CONFIDENTIAL AND PRIVILEGED — MEDIATOR'S EYES ONLY This Confidential Mediation Statement is submitted solely for the use of the mediator, Hon. Margaret Forsythe (Ret.), in connection with the mediation session scheduled for March 17, 2025, at Amberstone ADR Services. This document is confidential and privileged. It has been prepared exclusively for the mediator and is not to be disclosed to the opposing party, Apex Surgical Innovations, Inc., or its counsel, Hargrove, Tate & Bennington LLP, or to any other person or entity. This document is not to be filed with the United States District Court for the District of Delaware or any other court. All statements, analyses, assessments, and settlement positions contained herein are protected under Federal Rule of Evidence 408, Delaware Uniform Mediation Act, 10 Del. C. §§ 8140–8150, and the confidentiality provisions of the Amberstone ADR Services Agreement for Mediation. Nothing contained in this statement constitutes an admission of fact, liability, or the validity or enforceability of any patent or claim.
CONFIDENTIAL MEDIATION STATEMENT OF SOLSTICE BIOMEDICAL DEVICES LTD. AND SOLSTICE BIOMEDICAL, INC.
March 14, 2025
Submitted to:
Hon. Margaret Forsythe (Ret.) Amberstone ADR Services 1000 North West Street, Suite 1200 Wilmington, Delaware 19801
Mediation Date: March 17, 2025
Case: Apex Surgical Innovations, Inc. v. Solstice Biomedical, Inc., Case No. 1:24-cv-00587-RGA, United States District Court for the District of Delaware (Chief Judge Richard G. Andrews)
Submitted by:
Calderwood & Harkness LLP 1201 Market Street, Suite 2500 Wilmington, Delaware 19801
Marcus Delgado, Responsible Partner Christy Bauer, Lead Associate
Counsel for Defendants Solstice Biomedical Devices Ltd. and Solstice Biomedical, Inc.
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I. INTRODUCTION AND PURPOSE
This Confidential Mediation Statement is submitted on behalf of Defendants Solstice Biomedical Devices Ltd. ("Solstice") and its United States operating subsidiary, Solstice Biomedical, Inc. ("Solstice US" and, together with Solstice, "Defendants" or "Solstice"), in advance of the mediation session scheduled for March 17, 2025, before the Honorable Margaret Forsythe (Ret.) at Amberstone ADR Services in Wilmington, Delaware. This statement is intended to provide the mediator with a comprehensive overview of the parties, the dispute, Solstice's defenses, an objective assessment of the litigation risks faced by both sides, an analysis of damages exposure, and Solstice's settlement position, all in furtherance of a productive and efficient mediation session.
Solstice Biomedical Devices Ltd. is an Irish-domiciled private limited company (Companies Registration Office No. 648217), with its registered office at Unit 14, Clonskeagh Business Park, Clonskeagh Road, Dublin 14, D14 YF28, Ireland. Founded in 2011 by a team of biomedical engineers and surgeons, Solstice designs and manufactures minimally invasive surgical instruments for use in general surgery, gynecology, urology, and bariatric procedures. In fiscal year 2023, Solstice reported revenue of approximately €187.4 million (unaudited), and the company employs approximately 620 individuals worldwide across its Dublin headquarters, its manufacturing facility in Galway, Ireland, and its sales and distribution operations in the United States, the United Kingdom, Germany, and Japan.
Solstice Biomedical, Inc. is a Delaware corporation (Employer Identification Number: 84-3291056) with its principal offices at 3800 Concord Pike, Suite 410, Wilmington, Delaware 19803. Solstice US serves as the United States operating subsidiary of Solstice Biomedical Devices Ltd. and is responsible for the marketing, distribution, and sale of Solstice products to hospitals, ambulatory surgery centers, and group purchasing organizations throughout the United States. Solstice US is the named defendant in this action and conducts its business activities subject to the supervision and direction of the parent company.
Solstice's product portfolio includes its flagship PrecisionEdge™ line of laparoscopic trocars (offered in 5 mm, 12 mm, and 15 mm configurations), endoscopic graspers, and electrosurgical hand instruments. The PrecisionEdge™ line has earned a strong reputation among surgeons for its ergonomic design, reliability, and safety features, and it represents a significant and growing portion of Solstice's revenue in the North American market.
The key client personnel with direct involvement in this litigation and the mediation process are:
•  Dr. Fiona Tierney, Chief Executive Officer, Solstice Biomedical Devices Ltd.;
•  Eamon Rourke, General Counsel, Solstice Biomedical Devices Ltd.;
•  Niamh Cassidy, Vice President, Regulatory & intellectual Property, Solstice Biomedical Devices Ltd.; and
•  Brendan Molloy, Chief Financial Officer, Solstice Biomedical Devices Ltd.
Plaintiff Apex Surgical Innovations, Inc. ("Apex") is a Delaware corporation (Employer Identification Number: 51-0483762) with its principal office at 1220 North Market Street, Suite 550, Wilmington, Delaware 19801. Apex was founded in 2006 and is a manufacturer of surgical access devices and related instrumentation for minimally invasive surgery. Based on publicly available information and discovery materials, Apex's estimated fiscal year 2023 revenue was approximately $312 million, and the company employs approximately 1,100 individuals. Apex is represented in this litigation by Hargrove, Tate & Bennington LLP, with Victoria Stanton serving as Lead Partner and Derek Loomis as Associate.
The purpose of this mediation statement is to provide the mediator with the information necessary to facilitate a meaningful and productive mediation. Specifically, this statement: (1) summarizes the procedural history and current status of the litigation; (2) describes the asserted patents and accused products; (3) sets forth Solstice's non-infringement and invalidity defenses and assesses the strength of those defenses; (4) analyzes the damages claims advanced by Apex and identifies the significant flaws in Apex's damages methodology; (5) provides a probability-weighted litigation risk assessment; (6) identifies the costs of continued litigation; and (7) outlines Solstice's settlement position and the framework within which it is prepared to negotiate. Solstice submits this statement in the hope that it will enable the mediator to understand the true settlement value of this case and to guide the parties toward a fair and commercially reasonable resolution.
