent
PrecisionEdge™ PE-12000 Series	12 mm trocar assembly	'237 Patent; '884 Patent; '105 Patent
PrecisionEdge™ PE-15000 Series	15 mm trocar assembly	'884 Patent; '105 Patent
Attorney	Role	Title	Current Hourly Rate
Marcus Delgado	Responsible Partner	Partner, intellectual Property	$1,250
Catherine Bloom	Billing Partner	Partner, intellectual Property	$1,250
Christy Bauer	Lead Associate	Senior Associate, intellectual Property	$875
Peter Vassiliev	Working Associate	Associate, intellectual Property	$725

CALDERWOOD & HARKNESS LLP
1201 Market Street, Suite 2500 Wilmington, Delaware 19801
299 Park Avenue, 35th Floor New York, New York 10171
Marcus Delgado, Partner Intellectual Property Litigation Direct: (302) 654-7218 Facsimile: (302) 654-7300
Email: mdelgado@calderwoodharkness.com
May 13, 2024
VIA EMAIL AND CERTIFIED MAIL, RETURN RECEIPT REQUESTED
Sandra Keene, Claims Adjuster Halcyon Specialty Insurance Co. 185 Asylum Street Hartford, Connecticut 06103
Re: Notice of Patent Infringement Claim — Policy No. HSI-IP-2023-04891
Insured: Solstice Biomedical Devices Ltd. (CRO No. 648217) and Solstice Biomedical, Inc. (EIN: 84-3291056)
Claimant: Apex Surgical Innovations, Inc.
Case: Apex Surgical Innovations, Inc. v. Solstice Biomedical, Inc., Case No. 1:24-cv-00587-RGA, U.S. District Court for the District of Delaware
Dear Ms. Keene:
I. Introduction and Purpose
This firm represents Solstice Biomedical Devices Ltd. ("Solstice Parent"), an Irish-domiciled private limited company (Company Registration Office No. 648217), and its wholly owned U.S. operating subsidiary, Solstice Biomedical, Inc. ("Solstice U.S." and, together with Solstice Parent, "Solstice" or the "Insured"), a Delaware corporation (EIN: 84-3291056), with principal U.S. offices at 3800 Concord Pike, Suite 410, Wilmington, Delaware 19803. Calderwood & Harkness LLP ("C&H") was engaged by Solstice effective May 10, 2024, in connection with the matter referenced above. Our internal matter number is 10294.0017, and the undersigned serves as the Responsible Partner on the engagement.
The purpose of this letter is to provide formal and timely notice of a patent infringement claim brought against the Insured by Apex Surgical Innovations, Inc. ("Apex"), thereby triggering Halcyon Specialty Insurance Co.'s ("Halcyon") coverage obligations under intellectual Property Litigation Insurance Policy No. HSI-IP-2023-04891 (the "Policy"). We write promptly upon the Insured's becoming aware of the filing of the underlying action and well within the time period required by the Policy's claim-reporting provisions. Solstice respectfully requests that Halcyon acknowledge coverage for the defense of this matter and designate a claims handler at the earliest opportunity.
II. Identification of the Policy
The coverage at issue is governed by the following policy:
This letter constitutes formal notice of a "Claim" as that term is defined in the Policy and is submitted in accordance with the Policy's claim-reporting provisions. Solstice expressly reserves all of its rights under the Policy, including, without limitation, the right to assert that additional provisions of the Policy afford coverage for the matters described herein. Nothing in this letter should be construed as a waiver, release, or limitation of any coverage rights, whether or not specifically referenced in this correspondence.
III. Description of the Underlying Claim
A. Filing of the Complaint
On May 9, 2024, Apex Surgical Innovations, Inc. ("Apex"), a Delaware corporation with principal offices at 1220 North Market Street, Suite 550, Wilmington, Delaware 19801, filed a Complaint for Patent Infringement (the "Complaint") in the United States District Court for the District of Delaware. The action has been assigned Case No. 1:24-cv-00587-RGA and is before the Honorable Chief Judge Richard G. Andrews.
As of the date of this letter, Solstice has not yet been formally served with the Complaint. However, Solstice has been made aware of the filing through electronic docket monitoring and anticipates that service will occur imminently through its registered agent, Pemberton Industries, located in Wilmington, Delaware. We are providing this notice in advance of formal service so that Halcyon may begin its coverage evaluation without delay and so that there is no question as to the timeliness of this notification under the Policy.
A complete copy of the Complaint, as filed, is enclosed herewith as Enclosure 1.
