IMMUNEX CORPORATION et al v. SANDOZ INC. et al

Filing 194

MEMORANDUM OPINION & ORDER GRANTING IN PART AND DENYING IN PART Immunex's Motion, etc. Signed by Magistrate Judge Mark Falk on 6/7/17. (cm, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

IMMUNEX CORPORATION; AMGEN
MANUFACTURING, LTD.; AND
HOFFMAN-LA ROCHE, INC.,

Civil Action No. 16-1118 (CCC)

Plaintiffs,
v.
SANDOZ INC.; SANDOZ
INTERNATIONAL GMBH; SANDOZ
GMBH,

MEMORANDUM OPINION
& ORDER

Defendants.

FALK, U.S.M.J.
This is a patent infringement suit involving five patents covering Immunex’s
biologic etanercept, referred to by the brand name Enbrel®. The suit is brought pursuant
to a new federal statute—the Biologics Price Competition and Innovation Act
(“BCPIA”)—which was enacted as part of the Affordable Care Act. Sandoz seeks
approval to license a “biosimilar” to Enbrel pursuant to a new abbreviated regulatory
pathway.
A.

Current Dispute
Before the Court is a letter motion by Immunex requesting the Court’s in camera

review of and ruling on the application of the common-interest doctrine to thirty-one (31)

communications exchanged between Immunex and co-Plaintiff Hoffman La-Roche. The
Court was asked to decide these privilege questions in an extremely expedited fashion
prior to depositions scheduled for the next few weeks and well in advance of the June 30
discovery end-date.
The dispute was not submitted as a traditional motion and lacks the depth that an
ordinary privilege motion of this nature might otherwise have. Likewise for Defendant
Sandoz’s opposition, which runs 4 pages and was also submitted on short notice. All
agree that the reason for this approach is because this case has a very specific, tight
schedule, carefully negotiated by the parties and approved by the Court. The schedule
includes important milestones for nearly every aspect of the case, e.g., the completion of
discovery by June 30, 2017, and a trial date of April 17, 2018. The parties have
repeatedly emphasized that maintaining the current schedule is crucial.1
After receipt of Immunex’s letter motion, the Undersigned held two telephone
conferences to discuss how the parties would like this motion decided, and the fact that,
perhaps, detailed submissions might be more ideal in a dispute of this type. Several
options were proposed by the Court, including more substantive briefing followed by an
in-court document-by-document hearing. However, with an eye on the joint goal of
keeping the case on schedule, all parties elected to have the Court decide the privilege

1

Indeed, the parties have agreed that Defendants won’t launch their product, provided
the schedule and trial date are adhered to (and subject to certain other agreements), thus
avoiding what inevitably would be a challenging preliminary injunction proceeding in this
complex and substantial case.
2

dispute as quickly as possible on the papers submitted. The Court agreed to do so and to
move this motion to the top of the list, subject to the following. If any party feels that a
further appellate record is necessary, the parties will submit the issue for reconsideration,
and the Court will address the issue in more detail prior to any appeal.2 The parties
agreed to this approach.
The rulings herein represent the Court’s best efforts to make informed privilege
determinations based on the letters and argument presented. However, privilege issues
are often quite complex and not easily susceptible to speedy decision. This is especially
true in certain patent cases, where there is relatively little binding precedent, yet a wide
range of published and unpublished trial court authority. Thus, despite the absence of
plenary briefing, the Court devoted many hours to studying the law on the subject to
provide a solid basis for making accelerated calls. On a general level and as a result of
the Court’s research, the Court is inclined to agree with a noted commentator’s
conclusion in a privilege treatise that “[s]ubstantial chaos continues to exist in the patent
law area on the question of whether and when the privilege is available.” Edna Selan
Epstein, The Attorney-Client Privilege and the Work-Product Doctrine at 347 (5 ed.
2007). It is against this backdrop that we turn to the issues.
The principal issues involved are application of the attorney-client privilege and

2

Any reconsideration motion of this type will not be subject to the normal highburden reconsideration standard, but rather will be a vehicle to highlight a particular
document for which additional argument and a record may be necessary.
3

the common-interest doctrine. The Court highlights the elements of these doctrines
below and then applies them document-by-document.3
B.