II. PROCEDURAL HISTORY AND STATUS OF THE LITIGATION
A. Filing and Pleadings
On May 9, 2024, Apex Surgical Innovations, Inc. filed a Complaint in the United States District Court for the District of Delaware, initiating this action under Case No. 1:24-cv-00587-RGA. The Complaint alleged patent infringement of three utility patents — 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") — and sought damages for past infringement, injunctive relief, and enhanced damages. The case was assigned to Chief Judge Richard G. Andrews.
On May 23, 2024, Solstice Biomedical, Inc. was served with the Complaint via its registered agent, Pemberton Industries, located in Wilmington, Delaware. Service on Solstice Biomedical Devices Ltd. was effected through the Hague Convention process, with service completed in Ireland on June 3, 2024.
On June 14, 2024, Calderwood & Harkness LLP, on behalf of Solstice Biomedical, Inc., filed its Answer, Affirmative Defenses, and Counterclaims. The Answer denied the material allegations of infringement. The Affirmative Defenses asserted non-infringement as to each of the asserted patents, invalidity under 35 U.S.C. §§ 102 and 103, and inequitable conduct before the United States Patent and Trademark Office ("USPTO"). The Counterclaims sought declaratory judgments of non-infringement and invalidity as to each of the three asserted patents. Solstice Biomedical Devices Ltd. appeared through Calderwood & Harkness and joined in the Answer, Affirmative Defenses, and Counterclaims.
B. Discovery.  The initial Scheduling Conference before Chief Judge Andrews took place on July 2, 2024. At that conference, the Court entered a Scheduling Order establishing deadlines for fact and expert discovery, claim construction briefing, dispositive motions, and trial. Notably, the Court also ordered the parties to participate in mediation prior to trial, which is the basis for the March 17, 2025 session.
On July 15, 2024, the parties filed a Joint discovery Plan outlining the scope, timing, and procedures for fact discovery, including agreements regarding the use of technology-assisted review ("TAR") for electronically stored information ("ESI"), custodian identification, and search term protocols.
Written discovery commenced promptly. On August 5, 2024, Apex served its First Set of Interrogatories (18 interrogatories) and First Requests for Production of Documents (42 requests) directed to Solstice. On August 19, 2024, Solstice served its First Set of Interrogatories (15 interrogatories) and First Requests for Production of Documents (38 requests) directed to Apex.
Document productions were substantial. On September 30, 2024, Solstice produced 48,217 documents, Bates-numbered SBD-000001 through SBD-048217. These documents included design files, engineering specifications, regulatory submissions, sales data, and internal correspondence relating to the development and commercialization of the PrecisionEdge™ product line. On October 7, 2024, Apex produced 31,450 documents, Bates-numbered APEX-000001 through APEX-031450, including prosecution files, licensing agreements, internal memoranda, and financial data relating to the asserted patents and Apex's trocar product line.
The parties engaged DataVault Litigation Solutions, LLC, as their joint e-discovery vendor. DataVault processed approximately 1.2 terabytes of ESI from both parties' custodians, and the parties utilized a TAR protocol employing predictive coding to identify responsive documents from a total universe of approximately 312,000 documents. The TAR protocol was validated through iterative quality-control sampling, and the parties reached agreement on the TAR methodology without the need for judicial intervention.
On October 14, 2024, Solstice served its Second Set of Requests for Production of Documents, targeting additional categories of licensing and prior art materials identified during the initial review of Apex's production. On November 1, 2024, Solstice served a Rule 30(b)(6) Deposition Notice on Apex, designating twelve topics for examination, including Apex's prosecution of the asserted patents, its licensing practices, its damages theories, and its knowledge of prior art.
In addition to party discovery, on September 12, 2024, Solstice issued a third-party subpoena to Veridian Medical Technologies, Inc. ("Veridian"), a competitor in the minimally invasive surgical device market, seeking production of prior art documents relating to trocar seal and blade deployment mechanisms. Veridian's production, completed after negotiation regarding scope, yielded critical prior art materials that are central to Solstice's invalidity defenses, as discussed in Section VI below.
Fact discovery is now substantially complete. Depositions of key witnesses from both parties have been taken, including depositions of Dr. Raymond Szabo (Apex's named inventor and VP of Engineering), Martin Hale (Apex's General Counsel), Niamh Cassidy (Solstice's VP of Regulatory & IP), and several engineers from both companies involved in the design and development of the accused and patented products. The testimony obtained in these depositions is consistent with Solstice's non-infringement and invalidity positions and, in several instances, undermines the factual predicates of Apex's infringement case.
C. Claim Construction
Claim construction proceedings followed the standard Markman framework. On October 22, 2024, the parties exchanged their respective Proposed Claim Constructions for nine disputed claim terms across the three asserted patents. On October 28, 2024, Solstice filed its individual Claim Construction Brief, setting forth detailed arguments supported by intrinsic evidence (including the patent specifications, prosecution histories, and related family members) and extrinsic evidence (including dictionaries, treatises, and the declaration of Dr. Miriam Ostrowski). On November 4, 2024, the parties filed their Joint Claim Construction Brief.
The Markman Hearing was held before Chief Judge Andrews on November 18, 2024. Both parties presented oral argument, and the Court engaged in extensive questioning of counsel regarding the intrinsic record and the implications of the proposed constructions for the infringement and invalidity analyses.
On December 6, 2024, Chief Judge Andrews issued his Claim Construction Order (the "Markman Order"), construing all nine disputed terms. Of the nine terms, five were construed in a manner consistent with Solstice's proposed constructions, while four were construed in a manner consistent with Apex's proposed constructions. This result is highly significant to the posture of the case and to the settlement analysis.
The Court's favorable constructions are central to Solstice's non-infringement defenses. In particular, the Court's construction of "locking seal assembly" (a term found in the '237 Patent) adopted a narrow construction requiring a specific mechanical interlock feature that is absent from the PE-5000 Series. Similarly, the Court's construction of "retractable blade deployment mechanism" (a term found in the '884 Patent) requires a spring-loaded retraction feature with a particular actuation sequence that differs materially from the blade actuation system employed in both the PE-5000 and PE-15000 Series. These constructions significantly narrow the scope of Apex's infringement case, particularly as to the PE-5000 Series, and correspondingly strengthen Solstice's invalidity defenses by broadening the universe of prior art that reads on the asserted claims under the Court's constructions.
D. Expert discovery
Expert discovery opened on January 13, 2025, following the completion of fact discovery and the issuance of the Markman Order.
