Bayer Healthcare LLC v. Norbrook Laboratories Ltd et al

Filing 136

ORDER signed by Judge Rudolph T Randa on 10/14/2010 granting in part and denying in part 129 Motion to Strike. (cc: all counsel) (Koll, J)

B a y e r Healthcare LLC v. Norbrook Laboratories Ltd et al

D o c . 136

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN

B A Y E R HEALTHCARE, LLC, P l a i n t i f fC o u n t e r c l a i m Defendant, v. Case No. 08-C-953 (c o n s o lid a t e d w/Case No. 09-C-108 N O R B R O O K LABORATORIES, LTD., and NORBROOK, INC. USA, DefendantsC o u n t e r c la i m a n t s .

DECISION AND ORDER

T h is patent action is before the Court on the Civil Local Rule 7(h) expedited n o n -d is p o s itiv e motion 1 of Bayer Healthcare LLC ("Bayer") to strike the expert reports of S te p h e n R. Byrn ("Byrn") and Laurel J. Gershwin ("Gershwin") and the amended in ter ro g a to ry responses of Norbrook Laboratories, Ltd., and Norbrook, Inc. USA (collectively " N o rb ro o k " ). Bayer asserts that this Court should preclude Norbrook from asserting defenses th a t Norbrook expressly abandoned and had not identified prior to the close of fact discovery. N o r b r o o k contends that Bayer is effectively seeking summary judgment on N o r b r o o k ' s invalidity defense; Bayer had fair notice of Norbrook's invalidity defenses; those

The Court has corrected Bayer's reference to the local rule under which its expedited motion is brought ­ C i v il Local Rule 7(h). The Local Rules of this District were amended effective February 1, 2010. Bayer's motion r e f e r s to the prior rule, Civil Local Rule 7.4, that is no longer in effect.

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d ef en ses and Norbrook's related expert reports were necessarily dependant on fact discovery th a t Bayer only recently received; and there is no prejudice to Norbrook. The motion involves two aspects of Norbrook's defenses and counterclaims ­ inv alid ity for obviousness under § 103(a) and a 35 U.S.C. § 112 enablement theory. The Court w ill review some factual background that is essential to the resolution of the motion. Factual Background In its first amended answer and counterclaim, Norbrook alleged that "the claims o f the `506 patent were invalid for failure to comply with the conditions for patentability as s p e c if ie d in 35 U.S.C. § 1 et seq." No facts were alleged. (Fisher Decl. ¶ 3, Ex. A (Dkt. 12, ¶ 59).) Bayer filed a motion to strike/dismiss under Bell Atlantic Corp. v. Twombly, 550 U.S. 5 4 4 (2007) contending that Norbrook's pleading was inadequate because of the hundreds of p a te n ta b ility requirements of Title 35 of the United States Code. (Fisher Decl. ¶ 4, Ex. B (D k t. 15, 16).) In an attempt to resolve the motion without a Court ruling, Norbrook sent to B a ye r a draft second amended answer that "add[s] some specificity to our invalidity defense a n d counterclaim and an inequitable conduct defense and counterclaim." (Fisher Decl. ¶ 5, E x . C (Jan. 19, 2009 Kim email).) Norbrook's draft specifically identified challenges under 3 5 U.S.C. §§ 102 and 103 (prior art and obviousness) and § 112 (enablement and written d e s c rip tio n ). No facts supporting the § 112 defense were included. (Fisher Decl. ¶ 6, Ex. D, ¶ ¶ 37, 60.)