Attorney-Client Privilege
The attorney-client privilege is the client’s right to refuse to disclose “confidential

communications between attorney and client made for the purpose of obtaining legal
advice.” Genetech, Inc. v. U.S. Int’l Trade Comm’n, 122 F.3d 1409, 1415 (Fed. Cir.
1997). It exists to promote the public interest in “the observance of law and the
administration of justice,” Westinghouse Elec. Corp. v. Republic of the Philippines, 951
F.2d 1414, 1423 (3d Cir. 1991), which is accomplished by encouraging “full and frank
communications between attorneys and their clients.” Upjohn Co. v. United States, 449
U.S. 383, 389 (1981). The privilege applies only if:
(1) the asserted holder of the privilege is or sought to become
a client; (2) the person to whom the communication was made
(a) is a member of the bar of a court, or his subordinate and
(b) in connection with this communication is acting as a
lawyer; (3) the communication relates to a fact of which the
attorney was informed (a) by his client (b) without the
presence of strangers (c) for the purpose of securing primarily
either (i) an opinion on law or (ii) legal services or (iii)
assistance in some legal proceeding, and not (d) for the
purpose of committing a crime or tort; and (4) the privilege
has been (a) claimed and (b) not waived by the client.

3

Many refinements and analyses of these issues were not addressed by the parties nor
considered by the Court. This includes the threshold question of choice of law (e.g., Third
Circuit vs. Federal Circuit) on certain issues. However, full briefing and analysis of same
would necessarily be quite time consuming, and the Court believes would be unlikely to
change the result in any significant way.
4

In re Grand Jury Investigation, 599 F.2d 1224, 1233 (3d Cir. 1979).
The privilege is an exception to the rule of full disclosure and obstructs the truth
finding process, thus it is narrowly construed. See Westinghouse Elec. Corp., 951 F.2d at
1423. It protects only those communications that would not have been made but for the
privilege. See Fisher v. United States, 425 U.S. 391, 403 (1976); Shearing v. Iolab Corp.,
975 F.2d 1541, 1546 (Fed. Cir. 1992). Application of the privilege is decided on a caseby-case basis with the party asserting privilege bearing the burden to show it applies. See
e.g., American Standard, Inc. v. Pfizer, 828 F.2d 734, 745 (Fed. Cir. 1987); In re Bevill,
Bressler & Schulman Asset Mgmt. Corp., 805 F.2d 120, 124 (3d Cir. 1986).
Communications which relate to business rather than legal matters generally do not
fall within the protection of the privilege. Leonen v. Johns-Manville, 135 F.R.D. 94, 98
(D.N.J. 1990). Therefore, the general rule is “while legal advice given to a client by an
attorney is protected by the privilege, business advice generally is not.” In re Nat’l
Smelting of New Jersey, Inc. Bondholders’ Litig., No. 84-3199, 1989 U.S. Dist. LEXIS
16962, at *18 (D.N.J. June 29, 1989) (citation omitted). However, in the corporate
community, legal advice ‘is often intimately intertwined with and difficult to distinguish
from business advice.’” Leonen, 135 F.R.D. at 98-99 (quoting Sedco Int’l SA v. Cory, 683
F.2d 1201, 1205 (8th Cir. 1982)). Because it is “often too difficult, impractical and
unrealistic to compartmentalize whether certain advice given to a client is legal in nature
or business in nature . . . the policy behind the attorney-client privilege is best upheld . . .

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where the attorney-client relationship is predominantly for the purpose of rendering legal
services.” In re Nat’l Smelting, 1989 U.S. Dist. LEXIS 16962, at **21-22. In
determining whether the privilege applies in a given case, the ultimate question is whether
a “communication is one . . . made. . . for the purpose of obtaining legal advice or
services.” In re Spalding Sports Worldwide, Inc., 203 F.3d 800, 805 (Fed. Cir. 2000).
C.

