Palmetto Pharmaceuticals LLC v. AstraZeneca Pharmaceuticals LP

Filing 342

ORDER re 265 Report and Recommendation. The Court denies 203 Defendant's motion to strike the Plaintiff's experts. Having denied the Defendant's Daubert motion, the Court finds, for the reasons set forth b y the Magistrate Judge in the R&R (ECF # 265), that genuine issues of material fact exist and therefore, the Court denies 134 Motion for Summary Judgment and also denies 320 Motion to Strike. The Court grants 322 Plaintiff's Motion to Se al its supplemental Daubert Brief. Finally, the Court requests that the parties confer and submit a proposed amended scheduling order (or orders if the parties cannot agree) within fourteen days of the date of this order. Signed by Honorable Sol Blatt, Jr on 4/2/2014.(vdru, ) Modified to edit text on 4/2/2014 (vdru, ).

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF SOUTH CAROLINA

CHARLESTON DIVISION

Palmetto Pharmaceuticals LLC,
Plaintiff,

v.
AstraZeneca Pharmaceuticals LP,
Defendant.

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Civil Action NO.2: 11-807-S8

ORDER

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Palmetto Pharmaceuticals LLC ("the Plaintiff" or "Palmetto") filed this patent
infringement action against AstraZeneca Pharmaceuticals LP ("the Defendant" or
"AstraZeneca") on April 5, 2011.

On May 16, 2011, the Plaintiff filed an amended

complaint alleging direct, induced, contributory, and willful infringement of United States
Patent No. 6,465,516 ("the '516 patent") pursuant to 35 U.S.C. § 271 (a)-(c).
On. June 15, 2011, the Defendant filed a motion to dismiss, or in the alternative, for
summary judgment. Then, on November 15, 2011, pursuant to 28 U.S.C. § 636 and Local
Civil Rule 73.02(C)(7), D.S.C., the Court referred this matter to United States Magistrate
Judge Jacquelyn D. Austin for pre-trial management. On January 4, 2012, Magistrate
Judge Austin issued a report and recommendation (UR&R") outlining the issues and
recommending that the Court grant the Defendant's motion as to the Plaintiff's claims of
directinfringementunder28 U.S.C. § 271(a)and contributory infringement under35 U.S.C.

§ 271 (c), but that the Court deny the Defendant's motion as to the Plaintiff's claims of
induced infringement under 35 U.S.C. § 271 (b) and willful infringement. When neither
party filed objections to the R&R, the Court issued an order on February 14, 2012, adopting
the Magistrate Judge's recommendations.

The parties pursued limited discovery on the issues of infringement and inducement.
On July 13, 2012, the Defendant filed a motion for summary judgment arguing that it did
not induce doctors to infringe the '516 patent under 35 U.S.C. § 271(b). The Plaintiff
responded to the Defendant's motion and proffered evidence, including the expert
testimony of Drs. John Hallett, Uri Elkayam, and Jerry Back. On August 21, 2012, the
Defendant filed a motion to strike allegedly objectionable evidence relied upon by the
Plaintiff, as well as a motion to exclude the Plaintiffs experts pursuant to the Federal Rules
of Evidence and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). The
Magistrate Judge held a hearing on these three motions on November 29, 2012. On
February 26, 2013, Magistrate Judge Austin filed an R&R recommending that the Court
deny the Defendant's motion for summary judgment. At the same time, Magistrate Judge
Austin filed an order finding the Defendant's evidentiary motions moot.
On March 18, 2013, the Defendant filed objections to the R&R. The Plaintiff filed
a response, and the Defendant filed a reply. In its objections, the Defendant asserts that
the Magistrate Judge erred by failing to perform the gatekeeper function prior to deciding
the summary judgment motion and that no genuine issue of material fact exists.
On May 8, 2013, the Defendant filed a motion for a status conference. As a result,
the Court scheduled a hearing for July 23,2013, at which hearing the Court decided that
it was not fair to rule on the Defendant's summary judgment motion without first deciding
the Defendant's Daubert motion. Therefore, on September 11, 2013, the Court held a
hearing on the Daubert motion, following which the Court asked the parties to submit
proposed findings of fact and conclusions of law along with any supplemental briefs the
parties wished to file. The parties filed supplemental briefs and proposed findings and

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conclusions on November 15, 2013.
After a review of the record, including the R&R, the Defendant's objections, the
hearing transcripts, the parties' various briefs, and their proposed findings and conclusions,
the Court issues this order denying the Defendant's Daubert motion and the Defendant's
motion for summary judgment.

