Allergan, Inc. v. Teva Pharmaceuticals USA, Inc. et al

Filing 313

MEMORANDUM OPINION AND ORDER - granting 291 Motion of Compel Compliance with Subpoena. Signed by Judge William C. Bryson on 4/10/2017. (ch, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION
ALLERGAN, INC.,
Plaintiff,
v.
TEVA PHARMACEUTICALS USA, INC.,
et al.,
Defendants.

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Case No. 2:15-cv-1455-WCB

MEMORANDUM OPINION AND ORDER
Before the Court is plaintiff Allergan, Inc.’s Motion to Compel Compliance with
Subpoena, Dkt. No. 291, which seeks to compel third party Alcon Laboratories, Inc., to produce
a set of previously identified documents. 1 In its response, Alcon has opposed the motion but
requested that, in the event the Court grants the motion, the Court also order that Allergan pay
Alcon’s expenses regarding the subpoena, including attorneys’ fees.

Allergan’s motion is

GRANTED, and Alcon’s conditional cross-motion is DENIED without prejudice.
BACKGROUND
The defendant pharmaceutical companies are seeking approval by the Food and Drug
Administration (“FDA”) to sell a generic version of Restasis, an ophthalmic product sold by
Allergan. Allergan initiated the present Hatch-Waxman action, alleging that the defendants’
generic versions infringe several of Allergan’s patents related to Restasis. In response, the

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The Court does not address Alcon’s argument that Allergan’s motion should be denied
as to any documents outside the Identified Set, see Dkt. No. 304, at 11, because the Court
construes Allergan’s motion as requesting production of only the Identified Set of documents,
see Dkt. No. 291, at 3 (“A limited set of documents directly relevant to Allergan’s
nonobviousness defense were selected for production.”).
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defendants have asserted, among other things, that Allergan’s patents are invalid for
obviousness.
Allergan intends to offer evidence of the failure of others to develop a treatment for dry
eye as part of its nonobviousness defense. In an effort to obtain evidentiary support for that
argument, Allergan has served third party Alcon with a subpoena for the production of
documents. Dkt. No. 291-1 (subpoena); Dkt. No. 291-2 (proof of service). As relevant here,
Allergan asked for information regarding the development of Alcon’s products Rejena, Zyclorin,
Cilomilast, Durezol, and Hydroxypropyl Guar Galactomannan (“HPGG”) (referred to as
AL43536 in the subpoena). Dkt. No. 291-1, at 11. Alcon objected to all the requests in the
subpoena and refused to produce any documents. Dkt. No. 291-4.
After Allergan and Alcon met and conferred, Allergan agreed to narrow the scope of the
subpoena to the new drug application (“NDA”) file and investigational new drug application
(“INDA”) file for Durezol, and the INDA files for Rejena, Zyclorin, Cilomilast, and HPGG. See
id.; Dkt. No. 304-1, at 2. Alcon agreed to make that narrowed set of documents available for
inspection. Dkt. No. 291-6. Allergan sent two attorneys to inspect those documents, and the
attorneys selected a subset of those documents for production. The subset, referred to herein as
the Identified Set, consists of several thousand pages of material. See Dkt. No. 291, at 3; Dkt.
No. 304, at 3. The attorneys were not permitted to make copies of the documents or to take notes
with them regarding the documents’ contents. See Dkt. No. 291, at 3.
After the inspection, Alcon objected to production of the Identified Set of documents on
various grounds, but it offered to provide a declaration from an undisclosed individual regarding
some of the contents of the documents. Dkt. No. 291, at 3-4. Allergan offered to pay for the
reproduction of the Identified Set of documents in electronic form using a vendor chosen by