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B a ye r responded to Norbrook that it was only asserting two claims of the patent ( c la i m s 4-5), and requested that Norbrook "supplement[] [its] 112 arguments as to those c la im s ." (Fisher Decl. ¶ 7, Ex. E (Jan. 26, 2009, Maurer email).) In response, Norbrook sent to Bayer a subsequent draft of the second amended answer with no § 112 defense pleaded. In its accompanying email, Norbrook wrote: "As you will see in the attached draft, we have re m o v e d the 112 invalidity defense and counterclaim in this draft as a result of your re p re se n tatio n that only claims 4 and 5 of the `506 patent survive the disclaimer." (Kim Decl. ¶ ¶ 7-8, Exs. E (Jan. 29, 2009, Kim email), F (revised draft).) Thereafter, Bayer "agree[d] to th e filing of the Second Amended Answer and [withdrew] its Twombly motion." (Kim. Decl. ¶ 7, Ex. E (Jan. 26, 2009, Maurer email).) Paragraphs 39 and 60 of Norbrook's Second Amended Answer and C o u n ter c laim s, which are identical, allege: The claims of the `506 patent are invalid for failure to comply w ith one or more of the conditions for patentability as specified in Title 35 U.S.C. §§ 1 et seq. More specifically, the claims of the `5 0 6 patent are invalid under at least 35 U.S.C. §§ 102 and/or 1 0 3 . The following are examples of prior-art references which, i n d iv id u a lly or in combination, render the claims of the `506 p a te n t invalid: Graham C. Dick, Use of Enrofloxacin, The V e t e r i n a r y Record, p. 616 (June 12, 1993), Ana Cabanas, et al., P h a r m a c o k in e tic s of Enrofloxacin After Intravenous and In tra m u sc u la r Injection in Rabbits, 53 Am. J. Vet. Res. 11, p. 2 0 9 0 (November 1992), and S. Pyorala, et al., Single-dose P h a r m a c o k in e tic s of Enrofloxacin in Horses, 6th EAVPT C o n g ress, P18, p. 45 (August 1994). (D k t. 25, ¶¶ 39 & 60.)

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During discovery, Bayer served interrogatories seeking Norbrook's invalidity c o n te n tio n s . Norbrook's responses mirrored its answer and contained no § 112 defense. (F is h e r Decl. ¶ 9, Ex. G (June 15, 2009, Resp. to Interrogs. Nos. 12-13).) Specifically, B a ye r's interrogatory number 12 stated: State in detail all the bases for Defendants' contentions, on a c laim -b y-c laim , element-by element basis (by way of claim ch arts), that the claims of the `506 patent are invalid for failure to satisfy 35 U.S.C. §§ 1 et seq. (and specifically §§ 102 and/or 1 0 3 ), and identify all documents, witnesses and other information D e f en d a n ts will rely on to support those contentions, including b u t not limited to Defendants' contention that the following p u b l ic a tio n s (either separately or in combination with one a n o th e r) render the '506 patent invalid: (1) Graham C. Dick, Use of Enrofloxacin, The Veterinary Record, p . 616 (June 12, 1993); (2 ) Ana Cabanas, et al., Pharmacokinetics of Enrofloxacin After In tra v e n o u s and Intramuscular Injection in Rabbits, 53 Am. J. V et. Res. 11, p. 2090 (November 1992); (3 ) S. Pyorala, et al., Single Dose Pharmacokinetics of E n r o flo x a c in in Horses, 6th EAVPT Congress, P18, p. 45 (A u g u st 1994). N o rb ro o k responded: Norbrook objects to this Interrogatory to the extent that it purports to be a single interrogatory. Norbrook further objects to this In te rro g a to ry to the extent that it seeks information protected f ro m disclosure by the attorney-client privilege and/or attorney w o rk product doctrine. Norbrook further objects to this In terro g ato ry as premature, as discovery is at a very preliminary s ta g e and Bayer has not come forward with any infringement c o n te n tio n s . Subject to and without waiving any general or sp e c if ic objections, Norbrook responds that its investigation is still ongoing and Norbrook will subsequently supplement its re s p o n s e as required. 4

