AbbVie Inc. et al v. Boehringer Ingelheim International GMBH et al
Filing
471
MEMORANDUM OPINION. Signed by Judge Richard A. Lloret on 4/11/2019. (ceg)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
ABBVIE INC. and ABBVIE
BIOTECHNOLOGY LTD
v.
BOEHRINGER INGELHEIM
INTERNATIONAL GMBH,
BOEHRINGER INGELHEIM
PHARMACEUTICALS, INC., and
BOEHRINGER INGELHEIM
FREMONT, INC.
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CIVIL NO. 17-cv-01065-MSG-RL
MEMORANDUM OPINION CONCERNING Doc. No. 138
The defendants (collectively, “Boehringer”) have moved to compel the production
of prelitigation disclosures from another suit between the plaintiffs (collectively,
“AbbVie”) and Amgen, as well as settlement agreements that AbbVie concluded with
potential biosimilar competitors to its drug, Humira. Doc. No. 138 at 21 (“BI. Mot.”). I
have reviewed the parties’ submissions and will grant Boehringer’s motion, with
provision for the parties’ counsel to meet and confer about confidentiality terms.
The 3B and 3C contentions are discoverable.
AbbVie and Amgen engaged in prelitigation disclosures and litigation under the
Biosimilar Price Competition and Innovation Act (“BPCIA”) starting in 2016. The case
concerned seven of the eight patents in suit in this case. Id. AbbVie and Amgen settled
the case in 2018. Id. at 3; see Doc. No. 138-2 (press release). The prelitigation
disclosures2 in the Amgen case spelled out the parties’ contentions regarding validity
and infringement.
Page references are to the page numbers assigned by the ECF system.
The disclosures at issue are so-called 3B and 3C statements, named after the BPCIA section calling for
the disclosures. See 42 U.S.C. § 262 (l)(3)(B)-(C).
1
2
AbbVie argues that the “BPCIA provides a carefully balanced mechanism for
parties to make a confidential and informal exchange of positions to facilitate potential
agreement on the scope of litigation.” Doc. No. 140 at 2-3 (“AV Opp.”). AbbVie also
argues that Boehringer fails to establish the “relevance and proportionality of the BPCIA
exchanges under Rule 26.” Id. at 3. AbbVie particularly objects to providing Amgen’s
contentions, questioning how Amgen’s contentions could be relevant, since they have no
tendency to make a fact of consequence to this litigation more or less likely. Id. at 4
(citing to Fed. R. Evid. 401).
The BPCIA requires a biosimilar applicant (such as Amgen, in the previous
litigation) to disclose confidential information about its drug to the reference product
sponsor (in both the Amgen case and in this one, AbbVie). 42 U.S.C. § 262 (l)(1)(B)(i),
(l)(2). The purpose is to permit the reference product sponsor to figure out which
patents it claims are infringed by the biosimilar drug. Id. at § 262 (l)(1)(D), (l)(2). The
disclosures by the biosimilar applicant are to be kept confidential and used by the
reference product sponsor only for the purpose intended under the statute. Id. at § 262
(l)(1)(C) and (D). The information may be disclosed with the consent of the biosimilar
applicant, which must not be unreasonably withheld. Id. at § 262 (l)(1)(C). Amgen has
consented to the disclosure sought by Boehringer, subject to court order and the
maintenance of confidentiality.3
3
Amgen’s counsel, in an email dated June 19, 2018, wrote that
Amgen agrees that AbbVie would not need Amgen’s permission to produce the (3)(B) and (3)(C)
statements in the BI Litigation, if ordered to do so by the Magistrate Judge, as long as AbbVie
complies with the requirements of the Protective Order entered in the earlier AbbVie v. Amgen
lawsuit, including by redacting any confidential Amgen information. Further, Amgen would not
object to the production of the (3)(B) and (3)(C) statements in the BI Litigation, if the Magistrate
Judge orders their production, as long as confidential Amgen information is redacted in
compliance with the earlier Protective Order. Amgen would expect AbbVie to give Amgen an
2
Once the biosimilar applicant’s information has been turned over to the reference
product sponsor, the sponsor must give the applicant a list of patents it claims are
infringed by the biosimilar. Id. at § 262 (l)(3)(A). The applicant then provides a claimby-claim, detailed explanation of its contentions about the patents that it argues are
invalid or not infringed (or both). Id. at 262 (l)(3)(B).4 The sponsor then provides the
applicant a detailed explanation of why the patents identified by the applicant under §
262 (l)(3)(B) are valid and infringed. Id. at § 262(l)(3)(C). These last two conflicting sets
of contentions – the so-called 3B and 3C contentions – are what Boehringer seeks. The
BPCIA has much to say about the confidentiality of the biosimilar applicant’s (Amgen)
information disclosed under 42 U.S.C. § 262(l)(1) but does not provide for separate or
additional confidentiality for the contentions required under § 262(l)(3)(B) and (C).