On January 27, 2025, Solstice served the expert report of Dr. Miriam Ostrowski, a Professor of Biomedical Engineering at the University of Pennsylvania and a recognized expert in surgical device design and minimally invasive surgical instrumentation. Dr. Ostrowski's report addresses both invalidity and non-infringement, providing detailed element-by-element analyses demonstrating that the accused PrecisionEdge™ products do not practice the asserted claims under the Court's constructions and that the asserted claims are anticipated and/or rendered obvious by the prior art.
On February 10, 2025, Apex served the expert report of Dr. Calvin Ng, its infringement expert. Dr. Ng opines that all three PrecisionEdge™ product lines infringe the asserted claims, but his analysis relies on claim constructions that differ from those adopted by the Court, and his element-by-element comparisons contain significant analytical gaps, particularly as to the PE-5000 and PE-15000 Series.
On February 14, 2025, Solstice served the damages report of Dr. Elena Marchetti, Managing Director at Pinnacle Economics Group LLC, a litigation economics consulting firm. Dr. Marchetti's report presents a rigorous Georgia-Pacific analysis and concludes that a reasonable royalty for past infringement, assuming infringement is found, would be in the range of $3–5 million. On the same date, Apex served the damages report of Hugh Danaher, CFA, of Keystone Valuation Advisors LLC. Mr. Danaher asserts that Apex is entitled to $31.8 million in reasonable royalty damages. As discussed in detail in Section VII below, Mr. Danaher's analysis is methodologically flawed, relies on an inflated royalty base, and employs inapt comparable licenses.
On March 3, 2025, the parties exchanged rebuttal expert reports. Solstice's rebuttal reports further expose the weaknesses in Apex's infringement and damages theories. Expert depositions are scheduled to follow the mediation.
E. Upcoming Deadlines
The case is on track for the following upcoming milestones:
•  Summary Judgment Motions: Solstice anticipates filing motions for summary judgment of non-infringement as to the PE-5000 Series and, potentially, the PE-15000 Series. Summary judgment briefing is expected in April 2025.
•  Expert Depositions: Depositions of all four experts are to be completed following the mediation.
•  Pretrial Conference and Preparation: Pretrial motions, including motions in limine and Daubert challenges, are expected in the summer of 2025.
•  Trial Date: The trial is currently set for September 30, 2025. The trial is expected to take five to seven court days.
The case is thus at an ideal stage for mediation: claim construction is complete, expert reports have been exchanged, and both parties have a full picture of the evidence and the risks.
III. THE ASSERTED PATENTS
A. Overview of the Patent Portfolio
Apex asserts three United States utility patents in this litigation. All three patents name Dr. Raymond Szabo, Apex's Vice President of Engineering, as the sole inventor, and all three are assigned to Apex Surgical Innovations, Inc. The asserted patents are part of a larger family of fourteen issued U.S. patents and six pending continuation applications (collectively, the "Apex Trocar Patent Family"), which are directed generally to various aspects of trocar design for minimally invasive surgery, including seal mechanisms, blade deployment systems, and insufflation valve assemblies.
The breadth of the Apex Trocar Patent Family is relevant to the settlement analysis because any resolution that addresses only the three asserted patents leaves Solstice exposed to potential future assertions based on the remaining family members. As discussed in Section X below, Solstice's settlement objectives include obtaining a license or covenant not to sue that extends beyond the three asserted patents to encompass the broader patent family, thereby providing comprehensive business certainty.
B. U.S. Patent No. 9,814,237 (the "'237 Patent")
•  Title: "Locking Seal Assembly for Minimally Invasive Surgical Access Device"
•  Issue Date: November 14, 2017
•  Expiration Date: June 22, 2035 (based on the earliest effective filing date and any applicable patent term adjustments)
•  Priority Date: June 22, 2015
•  Claims Asserted: Claims 1, 3, 7, and 12
The '237 Patent is generally directed to a locking-seal mechanism used in trocar assemblies for minimally invasive surgery. The specification describes a seal assembly that provides both instrument sealing (to maintain pneumoperitoneum during laparoscopic procedures) and a locking feature that secures the seal in a closed position when no instrument is inserted. The asserted claims recite a combination of structural elements including a housing, a seal member, a locking mechanism with a specific interlock geometry, and a release actuator. The prosecution history reflects that Apex narrowed the claims during prosecution to distinguish prior art relating to conventional flap-valve seals, which is significant for both invalidity and prosecution history estoppel purposes.
Apex accuses the PE-5000 Series and the PE-12000 Series of infringing the '237 Patent.
C. U.S. Patent No. 10,271,884 (the "'884 Patent")
•  Title: "Retractable Blade Deployment Mechanism for Trocar Systems"
•  Issue Date: April 30, 2019
•  Expiration Date: September 15, 2036 (based on the earliest effective filing date and any applicable patent term adjustments)
•  Priority Date: September 15, 2016
•  Claims Asserted: Claims 1, 2, 5, 9, and 14
The '884 Patent is generally directed to a retractable blade deployment mechanism for trocars. The specification describes a blade assembly that extends from a trocar tip to penetrate tissue during insertion and then automatically retracts into a shielded position once the trocar has passed through the abdominal wall, thereby reducing the risk of inadvertent organ damage. The asserted claims recite specific structural and functional elements, including a spring-loaded retraction assembly, a blade housing with a defined actuation pathway, and a safety shield that deploys upon retraction. This is the patent for which Solstice's invalidity case is strongest, as the blade deployment mechanism described in the '884 Patent was a well-known and predictable combination of components in the trocar field at the time of the invention.
Apex accuses all three PrecisionEdge™ product lines — the PE-5000, PE-12000, and PE-15000 Series — of infringing the '884 Patent.
D. U.S. Patent No. 10,932,105 (the "'105 Patent")
•  Title: "Integrated Insufflation Valve and Seal for Laparoscopic Trocar"
•  Issue Date: March 2, 2021
•  Expiration Date: January 10, 2038 (based on the earliest effective filing date and any applicable patent term adjustments)
•  Priority Date: January 10, 2018
•  Claims Asserted: Claims 1, 4, and 8
The '105 Patent is generally directed to an integrated insufflation valve and seal design for laparoscopic trocars. The specification describes a trocar assembly in which the insufflation valve (used to introduce CO₂ gas into the abdominal cavity to maintain pneumoperitoneum) is integrated with the instrument seal in a compact, unitary housing. The asserted claims recite a specific valve architecture with a dual-port configuration and a sealing interface that maintains gas-tight integrity during instrument exchanges. The '105 Patent is the most recently issued of the three asserted patents and has the longest remaining patent term.
