ELI LILLY AND COMPANY v. DR. REDDY'S LABORATORIES, LTD. et al
ENTRY and ORDER on Motion to Strike Portions of Plaintiff's Expert Reports [doc. 74]: DRL's Motion to Strike Portions of Plaintiff's Expert Reports [doc. 74] is granted. The f ollowing portions of the Chabner Report, dated March 21, 2017, attached as Appendix 1 to the sealed proposed order found at ECF No. 76, are stricken. See Entry. It is ordered that Lilly not argue or introduce evidence regarding the stricken infringement contentions, opinions, and underlying bases therefor. Signed by Magistrate Judge Denise K. LaRue on 4/28/2017. (SWM)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
ELI LILLY AND COMPANY,
DR. REDDY’S LABORATORIES, LTD.,
Entry and Order on Motion to Strike Portions of Plaintiff’s Expert Reports [doc. 74]
Defendants have moved for an order striking portions of two of Plaintiff’s expert
reports—the Expert Report of Bruce A. Chabner, M.D., and the Expert Report of Rodolfo
Pinal, Ph.D.—and prohibiting Plaintiff from introducing evidence regarding the stricken
portions of the reports. Defendants contend that certain infringement theories were first
disclosed in the expert reports in violation of the Patent Case Management Plan
(“PCMP”) as well as the Federal Rules of Civil Procedure and Local Rules. The portions
of the reports at issue concern all opinions and bases therefor directed to literal
infringement, all opinions and bases therefor concerning infringement under the doctrine
of equivalents that are beyond the scope of those set forth in Plaintiff’s Preliminary
Infringement Contentions (“Infringement Contentions”), and all opinions and bases therefor
concerning inducement of infringement and contributory infringement that are beyond
the scope of those set forth in the Infringement Contentions.
Plaintiff opposes the motion, arguing that it did not violate the PCMP or any rule.
Plaintiff asserts that its Infringement Contentions gave notice that it was asserting all of the
theories of infringement identified in the expert reports. Plaintiff argues that the
contentions served on September 6, 2016 were preliminary, that it was entitled to develop
its infringement case through discovery, and that it properly did so. Plaintiff also argues
that there is no basis to strike any portion of its expert reports; that Defendants have not
been prejudiced; and even if Defendants were prejudiced, the prejudice can easily be
cured. For the reasons that follow, the undersigned finds that the motion to strike should
Eli Lilly and Company (“Lilly”) commenced this patent-infringement action on
February 5, 2016, against Dr. Reddy’s Laboratories, Ltd. and Dr. Reddy’s Laboratories,
Inc. (collectively “DRL”). DRL had filed a New Drug Application (NDA) with the U.S.
Food and Drug Administration, seeking approval to manufacture and sell its Pemetrexed
for Injection 100 mg/vial and 500 mg/vial products prior to the expiration of U.S. Patent
No. 7,772,209 (“the ‘209 patent”). Lilly believes that DRL’s NDA Products will be
marketed as competing products to ALIMTA®, a chemotherapy agent developed and
distributed by Lilly and used for treatment of cancer. Lilly alleges that DRL’s filing of
NDA No. 208297 and the use of the product described therein infringe its ‘209 patent”.
DRL alleges that the patent is invalid. Lilly received DRL’s Notice Letter relating to NDA
No. 208297 on December 29, 2015. A thirty-month stay of approval of NDA No. 208297
is in effect until June 29, 2018.
On June 20, 2016, the undersigned held the Initial Pretrial Conference in the case,
discussing discovery, case management, and other matters. The parties expressed a
desire to have this matter resolved before the approval of DRL’s NDA 208297 and the
parties’ proposed case management deadlines were designed with the thirty-month stay
of approval in mind. Yet, the parties disputed the appropriate deadline for infringement
contentions. Lilly proposed an October 5, 2016 deadline, whereas DRL proposed a July
15, 2016 deadline. Lilly acknowledged the parties’ interests in early disclosure of
contentions; DRL asserted it was important to discover Lilly’s infringement theories as
early as practicable. DRL argued for resolution of this case before the expiration of the
stay in order to avoid a potential “launch at risk” scenario. They also argued that the
specific nature of Lilly’s infringement theories (which were unknown at that time),
including whether Lilly was alleging literal infringement or infringement under the
doctrine of equivalents, would impact discovery. More specifically, DRL asserted that
the infringement theories would affect the categories of documents requested and the
number and type of experts they would need to obtain. After much discussion, the
undersigned proposed a September 6, 2016 infringement-contentions deadline.