BACKGROUND
The Plaintiff is the assignee and lawful owner of the '516 patent, which issued on
October 15, 2002, as amended by Reexamination Certificate No. 6,465,516 C1, which
issued on April 5, 2011. The '516 patent claims a method of treating nonhyperlipidemic
subjects, i.e., people who do not have hyperlipidemia, who would benefit from increased
nitric oxide ("NO") production. Claim 1 of the '516 patent, as amended, claims:
1.
A method for treating a non hyperlipidemic subject who would benefit
from increased Nitric Oxide production in a tissue comprising:
administering to the nonhyperlipidemic subject in need of such treatment a
Hmg-CoA reductase inhibitor in an amount effective to increase Nitric Oxide
production in said tissue of the subject.
(Entry 27-2 at 16.)
In 2003, the Defendant began marketing a statin, rosuvastatin calcium, under the
trademark CRESTOR®. Also in 2003, the United States Food and Drug Administration
("FDA") approved CRESTOR® for three uses or indications, including the treatment of
people with hyperlipidemia and, within that group, people with elevated cholesterol levels.
In addition, in 2003, the Defendant began enrolling patients in a clinical trial-the JUPITER
trial-to evaluate the efficacy of CRESTOR® in reducing cardiovascular events for people
who did not have hyperlipidemia but who did have cardiovascular risk factors. On February

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8, 2010, the FDA approved the use of CRESTOR® for indications resulting from the
JUPITER trial, including Indication 1.6, which is at issue in this case. Indication 1.6 can be
found in the package insert accompanying CRESTOR®, and it provides the following:
In individuals without clinically evident coronary heart disease but with an
increased risk of cardiovascular disease based on age :<: 50 years old in men
and :<:60 years old in women, [high sensitivity C-reactive protein ("hsCRP")]
:::::2mg/L, and the presence of at least one additional cardiovascular disease
risk factor such as hypertension, low HDL-C, smoking, or a family history of
premature coronary heart disease, CRESTOR is indicated to:
•
reduce the risk of stroke
•
reduce the risk of myocardial infarction
•
reduce the risk of arterial revascularization procedures
(Entry 41-4 at 5.)
In this action, the Plaintiff claims that the Defendant is infringing upon its patent
because treating a nonhyperlipidemic individual with an elevated hsCRP by administering
CRESTOR® is the same thing as treating a subject who would benefit from increased NO
production by administering an Hmg-CoA reductase inhibitor in an amount effective to
increase NO production. The Defendant, in its motion for summary judgment, contends
that no reasonable juror could find a relationship between CRP levels and NO production
in humans such that measuring a patient's CRP level is the same as measuring a patient's
NO production. The Defendant also argues that the Plaintiff has no admissible evidence
to show that Indication 1.6 or related promotional materials instruct or encourage
infringement. Further, the Defendant contends that the record evidence does not show
that it has promoted CRESTOR® to increase NO levels in humans.
Next, with regard to the Plaintiff's proposed expert testimony, the Defendant
contends: that Drs. Hallett and Elkayam are not qualified to offer an opinion on the alleged

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association between CRP and NO; that Drs. Hallett and Elkayam have no reliable proof of
an association between CRP and NO in humans; that the experts failed to consider
contradictory data; that the opinions of Drs. Hallett and Elkayam are unscientific and
litigation-driven; and that Dr. Back is nothing more than a mouthpiece for Dr. Elkayam.

ANALYSIS
Rule 702 of the Federal Rules of Evidence "imposes a special obligation upon a trial
judge to ensure that any and all scientific testimony is not only relevant, but reliable."
Kumho Tire Co.! Ltd. v. Carmichael, 526 U.S. 137, 147 (1999) (internal quotation marks
omitted). In addition to ensuring the relevancy and reliability of expert testimony, the
gatekeeping role of the Court ensures "that an expert, whether basing testimony upon
professional studies or personal experience, employs in the courtroom the same level of
intellectual rigor that characterizes the practice of an expert in the relevant field."

