Sepracor Inc. et al v. Barr Laboratories, Inc., et al

Filing 227

ORDER granting in part and denying in part 202 Motion. Signed by US Magistrate Judge William A. Webb on 8/9/2010. (Heath, D.)

Sepracor Inc. et al v. Barr Laboratories, Inc., et al

Doc. 227

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NORTH CAROLINA WESTERN DIVISION

SEPRACOR, INC., et al., Plaintiffs, v. BARR PHARMACEUTICALS, INC., et al. Defendants. ____________________________________ SEPRACOR, INC., et al., Plaintiffs, v. SANDOZ, INC., Defendant. ____________________________________ SEPRACOR, INC., et al., Plaintiffs, v. SUN PHARMACEUTICAL INDUSTRIES, LTD., Defendants. ____________________________________ SEPRACOR, INC., et al., Plaintiffs, v. SYNTHON PHARMACEUTICALS, INC., et al., Defendants. ____________________________________

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Western Division No. 5:08-CV-362-H(3)

Eastern Division No. 4:08-CV-89-H(3)

Western Division No. 5:08-CV-247-H(3)

Western Division No. 5:08-CV-179-H(3)

Dockets.Justia.com

This cause comes before the court on Plaintiffs Sepracor, Inc., UCB S.A., and UCB, Inc.'s, ("Sepracor") motion to (1) reopen discovery regarding Defendant Sandoz Inc.'s ("Sandoz") section viii statement and (2) modify the protective order (DE-202). Sandoz has filed its response in opposition to the motion (DE-211). Accordingly, the matter is ripe for adjudication. For the following reasons, Sepracor's motion to (1) reopen discovery

regarding Sandoz's section viii statement and (2) modify the protective order (DE-202) is GRANTED IN PART and DENIED IN PART. Background Sepracor is the owner of United States Patent No. 5,698,558 ("the `558 patent") entitled "Methods for Treating Allergic Disorders Using Optically Pure (-) Cetirizine. Sepracor asserts that Synthon and Sandoz have infringed the `558 patent. The `558 patent, which was issued on December 16, 1997, covers a method of treating allergies using levocetirizine also known as (-) cetirizine. Levocetirizine is the active ingredient in Xyzal, a medication manufactured by Sepracor. The Drug Price Competition and Patent Restoration Act of 1984, commonly known as the Hatch-Waxman Act, was enacted to facilitate early market entry of generic drugs while protecting the patent rights of the pioneer drug manufacturer1. Upon approval by the Federal Drug Administration ("FDA"), the HatchWaxman Act allows the New Drug Application ("NDA") holder, more often the original pharmaceutical company that invented the drug, to list its patent in the Approved Drug

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Pub. L. No. 98-417, 98 Stat. 1585 (codified as amended at 21 U.S.C. §§ 355, 360cc; 35 U.S.C. §§ 156, 271)
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Products with Therapeutic Equivalence Evaluations ("Orange Book"). Once the patent is listed in the Orange Book, a generic manufacturer must assert through an Abbreviated New Drug Application ("ANDA") that the patent in the Orange Book is somehow invalid or not infringed by what the generic manufacturer plans to do. Once the assertion is made, the patent owner or NDA holder has forty-five days to file suit. Upon filing the suit, there is an automatic thirty-month stay of FDA approval of the ANDA. The `558 patent is listed in the Orange Book as covering Xyzal. Sepracor alleges that both Synthon and Sandoz filed separate ANDA with the FDA seeking approval to market a generic version of Xyzal prior to the expiration of the `558 patent. For a patent listed in the Orange Book, the ANDA filer must make one of the following four certifications pursuant to 21 U.S.C. § 355(j)(2)(A)(vii): the patent information has not been filed (Paragraph I certification); the patent has expired (Paragraph II certification); the generic drug will not be marketed until after the patent expires (Paragraph III certification); or the patent listed in the Orange Book is invalid or will not be infringed by the sale of the generic drug for which the ANDA is submitted (Paragraph IV certification). Synthon and Sandoz notified Sepracor of their respective Paragraph IV certifications on February 28, 2008 and May 27, 2008, where both Synthon and Sandoz asserted that the `558 patent was invalid, unenforceable, and not infringed. Sepracor filed suit against Synthon for infringement of the `558 patent on April 11, 2008 and against Sandoz on June 12, 2008. On February 5, 2010, Sandoz amended its ANDA by replacing the Paragraph IV certification with a section viii filing. A section viii filing, pursuant to 21 U.S.C. § 355(j)(2)(A)(viii), allows a generic manufacturer to "carve out" a label in the method of