B a ye r also propounded interrogatory number 13 which stated: State in detail the basis of Defendants' contention that the claims o f the `506 patent are unenforceable due to inequitable conduct b ef o re the United States Patent and Trademark Office ("PTO"), a n d in particular, the identities of any individuals who Defendants a ll e g e violated a duty of disclosure to the PTO, the basis for D e f e n d a n ts ' contention that Graham C. Dick, Use of E n ro flo x a c in , The Veterinary Record, p. 616 (June 12, 1993) was m a te ria l to prosecution of the application leading to the `506 p a te n t and the basis for Defendants' contention that "Bayer, the p a te n te e s , and/or Bayer's counsel intentionally misled the PTO a n d failed to disclose the Dick referenced [sic]." See Second A m e n d e d Answer & Counterclaims ¶ 38. Norbrook responded: Norbrook objects to this Interrogatory on the grounds that it is v a g u e , overly broad, unduly burdensome, and requests in f o rm a tio n that is neither relevant to any issue presented in this a c tio n nor reasonably calculated to lead to the discovery of a d m iss ib le evidence. Norbrook further objects to this In te r r o g a to ry to the extent that it purports to be a single in te rro g a to ry. Norbrook further objects to this Interrogatory to the e x te n t that it seeks information protected from disclosure by the a tto rn e y-c lie n t privilege and/or attorney work-product doctrine. N o rb ro o k further objects to this Interrogatory as premature, as d is c o v e ry is at a very preliminary stage and Bayer has not yet p ro v id e d any discovery to Norbrook on this or any other issue. S u b je c t to and without waiving any general or specific objections, N o rb ro o k responds that the claims of the `506 patent are u n e n f o rc e ab le due, at least, to the patentees' inequitable conduct b ef o re the United States Patent and Trademark Office ("PTO"). In the June 12, 1993 issue of The Veterinary Record, p. 616, G r a h a m C. Dick from Bayer plc, Veterinary Business Group, E a ste rn Way, Bury St. Edmunds, Suffolk IP32 7A11, wrote that " a single daily dose of 5 mg/kg" of enrofloxacin "has been shown to be effective, thereby easing the problem of owner compliance d u rin g protracted periods of medication." On information and b e lie f , in violation of Bayer's duty of candor to the PTO under 37 C .F .R . § 1.56, Bayer, the patentees, and/or Bayer's counsel in te n tio n a ll y misled the PTO and failed to disclose the Dick 5

re f ere n c e, which was material to prosecution, during prosecution o f patent application no. 863,384, the application that led to the is s u a n c e of the `506 patent. On information and belief, Bayer, the p a te n te e s, and/or Bayer's counsel did so with the intent to deceive th e PTO concerning the patentability of the application, and th e re f o re committed inequitable conduct rendering the `506 p a te n t unenforceable. The deadline to amend pleadings passed on November 20, 2009, and fact discovery closed on A u g u st 13, 2010. (Dkt. 34, 128.) Discovery proceeded on the basis of the invalidity defense pleaded, the §§ 102-103 defense regarding three specifically identified pieces of prior art. On September 17, 2010, Norbrook served two expert reports and amended in te rro g a to ry responses. In those reports and the amended interrogatory responses, Norbrook a d v a n ce d the § 112 defense that it had previously removed and introduced three new § 102 p rio r art references, while withdrawing its prior bases of invalidity. (Fisher Decl. ¶¶ 10-12, Exs. H-J.) A n a l y s is Norbrook contends that Bayer's statement that it forfeited its § 112 defense is f a ls e . Norbrook asserts that it initially stated one § 112 defense based on the improper d e p e n d en c y of patent claims 2 and 3 on claim 1. However, Norbrook relies on its original am en d ed answer and counterclaims which simply stated that the claims of the `506 patent were in v a lid for failure to comply with the conditions for patentability as specified in 35 U.S.C.

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§ 1 et seq." and the `506 patent. Neither citation bears out Norbrook's contention. Norbrook h a s not provided information that establishes what its specific defense was under § 112 o r i g i n a l l y. 2 M o re v e r, the text of Norbrook's January 26, 2009, email indicates that it was re m o v in g that defense based on Bayer's representation that only claims 4 and 5 of the `506 p a te n t survive the disclaimer. The reasonable interpretation of the email is that the Norbrook w a s withdrawing the § 112 defense in reliance on Bayer's representation. Objectively, viewed th e parties had agreed that, as long as only claims 5 and 6 would be at issue in this litigation,

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Section 112 states:

The specification shall contain a written description of the invention, and of the manner and p r o c e s s of making and using it, in such full, clear, concise, and exact terms as to enable any person s k ille d in the art to which it pertains, or with which it is most nearly connected, to make and use the s a m e , and shall set forth the best mode contemplated by the inventor of carrying out his invention. T h e specification shall conclude with one or more claims particularly pointing out and distinctly c l a i m in g the subject matter which the applicant regards as his invention. A claim may be written in independent or, if the nature of the case admits, in dependent or multiple d e p e n d e n t form. S u b j e c t to the following paragraph, a claim in dependent form shall contain a reference to a claim p r e v i o u s l y set forth and then specify a further limitation of the subject matter claimed. A claim in d e p e n d e n t form shall be construed to incorporate by reference all the limitations of the claim to w h i c h it refers. A claim in multiple dependent form shall contain a reference, in the alternative only, to more than o n e claim previously set forth and then specify a further limitation of the subject matter claimed. A multiple dependent claim shall not serve as a basis for any other multiple dependent claim. A m u ltip le dependent claim shall be construed to incorporate by reference all the limitations of the p a rtic u la r claim in relation to which it is being considered. A n element in a claim for a combination may be expressed as a means or step for performing a s p e c ifie d function without the recital of structure, material, or acts in support thereof, and such c l a i m shall be construed to cover the corresponding structure, material, or acts described in the s p e c i f ic a t i o n and equivalents thereof. A n enablement defense or counterclaim is based on paragraph one of § 112. See Warner-Lambert Co. v. Teva P h a r m s . USA, Inc., 418 F.3d 1326, 1336 (Fed. Cir. 2005).

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N o rbro o k would not be relying on § 112 as a basis for a defense or counterclaim. Norbrook's in ter ro g a to ry answers were consistent with that agreement until it provided Bayer with its s u p p le m e n ta l interrogatory responses on September 17, 2010. While the parties did not stipulate in open court, the principles underlying the e n f o rc e m e n t of the parties' agreement are similar to those cited in Nichia Corp. v. Seoul S e m ic o n d u c to r Co., Ltd., No. C 06-0162 MMC, 2007 WL 2533729, at * 2 (N.D. Cal. Aug. 3 1 , 2007) (stating that "[b]ecause stipulations serve both judicial economy and convenience o f the parties, courts will enforce them absent indications of involuntary or uninformed c o n se n t," citing CDN Inc. v. Kapes, 197 F.3d 1256, 1258 (9th Cir. 1999)). Norbrook does not c o n te n d that its agreement was involuntary or uniformed. Norbrook also knew that it had not e n g a g e d in extensive discovery. While Norbrook represents that its § 112 defense stems in la r g e part from the deposition testimony of the `506 patent inventors which occurred in the last tw o months (Kim Decl. ¶ 8, Ex. 6), it took the risk when it agreed to withdraw the defense th a t it might later learn new or additional facts that would be relevant to a defense under § 112. A g re e m e n ts between counsel must be honored. Therefore, the Court concludes that Norbrook ag ree d to forego any § 112 defense and counterclaim and to that extent will grant Bayer's m o t io n to strike the expert reports and amended interrogatory answers. H o w e v e r, the Court will deny the motion to strike as to Norbrook's reliance on d i f f e re n t prior art than that previously relied on and to its change in theory from obviousness to anticipation. The situation presented is analogous to that of DataQuill, Ltd. v. Handspring, N o . 01 C 4653, 2003 WL 25696445, at *1 (N.D. Ill. Dec. 19, 2003), where the court denied

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a motion to exclude an expert's report that relied upon several prior art references that had not b e e n identified in the party's contention interrogatory responses. In this action, Norbrook's second amended answer and counterclaims cited three p iec e s of prior art as examples. Norbrook also retained the right to supplement its in te rro g a to rie s, and did so once it learned of three prior art references that it asserts provide a basis for an anticipation defense. Bayer will also have sufficient time to take discovery on th e se matters. Rebuttal reports are due on October 15, 2010, and expert discovery does not c lo se until December 17, 2010. (Dkt. 128.) As such, Bayer's motion to strike is denied as to th e new prior art and anticipation defense(s) and counterclaim(s).

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N O W , THEREFORE, BASED ON THE FOREGOING, IT IS HEREBY O R D E R E D THAT: Bayer's Civil Local Rule 7(h) to strike the expert reports of Byrn and Gershwin a n d the amended interrogatory responses of Norbrook (Docket No. 129) is GRANTED to the e x te n t those materials relate to § 112 defense(s) and counterclaim(s) and DENIED to the e x te n t that those reports and amended interrogatory responses relate to the new prior art and a n tic ip a tio n defense(s) and counterclaim(s). Dated at Milwaukee, Wisconsin this 14th day of October, 2010. BY THE COURT

s / Rudolph T. Randa Hon. Rudolph T. Randa U .S . District Judge

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