Apex accuses the PE-12000 Series and the PE-15000 Series of infringing the '105 Patent.
IV. THE ACCUSED PRODUCTS
The accused products are the three product lines within Solstice's PrecisionEdge™ family of laparoscopic trocars:
1.  PrecisionEdge™ PE-5000 Series (5 mm trocar assembly) — accused of infringing the '237 Patent and the '884 Patent.
2.  PrecisionEdge™ PE-12000 Series (12 mm trocar assembly) — accused of infringing all three asserted patents (the '237, '884, and '105 Patents).
3.  PrecisionEdge™ PE-15000 Series (15 mm trocar assembly) — accused of infringing the '884 Patent and the '105 Patent.
The PrecisionEdge™ line was developed by Solstice's engineering team in Dublin beginning in 2018, with the first commercial sales in the United States in early 2021. The products have been well-received by surgeons and have achieved meaningful market penetration in a competitive field that includes not only Apex but also major competitors such as Harborview Corporation, Calderon Corporation (Kestrel Partners LLC), and Beaumont Group.
The combined U.S. sales of the accused PrecisionEdge™ products from the initial commercial launch through September 30, 2024, total $74.6 million, broken down as follows:
The weighted average gross margin on the accused PrecisionEdge™ products across all three product lines for the relevant period is 61.3%. This figure reflects the relatively high margins typical of specialty surgical devices, which incorporate significant engineering, quality control, and regulatory costs that are amortized over the product life cycle. It is important to note, however, that gross margin is not equivalent to operating margin, and a substantial portion of the gross margin is consumed by sales and marketing expenses, research and development costs, regulatory compliance, and general and administrative overhead. As discussed in Section VII below, Apex's damages expert improperly treats the 61.3% gross margin as a reliable proxy for a reasonable royalty rate, which it is not.
V. SOLSTICE'S NON-INFRINGEMENT DEFENSES
A. Impact of the Claim Construction Order
The December 6, 2024 Claim Construction Order is the single most important development in this litigation to date. Chief Judge Andrews construed nine disputed claim terms, and five of those nine constructions were consistent with Solstice's proposed constructions. These five favorable constructions are not merely procedural victories — they are substantively central to Solstice's non-infringement positions and, in some cases, effectively resolve the infringement question as to particular product lines and patent claims.
In particular, two constructions are dispositive or near-dispositive:
First, the Court's construction of "locking seal assembly" (Claims 1, 3, 7, and 12 of the '237 Patent) requires a mechanical interlock that physically prevents the seal from opening under internal gas pressure when no instrument is inserted. The Court rejected Apex's broader construction, which would have encompassed any seal with a friction-fit closure. Under the Court's construction, the PE-5000 Series — which uses a silicone duck-bill valve with a passive, friction-based closure rather than a mechanical interlock — does not satisfy this limitation.
Second, the Court's construction of "retractable blade deployment mechanism" (Claims 1, 2, 5, 9, and 14 of the '884 Patent) requires a spring-loaded retraction assembly with a defined two-stage actuation sequence: (i) blade extension triggered by forward pressure against tissue, and (ii) automatic spring-driven retraction upon penetration. The Court rejected Apex's proposed construction, which would have encompassed any blade that moves between extended and retracted positions regardless of the actuation mechanism. Under the Court's construction, the PE-5000's and PE-15000's blade actuation systems, which employ a single-stage cam-driven mechanism rather than a two-stage spring-loaded system, fall outside the scope of the claims.
The four constructions favorable to Apex relate primarily to terms in the '105 Patent and to certain dependent claim limitations. While these constructions provide Apex with some support for its infringement arguments as to the PE-12000 Series, they do not overcome the fundamental structural differences between the accused products and the patented designs as to the PE-5000 and PE-15000 Series.
B. Non-Infringement — PE-5000 Series ('237 and '884 Patents)
Solstice's non-infringement position is strongest with respect to the PE-5000 Series. The PE-5000 is a 5 mm trocar assembly designed for use with standard 5 mm laparoscopic instruments. It employs a fundamentally different sealing mechanism and blade actuation system from those described in the asserted claims of the '237 and '884 Patents.
As to the '237 Patent: The PE-5000's seal is a molded silicone duck-bill valve that relies on the inherent elasticity of the silicone material to self-close when no instrument is inserted. There is no mechanical interlock, no locking mechanism, and no release actuator — all of which are required by the Court's construction of "locking seal assembly." A detailed element-by-element comparison, set forth in Solstice's preliminary claim chart dated July 20, 2024, demonstrates that the PE-5000 does not meet the "locking seal assembly" limitation of any of the asserted claims (Claims 1, 3, 7, and 12). Dr. Ostrowski's expert report confirms this analysis and provides a detailed structural comparison supported by cross-sectional photographs, CAD renderings, and physical testing data.
As to the '884 Patent: The PE-5000's blade is actuated by a single-stage cam-driven mechanism in which the blade extends and retracts in a continuous, mechanically linked motion driven by the rotation of a thumb-wheel on the trocar handle. There is no spring-loaded retraction, and there is no two-stage actuation sequence. Under the Court's construction of "retractable blade deployment mechanism," the PE-5000's blade actuation system does not meet the claimed limitation. The preliminary claim chart dated July 22, 2024, maps each element of the asserted claims against the PE-5000's design and identifies the specific limitations that are absent. Dr. Ostrowski's analysis in her January 27, 2025 expert report provides a thorough and well-supported explanation of why the PE-5000 does not infringe.
The PE-5000 Series is a strong candidate for summary judgment of non-infringement. Solstice intends to file a motion for summary judgment on the PE-5000 Series in April 2025, and counsel believes there is a high probability of success on that motion. If summary judgment is granted as to the PE-5000 Series, the sales attributable to that product line (approximately $12.1 million in FY 2021, with proportional shares of subsequent years' revenues) would be excluded entirely from the damages calculation, significantly reducing Solstice's exposure.
C. Non-Infringement — PE-12000 Series (All Three Patents)
The PE-12000 Series presents a closer infringement question than the PE-5000 Series, and Solstice acknowledges that this is where Apex's infringement case is strongest. However, significant non-infringement arguments remain, and the outcome on the PE-12000 is by no means certain in Apex's favor.