The 3C contentions by AbbVie are statements by a party that may be used against
the party, provided they are relevant. Fed. R. Evid. 801(d)(2)(A). Since seven of the eight
patents in suit were also part of the Amgen case, it is likely that the 3C contentions are
relevant, at least in part, under Fed. R. Evid. 401’s liberal standard of relevance.
The 3B contentions by Amgen likely are relevant to supply the context of the 3C
contentions. Producing the 3C contentions without the 3B contentions would be like
producing a transcript of one side of a telephone conversation, or producing the answer
to a complaint without the complaint. The exercise seems fruitless. Both sides of the
dialogue are relevant and admissible, for different reasons. If the party statement is
opportunity to review its redactions before producing the statements to BI to ensure compliance
with the Protective Order with respect to Amgen confidential information.
Doc. No. 138, Exhibit 7 (ECF 138-7 at 2). These are reasonable conditions.
4 The exchange of information can result in the parties dropping claims that they think are not worth
pursuing, in light of the additional information provided.
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relevant, it is admissible non-hearsay when used against the party making the
statement. Fed. R. Evid. 801(d)(2)(A). The other side of the dialogue is relevant and
admissible not for its truth, but because it makes the party statements understandable
by putting them in context. See United States v. Hendricks, 395 F.3d 173, 184 (3d Cir.
2005) (a cooperating witness’ side of a taped conversation was not hearsay because it
was not introduced for its truth, but to place the defendant’s side of the conversation in
context).
The 3B and 3C disclosures are reasonably relevant to this case. They can be
disclosed with minimal burden, provided reasonable confidentiality protections are
followed. The minimal burden of production is far outweighed by the potential
probative value of the disclosures to resolution of the issues in this case. See Fed. R. Civ.
Pro. 26(b)(1). AbbVie will produce the requested 3B and 3C disclosures, subject to the
terms of the current protective order entered in this case, and subject to its
confidentiality obligations under the protective order in the Amgen case, as described in
footnote 3, supra. The parties’ counsel will meet and confer to iron out the terms of
disclosure, which should include review by outside counsel only. If they cannot agree I
will impose terms.
The settlement agreements are discoverable.
Boehringer also moves to compel the production of settlement agreements that
AbbVie reached with Amgen, Samsung Bioepis, and Mylan, companies who seek to
market a biosimilar drug in competition with adalimumab. BI. Mot. at 2. I find that the
settlement agreements are likely to be relevant to Boehringer’s invalidity and
unenforceability defenses, are easily identifiable and producible without undue burden,
are within the control of AbbVie and not accessible to Boehringer, and are routinely
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produced in patent litigation, with adequate confidentiality protections. See Allergan,
Inc. v. Teva Pharmaceuticals USA, Inc., 2017 WL 132265, at *1 (E.D. Tex. Jan. 12, 2017)
(“Courts have frequently ordered the production of such agreements, subject to
appropriate guarantees of confidentiality[]”) (collecting cases); Fed. R. Civ. Pro. 26(b)(1)
(listing factors that must be considered when ruling on the scope of discovery). That is
not the end of the analysis, however.
AbbVie cites to the opinion in Spear v. Fenkell, 2015 WL 3947559, at *2 (E.D. Pa.
June 26, 2015), arguing that Boehringer has not borne its burden to make a
particularized showing that the settlement agreements are likely to be relevant to a
permitted purpose under Fed. R. Evid. 408. Rule 408(a) bars the introduction of
agreements, conduct, or statements made as part of compromise negotiations. The rule
excepts such evidence for “another purpose,” and provides examples, though the
examples are not meant to be exclusive. Fed. R. Evid. 408(b). Spear was an ERISA case
decided under Third Circuit law.5 There is a legitimate question whether the heightened
standard explained in Spear is applicable in this patent case, subject as it is to Federal
Circuit law. BI Mot. at 3 n.2 (citing to Blue Gentian, LLC v. Tristar Prods., Inc., 2017
WL 5203044 at *3 (D.N.J. Mar. 21, 2017) (“federal circuit law governs disputes over the
discoverability” of a settlement agreement in a patent case).
5
AbbVie misunderstands the holding in Spear. See AV Opp. at 6-7. Spear explained that the Second
Circuit requires proof that a settlement agreement is collusive before it will be admitted. 2015 WL
3947559, at *1 (citing to Grant Thornton v. Syracuse Sav. Bank, 961 F.2d 1042, 1046 (2d Cir. 1992)). That
is not the standard applied in Spear, which was drawn from District Court precedent within the Third
Circuit. See id. at *2 (“the ‘heightened’ and ‘particularized’ showing of relevance under Methacton Scho.