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Alcon. Dkt. No. 308, at 3. Nonetheless, Alcon maintained its objections. See generally Dkt.
No. 312.
DISCUSSION
The Court has broad discretion in resolving disputes over motions to compel discovery of
documents. Imperial Ethiopian Gov’t v. Baruch-Foster Corp., 535 F.2d 334, 337 n.8 (5th Cir.
1976). The scope of discovery is limited by Fed. R. Civ. P. 26(b)(1), which allows:
discovery regarding any nonprivileged matter that is relevant to any party’s claim
or defense and proportional to the needs of the case, considering the importance
of the issues at stake in the action, the amount in controversy, the parties’ relative
access to relevant information, the parties’ resources, the importance of the
discovery in resolving the issues, and whether the burden or expense of the
proposed discovery outweighs its likely benefit. Information within this scope of
discovery need not be admissible in evidence to be discoverable.
1. Alcon objects to Allergan’s subpoena primarily on the basis of relevance. Alcon
argues that the product information at issue would not support Allergan’s theory that others
failed to develop a treatment for dry eye disease and that the failure of others is evidence that
Allergan’s invention would not have been obvious.
Alcon does not dispute that the failure of others to solve the problem addressed by the
patents-in-suit may be relevant. But Alcon contends that “the problem” is narrowly defined as “a
need for emulsions comprising a reduced amount of cyclosporin which are therapeutically
effective, but which reduce side effects.” Dkt. No. 304, at 6. In support of that argument, Alcon
points to language in the specification of U.S. Patent No. 8,629,111 (“the ’111 patent”)—the
same language that appears in the specification of the other patents in suit—that “there was a
need, as of the date of the inventions[,] for ‘enhanced methods of treating ophthalmic or ocular
conditions with cyclosporin-containing emulsions’ with a ‘reduced’ amount of cyclosporin[] to[,]
among other things, reduce ‘eye irritation.’” Dkt. No. 304, at 6 (quoting ’111 patent, col. 2, ll. 7-

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9, 48-51; id., col. 5, ll. 3-8). And Alcon points out that four of the five products Allergan has
identified (Durezol, Rejena, Cilomilast, and HPGG) do not contain cyclosporin.
Alcon’s argument is not persuasive. First, the probative value of the failure of others to
solve the problem addressed by Allergan’s patents is not limited to failures associated with
cyclosporin products. It is true that the failure of others must be directed to the problem solved
by the patents. See Symbol Techs., Inc. v. Opticon, Inc., 935 F.2d 1569, 1578-79 (Fed. Cir.
1991) (“the failure of others to find a solution to the problem which the patent[s] in question
purport[] to solve . . . shows indirectly the presence of a significant defect [in the prior art], while
serving as a simulated laboratory test of the obviousness of the solution to a skilled artisan.”)
(alterations in original) (internal quotation marks omitted). But it is not just the failure of others
to identify the exact product claimed by the patents that is relevant. In fact, evidence that others
were “going in different ways” is considered “strong evidence that the [inventor’s] way would
not have been obvious.” In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent
Litig., 676 F.3d 1063, 1082 (Fed. Cir. 2012); see also Forest Labs., Inc. v. Ivax Pharms., Inc.,
501 F.3d 1263, 1267, 1269 (Fed. Cir. 2007) (obviousness findings were not clearly erroneous as
based on, inter alia, the “failure of the inventors and others to resolve citalopram without undue
experimentation and the testimony of Forest’s experts” that one of skill “would have been
motivated to develop new compounds rather than undertake the difficult and unpredictable task
of resolving a known racemate”).
The problem addressed by the patents-in-suit was that emulsions containing
therapeutically effective amounts of cyclosporin had undesirable side effects. The fact that
others may have tried to solve that problem by “going in [a] different way” and using different
compounds, rather than changing the amounts of the cyclosporin and hydrophobic components