On July 8, 2016, the undersigned approved as amended the parties PCMP, setting
September 6, 2016 as the deadline for Lilly’s infringement contentions and DRL’s
invalidity contentions. [See Patent Case Management Plan, Section IV.B, doc. 45 at 5.] The
PCMP set May 15, 2017 as the deadline for all liability discovery and stated: “The parties
should focus their early discovery in a manner that prepares them to respond timely to
discovery requests concerning their preliminary infringement and invalidity contentions.”
[Id. at 4-5 (emphasis added).] The PCMP set June 16, 2017 as the dispositive motion
deadline and stated that “the party with the burden of proof must file a statement of the
claims or defenses it intends to prove at trial” within 14 days after the liability discovery
deadline. [Id. at 7, 8.] Further, the PCMP said that “[u]pon approval, this Plan constitutes
an Order of the Court. Failure to comply with an Order of the Court may result in
sanctions … as provided under Rule 16(f) ….” [Id. at 13.] The parties having moved for
and having been granted enlargements of time, the liability discovery deadline is now
June 20, 2017, the dispositive motion deadline is July 14, 2017, and the case is set for trial
on January 29, 2018.
On September 6, 2016, Lilly filed its Infringement Contentions. [Doc. 48.] Lilly
contended that DRL infringes each of claims 1-22 of the ‘209 patent, asserting that “[t]he
use of DRL’s NDA Products meets all limitations of each of the asserted claims, either
literally or under the doctrine of equivalents.” [Infringement Contentions, doc. 48 at 1.]
Lilly asserted that DRL is liable as a direct infringer as well as “for active inducement of
infringement and/or for contributory infringement.” [Id. at 1-2.] A few weeks later, on
September 23, 2016, DRL advised Lilly that its contentions were deficient, focusing on the
doctrine of equivalents. [Mot. Strike Portions of Pl.’s Expert Reports, Ex. A, doc. 74-1.] DRL
did not mention any other theory of alleged infringement.
In a letter dated November 29, 2016, Lilly responded to DRL’s claim that its
infringement contentions were deficient.
The response repeatedly referenced the
doctrine of “equivalents” or “equivalence” and used terms such as “equivalent
infringement” and “equivalency analysis.” The letter stated:
As the claim chart reflects, setting aside the question of the salt form of the
pemetrexed, each step of the claimed methods is carried out literally; the only
remaining question is whether the administration of DRL’s NDA product is
equivalent, in the context of the claimed methods, to administering pemetrexed
disodium, which is what the claims recite.
[Mot. Strike, Ex. B, doc. 74-2 at 1.] The letter did not address infringement under any
theory other than the doctrine of equivalents. Lilly wrote that there was no “need for
Lilly to supplement its initial infringement contentions” but “it will disclose further
evidence on which it intends to rely consistent with the Case Management Plan,
including in conjunction with expert discovery.” [Id. at 3.]
On March 21, 2017, Lilly provided DRL with the Expert Report of Bruce A.
Chabner, M.D., and the Expert Report of Rodolfo Pinal, Ph.D. The reports go beyond the
claims of infringement under the doctrine of equivalents, asserting literal infringement,
inducement of infringement, and contributory infringement as well as new opinions of
infringement under the doctrine of equivalents that were not disclosed in the Infringement
Contentions. The Chabner Report contains: (1) a literal infringement analysis and opinion
at Exhibit C (a Claim Chart) to the report and in paragraphs 38-59 of the report at pages
15-28 and literal infringement-related statements in the report (see, e.g., paragraphs 60,
63, and 80); (2) an “Inducement of and Contribution to Infringement” section, comprised
of paragraphs 81 and 82 at pages 39-40 of the report, as well as a portion of paragraph 60;
(3) a different Claims Chart attached as Exhibit C to the report in support of Lilly’s new
theories; and (4) in paragraphs 60-61, 64-73, 77-80, new theories under the doctrine of
equivalents that are outside the scope of Lilly’s Infringement Contentions. The Pinal Report
contains: (1) a section entitled, “DRL’s NDA Products Administered with Saline Literally
Meets the Pemetrexed Disodium Limitation in the Claims of the ‘209 Patent,” comprised
of paragraphs 72 and 73 at page 30 of the report; and (2) a partial doctrine of equivalents
analysis under the function-way-result test in paragraphs 15 and 16 at pages 4-5.
