Item 1. Legal Proceedings
ITEM 1. LEGAL PROCEEDINGS
On
April 2, 2019, we filed a lawsuit against Clarus in the United States District Court for the District of Delaware alleging
that Clarus’s JATENZO® product infringes six of Lipocine’s issued U.S. patents: 9,034,858; 9,205,057; 9,480,690; 9,757,390;
6,569,463; and 6,923,988. However on February 11, 2020, we voluntarily dismissed allegations of patent infringement for expired U.S.
Patent Nos. 6,569,463 and 6,923,988 in an effort to streamline the issues and associated costs for dispute. Clarus has answered the complaint
and asserted counterclaims of non-infringement and invalidity. We answered Clarus’s counterclaims on April 29, 2019.
The Court held a scheduling conference on August 15, 2019, a claim construction hearing on February 11, 2020 and a summary judgment
hearing on January 15, 2021. Originally the United States District Court for the District of Delaware had scheduled a five-day jury
trial to begin on February 8, 2021, however, on December 28, 2020, the District Court postponed the jury trial due to the ongoing
effects of the COVID-19 pandemic. The jury trial will be rescheduled once it becomes clear when jury trials will resume in the District
of Delaware.
On November 14, 2019, we and certain of our
officers were named as defendants in a purported shareholder class action lawsuit, Solomon Abady v. Lipocine Inc. et al ., 2:19-cv-00906-PMW,
filed in the United District Court for the District of Utah. The complaint alleges that the defendants made false and/or misleading statements
and/or failed to disclose that our filing of the NDA for TLANDO to the FDA contained deficiencies and as a result the defendants’
statements about our business and operations were false and misleading and/or lacked a reasonable basis in violation of federal securities
laws. The lawsuit seeks certification as a class action (for a purported class of purchasers of the Company’s securities from March 27,
2019 through November 8, 2019), compensatory damages in an unspecified amount, and unspecified equitable or injunctive relief. We
have insurance that covers claims of this nature. The retention amount payable by us under our policy is $1.25 million. We filed a motion
to dismiss this class action lawsuit on July 24, 2020. In response, the plaintiffs filed their response to the motion to dismiss
the class action lawsuit on September 22, 2020 and we filed our reply to our motion to dismiss on October 22, 2020. We intend
to vigorously defend ourselves against these allegations and have not recorded a liability related to this shareholder class action lawsuit
as the outcome is not probable nor can an estimate be made of loss, if any.
On March 13, 2020, we filed U.S. patent application serial number
16/818,779 (“the Lipocine ‘779 Application”) with the United States Patent and Trademark Office (“USPTO”).
On October 16 and November 3, 2020, we filed suggestions for interference with the USPTO requesting that a patent interference
be declared between the Lipocine ‘779 Application and US patent application serial number 16/656,178 to Clarus Therapeutics, Inc.
(“the Clarus ‘178 Application”). Pursuant to our request, the Patent Trial and Appeal Board (“PTAB”)
at the USPTO declared the interference on January 4, 2021 to ultimately determine, as between us and Clarus, who is entitled to the
claimed subject matter. The interference number is 106,128, and we were initially declared Senior Party. A conference call
with the PTAB was held on January 25, 2021 to discuss proposed motions. On February 1, 2021, the PTAB issued an order
authorizing certain motions and setting the schedule for the preliminary motions phase. Briefing is presently ongoing.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.