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Commitments and Contingencies | 3 Months Ended
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Mar. 31, 2019
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | Commitments and Contingencies Purchase Commitments As of March 31, 2019, the Company had outstanding contractual purchase commitments of $16,542, which primarily relate to amounts that will be paid in 2019 and 2020 upon delivery of commercial non-browning apple trees. Contingencies In March 2012, Trans Ova was named as a defendant in a licensing and patent infringement suit brought by XY, LLC ("XY") alleging that certain of Trans Ova's activities breached a 2004 licensing agreement and infringed on patents that XY allegedly owned. Trans Ova filed a number of counterclaims in the case. The matter proceeded to a jury trial in the United States District Court for the District of Colorado in January 2016. The jury determined that XY and Trans Ova had each breached the licensing agreement and that Trans Ova had infringed XY's patents. In April 2016, the Court issued its post-trial order, awarding $528 in damages to Trans Ova and $6,066 in damages to XY. The order also provided Trans Ova with the ability to continue to practice XY's technology, subject to an ongoing royalty obligation of 12.5% of gross proceeds on semen-sorting products, plus a 2% enhancement on products utilizing reverse-sorting. In addition, the Court assigned a $5.00 minimum royalty for a straw of sexed semen. Both parties appealed the district court's order. In May 2018, the Court of Appeals for the Federal Circuit denied Trans Ova's appeal of its claims for antitrust, breach of contract, and patent invalidity (except as to one patent, for which the Court affirmed invalidity in a separate, same-day ruling in a third-party case). The Court of Appeals for the Federal Circuit remanded the district court's calculation of the ongoing royalty and instructed the district court to re-calculate the ongoing royalty in light of post-verdict economic factors. In March 2019, the district court increased the royalty rate on Trans Ova's semen-sorting products to 18.75%. For the reverse-sorting enhancement, the Court applied a weighted, blended royalty of 12.63% to Trans Ova's entire in vitro fertilization services utilizing reverse-sorted semen. The court also changed the minimum royalty for a straw of sexed semen to $6.25 for a 2-million cell straw (prorated appropriately for straws of higher cell counts), and assigned a minimum royalty for a sexed embryo at $6.25 per embryo. The new royalty rates are applied from February 2016 (the end date of the trial). Since the inception of the 2004 agreement, Trans Ova has remitted payments to XY pursuant to the terms of that agreement, or pursuant to the terms of the Court's April 2016 post-trial order, and has recorded these payments in cost of services in the consolidated statements of operations for the respective periods. For the period from inception of the 2004 agreement through the Court's April 2016 order, aggregate royalty and license payments were $3,170, of which $2,759 had not yet been deposited by XY. In 2016, the Company recorded the expense of $4,228 representing the excess of the net damages awarded to XY, including prejudgment interest, over the liability previously recorded by Trans Ova for uncashed checks previously remitted to XY. In August 2016, Trans Ova deposited the net damages amount, including prejudgment interest, into the Court's registry, to be held until the appeals process was complete and final judgment amounts were determined. These amounts were included in restricted cash and other accrued liabilities on the consolidated balance sheet as of December 31, 2018. After the appeal in December 2018, the Court subsequently released the funds held in its registry to XY in 2019. Thus, XY has received full payment for damages prior to February 2016, the date of the trial. As for post-trial damages, Trans Ova has remitted payment to XY every quarter based on the original royalty rates, though XY refused to cash those checks. Under the Court's March 2019 order resetting the royalty rates, Trans Ova recalculated any additional royalties owed from February 2016 to the present and will remit any underpayment to XY. During the three months ended March 31, 2019, $116 of royalty expense was recorded based on an estimate of the underpayment due to XY from February 2016 through December 2018 and is included in selling, general and administrative expenses on the accompanying consolidated statement of operations. In December 2016, XY filed a complaint for patent infringement, trade secret misappropriation, and various state law claims against Trans Ova in the United States District Court for the Western District of Texas in Waco, Texas. Since the claims in the 2016 complaint directly relate to the parties' previous litigation, Trans Ova filed and was granted a motion to transfer the case to Colorado District Court. That Court subsequently dismissed nine of the complaint's twelve counts, including all five non-patent counts. The Court subsequently dismissed another patent count after ruling that the patent was invalid, leaving only two patent counts left in the case. In February 2019, a Wisconsin District Court invalidated one of the remaining patents, which XY had asserted against another competitor. That ruling prompted the Colorado District Court to stay the two remaining patent counts and enter final judgment against XY's ten other dismissed counts. The 2016 litigation is administratively closed, pending XY's appeal of the Court's rulings dismissing its various patent and non-patent causes of action. Trans Ova shall continue to utilize XY's technology consistent with the determinations of the court proceedings. Nonetheless, these disputes remain subject to a number of uncertainties, including the outcome of appellate proceedings, the possibility of further claims by XY, and the impact of these matters on Trans Ova's ability to utilize the technology licensed from XY. Trans Ova and the Company could elect to enter into a settlement agreement in order to avoid the further costs and uncertainties of litigation. The Company may become subject to other claims, assessments, and governmental investigations from time to time in the ordinary course of business. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. The Company accrues liabilities for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. As of March 31, 2019 and December 31, 2018, the Company does not believe that any such matters, individually or in the aggregate, will have a material adverse effect on the Company's business, financial condition, results of operations, or cash flows.

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- Definition The entire disclosure for commitments and contingencies. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 450 -URI http://asc.fasb.org/topic&trid=2127136 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 440 -URI http://asc.fasb.org/topic&trid=2144648 + Details
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