DRL’s counsel contacted Lilly’s counsel and asserted that Lilly’s expert reports
violated the PCMP by raising new infringement contentions not disclosed in the
Infringement Contentions. The parties attempted to resolve their dispute in a telephone
conference, but were unable to do so.
On January 9, 2017, the parties filed a joint motion for extension of time for
discovery and related deadlines, including the deadline for expert reports. The motion
was granted, and the deadline for opening expert reports was extended to March 7, 2017.
The parties moved for another extension of the discovery and related deadlines, and their
motion was granted, extending the deadline for opening expert reports to March 21, 2017.
Lilly never sought a modification of the infringement contentions deadline. Nor
has it sought leave to amend its Infringement Contentions.
On March 31, 2017, DRL filed its Motion to Strike. The undersigned attempted to
resolve the parties’ dispute informally during a telephonic conference but was unable to
do so. Lilly has filed a response to the motion, and DRL has filed its reply. The motion
has been referred to the undersigned for ruling.
A court scheduling order “controls the course of the action unless the court
modifies it.” Fed. R. Civ. P. 16(d). Federal Rules of Civil Procedure 16(b) and 6(b) govern
motions to modify scheduling orders filed after the deadline sought to be modified has
expired. “A schedule may be modified only for good cause and with the judge’s
consent.” Fed. R. Civ. P. 16(b)(4); see Trustmark Ins. Co. v. Gen. & Cologne Life Re of Am.,
424 F.3d 542, 553 (7th Cir. 2005) (“To amend a pleading after the expiration of the trial
court’s Scheduling Order deadline …, the moving party must show ‘good cause.’”). The
“good cause” standard focuses on the party’s diligence. Trustmark Ins. Co., 424 F.3d at
553. Further, “[w]hen an act may or must be done within a specified time, the court may,
for good cause, extend the time … on motion made after the time has expired if the party
failed to act because of excusable neglect.” Fed. R. Civ. P. 6(b)(1)(B). Under Rule 16 “the
court may issue any just orders, including those authorized by Rule 37(b)(2)(A)(ii)-(vii)”
for the failure “to obey a scheduling or other pretrial order.” Fed. R. Civ. P. 16(f)(1)(C).
Such orders include striking expert witness testimony and portions of an expert report
that violate the court’s scheduling order. Fed. R. Civ. P. 37(b)(2)(A)(ii).
“[I]nfringement contentions are intended to frame the scope of the case so that the
parties can conduct appropriate discovery.” Robert Bosch LLC v. Snap-On Inc., No. 1211503, 2013 WL 673718, at *3 (E.D. Mich. Feb. 25, 2013) (quoting Realtime Data, LLC v.
Packeteer, Inc., No. 6:08cv144, 2009 WL 2590101, at *5 (E.D. Tex. Aug. 18, 2009)).
Infringement contentions should “‘provide fair notice of the scope of the plaintiff’s
infringement theory.’” Trading Techs. Int’l, Inc. v. CQG, Inc., No. 05-cv-4811, 2014 WL
4477932, at *2 (N.D. Ill. Sept. 10, 2014) (quoting Fujitsu Ltd. v. Tellabs Operations, Inc., No.
