United States District Court, D. Delaware
CHRISTOPHER J. BURKE UNITED STATES MAGISTRATE JUDGE.
Wilmington, Delaware this 24th day of October, 2018.
October 15, 2018, Defendants Sawai Pharmaceutical Co., Ltd.
and Sawai USA, Inc. (collectively, "Sawai") filed a
Motion for Teleconference to Resolve Discovery Dispute
("Motion"), regarding: (1) Plaintiffs Astellas
Pharma Inc., Astellas Ireland Co., Ltd. and Astellas Pharma
Global Development, Inc.'s (collectively,
"Astellas" or "Plaintiffs") supplemental
responses to Defendants' Interrogatory No. 14 ("Rog.
No. 14") concerning secondary considerations/objective
indicia of non-obviousness ("secondary
considerations"); and (2) Sawai's request for the
full regulatory record of Plaintiffs' New Drug
Application ("NDA") (including their supplemental
NDA ("sNDA"))- i.e., all correspondence, amendments
and supplements. (D.I. 340; see also D.I. 342 at 4)
The Court has considered the parties' letter briefs,
(D.I. 342, 343), and the parties' arguments made during
the October 23, 2018 discovery dispute teleconference.
September 2017, Sawai served Rog. No. 14, seeking
identification of Plaintiffs' contentions regarding
secondary considerations, Plaintiffs' underlying factual
bases for those contentions, related documents, and witnesses
with knowledge thereof. (D.I. 342, ex. A at 2)
Plaintiffs' initial response to Rog. No. 14 was, in
essence, a non-response. It provided no meaningful
information, instead simply listing objections and then
Astellas may rely on one or more objective indicia of
non-obviousness, including but not limited to unexpected
results, long-felt need, commercial success, industry
recognition and praise, copying, and failure of others. To
the extent Astellas will rely on such objective indicia and
pursuant to Rule 33(d) of the Federal Rules of Civil
Procedure, Astellas will produce documents demonstrating such
objective indicia of non-obviousness at the appropriate time.
(Id. at 3) Sawai understandably expressed
dissatisfaction with this non-answer and pressed for more.
(See, e.g., id., ex. B at 15) This eventually led to
Plaintiffs providing a supplemental response eight months
later on May 18, 2018 (the "First
Supplement"). (Id., ex. A at 4) Plaintiffs'
First Supplement provided barely any more information than
did their initial response. In that four-paragraph First
Supplement, Plaintiffs confirmed that they would be relying
on evidence of secondary considerations, but otherwise, they
provided only one substantive statement:
Astellas identifies, inter alia, NDA No. 202611, the
Myrbetriq® Label, and the T17, '049, '474 and
'872 patents as relevant to secondary considerations,
inter alia, unexpected results. Astellas further
identifies the following non-exhaustive list of documents as
relevant to, inter alia, praise by others and
commercial success: [5 Bates-stamped documents totaling 43
Secondary considerations can be very important in a case in
which obviousness is a defense to patent infringement.
See, e.g., Crocs, Inc. v. Int'l Trade
Comm'n, 598 F.3d 1294, 1310 (Fed. Cir. 2010).
Plaintiffs themselves acknowledge this, asserting that
"objective indicia of non-obviousness are highly
relevant to rebutting Defendants' obviousness
contentions." (D.I. 343 at 2) When a defendant propounds
an interrogatory seeking factual information regarding this
issue, it is entitled to a meaningful response.
Unfortunately, as of May 2018-a point by which nearly 19
months had passed since this suit was filed, and at a time
when Plaintiffs certainly should have had good handle on
their secondary considerations arguments-Sawai still had not
gotten such a response.
Sawai remained unsatisfied and diligently continued to press
Plaintiffs for additional information. (See D.I. 342
at 2) Ultimately, on September 10, 2018, Plaintiffs served a
12-page second supplemental response (the "Second
Supplement") in which they finally provided meaningful
articulations of their contentions regarding the various
objective indicia of non-obviousness (as well as citation to
relevant related documents). (Id., ex. A at 5-18)
Plaintiffs' Second Supplement, however, came too late, as
it was provided approximately two months after fact discovery
had closed. This is so despite the fact that the Second
Supplement relied substantially "on information and
documents that were available to Plaintiffs months, if not
years, earlier." (D.I. 342 at 3 (emphasis omitted)) Had
Plaintiffs instead responded to Rog. No. 14 in a more timely
manner, Sawai could have followed up appropriately on the
issue during the fact discovery period. Instead, armed with
only Plaintiffs' prior barebones responses, Sawai had no
real opportunity to explore and vet Plaintiffs' positions
during fact discovery. That is unfair to Sawai. And it is
just not the way the discovery process is supposed to work.