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in the composition, supports the inference that others did not believe the latter approach would
work. See In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litig., 676
F.3d at 1082.
All of the identified Alcon products, whether cyclosporin-based or not, fit within that
rationale for the probative value of evidence of the failure of others. All five of the Alcon
products at issue “are products for which Alcon pursued an indication for the treatment of dry
eye disease during development and through clinical trials, yet none of them made it to market
with an indication to treat dry eye disease.” Dkt. No. 308, at 1; see also Dkt. No. 304-9, at 3
(September 2009 proposed package insert for Rejena included an indication for “treatment of the
signs and symptoms of dry eye disease”); Dkt. No. 304-3, at 1 (Durezol package insert states that
it is “indicated for the treatment of inflammation and pain associated with ocular surgery”); Dkt.
No. 304-7, at 5 (Cilomilast “is indicated for the maintenance of lung function . . . in patients with
obstructive pulmonary disease”); Dkt. No. 304-8, at 2 (describing purpose of clinical study as
“observ[ing] lacrimal fluid condition (tear film break-up time) chronologically after a single dose
of [HPGG] ophthalmic products” and “lacrimal fluid retention time”). Failure to obtain FDA
approval may be used to show the failure of others. See Knoll Pharm. Co. v. Teva Pharms. USA,
Inc., 367 F.3d 1381, 1385 (Fed. Cir. 2004); Pfizer Inc. v. Teva Pharms. USA, Inc., 460 F. Supp.
2d 659, 662 (D.N.J. 2006). 2
Alcon also maintains that others’ failed efforts must predate or be contemporaneous with
the date of Allergan’s invention. The pertinent date, according to Alcon, is either December
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Alcon points out that Restasis is indicated “to increase tear production” in patients with
keratoconjunctivitis sicca (“KCS”), but not to treat “the condition known as dry eye per se.”
Dkt. No. 304, at 2 n.2. The patents, however, claim the emulsion present in Restasis as a
treatment for dry eye and KCS, see, e.g., ’111 patent, col. 16, ll. 35-40, so Alcon’s failures to
develop a treatment for dry eye are relevant to the patents in suit, regardless of whether
Allergan’s commercial embodiment has been administratively approved for that purpose.
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2002 (when Restasis was FDA-approved, see Dkt. No. 304-4) or September 2003 (the priority
date of the patents-in-suit).

Alcon points out that, for all five products, Allergan has not

identified documents dated prior to September 2003 and that, for three of the products, Allergan
has not identified documents dated prior to 2006. See Dkt. No. 304, at 7-11. 3
The Court concludes that the dates of the failures do not necessarily render the evidence
irrelevant. Many of the instances in which courts have addressed evidence of the failure of
others involve failures predating public notice of an invention. E.g., DePuy Spine, Inc. v.
Medtronic Sofamor Danek, Inc., 567 F.3d 1314, 1328-29 (Fed. Cir. 2009) (detailing evidence of
secondary considerations in support of nonobviousness including failure of others that postdated
priority date but predated patent issuance and publication). But that is not to say that all postinvention failures are irrelevant. It is at least potentially relevant to nonobviousness if others
continue to search for different solutions to the prior art problem in order to compete with the
patentee, but repeatedly fail in that effort. See In re Cyclobenzaprine Hydrochloride ExtendedRelease Capsule Patent Litig., No. 09-MD-2118-SLR, 2010 WL 3766530, at *2 (D. Del. Sept.
21, 2010) (holding that evidence of others’ post-invention failures was relevant because, “[i]f
others continue to fail despite having the patent as prior art, such failures may illustrate just how
radically different the patent was from past discoveries.”).
2.

In addition to the relevance argument, Alcon complains that compliance would

“prejudice” Alcon by requiring it to provide “confidential, proprietary documents” to its
competitor, Allergan. Dkt. No. 312, at 2. Alcon, however, has failed to make any showing of
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Neither party has clarified whether the dates highlighted by Alcon are the earliest dates
for any development of the particular product, or simply the earliest dates indicated on the
documents in Alcon’s files. See, e.g., Dkt. No. 304, at 11 (Alcon states, “[I]n the subset of
documents, Plaintiff’s counsel identified no Alcon document concerning Zyclorin prior to
2006.”). It may therefore be possible that a document in Alcon’s files dated 2006 may build on
and refer to research conducted years earlier.
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prejudice on that ground. Allergan previously noted that the Identified Set of documents are
“unlikely to have any confidential information,” and that “the Court’s Protective Order affords
sufficient protection” to any documents that do. Dkt. No. 291, at 4-5. Other than Alcon’s bare
statement that it would be forced to produce “confidential, proprietary documents,” Dkt. No.
312, at 2; accord id. at 3, Alcon has not countered Allergan’s first point. And Alcon has failed
to address at all Allergan’s second point that the Protective Order provides sufficient protection
against the prejudicial use of Alcon’s confidential, proprietary materials.