08 C 3379 & 09 C 4530, 2012 U.S. Dist. LEXIS 101766, *25 (N.D. Ill. July 23, 2012)). Thus,
“‘infringement contentions must set forth particular theories of infringement with
sufficient specificity to provide defendants with notice of infringement’” and expert
“‘reports may not introduce theories not previously set forth in infringement
contentions.’” Id. Mere reference to a theory in infringement contentions may not act as
a placeholder for later clarification of the theory. Trading Techs. Int’l, 2014 WL 4477932,
at *3-4; ASUS Computer Int’l v. Round Rock Research, LLC, Case No. 12-cv-02099 JST (NC),
2014 WL 1463609, at *3 (N.D. Cal. Apr. 11, 2014) (placeholder language stating that “to
the extent that any claim element is found not to be literally embodied in the Accused
Instrumentalities, [defendant] contends that the Accused Instrumentalities embody such
claim elements under the doctrine of equivalents” was insufficient to assert infringement
under the doctrine of equivalents and defendant’s experts could not assert that theory).
Courts have stricken theories of infringement presented in expert reports that were
not previously disclosed in infringement contentions. See, e.g., Howmedica Osteonics Corp.
v. Zimmer, 822 F.3d 1312, 1324-25 (Fed. Cir. 2016) (concluding district court did not abuse
its discretion in applying local patent rules to preclude theory that was not disclosed in
infringement contentions); Baltimore Aircoil Co. v. SPX Cooling Techs. Inc., Civ. No. CCB13-2053, 2016 WL 4426681, at *15 (D. Md. Aug. 22, 2016) (granting motion to strike
portions of expert report regarding infringement under doctrine of equivalents that was
not disclosed in infringement contentions); Trading Techs. Int’l, 2014 WL 4477932, at *3-4,
*5 (striking doctrine of equivalents argument in expert report and precluding reliance on
theories and evidence related to stricken portions where infringement contentions
addressed only literal infringement). “The threshold question in deciding whether to
strike an expert report is whether the expert has permissibly specified the application of
a disclosed theory or impermissibly substituted a new theory altogether.” Finjan, Inc. v.
Proofpoint, Inc., No. 13-cv-05808-HSG, 2016 WL 612907, at *1 (N.D. Cal. Feb. 16, 2016).
Lilly contends that the authorities cited by DRL where courts struck portions of
expert reports that relied on theories not disclosed in the infringement contentions are
inapposite because the infringement contentions at issue were “final” or “supplemental”
and were served after the close of discovery. While discovery was closed when the new
theories were presented in the expert reports, which is an important consideration, it is
not the only relevant consideration. The crux of the matter was the prejudice to the
opposing party. Here, although discovery is not yet closed, as discussed later in this
Entry, the prejudice to DRL in allowing Lilly to proceed on its new infringement theories
Lilly also argues that DRL’s authorities are inapplicable because those cases
involved violations of local patent rules or court orders regarding the timing of
infringement contentions and supplementation thereof. This distinction is of no practical
or legal importance. Here, the Court entered an order approving the PCMP as amended,
setting the deadline for disclosure of infringement contentions. As a court scheduling
order, the order controls the course of this case. Lilly offers no persuasive reason why a
violation of the Court’s scheduling order should be treated less seriously than a violation
of a local patent rule. See O2 Micro Int’l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355,
1363 (Fed. Cir. 2006) (stating that local patent rules “are essentially a series of case
management orders”). Though the PCMP does not describe the infringement contentions
due on September 6, 2016, as “final”; no language in the PCMP provides that the
contentions are “preliminary” either. The text of the PCMP is clear: Lilly’s infringement
contentions were due September 6, 2016. The PCMP did not contemplate separate
“preliminary” and “final” contentions, but rather, “infringement contentions.”
Review of the Infringement Contentions confirms DRL’s assertion that the
contentions address only the doctrine of equivalents. [See, e.g., Infringement Contentions,
doc. 48 at 2 (“There is an insubstantial difference between administering pemetrexed
ditromethamine and administering pemetrexed disodium in accordance with claim 1.”)]
In addition, counsel’s November 29, 2016 letter indicated that Lilly’s contentions disclose
infringement under the doctrine of equivalents; it does not even hint at any other theory
of infringement. Thus, the letter reinforced the DRL’s view that Lilly was asserting
infringement under the doctrine of equivalents only, and not under any other theory.
Lilly offers that its letter was responding to DRL’s own letter that only raised the
deficiency of Lilly’s infringement contentions under the doctrine of equivalents. But
contrary to Lilly’s suggestion, its Infringement Contentions did not plainly and sufficiently
present the theories of literal infringement, inducement or contribution. While the
Infringement Contentions state that “[t]he use of DRL’s NDA Products meet all limitations
of each of the asserted claims, either literally or under the doctrine of equivalents” [doc.
