This is interesting in trying to identify a reasonable floor for the stock price should there be no settlement in the short term. If the settlement is indeed delayed for 12 months, do you have an opinion on the degree to which the stock will drift lower?
Out of curiosity I looked at the docket sheet from the last Retractable/BD antitrust case. Trial in that case was scheduled for July 6, 2004. On July 2, 2004, the parties notified the court of a settlement. However, as late as July 1, 2004, the parties were filing substantive trial related motions. In other words, even though the parties most likely reached a settlement in late June, they continued to file motions and litigate the case up until the day before officially dismissing the case.
I noticed that today RVP filed its motion for attorney fees. You may recall RVP originally asked for $36M, but this amount was reduced by the court for various reasons by about 50%. By way of this new motion one would expect the final award to be increased by about $15M to $20M.
Agreed that the extra time is helpful. Bear in mind that even after reaching an agreement in principle it would take at least a week or two to draft and negotiate the exact terms of the written settlement agreement. The most likely times to settle are before any decision by the appellate court on a motion to stay the injunction and (if the case continues) around the time for oral argument before the Fifth circuit.
The district court a few minutes ago extended the due date for complying with the injunction by 30 days to Feb 14. This implies to me that it will likely soon deny the stay motion pending appeal. Generally positive for RVP in that it gives the parties a few more days to work out a settlement and probably delays the filing of a BD stay motion before the Fifth Circuit.
Not at all. Even if a settlement was complete and the agreement being drafted BD would still file the various motions to stay. By filing the motions BD at least has a back up plan in case settlement discussions are not successful. Moreover, the only leverage BD can bring to any settlement discussion is the possibility of getting the injunction stayed and pursuing the appeal over the next 12 months. However, it is still quite risky for BD to allow the appellate court to decide a stay motion without settling, since if it loses the motion the little bit of leverage it has will evaporate.
BD understands the district court will likely deny its motion to stay. Therefore, it Is anxious to get its motion before the appellate court. Generally speaking, it must wait for the district court to deny the motion before moving before the appellate court. To expedite its appeal it wants a district court decision as soon as possible.
I agree the opposition is extremely well argued. Perhaps most telling is the supporting declaration, which gives numerous concrete examples where the false statements continue to exist on numerous distributor web sites and (incredibly) on BD's own web site. This combined with citation to a recent study that highlights the continuing danger to the public of needle sticks makes a strong case as to why immediate implementation of the injunction is critical to public safety issues.
The brief does note that the "injunction is proper under both the antitrust laws and the Lanham Act." This point will likely be more interesting at the appellate level, since in opposing an emergency motion for stay it will be straightforward to argue BD has little chance on appeal of avoiding a Lanham Act injunction. RVP need not even rely on the more complicated antitrust claim.
My favorite (though admittedly non-substantive) lines are : "Against a backdrop of admitted lies, and harm to public interests, BD is left to make the remarkable argument that it will be irreparably harmed by the truth" and "Where, as here, the purpose of the injunction is simply to get truthful information to the public, the public harm factor should be paramount. Veritas nihil veretur nisi abscondi - Truth fears nothing but to be hidden."
I believe it is more likely than not that at both the district court and appellate levels any motion to stay the injunction will be denied.
RVP's opposition to BD's request for a stay of the injunction pending appeal is due today. Very curious to see the extent to which RVP relies on the Lanham act claim as an independent basis for maintaining the injunction. Still expect little to happen until after the settlement conference. Of course, if the court truly wants to pressure BD it could deny the 2 pending motions before Friday.
RVP filed an opposition to BD's motion to move up the due date for RVP's opposition to the motion to stay pending appeal. RVP argues its opposition brief should remain due on the usual date of Dec 22. More interestingly, RVP's brief reveals that a mediation will occur on Dec 19.
The skirmishes of the past few days at least in part are attempts by BD to somewhat strengthen its bargaining position going into that mediation. In effect there are 3 parties preparing for the Dec 19 date. RVP wants to maintain the Jan 15 deadline to frighten BD, BD wants to delay or extend that deadline to lessen the pressure it feels at the mediation and the court with respect to the pending motions wants to do what will make a settlement most likely. Therefore, there is a good chance the court does not touch the Jan 15 deadline before the mediation takes place. As such, there is a reasonable chance this gets resolved next week.
If the parties do not reach a settlement but are close they may jointly ask the court to extend the Jan 15 deadline.
The order quoted from is merely BD's proposed Order. It has not been read or accepted by the court. Having said that I expect the court will direct RVP to respond on an expedited basis.
I do not interpret anything BD has done as pulling out all the stops. This is an expected and ordinary procedural path for it to follow. Making this motion before the district court is a prerequisite required by Rule 8 of the Federal Rules of Appellate Procedure.
