SANDOZ INC. et al v. UNITED THERAPEUTICS CORPORATION et al

Filing 304

OPINION and ORDER that UTC's request in its 2/19/2021 letter is denied; the information in the Term Sheet that Plaintiffs have designated as "Highly Confidential" under the terms of the Confidentiality Order shall be maintained as "highly Confidentail" in accordance with the Confidentiality Order. Signed by Judge Jose L. Linares on 4/23/2021. (mg)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

SANDOZ, INC., et ano.,

Civil Action No.: 19-cv-10170

Plaintiffs,
v.
UNITED THERAPEUTICS CORP., et ano.,

OPINION AND ORDER OF THE
SPECIAL DISCOVERY MASTER
REGARDING CONFIDENTIALITY OF
SMITHS SETTLEMENT TERM SHEET

Defendants.

LINARES, J.
This matter comes before the Special Master by way of a Letter dated February 19, 2021
from counsel for Defendant United Therapeutics Corporation (“UTC”) regarding the
confidentiality designation of certain provisions of a “Binding Term Sheet” dated November 6,
2020 between defendant Smiths Medical ASD, Inc. (“Smiths”) and Plaintiffs Sandoz, Inc. and
Raregen, LLC (“Term Sheet”). The Special Master has reviewed the submissions, including the
February 26, 2021 Response from Plaintiffs, and the relevant controlling law. For the reasons set
forth below, the Special Master hereby denies the relief requested by UTC.
I.

DISCUSSION

The Special Master presumes that the parties are familiar with the facts surrounding the
underlying action and claims. Accordingly, the Special Master will only recite the relevant
procedural and factual background necessary to dispose of the dispute at hand.
The Term Sheet, which is marked “Subject to FRE 408; Settlement Agreement,” states
that it constitutes the binding agreement between Plaintiffs and Smiths “to resolve and settle the

litigation between Plaintiffs and Smiths” – the “litigation” being the instant litigation. Plaintiffs
have designated certain portions of the Term Sheet as “Highly Confidential” under the Stipulated
Confidentiality Order entered on June 6, 2019 (Docket 55). UTC objects to Plaintiffs overdesignation of certain portions of the Term Sheet as “Highly Confidential”, arguing that only
limited provisions relating to price, quantity and timing should be redacted as “Highly
Confidential.”1
The Confidentiality Order provides, in relevant part:
The term "Protected Information" shall include all Materials
designated
as
"CONFIDENTIAL"
or
"HIGHLY
CONFIDENTIAL," as those terms are defined herein, that the
Source believes constitutes, discloses or relates to confidential or
proprietary business information; processes, operations, research,
technical or developmental information, testing, and studies
relating to drug products; competitively sensitive financial and
strategic information and internal financial projections; and
production, marketing, sales, shipments, or other proprietary data
or information of commercial value, including trade secrets.
[. . .]
"HIGHLY CONFIDENTIAL" shall mean Protected Information of
a most sensitive nature that might be of significant value to an
actual or potential competitor of the Source and the disclosure of
which could reasonably place the Source at a competitive
disadvantage. Examples of categories of such "HIGHLY
CONFIDENTIAL" Protected Information include: documents and
things relating to, constituting or reflecting competitively sensitive
financial results, planning, and strategic information; trade secrets;
agreements with customers, distributors, or vendors; business
plans; the research and development (including the discovery and
development of a party's product(s), product formulation,
manufacturing, trials, testing, and related materials) of any
product; 510(k) submissions, approved and non-approved
regulatory claims, design specifications, certification details,
certificate expirations, regulatory findings, complaint details,
mandatory reported incidents, CAPA's and design changes; non-

The information Plaintiffs have designated and redacted as “Highly Confidential” are highlighted in green in
Exhibit A to UTC’s February 19, 2021 Letter, while UTC’s more limited proposed redactions appear in orange.
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public patent applications; and projected future sales, pricing,
revenue, cost, or profit information for any products.
UTC argues that Plaintiffs have over-designated certain portions of the Term Sheet as
“Highly Confidential” and that only certain limited sections relating to pricing, quantity and
timing should properly be redacted as “Highly Confidential.” UTC argues that these more
limited redactions are consistent with the parties’ prior practice with respect to other commercial
contracts that have been produced in discovery, including supply agreements between Smiths
and UTC, in which only information relating to dollar amounts for pricing, specific quantities of
product and identities of customers were redacted. UTC further argues that the effect of this
over-designation by Plaintiffs prevents it from sharing relevant information in the Term Sheet
with in-house UTC lawyers, who are knowledgeable about the import of such provisions.
Finally, UTC argues that the information that is redacted is relevant to UTC’s defense that
Plaintiffs could have entered into written contracts to secure or obtain regulatory clearance for a
cartridge or a pump years ago.
Plaintiffs argue the information it has designated as “Highly Confidential” falls within the
express definition under the Confidentiality Order and the examples listed therein, and thus the
designations are proper. Plaintiffs also argue that the confidentiality level of other supply or
commercial agreements produced in this action are different from and not comparable to the
settlement Term Sheet here, and further, how the parties agreed to handle prior confidentiality
designations in other agreements is not determinative of whether the designations in the
settlement Term Sheet are proper.
The Special Master agrees with the Plaintiffs and holds that the information Plaintiffs
have designated as “Highly Confidential” in the Term Sheet shall remain so designated. The
information designated by Plaintiffs falls within the definition of “Highly Confidential” in the
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Confidentiality Order and the examples cited therein, including planning and strategic
information, business plans, 510(k) submission and regulatory findings. The Confidentiality
Order, in addition to being a court order, is a negotiated agreement between the parties that must
be enforced according to its terms. The parties agreed to include specific examples of the type of
information that qualifies for “Highly Confidential” protection – the information Plaintiffs have
designated in the Term Sheet falls within the plain meaning of the Confidentiality Order. In
addition, any prior practice of the parties with respect to treatment of confidential information in
other unrelated commercial agreements is not determinative of the issue here, and certainly does
not constitute a waiver of any party’s right to designate information as “Highly Confidential” in
any subsequent and unrelated agreement. Accordingly, the Special Master holds that Plaintiffs’
designation of certain information in the Term Sheet as “Highly Confidential” is proper, and
UTC’s request is denied.
II.

ORDER

For the foregoing reasons, it is on this 23rd day of April 2021,
ORDERED that UTC’s request in its February 19, 2021 Letter is denied; and it is further
ORDERED that the information in the Term Sheet that Plaintiffs have designated as
“Highly Confidential” under the terms of the Confidentiality Order shall be maintained as
“Highly Confidential” in accordance with the Confidentiality Order.
SO ORDERED.
__/s/ Jose L. Linares_______________________
Hon. Jose L. Linares, U.S.D.J. (Ret.)

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