GlaxoSmithKline LLC et al v. Glenmark Generics Inc. USA

Filing 321

MEMORANDUM ORDER re (302 in 1:14-cv-00877-LPS-CJB, 351 in 1:14-cv-00878-LPS-CJB) REPORT AND RECOMMENDATION is ADOPTED and the portion of Defendants' motion for summary judgment related to convoyed sales is GRANTED. Signed by Judge Leonard P. Stark on 5/26/17. Associated Cases: 1:14-cv-00877-LPS-CJB, 1:14-cv-00878-LPS-CJB (ntl)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
GLAXOSMITHKLINE LLC and SMITHKLINE
BEECHAM (CORK) LIMITED,
Plaintiffs,

v.

C.A. No.14-877-LPS-CJB

GLENMARK PHARMACEUTICALS INC., USA, :
Defendant.
GLAXOSMITHKLINE LLC anq SMITHKLINE
BEECHAM (CORK) LIMITED,
Plaintiffs,

v.

C.A. No. 14-878-LPS-CJB

TEVA PHARMACEUTICALS USA, INC.,
Defendant.

MEMORANDUM ORDER·
WHEREAS, Magistrate Judge Burke issued a 12-page Report and Recommendation (the
"Report") (D .I. 351) 1, dated May 11, 2017, recommending that the Court grant the portions of
Defendants' motion for summary judgment related to GSK's claim oflost profits damages for
"convoyed sales"2 (D.I. 248);
WHEREAS, on May 18, 2017, GSK objected to the Report (D.I. 361) ("GSK Objections"

All r~ferences to the docket index (D.I.) are to the Teva action, C.A. No. 14-878.

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The Report, and accordingly, this Order, solely relates to arguments in Defendants'
"Combined Motion for Summary Judgment and to Exclude Certain Expert Testimony" related to
convoyed sales.

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or "GSK Objs");
WHEREAS, on May 25, 2017, Defendants responded to the GSK Objections (D.I. 381)
("Defendants Response" or "Defs Resp");
WHEREAS, the Court has considered the parties' objections and responses de novo, see

St. Clair Intellectual Prop. Consultants, Inc. v. Matsushita Elec. Indus. Co., Ltd., 691 F. Supp.
2d 538, 541-42 (D.Del. 2010); 28 U.S.C. § 636(b)(l); Fed. R. Civ. P. 72(b)(3);
NOW THEREFORE, IT IS HEREBY ORDERED that:
1.

GSK's Objections (D.I. 361) are OVERRULED, Judge Burke's Report (D.I. 351)

is ADOPTED, and the portion of Defendants' Motion for Summary Judgment related to
convoyed sales (D .I. 248) is GRANTED.
2.

In its Objections, GSK asserts that two factual disputes preclude summary

judgment: (1) whether there is a functional relationship between all carvedilol dosages used to
.treat Congestive Heart Failure, and (2) whether patients would take COR:8G® rather than generic
carvedilol during the convoyed sales period. (GSK Objs at 6-9) GSK's contentions are
unavailing.
As the Report stated, "[t]he question here is not whether sales before and after the sixmonth maintenance period have some relationship." (Report at 9) There is undisputedly some
functional relationship between carvedilol dosages - be they branded or ·generic carvedilol administered before the six-month maintenance period and those administered after the sixmonth maintenance period. 3 (See D.I. 335 at 145; GSK Objs at 8 ("Dr. McCullough's testimony

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F or simplicity, and without deciding any contested issue, the Court refers herein to the
dosing periods as: (i) initial monitoring period, (ii) six-month maintenance period, and
(iii) ongoing maintenance period.
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establishes that the initial monitoring dosages and the initial maintenance dosages would not be
given unless they were a part of a course of treatment designed to include maintenance dosages
given after 6 months of the maintenance period.")) But to be eligible for lost profits on convoyed
sales, GSK must prove that a functional relationship exists between branded carvedilol
(COREG®) before and after the six-month maintenance period, such that the allegedly infringing
sales of COREG® during the ongoing maintenance period require prior initial sales of
COREG® during an earlier period. (Report at 9) GSK has failed to make this showing.·
A reasonable jury would have to be able to find that the carvedilol administered during
the initial monitoring period and/or during the six-month maintenance period constitutes a
"fwictional unit" with the carvedilol administered during the ongoing maintenance period.
Again, the record cannot support such a finding. Tq the contrary, even GSK's expert, Dr.
McCullough, has "full confidence" that the generic and branded carvedilol are "therapeutically
interchangeable." (See Report at 9-10) (citing Dr. McCullough's deposition testimcmy) 4 On this
record, no reasonable factfinder could find the required functional relationship between the initial
monitoring period doses or the six-month maintenance period doses, on the one hand, and the
ongoing maintenance period doses, on the other.
Similarly, whether patients would take or even prefer to take COREG® rather than
generic carvedilol during the convoyed sales period is irrelevant if patients are not required to do

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GSK asserts that the ·Report quotes Dr. McCullougl;l's testimony "out of context"
because it fails to account for the fact that Dr. McCullough was testifying about the nature of the
inquiry in the "real-world," not in the "but for" world applicable to GSK's lost profits claims.
(GSK Objs at 5) The Court disagrees. As Defendants point out, "[n]othing in the 'but for' world
alters the scientific reality that branded COREG is fully interchangeable with generic carvedilol."
(Defs Resp at 7)
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so. Lost profits for convoyed sales are available "if both the patented and unpatented products
together were considered to be components of a single assembly or parts of a complete machine,
or they together constituted a functional unit." Am. Seating Co. v. USSC Grp., Inc., 514 F.3d
1262, 1268 (Fed. Cir. 2008) (internal quotation marks omitted). Convoyed sales are not
available for "items that have essentially no functional relationship to the patented invention and
that may have been sold with an infringing device only as a matter of convenience or business
advantage." Id. (quoting Rite-Hite Corp. v. Kelley Co. Inc., 56 F.3d 1538, 1550 (Fed. Cir.
1998)). GSK has failed to adduce evidence from which it may reasonably be found that
COREG® must be used during the initial monitoring period or six-month maintenance period in
order to treat.CHF with COREG® after the six-month maintenance period. The fact that
COREG® could have been prescribed in all periods, and even the contested fact that doctors
preferred the branded carvedilol be prescribed in all periods, does not provide a basis for finding

that such prescriptions wer~ required; and, hence, does not provide a basis for finding that the
pre-ongoing maintenance period sales and ongoing maintenance period sales could together be
considered a functional unit.

HON. EONARD P. STARK
UNITED STATES DISTRICT JUDGE

May26, 2017Wilmington, Delaware

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