JAZZ PHARMACEUTICALS, INC. v. ROXANE LABORATORIES, INC.
Filing
202
OPINION. Signed by Judge Esther Salas on 2/28/2013. (nr, )
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
-------------------------------------------------------------- X
:
JAZZ PHARMACEUTICALS, INC.
:
:
Plaintiff,
:
:
v.
:
:
ROXANE LABORATORIES, INC.
:
:
Defendant.
:
-------------------------------------------------------------- X
Civil Action: 10-6108 (ES)
OPINION
SALAS, DISTRICT JUDGE
I.
Introduction
Pending before this Court is an appeal of Magistrate Judge Cathy Waldor’s July
30, 2012 Order (the “July 30th Order”) denying Defendant’s motion for leave to amend its
Local Patent Rule 3.7 Initial Invalidity and Non-Infringement Contentions. (D.E. No.
143, Defendant’s Brief in Support of its Appeal (“Def. Br.”)). The Court has considered
the submissions made in support of and in opposition to the instant motion, and decides
the motion without oral argument, pursuant to Federal Rule of Civil Procedure 78. For
the reasons that follow, the Court affirms the July 30th Order.
II.
Background
As Magistrate Judge Waldor detailed the relevant facts in her Opinion (D.E. No.
136, Opinion (“Op.”)), the Court provides background here in summary fashion.
Defendant Roxane Laboratories, Inc. (“Defendant” or “Roxane”) appeals
Magistrate Judge Waldor’s Opinion denying Defendant’s motion for leave to supplement
its invalidity contentions, alleging that the Opinion and July 30th Order are based on clear
1
error and are contrary to law. (D.E. No. 143-1, (Def. Br.) at 2). Specifically, Defendant
Roxane argues that Judge Waldor committed clear error in finding that (a) Roxane did
not have good cause for supplementing its invalidity contentions; (b) Roxane did not
make a timely application to the Court; and (c) Jazz would be unduly prejudiced by
Roxane’s supplementation. (Id.). Further, Roxane alleges that Judge Waldor erred in
finding that Roxane’s proposed materials were not prior art. (Id.). Finally, Roxane
contends that Judge Waldor misapplied the law in applying the Local Patent Rules of this
District. (Id. at 15-16).
In opposition, Plaintiff Jazz Pharmaceuticals, Inc. (“Plaintiff” or “Jazz”) argues
that Judge Waldor did not err in finding that (a) Roxane was not diligent in seeking to
amend its invalidity contentions; (b) Roxane could not show good cause to permit the
amendment; (c) Roxane’s request to amend was untimely; (d) allowing an amendment
would be prejudicial to Jazz; and (e) Roxane failed to provide sufficient evidence that the
disputed materials qualify as prior art. (D.E. No. 146, Plaintiff’s Reply Brief in
Opposition of Appeal) (“Pl. Rep. Br.”) at 1).
III.
Legal Standard
A United States Magistrate Judge may hear and determine any [non-dispositive]
pretrial matter pending before the Court pursuant to 28 U.S.C. § 636(b)(1)(A). The
district court will only reverse a magistrate judge's decision on these matters if it is
"clearly erroneous or contrary to law." 28 U.S.C. § 636(b)(1)(A); Fed. R. Civ. P. 72(a);
L. Civ. R. 72.1(c)(1)(A). Therefore, "this Court will review a magistrate judge's findings
of fact for clear error." Lithuanian Commerce Corp., v. Sara Lee Hosiery, 177 F.R.D.
205, 213 (D.N.J. 1997) (citing Lo Bosco v. Kure Eng'g Ltd., 891 F. Supp. 1035, 1037
2
(D.N.J. 1995)).
Under this standard, a finding is clearly erroneous when "although there is
evidence to support it, the reviewing court on the entire evidence is left with the definite
and firm conviction that a mistake has been committed." Anderson v. Bessemer City, 470
U.S. 564, 573 (1985) (citing United States v. U.S. Gypsum Co., 333 U.S. 364, 395
(1948)). The district court will not reverse the magistrate judge's determination, even in
circumstances where the court might have decided the matter differently. Bowen v.
Parking Auth. of City of Camden, No. 00-5765, 2002 WL 1754493, at *3 (D.N.J. July 30,
2002). "A district judge's simple disagreement with the magistrate judge's findings is
insufficient to meet the clearly erroneous standard of review." Andrews v. Goodyear Tire
& Rubber Co., 191 F.R.D. 59, 68 (D.N.J. 2000).
