Amgen Inc. et al v. Hospira, Inc.
MEMORANDUM ORDER: Defendant's Motion for Summary Judgment (D.I. 196 ) is DENIED. Plaintiffs' Motion to Exclude Testimony of Dr. Gregory K. Bell (D.I. 204 ) is GRANTED-IN-PART and DENIED-IN-PART. Defendant's Motion to Exclude the Testimony of Randal Heeb, Ph.D. (D.I. 202 ) is GRANTED-IN-PART and DENIED-IN-PART. Signed by Judge Richard G. Andrews on 9/7/2017. (nms)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
AMGEN INC., AMGEN
Civil Action No. 15-839-RGA
Presently before me is Defendant Hospira, Inc. 's Motion for Summary Judgment (D.I.
196); Plaintiffs Amgen Inc. and Amgen Manufacturing, Limited's Motion to Exclude Testimony
of Dr. Gregory K. Bell (D.I. 204); and Defendant Hospira, Inc.'s Motion to Exclude the
Testimony of Randal Heeb, Ph.D. (D.I. 202). I have considered the parties' briefing. (D.I. 197;
D.I. 227; D.I. 242; D.I. 206; D.I. 223; D.I. 244; D.I. 203; D.I. 225; D.I. 246). I held oral
argument on June 28, 2017.
LEGAL STAND ARD
"The court shall grant summary judgment if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter oflaw." FED.
R. Crv. P. 56(a). The moving party has the initial burden of proving the absence of a genuinely
disputed material fact relative to the claims in question. Celotex Corp. v. Catrett, 477 U.S. 317,
330 (1986). Material facts are those "that could affect the outcome" of the proceeding, and "a
dispute about a material fact is 'genuine' if the evidence is sufficient to permit a reasonable jury
to return a verdict for the non-moving party." Lamont v. New Jersey, 637 F.3d 177, 181 (3d Cir.
2011). The burden on the moving party may be discharged by pointing out to the district court
that there is an absence of evidence supporting the non-moving party's case. Celotex, 477 U.S.
The burden then shifts to the non-movant to demonstrate the existence of a genuine issue
for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986);
Williams v. Borough of West Chester, Pa., 891 F.2d 458, 460-61 (3d Cir. 1989). A non-moving
party asserting that a fact is genuinely disputed must support such an assertion by: "(A) citing to
particular parts of materials in the record, including depositions, documents, electronically stored
information, affidavits or declarations, stipulations ... , admissions, interrogatory answers, or
other materials; or (B) showing that the materials cited [by the opposing party] do not establish
the absence ... of a genuine dispute .... " FED. R. CIV. P. 56(c)(l).
When determining whether a genuine issue of material fact exists, the court must view
the evidence in the light most favorable to the non-moving party and draw all reasonable
inferences in that party's favor. Scott v. Harris, 550 U.S. 372, 380 (2007); Wishkin v. Potter,
4 76 F .3d 180, 184 (3d Cir. 2007). A dispute is "genuine" only if the evidence is such that a
reasonable jury could return a verdict for the non-moving party. Anderson, 477 U.S. at 247--49.
If the non-moving party fails to make a sufficient showing on an essential element of its case
with respect to which it has the burden of proof, the moving party is entitled to judgment as a
matter oflaw. See Celotex Corp., 477 U.S. at 322.
Federal Rule of Evidence 702
Federal Rule of Evidence 702 sets out the requirements for expert witness testimony,
A witness who is qualified as an expert by knowledge, skill,
experience, training, or education may testify in the form of an
opinion or otherwise if: (a) the expert's scientific, technical, or
other specialized knowledge will help the trier of fact to
understand the evidence or to determine a fact in issue; (b) the
testimony is based on sufficient facts or data; (c) the testimony is
the product of reliable principles and methods; and (d) the expert
has reliably applied the principles and methods to the facts of the
Fed. R. Evid. 702. The Third Circuit has explained:
Rule 702 embodies a trilogy of restrictions on expert testimony:
qualification, reliability and fit. Qualification refers to the
requirement that the witness possess specialized expertise. We
have interpreted this requirement liberally, holding that "a broad
range of knowledge, skills, and training qualify an expert."
