FEDERAL TRADE COMMISSION v. ABBVIE INC et al
MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE HARVEY BARTLE, III ON 12/14/15. 12/14/15 ENTERED AND COPIES EMAILED.(rf, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
FEDERAL TRADE COMMISSION
ABBVIE, INC., et al.
December 14, 2015
Before the court are the motions of the plaintiff
Federal Trade Commission (“FTC”) to compel the production of
documents withheld or redacted during discovery by the
defendants AbbVie, Inc., Abbott Laboratories, and Unimed
Pharmaceuticals, LLC (collectively “AbbVie”) and the defendant
Besins Healthcare, Inc. (“Besins”).
Specifically, the FTC seeks
four documents from Besins and forty-one documents from AbbVie.
The defendants assert that these documents are protected by the
attorney-client privilege and/or the work product doctrine.
defendants have submitted these documents to the court for in
The FTC filed this action in September 2014.
Count I of the complaint, the FTC alleges that AbbVie and Besins
filed sham patent infringement actions against Teva
Pharmaceuticals USA, Inc. (“Teva”) and Perrigo Company
(“Perrigo”) to delay approval of their generic drugs in
violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).
The court previously dismissed Count II of the complaint, which
asserted that AbbVie and Teva entered into an anticompetitive
settlement of that patent litigation.
In January 2003, Unimed Pharmaceuticals, Inc.
(“Unimed”) and Besins obtained U.S. Patent No. 6,503,894 (“the
‘894 patent”) for the brand-name testosterone drug, AndroGel.
The ‘894 patent specifically mentions the penetration enhancer
isopropyl myristate. 1
Solvay Pharmaceuticals, Inc. (“Solvay”)
subsequently acquired Unimed.
AbbVie’s predecessor, Abbott
Laboratories (“Abbott”), 2 later acquired Solvay in 2010.
April 2011 and October 2011, the defendants filed patent
infringement lawsuits against Teva and Perrigo, respectively,
for allegedly violating the ‘894 patent.
At the time, Teva and
Perrigo were in the process of seeking approval of their generic
versions of AndroGel from the Food and Drug Administration
The penetration enhancers used in the Teva and Perrigo
generic drugs were isopropyl palmitate and isostearic acid,
1. The court notes that isopropyl myristate is specifically
referenced by name in the ‘894 patent. We do not opine on
whether or not the ‘894 patent covers additional penetration
2. AbbVie came into existence in January 2013, when Abbott
divided into two independent companies: Abbott and AbbVie.
Ordinarily, “[p]arties may obtain discovery regarding
any nonprivileged matter that is relevant to any party’s claim
or defense and proportional to the needs of the case.”
R. Civ. P. 26(b)(1).
The attorney-client privilege and work
product doctrine are two exceptions to this rule.
The burden to
establish that a privilege applies is on the party asserting the
See Conoco, Inc. v. U.S. Dep’t of Justice, 687 F.2d
724, 730 (3d Cir. 1982); Matter of Grand Jury Empaneled Feb. 14,
1978, 603 F.2d 469, 474 (3d Cir. 1979).
of the applicability of privileges to particular documents” and
“decisions as to the amount of information that the District
Court needs in order to make such determinations are committed
to the District Judge's discretion.” 3
See Chao v. Koresko, 2005
WL 2521886, at *4 (3d. Cir. Oct. 12, 2005); Rossi v. Standard
Roofing, Inc., 156 F.3d 452, 477 n.16 (3d Cir. 1998).
may consider affidavits or declarations submitted by the parties
in assessing whether the privileges apply.
See, e.g., Haines v.
Liggett Grp., Inc., 975 F.2d 81, 91-92 (3d Cir. 1992); In re
Chevron Corp., 633 F.3d 153, 165-66 (3d Cir. 2011).
Besins claims that as long as its privilege log entry is
adequate, the burden shifts to the FTC to prove that the
document must be produced. We disagree. Where the court has
the documents before it for in camera review, the court will
look beyond the privilege log descriptions in assessing whether
the attorney-client privilege applies. See, e.g., Chao v.
Koresko, 2005 WL 2521886, at *4 (3d. Cir. Oct. 12, 2005).
The attorney-client privilege precludes discovery of:
“(1) a communication (2) made between privileged persons (3) in
confidence (4) for the purpose of obtaining or providing legal
assistance for the client.”
F.3d 345, 359 (3d Cir. 2007).
In re Teleglobe Commc’ns Corp., 493
It aims “to encourage full and
frank communications between attorneys and their clients.”
Upjohn Co. v. United States, 449 U.S. 383, 389 (1981).
“[b]ecause the attorney-client privilege obstructs the truthfinding process, it is construed narrowly.”
Corp. v. Republic of Phil., 951 F.2d 1414, 1423 (3d Cir. 1991).
It is “strictly confined within the narrowest possible limits
consistent with the logic of its principle.”
Corp. v. Apotex Corp., 232 F.R.D. 467, 472 (E.D. Pa. 2005);
In re Grand Jury Investigation, 599 F.2d 1224, 1235 (3d Cir.
While the privilege protects facts provided in
confidence by the client to the attorney, “[a]n important
limitation of the privilege is that it ‘does not extend to facts
provided by an attorney that do not reflect client
See Samahon v. U.S. Dep’t of Justice, 2015
WL 857358, at *10 (E.D. Pa. Feb. 27, 2015) (citation omitted).
“If the attorney merely conveys facts acquired from persons or
sources other than a client, the communication is not
Becker v. E.I. Du Pont de Nemours & Co., Inc.,
1988 WL 54022, at *2 (E.D. Pa. May 25, 1988).
Given that under
the attorney-client privilege “[f]acts are discoverable, [even
though] the legal conclusions regarding those facts are not,” a
party cannot “refuse to disclose facts simply because that
information came from a lawyer.”
See Rhone-Poulenc Rorer, Inc.
v. Home Indem. Co., 32 F.3d 851, 864 (3d Cir. 1994).
technical information provided to facilitate receiving legal
advice during the patent application process is protected.
SmithKline Beecham Corp., 232 F.R.D. at 483; In re Spalding
Sports Worldwide, Inc., 203 F.3d 800, 806 (Fed. Cir. 2000).
