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Note 18 - Legal Proceedings
6 Months Ended
Jun. 30, 2012
Legal Matters and Contingencies [Text Block]
NOTE R - LEGAL PROCEEDINGS

On September 8, 2011, the United States Patent and Trademark Office (“USPTO”) granted a request for inter partes reexamination of the Fortical Patent filed by Apotex on July 15, 2011. In granting the Request for Reexamination, the USPTO gave Unigene a two month time period to respond to the substantial new questions of patentability raised in the Reexamination Office Action dated September 8, 2011. Unigene filed its response to the Reexamination Office Action on November 8, 2011. Apotex filed Third Party Comments on December 7, 2011 and January 9, 2012. Unigene is waiting to hear from the USPTO, which may take over one year. Because the Supreme Court denied Apotex’s petition for certiorari, on April 5, 2012, Unigene moved to Suspend Reexamination of Claim 19 by filing a Petition with the USPTO. On April 19, 2012, Apotex filed a Response to Unigene’s Petition with the USPTO, asking the USPTO to deny Unigene’s Petition. Unigene is waiting to hear from the USPTO, which may take over one year.  The Reexamination reopens the USPTO prosecution of all claims 13, 14, 16, 17, 19 and 24-29 of the Fortical Patent. Based on USPTO statistics, reexamination proceedings take an average of about 36 months to complete. Potential outcomes for reexamination include the patent emerges with the patent claims remaining unchanged, patent claims being amended, or all patent claims being canceled. There is the usual USPTO prosecution risk that we will not be successful in the reexamination and potentially subsequent USPTO or litigation proceedings. In the event that we do not prevail, then Apotex could be in a position to market its nasal calcitonin product if and when its pending ANDA receives FDA approval. This could have a material adverse impact on our results and financial position.

On May 18, 2012 the Company’s former patent counsel, Ostrolenk Faber LLP, filed suit against it in the United States District Court for the Southern District of New York for unpaid legal fees and disbursements in an amount not less than $402,388.66 plus interest and attorneys fees.  The Company has filed a motion to dismiss the suit and is awaiting a ruling on the Motion.  If the Motion is not granted in full, the Company has notified Ostrolenk Faber that it will respond to the suit with counterclaims that assert amongst other things claims for legal malpractice and a breach of fiduciary duty.  The Company contends that Ostrolenk Faber’s actions and/or inactions caused the loss of the Company’s intellectual property in Brazil.