Importantly, “[d]ecisions enforcing local rules in patent cases will be affirmed
unless clearly unreasonable, arbitrary, or fanciful; based on erroneous conclusions of law;
clearly erroneous; or unsupported by any evidence.” O2 Micro Int’l Ltd. v. Monolithic
Power Sys., Inc., 467 F.3d 1355, 1366-67 (Fed. Cir. 2006) (citing Genentech, Inc. v.
Amgen, Inc., 289 F.3d 761, 774 (Fed. Cir. 2002)).
IV.
Analysis
Pursuant to Local Patent Rule 3.7, leave to amend infringement contentions may
be granted “by order of the Court upon a timely application and showing of good cause.”
The Local Patent Rules “exist to further the goal of full, timely discovery and provide all
parties with adequate notice and information with which to litigate their cases.” TFH
Publications, Inc. v. Doskocil Mfg. Co., Inc., 705 F. Supp. 2d 361, 365 (D.N.J. 2010)
(citing Computer Acceleration Corp. v. Microsoft Corp., 503 F.Supp.2d 819, 822 (E.D.
3
Tex. 2007) (internal quotations omitted)). “The rules are designed to require parties to
crystallize their theories of the case early in the litigation and to adhere to those theories
once they have been disclosed.” King Pharmaceuticals, Inc. v. Sandoz Inc., No. 08-5974,
2010 WL 2015258, at *4 (D.N.J. May 20, 2010) (quoting Atmel Corp. v. Info. Storage
Devices, Inc., No. 95-1987, 1998 WL 775115, at *2 (N.D. Cal. Nov. 5, 1998)).
Distinguishable from the liberal standard for amending the pleadings, “the
philosophy behind amending claim charts is decidedly conservative, and designed to
prevent the ‘shifting sands' approach to claim construction.” King, 2010 WL 2015258 at
*4. However, Rule 3.7 “is not a straitjacket into which litigants are locked from the
moment their contentions are served,” but instead, “a modest degree of flexibility
[exists], at least near the outset.” (Id.) (quoting Comcast Cable Comm. Corp. v. Finisar
Corp., 2007 WL 716131, at *2 (N.D. Cal. March 2, 2007)).
While “preliminary
infringement contentions are still preliminary,” it is important to recognize that the Local
Patent Rules strive to have the parties establish their contentions early on. (Id.) (citing
General Atomics v. Axis–Shield ASA, 2006 WL 2329464, at *2 (N.D. Cal. Aug. 9, 2006)).
a. Good Cause
Exploring the “good cause” requirement, the Federal Circuit has stated that parties
must “proceed with diligence in amending when new information comes to light in the
course of discovery.” O2 Micro, 467 F.3d at 1366-68. Thus, to illustrate good cause, the
moving party must demonstrate its diligence. (Id. at 1366).
Defendant argues it was diligent in its search for relevant prior art and thus
satisfied the good cause requirement. (D.E. No. 143-1, (Def. Br.) at 8-9). Defendant
argues that Judge Waldor erred in finding it was not diligent because its initial prior art
4
search did not include a search for FDA materials. (Id. at 10). Defendant argues that
such FDA materials would not ordinarily be uncovered in a simple prior art search. (Id.).
In opposition, Plaintiff argues that Defendant’s counsel admitted that it could have
looked earlier through the FDA records. (D.E. No. 146 (Pl. Rep. Br.) at 7).
The Court affirms Judge Waldor’s finding that Defendant did not act with the
requisite diligence because the party “seeking to amend its contentions bears the burden
of establishing diligence.” West v. Jewelry Innovations, Inc., No. 07-1812, 2008 WL
4532558, at *1 (N.D. Cal. Oct. 8, 2008) (citing O2 Micro, 467 F.3d at 1366-67)). Judge
Waldor found that Defendant failed to meet such a burden, and this Court finds no error
in Judge Waldor’s finding.
Moreover, not only must the party prove that it was diligent throughout the course
of discovery, but also that it was diligent in its search for relevant prior art. See West,
2008 WL 4532558, at *2.
Thus, “a party's diligence in amending its preliminary
invalidity contentions upon finding new prior art is only one factor to consider; the Court
also must address whether the party was diligent in discovering the basis for the proposed
amendment.” (Id.). On appeal, Defendant merely restates reasons why it purportedly
took five months to seek leave to amend. Judge Waldor found none of Defendant’s
reasons availing, and this Court finds that Judge Waldor did not err in making such a
finding.