The communication must be between privileged persons,
such as the client, attorney, and “any of their agents that help
facilitate attorney-client communications or the legal
See In re Teleglobe, 493 F.3d at 359; Spear v.
Fenkell, 2015 WL 3822138, at *1 (E.D. Pa. June 1, 2015).
corporate context, employee communications with corporate
counsel are privileged when the employees possess:
[i]nformation, not available from upperechelon management, . . . needed to supply a
basis for legal advice [and] . . . [t]he
communications concerned matters within the
scope of the employees’ corporate duties,
and the employees themselves were
sufficiently aware that they were being
questioned in order that the corporation
could obtain legal advice.
Upjohn Co., 449 U.S. at 394.
In addition, employees may share
legal advice received from attorneys with one another “so that
the corporation may be properly informed of legal advice and act
Se. Pa. Transp. Auth. v. CaremarkPCS Health,
L.P., 254 F.R.D. 253, 258-59 (E.D. Pa. 2008); SmithKline Beecham
Corp., 232 F.R.D. at 477.
There need not be an attorney
participating in the communication if the communication conveys
legal advice to other employees so that they may comply.
King Drug Co. of Florence, Inc. v. Cephalon, Inc., 2013
WL 4836752, at *8 (E.D. Pa. Sep. 11, 2013).
Yet, the involvement of an attorney in the
communication does not mean that the privilege must apply.
Documents lacking any substantive attorney involvement are not
See SmithKline Beecham Corp., 232 F.R.D. at 477.
“In general, attorney-client privilege does not shield documents
merely because they were transferred to or routed through an
Id. at 478 (citation omitted).
Where the party
alleges merely that an internal document was drafted by nonattorneys and incorporates attorney comments, “[t]his is an
insufficient basis to deem the document protected by the
See In re Avandia Mktg., Sales
Practices & Prods. Liab., 2009 WL 4807253, at *3 (E.D. Pa. Oct.
In particular, where the party “does not identify any
specific attorney with whom a confidential communication was
made. . . . [the party] has failed to ‘provide sufficient detail
to demonstrate fulfillment of the legal requirements for
application of the privilege.’”
SmithKline Beecham Corp., 232
F.R.D. at 477 (citation omitted).
Further, while “[d]isclosing a communication to a
third party unquestionably waives the privilege,” the thirdparty consultant and common-interest privilege are two
exceptions to this rule.
See In re Teleglobe, 493 F.3d at 361.
These exceptions “do[ ] not apply unless the conditions of
privilege are otherwise satisfied.”
In re Processed Egg Prods.
Antitrust Litig., 278 F.R.D. 112, 118 (E.D. Pa. 2011) (citation
The party asserting that an exception applies must
first establish that the attorney-client privilege applies.
See, e.g., id.; United States v. LeCroy, 348 F. Supp. 2d 375,
382 (E.D. Pa. 2004).
Under the third-party consultant exception, disclosure
does not waive the attorney-client privilege so long as
“disclosure is necessary to further the goal of enabling the
client to seek informed legal assistance.”
In re Chevron Corp.,
633 F.3d at 165 (quoting Westinghouse Elec. Corp., 951 F.2d at
In the corporate context, “consultants are treated
similarly to employees for purposes of the privilege analysis,
and communications with consultants are privileged as long as
they ‘were kept confidential and made for the purpose of
obtaining or providing legal advice.’”
See King Drug Co., 2013
WL 4836752, at *6 (quoting In re Flonase Antitrust Litig., 879
F. Supp. 2d 454, 459-60 (E.D. Pa. 2012)).
Under the common interest doctrine, communications
between attorneys representing separate clients are privileged
when the clients share a common interest in the outcome of
See In re Teleglobe, 493 F.3d at 364; In re
Processed Egg Prods., 278 F.R.D. at 118; Katz v. AT&T Corp., 191
F.R.D. 433, 437 (E.D. Pa. 2000).
The doctrine applies only
where attorneys, not the clients, share the information.
re Processed Egg Prods., 278 F.R.D. at 118; In re Teleglobe, 493
F.3d at 364.
Although the shared interest must be nearly
identical where two clients share the same attorney, “[i]n the
community-of-interest context, on the other hand, because the
clients have separate attorneys, courts can afford to relax the
degree to which clients’ interests must converge without
worrying that their attorneys’ ability to represent them
zealously and single-mindedly will suffer.”
Teleglobe, 493 F.3d at 366.
See In re
The clients in the community of
interest “must share at least a substantially similar legal
interest” against a common adversary.
See id. at 365.
doctrine “‘applies in civil and criminal litigation, and even in
purely transactional contexts.’”
Id. at 364.
shared interest must be “an identical legal, and not solely
Katz, 191 F.R.D. at 437; In re Processed
Egg Prods., 278 F.R.D. at 118 n.6.
Lastly, the attorney-client privilege only applies if
the communication was made “for the purpose of securing legal
See In re Ford Motor Co., 110 F.3d 954, 965 (3d Cir.
1997), abrogated on other grounds by, Mohawk Indus., Inc. v.
Carpenter, 558 U.S. 599 (2009).
In the corporate setting, it is
often difficult to determine whether a communication was made
for business or legal purposes because legal advice “is often
intimately intertwined with and difficult to distinguish from
See La. Mun. Police Emps. Ret. Sys. v. Sealed
Air Corp., 253 F.R.D. 300, 306 (D.N.J. 2008) (citation omitted).
In recognition that “[i]n-house counsel performs a dual role of
legal advisor and business advisor,” Faloney v. Wachovia Bank,
N.A., 254 F.R.D. 204, 209 (E.D. Pa. 2008), “the corporation
‘must clearly demonstrate that the communication in question was
made for the express purpose of securing legal not business
Kramer v. Raymond Corp., 1992 WL 122856, at *1 (E.D.
Pa. May 29, 1992) (quoting Aamco Transmissions, Inc. v. Marino,
1991 WL 193502, at *3 (E.D. Pa. Sept. 24, 1991)).
“decision on how to market or advertise a product, or what
conditions of sale should apply” is not privileged because
“[a]lthough it is based on legal advice, [the communication] is
primarily a business policy.”