Common-Interest Doctrine
The common-interest, or community-of-interest, doctrine allows “attorneys

representing different clients with similar legal interests to share information without
having to disclose it to others.” In re Teleglobe Commc’ns Corp., 493 F.3d 345, 364 (3d
Cir. 2007) (emphasis added). The common-interest doctrine is not an independent
privilege. It is a waiver-related doctrine; an exception to the general rule that disclosure
of a privileged communication results in waiver of the privilege. See, e.g., Cavallaro v.
United States, 284 F.3d 236, 250 (1st Cir. 2002) (“The common interest doctrine . . . is
not an independent basis for privilege, but an exception to the general rule that the
attorney-client privilege is waived when privileged information is disclosed to a thirdparty.” (quotation omitted)); Hertz v. Margulis, 2017 WL 772336, at *8 (D.N.J. Feb. 28,
2017). Documents may be withheld on attorney-client privilege or work-product
grounds. The common-interest rule allows the withholding party to share that privileged
communication with others that are within a community of interest without waiving the
underlying privilege. Id. In order to avoid waiver of privilege protection when sharing

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protected communications, the party seeking to invoke the common-interest doctrine must
show that: (1) an underlying privilege has been established; (2) the parties had a legal4
and not solely commercial interest; and (3) the communication was designed to further
the shared interest. See, e.g., Hoffman La-Roche v. Roxane Labs, 2011 WL 1792791, at
*5 (D.N.J. May 11, 2011); Net2Phone, Inc. v. Ebay, Inc., 2008 WL 8183817, at *7
(D.N.J. June 26, 2008).5
D.

The Common-Interest Doctrine Generally Applies
As stated previously, this case involves five patents. Two of the patents involved

are owned by Plaintiff Roche and Immunex has an exclusive license to them (the “Roche
Patents”). The specifics of the licensing arrangement between Roche and Immunex is
described in detail in a May 16, 2017 letter to the Court, which has been filed under seal.

4

Many aspects of the common-interest doctrine are subject to debate across the
Country, including the degree of legal interest the parties must share. See Katharine Traylor
Schaffizn, An Uncertain Privilege: Why the Common Interest Doctrine Does Not Work and
How Uniformity Can Fix It, 15 B.U. Pub. Int. L.J. (2005). Must the parties have identical
interests? Substantially similar? Can the parties even be adverse in some respects? Can it
be commercial or must it be legal? To be blunt, non-binding case law to support any view
on any subject in this area can be found. See id.; compare La. Mun. Police Empl. Ret. Sys.
v. Sealed Air, 253 F.R.D. 300, 309-10 (D.N.J. 2008) with Duplan Corp. v. Deering Milliken,
Inc., 397 F. Supp. 1146, 1172 (D.S.C. 1974) (identical interests required). In the absence of
controlling authority, this Court requires that the parties share a substantially similar legal
interest in the shared communication. See Sealed Air, 253 F.R.D. at 309.
5

This is a patent case controlled by federal law. As with everything with the
common-interest doctrine, the elements are sometimes described differently in some
jurisdictions, including the New Jersey State Courts. See Hertz, 2017 WL 772336, at *8-9.
7

(See Immunex Letter dated May 16, 2017, at 2; ECF No. 172.)6 Since the letter may
involve sensitive confidential, business information, the Court will not further discuss the
relationship in detail except to note that it has been considered in camera in connection
with this privilege review. What can be said is that the documents begin in early 2000
and continue through the issuance of the Roche Patents in 2011. And Plaintiff describes
them as involving shared legal advice related to the parties’ common interest in the
prosecution, scope, and validity of the Roche Patents.
Whether a given communication has a) an underlying privilege, and b) was made
in furtherance of a shared legal interest is usually a document-by-document consideration,
which is undertaken in an abbreviated fashion below. However, as a general matter, the
Court is satisfied that, if a given communication is privileged, and assuming it was made
in furtherance of the licensing agreement and/or prosecution, scope, and validity of the
Roche Patents, the common interest doctrine would apply to protect it.
A leading Federal Circuit decision is on point. In In re Regents of Univ. of Cal.,
101 F.3d 1386 (Fed. Cir. 1996), the court noted that: “a community of legal interests may
arise between parties jointly developing patents; they have a common legal interest in
developing the patents to obtain greatest protection and in exploiting the patents.” Id. at
1389. The Regents court held that communications between a potential licensee and a
patentee were protected under the common interest doctrine because “both parties had the