Defendant argues that Judge Waldor “got wrong” the fact that the alleged “[p]rior
art that is the subject of [Roxane’s] Motion are referenced on the face of the patents-insuit” because four of the six prior art references with which Roxane seeks to supplement
“were not listed on the face of the distribution patents.” (D.E. No. 143-1 (Def. Br.) at 9)
5
(emphasis in original). Plaintiff disagrees and highlights the fact that “Roxane does not
and cannot dispute that two of the six disputed references . . . are listed on the face of the
patents-in-suit.” (D.E. No. 146 (Pl. Rep. Br.) at 9) (emphasis in original). Defendant
also “concedes the indisputable fact that the Advisory Committee meeting—from which
Roxane derives the remaining disputed materials—was referenced in the Advisory
Committee Transcript that is cited on the face of the patents in the ‘730 patent
family . . . [as well as] in all four prosecution histories.” (Id.) (emphasis in original).
Plaintiff further highlights that “[t]o date, [Defendant] has yet to offer any reason for why
it did not originally review the FDA website, despite its awareness of the citations on the
face of the patents in the ‘730 patent family” and Defendant “just chose not to search for
them for more than a year after becoming aware of the citations to the Advisory
Committee Transcript.” (Id. at 10).
Defendant is unable to make the requisite showing that Judge Waldor committed
an error warranting reversal because even if the four additional documents were not
referenced on the face of the patents-in-suit, this does not affect the Court’s finding that
Defendant was not diligent in its initial search. Defendant’s entire diligence argument
appears to be premised on contentions that were either considered and rejected by Judge
Waldor, or arguments that could have been presented prior to that ruling. This Court is
accordingly not persuaded by Defendant’s argument.
b. Timeliness
Defendant alleges that Judge Waldor erred in finding the Defendant did not timely
seek leave to amend its invalidity contentions. (D.E. No. 143-1 (Def. Br.) at 8). As
justification for any alleged untimeliness, Defendant argues that, before properly seeking
6
leave to supplement, it needed to confirm that the prior art-at-issue was not cumulative of
the art already discussed in its initial contentions, as well as to confirm that the prior art
was not publicly available as of December 2001. (Id. at 11-12). Plaintiff agrees with
Judge Waldor’s determination that a five-month delay did not constitute “diligence” and
in further support, highlights a Federal Circuit decision which stated that an even shorter
period of three months showed a lack of diligence. 1 (D.E. No. 146 (Pl. Rep. Br.) at 13).
This District requires “ultra early disclosure of infringement and invalidity
contentions for patent cases arising under the Hatch-Waxman Act.” Sanofi-Aventis v.
Barr Labs., Inc., 598 F. Supp. 2d 632, 637 (D.N.J. 2009) (emphasis in original). As
Judge Waldor observed, the Federal Circuit has emphasized the importance of the
“timely application” element by recognizing that “if the parties were not required to
amend their contentions promptly after discovering new information, the contentions
requirement would be virtually meaningless as a mechanism for shaping the conduct of
discovery in trial preparation.” O2 Micro, 467 F.3d at 1366.
Although Defendant disagrees with Judge Waldor’s finding, it provides no legal
support to refute such a finding. Defendant argues that it needed the time due to the
unconventional investigation it had to undertake to ascertain the date of public disclosure
of the FDA materials.
(D.E. No. 143-1 (Def. Br.) at 12).
Defendant argues that
“[b]ecause it was not evident from the documents themselves that they were publicly
available in 2001, Roxane had to . . . [turn] to the Wayback Machine after exhausting
other methods of ascertaining the date of public disclosure” of the FDA materials. (Id.).
Defendant also blames Plaintiff for the delay in seeking leave because but for Plaintiff’s
1
O2 Micro, 467 F.3d at 1367 (“O2 Micro waited almost three months . . . to serve its
proposed amended contentions and two more weeks to formally move to amend.”).
7
delay in responding to Defendant’s request to submit a joint letter to the Court, Defendant
could have “cut[] down the time between discovery of the materials to the time of
application to approximately four months.” 2 (Id.). Defendant could have informed the
Court of any delay on the part of Plaintiff, at the time of the delay, but failed to do so.