See In re Domestic Drywall
Antitrust Regulation, 2014 WL 5090032, at *4 (E.D. Pa. Oct. 9,
“[W]here a communication contains both legal and
business advice, the attorney-client privilege will apply only
if the primary purpose of the communication was to aid in the
provision of legal advice.”
See Claude P. Bamberger Intern.,
Inc. v. Rohm & Haas Co., 1997 WL 33768546, at *2 (D.N.J. Aug.
The work product doctrine precludes discovery of
documents and other tangible items which were (1) created in
reasonable anticipation of litigation by or for a party and
(2) prepared primarily for the purpose of litigation.
Hickman v. Taylor, 329 U.S. 495, 508 (1947); Fed. R. Civ. P.
The doctrine “‘shelters the mental processes of the
attorney, providing a privileged area within which he can
analyze and prepare his client's case.’”
In re Cendant Corp.
Sec. Litig., 343 F.3d 658, 661–62 (3d Cir. 2003) (quoting United
States v. Nobles, 422 U.S. 225, 238 (1975)).
It protects not
only materials created by the attorney, but also those created
with “the assistance of investigators and other agents.”
Nobles, 422 U.S. at 238.
First, the document must have been created in
reasonable anticipation of litigation.
The relevant inquiry is
“whether in light of the nature of the document and the factual
situation in the particular case, the document can fairly be
said to have been prepared or obtained because of the prospect
Martin v. Bally's Park Place Hotel & Casino,
983 F.2d 1252, 1258 (3d Cir. 1993) (quoting In re Grand Jury
Proceedings, 604 F.2d 798, 803 (3d Cir. 1979)).
considers the author’s subjective state of mind and whether the
anticipation of litigation is objectively reasonable.
at 1260; Advanced Tech. Assocs. v. Herley Indus., Inc., 1996
WL 711018, at *6 (E.D. Pa. Dec. 5, 1996).
The doctrine protects
“material prepared or collected before litigation actually
commences” but at least “some possibility of litigation must
See In re Grand Jury Investigation, 599 F.2d at 1229.
At a minimum, there must be some “litigation on the horizon.”
See In re Grand Jury Subpoena, 745 F.3d 681, 694 (3d Cir. 2014).
Second, the document must have been prepared primarily
for the purpose of litigation.
See Martin, 983 F.2d at 1260-61;
Advanced Tech. Assocs., 1996 WL 711018, at *6.
“Even where the
reasonable anticipation of litigation is established, whether
the document comes within the purview of the work-product
[doctrine] still depends primarily on the reason or purpose for
the document production.”
In re Gabapentin Patent Litig., 214
F.R.D. 178, 184 (D.N.J. 2003).
The doctrine does not apply to
“[m]aterials assembled in the ordinary course of business, or
pursuant to public requirements unrelated to litigation, or for
other nonlitigation purposes’” even if those materials are later
useful in litigation.
See Fed. R. Civ. P. 26(b)(3) advisory
committee’s note to 1970 amendment; Martin, 983 F.2d at 1260.
The work product doctrine is not absolute.
an exception where the document is “otherwise discoverable,” and
a party shows “substantial need for the materials to prepare its
case and cannot, without undue hardship, obtain their
substantial equivalent by other means.”
See Fed. R. Civ. P.
The FTC contends that Besins improperly redacted four
It says these documents are relevant to central
issues in this litigation, including (1) whether AbbVie and
Besins filed patent infringement lawsuits against Teva and
Perrigo to block approval of their generic products in violation
of antitrust laws, and (2) whether Besins knew at the time it
filed a patent infringement lawsuit in 2011 that its original
claims were narrowed to a single penetration enhancer not used
in the Teva or Perrigo products.
In its privilege log, Besins describes the first
challenged document as a December 13, 2001 “[e]mail regarding
recent meeting with patent examiner and examiner’s decision
regarding allowing patent.”
The email was sent by outside
counsel for Besins in the United States, Joseph Mahoney
(“Mahoney”), to outside counsel in Europe, Cyra Nargolwalla.
Jean-Louis Anspach, the President and CEO of Unimed, was copied
on the email.
Cyra Nargolwalla forwarded the email to Besins
employee Phillipe Cornu who forwarded the email to other Besins
The only redacted sentence in this document relayed a
statement made by a United States Patent and Trademark Office
examiner to Mahoney concerning the patent application.
contained an unprivileged “fact[ ] provided by an attorney that
do[es] not reflect client confidences.”
WL 857358, at *10.
See Samahon, 2015
There are no accompanying legal conclusions
or perceptions, and the redacted sentence does not include
qualifying language such as “I believe” or “my opinion is.”
attorney-client privilege does not protect communications in
which “the attorney merely conveys facts acquired from persons
or sources other than a client.”
See Becker, 1998 WL 54022, at
Although Besins claims that the redacted statement
succinctly incorporated Mahoney’s mental impressions, the court
cannot plausibly read the sentence in this way.
that the redacted statement contains a mental impression because
it is not a direct quote from the publically available interview
summary and because the patent was not yet finalized.
misconstrues the nature of the privilege.
A discoverable fact
can emerge from a meeting with the patent examiner regardless of
whether that fact is reflected in the interview summary notes or
whether the patent application has been finally approved.
Further, the court has examined the interview summary notes and
does not find those notes inconsistent with Mahoney’s factual
Besins cannot “refuse to disclose facts simply
because that information came from a lawyer.”
Rorer, 32 F.3d at 864.
Accordingly, Besins has not met its
burden to demonstrate that this email is protected by the
attorney-client privilege. 4
Turning to the second challenged document, Besins
claims the attorney-client privilege protects an “[e]mail from
Tom Macallister [sic] reporting on: (1) Besins’s worldwide
business developments concerning AndroGel and other matters and
describing legal implications associated with possible courses
of action concerning same and (2) the present status of the
ongoing Teva and Perrigo litigations.”
The email was sent by
Thomas MacAllister to Besins senior managers Antoine Besins,
Leslie Grunfeld, and Jay Bua on December 1, 2011.
MacAllister’s signature line in that email, MacAllister was
4. Although Besins claims that Mahoney’s mental impressions are
conveyed in the redacted sentence, Besins does not assert the
work product doctrine. Where the party “ha[s] not even claimed,
much less demonstrated that the [documents] . . . were prepared
in anticipation of, or in preparation for, litigation,” the work
product doctrine does not apply. See Cedrone v. Unity Sav.