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treating patients to avoid infringement under Paragraph IV. The FDA will only permit a section viii "carve out" on patents listed in the Orange Book. A section viii statement avers that the patent in question has been listed, but does not claim a use for which the applicant seeks FDA approval. An applicant proceeding by way of section viii does not need to provide formal notice to the patent owner and NDA holder, does not necessarily face an infringement action under 35 U.S.C. § 271(e)(2)(A), and does not face a mandatory thirtymonth stay should the patent owner sue. At the same time, however, section viii does not entitle the successful generic applicant to any period of exclusivity. In the instant matter, Sandoz's section viii statement asserts that (1) Sandoz will not seek approval "for the indication associated with patent use code U-812"2 and (2) the generic labeling of its product does not include the patented use. Sandoz's section viii amendment states in pertinent part: all information in regard to use code U-812 has been carved out . . . In addition, Sandoz has indentified a new exclusivity association with . . . Xyzal . . . All information in regard to exclusivity code NPP (New Patient Population) related to children under 6 years of age has been carved out . . . ." (DE-204-1, pg. 4). Sandoz is no longer seeking approval for the use of levocetirizine in the treatment of allergic rhinitis. The proposed label, which will "carve out" allergic rhinitis, is the subject of Sepracor's motion to reopen discovery and modify the protective order.

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U-812 refers to relief of symptoms associated with seasonal and perennial allergic rhinitis claimed under the `558 patent (DE-204-1, pg. 4).
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Discussion A. Request to Reopen Discovery Whether to reopen discovery is within the discretion of the court. See Vodrey v. Golden, 864 F.2d 28, 32 (4th Cir. 1988) ("The district court's discretion with respect to discovery matters is broad."). This court has analyzed the following factors when making such a determination: (1) is the trial imminent; (2) is the request opposed; (3) would the non-moving party be prejudiced; (4) was the moving party diligent during the discovery period; (5) was the request foreseeable based on the time line set forth by the court; and (6) will the new evidence be relevant to the stated inquiry. See Domestic Fabrics Corp. v. Sears, Roebuck & Co., Civil Action No. 4:00-CV-127-H(4) (E.D.N.C. March 11, 2003) (citing Smith v. United States, 834 F.2d 166, 169 (10th Cir. 1987)). Sepracor argues that Sandoz's "introduction of a generic levocetirizine product could result in generic substitution for allergic rhinitis even without Sandoz's listing allergic rhinitis on its label." (DE-203, pg. 5). In other words, Sepracor fears that even though Sandoz's substitution would be labeled for one use, (e.g. urticaria), the generic would nonetheless be a bioequivalent and used by the medical and/or pharmaceutical community as treatment for allergic rhinitis ­ thus infringing the patent. Sandoz asserts that Sepracor is seeking a second opportunity to discover evidence that could have been requested prior to the close of discovery. Sandoz further asserts that Sepracor seeks to revisit a wide range of topics that go far beyond Sandoz's section viii statement. Sepracor requests information on the manner and timing of the filing of the section viii statement; sales forecasts and marketing plans; forecasts of

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prescriptions for the patented method; and the proposed labeling (DE-203, pg. 8). The court notes that Sandoz seeks a stipulation of dismissal with prejudice from Sepracor. (See DE-204, pg. 3). A dismissal with prejudice will bar claims Sepracor may likely pursue, including, as discussed below, the induced infringement claim. "Section viii statements do not require notice to the patent-holder and do not allow the patent-holder to automatically initiate infringement litigation." In re Gabapentin Patent Litigation, 649 F.Supp.2d 340, 345 n. 7 (D.N.J. 2009). However, a patentee may bring an action for inducing infringement under 35 U.S.C. § 271(b). "To prevail on an induced infringement claim, the patentee must establish `that the alleged infringer's actions induced infringing acts and that he knew or should have known his actions would induce actual infringements.'" Ecolab, Inc. v. FMC Corp., 569 F.3d 1335, 1350-1351 (Fed. Cir. 2009) (citing DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1304 (Fed. Cir. 2006) (en banc in relevant part)); See also Water Technologies Corp. v. Calco, Ltd., 850 F.2d 660, 668 (Fed. Cir. 1988) ("The patent statute provides that `*w+hoever actively induces infringement of a patent shall be liable as an infringer'")(citing 35 U.S.C. § 271(b)). On balance, the court finds that consideration of the above factors weighs in favor of reopening discovery. As to the first factor, the court notes that no trial date has been set in this matter. As to the second and third factors, although the motion is opposed, no prejudice to Sandoz has been articulated. As to the fourth and fifth factors, prior to expiration of the discovery deadline, Sepracor's inquiries were focused on the Paragraph IV certification infringement claim. The parties have engaged in protracted discovery regarding the infringement claim. The court finds that Sepracor acted diligently