BD is apparently sufficiently nervous that it has today (along with the notice of appeal) filed a motion with the district court seeking to stay the injunction pending conclusion of an appeal. The supporting papers and argument seem halfhearted. A surprisingly weak motion, except that BD likely realizes there is little chance the district court grants their stay motion. BD will argue more aggressively to the Fifth Circuit assuming the deadline gets closer and no settlement has been reached.
Things may now happen quickly. The motions will most likely be decided over the course of the next few weeks. In the meanwhile settlement discussions are likely at an interesting point. Investors need to decide how likely is it that the injunction will be stayed before a settlement is reached. Personally I have decided the upside benefit far outweighs the downside risk and am no longer trading in and out of the stock.
In determining whether to grant a stay pending appeal the appellate court looks at four factors, including whether the applicant has made a strong showing that he is likely to succeed on the merits. Given the Lanham act claim and the antitrust claim are independent basis for supporting the injunction, Retractable has strong arguments against a stay. Also, if my memory is correct, the district court indicated that the warning required by the injunction helps to protect the public and as such this also speaks against a stay. If the motion for an extension is denied I expect BD will move both the district court and appellate court for a stay.
True patent cases or any case substantially involving a question of patent law must be appealed to the U.S. Court of Appeals for the Federal Circuit and not the regional circuit courts. Given patent law was only tangentially involved the Fifth Circuit is likely the correct appellate court.
As expected BD today filed a pro forma notice of appeal with the Fifth Circuit. Not of any immediate significance. Still waiting to see if the 2 month extension is granted by the district court. If denied BD will have no choice but to file an emergency motion with the Fifth Circuit. I expect BD would want to settle before any such motion is decided. The pending motion would be a little bit of leverage to counter Retractable's very strong position.
As an aside, given the underlying antitrust claim at least in part is based upon BD's patent infringement arguably the Federal Circuit has jurisdiction rather than the Fifth Circuit.
Somewhat surprised the court has not yet ruled on BD's motion for an extension. I assume this means RVP has at least on a conditional basis opposed the motion. Possibly RVP has argued that the delay should only be granted if BD agrees to forgo a second motion (before the district court or Federal Circuit) seeking to stay enforcement of the injunction pending conclusion of any appeal.
The injunction was ordered on Nov 10. Normal procedure would call for BD to move the district court to stay the injunction pending appeal. If denied there would then be a 30 day window within which to make the same motion to the appellate court. Under extenuating circumstances one can directly petition the appellate court within 30 days of the original order. Anyway, I assume BD considers the pending motion sufficient to avoid triggering the 30 day clock controlling a direct motion to the appellate court. Otherwise, BD might feel compelled to file a motion to stay with the appellate court before next Wednesday. This is true whether they expect to settle shortly or not. One always wants to keep all options open.
I already own a fair amount, but will likely buy more RVP on dips.
I expect this week the Court will extend the Jan 15 injunction deadline to March 16, as requested by BD. I also expect a settlement between now and the March date. I wonder though if the stock price will drift lower once the expected order issues. Are the new buyers expecting a resolution in the next week or two or do they understand it may more likely be a month or two? Curious what others think. Afraid the new buyers may be disappointed in the 2 month extension.
BD seeking extension of 60 days for complying with Jan 15 injunction, because "[o]nce the Court ordered notifications have begun to be dispatched and displayed on the Internet, neither the Court nor the parties can "un-ring" that bell, even if RTI and BD are successful in reaching a confidential settlement and agree that the case should be dismissed . . . [and] the possibility of a compromise involving the terms of the injunction will be foreclosed merely by the passage of time." Also, "[d]elaying the date for compliance allows for negotiations covering a broad range of potential solutions to end this case." Emergency Motion at pages 2 to 3.
Seems BD very much wants to settle and avoid injunction. I had assumed price would trend lower over next few weeks given nothing would likely happen until Jan 15 date approached. However, I now feel a settlement coul come sooner than later and in any case will almost certainly happen and therefore added to my position today.
I expect BDX will very much want to avoid the terms of the upcoming Jan 15 injunction. BDX will first on an emergency basis try to have the district court and then the Federal Circuit stay the injunction pending any appeal. If those requests are denied, I expect BDX will settle prior to Jan 15 in order to avoid the embarrassment of notifying its customers (i.e. the hospitals) of its improper behavior.
If the injunction is stayed BDX may pursue the appeal. Given the Court Order speaks in terms of the harm caused by BDX to the public and of a safety hazard, I expect any motion to stay the injunction will be denied. Look for BDX to settle for around $300M in the next few weeks.
One potential hiccup is if the district court refuses to allow a settlement predicated upon the injunction being set aside. The Court may believe it necessary to notify the public for safety reasons regardless of any settlement. This would undercut BDX's reason for settling. Still believe it works out and RVP gets the money near the end of the year.