Ass’n, 103 F.R.D. 423, 426 (E.D. Pa. 1984).
President and Chief Executive Officer of “BHR Pharma, LLC” which
is a “Besins Healthcare Company.”
The signature line also noted
that MacAllister had a law degree and a Ph.D. degree.
characterizes MacAllister as in-house counsel, who “also served
in a business capacity as president and CEO.” 5
Although information related to other products and
pending matters is provided in full, the paragraphs labeled
“AndroGel 1% BE” and “AndroGel 1.62% BE” contain redactions. 6
paragraph labeled “Litigation” is also redacted.
contends that these redacted portions contain MacAllister’s
legal advice in light of settlement negotiations that were
either in progress or foreseeable at the time.
concedes that these paragraphs mix business and legal issues, it
maintains that “the salient information and opinion conveyed
represents a lawyer’s reading of the legal considerations that
he is advising his client to consider in making a decision.”
5. Besins makes this claim in briefing papers filed in response
to the FTC’s motion to compel production but has not submitted a
sworn declaration in support of this contention.
6. Besins explained that “BE” refers to bioequivalence studies.
These studies are performed to determine whether two similar
drugs are effectively the same. “The Federal Food, Drug, and
Cosmetic Act . . . and FDA regulations require that an
[abbreviated new drug applications] applicant submit, among
other things, information showing that the applicant’s drug
product is bioequivalent to the approved product designated by
FDA as the reference listed drug.” See U.S. Food & Drug Ass’n,
Submission of Summary Bioequivalence Data for ANDAs: Guidance
for Industry, at 2 (2011).
In the paragraph labeled “AndroGel 1% BE” in document
2, MacAllister referenced pending litigation to estimate when
competitors will likely enter the market for generic drugs.
MacAllister indicated that Besins was itself deciding whether or
not to enter that market.
MacAllister relied on the estimated
dates that competitors will enter the market to estimate a date
when Besins should enter the market.
He further discussed the
commercial benefits of undergoing bioequivalence studies in
light of the anticipated competition.
A bioequivalence study is a required component of the
application for FDA approval of a generic drug.
cannot sell generic drugs without having first performed such a
Thus, a company decides whether or not to move forward
in obtaining FDA approval and perform the bioequivalence study
if the company determines in its business judgment that the
product will be profitable.
The number of anticipated
competitors is one relevant business consideration that the
company takes into account in assessing its own potential for
MacAllister’s communications, which undertook this
business analysis, reflect business concerns.
As such, despite
making reference to legal matters, this paragraph is primarily,
if not exclusively, concerned with providing business advice.
See Kramer, 1992 WL 122856, at *1; Domestic Drywall, 2014
WL 5090032, at *4.
The same is true of the first redacted portion in the
paragraph labeled “AndroGel 1.62% BE” in document 2.
Besins redacts the date it expected to enter the generic market.
This estimate is the product of a business analysis of the
competition in the market for the generic drug.
1992 WL 122856, at *1.
In addition, in unredacted text
immediately after the entry date estimate, MacAllister discussed
possible locations for conducting the bioequivalence study.
entry date is mentioned to assess future steps Besins should
take in pursuing its business strategy, including conducting
bioequivalence studies, in light of competitor entry dates.
is not mentioned for the purpose of obtaining legal advice.
In re Teleglobe, 493 F.3d at 359.
Accordingly, Besins has not
carried its burden to show that this redacted portion was for
the purpose of obtaining or providing legal assistance.
The second redacted portion in the “AndroGel 1.62% BE”
paragraph contemplated a business decision which had legal
Although this redacted portion “examined the
legal implications of some of those concerns” see In re Ford
Motor Co., 110 F.3d at 966, it ultimately sought to prevent a
product launch delay because be harmful to its business
MacAllister asked his senior management colleagues
“WILL YOU PLEASE LET ME KNOW YOUR THOUGHTS ON THIS POINT?,”
thereby eliciting business advice from business colleagues
rather than providing legal advice.
Construing the privilege
narrowly as required, this portion of the email is not
privileged because it was concerned with receiving business
advice, not providing legal advice.
See Kramer, 1992 WL 122856,
at *1; Westinghouse Elec. Corp., 951 F.2d at 1423.
The third paragraph of document 2, entitled
“Litigation,” paragraph discussed pending litigation but is not
privileged because Besins has not carried its burden to
demonstrate “the primary purpose of the communication was to aid
in the provision of legal advice.” Claude P. Bamberger Intern.,
Inc., 1997 WL 33768546, at *2; Faloney, 254 F.R.D. at 209-10.
For example, no privilege applies when business colleagues
discuss pending litigation and the likelihood of settlement so
as to plan a business strategy because such a discussion is not
for the purpose of providing or obtaining legal advice.
In re Teleglobe, 493 F.3d at 359.
Here, MacAllister certainly
updated Besins senior management on the status of pending
Yet, after a careful in camera review, we cannot
distinguish the litigation matters discussed in this paragraph
from those discussed earlier in the email.
As the court already
explained, those other portions of the email were concerned with
calculating competitor market entry dates to plan business
To the extent that MacAllister’s “Litigation”
paragraph discussed pending litigation and estimated the
likelihood that that litigation will settle, MacAllister did
nothing more than provide context for his business colleagues to
understand the significance of his earlier discussions.
has not met its burden to prove otherwise.
Again, construing the privilege narrowly, we find that
this case is distinguishable from In re Ford Motor Co., 110 F.3d
954, 966 (3d Cir. 1997).
There, our Court of Appeals held that
the attorney-client privilege applied to portions of a business
meeting where in-house counsel proposed legal solutions to
automobile safety concerns raised by the client.
In that case,
“the communications were privileged because Ford had concerns
about a particular product, Ford’s lawyer examined the legal
implications of these concerns and proposed a course of action,
and the meeting was called, in part, to discuss this proposal.”
See Faloney, 254 F.R.D. at 210; In re Ford Motor Co., 110 F.3d
Here, Besins has not demonstrated that MacAllister was
proposing a course of action to address legal concerns.