The PE-12000 is a 12 mm trocar assembly designed for use with larger laparoscopic instruments, including linear staplers and specimen retrieval bags. Due to the different size and functional requirements of the 12 mm platform, the PE-12000 employs certain design features that are more complex than those of the PE-5000, including a multi-component seal assembly and a more sophisticated blade actuation system.
As to the '237 Patent: The PE-12000's seal assembly includes a spring-biased latch that holds the seal in a closed position. While this latch is functionally similar to the "locking seal assembly" described in the '237 Patent, there are meaningful structural differences between the PE-12000's latch design and the specific mechanical interlock geometry required by the Court's construction. Specifically, the PE-12000's latch engages along a linear axis, whereas the claimed interlock requires a rotational engagement. Whether this structural difference is sufficient to avoid infringement is a factual dispute that is likely to be resolved at trial.
As to the '884 Patent: The PE-12000 uses a hybrid blade actuation system that incorporates both cam-driven and spring-assisted elements. The presence of a spring component brings the PE-12000 closer to the Court's construction of "retractable blade deployment mechanism" than the PE-5000, but the PE-12000's system does not employ the specific two-stage actuation sequence (tissue-triggered extension followed by automatic spring-driven retraction) required by the Court's construction. The PE-12000's spring assists with retraction speed but is not the primary actuation driver; the cam mechanism controls the blade's deployment path throughout the stroke. This distinction is meaningful but may require expert testimony and jury resolution.
As to the '105 Patent: The PE-12000 incorporates an integrated insufflation valve and seal housing. Certain structural features of this integrated design bear similarity to the configuration described in the '105 Patent. However, the PE-12000's valve uses a single-port configuration rather than the dual-port configuration recited in the asserted claims, and the sealing interface employs a different material and geometry. These differences support non-infringement, but the '105 Patent claims are broadly drafted, and the four claim constructions that favor Apex include certain terms from the '105 Patent that could support Apex's position.
In sum, the PE-12000 Series presents a moderate infringement risk. While Solstice has genuine and substantive non-infringement arguments, the outcome on the PE-12000 is more uncertain than on the other two product lines, and this uncertainty is factored into the probability-weighted analysis in Section VIII below.
D. Non-Infringement — PE-15000 Series ('884 and '105 Patents)
The PE-15000 Series is a 15 mm trocar assembly designed for specialized procedures requiring larger instrument access, such as bariatric surgery and complex hernia repair. The PE-15000 has distinct design features that support strong non-infringement arguments.
As to the '884 Patent: The PE-15000 employs a blade deployment geometry that is fundamentally different from the claimed "retractable blade deployment mechanism." The PE-15000's blade follows a helical deployment path created by a threaded sleeve mechanism, in contrast to the linear spring-loaded retraction required by the Court's construction. The helical geometry produces a rotary cutting motion rather than the linear penetration-and-retraction motion described in the patent. Dr. Ostrowski's analysis confirms that the PE-15000's blade deployment mechanism falls outside both the literal scope of the claims and any reasonable application of the doctrine of equivalents. Moreover, prosecution history estoppel significantly constrains Apex's ability to assert equivalents as to the '884 Patent because, during prosecution, Apex's patent counsel made explicit arguments to the USPTO distinguishing the claimed spring-loaded retraction mechanism from prior art cam-driven and threaded mechanisms — precisely the types of mechanisms employed in the PE-15000.
As to the '105 Patent: The PE-15000's insufflation valve uses a different sealing architecture from that described in the '105 Patent. Specifically, the PE-15000 employs a coaxial valve design in which the insufflation port and the instrument seal are arranged concentrically, whereas the '105 Patent claims a side-by-side dual-port configuration with a specific sealing interface between the two ports. The structural differences are readily apparent from the cross-sectional comparison provided in Dr. Ostrowski's expert report. While Apex may argue that the PE-15000's coaxial design is an equivalent of the claimed side-by-side configuration, any such argument is undermined by prosecution history estoppel, as Apex narrowed its claims during prosecution to specifically distinguish coaxial valve designs that were cited as prior art.
Dr. Ostrowski's analysis supports the absence of both literal infringement and infringement under the doctrine of equivalents. Apex's doctrine-of-equivalents arguments are particularly weak given the prosecution history estoppel that constrains Apex's ability to recapture subject matter that was surrendered during prosecution. Accordingly, the PE-15000 Series presents a lower infringement risk than the PE-12000 Series.
E. Overall Assessment of Infringement Risk
The following table summarizes Solstice's assessment of the infringement risk by product line:
Solstice's non-infringement position is strongest on the PE-5000 Series, where the probability of prevailing at trial or on summary judgment is high. The PE-15000 Series also presents strong non-infringement arguments, particularly in light of prosecution history estoppel. The PE-12000 Series is the product line on which the infringement question is closest, and this is the area where the litigation risk is concentrated.
VI. SOLSTICE'S INVALIDITY DEFENSES
A. Prior Art Identified
Solstice has conducted an extensive prior art search, both independently and through its retained patent search firm, Kendrick & Lau LLP. Dr. Jonathan Kendrick, a registered patent agent and former senior examiner at the USPTO with over fifteen years of experience in the surgical devices art unit, led the prior art search effort. The search identified numerous prior art references — including published patent applications, issued patents, academic journal articles, FDA clearance submissions, and publicly available product literature — that predate the priority dates of the asserted patents and disclose the claimed features individually and in various combinations.
In addition to the prior art identified through formal searches, third-party documents obtained from Veridian Medical Technologies, Inc. via subpoena are particularly relevant. The Veridian production included internal engineering reports, design drawings, and testing data relating to Veridian's TroGuard™ trocar product line, which was commercially available in the United States from 2012 to 2017 — well before the priority dates of the asserted patents. The Veridian materials confirm the existence and public availability of prior art that anticipates and/or renders obvious the asserted claims.
B. Anticipation (35 U.S.C. § 102)
Solstice has identified at least two prior art references that anticipate certain claims of the '237 Patent:
•  U.S. Patent Application Publication No. 2014/0107679 (the "Kramer Publication"), published April 17, 2014, which discloses a trocar seal assembly with a mechanical interlock that matches, element by element, the claimed "locking seal assembly" of Claims 1 and 3 of the '237 Patent under the Court's construction.
