Genentech, Inc. v. U.S. Intern. Trade Com'n

• Decision Date: 14 August 1997
• Docket Number: No. 95-1244,95-1244
• Citation: 122 F.3d 1409,43 USPQ2d 1722
• Parties: , 38 Fed.R.Serv.3d 592, 43 U.S.P.Q.2d 1722 GENENTECH, INC., Appellant, v. The UNITED STATES INTERNATIONAL TRADE COMMISSION, Appellee, and Bio-Technology General Corporation and Bio-Technology General (Israel) Ltd., Intervenors, and Novo Nordisk A/S, Novo Nordisk of North America, Inc., Novo Nordisk Pharmaceuticals, Inc., and Zymogenetics, Inc., Intervenors.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1409

122 F.3d 1409

19 ITRD 1451, 38 Fed.R.Serv.3d 592,

43 U.S.P.Q.2d 1722

GENENTECH, INC., Appellant, v. The UNITED STATES INTERNATIONAL TRADE COMMISSION, Appellee, and Bio-Technology General Corporation and Bio-Technology

General (Israel) Ltd., Intervenors,

and

Novo Nordisk A/S, Novo Nordisk of North America, Inc., Novo

Nordisk Pharmaceuticals, Inc., and Zymogenetics,

Inc., Intervenors.

No. 95-1244.

United States Court of Appeals, Federal Circuit.

Aug. 14, 1997.

D. Dennis Allegretti, Banner & Allegretti, Ltd., Boston, MA, argued, for appellant. With him on the brief was Frederick David Foster, Ablondi, Foster, Sobin & Davidow, P.C., Washington, DC. Of counsel were John P. Iwanicki and Dale A. Malone, Banner & Allegretti, Ltd., Boston, MA.

Jean H. Jackson, Office of General Counsel, U.S. International Trade Commission, Washington, DC, argued, for appellee. With her on the brief were Lyn M. Schlitt, General Counsel, and James A. Toupin, Deputy General Counsel.

Cecilia H. Gonzalez, Howrey & Simon, Washington, DC, argued, for intervenors Bio-Technology General Corporation, et al. With her on the brief were John P. White and Norman H. Zivin, Cooper & Dunham LLP, New York City.

Albert L. Jacobs, Jr., Rosenman & Colin, New York City, argued, for intervenors Novo Nordisk, A/S, et al. On the brief was Mark H. Sparrow. Of counsel were Gerard F. Diebner, Kelly L. Morron, and Jesse D. Reingold. Also of counsel were Philippe M. Bruno, Munford Page Hall, II, L. Daniel Mullaney, Aldo Noto, Jon F. Tuttle, and Karen A. Zughaib, Dorsey & Whitney, Washington, DC.

Before ARCHER, Chief Judge, and RICH and LOURIE, Circuit Judges.

ARCHER, Chief Judge.

Genentech, Inc. (Genentech) appeals the final determination of the United States International Trade Commission (ITC or Commission), Genentech, Inc. v. United States Int'l Trade Comm'n, No. 337-TA-358 (Nov. 29, 1994) (Initial Determination), (Jan. 17, 1995) (Final Determination and Commission Opinion), dismissing Genentech's amended complaint alleging a violation of § 337 of the Tariff Act of 1930, 19 U.S.C. § 1337 (1994). The Commission dismissed the complaint as a sanction for discovery misconduct which it found had occurred when Genentech failed to disclose and produce certain documents to supplement discovery in the ITC proceeding until ordered to do so. We reverse and remand.

BACKGROUND

On March 16, 1993, Genentech filed a complaint with the ITC seeking an investigation The administrative law judge (ALJ) assigned to the case issued ground rules for the investigation. These rules included, inter alia, Ground Rules 4(ix) and 5(i), which provided in pertinent part:

under § 337 based on the alleged infringement of four of its patents ¹ relating to recombinant production of human growth hormone (hGH), by Bio-Technology General Corp. and Bio-Technology (Israel) Ltd. (collectively BTG) and Novo Nordisk A/S, Novo Nordisk of North America, Inc., Novo Nordisk Pharmaceuticals, Inc., and Zymogenetics (collectively Novo). On September 21, 1993, the ITC instituted Investigation No. 337-TA-358 to determine whether BTG and Novo were importing into or selling in the United States recombinantly produced hGH made abroad by processes covered by the claims of the four Genentech patents in violation of § 337.

4. Discovery

* * * *

(ix) A duty to timely supplement all discovery responses upon obtaining information rendering a response substantially incomplete or incorrect is hereby imposed by the ALJ pursuant to Commission interim rule 210.30(d)(3).

* * * *

5. Privileged Matter

(i) During the course of discovery, the following procedure, similar to what is set forth in Duplan v. Deering Millikin [sic] Inc., 397 F.Supp. 1146 (D.S.C.1975), should be followed with respect to those documents for which counsel claims attorney-client and/or work product privilege.

