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Item 3. Legal Proceedings

2022-02-24 compared with 2021-02-24 · 11 added, 40 removed, 45 unchanged (53% of the section changed)

LEGAL PROCEEDINGS

Intellectual property lawsuit

On November 21, 2019, Breathe Technologies, Inc.

(Breathe), a subsidiary of Hill-Rom Holdings, filed a lawsuit against Inogen, Inc., New Aera, Inc., Silverbow Development, LLC, and Todd W.

Allum in the United States District Court for the Northern District of California (N.D.

Breathe alleged:

willful infringement of the ‘250 patent assigned to Breathe;

that inventorship was incorrectly assigned and that Breathe owns rights to certain patents filed by New Aera, Inc.

and Silverbow Development LLC;

breach of contract;

inducing breach of contract;

interference with contract;

and violation of California Business and Professional Code Section 17200.

The complaint seeks to correct inventorship of certain patents now owned by the Company, injunctive relief, compensatory and punitory damages in an unspecified amount including trebling of all damages awarded with respect to infringement of the ‘250 patent, costs and expenses, including attorneys’ fees and expert fees, prejudgment and post-judgment interest and such other relief as the court deems proper.

On March 31, 2020, Breathe filed a First Amended Complaint in which it dropped the patent infringement claims in the N.D.

Lawsuit and added another claim for violation of California Business and Professional Code Section 17200.

On the same day, Breathe re-filed the ‘250 patent infringement claims in the United States District Court for the Central District of California (C.D.

On August 17, 2020, the court in the N.D.

Lawsuit ordered that Breathe’s claims be arbitrated, with the sole exception of the correction of inventorship claim, which the court ordered be stayed pending completion of the arbitration on the other claims.

On September 4, 2020, Breathe filed a demand for arbitration with the American Arbitration Association, in which Breathe reiterated the claims it filed in the N.D.

On January 20, 2021, the Company entered into a comprehensive settlement agreement with Breathe, which has resolved all disputes in the two lawsuits and the arbitration filed by Breathe.

As a result of the settlement agreement, the lawsuits and arbitration have been dismissed.

The Company recorded a contingent liability for $8.0 million during the twelve months ended December 31, 2020.

The related payable was recorded in accounts payable and accrued expenses and receivable from the New Aera acquisition escrow account in prepaid expenses and other current assets as of December 31, 2020.

Securities class action and derivative lawsuits

7 unchanged sentences

(i) Inogen had overstated the true size of the total addressable market for its portable oxygen concentrators and had misstated the basis for its calculation of the total addressable market;

(ii) Inogen had falsely attributed its sales growth to the strong sales acumen of its salesforce, rather than to deceptive sales practices;

(ii) Inogen had falsely attributed its sales growth to the strong sales acumen of its sales force, rather than to deceptive sales practices;

(iii) the growth in Inogen’s domestic business-to-business sales to home medical equipment providers was inflated, unsustainable and was eroding direct-to-consumer sales;

6 unchanged sentences

The Company filed its motion to dismiss on October 28, 2020.

that motion is currently pending.

The Company intends to vigorously defend itself against these allegations.

On August 13, 2021, the court granted Defendants’ motion to dismiss, and on September 27, 2021, the court entered judgment dismissing the action in its entirety.

On June 26, 2019, plaintiff Twana Brown filed a shareholder derivative lawsuit against Inogen, Scott Wilkinson, Alison Bauerlein, Benjamin Anderson-Ray, Scott Beardsley, R.

Scott Greer, Raymond Huggenberger, Heath Lukatch, Loren McFarland, and Heather Rider in the United States District Court for the Central District of California.

The complaint purports to bring claims on behalf of Inogen against the individual defendants for breaches of their fiduciary duties as directors and/or officers of Inogen, unjust

enrichment, waste of corporate assets and violations of section 14(a) of the Securities Exchange Act of 1934, as amended.

The complaint purports to bring claims on behalf of Inogen against the individual defendants for breaches of their fiduciary duties as directors and/or officers of Inogen, unjust enrichment, waste of corporate assets and violations of section 14(a) of the Securities Exchange Act of 1934, as amended.

The complaint generally alleges similar claims to the securities class action.

7 unchanged sentences

2:19-cv-5568-FMO-AGR and ordered that the consolidated action be stayed pending the resolution of the motion to dismiss stage in In re Inogen, Inc., Sec.

On November 10, 2021, the plaintiffs filed a Notice of Voluntary Dismissal Without Prejudice.

On February 8, 2022, the court dismissed the California derivative action without prejudice.

On September 13, 2019, plaintiff Dustin Weller filed a shareholder derivative lawsuit against Inogen, Scott Wilkinson, Alison Bauerlein, Benjamin Anderson-Ray, Scott Beardsley, R.

10 unchanged sentences

S’holder Deriv.

Litig., Lead Case No.

, Lead Case No.

1:19-cv-01723-MN-JLH.

On July 8, 2020, the court ordered that the consolidated action be stayed pending the resolution of the motion to dismiss in the securities class action, In re Inogen, Inc., Sec.

Department of Health and Human Services and the Centers for Medicare and Medicaid Services lawsuit

On September 21, 2020, the Company filed a lawsuit against defendants, Alex M.

Azar, Secretary of the Department of Health and Human Services (HHS), in his official capacity, Seema Verma, Administrator of the Centers for Medicare and Medicaid Services (CMS), in her official capacity and Palmetto GBA, LLC.

The lawsuit seeks to invalidate the defendants’ arbitrary and capricious decision to retract a valid HCPCS code to Inogen’s TAV, thereby eliminating reimbursements for the ventilator, in violation of the Administrative Procedures Act (5 U.S.C.

§§ 551 , et seq.

Further, CMS’s failure to provide notice and the opportunity to comment on a change in HCPCS code verification for the Sidekick TAV and similar devices constitutes a violation of the procedural right provided under the Social Security Act (42 U.S.C.

§§ 1395hh(a)(2)), and Inogen’s due process rights.

On November 3, 2021, the court approved the parties’ stipulation to voluntarily dismiss the Delaware derivative action without prejudice.

Other litigation

In the normal course of business , we are from time-to-time involved in various legal proceedings or potential legal proceedings, including matters involving employment, product liability and intellectual property.

We carry insurance, subject to specified deductibles under our policies, to protect against losses from certain liabilities and costs.

At this time, we do not anticipate that any of these proceedings arising in the normal course of business will have a material adverse effect on our business.

Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

In addition to the lawsuits discussed above, the Company is party to various legal proceedings arising in the normal course of business.

The Company carries insurance, subject to specified deductibles under the policies, to protect against losses from certain types of legal claims.

At this time, the Company does not anticipate that any of these other proceedings arising in the normal course of business will have a material adverse effect on the Company’s business.

Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors.

MINE SAFETY DISCLOSURES

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 3. Legal Proceedings