48 at 1], this conclusory assertion in an introductory paragraph of the contentions is
insufficient to assert a theory of literal infringement, particularly where the
accompanying claim chart fails to raise literal infringement. See, e.g., Baltimore Aircoil Co.,
2016 WL 4426681, at *15 (“Allowing [plaintiff] to offer specific opinions under the
doctrine of equivalents theory after it disclosed only its general belief that all claims were
infringed under the doctrine … would unfairly disadvantage [defendant] by subjecting
it to a ‘shifting sands approach’ to litigation.”). The same is true with regard to mere
references in the introductory paragraph to theories of literal infringement, active
inducement of infringement, and contributory infringement; these theories are asserted
with insufficient particularity to give DRL fair notice of the scope of Lilly’s infringement
Lilly’s Infringement Contentions purport to “reserve the right to modify, amend,
or otherwise supplement these contentions as additional information becomes available
during the court of fact and expert discovery.” [Doc. 48 at 1.] But Lilly has no right to
modify or amend its contentions after the deadline for filing infringement-contentions
has expired. See, e.g., Baltimore Aircoil Co., 2016 WL 4426681, at *16 (rejecting the argument
that plaintiff reserved the right to amend its infringement contentions where local rules
required consent or good cause and leave of court for amendments); Howmedica Osteonics
Corp. v. Depuy Orthopaedics, Inc., Civil Action No. 11-6498 (SDW), 2014 WL 6675923, at *2,
*4-5 (D.N.J. Nov. 24, 2014) (concluding that general reservation
contentions of right to pursue theory under doctrine of equivalents was insufficient under
local rules), aff’d sub nom., Howmedica Osteonics Corp. v. Zimmer, 822 F.3d 1312 (Fed. Cir.
2016). Because the infringement-contentions deadline was entered as part of the Court’s
Rule 16(b) scheduling order, Lilly could modify or amend its contentions only upon first
showing “good cause” and with the Court’s consent. See Fed. R. Civ. P. 16(b)(4); S.D. Ind.
And since Lilly’s expert reports effectively amend its infringement
contentions after the time for filing contentions has expired, Federal Rule of Civil
Procedure 6(b) further requires a motion and “excusable neglect.” Lilly has not shown
good cause or excusable neglect. And Lilly has never requested the Court’s permission
to amend or modify its infringement contentions.
As for Lilly’s right to supplement its contentions, Federal Rule of Civil Procedure
26(e) imposes a duty to supplement Rule 16 disclosures in a timely manner. Fed. R. Civ.
P. 26(e)(1); see Teashot LLC v. Green Mountain Coffee Roasters, Inc., Civil Action No. 12-cv0198-WJM-KMT, 2014 WL 485876, at *6-7 (D. Colo. Feb. 6, 2014) (explaining that a party’s
infringement contentions subject to the scheduling order “operated as the legal and
functional equivalent of responses to interrogatories, and were therefore subject to Rule
26(e)’s requirements”). Yet, Lilly’s expert reports go way beyond supplementation of the
Infringement Contentions; they seek to assert entirely new theories of infringement. And
to the extent the expert reports supplement the contentions as to the doctrine of
equivalents, Lilly has not properly supplemented its Infringement Contentions. Instead, it
attempts to do so through a side door, which is improper.
Lilly argues its Infringement Contentions were only “preliminary.” After all, it says,
the PCMP identified its contentions as “preliminary” and the contentions themselves are
titled, “Preliminary Infringement Contentions.” While the PCMP mentioned “preliminary
infringement and invalidity contentions” in the first section concerning discovery and
related deadlines, the use of the word “preliminary” appears to be a carryover from
another, possibly earlier, version of the Court’s standard PCMP. The use of the term
“preliminary” in the section preceding the section addressing the dispute over the
deadline for infringement contentions does not convey the intent that the contentions be
only preliminary. Furthermore, the Court inserted language regarding the deadline for
infringement contentions that does not refer to the contentions as “preliminary.” This
language provides even greater clarity. Moreover, DRL has pointed to other patent case
management plans that did set deadlines for both preliminary contentions and final
contentions. [See, e.g., Reply Brief, Ex. H at 4-5, 9, doc. 92-4 at 4-5, 9.] Some of these patent
case management plans were entered in cases in which Lilly is a party. The other case
management plans show that the parties and the Court allow for preliminary contentions
when they intend for the contentions to be preliminary. But the PCMP in this case does
not make a distinction between preliminary and final contentions. The September 6, 2016
deadline for infringement contentions was the only infringement-contentions deadline
contemplated by the Court’s order.
