Commitments and Contingencies

6 Months Ended

Jun. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES

In February 2011, Michael Strathmann served a Complaint for Violation of the Insurance Fraud Prevention Act (California Insurance Code Section 1871.7) against Acacia, CombiMatrix Corporation, and Dr. Amit Kumar in the Superior Court of the State of California in connection with a prior lawsuit against Nanogen, Inc., that was settled. On September 22, 2011, the Superior Court entered a judgment in favor of Acacia, CombiMatrix Corporation, and Dr. Amit Kumar, dismissed the Complaint and awarded the parties attorneys' fees and costs. Mr. Strathmann filed an appeal of the judgment with the Court of Appeals for the State of California, and filed an undertaking on appeal on November 21, 2011. On October 24, 2012, the Appellate Court reversed the Superior Court's decision, permitted Mr. Strathmann to file an Amended Complaint, and remanded the matter back to the Superior Court for further proceedings. Discovery commenced in this matter, and a Motion for Summary Judgment requesting that judgment be entered in our favor was heard and denied on April 30, 2014. The trial commenced in June 2014 in the Orange County Superior Court and is expected to continue into August 2014. Acacia believes that there is no merit to Mr. Strathmann's claims and will continue to vigorously defend against them.  However, there can be no assurance that Acacia will ultimately be successful in this matter.  Acacia believes that the results of the above noted litigation will not have a material adverse effect on Acacia’s financial condition, results of operations or liquidity.

Patent Enforcement and Other Litigation

Acacia is subject to claims, counterclaims and legal actions that arise in the ordinary course of business.  Management believes that the ultimate liability with respect to these claims and legal actions, if any, will not have a material effect on Acacia’s consolidated financial position, results of operations or cash flows.  

Certain of Acacia’s operating subsidiaries are often required to engage in litigation to enforce their patents and patent rights.  In connection with any of Acacia’s operating subsidiaries’ patent enforcement actions, it is possible that a defendant may request and/or a court may rule that an operating subsidiary has violated statutory authority, regulatory authority, federal rules, local court rules, or governing standards relating to the substantive or procedural aspects of such enforcement actions.  In such event, a court may issue monetary sanctions against Acacia or its operating subsidiaries or award attorney’s fees and/or expenses to a defendant(s), which could be material.