(a) When there is no objection to production of a document other than that the document is subject to a claim of privilege, each such withheld document should be separately identified in a privileged document list, by the party claiming the privilege, which privileged document list shall be provided to the requesting party within ten (10) calendar days following the due date of the response to the discovery request requesting production of the document so withheld.

* * * *

Commission Interim Rule (CIR) 210.30(d) also provides:

(2) A party is under a duty to seasonably amend a prior response if he obtains information upon the basis of which--

* * * *

(ii) He knows that the response, though correct when made, is no longer true, and the circumstances are such that a failure to amend the response is in substance a knowing concealment.

CIR 210.30(d)(2).

Discovery proceeded and, upon its completion on March 18, 1994, the ALJ conducted an evidentiary hearing April 11-24, 1994, with closing arguments and post-hearing briefs scheduled for June 9 and 10, 1994. Under Commission rules, the ALJ's initial determination was originally due by July 29, 1994. ²

Meanwhile, during this same period, Genentech was involved in a consolidated "multi-district" patent infringement suit in the U.S. District Court for the Southern District of Indiana with two parties not involved in the ITC investigation, Eli Lilly & Co. and the Regents of the University of California. In Genentech did not inform the parties to the ITC investigation or the ALJ about the district court's ruling on the GLP documents. Instead, BTG learned of the court's ruling around July 8, 1994, after it was published. BTG, joined by Novo, promptly requested production of the GLP documents by Genentech. BTG and Novo claimed entitlement to the GLP documents due to Genentech's waiver of privilege in the district court litigation.

                that litigation, Genentech sued on fourteen patents, including the four patents at issue here.  During the course of discovery in that action, Genentech inadvertently produced approximately 21,000 pages of documents bearing "GLP" Bates stamp numbers (the GLP documents), 12,000 pages of which Genentech considered privileged under either the attorney-client privilege or attorney work product privilege. 3  Genentech did not consider the remaining 9,000 pages to be privileged.  Within two weeks of the production, Genentech realized its error and filed an emergency motion for the return of the 12,000 pages of documents.  On March 22, 1994, the district court denied the motion because the disclosure resulted from inadequate screening procedures.  The court ruled that Genentech had, therefore, waived any privilege as to those documents, although no waiver of the subject matter had occurred.  In re Recombinant DNA Tech.  Patent and Contract Litig., 850 F.Supp. 769 (S.D.Ind.1994)
                

Genentech resisted disclosure in the ITC proceeding of 12,000 pages of the GLP documents it thought should be privileged. It argued that the interlocutory ruling of the district court only affected that proceeding and also that the protective order in that proceeding controlled access to these GLP documents. Because BTG and Novo were not parties to that action, Genentech contended that they were not entitled under the protective order to any of the documents. For these reasons, Genentech declined to produce voluntarily any of the 12,000 pages of GLP documents that it claimed were privileged.

As to the remaining 9,000 pages of GLP documents, Genentech confirmed that of the some 2900 pages that were relevant to the ITC investigation all except 60 had previously been produced. Genentech also believed these 60 pages had been produced but had not established that belief. In order to avoid delay, Genentech voluntarily produced these remaining pages.

On July 15, 1994, the ALJ ordered Genentech to produce the 12,000 pages of GLP documents, finding that "the documents in issue were found not to be privileged by the [district court] and therefore any privilege has been waived." Genentech promptly complied with the ALJ's order by producing the 12,000 pages to BTG and Novo on July 19, 1994.

On July 21, 1994, BTG and Novo moved to reopen the record to admit additional evidence relating to the GLP documents, to extend the date for the issuance of the initial decision, and for sanctions against Genentech. The ALJ denied the motion to reopen the record and the motion for sanctions, explaining that neither BTG nor Novo had identified the materiality of any of the GLP documents or any specific discovery request with which Genentech failed to comply. The ALJ, however, agreed to delay the issuance of the initial decision from July 29, 1994, until November 29, 1994, due to the "more complicated" nature of the case.

Subsequently, the ALJ reconsidered his ruling and permitted limited discovery pertaining to the GLP documents. On August 12, 1994, BTG and Novo filed a motion to compel Genentech to confirm whether certain of the GLP documents produced pursuant to the ALJ's order had been included on the "Duplan sheets." ⁴ Specifically, BTG requested that Genentech confirm that 59 of Four days later, Genentech informed the ALJ of the difficulty involved in making the confirmations with the documents previously listed on the Duplan sheets, noting that its task was akin to searching for "a small number of needles (about 12,000) in an enormous haystack (about 2 million)." The ALJ gave Genentech additional time to complete the discovery requests and allowed BTG and Novo until August 29, 1994, to renew their motions to reopen the record and to impose sanctions. On August 25, 1994, Genentech advised the ALJ that it needed additional time to make the confirmations. Specifically, Genentech stated that it had not been able to confirm whether 38 of the GLP documents had been disclosed on the Duplan sheets. Because of the impending deadline of August 29, 1994, for BTG and Novo to file their motions, the ALJ announced on August 26, 1994, that he would accept no further submissions from Genentech relating to the GLP...