1.!t. at

152. In that regard, Rule 702 provides as follows:
A witness who is qualified as an expert by knowledge, skill, experience,
training, or education may testify in the form of an opinion or otherwise if:
(a) the expert's scientific, technical, or other specialized knowledge
will help the trier of fact to understand the evidence or to determine a
fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods; and
Cd) the expert has reliably applied the principles and methods to the
facts of the case.
Fed.R.Evid. 702.

In serving as the gatekeeper for expert testimony, the Court must

address two questions: first, whether the expert's testimony is based on "scientific
knowledge"; and second, whether the testimony "will assist the trier of fact to understand

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or determine a fact in issue." Daubert, 509 U.S. at 592. The first question is answered by
assessing "whether the reasoning or methodology underlying the testimony is scientifically
valid."

kL at 592-93.

In Daubert, the Supreme Court identified five nondispositive factors

for evaluating the reliability of proposed expert testimony: (1) whether the particular
scientific theory "can be (and has been) tested"; (2) whether the theory "has been
subjected to peer review and publication"; (3) the "known or potential rate of error"; (4) the
"existence and maintenance of standards controlling the technique's operation"; and (5)
whether the technique has achieved "general acceptance" in the relevant scientific or
expert community. See United States v. Crisp, 324 F.3d 261, 265-66 (4th Cir.2003)
(quoting Daubert, 509 U. S. at 593-94). The Daubert test is flexible, however; "[r]ather than
providing a definitive or exhaustive list, Daubert merely illustrates the types of factors that
will bear on the inquiry."

kL at 266.

As the Court of Appeals for the Fourth Circuit has

noted: !lIn making its initial determination of whether proffered testimony is sufficiently
reliable, the court has broad latitude to consider whatever factors bearing on validity that
the court finds to be useful; the particular factors will depend upon the unique
circumstances of the expert testimony involved. 1I Westberry v. Gislaved Gummi AB, 178
F.3d 257, 261 (4th Cir. 1999).
The second inquiry "goes primarily to relevance." Daubert, 509 U.S. at 591.
Relevance is determined by ascertaining whether the testimony is sufficiently tied to the
facts of the case such that it will aid the jury in resolving a factual dispute.

kL at 593.

"A review of the case law after Daubert shows that the rejection of expert testimony
is the exception rather than the rUle." Fed. R. Evid. 702, Advisory Committee's Note to
2000 Amendments. "Daubert did not work a 'seachange over federal evidence law,' and

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'the trial court's role as gatekeeper is not intended to serve as a replacement for the
adversary system.'''

kl (quoting United States v. 14.38 Acres of Land Situated in Leflore

Cnty., 80 F.3d 1074, 1078 (5th Cir.1996».
Here, after much consideration, the Court finds that Drs. Hallett, Elkayam, and Back
are sufficiently qualified by their knowledge, skill, experience, training. and education, and
that they may give relevant and reliable testimony on the relationship between CRP and
NO. In so finding, the Court has considered both the bases for the doctors' opinions as
well as the potential relevance of their opinions to the issues presented in this case.
Dr. Hallett, a vascular surgeon and the medical director of the Roper St. Francis
Heart and Vascular Center in Charleston, South Carolina, opines that (1) NO plays a
critical role in maintaining cardiovascular health, and NO deficiency is implicated in all
cardiovascular disease; (2) insufficient NO production and/or bioavailability will lead to a
decline in cardiovascular health and may lead to cardiovascular conditions such as
hypertension and an increased risk of cardiovascular events such as stroke; (3) elevated
CRP levels in a subject correspond to decreased NO production and bioavailability, and
they indicate the subject is at an increased risk for cardiovascular conditions and events;
and (4) statins including CRESTOR® increase NO production and bioavailability and thus
will provide a medical benefit to patients who have decreased NO production by
decreasing the risk of cardiovascular conditions and events. Dr. Hallett bases these
opinions on his full range of education, training, and experience as well as his review of
peer-reviewed scientific publications. The Court finds his opinions sufficiently reliable and
relevant under Rule 702 of the Federal Rules of Evidence and Daubert.
Likewise, the Court finds the opinion of Dr. Elkayam sufficiently reliable to withstand