6

A formal motion to seal portions this letter (as well as Sandoz’s opposition
and Immunex’s reply) is due to be filed on or before June 9, 2017.
8

same interest in obtaining strong and enforceable patents.” Id. Moreover, “the legal
interest” between the patent holder and the licensee “was substantially identical because
of the potentially and ultimately exclusive nature” of the licensing arrangement. Id.
Other patent related decisions have reached similar conclusions. See, e.g., Crane Sec.
Tech. v. Rolling Optics, AB, — F. Supp. — 3d, 2017 WL 470890 (D. Mass. Feb. 2, 2017);
Hilsinger v. Eyeego, LLC, 2015 WL 11120842, at *2 (D. Mass. Aug. 13, 2015); HewlettPackard Co. v. Bausch & Lomb, Inc., 115 F.R.D. 308 (N.D. Cal. 1987).
Based on the above, the Court is satisfied that, as a general matter, any document
that is protected by an underlying privilege, and was made to further the legal interest
associated with the licensing arrangement, would qualify for the common-interest
doctrine between and amongst the parties involved. This would include documents that
involve Wyeth’s counsel, as Wyeth shared a common interest in the patents for the same
reasons as Immunex.
E.

Individual Documents
The Court has reviewed all 31 withheld documents in camera. The following is

the number identified on the privilege log, the Court’s decision, and some of the general
reasons supporting that conclusion.
1.

Document 44: Not privileged. This document refers to the licensing

agreement and requests information relating to same, but does not reflect a
communication between an attorney and client regarding legal advice, nor does it disclose
or discuss attorney-client privileged information.
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2.

Document 45: Not privileged. This document is a response to Document

44. Again, it is not an attorney-client communication, nor does it repeat, refer to, or
incorporate privileged information. It amounts to a list of certain patent rights currently
in existence, which would seem to be a matter of public record.
3.

Document 46: Not privileged. Document amounts to a request for

information, but does not disclose or discuss privileged information.
4.

Document 47: Privileged. The document is related to prosecuted patent

applications and qualifies as privileged information.7
5.

Document 48: Privileged. The document contains specific information

relating to patent prosecution, requested by associate general counsel, and appears
privileged.
6.

Document 49: Not privileged. The document is a status report that does

not appear to involve attorney-client privileged information.
7.

Document 50: Privileged. Although prepared by an accountant, this

document contains attorney opinion relating to the scope of issued and pending patents;
the document does contain business and financial information, but in this context, the
business and legal issues are effectively intertwined, and the Court is satisfied that the
communication reflects privileged legal information that predominates over business

7

Plaintiff has not claimed work-product protection as a basis for withholding the
documents. However, the Court notes that, under the circumstances here, much of the
attorney-client information might also constitute opinion work product.
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issues.
8.

Document 51: Partially privileged. The first page of Document 51 (the

letter dated April 1, 2003 from George Johnston) is not privileged, as it is effectively a
cover letter that does not disclose, discuss, seek or implicate any legal advice. However,
the April 1, 2013 letter from Attorney Parise appears to be privileged.
9.

Document 52: Privileged. The document discloses attorney opinion

relating to the scope of the relevant family of patents; while mixed with business and
financial issues, the primary purpose of the communication is legal.8
10.

Document 53: Not privileged. The document is authored by Teresa

Quan in Amgen’s accounting department; the document discusses the amounts of certain
royalty payments, but does not disclose or discuss attorney opinion relating to the basis
for the payments, and therefore, is not privileged.
11.

Document 54: Privileged. Document contains legal advice made up of

pure attorney opinion relating to the relevant patents.
12.