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with regard to the infringement claim, but could not anticipate an induced infringement claim based on a section viii amendment until Sandoz revised its ANDA. Since Sandoz has articulated its demand for a stipulation of dismissal with prejudice, the court finds that the new evidence, particularly with regard to the induced infringement claim, will be relevant to the stated inquiry. Accordingly, the court finds that Sepracor's request to reopen discovery regarding the proposed label is warranted. B. Request to Lower Confidentiality Designations "Courts have the inherent power to modify protective orders, including protective orders arising from a stipulation by the parties." SmithKline Beecham Corp. v. Synthon Pharmaceuticals, Ltd., 210 F.R.D. 163, 166 (M.D.N.C. 2002). "A number of factors may be employed to help guide a court in exercising its discretion as to whether to modify a protective order. These factors include: the reason and purpose for a modification,

whether a party has alternative means available to acquire the information, the type of protective order which is at issue, and the type of materials or documents which are sought." Id. To date, Sandoz has neither received correspondence from the FDA regarding its amendment nor has the FDA approved Sandoz's section viii amendment. Sandoz

contends that as a matter of law ANDAs are confidential and generally not available to the public. Nonetheless, in a stipulation resolving Sepracor's motion to compel documents from Sandoz, Sandoz did agree to provide future documents relative to ANDA 90-486, the application at issue. Paragraph 4 of the stipulation provides in pertinent part: Sandoz also agrees to provide any non-privileged internal communications, if any, related to ANDA 90-486, including but not limited to, draft responses to
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FDA deficiency letters and documents memorializing discussions with the FDA. Sandoz agrees to make timely productions of any supplemental communications with the FDA regarding ANDA 90-486 that may occur in the future, consistent with Fed. R. Civ. P. 26(e). (DE-125, pg. 2). Sandoz further argues that the request should be denied because the motion "can only be viewed as an attempt to gain access to confidential information through this [c]ourt in order to interfere with Sandoz's pending ANDA." (DE-211, pg. 10). protective order states in pertinent part: Access to, and disclosure of, all documents, testimony, information, and things received by counsel for a Receiving Party pursuant to discovery, which are designated as "CONFIDENTIAL INFORMATION: OUTSIDE COUNSEL ONLY," shall be limited to: ... Subject to Section 7 of this Order, outside consultants or experts retained by a Requesting Party in this litigation who are not employees of a Requesting Party or its affiliates. (DE-37-1, pg. 9). Sepracor argues that the proposed label does not meet the criteria outlined in paragraph 2 section 2.3 of the protective order. The court agrees. Section 2.3 provides Discovery Material may be designated "CONFIDENTIAL INFORMATION: OUTSIDE COUNSEL ONLY" when the Producing Party believes in good faith that the material contains CONFIDENTIAL INFORMATION and such information relates to: (a) research and development of products or formulations that have not yet been commercialized or published; or Paragraph 4 of the

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(b) licensing agreements and documents discussing the terms of licensing agreements; or (c) company-wide business plans or business forecasts; or (d) such additional categories as may be reasonably agreed between the parties upon request of a party. (DE-37-1, pg. 5). Sepracor seeks to share the information regarding Sandoz's proposed label and section viii amendment with its outside regulatory counsel, select members of the regulatory affairs departments who work with Xyzal and are familiar with its labeling issues, and certain consultants and experts covered by the protective order. The courts finds a legitimate reason and purpose for the modification. Since Sepracor cannot obtain this information directly from the FDA, the alternative would be to discover the information from Sandoz. Sandoz, in advanced, agreed to turn over information regarding their ANDA to Sepracor. As such, the court will allow a limited exception to the protective order in this circumstance. Conclusion For the foregoing reasons, IT IS HEREBY ORDERED that Sepracor's motion to (1) reopen discovery regarding Sandoz's section viii statement and (2) modify the protective order (DE-202) is GRANTED IN PART and DENIED IN PART. Specifically: (a) Sandoz is ordered to respond to inquiries regarding its proposed label; (b) Sandoz is ordered to respond to inquiries regarding its forecasts of prescriptions for the patented method;

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(c) Sandoz is ordered to designate any information regarding its proposed label and forecasts of prescriptions for the patented method as "CONFIDENTIAL INFORMATION". (d) Sepracor is ordered to restrict the information regarding Sandoz's proposed label and forecasts of prescriptions for the patented method to the following: i. ii. outside regulatory counsel; members of the regulatory affairs departments who work with Xyzal and are familiar with its labeling issues; and iii. consultants and experts covered by the protective order.

(e) Sandoz shall not be required to respond to inquiries regarding its manner and timing of the filing of the section viii statement; (f) Sandoz shall not be required to respond to inquiries regarding its sales forecasts and marketing plans; and (g) The discovery period shall be remain open until September 3, 2010.

DONE AND ORDERED in Chambers at Raleigh, North Carolina on Monday, August 09, 2010.

____________________________________ WILLIAM A. WEBB UNITED STATES MAGISTRATE JUDGE

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