United States District Court, D. Delaware
before the Court are Plaintiffs motions to strike. (D.I. 214,
240). I have reviewed the parties' briefing.
(D.I. 215, 221, 224, 241, 273, 277).
asserts claims 1-9 of U.S. Patent No. 9, 364, 520 ("the
'520 patent"). (D.I. 1). The '520 patent is
directed to forms of factor VIII, "a protein necessary
for normal blood clotting in response to injury." (D.I.
99 at 1). The patent claims factor VIII conjugates not found
in nature, made up of recombinant factor VIII and one or more
biocompatible polymers chemically bonded to factor VIII at
the protein region known as the "B-domain."
(Id. at 1, 3). The claimed factor VIII conjugates
are formed through a process called pegylation, which is the
conjugation of recombinant factor VIII with polyethylene
glycol ("PEG"), a biocompatible polymer.
(Id. at 5). Claims 1 and 9 are independent claims.
Claims 2-8 depend from claim 1.
accused product is Adynovate, a pegylated factor VIII used to
treat hemophilia A. (D.I. 28 ¶ 25; D.I. 247 at 1).
Hemophilia A is a congenital bleeding disorder caused by
deficient or defective factor VIII. '520 patent at
has filed two motions to strike portions of Defendants'
expert testimony. In the first motion, Plaintiff moves to
strike (1) Dr. Rausser's opinions in his reply expert
report based on allegedly late-disclosed foreign profits
documents, and (2) Dr. Tuddenham's opinions in his reply
expert report based on allegedly new indefiniteness and
noninfringement theories. (D.I. 214, 215). In the second motion,
Plaintiff moves to strike Dr. Zalipsky's opinions in his
reply expert report based on allegedly new indefiniteness and
lack of written description theories. (D.I. 240, 241).
Rule of Civil Procedure 37(c)(1) provides that "[i]f a
party fails to provide information ... as required by Rule
26(a) or (e), the party is not allowed to use that
information . .. to supply evidence on a motion, at a
hearing, or at trial, unless the failure was substantially
justified or is harmless." To determine whether a
failure to disclose was harmless, courts in the Third Circuit
consider the Pennypack factors: (1) the prejudice or
surprise to the party against whom the evidence is offered;
(2) the possibility of curing the prejudice; (3) the
potential disruption of an orderly and efficient trial; (4)
the presence of bad faith or willfulness in failing to
disclose the evidence; and (5) the importance of the
information withheld. Konstantopoulas v. Westvaco
Corp., 112 F.3d 710, 719 (3d Cir. 1997) (citing
Meyers v. Pennypack Woods Home Ownership Ass
'n, 559 F.2d 894, 904-05 (3d Cir. 1977)).
"[T]he exclusion of critical evidence is an
'extreme' sanction, not normally to be imposed absent
a showing of willful deception or 'flagrant
disregard' of a court order by the proponent of the
evidence." Id. The determination of whether to
exclude evidence is within the discretion of the district
Dr. Rausser's Testimony Based on Foreign Profits
Rausser, in his reply expert report, relies on supplemental
forecasts of Adynovate's worldwide operating costs,
including research, development, regulatory, and royalty
costs. (D.I. 216, Ex. J ¶¶ 70-74; D.I. 215 at 5-6).
Defendants produced the forecasts in August 2018, after the
close of fact discovery. (D.I. 215 at 5-6). Notably, Dr.
Rausser criticizes Plaintiffs expert, Dr. Addanki, for
inflating his figures by relying on Adynovate's gross
profits rather than specific operating profits. (D.I. 216,
Ex. J¶¶ 11, 13, 17, 26, 146, 167, 170, 171, 179).
Plaintiff argues that Dr. Rausser's testimony should be
stricken because the forecasts were late-disclosed and
Defendants' witnesses indicated that such forecasts did
not exist. (D.I. 215 at 9). Defendants assert that the
forecasts did not become relevant until Plaintiff revealed
its "surprise" Nash Bargaining theory of damages in
Dr. Addanki's opening expert report. (D.I. 221 at 11-13).
As a preliminary matter, I do not think Dr. Addanki's
report is relevant. The record shows that Plaintiff made
several requests for Defendants' worldwide fmancials.
(See D.I. 216, Ex. B). Defendants were aware of
those requests by June 2018, at the latest, when Plaintiff
submitted a letter to the Court outlining the parties'
related discovery dispute. (D.I. 172 at 1). Plaintiff
specifically indicated that Defendants had failed to produce
"units, costs, profitability, and forecast data"
for "all factor VIII products, including exports for
sale in Europe and Asia."
172 at 2). At the subsequent discovery hearing, Defendants
dropped their objections and agreed to a document swap. (D.I.
180 at 39:11-40:13). Defendants then produced updated
financials reflecting Adynovate and Advate's worldwide
sales and forecast information, which did not include the
supplemental operating costs. (D.I. 215 at 4).
on the updated financials, Plaintiff deposed Baxalta's
Rule 30(b)(6) witness for financial topics, Wolfgang Hackel,
who is Baxalta's Head of Finance in Research and
Development. (D.I. 215 at 4). Mr. Hackel indicated that full
profit and loss statements, which would include specific
categories of operating costs, were not available for
Adynovate or Advate, because that information is not broken
down at the product level. (See, e.g., D.I. 216, Ex.
Eat 107:12-108:24). Other Baxalta witnesses agreed. (D.I. 221
at 5). Defendants do not dispute that its "witnesses
testified that [Baxalta] did not have product-specific profit
and loss ('P&L') statements, and that the
financial documents that Bayer marked [for deposition] lacked
certain cost information." (D.I. 221 at 2). Instead,
Defendants argue that Plaintiff is at fault because it
"never asked the witnesses nor Defendants whether such
cost information existed." (Id.).
argument is illogical. Plaintiff, having been told that no
such statements exist, would have no reason to probe further
or suspect that Defendants were withholding information.
Therefore, I find that the record shows Defendants engaged in
bad faith or willfulness in failing to disclose the
supplemental financials during fact discovery. Thus, the
fourth Pennypack factor weighs in favor of
contrast, the first two Pennypack factors weigh
against exclusion. Plaintiff argues that it has spent hours
deposing fact witnesses on Baxalta's costs, and
"[a]llowing Defendants to use [the] belatedly produced
and likely fabricated profitability information at this late
stage to call into question Dr. Addanki's damages
analysis would be prejudicial to [Plaintiff.]" (D.I. 215
at 13). Dr. Addanki, however, was able to consider the
supplemental forecasts and Dr. Rausser's reply report
before submitting his own reply report. (D.I. 215 at 16).
Defendants also offered Plaintiff an opportunity to depose
the relevant witnesses on the supplemental forecasts,
including an extension for Dr. Addanki's reply report,
which Plaintiff refused. (Id. at 15). I do not think
Plaintiff has identified any substantial prejudice. Plaintiff
will have the opportunity to address the validity of the
supplemental forecasts at trial through deposition testimony,
testimony from Dr. Addanki, and cross-examination of Dr.
third Pennypack factor is neutral. I do not
anticipate that either allowing or excluding Dr.
Rausser's testimony will impact the trial schedule ...