MacAllister offered a business strategy to address business
Of course, a business strategy is always infused with
some legal concerns, particularly where the business strategy
focuses on the likelihood of competitor actions.
MacAllister’s communication was for the purpose of business
rather than legal concerns, this communication is not
The privilege log describes the third document as an
“[e]mail to counsel regarding Isosteric [sic] Acid Analysis” and
states that the redaction is based on attorney-client privilege.
This February 22, 2011 email was sent by Maynard Lichty, a
senior director of pharmaceutical development for BHR Pharma,
LLC, to MacAllister and in-house counsel Denis Canet.
entire email body is redacted.
The subject of the email and
title of the attached document were not redacted and read:
“isostearic acid” and “Quotation Request for Isostearic Acid
The attachment to the document was
produced in its entirety.
We find that the document is protected by the
attorney-client privilege and need not be produced to the FTC.
This document is a confidential communication by the client to
its attorney for the purpose of obtaining legal assistance.
In re Teleglobe, 493 F.3d at 359.
The fourth document is a July 2, 2001 email from inhouse counsel Brigitte Taravella to several individuals
including: (1) outside counsel Cyra Nargolwalla; (2) employees
Medecin Consultant (“Bruno de Lignieres”), Florence Hainque,
Valerie Masin-Eteve; and (3) third parties Jerome Besse and
Besins supplied two privilege log entries
claiming attorney-client privilege for this document.
entry is for an “[e]mail transmitting expert analysis of ‘894
patent application and outlining the purpose and goals of an
upcoming meeting between Besin [sic] personnel and Besins’s
French IP counsel.”
The second entry is for the attachment to
that email and reads: “[c]omments of experts/professors on draft
‘894 patent application prepared in anticipation of upcoming
meeting with Besins’s French IP counsel regarding the ‘894
The document is in French, and Besins has
provided the court with a verified translation.
Setting aside for the moment the issue of whether a
waiver based on disclosure to a third party has occurred, the
court finds that the attorney-client privilege otherwise applies
to this email and its attachments.
privilege protects “an exchange of technical information
necessary so that an . . . employee c[an] secure legal services
or legal advice” on behalf of the client corporation.
SmithKline Beecham Corp., 232 F.R.D. at 481.
Both the email and
its attachment are confidential communications between Besins
and its attorneys for the purpose of providing and receiving
legal assistance with the patent application.
Turning now to the issue of waiver, we find that
Besins did not waive the attorney-client privilege by disclosing
the communication to third-party consultants, Wepierre and
A party does not “waive the privilege merely by
revealing confidential communications to its own consultant.”
See id. at 477.
Besins has not waived the attorney-client
privilege where it relied on Wepierre and Besse to supply
technical knowledge necessary to facilitate the provision of
“competent and accurate legal advice” concerning its patent
See In re Flonase, 879 F. Supp. 2d at 459-60.
The FTC has also moved to compel production of fortyone documents that AbbVie has redacted or withheld.
As with the
Besins documents, the FTC claims that these materials are not
privileged because they were either prepared for business
purposes or shared with third parties.
The FTC asserts that
these documents are relevant to: (1) whether AbbVie has monopoly
power in the AndroGel market; (2) whether the defendants
improperly used sham litigation to block approval of
competitors’ generic drug applications; (3) whether AbbVie knew
that its patent claims were narrowed to a single penetration
enhancer at the time it filed the patent infringement suit; and
7. According to Besins, at the time of this communication,
Wepierre “was a professor in the pharmacy school/division of the
University of Paris-Sud and an expert in pharmacological
toxicology” and “[a]t the request of Besins, in the mid-1990s,
he worked on early testing of a testosterone gel formulation.”
“Jerome Besse was an employee of Galenix Innovations, a research
laboratory with which Besins worked in developing various
hormone based products including those involving testosterone.”
(4) the amount of equitable monetary relief available in this
AbbVie has submitted declarations, which it claims
establish that the redacted materials are privileged.
For the first eighteen challenged documents, AbbVie
claims work product protection in its privilege log for
“[s]preadsheet[s] prepared for and at the request of counsel for
use in legal analysis regarding AndroGel forecasting.”
declaration, AbbVie’s in-house counsel Perry Siatis (“Siatis”)
stated that an Abbott employee created these forecasting
documents in August 2011 at his request for the purpose of
assessing settlement of the patent infringement litigation with
Teva 8 and anticipated litigation with Perrigo. 9
In addition, by
sworn declaration, Abbott’s non-attorney employee, Donna
O’Connor, stated that she and another employee “created the
spreadsheets for the specific and sole purpose of analyzing the
relevant data and transmitting the results of the analyses to
Mr. Siatis in accordance with Mr. Siatis’ request to [her].”
Relying on these sworn declarations and our own
in camera review, we find that the documents are privileged work
product prepared at counsel’s request because of and in
8. AbbVie and Besins sued Teva in April 2011. AbbVie, Besins,
and Teva agreed to settle this lawsuit in December 2011.
9. AbbVie and Besins sued Perrigo in October 2011. AbbVie,
Besins, and Perrigo agreed to settle this lawsuit in December
anticipation of litigation.
See Haines, 975 F.2d at 91-92;
In re Chevron Corp., 633 F.3d at 165-66.
The work product
doctrine applies to materials created by attorneys and their
agents in anticipation of litigation.
The FTC has not
demonstrated a “substantial need for the materials to prepare
its case” nor that it “cannot, without undue hardship, obtain
their substantial equivalent by other means.”
See Fed. R. Civ.
P. 26(b)(3); In re Processed Egg Prods., 278 F.R.D. at 118.
As to document 19, the privilege log claims attorneyclient privilege for an “[e]mail thread requesting legal advice
and providing information for the purpose of obtaining legal
advice regarding AndroGel regulatory strategies and decision to
file Perrigo AndroGel patent suit.”
The FTC argues that the
email thread contains business information, not privileged legal
It says that the first email in the thread, which
is unredacted, provides “competitive intelligence” information
about rival products to six business employees.
The next email
in the thread, which is redacted, was sent by James Hynd,
AbbVie’s Vice President of Sales and Marketing, forwarding the
original competitive intelligence email to two more business
employees on August 3, 2011.