The prejudice

argument is not convincing.
3. Alcon has also stated that compliance would impose a burden on it, but Alcon has
failed to provide any explanation or evidence to support that claim. The Court does not find that
any significant burden would be placed upon Alcon in simply producing the already Identified
Set of documents, given that Allergan has undertaken to pay the costs of the production of the
documents.
Because the Court finds that the subpoena request is relevant to Allergan’s
nonobviousness defense, and that compliance would be neither burdensome nor prejudicial to
Alcon, the motion to compel production of the identified set of documents is GRANTED.
4. The Court notes that at the end of its motion and reply, Allergan requests relief in the
form of an order to “Alcon to immediately produce all documents responsive to Allergan’s
subpoena and promptly provide a witness to testify on those documents.” Dkt. No. 291, at 5
(emphasis added); accord Dkt. No. 308, at 3 (asking that the Court order “Alcon to produce
documents and make a witness available for deposition.”). Because the subpoena that Allergan
has provided to the Court calls only for documents, and because Allergan has not provided any
briefing on the question of the need for a deposition, or the scope of any such deposition, the

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Court construes Allergan’s motion as limited to the document subpoena. To the extent that
Allergan continues to request that Alcon produce a witness for deposition in connection with the
documents, Allergan may file a separate motion to compel based on its subpoena for testimony
in the event that the parties cannot agree on a satisfactory resolution of that request.
5. For its part, Alcon has requested that in the event the Court orders compliance with
the subpoena, the Court should award Alcon “its reasonable costs of compliance, including
attorney fees.”

Dkt. No. 304, at 12.

As Alcon points out, Allergan is required to “take

reasonable steps to avoid imposing an undue burden or expense on [Alcon].” Fed. R. Civ. P.
45(d)(1). Alcon asks the Court to “enforce this duty through the use of appropriate sanctions,
such as the award of reasonable attorneys’ fees.” Dkt. No. 304, at 12.
The Court has a responsibility to protect third parties from having to bear an “undue
burden” in responding to party subpoenas. See Fed. R. Civ. P. 45(d)(3)(A)(iv). But the Court
has not at this time seen any evidence that enforcement of Allergan’s subpoena, as limited to the
Identified Set of documents, would impose an undue burden or expense on Alcon. Based on the
representations of the parties, it appears that Allergan has satisfied its obligation under Rule 45
by (1) narrowing the subpoena, (2) sending its attorneys to Alcon’s facilities to conduct an
inspection and further narrow the number of documents requested, and (3) “offer[ing] to pay for
the reproduction of [the requested] documents in electronic form using Alcon’s preferred
vendor.” Dkt. No. 308, at 2-3. Alcon has stated that “[t]he costs Alcon has incurred in response
to Plaintiff’s subpoenas—and will continue to incur if the Court compels compliance—are
significant,” but it has offered no indication of what those costs may be, other than to refer to the
attorneys’ fees associated with Alcon’s resistance to Allergan’s motion to compel.

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The Court does not regard the attorneys’ fees incurred in resisting the motion to compel
as recoverable costs of complying with the subpoena. Alcon was not required to resist the
motion to compel, and it has been unsuccessful in so doing. For those reasons, there is no sense
in which the attorneys’ fees were necessary expenses incurred in responding to the subpoena.
As to any other costs associated with Alcon’s compliance efforts, the Court has no other
evidence before it regarding the costs of compliance that were imposed on Alcon. The Court
will therefore not at this time require Allergan to pay any additional costs beyond the cost of
producing copies of the documents, which Allergan has already offered to pay. Alcon’s request
for an order requiring Allergan to pay expenses beyond those which Allergan has already offered
is therefore DENIED. The Court’s order is without prejudice to Alcon’s right to make a claim
for additional costs of production, either before or after completing the production, that itemizes
the costs incurred by Alcon in complying with the documentary subpoena.
IT IS SO ORDERED.
SIGNED this 10th day of April, 2017.

_____________________________
WILLIAM C. BRYSON
UNITED STATES CIRCUIT JUDGE

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