B. The Asserted Patents
The Complaint alleges infringement of three United States utility patents, each of which is identified below along with the specific claims asserted:
1. U.S. Patent No. 9,814,237 (the "'237 Patent") — entitled "Locking Seal Assembly for Minimally Invasive Surgical Access Device," issued November 14, 2017, with an expiration date of June 22, 2035. Apex asserts 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 April 30, 2019, with an expiration date of September 15, 2036. Apex asserts 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 March 2, 2021, with an expiration date of January 10, 2038. Apex asserts infringement of Claims 1, 4, and 8 of the '105 Patent.
All three asserted patents list Dr. Raymond Szabo, Vice President of Engineering at Apex, as the named inventor and are assigned on their face to Apex Surgical Innovations, Inc. According to publicly available prosecution records, the three patents are part of a larger patent family comprising fourteen issued U.S. patents and six pending continuation applications, suggesting the possibility that Apex may seek to assert additional patents as the litigation progresses.
C. The Accused Products
The Complaint identifies the following Solstice products as allegedly infringing the asserted patents:
The PrecisionEdge™ product line constitutes a core component of Solstice's commercial portfolio of laparoscopic trocars and minimally invasive surgical instruments. These products are manufactured at Solstice's production facilities in Ireland and are distributed throughout the United States by Solstice U.S. The PrecisionEdge™ line has been on the U.S. market since approximately 2019 and represents a material portion of Solstice's annual revenue.
D. Relief Sought by Apex
The Complaint seeks the following relief against Solstice:
• Damages in the form of a reasonable royalty for Solstice's alleged infringement of each asserted patent, in an amount not less than what would constitute adequate compensation under 35 U.S.C. § 284;
• Permanent injunctive relief enjoining Solstice from the continued manufacture, use, sale, offer for sale, and importation of the accused products;
• A finding of willful infringement and an award of enhanced (treble) damages pursuant to 35 U.S.C. § 284;
• An award of attorneys' fees and costs pursuant to 35 U.S.C. § 285, on the ground that this is an alleged "exceptional case"; and
• Such other and further relief as the Court may deem just and proper.
Apex's outside counsel in this matter is the firm of Hargrove, Tate & Bennington LLP, located at 900 North King Street, Suite 1200, Wilmington, Delaware 19801. Victoria Stanton, a partner in that firm's patent litigation practice, is identified as lead counsel for Apex.
E. Solstice's Preliminary Assessment and Intended Defenses
Solstice intends to vigorously defend against each of Apex's claims. While our investigation is at a preliminary stage, Solstice anticipates asserting defenses including, but not limited to, the following:
• Non-infringement: Solstice believes, based on its initial review, that its PrecisionEdge™ products do not practice the asserted claims of the '237, '884, or '105 Patents and that Apex's infringement theories are likely to rest on an impermissibly broad construction of the asserted claim terms.
• Invalidity under 35 U.S.C. §§ 102 and 103: Solstice has identified prior art references that it believes are highly relevant to the validity of the asserted patents. Calderwood & Harkness is coordinating with Solstice's patent prosecution counsel, Kendrick & Lau LLP, located at 601 Pennsylvania Avenue NW, Suite 820, Washington, D.C. 20004 (Dr. Jonathan Kendrick, Lead Partner), which has commenced prior art searches and prosecution history analysis in support of both litigation defenses and potential inter partes review proceedings before the United States Patent and Trademark Office.
• Inequitable conduct: Based on a preliminary review of the prosecution histories of the asserted patents, Solstice has identified potential omissions of material prior art during prosecution that may support a defense of inequitable conduct, including the failure to disclose certain European Patent Office publications that appear to be highly material to the patentability of the asserted claims.
We will provide Halcyon with further details regarding Solstice's defenses as our investigation continues and the litigation progresses.
IV. Coverage Requested
Solstice hereby requests that Halcyon acknowledge coverage for the defense of this patent infringement action under Policy No. HSI-IP-2023-04891. Specifically, Solstice seeks coverage for the following categories of defense costs:
1. Attorney fees and costs incurred by Calderwood & Harkness LLP in the defense of Apex Surgical Innovations, Inc. v. Solstice Biomedical, Inc., Case No. 1:24-cv-00587-RGA, in the U.S. District Court for the District of Delaware;
2. Expert witness fees and costs, including fees for technical experts in the fields of mechanical engineering, surgical device design, and patent claim construction, as well as damages experts who will be retained to rebut Apex's royalty and lost-profits theories;
3. E-discovery and litigation support vendor costs, including expenses associated with the collection, processing, hosting, review, and production of electronically stored information;
4. All other reasonable and necessary defense costs, including court reporter fees, deposition costs, travel expenses, filing fees, and any other costs ordinarily incurred in the defense of complex patent litigation of this nature.
Solstice acknowledges that the $250,000 self-insured retention under the Policy must be satisfied before Halcyon's coverage obligations attach. Solstice will track and document its defense expenditures and will notify Halcyon as the SIR is approached and ultimately satisfied so that Halcyon may prepare to assume its defense cost obligations in a seamless and timely manner.
