Pfizer Inc. v. Apotex Inc.

• Decision Date: 04 August 2010
• Docket Number: Case No. 08 C 7231
• Parties: PFIZER INC., Pfizer Ireland Pharmaceuticals Warner-Lambert Company, and Warner-Lambert Company, LLC, Plaintiffs, v. APOTEX INC., and Apotex Corp., Defendants.
• Court: U.S. District Court — Northern District of Illinois

731 F.Supp.2d 754

PFIZER INC., Pfizer Ireland Pharmaceuticals Warner-Lambert Company, and Warner-Lambert Company, LLC, Plaintiffs,

v.APOTEX INC., and Apotex Corp., Defendants.

Case No. 08 C 7231.

United States District Court,

N.D. Illinois,

Eastern Division.

Aug. 4, 2010.

Rudolf E. Hutz, Daniel C. Mulveny, Jeffrey B. Bove, Mary W. Bourke, Connolly Bove Lodge & Hutz LLP, Wilmington, DE, William E. McShane, Washington, DC, Jeffrey Mark Drake, John S. Mortimer, Wood, Phillips, Katz, Clark & Mortimer, Chicago, IL, for Plaintiffs.

William Andrew Rakoczy, Andrew M. Alul, Deanne M. Mazzochi, Paul J. Molino, Rakoczy Molino Mazzochi Siwik LLP, Chicago, IL, John C. Phillips, Jr., Brian E. Farnan, Phillips, Goldman & Spence, P.A., Wilmington, DE, for Defendants.

MEMORANDUM OPINION AND ORDER

MARTIN C. ASHMAN, United States Magistrate Judge.

Plaintiffs, including Pfizer Inc. ("Pfizer"), sued Apotex Inc. and Apotex Corp. (collectively "Apotex") for patent infringement. Currently before this Court is Apotex Inc. and Apotex Corp.'s Motion to Compel Discovery ("Apotex's Motion" or "Motion"). The Court rules on this Motion under Judge Robert M. Dow's referral of this case for discovery supervision pursuant to N.D. Ill. R. 72.1. For the reasons stated below, the Court grants Apotex's Motion in part and denies it in part.

I. Background

Pfizer owns the primary patent at issue in this Motion, U.S. Reissue patent No. Re 40,667 ("the '667 patent"). Pfizer uses the '667 patent to produce Lipitor®, a drug containing atorvastatin calcium that doctors prescribe to treat cardiovascular disease and prevent hypercholesterolemia (and attendant heart attacks and stroke). (Pls.' Mem. in Opp'n to Apotex Inc. and Apotex Corp.'s Motion to Compel Discovery ("Pls.' Opp'n") 2.) The Federal Drug Administration approved Lipitor® in 1996, and Pfizer began selling it in 1997. ( Id.) Although Lipitor® brought in huge revenues, Pfizer's corporate blood pressure began to rise around August 19, 2002, when Ranbaxy, a generic drug company, filed the first Abbreviated New Drug Application ("ANDA").

In 1984, Congress created the ANDA process-which was designed as an expedited approval process for generic drugs-under the Hatch-Waxman Act. Janssen Pharmaceutica, N.V. v. Apotex, Inc., 540 F.3d 1353, 1355 n. 1 (Fed.Cir.2008) ("The Hatch-Waxman Act is the name commonly used to refer to the Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, 98 Stat. 1585 (1984) (codified at 21 U.S.C. §§ 355, 360(cc) (2000), 35 U.S.C. §§ 156, 271, 282 (2000)), as amended by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Pub. L. No. 108-173, 117 Stat. 2066 (2003)."). The district judge in this case has explained the ANDA process at length, as well as the various applicable amendments to the Hatch-Waxman Act. Pfizer Inc. v. Apotex Inc., 726 F.Supp.2d 921, 923-25, 2010 WL 2649841, at *1-2 (N.D.Ill. June 30, 2010). Because the Court is trying to trim the factual fat, there is no need to repeat that analysis here.

To keep our finger on the legal pulse, however, there are a few key points to remember for the purposes of this Motion. First, a company seeking to market a generic form of a current drug on an expedited basis must file an ANDA to do so. Id. Second, the ANDA filer can file based on one of four categories. Id. Each of these relates to the status of the patents, if any, used in the drug that the ANDA filers seeks to market. Id. Third, the patent owner can sue the ANDA filer for infringement. Id. Finally, the ANDA filer can bring a declaratory judgment action against the patent owner after filing if certain conditions are met. Id.

At bottom, the ANDA means that a new generic drug may enter the market. For that reason, Pfizer didn't take Ranbaxy's ANDA lightly; it sued Ranbaxy on two patents, which Pfizer in its brief dubs the '893 patent (now expired) ¹ and the ' 995 patent.² (Pls.' Opp'n 2-3.) Although the United States District Court for the District of Delaware found both the '893 and ' 995 patents valid and infringed, the Federal Circuit on appeal found a technical defect in the sole asserted '995 claim, (Pls.' Opp'n 3) (citing Pfizer Inc. v. Ranbaxy Labs. Ltd., 405 F.Supp.2d 495 (D.Del.2005), affirmed in part, 457 F.3d 1284 (Fed.Cir.2006).) As a result, Pfizer obtained a reissue patent of the ' 995 patent, which took the form of the disputed ' 667 patent in this case. (Pls.' Opp'n 3.) Another dispute with Ranbaxy arose with respect to a Pfizer drug called Caduet®, which, like Lipitor®, was used for hypertension and hyperlipidemia. ( Id. at 3.) Again, Pfizer sued Ranbaxy for patent infringement. ( Id.) Later, on June 18, 2008, Pfizer and Ranbaxy issued a press release stating they had settled their disputes, including those involving Lipitor® and Caduet®. ( Id.)