The final redacted email was sent
by James Hynd and forwarded the email thread to four employees
including in-house counsel Siatis on August 9, 2011.
stated in a sworn declaration that the email thread reflects a
request for his legal advice.
As for the August 3, 2011 email, the redaction was
improper and the content of this email must be produced.
is no privilege where one non-attorney employee states to
another non-attorney employee his or her desire to speak with
This is not a communication between
privileged persons for the purpose of obtaining legal advice.
See In re Teleglobe, 493 F.3d at 359.
In fact, this email does
not even contain confidential information.
It is clear from
subsequent unredacted emails and sworn declarations that inhouse counsel was in fact consulted on this subject.
In addition, AbbVie has not met its burden to
demonstrate that the August 9, 2011 email to Siatis is
Although Siatis claimed by sworn declaration that
the email was a request for legal advice, AbbVie has not
provided any supporting information that would allow the court
to reach the same conclusion.
The attorney-client privilege
does not apply to every communication between corporate counsel
and corporate employees.
See In re Domestic Drywall Antitrust
Regulation, 2014 WL 5090032, at *3; Kramer, 1992 WL 122856, at
It also does not apply if the client seeks regulatory
advice for a business purpose.
See In re Avandia, 2009
WL 4807253, at *6; In re Grand Jury Matter, 147 F.R.D. 82, 85
(E.D. Pa. 1992).
Rather, the communication must have been “for
the purpose of securing legal advice.”
Co., 110 F.3d at 965.
See In re Ford Motor
“[W]hen a client's ultimate goal is not
legal advice, but is rather accounting, medical, or
environmental advice, the privilege is inapplicable.”
Grand Jury Matter, 147 F.R.D. at 85.
In the corporate context,
“[a]lmost any act by a business . . . carries the potential for
running afoul of some law or regulation or giving rise to a
civil action. . . . [yet] [t]he fact of extensive or pervasive
regulation does not make the everyday business activities
legally privileged from discovery.”
Rowe v. E.I. DuPont de
Nemours & Co., 2008 WL 4514092, at *9 (D.N.J. Sep. 30, 2008).
Here, an AbbVie non-lawyer employee alerted in-house
counsel that “we ought to consider a regulatory strategy.”
Based on the information in the record about the nature of this
request, the court does not find that this communication sought
As a participant in a highly-regulated industry,
a pharmaceutical company must consider regulatory matters in
making nearly all of its business decisions.
We note that the
attorney-client privilege “is construed narrowly.”
Westinghouse Elec. Corp., 951 F.2d at 1423.
AbbVie has not met
its burden to demonstrate that this email was sent to in-house
counsel for the purpose of securing legal advice rather than
See Kramer, 1992 WL 122856, at *1.
Documents 20 to 30 10 are PowerPoint presentations
drafted by Abbott employees in 2009.
These due diligence
documents concern Abbott’s acquisition of Solvay, which has code
names including “Project Chocolate” and “Project Phoenix.”
Abbott acquired Solvay in February 2010.
At the time of this
acquisition, Solvay and Besins co-owned the AndroGel patent.
The privilege log entries claim: (1) attorney-client privilege
for documents 20, 25, 26, 27, and 29 described as “[d]ue
diligence performed at request of counsel regarding legal advice
related to Solvay acquisition” and the work product doctrine for
document 29; (2) attorney-client privilege and work product
doctrine for documents 22, 23, and 24 described as
“[p]resentation[s] prepared at request of counsel regarding
legal advice related to due diligence of Solvay acquisition”;
and (3) attorney-client privilege and work product doctrine for
document 30 described as a “[p]resentation regarding legal
advice related to litigation as part of Solvay integration
prepared at the request of counsel.”
According to AbbVie, these documents were all prepared
“as part of its due diligence before acquiring the Solvay
Siatis submitted a sworn declaration
explaining that “[m]any of these presentations contained legal
10. AbbVie has not supplied the court with documents 21 and 28
and represents that the parties have resolved the dispute
concerning these documents.
advice that I or others in Abbott’s legal department provided,
as well as requests for me or others in Abbott’s legal
department to provide legal advice on issues that at the time
still needed to be addressed.”
Siatis added that “[t]he
redacted material is not ‘business information’—although the
legal advice was on the subject of Solvay’s business.”
The court begins with documents 22, 23, 24, 29, and
Although these are Abbott documents created by non-attorney
employees as a part of its due diligence research for the
possible acquisition of Solvay, AbbVie claims the work product
AbbVie cites Louisiana Municipal Police
Employees Retirement System v. Sealed Air Corp., 253 F.R.D. 300,
308 (D.N.J. 2008), in support of this proposition.
Louisiana Municipal Police does not apply here.
In that case,
the United District Court for the District of New Jersey held
that the work product doctrine applied to documents prepared
because of an anticipated acquisition where “the primary purpose
of the transaction was to insulate an entity from multiple
See id. at 307.
the whole deal was about.”
The litigation “[wa]s what
Id. at 308.
As such, the
acquisition documents were “prepared primarily for legal
However, that court noted that the case before
it presented a “somewhat unusual situation” and, typically,
“[a]lmost all corporate transactions are business based. . . .
in most circumstances the business aspect, i.e., the growth of
business and development of profit, is the engine driving the
Id. at 307.
In this case, the documents were not prepared because
of litigation and the attorney work product doctrine does not
Unlike Louisiana Municipal Police, Abbott has put forth
no argument that it acquired Solvay for the purpose of acquiring
Rather, as the contested documents demonstrate,
Abbott acquired a vast product portfolio from Solvay for the
typical reason — because it believed doing so would be
These presentations were not created because of
litigation, but were created for the purpose of informing
Abbott’s business decision to acquire Solvay.
Even if Abbott
did not anticipate becoming involved in any Solvay-product
litigation after acquiring Solvay, Abbott would have created
these documents to inform its business decision nonetheless.
Here, as “in most circumstances . . . the growth of business and
development of profit, [wa]s the engine driving the deal.”
AbbVie also claims the attorney-client privilege for
documents 20, 22, 23, 24, 25, 26, 27, 29, and 30.
None of these due diligence documents is privileged.
Taking documents 22 and 23 11 first, according to the
privilege log, they were created by a non-attorney employee and
sent to Siatis and two other in-house counsel.