We respectfully request that Halcyon designate a claims handler for this matter (or confirm that Ms. Keene will serve in that capacity) and provide written acknowledgment of coverage at the earliest opportunity. To the extent Halcyon requires any additional information or documentation to complete its coverage evaluation, please advise the undersigned promptly so that we may respond without delay.
V. Defense Counsel and Billing
Calderwood & Harkness LLP has been retained as defense counsel effective May 10, 2024. The C&H engagement team assigned to this matter consists of the following attorneys:
Our internal matter number is 10294.0017. All invoices and billing statements will reference this matter number as well as Policy No. HSI-IP-2023-04891.
We respectfully request that Halcyon confirm that it consents to Calderwood & Harkness LLP's engagement as defense counsel in this matter. In addition, we ask that Halcyon provide us with any applicable billing guidelines, litigation management protocols, invoice submission procedures, or reporting requirements that govern the Policy so that we may ensure full compliance from the outset of the engagement. We are prepared to comply with reasonable billing and reporting requirements, including the provision of periodic status reports, detailed task-based invoicing, and advance notice of significant litigation events.
VI. Preliminary Budget Estimate
A detailed phased litigation budget is currently being prepared and will be provided separately. We expect to deliver a comprehensive Budget & Fee Estimate Memorandum to Solstice and Halcyon on or about May 15, 2024, which will set forth anticipated costs by litigation phase in accordance with industry-standard phased budgeting conventions.
Based on our initial assessment of the scope and complexity of this matter, we anticipate that the case will proceed through the following phases: initial pleadings and case management; fact discovery (including extensive e-discovery of engineering design files, product specifications, and related technical documents); claim construction proceedings (commonly referred to as a Markman hearing); expert discovery (including the retention of at least two technical experts and a damages expert); summary judgment and other dispositive motions; and trial. Trial is currently anticipated for late 2025, consistent with the District of Delaware's standard scheduling practices for patent cases, although no scheduling order has yet been entered.
Our preliminary estimate is that total defense costs through trial could potentially approach or exceed the Policy's $5,000,000 per-occurrence limit, depending on the complexity of discovery, the number of asserted claims that survive early motion practice, and the scope of expert work required. This estimate includes the anticipated costs of Calderwood & Harkness's fees, expert witness fees, and e-discovery vendor costs. We intend to manage costs as efficiently as possible, including through the strategic use of technology-assisted review ("TAR" or "predictive coding") for e-discovery, the judicious delegation of tasks to associates and paralegals where appropriate, and early engagement with Apex's counsel regarding proportionality limitations on discovery.
We will keep Halcyon apprised of budgetary developments and will promptly notify Halcyon if actual costs are trending materially above or below our initial estimates.
VII. Background on the Insured
To assist Halcyon in its evaluation, we provide the following background information regarding the Insured:
Solstice Biomedical Devices Ltd. is an Irish-domiciled private limited company founded in 2011, with its registered office at Unit 14, Clonskeagh Business Park, Clonskeagh Road, Dublin 14, D14 YF28, Ireland. The company designs and manufactures a range of minimally invasive surgical instruments, including laparoscopic trocars (the PrecisionEdge™ product line at issue in this litigation), endoscopic graspers, and electrosurgical hand instruments. Solstice serves hospital systems and surgical centers in the United States, Europe, and select markets in the Asia-Pacific region.
Solstice Biomedical, Inc. is the company's Delaware-incorporated U.S. operating subsidiary (EIN: 84-3291056), with principal U.S. offices at 3800 Concord Pike, Suite 410, Wilmington, Delaware 19803. Solstice U.S. is responsible for the distribution, sales, marketing, and regulatory affairs of Solstice products in the United States.
For fiscal year 2023, the Solstice group reported consolidated revenue of approximately €187.4 million (unaudited). The group employs approximately 620 people worldwide, including engineering, manufacturing, regulatory, and commercial personnel.
The senior management of Solstice includes:
• Dr. Fiona Tierney — Chief Executive Officer
• Eamon Rourke — General Counsel
• Niamh Cassidy — Vice President, Regulatory & intellectual Property
• Brendan Molloy — Chief Financial Officer
The key client contacts for all insurance-related matters are Eamon Rourke, General Counsel, and Brendan Molloy, Chief Financial Officer, both of whom may be reached at Solstice's U.S. offices at the Wilmington address identified above.