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review under Rule 702 and Daubert. Dr. Elkayam, a cardiologist, researcher, and treating
physician with more than 30 years of experience, offers the following opinions: (1) that the
role of NO in cardiovascular health is well-known in the medical community; (2) that
decreased NO production or bioavailability is associated with cardiovascular disease; (3)
that administering a statin to a person meeting the criteria of Indication 1.6 is the same as
administering a statin to a person in need of increased NO; and (4) that administering
CRESTOR®to a person meeting the Indication 1.6 criteria will increase NO production and
provide a medical benefit. Here again, he bases these opinions on his years of education,
training, and experience and his review of peer-reviewed scientific publications.
Finally, the Court finds that Dr. Back, who is the medical director and clinician at
Advanced Centers for Hypertension, Diabetes & Cholesterol Disorders in Ladson, South
Carolina, may offer relevant and reliable testimony as to the generally accepted practices
of phYSicians prescribing CRESTOR® insofar as these opinions are based on his personal
experience and training and his review of peer-reviewed scientific publications as well as
his consultation with others in the field. The Court notes, however, that although Dr. Back
may offer his opinions related to the clinical practice of medicine, he may not simply
reiterate the expert opinions of Drs. Hallett or Elkayam.
Based on the foregoing, the Court denies the Defendant's Daubert motion at this
time. In denying the motion, the Court notes that its role is not to evaluate the correctness
of the facts underlying these experts' opinions; rather, its job is to evaluate the legal
sufficiency of the opinions. In other words, in acting as gatekeeper, the Court does not
function as fact finder. To the extent the Defendant finds fault with the qualifications and
opinions of the Plaintiff's experts, questions about the experts' credentials and the bases

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for their opinions are ideal fodder for cross-examination. As the Supreme Court noted in
Daubert, the "conventional devices" of "vigorous cross-examination, presentation of
contrary evidence, and careful instruction on the burden of proof are the traditional and
appropriate means of attacking shaky but admissible evidence." 509 U.S. at 596.
Having denied the Defendant's Daubert motion, the next question for the Court is
whether the Defendant is entitled to summary judgment. As previously mentioned, the
Magistrate Judge recommended denying the Defendant's motion for summary judgment
without specifically ruling on the Defendant's Daubert motion. The Defendants objected
(and the Court agreed with the Defendants) that it was not appropriate to rule on the
summary judgment motion without first ruling on the Daubert motion.

Now, having

determined that the Plaintiff's experts may offer testimony on the scientific relationship
between CRP and NO, the Court wholly agrees with the Magistrate Judge that genuine
issues of material fact exist both as to whether a doctor prescribing CRESTOR® pursuant
to Indication 1.6 infringes on claim 1 of the '516 patent, and as to whether the Defendant
knew that its actions would induce infringement of the '516 patent and intended to induce
such infringement. Therefore, for the reasons set forth by the Magistrate Judge in the
R&R, the Court denies the Defendant's motion for summary judgment.
More recently, the Defendant also filed a motion to strike the supplemental report
of Dr. Hallett, arguing that it was untimely under the scheduling order; that it is improper
supplementation under Rule 26(e)(2); and that it is not substantially justified or harmless.
The Plaintiff opposes the Defendant's motion and asserts that the report is a timely and
a proper supplemental report. After consideration of the parties' arguments (and the
record as a whole), the Court declines to strike the supplemental report of Dr. Hallett,

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finding that its inclusion at this time is both substantially justified and harmless.
Accordingly, the Court denies the Defendant's motion to strike the supplemental report of
Dr. Hallett.
CONCLUSION

Based on the foregoing, the Court denies the Defendant's motion to strike the
Plaintiff's experts (Entry 203). Next, having denied the Defendant's Daubert motion, the
Court finds, for the reasons stated herein and for the reasons set forth by the Magistrate
Judge in the R&R (Entry 265) that genuine issues of material fact exist as to whether the
Defendant directly infringed the '516 patent and as to whether the Defendant acted with
the requisite knowledge or specific intent to infringe. Therefore, the Court denies the
Defendant's motion for summary judgment (Entry 134).

The Court also denies the

Defendant's motion to strike the supplemental report of Dr. Hallett (Entry 320). The parties
consent to the Plaintiff's motion to seal its supplemental Daubert brief; accordingly. the
Court grants the motion (Entry 322). Finally, the Court requests that the parties confer and
submit a proposed amended scheduling order (or orders if the parties cannot agree) within
fourteen days of the date of this order.
IT IS SO ORDERED.

April ~, 2014
Charleston. South Carolina

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