Decision Diagnostics Corp. (OTC Pink: DECN) is engaged as a manufacturer and distributor of medical device for diabetes strips. Shares of the medical device manufacturer are rallying 13.49%, through early trading on Friday, November 3, 2017. Over the past month, Decision Diagnostics Corp. has seen average daily volume of 738,841 shares. However, volume of 218,482 shares or dollar volume of $26,654, has already exchanged hands on the day.

Shares of Decision Diagnostics Corp. are gaining today, after the company announced an update on its legal proceedings against Johnson & Johnson (NYSE: JNJ). The legal proceeding stem from JNJ’s 2011 attempt to get rid of the company’s GenUltimate! The company says they believe they will be able to beat the company and at least have a chance to win in appeals court. Here is the full press release detailing of the legal proceedings:

Decision Diagnostics Corp. Press Release:

LOS ANGELES, CA / ACCESSWIRE / November 1, 2017 / Decision Diagnostics Corp. (OTC PINK: DECN) is the manufacturer, quality plan administrator, FDA registered medical device support organization, and exclusive worldwide sales and regulatory process agent for the GenUltimate!™ (our “Sunshine”) diabetes test strip and now the internationally launched GenSure!™ (the “Feather”) strip and the final development of GenChoice!™ (the “Ladybug”) and GenPrecis!™ (the “Dragonfly”) test strip and meter. DECN discusses the status and probable outcomes in the pending November 17, 2017 court hearing in its litigation against Johnson & Johnson and several of their operating divisions (“J&J”).

History

J&J attacked the Company in 2011 in an obvious attempt to remove the company’s feature-rich and significantly less expensive GenUltimate!™ product from the competitive landscape. The Company prevailed in the suit involving three separate patents filed by J&J and subsequently filed its own lawsuit in March 2016 in a different legal venue than the California 9th circuit.

In March 2016, DECN, through its technology subsidiaries, filed suit in the Nevada District Court against J&J for infringement of two patents owned by DECN subsidiaries. In March 2017 the trial judge in the Nevada court granted DECN the ability to amend their patent infringement claims, using the influential Doctrine of Equivalents (“DOE”). DOE is the adjustable crescent wrench tool used in certain types of patent infringement cases. The scheduled hearing on November 17, 2017 will determine the course of the litigation.

Potential Outcomes

Although there are many combinations of potential outcomes, the Company has chosen three that are most likely, presented in order of likelihood and preference.

1) The Company may win at the November 17 hearing, where the outcome is a judge’s ruling that is structured to identify the overall weakness in J&J’s defense, thereby signaling to both parties that continuing litigation to its conclusion would add or subtract very little, and DECN’s use of the Doctrine of Equivalents would greatly raise the value of the case for DECN. This type of court ruling would offer a quick path to mediation and settlement which would positively and immediately impact the company’s market cap.

2) The company may win at the hearing on November 17 but the judge’s written ruling could suggest that the case, while moving directly in DECN’s favor (two J&J motions denied), is not yet crystal clear and more discovery will be required. This outcome would force an internal evaluation of the distraction of continued litigation following shortly after the recent conclusion of seven long and costly years of legal battle. Consideration might be given to entertaining offers of a global settlement to litigation. While this could represent a very positive outcome for DECN (with the company in control of a 3-0 record against J&J), the BOD does not believe this to be the most fertile channel.

3) J&J filed for the Summary Judgement ruling and they could temporarily prevail. The Company believes, however, that the case is sufficiently compelling that it prevails on the J&J Motion outright. If the unlikely occurs, the Company feels strongly that it can have the ruling overturned on appeal in the U.S. Court of Appeals for the Federal Circuit in Washington DC; the higher court venue where the Company twice previously prevailed against J&J.

Keith Berman, CEO, commented, “We are quite confident in our current legal position and believe that the recent exchange of pleadings has convinced the judge of the legitimacy of our action. We strongly believe that the judge’s ruling will clearly identify the inherent weakness in J&J’s defense. We look forward to wrapping up lawsuits and focusing on core business activities especially with our panacea product GenPrecis!™ only several months away.”

DECN has become a leading manufacturer and worldwide distributor of diabetic test strips engineered to operate on legacy glucose meters. DECN’s products are designed to operate efficiently and less expensively on certain glucose meters already in use by almost 6.5 million diabetics worldwide. Its GenSure!™ (the “Feather”) strip and the final development of its GenChoice!™ (the “Ladybug”) strip will be sold in International markets beginning in January 2018. It’s GenPrecis!™ (the “Dragonfly”) test strip and meter will be sold in International venues in late Spring 2018. In addition, the company plans to file with the U.S. FDA in late January and February respectively for 510K clearance to sell its GenPrecis!™ and GenChoice!™ products in U.S. markets.

Forward-Looking Statements:

This release contains the company’s forward-looking statements which are based on management’s current expectations and assumptions as of October 30, 2017, regarding the company’s business and performance, its prospects, current factors, the economy, and other future conditions and forecasts of future events, circumstances, and results.

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