•  Veridian Internal Engineering Report No. VER-ENG-2013-042, dated March 15, 2013, which constitutes a printed publication under § 102 and discloses the structural features recited in Claims 1 and 3 of the '237 Patent, including the housing, seal member, locking mechanism with interlock geometry, and release actuator.
Dr. Ostrowski's invalidity expert report, served January 27, 2025, provides detailed element-by-element mappings demonstrating that each of these references discloses every limitation of Claims 1 and 3 of the '237 Patent. If the Court or a jury finds that either of these references qualifies as anticipatory prior art, Claims 1 and 3 of the '237 Patent — which are the independent claims from which the remaining asserted claims depend — would be invalid, potentially eliminating the '237 Patent from the case entirely.
C. Obviousness (35 U.S.C. § 103)
In addition to anticipation, Solstice asserts that the asserted claims of all three patents are invalid as obvious under 35 U.S.C. § 103. Combinations of the identified prior art references render the asserted claims obvious, as the claimed features represent predictable combinations of known components that a person of ordinary skill in the art would have been motivated to combine with a reasonable expectation of success.
The obviousness case is particularly strong against the '884 Patent (Claims 1, 2, 5, 9, and 14). The blade deployment mechanism described in the '884 Patent — a spring-loaded retraction assembly with a two-stage actuation sequence — was a well-known design approach in the trocar field by the time of the claimed invention. Multiple prior art references, including the Kramer Publication, a published PCT application by Surgical Dynamics GmbH (WO 2015/034987, published March 19, 2015), and an article by Dr. Leah Whitfield published in the Journal of Minimally Invasive Surgery (Vol. 22, No. 3, pp. 187–195, September 2014), collectively disclose every element of the asserted claims. The motivation to combine these references is provided by the well-recognized need in the field for a trocar blade that automatically retracts to reduce the risk of inadvertent tissue damage — a goal that was expressly articulated in the prior art literature and that drove the design of multiple commercially available products before the '884 Patent's priority date.
The obviousness case against the '237 Patent (beyond the anticipation defense discussed above) and the '105 Patent is moderate but credible. Combinations of the prior art disclose the claimed locking seal and integrated insufflation valve features, and the motivation to combine is provided by the general trend in the trocar field toward more compact, integrated device architectures.
With respect to secondary considerations of non-obviousness, Apex may argue commercial success of its own patented products and a purported long-felt need for the claimed inventions. However, these arguments are weak in the context of this case. The commercial success of Apex's products is attributable to factors other than the patented features — including Apex's brand reputation, its established distribution relationships, and its sales force — rather than to the specific technical features recited in the asserted claims. Moreover, the prior art record demonstrates that the trocar field was already moving toward the claimed designs before the asserted patents' priority dates, undermining any claim of long-felt but unmet need.
D. Prosecution History Estoppel and Narrowing Amendments
A detailed analysis of the prosecution histories of the three asserted patents was conducted by Christy Bauer and Peter Vassiliev of Calderwood & Harkness LLP, memorialized in a memorandum dated September 5, 2024. That analysis identified numerous narrowing amendments made by Apex's patent counsel during prosecution that are significant for two independent reasons.
First, the narrowing amendments create prosecution history estoppel that limits Apex's ability to rely on the doctrine of equivalents to capture the accused products. Under Festo Corp. v. Fenmore & Co., 535 U.S. 722 (2002), when a patentee narrows a claim during prosecution for a reason related to patentability, the patentee is presumptively estopped from arguing that the surrendered subject matter is captured by the doctrine of equivalents. The amendments identified in the prosecution histories of all three patents are directly related to patentability — they were made in response to prior art rejections — and they relate to the very claim elements at issue in the infringement analysis. This estoppel is particularly significant as to the PE-5000 and PE-15000 Series, where Apex's infringement case relies heavily on the doctrine of equivalents rather than literal infringement.
Second, several representations made by Apex's patent counsel to the USPTO during prosecution are inconsistent with the infringement contentions that Apex now advances in this litigation. For example, during prosecution of the '884 Patent, Apex's counsel represented to the examiner that the claimed "retractable blade deployment mechanism" was distinguishable from cam-driven and threaded blade systems because the claimed mechanism requires a specific spring-loaded, two-stage actuation sequence. Apex now argues that the PE-5000's cam-driven system and the PE-15000's threaded-sleeve system infringe the '884 Patent — a position that is directly at odds with the representations made to secure allowance of the claims. These inconsistencies not only support non-infringement but also bear on the credibility of Apex's infringement theories at trial.
E. Inequitable Conduct Defense
Solstice has asserted an inequitable conduct counterclaim based on material omissions during prosecution of the asserted patents. Inequitable conduct requires a showing that: (1) a person with a duty to disclose (such as the named inventor or patent counsel) failed to disclose material information to the USPTO; (2) the person made this omission with specific intent to deceive the USPTO; and (3) but for the omission, the claims would not have been allowed. Solstice acknowledges that inequitable conduct is a high bar — it must be proven by clear and convincing evidence, and the intent element requires a showing that deceptive intent was the single most reasonable inference. Brightmoor & Co., Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011) (en banc).
Nonetheless, the evidence obtained in discovery supports a meaningful inequitable conduct defense. Specifically, documents in Apex's production (Bates Nos. APEX-017832 through APEX-017856) include email correspondence between Dr. Raymond Szabo, the named inventor, and colleagues at Apex in which Dr. Szabo discusses several prior art references — including the Kramer Publication and a Veridian product brochure — in the context of the design of the patented inventions. These emails predate the filing of the patent applications and demonstrate that Dr. Szabo was personally aware of these references. Despite this awareness, neither the Kramer Publication nor the Veridian materials were disclosed to the USPTO in the Information Disclosure Statements ("IDS") filed during prosecution of any of the three asserted patents. Given that these references are highly material to patentability (as demonstrated by the anticipation and obviousness analyses discussed above), the failure to disclose them raises a genuine question of inequitable conduct.
While Solstice recognizes the difficulty of proving inequitable conduct, the defense serves an important strategic function. The existence of a credible inequitable conduct claim creates additional litigation risk for Apex because, if proven, inequitable conduct renders the affected patents entirely unenforceable — not merely invalid. This is a risk that Apex must weigh in assessing the settlement value of the case, and it provides meaningful leverage for Solstice in the mediation.