its Motion, Sawai now requests that Plaintiffs' Second
Supplement be stricken. (Id. at 4) The problem for
Sawai is that, as poor as Plaintiffs' efforts were in the
initial response and the First Supplement, Sawai cannot meet
the very high standard for exclusion. The Pennypack
factors are applicable to this dispute,  and they do not
support striking Plaintiffs' Second Supplement. At least
four of the Pennypack factors redound in
Plaintiffs' favor. First, as noted above, it is
undisputed that secondary considerations are very important
in a patent case like this one. With respect to the third and
fourth Pennypack factors, trial in this matter is
over seven months away, and the Court believes that the
prejudice that Sawai faces can be cured in sufficient time so
as not to unduly disrupt the order and efficiency of trial.
Finally, there is not enough in the record to permit the
Court to conclude that Plaintiffs' failure to timely
supplement Rog. No. 14 was done in bad faith.
Because the exclusion of critical evidence is such an
"extreme sanction," Int'l Bus. Machs. Corp
v. Priceline Grp. Inc., 271 F.Supp.3d 667, 694 (D. Del.
2017) (internal quotation marks and citation omitted), it is
often hard for movants to show that the Pennypack
factors militate in favor of exclusion (as is the case here).
In a case like this one, where a party utterly fails in its
discovery obligations, but where exclusion of evidence is not
the right result, the Court is left in a tough spot. How does
it follow the law as set out in Pennypack and its
progeny (i.e., not exclude the evidence), but do so in a way
that does not incentivize parties to flout their discovery
obligations in the first place? In this Memorandum Order, the
Court will try to accomplish both parts of this difficult
Accordingly, the Court HEREBY GRANTS-IN-PART Sawai's
Motion as follows: (1) Plaintiffs' Second Supplement is
not stricken from the case, and in making its secondary
considerations case at trial, Plaintiffs and their experts
may rely on any evidence/argument fairly raised in the Second
Supplement. However, absent further order of the Court,
Plaintiffs' reliance on secondary considerations is
limited to the content of the Second Supplement.; (2) Sawai
may take targeted discovery relating to secondary
considerations. The Court expects that the parties will work
cooperatively to complete this focused discovery as
expeditiously as possible. To that end, by no later than
October 31, 2018, the parties shall meet and confer, and
submit a proposed schedule for such discovery, including the
date by which all such discovery shall be completed.; (3) As
part of this supplemental discovery, Plaintiffs shall produce
all correspondence to and from the FDA regarding their
original NDA. Sawai has sufficiently explained the relevance
of such documents, (D.I. 342 at 4), and Plaintiffs made no
argument regarding burden of production with respect to these
documents, (D.I. 343).; (4) In light of Plaintiffs' failure
to diligently comply with their discovery obligations
regarding Rog. No. 14, the Court will entertain a motion from
Sawai for reasonable expenses, including attorney's fees.
Such a request should seek recovery for only those expenses
relating to Plaintiffs' positions on secondary
considerations that Sawai would not have incurred, were
Plaintiffs to have timely disclosed their positions (e.g.,
expenses relating to the re-review of discovery documents
regarding this issue and/or the costs associated with
hereafter deposing or re-deposing a witness relating to this
issue). See Fed. R. Civ. P. 37(c)(1)(A); Grote
v. Wright Med, Grp. Inc., No. 12-CV-2002-LRR, 2013 WL
4670311, at *6 (N.D. Iowa Aug. 30, 2013); cf. Oceans
Cuisine, Ltd, v. Fishery Prods., Int'l, Inc., No.
05-CV-3613 (DRH)(AKT), 2006 WL 1071578, at *2, *4 (E.D.N.Y.
Apr. 21, 2006); Holden Metal v. Wismarq, No. 00 C
191, 2004 WL 1498152, at *1 (N.D. Ill. July 1, 2004).
Because this Memorandum Order may contain confidential
information, it has been released under seal, pending review
by the parties to allow them to submit a single, jointly
proposed, redacted version (if necessary) of the Memorandum
Order. Any such redacted version shall be submitted no later
than October 29, 2018, for review by the Court, along with a
motion for redaction that includes a clear, factually
detailed explanation as to why disclosure of any proposed
redacted material would "work a clearly defined and
serious injury to the party seeking closure." Pansy
v. Borough of Stroudsburg,23 F.3d 772, 786 ...