Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

6. Contingencies

Litigation

We are subject to various claims, complaints and legal actions that arise from time to time in the normal course of business, including commercial insurance, product liability, intellectual property and employment related matters. In addition, from time to time we may bring claims or initiate lawsuits against various third parties with respect to matters arising out of the ordinary course of our business, including commercial and employment related matters.

Between June 2021 through the nine months ended September 30, 2023, we and certain Abbott Diabetes Care, Inc. (“Abbott”) entities have served complaints against each other in multiple jurisdictions, including in the United States (United States District Court ("U.S.D.C.”), District of Delaware), the United Kingdom (Business and Property Courts of England and Wales), France (United Patent Court (“UPC”) in Paris), Spain (Commercial Courts of Barcelona) and Germany (National Courts (“N.C.”) of Munich, Mannheim, Dusseldorf and Hamburg and the UPC in Munich), primarily involving claims of patent infringement, invalidity and other patent related actions. In June and July of 2021, we initiated patent infringement litigation against Abbott in the United States (U.S.D.C., Western District of Texas) and Germany (N.C. in Mannheim) and filed additional patent infringement actions in May 2023 in Germany (N.C. in Munich) over certain of Abbott's continuous glucose monitoring products. In July and August 2023, we initiated patent infringement litigation in France and Germany in the UPC and in Spain (Commercial Courts of Barcelona).

Between July 2021 through the nine months ended September 30, 2023, Abbott initiated patent infringement litigation against Dexcom in multiple jurisdictions, including the United States (U.S.D.C., Delaware), the United Kingdom (Business and Property Courts of England and Wales), and in Germany (N.C. in Mannheim, Dusseldorf and Hamburg) over certain of Dexcom's continuous glucose monitoring products. In response to the lawsuits initiated by Abbott in the United Kingdom, Dexcom also filed patent infringement counterclaims in that jurisdiction. Three trials on liability have already been conducted in the United Kingdom. On October 18, judgment was handed down in favor of Dexcom in one of these trials. The parties are awaiting rulings on the remaining two. Dexcom and Abbott seek injunctive relief and monetary damages as a result of their respective claims.

In December 2021, Abbott filed a breach of contract lawsuit against Dexcom in the U.S.D.C., District of Delaware alleging that Dexcom breached the parties' Settlement and License Agreement dated July 2, 2014 (“SLA”). The U.S.D.C., District of Delaware consolidated Abbott’s breach of contract lawsuit with Dexcom’s patent infringement lawsuit which had been transferred from the U.S.D.C., Western District of Texas. Dexcom asserted counterclaims that Abbott also breached the SLA. A jury trial on Abbott’s breach of contract claims commenced on July 10, 2023. On July 14, 2023, the jury verdict determined that Abbott was not licensed to thirteen claims of certain Dexcom patents and that Abbott was licensed to five claims. Dexcom’s patent infringement claims in Delaware are stayed until November 10, 2023, at which point the U.S. Patent and Trademark Office will have issued

its final written decisions on certain patents involved in the lawsuit. We will continue to enforce the remaining claims of the patents asserted in Delaware.

Abbott’s patent infringement action against Dexcom is currently scheduled for trial in the U.S.D.C., District of Delaware on March 11, 2024. In the lead up to trial, the U.S.D.C., District of Delaware invalidated one of Abbott’s patents and Abbott dropped four other patents from the litigation.

Commencing in December 2023, Abbott has several patent infringement hearings against Dexcom in the National Court in Hamburg and Munich wherein Abbott is seeking damages and injunctive relief. In March and April of 2024, Dexcom has several patent infringement hearings in Munich against Abbott, wherein Dexcom is seeking damages and injunctive relief.

Due to uncertainty surrounding patent litigation procedures initiated by Dexcom and Abbott throughout multiple jurisdictions, we are unable to reasonably estimate the ultimate outcome of any of the litigation matters at this time. We intend to protect our intellectual property and defend against Abbott’s claims vigorously in all of these actions.

We do not believe we are party to any other currently pending legal proceedings, the outcome of which could have a material adverse effect on our business, financial condition, or results of operations. There can be no assurance that existing or future legal proceedings arising in the ordinary course of business or otherwise will not have a material adverse effect on our business, financial condition, or results of operations.