Secondly, the testimony must be reliable; it "must be based on the
'methods and procedures of science' rather than on 'subjective
belief or unsupported speculation'; the expert must have 'good
grounds' for his o[ r] her belief. In sum, Daubert holds that an
inquiry into the reliability of scientific evidence under Rule 702
requires a determination as to its scientific validity." Finally, Rule
702 requires that the expert testimony must fit the issues in the
case. In other words, the expert's testimony must be relevant for
the purposes of the case and must assist the trier of fact. The
Supreme Court explained in Daubert that "Rule 702's
'helpfulness' standard requires a valid scientific connection to the
pertinent inquiry as a precondition to admissibility."
By means of a so-called "Daubert hearing," the district court acts
as a gatekeeper, preventing opinion testimony that does not meet
the requirements of qualification, reliability and fit from reaching
the jury. See Daubert ("Faced with a proffer of expert scientific
testimony, then, the trial judge must determine at the outset,
pursuant to Rule 104(a) [of the Federal Rules of Evidence] whether
the expert is proposing to testify to (1) scientific knowledge that
(2) will assist the trier of fact to understand or determine a fact in
Schneider ex rel. Estate ofSchneider v. Fried, 320 F.3d 396, 404-05 (3d Cir. 2003) (footnote
and internal citations omitted). 1 The proponent of expert testimony must "demonstrate by a
The Court of Appeals wrote under an earlier version of Rule 702, but subsequent amendments to the rule
were not intended to make any substantive change.
preponderance of evidence that the [expert's] opinions are reliable." In re Paoli R.R. Yard PCB
Litig., 35 F.3d 717, 744 (3d Cir. 1994).
There are genuine disputes of material fact as to whether Hospira's manufacture of
twenty one lots ofEPO for commercial inventory in 2013 to 2015 was "solely for uses
reasonably related to the development and submission of information" to the FDA. See
Momenta Pharm., Inc. v. Teva Pharm. USA Inc., 809 F.3d 610, 614 (Fed. Cir. 2015) (emphasis
added). For example, there is evidence that Hospira manufactured a large quantity (tens of
millions of doses) ofEPO in its 2013, 2014 and 2015 manufacturing campaigns. (D.I. 228-1 at
21-27 iii! 54-64, 151 n.31). The commercial value of this is in the hundreds of millions. (D.1.
228-1at151 n.31). Hospira's own documents and statements to the FDA indicate that the
manufacture of some of the lots was for "commercial inventory." (See, e.g., D.I. 228-1 at 184).
Thus, although Hospira has evidence that its EPO was manufactured and used to gather
information for FDA submission pursuant to FDA guidelines and information requests, that is
insufficient to show that there is no genuine of dispute of material fact that the quantity of EPO
produced was reasonably related to the development and submission of information to the FDA.
(See D.I. 197 at 6-9).
I am therefore denying summary judgment because there is a genuine dispute of material
fact as to the applicability of the Safe Harbor. See lntegra Lifesciences I, Ltd. v. Merck KGaA,
496 F.3d 1334, 1347 (Fed. Cir. 2007) ("The variety of experimental activity that may apply to
any specific biologic or physiologic investigation reinforces the fact-dependency of the
inquiry."); Chang v. Biosuccess Biotech Co., 76 F. Supp. 3d 1022, 1036 (C.D. Cal. 2014)
("Whether a 'use' falls within the Safe Harbor Exemption is a fact-based issue."); Isis Pharm.,
Inc. v. Santaris Pharma AIS Corp., 2014 WL 794811, at *13 (S.D. Cal. Feb. 27, 2014) ("The
Court finds this question is, as with most questions involving a determination of what is
reasonable, best left to the trier of fact.").
