Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. Edwards Lifesciences Corp (1099800) 10-K published on Feb 15, 2019 at 4:22 pm
Reporting Period: Dec 30, 2018
The operation of our business depends on our information technology systems. We rely on our information technology systems to, among other things, effectively manage sales and marketing data, accounting and financial functions, inventory management, product development tasks, clinical data, customer service and technical support functions. Our information technology systems are vulnerable to damage or interruption from earthquakes, fires, floods and other natural disasters, terrorist attacks, power losses, computer system or data network failures, security breaches, data corruption, and cyber-based attacks. Cyber-based attacks can include computer viruses, computer denial-of-service attacks, worms, and other malicious software programs or other attacks, covert introduction of malware to computers and networks, impersonation of authorized users, and efforts to discover and exploit any design flaws, bugs, security vulnerabilities, or security weaknesses, as well as intentional or unintentional acts by employees or other insiders with access privileges, intentional acts of vandalism by third parties and sabotage. In addition, federal, state, and international laws and regulations, such as the General Data Protection Regulation adopted by the European Union, can expose us to enforcement actions and investigations by regulatory authorities, and potentially result in regulatory penalties and significant legal liability, if our information technology security efforts fail. In addition, a variety of our software systems are cloud‑based data management applications, hosted by third‑party service providers whose security and information technology systems are subject to similar risks.
The Company will apply the new guidance at the effective date of January 1, 2019 rather than at the earliest comparative period presented in the financial statements. In addition, the Company will elect the package of practical expedients permitted under the transition guidance to not reassess (1) whether any expired or existing contracts are, or contain, leases, (2) the lease classification for expired or existing leases, and (3) initial direct costs for existing leases. The Company will also make an accounting policy election to not recognize on its consolidated balance sheet right-of-use assets and lease liabilities arising from short-term leases. In preparation for the adoption of this guidance, the Company has implemented internal controls and system solutions to enable the preparation and disclosure of financial information about its leasing arrangements.
During 2018, the Company executed an Advance Pricing Agreement ("APA") between the United States and Switzerland governments for tax years 2009 through 2020 covering various transfer pricing matters and the Company has updated its transfer pricing policies accordingly. Certain intercompany transactions covering tax years 2015 through 2018 were not resolved and those related tax positions remain uncertain. These transfer pricing matters may be significant to the Company's consolidated financial statements. In addition, the Company executed other APAs as follows: during 2017, an APA between the United States and Japan covering tax years 2015 through 2019, and during 2018, APAs between Japan and Singapore as well as Switzerland and Japan covering tax years 2015 through 2019.
On January 15, 2019, Boston Scientific Corporation and Edwards announced that the companies reached an agreement to settle all outstanding patent disputes between the companies, as well as providing that the parties will not litigate patent disputes related to current portfolios of transcatheter aortic valves, certain mitral valve repair devices, and left atrial appendage closure devices. Under the terms of the agreement, Edwards made a one-time payment to Boston Scientific of $180 million. No further royalties will be owed by either party under the agreement. The settlement covered all of the following historical matters between Boston Scientific Corporation and certain of its subsidiaries (collectively, “Boston Scientific”) and Edwards Lifesciences Corporation and certain of its subsidiaries (collectively, ‘Edwards Lifesciences”): (i) patent infringement actions in the district court in Düsseldorf, Germany against Edwards Lifesciences, filed on October 30, 2015 and February 26, 2016; (ii) patent infringement action against Edwards Lifesciences in the district court in Paris, France, filed on April 8, 2016; (iii), a patent infringement action against Boston Scientific in the United Kingdom in the High Court of Justice, Chancery Division, Patents Court, filed on November 2, 2015, and Boston Scientific’s counterclaims against Edwards Lifesciences; (iv) patent infringement action against Edwards Lifesciences in the same U.K. court, filed on July 30, 2018; (v) lawsuit against Boston Scientific in the district court in Munich, Germany, filed on June 16, 2017 and July 31, 2017 on patent co-ownership; (vi) a lawsuit in the district court in Düsseldorf, Germany for patent infringement against Boston Scientific, filed on November 23, 2015, (vii) a lawsuit against Edwards Lifesciences in the Federal District Court in the District of Delaware alleging patent infringement, filed on April 19, 2016, along with Edwards Lifesciences counterclaims, filed on June 9, 2016; (viii) a lawsuit against Edwards Lifesciences in the Federal District Court in the Central District of California alleging patent infringement, filed on April 19, 2016; (ix) a October 23, 2016 lawsuit against Boston Scientific and LivaNova PLC and LivaNova Canada
On January 28, 2019, Abbott and its Abbott Medical UK Limited subsidiary filed a lawsuit in the United Kingdom in the High Court of Justice, Chancery Division, Patents Court, against Edwards Lifesciences Limited, alleging that the Edwards PASCAL heart valve repair system infringes certain claims of Abbott’s UK national patents arising from EP 1 624 810 B1 and EP 1 408 850 B1. On January 28, 2019, Abbott Medical GmbH filed a lawsuit in the district court in Düsseldorf, Germany against Edwards Lifesciences Corporation and its German subsidiary, Edwards Lifesciences Services GmbH, alleging that the Edwards PASCAL heart valve repair system infringes certain claims of Abbott’s German national patents arising from these same European patents. On or about January 28, 2019, Abbott and Abbott Medical AG filed a lawsuit in the Federal Patent Court in St. Gallen, Switzerland against Edwards Lifesciences AG, Edwards Lifesciences Technology Sàrl, Edwards Lifesciences IPRM AG, and Mitral Valve Technologies Sàrl, alleging a patent infringement relating to the Edwards PASCAL heart valve repair system. The Company intends to defend itself vigorously in these matters.