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Commitments and Contingencies
9 Months Ended
Sep. 30, 2021
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies

8. Commitments and Contingencies

Operating lease

The future minimum rental obligations required under non-cancellable lease at September 30, 2021 are as follows (in thousands):

 

2021 (remaining three months)

$

 

218

 

2022

 

 

846

 

2023

 

 

358

 

Total minimum lease payments

$

 

1,422

 

Total rent expense was approximately $0.2 million, for each of the three months ended September 30, 2021 and 2020.

Total rent expense was approximately $0.3 million and $1.0 million, for the nine months ended September 30, 2021 and 2020, respectively.

Indemnification

The Company enters into indemnification provisions under its agreements with other companies in the ordinary course of business, including business partners and contractors. Pursuant to these arrangements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party as a result of the Company’s activities. The terms of these indemnification agreements are generally perpetual. The maximum potential amount of future payments the Company could be required to make under these agreements is not determinable. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes the estimated fair value of these agreements is minimal. The Company maintains commercial general liability insurance and products liability insurance to offset certain of its potential liabilities under these indemnification provisions.

Litigation

The Company regularly evaluates its exposure to threatened or pending litigation and other business contingencies. Because of the uncertainties related to the amount of loss from litigation and other business contingencies, the recording of losses relating to such exposures requires significant judgment about the potential range of outcomes. As additional information about current or future litigation or other contingencies becomes available, the Company will assess whether such information warrants the recording of additional expense.

In November 2015, Hologic, Inc. and Cytyc Surgical Products, LLC (collectively Hologic) filed a complaint against the Company alleging infringement of four patents (complaints against two of four infringement of patents later were dropped by Hologic). On July 27, 2018, a Delaware jury returned a verdict finding the Company did not willfully infringe on the patents and awarded Hologic $4.8 million in damages for lost profits and for royalties not included in the lost profits. Based on the result of the trial in July 2018 with Hologic, the Company recorded an accrual for potential legal losses of $4.8 million as of December 31, 2017 with a corresponding expense within general and administrative expenses. After the completion of post-trial motions and after the final orders from the courts, in July 2019, the Company filed a motion of appeal with the U.S. District Court for the District of Delaware. At the time of filing the appeal, the updated damages calculation totaled $7.1 million and the related cash balance was restricted from withdrawal. A surety bond was generated and filed along with the appeal documents and included in restricted cash in the balance sheet. The additional damages were accrued for as of December 31, 2018. On April 22, 2020, the Court of Appeals for the Federal Circuit affirmed the verdict of the $7.1 million in total damages. In September 2020 the Company filed a petition with the U.S. Supreme Court on the matter of verdict of the legal case. The Company’s petition was heard in late April 2021 and an opinion was issued in June 2021 (see below).

On July 8, 2020, Hologic sued the Company for willful infringement of the Hologic patent in the U.S. District Court for the District of Delaware, alleging that the new Minerva ES Handpiece infringed the now expired patent. The Company has answered, denying infringement and willfulness and alleges that the patent was invalid prior to expiry. Due to COVID-19, the case was stayed twice for 60 days. On January 22, 2021, Minerva filed a motion to stay this case until such time that the U.S. Supreme Court decides the matter to be heard in April, 2021 (see above). The court’s response to the Company’s motion to stay was granted. On June 29, 2021, the U.S. Supreme Court vacated and remanded the Federal Circuit’s decision that the Company cannot challenge the validity of the ‘348 patent due to assignor estoppel. A decision from the Federal Circuit on remand as to the invalidity of the ‘348 patent is expected to take a few months.

In April 2017, the Company sued Hologic for willful infringement of a Company patent in the U.S. District Court for the Northern District of California. Hologic has answered, denying infringement and willfulness and alleging invalidity of the patent. The Company sought a preliminary injunction and that motion was denied. This matter was transferred to the U.S. District Court for the District of Delaware, where it has been assigned to the same judge presiding over the Hologic complaint. Due to COVID-19, the July 2020 trial date was delayed. On July 20, 2021, the district court granted Hologic’s Daubert motion excluding certain expert opinions regarding infringement. On July 23, 2021, the district court found on summary judgment that Minerva’s ‘208 patent is invalid, dismissed the case and entered judgment. On August 24, 2021, the Company filed a Notice of Appeal with the Court of Appeals for the Federal Circuit.