That Lilly chose to identify its infringement contentions as “Preliminary” is not
controlling where the order does not identify the contentions as “preliminary.” The fact
that DRL referred to the contentions as “Preliminary Infringement Contentions” is not
controlling: DRL was simply using Lilly’s own terminology. Lilly argues that DRL took
a position in its March 10 letter to counsel that is inconsistent with its position here: DRL
thought Lilly should supplement its contentions. Yet, an earlier request for
supplementation does not preclude DRL from arguing that the expert reports improperly
and belatedly introduce new infringement theories. And the fact that DRL could have
filed a motion seeking to compel Lilly to supplement its contentions, but did not do so,
does not relieve Lilly of any consequences coming from its late disclosures after the
deadline for infringement contentions has passed. See Teashot LLC, 2014 WL 485876, at *7
(noting that defendants were not required to complain about Plaintiff’s contentions or
serve discovery related to plaintiff’s infringement theories).
Lilly attempts to fault DRL for not surmising that Lilly would assert theories of
infringement other than that specifically raised in its Infringement Contentions. DRL had
a right to believe that the Infringement Contentions asserted all of Lilly’s theories it was
pursuing in this case. See Teashot LLC, 2014 WL 485876, at *7 (“A party has the right to
assume that opposing counsel is acting with diligence, and in compliance with the
Federal Rules of Civil Procedure, during discovery. Because Plaintiff was already ordered
… to provide its infringement contentions, and required by Rule 26€ to timely
supplement the same, Defendants were justified in believing that Plaintiff’s disclosures
contained all of the infringement theories it was pursuing in the case.”). Besides, if DRL
who was not a party to Teva Parenteral Medicines litigation should have divined that Lilly
would assert the same theories it raised in that litigation, then Lilly who was the plaintiff
in that litigation should have known it would raise all those same theories in this case.
Also, DRL’s awareness of that prior litigation may explain why DRL could have thought
(as Lilly argues) that DRL would receive “final” contentions early in the discovery phase.
Further, Teva Parenteral Medicines involved the defendants’ generic version of Lilly’s
ALIMTA®, whereas this case does not involve a generic—DRL’s product is pemetrexed
ditromethamine, not pemetrexed disodium. Thus, in contrast with the Teva Parenteral
Medicines, this case has been about infringement under the doctrine of equivalents.
Lilly asserts that it served its Infringement Contentions near the beginning of
discovery and long before it had received the information necessary to develop that
information with its experts and build its infringement case. (More on that later.) Yet
Lilly still has not sought leave to amend its Infringement Contentions at any time. Its failure
to have done so by even this late point in time suggests a lack of diligence on Lilly’s part.
As for Lilly’s argument that it has not sought to alter a scheduling order and it has
complied with the scheduling order, this argument elevates form over substance. With
its expert reports, Lilly attempts to introduce new theories of infringement into the case,
and does so without seeking leave to amend its infringement contentions. Because the
deadline for infringement contentions has long passed, good cause and excusable neglect,
in addition to the court’s consent, are required for Lilly to assert new theories that go
beyond those timely identified in the Infringement Contentions.
Lilly contends that absent prior notice to a party that infringement contentions
cannot be amended, a court errs in precluding a party from amending its contentions.
But MIT v. Abacus Software, 462 F.3d 1344 (Fed. Cir. 2006), cited as support, is inapposite.
This case is unlike MIT where, after the plaintiff had filed its preliminary infringement
contentions, the court ordered that the preliminary contentions were deemed final. Id. at
1358. The court concluded that the plaintiff was not given sufficient notice that its
preliminary contentions would be deemed final or that it could only update them for
good cause. Id. at 1359. Unlike MIT, Lilly’s contentions were not “preliminary” and
preliminary contentions were not deemed “final” after the fact. The PCMP and Federal
and Local rules provided Lilly with sufficient notice that modifying or amending their
infringement contentions would require a showing of “good cause.”
