United States District Court, D. Delaware
GLAXOSMITHKLINE LLC and SMITHKLINE BEECHAM (CORK) LIMITED, Plaintiffs,
GLENMARK PHARMACEUTICALS INC., USA, Defendant. GLAXOSMITHKLINE LLC and SMITHKLINE BEECHAM (CORK) LIMITED, Plaintiffs,
TEVA PHARMACEUTICALS USA, INC., Defendant.
HONORABLE LEONARD P. STARK UNITED STATES DISTRICT JUDGE.
Magistrate Judge Burke issued a 31-page Report and
Recommendation (the "Report") (D.I. 383),
dated May 30, 2017, recommending that the Court (i) deny the
portion of Defendants' motion for summary judgment
related to GSK's claim for lost profits (D.I. 248); (ii)
deny Defendants' motionlto exclude (a) the opinions
offered by GSK's damages expert, Dr. Robert S. Maness,
concerning lost profits, and (b) the results of the survey of
doctors conducted by GSK's survey expert, Dr. Brian C.
Reisetter (D.I. 248); and (iii) grant GSK's motions to
exclude (a) portions of the opinions offered by
Glenmark's damages expert, Dr. DeForest McDuff, and (b)
portions of the opinions offered by Teva's damages
expert, Dr. Sumanth Addanki (Civil Action No. 14-877
(hereinafter, "Glenmark Action") D.I. 209; D.I.
246); WHEREAS, on June 3, 2017, Defendants objected to the
Report (D.I. 394 ("Defendants Objections" or
"Defs Objs")); WHEREAS, on June 7, 2017, GSK
responded to Defendants Objections (D.I. 407 ("GSK
Response" or "GSK Resp")); WHEREAS, the Court
has considered the parties' objections and responses as
they relate to case-dispositive matters de novo, and
has considered their objections and responses as they relate
to non-dispositive matters for clear errors of law and
clearly erroneous findings of fact, see St. Clair
Intellectual Prop. Consultants, Inc. v. Matsushita Elec.
Indus. Co., Ltd., 691 F.Supp.2d 538, 541-42 (D. Del.
2010); 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b)(3);
THEREFORE, IT IS HEREBY ORDERED that:
Defendants' Objections (D.I. 394) are OVERRULED, Judge
Burke's Report (D.I. 383) is ADOPTED, the portion of
Defendants' motion for summary judgment related to lost
profits and the portion of Defendants' motion to exclude
related to the above-referenced issues (D.I. 248) are DENIED,
and GSK's motions to exclude related to the
above-referenced issues (Glenmark Action D.I. 209; D.I. 246)
Defendants object to the Report on two grounds: (1) it
wrongly permits GSK to present a lost profits calculation
that contemplates a "but-for" world that excludes
non-party manufacturers' generic carvedilol products, and
(2) it allows GSK to present its lost profits case without
any showing of causation. (Defs Objs at 1) The Court is
persuaded by neither of Defendants' contentions.
Defendants insist that the but-for world to which comparisons
must be made in order to assess GSK's claim for lost
profits damages is a world in which non-party manufacturers
of generic carvedilol would have existed,  and from which
direct infringers (i.e., physicians) would have obtained
carvedilol. It follows, then, that GSK lost no profits due to
Defendants' allegedly infringing conduct, because even
absent Defendants' infringement, GSK would still have
lost those same sales - albeit to non-party manufacturers,
rather than to Defendants.
However, as the Report explained, "the law is clear that
a lost profits analysis must be based on a world in which
infringement of the asserted patent does not exist, and
therefore it does not allow for infringing alternatives to be
available in the hypothetical 'but for' world."
(Report at 13) The undisputed evidence is that
Defendants' generic carvedilol is interchangeable with
the generic carvedilol of the non-party manufacturers;
therefore, the generic carvedilol of these non-party
manufacturers is an infringing alternative - and
not a noninfringing alternative. These
non-parties' products, thus, would not exist in the
but-for world, which must be constructed to include
"likely outcomes with infringement factored out of
the economic picture."" Grain Processing Corp. v.
Am. Maize-Prods. Co., 185 F.3d 1341, 1350 (Fed. Cir.
1999) (emphasis added).
there is no evidence that the non-party generic manufacturers
could be held liable for induced infringement, while
Defendants are charged only with induced
infringement, does not alter this conclusion. The issue
for the lost profits calculation is whether the product is
non-infringing, not whether the alternative supplier has
been, or could be, successfully sued for infringement. As GSK
correctly states: "It doesn't matter whether the
sales by other generic suppliers would be
non-infringing, because the ultimate use of those
products by doctors would be infringing and thus not
a permissible consideration." (GSK Resp at 7; see
also Id. at 1 ("The 'but for' world can
consider only non-infringing alternatives. Here, doctors
could not use generic carvedilol from other suppliers to
perform the patented method without infringing, so this is
not a permissible alternative."))
Accordingly, because the but-for world is one in which no
infringing alternatives exist, other generic carvedilol
products that directly infringe the '000 patent must be
excluded, even if the sales of those products are not induced
by Defendants. See Chiuminatta Concrete Concepts, Inc. v.
Cardinal Indus., Inc., 1 Fed.App'x. 879, 882-83
(Fed. Cir. 2001) ("[S]ection 271(b) of title 35 states
that 'whoever actively induces infringement of a patent
shall be liable as an infringer.' Thus, appropriate
relief against one inducing infringement may be the same as
the relief against a direct infringer."); Alt Ana
PharmaAG v. Teva, 2013 WL 12157835, at *8 (D.N.J. May
14, 2013) ("[T]the presence of other infringing generics
in the marketplace does not defeat [plaintiffs] entitlement
to lost profit damages on [defendant's] sales.").
the Report found (at 14 n.6), because GSK's motions to
exclude the opinions of Drs. McDuff and Addanki are the
converse of Defendants' lost profits motion - presenting
the same question of whether other generic carvedilol
products should be included in the but-for world and arguing
that Drs. McDuff and Addanki based their opinions on a
misapplication of the law - these motions are granted, and
the opinions at issue are excluded, based on the reasoning of
the Report and that contained in this Order.
Turning to Defendants' attack on the lost-profits
opinions of Dr. Maness, Defendants fault the expert for
relying on a survey that fails to address whether Defendants
actually induced the infringing prescriptions of
carvedilol. (See Defs Objs at 2-3) Because the
survey fails to ask "whether Defendants' actions
caused the doctors' prescribing decisions and, if so, how
many of their carvedilol prescriptions were caused by
Defendants, " it follows - in Defendants' view -
that the survey "provides no evidence that Teva
or Glenmark caused the infringing use, let alone any
evidence of the amount they allegedly caused."
(Id. at 2) However, as the Report explained, Dr.
Maness began his lost profits calculation by using the
physician survey to determine the amount of Defendants'
sales that were potentially infringing (Report at 15, 27) and
then confined his lost profits calculation to that determined
amount (see GSK Resp at 4-5). This method, including
reliance on the survey undertaken by GSK expert Dr.
Reisetter, is not so unreliable as to warrant being excluded.
Instead, Defendants' criticisms go to the weight the
factfinder should give to the opinion.
Court has considered each of the other arguments raised by
Defendants in their Objections and, applying the appropriate
standard of review, finds that each of them lacks merit and
requires no further discussion.