Document 55: Privileged. This letter discusses attorney opinion relating to

the scope of the patents and is protected.
13.

Document 56: Privileged. Document contains attorney opinion

relating to the scope of relevant patents

8

Some of this document (and others) contain both business and legal matters. They
seem to be inextricably intertwined in some instances. Not every sentence in this letter (and
several others) discloses or discusses attorney-client protected information; however, the
general nature of this document is legal and, under the relevant case law, is protected.
11

14.

Documents 57-58: Partially Privileged. This entry contains two emails,

what amounts to a cover letter and attachment or forward. The top email in the chain
(August 5, 2003) is not privileged. The second email (July 31) is privileged, as it
addresses attorney-client information.
15.

Documents 59-60: Not privileged. These emails discuss business matters

without disclosing any legal opinion, and therefore, are not privileged.
16.

Document 61: Probably not privileged. The document appears to be a

cover letter and a copy of a filing with the United States Patent and Trademark Office; it
has not been explained how such information is privileged, and whether it was made
public through filing with the USPTO. If it was sent to the USPTO, it is not privileged
and should be produced. If there is another explanation, it may be raised with the Court.
17.

Document 62: Not privileged. The document is an email conversation that

does not disclose attorney opinion and is not protected by any privilege.
18.

Document 63: Not privileged. This document is a transcript of a phone

conversation relating to the amount of a royalty payment. It does not disclose or discuss
legal advice or the substance of attorney opinion, and therefore, is not privileged. Also, it
seems to reflect business rather than legal considerations.
19.

Document 64: Privileged. The letter contains attorney opinion underlying

the basis for a royalty payment, and therefore, is privileged.
20.

Document 65: Not privileged. This is an email relating to a business

matter that does not disclose or discuss attorney opinion.
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21.

Document 66: Not privileged. The document is a cover email and

attachment providing a royalty report for Enbrel. No attorney client information is
present.
22.

Documents 67-70: Partially Privileged. These documents are a series of

related emails. March 26, 2014 is not privileged. The email dated March 12, 2014, from
Ava Buzzelli to Karina Carignani, is privileged, in that it discloses attorney opinion. For
the same reasons, the email from Karina Carignani to “[e-mail]” dated March
9, 2014, is privileged.
23.

Documents 71-72: Not privileged. These documents are emails that refer to

a videoconference and presentation but do not disclose the substance of attorney-client
communications.
24.

Documents 73-74: Privileged. The documents, which are marked

confidential, are an email and term sheet relating to an agreement between the parties
regarding the licensing of patents. It appears that the term sheet discloses attorney-client
opinion regarding negotiations which reflect communications involving legal advice.
25.

Documents 75-78: Not privileged. No indication of attorney-client

information.
26.

Documents 79-81: Not privileged. No indication of attorney-client

information.
27.

Document 82: Probably privileged. The Court will accept the proffer

in the privilege log that these apparent changes to the Agreement between the parties.
13

There is also unidentified handwriting on the document which may be comments by an
attorney.
28.

Documents 83-85: Not privileged. These documents are emails shared

among individuals with a common-interest; however, there is no underlying privilege that
has been shown, as the documents do not reflect discuss or disclose attorney client
information.
29.

Documents 86-87: Partially privileged. The emails transmitting the final

redline are not privileged. The final redline agreement likely reflects legal
communication and advice, as proffered on the privilege log. The final agreement
between the parties, which is not included, would likely not be privileged, but not the
redlined versions during negotiations.
30.

Document 88: Not privileged. These documents are shared

among individuals with a common-interest; however, there is no underlying privilege that
has been shown, as the documents do not reflect discuss or disclose attorney client
information. To the extent there is attorney involvement, it appears to be in a business
capacity.
31.

Document 89: Privileged. This document is an email that discloses

attorney opinion.

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CONCLUSION
For the reasons stated above, Immunex’s motion is GRANTED IN PART AND
DENIED IN PART.

s/Mark Falk
MARK FALK
United States Magistrate Judge

DATED: June 7, 2017

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