In short, mere disagreement with the judicial finding of a Magistrate Judge does
not meet the “clear error” standard required for reversal. See Walzer v. Muriel Siebert &
Co., Inc., No. 04-5672, 2010 WL 4366197, at *9 (D.N.J. Oct. 28, 2010). Judge Waldor’s
finding of untimeliness is not clearly erroneous, nor contrary to law, as it is in line with
Federal Circuit precedent. See O2 Micro, 467 F.3d at 1367. As such, Judge Waldor’s
finding of untimeliness is affirmed.
c. Undue Prejudice
Only if the moving party is able to show diligence may the court consider the
prejudice to the non-moving party. See CBS Interactive, Inc., 257 F.R.D. at 201; see also
Acer, Inc. v. Technology Properties Ltd., 2010 WL 3618687, at *3 (N.D.Cal. Sept.10,
2010) (“[The moving party] must demonstrate good cause, an inquiry that considers first
whether the moving party was diligent in amending its contentions and then whether the
non-moving party would suffer prejudice if the motion to amend were granted . . . If [the
moving party] was not diligent, the inquiry should end.”).
Defendant argues that Judge Waldor clearly erred in finding that Defendant’s
proposed supplementation would unduly prejudice Plaintiff. (D.E. No. 143-1 (Def. Br.)
2
Court again notes that the Federal Circuit in O2 Micro found a shorter three-month
delay to constitute a lack of diligence, making Defendant’s present argument unavailing.
See also Genentech, Inc. v. Trustees of the Univ. of Penn., No. 10-02037, 2011 WL
4965638, at *2 (N.D. Cal. Sept. 16, 2011) (District Judge affirmed Magistrate Judge who
found that a four-month delay showed a lack of diligence).
8
at 2). Defendant provides a timeline of the case but cites to no legal authority in support
of its “clearly erroneous” argument. Notwithstanding Defendant’s argument, this Court
need not address this issue on appeal because it does not find that Judge Waldor clearly
erred in finding that Roxane was not diligent in discovering the disputed materials, a
requisite showing for reversal of the Order. As such, Judge Waldor’s Order need not be
reversed on these separate grounds.
V.
Prior Art
Defendant argues that Judge Waldor committed an error of law in holding that the
prior art materials at issue were not in fact prior art under § 102(b). (D.E. No. 143-1
(Def. Br.) at 13).
Defendant argues that Judge Waldor “failed to recognize that a
reference constitutes § 102(b) prior art so long as the reference is accessible to a person
of ordinary skill in the art, regardless of whether he or she would have searched for it or
found it.” (Id.). In response, Plaintiff disagrees with Defendant’s reading of its cited
caselaw, and argues that “for something to qualify as prior art, it must be accessible to a
person practicing ‘reasonable diligence.’” (D.E. No. 146 (Pl. Rep. Br.) at 15).
This Court need not address this issue on appeal because it does not find that
Judge Waldor erred in finding that Roxane was not diligent in discovering the disputed
materials, a requisite showing for reversal of the Order. As such, Judge Waldor’s Order
need not be reversed on these separate grounds.
VI.
Application of Local Patent Rules
Finally, Defendant argues that Judge Waldor erred in applying the Local Patent
Rules of this District because they are “contrary, not only to the more liberal contention
practice in other jurisdictions, but also the patent act.” (D.E. No. 143-1 (Def. Br.) at 15).
9
This Court is to utilize and enforce its designated local rules for patent cases. Elan
Pharma Int'l Ltd. v. Lupin Ltd., No. 09-1008, 2010 WL 1372316, at *3 (D.N.J. Mar. 31,
2010) (“[Local patent rules] apply to all civil actions filed in, or transferred to, this Court
which allege infringement of a patent in a complaint . . . Local [Civil Rules] shall also
apply to such actions, except to the extent that they are inconsistent with these Local
Patent Rules.”). Thus, this Court finds that Judge Waldor did not err in applying the
Local Patent Rules of this District.
VII.
Conclusion
The Court concludes that Judge Waldor’s Order is neither clearly erroneous, nor
contrary to law. Thus, Judge Waldor’s Order is affirmed.
s/Esther Salas
Esther Salas, U.S.D.J.
10
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?