VIII. Reservation of Rights
Solstice expressly reserves all of its rights under Policy No. HSI-IP-2023-04891, including, without limitation, the right to seek coverage for any and all defense costs and indemnity obligations arising from the claims asserted in Apex Surgical Innovations, Inc. v. Solstice Biomedical, Inc., Case No. 1:24-cv-00587-RGA. This reservation includes, but is not limited to, the right to seek coverage for any additional claims, counterclaims, cross-claims, or amended allegations that may arise in connection with this matter.
Nothing in this notice, nor in any prior or subsequent correspondence between the parties, is intended to limit, waive, or release any coverage rights that Solstice may have under the Policy. Solstice's provision of this notice and its cooperation with Halcyon in the claims process shall not be deemed an admission of any kind, whether as to the merits of the underlying claim, the applicability of any exclusion, or any other matter.
To the extent that Halcyon intends to issue a reservation of rights letter or to deny coverage in whole or in part, Solstice respectfully requests that any such communication be provided promptly in writing, with a full explanation of the grounds therefor, so that the parties may address any coverage issues in a timely and cooperative manner.
IX. Enclosures
The following documents are enclosed with this letter for Halcyon's review:
1. Copy of the Complaint filed May 9, 2024, in Apex Surgical Innovations, Inc. v. Solstice Biomedical, Inc., Case No. 1:24-cv-00587-RGA, U.S. District Court for the District of Delaware;
2. Copy of the Civil Cover Sheet (Form JS 44) filed in connection with the Complaint; and
3. Copy of the relevant portions of Policy No. HSI-IP-2023-04891, including the Declarations Page and applicable coverage provisions (Insuring Agreement, Conditions, and Exclusions sections).
As the litigation progresses, we will provide Halcyon with copies of all significant filings, court orders, and correspondence relevant to the defense of this matter, including, without limitation, any responsive pleadings filed by Solstice, scheduling orders entered by the Court, and any motions practice.
X. Request for Prompt Response and Contact Information
We respectfully request that Halcyon provide written acknowledgment of this notice and confirmation of coverage within ten (10) business days of receipt of this letter. In addition, we request that Halcyon assign a dedicated claims adjuster to this matter, or confirm that Ms. Sandra Keene will continue to serve in that capacity, so that we may establish a direct line of communication for ongoing case updates, billing submissions, and coverage-related correspondence.
All coverage-related correspondence should be directed to the undersigned at the address below, with copies to Eamon Rourke, General Counsel, at Solstice Biomedical, Inc.:
Marcus Delgado, Partner Calderwood & Harkness LLP 1201 Market Street, Suite 2500 Wilmington, Delaware 19801 Direct: (302) 654-7218 Facsimile: (302) 654-7300
Email: mdelgado@calderwoodharkness.com
Eamon Rourke, General Counsel Solstice Biomedical, Inc. 3800 Concord Pike, Suite 410 Wilmington, Delaware 19803 Direct: (302) 477-3910
Email: erourke@solsticebiomedical.com
We are available at your convenience to discuss this matter by telephone or in person. We look forward to working cooperatively with Halcyon throughout the defense of this claim and appreciate your prompt attention to this notice.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Marcus Delgado Partner, intellectual Property Litigation
1201 Market Street, Suite 2500 Wilmington, Delaware 19801 Direct: (302) 654-7218
Email: mdelgado@calderwoodharkness.com
cc: Eamon Rourke, General Counsel, Solstice Biomedical Devices Ltd. Brendan Molloy, Chief Financial Officer, Solstice Biomedical Devices Ltd. Catherine Bloom, Partner, Calderwood & Harkness LLP Niamh Cassidy, Vice President, Regulatory & IP, Solstice Biomedical Devices Ltd.
Encl: (3 enclosures as described above)
Policy Element | Detail
Policy Number | HSI-IP-2023-04891
Issuing Carrier | Halcyon Specialty Insurance Co.
Named Insured | Solstice Biomedical Devices Ltd. and Solstice Biomedical, Inc.
Type of Coverage | Patent Infringement Defense
Per-Occurrence Limit | $5,000,000
Aggregate Limit | $10,000,000
Self-Insured Retention (SIR) | $250,000
Accused Product | Description | Patents Allegedly Infringed
PrecisionEdge™ PE-5000 Series | 5 mm trocar assembly | '237 Patent; '884 Patent
PrecisionEdge™ PE-12000 Series | 12 mm trocar assembly | '237 Patent; '884 Patent; '105 Patent
PrecisionEdge™ PE-15000 Series | 15 mm trocar assembly | '884 Patent; '105 Patent
Attorney | Role | Title | Current Hourly Rate
Marcus Delgado | Responsible Partner | Partner, intellectual Property | $1,250
Catherine Bloom | Billing Partner | Partner, intellectual Property | $1,250
Christy Bauer | Lead Associate | Senior Associate, intellectual Property | $875
Peter Vassiliev | Working Associate | Associate, intellectual Property | $725

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