The Chabner and Pinal reports seek to introduce new theories of infringement not
properly disclosed in the Infringement Contentions. Lilly’s belated disclosure of these new
theories violated the PCMP. Thus, the Court must decide the appropriate sanction for
the failure to disclose these new theories of infringement.
In deciding whether to impose sanctions for a discovery violation, a district court
should consider: “(1) the prejudice or surprise to the party against whom the evidence is
being offered; (2) the ability of the party to cure the prejudice; (3) the likelihood of
disruption to the trial; and (4) the bad faith or willfulness involved in not disclosing the
evidence at an earlier date.” Judson Atkinson Candies, Inc. v. Latini-Hohberger Dhimantec,
529 F.3d 371, 386 (7th Cir. 2008) (quoting David v. Caterpillar, Inc., 324 F.3d 851, 857 (7th
Cir. 2003)). Although Judson Atkinson Candies addressed the imposition of sanctions for
a Rule 45 violation, the factors identified apply equally to the consideration of whether
sanctions are appropriate for other discovery rule violations. See Eli Lilly and Co. v. Teva
Parenteral Medicines, Inc., No. 1:10-cv-01376-TWP-DKL, 2015 WL 735724, at *3 (S.D. Ind.
Feb. 20, 2015) (applying factors to exclude expert testimony and evidence relating to the
infringement under the doctrine of equivalents on the ground that report failed to comply
with Rule 26(a)).
DRL contends that they are prejudiced by Lilly’s belated infringement contentions
in several ways. First, they argue that they formulated their defense strategy, discovery
plan, expert work, and case preparation based on the Infringement Contentions and
counsel’s representations that the contentions were sufficient under the doctrine of
equivalents. DRL asserts that allowing Lilly to augment its infringement theories at this
stage in the proceedings would require DRL to undertake additional discovery, including
finding new experts, with an enlarged deadline for discovery, and DRL would incur
substantial additional expenses. An enlargement of the discovery deadline, DRL argues,
would require extension of other case management deadlines, including the deadline for
expert disclosures and reports. DRL submits that even without additional time for
discovery, because of the new theories advanced in the expert reports, the expert
discovery deadlines need to be enlarged by at least sixty days. Most importantly, DRL
asserts that they have a great interest in resolving this action within the thirty-month
Hatch-Waxman Act stay. DRL maintains that Lilly’s late disclosure of its new contentions
jeopardizes the ability to resolve this action within the stay, thus exposing DRL to
substantial harm including a “launch at risk” scenario, and a modification of the case
management deadlines cannot avoid this risk of harm. The deadlines for expert reports
has already been extended—twice—at Lilly’s request but with DRL’s consent. [See docs.
60 & 67.]
Lilly argues that it served its expert reports months before the close of fact and
expert discovery and that under the PCMP, a party need not provide a statement of its
claims and defenses it intends to prove at trial until after the close of discovery. The
statement of claims and defenses to be proven at trial may contemplate refinement of the
theories of infringement. But greater clarity is required to transform this deadline into a
deadline for infringement contentions.
Furthermore, “infringement contentions are
intended to frame the scope of the case so that the parties can conduct appropriate
discovery.” Robert Bosch, 2013 WL 673718, at *3. Springing the new infringement theories
on DRL so close to the discovery deadline may deprive DRL of the full opportunity to
conduct appropriate discovery before the deadline. According to Lilly, nothing prevents
DRL from taking more discovery and serving additional expert reports; the fact and
expert discovery deadline is not until June 20, 2017. Lilly asserts that DRL had not taken
a single deposition or filed a single expert report when they filed their motion to strike.
Lilly also maintains that there is sufficient time to extend the discovery deadline and that
the trial date and timeline for resolving this case would not be jeopardized.