F. Overall Assessment of Invalidity
Solstice's invalidity defenses are strongest as to the '884 Patent, where the combination of anticipation and obviousness arguments presents a substantial probability of success. The invalidity case against the '237 Patent is moderate, supported by specific prior art references that anticipate the independent claims. The invalidity case against the '105 Patent is moderate, resting primarily on obviousness combinations.
Even if Solstice prevails on invalidity of only some asserted claims, the impact on the litigation is significant. Invalidity of the '884 Patent alone would eliminate the patent that is asserted against all three product lines, substantially reducing Apex's damages base. Invalidity of Claims 1 and 3 of the '237 Patent — the independent claims — would eliminate the '237 Patent from the case, further reducing exposure. The cumulative effect of Solstice's invalidity defenses is a material reduction in the expected damages liability, even on a partial-success basis.
VII. ANALYSIS OF APEX'S DAMAGES CLAIMS
A. Apex's Damages Theory
Apex's damages expert, Hugh Danaher, CFA, of Keystone Valuation Advisors LLC (Philadelphia, Pennsylvania), asserts in his February 14, 2025 expert report that Apex is entitled to $31.8 million in reasonable royalty damages. Mr. Danaher applies a Georgia-Pacific analysis (based on the fifteen-factor framework established in Georgia-Pacific Corp. v. United States Plywood Corp., 318 F. Supp. 1116 (S.D.N.Y. 1970)) to determine the royalty that would have been agreed upon in a hypothetical negotiation between a willing licensor and a willing licensee at the time infringement began.
Mr. Danaher uses the combined U.S. sales of all three PrecisionEdge™ product lines ($74.6 million) as the royalty base and applies a blended royalty rate of approximately 42.6% to arrive at his $31.8 million figure. His report attributes the entirety of the sales revenue of the accused products to the patented features and applies what Solstice submits is a grossly inflated royalty rate unsupported by the evidence.
B. Flaws in Apex's Damages Analysis
Solstice's damages expert, Dr. Marchetti, has identified multiple fundamental flaws in Mr. Danaher's analysis, each of which independently undermines the reliability of his $31.8 million figure:
1. Overstated Royalty Base — Failure to Apportion. Mr. Danaher fails to properly apportion the value of the accused products between the patented features and the substantial non-patented features that contribute to the commercial success of the PrecisionEdge™ line. The PrecisionEdge™ products are sophisticated surgical devices that incorporate numerous innovative features beyond the seal, blade, and insufflation technologies at issue — including proprietary ergonomic handle designs, advanced polymer housings, biocompatible coatings, and Solstice's proprietary TrueGrip™ retention technology. Under established Federal Circuit precedent, a damages methodology must apportion the royalty base to reflect only the value attributable to the patented features. VirnetX, Inc. v. Cisco Sys., Inc., 767 F.3d 1308 (Fed. Cir. 2014); Uniloc USA, Inc. v. Kestrel Partners LLC, 632 F.3d 1292 (Fed. Cir. 2011). Mr. Danaher's failure to apportion renders his royalty base unreliable and his $31.8 million figure grossly inflated.
2. Inapt Comparable Licenses. Mr. Danaher's comparable license analysis relies on licensing agreements from different technology fields and different market conditions. Specifically, his primary comparable licenses involve (a) an orthopedic implant licensing agreement between two companies that are not parties to this litigation, (b) a cardiovascular device cross-license with terms that bear no resemblance to the single-technology, patent-assertion posture of this case, and (c) a settlement agreement in an unrelated surgical device patent case in which the terms were driven by litigation-specific factors that have no application here. None of these purported comparables involve trocar technology, and none reflect the market dynamics of the laparoscopic access device field. The Federal Circuit has cautioned against the use of inapt comparables, and Mr. Danaher's reliance on such licenses is a significant methodological flaw. Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301 (Fed. Cir. 2009).
3. Selective Application of Georgia-Pacific Factors. Mr. Danaher's application of the Georgia-Pacific factors is one-sided. He emphasizes factors that support a high royalty rate — such as the commercial success of the accused products (Factor 8), the utility and advantages of the patented technology (Factor 9), and the nature of the patent owner's rights (Factor 12) — while giving short shrift to factors that would drive the royalty rate down. In particular, Mr. Danaher undervalues or ignores:
•  Georgia-Pacific Factor 6 (the effect of selling the patented specialty vs. the effect of promoting sales of other products of the licensee): The PrecisionEdge™ line has driven significant cross-selling of Solstice's other surgical instruments, and a license that prices out the PrecisionEdge™ trocars would have a cascading negative effect on Solstice's broader product portfolio — a factor that would depress the negotiated royalty.
•  Georgia-Pacific Factor 9 (the utility and advantages of the patent property over the old modes or devices): The prior art demonstrates that the patented features represent incremental improvements over existing designs, not breakthrough innovations, which limits the premium that a willing licensee would pay.
•  Georgia-Pacific Factor 10 (the nature of the patented invention and the benefits to those who have used the invention): Solstice's own engineering contributions — including the TrueGrip™ retention technology, the ergonomic handle design, and the polymer housing — are responsible for a substantial portion of the value of the accused products, and a willing licensee in the hypothetical negotiation would not agree to pay a royalty that attributes all of the product's value to the patented features.
•  Georgia-Pacific Factor 13 (the portion of the realizable profit that should be credited to the invention as distinguished from non-patented elements): This factor requires precisely the apportionment that Mr. Danaher fails to perform.
4. Improper Use of Gross Margin as a Royalty Proxy. Mr. Danaher repeatedly references the 61.3% weighted average gross margin on the accused products as support for his high royalty rate. However, the gross margin is not a reliable proxy for a reasonable royalty rate. Gross margin does not account for the substantial operating expenses — including sales and marketing, research and development, regulatory compliance, and general and administrative costs — that must be deducted to arrive at a meaningful measure of profitability. Moreover, the gross margin reflects the total value of the accused products, not the incremental value attributable to the patented features. Using gross margin as a royalty proxy is tantamount to the entire-market-value rule, which the Federal Circuit has repeatedly rejected. Ericsson, Inc. v. D-Link Sys., Inc., 773 F.3d 1201 (Fed. Cir. 2014).
C. Solstice's Damages Analysis
Dr. Elena Marchetti, Managing Director at Pinnacle Economics Group LLC, prepared Solstice's damages report, which was served on February 14, 2025. Dr. Marchetti is a Ph.D. economist with over twenty years of experience in intellectual property damages analysis, and she has testified as a damages expert in over forty patent infringement cases in federal courts across the country.