Siatis has claimed that the redacted portion contains a request
for legal advice addressed to the legal department.
AbbVie has not demonstrated that these are legal
issues, rather than business issues.
However, even if the court
were to find that these due diligence presentations mention
legal matters, these presentations were created for business
To the extent that these due diligence documents
reference legal issues, this was done to provide context for a
business acquisition decision, not to obtain or provide legal
La. Mun. Police Emps. Ret. Sys., 253 F.R.D. at 306.
Thus, “the communication in question was [not] made for the
express purpose of securing legal not business advice.’”
Kramer, 1992 WL 122856, at *1.
Further, the redactions note the
need to review contracts as a part of the due diligence effort.
This is not a request for or provision of legal advice.
it is simply a notation concerning a task that Abbott seeks to
accomplish before acquiring Solvay.
But for the privilege,
Abbott would nevertheless have made these notations in
accomplishing its due diligence.
Construing the privilege
11. The FTC only challenges the redactions on Bates-numbered
pages AGEL-PA-006-0000138, AGEL-PA-006-0000139, AGEL-PA-0060000145, and AGEL-PA-006-0000152.
narrowly, we find that the privilege does not apply to these
business communications. 12
The same is true for documents 20, 25, 26, and 27
entitled “Project Chocolate PPD Commercial: Due Diligence –
In these documents, Abbott assessed: (1) Key
Findings/Major Issues; (2) Key Brand/Forecast Issues; (3)
Follow-Up Required; and (4) Recommendation and Red Flags with
regard to numerous Solvay products.
The due diligence documents
analyzed business concerns that could have arisen in acquiring
These business concerns included annual
sales, product marketing and promotion, market competition,
potential research issues, and development strategies.
AbbVie has not carried its burden to prove that these
communications were made for the purpose of obtaining or
providing legal advice.
Although the subjects referenced in the
document, including contract obligations, market entry dates,
and patent protection, could be concerned with legal advice,
they are here discussed only to the extent that they have
Every reference in a business document
to a contract obligation cannot be legal advice or the attorneyclient privilege would broadly apply to many non-legal, business
Such an interpretation would be inconsistent
12. As to the redacted portions on AGEL-PA-006-0000152, we will
not require production because these redactions specifically
reference unrelated products, as stated in Siatis’s declaration.
with the mandate of our Court of Appeals that the attorneyclient privilege be narrowly construed.
See Westinghouse Elec.
Corp., 951 F.2d at 1423.
Similarly, where Abbott mentioned a likely market
entry date for generic competitors and the expected duration of
patent exclusivity, this was to prepare a strategy for marketing
and promoting Solvay’s products.
Even though in-house counsel
may have been consulted to help determine the market entry date
for those competitors, this does not mean that any document
using that date must be privileged.
Moreover, counsel’s role in
these documents is unclear where the documents were not prepared
by or sent to counsel.
Although Siatis’s declaration asserted
that the privilege should apply, it does not provide any
additional information to help the court understand counsel’s
See In re Avandia, 2009 WL 4807253, at *3; SmithKline
Beecham Corp., 232 F.R.D. at 477.
Accordingly, AbbVie must
produce the redacted sections that relate to AndroGel.
As for document 24, 13 only the redactions on Batesnumbered page AGEL-PA-006-0000155 concern AndroGel.
declaration of Siatis stated that although the document was
prepared by a non-attorney, the redactions contain the mental
13. AbbVie’s briefing papers explain that the fifth bullet
point under the “Follow-Up Required” heading was inappropriately
redacted and that it has produced an updated document 24 without
redacting that portion.
impressions and legal advice of in-house counsel.
This is another due diligence document created
pursuant to a business strategy.
Legal issues are referenced
only to the extent that they have specific business
For example, redacted portions concern Solvay’s
obligations under an agreement held by Solvay.
discussed this agreement to assess its business decision to
acquire Solvay, not to obtain legal advice.
Documents 29 and 30 were drafted by a non-attorney
Abbott employee and sent to several Abbott attorneys and a nonattorney.
These documents are essentially identical.
redacted portion falls on a page titled: “US Commercial Solvay
Integration Highlights as of Oct 15, 2009” under a subheading
titled: “Notable Commercial Learnings.”
As above, to the extent
that these documents reference regulatory requirements, they
reflect business, not legal, concerns.
See In re Avandia, 2009
WL 4807253, at *6; In re Grand Jury Matter, 147 F.R.D. at 85.
Although the documents were sent to counsel by a non-attorney,
AbbVie claims that the documents contain, not request, legal
advice on FDA proceedings.
AbbVie has not explained how legal
advice came to be incorporated into this document created by a
non-attorney nor in what capacity the document’s author created
AbbVie has not met its burden to establish
that these documents are privileged.
Documents 31 to 34 are emails exchanged between
counsel for Abbott and counsel for Solvay in October 2009.
These emails were entirely withheld from the FTC.
privilege log describes these documents as “[e]mail thread[s]
involving counsel for Solvay, Shannon Klinger, and counsel for
Abbott, Steven Gersten and Perry Siatis, requesting and
providing information for the purpose of giving legal advice and
providing legal advice regarding Perrigo Paragraph IV letters.”
AbbVie maintains that these emails are protected under the
attorney-client privilege, including joint defense and common
interest, and the work product doctrine.
By sworn declaration,
Siatis stated that Abbott and Solvay shared a common legal
interest at the time of these emails because they had signed an
acquisition agreement on September 26, 2009.
that “[b]ecause Abbott agreed to acquire Solvay . . . Abbott and
Solvay shared a common legal interest with respect to AndroGel.”
The acquisition was completed in February 2010.
The court finds that the attorney-client privilege
applies to these emails between privileged persons sent for the
purpose of providing and receiving legal advice, and that a
third party’s participation in these emails did not result in a
waiver of the privilege.
We also find that the common interest
doctrine applies because Solvay and Abbott “share[d] at least a
substantially similar legal interest” in actual or potential
litigation against a common adversary.
493, F.3d at 365.
See In re Teleglobe,
The common interest doctrine applies “even if
there is no ‘final’ agreement or if the parties do not
ultimately unite in a common enterprise.”
See Katz, 191 F.R.D.