Claims 24 and 27 of the '298 Patent
There is a genuine dispute of material fact as to whether Hospira's process selectively
elutes the desired EPO isoforms. Amgen puts forward sufficient evidence that Hospira's
"Downstream Manufacturing process" selectively elutes the EPO isoforms. (See, e.g., D.I. 2282, Exh. 19, HOS13296, Exh. 20 ifif 48-49, 52-56, Exh. 21ifif10, 24-26).
Hospira's argument that its method merely practices the "single-step" process of Lai is
not persuasive. See, e.g., Ecolab, Inc. v. Paraclipse, Inc., 285 F.3d 1362, 1377 (Fed. Cir. 2002)
("[P]racticing the prior art is not a defense to literal infringement."). For example, there is
evidence that Lai does not achieve the same degree of purity of isoforms having nine to fourteen
sialic acids as Hospira's mixture. (D.I. 228-2, Exh. 20 iii! 41-42; D.I. 1-1, Exh. A at 9:1-3,
10:39-41 ). Thus, there is a genuine dispute of material fact as to whether Hospira infringes the
"selectively eluting" limitation of claim 24.
Hospira argues that its process does not infringe because the process does not isolate
individual isoforms. This is premised on an improper construction of claim 27. Claim 27
A method for obtaining an erythropoietin composition having a predetermined in vivo
specific activity comprising preparing a mixture of two or more erythropoietin isoforms
of claim 1.
(D.I. 1-1, Exh. A, claim 27). Nothing in this language suggests that the individual isoforms of
claim 1 have to be separately prepared prior to making the mixture. I have never held that this
was the case. Rather the language "preparing a mixture of two or more" of the isoforms of claim
1 naturally allows for the simultaneous preparation of a mixture of the isoforms of claim 1. The
specification supports this reading. (D.I. 1-1, Exh. A, 6:61-7:3). Hospira's reading is too
limiting. See also Dow Chem. Co. v. Sumitomo Chem. Co., 257 F.3d 1364, 1378 (Fed. Cir.
2001) ("[I]t is well established that a claim construction that excludes a preferred embodiment
if ever, correct."). Thus, summary judgment is improper with respect to claim 27.
Amgen seeks to exclude Dr. Bell's testimony on the following grounds: that (1) his noninfringing alternative theory is improper, (2) his hypothetical-negotiation analysis is improperly
tied to what eventually happened, and (3) his "scoring system" is not a generally accepted
Amgen argues that Hospira's non-infringing alternative is that Hospira could discard the
infringing batches before patent expiration and create new ones after patent expiration. (D.I. 206
at 6). Given that Hospira has made no commercial use of the allegedly infringing EPO, reliance
on this non-infringing alternative is proper. See Georgia-Pac. Corp. v. US. Plywood Corp., 318
F. Supp. 1116, 1120 (S.D.N.Y. 1970) (considering "[t]he extent to which the infringer has made
use of the invention; and any evidence probative of the value of that use").
Amgen argues that Dr. Bell's analysis improperly replaces the hypothetical negotiation's
inquiry into what the parties would have expected at the time of the negotiation with a
"backward-looking inquiry" into what actually happened later. (D.I. 206 at 7-8). This is not
persuasive because consideration of "book of wisdom" evidence is permissible, at least in this
context. See, e.g., Sinclair Ref Co. v. Jenkins Petroleum Process Co., 289 U.S. 689, 698 (1933)
("But a different situation is presented if years have gone by before the evidence is offered.
Experience is then available to correct uncertain prophecy. Here is a book of wisdom that courts
may not neglect. We find no rule of law that sets a clasp upon its pages, and forbids us to look
Amgen argues that Dr. Bell's three-point "scoring system" is unreliable and, in the
alternative, would be unduly prejudicial and misleading to the jury. Addressing the Federal Rule
of Evidence 403 issue first, I think his scoring system has minimal probative value and is
substantially outweighed by the dangers of undue prejudice and juror confusion. While I do not
have a problem with Dr. Bell's underlying analysis, I am concerned with the scoring system.