Dr. Marchetti conducts a proper Georgia-Pacific analysis, considering all fifteen factors and weighing them in light of the evidence developed in discovery. Her analysis differs from Mr. Danaher's in several critical respects:
•  Apportionment: Dr. Marchetti properly apportions the royalty base to reflect only the value attributable to the patented features, excluding the value contributed by Solstice's non-patented innovations and engineering contributions. She employs a feature-based apportionment methodology supported by conjoint analysis survey data and internal Solstice customer feedback data showing that surgeons value the PrecisionEdge™ line for a combination of features, of which the seal, blade, and insufflation technologies represent only a portion.
•  Prior Art and Design-Around Alternatives: Dr. Marchetti accounts for the strong prior art in the trocar field and the availability of non-infringing design-around alternatives, both of which would reduce the royalty in the hypothetical negotiation. The existence of viable alternatives means that Solstice could walk away from the hypothetical negotiation and redesign its products to avoid the patented features, which puts a ceiling on the royalty that a rational licensee would agree to pay.
•  Comparable Licenses: Dr. Marchetti identifies and analyzes truly comparable license agreements in the laparoscopic surgical device field, including arm's-length licenses negotiated between competitors for trocar-related technology. These comparables support a royalty rate substantially lower than Mr. Danaher's figure.
•  Balanced Georgia-Pacific Analysis: Dr. Marchetti gives appropriate weight to all fifteen Georgia-Pacific factors, including those that favor a low royalty rate, and provides a transparent and well-reasoned analysis of each factor.
Based on her comprehensive analysis, Dr. Marchetti concludes that a reasonable royalty for past infringement — assuming infringement is found on all three product lines (which Solstice contests) — would be in the range of $3–5 million. This figure is approximately one-sixth to one-tenth of Apex's $31.8 million claim, reflecting the substantial methodological differences between the two experts' approaches.
D. Impact of Non-Infringement and Invalidity on Damages
The damages analysis must also account for the impact of Solstice's non-infringement and invalidity defenses. If Solstice prevails on non-infringement as to the PE-5000 Series — which, as discussed in Section V.B above, is a strong likelihood — all sales attributable to the PE-5000 product line would be excluded from the damages calculation entirely. The PE-5000 Series accounts for a meaningful proportion of the $74.6 million in total accused sales, particularly in the earlier years when the 5 mm trocar was the first PrecisionEdge™ product to gain market traction.
Similarly, invalidity of even a subset of the asserted claims would further reduce both the royalty base and the applicable royalty rate. If the '884 Patent is found invalid — the patent for which Solstice's invalidity case is strongest — the royalty base would be reduced by excluding the product-patent combinations that rely solely on the '884 Patent (the PE-5000 and PE-15000 Series are accused of infringing the '884 Patent without also infringing both of the other patents). The royalty rate would also be reduced, as the hypothetical negotiation would reflect the weakened patent position.
The Court's favorable claim constructions further narrow the scope of potentially infringing conduct and correspondingly narrow the damages. Even under Apex's best-case scenario, the damages recoverable at trial would be significantly less than the $31.8 million figure advanced by Mr. Danaher.
VIII. LITIGATION RISK ASSESSMENT
Solstice's litigation team has conducted a comprehensive risk assessment based on the current state of the evidence, the Claim Construction Order, the expert reports, and the overall trajectory of the case. This assessment is intended to inform the mediator's understanding of the case's settlement value and to demonstrate that Solstice's settlement position is grounded in a realistic evaluation of the risks and rewards of continued litigation.
A. Solstice's Strengths
Solstice enters the mediation from a position of substantial strength, built upon the following pillars:
1.  Favorable Claim Constructions. Five of nine disputed claim terms were construed in Solstice's favor, including the two most important terms — "locking seal assembly" and "retractable blade deployment mechanism." These constructions narrow Apex's infringement case and strengthen Solstice's defenses.
2.  Strong Non-Infringement Position on the PE-5000 Series. The PE-5000 Series is a strong candidate for summary judgment of non-infringement, which would eliminate a significant portion of the accused sales from the case.
3.  Solid Invalidity Defenses. Solstice's invalidity case is particularly strong against the '884 Patent, with credible anticipation and obviousness arguments supported by detailed prior art analysis and expert testimony. Even partial success on invalidity would materially reduce Apex's damages.
4.  Prosecution History Estoppel. The narrowing amendments made during prosecution of all three patents limit Apex's ability to rely on the doctrine of equivalents to capture the accused products, particularly as to the PE-5000 and PE-15000 Series.
5.  Flawed Damages Case. Apex's $31.8 million damages claim is methodologically flawed and unsupported by reliable evidence. Solstice's damages rebuttal, prepared by Dr. Marchetti, is persuasive and demonstrates that the reasonable royalty is a fraction of what Apex claims.
6.  Inequitable Conduct Defense. While inequitable conduct is a high bar, the evidence discovered to date is sufficient to pose a meaningful risk to Apex and to provide leverage in settlement discussions. The risk of unenforceability is a factor that Apex must weigh in assessing its own litigation exposure.
B. Solstice's Risks
Despite its strengths, Solstice is realistic about the risks inherent in continued litigation:
1.  PE-12000 Series Infringement Risk. The PE-12000 Series presents the closest infringement question. If the case proceeds to trial, there is a meaningful risk that a jury could find infringement as to the PE-12000, particularly given the four claim constructions that favor Apex and the structural similarities between the PE-12000 and the patented designs.
2.  Claim Constructions Favoring Apex. While the majority of claim constructions favor Solstice, the four constructions that favor Apex provide a foundation for Apex's infringement arguments on certain product lines and certain claim elements.
3.  Inherent Unpredictability of Patent Jury Trials. Patent litigation is inherently unpredictable, and jury verdicts in patent cases can be difficult to control. Jurors may struggle with the technical complexity of the issues, and there is always a risk that a jury will be persuaded by Apex's narrative of a competitor copying its patented innovations.
4.  Potential for Meaningful Damages. Even a partial adverse verdict could result in meaningful damages given the 61.3% gross margin on the accused products and the growing trajectory of PrecisionEdge™ sales. If a jury accepts even a portion of Mr. Danaher's inflated damages theory, the res