However, the undersigned agrees that DRL will suffer substantial prejudice from
Lilly’s belated disclosure of new infringement contentions. Because of the late disclosure,
DRL will be forced to choose between rushed discovery related to the new contentions,
in the event the June 20, 2017 fact and expert discovery deadline is held firm, or an
enlargement of the discovery deadline and other case management deadlines, including
the dispositive motion deadline of July 14, 2017. The new contentions will require DRL
to find and retain additional experts and conduct other appropriate discovery. It seems
that the only way for DRL to accomplish this within the current discovery deadline would
be with undue haste, posing a risk of reduced quality of expert opinions. Enlargements
of the discovery and other deadlines would, undoubtedly, jeopardize the January 2018
trial setting. And it follows from any continuance of the trial setting—a setting picked to
allow for resolution of this case before the expiration of the thirty-month stay—that
resolution before the expiration of the stay is put in peril. Of course, it is reasonable to
expect post-trial briefs and filings that will all have to be addressed by the Court in order
to resolve the case. That all takes time. Lilly underestimates how much time is needed
to allow for a thoughtful, informed, and correct decision in the case. And there simply is
no way to cure the prejudice—enlarging the remaining deadlines could alleviate the
prejudice caused by hasty discovery, but only with the trade-off of jeopardizing the hopes
of resolving this case before the end of the stay. Either way, DRL suffers substantial
Lilly claims there was no bad faith on its part—that it developed the “new”
theories during fact discovery, working with its experts and disclosed them promptly. It
maintains that the analysis in its expert reports is based on confidential and other
information provided by DRL through discovery as well as testimony from a witness
deposed in March 2017. The undersigned’s review of the cited portions of the expert
reports [see Chabner Report, doc. 75, at 10-12, 17-22, 30-31, 39-40; Pinal Report, doc. 75 at 4762], however, reveals that Lilly’s new theories are based on DRL’s labeling. The labeling
was disclosed to Lilly on May 26, 2016, as part of DRL’s NDA. Although the labeling has
been updated and Dr. Chabner cites the updated labeling produced September 5, 2016,
there has been no showing that the two labels are different in any relevant respect. And
Dr. Pinal’s references to documents produced after the September 6, 2016 deadline and
testimony from the Veerender deposition do not appear to have been critical to Dr. Pinal’s
conclusions regarding whether pemetrexed disodium and pemetrexed ditromethamine
are equivalent in the context of the method of administration claimed in the ‘209 patent
and whether both substances are ionic salts that dissociate in solution. [See Pinal Report,
doc. 75 at pages 17-23. Thus, Lilly should have disclosed its new theories at an earlier
time and had no justification for waiting until filing its expert reports.
Therefore, the undersigned finds that the Motion to Strike should be granted.
DRL’s Motion to Strike Portions of Plaintiff’s Expert Reports [doc. 74] is granted. The
following portions of the Chabner Report, dated March 21, 2017, attached as Appendix 1
to the sealed proposed order found at ECF No. 76, are stricken:
(1) The literal infringement analysis and opinion at Exhibit C (a Claim Chart)
to the report and in paragraphs 38-59 at pages 15-28 and literal infringementrelated statements in the report (see, e.g., ¶¶ 60, 63, and 80);
(2) The “Inducement of and Contribution to Infringement” section, comprised
of paragraphs 81 and 82 at pages 39-40 of the report, as well as a portion of
(3) Portions of the Claims Chart attached as Exhibit C to the report in support
of Lilly’s new theories; and
(4) In paragraphs 60-61, 64-73, 77-80, new theories under the doctrine of
equivalents that are outside the scope of Lilly’s Infringement Contentions.
The following portions of the Pinal Report, dated March 21, 2017, attached as Appendix
II to the sealed proposed order found at ECF No. 76 are stricken:
(1) The partial doctrine of equivalents analysis under the function-way-result
test in paragraphs 15 and 16 at pages 4-5; and
(2) The section entitled, “DRL’s NDA Products Administered with Saline
Literally Meets the Pemetrexed Disodium Limitation in the Claims of the ‘209
Patent,” comprised of paragraphs 72 and 73 at page 30.
These portions of the expert reports are highlighted in green in Appendices I and II found
at ECF No. 76.
It is ordered that Lilly not argue or introduce evidence regarding the stricken
infringement contentions, opinions, and underlying bases therefor.
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