Dist. and Felicetti means that Stonehenge bears the burden of showing that the settlement agreement is
likely to be admissible for a permitted purpose, under Rule 408. The standard is less demanding than the
showing of collusion required under Grant Thornton and Mars Steel Corp.”).
5
Given the frequency with which courts have ordered the production of settlement
agreements in patent cases, see Allergan, 2017 WL 132265, at *1, and cases cited, it may
be that the discovery rule in the Federal Circuit is less demanding than that described in
Spear. Nevertheless, the Federal Circuit has rejected discovery of settlement agreements
where there has been no showing of the “materiality of the settlement agreement[,]”
being “mindful, as was the district court, of the policy in favor of protecting settlement
negotiations from being admitted as evidence, thus serving to encourage settlements.”
Advanced Cardiovascular Systems, Inc. v. Medtronic, Inc., 265 F.3d 1294, 1308 (Fed.
Cir. 2001) (citations omitted).
Boehringer’s main contention is that the settlement agreements are relevant to
the “‘nexus’ between the alleged commercial success of Humira and the allegedly
inventive features of the asserted patents.” BI Mot. at 6 (citing to Pfizer Inc. v. Apotex
Inc., 731 F. Supp. 2d 754, 759 (N.D. Ill. 2010)). Commercial success of a product
incorporating a patented invention can be used to show that the patented invention was
non-obvious. This would tend to favor the patent’s validity. There is no doubt that
Humira was commercially successful. But AbbVie must show more: that the patents in
suit – which do not include the original Humira patent – are part of the reason for
Humira’s success. The terms of the settlement agreements may be relevant to show
whether the patents in this case contributed materially to Humira’s commercial success.
Pfizer, 731 F. Supp. 2d at 759.
Boehringer also argues that the settlement agreements may be relevant to its
unclean hands defense. BI Mot. at 6. The unclean hands defense alleges that AbbVie
created a “patent thicket” of “overlapping and non-inventive patents for the purpose of .
. . delaying competition.” Id. (citation omitted). AbbVie denies that an unclean hands
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defense can comprehend concepts of anti-competitive behavior in this fashion, and
denies the substance of the claim, but the defense is pled and has not been the subject of
a motion to dismiss. There is precedent holding that a settlement agreement is
discoverable in a patent case when it is relevant to establish wrongful anti-competitive
behavior. See Key Pharmaceuticals, Inc. v. ESI-Lederle, Inc., 1997 WL 560131, at *3
(E.D. Pa. Aug. 29, 1997) (settlement agreements were discoverable in a patent case
where wrongful anti-competitive behavior was alleged).
Whether the settlement agreements will be admissible under Fed. R. Evid. 408
depends in large measure on the claims that wind up being tried, the theory of evidence
under which the settlement agreements are proffered, and whether the theory of
admissibility falls under the exclusionary provisions of Rule 408(a) or the admissible
purposes described in 408(b).6 Boehringer has made enough of a showing, at this point,
to warrant discovery of the settlement agreements.
AbbVie will produce the settlement agreements subject to the protective order
entered in this case, and subject to review by outside counsel only. I will not impose the
added layer of protection requested by AbbVie, creating a special cadre of lawyers who
alone are authorized to see the settlement agreements. Such a system promises to be
Whether evidence of commercial success – or its absence – goes to “prove or disprove the validity . . . of
a disputed claim” within the meaning of Rule 408 is a question that calls into play the divergent meanings
of “claim” in different legal contexts. Patent claims refer to something different than the ordinary meaning
of the word “claim” in the Rules of Procedure and Evidence, where the word is typically used to refer to
the allegations of a pleading. Additionally, the focus of Rule 408(a) is on the particular claim that was
settled, not future, similar claims. See Rule 408(a)(1) and (2) (referring to “the claim”) (emphasis
supplied). That does not mean the policy of Rule 408(a) should not be extended to similar future claims,
but the extension of that policy may clash with other policies emphasizing transparency in matters that
affect the public welfare. The duration of the monopoly granted to an important and widely used
medication may implicate such a policy. As for Rule 408(b), Boehringer seeks to prove “undue delay,” not
to “negat[e]” a claim of undue delay, as permitted in Rule 408(b). Allegations of a scheme to delay the
introduction of a biosimilar drug may come within the meaning of the exception, but the argument is not
so routine or obvious that its correctness should be assumed without examination. Resolution of these
admissibility issues will benefit from a better defined record during motions in limine or trial.
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unworkable. See Allergan, 2017 WL 132265, at *2 (“Creating a group of ‘litigation’
counsel and a separate group of ‘settlement’ counsel” should only be done in cases of
“exceptional need”). The parties will meet, confer, and agree about the details of
disclosure. If the parties cannot fashion agreeable confidentiality protections, they will
advise me by letter and I will impose terms.
BY THE COURT:
s/Richard A. Lloret
RICHARD A. LLORET
U.S. MAGISTRATE JUDGE
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