Having signed an agreement to acquire Solvay on
September 26, 2009, Abbott and Solvay shared a common interest
in litigation concerning Solvay products when these emails were
exchanged in October 2009.
In addition, unlike the due
diligence documents discussed above, these email communications
were made “to obtain informed legal advice which might not have
been made absent the privilege.”
425 U.S. 391, 403 (1976).
See Fisher v. United States,
The emails concern a specific and
identifiable litigation issue that concerned Solvay as the
holder of the ‘894 patent and Abbott as the agreed-acquirer of
those patent rights.
See Katz, 191 F.R.D. at 437.
documents 31, 32, 33, and 34 are privileged and need not be
As for documents 35 to 39, AbbVie’s privilege log
asserts the attorney-client privilege for “[e]mail thread[s]
memorializing and forwarding legal advice, requesting
information for the purpose of obtaining legal advice, and
providing information for purpose of obtaining legal advice from
counsel, Joseph Mahoney, Walt Linscott and Legal Department,
regarding AndroGel patent filing and AndroGel patent
AbbVie states that these emails
concern a patent communication plan for notifying potential ‘894
patent infringers. 14
On the other hand, the FTC characterizes
documents 35 to 41 as “an email chain among business people
relating to a public relations plan.”
The email subject line
reads: “AndroGel Patent Communication Plan.”
First, these January 2003 emails are relevant to the
Although AbbVie asserts that resolution of
the present litigation will be “determined solely from the
public record, informed as necessary by expert testimony,” this
is not correct.
The FTC has alleged that AbbVie filed sham
The ‘894 patent issued on January 7, 2003.
Emails written by AbbVie’s predecessor, Solvay, in January 2003
about the nature of the ‘894 patent are certainly relevant to
the FTC’s claims.
These emails shed light on how Solvay and its
competitors perceived the patent at the time it was issued.
Second, these emails do not fall within the ambit of
the attorney-client privilege.
The only attorney recipient of
these emails, in-house counsel Walt Linscott, is merely copied
on the email thread and does not contribute to the discussion.
14. AbbVie also argues that the FTC’s privilege challenge is
untimely because the FTC had these privilege logs since 2007 and
never challenged them in prior patent litigation. This argument
is without merit.
See SmithKline Beecham Corp., 232 F.R.D. at 478.
these emails concern a business strategy, not a legal strategy.
However, to the extent that any advice is provided in these
emails, it appears to come entirely from non-attorney employees.
By sworn declaration, outside counsel Joseph Mahoney (“Mahoney”)
stated that he provided the legal advice to inform those nonattorneys’ opinions.
But the non-attorneys offered varying and
contradictory opinions about the correct course of action.
Mahoney has not identified the individual or individuals to whom
he provided advice nor what the nature of that advice was.
Mahoney is not even included on any of these emails.
the non-attorney participants had differing ideas, these cannot
all reflect Mahoney’s legal advice.
AbbVie has not met its
burden to demonstrate that the privilege applies where it “has
failed to ‘provide sufficient detail to demonstrate fulfillment
of the legal requirements for application of the privilege.’”
See SmithKline Beecham Corp., 232 F.R.D. at 477 (citation
As for document 40, AbbVie’s privilege log claims the
attorney-client privilege for an “[e]mail attachment
memorializing and forwarding legal advice from counsel, Joseph
Mahoney, regarding AndroGel patent application and patent
The email is dated August 27, 2001 and the
attached meeting notes are dated August 23, 2001.
email was provided in full, a section of the attached meeting
notes labeled “Patent protection” was redacted.
We find that
the redacted portion of the document provided legal advice or
opinions of the patent attorney to the client.
discussed and conveyed the patent attorney’s legal impressions
to other employees so that they could adhere to that advice.
See King Drug Co., 2013 WL 4836752, at *8.
The privilege log concludes with document 41.
describes the document as a “[d]raft presentation attached to
email reflecting and memorializing legal advice regarding patent
exclusivity assumptions and potential litigation involving AIP,
prepared in anticipation of litigation of same.”
the attorney-client privilege and work product.
The email was
provided in full and explains that the attachment concerns Key
Strategic Initiatives and Objectives.
The email sent by a non-
attorney employee requested that the nine non-attorneys and one
in-house counsel recipients “review the attached draft and
provide your comments/edits . . . regarding the Key Strategic
Initiatives and Objectives” and “[f]eel free to also make
suggestions on the other sections of the document.”
attached document is titled “Solvay Pharmaceuticals: 5 Year Plan
2002 – 2006.”
The FTC only challenges the two redactions that
relate to AndroGel.
By declaration, Mahoney, outside counsel for Solvay,
stated that the challenged portions “contain the endpoints of
[his] legal analysis of certain statutes and regulations as they
applied to Solvay’s circumstances.”
The first contested
redaction is on an entirely redacted page, AGEL-PA-006-0001492.
The table of contents identifies the title of document 41 as
“Exclusivity/Generic/Life Cycle/Extension Assumptions.”
second challenged redaction is on page AGEL-PA-006-0001498
titled “Commercial Strategy Assumptions.”
The redacted portion
follows an unredacted sentence reading: “Drive AndroGel and
Marinol to significant growth.”
These documents were created by a business employee
for the purpose of planning business strategy for Solvay.
Solvay’s strategies to extend a product’s life cycle and
exclusivity are commercial, not legal, in nature.
In the highly
regulated pharmaceutical industry, business decisions are often
made after referencing a statute or regulation.
example, the length of a patent’s exclusivity or plans for
launching a product are not privileged simply because they are
determined by referencing a statute or regulation.
See In re
Avandia, 2009 WL 4807253, at *6; In re Grand Jury Matter, 147
F.R.D. at 85.
The court finds that the attorney-client
privilege does not apply to the redacted statements drafted by
business employees to plan Solvay’s commercial strategy.
Finally, the work product doctrine does not apply.
AbbVie has not explained how these business planning documents
relate to anticipated litigation.
These documents were created
in the ordinary course of business and would have been created
irrespective of whether any litigation was pending in order to
assess Solvay’s business strategy for AndroGel.
Westinghouse Elec. Corp., 951 F.2d at 1423.
portions of these pages concerning AndroGel must be produced.
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