Although the settlement brought temporary relief, Pfizer's legal arteries soon began to clog again, as two more companies filed ANDAs. ( Id. at 4.) Although these lawsuits settled, more ANDA filers followed, including Apotex. ( Id. at 4.) Originally, Pfizer sued Apotex for infringement and sought a permanent injunction, though Apotex has since counterclaimed on invalidity grounds. In the course of discovery, the parties have filed a variety of motions. That brings us to our current dispute, which concerns documents Apotex seeks in its discovery requests:

REQUEST NO. 114: Any and all documents and things relating to generic competition or potential competition for LIPITOR® or to preventing generic entryof LIPITOR® on to the U.S. market.

REQUEST NO. 115: Any and all documents and things relating to "Life Cycle Management" of LIPITOR®.

* * *

REQUEST NO. 122: All documents and things regarding any authorized generic entry agreements, licenses and/or contracts [Pfizer] have entered into with any other drugs [that] are subject to a patent challenge.

* * *

REQUEST NO. 123: All documents and things regarding any agreements, licenses and/or contracts relating to any agreement reached between Plaintiffs and any third-party regarding the marketing of generic versions of Plaintiffs' atorvastatin products, including but not limited to any authorized generic entry agreement.

(Defs.' Mot., Ex. C at 27-29.) These requests are the heart of the disputed Motion. Pfizer filed various objections to these documents. Apotex filed this Motion because the parties could not resolve their differences of opinion regarding these documents.

II. Discussion

Because this is a discovery dispute, the parties argue about two main discovery-related issues: relevance and privilege. The Court will address them in that order.

A. Relevance

Apotex essentially seeks two types of documents: (1) settlement agreements-and documents related to these agreements-between Pfizer and other companies relating to Lipitor® ("the settlement documents"), and (2) documents regarding Pfizer's business plans when generic drugs enter the market ("the generic entry documents"). These latter documents include "market share projections, strategy plans, life-cycle plans, and documents reflecting any anticipated reaction by Pfizer to generic entry." (Defs.' Mot. 13-14.) Since the law governing relevance is the same for both categories of documents, the Court first explains the law and then analyzes each category of document.

Under the Federal Rules of Civil Procedure, discovery is broad. Fed. R. Civ. P. 26(b). Parties can seek nonprivileged information that is relevant to its claims or defenses. Id. "Relevant information" is that which is "reasonably calculated to lead to the discovery of admissible evidence." Id.

1. The Settlement Documents

Apotex offers three reasons the settlement documents are relevant. These arguments relate to legal issues of secondary considerations, patent misuse, and a pending motion.

i. Secondary Considerations

Apotex makes two arguments that the documents are relevant to secondary considerations of nonobviousness, which go to the validity of the '667 patent. (Defs.' Mot. 7.) Before reaching those arguments, the Court notes that secondary considerations are "the circumstances ... preced [ing], attend[ing], and succeed[ing] the appearance of the invention." Crocs, Inc. v. Int'l Trade Comm'n, 598 F.3d 1294 (Fed.Cir.2010) (quoting Safety Car Heating & Lighting Co. v. Gen. Elec. Co., 155 F.2d 937, 939 (2d Cir.1946) (L. Hand, J.)). "Relevant secondary considerations include [ ] commercial success, long-felt but unsolved needs, failure of others, and the presence of a motivation to combine, or avoid combining, prior art teachings." Power-One, Inc. v. Artesyn Techs., Inc., 599 F.3d 1343, 1351 (Fed.Cir.2010) (citing KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 406, 127 S.Ct. 1727, 167 L.Ed.2d 705 (2007)). Courts must consider these facts, if presented, when determining whether apatent is invalid on obviousness grounds. TriMed, Inc. v. Stryker Corp., 608 F.3d 1333, 1339-40, 1343-44 (Fed.Cir.2010). Additionally, the patentee "must show a 'nexus between the merits of the claimed invention and evidence of secondary considerations ... for the evidence to be given substantial weight in an obviousness decision.' " Hearing Components, Inc. v. Shure Inc., 600 F.3d 1357, 1374 (Fed.Cir.2010) (quoting Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318, 1327 (Fed.Cir.2008)).

On to the arguments.

First, Apotex points to a potential licensing agreement between Pfizer and Ranbaxy (or other settling parties) to make but not market atorvastatin, which could be used to rebut Apotex's claim of obviousness (Defs.' Mot. 7.) Pfizer responds that the documents Apotex seeks are irrelevant because it has never committed itself to relying, and will not rely, on licensing the '667 patent as a secondary consideration. (Pls.' Opp'n 5-6.)

Regardless of whether Pfizer will rely on any potential licensing agreement reached in a settlement, the licensing agreements (as contained in the settlements) are relevant.³ The documents may indicate the ' 667...