The scoring system makes Dr. Bell's analysis sound like a scientifically-precise analysis, which
it is not. See Apple Inc. v. Motorola, Inc., 757 F.3d 1286, 1315 (Fed. Cir. 2014) ("This court has
recognized that estimating a reasonable royalty is not an exact science."). Because Federal
Rule of Evidence 403 decides the matter, it is not necessary to address the Daubert issue.
Hospira argues for the exclusion of Dr. Heeb's testimony. (See generally D.I. 203). One
argument that Hospira raises is for the exclusion of Dr. Heeb's MWP-MWA opinion. Hospira
argues that Dr. Heeb performs a "Maximum Willingness to Pay" ("MWP") and "Minimum
Willingness to Accept" ("MW A") analysis to determine that the reasonable royalty would be a
lump-sum payment from $153.9 million (MWP) to $415.3 million (MWA). (D.I. 203 at 4).
Hospira argues that the $415.3 million figure is unreliable because it assumes two counterfactual
premises: (1) Hospira would be able to take away Amgen's sales from DaVita, and (2) Amgen's
Epogen sales would continue at a fixed rate with respect to Aranesp. I agree that the $415.3
million figure is unreliable because it assumes Hospira would be able to take away Amgen's
sales from DaVita.
In determining the MWA, Dr. Heeb assumes that Hospira's EPO product would take
Amgen's DaVita sales. The DaVita sales occur in the dialysis market, which is dominated by
DaVita and a competing product made by Fresenius. (D.I. 205-3, 86:4-7). At the time of the
hypothetical negotiation, Amgen and DaVita were in an exclusive supply contract requiring
DaVita to purchase 90% of its EPO from Amgen through at least 2019. The DaVita contract has
since been renegotiated. (See D.I. 205-5 at 11; D.I. 247-2, 94:12-95:8). Thus, at the time of the
hypothetical negotiation, Hospira's EPO could not be freely purchased by DaVita. A damages
calculation that assumes otherwise does not fit the facts of the case. Dr. Heeb admits, "If one
were to credit a scenario in which Hospira targets primarily Fresenius, Amgen's MWA would
have been $170.4 million." (D.1. 247-1 at 45, 81-82). Thus, for this reason alone, the maximum
MW A Dr. Heeb can put before the jury would be $170.4 million.
The $415.3 million figure is also challenged on the basis that it assumes that Epogen
sales would continue at a fixed proportion in relation to another Amgen product, Aranesp
(Amgen's second-generation competitor to Epogen). While certain facts suggest that Amgen is
transitioning sales away from Epogen to Aranesp (D.1. 205-3, 138:23-139:5; D.I. 205-5 at 1213; D.I. 247-2, 144:18-145:4), this is insufficient to render the $415.3 million figure unreliable.
To the extent the $170.4 million figure rests on the same assumption, Hospira is free to crossexamination Dr. Heeb on this point.
Thus, I am excluding evidence offered for the purpose of supporting the $415.3 million
figure and argument related to the $415.3 million figure. This ruling does not exclude evidence
offered for the purpose of supporting the $170.4 million figure and argument related to the
$170.4 million figure. Hospira's arguments for excluding other aspects of Dr. Heeb's testimony
are better suited for cross-examination and are denied.
For the foregoing reasons, Defendant's Motion for Summary Judgment (D.I. 196) is
DENIED. Plaintiffs' Motion to Exclude Testimony of Dr. Gregory K. Bell (D.I. 204) is
GRANTED-IN-PART and DENIED-IN-PART. Defendant's Motion to Exclude the
Testimony of Randal Heeb, Ph.D (D.I. 202) is GRANTED-IN-PART and DENIED-IN-PART.
It is SO ORDERED this
..!]_ day of September, 2017.
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